Filed 1/30/23 Youshei v. Youshaei CA2/1
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION ONE
FARBOD YOUSHEI, B313770
Plaintiff and Respondent, (Los Angeles County
Super. Ct. Nos. SC129602,
v. 19SMCV00047)
JOSEPH YOUSHAEI et al.,
Defendants and Appellants;
HELENA RADNIA,
Cross-defendant and Respondent.
APPEAL from a judgment of the Superior Court of
Los Angeles County, Elaine W. Mandel, Judge. Affirmed in part,
reversed in part, and remanded with directions.
Lang, Hanigan & Carvalho and Arthur Carvalho, Jr. for
Defendants and Appellants.
Hill, Farrer & Burrill, William W. Steckbauer and
Sean A. Topp for Plaintiff and Respondent and Cross-Defendant
and Respondent.
____________________________
Appellant Joseph Youshaei and respondent Farbod Youshei
are the sole members of two limited liability companies; one of
the LLCs owns real property and the other LLC owns a car wash
on the real property. Appellant Jilia Youshaei is Joseph’s wife,
and respondent Helena Radnia is Farbod’s wife.1 In 2019,
Farbod brought suit against Joseph for conversion, breach of
contract, and breach of fiduciary duty.
On February 26, 2020, appellants and respondents
participated in a mediation and executed a settlement
agreement, which was intended to resolve the underlying action
and contains a number of provisions pertinent to this appeal that
we discuss in further detail later in this opinion. Among other
things, the settlement obligated appellants to pay respondents
1 Because the surnames of three out of the four parties to
this appeal are quite similar, we refer to each party individually
by his or her respective first name. Furthermore, we refer to
Joseph and Jilia collectively as “appellants,” and to Farbod and
Helena collectively as “respondents.”
Additionally, although appellants claim in their opening
brief that “Joseph filed a cross-complaint . . . against Farbod and
Helena for breach of fiduciary duty, constructive fraud,
negligence, and declaratory relief,” they do not provide any
citation to the record to support that assertion. Nevertheless,
because the parties agree that Helena is a cross-defendant on one
or more causes of action, our caption indicates that she has that
designation.
2
$1.325 million within 60 days of the agreement, and provided
that upon payment of the purchase price, respondents would
transfer all of their interests in the two LLCs to appellants. As
part of the transaction, the settlement agreement required
respondents to cooperate with Joseph in his efforts to obtain
financing for the purchase price, and it obligated the LLCs to pay
all of the entities’ debts, except for debts personally created by
Joseph or Jilia, or which either of them concealed from
respondents. The two sides agreed to release all claims against
each other arising from the underlying action, and that a party
prevailing on a motion to enforce the terms of the settlement
agreement would be entitled to reasonable attorney fees and
costs.
Appellants failed to pay the purchase price prior to the
60-day deadline (i.e., April 26, 2020) or at any point thereafter.
Respondents moved to enforce the settlement agreement
pursuant to Code of Civil Procedure 2 section 664.6 and for
attorney fees and costs. The trial court granted respondents’
motion and awarded attorney fees and costs. After respondents
lodged their proposed judgment with the court, appellants filed
objections thereto and respondents filed a response to appellants’
objections. The trial court issued respondents’ proposed
judgment without commenting explicitly on appellants’
objections.
On appeal, appellants argue we must reverse the judgment
because it alters certain settlement terms and omits others. We
agree with appellants that the trial court erred in requiring them
2Undesignated statutory citations are to the Code of Civil
Procedure.
3
to pay the attorney fee award as a prerequisite to obtaining
respondents’ interests in the LLCs; failing to clarify that a third
party escrow company must oversee the LLCs’ payment of their
debts; changing the effective date of the releases from
February 26, 2020 to the date of judgment; and omitting the
clause requiring respondents to cooperate with Joseph in his
efforts to obtain financing, along with another provision barring
respondents from communicating with an individual who is not a
party to this appeal, unless required to do so under compulsion of
law.
On the other hand, we reject appellants’ assertions the trial
court erred in conditioning the transfer of respondents’ interests
in the LLCs on appellants’ payment of respondents’ costs and
accrued interest, and in excluding certain debts from the
obligations to be paid by the LLCs. Furthermore, appellants’
claim that the trial court erred in omitting a confidentiality
clause from the judgment is moot because they have taken no
steps to seal filings relating to the motion to enforce the
settlement, nor have they expressed any intention of doing so.
Accordingly, we reverse portions of the judgment, affirm
the remainder thereof, and remand the matter to the trial court
with directions to enter a new judgment that is consistent with
this opinion.
FACTUAL AND PROCEDURAL BACKGROUND3
We summarize only those facts pertinent to our disposition
of this appeal.
3Our factual and procedural background is derived in part
from undisputed aspects of the trial court’s rulings, admissions
made by the parties in their filings, and assertions respondents
4
Joseph and Farbod are the sole members of Shoor Temple,
LLC and Eagle Nasher, LLC (collectively, the LLCs). Jilia is
Joseph’s wife, and Helena is Farbod’s wife. Shoor Temple, LLC
owns real property in El Monte, which is improved by a car wash
that is owned by Eagle Nasher, LLC.
In July 2018, Kenneth Kaplan initiated case No. SC129602
by filing a complaint against Joseph, wherein Kaplan sought to
enforce a judgment against Joseph issued by a Massachusetts
court and to hold Joseph liable as a fraudulent transferee.4 In
January 2019, Farbod and the LLCs initiated case No.
19SMCV00047 by filing a complaint against Joseph for
conversion, breach of contract, and breach of fiduciary duty. In
August 2019, the trial court consolidated the two cases.
On February 26, 2020, appellants and respondents (but not
Kaplan) participated in mediation conducted by a retired judge.
Later that day, the parties executed a settlement agreement as to
raise in their appellate brief to which appellants do not respond
in their reply. (See Baxter v. State Teachers’ Retirement System
(2017) 18 Cal.App.5th 340, 349, fn. 2 [utilizing the summary of
facts provided in the trial court’s ruling]; Standards of Review,
post [noting that the trial court’s orders and judgments are
presumed correct]; Artal v. Allen (2003) 111 Cal.App.4th 273,
275, fn. 2 (Artal) [“ ‘[B]riefs and argument . . . are reliable
indications of a party’s position on the facts as well as the law,
and a reviewing court may make use of statements therein as
admissions against the party.’ ”]; Rudick v. State Bd. of
Optometry (2019) 41 Cal.App.5th 77, 89–90 (Rudick) [concluding
that the appellants made an implicit concession by “failing to
respond in their reply brief to the [respondent’s] argument on
th[at] point”].)
4 Kenneth Kaplan is not a party to this appeal.
5
both cases that is comprised of two documents: (1) the
stipulation for settlement and mutual release of claims, and
(2) the addendum to stipulation for settlement and mutual
release of claims.
Briefly summarized, the settlement agreement required
appellants to purchase respondents’ interests in the two LLCs for
$1.325 million within 60 days of February 26, 2020, and bars
Joseph and his agents from “physically access[ing] the car wash
of the [LLCs]” until after this transaction has been consummated.
The settlement agreement also provides that at the time of the
transfer of respondents’ interests in the LLCs, those two entities
shall pay all of their debts, subject to certain exceptions.
Respondents agreed to cooperate in Joseph’s efforts to secure
financing for the payment of the $1.325 million purchase price.
Additionally, the parties agreed to release each other from any
claims arising out of the two consolidated cases. The agreement
also provides that it may be enforced pursuant to section 664.6.5
On January 6, 2021, respondents moved to enforce the
settlement agreement pursuant to section 664.6 and for attorney
fees. After the parties fully briefed the matter, the trial court
heard the motion on January 29, 2021. At the hearing, the court
issued a tentative ruling indicating the court intended to grant
respondents’ motion on the grounds, inter alia, that appellants
had not paid the purchase price specified in the settlement
agreement and their performance thereunder was not excused by
the COVID-19 pandemic. The parties presented argument, and
5 We discuss the provisions of the settlement agreement
relevant to this appeal in greater detail in Discussion, parts B
through I, post.
