Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County No. NC050853, Joseph E. Di Loretto, Judge.
Stroud & Do and James T. Stroud for Plaintiffs and Appellants.
Law Offices of Scott Lee Shabel and Scott Lee Shabel for Defendant and Respondent.
WILLHITE, J.
INTRODUCTION
Section 664.6 provides, in relevant part, that if the “parties to pending litigation stipulate... orally before the court, for settlement of the case,... the court, upon motion, may enter judgment pursuant to the terms of the settlement [and if] requested by the parties,... retain jurisdiction over the parties to enforce the settlement until performance in full” occurs. In this case, the parties, represented by counsel, negotiated a settlement. In a reported proceeding, counsel orally presented the settlement terms to the trial court. The trial court, however, never asked any of the parties if they agreed to the settlement, and none of the party litigants personally registered their assent. Thereafter, the trial court, pursuant to a defense motion and in reliance upon section 664.6, entered an order upon the settlement and proceeded to enforce its various provisions. This appeal challenges the trial court’s orders. We conclude that, under settled case law, the settlement is unenforceable pursuant to section 664.6. We therefore reverse.
All undesignated statutory references are to the Code of Civil Procedure.
FACTUAL AND PROCEDURAL BACKGROUND
This action involves a dispute about who constitutes the Board of Directors of Khmer Buddhist Association (KBA). KBA operates a Buddhist temple (Wat Vipassanaram) in Long Beach which serves the Cambodian community. The temple’s membership is between 250 to 300 individuals.
On February 15, 2008, KBA and nine individuals claiming to be the duly appointed or elected directors of KBA (collectively plaintiffs) filed their complaint for declaratory and injunctive relief which sought, among other things, a judicial determination, pursuant to Corporations Code section 9418, as to who was entitled to be a director. The named defendants are 15 individuals whom plaintiffs alleged improperly took control of KBA through an “unauthorized and illegal election” on January 27. In addition, plaintiffs filed an ex parte application for a temporary restraining order and preliminary injunction to prevent defendants from taking control of the temple’s premises and financial assets.
All subsequent dates refer to 2008 unless stated otherwise.
At a hearing conducted on February 15, attorney James T. Stroud (Stroud) appeared on behalf of all the plaintiffs. Attorney Scott Lee Shabel (Shabel) appeared on behalf of one of the named defendants (Larry Sar, aka Sithal Sar). The transcript of that hearing does not indicate whether any of the plaintiffs or Sar was present. The trial court denied plaintiffs’ request for immediate relief. Shabel indicated his intent to file a cross-complaint on Sar’s behalf which would request injunctive relief and appointment of a receiver. Shabel contended that the temple had approximately $4 million in assets, “mostly cash.” Stroud and Shabel agreed “to meet and confer” about how to proceed and to report back to the court that afternoon.
At the resumed proceedings that afternoon, February 15, the trial court stated: “[The] [r]ecord should... reflect that we’ve had a meeting in chambers with all the attorneys present and we’ve gone over the issues involved in this case. And it’s my understanding that the parties have reached a stipulation in order to resolve this to conduct a new election and so that the church may proceed with its religious functions. [¶] Part of the stipulation [is] if the parties aren’t able to agree, the court will retain jurisdiction to make the appropriate rulings in the future in order to give the process continual momentum. So there’s going to be a stipulation that is going to be stated on the record today, it’s going to be reduced to a formal written agreement the court will sign as an enforceable order.”
Stroud set forth the terms of stipulation. It required creation of a three-person commission which would take charge of KBA finances, retain a property management company and an accounting firm, and determine membership qualifications for the temple in preparation for a new election of directors. Each side was to appoint one member. Those two appointees were to select the third, but if they could not reach agreement, the court was to make the selection from a list of nominees provided by the parties. The stipulation further provided that “the people that claimed victory in [the January 27] election will not attempt to exercise authority as a board or claim to be a board member” and that the present board “won’t attempt to amend the bylaws or exercise any powers other than operating the association in the ordinary course of business as it’s been conducted.” Shabel stated that Stroud’s representation of the stipulation’s provisions was “pretty accurate and inclusive.” Although the record (a reporter’s transcript of and minute order for February 15) does not reflect whether any of the plaintiffs or defendants was present during these proceedings when counsel set forth the provisions of the stipulation, two of the plaintiffs later admitted that they had been there.
