Code of Civil Procedure Section 664.6 Gets 86’d

On November 29, 2017, the California Court of Appeal issued its published opinion in Sayta v. Chu (A148823) which sets forth clear and express requirements for invoking Code of Civil Procedure section 664.6 and provides an unsympathetic lesson in the failure to comply with those requirements. 

California Code of Civil Procedure section 664.6 provides litigants a summary procedure to enforce a settlement agreement after the dismissal of the underlying suit.  Specifically, section 664.6 provides that, upon the request of parties in pending litigation, “the court may retain jurisdiction over the parties to enforce the settlement until performance in full of the terms of the settlement.”  (Cal. Code Civ. Proc. §664.6. [“Section 664.6”].) 

Sayta arose from efforts to terminate plaintiff’s tenancy with defendants.  Prior to trial, the parties entered into a written settlement agreement including a mutual release and dismissal of all claims, provisions for confidentiality, liquidated damages, and enforcement under Section 664.6. 

Pursuant to the settlement agreement, the entire action was dismissed.  Less than a year later, plaintiff filed a motion to enforce the settlement agreement under Section 664.6.  The trial court denied the motion on the merits and plaintiff appealed. 

On Appeal the court focused on the terms of the settlement agreement with respect to Section 664.6 and evaluated the conduct of the parties prior to dismissal.  The Agreement provided in relevant part:

"All parties shall dismiss their entire claims and causes of action ... subject to the parties' express agreement and request that the Court retain jurisdiction pursuant to [section] 664.6 to enforce the remaining terms of this settlement agreement and judgment in the event any party fails to comply with all the obligations set forth herein. In the event the matter is dismissed, and pursuant to the express statement set forth in Wackeen v. Malis (2002) 97 [Cal.App.4th] 429, the Court may nevertheless retain jurisdiction to enforce the terms of the settlement, until such time as all of its terms have been performed by the parties, as the parties requested this specific retention of jurisdiction. The parties agree that the Court may set aside dismissal if necessary, upon application by any party, for the purpose of enforcing the terms of this [Agreement] and entering judgment pursuant to its terms."

In vacating the trial court’s order, the Court of Appeal stated that, despite the language of the settlement agreement, nothing in the record demonstrated that any party requested that the court retain jurisdiction prior to dismissing the suit.  The court explained that the language of Section 664.6, as well as controlling authority, mandates that a request for retention of jurisdiction be “(1) during the pendency of the case, not after the case has been dismissed in its entirety, (2) by the parties themselves, and (3) either in a writing signed by the parties or orally before the court.”  (Sayta,v. Chu (Cal. Ct. App., Nov. 29, 2017, No. A148823) 2017 WL 5761195, at *4 quoting Wackeen v. Malis (2002) 97 Cal.App.4th 429, 440.)

The court explained that the language in the settlement agreement itself, without express request to the court, could not confer jurisdiction and unapologetically concluded that the trial court lost subject matter jurisdiction over the case when the dismissals were filed.  Simply put, subject matter jurisdiction after dismissal cannot be conferred by consent, waiver or estoppel, and the parties were required to make a proper request to the trial court to retain jurisdiction for the purpose of Section 664.6 motions for enforcement. 

Sayta highlights disapproval by California courts of the common practice of including Section 664.6 language in settlement agreements without express request to the court that it retain jurisdiction.  Indeed, the court in Sayta definitively concludes that retention of jurisdiction for settlement enforcement requires agreement of the court, not simply an agreement between the parties.   Sayta serves as a warning and reminder to all parties to obtain an agreement on the record (written preferably) that the court will retain jurisdiction under Section 664.6 before a matter is dismissed.  In application parties must be sure the court agrees to retain jurisdiction prior to dismissal or face a lack of subject matter jurisdiction in future efforts for settlement enforcement.