Infoneuro Group v. Aetna Life Insurance Company ( 2023 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS FEB 16 2023
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
INFONEURO GROUP, DBA Beverly No. 22-55239
Hills Pain Institute and Neurology, a
California Corporation; et al., D.C. No.
2:16-cv-05083-AB-JC
Plaintiffs-Appellants,
v. MEMORANDUM*
AETNA LIFE INSURANCE COM-
PANY; DOES, 1 to 10, inclusive,
Defendants-Appellees.
Appeal from the United States District Court
for the Central District of California
Andre Birotte Jr., District Judge, Presiding
Argued and Submitted February 6, 2023
Pasadena, California
Before: BOGGS,** IKUTA, and DESAI, Circuit Judges.
Playa Advanced Surgical Institute and affiliated parties (“Playa”) sued Aetna
Life Insurance Company (“Aetna”) under ERISA for unpaid medical bills. The
*
This disposition is not appropriate for publication and is not precedent except as
provided by Ninth Circuit Rule 36-3.
**
The Honorable Danny J. Boggs, Senior Circuit Judge of the United States Court
of Appeals for the Sixth Circuit, sitting by designation.
district court granted summary judgment to Aetna on most of Playa’s claims, holding
that Playa lacked standing to bring these claims, because the right to bring such a
suit belonged to the patients, not to Playa. The parties then engaged in a settlement
conference and agreed to settle and dismiss all of their claims and counterclaims.
When the parties could not agree on written language to execute their settlement, the
district court granted Aetna’s motion to enforce the settlement. Playa now appeals
both of the district court’s orders. We have jurisdiction under 28 U.S.C. § 1291, and
we affirm.
1. We review a district court’s enforcement of a settlement agreement for
abuse of discretion. Parsons v. Ryan, 912 F.3d 486, 495 (9th Cir. 2018); Doi v. Hale-
kulani Corp., 276 F.3d 1131, 1136 (9th Cir. 2002).
“An agreement to settle a legal dispute is a contract,” and state contract law
governs its enforcement. Jeff D. v. Andrus, 899 F.2d 753, 759 (9th Cir. 1990). Under
California law, the parties’ consent is an essential element of a contract. Lopez v.
Charles Schwab & Co., 13 Cal. Rptr. 3d 544, 548 (Ct. App. 2004) (citing Cal. Civ.
Code § 1550). Mutual assent consists of an offer communicated to the offeree and
an acceptance communicated to the offeror. Ibid. Mutual assent is determined by
objective criteria, meaning by “what the outward manifestations of consent would
lead a reasonable person to believe.” T.M. Cobb Co. v. Superior Ct., 682 P.2d 338,
343 (Cal. 1984) (quoting Meyer v. Benko, 127 Cal. Rptr. 846, 848 (Ct. App. 1976)).
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An acceptance must be “absolute and unqualified.” Cal. Civ. Code § 1585.
An unqualified acceptance, even if “made with some protest” and “grumbling,” is
enough. Chi. Bridge & Iron Co. v. Indus. Accident Comm’n, 38 Cal. Rptr. 57, 62 n.2
(Ct. App. 1964); see also Guzman v. Visalia Cmty. Bank, 84 Cal. Rptr. 2d 581, 584
(Ct. App. 1999) (“[A]n acceptance is not invalidated by the fact that it is ‘grumbling,’
or that the offeree makes some simultaneous ‘request.’”).
2. The settlement-conference transcript shows that Playa, through its repre-
sentative, Dr. Guven Uzun, understood and accepted the terms of the oral agreement,
which created a binding settlement. When Dr. Uzun suggested that he did not under-
stand some of the settlement terms, the magistrate judge recessed to explain and
confirm the terms. The magistrate judge twice informed Dr. Uzun that he did not
have to settle the case. Moreover, the magistrate judge read the terms aloud, asking
Dr. Uzun after each term if he agreed to the term on Playa’s behalf. Dr. Uzun agreed
to each term. After the party representatives agreed to each of the terms, the magis-
trate judge confirmed a binding settlement. Dr. Uzun acknowledged that the terms
were binding. Despite expressing hesitancy at some points during the settlement
conference, Dr. Uzun ultimately accepted the terms unequivocally and without con-
dition.
Playa argues that it did not communicate an unqualified acceptance of the
settlement, noting instances during the settlement conference where Dr. Uzun “felt
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compelled to accept the settlement” involuntarily. We disagree. As the district court
noted, Playa’s “selective citations . . . fail to reflect the totality of what occurred” at
the settlement conference. Although the record shows that Dr. Uzun felt wronged by
Aetna and was dissatisfied with the outcome of his lawsuit, it also shows that Dr.
Uzun knew what he was doing when he agreed to the settlement. That Playa ex-
pressed “some protest” or “grumbling” during the settlement conference does not
foreclose a finding of absolute and unqualified acceptance. Chi. Bridge, 38 Cal. Rptr.
at 62 n.2.
Playa alternatively argues that it issued a counteroffer that Aetna never ac-
cepted. Dr. Uzun, Playa contends on appeal, qualified his acceptance of the settle-
ment terms on the additional condition that the settlement would not release Aetna
from claims that he might make for “fraud and deception and illegal activities.”
However, Dr. Uzun also acknowledged, in the same statement, that “[t]here is no
broad settlement beyond this case.” This language suggests not only that Dr. Uzun
intended to agree to the settlement but also that any reservations regarding Aetna’s
alleged fraud concerned activities beyond the scope of the settlement, such as frauds
allegedly committed against Dr. Uzun in his personal capacity.
3. Playa also challenges the written settlement that executed the oral agree-
ment, arguing that its failure to agree on the language of that settlement confirms
that a binding agreement was never formed. But failing to sign a written settlement
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has no effect on the validity of the parties’ oral agreement. See, e.g., Doi, 276 F.3d
at 1139–40; Blix St. Records, Inc. v. Cassidy, 119 Cal. Rptr. 3d 574, 582 (Ct. App.
2010). At the settlement conference, the magistrate judge noted that Playa and Aetna
had “all agreed on the record irrespective of whatever form there may be in long
form” that the terms of their oral agreement were binding.
Playa contends that the written settlement expanded on the original terms of
the oral agreement without its consent. Playa notes, for example, that it had not
agreed to expand the scope of the release to its representatives acting on its behalf,
or to dismiss the claims adjudicated in Aetna’s motion for partial summary judg-
ment. But such language is standard practice in settlement agreements between legal
entities, see Doi, 276 F.3d at 1139 & n.6 (noting that language including in a corpo-
rate party “anyone on [its] behalf” was part of “a very standard release clause”), and
does not expand the substantive scope of the agreement, id. at 1139.
Nor can Playa claim that it did not agree “to dismiss the entire action” under
Federal Rule of Civil Procedure 41. The settlement terms plainly state that they apply
to all claims and counterclaims filed in this lawsuit, including those claims previ-
ously dismissed in the district court’s grant of partial summary judgment.
The written settlement that Playa was ordered to sign did not conflict with the
oral agreement that it entered into. Therefore, we hold that the district court did not
abuse its discretion in enforcing the settlement agreement.
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4. Because the settlement and joint stipulation required Playa to dismiss all
of its claims in this case, we need not reach its challenge to the district court’s grant
of partial summary judgment.
AFFIRMED.
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