At a subsequent hearing conducted to enforce the stipulation, one of the named plaintiffs conceded that he had been present on February 15 along with another plaintiff; Stroud agreed with that concession.
The trial court directed Stroud to prepare a written stipulation for submission to the court for signature but noted “[t]hat doesn’t mean that everything you’ve stipulated now is not in full force and effect; this is just memorialization of what you just agreed to based upon your representations that you have the authority to do so, correct?” Stroud and Shabel each responded: “Correct.”
In the following weeks, the parties began the process of selecting the three-person commission to manage KBA until a new election. However, the parties were unable to agree about the wording of the stipulation. Consequently, on April 15, the trial court ordered them to meet and confer by April 25 in regard to the stipulation.
On April 23, plaintiffs filed a request to dismiss the complaint without prejudice.
On May 2, defendant Sar filed an application requesting the trial court to enter an order on the oral stipulation, as presented at the afternoon hearing on February 15, based upon the authority of section 664.6. Alternatively, he asked the court to appoint a receiver, vacate plaintiffs’ dismissal of the complaint and permit him to file a cross-complaint. The proposed cross-complaint sought judicial validation of the January 27 election and equitable relief, and also alleged several causes of action. The court set a hearing on May 9 for the purpose of entering an order pursuant to the oral stipulation and ordered Stroud to appear.
The pleading stated that Sar brought the application “as Chairman representative of the nine (9) Khmer Buddhist Association members elected to the Board of Directors at a meeting duly held on January 27, 2008.”
On May 9, the court conducted another hearing. The clerk of the court informed the judge that “Stroud called and indicated that he was ordered not to appear by his principals.” The court restated the procedural history of the case, including the presentation of the oral stipulation on February 15. The court found that under section 664.6, it retained jurisdiction over the matter. The court reviewed a proposed version of the oral stipulation presented by defendant, found that it complied with the February 15 oral stipulation, and signed it. The court also set aside plaintiffs’ April 23 dismissal of their complaint and set the matter for status review.
Plaintiffs, represented by new counsel, subsequently filed a motion to set aside the orders entering the oral stipulation as a court order and vacating plaintiffs’ dismissal of their action. They argued that they were not bound by the oral stipulation of February 15 because: (1) Stroud, who was no longer their attorney, had not been authorized to enter into the oral stipulation, and (2) none of them had individually consented to the stipulation or the trial court’s retention of jurisdiction under section 664.6. As for the dismissal of their action, they contended that they had an absolute right to terminate their lawsuit.
To establish lack of authority, plaintiffs proffered two declarations. The first was from Stroud. He averred, in relevant part, that while he had “actual authority” to discuss settlement, he had “no authority” “to enter into or agree to a settlement” or “to stipulate to the utilization of... section 664.6 as an enforcement mechanism for any interim, actual, or contemplated settlement.” The second declaration was from one of the named plaintiffs (Siphann Tith) who likewise averred that Stroud had authority only to discuss, but not to enter into, a settlement.
On May 23, the court conducted a hearing on plaintiffs’ application and rejected their argument that they were not bound by the oral stipulation entered into by counsel on February 15. The court characterized the February 15 proceedings in the following way:
“And there were both sides here. There were probably 100 people on one side and 50 on the other side. Everybody, to my knowledge, who was listed on the complaint was present. [¶]... [¶]
“The court instructed the attorneys to go into the jury room and try to reach some kind of stipulations upon which the court can make a ruling....
“And I know the attorneys conferred with their clients, because I physically saw them doing it. And then both of the attorneys indicated that they had reached a resolution of all these issues, and we entered into a settlement agreement.
“The settlement agreement was on the record, and all of the parties were present, physically present in this courtroom, both sides. And no objection was ever stated by any of the parties. [¶]... [¶]
“It’s not incumbent upon this court to ask every member – probably you had 50 present – if they agreed to it. They were all here. They knew what was going on.
