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Dominic J. Campisi (SBN 63326)
deampisi@elc-law.com
Andrew Zabronsky, (SBN 115339)
azabronsky@elc-law.com
Matthew P. Matiasevich (SBN 168209)
MMatiasevich@elc-law.com
EVANS, LATHAM & CAMPISI
One Post Street, Suite 600
San Francisco, CA 94104
Telephone: (415) 421-0288
Facsimile: (415) 421-0464
Attorneys for Miles Jeffrey Qvale
ELECTRONICALLY
FILED
Superior Court of California,
County of San Francisco
02/22/2019
Clerk of the Court
BY: ALISON AGBAY
Deputy Clerk
IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN FRANCISCO
In the Matter of the
Kathryn C. Qvale Exempt Trust,
dated January 31, 2006
Miles Jeffrey Qvale, individually and as trustee,
vs.
Bruce H. Qvale, Laura Hiura, and Does 1-10
)
Re
Case No. PTR-13-297016
[Consolidated with Case Nos, PTR-13-297017
and PTR-13-297143]
MEMORANDUM OF POINTS AND
AUTHORITIES IN SUPPORT OF
MOTION TO ENFORCE SETTLEMENT
AGREEMENT
[Code Civ. Proc. § 664.6]
Date: March 27, 2019
Time: 2:30 p.m.
Dept.: 204
Judge: Hon. John K. Stewart
Date Approved By: Jackie Alameda
Memorandum of Points and Authorities In
Support of Motion to Enforce Settlement Agreement
Case No. PTR-13-297016CoD wm NAH BHD
I INTRODUCTION
Miles Jeffery Qvale (“Jeff”) moves to enforce a court-approved settlement agreement under
Code of Civil Procedure section 664.6 (Section 664.6).
The settlement agreement between Jeff and his brother Bruce Hammond Qvale (“Bruce”)
provides, among other things, for (1) an exchange of the brothers’ interests in certain real properties
that they co-own, so as to separate their financial interests, and (2) an equalizing payment to be
paid by the brother who thereby obtains property of greater value, as determined by appraisals
obtained for such purpose. The parties obtained appraisals as provided in the settlement agreement
— and each formally acknowledged that the appraisals would be “binding” — but Bruce did not
like the results of the appraisals and has repudiated his obligation to use the appraisals to determine
the equalizing payment.
Accordingly, Jeff moves to enforce the settlement agreement and obtain a judgment
compelling Bruce to do what he promised, i.e., (1) to exchange the specified property interests with
Jeff; and (2) to use the property values determined by the appraisals in making an equalizing
payment to Jeff.
HI. FACTUAL AND PROCEDURAL BACKGROUND
A. The Court Approved The Settlement Agreement, Ordered Each
Party To Comply With Its Terms, and Retained Jurisdiction Over
Implementation.
The underlying case involved a complex series of disputes concerning the substantial trusts
established by Jeff and Bruce’s parents, On the eve of trial, and with the assistance of the Court’s
Commissioner Pro Tem Pang Ly, the parties resolved their disputes by entering into a settlement
agreement (the “Settlement Agreement”), (Exh. A.)! The Settlement Agreement provided for
court approval of the agreement and each of its terms, and that the Court would retain jurisdiction
to enforce the agreement under Section 664.6. (Exh. A, 34.) The parties jointly petitioned for
court approval of the Settlement Agreement, and by order dated May 12, 2015, the Court approved
V Unless otherwise specified, all exhibit references are to exhibits attached to the declaration
of Peter L. Muhs filed and served herewith.
Memorandum of Points and Authorities in Case No. PTR-13-297016
Support of Motion to Enforce Settlement Agreement
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the agreement and each of its terms, including the provisions regarding Section 664.6. (Exh. B at
p. 1:16-17.) The Court further directed each party to implement the Settlement Agreement in
accordance with its terms, and specifically retained jurisdiction “for all purposes necessary and
appropriate in the implementation of the Settlement Agreement.” (Exh. B at p. 1:25-26.)
A. The Settlement Agreement Allows Either Party to Trigger An
Exchange Of Real Properties And An “Equalizing Payment” To
Make Up For Any Difference In Value.
Through LLCs, Jeff and Bruce co-own three commercial properties, commonly known to
the parties as (1) “901 Van Ness,” a San Francisco property also known as the British Motor Cars
Dealership Building; (2) “the Dublin Property,” several parcels in Dublin used for auto dealerships;
and (3) “40 Gold Street,” a San Francisco office building. One of the goals of the Settlement
Agreement was to end their co-ownership by trading their interests in the commercial properties,
such that Bruce would own 901 Van Ness and Jeff would own the Dublin Property and 40 Gold
Street. (See, Exh. A, $7(b).)
