Can attorney fees be awarded when parties settle but reserve fee determinations? Airport Park Salt Lake City v. 42 Hotel SLC Explained

In Airport Park Salt Lake City v. 42 Hotel SLC, the Utah Court of Appeals addressed whether attorney fees can be awarded when parties settle their substantive claims but explicitly reserve fee determinations for the court.

Background and Facts

42 Hotel SLC operated on property accessed via a private road owned by Airport Park Salt Lake City LP. Two separate easements burdened the road with different maintenance payment obligations and attorney fee provisions. After extensive pre-litigation disputes over which easement applied and what constituted proper maintenance costs, Developer sued Hotel for unpaid fees. The parties eventually reached a settlement agreement resolving all substantive claims but explicitly reserving “either party’s claim for attorney fees” for judicial determination. Despite this reservation, the trial court denied Hotel’s motion for $55,804.06 in attorney fees, reasoning that fees were not awardable because the parties had settled their claims.

Key Legal Issues

The central issue was whether contractual attorney fee provisions can support fee awards when substantive claims are settled but fee determinations are explicitly reserved. The court also addressed whether attorney fees can be recovered for pre-litigation activities and whether settlement precludes prevailing party analysis.

Court’s Analysis and Holding

The Court of Appeals held that the trial court erred in denying attorney fees based solely on settlement. The court emphasized that the settlement agreement explicitly provided that “Nothing in this Settlement Agreement compromises, limits or settles…either party’s claim for attorney fees.” Since the fee issue was specifically reserved, settlement of other claims did not mandate denial of fees. The court also clarified that contractual provisions can authorize attorney fee recovery for pre-litigation activities when the contract’s dispute resolution procedures require such pre-litigation steps.

Practice Implications

This decision highlights the importance of carefully drafting settlement language regarding attorney fees. When parties want to reserve fee determinations while settling other claims, explicit reservation language prevents automatic denial of fee motions. The decision also confirms that prevailing party determinations remain viable even after settlement when fee issues are properly reserved. For appellate practitioners, the court’s refusal to make the prevailing party determination itself demonstrates judicial preference for trial court discretion in complex fee analyses involving multiple claims and mixed outcomes.