Opinion
F070631
10-13-2017
WILD, CARTER & TIPTON, Plaintiff and Respondent, v. VICTORIA SCOTT YEAGER et al., Defendants and Appellants.
Victoria Scott Yeager, in pro. per., and Charles E. Yeager, in pro. per., for Defendants and Appellants. McCormick, Barstow, Sheppard, Wayte & Carruth, Marshall C. Whitney, Todd W. Baxter, and Mandy L. Jeffcoach for Plaintiff and Respondent.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 09CECG00045)
OPINION
APPEAL from a judgment of the Superior Court of Fresno County. Kristi Culver Kapetan, Judge. Victoria Scott Yeager, in pro. per., and Charles E. Yeager, in pro. per., for Defendants and Appellants. McCormick, Barstow, Sheppard, Wayte & Carruth, Marshall C. Whitney, Todd W. Baxter, and Mandy L. Jeffcoach for Plaintiff and Respondent.
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INTRODUCTION
Appellants Victoria Scott Yeager (Mrs. Yeager) and Charles E. Yeager (General Yeager; collectively, the Yeagers) appeal a judgment to enforce a settlement agreement with respondents Wild, Carter, & Tipton (WCT). The Yeagers claim the trial court erred in granting WCT's motion to enforce the agreement. They specifically contend (1) the trial court violated General Yeager's civil rights, (2) the Yeagers did not understand the material terms of the settlement agreement, (3) the trial court lacks jurisdiction to enforce the agreement, (4) a valid contract was not formed because there was no meeting of the minds, (5) the record is incomplete, (6) the agreement was based on fraud, (7) the court exceeded its jurisdiction by ordering a nonparty to comply with the settlement agreement, (8) WCT violated the confidentiality agreement, and (9) the agreement was executed under duress. The Yeagers also claim certain records ordered sealed by the trial court should not remain under seal.
We agree that certain records pertaining to the settlement agreement should not remain under seal because there is no overriding interest warranting the seal. As such, we vacate the trial court's sealing order and order the record unsealed. We otherwise affirm.
FACTUAL AND PROCEDURAL HISTORY
On January 7, 2009, WCT filed a complaint against the Yeagers and the General Chuck Yeager Foundation (the Foundation) alleging breach of contract, common counts, and quantum meruit. The Yeagers filed a cross-complaint alleging legal malpractice, misrepresentation, and concealment, naming Wild, Carter & Tipton as cross-defendant. The merits of these claims are not before us.
On May 6, 2014, jury selection began. Before lunch recess, there was a brief discussion between counsel and the superior court about potentially settling the case. That afternoon, the parties notified the trial court that a settlement had been reached.
All further dates of events occurred in 2014 unless otherwise indicated.
The terms of the settlement agreement were transcribed in writing and made part of the record (the handwritten term sheet). Counsel for WCT recited the terms of the settlement agreement on the record from the handwritten term sheet. The parties agreed the terms recited represented the settlement. Counsel for WCT stated he would draft a slightly more comprehensive document, "But the case is settled."
On July 1st, WCT filed an ex parte application to enforce the settlement. WCT sought to have the settlement enforced because WCT had not received comments from the Yeagers regarding the draft settlement agreement. The court granted WCT time to file a noticed motion pursuant to their application to enforce the settlement.
On July 14th, WCT filed a motion for entry of judgment and enforcement of settlement pursuant to Code of Civil Procedure section 664.6.
On July 28th, WCT filed a second ex parte application to lodge an unredacted transcript and to file the confidential handwritten term sheet under seal.
On August 1st, the court conducted a hearing on WCT's motion to enforce the settlement.
On August 25th, the court granted WCT's motion to enforce the settlement and to enter judgment. Based on the transcript of the May 6th hearing, the court clarified the terms of the settlement recited and agreed upon in open court. The court also advised the parties that because they did not seem to agree on the form of the judgment, the court would draft a "very bare bones[] judgment" based upon the transcript of the May 6th hearing. Finally, the court granted WCT's application to lodge certain documents under seal, including: transcripts of the May 6th and August 1st hearings, the confidential handwritten term sheet, exhibits attached to the Yeagers' opposition brief filed on July 28th, and a declaration by Mrs. Yeager filed on July 28th. In addition, the court filed its ruling and the judgment under seal.
On October 23d, the Yeagers filed a timely notice of appeal.
DISCUSSION
I. The Sealed Record
The Yeagers contend the transcripts related to the parties' settlement agreement should not have been sealed by the superior court. After reviewing WCT's application to seal certain portions of the record and the trial court's ruling thereon, we invited the parties to submit supplemental letter briefs on this issue. Upon review of the parties' letter briefs, we conclude WCT has failed to show a substantial probability that an overriding interest will be prejudiced if the record does not remain sealed. As a result, by order dated September 8, 2017, we moved sua sponte to unseal the record.
A. Background
WCT filed several ex parte applications to lodge unredacted documents under seal, including: the transcript of the May 6th hearing, a confidential handwritten term sheet stating the terms of the settlement agreement entered into on May 6th, exhibits attached to the Yeagers' brief filed on July 28th, and portions of Mrs. Yeager's declaration of July 28th.
The memorandum of points and authorities in support of the ex parte application stated the confidentiality provision of the settlement agreement was "a term that both parties insisted upon." (Boldface omitted.) It further noted at the time the parties' settlement agreement was placed on the record, only the parties, their counsel, a court reporter, and a superior court judge were in the courtroom. Bruce Brown, a shareholder for WCT, stated in his declaration that a key term to the settlement agreement was the confidentiality clause, "which both parties requested." Mr. Brown ensured no one outside of the parties, their counsel, and the judge were in the courtroom at the time the terms of the settlement were recited.
The Yeagers filed a motion opposing WCT's application to seal. In her declaration, Mrs. Yeager claimed neither she nor General Yeager signed a handwritten term sheet, they were opposed to the confidentiality clause and the nondisparagement clause of the agreement, and there was at least one nonparty in the courtroom on May 6th when the terms of the settlement were recited.
On August 1st, the superior court issued a tentative ruling granting WCT's application. The court found the confidentiality clause was a cornerstone of the parties' settlement agreement. As such, "it appeared to be an overriding interest of the parties." The court further found "[t]here's no public interest ... that's being disserved by keeping the terms confidential." As to whether there was a substantial probability WCT would be prejudiced if certain records were not sealed, the court found this element had been met because the confidentiality clause was "essentially[] one of the reasons [WCT] entered into the settlement." Finally, the court held there appeared to be no less restrictive alternatives available.
On August 25, 2014, the superior court issued a ruling granting WCT's application to seal and ordered the transcript of the August 1st hearing to be confidential and any unredacted version to be filed under seal.
B. Legal Principles
The First Amendment guarantees the press and the public the right of access to criminal and civil trials. (NBC Subsidiary (KNBC-TV), Inc. v. Superior Court (1999) 20 Cal.4th 1178, 1209 (NBC Subsidiary); Overstock.com, Inc. v. Goldman Sachs Group, Inc. (2014) 231 Cal.App.4th 471, 484.) In recognition of case authority acknowledging this constitutional right, the Judicial Council promulgated rules relating to sealed records. (Cal. Rules of Court, rules 2.550 & 2.551.)
Under rule 2.550 of the California Rules of Court, the court may order a record sealed only upon making express findings that "(1) There exists an overriding interest that overcomes the right of public access to the record; [¶] (2) The overriding interest supports sealing the record; [¶] (3) A substantial probability exists that the overriding interest will be prejudiced if the record is not sealed; [¶] (4) The proposed sealing is narrowly tailored; and [¶] (5) No less restrictive means exist to achieve the overriding interest." (Rule 2.550(d).)
