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Lexington Insurance Co. v. Scott Homes Multifamily Inc.

United States District Court, D. Arizona

September 21, 2016

Lexington Insurance Company, a Delaware corporation, Plaintiff/ Counterdefendant,
Scott Homes Multifamily Inc., an Arizona corporation; and Silverbell 290 Limited Partnership, an Arizona limited partnership, Defendants/Counterclaimants.


          James A. Teilborg Senior United States District Judge.

         Pending before the Court is Defendant/Counterclaimant Silverbell 290 Limited Partnership's (“Silverbell”) and Defendant Scott Homes Multifamily, Inc.'s (“Scott Homes”) (collectively, “Defendants”) Motion for Attorneys' Fees, (Doc. 494). Plaintiff/Counterdefendant Lexington Insurance Company (“Lexington”) has filed a brief in opposition to Defendants' Motion for Attorneys' Fees, (Doc. 503). The Court now rules on the motion.

         I. Background

         Assuming familiarity with the factual and procedural history of this action, the Court will recount only those aspects of this litigation that are relevant to the pending issue of attorneys' fees and costs.

         On October 8, 2012, Lexington filed a Complaint for Declaratory Judgment seeking “[a] judicial declaration that there is no coverage under the Lexington Excess Policy for the Stipulated Judgment” entered into by Scott Homes and Silverbell in the underlying construction defect lawsuit. (Doc. 1 at 34). Lexington also sought “[a] judicial declaration that [it] owes no current or past duty to defend, indemnify, or reimburse Scott Homes in any amount for any claims in connection with the underlying lawsuit or Settlement Agreement.” (Id.). Silverbell filed an Answer on October 31, 2012 and asserted counterclaims for breach of contract, bad faith, and punitive damages. (Doc. 10). In its Counterclaim, Silverbell sought $6, 000, 000.00 in damages for its breach of contract claim arising from the Stipulated Judgment in the underlying construction defect lawsuit, damages for bad faith, and punitive damages in the amount of $5, 000, 000.00 or more. (Id. at 45-46). Although Scott Homes filed an Answer on December 17, 2012, Scott Homes did not assert any counterclaims as it had previously “assigned the relevant interest in the Lexington insurance policy to Silverbell.” (Doc. 25 at 5). As a result, Scott Homes contended it was “not a proper party to this lawsuit.” (Id.). On June 12, 2013, Lexington filed an Answer to Silverbell's Counterclaim in which Lexington denied liability. (Doc. 52). On April 25, 2014, Lexington filed a First Amended Complaint (“FAC”); (Doc. 270).[1]

         On May 16, 2014, Lexington and Defendants filed cross-motions for summary judgment. (Docs. 273, 281). In ruling on these motions, the Court found for Defendants on certain coverage issues, but determined that Silverbell was not entitled to punitive damages. (Doc. 323 at 49-50). Additionally, the Court held that fact issues remained as to Silverbell's bad faith counterclaim, as well as several coverage issues, requiring resolution by trial. (Id.). On August 20, 2015, the parties stipulated to the dismissal of Silverbell's bad faith counterclaim and agreed that neither party would “be entitled to attorneys' fees or costs in connection” with this bad faith claim. (Doc. 404 at 2).

         At the time of trial, Counts II-XI of Lexington's FAC remained, as well as Count I of Silverbell's Counterclaim regarding coverage. (Doc. 486 at 1). All of the other claims in Lexington's FAC and Silverbell's counterclaims for bad faith and punitive damages were dismissed prior to trial. (Id.). At trial, the jury found that Silverbell “proved by a preponderance of the evidence that Scott Homes Multifamily Inc. was liable for covered property damage exceeding $1 million.” (Doc. 463 at 2). Based on this verdict, the Court entered judgment in favor of Defendants on “all remaining Counts in the Complaint and Counterclaim” and awarded Silverbell $3, 410, 000.01, subject to prejudgment and post-judgment interest. (Doc. 486 at 1).

