Many mediations end in settlement at which point the parties draft a settlement agreement. California law provides a summary procedure by which the parties can enforce the settlement agreement if the spirit of compromise does not continue after the mediation. Code of Civil Procedure Section 664.6 provides:
If parties to pending litigation stipulate, in a writing signed by the parties outside the presence of the court or orally before the court, for settlement of the case, or part thereof, the court, upon motion, may enter judgment pursuant to the terms of the settlement. If requested by the parties, the court may retain jurisdiction over the parties to enforce the settlement until performance in full of the terms of the settlement.
When I am able to help the parties settle a case, and they do not happen to have a settlement agreement with them (due to their lack of optimism in resolving the matter?), I provide a simple template which contains the statement to the effect that:
Pursuant to CCP §664.6, the parties hereby agree, acknowledge, stipulate and request that the Court retain jurisdiction over the parties to enforce the settlement until performance in full of the terms of this settlement. So that the Court retains said jurisdiction, Plaintiff agrees to and shall make this request to the Court prior to filing the request for dismissal of the action.
A recent appellate opinion in Shaunak v Sayta, issued by the First Appellate District Court of Appeal in California (Case No. A148823) (“Shaunak”) holds that the parties must actually ask the court to retain such jurisdiction; simply putting it in the settlement agreement is not sufficient.
Shaunak involved a landlord tenant dispute in which the landlord sought to terminate Sayta’s tenancy. The parties settled putting the agreement in writing. Paragraph 11 of the Agreement stated in relevant part:
“All parties shall dismiss their entire claims and causes of action . . . subject to the parties’ express agreement and request that the Court retain jurisdiction pursuant to [section] 664.6 to enforce the remaining terms of this settlement agreement and judgment in the event any party fails to comply with all the obligations set forth herein. In the event the matter is dismissed, and pursuant to the express statement set forth in Wackeen v. Malis (2002) 97 [Cal.App.4th] 429, the Court may nevertheless retain jurisdiction to enforce the terms of the settlement, until such time as all of its terms have been performed by the parties, as the parties requested this specific retention of jurisdiction. The parties agree that the Court may set aside dismissal if necessary, upon application by any party, for the purpose of enforcing the terms of this [Agreement] and entering judgment pursuant to its terms.” (Id. at 4.)
The parties then dismissed the complaint and cross-complaint. Thereafter, Sayta moved to enforce the settlement using the procedure outlined in CCCP 664.6 above. The trial court denied the motion on the merits and so Sayta appealed.
The appellate court never reached the merits, concluding that the trial lacked jurisdiction to hear the motion to enforce the settlement. The court noted that while Paragraph 11 of the parties’ settlement agreement explicitly provided that the parties would ask the court to retain jurisdiction prior to dismissing the lawsuit, there was nothing in the record to indicate that either party actually made the request. (Id. at 4.) As “…section 664.6 is limited to settlements reached in pending litigation…” (Id. at 5, emphasis original), the court lacked subject matter jurisdiction once the action was dismissed and no such request was actually made to the court to retain jurisdiction pending the conclusion of the settlement:
We construe the second sentence of section 664.6 to mean, and we so hold, that even though a settlement may call for a case to be dismissed, or the plaintiff may dismiss the suit of its own accord, the court may nevertheless retain jurisdiction to enforce the terms of the settlement, until such time as all of its terms have been performed by the parties, if the parties have requested this specific retention of jurisdiction.” (Id. at 6.)
In short, the request must be made while the case is still pending, by the parties based on either a writing signed by all of the parties or placed orally on the record by the parties in open court. Simply putting it in a settlement agreement without actually requesting the court to retain jurisdiction will not confer subject matter jurisdiction on the court! (Id. at 6-7.)
The morale is obvious: ask and it will be given to you (Matthew 7:7): don’t ask and you will be unable to enforce your settlement!
…. Just something to think about.
By Phyllis G. Pollack