1240 E. Valley Rd LLC et al vs Andy Goldman et al

Plaintiff's counsel, Mr. Curtis, presented responsive arguments. Mr. Becker provided further argument. After hearing from both lawyers, the Court deemed the matter submitted. The Court ordered as follows: The Court affirms and stands by the judgment as prepared. The Court further indicated it is considering the imposition of bad faith sanctions against Defendants and their counsel, Mr. Becker. Plaintiff's counsel, Mr. Curtis, was ordered to file and serve an attorney's fees declaration for fees incurred from the date the settlement was reached to present, and a declaration supporting the basis for sanctions, on or before April 17, 2026.

Defendants' response shall be filed and served on or before April 27, 2026. Any reply shall be filed and served on or before May 18, 2026. The Court set an Order to Show Cause re: Sanctions against Defendants and their counsel for May 13, 2026, at 10:00 a.m. Plaintiff's opening brief filed 4/17/26; 10 pages; summarized: At the Court's invitation, Plaintiffs 1240 E. Valley Rd., LLC and Richard Wax (together, "Plaintiffs") submitted a brief seeking sanctions for the conduct of counsel for Defendants Andy Goldman and Jan Goldman (together, "Defendants") and Defendants' counsel, Bart Becker.

Given the bad faith conduct of Defendants' counsel post-verdict and post-settlement (on the record under Code of Civ. Proc., Sec. 664.6), sanctions are warranted. As this Court is aware, at around 10:55 a.m. on Friday, March 6, 2026, the jury in the above-captioned matter returned a verdict totaling $1,250,000 in favor of Plaintiffs and against Defendants on three separate counts: Nuisance, Trespass, and Negligence. In addition, the jury voted 9-3 in favor of awarding punitive damages against the Defendants.

Shortly after the verdicts were read, the Court held a sidebar in which (1) the Court indicated that we were going to start the Punitive Damages Phase immediately and (2) Mr. Curtis was given an envelope containing Defendants' CPA's opinion on Defendants' net worth. At that sidebar, the Court did two other things: (1) he asked Mr. Curtis "Would you like to make an offer?" and (2) stated that the Court didn't "think the [punitive damages] should be large." (See Reporters Transcript of Hearing Dated March 6, 2026 at 12:4-16, attached to the Declaration of Robert A.

Curtis ("Curtis Decl.") as Exh. A.) Mr. Becker then asked for a short break to prepare for his opening statement for the Punitive Damages Phase, which was granted. One other important factor to consider was that Plaintiffs had beaten their pre-trial Code Civ. Proc., Sec. 998 offer to the Defendants. As a result, Plaintiffs were going to recover substantial costs including expert costs. (Curtis Decl., P.P. 3-4.) Nevertheless, during the break, counsel for Plaintiffs took the Court at its word and spent the break convincing his client to offer $1,600,000 for a full and complete settlement of the case with waiver of all appeal rights. (Curtis Decl., P. 5.)

Plaintiffs' counsel felt this was an extremely fair offer given the verdict while having beaten the 998 offer and with punitive damages looming over the Defendants. (Curtis Decl., P. 6.) Consequently, Mr. Curtis verbally conveyed the offer of "$1,600,000 for a full and complete settlement of the case with waiver of all appeal rights" to Defendants' counsel, Mr. Becker, in the hallway outside the Courtroom over the break. (Curtis Decl., P. 2 7.) Mr. Curtis also indicated that this offer expired the moment Mr.

Curtis began his Punitive Damages Phase opening statement. (Ibid.) After approximately 25 minutes, Mr. Becker reported to Mr. Curtis "we have a deal." (Curtis Decl., P. 7.) At which time, the parties told the Court Clerk that we had settled the case. (Ibid.) Following Mr. Becker's indication of Defendants' acceptance, the Court re-sat the jury and then asked counsel for both parties to approach the side bar with the Court reporter. At the sidebar, the following conversation took place: THE COURT: Let's do this for now.

What's the settlement number? MR. CURTIS: $1,600,000 total for the case. No appeal. MR. BECKER: But the verdict doesn't stand. The verdict is gone. It will just be the resolution by virtue of a settlement. We are not settling punitive damages. We are settling the entire case. With that explanation, we're good. THE COURT: Well done. (Reporters Transcript of Hearing dated March 6, 2026, at 14:14-23, attached to Curtis Decl. as Exh. A.) The jury was informed of a settlement and sent home and the parties ordered back after the lunch break to formally place the settlement on the record under Code of Civ.

Proc., Sec. 664.6. After the lunch break, the following settlement was offered on the record by Mr. Curtis: "Mr. Becker and I agreed on the following terms: A payment of $1,600,000 within 30 days, and that will be a complete resolution of the case with no appeal." (Reporters Transcript of Hearing dated March 6, 2026, at 18:23-26, attached to Curtis Decl. as Exh. A.) This settlement was agreed to by all parties. (Reporters 24 Transcript of Hearing dated March 6, 2026, at 20:5-25, 24:2-10, attached to Curtis Decl. as Exh.

A.) Important to the present OSC, the Court concluded the hearing by stating the following: THE COURT: Thank you. The settlement is approved pursuant to 664.6. And as I've indicated, I think on the record, should there be any failure in any documentation that the lawyers are contemplating, the Court, when that happens and it rarely happens, but it has, I just get a copy of the settlement that you put on the record from Tara, cut and paste it and put it in a judgment form. That is how it ends up.

Now everybody understands that. (Reporters Transcript of Hearing dated March 6, 2026, at 24:12-20, attached to Curtis Decl. as Exh. A.) [Emphasis by this Court.] Defendants First Draft Settlement Agreement On March 19, 2026, Defendants' counsel sent their first draft of a long-form settlement agreement. (Attached as Exh. B, to the Curtis Decl.) This agreement contained a multitude of problematic provisions including one-sided and argumentative summaries of the evidence in the recitals section and an extremely convoluted waiver provision.

But perhaps most alarming, Defendants now changed the terms of the agreed-to settlement in several material ways: First, Defendants were now insisting that payment be made 30 days from execution of the long-form agreement. (See paragraph 1 of Article 1, attached to the Curtis Decl. as Exh. B.) The agreement on the record was 30 days from March 6, 2026. Second, and most importantly, Defendants were now insisting that Plaintiffs waive all future monetary damages that may occur from future floods in order to receive the $1,600,000 they agreed to on the record.

Defendants' draft long form settlement agreement was not acceptable to the Plaintiffs. In a good-faith effort to reach a long-form settlement agreement that would be acceptable to the Plaintiffs, on March 20, 2026, Plaintiffs' counsel submitted a redline of Defendants' draft agreement. (Plaintiffs redline draft agreement is attached as Exh. C, to the Curtis Decl.) Plaintiffs proposed redline attempted to modify the recitals regarding future damages, eliminating any reference to future claims. On March 31, 2026, Defendants counsel sent a further draft agreement; however, this version was not redlined. (Defendants' March 31, 2026, draft agreement is attached as Exh.

