Draft Agreements with Clarity or…

If you ever want to know why a contract or any agreement should be clearly written, here is the reason.  In a recent case, 41 Acquisition Holdings, LLC v. Haff, 48 Fla.L.Weekly D1127a (Fla. 3d DCA 2023), the settlement agreement contained the following language:

The court shall retain jurisdiction to enforce this agreement and, an enforcement action or motion, if any, shall be made by the party claiming a breach against the party alleged to have committed the breach and shall not affect any party who is not alleged to have breach this agreement and the prevailing party in any enforcement action at all levels including all reasonable attorneys fees and costs at all levels, trial and appellate.

Certainly, this is NOT a model of clarity. Not by any stretch.

One of the parties moved to set aside the settlement agreement alleging incapacity and undue influence. The trial court denied the motion. The opposing party filed a motion for attorney’s fees based on the above provision. The trial court denied the motion for attorney’s fees as the settlement “did not unambiguously state the intention for recovery to the prevailing party on a motion to set aside the settlement agreement.” 41 Acquisition Holdings, supra.  The appellate court affirmed.

Under the American Rule, attorney’s fees generally are not recoverable unless a statute or a contract specifically authorizes their recovery.  An agreement providing for the award of attorney’s fees must be clear, specific, and unambiguous to be enforceable.  Further, the agreement must clearly identify the matter in which the fees are recoverable. 

Here, while the settlement agreement contains a provision for attorney’s fees, it is far from clear and unambiguous. Both parties acknowledge that the provision is “missing a verb.” Further, the attorney’s fees clause commingles several separate objectives into one clause and lacks language directing an award of fees for prevailing on a motion to set aside the agreement. As a result, we cannot determine the intention of the parties without rewriting the agreement. Accordingly, the trial court did not abuse its discretion in denying [the appellant’s] motion for attorney’s fees.

41 Acquisition Holdings, supra (internal citations omitted).

Had the attorney’s fees provision been more clearly worded, the outcome may have been different. Regardless, the provision above is not clearly written. Even if the ultimate outcome would be the same, use this provision as an example to clearly draft and memorialize your intention in any agreement. It’s always in YOUR best interests to do so.

Please contact David Adelstein at [email protected] or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.