From Settlement to Judgment

• Publication year: 2024
• Citation: Vol. 46 No. 1
• Author: Written by Jack J. McMorrow, Esq

FROM SETTLEMENT TO JUDGMENT

ENFORCEABILITY AND PROCEDURE REGARDING SETTLEMENT AGREEMENTS UNDER CODE OF CIVIL PROCEDURE 664.6

Written by Jack J. McMorrow, Esq^*

It is common for parties in a family law action to secure a settlement agreement prior to preparing a Stipulated Judgment, or otherwise obtaining a judgment pursuant to Code of Civil Procedure section 664.6. There are a number of reasons for this, including that a Stipulated Judgment is usually lengthy and requires significant drafting into areas of potential dispute beyond the key deal points to which the parties agree and would like to "lock in." Drafting a settlement agreement can also solve the problem of time constraints. Settlement conferences are limited as to time, eventually the court closes, the mediation office closes, the mediator needs to leave, etc. So, the focus is often on finalizing a settlement agreement concerning the key deal points, knowing that such an agreement, if drafted correctly, can be enforced and converted into a judgment pursuant to Code of Civil Procedure section 664.6, even when a party has a change of heart post-settlement.

This article discusses the law regarding formation and enforcement of settlement agreements in family law matters pursuant to Code of Civil Procedure section 664.6 (hereafter "Section 664.6"). It is more involved than one might expect. A solid understanding of the process and its hazards will allow you to navigate the process wisely and minimize the possibility of costly and exhausting post-settlement litigation in drafting the settlement agreement.

A. HOW DOES SECTION 664.6 FUNCTION TO ENFORCE A SETTLEMENT AGREEMENT?

"Section 664.6 provides that where parties to pending litigation stipulate to settle the case orally in court, or in a writing outside of court, judgment may be entered pursuant to the terms of the settlement upon motion of one of the parties."¹ This statutory mechanism is an extension of public policy in favor of facilitating and supporting settlement in litigation.²

Public policy places particular emphasis on supporting and confirming settlement agreements regarding the division of marital property. As stated in Adams v. Adams:

Property settlement agreements occupy a favored position in the law of this state and are sanctioned by the Civil Code. Such agreements are usually made with the advice of counsel after careful negotiations, and the courts, in accord with legislative sanction, prefer agreement rather than litigation. When the parties have finally agreed upon the division of their property, the courts are loath to disturb their agreement except for equitable considerations.³

Public policy also "places a high priority on enforcement of child support awards. The Legislature and the Judicial Council have expressed that policy by creating simplified methods for enforcing and modifying support awards...."⁴

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Accordingly, when utilized in a family law proceeding, Section 664.6 "promote[s] one of the primary goals of family law—the simple and expedient resolution of disputes that arise after the dissolution of marriage."⁵

In sum, Section 664.6 says that if you have an enforceable settlement agreement, you may file a Motion for Entry of Judgment and the court will enter a Judgment pursuant to its terms.

Practice pointer: Be sure to submit a proposed Judgment incorporating the terms of the Settlement Agreement with your Motion, serve a copy on opposing counsel, and bring copies to the hearing.

The focus of this article is the utility of and process under Section 664.6, but note that there are other enforcement mechanisms. If the agreement is not enforceable pursuant to Section 664.6, it may still be binding and enforceable under other authority and procedure. Keep that in mind—Section 664.6 is not your only hope.

B. HOW WILL THE MOTION FOR ENTRY OF JUDGMENT PURSUANT TO SECTION 664.6 BE ADJUDICATED?

Because this is a motion made pursuant to the Code of Civil Procedure, the matter will not be the subject of an evidentiary hearing pursuant to Family Code section 217, but the proceeding is similar. "Disputes regarding the terms of the settlement (or other disputed facts) may be adjudicated on a [Section 664.6] motion, on the basis of declarations or other evidence."⁶ The trial court, in its discretion, "may consider oral testimony or may determine the motion upon declarations alone."⁷ The Section 664.6 procedure "allows a minitrial on the enforceability of the settlement agreement. Witnesses can be subpoenaed, etc. This makes it more effective than a motion for summary judgment for determining whatever issues are raised."⁸

Thus, the scope of the proceedings is left to the trial court's discretion. Depending on your client's position and the nature of the dispute, you may urge the court to rule on declarations alone, or you may want to push for extended proceedings so that you can present live testimony and create an extensive record.

