Pappas v. Chang
75 Cal.App.5th 975
| Cal. Ct. App. | 2022Background
- At a June 29, 2018 mediation Pappas and Dr. Chang signed a short-form settlement: Chang would pay $100,000 and Pappas "will execute a release of all claims... in a more comprehensive settlement agreement" that "said release to include a provision for mutual confidentiality."
- Counsel exchanged drafts (notably a July 6 draft) that split payment into $29,999.99 (insurer) and $70,000.01 (Chang) and included confidentiality language; Pappas refused to sign and later discharged her lawyer.
- Pappas, self-represented, insisted she would not sign any release with confidentiality unless paid $525,000; she later filed suit for breach of contract seeking the $100,000.
- At bench trial the court found Pappas failed to perform (she never signed the more comprehensive release containing confidentiality) and entered judgment for Chang; Pappas appealed.
- Chang moved post-trial for attorney fees under Code Civ. Proc. §2033.420 for Pappas’s denials of two requests for admission; the trial court denied fees and Chang appealed that order.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Pappas was excused from executing the "more comprehensive" release containing mutual confidentiality | The June 29 short-form was a binding, enforceable agreement; payment of $100,000 should be enforceable without Pappas having to sign a further release | The short-form expressly required execution of a subsequent comprehensive release including confidentiality; Pappas never performed that condition precedent | Court: Pappas failed to perform her contractual obligation to execute a release containing confidentiality; her breach claim fails. |
| Whether the confidentiality provision was unenforceable as overbroad, illegal, or against public policy (esp. B&P Code §2220.7) | Confidentiality clause was overbroad and would bar reporting/making complaints to the Medical Board, violating public policy and §2220.7 | The settlement language expressly excepted disclosures "required by law"; communications and emails show parties could and would permit Board disclosures; clause interpreted to allow legally required reporting | Court: Confidentiality clause is not void; it does not bar disclosures required by law and should be construed to be lawful and operative. |
| Whether splitting settlement checks to $29,999.99 and $70,000.01 unlawfully evaded reporting duties (B&P Code §801.01) | The split was designed to avoid insurer reporting of $30,000+ settlements and thus to frustrate §801.01 | Chang testified she understood reporting obligations and that the total settlement was $100,000; the July 6 draft (per court) did not prevent reporting and insurer/insured would report | Court: Speculation about intent insufficient; trial court credited Chang's testimony that settlement would be reported; Pappas’s speculation did not excuse nonperformance. |
| Whether Chang was entitled to costs-of-proof attorney fees under CCP §2033.420 for Pappas’s denials of two early requests for admission | Denials were unreasonable because the matters were later proven at trial; fees should be awarded for costs of proving admitted facts | Pappas reasonably denied the early RFAs and held a good-faith belief she would prevail; the RFAs touched the ultimate issues and were served very early | Court: Trial court did not abuse discretion in denying fees; Pappas’s denials were made in good faith and the RFAs went to the ultimate issue—fees denied. |
Key Cases Cited
- Nestle v. City of Santa Monica, 6 Cal.3d 920 (1972) (view evidence in favor of prevailing party on appeal)
- Foreman & Clark Co. v. Fallon, 3 Cal.3d 875 (1971) (same principle of appellate evidence review)
- In re Marriage of Hoffmeister, 191 Cal.App.3d 351 (1987) (conflicts in evidence resolved in support of trial court where statement of decision explains basis)
- Oasis West Realty, LLC v. Goldman, 51 Cal.4th 811 (2011) (elements of breach of contract include plaintiff performance or excuse for nonperformance)
- Blix Street Records, Inc. v. Cassidy, 191 Cal.App.4th 39 (2010) (enforceability of short-form settlement where parties represented enforceability in court)
- J.B.B. Investment Partners Ltd. v. Fair, 37 Cal.App.5th 1 (2019) (preliminary settlement terms can be binding even if a long-form agreement was contemplated)
- Edwards v. Arthur Andersen LLP, 44 Cal.4th 937 (2008) (contracts should be interpreted to avoid invalidating provisions and to honor nonwaivable statutory protections)
- Laabs v. City of Victorville, 163 Cal.App.4th 1242 (2008) (abuse-of-discretion standard for denying costs under CCP §2033.420)
- Sargon Enterprises, Inc. v. University of Southern California, 55 Cal.4th 747 (2012) (standards for evaluating evidentiary and legal claims on appeal)
- Universal Home Improvement, Inc. v. Robertson, 51 Cal.App.5th 116 (2020) (criticizes early, broad RFAs that essentially ask plaintiff to admit it has no case and warns against awarding costs of proof in that context)