Olson v. Arnett
| Decision Date | 10 December 1980 |
| Citation | 113 Cal.App.3d 59,169 Cal.Rptr. 629 |
| Court | California Court of Appeals Court of Appeals |
| Parties | Charles OLSON, Plaintiff, Cross-defendant and Appellant, v. Damon ARNETT, Donald Arnett, Rick Chadock and Randall Chadock, Defendants, Cross-complainants and Respondents. Civ. 56380. |
William Jerome Pollack, Beverly Hills, and Joan Celia Lavine, Los Angeles, for plaintiff, cross-defendant and appellant.
Coyle, Marrone & Robinson, Phillip R. Marrone and Donald R. Worley, Los Angeles, for defendants, cross-complainants and respondents.
Appellant Charles Olson appeals from a judgment in favor of respondents Arnett and Chadock on respondents' cross-complaint for specific performance of a settlement agreement and damages for breach of such agreement.
Appellant sued respondents and others for personal injuries arising out of a motorcycle accident. Apparently the matter was scheduled to go to trial in October 1977. In a telephone conversation on October 6, 1977, between respondents' attorneys and appellant's attorneys, the case was settled for $15,000. Respondents' attorneys delivered a $15,000 draft to appellant's attorneys on October 7, but appellant and his attorneys returned the check, and did not return any releases or request for dismissal, claiming respondents had not complied with all the conditions of the settlement.
On October 19, 1977, respondents moved for an order bifurcating trial in order to try separately respondents' special defense labeled "Accord and Satisfaction." On December 8, 1977, the trial court permitted respondents to file a cross-complaint for specific performance to compel execution of the settlement agreement or in the alternative for damages for breach of the agreement. The cross-complaint also sought damages for substantial attorney's fees which respondents allegedly were required to incur in light of appellant's wrongful continuation of the underlying action.
After appellant's objection to the filing of the cross-complaint was overruled, appellant agreed that any further delay was not in his interest, and the bifurcated trial of the affirmative defense and the cross-complaint began that day.
The court submitted the issues to a jury by means of a special verdict involving five questions, which the jury answered as follows:
The trial court ordered judgment on the special verdict as follows:
Appellant contends (1) that the trial court abused its discretion and denied appellant due process notice by proceeding to trial the same day the cross-complaint was permitted to be filed; (2) that the evidence is insufficient to show there was a settlement; (3) that the court erred in submitting a special verdict to the jury rather than instructing the jury on contract principles; and (4) that the court erred in permitting respondents to recover their attorneys' fees as damages for breach of the settlement agreement. We agree with appellant that the attorneys' fees were not recoverable but find appellant's other contentions to be without merit.
There is no merit to appellant's contention he was denied adequate notice by the filing of the cross-complaint and the commencing of the bifurcated trial on the same day, December 8, 1977. As early as October 19, 1977, respondents had moved for a bifurcated trial of their special defense of accord and satisfaction. The declaration of Thomas Foster in support of that motion set forth in detail the circumstances of the settlement agreement. The cross-complaint based on the settlement agreement involved the same circumstances. Appellant has not shown he was prejudiced by the court's ruling commencing the bifurcated trial on the same day the cross-complaint was permitted to be filed. The underlying action had been scheduled to go to trial in October. Appellant was on notice at least since October 19 that there would be a defense based on the settlement agreement. No elaborate trial preparation was required, since the bifurcated trial on the settlement agreement involved negotiations taking place only two months before, among the attorneys themselves. In fact, appellant agreed with the court that any further delay was not in his interest. 1
Appellant's main defense to the settlement agreement was that the agreement required as a condition precedent, never fulfilled, that respondents' attorneys furnish a declaration under penalty of perjury that $15,000 was the policy limit and that no other insurance was available. The jury found that this was not a condition of the agreement, and the only question is whether there is substantial evidence to support that determination. (Gregory v. Hamilton, 77 Cal.App.3d 213, 220, 142 Cal.Rptr. 563.)
The attorneys who negotiated the settlement on behalf of respondents testified that, although there had been discussion of policy limits, appellant's attorneys never demanded prior to October 7 that respondents furnish a declaration on policy limits as a condition to the settlement. According to respondents' attorneys, this objection was raised for the first time the afternoon of October 7, after the matter had been settled by telephone on October 6 and the $15,000 draft had been delivered the morning of October 7.
Appellant's attorney, Mr. Pollack, admitted that his settlement demand letter of September 30 did not set forth any such condition. In light of the testimony of respondents' attorneys as to the circumstances of this case in particular and general custom in the personal injury business, the jury was not required to believe Pollack's testimony that such a condition was routine and was implicit in his settlement demand. Substantial evidence supports the verdict.
Appellant also contends the evidence is insufficient to show that appellant's attorney had authority to settle on October 6. However, the jury found that appellant accepted the settlement agreement negotiated by his attorney. This conclusion was supported by the evidence that appellant endorsed the $15,000 draft, even though appellant's attorney subsequently returned the draft to respondents' attorneys, and the evidence that appellant apparently signed the releases, which were not returned. (See Robinson v. Hiles, 119 Cal.App.2d 666, 672, 260 P.2d 194; see also Gagnon Co., Inc. v. Nevada Desert Inn, 45 Cal.2d 448, 460-461, 289 P.2d 466.) Although appellant testified he signed the draft with the understanding that it would be held until respondents furnished declarations about policy limits, the jury was not required to accept this testimony.
Appellant contends the trial court erred in submitting the case on the special verdict rather than instructing the jury in detail on principles of contract law. This issue was waived by appellant's failure to object to the special verdict form or to request contract instructions below. (See Downing v. Barrett Mobile Home Transport, Inc., 38 Cal.App.3d 519, 423, 113 Cal.Rptr. 277; Napa Val. Pkg. Co. v. S. F. etc. Funds, 16 Cal.App. 461, 469, 118 P. 469.)
Appellant fails to demonstrate that the special verdict questions submitted to the jury were inadequate to deal with the material issues raised in the trial of the special defense. The trial court did not abuse its discretion to utilize a special verdict. (Perry v. Schwartz, 219 Cal.App.2d 825, 827-828, 33 Cal.Rptr. 511; Code Civ.Proc., §§ 624, 625.)
Respondent initially raised the settlement issue as a special defense barring appellant's action. (Gregory v. Hamilton, supra, 77 Cal.App.3d 213, 217-220, 142 Cal.Rptr. 563; Silver v. Shemansky, 89 Cal.App.2d 520, 530, 201 P.2d 418.) However, in their cross-complaint they sought not only to specifically enforce the settlement agreement by way of securing releases or dismissals, but also affirmatively to recover their attorney's fees expended in the continuation of the underlying action and in enforcing the settlement agreement. These expenses, claimed to be over $10,000, were found by the jury to be $5,000 and were included in the judgment as damages. We hold the trial court erred in awarding respondents attorney's fees as damages. 2
Respondents contend that when appellant repudiated the settlement, respondents were...
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