Opinion
B310721
09-20-2022
BAKER ENTERTAINMENT GROUP, LLC, et al., Plaintiffs and Respondents, v. EMMETT FURLA OASIS FILMS, LLC, et al., Defendants and Appellants.
Loeb & Loeb, Donald A. Miller and Todd J. Densen, for Plaintiffs and Respondents. Hamrick & Evans, A. Raymond Hamrick III, Martin J. Barab, Kenneth A. Kotarski and Shiam V. Brisbois, for Defendants and Appellants.
NOT TO BE PUBLISHED
APPEAL from a Judgment of the Superior Court of Los Angeles County No. SC127979, Craig D. Karlan, Judge. Affirmed.
Loeb & Loeb, Donald A. Miller and Todd J. Densen, for Plaintiffs and Respondents.
Hamrick & Evans, A. Raymond Hamrick III, Martin J. Barab, Kenneth A. Kotarski and Shiam V. Brisbois, for Defendants and Appellants.
WISE, J. [*]
INTRODUCTION
Emmett Furla Oasis Films, LLC ("EFO") appeals from the judgment entered upon an order granting Baker Entertainment Group, LLC's ("Baker") motion under Code of Civil Proceduresection 664.6 to enforce a settlement agreement between Baker and EFO. EFO argues the trial court exceeded its authority under section 664.6 by determining that EFO anticipatorily repudiated the settlement agreement and thus erred in ordering EFO to immediately pay the balanced owed under the settlement agreement. EFO further argues substantial evidence did not support the finding it repudiated the settlement agreement, and the trial court erred in denying its request for an evidentiary hearing on the section 664.6 motion. EFO's claims are without merit. We affirm.
All statutory references are to the Code of Civil Procedure unless otherwise indicated.
FACTUAL AND PROCEDURAL BACKGROUND
A. Motion Picture Agreement
In 2015 Baker and EFO entered into an agreement to cofinance and co-produce two feature-length motion pictures respectively titled "Inconceivable" and "Fate." However, according to Baker, after it provided the financing for the first film, "Inconceivable," EFO failed to perform its obligations under the agreement.
On August 18, 2017, Baker filed a civil action against EFO (Baker Entertainment, LLC, et al. v. Emmett Furla Oasis Films, LLC, et al. (Super. Ct. Los Angeles County, 2017, No. SC127979)), asserting, among various causes of action, breach of contract, fraud and breach of fiduciary duty arising out of the financing and production of "Inconceivable." Baker also filed a demand for arbitration before the Independent Film and Television Alliance, International Arbitration Tribunal (the "Arbitration"), asserting claims against EFO. EFO filed a counterclaim against Baker in the Arbitration.
B. Settlement Agreement
On August 27, 2019, the parties entered into a settlement agreement to resolve all pending and potential claims and crossclaims in the civil case and the Arbitration (the Settlement Agreement). Among its terms, the Settlement Agreement required EFO to pay Baker $640,000 within 24 months of the execution of the agreement, with the last installment payment due no later than August 27, 2021. The Settlement Agreement permitted EFO to pay the amount owed in eight quarterly installments of $80,000 each, with the first payment due no later than 90 days after execution of the agreement and the remaining installments payable every three months thereafter. (Settlement Agreement at § 3.1.1.)
Section 6.11 of the Settlement Agreement specified the agreement could only be amended through a signed writing of the parties. Section 3.1.2 provided that EFO's failure to timely satisfy its payment obligations would constitute an "Event of Default." If there was an Event of Default, Baker could furnish EFO with a "Notice of Default and Demand for Cure" requiring EFO to pay, within seven days, the overdue installment. Although the Settlement Agreement specified that EFO's failure to timely cure the Event of Default would be deemed an "Uncured Default," the agreement did not include an acceleration clause making all unpaid installments immediately due or otherwise delineate any consequence if EFO failed to cure the default.
The Settlement Agreement noted it "shall be governed by, interpreted and enforced in accordance with the laws of the State of California as applied to contracts made, executed and fully performed within the State of California" and that "the Superior Court of the State of California for the County of Los Angeles shall have jurisdiction over the Action and all Parties for all purposes pursuant to California Code of Civil Procedure Section 664.6." The Settlement Agreement contained various additional provisions, including that the parties would: keep its terms confidential; dismiss the civil action and the Arbitration without prejudice upon executing the Settlement Agreement; and dismiss the Arbitration and civil action with prejudice after all payments had been made under the agreement.
