In City of Gardena v. Rikuo Corporation, (— Cal.Rptr.3d —-, Cal.App. 2 Dist., February 7, 2011), a court of appeal considered whether a defendant could appeal two orders entered by a trial court that retained jurisdiction to determine costs after the parties settled an eminent domain action and an inverse condemnation action The court of appeal held that the two orders from which the defendant attempted to appeal were not appealable orders.
The City of Gardena (“City”) filed an eminent domain action against Rikuo Corporation (“Rikuo”). After mediation, City and Rikuo entered into a written settlement agreement that settled both the eminent domain action and a related inverse condemnation action. Pursuant to the parties’ stipulation, the trial court entered a “Judgment and Final Order of Condemnation” but the court retained jurisdiction to determine the costs of ongoing remediation. After the judgment was entered, the trial court issued two orders that released “to the City certain funds from the court-controlled deposit that was made under the judgment to cover the costs of remediation of the subject property.” Rikuo filed an appeal from the two orders. City contends that the two orders are not appealable orders.
The court of appeal held that the orders from which Rikuo was attempting to appeal were not appealable orders. The Code of Civil Procedure provides that “[a] reviewing court has jurisdiction over a direct appeal only when there is (1) an appealable order or (2) an appealable judgment.” The case before the court did not involve the appeal of a judgment, but in order for the two orders to be appealable under the statutory provisions, they “must have been issued following the entry of a judgment that itself is appealable.”
The judgment in this case, however, was entered pursuant to a settlement agreement between the parties and a stipulation for judgment based on that settlement agreement. “A stipulated or consent judgment is ‘a judgment entered by a court under the authority of, and in accordance with, the contractual agreement of the parties… intended to settle their dispute fully and finally.'” As a general rule, “a party may not appeal a consent judgment.”
There is an exception to the general rule that a party may not appeal a consent judgment but the court found the exception is not applicable to this case. The exception applies where “consent is merely given to facilitate an appeal following adverse determination of a critical issue.” The judgment for City’s claim against Rikuo stated that “it ‘resolves all claims and issues related to the taking of the Subject Property, including all claims and issues in the Inverse [Condemnation] Act as well as all claims and issues in this eminent domain action.'” The court concluded that “by consenting to the judgment, the parties manifested their intent to settle their dispute fully and finally.” City and Rikuo did not stipulate to the judgment merely to facilitate an appeal but instead stipulated to the judgment to resolve all claims and issues in both the eminent domain and inverse condemnation actions. As to the claims and issues that relate to remediation, “the parties stipulated, in effect, to a dispute resolution mechanism by which the trial court would make factual determinations that would resolve those issues.” The court found that the parties “consented to a final judgment that is not appealable as a matter of law.”
The court rejected Rikuo’s arguments that it could appeal from orders relating to the money deposited with the trial court and that it did not intend to settle the dispute fully and finally as evidenced by the fact the parties agreed that the trial court would retain jurisdiction over issues related to the cost of remediation. The court found the consent judgment expressly provided that it resolved all issues between the parties, including the way in which disputes over remediation would be resolved. The consent judgment was a final determination of the rights of the parties.
Additionally, the consent judgment expressly waived all rights of appeal. Pursuant to California law, a party is allowed to expressly waive his or her right to appeal from any judgment. However, parties are not allowed to “confer jurisdiction upon an appellate court by agreement when it otherwise does not exist.”
The court of appeal concluded that the orders from which Rikuo was attempting to appeal were not appealable orders. Accordingly, the court dismissed Rikuo’s appeal.
This case demonstrates the need to carefully review the language used in any settlement document. If the parties are entering into a stipulated or consent judgment for purposes of facilitating a prompt appeal, they should clearly state that point. Similarly, if the parties wish to allow for continuing supervision by the court, including a possible appeal, they should use express language. Absent clear language to the contrary, a court might find any right to appeal has been waived.
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