A contractual obligation not to disclose the terms of a settlement agreement can constitute an overriding interest supporting the sealing of certain records. (Universal City Studios, Inc. v. Superior Court (2003) 110 Cal.App.4th 1273, 1284 (Universal City Studios).) In NBC Subsidiary, our Supreme Court cited Publicker Industries, Inc. v. Cohen (3d Cir. 1984) 733 F.2d 1059 (Publicker) for the proposition that "enforcement of binding contractual obligations not to disclose" may constitute an overriding interest. (NBC Subsidiary, supra, 20 Cal.4th at p. 1223, fn. 46.)
Publicker held an "overriding interest" may include circumstances where the content of information may be critical, such as where trade secrets are involved, or where certain information is protected by the attorney-client privilege. (Publicker, supra, 733 F.2d at p. 1073.) The court further opined, "A similar situation would be presented where there is a binding contractual obligation not to disclose certain information which to the court seems innocuous but newsworthy; in that situation unbridled disclosure of the nature of the controversy would deprive the litigant of his right to enforce a legal obligation." (Id. at pp. 1073-1074.)
However, under Publicker, "more than a mere agreement of the parties [is required] to seal documents filed in a public courtroom." (Universal City Studios, supra, 110 Cal.App.4th at p. 1281.) There must be "a specific showing of serious injury" from disclosure. (Id. at p. 1282.) Universal City Studios noted no appellate court decision had construed Publicker to permit a record to be filed under seal "merely upon the agreement of the parties without a specific showing of serious injury." (Universal City Studios, supra, at p. 1282; see Huffy Corp. v. Superior Court (2003) 112 Cal.App.4th 97, 106; McNair v. National Collegiate Athletic Assn. (2015) 234 Cal.App.4th 25, 35-36.) Thus, the "[m]ere deprivation of the right to enforce a contractual obligation is not, without an additional showing of serious harm, sufficient to override the public's right of access to the courts." (Lederman v. Prudential Life Ins. Co. of America, Inc. (2006) 385 N.J. Super. 307, 318; see Publicker, supra, 733 F.2d at p. 1071 [party seeking to seal records must show disclosure will work a clearly defined and serious injury]; see also Universal City Studios, supra, 110 Cal.App.4th at pp. 1283-1284 [contractual obligation not to disclose terms of settlement agreement could be an "overriding interest," however, defendant did not show substantial prejudice to its business interests would occur if settlement were not sealed].)
C. Legal Analysis
Here, the parties agreed to keep the terms of the settlement agreement confidential, and although the terms of the agreement appear to be innocuous, this is a newsworthy case. (Publicker, supra, 733 F.2d at pp. 1073-1074.) General Yeager is to some extent a public figure, and this case received some media attention. However, even if we assume this alone was sufficient to constitute an overriding interest, it is unclear how serious injury would result to either party from lifting the seal.
The sealed records disclose no trade secrets, financial information, or product information. The parties have not shown disclosure would result in a breach of any privilege, such as the attorney-client privilege, nor do the sealed records contain information likely to be embarrassing. (People v. Jackson (2005) 128 Cal.App.4th 1009, 1024 ["[w]hile commercial harm or embarrassment of a party does not alone justify sealing the entire record of a case [citation], it is appropriate to seal certain records when those particular records contain highly sensitive and potentially embarrassing personal information about individuals"].)
In our view, the settlement appears to be a routine agreement. One that, by its express terms, permits the parties to disclose to outside sources that a settlement was reached, even though the terms of the settlement are confidential. As such, it appears the only harm that would result from lifting the seal would be the obvious: it would undermine the parties' right to contract. Case authority suggests, however, this alone is insufficient to show a substantial injury would result from public disclosure. (See Universal City Studios, supra, 110 Cal.App.4th at p. 1284.)
We are mindful of the strong public policy favoring settlement (Village Northridge Homeowners Assn. v. State Farm Fire & Casualty Co. (2010) 50 Cal.4th 913, 930), and the fact that the confidentiality provision here was key to the parties' agreement. However, we do not view this policy so strong as to outweigh the public's right of access to civil trials, which is protected by the First Amendment and a common law right of access. (Overstock. com, Inc. v. Goldman Sachs Group, Inc., supra, 231 Cal.App.4th at pp. 484-485.) Following Publicker and its progeny, case authority suggests more than an agreement to keep the terms of a settlement agreement confidential must be shown to justify sealing records.
WCT contends there are critical privacy concerns at issue here that would be harmed if the seal is lifted. According to WCT, disclosure of the sealed records might harm General Yeager's reputation, which could potentially affect "his good will and reputation for future business opportunities." WCT argues its reputation may also be harmed because allegations of misrepresentation and concealment were made against it. WCT asserts it could potentially be financially impacted by these claims.
We find WCT's claims unpersuasive. In arguing that reputational harm would result from unsealing the settlement records, WCT fails to consider the nature of the records that are already public, namely, the parties' complaints. (Hurvitz v. Hoefflin (2000) 84 Cal.App.4th 1232, 1246 ["[c]ourt records are public records, available to the public in general, including news reporters, unless a specific exception makes specific records nonpublic"].) The parties' complaints provide detailed allegations of claims for breach of contract, malpractice, and misrepresentation. While WCT claims disclosure of the settlement agreement would cause reputational harm, it does not specify why disclosure of the settlement would cause harm to its future business or to General Yeager's reputation. We find WCT's conclusory assertions unpersuasive considering the content of the sealed settlement records and in light of the records which are already public.
We conclude none of the documents lodged with us under seal may be sealed. Rule 2.551(h)(2) of California Rules of Court states:
"A party or member of the public may move, apply, or petition, or the court on its own motion may move, to unseal a record. Notice of any motion, application, or petition to unseal must be filed and served on all parties in the case. The motion, application, or petition and any opposition, reply, and supporting documents must be filed in a public redacted version and a sealed complete version if necessary to comply with (c)."For purposes of addressing the parties' claims on appeal, we moved sua sponte to unseal the records in the instant matter. The instant appeal follows.
II. Right to Appeal the Settlement Agreement
WCT contends the Yeagers are barred from appealing the judgment of the trial court because they voluntarily accepted a benefit of the settlement agreement. It asserts the release of interpleaded funds in another matter involving the parties—the Pavone case—amounted to the voluntary acceptance of a benefit of the settlement, which waived their right to appeal. The Yeagers reply the settlement agreement does not contain any reference to the release of these interpleaded funds. They further contend the release of the interpleaded funds was only a proposed paragraph in the settlement that was never agreed upon, and there is no evidence showing they actually received the interpleaded funds as part of the settlement.
We conclude WCT's agreement to release its claim to interpleaded funds in the Pavone case was a condition of the settlement agreement. It appears the Yeagers were permitted to obtain these funds, in part, because of WCT's release. As a result, we conclude the Yeagers' claims challenging the enforceability of the settlement agreement are waived on appeal.
A. Background
On May 6, 2014, the parties entered into an oral stipulation for settlement. At the hearing, an attorney representing WCT orally recited the terms of the settlement agreement. One of the provisions references the agreement to relinquish interpleaded funds:
"No. 7: [¶] ... [¶] ... Parties will agree no one is making any admissions by this settlement, that each party has the authority and capacity to execute the settlement. And that each party will sign and execute any documents necessary to implement the settlement, including the release of the funds on deposit. And the Court can enforce this settlement pursuant to CCP section 664.6." (Italics added.)
Following the hearing, WCT sent the Yeagers a draft copy of the terms agreed upon. One of the terms stated the following:
1. FEE DEPOSIT ATTORNEYS shall relinquish any claim they have to the funds on deposit with the clerk of the Nevada County Superior Court as a result of that certain stipulation entered in the Fresno Action related to the matter pending in the County of Nevada, Case No 74323 entitled American Contractors Indemnity Co. v. Benjamin Laurence Pavone, et al."
The Yeagers responded with their own version of the draft settlement agreement. Their version also included a condition detailing the release of interpleaded funds in the Pavone case.
During the August 1st hearing on WCT's motion to enforce the settlement, the parties discussed the terms of the agreement. The following colloquy occurred:
"THE COURT: Second, the added in statement that Wild, Carter & Tipton relinquished claims to interpled funds—there was nothing on the record about that at all, either.
