Filed 4/18/18 Willoughby v. Levin CA1/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION ONE


BART WILLOUGHBY,
Plaintiff and Respondent,
v.
JOAN KLASS LEVIN,
Defendant and Appellant.

A150051

(San Mateo County
Super. Ct. No. CIV 535961)

Defendant Joan Klass Levin appeals after the trial court granted the motion of plaintiff Bart Willoughby to enforce a settlement agreement between the parties pursuant to Code of Civil Procedure section 664.6. On appeal, defendant contends the trial court exceeded its authority by imposing a settlement with different and more expansive terms than she agreed to on the record at a mandatory settlement conference. We agree, in part, and modify the court’s order by striking two of its provisions. As modified, the order and judgment are affirmed.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
On July 27, 2015, plaintiff recorded a mechanics’ lien in the amount of $625,000 against defendant’s real property located in Pacifica.
On October 23, 2015, plaintiff filed a complaint against defendant seeking payment for services rendered “to prevent further erosion and to assist in making additional improvements to the property and structures.” He asserted he was owed $625,000 for work performed at the property.
On January 11, 2016, plaintiff recorded a conditional waiver and release of the mechanics’ lien, in order to allow defendant to sell the property. Pursuant to the waiver, an escrow account was opened at First Republic Bank to hold $442,379 of the sale proceeds. The account required the signatures of both parties’ counsel for any withdrawals. By agreement of the parties, plaintiff had received $25,900 from the escrow account as of August 12, 2016, the date of the mandatory settlement conference.
On June 22, 2016, the parties mediated their disputes before a JAMS mediator.
On August 12, 2016, the court held a hearing in open court after the parties appeared for the mandatory settlement conference, so that the parties could put the terms of their agreement on the record. Defendant’s counsel agreed to recite the terms of the agreement. Counsel stated: “It’s my understanding, Judge, that the defendant, Joan Levin, has agreed to pay the total sum of $85,000 to the Plaintiff in full and final settlement of this matter. That payment will be made as a result of the withdrawal of $85,000 from the First Republic account in San Mateo County. After the release of $85,000 in the form of a check made payable to Bart Willoughby and his attorney of record Gary Gleason, a dismissal with prejudice will be entered in this action. [¶] In consideration for that, a general release will be executed whereby each party will release the other party from any monetary claims directly or indirectly related to the instant litigation.”
After discussing when the releases would be delivered and executed, the trial judge asked: “Okay. Anything else, Mr. Gleason?” Defendant’s counsel responded: “No, your Honor. That’s the terms.” Both parties were sworn in and verified both that they had heard and understood the terms of the agreement as they were recited, and that they agreed to be bound by it. The court concluded both sides had “reached a full and complete settlement of all issues in this case.” It then vacated the trial date.
On September 1, 2016, after a series of negotiations, plaintiff’s counsel sent defendant’s counsel a draft of a nine-page version of the settlement agreement. The draft agreement provides that defendant would pay plaintiff a total sum of $85,000, after which plaintiff would file a dismissal with prejudice. The agreement sets forth a recitation of mutual releases, including a mutual waiver of rights under Civil Code section 1542. It also includes a provision whereby defendant agrees to “pay any outstanding fees and costs related to the services” of the JAMS mediator. Defendant refused to sign the draft agreement.
On September 15, 2016, plaintiff filed a motion to enforce the settlement. In his pleading, he claimed “[i]t was understood by the parties and counsel that this amount [$85,000] assumed payment of the $4,950.00 mediator’s bill [by defendant].”
On September 22, 2016, defendant filed an opposition to plaintiff’s motion. She disputed that the written agreement accurately reflected the terms she had agreed to “ ‘on the record.’ ” In her declaration, she stated that she had already paid plaintiff $25,900, which she thought would be credited against any settlement payment. She also asserted that she had not agreed to give up the right to bring noncontractual claims against him for embezzlement and financial elder abuse, among others.
On September 27, 2016, the parties appeared in court. Defendant’s counsel stated that his client’s understanding had been that “any moneys already paid to [plaintiff] would be credited against the total sum.” The trial judge responded: “And we don’t need testimony; I was there. I was there for the swearing of Ms. Willoughby [sic]. She sat, I think, in the back if I recall correctly, and I had to speak extra loud to make sure she understood this. Counsel were in chambers talking about this very issue in front of me. I remember it. This is an $85,000 settlement. There are no set-offs. It’s gonna come out of the escrow account. I’m glad the money’s still there. If you need a court order, I’ll give you that, so the escrow instructions are clear. [¶] We all knew the terms. It was discussed on the record. I think the transcript is absolutely clear. If there was to be any set-offs, it would have been articulated in the transcripts. And that’s it. I don’t think we need testimony. I don’t think we need any further clarification. That’s the beauty of a judicially-supervised settlement. And I will rule in favor [of plaintiff’s counsel’s] request and order that the $85,000 be enforced by way of an order from the Court of the escrow instructions.”
