Case Number: TC028639 Hearing Date: May 24, 2018 Dept: A

# 7. Jose Martinez et al., v. The L&B Renaissance Group, Inc.,

Case No.: TC028639

Matter on calendar for: Motion to enforce settlement under CCP § 664.6

Tentative ruling:

I. Background

On December 6, 2017, consolidated Plaintiffs (Jose Martinez, Jaime Calvillo, Julian Calvillo, Elder Camacho, Cedro Camacho, and Alejo Montero) and consolidated Defendants (L&B Renaissance Group, Inc., Kevin Quarles, Travelers Casualty and Surety Company of America) agreed to settle this case arising out of alleged failures to pay wages and overtime. (See Motion, Exh. A.)

Defendants agreed to pay a total of $230,000.00 in three payments to the Donahoo & Associates, PC Client Trust Account. (Id., Section 2.0):

· First payment of $25,000 to be paid on or before December 15, 2017 by L&B or Kevin Quarles;

· Second payment of $137,800 to be paid on or before February 15, 2018 by Travelers; and

· Third payment of $67,200 to be paid on or before February 15, 2018 by L&B or Kevin Quarles to be personally guaranteed by Kevin Quarles. (Id.)

The parties executed the agreement. Plaintiffs received the first and second payments but have yet to receive the third payment. (Donahoo Decl.)

Plaintiffs move the Court to enforce the settlement and enter a judgment against all Defendants for:

· The third payment consisting of $67,200;

· Pre-judgment interest in the total amount of $990.78, calculated as $10.11 per day from February 15, 2018 to the day of the scheduled hearing, May 24, 2018 (based on a 10% rate).

· Reasonable attorney fees and costs of $7,800 based on an hourly rate of $650, a reported 6.5 hours spent on this motion, an anticipated 5.5 hours to respond to an expected opposition, a $60 filing fee, and anticipated $150 on executing personal service on Kevin Quarles.

Defendant Travelers Casualty and Surety Company of America is the only Defendant to file an opposition. Travelers requests recovery of $1,752 in attorney fees against Plaintiffs.

II. Standard

Under CCP § 664.6, the Court may determine the motion upon declarations alone. (Corkland v. Boscoe (1984) 156 CA3rd 989, 994) Where the settlement is ambiguous, the Court is required to consider extrinsic evidence of the parties’ intent. (Steller v. Sears, Roebuck & Co. (2010) 189 CA4th 175, 183).

CCP § 664.6 states:

If parties to a 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 “explicitly provides statutory authorization for the entry of judgment upon a stipulated settlement by means of a noticed motion.” (Casa de Valley View Owner’s Assn. v. Stevenson (1985) 167 Cal.App.3d 1182, 1189.)

“In ruling upon a Section 664.6 motion for entry of judgment enforcing a settlement agreement, and in determining whether the parties entered into a binding settlement of all or part of a case, a trial court should consider whether (1) the material terms of the settlement were explicitly defined, (2) the supervising judicial officer questioned the parties regarding their understanding of those terms, and (3) the parties expressly acknowledged their understanding of and agreement to be bound by those terms.” (In re Marriage of Assemi (1994) 7 Cal.4th 896, 911.)

CCP § 664.6 authorizes the recovery of reasonable attorney fees and costs based on a party’s breach of a settlement agreement.

III. Analysis

A. Enforcing the settlement agreement

The settlement agreement is in a writing signed outside the presence of the Court. The agreement stipulates the Court maintains jurisdiction pursuant to CCP § 664.6. The Court may therefore enforce the agreement and enter judgment. This motion has been properly served upon the defendants. (Motion, Exh. 2).

The portions of the settlement agreement at issue are paragraphs 2.0 and 3.1.

Paragraph 2.0 states:

As consideration for the dismissal with prejudice of the Action and Plaintiff’s complete release of all claims against Defendants and the other releases identified in paragraph 3.1 below, Defendants will pay Plaintiffs and their attorneys [$230,000.00] (the “Settlement Sum”). The Settlement Sum shall be paid without deduction, payable to “Donahoo & Associates, PC Client Trust Account” in three payments. The first payment shall be in the amount of [$25,000] and shall be paid by L&B or Kevin Quarles on or before December 15, 2017, and delivered to Donahoo & Associates, PC, 440 W. First Street, Ste. 101, Tustin, CA 92780. The second payment of [$137,800.00] shall be made in the same manner and location by Travelers on or before February 15, 2018 and the payment of [$67,200.00] shall be made in the same manner and location on or before February 15, 2018 by L&B or Kevin Quarles and shall be personally guaranteed by Kevin Quarles.

Paragraph 3.1 states:

Plaintiffs… unconditionally and irrevocably release… Defendants… jointly and severally, of and from any claims, causes of action, demands, rights, obligations, suits, liabilities… arising out of, in connection with, or related to, Plaintiffs’ employment with L&B or the termination of such relationship, and any claims which were asserted or could have been asserted by Plaintiffs…

This release is conditioned on payment of the entire Settlement Sum, and therefore, should the entire Settlement Sum not be paid in full Plaintiffs may, at their option, declare this Agreement null and void and proceed to trial, verdict and judgment as though this Agreement had never been entered into, subject to a credit for any amounts already paid under this Agreement.