E, to the Curtis Decl.) Plaintiffs' counsel went line-by-line comparing the edits that were made and again Defendants had inserted provisions that were inconsistent with the on-the-record settlement and maintained their extremely convoluted waiver provision. And of upmost importance to the Plaintiffs, Defendant had completely deleted the language Plaintiffs' counsel inserted. Defendants' further revisions to the draft long form settlement agreement were not acceptable to the Plaintiffs. As a result of the latest draft agreement sent by Defendants not being acceptable to the Plaintiffs, on April 2, 2026, Plaintiffs' counsel, Mr.

Arndt wrote the following email to this Court: "Your Honor: Unfortunately, the parties have been unable to agree on the language for a settlement agreement in this case. Plaintiffs have reviewed the transcript from the afternoon of March 6, 2026, which is attached to this email. On that day, Your Honor informed the parties that: "... should there be any failure in any documentation that the lawyers are contemplating, the Court, when that happens and it rarely happens, but it has, I just get a copy of the settlement that you put on the record from Tara, cut and paste it and put it in a judgment form." (Page 24, lines 14 through 18.)

Since there has been a "failure in documentation," Plaintiffs request that the Court reduce the settlement that was entered on the record to a judgment.

What ensued thereafter, were several emails from Mr. Becker to this Court among which Mr. Becker accused Mr. Curtis of "breaching the duty of good faith and fair dealing." (Email from Mr. Becker dated April 2, 2026, attached to Curtis Decl. as Exh. G.) On April 3, 2026, this Court sent around a draft Proposed Judgment and, after some scheduling issues with counsel, eventually set a hearing on these issues on Tuesday, April 7, 2026. (Email from Judge Anderle dated April 3, 2026, attached to Curtis Decl. as Exh.

H.) After hearing oral argument, the Court entered his proposed Judgment. (Attached to the Curtis Decl., as Exh. I.) At the end of the hearing, the Court stated as follows: "To say I'm dismayed and distressed is beyond words. This hearing is egregious, in my mind's eye. That check should have been written a month ago. This case should have been done a month ago for good reason. The judgment will be entered. The Court is considering bad faith sanctions against the Goldmans and against Mr. Becker.

This is totally outrageous that we're here today. Mr. Curtis, you have 10 days in which to submit your attorney fee declaration as to all the attorney fees incurred since the moment that settlement was reached at sidebar until today. You've got 10 days to do that, and you've got 10 days within which to tell me why the Court should award sanctions against the defense. Your paperwork will then be due. Today is April 7. Your paperwork is due in 10 days. That's April 17. (Reporters Transcript of Hearing dated April 7, 2026 at 27:15-28:3, attached to Curtis Decl. as Exh.

J.) This brief is a result of Judge Anderle's request. At all times during this case and afterwards, Plaintiffs' counsel strongly believes Mr. Curtis acted with good faith to zealously protect the interests his client earned as a result of a hard-fought jury victory. However, Plaintiffs' counsel also strongly believes that Mr. Becker's post-settlement conduct was the height of bad faith. The reality is that, in an apparent attempt to salvage a positive result after a decisive jury loss, Defendants' draft settlement agreement attempted to change the material terms of the on-the-record settlement in several ways: First, Defendants were now insisting that payment be made 30 days from execution of this long-form agreement.

The agreement on the record was 30 days from March 6, 2026. Second, and most importantly as demonstrated above, in multiple places, waivers of any future damages that might occur to the Wax property in the event of a subsequent flood. That issue was not--and could not have been--decided by the jury, nor was it part of the settlement placed on the record pursuant to Code of Civ. Proc., Sec. 664.6 following trial (e.g. see paragraphs 1 and 4 of Article 1 and paragraphs 1 and 3 of Article 2 attached to the Curtis Decl. as Exh.

B.). To eliminate any ambiguity, Plaintiffs' counsel, in good faith, redlined Mr. Becker's draft settlement agreement and proposed the following clarifying language: "For the avoidance of doubt, if the improvements described in Paragraph 4 of the Recitals cause additional damage to Plaintiff's property in the future, such damage HAS NOT BEEN AND IS NOT RELEASED by Article II, Paragraph 1 or Article II, paragraph 4." (See paragraph 2 of Article 2, attached to the Curtis Decl. as Exh. C (emphasis in original).)

Mr. Becker refused to accept this language, which speaks volumes about Defendants' intent. (See Exh. E.) And as clear evidence of his bad faith, Mr. Becker had the audacity to argue at the hearing on the Proposed Judgment the following: Where the wheels fell off was when Mr. Curtis -- we proposed a settlement agreement and Mr. Curtis redlined it, and his redline -- his redlining is what raised the issues. What he redlined out, he wanted to omit not only any reference to the release would extend to future claims for personal injury claims, including emotional distress, and future damage claim... (Reporters Transcript of Hearing dated April 7, 2026 at 10:2-9, attached to Curtis Decl. as Exh.

J.) How could protecting his client by insisting that the settlement agreement not waive future damages, when this was not a part of the on-the-record settlement under Code of Civ. Proc., Sec. 664.6, cause the wheels to fall off? Instead, throughout the settlement agreement negotiation process Defendants kept insisting on retaining several vague and confusing waiver provisions and recitals, seemingly to preserve the argument that, if Mr. Wax's property is damaged again in the future by Mr. Goldman's improvements, Plaintiffs have somehow already waived those claims through the settlement agreement.

Plaintiffs were not required to assume that risk given the simple terms of the on-the-record settlement, namely, "a payment of $1,600,000 within 30 days, and that will be a complete resolution of the case with no appeal." (Reporters Transcript of Hearing dated March 6, 2026 at 10:23-26, attached to Curtis Decl. as Exh. A.) Plaintiffs and Plaintiffs' counsel had every right to act in the way that they did, namely, to simply request a Judgment based on the settlement placed on the record on March 6, 2026.

Plaintiffs were forced to do work and attend the hearing on April 7, 2026, solely because of Defendants' steadfast refusal to include clear language confirming that Plaintiffs are not waiving future claims arising from any future flood that causes new damage. Plaintiff did receive payment of $1,600,000 on April 8, 2026 (three days late per the terms of the Judgment), unfortunately, Defendants' bad-faith tactics did not end at the April 7, 2026, hearing on the Judgment or with that payment. On April 8, 2026, Defendants' counsel, Mr.

Becker, sent an email to Mr. Curtis stating, "our client reserves all rights relative to the payment including the right to appeal from the judgment." (Email from Mr. Becker dated April 8, 2026, attached to Curtis Decl. as Exh. K.) This is just another example and a stunning admission that Defendants' counsel does not feel he is bound to the on-the-record settlement. There is no doubt that the settlement to which his clients agreed to on the record stated specifically "no appeal," yet Mr. Becker specifically stated with respect to the payment issued to Mr.

