Court Opinion

ID: 2715149
Source: CourtListenerOpinion
Date Created: 2014-08-06 17:19:08.902055+00
Date Added: 2024-06-11T09:51:08.086462
License: Public Domain

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    IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

                                             DIVISION II

ERIC R. ENGELLAND, and CHARLENE C.                                           No. 43420 -2 -II
ENGELLAND, a marital community,

                               Appellants,

       V.

FIRST HORIZON HOME LOANS, a
division of FIRST TENNESSEE BANK
NATIONAL ASSOCIATION, a District of
Columbia corporation licensed to do business
in Washington state, and QUALITY LOAN
SERVICE CORP. OF WASHINGTON, a                                         UNPUBLISHED OPINION
Washington state corporation,

       WORSWICK, C. J. —     In this mortgage dispute, Eric and Charlene Engelland ( collectively,

Engelland) appeal from an order enforcing a settlement agreement with First Horizon Home

Loans. Engelland argues that the trial court erred by ( 1) ruling that the parties entered into the

settlement agreement and ( 2) awarding attorney fees to First Horizon. We agree that the trial

court erred, vacate its order enforcing settlement and attorney fee award, and.remand for further

proceedings.   We further   deny   each   party'   s request   for attorney fees   on appeal.
No. 43420 -2 -II

                                                       FACTS

A.     Background

       In two loans from First Horizon, Engelland borrowed a total of $810, 000 to finance the

purchase of and    improvements to       residential   property in Silverdale, Washington.'       Both loans

were secured with deeds of trust in the property. First Horizon assigned servicing of the loans to

Nationstar Mortgage.

       Engelland and First Horizon executed a loan modification agreement in 2007 and a

special forbearance agreement in 2009. But Engelland defaulted, and a trustee' s sale was

scheduled for June 17, 2011.

        On June 6, 2011, Engelland commenced this action by filing a six -count complaint

against First Horizon, alleging ( 1) wrongful institution of a nonjudicial foreclosure; 2 ( 2)
violations   of the Consumer    Protection Act,       chapter   19. 86 RCW; ( 3) breach   of contract; ( 4)   unjust

enrichment; (   5) promissory estoppel; and ( 6) fraud in the inducement. On June 15, Engelland

moved for a temporary restraining order to restrain the trustee' s sale. After a contested hearing,

the trial court restrained First Horizon from conducting the trustee' s sale until July 1.

  The first loan   was   for $650, 000   and   the   second   for $ 160, 000.

2 Engelland also named Quality Loan Service Corp. of Washington as a defendant and alleged it
was liable under this count. But Engelland stipulated to the dismissal of Quality Loan with
prejudice. Quality Loan is not a party to this appeal.

                                                          0)
No. 43420 - -II
          2

        On June 20, Engelland further moved for a preliminary injunction restraining the

trustee' s sale. The trial court denied this motion and Engelland' s subsequent motion to

reconsider.

        On August 2, Engelland filed a first notice of appeal, which was treated as a petition for

discretionary review, seeking our review of the order denying the preliminary injunction. Later,

on December 21, the parties stipulated that they had " reached an understanding on the
                      3
underlying dispute. "     Br. of Resp' t., App. A at 1 ( Joint Mot. for Withdrawal / ismissal of Pet.
                                                                                   D

for Discretionary Review, Engelland v. First Horizon Home Loans, No. 42440 -1 - II (Wash. Ct.

App.   Dec. 21, 2011)).   Based on that stipulation, our commissioner dismissed Engelland' s

petition for discretionary review. See RAP 18. 2.

B.       Communications Regarding a Settlement Agreement

         Shortly after Engelland sought discretionary review, counsel for both parties began

negotiating a settlement agreement to ( 1) resolve Engelland' s claims against First Horizon and

 2) modify both loans. During these negotiations, the trustee' s sale was postponed and

ultimately cancelled.

