Opinion
G058046
06-29-2020
SAMEER MUGHRABI, Plaintiff and Respondent, v. MOHAMED BASHIR IMAN at al., Defendants and Appellants.
Michael Hammad for Plaintiff and Respondent. The Walker Law Firm, Joseph A. Walker and Stephen M. Lewis for Defendants and Appellants.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 30-2017-00955365) OPINION Appeal from a judgment of the Superior Court of Orange County, Theodore R. Howard, Judge. Affirmed. Michael Hammad for Plaintiff and Respondent. The Walker Law Firm, Joseph A. Walker and Stephen M. Lewis for Defendants and Appellants.
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Defendants Mohamed Bashir Iman and Abdulkadir Iman appeal from a judgment entered after the court granted plaintiff Sameer Mughrabi's motion to enforce the parties' settlement agreement. Defendants raise three arguments on appeal. First, they contend substantial evidence did not support granting the motion. Second, they argue the written agreement submitted to the court was an unenforceable settlement agreement. Finally, they claim the judgment does not conform to the parties' written agreement. We disagree with defendants' contentions and affirm the judgment.
FACTS
In 2017, plaintiff filed a complaint alleging plaintiff and defendants had entered into a partnership agreement to buy certain investment property. According to the complaint, the parties purchased the investment property and eventually sold it, but defendants failed to pay any proceeds to plaintiff. The complaint accordingly alleges causes of action for breach of contract, intentional misrepresentation, breach of fiduciary duty, declaratory relief, unjust enrichment, and accounting. The complaint asserts these claims against defendants and another defendant that is not a party to this appeal, an entity called S.A.M. Pomona, LLC (the LLC).
Trial commenced on February 13, 2019 with one day of testimony by plaintiff. The court then continued the trial to February 19, 2019. The parties spent that day in the jury room discussing settlement. In the afternoon, plaintiff's counsel informed the clerk that the parties had reached a settlement, requested "the terms of the settlement not be placed on the record," and asked to continue the trial. The court scheduled an order to show cause regarding settlement for April 5, 2019 and advised that trial would resume if there was no settlement.
In March 2019, defendants filed substitutions of attorneys and commenced to represent themselves. On April 2, 2019, plaintiff filed a motion to enforce settlement pursuant to Code of Civil Procedure section 664.6 and the court continued the order to show cause. Plaintiff argued the parties executed a written settlement agreement (the "Short-Form Agreement") on February 19, 2019, whereby defendants agreed to pay $175,000 to plaintiff pursuant to a specified schedule. While defendants had paid $10,000 of that amount, plaintiff claimed they defaulted on the remaining payments and further refused to enter into a "Long-Form Agreement" as agreed by the parties in their Short-Form Agreement.
All further statutory references are to the Code of Civil Procedure unless otherwise stated.
In support of his motion, plaintiff submitted the declaration of his attorney, Bryan Theis, and a copy of the Short-Form Agreement. The attorney declaration summarized various provisions in the parties' Short-Form Agreement. Defendants raise arguments with respect to the following statements in the attorney declaration:
(1) "Under the Short-Form Agreement, [d]efendants . . . agreed to execute a deed of trust upon a parcel of real property identified by [d]efendants."
(2) "Under the Short-Form Agreement, the parties agreed that this Court shall have authority to enforce its terms under CCP §664.6. This was agreed to orally by the parties, with counsel present. It was also stated orally in open court on February 19, 2019."
(3) "Under the Short-Form Agreement, the parties agreed that if litigation should be necessary to enforce the settlement, the prevailing party will be entitled to reasonable attorneys' fees. This is set forth under paragraph 7 of the Short-Form Agreement, initialed by the parties and counsel. It was also discussed verbally at length between counsel and among the parties. I know this, because at one point on the afternoon of February 19, 2019, [d]efendants' counsel . . . told me that his clients were discussing the attorneys' fees provision."