Wax that his client "reserves all rights relative to the payment including the right to appeal." This is the height of bad faith and indicative of the entirely of Defendants' Counsel's conduct since (and frankly before) the jury verdict. As a consequence of the repeated bad-faith positions taken by Defendants' counsel, set forth above and as detailed in the Declaration of Robert A. Curtis, Plaintiffs were forced to pay Plaintiffs' counsel $8,125 in attorneys' fees between March 7, 2026, and the filing of this brief.

Defendants Points and Authorities in Opposition Filed 4/27/26; 12 pages; summarized: Defendants oppose the OSC re sanctions because: (a) the Court did not identify the basis, statute, or rule under which sanctions were to be awarded, depriving Defendants and counsel of fair notice and an opportunity to be heard, (b) in the April 7 OSC, which was issued from the bench, the Court did not specify the conduct at issue that warrants sanctions, and (c) the record on March 6, 2026 establishes the parties agreed to, and the Court approved, a settlement contingent upon a written long-form agreement and release terms.

This is contrary to the Court's subsequent characterization that the settlement involved simply payment of $1,600,000 payable in 30 days and a dismissal with no appeal. Furthermore, the Court in an email expressly allowed Defendants an additional 3 days to provide the settlement check because of the disagreements over the long-form settlement agreement. Nonetheless, Court on April 7 stated that "the check should have been written a month ago." Acting pursuant to the Court's express permission is not sanctionable conduct under any circumstances.

Nor is the failure to issue a check immediately after the March 6 hearing sanctionable since the settlement was contingent on the parties agreeing to a long form written agreement. Contends that although the Court issued the OSC "against the Goldmans and against Mr. Becker" there is no basis to award sanctions against the Goldmans, especially since the check was to be issued by Farmers. Contends that the Court announced it was "considering bad faith sanctions against the Goldmans and against Mr.

Becker" and set briefing and a hearing date, but did not specify any statute, rule, or ground, or specific conduct by counsel and/or clients to be sanctioned, thereby denying adequate notice. At the April 7, 2026, hearing, the Court stated, "The Court is considering bad faith sanctions against the Goldmans and against Mr. Becker," directed briefing deadlines, and from the bench set an OSC re sanctions for May 13, 2026, but did not identify any statute or rule as the basis for sanctions. The Court explained its basis for sanctions as follows: Mr.

Curtis offered the settlement. He, too, wanted to get it done. I approved it, $1,600,000 payable in 30 days and a dismissal. That is exactly what was said at the sidebar. Exactly what my judgment says, and exactly what the parties intended. To say I'm dismayed and distressed is beyond words. This hearing is egregious, in my mind's eye. That check should have been written a month ago. This case should have been done a month ago for good reason. The judgment will be entered. The Court is considering bad faith sanctions against the Goldmans and against Mr.

Becker. This is totally outrageous that we're here today. Defense contends that apart from the fact that the discussion at sidebar was not a settlement, adequate notice and an opportunity to be heard prior to the imposition of sanctions are mandated by the due process clauses of both the federal and state Constitutions. Moreover, the notice must advise of the statute, specific grounds and conduct for which sanctions are sought. The requirement to specify the statutory basis is particularly critical because different sanctions statutes have different procedural requirements, substantive standards, and remedies. (Childs v.

PaineWebber Incorporated (1994) 29 Cal.App.4th 982, 995.) Here, the Court's OSC, which was ordered from the bench on April 7, 2025, "does not recite specific conduct and circumstances justifying sanctions" or "the statutory basis" for an award of sanctions. (Caldwell, supra, 222 Cal.App.3d at 978.) On this basis alone the OSC must be discharged. Furthermore, "due process requires that any order imposing sanctions must state with particularity the basis for finding a violation...." State Courts have no inherent power to impose monetary sanctions.

Monetary sanctions may be assessed only pursuant to a specific statute or Rule. Fundamental fairness requires clear notice of the legal authority and specific grounds before imposing sanctions; absent that, the OSC should be discharged. [NOTE. The Childs v. PaineWebber case that defense cited has virtually no similarity to this case; it is a frivolous citation. In that case the Court of Appeal found the sanctions order stated the amount of the sanctions but failed to recite any details of the conduct or circumstances justifying their imposition.

Moreover, the Court failed to incorporate by reference any papers setting forth the conduct, circumstances, and legal arguments underlying the Court's conclusions. Such a summary order violates due process and precludes this Court from determining whether the trial Court abused its discretion in awarding sanctions under Code of Civil Procedure section 128.5.] Nevertheless, after referring to Childs, the defense argues the Court's OSC is based on a misunderstanding of the terms of the settlement agreed to in open Court on March 6.

The OSC is premised on the notion that the parties entered an enforceable settlement on March 6. A review of the record belies that conclusion. The record confirms that on March 6, 2026, after the sidebar, the broad terms of a settlement number were stated on the record. However, not all clients were not present at that session, and no formal oral settlement had been agreed to--nor could it, as a matter of law, since not all clients were in Court to approve it. Then, during the afternoon session, the parties expressly agreed to proceed with a "typical long-form settlement agreement" including a standard general release and a section 1542 waiver provision, and the Court set an OSC re dismissal to allow documentation.

This forecloses any premise that defense counsel acted in bad faith by seeking to finalize the written terms. At the March 6, 2026, afternoon session, Plaintiffs' counsel stated the general terms that were outlined the Court during the sidebar--payment of $1,600,000 within 30 days and no appeal--but then acknowledged that Defendants "may require a settlement agreement," suggested Mr. Becker would draft it, and asked the Court to retain jurisdiction under Code of Civil Procedure section 664.6. Mr.

Becker stated on the record that, "Since this is a settlement of the lawsuit ... it will require the typical long-form settlement agreement with the typical material terms of a standard general release of all claims known and unknown, 1542 waiver," and would extend to clients, heirs, successors, and related insurers. Significantly, Plaintiffs' counsel did not object to proceeding in that manner at that time. The following exchange occurred during the afternoon session: MR. BECKER: Fortunately, everybody that needed to be available from Farmers was available.

We lucked out. THE COURT: That's a good point. We are ready to wrap it up. Mr. Curtis, would you lead the way, please? MR. CURTIS: Sure, your Honor. And Mr. Becker can supplement this with anything he has. First of all, thank for your Honor pushing us and getting us through this trial as quickly as you did. I enjoy trying cases, your Honor, and I truly enjoy trying cases in front of you. You are the best of the best. The amount of work you put in on a case pales in comparison to what most judges do.

And I thank you for that. But to the terms of the settlement, Mr. Becker and I agreed on the following terms: A payment of $1,600,000 within 30 days, and that will be a complete resolution of the case with no appeal. THE COURT: The way it is going to be documented, are you thinking dismissal? I am not quite sure what the last document in my computer will be. MR. CURTIS: Sure, that's a great point, your Honor. I don't know if Mr. Becker's client is going to require a settlement agreement. But if that is the case, then I would suggest Mr.

