J.B.B. Investment Partners, Ltd. v. Fair

Filed 12/5/14
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION TWO
J.B.B. INVESTMENT PARTNERS, LTD.
et al.,
Plaintiffs and Respondents, A140232, A141228
v. (San Mateo County
R. THOMAS FAIR et al., Super. Ct. No. CIV522693)
Defendants and Appellants.
R. Thomas Fair (Fair), Bronco RE Corporation (Bronco), BRE Boulevard LLC
(Boulevard) and BRE Cameron Creek LLC (Cameron; collectively, defendants) appeal
from a judgment following the trial court’s grant of a motion pursuant to Code of Civil
Procedure section 664.6 by J.B.B. Investment Partners, Ltd. (JBB) and Silvester Rabic
(collectively, plaintiffs) to enforce a settlement between plaintiffs and defendants. The
trial court found that Fair’s printed name at the end of his e-mail where he had agreed to
settlement terms set forth in an e-mail from plaintiffs’ counsel was an “electronic
signature” within the meaning of California’s Uniform Electronic Transactions Act (Civ.
Code, § 1633.1 et seq.)1 (UETA) and what the trial court referred to as the “common law
of contract” or “contract case law.”
Subsequently, plaintiffs requested attorney fees pursuant to a provision in an
arbitration agreement between the parties. The trial court found plaintiffs to be the
prevailing parties but denied the request for attorney fees because the matter never
1 All further unspecified code sections refer to the Civil Code.
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proceeded to arbitration and plaintiffs had failed to show that any contract authorized fees
in the present litigation. Plaintiffs appeal from the order denying them attorney fees.
We granted plaintiffs’ opposed request to consolidate the two appeals. In the first
appeal Fair asks us to reverse the trial court’s order enforcing the settlement pursuant to
Code of Civil Procedure section 664.6 for two reasons: First, that the agreement sought
to be enforced by plaintiffs was not signed by them and, second, that the trial court erred
in determining that Fair’s printed name at the end of his e-mail was enforceable under
both UETA and, if not, by the law of contract. We decline to address the first claim
because it was not raised below, the issue is not adequately analyzed by their briefs in
this record, and the record is unclear as to the relevant facts. However, we agree with
Fair’s remaining claims regarding the ineffectuality of his printed name on the document
sought to be enforced as a settlement, and shall therefore reverse the judgment in the first
appeal.
Since plaintiffs are not the prevailing party, they are not entitled to attorney fees.
Accordingly, we affirm the order denying plaintiffs’ request for attorney fees that is
challenged in the second appeal.
BACKGROUND
Fair, an attorney and inactive member of the California State Bar, is the founder of
Bronco, and Bronco is the managing member of Boulevard and Cameron. Boulevard and
Cameron are Arizona limited liability companies formed in 2007, and they each own
apartment units in Arizona.
Rabic is a non-attorney individual investor. JBB is a limited partnership based in
Atherton, California, and Jonathan B. Buckheit is the general partner of JBB. In late
2007 and early 2008, JBB invested $150,000 and Rabic invested $100,000 in Boulevard
and Cameron, and both became members of the limited liability companies.
Subsequently, plaintiffs asserted that they had discovered defendants had made
various fraudulent representations and omissions; the parties attempted to negotiate a
settlement of those disputes. One of plaintiffs’ attorneys, Giacomo A. Russo, sent a
settlement offer by e-mail on July 4, 2013 (the July 4 offer). The July 4 offer addressed
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to Fair stated, among other things, that Fair “must represent and warrant (and provide full
disclosure that) no monies moved illegally from one entity to another[,]” that he must
enter a stipulated judgment for $350,000, and that “[a]ll litigation would be stayed
pending the payments” made by Fair.
The last section in the July 4 offer provided, in relevant part: “The Settlement
paperwork would be drafted in parallel with your full disclosure of all documents and all
information as required by the first paragraph hereof; it is a material inducement to this
settlement that you demonstrate that there is, IN FACT, not a Ponzi or Ponzi-like scheme
at work here and the misrepresentations and non-disclosures of which [plaintiffs] have
complained are, in fact, simply at most a negligent mistake on your part—as was the
failure to get signatures on the ACTUAL FULL-LENGTH LLC Operating Agreements
AND at that time, you disclosed that ‘priority’ really has NO MEANING in the context
of the ‘priority payments’ which they were promised.” This section concluded with the
following final paragraph: “WE require a YES or NO on this proposal; you need to say
‘I accept’ . . . . Anything less shifts all focus to the litigation and to the Court Orders we
will seek now as well as in the future as well as the subpoenas we will serve . . . . It is
now up to you to decide whether you would rather resolve this amicably or not. Let me
know your decision.” The July 4 offer and e-mail did not have a signature line or
signature block, and the e-mail sent to Fair did not include any signature by Rabic and
Buckheit.
Rabic and Buckheit both declared that they authorized Russo to make a final
settlement offer to defendants and that they signed the July 4 offer on July 5, 2013. Fair
declared that he did not receive the July 4 offer with the signatures of Rabic and Buckheit
until August 6, 2013.
At 10:17 a.m., on July 5, Fair sent the following e-mail to Russo from his cell
phone: “[Russo], the facts will not in any way support the theory in your e-mail. I
believe in Cameron. So I agree. Tom [F]air[.]” Russo and another attorney for plaintiffs,
Ansel J. Halliburton, responded that they did not understand Fair’s e-mail and could not
determine whether he was accepting or rejecting the settlement offer. Halliburton stated,
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“Please be unambiguous, because I am about to file the complaint and ex parte papers
unless we hear an unambiguous acceptance.”
