NORMAN KRUG REAL ESTATE INVESTMENTS INC v. PRASZKER (1993)

Plaintiff Norman I. Krug Real Estate Investments, Inc. (Krug) and defendants Roman Praszker and West & Praszker Realtors, Inc. (Praszker) have filed a joint application for stipulated reversal of a judgment against Praszker as part of a settlement of the above action, which is now pending on appeal in this court.

For the reasons explained below, we find that the “extraordinary circumstances” exception to the rule pronounced in Neary v. Regents of the University of California (1992) 3 Cal.4th 273, 10 Cal.Rptr.2d 859, 834 P.2d 119 warrants denial of the parties' request.

BACKGROUND

The judgment the parties now seek to have reversed was entered after the case was remanded to the superior court for reasons set forth by this court in Norman I. Krug Real Estate Investments, Inc. v. Praszker (1990) 220 Cal.App.3d 35, 269 Cal.Rptr. 228 (Krug v. Praszker).

In that opinion we affirmed the judgment of the trial court in favor of Krug but remanded to the superior court to make new findings and an apportionment of damages based on Krug's comparative negligence.  (Krug v. Praszker 220 Cal.App.3d at p. 45, 269 Cal.Rptr. 228.)   On September 24, 1992 the superior court issued an amended judgment, reducing Krug's damage award from $27,144.73 to $14,929.60.   Krug appealed from the amended judgment.

Soon after the appeal was filed, counsel for the parties requested a settlement conference (Ct.App., First Dist., rule 3(c)(1)) and a settlement conference was held before a justice of another division.   Four months later, on March 15, 1993, counsel jointly filed a “Stipulation Regarding Dismissal, Costs and Remittitur” stating in its entirety that the parties “hereby stipulate, by and through their attorneys of record, that the appeal be dismissed, that the parties are to bear their own costs and that the remittitur issue forthwith.”   Two days later the Presiding Justice of this division issued an order stating that “Counsel having so stipulated, the appeal on file herein is ordered dismissed with each party to bear its own costs on appeal and the remittitur is to issue forthwith.”   The remittitur issued that same day.

On March 29, 1993 the parties filed a stipulation seeking recall of the remittitur so that we could reassert jurisdiction and issue another remittitur in line with an intention of the parties not previously disclosed.   As stated in this second stipulation, the parties “miscommunicated their intentions as to the filing of the Stipulation with the court and did not intend for a remittur [sic] to issue solely pursuant to that Stipulation.”   Evidently, the stipulation filed on March 15, upon which the court acted, did not accurately represent the intention of the parties and was inconsistent with a “Joint Application” filed two days later, which the court had not seen at the time it issued the order dismissing the appeal.

The joint application, to which our attention is now directed, states:

“1. Appellant and respondents have entered into an agreement pursuant to which they have resolved their disputes embodied in this appeal and the underlying Superior Court action.

“2. Appellant and respondents agree that the September 24, 1992 judgment of the Superior Court of the City and County of San Francisco ․ should be reversed.

“3. On remand, appellant and respondents further agree that the Superior Court in and for the City and County of San Francisco should be directed to dismiss this entire action with prejudice.

“4. Appellant and respondents agree that this agreement and joint application have not been obtained by fraud or deceit but rather were entered into based upon good faith negotiations and after consultation with their respective counsel.

“5. Appellant and respondents agree to bear their own costs of appeal.

“6. This joint application is based upon this application, the points and authorities filed herewith, and the record on file herein.”  (Italics added.)

The points and authorities filed with the joint application consists of five sentences and relies entirely on the holding in Neary v. Regents of the University of California, supra, 3 Cal.4th 273, 10 Cal.Rptr.2d 859, 834 P.2d 119 (Neary).   In Neary, the California Supreme Court held “that, when the parties to an action agree to settle their dispute and as part of their settlement stipulate to a reversal of the trial court judgment, the Court of Appeal should grant their request for the stipulated reversal absent a showing of extraordinary circumstances that warrant an exception to this general rule.”  (Id., at p. 284, 10 Cal.Rptr.2d 859, 834 P.2d 119.)   The parties' joint application states that, because “no extraordinary circumstances exist herein[,] ․ appellant and respondents' joint application should be granted and the lower court's judgment reversed with instructions to dismiss the case with prejudice.”

