At&T Mobility LLC v. Gen. Charles E. "chuck" Yeager
| Decision Date | 20 November 2014 |
| Docket Number | No. 2:13-cv-0007-KJM-DAD,2:13-cv-0007-KJM-DAD |
| Court | U.S. District Court — Eastern District of California |
| Parties | AT&T MOBILITY LLC, Plaintiff, v. GENERAL CHARLES E. "CHUCK" YEAGER (RET.); ED BOWLIN; CONNIE BOWLIN; AVIATION AUTOGRAPHS; BOWLIN & ASSOCIATES, INC.; LAW OFFICES OF JOANNA R. MENDOZA, P.C.; DE LA PENA & HOLIDAY, LLP; LESSER LAW GROUP, Defendants. |
General Charles "Chuck" Yeager hired John Zarian and Parsons Behle & Latimer, PLC, to represent him at trial. After the trial, Parsons Behle withdrew, intervened, and claimed Yeager had not paid his bills. A new trial very nearly began on the fee dispute, but four days before the trial date Yeager and Parsons Behle notified the court they had settled. Notice of Settlement, ECF No. 126. The trial was vacated. Minute Order, ECF No. 127. Yeager now refuses to sign the settlement agreement, declaring he did not agree to its terms. Yeager Decl. 2, ECF No. 130. The matter is before the court on Parsons Behle's motion to enforce the settlement agreement it claims the parties reached. Mot. to Enforce Settlement Agreement (Mot.), ECF No.128; Mem. P. & A. in Supp. of Mot. (Mem.), ECF No. 128-1. The court held a non-evidentiary hearing on November 7, 2014. Parker White Appeared for Yeager,1 and John Zarian appeared for Parsons Behle. Because an evidentiary hearing is necessary, the court defers ruling on this motion.
The court denied Parsons Behle's motion for summary judgment on August 19, 2014. Order 12, ECF No. 116. Parsons Behle began preparing for trial. Zarian Decl. ¶¶ 4-5, ECF No. 128-2. Trial was set for September 8, 2014. Minutes, ECF No. 117. On September 4, Parsons Behle and Yeager's counsel began negotiating a settlement agreement. Zarian Decl. ¶ 6. Counsel exchanged draft settlement agreements that day and the next. Zarian Decl. ¶¶ 6-9. Yeager's counsel sent Parsons Behle a final agreement, signed by Mr. White, Yeager's counsel. Id. ¶ 9, Ex. C. Mr. White confirmed the agreement "reflect[ed] the agreement of the parties, as in those expected to sign": General Yeager and his wife Victoria Yeager. Id. Ex. D, at 1 (emphasis in original). Parsons Behle then agreed to a joint notice of settlement, which "estimated that Defendant-in-Intervention will fully perform its duties on or around October 3rd, 2014." Notice 2, ECF No. 126. The court vacated the trial because "[p]ursuant to the representations of the parties," the case had settled. Minute Order, ECF No. 127. Parsons Behle was unable to obtain Yeager's signature over the next few weeks, until Mr. White informed Parsons Behle he had "run into serious problems with [his] clients" and did not have a signed settlement agreement. Zarian Decl. ¶ 14.
Parsons Behle filed this motion soon thereafter, arguing (1) this court has jurisdiction to enforce the settlement agreement, (2) the agreement should be enforced, (3) Parsons Behle is entitled to $65,000 from the interpleaded funds, and (4) the court should impose sanctions. Yeager opposed, stating only, "Defendant-In-Intervention submits this Opposition to Motion to Enforce Settlement," Def.'s Opp'n 1, ECF No. 130, and attaching his declaration, id. at 3-4. Yeager declared he "did not agree to the terms of the written settlementagreement," and "did not agree to give up my rights to sue John Zarian and/or Parsons Behle & Latimer et al for legal malpractice." Id. at 4. Parsons Behle replied, contending (1) Yeager was judicially estopped from claiming he did not agree to the terms of the settlement agreement, (2) Yeager was bound by his counsel's words, and (3) Yeager waived any claim for legal malpractice by not filing a compulsory counterclaim.
No dispositional documents have been filed in this case. The dispute between Parsons Behle and Yeager remains pending before the court. In general, a federal district court has inherent authority to summarily enforce an agreement settling an action pending before it. Dacanay v. Mendoza, 573 F.2d 1075, 1078 (9th Cir. 1978). Nothing here suggests this general rule does not apply.