Plaintiffs filed their lawsuit against defendants just before noon on July 5, 2013.
Counsel for plaintiffs sent an e-mail at 12:25 p.m. to Fair, which attached the filed
complaint and copies of an ex parte application for, among other things, expedited
discovery.
At 1:02 p.m., on July 5, Fair sent Halliburton the following message from his cell
phone: “I said I agree. Took wording right from [Russo’s] e-mail. I agree[.]” At 1:04
p.m., Fair left the following voicemail message for Halliburton: “Hey Ansel, I just got
your e-mail and your—and your voicemail. I was playing golf on a course that doesn’t
allow cell phones. So anyway, I thought I was quite clear on my first response, I made
another response by e-mail, I said I agree with [plaintiffs’ counsel’s] terms. You know?
So, that’s it.”
Shortly thereafter, at 1:07 p.m., Fair sent a message from his cell phone to
Halliburton and stated: “I do not believe you gave proper notice. Also I agreed with
your terms. You should mot [sic] have filed. We clearly have an agreement. [T]om
[F]air[.]” At 1:36 p.m., Fair sent by his cell phone the following message to Russo:
“Filing does not obviate agreement/acceptance. Pls acknowledge[.]”
Russo responded to Fair at 1:53 p.m. with the following e-mail: “This confirms
full agreement; I will work on the formal settlement paperwork which will conform to the
settlement agreement made today based on the 10 numbered paragraphs below with no
admission of liability or wrongdoing by anyone. I will seek to get that settlement
paperwork to you for review by Monday with the goal of getting it all finalized and
signed next week. The settlement is otherwise binding under [Code of Civil Procedure
section] 664.6 . . . .”
Two minutes later, at 1:55 p.m., Fair sent the following text message to
Halliburton: “I have accepted by phone and [e-mail]. Stop proceeding. I said accept
which is same as ‘agreed.’ You must stop and you must tell the court we have an
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agreement.” Fair also left a voice message for Russo at some unknown time on July 5,
2013.
On July 11, 2103, Halliburton sent to Fair a draft of the final settlement (July 11
writing). This writing specified the names of plaintiffs and defendants and stated that the
agreement was between them. It advised that the agreement could be “signed and
delivered by facsimile” and that it could be “electronically signed” by each party. It also
included signature blocks for each party.
On July 16, Halliburton sent an e-mail to Fair stating that he had not heard from
Fair. In a separate e-mail, he indicated that he would get [Rabic’s] signature once he
received Fair’s signature and a check for the initial payment. A few days later, on July
18, Fair responded that he expected to have comments for Halliburton by the following
day and that his attorney had been out of town but was returning that day.
Fair sent an e-mail to Halliburton on July 19, and stated that he had spoken to his
accounting firm and the firm suggested a call or a meeting to discuss “the unfounded
suspicions and allegations of your clients.” Halliburton, responding by e-mail on that
same day, said, in relevant part: “It’s a good thing we have a settlement, then; let’s put
pen to paper and close it.” “We are not going to stay anything until we have a signed
deal.”
Fair did not sign the July 11 writing.
On August 6, 2013, plaintiffs filed a motion pursuant to Code of Civil Procedure
section 664.6 to enforce the settlement. In support of the motion, plaintiffs submitted the
various e-mail, voicemail, and text communications between Fair and their attorneys on
July 5, 2013. They also submitted the videotaped deposition of Fair. At his deposition,
Fair acknowledged that he deliberately typed his name when his name appeared at the
end of an e-mail message and that his phone or software did not automatically place his
name there. When asked whether he thought he had an agreement when he sent his
e-mail on July 5, 2013, Fair replied: “I thought I had agreed to terms that were suggested
in an e-mail during the morning, which had become moot, but I didn’t know it until I
reviewed all of this stuff later. I didn’t read that long e-mail of the morning until maybe a
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couple of days later.” When asked why he believed the agreement had become moot, he
answered: “Because they did file, and I changed my mind.”
In opposition to the motion, Fair filed, among other things, his declaration. He
maintained that Russo’s statements that he would contact other investors or go to
newspapers to disclose “frivolous allegations” against defendants had made him fearful
in July 2013. Additionally, he had not slept during the first week of July 2013 because he
had to check repeatedly on his ailing mother. He noted that he was not represented by
counsel when he sent the messages to plaintiffs and their counsel and his messages “were
sent under severe duress, in particular because [p]laintiffs’ counsel was barraging me
with phone calls and e-mails, and demanding the names of the other investors in the
[limited liability companies]—threatening to contact the other members of the [limited
liability companies].” He insisted that his e-mail messages on July 5, 2013, simply
signified his good faith and desire to work out a settlement. He asserted that there was no
meeting of the minds and that he had not read more than the first paragraph of the July 5
offer. He declared that he did not consider his name on the e-mail to be a signature to a
settlement agreement. He maintained that he did not sign important legal documents,
such as settlement agreements, without the assistance of counsel.
