Williams v. Saunders
| Decision Date | 20 June 1997 |
| Docket Number | No. C024268,C024268 |
| Citation | 55 Cal.App.4th 1158,64 Cal.Rptr.2d 571 |
| Parties | , 56 Cal.App.4th 772C, 12 IER Cases 1710, 12 IER Cases 1888, 97 Cal. Daily Op. Serv. 4742, 97 Daily Journal D.A.R. 7823 Jayne WILLIAMS, Plaintiff and Respondent, v. Misae SAUNDERS, Defendant and Appellant. |
| Court | California Court of Appeals Court of Appeals |
Diepenbrock, Wulff, Plant & Hannegan, Charity Kenyon, Jason M. Heath, Sacramento, for Plaintiff and Respondent.
In August 1994, plaintiff Jayne Williams was discharged as president and chief executive officer of HBS Technical Services, Inc. HBS). She sued HBS, Luis E. Lomeli, William Depew, Elmo Saunders, and Misae Saunders for breach of employment contract and related claims. HBS cross-complained against Williams and California State Integrators, Inc. (CSI), a company in which Williams served as an officer, director, and majority shareholder, for breach of fiduciary duty and related claims.
Misae Saunders appeals from the judgment enforcing settlement of the employment dispute. 1 Citing Levy v. Superior Court (1995) 10 Cal.4th 578, 41 Cal.Rptr.2d 878, 896 P.2d 171, she argues judgment should be reversed because she was not present at the settlement negotiations, did not personally sign the terms of settlement on November 17, 1995, and did not authorize anyone to act on her behalf. Misae Saunders also asserts the November 17, 1995, writing did not represent the final agreement between the parties because it contemplated
execution of another document. We reverse the judgment.
The parties agreed to mediate their dispute on November 17, 1995, and selected Lloyd Phillips, Jr., a retired superior court judge, as mediator. All parties to the lawsuit attended the mediation except Misae Saunders, who was out of the country. Each party was represented by counsel, including Melinda Guzman Moore for Williams in her capacity as cross-defendant and Randolph Cooke for the individual defendants, including Elmo and Misae Saunders.
The parties settled the case and Moore made handwritten notes of the settlement terms, including the agreement to provide "Full and Final Mutual Releases signed by parties of all claims directly and indirectly related." 2 The handwritten document was signed by those present, including Cooke and Elmo Saunders. There is conflicting evidence whether anyone was authorized to act on Misae Saunders's behalf.
On November 21, 1995, Moore drafted and circulated for signature a "Mutual Full and Final Release of All Claims." The document provided for release of all claims, known and unknown, and included an express waiver of Civil Code section 1542. 3 There is conflicting evidence whether the parties agreed to waive that statute during the November 17, 1995, mediation.
Williams fulfilled her settlement obligations by signing the release on November 29, 1995, and dismissing her complaint with prejudice. Williams also returned the HBS stock to the corporation.
HBS dismissed its cross-complaint with prejudice, but HBS and the individual defendants refused to sign the formal release prepared by Moore. Meanwhile, HBS president Lomeli informed shareholders at the February 8, 1996, shareholders' meeting that the corporation had performed its side of the settlement agreement and the case with Williams was over. At the same meeting, HBS assigned all its "known and unknown" rights, except for specified accounts receivable, to Misae Saunders "for her personal usage." Shareholders then dissolved the corporation.
Neither HBS nor the individual defendants had signed the formal release when Williams successfully moved for entry of judgment pursuant to Code of Civil Procedure section 664.6 in May 1996. 4 The trial court did not Elmo Saunders filed a notice of appeal on behalf of Misae Saunders and signed it as "Elmo Saunders, Counsel for Defendant and Appellant." He filed an amended notice of appeal the same day, signing it as "Counsel in Pro Per for Defendant." This court denied Williams's motion to dismiss the appeal for lack of jurisdiction under California Rules of Court, rule 1(a). 5
specifically address the legal effect of Misae Saunders's failure to personally sign the handwritten settlement agreement, although Elmo Saunders, Depew, [55 Cal.App.4th 1162] and Lomeli raised the issue in response to Williams's motion. Levy v. Superior Court, supra, 10 Cal.4th 578, 41 Cal.Rptr.2d 878, 896 P.2d 171, was decided almost a year before the hearing.
