Opinion
F077159
01-24-2020
MARILYN EDISON, Plaintiff and Appellant, v. SOUTH VALLEY VASCULAR ASSOCIATES, INC., et al., Defendants and Respondents.
Law Offices of Edward B. Chatoian and Edward B. Chatoian, II, for Plaintiff and Appellant. LeBeau-Thelen, Dennis R. Thelen and Kevin E. Thelen for Defendants and Respondents South Valley Vascular Associates, Inc., and Omar Amer Araim. White | Canepa, Mark B. Canepa and Daniel A. Martin for Defendant and Respondent Matthew Campbell. Weiss Salinas Law Group, Andrew R. Weiss, Richard S. Salinas and Carol A. O'Neil for Defendant and Respondent Oscar Barcenas.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. VCU265419)
OPINION
APPEAL from a judgment of the Superior Court of Tulare County. Bret D. Hillman, Judge. Law Offices of Edward B. Chatoian and Edward B. Chatoian, II, for Plaintiff and Appellant. LeBeau-Thelen, Dennis R. Thelen and Kevin E. Thelen for Defendants and Respondents South Valley Vascular Associates, Inc., and Omar Amer Araim. White | Canepa, Mark B. Canepa and Daniel A. Martin for Defendant and Respondent Matthew Campbell. Weiss Salinas Law Group, Andrew R. Weiss, Richard S. Salinas and Carol A. O'Neil for Defendant and Respondent Oscar Barcenas.
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Plaintiff Marilyn Edison appeals from an order granting defendants' motions to enforce settlement under Code of Civil Procedure section 664.6. Edison contends the written settlement agreement is not enforceable under the statute because it was not signed personally by each of the defendants. As explained below, we agree with Edison's interpretation of section 664.6 and the application of that interpretation to the facts of this case.
All unlabeled statutory references are to the Code of Civil Procedure.
We therefore reverse the order enforcing settlement.
FACTS AND PROCEEDINGS
Edison has certain medical problems and she sought treatment from defendants Matthew Campbell, M.D.; Omar Amer Araim, M.D.; and South Valley Vascular Associates, Inc., a professional medical corporation. Some of the medical care received by Edison was provided at Kaweah Delta Medical Center, which is owned and operated by Kaweah Delta Health Care District. Defendant Oscar Barcenas is employed by Kaweah Delta Health Care District as a cardiovascular radiologic technologist at the Kaweah Delta Medical Center.
Edison sued the individual defendants for medical negligence and the corporate defendant for negligent supervision. The details of Edison's condition, her treatment and the alleged medical malpractice of the defendants are not material to the issues raised in this appeal about the enforceability of a settlement agreement and, thus, are not provided in this opinion.
In October 2016, Edison filed a first amended complaint, which was the operative pleading when the parties engaged in mediation on November 9, 2017. The individuals present at the mediation were (1) the mediator; (2) Edison; (3) Edison's attorney, Edward Chatoian; (4) Dr. Araim, on behalf of himself and as a representative for South Valley Vascular Associates, Inc.; (5) the attorney representing Dr. Araim and the corporation, Dennis Thelen; (6) Dr. Campbell; (7) the attorney representing Dr. Campbell, Mark Canepa; (8) Evelyn McEntire, the director of risk management for Kaweah Delta Health Care District; and (9) the attorney representing Barcenas. All of these individuals, except the mediator, signed a two-page document titled "SETTLEMENT AGREEMENT." Defendant Barcenas did not attend the mediation and did not sign the settlement agreement.
The first numbered paragraph of the agreement set forth the dollar amount the defendants agreed to pay Edison "in full settlement and compromise of this action and in release and discharge of any and all claims and causes of action arising out of the events or incidents referred to in the pleadings in this action." The agreement stated Edison would sign a release of all claims, known and unknown, that included a waiver of the provisions of Civil Code section 1542. The agreement's sixth numbered paragraph stated the parties intended the "agreement, arrived at through mediation, to be binding and enforceable under the provisions of California Code of Civil Procedure Section 664.6 or by any other procedure permitted by law, the provisions of California Evidence Code Section 1119 notwithstanding." The subsequent paragraph stated that "[e]ach attorney signing this agreement on behalf of any party or insurance company represents that he/she is duly authorized to do so." Twice, the agreement stated the terms of the settlement were confidential.
On November 14, 2017, counsel for Edison sent an email to the defense attorneys stating his client had advised him that "she [did] not wish to follow through with the agreement reached at mediation on Thursday." Later in November, motions to enforce the settlement agreement were filed by (1) Barcenas, (2) Dr. Ariam and the corporate defendant, and (3) Dr. Campbell.
