Opinion
A118305
4-28-2008
WYMAC CAPITAL, INC., Plaintiff and Respondent, v. SHANNON ANDERSON et al., Defendants; DAVID R. MEDLIN, Objector and Appellant.
NOT TO BE PUBLISHED
Attorney David R. Medlin appeals from two orders entered pursuant to Code of Civil Procedure section 664.6 directing him to comply with the provisions of a settlement agreement. The dispute is an outgrowth of an order disqualifying Medlin from representing certain parties in the litigation that this court subsequently determined was wrongly entered. Medlin contends that he is not bound by the terms of the settlement agreement, which require him to return documents obtained in discovery, because he did not sign the agreement or agree in open court to be personally bound by its terms. We conclude that summary enforcement under section 664.6 was improper absent Medlins express consent to the agreement. Accordingly, we reverse the order requiring Medlin to comply with the terms of the settlement.
All statutory references are to the Code of Civil Procedure section unless otherwise noted.
Background
In November 2003, Wymac Capital, Inc. (Wymac), a licensed mortgage broker, filed an action in state court against two of its former employees, Shannon Anderson and Melanie Fosson, and their new employer, CMG Mortgage Services (CMG), alleging causes of action for breach of contract and misappropriation of trade secrets. Medlin initially represented all of the defendants in the state court action, but later withdrew as counsel for CMG and continued to represent only the individual defendants. In June 2006, CMG represented by Medlin filed a separate action against Wymac in federal court alleging violations of the Real Estate Settlement Act and the Lanham Act.
In October 2006, as the state court action was about to be tried, the trial judge disqualified Medlin as counsel for the individual defendants based on what the court considered to be an inherent conflict of interest between Medlins representation of CMG and the individual defendants. The court also sanctioned Medlin for failing to recognize the conflict sooner and causing a delay in the proceedings. In an opinion filed in June 2007, this court concluded that the trial court erred in disqualifying Medlin and reversed the sanction order. (Wymac Capital, Inc. v. Anderson (Jun. 8, 2007, A116002) [nonpub. opn.].) While that appeal was pending, the parties entered into a global settlement of both the state and federal court actions.
Paragraph 10 of the settlement agreement provides in relevant part, "The parties agree that the Protective Order currently in place will remain in force and effect . . . . Documents exchanged in discovery will be returned. To the extent that Defendants counsel wish to retain a record of the documents returned, CMGs current attorneys of record in the Wymac action may create a list of the Attorneys Eyes Only documents by date and Bates stamp number. All Attorneys Eyes Only documents and Confidential Documents shall be returned to the producing party without copies being made or retained by all counsel, former counsel, their consultants and experts. . . . However, neither David Medlin, nor the law firm of Medlin & Hargrave LLP or any of its attorneys may keep any document, including a list that references any documents produced by Wymac in this litigation." Paragraph 22 of the agreement requires in addition that defendants and their attorneys provide Wymac with copies of any "correspondence, communications, complaints or other documentation related to submissions to any regulatory or public agency in conjunction with Wymacs business practices." The settlement agreement includes a mutual release and discharge, but expressly does not "release any claims that any party may have against David R. Medlin, Joshua Rosenthal or the law firm of Medlin & Hargrave LLP, including the claim for sanctions ordered by the court." The parties to the agreement agreed that the settlement would be subject to judicial supervision under section 664.6.
Medlin attended the settlement negotiations and, on January 3, 2007, attended the settlement approval hearing as counsel of record for CMG in the federal court action. He did not, however, sign the settlement agreement or agree to its terms. At the hearing, the court confirmed that each of the parties and their attorneys, other than Medlin, had participated in the negotiations and signed the settlement agreement. With respect to Medlin, the court confirmed that he had not signed the settlement agreement, but that he was present at the negotiations in connection with the federal court action. At Wymacs request the court ordered that the provisions of the settlement agreement relating to the return of confidential documents be complied without delay. At the conclusion of the hearing, the court confirmed that the settlement "will be judicially enforced." The state court action was dismissed with prejudice on January 17, 2007.
Following the hearing, Medlin refused to comply with Wymacs request that he return the confidential documents pursuant to the terms of the settlement agreement. Medlin explained that he did not believe he or his firm was subject to the terms of the agreement, which in his estimation was drafted with two objectives in mind: "(1) to preserve the right to pursue further litigation against [his] office; and (2) to deny [his] office any record of the confidential documents produced in the course of discovery." Medlin acknowledged that he and his office were bound by the nondisclosure provisions of the protective order entered during discovery. As authorized by that order, he had maintained an archival copy of the confidential documents, which he believed it was necessary to preserve "in light of the possibility of further litigation against [his] office, as specifically reserved in the agreement." Medlin proposed that his archival copy of the documents be delivered to a neutral third party for a period of five years. "If no related legal proceedings has been initiated by that time, then the documents should be destroyed. However, if any legal proceeding is initiated within five (5) years, the documents would be preserved until at least five (5) years following the finality of any and all such subsequent litigation." Medlin proposed that the costs associated with the storage of the archival copy be borne equally by Medlin and Wymacs attorney.
Wymac refused Medlins proposal and, on March 9, 2007, filed a motion to enforce the settlement under section 664.6. Medlin filed a preemptory challenge to the trial judge pursuant to section 170.6 and concurrently filed a "special appearance" objecting to the courts jurisdiction over him. On May 1, 2007, the court denied the preemptory challenge as untimely and ordered Medlin to comply with Paragraph 22 of the settlement agreement. On May 24, at Wymacs request, the court amended its order to require Medlin also to comply with Paragraph 10 of the settlement agreement. After filing a petition for writ of prohibition that was summarily denied, Medlin filed a notice of appeal from the two May 2007 orders.