         Defendants now seek an award of attorneys' fees and taxable costs against Lexington totaling $1, 558, 099.04, calculated under Defendants' contingent fee agreement. (Doc. 494 at 6). Alternatively, Defendants seek an award in the amount of $1, 015, 650.00 “based upon services performed and reasonable hourly rates for those services.” (Id.). Defendants' request for attorneys' fees is based upon Arizona Revised Statute Sections 12-341.01(A) and (B), (Doc. 494 at 9), which provide, in relevant part:

A. In any contested action arising out of a contract, express or implied, the court may award the successful party reasonable attorney fees. . . . This section shall not be construed as altering, prohibiting or restricting present or future contracts or statutes that may provide for attorney fees.
B. The award of reasonable attorney fees pursuant to this section should be made to mitigate the burden of the expense of litigation to establish a just claim or a just defense. It need not equal or relate to the attorney fees actually paid or contracted, but the award may not exceed the amount paid or agreed to be paid.

A.R.S. § 12-341.01(A-B).

         Lexington contends that Defendants are not entitled to reasonable attorneys' fees on the grounds that Defendants are not the successful or prevailing party. (Doc. 503 at 2). In the event the Court decides to award attorneys' fees to Defendants, Lexington alternatively asks that the Court award “a reasonable amount of attorneys' fees actually expended only on the successful aspects of the case” rather than calculate an award under Defendants' contingent fee agreement. (Id.). Additionally, if the Court is inclined to make an award to Defendants, Lexington requests that the Court “make a further equitable deduction of fifty percent (50%) to account for activities related to the meritless counterclaims and the defense of Scott Homes that were lumped into other activities.” (Id.). Accordingly, Lexington argues that “any award of reasonable attorneys' fees to Defendants for their work on successful claims should be no more than $428, 467.53.” (Id.).

         II. Legal Standard

         “[I]n federal cases where the controlling substantive law is state law, such as in diversity cases or as to claims where the court is exercising supplemental jurisdiction, attorneys' fees can be awarded under state law.” Poehler v. Fenwick, No. 2: CV-15-1161-PHX-JWS, 2016 WL 1428095, at *2 (D. Ariz. Apr. 12, 2016) (citation omitted). Under Arizona state law, “In 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). Therefore, to award attorneys' fees under this statute, the Court must find that this action arises out of a contract, that Defendants are the “successful” or prevailing party, that an award of attorneys' fees is appropriate, and that the requested fees are reasonable.

         A. Whether the Claim Arises Out of a Contract

         In determining whether a claim arises out of a contract, the court considers the “nature of the action and the surrounding circumstances.” Marcus v. Fox, 723 P.2d 682, 684 (Ariz. 1986). An action arises out of a contract under A.R.S. § 12-341.01(A) if the action could not exist “but for” the contract, meaning that the presence of a contract is a legal element of the action. See Sparks v. Republic Nat'l Life Ins. Co., 647 P.2d 1127, 1141 (Ariz. 1982); see also Barmat v. John & Jane Doe Partners A-D, 747 P.2d 1218, 1222 (Ariz. 1987) (“Where . . . the duty breached is not imposed by law, but is a duty created by the contractual relationship, and would not exist ‘but for' the contract, then breach of either express covenants or those necessarily implied from them sounds in contract.”). Consequently, A.R.S. § 12-341.01 does not apply if the “contract is only a factual predicate to the action but not the essential basis of it.” Kennedy v. Linda Brock Auto. Plaza, Inc., 856 P.2d 1201, 1203 (Ariz.Ct.App. 1993). Nor does “[t]he mere reference to a contract in a complaint . . . make the action one ‘arising out of contract.'” Dooley v. O'Brien, 244 P.3d 586, 591 (Ariz.Ct.App. 2010).

