Opinion
Case No. 04cv2000-BEN (JMA).
February 7, 2006
ORDER DENYING PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT AND GRANTING JUDGMENT IN FAVOR OF DEFENDANT [Dkt No. 12]
I. INTRODUCTION
Now before the Court is Plaintiffs' Motion for Summary Judgment. Plaintiffs seek $27,591.41 as an award of attorney fees and costs as a "prevailing party" under the Individuals With Disabilities Education Act (IDEA), 20 U.S.C. §§ 1400- 83, as a result of a settlement agreement reached with the Defendant school district during administrative proceedings. Having reviewed the briefs and the record, the Court denies Plaintiffs' motion and enters judgment for Defendant.
II. DISCUSSION
A. Attorney's Fees to Prevailing Parents Under the IDEA
Title 20 U.S.C. § 1415(i)(3)(B) provides that a district court has discretion to award an IDEA appellant attorney's fees. Specifically, it states,
(B) Award of attorneys' fees In any action or proceeding brought under this section, the court, in its discretion, may award reasonable attorneys' fees as part of the costs to the parents of a child with a disability who is the prevailing party.
This case comes to the Court in a curious position. The law and legal standards governing motions for summary judgment and attorney's fees requests under the IDEA are set forth in detail in Noyes v. Grossmont Union High School Dist., 331 F.Supp.2d 1233 (S.D. Cal. 2004) (Lorenz, J.) (currently on appeal), and need no repeating here. In short, to be entitled to fees, the parent-plaintiff must be a prevailing party.
B. May the "Prevailing Party" Requirement be Satisfied by a Settlement Agreement?
Ordinarily, to be a prevailing party, the plaintiff must have at least won a material alteration of the legal relationship between the student and the school district. Shapiro v. Paradise Valley Unified School District No. 69, 374 F.3d 857 (9th Cir. 2004) ("the term `prevailing party,' as it is used in various attorney's fees statutes, requires a `material alteration of the legal relationship of the parties'"). Plaintiffs argue that the settlement agreement entered into with the Escondido Union School District did just that: it materially altered the legal relationship in Plaintiffs' favor by affording a valuable placement for their child at a non-public school better suited to accommodate his autism.
C. Whether a Parent May Be Entitled to IDEA Attorney's Fees as a "Prevailing Party," When the Settlement Agreement Specifies That Neither Side Is a Prevailing Party, Is a Question of First Impression
However, in this case, the settlement agreement upon which Plaintiffs claim "prevailing party" status contains a provision that states: " No party shall be considered the prevailing party for any purpose whatsoever including attorneys fees. . . ." See Notice of Lodgment of Exhibits in Support of Plaintiffs' Motion for Summary Judgment, Exhibit 1, ¶ 7 (emphasis added).
Whether a parent can be a prevailing party for purposes of awarding fees where there is only a private settlement agreement and not a judicially enforceable consent decree is an issue not yet addressed by the Ninth Circuit Court of Appeals. At least two district court decisions have found that a private settlement agreement between a parent and school district may entitle a parent to an attorney's fee award under the IDEA. See Noyes, 331 F.Supp.2d at 1243; Ostby v. Oxnard Union High, 209 F.Supp.2d 1035, 1042 (C.D. Cal. 2002); but see Doe v. Boston Public Schools, 264 F.Supp.2d 65 (D. Mass. 2003), affirmed, 358 F.3d 20 (1st Cir. 2004).; John T. ex rel. Paul T. v. Delaware County Intermediate Unit, 318 F.3d 545 (3rd Cir. 2003); J.S. v. Ramapo Central School Dist., 165 F.Supp.2d 570 (S.D.N.Y. 2001). Whether a parent can be a prevailing party for purposes of awarding fees where there is a private settlement agreement that plainly states that neither party is a prevailing party is a question of first impression. This Court finds that in these circumstances, a parent-plaintiff is not entitled to attorney's fees under the IDEA.
The settlement agreement in the Noyes case did not contain a provision about whether either party is a prevailing party.