"MS. YEAGER: I think there may have been, but—
"THE COURT: Do you need a copy of the transcript?
"MS. YEAGER: I have one.
"THE COURT: You can look through it. I reviewed it and the term sheet and saw nothing about that.
"MS. YEAGER: Judge, on page 3—do you have a copy?
"MS. JEFFCOACH: Uh-huh.
"MS. YEAGER: Line 20, 19 and 20, that's referring to the interpled funds.
"THE COURT: Including the release of funds on deposit.
"MS. YEAGER: Yes.
"THE COURT: Is that correct, Ms. Jeffcoach?
"MS. JEFFCOACH: Your Honor, I was not here, but I believe that was the case, with the dismissals and the performance of the terms. It's my client's intention to relinquish any claims to those funds, again conditioned on the performance of the terms of the settlement.
"THE COURT: So Wild, Carter & Tipton will release—relinquish any claim to the interpled funds as a result of the settlement? The parties agree to that?
"MS. JEFFCOACH: Upon the performance of the settlement, yes.
"MS. YEAGER: Judge, the second part of what Ms. Jeffcoach said is not on the record.
"THE COURT: Okay. All right."
On August 25th, the superior court granted WCT's motion to enforce the settlement. In its order, the court made the following findings:
"Nothing about [Code of Civil Procedure] Section 664.6 empowers the court to force new terms into a settlement (even if the parties could have added additional terms to an after-the-fact written agreement, the court can only enforce the terms of the settlement read into the record.)...
"But an example of an 'additional term' the court could add (and did approve adding at the hearing on August 1st) was the term entitling the Yeagers to a release of funds now held by the Nevada County Superior
Court, since the parties clarified that the reference in the record to the 'release of funds on deposit' ... was intended to refer to these funds. This is just the kind of ambiguity a court is empowered to resolve on a motion to enforce settlement under Code of Civil Procedure Section 664.6, and is a prime example of an 'additional term' the court can add."
The trial court held the terms of the settlement reflected in exhibit A (the transcript of the May 6th hearing) were clarified at the August 1st hearing, and incorporated those clarifications into the judgment.
On September 4, 2015, the Nevada County Superior Court granted the Yeagers' application to release all interpleaded funds in the Pavone case.
We grant WCT's request to take judicial notice of the existence of the pleadings in the matter of American Contractors' Indemnity Co. v. Pavone (Super. Ct. Nevada County, 2015, No. CU09-074323). (Evid. Code, § 452, subd. (d); see Day v. Sharp (1975) 50 Cal.App.3d 904, 914 ["'court may take judicial notice of the existence of each document in a court file, but can only take judicial notice of the truth of facts asserted in documents such as orders, findings of fact and conclusions of law, and judgments'"].) These pleadings reflect an acknowledgment of satisfaction of judgment in full by Connie Bowlin, a judgment creditor, against General Yeager and the Foundation.
B. Legal Principles
"A party may not voluntarily accept the benefits of a settlement negotiated and accepted ... and at the same time disavow the settlement to the extent it is against his or her perceived interests." (Villa v. Cole (1992) 4 Cal.App.4th 1327, 1336-1337.) "'It is the settled rule that the voluntary acceptance of the benefit of a judgment or order is a bar to the prosecution of an appeal therefrom.'" (Gudelj v. Gudelj (1953) 41 Cal.2d 202, 214.) The party arguing that an appeal is barred "must demonstrate a clear and unmistakable acquiescence in, or, to put it another way, an '"unconditional, voluntary and absolute"' acceptance of, the fruits of the judgment." (In re Marriage of Fonstein (1976) 17 Cal.3d 738, 744.)
C. Legal Analysis
WCT claims the Yeagers waived their right to appeal because they voluntarily accepted a benefit of the settlement agreement—WCT's relinquishment of their claim to the interpleaded funds in the Pavone case. The Yeagers contend the settlement agreement fails to reference the interpleaded funds in Pavone, and there is no evidence showing they received the interpleaded funds as part of the settlement agreement. We disagree.
1. The Settlement Agreement References the Interpleaded Funds
In its August 25, 2014, ruling, the trial court held the settlement agreement and the May 6, 2014, hearing transcript referenced the relinquishment of WCT's claim to the interpleaded funds in the Pavone matter as a condition of the settlement. The Yeagers contend this term was only a proposed paragraph in the settlement agreement, which was never agreed upon by the parties. The record refutes their assertion. During the August 1st hearing, Mrs. Yeager acknowledged the "release of the funds" discussed by the parties during the May 6th hearing referred to the release of funds in the Pavone case. Consistent with the trial court's ruling, we conclude the "release of the funds on deposit" discussed at the May 6th hearing was plainly intended to refer to the interpleaded funds in the Pavone matter.
2. The Yeagers Voluntarily Accepted a Benefit of the Settlement
The Yeagers assert "there is no factual support for the claim that [they] received the interpleaded funds as part of the purported settlement agreement." They contend the release of the interpleaded funds in Pavone was predicated upon a satisfaction of judgment filed in Yeager v. Bowlin. They further note the court's order in Pavone makes no reference to the settlement agreement in the instant matter. We find their contentions unpersuasive.
An interpleader action is designed to prevent a multiplicity of suits. (Shopoff & Cavallo LLP v. Hyon (2008) 167 Cal.App.4th 1489, 1513.) When a plaintiff may be subject to competing claims for money or property, "the person may bring an interpleader action to compel the claimants to litigate their claims among themselves." (City of Morgan Hill v. Brown (1999) 71 Cal.App.4th 1114, 1122; see Code Civ. Proc., § 386, subd. (b).) "Once the person admits liability and deposits the money with the court, he or she is discharged from liability and freed from the obligation of participating in the litigation between the claimants." (City of Morgan Hill v. Brown, supra, at p. 1122.) In an interpleader action, the court has the authority to resolve issues such as "'the alleged existence of conflicting claims regarding ... interpleaded funds.'" (Shopoff & Cavallo LLP v. Hyon, supra, at p. 1513.)
Here, the pleadings in Pavone show prior to September 2015, WCT was one of the defendants in the interpleader action. We have no way of ascertaining whether WCT's claim to the interpleaded funds would have been meritorious. Logically, however, the Yeagers were permitted to successfully petition the court for the release of these funds without having to litigate the matter to completion because WCT relinquished any claim it had to these funds. Because the Yeagers voluntarily accepted a benefit of the settlement, it appears they are precluded from appealing its enforcement. We will, nonetheless, address the merits of their claims challenging the settlement agreement to explain why their remaining contentions lack merit.
In their reply briefs, the Yeagers argue General Yeager was "compelled" to enter into the settlement agreement without the consent of a lienholder. They contend a judgment creditor, Connie Bowlin, was required to provide written consent to the settlement in the instant matter. We initially observe the Yeagers raised this issue for the first time in their reply briefs. "'Points raised for the first time in a reply brief will ordinarily not be considered, because such consideration would deprive the respondent of an opportunity to counter the argument.'" (Reichardt v. Hoffman (1997) 52 Cal.App.4th 754, 764.) Moreover, this issue was not sufficiently raised below by citation to evidence and discussion of legal authority. As a result, the record is insufficient to permit us to ascertain the merits of the Yeagers' argument. We deem their argument waived as a result.
III. Civil Code Section 1556 Does Not Apply
The Yeagers claim General Yeager was deprived of his civil rights under Civil Code section 1556 because the superior court failed to make necessary accommodations for his profound hearing loss. WCT contends section 1556 applies only to individuals who are imprisoned in a California state prison.
We conclude the Yeagers' claim is without merit. Not only does Civil Code section 1556 not apply under the facts of the instant matter, the record shows the superior court made efforts to accommodate General Yeager's hearing loss.
