Marriage of Rush and McIvor CA1/5 ( 2013 )

Filed 12/16/13 Marriage of Rush and McIvor CA1/5
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION FIVE
In re the Marriage of ANDREW P. RUSH
and ORLA M. MCIVOR.
ANDREW P. RUSH,
Appellant, A137829
v.
(San Francisco City and County
ORLA M. MCIVOR, Super. Ct. No. FDI-10-772203)
Respondent.
Andrew P. Rush appeals from an order issued after his motion for entry of
judgment pursuant to an on-the-record oral settlement agreement. (Code Civ. Proc.,
§ 664.6.) He contends the court erred because the order requires the disposition of real
property in a manner contrary to the terms of the parties’ purported settlement agreement.
He further contends the court should have entered a judgment setting forth the settlement
terms as set forth on the record. We will vacate the order.
I. FACTS AND PROCEDURAL HISTORY
Appellant Andrew P. Rush (Andrew) and respondent Orla M. McIvor (Orla) were
married in July 1993, and separated in June 2004.1 Andrew filed a petition for
dissolution of the marriage in May 2010, and Orla filed her response in August 2010.
1
We refer to the parties by their first names for clarity, without disrespect.
1
A. Mandatory Judicial Settlement Conference and Settlement Agreement
The parties participated in a mandatory judicial settlement conference on
October 21, 2011. Andrew appeared in pro per, and Orla participated by telephone and
was represented by counsel; Andrew’s then-fiancé and current wife, Sarah Heegaard
(Sarah), attended as well. Also present were settlement masters Martin Triano and
Stacey Poole.
The parties reached an agreement during the settlement conference, and Triano
recited its terms on the record before the court on October 21, 2011 (October 2011
Stipulation). Those terms—the most germane of which we italicize—were recited as
follows: (1) Andrew and Orla would work with an attorney in Ireland to resolve issues
regarding jointly owned real property in Ireland, including debt secured by the property,
with the court to continue jurisdiction over the matter; (2) two properties jointly owned by
the parties in San Francisco—on Dolores Street and 22nd Street—would be “sold or
transferred to [Sarah] . . . on or before March 1st of 2012”; (3) a “balance price
payment that will be made to [Orla] will be $550,000,” and Sarah would agree to the
jurisdiction of the court “as far as that debt”; (4) the parties would “work out a marital
settlement agreement and judgment that will provide for the appropriate promissory note,
or deed of trust, or lien”; (5) the “parties will cooperate, because there’s an issue of
what is the best way of doing the financing down the road, which is also why [the parties]
are putting it over until 2012”; (6) interest at “the legal rate” will accrue on “that
amount” ($550,000) commencing October 21, 2011; (7) Andrew would make an
advanced payment of child support in the amount of $25,000 by March 1, 2012; (8) each
party would be awarded the bank accounts, savings accounts, stocks and retirement funds
in his or her name; (9) each party would bear his or her own attorney fees and costs;
(10) there would be a “bifurcation as to status” as of October 21, 2011; (11) spousal
support was “zero,” with the court retaining jurisdiction over the issue as to both parties;
(12) bank accounts or moneys relevant to the property in Ireland would be accounted for
and disclosed; and (13) custody and visitation with respect to the parties’ child was
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subject to the court in Ireland, with child support determined in the San Francisco court.”
(Italics added.)
In addition, Triano advised, the parties had agreed that his office would serve as a
mediator “to help draft up the judgment and marital settlement agreement,” the parties
would cooperate in this regard, and his fees would be $400 per hour.
While reciting the parties’ settlement terms, Triano further noted: “Our hope is to
wrap everything up so there will be a judgment today, which also goes to the issue of
balancing, to do bifurcation of status today. The goal is to wrap everything up in this
marriage as of today.” After the terms had been recited on the record, Orla’s attorney
added: “And the other thing I would like to say is we put this fairly complicated case
together in a very short amount of time, which is terrific, and that we are going to be
working with Mr. Triano to get this finalized. [¶] And I would just like to be sure this is
seen as kind of the overall picture of what is going to have a lot of fine tuning in the
[marital settlement agreement].”