         B. “Successful” Party

         Under Arizona law, “[t]he trial court has substantial discretion to determine who is a ‘successful party'” when determining an award of attorneys' fees under A.R.S. § 12-341.01. Fulton Homes Corp. v. BBP Concrete, 155 P.3d 1090, 1096 (Ariz.Ct.App. 2007) (citing Pioneer Roofing Co. v. Mardian Constr. Co., 733 P.2d 652, 664 (Ariz.Ct.App. 1986)). “The decision as to who is the successful party for purposes of awarding attorneys' fees is within the sole discretion of the trial court, and will not be disturbed on appeal if any reasonable basis exists for it.” Maleki v. Desert Palms Prof'l Props., L.L.C., 214 P.3d 415, 422 (Ariz.Ct.App. 2009) (quoting Sanborn v. Brooker & Wake Prop. Mgmt., Inc., 874 P.2d 982, 987 (Ariz.Ct.App. 1994)).

         Further, “‘[a]n adjudication on the merits is not a prerequisite to recovering attorneys' fees under [A.R.S. § 12-341.01].'” Med. Protective Co. v. Pang, 740 F.3d 1279, 1283 (9th Cir. 2013) (quoting Fulton Homes Corp., 155 P.3d at 1096). Accordingly, “successful parties” are “not limited to those who have a favorable final judgment at the conclusion of the” action. Wagenseller v. Scottsdale Mem'l Hosp., 710 P.2d 1025, 1048 (Ariz. 1985). “Rather, a party may be successful without recovering ‘the full measure of the relief it requests.'” Med. Protective Co., 740 F.3d at 1283 (quoting Sanborn, 874 P.2d at 987). In like manner, “[n]either does the fact that the amount of the claim is set off or reduced by counterclaim mean that the plaintiff was not the successful party.” Ocean W. Contractors, Inc. v. Halec Const. Co., 600 P.2d 1102, 1105 (Ariz. 1979) (citations omitted). For example, a “party who is awarded a money judgment in a lawsuit is not always the successful or prevailing party, ” although an “award of money is . . . an important item to consider when deciding who, in fact, did prevail.” Id. Furthermore, a party “need not ‘prevail on the merits of the underlying claims' in order to be deemed a successful party under Section 12-341.01.” Med. Protective Co., 740 F.3d at 1283 (quoting Mark Lighting Fixture Co. v. Gen. Elec. Supply Co., 745 P.2d 123, 128 (Ariz.Ct.App. 1986)).

         “To determine whether a party is successful under Section 12-341.01, a court should consider ‘the totality of the circumstances and the relative success of the litigants.'” Id. (quoting McAlister v. Citibank, 829 P.2d 1253, 1262 (Ariz.Ct.App. 1992)). Where a case involves “various competing claims, counterclaims and setoffs all tried together, the successful party is the net winner.” Ayala v. Olaiz, 776 P.2d 807, 809 (Ariz.Ct.App. 1989). In determining who was the prevailing party in such “a case involving multiple claims and varied success, the trial court may apply a ‘percentage of success' or a ‘totality of the litigation' test.Berry v. 352 E. Va., L.L.C., 261 P.3d 784, 788-89 (Ariz.Ct.App. 2011) (quoting Schwartz v. Farmers Ins. Co. of Ariz., 800 P.2d 20, 25 (Ariz.Ct.App. 1990)). Other Arizona courts have also applied a “net judgment” test to determine the prevailing party in situations where both parties are awarded judgments. Vortex Corp. v. Denkewicz, 334 P.3d 734, 745 (Ariz.Ct.App. 2014); see also Am. Power Prods., Inc. v. CSK Auto, Inc., No. 1: CA-CV-12-0855, 2016 WL 2930686, at *2 n.2 (Ariz.Ct.App. May 19, 2016) (indicating that the bright-line net judgment test may best be applied in “moderately simple” cases with claims and counterclaims “for merely monetary damages” that are “not so complex”).