A. Background
On April 23d, during the first day of trial, the superior court advised the parties if any of the witnesses had hearing issues or physical limitations, the court could accommodate such issues. The court explained, "if ... any of your potential witnesses ... have any special needs, such as hearing impairments or physical limitations, let the Court and opposing Counsel know ahead of time or the Yeagers so we can accommodate them so it doesn't drag the trial down and slow it down. Okay?" The Yeagers did not raise the issue of General Yeager's hearing loss.
On April 24th, Mrs. Yeager notified the court that General Yeager "has a disability, a hearing loss[.]" The trial court advised the Yeagers the court had assisted listening devices available that General Yeager could use. Mrs. Yeager responded, "It's a little more than that. At 91, when you have hearing loss, it means that, when you were to say a word not in context, he would understand it about 45 percent of the time. So it will be a very, very, very long trial." That afternoon, the trial court asked General Yeager whether he "want[ed] an assisted listening device so that [he could] hear." General Yeager responded negatively. Mrs. Yeager remarked, "It has to do with language, as well."
At the August 1st hearing, Mrs. Yeager claimed General Yeager had been given a court assisted listening device by a bailiff, but the device "was inadequate" and "it didn't work." The court responded, "No one told me [the device] didn't work. And I've used it in many trials; I've had jurors use it since this trial and no one's complained about it. So I don't believe that to have any basis." The court also noted, "without prompting or translation, [General Yeager] ... stated that as long as something was moved to when he was 90 years old as opposed to when he was 80 years old he was fine with the settlement." On this basis, the court rejected Mrs. Yeager's claim that General Yeager could not hear the court proceedings.
B. Legal Principles
Civil Code section 1556 provides the following: "All persons are capable of contracting, except minors, persons of unsound mind, and persons deprived of civil rights." (Italics added.) Prior to 1976, former Penal Code section 2600 provided the following, in relevant part: "'A sentence of imprisonment in a state prison for any term suspends all the civil rights of the person so sentenced and forfeits all public offices and all private trusts, authority, or power during such imprisonment ....'" (Deutch v. Hoffman (1985) 165 Cal.App.3d 152, 154, fn. 2, citing Stats. 1968, ch. 1402, § 1, p. 2763, italics omitted.) Thus, "persons deprived of civil rights" includes prisoners.
C. Legal Analysis
The Yeagers contend former Penal Code section 2600 includes individuals who are protected under the Americans with Disabilities Act. However, they do not direct us to legal authority to support their assertion. Even assuming the Yeagers are correct, the record does not support their contention the superior court failed to make necessary accommodations for General Yeager's hearing loss.
The record shows General Yeager was offered a court assisted listening device, but he refused the device. Although Mrs. Yeager has previously asserted General Yeager was, in fact, given a listening device by the court bailiff but the device did not work, there is no evidence of this in the record.
The Yeagers further contend General Yeager should also have been offered an interpreter. The parties never raised the issue of an interpreter, nor does the record show the necessity thereof. Mrs. Yeager claims the court should also have permitted her to translate for General Yeager, because General Yeager "has become attuned to her voice and speech characteristics, which enable more efficient comprehension." There is no evidence showing this was a necessary accommodation. Indeed, our independent review of the record reveals no support for the Yeagers' claim General Yeager was unable to hear the court proceedings or that he was denied accommodation for his hearing disability. We reject the Yeagers' assertion that General Yeager's civil rights were violated.
IV. The Trial Court Properly Granted WCT's Motion to Enforce the Settlement Agreement Under Code of Civil Procedure Section 664.6
The Yeagers contend the trial court erred in granting WCT's motion to enforce the settlement under Code of Civil Procedure section 664.6. We conclude their contentions are without merit.
A. Code of Civil Procedure section 664.6
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." An oral settlement recited in open court is enforceable under section 664.6 even if the parties contemplated memorializing the agreement in writing, but never did. "When parties intend that an agreement be binding, the fact that a more formal agreement must be prepared and executed does not alter the validity of the agreement." (Blix Street Records, Inc. v. Cassidy (2010) 191 Cal.App.4th 39, 48.)
When the trial court decides a motion to enforce a settlement under Code of Civil Procedure section 664.6, it acts as the trier of fact, determining whether the parties have entered into a binding settlement. (Osumi v. Sutton (2007) 151 Cal.App.4th 1355, 1360.) "The trial court's factual findings on a motion to enforce a settlement under section 664.6 'are subject to limited appellate review and will not be disturbed if supported by substantial evidence.'" (Critzer v. Enos (2010) 187 Cal.App.4th 1242, 1253.) To be substantial, evidence must be "reasonable in nature, credible, and of solid value." (Estate of Teed (1952) 112 Cal.App.2d 638, 644.) "Where there is conflicting evidence, or evidence susceptible of conflicting inferences, the general rule is not to disturb the judgment. All presumptions are in favor of the judgment." (Rivard v. Board of Pension Commissioners (1985) 164 Cal.App.3d 405, 412.)
B. The Yeagers' Claims
The Yeagers allege multiple claims on appeal, attacking the validity and enforceability of the settlement agreement. In explaining why we find their claims unpersuasive, we quote the record extensively because in the words of the trial court, "the transcript speaks for itself." The record shows the material terms of the agreement were clear, the parties communicated their understanding of those terms, and the parties made clear their intent to be bound by them. Further, contrary to the Yeagers' claims, we find no evidence the parties were induced to execute the settlement agreement by fraud or duress. We therefore conclude the court did not err by enforcing the parties' settlement agreement under Code of Civil Procedure section 664.6.
1. The Terms of the Agreement Were Clear
The Yeagers initially contend the material terms of the settlement were not explicitly defined. They point to the fact General Yeager is a senior citizen, Mrs. Yeager is a pro se litigant, and General Yeager's attorney, Michael Thomas, moved to withdraw from his representation of General Yeager the morning of settlement negotiations. The Yeagers further contend they were confused as to the provision requiring the parties to waive all unknown claims pursuant to Civil Code section 1542, and they did not understand what the term "disparagement" meant when they agreed not to make disparaging remarks about WCT as a condition of settlement. We find their claims unpersuasive.
a. Background
At the May 6th hearing, counsel for WCT recited the following settlement term:
"[MR. WHITNEY:] Five: The parties agree not to publish orally, electronically or in writing, any disparaging matters or statements about the other .... [¶] By 'disparaging,' we understand that to mean any statement, publication that would, to a reasonable person, place the entity or person in a bad light."
With respect to the Civil Code section 1542 waiver of unknown claims, counsel for WCT stated the following:
"[MR. WHITNEY:] No. 7: The parties agree to sign a standard settlement agreement with the customary terms and conditions, including mutual releases of all claims each may have against the other arising from the transactions and representations referred to in the action being settled. And that's the action in which we're putting this matter on the record.
"And the second item: The parties will execute a settlement that contains the standard California Civil Code section 1542 'Waiver of Unknown Claims.'"
At the August 1st hearing, Mrs. Yeager expressed confusion as to the meaning of the Civil Code section 1542 waiver. Referencing the transcript of the May 6th hearing, counsel for WCT explained the meaning of the waiver:
"MS. JEFFCOACH: Your Honor, on page 3, lines 5 through 17, I think it makes clear the inclusion of the 1542, both in what I'll term 'layman's' standard English and then the actual reference to 1542. So we do believe that it was a term included for the parties. [¶] ... [¶]
"THE COURT: ... I do find that the parties agreed to California Civil Code section 1542 waiver of unknown claims. I will also state that although Mrs. Yeager was not represented, she was representing herself throughout this litigation. She's displayed ample knowledge of the law and the ability to understand the law throughout the proceedings. [¶] So I don't find that she didn't know or could not have easily determined what that
term meant. And, additionally, it was explained in layman's terms on lines 5 through 17."
