Opinion
E068707
09-10-2019
AFS II, LLC, Cross-complainant and Respondent, v. MILLER GOLD, LLC, Cross-defendant and Appellant.
Thomas M. Swett for Cross-defendant and Appellant. Duringer Law Group and Edward L. Laird for Cross-complainant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super.Ct.No. CIVDS1309405) OPINION APPEAL from the Superior Court of San Bernardino County. John M. Pacheco, Judge. Dismissed. Thomas M. Swett for Cross-defendant and Appellant. Duringer Law Group and Edward L. Laird for Cross-complainant and Respondent.
In October 2013, AFS II, LLC (Landlord) filed an unlawful detainer complaint against Miller Gold, LLC (Tenant). (San Bernardino County Super. Court case No. UDFS1304877.) In November 2013, Landlord filed a cross-complaint, in an unlimited civil action, against (1) Tenant; (2) MS Industrial Sheet Metal, Inc. (MSI); and (3) others. (San Bernardino County Superior Court case No. CIVDS1309405.)
Landlord requests this court take judicial notice of the unlawful detainer complaint filed in San Bernardino County Superior Court case No. UDFS1304877. (Evid. Code, § 452, subd. (d).) The unlawful detainer complaint attached to Landlord's request bears San Bernardino County case No. UDFS1301096. Because the complaint attached to Landlord's request for judicial notice does not bear the case number of the complaint for which Landlord seeks judicial notice, we deny Landlord's request.
Tenant requests this court take judicial notice of various documents filed in the unlawful detainer case (San Bernardino County Superior Court case No. UDFS1304877): (1) the complaint; (2) a declaration with a variety of exhibits attached to it; (3) one page of a twopage judgment; (4) a motion for assignment; (5) the opposition to the motion for an assignment; (6) a declaration concerning a request for judicial notice; (7) a reply in support of the motion for assignment; and (8) a court order granting the motion for assignment.
First, as to the complaint, we grant the request because the request includes a conformed copy of the complaint, and the record on appeal does not include a conformed copy of the complaint. (Evid. Code, § 452, subd. (d).) Second, as to the declaration, we deny the request because the declaration is not relevant. (AL Holding Co. v. O'Brien & Hicks, Inc. (1999) 75 Cal.App.4th 1310, 1313, fn. 2 ["court must decline to take judicial notice of material that is not relevant"].) Third, in regard to the one page of a twopage judgment, we deny the request because the unlawful detainer judgment is included in the record on appeal. (Davis v. Southern California Edison Co. (2015) 236 Cal.App.4th 619, 632, fn. 11 [it is not necessary to take judicial notice of documents included in the record].) Fourth, in regard to the motion for assignment, opposition, reply, and declaration, we deny the requests because the documents are irrelevant. (AL Holding, at p. 1313, fn. 2.) Fifth, as to the judgment ordering an assignment, we grant the request. (Evid. Code, § 452, subd. (d).)
In April 2014, in the unlawful detainer case, a judgment was entered in favor of Landlord in the amount of $58,104.77. In July 2014, for the purpose of satisfying the judgment in the unlawful detainer case, Landlord filed a lien against any potential judgment Tenant might receive in the unlimited civil case. In August 2016, Landlord and Tenant entered into a settlement agreement in the unlimited civil case. The settlement agreement provided, "[Landlord], [Tenant], [and others] mutually release each other from any and all claims and causes of action."
After the settlement agreement was signed, a dispute arose between the parties concerning whether the release of "any and all claims" included Landlord's unlawful detainer judgment. Tenant asserted a judgment is a "claim," and therefore the unlawful detainer judgment was released as part of the settlement agreement. Landlord asserted a judgment is not a "claim," and therefore the unlawful detainer judgment was not released as part of the settlement agreement. The trial court concluded that a judgment is not a claim and held that the unlawful detainer judgment was not released as part of the settlement agreement.
Tenant contends the trial court erred by concluding Landlord did not release the unlawful detainer judgment in the settlement agreement. Landlord contends Tenant's appeal should be dismissed. We dismiss the appeal.
FACTUAL AND PROCEDURAL HISTORY
A. LANDLORD'S 2013 COMPLAINT AND CROSS-COMPLAINT
In October 2013, Landlord brought an unlawful detainer complaint against Tenant. In November 2013, Landlord filed a cross-complaint against (1) Tenant; (2) MSI, and (3) others. (San Bernardino County Superior Court case No. CIVDS1309405.) Landlord alleged that Landlord and Tenant "entered into an Industrial/Commercial Single-Tenant Lease" for a property located in Fontana. Landlord asserted that Tenant breached the lease by "caus[ing] work to be performed or materials to be supplied without the consent of [Landlord], fail[ing] to keep the Lease premises free and clear of all liens and fail[ing] to timely pay rent as it becomes due." Landlord brought causes of action for (1) breach of contract, (2) breach of guaranty, (3) indemnity; and (4) declaratory relief.
In the unlawful detainer case, in April 2014, a judgment was entered in favor of Landlord in the amount of $58,104.77. (San Bernardino County Superior Court case No. UDFS1304877.) In July 2014, Landlord filed a notice of lien against Tenant's potential judgment in the unlimited civil case reflecting the amount to be secured was $62,804.08.
B. 2015 AMENDED CROSS-COMPLAINT
In February 2015, Landlord filed a second amended cross-complaint. (San Bernardino County Superior Court case No. CIVDS1309405.) Landlord sued (1) Tenant; (2) MSI; (3) BS&B Pressure Safety LLC; (4) BS&B Pressure Safety System, Inc.; and (5) others. Landlord alleged that Tenant leased an industrial property from Landlord for a three-year period, from February 2011 to 2014.
Landlord asserted that Tenant "was in the business and industry of, among other things, recycling construction materials such as asphalt shingles to produce a substance that could be used in the construction of roads or other works of improvement. . . . [¶] [Landlord] became aware that the process by which [Tenant] recycled asphalt shingles involved grinding the shingles down into small particles. This grinding process created flammable dust clouds composed of felt, asphalt, tar, and other particulates that are toxic to living beings."