6
the court took the matter under submission. On March 4, 2021,
the court adopted the tentative ruling as its final order.
On April 9, 2021, respondents lodged a proposed judgment
with the trial court. On April 13, 2021, appellants filed objections
to the proposed judgment. In particular, appellants complained
that respondents’ proposed judgment would: add “pre and post
judgment interest at the rate of 10% per annum beginning
April 26, 2020 and . . . $5,500 in attorney[ ] fees” to the purchase
price, fail to establish an escrow for the transaction, “materially
alter[ ] the debts that are to be paid at transfer,” and change the
date the releases are effective. (Underscoring & capitalization
omitted.) On April 15, 2021, respondents filed a response to
appellants’ objections.
On April 30, 2021, the trial court issued respondents’
proposed judgment. Although respondents claim “[t]he trial court
overruled Appellant’s Objections to the Proposed Judgment,” the
case register indicates the court entered judgment without first
holding a hearing on appellants’ objections to the judgment or
issuing a written ruling thereon. Further, the record citation
respondents supply in support of this assertion simply refers to
the judgment itself, which does not discuss appellants’ objections.
On June 23, 2021, appellants appealed the judgment.
Appellants contend the sole issue on appeal is whether the trial
court erred in entering a “judgment that does not restate all the
terms of the settlement agreement and adds additional terms not
included in the agreement.”6
6 On appeal, appellants do not dispute that they failed to
pay the purchase price, nor do they claim to have been excused
from doing so.
7
STANDARDS OF REVIEW
Section 664.6, subdivision (a) provides: “If parties to
pending litigation stipulate, in a writing signed by the parties
outside of the presence of the court or orally before the court, for
settlement of the case, or part thereof, the court, upon motion,
may enter judgment pursuant to the terms of the settlement. If
requested by the parties, the court may retain jurisdiction over
the parties to enforce the settlement until performance in full of
the terms of the settlement.” (§ 664.6, subd. (a).)
“Section 664.6 was enacted to provide a summary
procedure for specifically enforcing a settlement contract without
the need for a new lawsuit.” (Weddington Productions, Inc. v.
Flick (1998) 60 Cal.App.4th 793, 809 (Weddington Productions,
Inc.).) “[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 [citation] . . . .”
(Weddington, at p. 810.) “ ‘[T]he trial court is under a duty to
render a judgment that is in exact conformity with an agreement
or stipulation of the parties. “If interpretation of a stipulation is
in order the rules applied are those applied to the interpretation
of contracts. [Citations.] It is not the province of the court to add
to the provisions thereof [citations]; to insert a term not found
therein [citations]; or to make a new stipulation for the parties.” ’
[Citations.]” (Machado v. Myers (2019) 39 Cal.App.5th 779, 792
(Machado).)
“Factual determinations made by a trial court on a
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
8
errors of law.” (Weddington Productions, Inc., supra,
60 Cal.App.4th at p. 815.)
“ ‘[I]nterpretation of a contract presents a question of law
unless it depends on conflicting evidence, and an appellate court
is not bound by a trial court’s interpretation which does not
depend on the credibility of extrinsic evidence.’ [Citations.]”
(Boyd v. Oscar Fisher Co. (1989) 210 Cal.App.3d 368, 378.)
Conversely, “[u]nder th[e substantial evidence] standard of
review, findings of fact are liberally construed to support the
judgment and we consider the evidence in the light most
favorable to the prevailing party, drawing all reasonable
inferences in support of the findings. . . . [¶] . . . It is not our role
as a reviewing court to reweigh the evidence or to assess witness
credibility.” (See Thompson v. Asimos (2016) 6 Cal.App.5th 970,
981 (Thompson).)
“ ‘A judgment or order of a lower court is presumed to be
correct on appeal, and all intendments and presumptions are
indulged in favor of its correctness.’ [Citation.]” (Thompson,
supra, 6 Cal.App.5th at p. 981.) Thus, “ ‘ “it is the appellant’s
responsibility to affirmatively demonstrate error” ’ ” by
“ ‘supply[ing] the reviewing court with some cogent argument
supported by legal analysis and citation to the record.’
[Citation.]” (See Los Angeles Unified School Dist. v. Torres
Construction Corp. (2020) 57 Cal.App.5th 480, 492, 497
(Los Angeles Unified School Dist.); Hernandez v. First Student,
Inc. (2019) 37 Cal.App.5th 270, 277 (Hernandez).) The appellant
bears this burden of rebutting the presumption of correctness
accorded to the trial court’s decision, regardless of the applicable
9
standard of review.7 (See Los Angeles Unified School Dist., at
p. 492 [noting that these principles apply to “ ‘ “an appeal from
any judgment” ’ ”]; see also Orange County Water Dist. v. Sabic
Innovative Plastics US, LLC (2017) 14 Cal.App.5th 343, 368, 399
[indicating that an appellant must affirmatively show the trial
court erred even if the de novo standard of review applies].)
DISCUSSION
As a threshold matter, we dispose of appellants’ assertion
that the presumption of correctness does not apply to the
judgment. The rest of this opinion addresses each aspect of the
judgment that appellants claim diverges from the parties’
settlement agreement. We reverse the defective portions of the
judgment, affirm the remainder thereof, and remand the matter
to the trial court to issue a new judgment that corrects the
defects we have identified.8
7 Appellants argue that the presumption of correctness
should not apply to the judgment. We reject that argument for
the reasons provided in Discussion, part A, post.
8 At the conclusion of their opening brief, appellants argue
we “should reverse the Judgement and direct the trial court to
enter a new judgment that contains all of and only the terms of
the settlement agreement.” At the end of their reply brief,
however, appellants instead ask us to “reverse the trial courts
[sic] granting of the Motion to Enforce the Settlement pursuant to
Code of Civil Procedure §664.6 and the corresponding Judgment
with directions to either deny the motion or to enter a new
judgment that conforms precisely to the terms of the Settlement
Agreement.” We decline to consider appellants’ untimely request
that we direct the trial court to deny the motion to enforce the
settlement. (Habitat & Watershed Caretakers v. City of Santa
Cruz (2013) 213 Cal.App.4th 1277, 1292, fn. 6 [“Arguments
10
A. The Presumption of Correctness Applies to the Trial
Court’s Judgment
Appellants contend the presumption of correctness is
inapplicable because the record does not show the trial court
resolved any of the issues appellants raise on appeal. Appellants
further argue that we should treat the minute order granting the
motion as a statement of decision to which the presumption of
correctness does not apply because the order failed to resolve
these principal disputed issues.
With regard to the first contention, appellants rely on
Kemp Bros. Construction, Inc. v. Titan Electric Corp. (2007)
146 Cal.App.4th 1474 (Kemp Bros. Construction, Inc.), for the
proposition that because “ ‘the record demonstrates the trial
judge did not weigh the evidence’ ” relating to these issues, “ ‘the
presumption of correctness is overcome.’ ” (Quoting Kemp Bros.
Construction, Inc., at p. 1477.) Specifically, appellants maintain
“the trial court’s minute order granting the motion makes clear
that it did not make any factual findings other than that the
settlement [w]as made and there were no grounds for Appellants
to avoid enforcement.”
According to appellants, “[t]he trial court did not discuss,
analyze or decide the issues of who is responsible for the
repayment of the Pacific Enterprise loan; whether Respondents
were entitled to prejudgment interest; whether the prejudgment
interest and attorney’s fees are properly added to the purchase
price (and thereby secured by the membership interests) rather
than a separate award of damages; whether the effective date of
presented for the first time in an appellant’s reply brief are
considered waived.”].)
