Lead Opinion
At the time relevant here, Code of Civil Procedure section 664.6 (hereafter section 664.6) provided: “If parties to pending litigation stipulate, in writing or orally before the court, for settlement of the case, or part thereof, the court, upon motion, may enter judgment pursuant to the terms of the settlement.” (Italics added.)
Background
The following summary of facts is derived from the pleadings and the papers submitted in support of and in opposition to petitioner/litigant Abraham Levy’s motion to enter judgment to enforce the settlement agreement signed by the parties’ attorneys.
Levy invented the “Auto-Shade,” an accordion-fold device that can be placed on a car’s dashboard to protect the interior from the sun. Real party in interest, attorney Joseph H. Golant, represented Levy in a number of matters between 1985 and 1991. During this period, Golant received more than $2.5 million in attorney fees and costs. Following a dispute regarding the amount of attorney fees owed, Golant, represented by Robert B. Owens, filed a lawsuit against Levy on November 20, 1991, to recover $360,000 in attorney fees and costs. Levy, represented by Harvey R. Friedman, filed an answer and a cross-complaint.
Shortly before the scheduled trial date, Attorneys Owens and Friedman started to discuss settlement of the case. The discussion culminated in a five-page letter Friedman faxed to Owens. At Friedman’s request, Owens confirmed the contents of the five-page letter by writing on it, “This document, with the few changes we discussed, is acceptable. [¶] Rob Owens.” When Owens’s client, Golant, refused to sign the formal settlement agreement, Friedman, on behalf of his client, Levy, filed a “Motion for Entry of Judgment to Enforce Settlement and for Sanctions.”
Following a hearing on the motion, the trial court found that it was undisputed that Friedman had sent Owens a letter purporting to confirm a
Friedman, on behalf of his client, Levy, sought a writ of mandate from the Court of Appeal, contending that Nicholson v. Barab, supra,
Discussion
At the time relevant here, section 664.6 provided in its entirety: “If parties to pending litigation stipulate, in writing or orally before the court, for settlement of the case, or part thereof, the court, upon motion, may enter judgment pursuant to the terms of the settlement.” (Stats. 1981, ch. 904, § 2, p. 3437, italics added.) The sole question before us is whether the term “parties” literally means the litigants personally or whether it also includes the litigants’ attorneys of record. As we mentioned earlier, the Courts of Appeal have reached conflicting decisions on this issue.
The first decision to interpret the term “parties” in section 664.6 was Haldeman v. Boise Cascade (1985)
Thereafter, the contrary view—that the stipulation to settle must be signed personally by the party litigants and not solely by their attorneys—was adopted in Gallo v. Getz (1988)
Recently, in Diaz v. May, supra,
To resolve this conflict among the Courts of Appeal, we must determine whether the Legislature intended the term “parties” as it appears in section 664.6 (“If parties to pending litigation stipulate ... for settlement of the case . . .”) to mean only the litigants personally or to include the attorneys representing the litigants. To ascertain such intent, we look first to the words of the statute. (Lennane v. Franchise Tax Bd. (1994)
The word “parties” is reasonably susceptible to more than one interpretation. As noted by the Courts of Appeal in Haldeman v. Boise Cascade, supra,
But the word “party” is also susceptible of a narrower meaning, namely the specific person or entity by or against whom legal proceedings are brought. (Black’s Law Dict. (5th ed. 1979) p. 1119, col. 2 [defining parties], p. 1122, col. 1 [defining party].) This meaning of the term “party” can also be found in our statutory law. For example, Code of Civil Procedure section 2033, subdivision (g) provides: “The party to whom the requests for admission are directed shall sign the response under oath, unless the response contains only objections.” (Italics added.) When, as in this particular instance, the subject of the statute may affect the substantial rights of the litigants themselves, the term “party” literally means the party litigant, not the litigant’s attorney. (See Brigante v. Huang (1993)
Because, as just shown, the term “party” can have more than one meaning, we next examine the statutory context in which it is used, so we can determine legislative intent. Section 664.6 governs the entry of judgment pursuant to the terms of a settlement agreement. Unlike the steps an attorney may take on behalf of the client that are incidental to the management of a lawsuit, such as making or opposing motions, seeking continuances, or conducting discovery, the settlement of a lawsuit is not incidental to the management of the lawsuit; it ends the lawsuit. Accordingly, settlement is such a serious step that it requires the client’s knowledge and express consent. (1 Witkin, Cal. Procedure (3d ed. 1985) Attorneys, § 194, pp. 221-222.) As we stated in Blanton v. Womancare, Inc. (1985)
In this case, the agreement to settle was signed only by the attorneys for the litigants, rather than the parties themselves. Because the settlement of a lawsuit is a decision to end the litigation, it obviously implicates a substantial right of the litigants themselves. Given this circumstance and section 664.6’s focus on settlements, we conclude that in providing for an enforcement mechanism for settlements by “parties,” the Legislature intended the term to literally mean the litigants personally. This conclusion is also supported by the circumstances preceding and surrounding the enactment of section 664.6.
