Filed 9/30/16 Marriage of Corona CA2/8

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for 

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ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION EIGHT

In re Marriage of ARTHUR and BONNIE

CORONA.

 B259746, B266351

ARTHUR CORONA et al.,

Respondents,

v.

BONNIE L. CORONA,

Appellant.

 (Los Angeles County

 Super. Ct. No. BD386697)

APPEAL from a judgment and an order of the Superior Court of Los Angeles 

County, Mark A. Juhas, Judge. Judgment reversed; order vacated.

Rombro & Associates, S. Roger Rombro and Michael T. Ungar for Appellant.

Law Offices of W. Paul Tobin and W. Paul Tobin for Respondents.

* * * * * *
2

In this marital dissolution action, Bonnie and Arthur Corona entered into a marital 

settlement agreement (MSA) in 2008.1 The court entered a judgment on reserved issues

incorporating the MSA approximately six years later, over Bonnie’s objections. Bonnie 

argues the court erred in entering judgment on the MSA without a motion by a party, and 

moreover, the court should have considered her arguments for setting aside the MSA before 

reducing it to a judgment. She also appeals from the court’s order denying her motion to set 

aside the judgment. We reverse the judgment on reserved issues, vacate the order denying 

her set aside motion, and remand for further proceedings.

BACKGROUND

1. Proceedings in the Dissolution Action

The parties married in 1959. Arthur filed a petition for dissolution of the marriage in 

April 2003. The court entered a status-only judgment in January 2007.

On September 19, 2008, the parties entered into the MSA, which they memorialized 

on Los Angeles Superior Court form FAM 024(A) (Stipulation/Settlement Agreement). The 

MSA divided assets between the parties. Over the course of the marriage, Arthur had built a 

real estate business with properties worth over $20 million. Among other things, the MSA

awarded Bonnie 11 parcels of real property as her sole and separate property. It allocated a 

similar number of properties to Arthur. The MSA provided that both parties assumed all 

debts associated with the assets allocated to them. Similarly, it provided that all real estate 

was allocated to the parties subject to existing mortgages, liens, and encumbrances. Arthur 

represented and warranted in the MSA that he had not “encumbered or hypothecated”

several of the subject properties allocated to Bonnie. The parties waived “[a]ll other claims, 

including but not limited to, claims for re-imbursement, breach of fiduciary duty and the 

like.”

 

1

In accordance with the convention in marriage cases, we will refer to the parties by 

their first names. (E.g., In re Marriage of Smith (1990) 225 Cal.App.3d 469, 475-476, 

fn. 1.)
3

On the form memorializing the MSA, the parties checked the box indicating: “The 

orders agreed to herein shall be included in a judgment or further judgment to be filed 

herein.” They also checked boxes indicating they waived “their rights to a trial and to 

notice of trial for the purpose of having the court grant a judgment pursuant to the terms of 

this agreement which may be heard by a court commissioner sitting as judge pro tem”; 

waived the right to appeal; waived the right to request a statement of decision; and waived 

the right to move for a new trial.

Shortly after signing the MSA, the parties signed and recorded an interspousal 

transfer deed to effect the allocation of properties set forth in the MSA.

On November 3, 2008, Arthur filed a motion to enforce the MSA. The court set a 

hearing in December 2008. According to Arthur’s declaration in support of the motion, 

Bonnie had control over their property management business, and he had been shut out and 

was living on spousal support for the last six years. He asserted that she was denying him 

control over the properties that the MSA awarded to him, including by denying him their 

rental income. The record does not contain a ruling on Arthur’s motion to enforce the MSA.

