Opinion
NOT TO BE PUBLISHED
Santa Clara County Super. Ct. Nos. 082990, 091783.
ELIA, J.
Appellant Jesus Torres seeks review of an order granting a motion to enforce a settlement agreement between him and respondent Ali Jahanfard. Torres contends that the agreement was ineffective because Jahanfard had not signed it and because no meeting of the minds had ever occurred in the succession of settlement offers and counteroffers. We will affirm the judgment.
Background
The accident that precipitated this litigation occurred on August 9, 2006, while Torres was driving a 1994 Jeep Grand Cherokee on Interstate 280 in San Jose. According to the parties' pleadings, the Jeep, which was owned by Torres's son-in-law, Jose Valladolid, stalled on the highway. Respondent Jahanfard was on his motorcycle behind another vehicle, which made a quick lane change, exposing the stalled Jeep. Unable to change lanes in traffic and unable to stop in time, Jahanfard collided with the Jeep. The plastic gas tank of the Jeep was punctured and a fire erupted, engulfing both vehicles and injuring Torres.
One of the documents in the record indicates that Valladolid's true name was Guillermo Valladolid. The parties, however, have continued to refer to him as Jose Valladolid.
Torres brought suit for negligence on August 9, 2007, naming Jahanfard, Valladolid, and several business entities associated with the Jeep. Jahanfard also sued Torres as well as Valladolid, and the two cases were consolidated.
The present dispute arose out of the parties' settlement discussions. On October 15, 2008, attorney Keith R. Schirmer wrote to Aaron B. Markowitz, counsel for Torres as plaintiff, and another party's attorney to "confirm" the terms of the parties' prospective settlement. In that letter Schirmer represented that Torres would dismiss his complaint against Jahanfard, in exchange for Jahanfard's automobile insurance policy limits of $25,000. Jahanfard in turn would dismiss his complaint against Torres in exchange for Torres's policy limits of $15,000. Both settlements were "conditioned upon both Torres and Jahanfard obtaining a good faith settlement order."
Schirmer appears to have been representing both Torres and Valladolid as defendants.
On February 19, 2009, Jahanfard's counsel, Patricia Green Roe, sent a proposed release to Markowitz with the statement, "Pursuant to our conversation, enclosed please find a Release wherein Mr. Torres is releasing Mr. Jahanfard for payment of policy limits of $25,000.00."
In a return letter on February 20, 2009, Markowitz's partner, Joseph W. Carcione, Jr., acknowledged that Torres was to take $25,000 "in settlement in full for any and all rights, claims and causes of action that Jesus Torres has arising out of the accident that is the subject matter of this litigation." Carcione denied agreeing to any release, however. He stated that he wanted "this thing put to bed as a settlement in full of any and all rights, claims and causes of action my client has against your client by Friday, March 6, 2009 at 5:00 p.m. I want the agreement to be reached in writing." Carcione indicated that he would be willing to grant a written extension by fax, if one was requested in good faith and in writing. Then, referring to his "demand, " Carcione insisted that any acceptance be submitted by fax, by March 6, 2009 at 5 p.m.
Roe responded by fax on February 26, 2009, stating, "This will confirm that we have agreed to pay and you have agreed to accept $25,000.00 in settlement in full for any all [sic] rights, claims and causes of action that Jesus Torres has arising out of the accident that is the subject matter of this litigation from [sic] defendant Ali Jahanfard."
On March 17, 2009, Markowitz wrote to opposing counsel, including Roe, "regarding the settlement" between Torres and Jahanfard. Markowitz stated, "It is understood by the parties that both parties and their respective insurance companies have agreed to simply exchange any insurance funds, and each party will release the other. So, Mr. Torres is to receive $25,000 and Mr. Jahanfard is to receive $40,000, both in full satisfaction of their claims against each other. This settlement has no effect on either party's claims against other thir[d p]arties. [¶] Mr. Torres' executed release will follow shortly, with only minor changes, which I believe you will find acceptable."
The record indicates that in addition to the $25,000 received from Jahanfard's policy, Torres was to receive $15,000 from Valladolid's.
