Adams v. Kastner

MEMORANDUM ^*

Richard L. Adams appeals from the district court’s order granting Elliott Kastner’s motion to enforce a settlement agreement between them and dismissing the diversity action with prejudice. Adams is Kastner’s judgment creditor, having obtained a $1.3 million judgment against Kastner in the United States District Court for the Eastern District of Virginia (“the Virginia judgment”). Seeking to enforce the Virginia judgment, Adams sued Kastner and Kastner’s wife, Tessa Kennedy, to enforce the judgment against real property in California and New York that Kastner had allegedly fraudulently transferred to Kennedy. The parties entered into a settlement agreement, which is the subject of this appeal.

Adams argues that Kastner’s attempt to provide the full settlement amount-by tendering a supplement to the proceeds from the agreed-upon sale of a residence in Beverly Hills, California-was not provided for in the settlement agreement; that he should therefore be allowed to pursue payment of the full balance of the Virginia judgment from Kastner; and that the district court erred by interpreting the terms of the settlement agreement to prevent him from doing so. We disagree, and affirm the district court’s decision.¹

We have jurisdiction under 28 U.S.C. § 1291, and review the district court’s interpretation of the contract de novo. Jorgensen v. Cassiday, 320 F.3d 906, 914 (9th Cir.2003); Shaw v. City of Sacramento, 250 F.3d 1289, 1293 (9th Cir.2001). Under California law, settlement agreements are interpreted according to contract principles. Weddington Prods., Inc. v. Flick, 60 Cal.App.4th 793, 71 Cal.Rptr.2d 265, 276 (Cal.Ct.App.1998); Nicholson v. Barab, 233 Cal.App.3d 1671, 285 Cal.Rptr. 441, 447 (Cal.Ct.App.1991). As the point of departure in interpreting any contract, “the court should strive to ascertain its object as reflected in the provisions thereof.” Harris v. Klure, 205 Cal.App.2d 574, 23 Cal.Rptr. 313, 315 (Cal.Ct.App.1962) (citing, inter alia, Cal. Civ.Code §§ 1636, 1638). The object of the agreement is also referred to as the “expressed objective intent of the parties.” 1 Cal. Juk.3d (Rev) Part 1 Accord and Satisfaction § 70.

In this case, the object of the settlement agreement was to settle the balance due on the judgment debt, $1.3 million plus accrued interest, for $890,000 plus interest. The agreement provided for a judicial sale of the Beverly Hills residence if the first method for procuring the settlement amount failed. But instead of the judicial sale, the parties subsequently agreed to a private market sale. The proceeds of the market sale fell short of the settlement amount by $5,388.85.

Once Kastner became aware of the amount of the shortfall, a mere two days after escrow closed on the residence, he tendered the amount necessary to reach the full settlement amount. Adams refused to accept Kastner’s tender, and insisted on pursuing Kastner for the full balance of the Virginia judgment, an amount in excess of $267,000. This harsh and inequitable approach is incompatible with a fair and reasonable interpretation of the settlement agreement construed as a whole. See Harris, 23 Cal.Rptr. at 315; Transamerica Ins. Co. v. Sayble, 193 Cal. App.3d 1562, 239 Cal.Rptr. 201, 203 (Cal. Ct.App.1987). As the district court noted, the main object of the agreement was “to discharge [Adams’] claim against Defendant Kastner for an agreed-upon amount.”

AFFIRMED.

* This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Circuit Rule 36-3.

1 . Because the parties are familiar with the facts, we include here only those facts necessary to explain our decision.