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9/28/2009
Mark D. Dix
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Literal Terms of Settlement Agreement Enforced To Limit Attorney's Fees Claim

The Virginia Court of Appeals affirmed that the terms of a property settlement, like any other contract, must be interpreted exactly as written. In Everett v. Everett, the wife contended that the parties’ property settlement agreement required her husband to pay for all of her attorney’s fees and costs associated with the divorce proceeding. In contrast, the husband argued that the agreement only required him to cover her attorney’s fees if he sought a reduction in child support. The trial court applied principles of contract interpretation to the agreement and sided with the husband. The Court of Appeals, after an independent inquiry, agreed.

The Court of Appeals especially looked to the interpretation placed on the settlement agreement by the parties themselves to determine the agreement’s meaning. The Court found the wife’s own actions especially telling: when the husband filed a motion to reduce child support, the wife sought full reimbursement of her attorney’s fees; but when the husband disputed custody of their children, the wife consented to pay her own fees. These actions, the Court said, were consistent with the trial court’s interpretation of the agreement—that the husband would pay for only those attorney’s fees associated with his attempts to reduce child support.

Finally, the husband challenged the wife’s attorney’s fees as excessive. The Court of Appeals rejected this argument, stating that the wife could recover her full attorney’s fees associated with two attempts by the husband to reduce child support, but not the additional costs associated with expedited deposition transcripts the wife requested.

Let this opinion be a warning: draft settlement agreements with the utmost care because a period in the wrong place could cost you. Although the temptation might be to adopt a 'form' settlement agreement to save expenses, one can end up penny wise and pound foolish if sufficient care is not given.

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