ORDER GRANTING MOTION TO ENTER JUDGMENT PURSUANT TO SETTLEMENT
Re: Dkt. Nos. 243, 247, 253
YVONNE GONZALEZ ROGERS, District Judge.
Pending before the Court is plaintiff and counterclaim defendant Product and Ventures International's ("PVI") and counterclaim defendant Carlos Fairbanks' (together, the "moving parties") motion to enter judgment against defendants Axus Stationery (Shanghai) Co. Ltd., Shanghai Marco Stationery Co. Ltd., Shanghai Laikesheng Pen Material Co. Ltd. d/b/a Shanghai Lexon, Peifeng Xu, Andre Viegas, Kenpark Ltd., and defendant and counterclaimant Roberta Trading Corporation (collectively, "defendants") pursuant to the parties' oral settlement agreement made on the record during the January 25, 2018 settlement conference before United States Magistrate Judge Laurel Beeler. (Dkt. No. 243 ("Motion").)
The instant motion is straightforward, and unfortunately, not uncommon. The parties, and their counsel, participated in the settlement conference held on January 25, 2018. At the conclusion of the conference, Judge Beeler articulated the material terms of the settlement, the parties themselves and their attorneys agreed to those terms on the record, and Judge Beeler confirmed, on the record, that the settlement was "binding and enforceable." (Exh. A to Declaration of Randolph Gaw ISO PVI's and Carlos Fairbanks' Motion to Enter Judgment Pursuant to Settlement ("Tr.") at 6:16-17, Dkt. No. 245-1.) During the colloquy, the parties also noted that (i) a written agreement would issue, and (ii) the mechanics of the settlement, including the process for and timing of payment, were to be resolved after good faith investigation. No party indicated that either of those issues was to be a condition precedent to the binding nature of the settlement reached. Defendants now claim that the mechanics of payment was in fact a condition precedent to reaching a complete settlement, which remains unsatisfied, and also a material term such that the settlement thus cannot be enforced. For the reasons set forth herein, the Court disagrees and GRANTS the moving parties' motion.1
I. LEGAL FRAMEWORK
Section 664.6 of the California Code of Civil Procedure ("CCP") controls and provides in pertinent part:
If parties to pending litigation stipulate . . . orally before the court, for settlement of the case, or part thereof, the court, upon motion, may enter judgment pursuant to the terms of the settlement. If requested by the parties, the court may retain jurisdiction over the parties to enforce the settlement until performance in full of the terms of the settlement.
California courts routinely enforce this provision for settlements made on the record by parties and counsel to provide a "summary, expedited procedure" and promote "finality." Levy v. Superior Court, 10 Cal.4th 578, 585 (1995). An oral settlement recited in open court is enforceable under CCP section 664.6 even if the parties contemplated memorializing the agreement in writing, but never did. See Blix St. Records, Inc. v. Cassidy, 191 Cal.App.4th 39, 48 (2010) ("When parties intend that an agreement be binding, the fact that a more formal agreement must be prepared and executed does not alter the validity of the agreement."); cf. Elyaoudayan v. Hoffman, 104 Cal.App.4th 1421, 1430 (2003) (finding that failure of all parties to sign written agreement did not alter oral agreement's validity). Moreover, ordinary contract principles apply to the "construction and enforcement of settlement agreements." Jeff D. v. Andrus, 899 F.2d 753, 759 (9th Cir. 1989). Under California law, courts should focus on the parties' "objective intent as evidenced by the words of the [oral agreement], not [their] subjective intent . . . ." Elyaoudayan, 104 Cal. App. 4th at 1430 (first alteration in original) (internal quotation marks omitted).
II. DISCUSSION
Here, defendants do not deny that the parties participated in the settlement conference on January 25, 2018 or that the transcript reflecting the oral agreement before Judge Beeler is accurate. Rather, they only dispute the meaning of the same and advance an interpretation that is favorable to their position. Accordingly, the Court turns to the uncontroverted transcript to determine if the language of the oral agreement is "clear and explicit." Cal. Civ. Code § 1638.2 Thus:
THE COURT: Okay. All right. I am going to recite the terms of the settlement. I am going to ask the lawyers if I've missed anything, and then I'm going to ask the parties if they understand and accept the terms of the settlement.
The total settlement amount is $4.4 million.
The defendants are going to retain, through their counsel, Winston and Strawn, will retain an expert regarding the mechanics of payment by Chinese companies into a U.S. Bank.
If there is an impediment that is insurmountable, the parties will deal with it then.
I will continue to assist the parties with the mechanics of settlement.
The contemplation is that by February 15, Winston and Strawn will have — will report back to me and to plaintiff's counsel about the mechanics, with the understanding that sometimes, because of the timeline of retaining somebody and people's schedules, it might take more time. So everyone understands this is — that counsel working together in good faith will meet that deadline, but will accommodate reasonable requests for an extension.
Ultimately all of this will be — this payment will be in return for dismissal of the entire case, including the counterclaims with prejudice.
There will be a written settlement agreement which will contain a release of all claims in the litigation. There will be a mutual waiver of costs.
The parties will otherwise bear their own fees and costs because there will be likely process for the mechanics of payment.
The Court will — the parties have agreed that the Court will retain jurisdiction to enforce the terms of the settlement agreement, and I think that probably the contemplation is that the parties will consent to my retaining jurisdiction to enforce the terms of the settlement agreement with — with the remainder [sic] that you have to include that in the stipulated dismissal for it to be effective.
Have I missed anything from the plaintiff's perspective?
MR. GAW: No, your Honor.
