WALTON v. MUELLER No. H034058.
180 Cal.App.4th 161 (2009)
TIMOTHY J. WALTON, Plaintiff and Respondent, v. SCOTT MUELLER, Defendant and Appellant.
Court of Appeals of California, Sixth District.
December 15, 2009.
Carr & Ferrell, Robert J. Yorio and Christopher P. Grewe for Defendant and Appellant.
Law Offices of Timothy Walton and Timothy J. Walton for Plaintiff and Respondent.
A $40,000 default judgment was entered against defendant Scott Mueller in this action in June of 2006. That judgment became final. Some two years later, Mueller began negotiations with Timothy J. Walton, the judgment creditor, to satisfy the judgment. Although Mueller contends that they reached an agreement to fully satisfy the judgment by Mueller paying Walton $15,000, Walton disputes that such a contract was ever formed. Without actually having paid anything, Mueller filed a motion to enforce the alleged settlement, purportedly under Code of Civil Procedure section 664.6,
STATEMENT OF THE CASE
Walton, a lawyer representing himself, initiated this action by filing his complaint for damages and injunctive relief against defendants other than Mueller on December 28, 2004. It alleged violations of the Consumers Legal Remedies Act (Civ. Code, § 1750 et seq.) for a first cause of action and a second claim based on "California Restrictions On Unsolicited Commercial E-mail Advertisers" under Business and Professions Code section 17529.5. The factual basis of the claims was that the defendants had allegedly sent Walton numerous unsolicited commercial e-mails containing deceptive and false information and advertisements. The complaint was amended twice, among other things adding Mueller, a Florida resident allegedly doing business as "Acceleratebiz Incorporated," as an individual defendant. Mueller was alleged in the operative third amended complaint to have sent Walton 40 unsolicited e-mails, for each of which Walton sought, among other things, $1,000 in statutory liquidated damages under Business and Professions Code section 17529.5, subdivision (b)(1)(B)(ii).
Default was entered against Mueller on January 26, 2006. A default judgment against him was entered by the court on August 25, 2006, for $40,000, supported by Walton's declaration as to having received the 40 unsolicited commercial e-mails from Mueller.
At that point, Walton was simultaneously in the process of executing on the judgment by levy against one of Mueller's bank accounts, though Walton did not apprise Mueller's counsel of this. But after the bank account was levied, Mueller told his lawyer, who wrote to Walton on October 16, 2008, demanding that execution efforts cease while they "finalize settlement documentation." The letter did not mention the terms of any specific settlement. Walton responded by letter dated October 17, 2008, to Mueller's counsel, stating that he would not cease executing on the judgment, as was his right. The letter also impliedly rejected Mueller's last settlement offer of $15,000 payable over nine months
On October 22, 2008, Mueller's counsel responded by letter to Walton. Among other things, he asserted that a binding contract had been reached in settlement of the judgment on the terms relayed in Mueller's last offer—$15,000 payable over nine months. But, he continued, "[n]otwithstanding that agreement, the attorneys working on your behalf have apparently filed an execution lien against Mr. Mueller's bank account.
On October 31, 2008, on Mueller's application, the court issued an order to show cause why enforcement of the judgment should not be stayed on account of the alleged settlement agreement composed of payment by Mueller to Walton of $15,000 over nine months. But on November 13, 2008, the court denied Mueller's motion to stay enforcement, specifically finding "that the parties did not reach any settlement agreement."
On November 24, 2008, Mueller himself wrote to Walton, stating, "In response to your letter of October 17, 2008 . . ., I accept your offer to settle this lawsuit in exchange for a lump sum $15,000 payment. I hereby tender the settlement payment of $15,000." Enclosed with the letter was a copy of a cashier's check payable to Walton, but no actual check.
In response, Walton wrote to Mueller's counsel on December 3, 2008. He stated his position that his October 17th offer to accept a check for $15,000 in full satisfaction of the judgment had been rejected by Mueller's counsel's letter of October 22d, which had offered to fully satisfy the judgment by payment of $15,000 directly from Mueller's bank account that was subject to the execution levy rather than by separate check. This would necessarily have required Walton to release the levy before receiving payment. Walton then offered to "agree to a confidential settlement for $60,000. Once I have the check for $60,000, I will cease enforcement actions."
