ANGELA DIAZ v. MORELAND CORPORATION (2010)

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

OPINION

Defendants appeal from a judgment entered pursuant to an oral settlement agreement the parties entered into on the record at a settlement conference.   Defendants contend judgment should have been entered based on subsequent written agreements, which allocated the settlement amount between the defendants.   They contend the settlement amount was required to be allocated between them both by the written agreements and by Civil Code section 1431.2.   We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff sued defendants, Moreland Corporation and Maranatha Corrections, LLC, alleging wrongful termination, violations of the Fair Employment and Housing Act (FEHA), intentional and negligent infliction of emotional distress, and claims for unpaid wages and penalties.   She alleged she was employed simultaneously by both companies.

At a mandatory settlement conference on April 25, 2008, the parties reached a settlement agreement, which defense counsel recited on the record.   The parties agreed to settle the action for $200,000, to be characterized $10,000 as wages and $190,000 as a personal injury settlement.   The parties were to memorialize the terms of the agreement in a separate writing;  the terms included “a nonadmissions clause that neither party is admitting liability,” a mutual non-disparagement clause, a mutual confidentiality clause, and both a liquidated damages provision and an arbitration provision for violations of the non-disparagement and confidentiality provisions.   Plaintiff was to file an amended complaint, deleting all allegations concerning Matthew Moreland.   Defendants were to pay the settlement amount after plaintiff provided the necessary paperwork, including a request for dismissal with prejudice.   Defense counsel was to hold the request for dismissal and not file it with the court until all monies were paid.   The parties were to mutually release all claims and waive the provisions of Civil Code section 1542.   The parties contemplated “other provisions-standard ․ in an employment dispute settlement.”   The settlement amount was to be paid within 30 days after plaintiff signed the written agreement.   Both attorneys indicated there were no additional terms and conditions.   Plaintiff and Terry Moreland, chief executive officer for both defendants, agreed to the terms as stated on the record by defense counsel.   Moreland expressly agreed “to fund the settlement ․ pursuant to the agreement recited by ․ counsel.”

The trial court marked the matter settled, vacated the trial date, and set a hearing on an order to show cause why the case should not be dismissed, to follow up on the settlement.   At the dismissal hearing on September 8, 2008, the court set the matter for a hearing on an order to show cause why judgment on the settlement should not be entered.

Prior to the October 2, 2008, hearing on the order to show cause why judgment should not be entered, plaintiff had fully performed her obligations under the oral agreement, including filing the amended complaint, signing two written settlement agreements on July 19, 2008, and returning them to defense counsel.   Defense counsel represented the settlement funds would be paid on August 25, but then informed plaintiff's counsel defendants were unable to pay the settlement amount.   By the October 2 hearing, defendants still had not signed the written agreements.   The court granted plaintiff's request to enter judgment on the April 25, 2008, settlement agreement.   The court ordered plaintiff counsel to prepare the order and submit it to opposing counsel for approval as to form and content before submitting it to the court.

Defendants apparently objected to plaintiff's proposed order.¹  Plaintiff filed a response to defendants' objections and the matter was set for hearing.   Two days before the hearing, defendants filed a brief contending the judgment should allocate the settlement amount between the two defendants as provided in the written agreements plaintiff signed:  $195,000 to Maranatha Corrections and $5,000 to Moreland Corporation, based on the length of time plaintiff allegedly worked for each entity.   Defendants asserted Moreland signed the written settlement agreements on October 19, so execution of the agreements was complete.   After hearing argument on December 5, 2008, the court ordered both parties to prepare proposed rulings and submit them to the court;  both parties did so.   The court then issued its ruling on December 30, 2008, finding there was sufficient evidence of a binding settlement agreement to permit the court to enter judgment pursuant to Code of Civil Procedure section 664.6 on October 2, 2008.   Judgment was entered on January 20, 2009, in favor of plaintiff and against defendants in the sum of $200,000, $10,000 of which was to be treated as wages.   Defendants appealed.

