Fifth District So Decides In Unpublished Decision of Interest to All Litigators.
In a refrain used by us and other bloggers, we do stress there are some decisions that are must reading for certain practitioners. Well, the next one is—for all attorneys notifying the trial court about a conditional or unconditional settlement. It not only “schools” us on the rules, but shows how dismissals based on technicalities will not easily carry the day if challenged on appeal.
Anguiano v. Bays, Case No. F055197 (5th Dist. Oct. 27, 2009) (unpublished) concerned a dispute about the terms of a settlement, which mainly revolved around whether defendant compromised in a way that allowed the plaintiff to seek attorney’s fees and expert fees. (A dispute, of course, which interests us, given that the emphasis is on fee recovery—the “bottom line” in many, many civil disputes.)
Above: King Philip Settlement House. Fall River, Massachusetts.
Briefly summarized, plaintiff reached a settlement with defendant, his ex-employer in a wrongful termination and failure to accommodate disability case, which was memorialized in plaintiff’s letter to defense counsel indicating plaintiff would “accept $15,000 as settlement in full.” Right before trial, plaintiff filed a notice of conditional settlement indicating that a request for dismissal would be filed no later than a date following a motion for attorney’s fees. The trial court set a subsequent OSC re dismissal, but the parties in the intervening period disagreed on whether fees and costs was part of their settlement. At the OSC hearing, the court dismissed the case with prejudice, finding that the motion for attorney’s fees and costs was not timely filed. Even though plaintiff filed a subsequent attorney’s/expert fees motion seeking requested fees of almost $60,000 under FEHA’s fee-shifting statute, the lower court ordered further briefing on whether the motion was untimely. Although noting its belief that there was not a meeting of the minds for entitlement to additional attorney’s fees in the putative settlement, the lower court concluded it had no jurisdiction to set aside the dismissal and restore the case to the civil trial calendar based on the earlier dismissal. Plaintiff, clearly miffed, appealed.
Given the technical nature of the dismissal, plaintiff wisely appealed.
The Fifth District, in a 3-0 decision authored by Justice Hill, reversed and ordered the case restored to the civil active list for further proceedings. In doing so, the appellate panel analyzed the settlement notices, whether conditional or unconditional in nature.
With respect to the conditional settlement notice, the trial court had to set an OSC re dismissal hearing date no earlier than 45 days after the notice. Here, however, the trial court set a dismissal hearing about 70 days out from the notice, as if it were an unconditional settlement. The trial court apparently concluded several conditions were not met under the settlement—payment of the principal amount due or resolution of the fees issue—but found no good cause for allowing more time. This was error. “Dismissing the case and precluding the subsequent filing of a motion for attorney fees without first attempting other reasonable means of achieving compliance with the delay reduction standards favored efficiency over the pursuit of justice.” (Slip Opn., at p. 7.) Even though plaintiff’s attorney may have been dilatory, the trial court improperly penalized plaintiff even though CRC rule 2.30(b) specifies that any delay reduction rule penalty must be imposed on the attorney without adversely affecting the party’s claims. There was no indication plaintiff himself contributed to the delay,
so that the dismissal was too draconian in nature.
That brought the Court of Appeal then considered the lower court’s ruling as if it were acting under the premise that the settlement was unconditional. If this was the case, the failure to file a fee motion prior to the dismissal hearing would not bar presentation of the motion after dismissal. Why so? Answer: The only decision to be made at a CRC rule 3.1385 hearing is whether to dismiss the case or restore it to the civil active list. (Irvine v. Regents of University of California, 149 Cal.App.4th 994, 1001 (2007).) The dismissal hearing was an inappropriate vehicle for determining whether a settlement agreement was unenforceable, with a dispute about it being good cause to restore the case to the civil active list. (Id. at 1001-1002; Levitz v. The Warlocks, 148 Cal.App.4th 531, 535 (2007); Folsom v. Butte County Assn. of Governments, 32 Cal.3d 668, 671, 679 (1982).) “These cases illustrate that, when the parties have not reached a binding settlement agreement, or a dispute remains as to whether such an agreement has been reached, the trial court is not authorized by rule 3.1385 to dismiss the case or to resolve that dispute. The proper course is to restore the case to the civil active list. The parties may then, by appropriate procedures, endeavor to enforce, clarify, or avoid the agreement.” (Slip Opn., at p. 12.) BLOG OBSERVATION—The most appropriate procedure was to file a motion to enforce the settlement under Code of Civil Procedure section 664.6, which allows the trial court to weigh evidence and make credibility determinations—something it cannot do at the rule 3.1385 dismissal hearing.
The end result was that the dismissal judgment was reversed with directions to restore the case to the civil active list for further proceedings.