To avoid the tax consequences of an immediate exchange of interests in the LLCs that then
owned the properties, the Settlement Agreement provides for a multistep process commonly known
as a “drop and swap.” Paragraph 7(a) provides for the then existing LLCs, which were partnerships
for income tax purposes, to distribute the properties to the brothers as co-owners, to be managed
pursuant to co-tenancy agreements. (Exh. A, §7(a).) Paragraph 7(b) provides for a holding period
of a minimum of a year, though the parties contemplated it would be longer to maximize the
chances that the drop and swap would be accepted by the IRS. Finally, Paragraph 7(b) further
provides for the exchange of the property interests:
(b) Transfers. At the election of either Jeff or Bruce, such election to occur
no earlier than one year after the Real and Tangible Personal Property Interests
have been distributed from the Co-Owned LLCs as discussed in Paragraph 7(a)
above, an exchange of their personally owned Real and Tangible Personal
Property Interests shall occur so that Jeff would trade his personally owned fee
title interests in 901 Van Ness, LLC and Qvale Solar Energy Company, LLC
properties to Bruce in return from Bruce’s personally owned fee title interests
In ae Properties, LLC and 40 Gold Street, LLC properties. (Exh. A,
7
).)
Memorandum of Points and Authorities In Case No. PTR-13-297016
Support of Motion to Enforce Settlement AgreementCem ND KH Bw NY EG
S
Given that this exchange was unlikely to provide each party with an equal benefit, the
Settlement Agreement also requires that the brother who receives property of greater value make an
“equalizing payment” to the other, to ensure fairness in the exchange. (Exh. A, 7(f).) To facilitate
the equalizing payment, the Settlement Agreement requires the parties to obtain appraisals, which
will set the value of the properties:
(d) Values. Promptly after delivery of an exchange election as described in
Paragraph 7(b), each property (in its entirety) shall be appraised and the current
fair market value thereby established by the appraiser(s), who shall be chosen
by Bruce and Jeff, as individuals. To the extent the appraiser uses an income
approach as part of the appraisal process to determine the fair market value for
the 901 Van Ness property, the appraiser shall consider the fair market rent
irrespective of the actual current lease amount. If Bruce and Jeff do not agree
on the appraiser(s) within 30 days after the delivery of the election, then the
Special Tax Trustee shall select the appraiser(s). (Exh. A, §7(d).)
B. The Parties Elected To Trigger The Exchange Of Real Properties
Under Paragraph 7 Of The Settlement Agreement And Agreed To
Go Forward With Appraisals From Bank Of The West.
Through counsel, the parties discussed the exchange of properties and triggered the
exchange of properties under paragraph 7(b) of the Settlement Agreement. (Muhs Decl., at q7.)
For the purpose of determining the equalizing payment required by paragraph 7(f), the
parties decided to use appraisals provided by Bank of the West (the “Bank”). (Muhs Decl., at q7.)
They knew that the Bank held a security interest in 901 Van Ness and the Dublin Property and
would thus want to reappraise those properties for itself given the change of ownership. And the
Settlement Agreement contemplated that one or more properties would be refinanced to provide
cash for the equalizing payment. (Exh. A, §7(f).) By using appraisals provided by the Bank, the
parties could kill two birds with one stone. (See Exh. D, 3/28/18 email to the Bank from Bruce’s
counsel.)
Insofar as the 901 Van Ness and Dublin Properties are collateral for Bank of
the West (BOW) loans, it is our understanding that, in connection with the
exchange of the properties, BOW will require appraisals due to the changes in
ownership, and that BOW may also have the 40 Gold St Property appraised.
Bruce and Jeff need to have the properties appraised as well, for purposes of
the exchange. It is our hope that we can work collaboratively ‘with BOW and
that, based on BOW’s list of pre-approved appraisers, BOW, Bruce and Jeff
can all benefit from the services of the same appraiser (s) (Exh. D, 3/28/18
email to the Bank from Bruce’s counsel [emphasis supplied].)
Memorandum of Points and Authorities In Case No. PTR-13-297016
Support of Motion to Enforce Settlement Agreement
4.The parties inquired about having the Bank suggest appraisers but were informed that for
regulatory reasons the Bank could not do so. (In the wake of the 2008 banking collapse, which was
triggered in part by lax lending practices, banking practices were tightened to avoid even the
appearance of collusion between borrower and lender.) The Bank said, however, that it was willing
to submit the requests to its own appraisal department, which would then place the work without
giving anyone advance notice of the identity of the appraisers. As the Bank explained, “[B]ased
upon this degree of independence, neutrality and lack of outside influence in our appraiser selection
process, it would appear that this would be an acceptable method for both your and our evaluation
needs.” (Exh. D, 3/28/18 email from the Bank to counsel [emphasis supplied].)
Jeff and Bruce adopted this approach and asked the Bank to have the properties appraised.