DISCUSSION

I. Standard of Review

Code of Civil Procedure section 664.6 ² authorizes the court to enter judgment pursuant to the terms of a settlement agreement entered into orally before the court or in a writing signed by the parties, if it determines that the parties have entered into a valid and binding settlement agreement. (§ 664.6;  Estate of Dipinto (1986) 188 Cal.App.3d 625, 629 (Dipinto ).)   In making that determination, the court acts as trier of fact;  it may take oral testimony or rely on declarations alone.  (Dipinto, supra, at p. 629;  Casa de Valley View Owner's Assn. v. Stevenson (1985) 167 Cal.App.3d 1182, 1189.)   When the judge before whom the settlement agreement was made hears the motion to enter judgment on the settlement, he or she may also consult his or her memory in determining the facts.  (Osumi v. Sutton (2007) 151 Cal.App.4th 1355, 1360.)   On appeal, the trial court's factual findings are subject to substantial evidence review.  (Ibid.)

Entry of a stipulated judgment is a judicial act that a court has discretion to perform;  “a court may not add to or make a new stipulation without mutual consent of the parties [citation], [but] it may reject a stipulation that is contrary to public policy [citation], or one that incorporates an erroneous rule of law [citation].”  (California State Auto. Assn. Inter-Ins.   Bureau v. Superior Court (1990) 50 Cal.3d 658, 664 (CSAA ).)   The proper standard of review of the court's exercise of discretion in granting a motion made pursuant to section 664.6 is whether the court's ruling is supported by substantial evidence.  (Dipinto, supra, 183 Cal.App.3d at p. 629.)   Where construction and application of a statute are involved, the court conducts an independent review of the trial court's ruling.  (Murphy v. Padilla (1996) 42 Cal.App.4th 707, 711.)

II. Entry of Judgment Based on Settlement Agreement

A. October 2, 2008 order

“If parties to pending litigation stipulate, in a writing signed by the parties outside the presence of the court or orally before the court, for settlement of the case, or part thereof, the court, upon motion, may enter judgment pursuant to the terms of the settlement.   If requested by the parties, the court may retain jurisdiction over the parties to enforce the settlement until performance in full of the terms of the settlement.” (§ 664.6.)

After a hearing on September 8, 2008 regarding dismissal of the action, the court set the case for a hearing on an order to show cause why judgment on the settlement agreement should not be entered;  the hearing was set for October 2, 2008.   Defendants did not file any papers in response to the order.   The only settlement document before the court on October 2 was the transcript of the settlement conference at which the settlement agreement had been placed on the record.   The same judge who presided at that settlement conference heard the matter on October 2. The judge noted that, “in looking at the transcript, there was no doubt in my mind that both sides agreed to the settlement.”

Defendants raised no issue that would have prevented entry of judgment on the oral settlement agreement.   They did not dispute that they had entered into the settlement agreement, or that the agreement was made “before the court,” as required by section 664.6.   They did not contend the transcript failed to accurately reflect the agreement the parties made.   They did not assert Moreland lacked the authority to enter into the agreement on behalf of both defendants.   They did not contend plaintiff failed to perform as required by the agreement.   Defense counsel acknowledged that the oral agreement had been memorialized in written agreements, which plaintiff had signed, but defendants had not signed.   He presented no reason for his clients' failure to execute the written agreements, which defendants had informally agreed to and plaintiff had signed more than two months before that hearing.   The only explanation offered for defendants' failure to follow through on the settlement and tender payment to plaintiff was that the defendants did not have the funds to pay the settlement amount.

Substantial evidence supported the court's determination that the parties entered into a valid, binding oral settlement agreement before the court.   The terms of that agreement were set out at length on the record.   The court properly ordered that judgment be entered in accordance with the oral settlement agreement.

B. Objections to proposed formal order

Generally, when a party prepares a formal order based on the court's ruling on a motion, the party must submit the proposed order to the opposing party “for approval as conforming to the court's order” before submitting it to the court.  (Cal. Rules of Court, rule 3.1312(a).)   At the end of the October 2 hearing, the court directed plaintiff's attorney to prepare the order and “submit it to counsel as to approval of form and content and then to the Court.”   The purpose of transmitting a proposed order to opposing counsel before submitting it to the court is to ensure that the order accurately reflects the order made by the court;  its purpose is not to provide another opportunity for the opposing party to argue the merits of the court's decision.

