1 The Honorable A. Wallace Tashima, United States Circuit Judge for the Ninth Circuit, sitting by designation. 

## United States Court of Appeals FOR THE EIGHTH CIRCUIT

___________ Nos. 07-1011/1394/1448

___________ Transcontinental Insurance Company; * Transportation Insurance Company, *
* Appellants/Cross-Appellees, * * Appeals from the United States v. * District Court for the * Eastern District of Arkansas. Rainwater Construction Company, * LLC; Timothy Rainwater; Arthur D. * Rainwater; Rickey J. Kitchen, *
* Appellees/Cross-Appellants. *

___________ Submitted: November 15, 2007 Filed: December 5, 2007

___________ Before RILEY, TASHIMA, 1 and SMITH, Circuit Judges.

___________ RILEY, Circuit Judge.
Rainwater Construction Company, LL C (Rainwater) purchased insurance policies from Transcontinental Insurance Company and Transportation Insurance Company, both subsidiaries of CNA Financia l Corporation (collectively, CNA). The insurance policies contained a “Named Driv er Exclusion Endorsement,” which stated2 Scottie and Debbie Lane and Michael and Charlotte Ne w are not parties in this appeal.
-2- that insurance coverage “does not apply to any claims, damage s, expenses or ‘loss’ . . . arising out of the maintenance, operation or use of any ‘auto’ by [Rickey Joseph Kitchen (Kitchen)].” On Oc tober 19, 2005, as Kitchen dr ove a Rainwater truck and trailer over an overpass, th e trailer detached from the truck, crashing into Scottie Lane’s (Lane) truck and seriously inju ring both Lane and Mi chael New (New), a passenger in the truck.

Lane, New, and their respective wives filed suit in the Circuit Court of Craighead County, Arkansas, in cause numbers CV-2006-235(DB) and CV-2006-270(JF) (state court actions). 2CNA defended under a reservation of rights and then filed this declaratory judgment acti on in the United States District Court for the Eastern District of Arkansas in case number 3:06-CV-00083-GH (federal court action). In the federal court action, CNA sought a declaratory judgment that Rainwater’s insurance policies precluded in surance coverage under the Named Driver Exclusion Endorsement for any judgment agai nst Rainwater in the state court actions. The district court determined that Rai nwater’s CNA insurance policies provided coverage because the sole proximate cau se of the accident was “the improperly attached trailer, not Kitchen’s driving.” The district court also ordered Rainwater to submit a request for attorney fees pursuant to Arkansas Code section 23-79-209(a).

CNA then accepted the Lanes’ and Ne ws’ policy limits settlement demand of $2 million. The settlement agreement, in letter form, expressly provided:
Transcontinental Insurance Compa ny and Transportation Insurance Company (CNA) accept your clients’ joint settlement demand of $2 million dollars, payable to the Lane s and News and their counsel, in exchange for a full release and dismissal with prejudice of all claims against CNA and its insureds, Rainw ater Construction Company, LLC, Rickey Kitchen, Sharon Rainwater , Timothy Rainwater, Arthur D.3 Although the settlement agreement did not specifically reference Arkansas cause number CV-2006-270(JF), the parties agree the settlement agreement resolved this case.
-3- Rainwater, asserted in Cause No. 3:06CV00083GH and in Cause No. CV 2006-235(DB), each party to bear their own costs and fees. Mr. Emerson will draft the formal releases and the dismissal documents in the state case. I will immediately advise the district court that the cases have settled and will file with the Eighth Circuit a motion to vacate and dismiss the federal suit. 3
CNA mailed the settlement agreement letter to Rainwater’s attorney and provided a signature block for Rainwater’s attorney’s signature. Rainwater’s attorney signed the settlement agreement on behalf of Rainwater. CNA paid the $2 million settlement.

