Reversing a trial court's entry of judgment based upon a settlement agreement entered into at mediation, a California appellate court held that, for a settlement agreement entered into during mediation to be valid, the parties themselves must sign the settlement agreement rather than their attorneys.

In Blix Street Records, Inc. v. Gelbard, No. B196648, 2008 WL 331384 (Cal. Ct. App. Feb. 7, 2008), Eva Cassidy sang and wrote songs until her death in 1996. Her parents inherited the rights to Eva's work and entered into an exclusive licensing agreement with Blix Street. A dispute arose concerning royalties from a film the Cassidys planned to produce about their daughter's life. In 2004, Blix Street sued the Cassidys and the Cassidys countersued.

After jury selection had begun, the parties participated in a day-long mediation. All but two of the parties were present at the mediation. However, the absent parties had their attorneys, whom they had authorized to act on their behalf, attend the mediation. The parties reached a settlement agreement at the mediation, which they presented to the judge. The attorneys for the parties informed the judge on the record that they had settled the case. However, despite his attorney signing on his behalf, one of the parties absent from the mediation had not signed the agreement and refused to release a claim until he received compensation.

The Cassidys moved the court for entry of judgment based on the settlement agreement. Blix Street opposed the motion, arguing that no settlement existed because one party had not signed the settlement agreement, though his attorney had signed the agreement. The trial court granted the motion and Blix Street appealed.

Reversing the trial court, the Court held that the Settlement Agreement was unenforceable because it lacked the necessary signatures. Section 664.6 of the California Code of Procedure states: "If parties to pending litigation stipulate, in a writing signed by the parties outside the presence of a court…for settlement of the case…the court, upon motion, may enter judgment pursuant to the terms of the settlement." California courts have held consistently that "signed by the parties," means the litigants themselves have signed, rather than someone else on their behalf.

Here, the Court found that several parties did not originally sign the settlement agreement. Further, even the party seeking to enforce the settlement agreement conceded that one party had qualms about signing the settlement agreement. Moreover, the document itself did not even contain a section for the various parties to sign. Finally, the Court rejected the argument that an attorney can sign a mediation agreement because section 664.6 requires the parties themselves to sign a settlement agreement, rather than an attorney or proxy.