Opinion
H045527
12-26-2019
In re the Marriage of MARGARET L. and DAVID E. CRITZER. MARGARET L. CRITZER, Respondent, v. DAVID E. CRITZER, Appellant.
ORDER MODIFYING OPINION AND DENYING REHEARING
[NO CHANGE IN JUDGMENT] THE COURT:
It is ordered that the opinion filed herein on December 26, 2019 is modified as follows:
The second sentence of the last paragraph on page 2 shall read, "They had settled questions related to six retirement plans; they had agreed to sell the Marigold Court property and divide the proceeds; and they had agreed that Margaret would keep the other property, a condominium in Cupertino."
There is no change in the judgment.
The petition for rehearing is denied.
/s/_________
ELIA, ACTING P.J.
/s/_________
GROVER, J.
/s/_________
DANNER, J.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Santa Clara County Super. Ct. No. 6-13-FL-011468)
David E. Critzer appeals from a judgment on reserved issues arising from the dissolution of his marriage to respondent Margaret L. Critzer. The challenged order was issued pursuant to Code of Civil Procedure section 664.6 (section 664.6), based on a prior in-court settlement of issues related to division of the parties' property. On appeal, David contends that the family court erred in entering a judgment while there remained unresolved issues over material terms such as post-separation expenses and spousal support. We find no error and therefore must affirm the judgment.
In the interest of clarity, we refer to the parties by their first names.
Background
The parties were married in May 1986 and separated (for purposes of financial distributions) in October 2014. Margaret had already petitioned for dissolution of marriage in November 2013, and in September 2014 she requested bifurcation of marital status. David appealed from the ensuing status-only judgment, which this court affirmed as modified to reflect a judgment date of February 3, 2015.
Although Margaret identified the date of separation as November 7, 2013, the parties stipulated to a separation date of October 11, 2014, to facilitate resolution of issues over property division, support, and reimbursement claims.
Over three days from May 31 to June 2, 2017, the parties reached a judicially supervised settlement of some of the issues currently between them, which comprised property division, reimbursement claims, spousal support for David, and attorney fees. Specific issues that remained for resolution were also identified. For example, on May 31 they had not yet confirmed that the marital home on Marigold Court would be sold.
At the June 1 hearing David's attorney, David Patton, informed the court that the parties had agreed to the limited conditions under which Margaret would be obligated to pay spousal support, the division of additional assets, and a mutual waiver of attorney fees. Still remaining as issues were the disposition of the parties' two homes and their retirement plans.
With respect to spousal support, Mr. Patton explained that for the next approximately 2.5 years before Margaret turned 58 and her "KPMG long-term compensation plan" went into effect, "it will be no spousal support paid," unless David became disabled and unable to work, in which case he could request support at that time. For the 10 years after Margaret turned 58, there would again be no spousal support unless (1) David became disabled and unable to work; (2) Margaret earned more than $380,000 annually; or (3) KPMG did not pay the expected $6,000 per month under the long-term compensation plan.
Finally, at the June 2 hearing Mr. Patton announced that the parties had "reached an agreement on all of the remaining issues." They had settled questions related to six retirement plans; they had agreed to sell the Marigold Court property and divide the proceeds, with a special master to handle the selling price and costs to prepare it for sale; and Margaret would keep the other property, a condominium in Cupertino. Mr. Patton acknowledged that in every case, "[t]here's an infinite amount [sic] of possible things that could come up with respect to any sale of the house, and that's why, usually, we try not to put every possible thing we can think of in the agreement." Because "the judge . . . usually gets tired of resolving the teeny tiny disputes," they could be resolved by some form of alternative dispute resolution—or by default, back to the court.
At each of the three hearings the court asked the parties individually whether they had heard and understood the terms of the "proposed agreement" recited on the record. Each party answered yes to those two questions; each declined when invited to ask any questions about the proposed agreement; and each agreed to be bound by its terms.
The court then inquired about "what form the next judgment should take." Mr. Patton proposed "putting these stipulations into a Marital Settlement Agreement and attaching that to a Judgment and submitting that to [the court] for signature." Margaret's attorney, Katia Diehl, agreed to the proposal.
Over the next few months, however, no Marital Settlement Agreement (MSA) was produced by David's counsel; consequently, Ms. Diehl prepared a draft MSA in October 2017. The parties negotiated the terms, making revisions they thought were necessary. By the beginning of November 2017 the record contains no more requested corrections of Margaret's proposed MSA. Ms. Diehl advised Julia Lemon, David's other attorney, that she intended to file a motion to enforce the recorded settlement; but if David wanted to resolve the case by MSA, she remained "open to negotiating its terms."