Defendants apparently transmitted objections to plaintiff's counsel after receiving the proposed formal order.   According to plaintiff, defendant objected to inclusion of language ordering that “ ‘judgment on the settlement in the amount of $200,000 be entered.’ ”   The objection was based on defendants' contention that “ ‘the terms of the settlement agreements executed by Ms. Diaz provide that the settlement dollars are allocated as follows:  Maranatha Corrections, LLC-$195,000 and Moreland Corporation -$5,000.”   Thus, defendants' objection to the proposed order was not that it was inaccurate or incorrect in recording the order made by the court on October 2. Instead, defendants' objection constituted an argument that the trial court made the wrong orderthat it should have ordered that the judgment include provisions not found in the oral agreement of the parties, based on a written document that was not before the court on October 2 and was not even executed by defendants until 17 days later.

Essentially, defendants' “objections” amounted to a motion for reconsideration that was not made in compliance with section 1008;  the trial court had no jurisdiction to entertain a motion for reconsideration of the October 2 order in the absence of compliance with section 1008. (§ 1008, subd. (e).)

“A written settlement agreement is not enforceable under section 664.6 unless it is signed by all of the parties to the agreement, not merely the parties against whom the agreement is sought to be enforced.”  (Sully-Miller Contracting Co. v. Gledson/Cashman Construction, Inc. (2002) 103 Cal.App.4th 30, 37 (Sully-Miller ).)   After the settlement conference at which the oral agreement was put on the record, defense counsel drafted two written agreements, one for each defendant.   Plaintiff's counsel made minor changes and defense counsel sent plaintiff's counsel revised written agreements.   One written agreement provided that Moreland Corporation would pay plaintiff $5,000 in settlement of her claims against it;  the other provided that Maranatha Corrections would pay plaintiff $195,000 in settlement.   Plaintiff signed both documents on July 19 and her attorney returned them to defense counsel.   On September 8, the court set the hearing to consider entering judgment on the oral agreement.   On October 2, although more than two months had passed since plaintiff had signed the written agreements, defendants still had not executed the documents.   It was not until October 19, 17 days after the court granted plaintiff's request for entry of judgment on the oral agreement, that Moreland signed the two written agreements on behalf of defendants, after adding a handwritten provision that nothing in the agreements released any claims by defendants against their attorneys.

At the December 5 hearing on defendants' objections to the proposed order, defendants made no showing or argument that the order proposed by plaintiff was an inaccurate reflection of the order actually made by the court on October 2 or that it was improper in some other way.   Their only arguments addressed the propriety of the substance of the order made by the court, based on facts that were not mentioned on October 2 and events that did not take place until after that date.

At the December 5 hearing, plaintiff's counsel represented to the court that, before his client signed the written agreements, he was told the apportionment in the two agreements was for tax purposes;  he and his client were not concerned because they thought defendants intended to pay the settlement amount and they did not care how much of it each defendant paid.   He opined that, after the court ordered entry of judgment, defendants “tried to sign the agreement to lock [plaintiff] into having ․ a debt against an entity which ․ is being rendered judgment-proof.”   Defense counsel argued that plaintiff agreed to the apportionment of the settlement between the defendants by signing the two written agreements, although he conceded that there was no mention of such an apportionment in the oral agreement.   He explained the apportionment was based on the length of time plaintiff worked for each company;  plaintiff disputed this.   Defense counsel did not deny representing that the allocation was made for tax purposes;  he did not deny that the result was to change the agreement from one providing for joint liability to one that placed the bulk of the settlement obligation on one defendant or that that defendant was “being rendered judgment-proof.”   Defense counsel and general counsel ³ for Moreland Corporation additionally argued that apportionment was required pursuant to Civil Code section 1431.2.

We find no abuse of discretion in the trial court's rejection of defendants' objections to the proposed order, or its refusal to vacate or modify the October 2 order.   At the October 2 hearing of the order to show cause why judgment should not be entered, there was no evidence before the court indicating any fully executed written agreement between the parties existed or could have been enforced.   There were no written agreements before the court.   Although defendants prepared two written agreements, and plaintiff signed them in July and returned them to defense counsel, defendants did not sign them.   Defendants did not sign them even after the September 8 hearing at which the court set an order to show cause hearing, indicating its intention of entering judgment on the oral agreement.   At the October 2 hearing, defendants did not contend that the oral agreement was not the agreement of the parties or that apportionment was a necessary term of the agreement.   They did not present fully executed written agreements and request that judgment be entered in accordance with them.   They did not explain their failure to execute the written agreements or request further time within which to do so.   They did not express any opposition to entry of judgment on the oral agreement.   At the time of the October 2 hearing, there was no settlement agreement signed by all parties for the court to enforce pursuant to section 664.6.   Accordingly, the court properly entered judgment on the only agreement then existing between the parties-the oral agreement placed on the record on April 25.

