Judge: Stephen P. Pfahler, Case: 21CHCV00008, Date: 2023-08-22 Tentative Ruling

Case Number: 21CHCV00008    Hearing Date: August 22, 2023    Dept: F49

Dept. F-49

Date: 8-22-23

Case #21CHCV00008

Trial Date: N/A

VACATE STIPULATED SETTLEMENT JUDGMENT

MOVING PARTY: Defendants, People’s Party, et al.

RESPONDING PARTY: Plaintiffs, FW CA-Granada Village, LLC

RELIEF REQUESTED

Motion to Set Aside Stipulated Judgment

SUMMARY OF ACTION

On January 6, 2021, FW CA-Granada Village, LLC filed a complaint for breach of lease, and breach of guaranty arising from the lease of certain commercial premises in Granada Hills. On February 23, 2021, Tavistock Freebirds, LLC answered the complaint. On March 23, 2021, Tavistock Freebirds, LLC filed a cross-complaint against People’s Party, LLC dba Gorditos Gloria and Gloria Govan, for Equitable, Express, and Implied Indemnity.

On June , 2021, FW CA-Granada Village, LLC filed a complaint for breach of lease, and breach of guaranty against Tavistock Freebirds, LLC dba Freebirds World Burrito, People’s Party, LLC dba Gorditos Gloria, and Gloria Govan, People’s Party, LLC dba Gorditos Gloria, and Gloria Govan answered the first amended complaint on June 3, 2021; Tavistock Freebirds, LLC dba Freebirds World Burrito, answered on June 6, 2021.

On April 14, 2022, FW CA-Granada Village, LLC, dismissed the action pursuant to a purported settlement agreement with retention of jurisdiction pursuant to Code of Civil Procedure section 664.6. On July 26, 2023, the court entered a judgment in favor of FW CA-Granada Village, LLC, for $190,000 against People’s Party, LLC dba Gorditos Gloria, and Gloria Govan following the May 30, 2023, ex parte order.

RULING: Denied.

Evidentiary Objections: Overruled.

Judgment Debtor People’s Party, LLC dba Gorditos Gloria, and Gloria Govan move to set aside the parties’ stipulated judgment. Judgment Debtors maintain the judgment was improperly entered, due to both delivery of the May 6, 2023, payment due under the agreement, and counsel for Judgment Creditor failing to notify Judgment Debtors of the continued ex parte hearing for entry of the judgment from May 25, 2023, to May 30, 2023. Judgment Creditor in opposition maintains a default occurred, and denies any deprivation of notice as the ex parte was taken under submission by the court on May 25, 2023, and an order issued on May 30, 2023. Judgement Debtor in reply contends the opposition “fails to address the grounds of the. Motion except to make unsubstantiated assertions.” Judgment Debtor reiterates the factual argument regarding the $55,000 “third and final payment” under the agreement, and maintains Judgment Creditor “misleads” the court with the representation of a default. Judgment Debtor contends the evidence is properly presented and not subject to objection. Finally, Judgment Debtor reiterates the lack of any “notice of the continuance of the May 25, 2023, ex parte application to may 30, 2023.

Notwithstanding the lack of a hearing entering the dismissal pursuant to the settlement agreement, the dismissal of the action occurred ostensibly under Code of Civil Procedure section 664.6, and entry of judgment occurred based on a represented breach of the agreement.

Strict compliance with the statutory requirements is necessary before a court can enforce a settlement agreement under this statute. (Sully-Miller Contracting Co. v. Gledson/Cashman Construction, Inc. (2002) 103 Cal.App.4th 30, 37.) Accordingly, “parties” under section 664.6 means the litigants themselves, not their attorneys. (Levy v. Superior Court (1995) 10 Cal.4th 578, 586 (holding “we conclude that the term ‘parties’ as used in section 664.6 means the litigants themselves, and does not include their attorneys of record.”).) Additionally, the settlement must include the signatures of the parties seeking to enforce the agreement, and against whom enforcement is sought. (J.B.B. Investment Partners, Ltd. v. Fair (2014) 232 Cal.App.4th 974, 985.)

“Section 664.6 was enacted to provide a summary procedure for specifically enforcing a settlement contract without the need for a new lawsuit.” (Weddington Prods., Inc. v. Flick (1998) 60 Cal.App.4th 793, 809.) When ruling on a section 664.6 motion, the trial court acts as a trier of fact to determine whether a settlement has occurred, which is also an implicit authorization for the trial court to interpret the terms and conditions to settlement. (Id.) The court may not “create the material terms of a settlement,” and must instead decide on what terms the parties agreed upon. (Id.; Terry v. Conlan (2005) 131 Cal.App.4th 1445, 1460; Osumi v. Sutton (2007) 151 Cal.App.4th 1355, 1360; Fiore v. Alvord (1985) 182 Cal.App.3d 561, 565-566.) “In acting upon a section 664.6 motion, the trial court must determine whether the parties entered into a valid and binding settlement of all or part of the case. In making this determination, trial judges, in the sound exercise of their discretion, may receive oral testimony or may determine the motion upon declarations alone.” (Corkland v. Boscoe (1984) 156 Cal.App.3d 989, 994.)

