Court Opinion

ID: 2686542
Source: CourtListenerOpinion
Date Created: 2014-07-30 23:01:04.644401+00
Date Added: 2024-06-11T09:35:23.415149
License: Public Domain

Filed 7/30/14 Sanchez v. Newhope Capital CA4/3

                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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

                                     FOURTH APPELLATE DISTRICT

                                                DIVISION THREE

PEDRO SANCHEZ, et al.,

     Plaintiffs and Appellants,                                        G049093

         v.                                                            (Super. Ct. No. 30-2011-00450220)

NEWHOPE CAPITAL, LLC, as Trustee,                                      OPINION
etc., et al.,

     Defendants and Respondents.

                   Appeal from a judgment of the Superior Court of Orange County, Thierry
Patrick Colaw, Judge. Affirmed.
                   Law Office of Nick A. Alden, Nick A. Alden and Aleksey Sirotin for
Plaintiffs and Appellants.
                   Roup & Associates, Ronald D. Roup; Wright, Finlay & Zak and Joan C.
Spaeder-Younkin for Defendant and Respondent Newhope Capital, LLC, as Trustee of
Santa Anna #1736 Trust.
               Michael D. May for Defendant and Respondent RESS Financial
Corporation.
               Roxborough, Pomerance, Nye & Adreani, Gary A. Nye and John W.
Hurney for Defendant and Respondent Gonzales & Gonzales Bonds and Insurance
Agency, Inc.
                                *              *              *
               Plaintiffs and appellants Pedro Sanchez, Maria Del Rosario Sanchez,
Nancy Sanchez, and Alma Sanchez (collectively, Sanchezes) appeal from the dismissal
of their claims against defendant and respondent Newhope Capital, LLC, as Trustee of
Santa Anna #1736 Trust (Newhope), after the trial court granted Newhope’s motion
under Code of Civil Procedure section 664.6 to enforce a written settlement agreement.1
The Sanchezes acknowledged they reached a settlement with Newhope and signed the
settlement agreement, but opposed the motion because the settlement agreement included
a sentence that partially released the other defendants in the action from liability for
damages caused by Newhope. According to the Sanchezes, this partial release is
unenforceable because they never agreed to it, or alternatively, they mistakenly consented
because they thought the partial release had been removed from the settlement
agreement. The trial court rejected these arguments.
               We affirm. As explained below, whether the Sanchezes agreed to the
partial release of the other defendants is determined based on their outward and objective
expression of consent. Their signature on the settlement agreement is an outward and
objective manifestation of consent to the settlement agreement and all of its terms; their
subjective belief or intent not to partially release the other defendants is irrelevant.

          1    All statutory references are to the Code of Civil Procedure unless otherwise
stated.

                                               2
              The Sanchezes’ contention they consented to the partial release because
they mistakenly believed the partial release had been removed from the settlement
agreement also fails. Any belief the partial release had been removed is the result of the
Sanchezes’ and their attorney’s neglect of their legal duty to read the settlement
agreement before signing it, and therefore does not invalidate their consent. The partial
release of the other defendants was in every version of the settlement agreement, and was
consistent with an e-mail the Sanchezes point to as an accurate summary of the settlement
terms. Neither the Sanchezes nor their counsel ever asked Newhope to remove the partial
release from the agreement, and Newhope did not conceal the partial release or otherwise
induce the Sanchezes into believing it was not in the final version of the settlement
agreement.

                                             I

                            FACTS AND PROCEDURAL HISTORY

              In 1999, the Sanchezes and Jorge Sanchez purchased a residence
(Residence) in Anaheim, California as joint tenants.2 Approximately four years later,
Pedro and Jorge Sanchez obtained an immigration bond from defendant and respondent
Gonzales & Gonzales Bonds and Insurance Agency, Inc. (Gonzales), acting as an agent
for American Surety Company (American), to secure the release of Manuel Arcos-Velez
from an immigration hold. The Sanchezes were unaware the paperwork Pedro and Jorge
Sanchez signed to obtain the bond included a deed of trust on the Residence.
              Several years later, Gonzales and American initiated nonjudicial
foreclosure proceedings on the Residence when Arcos-Velez failed to surrender to U.S.
Immigration and Customs Enforcement for deportation. Defendant and respondent RESS
Financial Corporation (Ress) conducted the nonjudicial foreclosure sale on Gonzales’s

