Opinion
NOT TO BE PUBLISHED
APPEAL from the Superior Court of San Bernardino County No. SCVSS100049, Martin A. Hildreth, Judge. (Retired Judge of the San Bernardino Muni. Ct. assigned by the Chief Justice pursuant to art. VI, § 6 of the Cal. Const.) Directed to enter judgment revised pursuant to stipulation; revised judgment affirmed.
Richards, Watson & Gershon and B. Tilden Kim for Plaintiff and Appellant.
Gresham, Savage, Nolan & Tilden and Michael Duane Davis and Marlene L. Allen-Hammarlund; Lemieux & O’Neill and Wayne K. Lemieux for Defendants and Respondents.
OPINION
Ramirez, P. J.
This opinion approves a stipulated disposition, orders the superior court to enter a judgment revised pursuant to the parties’ stipulation, and affirms the revised judgment. (See Code Civ. Proc., § 128, subd. (a)(8).)
All further statutory references shall b e to the Code of Civil Procedure unless otherwise indicated.
The City of Yucaipa (City) appealed from a summary judgment entered in favor of Western Heights Water Company (Western Heights) and South Mesa Water Company (South Mesa; collectively with Western Heights, the Water Companies), which are mutual water companies operating within City. City’s three causes of action for damages and declaratory and injunctive relief were adjudicated against it. All three causes were based on the same ground—that the Water Companies “must bear their costs of relocating their waterworks when requested by [City].” The judgment ruled in favor of the Water Companies on all three causes of action because the Water Companies “have established the priority of their rights and interests within their service areas over those of [City] . . .; and in that neither of [the Water Companies] dispute the need to obtain encroachment permits, except in the case of an emergency . . ., to provide reasonable insurance for their work projects, or to restore the streets to lawful standards . . . .”
See the “JOINT MOTION FOR STIPULATED DISPOSITION” (the joint motion) filed March 14, 2008, with “EXHIBIT A” and “EXHIBIT B.” “EXHIBIT B” is a copy of two pages of a reporter’s transcript of superior court oral proceedings on the motion for summary judgment. “EXHIBIT A” is the “STIPULATION FOR SETTLEMENT AND FOR REMAND TO TRIAL COURT FOR JUDGMENT AND ENTRY OF JUDGMENT CONSISTENT HEREWITH” (the stipulation). Attached to the stipulation are nine attachments. Attachment 1 is a folded map of City; Attachments 2 and 3 are in paper pockets and are infrastructure maps of the respective areas served by each; Attachment 4 is a copy of the “JUDGMENT BY COURT UNDER CALIFORNIA CODE OF CIVIL PROCEDURE § 437c” signed by the Honorable Martin A. Hildreth (the judgment). The judgment granted summary judgment against City as to all three of its causes of action “as set forth in Exhibit ‘A’” and orders that City take nothing by its complaint “as set forth in ‘Exhibit B.’” Copies of these two exhibits are attached to the copy of the judgment: “EXHIBIT A,” which is a copy of the signed “[PROPOSED] ORDER GRANTING MOTION FOR SUMMARY JUDGMENT OF DEFENDANTS, WESTERN HEIGHTS WATER COMPANY AND SOUTH MESA WATER COMPANY” (the order granting summary judgment); and “EXHIBIT B,” which is a copy of the signed “[PROPOSED] ORDER DENYING MOTION FOR SUMMARY JUDGMENT OF PLAINTIFF, CITY OF YUCAIPA.” The clerk of this court has filed the original and a copy of the joint motion with all the attached exhibits and attachments. The clerk of this court is directed in the disposition to send the copy of the joint motion to the superior court with a copy of this opinion.
Although the judgment terminated the litigation, it did not resolve the underlying dispute concerning work in city streets with the detail required to avoid further conflict, and the parties desired to agree on procedures for implementing a modified judgment. Recognizing the difficulty of reaching a satisfactory resolution via litigation, the parties and their counsel entered this court’s volunteer attorney-mediator settlement program. With the able and dedicated assistance of Robert A. McCarty, Sr., the parties have reached a detailed settlement embodied in the stipulation that addresses the unresolved issues between them and provides a means for avoiding or resolving their differences in the future. The result is a detailed, forward-looking, statesmanlike stipulation for the revision of the judgment appealed that uses the judgment as a foundation to address in detail the means by which the parties will act in concert to serve the Water Companies’ members, the citizens of City, and the public in general. The parties contemplate that we will direct the superior court to enter a revised judgment to be prepared by the parties incorporating the stipulation’s provisions. The clerk of this court will send a copy of the joint motion to the superior court with a copy of the opinion.