Section 664.6 was enacted in 1981. (Stats. 1981, ch. 904, § 2, p. 3437.) As this court noted recently in In re Marriage of Assemi (1994)
Under one line of authority, settlement agreements preceding the enactment of section 664.6 in 1981 could be enforced only by a motion for
A second line of authority permitted motions to enforce settlements based on facts outside the pleadings if the fact of settlement and the terms of the settlement were not subject to reasonable dispute. (Corkland v. Boscoe (1984)
The conflict was resolved in 1981 when the Legislature enacted section 664.6, which created a summary, expedited procedure to enforce settlement agreements when certain requirements that decrease the likelihood of misunderstandings are met. Thus the statute requires the “parties” to stipulate in writing or orally before the court that they have settled the case. The litigants’ direct participation tends to ensure that the settlement is the result of their mature reflection and deliberate assent. This protects the parties against hasty and improvident settlement agreements by impressing upon them the seriousness and finality of the decision to settle, and minimizes the possibility of conflicting interpretations of the settlement. (See In re Marriage of Assemi, supra,
The peremptory writ is denied and the alternative writ is discharged.
Lucas, C. J., Mosk, J., Arabian, J., Baxter, J., and George, J., concurred.
Notes
In 1993, the Legislature amended section 664.6 by providing, among other things, that the written stipulation be “signed by the parties outside the presence of the court,” and that the oral stipulation before the court be made “on the record.” (Stats. 1993, ch. 768, § 1.) An amendment to this provision in 1994 deleted the phrase “on the record.” (Stats. 1994, ch. 587, § 7.) These amendments do not affect the resolution of this case.
Contrary to the assertion of litigant Golant, the 1993 amendment to section 664.6 does not remove the ambiguity inherent in the Legislature’s use of the word “parties.” Because the amendment (see fn. 1, ante) reiterated the word “parties” without further qualification or explanation, it is not helpful in resolving the ambiguity inherent in the term.
This court’s statement in In re Marriage of Assemi, supra, 1 Cal.4th 896, that under section 664.6 trial courts may take evidence to determine if the parties reached a binding mutual accord (
Haldeman v. Boise Cascade, supra,
We note that this statutory procedure is not the exclusive means to enforce a settlement. (See Kilpatrick v. Beebe (1990)
Dissenting Opinion
I respectfully dissent.
This case presents a simple question of statutory interpretation: Is a settlement agreement entered into by a duly authorized attorney on behalf of his or her client enforceable under the summary procedures of Code of Civil Procedure section 664.6?
Citing the truism that the settlement of a lawsuit, as a decision to end the litigation, “implicates a substantial right of the litigants themselves” (maj. opn., ante, at p. 584), the majority reaches its conclusion by narrowly construing “parties” in section 664.6 to encompass only litigants, personally. For the reasons that follow, I would construe “parties” to encompass, as well, litigants acting through their duly authorized attorneys of record.
First, narrowly construing “parties," as does the majority, will waste judicial resources by precluding the enforcement of authorized attorney-signed settlement agreements under section 664.6’s summary procedures.
Section 664.6, as the majority acknowledges, “is not the exclusive means to enforce a settlement. . . . Alternative procedures are a motion for summary judgment, a separate suit in equity, or an amendment to the pleadings . . . .” (Maj. opn., ante, at p. 586, fn. 5], citing Kilpatrick v. Beebe (1990)
To grasp the critical comparisons, it is important to understand that construing “parties” in section 664.6 to embrace only the party litigants, and not their counsel, will not, as a practical matter, alter the behavior of attorneys (or clients) so as to diminish the number of attorney-signed settlement agreements. The realities of litigation practice are such that, regardless of whether section 664.6 is construed narrowly, to refer only to the party litigants, or more broadly, to embrace their counsel, attorneys may be expected in any event, as a precautionary measure, to obtain litigants’ signatures on settlement agreements whenever they can do so without losing the opportunity to settle. Conversely, attorneys with settlement authority may also be expected to conclude settlements on their own signatures where time and circumstances do not permit obtaining their clients’ signatures. The possibility of enforcement litigation is only a single, relatively minor factor among the many an attorney must consider in deciding, when authorized, whether to conclude a particular settlement agreement.