On October 11, 2019, after the parties executed the Settlement Agreement, the court dismissed the civil action without prejudice. The order of dismissal also indicates the court would retain jurisdiction under section 664.6. The record before this court is silent on whether the parties dismissed the Arbitration. However, given that neither party claims otherwise, this court presumes the Arbitration was also dismissed.
In November 2019 EFO paid the first installment payment of $80,000. In February 2020, before the second installment payment was due, Baker's principal, Jonathan Baker, contacted George Furla, a principal of EFO, to discuss the film "Fate," which Baker was then in the process of developing and financing. According to Furla, Baker still wanted EFO to be involved with "Fate" as a co-producer. Furla stated Baker orally offered to credit the remaining unpaid balance EFO owed under the Settlement Agreement in exchange for EFO's production services for "Fate." Furla claimed based on his "tentative acceptance" of the deal, EFO did not pay the second installment payment (due in late February 2020) or any of the future installments owed under the Settlement Agreement.
On March 2 and again on March 3, 2021, after Baker's counsel, Kevin Koloff, learned of the discussions between Baker and Furla regarding "Fate," Koloff contacted Furla by email and informed him that before the parties could agree to amend the Settlement Agreement or reach an agreement to co-produce the film, EFO had to pay the overdue second installment. On March 5, 2020, Koloff sent additional emails to Furla, stating that Baker's bank demanded immediate payment of the second installment and that until EFO made that payment, Baker could not continue to discuss co-producing "Fate." Koloff warned that if the second installment was not paid by the next day, Baker would "pursue legal action." Although Furla said the second installment would be made "next week," EFO failed to make that payment. On March 24, 2020, Koloff contacted EFO's counsel, A. Raymond Hamrick, stating:
"I am writing to inform you that my client is willing to enter into a deal for 'Fate' that would stop the clock running, at least temporarily, on the settlement payments, but that (1) the currently-overdue payment must be made first, and (2) in the absence of an agreement, the settlement of course remains in full force and effect, and payment is not waived or excused in any way unless and until there is a signed, binding contract on 'Fate'."
Hamrick did not respond to Koloff, and EFO did not pay the second installment. Baker sent EFO a written notice of default for failing to make the second payment. When EFO failed to make the second payment despite the notice of default, Baker served a second notice of default, this time demanding that EFO cure the default within seven business days. EFO did not respond to the second notice of default. EFO also failed to make any payment under the Settlement Agreement for the third installment, which was due on May 26, 2020.
C. Baker's Section 664.6 Motion
On May 29, 2020, after EFO failed to respond to the notices of default and failed to pay the second and third installments, Baker filed a motion under section 664.6 to enforce the Settlement Agreement. Baker argued that EFO's failure to make payments was a breach of the Settlement Agreement, and EFO repudiated its remaining obligations by failing to respond to the request for payment. Baker maintained that because EFO was in total breach of the Settlement Agreement, Baker was entitled to both immediate payment of the past due installments and an acceleration of the future installment payments. Baker also sought its attorneys' fees and costs incurred in bringing the motion under section 6.4 of the Settlement Agreement. Among the evidence Baker submitted in support of its motion was the Settlement Agreement and declarations from Baker and Koloff attesting to their efforts to obtain payment from EFO.
When EFO opposed Baker's motion, it did not deny that it had repudiated its obligations under the Settlement Agreement, and it conceded it had failed to make required payments. However, EFO argued that Baker was estopped from enforcing the Settlement Agreement because of Baker's alleged oral promise to forgive payment obligations as consideration for coproduction work on the new film project. EFO also argued it was excused from the settlement payment obligations because its ability to make the payments was frustrated by the COVID-19 pandemic's disruption of its business. EFO further asserted Civil Code section 1511 excused its non-payment because the pandemic was a "superhuman cause" that prevented its performance. Alternatively, EFO argued that even if its payment obligations were not excused, the payments not yet due under the agreement could not be accelerated because the Settlement Agreement was a unilateral contract that did not contain an acceleration clause. Thus, as a matter of law, EFO's repudiation of the agreement could not result in an anticipatory breach warranting the acceleration of its payment obligations. Finally, EFO challenged Baker's request for attorneys' fees, claiming the fees were unsubstantiated and could only be awarded on a noticed motion. In support of its opposition, EFO submitted documentary evidence via declarations and exhibits. EFO did not request the opportunity to present live testimony at an evidentiary hearing.