Indeed, Bruce took the lead and spearheaded those efforts. Through counsel, Bruce passed along
terms from the Settlement Agreement that the Bank’s appraisers would need to know in valuing
901 Van Ness for the purpose of the equalizing payment. (Exh. D, 4/4/18 email of 3:59 p.m. to the
Bank from Bruce’s counsel; see also, Exh. A, §7(d) [“To the extent the appraiser uses an income
approach as part of the appraisal process to determine the fair market value for the 901 Van Ness
property, the appraiser shall consider fair market rent irrespective of the actual current lease
amount”].) Bruce also arranged for the Bank to appraise 40 Gold Street even though the Bank had
no security interest in that property so that it could be used for future financing as well as to
provide a valuation for purposes of the Settlement Agreement. (Exh. D, 4/4/18 email of 7:08 a.m.
to the Bank from Bruce’s counsel [“We ask that [the Bank] proceed with the appraisals of the 901
Van Ness and Dublin properties, and that [the Bank] also have the 40 Gold St property
appraised.”].)
Cc. The Parties Confirmed That The Bank Appraisals Would Be
“Binding.”
To leave no doubt, the parties formally acknowledged and confirmed that they would be
bound by the Bank appraisals. Through counsel, Bruce communicated that he would accept the
Bank appraisals as “binding,” and Jeff did the same. (Muhs Decl., at 13; Exh. E, 5/31/18 email
Memorandum of Points and Authorities In Case No, PTR-13-297016
Support of Motion to Enforce Settlement Agreement
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[“Bruce is prepared to accept, as binding, the appraisals of the Van Ness, Gold St and Dublin
properties that are now underway. In regard to the appraisal firms (CBRE, BBG and Smith &
Associates), Bruce or his affiliated companies have prior experience working with CBRE, but not
with BBG or Smith & Associates. Bruce or his affiliated companies have prior experience with
Integra, which may be a predecessor to or an affiliate of BBG. Please advise whether Jeff similarly
will commit to accept the appraisals as binding”); Exh. E, 6/14/18 email [“Jeff has advised me that
he will also accept the 901 Van Ness appraisal for purposes of the exchanges .... Thus, both Bruce
and Jeff have now agreed to this use of all three appraisals” ].)
Having confirmed that the Bank appraisals were binding, Bruce’s counsel then followed up
with the Bank about the status of the appraisals, confirmed their availability, and authorized the
Bank to disclose them. (Exh. F.)
D. The Appraisals Show That Bruce Owes A Substantial Equalizing
Payment To Jeff, And Bruce Has Now Reneged On His Obligation.
The Bank provided the requested appraisals to Jeff and Bruce on June 22, 2018, and those
appraisals show a fair market value of $42 million for 901 Van Ness, $14.7 million for the Dublin
Property, and $16.84 million for 40 Gold Street. (Exhs. G, H and I.) Since Jeff would be giving up
his interest in the most valuable property by far (i.e., 901 Van Ness), he would receive an
equalizing payment from Bruce.
Although Bruce expressed no immediate disagreement with the appraisals, on November
28, 2018 (158 days after having received the appraisals), his counsel communicated that Bruce
would not accept the Bank’s supposedly “questionable” appraisals for 901 Van Ness and the
Dublin Property. (Exh. J.)
To date, the property interests have not been exchanged under paragraph 7(b) of the
Settlement Agreement, and Jeff has not received the equalizing payment under paragraph 7(f).
Accordingly, to bring this matter to a close, Jeff moves to enforce the Settlement Agreement under
Code of Civil Procedure section 664.6 and obtain a judgment in accordance with its terms.
Memorandum of Points and Authorities In Case No. PTR-13-297016
Support of Motion to Enforce Settlement Agreement
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HT. THE COURT SHOULD ENFORCE THE SETTLEMENT AGREEMENT AND
ENTER JUDGMENT UNDER CODE OF CIVIL PROCEDURE SECTION 664.6.
Code of Civil Procedure section 664.6 provides a summary procedure for the specific
enforcement of a settlement agreement without the need of a second lawsuit. (Kirby v. Southern
Cal. Edison Co. (2000) 78 Cal.App.4th 840, 843.) This provision expressly states that the court
may enter judgment on the terms set forth in the settlement agreement.
If parties to pending litigation stipulate, in a writing signed by the parties
outside the presence of the court or orally before the court, for settlement of the
case, or part thereof, the court, upon motion, may enter judgment pursuant to
the terms of the settlement. If requested by the parties, the court may retain
jurisdiction over the parties to enforce the settlement until performance in full
of the terms of the settlement. (Code Civ. Proc. § 664.6.)
Proving entitlement under section 664.6 is thus a straightforward endeavor. The moving
party need only show that he has an agreement signed by the parties; that this court retained
jurisdiction; and that the terms of the agreement provide for the relief he is asking for. (Code Civ.