At the hearing, Mrs. Yeager asked for further clarification as to the terms of the settlement agreement. She asked whether the Civil Code section 1542 waiver meant "that absolutely anything that Wild, Carter & Tipton did before May 6, absolutely anything at all, we have no claim?" Opposing counsel replied affirmatively.
b. Legal Principles
"[I]n determining whether the parties entered into a binding settlement of all or part of a case, a ... court should consider whether (1) the material terms of the settlement were explicitly defined, (2) the supervising judicial officer questioned the parties regarding their understanding of those terms, and (3) the parties expressly acknowledged their understanding of and agreement to be bound by those terms." (In re Marriage of Assemi (1994) 7 Cal.4th 896, 911.) The standard governing review of such determinations by a trial court is whether the court's ruling is supported by substantial evidence. (Ibid.)
c. Legal Analysis
The Yeagers contend the material terms of the settlement were not explicitly defined. They specifically contend Civil Code section 1542 was not made clear to them, nor was the definition of "disparaging" made clear. We disagree.
First, with respect to the Yeagers' challenge to the Civil Code section 1542 waiver, the record discloses no basis to conclude the trial court erred in finding the Yeagers reasonably understood the meaning of this waiver. The language of the waiver is straightforward—it applies to all unknown claims arising from WCT's representation of the Yeagers in legal matters.
In Casey v. Proctor (1963) 59 Cal.2d 97, the releasor signed a form release sent to him by an insurance adjuster only days after the releasor's accident. The releasor was not represented by counsel, and at the time he signed the release, he had not sought medical advice; he believed he had sustained no injuries other than property damage. The release covered all known and unknown bodily injury and damages to property, but did not contain a specific waiver of Civil Code section 1542 . (Casey v. Proctor, supra, at pp. 100-102.) Our Supreme Court concluded the intent of section 1542 was to prevent a party from inadvertently waiving unknown claims merely by signing a general release. (Casey v. Proctor, at pp. 108-109.) According to the court, section 1542 was intended to prevent the mere recital in a release for all unknown claims "from barring a claim for injuries later discovered in the absence of a showing of a conscious understanding that if injuries were suffered which had not yet manifested themselves, they too would be discharged by the release." (Casey, supra, at p. 109.)
Casey v. Proctor is factually and legally distinguishable from the instant matter. Here, unlike Casey, the waiver specifically referred to a waiver of unknown claims under Civil Code section 1542. Further, there are no overriding policy considerations present here as in Casey. (Winet v. Price (1992) 4 Cal.App.4th 1159, 1170 [policy concerns peculiarly applicable to personal injury releases, including the difficulty of "evaluating long-term effects of personal injuries," and "the adhesive nature of a form release" warrant special treatment].) Further, the Yeagers were not presented with a form release requiring them to agree to the section 1542 waiver or leave it. Rather, this release was a bargained-for condition of settlement, and General Yeager was represented by counsel during the negotiation of the release. (See Salehi v. Surfside III Condominium Owners Assn. (2011) 200 Cal.App.4th 1146, 1160, citing Winet v. Price, supra, at p. 1168.)
Insofar as Mrs. Yeager complains she lacked the knowledge of a trained lawyer because she proceeded pro se below, we note the well-settled rule that a self-represented litigant "'is to be treated like any other party and is entitled to the same, but no greater consideration than other litigants and attorneys.'" (Nwosu v. Uba (2004) 122 Cal.App.4th 1229, 1247.) Although we are cognizant of the significant challenges pro se litigants often face, the competency demonstrated by Mrs. Yeager during the proceedings below casts considerable doubt on her claim that she was disadvantaged by electing to proceed pro se. Mrs. Yeager was actively engaged in negotiating the terms of the settlement, she was diligent about asking questions regarding the meaning and implication of certain terms, and she demonstrated a grasp of legal concepts superior to that of a typical pro se litigant. By all indications, the record shows she was a sophisticated party.
General Yeager, on the other hand, was represented by counsel. Although he claims he did not understand the implications of agreeing to waive all unknown claims under Civil Code section 1542, there is no evidence to support his assertion. In the absence of evidence to the contrary, we presume counsel explained to General Yeager the import of the release in general and of the waiver of section 1542 in particular. (Salehi v. Surfside III Condominium Owners Assn., supra, 200 Cal.App.4th at p. 1160.)
Second, to the extent the Yeagers contend the definition of "disparaging" was not made clear with respect to the condition prohibiting the parties from making disparaging remarks about one another, the record demonstrates otherwise. On May 6th, counsel for WCT explained "disparaging" meant "any statement, publication that would, to a reasonable person, place the entity or person in a bad light." The court explained the definition agreed upon could be "somewhat of a slippery slope" but "[t]he parties agree that the Court maintain jurisdiction, so I would decide then." Thus, to the extent the term "disparaging" could be defined, the record shows that it had been.
2. All Parties Expressed Their Understanding of the Material Terms and the Intent to be Bound
The Yeagers contend they were not questioned regarding their understanding of the material terms of the agreement, nor did they expressly acknowledge their understanding of the agreement and intent to be bound. We disagree.
a. Background
Following the parties' discussion of the settlement terms at the May 6th hearing, the following colloquy occurred between the parties and the superior court:
"MR. WHITNEY: We would just like everyone to confirm to the Court that that's their settlement.
"THE COURT: ... Mr. Whitney, on behalf of your clients, is that your settlement?
"MR. WHITNEY: Yes, it is. [¶] ... [¶]
"MR. BROWN: Yes. [¶] ... [¶]
"MR. MORRISON: Yes, your Honor. [¶] ... [¶]
"MR. PHILLIPS: It is. Thank you, your Honor. [¶] ... [¶]
"MR. ELIASON: Yes, your Honor. [¶] ... [¶]
"MS. YEAGER: I was just going to repeat a little bit about what Mr. Thomas said. I will do my best to stop, if it comes out. Because somebody over 80, you know, the governor starts going away.
"THE COURT: Absolutely. And that's why I think it was very important for Mr. Thomas to put that in. And I don't think anyone is going to hold that part against the General. I wouldn't expect them to. [¶] ...[¶]
"MR. WHITNEY: If somebody slips in that, we simply ask for a retraction, if it's important.
"THE COURT: Okay?
"MS. YEAGER: Yes, I agree.
"GENERAL YEAGER: Yeah, as long as you move the age above 90. [¶] ... [¶]
"MR. THOMAS: Yes, that's my understanding of the settlement, your Honor."
The parties were referring to any disparaging remarks about WCT inadvertently made by General Yeager. Under the terms of the settlement, the parties were not permitted to make disparaging remarks about one another, with the exception of any inadvertent remarks made by General Yeager. Such remarks would not be considered a violation of the agreement, but would be retracted at the request of WCT.
b. Legal Principles
For oral consent to a settlement agreement to be valid, "[u]nambiguous assent, expressed orally, is required in order to 'minimize[] the possibility of conflicting interpretations of [a] settlement.'" (Conservatorship of McElroy (2002) 104 Cal.App.4th 536, 551.) Requiring the parties to stipulate in writing or orally before the court "tends to ensure that the settlement is the result of their mature reflection and deliberate assent. This protects the parties against hasty and improvident settlement agreements by impressing upon them the seriousness and finality of the decision to settle, and minimizes the possibility of conflicting interpretations of the settlement. [Citations.] It also protects parties from impairment of their substantial rights without their knowledge and consent." (Levy v. Superior Court (1995) 10 Cal.4th 578, 585, fn. omitted.)
The parties must have manifested mutual assent or consent to the agreement to be bound by its terms. (Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 811.) "'The existence of mutual consent is determined by objective rather than subjective criteria, the test being what the outward manifestations of consent would lead a reasonable person to believe.'" (Ibid.)
c. Legal Analysis
The transcript of the May 6th settlement hearing shows the court asked the parties whether they agreed to the settlement recited. We interpret the trial court's question as asking the parties both whether they understood and agreed to the terms recited. The Yeagers made no objections to the terms recited. Further, Mrs. Yeager was actively involved in clarifying the terms of the agreement and ensuring certain exceptions to various conditions were made clear and were on the record.