Andrew and Orla were then sworn as witnesses, and the court asked each of them,
“with respect to the terms of the agreement that will be reduced to writing in the form of
a marital settlement agreement,” whether they “understand and agree to those terms.”
Andrew and Orla each responded affirmatively. The court announced that the petition for
dissolution was granted and the parties were restored to their previous single status as of
that date (October 21, 2011).2
B. Inability to Reduce the Settlement Terms to Writing or Implement the Terms
The parties stipulated to change Triano’s status from a mediator to a judge pro tem
in December 2011, and the court made the appointment in May 2012. However, Andrew
and Sarah thereafter filed a motion to remove Triano as judge pro tem pursuant to Code
of Civil Procedure section 170.1. The court granted their motion in June 2012, on the
ground that Triano’s good faith effort to resolve the case resulted in the likelihood that he
2
A “status only judgment” was entered by the court on July 25, 2012, with a
marital status termination date of July 25, 2012.
3
would become a witness as to what the parties agreed or did not agree in the settlement
negotiations, and he had become too intertwined in the settlement effort to be the neutral
arbiter of what the parties agreed.
The parties were unable to reduce the October 2011 Stipulation to writing, let
alone perform its terms, such as the transfer of the San Francisco properties from Orla to
Sarah. Andrew blamed Orla for this, contending she failed to comply with the agreement
and insisted on new and different terms. Orla claimed that Andrew was at fault. At
bottom, the San Francisco realty was not transferred by Orla, Orla was not paid, and no
marital settlement agreement was completed.
C. Judgment Pursuant to Code of Civil Procedure Section 664.6
1. Andrew’s Motion for Entry of Judgment
In August 2012, Andrew filed a motion for entry of judgment pursuant to Code of
Civil Procedure section 664.6 (section 664.6). Andrew requested that the court “[e]nter
judgment pursuant to the October 21, 2011 in-court oral stipulation” and “[e]nforce [the]
stipulated settlement agreement, specifically the real estate transaction set forth therein.”
Andrew argued that the transcript of the October 2011 Stipulation demonstrated,
as required by section 664.6, that the material terms of the settlement agreement were
explicitly defined, a supervising judicial officer questioned the parties regarding their
understanding of those terms, and the parties expressly acknowledged their understanding
of and agreement to be bound by those terms. In addition, Andrew informed the court
that it had the power to resolve factual disputes related to the settlement agreement
without creating new material terms to which the parties had not agreed, and asked the
court to resolve the parties’ disputed issues concerning the San Francisco real estate
transaction. In this regard, Andrew offered to pay Orla $350,000 in exchange for her
release of the deeds to the properties, paying the balance when he received the funds from
his father’s estate.
2. Orla’s Opposition
Orla opposed Andrew’s motion, contending that the October 2011 Stipulation was
unclear, a work in progress, and uncertain as to specifics. Orla also contended that
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Andrew failed to comply with the material terms of the parties’ settlement agreement by,
among other things, seeking to have Triano disqualified as judge pro tem and not paying
Orla the $550,000 or obtaining financing in advance of the due date.
3. Andrew’s Reply
In his reply, Andrew asserted that he and Sarah had obtained financing for the
entire $550,000 as Orla demanded (even though the October 2011 Stipulation anticipated
a note or lien securing the sum), and it was Orla who wrongfully refused to accept the
payment and tender deeds to the properties. Andrew reiterated his request that the court
enter judgment pursuant to the October 2011 Stipulation and enforce the settlement
agreement, including the “real estate transaction set forth therein.”
