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In a case involving an issue of first impression concerning the scope of Code of Civil Procedure section 664.6, Horvitz & Levy convinced the Court of Appeal to affirm an order enforcing an in-court settlement of a lemon law action for a sum inclusive of attorney fees after plaintiff attempted to unwind the agreement to procure a higher fee recovery.
Plaintiff Miriam Greisman filed a lemon law action against FCA based on engine trouble in her used Chrysler minivan. Greisman rejected FCA’s offer to have judgment entered against it in the amount of the Song-Beverly Act’s repurchase remedy plus double damages, choosing instead to bring two unsuccessful motions for summary adjudication. Later, at a mandatory settlement conference, the parties’ attorneys and Greisman agreed on the record to settle the case for $100,000. A dispute then arose as to whether the settlement amount was inclusive or exclusive of attorney fees. FCA moved to enforce the settlement under Code of Civil Procedure section 664.6.
Following a hearing, the trial court granted FCA’s motion. The court rejected plaintiff’s legal argument that the oral settlement was unenforceable because only the defendants’ attorney, and not the defendants themselves, agreed to the settlement terms on the record. It also arrived at the factual conclusion that the parties agreed to a settlement inclusive, not exclusive, of attorney fees. After plaintiff appealed, FCA retained Horvitz & Levy to defend the judgment.
The Court of Appeal affirmed in a partially published decision. Resolving an issue of first impression, the Court of Appeal accepted Horvitz & Levy’s argument that following a 2021 amendment, section 664.6 provides for enforcement of settlements agreed to by attorneys orally in court on behalf of the parties. The court relied on legislative history identified by Horvitz & Levy showing that the Legislature understood the amendment to apply to oral in-court settlements, and that such an interpretation advanced the overriding legislative purpose of expediting settlement procedures. The court also reasoned that substantial evidence supported the trial court’s finding that the settlement amount was inclusive of fees, costs, and expenses, and rejected plaintiff’s various arguments for unwinding the oral agreement under doctrines related to mistake and mutual assent.
