That Vacated $77,980 In Attorney’s Fees And $12,144.45 In Costs In Favor Of Settling Plaintiff.
In Vasquez v. Jameson Management, Inc., Case No. D077598 (4th Dist., Div. 1 May 20, 2021) (unpublished), plaintiff/former employee and defendant/former employer tentatively agreed to a letter settlement on the eve of a FEHA disability trial by which financially distressed defendant agreed to settle for $12,000, but nothing in the letter contained a discussion about allocation of attorney’s fees—although earlier discussions certainly showed this was a material term. (In earlier discussion, some proposals left the fees issue silent and others indicated fees were included in the offers.) A lower court subsequently confirmed the letter settlement, awarding plaintiff $77,980 in attorney’s fees and $12,144.25 in costs in addition to the $12,000 base settlement amount. (Plaintiff had requested $222,230 in fees and $12,144.25 in costs.)
The 4/1 DCA reversed, finding there had been no mutual asset to any attorney’s fees allocation based on the specific circumstances. Fee allocation was a material term, but there was no material meeting of the mind on this important issue. The appellate court questioned whether CCP § 998 “silence” cases could be applied in a settlement agreement context. In this case, the absence of any reference to fees in the letter agreement demonstrated no enforceable agreement was reached, such that it was improper for the lower court to supply a missing material term. That means the judgment was reversed and the parties returned to status quo position.
However, the appellate panel was careful to observe that this was driven by the specific factual circumstances of the case—there was no broad-brush implication that silence regarding fees in a settlement agreement necessarily negated contract formation or that attorney’s fees were always a material term. It depends on the facts!
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