Opinion
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
APPEAL from a judgment of the Superior Court of Los Angeles County. Edward A. Ferns, Judge, Super. Ct. No. BC335870
Law Offices of Armand Tinkerian and Armand Tinkerian for Defendant and Appellant.
McGuireWoods and Leslie M. Werlin for Plaintiff and Respondent.
JOHNSON, J.
Maria A. Vogiatzis appeals from a judgment entered after the trial court granted H.D. Smith Wholesale Drug Co.’s (Smith) motion for entry of judgment under Code of Civil Procedure section 664.6 pursuant to the terms of the parties’ settlement. We find substantial evidence supports the judgment and the trial court’s rejection of the defenses Vogiatzis asserted in opposition to the motion for entry of judgment. Accordingly, we affirm.
FACTS AND PROCEEDINGS BELOW
In June 2005, Smith filed a lawsuit against Vogiatzis individually and doing business as Arshakuni Pharmacy & Medical Supply (collectively, Vogiatzis) asserting causes of action for breach of written contract, open book account, goods sold and delivered and account stated. Smith alleged Vogiatzis owed $99,772.19 plus $49.20 a day until entry of judgment pursuant to a September 11, 2000 agreement under which Smith agreed to sell certain goods to Vogiatzis and Vogiatzis agreed to pay for them.
Vogiatzis did not file a response to the complaint. Instead, the day after she was served with the complaint, her counsel made a settlement offer to Smith. Smith rejected Vogiatzis’s first offer, but over the course of the following month, the parties negotiated a settlement. On August 16, 2005, Smith informed the trial court the parties had “reached a conditional settlement which, if fully performed by [Vogiatzis], will result in this action being dismissed by September 15, 2006.”
Under the parties’ settlement agreement, which is titled “Stipulation for Entry of Judgment” (hereafter, stipulation), Vogiatzis agreed to pay Smith “the sum of $103,141.29 plus interest at the rate of 10% per annum from July 26, 2005,” in accordance with a payment schedule set forth in the stipulation. Pursuant to the schedule, Vogiatzis was required to pay “the full remaining unpaid balance” on or before August 10, 2006. Smith agreed to dismiss its complaint against Vogiatzis with prejudice once Vogiatzis paid the full balance due under the stipulation. In the event Vogiatzis defaulted on the stipulation by failing to make payments pursuant to the schedule, the stipulation authorized the trial court to enter judgment in favor of Smith in the amount of the remaining balance due under the stipulation (principal and interest) plus attorney fees and costs incurred in enforcing the stipulation. In executing the stipulation, Vogiatzis represented she had “had ample opportunity to consult with independent counsel of [her] choice in connection with the negotiation and execution of” the stipulation, and she agreed to “waive[] any claims, causes of action, or defenses she has, or may have, against [Smith] which relate, arise out of or arise in connection with the facts or transactions alleged in the complaint in this action, whether or not known or suspected to exist and [she] further waive[d] the protections of Civil Code § 1542.”
On September 21, 2006, Smith filed a motion for entry of judgment under Code of Civil Procedure section 664.6, asserting Vogiatzis defaulted on the stipulation by failing to make payments between August 2005 and August 2006 pursuant to the agreed upon schedule. Smith calculated a balance due under the stipulation of $29,262.18 (including principal and interest), and also requested the trial court award $383.50 in costs and $2,400 in attorney fees, for a total judgment of $32,045.68. Smith’s motion was supported by a declaration from its credit manager in which she listed the payments (date and amount) Vogiatzis had made “pursuant to the stipulation.”
Vogiatzis filed an opposition to the motion and submitted her own declaration. In her declaration, she stated she did not owe Smith any money and, in fact, had overpaid Smith for the goods she had received. Vogiatzis stated she had ordered $286,325.35 worth of stock from Smith between January 1 and December 31, 2005, but had paid Smith $343,387.67 as of the date she signed her declaration (October 27, 2006). She set forth a list of the payments (date and amount) she had made to Smith since January 1, 2005 and attached copies of the checks to her declaration. She claimed Smith “failed to credit” her for three payments she made before she entered into the stipulation (totaling $41,500). She attached “Statements” from Smith which she claimed showed Smith had not credited these three payments to her account.
