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Couple not a 'successful party' in settlement

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Despite a lack of Indiana caselaw addressing the use of the term "successful party" for an award of attorney fees after a settlement, the Indiana Court of Appeals deemed the term interchangeable with the term "prevailing party."

In Francisco and Alisa Delgado v. Peter Boyles, et al., No. 64A04-0911-CV-657, the Delgados appealed the denial of their request for attorney fees following a settlement on a failed real estate transaction with Peter Boyles. They claimed per the provisions of their vacant land purchase agreement, they were the "successful party" under the terms of the agreement and should be able to recoup attorney fees.

As part of the agreement, it said "If either party sues the other to collect said damages, the unsuccessful party shall be obligated to pay the successful party's reasonable costs and attorney fees as part of any judgment recovered ..."

The Delgados failed to secure financing to purchase the land, so they sought the return of their $5,000 earnest money and attorney fees. Boyles counterclaimed for more than $30,000 in damages and attorney fees per the agreement.

A settlement was reached returning the $5,000 to the Delgados, with the parties submitting briefs on attorney fees. The trial court concluded that because there was no judgment recovered in the case, there was no prevailing party, so no attorney fees could be awarded under the agreement.

There isn't a case addressing the application of a contractual characterization of a "successful party" to an award of attorney fees, but Indiana has repeatedly ruled on the issue regarding the prevailing party. The prevailing party in the context of attorney fees is the one who successfully prosecutes his or claim or asserts his defense, so there is no difference in the meaning of the two terms.

Relying on Daffron v. Snyder, 854 N.E.2d 52, 53 (Ind. Ct. App. 2006), and Reuille v. E.E. Brandenberger Construction Inc., 888 N.E.2d 770 (Ind. 2008), the Court of Appeals affirmed the lower court's decision that the Delgados can't be considered the prevailing party under the vacant land purchase agreement. The Delgados' land agreement didn't define what constituted a successful party.

"Moreover, in the absence of a contractual definition of prevailing or successful party and a trial on the merits, as in Reuille, we conclude that litigation which is resolved by mediation or private settlement cannot result in a winner or loser," wrote Judge Patricia Riley.

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