"Customary Provision Allowing for the Award of Legal Fees in Any Action on a Contract" Was Missing Here
This case presents a common issue: whether a prevailing party must seek fees from the arbitrator or from the trial court. Here, the issue was resolved by express, non-standard language in a settlement agreement. DeSena v. Richert, C070461 (3d Dist. May 13, 2013) (Butz, J., author 3:0).
Plaintiff settled a neighbor dispute during mediation. The settlement agreement provided that the mediator could resolve future disputes acting as an arbitrator. Sure enough, disputes arose, the mediator cum arbitrator resolved the disputes in favor of Plaintiff, and Plaintiff was thus the prevailing party. As the prevailing party, Plaintiff expected to recover fees based on a contractual fee provision in the settlement agreement. Consequently, Plaintiff appealed after the superior court judge denied her motion for legal fees incurred to confirm the ruling of the mediator acting as an arbitrator.
Plaintiff ended up cornered by the language of the settlement agreement. "The intent reflected in the terms of the . . . settlement . . . was for the parties to bear their own costs and legal fees except in matters relating to the enforceability and interpretation of the settlement agreement (undoubtedly as a way to avert any subsequent truculence about settling the dispute). This exception, however, is limited to issues of enforceability and interpretation submitted to the mediator for binding arbitration, as to which the mediator possesses sole discretion to award costs or legal fees." Here, because the Plaintiff did not submit the fee issue to the arbitrator, Plaintiff was unable to recover fees. Focusing on the language of the settlement agreement, the Court of Appeal pointed out," this is not the equivalent of the customary provision allowing for the award of legal fees in any action on a contract . . . . "