Becker draft it and get it to my attention here shortly, and I would be happy to look it over. Yes, the case would then be dismissed with prejudice upon receipt of payment. You would maintain authority under 664.6 if for some reason the payment wasn't made. MR. BECKER: Counsel is correct. Since this is a settlement of the lawsuit and, obviously, it will require the typical long-form settlement agreement with the typical material terms of a standard general release of all claims known and unknown, 1542 waiver.

The release will extend to my clients, their heirs, successors, the typical boilerplate language of that. If they want to make it a mutual release, we can. That is up to them, but just those standard terms. I can't remember them all, but you've seen longform settlement agreements and et cetera, et cetera, California law applies. So counsel is correct. I will draft the proposed settlement agreement, and I agree the Court would maintain jurisdiction of this matter. With respect if any issue comes up with respect to concluding the settlement before the dismissal with prejudice is filed, we would come back to your Honor to resolve those matters. (3/6/26 TR 10:7-12:3) The Court confirmed approval under section 664.6 and, anticipating possible documentation issues, also set an OSC re dismissal for May 6 to ensure the case would be concluded once the documentation and payment were complete.

The transcript demonstrates that the settlement was not merely "oral," but expressly subject to written memorialization and general release terms. Sanctioning defense counsel for engaging in that documentation process contradicts the record. Furthermore, the Court stated that if the parties could not agree on the documentation, the Court would copy and paste the terms placed on the record and put them in judgment. THE COURT: The settlement is approved pursuant to 664.6. And as I've indicated, I think on the record, should there be any failure in any documentation that the lawyers are contemplating, the Court, when that happens and it rarely happens, but it has, I just get a copy of the settlement that you put on the record from Tara, cut and paste it and put it in a judgment form.

That is how it ends up. (3/6/26 TR 16:12-19) Incredibly, Plaintiffs' brief and Mr. Curtis' declaration in support of an award of sanctions conveniently leave out the portion of the transcript of the afternoon session on March 6 where the terms of a general release, a section 1524 and confidentiality provision for Defendants' financial record were recited and approved by all clients on the record. The process of negotiating an agreed long form settlement agreement involved both the exchange of drafts and emails that reflected, inter alia, good faith negotiation over the scope of a standard general release - precisely the process contemplated on March 6.

However, the effort to reach agreement ended when Mr. Curtis sent a series of unprofessional, angry and arrogant emails to Mr. Becker. Plaintiffs' brief does acknowledge that, prior thereto, Defendants circulated a first draft on March 19, 2026, Plaintiffs responded with red lines on March 20, 2026 to modify recitals regarding future damages, eliminated any reference to future damage claims and added new paragraph regarding the scope of the release and Defendants thereafter sent a proposed revised Agreement. (See Paragraphs 12-15, Exhibits D-E to the Becker Declaration).

After his receipt of Defendants proposed revised agreement, in a March 31, 2026 email, Mr. Curtis advised that "The language as worded leaves too much ambiguity to sign any document which arguably impairs our rights to sue for damage caused by Mr. Goldman's improvements." (See Paragraph 16, Exhibit F to the Becker Declaration). However, Mr. Curtis' email did not explain what the ambiguity was. In fact, Defendants' proposed revised agreement did not include any mention of future damage or claims for future damage and made all of the changes to the waiver provision requested in Plaintiffs' red-lined version.

On March 31, 2026, Mr. Becker sent an email to Mr. Curtis agreeing to forego Defendants' alternative new language of release. Mr. Becker proposed a general release of all claims, known and unknown, with a section 1542 waiver. In response, Mr. Curtis sent an email claiming that "There is nothing in the record about 1542. Nothing." (See Paragraph 17-18, Exhibits G & H to the Becker Declaration). This is astounding since the transcript clearly reflects his agreement to a section 1542 waiver. When Mr.

Becker emailed a copy of the March 6, 2026, settlement agreement, which clearly referenced the section 1542 as a settlement term, Mr. Curtis responded with a flurry of angry, unprofessional, belligerent emails. (See Paragraphs 19-25, Exhibits I, J, K & L to the Becker Declaration). A bona fide dispute about the scope of a "typical long-form settlement agreement" and associated release language does not equate to sanctionable bad faith, particularly where the record expressly contemplated such a written agreement and retained the Court's jurisdiction to resolve documentation issues.

Thereafter on April 2, 2026, Mr. Aarndt (Mr. Curtis' partner) sent an email to the Court forwarding a copy of the March 6 transcript and quoted the Court's statement that "should there be a failure in any documentation that the lawyers are contemplating .... I just get a copy of the settlement that you put of the record from Tara, cut and paste it and put it in a judgment form." (See Paragraph 25, Exhibit M to the Becker Declaration.) On April 2, 2026 Mr. Becker sent an email to the Court to advise of Mr.

Curtis' refusal to agree to an essential core term of the settlement that the parties agreed to the afternoon of March 6: to wit "A general release of all claims, known or unknown, with a 1542 waiver." In his April 2 email Mr. Becker requested that before any judgment was entered, pursuant to CCP Section 664.6 the Court scheduled a hearing and briefing schedule on shortened notice pursuant to section 664.6. (See Paragraph 26, Exhibit N to the Becker Declaration). Instead, on Friday, April 3, 2026, the Court sent a Proposed Judgment and scheduled a hearing for Monday April 6 to hear any objections thereto. (See Paragraph 27, Exhibit O to the Becker Declaration.)

The hearing was thereafter continued to Tuesday, April 7. On Saturday, April 4, 2026, Mr. Becker sent an email to the Court, that was copied to Mr. Curtis, requesting that payment be deferred until three days after the Court entered judgment. Mr. Curtis did not object to this request and the Court gave an emoji "thumbs up" in response thereto, stating "That works". The Court thereafter acknowledged receipt of Mr. Beckers ensuing email of thanks. (See Paragraph 28-29, Exhibit P to the Becker Declaration).

Farmers Insurance FedEx the check the day after the April 7 hearing. After the April 7 hearing, the Court proceeded to a judgment that did not include any release language whatsoever, without a section 1542 waiver or a provision for confidentiality of financial records, as was made clear on the record on March 6. Moreover, rather than holding a hearing under section 664.6, the Court on April 7 immediately entered judgment requiring payment of $1.6 million which said nothing about a release or section 1542 waiver.

The OSC is premised on the Court's conclusion that an enforceable settlement was reached on March 6. The Court then entered judgment on April 7. Besides the fact that the judgment did not include all of the terms agreed to on the record, judgment could not be entered without complying with section 664.6. Section 664.6 states that the Court may enter judgment pursuant to the settlement terms "upon motion." (emphasis added). However, the Court signed the judgment sua sponte on April 7. In issuing the OSC, the Court stated that "the check should have been written a month ago."

This would have been impossible since the settlement was conditioned on a long-form agreement and the judgment the Court signed stated that payment was to be made within 30 days of March 6, 2026. The fact the parties could not agree on a long-form agreement did not permit the Court to enter judgment - especially a judgment that did not include all the material terms. Moreover, "[a] settlement is enforceable under section 664.6 only if the parties agreed to all material settlement terms." (Hines v.