       2      Jorge Sanchez is not a party to the settlement agreement or this appeal.

                                             3
and American’s behalf and executed a trustee’s deed upon sale transferring the Residence
to Newhope in January 2011.
              Newhope then filed an unlawful detainer action to evict the Sanchezes.
Newhope obtained an unlawful detainer judgment, but the Sanchezes successfully
appealed on the ground Newhope should have brought an action for partition rather than
unlawful detainer because only two of the five individuals holding a joint tenancy interest
in the Residence executed the deed of trust upon which the nonjudicial foreclosure sale
was based.
              In February 2011, the Sanchezes filed this action against Newhope, Ress,
American, and Gonzales seeking to quiet title, rescind the trust deed and trustee’s deed
upon sale, and recover damages based on a variety of defects in the trust deed and
nonjudicial foreclosure process. Newhope filed a cross-complaint seeking to partition the
Residence based on the interest Newhope acquired at the nonjudicial foreclosure sale.
              As the parties prepared for trial, the Sanchezes began settlement
discussions with Newhope in which Ress, American, and Gonzales declined to
participate. Four days before the trial date, Newhope’s attorney e-mailed the Sanchezes’
attorney to confirm a settlement had been reached: “Yes, the Newhope Capital people
have agreed to Quit Claim their 40% interest in the property and waive any claim for the
funds which were the subject of the foreclosure sale in return for a Dismissal, Full
Release, and Good Faith Settlement Agreement approved by the court. [Newhope’s
co-counsel] is preparing the Motion, Declaration, and Proposed Order for the Good Faith
Settlement. We will request the other defense counsel to stipulate to the Motion, but I
fear they will see their consent to the transfer of title as an admission of some sort and we
will have to give ex parte notice for an Order Shortening Time.”
              At approximately noon the next day, Newhope’s attorney e-mailed the
Sanchezes’ attorney a draft “Compromise, Settlement and Release Agreement”
(Settlement Agreement) memorializing the settlement. Paragraph 2 of the Settlement

                                              4
Agreement explained that in consideration for the Sanchezes’ release of claims and
dismissal of their action against Newhope with prejudice, Newhope would quitclaim to
the Sanchezes its interest in the Residence, dismiss its cross-complaint for partition with
prejudice, and waive any claim to the surplus funds from the nonjudicial foreclosure sale.
Paragraph 3 set forth the Sanchezes’ release of their claims against Newhope and its
related entities concerning the Residence, this action, the unlawful detainer action, and
the cross-complaint for partition. Paragraph 3 also included the following sentence that
would become the crux of the parties’ dispute concerning the Settlement Agreement:
“[The Sanchezes] acknowledge and agree that by virtue of their receipt of the Quitclaim
Deed and the value associated with same, as well as the satisfaction of all of the other
terms of this Agreement, [the Sanchezes] have been fully compensated for any and all
damages incurred or sustained as a result of any conduct of Newhope Capital at or
following the subject foreclosure sale, and that [the Sanchezes] will not seek any further
damages, or assert any further claims in the Action related to the conduct of Newhope
Capital, as against any other Defendants in the Action.” Finally, paragraph 5 explained,
“It is the intention of the Parties that this Agreement shall be effective as a full and final
accord and release for each and every matter specifically or generally herein referred to.”
              The Sanchezes’ attorney reviewed the proposed Settlement Agreement and
responded by e-mail less than two hours later requesting that Newhope’s attorney make
three changes to the Settlement Agreement. The only change relevant to this appeal is
the third and final change: “Third, I would like to add a provision specifically stating this
agreement does not inten[d] to release any of the other defendants, including, but not
limited to, Ress Financial Corporation, a California corporation, American Surety
Company, an Indiana corporation, [and] Gonzales & Gonzales Bonds and Insurance
Agency, Inc., a California corporation.” (Some capitalization omitted.)
              Newhope’s attorney made the requested changes and e-mailed a revised
Settlement Agreement to the Sanchezes’ attorney that same afternoon. In her e-mail,

                                               5
Newhope’s attorney explained she made each of the requested changes and also modified
paragraph 2 to clarify the Settlement Agreement was conditioned on the court finding the
settlement was reached in good faith under section 877.6. As for the third change the
Sanchezes’ attorney had requested, Newhope’s attorney explained, “See revision to Par. 5
re the other defendants.”3
              Newhope’s attorney did not receive a response from the Sanchezes’
attorney the rest of that day (Friday) or the following day (Saturday). Accordingly, on
Sunday afternoon, Newhope’s attorney e-mailed the Sanchezes’ attorney to inquire
whether any further changes were required to the Settlement Agreement. The Sanchezes’
attorney responded a couple hours later, “It seems OK. However, I have to go through it
with the clients.”
              All parties appeared for trial the next morning. At that time, the Sanchezes’
attorney asked Newhope’s attorney for a copy of the Settlement Agreement so he could
review it with the Sanchezes. The Sanchezes’ attorney contends Newhope’s attorney told
him she had revised the agreement according to his comments. Newhope’s attorney
acknowledges she provided the Sanchezes’ attorney a copy of the same Settlement
Agreement she had e-mailed late Friday afternoon, but denies she made any comments
about the agreement’s contents.
              The Sanchezes signed the Settlement Agreement after discussing it with
their attorney. The attorneys for Newhope and the Sanchezes then informed the court

       3       As revised, paragraph 5 reads, “It is the intention of the Parties that except
as otherwise provided in this Agreement, this Agreement shall be effective as a full and
final accord and release for each and every matter specifically or generally herein
referred to, and not a release of the other defendants, including, but not limited to, Ress
Financial Corporation, a California corporation, American Surety Company, an Indiana
corporation, [and] Gonzales & Gonzales Bonds and Insurance Agency, Inc., a California
Corporation. . . .” (Some capitalization omitted; italics added.) The italicized language
is the language Newhope’s attorney added to satisfy the request of the Sanchezes’
attorney.

