Sayta v. Chu, 17 Cal. App. 5th 960 (1st Dist. Nov. 29, 2017) – If you want the court to retain jurisdiction to enforce a settlement, make that request to the court before dismissal!
As stated by the First District Court of Appeal in the opening paragraph of its opinion, “[t]his case offers an object lesson on the requirements to invoke section 664.6 and the consequences of failure to comply with those requirements.” 17 Cal. App. 5th at 962.
Chu owned apartments in San Francisco and rented one to his niece, Taia. In turn, Taia sublet a bedroom in the apartment to Sayta. Between 2013 and 2015, a series of disputes arose between Sayta and the owner / tenant regarding his tenancy, and those disputes led to actions before the superior court and the San Francisco Rent Board. The parties settled their disputes and the terms of the settlement was confirmed in a written settlement agreement that provided for a mutual general releases, dismissal of the complaint and cross-complaint, withdrawal of any pending rend board petitions, termination of Sayta’s tenancy, waiver by the owner / tenant for claims of unpaid rent, and return of Sayta’s security deposit. The settlement agreement included a provision that its terms “shall remain confidential” and provided for liquidated damages of $15,000 for breach of the confidentiality provision. The settlement agreement also provided for summary enforcement of the settlement pursuant to Code of Civil Procedure § 664.6.
In accordance with the settlement agreement, the parties requested dismissal of their respective complaint and cross-complaint. Six months later, Sayta filed a motion under 664.6 to enforce the liquidated damages provision of the settlement agreement, complaining that defendants had breached the confidentiality provisions by placing a copy of the agreement in the public record by filing it with the rent board. Sayta also complained that he had received only a partial refund of his security deposit. The trial court denied Sayta’s motion on its merits, finding that there was no violation of the settlement agreement. Sayta appealed. On appeal, the First District Court of Appeal held that the trial court’s order denying Sayta’s motion seeking enforcement of the settlement agreement was void for lack of subject matter jurisdiction. Accordingly, the trial court’s order was reversed and remanded with directions to vacate the order.
Although section 664.6 provides a valuable tool to aid in the enforcement of settlements, the clear wording of that section requires that parties to a stipulated settlement request that the court “retain jurisdiction over the parties to enforce the settlement until performance in full of the terms of the settlement.” The Court of Appeal noted that this portion of section 664.6 has previously been construed to mean that the request to retain jurisdiction must be made
- (1) during the pendency of the case, not after the case is dismissed in its entirety,
- (2) by the parties themselves, and
- (3) either in a writing signed by the parties or orally before the court. 16 Cal. App. 5th at 966, citing Wackeen v. Malis, 97 Cal. App. 4th 429, 440 (2002).
The court went to explain that parties to a settlement cannot confer jurisdiction on the trial court simply by including language to that effect in their settlement agreement. “[S]ettlement language purporting to vest the trial court with retained jurisdiction after the dismissal [is] a nullity: Subject matter jurisdiction cannot be conferred by consent, waiver or estoppel.” Id., citing Hagen Engineering, Inc. v. Mills, 115 Cal. App. 4th 1004, 1008 (2003).
The trial court loses subject matter jurisdiction when an action is voluntarily dismissed and thereafter has no power to enforce a settlement unless, prior to dismissal, the parties ask the court to retain jurisdiction. This makes sense for, as the Court of Appeal pointed out, 664.6 “does not float in the ether to be drawn upon whenever a party seeks enforcement.” 17 Cal. App. 5th at 967. In this case, the court noted that Sayta failed “to explain how the court could have fathomed a ‘request’ for retained jurisdiction, must less granted it sub silentio from a secret handshake of the parties.” Id.