Olson v. Arnett

113 Cal. App. 3d 59, 169 Cal. Rptr. 629
California Court of Appeal·Decided December 10, 1980·No. 56380·Published·Cited by 22 cases

Opinion

113 Cal.App.3d 59 (1980)
169 Cal. Rptr. 629

CHARLES OLSON, Plaintiff, Cross-defendant and Appellant,
v.
DAMON ARNETT et al., Defendants, Cross-complainants and Respondents.

Docket No. 56380.

Court of Appeals of California, Second District, Division Five.

December 10, 1980.

*62 COUNSEL

William Jerome Pollack and Joan Celia Lavine for Plaintiff, Cross-defendant and Appellant.

Coyle, Marrone & Robinson, Phillip R. Marrone, Donald R. Worley and Randy Rezen for Defendants, Cross-complainants and Respondents.

*63 OPINION

ASHBY, J.

Appellant Charles Olson appeals from a judgment in favor of respondents Damon and Donald Arnett and Rick and Randall Chadock on respondents' cross-complaint for specific performance of a settlement agreement and damages for breach of such agreement.

Appellant sued respondents and others for personal injuries arising out of a motorcycle accident. Apparently the matter was scheduled to go to trial in October 1977. In a telephone conversation on October 6, 1977, between respondents' attorneys and appellant's attorneys, the case was settled for $15,000. Respondents' attorneys delivered a $15,000 draft to appellant's attorneys on October 7, but appellant and his attorneys returned the check, and did not return any releases or request for dismissal, claiming respondents had not complied with all the conditions of the settlement.

On October 19, 1977, respondents moved for an order bifurcating trial in order to try separately respondents' special defense labeled "Accord and Satisfaction." On December 8, 1977, the trial court permitted respondents to file a cross-complaint for specific performance to compel execution of the settlement agreement or in the alternative for damages for breach of the agreement. The cross-complaint also sought damages for substantial attorney's fees which respondents allegedly were required to incur in light of appellant's wrongful continuation of the underlying action.

After appellant's objection to the filing of the cross-complaint was overruled, appellant agreed that any further delay was not in his interest, and the bifurcated trial of the affirmative defense and the cross-complaint began that day.

The court submitted the issues to a jury by means of a special verdict involving five questions, which the jury answered as follows:

"Issue No. 1. Did the plaintiff's attorneys (William Pollack's Law Office) offer to accept the sum of $15,000.00 in full settlement of the plaintiff's claim against the defendants Arnetts and Chadocks on September 30, 1977? Answer `yes' or `no.'

"Answer: Yes.

*64 "Issue No. 2. Did the plaintiff Olson accept the settlement agreement negotiated by his attorney? Answer `yes' or `no.'

"Answer: Yes.

"Issue No. 3. Did the offer to settle (September 30, 1977) depend upon Arnett and Chadock's attorneys' written assurance that there was no further insurance coverage? Answer `yes' or `no.'

"Answer: No.

"Issue No. 4. If there was an agreement to settle, and if the settlement was accepted, and if Pollack's office later refused the acceptance, were the Arnetts and Chadocks damaged by this action? Answer `yes' or `no.'

"Answer: Yes.

"Issue No. 5. If Issue No. 4 was answered `yes' what is the amount of damages?

"Answer: $5,000."

The trial court ordered judgment on the special verdict as follows: "NOW, THEREFORE, IT IS ORDERED, ADJUDGED AND DECREED that plaintiff and cross-defendant shall specifically perform each and every provision of said settlement agreement, and shall execute those Releases and Requests for Dismissal with Prejudice necessary to effectuate said agreement.

"IT IS FURTHER ORDERED, ADJUDGED AND DECREED that defendants and cross-complainants shall recover from plaintiff and cross-defendant the sum of $5,000.00 as and for attorneys' fees and costs, which damages were necessarily incurred in defending against the underlying action for personal injuries and prosecuting the cross-complaint subsequent to the breach of said settlement agreement."

CONTENTIONS

Appellant contends (1) that the trial court abused its discretion and denied appellant due process notice by proceeding to trial the same day the cross-complaint was permitted to be filed; (2) that the evidence is *65 insufficient to show there was a settlement; (3) that the court erred in submitting a special verdict to the jury rather than instructing the jury on contract principles; and (4) that the court erred in permitting respondents to recover their attorneys' fees as damages for breach of the settlement agreement. We agree with appellant that the attorneys' fees were not recoverable but find appellant's other contentions to be without merit.

FILING OF CROSS-COMPLAINT

(1) There is no merit to appellant's contention he was denied adequate notice by the filing of the cross-complaint and the commencing of the bifurcated trial on the same day, December 8, 1977. As early as October 19, 1977, respondents had moved for a bifurcated trial of their special defense of accord and satisfaction. The declaration of Thomas Foster in support of that motion set forth in detail the circumstances of the settlement agreement. The cross-complaint based on the settlement agreement involved the same circumstances. Appellant has not shown he was prejudiced by the court's ruling commencing the bifurcated trial on the same day the cross-complaint was permitted to be filed. The underlying action had been scheduled to go to trial in October. Appellant was on notice at least since October 19 that there would be a defense based on the settlement agreement. No elaborate trial preparation was required, since the bifurcated trial on the settlement agreement involved negotiations taking place only two months before, among the attorneys themselves. In fact, appellant agreed with the court that any further delay was not in his interest.[1]

SUFFICIENCY OF EVIDENCE

(2) Appellant's main defense to the settlement agreement was that the agreement required as a condition precedent, never fulfilled, that respondents' attorneys furnish a declaration under penalty of perjury that $15,000 was the policy limit and that no other insurance was available. The jury found that this was not a condition of the agreement, and the only question is whether there is substantial evidence to support that determination. (Gregory v. Hamilton (1978) 77 Cal. App.3d 213, 220 [142 Cal. Rptr. 563].)

*66 The attorneys who negotiated the settlement on behalf of respondents testified that, although there had been discussion of policy limits, appellant's attorneys never demanded prior to October 7 that respondents furnish a declaration on policy limits as a condition to the settlement. According to respondents' attorneys, this objection was raised for the first time the afternoon of October 7, after the matter had been settled by telephone on October 6 and the $15,000 draft had been delivered the morning of October 7.

Appellant's attorney, Mr. Pollack, admitted that his settlement demand letter of September 30 did not set forth any such condition. In light of the testimony of respondents' attorneys as to the circumstances of this case in particular and general custom in the personal injury business, the jury was not required to believe Pollack's testimony that such a condition was routine and was implicit in his s

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Olson v. Arnett, 113 Cal. App. 3d 59, 169 Cal. Rptr. 629 (Cal. Ct. App. 1980).

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