Tentative Ruling

Judge Donna Geck
Department 4 SB-Anacapa
1100 Anacapa Street P.O. Box 21107 Santa Barbara, CA 93121-1107

CIVIL LAW & MOTION
Joe Granada et al vs Regents of the University of California et al
Case No: 18CV00086
Hearing Date: Fri Feb 21, 2020 9:30

Nature of Proceedings: Motion: Enforce Settlement/Second Renewed

TENTATIVE RULING:

For the reasons set forth herein, the renewed motion of defendants Regents of the University of California and Stephen Klock to enforce settlement pursuant to Code of Civil Procedure section 664.6 is granted as to defendant Regents and is denied, without prejudice, as to defendant Klock. Defendants shall prepare and lodge a judgment consistent with this ruling.

Background:

On January 8, 2018, plaintiffs Joe Granada, Jaime Flores Polanco, Alejandro Saavedra, Estaban Mora, Ismael Rodrigues, and Eduardo Isqueda filed their original complaint in this action against defendants Regents of the University of California (Regents) and Stephen Klock.

On March 8 and May 17, 2019, the parties went to a mediation represented by counsel. (Miller decl., ¶ 2.) At the mediation on May 17, the parties agreed to a settlement. (Miller decl., ¶¶ 3-5 & exhibit A.) (Note: The declaration continues to fail to include electronic bookmarks for exhibits as required by Rules of Court, rule 3.1110(f)(4). The court has pointed this out more than once and expects counsel to follow all applicable rules, including those of formatting.) Thereafter, the settlement agreement was signed by officers of the Regents. (Miller decl., ¶ 6 & exhibit B.) Each of the plaintiffs signed a “short form” written settlement agreement. (Miller decl., exhibit A.)

Plaintiffs did not agree to sign the long form settlement agreement. (Blackwell decl., ¶¶ 2-8.)

On August 29, 2019, defendants Regents and Klock filed their original motion to enforce settlement pursuant to Code of Civil Procedure section 664.6.

On September 26, 2019, the parties entered into a stipulation filed with the court in response to the court’s tentative ruling denying the original motion to enforce settlement without prejudice. This stipulation states that “Plaintiffs signed Settlement Agreement and Mutual Release Agreements on May 17, 2019, but subsequently Plaintiffs indicated they will not comply with the terms of the parties’ settlement agreement” and that “counsel for The Regents is in the process of obtaining the necessary signatures from The Regents and will then file a renewed motion to enforce settlement.” (Stipulation and Order, filed Sept. 26, 2019, pp. 1, 2.)

On November 5, 2019, the parties entered into a further stipulation filed with the court restating much of the first stipulation with the update that “counsel for The Regents has now obtained the necessary signatures from The Regents and will then file a renewed motion to enforce settlement.” (Stipulation and Order, filed Nov. 5, 2019, p. 2.)

On November 6, 2019, defendants filed their first renewed motion to enforce settlement pursuant to Code of Civil Procedure section 664.6. The motion was opposed by plaintiffs.

On December 20, 2019, at the hearing of the first renewed motion to enforce settlement, counsel for plaintiffs handed counsel for defendants written notices of withdrawal of plaintiffs’ respective consent and revocation of their acceptance of the settlement agreements. (Miller decl., ¶ 7 & exhibit C.) The court denied the first renewed motion to enforce settlement without prejudice on the grounds, among others, that the defendants provided evidence regarding authority for signatures on behalf of the Regents only in reply.

On January 28, 2020, defendants filed this, their second renewed motion to enforce settlement. The motion is opposed by plaintiffs.

Analysis:

“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.” (Code Civ. Proc., § 664.6.)

Plaintiffs oppose the motion on the grounds that (1) plaintiffs withdrew their consent prior to anyone signing the agreements on behalf of defendants, (2) plaintiffs withdrew their consent to the settlements prior to approval of the agreements by the Regents, (3) there is no evidence as to the identity of the signatures on behalf of the Regents, (4) there is no evidence that the Regents have approved the settlements, and (5) defendant Klock has not signed the agreements.

Plaintiffs’ arguments conflate issues of the existence of the settlement agreements with enforceability of the settlement agreements under section 664.6. (Note: There are separate agreements for each of the plaintiffs. There are a few terms specific to each of the plaintiffs; the principal terms, apart from payment amounts, are otherwise the same. Unless otherwise indicated, a reference to a settlement agreement is to each of the settlement agreements, mutatis mutandis.)

As identified by the court in its tentative decision for the original motion to enforce settlement, the absence of signatures on behalf of the Regents and the presence of the provision that the agreement was “subject to the Regents’ approval” left the court without a basis to find that an agreement then existed that was enforceable under section 664.6. In ruling on the first renewed motion, the court identified that the court then had before it settlement agreements signed by an authorized corporate representative of the Regents, but that evidence was only provided in reply. Now, in addition to the stipulation quoted above, there is evidence that the Regents both approved the settlement agreement and signed the settlement agreement at least as early as the November 5, 2019, stipulation. (Miller decl., ¶ 6 & exhibit B; Hamill decl., ¶ 6.)