In September 2009, Bonnie filed a motion for joinder of Theresa Jean Cundall as a 

claimant to the dissolution proceeding, which the court granted. Bonnie was informed and 

believed Cundall was Arthur’s girlfriend. Bonnie’s supporting declaration averred as 

follows. In December 1994, Arthur encumbered six parcels of real property that were 

community property but held in his name. He took out a loan secured by a promissory note 

and deed of trust encumbering the properties. The loan was in the principal sum of

$218,000, but the lien on the encumbered properties had grown to approximately $754,000

by the time Bonnie filed her motion. The beneficial interest in the lien had transferred twice 

since 1994. Cundall was the current lien holder. Bonnie only discovered the lien in April 

2009 when she tried to sell one of the encumbered properties, which the MSA allocated to 

her in the division of property. In total, the MSA had allocated five of the six encumbered 
4

properties to Bonnie.2 Arthur had never disclosed this encumbrance on the properties to 

Bonnie. Indeed, his preliminary declaration of disclosure (Judicial Council of California 

forms FL-140 and FL-142) did not list this debt, and he also represented in the MSA that he 

had not encumbered the properties allocated to her. Bonnie asked Cundall to remove the 

lien on the property, and Cundall refused. Bonnie believed the lien was a sham and Arthur 

was using Cundall as a “straw man” to extort additional assets from Bonnie.

According to the verified complaint for joinder that Bonnie submitted with her 

motion (joinder complaint), Mid-Century Insurance Company was the original beneficiary 

of the promissory note and deed of trust representing the lien against the encumbered 

properties. In 2000, Mid-Century Insurance Company assigned its beneficial interest in the 

promissory note and deed of trust to George Granby, who is Arthur’s first cousin and an 

attorney. In June 2008, Granby assigned his beneficial interest in the same to Cundall. 

Bonnie alleged both Granby and Cundall were acting as straw men for Arthur, and neither 

had paid any consideration for the promissory note and deed of trust. Bonnie discovered the 

lien on her encumbered property during a title search as she was in escrow for the sale of the 

property. Cundall refused to remove the lien for no payment. Instead, she offered to take 

50 percent of the value of the lien (or 50 percent of approximately $754,000) as full 

payment of her security interest. Bonnie’s joinder complaint against Cundall sought to quiet

title against Cundall’s adverse claims and to cancel Cundall’s promissory note and deed of 

trust encumbering the properties.

In March 2010, Bonnie filed a motion to remove or expunge Cundall’s lien on 

Bonnie’s encumbered properties and to enter a judgment incorporating the MSA. If the 

court refused to expunge the lien, she requested that the court order Arthur to pay off the 

lien himself. Bonnie’s memorandum of points and authorities advised the court that “all of 

the facts relating to this motion have not been ascertained. Some discovery needs to be 

 

2 Bonnie’s supporting declaration actually stated that the MSA awarded her four of the 

six encumbered properties, not five. That appears to have been an error, as later on, the 

parties consistently assert that the MSA awarded her five of the encumbered properties.
5

completed before this case is ready to be heard.” The record does not contain a ruling on 

this motion.

2. Complaint in the Civil Action

In July 2010, Bonnie filed a civil action against Arthur and Cundall. In July 2011, 

the judge in the civil action found the civil action and the dissolution action to be related. 

The judge transferred the civil action to the family law court. Bonnie’s second amended 

complaint (SAC) alleged causes of action for intentional misrepresentation, concealment, 

constructive fraud, slander of title, and conspiracy. Bonnie based the SAC on the same facts 

alleged in her joinder complaint in the dissolution action—that is, Arthur had encumbered 

properties allocated to her, had caused Mid-Century Insurance Company to assign its 

beneficial interest in the lien to Granby, and then had caused Granby to assign the same to 

Cundall, all without Bonnie’s knowledge. Bonnie also alleged she agreed to the MSA in 

reliance on Arthur’s false statements and omissions. Specifically, he misrepresented that he 

had not encumbered the properties allocated to her and failed to disclose the existence of the 

lien against the properties. The SAC further alleged that Cundall had foreclosed on 

Bonnie’s encumbered properties. Cundall had executed a declaration of default avowing

that the loan secured by the promissory note and deed of trust had become due and was 

unpaid ($218,000 plus interest). Cundall directed the trustee under the deed of trust to sell 

the encumbered properties to satisfy the debt. The trustee’s sale occurred in July 2010, and 

Cundall allegedly purchased the encumbered properties for $571,963.42. Thus, Cundall 

held title to five of the properties awarded to Bonnie in the MSA.

3. Trial on the Related Actions

A bench trial took place in late September to early October 2014. Bonnie’s trial brief 

asserted there were three interrelated matters for trial.