Edison opposed the motions, arguing that because Barcenas had not signed the settlement agreement, it was not enforceable under section 664.6. Edison also asserted that general principles of contract law allowed her to rescind her consent to the agreement while Barcenas had not signed the contract, the contract remained unperformed, and she had not accepted any benefits under the contract.
In January 2018, the trial court posted its tentative ruling to grant all three motions to enforce the settlement agreement. None of the parties requested oral argument. The court adopted its tentative ruling. The court distinguished Levy v. Superior Court (1995) 10 Cal.4th 578 (Levy), by stating Edison—the party contesting enforcement—had signed the agreement and, in contrast, the party contesting enforcement in Levy had not signed the settlement. The trial court stated that although defendant Barcenas had not signed the settlement, that fact was not critical because Barcenas was not contesting the authority of his agents to bind him to the settlement terms. The court stated it considered "Stewart v. Preston Pipeline, Inc. (2005) 134 Cal.App.4th 1565 more directly on point and persuasive in the circumstances before the court."
Notices of entry of the order enforcing settlement were filed on behalf of the moving parties. In March 2018, Edison filed a timely appeal.
DISCUSSION
I. THRESHOLD ISSUES
A. Appealable Order
Ordinarily, an order denying a motion to enforce a settlement in pending litigation under section 664.6 is not appealable, as judgment has not yet been entered and, consequently, there are issues left in the trial court for consideration. (Doran v. Magan (1999) 76 Cal.App.4th 1287, 1293 [denial of enforcement motion, rather than finally disposing of the action, expressly leaves it open].) The general principle that orders denying enforcement are not appealable does not apply in all circumstances. For instance, an appellate court treated an order denying the section 664.6 motion as appealable because, in the narrow circumstances of that case, no issues were left for the trial court's consideration, which is a hallmark of an appealable order or judgment. (Walton v. Mueller (2009) 180 Cal.App.4th 161, 167.)
In Critzer v. Enos (2010) 187 Cal.App.4th 1242 (Critzer), the court recognized the distinction between an order denying a motion under section 664.6 and an order granting a motion to enforce settlement. (Id. at p. 1251.) In Critzer, the order being appealed granted a motion to enforce settlement, and the court concluded that Viejo Bancorp, Inc. v. Wood (1989) 217 Cal.App.3d 200, "holding that a judgment on an order granting a motion to enforce settlement under section 664.6 is appealable, is controlling." (Critzer, supra, at p. 1251.) The court in Critzer determined the order, which did not use the word "judgment," passed the test of appealability because it left nothing to be done. Examining the substance and effect of the adjudication, the appellate court determined the order granting the motion finally disposed of the litigation and there was nothing left for the trial court to do other than enforce its order. (Id. at p. 1252.)
We have reviewed the three respondent's briefs filed in this appeal. Other than asserting a final judgment needs to be entered, the briefs identify nothing left for the trial court to do. Based on Critzer and the principle that substance controls over form, we conclude the absence of a document labeled "judgment" does not prevent the order granting the motions to enforce settlement from being a final, appealable order. Defendants have not convinced us otherwise because they have not shown there is something of substance remaining for the trial court to do.
Accordingly, we, like the court in Critzer, conclude "the order enforcing settlement finally determined the rights of the parties and therefore we will amend the order to include an appealable judgment. (Hines v. Luke (2008) 167 Cal.App.4th 1174, 1183.)" (Critzer, supra, 187 Cal.App.4th at p. 1246.) Thus, the order as amended is appealable. (Ibid.)
B. Standing to Appeal and Aggrieved Party Status
Section 902 states: "Any party aggrieved may appeal in the cases prescribed in this title." "To have standing to appeal, a person generally must be a party of record and be sufficiently aggrieved by the judgment or order." (Bridgeman v. Allen (2013) 219 Cal.App.4th 288, 292.) For purposes of appellate standing, an "aggrieved" party is someone "whose rights or interests are injuriously affected by the decision in an immediate and substantial way, and not as a nominal or remote consequence of the decision." (In re K.C. (2011) 52 Cal.4th 231, 236.)
Defendants contend Edison cannot be considered "aggrieved" because, in defendants' view, her rights or interests were in no way injuriously affected by the order granting their motions to enforce settlement. Defendants note Edison was represented by counsel, and they characterize the settlement as a success for her because "she would receive certain monies in exchange for a dismissal of the case against defendants."