4. Hearing and Court’s Ruling
At the hearing on Andrew’s motion for entry of judgment on November 20, 2012,
the parties were sworn and examined.3
The court issued its findings and order after hearing on December 19, 2012
(December 2012 Order). Essentially, the court directed Andrew’s attorney to
prepare an order “based on the transcript of October 21, 2011”—the October
2011 Stipulation that recounted the parties’ settlement agreement—but it further
directed the parties to list the San Francisco properties on the market for at least
$1,000,000 each and place the sale proceeds in escrow, contrary to the term in the
3
The record does not contain a reporter’s transcript of this hearing. The “mini
minutes” of the hearing reads: “Based on the testimony and review of the pleadings the
Court finds good cause to order the following: 1) The 10/21/2011 Stipulation and Order
shall be drafted by both [Andrew’s attorney and Orla’s attorney]. Exchange of Stipulation
and Order shall be on 12/14/12 at 4pm and shall be submitted to the court on 12/21/12 at
4pm. [¶] The court further orders the following: 1) Both houses in the possession of
Petitioner shall be put on the market on 12/28/12. 3) Based on the evidence heard today in
court, the listing price shall be listed as suggested by a Realtor with expertise in the area.
4) All parties shall cooperate with the listing and sale of the two homes. 5) Upon sale of the
two homes a joint Escrow account shall be opened and maintained by both [Andrew’s
attorney and Orla’s attorney]. 6) [Orla’s attorney] shall give [Andrew’s attorney] three
Realtor names by 12/10/12 at 4pm. [Andrew’s attorney] shall make a selection by 12/14/12
at 4pm. Both properties shall be listed by 12/28/12. 7) Court reserves jurisdiction over all
other issues. [Andrew’s attorney] to prepare the order. Not reported.”
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October 2011 Stipulation by which Orla would relinquish her interest in the
properties to Sarah for $550,000.4
D. Appeal
Andrew appealed from the December 2012 Order in February 2013, and the
parties stipulated to stay the enforcement of the order for six months. The San Francisco
properties apparently remain unsold.
II. DISCUSSION
Andrew contends that, although the court was correct to the extent it granted his
section 664.6 motion, the court erred because: (1) it ordered that the San Francisco
properties be listed for sale on the market, which was inconsistent with the parties’
settlement agreement; and (2) the court should have directed entry of judgment rather
than preparation of an order. Orla counters that the appeal should be dismissed because
the December 2012 Order is not appealable; in any event, she argues, the order was
proper because the October 2011 Stipulation was uncertain and incapable of enforcement
as a judgment.
4
The court did not expressly state whether it was granting Andrew’s motion, but the
register of actions provides that the motion under section 664.6 was “granted per written
order.” The full terms of the December 2012 Order are: “1. The parties are the owners of
[the two San Francisco real properties]. [¶] 2. Both real properties shall be placed on the
market for sale, and the parties shall execute a listing agreement on or before December 28,
2012. [¶] 3. [Attorney for Orla] shall propose the names of three realtors to [attorney for
Andrew and Sarah] on or before December 10, 2012. [Andrew and Sarah] shall select one of
these three realtors and [their attorney] shall advise [Orla’s attorney] of this selection on or
before 4:00 p.m. on December 14, 2012. [¶] 4. The initial listing price for each of the real
properties shall be set based upon the realtor’s recommendation, but not to be less than
$1,000,000.00 each, unless the realtor advises otherwise. [¶] 5. The proceeds from the sale of
the real properties shall be placed in a two-signature interest-bearing escrow account,
established by [the parties’ attorneys]. These proceeds shall remain in escrow until mutual
agreement of the parties or subsequent Court Order, pending the resolution of any and all
claims by the parties, including but not limited to credits, reimbursements, attorneys’ fees
and costs, and sanctions. [¶] 6. [Attorney for Andrew and Sarah] shall prepare a proposed
Findings and Order After hearing, based on the transcript of October 21, 2011, on or before
December 14, 2012. The parties shall meet and confer between December 14, 2012 and
December 21, 2012. If the parties do not agree to the form of that order by December 21,
2012, then each shall submit their version to the Court for decision on December 21, 2012.”