11
the release was intended to be the date of the agreement or some
uncertain date in the future which ultimately became the date of
judgment; [and] whether the cooperation provision of the
agreement was material or had lapsed . . . .”
In Kemp Bros. Construction, Inc., the trial court granted a
plaintiff’s request for a pretrial order attaching a defendant’s
property. (See Kemp Bros. Construction, Inc., supra,
146 Cal.App.4th at pp. 1476–1477.) “The [trial] court found [the
plaintiff] was entitled to the remedy, not because [the plaintiff]
had affirmatively shown the probable validity of its claim or
established other requisite criteria” for such an order, but instead
on the ground that collateral estoppel barred the defendant from
relitigating whether it had breached a contract with the plaintiff.
(See ibid.)
On appeal, the reviewing court found the trial court erred
in invoking collateral estoppel against the defendant. (See Kemp
Bros. Construction, Inc., supra, 146 Cal.App.4th at p. 1477.) The
Court of Appeal also declined to presume that substantial
evidence nonetheless supported the trial court’s attachment
order. (See id. at pp. 1477–1478.) The Kemp court reasoned that
“the minute order and the reporter’s transcript demonstrate the
[trial] court never engaged in the process of weighing the
evidence because it improvidently agreed with [the plaintiff’s]
argument that [the defendant] was barred from ‘re-litigat[ing]’
the issue of its alleged breach of contract and ruled accordingly.”
(See id. at p. 1478.) “For that reason, [the reviewing court]
reverse[d] and remand[ed] with directions to the court to weigh
the factors relevant to [the plaintiff’s] burden of showing
entitlement to the attachment order.” (Ibid.)
12
Appellants’ reliance on the Kemp Bros. Construction, Inc.
decision is unavailing. Appellants admit to have raised their
claims of error “either in Appellants’ Opposition to the Motion or
the Objections to the Proposed Judgment . . . .” Whereas the trial
court in Kemp made statements suggesting it had not addressed
whether the plaintiff had “affirmatively shown the probable
validity of its claim or established other requisite criteria”
for the issuance of an attachment order (see Kemp Bros.
Construction, Inc., supra, 146 Cal.App.4th at pp. 1476–1477),
there is no indication in the order granting respondents’ motion
or in the judgment that the trial court disposed of appellants’
arguments based on some ground independent of the merits.9
Under these circumstances, we presume the trial court did not
abdicate its judicial duty to consider appellants’ contentions
before rejecting them.10
Next, appellants contend “[t]he minute order on a motion
under Section 664.6 is properly analogized to a statement of
decision after a bench trial to the extent the trial court makes
findings of fact.” Appellants insist that the trial court’s failure to
address their claims of error in the order granting respondents’
motion and in the judgment “should, like the failure to resolve
9 The minute order for the hearing on respondents’ motion
indicates the proceeding was not transcribed.
10 (See Evid. Code, § 664 [“It is presumed that official duty
has been regularly performed.”]; cf. People v. Sparks (1968)
262 Cal.App.2d 597, 600–602 [relying on Evid. Code, § 664 for the
proposition that, even though the record was silent on whether
the trial court considered referring the defendants to the
California Youth Authority, the court presumptively discharged
its official duty to conduct that analysis].)
13
principal disputed issues in a statement of decision, preclude the
applicability of the doctrine of implied findings to this case.”
Before turning to the substance of this argument, we
briefly describe the doctrine of implied findings. The doctrine is a
specific application of the presumption of correctness to a
judgment entered following a bench trial. (See Thompson, supra,
6 Cal.App.5th at p. 981.) Under the doctrine, “the reviewing
court must infer . . . that the trial court impliedly made every
factual finding necessary to support its decision.’ [Citation.]”
(Ibid.)
“For the doctrine of implied findings to be disabled on
appeal, both steps of [a] two-step procedure . . . must be followed.”
(See Thompson, supra, 6 Cal.App.5th at p. 983.) “First, following
the court’s announcement of its tentative decision, . . . a party
[must] specify, in timely fashion and in proper form, ‘those
controverted issues as to which the party is requesting a
statement of decision. . . .’ . . . . Second, . . . any omissions or
ambiguities in the statement of decision must be ‘brought to the
attention of the trial court either prior to entry of judgment or in
conjunction with’ a new trial motion [citation] or a motion to
vacate the judgment [citation], thus allowing the court to respond
to objections before the taking of an appeal. The second step is
not a substitute for the first.” (See id. at p. 982, italics added,
fns. omitted.) “[S]trict adherence to both steps of the process is
necessary before we will reverse the presumption of correctness
generally accorded trial court judgments on appeal.” (Id. at
p. 983, italics added.)
Even if we treated the trial court’s resolution of
respondents’ motion under section 664.6 as if it were a ruling
following a bench trial, appellants’ attempt to disable the
14
doctrine of implied findings would still fail. Appellants do not
claim they asked the trial court for a statement of decision on the
issues they raise on appeal, let alone direct us to any record
evidence showing that they made such a request. Therefore, we
adhere to the generally applicable rules that “ ‘all presumptions
and intendments are in favor of supporting the judgment or order
appealed from,’ ” and that “ ‘the appellant[s] ha[ve] the burden of
showing reversible error . . . .’ [Citations.]” (See Estate of Sapp
(2019) 36 Cal.App.5th 86, 104; see also Hernandez, supra,
37 Cal.App.5th at p. 277 [“ ‘We are not obliged to make . . .
arguments for [appellant] [citation], nor are we obliged to
speculate about which issues counsel intend to raise.’ ”]; Alki
Partners, LP v. DB Fund Services, LLC (2016) 4 Cal.App.5th 574,
590 (Alki Partners, LP) [“[A]rguments not supported by adequate
citations to [the] record need not be considered on appeal.”].)
B. Appellants Fail To Establish the Trial Court Erred in
Requiring Them To Pay Accrued Interest Before
Respondents Are Obligated To Transfer Their
Interests in the LLCs to Appellants
Paragraph 1 of the judgment provides: “[Respondents]
shall have and recover from [appellants] and each of them, jointly
and severally, the principal sum of $1,325,000.00 plus pre
judgment interest at the rate of ten percent (10%) per annum
accruing on this sum from and after April 26, 2020 [11 ] and
attorney’s fees awarded by the Court in the amount of $5,500.00.”
11 (See Civ. Code, § 3289, subds. (a)–(b) [“Any legal rate of
interest stipulated by a contract remains chargeable after a
breach thereof, as before, until the contract is superseded by a
verdict or other new obligation. [¶] . . . If a contract . . . does not
15
In turn, paragraph 2 of the judgment states: “Upon
[respondents’] receipt of the principal sum of $1,325,000.00, all
accrued interest thereon at the maximum legal rate, and the
attorney’s fees awarded by the Court in the amount of $5,500.00
from [appellants], which sum shall be paid through a third party
escrow company, [respondents] shall transfer to [appellants] all
of their membership interests, right, title, interest and claims in
and to Shoor Temple and Eagle Nasher and the assets thereof,
including, if any, the car wash business, the inventory and
furniture fixtures and equipment, bank accounts, contracts,
claims, intellectual property and development rights whether
held in the name of Shoor Temple, LLC or Eagle Nasher, LLC,
and [respondents] shall have no further ownership interest in
such [LLCs], or obligations owed in connection with such [LLCs]
and its operations, assets and/or debts incurred after the date of
transfer.”
Appellants contend that “paragraph 1 of the Judgment sets
a purchase price . . . which is significantly greater than the
agreed $1,325,000 by including pre and post judgment interest at
the rate of 10% per annum beginning April 26, 2020 . . . .”12 They
further argue that respondents “did not seek pre-judgment or
post-judgment interest” in their motion, and, “even if
stipulate a legal rate of interest, the obligation shall bear interest
at a rate of 10 percent per annum after a breach.”].)