Defendants have cited no case from California or another jurisdiction holding that where a party negotiates settlement terms that are a good deal, the party has no standing to challenge the enforceability of the settlement. (Cf. Northview Motors, Inc. v. Chrysler Motors Corp. (3d Cir. 1999) 186 F.3d 346, 349 [debtor car dealership entered settlement agreement with manufacturer; nonparty principals of dealership had standing to appeal order enforcing settlement agreement; principals had "a substantial stake in the outcome of these proceedings"].) More generally, defendants have cited no case holding a party to an allegedly invalid contract of any type lacks standing to appeal a judgment enforcing the contract because the party would receive some benefits under the contract.
Instead, defendants rely on Cline v. Cline (1935) 4 Cal.App.2d 626 (Cline), a divorce action in which the trial court found various property was the husband's separate property except for $2,000 allowed to the wife as the value of her rights to desert property in Arizona. (Id. at p. 629.) Cline did not involve the enforcement of a settlement agreement, but the wife's appeal from a judgment on the merits. (Id. at p. 627.) After the court discussed other issues, it stated the wife "cannot complain of the finding of the trial court that her desert entry in Arizona was her separate property and the judgment in her favor for the value thereof for the reason that she received the decision most favorable to her under the facts of the case and hence she is not an aggrieved party [citations]." (Id. at pp. 629-630, italics added.) More recently, the principle applied in Cline was restated by the Fourth District: "[A]s a general rule, a party is not aggrieved and may not appeal from a judgment or order entered in its favor. [Citation.] However, a party which has not obtained all of the relief it requested in the trial court is aggrieved and may appeal." (Friends of Aviara v. City of Carlsbad (2012) 210 Cal.App.4th 1103, 1108.)
Cline is easily distinguished from the present appeal because the record does not establish that enforcement of the settlement agreement over Edison's objections is the equivalent of "the decision most favorable to her under the facts of the case." (Cline, supra, 4 Cal.App.2d at pp. 629-630.) Edison clearly is a party who "has not obtained all of the relief [she] requested in the trial court" (Friends of Aviara v. City of Carlsbad, supra, 210 Cal.App.4th at p. 1108) because she asked the court to invalidate the settlement agreement. Contrary to this request, the trial court's order determined the settlement was valid and enforceable. Thus, it did not grant Edison any relief, much less all of the relief requested.
Moreover, to the extent defendants' arguments imply that Edison's legal entitlements to pursue causes of action do not constitute "rights or interests" (In re K.C., supra, 52 Cal.4th at p. 236) that may be "injuriously affected by the decision in an immediate and substantial way" (In re K.C., supra, 52 Cal.4th at p. 236), we reject this implied argument. First, "[a] thing in action is a right to recover money ... by judicial proceeding." (Civ. Code, § 953, italics added.) Thus, Edison's entitlement to pursue a thing in action (i.e., a cause of action) is a "right" for purposes of the test for aggrieved-party status. Second, "[b]ecause the settlement of a lawsuit is a decision to end the litigation, it obviously implicates a substantial right of the litigants themselves." (Levy, supra, 10 Cal.4th at p. 584.) Thus, we conclude a decision to enforce a settlement results in the termination of a substantial right of a plaintiff and such a termination has an immediate, substantial and injurious impact on that right for purposes of standing.
Consequently, we conclude Edison is "aggrieved" by the order enforcing settlement entered in favor of the moving party defendants. (§ 902.) Therefore, she has standing to appeal that order.
C. Forfeiture of the Enforceability Issue
Defendants contend Edison has forfeited her right to appeal by failing to contest the tentative ruling. They rely on this court's decision in Porterville Citizens for Responsible Hillside Development v. City of Porterville (2007) 157 Cal.App.4th 885 (Porterville), which states "that when a trial court announces a tentative decision, a party who fail[s] to bring any deficiencies or omissions therein to the trial court's attention forfeits the right to raise such defects or omissions on appeal." (Id. at p. 912.)
We reject defendants' argument because they have misconstrued our language in Porterville about "deficiencies or omissions" in a tentative ruling. (Porterville, supra, 157 Cal.App.4th at p. 912.) Their argument disconnects that language from the rationale for requiring such deficiencies or omissions to the trial court's attention. In Porterville, the trial court's tentative statement of decision failed to expressly rule on a cause of action alleging a violation of provisions in the Subdivision Map Act and the municipal code. (Id. at p. 911.) The appellant argued on appeal that because the trial court did not address that particular cause of action, the matter should be remanded to the trial court. (Ibid.) The absence of an express ruling on a cause of action is an omission that the trial court could have remedied if it had been brought to its attention. Thus, the appellant was attempting to obtain an advantage on appeal that would not have existed if the omission had been raised and addressed in the trial court.