6
A. Orla’s Jurisdictional Arguments
An appeal may be taken from a final judgment that terminates the proceeding and
disposes entirely of the action. (Code Civ. Proc., § 904.1, subd. (a)(1).) In addition,
interim orders are appealable if they are so designated by statute. (Code Civ. Proc.,
§ 904.1, subd. (a).) Here, the December 2012 Order does not fall within the categories of
appealable orders set forth in Code of Civil Procedure section 904.1, subdivisions (a)(2)–
(13).
The December 2012 Order is also not denominated a “judgment.” Nevertheless, if
the December 2012 Order finally determines the rights of the parties, it is the functional
equivalent of a judgment and immediately appealable. (See Swain v. California Casualty
Ins. Co. (2002) 99 Cal.App.4th 1, 6 [appellate court has power to correct language of
order that would preclude review, if trial court clearly intended to dispose of the entire
action between the parties]; Viejo Bancorp, Inc. v. Wood (1989) 217 Cal.App.3d 200, 205
[judgment after grant of § 664.6 motion was appealable because substance and effect was
to finally dispose of the action]; Corkland v. Boscoe (1984) 156 Cal.App.3d 989, 994
[affirming minute order granting motion to compel enforcement of settlement agreement
before enactment of § 664.6].) Andrew contends this describes the December 2012
Order, particularly since the register of actions indicates that his motion for judgment was
granted, and the order required preparation of an order based on the October 2011
Stipulation. Orla counters that no judgment was entered, the December 2012 Order does
not finally dispose of the rights of the parties, and the December 2012 Order is not final
because it required the preparation of an additional order.5
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Orla also points out that the denial of a motion to enforce a settlement under
section 664.6 is not immediately appealable. (Walton v. Mueller (2009)
180 Cal.App.4th 161, 167 & fn. 6.) She urges that the court here denied Andrew’s
motion, because it did not enforce the provision regarding the San Francisco properties
and did not enter judgment in accord with the October 2011 Stipulation. However, the
court did more than merely deny the motion: it directed entry of an order based on the
October 2011 Stipulation and further ordered disposition of the San Francisco
properties in a manner that was not set forth in the October 2011 Stipulation and—as
far as the record on appeal shows—was not even proposed by the parties.
7
Alternatively, Andrew contends the December 2012 Order is appealable under the
collateral order doctrine. Under this doctrine, an order is appealable if it (1) finally
determines a distinct issue in a case and (2) directs the payment of money or performance
of an act by or against the appellant. (In re Marriage of Skelley (1976) 18 Cal. 3d 365,
368 [order reducing temporary spousal support and denying attorney fees and costs was
appealable, since it was akin to a final judgment in an independent proceeding].) An
issue is distinct or collateral if it is separate from the general subject matter of the
litigation and not important or essential to a correct determination of the main issue in the
case. (Lester v. Lennane (2000) 84 Cal.App.4th 536, 561–562 [temporary custody and
visitation orders not appealable because custody was the only disputed issue in the case].)
Andrew contends the December 2012 Order satisfies these requirements, because it
determines the distinct question of the disposition of the San Francisco properties and
directed the acts of listing and selling the properties to a third party. Orla contends the
collateral order rule does not apply because the disposition of the San Francisco
properties is not a collateral matter, but vital to the main issues of the case.
Even if the December 2012 Order is not appealable as a judgment or collateral
order, we would exercise our discretion to consider the appeal as a petition for a writ of
mandate. (Olson v. Cory (1983) 35 Cal.3d 390, 400–401.) The record sufficiently
demonstrates the unusual circumstances and lack of adequate legal remedy requisite for
the exercise of such discretion: to require the parties to wait for a determination of the
trial court’s authority to compel the market sale of the San Francisco properties would
risk the irrevocable sale of the properties contrary to the parties’ stipulation and in excess
of the trial court’s authority. Furthermore, the parties have already fully briefed the
issues in this proceeding, and there is no contention that the parties ever agreed to what
the trial court did. We therefore proceed to the merits.