The superior court held a hearing on plaintiffs’ motion to enforce the settlement
under Code of Civil Procedure section 664.6 on October 18, 2013.2 At its
commencement the court advised counsel that it “had some real problems with Mr. Fair’s
declaration as far as credibility, I’ll tell you that at the start,” and the court felt entitled to
take “the comparative credibility of the witnesses” into account. Indicating credibility
was not the question, counsel for Fair answered that the central issue was whether there
was an electronic signature that satisfied the requirements of UETA. Fair’s printed name
did not satisfy UETA, counsel insisted, because the July 7 offer did not authorize an
electronic signature, nor did any other communication between the parties prior to the
2 The court also heard defendants’ motion to compel arbitration. The court
denied this motion on the basis of waiver.
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draft final settlement Halliburton sent Fair on July 11, which did state that it could be
“electronically signed.” Counsel for the plaintiffs agreed that whether Fair’s printed
name complied with UETA was the chief issue but maintained that it clearly complied,
resting on the provision of UETA which states that “[i]f a law requires a signature, an
electronic record satisfies the law.” (§ 1633.7, subd. (d).)
As will be seen, although the court wondered how plaintiff’s counsel can “be here
asking me under [Code of Civil Procedure section] 664.6 to enforce a settlement that you
didn’t yourself think was binding” when counsel sent Fair a draft final settlement on July
11, the court adopted plaintiffs’ contention.
It is clear from the court’s explanation of its granting of plaintiffs’ motion to
enforce the settlement that it conceived the chief issue to be whether there was a meeting
of the minds as to the terms of the settlement, which is a factual question. As the court
stated, “I think that the preponderance of the evidence that’s in front of me here is that
there was an agreement struck on July 5th. It may not have been reduced to the more
formal writing signed by both sides, but I think that there was more likely than not Mr.
Fair’s agreement that the matter had been settled according to what the e-mails and the
voice mails said. [¶] The reason why I’m not stating that in more detail is that would
have to go into things that are under seal, under the sealing order, but I think that is the
case. And so that makes a commercial sense in my view because we have sophisticated
parties on both sides.”
The trial court continued: “You have at that point in time the equivalent of a
situation of yesteryear that would have been not electronic where a lot of deals were done
on backs of envelopes and maybe at that point down the road the parties would get
lawyers to draft a more formal agreement. But there is older case law that recognizes that
a preliminary scribbling like that, if it entailed out all of the materials [sic], it was good
enough for a contract to warrant to be in place [sic].”
The trial court concluded that there was a settlement and that Fair was not under
duress but “knew exactly what he was doing.” The court emphasized that “[t]here is no
coercion or duress here.” The court said it was following the federal case law and finding
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that the e-mail coupled with the corroborating voicemail qualified as an “electronic
signature” under UETA. The court added that, even if it should not follow the guidance
of the federal case law, it found “that the communications that went back and forth
electronically are tantamount to today’s modern version of telegrams that used to go back
and forth in the commercial world and follow the old cases.” The court certified its
ruling for interlocutory appeal under Code of Civil Procedure section 166.1.
On November 1, 2013, the trial court filed its judgment granting plaintiffs’ motion
to enforce the settlement. The court found that plaintiffs proved by a preponderance of
the evidence that Fair, on behalf of all defendants, “did more likely than not agree to a
settlement with counsel for [p]laintiffs by e-mail on July 5, 2013, confirmed by later e-
mails and voicemails.” The court found that the e-mails “include electronic signatures
within the meaning of” UETA and “[p]laintiffs provided sufficient evidence that Mr. Fair
deliberately typed his name at the end of those e-mails. Those e-mails were further
corroborated with later e-mails and voice mails, as reflected in the record.” The court
added, “even without resort to the UETA and instead under contract common law, Mr.
Fair’s July 5 communications constitute acceptances of [p]laintiffs’ offer to settle. The
court follows the reasoning set out in Lamle v. Mattel [(Fed. Cir. 2005) 394 F.3d 1355
(Lamle)], as well as prior California cases finding typed names on telegrams sufficient to
form a contract. . . .” The court concluded: “As stated on the record, the court is of the
opinion that there are ‘substantial grounds for difference of opinion’ regarding the court’s
resolution of this motion” and “there is no California case law to guide the court’s
opinion, and the appellate court should look into this matter.” The court retained
jurisdiction to enforce the judgment.
On November 7, 2013, the trial court entered final judgment in favor of plaintiffs
and ordered defendants to pay plaintiffs $362,810.96. Defendants filed a timely notice of
appeal.
On December 11, 2013, plaintiffs moved for costs and attorney fees under section
1717 and the attorney fees clause in the arbitration agreement. The trial court found that
no contract authorized fees in the present litigation and denied plaintiffs’ request for
8
attorney fees; it awarded plaintiffs costs in the amount of $4,567.54. Plaintiffs filed a
timely notice of appeal from this order.
On June 6, 2014, plaintiffs filed in this court a motion to consolidate defendants’
appeal of the judgment and plaintiffs’ appeal of the denial of attorney fees. Defendants
opposed the motion. We granted plaintiffs’ motion to consolidate. Plaintiffs also filed a
motion to dismiss defendants’ appeal and a request for judicial notice based on their
argument that Fair had violated various court orders in superior courts. We denied the
motion to dismiss and the request for judicial notice.
DISCUSSION
I.
Defendants’ Appeal
A. Standard of Review
“Although a judge hearing a [Code of Civil Procedure] 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.” (Weddington Productions, Inc. v. Flick (1998) 60
Cal. App. 4th 793, 810, italics omitted.)