The trial court's factual findings on a motion to enforce settlement pursuant to section 664.6 are subject to limited appellate review and will not be disturbed if supported by substantial evidence. (Kohn v. Jaymar-Ruby, Inc. (1994) 23 Cal.App.4th 1530, 1533, 28 Cal.Rptr.2d 780.) Where, as here, the central issue on appeal involves the construction and application of a statute, the court conducts an independent review of the trial court's ruling. (Burckhard v. Del Monte Corp. (1996) 48 Cal.App.4th 1912, 1916, 56 Cal.Rptr.2d 569.)
Misae Saunders argues the judgment should be reversed because she did not participate in mediation or personally sign the November 17, 1995, handwritten settlement agreement. We agree she is not bound by the settlement.
In Levy v. Superior Court, supra, 10 Cal.4th 578, 41 Cal.Rptr.2d 878, 896 P.2d 171, the parties' attorneys negotiated settlement of an action to collect attorney fees; the litigants were not involved in the settlement discussions. When one litigant refused to sign the formal settlement agreement presented by his attorney, the other moved for judgment under section 664.6. (Id. at pp. 580-581, 41 Cal.Rptr.2d 878, 896 P.2d 171.) The trial court denied the motion, following a line of cases which held the signature of the attorney alone was insufficient to create a binding settlement agreement for purposes of section 664.6. (Id. at p. 581, 41 Cal.Rptr.2d 878, 896 P.2d 171.)
The Court of Appeal denied a petition for writ of mandate, and the Supreme Court issued an alternative writ to resolve the conflict among the Courts of Appeal. (Levy, supra, 10 Cal.4th at p. 581, 41 Cal.Rptr.2d 878, 896 P.2d 171.) It held the term "parties" in section 664.6 means the litigants themselves, and does not include their attorneys of record. (Id. at p. 586, 41 Cal.Rptr.2d 878, 896 P.2d 171, see also Johnson v. Department of Corrections (1995) 38 Cal.App.4th 1700, 45 Cal.Rptr.2d 740 [].)
In Levy, the Supreme Court acknowledged the term "party," as used in a number of procedural statutes, is commonly understood to mean the actual litigant as well as the litigant's attorney of record. (10 Cal.4th at p. 583, 41 Cal.Rptr.2d 878, 896 P.2d 171.) It noted the term "is also susceptible of a narrower meaning, namely the specific person or entity by or against whom legal proceedings are brought." (Ibid.) The court turned to the intent of the Legislature in drafting section 664.6 to determine which definition of "parties" should prevail. (Id. at pp. 582-583, 41 Cal.Rptr.2d 878, 896 P.2d 171.) The high court concluded the latter definition applies when the "the subject of the statute may affect the substantial rights of the litigants themselves, ..." (Id. at p. 583, 41 Cal.Rptr.2d 878, 896 P.2d 171.) It reasoned that "[b]ecause the settlement of a lawsuit is a decision to end the litigation, it obviously implicates a substantial right of the litigants themselves." (Id. at p. 584, 41 Cal.Rptr.2d 878, 896 P.2d 171.)
Here, unlike Levy and Johnson, the court found that Misae Saunders authorized her Because Misae Saunders did not participate in mediation nor sign the November 17, 1995, settlement agreement, we conclude the court erred in enforcing the settlement against her. We express no opinion whether Williams can litigate her agency theories in a different motion or separate proceeding. (See Levy v. Superior Court, supra, 10 Cal.4th at pp. 584-585, 586, fn. 5, 41 Cal.Rptr.2d 878, 896 P.2d 171; and Cortez v. Kenneally (1996) 44 Cal.App.4th 523, 530, 51 Cal.Rptr.2d 671.) Given our resolution of this issue, we need not address the other claims of error.
husband, in addition to her attorney, to act on her behalf. Although Levy does not address the question whether the signature of a spouse and codefendant is sufficient to demonstrate assent to settlement terms for purposes of section 664.6, the court's assessment of the intent of the legislation supports...To continue reading
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