Davidson v. Superior Court

• Decision Date: 02 March 1999
• Docket Number: No. F031178,F031178
• Citation: 70 Cal.App.4th 514,82 Cal.Rptr.2d 739
• Court: California Court of Appeals Court of Appeals
• Parties: , 99 Cal. Daily Op. Serv. 1605, 1999 Daily Journal D.A.R. 2047 Elbert Ernest DAVIDSON et al., Petitioners, v. Fresno County SUPERIOR COURT, Respondent, City of Mendota, Real Party in Interest.

Page 739

82 Cal.Rptr.2d 739

70 Cal.App.4th 514, 99 Cal. Daily Op. Serv. 1605,

1999 Daily Journal D.A.R. 2047

Elbert Ernest DAVIDSON et al., Petitioners, v. Fresno County SUPERIOR COURT, Respondent, City of Mendota, Real Party in Interest.

No. F031178.

Court of Appeal, Fifth District, California.

March 2, 1999.

Rehearing Denied March 23, 1999.

Review Denied May 19, 1999.

[70 Cal.App.4th 516] Thomas, Snell, Jamison, Russell and Asperger, Marcus D. Magness, Fresno, for Petitioners.

No appearance for Respondent.

David J. Weiland, Fresno, for Real Party in Interest.

OPINION

WISEMAN, J.

Murphy's Law states that if anything can go wrong, it will. Petitioners Elbert Davidson and Edward Warkentine have had more than a taste of Murphy's Law in this case which sports a complex and jumbled procedural history spanning over 10 years. Briefly stated, the petitioners run a junkyard establishment on their property. The City of Mendota filed a lawsuit to make them clean it up. A purported settlement was reached which was signed by petitioners' then attorney and the City of Mendota's attorney, but not by the petitioners. It was presented ex parte to a judge who signed a judgment confirming the settlement.

Later, when there were compliance problems followed by contempt allegations, petitioners claimed, among other things, that their attorney (who coincidentally by this time was now the City Attorney for the City of Mendota) never had authority to bind them to the settlement agreement. They also complained their attorney had fraudulently concealed a conflict of interest which they had not waived.

Matters looked like they might come to a head on April 7, 1992, which was the date set for the contempt action and a motion to rescind the judgment. Unfortunately, the trial court was short of time and the contempt action and motion to rescind ended up being separated for hearing without any resolution of the authority issue. To make a long story short, the trial court later denied the petitioners' rescission motion, this ruling went up on appeal, and that is when petitioners' legal troubles really began.

On appeal, we affirmed the trial court's decision to deny the rescission motion, in effect finding no fraud, and the case went back to the trial court. In doing so, we noted that an authorized signature of an attorney can bind that attorney's client to a written settlement agreement.

Another contempt proceeding went forward but a finding of contempt was ultimately vacated because notice was not given to the petitioners' attorney. In an effort to get someone to decide the authority issue, the petitioners filed a "Motion for Order to Set Matter for Jury Trial." This motion was denied because of "the staleness of the claim" and because petitioners were barred from raising the claim that Levy v. Superior Court (1995) 10 Cal.4th 578, 41 Cal.Rptr.2d 878, 896 P.2d 171, applied. Once again, petitioners filed an appeal to this court which was dismissed as "an attempt to appeal a nonappealable order." There was still no resolution of the authority issue.

Time marched on. The City of Mendota again initiated contempt proceedings. This time petitioners were found in contempt and sentenced to five days in jail. The trial court cannot be faulted for this decision in light of our two prior opinions which had soundly rejected all of petitioners' affirmative defenses, and dutifully applied the law of the case doctrine. Petitioners filed a petition for writ of habeas corpus, and requested a stay. We directed an order to show cause issue, and stayed the contempt order.

Recently, our Supreme Court in Levy v. Superior Court, supra, 10 Cal.4th 578, 41 Cal.Rptr.2d 878, 896 P.2d 171, examined Code of Civil Procedure section 664.6 (section 664.6), and held that under its summary procedures, a written settlement agreement is not enforceable unless it is signed personally by the litigant. (Id. at p. 580, 41 Cal.Rptr.2d 878, 896 P.2d 171.) Thus, consistent with Levy, we hold the judgment obtained by the City of Mendota behind the purported settlement agreement is void for purposes of enforcement in contempt proceedings premised on its violation. The purported settlement agreement in this case was never signed by the petitioners--only by their attorney. As a result, there was no summary mechanism available to the City of Mendota to enable them to obtain an enforceable judgment in the absence of compliance with section 664.6. Our conclusion is not changed by the fact there was no motion made to enforce settlement pursuant to section 664.6. We recognize there are other more cumbersome methods to enforce the settlement--motions for summary judgment, separate suits in equity and amendments to the pleadings--but none of these procedural mechanisms were used either.

