from the District Court of Stark County, Southwest Judicial
District, the Honorable Rhonda R. Ehlis, Judge.
M. Bouray, Dickinson, ND, for plaintiffs and appellees.
L. Rogneby, Bismarck, ND, for defendant and appellant.
Keith Candee appeals from an order entered on remand denying
his motion for contractual attorney fees and costs. Because
the parties' settlement agreement and mutual release of
claims is not "evidence of debt" under N.D.C.C.
§ 28-26-04, the district court misapplied the law in
holding the parties' contractual provision providing for
attorney fees was against public policy and void. The court
abused its discretion in its decision denying his motion for
attorney fees and we reverse and remand for further
This appeal involves the continued litigation between Keith
Candee and his parents, Douglas and Lyla Candee. Relevant
facts are set forth in Candee v. Candee, 2017 ND
259, 903 N.W.2d 514, and we will not repeat
them except as necessary to assist in resolving the issues in
In Candee, 2017 ND 259, ¶¶ 15,
18, 903 N.W.2d 514, this Court held that California
law applied to the dispute under the parties' 2013
settlement agreement and mutual release of claims
(collectively referred to as the settlement agreement) and
that Douglas and Lyla Candee were not entitled to a
deficiency judgment against Keith Candee after the
foreclosure of California and North Dakota properties. We
reversed and remanded for the district court to enter a
judgment dismissing Lyla and Douglas Candee's complaint.
Id. at ¶¶ 18-19.
On remand, the district court entered judgment in Keith
Candee's favor, dismissing Douglas and Lyla Candee's
complaint. The court also considered Keith Candee's
motion seeking attorney fees under the parties'
settlement agreement. Paragraph 15 of the settlement
"Attorneys' Fees. In the event of any
litigation between the Parties hereto, including any appeals
arising out of, in connection with or in any way related to
this Agreement, the prevailing party shall recover all of its
costs in connection therewith, including, without limitation,
its attorneys' fees, consultant and expert witness fees,
court costs, and any other related expenses."
Douglas and Lyla Candee responded and objected to Keith
Candee's attorney fee request. After a hearing, the
district court entered its order denying his motion. The
court refused to award attorney fees under the settlement
agreement, holding the agreement's provision allowing for
recovery of attorney fees was against public policy and void
under N.D.C.C. § 28-26-04.
The dispositive issue is whether the parties' settlement
agreement constitutes "evidence of debt,"
precluding enforcement of the agreement's attorney fee
provision. See N.D.C.C. § 28-26-04.
"Absent statutory or contractual authority, the American
Rule assumes parties to a lawsuit bear their own attorney
fees." Cheetah Props. 1, LLC v. Panther
Pressure Testers, Inc., 2016 ND 102, ¶
19, 879 N.W.2d 423 (quoting H-T Enters. v.
Antelope Creek Bison Ranch, 2005 ND 71,
¶ 15, 694 N.W.2d 691). Parties generally are
free to enter into an agreement for payment of attorney fees
in a civil action. See N.D.C.C. § 28-26-01(1).
Notwithstanding a contractual provision allowing recovery,
attorney fee provisions in debt instruments are void under
N.D.C.C. § 28-26-04. That section provides:
"Any provision contained in any note, bond, mortgage,
security agreement, or other evidence of debt for
the payment of an attorney's fee in case of default in
payment or in proceedings had to collect such note, bond, or
evidence of debt, or to foreclose such mortgage or
security agreement, is against public policy and void."
N.D.C.C. § 28-26-04 (emphasis added); see also
Farmers Union Oil Co. v. Maixner, 376 N.W.2d 43, 48
(N.D. 1985) (stating "attorneys' fees can be awarded
if agreed by the parties, either expressly or impliedly,
[but] such an ...