Landlord alleged that Tenant contracted with MSI for MSI to design, fabricate, install, and maintain a pollution control system that would collect the dust and debris generated by Tenant's processes. MSI installed the system. In December 2011, the system installed by MSI caused an explosion, which damaged Landlord's property. Between December 2011 and March 2012, MSI and others worked to repair and modify the system. On March 3, 2012, MSI and others deemed the system to be operational. Five hours after Tenant resumed operations, there was an explosion and fire, which again damaged Landlord's premises.
Landlord alleged that after the March 2012 explosion, Tenant was unable to operate, which "resulted in lost contracts, lost revenue, and considerable out-of-pocket expense to [Tenant] who [was] unable to recover from the lost business and [was] unable to continue paying rent for the Premises, unable to pay for the damage done to the Premises by the explosions, and [was] forced out of business. [¶] On or about September 1, 2013, [Tenant] breached the leasing agreement it had with [Landlord] by, among other things, failing to pay rent. [¶] On or about October 23, 2013, [Landlord] filed an unlawful detainer action, San Bernardino [County] Superior Court case number UDFS 1304877, to evict [Tenant] from the Premises."
Landlord brought causes of action for (1) negligence; (2) interference with prospective economic advantage; (3) strict products liability; (4) private intentional nuisance; (5) trespass; (6) conversion; (7) breach of a lease, in that Tenant caused work to be performed on the premises without Landlord's consent, abandoned hazardous waste on the property, failed to maintain adequate insurance, and "failed to pay rent and other charges owed under the Lease"; (8) breach of a guaranty; (9) indemnity; and (10) declaratory relief.
C. SETTLEMENT AGREEMENT
On August 3, 2016, the parties entered into a settlement agreement, which provided:
"Great American, on behalf of MSI agrees to pay $100,000 to [Landlord] and $300,000 to [Tenant]. [Tenant] agrees to pay $100,000 to MSI.
MSI alleged that Tenant failed to pay MSI for the pollution control system, causing MSI to suffer $675,414.81 in damages.
"[Landlord], [Tenant], MSI[,] and Great American mutually release each other from any and all claims and causes of action. [Landlord], [Tenant], [and] MSI . . . dismiss all actions and causes of actions against each other. [Tenant] assigns all claims against BS&B to MSI and will cooperate in the prosecution of any of these claims and that MSI can sue BS&B in [Tenant's] name.
"MSI releases Great American from all further defense and indemnity or other coverage obligations for any claims, cross-claims or causes of action, including the BS&B cross complaint.
"Great American on behalf of MSI shall tender payment within 20 days. Great American will issue payments of $400,000 to Hollins Law's trust account for distribution as set forth in paragraph 1[:] $100,000 to [Landlord]; $200,000 to [Tenant;] and $100,000 to MSI. [¶] . . . [¶]
"All parties will execute full releases with a Civil Code section 1542 waiver and dismissals. [¶] MSI shall release the mechanics lien forthwith. [¶] The parties will execute any documents necessary to complete the provisions above. [¶] This settlement will be enforceable pursuant to Code of Civil Procedure section 664.6."
D. RELEASE
An unsigned and undated release in the record provides, in relevant part: "Whereas, MSI, [Tenant], . . . and [Landlord] desire to resolve fully and finally any and all claims and disputes between them, including but not limited to, any and all claims of whatever nature relating to the rights, duties and obligations arising out of the matter of . . . County of San Bernardino . . . Case No. CIVDS1309405/CIVDS1404976 ('the ACTION')."
The release continued: "MSI, [Tenant], [Landlord], and [Great American Insurance Company] mutually release each other and forever discharge each other . . . from any and all claims of whatever nature, whether known or unknown, which exist or may exist against each other as of the date of this Agreement, including but not limited to any and all tort claims, contract claims, equitable claims, breach of fiduciary duty claims, public policy claims."
The "Dismissals" section of the release provided, in relevant part: "[Tenant] and [Landlord] agree to file Requests for Dismissal with Prejudice of their respective cross-complaints as to each other and as to MSI only on file in the San Bernardino County Superior Court, Case No.: CIVDS1309405/CIVDS1404976, within five (5) days of receipt of the settlement sum set forth in Paragraph 7. [Tenant] and [Landlord] will NOT file any Requests for Dismissal with or without Prejudice as to BS&B."
The "No Filing of Claims" section of the unsigned release provided, in relevant part, "MSI, [Tenant], . . . and [Landlord] represent and warrant that they do not presently have on file any claims, charges, grievances, actions, appeals or complaints against each other . . . in or with any administrative, state, federal or governmental entity, agency, board or court, or before any other tribunal or arbitrator(s), public or private, based upon any actions occurring prior to the date of this Agreement."
E. E-MAIL
On August 22, Landlord's attorney wrote to Tenant's attorney. Landlord's attorney asserted that the unlawful detainer judgment was not part of the parties' settlement agreement. Landlord's attorney wrote, "The [unlawful detainer judgment] was not discussed in the mediation and it was never [Landlord's] intention or expectation that this prior judgment would be released. We are generally okay with the form of the revised settlement agreement but please make sure it carves out the [unlawful detainer] judgment."
Tenant's attorney responded, writing, "[The unlawful detainer] judgment was certainly discussed and is part and parcel of [Landlord's] claims and the dispute between every party to this action . . . . If it were not included, [Tenant] . . . would have unresolved indemnity and damage claims against the other settling parties that arise directly from this action. Your contention that said judgment should be 'carved out' is mystifying.
"By written settlement agreement, [Landlord and Tenant] mutually released 'each other from any and all claims and causes of action.' This included a Section 1542 waiver for all claims known or unknown. Such a release unambiguously includes the judgment to which you refer and any other claims that [Landlord] or its lawyers may conjure up or attempt to resurrect tomorrow or ten years from now as the case may be.
"I expect that [Landlord] will honor its agreement of its own volition and under no circumstance will [Tenant] . . . sign a settlement agreement that alters the deal in the manner you have suggested. Period."
F. DETERMINATION OF GOOD FAITH SETTLEMENT
On August 26, 2016, the trial court granted MSI's motion for determination of a good faith settlement. The trial court dismissed "the causes of action for indemnity, apportionment of fault and declaratory relief only." The trial court did not dismiss causes of action of BS&B Pressure Safety Management LLC (BS&B).
