Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_13-cv-02455/USCOURTS-casd-3_13-cv-02455-4/pdf.json

Nature of Suit Code: 550
Nature of Suit: Prisoner - Civil Rights (U.S. defendant)
Cause of Action: 42:1983pr Prisoner Civil Rights

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

CARLOS RIOS,

CDCR #E-52249,

Plaintiff,

CASE NO. 13cv2455-WQHJMA

ORDER

vs.

D. PARAMO; R. BLAHNICK;

K. BALAKIAN; B. CROTTS;

B. MILLUM; A. HERNANDEZ;

R. OLSON; J. RAMIREZ, 

Defendants.

HAYES, Judge:

The matter before the Court is the Motion to Enforce Settlement filed by

Defendants. (ECF No. 53). 

I. Background

On October 10, 2013, Plaintiff Carlos Rios, currently incarcerated at Richard J.

Donovan Correctional Facility (“RJD”), commenced this action by filing a Complaint

pursuant to 42 U.S.C. Section 1983 (ECF No. 1) and a motion for leave to proceed in

forma pauperis (ECF No. 2). The Complaint asserted claims for violations of the First,

Eighth, and Fourteenth Amendments. On March 25, 2014, the Court granted the

motion for leave to proceed in forma pauperis, dismissed the Complaint for failure to

state a claim, and granted Plaintiff forty-five days to file a First Amended Complaint

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(“FAC”). (ECF No. 5).

On May 12, 2014, Plaintiff filed the FAC, which is the operative complaint in

this case. (ECF No. 9). The FAC asserts claims for violations of the First, Sixth,

Eighth, and Fourteenth Amendments, and violations of the Americans with Disabilities

Act and Rehabilitation Act. Plaintiff alleged that Defendants required him to choose

between outdoor exercise and attending the law library. Plaintiff alleged that

Defendants refused him the reasonable accommodation of placement in a

developmental disability program, which includes legal assistance. Plaintiff alleged that

Defendants retaliated against him for complaining about these issues by charging him

with a false “128-B general chrono” on August 8, 2013, and that the appeals coordinator

did not properly process his inmate appeals. Id. at 9-10. 

On January 14, 2015, United States Magistrate Judge Jan M. Adler held a

telephonic case management conference. (ECF No. 23). On January 14, 2015, the

Magistrate Judge issued an Order Scheduling Telephonic Mandatory Settlement

Conference for February 24, 2015, at 9:30 a.m. (ECF No. 24). On January 27, 2015,

Plaintiff filed a motion to change the time of the settlement conference in this case from

9:30 a.m. to 10:45 a.m. on the same date because Plaintiff was scheduled to appear at

a “court settlement conference at the same date and time in the Superior Court of

California, County of San Diego, Hall of Justice for Case No. 37-2014-0036-102-CUWM-CTL at Dept. C-67 on February 24, 2015, at 9:30 a.m.” (ECF No. 26 at 1). On

January 29, 2015, the Magistrate Judge issued an order resetting the settlement

conference to February 25, 2015, at 9:30 a.m. (ECF No. 27). 

On February 2, 2015, Plaintiff filed a “Motion for Extension of Time and Request

to be Relieve [sic] from this Court’s Order Convening a Case Management Conference

. . . .” (ECF No. 29). The motion again requested that the settlement conference be

continued to 10:45 a.m. on February 24, 2015, because Plaintiff was scheduled to

appear in San Diego Superior Court at 9:30 a.m on February 24, 2015. On February 2,

2015, the Magistrate Judge granted the motion in part and again stated that the

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settlement conference was continued to February 25, 2015, at 9:30 a.m. (ECF No. 30). 

On February 25, 2015, the Magistrate Judge held the telephonic settlement

conference. (ECF No. 33). On February 25, 2015, the Magistrate Judge issued an

Order stating that the case settled “and the terms of the settlement were placed on the

record.” (ECF No. 34 at 1). The transcript of the on-the-record portion of the February

25, 2015 settlement conference provides, in pertinent part,

The Clerk: Case Number 13cv2455, Rios vs. Paramo, placing settlement on the record.

The Court: Good Morning. May I have appearances, please.

Mr. Sheehy: Yes, Your Honor. Good Morning. This is Terrence Sheehy on behalf of Defendants.

Mr. Rios: My name is Carlos Rios on behalf of petitioner.

The Court: All right. Thank you. The parties have reached a settlement

after a second settlement conference held this morning. I thank you for your efforts in successfully reaching this settlement. And Mr. Sheehy, if you will please put the terms of the settlement on the record. 

