NEARY v. REGENTS OF UNIVERSITY OF CALIFORNIA (1991)

This joint application for stipulated reversal of a trial court judgment was filed by defendants and appellants Regents of the University of California, Charles A. Hjerpe, D.V.M., Ben B. Norman, D.V.M., and Richard H. McCapes, D.V.M. and by George Neary, plaintiff and cross-appellant.   We deny the application.

FACTUAL AND PROCEDURAL BACKGROUND

In a complaint filed in 1979 and amended in 1982, George Neary, a cattle rancher, alleged that state and federal agricultural agencies treated his herd of pregnant heifers with the insecticide Toxaphene after determining that they may have been exposed to the scabies mite.   According to the complaint, the improper application of this insecticide killed at least 95 heifers and more than 400 calves.

Neary and state agricultural officials then agreed to have the matter investigated by veterinarians from the University of California at Davis.   In March 1979, university veterinarians McCapes, Hjerpe, and Norman visited one of Neary's ranches.   Several months later, over Neary's objections, the veterinarians published their report on the matter through the university's Office of Public Affairs.   Neary alleged that the report, which was widely republished in the print and broadcast media, was libelous, as it falsely stated his cattle were killed as a result of his incompetence, not by Toxaphene poisoning.

After a trial lasting more than four months, the jury found defendants libeled Neary and awarded $7,000,000 in compensatory damages.   Defendants appealed and Neary cross-appealed.

In the present application (filed before any briefing on the merits of the cross-appeals), Defendants jointly request that we reverse the trial court judgment and remand for dismissal with prejudice.¹  The parties have advised the court that stipulated reversal is a condition precedent to their pending settlement of this litigation and that dismissal of the appeals will not suffice.

The condition that the judgment be reversed appears to have been imposed by defendant veterinarians.   The reason they are unwilling to accept dismissal of the appeal is stated by their counsel as follows:  “[R]eversal of the Superior Court's judgment is particularly important to the individual Appellants.   Because they view the jury's verdict as a determination that they, along with a dozen other University scientists, knowingly and deliberately participated in writing a false scientific report, they believe the verdict has severely blemished their professional reputations and, as a result, significantly impaired their ability to function as productive members of the scientific community ․ the individual veterinarians do not want the judgment hanging over their heads forever as a continual reminder of the emotional trauma caused by the trial and the verdict.   Unless the judgment is vacated, the veterinarians will not have achieved the peace they bargained for when they signed their settlement agreement.”

DISCUSSION

 Neither the case law the parties rely upon nor the public policy arguments they advance justify reversal of the judgment of a trial court simply because the parties to an appeal have made it a condition of settlement.

The Case Law

The parties contend that the appellate courts of this state have often reversed judgments upon the stipulation of the parties because of “post-judgment events” such as settlement.   However, as will be seen, in none of the cases that assertedly support this contention was stipulated reversal predicated simply on the desire of the parties to effectuate settlement.

In re Elise K. (1982) 33 Cal.3d 138, 187 Cal.Rptr. 483, 654 P.2d 253 was an appeal from a judgment terminating parental custody of a minor child under Civil Code section 232.   As a result of the trial court's order the child had been placed in foster care.   While the appeal was pending the child reached her majority and was therefore no longer adoptable.   The parties sought to bring evidence of these postjudgment circumstances to the attention of the Court of Appeal but that court “declined to give weight to the evidence.”  (Id., at p. 139, 187 Cal.Rptr. 483, 654 P.2d 253.)   After the Supreme Court granted a petition for hearing, the parties “offered a stipulation, requesting that the judgment herein be reversed and the cause remanded to the trial court for further proceedings ‘in light of subsequent material evidence concerning the adoptability of the subject minor.’ ”   (Ibid.)

In Estate of Davis (1936) 8 Cal.2d 11, 63 P.2d 827, the Supreme Court issued an order reversing the judgment of the trial court and remanded the case for “further proceedings.”   The parties thereafter stipulated that the decedent had died intestate as to her residuary estate and as to the allocation of the assets comprising that estate, which were the issues in dispute.   Accordingly, after recalling the remittitur, the Supreme Court did not simply reverse the judgment, as it had initially done, but additionally instructed the trial court to correct its decree of distribution in accordance with the stipulated findings of the parties, as the trial court would have done in any event.

In Lyon v. Aronson (1903) 140 Cal. 369, 73 P. 1131 the Supreme Court reversed the judgment based on an earlier stipulation by the parties that it do so if the court affirmed the order granting a new trial in a related case, as had been done.

In Courts v. Smart (1939) 33 Cal.App.2d 89, 91 P.2d 135, the last case cited by the parties, the court granted stipulated reversal of a portion of the judgment because “it appears from an examination of the record on appeal, including the transcript of the evidence, that legal grounds exist for the granting of such request.”  (Id., at p. 90, 91 P.2d 135.)   Thus, unlike the present case, the adverse parties agreed that the portion of the judgment in question was based on legal error and jointly made the necessary evidentiary showing.