Plaintiff’s counsel then brought up the bill for the mediator. He recalled that the parties had originally discussed a $90,000 settlement, but defendant’s counsel had “said his client was not willing to do that, but if we accept an $85,000, then they would pay the mediator bill.” Defendant’s counsel countered that the outstanding mediator fee was to be shared by both parties, complaining that plaintiff was seeking to attribute the entire fee to his client even though “that wasn’t on the record.” The trial judge responded: “That was discussed. So [plaintiff] gets $85,000 out of the escrow account and your client pays the mediator. All right? That concludes our hearing. There was no further discussion on this.”
Plaintiff’s counsel then argued that the transcript showed the parties had agreed to a mutual release. The trial court agreed, noting, “I think this is something that was on the transcript. I think the transcript is clear.”
On September 29, 2016, the trial court filed its order granting plaintiff’s motion for entry of judgment enforcing the settlement agreement. The order provides that defendant is to pay plaintiff $85,000, without any setoff for funds previously withdrawn from the escrow account. After delivery of the payment, plaintiff was ordered to dismiss the action with prejudice. The order also includes a mutual release, releasing the parties “from any and all claims, causes of action, debts, loans, duties, or obligations directly or indirectly relating to the Action.” The release includes a waiver of rights under Civil Code section 1542. Finally, the order specifies that defendant “will pay the outstanding fee of $4,950.00 related to the services of [the mediator].” Defendant has appealed from this order.
DISCUSSION
I. Section 664.6 and the Applicable Standard of Review
Section 664.6 provides a summary procedure “for entry of judgment enforcing a settlement agreement.” (In re Marriage of Assemi (1994) 7 Cal.4th 896, 911 (Assemi).) Section 664.6 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.” (Italics added.) The personal consent to the terms of the settlement by each of the parties is a statutory prerequisite to a settlement agreement that is enforceable under section 664.6. (Critzer v. Enos (2010) 187 Cal.App.4th 1242, 1257–1258.)
In ruling on a section 664.6 motion, the trial court has authority to interpret both the express and implied terms of a settlement agreement. (Skulnick v. Roberts Express, Inc. (1992) 2 Cal.App.4th 884, 889; Fiore v. Alvord (1985) 182 Cal.App.3d 561, 566.) “The power of the trial court under Code of Civil Procedure section 664.6, however, is extremely limited. ‘Although a judge hearing a section 664.6 motion may receive evidence, determine disputed facts, and enter the terms of a settlement agreement as a judgment [citations], nothing in section 664.6 authorizes a judge to create the material terms of a settlement, as opposed to deciding what terms the parties themselves have previously agreed upon.’ [Citation.] . . . [¶] A settlement agreement is simply a contract. [Citation.] The retention of the trial court’s jurisdiction to enforce the settlement agreement is no different than allowing a person with a contract with the school district to sue it for breach. The court is powerless to impose on the parties more restrictive or less restrictive or different terms than those contained in their settlement agreement.” (Hernandez v. Board of Education (2004) 126 Cal.App.4th 1161, 1176; see Terry v. Conlan (2005) 131 Cal.App.4th 1445, 1459 [court erred in granting section 664.6 motion where record demonstrated no meeting of minds concerning material terms of settlement].)
When acting on a section 664.6 motion, the court must determine whether the parties entered into a valid and binding settlement of all or part of the case. (Assemi, supra, 7 Cal.4th at p. 905.) In making this determination, the court should consider whether the transcript of the oral stipulation and any other evidence shows that the material terms of the settlement were explicitly defined, the supervising judicial officer questioned the parties regarding their understanding of those terms, and the parties acknowledged their understanding of and agreement to those terms. (Id. at p. 911.)
“Factual determinations made by a trial court on a section 664.6 motion to enforce a settlement must be affirmed if the trial court’s factual findings are supported by substantial evidence. [Citations.] Other rulings are reviewed de novo for errors of law.” (Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 815 (Weddington).)
II. Application
Defendant contends she did not consent to the terms of the settlement imposed by the trial court. Specifically, she argues that she never agreed to pay the remaining $4,950 the parties owed to their mediator. She also asserts she never agreed to the expansive waiver and release terms that the court incorporated into its order. Nor, she claims, did she agree to the language excluding any “ ‘setoff, deduction, or other reduction’ ” in the settlement amount.