The one page Short-Form Agreement signed by the parties is dated February 19, 2019 and includes a typewritten list of 16 terms. Among other things, the agreement identifies various payments, totaling $175,000, that defendants would make to plaintiff at various times. These provisions suggest all defendants would pay, but another provision states: "Any payments made shall be paid from the LLC." Defendant Abdulkadir Iman would be dismissed after the first $50,000 was paid. Another $100,000 payment would be "secured by a note on real property with adequate equity to be verified by [plaintiff's] counsel." The agreement indicates this was "[p]roperty located in CA with all liens/encumbrances disclosed." The agreement further states: "[Defendants] stipulate to the fraud and breach of fiduciary duty facts and causes of action described in [plaintiff's] complaint. Stipulation to be held pending performance under this agreement." The agreement also states: "Judgment in amount of above amounts less payments received to be entered by court against all remaining [defendants] only in the event of default on the above (with 1 week's notice to cure), with 10% interest calculated from 2/19/19." Finally, the agreement states: "Long form agreement to be finalized by 2/28/19. Incl. § 664.6 and attorney's fees clause." (Italics added.) The italicized text is a handwritten notation rather than typed text and is followed by what appears to be the initials of the parties and their counsel.
Defendants did not file any opposition to plaintiff's motion. In May 2019, the court held a hearing on plaintiff's motion. The parties have not provided a reporter's transcript on appeal so it is not clear what the parties argued at the hearing, but defendants appeared in propria persona. The court's tentative ruling stated: "A Motion to Enter Judgment Pursuant to the Terms of a Stipulation for Settlement under CCP §664.6 may be granted only where the court has retained jurisdiction to enforce the terms of the settlement until the settlement is performed in full. This has been interpreted to mean that there must be a specific request or agreement by the parties for the Court to retain jurisdiction for this purpose, either in open court or in their settlement agreement. The parties specifically declined to enter the terms of the settlement in open court. There is no reference to the Court's retention of jurisdiction in the Short Form settlement agreement signed by the parties and their counsel. [¶] Since no dismissal has been filed in this case, the Court still has jurisdiction of this matter. It is restored to the civil active list for further proceedings by the plaintiff to enforce the terms of the settlement agreement under available breach of contract principles." But at the end of the hearing the court did not make the tentative ruling final, choosing instead to take the matter under submission.
In June 2019, the court issued its final ruling and entered judgment in plaintiff's favor. The court found the parties had reached a settlement that included the following terms: (1) defendants were to pay $175,000 to plaintiff according to a specified schedule; (2) defendants stipulated to the fraud and breach of fiduciary facts and causes of action in plaintiff's complaint; (3) "the parties stipulated that if the defendants default on the agreed-upon payment schedule, after 1 week's written notice to cure, the Court shall enter judgment against all defendants for the amount of any remaining payments owed, plus 10% prejudgment interest from 2/19/19"; and (4) the parties stipulated to an attorney fees clause for the prevailing party. The court further found defendants had paid $10,000 under the settlement agreement but defaulted on the remaining $165,000 after plaintiff gave one week's notice to cure. Based on the remaining $165,000, the court calculated prejudgment interest to be $3,888.06 for the time period from February 19, 2019 through May 16, 2019. The court accordingly awarded $168,888.06 to plaintiff consisting of $165,000 plus $3,888.06 in prejudgment interest. The court also held plaintiff could recover his attorney fees incurred in enforcing the judgment.
DISCUSSION
Defendants contend the court erred by granting plaintiff's motion to enforce settlement for three reasons. First, defendants argue there was not substantial evidence in support of the motion because Theis's declaration was not "credible given the inconsistencies between his declaration, the record and the Short Form agreement." Second, defendants claim the Short-Form Agreement is unenforceable because it "was simply an agreement to agree to terms in the Long Form Agreement." Third, defendants contend the judgment fails to conform to the Short-Form Agreement. We disagree with all of defendants' contentions. Substantial evidence supported the order granting the motion. The Short-Form Agreement is enforceable, and the judgment accurately reflects the parties' settlement. Defendants forfeited their arguments on appeal.