Proc. § 664.6.) In the matter at bar, the court should find that Jeff easily satisfies these
requirements and that his motion should therefore be granted.
To begin with, the parties have a binding agreement. (Exh. A.) Indeed, there is a court
order confirming its validity and directing the parties to comply with its terms. (Exh. B.)
Furthermore, this court retained jurisdiction. The Settlement Agreement expressly states
that the court retains jurisdiction for the purpose of enforcing the terms of this agreement under
Code of Civil Procedure section 664.6 (Exh. A, 934), and the court so ordered (Exh. B at p. 1:25-
26).
Finally, the terms of the Settlement Agreement provide for the relief that Jeff is requesting.
The Settlement Agreement expressly provides for the exchange of property interests and the
equalizing payment. (Exh. A at 7(b) and 7(f).) Now that the parties have completed the appraisal
process, they are in a position to effectuate paragraphs 7(b) and 7(f), and hence the court should
enter judgment accordingly.
Memorandum of Points and Authorities In Case No. PTR-13-297016
Support of Motion to Enforce Settlement Agreement
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Bruce’s carping about the appraisals is irrelevant because paragraph 7(d) of the Settlement
Agreement does not require that Bruce like the appraisals, only that the “market value” of the
properties “be appraised,” which occurred. (Exhs. G, H, and I.) Bruce’s complaints about the
appraisals are particularly hollow considering that he specifically confirmed that they would be
“binding,” thus acknowledging compliance with the Settlement Agreement. (Muhs Decl., at 413;
Exh. E, 5/31/18 email.) From the Court’s perspective, therefore, Bruce’s feigned complaints about
the appraisals are a non-issue.? The parties complied with the appraisal requirement of paragraph
7(d) and are now in a position to go forward with the exchange under paragraph 7(b) and the
equalizing payment under paragraph 7(f).
It is well established that a party can use section 664.6 to enforce a settlement agreement
pertaining to real property, even if that enforcement requires a transfer of the property and related
relief. (See, e.g., Malouf Bros. v. Dixon (1991) 230 Cal.App.3d 280 [affirming grant of motion
under section 664.6 that compelled the defendant to convey real property to the plaintiff]; Osumi v.
Sutton (2007) 151 Cal.App.4th 1355 [affirming grant of motion under section 664.6 that compelled
a party to execute a purchase agreement for real property].) Here, the court’s judgment will
effectuate the exchange under paragraph 7(b) by directing that the parties carry out those transfers
of real property, and it will effectuate the equalizing payment under paragraph 7(f) by compelling
Bruce to make that payment based on the property values established by the Bank appraisals. Jeff
2 Bruce’s appraisal-related objections are immaterial in this procedural context, since parties
obtained the appraisals and the court is simply enforcing the Settlement Agreement. But one notes
that his arguments are also invalid on their face. Having blessed the appraisal process and waited
to see what would happen, he now complains about matters that are both trivial and incorrect. He
wants 901 Van Ness to be valued on an appraisal that he unilaterally obtained for “estate-planning
purposes” (Exh. J, 11/27/18 email), which is exactly what the Settlement Agreement forbids in
requiring that the parties act together in the appraisal process (Exh. A at 7(d)). He wants 901 Van
Ness to be valued in accordance with an offer that he supposedly received for a separate parcel at
999 Van Ness (Exh. J, 11/27/18 email), which is not how the appraisal process works at all. And
he complains that the appraisals of 901 Van Ness and the Dublin Property were used for loan
underwriting (Exh. J, 11/27/18 email), which is inconsequential because he knew in advance that
the Bank was acting for that purpose and consented to it (Exh. D, 3/28/18 email to the Bank from
Bruce’s counsel; Muhs Decl., at 7) and because it makes no difference for the appraisals
themselves. The appraisers for 901 Van Ness and the Dublin Property both confirmed that they
were opining on market value, which is what the Settlement Agreement requires. (Exh. G at p. lof
the enclosure letter and p. 7 of the appraisal; Exh. H at p. 1 of the enclosure letter and p. 5 of the
appraisal.)
Memorandum of Points and Authorities In Case No. PTR-13-297016
Support of Motion to Enforce Settlement Agreementom ND HW Bw Ww
is entitled to the equalizing payment under the Settlement Agreement, and the court should ensure
that he gets it.
TV. CONCLUSION
The Settlement Agreement is binding and expressly provides for the relief sought by Jeff,
and thus the court should enforce it without hesitation. Public policy favors settlement and thus
favors the enforcement of a binding agreement, and indeed this court has already entered an order
approving the agreement and directing each party to comply with its terms. For the reasons set
forth above, the motion should be granted.