“[¶]... The Board of Directors [of KBA] were physically in this courtroom.... [They] were right here and knew everything that was going on. [¶]... [¶]
“It’s very obvious to this court that there was in fact a settlement; that there were probably 35 or 40 people here at the time on one side and maybe at least that much on the other side. It was not practical for the court to inquire of everybody who was present whether or not they agreed to the settlement.
“They were here to object to it. The attorneys had met with their clients. This procedure lasted over two hours until the final settlement was reached. Both the attorneys participated in the oral presentation of the terms of the settlement. [¶]... [¶]
“It seems both disingenuous and a fraud on this court for the party then to come back and say, wait a minute, judge, you didn’t ask every single one of us on the record whether or not we agreed to it even though we were physically present in the courtroom and heard everything. No objections were ever raised as to the settlement. And thereafter, all the parties started direct participation to fulfill the terms of the settlement.” (Italics added.)
The court therefore denied plaintiffs’ request to set aside its two orders.
On July 2, the trial court appointed a receiver pursuant to defendant’s application. The appointment order modified provisions of the order entered on the stipulation to the extent necessary to permit the receiver to perform his obligations but otherwise directed that the May 9 order remain in full force and effect.
This appeal follows, challenging the orders of May 9 and July 2. (See Doran v. Magan (1999) 76 Cal.App.4th 1287, 1293 [order granting a motion to enforce a settlement pursuant to section 664.6 is appealable].)
Plaintiffs have filed three petitions for extraordinary relief. The first contested the trial court’s order signing the stipulation and vacating their dismissal of the lawsuit. (Khmer Buddhist Assoc., et. al. v. Superior Court – B208187.) The second and third challenged the trial court’s authority to enforce specific provisions of the stipulation. (Khmer Buddhist Assoc., et. al. v. Superior Court – B208605; Khmer Buddhist Assoc., et. al. v. Superior Court – B208846.) We summarily denied each petition. In another appeal (Khmer Buddhist Assoc., et. al. v. Superior Court – B214533), plaintiffs challenge an order entered by the trial court on January 30, 2009 confirming the election of nine individuals to KBA’s board of directors.
DISCUSSION
A. ENFORCEMENT OF THE STIPULATION
We fully understand the trial court’s frustration in dealing with what it concluded was gamesmanship on the part of plaintiffs. Nor do we condone such conduct. But under settled authority, the court lacked the power to enforce the oral stipulation of February 15 through the summary procedure of section 664.6.
Section 664.6 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.”
The Legislature enacted section 664.6 to provide a summary procedure to enforce settlement agreements without the need to file a new lawsuit. (Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 809.) “Because of its summary nature, strict compliance with the requirements of section 664.6 is prerequisite to invoking the power of the court to impose a settlement agreement.” (Sully-Miller Contracting Co. v. Gledson/Cashman Construction, Inc. (2002) 103 Cal.App.4th 30, 37.) We review de novo the question whether the statutory requirements of section 664.6 were met. (Conservatorship of McElroy (2002) 104 Cal.App.4th 536, 544.)
This statutory procedure is not the exclusive method to enforce a settlement. Other procedures include a summary judgment motion, a separate suit in equity for specific enforcement of the settlement agreement, and an amendment to the pleading(s) in the action. (Levy v. Superior Court (1995) 10 Cal.4th 578, 581 and 586, fn. 5; Harris v. Rudin, Richman & Appel (1999) 74 Cal.App.4th 299, 306.)
The issue on this appeal is whether the parties entered into an oral settlement before the trial court, even though the plaintiffs (nine individuals and one association) did not expressly assent to the agreement. The trial court found that plaintiffs’ assent could reasonably be inferred from their participation in the discussions leading to the settlement, their failure to object when the terms of the settlement were stated in court, and their later participation in trying to implement the settlement terms. We disagree.