At the outset, we note the appellate record does not indicate that defendants raised any of their arguments in the trial court proceedings. They did not file any written opposition to plaintiff's motion or any objections to Theis's declaration. On appeal, defendants also have not provided a reporter's transcript of the hearing on plaintiff's motion. (Cal. Rules of Court, rule 8.120(b) [an appellant "must include" a reporter's transcript or agreed or settled statement when "rais[ing] any issue that requires consideration of the oral proceedings"].) Without a written opposition or reporter's transcript, we have no idea what occurred or what arguments defendants raised below. Defendants have thus forfeited their right to raise the alleged deficiencies on appeal by failing to provide any record of timely opposition to the motion in the trial court. (Findleton v. Coyote Valley Band of Pomo Indians (2018) 27 Cal.App.5th 565, 569 [finding a party waived arguments that were not raised in the trial court proceedings]; In re Valerie A. (2007) 152 Cal.App.4th 987, 1002-1003 [finding a party's claim was abandoned where the party failed to provide a reporter's transcript of relevant proceedings].)
Defendants' only argument on the forfeiture issue is that they submitted on the tentative ruling, which did not become the court's final order. They claim "[a]quiescing by submitting on the tentative ruling does not amount to conduct which is a waiver or which induces the commission of an error." But this does not address the issue presented here—defendants never opposed plaintiff's motion or presented any alternative evidence of their own. "It is well established that appellate courts will ordinarily not consider errors that 'could have been, but [were] not raised below.' [Citations.] The rule applies to defenses as well as theories of liability . . . . [Citation.] 'The policy behind the rule is fairness.' [Citation.] 'Appellate courts are loath to reverse a judgment on grounds that the opposing party did not have an opportunity to argue and the trial court did not have an opportunity to consider. [Citation.] In our adversarial system, each party has the obligation to raise any issue or infirmity that might subject the ensuing judgment to attack. [Citation.] Bait and switch on appeal not only subjects the parties to avoidable expense, but also wreaks havoc on a judicial system too burdened to retry cases on theories that could have been raised earlier.'" (Findleton v. Coyote Valley Band of Pomo Indians, supra, 27 Cal.App.5th at p. 569.) On the merits, the court did not err.
On the merits, defendants' arguments also fail. "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." (§ 664.6.) When reviewing a ruling on a motion to enforce a settlement agreement under section 664.6, we review the court's factual determinations on the existence and terms of a settlement under the substantial evidence standard and any legal determinations under the de novo standard. (Karpinsky v. Smitty's Bar, Inc. (2016) 246 Cal.App.4th 456, 461.)
1. Substantial Evidence Supported the Court's Ruling
Here, the court's factual findings are supported by substantial evidence, which included the Short-Form Agreement and Theis's declaration. The Short-Form Agreement is signed by the parties and details key provisions, including the $175,000 payment defendants would make to plaintiff pursuant to a specified schedule. In his declaration, Theis further summarized the terms of the parties' settlement agreement and noted, among other things, that defendants had paid $10,000 of the $175,000 due. He also declared defendants refused to sign a Long-Form Agreement as required by the parties' Short-Form Agreement despite his demands and negotiations with their previously retained counsel.