Dated: February22-2019 EV ATHAM(8) CAMPISI
Memorandum of Points and Authorities In Case No. PTR-13-297016
Support of Motion to Enforce Settlement Agreement
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Dominic J. Campisi (SBN 63326) deampisi@elc-law.com Andrew Zabronsky, (SBN 115339) azabronsky@elc-law.com Matthew P. Matiasevich (SBN 168209) MMatiasevich@elc-law.com EVANS, LATHAM & CAMPISI One Post Street, Suite 600 San Francisco, CA 94104 Telephone: (415) 421-0288 Facsimile: (415) 421-0464 Attorneys for Miles Jeffrey Qvale ELECTRONICALLY FILED Superior Court of California, County of San Francisco 02/22/2019 Clerk of the Court BY: ALISON AGBAY Deputy Clerk IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN FRANCISCO In the Matter of the Kathryn C. Qvale Exempt Trust, dated January 31, 2006 Miles Jeffrey Qvale, individually and as trustee, vs. Bruce H. Qvale, Laura Hiura, and Does 1-10 ) Re Case No. PTR-13-297016 [Consolidated with Case Nos, PTR-13-297017 and PTR-13-297143] MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO ENFORCE SETTLEMENT AGREEMENT [Code Civ. Proc. § 664.6] Date: March 27, 2019 Time: 2:30 p.m. Dept.: 204 Judge: Hon. John K. Stewart Date Approved By: Jackie Alameda Memorandum of Points and Authorities In Support of Motion to Enforce Settlement Agreement Case No. PTR-13-297016CoD wm NAH BHD I INTRODUCTION Miles Jeffery Qvale (“Jeff”) moves to enforce a court-approved settlement agreement under Code of Civil Procedure section 664.6 (Section 664.6). The settlement agreement between Jeff and his brother Bruce Hammond Qvale (“Bruce”) provides, among other things, for (1) an exchange of the brothers’ interests in certain real properties that they co-own, so as to separate their financial interests, and (2) an equalizing payment to be paid by the brother who thereby obtains property of greater value, as determined by appraisals obtained for such purpose. The parties obtained appraisals as provided in the settlement agreement — and each formally acknowledged that the appraisals would be “binding” — but Bruce did not like the results of the appraisals and has repudiated his obligation to use the appraisals to determine the equalizing payment. Accordingly, Jeff moves to enforce the settlement agreement and obtain a judgment compelling Bruce to do what he promised, i.e., (1) to exchange the specified property interests with Jeff; and (2) to use the property values determined by the appraisals in making an equalizing payment to Jeff. HI. FACTUAL AND PROCEDURAL BACKGROUND A. The Court Approved The Settlement Agreement, Ordered Each Party To Comply With Its Terms, and Retained Jurisdiction Over Implementation. The underlying case involved a complex series of disputes concerning the substantial trusts established by Jeff and Bruce’s parents, On the eve of trial, and with the assistance of the Court’s Commissioner Pro Tem Pang Ly, the parties resolved their disputes by entering into a settlement agreement (the “Settlement Agreement”), (Exh. A.)! The Settlement Agreement provided for court approval of the agreement and each of its terms, and that the Court would retain jurisdiction to enforce the agreement under Section 664.6. (Exh. A, 34.) The parties jointly petitioned for court approval of the Settlement Agreement, and by order dated May 12, 2015, the Court approved V Unless otherwise specified, all exhibit references are to exhibits attached to the declaration of Peter L. Muhs filed and served herewith. Memorandum of Points and Authorities in Case No. PTR-13-297016 Support of Motion to Enforce Settlement Agreement aom YN DAH Bw NY NN YY YN NY NY NY Be Be eB Be ee em Be KL eN DA FY NH = SOHwHe AAA ROH AS the agreement and each of its terms, including the provisions regarding Section 664.6. (Exh. B at p. 1:16-17.) The Court further directed each party to implement the Settlement Agreement in accordance with its terms, and specifically retained jurisdiction “for all purposes necessary and appropriate in the implementation of the Settlement Agreement.” (Exh. B at p. 1:25-26.) A. The Settlement Agreement Allows Either Party to Trigger An Exchange Of Real Properties And An “Equalizing Payment” To Make Up For Any Difference In Value. Through LLCs, Jeff and Bruce co-own three commercial properties, commonly known to the parties as (1) “901 Van Ness,” a San Francisco property also known as the British Motor Cars Dealership Building; (2) “the Dublin Property,” several parcels in Dublin used for auto dealerships; and (3) “40 Gold Street,” a San Francisco office building. One of the goals of the Settlement Agreement was to end their co-ownership by trading their interests in the commercial properties, such that Bruce would own 901 Van Ness and Jeff would own the Dublin Property and 40 Gold Street. (See, Exh. A, $7(b).) To avoid the tax consequences of an immediate exchange of interests in the LLCs that then owned the properties, the Settlement Agreement provides for a multistep process commonly known as a “drop and swap.” Paragraph 7(a) provides for the then existing LLCs, which were partnerships for income tax purposes, to distribute the