First, the court had to adjudicate reserved issues not determined by the status-only 

judgment in the dissolution action. These included a claim that Arthur breached his 

fiduciary duties to her, a claim to set aside, rescind, or cancel in part the MSA, property 

characterization and division, and a request for sanctions against Arthur. Bonnie’s trial brief 

argued, among other things, that the MSA was invalid because Arthur obtained her consent 
6

through fraud and breach of fiduciary duty, it was invalid for a failure of consideration, and 

permitting the MSA to stand would prejudice the public interest. She also argued equitable 

doctrines such as equitable estoppel and unclean hands should prevent him from enforcing 

the MSA.

Second, the court had to adjudicate Bonnie’s causes of action against Cundall in the 

joinder complaint in the dissolution action. Third, the court had to adjudicate her causes of 

action against Arthur and Cundall in the civil action.

Bonnie maintained that, with the exception of property characterization and division, 

all of these issues for adjudication arose from Arthur’s failure to disclose that he had 

encumbered properties allocated to Bonnie, and Arthur’s and Cundall’s subsequent conduct 

in foreclosing on Bonnie’s properties.

a. Discussions Regarding the Judgment on Reserved Issues

At the start of trial, the court addressed the MSA and whether it had been 

incorporated into a judgment on reserved issues in the dissolution action. The court asked 

whether any party was trying to enforce the MSA as a judgment under Code of Civil 

Procedure section 664.6.3 Counsel for Arthur stated, “Well, we are,” and indicated he and 

Bonnie’s counsel had both tried to do that in the past, but the judge who had formerly

presided over the matter said “we didn’t need a judgment because we already had [a 

judgment].” According to counsel, the prior judge theorized that the MSA itself was the

judgment. Arthur’s counsel informed the court he had a proposed judgment prepared, and it 

was the same judgment he had served on Bonnie’s counsel years ago, during his previous 

efforts to incorporate the MSA into a judgment. The court asked Bonnie’s counsel whether

she wanted to enter Arthur’s proposed judgment. Her counsel replied, “No,” and that 

Bonnie wanted to set aside the MSA. The court and Bonnie’s counsel then had the 

following exchange:

 

3 Further undesignated statutory references are to the Code of Civil Procedure.
7

“The Court: You don’t want me to enter the marital settlement agreement, enter the 

judgment and charge Mr. Corona with the trust deeds—with the value of the trust deeds?

“[Bonnie’s Counsel]: No, Your Honor.

“The Court: Okay. So we’re going to start from scratch?

“[Bonnie’s Counsel]: Yes, Your Honor.”

Arthur’s counsel responded by arguing that the MSA resolved all the issues in the 

dissolution action, and Bonnie had never moved to set aside the MSA. There was nothing, 

therefore, before the court in the dissolution action. The court asked if Arthur was 

effectively making an oral motion under section 664.6 to enter a judgment based on the 

MSA.4 Counsel agreed that was the case. Bonnie’s counsel argued the MSA should be set 

aside, explaining his trial brief referenced the facts that would justify this relief. By the end 

of the hearing, after more argument and after the court had recessed to allow counsel to 

speak to their clients, Bonnie’s counsel stated that she was willing to enter a judgment based 

on the MSA, so long as the court removed the encumbered properties from those allocated 

to Bonnie, “with the express understanding that the [MSA], with that caveat, would not be 

balanced anymore, because it was not—it was not—it’s not a bargained-for agreement.” 

But Bonnie wanted to keep all the other properties allocated to her in the MSA, and she still 

wanted the remedies sought in her joinder complaint and civil action. Arthur’s counsel did 

not agree with that proposal, arguing again that the MSA already resolved the issues

encompassed in it, and there was no “triable issue of fact.” The court did not make a 

decision about entering a judgment incorporating the MSA, indicating it needed more time 

to think through the issue.

