Hastings v. Matlock

Citation217 Cal.Rptr. 856,171 Cal.App.3d 826
CourtCalifornia Court of Appeals
Decision Date28 August 1985
PartiesDoyle E. HASTINGS, et al., Plaintiffs/Cross-defendants/Respondents, v. Donald Lewis MATLOCK, et al., Defendants/Cross-complainants/Appellants. A017480.

Harold Clinton Brown, Michael J. Brady, Mark G. Bonino, Ropers, Majeski, Kohn, Bentley, Wagner & Kane, Redwood City, for defendants/cross-complainants/appellants.

Gary L. Olimpia, Susan C. Chesebro, Kelly, Leal & Olimpia, Sunnyvale, for plaintiffs/cross-defendants/respondents.

BRAUER, Associate Justice.

Betty and Donald Matlock appeal from a judgment awarding respondents Carolyn and Doyle Hastings specific performance of an oral out-of-court settlement agreement. The Matlocks make six claims of error, which in essence run thus:

(1) The trial court erred in denying the Matlocks a jury trial on the issues of (a) whether the alleged settlement agreement existed at all, and (b) the precise terms thereof;

(2) The alleged agreement was unenforceable because it fell within the purview of the statute of frauds;

(3) The alleged agreement was unenforceable because it was fatally uncertain as to the terms of time and manner of payment;

(4) No competent evidence was adduced to show that the Hastings were willing and able to perform their part of the alleged agreement;

(5) Enforcement of the agreement will cause extreme hardship to the Matlocks; and

(6) The trial court erred in awarding the Hastings their attorney's fees.

We find these contentions to be without merit, and therefore affirm the judgment.

A. Events Before Trial

On September 24, 1976 the parties entered into a written agreement whereby the Matlocks agreed to buy, and the Hastings agreed to sell, (a) a two-and-one-half acre parcel of land, and (b) a four bedroom house to be constructed on the parcel by Mr. Hastings, a licensed contractor. The total purchase price was to be $206,800. The contract provided in part: "If any party to this agreement, including broker, shall institute any legal action against any other party to this agreement, the prevailing party shall be entitled to court costs and reasonable attorney's fees in addition to any other judgment of the court."

An escrow was opened, and a deed to the parcel was placed therein. While the house was under construction, the Matlocks paid the Hastings $50,000. The Matlocks also paid, outside the terms of the contract, the sum of $92,842.86 for improvements to the parcel, including landscaping and the installation of a swimming pool. On May 31, 1977, when the house was substantially complete, the Matlocks took possession pursuant to a written rental agreement, by the terms of which they agreed to pay rent to the Hastings at the rate of $38.50 per day, 1 from June 1 to July 5, 1977. That agreement contained the following provision: "In the event services of attorneys are required by Seller to enforce the terms hereof or recover possession of the premises, Purchasers agree to pay the reasonable cost thereof."

Once in possession, the Matlocks claimed to have discovered structural and cosmetic defects in the house, as well as violations of the Uniform Building Code. They refused to pay the rent, but they remained in possession of the house. The escrow never closed. In September of 1977 the Hastings commenced action no. 385045, seeking damages for breach of the purchase-sale contract, and restitution based on rescission of that contract. The Matlocks filed a cross-complaint seeking to recover the costs of correcting the defects in the house, and the value of the improvements they had made. In April of 1978 the Hastings filed action no. 397816, a complaint for unlawful detainer.

On May 26, 1978, while the Hastings were present, the Matlocks were deposed in the offices of Phillip Steinbock, counsel for the Hastings. During a recess in Mr. Matlock's deposition, settlement negotiations were initiated. The Hastings and the Matlocks were seated in different offices, and their respective counsel (Phillip Steinbock for the Hastings, Francis Crawford for the Matlocks) travelled between the two offices bearing proposals and counter-proposals. The evidence was in conflict as to (1) whether a full settlement was reached at all, and (2) the precise terms of the settlement, if any. Viewing the evidence in the light most favorable to the prevailing party (Jessup Farms v. Baldwin (1983) 33 Cal.3d 639, 660, 190 Cal.Rptr. 355, 660 P.2d 813; accord, Estate of Leslie (1984) 37 Cal.3d 186, 201, 207 Cal.Rptr. 561, 689 P.2d 133), it appears that the following events occurred:

