Can you appeal an order on a motion to enforce a settlement agreement? And if so, why aren’t these orders listed in the appealable orders statute of Code of Civil Procedure section 904.1?
The functional answer to the question is yes: orders on motions to enforce a settlement probably are appealable. But the court in *Rezzadeh v. Chiu* (D5 Dec. 13, 2021) 2021 WL 5873074 (nonpub. opn.) suggests the reason this is not obvious in the statute is that litigants are not supposed to have to take appeals from the orders. Instead, trial courts are supposed to be entering judgments on those orders. And then the appeal, naturally, would be taken from the judgment.
In Rezzadeh, the parties settled a lawsuit over the appellant-buyer’s purchase of an apartment building. The buyer could not come up with funding in time, and the respondent closed the escrow. The buyer moved to enforce the settlement agreement under Code of Civil Procedure section 664.6, but the trial court denied it, finding time was of the essence and the respondent had properly canceled the escrow based on the buyer’s failure to fund.
The order denying the appellant-buyer’s motion to enforce the settlement was an appealable order. And the order was reversed on appeal, on the grounds that, while time was of the essence, the appellant still was entitled to notice and a contractual three-day cure period, which he had not been given.
On the appealability question, the court cited to *Hines v. Lukes* (2008) 167 Cal.App.4th 1174, where an order granting a motion to enforce a settlement was held appealable because “the effect of the order ... was to finally determine the rights of the parties in this action by enforcing the settlement agreement.” (Id. at p. 1183.)
What about an order denying a motion to enforce settlement? The Rezzadeh could found there was “no functional difference.” In either event, the trial court's order “functionally terminated all litigation between the parties.” “Indeed, if this were not the case the trial court's order would be insulated from any form of review....”
Ok, so orders granting motions to enforce a settlement are appealable. And orders denying motions to enforce a settlement are appealable. So why didn’t the legislature just say so in section 904.1? Rezzadeh suggests two answers:
First, the court suggests that orders on motions to enforce a settlement under section 664.6 should be entered as judgments. The court states that “the [trial] court's entry of judgment is a necessary component of enforcement under section 664.6, regardless of how the agreement is enforced. Orders finally resolving disputes should thus be treated as appealable judgments if the court does not enter a separate judgment.” So if the trial court enters a judgment, obviously the appeal would be taken from the judgment, and no question of appealability arises.
Second, under section 664.6, the settlement agreement is itself converted into a judgment. And thus the order on the motion to enforce it is a postjudgment motion, enforceable as such under section 904.1(a)(2). Quoting from Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793 at page 809, the court notes: “Prior to the enactment of section 664.6, a party seeking to enforce a settlement agreement had to file a new action alleging breach of contract.... Section 664.6 was enacted to provide a summary procedure for specifically enforcing a settlement contract without the need for a new lawsuit.” The Rezzadeh court then notes that this happens by converting the settlement agreements into judgments that are then enforceable by the original court. (Weddington, supra, at p. 797.) “If the court determines that the parties entered into an enforceable settlement, it should grant the motion and enter a formal judgment pursuant to the terms of the settlement.” (Hines, supra, 167 Cal.App.4th at p. 1182.) It may then enforce or not enforce the judgment through its inherent powers and the summary proceedings of section 664.6. (Machado v. Myers (2019) 39 Cal.App.5th 779, 796 fn. 13 (Machado); Wackeen v. Malis (2002) 97 Cal.App.4th 429, 432 fn. 1, 439– 440.)
The parties here did not dispute there was a binding and enforceable agreement. So the settlement should be considered a judgment, and the order a postjudgment order appealable under section 904.1(a)(2).
(What happens if a settlement is found not to be binding and enforceable as a judgment? The court does not say.)
Settling a case is not the end. You may need to be prepared to invoke your appellate rights until a settlement is fully executed.
Tim Kowal helps trial attorneys and clients win their cases and avoid error on appeal. He co-hosts the Cal. Appellate Law Podcast at www.CALPodcast.com, and publishes a newsletter of appellate tips for trial attorneys at www.tvalaw.com/articles. His appellate practice covers all of California's appellate districts and throughout the Ninth Circuit, with appellate attorneys in offices in Orange County and Monterey County. Contact Tim at tkowal@tvalaw.com or (714) 641-1232.
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