MOORE v. City and County of San Francisco, Intervener and Respondent. (1990)

Defendants and appellants Cairns & Brothers, Inc. and Christopher E. Coombs (collectively Cairns) appeal from various orders and judgments the effect of which are to (1) enforce a settlement agreement in favor of plaintiffs-respondents William and Benita Moore against Cairns, and (2) determine that a second and subsequent settlement between plaintiffs and defendants-respondents Lera Development Co. Inc. et al. (Lera defendants) was in good faith.

For reasons which follow, we will decide that the judgment against Cairns is not supportable but that the order determining the Lera settlement to be in good faith is free from error.

BACKGROUND

This case arises from an action for personal injury and loss of consortium brought by William Moore and his wife Benita.   Moore, a fire chief for the City and County of San Francisco (city), suffered severe head injuries when he fell through an open stud wall to the story below while fighting a fire in a vacant building on Mission Street.   The helmet he was wearing, manufactured by Cairns, reportedly came off his head during the fall.   Plaintiffs sued the Lera defendants, who owned the building, for negligence and failure to warn of a dangerous condition.   They sued Cairns on theories of negligence, breach of warranty and strict liability in the manufacture and design of the helmet.   The city filed a complaint in an intervention to recoup approximately $229,000 it paid plaintiff in workers' compensation, medical and disability benefits.

Five judicially supervised settlement conferences were held during the spring of 1988 ¹ in anticipation of an upcoming trial date of June 6.   No headway was made until the last of the five conferences, held on May 31.   At that time Cairns' attorney, Marvin Jacobs, indicated a desire to participate in settlement negotiations.   He gave Lera's attorney, Mr. McKinney, authority to include $500,000 to be contributed by his client toward a total settlement package.   However, because of Cairns' concern with the adverse effect on its market share should such participation become known, both the fact and the amount of Cairns' participation were to remain confidential.   McKinney agreed to act as a conduit for Cairns and to negotiate with plaintiffs on behalf of all the defendants, while preserving the confidentiality of Cairns' participation.

The settlement conference was scheduled for 4 p.m. but did not get under way until 4:20 p.m. due to other matters before Judge Raymond D. Williamson.   At 4:25 p.m. all defendants conveyed a comprehensive structured settlement offer to Judge Williamson in chambers.   At 4:45 p.m., Judge Williamson relayed a counter proposal from plaintiffs to defendants' attorneys.   At 4:55 p.m. defendants' attorneys conveyed to the judge a new counteroffer.   The proposal consisted of $1.5 million in cash to Mr. Moore, $75,000 per year for life guaranteed for 20 years, and lump sum payments in increasing amounts every five years.   Mrs. Moore was offered $100,000 cash plus $20,000 per year for life with a 10–year guaranty.

At 5:15 p.m., Mr. Adler announced that his clients had accepted the financial terms of the offer.²  While plaintiffs accepted the principle that “[t]he participation, if any, of [the Cairns defendants] would not be disclosed to plaintiffs or their attorneys and such participation, if any, would be held in confidence ․,” Adler insisted on seeing the language of the proposed confidentiality clause;  it was agreed that alternative confidentiality clauses would be drafted overnight and discussed the following morning.   The parties attempted to find the court reporter to put the terms of the settlement on the record, but she had gone home.   The settlement conference was adjourned at about 5:30 p.m., although Adler and the city's attorney remained with the judge until 6:15 p.m., working out a compromise of the city's compensation lien.

Unbeknownst to the participants at the settlement conference, Mr. Moore had a seizure and died that afternoon in the midst of the negotiations.   Paramedics arriving at the Moore home shortly before 4 p.m. found him cyanotic with no pulse, blood pressure or respiration.   Resuscitation efforts at Novato Community Hospital undertaken between 4:25 and 4:47 p.m. were unsuccessful and Mr. Moore died at 4:50 p.m., twenty-five minutes before Adler announced that plaintiffs had accepted defendants' last offer.