         C. Discretion to Award Attorneys' Fees

         If the court finds that a party is the “successful party” as envisioned in A.R.S. § 12-341.01, the court may then exercise its discretion on whether to award reasonable attorneys' fees. Associated Indem. Corp. v. Warner, 694 P.2d 1181, 1184 (Ariz. 1985). Nevertheless, “there is no presumption that a successful party should be awarded attorney fees under § 12-341.01.” Motzer v. Escalante, 265 P.3d 1094, 1095 (Ariz.Ct.App. 2011); see also Manicom v. CitiMortgage, Inc., 336 P.3d 1274, 1283 (Ariz.Ct.App. 2014) (holding that an award of attorneys' fees under A.R.S. § 12-341.01(A) “is permissive” and “not mandatory”).

         In determining whether to exercise its discretion to award attorneys' fees under § 12-341.01(A), the Arizona Supreme Court concluded in Associated Indemnity that a court may consider, among other factors, the following:

(1) the merits of the unsuccessful parties' claim or defense; (2) whether litigation could have been avoided or settled; (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) the novelty of the issues; and (6) whether the award will overly deter others from bringing meritorious suits.

Velarde v. PACE Membership Warehouse, Inc., 105 F.3d 1313, 1319 (9th Cir. 1997) (citing Associated Indem. Corp., 694 P.2d at 1184).

         Of these Associated Indemnity factors, “[n]o single factor can be determinative and the court is to weigh all of the factors in exercising its discretion.” Am. Const. Corp. v. Phila. Indem. Ins. Co., 667 F.Supp.2d 1100, 1107 (D. Ariz. 2009) (citing Wilcox v. Waldman, 744 P.2d 444, 450 (Ariz.Ct.App. 1987)). However, “[t]he weight given to any one factor is within the court's discretion.” Moedt v. Gen. Motors Corp., 60 P.3d 240, 245 (Ariz.Ct.App. 2002). Finally, because “[a]n award of attorney's fees under A.R.S. § 12-341.01 is discretionary with the trial court, . . . if there is any reasonable basis for the exercise of such discretion, its judgment will not be disturbed.” Schwartz, 800 P.2d at 25 (citing Associated Indem. Corp., 694 P.2d at 1184-85).

         D. “Reasonable” Attorneys' Fees

         Finally, after concluding that awarding attorneys' fees is appropriate under the factors laid out in Associated Indemnity, the court must then decide whether the requested fees are reasonable. Manone v. Farm Bureau Prop. & Cas. Co., No. 3:CV-15-8003-PCT-JAT, 2016 WL 1059539, at *3 (D. Ariz. Mar. 17, 2016). To determine whether the requested attorneys' fees are reasonable, “the Court looks to whether the hourly rate is reasonable and whether the hours expended on the case are reasonable.” Maguire v. Coltrell, No. 2:CV-14-1255-PHX-DGC, 2015 WL 3999188, at *3 (D. Ariz. July 1, 2015) (citing Schweiger v. China Doll Rest., Inc., 673 P.2d 927, 931-32 (Ariz.Ct.App. 1983)).

         Reasonability is generally analyzed under the “lodestar method, ” which has been adopted as “the centerpiece of attorney's fee awards.” Leavey v. UNUM/Provident Corp., No. 2: CV-02-2281-PHX-SMM, 2006 WL 1515999, at *23 (D. Ariz. May 26, 2006) (quoting Blanchard v. Bergeron, 489 U.S. 87, 94 (1989)). “The lodestar method of calculating reasonable attorneys' fees is a two-step process whereby a court multiplies ‘the number of hours reasonably expended by a reasonable hourly rate' and then determines if any of the identified lodestar factors favor enhancing or reducing the arrived at product.” Manone, 2016 WL 1059539, at *3 (quoting Fischer v. SJB-P.D. Inc., 214 F.3d 1115, 1119 (9th Cir. 2000)).