Thereafter, the district court granted Rainwater’s attorney fees claim in the amount of $23,667.50. CNA appeals the attorney fees award, arguing (1) the settlement agreement required “each party to bear their own costs and fees,” and (2) Rainwater was not entitled to an attorn ey fees award because the district court erred in interpreting Rainwat er’s insurance policies. Rainwater cross-appeals the amount of the attorney fees award.

I. DISCUSSION We review de novo the district court’s interpretation of the settlement agreement. Little Rock Sch. Di st. v. N. Little Rock Sch. Dist. , 109 F.3d 514, 516 (8th Cir. 1997). Because the federal courts have diversity jurisdiction over this case pursuant to 28 U.S.C. § 1332, Northbrook Nat’l Ins. Co. v. Brewer , 493 U.S. 6, 9 (1989), we apply the substantive la w of the State of Arkansas, see HOK Sport, Inc. v. FC Des Moines, L.C. , 495 F.3d 927, 934 (8th Cir. 2007).

Under Arkansas law, settlement agreemen ts are treated as contracts. See Williams v. Davis , 659 S.W.2d 514, 515 (Ark. Ct. App. 1983). “[T]he first rule of-4- interpretation of a contract is to give to the language employed the meaning which the parties intended.” First Nat’ l Bank of Crossett v. Griffin , 832 S.W.2d 816, 819 (Ark. 1992). “When contracting parties express their intention in a written instrument in clear and unambiguous language, it is our duty to construe the written agreement according to the plain meaning of the language employed.” C. & A. Constr. Co. v. Benning Constr. Co. , 509 S.W.2d 302, 303 (Ark. 1974). “T o arrive at the intention of the parties to a contract, courts may acquaint themselves with the persons and circumstances and place themselv es in the same situation as the parties who made the contract.” Schnitt v. McKellar , 427 S.W.2d 202, 207 (Ark. 1968).

Rainwater asserts the settlement agreem ent is ambiguous regarding the release of Rainwater’s attorney fees claim. Although the settlement agreement could have conclusively resolved this issue by providi ng “each party to bear their own costs and attorney fees,” simply because the settlement agreement could have been written with exact clarity does not imply the settlement agreement is ambiguous. Rather, where the only fees in dispute were Rainwater’s attorney fees , the settlement agreement is only susceptible to one reasonable interpretati on. In this context, the plain meaning of “fees” refers to Rainwater’s attorney fees. Under these circumstances, the settlement agreement unambiguously and sufficiently provided that Rainwater released its attorney fees claim.

Rainwater also asserts the settlement agreement did not resolve the federal litigation because (1) CNA accepted the settleme nt offer of the Lanes and News, who had no authority to release Rainwater’s atto rney fees claim; and (2) Rainwater would not have gratuitously released its attorney fees claim. In writing the settlement agreement letter, CNA expr essly referenced the fede ral action’s case number and submitted the settlement agreement to Rainw ater’s attorney. The first addressee on the settlement agreement letter was Rainwat er’s attorney, followed by the attorneys for the Lanes and the News. The letter expr essed a payment of $2 million to the Lanes and the News “in exchange for a full release and dismissal without prejudice of all4 The settlement agreement letter directed, “Please sign at the bottom to acknowledge that this comports w ith your clients’ understanding.”

5 We express no opinion regarding the propriety of the district court’s interpretation of the insurance policy.
-5- claims against CNA” asserted in the federal action. Rainwater’s attorney received the letter and signed the acceptance signature bl ock on behalf of Rainwater, accepting the terms of the settlement agreement. 4By entering into the settlement agreement, Rainwater released its attorney fees clai m in exchange for the settlement of the Arkansas state court litigation (in which Rai nwater potentially faced liability for any judgment in excess of the policy limits) and the dismissal of CNA’s appeal of the district court’s judgment (in which Rainwater risked reversal of the district court’s coverage decision).

II. CONCLUSION Because we conclude Rainwater released its attorney fees claim, we need not consider CNA’s and Rainwater’s other arguments. 5 We reverse and vacate the district court’s award of attorney fees.

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