The next day, June 1, the court announced the death of Mr. Moore and invited the parties to state their positions on the record.   Mr. Adler stated that he felt the parties had reached a binding settlement and recited its terms;  he also indicated he would seek to enforce the agreement by moving that it be reduced to a judgment under Code of Civil Procedure section 664.6 (hereinafter section 664.6).   Cairns' attorney, Mr. Jacobs, contended that “as of this morning, we still don't have an agreement” due to the failure of the parties to reach an accord on the terms of confidentiality.   Both defendants' counsel indicated they wanted to discuss the situation with their respective clients.

On June 8, plaintiffs filed a motion for entry of judgment under section 664.6.   Both Cairns and the Lera defendants initially filed opposition.   On June 23, the day of the hearing, attorneys for plaintiffs and the Lera defendants announced they had reached a new settlement amongst themselves (second settlement).   The terms included a $1.6 million payment to Mr. Moore's widow and periodic payments over an extended period to his two surviving children.   The court requested that any motion for a good faith determination of the settlement be made in writing, and continued the motion to enforce the old settlement until the date of the hearing on the good faith motion.   In a subsequent letter to the court, Adler stated that the present cash value of the original settlement was approximately $2.62 million whereas the cash value of the second settlement (with the Lera defendants only) was $1.85 million, leaving a “balance due on the original settlement” of some $785,685.

As a result of this scenario, two motions were simultaneously heard before the court:  (1) to determine that the second settlement between plaintiffs and Lera was in good faith, and (2) to enforce the original settlement against Cairns alone.   By minute order dated July 19, the court granted both motions and denied Cairns' request for a continuance of the good faith motion.   A judgment for $1.6 million plus structured payments mirroring the original May 31 settlement was entered in favor of “William Moore and Benita Moore” against Cairns alone.   Subsequently, an amended judgment was entered, reciting that the settlement by the Lera defendants had “partially satisfied” the judgment against Cairns, such that the remaining judgment “shall be for the sum of $779,590.00.”

Cairns' subsequent motions to vacate the good faith settlement determination and the judgment enforcing the May 31 settlement were both denied.   Cairns appeals from the good faith order, the judgments entered against it, and the denial of its postjudgment motions.

APPEAL

Cairns' extensive opening and reply briefs advance a host of alternative grounds for overturning the judgment enforcing the May 31 settlement.   For the reasons below, we are satisfied that at least two of these grounds require reversal and therefore do not reach the others.

I

The Absence of A Settlement On the Record

 Section 664.6 provides:  “If parties to pending litigation stipulate, in writing 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.”  (Emphasis added.)   There is no claim that the settlement which the trial court purported to enforce was in writing.   Nor was it entered in the court's minutes or transcribed by a court reporter.   A threshold question for our determination, therefore, is whether an alleged settlement which lacks all three of the foregoing attributes can be enforced by motion under section 664.6.   We hold that it cannot.

Section 664.6 was enacted in 1981.   Subsequent cases have upheld a court's power to enter judgment under this section where the terms of the settlement are placed on the record at a judicially supervised settlement conference.   (Casa de Valley View Owner's Assn. v. Stevenson (1985) 167 Cal.App.3d 1182, 1189–1190, 213 Cal.Rptr. 790;  Gorman v. Holte (1985) 164 Cal.App.3d 984, 989–990, 211 Cal.Rptr. 34.)   However, our courts have taken a strict construction approach to the language of section 664.6 to ensure that its requirements have been satisfied.   Thus, stipulations for settlement taken before a court reporter during a deposition, even though reduced to writing afterwards, have been deemed insufficient to constitute either a writing or a stipulation “before the court” under this section.  (City of Fresno v. Maroot (1987) 189 Cal.App.3d 755, 762, 234 Cal.Rptr. 353;  Datatronic Systems Corp. v. Speron, Inc. (1986) 176 Cal.App.3d 1168, 1173–1174, 222 Cal.Rptr. 658.)   As stated in City of Fresno, supra, “section 664.6 is an expedient and cost effective means of enforcing a settlement agreement․  This means of enforcing a settlement, however, should only be utilized when the circumstances in which the settlement agreement was reached, or the record of the settlement, minimizes the possibility of conflicting interpretations.”   (189 Cal.App.3d at p. 762, 234 Cal.Rptr. 353.)   In Datatronic Systems, supra, Justice Arguelles noted that cases decided before the enactment of section 664.6 evince a “reluctance to enforce a judgment in the absence of an oral agreement stated on the record at a settlement conference or some other judicially supervised proceeding.”  (176 Cal.App.3d at p. 1173, 222 Cal.Rptr. 658, emphasis added.)   He continued:  “This theme, which is reinforced by the several cases decided after the effective date of the statute in which oral stipulations made on the record at a judicially supervised settlement conference were upheld, compels us to conclude that an oral stipulation made before the court must be just that:  a statement made on the record at a judicially supervised proceeding.”  (Ibid., emphasis added.)