 

4 Section 664.6 states in pertinent part: “If parties to pending litigation stipulate, in a 

writing signed by the parties outside the presence of the court or 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.”
8

The following day, the court stated that it had reviewed the file and concluded the 

prior judge took Arthur’s November 2008 motion to enforce the MSA off calendar because 

Arthur did not appear. Further, the court concluded from its review that the prior judge also 

took off calendar Bonnie’s March 2010 motion to enter a judgment “pursuant to stipulation 

of the parties.” After setting forth that history, the court stated as follows:

“So here’s, I think, where we are. I think what I do is I enter the judgment. I don’t 

carve anything out of the judgment. I think I enter the judgment. So then the judgment gets 

entered. There’s no motion to set it aside. There’s no motion not to. I have a settlement at 

the time of trial, a complete and full settlement at the time of trial. [¶] I think that 

Mr. Rombro [(Bonnie’s counsel)], at that point, doesn’t have—there’s no motion to set the 

judgment aside. But if he filed one, I don’t think he has grounds because I think to set it 

aside—because I think the statute of limitations has passed because she’s clearly known for 

longer than two or three years that the settlement agreement talks about these—that there’s 

no lien on any of these properties.”

Elsewhere, the court acknowledged that its belief about the timeliness of Bonnie’s 

challenge to the MSA was based on an assumption that the facts Arthur’s counsel had 

argued were true. (“[A]ssuming that’s all true, the title search shows these liens, assuming 

all of those things which I’m going to take on an offer of proof basis that you can prove up 

if you had to, then yes. She’s past the time on a known or should have known standard 

about the liens.”) The court recessed to give both parties the opportunity to look at Arthur’s 

proposed judgment on reserved issues to ensure that it paralleled the language of the MSA, 

with the understanding that Bonnie did not want the court to enter the judgment and was 

reserving her rights in that respect. It did not enter the judgment that day, but proceeded to 

opening statements and the first witness.

The next day of trial, October 2, 2014, the court returned to the judgment on reserved 

issues. The judgment had places for the parties and their counsel to sign, as well as the 

court. The court asked Bonnie’s counsel if he was going to sign it, and counsel replied, 

“No, you can enter it.” The court signed and entered the judgment on reserved issues on 
9

that date, as did Arthur and his counsel. The spaces for Bonnie’s and her counsel’s 

signatures remained blank. The trial proceeded on that day and for two more thereafter.

Bonnie filed a timely notice of appeal from the judgment on reserved issues in the 

dissolution action.

b. The Court’s Statement of Decision After Trial

Bonnie does not purport to appeal from a judgment or the statement of decision in the 

civil action or the same on the joinder complaint. We nevertheless summarize the court’s 

statement of decision after trial on these matters because it is pertinent to our resolution.

The court’s final statement of decision, filed in December 2014, “augment[ed] the 

tentative decision” and did not change it, to the extent the tentative and final decisions were 

consistent. Between the tentative and final decisions, the court found and ruled as follows.

Dissolution Action: In 2008, the parties reached a full resolution of the dissolution 

action through a signed and filed MSA. Both parties brought motions to enforce the MSA 

and enter judgment, both of which the court never formally ruled on, according to minute 

orders in the file. The court converted the MSA into a judgment at the beginning of trial. 

“At the time of the trial, neither party sought to set aside the MSA; again both parties 

wished to have the MSA enforced. In fairness, [Bonnie] took issue with a limited number of 

provisions and argued that she had been defrauded into signing the MSA. Importantly, 

however, neither party, at any time, brought a request to the court to set aside the MSA, and 

from the evidence at trial,” the parties had fully performed under the MSA. “The MSA

disposed of all matters in the dissolution action,” and there was “nothing left in the 

dissolution case to try.” Because Bonnie had not moved to set aside the judgment, the 

judgment stood as entered. The court took “no position on any issues of judgment set aside 

or enforcement,” but should either party move to set aside any portion of the judgment or 

enforce its terms, the court would address the issues presented.

Joinder Complaint: The prior judge had permitted Bonnie to join Cundall in the 

dissolution action only after the parties had fully settled the matter in the MSA. Regardless 

of the prior judge’s ruling, there was no dispute to intervene into at that point. Therefore, 

the court declined to make an award on the joinder complaint.
10

Civil Action: As to Arthur, Bonnie had no remedy against him in the civil action, as 

opposed to the dissolution action. All of her causes of action against him sounded in breach 

of fiduciary duty and properly belonged in the dissolution action. The Family Code 

provided sufficient remedies against him such that recovery in the civil action was 

inappropriate. The court, therefore, rendered a defense verdict for Arthur in the civil action.

