Opinion
B199596
8-29-2008
TU MY TONG, Plaintiff and Appellant, v. WILLIAM H. BROWNSTEIN & ASSOCIATES et al., Defendants and Respondents.
Law Offices of Gregg A. Farley and Gregg A. Farley for Plaintiff and Appellant. Berman, Berman & Berman, James W. McCord and William M. Aitken for Defendants and Respondents.
Not to be Published
Tu My Tong appeals from an order granting respondents motion to enforce a settlement agreement. (See Code Civ. Proc., § 664.6.) We affirm.
FACTS
In June 2005, Tong sued William H. Brownstein and William H. Brownstein & Associates (hereinafter, "Brownstein"), her former bankruptcy attorneys, for breach of fiduciary duties. The matter was set for trial on February 20, 2007.
The record on appeal does not include Tongs complaint, but other portions of the record set forth these facts.
On January 31, 2007, the parties attended a pretrial conference before Judge William Fahey. At that time, Tong was represented by her fifth attorney, Fred Rucker. At the end of the pretrial conference, Judge Fahey ordered the parties to attend a mandatory settlement conference (hereinafter, "MSC") on February 7, 2007.
Judge Fahey asked Mr. Rucker whether Ms. Tong had "occasional difficulty with the English language," and Mr. Rucker indicated she did. The court ordered Mr. Rucker to have a Vietnamese interpreter present at the MSC.
The MSC was conducted before Judge Alice Altoon on February 16, 2007. At its conclusion, the parties and their respective lawyers placed a settlement on the record. The following colloquy ensued:
"The Court: . . . [W]e have been in the middle of a mandatory settlement conference. And my understanding is that we have come to a settlement in this matter. [¶] And I dont know if somebody wants to put the settlement on the record.
Mr. McCord: Ill be happy to. [¶] The parties have agreed that the matter will be settled in the total sum of $25,000 to be paid on behalf of the defendant to the plaintiff. [¶] We have agreed that payment will be made by the 28th of this month, contingent only upon timely receipt of an executed W9 form from the plaintiff. [¶] We have further agreed that the terms and conditions of this settlement will remain confidential as between the parties, and that no disclosure of the terms and conditions may be made other than as either of the parties may be compelled to do so by operation of law. [¶] We have agreed that the settlement of this matter does not constitute an admission of liability or wrongdoing on any part. [¶] Mr. Brownstein has given his consent to the settlement. [¶] We have agreed that the terms and conditions of section 1542 of the California Civil Code shall be operative in this matter. [¶] We have further agreed that the check or draft will be made payable to the trust account of Mr. Rucker. Mr. Rucker has graciously agreed that he will see to it that all appropriate lien claims are resolved before disbursing funds to his client.
Mr. Rucker: In addition to those terms, your Honor, we have an agreement that while we do anticipate that there will be standard form written mutual release agreements to be executed by the parties, that this is a final and complete settlement and that its enforceable pursuant to [Code of Civil Procedure] section 664.6. . . . [¶] . . .[¶] Mr. Rucker: And then just one other term, your Honor, which is that, other than the sums previously recited to be paid by defendant to plaintiff, that all parties will bear their own fees and costs incurred in connection with this litigation.
The Court: All right. [¶] And Ms. Tong, youve heard the terms and conditions. Do you agree to that, maam?
Ms. Tong: Yes, your Honor.
The Court: And, Mr. Brownstein, youve heard the terms and conditions and youve agreed to those.
Mr. Brownstein: Yes, your Honor."
Four days later, Tong filed a handwritten pro se "complaint" requesting "cancellation" of the settlement agreement, claiming she had been forced into it. Tong contended she told the judge and her lawyer that she wanted to wait for the deposition of her expert before deciding whether to settle the case. The judge and lawyer, she claimed, told her there was no need for the deposition. Tong also said she needed a translator at the MSC. Tong supported her motion with a copy of a letter she purportedly sent to her lawyer, Mr. Rucker. In it, she said she "just want to cancelled [sic] it [the settlement]."
On March 6, 2007, Tong filed a lengthy handwritten ex parte application indicating she opposed the settlement and requesting a jury trial. She reiterated that her case should not have been settled without an expert to evaluate the case, and that she needed a translator at the hearing. She added that Mr. Rucker, Mr. McCord and another attorney concealed facts from her before the settlement. Judge Fahey indicated he was not prepared to rule on the motion without a transcript of the settlement hearing and continued the matter to March 19, 2007.
The motion set also forth a lengthy discussion of a separate case where her property was threatened with foreclosure.
