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Walton v. Mueller

December 15, 2009


Trial Court: Santa Clara County Superior Court No. CV033020 Trial Judge: Hon. Mary Jo Levinger.

The opinion of the court was delivered by: Duffy, J.


A $40,000 default judgment was entered against defendant Scott Mueller in this action in June of 2006. That judgment became final. Some two years later, Mueller began negotiations with Timothy Walton, the judgment creditor, to satisfy the judgment. Although Mueller contends that they reached an agreement to fully satisfy the judgment by Mueller paying Walton $15,000, Walton disputes that such a contract was ever formed. Without actually having paid anything, Mueller filed a motion to enforce the alleged settlement, purportedly under Code of Civil Procedure section 664.6,*fn1 which, under certain conditions, provides for entry of judgment in conformance with a settlement in pending litigation. The trial court denied the motion, finding that no settlement agreement was ever reached. Regardless of whether an agreement was reached, we conclude that section 664.6 does not apply after a judgment has become final in an ordinary civil action because at that point, litigation is no longer pending as expressly contemplated by the statute. We accordingly affirm.


Walton, a lawyer representing himself, initiated this action by filing his complaint for damages and injunctive relief against defendants other than Mueller on December 28, 2004. It alleged violations of the Consumers Legal Remedies Act (Civ. Code, § 1750 et seq.) for a first cause of action and a second claim based on "California Restrictions On Unsolicited Commercial E-mail Advertisers" under Business and Professions Code section 17529.5. The factual basis of the claims was that the defendants had allegedly sent Walton numerous unsolicited commercial e-mails containing deceptive and false information and advertisements. The complaint was amended twice, among other things adding Mueller, a Florida resident allegedly doing business as "Acceleratebiz Incorporated," as an individual defendant. Mueller was alleged in the operative third amended complaint to have sent Walton 40 unsolicited e-mails, for each of which Walton sought, among other things, $1,000 in statutory liquidated damages under Business and Professions Code section 17529.5, subdivision (b)(1)(B)(ii).

Default was entered against Mueller on January 26, 2006. A default judgment against him was entered by the court on August 25, 2006, for $40,000, supported by Walton's declaration as to having received the 40 unsolicited commercial e-mails from Mueller.*fn2

Two years later, in August 2008, Mueller's counsel orally proposed to Walton that he accept $15,000 from Mueller, payable in three installments over 12 months, in full satisfaction of the judgment. This offer was confirmed by Mueller's counsel by e-mail to Walton on August 28, 2008. Walton countered that offer on September 3, 2008, by orally proposing that Mueller pay him $20,000 in installments over 18 months. Mueller, through counsel, then orally countered the next day with an offer to pay Walton $15,000 in installments over nine months. On October 13, 2008, this offer was communicated to Walton by letter, after Walton requested that the discussions be reduced to writing.

At that point, Walton was simultaneously in the process of executing on the judgment by levy against one of Mueller's bank accounts, though Walton did not apprise Mueller's counsel of this. But after the bank account was levied, Mueller told his lawyer, who wrote to Walton on October 16, 2008, demanding that execution efforts cease while they "finalize settlement documentation." The letter did not mention the terms of any specific settlement. Walton responded by letter dated October 17, 2008 to Mueller's counsel, stating that he would not cease executing on the judgment, as was his right. The letter also impliedly rejected Mueller's last settlement offer of $15,000 payable over nine months*fn3 and said, "Am I to understand that you now seek settlement on no conditions other than payment of money? If so, and you have no other proposed settlement terms that you wish to include, please send a check in the amount proposed [$15,000], and we will cease any further proceedings in regard to execution of the judgment."

On October 22, 2008, Mueller's counsel responded by letter to Walton. Among other things, he asserted that a binding contract had been reached in settlement of the judgment on the terms relayed in Mueller's last offer-$15,000 payable over nine months. But, he continued, "[n]otwithstanding that agreement, the attorneys working on your behalf have apparently filed an execution lien against Mr. Mueller's bank account.[*fn4 ] In view of that action, Mr. Mueller offers to pay the sum of $15,000 to settle this litigation. Said money to be paid directly to you from the account that is presently subject to the execution lien. Obviously, your enforcement efforts preclude him from writing a check against that account at the present time. [¶] The offer stated in this letter is without prejudice and with a full reservation of rights to enforce the earlier binding settlement agreement between you and Mr. Mueller . . . ."

On October 30, 2008, Walton again wrote to Mueller's counsel. He denied that a settlement had been reached and stated his position that negotiations had not resulted in the formation of any contract. He further requested Mueller's counsel to reduce any proposed settlement to a complete written draft of an agreement containing all terms and conditions so that he could fully understand and evaluate it.

On October 31, 2008, on Mueller's application, the court issued an order to show cause why enforcement of the judgment should not be stayed on account of the alleged settlement agreement composed of payment by Mueller to Walton of $15,000 over nine months. But on November 13, 2008, the court denied Mueller's motion to stay enforcement, specifically finding "that the parties did not reach any settlement agreement."

On November 24, 2008, Mueller himself wrote to Walton, stating, "In response to your letter of October 17, 2008 . . . , I accept your offer to settle this lawsuit in exchange for a lump sum $15,000 payment. I hereby tender the settlement payment of $15,000." Enclosed with the letter was a copy of a cashier's check payable to Walton, but no actual check.

In response, Walton wrote to Mueller's counsel on December 3, 2008. He stated his position that his October 17th offer to accept a check for $15,000 in full satisfaction of the judgment had been rejected by Mueller's counsel's letter of October 22nd, which had offered to fully satisfy the judgment by payment of $15,000 directly from Mueller's bank account that was subject to the execution levy rather than by separate check. This would necessarily have required Walton to release the levy before receiving payment. Walton then offered to "agree to a confidential settlement for $60,000. Once I have the check for $60,000, I will cease enforcement actions."

On January 22, 2009, Mueller filed a motion to enforce what he contended was a binding settlement, as evidenced by Walton's offer of October 17th to accept a check for $15,000 in full satisfaction of the judgment and Mueller's letter of November 24th enclosing the copy of a cashier's check. The motion was brought under section 664.6, on the ground that the parties had agreed to the terms of a settlement in writing. Walton opposed the motion, reiterating his contention that no contract had been formed. The court ...

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