Do all parties have to sign a settlement agreement?

When settling a dispute, parties often include in their agreement a provision available under California Code of Civil Procedure section 664.6 that facilitates the summary enforcement procedure to enforce the settlement agreement and have judgment entered on its terms. If you do so, do the parties have to sign the settlement agreement?

In Levy v Superior Court (1995) 10 Cal.4th 578, the California Supreme Court considered whether a court could enter judgment under section 664.6 where a written stipulation to settle had been signed by a litigant’s attorney but not by the litigant personally. Because section 664.6 expressly “requires the ‘parties’ to stipulate in writing . . . that they have settled the case[,]” the Court concluded that “the term ‘parties’ as used in section 664.6 . . . means the litigants themselves, and does not include their attorneys of record.” (Id. at pp. 585-586.) Traditional agency analysis has historically been rejected as a means of satisfying the party signature requirement of section 664.6. (See Gauss v GAF Corp (2002) 103 Cal.App.4th 1110, 1119; Murphy v. Padilla (1996) 42 Cal.App.4th 707, 716.)

However, the California Legislature recently changed that. On September 29, 2020, Governor Newsom signed AB 2723, amending section 664.6 to provide that a written settlement agreement may also be signed by an attorney who represents a party, or, if the party is an insurer, by an agent who is authorized in writing by the insurer to sign on the insurer’s behalf. The amendment takes effect on January 1, 2021; until then, for a written settlement agreement to be enforceable under section 664.6, you must have all parties sign it.