Filed 6/2/14 Freis v. Scarvaci CA4/1
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COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
JOHN C. FREIS, D064667
Plaintiff and Respondent,
v. (Super. Ct. No. 37-2010-00093904-
CU-OR-NC)
ANGELYN SCARVACI,
Defendant and Appellant.
APPEAL from a judgment of the Superior Court of San Diego County, Timothy
M. Casserly, Judge. Reversed and remanded with directions.
Robert N. Hocker for Defendant and Appellant.
Law Office of Philip H. Dyson and Philip H. Dyson for Plaintiff and Respondent.
Angelyn Scarvaci appeals from a judgment enforcing a settlement she entered into
with John C. Freis in his lawsuit seeking an order requiring Scarvaci to cooperate in
paving a dirt driveway that passes over Scarvaci's real property to Freis's house. We
conclude that the trial court erred in granting the motion to enforce the settlement because
it improperly added terms to the settlement agreement to which Scarvaci did not agree.
We further conclude that the current situation triggers a provision in the settlement
agreement nullifying the settlement and reactivating the case. Accordingly, we reverse
the judgment and remand to the trial court with directions to take the case off the
dismissal track and reactivate the litigation.
I
FACTUAL AND PROCEDURAL BACKGROUND
Freis owns a home in Rancho Santa Fe. The access to Freis's property is over a
dirt driveway that passes through real property owned by Scarvaci. Freis has an
easement allowing him to access his property using the driveway.
A dispute arose when Freis wished to pave the dirt driveway, but Scarvaci
opposed the idea. The driveway also serves as a horse trail controlled by the Rancho
Santa Fe Association (the Association), and the dispute over paving the driveway is
related to whether it is safe and appropriate to pave a horse trail.
Freis filed this lawsuit against Scarvaci in June 2010 alleging various causes of
action, including injunctive and declaratory relief regarding the paving of the driveway.
The parties entered into a settlement agreement in July 2012. As the parties
recognized in the settlement agreement, pursuant to the Rancho Santa Fe covenant, the
Association "has ultimate authority over what can be done in the Easement." The parties
therefore agreed to apply to the Association to determine whether the driveway should be
paved. In the settlement agreement, Scarvaci specifically agreed to sign the application
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to submit to the Association. Paragraph 4 of the settlement agreement states in relevant
part:
"The parties will submit the issue of paving the Easement to the
[Association or its subordinate entities] for determination of what can be
done regarding paving and maintenance on the Easement. Ms. Scarvaci
will sign the application to the Association for building/paving the
Easement, and her signature on this Settlement Agreement can be presented
to the Association as if she signed the application (that application is
attached hereto as Exhibit 'B') . . . ."
The application to the Association, which was attached to the settlement
agreement as exhibit B (the Application), consisted of a construction permit application
by John and Beverly Freis1 containing a contractor's drawing showing the location and
dimensions of the paved road and describing the following scope of work:
"1. Regrade existing direct road and compact
"2. Apply soil sterilant
"3. Construct a 12' x 836' road with 3 hot asphalt — roll/compact
"4. A special 3/4" asphalt aggregate mix will be used to provide a more
'horse friendly' surface
"5. Install a 'driveable 4' hand asphalt berm on northwest side of road to
channel water drainage
"6. Construct an asphalt 'spillway' at drainage inlet
"7. Scope of work limited to confines of easement . . . ."
1 Beverly Freis is John Freis's ex-wife and a current owner of Freis's real property.
Although not a plaintiff in the litigation, Beverly Freis was a party to the settlement
agreement and submitted a declaration in support of the motion to enforce the settlement
agreement.
3
The settlement agreement further provided that "[t]he final decision of the
[Association] regarding the Easement will be respected by Plaintiff and Defendant and
followed by them."
In the settlement agreement, the parties agreed that the trial court would retain
jurisdiction to enforcement the agreement, and that in any proceeding brought to enforce
the agreement, the prevailing party would be entitled to an award of reasonable attorney
fees.
According to the settlement agreement, the case would be put on a 45-day
dismissal track and "[t]he action will be taken off the dismissal track and reactivated if
the [Association] decides against approving the building permit for the paving of the
driveway over the Easement because the Association determines that . . . Scarvaci, as one
owner of the Easement, did not consent to Freis's application to pave the Easement."2
Scarvaci complied with the settlement agreement by signing the Application to the
Association. However, according to declarations filed by Beverly Freis and by Freis's
attorney, the Association reviewed the Application and required more specificity in the
Application. As a result, Freis hired an engineer, commissioned a formal survey, and
obtained fire department approval.