Mr. Sheehy: Thank you very much, Your Honor. Yes. The Defendants

from CDCR agree to settle this case without an admission of liability for an amount of $1,000, in exchange for Mr. Rios’ signature on a dismissal

and the settlement agreement and release and a payee data form. This settlement covers all claims and allegations and defendants in the case of Carlos Rios vs. D. Paramo and others, 13cv2455 in the Southern District

of California, and all past or current employees of CDCR. This settlement is inclusive of all costs and attorney’s fees. Have I read the settlement

terms correctly sir?

Mr. Rios: Yes, sir. 

The Court: All right. And Mr. Rios, do you agree to the settlement terms?

Mr. Rios: Yes, I agree, Your Honor.

The Court: All right. Thank you. All right. Again, I thank both sides for your efforts to reach this settlement. 

. . . 

Mr. Rios: Your Honor –

Mr. Sheehy: Your Honor, may I have one more moment? 

The Court: Yes. 

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Mr. Sheehy: I apologize. Mr. Rios, during our previous discussions, indicated that he’s willing to dismiss Warden Paramo and Correctional

Officer M., as in Michael, Zuniga from –

Mr. Rios: Suniga. Suniga, S-U-N-I-G-A.

Mr. Sheehy: – From another lawsuit. Is that correct, Mr. Rios?

Mr. Rios: The property claims, yeah, I’m willing to. 

Mr. Sheehy: Okay. That’s all I wanted to get on the record, Your Honor. 

The Court: All right. Thank you again, gentlemen. 

 (ECF No. 53-2 at 4-7). 

The Magistrate Judge ordered the parties to file a proposed order for dismissal

on or before March 27, 2015. (ECF No. 34). On March 9, 2015, Plaintiff attempted to

file an opposition to Defendants’ proposed settlement agreement and a request for a

follow up settlement conference. (ECF No. 35-1). The Magistrate Judge rejected the

document for filing on the ground that settlement documents are not to be filed with the

Court. (ECF No. 35). 

On May 1, 2015, Defendants filed the Motion to Enforce Settlement. (ECF No.

53). Defendants contended that “Plaintiff refused to sign the [settlement agreement]

and ‘opposed’ the settlement agreement, claiming that defense counsel and Magistrate

Judge Adler misled him into believing he was settling his property claim . . . in another

case.” (ECF No. 53-1 at 6). In defense counsel’s declaration, counsel stated that during

the settlement conference, 

I specifically identified Plaintiff’s claims in this case. I discussed

Defendants’ legal and factual argument in support of its defense of those

claims. For instance, in discussing Plaintiff’s access-to-courts claim, I

identified certain documentary evidence, prison law library logs, that show

Plaintiff was provided access to the law library . . . . [W]e reached a

settlement where Plaintiff agreed to dismiss his claims in this litigation in

exchange for $1,000. The court placed Plaintiff and me on hold so that we

could be transferred to the court room telephone and the settlement could

be read onto the record. During that time on hold, Plaintiff also agreed,

sua sponte, to dismiss his property claims . . . . Neither Magistrate Judge

Adler nor I ever brought up or broached any claim Plaintiff may have had

for lost property.

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(ECF No. 53-3 at 2). Defendants requested that the court “issue an order enforcing the

terms of the settlement . . . .” (ECF No. 53-1 at 16). 

On May 18, 2015, Plaintiff filed a response opposing on grounds that defense

counsel had discussed Plaintiff’s state court claim prior to going on the record with the

intent to mislead Plaintiff. (ECF No. 59 at 6). Plaintiff also opposed on grounds that

defense counsel took “unreasonable advantage of a weaker party” and that Plaintiff

believed he was only settling his state court property claim when he settled this case on

the record. Id. at 6-7. Plaintiff also contended that “no case number was provided”

during the settlement conference and that he was “rushed” to enter into an oral

settlement agreement on the record. Id. at 5. Plaintiff requested an evidentiary hearing. 

Id. at 14. 

