Feb 23

Code of Civil Procedure Section 664.6 Amended to Streamline the Settlement Process: Effective January 1, 2021

Code of Civil Procedure Section 664.6 Amended to Streamline the Settlement Process: Effective January 1, 2021

Brian T. Gravdal, Esq.

Code of Civil Procedure §664.6 previously authorized a court, upon motion, to enter a judgment in pending litigation pursuant to the terms in a settlement agreement if the parties signed a document stipulating to settle outside of the presence of the court. While the statute allows for an expedited procedure to settle disputes outside of litigation (and, in fact, the statute was intended, in part, to encourage and facilitate settlement of disputes), it also created the potential for an unknowing or indolent attorney to find himself or herself in a difficult circumstance, i.e., in a writing signed only by counsel, the court would later deem the writing unenforceable because there was no signature from the involved party. In Levy v. Superior Court (1995) 10 Cal. 4th 578, for example, the California Supreme Court held that a court may not enter judgment under CCP §664.6 when the written stipulation to settle was signed by a litigant’s attorney, and not by the litigant personally. Now, Assembly Bill No. 2723 amends CCP §664.6, effective January 1, 2021, by allowing attorneys who represent a party to sign the writing on behalf of his or her client.
With this amendment, a writing is signed by a party if it is signed by any of the following: the party, an attorney who represents the party, and if a party is an insurer, an agent who is authorized in writing by the insurer to sign on the insurer’s behalf, except as specified. To provide needed protection for litigants, however, the amended statute also provides that an attorney who signs the writing on behalf of a party without express authorization to do so shall, absent good cause, be subject to professional discipline. The Senate Analysis nicely summarizes the intent of this amendment:

Principles of efficiency and economy promote the settlement of civil disputes by the parties, involving the court and expending its resources only where absolutely needed. This bill seeks to streamline the procedure provided for in Section 664.6 by explicitly granting the authority to stipulate to settlements to attorneys, on behalf of the parties they represent, and to agents of insurers, where the insurer is a party to the settlement.

The attorneys at Berman, Berman, Berman, Schneider & Lowary LLP will continue to monitor these developments and can address any questions you have regarding the above. They are uniquely qualified to provide additional insight and guidance.