G. FIRST MOTION TO ENFORCE THE SETTLEMENT AGREEMENT
1. MSI'S MOTION
MSI moved to enforce the parties' August 2016 settlement agreement. MSI asserted that Landlord agreed, in the settlement agreement, to release all of its claims, including the unlawful detainer judgment, in exchange for $100,000. MSI alleged that Landlord refused to sign a global release that included the unlawful detainer judgment. MSI requested the trial court order Landlord "to provide a fully signed Settlement Agreement and Release and provide a request for dismissal of the action with prejudice as to MSI [and Tenant] in exchange for payment of $100,000 to [Landlord]."
In support of their motion, MSI attached the declaration of Tamara Heathcote, an attorney for MSI, who declared (a) at the mediation on August 3, 2016, the parties, including Landlord, "entered into a binding Stipulation for Settlement"; (b) "the agreement entered into at mediation called for, inter alia, [Landlord] . . . to provide the parties with a signed Settlement Agreement and Release and a request for dismissal of the action with prejudice as to MSI [and Tenant] . . . in exchange for payment of $100,000 to [Landlord]." MSI also included: (1) a copy of the August 3, 2016, settlement agreement; (2) the unsigned release; and (3) e-mails between the parties' attorneys.
2. TENANT'S JOINDER
Tenant sought to join in MSI's motion and filed its own points and authorities supporting the motion to enforce the settlement agreement. Tenant argued, "Due to the summary nature of an unlawful detainer proceeding, a determination therein equates to an interlocutory judgment in this lawsuit." Further, Tenant asserted (1) the reference to a section 1542 waiver meant the release was intended to be global; (2) the failure to explicitly preserve the unlawful detainer judgment within the settlement agreement reflects there was no intention for the unlawful detainer judgment to remain active; (3) the unlawful detainer judgment arose from the same events in the instant lawsuit, so it is part of the instant case; and (4) it is illogical that Tenant would release its indemnity claim against MSI if Tenant were still liable to Landlord for unpaid rent.
Further, Tenant asserted that "a 'claim' is an existing right in favor of a creditor." Therefore, Tenant contended that a "claim" is a "judgment." Tenant argued that by agreeing to release all claims, Landlord agreed to release the unlawful detainer judgment. Tenant argued that any evidence from the mediation was inadmissible because mediation proceedings were privileged. Tenant preemptively objected to the presentation of any evidence concerning the mediation.
H. FIRST OPPOSITION
1. BS&B
BS&B opposed the motion to enforce the settlement agreement. BS&B asserted that "the proposed settlement agreement" was flawed "because it does not contain all the requisite material terms." BS&B asserted, "Unless and until all the settling parties agree to execute a version of the settlement agreement which contains all the requisite material terms, there is at most only an agreement to agree on settlement, and not an actual settlement itself. [¶] For these reasons, the pending Motion to Enforce Settlement cannot possibly be granted because there is no settlement to enforce."
2. LANDLORD
Landlord opposed the motion to enforce the settlement agreement. Landlord argued, "A judgment cannot reasonably be considered a 'claim.' It is fully matured and not subject to contest or proof." Landlord continued, "Thus, in the context [of] agreeing to protection from potential liability, it is clear that the term 'claim' means a potential liability that has not yet become certain."
Landlord asserted, "Here, the one-page Settlement Agreement was not drafted by [Landlord]. At no time was there any discussion that the Settlement Agreement would extend to any action other than the action that was being settled. [Citation.] There was no reason for [Landlord ] to think that the word 'claim' in the Settlement Agreement would include a release of a judgment obtained in an entirely different action. If the parties drafting the Settlement Agreement intended a broader scope of release beyond the claims and causes of action made or that could have been made in the lawsuit being settled it should have been set forth in the Settlement Agreement. It is not fair that [Landlord] should forfeit its unlawful detainer judgment against [Tenant] due to the drafting parties' failure to provide that the release would extend beyond the claims in this lawsuit."
Landlord included the declaration of its attorney, Edward L. Laird II (Laird). Laird declared he attended the mediation. Laird gave input on handwritten amendments to the typed settlement agreement. Laird declared, "At no time during the entire mediation did anyone ever suggest to us an intention to settle anything other than the claims asserted in this action and we had no reason to believe otherwise." Landlord included (1) its notice of lien against Tenant's potential judgment in the unlimited civil case; and (2) an unlawful detainer complaint against Tenant that does not bear a case number or file stamp.
I. FIRST REPLY
1. TENANT
Tenant replied to the oppositions. Tenant contended BS&B's opposition should be stricken because BS&B was not a party to the settlement agreement and therefore lacked standing to oppose the motion. Tenant argued that the trial court's granting of MSI's motion for determination of a good faith settlement reflected that a binding settlement agreement existed. Tenant contended it was "seeking the court's construction of the plain meaning of the parties' enforceable agreement—nothing more." Tenant contended BS&B's opposition was, in substance, a motion for reconsideration of the good faith settlement determination.
In regard to Landlord's opposition, Tenant asserted Landlord relied upon inadmissible evidence concerning the parties' mediation. Tenant asserted that if it presented evidence of the mediation, then it would show that Tenant was "adamant with the mediator that any settlement be global, full, and final between the parties and that they specifically discussed the unlawful detainer judgment at issue." Nevertheless, Tenant asserted the trial court should interpret the settlement agreement by relying on the plain language of the agreement. Tenant argued that a "claim" included a judgment.
2. MSI
MSI replied to the oppositions. In regard to Landlord's opposition, MSI asserted evidence concerning the mediation was inadmissible. MSI asserted it "is disingenuous" for Landlord to assert the unlawful detainer judgment was not part of the release in the instant case because Landlord filed its lien in the instant case. Further, MSI asserted that if Landlord did not want the unlawful detainer judgment to be part of the release, then Landlord should have included the unlawful detainer judgment in its handwritten notes on the settlement agreement. MSI argued that "full" means complete, so a "full release" is a complete release.
In regard to BS&B's opposition, MSI asserted the opposition was a request for the court to reconsider its ruling on the good faith settlement motion and BS&B failed to comply with the requirements for a motion for reconsideration.