On July 23, 2015, the Court issued an order. (ECF No. 66). The Court

concluded that “fraudulent inducement will not preclude enforcement of the settlement

agreement.” Id. at 8. The Court also concluded “that an alleged unilateral mistake of

fact due to the fault of Defendants’ counsel will not preclude enforcement of the

settlement agreement.” Id. at 10. The Court ordered the parties to submit supplemental

briefing to address whether the contract could be rescinded on the ground of unilateral

mistake of fact under the four Donovan factors. Id. at 11; see Donovan v. RRL Corp.,

27 P.3d 702, 716 (Cal. 2014) (describing the four factors that a party must establish to

rescind a contract on the ground of unilateral mistake of fact). Specifically, the Court

ordered the parties to address the following, 

Assuming that Plaintiff was actually mistaken with respect to the claims

he settled on the record, the parties shall file supplemental briefs

addressing the following issues:

1. whether the alleged mistake has a material effect upon the

agreed exchange of performances that is adverse to Plaintiff;

2. whether Plaintiff bears the risk of the mistake; and

3. whether the effect of the mistake is such that enforcement

of the contract would be unconscionable.

Id. The Court ordered Defendants to file a supplemental brief no later than August 10,

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2015 and Plaintiff to file a response no later than August 31, 2015. Id. The Court

stated that Defendants may file a reply no later than September 8, 2015. Id. 

On August 10, 2015, Defendants filed supplemental briefing in support of

Defendants’ Motion to Enforce Settlement. (ECF No. 68). On August 19, 2015,

Plaintiff notified the Court that he had not received Defendants’ supplemental brief. 

(ECF No. 69). On August 20, 2015, Defendants submitted an amended certificate of

service. (ECF No. 70). On August 26, 2015, Plaintiff filed an Ex Parte Motion for

Leave to Exceed Page Limit. (ECF No. 73). On August 26, 2015, the Court granted

Plaintiff’s motion. (ECF No. 74). On August 26, 2015, Plaintiff filed a response to

Defendants’ Supplemental Brief and Application for Reconsideration Under CivLR

7.1(i)(1). (ECF No. 73). The docket reflects that Defendants have not submitted a

reply.

II. Contentions of the Parties

Defendants contend that “Plaintiff cannot establish that the Donovan factors

warrant a rescission of the parties’ settlement agreement.” (ECF No. 68 at 1). 

Defendants contend that Plaintiff’s “mistake of not knowing which case he was

appearing on, or which claim he was settling” was not the type of “good faith error that

would support rescission.” Id. 2-3. Defendants contend that Plaintiff’s “alleged

confusion” was not “mere negligence.” Id. at 2. Rather, Defendants contend that

Plaintiff’s mistake was caused by the neglect of a legal duty and “resulted from

[Plaintiff’s] failure to act in accordance with reasonable standard of fair dealing in

preparing for the settlement conference.” Id. Defendant contends that a 

reasonable litigant exercising the requisite diligence in preparing his or her

case for a settlement conference, would be, at minimum, expected to

review the pleadings and discovery, have a command of the facts and legal

theories involved, have examined the strengths and weaknesses of the

case, and done his or [her] best to establish a monetary value of the claims. 

Id. at 4. 

Defendants contend that “the mistake does not have a material effect upon the

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agreed exchange of performances.” Id. Defendant contends that “[a]lthough Plaintiff

may now allege that his case is worth more than the agreed settlement amount,

[Plaintiff] still benefits from the settlement.” Id. Defendants contend that “Plaintiff

cannot show that the alleged resulting imbalance of enforcing the settlement is so severe

that it would be unfair to require him to perform his obligations under the agreement.” 

Id. at 5. Defendants further contend that “Plaintiff’s neglect of his legal duty . . .

necessarily means that the risk of mistake must be allocated to [Plaintiff].” Id. 

Defendants contend that it “would not be unconscionable to enforce the settlement

agreement because Plaintiff had notice of the settlement conference, he had time to

prepare, the parties engaged in an arm’s –length negotiation overseen by the Magistrate

Judge, and Plaintiff agreed to settle all claims on the record.” Id. at 6. 

Plaintiff requests that the Court “reconsider [its] previous order (re ECF No. 66)”

because “there is a genuine issue of material facts as to whether Plaintiff’s agreement

to settle this litigation was obtained by undue influence, duress, [or] fraud . . . .” (ECF

No. 73 at 14-15). Plaintiff contends that his mistake “was not even mere negligence.” 

Rather, Plaintiff contends that “his lacking of notice was attributed by defendants’

subordinates intentional interference with Plaintiff’s legal mail from this Court and that

such concealment . . . was the cause of his confusion resulting in his reliance on

Defendants’ counsel[‘s] false representation and statement.” Id. at 24. Plaintiff

contends that the mistake has a material effect upon the agreed exchange of

performances because “Plaintiff’s complaint (ECF No. 9) [for] relief seeks more than

$150,000 in money damages” and therefore, this “exchange is not only less desirable

for the plaintiff, but also more advantageous to the defendants’ in this matter.” Id. at

25. Plaintiff contends that he does not bear the risk of the mistake because he “was not

neglect on his legal duty.” Id. at 26. Plaintiff contends that it would be unconscionable

to enforce the settlement agreement because Plaintiff did not have notice of the

settlement conference.” Id. at 26.