In her declaration, Vogiatzis also stated she was “distressed” during the time she was negotiating the stipulation with Smith. She explained the Department of Health Services had placed her on “temporary suspension” between April 2005 and May 2006 and would not allow her to collect any payments from her customers. Therefore, she had no income. Vogiatzis further explained she was “a divorced mother” of two teenage children and she was not receiving any child support. Vogiatzis claimed Smith “was pushing [her] hard to sign the Stipulation or threatening to ruin [her] credit and subject [her] to further litigation.” She stated she “did not have financial resources to battle [Smith] in court and agreed to the Stipulation.”
Vogiatzis claimed, as a result of her “tremendous stress” and the fact she “was facing financial ruin,” she inadvertently made a mistake in calculating the amount of money she owed Smith at the time she signed the stipulation. She stated she believed she would make payments according to the payment schedule set forth in the stipulation until she paid Smith a total of $103,141.29, receiving credit for payments she had already made before she entered into the stipulation (an $18,500 payment she made on April 7, 2005 and a $3,000 payment she made on June 6, 2005). Based on the statements in her declaration, Vogiatzis asserted the stipulation was “unfair” and must be set aside due to her mistake and her claim she had overpaid Smith for the goods she had received.
At the time Smith prepared and filed its reply brief, it had received only Vogiatzis’s opposition brief, but not the declaration she had submitted in support of her opposition. The trial court continued the hearing on Smith’s motion for entry of judgment to give Smith an opportunity to submit briefing addressing the defenses Vogiatzis raised.
In its further briefing in support of its motion for entry of judgment, Smith argued Vogiatzis could not establish any of her claimed defenses of unilateral mistake, duress and offset. Smith’s counsel, its credit manager and its collection specialist all submitted declarations stating they never told Vogiatzis Smith would ruin her credit or subject her to further litigation if she did not sign the stipulation. Smith pointed out Vogiatzis did not claim the stipulation (which was negotiated by her counsel over a period of more than a month) was a result of mistake and duress until after she had made 10 months’ worth of payments pursuant to the schedule set forth in the stipulation. Smith also presented evidence demonstrating, after Vogiatzis signed the stipulation, her counsel contacted Smith and asked whether Smith would be amenable to selling goods to Vogiatzis on a COD basis. About a month and a half after Vogiatzis signed the stipulation, she entered into a new agreement with Smith for the purchase of goods. In her declaration, Smith’s credit manager also stated Smith’s records showed Vogiatzis had an outstanding balance of $65,936.09 due to Smith as of December 31, 2004 (before Vogiatzis purchased the $286,325.35 worth of stock from Smith between January 1 and December 31, 2005), and had an outstanding balance of $101,291.24 due to Smith as of May 31, 2005. Smith argued Vogiatzis’s claim about an overpayment was barred by the provision in the stipulation stating she agreed to waive all claims she had against Smith.
In response to Smith’s further briefing, Vogiatzis submitted another declaration in which she identified Smith’s credit manager as the person who threatened to ruin her credit and subject her to further litigation. She also stated Smith’s credit manager “was rude to [her] and was pushing hard to force [her] to pay the outstanding balance.” Vogiatzis maintained Smith failed to credit her account for three payments she made before she entered into the stipulation (totaling $41,500). Vogiatzis’s counsel also submitted a declaration in which he explained the efforts Vogiatzis had made to settle the dispute before Smith filed its motion for entry of judgment, including informing Smith’s counsel Vogiatzis believed she had overpaid Smith for the goods she had received. In her supplemental brief in support of her opposition to Smith’s motion for entry of judgment, in addition to the arguments she previously asserted, Vogiatzis argued it would be “unconscionable” to require her to pay money she does not owe. She also asserted an unclean hands defense and argued the stipulation was a contract of adhesion and therefore unenforceable.
