Case Number: EC067046 Hearing Date: November 28, 2018 Dept: A

Gonzalez v US Bank

MOTION TO VACATE DISMISSAL;

MOTION TO ENFORCE SETTLEMENT AGREEMENT

Calendar: 8
Case No: EC067046
Hearing Date: 11/16/18
Action Filed: 7/26/17
Trial:

Motion to Vacate Dismissal

MP:

Plaintiff Francis Gonzalez

RP:

Defendants U.S. Bank NA, Successor Trustee to Bank of America, NA, Successor in Interest to LaSalle Bank, as Trustee, on Behalf of the Holders of the Washington Mutual Mortgage Pass-Through Certificates, WMALT Series 2006-AR3 (“U.S. Bank”); and Select Portfolio Servicing, Inc. (“SPS”)

Motion to Enforce Settlement Agreement

MP:

U.S. Bank and SPS

RP:

None (But see Plaintiff’s Reply Brief to Motion to Vacate)

ALLEGATIONS:
Plaintiff Francis Gonzalez seeks equitable and non-equitable remedies from Defendants U.S. Bank NA, Successor Trustee to Bank of America, NA, Successor in Interest to LaSalle Bank NA, as Trustee, on Behalf of the Holders of the Washington Mutual Mortgage Pass-Through Certificates, WMALT Series 2006-AR3; Select Portfolio Servicing, Inc.; and Does 1-100. Plaintiff disputes the title and ownership of the real property located at 1231 N. Beachwood Dr., Burbank, CA 91506. He alleges that Defendants conducted an invalid and void Trustee’s Sale and unlawfully and invalidly sold, assigned, or transferred ownership of the property to themselves or other parties.

Plaintiff filed the complaint on July 26, 2017. On May 10, 2018, he filed the first amended complaint (“FAC”), alleging causes of action for: (1) declaratory relief; (2) violation of Civil Code § 2923.55; (3) violation of Civil Code § 2923.6; (4) violation of Civil Code § 2923.7; (5) violation of Civil Code § 2924.9; (6) violation of Civil Code § 2924.10; (7) violation of Civil Code § 2924.17; (8) negligence; (9) violation of Business & Profession Code § 17200; (10) wrongful foreclosure; (11) cancellation of written instruments.

RELIEF REQUESTED:
1. Plaintiff moves to vacate the voluntary dismissal entered in this case on August 6, 2018.
2. Defendants move to enforce the settlement agreement.

DISCUSSION:

MOTION TO VACATE DISMISSAL

CCP §473(b) permits the Court to set aside a dismissal or default entered through the mistake, inadvertence, surprise, or excusable neglect of a party, or the mistake, inadvertence, surprise, or neglect of an attorney.

On April 20, 2018, the Court granted Defendants’ motion for judgment on the pleadings to each cause of action in the initial complaint, with 20 days leave to amend. Plaintiff then filed t6he FAC on May 10, 2018, and Defendants responded by filing demurrers on June 8, 2018. Prior to the hearing on the demurrers, a settlement agreement, which is now at issue, was signed and entered. The agreement includes a term requiring Plaintiff to dismiss the lawsuit in its entirety with prejudice.

The Court dismissed this case on August 6, 2018 upon request made by Plaintiff pursuant to the settlement agreement. Now, Plaintiff (currently a self-represented litigant) moves to set aside the dismissal based on the inadvertence and excusable neglect of his former counsel.

In support of his motion, Plaintiff provides his own declaration and an amended declaration. He declares that his former counsel pressured him to settle his case against Defendants despite his desire to continue litigation. (Gonzalez Decl. ¶5.) Plaintiff states that his former attorney sent him a document, explained it as an “agreement about [a] hearing,” and then advised Plaintiff to sign the paper in exchange of $3,000. (Id., ¶6.) Plaintiff states that the attorney failed to explain the terms of the document, including that it required the case to be dismissed, or that the document was a settlement agreement. (Id.) Plaintiff states that as a result of the former attorney’s incomplete advice, he unknowingly and against his desire signed a settlement agreement that agreed to dismiss the case. (Gonzalez Decl., ¶5.) In the first declaration, Plaintiff states that he did not read or understand the agreement; rather, he simply relied on the advice of his former counsel when he signed the document. (Id., ¶¶4, 6.) However, in his amended declaration, Plaintiff says that he did read the agreement and understood that he would not regain lawful possession of the home through the agreement, but believed he would get his home back and that Defendants would allow him to find a finance company to finance the loan. (Gonzalez Am. Decl., ¶10.) Plaintiff again explains that his English is poor, which is why he was unable to understand the legal terms of the document. (Id., ¶12.) Plaintiff states that he would not knowingly accept a $3,000 settlement in exchange of dismissing the case. (Gonzalez Decl., ¶7.)

