United States District Court, D. Arizona
DAVID G. CAMPBELL, District Judge.
Defendants have filed a motion for attorneys' fees pursuant to Local Rule 54.2 and A.R.S. § 12-341.01. Doc. 47. The motion is fully briefed, and neither party has requested oral argument. The Court will grant the motion in part.
Plaintiff Ameriprise Financial Services, Inc. ("AFSI") filed an action for declaratory relief seeking a determination that it did not have a binding arbitration agreement with Defendant Henry Ekweani. Doc. 1. Defendant Ekweani counterclaimed that AFSI breached its contract to arbitrate employment disputes. Doc. 9. On April 16, 2015, the Court granted summary judgment in favor of AFSI on its claim for declaratory relief and on Defendant's claim for breach of contract. Doc. 42. The Court also permitted AFSI to file a memorandum on its request for an award of attorneys' fees. Plaintiff filed a memorandum seeking $49, 422.00 in attorneys' fees. Doc. 47. The request is limited to the fees incurred in prosecuting the declaratory action and defending against Defendant's counterclaim. It does not include fees incurred by local counsel or fees related to Plaintiff's unsuccessful motion to strike.
II. 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). The trial court has discretion regarding an award of attorneys' fees. See Wilcox v. Waldman, 744 P.2d 444, 450 (Ariz.Ct.App. 1987). To determine whether to award attorneys' fees, courts consider the merits of the unsuccessful party's claim, whether the successful party's efforts were completely superfluous in achieving the ultimate result, whether assessing fees against the unsuccessful party would cause extreme hardship, whether the successful party prevailed with respect to all relief sought, whether the legal question presented was novel or had been previously adjudicated, and whether a fee award would discourage other parties with tenable claims from litigating. Am. Const. Corp. v. Philadelphia Indem. Ins. Co., 667 F.Supp.2d 1100, 1106-07 (D. Ariz. 2009) (citing Assoc. Indem. Corp. v. Warner, 694 P.2d 1181, 1184 (Ariz. 1985)). No single factor is determinative. See Velarde v. PACE Membership Warehouse, Inc., 105 F.3d 1313, 1319-20 (9th Cir. 1997).
Plaintiff seeks attorneys' fees under A.R.S. § 12-341.01(A), which permits a court to award fees to the prevailing party in an action "arising out of a contract, express or implied[.]" The claims asserted in this case arose of contract, as the parties disputed whether a contract for arbitration existed. See Berthot v. Security P. Bank of AZ, 823 P.2d 1326, 1332 (Ariz.Ct.App. 1991) ("A party is entitled to an award of its attorneys' fees under § 12-341.01 if the plaintiff is not entitled to recover on the contract on which the action is based, or if the court finds that the contract on which the action is based does not exist.") (overruled on other grounds).
A. Merits of the Claims.
Defendants were unsuccessful on their counterclaim for breach of contract and in opposing Plaintiff's claim for declaratory relief. Defendants opposed Plaintiff's action even after Ekweani had successfully opposed Ameriprise Financial Inc.'s (the parent company of AFSI) motion to compel arbitration in his previous employment discrimination case in federal court. In that case, Ekweani swore that "I have never signed an agreement to arbitrate any employment-related disputes with Ameriprise Financial, Inc." Doc. 47 at 7. Ekweani's federal court lawsuit was unsuccessful, and he followed it with a demand for arbitration asserting many of the same claims that were rejected in the lawsuit. This prompted Plaintiff's lawsuit, which was necessary to avoid relitigating the same claims asserted by Defendants in the previous action. Thus, not only did Plaintiff prevail on its claims, but Defendants' arguments in this case were also directly contrary to those he had previously asserted in federal court. This factor favors Plaintiff's request for attorneys' fees.
B. Extreme Hardship.
Plaintiff argues that assessing fees against Defendants would not cause extreme hardship because Ekweani's wife is an attorney and they have not had to pay any of their own attorneys' fees. Defendants assert that an imposition of fees would cause extreme hardship, but they provide no evidence of their financial situation. Doc. 49 at 10. Because "[t]he party asserting financial hardship has the burden of coming forward with prima facie evidence of the financial hardship, " Woerth v. City of Flagstaff, 808 P.2d 297, 305 (Ariz.Ct.App. 1990), and Defendants have not done so, the Court finds that this factor weighs in favor of Plaintiff's request for fees.
C. Extent of Victory and Difficulty of the Case.
Plaintiff prevailed on all the claims at the summary judgment stage. Contrary to Defendants' argument, the legal issues were not particularly difficult or novel, and Plaintiff was forced to litigate the case through discovery to the ...