United States District Court, D. Arizona
V. Wake Senior United States District Judge
the Court is Preston Collection Inc.'s Motion for an
Award of Attorneys' Fees and Non-Taxable Costs (Doc. 66).
case arises out of an agreement dated December 29, 2009 by
which Steven Youtsey acknowledged his personal debt to Kun-Te
Yang in the amount of $1, 142, 500.00 (“Youtsey
Personal Loan”). On March 19, 2015, Yang transferred to
Preston Collection Inc. all of his rights, title, and
interest in and to the Youtsey Personal Loan, including all
rights to enforce the loan and to recover and collect all
amounts due thereunder.
April 3, 2015, Preston sued Youtsey for breach of contract to
recover and collect all amounts due under or arising from
enforcement of the Youtsey Personal Loan. On September 5,
2017, the Court granted summary judgment in Preston's
favor. On October 4, 2017, judgment was entered in favor of
Preston and against Youtsey in the amount of: (1) the
principal amount of $1, 142, 500.00, plus (2) pre-judgment
interest to October 4, 2017, in the amount of $866, 108.77 at
the rate of 10% per annum simple interest, plus (3)
post-judgment interest on $2, 008, 608.77 (the sum of amounts
(1) and (2)) at the federal rate of 1.31% per annum from the
date of entry of judgment (October 4, 2017) until paid. The
October 4, 2017 judgment awarded Preston all of the relief it
seeks award of attorney fees under A.R.S. §
Whether to Award Attorney Fees
§ 12-341.01(A) provides: “In any contested action
arising out of a contract, express or implied, the court may
award the successful party reasonable attorney fees.”
An award of fees under § 12-341.01 is discretionary.
Fulton Homes Corp. v. BBP Concrete, 214 Ariz. 566,
569, 155 P.3d 1090, 1093 (Ct. App. 2007). The statute does
not establish a presumption that attorney fees be awarded in
contract actions. Associated Indem. Corp. v. Warner,
143 Ariz. 567, 569, 694 P.2d 1181, 1183 (1985). In
determining whether attorney fees should be granted under
§ 12-341.01, trial courts may consider the following
factors: the merits of the unsuccessful party's case,
whether the litigation could have been avoided or settled,
whether assessing fees against the unsuccessful would cause
an extreme hardship, the degree of success by the successful
party, any chilling effect the award might have on other
parties with tenable claims or defenses, the novelty of the
legal questions presented, and whether such claim had
previously been adjudicated in this jurisdiction.
Id. at 570, 694 P.2d at 1184.
does not contend that Preston should be awarded no attorney
fees. Preston was entirely successful. The legal questions
were not novel, and many breach of contract claims had
previously been adjudicated in this jurisdiction. Youtsey
admitted that he signed a document acknowledging that he owed
Kun-Te Yang a balance of $1, 142, 500.00 on a personal loan.
He did not assert that he had made any subsequent payments on
his debt to Yang. Youtsey could have avoided the litigation
by paying his debt. Yang does not explicitly assert that a
fee award would cause him an extreme hardship, and he
provides no evidence regarding his financial condition. These
factors weigh in favor of awarding Preston attorney fees
under A.R.S. § 12-341.01(A).
What Constitutes Reasonable Attorney Fees
a litigant establishes entitlement to a fee award, the
touchstone under § 12-341.01 is the reasonableness of
the fees.” Assyia v. State Farm Mut. Auto. Ins.
Co., 229 Ariz. 216, 222, 273 P.3d 668, 674 (Ct. App.
2012). “The award of reasonable attorney fees pursuant
to [§ 12-341.01] 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.
determine reasonable attorney's fees in commercial
litigation, courts begin by determining the actual billing
rate that the lawyer charged in the particular matter.
Schweiger v. China Doll Rest., Inc., 138 Ariz. 183,
187, 673 P.2d 927, 931 (Ct. App. 1983). If persuaded that the
contracted hourly rates are unreasonable, courts may use a
lesser rate. Id. at 188, 673 P.2d at 931.
the Arizona Supreme Court's Rules of Professional
Conduct, factors to be considered in determining the