The seminal decision is Levy v. Superior Court, supra, 10 Cal.4th 578 (Levy). There, a settlement agreement was signed by the litigant’s attorney, not by the litigant himself. The issue was whether the settlement was enforceable under section 664.6. The Supreme Court concluded that the term “parties,” as used in section 664.6, means the litigants themselves, not their counsel of record. (Id. at p. 580.) The court reasoned that the “litigants’ direct participation [by stipulating to the settlement in writing or orally before the court] tends to ensure that the settlement is the result of their mature reflection and deliberate assent. This protects the parties against hasty and improvident settlement agreements by impressing upon them the seriousness and finality of the decision to settle, and minimizes the possibility of conflicting interpretations of the settlement. [Citations.] It also protects parties from impairment of their substantial rights without their knowledge and consent. [Citation.]” (Id. at p. 585, fn. omitted, italics added.) Because the party litigant had not signed the settlement, it was not enforceable under section 664.6. (But see fn. 7, ante.)
Johnson v. Department of Corrections (1995) 38 Cal.App.4th 1700 (Johnson) applied Levy’s interpretation of section 664.6 to an oral settlement agreement. In Johnson, the parties, represented by counsel, engaged in extensive settlement negotiations under the trial court’s supervision and reached an agreement. When the trial court placed the settlement terms on the record, the plaintiff expressed his disagreement with one of the terms. The plaintiff’s attorney stated that he had been authorized by his client to settle on all of the terms outlined by the court, including the one his client now rejected. Defense counsel moved, pursuant to section 664.6, to enforce the settlement on the terms set forth by the court. The trial court granted the motion, finding that the plaintiff’s attorney had been authorized to enter into the agreement. (Id. at pp. 1703-1705.)
On appeal, the plaintiff contended the settlement agreement was not enforceable under section 664.6 because “he never personally voiced his acceptance of [it] to the court.” (Johnson, supra, 38 Cal.App.4th at p. 1706.) Relying upon Levy, the court of appeal agreed. It concluded that because the “plaintiff never personally informed the court that he accepted the terms of [the] agreement[,]” it was not enforceable under section 664.6. (Id. at p. 1708.) The reviewing court specifically rejected the argument that because the plaintiff was involved in the settlement negotiations, his attorney’s verbal acceptance of the agreement rendered it enforceable under the statutory provision. (Id. at p. 1709.) It reasoned that Levy’s requirement that the litigants directly participate in the settlement means that the “the litigant must personally acknowledge the settlement to the court.” (Ibid; see also Murphy v. Padilla (1996) 42 Cal.App.4th 707, 716 [if the party “did not personally agree to the alleged oral settlement before [the court],” it cannot be enforced under section 664.6].)
Conservatorship of McElroy, supra, 104 Cal.App.4th 536 (McElroy) also involved an oral settlement agreement. There, the parties and counsel were present when the settlement’s terms were presented to the court in a proceeding that was both transcribed and videotaped. One of the parties subsequently claimed she had never personally agreed to the settlement. The transcript and videotape established that when asked by one of the attorneys “‘Is that your understanding [of the agreement’s terms]?’”, the party simply nodded her head. (Id. at p. 551.) The trial court found the head nod sufficient to establish the party’s assent to the agreement and therefore enforced the settlement pursuant to section 664.6. (Id. at pp. 546-548.)
On appeal, the party contended that the nod of her head was insufficient to satisfy the statutory requirement that she give consent “orally before the court” (§ 664.6). The court of appeal agreed. It reasoned that the legislative goals of requiring personal assent (as explained in Levy and Johnson, supra) “would not be served by an interpretation that equates a nod of the head with oral consent. No stretch of the judicial imagination can make it so.... [H]ead movements are too ambiguous to demonstrate assent and the ambiguity produces the litigation the statute was designed to avoid.... [¶] The words of [section 664.6], ‘orally before the court,’ are clear and unambiguous.... [¶] It would be torturing the English language, the statutory language, and the intent of the Legislature to interpret a nod as an oral agreement.... More than an indication of assent is required. Unambiguous assent, expressed orally, is required in order to ‘minimize[] the possibility of conflicting interpretations of the settlement. [Citations.]’ [Citation.] A nod simply does not comply with the statutory requirement of oral consent.” (McElroy, supra, 104 Cal.App.4th at pp. 550-551.) In addition, the appellate court faulted the trial court for failing to ask any of the parties whether he or she understood the settlement’s terms and agreed to be bound by them. (Id. at pp. 551-552.)
