Arora v. Singh CA2/2 ( 2022 )

Filed 8/23/22 Arora v. Singh CA2/2
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion
has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION TWO
SURINDERPAL S. ARORA et al., B310707
Plaintiffs, Cross-defendants (Los Angeles County
and Appellants, Super. Ct.
No. 18STCV10316)
v.
DALJEET SINGH et al.,
Defendants, Cross-
complainants and Respondents.
APPEAL from an order and judgment of the Superior Court
of Los Angeles County. Randolph M. Hammock, Judge. Order
reversed and judgment vacated.
Smith Law Firm and Craig R. Smith for Plaintiffs, Cross-
defendants and Appellants.
Attlesey|Storm, Keith A. Attlesey and Marc W. Thomas for
Defendants, Cross-complainants and Respondents.
___________________
Plaintiffs and appellants Surinderpal S. Arora and his wife,
Sharanpreet K. Arora (collectively the Aroras) appeal from a
judgment entered in favor of defendants and respondents Daljeet
Singh (Singh) and his wife, Gurpreet Bindra (Bindra), following
their successful motion to enforce a settlement agreement. (Code
Civ. Proc., § 664.6.)1
The Aroras argue that they revoked their offer to settle
before Singh and Bindra accepted it, rendering the purported
settlement agreement unenforceable. We agree. The order is
reversed and the judgment is vacated.
FACTS AND PROCEDURAL BACKGROUND
In 2007, the parties entered into a partnership to manage
residential properties. In 2018, Singh and Bindra told
Surinderpal2 that they wanted to sell their interest in the
partnership. This turned out to be the opening salvo in what
would become a full-blown family feud, culminating in dueling
lawsuits.
After two years of litigation, the parties opened settlement
talks. In these talks, the Aroras were represented by Craig
Smith (Smith); Singh and Bindra were represented by Suoo Lee.
On March 10, 2020, Lee drafted a written settlement
agreement and sent it to the Aroras. On March 14, 2020, Smith
sent Singh, Bindra, and Lee a redlined version of the agreement.
The revised agreement contained several changes, including a
provision allowing the Aroras to inspect one of the partnership’s
1 All further statutory references are to the Code of Civil
Procedure unless otherwise indicated.
2 Because the Aroras share a surname, we refer to
Surinderpal by his first name for clarity. No disrespect is
intended.
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properties on March 16, 2020. The Aroras also sent a clean copy
of the revised agreement bearing their signatures.
At 3:13 p.m. on March 15, 2020, Singh and Bindra signed
the revised agreement and e-mailed it to Lee.
At 11:53 p.m. on March 15, 2020, Surinderpal e-mailed
Singh, Bindra, and Lee. He alleged that the property inspection
had revealed significant water and electrical damage, that he
“disapprove[d] of the property condition” and that he would “thus
withdraw the agreement that was presented.”
At 9:40 a.m. on March 16, 2020, Lee e-mailed the signed
agreement to the Aroras and Smith.
On March 17, 2020, Smith e-mailed Lee, writing, “[a]s you
know, [Surinderpal] withdrew his agreement and consent to the
stipulation following the inspection and his discovery of
significant damage to the property . . . [Surinderpal’s] withdrawal
of his agreement and consent preceded your clients’ signatures to
the stipulation. As a result, and for the moment there is no
agreement.” Smith added that the Aroras were “willing to
proceed on the agreement as stated” if Singh and Bindra could
resolve the Aroras’ issues.
On March 18, 2020, Lee notified Smith that Singh and
Bindra would arrange for some repairs to the property, and asked
Smith to confirm that the Aroras would “comply with the terms of
the stipulation for settlement.”
On March 19, 2020, Smith responded with questions about
the repairs and a request for further documentation. Lee replied
that she would “take [Smith’s] response as confirmation that [his
clients] intend to comply with the stipulation” unless he corrected
her.
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On April 9, 2020, Lee asked Smith whether the Aroras had
paid property taxes for one of the partnership’s properties, as
required by the settlement. Smith then asked Lee to “[p]lease
stop referring to the stipulation as something binding on the
parties. It is not.”
On June 9, 2020, Singh and Bindra moved to enforce the
purported settlement agreement pursuant to section 664.6.
On September 28, 2020, the trial court granted the motion
over the Aroras’ objections. It rejected the Aroras’ argument that
they had revoked their offer prior to Singh and Bindra’s
acceptance, finding that this argument was “belied by the fact
that [the Aroras] signed the agreement along with the other
parties.” It concluded that “the Stipulation for Settlement signed
by all parties was in fact reached in this matter prior to the
attempts by [the Aroras] to either repudiate it or to ‘withdraw’
[their] prior offer.”
On January 21, 2021, the trial court entered judgment to
enforce the terms of the purported settlement agreement. The
Aroras timely appealed.3
DISCUSSION
Section 664.6 provides a summary procedure for specifically
enforcing a settlement agreement that meets certain statutory
requirements, including, as relevant here, a written agreement
“signed by the parties outside of the presence of the court.”