DISCUSSION

I

Neary states that “[s]imple fairness requires that the first and most weighty consideration be given to the parties' interests and that they be accommodated except in the extraordinary case.   The parties are the persons (or entities) most affected by a judgment, which is the ultimate product of their sustained effort and expense.  [Citation.]  Homilies about ‘judicial integrity’ and ‘legal truth’ will ring hollow in the ears of the parties.   The courts exist for litigants.   Litigants do not exist for courts.”  (Neary, supra, 3 Cal.4th at p. 280, 10 Cal.Rptr.2d 859, 834 P.2d 119.)

Neary goes on to hold that an “extraordinary circumstance” justifying denial of a request for stipulated reversal exists when reversal would adversely affect the public interest.  (Neary, supra, 3 Cal.4th at p. 284, 10 Cal.Rptr.2d 859, 834 P.2d 119.)   The particular public interest, however, may not be “amorphous and speculative,” but must be “specific, demonstrable, well established, and compelling.”  (Id., at p. 283, 10 Cal.Rptr.2d 859, 834 P.2d 119.)   The opinion provides little guidance, however, as to the nature of the “extraordinary circumstances” warranting an exception to the general rule that such requests will be granted.   The court simply announced a “presumption in favor of stipulated reversal” while at the same time stating that the determination whether “extraordinary circumstances” exist “must be made on a case-by-case basis.”  (Id., at p. 284, 10 Cal.Rptr.2d 859, 834 P.2d 119.)

Since Neary creates a presumption in favor of a stipulated reversal and the parties are under no requirement to come forward with evidence that the public interest exception does not apply, we face a considerable handicap in performing our duty to ensure that, in any given case, “no countervailing factors are present, e.g., a contrary public interest.”  (Neary, supra, 3 Cal.4th at 284, 10 Cal.Rptr.2d 859, 834 P.2d 119.)   Indeed, under normal circumstances, no facts will be available to the court unless a nonparty comes forward and objects to the settlement or unless some problem is apparent in the record.   Thus, Neary imposes an unusual and difficult responsibility on the courts of appeal.

In an effort to fulfill our duty to ascertain whether the proposed stipulated reversal might fall within the Neary exception, we asked the parties to submit letter briefs responding to a series of questions on the subject.   One of our inquiries stated:  “In making the ‘case-by-case’ analysis required to determine whether ‘extraordinary circumstances' exist warranting departure from the presumption in favor of stipulated reversal, ․ should this court rely solely on the joint representation of the parties that there are no such circumstances[?]  Is there any reason the court should not require the stipulating parties to provide notice of their request to the trial judge and/or other parties known to be interested in the case or the public, advising that objections to the request (on the ground that the judgment in question may have collateral estoppel effect or because of ‘extraordinary circumstances') may be submitted to the appellate court within a specified period?”

The parties did not respond to this general question, focusing instead on the facts of the present case.   According to counsel for defendants, “the age of [this] dispute and the lack of evidence suggesting counsel's good faith representations are incorrect or made in bad faith indicate such [other] sources [of information] do not exist.”

Fortuitously, information not called to our attention by the parties is available.   Moreover, as will be seen, this information suggests that reversal of the judgment in this case might well adversely affect a “specific, demonstrable, well established, and compelling” public interest.