12 Although the judgment does not identify specifically the
applicable postjudgment legal rate of interest, the parties
impliedly agree it is 10 percent per annum. (See also § 685.010,
subd. (a)(1) [“[I]nterest accrues at the rate of 10 percent per
annum on the principal amount of a money judgment remaining
unsatisfied.”].)
16
[respondents] had, this amount cannot properly be added to the
purchase price but must be a separate amount that
respondents[ ] can seek to collect through post judgment process.”
For the reasons discussed below, we reject appellants’ contention
that the court erred in issuing a judgment requiring them to pay
the accrued prejudgment and postjudgment interest before
respondents are obligated to transfer their interests in the two
LLCs to them.
First, we address appellants’ assertion that respondents
did not request prejudgment and postjudgment interest in their
motion. In support of this proposition, appellants cite an excerpt
from the notice of motion wherein the respondents did not ask
explicitly for this relief. In the memorandum of points and
authorities accompanying the notice of motion, however,
respondents argued they “are entitled to interest on [the $1.325
million] at the legal rate of 10% per annum commencing on
April 26, 2020 until the date it is paid and [respondents] must
transfer their membership interest in Shoor Temple and Eagle
Nasher upon receipt of the entirety of the [$1.325 million] and all
accrued interest.” In that memorandum, the respondents
claimed they were entitled to this interest as “ ‘credit for . . .
losses occasioned by the delay’ ” in appellants’ performance of the
settlement agreement. Because “[a]n omission in the notice [of
motion] may be overlooked if the supporting papers make clear”
the relief sought by the movants (see Luxury Asset Lending, LLC
v. Philadelphia Television Network, Inc. (2020) 56 Cal.App.5th
894, 909), the respondents’ failure to request interest in their
notice of motion did not bar the trial court from awarding it to
them.
17
We next address appellants’ argument that the trial court
lacked authority to order them to pay prejudgment and
postjudgment interest before they could obtain respondents’
rights in the LLCs.
A motion to enforce under section 664.6 is, “in effect, a
request for specific performance of [a] settlement agreement.”
(See Osumi v. Sutton (2007) 151 Cal.App.4th 1355, 1357, 1361.)
When a party is entitled to specific performance,
“[e]stablished equitable principles require the parties be placed in
the same positions they would have been in had the contract been
timely performed.” (See Stratton v. Tejani (1982) 139 Cal.App.3d
204, 208, 212 (Stratton).) Specifically, if “execution of that
judgment will occur at a date substantially after the date of
performance provided by the contract, financial adjustments
must be made to relate their performance back to the contract
date.” (See id. at p. 212.) Under this approach, “when a buyer is
deprived of possession of the property pending resolution of the
dispute and the seller receives rents and profits, the buyer is
entitled to a credit against the purchase price for the rents and
profits from the time the property should have been conveyed to
him,” and the seller “is entitled to receive the value of his lost use
of the purchase money during the period performance was
delayed.” (See ibid.) “These adjustments are ‘ “more like an
accounting between the parties than like an assessment of
damages.” ’ [Citation.]” (Ibid.)
By awarding respondents prejudgment and postjudgment
interest at the rate of 10 percent per annum on the $1.325 million
purchase price and ordering appellants to pay the principal and
any accrued interest before respondents are obligated to transfer
their membership interests in the LLCs to appellants, the trial
18
court provided respondents with a credit at the legal rate for
their lost use of the purchase funds. The Stratton decision
establishes that the trial court had the equitable authority to
grant this relief. (See Stratton, supra, 139 Cal.App.3d at pp. 208,
212–213 [indicating that when a court orders specific
performance of a sale contract, the seller is typically entitled to a
“credit for his lost use of [the purchase] funds,” and that the
“legal rate” of interest can be, but is not necessarily, “the
reasonable value of the use of money” for the purposes of an
equitable adjustment].)
In their reply, appellants suggest for the first time that the
trial court could not add interest at the legal rate of 10 percent
per annum to the purchase price because the parties did not offer
evidence on “the benefits received by the [respondents from
operating the LLCs] during the interim period between the
agreed sale date and the date of judgment” and on “the value of
the [respondents’] loss of use of the purchase funds.” Yet, as we
noted earlier in this section, respondents’ memorandum of points
and authorities in support of their motion apprised appellants of
respondents’ intention to seek interest at the legal rate as a
credit for appellants’ delay in performance. Given the
circumstances, appellants should have raised these evidentiary
challenges in their opening brief to afford respondents an
opportunity to refute it. We thus decline to pass upon the merits
of this argument.13 (See Reichardt v. Hoffman (1997)
13 Moreover, appellants concede that the COVID-19
pandemic disrupted the LLCs’ operations after the parties
executed the settlement agreement; indeed they represent that
“[t]he COVID-19 pandemic destroyed the business.”
(Underscoring omitted.) It would thus be wholly speculative for
19
52 Cal.App.4th 754, 764 [“ ‘Obvious considerations of fairness in
argument demand that the appellant present all of his points in
the opening brief. To withhold a point until the closing brief
would deprive the respondent of his opportunity to answer it or
require the effort and delay of an additional brief by
permission.’ ”].)
In sum, appellants fail to establish the trial court erred in
ordering them to pay accrued interest at the legal rate of
10 percent per annum on the $1.325 million purchase price as a
condition of receiving respondents’ rights vis-à-vis the LLCs.
C. The Trial Court Erred in Conditioning the Transfer
of Respondents’ Interests in the LLCs on Appellants’
Payment of the $5,440 Attorney Fee Award
Appellants also claim the trial court erred in ordering them
to pay the $5,500 award of attorney fees and costs as a condition
of receiving respondents’ interests in the LLCs. For the reasons
discussed below, we agree with appellants that respondents’
obligation to transfer their interests in the LLCs should not have
been contingent on appellants’ payment of the attorney fee
portion of this award. In contrast, the trial court did not err in
obligating appellants to pay the costs award before they could
obtain respondents’ interests in the LLCs.
As a preliminary matter, we observe that the judgment,
which respondents prepared and was ultimately entered by the
trial court, identifies the entire $5,500 figure as the attorney fee
award. In the memorandum of points and authorities in support
of their motion, however, respondents claimed that $60 of their
us to presume that respondents received profits or other
monetary benefits from operating the LLCs after April 26, 2020.
20
$5,500 request corresponded to the filing fee for the motion,
whereas $5,440 of the award sought was attributable to the
attorney fees they incurred in connection with the motion.
Respondents supported this assertion with a declaration from
their trial counsel to the effect that “[t]he filing fee for th[e]
Motion and incurred by [respondents] is $60.” Additionally,
appellants acknowledge in their opening appellate brief that
respondents sought “attorney’s fees and costs in the sum of
$5,500,” and they do not contest respondents’ assertion that
$60 of that request is attributable to the filing fee for the motion.
(Italics added.) Therefore, we deem $60 of the award as
attributable to respondents’ costs and the remaining $5,440 as
their attorney fee award. (See Artal, supra, 111 Cal.App.4th at
p. 275, fn. 2 [noting that we may construe a statement in a brief
as an admission against the party making it].)
We turn to whether the trial court erred in ordering
appellants to pay the $5,440 attorney fee award as a prerequisite
to obtaining respondents’ interest in the LLCs. As we explained
in Discussion, part B, ante, a party moving to enforce a
settlement agreement is essentially seeking a judgment of
specific performance, and, in the course of granting that relief, a
trial court may adjust a purchase price to account for a delay in
performance of the instrument’s obligations. Decisions
recognizing this authority “appear to be animated by the
principle that monetary relief incidental to specific performance
is intended to, in essence, restore relations between the parties to
what they would have been absent the breach . . . .” (See
Behniwal v. Mix (2007) 147 Cal.App.4th 621, 629 (Behniwal); see
also id. at pp. 624, 628–629 [identifying the Stratton decision as
21
an “authorit[y] dealing with monetary relief incidental to specific
performance,” capitalization omitted].)