Defendants presented no satisfactory reason why they should be permitted to substitute the written agreements for the oral agreement after their unexplained delay.   After entering into a binding oral settlement agreement, defendants did not promptly execute a written agreement memorializing the oral agreement;  they delayed for months, without explanation.   Although their counsel prepared the written agreements, with some input from plaintiff's counsel, and defendants informally approved them, defendants delayed signing until after plaintiff signed the written agreements.   They delayed until after plaintiff fully performed her obligations under the oral agreement.   They delayed until after their time to perform had come and gone.   They delayed until after plaintiff obtained an order for entry of judgment on the oral agreement in an attempt to compel defendants to perform.   They delayed until after they filed objections to the order proposed by plaintiff, and after plaintiff filed her response to those objections.   Defendants finally executed the written agreement, after adding language they admit was not material to the agreement between the parties but only affected defendants and their attorneys;  they sought to have the court abandon the order made on October 2 and instead order entry of judgment on the written agreements.

“[A] stipulated judgment [entered pursuant to section 664.6] is indeed a judgment;  entry thereof is a judicial act that a court has discretion to perform․  ‘While it is entirely proper for the court to accept stipulations of counsel that appear to have been made advisedly, and after due consideration of the facts, the court cannot surrender its duty to see that the judgment to be entered is a just one, nor is the court to act as a mere puppet in the matter.’  [Citation.]”  (CSAA, supra, 50 Cal.3d at p. 664.)   The court did not abuse its discretion by ordering entry of judgment on the oral agreement, and declining to subsequently change that order to substitute a new and different order enforcing the written agreements, which defendants themselves refused to execute until well after plaintiff obtained the order enforcing the oral agreement.

The oral agreement was properly enforced pursuant to section 664.6 despite the parties' failure to successfully memorialize it in a signed writing.   As stated in Elyaoudayan v. Hoffman (2003) 104 Cal.App.4th 1421 (Elyaoudayan ):

“The oral agreement's statement that the parties would later sign a written agreement did not affect the enforceability of the oral settlement under section 664.6.  ‘ “ ‘Whether [an oral agreement] constitutes a final agreement or merely an agreement to make an agreement depends primarily upon the intention of the parties.   In the absence of ambiguity this must be determined by a construction of the [oral agreement] as a whole.’ ”  ․ “The objective intent as evidenced by the words of the [oral agreement], not the parties' subjective intent, governs our interpretation.” ․

“ ‘[If] the [oral agreement] at issue shows “no more than an intent to further reduce the [oral agreement] to a more formal [written] one” the failure to follow it with a more formal writing does not negate the existence of the prior [oral] contract․  However, where the [oral agreement] shows it was not intended to be binding until a formal written contract is executed, there is no contract.’  [Citation.]”  (Elyaoudayan, supra, 104 Cal.App.4th at pp. 1429-1430.)

The parties agreed upon all the material terms orally at the settlement conference.   The terms were recited on the record and, in response to questioning by the court, both parties confirmed their understanding of the terms and their agreement to be bound by them.   There was nothing in the recitation of terms to suggest the agreement was not to be binding until a formal written contract was executed.   Rather, the writing was merely to “memorialize” all of the terms agreed upon.

As observed in Elyaoudayan:

“Often, in cases where an oral settlement is placed on the record in the trial court, a written agreement will follow.   If difficulties or unresolvable conflicts arise in drafting the written agreement, the oral settlement remains binding and enforceable under section 664.6.   Having orally agreed to settlement terms before the court, parties may not escape their obligations by refusing to sign a written agreement that conforms to the oral terms.   The oral settlement, like any agreement, ‘imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement.’  [Citation.]”  (Elyaoudayan, supra, 104 Cal.App.4th at p. 1431.)

The court did not abuse its discretion by entering judgment on the oral agreement the parties entered into on the record at the settlement conference and declining to vacate that order and enforce the written agreements instead.   Its decision was supported by substantial evidence.

