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Court of Appeal:
Attorney’s Oral Stipulation to Settle Case is Enforceable
Opinion Says Legislative Intent Behind Amendments to Code of Civil Procedure Allowing Lawyer to Sign Settlement Papers Indicates Desire to Also Permit Counsel to Orally Resolve Claims
By Kimber Cooley, Associate Editor
Div. Two of the First District Court of Appeal has held that an oral stipulation in court to the settlement of the case by an attorney on behalf of his client is enforceable—despite the relevant section of the Code of Civil Procedure only expressly allowing lawyers to sign written settlement papers—as the legislative intent behind the section evinces a desire to permit such a resolution.
The dispute arose in a case where plaintiff Miriam Greisman personally orally stipulated to the settlement in court resolving her lemon law claims against CarMax Auto Superstores California, LLC and the manufacturer of the 2014 Chrysler Town & Country she purchased in 2015, FCA US, LLC.
The attorney representing both CarMax and FCA orally stipulated to the settlement, but the corporate representatives of the defendants did not make any statements.
Then-Solano Superior Court Judge E. Bradley Nelson (now retired) found that the settlement was enforceable and judgment was entered on Jan. 20, 2023. Justice James Richman wrote the opinion, filed Monday and certified for partial publication, affirming the judgment. Presiding Justice Therese M. Stewart and Justice Tara M. Desautels joined in the opinion.
Amendments to Code
In the published portion of the opinion, Richman noted that Code of Civil Procedure §664.6 allows parties to pending litigation to stipulate to the settlement of a case. Prior to a January 2021 amendment, the section provided: “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.”
The 2021 amendment turns the original language into subdivision (a) and adds subsection (b) which states:
“For purposes of this section, a writing is signed by a party if it is signed by any of the following:
“(1) The party.
“(2) An attorney who represents the party.
“(3) If the party is an insurer, an agent who is authorized in writing by the insurer to sign on the insurer’s behalf.”
The parties do not dispute that the amended section applies to their settlement, but Greisman argues that the amendment does not extend the broader definition of “party” to oral stipulations before the court.
Legislative Intent
The jurist looked to legislative intent to reject Greisman’s assertion. He acknowledged that case law interpreting the former version of §664.6 held that the parties themselves must sign any written settlement or orally stipulate before the court to comply with the section.
However, he explained that the analysis of the amendment by the Senate provided:
“This bill eliminates the requirement that parties themselves must personally sign or orally stipulate to these settlements and instead allows counsel for the parties to so stipulate on their behalf and further authorizes agents of insurers to stipulate on the insurer’s behalf.”
Richman opined:
“These legislative committee analyses confirm that the Legislature intended to eliminate the requirement…that parties must personally sign or orally stipulate to settle a case….Here, to promote rather than defeat the legislative purpose…to streamline the settlement process, we hold that, as applied to oral settlements stipulated before the court, current section 664.6 does not require that the parties themselves orally stipulate, and instead allows counsel for the parties to orally stipulate on their behalf.”
He declared that “[a]pplying that interpretation to the facts here, there is no dispute that the attorneys for both parties, in addition to Greisman herself, orally stipulated to settle the case.”
Greisman’s challenge to the settlement arose after a dispute erupted over whether the settlement was inclusive or exclusive of attorney fees. The transcript of the announcement of terms by Solano Superior Court Judge Christine A. Carringer initially indicated that the settlement is “exclusive” of all costs and fees but an errata sheet submitted by the court reporter later corrected the document to reflect that the judge actually said “inclusive.”
Carringer recused herself after Greisman filed an opposition to the settlement, alleging that the parties did not agree to a settlement inclusive of attorney fees. Nelson was appointed and found that the settlement was valid as amended to reflect the “inclusive” language after a hearing on the matter.
Nelson noted that Greisman and her attorney, Rebecca Neubauer of Strategic Legal Practices, APC, offered inconsistent testimony about the settlement terms. Greisman testified that the judge had used the word “exclusive,” which was confirmed in a declaration by Neubauer; however, other Strategic Legal attorneys testified that Neubauer had said that she could not recall which term the judge used.
In an unpublished portion of the opinion, Richman said:
“Here, Judge Nelson’s determination that the parties entered into a binding settlement agreement is supported by substantial evidence. Read together, the minute order…, the transcript…, and the errata thereto plainly establish that the parties agreed to settle this case for $100,000, inclusive of attorney fees and costs…. In response to Judge Carringer’s inquiry, Greisman, her attorney, and defendants’ attorney expressly stated they understood and agreed to those terms. Additionally, Greisman confirmed her understanding ‘that this is the end of the road as far as you are concerned; the vehicle is going to be repurchased, bought back by FCA, and whatever terms you have reached with your own attorneys and the law firm are between you and your attorney.’ ”
The case is Greisman v. FCA US, LLC, 2024 S.O.S. 2688.
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