Still, the court noted that “[t]he real, underlying issue in this matter” was Bonnie’s 

claim that Arthur essentially defrauded her at the time of the MSA. The court also noted 

that Bonnie sought many findings on issues that would be relevant to a set aside motion, but 

not to the civil action. Because Bonnie had not moved to set aside the judgment on reserved 

issues, the court declined to make any such findings at that time, and explained that it would 

resolve Bonnie’s claims once she brought a motion to set aside the judgment. The court 

observed there was evidence supporting both parties on the issue of fraud or breach of 

fiduciary duty. Some of that evidence showed Bonnie had knowledge of the lien on the 

encumbered properties at the time she signed the MSA and also shortly after signing it, 

when she had a title report run on the properties.

As to Cundall, there was no evidence she made any representations to Bonnie, let 

alone intentional misrepresentations. There was also insufficient evidence to hold Cundall

liable for slander of title. She was not aware of the MSA, and the evidence showed she 

purchased the promissory note and deed of trust from Granby in an attempt to secure a loan 

she made to Arthur. In other words, Cundall was a good faith purchaser, and she purchased

before the parties entered into the MSA. She successfully foreclosed on the promissory note 

and deed of trust. Further, there was no evidence that Cundall conspired with Arthur or 

anyone else to injure Bonnie. The court construed the causes of action for concealment and 

constructive fraud as brought against Arthur only. Overall, the court rendered a verdict for 

Cundall on the civil complaint.

In sum, the court held that the right of recovery for Bonnie, to the extent she had one, 

resided solely against Arthur “in a modification, set aside, or enforcement action of the 

dissolution judgment.” But the court took “absolutely no position on any such request” 
11

because it was not before the court. Moreover, there was insufficient evidence before the 

court to determine whether it should set aside all of the MSA or only some.

After the court issued its statement of decision, Bonnie filed objections to it 

specifying the controverted issues on which she believed the court had not ruled. The court 

responded by minute order that there was nothing more on which the court could rule until 

Bonnie filed a set aside motion.

4. Bonnie’s Motion to Set Aside the MSA and Judgment

Following the court’s repeated instruction, in March 2015, Bonnie filed a motion to 

set aside the MSA and the judgment on reserved issues. Much as she had at the time of 

trial, Bonnie insisted that she did not know of the lien on the encumbered properties when 

she agreed to the MSA, and Arthur never disclosed them to her, even in his declaration of 

disclosure during the dissolution action. She argued that the court should set aside the 

judgment on reserved issues and the MSA based on her mistake of fact.

Arthur responded that, consistent with his trial testimony, Bonnie and their son, Steve 

Corona, had exclusive possession and use of his business office since 2001. As such, 

Bonnie and Steve had possession and control of the records showing the lien on the 

encumbered properties, and when Arthur prepared his disclosures for the dissolution action, 

he did them from memory. He did not have sufficient knowledge to break down his total 

debts by property. Arthur also pointed to a 1999 letter from his former accountant to Steve, 

which attached copies of the promissory note and deed of trust encumbering the subject 

properties. He insisted that this evidence showed Bonnie had knowledge of the 

encumbrance because she relied on Steve to handle her business affairs. Further, when 

Arthur stated in the MSA that the properties allocated to Bonnie were not encumbered, he 

thought the question was whether they had been encumbered since the time the dissolution 

action began—not if they had ever been encumbered. Arthur insisted that he never 

attempted to mislead Bonnie.

The court denied Bonnie’s set aside motion on procedural grounds. The court noted 

that there was an evidentiary dispute regarding what both parties knew when they signed the 

MSA and whether Bonnie knew of the lien on the encumbered properties. But Bonnie had 
12

appealed from the judgment on reserved issues, the very judgment that Bonnie now wanted 

to set aside. The court ruled that until this court “more clearly define[d] the procedural 

posture of this case,” it could not make any further orders regarding the MSA or judgment.