In response to Vogiatzis’s supplemental brief, Smith submitted another declaration from its credit manager in which she again denied telling Vogiatzis she would ruin her credit or subject her to further litigation. The credit manager also set forth a list all of the payments Smith had credited to Vogiatzis’s account during 2005, including the three payments Vogiatzis claimed Smith did not credit. The credit manager maintained Vogiatzis had an outstanding balance of $101,294.24 due to Smith as of May 31, 2005. In its final brief in support of its motion for entry of judgment, Smith argued Vogiatzis did not overpay, and even if she did, when she signed the stipulation she “agreed to pay a set amount to terminate prosecution of this litigation and she waived claims against Smith.” Smith also argued all of Vogiatzis’s other defenses lacked merit. Finally, Smith updated the amount it was requesting in attorney fees to include the additional amount incurred for the further briefing.
On December 8, 2006, the trial court heard oral argument on Smith’s motion for entry of judgment. The court granted the motion, awarding Smith $28,293.43 in principal, $968.75 in interest, $383.50 in costs and $8,587.50 in attorney fees. The court entered judgment accordingly.
DISCUSSION
In ruling on a motion for entry of judgment under Code of Civil Procedure section 664.6, a trial court may resolve disputed “issues relating to the binding nature or terms of the settlement [which] are in dispute” and “ultimately determine whether the parties reached a binding mutual accord as to the material terms.” The substantial evidence standard of review governs our review of the trial court’s determination the parties entered into a binding settlement agreement. For the reasons discussed below, we find the judgment is supported by substantial evidence in the record.
In re Marriage of Assemi (1994) 7 Cal.4th 896, 905.
In re Marriage of Assemi, supra, 7 Cal.4th at page 911.
Vogiatzis was represented by counsel during the entire time she negotiated the stipulation with Smith which occurred over a period of more than a month. In signing the stipulation, she represented she had “had ample opportunity to consult with independent counsel of [her] choice in connection with the negotiation and execution of” the stipulation. She also expressly “waive[d] any claims, causes of action, or defenses she has, or may have, against [Smith] which relate, arise out of or arise in connection with the facts or transactions alleged in the complaint in this action, whether or not known or suspected to exist and [she] further waive[d] the protections of Civil Code § 1542.” On the date she signed the stipulation, in mid-August 2005, she agreed to pay Smith “the sum of $103,141.29 plus interest at the rate of 10% per annum from July 26, 2005.”
Substantial evidence supports the trial court’s rejection of Vogiatzis’s defense of duress. In addition to the fact Vogiatzis’s counsel approved the stipulation before Vogiatzis signed it, Smith submitted competent evidence indicating it did not threaten Vogiatzis in an effort to get her to sign the stipulation. In fact, after Vogiatzis signed the stipulation, she negotiated a new sales agreement with Smith. Moreover, Vogiatzis cannot prove her defense by citing unfortunate events occurring in her life which were not caused by or attributable to Smith.
After she made payments pursuant to the schedule set forth in the stipulation for 10 months, Vogiatzis claimed for the first time she made a mistake when she signed the stipulation. She says, at the time she signed it, she believed it meant Smith would credit prior payments she made against the $103,141.29 she agreed to pay pursuant to the stipulation, and she would stop making payments when her future payments and past payments totaled $103,141.29. This is a patently unreasonable interpretation of the stipulation. For one thing, the stipulation clearly states “amounts paid pursuant to this Stipulation” will reduce the balance of $103,141.29 Vogiatzis agreed to pay. Amounts paid before she entered into the stipulation by definition are not amounts paid pursuant to the stipulation. Moreover, her belief she could stop making payments when she hit $103,141.29 does not take into account the fact the stipulation required her to pay interest on top of the $103,141.29 balance.
With regard to her claim she overpaid Smith, we agree with Smith’s position Vogiatzis waived this claim when she signed the stipulation. But regardless of the waiver issue, we would uphold the trial court’s rejection of the overpayment claim. As Smith has pointed out, a settlement agreement is not necessarily invalid because the settlement amount does not correspond exactly with the amount a party owed before settlement. Parties arrive at settlement amounts for a variety of reasons. “[T]he consideration in a compromise agreement is not the discharge of a prior debt (which, indeed may not even have existed), but the payment of money in return for forbearance from suit.”
