923 F2d 862 Malzahn v. Allstate Insurance

923 F.2d 862

Unpublished Disposition

NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.

John Paul MALZAHN, Plaintiff-Appellant,
v.
ALLSTATE INSURANCE, Defendant-Appellee.

No. 90-55357.

United States Court of Appeals, Ninth Circuit.

Submitted Dec. 6, 1990.*
Decided Jan. 16, 1991.

Before JAMES R. BROWNING, PREGERSON and LEAVY, Circuit Judges.

1

MEMORANDUM**

2

John Paul Malzahn appeals from the district court's entry of summary judgment in favor of Allstate Insurance Company on his underlying statutory bad faith action. We review de novo, see Blanton v. Texaco Refining & Mktg., Inc., 914 F.2d 188, 190 (9th Cir.1990), and we affirm.

3

In 1988, the Supreme Court of California prospectively abolished all so-called "Royal Globe" actions,1 i.e., statutory bad faith lawsuits brought against insurers for alleged violations of California's Unfair Practices Act under Cal.Ins.Code Sec. 790.03(h). Moradi-Shalal v. Fireman's Fund Ins. Cos., 46 Cal.3d 287, 304-05, 250 Cal.Rptr. 116, 126-27, 758 P.2d 58, 68-69 (1988). Because a considerable number of such actions were pending in the California courts at the time, however, the Court in Moradi-Shalal held that those pending "Royal Globe" lawsuits could continue if they were based on underlying judgments that were both final and involved actual determinations of an insured's liability, and had been filed prior to Moradi-Shalal 's becoming final. 46 Cal.3d at 305, 311, 250 Cal.Rptr. at 127, 131, 758 P.2d 58, 69, 74. Moradi-Shalal became final on October 17, 1988. Tricor Cal., Inc. v. Superior Court (State Compensation Ins. Fund), 220 Cal.App.3d 880, 885, 269 Cal.Rptr. 642, 644 (1990).

4

Under California law, a stipulation between the parties settling their lawsuit does not become a judgment until it has been approved by the court and entered on the docket. See Cal.Civ.Proc. Sec. 664.6 ("If parties to pending litigation stipulate ... for settlement of the case ... the court, upon motion, may enter judgment pursuant to the terms of the settlement"). A recent California Supreme Court decision construing section 664.6 in the context of a post-Moradi-Shalal "Royal Globe" action held as follows:

5

[A] stipulated judgment is indeed a judgment; entry thereof is a judicial act that a court has discretion to perform. Although a court may not add to or make a new stipulation without mutual consent of the parties, it may reject a stipulation that is contrary to public policy or one that incorporates an erroneous rule of law. "While it is entirely proper for the court to accept stipulations of counsel that appear to have been made avisedly, and after due consideration of the facts, the court cannot surrender its duty to see that the judgment to be entered is a just one, nor is the court to act as a mere puppet in the matter."

6

California State Auto Ass'n Inter-Ins. Bureau v. Superior Court (Cooper), 50 Cal.3d 658, 664, 268 Cal.Rptr. 284, 287, 788 P.2d 1156, 1159 (1990) (citations omitted). Thus, a stipulation settling an action becomes a stipulated judgment only when "the court agrees to enforce [it] as a judgment." Cooper, 50 Cal.3d at 663, 268 Cal.Rptr. at 286, 788 P.2d 1156, 1158.

7

The stipulation signed by Malzahn, Frederick Luhnow, and their respective attorneys on May 11, 1988, was merely lodged with the court at that time; it was neither approved by the court nor entered as a judgment for some ten months, well after Moradi-Shalal became final. There being no final judgment in effect when Malzahn filed the instant "Royal Globe" action nor when Moradi-Shalal became final, the district court correctly granted summary judgment in favor of Allstate.

8

AFFIRMED.

*

The panel unanimously finds this case suitable for submission on the record and briefs and without oral argument. Fed.R.App.P. 34(a) and Ninth Circuit Rule 34-4

**

This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Circuit Rule 36-3

1

So named for the case of Royal Globe Ins. Co. v. Superior Court, 23 Cal.3d 880, 153 Cal.Rptr. 842, 592 P.2d 329 (1979), which provided for statutory bad faith actions against insurers under Cal.Ins.Code Sec. 790.03