SUMMIT BRIDGE NATIONAL IVESTMENTS IV VS GENTLECARE TRANSPORT

Tentative Rulings

Case Number: EC065055    Hearing Date: September 04, 2020    Dept: E

MOTION TO ENFORCE SETTLEMENT

REQUEST TO ENTER STIPULATED JUDGMENT

[CCP §664.6]

Date: 9/4/20 (2:00 PM)

Case: Summit Bridge Nat’l Investments v. Gentlecare Transport (EC065055)

TENTATIVE RULING:

The hearing on (1) plaintiff Summit Bridge National Investments IV, LLC’s request for entry of stipulated judgment as to defendant Meguerditch Panossian and (2) defendant Panossian’s Motion to Enforce Settlement is CONTINUED to November 6, 2020, at 2:00 PM, in Department E.

Defendant’s motion seeks to enforce the Settlement Agreement between him and plaintiff Summit Bridge, which was entered into by these parties on October 24, 2018. Specifically, Panossian seeks a determination that his payment of $123,000 to plaintiff satisfied his obligations under the Settlement Agreement, thereby entitling him to dismissal of Summit Bridge’s action against him with prejudice. (See Shuck Decl. ¶ 7 & Ex. 3 [“Settlement Agreement”] at ¶ 9 [“Within ten (10) business days of Lender's acknowledgement of the satisfaction of all of the conditions set forth in this Agreement Lender shall dismiss the Litigation, with prejudice . . . “].)

Paragraph 2.1(b) of the Settlement Agreement provides that, within 18 months from the effective date of the settlement agreement, namely, by April 24, 2020, Panossian must pay to Summit Bridge $123,000, plus 50% of the net proceeds, if any, Panossian recovers from his cross-complaint in this action. Such combined payment obligation of $123,000 plus 50% of the net proceeds is capped at $448,000. It is undisputed Panossian has generated no proceeds from his cross-complaint. It is also undisputed that Panossian timely paid $123,000 on April 15, 2020. (Shuck Decl. ¶ 9 [confirming timely payment to plaintiff].) Panossian thus contends he has paid in accordance with paragraph 2.1(b), satisfied all his obligations under the Settlement Agreement, and is therefore entitled to dismissal of Summit Bridge’s complaint against him.

While acknowledging Panossian timely paid $123,000 in accordance with paragraph 2.1(b), Summit Bridge contends Panossian failed to meet all his obligations under the Settlement Agreement and relatedly seeks entry of a Stipulated Judgment against Panossian in the amount of $1,814,344.67, plus interests and attorney’s fees, pursuant to the Settlement Agreement’s default provision. (See Shuck Decl. Ex. 3 at ¶ 5 [providing for immediate entry of stipulated judgment “should [Panossian] default under the terms of this Agreement”; see also Shuck Decl. Ex. 3 at ¶ 3 [releasing Summit Bridge from agreement to accept an amount less than full payment of total indebtedness of $1,814,344.67 if Panossian “fail[s] to timely perform each and every condition, covenant and obligation set forth in this Agreement”].) The Settlement Agreement defines a default under the agreement as “[f]ailure to perform any covenant, condition or obligation (including, but not limited to, payment obligations) set forth in this Agreement.” (Shuck Decl. Ex. 3 at ¶ 7a.)

The outcome of the parties’ respective claims for relief turns on whether Panossian met his obligations with respect to litigating his cross-complaint for recovery in this action. Specifically, referring to Panossian as “Guarantor,” paragraph 2.1(b) of the Settlement Agreement provides: “Guarantor shall continue to prosecute Guarantor’s Cross-Complaint with due diligence and with dispatch . . . .” (Shuck Decl. Ex. 3 at ¶ 2.1(b).) Summit Bridge takes the position that it is the sole arbiter of whether Panossian has acted with due diligence and dispatch. Characterizing this perceived authority as its “mandatory concurrence” as to Panossian’s diligence (see Opp. at 3, 5), Summit Bridge misreads two provisions of paragraph 2.1(b) as conferring such.

First, immediately after the language requiring Panossian to act “with due diligence and with dispatch” is the caveat “unless and until Guarantor determines by an objective good faith standard, and with Lender’s concurrence, that continued prosecution of Guarantor’s Cross-Complaint would generate no more than a de minimus [sic] financial realization.” (Shuck Decl. Ex. 3 at ¶ 2.1(b).) That language merely provides that, if Panossian had wished to be relieved of his obligation to diligently pursue the cross-complaint, he needed Summit Bridge’s agreement that such prosecution would generate minimal financial gain at best. It says nothing about whether Summit Bridge’s concurrence is required for a determination of whether Panossian actually pursued his cross claims with diligence and dispatch. Second, paragraph 2.1(b) provides that Summit Bridge, in its “sole and absolute discretion,” may give Panossian an extension past March 1, 2020, to continue prosecuting the cross-complaint. (Shuck Decl. Ex. 3 at ¶ 2.1(b).) That provision, however, cannot reasonably be read as giving Summit Bridge the discretion (sole, absolute, or otherwise) to make the determination of whether Panossian has satisfied his obligation to pursue the cross-complaint with diligence and dispatch.

Thus, in addressing the parties’ competing claims for relief, the Court must ultimately determine whether Panossian acted “with due diligence and dispatch” in prosecuting his cross-complaint between October 24, 2018 (the effective date of the Settlement Agreement) and March 1, 2020 (the deadline for attempted recovery set forth in ¶ 2.1(b)). On this record, the Court cannot do so. Merely citing a list of occurrences and the fact that one of the cross-defendants (MedCoast Med Services Inc.) is in bankruptcy, Panossian makes the conclusory assertion that he “diligently prosecuted [his] Cross-Compliant from October 2018 through April 2020. (Reply at 8 [citing Acevedo Decl. ¶¶ 18-50].) Having staked out the position that it alone could decide the issue, Summit Bridge has submitted no evidence whatsoever concerning Panossian’s diligence or lack thereof.

Accordingly, the Court will hold an evidentiary hearing into whether Panossian prosecuted his cross-complaint with due diligence as required. Panossian and Summit Bridge may each simultaneously file and serve supplemental briefs not to exceed 10 pages, plus supporting declarations and evidence, by October 9, 2020. Any responses thereto (limited to 10 pages) shall be filed and served by no later than October 23, 2020. If the Court finds Panossian diligently prosecuted his Cross-Complaint, then Panossian is entitled to dismissal under paragraph 9 of the Settlement Agreement. If the Court finds that he did not, then Summit Bridge is entitled to entry of the stipulated judgment pursuant to paragraph 5 of the Settlement Agreement.