Plaintiffs have received $162,800 and the final payment of $67,200 is past due. (Donahoo Decl.)

Plaintiffs argue that the above contractual terms clearly evidence the intentions of the parties to make the settlement agreement enforceable against all Defendants, including Travelers.

Travelers argues the language of the settlement treats it severally from Defendants L&B and Kevin Quarles, and that Travelers has fulfilled its obligation to pay $137,800. (Travelers Opp.pg 4–5). Travelers relies on Douglas v. Bergere (1949) 94 Cal.App.2d 267, 270, which states: “Where two or more parties to a contract promise separate performances, to be rendered respectively by each of them… each is severally bound for the performance which he promises and is not bound jointly with any of the others.” [Citations omitted.]

The Court finds Travelers’ argument convincing. Section 2.0 unequivocally states that “the payment of [$67,200.00] shall be made in the same manner and location on or before February 15, 2018 by L&B or Kevin Quarles and shall be personally guaranteed by Kevin Quarles.” The agreement does not obligate Travelers to guarantee L&B’s or Quarles’ responsibilities to make that payment. And Section 3.1 relates to general release terms.

The settlement agreement does not clearly evidence the intentions of the parties. To the extent there may be uncertainty concerning the terms of the settlement agreement, Douglas states:

In determining whether the promises were several or joint and several, when uncertainty arises concerning the meaning of a contract, the language used by the parties is to be considered in the light of the surrounding circumstances and of the practical and mutual construction placed thereon as shown by their acts and conduct before any controversy has arisen between them.

(Douglas v. Bergere (1949) 94 Cal.App.2d 267, 270.) [Citations omitted.]

Stacie Brandt, Travelers’ counsel, submitted a declaration stating that Travelers’ obligations under the agreement were meant to be separate from the other Defendants’ obligations:

During the settlement discussions, Richard Donahoo [Plaintiffs’ counsel] asked me what security could be used to guarantee L&B’s settlement payments. I told him that Travelers would not guarantee payments for which it had no bonded obligation, but suggested that L&B could make a partial early payment, and Mr. Quarles could personally guarantee payment of L&B’s balance. The settlement terms were complete when L&B agreed to pay $25,000 upfront, and Mr. Quarles agreed to guarantee L&B’s later $67,200 payment.

(Brandt Decl., ¶ 9.)

The Court denies the motion against Travelers, but grants the motion against L&B and Quarles. Section 2.0 of the settlement agreement clearly and specifically obligates these Defendants to pay $67,200.00 to Plaintiffs.

B. Objections

Plaintiffs’ unopposed objections to the Brandt Declaration are immaterial to the disposition of the motion because the terms of the settlement agreement clearly contemplate separate performance by the various Defendants, including Travelers. The Court overrules Objection Number 4.

C. Prejudgment interest

CCP § 3287 entitles Plaintiffs to prejudgment interest starting from February 15, 2018, the day the debt vested. As the settlement agreement does not set an interest rate CCP § 3289 sets the rate at 10% per annum which amounts to $10.11 per day.

D. Attorney fees

Both Plaintiffs and Travelers separately move for attorney fees.

The agreement states: “Should any Party initiate any action at law or in equity to enforce or interpret the terms of this Agreement, the prevailing Party shall be entitled to recover its reasonable attorneys’ fees, costs against the non-prevailing Party.” (Exhibit A, Section 4.13.)

Plaintiffs’ counsel requests recovery of $7,800 in fees based on a $650 hourly rate and 6.5 hours meeting and conferring regarding the unpaid balance and drafting the moving papers, 5.5 hours “reviewing the expected opposition, preparing a reply memorandum, and attending a hearing on the motion;” $60 for the filing fee; and $150 for “executing personal service of the motion on Kevin Quarles.” (Motion, Donahoo, Decl., ¶ 17-18.)

Plaintiffs are the prevailing party in this motion against L&B and Quarles only. The Court awards Plaintiffs $4,610. It concludes that 7 hours is the reasonable amount of work with respect to those defendants. The Court also awards the $60 filing fee.

Travelers requests recovery of $1,752 in attorney fees against Plaintiffs based on 4.4 hours of attorney work at $230 per hour, 0.5 hours of law clerk work at $100 per hour, and “an additional 3 hours of attorney work at $230 per hour to appear at the hearing… an approximately one hour drive from Orange County.” (Brandt Decl., ¶ 12.)

Travelers’ opposition is meritorious. The Court awards Travelers $1,522 in fees (deducting one hour from the purported commute).

IV. Ruling

The Court denies the motion against Defendant Travelers Casualty and Surety Company of America.

The Court grants the motion against Defendants L&B Renaissance Group, Inc. and Kevin Quarles.

The Court enters judgment for the Plaintiffs and against L&B and Quarles only in the total amount of $72,800.78 consisting of $67,200 [the owed “third payment”], prejudgment interest of $990.78, and attorney fees and costs of $4,610.

The Court awards Travelers $1,522 in attorney fees.