Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_09-cv-03098/USCOURTS-cand-3_09-cv-03098-4/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1001 E.R.I.S.A.: Employee Retirement

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1

By order filed June 2, 2010, the Court took the matter under submission.

United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

BAY AREA PAINTERS AND TAPERS

PENSION TRUST FUND, et al.,

Plaintiffs,

 v.

DE MARTINEZ PAINTING, INC.

Defendant. /

No. C-09-3098 MMC

ORDER DENYING MOTION TO SET

ASIDE JUDGMENT AS TO DANIEL

MARTINEZ 

Before the Court is the “Motion to Set Aside Judgment as to Daniel Martinez,” filed

March 18, 2010, by Daniel E. Martinez (“Martinez”). Plaintiffs have filed opposition;

Martinez has not filed a reply. Having read and considered the papers filed in support of

and in opposition to the motion, the Court rules as follows.1

BACKGROUND

On July 9, 2009, plaintiffs filed the instant action. In their complaint, plaintiffs alleged

that defendant De Martinez Painting, Inc. (“De Martinez Painting”) was required, under the

terms of a collective bargaining agreement, to make contributions to certain employee

benefit plans, and that it had failed to do so. As a result of such alleged failure, plaintiffs

alleged, they were entitled to recover the unpaid contributions, as well as liquidated

damages, interest, injunctive relief, costs, and attorney’s fees.

Case 3:09-cv-03098-MMC Document 25 Filed 06/10/10 Page 1 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2

Because the complaint in the instant action had been filed and served prior to that

date, the Court construes such condition to mean that if the Stipulation were not executed,

plaintiffs would proceed with the then pending court action.

2

Martinez is the President of De Martinez Painting. (See Martinez Decl., filed March

18, 2010, ¶ A.) According to Martinez, when De Martinez Painting was served with the

complaint, De Martinez Painting entered into “negotiations” with plaintiffs’ counsel and “an

agreement was made,” after which plaintiffs’ counsel prepared and submitted to De

Martinez Painting a document titled “Notice and Acknowledgement and Judgment Pursuant

to Stipulation” (“Stipulation”). (See id. ¶ C.) Martinez states that he was “told [he] had to

sign the document and return [it] within two days or there would be legal action taken

against the corporation,”2 and that he “immediately signed and returned [the Stipulation] to

[plaintiffs’] attorney.” (See id.)

The Stipulation provides that a judgment may be entered in favor of plaintiffs and

against De Martinez Painting on the terms set forth in the Stipulation. (See Stipulation at

1:16-20.) The terms of the Stipulation provide that although, as of July 21, 2009, De

Martinez Painting was “indebted” to plaintiffs in the total amount of $89,192.91 (see

Stipulation ¶ 3), De Martinez Painting would pay plaintiffs the lesser sum of $74,587.12,

said sum to be paid over a period of several months (see Stipulation ¶ 4).

The Stipulation also includes the following provision:

Daniel Edward Martinez acknowledges that he is the RMO/CEO/President of

De Martinez Painting, Inc., and that he specifically consents to the Court’s

jurisdiction, as well as the use of a Magistrate Judge for all proceedings

herein. Mr. Martinez (hereinafter “Guarantor”) confirms that he is personally

guaranteeing the amounts due pursuant to the terms of this Stipulation and

further acknowledges that all affiliates, related entities and successors in

interest to De Martinez Painting, Inc. shall also be bound by the terms of this 

Stipulation as Guarantors, and also consent to this Court’s jurisdiction as well

as the use of a Magistrate Judge.

(See Stipulation ¶ 5.)

Additionally, the Stipulation provides that “Defendant/Guarantor” must “remain

current in contributions and other obligations due to [p]laintiffs” during the “stipulated

payment term” (see Stipulation ¶ 6), that in the event “Defendant/Guarantor” fails to make a

Case 3:09-cv-03098-MMC Document 25 Filed 06/10/10 Page 2 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3

In his memorandum of points and authorities in support of the instant motion,

Martinez incorrectly refers to the judgment as a “default judgment.” (See Martinez’s P. & A.

at 1:18-19.) The instant judgment, however, was entered at the joint request of the parties;

plaintiffs never sought, much less obtained, entry of defendant’s default.