“The trial court’s factual findings on a motion to enforce a settlement pursuant to
[Code of Civil Procedure] section 664.6 ‘are subject to limited appellate review and will
not be disturbed if supported by substantial evidence.’ ” (Osumi v. Sutton (2007) 151
Cal. App. 4th 1355, 1360.) “Consistent with the venerable substantial evidence standard
of review, and with our policy favoring settlements, we resolve all evidentiary conflicts
and draw all reasonable inferences to support the trial court’s finding that these parties
entered into an enforceable settlement agreement and its order enforcing that agreement.”
(Ibid.)
In this case, as we have said, the trial court focused primarily on whether the
parties had a meeting of the minds regarding settlement, which is a factual question.
Accordingly, the court’s determination that there was such a meeting of the minds is
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subject to limited review and will not be disturbed if supported by substantial evidence.
(Williams v. Saunders (1997) 55 Cal. App. 4th 1158, 1162) However, whether the
granting of plaintiffs’ motion satisfied the strict requirements of Code of Civil Procedure
section 664.6, including the requirement that all parties sign the agreement, and whether
Fair’s printed name constituted an “electronic signature” within the meaning of UETA or
under the law of contract, are legal issues, so that we conduct an independent or de novo
review of those most crucial determinations.
B. The Trial Court Failed to Inquire Whether, as Required by Code of Civil Procedure
Section 664.6, all Plaintiffs Signed the Settlement Agreement, but Fair Waived the
Issue by Failing to Raise it in the Trial Court
As material, Code of Civil Procedure section 664.6 provides: “If parties to
pending litigation stipulate, in a writing signed by the parties outside the presence of the
court . . . for settlement of the case, or part thereof, the court, upon motion, may enter
judgment pursuant to the terms of the settlement.” “Because of its summary nature, strict
compliance with the requirements of [Code of Civil Procedure] section 664.6 is
prerequisite to invoking the power of the court to impose a settlement agreement.”
(Sully-Miller Contracting Co. v. Gledson/Cashman Construction, Inc. (2002) 103
Cal. App. 4th 30, 37 (Sully-Miller).) Settlement of a lawsuit implicates a substantial right
of the litigants; therefore, the Supreme Court has concluded that “parties” in Code of
Civil Procedure section 664.6 means the litigants personally and does not include their
attorneys of record (Levy v. Superior Court (1995) 10 Cal. 4th 578, 584, 586), even if the
parties expressly authorized the agent to enter into a settlement on their behalf (see Gauss
v. GAF Corp. (2002) 103 Cal. App. 4th 1110, 1162-1164). “The litigants’ direct
participation tends to ensure that the settlement is the result of their mature reflection and
deliberate assent.” (Levy, at p. 585.) Thus, the statute “require[s] the signatures of the
parties seeking to enforce the agreement under [Code of Civil Procedure] section 664.6
and against whom the agreement is sought to be enforced.” (Harris v. Rudin, Richman &
Appel (1999) 74 Cal. App. 4th 299, 305.)
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In Levy v. Superior Court, supra, 10 Cal. 4th 578, the Supreme Court made clear
that an agreement to settle cannot be enforced under Code of Civil Procedure section
664.6 unless it is signed by all of the litigating parties. (Levy, at p. 586; accord, Sully-
Miller, supra, 103 Cal.App.4th at p. 37 [“A written settlement agreement is not
enforceable under [Code of Civil Procedure] section 664.6 unless it is signed by all of the
parties to the agreement, not merely the parties against whom the agreement is sought to
be enforced.”]; Harris v. Rudin, Richman & Appel, supra, 74 Cal.App.4th at p. 305 [“We
read the statute’s requirement of a writing ‘signed by the parties’ to require the signature
of the parties seeking to enforce the agreement under [Code of Civil Procedure] section
664.6 and against whom the agreement is sought to be enforced”].)
Astonishingly, the trial court never inquired on the record whether all of the
parties signed the agreement plaintiffs sought to enforce, let alone make the express
finding that all parties signed that agreement, as required by the case law interpreting
Code of Civil Procedure section 664.6 just cited, and Fair never raised the issue until
now. Furthermore, the record is not entirely clear regarding the facts,3 and the briefs of
3 The record on appeal contains documents filed under seal in the superior court.
These documents include separate declarations of Buckheit and Rabic in which each
states that he signed the July 4 offer on July 5, 2013, and that the attached exhibit is the
signed offer. The exhibit attached to Rabic’s declaration includes the July 4 offer and has
his signature at the end of the offer, next to Russo’s printed name. The exhibit attached
to Buckheit’s declaration has the July 4 offer and e-mail messages from both Fair and
Russo, but Buckheit’s signature is not on the July 4 offer or on Russo’s e-mail.
On August 6, 2014, we issued an order directing plaintiffs’ counsel to submit to
this court the July 4 offer that Buckheit signed on July 5, 2013, if this document was, in
fact, part of the record in the trial court. Our order stated that “[t]he document submitted
to this court must have a file-stamp or otherwise establish that it was part of the record in
the trial court.”
In response to our order, Christopher Sargent, one of the attorneys for plaintiffs,
submitted a declaration of Buckheit dated August 5, 2013, in which he states that he
“signed a copy of Mr. Russo’s settlement offer, which I am informed and believe that Mr.
Fair accepted on July 5” and attaches a copy of that document to the declaration. The last
page of the document contains a large bolded box in which is stated “Agreed to and
accepted on July 5, 2013” followed by the signature of Jonathan B. Buckheit. The
exhibit to the declaration of Buckheit provided us by attorney Sargent—which is not
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the parties in this court do not adequately address the issues. For those reasons, and also
because our ruling on Fair’s other claim renders the issue moot, we decline to address his
claim that the agreement sought to be enforced under Code of Civil Procedure section
664.6 was not signed by all of the parties.