On October 28, 2020, Baker filed its reply brief pointing out that in addition to failing to make the second installment payment (due in February 2020) and third payment (due in May 2020), by the time of the reply, EFO had not made the fourth payment (due in August 2020) as required under the Settlement Agreement. Baker also argued that EFO had not demonstrated the elements of estoppel or that its performance was excused, and EFO did not dispute it had repudiated its obligations under the Settlement Agreement. Baker asserted the Settlement Agreement was a bilateral contract because Baker had ongoing obligations under the Settlement Agreement. Therefore, under California law, the installment payments owed under the agreement could be accelerated upon EFO's total breach, even though the Settlement Agreement did not contain an acceleration clause.
On November 4, 2020, the trial court heard the section 664.6 motion. At the hearing, Baker argued that EFO had repudiated the Settlement Agreement based on the fact that (1) EFO did not dispute it had repudiated the agreement, (2) as of the hearing, EFO had still not made any payments after the first installment, (3) EFO had ignored default notices and (4) EFO stated that if the parties did not reach an agreement on the new film project, it would not make payments. The trial court agreed, observing that EFO's opposition reads as if EFO is "not going to pay this and [they] repudiated it," and that EFO stated it would not make any further payments.
During the argument, Hamrick argued Baker should be estopped from enforcing the agreement and that Furla's reliance on Baker's statements about the new film project was reasonable. Hamrick also observed that whether the reliance was reasonable was a disputed issue of fact that "should not be decided in a motion. It should be established." When the court asked Hamrick how the matter should be decided, if not by a motion supported by declarations and documentary evidence, EFO did not request an evidentiary hearing; instead Hamrick reiterated that disputed factual issues existed.
After the hearing, the court stated it would take the matter under submission. On November 9, 2020, the court issued an order granting the motion. The court concluded Baker met its burden to show EFO breached the Settlement Agreement by failing to pay the second and third installment payments due under the agreement. The court found EFO had failed to establish the elements of estoppel and had not demonstrated its performance under the Settlement Agreement had been frustrated by the COVID-19 pandemic or excused by Civil Code section 1511. The court also found that although the Settlement Agreement did not include an acceleration clause, the agreement was bilateral rather than unilateral because Baker had ongoing obligations under the agreement, including the requirement to keep the settlement terms confidential. The court also found that EFO had anticipatorily repudiated the Settlement Agreement based on the representations in the filings that EFO was unwilling or unable to make future payments. As a result, the court concluded that the unpaid installment payments under the settlement agreement were accelerated and immediately due.
On December 11, 2020, the trial court entered a judgment for Baker for $560,000, which was the remaining unpaid amount EFO owed Baker under the Settlement Agreement. The court awarded Baker $10,855.10 in attorneys' fees, consistent with the attorney's fees clause in the Settlement Agreement. The judgment also awarded Baker interest on the amount of the judgment at a rate of 10 percent per annum from the date of the entry of judgment until the judgment was paid in full.
EFO timely filed a notice of appeal.
DISCUSSION
On appeal, EFO argues the trial court exceeded its authority under section 664.6 by determining that EFO anticipatorily repudiated the Settlement Agreement and the court's determination resulted in a judgment on terms that were not agreed upon by the parties and contrary to the express terms of the Settlement Agreement. EFO also asserts substantial evidence did not support the court's finding of anticipatory repudiation. EFO additionally argues the trial court erred in denying its request for an evidentiary hearing on the section 664.6 motion.
Baker disagrees on the merits and also argues EFO's appellate arguments are moot and waived. Baker further asserts EFO has not demonstrated it suffered harm because of the judgment. We address Baker's procedural contentions first.
A. Baker's Procedural Arguments
1. Prejudice and Mootness
Baker asserts that because all the installment payments owed under the Settlement Agreement are now past due, even if this court were to reverse the judgment, the trial court would enter a new judgment that places EFO in the same position as the December 2020 judgment. Consequently, Baker contends that even if the trial court erred, the error was not prejudicial to EFO as it is impossible for EFO to obtain a more favorable result upon reversal.
The judgment required EFO to pay the entire unpaid balance of $560,000 on an accelerated basis in December 2020. However, even without the judgment, the final installment payment under the Settlement Agreement was due by August 27, 2021.