Bonnie filed a timely notice of appeal from the court’s order denying her set aside 

motion. We consolidated this appeal with her appeal from the judgment on reserved issues 

for purposes of argument and decision.

DISCUSSION

Section 664.6 allows the court to enter judgment pursuant to the terms of a settlement 

“upon motion.” Bonnie contends the court erred in entering the judgment on reserved issues 

because neither party moved to enter the judgment, and the court should have considered 

her defenses to the MSA before reducing it to a judgment.

“Section 664.6 permits the trial court judge to enter judgment on a settlement 

agreement without the need for a new lawsuit. [Citation.] It is for the trial court to 

determine in the first instance whether the parties have entered into an enforceable 

settlement.” (Osumi v. Sutton (2007) 151 Cal.App.4th 1355, 1360.) “A section 664.6 

motion is appropriate . . . even when issues relating to the binding nature or terms of the 

settlement are in dispute, because, in ruling upon the motion, the trial court is empowered to 

resolve these disputed issues and ultimately determine whether the parties reached a binding 

mutual accord as to the material terms.” (In re Marriage of Assemi (1994) 7 Cal.4th 896, 

905.) The settlement agreement “must embody an enforceable contract between the parties: 

‘A settlement agreement is a contract, and the legal principles which apply to contracts 

generally apply to settlement contracts.’ ” (Sully-Miller Contracting Co. v. 

Gledson/Cashman Construction, Inc. (2002) 103 Cal.App.4th 30, 35-36 (Sully-Miller); see

Terry v. Conlan (2005) 131 Cal.App.4th 1445, 1459-1461 [trial court erred in entering 

judgment on settlement agreement when no meeting of the minds on material terms 

occurred].) This is equally true of an MSA, the species of settlement agreement at issue 

here. The court may set it aside based on traditional contract law. (In re Marriage of Egedi 

(2001) 88 Cal.App.4th 17, 22.) The court also has “the power to invalidate the MSA if it 
13

was inequitable. Family law cases ‘are equitable proceedings in which the court must have 

the ability to exercise discretion to achieve fairness and equity.’ ” (Id. at pp. 22-23.)

“In ruling on a motion to enter judgment the trial court acts as the trier of fact, 

determining whether the parties entered into a valid and binding settlement. [Citation.]

Trial judges may consider oral testimony or may determine the motion upon declarations 

alone.” (Terry v. Conlan, supra, 131 Cal.App.4th at p. 1454.) We review a trial court’s 

factual findings on the enforceability of the settlement agreement for substantial evidence.

(Osumi v. Sutton, supra, 151 Cal.App.4th at p. 1360.) But we review the court’s decision de 

novo for errors of law. (Sully-Miller, supra, 103 Cal.App.4th at p. 35.) For instance, when 

“the principal claim of error ‘raises a question of law concerning the construction and 

application of [Code of Civil Procedure] section 664.6[,] . . . it requires independent 

appellate review.’ ” (Chan v. Lund (2010) 188 Cal.App.4th 1159, 1166.)

In this case, Bonnie contends a party had to move to enter judgment based on the 

MSA, while Arthur contends “upon motion” (§ 664.6) means either the parties could move

or the court, on its own motion, could enter judgment. To begin with, the record 

demonstrates the court did not act solely on its own motion. Both parties, at one point in 

years past, had moved to enter the MSA as a judgment or enforce it. In Bonnie’s case, she 

coupled her request with a request to expunge the liens on the encumbered properties 

awarded to her. Neither of those written motions was pending at the time of trial. But at the 

very least, at the time of trial, Arthur was making an oral motion to reduce the MSA to a 

judgment. The court asked whether he was making such an oral motion, and he replied 

affirmatively.

Regardless of who moved to enter judgment based on the MSA—Arthur or the 

court—the court erred in entering judgment while declining to rule on Bonnie’s arguments 

in opposition. The court made plain it was not ruling on the merits of her arguments to 

rescind, set aside, or cancel parts of the MSA because she had not filed a set aside motion. 