properties to the brothers as co-owners, to be managed pursuant to co-tenancy agreements. (Exh. A, §7(a).) Paragraph 7(b) provides for a holding period of a minimum of a year, though the parties contemplated it would be longer to maximize the chances that the drop and swap would be accepted by the IRS. Finally, Paragraph 7(b) further provides for the exchange of the property interests: (b) Transfers. At the election of either Jeff or Bruce, such election to occur no earlier than one year after the Real and Tangible Personal Property Interests have been distributed from the Co-Owned LLCs as discussed in Paragraph 7(a) above, an exchange of their personally owned Real and Tangible Personal Property Interests shall occur so that Jeff would trade his personally owned fee title interests in 901 Van Ness, LLC and Qvale Solar Energy Company, LLC properties to Bruce in return from Bruce’s personally owned fee title interests In ae Properties, LLC and 40 Gold Street, LLC properties. (Exh. A, 7 ).) Memorandum of Points and Authorities In Case No. PTR-13-297016 Support of Motion to Enforce Settlement AgreementCem ND KH Bw NY EG S Given that this exchange was unlikely to provide each party with an equal benefit, the Settlement Agreement also requires that the brother who receives property of greater value make an “equalizing payment” to the other, to ensure fairness in the exchange. (Exh. A, 7(f).) To facilitate the equalizing payment, the Settlement Agreement requires the parties to obtain appraisals, which will set the value of the properties: (d) Values. Promptly after delivery of an exchange election as described in Paragraph 7(b), each property (in its entirety) shall be appraised and the current fair market value thereby established by the appraiser(s), who shall be chosen by Bruce and Jeff, as individuals. To the extent the appraiser uses an income approach as part of the appraisal process to determine the fair market value for the 901 Van Ness property, the appraiser shall consider the fair market rent irrespective of the actual current lease amount. If Bruce and Jeff do not agree on the appraiser(s) within 30 days after the delivery of the election, then the Special Tax Trustee shall select the appraiser(s). (Exh. A, §7(d).) B. The Parties Elected To Trigger The Exchange Of Real Properties Under Paragraph 7 Of The Settlement Agreement And Agreed To Go Forward With Appraisals From Bank Of The West. Through counsel, the parties discussed the exchange of properties and triggered the exchange of properties under paragraph 7(b) of the Settlement Agreement. (Muhs Decl., at q7.) For the purpose of determining the equalizing payment required by paragraph 7(f), the parties decided to use appraisals provided by Bank of the West (the “Bank”). (Muhs Decl., at q7.) They knew that the Bank held a security interest in 901 Van Ness and the Dublin Property and would thus want to reappraise those properties for itself given the change of ownership. And the Settlement Agreement contemplated that one or more properties would be refinanced to provide cash for the equalizing payment. (Exh. A, §7(f).) By using appraisals provided by the Bank, the parties could kill two birds with one stone. (See Exh. D, 3/28/18 email to the Bank from Bruce’s counsel.) Insofar as the 901 Van Ness and Dublin Properties are collateral for Bank of the West (BOW) loans, it is our understanding that, in connection with the exchange of the properties, BOW will require appraisals due to the changes in ownership, and that BOW may also have the 40 Gold St Property appraised. Bruce and Jeff need to have the properties appraised as well, for purposes of the exchange. It is our hope that we can work collaboratively ‘with BOW and that, based on BOW’s list of pre-approved appraisers, BOW, Bruce and Jeff can all benefit from the services of the same appraiser (s) (Exh. D, 3/28/18 email to the Bank from Bruce’s counsel [emphasis supplied].) Memorandum of Points and Authorities In Case No. PTR-13-297016 Support of Motion to Enforce Settlement Agreement 4.The parties inquired about having the Bank suggest appraisers but were informed that for regulatory reasons the Bank could not do so. (In the wake of the 2008 banking collapse, which was triggered in part by lax lending practices, banking practices were tightened to avoid even the appearance of collusion between borrower and lender.) The Bank said, however, that it was willing to submit the requests to its own appraisal department, which would then place the work without giving anyone advance notice of the identity of the appraisers. As the Bank explained, “[B]ased upon this degree of independence, neutrality and lack of outside influence in our appraiser selection process, it would appear that this would be an acceptable method for both your and our evaluation needs.” (Exh. D, 3/28/18 email from the Bank to counsel [emphasis supplied].) Jeff and Bruce adopted this approach and asked the Bank to have the properties appraised. Indeed, Bruce took the lead and spearheaded those efforts. Through counsel, Bruce passed along terms from the Settlement Agreement that the