                                             6
they had reached a settlement and Newhope would be seeking a good faith settlement
determination. The trial court continued the trial date to allow time for the good faith
settlement determination.
              Later that same day, Newhope’s attorney e-mailed a proposed stipulation to
the attorneys for the other parties and asked them to agree the settlement between
Newhope and the Sanchezes was in good faith under section 877.6. Upon reviewing
Newhope’s proposed stipulation, the Sanchezes’ attorney discovered the Settlement
Agreement his clients signed continued to include language in paragraph 3 that released
all defendants from liability for damages caused by Newhope’s acts or omissions. The
Sanchezes’ attorney immediately e-mailed Newhope’s attorney stating the Sanchezes
rescinded the Settlement Agreement because they never intended to release any
defendant other than Newhope.
              Newhope’s attorney responded by e-mail, explaining she thought
paragraph 3 was consistent with the parties’ agreement: “I understood the intent behind
the language to be that [the Sanchezes] would not seek damages against the other
defendants for the conduct of Newhope Capital, which is different from the other
defendants’ own conduct. I don’t believe the settlement language precludes [the
Sanchezes] from seeking damages against the other defendants for their own conduct.
This would be consistent with your request that there be a good faith settlement order.”
              Newhope therefore sought a good faith settlement determination from the
court without the Sanchezes’ stipulation. The Sanchezes opposed those efforts and also
filed a motion under section 664.6 to rescind the Settlement Agreement based on mutual
or unilateral mistake of fact concerning the partial release of the other defendants. The
Sanchezes’ reply in support of this motion expanded the relief they sought to include a
request that the court reform the Settlement Agreement by striking the language in
paragraph 3 quoted above and enforcing the remainder of the agreement.

                                             7
              The trial court denied the Sanchezes’ motion and found the parties agreed
to the settlement in good faith under section 877.6. The court explained it found no
mistake of fact warranting rescission or reformation of the Settlement Agreement:
“Failure to read a contract is not a sufficient ground to justify lack of assent, given that
counsel previously acknowledges he reviewed the Agreement and did not seek revision
or deletion of any terms regarding the provisions of paragraph #3. On the contrary, the
evidence is that he probably did read it since he requested a revision to another paragraph
in the document. Moreover, given that the terms of paragraph #3 are not contradictory to
the requested additional language of paragraph #5, there is no evidence that plaintiff’s
counsel made a mistake in fact.” The Sanchezes filed a petition for writ of mandate with
this court seeking to overturn the trial court’s ruling, but we summarily denied that
petition.
              Despite the trial court’s ruling on their motion, the Sanchezes refused to
dismiss their claims against Newhope as the Settlement Agreement required unless
Newhope agreed to remove the objectionable language from paragraph 3. Accordingly,
Newhope brought its own motion under section 664.6 seeking to enforce the Settlement
Agreement against the Sanchezes. The Sanchezes opposed the motion, again arguing
either a mutual or unilateral mistake existed concerning the objectionable language in
paragraph 3 and asking the court to enforce the Settlement Agreement with that portion
of paragraph 3 stricken.
              The trial court granted Newhope’s motion, finding the Settlement
Agreement was valid and binding as written, and required the Sanchezes to dismiss their
claims against Newhope. The court therefore ordered the claims against Newhope to be
dismissed and the Sanchezes appealed from that dismissal.