2 Despite being put on a dismissal track, the case was not dismissed in the trial court
prior to the ruling on the motion to enforce the settlement, as the parties obtained
continuations of the dismissal date while the Application was being reviewed by the
Association.
4
Freis prepared an amended application reflecting the specificity required by the
Association (the Second Application). The only portion of the Second Application that
appears in the appellate record is an engineer's drawing, which is much more detailed
than the contractor's drawing that was originally submitted with the Application. Among
other things, the drawing shows that several portions of Scarvaci's fence and some trees
will be relocated. The fence and trees will be removed from a strip on the northwest
portion of the 15-foot-wide easement where a four-foot-wide decomposed granite trail
will be placed next to an 11-foot-wide paved road. We infer from the parties' comments
that this four-foot-wide strip is to be used as a horse trail as an alternative to the
pavement. The engineer's drawing attached to the Second Application did not include the
drainage berms shown in the contractor's drawing for the Application.
Freis sought to submit the Second Application to the Association. The
Association required Scarvaci's signature on the Second Application before it would act
upon the Second Application, but Scarvaci refused to sign it. Scarvaci objected to the
Second Application because the construction plans (1) included the removal of her trees
and fence, which she contended were not located within the easement area; (2) did not
show the construction of berms needed for drainage; and (3) located the decomposed
granite horse trail on the northwest side of the paved road instead of on the southeast
side.
Freis brought a motion to enforce the settlement. Specifically, Freis sought an
order requiring Scarvaci to sign the Second Application or appointing an elisor to sign the
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Second Application if Scarvaci refused. Freis also requested an order that Scarvaci pay
the attorney fees he incurred in connection with the motion to enforce the settlement.
Scarvaci opposed the motion to enforce the settlement. She argued that the
settlement agreement required only that she sign the Application, as attached to the
settlement agreement. Scarvaci contended that because the Second Application was a
substantially new application with terms she never agreed to, including the removal of
her fence and trees and the location of the decomposed granite horse trail, she had no
legal duty under the settlement agreement to sign it.
Freis took the position that the settlement should be enforced by ordering Scarvaci
to sign the Second Application because the parties agreed in the settlement agreement to
abide by the final decision of the Association on the paving of the easement, but that final
decision cannot be made if the Second Application is not submitted to the Association
with Scarvaci's signature.3
3 Scarvaci filed evidentiary objections in the trial court on which the trial court did
not rule. Scarvaci renews some of those evidentiary objections on appeal. Specifically,
she contends that the statements in the declarations of Beverly Freis and counsel for Freis
describing the Association's response to the Application and the Association's position
that it will not take further action without Scarvaci's signature on the Second Application
should be stricken because the declarants were not "competent" to describe the demands
of the Association as the "evidence could have only come from the Association." When
the trial court does not rule on an evidentiary objection and it is renewed on appeal, we
deem the objection to have been overruled in the trial court and we review the ruling to
determine whether the trial court abused its discretion. (Reid v. Google, Inc. (2010) 50
Cal.4th 512, 534; Zhou v. Unisource Worldwide, Inc. (2007) 157 Cal.App.4th 1471,
1476.) We conclude that the trial court did not abuse its discretion by impliedly
overruling the objections to the competency of the declarants to describe the position of
the Association. As shown in their declaration, both of the declarants were involved in
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In July and August 2013, while the motion to enforce the settlement was pending,
the parties — through counsel — engaged in discussions to try to come to an agreement
on those items in the Second Application to which Scarvaci objected, but they failed to
reach an agreement.
On August 26, 2013, the trial court granted the motion to enforce the settlement.
The trial court found that "[u]pon submittal to the Association, the Association demanded
more specificity in the plans to pave the easement." Based on that finding, the trial court
concluded that "[t]he new proposal is simply a continuation of the process of putting the
issue before the Association as required by the settlement agreement." The trial court
ordered Scarvaci to sign the Second Application within 15 days and stated it would
appoint an elisor if Scarvaci refused to do so. The trial court also ordered Scarvaci to pay
Freis attorney fees in the amount of $6,175.
II
DISCUSSION
Scarvaci contends that we should reverse the judgment enforcing the settlement
because the trial court exceeded its authority by creating new settlement terms to which
Scarvaci never agreed. According to Scarvaci, "[b]y ordering Scarvaci to sign the
amended application containing a different scope of work, the Trial Court created new
material terms to the Settlement Agreement[,]" and reversal is therefore warranted.
the process of dealing with and responding to the Association, and thus have competent
firsthand knowledge of the Association's position on the Application.