A judgment adjusting the purchase price to account for a
prevailing party’s attorney fees, however, falls beyond the scope
of this equitable authority because an attorney fee award “in a
specific performance action is not a true ‘incident’ to the
judgment for specific performance. The attorney fee award . . . is
itself a matter of simple contract and the prevailing party’s right
to its fees is under the contract in conjunction with section 1717 of
the Civil Code, which governs attorney fees awarded under
contract.” (See Behniwal, supra, 147 Cal.App.4th at pp. 630–631,
fn. omitted.) Accordingly, the trial court should not have
conditioned the transfer of respondents’ interests in the LLCs on
appellants’ payment of the $5,440 attorney fees award.
In arriving at this conclusion, we do not imply that
respondents are not entitled to recover these fees from
appellants. Indeed, paragraph 4 of the stipulation and
paragraphs 8.9 and 8.12 of the addendum to the stipulation
authorize the prevailing party in a proceeding to enforce the
agreement to recover reasonable attorney fees. Rather, we
simply hold the trial court utilized an improper “enforcement
mechanism” for respondents’ collection of their attorney fees.
(See Behniwal, supra, 147 Cal.App.4th at pp. 623–624 [utilizing
the term “enforcement mechanism” to refer to an adjustment to a
purchase price made by a judgment of specific performance].)
Upon remand, the trial court shall enter a new judgment
providing that appellants’ entitlement to respondents’ interest in
the LLCs is not predicated on appellants’ payment of the attorney
fee award.
22
Unlike the $5,440 attorney fee award, the $60 filing fee is
“a ‘routine cost’ ” that is “an ‘incident’ of [a] specific performance
judgment . . . .” (See Behniwal, supra, 147 Cal.App.4th at
pp. 631, 634; cf. id. at pp. 632, 634 [noting that the costs of
duplicating a reply brief fall into the category of routine costs].)
Therefore, the court was authorized to adjust the purchase price
to account for this cost. (See Stratton, supra, 139 Cal.App.3d at
p. 208 [“Established equitable principles require the parties [to]
be placed in the same positions they would have been in had the
contract been timely performed.”]; Behniwal, at p. 629 [noting
that cases concerning equitable adjustments to a purchase price
“appear to be animated by the principle that monetary relief
incidental to specific performance is intended to . . . restore
relations between the parties to what they would have been
absent the breach”].)
D. The Trial Court Erred in Failing To Clarify that the
Escrow Company Is Charged with Facilitating the
LLCs’ Payment of Their Debts
Paragraph 2.1 of the addendum to the stipulation provides:
“An escrow with a licensed California escrow company, the
identity of which shall be mutually agreed to between the
Parties, shall be opened by the Parties regarding this Settlement
and payment amounts and obligations, as soon as reasonably
practicable.” One such obligation is described in paragraph 2.4 of
the addendum, which provides in pertinent part that “all debts of
Shoor Temple and Eagle Nasher . . . shall have been paid in full
by the [LLCs]” “[a]t the time of the transfer.”
Regarding the escrow company, paragraph 2 of the
judgment provides in pertinent part: “Upon [respondents’]
receipt of the principal sum of $1,325,000.00, all accrued interest
23
thereon at the maximum legal rate, and the attorney’s fees
awarded by the Court in the amount of $5,500.00 from
[appellants], which sum shall be paid through a third party
escrow company, [respondents] shall transfer to [appellants] all of
their membership interests, right, title, interest and claims in
and to Shoor Temple and Eagle Nasher and the assets
thereof . . . .” (Italics added.) No other provision of the judgment
mentions the responsibilities of this third party escrow company.
Appellants contend the judgment deviates from the
settlement agreement because it does not charge the escrow
company with “handl[ing] the payment of the debts of the [LLCs]
which are to be paid ‘at the time of the transfer[.]’ ” 14
Respondents counter the judgment does not diverge from the
settlement agreement because it is “obvious” that “[t]he escrow
company will be required to follow all of the terms of the
Judgment, which includes paragraph 3 that specifies exactly the
debts that must be paid at the time of closing of the transaction.”
Based on the parties’ respective positions, we assume that
the settlement agreement requires the escrow company to
manage the payment of the LLCs’ debts. (See Artal, supra,
14 Although appellants suggest in their opening brief the
judgment is deficient because it “does not establish an escrow for
the transaction” (underscoring & capitalization omitted),
respondents disagree, claiming that “at the time Judgment was
entered, the evidence established that a mutually agreed escrow
had been opened and . . . there is no evidence in the record that
the parties[’] selected escrow company had been discharged or
that the parties had mutually terminated that escrow.” By
failing to respond to respondents’ counterargument in the reply
brief, appellants tacitly admit this appellate claim lacks merit.
(See Rudick, supra, 41 Cal.App.5th at pp. 89–90.)
24
111 Cal.App.4th at p. 275, fn. 2.) Further, the text quoted in the
first two paragraphs of this section shows that although the
settlement agreement requires the escrow company to administer
the payments and obligations identified in the instrument, the
judgment does not contain language ordering the escrow
company to ensure payment of the LLCs’ obligations.15 Upon
remand, the new judgment entered by the trial court shall
remedy this error. (See Machado, supra, 39 Cal.App.5th at
p. 796 [“Having granted [a] request [to enter judgment pursuant
to the terms of a settlement under section 664.6], the trial court
could not later omit or modify some of those same terms from the
parties’ agreement.”].)
Concerning the payoff of the LLC debts to be overseen by
the escrow company, appellants also complain that although the
settlement agreement “specifies that the debts are to be paid by
the [LLCs], the Judgment does not.” Specifically, whereas
paragraph 2.4 of the addendum to the stipulation obligates the
LLCs to pay their debts on the date of transfer, paragraph 3 of
the judgment states that debts of the LLCs “shall be paid in
full . . . .”16 (Italics added.) We agree with appellants that this
use of the passive voice in the judgment “creates an ambiguity
and potential for future disputes.” Because this aspect of the
15 Appellants concede in their reply brief, however, that
the language used in paragraph 2 of the judgment does, in effect,
require the escrow company to “transfer the full purchase
price . . . from [appellants] to [respondents] and transfer their
membership interests to [appellants].”
16 We address the judgment’s language concerning the
payment of the LLCs’ debts that “existed on April 26, 2020” in
Discussion, part E, post.
25
judgment is not “ ‘in exact conformity with [the] agreement . . . of
the parties[,]’ ” the trial court erred in employing this language.
(See Machado, supra, 39 Cal.App.5th at p. 794.) The new
judgment entered by the trial court upon remand shall provide
that the two LLCs are responsible for paying these debts.
Appellants ask that we also direct the court to “obtain the
agreement of the parties as to how the debts of the [LLCs] are to
be paid” if the LLCs “are unable to pay” them. Appellants
concede that “the parties did not address this [issue] in the
Settlement Agreement and the trial court did not address this in
the Judgment.” Yet, appellants cite no authority for the
proposition that the trial court may compel the parties to agree
on how to address a contingency not covered by their settlement.
We thus do not discuss this matter further. (See Cahill v. San
Diego Gas & Electric Co. (2011) 194 Cal.App.4th 939, 956
[“ ‘ “When an appellant fails to raise a point, or asserts it but fails
to support it with reasoned argument and citations to authority,
we treat the point as waived.” ’ ”].) We express no opinion on
what legal recourse would be available to the parties in the event
the transaction cannot be completed because the LLCs lack
assets sufficient to pay off their debts.
E. Appellants Fail To Establish the Trial Court
Materially Altered the Debts to Be Paid Upon
Transfer of Respondents’ Interests in the LLCs
Paragraph 2.4 of the addendum to the stipulation provides:
“At the time of the transfer, all debts of Shoor Temple and Eagle
Nasher, including, but not limited to payroll taxes in the amount
of ~$25,000 for the year 2019, and property taxes, in the amount
of ~$30,000, for the year of 2018, shall have been paid in full by
the [LLCs]. Excluded from the above sentence are all debts
26
personally created by Joseph or [Jilia17 ], or which either of them
concealed from [respondents].”