C. WHAT EXACTLY IS THE COURT ADDRESSING AT THIS "MINITRIAL"?

The court is charged with determining if there is an enforceable settlement agreement. "If the court determines that the parties entered into an enforceable settlement, it should grant the motion and enter a formal judgment pursuant to the terms of the settlement."⁹

The determination as to whether the agreement is enforceable does not necessarily make for a short trial, narrow in scope. The moving party seeking to enforce the agreement will need to establish all of the elements of an enforceable settlement agreement; it must be (a) signed by the parties, (b) demonstrate a present intent to be bound by its terms,¹⁰ and (c) the agreement must establish that the parties agreed to all material settlement terms.¹¹

There are many bases to challenge a settlement agreement in a dissolution proceeding, and so the challenges to a settlement agreement in a family law proceeding come in many shapes and colors. They include all those that exist in contract, plus heightened requirements for disclosures and specific requirements in connection with certain issues (i.e. findings relating to child support, and sufficiency of language relating to spousal support waivers). Below is a discussion of various common challenges to enforcement of settlement agreements. It is not an exhaustive list.

In addition to addressing these challenges to the settlement agreement, the court is also charged with resolving disputes concerning interpretation of the agreement, resolving ambiguities and, often times, establishing boilerplate language.¹²

D. WHAT IS REQUIRED TO ENFORCE AN ORAL AGREEMENT MADE "BEFORE THE COURT"?

As set forth in Conservatorship of McElroy, in adjudicating a party's motion for entry of judgment pursuant to Section 664.6 based upon an oral settlement agreement made before the court;

[A] trial court should consider whether (1) the material terms of the settlement were explicitly defined, (2) the supervising judicial officer questioned the parties regarding their understanding of those terms, and (3) the parties expressly acknowledged their understanding of and agreement to be bound by those terms.¹³

It is common practice for parties to reach an agreement at the courthouse. The court will then go on the record for the parties to recite the agreement and confirm their understanding. This process is a good option when you do not have time to draft a written agreement. If this process is utilized, it is important for the court to voir dire the parties and establish knowledge, understanding and voluntariness of the agreement on the record. Counsel should pay careful attention to this process and ensure that the court establishes a solid record for the enforceability

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of the agreement, as well as the full and complete terms of the agreement.

A new issue with these oral agreements is that we are not assured that a court reporter will be present to create a transcript of the proceedings. The fact that there is no official transcript does not make the agreement unenforceable, it just makes it difficult to prove the elements of an enforceable oral agreement pursuant to Section 664.6. Obviously, best practice is to ensure that there is a court reporter will be present on a day when settlement is likely. Alternatively, counsel should be prepared to draft a written agreement and not rely on the oral agreement process.

E. WHAT IS REQUIRED TO ENFORCE A WRITTEN AGREEMENT?

If the settlement agreement is reached during mediation, then, as a threshold issue, the agreement must meet the requirements of Evidence Code section 1123, otherwise the document is inadmissible for any purpose. Evidence Code section 1123 provides:

A written settlement agreement prepared in the course of, or pursuant to, a mediation, is not made inadmissible, or protected from disclosure, by provisions of this chapter if the agreement is signed by the settling parties and any of the following conditions are satisfied: (a) The agreement provides that it is admissible or subject to disclosure, or words to that effect. (b) The agreement provides that it is enforceable or binding or words to that effect. (c) All parties to the agreement expressly agree in writing, or orally in accordance with Section 1118, to its disclosure. (d) The agreement is used to show fraud, duress, or illegality that is relevant to an issue in dispute.¹⁴

In effect, any agreement that is enforceable under Section...