J.M. JOHNSON, J.

¶ 1 Humphrey Industries, Ltd., by means of its principal, George Humphrey (Humphrey), and with business partners Joseph and Ann Lee Rogel, Scott Rogel, and ABO Investments, by means of its principal, Gerald Ostroff, created Clay Street Associates, LLC (Clay Street), to hold a single real estate asset located in Auburn, Washington. In order to break a deadlock with Humphrey regarding the sale of the property in late 2004, the other members of Clay Street agreed to merge the company into a new limited liability company with a different voting structure that could facilitate the sale. Humphrey dissented from the merger and demanded payment pursuant to the dissenters' rights provisions of the Washington Limited Liability Company Act (LLC Act or the Act), chapter 25.15 RCW. As required by the Act, Clay Street paid Humphrey what Clay Street calculated as the fair market value of Humphrey's interest in Clay Street as of the effective merger date in December 2004; however, Clay Street did not pay until the property sold in May 2005.

¶ 2 Humphrey rejected Clay Street's value calculation and filed suit. Clay Street subsequently filed a petition for judicial determination of the property's value as of the effective merger date. The trial court consolidated the actions and heard testimony over several days in June 2007. It found that the property was worth more as of the merger date than Clay Street had calculated and accordingly awarded Humphrey the difference plus interest. However, the court also awarded Clay Street and the Rogels attorney fees based on its finding that Humphrey had acted arbitrarily, vexatiously, and not in good faith in pursuing the litigation. Humphrey appealed, and the Court of Appeals affirmed in an unpublished opinion. Humphrey Indus., Ltd. v. Clay St. Assocs., LLC, noted at 147 Wn.App. 1045, 2008 WL 5182026 (2008). Humphrey then petitioned this court for review. Humphrey Indus., Ltd. v. Clay St. Assocs., LLC, 166 Wn.2d 1014, 210 P.3d 1019 (2009). We reverse the Court of Appeals and remand for reconsideration of the attorney fee award.

FACTS AND PROCEDURAL HISTORY

¶ 3 Humphrey, Scott Rogel, Joseph and Ann Lee Rogel, and ABO Investments formed Clay Street in May 1997 to purchase and manage a single parcel of real property located in Auburn, Washington. Clay Street's LLC Agreement specified that the property "shall not be sold, conveyed, and/or assigned without the mutual consent of each of the members...." Clerk's Papers (CP) at 54. The LLC Agreement also provided for binding arbitration should a controversy or dispute related to the company's business arise.

¶ 4 Such a dispute occurred in 2004 when Scott Rogel, in order to implement a property settlement reached during his divorce, sought to sell the property and dissolve Clay Street. Humphrey refused to consent to the sale, and the other members of Clay Street sought the advice of an attorney as to how they might circumvent the unanimity requirement of the LLC Agreement and sell the property notwithstanding Humphrey's veto. The attorney advised them that, since further negotiations were futile, the sale could "be accomplished most quickly through a merger procedure which eliminates the dissenting vote." CP at 62.

¶ 5 Pursuant to this suggestion, the remaining members of Clay Street formed a new limited liability company in August 2004 and merged it with Clay Street. The members gave Humphrey notice of its statutory right to dissent to the merger, and Humphrey exercised this right on October 1, 2004, demanding payment of the fair value of its interest in the company. The merger became effective on December 7, 2004.

¶ 6 Because it had not yet sold the property and had no other assets, Clay Street lacked funds with which to pay Humphrey the fair value of its interest within 30 days of the effective merger date, as required by statute. Later, on May 27, 2005, Clay Street paid Humphrey $181,192.64—which it calculated to be the fair value of Humphrey's interest as of the merger date, plus interest for the delay—following the sale of the property earlier that month for $3.3 million. Humphrey immediately disputed the value calculated by Clay Street and demanded an additional $424,607 based on its own estimate of fair value. Clay Street refused to pay the additional sum and Humphrey filed suit on June 21, 2005. One month later, Clay Street offered to settle Humphrey's claims for $325,376. Humphrey rejected the offer. Clay Street subsequently filed a formal petition to determine the fair value of the company; the two cases were consolidated to resolve that issue and those raised by Humphrey in its derivative suit. In another effort to resolve the litigation, Clay Street made a CR 68 offer of judgment for an additional $165,275.59 in September 2006,1 but Humphrey refused that offer as well.