In turn, paragraph 3 of the judgment states: “At the time
of [respondents’] transfer of their membership interests in Shoor
Temple, LLC and Eagle Nasher, LLC to [appellants], all debts of
Shoor Temple, LLC and Eagle Nasher, LLC that existed on
April 26, 2020 and in the amounts that they existed on
April 26, 2020, shall be paid in full,[18 ] except for the debts
created solely by Joseph Youshaei including the loan from Pacific
Enterprise Bank which loan shall remain the responsibility of
Shoor Temple, LLC and Eagle Nasher, LLC following the
transfer of the membership interest by [respondents.]”19
Appellants maintain that paragraph 3 of the judgment
“materially alters the debts that are to be paid at transfer.”
(Underscoring & capitalization omitted.) First, appellants
complain that “[t]he judgment provides that only the debts
existing on . . . April [26], 2020 are to be paid,”20 whereas they
17 Although this provision refers to “debts personally
created by Joseph or Gila” (italics added), the parties indicate in
their briefing that the settlement agreement uses the name
“Gila” to refer to appellant Jilia Youshaei.
18 As we explained in Discussion, part D, ante, upon
remand, the trial court must enter a new judgment clarifying
that the LLCs shall pay these debts in full.
19 In their appellate briefing, neither side supplies us with
the specifications of the Pacific Enterprise Bank loan (e.g., its
initial principal balance and the date of origination). This
omission has no impact on our disposition of the instant appeal.
20 Although appellants refer to “April 30, 2020” in
connection with this argument, this appears to be a typographical
error because they concede that paragraph 3 of the judgment
27
claim that paragraph 2.4 of the addendum to the stipulation
“specifies that the debts existing at the time of the transfer are to
be paid.” Second, appellants argue that the trial court should not
have excluded the Pacific Enterprise Bank loan from the debts to
be paid upon transfer. We reject each of these contentions.
In raising the first contention, appellants mischaracterize
April 26, 2020 as merely “the original anticipated transfer
date . . . .” Paragraph 2.2 of the addendum provides that
appellants “shall pay the total sum of $1,325,000.00 to
[respondents], within 60 days of the full execution of this
Settlement Agreement” (italics added), paragraph 2.3 in turn
provides that respondents shall transfer their membership
interests “[u]pon the full payment” of that amount, paragraph 2.4
requires the LLCs to pay their debts “[a]t the time of the
transfer,” and there is no dispute the settlement agreement was
executed on February 26, 2020. Consequently, it is apparent the
parties agreed that the transaction at issue, including the
payment of the LLCs’ debts, would occur no later than 60 days
after February 26, 2020, to wit, April 26, 2020.21
Yet, under appellants’ interpretation of paragraph 2.4 of
the addendum, the LLCs must pay the debts outstanding as of
the date of the transfer (which has yet to occur)—regardless of
whether the date of transfer actually occurs at a point in time
much later than April 26, 2020. Elsewhere in their briefing,
required the LLCs to pay debts “that existed on April 26, 2020
and in the amounts that they existed on April 26, 2020 . . . .”
(Boldface & italics omitted.)
21 We take judicial notice of the fact that April 26, 2020
was 60 days after February 26, 2020. (Evid. Code, §§ 452,
subd. (h), 459.)
28
appellants make admissions demonstrating that this
interpretation may prejudice respondents. Appellants contend
the LLCs “were losing money at the time of the hearing [on
respondents’ motion to enforce the settlement] and would likely
not have the ability to pay the debts at the time of the
transfer . . . .” Appellants further claim that because of the
financially precarious situation of the LLCs, “[t]he only logical
method of ensuring that the [LLCs] pay the [LLCs’] debts by the
time of the transfer . . . is to (a) require that the members each
contribute their pro-rata share of the funds necessary to pay the
debts or (b) require that a portion of the purchase price equal to
the [LLCs’] debts multiplied by Farbod’s percentage membership
interest be held by escrow to pay his portion of the [LLCs’] debts.”
Thus, appellants’ interpretation of the settlement
agreement would require respondents to shoulder a portion of the
financial burden resulting from the LLCs’ supposed present
inability to pay their debts, whereas the trial court’s construction
would (per appellants’ admission) result in respondents bearing
their proportionate share of the shortfall (if any) that may have
existed had appellants timely performed on or before the
April 26, 2020 deadline. We believe the trial court’s reading is
correct because it accounts for the parties’ apparent attempt to
limit their respective liabilities in accordance with the
April 26, 2020 deadline, whereas appellants’ interpretation
ignores this deadline and relies on an isolated phrase from
paragraph 2.4 of the addendum (i.e., that the LLCs shall pay the
debts “[a]t the time of the transfer”). (See Civ. Code, § 1641 [“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.”].)
29
Appellants argue that “[t]he judgment dramatically
changes the economics of the settlement deal and incentivizes
[respondents] to mismanage the [LLCs], incur additional debt,
[and] take for themselves monies that should be used to pay the
ongoing liabilities and debts of the [LLCs].” Because we order
the trial court to limit the scope of the judgment’s release of
claims to only those arising on or before February 26, 2020 (see
Discussion, part F, post; Disposition, post), appellants would not
be barred from seeking relief for any malfeasance hypothetically
perpetrated by respondents after that date. We thus reject
appellants’ contention that the trial court’s interpretation
incentivizes respondents to mismanage the LLCs.
Regarding the provision of the judgment excepting the
Pacific Enterprise Bank loan from the debts to be paid upon
transfer of respondents’ interests in the LLCs, appellants claim
that substantial evidence does not support this exception. In
particular, appellants direct us to a declaration Joseph submitted
to the trial court, wherein he stated that when he signed the
settlement agreement, he “did not intend or understand that the
entirety of the Pacific Enterprise Bank loan would be [his]
responsibility.”
“ ‘California recognizes the objective theory of contracts
[citation], under which “[i]t is the objective intent, as evidenced
by the words of the contract, rather than the subjective intent of
one of the parties, that controls interpretation” [citation].’ ”
(Iqbal v. Ziadeh (2017) 10 Cal.App.5th 1, 8 (Iqbal).) Accordingly,
Joseph’s subjective intent has no bearing on whether the trial
court properly construed paragraph 2.4 of the addendum.
Furthermore, in connection with respondents’ motion,
Farbod submitted a supplemental declaration wherein he stated:
30
“I was not made aware of the [Pacific Enterprise Bank] loan until
after it was obtained by Joseph Youshaei and did not participate
in or sign any document relating to obtaining this loan.” This
evidence that Joseph obtained the Pacific Enterprise Bank loan
without Farbod’s foreknowledge and involvement indicates that
Joseph “personally created” the debt for the purposes of
paragraph 2.4’s exclusion clause. Appellants do not explain why
Farbod’s testimony on this point does not constitute substantial
evidence supporting the trial court’s interpretation of
paragraph 2.4. Accordingly, we hold that substantial evidence
supports the trial court’s construction of section 2.4 of the
addendum as excluding this loan from the transaction. (See
Iqbal, supra, 10 Cal.App.5th at p. 8 [“ ‘Extrinsic evidence is
admissible to prove a meaning to which the contract is
reasonably susceptible.’ ”]; Thompson, supra, 6 Cal.App.5th at
p. 981 [“A single witness’s testimony may constitute substantial
evidence to support a finding.”].)