C. Fair’s Printed Signature Was Not An “Electronic Signature” Within the Meaning
of UETA
At the hearing on the motion pursuant to Code of Civil Procedure section 664.6,
counsel for the parties both stated that, in their view, the dispositive issue was whether
Fair’s printed signature on the e-mail responding to Russo’s July 4 e-mail constituted an
“electronic signature” within the meaning of UETA. According to counsel for Fair, Civil
Code section 1633.7 is “really the meat of all of the issues that we are going to get to
today, whether there was a signature or not, and I think that that is driving everything.”
Section 1633.7 provides that “(a) A record or signature may not be denied legal effect of
enforceability solely because it is in electronic form. [¶] (b) A contract may not be
denied legal effect or enforceability solely because an electronic record was used in its
formation. [¶] (c) If a law requires a record to be in writing, an electronic record
satisfies the law. [¶] (d) If a law requires a signature, an electronic signature satisfies
the law.” (Italics added.)
Counsel’s argument that Fair’s printed name was not an “electronic signature”
within the meaning of the statute consisted of three points: First, that in subsequent e-
mails to Fair, Russo, and Halliburton repeatedly indicated that there can be no genuine
settlement until a formal agreement had been drafted “signed and delivered by facsimile”
and thereafter “electronically signed.” As Halliburton stated in one of his subsequent e-
mails, “ ‘Once we have your signature [on a final agreement] we will have the other
plaintiff come in for his signature and we can be done.’ ” Counsel maintained, in other
Bates Stamped—is identical to the declaration of Buckheit and exhibit thereto in the
record on appeal provided by the San Mateo Superior Court, except for two things: The
declaration and exhibits in the record provided by the superior court are all Bates stamped
and, as noted earlier, the exhibit is not signed by Buckheit. In other words, it is not clear
whether the exhibit containing Buckheit’s signature was presented to the trial court.
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words, that there was no meeting of the minds as to a final agreement at the time Fair
printed his name on the e-mail offer. Second, counsel argued the July 4 settlement offer
indicated that, if the parties agreed, “there will be no litigation; everything would be
stayed, ” so that, even if there was a settlement agreement, by filing the complaint on July
5 the plaintiffs either withdrew or breached it. Finally, counsel pointed out that, at the
time Fair printed his name on the July 4 e-mail, none of the correspondence between the
parties authorized the use of an electronic signature, such as that later included in the July
11 writing.
Counsel for plaintiffs agreed that section 1633.7 was controlling, but maintained
that it definitively established that Fair’s printed name was an “electronic signature”
within the meaning of the UETA. Given the simplicity of the pertinent provision—“If
the law requires a signature, an electronic signature satisfies the law” (§ 1633.7, subd.
(d).)—counsel for plaintiffs felt there was no need to consult the case law or any other
legal authority.
After the court pointed out that by proffering the July 11 draft settlement his
clients did not act as if they had an executed final settlement after Fair printed his name
on the July 4 offer, the court asked plaintiffs’ counsel “how can you be here asking me
under [Code of Civil Procedure] 664.6 to enforce the settlement that you didn’t yourself
think was binding.” Counsel answered that plaintiffs “are not seeking to enforce that July
11th document; we are seeking to enforce the July 5th agreement which has ten clear,
precise numbered paragraphs; that’s what we are seeking to enforce. We are seeking to
enforce against all of the defendants because doing anything else wouldn’t make any
sense,” and “Mr. Fair controls all of those defendants. So when he says, ‘I agree; I
accept’ he is speaking for all of them, clearly by context.”
The trial court adopted plaintiffs’ view. Finding that, a preponderance of the
evidence showed that an agreement was struck on July 5th, the court reasoned that it was
“more likely than not Mr. Fair’s agreement that the matter had been settled according to
what the e-mails and the voicemails said.” Referring to section 1633.7, the court also
13
found that “the e-mails in this case coupled with the corroborating voice mail can qualify
as an electronic signature under the statute.”
The views of counsel to the contrary notwithstanding, section 1633.7 is not the
provision of UETA most applicable to the motion before the court, and the court’s
determination that Fair’s printed name was an enforceable “electronic signature” was
manifestly erroneous.
Under UETA (§ 1633.1 et seq.), which became effective January 1, 2000, an
electronic record satisfies the requirement that a record be in writing (§ 1633.7, subd.
(c)), and an electronic signature satisfies the requirement that the writing be signed
(§ 1633.7, subd. (d)). “An electronic record or electronic signature is attributable to a
person if it was the act of the person. The act of the person may be shown in any
manner . . . .” (§ 1633.9, subd. (a); see also Ni v. Slocum (2011) 196 Cal. App. 4th 1636,
1647 [“the Legislature has, through these provisions, expressed general approval of the
use of electronic signatures in commercial and governmental transactions”].)
Section 1633.2, subdivision (h) defines an “ ‘[e]lectronic signature’ ” as “an
electronic sound, symbol, or process attached to or logically associated with an electronic
record and executed or adopted by a person with the intent to sign the electronic record.”
UETA applies, however, only when the parties consent to conduct the transaction by
electronic means. (§ 1633.5, subd. (b).) “Whether the parties agree to conduct a
transaction by electronic means is determined from the context and surrounding
circumstances, including the parties’ conduct. . . .” (Ibid.) “A party that agrees to
conduct a transaction by electronic means may refuse to conduct other transactions by
electronic means. . . .” (§ 1633.5, subd. (c).)