On March 8, 2007, Brownstein filed a motion to enforce the settlement agreement. At the same time, Brownstein filed an opposition to Tongs ex parte motion to vacate the settlement agreement. In response, Tong filed two typewritten documents: a memorandum of points and authorities in opposition to defendants motion to enforce the settlement; and a memorandum of points and authorities in support of her motion to vacate the settlement agreement. In them, she argued for the first time that she did not agree to the terms of the settlement.
The parties appeared before Judge Fahey on March 19, 2007. Judge Fahey indicated he read all the papers and granted Brownsteins motion to enforce the settlement.
On March 21, 2007, Tong filed a second ex parte application. Judge Fahey deemed it to be a motion for reconsideration. In it, Tong contended that her settlement was not fair because Mr. Rucker was substituted out as her attorney before the MSC took place and therefore could not have represented her. Judge Fahey pointed out that, in fact, the substitution of attorney was not filed with the court until February 22, 2007, six days after the settlement conference. He took the matter under submission and, on April 3, 2007, signed and entered a formal order enforcing the settlement agreement.
Tong filed a timely notice of appeal.
DISCUSSION
I. The Trial Court Properly Enforced The Settlement Agreement
Tong contends the settlement agreement is not valid under Code of Civil Procedure section 664.6. Specifically, she claims the record does not reflect her assent to the terms of the settlement and that there is insubstantial evidence to support Judge Faheys finding that she did because Tong needed a Vietnamese interpreter and did not have one. We disagree.
Code of Civil Procedure section 664.6 provides, in pertinent part:
"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. . . ."
The trial courts determination of whether the parties entered into a binding settlement agreement is reviewed for substantial evidence. (In re Marriage of Assemi (1994) 7 Cal.4th 896, 911.) The determination of whether the statutory requirements were met, however, is a question of law. (Conservatorship of McElroy (2002) 104 Cal.App.4th 536, 544 (McElroy).) We turn first to the question of law.
A. The Statutory Requirements for a Settlement Agreement were Met
In In re Marriage of Assemi, supra, 7 Cal.4th 896, the Supreme Court articulated the elements necessary for a valid oral settlement agreement under section 664.6. First, the material terms of the settlement must have been explicitly defined. Second, the judicial officer must have questioned the parties about their understanding of the settlement. Third, the parties must have expressly acknowledged their understanding of and agreement to the settlement. (Id. at p. 911.) To be clear, the parties assent need not be in the Reporters Transcript. While Section 664.6 "used to contain the requirement that an oral settlement must be `orally on the record before the court. The on the record requirement was removed via 1994 legislation. [Citation.]" (Fiege v. Cooke (2004) 125 Cal.App.4th 1350, 1356, emphasis original.)
Here, Tong concedes that the terms and conditions of the settlement agreement were placed on the record. Tong also admits the record shows that trial court asked her, "[Y]ouve heard the terms and conditions. Do you agree to that, maam?" and that she answered, "Yes." Tong claims, however, she did not actually agree to the settlement. She says her "yes" should be taken only to mean, "Yes, Ive heard the terms and conditions," and not, "Yes, I agree to the terms and conditions."
We cannot accept Tongs proposition. Judge Altoon was simply stating a fact when she said Tong heard the terms and conditions of the settlement. Tong had spent the better part of a day discussing a settlement and was present when the recitation of the terms of the settlement was made and obviously heard them. Given this context, the comment by Judge Altoon that Tong heard the terms and conditions of the settlement could only be understood as a declaratory statement, not a question. When Judge Altoon then specifically queried whether Tong agreed to the terms. Tongs unequivocal response was "yes."
When the settlement was placed on the record, Tong was represented by counsel who assisted in reading the terms of the settlement into the record. Tong did not make any objection or request a clarification when Judge Altoon inquired of her.
In addition, Tongs claim is suspect in light of the numerous theories she has urged to escape the settlement. For example, in Tongs initial pro se "complaint" to set aside the settlement she claimed she was forced by counsel and the court to settle the case. She also indicated she "just really want [sic] to cancel it [the settlement]." When Tong filed her second motion to set aside the settlement, she argued that the attorneys withheld facts from her. After these arguments were unavailing, Tong claimed that the settlement should be set aside because her attorney had been removed from the case — a proposition proven to be factually inaccurate.
It is true that Tongs prior filings have alleged in a general way that she needed a translator, but they did not initially argue that she understood Judge Altoons question only to be asking whether she understood the terms of the settlement agreement not whether she agreed to them. In fact, this argument was first filed in an opposition that Tong admits was "ghost-written with the informal assistance of legal counsel other than Mr. Rucker." Significantly, it requires a thorough comprehension of the English language, one Tong complains she does not have, to gather from her dialogue with Judge Altoon that she only agreed to understanding the terms of the settlement and did not agree to their content. Accordingly, we reject this argument and find the elements of a valid settlement agreement were present.