On January 22, 2009, Mueller filed a motion to enforce what he contended was a binding settlement, as evidenced by Walton's offer of October 17th to accept a check for $15,000 in full satisfaction of the judgment and Mueller's letter of November 24th enclosing the copy of a cashier's check. The motion was brought under section 664.6, on the ground that the parties had agreed to the terms of a settlement in writing. Walton opposed the motion, reiterating his contention that no contract had been formed. The court denied the motion from the bench, stating that it did not "believe there was a valid settlement agreement entered into."
There are two issues relating to appealability.
First, is the order appealable? 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 there are accordingly issues left in the trial court for consideration. (Doran v. Magan (1999) 76 Cal.App.4th 1287, 1293 [91 Cal.Rptr.2d 60] ["The denial of the motion, rather than finally disposing of the action, expressly leaves it open."]; cf., Viejo Bancorp, Inc. v. Wood (1989) 217 Cal.App.3d 200, 205 [265 Cal.Rptr. 620] (Viejo Bancorp) [order granting § 664.6 motion is appealable as the "intended substance and effect of the judgment is to finally dispose of" the action].) But here, because the motion concerned an alleged settlement to satisfy a judgment, the motion was necessarily brought after judgment had been entered. Apart from the question of the motion's propriety at that juncture, its denial nevertheless resulted in an order after judgment that is arguably appealable under section 904.1, subdivision (a)(2) as an order made after an appealable judgment. We will accordingly treat the order denying the section 664.6 motion as such in these narrow circumstances, particularly because there are no issues left for the trial court's consideration, a hallmark of an appealable order or judgment.
The second issue relating to appealability in this case is whether the appeal is premature as no written order was entered denying the motion. The minute order reflecting that the motion was denied was not included in the record but we obtained it from the superior court and have augmented the record on our own motion to include it. The minute order does not provide for or require that a written order be prepared for entry. It is therefore appealable even though it is not a formal, signed order. (In re Marriage of Lechowick (1998) 65 Cal.App.4th 1406, 1410 [77 Cal.Rptr.2d 395] [unsigned minute order appealable unless it recites that formal order is to be prepared], criticized on another point in NBC Subsidiary (KNBC-TV), Inc. v. Superior Court (1999) 20 Cal.4th 1178, 1195, fn. 11 [86 Cal.Rptr.2d 778, 980 P.2d 337].) And for purposes of determining the time for filing a notice of appeal, the minute order was filed or entered on the date it was entered in the permanent minutes—February 17, 2009. (Cal. Rules of Court, rule 8.104(d)(2); Strathvale Holdings v. E.B.H. (2005) 126 Cal.App.4th 1241, 1248 [25 Cal.Rptr.3d 372].) The order was
II. The Trial Court Properly Denied the Section 664.6 Motion
The parties assumed the application of section 664.6 and focused their briefing on whether or not an enforceable contract was reached. But we question the applicability of section 664.6 to the circumstances presented here, even if a binding contract was formed.
The threshold and dispositive issue presented here is whether section 664.6 can be applied to enforce an alleged settlement that occurs after a judgment has already become final in a civil action. At that point, is the litigation "pending" such that section 664.6 may be applied, particularly when the only remedy made available by the statute is entry of judgment pursuant to the settlement? This question involves construction and application of the statute, to which we apply independent review. (Williams v. Saunders (1997) 55 Cal.App.4th 1158, 1162 [64 Cal.Rptr.2d 571].) In doing so, we review the court's ruling and not its rationale. (Davey v. Southern Pacific Co. (1897) 116 Cal. 325, 329-330 [48 P. 117]; Perlin v. Fountain View Management, Inc. (2008) 163 Cal.App.4th 657, 663-664 [77 Cal.Rptr.3d 743].)
Previous cases analyzing the applicability of section 664.6 have addressed in other contexts the meaning of the phrase "pending litigation." In Viejo Bancorp, for example, parties to the action had agreed to a settlement of the case, and the action was dismissed. (Viejo Bancorp, supra, 217 Cal.App.3d at pp. 203-204.) After problems implementing the settlement arose, one of the parties then filed a new action. The party then successfully moved in that action under section 664.6 to enforce the earlier settlement by entry of judgment in the new action pursuant to the settlement of the previously dismissed one. (Viejo Bancorp, at p. 204.) The Court of Appeal reversed, holding that a section 664.6 motion "cannot be made in a separate action to enter judgment pursuant to the terms of a settlement in a prior action." (Viejo Bancorp, at p. 208.) In so concluding, the court considered the issue one of subject matter jurisdiction. It observed that "[b]y its very terms, section 664.6 is limited to settlements reached in pending litigation" and that the statute "requires an action to be pending when the parties enter into the agreement." (Id. at p. 206.)
