Thursday, December 19, 2002
Nodding Head Not Sufficient to Approve Settlement Agreement—C.A
By KENNETH OFGANG, Staff Writer/Appellate Courts
A woman who nodded her head in assent when asked whether she was agreeing to a litigation settlement did not enter a binding agreement enforceable under Code of Civil Procedure Sec. 664.6, the Fourth District Court of Appeal ruled yesterday.
Div. Two overturned a Riverside Superior Court judge’s ruling that enforced a settlement agreement between Carol Kravagna and the family of her longtime companion, John L. McElroy, a multimillionaire residing in an assisted living facility in Corona.
Kravagna’s attorney had negotiated an agreement under which his client was to be paid more than $500,000 to withdraw her objections to the appointment of McElroy’s son and daughter as his conservators, move out of the Murrieta house that he owned, and give up all claims against his estate and his business interests.
At the time, Kravagna was involved in several lawsuits arising out of her relationship with McElroy, including one in which she was claiming a share of his assets under Marvin v. Marvin, and another in which she alleged to have been wrongfully terminated from her employment with his corporation.
At a hearing, retired Superior Court Judge Gerald Schulte, sitting on assignment, asked the attorneys and Kravagna whether they had agreed to the settlement terms as announced in open court. When all indicated they did, the judge declared the matter settled.
Kravagna later backed away from the agreement, saying she did not understand it to be a final settlement, and the McElroy offspring filed a motion for enforcement of settlement under Sec. 664.6. The motion was assigned to Judge Stephen D. Cunnison, who reviewed a videotape of the earlier hearing as well as a transcript made from the videotape.
The hearing had been videotaped under former Code of Civil Procedure Sec. 270, which allowed videotaping in lieu of stenographic reporting in certain counties, including Riverside. After reviewing the tape, the transcript, and the parties’ declarations, Cunnison ruled that Sec. 664.6 applied and ordered entry of judgment in accordance with the settlement terms.
But Justice Thomas Hollenhorst, writing yesterday for the Court of Appeal, said that Kravagna’s nod of the head was not sufficient assent under the terms of the statute.
Sec. 664.6 sets forth a summary procedure under which a settlement may be enforced upon a noticed motion, provided that the parties agreed to it in writing or “orally before the court.”
Hollenhorst cited Levy v. Superior Court (1995) 10 Cal.4th 578, which held that the statute could not be applied to an agreement signed on the party’s behalf by a lawyer, but not signed by the party. Agreements not complying with the statute, the justices said, must be enforced by other means, such as motions for summary judgment or breach-of-contract suits.
The formalities of the statute must be strictly enforced, Hollenhorst said, in order “to decrease the likelihood of misunderstandings, to impress upon the litigants the seriousness and finality of their settlement decision, and to minimize the possibility of conflicting interpretations of the settlement.”
The justice continued:
“We are therefore constrained to agree with Ms. Kravagna that these legislative goals would not be served by an interpretation that equates a nod of the head with oral consent. No stretch of the judicial imagination can make it so. As demonstrated by this case, head movements are too ambiguous to demonstrate assent and the ambiguity produces the litigation the statute was designed to avoid. Indeed, nods are not normally recorded by the reporter and, if the hearing had been held before a court reporter, the nods would not have been recorded at all.”
Even if enforcement of the settlement were consistent with legislative goals and public policy, the court could not enforce it because to do so would violate the clear language of Sec. 664.6, Hollenhorst declared.
The case is Conservatorship of McElroy, E099587.
Copyright 2002, Metropolitan News Company