The Yeagers contend the transcript of the August 1st hearing demonstrates they did not understand the terms of the agreement, specifically, the waiver of unknown claims under Civil Code section 1542. They also claim they did not agree to settle the "Sacramento case," but yet this term appeared in WCT's draft settlement agreement. Although Mrs. Yeager asked additional questions about the section 1542 waiver of unknown claims at the August 1st hearing, nothing in the record demonstrates the Yeagers did not understand the implications of this waiver at the May 6th hearing. With respect to the Sacramento case, the superior court held settlement of that case "wasn't discussed with me," and stated, "I don't think I would have the jurisdiction to dismiss anything in another county." Since the Sacramento case was not part of the settlement agreement, and the trial court made as much clear at the August 1st hearing, we fail to see the relevance of the Yeagers' argument.
The Yeagers further assert since WCT is a corporate defendant, the corporation or its officers were required to consent to the settlement agreement, but that never occurred. They also argue there was no assent to the agreement by the trustee of the Yeager Trust. WCT acknowledges it is bound to the agreement by shareholders and corporate officers Bruce Brown, Robert Eliason, and John Phillips. Brown, Eliason, Phillips, and their former associate, Norman Morrison, all personally appeared at the May 6th hearing, where they agreed to be bound by the terms of the settlement. Nothing in the record compels us to conclude their assent to the settlement agreement was insufficient to bind WCT.
With respect to the Foundation, the record does not permit us to conclusively determine whether it is part of the agreement or not. The Foundation was dismissed prior to settlement negotiations, and it is unclear whether General Yeager was appearing on behalf of the Foundation at the May 6th hearing. We note Mrs. Yeager raised this issue several times at the August 1st hearing, however, it appears the superior court made no specific finding on this issue. Nonetheless, as we explain in part VII, post, whether the Foundation agreed to the terms of the settlement agreement is irrelevant.
3. The Court Retained Jurisdiction to Enforce the Settlement Agreement
The Yeagers contend the superior court lacked jurisdiction to hear WCT's motion to enforce the settlement agreement, and the court has no jurisdiction to enforce the terms of the settlement because it dismissed the parties' claims with prejudice. According to the Yeagers, "After such a dismissal, a superior court has no subject matter jurisdiction to grant relief under Section §664.6 [sic] other than awarding costs and fees as appropriate."
The record shows the superior court did not dismiss the parties' claims until after it was made clear the court would retain jurisdiction to enforce the settlement. Thus, the court had jurisdiction to rule on WCT's motion to enforce the settlement agreement, and it has jurisdiction to enforce the settlement agreement.
a. Legal Principles
Dismissal of a settled action is no obstacle to enforcement of a settlement agreement in a civil action. (Pietrobon v. Libarle (2006) 137 Cal.App.4th 992, 996-997.) Nor is dismissal an obstacle to enforcement under Code of Civil Procedure section 664.6, so long as the settlement agreement calls for retained jurisdiction by the trial court. (Wackeen v. Malis (2002) 97 Cal.App.4th 429, 439.) "The court retains jurisdiction to enforce a settlement under the statute even after a dismissal, but only if the parties requested such a retention of jurisdiction before the dismissal." (Hines v. Lukes (2008) 167 Cal.App.4th 1174, 1182; accord, § 664.6 ["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"].)
A request for retention of jurisdiction must conform to the following three requirements: "the request must be made (1) during the pendency of the case, not after the case has been dismissed in its entirety, (2) by the parties themselves, and (3) either in a writing signed by the parties or orally before the court." (Wackeen v. Malis, supra, 97 Cal.App.4th at p. 440.)
b. Legal Analysis
The Yeagers maintain "the trial court, upon entry of the purported settlement agreement, chose not to retain jurisdiction and, as part of the purported agreement, voluntary dismissals were to enter." The record belies their assertion.
There is no evidence the parties' lawsuits were dismissed prior to the trial court's ruling on WCT's Code of Civil Procedure section 664.6 motion. Indeed, the trial court stated at the August 1st hearing, "The case will be dismissed with prejudice." Thus, the parties' claims were not dismissed until after the court ruled on WCT's motion to enforce the settlement agreement.
To the extent the Yeagers contend the parties did not request the superior court retain jurisdiction to enforce the agreement, we disagree. At the May 6th hearing, one of the conditions recited provided the following: "And the Court can enforce this settlement pursuant to CCP section 664.6." General Yeager's attorney, Mr. Thomas, also made clear if there was an issue with an exception to the nondisparagement clause that could not be resolved, "either party can bring up [a] motion pursuant to [section] 664.6." Further, at the August 1st hearing, the superior court noted at least several times it was retaining jurisdiction to enforce the terms of the settlement agreement, and it explained to the parties what that meant. None of the parties objected.
On this basis, we conclude the superior court had jurisdiction to hear WCT's motion to enforce the settlement, and it has jurisdiction to enforce the settlement agreement.
4. There Was a Meeting of the Minds
The Yeagers claim, "The two very disparate proposed settlement agreements written by each side clearly demonstrate there was no meeting of the minds or mutual understanding [of] the material terms of the contract." As discussed, we conclude the material terms of the agreement were made sufficiently clear to the parties, the parties understood the meaning of those terms, and they manifested an assent to be bound by them.
Although both parties added additional terms to the settlement in their draft versions of the agreement, the terms recited in open court at the May 6th hearing comprise the settlement agreement. The draft agreements do not show there was no meeting of the minds on May 6th.
a. Legal Principles
Under section 664.6 of the Code of Civil Procedure, "the trial court may enter judgment pursuant to a stipulated settlement if the stipulation is made in one of two ways: either in a writing signed by the parties outside the presence of the court, or orally on the record before the court." (In re Marriage of Assemi, supra, 7 Cal.4th at p. 905.) A section 664.6 motion is appropriate "even when issues relating to the binding nature or terms of the settlement are in dispute, because, in ruling upon the motion, the trial court is empowered to resolve these disputed issues and ultimately determine whether the parties reached a binding mutual accord as to the material terms." (Ibid.)
b. Legal Analysis
As discussed, the record shows the material terms of the agreement were made clear and the parties agreed upon those terms. Contrary to the Yeagers' claims, there was a meeting of the minds.
Insofar as the Yeagers contend there was no agreement because there must be a signed writing by the parties, they are mistaken. Code of Civil Procedure section 664.6 requires a settlement agreement to either be entered in writing and signed by the parties or be entered into orally before a court. (Weddington Productions, Inc. v. Flick, supra, 60 Cal.App.4th at p. 810.)
Here, the parties entered into an oral settlement agreement before the court on May 6th. Although the parties anticipated executing a signed agreement memorializing the terms of their settlement, they nonetheless agreed "the case is settled" based on the terms recited in open court on May 6th. The fact that the parties never did sign a written agreement does not mean they did not reach a valid, binding, enforceable settlement. "When parties intend that an agreement be binding, the fact that a more formal agreement must be prepared and executed does not alter the validity of the agreement." (Blix Street Records, Inc. v. Cassidy, supra, 191 Cal.App.4th at p. 48.)
The Yeagers further contend it is unclear what confidentiality attached to the agreement. They specifically question, "Did it attach to any and all statements concerning the parties? Or did it attach simply to statements concerning the litigation in the instant case?"
At the May 6th hearing, the parties agreed, "The terms of the settlement will be confidential." The superior court further clarified this condition at the August 1st hearing:
"[THE COURT:] And the[] provision for not making future media posts and not making future ones, that appears to be covered in the transcript at pages 2 and 4. And I explained what 'published' meant and 'publications' meant on the record. And so my intent would be to enforce, essentially, the terms stated on the record in the transcript.
"MS. YEAGER: And, Judge. I'm sorry. I haven't read the transcript or memorized it. But as I understood it, it had to do with disparaging comments again—
"THE COURT: No, it's confidential. Which means you can state you settled it and ... 'No, the parties have reached an agreement, and we can't tell you anymore.' [¶] ... [¶] The fact you settled the case you can say. [¶] ... [¶] ... Well, the facts of what occurred prior to settlement you can discuss, sure. You can't discuss terms of the settlement. What is going to be in the judgment, you can't talk about. You can say, 'Yes, we had eight days, and, yes, there were pretrial rulings.' You can say disparaging things about me, because I'm not subject to this— [¶] ... [¶] But you can't say disparaging things about them, because it was part of the settlement agreement, and you can't disclose the actual terms of the settlement.
