Opinion
NOT TO BE PUBLISHED
APPEAL from the Superior Court of Riverside County No. INC041271, Randall Donald White, Judge. Affirmed.
Law Offices of Joseph Amato and Joseph Amato for Plaintiffs and Appellants.
Declues, Burkett & Thompson, Glenn S. Goldby and Gregory A. Wille for Defendant and Respondent Palm Springs Unified School District.
Doumanian & Associates, Nancy P. Doumanian and Ana W. Lai for Defendant and Respondent Riverside County Office of Education.
MILLER, J.
Plaintiffs Christopher Castro and Jessica Santillan entered into a settlement agreement on the record pursuant to Code of Civil Procedure, section 664.6 with defendants Palms Springs United School District (PSUSD) and Riverside County Office of Education (RCOE) regarding plaintiffs’ tort claims against defendants. Plaintiffs later filed a notice of rejection of the settlement contending it was a contingent offer rather than an enforceable settlement agreement. Defendants filed a motion to enforce the settlement, which the trial court granted. On appeal, plaintiffs contend that the settlement agreement was unenforceable because defendants did not comply with certain requirements of the California Rules of Court regarding settlement proceedings and because the agreement was contingent upon approval by defendants’ boards. We hold that defendants complied with the statutory requirements of section 664.6 and that substantial evidence supports the court’s determination that the parties entered into a binding settlement agreement.
All further statutory references are to the Code of Civil Procedure unless otherwise indicated.
FACTUAL AND PROCEDURAL HISTORY
Plaintiffs alleged that while driving a vehicle belonging to Yvette Cruz, Ramon Segura struck and killed plaintiffs’ infant daughter on property owned and controlled by PSUSD and RCOE. Plaintiffs settled their claims against Cruz and Segura. On April 11, 2008, the remaining parties participated in a mandatory settlement conference (MSC). Both plaintiffs were present at the MSC. Curtis Stephan, Risk Manager for PSUSD, and Cedell Bush, Claims Administrator for both PSUSD and RCOE, were also present. The parties reached a settlement which they placed on the record in the following colloquy:
“[Court]: Would someone like to state the terms of the settlement?
“[Counsel for PSUSD]: The defendants will pay to the plaintiffs the sum of $200,000. The settlement is contingent upon approval by the School District’s Board and RCO’s Board. The payment will be made within 30 days. There will be a complete dismissal with prejudice of all parties. All parties will bear their own attorneys’ fees and costs. [¶]... [¶]
“[Court]:... [D]o you intend... this to be enforceable based upon today’s settlement terms assuming it is approved by the boards that you mentioned?
“[Counsel for PSUSD]: Assuming that it’s approved by the board, yes, we intend this to be the settlement....
“[Court]:... [D]oes everybody agree somebody can come back and enforce this... pursuant to Civil Code
“[Counsel for PSUSD]: 664.6.
“[Court]: —Right. You all are contemplating it will be enforceable under that section?
“[Counsel for PSUSD]: Yes, your Honor.
“[Counsel for RCOE]: Yes, your Honor. [¶] Two minor things: the settlement is contingent upon board approval of the entities and the board of the joint powers which is the governing board that the release as to my client, RCO, would include its employee, Yvette Cruz.
“[Court]: [Plaintiffs’ counsel], anything you would like to add to the description of the settlement terms?
“[Counsel for Plaintiffs]: No, your Honor. I think that’s it.”
After inquiry by the court on the record, plaintiffs personally agreed to the terms of the settlement. Counsel for PSUSD indicated he had Stephan from PSUSD present. Stephan approved the terms of the settlement on behalf PSUSD. Counsel for RCOE indicated he had Bush present. Bush approved the terms of the settlement agreement on behalf of RCOE.
