Todd R Lugli vs HomePeople Corp
Case No: 1487261
Hearing Date: Wed Jun 05, 2019 9:30

Nature of Proceedings: Vacate Voluntary Dismissal

TENTATIVE RULING: Plaintiffs’ motion for order vacating the voluntary dismissal entered on December 9, 2015, and for entry of judgment pursuant to the terms of the stipulated judgment is granted as set forth herein.

BACKGROUND:

On March 5, 2015, plaintiffs Todd R. Lugli, Trustee of the Alpha Trust, and Nikki Lugli, Trustee of the Nikki Trust, filed their complaint against defendants HomePeople Corporation and Tarik Sansal for breach of contract, money lent, money had and received, and promissory fraud. Plaintiffs allege that they each loaned the sum of $100,000.00 ($200,000.00 total) to defendants in exchange for quarterly interest payments and secured shares of convertible stock in defendant company. On December 2, 2015, during the pendency of the action, plaintiffs and defendants entered into and signed a stipulated settlement agreement. The settlement agreement specifically provides that the court is to retain jurisdiction to enforce the settlement. On December 9, 2015, plaintiffs filed a request for dismissal of the complaint with prejudice and the court entered the dismissal that day.

Defendants subsequently defaulted on their obligation to make payments to plaintiffs as required by the settlement agreement. Plaintiffs now move the court for an order vacating the voluntary dismissal of the action entered on December 9, 2015, and for entry of judgment in favor of plaintiffs and against defendants pursuant to the stipulated settlement in the case. There is no filed opposition to the motion.

ANALYSIS:

The court has the authority to retain jurisdiction to enforce the terms of a settlement agreement. Code of Civil Procedure Section 664.6 provides:

“If 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.”

After the present action was filed, but before trial, the parties entered into a stipulated settlement agreement. (O’Brien Dec., ¶2, Ex. A, Settlement Agreement and Release.) The settlement agreement specifically provides that the court is to retain jurisdiction to enforce the terms of the settlement agreement. The agreement states:

“Each Party to this Agreement acknowledges, stipulates and agrees that the settlement which is the subject matter of this Agreement, which is reflected herein, is enforceable pursuant to the provisions of Code of Civil Procedure §664.6. Any motion to compel enforcement, or to enter judgment pursuant to the terms of this Agreement, may be heard before the Superior Court of the State of California, County of Santa Barbara.”

(O’Brien Dec., ¶2, Ex. A, Settlement Agreement and Release, §4.9.)

On December 9, 2015, plaintiffs filed a request for dismissal of the complaint with prejudice, but failed to request that the court retain jurisdiction to enforce the terms of the settlement agreement. The court entered the dismissal that same day. Defendants thereafter defaulted on their obligation to make payments to plaintiffs as required by the settlement agreement. (O’Brien Dec., ¶5.) Because plaintiffs mistakenly failed to ask the court to retain jurisdiction to enforce the settlement agreement when they filed their request for dismissal, they now, by noticed motion, ask the court to set aside the dismissal, pursuant to Code of Civil Procedure Section 473, subdivision (b), and to enter judgment pursuant to the terms of the stipulated settlement agreement and stipulated judgment.

Where a settlement agreement provides that the court shall retain jurisdiction to enforce the settlement, but the dismissal fails to provide for retained jurisdiction, the plaintiff may move to vacate or modify the dismissal under Section 473, subdivision (b), due to “mistake, inadvertence, surprise, or excusable neglect.” Basinger v. Rogers and Wells (1990) 220 Cal.App.3d 16, 21. Section 473, subdivision (b), provides:

“The court may, upon any terms as may be just, relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect.”

Here, the parties all agreed that the court was to retain jurisdiction to enforce the terms of the stipulated settlement agreement pursuant to Section 664.6. (O’Brien Dec., ¶2, Ex. A, Settlement Agreement and Release, §4.9.) However, when plaintiffs filed their request for dismissal, they failed to request that the court retain jurisdiction. This clearly was a mistake and contrary to what was expressly stated in the settlement agreement. (O’Brien Dec., ¶6.) Accordingly, the court will grant plaintiffs’ request to vacate the voluntary dismissal entered on December 9, 2015, pursuant to Code of Civil Procedure Section 473, subdivision (b). As set forth in the stipulated settlement agreement and judgment, judgment is ordered entered as follows:

● Judgment in favor of plaintiff Todd R. Lugli, Trustee of the Alpha Trust, and against defendant HomePeople Corporation, in the principal amount of $118,750.00, plus interest at the rate of 15% per annum from January 15, 2016, plus $6,250.00 in attorney’s fees and costs, less any payments already made.

● Judgment in favor of plaintiff Nikki Lugli, Trustee of the Nikki Trust, and against defendant HomePeople Corporation, in the principal amount of $118,750.00, plus interest at the rate of 15% per annum from January 15, 2016, plus $6,250.00 in attorney’s fees and costs, less any payments already made.

(O’Brien Dec., ¶4, Ex. A, Stipulation for Entry of Judgment.)

Plaintiffs shall provide notice.