Party Failed To Show He Participated In Upfront Good Faith Settlement Discussions Or Mediation After Entry Into The Settlement Agreement.
In Harris v. Bonander, Case No. F071886 (5th Dist. Jan. 19, 2017) (unpublished), a settlement agreement was reached between parties to a trust dispute except for one "carve out" claim, which was litigated and lost by one party, who then completely changed the tide by appealing and obtaining a reversal as a matter of law. That party felt he prevailed and moved for attorney's fees under a settlement agreement fees clause, but the trial court denied them based on the perception he did not prevail.
The appellate court affirmed, but on a different basis (in line with the rule that a decision is correct even if grounded in different reasoning).
In the settlement agreement, the fee clause had a contractual condition precedent: no fees unless a prevailing party "makes a satisfactory showing that they first initiated and participated in good faith in informal settlement discussions or mediation." Here, the fee claimant could not show this occurred, despite some creative arguments otherwise. It made no difference if the fee claimant did prevail because litigating the release issue instead without satisfying the ADR condition precedent was not compliant with the fee clause. Fee claimant then argued there were settlement negotiations before entry into the settlement agreement, the appellate court rejected that this satisfied the condition precedent to attempt settlement/mediation efforts after entry into the settlement agreement when a subsequent dispute arose. Finally, even though fee claimant tried to resolve the amount of fees under his fee motion through compromise discussions, this exercise did not satisfy the merits-oriented condition precedent that this should have done much earlier in time when the release issue was being litigated.