Don't Add Settlement Terms When You Enforce A Settlement Under CCP 664.6!
Apr 03, 2024I help California lawyers get excellent results in four ways:
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New CA Settlement Case
Don't Add Settlement Tems When Enforcing a Settlement Under CCP 664.6!
Last month, the First District Court of Appeal addressed this issue. Below is my one-paragraph summary of this new decision:
BTHHM Berkeley, LLC, et al. v. Johnston (2024) _ Cal.App.5th _ , 2024 WL 1336433: The Court of Appeal affirmed in part, and struck in part, the trial court’s order enforcing a settlement term sheet and entering judgment against defendant pursuant to Code of Civil Procedure section 664.6 (section 664.6). The Court of Appeal affirmed in part, concluding that the settlement term sheet was enforceable under section 664.6, the liquidated damages of $250,000 was not unreasonably out of proportion to the $2.2 million settlement, and defendant failed to show the liquidated damages provision was unreasonable under the circumstances as required by Civil Code section 1671(b). However, the trial court erred in awarding prejudgment interest. Section 664.6 authorizes a trial court to enter a judgment reflecting the terms of the parties’ settlement agreement—nothing more, and nothing less. Prejudgment interest is not a cost, but an element of damages. By awarding prejudgment interest to compensate plaintiff for damages it suffered by virtue of defendant’s failure to pay, the trial court entered a judgment that differed materially from the terms of the parties’ agreement, and to that extent it was unauthorized. The portion of the judgment providing for prejudgment interest was stricken. (C.A. 1st, March 28, 2024.)
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Best regards,
Monty A. McIntyre, Esq.
Mediator, Arbitrator & Referee
Master Lawyer Mentoring™
Podcaster: Trial Alchemy™
Publisher: California Case Summaries™
ABOTA Member Since 1995
Past President: San Diego County Bar Assn.
Past President: SD ABOTA Chapter
Phone: (619) 990-4312. Email: [email protected]
Mediation, Arbitration and Reference Services
To schedule a matter, contract Monty's case managers at ADR services, Haward Cho, [email protected], or Rachael Boughan, [email protected], (619) 233-1323.
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