Lukes (2008) 167 Cal.App.4th 1174, 1182.) In this case, the parties disagreed as to the language of a long-form settlement. As noted, the OSC itself is not clear what the alleged sanctionable misconduct consists of. of, which raises due process concerns. What is clear is that at the April 7 hearing the Court gave no hint that its concern was over the terms of the long form agreement or that the sanctionable conduct related to the negotiations over the long-form agreement. Instead the Court expressed outrage that the parties had engaged in any effort to negotiate terms of a long form settlement agreement at all: THE COURT: I expected that $1,600,000 would be mailed the next day (i.e.

March 7), and it would be done. 30 days later I got a text saying that they're talking about a lengthy settlement agreement. Nonsense. ... To say that I'm dismayed and disappointed is beyond words. This hearing is egregious, in my mind's eye. That check should have been written a month ago and for good reason. The Judgment will be entered" (4/7/26 TR 26: 27 - 28: 2; 27: 15 - 19) Second, the judgment entered by the Court does not mention a general release, section 1542 waiver or confidentiality provision.

Third, if there were disagreements over the long-form agreement, the Court contemplated. simply copying and pasting the transcript portions to the judgment--which the Court has not done. Fourth, because it was contemplated there could be disagreements over the documentation, it would be an abuse of discretion to sanction counsel because there were such disagreements. Furthermore, there could be no completed settlement until the parties made a good faith effort to agree on the terms of the long-form settlement agreement.

What occurred in those negotiations was not bad faith. (In re Marriage of Sahafzadeh-Taeb & Taeb (2019) 39 Cal.App.5th 7 124, 136 [To award sanctions after an in-Court settlement agreement the attorney must take a position that is "wholly incredible" and "without any merit whatsoever" or in total disregard of the "patent obligations of the contract"-- frivolous and without "honest belief in the propriety or reasonableness".].) Plaintiffs make several arguments in the Memorandum of Points and Authorities in support of this OSC.

Plaintiffs claim that "Defendants were now insisting that payment be made 30-days from execution of a long form settlement agreement." Defendants' first proposed agreement did contain that term. However, Mr. Curtis did not object to it and retained that provision in his red line version. (See page 3 paragraph 4 of Plaintiffs' red lined version which is included in Exhibit "D" to the Becker Declaration). Nevertheless, because the negotiations had been taking longer than anticipated, in a show of good faith, and in the absence of a request from Mr.

Curtis, Mr. Becker unilaterally proposed to Mr. Curtis that the payment date be advanced from 30 days after execution of the Agreement, to 7 days. (See Paragraph 14, Exhibit "E" to the Becker Declaration.) Plaintiffs falsely claim that throughout the settlement agreement negotiation process Defendants kept insisting that if Mr. Wax's property was damaged in the future by Mr. Goldman's improvements, Plaintiffs had already waived those claims through the settlement agreement. To the contrary, Defendants proposed revised Agreement deleted all references to future damage or claims for future damage that were requested in Mr.

Curtis' red lined version. However, Mr. Curtis objected to a section 1542 waiver. When confronted with the fact that the settlement placed on the record on March 6 expressly included a section 1542 waiver, Mr. Curtis claimed that there was "no mention of 1542 in the record. None." In their memorandum of points and authorities, Plaintiffs quote one portion of an argument Mr. Becker made during the April 7 hearing in which Mr. Becker referred to a portion of Mr. Curtis' closing argument requesting an award for both past and future emotional distress.

Plaintiffs' brief fails to disclose that, as requested in Mr. Curtis' red lined version, Defendants revised proposed Agreement deleted all references to future damage or claims for future damage for both emotional distress and property damage. Finally, upon conclusion of arguments by counsel on April 7, the Court informed the parties that it was signing the judgment that the Court sent to counsel on Friday, April 3, 2026, requiring payment to be made "within 30 days of March 6, 2026"; which was the day before the April 7 hearing.

To comply with judgment, Farmers sent a settlement draft to Mr. Wax the day after the April 7 hearing by overnight mail. The check included four days of interest. After consulting with our appellate partner, Mr. Becker sent an email to Mr. Curtis advising that his clients have reserved all rights related to the payment including the right to appeal from the judgment. This was entirely proper since the Defendant's waiver of the right to appeal related to the settlement on the record on March 6, not the judgment that was entered by the Court at the April 7 hearing.

That is, the judgment that was entered did not include all the terms agreed upon, including a general release, a section 1542 waiver and confidentiality with respect to Defendants' financial information. Furthermore, the judgment that was entered was not entered pursuant to section 664.6 which expressly requires entry by motion. Judgment was entered without the required motion. Plaintiff's Reply Filed 5/7/26; 6 pages; summarized: It is undisputed that the following settlement was offered on the record on March 6, 2026: "Mr.

Becker and I agreed on the following terms: A payment of $1,600,000 within 30 days, and that will be a complete resolution of the case with no appeal." (Reporters Transcript of Hearing dated March 6, 2026, at 18:23-26, attached to Declaration of Robert A. Curtis ("Curtis Decl.") as Exh. A.) Defendants' opposition brief offers the case of In re: Marriage of Sarhafzadeh-Taeb & Taeb (2019) 39 Cal.App.5th 124, 136 ("Taeb") to argue that sanctions are not appropriate in this case. However, this decision does the opposite and militates in favor of granting Plaintiffs' request.

The Taeb decision stands for the proposition that for a Court to award sanctions after an in-Court settlement, the attorney must take a position that is "wholly incredible" or in total disregard of the "patent obligations of the contract" or without "honest belief in the propriety or reasonableness" of the settlement. Defendants' counsel's post-664.6 settlement conduct squarely fits into all three of these categories for the following reasons: Defendants insisted that the $1,600,000 payment be made 30 days from execution of the parties long-form agreement. (See paragraph 1 of Article 1, attached to the Curtis Decl. as Exh.

B.) The agreement on the record was 30 days from March 6, 2026. Throughout several drafts of the settlement agreement and subsequent emails, Defendants continued to insist on timeframes longer than the 30-days agreed upon on the record, even having the temerity to argue twice in its opposition brief that Judge Anderle had granted them additional time. (See Opposition Brief at 2:9:11 and 7:16-20.) Throughout several drafts of the settlement agreement and subsequent emails, Defendants insisted that, as a condition to being paid the agreed-upon $1,600,000, Plaintiffs must waive all future monetary damages that may occur from a possible future flood, even though no such condition was placed on record.

To wit, Defendants' draft long form settlement agreement insisted as follows: "Subject to the terms of the Agreement, Defendants through their insurer, Farmers, promise and agree to pay in full and complete satisfaction to Plaintiffs and Plaintiffs agree to accept a full and complete satisfaction of all claims, including claims for past and future monetary damages pertaining to any of the facts and circumstances described in paragraph 4 of the RECITALS and work required to prevent flood damage in the future that may be caused by any of those facts and circumstances, as well as all causes of action, issues, claims and allegations and prayers for relief in Plaintiffs' Complaint." (See paragraph 1 of Article 1, attached to the Curtis Decl. as Exh.