         Courts may also consider the thirteen factors listed in Local Rule of Civil Procedure for the District of Arizona (“Local Rule”) 54.2(c)(3) when determining the reasonableness of an attorneys' fee request. See W. All. Bank v. Jefferson, No. 2: CV-14-0761-PHX-JWS, 2016 WL 1392077, at *1 (D. Ariz. Apr. 8, 2016). These thirteen factors include:

(A) The time and labor required by counsel; (B) The novelty and difficulty of the questions presented; (C) The skill requisite to perform the legal service properly; (D) The preclusion of other employment by counsel because of the acceptance of the action; (E) The customary fee charged in matters of the type involved; (F) Whether the fee contracted between the attorney and the client is fixed or contingent; (G) Any time limitations imposed by the client or the circumstances; (H) The amount of money, or the value of the rights, involved, and the results obtained; (I) The experience, ability and reputation of counsel; (J) The ‘undesirability' of the case; (K) The nature and length of the professional relationship between the attorney and the client; (L) Awards in similar actions; and (M) Any other matters deemed appropriate under the circumstances.

LRCiv 54.2(c)(3).

         Further, “[o]nce a party establishes its entitlement to fees and meets the minimum requirements in its application and affidavit for fees, the burden shifts to the party opposing the fee award to demonstrate the impropriety or unreasonableness of the requested fees.” Nolan v. Starlight Pines Homeowners Ass'n, 167 P.3d 1277, 1285-86 (Ariz.Ct.App. 2007). However, “[i]f that party fails to make such a showing of unreasonableness, the prevailing party is entitled to full payment of the fees.” Geller v. Lesk, 285 P.3d 972, 976 (Ariz.Ct.App. 2012) (citing McDowell Mountain Ranch Cmty. Ass'n, Inc. v. Simons, 165 P.3d 667, 672 (Ariz.Ct.App. 2007)). On the other hand, should “the party opposing the award show[] that the otherwise prima facie reasonable fee request is excessive, the court has discretion to reduce the fees to a reasonable level.” Id.

         The Court “has broad discretion in fixing the amount of attorneys' fees.” Pettay v. Ins. Mktg. Servs., Inc. (W.), 752 P.2d 18, 21 (Ariz.Ct.App. 1987) (citing Associated Indem. Corp., 694 P.2d at 1184). However, “[t]his discretion is limited only to the extent that ‘such award may not exceed the amount paid or agreed to be paid.'” Id. (citing A.R.S. § 12-341.01(B); Lacer v. Navajo Cty., 687 P.2d 400, 404 (Ariz.Ct.App. 1984)).

         III. Analysis

         A. Entitlement to Fees

         Defendants are entitled to an award of reasonable attorneys' fees pursuant to A.R.S. § 12-341.01(A) as this suit involved a contested action arising out of a contract, Defendants were the successful party in this litigation, and the Court will exercise its discretion in awarding attorneys' fees.

         1. The Claim Arises Out of a Contract

         In their request for attorneys' fees under A.R.S. § 12-341.01, Defendants allege that “[t]his action, and all claims alleged herein, arose out of an express contract-the 2002 Lexington Excess Policy.” (Doc. 494 at 9). The Court agrees. Defendants' Motion for Attorneys' Fees continues: “The 2002 Lexington Excess Policy contained both defense and coverage obligations imposed on Lexington and owed to its insured, Scott Homes. Scott Homes' rights under the 2002 Lexington Excess Policy were assigned to Silverbell.” (Id.). Further, Defendants state that Lexington's coverage obligations under this contract “were triggered” when the jury “determined Scott Homes was liable for more than $1 million in ‘property damage' covered under the 2002 Lexington Excess Policy.” (Id. at 9-10).

         Although Lexington contends that “Defendants do not argue that they are entitled to recover their attorneys' fees pursuant to contract, ” but instead “rely solely on A.R.S. § 12-341.01, ” (Doc. 503 at 4-5), this does not dissuade the Court from agreeing with Defendants' contention that this action arose out of an express contract. In support of its argument Lexington cites Sanders v. Boyer, which states, “[u]nder Arizona law the longstanding general rule has been that attorney's fees are not allowed except where expressly provided for by either statute or contract.” 613 P.2d 1291, 1297 (Ariz.Ct.App. 1980). However, it is clear to the Court that A.R.S. § 12-341.01-a statute expressly providing that a court may award attorney fees “[i]n any contested action arising out of a contract, ” A.R.S. § 12-341.01(A) (emphasis added)-meets the mandate of Sanders v. Boyer.