C. Civil Code section 1431.2

Defendants contend that Civil Code section 1431.2 requires that the judgment be apportioned between defendants.   Subdivision (a) of that section provides:

“In any action for personal injury, property damage, or wrongful death, based upon principles of comparative fault, the liability of each defendant for non-economic damages shall be several only and shall not be joint.   Each defendant shall be liable only for the amount of non-economic damages allocated to that defendant in direct proportion to that defendant's percentage of fault, and a separate judgment shall be rendered against that defendant for that amount.”   (Civ.Code, § 1431.2, subd. (a).)

Contrary to defendants' characterization, the statute affects allocation of liability, not apportionment of a judgment entered pursuant to a settlement agreement.  “[T]he liability of each defendant for non-economic damages” is several and not joint, and each defendant is “liable only for the amount of non-economic damages allocated to” it according to its “percentage of fault.”   (Civ.Code, § 1431.2, subd. (a), italics added).)

The settlement agreement did not determine the fault of any party or attribute liability to any defendant for the damages or injuries alleged by plaintiff.   Rather the parties agreed that the settlement was not an admission of liability or fault.   Thus, there was no liability to apportion pursuant to Civil Code section 1431.2, nor was there any determination of any defendant's “percentage of fault” to use as the basis for such an apportionment.  (Id., subd. (a).)  Additionally, there was no determination that plaintiff sustained any damages as a result of conduct of the defendants, much less a determination of the nature of those damages as either economic or noneconomic.   This is consistent with the common use of a settlementto buy the defendant's peace and avoid the expense, inconvenience, and uncertainty of a trial, without an admission of liability or of the validity of the plaintiff's claims.

“ ‘It is the policy of the law to discourage litigation and to favor compromise and voluntary settlements of doubtful rights and controversies, made either in or out of court.’ ”  (Central and West Basin Water Replenishment Dist. v. Southern Cal. Water Co. (2003) 109 Cal.App.4th 891, 912 (Central and West ).)   Settlement agreements are highly favored, because they discourage needless litigation and its attendant expense, and promote peace and good will in the community.  (City of Orange v. San Diego County Employees Retirement Assn. (2002) 103 Cal.App.4th 45, 55;  Joel v. Valley Surgical Center (1998) 68 Cal.App.4th 360, 369.)

“In a stipulated judgment, ․ litigants voluntarily terminate a lawsuit by assenting to specified terms, which the court agrees to enforce as a judgment.”  (CSAA, supra, 50 Cal.3d at p. 663.)   The agreement is a contract, the terms of which are negotiated by the parties.   By settling, the parties exchange the uncertainty of a potential liability for the certainty of a fixed obligation.  “Parties may agree to a solution that ‘ “waives or alters their ․ rights in a manner which they believe to be in their best interest.” ’  [Citation.]”  (Central and West, supra, 109 Cal.App.4th at p. 912.)  “It is generally the rule that the merits of the original controversy are no longer in issue where a compromise agreement is made in good faith and without fraud, duress or undue influence.   Ordinarily, such a compromise agreement is binding upon the parties and becomes the measure of their rights.”  (Argonaut Ins. Exchange v. Industrial Acc. Com. (1958) 49 Cal.2d 706, 711.)

“[N]o public policy opposes private, voluntary transactions in which one party, for a consideration, agrees to shoulder a risk which the law would otherwise have placed upon the other party.”  (Tunkl v. Regents of University of California (1963) 60 Cal.2d 92, 101.)   We know of no public policy preventing one defendant from agreeing to shoulder, or share, a potential liability the law might otherwise have placed upon another defendant.   There is nothing in Civil Code section 1431.2 that would prevent two defendants from voluntarily agreeing to jointly pay compensation to plaintiff in exchange for termination of the litigation pending against both defendants.

To hold that a judgment based on a settlement agreement between a plaintiff and multiple defendants in a case involving allegations of comparative negligence must include an allocation of the settlement amount between economic and noneconomic damages and an allocation of the defendants' respective percentages of fault, so that the defendants can be held only severally liable for noneconomic damages, would require either that every such settlement agreement include an apportionment of damages and fault, or that some kind of trial be held to determine the proper apportionments.   The former would be inconsistent with a settling defendant's usual denial of liability or of the validity of plaintiff's damage claims, or both;  the latter would defeat a major purpose of settlementavoidance of trial.