Although they had no occasion to address the precise issue now before us, we find the reasoning of Datatronic Systems and City of Fresno persuasive.   In order to constitute a “stipulation ․ before the court” enforceable by motion under section 664.6, a settlement agreement must be either entered in the minutes by the clerk or placed on the record at a judicially supervised proceeding.³  A contrary ruling would, in our view, leave too much room for conflicting interpretations of the existence and terms of the alleged settlement.⁴

The present case is illustrative:  Confidentiality was undeniably an integral part of Cairns' consent to participate in the settlement at bar.   While not objecting in principle, plaintiffs' attorney, Mr. Adler, demanded to know the wording of the proposed confidentiality agreement.   In the words of Lera's counsel, “when we left here last night there was a strong question remaining concerning the terms of that confidentiality agreement both in Mr. Jacobs' mind and in Mr. Adler's mind.   And those were to be reviewed and an attempt to agree upon those reached this morning.”   Following the announcement of Mr. Moore's untimely death, Adler insisted that a full and complete settlement had been reached while Jacobs claimed that the all-important confidentiality issue had never been resolved.   The problem was further compounded by the fact that the ultimate judgment entered in this case ordered Cairns to pay $779,590 or $279,590 more than the maximum amount to which it committed itself at the settlement conference.   Unless all sides manifest their willingness to be bound by and recite the terms of the settlement in the solemnity of a formal judicial setting, the summary procedure envisioned by section 664.6 should not be available to a party seeking to convert an alleged settlement into a judgment.

Because the alleged agreement was not reduced to writing, entered in the minutes, or placed on the record before the court ⁵ the requirements of section 664.6 were not met.   Consequently, the court erred in granting a motion to enforce the settlement under that section.

II

Revocation by the Death of Mr. Moore

Medical records show that ambulance workers arriving at the Moore residence at 3:44 p.m. found Mr. Moore in full cardiopulmonary arrest and showing no vital signs.   Mr. Moore died at 4:50 p.m.   As indicated previously, the settlement conference did not begin until after Mr. Moore suffered the fatal seizure;  his death occurred prior to plaintiffs' acceptance of defendant's final offer.

“As a general proposition the attorney-client relationship, insofar as it concerns the authority of the attorney to bind his client by agreement or stipulation, is governed by the principles of agency.”  (Blanton v. Womancare, Inc. (1985) 38 Cal.3d 396, 403, 212 Cal.Rptr. 151, 696 P.2d 645.)   Civil Code section 2356 (hereinafter section 2356), subdivision (a) provides that “Unless the power of an agent is coupled with an interest in the subject of the agency, it is terminated by any of the following:  ․ [¶] (2) The death of the principal.  [¶] (3) The incapacity of the principal to contract.”  (Emphasis added.)

 It has long been the law that the death of either the principal or the agent terminates the agency.  “ ‘[T]he agent can no longer act after his own death, nor can a live agent act for a non-existent principal.   Authority is the power to act for the principal and subject to the control of another.   If the other dies, no one can act for his benefit or be subject to his control․  Death makes ineffective specified directions given to the agent.’ ”  (Charles B. Webster Real Estate v. Rickard (1971) 21 Cal.App.3d 612, 617, 98 Cal.Rptr. 559;  accord, 2 Witkin, Summary of Cal.Law (9th ed. 1987) Agency and Employment, § 155, p. 148.)

