Author: Annie Smiddy
In the case of Sayta v. Chu, on November 29, 2017 the Court of Appeal of the State of California, First Appellate District, clarified the requirements for enforcing settlement agreements pursuant to California Code of Civil Procedure Section 664.6 (“Section 664.6”). Most settlement agreements in pending litigation include a provision that provides for enforcement of the agreement pursuant to Section 664.6. The statute allows the parties to take advantage of an expedited procedure to enforce the agreement without filing a separate lawsuit. It’s cheaper, easier, and fulfills the purpose of the agreement – to resolve the parties’ dispute.
However, Sayta confirmed that the expedited procedure of Section 664.6 is only available when the parties request the trial court retain jurisdiction, either in writing or orally before the court, while the case is still pending, before entry of dismissal. The appellant in Sayta relied on the provision in the confidential settlement agreement stating that the parties agreed to enforce the agreement pursuant to Section 664.6. The Court of Appeals determined that this confidential agreement did not constitute a “request” for the trial court to retain jurisdiction, as required by Section 664.6. “‘[T]he court lost subject matter jurisdiction when the parties filed a voluntary dismissal of the entire cause. Since subject matter jurisdiction cannot be conferred by consent, waiver, or estoppel, the court cannot ‘retain’ jurisdiction it has lost.’” (Sayta, supra, citing Viejo Bancorp, Inc. v. Wood (1989) 217 Cal.App.3d 200, 206-207.)
The Sayta case serves as a reminder of the requirements to enforce settlement agreements under Section 664.6. First, make sure that the parties execute a stipulation for dismissal, or stipulate on the record before the court. The stipulation must include a request for the court to retain jurisdiction to enforce the settlement agreement pursuant to Section 664.6. A stipulation by counsel is insufficient, and the request must occur prior to dismissal of the case. Use of the Judicial Council Form dismissing the case will not retain jurisdiction. If the parties to follow the requisite procedure, the party seeking to enforce the settlement agreement under Section 664.6’s procedures should make a request pursuant to California Code of Civil Procedure Section 473 to vacate the dismissal. While some trial courts may be frustrated by the requests to retain jurisdiction, or by keeping a case on their dockets while the parties perform the terms of the settlement agreement, this case will make it easier to explain why the parties are making the request.