3

payment due under the Stipulation, “Defendant/Guarantor” would be “in default of [the]

Stipulation” (see Stipulation ¶ 8), and that if such a default was not timely cured, the sum of

$89,192.91 plus interest, less payments made, in addition to any unpaid contributions then

due plus liquidated damages and interest thereon, together with attorney’s fees and costs

incurred, would become “immediately due and payable” (see Stipulation ¶ 9).

The Stipulation has three signatories: (1) “De Martinez Painting, Inc.,” signed by

Martinez in his capacity as “RMO/CEO/President”; (2) “Daniel Edward Martinez,” signed by

Martinez “Individually”; and (3) “Saltzman and Johnson Law Corporation,” identified as

“Attorneys for Plaintiffs,” and signed by Muriel B. Kaplan. (See Stipulation at 7:4-13.) 

On July 29, 2009, plaintiffs filed the Stipulation, which the Court approved on July

30, 2009.

According to Martinez, De Martinez Painting made some of the payments due under

the Stipulation, but thereafter, on a date unspecified by Martinez, ceased to do so. (See

Martinez Decl. ¶ D.) Next, Martinez states, “all of the accounts were levied upon by

[p]laintiff[s]” and Martinez took the Stipulation to “an attorney for review.” (See id.) 

According to Martinez, said attorney informed Martinez “the agreement contained language

that would make [Martinez] personally liable for [the] corporation.” (See id.) Martinez

asserts that, prior to being so informed, he “had never realized that was going to occur” and

“[a]t no time did [he] ever understand that [he] would be placing [his] personal assets and

income in jeopardy for the debts of the corporation under the agreement with the

[p]laintiff[s].” (See id.)

DISCUSSION

By the instant motion, Martinez seeks an order setting aside the July 3, 2009

judgment the Court entered at the parties’ joint request,3 relying on Rules 60(b) and

60(d)(2) of the Federal Rules of Civil Procedure.

Case 3:09-cv-03098-MMC Document 25 Filed 06/10/10 Page 3 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4

Martinez does not contend he was fraudulently induced to execute the Stipulation,

was unaware he was signing the Stipulation, lacked capacity to enter into the Stipulation, or

that, for some reason other than his asserted lack of knowledge of the personal guarantee

provision, there exists a cognizable basis to rescind or void the parties’ agreement.

5

Under the terms of the parties’ settlement, plaintiffs essentially agreed to forego

receiving the full amount of contributions and other relief sought in the complaint, provided

a lesser amount was paid within the time provided thereby and De Martinez Painting

remained current in the reporting and payment of contributions thereafter.

4

At the outset, the Court notes that Martinez’s reliance on Rule 60(d)(2) is misplaced. 

Rule 60(d)(2) incorporates by reference 28 U.S.C. § 1655, which, in turn, concerns actions

“to enforce any lien upon or claim to, or to remove any incumbrance or lien or cloud upon

the title to, real or personal property.” See 28 U.S.C. § 1655. No such claim is

encompassed by the above-titled action or by the above-referenced Stipulation.

The Court next turns to Martinez’s request for relief under Rule 60(b). In particular, 

Martinez relies on Rule 60(b)(1), which provides that a court may relieve a party from a

final judgment, order, or proceeding based on “mistake, inadvertence, surprise or

excusable neglect.” See Fed. R. Civ. P. 60(b)(1). Specifically, Martinez characterizes his

asserted lack of knowledge of the personal liability provision in the Stipulation as

“excusable neglect.” (See Martinez’s Memorandum of Points & Authorities at 3:6.)4

As discussed above, the judgment was entered as part of the parties’ negotiated

agreement to settle the instant action.5 “The construction and enforcement of settlement

agreements are governed by principles of [state] law which apply to contracts generally.” 

Jeff D. v. Andrus, 899 F.2d 753, 759 (9th Cir. 1990). Martinez does not argue that the

Stipulation’s language providing for his personal guarantee is ambiguous, nor, given the

clarity of such language, could he persuasively do so. (See Stipulation ¶ 5 (“Mr. Martinez

(hereinafter “Guarantor”) confirms that he is personally guaranteeing the amounts due

pursuant to the terms of this Stipulation . . . . ”)); United Teachers v. Oakland Unified Sch.