In a nearly identical argument Baker argues the appeal is moot because EFO does not identify any error concerning an issue that remains in controversy. Baker asserts that the passage of time rendered moot any complaint EFO has about the court's order and reversal of the judgment would have no practical impact because the Settlement Agreement no longer requires installment payments.
In its reply EFO argues the appeal is not moot and claims it suffered prejudice because of the erroneous judgment. EFO states that but for the court's erroneous finding on the anticipatory repudiation and the order accelerating the installment payments, the court would not have entered a judgment requiring EFO to pay interest on the installments not yet due as of the date of the judgment. EFO asserts it suffered harm because the December 2020 judgment required EFO to pay additional interest on the total amount of the unpaid installments as of the date of the judgment. EFO further contends its appeal is not moot because if it prevails on appeal the trial court will vacate the December 2020 judgment, including the award of all interest. EFO points out the amount of interest ordered in any subsequent judgment would necessarily be less than the amount that has accrued since the original judgment.
EFO has shown it has suffered harm, and its appeal is not moot. Specifically, EFO's argument regarding prejudice and mootness is not that it would have obtained a better outcome on the issues it asserted in the trial court or that the trial court will enter a different judgment vis-a-vis EFO's financial obligations under the Settlement Agreement. Rather, EFO's arguments pertain to whether the trial court properly found EFO had anticipatorily repudiated the agreement and whether the settlement payments could be accelerated. EFO is correct that if it obtains a reversal based on that argument, even if the trial court subsequently enters the same judgment for Baker regarding the money EFO owes pursuant to the settlement agreement, the new judgment will be entered later than the original judgment and EFO would owe less in interest. Baker is therefore incorrect that EFO's appeal is moot.
On appeal EFO is not asserting any error on the court's rulings regarding estoppel, frustration or excuse to avoid its obligations to pay the unpaid installments.
EFO has not quantified the amount of interest at issue. However, as of the December 2020 judgment, three installments of $80,000 were not yet due. Thus, at the very least, if the trial court erred in accelerating the remainder of EFO's installment payments, EFO's injury is the amount of interest that accrued between the December 2020 judgment and when each of those installments were due in 2021.
2. Issue Preservation
Baker argues EFO forfeited its argument that the trial court exceeded its authority in ordering the acceleration of the installment payments because EFO failed to make that argument below. Baker is correct that EFO did not argue to the trial court that it lacked the authority under section 664.6 to find anticipatory repudiation and EFO did not claim that the court's order improperly added new material terms to the Settlement Agreement. Instead, EFO argued the doctrine of anticipatory breach did not apply because the Settlement Agreement was unilateral-an assertion that EFO does not reassert here.
Generally, issues not raised in the trial court may not be raised for the first time on appeal. (Mancini &Associates v. Schwetz (2019) 39 Cal.App.5th 656, 660.) However, a "forgiving approach" permitting the court to review new issues may apply where important public policy issues exist, and the issue is a pure question of law. (Ibid.) "[P]arties are not permitted to adopt a new and different theory on appeal. To permit [them] to do so would not only be unfair to the trial court, but manifestly unjust to the opposing litigant." (Mattco Forge, Inc. v. Arthur Young & Co. (1997) 52 Cal.App.4th 820, 847.)
EFO has not explained why it could not have made the arguments it asserts here in the trial court. However, EFO asks this court to reach the merits of its arguments on appeal because the appeal raised legal issues and "implicates" the public policy that encourages voluntary settlement between parties "that includes enforcement of the parties agreed upon terms." Although it is not clear that reaching the merits of this appeal would promote an important public policy, given that EFO's appeal raises questions of law that are not moot, we exercise our discretion to reach the merits of EFO's contentions.
B. Merits of EFO's Appeal
EFO assets the trial court exceeded its authority under section 664.6 when it found EFO repudiated the Settlement Agreement. EFO argues the court then erred when it applied the doctrine of anticipatory breach and ordered the acceleration of the unpaid installments EFO owed Baker under the agreement. In EFO's view, section 664.6 confines the trial court to determine only whether a binding settlement contract exists between the parties and the terms of the contract. EFO maintains that in finding EFO breached the Settlement Agreement, the trial court improperly added new and inconsistent material terms to the parties' agreement. In the alternative, EFO claims the trial court's finding that it repudiated the Settlement Agreement was not supported by substantial evidence. Finally, EFO complains that the court erred in failing to conduct an evidentiary hearing on the section 664.6 motion. None of EFO's arguments has merit.