On December 6, 2017, as the MSA had not been approved, Ms. Diehl submitted a proposed judgment under section 664.6, which she believed incorporated the terms of the May and June in-court settlement.
David opposed the request. He took issue with the omission in the oral settlement of an explicit waiver by Margaret of spousal support from him, a term to which the parties had subsequently agreed during their post-settlement negotiations. David further argued that there had been "no meeting of the minds" in the settlement regarding his right to use community funds to pay expenses, such as property taxes, for their home on Marigold Court, which he was occupying. He also insisted that at the June 2, 2017 proceeding, his attorney had not only anticipated putting the parties' stipulations into an MSA, but added, " 'and we'll all sign off and attaching that to a Judgment and submitting that to you for signature.' " Because that event "has not yet happened," David argued, the court should not "pick and choose which parts of the parties' agreement to enforce or create new terms in the absence of a complete agreement on the terms of the MSA." Finally, David protested that the settlement had not addressed a life insurance policy "with a very sizeable death benefit and some cash value." He acknowledged that the court would have continuing jurisdiction to adjudicate this asset post-judgment, but he believed that "it makes sense to address this issue prior to entry of judgment." Based on all these omissions, David contended, citing Greyhound Lines v. Superior Court (1979) 98 Cal.App.3d 604 (Greyhound Lines), that section 664.6 did not authorize the court to enforce only part of a settlement. He further argued that Margaret was estopped from enforcing the oral settlement because they had agreed to modify the material terms.
David maintained that the parties had stipulated in 2014 that while he was living at the Marigold house he would be allowed to use community property to pay for all expenses related to the property. The stipulation, approved by the court in May 2014, stated: "As a preliminary distribution of community property, each party shall receive $100,000 from the community property estate as his/her sole and separate property. Each party shall pay his/her own living expenses, including housing expenses, from his/her separate property, which shall also include a party's post-separation income. Notwithstanding the foregoing, the following community property expenses may be paid from joint funds: 2013 income taxes, property taxes, any single item agreed-upon [sic] home maintenance expense[s] exceeding $500, and all insurances
At the May 31 hearing counsel for both parties had agreed that there were life insurance policies that had not yet been addressed, but "will be addressed later."
The court heard oral arguments on Margaret's request on January 11 and 12, 2018. The parties agreed to a correction of the May 31, 2017 transcript to reflect an equalizing payment to Margaret of $102,500 rather than $12,500, and the court ordered that correction. However, the court denied David's request to add the "and we'll all sign off" language to the June 2 reporter's transcript. The parties disputed the accuracy of a revised spreadsheet used to calculate the distribution of assets in the proposed judgment. Mr. Patton believed that one third of the revised spreadsheet was incorrect, and he needed more time to review any changes Ms. Diehl had made in preparing the proposed judgment. Ms. Diehl pointed out that she had been willing for David's expert, Sally White, to prepare a revised spreadsheet (at his expense), but David apparently had not allowed that to happen; consequently, Margaret, an accounting professional, had done the work, which was then attached to the MSA sent to David's counsel in early October. Ms. Diehl acknowledged a word-processing error made by her in the proposed judgment, but she believed that David's resistance was "just another roadblock to resolution . . . and closure of this case." If further errors were to be discovered, she added, corrections could be made afterward.
The reporter's transcript we have been provided on appeal reflects the correct figure, $102,500. The January 11, 2018 minute order, however, erroneously states that the stipulated correction was from $12,500 to $1,250.
In a declaration Mr. Patton stated that he did not "specifically recall" using this language, but he "might have said that." In correspondence and at the January 11 hearing, Ms. Diehl maintained that there was no reason not to rely on the competency of the court reporter, and it was unlikely that so many words would have been left out. She also asserted that " 'and we will all sign off' is just not something that a lawyer would say in that context . . . we all understand that [an MSA] requires a signature. It would not have been necessary for him to say those words."
She explained that she had failed to "transfer over a certain number of assets from the marital settlement being awarded to Mr. Critzer. I didn't transfer it over from the Marital Settlement Agreement to the judgment. So the judgment that is attached as Exhibit L to my motion is not correct. This was not brought to my attention until this morning." She requested a short recess to enable her to return to her office and add the inadvertently omitted assets to the proposed judgment.
Mr. Patton, however, emphasized that rather than "slamming this thing through," the parties needed "to do it right." Ms. Diehl protested that there was no evidence that Margaret herself had made any errors in preparing the list of asset distributions; the only error was Ms. Diehl's own technical one. She again asked the court to allow her to submit a corrected proposed judgment; and Mr. Patton agreed to a one-day continuance.