II

 Unlike the vast majority of cases in which stipulated reversal will be sought, the present case was the subject of an earlier appeal in which the underlying substantive issues were addressed in a published opinion.   Our opinion in the earlier appeal, which issued more than three years ago, was not adverted to in the request for stipulated reversal.   The opinion relates the following facts.   Krug, a real estate investor, possessed a promissory note from a former partner secured by a third deed of trust on an apartment building.   Krug agreed not to record the deed in order to facilitate refinancing of the property.   When the former partner defaulted on the note and the building was put up for sale, Praszker was the listing real estate broker.   Praszker disclosed the existence of the unrecorded deed of trust to a buyer initially interested in the building, but that sale collapsed.   One month later, however, the property was sold to the Noble Group, with Praszker acting as the realtor for both buyer and seller.   As a result of the sale, Krug lost his security interest in the property.  “At no time did Praszker inform Krug of the pending sale to the Noble Group, nor did he tell the Noble Group of the existence of Krug's unrecorded lien.”  (Krug v. Praszker, supra, 220 Cal.App.3d 35, 40, 269 Cal.Rptr. 228.)   Krug sued Praszker and the court ruled in his favor.   The chief issue on appeal was whether Praszker owed a duty to disclose to the buyer the existence of the third deed of trust or inform Krug of the impending escrow and sale.   We held that he did.  (Id., at p. 43, 269 Cal.Rptr. 228.)   After discussing the case law that recognizes “a fundamental duty on the part of a realtor to deal honestly and fairly with all parties in the sale transaction [citations]” (id., at p. 42, 269 Cal.Rptr. 228), we pointed out that “[t]he imposition of a duty on a realtor to disclose a known unrecorded lien interest is [also] supported by standards already existing in the industry.”  (Id., at p. 42, 269 Cal.Rptr. 228, citing provisions of the code of ethics of the National Association of Realtors.)   We emphasized that “[b]oth the policy of preventing future harm and considerations of moral blame compel the imposition of a duty on the part of a realtor never to allow a desire to consummate a deal or collect a commission to take precedence over his fundamental obligation of honesty, fairness and full disclosure toward all parties.”  (Id., at p. 43, 269 Cal.Rptr. 228.)

Although we explicitly found that Praszker had a duty of care and that the evidence supported the trial court's determination that the duty had been breached, we agreed with Praszker that “the trial court erred in failing to apportion the damages suffered by Krug to the extent by which they were proximately caused by his own negligence.”  (Krug v. Praszker, supra, 220 Cal.App.3d 35, 45, 269 Cal.Rptr. 228.)

As noted earlier, the trial court on remand simply filed an amended judgment reducing the dollar amount of the award.   Thus, our holding that Praszker's failure to disclose violated a real estate broker's duty of care is implicit in the amended judgment and remains intact.

 The public interest exception to the presumption that requests for stipulated reversal will be granted cannot be defined by formula, though it will more likely be present when the judgment in question involves important public rights, unfair, illegal or corrupt practices, or torts affecting a significant number of persons.   Whether stipulated reversal would deprive the public of an important benefit must in every case be determined “ ‘from a realistic assessment of all the pertinent circumstances.’ ”  (California Common Cause v. Duffy (1987) 200 Cal.App.3d 730, 745, 246 Cal.Rptr. 285.)

Civil judgments against state licensed professionals or tradespersons obtained upon grounds of “[d]ishonesty, fraud or gross negligence” (see, e.g., Bus. & Prof.Code, § 5100, subd. (c) [accountants] ), or failure to comply with certain contractual obligations (see, e.g., id., §§ 7113 [contractors] and 9993, subd. (h) [employment agencies] ), often provide a basis for license suspension or revocation.   Entry of a judgment in these cases thus carries a salutary effect which goes beyond the dispute between the parties and affects the public interest.   A reversal of such a judgment not due to legal error but solely to effectuate settlement between the parties might deprive the state and its regulatory boards of information necessary to protect the public against incompetent or unethical licensees.