In Kirby, the plaintiff filed a wrongful death action. The defendant asserted in its answer that a settlement had been reached before litigation had even begun. The defendant moved to enforce that settlement under section 664.6 and the trial court granted the motion, dismissing the action. (Kirby, supra, 78 Cal.App.4th at pp. 842-843.) The Court of Appeal reversed, concluding that the summary procedures of section 664.6 do not apply to a settlement agreement made before litigation was actually pending. The court reasoned that the statutory language "refers to settlements by `parties to pending litigation' who `stipulate . . . for settlement of the case . . .'" and that this language is clear and unambiguous in its requirement that parties be litigants who settle while litigation is pending. (78 Cal.App.4th at pp. 844-845.) The court further observed that the statute's legislative history reinforced its requirement that litigation be pending, as the problem the Legislature had targeted was that of parties to a settlement reached at a pretrial conference changing their minds after the case had been taken off calendar—a problem that does not exist outside the context of pending litigation. (Id. at p. 845.)
In Housing Group v. United Nat. Ins. Co. (2001) 90 Cal.App.4th 1106 [109 Cal.Rptr.2d 497] (Housing Group), parties to an insurance dispute participated in private mediation and reached a settlement. No lawsuit was pending
These three cases all address the "pending litigation" requirement of the statute by narrowly construing this term on its face, which is a starting point in the construction of the statute. But none of them presents the circumstance in which section 664.6 was invoked after a judgment had already been entered. In re Marriage of Armato (2001) 88 Cal.App.4th 1030 [106 Cal.Rptr.2d 395] (Armato) is the only published case to address section 664.6's application to a postjudgment circumstance. There, the parties' marriage was dissolved by a judgment of dissolution that included provisions relating to the husband's payment of monthly child support. The judgment also provided that the court would retain continuing jurisdiction to effectuate the terms of the judgment and that no separate proceedings would be required in order to do so. (Armato, at pp. 1032-1033.) At one point, pursuant to motion, the court modified child support. Later, the parties on their own agreed to another modification by which the husband would pay higher support and they reduced their agreement to a writing that both of them signed. The husband made the higher payments for some time but then reduced his payments to the old amount based on his assertion that due to other circumstances between the parties, he could no longer afford the higher payments. (Id. at pp. 1033-1034.) The wife brought a motion under section 664.6 to enforce their postdissolution-judgment written agreement. The trial court granted the motion, concluding that the husband and wife were parties to pending litigation as required by the statute "`inasmuch as there was continuing jurisdiction to modify a support order in a family law case.'" (88 Cal.App.4th at p. 1034.)
Faced with the question whether the meaning of "pending litigation" as used in section 664.6 applies to postdissolution child support matters, the Court of Appeal first noted as important that the judgment in that case itself provided for continuing jurisdiction to effectuate it and specifically provided
The Armato court went on to analyze the meaning of "pending" in the context of family law, observing that in that specific and unique context, as distinct from ordinary civil actions, a dissolution action remains pending after entry of judgment, particularly for purposes of child support modification. (Armato, supra, 88 Cal.App.4th at pp. 1045-1047; see Lerner v. Superior Court (1952) 38 Cal.2d 676, 685 [242 P.2d 321] [many diverse proceedings grow out of a divorce action and arise after entry of the final decree]; Lamborn v. Lamborn (1923) 190 Cal. 794, 795-796 [214 P. 862] [dissolution action remained pending as to child support issues].) Further, the court observed, section 1049, which provides that "[a]n action is deemed to be pending from the time of its commencement until its final determination upon appeal, or until the time for appeal has passed . . .," does not apply to child support proceedings. (Armato, supra, 88 Cal.App.4th at p. 1047.)
Based on all of these considerations, the Armato court concluded that for purposes of section 664.6, "`litigation' was `pending' . . . when [the parties] executed the letter agreement modifying child support" such that the statute could be used, even postdissolution judgment, to enforce the agreement. (Armato, supra, 88 Cal.App.4th at p. 1047.)
The order denying Mueller's section 664.6 motion is affirmed.
Rushing, P.J., and Elia, J., concurred.
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