Sometimes, a party hesitates to settle her court case during a mediation because she is afraid that the other party will not honor the settlement agreement. If the other party does breach the agreement, what can she do about it?

       Well. . . at least in California, she can file a motion to enforce the settlement pursuant to Code of Civil Procedure (“CCP”) §664.6 which states:

      “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.”

       As the parties found out in Hines v. Lukes, California Court of Appeal, Second Appellate District, Case No. B199971 (Oct. 27, 2008), this simple motion procedure actually works.

       In Hines v. Lukes, supra, the parties – Noel Hines and Pat Lukes – were neighbors and owners of contiguous lots in the City of Los Angeles. Lukes owned an easement or a right to use  a triangular portion of the Hines’ property.
 

      According to a complaint filed by Hines against Lukes attaching the recorded easement document, the easement was “solely for ingress, egress and drainage.” Hines alleged that Lukes violated the easement by “permanently parking vehicles” there and “by placing trash bins, a dumpster, and waste in the easement area.” (Id. at 3.)
 

      Lukes countered by filing a separate civil harassment action and seeking an injunction, but dismissed this action. Lukes then countersued Hines (in Hines’ lawsuit) alleging that the easement could be used not only for ingress, egress and drainage, but for “general driveway purposes.”
 

      The trial court ordered the parties to attend a mandatory settlement conference. At that conference, Hines and Lukes were able to settle their differences.  In open court, with a court reporter duly transcribing everything, they orally agreed to a settlement stating the terms “on the record,” as lawyers would say.

       After the parties finished putting the settlement “on the record,” the court stated that it understood that the terms would be put into writing but that “. . .the settlement is enforceable as of now.” (Id. at 4.)
 

        As may be guessed, the parties did not live up to the terms of their agreement. Hines filed a motion for entry of judgment pursuant to the oral agreement made in open court, arguing that Lukes had “. . .failed to resurface her portion of the driveway in neutral-colored concrete within one year after the settlement as required by the settlement.” (Id. at 5.) Hines also contended that Lukes refused to participate in mediation. (Id.)

       The court ordered the parties to mediation and continued the hearing on the motion for several months.
 

      Eventually, when the motion was heard, the court, again, suggested the parties attend mediation, only to be told that the parties did attend mediation but Hines walked out. The court continued the hearing, encouraging the parties to resolve their differences. (Id. at 7.)

       At the continued hearing, the court again suggested that the parties attempt mediation as required by the settlement agreement, but was reminded that Hines had walked out of the previous mediation.

       Consequently, the trial court was confronted with deciding the issues. Noting that it did not have jurisdiction to go into the substance of the matter or to re-mediate the dispute, but only had jurisdiction to enforce the terms and conditions of the settlement, the trial court did just that -  in the form of a judgment, it set out the terms of the settlement with which Lukes had not complied ordered her to do so.

       Lukes appealed the judgment, contending that the trial court did not consider her opposition, that Hines had waived the right to enforce the settlement by not invoking this procedure sooner and that Hines had also prevented her performance of her settlement obligations. 

       The appellate court affirmed, noting that this statute – CCP §664.6 – “provides a summary procedure to enforce a settlement agreement by entering judgment pursuant to the terms of the settlement.” (Id. at 11.) Under this statute, “. . . [t]he court retains jurisdiction to enforce a settlement . . . even after a dismissal, but only if the parties requested the retention of jurisdiction before the dismissal. Such a request must be made in a writing signed by the parties or orally before the court.” (Id. at 11-12.)

       The court further explained:

      “A court ruling on a motion under Code of Civil Procedure section 664.6 must determine whether the parties entered into a valid and binding settlement (citation.) A settlement is enforceable under section 664.6 only if the parties agreed to all material settlement terms (citations.) The court ruling on the motion may consider the parties’ declarations and other evidence in deciding what terms the parties agreed to. . . . If the court determines that the parties entered into an enforceable settlement, it should grant the motion and enter a formal judgment pursuant to the terms of the settlement (citation). . . .” (Id. at 12.)

       Thus, at least in California, (and no doubt in other states as well), a settlement agreement can be enforced using a streamline procedure. Thus, a party’s fear – about entering into a settlement because the other party may not honor it – can be quickly allayed as long as the agreement: (1) is valid and binding; (2) either is in writing signed by all parties or is entered into orally before the court; (3) requests the court to retain jurisdiction to enforce its terms under CCP §664.6 (or similar statute) even after dismissal; and (4) provides that it may be enforced under CCP §664.6 (or similar statute).
 

      So. . .the next time you are confronted by a settlement agreement and find yourself wondering what will happen if the other side does not honor it, check to see if these four elements are in it. If they are – at least in California – you will probably have an agreement that can be enforced by a court. If they are not – then perhaps you should suggest to the drafter of the agreement that it be revised to include these terms.

       . . . Just something to think about.

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This entry was posted on Friday, November 7th, 2008 at 9:00 am and is filed under Mediation Case Law. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.