D. The Settlement Agreement Terms
The salient paragraph of the settlement agreement states,
The parties agree that no provision or provisions herein contained shall be deemed, for any purpose whatsoever, an admission of liability on the part of any of the Parties hereto. No party shall be considered the prevailing party for any purpose whatsoever including attorneys fees, costs, witness fees, expert fees, and/or any and all other costs and fees. Except as set forth herein, each party shall bear its own costs and fees. This paragraph does not, however, affect the Petitioner's and/or parents' right or ability to bring an action in a court of competent jurisdiction to recover reasonable attorney's fees and costs associated with SEHO Case No. SN04-00582.E. Expressed Intention is Objectively Clear
In this Court's opinion, the expressed intention of the parties is objectively clear. See B.E. Witkin, Summary of California Law 10th Ed. (2005), Contracts § 744 (courts look to expressed intention of the parties under an objective standard). The agreement provides that neither side is entitled to claim prevailing party status. Since "prevailing party" is a term of art having meaning primarily for attorney's fee shifting issues, the agreement is objectively understood to mean that neither party is entitled to attorney's fees because neither party is a prevailing party.
This is objectively consistent with the third and following sentence that states that each party will bear its own costs and fees. This interpretation of the settlement agreement is also objectively consistent with the provision that preserves the parents' right to bring an action to recover attorney's fees and costs, in that there may be other situations where the parents would benefit from being able to seek fees and costs. For example, if the Escondido School District was to breach the terms of the agreement, the parents would be able to enforce the agreement in a court proceeding and seek their attorney's fees for doing so.
F. Plaintiffs' View Would Deny School District the Benefit of the Bargain
Furthermore, to interpret the agreement otherwise would deny the benefit of the bargain to the school district. The school district may have been less willing to agree to pay for a non-public school education and would have changed its settlement position if it were going to agree to the possibility of the parents being prevailing parties and the concomitant attorney's fee obligation. To sum up, this Court finds that the expressed intention of the parties in the settlement agreement is that neither party would be a prevailing party or entitled to attorney's fees under the IDEA for the work spent leading up to the settlement agreement.
G. Parol Evidence Does Not Change the Outcome 1. Parol Evidence is Inadmissible
Plaintiffs offer parol evidence to explain that they never intended to bargain away their right to seek attorney's fees. However, parol evidence is admissible to construe a settlement agreement only where the language is reasonably susceptible of the interpretation urged by the party. Roden v. Bergen Brunswig Corp., 107 Cal.App.4th 620, 624 (Cal.App. 4th 2003) (interpreting ambiguous settlement agreement).
2. Court Colloquy Reveals Intent
Assuming for the sake of argument that parol evidence should be admitted, Plaintiffs would still not prevail on their argument that the settlement agreement was intended to permit pursuit of prevailing party attorney's fees. At the summary judgment hearing, this Court inquired of counsel as to the history behind the drafting of the salient paragraph. Counsel for Plaintiff, Patricia Ann Lewis, Esq., took part in the drafting negotiations. Lewis indicated at the hearing that she had requested the last sentence in paragraph seven (preserving Plaintiffs' right to seek fees) be inserted into the settlement agreement. Lewis then indicated that while she sought to have the second sentence of paragraph seven (the "no party is a prevailing party" sentence) deleted from the settlement agreement, she was unable to obtain agreement from the school district and that it was "the breaking point of the agreement."
Specifically, Ms. Lewis said, "we wanted to do that [delete the "prevailing party" sentence], the plaintiffs did, but I couldn't get defense to agree to that and that was the breaking point of the agreement." Lewis went on to explain that in her view, the third sentence ("except as set forth herein . . .") cancelled out the meaning of the second sentence (the no "prevailing party" sentence).
THE COURT: Okay, so you wanted to preserve the option of asking for attorney's fees, you wanted that.
MS. LEWIS: Correct.
THE COURT: You asked for that — and you wanted that in paragraph 7, you wanted that to be the last sentence, that's why you inserted the last sentence, right?
MS. LEWIS: Correct.
THE COURT: But you knew that it was the breaking point with the Defendant, which is why you did not strike through that sentence that says no party shall be considered the prevailing party, correct?