Later that day, Carcione wrote to say he had "just noticed" that the release sent by Roe specified $25,000 payable to Torres. Carcione protested that "[t]he agreement was $40,000." In a follow-up letter expressing frustration that he had been unable to reach Roe by telephone, Carcione accused Roe of game playing and bad faith by "sneakily changing the amount of the settlement." He asserted that there was no settlement and demanded that the amount be changed to $40,000, adding, "If I do not get what I consider to be a satisfactory explanation for the sudden disappearance of the $15,000 or if you do not retender the $40,000, immediately, I will refuse to accept the $40,000 in settlement at any time." Carcione evidently was attributing to Roe the responsibility for settlement on behalf of Valladolid, even though she represented only Jahanfard. Apparently he had not read his partner's correspondence that day, in which Markowitz emphasized that no parties other than Torres and Jahanfard were encompassed by the agreement.
In a response faxed the next day, Roe reminded Carcione that the settlement agreement in October 2008 was for $25,000, and was confirmed on February 20, 2009 and on February 26, 2009. Roe explained that this was the insured's policy limit, and there had never been an agreement to pay $40,000. Carcione replied that day, clarifying that the settlement called for Torres to receive $25,000 from Jahanfard and $15,000 from Valladolid. He reminded Roe repeatedly in this letter that there was no settlement until Torres signed the release, and he again accused her of trying to obtain a release for both defendants for only $25,000.
Another letter followed a March 24, 2009 telephone conversation with Roe. Carcione stated, "This will confirm our telephone conversation in which I indicated to you that I would like to get the $25,000 right away for personal reasons associated with one of my client's grand children [sic]. [¶] You told me that you would try to get it right away. If you can call them today and have them cut the check, I'll pick it up at your office tomorrow... if at all possible."
That same day Carcione again wrote to Roe: "Enclosed please find the Release in Full signed by my client, Jesus Torres. This Release releases your client and your client, only. [¶] Please forward to me the $25,000 check as promptly as possible." Attached was a release of Jahanfard signed by Torres on March 17, 2009. The last page contained Carcione's signature, attesting to his approval of the release.
Also on March 24, 2009 was a faxed correspondence from Carcione to Roe, recapitulating an encounter they had had in court that day and asking her to send the "Good Faith Agreement" she had mentioned. Roe replied the same day: "Pursuant to our conversation, enclosed please find another copy of the Stipulation for Good Faith Settlement. Please sign where indicated and return it to me via facsimile & mail." The enclosed "Stipulation and [Proposed] Order for Determination of Good Faith Settlement, " however, stated that both Jahanfard and Valladolid were to be dismissed from the action.
Carcione wrote: "Dear Ms. Roe: I saw you in Court today.... You asked me, if I was going to send you the Release. I said, 'I would send it to you right away.' You said, 'Great.' I sent you the release when I got back to my office by hand-delivery. I also faxed it. I followed up with a phone call to you asking for the check right away. I also put that in writing. You then called me on the telephone and asked if I had executed the Good Faith Agreement. I said, 'What?' You said you would send me a copy of the Good Faith Agreement that you want me to sign. I am still awaiting your Good Faith Agreement."
Carcione received Roe's proposed stipulation and release at about 3 p.m. that day. In his reply, he acknowledged delivering the signed release to her. He objected, however, to the document he had just received: "If you are demanding that I sign this Good Faith Stipulation document that you sent me, then there has been no meeting of the minds and there is no settlement." He then continued: "Demand is herewith made that you accept my demand of settlement for $25,000 as precisely articulated in the terms of the Release that my client signed and which I hand delivered and also faxed to you, today. I will not execute the Good Faith Stipulation that you sent to me today. This demand expires tomorrow night, March 25, 2009, at 5:00 p.m." Carcione insisted that any further communication between them be in writing, and that it be faxed no later than the 5 p.m. deadline.
The next day, having heard that Roe had expressed confusion by telephone to his secretary, Carcione reaffirmed his position and the deadline to accept his demand, which he now referred to as a "counter-offer." Roe replied that afternoon: "I am very confused as to the meaning of your letter. You have already hand-delivered the executed Release on this case accepting the $25,000.00 as settlement. I have asked that you sign the Stipulation for Good Faith Settlement which all the other parties have executed.... [¶] Please contact me to clarify why you have not signed the Stipulation." No further correspondence took place.
