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Garcia v. Juarez

United States District Court, E.D. California

July 6, 2017

ROBERTO GARCIA JR., Plaintiff
v.
MATTHEW JUAREZ JR., Defendant

          ORDER RE: MOTION TO ENFORCE SETTLEMENT AND MOTION TO STRIKE (Docs. 159 and 167)

         I. Background

         Plaintiff Roberto Garcia, Jr. is a former inmate held at Kern Valley State Prison. Defendant Matthew Juarez, Jr. is a sergeant at that facility. Plaintiff alleges that on May 23, 2011, Defendant handcuffed and kicked him while verbally threatening him, resulting in injuries to both of Plaintiff's shoulders. Plaintiff received treatment for his right shoulder at the time but not for his left shoulder. On May 8, 2012, Plaintiff filed suit under 42 U.S.C. § 1983 alleging that Defendant used excessive force against him. On January 26, 2017, Plaintiff filed a notice of tentative settlement. Doc. 141. Soon thereafter, the parties encountered difficulties in completing/executing their settlement and requested a settlement conference. Doc. 146. A telephonic settlement conference was held on March 15, 2017 but the parties were unable to resolve their problems. Doc. 150. Defendant then filed a motion to enforce the settlement agreement. Doc. 159. Plaintiff opposes the motion and made a motion to strike certain statements in Defendant's motion as scandalous. Docs. 167 and 168.

         II. Motion to Enforce Settlement Agreement

         “[C]ourts have inherent power summarily to enforce a settlement agreement with respect to an action pending before it.” Dacanay v. Mendoza, 573 F.2d 1075, 1078 (9th Cir. 1978).

         The parties have discussed settlement on multiple occasions. On August 15, 2016, they held a settlement conference before Magistrate Judge Sheila Oberto. Doc. 93. No settlement was reached. Before this hearing, Defendant revealed that Plaintiff owed more than $29, 000 in restitution. Doc. 168, 4:15-17. Plaintiff was released from custody on October 24, 2016. Doc. 117. Plaintiff's current pro bono appointed counsel, Brian McComas, entered the case on October 19, 2017. Doc. 113. Plaintiff inquired as to the possibility of additional settlement negotiations on December 29, 2016 and Defendant suggested that any settlement should be communicated initially in written form. Doc. 132, 18:27-19:2.

         Plaintiff sent Defendants a demand letter on January 17, 2017. Doc. 168-2. The parties communicated orally concerning the amount of settlement. Doc. 168, 5:16-17. Plaintiff sent a supplemental demand letter on January 23, 2017. Doc. 168-3. The parties agreed upon the terms of a settlement on January 24. Doc. 160, 2:5-6; Doc. 168, 5:19-20. Plaintiff e-mailed Defendant that night, stating “Please call me in the morning to followup on my voice message on behalf of plaintiff agreeing to the defendant's offer of $13, 000 for dismissal of all claims with prejudice.” Doc. 168-4. On January 26, Plaintiff filed a notice of tentative settlement on January 26, 2017. Doc. 141. On January 27, Plaintiff e-mailed Defendant seeking the release form, stating “I have the opportunity to see Mr. Garcia next weekend and would like to finalize everything then.” Doc. 168-5.