Defendants contend the court erred by relying on Theis's declaration because it is inconsistent with the Short-Form Agreement. But we need not consult Theis's declaration to conclude that the written Short-Form Agreement, signed by the parties, is enforceable. Defendants nevertheless point to three alleged inconsistencies. First, defendants note Theis's declaration indicates defendants agreed to execute a deed of trust on real property, but the Short-Form Agreement refers to a "note on real property." There is no inconsistency in these two statements. In common parlance a "note on real property" is a note secured by a deed of trust. And this issue is not even germane to the court's ruling because plaintiff did not ask the court to enforce defendants' promise to execute a deed of trust. Clearly, nonpurchase money real property security for the note is solely for plaintiff's benefit, and it is well established that a "'contracting party may waive provisions placed in a contract solely for his benefit.'" (Doryan v. Salant (1977) 75 Cal.App.3d 706, 712)
Second, defendants point to the statement in Theis's declaration that the parties agreed the court could enforce the Short-Form Agreement under section 664.6 and that this was orally agreed to by the parties. Defendants argue this is inconsistent with the Short-Form Agreement, which only says a section 664.6 provision will be included in the Long-Form Agreement, and the court's minute order, which says the terms of the settlement were not placed on the record. As observed above, Theis's declaration is not needed to interpret the written contract. The Short-Form Agreement executed by the parties states: "Long form agreement to be finalized by 2/28/29. Incl. § 664.6 and attorney's Fees clause." This clearly expresses the parties' agreement, in writing, to allow for enforcement under section 664.6.
Finally, defendants claim Theis's declaration states the parties agreed the prevailing party would be entitled to attorney fees to enforce the settlement while the Short-Form Agreement only states an attorney fees clause would be included in the Long-Form Agreement. Once again, apart from Theis's declaration, the Short-Form Agreement clearly expresses the parties' agreement to allow for an award of attorney fees. In common parlance, an "attorney's fees clause" means a provision allowing the prevailing party to recover its attorney fees upon a breach of the agreement.
2. The Short-Form Agreement Was an Enforceable Agreement
Defendants also contend the Short-Form Agreement was unenforceable because it "was simply an agreement to agree to terms in the Long Form Agreement." They argue the following material issues were left for later agreement and made the Short-Form Agreement "incomplete and ambiguous": (1) the real property that would be used as security for part of defendants' payment; (2) what would determine if the real property was "adequate equity" and what would happen if there was not adequate equity; (3) a section 664.6 clause, an attorney fees clause, a nondisparagement clause, and a confidentiality provision; (4) the dismissal of defendant Abdulkadir Iman after the first $50,000 was paid; and (5) whether all defendants or only the LLC would make the required payments.
Although the Short-Form Agreement did refer to a Long-Form Agreement, which presumably would detail some of the above provisions, the only evidence in the record establishes that defendants failed to sign the Long-Form Agreement. Plaintiff's counsel and defendants' prior counsel engaged in negotiations and worked on drafts of the Long-Form Agreement, but defendants refused to sign. Defendants provided no evidence rebutting this or explaining their failure to execute the Long-Form Agreement. Defendants had a duty of good faith and fair dealing to prepare and sign a Long-Form Agreement pursuant to the terms of the Short-Form Agreement. (Moore v. Wells Fargo Bank, N.A. (2019) 39 Cal.App.5th 280, 291.) They cannot rely on their own failure to do so to claim the Short-Form Agreement was unenforceable.
"[A] contract will be enforced if it is sufficiently definite (and this is a question of law) for the court to ascertain the parties' obligations and to determine whether those obligations have been performed or breached. [Citations.] Stated otherwise, the contract will be enforced if it is possible to reach a fair and just result even if, in the process, the court is required to fill in some gaps." (Ersa Grae Corp. v. Fluor Corp. (1991) 1 Cal.App.4th 613, 623.) Here, the Short-Form Agreement was sufficiently definite to determine the parties' obligations, including defendants' obligation to pay plaintiff pursuant to a specified schedule. Execution of a Long-Form Agreement, with provisions regarding the real property to be used as security for defendants' payment, section 664.6, attorney fees, nondisparagement, and confidentiality, was not a contingency to the settlement. Instead, the parties wanted to have a further document to memorialize their settlement. Defendants also made the first payment required under the Short-Form Agreement. This undermines their claim that a later Long-Form Agreement was needed to finalize the parties' settlement. Defendants understood their payment schedule and partially performed under the terms of the Short-Form Agreement.