         On August 10, 2011, First Horizon' s counsel, Andrew Yates, transmitted a financial

worksheet that reflected its offer to modify the first loan only. On August 12, Engelland' s

attorney, Chad Ahrens, replied with a counteroffer to modify both loans and to dismiss

3 It is clear that at the time of this stipulation, the parties had not executed an agreement settling
the underlying dispute.

                                                     3
No. 43420 -2 -II

Engelland' s claims. Over several weeks that followed, First Horizon developed a

counterproposal.

         After a phone call between counsel on September 26, Ahrens confirmed by e -mail that

Engelland " authorized me to request that we proceed to draft settlement documents based on the

terms discussed."       Clerk' s Papers ( CP) at 59. Ahrens and Yates also agreed to execute a " CR 2A

agreement" if it was necessary. CP at 58 -59.

         On October 12 and again on October 19, Ahrens asked when Yates planned to transmit

the settlement documents they had discussed. On November 28, Yates transmitted two

documents     on   behalf of First Horizon: ( 1) a draft loan modification agreement addressing the

first loan only and ( 2) a draft settlement agreement addressing Engelland' s claims and the second

loan. Yates noted that the draft settlement agreement " contemplate [d] a $ 250 payment by your

clients on   Dec. 1,"   which was three days away. CP at 61.

         By   December 27, First Horizon had     not received a response.   Yates   e- mailed   Ahrens, " If

I do not hear from you in writing tomorrow I will assume that [ Engelland] does not accept the

proposed loan modification and settlement and we will seek appropriate relief from the court and

advise   the trustee accordingly."    CP at 75. The following day, Ahrens responded by ( 1)

proposing changes to the draft settlement agreement and ( 2) stating that Engelland requested no

changes to the loan modification agreement. Ahrens further wrote,

         While my clients intend on proceeding with the settlement and corresponding
         release documents, please note that, until such time as the settlement agreement is
         executed, they proceed without waiver of any rights afforded by the law ....      I

         mention this particularly in light of your reference to nonjudicial foreclosure

                                                     M
No. 43420 -2 -II

       below and not because I anticipate that my clients will fail to proceed with
       settlement.

CP at 74.

       On January 18, 2012, Yates e- mailed Ahrens a " redline" version of the proposed

settlement agreement. CP at 88. The redline version included some of Engelland' s proposed

changes, but it excluded others that were unacceptable to First Horizon.

        On February 3, Yates also e- mailed a completely revised loan modification agreement

containing new commencement dates and terms that were " slightly more favorable to
                4
 Engelland]. "      CP   at   101.   Unlike the draft that preceded it, the revised loan modification

agreement was prepared by Nationstar, the loan servicer.

       Nationstar communicated directly with Engelland while Ahrens and Yates were

negotiating on behalf of their clients. In August 2011, a Nationstar representative called

Engelland to discuss a potential loan modification and followed up by e- mailing Engelland an

application.__ hrens asked
             A                       Yates to   confirm   that First Horizon— not Nationstar —would handle

any loan    modification.       Yates   asked   First Horizon " to   confirm and   clarify," but the record does

not show whether First Horizon did so. CP at 165.

        Further, in January 2012, Nationstar sent Engelland a mortgage loan statement showing,

among other things, a negative escrow balance of $33, 566. Although Engelland had expected

that the loan modification agreement would capitalize the negative escrow balance, Nationstar' s

4 The revised loan modification agreement contained a significantly lower interest rate beginning
in the seventh year and continuing until maturity.

                                                              5
No. 43420 -2 -II

statement caused Engelland to question whether his potential settlement agreement with First

Horizon would prevent Nationstar from collecting on the negative escrow balance. According to

Engelland, inconsistent information provided by First Horizon and Nationstar " contribute[ d] to

our overall lack of trust in dealing with [First Horizon] and [ explained] why we insist on any

proposed    settlement agreement            including    clear and express       terms."   CP at 178.