Judgment was entered on the settlement agreementthe parties' voluntary agreement that plaintiff would dismiss her action in exchange for payment of a specified sum by defendants.   Judgment was not based on any finding that defendants were liable to plaintiff for economic or noneconomic damages she sustained as a result of some tort of defendants.   Defendants agreed to buy their peace by making a specified payment to plaintiff in exchange for termination of the litigation, while maintaining their denial of liability for the claims alleged in the complaint.  Civil Code section 1431.2 does not apply to the judgment which was entered pursuant to the terms of the parties' settlement agreement.

III. Sanctions for Frivolous and Dilatory Appeal

After the briefs in this appeal were filed, plaintiff moved for sanctions to be imposed against defendants for filing a frivolous and dilatory appeal.   Plaintiff asserts the appeal is completely without merit, was filed in order to delay defendants' payment of the settlement amount, and violated various rules of court.   We gave notice that we were considering granting the motion, and defendants filed opposition.⁴  Defendants contend the appeal presents valid issues, and is not frivolous if it presents a case of first impression or an attempt to change existing law.   They also contend the appeal has not delayed payment of the settlement amount, because enforcement of judgment has not been stayed.   Finally, they argue they did not violate any rules of court, or any violation does not affect the appeal.

“When it appears to the reviewing court that the appeal was frivolous or taken solely for delay, it may add to the costs on appeal such damages as may be just.” (§ 907.)  “On motion of a party or its own motion, a Court of Appeal may impose sanctions, including the award or denial of costs under rule 8.278, on a party or an attorney for:  [¶] (1) Taking a frivolous appeal or appealing solely to cause delay;  ․ or [¶] (4) Committing any other unreasonable violation of these rules.”  (Cal. Rules of Court, rule 8.276.)

“[A]n appeal should be held to be frivolous only when it is prosecuted for an improper motive-to harass the respondent or delay the effect of an adverse judgment-or when it indisputably has no merit-when any reasonable attorney would agree that the appeal is totally and completely without merit.”  (In re Marriage of Flaherty (1982) 31 Cal.3d 637, 650 (Flaherty ).)  “ ‘While each of the above standards provides independent authority for a sanctions award, in practice the two standards usually are used together “with one providing evidence of the other.   Thus, the total lack of merit of an appeal is viewed as evidence that appellant must have intended it only for delay.”   [Citations.]’  [Citations.]”  (In re Marriage of Gong & Kwong (2008) 163 Cal.App.4th 510, 516.)

A. Appeal that indisputably has no merit

Whether an appeal “indisputably has no merit” is determined by an objective standard.  (Flaherty, supra, 31 Cal.3d at p. 650.)  “The objective standard looks at the merits of the appeal from a reasonable person's perspective.  ‘The problem involved in determining whether the appeal is or is not frivolous is not whether [the attorney] acted in the honest belief he had grounds for appeal, but whether any reasonable person would agree that the point is totally and completely devoid of merit, and, therefore, frivolous.’ ”  (Id. at p. 649.)  “Nevertheless, an appeal is not frivolous simply because it has no merit.  [Citation.]  Sanctions are to be ‘used most sparingly to deter only the most egregious conduct.’  [Citation.]  Further, ‘[a]n appeal, though unsuccessful, should not be penalized as frivolous if it presents a unique issue which is not indisputably without merit, or involves facts which are not amenable to easy analysis in terms of existing law, or makes a reasoned argument for the extension, modification, or reversal of existing law.   [Citation.]’  [Citation.]”  (Dodge, Warren & Peters Ins. Services, Inc. v. Riley (2003) 105 Cal.App.4th 1414, 1422.)

Defendants contend that, even if their appeal was without merit, it was not frivolous, because it presented valid issues:  (1) whether the oral agreement or the subsequent written agreements should have been enforced, and (2) whether Civil Code section 1431.2 applied to require apportionment of the damages between the two defendants.