¶ 7 After several delays,2 a six-day bench trial was held in June 2007.3 The court heard evidence from several different appraisers and experts, along with testimony from Clay Street members Scott Rogel, George Humphrey, and Gerald Ostroff.4 The court found that the pattern and magnitude of offers made for the property "did not indicate a distressed, forced or fire sale" and that the final sale price reflected the fair value of Clay Street as of May 2005.5 CP at 1667. The court deemed this price to be highly relevant to the fair value of the company five months earlier and accordingly adopted as the most accurate measure of Clay Street's value as of December 7, 2004, the $3.15 million valuation of the only appraiser who had considered it. The court ordered Clay Street to pay Humphrey an additional $60,588.22 based on this valuation.6

¶ 8 The trial court also found that Clay Street violated the LLC Act by failing to pay Humphrey the fair value of its interest within 30 days of the effective merger date as required by RCW 25.15.460. Nevertheless, it concluded that Clay Street had substantially complied with the Act "given that [it] lacked any funds to make the payment to Humphrey, that it could not obtain the requisite funds without a sale of the property, and that it was willing to pay the statutorily required interest during the period of delay." CP at 2315. The court also declined to award Humphrey attorney fees as provided under RCW 25.15.480(2)(a)7 and instead awarded fees and expenses to Clay Street and Joseph and Ann Lee Rogel under subsection (b) of the same provision based on its finding that Humphrey acted arbitrarily, vexatiously, and not in good faith in pursuing its dissenter's rights claim.

¶ 9 The Court of Appeals affirmed the trial court's determination of fair value and interest and its attorney fee award. Humphrey Indus., Ltd., noted at 147 Wn.App. 1045, 2008 WL 5182026. Humphrey subsequently petitioned this court for review of the latter issue, which we granted. Humphrey Indus., Ltd., 166 Wn.2d 1014, 210 P.3d 1019. In its petition, Humphrey objects first to the Court of Appeals' determination that Clay Street substantially complied with the statutory deadline for payment of fair value set by RCW 25.15.460 and, second, to the court's finding that Humphrey acted arbitrarily, vexatiously, and not in good faith. Together, these findings formed the basis for the court's award of fees and expenses to Clay Street and the Rogels and its refusal to award the same to Humphrey. We limit our review to these two concerns pursuant to RAP 13.7(b) and do not address the issue of fair value, which Humphrey did not raise in its petition.

ANALYSIS

¶ 10 Whether a party substantially complied with a statute is a mixed question of law and fact, which we review de novo. State v. Dearbone, 125 Wn.2d 173, 178, 883 P.2d 303 (1994). We review attorney fee awards for abuse of discretion. Noble v. Safe Harbor Family Pres. Trust, 167 Wn.2d 11, 17, 216 P.3d 1007 (2009).

I. Substantial Compliance with RCW 25.15.460

¶ 11 Upon timely receipt of a demand for payment from a member who dissents from a proposed merger, a limited liability company must pay the member the fair value of the member's interest in the company. The time and manner in which this payment is to be tendered is governed by RCW 25.15.460, which reads:

The dissenter can notify the company in writing of the dissenter's own estimate of the fair value of the dissenter's interest and demand payment of that estimate if (i) the company fails to make payment within 60 days after the date set for demanding payment or (ii) the dissenter believes that the amount paid is less than the fair value of the dissenter's interest. See RCW 25.15.470.

¶ 12 As mentioned above, both the trial court and the Court of Appeals found that Clay Street "substantially complied" with the directives contained in RCW 25.15.460, despite its failure to tender payment within 30 days of the effective merger date as required by statute—that date being the later of the two dates listed in RCW 25.15.460(1).

