Nick A. Mosich, Plaintiff-appellant, v. Mosich-vilicich, a California Corporation; Mauritania, Afishing Vessel, Defendant-appellees, 108 F.3d 338 (9th Cir. 1997)

MEMORANDUM^* 

This appeal requires us to examine the language of a settlement agreement between the parties reached in another matter. The district court concluded that the parties' agreement should be interpreted as a release of liability in this case. We disagree. The plain language of the agreement supports Mosich's position that he agreed only not to execute any judgment against the defendants personally. We therefore reverse the district court's entry of summary judgment and remand for further proceedings.

Settlement agreements are treated under California law as contracts. See United Commercial Ins. Serv., Inc. v. Paymaster Corp., 962 F.2d 853, 856 (9th Cir.) (applying California law), cert. denied, 506 U.S. 1022 (1992); In re Marriage of Hasso, 280 Cal. Rptr. 919, 922 (Cal.App.), rev. denied (Aug. 15, 1991). In California, the intent of the parties determines the meaning of the contract. Cal.Civ.Code § 1636. The district court concluded that the intent expressed by the parties' agreement was to release the defendants from liability in this personal injury action. The court relied on language in the settlement agreement releasing defendants from any "obligation to make any payment to Nick Mosich or his heirs or assigns" that may arise from the personal injury action.

That language, however, is immediately followed by the proviso that the agreement "shall not be deemed a release by Mosich of such personal injury claim." Moreover, any doubt about the parties' intent is clearly resolved by the language of a subsequent release agreement that provides that Mosich's "personal injury claims ... are not waived or released." Had the parties agreed that Mosich would abandon his claims or waive his right to proceed in his personal injury action, neither the settlement agreement nor the release would have expressly preserved his right and his claims.

We conclude that the language of both the settlement and release evidence the parties' clear intent to allow Mosich to pursue his personal injury claim. Both preserve Mosich's claim but restrict his ability to enforce any resulting judgment against the defendants personally. Mosich has in effect agreed to a covenant not to execute against the insured. This interpretation of the parties' intent is consistent with state law that allows a party who obtains a judgment against an insured to sue the insurer directly rather than collect from the insured. See Cal.Ins.Code § 11580(b) (2).

REVERSED and REMANDED.