Here, stipulated reversal of the judgment against Praszker would apparently interfere with the disciplinary scheme set forth in California's Real Estate Law.  Section 10177.5 of the Business and Professions Code (section 10177.5) states that “When a final judgment is obtained in a civil action against any real estate licensee upon grounds of fraud, misrepresentation, or deceit with reference to any transaction for which a license is required under this division, the commissioner may [after hearings] ․ suspend or revoke the license of such real estate licensee.”   “Deceit” is defined in the Civil Code as including “The suppression of a fact, by one who is bound to disclose it․”  (Civ.Code, § 1710, subd. (3).)  Misrepresentation may be intentional or negligent.  (1 Miller & Starr, Cal. Real Estate (2d ed. 1989) §§ 1:103, 1:104.)  “A negligent misrepresentation is a species of ‘actual fraud’ and a form of deceit.”  (Id., § 1.104, at p. 334.)

 One of the purposes of the Real Estate Law, of which that statute is a part, “is to insure, as far as possible, that real estate licensees will be honest and truthful in their dealings with members of the public.”   (State of California v. Superior Court (1984) 150 Cal.App.3d 848, 856, 197 Cal.Rptr. 914, (italics added), citing Brown v. Gordon (1966) 240 Cal.App.2d 659, 667, 49 Cal.Rptr. 901;  Buckley v. Savage (1960) 184 Cal.App.2d 18, 31–32, 7 Cal.Rptr. 328.)   Accordingly, the real estate commissioner may discipline a licensed broker for failure to disclose even if the broker was not intentionally fraudulent or dishonest (De St. Germain v. Watson (1950) 95 Cal.App.2d 862, 867, 214 P.2d 99), and it is immaterial that the broker received no advantage from his failure to disclose.  (Id., at p. 870, 214 P.2d 99.)   Praszker's breach of duty here falls within the type of conduct which could be grounds for disciplinary action.

Very recently this court (Division Three) held that under section 10177.5, “if the elements of fraud have been proved in the civil action, collateral estoppel principles bar the licensee from attempting to relitigate those facts” in disciplinary proceedings before a commissioner.  (California Real Estate Loans, Inc. v. Wallace (1993) 18 Cal.App.4th 1575, 1582, 23 Cal.Rptr.2d 462, citations omitted.)

While the subject transaction took place many years ago and we express no view as to whether Praszker's conduct in this case warrants the institution of disciplinary proceedings, it is clear that any judicial act which would annul or restrict the real estate commissioner's authority to regulate licensees would conflict with the public interest.   A reversal of the judgment against Praszker, stipulated or not, would effectively deprive the commissioner of the ability to review the case for possible disciplinary action under section 10177.5.   Moreover, it would be unconscionable to make it possible for a real estate broker who may have acted unethically to purchase immunity from one of the consequences of his impropriety.   Our conclusion is underscored by the fact that, unlike analogous statutes pertaining to professional licensees,¹ the Real Estate Law does not require licensed brokers or their insurers to notify the regulatory agency of the settlement of a claim for damages caused by the broker's fraud, deceit, negligence, incompetence or recklessness.

A reversal of this judgment would also pose the risk of misperception by the bar and the public.   Unlike vacatur, the analogous remedy allowed by some federal courts, “reversal” connotes the affirmative rejection of a judgment.   “To reverse a judgment, according to Webster's dictionary, means to overthrow it by a contrary decision, to make it void, to undo or annul it for error.”   (Atlantic Coast Line RailRoad Co. v. St. Joe Paper Co. (5th Cir.1954) 216 F.2d 832, 833.)

Here, a court-ordered reversal of the judgment could well be interpreted as a judicial nullification of our holding in Krug v. Praszker that Praszker violated his professional duty of care as a real estate broker.   Because of this common understanding of the effect of “reversal,” this danger cannot be eliminated by a provision in our order that the reversal “is pursuant to settlement and does not constitute either approval or rejection of the trial court's judgment,” as Neary allows.  (3 Cal.4th 273, 283, 10 Cal.Rptr.2d 859, 834 P.2d 119.)