This was apparent from the comments it made before entering the judgment on reserved 

issues, as well as its later statement of decision, in which it declined to consider any relief 

against Arthur because Bonnie had not filed a set aside motion. The court suggested at 
14

various points that there was evidence favoring both parties’ positions and that Bonnie 

might have a problem setting aside the MSA because of statute of limitations issues. But 

rather than just highlighting the issues, the court should have determined whether the parties 

entered into an enforceable settlement agreement when considering whether to reduce the 

MSA to a judgment under section 664.6 (Osumi v. Sutton, supra, 151 Cal.App.4th at 

p. 1360), particularly because Bonnie opposed entering the judgment. The court’s decision 

to enter judgment on the MSA should have disposed of Bonnie’s arguments based on 

contract law and equitable principles (In re Marriage of Egedi, supra, 88 Cal.App.4th at 

pp. 22-23), and any opposing arguments Arthur might have based on the statute of 

limitations or the various waivers Bonnie agreed to in the MSA. As the trier of fact, the trial 

court should be the first tribunal to conduct these fact-intensive inquiries, not us. In short, 

we see no need to have required Bonnie to file a set aside motion, when the issues had been 

brought up in the context of a request to enter the judgment, and the parties could have 

presented the relevant evidence and arguments during the scheduled trial proceedings.

The court’s refusal to resolve conflicts in the evidence and rule on the merits means 

that, in effect, we have no findings to review for substantial evidence. We are dealing with 

something more in the nature of a legal error in the application of section 664.6.

Moreover, Bonnie suffered prejudice from the error because she was unable to obtain 

any relief at all against Arthur. From the court’s suggestion that some evidence favored

Bonnie’s position, we think it reasonably probable she might have obtained relief, had the 

court considered it. And the fact that Bonnie filed a set aside motion after trial does not 

necessarily eliminate the harm caused by the court’s failure to consider her arguments prior 

to entering judgment. Under the Code of Civil Procedure and the Family Code, the court 

may set aside a judgment for mistake, inadvertence, surprise, excusable neglect, actual 

fraud, perjury, duress, mental incapacity, or failure to comply with the disclosure 

requirements of the Family Code. (Code Civ. Proc., § 473, subd. (b); Fam. Code, § 2122.)

But if a settlement agreement has not merged into a judgment, a party may assert contract 

remedies beyond these grounds for setting aside judgments. (Fam. Code, § 2128, subd. (b) 

[“Nothing in this chapter changes existing law with respect to contract remedies where the 
15

contract has not been merged or incorporated into a judgment.”].) Once merged into a 

judgment, the contractual warranties and obligations imposed by a settlement agreement do 

not survive and are not enforceable as such. (In re Marriage of Corona (2009) 172 

Cal.App.4th 1205, 1221 [refusing “to imply a covenant of good faith and fair dealing—and 

corresponding duty—into the terms of the parties’ merged judgment”].) Thus, the 

arguments that Bonnie might have asserted before the MSA merged into the judgment were

arguably broader than those she might have asserted in a postjudgment set aside motion.

Arthur contends Bonnie waived her objections to incorporating the MSA into a 

judgment when the court asked if Bonnie’s counsel would sign the proposed judgment on 

reserved issues, and counsel answered, “No, you can enter it.” This was no waiver. By 

declining to sign it, counsel indicated his continuing objection to entering the judgment. 

Counsel’s statement that the court could enter the judgment was obviously a recognition that 

the court had made its decision and any further objections would have been futile. Bonnie 

sufficiently preserved her objections to the court’s course of action.

In view of our finding of prejudicial error, we reverse the judgment on reserved 

issues and remand for the court to consider Bonnie’s argument that all or part of the MSA 

was not enforceable. Our reversal of the judgment on reserved issues renders moot 

Bonnie’s motion to set aside that judgment in the trial court. We will therefore vacate the 

court’s order denying the set aside motion, and we need not consider whether the court had 

jurisdiction to consider the set aside motion after Bonnie perfected her appeal from the 

judgment.

At oral argument, Arthur suggested that the doctrine of collateral estoppel should

prevent us from reversing and remanding for the court to rule on Bonnie’s arguments to 

rescind or set aside the MSA. He asserted the trial on Bonnie’s civil complaint already 

resolved all of her arguments to set aside the MSA. We are not persuaded by this argument. 