MS. LEWIS: Correct, because they would not. May I say the third sentence?
THE COURT: Yes.
MS. LEWIS: Which I believe is the critical sentence rather than the fourth sentence of that paragraph 7.
THE COURT: Right.
MS. LEWIS: The third sentence says except as set forth herein, except —
THE COURT: Who asked for that language to be inserted in the agreement?
MS. LEWIS: It's not in Exhibit O and I honestly don't remember how it got there. But I can tell you that the way it reads now, "except as set forth herein, each party to bear its own costs and fees," that exception takes out, in my mind, the second sentence, which says no party is prevailing because remember as set forth herein relates to the fourth sentence which gives the parents the right, and the right exists under IDEA, to file an action for fees. (Emphasis added.)
This colloquy reveals that the Escondido School District would not have agreed to settle the administrative appeal as it did if it would also be agreeing to pay for Plaintiffs' attorney's fees. The school district did not intend to expose itself to attorney's fee liability for work done up to that point. Moreover, Plaintiff's counsel knew this and knew it would be a breaking point to push the idea. Instead, Plaintiff's counsel sought additional language which, in her mind, would still permit her pursuit of attorney's fees, while allowing Defendant to believe it would have no liability for attorney's fees.
In essence, counsel hoped to pave the way to get indirectly, that which she was unable to bargain for directly. This type of evidence would not, however, demonstrate that the school district agreed to Plaintiffs' request for attorney's fees as a prevailing party. Consequently, even if paragraph seven were deemed to be ambiguous, and parol evidence admitted, it would still be clear that no agreement existed as to Plaintiffs' right to seek attorney's fees as a prevailing party.
H. Uncertain Contract Terms Construed Against One Who Injected the Uncertainty
Finally, there is a long regarded rule of contract interpretation that in cases of uncertainty the language of a contract should be interpreted most strongly against the party who created the uncertainty. See Cal.Civ. Code § 1654 ("In cases of uncertainty not removed by the preceding rules, the language of a contract should be interpreted most strongly against the party who caused the uncertainty to exist."); United States v. Seckinger, 397 U.S. 203, 211 (1970) ("In fashioning a federal rule we are, of course, guided by the general principles that have evolved concerning the interpretation of contractual provisions. . . . Among these principles is the general maxim that a contract should be construed most strongly against the drafter. . . ."); Buckley v. Terhune, 397 F.3d 1149, 1164 (9th Cir. 2005) (applying Cal.Civ. Code § 1654 to interpret contract uncertainty against party who caused the uncertainty). The principle applies with special force when the drafter is an attorney. Mayhew v. Benninghoff, 53 Cal.App.4th (Cal.App. 1997) ("The doctrine of contra proferentum (construing ambiguous agreements against the drafter) applies with even greater force when the person who prepared the writing is a lawyer."). In the settlement agreement at issue here, it is clear that Plaintiffs' counsel drafted and added the last sentence of paragraph seven.
Prior to the addition of the last sentence, there was no room for ambiguity in the agreement. In short the paragraph read, (1) neither party admits liability; (2) neither party is considered a prevailing party for nay purpose including attorney's fees; and (3) each party shall bear its own costs and fees. It is when the last sentence is added to this paragraph that the parties' dispute arises. Since the last sentence was drafted by attorney Lewis, and since it was the last sentence that injected uncertainty into the agreement, the sentence is to be interpreted most strongly against the meaning proposed by Lewis.
III. CONCLUSION
Against this backdrop, assuming that a settlement agreement during an administrative appeal would support an award of attorney's fees, Plaintiffs are not entitled to their attorney's fees in this case because the settlement agreement is clear that neither party is a prevailing party.
To sum up, Plaintiff is not entitled to an award of attorney's fees under 20 U.S.C. § 1415(i)(3)(B) which requires parents to be prevailing parties. Therefore, Plaintiff's Motion for Summary Judgment is hereby, Denied. Because there is nothing left for trial, the Clerk of Court is directed to enter judgment in favor of the Defendant.
IT IS SO ORDERED.