The revised judgment applies the central holding of the original judgment to the various activities and situations in which the parties will engage and find themselves. Paragraph (b) of the order granting summary judgment holds that the Water Companies’ infrastructure currently and lawfully in place need not be modified as required by City without compensation. The modified judgment, as set forth in the stipulation, applies that holding in six articles. The first identifies City (see attached map) and the Water Companies and describes their respective missions.
In the second article, which expands upon Paragraph (a) of the order granting summary judgment, the Water Companies recognize City’s duties to provide municipal services, streets, and facilities and to adopt and enforce regulatory provisions. Additionally, the Water Companies recognize the need to coordinate their infrastructure-related activities with City and to take responsibility for worksite safety, restoration, and insurance. City recognizes the rights of the Water Companies to serve their customers and “the prior and paramount nature” of the Water Companies’ water rights and property rights as set forth in the judgment.
The third article first provides for City on the one hand, and the Water Companies on the other, to notify the other in advance of their construction, repair, or maintenance activities. The Water Companies are to give City updated maps of their infrastructure (the initial maps being attached to the stipulation) and of their capital improvement programs; City is likewise to give the Water Companies copies of its capital improvement program. Next, provision is made, without waiver of any rights under the judgment and with the understanding that City’s jurisdiction extends only to issues of safety and site restoration, for: (1) an annual permit using an attached form to do emergency repairs and maintenance and to install, repair, or maintain fire hydrants and customer water connections and (2) specific work permits using an attached form for nonemergency infrastructure related activities not covered by the annual permit. No permit will be required for work done by the Water Companies on their own properties, except as required of any utility, but the Water Companies agree to inform, and coordinate with, City respecting any unpermitted infrastructure-related activities. Finally, the parties have designated the Water Companies’ general managers and the city engineer as the initial coordinators, to coordinate construction and related activities. City inspections of the Water Companies’ infrastructure activities will consistently apply universally applicable City guidelines for water-related projects, and City’s coordinator will disclose to the Water Companies’ coordinators foreseeable inspection requirements in advance of construction.
The fourth article addresses construction methods, materials, and standards both generally and specifically as to some of the issues out of which the suit originally arose. Generally, the Water Companies are to follow City’s published requirements and, to the extent none of these requirements apply, general public works standard specifications as set forth in a well-known publication on the topic called the “Greenbook.” Specifically, because the principle feature of waterworks infrastructure at issue between the parties was the water lines running under City’s streets, technical aspects of the trenches in which the lines run receive particular attention. These trenches are the subject of a City engineer drawing with a number of “General Notes,” some of which are the subject of particular agreed modifications among the parties, including a specification of the previously unspecified “additional requirements” that could be imposed on trenches.
Taking up the larger part of the fourth article is the key element of the parties’ agreement—whether City or the Water Companies will bear the expense of retrenching waterlines and related or similar infrastructure further underground to achieve an agreed minimum of 30 inches of cover, except for risers, fire hydrants, and the other enumerated exceptions. The agreement can be generally summarized as requiring City to bear the cost of the retrenching: (1) when required by City or any other public agency or utility; or (2) when City or any other public agency or utility does work causing a reduction in cover to less than the minimum 30 inches; or (3) when natural occurrences cause a reduction in cover to less than the minimum (unless the Water Company’s infrastructure was not part of a storm water runoff facility, in which case the Water Company would be responsible); or (4) when the Water Company infrastructure was installed before 1985. In the case of pre-1985 installation, City would bear the costs of excavating and backfill, and the Water Company would bear the costs of installation and materials. In general, the only situation in which one of the Water Companies would bear retrenchment costs is when the Water Company installed its infrastructure during or after 1985 with less than 30 inches of cover. The key fact of pre-1985 or post-1985 installation is set out by color coding on the Water Companies’ attached infrastructure maps, subject to proof to the contrary.
The fifth article covers the manner and timing of reimbursement to the Water Companies, insurance, warranties, indemnification, and contractor performance bonds. The sixth article deals with miscellaneous issues of remand to the superior court, retention of jurisdiction, costs and attorney fees, and notices.
We now proceed to an evaluation of the stipulation to modify under section 128, subdivision (a)(8).