THE COURT: So that's an accurate recitation of the settlement terms?
MR. GAW: Yes, your Honor.
THE COURT: And from the defendants' perspective?
MS. ENNS: Yes, your Honor. That's correct.
THE COURT: Okay. Good.
So, Mr. Fairbanks, do you understand the terms of the settlement that I've just recited into the record?
MR. FAIRBANKS: Yes, I do.
THE COURT: Do you understand that if you accept the terms, it ends the case and you can't reopen it?
MR. FAIRBANKS: Yes, I do.
THE COURT: Do you accept the terms of the settlement?
MR. FAIRBANKS: Yes, I do.
THE COURT: All right. And so Mr. Viegas, as defendant and counterclaimant, do you understand the terms of the settlement that I've just recited into the record?
MR. VIEGAS: Yes, I do, your Honor.
THE COURT: Okay. Do you understand that if you accept the terms, it ends the case and you can't reopen it?
MR. VIEGAS: Yes, I do, your Honor.
THE COURT: Do you accept the terms of the settlement?
MR. VIEGAS: Yes, I do, your Honor.
THE COURT: Okay. So with that we have a binding and enforceable settlement agreement with the material terms in the record.
(Tr. at 4:5-6:18.)
The language of the oral agreement unequivocally establishes that the issue of the "mechanics of payment" was secondary to PVI's right to receive the agreed-upon $4.4 million. The parties did not indicate that the settlement would not proceed without the mechanics being resolved first,3 and indeed the oral agreement shows an intent by the parties to enter into a binding accord regardless of an agreement as to the particular form of such mechanics. See, e.g., Tr. at 6:11-18 (showing that Judge Beeler explicitly indicated that by agreeing to the terms recited on the record, "it ends the case" and that the "material terms" as stated constituted a "binding and enforceable agreement"); see also Karpinski v. Smitty's Bar, Inc., 246 Cal.App.4th 456, 464 (2016) ("The existence of a condition precedent normally depends upon the intent of the parties as determined from the words they have employed in the contract.") (emphasis supplied) (internal quotation marks omitted); Hasso, 229 Cal. App. 3d at 1181 ("Conditions precedent are not favored and contractual provisions will not be so construed in the absence of language plainly requiring such a construction.") (emphasis supplied). Defendants' claim that the parties "expressly agreed" to a condition precedent is thus devoid of merit. (See Opposition to PVI's and Carlos Fairbanks' Motion to Enter Judgment Pursuant to Settlement ("Opposition") at 11, Dkt. No. 249.)4 That Judge Beeler and the parties indicated that they would work together with respect to the performance and enforcement of the agreed upon terms does not convert the same to a condition precedent.
Moreover, and relatedly, the "mechanics of payment" is not a material term such that the oral agreement's failure to specify its meaning renders the agreement incomplete and unenforceable. The Ninth Circuit has explained that:
[A] term may be "material" in one of two ways: It may be a necessary term, without which there can be no contract; or, it may be an important term that affects the value of the bargain. Obviously, omission of the former would render the contract a nullity. . . . But a contract that omits terms of the latter type is enforceable under California law, so long as the terms it does include are sufficiently definite for a court to determine whether a breach has occurred, order specific performance[,] or award damages. . . . This is not a very demanding test[.]
Facebook, Inc. v. Pac. Nw. Software, Inc., 640 F.3d 1034, 1037-38 (9th Cir. 2011) (internal citations omitted). As in Facebook, the agreement here "easily passes" that test. Specifically, the oral agreement includes terms "sufficiently definite . . . to determine whether a breach has occurred, order specific performance[,] or award damages," including the amount to be paid by defendants to PVI, that the parties would dismiss all claims and counterclaims with prejudice, and that the parties would bear their own fees and costs. Id. at 1038. The oral agreement's failure to specify the "mechanics of payment" does not mean that "there can be no contract." Id. at 1037. Indeed, enforcement of a judgment or settlement is separate topic. See Elyaoudayan, 104 Cal. App. 4th at 1431 ("[O]ral settlement, like any agreement, `imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement.'") (quoting Restatement (Second) of Contracts § 205). Logically, resolution of that issue is certainly preferable, but the "mechanics of payment" relates only to the "value of the bargain," Facebook, 640 F.3d at 1037, and is not "crucial and material to [the] end bargain."5 U.S. E.E.O.C. v. Hosp. Housekeeping Sys. of Houston, Inc., No. 1:11-cv-1658-LJO-SAB, 2013 WL 5817726, at *7 (E.D. Cal. Oct. 29, 2013), report and recommendation adopted sub nom. U.S. E.E.O.C. v. Hosp. Housekeeping Sys. of Houston, Inc., No. 1:11-cv-1658-LJO-BAM, 2013 WL 6134175 (E.D. Cal. Nov. 21, 2013).6 The language of the oral agreement indicates that this nonmaterial term was to be discussed after a basic agreement had been reached. See Provost v. Regents of Univ. of Cal., 201 Cal.App.4th 1289, 1302 (2011) (noting "details adjunct to the substance of the agreement . . . may be negotiated after a basic agreement has been reached").7
III. CONCLUSION
For the foregoing reasons, the moving parties' motion to enter judgment under CCP section 664.6 is GRANTED.8 The parties shall MEET AND CONFER and submit a joint proposed form of judgment within seven (7) days from the date of this Order. If the parties are unable to reach an agreement as to the form of the judgment, the form should indicate what is agreeable between the parties and what is not.
This Order terminates Docket Numbers 243, 247, and 253.
IT IS SO ORDERED.