Because Parsons Behle filed this motion to enforce the agreement, it bears the burden to prove the agreement exists. Andreyev v. First Nat'l Bank of Omaha, 313 B.R. 302, 305 (B.A.P. 9th Cir. 2004). State contract law governs disputes about the existence and enforceability of an agreement to settle a case. Jeff D. v. Andrus, 899 F.2d 753, 759 (9th Cir. 1990). Because the parties here did not recite the terms of the agreement at issue in open court, Doi v. Halekulani Corp., 276 F.3d 1131 (2002), is distinguishable. See In re Clawson, 434 B.R. 556, 570 (N.D. Cal. 2010) (). And finally, although Parsons Behle contends California Code of Civil Procedure 664.6 governs the dispute, the California Supreme Court requires an agreement be signed by the parties, not their attorneys, for that rule to apply. Levy v. Superior Court, 10 Cal. 4th 578, 586 (1995). Yeager, the party against whom Parsons Behle seeks enforcement, has not signed the agreement here; only Mr. White, his counsel, has signed.
This discussion leaves two questions unresolved: first, whether the settlement agreement exists as an oral agreement, and second, whether Yeager's counsel had authority to bind him at all.
In California, an oral agreement may give rise to a binding contract. Kreling v. Walsh, 77 Cal. App. 2d 821, 834-35 (1947); Khajavi v. Feather River Anesthesia Medical Group, 84 Cal. App. 4th 32, 61-62 (2000). If two parties reach an oral agreement, that agreement may in some cases be enforced even if the parties expected a written agreement would follow. Khajavi, 84 Cal. App. 4th at 61-62. A negotiated oral agreement becomes binding, even when the parties expected to sign a written agreement, only if the oral agreement's terms are "definitely understood." Id. at 61 (quoting Louis Lesser Enterprises, Ltd. v. Roeder, 209 Cal. App. 2d 401, 404-05 (1962)); see also Banner Entertainment, Inc. v. Superior Court, 62 Cal. App. 4th 348, 358 (1998) (). On the other hand, no binding oral agreement exists if "the parties understood that the proposed agreement [was] not complete until reduced to formal writing and signed . . . ." Khajavi, 84 Cal. App. 4th at 61-62.
In Sangerman v. Theriault Enterprises Inc., the Northern District court enforced an oral contract to settle under California law. No. C-05-04183, 2007 WL 707502, at *1-2 (N.D. Cal. Mar. 6, 2007). The parties' counsel had negotiated and exchanged draft settlement agreements. Id. All the drafts consistently indicated the defendants would pay $65,000 to settle the case. Id. The drafts differed as to what time payment would be made. Id. The plaintiffs signed the agreement, but the defendants did not, although counsel for the defendants said his clients would execute a draft agreement. Id. at *2. When the defendants were unable to obtain a loan to pay for the settlement, they declined to sign the agreement. Id. The defendants filed a notice of non-opposition to the plaintiff's motion to enforce the version of the agreement the plaintiffs had signed. Id. The court required the defendants pay $65,000 to settle the action and enforced the timing contemplated in the agreement the plaintiffs signed. Id. at *3.
The facts here are similar to those in Sangerman. Parsons Behle has provided evidence of a consistent agreement between itself and Yeager's counsel to settle the case. On several occasions, Mr. White confirmed his client had agreed to settle the case for $65,000 through disbursement of funds deposited with the court in the interpleader action. Mem. at 2:73:2, 5:3-9. Parsons Behle sought and received express confirmation from Mr. White that "the parties, as in those expected to sign" agreed to the terms of the settlement. Zarian Decl. Ex. D, at 2, ECF No. 128-6 (emphasis in original). The court and Parsons Behle relied on Yeager's representations, through his counsel, that the case had settled when it vacated the trial. Notice of Settlement, ECF No. 126; Minute Order, ECF No. 127. The agreement is consistent in material terms, the parties expressed clear intent as to its finality, and Mr. White, counsel for the party against whom enforcement is sought, signed it. Zarian Decl. Ex. J, ECF No. 128-12. Yeager contests none of these facts in his austere opposition. If indeed Mr. White had authority, Yeager is bound.
Yeager declares, "I did not agree to the terms of the written settlement agreement," and "I did not give up my rights to sue John Zarian and/or Parsons Behle & Latimer et al for legal malpractice," and refuses to sign "the proposed written settlement agreement." Yeager Decl. 2, ECF No. 130. The court first addresses Yeager's contention he did not "give up" his right to assert a legal malpractice claim, then whether his counsel had authority to enter the agreement in his behalf.
Federal Rule of Civil Procedure 13(a) requires a party to state a counterclaim in a responsive pleading if the claim "(A) arises out of the transaction or occurrence that is the subject matter of the opposing party's claim; and (B) does not require adding another party over whom the court cannot acquire jurisdiction." This rule is meant to prevent multiple lawsuits and promptly resolve related disputes. Mitchell v. CB Richard Ellis Long Term Disability Plan, 611 F.3d 1192, 1201 (9th Cir. 2010). A party who does not bring a compulsory counterclaim may not...
To continue reading
Request your trial