The Matlocks, through their attorney Crawford, proposed that if the Hastings paid them $142,842.86 (representing the cost of the improvements made, $92,842.86, plus the $50,000 previously received by the Hastings from the Matlocks), they (the Matlocks) would vacate the premises. The Hastings, through their attorney Steinbock, accepted that proposal. Then Mrs. Matlock said that she would need time to move; in her words, "I have three children, I can't just pick up and move in a week from a 4600 square foot home." A discussion ensued, with all parties and their respective counsel present. It was agreed that (1) the Matlocks would have 45 days to relocate, during which period they could live in the house rent free; (2) that if the Matlocks needed an additional 45 days to relocate, they would pay reasonable rent to the Hastings during that period; and (3) in any event, the Matlocks would vacate the premises no later than 90 days from May 26, 1978 (the date of the deposition). It further was agreed that the Hastings would have 45 days to pay the $142,842.86 to the Matlocks. At that point Mr. Crawford (counsel for the Matlocks) was prepared to leave the building. Then Mr. Steinbock (counsel for the Hastings) suggested that the settlement terms be memorialized in writing; and he asked his partner, Mr. David Hoffman, to draft an agreement containing the terms that had been discussed.

While the draft was being dictated and typed, Mrs. Matlock left the offices and went to sit in her car. 2 The dictation and typing took close to two hours. During that period an atmosphere of cordiality prevailed, and drinks were served. When the draft was completed, copies were given to the Hastings, to Mr. Matlock, and to Mr. Crawford. Mr. Matlock, in reading his copy, remarked that he could not guarantee the performance of two ice-makers in the house. An addendum to the draft, concerning the ice-makers, was prepared. Meanwhile Mr. Matlock went outside and brought his wife back into the offices.

On reading a copy of the draft, Mrs. Matlock said, "What is this? This is totally unacceptable. How can I trust this man to give me a check in forty-five or ninety days? ... What happens if I go out and make a contract on another home, purchase another home, and then he doesn't come up with the money?" The Matlocks and Mr. Crawford retired to another office to discuss the matter. Mr. Crawford returned, and said that while Mr. Matlock was willing to sign the agreement as drafted, Mrs. Matlock was not. Mr. Crawford was very apologetic, and suggested reverting to the terms of an earlier settlement proposal. Mr. Steinbock responded that the case already had been settled. The Matlocks and Mr. Crawford then left the offices.

B. The Motion And The Appeal

On July 3, 1978, while the aforementioned actions were pending, the Hastings moved for enforcement of the oral settlement agreement. Subsequently an evidentiary hearing was held and the motion was granted. Thereafter the Matlocks' request for written findings and conclusions was denied. The Matlocks appealed from the judgment entered on the order granting the motion. The Court of Appeal reversed the judgment and remanded the cases, holding that the trial court had erred in enforcing an oral out-of-court settlement by means of a nonstatutory "speaking motion." (Hastings v. Matlock (1980) 107 Cal.App.3d 876, 880-883, 166 Cal.Rptr. 229.) In its opinion the Court of Appeal noted, among other things, that the issue of the alleged settlement had not been properly pleaded. (Id., at pp. 881-883, 166 Cal.Rptr. 229.)

C. The Trial And The Judgment

After the remittitur had issued from the Court of Appeal, the pleadings were amended 3 and the parties stipulated to a bifurcated trial to determine the issue of the alleged oral settlement agreement. The parties further stipulated that the matter could be heard before David S. Lull, Temporary Judge. The case came on for trial on October 8, 1981.

At the outset the court ruled that the Matlocks were not entitled to a jury trial, and tentatively ruled that the alleged settlement agreement did not fall within the purview of the statute of frauds. The matter then proceeded as a court trial, at which the Hastings, the Matlocks, Mr. Steinbock, Mr. Crawford, and Mr. Hoffman all testified. Once the trial had been concluded, the court prepared a Memorandum of Intended Decision and thereafter entered a judgment. We quote from a portion of the judgment:

"IT IS HEREBY ORDERED that plaintiffs, DOYLE E. HASTINGS and CAROLYN D. HASTINGS, are awarded judgment of specific performance against the defendants, DONALD LEWIS MATLOCK and BETTY RAE MATLOCK, as follows:

"1. The court finds that the parties did indeed arrive at a settlement of the controversy which was sufficiently definite in its terms and provisions to justify equitable enforcement.

"2. The agreement was essentially simple and reasonable in the light of the circumstances then existing. The parties arrived at a fair and expeditious solution of rescission.

"3. The court finds that the essentials of the oral agreement were as follows:

"a. That the Hastings pay the Matlocks the sum of $142,842.86.

"b. That the Matlocks vacate the premises.

"c. That the written agreement pertaining to the purchase of the home be rescinded.

"d. That the Matlocks have...

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