1. The Trial Court Did Not Exceed Its Authority Under Section 664.6
EFO's arguments on the court's application of section 664.6 present statutory and contract interpretation questions, both of which are reviewed de novo. (See Rancho Pauma Mutual Water Co. v. Yuima Municipal Water Dist. (2015) 239 Cal.App.4th 109, 115; Williams v. Saunders (1997) 55 Cal.App.4th 1158, 1162 (Williams) ["Where . . . the central issue on appeal involves the construction and application of a statute, the court conducts an independent review of the trial court's ruling."].)
a. Section 664.6 Permits a Trial Court To Consider Issues of Breach in Enforcing a Settlement Agreement
EFO argues that the trial court exceeded its authority under section 664.6 in finding that EFO repudiated the Settlement Agreement. EFO asserts section 664.6 only permits the court to determine whether the contract is binding and resolve disputes as its terms. That is not so.
Nothing in section 664.6 precludes the trial court from entertaining issues of breach of contract on a request to enforce the Settlement Agreement. 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 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)
"Prior to the enactment of section 664.6, a party seeking to enforce a settlement agreement had to file a new action alleging breach of contract and seeking either contract damages or specific performance of the settlement terms, or alternatively had to supplement the pleadings in a pending case. [Citations.] Although a summary judgment motion could be filed based on the newly pleaded contract or specific performance claim, summary judgment could be granted only if the opposing party failed to raise a triable issue of fact. [Citation.] Expeditious enforcement of a settlement agreement was, therefore, not always possible. [¶] Section 664.6 was enacted to provide a summary procedure for specifically enforcing a settlement contract without the need for a new lawsuit." (Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 809 (Weddington).)
A section 664.6 proceeding is a streamlined process for enforcing settlement agreements. (Hernandez v. Board of Education (2004) 126 Cal.App.4th 1161, 1175-1176 (Hernandez); Kilpatrick v. Beebe (1990) 219 Cal.App.3d 1527, 1529.) And in enforcing the terms of the settlement agreement the court may determine that one of the parties has breached it.
Under section 664.6 the court is limited to enforcing the terms to which the parties had agreed at the time of the execution of the settlement; it cannot create new terms. (Hernandez, supra, 126 Cal.App.4th at p. 1176; see also Weddington, supra, 60 Cal.App.4th at p. 810 ["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
For example, in Osumi v. Sutton (2007) 151 Cal.App.4th 1355 (Osumi), the appellant, the buyer of a house, sued the seller, the respondent. The parties reached a settlement agreement that required the respondent to repurchase the property for a specific price by a specific date. (Id. at pp. 1357-1358.) A dispute later arose over whether the final purchase agreement should include a provision regarding the appellant making certain repairs to the property. (Id. at p. 1358.) The appellant filed a section 664.6 motion arguing that the respondent had breached the settlement agreement by failing to deposit the purchase price into escrow by the agreed-upon date. The appellant asked the trial court to enter a judgment on the settlement agreement and award legal interest on the purchase price. In effect, the appellant argued the respondent breached the agreement and sought specific performance. The respondent also filed a section 664.6 motion seeking the specific performance on the ground that the appellant had breached the settlement agreement by making a last-minute counteroffer that attached extraneous documents to the purchase agreement. The trial court entered an order requiring the parties to sign a purchase agreement that omitted any obligation of the appellant to make repairs and ordered a new close of escrow date. (Ibid.)
On appeal, the appellant argued, among other things, that the trial court lacked authority to issue its ruling by specifying a modified escrow date and had improperly ordered new terms that were not included in the parties' settlement. (Osumi, supra, 151 Cal.App.4th at p. 1359.) The appellate court rejected that claim, judge to create the material terms of a settlement, as opposed to deciding what terms the parties themselves have previously agreed upon."].) concluding that both parties sought enforcement of the settlement under which the respondent would repurchase the property from the appellant. (Id. at p. 1361.) The court of appeal determined that the trial court had the authority to resolve the disputed issues regarding the respective breaches, including the request for specific performance, which required the trial court to impose a new and different closing date. (Ibid.)