Dist., 75 Cal. App. 3d 322, 330 (1977) (holding “contract is ambiguous when, on its face, it

is capable of two different reasonable interpretations”; construing ambiguous term in

employment contract). Nor does Martinez argue that a settlement agreement, or any other

Case 3:09-cv-03098-MMC Document 25 Filed 06/10/10 Page 4 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

5

contract, can be set aside for the reason that one party thereto failed to read the agreement

prior to signing it; indeed, the law is to the contrary. See Frame v. Merrill Lynch, Pierce,

Fenner & Smith Inc., 20 Cal. App. 3d 668, 671 (1971) (holding “failure to read a contract

before signing is not in itself a reason to refuse its enforcement”). Martinez’s assertion that

it was not his “intent” to personally guarantee De Martinez Painting’s performance (see

Martinez Decl. ¶ D), likewise is of no legal import. See Winet v. Price, 4 Cal. App. 4th

1159, 1168-69 (1992) (holding where “person with the capacity of reading and

understanding an instrument signs it, he is . . . bound by its contents, and is estopped from

saying that its provisions are contrary to his intentions or understanding”) (internal quotation

and citation omitted).

“Rule 60(b)(1) is not intended to remedy the effects of a litigation decision that a

party later comes to regret.” See Latshaw v. Trainer Wortham & Co., 452 F.3d 1097, 1101

(9th Cir.2006) (affirming denial of Rule 60(b)(1) motion where judgment had been entered

after plaintiff accepted defendant’s Rule 68 offer, and plaintiff had argued she accepted

offer only because of erroneous legal advice). Rather, “[w]hen a party makes a deliberate,

strategic choice to settle, [he] cannot be relieved of such a choice merely because [his]

assessment of the consequences was incorrect.” See id. (internal quotation and citation

omitted). Here, Martinez, after negotiating with plaintiffs’ counsel in an effort to resolve

plaintiffs’ claims, made a deliberate and strategic choice to settle rather than retain counsel

to litigate the matter. See Rowland v. California Men's Colony, 506 U.S. 194, 202 (1993)

(holding “corporation may appear in the federal courts only through licensed counsel”).

Lastly, the Court notes that cases affording relief due to excusable neglect typically

concern a party who has failed to meet some type of statutory or court-ordered deadline,

thereby losing the opportunity to be heard. See, e.g., Pioneer Investment Services Co. v.

Brunswick Assoc. Ltd. Partnership, 507 U.S. 380 (1993) (failure to file timely proof of claim

in bankruptcy proceeding); Pincay v. Andrews, 389 F.3d 853 (9th Cir. 2004) (failure to file

timely notice of appeal); Briones v. Riviera Hotel & Casino, 116 F.3d 379 (9th Cir. 1997)

(failure to file timely opposition to motion to dismiss). In such cases, the district court

Case 3:09-cv-03098-MMC Document 25 Filed 06/10/10 Page 5 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

6

The factors to be weighed are the “danger of prejudice to the non-moving party,”

the “length of delay and its potential impact on judicial proceedings,” the “reason for the

delay, including whether it was within the reasonable control of the movant,” and “whether

the moving party’s conduct was in good faith.” See Pincay, 389 F.3d at 855.

7

Plaintiffs’ request for an award of attorney’s fees, which request is included in their

opposition, is hereby DENIED as procedurally improper. See Civil L.R. 7-1(a) (setting forth

procedure for making “written request to the Court for an order”).

6

applies a four-part balancing test.6 By contrast, where a claim of excusable neglect is

based, as here, on a party’s decision to settle rather than litigate, such considerations have

not been implicated in the Court of Appeals’ analysis. See, e.g., Latshaw, 452 F.3d at

1100-02.

In short, the Court finds Martinez has failed to show there exists any legally

cognizable basis upon which to set aside the parties’ agreement.

Accordingly, the Court finds Martinez has failed to show he is entitled to relief under

Rule 60(b).7

CONCLUSION

For the reasons stated above, the motion is hereby DENIED.

IT IS SO ORDERED.

Dated: June 10, 2010 

MAXINE M. CHESNEY

United States District Judge

Case 3:09-cv-03098-MMC Document 25 Filed 06/10/10 Page 6 of 6