As to the statutory issue, we conclude no reasonable attorney would believe there was any merit to defendants' contention that Civil Code section 1431.2 applies to a judgment entered pursuant to a settlement agreement.  Civil Code section 1431.2 abrogated joint and several liability for noneconomic damages;  it requires that “liability” for such damages be apportioned among defendants in proportion to each one's degree of “fault.”  (Id., subd. (a).)  By settling, the parties avoid a trial at which the defendants' liability or fault and the extent and nature of the plaintiff's damages would be determined.   The parties control the disposition of the litigation;  they decide for themselves how much each defendant, or the defendants jointly, will pay to the plaintiff in order to end the litigation.   There is no need for any allocation of the settlement payment by the court.   Defendants' argument would inject issues of fault and damages back into the case, and require further litigation of those issues, significantly reducing the benefits of settlement to the parties and to the court.   It would also negate the defendants' continued denial of liability or fault.   Defendants offer no analysis of Civil Code section 1431.2 that attempts to show how or why it applies to a judgment entered pursuant to a voluntary settlement.   They have advanced no policy arguments for applying the statute to judgments entered on compromise agreements.

As to the issue of which agreementoral or writtenshould have been enforced, we find that, while defendants' arguments border on the frivolous, we cannot say that any reasonable attorney would agree the arguments are totally and completely devoid of merit.   Plaintiff signed the written agreements prior to the October 2 hearing;  if defendants had also signed them prior to the hearing, they likely would have been enforced.   Defendants ultimately did execute the agreements.   After the court ordered that judgment be entered on the oral agreement, defendants did not use the proper procedural device to ask the trial court to enter a different order, but no one raised this procedural issue in the trial court.   The trial court denied defendants' request for a different order, and defendants appealed, essentially arguing the trial court should have given effect to the written agreements because they superseded the oral agreement.   We find that reasonable attorneys could disagree as to whether defendants' arguments on this issue were completely and totally devoid of merit.   Accordingly, we decline to impose sanctions against defendants for filing a totally meritless appeal.

B. Dilatory appeal

Section 907 permits imposition of sanctions when an appeal is “taken solely for delay.”   Determining whether an appeal was taken solely for delay requires “an inquiry into the motive of an appellant for prosecuting his appeal, as opposed to an evaluation of his relative chance for success therein.”   (Hersch v. Citizens Savings & Loan Assn. (1983) 146 Cal.App.3d 1002, 1012.)   Frivolousness and delay may be considered together, with one providing evidence of the other.   Flaherty, supra, 31 Cal.3d at p. 650.)   Sanctions “should be used most sparingly to deter only the most egregious conduct.”  (Id. at pp. 650-651.)

There are some circumstances suggesting the appeal was brought for purposes of delay.   These include defendants' failure to timely pay the settlement amount;  defendants' delay in signing the written agreements;  their attorney's representation at the October 2 hearing that defendants were unable to pay the settlement amount;  defendants' belated efforts to have judgment entered on the written agreements;  and their insistence that a statute providing for apportionment of liability among comparatively negligent tortfeasors applied to the judgment entered on the parties' settlement agreement.   We conclude, however, that these circumstances do not amount to “the most egregious conduct,” and deny plaintiff's request for sanctions to the extent it relies on a claim that defendants appealed solely for purposes of delay.

C. Violation of rules of court

This court may impose sanctions on a party or an attorney for unreasonably violating the rules of court.  (Cal. Rules of Court, rule 8.276(a)(4).)   Such sanctions may be imposed “to ensure that the purposes of its rules of court are achieved and to discourage the future violations of court rules.”   (Campagnone v. Enjoyable Pools & Spas Service & Repairs, Inc. (2008) 163 Cal.App.4th 566, 570.)

Plaintiff contends defendants should be sanctioned for violating the rules of court by failing to support the factual statements in their briefs with citations to the appellate record and by including statements of fact which are not supported by the record or contradict the facts contained in the record.   Rule 8.204 of the California Rules of Court requires that an appellant's opening brief contain “a summary of the significant facts limited to matters in the record,” (id., (a)(2)(C)) and “[s]upport any reference to a matter in the record by a citation to the volume and page number of the record where the matter appears.”  (Id., (a)(1)(C).)  “Each assertion in the statement of facts must be supported by a citation to the record (transcript or exhibits) where the applicable facts are found.”  (Eisenberg et al., Cal. Practice Guide:  Civil Appeals and Writs (The Rutter Group 2009) ¶ 9:132;  see also, Pierotti v. Torian (2000) 81 Cal.App.4th 17, 29, “It is axiomatic that an appellant must support all statements of fact in his briefs with citations to the record.”)  “[A ]ny reference in the brief must be supported by a citation, regardless of where in the brief that reference appears.”  (City of Lincoln v. Barringer (2002) 102 Cal.App.4th 1211, 1239, fn. 16.)   It is counsel's duty to refer the court to the portions of the record that support the statements made in the party's brief;  it is not the court's obligation to comb the record on the party's behalf.  (Schmidlin v. City of Palo Alto (2007) 157 Cal.App.4th 728, 738.)