         Further, “[w]hen the contract in question is central to the issues of the case, it will suffice as a basis for a fee award.” In re Larry's Apartment, L.L.C., 249 F.3d 832, 836-37 (9th Cir. 2001). Here, the Lexington Excess Policy was clearly central to the issues of this case. As Defendants pointed out in their Motion for Attorneys' Fees, (Doc. 494 at 9), the Court even previously determined that Lexington had a duty to defend Scott Homes under the Lexington Excess Policy and Lexington's refusal to do so “was a material breach of the Lexington Excess Policy.” (Doc. 323 at 37). As a result, the Court finds that this action and all claims alleged herein arose out of the 2002 Lexington Excess Policy, an express contract.

         2. Defendants are the “Successful” Party

         In their Motion for Attorneys' Fees, Defendants assert that “Silverbell and Scott Homes are the prevailing parties in this litigation.” (Doc. 494 at 6). In support of this argument, Defendants state, “[a] judgment was entered in favor of Silverbell and Scott Homes, and against Lexington Insurance Company [] on October 30, 2015.” (Id.). With damages and pre-judgment interest included, “the total amount of the judgment is $4, 331, 507.67.” (Id.). Defendants maintain that “Silverbell prevailed on both contractual issues relating to Lexington's defense and coverage obligations” and “on all of the Counts for Declaratory Relief alleged by Lexington regarding the 2002 Lexington Excess Policy.” (Id. at 10).

         Lexington, however, states that “Defendants presume, without any analysis, that they are the ‘successful parties' simply because they received a judgment following trial.” (Doc. 503 at 5). Rather, Lexington insists that Defendants do “not meet [the] threshold requirement for an attorneys' fees award” because “under either a ‘percentage of success' or a ‘totality of the litigation' test, neither party is the successful party in this case.” (Id. at 7).[2] Lexington does concede that “Silverbell received a judgment on certain contractual claims at trial.” (Id. at 6). However, Lexington states that it “prevailed on a contractual claim regarding offsets in the parties' post-trial motions” where it “received $2, 589, 999.99 in offsets, which allowed Silverbell to only recover approximately fifty-seven percent (57%) of its requested contractual damages of $6 million.” (Id.).[3] Further, Lexington asserts that “Defendants were unsuccessful on two of the primary issues in this case: Silverbell's extracontractual claims for bad faith and punitive damages.” (Id. at 2). Specifically, Lexington claims that it “prevailed on the merits on Silverbell's $15 million punitive damages counterclaim, and obtained a dismissal of the bad faith counterclaim upon the parties' stipulation[.]” (Id. at 6).

         Despite Lexington's contentions that neither party prevailed in this action, the Court has “substantial discretion” to ascertain which party, if any, was successful. Fulton Homes Corp., 155 P.3d at 1096 (citing Pioneer Roofing Co., 733 P.2d at 664). As each party in this case prevailed on some claims, the Court concludes that a “totality of the litigation” test will most fairly determine the relative success of the parties. See generally Schwartz, 800 P.2d at 25.[4] Under a “totality of the litigation” test, “the Court reviews the multiple claims and whether the parties succeeded on these claims to determine which party is the successful party.” Med. Protective Co. v. Pang, 25 F.Supp.3d 1232, 1239 (D. Ariz. 2014) (citing Berry, 261 P.3d at 788-89). “Only when a defendant's setoffs or counterclaims exceed the amount recovered by the plaintiff is the court barred from finding that the plaintiff was the prevailing party.” Am. Power Prods., Inc., 2016 WL 2930686, at *2 n.3; see Sanborn, 874 P.2d at 987.