"MS. YEAGER: I understand that."
As can be seen, it appears the Yeagers did in fact understand the confidentiality condition.
V. The Record of Proceedings on April 28th
The Yeagers contend it could be a mistake to trust the transcripts because there is no transcript for the court proceedings that occurred on April 28th. They assert April 28th was a very important day. WCT asserts the April 28th transcript is not relevant to the oral settlement that was put on the record. We agree with WCT.
A. Background
The court reporter executed a declaration stating no record was made for the court proceedings held on April 28, 2014. However, based on the minute order for April 28th, the Yeagers contend there were proceedings on this date. The minute order for April 28th shows the parties and their counsel appeared, and some court proceedings had occurred "as fully stated on the record."
B. Legal Principles
It is well-established that to be successful on appeal, an appellant must affirmatively demonstrate error. "'"'A judgment or order of the lower court is presumed correct. All intendments and presumptions are indulged to support it on matters as to which the record is silent, and error must be affirmatively shown. This is not only a general principle of appellate practice but an ingredient of the constitutional doctrine of reversible error.'"'" (In re Marriage of Falcone & Fyke (2008) 164 Cal.App.4th 814, 822.) Even where error has been shown, error alone does not warrant reversal. "'Injury is not presumed from error, but injury must appear affirmatively upon the [appellate] court's examination of the entire record.' [Citation.] 'Only when an error has resulted in a miscarriage of justice will it be deemed to be prejudicial so as to require reversal.' [Citation.]" (Id. at pp. 822-823.)
C. Legal Analysis
Here, there are two significant flaws with respect to the Yeagers' claim that the transcripts are not to be trusted. First, although it appears there were, in fact, proceedings held on April 28th, these proceedings were not related to the settlement agreement. The Yeagers contend that on April 28th, the superior court ordered sanctions against them. They do not, however, explain how these proceedings have any bearing on or relevancy to the settlement agreement.
Second, the Yeagers suggest the missing transcript of the proceedings on April 28th undermines all of the other transcripts in the instant matter. We decline their invitation to speculate. Error must be affirmatively shown on appeal. (Denham v. Superior Court (1970) 2 Cal.3d 557, 564.) "'This is not only a general principle of appellate practice but an ingredient of the constitutional doctrine of reversible error.'" (Ibid.) The record fails to show the transcripts related to the settlement agreement—that is, the transcripts of the hearings on May 6th and August 1st—are inaccurate.
VI. There Is No Evidence of Fraud
The Yeagers claim counsel for WCT, Marshall Whitney, and WCT shareholder Bruce Brown signed false declarations in support of WCT's motion to enforce the settlement agreement. In their declarations, Mr. Whitney and Mr. Brown state the handwritten term sheet was signed by all parties, including the Yeagers, in front of Judge Bruce Smith. The Yeagers claim this is "patently false," and further, this fraud vitiates the settlement agreement. We conclude there is insufficient evidence WCT committed fraud in the inducement or execution of the settlement.
A. Legal Principles
California law distinguishes between two types of fraud with respect to contractual agreements. A contract is void for fraud in the execution where "'"the fraud goes to the inception or execution of the agreement, so that the promisor is deceived as to the nature of his act, and actually does not know what he is signing, or does not intend to enter into a contract at all."'" (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 415.) Alternatively, a contract is void in the inducement when "'"the promisor knows what he is signing but his consent is induced by fraud[.]"'" (Ibid.) Fraud in the inducement renders a contract voidable, assuming the aggrieved party rescinds the agreement. In contrast, fraud in the execution renders a contract void "because there never was an agreement." (Brown v. Wells Fargo Bank, N.A. (2008) 168 Cal.App.4th 938, 958.)
B. Legal Analysis
There is no evidence WCT or its counsel engaged in fraud in the execution or inducement of the settlement agreement. Nor is there any evidence Mr. Whitney or Mr. Brown made false statements in their declarations. Although the handwritten term sheet only includes three signatures, we are unable to discern who signed the term sheet. WCT submitted signed declarations insisting the Yeagers had signed the term sheet, but the Yeagers claim the declarations are "patently false." We are bound to resolve the issue in favor of WCT. (Danning v. Bank of America (1984) 151 Cal.App.3d 961, 973 [all factual matters, including issues of credibility, must be viewed most favorably to the prevailing party and in support of the judgment].)
Even if we were not bound to resolve all factual disputes in WCT's favor, we would not conclude the agreement was void or voidable. The parties' settlement agreement was not based on the handwritten term sheet, but on the terms recited in open court. Ultimately, the term sheet was of no consequence to the agreement held enforceable by the superior court. We reject the Yeagers' contention the agreement is void or voidable based on fraud.
VII. The Court Did Not Order a Nonparty to Comply with the Settlement Agreement
The Yeagers assert the superior court exceeded its jurisdiction by requiring a nonparty, the Foundation, to comply with the terms of the settlement agreement. WCT contends the Foundation is bound by the terms of the settlement agreement.
In our view, the parties' arguments miss the mark. The threshold issue is not whether the Foundation is bound by the terms of the settlement agreement, but whether the Yeagers are bound by the agreement. As the trial court explained, the Foundation did not autonomously post certain disparaging remarks about WCT on social media—Mrs. Yeager did. Because she and General Yeager are bound to the agreement, whether the Foundation is also bound to the agreement is irrelevant.
A. Background
At the May 6th hearing, counsel for WCT recited the following term of the settlement:
"Six: The parties will remove from any Web site or Facebook or other social media any such disparaging statements or implications. And, to the extent they have published to third parties, will use their best efforts to have those removed or retracted. And by such third parties, that would include any news media."
At the August 1st hearing, Mrs. Yeager contested the binding nature of the settlement agreement as to the Foundation:
"THE COURT: [Y]ou can't say disparaging things about [WCT], because it was part of the settlement agreement, and you can't disclose the actual terms of the settlement.
"MS. YEAGER: I understand that.
"MS. JEFFCOACH: And, your Honor, for clarity, starting page 2: ' The parties shall remove from any Website or Facebook or other social media any such disparaging statements or implication.' And I want to make sure that is part of the terms of the removal of those disparaging statements that did appear.
"THE COURT: Yes, those need to be.
"MS. YEAGER: However, I will remind us all, those were posted by the General Yeager Foundation and those are regarding a different case.
"THE COURT: Well, if they're not regarding the parties, you don't have a problem. If it's conduct of the parties, it's a problem, and you need to remove those.
"MS. YEAGER: Why, if the General Chuck Yeager Foundation put them up and they're not party to this agreement?
"THE COURT: You need to remove those posts. Because it wasn't a person out of nowhere that put the posts up there. So you need to remove the disparaging post. That was the intent of the parties; otherwise, the parties wouldn't have settled. The law firm intended for those posts to be removed, so they need to be removed. [¶] ... [¶] ... Were there other disparaging posts made by other parties other than the Foundation, other pages by the parties?
"MS. YEAGER: No.
"THE COURT: Okay. That's why. [¶] ... [¶] ... By 'you'—as Victoria Yeager, did you post on social media disparaging comments about [WCT]? I think the only posts that were ever at issue in this litigation were those posted by the Foundation, and I think the record is pretty clear to that. So that is why it applies to them as well. So that's clearly the intent of the parties from all of the transcript of the trial, not just the transcript of the settlement. So it does cover that. And I'm not going to hear any more argument on that. It's a waste of time. Those posts are covered, those have to be removed." [¶] ... [¶]
"MS. YEAGER: So, Judge, just so I understand what you're saying, if someone else, other than me, is controlling the Foundation and they want to post whatever they want to post—
"The Court: I can't control other people. That's true.
"MS. YEAGER: So it's just because I posted them."