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A. Applicable Legal Standards
We begin with an overview of the law on the enforcement of settlements.
Pursuant to Code of Civil Procedure section 664.6, when the parties agree that the
trial court will retain jurisdiction to enforce a settlement, a trial court may enter judgment
on a settlement agreement pursuant to a motion to enforce a settlement. (Weddington
Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 809-810 (Weddington).) "The
purpose of section 664.6 . . . 'is to permit a court, via a summary proceeding, to finally
dispose of an action when the existence of the agreement or the terms of the settlement
are subject to reasonable dispute . . . ." (Wackeen v. Malis (2002) 97 Cal.App.4th 429,
432, fn. 1.)
"Factual determinations made by a trial court on a [Code of Civil Procedure]
section 664.6 motion to enforce a settlement must be affirmed if the trial court's factual
findings are supported by substantial evidence. [Citations.] Other rulings are reviewed
de novo for errors of law." (Weddington, supra, 60 Cal.App.4th at p. 815.) "A
settlement agreement is a contract, and the legal principles which apply to contracts
generally apply to settlement contracts." (Id. at p. 810.) "Where, as here, the issue is one
of contractual interpretation and there is no conflicting extrinsic evidence as to the proper
interpretation, the issue is a question of law as to which the appellate court is in as good a
position as the trial court to pass; accordingly, the appellate court is not bound by the trial
court's interpretation and must arrive at its own interpretation de novo." (Southern
Pacific Land Co. v. Westlake Farms, Inc. (1987) 188 Cal.App.3d 807, 817 (Southern
Pacific).)
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"The power of the trial court under Code of Civil Procedure section 664.6 . . . is
extremely limited. 'Although a judge hearing a section 664.6 motion may receive
evidence, determine disputed facts, and enter the terms of a settlement agreement as a
judgment [citations], nothing in section 664.6 authorizes a judge to create the material
terms of a settlement, as opposed to deciding what terms the parties themselves have
previously agreed upon.' . . . [¶] . . . The court is powerless to impose on the parties
more restrictive or less restrictive or different terms than those contained in their
settlement agreement." (Hernandez v. Board of Education (2004) 126 Cal.App.4th 1161,
1176.) " 'Only the valid and binding agreement of the parties, including all material
terms well-defined and clearly expressed, may be ordered specifically performed.' "
(Weddington, supra, 60 Cal.App.4th at p. 817.)
B. The Trial Court Improperly Added Terms to the Settlement Agreement
Acknowledging the proscription against adding material terms to a settlement
agreement, the parties recognize that the fundamental issue for us to resolve is whether
the trial court impermissibly added material terms to the settlement agreement by
ordering Scarvaci to sign the Second Application containing a detailed construction plan
to which she objects. Our resolution of that issue requires us to interpret the settlement
agreement to determine the scope of the parties' agreement. Where, as here, extrinsic
evidence is not involved in that determination, we approach that question de novo.
(Southern Pacific, supra, 188 Cal.App.3d at p. 817.)
In interpreting the settlement agreement we apply fundamental rules of contract
interpretation, which " 'are based on the premise that the interpretation of a contract must
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give effect to the "mutual intention" of the parties. "Under statutory rules of contract
interpretation, the mutual intention of the parties at the time the contract is formed
governs interpretation. (Civ. Code, § 1636.) Such intent is to be inferred, if possible,
solely from the written provisions of the contract. (Id., § 1639.) The 'clear and explicit'
meaning of these provisions, interpreted in their 'ordinary and popular sense,' unless 'used
by the parties in a technical sense or a special meaning is given to them by usage' (id.,
§ 1644), controls judicial interpretation. (Id., § 1638.)" [Citations.]' . . . 'The whole of a
contract is to be taken together, so as to give effect to every part, if reasonably
practicable, each clause helping to interpret the other.' (Civ. Code, § 1641.) 'The factual
context in which an agreement was reached is also relevant to establish its meaning
unless the words themselves are susceptible to only one interpretation.' " (Canaan
Taiwanese Christian Church v. All World Mission Ministries (2012) 211 Cal.App.4th
1115, 1124, citations omitted.)