Because reversal of the judgment would undercut the authority of a state agency to regulate and discipline real estate licensees, and because it would present the appearance of judicial eradication of an important prior published opinion of this court defining the duties of real estate brokers, we conclude that granting the parties' request would be contrary to the public interest and inappropriate in this case.

DISPOSITION

The motion for recall of remittitur is denied.

Rejecting the view that stipulated reversal demeans the judicial process,¹ Neary v. Regents of University of California (1992) 3 Cal.4th 273, 10 Cal.Rptr.2d 859, 834 P.2d 119, legitimates the practice on the ground it will facilitate settlements.²  However, Neary did not merely authorize stipulated reversal in appropriate circumstances, as the parties in that case had requested, but created a blanket presumption in its favor, which they did not seek.  (See Barnett, Making Decisions Disappear, supra, 26 Loyola L.A.L.Rev. 1031, 1061.)   That presumption is destined to plague the appellate courts of this state.

According to the Supreme Court, a strong presumption in favor of stipulated reversal relieves the parties of “the burden of showing that their stipulation should be granted because no countervailing factors are present, e.g., a contrary public interest.”  (Neary, supra, 3 Cal.4th at p. 284, 10 Cal.Rptr.2d 859, 834 P.2d 119.)   Because the parties do not have to submit “supporting declarations and documentary evidence” the appellate court is assertedly relieved of the responsibility “to fully consider these materials.”  (Ibid.)  “Under a presumption in favor of granting the parties' request for reversal, the court need not expend significant resources unless a nonparty comes forward and objects to the settlement for some reason or unless some problem is apparent in the record.”  (Ibid.)

The trouble with this theory is that it deprives the appellate courts of the ability to intelligently determine whether the public interest exception which Neary allows may apply, or whether there may be other “extraordinary circumstances” warranting denial.   As has been noted, Neary “overlooks the fact that requests for stipulated reversal do not arise in adversary proceedings such as American courts take for granted.   They are by nature collusive.   Hence the court cannot rely on the assumption that a problem will be ‘apparent in the record,’ or that an affected nonparty will get notice of the proceeding and thus be able to ‘come[ ] forward and object[ ].’  Rather the court of appeal will have to consider sua sponte, in inquisitorial fashion, the possible existence and interests of third parties who might be affected by the settlement.   American courts may not excel at this unfamiliar task.   Hence there will be a continuing risk of cutting off the rights of unconsidered third parties, with resulting problems of due process, as well as a continuing potential for compromise to the neutrality and reputation of the courts.”   (Barnett, Making Decisions Disappear, supra, 26 Loyola L.A.L.Rev. at pp. 1074–1075;  accord, Zeller, Avoiding Issue Preclusion by Settlement Conditioned upon the Vacatur of Entered Judgments, supra, 96 Yale L.J. at p. 879 [Stipulated reversal allows the parties to a dispute “to conspire against the interests of unrepresented future parties and the judicial system.   In a party initiated, party controlled procedural regime, such a device has enormous potential for abuse”];  Fisch, Rewriting History, supra, 76 Cornell L.Rev. at p. 621, fn. 165 [“it is rare that third parties who might benefit from the preclusive effect of a judgment will learn of the threat to the judgment in time to make their presence known to the court”];  Resnik, Judging Consent, 1987 U.Chi.Legal F. 43, 101 [“Absent the adaptation of some forms of continental procedure in which the court and its staff (rather than the litigants) develop information, judges are ill-equipped to do much other than nod when the litigants join together and seek court approval”].)   Because judges will ordinarily be unable to determine the nature and legality of compromises that result in joint requests for stipulated reversal, the consequences of the presumption established in Neary will inevitably include the unknowing judicial effectuation of some highly questionable private bargains.