On April 25, 2008, plaintiffs filed a “Notice of Rejection of Contingent Settlement Offer.” On May 10, 2008, after defendants’ boards approved the settlement agreement, defendants delivered a settlement check to plaintiffs’ attorney in the amount of $200,000. On or about May 13, 2008, the settlement check was returned by plaintiffs’ attorney. On May 30, 2008, defendants filed a motion to enforce the settlement agreement. In a declaration in support of defendants’ motion, Bush declared that “[d]uring the MSC, I was authorized to extend an offer to settle this matter on behalf of DISTRICT and RCOE for the sum of $200,000.00, contingent on the approval of the Claims Committee for DISTRICT and RCOE.” Likewise, in his declaration in support of defendants’ motion, Stephan declared that “[d]uring the MSC, I was authorized to extend an offer to settle this matter on behalf of DISTRICT and RCOE for the sum of $200,000.00, contingent on the approval of the Claims Committee for DISTRICT and RCOE.” Both individuals declared that such an offer was extended to plaintiffs and their attorney and that the offer was accepted. Both declared that they were present when the settlement was placed on the record and that they approved its terms. Both declared that the appropriate boards had since approved the settlement.
Hearing on the motion to enforce the settlement agreement was held on July 22, 2008. The court took the matter under submission. The court subsequently granted the motion finding that the “contingency of board approval was recited on the record at the [MSC]. The settlement amount has been tendered.”
DISCUSSION
A. California Rules of Court Rules Governing MSCs
Plaintiffs contend defendants’ alleged failure to comply with the mandatory provisions of California Rules of Court, rule 3.1380 governing MSCs rendered any agreement reached at the MSC unenforceable. Specifically, plaintiffs maintain that defendants failed to provide a good faith offer of settlement in their settlement conference statement and that no one on behalf of defendants with full authority to settle the matter was present at the MSC.
All further rule references are to the California Rules of Court unless otherwise indicated.
Rule 3.1380(c), provides in pertinent part: “No later than five court days before the initial date set for the settlement conference, each party must submit to the court and serve on each party a mandatory settlement conference statement containing... [¶]... [a] good faith offer of settlement by each defendant....” Rule 3.1380(b) provides: “Trial counsel, parties, and persons with full authority to settle the case must personally attend the conference, unless excused by the court for good cause. If any consent to settle is required for any reason, the party with that consensual authority must be personally present at the conference.”
First, although plaintiffs claim that defendants failed to include a good faith settlement offer in their settlement conference statement, they failed to designate the settlement conference statement for inclusion in the record on appeal. Likewise, defendants do not respond to this particular argument. Thus, we have no way of discerning the veracity of plaintiffs’ contention that a good faith offer of settlement was not included in defendants’ settlement conference statement. Second, the rule plaintiffs cite exists to “encourage settlement negotiations and insure that the issues can be thoroughly and freely discussed....” (Gopal v. Yoshikawa (1983) 147 Cal.App.3d 128, 131.) Here, settlement negotiations occurred and bore fruit; thus, the purpose of requiring a good faith settlement offer would appear to be obviated when the parties, in fact, participated in the settlement conference and settled the case. Finally, if plaintiffs believed that defendants’ settlement conference statement was lacking, they should have sought remedy in the trial court prior to entering into settlement negotiations. (Rule 2.30 [sanctions for failure to comply with rules of court].)
As to plaintiffs’ contention that defendants failed to have representatives present at the MSC with full authority to settle the matter, we find plaintiffs’ claim lacking. Curtis Stephan, Risk Manager for PSUSD, and Cedell Bush, Claims Administrator for both PSUSD and RCOE, were both present at the MSC. Stephan approved of the terms of the settlement on behalf PSUSD. Bush approved the terms of the settlement agreement on behalf of RCOE. In their declarations, both declared that they were “authorized to extend an offer to settle this matter on behalf of DISTRICT and RCOE for the sum of $200,000.00, contingent on the approval of the Claims Committee for DISTRICT and RCOE.” Plaintiffs agreed, on the record, to the contingency. Thus, defendants had persons authorized to settle the matter at the MSC. Regardless, as noted above, the settlement conference yielded the fruit the rules were written to produce. Again, if plaintiffs believed that defendants were failing to comply with rule 3.1380(b) they should have brought this to the attention of the trial court prior to, or at the very least, before the conclusion of the settlement conference.
