United States District Court, D. Arizona
DAVID G. CAMPBELL, District Judge.
On October 21, 2013, the Court granted Defendants' Motion to Dismiss under Federal Rules of Civil Procedure 8(a), 9(b), and 12(b)(6). Doc. 27. Defendants Wells Fargo Bank, N.A. and Federal National Mortgage Association have moved for an award of attorney's fees pursuant to Rule 54(d)(2), seeking fees for claims against them arising out of contract under A.R.S. § 12-341.01(A). Doc. 33. The motion has been fully briefed. Docs. 36, 38. The Court will grant the motion.
I. Legal Standard.
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). Under Arizona law, the trial court has discretion regarding awarding attorneys' fees. See Wilcox v. Waldman, 744 P.2d 444, 450 (Ariz.Ct.App. 1987). Courts consider: (1) the merits of the unsuccessful party's claim, (2) whether the successful party's efforts were completely superfluous in achieving the ultimate result, (3) whether assessing fees against the unsuccessful party would cause extreme hardship, (4) whether the successful party prevailed with respect to all relief sought, (5) whether the legal question presented was novel or had been previously adjudicated, and (6) whether a fee award would discourage other parties with tenable claims from litigating. Velarde v. PACE Membership Warehouse, Inc., 105 F.3d 1313, 1319-20 (9th Cir. 1997); Associated Indem. Corp. v. Warner, 694 P.2d 1181, 1184 (Ariz. 1985) (en banc); Uyleman v. D.S. Rentco, 981 P.2d 1081, 1086 (Ariz.Ct.App. 1999). No single factor is determinative - the court should weigh all factors in exercising its discretion. See Wilcox, 744 P.2d at 450.
A. Appropriateness of Awarding Fees.
Plaintiff contends that the "non-contract claims, " including the consumer fraud claims, statutory violation claims, negligent misrepresentation, and negligent supervision claims, are not tied to the contract. Doc. 36 at 3-4. Defendants respond that all of Plaintiff's claims depend, explicitly or implicitly, on a contractual relationship between the parties because they all related to the Note and Deed of Trust. Doc. 38 at 4. Where a defendant allegedly breaches a duty that would not exist but for the contract, those claims are found to arise in contract. Doc. 34 at 2-3; see Assyia v. State Farm Mut. Auto. Ins. Co., 273 P.3d 668, 672-73 (Ariz.Ct.App. 2012). Plaintiff asserted two breach of contract claims in this case, and the Court finds that the remaining claims arose of out of contract. Therefore, the Court will individually consider the six factors outlined above.
1. Whether the Claims had Merit.
The Court dismissed all fourteen of Plaintiff's claims. Doc. 27. Plaintiff asserts that the claims should not have been dismissed, but he does not explain the reason for his assertion. Doc. 36 at 7. This factor favors Defendants.
2. Whether Defendants' Efforts were Superfluous.
Plaintiff contends that Defendants made no offer to resolve the matter. Id. at 3. Defendants respond argue that during the pendency of the motion to dismiss, they reached out to Plaintiff's counsel regarding potential settlement options and Plaintiff never responded. Doc. 34 at 6; Exhibit D. Plaintiff has not shown that Defendants could have avoided this litigation. This factor favors Defendants.
3. Whether Imposition of Fees would be a Hardship for Plaintiff.
Plaintiff does not contend that imposition of fees would be a hardship. "[T]he party asserting financial hardship has the burden of coming forward with prima facie evidence of financial hardship." Woerth v. City of Flagstaff, 808 P.2d 297, 305 (Ariz.Ct.App. 1990). ...