Plaintiff argues that the dismissal should be vacated because it was the result of the Settlement Agreement which he entered based on inadequate legal representation. (Gonzalez Am. Decl., ¶13.) Plaintiff cites generally to various case law, arguing that his former attorney’s misconduct is grounds to vacate the dismissal. (Amended Motion at pp.9-11.) For example, in Buckert v. Briggs (1971) 15 Cal.App.3d 296, 301, the Court of Appeal stated: “[a]s a general rule the accident or mistake authorizing relief may not be predicated upon the neglect of the party’s attorney unless shown to be excusable [citations omitted] because the negligence of the attorney in the premises is imputed to his client and may not be offered by the latter as a basis for relief. [citations omitted] However, excepted from the rule are those instances where the attorney’s neglect is of that extreme degree amounting to positive misconduct, and the person seeking relief is relatively free from negligence. [citations omitted] The exception is premised upon the concept the attorney’s conduct, in effect, obliterates the existence of the attorney-client relationship and for this reason his negligence should not be imputed to the client.” (Buckert, supra, 15 Cal.App.3d at 301.) Although Plaintiff cites this case law, Plaintiff has not shown that his former counsel’s actions constituted excusable neglect or that his counsel’s actions were such a degree of positive misconduct. At most, Plaintiff states that he consulted with another attorney and was told that he was given wrong legal advice, but he does not provide the declaration of that other attorney to provide such opinions nor has he shown how the advice of his former counsel was ineffectual. (Gonzalez Am. Decl., ¶12.)

Next, Plaintiff cites to Martin v. Cook (1977) 68 Cal.App.3d 799, 809 and Orange Empire National Bank v. Kirk (1968) 259 Cal.App.2d 347, 353, for the proposition that a client’s redress for inexcusable neglect by counsel is an action for malpractice. However, this legal proposition contradicts Plaintiff’s position that the dismissal entered in this action should be set aside, as these citations suggest that Plaintiff should instead pursue an action for legal malpractice against his former attorney.

Another case cited by Plaintiff is Aldrich v. San Fernando Valley Lumber Co. (1985) 170 CAl.App.3d 725. In Aldrich, the Court of Appeal affirmed the trial court’s decision to vacate the dismissal because the plaintiff was able to show that the dismissal was entered as a result by mistake. Namely, by the date of the dismissal, the plaintiff had no attorney of record because his counsel had been suspended from the practice of law a month earlier and no one had informed him that his counsel had been suspended until years after dismissal had been entered. The ruling was not based on CCP §473, but rather on the equitable doctrines of extrinsic fraud or mistake. The Court of Appeal stated that while an attorney’s inexcusable neglect is ordinarily imputed to the client and the client’s redress is then for malpractice, in cases where the client is relatively free from negligence and the attorney’s neglect is of an extreme degree amounting to positive misconduct, the attorney’s conduct is said to obliterate the existence of the attorney-client privilege. (Id. at 738.) Thus, where a client is unknowingly deprived of effective representation by counsel, the client will not be charged with responsibility for misconduct if the client acted with due diligence in moving for relief after discovering the attorney’s neglect and the other side would not be prejudiced by the delay. (Id. at 739.) Positive misconduct is found where there is a total failure on the part of counsel to represent his client. (Id.)

This case is also distinguishable from Aldrich. Here, Plaintiff was not abandoned by his former counsel nor was his counsel disbarred without Plaintiff’s knowledge. Rather, Plaintiff’s declaration reveals that his former counsel was actively involved in the litigation and reached a settlement on Plaintiff’s behalf. Whether this settlement was in Plaintiff’s best interest or amounted to ineffective legal counsel is better addressed as a legal malpractice claim, and does not provide a basis to find that the dismiss law as entered as a result of mistake, inadvertence, surprise, or (excusable) neglect.