Like Osumi, in entering requests to enforce settlement agreements under section 664.6, other courts have similarly resolved whether parties have breached obligations under settlement agreements. In Malouf Bros. v. Dixon (1991) 230 Cal.App.3d 280, 284, the appellate court ruled that the trial court was "authorized to determine that respondents had complied with their road repair obligations" under the terms of the settlement at issue. And more recently, in Red &White Distribution, LLC v. Osteroid Enterprises, LLC (2019) 38 Cal.App.5th 582, 587-588 (Red &White Distribution), the appellate court affirmed a trial court's finding on a section 664.6 motion that a party breached a settlement agreement by failing to timely make a required payment.
We conclude that the trial court acted within its authority in enforcing the Settlement Agreement. The court properly resolved the dispute between the parties on the issue of whether the Settlement Agreement was enforceable and whether EFO's performance was excused under the equitable theories EFO asserted. Further, the court was permitted to conclude that EFO had breached the Settlement Agreement when it failed to make the installment payments that had already come due and had anticipatorily breached the agreement as to the future installment payments. EFO has not offered any argument or relevant legal authority to support a contrary view of the trial court's exercise of its authority in this case.
EFO cites Machado v. Myers (2019) 39 Cal.App.5th 779, 792-93 (Machado), which does not support EFO's interpretation of section 664.6 in this matter. The procedural posture of Machado is materially different from this case. Machado did not involve a trial court deciding the issue of breach on a section 664.6 motion. Instead, Machado concerned an application for a judgment requested a year after the court granted the section 664.6 motion. (Id. at pp. 792-793.) In Machado, on a party's post-order application to enter a judgment, the trial court found that one party had breached the settlement agreement after the section 664.6 motion had been granted; the trial court then altered the terms of the settlement agreement. (Id. at p. 793.) On appeal the appellate court held that whether a party breached the settlement agreement could not be litigated on a post-order application for the entry of judgment. The appellate court reached that conclusion in part because an application for the entry of judgment after the court conducted the hearing on the section 664.6 motion was a perfunctory process that did not afford the parties the opportunity to argue or present evidence on the issue of breach. (Id. at pp. 795-797.)
b. The Trial Court's Order Does Not Improperly Add an Acceleration Clause into the Settlement Agreement
EFO asserts the trial court exceeded its authority under section 664.6 because the order granting the motion added material terms that were new and inconsistent with the Settlement Agreement. EFO maintains that in finding that it anticipatorily repudiated the Settlement Agreement and entering an order accelerating the installment payments not yet due, the court improperly added an acceleration clause to the Settlement Agreement. We disagree.
"Repudiation of a contract, also known as 'anticipatory breach,' occurs when a party announces an intention not to perform prior to the time due for performance." (Stephens &Stephens XII, LLC v. Fireman's Fund Ins. Co. (2014) 231 Cal.App.4th 1131, 1150.) The repudiation may be express or implied. An express repudiation is a clear, positive, unequivocal refusal to perform; implied repudiation results from conduct where the promisor acts in a manner that renders performance impossible. (Mammoth Lakes Land Acquisition, LLC v. Town of Mammoth Lakes (2010) 191 Cal.App.4th 437, 463 (Mammoth Lakes), citing Taylor v. Johnson (1975) 15 Cal.3d 130, 137.)
The doctrine of anticipatory breach applies to bilateral contracts and allows immediate recovery even before performance would otherwise be due. (See Civ. Code, § 1440 ["If a party to an obligation gives notice to another, before the latter is in default, that he will not perform the same upon his part, and does not retract such notice before the time at which performance upon his part is due, such other party is entitled to enforce the obligation without previously performing or offering to perform any conditions upon his part in favor of the former party."]; accord, Mammoth Lakes, supra, 191 Cal.App.4th at p. 463.)
Here, the trial court's order is consistent with the material terms of the Settlement Agreement; the court's order granting the section 664.6 motion awarded Baker only that amount owed under the agreement. The trial court's finding that the payments were accelerated because of EFO's repudiation of the Settlement Agreement also comports with California law, which provides that a repudiation of future obligations under a bilateral contract constitutes a total breach that entitles the non-breaching party to an acceleration of those future installment payments. (Mammoth Lakes, supra, 191 Cal.App.4th at p. 463.) Therefore, even though the Settlement Agreement does not contain an acceleration clause, EFO's anticipatory repudiation of the agreement triggered the acceleration of the payments by operation of law. (Ibid.) Application of this legal doctrine does not create new material terms; instead, it facilitates enforcement of the agreement, which the court is permitted to do on a section 664.6 motion.
