United States District Court, D. Arizona
Honorable Roslyn O. Silver, Senior United States District
March 5, 2019, the Court denied without prejudice
Plaintiff's motion for an award of attorneys' fees
and instructed Plaintiff to renew his motion after resolution
of the pending appeal. Plaintiff then filed a motion for
reconsideration, arguing the failure to provide an immediate
ruling on his request for attorneys' fees will “add
significant and unnecessary delay to the final resolution of
this case.” (Doc. 108 at 2). Defendant opposed the
motion for reconsideration by arguing, among other things,
the outcome of the pending appeal might impact
Plaintiff's request for fees. Therefore, Defendant
believes it would be better to address the matter of fees
after the appeal is resolved. Having considered the
parties' positions, the Court will resolve the matter of
fees now so that any appeal from this Order might be
consolidated with the already-pending appeal.
seeks an award of $373, 343.23 for attorneys' fees and
non-taxable costs. Defendant concedes Plaintiff is entitled
to most of what he requests but Defendant argues a complete
award would be an inappropriate “windfall” and
“punitive.” (Doc. 99 at 4, 6). Plaintiff's
properly supported request for fees shifted the burden to
Defendant to demonstrate, through specific objections, why
the amount requested was unreasonable. Defendant made very
limited objections and those objections are not convincing.
Accordingly, Plaintiff is entitled to almost all the fees and
costs he seeks.
seeks an award of attorneys' fees pursuant to A.R.S.
§ 12-341.01. That statute allows for a “successful
party” in an “action arising out of
contract” to recover his “reasonable attorney
fees.” A.R.S. § 12-341.01(A). Arizona courts have
set out a clear sequence how requests for fees under §
12-341.01 should be resolved. First, the party seeking fees
bears the burden of establishing it was the “successful
party.” Assuming a party does so, that same party also
bears the burden of establishing an award of fees is
appropriate under a multi-factor test. Associated Indem.
Corp. v. Warner, 694 P.2d 1181, 1183 (Ariz.1985)
(listing factors). The successful party must also submit an
application identifying “the type of legal services
provided, the date the service was provided, the attorney
providing the service . . ., and the time spent in providing
the service.” Schweiger v. China Doll Rest.,
Inc., 673 P.2d 927, 932 (Ariz.Ct.App. 1983). If those
first three requirements are met, “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, 1286 (Ariz.Ct.App. 2007).
party opposing the fee award must do more than make
“broad challenges to the application.”
Id. For example, it is not enough to make vague
claims that “the hours claimed are excessive and the
rates submitted too high.” Id. Rather, the
party opposing the fee award “must provide specific
references to the record and specify which amount or items
are excessive.” In re Indenture of Tr. Dated Jan.
13, 1964, 326 P.3d 307, 319-20 (Ariz.Ct.App. 2014). In
the absence of specific objections, a court “is not
obligated to search the record to determine” the
propriety of the amount requested. State ex rel. Corbin
v. Tocco, 845 P.2d 513, 521 (Ariz.Ct.App. 1992).
present case, Defendant concedes Plaintiff was the
“successful party” entitled to an award of
attorneys' fees under § 12-341.01. Defendant also
concedes an award of fees would be appropriate. That is,
Defendant concedes the multi-factor test required by Arizona
law supports an award of fees. Given those concessions,
normally the only remaining issues would be whether Plaintiff
submitted adequate documentation and whether Defendant has
provided specific objections to that documentation. Here,
however, there is an additional complication regarding the
amount Plaintiff seeks.
supporting documentation, Plaintiff establishes his attorneys
billed “538.4 hours at a standard billed value . . . of
$244, 791.50.” (Doc. 94 at 13). Plaintiff requests more
than that amount. Plaintiff explains he has a contingency fee
agreement requiring he pay counsel one-third of any judgment
recovered. Thus, Plaintiff believes he is entitled to an
award of $351, 306.82 in attorneys' fees, representing
one-third of the judgment entered against Defendant.
Arizona Supreme long-ago recognized § 12-341.01 allows
for an award of attorneys' fees when there is a
contingency-fee agreement. Sparks v. Republic Nat. Life
Ins. Co., 647 P.2d 1127, 1143 (Ariz. 1982). But
“[w]hen a contingency agreement is involved, the
contingency agreement should not be used as the basis for an
award.” Estate of Snell v. Martin, No. 1 CA-CV
17-0629, 2018 WL 6495397, at *3 (Ariz.Ct.App. Dec. 11, 2018).