Lastly, no provision of rule 3.1380 specifically authorizes the court to invalidate an otherwise binding settlement agreement simply because one of the parties failed to meet any of the requirements therein. The provisions of rule 3.1380 are to insure that an effective and useful settlement conference occurs. The rule requires that all parties are prepared and ready to enter into meaningful settlement negotiations. When a party believes a failure to comply with the rule is hindering a viable settlement, it should promptly notify the court so that the court may deal with it appropriately and timely.
B. Enforceability of Contingent Settlement Agreement
Plaintiffs contend that no valid settlement agreement was entered into by the parties because neither Stephan nor Bush had full authority to enter into a binding agreement. They maintain that the contingency regarding the approval of defendants’ boards converted the “agreement” into an offer which plaintiffs were free to, and did, reject prior to the respective boards’ approval. We disagree.
Section 664.6, provides, in relevant part: “If parties to pending litigation stipulate... orally before the court, for settlement of the case... the court, upon motion, may enter judgment pursuant to the terms of the settlement.”
The question of whether the statutory requirements of section 664.6 have been met is a question of law, which we review independently. (Conservatorship of McElroy (2002) 104 Cal.App.4th 536, 544 [Fourth Dist., Div. Two] (McElroy).) On the other hand, the trial court’s determination of whether the parties entered into a binding settlement agreement in open court is reviewed under the substantial evidence standard of review. (In re Marriage of Assemi (1994) 7 Cal.4th 896, 911; McElroy, at p. 544.) That determination depends upon the trial court’s consideration of the issues of whether the material terms of the settlement were explicitly defined, whether the presiding officer inquired of the parties as to their understanding of the terms, and the parties made express acknowledgement of their understanding of the terms. (McElroy, at p. 544.)
In Levy v. Superior Court (1995) 10 Cal.4th 578, the California Supreme Court held that the term “parties” in the statute refers to the litigants themselves. (Id. at p. 584.) In other words, the litigant himself or herself must personally sign the writing or agree in open court; the agreement or signature of the litigant’s attorney is insufficient to qualify for the expedited enforcement procedures provided by the section. (Ibid.)
In Sigala v. Anaheim City School District (1993) 15 Cal.App.4th 661 (Sigala), the plaintiff filed a tort action against the defendant for injuries incurred on its property. (Id. at pp. 664-665.) An arbiter awarded $20,250 to plaintiff. (Id. at p. 665.) The defendant requested a trial de novo. (Ibid.) At an initial MSC held thereafter, the defendant’s representatives “indicated the board’s decision was to offer nothing in settlement.” (Id. at p. 665, fn. omitted.) At a third MSC, the court stated it understood that the defendants’ representative had no authority to negotiate a settlement: “For the school district to settle this case, a 15 member board must meet and each vote must be cast. No member of that board has the authority to be able to settle the case without the members being present.” (Ibid.) Thus, the court ordered the settlement conference continued until the afternoon and ordered all 15 members of the board to be present and prepared to discuss whether or not the case should be settled. (Ibid.) No member of the board appeared. (Id. at p. 666.) The court struck the defendant’s request for trial de novo as a sanction for failure to participate in good faith in the settlement proceedings. (Id. at p. 667.)
The appellate court reversed the sanction holding that the trial court failed to give the defendant sufficient warning and that the sanction was too drastic for a first violation. (Sigala, supra, 15 Cal.App.4th at pp. 673-674.) Nevertheless, the court noted that trial courts have authority to order attendance of such boards, or their representatives, at an MSC: “Although at liberty to provide their own internal operating procedures, the school districts do not have license, by setting up a [Joint Powers Authority (JPA)], to place themselves beyond the reach of the law. Notwithstanding the full-membership-vote and 72-hour-notice requirements, there is no reason that the board chairperson or a ‘settlement subcommittee’ could not be sent to an MSC.” (Id. at p. 672.)