Here, the plain language of the settlement agreement reflects three specific things
that Scarvaci agreed to with respect to obtaining a decision from the Association: (1) the
parties will "submit the issue of paving the Easement" to the Association; (2) Scarvaci
will sign the Application attached to the settlement agreement; and (3) Scarvaci will
respect the "final decision of the [Association] . . . regarding the Easement." The
question presented is whether, in entering into these three agreements, Scarvaci agreed to
bind herself to approval of a specific construction plan that is different from that reflected
on the contractor's drawing and scope of work attached to the Application. As we will
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explain, we find nothing in the settlement agreement indicating Scarvaci's agreement to
approve a different construction plan.
First, Scarvaci's agreement to sign the Application attached to the settlement
agreement cannot reasonably be interpreted as an agreement to the different construction
plans reflected in the engineer's drawing attached to the Second Application. Rather than
merely adding a level of specificity not present in the original contractor's drawing, the
engineer's drawing attached to the Second Application is materially different. The
construction plans set forth in the Second Application require the removal of several
portions of Scarvaci's fence, the removal of some of Scarvaci's trees, and the creation of a
four-foot-wide decomposed granite horse trail. It also fails to include the berms for
drainage purposes included in the original contractor's drawing attached to the
Application. We see no indication that Scarvaci agreed to that plan by entering into the
settlement agreement.
Second, Scarvaci's agreement to "submit the issue of paving the Easement" to the
Association and to respect "the final decision" of the Association cannot reasonably be
interpreted as binding her to accept whatever new construction plans are required by the
Association regardless of whether those plans differ materially from the construction
plans set forth in the Application. Giving effect to all portions of the settlement
agreement, we cannot overlook the fact that the settlement agreement specifically
includes the Application as an exhibit, and that Application contains a specific
contractor's drawing with a specific scope of work. Because the Application is attached
as an exhibit to the settlement agreement, the most reasonable interpretation of the
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settlement agreement is that Scarvaci agreed to submit to the Association the issue of
whether it would approve the paving of the easement according to the construction plans
attached to the Application, but that she did not consent to construction plans that were
materially different from those attached to the Application.
We therefore conclude that by ordering Scarvaci to sign the Second Application,
which attaches construction plans that are materially different from the construction plans
attached to the Application, the trial court added new material terms to the settlement
agreement to which Scarvaci did not agree. Accordingly, the trial court exceeded its
authority in enforcing the settlement, and we reverse the judgment.
C. Scarvaci's Refusal to Continue to Participate in the Process to Obtain a Decision
from the Association on Paving the Easement Triggered Paragraph 7 of the
Settlement Agreement
We next consider the proper disposition of this matter upon remand to the trial
court.4 It appears from the record that prior to the trial court's ruling on the motion to
enforce the settlement, the litigation was inactive and on a dismissal track but had not yet
been dismissed as called for under the terms of the settlement agreement. Our reversal of
the judgment effectively puts the action back in the procedural posture that existed before
the motion to enforce the settlement was granted: inactive and on the dismissal track
under the terms of the settlement agreement.
As we have described, paragraph 7 of the settlement agreement provides that the
action will be taken off the dismissal track and reactivated "if the [Association] decides
4 We afforded the parties an opportunity to submit letter briefs on this issue
pursuant to Government Code section 68081.
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against approving the building permit for the paving of the driveway over the Easement
because the Association determines that . . . Scarvaci, as one owner of the Easement, did
not consent to the Freis's application to pave the Easement." As we interpret this
provision, it effectively nullifies the settlement agreement and reactivates the litigation
under the conditions described in paragraph 7.
The current situation triggers paragraph 7 of the settlement agreement. As the trial
court found, and as supported by substantial evidence in the record, the Association will
not give its approval to pave the easement unless Scarvaci signs the Second Application
and participates in the continuing permit review process. However, under the current
circumstances — after receiving the Association's feedback on the Application —
Scarvaci does not consent to Freis's attempt to pave the easement and therefore will not
sign the Second Application. Scarvaci's refusal to consent to the Second Application has
resulted in the cessation of the process of obtaining the Association's approval to pave the
easement, effectively serving as a denial of a permit to pave the easement due to
Scarvaci's refusal to participate in the process.
As Scarvaci's lack of consent to Freis's application to pave the driveway has
resulted in the Association's refusal to issue a permit, paragraph 7 of the settlement
agreement applies. Accordingly, upon remand, the case must be removed from the
dismissal track and reactivated so that Freis may pursue his lawsuit seeking relief from
Scarvaci's refusal to allow the paving of the easement.
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DISPOSITION
The judgment enforcing the settlement agreement is reversed. This action is
remanded to the trial court with directions to reactivate it and remove it from the
dismissal track.
IRION, J.
WE CONCUR:
HUFFMAN, Acting P. J.
O'ROURKE, J.
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