United States District Court, D. Arizona
V. WAKE SENIOR UNITED STATES DISTRICT JUDGE.
the Court is EZconn Corporation's Motion for an Award of
Attorneys' Fees and Related Non-Taxable Expenses (Doc.
case arises out of a business relationship between EZconn and
PCT International, Inc., which included contracts for EZconn
to manufacture and provide products to PCT. During 2012 and
2013, EZconn supplied products to PCT, and PCT made partial
payments on some of the invoices for those products. After
credit for partial payments and offsets, the total unpaid
amount of outstanding invoices was $6, 629, 046.55 and the
accrued interest through October 31, 2016, on the unpaid
balance was $2, 283, 535.87. PCT did not dispute the amount
owed for the unpaid invoices or the amount of accrued
interest EZconn claimed on the unpaid invoices.
February 24, 2016, EZconn sued PCT for breach of contract to
recover and collect all amounts due regarding the unpaid
invoices. On August 30, 2017, the Court granted summary
judgment in EZconn's favor. Judgment was entered in favor
of EZconn and against PCT for (1) the principal amount of $6,
629, 046.55, plus (2) pre-judgment interest to August 30,
2017, in the amount of $2, 833, 837.54 at the rate of 10% per
annum simple interest, plus (3) post-judgment interest on $9,
462, 884.09, the sum of amounts (1) and (2), at the federal
rate of 1.23% per annum from the date of entry of judgment
(August 30, 2017) until paid. The August 30, 2017 judgment
awarded EZconn all of the relief it sought.
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.
contends, and PCT does not dispute, that all of the relevant
factors weigh in favor of awarding EZconn attorney fees under
§ 12-341.01. EZconn was entirely successful in this
action. The legal questions were not novel, and many breach
of contract claims had previously been adjudicated in this
jurisdiction. PCT did not dispute the amount it owed EZconn
for the unpaid invoices and could have avoided this
litigation by paying its debt. PCT does not assert that a fee
award would cause it extreme hardship.
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