                                               8
                                               II

                                         DISCUSSION

A.     Governing Section 664.6 Principles and the Sanchezes’ Appeal
              Section 664.6 provides that where parties to pending litigation stipulate to
settle the case orally in court, or in a writing signed outside of court, the trial court may
enforce the settlement by entering judgment pursuant to its terms on the motion of one of
the parties. (§ 664.6.) The Legislature enacted section 664.6 to provide a summary
procedure for specifically enforcing a settlement agreement without the need for a new
lawsuit. (Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 809-810
(Weddington); see In re Marriage of Assemi (1994) 7 Cal.4th 896, 904-905 (Assemi).) If
the requirements of an oral stipulation in court or a writing signed by the parties cannot
be satisfied, a party to a settlement agreement may still enforce the agreement by filing a
separate lawsuit for breach of the agreement, or supplementing its pleading in the
pending action to allege breach of the agreement. (Weil & Brown, Cal. Practice Guide:
Civil Procedure Before Trial (The Rutter Group 2014) § 12:951.1, p. 12(II)-120 (rev. # 1
2013) citing Smith v. Golden Eagle Ins. Co. (1999) 69 Cal.App.4th 1371, 1374.)
              In ruling on a section 664.6 motion the trial court acts as the trier of fact to
determine whether the parties entered into a valid and binding settlement and the terms of
that agreement. (Bowers v. Raymond J. Lucia Companies, Inc. (2012) 206 Cal.App.4th
724, 732 (Bowers); Terry v. Conlan (2005) 131 Cal.App.4th 1445, 1454; Fiore v. Alvord
(1985) 182 Cal.App.3d 561, 565.) The court may consider oral testimony or it may
determine the motion on declarations alone. (Terry, at p. 1454.) Although the trial court
may resolve factual disputes concerning the existence of a settlement and its terms,
“nothing in section 664.6 authorizes a judge to create the material terms of a settlement,
as opposed to deciding what terms the parties themselves have previously agreed upon.”
(Weddington, supra, 60 Cal.App.4th at p. 810, original italics.)

                                               9
              We review the trial court’s factual determinations on the existence and
terms of a settlement under the substantial evidence standard, and any legal
determinations under the de novo standard. (Weddington, supra, 60 Cal.App.4th at
p. 815; see Assemi, supra, 7 Cal.4th at p. 911.) We presume the trial court’s judgment is
correct and “[a]ll intendments and presumptions are made to support the judgment on
matters as to which the record is silent.” (Cahill v. San Diego Gas & Electric Co. (2011)
194 Cal.App.4th 939, 956 (Cahill).)
              Here, the Sanchezes challenge both the trial court’s ruling denying their
section 664.6 motion to rescind or reform the Settlement Agreement, and the court’s
ruling granting Newhope’s section 664.6 motion to enforce the Settlement Agreement.
The Sanchezes make largely the same arguments on both motions and we address the
merits of those arguments below. We pause, however, to note nothing in section 664.6
authorized the trial court to rescind or reform the parties’ Settlement Agreement, even if
the trial court found the Sanchezes’ arguments convincing.
              As explained above, section 664.6 creates a summary procedure allowing a
trial court to specifically enforce a settlement agreement in the pending action if the
agreement satisfies the statutory requirements. (Weddington, supra, 60 Cal.App.4th at
pp. 809-810; see Assemi, supra, 7 Cal.4th at pp. 904-905.) On a section 664.6 motion,
the court either may enter judgment enforcing the settlement, or the court may deny the
motion if it finds the parties did not enter into a settlement or the settlement does not
satisfy the statutory requirements. Accordingly, the trial court could not have granted the
Sanchezes’ motion to rescind or reform the Settlement Agreement even if it found their
argument meritorious. In analyzing the Sanchezes’ challenges to the Settlement
Agreement, we therefore focus on whether the challenges have merit and, if so, whether a
basis exists for either denying Newhope’s motion to enforce the Settlement Agreement,
or granting the motion, but enforcing the Settlement Agreement without the challenged
language in paragraph 3 because it was not an agreed-upon term.

                                              10
B.     The Trial Court Did Not Err In Granting Newhope’s Section 664.6 Motion to
       Enforce the Settlement Agreement
              The Sanchezes acknowledge they reached a settlement with Newhope to
dismiss their claims against Newhope with prejudice and release Newhope from liability
for damages arising out of the foreclosure and this litigation, in exchange for Newhope
quitclaiming its interest in the Residence to the Sanchezes, dismissing its cross-complaint
for partition with prejudice, and waiving any claim to the surplus funds from the
nonjudicial foreclosure sale. The sole basis on which the Sanchezes opposed Newhope’s
motion to enforce the Settlement Agreement was that the release in paragraph 3 of the
agreement was broader than the Sanchezes intended because it partially released other
defendants in addition to Newhope.
              The Sanchezes assert two theories to support their contention the partial
release of the other defendants may not be enforced against them. First, the Sanchezes
argue they never agreed to partially release the other defendants. Second, if we
determine they agreed to partially release the other defendants, the release nonetheless
may not be enforced against them because they agreed to it based on a mistake of fact.
We address each of these contentions in turn.