         On February 1, Defendant sent to Plaintiff a written settlement agreement and payee form (“Written Agreement”) to be signed by Plaintiff and Plaintiff's counsel. Doc. 160, 2:8-10. Of note, the Written Agreement included a provision which stated that the settlement amount would have to be used to pay for certain reimbursements, including restitution. Doc. 161-1, Section 5. On February 6, Plaintiff and Defendant had a telephone conversation; Defendant memorialized the conversation in an e-mail in which he wrote “the agreement is fine and approved except you found a typo on the front page where the dollar amount was printed out. We removed the reference to hundred to fix that and otherwise kept everything the same. Please confirm your receipt and approval. I will also convey to my contact at the CDCR that you believe that sums subject to reimbursement under the general order that you expended from court funds need to come to you so that you can pay them back.” Doc. 168-6. Plaintiff responded to that e-mail the same day and stated “I agree to the small revision in the agreement, the signed version of which went out today. My specific request is for the entire settlement to be dispersed to my IOLTA account so that I may then properly disperse the funds for attorney expenses, Pro Bono Panel expenses, and my client in accordance with tax requirements, auditing of my account, and my ethical duties.” Doc. 168-7. As referenced in the e-mail, Plaintiff returned to Defendant by mail the Written Agreement, signed and dated by both Plaintiff and Plaintiff's attorney on February 4, 2017; included in the mailing was a cover letter (“Feb. 6 Letter”) which stated “Dispersal of the settlement needs to be made to IOLTA ACCOUNT - LAW OFFICE OF B.C. McCOMAS so that I can repay expenses and the Pro Bono Panel via General Order 510. Please let me know if this method of payment will be an issue as execution of the agreement is contingent upon it.” Doc. 161-1 and 161-2.

         On February 7, Defendant e-mailed stating “Just reviewed your email and looked back at the settlement agreement....will pay whatever net sums your client may be entitled to the plaintiff directly. If there is some other payment proves than directly to your client, I believe it will not be honored unless spelled out in the agreement. Do you believe we need to revisit the agreement or go with what we have and you coordinate monies with your client?” Doc. 161-3. On February 8, 2017, Plaintiff e-mailed stating “The letter makes clear that the signing of the release is contingent upon payment to IOLTA ACCOUNT - LAW OFFICE OF B.C. McCOMAS....I would ask that you add the above term concerning my IOLTA account or we reach an agreement that any payment will be made to that account.” Doc. 161-4. The same day Defendant responded by e-mail that “I believe I will need to modify the paragraph that says payment to Plaintiff to identify your trust account [] instead and you[r] client will need to approve the change. I will verify and get back to you.” Doc. 168-8.

         On February 13, Defendant sent by e-mail a revised written settlement agreement (“Revised Agreement”) with a cover letter which stated “If the revisions meet you and your client's approval, please email me confirmation of the same and please arrange to send the document executed by yourself and your client along with the stipulation of dismissal with the original executed document set to me for processing along with the fully completed and executed Payee Data Record.” Doc. 161-5. The modifications in the Revised Agreement state that $6, 202.50 would be paid to the IOLTA account and that the balance of the settlement would be paid to the IOLTA account only after other reimbursements, including restitution, were paid. Doc. 161-5, Section 5. Later that day, Plaintiff responded by e-mail, stating “I do not believe that the additions are consistent with our conversations, or my prior emails setting out exactly what Plaintiff wants included in the settlement agreement. I have repeatedly asked for one thing: that the entire settlement award be dispersed to my IOLTA account without any prior reductions. The additional language only further obfuscates what should be a simple term of agreement....I await CDCR's response to my simple question: Is it willing to disperse the entire settlement of 13, 000 to my IOLTA account? If not, we may have a real problem.” Doc. 168-12. The same day, Defendant replied by e-mail that based on California Penal Code § 2085.5, “it appears that the CDCR would be appropriately deduct[ing] any applicable restitution amounts.” Doc. 161-7. The Revised Agreement was never signed by either party.

         On February 15, Plaintiff sent a letter which stated that “Based on our prior discussions, it is plaintiff's understanding that defendant is unwilling to settle unless the CDCR is granted the sole authority to disperse the settlement as it determined for restitution and legal expenses. As outlined above, this requirement violates CDCR's stated procedures and my ethical obligations as counsel, and results in an unenforceable agreement. Worse, the insistence on inclusion of this term has scuttled negotiations by impeding the parties to agree upon material terms. Hopefully, you share my concerns about the development of this stumbling block, which threatens to unravel all of our prior agreements, so late in negotiations.” Doc. 168-13. On February 27, Plaintiff sent a letter which stated “Plaintiff intends to move to stay the schedule in the matter and request a settlement conference before Judge Grosjean.” Doc. 168-14. On March 2, Plaintiff sent another letter that reiterated “plaintiff's position is that all of the funds should be awarded to his attorney without prior reduction by the CDCR.” Doc. 161-8.

