Court Opinion

ID: 9949432
Source: CourtListenerOpinion
Date Created: 2024-03-11 17:03:29.903178+00
Date Added: 2024-06-11T14:26:04.060718
License: Public Domain

Filed 3/11/24 Perez v. Graham CA1/1
                NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not
certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been
certified for publication or ordered published for purposes of rule 8.1115.

        IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                 FIRST APPELLATE DISTRICT

                                             DIVISION ONE

 EUGENE D. PEREZ et al.,
          Plaintiffs and Appellants,
                                                                 A166572
 v.
 KENNETH GRAHAM,                                                 (Contra Costa County
                                                                 Super. Ct. No. MSC13-01679)
          Defendant and Respondent.

        Eugene D. Perez and Herenia B. Perez (collectively, plaintiffs) appeal
from a trial court order granting defendant Kenneth Graham’s motion to
vacate the renewal of the judgment against him. We affirm.
                                            I. BACKGROUND
A. Plaintiffs’ Lawsuit and Graham’s Efforts to Set Aside Judgment
        Plaintiffs sued Graham for legal malpractice; in 2014, the trial court
entered a $300,000 default judgment against him after he failed to respond to
the complaint.1 Years later, Graham moved to set aside the default
judgment, contending he did not have notice of the lawsuit. In January 2022,
the trial court denied Graham’s motion, after which he moved for

        1 Plaintiffs also named the Law Offices of Kenneth R. Graham as a

defendant. That entity is not a party to this appeal and any references in
this opinion to “Graham” refer to him as an individual.

                                                        1
reconsideration. Graham also appealed the order denying his motion to set
aside the default judgment.
B. Settlement Agreement
      In March 2022—while the appeal and motion for reconsideration were
pending—the parties settled their dispute. Plaintiffs accepted Graham’s offer
to pay $12,000 in exchange for a satisfaction of judgment. Shortly thereafter,
the parties entered a written settlement and release agreement (agreement)
“with the intent to fully and finally resolve all issues that were raised, and
those that could have been raised in the Underlying Action and an Appeal.”
Graham agreed to pay plaintiffs $12,000 within 10 days of execution and to
file an abandonment of his appeal. In return, plaintiffs waived their right to
enforce the judgment, released Graham from all past, present, or future
claims arising out of the underlying lawsuit or Graham’s appeal, and agreed
to file a satisfaction of judgment. The agreement was fully executed on
March 21; thus, payment was due by March 31.
      Graham failed to make the required payment by the deadline. From
mid-March through April, Graham and plaintiffs’ counsel exchanged emails
regarding payment. Graham sent a photo of the cashier’s check he had
drawn and explained he was in the Philippines and would check on the
process to send it to the United States. In numerous subsequent emails,
Graham and plaintiffs’ counsel discussed the logistics of delivering the check,
including requests for Graham to mail the check, requests for plaintiffs’
counsel to send Graham a prepaid mailing label, plaintiffs’ counsel providing
wire instructions as an alternative method of payment, and Graham’s offer to
have a friend in the Philippines traveling back to the United States bring it
with him.

                                        2
      On April 25, 2022, plaintiffs’ counsel inquired about the check. Counsel
asked Graham to mail the check or, alternatively, bring it to San Francisco or
Oakland where counsel would pick it up. Counsel continued, “Unless the
check is received in the next 5 days [April 30], the settlement will be void.”
Plaintiffs did not receive the check by April 30. On May 1, plaintiffs’ counsel
again inquired about the status of the check. On May 2, plaintiffs’ counsel
instructed Graham to answer his inquiries within 24 hours “or consider the
settlement void.” The next day, plaintiffs’ counsel asked Graham for mailing
information he needed to send Graham a prepaid shipping label. They
communicated further regarding delivery of the check; thereafter, Graham
mailed the check and plaintiffs’ counsel received it on May 19.
      In the agreement, Graham agreed to file an abandonment of his appeal.
Having received notice from the Court of Appeal clerk that his appeal would
be dismissed if he did not pay the filing fee, he waited for the clerk’s
dismissal. Graham’s appeal was dismissed in April. By this point, Graham
had also taken his motion for reconsideration off calendar per plaintiffs’
counsel’s request.
C. Renewal of the Judgment Against Graham
      The agreement required plaintiffs to file a satisfaction of judgment.2 In
their email correspondence, plaintiffs’ counsel promised to “file an
acknowledgement of full satisfaction of judgment” upon receipt of the check.
In late-May, after plaintiffs had received Graham’s payment, plaintiffs filed
an acknowledgment of partial satisfaction of judgment, confirming they had

      2 When a money judgment is satisfied, the judgment creditor must

immediately file with the court an acknowledgment of satisfaction of
judgment. (Code Civ. Proc., § 724.030.) All undesignated statutory
references are to the Code of Civil Procedure.