B (emphasis added).) A future damages waiver was never agreed upon in open Court on March 6, 2026, pursuant to Sec. 664.6. Defendants insisted that the settlement agreement contains a multitude of one-sided and argumentative summaries of the evidence in the recitals section and then tied those recitals directly into the draft 1542 waiver. This resulted in an extremely convoluted waiver provision; namely, Defendants draft settlement agreement waiver and 1542 section read as follows: "which Plaintiffs now have with respect to the damage claims subject of the pending action and also those that may hereafter accrue, including my way of illustration and not by way of limitation, future claims of damage for personal injury, emotional distress, wrongful death or property damage, whether known or unknown, that may accrue from or as a result of any of the facts and circumstances described in paragraph 4 of the RECITALS or arising out or related to the allegations of Plaintiffs' Complaint." (See paragraph 1 of Article 2, attached to the Curtis Decl. as Exh.

B (emphasis added).) Such a broad and confusing release provision and 1542 waiver was never agreed upon in open Court on March 6, 2026, pursuant to Sec. 664.6. Despite a clear waiver of appellate rights as part of the settlement, on April 8, 2026, Defendants' counsel, Mr. Becker, sent an email to Mr. Curtis stating, "our client reserves all rights relative to the payment including the right to appeal from the judgment." (Email from Mr. Becker dated April 8, 2026, attached to Curtis Decl. as Exh.

K.) Reserving the right to appeal was never agreed upon in Court on March 6, 2026, pursuant to Sec. 664.6 (in fact, the exact opposite is true of the agreement). These five examples clearly meet the standard for sanctions of Taeb, supra, 39 Cal.App.5th at 136 in that Defendants have taken positions that are "wholly incredible," are in total disregard of the "patent obligations of the contract," and are without "honest belief in the propriety or reasonableness" of the settlement. This was not a bona-fide dispute as to the essential core terms of the settlement, as Defendants' counsel's opposition brief has suggested.

This was an obvious attempt to hold settlement monies hostage while trying to salvage a positive result for his client after a decisive jury loss. Put simply, Defendants' draft settlement agreement attempted to change the material terms of the on-the-record settlement and doing so was the height of bad-faith. Judge Anderle concluded the March 6, 2026 Sec. 664.6 hearing by stating the following: "THE COURT: Thank you. The settlement is approved pursuant to 664.6. And as I've indicated, I think on the record, should there be any failure in any documentation that the lawyers are contemplating, the Court, when that happens and it rarely happens, but it has, I just get a copy of the settlement that you put on the record from Tara, cut and paste it and put it in a judgment form.

That is how it ends up. Now everybody understands that." Reporters Transcript of Hearing dated March 6, 2026 at 24:12-20, attached to Curtis Decl. as Exh. A.) Instead of continuing to deal with Mr. Becker's bad faith redlined settlement agreements with vague and confusing waiver provisions and argumentative recitals, Plaintiffs simply asked the Court to do what it said it was going to do. Plaintiffs were not required to assume the risk of Mr. Becker's "gotcha" settlement agreement, given the simple terms of the on-the-record settlement, namely, "a payment of $1,600,000 within 30 days, and that will be a complete resolution of the case with no appeal." (Reporters Transcript of Hearing dated March 6, 2026 at 10:23-26, attached to Curtis Decl. as Exh.

A.) And when the Court sent around a proposed Judgment laying out the simple terms of the settlement, what ensued were several emails from Mr. Becker to his Honor accusing Mr. Curtis of "breaching the duty of good faith and fair dealing." (Email from Mr. Becker dated April 2, 2026, attached to Curtis Decl. as Exh. G.) As a consequence of the repeated bad-faith positions taken by Defendants' counsel set forth above, and as detailed further in the Declaration of Robert A. Curtis, Plaintiffs were forced to pay Plaintiffs' counsel $8,125 in attorney fees between March 7, 2026, and the filing of the opening brief.

Plaintiffs are waiving the additional 1.8 hours it took reviewing the Opposition and preparing this reply and the anticipated 1 hours attending the hearing on May 13, 2026. Plaintiffs only seek the same amount of fees as set forth in their initial filing. The Court's Conclusions The Court Learned Something The Court will never broker another settlement after having gone through this experience. The jury was waiting eagerly to set damages against Defendants they just found had acted despicably and with malice.

The Court has done such phase 2 trials many times. They are short trials - but always painful for the defense. Next time the Court will let the jury decide and not go through what has become an unnecessary, accusatory, time consuming, contentious, and sometimes acrimonious post settlement experience - all because the Court wanted the case to settle before a punitive damage decision was made by - what appeared to be - an angry jury.] The Arguments Made by Defendants Are Without Merit. Current Law: The current law makes the process very convenient and very simple and enforceable when one wants to do it.

A CCP 664.6 settlement can now be documented simply. Previously, parties often lost the ability to enforce settlements because they didn't follow strict "magic words" or specific filing procedures before dismissing their case. Since 2025 the law now simplifies this by allowing the Court to dismiss a case without prejudice and automatically retain jurisdiction to enforce the settlement until it is fully performed. Parties can now use a single updated Judicial Council form (like the revised Request for Dismissal) to ask for this retention of power, rather than having to file separate stipulations and proposed orders.

The Court Did Identify The Basis, Statute, or Rule Under Which Sanctions Were To Be Awarded. Defendants raise this issue to distract - not to clarify. Certainly, Defendants and counsel have had fair notice and an opportunity to be heard. The Court in the in the April 7 OSC, which was issued from the bench, clearly specified the conduct at issue that warrants sanctions, when it said "To say I'm dismayed and distressed is beyond words. This hearing is egregious, in my mind's eye." ["This hearing" was caused by Defendants refusal to comply with the 664.6 settlement and instead contend there should be a long form settlement agreement with provisions inserted that were never "agreed upon" when the case settled AND their steadfast refusal to admit to the settlement made; now contending new and vastly different unacceptable changes clearly contrary to the settlement put on the record.

It was clearly conduct intended to cause unnecessary delay or undertaken for an improper motive Since that time the issue has been squarely briefed at length by Plaintiffs and Defendants; moreover, both sides have had a chance to orally argue their case before any decision was reached by the Court as to whether the case was one where bad faith sanctions should be awarded. There are no due process issues here despite the Defendants' effort to find some. The Defendants' claim that the record on March 6, 2026, establishes the parties agreed to, and the Court approved, a settlement contingent upon a written long-form agreement and release terms is patently incorrect and urged in bad faith.

On the contrary the Court recognized the settlement had to be documented but made it very clear that if counsel refused to match the documentation to the settlement that the Court would simply cut and paste the settlement put on the record and make it "the judgment" -- the Court even acknowledged it had experienced such efforts - although not often - but if counsel refused to do it - the Court would - and the Court did. Defense counsel's unilateral statement in the Courtroom that there would be a long-form settlement agreement with new clauses was never part of the settlement agreement put on the record nor approved by the Court.