 Pursuant to this doctrine, California cases consistently hold that the death of a client terminates the authority of his attorney to act on his behalf.  (Herring v. Peterson (1981) 116 Cal.App.3d 608, 612, 172 Cal.Rptr. 240;  Smith v. Bear Valley etc. Co. (1945) 26 Cal.2d 590, 601, 160 P.2d 1;  Swartfager v. Wells (1942) 53 Cal.App.2d 522, 528, 128 P.2d 128;  Deiter v. Kiser (1910) 158 Cal. 259, 262, 110 P. 921.)  “After the death of the client, his attorney therefore becomes a stranger to the proceedings.”   (Swartfager v. Wells, supra, 53 Cal.App.2d at p. 528, 128 P.2d 128.)

 Plaintiffs suggest that the court's order enforcing the settlement contained an “implied finding” that Moore's death did not occur until after there had been a completed agreement.   However, there is an utter dearth of evidence to support such a finding.   Both the death certificate and hospital records show Mr. Moore as having expired at 4:50 p.m.   Yet Mr. Wells' handwritten notations recording the events as they were transpiring (see fn. 2, ante ) disclose that Mr. Adler's announcement accepting defendant's proposal did not occur until 5:15 p.m.   There was no competent evidence which contradicted this sequence of events.   Moreover, plaintiffs made no showing at all to rebut the evidence that Mr. Moore was totally incapacitated as the result of his seizure by 4 p.m., well before the settlement conference even got started.   Such incapacity terminated the agency under section 2356, subdivision (a)(3).

Plaintiffs also claim to fall within an “exception” to the rule that the authority of the attorney terminates with his client's death where the attorney has entered into a “special contract of employment, such as a specific contract to conduct a suit to final judgment, or some agreement on a fee for the entire case.”  (Estate of Mallory (1929) 99 Cal.App. 96, 104, 278 P. 488.)   They assert Mr. Adler had such authority because he took the case on a contingent fee.

We do not find Mallory persuasive authority for the proposition cited.   First, the decision, which is 60 years old, cites no California precedent for this so-called “exception.”

Second, Mallory did not concern the enforceability of a contract made by an agent for a deceased principal with a third party, but rather involved a dispute between an attorney who had been employed by the deceased and his estate.   The attorney's claim was resolvable on the basis of estoppel and ratification, since the court found “the estate benefited very materially through the efforts of [the attorney] and the fee provided for in the contract is neither unreasonable nor unfair.”  (Estate of Mallory, supra, 99 Cal.App. at p. 104, 278 P. 488;  see Alvarado Community Hospital v. Superior Court (1985) 173 Cal.App.3d 476, 481, 219 Cal.Rptr. 52.)   Thus, the “exception” carved by Mallory was mere dictum.⁶

Finally, the Mallory dictum implicitly relies on the theory that a contract for a fixed fee based on the outcome of the case constitutes “the power of an agent is coupled with an interest” which would prevent the revocability of the agency.  (§ 2356, subd. (a);  see Frink v. Roe (1886) 70 Cal. 296, 309, 11 P. 820 [“The death of the principal revokes a power to the agent by operation of law, except where coupled with an interest.”].)   However, a host of later authorities squarely hold that a contingent fee contract, even where the client purports to assign a portion of the proceeds to the attorney, does not confer upon the attorney a power coupled with an interest such as would impair the revocability of the attorney's authority.  (O'Connell v. Superior Court (1935) 2 Cal.2d 418, 423–424, 41 P.2d 334;  Isrin v. Superior Court (1965) 63 Cal.2d 153, 160–161, 45 Cal.Rptr. 320, 403 P.2d 728;  Bandy v. Mt. Diablo Unified Sch. Dist. (1976) 56 Cal.App.3d 230, 235, 126 Cal.Rptr. 890;  1 Witkin, Cal. Procedure (3d ed. 1985) Attorneys, § 83, p. 102.)