                                        3
received $12,000. They subsequently renewed the 2014 judgment against
Graham, which totaled over $530,000 and included a $12,000 credit.3
D. Motion to Vacate and Trial Court Decision
      In August 2022, Graham moved to vacate the renewal of the judgment
pursuant to section 683.170,4 asserting the terms of the agreement were a
defense to an action on the judgment. He paid the agreed upon sum and
dismissed his appeal pursuant to the agreement, and as a result, plaintiffs
could not seek to enforce the judgment. He contended plaintiffs had waived
their right to void the contract for late payment—instead of terminating the
agreement, they insisted payment be made, confirmed receipt, and accepted
the money. Additionally, he argued plaintiffs were equitably estopped from
renewing the judgment.
      In opposition, plaintiffs argued they did not waive timely payment.
They contended Graham materially breached the agreement by not paying on
time, which excused their obligation to acknowledge a full satisfaction of
judgment.
      The trial court granted Graham’s motion to vacate the renewal of the
judgment. It found plaintiffs had accepted and cashed the check knowing it
was paid pursuant to the agreement. The court concluded this acceptance
constituted an accord and satisfaction pursuant to Civil Code section 1526

      3 A money judgment is enforceable for 10 years, which period may be

extended by renewal of the judgment. (§§ 683.020, 683.110.) A judgment
creditor may renew a judgment by filing an application for renewal, upon the
filing of which the judgment is renewed and the period of enforceability is
extended. (§ 683.120.)

      4 Section 683.170, subdivision (a) provides that a party may move to

vacate the renewal of a judgment “on any ground that would be a defense to
an action on the judgment.”

                                       4
and an intentional waiver of plaintiffs’ right to rescind the agreement. The
court acknowledged “the difficulties in obtaining the funds, and plaintiffs’
reasonable lack of trust in” Graham, and reasoned “these circumstances may
suggest plaintiffs would be more willing to waive deadlines in order to collect”
payment. It concluded plaintiffs’ “argument that the settlement agreement
was repudiated because [Graham] failed to timely comply is inconsistent with
their retention of the benefits from [Graham’s] performance.”
                                II. DISCUSSION
      Plaintiffs assert multiple arguments on appeal, most of which are
identical to their arguments below. They contend Graham materially
breached the agreement by failing to submit payment by March 31, 2022—
the deadline imposed by the agreement—which excused their obligation to
acknowledge full satisfaction of the judgment. Additionally, they argue they
did not waive their right to timely payment. Finally, they assert that
contrary to the trial court’s ruling, there was no accord and satisfaction. As
discussed below, we conclude plaintiffs waived their right to claim that
Graham’s breach excused their performance and we do not reach plaintiffs’
other arguments.
A. General Principles and Standard of Review
      A party may move to have the renewal of a judgment “vacated on any
ground that would be a defense to an action on the judgment.” (§ 683.170,
subd. (a).) Settlement constitutes a defense. (See Folsom v. Butte County
Assn. of Governments (1982) 32 Cal.3d 668, 677 [a “ ‘valid compromise
agreement has many attributes of a judgment, and . . . operates as a bar to
the reopening of the original controversy’ ”].) Additionally, that the judgment
was satisfied by an accord and satisfaction is a defense. (In re Marriage of
Thompson (1996) 41 Cal.App.4th 1049, 1058.)

                                       5
      When there has been a material breach of a contract, the non-breaching
party has “the right and option to determine what remedy he will pursue.”
(B. L. Metcalf General Contractor, Inc. v. Earl Erne, Inc. (1963)
212 Cal.App.2d 689, 693.) One option is to terminate the contract. (Ibid.)
Alternatively, a party may waive the breach, i.e., “ ‘ “keep the contract alive,
for the benefit of both parties, being at all times ready and able to
perform.” ’ ” (Rehart v. Klossner (1941) 48 Cal.App.2d 46, 50.)
      The right to rescind a contract may be waived. (Neet v. Holmes (1944)
25 Cal.2d 447, 458.) Waiver is an intentional relinquishment of a known
right, and it “may be implied through conduct manifesting an intention to
waive.” (Gould v. Corinthian Colleges, Inc. (2011) 192 Cal.App.4th 1176,
1179.) “Waiver of a right to rescind will be presumed against a party who,
having full knowledge of the circumstances which would warrant him in
rescinding, nevertheless accepts and retains benefits accruing to him under
the contract.” (Neet, at p. 458; see also Gould, at p. 1179 [acceptance of
benefits of a contract is conduct that supports a finding of waiver].) Waiver is
a question of fact for the trial court. (Gould, at p. 1179.)
      The party seeking to vacate the renewed judgment has the burden of
proof by a preponderance of the evidence. (American Contractors Indemnity
Co. v. Hernandez (2022) 73 Cal.App.5th 845, 848.) We review the trial court’s
decision for abuse of discretion, viewing the evidence in the light most
favorable to the decision and deferring to the court’s resolution of factual
conflicts. (Ibid.) We review questions of law de novo. (Ibid.)
B. Analysis
      It is undisputed that Graham breached the agreement by failing to pay
plaintiffs by the imposed deadline. The issue is whether plaintiffs waived

