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Chan v. Lund

September 29, 2010


(Santa Clara County Super.Ct.No. CV072392), Hon. Neal A. Cabrinha.

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


This five-year-old dispute arises out of the cutting of a number of Leyland cypress trees on Bill Chan's Los Altos property adjacent to a fence separating his property and the property of Craig and Kathleen Lund (the Lunds). The Lunds hired an unlicensed tree contractor, Norma Gonzalez, dba Norma Tree Service (Norma Tree), to trim the trees, which had branches that extended onto the Lunds' property. Chan brought suit against the Lunds and (later) Norma Tree. The lawsuit was purportedly settled on the eve of trial in August 2008 in proceedings before a mediator, and the terms of the purported settlement were reduced to writing. Shortly thereafter, Chan discharged his attorney, hired new counsel, and claimed that his consent to the purported settlement was obtained through economic duress, undue influence, and fraud employed by his former attorney. The court granted the Lunds' and Norma Tree's motions to enforce settlement under Code of Civil Procedure 664.6, and Chan appealed from the judgment entered thereon.

Chan makes a number of arguments on appeal. He argues, among other things, that because his former attorney extorted Chan's consent to the settlement, the purported agreement is void, and therefore enforcement of the settlement contravenes public policy. He contends further that he is entitled to rescind any agreement of settlement under theories of economic duress, undue influence, and fraud. Chan also asserts that Evidence Code provisions concerning the confidentiality of communications during mediation and precluding testimony by the mediator in subsequent proceedings are unconstitutional under the Due Process Clause of the United States and California Constitutions as applied in this instance, because such mediation confidentiality deprived him of the ability to present evidence (i.e., the mediator's testimony) to establish that Chan's consent to the settlement was coerced.

We conclude that the court did not err in enforcing the settlement and will affirm the judgment.


Chan filed a complaint against the Lunds on October 5, 2006. He alleged claims for trespass and negligence, averring that his damages were at least $78,000. Chan also asserted that defendants' actions constituted wrongful injuries to trees in violation of Code of Civil Procedure section 733 and Civil Code section 3346, subdivision (a), entitling him to treble damages. He later amended his complaint to identify Norma Tree as a defendant previously referred to as Doe 1, claiming that Norma Tree was the contractor hired by the Lunds to cut and trim the row of 14 Leyland cypress trees on Chan's property.*fn1

Trial was set for August 4, 2008.*fn2 The court vacated the scheduled mandatory settlement conference and permitted the parties to continue settlement negotiations with a mediator, Kevin Kelly. The record reflects that the court thereafter scheduled the case for a dismissal hearing based upon its having received notice of a settlement. On September 22, Chan filed a substitution of attorney, substituting Bruce Tichinin in place of his former attorney. In October, the Lunds and Norma Tree filed separate motions to enforce settlement pursuant to Code of Civil Procedure section 664.6. It was asserted in both motions that on August 4, the parties attended a mediation before Kelly and that on that date, a settlement was achieved (the Settlement) that resulted in the creation of a writing memorializing the settlement (the Settlement Memorandum).*fn3 The Settlement Memorandum (captioned "Confirmation of Settlement as a Result of Mediation") recited that the parties "have reached a full and final settlement of all of the claims of said plaintiff in said case," and that Chan would be paid a total of $36,100 by two insurance carriers in full settlement of known and unknown claims that he had in the case.*fn4

Chan opposed the motions. As discussed in greater detail below, he contended that the Settlement was voidable because his purported consent was "wrongfully coerced" through tactics of his former attorney that "amounted legally to duress, undue influence, fraud, prohibited financial dealing with a client in violation of the [California] Rules of Professional Conduct, and undisclosed dual agency."*fn5 (Hereafter, all rules are the California Rules of Professional Conduct unless otherwise specified.) The attorney's alleged coercion was essentially twofold. First, he allegedly threatened on the eve of trial to withdraw from the case if Chan refused to participate in a further session with Kelly or if Chan refused to make concessions to settle the matter. Chan alleged that his attorney failed to advise him at the time he made these threats that he would be required to obtain court approval to withdraw from the case and that there were ethical rules prohibiting such withdrawal where reasonable steps are not taken to avoid prejudicing the client's rights. Second, during mediation, the attorney allegedly induced Chan to accept the Settlement by agreeing to discount his fees by $10,000 in exchange for Chan's agreement.