Opportunities to settle pending litigation frequently present themselves within a restricted window of opportunity—often “on the steps of the courthouse.” Almost invariably, the incentive to settle when the opportunity presents itself will be greater than the incentive to delay settlement so as to secure the clients’ signatures in order to obtain an agreement that will be
While the majority’s construction of section 664.6 thus will not significantly reduce the number of attorney-signed agreements, it will relegate enforcement of such agreements to the nonsummary alternative procedures the majority concedes will still be available. Those alternative procedures are undeniably slower and more expensive than section 664.6’s summary procedures. Inevitably, therefore, the majority’s holding will increase the total judicial resources expended on enforcing attorney-signed settlement agreements.
Second, contrary to the majority’s suggestion, excluding attorney-signed settlement agreements from the enforcement procedures of section 664.6 will not serve to protect litigants’ substantive rights. The majority’s reasoning in this regard is flawed.
In purporting to discuss the relevant “statutory context,” the majority, significantly, does not focus on section 664.6’s actual language or on the term “parties” as used generally in the Code of Civil Procedure. Instead, the majority offers a red herring: “settlement [of a lawsuit] is such a serious step that it requires the client’s knowledge and express consent.” (Maj. opn., ante, at p. 583, citing 1 Witkin, Cal. Procedure (3d ed. 1985) Attorneys, § 194, pp. 221-222.) But this case is not about whether an attorney must have client authority to settle. That an attorney must be specifically authorized to settle a claim (Blanton v. Womancare Inc. (1985)
Noting that the settlement of the lawsuit, as a decision to end the litigation, “implicates a substantial right of the litigants themselves,” the majority concludes that “in providing for an enforcement mechanism for settlement by ‘parties,’ the Legislature intended the term to literally mean the litigants personally.” (Maj. opn., ante, at p. 584.) The conclusion, however, does not follow from the stated premise. The unstated assumption is that a narrow construction of “parties” is more protective of litigants’ substantive rights than the broader construction I favor. Such an assumption is not warranted.
On the other hand, as the majority fails to acknowledge, the question of an attorney’s authorization is within the scope of a section 664.6 hearing. When “ ‘acting upon a section 664.6 motion, the trial court must determine whether the parties entered into a valid and binding settlement of all or part of the case.’ ” (Diaz v. May, supra,
That counsel’s oral stipulation suffices in a section 664.6 enforcement proceeding was impliedly acknowledged by this court in In re Marriage of Assemi, supra, 1 Cal.4th 896. There we noted that “a stipulated settlement agreement presented orally by the party litigants or their counsel to a judge, in the course of a settlement conference supervised by that judge, satisfies the ‘before the court’ requirement of section 664.6. . . .” (Id. at p. 906, citing Casa de Valley View Owner’s Assn. v. Stevenson (1985)
On balance, then, the majority’s construction of “parties” in section 664.6 will not serve, relative to a broader construction, to heighten the protection of litigants’ substantive rights against compromise through unauthorized settlement agreements.
Third, because it will not diminish the number of attorney-signed settlement agreements, the majority’s construction of “parties” will generate none of the policy advantages the majority claims. In particular, the majority’s narrow construction will not, as claimed, “tend[] to ensure that the settlement is the result of [the litigants’] mature and deliberate assent” (maj. opn., ante, at p. 585), because attorneys, as previously stated, will continue to conclude settlement on their own signatures, where necessary. Neither will it (relative to a broader construction) “protects the parties against hasty and improvident settlement agreements” or “minimize[] the possibility of conflicting interpretations of the settlement” (ibid., citing In re Marriage of Assemi, supra, 1 Cal.4th at pp. 904-905; City of Fresno v. Maroot, supra,
Fourth, construing “parties” to encompass litigants acting through their attorneys of record, as I favor, would be consistent with the Legislature’s intent in enacting and amending section 664.6. As the majority recognizes, “[t]he word ‘parties’ is reasonably susceptible to more than one interpretation.” (Maj. opn., ante, at p. 582, citing Diaz v. May, supra,
In section 664.6, the majority argues, “the Legislature intended the term to literally mean the litigants personally.” (Maj. opn., ante, at p. 584.) Nothing, however, in the legislative history of section 664.6 supports such a conclusion, nor does the majority claim otherwise. Instead, the majority purports to examine “the statutory context in which [“parties”] is used.” (Maj. opn., ante, at p. 583.) Yet section 664.6’s statutory context actually supports the broader construction of “parties” I favor, not the majority’s construction.