/ / /

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III. Discussion

“It is well settled that a district court has the equitable power to enforce

summarily an agreement to settle a case pending before it.” Callie v. Near, 829 F.2d

888, 890 (9th Cir. 1987). “The construction and enforcement of settlement agreements

are governed by principles of local law which apply to interpretation of contracts

generally.” Jeff D. v. Andrus, 899 F.2d 753, 759 (9th Cir. 1989). “This is true even

though the underlying cause of action is federal.” United Commercial Ins. Serv., Inc.

v. Paymaster Corp., 962 F.2d 853, 856 (9th Cir. 1992). 

A factual mistake by one party–a unilateral mistake–provides grounds for

rescission in certain limited circumstances. Donovan v. RRL Corp., 27 P.3d 702, 715

(Cal. 2001). Where a unilateral mistake of fact is not caused by the opposing party, the

party claiming mistake of fact must establish the following facts to obtain rescission of

the contract. 

(1) the [party claiming mistake] made a mistake regarding a basic assumption upon which the [mistaken party] made the contract; (2) the mistake has a material effect upon the agreed exchange of performances that is adverse to [the mistaken party]; (3) [the mistaken party] does not bear the risk of the mistake; and (4) the effect of the mistake is such that

enforcement of the contract would be unconscionable.

Id. at 716. 

A mistake of fact may support the rescission of an agreement unless the mistake

was caused “by the neglect of a legal duty on the part of the person making the

mistake.” Cal. Civ. Code § 1577. “[O]rdinary negligence does not constitute neglect

of a legal duty within the meaning of Civil Code section 1577.” Id. at 718. 

A concept similar to neglect of a legal duty is described in section 157 of

the Restatement Second of Contracts, which addresses situations in which

a party’s fault precludes relief for mistake. Only where the mistake results

from “a failure to act in good faith and in accordance with reasonable

standards of fair dealing” is rescission unavailable. . . . The mere fact that

a mistaken party could have avoided the mistake by the exercise of

reasonable care does not preclude avoidance on the ground of mistake. 

Id. at 717. Failure to negotiate in accordance with reasonable standards of fair dealing

“bars a mistaken party from relief based on a mistake that otherwise would not have

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been made.” Id. at 718. “During the negotiation stage each party is held to a degree of

responsibility appropriate to the justifiable expectations of the other.” Id.

In this case, Plaintiff had prior notice of the settlement conference. Based on that

notice, Plaintiff moved the Court for a continuance of the settlement conference because

it interfered with a “court settlement conference at the same date and time in the

Superior Court of California, County of San Diego, Hall of Justice for Case No. 37-

2014-0036-102-CU-WM-CTL at Dept. C-67.” (ECF No. 26 at 1). Pursuant to

Plaintiff’s request, the Magistrate Judge reset the settlement conference for February

25, the day after Plaintiff’s settlement conference in Superior Court. See ECF No. 27. 

The record reflects that both the Court Clerk and Defendants’ counsel read the case

number into the record at the settlement conference. See ECF No. 53-2 at 4 (“The

Clerk: Case Number 13CV2455, Rios vs. Paramo, placing settlement on the record .

. . . Mr. Sheehy: . . . This settlement covers all claims and allegations and defendants in

the case of Carlos Rios vs. D. Paramo and others, 13cv2455 in the Southern District

of California, and all past or current employees of CDCR” (emphases added)). The

record demonstrates that Plaintiff acknowledged that the terms of the settlement

agreement were correct. See id. at 5 (“Mr. Sheely: Have I read the settlement terms

correctly, sir? Mr. Rios: Yes, sir.”). Plaintiff also indicated his consent to settle the

case on the record. See id. (“The Court: All right. And Mr. Rios, do you agree to the

settlement terms? Mr. Rios: Yes. I agree, your honor.”). 

Under the circumstances of this case, defense counsel was justified in expecting

Plaintiff to know the court Plaintiff was appearing in and the case at issue. Defense

counsel stated in counsel’s declaration, “I specifically identified Plaintiff’s claims in

this case. I discussed Defendants’ legal and factual argument in support of its defense

of those claims.” The record reflects that it was only after Plaintiff agreed to the

settlement terms that defense counsel mentioned that Plaintiff was willing to settle

another lawsuit and that it was Plaintiff who stated that the other lawsuit was a property

claim. See id. (The Court: All right. . . I thank both sides for your efforts to reach this

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settlement. Mr. Sheehy: Your honor, may I have one more moment? The Court: Yes. 