Indeed, the Court made it crystal clear; the settlement put on the record was "the settlement" and if the lawyers in their "documentation efforts" could not agree on something else the Court would cut and paste and sign the Judgment. The Defense position is undisputably contrary to the record. The Current Applicable Law Supports This Decision The Court has read and considered the current law as articulated in many cases and included in the briefs submitted including In re: Marriage of Sarhafzadeh-Taeb & Taeb (2019) 39 Cal.App.5th 124, 136 ("Taeb").

That case is a significant California family law case that clarifies the standards for imposing sanctions under Code of Civil Procedure section 128.5. The case is primarily cited for its detailed analysis of what constitutes "bad faith" and the procedural requirements for sanctions when an attorney fails to appear for trial. Some of the issues the case stands for are: A. Subjective vs. Objective Bad Faith: The Court clarified that section 128.5 requires a showing of subjective bad faith (conduct intended to cause unnecessary delay or undertaken for an improper motive).

This is a more stringent standard than the objective "reasonableness" standard used in other sanction statutes like section 128.7. B. Implied Findings: On page 136, the appellate Court emphasizes that while a trial Court's order must be in writing and recite in detail the conduct or circumstances justifying the sanctions, a "thorough recitation of reasons" can constitute an implied finding of bad faith sufficient to support the order. C. Attorney vs. Client Liability: The appellate Court affirmed the sanctions against the attorney (Trigger) because she failed to appear for trial and misrepresented her readiness but reversed the sanctions against the husband (Taeb), as he had appeared as scheduled and only relayed information provided by his counsel. [The Court ordered Taeb [the client] to pay $1,575 and Trigger [the lawyer] to pay $2,000.]

D. Failure to Seek a Continuance: A major factor in the bad faith finding was that the attorney knew she had a scheduling conflict with another trial but made no effort to seek a continuance before the day of the trial, instead simply failing to show up. No vestige remains of the holdings in San Diegans for Open Government v. City of San Diego (2016) 247 Cal.App.4th 1306, 203 Cal.Rptr.3d 34 (San Diegans) concerning the requirements of section 128.5. Among other things, San Diegans held that an objective standard applies when determining whether a party's or an attorney's conduct is sanctionable under section 128.5, as it does under section 128.7.

Section 128.5 has since been amended to specifically overrule San Diegans on this point. The law concerning the kind of conduct sanctionable under sections 128.5 and 128.7 has, thus, largely returned to its pre-San Diegans state--with a more stringent standard requiring subjective bad faith applicable to section 128.5, and a lesser standard, requiring only objective bad faith, applicable to section 128.7. This case is guided in part by Levy v. Blum (2001) 92 Cal.App.4th 635 as illustrative of the subjective bad faith standard applicable under section 128.5.

In that case, the appellate Court affirmed sizeable sanctions assessed against a party and his lawyer [$25,992] in a probate proceeding. After granting respondents' motion to enforce a settlement agreement that the parties had reached after a full day of negotiations, and which an attorney from Gibson had explicitly entered into the record before the trial Court nearly nine months earlier, the trial Court found that appellants' action of taking a position in "total disregard of the clear, unambiguous terms of the in-Court settlement agreement" was frivolous and in bad faith.

The trial Court found their position as to the intent of the parties in entering a prior settlement "?'wholly incredible and without any merit whatsoever,'?" their conduct "?'was taken in total disregard of the clear, unambiguous terms of the in-Court settlement agreement,'?" their actions "?'were taken in bad faith, that is, without subjective good faith or honest belief in the propriety or reasonableness of such actions,'?" and as a result, the opposing party had incurred additional fees and costs. (Id. at pp. 633-634, 112 Cal.Rptr.2d 144.)

As to the standard under section 128.5, the Court stated, "A bad faith action or tactic is considered 'frivolous' if it is 'totally and completely without merit' or instituted 'for the sole purpose of harassing an opposing party.' ([Former] Sec. 128.5, subd. (b)(2).) Whether an action is frivolous is governed by an objective standard: any reasonable attorney would agree it is totally and completely without merit. [Citations.] There must also be a showing of an improper purpose, i.e., subjective bad faith on the part of the attorney or party to be sanctioned." (Levy, supra, 92 Cal.App.4th at p. 635, 112 Cal.Rptr.2d 144; The Levy Court further explained, "[w]hen the Legislature enacted section 128.5, its intent was '?"to broaden the powers of trial Courts to manage their calendars and provide for the expeditious processing of civil actions by authorizing monetary sanctions now not presently authorized?"?' [Citation.]

Section 128.5 authorizes the award of attorney fees as a sanction to control improper resort to the judicial process. [Citation.] The statute permits the award of attorney fees, not simply as appropriate compensation to the prevailing party, but as a means of controlling burdensome and unnecessary legal tactics. [Citation.] Section 128.5 requires much more than a party acting with 'no good reason' to justify an award of sanctions. There must be a showing not only of a meritless or frivolous action or tactic, but also of bad faith." (Levy, supra, 92 Cal.App.4th at pp. 635-636.

Levy stands for the following propositions: A. Standard for Sanctions: To impose sanctions under Sec. 128.5, the Court must find that actions or tactics were made in bad faith and were either frivolous or "solely intended to cause unnecessary delay". B. Definition of "Frivolous": The Court applies an objective standard, asking whether any reasonable attorney would agree that the action is "totally and completely without merit". C. Requirement of Bad Faith: Beyond being frivolous, there must be a showing of subjective bad faith--an improper motive, such as intent to harass the opposing party.

This bad faith can sometimes be inferred from the prosecution of a completely meritless action. D. Procedural Fairness: The case emphasizes that sanctions require adequate notice and a reasonable opportunity to be heard before they are imposed. This Court Finds That Current Law Has Been Met. When the jury returned with its verdict it found there was "clear and convincing evidence" that the Defendants conduct was despicable, malicious, fraudulent. The Court invited a fast settlement, or the Court would begin phase 2 of the trial.

Defendants disclosed their net worth, and it was very sizeable. In this Court's opinion Defendants were facing the probability of a punitive damages award by a obviously unhappy jury in the multi-million dollars. Defendants' net worth was about to become Mr. Curtis' exhibit #1 and would be a very critical and decisive exhibit. At this Court's urging the lawyers met and agreed on settlement. The lawyers and their clients met and decided on a modest increase in the verdict awarded and agreed the $1.6 million would be paid in 30 days and there could be no appeal.

THAT was the settlement - no more and no less. As is necessary the settlement must be reduced to a writing - too often this Court has seen that writing to be an opportunity for losing counsel to present to prevailing counsel a lengthy "Settlement and Judgment" with boilerplate language that materially changes the settlement agreed upon and provides the losing party with opportunities to claw back the money being paid by inserting gotcha language in "the 664.6 agreement." The result is that the document purportedly announced as "documenting the settlement" ends up going vastly beyond.