The court approved that request, and it ordered the parties to meet and confer "not so much to the substantive arguments, which are briefed, but to any technical alleged inaccuracy between the transcribed proceedings and the new proposed judgment." The court specifically directed Mr. Patton to "red-line" and confer with Ms. Diehl about anything in that draft that was missing or was "not loyal" to the agreements reached in the transcribed proceedings in 2017. The court would then resolve both substantive disputes and issues over the "loyalty to the agreements reached in court." Otherwise, it would adopt the "default position" and simply incorporate the transcripts of those earlier proceedings.
The proceedings resumed on January 12, 2018. Having engaged in further negotiations over a revised judgment proposal, the parties' counsel advised the court that they had settled the remaining issues. The court confirmed with Mr. Patton, however, that notwithstanding the agreement on the material terms of the proposed judgment, David continued to oppose the section 664.6 motion. The court noted that if the new revisions conformed to the terms of the oral settlement, then the statute would permit entry of judgment. If material differences existed, then "there's an issue there as to what the Court can do." Ms. Diehl stated that the agreement now conformed to the terms of the recorded settlement, both counsel having been "very careful about not adding anything or omitting anything." Mr. Patton agreed, stating that he "made sure" that all the terms of the transcribed settlement were in the proposed judgment, although a few extra words were inserted to protect the parties.
Margaret's attorney had initially insisted that the court had jurisdiction to enter a final judgment that included dissolution of the marriage, although the appeal in Critzer v. Critzer (Dec. 21, 2018, H042214) [nonpub. opn.] was pending. At the June 12 hearing, however, she acknowledged the established rule that the superior court has no jurisdiction over a matter once before it during the pendency of the appeal on the matter. (See Code Civ. Proc. 916; In re Marriage of Ankola (2019) 36 Cal.App.5th 560, 567.)
The court and counsel then reviewed David's objections. Ms. Diehl stated that Margaret's waiver of spousal support, while not as clear as it could have been, was in the settlement. Margaret had previously agreed to an explicit full waiver, but that term, along with others, had never materialized in an MSA submitted by David and was left out of Margaret's draft MSA. In addition, Margaret had, contrary to David's assertion, disclosed all of the parties' insurance policies; in any event, David was already familiar with all of them, as he was an insurance broker. The policy at issue, she believed, had a cash surrender value of "something like" $40.
Ms. Diehl also disputed David's argument that the court was not empowered to enforce a partial settlement; she insisted that Greyhound Lines actually supported Margaret's request to enforce only what was recited in the oral settlement. Finally, she pointed out that while the parties and the court had anticipated the execution of an MSA, that event was not included as a condition of the recorded settlement, nor had it been made a court order. David's assertion of estoppel, she added, was unfounded.
At the hearing David defended his estoppel theory. On appeal, although he states that he "still contends that estoppel applies," he offers no substantive argument in support of the assertion. We consider it abandoned and therefore will not address it further.
Mr. Patton maintained that Margaret could not obtain enforcement of only "a piece of the settlement." The parties had a continuing disagreement over the responsibility for paying the expenses of the Marigold Court property pending its disposition. Mr. Patton suggested to the court that if an important term is not included in a settlement, "it permeates the full agreement" such that the settlement has to be set aside. He further confirmed David's position that the anticipated MSA was a condition to enforcement of the settlement, and that the disputed insurance policy was an omitted asset with a surrender value. Mr. Patton concluded that the parties "really don't have a complete resolved settlement agreement" but instead had "a bunch of reserved issues, and . . . some issues that involve whether . . . the settlement actually was a complete settlement . . . ." He listed the issues that had been or should be reserved, including reimbursement claims with respect to the two homes, Margaret's deferred compensation and retirement plans, the omitted life insurance asset, and the sale of the Marigold Court property.
The court heard extensive argument about who was at fault for the lack of resolution of issues. Ms. Diehl finally pointed out that post-settlement disputes "happen all the time," and when they do, "we go to a judge." It was "unfortunate" that the anticipated MSA had never materialized; but she and Mr. Patton were in agreement that not every issue can be incorporated into a recorded settlement.
At the conclusion of the January 12 hearing, the court first found that there were enforceable settlements made by the parties on May 31, June 1, and June 2 of 2017. The court asked Mr. Patton whether he agreed that the proposed judgment accurately reflected the terms of those in-court settlements; Mr. Patton answered, "Yeah," before again noting that reserved issues existed. The court added one provision to the proposed judgment, by checking the box stating that jurisdiction was reserved over all other issues. Ms. Diehl also confirmed her agreement that the judgment accurately reflected the settlement terms. The court entered that judgment, including the attachment setting forth the specific terms covering property division, reimbursement waivers, spousal support, and attorney fees. This timely appeal followed.