In all of the cases the parties rely upon, and in similar cases (see, e.g., Paul v. Milk Depots, Inc. (1964) 62 Cal.2d 129, 134–135, 41 Cal.Rptr. 468, 396 P.2d 924, cf. General Petroleum Corp. v. Beilby (1931) 213 Cal. 601, 603–605, 2 P.2d 797), the stipulation of the parties was buttressed by a postjudgment development which the appellate court agreed provided a legal or factual justification for reversal of the judgment.   In no case was stipulated reversal based solely upon the need to effectuate the desires of the parties set forth in a settlement agreement.

Alert to the dearth of helpful case law, the parties place great weight on statements in two treatises to the effect that, “[i]f for some reason the losing party does not want an adverse judgment to remain in the trial court records (e.g., fear of collateral estoppel effect, or simply for emotional reasons ), the parties can stipulate to reversal (or modification) of the judgment by the appellate court as part of the settlement.”  (Eisenberg, Horvitz, & Weiner, California Practice Guide:  Civil Appeals & Writs (1990) § 6:121, p. 6–22, italics added.;   see also CEB, Cal.Civ.App.Pract., § 11.25, pp. 344–345.)   The treatises provide no authority for this proposition and none exists.   Indeed, the remarkable idea that “emotional reasons” alone may provide sufficient justification for stipulated reversal of a trial court judgment conflicts with the opinion most directly on point, In re Marriage of Shapiro (1974) 39 Cal.App.3d 460, 114 Cal.Rptr. 277.

In Shapiro the wife appealed from portions of an interlocutory judgment dividing the property of the parties' dissolved marriage.   While the appeal was pending the husband died and the wife entered into a settlement agreement relating to the property in question.   The settlement agreement required that the parties take steps to cause the judgment to be reversed and remanded and the judgment modified to accord with the settlement agreement.  (In re Marriage of Shapiro, supra, 39 Cal.App.3d at pp. 461–462, 114 Cal.Rptr. 277.)   In the joint application for stipulated reversal the wife stated that an appeal would be meritorious.   The respondent estate agreed the appeal presented substantial issues, but did not concede error.   The parties did not simply abandon the appeal because the wife would not enjoy the tax savings contemplated by the settlement unless the judgment was modified.  (Ibid.)

Like the parties in the present case, the parties in Shapiro argued that reversal was justified because the tentative settlement had rendered the case moot.   The court conceded that “there are certain situations where public policy considerations dictate a reversal in a ‘moot’ case, such as when a statute, held unconstitutional by a trial court, has been repealed, and the appellate court wishes to avoid any appearance of approving the trial court's judgment by dismissing the appeal.  [Citations.]” ²  (In re Marriage of Shapiro, supra, 39 Cal.App.3d at p. 464, 114 Cal.Rptr. 277.)   The court emphasized, however, that “[t]his case is not moot;  to the contrary, according to the parties, the case will become moot only if this court reverses the trial court judgment, thus permitting the settlement to take effect.  [Citation.]   Present mootness followed by a reversal is one thing;  future mootness based on a settlement which is conditioned on the reversal because the reversal itself is a source of funds, is something quite different.”  (In re Marriage of Shapiro, supra, 39 Cal.App.3d at p. 463, 114 Cal.Rptr. 277.)

 The Shapiro court also noted that an appellate court may properly reverse on stipulation and without briefing on the merits of the appeal only “after the court has decided, or had the opportunity to decide, the merits of the dispute [citations]” or “where the issue has been decided by another court or in a companion case.  [Citations.]”  (Ibid.)   As in Shapiro, we know nothing about the merits of the instant appeal, nor even the issues that will be presented.³  Also as in Shapiro, respondent will not concede that the appeal has any legal merit.   Moreover, the request to reverse is not really related to the merits of the appeal, but merely to the losing parties' dislike of the judgment.   In short, this case presents none of the circumstances in which stipulated reversal has been deemed warranted.

The Public Policy Considerations

Appellants rely very heavily on the strong public policy in favor of settlement.   The desirability of settlement derives primarily from the fact that it avoids the public and private expense of trial.   Thus it is the purpose of the policy to encourage early settlement.  (Joyce v. Black (1990) 217 Cal.App.3d 318, 323, 266 Cal.Rptr. 8;  Culbertson v. R.D. Werner Co., Inc. (1987) 190 Cal.App.3d 704, 711, 235 Cal.Rptr. 510 [the Legislature adopted Code of Civ.Proc. § 998 “to encourage early settlement of lawsuits to avoid the time delay and economic waste of trial ․”];  Roth v. Morton's Chefs Services, Inc. (1985) 173 Cal.App.3d 380, 385, 218 Cal.Rptr. 684;  Varwig v. Leider (1985) 171 Cal.App.3d 312, 315, 217 Cal.Rptr. 208;  Woodard v. Southern Cal. Permanente Medical Group (1985) 171 Cal.App.3d 656, 665–666, 217 Cal.Rptr. 514;  Phelps v. Kozakar (1983) 146 Cal.App.3d 1078, 1082, 194 Cal.Rptr. 872.)