“A settlement agreement is a contract, and the legal principles which apply to contracts generally apply to settlement contracts. [Citation.] An essential element of any contract is ‘consent.’ [Citations.] The ‘consent’ must be ‘mutual.’ [Citations.] ‘Consent is not mutual, unless the parties all agree upon the same thing in the same sense.’ [Citations.] [¶] ‘The existence of mutual consent is determined by objective rather than subjective criteria, the test being what the outward manifestations of consent would lead a reasonable person to believe.’ [Citation.] Outward manifestations thus govern the finding of mutual consent required by Civil Code sections 1550, 1565 and 1580 for contract formation. [Citation.] The parties’ outward manifestations must show that the parties all agreed ‘upon the same thing in the same sense.’ [Citation.] If there is no evidence establishing a manifestation of assent to the ‘same thing’ by both parties, then there is no mutual consent to contract and no contract formation.” (Weddington, supra, 60 Cal.App.4th at pp. 810–811.)
There was nothing in the parties’ outward manifestations on August 12, 2016, to suggest a lack of mutual consent to the terms of the settlement as stated on the record. Both parties were present in court and were represented by counsel. Defendant’s counsel read the terms of the parties’ stipulation into the record, including defendant’s agreement “to pay the total sum” of $85,000, “in the form of a check made payable to [plaintiff] and his attorney of record.” Plaintiff agreed to file a dismissal with prejudice, in consideration for which “a general release” would be executed “whereby each party will release the other party from any monetary claims directly or indirectly related to the instant litigation.” These terms represent the sum total of what the parties agreed to in open court. Under questioning by the trial court judge, both parties affirmed that they heard and understood the terms of the agreement, did not have any questions about it, and were prepared to be bound by it. Significantly, there was no mention of any offset for any prior payments made to plaintiff. The transcript is also silent as to the obligation to pay mediation fees. It also does not include any reference to a waiver of rights under Civil Code section 1542.
In ruling on a section 664.6 motion, the trial court is not necessarily bound to enter judgment on the settlement terms precisely as such terms were previously stated by the parties. The court may examine evidence as necessary and resolve disputed facts, but its purpose in doing so is only to decide what the parties previously agreed upon. (Weddington, supra, 60 Cal.App.4th at p. 810.) Unquestionably, when the judge who presided over the settlement also hears the section 664.6 motion to enforce the settlement, the judge may consider his or her own recollection of the settlement proceedings. (Kohn v. Jaymar-Ruby (1994) 23 Cal.App.4th 1530, 1533.) However, if the evidence presented to the court does not establish that the parties did in fact reach an agreement on a particular term, the court has no power to create such a term and impose it in entering judgment under section 664.6. (Ibid.)
Having reviewed the record, we conclude two aspects of the trial court’s rendition of the settlement agreement are not supported by substantial evidence. The court’s order filed on September 29, 2016, is inconsistent with the August 12, 2016 reporter’s transcript in that (1) it requires defendant to pay the $4,950 outstanding mediation fee, and (2) includes a waiver of rights under Civil Code section 1542.
However, the order is consistent with the transcript with respect to the $85,000 payment to be made by plaintiff. At the September 27, 2016 hearing to enforce the settlement agreement, the court addressed defendant’s argument that the $85,000 amount was to be offset by any money already paid to plaintiff: “And we don’t need testimony; I was there. . . . Counsel were in chambers talking about this very issue in front of me. I remember it. This is an $85,000 settlement. There are no set-offs. . . . [¶] . . . If there was to be any set-offs, it would have been articulated in the transcripts.” (Italics added.) We concur with the lower court. No setoff was mentioned on the record.
As to the mediator’s fee and the waiver, while the trial court appeared to concur with plaintiff’s counsel’s position that defendant had agreed to these terms in chambers, neither term is mentioned in the August 12, 2016 transcript. Thus, just like the setoff that the court refused to impose, neither the mediation fee nor the Civil Code section 1542 waiver is “ ‘articulated in the transcripts.’ ” The mediation fee is not mentioned at all. And while it is evident the parties contemplated a mutual release, there was no indication that it was to be more than an ordinary general release. There is no evidence of any agreement by defendant to the waiver of statutory rights under Civil Code section 1542. Further, there is nothing in the transcript to suggest that the parties agreed to be bound by anything that had not been expressly stated on the record. Therefore, no substantial evidence in the record supports a conclusion that the parties had agreed to the mediation fee payment or the statutory waiver. As to these terms, we conclude the court did not merely decide the terms to which the parties agreed, but exceeded its authority by imposing new and different terms. (Weddington, supra, 60 Cal.App.4th at pp. 809–810.)
DISPOSITION
The order dated September 29, 2016, is modified by striking from it paragraph 4 waiving all rights under section 1542, and striking paragraph 6 requiring defendant to pay the $4,950 outstanding mediation fee. As so modified, the order under review is affirmed. The parties are to bear their own costs on appeal.


_________________________
Dondero, J.


We concur:


_________________________
Humes, P. J.


_________________________
Margulies, J.




























A150051 Willoughby v. Levin