Lastly, appellants claim (1) the parties could not have
intended to exclude the Pacific Enterprise Bank loan from the
debts paid upon transfer because it is “the single largest debt of
the [LLCs,]” and (2) Farbod somehow deceived appellants into
believing that the Pacific Enterprise Bank loan was not a debt
“personally created by” Joseph or Jilia or which “either of them
concealed from [respondents]” for the purposes of paragraph 2.4
of the addendum. The first of these contentions fails because
appellants do not substantiate it with any citation to the record.
(See Alki Partners, LP, supra, 4 Cal.App.5th at p. 590, fn. 8
[“[C]ourts will decline to consider any factual assertion
unsupported by record citation at the point where it is
asserted.”].) We reject the second claim because it is not
31
supported by any cogent argument or legal analysis. (See
Hernandez, supra, 37 Cal.App.5th at p. 277 [holding that a
reviewing court may disregard such unsupported claims of
error].)
In sum, appellants have not shown the trial court erred in
requiring the LLCs, in the course of effecting the transaction
contemplated by the settlement agreement, to pay off only the
debts that existed on April 26, 2020, nor have they shown the
court erred in excluding the Pacific Enterprise Bank loan from
the debts of the LLCs to be paid.22
F. The Trial Court Erred in Changing the Effective
Date of the Releases
Appellants complain that the trial court changed the
effective date of the settlement agreement’s releases from
February 26, 2020 to the date of entry of the judgment.
Respondents claim that “the Settlement Agreement did not
specifically address when the releases were to be effective.”
We disagree with respondents.
The releases in paragraph 3 of the addendum to the
stipulation use the present tense verbs “release” and “discharge”
and then proceed to describe the claims that are extinguished by
the settlement.23 Thus, the language of the settlement
22 Because we conclude the trial court did not err in
construing the settlement agreement to except the Pacific
Enterprise Bank loan from the transaction, we need not address
appellants’ assertion that the parties did not amend the
agreement to exclude this obligation from the debts to be paid
upon transfer.
23 Paragraph 3 of the addendum, which is actually
comprised of two paragraphs, provides in pertinent part:
32
agreement establishes that the releases have the same effective
date as the settlement itself, to wit, February 26, 2020. (See
People v. Loeun (1997) 17 Cal.4th 1, 11 [“ ‘[The legislative] use of
a verb tense is significant in construing statutes.’ ”]; see also
Christian v. Flora (2008) 164 Cal.App.4th 539, 551 (Christian)
[“Contracts . . . are writings to be construed in accordance with
substantially the same canons of interpretation as statutes.”].)
By providing that the parties’ claims “are hereby released” in
paragraph 4 of the judgment, the trial court changed the effective
date to the entry of the judgment, to wit, April 30, 2021.
Respondents also suggest that February 26, 2020 could not
possibly be the effective date of the releases because “no
consideration [was] to be paid” on that date. Given the aforesaid
language in paragraph 3 of the addendum to the stipulation
establishing the releases therein became effective mutually on
February 26, 2020, we fail to discern the relevance of appellants’
April 26, 2020 deadline to pay the purchase price. (See
Discussion, part E, ante [explaining Apr. 26, 2020 was appellants’
payment deadline]; see also Pack v. Kings County Human
“[Appellants] fully release and forever discharge [respondents],
from all claims . . . which [appellants] have or could have pleaded
or alleged, against [respondents] relating to or arising out of [the
two consolidated actions], including the entirety of the claims and
underlying allegations in the [two consolidated actions]. [¶]
[Respondents] fully release and forever discharge [appellants],
from all claims . . . which [respondents] have or claim to have, or
could have pleaded or alleged, against [appellants] relating to or
otherwise arising out of the [two consolidated actions], including
the entirety of the claims and underlying allegations in the [two
consolidated actions], except for the obligations otherwise stated
in this Agreement.”
33
Services Agency (2001) 89 Cal.App.4th 821, 826, fn. 5 (Pack)
[“ ‘Although it is the appellant’s task to show error, there is a
corresponding obligation on the part of the respondent to aid the
appellate court in sustaining the judgment. “[I]t is as much the
duty of the respondent to assist the [appellate] court upon the
appeal as it is to properly present a case in the first instance, in
the court below.” ’ ”].)
In addition, respondents argue that “there are many
provisions of the Settlement Agreement that while binding upon
execution, were not to take effect until specified future dates,
[e.g.,] the payment of the $1,325,000 by April 26, 2020 in
exchange for the transfer of the membership interests.” The fact
that the settlement agreement does not specify a post-
February 26, 2020 effective date for the releases but does identify
certain later deadlines for its other obligations in fact undercuts
respondents’ position. Had the parties intended to have the
releases become effective at some later date, they presumably
would have stated as such in the settlement agreement, just as
they had for other obligations in the agreement. (See Gikas v.
Zolin (1993) 6 Cal.4th 841, 852 [“Expressio unius est exclusio
alterius. The expression of some things in a statute necessarily
means the exclusion of other things not expressed.”]; see also
Christian, supra, 164 Cal.App.4th at p. 551 [holding that
contracts are to be “construed in accordance with substantially
the same canons of interpretation as statutes”].)
Thus, we agree with appellants that the trial court changed
the effective date of the releases. It lacked the authority to do so.
(See Machado, supra, 39 Cal.App.5th at p. 792 [“ ‘[W]hat the
court could not do in considering approval of a settlement under
34
Code of Civil Procedure section 664.6 was to add to or modify an
express term of the settlement.’ ”].)
G. The Trial Court Erred in Omitting the Cooperation
Clause From the Judgment
Paragraph 2.9 of the addendum to the stipulation provides:
“[Respondents] shall cooperate with Joseph Youshaei in his
efforts to obtain financing for the payment of the monies due
hereunder, including providing information reasonably required
by a lender as soon as practicable after a written request
therefor.”
Appellants correctly point out that the judgment does not
contain this cooperation clause from the settlement agreement.
Respondents claim that this omission does not warrant reversal
of the judgment because appellants have not shown that
paragraph 2.9 of the addendum is a material term, “[t]here is
nothing in the record to support a finding as urged by Appellants
that the obligation to reasonably cooperate continues beyond the
agreed closing date or whenever Appellants chose to try to get a
loan after [Joseph’s] breach,” and this term was already “fully
performed by Respondents.” We find none of respondents’
arguments persuasive.
As a preliminary matter, we note that respondents cite no
authority for the proposition that in entering judgment pursuant
to a settlement under section 664.6, the trial court can simply
omit an entire provision that it deems to be immaterial to the
parties’ agreement.24
24 (See Pack, supra, 89 Cal.App.4th at p. 826, fn. 5 [noting
that the respondent is obligated to assist the reviewing court in
sustaining the judgment].)
35
In any event, we elect to address whether the cooperation
clause is a material term. Respondents assert the fact that
appellants’ obligation to pay the purchase price is not contingent
on whether they obtain financing “proves” that the cooperation
clause is not material.
Under our state’s contract law, “a term may be ‘material’ in
one of two ways: It may be a necessary term, without which
there can be no contract; or, it may be an important term that
affects the value of the bargain.” (See Facebook, Inc. v. Northwest
Software, Inc. (9th Cir. 2011) 640 F.3d 1034, 1037–1038.) The
cooperation clause readily satisfies the second part of this
definition of materiality. Paragraph 2.9 of the addendum
obligates respondents to “cooperate with Joseph Youshaei in his
efforts to obtain financing for the payment of the monies due
hereunder . . . .” (Italics added.) This text demonstrates the
purpose of paragraph 2.9 is to facilitate the transaction identified
as the “consideration between the parties” in the agreement, to
wit, the transfer of respondents’ interests in the LLCs to
appellants in exchange for the purchase price.25 (Boldface &
capitalization omitted.) The cooperation clause clearly impacts
whether the parties can ultimately consummate the transaction.