 Plaintiffs also claim that the settlement is enforceable under subdivision (b) of section 2356, which states in pertinent part, “Notwithstanding subdivision (a), any bona fide transaction entered into with such agent by any person acting without actual knowledge of such revocation, death, or incapacity shall be binding upon the principal, his or her heirs, devisees, legatees, and other successors in interest.”  (Emphasis added.)   The obvious problem with this argument is that the cited section only confers the power to enforce the contract upon third parties negotiating in good faith with the agent.   No reciprocal right is conferred upon the principal or his heirs to bind the third party.   The legislative history of section 2356 compels the inference that this omission was not accidental.

As originally enacted in 1872, subdivision (b) stated that an agency was terminated “as to every person having notice thereof” by revocation by the principal or his death or incapacity.   Thus, the statute impliedly made the contract enforceable by either party who acted without notice of the termination of the agent's authority.   In 1943, however, the statute was changed to bind only the principal and his successors as to transactions entered into by third parties acting without knowledge of the terminating event.  (Historical Note, 10A West's Ann.Civ.Code (1985 ed.) § 2356, pp. 686–687.)   The change is supported by sound policy reasons.   While the principal's estate or heirs should not be permitted to repudiate a transaction entered into by a third party negotiating in good faith while the agent has apparent authority to act on the principal's behalf, there is no similarly compelling justification for binding a third party to a contract entered into after the agent has been stripped of his authority by operation of law.

Plaintiffs argue that the statute must be read to confer reciprocal enforcement rights in order to preserve the “basic rule” of “mutuality of obligation.”

This argument misconstrues the mutuality requirement.   The essence of the doctrine is to ensure that there be consideration, i.e., that the promise undertaken not be illusory.  “Whether these problems are couched in terms of mutuality of obligation or the illusory nature of a promise, the underlying issue is the same—consideration.”  (Mattei v. Hopper (1958) 51 Cal.2d 119, 122, 330 P.2d 625.)   As the Restatement Second of Contracts states, “[i]f the requirement of consideration is met, there is no additional requirement” that there be “mutuality of obligation.”  (Rest.2d Contracts, § 79, at p. 200.)   And while section 2356 makes the contract entered into after the death of the principal voidable at the third party's option, that does not deprive the contract of consideration.  “The fact that a rule of law renders a promise voidable or unenforceable does not prevent it from being consideration. ”  (Rest.2d Contracts, § 78, at p. 198, emphasis added.)   Section 2356 does not eliminate the requirement of bargained-for consideration—it simply permits the entire transaction to be voided at the option of one party.   This section therefore does not violate “mutuality of obligation.”

 Plaintiffs' “mutuality” argument would also force us to rewrite the statute in a manner which varies from the plain meaning of the words used.   It is a cardinal rule that the courts may not depart from the plain meaning of a statute unless a contrary interpretation unmistakably appears to be the intent of the Legislature.  (Lamberton v. Rhodes–Jamieson (1988) 199 Cal.App.3d 748, 754, 245 Cal.Rptr. 162.)   The clear wording of section 2356, subdivision (b) allows for enforcement of transaction only by the party negotiating in good faith with the agent, not by the principal or his successors.   Since the 1943 amendment specifically changed the section so as to confer unilateral rather than reciprocal enforcement rights, both the common sense meaning of the language and the clear expression of legislative intent must be respected.  (See In re Rojas (1979) 23 Cal.3d 152, 155, 151 Cal.Rptr. 649, 588 P.2d 789;  Hejmadi v. AMFAC, Inc. (1988) 202 Cal.App.3d 525, 544, 249 Cal.Rptr. 5.)

 As a final independent ground for our decision, we also note that the settlement was void by application of the rule of established contract law that the death or incapacity of the offeree terminates a revocable offer.   (Estate of Watts (1984) 162 Cal.App.3d 1160, 1163, 208 Cal.Rptr. 846;  1 Witkin, Summary of Cal. Law (9th ed. 1987) Contracts, § 165, pp. 183–184;  Rest.2d Contracts, § 48, at p. 126.)   In Watts, the court held that defendant's statutory offer to compromise pursuant to Code of Civil Procedure section 998 was revoked as a matter of law by plaintiff's death, notwithstanding acceptance of the offer by plaintiff's administrators within the statutory 30–day time period.   The court stated that under elementary contract principles, the power of acceptance is purely personal to the offeree and is not transferable to his heirs or estate.  “Thus, unless by the terms of the offer the personal representative had been made an additional offeree, the offeree's death renders impossible the acceptance of the offer and the formation of a contract.”  (Id., at p. 1164, 208 Cal.Rptr. 846.)

