Settlement Agreement Fees Clause Preempted Needs-Based Award, Most Likely.
Marriage of Gurnee, Case No. D059672 (4th Dist., Div. 1 Dec. 6, 2012) (unpublished) is an interesting unpublished case exploring the tension between statutory needs-based fee shifting statutes in the dissolution area and contractual settlement fees clauses that conflict with the statutory regime.
After wife won prior $12,000 in fees and other benefits during the dissolution proceeding, husband appealed. The lower court awarded wife an additional $25,000 in fees so her appellate lawyer could prosecute the appeal of the prior rulings. Husband then appealed this $25,000 fee award.
Husband got a reversal and remand this time around.
The problem here was that the marital settlement agreement (MSA) signed by the parties had a fee clauses only allowing fee recovery once a prevailing party was decided, which invoked Civil Code section 1717 case law that indicated the court might have to decide who pragmatically won or even delay the determination until the final battle was decided. Husband argued that the MSA preempted the rights to needs-based fees, while wife contended that the MSA only supplemented, but did not supplant, needs-based fees.
The appellate court, after having to wade through “law of the case” issues that were decided against husband, eventually determined that the MSA prevailing party language required a remand to see who actually did win. After all, a party can expressly or impliedly waive needs-based statutory fee entitlement, which seemed likely under the MSA. So, on remand, the appellate court said that the trial judge would have to re-sort things, especially given that wife did not win all of her relief but certainly did win a substantial amount.