Not only is the judgment void, but it is also questionable whether there is even a valid settlement agreement. Regrettably, to this day, petitioners have never been able to obtain a factual resolution of the claim that their then attorney lacked authority to bind them to the settlement agreement. The petitioners' efforts to have an evidentiary hearing on this subject have been thwarted at every turn.

Whatever the outcome of such a hearing might have been is not before us. The bottom line: the contempt order issued against the petitioners is invalid since it is not premised on a valid judgment. The judgment of contempt is annulled, and a permanent writ of mandate shall issue to vacate the void order.

PROCEDURAL HISTORY

In 1982 the City of Mendota (the City) filed a civil action against petitioners Elbert Davidson and Edward Warkentine. The action sought to obtain an injunction prohibiting Davidson and Warkentine from operating "a junkyard or vehicle dismantling establishment" on four parcels of property that had been zoned to permit single family dwellings. The action purportedly settled in 1987 with a "Stipulation for Settlement and Entry of Order." This document was signed by the attorney for the City (Stephen E. Carroll) and by the then attorney for petitioners (J. Stephen Lempel), but not by the parties themselves. It was presented ex parte by the City for a judge's signature and became a judgment or order (the 1987 stipulated order). Under the terms of the 1987 stipulated order, petitioners agreed to stop their junkyard activities. According to the City, petitioners did not comply with the 1987 stipulated order.

In the meantime, in October of 1988, Lempel became the City Attorney for the City of Mendota. The City initiated contempt proceedings against petitioners in late 1991. Petitioners countered by moving in 1992 to vacate the 1987 stipulated order. Initially, they argued the stipulation should be rescinded because at the time of its entry, their attorney had a conflict of interest which had not been waived by either petitioner. Additionally, they alleged this lack of disclosure constituted a form of extrinsic fraud. Petitioners supplemented these contentions with an argument that since the stipulation was not signed by the parties nor approved in open court, it was not binding. As a separate ground, petitioners sought a hearing on whether Lempel had authority to enter into the stipulation on their behalf.

Both the contempt action and the rescission motion were set for hearing on April 7, 1992. At the hearing the City argued that this was simply a case of "buyer's remorse," i.e., petitioners had, in fact, agreed to the stipulation but later changed their minds. Petitioners' counsel, E. Robert Wright, countered, however, that the question of Lempel's authority had yet to be tried:

"First, Your Honor, what's been overlooked is Mr. Davidson, in his deposition, testified [un]equivocally that Mr. Lempel never asked him for authority to sign a stipulation on his behalf, and that Mr. Davidson did not agree to it, and that it was his understanding that before there could be any settlement, he would have to sign something.... It's absolutely unequivocal. We attached a declaration of Mr. Warkentine in which he testified to the same effect. So we have testimony from the defendants before the Court that they simply did not agree to it; ...."

The issue of authority was deferred, however, because the court did not have time to take testimony at the April 7, 1992 hearing; there was a pending motion to compel; and to avoid unnecessarily having to deal with the attorney/client privilege problems, which were very delicate because Lempel was now employed by the City and a trial on the underlying lawsuit was a future possibility.

The City agreed that the matter regarding authority should be continued to the order to show cause re contempt proceeding (OSC hearing) when the motion to compel could also be heard:

"[I]t really is the handicap I am working under with regard to Mr. Lempel's testimony, I have only been able, through one reference in his deposition transcript, to show that he was--that he believed he was authorized, he believed, to enter into the stipulation. Throughout, I have been blocked by the attorney/client privilege. I brought a motion to compel. The judge that heard that assumed this testimony would come out at the OSC re contempt.

"I have nothing to cite to you with regard to Mr. Lempel's version of how this settlement came about, because every discussion between him and his clients was blocked by Mr. Wright.

"Under the circumstances, if this Court plans on addressing the issue of authority, at the very least, I believe it should be deferred until the OSC re contempt is heard so that that testimony can be brought out. And I will represent to the Court that I will call Mr. Lempel first. And if his testimony does not satisfy the Court, at that point, we won't have added any more time than having Mr. Lempel take the stand and be examined, assuming I can get into that point."

Counsel for petitioners noted that the motion to compel had been put "over for the judge hearing...