We often hear complaints about the high costs of attorneys fees. So how could anyone negotiating a settlement of a legal dispute forget about them? Apparently, it happens. In a recent Wisconsin Court of Appeals decision, the court held that a party who successfully settled a will dispute could not recover attorney fees despite the existence of a statute that provided for an award of attorney fees to a prevailing party in all appealable contested matters. (In re the estate of Estate of Wolf) Key to the decision was the fact that a settlement, by definition, is not an “appealable contested matter.” If the parties agree to settle, neither side prevails and neither is aggrieved. Therefore, neither side can appeal. The courts obviously have no interest in inspecting every settlement agreement to determine who “prevailed.”
Of course, the settlement agreement could have mentioned attorney fees, but it did not. It would have been a simple matter for the agreement to state whether or not it included attorney fees. By now, it should be routine for attorneys or mediators to raise that issue in settlement negotiations, especially where a fee-shifting statute arguably applies to the subject matter of the dispute. In the absence of a provision in a settlement agreement reserving the right to seek attorney fees in court, parties to the settlement naturally expect that the settlement puts an end to the matter. The moral of this story is that the settlement agreement should specify whether or not it includes attorney fees.