Defendants' opening brief is seriously deficient, not only because it omits references to the appellate record, but also because it includes statements not supported by the record, and makes misleading statements of fact.   Some of the sections setting out the facts contain no citations to the record.   Much of the remainder of the statement of facts contains only one reference to the record for each paragraph or more of the text, and the reference identifies multiple pages of the clerk's transcript.   There are no citations to the record at all in the remainder of the brief, even where factual statements are made.

The statement of facts contains misleading statements, such as “the parties in principal settled the case” and “placed most of the key terms on the record,” and “[s]ome terms, such as the allocation of each Defendant's liability were memorialized in written agreements later ․, but were not part of the stipulation on the record.”   These statements misleadingly imply that the parties failed to include all the material terms of their oral agreement in the recitation on the record, or that they affirmatively agreed to leave some material terms open, such as allocation of liability, and reach agreement on them later.   The trial court was clear that apportionment of liability was not discussed at the settlement conference and noted that, after the recitation of the agreement, it specifically asked if there were any additional terms, and both attorneys responded in the negative.

In response to the motion for sanctions, defendants asserted that their citations to the record are sufficient because they “have provided 9 citations, average 1 citation per 128 words” in the statement of facts.   Defendants also argue that, because the standard of review in this appeal is in part substantial evidence and in part de novo, any conflict in the evidence will not affect the court's substantial evidence review, and the court must review all of the factual discrepancies and conflicts in its de novo review.   The point of this argument is obscure.   We fail to comprehend how the standard of review could vitiate defendants' obligation under the rules to support each statement of fact in their brief with a citation to the location in the record where that information may be found. If

counsel is suggesting that defendants have no obligation to provide precise citations to the record because the court must review and consider the entire record in any event, we categorically reject this suggestion.

While we find that defendants' brief violated the rules of court, we find that the violations were not sufficiently egregious to warrant an award of monetary sanctions.   Accordingly, we deny plaintiff's request for sanctions for violation of the rules of court.⁵

DISPOSITION

The judgment is affirmed.   Plaintiff is awarded her costs on appeal.

HILL, J.

WE CONCUR:

VARTABEDIAN, Acting P.J.

LEVY, J.

FOOTNOTES

FN1. The objections do not appear in the record..  FN1. The objections do not appear in the record.

FN2. All further statutory references are to the Code of Civil Procedure unless otherwise indicated..  FN2. All further statutory references are to the Code of Civil Procedure unless otherwise indicated.

FN3. Howard Fisher appeared at the December 5 hearing, identified himself as general counsel for the Moreland Corporation, and argued in favor of a judgment apportioning liability between the defendants.   He is also appellate counsel for defendants..  FN3. Howard Fisher appeared at the December 5 hearing, identified himself as general counsel for the Moreland Corporation, and argued in favor of a judgment apportioning liability between the defendants.   He is also appellate counsel for defendants.

FN4. The opposition was received and filed timely on November 30, 2009.   It was inadvertently not entered in the docket prior to oral argument.   The opposition was fully considered by the court in rendering its decision..  FN4. The opposition was received and filed timely on November 30, 2009.   It was inadvertently not entered in the docket prior to oral argument.   The opposition was fully considered by the court in rendering its decision.

FN5. We wish to emphasize that our denial of sanctions in this case should not be interpreted to suggest we condone the rule violations or presentation of frivolous argument in this case.   We deny sanctions because the threshold for imposition of such sanctions is high and the conduct of counsel in this case falls short of that threshold..  FN5. We wish to emphasize that our denial of sanctions in this case should not be interpreted to suggest we condone the rule violations or presentation of frivolous argument in this case.   We deny sanctions because the threshold for imposition of such sanctions is high and the conduct of counsel in this case falls short of that threshold.