¶ 13 Humphrey contends that the lower courts erred by finding that Clay Street substantially complied with the statute. It argues that substantial compliance with a statutory deadline, including a specified time such as that contained in RCW 25.15.460, is impossible—one either complies with it or not. See Pet. for Review at 9 (citing City of Seattle v. Pub. Employment Relations Comm'n, 116 Wn.2d 923, 928-29, 809 P.2d 1377 (1991); Westcott Homes, LLC v. Chamness, 146 Wn.App. 728, 735, 192 P.3d 394 (2008); Petta v. Dep't of Labor & Indus., 68 Wn.App. 406, 409-10, 842 P.2d 1006 (1992)). Since Clay Street concedes that it did not tender payment of the fair value of Humphrey's interest within the 30 day statutory window, Humphrey claims that Clay Street could not have substantially complied with RCW 25.15.460 and that the trial court's finding, as affirmed by the Court of Appeals, is therefore in error.

¶ 14 Clay Street counters by arguing that "substantial compliance" deserves a broader interpretation where timeliness is not a jurisdictional requirement. See Answer to Pet. for Review at 9-10 (citing In re Habeas Corpus of Santore, 28 Wn.App. 319, 327, 623 P.2d 702 (1981); BLACK'S LAW DICTIONARY 1470 (8th ed.2004)). Under such a reading, "substantial compliance" does not connote flawless compliance but rather "actual compliance in respect to the substance essential to every reasonable objective of the statute." Id. at 10 (quoting Santore, 28 Wash.App. at 327, 623 P.2d 702). Clay Street argues that the factual circumstances of each case are relevant when applying this standard and that the lower courts' finding that it substantially complied with the statute was proper, based as it was on the facts— namely, Clay Street's financial inability to tender payment by the deadline and its speedy delivery of the funds as soon as they were available.8 Id. at 10-11.

¶ 15 Humphrey's argument is more persuasive. A party substantially complies with a statutory directive when it satisfies the substance essential to the purpose of the statute. See Crosby v. County of Spokane, 137 Wn.2d 296, 302, 971 P.2d 32 (1999) (citing Cont'l Sports Corp. v. Dep't of Labor & Indus., 128 Wn.2d 594, 602, 910 P.2d 1284 (1996)). As Clay Street correctly observes, this requires "actual compliance in respect to the substance essential to the statute's reasonable objectives," such that "the purpose of the [statutory] requirement is generally satisfied." In re Det. of A.S., 138 Wn.2d 898, 927, 982 P.2d 1156 (1999) (citing Crosby, 137 Wash.2d at 302, 303, 971 P.2d 32). The party attempting to comply with the statute must "make a `bona fide attempt to comply with the law' and ... `must actually accomplish its purpose.'" Renner v. City of Marysville, 168 Wn.2d 540, 545, 230 P.3d 569 (2010) (quoting Brigham v. City of Seattle, 34 Wn.2d 786, 789, 210 P.2d 144 (1949)).

¶ 16 The purpose of RCW 25.15.460 is to ensure that dissenters "have immediate use of the money to which the corporation agrees it has no further claim." 2 SENATE JOURNAL, 51st Leg., Reg. Sess. at 3091 (Wash.1989) (quoting app. A cmts. to Washington Business Corporation Act § 13.25).9 Humphrey's rights as a member of Clay Street terminated on December 7, 2004, the effective merger date. In order to effectuate the purpose of RCW 25.15.460, Humphrey should have had immediate use of the fair value of its interest in the company—i.e., it should have received the money within 30 days of the merger date. Humphrey did not receive payment within that time frame; instead, Clay Street sent the funds almost six months later. It cannot be said that Clay Street "actually accomplish[ed]," Brigham, 34 Wash.2d at 789, 210 P.2d 144, or "generally satisfied," A.S., 138 Wash.2d at 927, 982 P.2d 1156, the purpose of RCW 25.15.460 by means of this delayed payment. Accord Pub. Employment Relations Comm'n, 116 Wash.2d at 928-29, 809 P.2d 1377 ("It is impossible to substantially comply with a statutory time limit.... It is either complied with or it is not."). Clay Street therefore did not substantially comply with the statutory deadline, and we reverse the Court of Appeals insofar as it held otherwise.10