Discussion
On appeal, the parties continue to debate the authority of the court to enter "Judgment on reserved issues" pursuant to section 664.6. That statute provides: "If parties to pending litigation stipulate, in a writing signed by the parties outside the presence of the court 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. If requested by the parties, the court may retain jurisdiction over the parties to enforce the settlement until performance in full of the terms of the settlement." (Italics added.)
David contends that the superior court should not have entered a judgment because (1) the parties had not in fact agreed to all material terms; (2) the spousal support terms were "too vague for contract formation"; and (3) the parties had agreed to modify the settlement terms. None of these contentions withstands analysis.
First, the parties in fact did agree to all the terms recited in the recorded settlement. At the end of each proceeding in 2017 each party expressly stated on the record that the terms reflected that party's understanding and concurrence, and that the party agreed to be bound by them. The January 12 judgment was entered only after both attorneys expressly agreed that the proposed judgment reflected the terms of those judicially supervised settlements. The court was not entering an MSA, as David now characterizes the judgment; clearly the parties had not executed such an agreement, despite the efforts of counsel. Instead, counsel resorted to the 2017 settlement, with minor adjustments agreed to by both counsel. David's suggestion that the court had discretion to invalidate an inequitable MSA addresses a situation not presented here. And the assertion that the court rejected "the changes to which the parties had agreed" misstates the record; the court in fact rejected no changes to which the parties had agreed.
David attempts to argue that "the language of the judgment regarding spousal support differs significantly from the terms in the settlement transcript." However, he not only failed to object on this ground but, through his attorney, affirmatively agreed that the judgment "accurately reflect[ed] the terms" of that three-day settlement. The issue clearly has been waived for purposes of this appeal.
That material issues remained unresolved was, as counsel for both parties recognized, a matter within the court's reserved jurisdiction. Nothing in the judgment precludes further negotiation on questions pertaining to the payment of post-separation expenses, clarification of Margaret's waiver of spousal support, or other postjudgment issues, and no authority supports David's assertion that the court should have withheld judgment until the parties agreed on those additional issues—a contingency that Margaret believed David was continuing to obstruct with unremitting opposition. Because the parties had been unable to reach agreement on the terms offered in Margaret's proposed MSA, the court was well within its discretion under section 664.6 to enter a judgment which they affirmed was in accordance with the terms to which they had previously consented. Nor do we see anything inequitable in the court's decision to grant Margaret some relief while reserving jurisdiction on new issues as well as those yet unresolved.
We agree with David that the judgment, following the terms of the oral settlement, does not clearly state that Margaret waived spousal support. The record does not indicate that Margaret has yet demanded spousal support. Should any unresolved ambiguity lead to controversy over her entitlement to spousal support in the future, the parties can negotiate a resolution, or alternatively, incur yet more attorney fees in further litigation.
The holdings of Greyhound Lines and Weddington Productions Inc. v. Flick (1998) 60 Cal.App.4th 793 (Weddington) do not compel a different conclusion. In Greyhound Lines, a decision issued before the enactment of section 664.6, the company attempted to bind the plaintiff to a release that it said was a condition of their settlement. The appellate court upheld the trial court's finding that the plaintiff had not agreed to this term, which was a material provision of the settlement. The court further regarded Greyhound's offer to waive the release provisions as an "invitation to make a new and different settlement," which the plaintiff was entitled to reject. (Greyhound Lines, supra, 98 Cal.App.3d. at p. 608.) In this case, by contrast, not only counsel but both parties expressly affirmed that they understood and agreed to the settlement terms recited in court. And both counsel subsequently stated that the written judgment reflected those terms, even though other issues remained for later resolution.
Weddington, is likewise distinguishable. There the appellate court determined that a private judge had purported to enforce a settlement under section 664.6, but the resulting "order" contained "many material terms" to which the parties had not agreed. (Weddington, supra, 60 Cal.App.4th at p. 796.) Here it is beyond dispute that the judgment was consistent with section 664.6, as the court entered it "pursuant to the terms of the settlement" while reserving jurisdiction "over all other issues."
Based on the record before us, it is evident that the court gave counsel an extensive opportunity for written and oral argument; it entered its judgment only after careful consideration of each party's position and a thoughtful application of the law to the facts presented at each hearing between May 31, 2017 and January 12, 2018. While not disposing of all the points then in dispute, the judgment nonetheless conformed to the procedure set forth in section 664.6. Nothing more was required on that occasion.
Disposition
The judgment is affirmed.
/s/_________
ELIA, ACTING P. J. WE CONCUR: /s/_________
GROVER, J. /s/_________
DANNER, J.