       1.     The Sanchezes Agreed to the Partial Release by Signing the Settlement
              Agreement
              The Sanchezes first line of attack is that they never intended and never
agreed to release any defendant other than Newhope. According to the Sanchezes, they
did not negotiate and never even discussed the idea of releasing any other defendant, and
therefore there was no mutual consent or meeting of the minds regarding the partial
release of the other defendants included in paragraph 3. The argument lacks merit
because the Sanchezes agreed to every term in the Settlement Agreement by signing it.
              “A settlement agreement is a contract, and the legal principles which apply
to contracts generally apply to settlement contracts.” (Weddington, supra,

                                            11
60 Cal.App.4th at p. 810.) Consent is an essential element for the formation of any
contract and the consent must be mutual. (Id. at p. 811; Civ. Code §§ 1550, 1565.)
“‘Consent is not mutual, unless the parties all agree upon the same thing in the same
sense.’ [Citations.]” (Weddington, at p. 811; Civ. Code, § 1580.)
              “‘The existence of mutual consent is determined by objective rather than
subjective criteria, the test being what the outward manifestations of consent would lead a
reasonable person to believe.’ [Citation.]” (Weddington, supra, 60 Cal.App.4th at
p. 811.) Indeed, “[i]t is fundamental . . . that ‘there need not be a subjective meeting of
the minds; in the absence of fraud, mistake, etc. . . . , the outward manifestation or
expression of consent is controlling. In other words, mutual consent is gathered from the
reasonable meaning of the words and acts of the parties, and not from their unexpressed
intentions or understanding.’ [Citations.]” (Rodriguez v. Oto (2013) 212 Cal.App.4th
1020, 1027, original italics (Rodriguez); see Founding Members of the Newport Beach
Country Club v. Newport Beach Country Club, Inc. (2003) 109 Cal.App.4th 944, 956
[“California recognizes the objective theory of contracts [citation], under which ‘[i]t is
the objective intent, as evidenced by the words of the contract, rather than the subjective
intent of one of the parties, that controls interpretation’”].) A party’s “subjective intent,
or subjective consent, therefore is irrelevant. It is enough that a reasonable person would
understand that the parties consented to the contract and consented to the same terms in
the same sense.” (Beard v. Goodrich (2003) 110 Cal.App.4th 1031, 1040 (Beard).)
              “In the absence of fraud, mistake, or other vitiating factor, a signature on a
written contract is an objective manifestation of assent to the terms set forth there.”
(Rodriguez, supra, 212 Cal.App.4th at p. 1027; Marin Storage & Trucking, Inc. v. Benco
Contracting & Engineering, Inc. (2001) 89 Cal.App.4th 1042, 1049 (Marin) [“ordinarily
one who signs an instrument which on its face is a contract is deemed to assent to all its
terms”].)

                                              12
              Here, the Sanchezes objectively manifested their assent to the Settlement
Agreement, including the sentence in paragraph 3 partially releasing the other defendants,
by signing the agreement after their attorney explained it to them and signed it himself.
(Stewart v. Preston Pipeline, Inc. (2005) 134 Cal.App.4th 1565, 1587 (Stewart) [parties
objectively manifested their mutual assent to settlement by signing written settlement
agreement]; Money Store Investment Corp. v. Southern Cal. Bank (2002) 98 Cal.App.4th
722, 728 [bank objectively manifested consent when its employee signed
acknowledgment and accepted escrow conditions]; Marin, supra, 89 Cal.App.4th at
p. 1050 [party objectively manifested consent by signing “Work Authorization and
Contract” that clearly stated it was contract].) The Sanchezes’ contention there was no
mutual consent because they never intended and never agreed to partially release the
other defendants reflects nothing more than the Sanchezes’ subjective intent and
therefore is irrelevant. (Beard, supra, 110 Cal.App.4th at p. 1040.)
              The Sanchezes nonetheless contend the evidence objectively establishes the
lack of mutual consent because Newhope’s attorney failed to mention a partial release of
the other defendants in the e-mail sent to the Sanchezes’ attorney confirming the
settlement terms, and the Sanchezes’ attorney asked Newhope in a later e-mail to “add a
provision [to the Settlement Agreement] specifically stating th[e] agreement does not
inten[d] to release any of the other defendants.” 4 This contention fails for several
reasons.

       4      The Sanchezes also contend Newhope judicially admitted the settlement
did not include a partial release of the other defendants because the summary of the
settlement terms Newhope provided in its opposition to the Sanchezes’ motion to rescind
the settlement did not include the partial release. This omission in a trial court opposition
brief, however, is not a judicial admission. “Judicial admissions may be made in a
pleading, by stipulation during trial, or by response to request for admission. . . . [¶] Not
every document filed by a party constitutes a pleading from which a judicial admission
may be extracted.” (Myers v. Trendwest Resorts, Inc. (2009) 178 Cal.App.4th 735, 746.)
Motions and other related briefs are not pleadings to which the doctrine of judicial
admissions applies. (Id. at pp. 746-747.) Moreover, the summary to which the

