New California Settlement Case: 7-1-25
New CA Settlement Case
Can a derivative action be settled without
express trial court approval?
Last month, the California Court of Appeal decided this important issue:
Norman v. Strateman et al. (2025) __ Cal.App.5th __, 2025 WL 1718303: The Court of Appeal reversed the trial court’s order granting defendants’ motion to enforce a settlement agreement and its order denying plaintiff’s motion to set aside a settlement agreement. After defendants closed Intersango, a start-up cryptocurrency exchange, plaintiff filed a derivative action alleging numerous causes of action against defendants. Defendants later filed a derivative cross-complaint against plaintiff. Before trial the parties entered into a settlement agreement and put it on the record before a settlement judge, not the trial judge. Neither the settlement judge nor the trial judge expressly approved the settlement of the case. When the parties later filed their motions to set aside and enforce the settlement, the trial judge granted the motion to enforce the agreement. The trial court reasoned that because all three of the shareholders were involved in the settlement and derivative lawsuits were designed to protect shareholders, the settlement agreement did protect the shareholders. The Court of Appeal disagreed. In derivative actions trial court approval of the settlement is required, and the trial court must evaluate factors similar to those considered in class action settlements. Because no evidence was presented that the settlement judge or the trial judge undertook a review, the trial court’s order was reversed and the case was remanded. (C.A. 1st, June 20, 2025.)
I handle a few select civil cases where I represent plaintiffs or defendants in business, insurance bad faith, personal injury, real property and wrongful death actions. Using my experience as a California civil trial lawyer since 1980, and a member of the American Board of Trial Advocates since 1995, my goal is to get each client the best possible result. My clients get the benefit of a highly experienced civil trial lawyer, with big firm experience, providing small firm attention and reasonable rates. To discuss a potential case, email me at [email protected], or call me at (619) 990-4312.
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I train lawyers, who have tried no cases or a few cases, how to strategically prepare for and try civil jury trials.
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New lawyers don't know how to practice law and won't become competent for several years. They need training, but most partners are too busy to train associates. I solve this problem by training law firm associates to accelerate their mastery of the practice of law and quickly become valuable members of the law firm.
To get these training services, call/text me at (619) 990-4312 or email me at [email protected].
Until my next blog post, do well and be well.
Best regards,
Monty A. McIntyre, Esq.
Civil Trial Attorney
Podcaster: Trial Alchemy™
Publisher: California Case Summaries™
CA Civil Trial Attorney Since 1980
ABOTA Member Since 1995
Past President San Diego County Bar Assn., SD ABOTA Chapter
Phone: (619) 990-4312. Email: [email protected]
