Title: WHITEHORSE v. JOHNSON

State: oklahoma

Issuer: Oklahoma Supreme Court

Document:

WHITEHORSE v. JOHNSON  WHITEHORSE v. JOHNSON 2007 OK 11 156 P.3d 41 Case Number: 101957 Decided: 02/27/2007 THE SUPREME COURT OF THE STATE OF OKLAHOMA MANILLA WHITEHORSE, Administratrix of the Estate of Roland Noah Whitehorse, Deceased, Plaintiff/Appellant, v. SUSAN JOYCE JOHNSON and JANET LAURA TIPPECONNIC, Defendants/Appellees. CERTIORARI TO THE COURT OF CIVIL APPEALS, DIVISION III Honorable William C. Hetherington, Jr., Trial Judge ¶0 The appellant, Manilla Whitehorse, as Administratrix of her father's estate, filed a lawsuit against her sisters. Whitehorse sought an accounting of the proceeds of approximately $35,000.00 worth of property allegedly sold by the sisters acting pursuant to their status as their father's attorneys in fact. The parties entered into a settlement agreement which was approved by the trial court in a journal entry. Subsequently, Whitehorse filed a motion for attorneys' fees and costs, arguing that the sisters had failed to satisfy their obligations under the settlement agreement. The trial court denied the motion and the Court of Civil Appeals affirmed. We hold that when a settlement agreement which provides for attorneys' fees and costs in the event of a breach culminates in a court-approved judgment and is violated, the non-breaching party is entitled to reasonable attorneys' fees and costs. CERTIORARI PREVIOUSLY GRANTED; COURT OF APPEALS OPINION VACATED; TRIAL COURT REVERSED AND REMANDED WITH DIRECTIONS. Robert J. Haupt, Charles W. Wright, Oklahoma City, Oklahoma, for Plaintiff/Appellant. O. Joseph Williams, Norman, Oklahoma, for Defendants/Appellees. KAUGER, J.: ¶1 The issue presented is whether a party may recover attorneys' fees and costs pursuant to a court-approved agreed judgment. We hold that when a settlement agreement which provides for attorneys' fees and costs in the event of a breach culminates in a court-approved judgment and is violated, the non-breaching party is entitled to reasonable attorneys' fees and costs. FACTS ¶2 On August 26, 1998, the appellant, Manilla Whitehorse, the daughter of Roland Noah Whitehorse and Administratrix of his estate (Whitehorse) filed a lawsuit against her sisters, the appellees, Susan Joyce Johnson and Janet Laura Tippeconnic, (collectively sisters). Whitehorse alleged that the sisters, acting under their authority as attorneys in fact, sold some of her father's real property shortly before his death and improperly retained the proceeds of approximately $35,000.00. She sought an accounting of the proceeds. ¶3 On October 5, 2004, before the cause was to proceed to trial, the trial judge encouraged the parties to resolve their issues. Later that day, the parties agreed on a settlement, which was memorialized as a journal entry on November 22, 2004. The sisters agreed to: 1) judgment in the amount of $35,396.50; 2) cooperate in sharing and exchanging family photographs; 3) make available for one another the use of molds of their father's sculptures; 4) donate certain property; and 5) resolve all other pending litigation. The agreement provided that if the sisters complied with the settlement agreement the judgment against them would be reduced to $18,000; ¶4 On January 19, 2005, Whitehorse filed a Motion to Tax Attorneys' Fees and Costs arguing that because the sisters failed to fulfill the terms of the journal entry, she was entitled attorneys' fees and costs. Whitehorse also insisted that because she sought a simple accounting of the funds, attorneys' fees were recoverable pursuant to ¶5 Whitehorse appealed, and on August 18, 2006, in an unpublished opinion, the Court of Civil Appeals affirmed, determining that §936 was inapplicable and that the judgment was not a contract. We granted certiorari on November 20, 2006. ¶6 WHEN A SETTLEMENT AGREEMENT WHICH PROVIDES FOR ATTORNEYS' FEES AND COSTS IN THE EVENT OF A BREACH CULMINATES IN A COURT-APPROVED JUDGMENT AND IS VIOLATED, THE NON-BREACHING PARTY IS ENTITLED TO REASONABLE ATTORNEYS' FEES AND COSTS. ¶7 The sisters argue that: 1) ¶8 We agree that a. A Settlement Agreement Resulting in a Court-Approved Agreed Judgment Has the Same Force and Effect as a Contract. ¶9 The law and public policy favor settlements and compromises, entered into fairly and in good faith between competent persons, as a discouragement to litigation ¶10 We have, in the context of a divorce proceeding, described a consent judgment as an agreement of the parties entered upon the record with the sanction of the court. b. Under the American Rule, Parties to a Contract Can Agree to Pay Attorneys' Fees and Costs. ¶11 The sisters do not dispute that a valid agreement was reached, or that it was incorporated into and made part of the trial court's consent judgment of November 22, 2004. However, they contend that the judgment does not provide for the recovery of attorneys' fees as a matter of law. ¶12 Oklahoma follows the American Rule concerning the recovery of attorney fees. It provides that each litigant pay for legal representation and that courts are without authority to assess attorney fees in the absence of a specific statute or contract. ¶13 In the present cause, the parties were ready to go to trial, but at the request of the trial judge a settlement was reached. ¶14 If the terms of a contract are unambiguous, clear and consistent, they are accepted in their plain and ordinary sense and the contract will be enforced to carry out the intention of the parties as it existed at the time it was negotiated. ¶15 Applying these general principles, we hold that the purpose of the settlement agreement was to avoid a lawsuit and amicably settle the dispute on such terms as the parties agreed. The obvious purpose of including an attorneys' fees clause was to provide, as incentive for timely compliance with the terms of the settlement agreement, that each party would pay its own attorneys' fees and costs. Implicit in the provision is that noncompliance would require payment of the fees and costs to Whitehorse in the event the terms of the contract were not met. The attorneys' fees and costs provision unambiguously required the payment of such fees and costs in the event of a breach. ¶16 However, the trial court made its decision in the context of whether Whitehorse was a prevailing party under CONCLUSION ¶17 Under the American Rule, parties may agree by contract to pay for litigation expenses. CERTIORARI PREVIOUSLY GRANTED; COURT OF APPEALS OPINION VACATED; TRIAL COURT REVERSED AND REMANDED WITH DIRECTIONS. WINCHESTER, C.J., EDMONDSON, V.C.J., LAVENDER, HARGRAVE, OPALA, KAUGER, TAYLOR, COLBERT, JJ., concur. WATT, J., dissents. FOOT