Carcione assumed that Roe was requiring him to sign the "Good Faith Stipulation" as a condition of settlement. He set forth his view of the recent events beginning with Roe's release, which he characterized as an offer, and denoting his client's signed release as a counteroffer, the "Good Faith Stipulation" as Roe's counteroffer, and his previous letter setting the 5 p.m. deadline as his final counteroffer.
On April 22, 2009, Jahanfard filed an application for a "determination that his settlement with plaintiff JESUS TORRES was entered into in good faith. [¶] Plaintiff has agreed to accept defendant ALI JAHANFARD's insurance policy liability limits and dismiss his action against defendant ALI JAHANFARD." Torres contested Jahanfard's request, asserting that "there was in fact no settlement" between him and Jahanfard. In response, Jahanfard related the prior correspondence and pointed to the signed release. Jahanfard noted that the "Stipulation and [Proposed] Order for Determination of Good Faith Settlement" had been signed by all the other defendants, and he asserted that Torres's only purpose in opposing this application was "to be obstructive" and harass Jahanfard.
After a hearing on Torres's motion to contest Jahanfard's application, the superior court denied the motion. In its June 24, 2009 order the court summarized its findings as follows: "Defendant Ali Jahanfard offered to settle with plaintiff Jesus Torres for the full amount of his insurance policy limits, $25,000. Plaintiff Torres accepted this offer and signed a written Release. This Release was also signed by counsel for Torres. By its terms Torres and Jahanfard have a binding agreement. There was never an agreement that Torres would release both Jahanfard and Defendant Jose Valladolid for $25,000. Such a contention is not being advanced by Defendant Jahanfard." The court concluded: "Defendant Jahanfard and Plaintiff Torres have a judicially enforceable settlement for $25,000. Defendant Valladolid is not being released by this particular settlement. This settlement is in good faith within the meaning and effect of [Code of Civil Procedure] Section 877.6."
This clearly articulated order did not end the dispute. On August 7, 2009, citing Torres's "refusal to adhere to the terms of the settlement agreement, " Jahanfard moved to enforce the settlement under Code of Civil Procedure section 664.6. In opposition, Torres argued that Jahanfard had failed to meet the requirements of section 664.6, because Jahanfard had not signed the Release in Full of All Claims and Rights before the 5 p.m. deadline on March 25, 2009. Torres further asserted that there never was a meeting of the minds; there was only a series of settlement offers, and the deadline set in his final "counter-offer" passed on March 25 without acceptance by Jahanfard.
All further statutory references are to the Code of Civil Procedure.
The superior court was not convinced by Torres's representation of the facts. On September 10, 2009 it entered an order granting the motion, based on its finding that both Torres and his attorney had agreed to the settlement and signed the release. From the ensuing judgment Torres brought this timely appeal.
Discussion
The only question presented in this appeal is whether the superior court correctly applied section 664.6 in finding a valid settlement between Torres and Jahanfard. This statute 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."
Torres renews the position he asserted below, contending first that there was no "writing signed by the parties, " because the release he signed on March 24, 2009 was not also signed by Jahanfard before the expiration of the offer. According to Torres, this omission "is of critical importance, since the 'Release in Full of All Claims and Rights, ' was drafted by Torres' counsel, and Jahanfard had not accepted its terms." The requirement of two signatures, he maintains, "is not simply a formality which can be overlooked." With no promises made by Jahanfard, the purported agreement "was always intended to be unilateral, and thus as a matter of law, unenforceable under Section 664.6." Torres also repeats the argument that "there was never any 'meeting of the minds, ' only a series of unaccepted offers."
Section 664.6 generally requires the parties themselves, not just their counsel, to sign a written agreement settling their action. (Levy v. Superior Court (1995) 10 Cal.4th 580, 584 (Levy); see also Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 810-811; Critzer v. Enos (2010) 187 Cal.App.4th 1242, 1253.) The rule is grounded on the recognition that settlement "is a decision to end the litigation, " and thus "obviously implicates a substantial right of the litigants themselves." (Levy, supra, at p. 584.) As the Levy majority explained, "The litigants' direct participation tends to ensure that the settlement is the result of their mature reflection and deliberate assent. This protects the parties against hasty and improvident settlement agreements by impressing upon them the seriousness and finality of the decision to settle, and minimizes the possibility of conflicting interpretations of the settlement. [Citations.] It also protects parties from impairment of their substantial rights without their knowledge and consent." (Id. at p. 585.)