B. Merits
Section 664.6 provides a summary procedure “for entry of judgment enforcing a
settlement agreement.” (In re Marriage of Assemi (1994) 7 Cal.4th 896, 911 (Assemi).)
The statute provides: “If parties to pending litigation stipulate, in a writing signed by the
8
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.”
(§ 664.6, italics added.)
Section 664.6 provides a mechanism to prevent a party from reneging on a
settlement, by allowing the other party to obtain a judgment and enforce it. (Assemi,
supra, 7 Cal.4th at p. 910 [recognizing that “[d]uring the passage of time before an oral
stipulation is reduced to written form, the opportunity would arise for the parties to
reconsider and renege on the settlement”].) This promotes California’s strong public
policy favoring settlement of litigation. (See, e.g., Osumi v. Sutton (2007)
151 Cal.App.4th 1355, 1359–1360 (Osumi).)
When acting on a section 664.6 motion, the court must determine whether the
parties entered into a valid and binding settlement of all or part of the case. (Assemi,
supra, 7 Cal.4th at p. 905.) In making this determination, the court should consider
whether the transcript of the oral stipulation and any other evidence shows that the
material terms of the settlement were explicitly defined, the supervising judicial officer
questioned the parties regarding their understanding of those terms, and the parties
acknowledged their understanding of and agreement to those terms. (Id. at p. 911.)
Depending on this determination, the court has two choices. “If the court
determines that the parties entered into an enforceable settlement, it should grant the
[section 664.6] motion and enter a formal judgment pursuant to the terms of the
settlement. [Citation.]” (Hines v. Lukes (2008) 167 Cal.App.4th 1174, 1182–1183.) See
Osumi, supra, 151 Cal.App.4th at pp. 1360–1361 [where parties’ settlement agreement
provided that property would be sold by certain date, but parties failed to complete the
sale by that date, trial court did not impermissibly create a material term or otherwise err
by extending the closing date for the transaction in response to a § 664.6 motion].) If, on
the other hand, it finds that the parties did not enter into an enforceable settlement, the
court must deny the motion; it cannot impose new terms in order to make the settlement
9
enforceable. (Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 810
(Weddington).)
Thus, “[t]he power of the trial court under [section 664.6] is extremely limited.
‘Although a judge hearing a section 664.6 motion may receive evidence, determine
disputed facts, and enter the terms of a settlement agreement as a judgment [citations],
nothing in section 664.6 authorizes a judge to create the material terms of a settlement, as
opposed to deciding what terms the parties themselves have previously agreed upon.’ ”
(Hernandez v. Board of Education (2004) 126 Cal.App.4th 1161, 1176, quoting
Weddington, supra, 60 Cal.App.4th at p. 810.)
Weddington is instructive in this regard. There, the parties had entered into a one-
page memorandum of settlement terms after an initial mediation. The negotiations
continued without a final agreement on certain other material terms. (Weddington, supra,
60 Cal.App.4th at pp. 796–797.) The trial court granted a section 664.6 motion,
effectively transforming “a one page memorandum which appellants signed after the
initial mediation session [into] a thirty-five page judgment containing numerous material
terms to which appellant had never agreed.” (Id. at p. 797.) The appellate court reversed:
“Section 664.6 authorizes none of this. Neither a mediator nor a judge may select and
impose settlement terms on the authority of section 664.6.” (Ibid.) Furthermore, because
the one-page memorandum of terms was insufficient to constitute an enforceable
agreement, the section 664.6 motion should have been denied. (Id. at pp. 810–811, 819;
see Terry v. Conlan (2005) 131 Cal.App.4th 1445, 1458–1461 [agreement on goals of
settlement, but not the means of achieving those goals, did not result in judicially
enforceable settlement agreement].)