                                         6
their right to claim that Graham’s breach excused their obligation of
acknowledging full satisfaction of the judgment. We conclude they did.
      By their conduct, plaintiffs waived the right to claim that Graham’s
breach excused their performance. After the deadline imposed by the
agreement—March 31, 2022—passed without payment, plaintiffs did not
rescind the agreement. Instead, they repeatedly discussed payment with
Graham and demanded delivery of the check. In April, plaintiffs extended
the deadline for Graham to pay, instructing him to deliver the check by April
30, or “the settlement will be void.” When the April 30 deadline passed
without payment, plaintiffs did not rescind the agreement. Instead, they
continued discussions about the check. On May 2, while plaintiffs notified
Graham he had breached the agreement and requested information about the
check or they would “consider the settlement void,” plaintiffs continued to
inquire about delivery of the check for two more weeks. Plaintiffs received
Graham’s check on May 19.
      This conduct constitutes waiver. After the initial and extended
deadlines for Graham to pay expired, plaintiffs continued to recognize the
existence of the agreement and continued to demand payment. (See Neet v.
Holmes, supra, 25 Cal.2d at p. 458.) They then accepted the benefits under
the agreement. (See ibid.) Plaintiffs concede they accepted the $12,000
payment. (See Gould v. Corinthian Colleges, Inc., supra, 192 Cal.App.4th at
p. 1180 [for plaintiff “to keep the money and claim it does not constitute
waiver is absurd”].) Additionally, plaintiffs acknowledge Graham’s appeal
was dismissed and his motion for reconsideration was taken off calendar.
Repeating the trial court’s sentiment, we “acknowledge[] the difficulties in
obtaining the funds, and plaintiffs’ reasonable lack of trust in [Graham].”
But plaintiffs were aware of their right to rescind the agreement when

                                       7
Graham failed to submit timely payment, and they instead continued to
demand payment and, eventually, accepted payment. This acceptance “was
[an] unequivocal affirmance of the” agreement and “destroyed whatever right
of rescission” plaintiffs may have had. (Neet, at p. 458; see also Oakland
Raiders v. Oakland-Alameda County Coliseum, Inc. (2006) 144 Cal.App.4th
1175, 1190 [courts will find waiver when a “ ‘ “party’s acts are so inconsistent
with an intent to enforce the right as to induce a reasonable belief that such
right has been relinquished” ’ ”].)
      In their reply brief, plaintiffs argue for the first time that their
acceptance of Graham’s payment “may have amounted to a waiver of his
breach” if the agreement was the only basis on which they were entitled to
payment. They contend, though, that another basis existed to retain the
payment—collection of the judgment. We will not address this argument.
Plaintiffs did not assert it in the trial court, did not raise it in their opening
brief, and cite no authority to support it. (See Avalos v. Perez (2011)
196 Cal.App.4th 773, 776 [claim of error forfeited when party fails to bring it
to the trial court’s attention]; Crawley v. Alameda County Waste Management
Authority (2015) 243 Cal.App.4th 396, 403, fn. 4 [declining to consider
arguments raised for first time in a reply brief]; Hernandez v. First Student,
Inc. (2019) 37 Cal.App.5th 270, 277 [when an appellant raises an issue but
fails to support it with reasoned argument and citations to authority, the
point is waived].)
      Viewing the evidence in the light most favorable to the trial court’s
decision, we conclude the court did not abuse its discretion in vacating the
renewal of the judgment.

                                         8
                              III.   DISPOSITION
      The order granting Graham’s motion to vacate the renewal of judgment
is affirmed. Graham is entitled to costs on appeal. (Cal. Rules of Court,
rule 8.278(a)(2).)5

      5 If Graham has not already done so, he must return the record to

plaintiffs’ counsel pursuant to California Rules of Court, rule 8.153.

                                       9
                                            LANGHORNE WILSON, J.

WE CONCUR:

HUMES, P. J.

CASTRO, J.*

A166572
Perez v. Graham

      * Judge of the Superior Court of California, County of Alameda,

assigned by the Chief Justice pursuant to article VI, section 6 of the
California Constitution.

                                       10