APPROVAL OF STIPULATED REVISION
The proposed settlement calls for the revision of the judgment appealed. We apply section 128, subdivision (a)(8) even though it applies to reversals because, first, a revision, like a reversal, does erase the original judgment, and, second, the section provides a framework for analyzing the revision proposed here. Section 128, subdivision (a)(8) provides in relevant part: “An appellate court shall not reverse or vacate a duly entered judgment upon an agreement or stipulation of the parties unless the court finds both of the following: [¶] (A) There is no reasonable possibility that the interests of nonparties or the public will be adversely affected by the reversal. [¶] (B) The reasons of the parties for requesting reversal outweigh the erosion of public trust that may result from the nullification of a judgment and the risk that the availability of stipulated reversal will reduce the incentive for pretrial settlement.”
1. Effect on Nonparties and Public
Regarding the first finding, we must consider how the interests of nonparties or the public might be affected by the stipulation. (§ 128, subd. (a)(8)(A).) Specifically, we must inquire whether there is a “reasonable possibility that the interests” of a nonparty would be “adversely affected by [the revision].” (Ibid.)
In this case the parties have preserved and expanded upon the judgment, so that any effect of the revision is purely beneficial to the Water Companies’ clientele and the citizens of City.
We find no reasonable possibility exists that the proposed stipulated revision would adversely affect the interests of nonparties or the public. (§ 128, subd. (a)(8)(A).)
2. Reasons for Stipulated Revision
Regarding the second, two-pronged finding weighing the reasons for revision against the effect on public trust and pretrial settlement (§ 128, subd. (a)(8)(B)), we must first identify the parties’ reasons for preferring a stipulated revision over a dismissal of the appeal, which would simply leave the judgment appealed in effect.
We observe that the revision contemplated by the parties applies the judgment in detail and into the future to govern issues of the kind dealt with in the judgment. Thus, the revision is an expanded version of the judgment more useful to the parties.
3. Erosion of Public Trust
Taking first the issue of the erosion of public trust and postponing consideration of the effect on pretrial settlement incentives, public trust is eroded by a stipulated disposition when it appears that through settlement one party has paid off the other to obtain the particular result from the appellate court that the payer desired—the condemnation of the trial court’s judgment implied by the reversal. This reflects poorly on both courts implying that the trial court erred and that the appellate court’s reversal was groundless. (See Neary v. Regents of University of California (1992) 3 Cal.4th 273, 287, 293-294 (dis. opn. of Kennard, J.).)
However, as just explained, this stipulated revision preserves the essential holdings of the judgment and provides in specified situations how those holdings are to be applied. Thus, no additional condemnation of the judgment on the merits is implied by this stipulated revision, which, therefore, does not erode public trust in the integrity of the judicial system. (Compare Union Bank of California v. Braille Inst. of America, Inc. (2001) 92 Cal.App.4th 1324, 1331 [“public trust . . . also enhanced by settlements of pending appeals and related litigation”].)
We find the significant reasons for the stipulated revision outweigh the negligible possibility of the erosion of the public’s trust.
4. Disincentive for Pretrial Settlement
As the final task required by section 128, subdivision (a)(8), and subdivision (B) in particular, we must weigh the reasons for stipulating to modify the judgment against “the risk that the availability of stipulated [revision] will reduce the incentive for pretrial settlement.” The concern is that parties will avoid settling a case before the trial court decides it because the parties know they can appeal and then settle for a stipulated disposition of the disliked ruling. Pretrial settlement is, of course, more economical than settlement on appeal. (See Neary v. Regents of University of California, supra, 3 Cal.4th at pp. 288-291 (dis. opn. of Kennard, J.).)
This risk is not applicable here because the parties had not yet gone to trial. The important, undecided issues raised in this case required some judicial resolution, which was ably provided by the superior court judge, the Honorable Martin A. Hildreth, in ruling on the summary judgment motions of the parties. Therefore, we find that the parties’ reasons for stipulating to this revision outweigh the nonexistent disincentive of the stipulated revision in this case to pretrial settlement. (§ 128, subd. (a)(8)(B).)
We have completed the task set by section 128, subdivision (a)(8), and find that stipulated revision is appropriate in this case.
DISPOSITION
The superior court is directed to modify the judgment by entering a revised judgment to be prepared by the parties consistent with the stipulation; the revised judgment consistent with the stipulation is affirmed. The clerk of this court is directed to send the copy of the joint motion, which includes a copy of the stipulation, to the superior court clerk with the copy of this opinion. (See fn. 2.)
In the interests of justice and pursuant to the stipulation, the parties shall bear their own costs on appeal. (Cal. Rules of Court, rule 8.278(a)(5).)
We concur: Hollenhorst, J., McKinster, J.