J. FIRST RULING
On November 3, 2016, the trial court issued a ruling in the matter. The trial court denied, without prejudice, the motion to enforce the settlement agreement. The trial court found that the release MSI wanted the parties to sign was too broad. The trial court explained, "The document MSI is asking all settling parties to sign is more than a mere full release with [a Civil] Code [section] 1542 waiver. [Citation.] It is an entirely new settlement agreement. The settlement stipulation makes no provision that the parties will execute an entirely new agreement. Thus, the proposed settlement agreement is beyond what the binding settlement stipulation agreement provides for the parties to execute."
The trial court also addressed the issue of whether a "claim" includes a judgment. The trial court set forth the dictionary definitions of "claim" and "judgment." The trial court concluded, "[A] judgment is a decision by a court on a claim being asserted in a litigation, dispute, or action. A claim is the matter that is in dispute or [the] subject of the litigation before the court to which the court will enter a judgment at the conclusion of the litigation/dispute. A claim, in court matters, is resolved by a settlement or judgment, while a judgment is resolved by satisfaction.
"Thus, claim does not equal judgment, and judgment does not equal claim. Thereby, the settlement stipulation providing that the parties were releasing any and all claims and causes of action[] means the parties were releasing the disputes between the parties as raised in their filed complaints or cross-complaints or that could have been raised. It cannot be interpreted to include releasing any judgment entered in a different litigation." The trial court found BS&B lacked standing to oppose the motion.
K. SECOND MOTION TO ENFORCE THE SETTLEMENT AGREEMENT
On January 11, 2017, Landlord moved the trial court to enforce the settlement agreement. Landlord asserted that Tenant "refused to the accept the Court's Minute Order, not only refusing to sign a release mirroring the Court's Order . . . , but filing a separate action for declaratory relief in the Orange County Superior Court . . . that is directly at odds with this Court's Minute Order." Landlord asserted the trial court should require Tenant to enter into a release that carves out the unlawful detainer judgment, based upon the trial court's interpretation of the settlement language in the ruling on the first motion to enforce the settlement.
In regard to MSI, Landlord wrote, "MSI and [Landlord] have proceeded to enter into a their [sic] own separate 'Settlement and Release Agreement' . . . with a release styled to comply with the Court's Minute Order and have filed a dismissal of their claims against each other. [Citation.] This was done to bring finality to the Settlement Agreement and this action as between MSI and [Landlord]."
Landlord combined the foregoing motion with an application to satisfy the unlawful detainer lien. Landlord asserted it was entitled to have the unlawful detainer lien satisfied from the settlement funds that Tenant obtained from MSI's insurance carrier, Great American. Landlord included the declaration of its attorney, Laird. Laird declared the settlement agreement required Tenant to be paid $200,000. MSI's attorney was holding the $200,000 in a client trust account.
Landlord also provided: (1) the notice of lien; (2) an abstract of judgment in the unlawful detainer case; (3) the judgment in the unlawful detainer case; (4) Tenant's Orange County complaint for declaratory relief (Orange County Superior Court case no. 30-2016-00886487-CU-BC-CJC); (5) the August 3, 2016, settlement agreement; (6) a December 2016 request for dismissal, with prejudice, of Landlord's case against MSI; and (7) e-mails between the parties' attorneys.
L. SECOND OPPOSITION
Tenant opposed Landlord's motion and application. Tenant contended Landlord's motion "must be abated due to the existence of a previously filed lawsuit in Orange County that also seeks to enforce the parties' settlement contract." Tenant explained that settlement agreements are separate contracts, creating separate rights from their associated/underlying litigation, and may be enforced via a separate lawsuit. Tenant asserted that it filed its Orange County lawsuit on November 14, 2016, and it selected Orange County because "that is where the settlement [agreement] was formed and it is the location of [Landlord's] principal place of business." Tenant contended Landlord's motion was filed on January 11, 2017, and sought the same relief as Tenant's lawsuit. Tenant concluded its "Orange County lawsuit . . . must take precedence."
In regard to the merits, Tenant asserted that a Civil Code section 1542 waiver concerns general releases that "necessarily extend[] beyond the scope of the active lawsuit being settled." Tenant contended, "A right that exists in the favor of a judgment creditor is a 'claim' as contemplated by and used in our Civil Code. [Citation.] As to a release of claims between parties, it matters not whether the claim is a right that exists because of a pending cause of action or whether it is a right that exists because that cause of action has been reduced to a judgment. Both are claims by one party against the other . . . . Because one has been adjudicated and one has not is of no import—they are still both claims."
M. SECOND REPLY
Landlord replied to Tenant's opposition. Landlord asserted the San Bernardino County Superior Court had continuing and "exclusive jurisdiction that cannot be abated." Landlord wrote, "[Landlord] submits it is abundantly clear that this action is still pending between [Landlord] and [Tenant] . . . , that while still pending this Court has exclusive jurisdiction over enforcement [of] the parties' Settlement Agreement, and particularly so in view of the Court's prior Minute Order. Further, that the policy and preference of the law is to resolve any dispute concerning the settlement terms by motion under Code of Civil Procedure [section] 664.6 rather than by a new lawsuit in a different court."
As to the merits, Landlord asserted that Tenant was improperly seeking reconsideration of the trial court's earlier interpretation of the settlement agreement language. Landlord contended that Tenant failed to oppose Landlord's application for the settlement proceeds to be used to satisfy the judgment lien. Therefore, Landlord asserted, its application should be granted.
N. TENTATIVE RULING
On February 14, 2017, the San Bernardino trial court issued a tentative ruling granting the motion and denying the application. The trial court tentatively ordered Tenant to execute Landlord's proposed release. The trial court tentatively denied Landlord's application for the lien to be satisfied from Tenant's settlement proceeds.
O. SECOND RULING
A reporter's transcript is not included in the record on appeal. A February 15, 2017, minute order includes a ruling on a submitted matter. The ruling pertains to Landlord's application for satisfaction of its lien. The trial court wrote, "The Settlement Stipulation is specific about what funds it requires to be paid to whom, and it does not require[] satisfaction of the UD judgment. [Landlord] appears to be attempting to use a motion to enforce settlement in this case to collect the judgment in another case. . . . The motion shall be denied as to this portion of the request because it seeks relief beyond that contemplated under the Settlement Stipulation."
