Judge Stephen I. Goorvitch, Case Number: 20STCV25567, Date: 2024-02-09 Tentative Ruling

Judge: Stephen I. Goorvitch, Case: 20STCV25567, Date: 2024-02-09 Tentative Ruling

Case Number: 20STCV25567 Hearing Date: February 9, 2024 Dept: 39

The Hakala Law Group, P.C. v. Paul Kozlov, et al.

Case No. 20STCV25567

Motions for Order of Sale of Dwelling

Motion to Set Aside Default/Default Judgment

The Hakala Law Group, P.C. (“Plaintiff’) filed this action on July 20, 2020, asserting causes of action for breach of contract, unjust enrichment, and fraud against several defendants, including Paul Kozlov (“Defendant”) stemming from unpaid legal fees. Default was entered against Defendant on September 1, 2020.

On November 9, 2020, Plaintiff filed a notice of settlement with respect to other defendants in the case. A default judgment was entered against the remaining defendants, including Defendant, on March 12, 2021. On September 10, 2021, Defendant filed a motion to set aside default and default judgment based upon a lack of service. Then, on April 13, 2022, defendant withdrew the motion. Unbeknownst to the Court, Plaintiff and Defendant settled this action on April 6, 2022. (See Declaration of Paul Kozlov, Exh. A.) The settlement agreement provided that Defendant would pay a total of $32,717.56, of which $17,717.56 had already been paid. (See id., ¶ 1.2.) Defendant agreed to pay the remaining $15,000 in installments over the course of nine months. (See ibid.) Defendant agreed take the motion to set aside default and default judgment off-calendar as part of the settlement agreement. (See id., ¶ 1.4.) Instead, the parties agreed that Plaintiff would file a request for dismissal with prejudice within ten business days of Defendant’s final payment. (See ibid.) Plaintiff did not file a notice of settlement as required by California Rules of Court, rule 3.1385, so the Court was unaware of the parties’ settlement. The settlement agreement provides that the Court shall retain jurisdiction to enforce the agreement under Code of Civil Procedure section 664.6. (See ibid.)

On September 7 and 8, 2023, Plaintiff filed applications seeking orders authorizing the sale of residential property. Nowhere in the applications did Plaintiff inform the Court that there had been a settlement agreement and that Defendant had paid at least some of the judgment. Rather, Plaintiff represented:

“On or about March 12, 2021, a Judgment was entered in this case in favor of The Hakala Law Group, P.C. (hereinafter ‘Judgment Creditor’) and against Paul Kozlov (hereinafter ‘Judgment Debtor’) in the amount of $123,279.78. The Judgment is not based on a consumer debt. A true and correct copy of the Judgment is attached as Exhibit ‘A’ to the Declaration of Martin B. Greenbaum (hereinafter ‘Declaration’). The Judgment has not been paid. See Declaration.”

(Plaintiff’s Applications, ¶¶ 7 & 8.) The accompanying declaration contains the same representations and does not inform the Court that there was a settlement agreement in this case, which was allegedly breached, giving rise to these applications. (See Declaration of Martin B. Greenbaum, ¶¶ 3 & 4.)

In response, Defendant filed a motion titled “Motion to set aside fault and find determination of good faith settlement and for an award of attorney’s costs and fees.” Defendant argues that he complied with the settlement agreement, having made all required payments, which Plaintiff accepted. Defendant also argues that even if there was a breach of the agreement, Plaintiff did not follow the required procedure to declare a breach. Based upon the foregoing, Plaintiff seeks a dismissal of the case, per the settlement agreement. The Court has jurisdiction to enforce the settlement agreement because the parties stipulated that the Court could retain jurisdiction under section 664.6.

The Court construes Defendant’s motion as one to enforce the settlement agreement, which seeks dismissal with prejudice. Code of Civil Procedure section 664.6 provides that “[i]f parties to pending litigation stipulate, in a writing signed by the parties outside the presence of the court or orally before the court, for settlement of the case, or part thereof, the court, upon motion, may enter judgment pursuant to the terms of the settlement.” (Code Civ. Proc., § 664.6.) In ruling on a motion to enter judgment, the Court acts as a trier of fact. The Court must determine whether the parties entered into a valid and binding settlement. To do so, the Court may receive oral testimony in addition to declarations. (Kohn v. Jaymar-Ruby, Inc. (1994) 23 Cal.App.4th 1530, 1533.)

Plaintiff’s counsel argues that Defendant breached the settlement agreement but advances no evidence in support of those assertions. (See Plaintiff’s Opposition, pp. 13-14.) Admittedly, the notice of motion is not a model of clarity, and Plaintiff’s counsel may not have understood that he would need to litigate this issue. Therefore, to ensure proper notice and opportunity to be heard, the Court orders as follows:

1. The Court provides notice that it construes Plaintiff’s motion as a motion to enforce the settlement agreement under Code of Civil Procedure section 664.6, which seeks a dismissal with prejudice, based upon the contents of the notice of motion and memorandum of points and authorities.

2. The Court advances and continues the hearings on the pending motions to April 11, 2024, at 8:30 a.m.

3. Defendant may file a supplement to the motion, which includes any evidence concerning his compliance with the settlement agreement that was omitted from the prior motion.

4. Plaintiff may file a supplemental opposition to the motion, which includes any evidence concerning Defendant’s alleged breach of the settlement agreement.

5. Defendant may file a supplemental reply brief.

6. All briefing shall be due based upon statutory deadlines.

7. The Court’s clerk shall provide notice.