          On   February         13, Yates   e- mailed   Ahrens   and    declared, "[ W] e need to get the settlement

agreement and       loan    mod executed        this   week."    CP at 129. On February 17, Ahrens replied,

          M]y clients have authorized me to indicate that they will execute the attached
          versions of the settlement agreement and loan modification agreement ( provided
          that   the     settlement      agreement       dates    are [   again]    updated,    e.   g.   payment   to
          commence         3/ 1/ 12)   as soon as      the   negative   escrow     balance is   addressed.     In the

          interest of expediting resolution and anticipating that the escrow balance will be
          accounted for and addressed in short order by [ First Horizon],       I will have
           Engelland] execute a clean version of the settlement agreement ( with adjusted
          dates) and loan modification agreement to be released upon resolution of the
          above escrow impound issue.

CP at 128.

          In a February 27 phone conversation between Ahrens and Ronald Beard, another attorney

representing First Horizon, Beard answered each of Ahrens' s remaining questions about the

terms of the settlement agreement and the status of the negative escrow balance. Yates then

transmitted an updated settlement agreement to Ahrens and requested that Engelland sign

 ASAP."        CP   at   128.    The updated settlement agreement called for monthly payments to begin

 March 1, [ 2012],"         and stated that the agreement would take effect upon delivery of signed

copies.    CP at 133

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No. 43420 -2 -II

            In an e -mail also sent February 27, Ahrens thanked Beard for addressing the negative

escrow      balance issue       and   further     replied, "      While I can' t promise producing [ Engelland' s]

signatures        today, I   can promise         that I'   ll   get   back to   you   by   the   end of   the   day."   CP   at   141.   But

Ahrens did not get back to Beard and did not produce Engelland' s signature on the updated

settlement agreement.

            On March 12, Beard e- mailed Ahrens to state that all issues were resolved and to ask,

            do                   to   delay finalizing            this                                    the terms are agreed ?" CP
 Why              you continue                                           settlement when all of

at   141.    In a phone call with Yates later that day, Ahrens stated for the first time that Engelland
                                                                                                      5
wanted       to   delay the   commencement             date for        payments until       June 1.

            By e -mail, Yates responded that First Horizon considered June 1 unacceptable and would

therefore "        file   a motion   to   enforce    these      agreements."          CP at 144. Ahrens denied that any

settlement agreement had been executed because none of the parties signed it, none of the

attorneys for the parties signed it, and Engelland had not authorized Ahrens to sign it.

            Ahrens further insisted that Engelland' s concern about the negative escrow balance was a

legitimate concern about " the mixed and confusing communications our clients have received

from [ First Horizon]           and   Nationstar." CP at 173.                   Lastly, Ahrens repeated his proposal of a

settlement agreement and                  loan   modification agreement with payments                      to   commence      June 1.     It

appears from the record that counsel for First Horizon did not respond.

5 Engelland later averred that June 1 was an appropriate date because his wife had begun
receiving aggressive treatment for cancer.

                                                                           7
No. 43420 -2 -II

C.       The Trial Court' s Order Enforcing Settlement

         First Horizon moved to enforce the settlement agreement, asserting that the parties " have

reached a   full   and   final   agreement   to   settle   this   case"   but that Engelland " simply    refuse[   d]" to

execute the agreement as promised. CP at 27 -28. After hearing argument from counsel, the trial

court determined on the basis of declarations and attached documents that the parties executed

both the loan modification agreement and the settlement agreement as of March 1, 2012.

         The trial court explained,

         The February 17th e -mail from Mr. Ahrens bound his clients to the agreement
         once      the    escrow     issue   was     settled.        That [    agreement]     had   a March     1 st
         commencement            date.   It was as clear as anything from a lawyer in negotiations
         can   be   clear     that this was the agreement             except [ as   to] the   escrow   issue.   The
         escrow     issue      was resolved [         Consequently, there is a deal, and I
                                                  eventually]....
         am going to hold that the Engellands are bound to it.