                                             13
              First, e-mails the parties’ attorneys exchanged during the negotiation of the
Settlement Agreement cannot defeat the Sanchezes’ objective expression of consent
when both they and their attorney signed the Settlement Agreement. As explained above,
the test for determining mutual assent depends on whether the parties’ outward
manifestation or expression of consent would lead a reasonable person to believe the
parties reached an agreement. (Weddington, supra, 60 Cal.App.4th at p. 811; Rodriguez,
supra, 212 Cal.App.4th at p. 1027.) A signature on a written contract is an objective
manifestation of assent to the terms of the agreement. (Rodriguez, at p. 1027; Marin,
supra, 89 Cal.App.4th at p. 1049.)
              Second, the Settlement Agreement includes an integration clause, which
states the agreement contains the parties’ entire understanding and agreement and no
other representations “shall be deemed in any way to exist or bind any of the Parties
hereto.” That clause prevents the Sanchezes from varying the terms of the signed
Settlement Agreement based on e-mails exchanged during negotiations. (Civ. Code,
§ 1625 [“The execution of a contract in writing . . . supersedes all the negotiations or
stipulations concerning its matter which preceded or accompanied the execution of the
instrument”]; § 1856, subd. (a) [“Terms set forth in a writing intended by the parties as a
final expression of their agreement with respect to the terms included therein may not be
contradicted by evidence of a prior agreement or of a contemporaneous oral
agreement”].)5

Sanchezes point is just that, a summary. It does not purport to be an exhaustive statement
of every term of the settlement and does not prevent Newhope from arguing the partial
release included in the Settlement Agreement is an agreed-upon term of the settlement.
       5       Section 1856 creates an exception to the parol evidence rule that allows a
party to introduce extrinsic evidence that contradicts the terms of a written contract when
there is a claim of mistake, but that exception limits the extrinsic evidence to the mistake
issue only. (§ 1856, subd. (e) [“Where a mistake or imperfection of the writing is put in
issue by the pleadings, this section does not exclude evidence relevant to that issue”].) At
this point, we are considering only whether there was mutual consent and therefore these

                                             14
              Third, these two e-mails, if considered, do not demonstrate the trial court
erred in concluding the parties mutually consented to the limited release of the other
defendants. The declaration of the Sanchezes’ attorney filed in opposition to Newhope’s
section 664.6 motion concedes the e-mail from Newhope’s attorney confirmed “the basic
terms of the settlement”; it did not purport to set forth every term to the exclusion of
others. Newhope’s attorney also explained she conditioned the settlement on the court
finding the parties reached their agreement in good faith under section 877.6. The partial
release of the other defendants enhanced the odds of gaining the court’s approval because
the court may find the settlement is in good faith only if it falls within the “reasonable
range” of Newhope’s proportionate share of liability for the Sanchezes’ damages.
(Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 499.) The
court’s approval of the settlement would then have the legal effect of barring all claims
for equitable comparative contribution or partial or comparative indemnity by the other
defendants against Newhope. (§ 877.6, subd. (c).) Without the release of the other
defendants from liability for Newhope’s conduct, the court could find the settlement was
not in good faith because it allowed Newhope to transfer some of its liability to the other
defendants.
              Similarly, the e-mail by the Sanchezes’ attorney merely asked Newhope to
“add” a provision stating the parties do not intend to release any of the other defendants.
(Italics added.) The Sanchezes’ attorney never asked Newhope to delete the challenged
sentence from paragraph 3 even though it was in every draft of the Settlement
Agreement. Moreover, when Newhope’s attorney revised the Settlement Agreement to
comply with the request of the Sanchezes’ attorney, Newhope’s attorney specifically
explained she complied with the request by adding the requested language to paragraph 5

e-mails are irrelevant on this issue, but we may consider them when we address the
Sanchezes’ claim of mistake.

                                             15
of the Settlement Agreement. Newhope’s attorney never represented she made any
changes to paragraph 3.
              Accordingly, the signed Settlement Agreement itself and the exchanges
between the parties’ attorneys regarding the Settlement Agreement constitute substantial
evidence supporting the trial court’s determination the Sanchezes and Newhope mutually
consented to the terms of the Settlement Agreement, including the partial release of the
other defendants in paragraph 3. (See Bowers, supra, 206 Cal.App.4th at p. 733 [trial
court’s determination regarding existence of settlement and its terms reviewed under
substantial evidence standard].) We now consider whether the trial court erred in
concluding the Sanchezes’ claim of mistake did not vitiate their consent.