¶ 17 Further, as Clay Street itself concedes in its briefing, "`[w]hat constitutes substantial compliance with a statute is a matter depending on the facts of each particular case.'" Answer to Pet. for Review at 10 (quoting Santore, 28 Wash.App. at 327, 623 P.2d 702). The relevant facts of this particular case, as summarized above, indicate that Clay Street did not substantially comply with RCW 25.15.460 and its purpose; Humphrey did not have anything close to "immediate" use of the $181,192.64 even though Clay Street agrees it had no further claim to that sum after the merger. As a result, we reverse the Court of Appeals' finding that Clay Street substantially complied with RCW 25.15.460 notwithstanding its delayed payment of fair value to Humphrey.11 A six-month deferral of payment is not "substantial compliance" with a statute that unambiguously requires payment "within thirty days."

II. Attorney Fees

¶ 18 We review attorney fee awards made pursuant to statutes, such as RCW 25.15.480, for abuse of discretion. Noble, 167 Wash.2d at 17, 216 P.3d 1007; Morgan v. Kingen, 166 Wn.2d 526, 539, 210 P.3d 995 (2009); Fisher Props., Inc. v. Arden-Mayfair, Inc., 115 Wn.2d 364, 375, 798 P.2d 799 (1990). We reverse a trial court's decision under this standard only if it "is manifestly unreasonable, exercised on untenable grounds, or exercised for untenable reasons," with the last category including errors of law. Noble, 167 Wash.2d at 17, 216 P.3d 1007.

¶ 19 As previously noted, see supra note 7, the LLC Act authorizes an award of attorney and expert fees (a) against the limited liability company if the court finds that it failed to substantially comply with the Act or (b) against either party if the court finds that party to have acted arbitrarily, vexatiously, or not in good faith. See RCW 25.15.480(2). Humphrey claims that it is entitled to attorney fees under the former subsection; Clay Street counters that it is entitled to the same under the latter, as both the trial court and the Court of Appeals ruled. Importantly, though, the award of attorney fees under RCW 25.15.480(2) is not mandatory. Id. ("The court may also assess the fees and expenses of counsel ...." (emphasis added)). Thus, even if Clay Street did fail to substantially comply with the 30 day statutory deadline, or if Humphrey did act arbitrarily, vexatiously, or not in good faith, the opposing party is not automatically entitled to an award of attorney fees. Rather, the decision to award attorney fees rests in the discretion of the trial court.

¶ 20 Here, the trial court found that Clay Street substantially complied with the LLC Act notwithstanding the extreme delay of its payment to Humphrey—a delay that unquestionably violated the 30 day statutory deadline. It refused to grant Humphrey attorney fees on this basis. The court also found that Humphrey acted arbitrarily, vexatiously, and not in good faith in pursuing the litigation and, as a result, awarded attorney and expert fees to Clay Street and the Rogels. The Court of Appeals affirmed on both issues. We reverse the Court of Appeals and remand for reconsideration of the denial of such fees to Humphrey.

¶ 21 We hold today that the conclusion that Clay Street substantially complied with the Act is erroneous. Clay Street did not do so, and both the trial court and the Court of Appeals committed an error of law by so concluding. Under Noble, we reverse attorney fee decisions that are based on "untenable reasons," a category that "include[s] errors of law." Noble, 167 Wash.2d at 17, 216 P.3d 1007. Accordingly, we reverse the Court of Appeals' decision affirming the trial court's denial of attorney fees to Humphrey, based as it was on the erroneous legal conclusion that Clay Street substantially complied with RCW 25.15.460. We remand for further proceedings to determine whether, given Clay Street's failure to substantially comply with the LLC Act, an award of fees to Humphrey is appropriate.

¶ 22 Reversal of the attorney fee award in favor of Clay Street and the Rogels is also warranted. That award was based on the trial court's finding that Humphrey acted arbitrarily, vexatiously, and not in good faith, a finding that rested in part on Humphrey's rejection of a pretrial settlement offer and a CR 68 offer of judgment. Evidence of conduct in settlement negotiations, however, is inadmissible to prove liability for or invalidity of the claim or its amount. The trial court should not have relied on Humphrey's prelitigation conduct or conduct in other suits against Clay Street and the Rogels in awarding fees against Humphrey.