In its August 25th judgment, the trial court further clarified the condition requiring the removal of any disparaging comments:
"The parties will remove from any website or Facebook or other social media any such disparaging statements or implications. And, to the extent
any party has published disparaging comments to third parties, that party will use their best efforts to have those removed or retracted. Such third parties would include any news media. This also expressly includes, without limitation, publications on the website for the General Chuck Yeager Foundation, even though this party was dismissed from the action, as the remaining defendants/cross-complainants have active involvement with, and some control over, this organization and what is published on this site, and moreover statements on this site were expressly the subject of the litigation and the negotiations which resulted in this settlement."
B. Legal Analysis
The parties dispute whether the Foundation could be compelled under the terms of the settlement agreement to remove disparaging comments about WCT from its Web site. The parties do not dispute the Foundation was dismissed from the underlying suit filed by WCT, and the Foundation is not a party to this appeal.
In our view, the superior court did not bind the Foundation to the terms of the settlement agreement so much as it ordered the Yeagers, who are responsible for the operation of the Foundation's Web site, to remove any disparaging comments from the Web site or social media. As the court noted, the Foundation did not post the disparaging comments autonomously. Moreover, at the August 1st hearing, Mrs. Yeager conceded she had posted the remarks. Because she is bound by the settlement agreement, she must remove the disparaging remarks posted. We reject the Yeagers' assertion the court attempted to bind a nonparty to the terms of the settlement agreement.
VIII. Whether WCT Violated the Confidentiality Agreement
The Yeagers allege WCT breached the confidentiality provision in the settlement and, as a result, all obligations under the agreement have been released. They assert WCT sent a letter to Channel 30 asking for WCT's copyrighted material to be removed pursuant to the terms of a confidential settlement agreement. The disposition of this issue calls for findings of fact based on evidence that is not part of the record on appeal. We decline to reach the merits of the Yeagers' claim.
IX. There Is No Evidence of Duress
The Yeagers contend they signed the settlement agreement under duress. They argue counsel for WCT, the superior court judge, and General Yeager's attorney, Mr. Thomas, placed them under extreme duress. The Yeagers specifically assert counsel for WCT threatened to report Mrs. Yeager for practicing law without a license, the superior court's decisions against them caused the Yeagers anxiety, Mr. Thomas threatened to withdraw from the case if the Yeagers did not settle, General Yeager "had been threatened that Victoria Yeager would not be permitted to help him," the Yeagers were ordered to pay $15,500 in sanctions, the court "ordered the parties to settle their case," both the court and Mr. Thomas pushed the Yeagers into settlement, and the Yeagers did not have an opportunity for a rest break on the day they settled. The record contains insufficient evidence to show the Yeagers were under duress.
A. Background
On May 6th, Mr. Thomas advised the superior court he needed to withdraw from representation of General Yeager and the Foundation for several reasons. One of the reasons was that General Yeager was not following Mr. Thomas's advice on his approach to the case. Another was a conflict of interest arising from Mr. Thomas's representation of Mrs. Yeager on another matter. Finally, Mr. Thomas indicated Mrs. Yeager was taking a position adverse to the position of General Yeager, Mr. Thomas's client. The court denied Mr. Thomas's motion, but would permit reconsideration of the motion at the evidentiary portion of the case.
Prior to settlement negotiations, the court stated, "I know, Mr. Thomas, there's a motion you want to renew. I understand that. Go ahead. And if there needs to be an in-camera [hearing], we can do that." The record does not show an in camera hearing was held thereafter.
In a motion filed on June 25, 2014, Mr. Thomas explained the reason he sought to be relieved as counsel for General Yeager was because of a "breakdown in the attorney- client relationship and non-payment for legal services." Mr. Thomas stated he would have to act as a witness against General Yeager in the event of a dispute over whether General Yeager consented to settlement in this instant case.
At the August 1st hearing, the Yeagers raised the issue of duress before the superior court. The superior court noted it had reviewed the transcript in detail and based on its review, as well as its independent recollection of the case, "there was no duress exhibited." Mrs. Yeager "made changes to the agreement in open court, was actively involved in discussing the terms, [and] did not appear to be under any duress whatsoever."
B. Legal Principles
Duress is a defense to contract formation, which negates the element of intent. (Foster v. Snyder (1999) 76 Cal.App.4th 264, 271.) Duress may be shown by threats to business or property interests. (CrossTalk Productions, Inc. v. Jacobson (1998) 65 Cal.App.4th 631, 645.) "The 'wrongful act' must be sufficiently coercive to cause a reasonably prudent person to be faced with no reasonable alternative but to 'succumb.' Examples of such 'wrongful acts' include the assertion of a claim known to be false, a bad faith threat to breach a contract or a threat to withhold a payment." (Ibid.) "'The question of duress ... is a factual question; the existence of duress always depends upon the circumstances.'" (Ibid.)
C. Legal Analysis
The Yeagers claim they only assented to the terms of the settlement agreement because they were under duress. We find their claim unmeritorious.
Although we decline to repeat each allegation alleged by the Yeagers to support their claim, we have carefully reviewed their claims as well as the record to determine whether any of the acts alleged, alone or in the aggregate, would amount to duress. Their claims fail to support the conclusion they assented to the terms of the settlement agreement because they had no reasonable alternative but to do so. (CrossTalk Productions, Inc. v. Jacobson, supra, 65 Cal.App.4th at p. 645.) We address several of their allegations directly to explain why.
The Yeagers claim Mr. Thomas and the trial court pushed them into settlement negotiations. On May 6th, prior to the lunch recess, counsel for WCT indicated settlement negotiations may not be productive because "[i]t takes two to dance, and if one of the parties doesn't want to do it, I'm not sure it's productive." The court responded, "So there's no possible resolution?" Mrs. Yeager replied, "Well, I guess we're always willing to talk, your Honor. Why not?" The record fails to show the Yeagers were ordered or pushed into settlement negotiations.
The Yeagers also claim Mr. Thomas threatened to withdraw from representing General Yeager if the Yeagers did not settle. The record shows Mr. Thomas moved to withdraw from representation for various reasons unrelated to the settlement negotiations, and further, his motion was denied subject to reconsideration during the evidentiary phase of the trial. Even assuming Mr. Thomas threatened to withdraw if the Yeagers did not settle, that does not render the settlement voidable. (Chan v. Lund (2010) 188 Cal.App.4th 1159, 1174, citing Bistany v. PNC Bank, NA (D.Mass. 2008) 585 F.Supp.2d 179 ["'duress must emanate from the opposing party to an agreement, not one's own attorney'"].)
The record fails to indicate the Yeagers had no other reasonable alternative but to consent to the settlement agreement. We therefore reject their claim of duress.
X. Agreement Interpreted Against the Drafting Party
In their final challenge to the settlement agreement, the Yeagers contend the terms of the handwritten term sheet should be construed against WCT. That does not assist them in showing the settlement agreement is invalid and unenforceable. XI. The Federal Court's Decision in AT&T Mobility
On November 17, 2015, WCT filed a motion seeking a stay of the briefing schedule in light of a November 2015 decision by the United States District Court, Eastern District of California, in AT&T Mobility LLC v. Yeager, No. 2:13-cv-0007-KJM-DAD. In AT&T Mobility, the federal district court ordered the appointment of a guardian ad litem to protect General Yeager's interests in the case, following the court's finding that General Yeager was not mentally competent to represent himself.
We take judicial notice of the federal district court's decision.
Here, the record shows the parties never raised an issue with respect to General Yeager's mental competence. Nor is there any evidence to suggest General Yeager is incapable of representing his interests on appeal. The federal district court's finding in AT&T Mobility is therefore limited to that case.
DISPOSITION
Having ordered the trial and appellate records unsealed on September 8, 2017, the judgment is affirmed in all other respects. The parties shall bear their own costs on appeal.
/s/_________
PEÑA, J. WE CONCUR: /s/_________
HILL, P.J. /s/_________
DETJEN, J.