In comparison, Edison's argument that the trial court misconstrued section 664.6 and erroneously enforced a purported settlement agreement is not an omission or deficiency of the type described in Porterville. It is simply an argument that the trial court committed error in an issue briefed by the parties and explicitly addressed by the court in its tentative ruling. (See Thompson v. City of Petaluma (2014) 231 Cal.App.4th 101, 109, fn. 5 [trial court's tentative ruling expressly denied leave to amend; plaintiff "chose not to request leave to amend at the hearing based on the court's tentative ruling that he lacked standing;" appellate court concluded plaintiff had not abandoned or forfeited leave to amend issue and remanded with directions to grant leave to amend].) We are loath to expand the holding in Porterville and adopt a principle requiring litigants to request oral argument to preserve their right to claim the tentative ruling's explicit analysis of an issue contains factual or legal error. Such a principle—the equivalent of requiring the party to request reconsideration without any new law or facts—is undesirable because it would create inefficiencies for both trial courts and litigants. II. ENFORCEMENT OF THE SETTLEMENT AGREEMENT
A. Section 664.6 and Related Principles
The purpose of section 664.6 is to provide a summary procedure for specifically enforcing a settlement contract. (Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 809.) This summary procedure takes less time and resources than the alternate procedure of filing a new lawsuit to obtain specific enforcement of the settlement contract. (Ibid.) Section 664.6 provides in full:
"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." (Italics added.)
In Levy, supra, 10 Cal.4th 578, our Supreme Court resolved a conflict among the Courts of Appeal about the meaning of the term "parties" as it appears in section 664.6. (Levy, supra, at p. 582.) The court considered whether the Legislature intended the term "to mean only the litigants personally or to include the attorneys representing the litigants." (Ibid.) The court resolved this question of statutory interpretation by concluding the term "parties" meant "the litigants themselves, and does not include their attorneys of record." (Id. at p. 586.) The court determined that because a party litigant "did not sign the agreement to settle, it is not enforceable under section 664.6." (Ibid.) The court's interpretation is consistent with the general principle that, " '[b]ecause of its summary nature, strict compliance with the requirements of section 664.6 is prerequisite to invoking the power of the court to impose a settlement agreement.' " (Mesa RHF Partners, L.P. v. City of Los Angeles (2019) 33 Cal.App.5th 913, 917; Critzer, supra, 187 Cal.App.4th at p. 1262.)
In Critzer, the plaintiffs owned a townhouse in a development with a homeowners association (HOA). (Critzer, supra, 187 Cal.App.4th at p. 1246.) The plaintiffs sued their neighbor Jerry Enos, his successor-in-interest, and the HOA over Enos's modification of his townhouse. The lawsuit apparently settled, and the terms were recited on the record by the attorney representing the HOA. (Id. at p. 1257.) The successor-in-interest and both plaintiffs gave their personal consent in court and an attorney representing Enos stated he had authority for his client and Enos was " 'agreeable.' " (Ibid.) When the parties reached an impasse over the wording of the formal written agreement, the HOA brought a motion to enforce settlement pursuant to section 664.6. The trial court entered an order enforcing settlement and the plaintiffs appealed. (Critzer, supra, at p. 1246)
In Critzer, the Sixth District described the statutory interpretation adopted in Levy and discussed how it had been applied in other cases. (Critzer, supra, 187 Cal.App.4th at pp. 1254-1257; see Gauss v. GAF Corp. (2002) 103 Cal.App.4th 1110, 1116-1121; Sully-Miller Contracting Co. v. Gledson/Cashman Construction, Inc. (2002) 103 Cal.App.4th 30, 37 (Sully-Miller); Wacken v. Malis (2002) 97 Cal.App.4th 429, 440; Harris v. Rudin, Richman & Appel (1999) 74 Cal.App.4th 299, 303-304 (Harris); Murphy v. Padilla (1996) 42 Cal.App.4th 707, 716; Johnson v. Department of Corrections (1995) 38 Cal.App.4th 1700, 1708-1709.) Turning to the facts before it, the Sixth District stated:
"Plainly, there was no personal consent to the recited terms of the Settlement by two of the five parties, the HOA and Enos. Any claim that the Settlement was nonetheless effective because it was expressly consented to by Enos's agent [(i.e., his attorney)], and perhaps impliedly consented to by the HOA's agent (attorney Mark Shem, who recited the terms of the Settlement), lacks merit. Under Levy, supra, 10 Cal.4th 578, in order for a settlement to be enforceable under section 664.6, the consent to settlement must have been given by the party, personally, and courts have rejected agency arguments posed to circumvent the party-consent requirement." (Critzer, supra, 187 Cal.App.4th at p. 1257.)