Verbatim Report          of   Proceedings ( VRP) ( Apr.       2, 2012) at 29. Observing that Engelland had

already missed two payments due March 1 and April 1, the trial court further directed First

Horizon   to make a _ reasonable         accommodation             for their   missed payments. _   VRP ( Apr. 2, 2012

at 30.

         In addition, First Horizon requested attorney fees pursuant to the settlement agreement' s

attorney fee provision. The trial court awarded First Horizon $7, 380 in reasonable attorney fees

incurred in enforcing the settlement agreement.

         Engelland       appeals.
No. 43420 - -II
          2

                                                     ANALYSIS

                             1. ENFORCEABILITY OF THE SETTLEMENT AGREEMENT

          Engelland argues that the trial court erred by enforcing the settlement agreement because

the agreement was not properly executed. First Horizon disputes this claim and further argues,

as a threshold matter, that Engelland is equitably estopped from denying the existence of an

enforceable settlement agreement. We reject First Horizon' s threshold argument and agree with

Engelland that the trial court erred by enforcing the settlement agreement.

A.        Equitable Estoppel

          First Horizon argues that Engelland is equitably estopped from denying the existence of

an enforceable settlement agreement because Engelland stipulated to the dismissal of his petition

                                6
for   discretionary   review.       We disagree.

          Equitable estoppel allows a court to hold a party to a representation it made when

inequitable consequences would otherwise result to another party who has justifiably and in good

faith   relied on   the   representation.   Wilson   v.   Westinghouse Elec.    Corp.,      85 Wn.2d 78, 81, 530

P. 2d 298 ( 1975). Equitable         estoppel   has three   elements: (   1) an admission, statement, or act that

is inconsistent     with a subsequent assertion; (        2) an action by another party in reasonable reliance

on the admission, statement, or act; and ( 3) an injury that the relying party would suffer if the

admission, statement, or act were repudiated.               Colonial   Imp., Inc.   v.   Carlton Nw., Inc., 121

6 First Horizon also asserts that equitable estoppel applies because Engelland " disavow[ ed] the
agreement to settle," but this assertion presumes that the parties had a binding agreement. Br. of

Resp' t at 30. We address that issue below.

                                                             I
No. 43420 -2 -II

Wn.2d 726, 734, 853 P. 2d 913 ( 1993).         The party claiming that equitable estoppel applies bears

the burden of establishing each element by clear, cogent, and convincing evidence. Colonial

Imports, 121 Wn.2d at 734, 736.

          Because First Horizon did not raise equitable estoppel in the trial court, the trial court

made no findings as to the elements of equitable estoppel. Although RAP 2. 5( a) allows us to

affirm the decision below on any ground supported by the record, First Horizon invites us to

make our own findings as to each element. But it is not the role of an appellate court to find

facts. Quinn     v.   Cherry   Lane Auto Plaza, Inc.,, 153    Wn. App. 710, 717, 225 P. 3d 266 ( 2009).

Therefore First Horizon' s equitable estoppel claim is not an alternative ground on which we may

affirm the judgment below.

B.        Execution of the Settlement Agreement

          Engelland argues that the trial court erroneously enforced the settlement agreement

because ( 1) there was a genuine factual issue as to whether the parties reached a complete and

final   agreement and ( 2)-    the-execution of any settlement agreement did not comply with CR 2A

and RCW 2. 44. 010. We agree with Engelland' s first contention and do not reach the second.

          When a motion to enforce a settlement agreement relies on affidavits or declarations, the

trial court considers the motion according to summary judgment procedures. Condon v. Condon,

177 Wn.2d 150, .161, 298 P. 3d 86 ( 2013);        see   CR 56( c)   (   summary judgment is appropriate when

there is no genuine issue of material fact and the moving party is entitled to judgment as a matter

of   law).   Thus the moving party bears the burden of showing that there is no genuine dispute as

                                                         10
No. 43420 -2 -II

                                                                                             7
to the   settlement agreement' s existence and                  its   material      terms.       Condon, 177 Wn.2d at 162. The

trial court must decide whether, viewing the evidence in the light most favorable to the

nonmoving party, reasonable minds could reach only one conclusion. Condon, 177 Wn.2d at

162. When genuine issues of material fact exist, the trial court abuses its discretion if it fails to

hold   an   evidentiary       hearing   to   resolve   the factual issues. 8          Condon, 177 Wn.2d at 162 n.4.