P. COMPLAINT IN INTERPLEADER
On March 7, in Orange County Superior Court, Great American filed a complaint in interpleader. (Orange County Superior Court case No. 30-2017-00907213-CU-MC-CJC.) Great American alleged that it paid $400,000 pursuant to the August 3, 2016, settlement agreement. The money was deposited into the client trust account of Hollins Law, which represented MSI. Great American asserted that both Landlord and Tenant interpreted the trial court's February 15 ruling to be in their respective favor and both were demanding money from Hollins Law's client trust account. Great American requested that Landlord and Tenant be required to litigate their rights to the $200,000, which was deposited for Tenant, and that Great American be discharged from any liability.
Q. EX PARTE APPLICATION
On March 10, in San Bernardino County Superior Court, Landlord filed an ex parte application to enforce the settlement agreement. Landlord asserted that on February 15, the trial court granted Landlord's motion requiring Tenant to execute Landlord's proposed release. Landlord contended that Tenant failed to execute the proposed release.
Additionally, Landlord contended, "[T]he court's Minute Order of February 15, 2017 does not say that the Request to Apply Funds [(i.e., the application for satisfaction of the lien),] was denied without prejudice, as the court stated at the hearing. [Tenant] [has] used that and the court's February 15 Minute Order to take the position that the court has ruled that settlement funds payable to [Tenant] under the Settlement Agreement are no longer available to any UD judgment or judgment lien that [Landlord] may have from another case. [Citation.] Such interpretation is, however, directly at odds with the court's granting of [Landlord]'s Motion by means of a Release that expressly excludes a release of any judgment from another case."
Landlord requested the court issue a judgment of dismissal that (1) declares the settlement agreement to be enforceable; (2) declares Landlord's proposed release accurately reflects the parties' settlement agreement; (3) dismisses Landlord's cross-complaint with prejudice as to Tenant; and (4) orders that settlement funds designated for Tenant be used to satisfy Landlord's judgment lien.
Attachments to the ex parte application included Landlord's proposed release, which included the following language: "Pursuant to the Court's Order of November 3, 2016 in San Bernardino County Superior Court Case No. CIVDS1309405, this release does not include a release of other judgments in other actions such as the Judgment of [Landlord] in San Bernardino [County] Superior Court Case No. UDFS1304877."
R. OPPOSITION TO THE EX PARTE APPLICATION
Tenant opposed Landlord's ex parte application. Tenant asserted the settlement agreement did not require satisfaction of the unlawful detainer judgment. Tenant contended, "To insist now that [Tenant] take a portion of those stipulated settlement proceeds and apply them to [Landlord's] unlawful detainer judgment is to request 'relief beyond that contemplated under the Settlement Agreement.' "
Tenant continued, "Opposing parties do not contend, and the court's order should not be read as holding, that [Landlord's] judgment lien in this action is not valid. That lien may yet be satisfied if [Tenant] makes any further recovery against BS&B Pressure Safety, LLC. But, as to the instant settlement agreement between the parties, the satisfaction of the judgment lien [is] not a term of the parties' agreement. Therefore, opposing parties respectfully request that the court enter judgment in the form they have presented."
Tenant's proposed judgment included a paragraph reading, "It is . . . ordered . . . that . . . the dollar amounts to be paid to each party thereto . . . does not contemplate or require the satisfaction from those proceeds of any judgment against [Tenant] . . . or any judgment lien in this action."
S. JUDGMENT
As set forth ante, the record does not include a reporter's transcript. On March 23, the trial court signed an order reflecting (1) the trial court granted Landlord's ex parte application ordering Tenant to execute Landlord's proposed release; and (2) denied the application as it pertained to ordering Tenant to use its settlement proceeds to pay the unlawful detainer judgment. On April 21, 2017, MSI filed a notice of entry of the March 23 order.
Also on March 23, the trial court entered a judgment providing: (1) the settlement agreement was valid and enforceable; (2) Landlord's proposed release accurately reflected the parties' settlement terms; (3) Landlord's cross-complaint against Tenant was dismissed; and (4) the settlement agreement did not require the unlawful detainer judgment be paid from Tenant's settlement proceeds. On May 12, Chris Van Veldhuizen filed a notice of entry of judgment.
Chris Van Veldhuizen, an individual, was named as a cross-defendant in Landlord's second amended cross-complaint. Landlord alleged he "is an individual acting as president of [Tenant] and responsible for controlling its operations."
T. ASSIGNMENT ORDER
On May 18, 2017, the San Bernardino court granted Landlord's motion for an assignment order concerning the money owed by Tenant for the unlawful detainer judgment. The trial court concluded Tenant's settlement proceeds could be used to satisfy the lien associated with the unlawful detainer judgment. (Code Civ. Proc., § 708.510.) The trial court ordered Landlord to submit a proposed order to the court. The signed assignment order was filed on June 13, 2017.
U. STIPULATION AND JUDGMENT
On June 9, 2017, Landlord and Tenant entered into a stipulation in the Orange County interpleader case. The stipulation reflected, "Plaintiff and Defendants have agreed to compromise and settle this case and all of their respective claims and contentions relating to the funds in interpleader and their rights thereto."
On June 22, 2017, the Orange County Superior Court filed a stipulation and order for entry of judgment, which reflected, "Plaintiff and Defendants have agreed to compromise and settle this case and all of their respective claims and contentions relating to the funds in interpleader and their rights thereto."
The parties, including Tenant and Landlord, agreed that $112,841.78 of the $200,000 interpleaded by Great American would be paid to Landlord. Upon receiving the money, Landlord would file an acknowledgment of full satisfaction of the judgment in the unlawful detainer case. The order for entry of judgment, signed by Judge Schulte, reflects that $112,841.78 of the interpleaded funds would be paid to Landlord, and that Landlord would file an acknowledgement of satisfaction of judgment in the unlawful detainer case.
V. NOTICE OF APPEAL
Tenant filed its notice of appeal in the instant case on July 5, 2017. The notice reflects Tenant is appealing from the "[j]udgment of dismissal of cross-complaint of [Landlord] after CCP § 664.6 motion and all interim orders leading thereto."