The majority acknowledges “the term ‘party,’ as used in a number of our civil procedure statutes, is commonly understood to mean not only the actual litigant, but also the litigant’s attorney of record.” (Maj. opn., ante, at p. 583, citing §§ 437c [“[a]ny party may move for summary judgment”], 438, subd. (b)(1) [“[a] party may move for judgment on the pleadings”], 2017, subd. (a) [“any party may obtain discovery”].) In fact, “ ‘[c]ountless other examples of use of the terms “party” or “parties” appear in our statutes, and it is understood universally that the terms are intended to include the party litigant personally or through his attorney of record.’ ” (Diaz v. May, supra,
The majority cannot point to a single affirmative indication our Legislature intended the term “parties” in section 664.6 to have a different meaning than it has generally in the Code of Civil Procedure. Plainly, “[i]n enacting section 664.6, had the Legislature intended ‘parties’ to have a meaning other than this commonly understood meaning, it could and would have provided so in the statute.” (Haldeman v. Boise Cascade, supra,
The majority purports to draw upon “the circumstances preceding and surrounding the enactment of section 664.6.” (Maj. opn., ante, at p. 584.) The only “circumstance” the majority cites, however, is the existence in 1981 of “conflicting views concerning the proper procedures to enforce settlement agreements in pending litigation.” (Ibid.) As the majority correctly notes, the Legislature, in section 664.6, addressed the conflict by “creating] a summary, expedited procedure” for enforcement of settlement agreements. (Maj. opn., ante, at p. 585.) That in so doing the Legislature meant to preclude enforcement under section 664.6 of authorized attorney-signed settlement agreements does not, however, follow.
The Legislature in enacting section 664.6 apparently envisioned an “expedient and cost effective” alternative to statutory enforcement procedures.
Apparently, then, the Legislature, in enacting section 664.6, intended to achieve efficiency in the enforcement of settlement agreements not by curtailing authorization disputes, but, rather, through the institution of summary procedures. The efficiency benefits of summary procedures are maximized, of course, when such procedures are available in the widest possible class of cases. A construction of “parties” that permits summary enforcement under section 664.6 of authorized attorney-signed settlement agreements thus accords more with discernible legislative intent than does the majority’s construction, restricting the statute to cases involving only litigant-signed agreements.
Fifth, construing “parties” to encompass litigants acting through their attorneys would be consistent with the language of section 664.6 itself. Section 664.6 commences with the phrase: “If parties to pending litigation stipulate . . . .” (Italics added.) Because a stipulation is “an agreement between counsel respecting business before the court” (Palmer v. City of Long Beach (1948)
Sixth, construing “parties” to encompass litigants acting through their attorneys would accord with important public policy considerations. California has a strong policy encouraging settlements. (Poster v. Southern Cal. Rapid Transit Dist. (1990)
The majority’s conclusion that “parties” in section 664.6 does not encompass the litigants acting through their attorneys will in practice militate against the policy favoring settlements, because the alternative available enforcement procedures are slower and more expensive. Amending pleadings to assert the settlement as an additional cause of action or as a defense reopens discovery and adds further complications and time to the trial of the action. Material factual disputes often will exist or can be artfully pled in order to defeat summary adjudication. The determination of the issue must then await trial of the entire cause, thus defeating the efficiency purposes underlying the policy favoring settlement.
On the other hand, construing “parties” in section 664.6 to encompass the litigants acting through their attorneys of record would promote the policy favoring settlement, because it would permit the enforcement of attorney-signed settlement agreements under section 664.6’s summary procedures. I agree with real party in interest no satisfactory rationale can be advanced for carving out attorney-signed settlement agreements as a special case to which the statute does not apply.
For the foregoing reasons, I would conclude “parties,” as used in section 664.6, includes the litigants acting through their duly authorized attorneys of record, as well as the litigants personally.
Code of Civil Procedure section 664.6, at the time relevant here, provided as follows: “If parties to pending litigation stipulate, in writing or orally before the court, for settlement of the case, or part thereof, the court, upon motion, may enter judgment pursuant to the term of the settlement.” (Italics added.) All further statutory references are to the Code of Civil Procedure unless otherwise indicated.
Nor can the majority claim any efficiency advantage with respect to litigant-úgntd settlement agreements. Significantly, the majority does not argue narrowly construing “parties” will make actual section 664.6 proceedings more efficient. Obviously, any litigant-signed settlement agreement will be summarily enforceable under section 664.6 whether “parties” in that statute is construed broadly or narrowly.
It is also significant that when the Legislature amended section 664.6 in 1994, it made no changes to affect the meaning of “parties,” although it was presumably aware that the Court of Appeal had construed “parties” in Diaz v. May, supra,