This Court has seen it happen and that is why the Court made it clear it would not permit that to happen here -- and specifically told the lawyers that if the settlement agreement did not do what the 664.6 settlement said, the Court would simply cut and paste and sign the judgment reflecting what was agreed upon. After much meritless discussion and argument made in Court by Counsel for Defendants on 4/7/26 the Court did just what it said it would do. This Court must decide what a reasonable attorney would consider in determining if the Defense case is "totally and completely without merit" and "beyond being frivolous" and has there been a "showing of subjective bad faith" such as improper motive, or an intent to harass the opposing party.

This bad faith can be inferred from the prosecution of a completely meritless position. Here then are the facts the reasonable attorney reviewed: 1. It is undisputed that the following settlement was offered on the record on March 6, 2026: "Mr. Becker and Mr. Curtis agreed on the following terms: A payment of $1,600,000 within 30 days, and that will be a complete resolution of the case with no appeal." (See Reporters Transcript of Hearing dated March 6, 2026 at 18:23-26, attached to Declaration of Robert A.

Curtis ("Curtis Decl.") as Exh. A.)

2. Defendants' opposition brief argues that sanctions are not appropriate in this case and relies, in part, on the Taeb decision. However, the decision does the opposite and militates in favor of granting Plaintiffs' request. The Taeb decision stands for the proposition that in order for a Court to award sanctions after an in-Court settlement, the attorney must take a position (1) that is "wholly incredible" or (2) in total disregard of the "patent obligations of the contract" or (3) without "honest belief in the propriety or reasonableness" of the settlement. Defendants' counsel's post-664.6 settlement conduct squarely fits into all three of these categories for the following reasons. [See also Levy v. Blum supra.]

3. Defendants insisted that the $1,600,000 payment be made 30 days from execution of the parties long-form agreement. (See paragraph 1 of Article 1, attached to the Curtis Decl. as Exh. B.) The agreement on the record was 30 days from March 6, 2026. Throughout several drafts of the settlement agreement and subsequent emails, Defendants continued to insist on timeframes longer than the 30-days agreed upon on the record, even arguing in its opposition brief that this Court had granted them additional time. (See Opposition Brief at 2:9:11 and 7:16-20.)

4. Throughout several drafts of the settlement agreement and subsequent emails, Defendants insisted that, as a condition to being paid the agreed-upon $1,600,000, Plaintiffs must waive all future monetary damages that may occur from a possible future flood, even though no such condition was placed on the record. Defendants' draft long form settlement agreement insisted as follows: "Subject to the terms of the Agreement, Defendants through their insurer, Farmers, promise and agree to pay in full and complete satisfaction to Plaintiffs and Plaintiffs agree to accept a full and complete satisfaction of all claims, including claims for past and future monetary damages pertaining to any of the facts and circumstances described in paragraph 4 of the RECITALS and work required to prevent flood damage in the future that may be caused by any of those facts and circumstances, as well as all causes of action, issues, claims and allegations and prayers for relief in Plaintiffs' Complaint." (See paragraph 1 of Article 1, attached to the Curtis Decl. as Exh.

B.) A future damages waiver was never agreed upon in open Court on March 6, 2026, pursuant to Sec. 664.6.

5. Defendants insisted that the settlement agreement contain a multitude of one-sided and argumentative summaries of the evidence in the recitals section and then tied those recitals directly into the draft 1542 waiver. This resulted in an extremely convoluted waiver provision; namely, Defendants draft settlement agreement waiver and 1542 section read as follows: "which Plaintiffs now have with respect to the damage claims subject of the pending action and also those that may hereafter accrue, including my way of illustration and not by way of limitation, future claims of damage for personal injury, emotional distress, wrongful death or property damage, whether known or unknown, that may accrue from or as a result of any of the facts and circumstances described in paragraph 4 of the RECITALS or arising out or related to the allegations of Plaintiffs' Complaint." (See paragraph 1 of Article 2, attached to the Curtis Decl. as Exh.

B (emphasis added).) Such a broad and confusing release provision and 1542 waiver was never agreed upon in open Court on March 6, 2026, pursuant to Sec. 664.6.

6. Despite a clear waiver of appellate rights as part of the settlement, on April 8, 2026, Defendants' counsel, Mr. Becker, sent an email to Mr. Curtis stating, "our client reserves all rights relative to the payment including the right to appeal from the judgment." (See Email from Mr. Becker dated April 8, 2026, attached to Curtis Decl. as Exh. K.) Reserving the right to appeal was never agreed upon in Court on March 6, 2026, pursuant to Sec. 664.6 (in fact, the exact opposite is true of the agreement).

7. The above examples clearly meet the standard for sanctions under Taeb and Levy, supra in that Defendants have taken positions that are "wholly incredible," are in total disregard of the "patent obligations of the contract," and are without "honest belief in the propriety or reasonableness" of the settlement. This was not a bona-fide dispute as to the essential core terms of the settlement, as Defendants' counsel's opposition brief has suggested. This was an obvious attempt to hold settlement monies hostage while trying to salvage a positive result for his client after a decisive jury loss. Put simply, Defendants' draft settlement agreement attempted to change the material terms of the on-the-record settlement and doing so was the height of bad-faith.

8. This Court was dismayed with what happened but was not unprepared. This Court concluded March 6, 2026 Sec. 664.6 hearing by stating the following: THE COURT: Thank you. The settlement is approved pursuant to 664.6. And as I've indicated, I think on the record, should there be any failure in any documentation that the lawyers are contemplating, the Court, when that happens and it rarely happens, but it has, I just get a copy of the settlement that you put on the record from Tara, cut and paste it and put it in a judgment form. That is how it ends up. Now everybody understands that. [Emphasis this Courts]; Reporters Transcript of Hearing dated March 6, 2026 at 24:12-20, attached to Curtis Decl. as Exh. A.]

9. Instead of continuing to deal with Mr. Becker's bad faith redlined settlement agreements with vague and confusing waiver provisions and argumentative recitals, Plaintiffs simply asked the Court to do what it said it was going to do. Plaintiffs were not required to assume the risk of Mr. Becker's "gotcha" settlement agreement, given the simple terms of the on-the-record settlement, namely, "a payment of $1,600,000 within 30 days, and that will be a complete resolution of the case with no appeal." (Reporters Transcript of Hearing dated March 6, 2026 at 10:23-26, attached to Curtis Decl. as Exh. A.)

10. And when the Court sent around a proposed Judgment laying out the simple terms of the settlement, what ensued were several emails from Mr. Becker to this Court accusing Mr. Curtis of "breaching the duty of good faith and fair dealing." (See Email from Mr. Becker dated April 2, 2026, attached to Curtis Decl. as Exh. G.)

11. Because of the repeated bad-faith positions taken by Defendants' counsel set forth above, and as detailed further in the Declaration of Robert A. Curtis, Plaintiffs were forced to pay Plaintiffs' counsel $8,125 in attorney fees between March 7, 2026, and the filing of the opening brief. [Plaintiffs are waiving the additional 1.8 hours it took reviewing the Opposition and preparing the Reply and the anticipated 1 hour attending the hearing on May