United States District Court, E.D. California
FINDINGS AND RECOMMENDATION RECOMMENDING DENIAL OF
PLAINTIFF'S MOTION TO RESCIND THE SETTLEMENT AGREEMENT
Michael Carter is appearing pro se and in forma pauperis in
this civil rights action pursuant to 42 U.S.C. § 1983.
before the Court is Plaintiff's motion to rescind the
settlement agreement, filed June 19, 2017.
filed the instant on August 15, 2016, and on January 10,
2017, the Court found that Plaintiff stated a cognizable
claim against Defendants J. Uhlik, M. Jennings, M.V. Sexton
and M. Voong for violation of Plaintiff's right to free
exercise of religion under the First Amendment.
March 30, 2017, Defendants filed an answer to the complaint.
On March 31, 2017, the Court issued the discovery and
2, 2017, the Court scheduled a settlement conference on June
9, 2017, at Corcoran State Prison before United States
Magistrate Judge Michael J. Seng. The parties reached a
settlement agreement at the conference.
15, 2017, the parties filed a stipulation of dismissal, with
prejudice, and the case was closed on this same date.
previously stated, on June 19, 2017, Plaintiff filed a motion
to rescind the settlement agreement.
is well settled that a district court has the equitable power
to enforce summarily an agreement to settle a case pending
before it.” Callie v. Near, 829 F.2d 888, 890
(9th Cir. 1987); accord Doi v. Halekulani Corp., 276
F.3d 1131, 1141 (9th Cir. 2002). This power only extends to
the enforcement of complete settlement agreements.
Callie, 829 F.2d at 890. Under federal law, there
are two requirements for an oral agreement to be enforceable.
First, the agreement must be complete. Maynard v. City of
San Jose, 37 F.3d 1396, 1401 (9th Cir. 1994), as amended
(Nov. 22, 1994). Second, the parties must have agreed to be
bound by the terms of the settlement, or have authorized
their attorneys to settle the suit. Harrop v. W.
Airlines, Inc., 550 F.2d 1143, 1144 (9th Cir. 1977).
addition, “[t]he construction and enforcement of
settlement agreements are governed by principles of local law
which apply to interpretation of contracts generally.”
O'Neil v. Bunge Corp., 365 F.3d 820, 822 (9th
Cir. 2004) (citations omitted). Therefore, California law
regarding the formation and interpretation of contracts is
applied to determine whether a legally enforceable settlement
agreement was reached. United Commercial Ins. Serv., Inc.
v. Paymaster Corp., 962 F.2d 853, 856 (9th Cir. 1992).
“Under California law, settlement agreements are
governed by general principles of contract law.”
Adams v. Johns-Manville Corp., 876 F.2d 702, 704
(9th Cir. 1989).
essential elements of a contract under California law are:
“parties capable of contracting; the parties'
consent; a lawful object; and sufficient cause or
consideration.” Lopez v. Charles Schwab &
Co., 118 Cal.App.4th 1224, 1230 (2004). “An
essential element of any contract is the consent of the
parties, or mutual assent.” Lopez, 118
Cal.App.4th at 1230 (quoting Cal. Civ.Code, §§
1550(2), 1565(2)). Mutual assent is usually manifested by an
offer that is communicated to the offeree and an acceptance
that is communicated to the offeror.” Lopez,
118 Cal.App.4th at 1230.
if a party enters into a settlement agreement knowingly and
voluntarily, the agreement is treated as a binding contract
and the party is precluded from raising the underlying
claims.” Arnold v. United States, 816 F.2d
1306, 1309 (9th Cir. 1987) (citation omitted); Folsom v.
Butte Cty. Assn. of Governments, 32 Cal.3d 668, 677
(1982) (“Compromise has long been favored…[A]
valid compromise agreement has many attributes of a judgment,
and in the absence of a showing of fraud or undue influence
is decisive of the rights of the parties thereto and operates
as a bar to the reopening of the original controversy.”
(quotations omitted)). “However, if one part breaches a
settlement, the other has the option of enforcing the terms
of the settlement or rescinding the settlement and suing on
the original claims.” Arnold, 816 F.2d at 1309
(citation omitted) (noting “for example, that the
government could reinstate its case against a defendant if
the defendant breached a settlement agreement.”
Civil Code section 1689 provides in pertinent part that a
contract may be rescinded where (1) consent was “given
by mistake, or obtained through duress, menace, fraud, or
undue influence, exercised by or with the connivance of the
party as to whom he rescinds….”; (2)
consideration fails through the fault of the party as to whom
he rescinds; (3) consideration “becomes entirely void
from any cause”; (4) consideration, before it is
rendered to the rescinding party, “fails in a material
respect from any cause”; (5) “the contract is
unlawful for causes which do not appear in its terms or