An order enforcing a settlement agreement is an appealable order, but what about an order denying enforcement of a settlement agreement? In a previous unpublished opinion (see Tim Kowal, ”Denial of Motion to Enforce a Settlement Held Appealable....” Dec. 20, 2021), one court reminded the bar that parties really ought to have orders on settlement-enforcement matters under Code of Civil Procedure section 664.6 entered as judgments: that way, there’s no doubt as to their appealability. But that court gave some leeway and concluded there was “no functional difference” between a grant and a denial of costs.
But the Second District gave no such leeway in its published opinion in Sanchez v. Westlake Services, LLC (D2d7 Jan. 18, 2022 No. B308435) ___ Cal.Rptr.3d ___, 2022 WL 1522087. In Sanchez, the parties settled a consumer rights lawsuit concerning the sale of a car, with the settlement providing that the plaintiff may seek a motion for attorney fees. The trial court denied fees as barred by the sale contract. The plaintiff appealed the order denying her fees.
As discussed in another recent opinion in Rezzadeh v. Chiu (D5 Dec. 13, 2021) 2021 WL 5873074 (nonpub. opn.), an order granting a motion to enforce a settlement under Code of Civil Procedure section 664.6 is appealable. (Hines v. Lukes (2008) 167 Cal.App.4th 1174.) Rezzadeh dealt with an order denying a motion to enforce a settlement, and the court held there was “no functional difference” between a grant and a denial of costs because the trial court's order “functionally terminated all litigation between the parties.” And besides, “if this were not the case the trial court's order would be insulated from any form of review....”
But Sanchez went the other way on this. Sanchez held, in a published opinion, that an order denying enforcement of a settlement agreement under Code of Civil Procedure section 664.6 was not appealable.
First, the court noted that the notice of appeal cited subdivision (a)(2) of the appealability statute, Code of Civil Procedure section 904.1. Subdivision (a)(2) is for orders following a judgment. But there was no judgment here. So that ground doesn’t apply.
Second, the court declined to treat the appeal as premature. True, the plaintiff-appellant later requested dismissal, which the trial court clerk entered. But the appeal was not from the dismissal — it was from the order denying fees. This was not a premature appeal of the dismissal, and so it could not be “saved” as a premature appeal.
Even if the appeal of the denial of fees could have been treated as a premature appeal of the later dismissal, the court refused to exercise its discretion to do so. The court scolded counsel for failing to move to augment the record to include the dismissal (though the court considered the dismissal anyway). “Given the experience of Sanchez's counsel, no excuse or justification appears to exist for this failure to observe the rules governing appellate jurisdiction.”
Sanchez apparently assumed that denials of fee orders are not appealable **as a final judgment in and of itself under Code of Civil Procedure section 904.1(a)(1). (The appellant appears not to have advanced the argument, but as appealability is jurisdictional, the court should consider it independently.) This assumption is contrary to Gassner v. Stasa (2018) 30 Cal.App.5th 346, 351-355, which held that a cost order following voluntary dismissal without prejudice is appealable "judgment" because it is a final determination of rights of the parties in the action, and thus “it is a judgment and appealable as such under Code of Civil Procedure section 904.1, subdivision (a)(1).”
Gassner was cited favorably by C.H. Reynolds Electric, Inc. v. Powers (D6 Aug. 24, 2021) no. H046554 (nonpub. opn.) (See Tim Kowal, “Although Contempt Orders May Not Be Appealed, Fee Awards on a Contempt Order Are Appealable,” Aug. 26, 2021.) C.H. Reynolds, cited the published opinion in Los Angeles Times v. Alameda Corridor Transportation Authority (2001) 88 Cal.App.4th 1381, 1388 (LA Times). LA Times held that, when it comes to fee orders, "[n]othing remains for future consideration, and no other opportunity exists for appellate review” and it “is therefore ‘properly viewed as a final judgment and hence appealable as such’ under section 904.1, subdivision (a)(1).” (LA Times, supra, 88 Cal.App.4th at p. 1389; see also Estate of Miramontes-Najera (2004) 118 Cal.App.4th 750, 755.) C.H. Reynolds extended this reasoning to denials of fees, not just grants.
Sanchez did not discuss these authorities or the reasoning they advanced. Thus, despite Sanchez, it remains an open question whether fee and cost orders after a settlement may be independently appealable.
Sanchez assumed that the plaintiff-appellant’s voluntary dismissal with prejudice would have been appealable. Sanchez did not cite authority or give reasons for this assumption. A word to the wary: do not count on voluntary dismissals being appealable. Here are three important factors to consider when analyzing whether a voluntary dismissal is appealable:
Sanchez offered no guidance on these points. It merely assumed voluntary dismissals with prejudice are appealable. Litigants should be prepared to argue that this is not necessarily the case, and the Court of Appeal should either make an explicit holding on this point, and if the dismissal is not appealable, then there probably ought to be some form of appellate review available.
Finally, Sanchez rejected the plaintiff-appellant’s argument that the order denying attorney fees should be treated as a collateral order and thus appealable on that basis. The court accepted the majority view that only orders that are (1) final, (2) collateral, and (3) direct the payment of money, may be treated as appealable collateral orders. (For a discussion of the minority view, see Tim Kowal, “The Trouble with Voluntary Dismissals,” Nov. 11, 2021.)
The Upshot: When you are considering appealing orders granting or denying motions to enforce a settlement agreement subject to the trial court’s jurisdiction under Code of Civil Procedure section 664.6, ask the trial court to enter a judgment on the order. That may be the only way to ensure the order is appealable.
And there are many trap doors when your appeal is mixed up with a dismissal.
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 email@example.com or (714) 641-1232.
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