                                                                                                    9
            We   review    the trial court' s    decision     on      this   motion    de   novo.        Condon, 177 Wn.2d at 162.

Thus we engage in the same inquiry as the trial court. TracFone Wireless, Inc. v. Dep' t of

Revenue, 170 Wn.2d 273, 280 -81, 242 P. 3d 810 ( 2010).

            Engelland argues that a genuine issue of material fact exists as to whether the parties

reached a final settlement agreement because they did not resolve the commencement date for

payments and because First Horizon did not satisfy Engelland' s concerns about the negative

7 First Horizon claims that ( 1) it met its burden and ( 2) Engelland then failed to produce specific
evidence sufficiently rebutting its contentions and disclosing a genuine factual dispute. Because
we decide that First Horizon failed to meet its initial burden, we do not decide whether
Engelland provided a sufficient rebuttal.

8
    The trial court did not conduct an evidentiary hearing here.

9 First Horizon concedes that the summary judgment standard applies. But, citing two non-
binding cases, First Horizon also asserts that enforcement of a settlement agreement is essentially
    an action    for   specific performance       that   is   reviewed        for   an abuse of         discretion."   Br. of Resp' t at
12 n.8 ( citing Adams v. Johns -
                               Manville Corp., 876 F.2d 702, 704 ( 9th Cir. 1989) and Morris v.
Maks, 69 Wn.           App.   865, 868, 850 P. 2d 1357 ( 1993)).                We disagree with this assertion because
our Supreme Court' s decision in Condon clarified that de novo review is appropriate and the
abuse of     discretion       standard   does   not    apply.     177 Wn.2d at 161 -62 n.4.

                                                                       11
No. 43420 -2 -II

                      10
escrow     balance.         In response, First Horizon claims that the parties' informal e -mails show that

they executed an agreement despite the absence of a signed formal document. We agree with

Engelland.

           Settlement agreements are contracts. Riley Pleas, Inc. v. State, 88 Wn.2d 933, 937 -38,

568 P. 2d 780 ( 1977).         To form a contract, the parties must objectively manifest their mutual

assent    to the definite terms     of an offer.         Keystone Land & Dev. Co.             v.   Xerox   Corp.,   152 Wn.2d

171, 177 -78, 94 P. 3d 945 ( 2004). Whether there was mutual assent is a question of fact.

Keystone, 152 Wn.2d at 178 n. 10. An enforceable contract is distinguished from an

unenforceable agreement            to   agree,   i. e., "`   an agreement to do something which requires a further

meeting of the minds of the parties and without which [the contract] would not be complete. "'

Keystone, 152 Wn.2d at 175 -76 ( quoting Sandeman v. Sayres, 50 Wn.2d 539, 541 -42, 314 P. 2d

428 ( 1957)).

           On February 17, 2012, Ahrens represented that Engelland would sign the settlement

agreement     if two       conditions were met: (            1) the commencement date was changed to March 1- and

 2) the   negative escrow        balance    was " addressed."            CP   at   128.   On February 27, First Horizon' s

attorneys sent Ahrens an updated settlement agreement containing a March 1 commencement

date, stated that the negative escrow balance would be capitalized, and requested that Engelland

10
     For the first time in his reply brief, Engelland also argues that the settlement agreement was
not executed in accordance with the statute of frauds, RCW 19. 36. 010. But an issue raised for
the first time in a reply brief is too late to warrant consideration. Cowiche Canyon Conservancy
v. Bosley, 118 Wn.2d 801, 809, 828 P. 2d 549 ( 1992).