       2.     No Mistake of Fact Vitiated the Sanchezes’ Consent
              The Sanchezes contend their consent to the partial release of the other
defendants was based on either a mutual or unilateral mistake of fact regarding the partial
release. According to the Sanchezes, the attorney for Newhope who prepared the
Settlement Agreement mistakenly believed the partial release was a term to which the
parties had agreed during their negotiations, and the Sanchezes’ attorney mistakenly
believed the release of the other defendants had been removed from the final version of
the Settlement Agreement he instructed the Sanchezes to sign. Alternatively, the
Sanchezes contend their attorney’s mistaken belief the release of the other defendants had
been removed from the Settlement Agreement constituted a unilateral mistake of fact
vitiating their consent. Neither of these purported mistakes provides a proper ground for
avoiding the partial release in the signed Settlement Agreement.
              A mutual or unilateral mistake of fact may allow a party to rescind or
reform a contract because it vitiates a party’s consent to the contract or to a particular
term. (Civ. Code, § 1689, subd. (b)(1) [“A party to a contract may rescind the contract in
the following cases: [¶] (1) If the consent of the party rescinding, or of any party jointly

                                              16
contracting with him, was given by mistake . . .]; Civ. Code, § 3399 [“When, through
fraud or a mutual mistake of the parties, or a mistake of one party, which the other at the
time knew or suspected, a written contract does not truly express the intention of the
parties, it may be revised on the application of a party aggrieved, so as to express that
intention . . .”].) Because a mistake of fact vitiates a party’s consent (see Civ. Code,
§ 1567), it also may provide the basis for denying a section 664.6 motion or finding a
settlement does not include a particular term.
              “Mistake of fact is a mistake, not caused by the neglect of a legal duty on
the part of the person making the mistake, and consisting in: [¶] 1. An unconscious
ignorance or forgetfulness of a fact past or present, material to the contract . . . .”
(Civ. Code, § 1577.) This statutory definition prevents a party from avoiding a contract
or any of its terms based on a mistake of fact when the mistake was caused by the neglect
of a legal duty on the part of the party asserting the mistake. (Donovan v. RRL Corp.
(2001) 26 Cal.4th 261, 283; Stewart, supra, 134 Cal.App.4th at p. 1588.) Ordinary
negligence does not constitute neglect of a legal duty within the meaning of Civil Code
section 1577. (Ibid.)
              Failure to read a contract, however, does not constitute a mistake justifying
rescission or reformation: “‘It is well established, in the absence of fraud, overreaching
or excusable neglect, that one who signs an instrument may not avoid the impact of its
terms on the ground that he failed to read the instrument before signing it.’ [Citations.]”
(Stewart, supra, 134 Cal.App.4th at pp. 1588-1589; see C9 Ventures v. SVC-West, L.P.
(2012) 202 Cal.App.4th 1483, 1501 [“‘A party cannot avoid the terms of a contract on the
ground that he or she failed to read it before signing it’”]; Wal-Noon Corp. v. Hill (1975)
45 Cal.App.3d 605, 615[“Failure to make reasonable inquiry to ascertain or effort to
understand the meaning and content of the contract upon which one relies constitutes
neglect of a legal duty such as will preclude recovery for unilateral mistake of fact”].)

                                               17
              In Stewart, the plaintiff sought to rescind a settlement agreement he signed
based on a unilateral mistake of fact because he did not read or understand the document
and all of its terms. (Stewart, supra, 134 Cal.App.4th at pp. 1586-1587.) The Stewart
court rejected his challenge because the plaintiff caused the mistake by neglecting a legal
duty. (Id. at pp. 1588-1589.) The court explained, “Plaintiff has cited no California cases
(and we are aware of none) that stand for the extreme proposition that a party who fails to
read a contract but nonetheless objectively manifests his assent by signing it—absent
fraud or knowledge by the other contracting party of the alleged mistake—may later
rescind the agreement on the basis that he did not agree to its terms. To the contrary,
California authorities demonstrate that a contracting party is not entitled to relief from his
or her alleged unilateral mistake under such circumstances. [Citations.] Indeed, the
comments to the Restatement indicate that a party ordinarily may not obtain relief based
upon unilateral mistake where he or she has failed to read the contract before signing it.
[Citation.]” (Id. at p. 1589.)
              Here, the trial court found the mistake was caused by the Sanchezes’ (and
their attorney’s) failure to read the Settlement Agreement before signing it, and
substantial evidence supports the trial court’s finding. The Sanchezes’ legal attack on the
trial court’s conclusion therefore fails under Stewart.
              The original draft of the Settlement Agreement included the sentence in
paragraph 3 partially releasing the other defendants. After reviewing that draft, the
Sanchezes’ attorney asked Newhope to “add a provision” stating the parties did not
intend to release any of the other defendants. The Sanchezes’ attorney did not ask
Newhope to delete the partial release of the other defendants or otherwise revise
paragraph 3 in any way. Newhope responded to the request by adding to paragraph 5 the
language the Sanchezes’ attorney sought. That was a logical place for the addition
because paragraph was entitled “Intention of the Parties.” In the e-mail forwarding the
revised Settlement Agreement to the Sanchezes’ attorney, Newhope’s attorney