However, as we observed in Stewart v. Preston Pipeline Inc. (2005) 134 Cal.App.4th 1565, 1580, "in Levy, it was the nonsignatory party litigant who challenged his attorney's authority to sign the stipulation as a prerequisite to enforcing the settlement under Code of Civil Procedure section 664.6. Here, plaintiff did personally sign the settlement agreement (as did his attorney); he claims that the agreement is unenforceable because defendants and their insurer did not personally sign the agreement. This distinction is of some consequence because neither defendants nor their insurer challenged defense counsel's authority to sign the stipulation on their behalf." Similarly, here neither Jahanfard nor his attorney ever questioned the terms or validity of the settlement and release signed by Torres and his attorney; it is Torres who seeks to use the absence of Jahanfard's signature to escape from the settlement he signed. No protective purpose would be served by endorsing such avoidance in these circumstances.
In any event, courts applying section 664.6 after Levy have recognized that when a defendant is represented by an insurance company, which has sole authority and control over settlement, the protective rationale of Levy is inapposite. As one court observed, the insured "normally cannot either bind the insurer by the insured's own consent nor prevent settlement by withholding consent.... For this reason, it is common practice for insurance counsel and an adjuster to handle the negotiation of insurance-funded settlements without the superfluous involvement of a fully protected insured." (Robertson v. Chen (1996) 44 Cal.App.4th 1290, 1295.) "Not only are the insured's 'substantial rights' not prejudiced... but the consent of the insured is usually superfluous." (Id. at pp. 1294-1295.)
In Fiege v. Cooke (2004) 125 Cal.App.4th 1350, 1354-1355, the Second District, Division One, recognized that the reflections expressed in Robertson v. Chen were dicta, but it quoted extensively from that opinion and applied the same reasoning to a case involving insured defendants who had not personally agreed to a settlement. In Fiege, as in the case before us, it was the plaintiff who contested the settlement, even though he had previously given his oral consent before the court. The plaintiff's challenge was rejected; it was sufficient that the insurers' representatives were present and did not object when the settlement was recited on the record. (Id. at p. 1356.)
Torres makes no attempt to refute the Robertson and Fiege analysis or distinguish either case. Instead, he relies on Sully-Miller Contracting Co. v. Gledson/Cashman Construction, Inc. (2002) 103 Cal.App.4th 30. There the plaintiffs extended written settlement offers to the defendants, with no provision in the documents for signatures by the defendants. When payment was not received, the plaintiff withdrew the offer. Several months later the plaintiff refused the defendants' tender of payment. The Second District, Division Six, held that because the documents had not been signed by the defendants as required by section 664.6, there had been only a unilateral offer, "leaving nothing to be enforced." (Id. at p. 36.)
In Sully-Miller, it was the nonsignatory parties who were asserting a valid settlement. This case, however, presents the converse situation: the party who signed the agreement is now seeking to avoid its effect. As in Stewart v. Preston Pipeline Inc., supra, Torres's substantial rights are not impaired by enforcing the settlement agreement against him. Jahanfard was represented by his automobile insurer, whose counsel effected the settlement with Torres through a series of letters exchanged between October 2008 and March 2009. Although the appellate record does not contain a copy of Jahanfard's policy, his counsel represented that the Robertson analysis applied. In its September 10, 2009 order the court noted that both plaintiff and his counsel had agreed to the $25,000 settlement and signed the release. Implicitly, then, the court agreed with Jahanfard that his signature had not been necessary. The trial court is presumed to have determined all facts necessary to the judgment, including the finding that Jahanfard's insurer had the right to settle without Jahanfard's consent and the right to bind him to the settlement. As noted, Torres does not contend otherwise or even address this judicial exception to the writing requirement of section 664.6.
Torres maintains, however, that there was no settlement agreement in the first place; instead, he argues, the final exchange was only an offer and a counteroffer that was not accepted. He compares the circumstances of this case to those described in both Sully-Miller and Weddington Productions, Inc. v. Flick, supra, 60 Cal.App.4th 793. As noted, however, in Sully-Miller the plaintiffs withdrew their offer, having received no payment, and only months later did the defendants attempt to sign the offers and enforce them as a settlement agreement. In this case, by contrast, the court found a completed agreement, signed by the party to be bound, on terms agreed to by both parties, before the conflict arose over the "Stipulation and [Proposed] Order for Determination of Good Faith Settlement."
