Buckhorn v. Hettinger

Background

The plaintiffs included several employee benefit plans, their trustees, Jack Buckhorn, and Fregoso Builders, Inc. They sought to enforce claims arising from Hettinger’s alleged unpaid employee-benefit contributions and Fregoso’s payment of $39,350.97 to the benefit funds to resolve a stop notice concerning the Sonoma State Project. The parties later participated in settlement negotiations before Magistrate Judge Alex Tse.

The settlement terms were stated on the record in open court. Hettinger agreed to pay $86,000: a $20,000 down payment when a written settlement agreement was signed, followed by $66,000 in equal installments over 66 months with 10% interest. The terms also included a stipulated judgment of approximately $163,000 that could be entered upon default, reduced by payments already made, and a mutual general release. The parties expected to prepare and sign written documents later.

Plaintiffs’ counsel prepared settlement documents and sent revised versions to Hettinger’s counsel. Hettinger’s counsel eventually said the agreement looked acceptable and that he would recommend that Hettinger sign it, but Hettinger did not sign. Plaintiffs then moved to enforce the settlement and requested sanctions. Hettinger opposed enforcement, arguing that the transcript did not state the payment dates, deadlines, or time periods and that the parties had not agreed to a written settlement.

Legal standard

The court explained that a federal district court may enforce a settlement reached in a case before it. The validity of the settlement was governed by California contract law. Under that law, a valid contract requires capable parties, mutual consent, a lawful purpose, and consideration—something of value exchanged between the parties. The court also explained that an oral settlement can be enforceable unless a law requires a written agreement.

Court’s analysis

The court found that the parties were capable of contracting and that their statements and conduct showed mutual assent under an objective standard. In particular, the court found that the parties agreed to the following material terms:

- An $86,000 settlement amount. - A $20,000 initial payment due when the written agreement was signed. - Signing the written agreement within four weeks. - Payment of the remaining $66,000 in equal installments over 66 months, plus 10% interest. - A stipulated judgment of approximately $163,000 that could be entered upon default, less amounts paid.

The court concluded that the settlement had a lawful purpose and was supported by consideration because Hettinger would make the settlement payments in exchange for the plaintiffs’ dismissal of the case. It also found that the settlement was complete because the parties had assented to all material terms in open court.

Because the terms and the parties’ assent were clear from the court record, the court ruled that an evidentiary hearing was unnecessary. It therefore rejected Hettinger’s argument that the lack of a signed written agreement prevented enforcement.

Sanctions

The plaintiffs sought sanctions for attorneys’ fees incurred after June 9, 2021. The court denied that request without prejudice because the local rule required a sanctions motion to be filed separately, and the plaintiffs had not filed it separately.

Disposition

The court granted the plaintiffs’ motion to enforce the parties’ settlement agreement and denied their request for sanctions without prejudice. It ordered that a separate judgment be entered and directed the Clerk of Court to close the case.