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specifically explained that she accommodated the request by adding the language to
paragraph 5. Two days after forwarding the revised Settlement Agreement, Newhope’s
attorney e-mailed the Sanchezes’ attorney to inquire whether any further changes to the
agreement were necessary. The Sanchezes’ attorney responded, “It seems OK.
However, I have to go through it with the clients.” The Sanchezes then signed the
Settlement Agreement without requesting any other changes.
              We acknowledge Stewart involved a unilateral mistake and the Sanchezes
assert both a unilateral and mutual mistake of fact. The neglect of a legal duty, however,
defeats any claim based on a unilateral or mutual mistake of fact. (Civ. Code, § 1577
[defining mistake of fact to exclude mistake caused by neglect of a legal duty without
differentiating between unilateral and mutual mistake]; see Balistreri v. Nevada Livestock
Production Credit Assn. (1989) 214 Cal.App.3d 635, 642-644 [analyzing legal duty
element in mutual mistake case].)
              Moreover, the Sanchezes fail to identify a true mutual mistake of fact. “A
‘mutual’ mistake is one made by both parties as to the same proposition. Because one or
the other may have been mistaken does not constitute mutuality of mistake; and does not
constitute ground for rescission for mutual mistake.” (Wood v. Metzenbaum (1951)
107 Cal.App.2d 727, 731; 14 Cal.Jur.3d (2014) Contracts, § 116; 1 Miller & Starr, Cal.
Real Estate (3d ed. 2013) § 1:117.) Here, the Sanchezes mistakenly believed the release
of the other defendants had been removed from the Settlement Agreement, but
Newhope’s attorney mistakenly believed the partial release of the other defendants was
an agreed-upon term and therefore was included in the Settlement Agreement. That
demonstrates not a mutual mistake, but two separate unilateral mistakes by different
parties. By finding the partial release was properly part of the Settlement Agreement, the
trial court impliedly found Newhope was not laboring under any mistake and the only

                                            19
purported mistake rested with the Sanchezes. The evidence described above supports
that finding.6
                 Throughout their briefs, the Sanchezes repeatedly contend their mistake in
signing the Settlement Agreement with the partial release was caused “[t]hrough [the]
trickery and deception” of Newhope’s attorney when she inserted the partial release in
the agreement despite the lack of any assent for that term, and then failed to remove it
upon the Sanchezes’ request. Consequently, the Sanchezes assert, their failure to read the
entire Settlement Agreement and discover the partial release remained in the final version
does not prevent them from abrogating that term based on a mistake of fact. The
Sanchezes stop short of accusing Newhope’s attorney of fraud, but they assert her
“unclean hands” prevent Newhope from enforcing the partial release against the
Sanchezes. The record does not support this contention.
                 The trial court did not make any express findings regarding the Sanchezes’
misconduct accusations against Newhope’s attorney, but it necessarily rejected them by
denying the Sanchezes’ motion and granting Newhope’s. As explained above, we must
presume the trial court’s ruling was correct and draw all inferences necessary to support
the trial court on matters as to which the record is silent. (Cahill, supra, 194 Cal.App.4th
at p. 956.) The record supports the implied finding that Newhope’s attorney did not
engage in any improper conduct and did not otherwise cause the Sanchezes’ mistake. As
more fully explained above, the record shows the partial release was in every version of
the Settlement Agreement and formed the basis for the court to later find a good faith
settlement under section 877.6. Newhope’s attorney made every change the Sanchezes’

       6       Even if we redefine the purported mutual mistake of fact to be a
misunderstanding over the scope of the release—the Sanchezes thought the agreed-upon
release was limited to Newhope only and Newhope thought the agreed-upon release
extended to the other defendants’ liability for Newhope’s conduct—the Sanchezes’
failure to read the Settlement Agreement constitutes the neglect of a legal duty that
prevents them from obtaining relief based on this purported mutual mistake of fact.

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attorney asked her to make to the Settlement Agreement, the Sanchezes’ attorney never
asked to remove the partial release in paragraph 3, and the Sanchezes never discovered
the partial release because they failed to read the entire agreement before signing it.
None of this suggests any misconduct by Newhope’s attorney.7
              Accordingly, we find substantial evidence supports the trial court’s finding
there was no mistake of fact that allowed the Sanchezes to avoid the partial release of the
other defendants, and we affirm the trial court’s decision granting Newhope’s
section 664.6 motion to enforce the Settlement Agreement against the Sanchezes.

                                             III
                                        DISPOSITION

              The judgment is affirmed. Newhope, Ress, and Gonzales shall recover
their costs on appeal.

                                                   ARONSON, ACTING P. J.

WE CONCUR:

FYBEL, J.

IKOLA, J.

       7      The Sanchezes’ attorney also contends Newhope’s attorney misled them
when she claimed to have made all of their requested changes in the copy of the
Settlement Agreement she gave them on the day of trial. Newhope’s attorney denies she
made any representation at all regarding the Settlement Agreement’s contents. The trial
court necessarily resolved this conflict in Newhope’s favor. Moreover, the statement
Newhope made all of the requested changes would not be a misrepresentation because
the Sanchezes never asked her to delete or revise paragraph 3 or the partial release.

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