The text of paragraph 2.9 does not state precisely when
respondents are excused from their obligation to cooperate with
Joseph in his efforts to obtain financing. Respondents seem to
argue that paragraph 2.9’s silence on this point demonstrates the
clause “was only applicable to Appellants’ efforts to obtain
financing for the required purchase by the agreed closing date of
25 (See Civ. Code, § 1638 [“The language of a contract is to
govern its interpretation, if the language is clear and explicit, and
does not involve an absurdity.”].)
36
April 26, 2020.” As we explained in the paragraph above,
however, the text of this provision demonstrates it is an
important means of effectuating the transfer that is at the heart
of the agreement. Given that fact, the absence of an expiration
date for the cooperation clause suggests the parties intended for
the provision to remain in effect until the transaction is
ultimately consummated. Moreover, given that the type of
“cooperat[ion]” contemplated by paragraph 2.9 “includ[es]
providing information reasonably required by a lender as soon as
practicable after a written request therefor,” it is not apparent to
us that the obligations imposed by this provision are so onerous
that leaving it intact beyond April 26, 2020 would necessarily
contravene the contracting parties’ intent. Under these
circumstances, we believe the trial court erred in tacitly
concluding that paragraph 2.9 had expired.
Lastly, respondents assert that because “[t]here was
substantial evidence in the record to support a finding that [they]
did in fact reasonably cooperate with Appellants in their
attempts to obtain financing,” paragraph 2.9 of the addendum
“has . . . been fully performed by Respondents.” Although
whether respondents have already fully performed their duties
under the cooperation clause “may be relevant to the enforcement
of the judgment, once entered,” that matter is “not relevant to the
entry of judgment pursuant to section 664.6.” (See Machado,
supra, 39 Cal.App.5th at pp. 795–796.) Rather, “ ‘[t]he power of
the trial court under Code of Civil Procedure section 664.6 . . . is
extremely limited’ ” to “enter[ing] judgment ‘pursuant to the
terms of the settlement[.]’ ” (See Machado, at pp. 792, 796.)
For these reasons, we conclude that the trial court erred in
failing to include the cooperation clause in its judgment.
37
H. The Trial Court Erred in Omitting From the
Judgment the Provision Barring Respondents From
Communicating with Kenneth Kaplan
Paragraph 2.7 of the addendum to the stipulation provides:
“[Appellants] shall hold harmless and indemnify [respondents],
and defend [respondents], from all claims, damages, settlements,
and/or judgments entered or which may be entered against
[respondents], and/or against Shoor Temple and Eagle Nasher, in
Case No[.] SC129602, in favor of [Kenneth] Kaplan or his
company, or in favor of any assignee or successor-in-interest of
Kaplan or any plaintiff or cross-complainant therein.
[Respondents] will cease communicating with Kaplan and his
counsel except under legal compulsion.”
Appellants accurately observe that the last sentence of
paragraph 2.7 of the addendum is absent from the judgment.
Instead, paragraph 5 of the judgment includes only the
indemnification and duty to defend protections provided in
paragraph 2.7.
Respondents claim the judgment did not need to include
this ban on communicating with Kaplan and his counsel because
appellants have failed to demonstrate this is a material term of
the settlement agreement. We reject this argument because
respondents fail to support it with pertinent legal authority. (See
Pack, supra, 89 Cal.App.4th at p. 826, fn. 5.)
Although we do not suggest that section 664.6 compelled
the trial court to recite verbatim every word of the settlement
agreement, we do hold the court was dutybound to render a
judgment that “accurately reflect[s] the terms of the parties’
settlement agreement.” (See Machado, supra, 39 Cal.App.5th at
38
pp. 792, 801.) Upon remand, the court shall include the
noncommunication clause in its new judgment.
I. Appellants’ Request for the Inclusion of the
Confidentiality Provision in the Judgment Is Moot
Paragraph 4 of the addendum to the stipulation states:
“The parties agree to keep the existence and terms of this
Agreement confidential, and not disclose the existence or terms of
this Agreement, to anyone other than their attorneys, affiliates,
and employees of their attorneys and affiliates, tax advisors,
accountants, and/or financial consultants, healthcare provider(s),
spouse(s) or parent(s), or as specifically and expressly required by
statute, subpoena, law, or court order. The Parties may disclose
the settlement amount to the United States Internal Revenue
Service or any other taxing authority as required by law. This
Paragraph shall not preclude the Parties from responding
truthfully to inquiries made in connection with any legal or
governmental proceeding pursuant to subpoena, nor preclude the
disclosure of the terms or existence of this Agreement as may be
required by law or otherwise ordered by the Court in any
potential related claim, action, or proceeding.”26
In their opening brief, appellants contest the trial court’s
failure to include this confidentiality provision in the judgment.
26 We note that the following text from the stipulation
permitted respondents to disclose the terms of the settlement to
the trial court: “[This settlement] is admissible and subject to
disclosure, despite the otherwise enforceable requirements of
confidentiality, solely for the purpose of establishing in court that
an agreement has been reached by the parties for purpose of
enforcing and interpreting that agreement.”
39
They claim that “[t]his provision . . . must be included in the
Judgment for it to comply with section 664.6.”
In their appellate brief, respondents argue the relief
appellants seek is “moot” because appellants did not “file a
motion to seal the underlying Motion to Enforce the Settlement
Agreement and all related pleadings,” but “instead openly cite
and argue the term[s] of the Settlement Agreement in a public
forum.” By offering no response to this argument in their reply
brief, appellants impliedly admit that they never sought
permission to seal any filings relating to the settlement
agreement. (See Rudick, supra, 41 Cal.App.5th at pp. 89–90.)
Those documents are publicly accessible. (See Cal. Rules of
Court, rule 2.550(c) [“Unless confidentiality is required by law,
[trial] court records are presumed to be open.”].)
Turning to the mootness issue, “ ‘ “ ‘when . . . an event
occurs which renders it impossible for [the] court, if it should
decide the case in favor of plaintiff, to grant him any effectual
relief whatever, the court will not proceed to a formal
judgment . . . .’ [Citations.]” [Citation.] The pivotal question in
determining if a case is moot is therefore whether the court can
grant the plaintiff any effectual relief. [Citations.] If events have
made such relief impracticable, the controversy has become . . .
moot. [Citations.]’ ” (See Parkford Owners for a Better
Community v. County of Placer (2020) 54 Cal.App.5th 714, 722.)
As we explained earlier in this section, the terms of the
settlement agreement are already a matter of public record.
Furthermore, assuming arguendo appellants could mitigate some
of the prejudice resulting from this public disclosure by
requesting the trial court to seal filings relating to the settlement
upon remand, appellants have not represented any intent to seek
40
any such relief, let alone demonstrated a legal entitlement to do
so. Appellants have not sought leave to file their appellate briefs
under seal either. In sum, we conclude appellants’ claim of error
concerning the judgment’s failure to include the settlement
agreement’s confidentiality provision is moot, and we do not
further address it.
41
DISPOSITION
We reverse the judgment to the extent that it:
(a) conditions the transfer of respondent Farbod Youshei’s and
respondent Helena Radnia’s rights to Shoor Temple, LLC and
Eagle Nasher, LLC, and the assets thereof, on appellant
Joseph Youshaei’s and appellant Jilia Youshaei’s payment of the
$5,440 attorney fee award; (b) does not provide that the third
party escrow company shall facilitate Shoor Temple, LLC’s and
Eagle Nasher, LLC’s payment of their debts; (c) provides that the
parties’ releases are effective as of April 30, 2021 instead of
February 26, 2020; (d) omits the settlement agreement’s
cooperation clause; and (e) omits the provision from the
settlement agreement requiring respondents to cease
communicating with Kenneth Kaplan and his counsel except
insofar as respondents are under legal compulsion to do so.
We affirm the remainder of the judgment. Upon remand,
the trial court shall enter a new judgment that is consistent with
this opinion. The parties are to bear their own costs on appeal.
NOT TO BE PUBLISHED.
BENDIX, Acting P. J.
We concur:
CHANEY, J.
WEINGART, J.
42