Plaintiffs remind us that Watts is not necessarily binding on this court and suggest that it is an aberrant opinion.   We do not agree.   The case applies settled and fundamental principles of contract law.   It constitutes no departure from sound precedent.

From the foregoing it is evident that Mr. Moore's incapacity and death terminated Mr. Adler's power to accept defendants' offer on his behalf and prevented the formation of a binding contract.   Since compromise agreements are governed by the same principles as contracts generally (Varwig v. Leider (1985) 171 Cal.App.3d 312, 316, 217 Cal.Rptr. 208;  Burbank Studios v. Workers' Comp. Appeals Bd. (1982) 134 Cal.App.3d 929, 184 Cal.Rptr. 879), the court erred in enforcing the settlement.

III

The Order Determining Good Faith Settlement

After the death of Mr. Moore and prior to the resolution of plaintiffs' motion to enforce the May 31 settlement, the Lera defendants by themselves entered into a new structured settlement agreement with Moore's widow and children, having a present cash value of $1.8 million.⁷

Cairns filed opposition to the motion based on insufficient notice (11 days rather than the 20 days provided for in Code of Civil Procedure section 877.6) and the lack of opportunity to conduct discovery regarding the new settlement.   Defendants participated at the hearing on July 11, argued against the motion and moved for a continuance to conduct further discovery.   The court approved the settlement and denied the motion for continuance.   A subsequent motion to vacate the good faith determination was also denied.

 Cairns now challenges the propriety of the order approving the Lera settlement.   Its primary argument is that the Lera defendants breached their fiduciary obligation to them as codefendants and engaged in collusion with plaintiffs by entering into a “sweetheart” deal which reduced Lera's obligation under the first settlement while simultaneously increasing Cairns' liability to plaintiffs by $229,000 more than it had originally agreed to pay.

The problem with this argument is that it is based on the assumption that the May 31 settlement would be enforced against Cairns.   However, at the time the new settlement was entered into neither party knew how Judge Williamson would rule on the 664.6 motion.   Thus, the Lera defendants entered into the settlement risking the possibility that Cairns would be totally freed from any obligation under the original settlement.  (In fact, our decision here accomplishes the same result.)   Cairns does not claim that the settlement does not constitute a fair assessment of Lera's proportionate liability in the case.   Cairns' twin claims of collusion and lack of good faith must fail because they are based upon an unjustified belief that the Lera defendants could foresee how Judge Williamson would rule on the 664.6 motion.

 Next Cairns asserts that the failure to apportion the settlement proceeds between economic and noneconomic damages renders the settlement defective.   The issue will become important, they claim, in determining the amount of offset Cairns will be entitled to in the event of a subsequent judgment against it in a wrongful death action by the heirs.   The argument is apparently based on the applicability of Proposition 51 (Civ.Code, § 1431.2) which specifies that the liability of codefendants for noneconomic damages shall be several and not joint.

Cairns cites no authority for the proposition that such an apportionment is an essential prerequisite of a good faith settlement determination.   In the lone case it cites, River Garden Farms, Inc. v. Superior Court (1972) 26 Cal.App.3d 986, 103 Cal.Rptr. 498, the bulk of a settlement was lopsidedly allocated to a wrongful death claim thereby leaving the nonsettling codefendant exposed to a huge potential judgment on related personal injury claims.   (Id., at pp. 991–992, 998, 103 Cal.Rptr. 498.)   By contrast, the parties here declined to make an allocation of the proceeds, thereby leaving the issue open for future judicial resolution.   Because it will not be precluded from litigating the apportionment question in the future, Cairns cannot, in all candor, claim to have been prejudiced by the settlement agreement.

Finally, Cairns urges the order should be reversed because it was entitled to 20 days' notice of the motion and should have been granted a continuance to conduct discovery.