Defendants cite cases about missing material terms of contracts and the fundamentals of mutual assent, but those cases are inapposite. For example, in Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, the parties signed a one-page deal point memorandum during mediation. (Id. at p. 799.) The memorandum provided the parties would formalize a licensing agreement. (Id. at p. 799-800.) After disputes arose over the licensing agreement, the plaintiffs filed a motion to enforce the settlement. (Id. at pp. 801-802.) The private judge ultimately crafted a settlement that included licensing agreement terms to which the parties had never agreed. (Id. at pp. 803-804.) The court found judgment could not be entered based on those terms selected by the private judge. (Id. at p. 819.) Unlike the court in Weddington, the court here did not include additional terms in the settlement agreement it enforced.
In Terry v. Conlan (2005) 131 Cal.App.4th 1445, the parties agreed to place certain property in dispute under independent management, but they did not identify a specific form of management or proposed tax status for the property. (Id. at pp. 1455-1458.) In reversing the section 664.6 judgment, the court explained the parties had agreed to "the goals of settlement" (Terry, at p. 1458) but failed "to agree to the material means to achieve the goal of the settlement" (id. at p. 1459). Here, the Short-Form Agreement did not omit terms that were material to the settlement.
Finally, in their reply brief, defendants argue the Short-Form Agreement is invalid under the statute of frauds (Civ. Code § 1624) because "[t]he real property [used as security for defendants' payment] is nowhere identified in writing." Defendants waived this argument by failing to raise it in their opening brief. (W.S. v. S.T. (2018) 20 Cal.App.5th 132, 149, fn.7 ["Issues not raised in the appellant's opening brief are deemed waived or abandoned"].) And, in any event, plaintiff waived the promised real property security by not requesting the court to enforce that part of the settlement. "'[A] contracting party may waive provisions placed in a contract solely for his benefit.'" (Doryan v. Salant, supra, 75 Cal.App.3d at p. 712.)
3. The Judgment Accurately Reflects the Settlement Agreement
Defendants' final contention is that the judgment does not conform to the Short-Form Agreement. First, defendants take issue with the judgment's statement that defendants would pay $175,000 to plaintiff. According to defendants, this is inconsistent with the Short-Form Agreement, which states that "[a]ny payments made shall be paid from the LLC." But the Short-Form Agreement also states all three defendants had to "cause payment" to plaintiff. It further states that judgment would be entered upon default "against all remaining [defendants]." When read together, these statements suggest all defendants agreed to pay plaintiff even if the money came from the LLC. The judgment accordingly is not inconsistent with the Short-Form Agreement.
Second, defendants point to the judgment's statement that defendants "stipulated to the fraud and breach of fiduciary duty facts and causes of action as set forth in the complaint . . . ." The Short-Form Agreement states the same thing, but defendants note that it includes the following language: "Stipulation to be held pending performance under this agreement." Defendants argue performance was not completed because a Long-Form Agreement was never finalized. For the same reasons discussed above, defendants cannot rely on their own failure to execute a Long-Form Agreement to invalidate the judgment.
Finally, defendants claim the judgment states the parties stipulated to an attorney fees clause whereas the Short-Form Agreement only states the clause would be included in a Long-Form Agreement with no additional details. This argument is framed differently than the argument about inconsistencies in Theis's declaration. But the result is the same. As we observed, ante, apart from Theis's declaration, the Short-Form Agreement clearly expresses the parties' agreement to allow for an award of attorney fees. In common parlance, an "attorney's fees clause" means a provision allowing the prevailing party to recover its attorney fees upon a breach of the agreement.
DISPOSITION
The judgment is affirmed. Plaintiff shall recover his costs incurred on appeal.
IKOLA, J. WE CONCUR: ARONSON, ACTING P. J. THOMPSON, J.