Based upon the above precedents, we conclude the February 15 stipulation described orally by counsel is not enforceable under section 664.6. During the February 15 proceedings, the trial court never asked plaintiffs whether they understood the stipulation’s terms or if they agreed to those terms. At no point did any of the plaintiffs affirmatively express assent to the stipulation. Indeed, the record fails to establish that all the plaintiffs were personally present in court when counsel announced the settlement terms. Consequently, the record is insufficient to establish that plaintiffs, “orally before the court,” agreed to the stipulation. Plaintiffs’ participation in the negotiations leading to the stipulation does not change that result. Johnson makes clear that a plaintiff’s involvement in settlement negotiations is insufficient to render an agreement enforceable under section 664.6. “[T]he litigant must personally acknowledge the settlement to the court.” (Johnson, supra, 38 Cal.App.4th at p. 1709, italics added.) Furthermore, even if we were to assume (as the trial court did) that all plaintiffs were present on February 15 and fluent in English, their failure to object does not satisfy the statutory mandate. Given McElroy’s holding that a party’s nod of the head in response to a question is too ambiguous to establish assent, a party’s silence after counsel sets forth the stipulation’s terms is even more ambiguous. To infer assent from such silence requires multiple inferences: the party heard everything counsel said, understood what counsel said, and recognized that if he or she did not agree, an objection was expected, if not required, to register that disagreement. (Cf. Fiege v. Cooke (2004) 125 Cal.App.4th 1350, 1355-1356 [requirements of section 664.6 satisfied because representatives of the settling insurance companies were present when trial court placed the settlement terms on the record and asked if “anybody” disagreed or had additions, and none of them objected].) Lastly, the trial court’s belief that it was not obligated to ask each plaintiff (nine individuals and one association) about agreement with the stipulation is at odds with McElroy’s observation about a trial court’s responsibilities to insure understanding of an agreement with a settlement.
Defendant’s arguments to the contrary are not persuasive.
Only one defendant is a respondent on this appeal: Sar who appeared through counsel in the trial court proceedings. (See fn. 4, ante.)
First, defendant urges that plaintiffs subsequently ratified the stipulation, thereby permitting its enforcement under section 664.6. Ratification is a principle of the law of agency. (Civ. Code, §§ 2310-2314.) It “is the approval or sanctioning of some deed or act.” (Danning v. Bank of America (1984) 151 Cal.App.3d 961, 973.) Ratification is based upon an action taken by the principal (here, plaintiffs) which results in the principal being bound by an unauthorized act of an agent (here, their attorney Stroud). (3 Witkin, Summary of Cal. Law (10th ed. 2005) Agency and Employment, § 139, p. 184.)
Defendant’s ratification theory relies upon two circumstances. The first is that following the February 15 hearing, plaintiffs through their counsel participated in steps to implement the stipulation’s provision regarding appointment of the three-person commission to govern the KBA until a new board of directors was elected. The second is that plaintiffs personally participated in a hearing held in late 2008 by giving testimony. That hearing, conducted after this appeal was filed, addressed issues involving plaintiffs’ conduct as directors and the number of new KBA directors to be elected.
Defendant’s ratification argument fails under Levy and its progeny, which prevent “rel[iance] upon agency principles to satisfy the requirements of section 664.6.” (Murphy v. Padilla, supra, 42 Cal.App.4th at p. 716; see also Gauss v. GAF Corp. (2002) 103 Cal.App.4th 1110, 1119 [precluding the use of a traditional agency analysis helps to prevent section 664.6 from becoming a tool of abuse].) As stated in Murphy, section 664.6’s summary procedure forbids traditional agency analysis, under which “‘“the client as principal is bound by the acts of the attorney-agent within the scope of his actual authority (express or implied) or his apparent or ostensible authority; or by unauthorized acts ratified by the client.”’” (Murphy v. Padilla, supra, 42 Cal.App.4th at p. 716, italics added.) Rather, section 664.6 requires the party-litigant’s direct assent to the settlement, in writing or orally before the court. (See fn. 7, ante.)