The court then addressed the issue raised by defendants in the present case, stating: "Additionally, the fact that the Critzers gave their personal consent to the terms of the oral Settlement—as the parties against whom the Settlement is being enforced—does not obviate the necessity of the personal consent of the remaining parties, including the HOA and Enos." (Critzer, supra, 187 Cal.App.4th at pp. 1257-1258.) Thus, Critzer, like the present case, involved (1) a motion by a party that had not personally consented to the settlement and (2) an opposition by plaintiffs who had consented. Even though the parties opposing enforcement had personally consented to the oral settlement, the Sixth District concluded this was not enough. The court stated section 664.6 required all of the parties to give their personal consent to the settlement. (Critzer, supra, at p. 1262.) The court supported this conclusion by referring to precedent stating that "the provisions of section 664.6 could be invoked to enforce a written settlement agreement only if it has been signed by all parties. (Sully-Miller, at p. 37.)" (Critzer, supra, at p. 1256, italics added.)
Similarly, in Harris, supra, 74 Cal.App.4th 299, the Second District considered whether a party who did not personally sign the settlement agreement could enforce the agreement against parties who had personally signed it. In Harris, the plaintiff sought to enforce a letter written by defense counsel to his attorney. (Id. at p. 303.) The letter stated it was written "to confirm the essential terms of the settlement we reached today." (Ibid.) Two of the defendants signed the letter. The plaintiff and two other defendants had not signed the letter. (Ibid.) Before final documentation was prepared, the defendants learned new legislation might have nullified their liability and, as a result, they did not complete and execute a final settlement agreement. (Ibid.) In response to the defendants' change in position, the plaintiff brought a section 664.6 motion to enforce the settlement terms in the letter. (Harris, supra, at p. 303.) The trial court denied the motion because not all parties to the action had signed the letter. (Ibid.) On appeal, the plaintiff likened section 664.6 to the statute of frauds, which requires only the parties to be charged to sign the writing. (Harris, supra, at p. 304; see Civ. Code, § 1624.) Based on the comparison to the statute of frauds and section 664.6's phrase "writing signed by the parties," the plaintiff argued section 664.6 "does not expressly require all the parties to the action to sign the settlement agreement." (Harris, supra, at p. 304.) The Second District rejected this interpretation and concluded "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." (Harris, supra, at p. 306, italics added.) Because the plaintiff in Harris had not signed the letter, the court concluded "the statutory prerequisites were not satisfied in this case." (Ibid.)
B. Application of Legal Principles
The facts material to the resolution of this appeal are (1) the existence of a settlement agreement, (2) the absence of Barcenas's signature from the written agreement, (3) the signature of the attorney representing Barcenas on the document, and (4) the signature of a representative of Barcenas's employer-indemnitor on the document.
Section 664.6 authorizes the enforcement of a settlement when the parties to stipulated to the settlement in "a writing signed by the parties." Parties means "the litigants themselves, and does not include their attorneys of record." (Levy, supra, 10 Cal.4th at p. 586.) As interpreted in Harris, section 664.6's signature requirement applies to all parties, even parties bringing the motion to enforce settlement. (Harris, supra, 74 Cal.App.4th at p. 306.) This interpretation is compatible with the statements in Critzer and Sully-Miller that section 664.6 can be invoked to enforce a written settlement agreement only if it has been signed by all parties. (Critzer, supra, 187 Cal.App.4th at p. 1256; Sully-Miller, supra, 103 Cal.App.4th at p. 37.) We agree with this interpretation of section 664.6 and will not create a split among the Courts of Appeal.
Applying the interpretation that all parties to a settlement must personally sign the written agreement, we conclude the November 9, 2017 settlement agreement may not be enforced pursuant to section 664.6 because it was not signed by Barcenas, one of the defendants. The holding and rationale expressed in Stewart v. Preston Pipeline, Inc., supra, 134 Cal.App.4th 1565 does not contradict our conclusion because that case was not decided under section 664.6. (Stewart, supra, at p. 1580 [one of the three grounds given for distinguishing Levy].)
DISPOSITION
The order granting the motions to enforce settlement is reversed. The matter is remanded with directions to vacate that order and issue a new order denying the motions. Edison shall recover her costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1), (a)(2), (c).)
/s/_________
FRANSON, Acting P.J. WE CONCUR: /s/_________
PEÑA, J. /s/_________
SMITH, J.