In addition, Defendants argue in opposition that Plaintiff cannot claim surprise, mistake, inadvertence, or excusable neglect because the agreement was agreed to and executed by Plaintiff on July 30, 2018 and executed by Defendants on August 2, 2018. (Opp. at p.3, lines 4-7.) On August 6, 2018, Plaintiff filed, and the clerk entered, the voluntary dismissal at issue. (Id. at p.3, lines 8-10.) Further, Defendants state that they fulfilled their duties under the settlement agreement by issuing a $3,000 check to Plaintiff.

As discussed above, Plaintiff admitted that he reviewed and executed the Settlement Agreement. (Gonzalez Am. Decl., ¶10.) Even if he did not read the terms of the Settlement Agreement (as stated in his initial declaration) or he failed to understand the terms of the agreement, neither of these provide a proper basis for vacated the dismissal because reasonable diligence requires a party to read a contract before signing it and if one cannot read, he should have it read or explained to him. (See Brown v. Wells Fargo Bank, N.A. (2008) 168 Cal.App.4th 938, 959; Randas v. YMCA of Metropolitan Los Angeles (1993) 17 Cal.App.4th 158, 163.)

In Plaintiff’s reply, he requests the Court to take judicial notice of check copies to evidence that he continued to pay, and Defendants accepted, mortgage payments for the home in dispute. (Reply at p.3, lines 19-22.) The Court denies this request as the checks are not the proper subject of judicial notice. In addition, the checks are not relevant to the request that the dismissal be vacated.

In his reply brief, Plaintiff attempts to argue the merits of the underlying case by discussing his ability to obtain a loan for the house and his claims against Defendants. Plaintiff’s brief emphasizes his belief that there is a valid contract dispute and the dismissal should be vacated on those grounds. However, the merits of the underlying dispute have no bearing on Plaintiff’s attempt to vacate the dismissal under 473(b).

Plaintiff also argues that Defendants’ opposition should be dismiss on procedural grounds that Defendants either failed to file an opposition to this motion to vacate and/or Defendants filed a notice of motion to enforce the settlement agreement without following the proper Court procedures. However, Defendants did file an opposition brief to the motion to vacate, which is what Plaintiff’s reply brief is responding to. As for Defendants’ motion to enforce the settlement agreement, it is unclear how Plaintiff is claiming that Defendants failed to follow Court procedure in filing the motion. Rather, the motion was properly reserved and filed with the Court. Thus, neither of these arguments will be a basis upon which the motion to vacate will be set aside.

The papers submitted by Plaintiff are insufficient to show that the case was dismissed through the mistake, inadvertence, surprise, or excusable neglect of a party, or the mistake, inadvertence, surprise, or neglect of an attorney, as required by CCP §473(b). Rather, both Plaintiff and Defendants appear to agree that there may be a valid legal malpractice case against Plaintiff’s former counsel. The bad advice which Plaintiff alludes to, however, does not change the fact that Plaintiff had an opportunity to review the Settlement Agreement, approved the agreement, dismissed the case as required by the agreement, and retained the $3,000 check that was paid to him by Defendant as a term of the agreement.

Accordingly, the Court will deny the motion to set aside the dismissal entered on August 6, 2018.

MOTION TO ENFORCE SETTLEMENT AGREEMENT

Legal Standard

“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.” (CCP §664.6.)

CCP §664.6 was enacted to provide a summary procedure for specifically enforcing a settlement contract without the need for a new lawsuit. (Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 810.) Under California law, Courts may continue jurisdiction over parties and their litigation, for the purpose of enforcing their settlement agreement, despite a suit’s having been dismissed, only when the parties request the retention of jurisdiction in a manner that satisfies the requirements of CCP section 664.6. (Wackeen v. Malis (2002) 97 Cal.App.4th 429, 433.)

Settlement Terms

The parties entered into a written Settlement Agreement, which was agreed to and executed by Plaintiff on July 30, 2018, and executed by defendants on August 2, 2018. (Laes Decl., Ex. 1 [“Settlement Agreement”].)