The doctrine of collateral estoppel gives conclusive effect to a determination of an 

issue in a former proceeding. (Griset v. Fair Political Practices Com. (2001) 25 Cal.4th 

688, 701-702.) “Traditionally, we have applied the doctrine only if several threshold 

requirements are fulfilled. First, the issue sought to be precluded from relitigation must be 
16

identical to that decided in a former proceeding. Second, this issue must have been actually 

litigated in the former proceeding. Third, it must have been necessarily decided in the 

former proceeding. Fourth, the decision in the former proceeding must be final and on the 

merits. Finally, the party against whom preclusion is sought must be the same as, or in 

privity with, the party to the former proceeding. [Citations.] The party asserting collateral 

estoppel bears the burden of establishing these requirements.” (Lucido v. Superior Court

(1990) 51 Cal.3d 335, 341.)

To begin with, the court expressly stated several times that it was taking no position 

on Bonnie’s arguments but would do so at a later date, when she brought a motion to set 

aside the judgment. A remand for further proceedings is appropriate precisely because the 

court declined to resolve on the merits Bonnie’s arguments for setting aside the MSA. 

Consequently, the court did not “necessarily decide[]” these issues in the trial on Bonnie’s

civil complaint (Lucido v. Superior Court, supra, 51 Cal.3d at p. 341), nor are the issues to 

be decided “identical,” when the court declined to decide them in the former proceedings. 

Both are requirements for collateral estoppel to apply.

Furthermore, the trial on the civil complaint is a “former” proceeding at this point 

only because the court entered the judgment in the dissolution action at the beginning of 

trial, over Bonnie’s objections. Absent this error, all of these issues would have been 

decided together. There is no evidence that Bonnie intended to game the system by getting

two bites at the apple. If it were up to her, the court would have considered her arguments 

at the time of trial, and collateral estoppel would not be even an arguable issue.

But to the extent Arthur was simply expressing a concern about judicial economy, his 

point is a reasonable one. In its statement of decision, the trial court anticipated this 

concern. The court noted: “Should either party bring an RFO [(request for order)] to set 

aside any portion of the judgment or to enforce the judgment’s terms, the court will certainly 

address the issues presented. Of some concern, however, is judicial economy. Should 

either party bring an action, it would be inappropriate to retry the issues that were fully 

addressed in the most recent trial. Court and counsel should confer as to the most time 

efficient way to address any follow-on RFO.”
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We share the court’s concern about judicial economy. For this reason, we are not 

suggesting that the court conduct a new trial on remand, with the same witnesses testifying 

on the same matters to which they already testified during trial in the civil action. As we 

discussed above, in ruling on motions to enter judgment, the court may consider oral 

testimony or rely on declarations alone. (Terry v. Conlan, supra, 131 Cal.App.4th at 

p. 1454.) The civil action arose from the same set of facts as Bonnie’s arguments to set 

aside or rescind the MSA. The court may rely on the evidence adduced at trial in the civil 

action to resolve Bonnie’s arguments and merely request that the parties submit briefing 

citing that evidence. Or, it may decide that Bonnie should be permitted to present additional 

oral testimony. We leave that decision up to the trial court.

DISPOSITION

The judgment on reserved issues in the dissolution action (BD386697) is reversed. 

The order denying Bonnie’s motion to set aside that judgment is vacated. On remand, 

before reducing the MSA to a judgment, the court shall consider Bonnie’s arguments that 

the MSA was not valid or enforceable in whole or in part. The court may conduct whatever 

proceedings its deems necessary to determine the validity or enforceability of the MSA and 

to determine the remedies to which Bonnie is entitled, if any. Bonnie shall recover costs on 

appeal.

Bonnie has not appealed from the judgment in the civil action (BC440915), which 

the court deemed related to but not consolidated with the dissolution action, and that 

judgment is not before us. Accordingly, our disposition does not affect the judgment in the 

civil action.

FLIER, J.

WE CONCUR:

BIGELOW, P. J. RUBIN, J.