Discussion
Initially, Wymac suggests that the May 1 and May 24 orders are not appealable and, if appealable, that the notice of appeal was untimely and that Medlin lacks standing to appeal. We disagree. The order is appealable under section 904.1. Although this section does not expressly include among the list of appealable orders an order granting a motion under section 664.6, such an order is appealable because no issues remain for further consideration and no further judicial action is required for a final determination of the rights of the parties. (See Housing Group v. United Nat. Ins. Co. (2001) 90 Cal.App.4th 1106, 1110, fn. 3; Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 815.)
Likewise, Medlin has standing to appeal. Wymac is correct that as a general rule, only a "party of record" may appeal. (County of Alameda v. Carleson (1971) 5 Cal.3d 730, 736; Howard Contracting, Inc. v. G. A. MacDonald Construction Co. (1998) 71 Cal.App.4th 38, 58; § 902.) However, a nonparty may also have standing to appeal if he or she is aggrieved by the order or judgment appealed. (Slaughter v. Edwards (1970) 11 Cal.App.3d 285, 291-292; see also A.I. Credit Corp., Inc. v. Aguilar & Sebastinelli (2003) 113 Cal.App.4th 1072, 1077 [although not a "party" to the underlying action, an attorney disqualified from continuing representation in the case has standing to challenge the disqualification order].) The courts order directs Medlin personally to return all confidential documents in his file against his wishes. Medlin is thus an aggrieved party for purposes of section 902.
Finally, Medlins appeal is timely under California Rules of Court, rule 8.104. Wymac contends that the May orders directing him to comply with the terms of the settlement agreement were "simply restatements" of the January 3 order approving the terms of the agreement and that Medlins appeal, therefore, is untimely because he did not file a notice of appeal within 60 days of the January 3 hearing. Even accepting the questionable assumption that the operative order was entered on January 3, Medlins notice of appeal, filed on June 5, 2007, is timely. Under rule 8.104, subdivision (a) "a notice of appeal must be filed on or before the earliest of: [¶] (1) 60 days after the superior court clerk mails the party filing the notice of appeal a document entitled `Notice of Entry of judgment or a file-stamped copy of the judgment, showing the date either was mailed; [¶] (2) 60 days after the party filing the notice of appeal serves or is served by a party with a document entitled `Notice of Entry of judgment or a file-stamped copy of the judgment, accompanied by proof of service; or [¶] (3) 180 days after entry of judgment." Medlins presence at the January 3 hearing was not sufficient to invoke the 60-day deadline. (Ramon v. Aerospace Corp. (1996) 50 Cal.App.4th 1233, 1238-1239 [service of notice of entry of judgment, rather than entry of judgment, established crucial date for determining the timeliness of appeal].) There is no evidence in the record that Medlin was served with notice of the entry of the January 3 order. Accordingly, even if the subject of the appeal is deemed to be the January 3 order, the time for appeal would be subject to the 180-day deadline, which Medlin met by more than a month.
All rule references are to the California Rules of Court.
Medlin argues that the court erred in enforcing the terms of the settlement against him under section 664.6 because, among other reasons, he did not sign the agreement. 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." "Section 664.6 empowers a court to enforce a settlement agreement by way of a summary procedure if certain requirements are satisfied." (Harris v. Rudin, Richman & Appel (1999) 74 Cal.App.4th 299, 304 (Harris); Weddington Productions, Inc. v. Flick, supra, 60 Cal.App.4th at p. 810.) In particular, the "statutes requirement of a writing `signed by the parties . . . require[s] the signatures of the parties seeking to enforce the agreement under section 664.6 and against whom the agreement is sought to be enforced." (Harris, supra, 74 Cal.App.4th at p. 305; see also Levy v. Superior Court (1995) 10 Cal.4th 578, 580, 585-586 [settlement may be enforced under section 664.6 only if it has been signed by the parties themselves, or agreed to by the parties themselves in open court; it is not sufficient for their attorneys to sign the writing].) "`A procedure in which a settlement is evidenced by one writing signed by both sides . . . legitimizes the summary nature of the section 664.6 procedure." (Harris, supra, at p. 305.) As to the interpretation and application of section 664.6 on undisputed facts, we exercise de novo review. (Elnekave v. Via Dolce Homeowners Assn. (2006) 142 Cal.App.4th 1193.)
Medlin also asserts that absence of his signature deprived the court of subject matter jurisdiction over enforcement of the settlement agreement. The court, however, properly retained jurisdiction to enforce the agreement under section 664.6 and Medlin does not dispute that he is subject to the courts personal jurisdiction. Nonetheless, the issue is not whether the court had jurisdiction to enforce the terms of the settlement agreement, but whether Medlin, who was not the attorney for any of the parties in the state court action when the agreement was entered and did not personally sign the agreement, was bound by its terms and, more importantly, whether the requirements for summary enforcement under section 664.6 were satisfied.
Here, it is undisputed that Medlin was not counsel of record for any of the parties in the state court action when the settlement agreement was entered and that he did not personally agree to be bound by the terms of the settlement agreement in writing or in open court. Indeed, he asserts a number of defenses to the enforcement of the agreement against him, including lack of mutual consent and consideration. Since, whatever the merits of his defenses, he unquestionably did not sign or agree in open court to the terms of the agreement, the summary enforcement proceeding against him was improper and the May orders must be reversed.
In light of this conclusion, we do not reach Medlins additional contention that the court erred in rejecting as untimely his preemptory challenge under section 170.6.
Disposition
The May 1, 2007 and May 24, 2007 orders enforcing the settlement agreement against Medlin are reversed. Medlin shall recover his costs on appeal.
We Concur:
McGuiness, P. J.
Jenkins, J.