Nothing in the record indicates counsel or the court were aware of any of the
provisions of UETA just cited, other than section 1633.7, or appreciated the complexity
of the statutory scheme. Focusing only on section 1633.7, the court appears to have
simplistically assumed, as did counsel for plaintiffs, that because Fair admitted at
deposition that the signature was his, and the signature was indisputably electronic, the
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printed signature on the July 4 offer was therefore an “electronic signature” within the
meaning of UETA.
We agree that a printed name or some other symbol might, under specific
circumstances, be a signature under UETA and might satisfy the even more rigorous
requirements under Code of Civil Procedure section 664.6. Courts in other jurisdictions
that have adopted a version of UETA have concluded that names typed at the end of e-
mails can be electronic signatures. (See, e.g., Preston Law Firm, L.L.C. v. Mariner
Health Care Mgmt. Co. (5th Cir. 2010) 622 F.3d 384, 391 [affirming that “[e]mails can
qualify as the signed writings needed to form contracts” under Louisiana’s UETA];
Cloud Corp. v. Hasbro, Inc. (7th Cir. 2002) 314 F.3d 289, 295-296 [holding that “the
sender’s name on an e-mail satisfies the signature requirement of the [Illinois] statute of
frauds” and noting that it would be a valid signature under the federal Electronic
Signatures in Global and National Commerce Act as well]; see also Lamle, supra, 394
F.3d at p. 1362 [e-mail was written prior to the enactment of California’s UETA but court
opined that inclusion of individual’s name on e-mail would be valid signature under
California’s UETA]; Gillis v. Wells Fargo Bank (E.D. Mich. 2012) 875 F. Supp. 2d 728,
734-735 [signed letter and e-mail messages that included the sender’s salutation were
sufficient to satisfy statute of frauds].)
The trial court’s analysis was incomplete. Attributing the name on an e-mail to a
particular person and determining that the printed name is “[t]he act of [this] person” is a
necessary prerequisite but is insufficient, by itself, to establish that it is an “electronic
signature.” (§ 1633.9, subd. (a).) As counsel and the court seemed unaware, UETA
defines the term “electronic signature.” Subdivision (h) of section 1633.2 states that
“ ‘[e]lectronic signature’ means an electronic sound, symbol, or process attached to or
logically associated with an electronic record and executed or adopted by a person with
the intent to sign the electronic record.” (Italics added. See also Cal. Civ. Jury Inst. No.
380 [party suing to enforce an agreement formalized by electronic means must prove
“based on the context and surrounding circumstances, including the conduct of the
parties, that the parties agreed to use [e.g., e-mail) to formalize their agreement”].)
15
We have independently reviewed the record and conclude, as a matter of law, that
it does not show that Fair printed his name at the end of his e-mail with any intent to
formalize an electronic transaction. Indeed, substantial evidence in the record refutes
such a finding.
“Whether the parties agree to conduct a transaction by electronic means is
determined from the context and surrounding circumstances, including the parties’
conduct. . . .” (§ 1633.5, subd. (b).) The absence of an explicit agreement to conduct the
transaction by electronic means is not determinative; however, it is a relevant factor to
consider.
Plaintiffs argue that the July 4 offer expressly contemplated acceptance by
electronic means as it specified that Fair needed to say, “I accept.” They also cite Fair’s
testimony that he personally typed his name and that he refused to sign the July 11
writing because he had simply changed his mind. Plaintiffs’ evidence is legally
insufficient.
The exchange of e-mail messages shows that the parties clearly agreed to negotiate
the terms of the settlement by e-mail, but plaintiffs did not demonstrate, as they must
(§ 1633.5, subd. (b)), that the parties ever agreed to conduct transactions by electronic
means or that Fair intended with his printed name at the end of his e-mail to sign
electronically the July 4 offer. The July 4 offer did not contain any statement indicating
that the parties agreed to enter into a final settlement by electronic means. The plain
language of the July 4 offer made it clear that no signature was being requested as the
offer included no signature line or signature block, contained no signature by any of the
plaintiffs, and advised that future paperwork was forthcoming. The last section in the
July 4 offer provided that “[t]he Settlement paperwork would be drafted . . . .”
Additionally, this section advised that plaintiffs require “a YES or NO on this proposal;
you need to say ‘I accept[.]’ ” (Italics added.) The last sentence in this section stated:
“Let me know your decision.” None of these sentences in the July 4 offer supports a
conclusion that the parties agreed that Fair’s agreement to the proposal was an agreement
to sign a legally binding settlement. (See Sully-Miller, supra, 103 Cal.App.4th at p. 37 [a
16
party’s signature added “to a document that does not call for it” is not a signed writing
under Code of Civil Procedure section 664.6 because “[a] party’s signature fails to
convey” knowledge and express consent “unless it is contained in a document that was
clearly intended by that party to be a binding settlement agreement”]; Powell v. City of
Newton (2010) 364 N.C. 562 [703 S.E.2d 723, 727-728] [applying North Carolina’s
UETA and concluding that the parties did not agree to the use of electronic signatures
“[i]n light of the express indication by [one party] that [the other party] should sign and
forward the [agreements]”].) Moreover, Fair’s subsequent voicemail and text messages
from his cell phone did not indicate that he intended for his e-mail to be a signature to the
electronic record as he simply stated that he “agree[d] with” or accepted Russo’s terms.