 Cairns does not argue that the 20–day notice provision in Code of Civil Procedure section 877.6 is jurisdictional and makes no attempt to show prejudice, except to argue that it was prevented from “adducing evidence of the ‘present value’ of the settlements.”   The record shows, however, that shortly after the hearing on the good faith settlement, defendants submitted a letter informing the court that the annuities purchased to carry out the settlement had cost precisely $126,095, making the total cash value of the settlement $1,841,095.   Thus, prior to the rendition of the formal order approving the settlement, any uncertainty as to the present value of the settlement was laid to rest.   Cairns has not shown that the court's failure to allow more time to hear the motion resulted in prejudicial error (Cal.Const., art. VI, § 13;  Brokopp v. Ford Motor Co. (1977) 71 Cal.App.3d 841, 853–854, 139 Cal.Rptr. 888), and its appearance and argument at the hearing may also be deemed a waiver of any notice deficiencies.  (See Rankin v. Curtis (1986) 183 Cal.App.3d 939, 944–945, fn. 9, 228 Cal.Rptr. 753.)   The order determining good faith settlement may not be disturbed.

DISPOSITION

The judgment filed August 5, 1988, and the amended judgment filed September 7, 1988, are reversed.   The order determining good faith settlement and the order denying motion to vacate order determining good faith settlement are affirmed.   The Lera defendants shall recover costs on appeal.   The remaining parties shall each bear their own costs.

FOOTNOTES

1.   All further calendar dates refer to the year 1988.

2.   The above time sequence, the importance of which will soon become apparent, was set forth in the declaration of Kenneth H. Wells, an expert in structured settlements retained by the Lera defendants who was present throughout.   In accordance with his custom and practice, Wells kept records of the time, date and details of all settlement proposals.   Mr. Wells' handwritten notes, which corroborated his recitation, were attached to his declaration.

3.   We are aware that in Richardson v. Richardson (1986) 180 Cal.App.3d 91, 225 Cal.Rptr. 370, the court affirmed a judgment under section 664.6 based on a settlement which was apparently reached in chambers.   However, the appellant never contended that the absence of a settlement on the record was error.   Consequently, the court had no occasion to address the issue.

4.   In their petition for rehearing, plaintiffs point out that settlement conferences are frequently held after normal working hours or at other times when a court reporter is not available.   They contend that the rule we establish here would allow parties entering into a settlement to escape the consequences of their actions by the mere happenstance that the court could not locate a reporter to record the agreement.This assertion ignores the fact that section 664.6 also authorizes the enforcement of settlements “in writing.”   Judges sometimes do not have court reporters but they never lack paper and pens.   All the court need do to satisfy the requirements of the statute in a situation where the reporter is absent would be to have the material terms of the settlement entered in the clerk's minutes or to write them down on paper and have the parties and attorneys affix their signatures.

5.   Plaintiffs' claim that the settlement was placed on the record by Mr. Adler's recitation of such terms the day after the settlement conference, is unimpressive.   By that time, the parties were in disagreement that a settlement had been reached at all.   Adler's self-serving remarks the day after the event surely did not qualify as a “stipulation” by the “parties” as required by section 664.6.

6.   The dictum was repeated unquestioningly without discussion in Estate of Lanza (1964) 229 Cal.App.2d 720, 40 Cal.Rptr. 528.   After citing Mallory, however, the court merely found it not applicable and moved on.  (Id., at p. 724, 40 Cal.Rptr. 528.)  Lanza therefore cannot be considered as valid authority for a “Mallory rule.”

7.   The settlement called for a cash payment to Benita Moore of $1,715,000.   The Lera defendants also agreed to purchase annuities for the Moore children which would provide annuity payments as follows:  to Heidi and Brian Moore, $25,000 in 1993, $50,000 in 1998, $75,000 in 2003 and $100,000 in 2008.   To Brian Moore additional payments of $10,000 in 1990, $1,000 per month from 1990 to 1994, and an additional annuity on his 25th birthday in 1997.

SMITH, Associate Justice.

KLINE, P.J., and BENSON, J., concur.