 Commencement of trial and the rendering of judgment are significant milestones in the litigation process.   Statutes encouraging early settlement treat trial and judgment as bright lines marking the extent of their reach.   For example, Code of Civil Procedure section 998 encourages parties to accept reasonable pretrial settlement offers or face the risk of exposure for litigation costs.   However, offers under section 998 must be made and accepted before commencement of trial.  (Code Civ.Proc., § 998, subd. (b).)  Similarly, the good faith settlement procedures set forth in Code of Civil Procedure sections 877 and 877.6 were intended to encourage settlement by shielding settling joint tortfeasors from liability to non-settling parties for contribution and indemnity.  (See Tech–Bilt, Inc. v. Woodward–Clyde & Associates (1985) 38 Cal.3d 488, 494, 213 Cal.Rptr. 256, 698 P.2d 159.)   To qualify for treatment under these provisions, however, settlement must be reached before a verdict or judgment is rendered.  (Southern Cal. White Trucks v. Teresinski (1987) 190 Cal.App.3d 1393, 1407, 236 Cal.Rptr. 159.)   These statutes demonstrate that after trial commences and judgment is rendered the policy of encouraging settlement loses much of its force.

Here, during the twelve years since the complaint was filed, massive amounts of public and private resources were expended to finance the resolution of this dispute.   The trial, which was delayed by an interlocutory appeal, consumed more than four months of time, producing 63 volumes of reporter's transcripts comprising nearly 13,000 pages.   Given the extravagant expenditures of time and money that have already been made in this case, which dwarf those which will be required to maintain and decide the cross appeals, the policy in favor of encouraging settlement is no longer compelling.

In any case, facilitation of settlement is not the overriding judicial objective.   The power judges exercise is not defined or conferred by private agreement, as in alternative forms of dispute resolution, but by the constitution and laws of our state.   The duty of the judicial branch is not to satisfy the parties that appear before it, or even society at large, but to say what the law is and apply it in particular cases.   As the United States Supreme Court has pointed out in connection with consent decrees, in which the judicial role is relatively attenuated,⁴ “parties cannot, by giving each other consideration, purchase from a court” a result they mutually desire.  (System Federation v. Wright (1961) 364 U.S. 642, 651, 81 S.Ct. 368, 373, 5 L.Ed.2d 349;  Local Number 93, Int'l. Assn. of Firefighters v. Cleveland (1986) 478 U.S. 501, 525, 106 S.Ct. 3063, 3076, 92 L.Ed.2d 405.)

As imperfect as the process of trial may be, it is the way in which our society establishes legal truth.   Because it is an adjudicative and not simply a dispositional act, the reversal of a judgment not thought to be legally erroneous simply to effectuate settlement would trivialize the work of the trial courts and undermine the integrity of the entire judicial process.  (Cf., Bank of America Nat. Trust v. Hotel Rittenhouse (3d Cir.1986) 800 F.2d 339, 345) This must not be done.

DISPOSITION

The joint application for reversal is denied.

FOOTNOTES

1.   We were initially asked to dismiss the appeals and reverse with instructions.   However, after realizing dismissal would preclude us from reversing the judgment, the parties withdrew their request for dismissal of the appeals.

2.   However, where subsequent acts or events, such as settlement, mean there is no longer a justiciable controversy between the parties, the typical procedure is merely to dismiss the appeal.  (See, e.g., Leroy v. Bella Vista Investment Co. (1963) 222 Cal.App.2d 369, 377–379, 35 Cal.Rptr. 128.)

3.   Anticipating we might be unwilling to reverse the judgment, defendants request in the alternative that we “simply deny the parties' joint application without prejudice and give the [them] an opportunity to show that grounds exist for a stipulated reversal.”   We decline this invitation for several reasons.   First of all, plaintiff does not join in this idea and there is no reason to think he will stand by while defendants endeavor to persuade us the trial court committed legal error.   Secondly, there are no guidelines as to the nature of the showing that will warrant stipulated reversal or the extent to which it may differ from that which must conventionally be made by an appellant.   Moreover, without the benefit of an answering brief, evaluation of defendants' factual representations and legal arguments would be more difficult for the court than the ordinary judicial enterprise.   Finally, entertainment of such an abbreviated appeal would make this court a party to an obvious charade, since the request for reversal is genuinely unrelated to the merits of the appeal.

4.   See Resnick, Judging Consent, 1987, U.Chi Legal F. 43.

KLINE, Presiding Justice.

SMITH and BENSON, JJ., concur.