United States District Court, D. Arizona
G. CAMPBELL UNITED STATES DISTRICT JUDGE.
Community Insurance Group SPC Limited (CIG) has filed a
motion for attorneys' fees and non-taxable expenses
pursuant to Local Rule 54.2 and A.R.S. §§ 12-341
and 12-341.01. Doc. 199. The motion is fully briefed, and
neither party has requested oral argument. The Court will
grant the motion in part.
case involved a dispute over insurance coverage for a
physician, Dr. Anthony Schwartz, who was sued for medical
negligence. Dr. Schwartz had a professional liability policy
through Plaintiff Admiral Insurance Company
(“Admiral”). Dr. Schwartz was employed by the
Bullhead City Clinic (the “Clinic”), and the
Clinic had its own liability policy through Defendant
Community Insurance Group SPC Limited (“CIG”).
Admiral filed this action against CIG on August 14, 2014,
seeking equitable contribution for payments it made on behalf
of Dr. Schwartz. Doc. 1.
filed motions to dismiss (Doc. 12), to file a sur-reply (Doc.
32), and to strike (Doc. 36), which were denied (Doc. 37).
CIG then filed a motion for reconsideration (Doc. 42), which
was also denied (Doc. 51). Following discovery, the parties
briefed extensive cross-motions for summary judgment. Docs.
121, 122, 128, 129, 130, 148, 149, 150, 153, 154, 155. On
August 26, 2016, the Court held a conference with the parties
and directed that the motions be briefed in a more focused
manner. Doc. 160. All pending motions were denied, and the
parties filed simultaneous cross-motions for summary judgment
and simultaneous responses. Docs. 189, 190, 191, 192, 193,
194, 195, 196. On November 22, 2016, the Court entered
judgment in favor of CIG and against Admiral. The Court
concluded that the Clinic policy provided excess coverage and
did not trigger the Admiral Policy's “other
insurance” clause. Doc. 197.
December 6, 2016, CIG filed this motion for attorneys'
fees, seeking $256, 376.41. Doc. 199. The request includes
“attorneys' fees through the summary judgment
ruling, for its computerized research expenses, and for
fifteen hours of attorney time for preparing this fee
application.” Id. at 11. CIG also seeks
non-taxable expenses of $39, 407.36, in addition to taxable
costs listed in the Bill of Costs filed separately.
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
such an award. 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. 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.
case arose out of contract. See Docs. 199, 201;
see also Cal. Cas. Ins. Co. v. Am. Family Mut. Ins.
Co., 94 P.3d 616, 622 (Ariz.Ct.App. 2004) (affirming
award of attorneys' fees pursuant to A.R.S. §
12-3451.01 for equitable contribution). Accordingly, the
Court will determine whether fees should be awarded by
turning to the factors in Associated Indemnity, 694
P.2d at 1184.
Merits of the Claims.
Admiral Policy undisputedly provided primary coverage for Dr.
Schwartz, and the Clinic paid approximately $250, 000 in
premiums to Admiral for that coverage. Furthermore, Admiral
was provided with an insurance certificate prior to
litigation demonstrating that the CIG policy provided excess
coverage to Dr. Schwartz. Admiral argues that its claims were
not without merit because it survived both a motion to
dismiss and a motion for reconsideration. Doc. 201 at 7. But
the fact that Admiral was able to state a claim does not mean
that the claim had merit. When facts from both sides were
considered, Admiral lost at summary judgment. This factor
favors CIG's request for attorneys' fees.
Litigation could have been avoided.
brought this action. The parties engaged in attempts at
private mediation and settlement, but all attempts failed.
Admiral argues that CIG prolonged the litigation by failing
to turn over the CIG Policy, a point which has some merit.
But no settlement was reached even after the CIG Policy was
disclosed. The Court concludes that CIG's actions were
not superfluous in achieving the ultimate result; they were