In a concurring opinion by Justice Sills, which was joined by both other justices, the court delineated the procedures which a JPA should take when compelled to participate in a MSC: “Prior to a settlement conference, the government body should analyze its position with counsel and designate at least one of its members or high-ranking executives to attend the conference with authority to discuss settlement, conditional, of course, on final approval of any proposed settlement by the governing body.” (Sigala, supra, 15 Cal.App.4th at p. 675 (conc. opn. of Sills, P. J.), italics added.) The court noted the defendant’s contention that it was unable to legally participate in the settlement conference because the Brown Act (Gov. Code, § 54950 et seq.) required that governing boards of public bodies hold public meetings upon 72-hours notice. (Sigala, at p. 676.) However, it concluded: “Public policy in favor of settlement and the Brown Act are hardly mutually exclusive[:] [¶]... [¶]... The usual means by which such bodies cope with the problem of the need for collective approval of settlements is to give guidelines to one of their members or high-ranking executives in advance of a settlement conference.” (Ibid.) “Advance preparation for a settlement conference should alleviate any concerns about findings or required notices. There is nothing incompatible between the Brown Act and the court rules once it is recognized that any final settlement is always subject to full board approval. When a settlement is reached which is contingent on board approval, the judge normally continues the settlement conference or simply retains jurisdiction so that in the event approval of the final settlement is not forthcoming, negotiations can begin anew. In the case of a government entity, it is always understood that any final settlement necessitates formal action by the board at a meeting held in accordance with the provisions of the Brown Act.” (Id. at pp. 676-677, italics added.)
It is not at all unusual for a contract to provide that the obligation of a corporation is subject to approval by the board of directors as a condition precedent to performance. (See, e.g., Moreland Development Co. v. Gladstone Holmes, Inc. (1982) 135 Cal.App.3d 973, 977-978 [not illusory because of “implied covenant of good faith and fair dealing”] and cases cited; 1 Miller & Starr, Cal. Real Estate (3d ed. 2000.) §§ 1:159, p. 664, fns. 20, 21 and accompanying text [contract subject to approval of third person], 1:160, pp. 672 [approval by third person], 673 [approval by board of directors].)
Substantial evidence supports the trial court’s determination that the parties had entered into a valid and binding settlement agreement subject only to the approval of defendants’ boards. As noted above, Curtis Stephan was a risk manager for PSUSD and Cedell Bush a claims administrator for both PSUSD and RCOE. Both declared in their declarations that they were “authorized to extend an offer to settle this matter on behalf of DISTRICT and RCOE for the sum of $200,000.00, contingent on the approval of the Claims Committee for District and RCOE.” While defendants’ hierarchical organizational charts are not part of our record, it would appear that Cedell and Bush were high-ranking enough to meet Sigala’s proposed procedural requirements for MSCs involving government entities. Moreover, their authority to offer $200,000 makes it apparent that guidelines for settlement of the current action were discussed with the respective boards in advance of the MSC. Thus, defendants’ representatives’ presence at the MSC met with Sigala’s proposed procedural requirements for engaging in an MSC where the defendants are government entities.
The contingency that board approval was required prior to the agreement’s enforceability was twice expressed on the record. Likewise, the binding nature of the agreement was twice expressed on the record. Plaintiffs’ attorney and plaintiffs themselves agreed on the record to all the terms of the agreement, including the contingency of board approval. Once board approval was obtained and the settlement amount tendered, the agreement became enforceable. While plaintiffs certainly could have reserved the right to reject the settlement agreement at any time prior to the approval by the boards and/or tender of payment, plaintiffs did not do so. Thus, the settlement agreement was enforceable upon tender of payment during the section 664.6 hearing. The trial court’s order granting defendant’s motion to enforce the settlement agreement was supported by substantial evidence.
DISPOSITION
The judgment is affirmed. Respondents are awarded their costs on appeal.
We concur: HOLLENHORST Acting P. J., GAUT J.