¶ 23 While the dissent notes that such evidence may be admitted if offered for other purposes (ER 408), evidence of Humphrey's rejection of a pretrial offer was not properly admitted. Dissent at 856. The record supports the conclusion: the trial court specifically referred to the offers as a "substantial windfall." CP at 2324. This is a direct comment on the validity of the claim or its amount.

¶ 24 Even if the evidence was admitted for a permissible purpose, given the circumstances of this case, the record does not establish that Humphrey's actions were arbitrary, vexatious, and not in good faith. If any acts were in bad faith, they were committed by the other members of Clay Street, who sought to bypass the dissenters' rights statute and section 8.1 of their own LLC Agreement, which specifies that the property, "shall not be sold, conveyed, and/or assigned without the mutual consent of each of the members...." CP at 54.

¶ 25 We reverse the trial court's award of attorney fees against Humphrey and in favor of the other parties, based as it was on "untenable grounds." Noble, 167 Wash.2d at 17, 216 P.3d 1007. We remand for consideration of whether, in light of Clay Street's failure to substantially comply with the statute, Humphrey is entitled to attorney fees.

CONCLUSION

¶ 26 Clay Street plainly failed to pay Humphrey the fair value of its interest in the company within 30 days of the effective merger date as required by RCW 25.15.460. Instead, it partially paid that value six months later. Humphrey was thereby deprived of the immediate use of the fair value of its interest, contrary to the underlying purpose of the dissenters' rights statute. It follows that Clay Street did not substantially comply with the statute. We reverse the Court of Appeals' conclusion to the contrary and, in light of that reversal, remand for a determination of whether Humphrey is entitled to attorney fees under RCW 25.15.480. As the prevailing party, Humphrey is entitled to attorney fees for this appeal.

WE CONCUR: BARBARA A. MADSEN, Chief Justice, GERRY L. ALEXANDER, RICHARD B. SANDERS, and DEBRA L. STEPHENS, Justices.

CHAMBERS, J. (dissenting).

¶ 27 I find the majority's resolution puzzling. The statute controlling dissenters' rights contemplates that those rights may be satisfied by substantial compliance. In fact, the statute specifically authorizes a substantial compliance inquiry. RCW 25.15.480.1 Notwithstanding this clear directive from the legislature, the majority concludes that the statutory requirement that payment to the dissenter be tendered within 30 days can be satisfied only by strict compliance. Majority at 851. That is the puzzling part. The majority ignores the trial court's careful findings of substantial compliance and flouts the legislature's clear directive that only substantial compliance is required. The majority is wrong. I respectfully dissent.

¶ 28 Although the parties had other business relations, relevant here is that Humphrey Industries, Ltd., by means of its principal, George Humphrey (Humphrey), joined Joseph and Ann Lee Rogel, Scott Rogel, and ABO Investments, by means of its principal, Gerald Ostroff, to create Clay Street Associates, LLC, for the purpose of acquiring and managing real estate. Importantly, the company purchased and owned only one piece of real estate. One of the Rogels decided to divorce and sought to liquidate his interest. Humphrey refused. Following a statutorily permissible merger procedure, the Rogels and Ostroff formed WXYZ, LLC. Humphrey was given notice of his dissenter's rights, formally dissented, and on October 1, 2004, demanded payment for his interest. Under the statutory scheme, Humphrey was entitled to payment within 30 days of his demand. The problem was that the single asset of the company, a commercial warehouse, could not be marketed so quickly. The parties disagreed on values; the relationship between Humphrey and the other investors became acrimonious, and numerous legal actions followed.

¶ 29 Ultimately, a trial judge determined the value of the property as of the date of merger to be $3.15 million, with Humphrey's share to be $231,947 plus interest of $60,588, and offset by the $181,192 he had already been paid. The trial court also found that the remaining investors had substantially complied with the statutory requirements of the merger procedure and that Humphrey had acted arbitrarily, vexatiously, and not in good faith, and thus assessed attorney fees against Humphrey.