We note, however, that although an agency analysis does not apply under section 664.6, defendant here is not precluded from relying upon a ratification theory if he seeks to enforce the stipulation on another basis such as a separate suit in equity. (See fn. 7, ante.)
Next, defendant relies upon the recent decision in 1538 Cahuenga Partners LLC v. Turmeko Properties, Inc. (July 31, 2009, B209548) ___Cal.App.4th___ to urge the oral settlement was enforceable under section 664.6. Defendant’s reliance is misplaced and, in fact, the opinion supports our conclusion because it reinforces the principle that the party-litigant’s direct assent to the settlement is required for enforcement under section 664.6. There, the party stated orally before the court in an unreported chambers conference that it agreed with a proposed settlement. Thereafter, the settlement terms were placed on the record in court. The attorney representing the party stated that he accepted them on behalf of his client who had left the courtroom and could not be located. The court responded that it had reviewed the terms of the settlement with the party and counsel in chambers and that the party understood them and agreed. Subsequently, the party attempted to avoid enforcement of the settlement under section 664.6 by claiming it had not consented to its terms on the record. Relying upon the express language of section 664.6, the appellate court rejected the contention. It explained: “[Section 664.6] does not require that the party to be bound consent to the settlement ‘on the record,’ only that the party consent to it ‘orally before the court.’... [The party’s] oral statement to the court in chambers that he understood and agreed to the terms of the settlement satisfied the requirement that the party stipulate to the settlement ‘orally before the court.’” (Id. at p. ___.) Here, of course, there never was oral consent to the settlement by any of the plaintiffs, either in chambers or on the record. Consequently, the decision in Cahuenga Partners does not support defendant’s contention that the settlement is enforceable under section 664.6.
For purposes of clarity, we use the singular “the party” to refer to the limited liability corporation and its principal, both of which were parties to the settlement. No issue was raised about the principal’s authority to bind both of them to the settlement.
Based on the requirements of section 664.6, we also find unpersuasive defendant’s argument that the doctrine of equitable estoppel permits enforcement of the stipulation. Equitable estoppel prevents a party from asserting a right when it would be unconscionable to do so. (City of Long Beach v. Mansell (1970) 3 Cal.3d 462, 488-489.) Defendant argues that, in reliance upon the February 15 representation of plaintiffs’ counsel that plaintiffs would abide by the stipulation, defendant did not file “his Cross-Complaint, since the relief prayed for had been stipulated to by the parties.... [His] detrimental reliance, in holding his Cross-Complaint in abeyance, was clearly reasonable in light of [plaintiffs] entering into the Stipulated Settlement and their subsequent conduct through April 15, 2008.”
As in his ratification argument, defendant overlooks the fact that in the enforcement procedure of section 664.6, a representation by counsel that the client assents to the settlement is insufficient. Section 664.6 requires the direct participation of the litigants through their personal assent in writing or orally before the court. Thus, insofar as defendant relied on plaintiffs’ counsel’s representations in believing that the settlement was summarily enforceable under section 664.6, that reliance was unreasonable as a matter of law. (See Life v. County of Los Angeles (1991) 227 Cal.App.3d 894, 902 [County not estopped to raise government tort claims statute, because in light of statutory and case law, attorney could not reasonably rely on representation of medical records clerk that claim should be filed with hospital legal department rather than the County].)
In holding that equitable estoppel does not preclude plaintiffs from objecting to noncompliance with section 664.6, we express no opinion on whether equitable estoppel might apply should defendant seek to enforce the settlement on a theory other than section 664.6.
Lastly, defendant urges that even if the stipulated settlement cannot be enforced, the trial court’s May 9 and July 2 orders (as well as subsequent orders not subjects of this appeal) can be upheld “under the ‘harmless error’ rule.” Defendant claims that since the trial court vacated plaintiffs’ dismissal of their action, “[t]he case was then re-opened, and the Court was thus empowered to craft its equitable remedies for the ongoing improper conduct of the [plaintiffs]. Each of the Court’s... Orders are consistent with, and flow from, [plaintiffs’] own Complaint for Declaratory Relief.” The argument is not persuasive for two separate reasons. The first is that, as will be explained below, the trial court erred in vacating plaintiff’s dismissal of their complaint. Hence, there was no pleading to give the trial court jurisdiction. The second is that the trial court’s comments at the relevant hearings make clear that it based its orders upon the premise that it could enforce the stipulation.