These facts also distinguish the present case from Weddington Productions, supra, 60 Cal.App.4th 793. There the appellate court reversed a 35-page judgment enforcing a one-page memorandum that purported to be a settlement agreement. That memorandum, the outcome of a mediation proceeding, covered only some of the material terms while anticipating further dispute over others. In the parties' subsequent attempt to formalize the additional terms, the anticipated dispute did become manifest. The private judge the parties had used then signed a 33-page "order" imposing on the appellant settlement terms to which they had never agreed. (Id. at p. 797.) As no meeting of the minds had ever occurred, enforcement of the "order" should never have been made.
No comparable events took place here. The terms of the settlement were outlined as early as October 2008, and by February 20, 2009, Carcione clearly stated that Torres had "agreed to take $25,000 in settlement in full for any and all rights, claims and causes of action that Jesus Torres has arising out of the accident." Notwithstanding Carcione's inexplicable protest over the prospect of a release, his partner, Aaron Markowitz, confirmed on March 17 that "[i]t is understood by the parties" that "each party will release the other" in exchange for their insurance policy limits, "both in full satisfaction of their claims against each other." (Italics added.) Markowitz promised a signed release "shortly" thereafter. Indeed, on March 24, Carcione himself sent Roe Torres's signed release.
In his March 17 letter, Markowitz plainly stated that the settlement between Torres and Jahanfard had "no effect" on either party's claims against any other parties. Shortly after sending the release, Carcione reminded Roe that he "would like to get the $25,000 right away" and suggested that he pick up the check the next day. Then, however, his intentions dissolved into frustration when Roe asked him to sign the "Stipulation and [Proposed] Order for Determination of Good Faith Settlements." At that point Carcione accused Jahanfard's insurer of bad faith. He refused to "guarantee" that he would respond to any further communication; he believed that the situation was "sufficiently clear" and he was "tired of this bologna [sic]." Carcione suggested that if Roe was "demanding" that he sign the Stipulation, then "there has been no meeting of the minds." He then adopted the conviction that in fact there had been no meeting of the minds. He proceeded to recharacterize the existing settlement as his counteroffer and set a deadline for acceptance. Torres's counsel steadfastly adhered to that position throughout the next several months. Even though the superior court clearly stated in its June 24, 2009 order that there was a settlement that did not include defendant Valladolid, and even though Jahanfard's counsel has repeatedly affirmed that position, Carcione and Markowitz continued to deny the existence of the settlement on the false premise that the opposing party had represented the Stipulation as part of a proposed settlement. In light of the June 24 order, further litigation should not have been necessary; but counsel's adamant refusal to cooperate thereafter necessitated Jahanfard's motion to enforce the settlement agreement. The superior court's September 2009 order was consistent with its prior ruling.
"The trial court's factual findings on a motion to enforce a settlement under section 664.6 'are subject to limited appellate review and will not be disturbed if supported by substantial evidence.' " (Critzer v. Enos, supra 187 Cal.App.4th at p. 1253, quoting Williams v. Saunders (1997) 55 Cal.App.4th 1158, 1162; Chan v. Lund (2010) 188 Cal.App.4th 1159, 1166.) The record here supports the superior court's order enforcing the settlement. Its terms were spelled out as early as October of 2008. The February 20 and 26 correspondence was consistent with those terms, providing for Torres's release of Jahanfard in exchange for Jahanfard's policy limits of $25,000. On March 17 the parties acknowledged having reached a settlement, with Torres's release signed that day and sent one week later. Torres clearly agreed to accept Jahanfard's automobile policy limits and in exchange, released Jahanfard (and only him) from all claims arising out of the August 2006 accident.
Whether due initially to a failure of communication between Torres's attorneys or a simple misunderstanding of the settlement terms, Torres's obdurate insistence that there were at most negotiations and a rejected counteroffer only prolonged what should have been a straightforward settlement process. His counsel's intransigent unwillingness to clear up the confusion evident on March 24, 2009, followed by his recalcitrance in the face of the superior court's elucidation of the settlement details, did nothing to further the efficient resolution of disputes as contemplated in section 664.6.
Disposition
The judgment is affirmed.
WE CONCUR: RUSHING, P. J., PREMO, J.