         After reviewing each of the multiple claims in this case under the “totality of the litigation” test, the Court finds that Defendants were the successful party. Upon the parties' cross-motions for summary judgment, the Court held that Silverbell was entitled to judgment on Counts I, XII, XIII, XIV, XV, and XVI of Lexington's FAC. (Doc. 323 at 49-50).[5] Accordingly, these claims were dismissed. (Id.). As to Silverbell's Counterclaim, the Court held that Count I (duty to defend and coverage) and Count II (bad faith) remained issues for trial. (Id. at 50). Despite these victories for Defendants, however, the Court determined on summary judgment that “Silverbell is not entitled to punitive damages.” (Id.). Lexington was not awarded summary judgment on any other claims, but the Court did hold that Counts II-XI of Lexington's FAC were “coverage issues to be litigated at trial.” (Id. at 49).[6]

         A few months later, upon stipulation of the parties, (Doc. 404), the Court dismissed with prejudice Count II of Silverbell's Counterclaim for insurance bad faith, (Doc. 406). While Defendants claim that “[t]his was a tactical trial decision by Silverbell and not an acknowledgement of reasonableness by Lexington in its claims handling, ” (Doc. 494 at 14), Lexington contends this dismissal occurred “shortly after [it] prevailed on a critical motion in limine that severely undercut Silverbell's bad faith counterclaim, ” (Doc. 503 at 6). Lexington even states that its success on the motion in limine “led to Silverbell conceding that its bad faith counterclaim had no merit and dismissing this claim on the eve of trial.” (Id. at 9). However, after reviewing the record, the Court finds there is no support for this statement; the Court does not believe Defendant ever expressly conceded that “its bad faith counterclaim had no merit.” (Id.). Even though Lexington includes an email between the parties' counsel in which counsel for Defendants states that “Defendants may be willing to agree to dismiss its bad faith claim for a waiver of fees and costs as to that claim only, and with a stipulation that certain witnesses and evidence would no longer be relevant on the breach of contract/coverage claim only[, ]” (Doc. 504-1 at 15), this is not evidence of Defendants conceding that their bad faith claim “has no merit.” Further, Lexington's assertion that it “obtained a dismissal of the bad faith counterclaim, ” (Doc. 503 at 6), seems to imply that Lexington did so single-handedly when, in fact, Defendants stipulated to the dismissal. Notwithstanding, regardless of any procedural reasons Defendants may have had for their stipulation, the dismissal of the bad faith counterclaim weighs slightly in Lexington's favor.

         Significantly, Defendants prevailed on each Count of Lexington's FAC remaining at the time of trial (Counts II-XI), and on Count I of Silverbell's Counterclaim. (Doc. 486 at 1). Consequently, the Court entered judgment on each of these Counts in favor of Defendants and ordered that Silverbell recover damages in the amount of $3, 410, 000.01, subject to pre-judgment and post-judgment interest, from Lexington. (Id. at 1-2). Although Lexington states that “Silverbell ultimately prevailed at trial on a single coverage issue” after “the jury was asked just one question, which it answered in favor of Silverbell, ” (Doc. 503 at 4), Defendants actually succeeded in “proving that Lexington owed both a defense and coverage/indemnity obligation to Scott Homes, ” (Doc. 494 at 14). Further, Defendants “prevailed on all of the Counts for Declaratory Relief alleged by Lexington regarding the 2002 Lexington Excess Policy.” (Id. at 10). That Defendants obtained relief in the form of monetary damages totaling $4, 331, 507.61 (with pre-judgment interest included) after litigating all of the claims and counterclaims, while Lexington was awarded nothing, “is an important item to consider when deciding who is the prevailing party[.]” Sanborn, 874 P.2d at 987 (citing Ocean W. Contractors, Inc., 600 P.2d at 1105).

         Lexington further contends that its “successful claims and defenses dramatically reduced [the value of] Silverbell's counterclaims from $21 million to $4, 331, 507.67, a reduction of almost eighty percent (80%).” (Doc. 503 at 7). In support of this assertion, Lexington points to its victory on Defendants' punitive damages counterclaim on summary judgment, as well as the stipulated dismissal of Defendants' bad faith counterclaim. (Id.). Lexington also alleges that it “prevailed on a contractual claim regarding offsets in the parties' post-trial motions, ” in which ...

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