Gopal v. Yoshikawa

• Decision Date: 21 September 1983
• Citation: 195 Cal.Rptr. 36,147 Cal.App.3d 128
• Parties: Peter K. GOPAL, Plaintiff, Cross-Defendant and Respondent, v. Sam M. YOSHIKAWA, Defendant, Cross-Complainant and Appellant. Sam M. YOSHIKAWA, Plaintiff and Appellant, v. Peter K. GOPAL, Defendant and Respondent. A011948. Civ. 51380.
• Court: California Court of Appeals Court of Appeals

Page 36

195 Cal.Rptr. 36

147 Cal.App.3d 128

Peter K. GOPAL, Plaintiff, Cross-Defendant and Respondent, v. Sam M. YOSHIKAWA, Defendant, Cross-Complainant and Appellant.

Sam M. YOSHIKAWA, Plaintiff and Appellant, v. Peter K. GOPAL, Defendant and Respondent.

A011948.

Civ. 51380.

Court of Appeal, First District, Division 5, California.

Sept. 21, 1983.

John W. Clark, Trepel & Clark, San Jose, for plaintiff, cross-defendant and respondent Gopal.

Barry M. Klein, Stephen Gazzera, Jr., Sharon L. Wesselius, Gazzera & Antonioli, Mountain View, for defendant, cross-complainant and appellant Yoshikawa.

HANING, Associate Justice.

Appellant Yoshikawa and respondent Gopal sued each other in separate actions which were consolidated below. Neither the record nor the briefs contain nor discuss the initial pleadings or causes of action, but the cases were settled at a mandatory, judicially supervised settlement conference. The same judge who supervised the settlement conference thereafter granted respondent's motion to compel enforcement of the settlement and entered judgment thereon.

We conclude that the trial court properly enforced the agreement of the parties and affirm.

The parties and their attorneys appeared before the trial court at a mandatory settlement conference and advised the court they had agreed upon a disposition. They agreed that respondent would have a stipulated judgment against appellant which would be held for four months, after which it would be filed and executed upon if not paid. The judgment was for the principal sum of $185,000, less credit for property to be transferred to respondent. The property was valued at $3.25 per foot, less the normal costs of sale excluding any real estate commissions. St. Paul Title Insurance Company was to determine the credit for costs of sale. It was further agreed that a designated accountant would perform an accounting of certain partnership properties and appellant's credit against the judgment would be reduced by any amount he owed the partnership. Both parties personally advised the court that they agreed with the settlement.

The accountant concluded that appellant was not indebted to the partnership. The title company included in its calculation of closing costs an unpaid assessment bond against the property, and unpaid taxes due.

Appellant did not pay and respondent's motion to enter judgment was granted. In addition to challenging the trial court's authority to enter judgment for respondent, appellant contends the trial court erred by considering the unpaid assessment bond, that the taxes should have been prorated to the date of the settlement conference rather than a later date, and that the accounting was inaccurate.

Public policy has long supported pretrial settlements. "Not only will such agreements, when there is no fraud, be sustained by the courts, but they are highly favored as productive of peace and goodwill in the community, and reducing the expense and persistency of litigation." (McClure v. McClure (1893) 100 Cal. 339, 343, 34 P. 822.) In Hamilton v. Oakland School Dist. (1933) 219 Cal. 322, 26 P.2d 296, the Supreme Court reversed a judgment denying enforcement of a compromise, holding, "It must be remembered that it is the policy of the law to discourage litigation and to favor compromises of doubtful rights and controversies, made either in or out of court." (Id., at p. 329, 26 P.2d 296.)

This policy also manifests itself in our rules. ¹ Rule 207.5 provides for the establishment of settlement calendars for the superior courts. Section 9(d) of the Standards of Judicial Administration recommended by the Judicial Council states that each court should require settlement conferences in all cases and require the attendance of the parties as well as the attorneys. Both rule 217 and section 9(e) of the Standards provide sanctions and fines for failure to appear at, prepare for or participate in good faith in the settlement conference. To further encourage settlement negotiations and insure that the issues can be thoroughly and freely discussed, we also have the rule disallowing offers of compromise to prove liability. (Evid.Code, § 1152, subd. (a); Moving Picture etc. Union v. Glasgow Theaters, Inc. (1970) 6 Cal.App.3d 395, 401, 86 Cal.Rptr. 33.) In light of the clearly expressed policy promoting and supporting pretrial settlements, the establishment of formal settlement procedures is futile if the courts lack authority to expeditiously enforce settlement agreements created by those procedures.

An agreement reached at a judicially supervised settlement conference to compromise and settle a lawsuit is enforceable. However, case authorities are conflicting regarding the motion procedure utilized to enforce the settlement below. Gregory v. Hamilton (1978) 77 Cal.App.3d 213, 142 Cal.Rptr. 563 held that such an agreement is enforceable by motion. Thereafter, in Greyhound Lines, Inc. v. Superior Court (1979) 98 Cal.App.3d 604, 159 Cal.Rptr. 657, this court refused to enforce an alleged settlement which contained terms to which, it was found, the parties did not originally agree. But Greyhound recognized the Gregory procedure and stated, "It is common knowledge in the legal profession that judicially supervised settlement conferences are critical to the efficient administration of justice in California. When the material terms of the settlement are agreed upon at the conference, the agreement must be enforced by the court.... Oral agreements to compromise and settle lawsuits reached at judicially supervised settlement conferences are enforceable in a number of ways (citing Gregory ), including by way of motion as attempted in the instant case. Such an agreement amounts to a stipulation and is enforceable as such. (Citations omitted.)" (Id., at pp. 608-609, 159 Cal.Rptr. 657.) Subsequently, Ford v. State of California (1981) 116 Cal.App.3d 507, 172 Cal.Rptr. 162, in a 2-1 decision, reluctantly followed Gregory.

Nabi v. Laudermill (1982) 130 Cal.App.3d 282, 182 Cal.Rptr. 368, Mancina v. Hoar (1982) 129 Cal.App.3d 796, 181 Cal.Rptr. 347, Hastings v. Matlock (1980) 107 Cal.App.3d 876, 166 Cal.Rptr. 229, and, most recently, DeGroat v. Ingles (1983) 143 Cal.App.3d 399, 191 Cal.Rptr. 761, have criticized the Gregory decision for upholding a nonstatutory "speaking" motion, and have cast doubt on the ability of trial courts to enforce judicially supervised settlements. Those decisions have suggested or ruled that the proper procedure is by way of (1) motion for summary judgment; (2) a...