W. ORANGE COUNTY JUDGMENT
On July 25, the Orange County Superior Court entered a final judgment in the interpleader case requiring $112,841.78 of the interpleaded funds to be paid to Landlord. On August 16, 2017, Landlord filed a full acknowledgment of satisfaction of the judgment in the unlawful detainer case.
DISCUSSION
Tenant contends the trial court erred by finding the settlement agreement did not include a release of the unlawful detainer judgment, or a promise to release the unlawful detainer judgment. Tenant asserts the unlawful detainer judgment was released in the settlement agreement, or that the settlement agreement included a promise to release the unlawful detainer judgment, because (1) the settlement agreement included a release of "any and all claims and causes of action"; (2) the settlement agreement included a promise to execute a "full" release; (3) the settlement agreement included a promise to execute a release that would include a Civil Code section 1542 waiver; and (4) the unlawful detainer judgment is not specifically listed as still owing to Landlord in the settlement agreement.
Landlord contends this appeal should be dismissed as moot. Landlord asserts Tenant "enter[ed] into [an] Interpleader Stipulation for Judgment and accept[ed] its benefits . . . irrevocably agree[ing] that [Landlord] is entitled to $112,841.78 of the $200,000 Settlement Fund payable to [Tenant] under the Settlement Agreement."
" ' "[A]n action which originally was based upon a justiciable controversy cannot be maintained on appeal if all the questions have become moot by subsequent acts or events. A reversal in such a case would be without practical effect, and the appeal will therefore be dismissed." ' " (Carson Citizens for Reform v. Kawagoe (2009) 178 Cal.App.4th 357, 364.) "One such event occurring for which a reviewing court will dismiss an appeal is when the underlying claim is settled or compromised." (Ebensteiner Co., Inc. v. Chadmar Group (2006) 143 Cal.App.4th 1174, 1179.)
On March 23, the San Bernardino trial court entered a judgment reflecting the settlement agreement in the San Bernardino case "does not contemplate or require the satisfaction" of the unlawful detainer judgment "or any judgment lien in this action." In other words, the trial court ruled that the unlawful detainer judgment had not been released, but that the settlement agreement did not require the unlawful detainer judgment to be paid from Tenant's settlement proceeds. In the instant case, Tenant is appealing the San Bernardino trial court's March 23rd judgment of dismissal of Landlord's cross-complaint.
On May 18, 2017, the San Bernardino trial court granted Landlord's motion for an assignment order reflecting the balance of the unlawful detainer judgment would be paid from Tenant's San Bernardino settlement proceeds. The trial court explained that statutory authority (not the settlement agreement) authorized the assignment. (Code Civ. Proc., § 708.510.) In Tenant's July 5th notice of appeal from the March 23rd judgment, Tenant did not include the assignment order. (City of Long Beach v. Crocker National Bank (1986) 179 Cal.App.3d 1114, 1118, fn. 7 [appeal from the judgment will not be treated as including a postjudgment ruling].) Nor did Tenant separately appeal the San Bernardino court's assignment order. (Hildebrand v. Superior Court in and for City and County of San Francisco (1916) 173 Cal. 86, 89 [assignment order is appealable]; In re Ettlinger's Estate (1948) 87 Cal.App.2d 494, 497 ["The original order approving the assignment was appealable"]; see also Matthews v. Liberty Assignment Corp. (2016) 247 Cal.App.4th 71, 75 [appeal from an order denying a motion for assignment].)
On June 9, 2017, Landlord and Tenant entered into a stipulation in the Orange County interpleader case. Tenant and Landlord agreed that $112,841.78 of the $200,000 interpleaded by Great American would be paid to Landlord and, in exchange, Landlord would file an acknowledgment of full satisfaction of the judgment in the unlawful detainer case.
This court cannot deem the July 5th notice of appeal from the March 23rd judgment as including the assignment order because Tenant entered into a stipulated settlement to execute the assignment order. A party loses its right to appeal when "payment of the judgment was by way of compromise." (Reitano v. Yankwich (1951) 38 Cal.2d 1, 3.) Tenant not only failed to appeal the San Bernardino court's assignment order, Tenant entered into a stipulation for payment pursuant to the assignment order. As a result, we will not treat the appeal from the judgment as including the postjudgment assignment order. (Ibid.; Ryan v. California Interscholastic Federation (2001) 94 Cal.App.4th 1033, 1040 ["waiver is implied only where the satisfaction or compliance is the product of compromise"].)
In order for a reversal by this court to be effective, this court would have to order Landlord to pay Tenant $112,841.78. Such an order would make the reversal effective because it would place the parties back in the position of the unlawful detainer judgment not having been paid. However, this court cannot make such an order because the March 23rd judgment did not require such a payment. This court does not have before it an order or judgment requiring the payment of $112,841.78 and therefore we cannot reverse or modify such an order or judgment. (City of Long Beach v. Crocker National Bank, supra, 179 Cal.App.3d at p. 1118, fn. 7 [appeal from the judgment will not be treated as including a postjudgment ruling].)
The judgment before this court expressly reflects that Tenant is not required to pay the unlawful detainer judgment from the settlement proceeds. That is the judgment from which Tenant has appealed. That judgment does not provide this court with the means to order a payment of $112,841.78 from Landlord to Tenant if we were to reverse. (See Norman I. Krug Real Estate Investments, Inc. v. Praszker (1990) 220 Cal.App.3d 35, 46-47 [no jurisdiction to review postjudgment order that was not identified in the notice of appeal].) Because we cannot order the return of the money, any reversal by this court would be ineffective.
Code of Civil Procedure section 908 permits this court, upon reversing a judgment, to "direct that the parties be returned so far as possible to the positions they occupied before the enforcement of or execution on the judgment or order." That means this court can order restitution in certain cases. (Code Civ. Proc., § 908.) The important language in that statute, for purposes of this case, is "before the enforcement of or execution on the judgment or order."