(§ 664.6.)
3 Singh and Bindra filed a perfunctory respondent’s brief in
which they “knowingly and voluntarily elect to forego a
substantive brief,” understanding “that determination of this
matter . . . shall be made on [the Aroras’] Opening Brief, and the
record as submitted by the Aroras.”
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When ruling on a motion to enforce a settlement agreement
under section 664.6, a trial court must first determine whether
the parties entered into a valid and binding settlement of the
case. (Corkland v. Boscoe (1984) 156 Cal.App.3d 989, 994.) “A
settlement agreement is a contract, and the legal principles
which apply to contracts generally apply to settlement contracts.”
(Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793,
810 (Weddington).) The validity of a settlement agreement “is
thus ‘judged by the same legal principles applicable to contracts
generally.’ [Citation.]” (Stewart v. Preston Pipeline Inc. (2005)
134 Cal.App.4th 1565, 1585.)
Where, as here, the underlying facts are undisputed, we
review the trial court’s determinations about the validity of a
settlement agreement de novo. (Weddington, supra,
60 Cal.App.4th at p. 810.)
The Aroras’ appeal is a law school hypothetical come to life,
illustrating one of the most basic tenets of contract law: the
power of acceptance. “‘An essential element of any contract is the
consent of the parties, or mutual assent.’ [Citations.]” (Martinez
v. BaronHR, Inc. (2020) 51 Cal.App.5th 962, 967; see also Civ.
Code, § 1550.) Mutual assent typically manifests when one party
extends an offer and the other party accepts it, and thus “a
contract is formed at the time and place the offeree accepts and
communicates his or her acceptance to the offeror.” (Ledbetter
Erection Corp. v. Workers’ Comp. Appeals Bd. (1984) 156
Cal.App.3d 1097, 1103.)
Two additional precepts are relevant to the Aroras’ appeal.
First, because mutual assent “cannot exist unless the parties
‘agree upon the same thing in the same sense’” (Bustamante v.
Intuit, Inc. (2006) 141 Cal.App.4th 199, 208), the “‘“[t]erms
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proposed in an offer must be met exactly, precisely, and
unequivocally for its acceptance to result in the formation of a
binding contract [citations]; . . . ”’” (J.B.B. Investment Partners
Ltd. v. Fair (2019) 37 Cal.App.5th 1, 13, fn. 10.) “‘[T]he addition
of any change or limitation, is tantamount to a rejection of the
original offer and the making of a counteroffer. . . .’” (Landberg v.
Landberg (1972) 24 Cal.App.3d 742, 752.) A counteroffer “is a
new proposal and, if not accepted by the original offeror, amounts
to nothing. [Citation.]” (Apablasa v. Merritt & Co. (1959) 176
Cal.App.2d 719, 726 (Apablasa).)
Second, neither an offer nor a counteroffer remains open
indefinitely. In general, “an offer [or counteroffer] may be
revoked [at] any time before acceptance.” (Martinez v. Brownco
Construction Co. (2013) 56 Cal.4th 1014, 1020; Civ. Code, § 1586.)
Revocation terminates “‘[a]n offeree’s power of acceptance,’”
rendering any contract purportedly based on that offer void.
(Varney Entertainment Group, Inc. v. Avon Plastics, Inc. (2021)
61 Cal.App.5th 222, 235.)
Applying these principles to the case before us, we must
conclude that the Aroras never entered into an enforceable
settlement agreement with Singh and Bindra. Singh and Bindra
made an initial settlement offer on March 10, 2020. The Aroras
responded four days later with a revised offer which, although
substantially similar to the original, included several new or
altered provisions. This created a counteroffer, which Singh and
Bindra needed to accept in order to form a valid agreement.
Singh and Bindra signed the revised offer on March 15,
2020, but mere signatures do not constitute acceptance. As
stated above, an offeree must communicate his or her acceptance
to the offeror before a contract can be formed. While Singh and
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Bindra e-mailed a signed agreement to their attorney on the
afternoon of March 15, 2020, it was not transmitted to the Aroras
or the Aroras’ attorney until the morning of March 16, 2020—
nearly 10 hours after the Aroras sent an e-mail telling Singh,
Bindra, and their attorney that the counteroffer was off the table.
None of the parties’ communications after this exchange indicate
that the Aroras ever reextended their offer.
Because Singh and Bindra did not communicate their
acceptance of the Aroras’ counteroffer prior to revocation, the
counteroffer never became a binding settlement agreement. In
the words of the Apablasa court, it “amounts to nothing.”
(Apablasa, supra, 176 Cal.App.2d at p. 726.) As such, it cannot
be enforced under section 664.6.
In light of this conclusion, we need not reach the Aroras’
other arguments.
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DISPOSITION
The order enforcing the purported settlement pursuant to
section 664.6 is reversed and the judgment is vacated. The
Aroras are entitled to their costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
_____________________, J.
ASHMANN-GERST
We concur:
________________________, P.J.
LUI
_______________________, J.
HOFFSTADT
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