The subject motion essentially constitutes a challenge to the enforcement of the settlement agreement. Judgment Debtors first seeks relief under Code of Civil Procedure section 128, subdivision (a)(8), which Judgment Creditors challenge its application.

“(8) To amend and control its process and orders so as to make them conform to law and justice. An appellate court shall not reverse or vacate a duly entered judgment upon an agreement or stipulation of the parties unless the court finds both of the following:

(A) There is no reasonable possibility that the interests of nonparties or the public will be adversely affected by the reversal.

(B) The reasons of the parties for requesting reversal outweigh the erosion of public trust that may result from the nullification of a judgment and the risk that the availability of stipulated reversal will reduce the incentive for pretrial settlement.”

Code Civ. Proc., § 128

The section applies to contempt proceedings. The court finds no applicability to a judgment entered pursuant to a stipulated dismissal and subsequent enforcement under the plain language of the statute.

Judgment Debtors alternatively move for equitable relief on grounds of extrinsic factors regarding the entry of the default. (In re Marriage of Park (1980) 27 Cal.3d 337, 342; Zastrow v. Zastrow (1976) 61 Cal.App.3d 710, 714.) Counsel acknowledges notice of the May 25, 2023, hearing. Counsel contends that moving counsel “did not make any attempt to find out if I [would appear] or [present any opposition].” [Declaration of Mario Rivera.] Notwithstanding, the May 25, 2023, minute order from Department 51 (covering for Department 49 on this day) shows both attorneys appearing, with moving counsel admittedly appearing remotely, due to a conflicting hearing on the same date in a different courthouse. Counsel implies to a lack of actual opportunity to argue due to “being told” the matter was being transferred back to Department 49, without any notice of a continuance date, and no mention of any submission. Notice of the motion being taken under submission was mailed by the clerk of the court on the same date, though counsel denies receiving such notice in the mail until June 1, 2023. [Id.] Counsel repeatedly continues to maintain a second hearing occurred on May 30, 2023, even though no court order of such a proceeding exists. [Id.] The court otherwise notes no apparent effort by moving counsel to apprize the court of any limitations in presenting necessary information or argument to the court at the time of the May 25, 2023, remote appearance. The court declines to infer intentions or practices from unmade statements.

On May 30, 2023, the court issued its order entering judgment. The order was granted as a submitted matter, again, with no further hearing indicated on the docket. On this record, the court finds no basis for equitable relief based on a deprivation of due process rights in the form of extrinsic fraud or mistake arising from the inability to appear for the hearing. Once again, nothing in the declaration specifically indicates an inability to present argument, a request for a continuance, or any other explanation for the state of the hearing. Additionally and repeatedly, the court docket shows no transfer of the hearing or second hearing in either Department 49 or 51 ever occurring.

As for the dispute over the payment, Judgment Creditor continues to maintain the debt remains in default. [Declaration of Theresa Goetz.] The court accepts the declaration of moving counsel regarding the second tender of payment. The court also accepts the copy of the purported bank statement from Bank of America that a transfer of $55,000 was made on May 6, 2023. [Rivera Decl., Ex. D.] Nevertheless, the dispute apparently arises from a denial of any receipt of payment due on May 1, 2023, and confirmed with counsel regarding non-receipt on May 12, 2023. [Declaration of Zachary Park.] Said dispute was articulated and presented to the court in the May 25, 2023, ex parte motion, whereby counsel in fact acknowledged the payment due, but continues to maintain it was never received after the represented May 6, 2023, date. Thus, a breach of the agreement occurred, thereby entitling Judgment Creditor to a judgment. [Park Decl., Ex. 1.]

The court finds no basis of authority presented by moving parties to both effectively review the factual findings supporting the prior entry of judgment, and conduct a new evidentiary review of the underlying claims regarding timeliness of payment, including potential reasons for the failure of the wire transfer process. To the extent Judgment Debtor effectively seeks a motion for reconsideration of the underlying order entering judgment, the court lacks jurisdiction to review the entry of judgment entered into by another court, even if covering for this court, barring a showing of unavailability. No such argument or showing was presented. (Ziller Electronics Lab GmbH v. Superior Court (1988) 206 Cal.App.3d 1222, 1232; see Harth v. Ten Eyck (1941) 16 Cal.2d 829, 834.)

The motion is denied.

Motion for Attorney Fees set for October 20, 2023.

Judgment Debtors to give notice.