Lower Court Erroneously Interpreted the Clause Too Narrowly.
Lasertone Corp. v. E.S.E Electronic, Case No. B248908 (2d Dist., Div. 2 June 17, 2014) (unpublished) involved a fight over enforcement of a settlement with a fees clause. After a lower court granted plaintiff’s motion to enforce a settlement agreement, the defense appealed and lost on the merits of the appeal. However, the lower court refused to award plaintiff $80,000 in requested fees after granting the motion which led to the first appeal, a fee denial determination never challenged by plaintiff. After the appellate win, plaintiff moved to recover fees and costs on appeal as the winner under the settlement agreement fees clause.
The lower court denied the request, finding the fee clause was narrow and the prior denial determination was binding in the second instance.
The appellate court reversed. The fee clause was broader than the lower court thought, with the provision saying plaintiff was entitled to fees if it was “required to defend any action or proceeding, the defense to which is based on any provision” of the settlement agreement—with defending against the defense prior appeal falling within the ambit of this contractual language. Also, the prior denial did not impact the subsequent request for appellate fees and costs.