The money Tenant paid to Landlord was not due to executing or enforcing the March 23rd judgment. The March 23rd judgment only confirmed the continued existence of the unlawful detainer judgment. The assignment order was a product of the unlawful detainer judgment. (Code Civ. Proc., § 708.510, subd. (a).) The payment in the interpleader case was due to a compromise. So, Code of Civil Procedure section 908 does not provide a means for this court to order restitution because any "enforcement or execution on the judgment" was based upon the unlawful detainer judgment—not the March 23rd judgment. (See Alonso Inv. Corp. v. Doff (1976) 17 Cal.3d 539, 544 ["a judgment may be deemed 'enforced or carried into execution' when an order or writ of execution based upon that judgment is obtained"].) In other words, if this court were to reverse the March 23rd judgment, we could not order restitution because there was no enforcement or execution of the March 23rd judgment; rather, there was a compromise concerning the money owed pursuant to the unlawful detainer judgment.
In sum, we conclude we cannot provide effective relief on the issue of whether the unlawful detainer judgment was released by the settlement agreement. We cannot provide any effective relief because we have no means of ordering the return of the $112,841.78. (See Mony v. Leis (2011) 193 Cal.App.4th 1367, 1372 [when status quo cannot be restored the challenge presented may be moot]; see also C.A.v. C.P. (2018) 29 Cal.App.5th 27, 44 ["the issue is moot because we cannot undo that which was done"].) Without an order for a return of the money, a reversal would be ineffective and our discussion purely academic. Accordingly, we will dismiss the appeal as moot.
DISPOSITION
The appeal is dismissed. Respondent is awarded its costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1).)
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
MILLER
J. I concur: RAMIREZ
P. J.
MENETREZ, J., Dissenting.
There is no basis to dismiss this appeal, and the judgment should be reversed. I therefore respectfully dissent.
BACKGROUND
This multiparty dispute involves a landlord AFS II, LLC (AFS), a tenant Miller Gold, LLC (Miller Gold), the tenant's principal Chris Van Veldhuizen, the tenant's subcontractor MS Industrial Sheet Metal Incorporated (MSI), and the subcontractor's insurer Great American Assurance Company (Great American). The landlord obtained a default judgment in an unlawful detainer action against the tenant. Then, in the instant case, the parties sued and countersued each other, and the landlord filed a notice of lien based on the unlawful detainer judgment.
The case went to mediation, which resulted in a settlement agreement that was signed by all parties and purported to resolve the entire dispute. The signed settlement agreement is typed on a single page, with some handwritten interlineations that the parties initialed. It provides that AFS, Miller Gold, MSI, Van Veldhuizen, and Great American "mutually release each other from any and all claims and causes of action," and it separately provides that AFS, Miller Gold, MSI, and Van Veldhuizen "dismiss all actions and causes of actions [sic] against each other." It also provides that "[a]ll parties will execute full releases with a Civil Code section 1542 waiver and dismissals."
Less than two weeks after the mediation and settlement, counsel for MSI prepared a longer and more formal settlement agreement, which he circulated to all counsel by email. As relevant here, it provided that AFS, Miller Gold, MSI, Van Veldhuizen, and Great American "mutually release each other and forever discharge each other . . . from any and all claims of whatever nature, whether known or unknown."
By reply email, counsel for AFS rejected the long-form agreement because it did not exempt the unlawful detainer judgment from the release, and he claimed that "[t]he judgment was not discussed in the mediation and it was never AFS's intention or expectation that this prior judgment would be released." He demanded that the long-form agreement be revised to "make sure it carves out" the unlawful detainer judgment. In a later email, he contended that "[t]he judgment is not a claim or a cause of action and the settlement related to this action only."
MSI's counsel vigorously disagreed and contended that AFS's counsel was trying to "change" the settlement. Miller Gold's counsel likewise responded that the unlawful detainer judgment "was certainly discussed and is part and parcel of [AFS]'s claims and the dispute between every party to this action." As a result of the impasse concerning the meaning of the original settlement agreement, no long-form settlement agreement was ever signed.
MSI moved to enforce the original settlement agreement, asking that the court order AFS "to provide a fully signed Settlement Agreement and Release and provide a request for dismissal of the action" in exchange for payment of the funds specified in the original settlement agreement. Miller Gold joined, AFS opposed, and the court agreed with AFS, concluding that the release in the original settlement agreement did not include the unlawful detainer judgment.
On March 23, 2017, the court entered a judgment incorporating that ruling. The judgment expressly provides that the release in the settlement agreement does not encompass the unlawful detainer judgment. Miller Gold timely appealed from the March 23 judgment "and all interim orders leading thereto."
The March 23 judgment also provides that Miller Gold need not pay the unlawful detainer judgment out of Miller Gold's proceeds from the settlement. But in the unlawful detainer case AFS subsequently sought and obtained—over Miller Gold's vigorous opposition—an order requiring that the unlawful detainer judgment be paid from Miller Gold's settlement proceeds. The settlement proceeds were eventually the subject of a separate interpleader action, which was resolved by stipulation in conformance with the assignment order from the unlawful detainer action.
The trial court apparently reasoned that in the instant case, the court's role was merely to enforce the parties' settlement, which did not call for the unlawful detainer judgment to be paid from any particular source of funds, including the settlement proceeds. But in the unlawful detainer case, the court had jurisdiction to enforce the unlawful detainer judgment by directing that it be paid from any appropriate source of the judgment debtor's funds, including the settlement proceeds from the instant case. --------
DISCUSSION
1. Justiciability
The majority concludes that it is impossible for us to grant effective relief, so we must dismiss the appeal as moot. I respectfully disagree.
The judgment under review provides that the release in the settlement agreement did not encompass the unlawful detainer judgment. On that basis, AFS went on to collect $112,841.78 in satisfaction of the unlawful detainer judgment, taking those funds from settlement proceeds that would otherwise have been paid to Miller Gold. Were we to conclude that the judgment under review should be reversed because the release in the settlement agreement did encompass the unlawful detainer judgment, we could and should direct the trial court to order AFS to pay $112,841.78 to Miller Gold, because AFS collected those funds from Miller Gold in satisfaction of a judgment that AFS had already released.