It is illustrative that the reason we deny stipulated reversal in the present case was neither apparent in the record nor brought to our attention by any third party.   As Justice Smith points out, it is entirely by chance that this case was before us previously, that we issued a published opinion that we remembered, and that the substance of the prior opinion stimulated an independent inquiry.   But for those fortuitous circumstances, the presumption Neary establishes would almost certainly have led us to grant stipulated reversal in this case.   Had we done so, the parties would surreptitiously have thwarted a state regulatory scheme designed to protect the public.

By relieving counsel of the burden of showing that there is no public interest or “extraordinary circumstance” justifying denial of a request for stipulated reversal, and by declaring that the Courts of Appeal “need not expend significant resources” on these questions, Neary has placed the Courts of Appeal in a quandary:  we are obliged to ignore either the presumption or the risks it creates.

Neary suggests the risks are minor and worth taking on the curious ground that stipulated reversal is inconsequential.   According to Neary, stipulated reversal will create “no inference that the jury or trial court erred.   Whatever conclusions the public wishes to draw from the litigation can still be drawn after the reversal.”  (Neary, supra, 3 Cal.4th at p. 283, 10 Cal.Rptr.2d 859, 834 P.2d 119.)   If the inference that the reversed judgment was not wrong or ineffectual could not be drawn, or if stipulated reversal did not at least create some ambiguity about the validity or force of the judgment reversed, such relief would not be sought.   The most common reason parties seek vacatur, a similar remedy allowed in certain circumstances by some federal courts (see, e.g., Nestle Co. v. Chester's Market, Inc. (2d Cir.1985) 756 F.2d 280, 283–284),³ is to destroy a judgment's collateral estoppel effect.  (Fisch, Rewriting History, supra, 76 Cornell L.Rev. at p. 616.)   These efforts have created complex and as yet unresolved problems in those jurisdictions in which vacatur is available.  (Zeller, Avoiding Issue Preclusion by Settlement Conditioned Upon the Vacatur of Entered Judgments, supra, 96 Yale L.J. 860.)   Stipulated reversal, which indicates much more strongly than vacatur that the judgment has been affirmatively rejected, will surely be sought for this and perhaps an even greater array of dubious purposes.   The danger that stipulated reversal may be abused is therefore considerably greater than our Supreme Court acknowledges.

The danger cannot confidently be eliminated by a provision in the order that reversal “is pursuant to settlement and does not constitute either approval or rejection of the trial court's judgment,” as Neary allows.   (3 Cal.4th at p. 283, 10 Cal.Rptr.2d 859, 834 P.2d 119.)   Such a disclaimer does not clearly countermand the ordinary understanding of the word “reversal” and, in any case, is not required to be communicated to third parties and is not otherwise self-executing.   Few litigants will gratuitously reveal information suggesting that a bargained-for reversal may be inefficacious.   If stipulated reversal had been granted in this case, for example, it is unlikely the defendant real estate broker would have felt compelled by the disclaimer to inform the licensing agency of the judgment against him, because the disclaimer does not clearly impose the responsibility the settlement was apparently calculated to eliminate.   Moreover, if it be assumed the broker would inform the licensing agency of the judgment or the agency otherwise learned of it, he would doubtless emphasize that, though the appellate court may not have rejected the judgment neither did it approve it, and, in any event, the judgment was clearly “reversed.”   The effect to be given the reversed judgment would therefore present the licensing agency with a novel legal question.

Because I believe it is inimical to the judicial function for a judge to issue an order regarding a matter as to which he or she is uninformed, I will hereafter be unwilling to entertain requests for stipulated reversal unaccompanied by a declaration of counsel which, at a minimum, briefly describes the facts of the case and the competing legal claims and advises the court whether the case presents an appealable issue and is otherwise properly before it;  whether the judgment might give rise to collateral estoppel in a future action by or against third parties;  whether the judgment involves important public rights or unfair, illegal or corrupt practices, or torts affecting a significant number of persons, or otherwise effects the public or a significant number of persons not party to the litigation.