The court did not exceed its authority in ruling on the section 664.6 motion.
2. Substantial Evidence Supported the Court's Finding EFO Repudiated the Settlement Agreement
"A trial court's factual findings on a motion to enforce a settlement pursuant to section 664.6 are subject to limited appellate review and will not be disturbed if supported by substantial evidence." (Machado, supra, 39 Cal.App.5th at p. 791, citing Williams, supra, 55 Cal.App.4th at p. 1162.)
EFO argues that the record lacks evidence that it repudiated the Settlement Agreement. EFO is incorrect. The evidence presented in connection with the motion, including the documentary evidence and declarations submitted by both parties, demonstrated that EFO breached the Settlement Agreement when it failed to pay the second installment owed under the agreement in February 2020, and EFO later repudiated the entire agreement. Moreover, Koloff repeatedly requested that EFO pay the second installment, stating that no additional discussion or deals for a new movie project could proceed until the second installment was paid. When EFO failed to respond, Baker followed up with notices to EFO regarding its default. EFO's silence and failure to pay reflect its repudiation of its obligations under the Settlement Agreement. The repudiation finding is also supported by evidence that even after Furla promised to pay the second installment "next week," he failed to do so. In fact, Furla unequivocally stated that EFO did not intend to make any further installment payments. This evidence that EFO repudiated the agreement is underscored by the undisputed evidence that EFO never made any additional installment payments and conceded in its briefing that it had "deci[ded] to refrain from making the second and further installment payments." This evidence is sufficient to support the trial court's finding that EFO repudiated the agreement.
3. The Trial Court Did Not Err in Failing To Conduct an Evidentiary Hearing
EFO asserts the trial court erred when it denied EFO's request for an evidentiary hearing on the section 664.6 motion and that the failure to conduct such a hearing violated EFO's due process rights. EFO argues the court denied it the opportunity to present evidence to refute Baker's claim that it had anticipatorily repudiated the Settlement Agreement. EFO's contentions lack support in the record and the law.
First, the record does not support EFO's assertion that it requested an evidentiary hearing on the issue of repudiation or any other issue before this court. EFO's written opposition to the motion was devoid of any such request, and EFO never asked to present live witnesses at the hearing. Instead, Hamrick argued estoppel should not be decided on "in a motion. It should be established. If there is a reasonable dispute, estoppel applied." The court then asked Hamrick how the matter should be decided, if not by a motion supported by declarations and documentary evidence. Even then, Hamrick did not request an evidentiary hearing on the estoppel or any other issue. Instead, Hamricks's response reiterated EFO's legal arguments about what can be decided in the context of a section 664.6 motion and EFO's contention that the facts before the court were in dispute. Nothing in Hamrick's statement can reasonably be construed as a request for an evidentiary hearing.
In any event, EFO has not shown any error. Section 664.6 does not require a trial court to conduct a full evidentiary hearing on a section 664.6 motion. "The statute allowing a trial court to retain jurisdiction to enforce the terms of a settlement agreement was enacted to provide a summary procedure for specifically enforcing a settlement contract without the need for a new lawsuit." (1 Cal.Jur.3d (2022) Accord and Satisfaction, Compromise, Settlement, and Release, § 111(3).) It is well settled that on a motion under section 664.6, a trial court "in the sound exercise of their discretion, may receive oral testimony or may determine the motion upon declarations alone." (Corkland v. Boscoe (1984)156 Cal.App.3d 989, 994; accord, Osumi, supra, 151 Cal.App.4th at p. 1360.)
Likewise, EFO has not demonstrated that the failure to conduct an evidentiary hearing denied it due process. EFO had ample opportunity to present its evidence on all of the matters on the motion. The record reflects that EFO presented evidence in support of its opposition via declarations and exhibits. EFO does not identify any other evidence it would have presented at an evidentiary hearing or suggest how the outcome would have been different if the court had conducted such a proceeding. Thus, EFO has not demonstrated reversible error. (See Red &White Distribution, supra, 38 Cal.App.5th at pp. 587-588 [finding no error in trial court's failure to hold an evidentiary hearing where parties had ample opportunity to present evidence in the briefings to the court.].)
DISPOSITION
The judgment is affirmed. Respondents are entitled to their costs on appeal.
We concur: PERLUSS, P. J., FEUER, J.
[*] Judge of the Alameda County Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.