Unpublished Disposition, 940 F.2d 1534 (9th Cir. 1991)

MEMORANDUM^** 

Plotkin & Saltzburg ("Plotkin"), a law firm, appeals the district court's denial of its motion for attorneys' fees it incurred in opposing pro se appellee Michael Katz's motion to set aside a settlement agreement. In the settlement agreement, Katz agreed to dismiss his malpractice claims and affirm a debt to Plotkin for representing him in previous litigation. Plotkin contends that the district court erred in finding that state law did not govern the interpretation of the settlement agreement and that Plotkin was not contractually entitled to an award of its attorneys' fees under the settlement agreement.¹  We have jurisdiction under 28 U.S.C. § 1291, and we reverse and remand.

"The interpretation of a settlement agreement, like that of a contract, is a question of law subject to de novo review by the court." Pekarsky v. Ariyoshi, 695 F.2d 352, 354 (9th Cir.), cert. denied, 464 U.S. 1052 (1984).

If it is undisputed that a settlement agreement is a contract, state law governs the interpretation of its provisions. See Commercial Paper Holders v. Hine (Matter of Beverly Hills Bancorp), 649 F.2d 1329, 1332 (9th Cir. 1981). Generally, a party is not entitled to recover attorney's fees unless such fees are authorized by agreement or statute. Reynolds Metals Co. v. Alperson, 25 Cal. 3d 124, 127, 599 P.2d 83, 158 Cal. Rptr. 1 (1979). California Civil Code section 1717, subdivision (a) provides in pertinent part:

In any action on a contract, where the contract specifically provides that attorney's fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the prevailing party on the contract ... shall be entitled to reasonable attorney's fees in addition to other costs.

See Bussey v. Affleck 225 Cal. App. 3d 1162, 1164, 275 Cal. Rptr. 646, 647 (1990).

Here, the settlement agreement between Plotkin and Katz provides that "should litigation be commenced to enforce this Agreement, or any portion thereof, the prevailing party will be entitled to an award of costs and reasonable attorney's fees." The agreement also provides that it is to be "construed and interpreted" under California law. Katz does not dispute the validity of either of these two provisions, nor is it disputed that the settlement agreement is a contract between the parties. Accordingly, we hold that the district court erred by not looking to the settlement agreement to determine whether or not Plotkin was entitled to attorney's fees under California law. We remand to the district court to interpret the choice of law and attorney's fees provisions of the settlement agreement, and to determine whether an award of attorney's fees is appropriate. Cal.Civ.Code Sec. 1717; Bussey, 225 Cal. App. 3d at 1164.

REVERSED AND REMANDED.