         A second settlement conference was held on April 24, 2017, before Magistrate Judge Oberto. Doc. 153. The parties were not able to resolve their dispute. On April 26, Defendant sent a letter which stated “I am now taking this opportunity to again assert our position that the case is settled pursuant to the attached [Written Agreement]”; Defendant's counsel had signed but not dated the attached Written Agreement. Doc. 161-9. On May 3, Plaintiff responded by mail that “the defense never asserted this position during settlement negotiations between February 6 and April 25, 2017, during which time it continued to modify the tentative settlement. Plaintiff was first informed of a potential change in defendant's position by Judge Oberto at the settlement conference on April 24, 2017. Your letter is the first memorialization of this shift in position by the defense.” Doc. 168-19.

         In the present motion to enforce settlement agreement, Defendant asserts that “Plaintiff and Defendant entered into a written Settlement Agreement...settling all claims in the instant suit and the Agreement was signed by the Plaintiff and Plaintiff's counsel....Thereafter, Plaintiff's counsel attempted to alter immaterial terms of the Agreement.” Doc. 160, 1:18-21. Defendant also stated that “there can be no dispute that the parties reached a settlement agreement and its terms are clear and unambiguous because they were reduced to a writing jointly negotiated by the parties and signed by Plaintiff and his counsel.” Doc. 160, 7:1-3. Thus, Defendant appears to be asserting that the agreement became enforceable when Plaintiff sent the signed Written Agreement to Defendant on February 6, 2017; that the Written Agreement came into effect on that date notwithstanding the concurrent e-mail seeking to alter the means of payment or any later dickering over terms.

         Defendant does not appear to be asserting that the parties reached an oral agreement at any time that is enforceable apart from the Written Agreement. “An offer is the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it. The determination of whether a particular communication constitutes an operative offer, rather than an inoperative step in the preliminary negotiation of a contract, depends upon all the surrounding circumstances. The objective manifestation of the party's assent ordinarily controls, and the pertinent inquiry is whether the individual to whom the communication was made had reason to believe that it was intended as an offer.” Lopez v. Charles Schwab & Co., 118 Cal.App.4th 1224, 1230 (Cal.App. 1st Dist. 2004), citations omitted. “If there ‘is a manifest intention that the formal agreement is not to be complete until reduced to a formal writing to be executed, there is no binding contract until this is done.' An agreement to make an agreement, without more, is not a binding contract.” Rennick v. O.P.T.I.O.N. Care, 77 F.3d 309, 315 (9th Cir. 1996), quoting Smissaert v. Chiodo, 163 Cal.App. 2d 827, 330 P.2d 98, 100 (Cal.App. 1st Dist. 1958). Given the evidence presented, there is no basis for finding that the agreement reached on January 24, 2017 was intended to be an enforceable contract.

         In evaluating the Written Agreement, “the construction and enforcement of settlement agreements are governed by principles of local law.” Jones v. McDaniel, 717 F.3d 1062, 1067 (9th Cir. 2013), citations omitted. In determining whether a settlement agreement was enforceable, the Central District summarized the applicable California contract law as “there is no contract until there has been a meeting of the minds on all material points. The failure to reach a meeting of the minds on all material points prevents the formation of a contract even if the parties have orally agreed upon some of the terms, or have taken some action related to the contract. Similarly, the terms proposed in an offer must be met exactly, precisely, and unequivocally for its acceptance to result in the formation of a binding contract. A qualified acceptance constitutes a rejection terminating the original offer and the making of a counteroffer to the original offeror, which must also be unequivocally accepted by the former offeror for a binding contract to form.” Siegel v. Warner Bros. Entm't Inc., 542 F.Supp.2d 1098, ...


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