                                                                    12
No. 43420 -2 -II

sign "   ASAP."    CP at 128. But First Horizon did not receive a signed copy from Engelland, and

Engelland did not make a payment on March 1.

           Viewed in the light most favorable to Engelland, the record shows that the parties did not

form a contract for two reasons. First, Ahrens' s February 17 e -mail was not an offer of definite

terms but instead an agreement to agree on the status of the negative escrow balance. Second,

Engelland did not accept First Horizon' s February 27 offer by commencing payments on March

1 or otherwise manifesting his assent to the offer.

           Claiming that the parties' informal e -mails show the execution of a binding agreement to

settle, First Horizon relies on the three -part test stated in Morris v. Maks, 69 Wn. App. 865, 869,

850 P. 2d 1357 ( 1993). 11 But the Morris.test is unavailing to First Horizon.

           According to Morris, even when the parties. contemplated signing a formal written

agreement,     informal    writings are sufficient      to   establish a   binding   contract when "(   1) the subject

matter    has been   agreed upon, (     2) the terms are all stated in the informal writings, and ( 3) the

parties intended a binding agreement prior to the time of the signing and delivery of a formal

contract."     Morris, 69 Wn. App. at 869 ( citing Loewi v. Long, 76 Wash. 480, 484, 136 P. 673

 1913)).     But here, the third element is lacking because the parties expressly did not intend a

l i First Horizon also relies on an unpublished federal decision, McKelvey v. Am. Seafoods, No.
C99- 2108L, 2000 WL 33179292 ( W. D. Wash. Apr. 7, 2000). But                         GR 14. 1( b), a party
                                                                                      under

may      cite another   jurisdiction'   s unpublished   decision only if two conditions are met: ( 1) the
jurisdiction' s rules permit citations to its unpublished decisions and ( 2) the party files a copy of
the decision along with its brief. Neither condition is met here. See FED. R. APP. P. 32. 1( a)
 permitting     citation   to   unpublished   federal decisions issued in 2007         or   later). Therefore First
Horizon has violated GR 14. 1( b) and we refuse to consider the unpublished case. Condon, 177
Wn.2d at 165 -66.

                                                               13
No. 43420 - -II
          2

binding agreement prior to the delivery of a signed formal contract. Instead, the unsigned

settlement agreement provided that " this Agreement shall not be effective until all of the Settling

Parties have signed the Release Agreement, and the various counterparts are delivered to all

Settling   Parties       or
                     and /    their   respective counsel."     CP at 203.

          First Horizon' s argument is unpersuasive. We vacate the trial court' s order enforcing the

settlement agreement.

                                                  Il. ATTORNEY FEES

          Engelland further argues that the trial court erred by awarding reasonable attorney fees to

First Horizon. We agree.

          A court may award attorney fees only when authorized by a contract, a statute, or a

recognized ground       in equity. Bowles        v.   Dep' t ofRet. Sys.,   121 Wn.2d 52, 70, 847 P. 2d 440

 1993).    The threshold question of whether a trial court is authorized to award attorney fees is a

question of    law,   which we review       de   novo.    Gander v. Yeager, 167 Wn. App. 638, 646, 282 P. 3d

1100 ( 2012).    But when attorney fees are authorized, we review an attorney fee award for an

abuse of discretion. Gander, 167 Wn. App. at 647.

           Engelland claims that, in the absence of an enforceable settlement agreement, the trial

court lacked authority to award reasonable attorney fees. Other than arguing that an enforceable

                                                              14
No. 43420 -2 -II

settlement agreement existed, First Horizon does not dispute this claim. Because the trial court

                                                                                                                    12
erred   by   enforcing the   settlement agreement, we' also vacate   the trial   court' s   attorney fee   award.

                                     ATTORNEY FEES ON APPEAL

          Both parties request reasonable attorney fees and costs on appeal. We deny both

requests.