Subsequently, the statements of plaintiffs’ counsel provided further evidence that
no party considered the July 4 offer attached to the July 5 e-mail as a final document
requiring a signature. Russo stated that Fair’s response “confirms full agreement” and he
promised to work “on the formal settlement paperwork” and “get the settlement
paperwork” for Fair’s review “with the goal of getting it all finalized and signed next
week.” He added that the “settlement is otherwise binding under” Code of Civil
Procedure section 664.6, but the settlement could not be binding without all of the
parties’ signatures. Halliburton sent Fair an e-mail on July 19, 2013, stating in relevant
part: “It’s a good thing we have a settlement, then; let’s put pen to paper and close it.”
“We are not going to stay anything until we have a signed deal.”
In contrast to the July 4 offer, the July 11 writing included a signature line at the
end of the settlement agreement. Additionally, it specified that an electronic signature
could be used. The July 11 writing provided: “This Settlement Agreement may be
signed and delivered by facsimile and in counter-parts. It may also be electronically
signed by each of the Parties through the use of EchoSign, DocuSign, or such other
commercially available electronic signature software which results in confirmed
signatures delivered electronically to each of the Parties, which shall be treated as an
original as though in-signed by officers or other duly authorized representatives of each
Party.” No similar language was in the July 4 offer and, as already stressed, the July 4
17
offer did not indicate that a printed name at the bottom of an e-mail would be an
electronic signature.
Accordingly, we conclude that the evidence in the record is as a matter of law
insufficient to establish that Fair signed electronically a settlement agreement. Since
Fair’s printed name was not a signature under UETA, the trial court erred when it
concluded that Fair’s printed name at the bottom of the e-mail satisfied the strict
signature requirements under Code of Civil Procedure section 664.6.4
D. Fair’s Printed Name on the E-Mail Was not a Signature Under the Law of
Contract
The trial court provided an independent basis for concluding that Fair signed a
settlement agreement that was enforceable under Code of Civil Procedure section 664.6.
The court ruled that Fair’s July 5 communications constituted an acceptance under what
4 In his declaration, Fair stated that he never received the July 4 offer with the
signatures of Rabic and Buckheit until August 6, 2013. We need not consider whether
plaintiffs’ signatures, which were on documents without signature lines and not sent to
Fair until August 6, 2013, satisfied the signature requirements of Code of Civil Procedure
section 664.6. (See Sully-Miller, supra, 103 Cal.App.4th at p. 37 [documents by
defendant’s counsel that only called for plaintiffs’ signature and had defendant’s belated
and undated signature at the end of the documents was not enforceable under Code of
Civil Procedure section 664.6 because “[t]he purpose of [Code of Civil Procedure]
section 664.6’s signed writing requirement—to provide unequivocal proof of the parties’
intent to enter a binding settlement—would be frustrated if courts enforced written
agreement pursuant to that section where, as here, the agreement only contemplates the
signature of one party”].)
Additionally, we need not consider Fair’s other arguments that the July 4 offer did
not contain all of the material terms; litigation was not pending when Fair first responded
to the July 4 e-mail; the July 4 offer was rescinded when plaintiffs filed their lawsuit
since a material term of the offer was that all litigation would be stayed; Fair was under
duress when he responded to plaintiffs’ counsel; Code of Civil Procedure section 664.6
must be satisfied with a single writing, not with multiple communications; plaintiffs were
estopped from claiming an agreement was reached; and, even if Fair’s printed e-mail was
a signature, the agreement was not enforceable under Code of Civil Procedure section
664.6 because none of the other defendants signed the agreement.
We also express no opinion as to whether plaintiffs can enforce the July 4 offer by
another method, such as a motion for summary judgment for breach of contract.
18
it referred to as “contract common law.” The court elaborated: “[The settlement] may
not have been reduced to the more formal writing signed by both sides, but I think that
there was more likely than not Mr. Fair’s agreement that the matter had been settled
according to what the e-mails and the voice mails said.” The court cited Lamle, supra,
394 F.3d 1355, “as well as prior California cases finding typed names on telegrams
sufficient to form a contract. . . .”
Under Code of Civil Procedure section 664.6, the trial court had to find that all of
the parties signed the settlement agreement. It was error to enforce the settlement
agreement under this summary procedure upon a finding that it “was more likely than
not” Fair had agreed to settle.
Furthermore, a typed name at the end of an e-mail is not, by itself, a signature
under case law. Courts have held that typed names appearing on the end of telegrams or
names typewritten are, in certain circumstances, sufficient to be a signature to satisfy the
California statute of frauds. (Lamle, supra, 394 F.3d 1355; see also, Brewer v. Horst &
Lachmund Co. (1900) 127 Cal. 643; McNear v. Petroleum Export Corp. (1929) 208 Cal.
162; Marks v. Walter G. McCarty Corp. (1949) 33 Cal. 2d 814.) But none of these cases
involved Code of Civil Procedure section 664.6, and thus far no court has held that a
printed name satisfies the strict signature requirements of this statute.5
5 Plaintiffs cite to a New York decision, Forcelli v. Gelco Corp. (2013) 972
N.Y.S.2d 570 [109 A.D.3d 244], which held that an e-mail message from an automobile
insurer’s claims adjuster, confirming an oral settlement between the insurer and plaintiff,
was a binding written settlement agreement and enforceable under New York’s statute.
New York’s statute permits enforcement of a stipulated agreement that is in writing but,
unlike California’s statute, the party’s attorney may sign the agreement. (Id. at p. 248.)