Neary debases the judicial coin with the currency of a false expediency.   Though the independent judicial inquiry Neary necessitates will increase rather than diminish the burdens on the appellate courts, I believe it would be a dereliction of judicial duty to do otherwise.

FOOTNOTES

1.   A few statutes require certain state licensing agencies to be informed by licensees or their insurers of settlement or arbitration awards on claims for damages caused by the licensee's “fraud, deceit, negligence, incompetency, or recklessness in practice” (Bus. & Prof.Code, §§ 5588, 5589 [architects];  see also id., §§ 801, 802 [health care providers].)   Such statutes complement related statutes requiring that the regulatory agency be directly notified by the trial court where such an unsettled claim results in a civil judgment against the licensee.  (Id., §§ 803, 5590.)

1.   A view powerfully advanced in Barnett, Making Decisions Disappear:  Depublication and Stipulated Reversal in the California Supreme Court (1993) 26 Loyola L.A.L.Rev. 1033 1057–1084 (Making Decisions Disappear);  see also Fisch, Rewriting History:  The Propriety of Eradicating Prior Decisional Law Through Settlement and Vacatur (1991) 76 Cornell L.Rev. 589 (Rewriting History);  Zeller, Avoiding Issue Preclusion by Settlement Conditioned Upon the Vacatur of Entered Judgments (1987) 96 Yale L.J. 860, 868;  Resnik, Finding the Factfinders, Chap. 15, in Verdict:  Assessing the Civil Jury System (Litan ed.) (Brookings Inst.1993) pp. 500–530.

2.   This rationale was recently deemed unpersuasive in Lucich v. City of Oakland (1993) 19 Cal.App.4th 494, 23 Cal.Rptr.2d 450, where the parties unsuccessfully sought to apply Neary to the judgments of appellate courts.  Lucich explains that the Court of Appeal “has established procedures for holding settlement conferences ․ in order to spare the parties and the public the costs of appellate proceedings.   [Citation.]  If the parties desire an impetus for settlement, they should avail themselves of that opportunity.   The procedure followed here, awaiting oral arguments on a fully briefed appeal and settling after submission and after a written decision is filed, [and then seeking dismissal of the appeal and decertification of the opinion] saves no one's time or money, a prime object of this court's Local Rule 3 [relating to settlement conferences].”  Id. at p. 501, 23 Cal.Rptr.2d 450.   The court states that the parties “impermissible motive” was “manipulation of the appellate function to allow litigants to test the judicial water to the fullest while preserving the option of avoiding the precedential effect of an appellate decision if that test proves foreboding.”  Id. at p. 502, 23 Cal.Rptr.2d 450.Exactly the same points can be made against permitting stipulated reversal of the judgments of trial courts, which have far more elaborate early settlement procedures than appellate courts and where pretrial settlement would result in far greater savings of judicial resources and public funds.   The reasoning of Neary cannot justifiably be limited to trial courts, though appellate courts will likely do so anyway in the interests of damage control, as was done in Lucich.

3.   Despite Nestle, many federal courts refuse to vacate judgments to facilitate negotiated dispositions (see, e.g., In re Memorial Hospital of Iowa, Inc. (7th Cir.1988) 862 F.2d 1299;  Clarendon, Ltd. v. Nu–West Industries, Inc. (3d Cir.1991) 936 F.2d 127;  In re United States (D.C.Cir.1991) 927 F.2d 626).   The propriety of granting such requests for vacatur is now before the United States Supreme Court in U.S. Philips Corp. v. Windmere Corp. (Fed.Cir.1992) 971 F.2d 728 certiorari granted sub nom. Izumi Seimitsu Kogyo Kabushiki Kaisha v. U.S. Philips Corp. (1993) 507 U.S. 907, [113 S.Ct. 1249, 122 L.Ed.2d 649].

SMITH, Associate Justice.

BENSON, J., concurs.