The Settlement Agreement provides in relevant part:

– Defendants will pay to Plaintiff the sum of $3,000.00. (Settlement Agreement, §3(A).)

– Plaintiff will execute and fill a Request for Dismissal with Prejudice as to the action. (Settlement Agreement, §3(B).)

– Plaintiff and any other persons currently residing at the property will vacate the property on or by August 31, 2018, and remove all items located therein. The parties recognized that Defendants shall suffer irreparable injury for which there is no adequate remedy at law, and they will therefore be entitled to injunctive relief from the courts enjoining said breach and affirmatively requiring Plaintiff (and any other individuals living at the property) to vacate the property. Failure to vacate the premises gives Defendants the right to seek a remedy at law as well as or in lieu in the event Plaintiff fails to vacate the property. “This provision, along with the other provisions of this Agreement, shall be enforceable by motion pursuant to California Code of Civil Procedure section 664.6.” (Settlement Agreement, §3(C).)

– The prevailing party in any action to enforce or interpret the Settlement Agreement is entitled to recover from the other party its reasonable attorneys’ fees. (Settlement Agreement, §3(O).)

Thereafter, on August 6, 2018, Plaintiff filed a Request for Dismissal of the entire action, which was entered that date. (Laes Decl., Ex. 2.)

On August 16, 2018, Defendants sent to Plaintiff’s former counsel a settlement check for $3,000.00. (Laes Decl., Ex. 3.)

Plaintiff did not vacate the property by August 31, 2018.

Request to Retain Jurisdiction Under CCP §664.6

The request to retain jurisdiction must be made: (1) during the pendency of the case, not after the case has been dismissed in its entirety; (2) by the parties themselves; and (3) either in writing signed by the parties, or orally before the Court. (Wackeen v. Malis (2002) 97 Cal.App.4th 429, 440.) “[I]n order for a court to assert such continuing jurisdiction, the parties’ request for retention of jurisdiction must satisfy the same formalities that courts and the Legislature have imposed generally on section 664.6 motions and the settlement agreements such motions seek to enforce. Like section 664.6 motions themselves, requests for retention of jurisdiction must be made prior to a dismissal of the suit. Moreover, like the settlement agreement itself, the request must be made orally before the court or in a signed writing, and it must be made by the parties, not by their attorneys, spouses or other such agents. If, after a suit has been dismissed, a party brings a section 664.6 motion for a judgment on a settlement agreement but cannot present to the court a request for retention of jurisdiction that meets all of these requirements, then enforcement of the agreement must be left to a separate lawsuit.” (Id. at 433.)

There is no indication that the parties requested that the Court retain jurisdiction over the parties in this litigation for the purpose of enforcing their settlement agreement. While the Settlement Agreement includes a citation to CCP §664.6, the Settlement Agreement was signed only by the parties. There is no separate stipulation presented to the Court for its signing, where the Court assented to retain jurisdiction prior to the dismissal of this action. Further, no oral request was made before the Court that the Court retain jurisdiction of this mater. (See Rutter Guide, Cal. Prac. Guide Civ. Pro. Before Trial (June 2018 Update) Ch. 12(II)-F, §12:982.1 [“CCP § 664.6 provides for the retention of personal jurisdiction to enforce the settlement ‘if requested by the parties,’ but it is not clear how such a ‘request’ is to be made. Clearly, it is not enough simply to provide for such retention in the settlement agreement. Rather, the parties should stipulate to a judgment of dismissal that expressly provides that the court retains jurisdiction to enforce the settlement agreement. Otherwise, once the case is dismissed, a party in breach of the settlement agreement may argue successfully that the court lacks jurisdiction to enforce it.”].)

As the parties did not request that the Court retain jurisdiction of this action to enforce the settlement agreement prior to the dismissal entered in this action, Defendants cannot now seek to bring a CCP §664.6 motion. Rather, Defendants’ remedy is to file a separate lawsuit.

RULING:

Deny Plaintiff’s motion to set aside the dismissal entered on August 6, 2018.

Deny Defendants’ motion to enforce the terms of the Settlement Agreement.