¶ 30 First, under the plain words of the statute, courts are required to conduct a substantial compliance inquiry in awarding attorney fees for dissenters' rights disputes. RCW 25.15.480. The inquiry "depend[s] on the facts of each particular case," and the facts of this case support the conclusion that Clay Street "generally satisfied" the purpose of the requirement. In re Habeas Corpus of Santore, 28 Wn.App. 319, 327, 623 P.2d 702 (1981); Crosby v. County of Spokane, 137 Wn.2d 296, 303, 971 P.2d 32 (1999) (finding substantial compliance with a statutory requirement where "generally the purpose of the requirement will be satisfied"). While the legislature clearly wanted to protect dissenters' rights and assure prompt payment, the legislature was also mindful that 30 days is a very short time frame in which to accomplish a merger and the often resulting requirements of accounting, apportionment, appraisal, sale, settlement and other potential steps in the transfer of property, assets, debts, and liabilities associated with the process. There is nothing in the statute to suggest that the legislature intended to punish the remaining investors in a single asset by forcing a fire sale at a very unfavorable price.2 Instead, the legislature provided for the escape valve of "substantial compliance." As described by the Court of Appeals, Washington courts have defined "substantial compliance" as "`"actual compliance in respect to the substance essential to every reasonable objective of [a] statute."'" Humphrey Indus., Ltd. v. Clay St. Assocs., LLC, noted at 147 Wn.App. 1045, 2008 WL 5182026, at *4 (alteration in the original) (quoting City of Seattle v. Pub. Employment Relations Comm'n, 116 Wn.2d 923, 928, 809 P.2d 1377 (1991) (quoting Santore, 28 Wash.App. at 327, 623 P.2d 702)).

¶ 31 Second, the statute contemplates a dispute resolution process that would take the parties far beyond the 30-day payment window. RCW 25.15.475(1).

¶ 32 Third, we have held that under this statute, the attorney fees are permissive, not mandatory. Nat'l Elec. Contractors Ass'n v. Riveland, 138 Wn.2d 9, 28, 978 P.2d 481 (1999) ("the term `may' in a statute has a permissive or discretionary meaning" (citing Yakima County (W.Valley) Fire Prot. Dist. No. 12 v. City of Yakima, 122 Wn.2d 371, 381, 858 P.2d 245 (1993))). Given the facts of this case and the discretion vested in the trial judge's hands by this statute, the trial court did not err in refusing to award attorney fees to Humphrey. According to the trial court's findings, the merger resulted from Humphrey's unwillingness to liquidate a dysfunctional enterprise, and Clay Street paid out as soon as it obtained the money, with interest. Furthermore, Clay Street attempted to avoid litigation by making an offer well in excess of the eventual judgment, which Humphrey refused.

¶ 33 The courts below had sufficient ground to find that Clay Street substantially complied with the statute, and I would thus affirm their denial of Humphrey's request for attorney fees.

¶ 34 Finally, the majority concludes that, in finding that Humphrey acted arbitrarily, vexatiously, or not in good faith, the courts below improperly considered Humphrey's rejection of a prelitigation offer well in excess of the eventual judgment. Majority at 854 (citing ER 408). By its very terms, however, the rule cited does not exclude evidence of conduct in settlement negotiations if offered for a purpose other than proving or denying liability.3 Here, the evidence was properly admitted as relevant to state of mind. Bulaich v. AT&T Info. Sys., 113 Wn.2d 254, 263-64, 778 P.2d 1031 (1989) (allowing admission of prelitigation negotiations for the purpose of establishing intent). In fact, this court has specifically approved the use of such evidence to show good faith. Matteson v. Ziebarth, 40 Wn.2d 286, 294, 242 P.2d 1025 (1952). Excluding evidence so clearly relevant to lack of good faith would defeat the express purpose of giving the courts discretion to award attorney fees under the dissenters' rights statute, namely, to encourage good faith efforts to settle disputes out of court. See 2 SENATE JOURNAL, 51st Leg., Reg. Sess., at 3092-93 (Wash.1989) (quoting app. A cmts. to Washington Business Corporation Act §§ 13.28, .31).

¶ 35 In sum, I would affirm the Court of Appeals in all respects.

WE CONCUR: CHARLES W. JOHNSON, SUSAN OWENS, and MARY E. FAIRHURST, Justices.