Bank’s appraisers would need to know in valuing 901 Van Ness for the purpose of the equalizing payment. (Exh. D, 4/4/18 email of 3:59 p.m. to the Bank from Bruce’s counsel; see also, Exh. A, §7(d) [“To the extent the appraiser uses an income approach as part of the appraisal process to determine the fair market value for the 901 Van Ness property, the appraiser shall consider fair market rent irrespective of the actual current lease amount”].) Bruce also arranged for the Bank to appraise 40 Gold Street even though the Bank had no security interest in that property so that it could be used for future financing as well as to provide a valuation for purposes of the Settlement Agreement. (Exh. D, 4/4/18 email of 7:08 a.m. to the Bank from Bruce’s counsel [“We ask that [the Bank] proceed with the appraisals of the 901 Van Ness and Dublin properties, and that [the Bank] also have the 40 Gold St property appraised.”].) Cc. The Parties Confirmed That The Bank Appraisals Would Be “Binding.” To leave no doubt, the parties formally acknowledged and confirmed that they would be bound by the Bank appraisals. Through counsel, Bruce communicated that he would accept the Bank appraisals as “binding,” and Jeff did the same. (Muhs Decl., at 13; Exh. E, 5/31/18 email Memorandum of Points and Authorities In Case No, PTR-13-297016 Support of Motion to Enforce Settlement Agreement 5.CO NDA BR wD Be NY NY NY NN NN Ne Bee Be ew ee De ED on aA uw FB NHN =F Soe ARI AA ROH AS [“Bruce is prepared to accept, as binding, the appraisals of the Van Ness, Gold St and Dublin properties that are now underway. In regard to the appraisal firms (CBRE, BBG and Smith & Associates), Bruce or his affiliated companies have prior experience working with CBRE, but not with BBG or Smith & Associates. Bruce or his affiliated companies have prior experience with Integra, which may be a predecessor to or an affiliate of BBG. Please advise whether Jeff similarly will commit to accept the appraisals as binding”); Exh. E, 6/14/18 email [“Jeff has advised me that he will also accept the 901 Van Ness appraisal for purposes of the exchanges .... Thus, both Bruce and Jeff have now agreed to this use of all three appraisals” ].) Having confirmed that the Bank appraisals were binding, Bruce’s counsel then followed up with the Bank about the status of the appraisals, confirmed their availability, and authorized the Bank to disclose them. (Exh. F.) D. The Appraisals Show That Bruce Owes A Substantial Equalizing Payment To Jeff, And Bruce Has Now Reneged On His Obligation. The Bank provided the requested appraisals to Jeff and Bruce on June 22, 2018, and those appraisals show a fair market value of $42 million for 901 Van Ness, $14.7 million for the Dublin Property, and $16.84 million for 40 Gold Street. (Exhs. G, H and I.) Since Jeff would be giving up his interest in the most valuable property by far (i.e., 901 Van Ness), he would receive an equalizing payment from Bruce. Although Bruce expressed no immediate disagreement with the appraisals, on November 28, 2018 (158 days after having received the appraisals), his counsel communicated that Bruce would not accept the Bank’s supposedly “questionable” appraisals for 901 Van Ness and the Dublin Property. (Exh. J.) To date, the property interests have not been exchanged under paragraph 7(b) of the Settlement Agreement, and Jeff has not received the equalizing payment under paragraph 7(f). Accordingly, to bring this matter to a close, Jeff moves to enforce the Settlement Agreement under Code of Civil Procedure section 664.6 and obtain a judgment in accordance with its terms. Memorandum of Points and Authorities In Case No. PTR-13-297016 Support of Motion to Enforce Settlement Agreement -6-Coe DAH RB wD 10 HT. THE COURT SHOULD ENFORCE THE SETTLEMENT AGREEMENT AND ENTER JUDGMENT UNDER CODE OF CIVIL PROCEDURE SECTION 664.6. Code of Civil Procedure section 664.6 provides a summary procedure for the specific enforcement of a settlement agreement without the need of a second lawsuit. (Kirby v. Southern Cal. Edison Co. (2000) 78 Cal.App.4th 840, 843.) This provision expressly states that the court may enter judgment on the terms set forth in the settlement agreement. If parties to pending litigation stipulate, in a writing signed by the parties outside the presence of the court or orally before the court, for settlement of the case, or part thereof, the court, upon motion, may enter judgment pursuant to the terms of the settlement. If requested by the parties, the court may retain jurisdiction over the parties to enforce the settlement until performance in full of the terms of the settlement. (Code Civ. Proc. § 664.6.) Proving entitlement under section 664.6 is thus a straightforward endeavor. The moving party need only show that he has an agreement signed by the parties; that this court retained jurisdiction; and that the terms of the agreement provide for the relief he is asking for. (Code Civ. Proc. § 664.6.) In the matter at bar, the court should find that Jeff easily satisfies these requirements and that his motion should therefore be granted. To begin with, the parties