The cases cited by Tong — Levy v. Superior Court (1995) 10 Cal.4th 578; Johnson v. Department of Corrections (1995) 38 Cal.App.4th 1700; and Murphy v. Padilla (1996) 42 Cal.App.4th 707 — stand for the proposition that the parties to a settlement agreement must unambiguously agree to its terms. We of course agree with this rule, but do not find it helpful to Tong in the current case because the record reflects she was asked whether she understood and agreed to the terms of the settlement and indicated orally she did.
Another case upon which appellant relies, McElroy, supra, 104 Cal.App.4th 536, is similarly unavailing. There, the court held that a nod of the head is insufficient to show agreement to a settlement. Those facts are wholly different than the situation at bar, where Tong verbally indicated her agreement. (Id. at p. 547.)
B. Substantial evidence supports the trial courts finding that the parties entered into a binding settlement agreement
Turning to the second prong of our analysis, we find Tongs contention that the trial courts findings were not supported by the evidence lacks merit. Tong first brings up a procedural issue regarding Judge Faheys findings. Citing McElroy, supra, 104 Cal.App.4th 536, Tong suggests the substantial evidence rule should not apply to this case because when Judge Fahey made his findings he did so by merely reviewing a transcript of the settlement proceeding made by Judge Altoon, which we can review as readily as he did. Her factual premise is wrong. Judge Faheys finding that there was a valid settlement does not rely simply on the record of the settlement, but on the entire proceedings before him. The record of Judge Faheys ruling is set forth below and makes this clear. More importantly, though, the McElroy case Tong relies on stands for the exact opposite proposition. In McElroy, the Court of Appeal decided it was appropriate to apply the substantial evidence standard of review even though the record included a video tapped recording of the proceedings. (Id. at pp. 545-546.)
Further, Judge Faheys finding that Tong understood she was agreeing to settle her case for $25,000 is supported by the record. Judge Fahey made a thorough review of the record and stated:
"The Court: The record reflects, and I think counsel reported that Judge Altoon spent many hours with the parties. Judge Altoon, of course, is a very competent and experienced jurist, and Im sure she would have noted during the proceedings had there been a problem with plaintiffs ability to understand what was occurring during the settlement conference. [¶] Ive carefully reviewed the file, including the transcript of the settlement, and theres no indication that Judge Altoon believed that there was any language difficulty. [¶] Further, the transcript reflects that the plaintiff agreed to settle the case. She was then represented by counsel, and there was no indication by the plaintiff or her attorney at that time that the plaintiff could not understand the proceedings and the settlement terms. [¶] Finally, I would note that the plaintiff has filed a declaration, and it is in English. Theres no indication that a translator was used, and I feel confident, based upon all of these facts, that the plaintiff, Ms. Tong, knowingly and intelligently understood the settlement of this case, including the posture of the case, and therefore, I think the settlement should be enforced."
The trial court found that Tong understood English sufficiently to bind her to the settlement agreement, and we agree. In our view the record does not show a lack of knowledge at the time of settlement; it shows "settlers remorse" after the fact.
II. Appellants Tongs Argument that the Trial Court Failed to Rule on
a Motion has been Waived.
Tong contends the trial court abused its discretion by failing to address her argument that the settlement should have been set aside pursuant to Code of Civil Procedure section 473, subdivision (b). This issue has been waived for purposes of appellate review.
Tong claims she raised these issues in her ex parte papers to undo the settlement which she filed on March 6, 2007. However, California Rules of Court, Rule 3.1201, subdivision (1) requires that an ex parte application state the nature of relief requested. The ex parte application contained a lengthy heading, but it made no reference to Code of Civil Procedure section 473, subdivision (b). Accordingly, Tong failed to direct the trial court to rule on this matter. Tong also asserts she raised this issue in her opposition to Brownsteins motion to enforce the settlement agreement which she filed with the trial court on March 14, 2007. Tongs opposition to Brownsteins motion to enforce the settlement rested on her assertion that she had not agreed to the settlement; she did not argue that she had entered the settlement as the result of her mistake or inadvertence. Because Tong failed to properly bring the alleged issue to the trial courts attention in the first instance, she cannot seek review of the issue here now. (Imperial Bank v. Pim Electric, Inc. (1995) 33 Cal.App.4th 540, 546.)
DISPOSITION
The judgment is affirmed. Respondents are to recover their costs on appeal.
We concur:
COOPER, P. J.
FLIER, J.