          Under RAP 18. 1, the prevailing party is entitled to attorney fees on appeal when

applicable law authorizes the award. See McGuire v. Bates, 169 Wn.2d 185, 191, 234 P. 3d 205

 2010).      We deny First Horizon' s request because it is not the prevailing party.

          Citing Herzog Aluminum, Inc. v. General American Window Corp., 39 Wn. App. 188,

692 P. 2d 867 ( 1984),    Engelland claims he is entitled to reasonable attorney fees and costs under

the purported settlement agreement. 13 But Engelland' s reliance on Herzog is misplaced.

12 We do not address Engelland' s alternative argument that the attorney fee award was partially
erroneous to the extent that it included nonrecoverable fees incurred in negotiating, rather than
enforcing, the settlement agreement.

13 The purported settlement agreement provided:

          Attorneys' Fees and Costs. The Parties hereto shall bear their own fees, costs and
          expenses incurred in connection with the negotiation, drafting and consummation
          of   this   Agreement.     However,    if any party institutes legal proceedings in
          connection with, or for the enforcement of this Agreement or any provision of it,
          the prevailing party shall be entitled to recover from the losing party its costs,
          including reasonable attorneys' fees, at both trial and appellate levels.

CP at 201.

                                                      15
No. 43420 -2 -II

        Herzog, 39 Wn. App. at 191 -97, interpreted RCW 4. 84.330, 14 which provides in relevant
part:

        In any action on a contract or lease entered into after September 21, 1977, where
        such contract or lease specifically provides that attorneys' fees and costs, which
        are incurred to enforce the provisions of such contract or lease, shall be awarded
        to one of the parties, the prevailing party, whether he or she is the party specified
        in the contract or lease or not, shall be entitled to reasonable attorneys' fees in
        addition to costs and necessary disbursements.

Thus when a contract allows only one party to recover attorney fees in an action to enforce the

contract, RCW 4. 84. 330 entitles the other party to recover reasonable attorney fees if it prevails.

See Wachovia SBA      Lending, Inc.     v.   Kraft, 165 Wn.2d 481, 489, 200 P. 3d 683 ( 2009). Our

Supreme Court has approved Herzog' s holding that RCW 4. 84. 330 applies even when the

contract   containing the attorney fee       provision      is invalidated. Labriola    v.   Pollard   Grp.,   Inc., 152

Wn.2d 828, 839, 100 P. 3d 791 ( 2004) ( citing              Herzog, 39 Wn. App. at 196 -97).

        However, Engelland is not the prevailing party under RCW 4. 84. 330. RCW 4. 84. 330

further defines the prevailing party         as "   the party_in    whose   favor final judgment is    rendered."    For

the purposes of RCW 4. 84. 330, a final judgment disposes of all issues in controversy.

Wachovia, 165 Wn.2d at 491 -92. Our determination that the trial court erred by enforcing the

settlement agreement does not dispose of all issues in controversy; instead it requires the trial

court to take further action to decide the remaining issues consistent with this opinion. Without a

14 In 2011, the legislature amended RCW 4. 84. 330 to insert gender -neutral language and change
a singular noun    to the   plural.   LAWS    of    2011,   ch.   336, § 131.   The amendments do not affect our
analysis.

                                                              rV1
No. 43420 -2 -II

final judgment in his favor, Engelland is not the prevailing party and cannot recover attorney
        15
fees.

             We vacate the trial court' s order enforcing settlement and its award of attorney fees to

First Horizon. We remand for further proceedings consistent with this opinion.

             A majority of the panel having determined that this opinion will not be printed in the

Washington Appellate Reports, but will be filed for public record in accordance with RCW

2. 06. 040, it is so ordered.

Forget

15 Moreover, the attorney fee provision here is bilateral, in that it allows either party to recover
attorney fees if it prevails. But RCW 4. 84. 330 generally does not apply when a contract contains
a bilateral attorney fee provision. Kaintz v. PLG, Inc., 147 Wn. App. 782, 786 -87, 197 P. 3d 710

 2008).

                                                       17