In Forcelli, the court explained that the face-to-face mediation at which settlement was
attempted and the subsequent follow-up telephone calls between the parties supported the
conclusion that there was an intent to subscribe the e-mail. (Id. at p. 251.) The court
held “that where, as here, an email message contains all material terms of a settlement
and a manifestation of mutual accord, and the party to be charged, or his or her agent,
types his or her name under circumstances manifesting an intent that the name be treated
as a signature, such an email message may be deemed a subscribed writing within the
meaning” of the New York statute “so as to constitute an enforceable agreement.” (Ibid.)
19
Even if a printed name can satisfy the signature requirements of Code of Civil
Procedure section 664.6, a printed name is not a signature under contract law simply
because the person deliberately printed his or her name. “[I]t is a universal requirement
that the statute of frauds is not satisfied unless it is proved that the name relied upon as a
signature was placed on the document or adopted by the party to be charged with the
intention of authenticating the writing.” (Marks v. Walter G. McCarty Corp., supra, 33
Cal.3d at p. 820, italics added.) The evidence must also demonstrate that the person
printing his or her name intended to execute the document. Here, as already discussed,
the record is devoid of any evidence demonstrating that Fair intended to execute a
settlement agreement by electronic means when he printed his name at the end of his e-
mail.
Obviously, a New York case is not binding on our interpretation of California
contract law or the requirements for a signature under California’s Code of Civil
Procedure section 664.6. Forcelli v. Gelco Corp., supra, 109 A.D.3d 244 is also not
persuasive because it is clearly distinguishable from the present case. The court in
Forcelli stressed the following: The e-mail message “set forth the material terms of the
agreement, to wit, the acceptance by the plaintiffs’ counsel of an offer of $230,000 to
settle the case in exchange for a release in favor of the defendants, and contained an
expression of mutual assent. Significantly, the settlement was not conditioned on any
further occurrence, such as the outcome of the motion for summary judgment or the
formal execution of the release and stipulation of dismissal by these defendants and
related entities [citation].” (Id. at p. 248.) In contrast, here, Fair’s printed name was not
at the bottom of the actual proposed agreement; Fair’s e-mail was in response to the
electronic offer. Furthermore, unlike the situation in Forcelli, the July 4 offer was
conditioned on the formal writing of the agreement. Finally, and most significantly, as
discussed fully below, the record in Forcelli showed an intent to subscribe the e-mail; the
record before us does not demonstrate that Fair intended to subscribe the e-mail.
20
II.
Plaintiffs’ Appeal
Plaintiffs appeal the trial court’s denial of their request for attorney fees. The trial
court found that plaintiffs were the prevailing party but “the contract upon which they
rely as authorization for an award of fees only authorizes an award of attorney’s fees to
the party prevailing in arbitration. Plaintiffs have not shown the existence of any
contractual provision authorizing the award of attorney’s fees incurred in litigation.”
Code of Civil Procedure section 1021 provides: “Except as attorney’s fees are
specifically provided for by statute, the measure and mode of compensation of attorneys
and counselors at law is left to the agreement, express or implied, of the parties; but
parties to actions or proceedings are entitled to their costs, as hereinafter provided.”
Plaintiffs maintain that the arbitration agreement provided for attorney fees to the
prevailing party and that they are entitled to fees under this agreement6 and section 1717.
On appeal from an attorney fees order under section 1717, the trial court has wide
discretion in determining which party has prevailed and we will not disturb that
determination unless “a manifest abuse of discretion, a prejudicial error of law, or
necessary findings not supported by substantial evidence” is demonstrated. (Yield
Dynamics, Inc. v. TEA Systems Corp. (2007) 154 Cal. App. 4th 547, 577.) If the court’s
ruling is correct on any legal theory, the judgment will be affirmed. (Rappleyea v.
Campbell (1994) 8 Cal. 4th 975, 980-981.)
We need not address plaintiffs’ argument that they are entitled to attorney fees
under the arbitration agreement and section 1717. As discussed above, we are reversing
the trial court’s order granting plaintiffs’ request to enforce the settlement pursuant to
Code of Civil Procedure section 664.6 and vacating the judgment in favor of plaintiffs.
Thus, plaintiffs are not the prevailing party, as is required for attorney fees under both
6 The arbitration agreement reads: “The Member initiating the arbitration shall
pay the costs, deposits and expenses of such arbitration and the prevailing party shall be
awarded its attorneys’ fees and expenses, in addition to all other relief awarded by the
arbitrators . . . .”
21
section 1717 and the arbitration agreement. Consequently, we conclude that the trial
court’s order denying plaintiffs’ request for attorney fees is correct.
DISPOSITION
The order enforcing the settlement pursuant to Code of Civil Procedure section
664.6 is reversed and the judgment is vacated. We affirm the order denying plaintiffs’
attorney fees. Defendants are awarded costs in both appeals.
_________________________
Kline, P.J.
We concur:
_________________________
Richman, J.
_________________________
Stewart, J.
J.B.B. Investment Partners, Ltd. et al. v. Fair et al. (A140232, A141228)
22
Trial Court: San Mateo County Superior Court
Trial Judge: Hon. Gerald J. Buchwald
Attorneys for Appellants: The Baldwin Law Group
Patrick Baldwin
Christopher Paul Mader
Attorneys for Respondents: ComputerLaw Group LLP
Giacomo A. Russo
Ansel Jay Halliburton
23