“Instead, the agreed-upon contingency is a maximum
amount” the Court can award. Id. When there is
a contingency agreement, a court must first determine the
“lodestar.” If the lodestar is less than the
amount required by the contingency agreement, the court must
determine if an award higher than the lodestar is
“lodestar” is the “number of hours
reasonably expended on the litigation multiplied by a
reasonable hourly rate.” Bogard v. Cannon &
Wendt Elec. Co., 212 P.3d 17, 28 (Ct. App. 2009).
Plaintiff's hourly rates are within the reasonable rates
charged in the Phoenix community for work of this type and,
in any event, Defendant does not challenge the hourly rates.
Next, Plaintiff's application contains detailed time
entries regarding the services performed. Those detailed
billing records were sufficient to shift the burden to
Defendant to establish “the impropriety or
unreasonableness of the requested fees.”
Nolan, 167 P.3d at 1286. Defendant's opposition
to the motion for fees presents no substantive
objections to the number of hours. In fact, Defendant argues
the Court should award fees “on an Hourly Basis.”
(Doc. 99 at 10). Accordingly, Defendant has effectively
conceded the correct lodestar is $244, 791.50.
final question, therefore, is whether the Court should depart
from the lodestar and award Plaintiff the full amount he
requests. Arizona courts have stressed that awards beyond the
lodestar must be supported by “[e]vidence of
reasonableness.” Crews v. Collins, 680 P.2d
216, 218 (Ariz.Ct.App. 1984). See also Cont'l
Townhouses E. Unit One Ass'n v. Brockbank, 733 P.2d
1120, 1129 (Ariz.Ct.App. 1986) (noting contingency fee of 40%
must be assessed for reasonableness). Those courts have not,
however, outlined specific factors for a court to consider.
It appears the decision whether to award more than the
lodestar is simply left to the Court's discretion, to be
guided by “the facts and consequences of each
case.” London v. Green Acres Tr., 765 P.2d
538, 549 (Ariz.Ct.App. 1988).
seeking an enhancement to the lodestar, Plaintiff points to
Defendant's actions throughout this case. In particular,
Plaintiff points out Defendant denied Vicente's signature
was a forgery for most of this case. It was not until summary
judgment that Defendant admitted the signature was a forgery.
Had Defendant made that admission earlier, Plaintiff could
have avoided “much of the discovery, attorney work and
expenses that occurred.” (Doc. 102 at 7). Plaintiff
also explains Defendant made this litigation difficult in
ways beyond refusing to admit facts, such as by delaying its
discovery responses and producing new evidence after the
entry of judgment. Plaintiff also argues an enhancement to
the lodestar is appropriate because counsel accepted the case
with “no guarantee of payment.” (Doc. 102 at 4).
According to Plaintiff, his “counsel took a substantial
(and ongoing) risk to pursue a valid claim.” (Doc. 102
does not respond with any explanation of its behavior during
this litigation or any convincing reason to believe
enhancement for the risk of non-payment would be
inappropriate. Generally, Arizona courts are hesitant to
increase the lodestar. See, e.g., Timmons v.
City of Tucson, 830 P.2d 871, 878 (Ariz.Ct.App. 1991).
But the circumstances of this case-including Defendant's
behavior and the risk of non-payment- support the relatively
minor enhancement Plaintiff seeks. Plaintiff will be awarded
$351, 306.82 in attorneys' fees.
attorneys' fees, Plaintiff also seeks $8, 144.00 in legal
research expenses and $13, 892.41 in “non-taxable
costs.” The Arizona Supreme Court “permit[s]
recovery of computerized research expenses as an element of
an award of attorneys' fees.” Ahwatukee Custom
Estates Mgmt. Ass'n, Inc. v. Bach, 973 P.2d 106, 109
(Ariz. 1999). Thus, Plaintiff will be awarded his legal
research expenses. But the “non-taxable” costs
cannot be awarded under A.R.S. § 12-341 nor §
12-341.01. See Keg Restaurants Arizona, Inc. v.
Jones, 375 P.3d 1173, 1188 (Ariz.Ct.App. 2016) (noting
expert witness fees were “nontaxable costs” that
could not be awarded under § 12-341 or 12-341.01);
Ahwatukee Custom Estates Mgmt. Ass'n, Inc. v.
Bach, 973 P.2d 106, 107-08 (Ariz. ...