1. The Trial Court Improperly Imposed New Terms
The October 2011 Stipulation provided that the San Francisco properties would be
transferred to Sarah, and Orla would receive $550,000. By contrast, the December 2012
Order directs that the San Francisco properties be put on the market and sold, for over
$1,000,000 each, with the proceeds deposited into a joint escrow. No substantial
evidence in the record supports a conclusion that the parties had agreed to this new
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disposition. Accordingly, the court did not merely decide the terms to which the parties
agreed, but exceeded its authority by imposing new and different terms. (Weddington,
supra, 60 Cal.App.4th at pp. 809–810.)
2. Whether the October 2011 Stipulation Was Sufficiently Certain
While it is clear that the court exceeded its authority by changing the terms with
respect to the transfer of the San Francisco properties, the issue remains whether the court
should have granted Andrew’s motion—and entered judgment based on the October 2011
Stipulation—or denied the motion. The resolution of this issue depends on whether the
terms of the October 2011 Stipulation were sufficient in themselves to constitute a valid
and binding settlement.
Orla argues that the October 2011 Stipulation was too preliminary or uncertain to
be enforced as a settlement, particularly since the October 2011 Stipulation provided that
the parties would agree on a marital settlement agreement. In addition, she urges, the
October 2011 Stipulation did not clearly specify that Andrew (or Sarah) could pay Orla
less than the entire $550,000 by the March 2012 transfer date, and even if he could, it was
unclear what portion of the $550,000 would have to be paid by that date. Orla also notes
that the court, in previously removing Triano as judge pro tem, noted that the
October 2011 Stipulation was not a detailed recitation of the terms the parties had agreed
upon, and Triano’s task was to help finalize the parties’ agreement.
Andrew, on the other hand, urges that the October 2011 Stipulation was
sufficiently certain for enforcement: the absence of a completed marital settlement
agreement does not preclude enforcement of the oral settlement recited on the record (see
Elyaoudayan v. Hoffman (2003) 104 Cal.App.4th 1421, 1429–1430); the reference in the
October 2011 Stipulation to a note, deed of trust, or lien shows that the parties
contemplated a partial payment of the $550,000; and it was sufficient for the
October 2011 Stipulation to provide that the parties would cooperate to reach agreement
on certain details of the transaction.
It is for the trial court to decide, in the first instance, whether the October 2011
Stipulation was sufficiently certain to constitute an enforceable agreement for purposes of
11
section 664.6. Based on the record presented to us, it is not clear whether the trial court
made this determination. On the one hand, the court did not state that the October 2011
Stipulation was uncertain or unenforceable; to the contrary, it directed Andrew to prepare
a new order based on the October 2011 Stipulation. Furthermore, the court did not state
that it found the particular provisions regarding the San Francisco properties to be
uncertain or unenforceable. On the other hand, the fact that the court changed the manner
in which the parties would dispose of the San Francisco properties warrants
consideration. It is possible, we suppose, that the court found the terms relating to the
transfer of the San Francisco properties uncertain, and came up with the idea of selling
the properties on the market to cure that uncertainty. Alternatively, the court could have
found the terms of the October 2011 Stipulation sufficiently certain and complete, but
imposed the idea of selling the San Francisco properties on the market to resolve the
parties’ impasse and bickering in implementing those terms.
What is clear from the December 2012 Order is that the well-intentioned trial
court had no authority to mandate the market sale of the San Francisco properties, in the
context presented to it, based on the record before us. Accordingly, we will vacate the
December 2012 Order and remand for the court to rule on Andrew’s section 664.6
motion consistent with this opinion.
III. DISPOSITION
The order dated December 19, 2012, is vacated. The matter is remanded for the
trial court to rule on appellant’s Code of Civil Procedure section 664.6 motion, consistent
with this opinion. Appellant shall recover his costs on appeal.
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NEEDHAM, J.
We concur.
SIMONS, Acting P. J.
BRUINIERS, J.
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