The Record Reflected That The Parties Agreed In Open Court To Put The Oral Settlement Agreement In Writing And That Deadlines For Payment Of Settlement Funds Would Be Triggered By Full Execution Of The Written Settlement Agreement.
In Tricoast Builders v. Frederick, Case No. B307825 (2d Dist., Div. 6 October 18, 2021) (unpublished), homeowner defendants/cross-complainants in a construction defect case moved ex parte for an order to show cause why the oral settlement agreement, which had been reached months earlier in open court during a mandatory settlement conference and subsequently reduced to writing, had not been signed by plaintiffs/cross-defendants builder and its principal (who also served as one of builder’s attorneys) and for $25,627.51 in monetary sanctions. At a continued hearing on homeowner’s motion, the trial court awarded $10,000 in Code Civ. Proc., § 128.5 sanctions against builder and its principal, jointly and severally, instructed the court clerk to execute the settlement agreement on behalf of builder and its principal, and ordered that the sanctions be paid from the portion of settlement that was to be paid to builder.
The 2/6 DCA rejected both arguments advanced by builder and its principal on appeal – that the trial court lacked jurisdiction to enforce the settlement agreement, and that the oral settlement agreement was not contingent upon the preparation of a written agreement. First, although the MSC judge did not retain jurisdiction under Code Civ. Proc., § 664.6 because one of the parties to the case was not present at the MSC, that party subsequently signed the written settlement agreement thereby making the settlement agreement enforceable against it – along with the other parties who were present at the MSC. Second, the record showed that the parties agreed that a written agreement would be prepared, that the written agreement was consistent with the oral settlement agreement’s terms made in open court, that the deadlines for making the settlement payments would be triggered by the date the written settlement agreement was fully executed, and that builder/its principal did not communicate with homeowners until after the OSC and motion for sanctions was filed. The panel found no abuse of discretion in the trial court’s imposition of sanctions given that builder’s and its principal’s unreasonable delay caused homeowners to incur the expense of applying for the OSC and obtaining a court order authorizing release of the $420,000 in settlement funds owed to them.
Although finding builder’s/its principal’s arguments on appeal to be unsupported, the 2/6 DCA did not find their appeal to be so void of merit so as to justify granting homeowners’ request for $5,313 in appeal sanctions against builder/its principal.
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