After a hearing, the court announced orally on November 13 that it would grant the motions to enforce settlement as to the terms of the monetary settlement recited in the writing.*fn6 The court observed further that although the writing recited a stipulation for injunctive relief that the parties contemplated finalizing in the future, there was no complete agreement concerning such stipulation that could be enforced.

On or about November 25, Chan, through his new attorney, Tichinin, filed an ex parte application (first ex parte application) for an order that the court on its own motion reconsider its decision (see Le Francois v. Goel (2005) 35 Cal.4th 1094). He asserted that there was additional evidence--namely, correspondence to Chan from his prior counsel--that corroborated Chan's claim that the attorney had offered to reduce his fees by $10,000. On or about December 11, Tichinin supplemented the first ex parte application with a lengthy letter brief, arguing that the court should reconsider its decision for the additional reason that he "believed" that if the mediator, Kelly, were allowed to testify, he would further corroborate Chan's declaration that his attorney at the mediation threatened to abandon Chan if Chan refused to make concessions to settle the case. On December 22, the court denied Chan's first ex parte application.

On March 11, 2009, Tichinin filed a second ex parte application for an order that the court on its own motion reconsider its decision (second ex parte application). In it, Tichinin expressed a concern that he had not previously communicated to the court adequately that an additional basis for reconsideration (beyond the corroboration that Chan's former attorney had agreed to discount his fee) was that Tichinin "was making an offer of proof that Mr. Kelly's constitutionally-admissible testimony would corroborate Mr. Chan's testimony that [his attorney] threatened to abandon him at trial the next day in the manner described in Mr. Chan's declaration." (Original underscoring.) On March 11, 2009, the court denied the second ex parte application, and filed a formal order granting the motions to enforce settlement and entering judgment on that order. Chan filed a timely notice of appeal.


I. Motions to Enforce Settlement Under Code of Civil Procedure Section 664.6

Code of Civil Procedure section 664.6 provides as follows: "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."

The Second District Court of Appeal, Division Two, has succinctly described the nature of motions brought pursuant to Code of Civil Procedure section 664.6: "Section 664.6 was enacted to provide a summary procedure for specifically enforcing a settlement contract without the need for a new lawsuit. [Citations.]... Although a judge hearing a section 664.6 motion may receive evidence, determine disputed facts, and enter the terms of a settlement agreement as a judgment [citations], nothing in section 664.6 authorizes a judge to create the material terms of a settlement, as opposed to deciding what terms the parties themselves have previously agreed upon." (Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 809-810; see also Terry v. Conlan (2005) 131 Cal.App.4th 1445 [court erred in granting section 664.6 motion where record demonstrated no meeting of minds concerning material terms of settlement].)

The trial court's factual findings on a motion to enforce a settlement under Code of Civil Procedure section 664.6 "are subject to limited appellate review and will not be disturbed if supported by substantial evidence." (Williams v. Saunders (1997) 55 Cal.App.4th 1158, 1162.) In instances involving questions of law, including the construction and application of the statute, the trial court's decision is not entitled to deference and will be subject to independent review. (Ibid.) For example, where the principal claim of error "raises a question of law concerning the construction and application of [Code of Civil Procedure] section 664.6[,]... it requires independent appellate review. [Citations.]" (Gauss v. GAF Corp. (2002) 103 Cal.App.4th 1110, 1116, fn. omitted (Gauss).)

II. Challenge to Order Enforcing ...

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