For instance, at the May 2 hearing, the court stated, after noting that plaintiff had dismissed their action: “So the court still has jurisdiction over this matter pursuant to 664.6 of the Code of Civil Procedure. And under the circumstances, so that it is not necessary to start the litigation all over again, the court still has jurisdiction over the settlement.... The court is going to enforce the terms of the settlement.”
In sum, the trial court erred in enforcing the oral stipulation pursuant to the summary procedure afforded by section 664.6. We therefore reverse its May 9 order entering the stipulation as an order of the court. In addition, we reverse its July 2 order appointing a receiver because this order was made to enforce the stipulation. (See fn. 12, ante.)
B. PLAINTIFFS’ DISMISSAL OF THEIR COMPLAINT
Section 581, subdivision (b) provides: “An action may be dismissed in any of the following circumstances: [¶] (1) With or without prejudice, upon written request of the plaintiff to the clerk... at any time before the actual commencement of trial.” This provision gives a plaintiff the absolute right to a pretrial dismissal as long as the action has not “‘proceeded to a determinative adjudication, or to a decision that is tantamount to an adjudication.’” (Mossanen v. Monfared (2000) 77 Cal.App.4th 1402, 1409.) “Neither the clerk nor the trial court has any discretion in the matter. [Citation.] Numerous cases note that voluntary dismissal of a lawsuit terminates the trial court’s jurisdiction over the matter.” (O’Dell v. Freightliner Corp. (1992) 10 Cal.App.4th 645, 659.)
Here, plaintiffs filed their request for dismissal on April 23, a little more than two months after they had filed their complaint. At that point, the trial court had not ruled upon a question of law or made any determinative adjudication. Plaintiffs therefore had a right to dismiss their action. As a result, the trial court erred on May 9 when it vacated the dismissal.
Defendant attempts to avoid this conclusion with two arguments. First, he urges there had been a determinative adjudication because on February 15 the trial court stated that it would retain jurisdiction to enforce the stipulation. The argument fails. The trial court did not make a ruling adjudicating a disputed issue or resolving the case. At most, it made an erroneous observation about its authority under the oral stipulation. Consequently, plaintiffs still retained the right to dismiss. Next, defendant relies upon subdivision (i) of section 581 which bars a dismissal under subdivision (b)(1) “where affirmative relief has been sought by the cross-complaint of a defendant.” The flaw with this argument is obvious: defendant never filed a cross-complaint; he had only expressed an intent to do so.
In sum, the trial court erred in granting defendant’s motion to vacate plaintiffs’ dismissal of the action.
DISPOSITION
The trial court’s May 9 orders entering the stipulation as an enforceable order and vacating plaintiffs’ dismissal of their lawsuit are reversed; in addition, the trial court’s July 2 order appointing a receiver is reversed. The parties are to bear their own costs on appeal.
We concur: EPSTEIN, P. J., SUZUKAWA, J.
A declaration filed in the trial court in support of the application for receiver averred that on April 1, plaintiffs had “filed two additional actions against the defendant herein, or some of them, to wit, Case Numbers NC 051074 and NC 051075, respectively. The complaints in these cases arise out of the same nucleus of operative fact as does this case.” If those actions deal with the same disputes covered by the stipulation, defendant may be able to raise the existence of the settlement in those actions.
At the June 13 hearing, the court reiterated that at the May 9 hearing, it simply was “enforcing the terms of a settlement that the parties had agreed to.... [¶] The settlement is enforceable, the court has continuing jurisdiction.”
And at the July 2 hearing held in regard to the request to appoint a receiver, the judge stated that “the only way the court can now enforce the [May 9] order adequately to the agreement you entered into is this step. [¶]... [¶] At this point in time, I’m appointing the receiver for the purposes of carrying out the agreement that the parties reached.”