“ ‘A settlement agreement is a contract, and the legal principles [that] apply to contracts generally apply to settlement contracts.’ [Citation.] Its validity is thus ‘judged by the same legal principles applicable to contracts generally.’ [Citations.]” (Stewart v. Preston Pipeline Inc. (2005) 134 Cal.App.4th 1565, 1585.) “Here, the settlement agreement itself demonstrated each element of the contract. It identified the parties, facially evidenced mutual consent, had a lawful object of resolving litigation, and contained mutual promises (sufficient consideration).” (Id. at p. 1586.) A settlement agreement may be binding under contract principles and enforceable through traditional means (e.g., summary judgment, separate suit, or amendment to the pleadings) even if the settlement agreement is not enforceable under the procedure set forth in section 664.6. (Murphy v. Padilla (1996) 42 Cal.App.4th 707, 716.)

Based upon plaintiffs’ arguments, it is useful first to determine whether there is a binding settlement agreement under contract principles and then to determine whether the additional requirements of section 664.6 are met. “Mutual assent to contract is based upon objective and outward manifestations of the parties; a party’s ‘subjective intent, or subjective consent, therefore is irrelevant.’ [Citations.]” (Stewart v. Preston Pipeline Inc., supra, 134 Cal.App.4th at p. 1587.) As stated above, there are objective manifestations of consent by all parties other than Klock by each party’s signature. (Klock’s assent is discussed below.) Plaintiffs argue, however, that their revocation of acceptance is sufficient to negate mutual assent and the formation of those contracts.

“[W]hen interpreting a contract, we strive to interpret the parties’ agreement to give effect to all of a contract’s terms, and to avoid interpretations that render any portion superfluous, void or inexplicable.” (Brandwein v. Butler (2013) 218 Cal.App.4th 1485, 1507.) The settlement agreement was conditioned upon approval by the Regents. Even construing the settlement agreement most favorably to the plaintiffs, the Regents provided their approval and authorized signatures no later than November 5, 2019. “A proposal may be revoked at any time before its acceptance is communicated to the proposer, but not afterwards.” (Civ. Code, § 1586.) As the court previously ruled, plaintiffs’ evidence does not support revocation or withdrawal of consent prior to the Regents’ approval. Their refusal to comply with terms of settlement was made while also essentially affirming the existence of the agreements, i.e., contracts. The written revocation provided in December 2019 was ineffective as occurring after approval and signature by the Regents, the only condition to effectiveness of the agreements.

With respect to Klock, Klock provides his own declaration in support of this motion stating that his counsel was authorized on his behalf to resolve the claims against him at the March 8, 2019, and May 17, 2019, mediations. (Klock decl., ¶ 2.) Klock is a party to the settlement agreement. The evidence shows that Klock authorized his counsel to settle this action on his behalf. Express authorization is sufficient for an attorney to bind his client in a settlement. (See Stewart v. Preston Pipeline Inc., supra, 134 Cal.App.4th at p. 1582.)

Plaintiffs offer the unsworn letter from Elizabeth Granada asserting that plaintiffs do not want the settlement agreement to be enforced. (Reyes decl., ¶ 5 & exhibit C.) The letter is not admissible evidence and may most charitably by viewed as additional argument in opposition to this motion. However, as argument, it fails to provide any factual or legal basis for finding that the settlement agreement actually agreed by plaintiffs should not be enforced according to its terms. The court finds that there is a binding settlement agreement between plaintiffs and defendants that was not validly revoked.

The remaining issue is whether the settlement agreement is enforceable under section 664.6. Previously, the court identified the absence of signatures by the Regents and by Klock as an impediment to enforcement under section 664.6. There are now effective signatures for the Regents, but still—somewhat inexplicably given that this is the second renewed motion in which this was raised as an issue—no signature from Klock. As noted above, Klock has expressly stated his authorization for approval by counsel. However, absent Klock’s signature, the settlement agreement is not enforceable by Klock under section 664.6, even if it is enforceable as a contract by traditional means. (See Harris v. Rudin, Richman & Appel (1999) 74 Cal.App.4th 299, 305–306.) The motion must therefore be denied as to Klock.

The remaining question is whether the motion can be granted as to the Regents notwithstanding the absence of a signature by Klock. “We read the statute’s requirement of a writing ‘signed by the parties’ to require the signatures of the parties seeking to enforce the agreement under section 664.6 and against whom the agreement is sought to be enforced.” (Harris v. Rudin, Richman & Appel, supra, 74 Cal.App.4th at p. 305.) “Notably, our holding does not interpret section 664.6 to require the signature of all of the parties in the action. Certainly we can conceive of a multiple party litigation where some, though not all of the parties enter into a settlement agreement. The statutory purpose of expediting settlement agreements to judgment would not be furthered if it was unavailable to those litigants on both sides of a multi-party action who chose to enter into a settlement agreement in the manner contemplated by the statute. We simply hold the section’s requirement of a ‘writing signed by the parties’ must be read to apply to all parties bringing the section 664.6 motion and against whom the motion is directed.” (Id. at p. 306.)

Here, the motion is nominally brought by both the Regents and Klock, but Klock’s participation in this motion is wholly incidental. There are no obligations sought to be enforced by or against Klock. Instead, the obligations run between plaintiffs and the Regents. Separate judgments may be entered as between parties whose obligations are wholly resolved as between them. (Code Civ. Proc., § 578; Heritage Marketing & Ins. Services, Inc. v. Chrustawka (2008) 160 Cal.App.4th 754, 764.) The motion may therefore be considered as separately brought by each of the defendants. For the reasons set forth above, the motion of the Regents will be granted.