Goldstone-Tobias Agency, Inc. v. Barbroo Enterprises Productions, Inc. (1965) 237 Cal.App.2d 720, 722.
Under its sales agreement with Vogiatzis, Smith was entitled to recover not only the principal amount of Vogiatzis’s debt, but also late fees as well as attorney fees it incurred in collecting the debt. Assuming there was an overpayment, Vogiatzis has not refuted the response late fees and an attorney fees award were built into the settlement amount.
Moreover, substantial evidence supports the trial court’s rejection of the overpayment claim. In support of this claim, Vogiatzis repeatedly stated in her briefing below and on appeal that she purchased $286,325.35 worth of stock from Smith between January 1 and December 31, 2005, but had paid Smith $343,387.67 as of the date she signed her declaration (October 27, 2006). She disingenuously ignores evidence demonstrating she owed Smith $65,936.09 as of December 31, 2004, before she made those purchases of stock between January 1 and December 31, 2005. Vogiatzis’s argument also ignores the fact she owed late fees on her unpaid balance prior to entering the stipulation and owed interest on that outstanding amount after the stipulation.
Vogiatzis’s suggestion this case can be resolved by simple addition and subtraction is fine as far as it goes. It is only true if Vogiatzis adds to the principal amount late fees and service charges which accrued on the unpaid balance before the parties entered into the stipulation, and if she adds the interest which accrued under the stipulation on the unpaid portion. Had she calculated the amount she owed in this manner, Vogiatzis would have noticed little, if any, discrepancy between this amount and the amount Smith claimed was still owing.
Smith submitted competent evidence showing its records indicated Vogiatzis owed $101,294.24 as of May 31, 2005. Between that date and the date she signed the stipulation in mid-August 2005, Vogiatzis says she made one payment in the amount of $3,000. All the while late fees were accruing under her sales agreement with Smith. Moreover, the stipulation required Vogiatzis to pay interest on her balance under the stipulation retroactive to July 26, 2005. In urging this court to accept her overpayment claim, Vogiatzis asks U.S. to find her evidence on the issue is more credible than Smith’s evidence. This we cannot do under the substantial evidence standard of review. Substantial evidence in the record supports the trial court’s rejection of Vogiatzis’s overpayment claim because it is based on the faulty premise she was only contractually obligated to pay the principal amount owing, without regard to the late fees, service charges and costs incurred in maintaining and collecting the account.
GHK Associates v. Mayer Group, Inc. (1990) 224 Cal.App.3d 856, 872 [under the substantial evidence test, “(e)very substantial conflict in the testimony is to be resolved in favor of the judgment” and “the evidence is not to be weighed by the appellate court”].
Based on the foregoing discussion of the evidence in the record, we also must find substantial evidence supports the trial court’s rejection of Vogiatzis’s claims the stipulation is unconscionable and a contract of adhesion as well as her unclean hands defense. Evidence in the record indicates the stipulation did not require Vogiatzis to pay Smith a significant amount more (if any amount more) than she owed under the sales agreement (taking into account late fees, service charges and interest included in the amount).
For the foregoing reasons, we find the judgment in favor of Smith is proper. Under the stipulation, Smith is entitled to an award of attorney fees incurred in “any proceeding of any nature brought to enforce the terms of [the] Stipulation.” Based on this provision, Smith is entitled to recover its fees on appeal. The trial court should make an award of such fees.
We note Vogiatzis does not challenge the particular amount of costs and attorney fees the trial court awarded under the stipulation.
Security Pacific National Bank v. Adamo (1983) 142 Cal.App.3d 492, 498 [“Although this court has the power to fix attorney fees on appeal, the better practice is to have the trial court determine such fees when it determines costs on appeal”]; Abdallah v. United Savings Bank (1996) 43 Cal.App.4th 1101, 1112.
DISPOSITION
The judgment is affirmed. Respondent is to recover its costs on appeal, and the trial court is directed to determine the amount of attorney fees to be awarded to Respondent for legal fees incurred for services rendered on appeal.
We concur: PERLUSS, P .J., WOODS, J.