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Volume III, Number 7 - April 2010 ●   Contact Us  •  Past Issue Archive   ●   

An E-Publication of the Los Angeles County Bar Association
Written by Linda B. Bulmash

This Month's Topic:  Make Sure Your Settlement Agreement Complies with Evidence Code Section 1123(b)

An important reminder: Make sure that any settlement you enter into under Code of Civil Procedure Section 664.6 is enforceable by complying with language in California Evidence Code Section 1123 (b) as well as CCP Section 664.6. There are two steps in this process.

1. In the 2006 case of R. Thomas Fair v. Karl E. Bakhtiari, et al., 40 Cal. 4th 189, 147 P. 3d 653, 51 Cal. Rptr.3d 871 (2006), the court found a settlement agreement entered into at a mediation was not enforceable because it did not contain the magic language contained in Evidence Code Section 1123 (b). The court held that: “To satisfy section 1123 (b), a settlement agreement must [emphasis added] include a statement that it is ‘enforceable’ or ‘binding,’ or a declaration in other terms with the same meaning.” Here the court found that a sentence simply stating that any future disputes would be submitted to arbitration was not sufficiently “a declaration in other terms with the same meaning.”

So play it safe. Make sure your settlement agreements contain the magic language of Evidence Code Section 1123 (b): “Pursuant to Evidence Code 1123 (b), this settlement agreement is enforceable, binding and admissible in a court of law” or words to that effect.

2. Just as important, the court may not enforce the provisions of the agreement, even if you have used CCP Section 664.6 language, without the following magic language: “The court retains jurisdiction until all the terms of the settlement agreement have been carried out” (or words to that effect).

Linda B. Bulmash, Esq.,
writes the Negotiation Tips.
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