Judge: Steven A. Ellis, Case: BC717451, Date: 2023-07-20 Tentative Ruling
Case Number: BC717451 Hearing Date: September 15, 2023 Dept: 29
TENTATIVE
Defendants’ motion to enforce settlement agreement under Code of
Civil Procedure section 664.6 is GRANTED.¿
Background¿
This action arises from a motor vehicle
collision that occurred on December 17, 2017. Plaintiff Ronald Russell
(“Plaintiff”) alleges he was a passenger in a LACMTA van driven by LACMTA
employee Victor Joe Romero when the LACMTA van collided with a car being driven
by Quin Hui Cham. Plaintiff sued
Defendants LACMTA, Romero, Quin Hui Cham and Phuc Cham for negligence. LACMTA filed a cross-complaint against Quin
Hui Cham and Phuc Cham for indemnity, contribution and declaratory relief.
In April 2020, Defendants Quin Hui Cham and
Phuc Cham (“Defendants”) settled with Plaintiff for $1,500. (Wang Decl., Exh. A.) Plaintiff deposited the settlement check in
August 2020. (Id., Exh. B.) On December 18, 2020, the Court denied the
Application for Determination of Good Faith Settlement with Plaintiff filed by
Defendant Quin Hui Cham.
There have been extensive pre-trial
proceedings, which the Court will not summarize here. Recently, on July 20, 2023, the Court denied
Defendants’ motion for summary judgment.
On August 2, 2023, Defendants filed this
motion to enforce the settlement agreement with Plaintiff under Code of Civil
Procedure section 664.6. Plaintiff filed
an opposition on August 18. Defendants
filed a reply on August 24.
The matter
was heard on August 31, 2023. At the
conclusion of the hearing, the Court continued the hearing to September 15 and
ordered supplemental briefing. Plaintiff
submitted his supplemental brief and evidence on September 6. Defendants submitted their supplemental brief
and evidence on September 8.
Legal Standard
Enforcement of
settlement agreements is governed by Code of Civil Procedure section 664.6.
This statute provides, in relevant part:
If the 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.
If requested by the parties, the court
may retain jurisdiction over the parties to enforce the settlement until
performance in full of the terms of the settlement.¿
¿
(Code Civ. Proc.
§ 664.6, subd. (a).) 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.)
Discussion
Defendants move for an order to enforce the
settlement against Plaintiff pursuant to Code of Civil Procedure section
664.6. It is not disputed (a) that
Plaintiff and Defendants signed a written settlement agreement in April 2020;
and (b) that Defendants paid the settlement amount by check, which Plaintiff accepted
and then deposited in August 2020. (Wang
Decl., ¶¶ 5-6 & Exhs. A-B.)
Plaintiff’s
only argument in opposition is that the settlement agreement states that the
settlement “is made in good faith and pursuant to Section 877 of the California
Code of Civil Procedure” (Wang Decl., Exh. A, at p. 1), but the Court denied
Defendants’ request for a good faith determination. According to Plaintiff, the agreement was
contingent on obtaining a judicial determination of good faith.
The
difficulty with Plaintiff’s argument, however, is that the agreement says
nothing about it being contingent on a judicial determination of good faith (or
any other contingency). And the
agreement states that it is “the entire agreement between the parties.” (Id.,
at p. 2.) Settling parties certainly can make a settlement agreement contingent
on a judicial determination of good faith, but here Plaintiff and Defendants
did not do so.
Nonetheless,
there is something unusual about this case.
The parties settled in early 2020.
It is now late 2023. For more
than three-and-a-half years, no one brought up the settlement agreement in the
litigation, Plaintiff never dismissed his claims against Defendants, and
Defendants never sought to enforce the settlement agreement. Indeed, Defendants went through the trouble (and
expense) of filing a motion for summary judgment against Plaintiff, which the
Court denied, when the much simpler, quicker, and less expensive option of
filing a motion to enforce the settlement was available to them. What happened?
At
the hearing on August 31, and in the supplemental briefing, the parties
discussed whether the delay in seeking to enforce the settlement, coupled with
the pursuit of ongoing litigation, could lead to the conclusion that Defendants
are now equitably estopped from seeking to enforce the settlement
agreement. Evidence Code section 623
provides:
Whenever a party has, by his
own statement or conduct, intentionally and deliberately led another to believe
a particular thing true and to act upon such belief, he is not, in any
litigation arising out of such statement or conduct, permitted to contradict
it.
As
the California Supreme Court has explained:
Generally speaking, four
elements must be present in order to apply the doctrine of equitable estoppel:
(1) the party to be estopped must be apprised of the facts; (2) he must intend
that his conduct shall be acted upon, or must so act that the party asserting
the estoppel had a right to believe it was so intended; (3) the other party
must be ignorant of the true state of facts; and (4) he must rely upon the
conduct to his injury.
(Honeywell
v. Workers’ Compensation Appeals Board (2005) 35 Cal.4th 24, 37.) The proponent of the estoppel has the burden
of proving each element by clear and convincing evidence. (State Compensation Insurance Fund v.
Workers’ Compensation Appeals Board (1985) 40 Cal.3d 5, 16; In re
Marriage of Brinkman (2003) 111 Cal.App.4th 1281, 1289.)
The
Court has reviewed the evidence and argument of the parties and finds that
Plaintiff has not shown that the doctrine of equitable estoppel applies
here. Plaintiff presents no evidence of
his own reliance or lack of knowledge (or, for that matter, any evidence at
all, other than a declaration from his attorney and some documents from the
court file). Also, Plaintiff received
the settlement payment, deposited it into his account, and has at all times
retained the funds – if he truly believed that the settlement was void or unenforceable,
he would have had an obligation to return the settlement payment to Defendants
(or at least tender the return payment).
There is no evidence in this case that Plaintiff was misled or confused
about the validity of the settlement based upon anything that Defendants said
or did – or that Plaintiff relied upon any statements or conduct of Defendants
to his detriment.
In
making this ruling, the Court is giving no weight to the explanation proffered
by counsel for the Defendants, an explanation that the Court does not find to
be credible. If anything, Defendants’
mistake seems to be a more likely explanation for their conduct. But, as noted
above, the burden of proof here rests with Plaintiff, as the proponent of the
estoppel, and not Defendants, and Plaintiff has not carried that burden.
At
the end of the day, the Court finds on this record that there is not a
sufficient basis to estop Defendants from enforcing the otherwise valid settlement
agreement. Defendants’ delay is
certainly odd, and it is unexplained, but delay itself is not a defense to enforcement
of a contract, particularly where, as here, Plaintiff has at all times retained
the benefits of the contract (the settlement payment).
Finally,
the Court notes that when a settlement is found not to be in good faith, the amount paid by
the settling tortfeasor is credited against damages assessed against the nonsettling tortfeasors;
if the judgment results in a nonsettling tortfeasor paying more than its equitable share of liability, it may
seek contribution from the settling tortfeasor. (See, e.g., Leung v. Verdugo Hills Hospital (2012) 55 Cal.4th 291, 301-302, 308.)
Conclusion
Based on the foregoing, the Court GRANTS Defendants’ motion to
enforce their settlement agreement with Plaintiff.
Pursuant to Code of Civil Procedure section 664.6, Plaintiff Ronald
Russell’s claims against Defendants Quin Hui Cham and Phuc Cham are dismissed with prejudice.
Moving party is ordered to give
notice.