David H. Cheren; Catherine A. Conrad Cheren, Plaintiffs,
Compass Bank; BBVA Compass Bank; and Does 1 through 10, Defendants.
JAMES A. TEILBORG, Senior District Judge.
Pending before the Court is a Motion for Award of Attorneys' Fees pursuant to Federal Rule of Civil Procedure 54(d)(2) and Local Rule of Civil Procedure 54.2, submitted by Compass Bank, an Alabama banking corporation doing business as BBVA Compass ("Compass Bank").
In 2012, Plaintiffs David H. Cheren and Catherine A. Conrad Cheren ("Cheren") filed a Complaint alleging that Compass Bank breached a mortgage contract and the contract's implied covenant of good faith and fair dealing. (Doc. 1 at 7-8). On November 2, 2012, this Court dismissed Cheren's complaint because he had failed to allege facts sufficient to show a valid mortgage contract under Arizona law. ( See Doc. 24 at 10). But, the Court granted leave to amend. ( Id. at 14). Additionally, in the same Order, the Court denied Cheren's three motions for sanctions and granted Compass Bank's request for $1, 000 in attorneys' fees for defending against the motions for sanctions. ( Id. ). Cheren filed a First Amended Complaint as a result of this Order. (Doc. 27).
On June 24, 2013, the Court issued an order denying Cheren's motion for reconsideration of the grant of attorneys' fees. (Doc. 37). Additionally the Court refused Defendant's request that the Court increase its award of attorneys' fees to $5, 955.50. ( Id. ).
Consistent with the Court's November 2, 2012 Order, Cheren filed a First Amended Complaint. On August 21, 2013, the Court dismissed Cheren's First Amended Complaint with prejudice. (Doc. 38). As part of his amended complaint, Cheren presented to the Court documents showing a "conditional approval" of a mortgage loan and documents related to the escrow procedures for the purchase of a condominium. ( Id. at 1-3). However, Cheren failed to produce, or allege the existence of, an actual signed mortgage contract. ( Id. at 6-10). Thus, the Court again determined that Cheren had failed to allege sufficient facts to show that a mortgage contract existed under Arizona law. ( Id. at 10). The pending Motion for Award of Attorneys' Fees followed.
II. Analysis and Conclusions
Under Arizona law, "[i]n any contested action arising out of a contract, express or implied, the court may award the successful party reasonable attorney fees." A.R.S. § 12-341.01(A). Here, Cheren's Complaint and First Amended Complaint both alleged that Compass Bank breached a contract and violated its duty of good faith and fair dealing arising out of that contract. ( See Doc. 1; Doc. 27). Thus, the action "arose out of a contract" and attorneys' fees are permitted. See Berthot v. Sec. P. Bank of Arizona, 823 P.2d 1326, 1332 (Ariz. App. 1991) (holding that under Arizona law, a successful party to a breach of contract action can recover his or her attorney's fees even if the result is that there was not a valid contract) ( superseded by statute on other grounds ). Accordingly, the Court will consider whether awarding fees is appropriate in this case and whether the requested fees are reasonable.
A. Appropriateness of a Fee Award
In deciding whether to grant attorneys' fees, Arizona law requires the Court to consider six factors. See Wilcox v. Wildman, 744 P.2d 444, 450 (Ariz.Ct.App. 1987). The Court must weigh all the factors and no particular factor is dispositive. Id. These six factors are: (1) "[t]he merits of the claim or defense presented by the unsuccessful party"; (2) "[t]he litigation could have been avoided or settled and the successful party's efforts were completely superfluous in achieving the result"; (3) "[a]ssessing fees against the unsuccessful party would cause an extreme hardship"; (4) "[t]he successful party did not prevail with respect to all of the relief sought"; (5) "the novelty of the legal question presented and whether such claim or defense had previously been adjudicated in this jurisdiction"; and (6) "whether the award in any particular case would discourage other parties with tenable claims or defenses from litigating or defending legitimate contract issues for fear of incurring liability for substantial amounts of attorney's fees." Associated Indem. Corp. v. Warner, 694 P.2d 1181, 1184 (Ariz. 1985). The Court will now turn to an examination of these factors.
1. The merits of the claim or defense presented by the unsuccessful party
Here, Cheren's First Amended Complaint was with dismissed with prejudice because he failed to allege sufficient facts to show that a mortgage contract existed under Arizona law. (Doc. 38 at 10). Thus, Cheren's complaint lacked sufficient merit to survive a motion to dismiss. Accordingly, the Court finds that this factor weighs in favor of granting attorneys' fees.
2. The litigation could have been avoided or settled and the successful party's efforts were completely superfluous in achieving the result
Here, Compass Bank's efforts, specifically the two motions to dismiss, directly resulted in the success of Compass Bank in this case. Further, as Compass Bank is the defendant in this action, they could not have "avoided" the lawsuit because Cheren initiated the law suit. Accordingly, ...