have a binding agreement. (Exh. A.) Indeed, there is a court order confirming its validity and directing the parties to comply with its terms. (Exh. B.) Furthermore, this court retained jurisdiction. The Settlement Agreement expressly states that the court retains jurisdiction for the purpose of enforcing the terms of this agreement under Code of Civil Procedure section 664.6 (Exh. A, 934), and the court so ordered (Exh. B at p. 1:25- 26). Finally, the terms of the Settlement Agreement provide for the relief that Jeff is requesting. The Settlement Agreement expressly provides for the exchange of property interests and the equalizing payment. (Exh. A at 7(b) and 7(f).) Now that the parties have completed the appraisal process, they are in a position to effectuate paragraphs 7(b) and 7(f), and hence the court should enter judgment accordingly. Memorandum of Points and Authorities In Case No. PTR-13-297016 Support of Motion to Enforce Settlement Agreement 1Com ND HW BF YW NY Ye NY oN YN NY NY RN NY Be Be ee ewe ew em eB iL CoN DA A KF YN =F SK we A DAA REDANH BS Bruce’s carping about the appraisals is irrelevant because paragraph 7(d) of the Settlement Agreement does not require that Bruce like the appraisals, only that the “market value” of the properties “be appraised,” which occurred. (Exhs. G, H, and I.) Bruce’s complaints about the appraisals are particularly hollow considering that he specifically confirmed that they would be “binding,” thus acknowledging compliance with the Settlement Agreement. (Muhs Decl., at 413; Exh. E, 5/31/18 email.) From the Court’s perspective, therefore, Bruce’s feigned complaints about the appraisals are a non-issue.? The parties complied with the appraisal requirement of paragraph 7(d) and are now in a position to go forward with the exchange under paragraph 7(b) and the equalizing payment under paragraph 7(f). It is well established that a party can use section 664.6 to enforce a settlement agreement pertaining to real property, even if that enforcement requires a transfer of the property and related relief. (See, e.g., Malouf Bros. v. Dixon (1991) 230 Cal.App.3d 280 [affirming grant of motion under section 664.6 that compelled the defendant to convey real property to the plaintiff]; Osumi v. Sutton (2007) 151 Cal.App.4th 1355 [affirming grant of motion under section 664.6 that compelled a party to execute a purchase agreement for real property].) Here, the court’s judgment will effectuate the exchange under paragraph 7(b) by directing that the parties carry out those transfers of real property, and it will effectuate the equalizing payment under paragraph 7(f) by compelling Bruce to make that payment based on the property values established by the Bank appraisals. Jeff 2 Bruce’s appraisal-related objections are immaterial in this procedural context, since parties obtained the appraisals and the court is simply enforcing the Settlement Agreement. But one notes that his arguments are also invalid on their face. Having blessed the appraisal process and waited to see what would happen, he now complains about matters that are both trivial and incorrect. He wants 901 Van Ness to be valued on an appraisal that he unilaterally obtained for “estate-planning purposes” (Exh. J, 11/27/18 email), which is exactly what the Settlement Agreement forbids in requiring that the parties act together in the appraisal process (Exh. A at 7(d)). He wants 901 Van Ness to be valued in accordance with an offer that he supposedly received for a separate parcel at 999 Van Ness (Exh. J, 11/27/18 email), which is not how the appraisal process works at all. And he complains that the appraisals of 901 Van Ness and the Dublin Property were used for loan underwriting (Exh. J, 11/27/18 email), which is inconsequential because he knew in advance that the Bank was acting for that purpose and consented to it (Exh. D, 3/28/18 email to the Bank from Bruce’s counsel; Muhs Decl., at 7) and because it makes no difference for the appraisals themselves. The appraisers for 901 Van Ness and the Dublin Property both confirmed that they were opining on market value, which is what the Settlement Agreement requires. (Exh. G at p. lof the enclosure letter and p. 7 of the appraisal; Exh. H at p. 1 of the enclosure letter and p. 5 of the appraisal.) Memorandum of Points and Authorities In Case No. PTR-13-297016 Support of Motion to Enforce Settlement Agreementom ND HW Bw Ww is entitled to the equalizing payment under the Settlement Agreement, and the court should ensure that he gets it. TV. CONCLUSION The Settlement Agreement is binding and expressly provides for the relief sought by Jeff, and thus the court should enforce it without hesitation. Public policy favors settlement and thus favors the enforcement of a binding agreement, and indeed this court has already entered an order approving the agreement and directing each party to comply with its terms. For the reasons set forth above, the motion should be granted. Dated: February22-2019 EV ATHAM(8) CAMPISI Memorandum of Points and Authorities In Case No. PTR-13-297016 Support of Motion to Enforce Settlement Agreement