Mr. Sheehy: I apologize. Mr. Rios, during our previous discussions, indicated that he’s

willing to dismiss Warden Paramo and Correctional Officer M. . . . [f]rom another

lawsuit. Is that correct, Mr. Rios? Mr. Rios: The property claims, yeah, I’m willing

to.”) Although Plaintiff appeared pro se, Plaintiff “must follow the same rules of

procedure that govern other litigants.” King v. Atiyeh, 814 F.2d 565, 567 (9th Cir.

1986); see also Jacobsen v. Filler, 790 F.2d 1362, 1364 (9th Cir. 1986) (“[P]ro se

litigantsin the ordinary civil case should not be treated more favorably than parties with

attorneys of record.”). “[T]he risk of a mistake must be allocated to a party where the

mistake results from that party’s neglect of a legal duty.” Id. at 717; see also Cal. Civ.

Code § 1577. Because Plaintiff’s mistake resulted from Plaintiff’s neglect of a legal

duty, Plaintiff must bear the risk of the mistake. See Cal. Civ. Code § 1577. 

Even if Plaintiff did not bear the risk of the mistake, Plaintiff is unable to

establish that the mistake impacts the exchange of performance in a manner adverse to

him. To establish such, Plaintiff “must show that the resulting imbalance in the agreed

exchange is so severe that it would be unfair to require [Plaintiff] to perform.” 

Donovan, 27 P.3d at 717. A party can satisfy this requirement by showing that the

exchange is not only less desirable for the mistaken party, but is also more

advantageous to the other party. Rest. 2d Contracts, § 152, com. C. After an arm’slength negotiation in the presence of the Magistrate Judge, Defendants agreed to pay

Plaintiff $1,000 in exchange for Plaintiff’s dismissal of his civil rights lawsuit. While

the benefit of settling the case may now seem less desirable to Plaintiff, Plaintiff still

benefits from the settlement by receiving $1,000 from Defendants. Further, the

settlement does not unfairly benefit Defendants; Defendants remain responsible for

paying Plaintiff. 

Similarly, Plaintiff cannot establish that enforcement of the settlement agreement

would be unconscionable. “An unconscionable contract ordinarily involves both a

procedural and substantive element: (1) oppression or surprise due to unequal

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bargaining power, and (2) overly harsh or one-sided results.” Donovan, 27 P.3d at 723. 

“A contractual term is substantively suspect if, viewed at the time the contract was

formed, it allocates the risks in an unreasonable or unexpected manner.” Zullo v.

Superior Court, 127 Cal. Rptr. 3d 461, 465 (Ct. App. 2011). With respect to the

procedural element, Plaintiff initiated this action and participated in the settlement

conference. During that conference, Plaintiff had options other than to settle;

specifically, Plaintiff could have proceeded with the litigation against defendants or

demanded a higher settlement amount. The Magistrate Judge was present during the

settlement conference as a neutral party and found that the parties had reached a

settlement. (ECF No. 34). There was no oppression or surprise due to unequal

bargaining power despite Plaintiff’s pro se and incarcerated status. As to the

substantive element, the settlement agreement is not “overly harsh” or “one-sided.” See

Donovan, 27 P.3d at 723. Plaintiff agreed to dismiss his claims against Defendants in

exchange for $1,000. Plaintiff stated that he understood and agreed to the settlement

announced in open court. The settlement agreement is not unconscionable. 

Plaintiff cannot prove all four Donovan factors required to support rescission in

the case, therefore, the Court concludes that the settlement agreement should be

enforced. 

/ / / 

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/ / / 

/ / / 

/ / / 

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/ / /

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IV. Conclusion

IT IS HEREBY ORDERED that Plaintiff’s Application for Reconsideration is

denied.

IT IS FURTHER ORDERED that the Motion to Enforce Settlement is granted. 

(ECF No. 53). No later than fourteen (14) days from the date of this Order, Defendants

shall pay Plaintiff the sum of money stated in the Memorandum of Settlement and file

a notice with the Court certifying that the money has been paid. Thereafter, the Court

will dismiss this action with prejudice. 

DATED:  December 10, 2015

WILLIAM Q. HAYES

United States District Judge

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