That would be effective relief, and nothing prevents us from granting it. On the contrary, "[w]hen the judgment or order is reversed or modified, the reviewing court may direct that the parties be returned so far as possible to the positions they occupied before the enforcement of or execution on the judgment or order. In doing so, the reviewing court may order restitution on reasonable terms and conditions of all property and rights lost by the erroneous judgment or order, so far as such restitution is consistent with rights of third parties and may direct the entry of a money judgment sufficient to compensate for property or rights not restored." (Code Civ. Proc, § 908; see Beach Break Equities, LLC v. Lowell (2016) 6 Cal.App.5th 847, 852 ["As a general rule, when a judgment is reversed on appeal, the appellant is entitled to restitution for all things lost by reason of the judgment. [Citation.] This principle is embodied in California statutory law and settled equitable principles."].)
The majority reasons that we cannot order AFS to pay $112,841.78 back to Miller Gold "because the March 23rd judgment did not require" Miller Gold to pay $112,841.78 in the first place; "[t]his court does not have before it an order or judgment requiring the payment of $112,841.78 and therefore we cannot reverse or modify such an order or judgment." (Maj. opn., ante, at p. 26.) That is incorrect. The March 23 judgment expressly provides that the unlawful detainer judgment does not have to be paid from Miller Gold's settlement proceeds, but the March 23 judgment also expressly provides that the unlawful detainer judgment was not released by the settlement agreement. The March 23 judgment thus does require Miller Gold to pay $112,841.78, because it expressly leaves the unlawful detainer judgment intact. If the March 23 judgment is wrong on that point, then on appeal from the March 23 judgment we should reverse and direct repayment of any funds collected in satisfaction of the unlawful detainer judgment, because it was released by the settlement agreement.
The majority also faults Miller Gold for failing to appeal from the assignment order in the unlawful detainer action and for stipulating to resolution of the interpleader. But given the existence of the March 23 judgment, Miller Gold had no legally valid basis to challenge either the assignment order or the resolution of the interpleader, both of which merely enforced the March 23 judgment's determination that the unlawful detainer judgment had not been released. Had Miller Gold appealed from the assignment order, for example, its opening brief on appeal would have consisted entirely of an impermissible collateral attack on the March 23 judgment. Similarly, had Miller Gold fought the resolution of the interpleader, its opposition would likewise have consisted entirely of an impermissible collateral attack on the March 23 judgment. Miller Gold thus took the only reasonable path to try to vindicate its rights, namely, an appeal from the March 23 judgment.
In order to obtain relief, Miller Gold did not need to appeal from either the assignment order or the resolution of the interpleader. And in order for us to grant relief, we need not deem the case before us to be an appeal from the assignment order or the interpleader. All we need to do is (1) reverse the judgment's erroneous determination that the settlement agreement did not release the unlawful detainer judgment, and then (2) "order restitution on reasonable terms and conditions of all property and rights lost by the erroneous judgment," namely, the erroneous judgment in this case, which expressly authorized AFS to collect on the unlawful detainer judgment. (Code Civ. Proc., § 908.)
2. Merits
Miller Gold contends that the settlement agreement's release of "any and all claims and causes of action" includes the unlawful detainer judgment. AFS contends that the release is limited to claims that were not yet resolved by judgment. Relying solely on the plain meaning of the term "claims," the trial court agreed with AFS. Interpretation of the contract presents a pure question of law, which we review de novo. (Hearn Pacific Corp. v. Second Generation Roofing, Inc. (2016) 247 Cal.App.4th 117, 131.)
In my view, the trial court erred because the term "claims," considered in isolation, is reasonably susceptible of both parties' interpretations. In such circumstances, we would ordinarily have to remand for the trial court to consider extrinsic evidence in order to resolve the ambiguity. (Steller v. Sears, Roebuck & Co. (2010) 189 Cal.App.4th 175, 183.) But because the settlement agreement was the result of mediation and the parties have raised the mediation privilege, such a remand would be futile. Accordingly, the ambiguity must be resolved by interpreting the release within the context of the agreement as a whole, taking into account "the surrounding circumstances under which the parties negotiated or entered into the contract . . . and the subsequent acts and conduct of the parties." (City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1998) 68 Cal.App.4th 445, 474.)
Applying those principles of contract interpretation, I conclude that the original settlement agreement's release of "any and all claims and causes of action" included the unlawful detainer judgment. The parties executed the original settlement agreement on August 3, 2016. The long-form agreement was circulated less than two weeks later, on August 16, and it included a release that was nearly identical, covering "any and all claims of whatever nature." AFS's counsel responded that the long-form agreement needed to be revised in order to "carve[] out" the unlawful detainer judgment from the release. But if AFS intended that the unlawful detainer judgment be carved out from the release, why did AFS not require such an express carve-out from the identically worded release in the original settlement agreement? The belated request for the carve-out is an implicit concession that the release in the original settlement agreement did include the unlawful detainer judgment. In effect, AFS was refusing to execute the same agreement it had already executed unless the agreement was modified to leave the unlawful detainer judgment intact.
Other aspects of the language of the agreement and the surrounding circumstances further support that interpretation. The original settlement agreement provided for a mutual release of "any and all claims and causes of action," but it also called for AFS, Miller Gold, MSI, and Van Veldhuizen to "dismiss all actions and causes of actions [sic] against each other." The dismissal provision concerns the causes of action in the instant case, requiring that they be dismissed. But the release provision—covering both claims and causes of action—is broader and is reasonably interpreted as encompassing the unlawful detainer judgment. AFS's claim for payment on the unsatisfied judgment in the unlawful detainer action was well known to the parties. AFS filed a notice of lien based on the unlawful detainer judgment in the instant case. It would make no sense for the parties to purport to settle their entire dispute but, without saying so, leave untouched one party's claim for payment by another party on an unsatisfied judgment (and lien) arising from the same facts. Moreover, the original settlement agreement called for the parties to "execute full releases with a Civil Code section 1542 waiver." Civil Code section 1542 provides that unknown and unsuspected claims are not covered by a general release. Civil Code section 1542 has nothing to do with any release other than a general release. So the requirement of a Civil Code section 1542 waiver shows that the parties intended the release in the original settlement agreement to be a general release.
I conclude that the trial court erred by determining that the original settlement agreement did not include a release of the unlawful detainer judgment. We should decide the appeal on the merits, reverse, and grant Miller Gold the effective relief to which it is entitled. For all of these reasons, I respectfully dissent.
MENETREZ
J.