United States District Court, D. Arizona
ORDER
Honorable Rosemary Marquez United States District Judge
Pending
before the Court is Defendant USAA Federal Savings Bank's
Motion for Attorneys' Fees. (Doc. 86.) Plaintiff
homeowners brought this action against Defendant seeking to
enjoin the foreclosure and trustee's sale of their house.
(Doc. 35.) Plaintiffs asserted, among other things, that
Defendant had exceeded the statute of limitations to bring a
foreclosure action stemming from Plaintiffs' default on a
Home Equity Line of Credit (“HELOC”).
(Id.) The Court granted summary judgment on all
claims in favor of Defendant. (Doc. 83.) The Court, however,
enjoined the trustee's sale of the home pending
Plaintiffs' appeal to the Ninth Circuit. (Doc. 98.)
Defendant requests an order awarding $114, 928.91 in
attorneys' fees and nontaxable expenses. (Doc. 86.)
Plaintiffs have filed a Response in Opposition (Doc. 94) and
Defendant has filed a Reply (Doc. 95).
A.
Contractual Entitlement to Fees and Costs
Defendant
first alleges that the deed of trust securing Plaintiffs'
loan requires the recovery of attorneys' fees and costs.
(Doc. 86 at 2.) That deed of trust secured the first of
multiple HELOC loans and provided that “[i]f Grantor
breaches any covenant in this Security Instrument, Grantor
agrees to pay all expenses Lendor incurs in performing such
covenants or protecting its security interest in the
Property.” (Doc. 65-3 at 4.) It specified that such
“amount may include, but is not limited to,
attorneys' fees, court costs, and other legal
expenses.” (Id.)
Arizona's
statute governing the award of attorneys' fees arising
from a contract does not “alter[], prohibit[], or
restrict[]” a contract that otherwise “provide[s]
for attorney fees.” A.R.S. § 12-341.01.
Consequently, “when a contract has an attorney's
fee provision it controls to the exclusion of the
statute.” Am. Power Prods., Inc. v. CSK Auto,
Inc., 396 P.3d 600, 604 (Ariz. 2017) (quoting Lisa
v. Strom, 904 P.2d 1239, 1242 n.2 (Ariz. App. 1995)).
Therefore, if a contractual provision settles the question of
fees and costs, the Court need not conduct a statutory
analysis.
However,
it is far from clear that the contractual provision cited by
Defendant applies here. This action was brought by Plaintiffs
in a collateral challenge to a trustee's sale of
property. Plaintiffs based their arguments on A.R.S. §
12-548 and A.R.S. § 33-816, which together provide that
a trustee's sale or foreclosure action must take place
within a six-year statutory period. (Doc. 1-3.)
As
noted, the contractual provision cited by Defendant provides
an entitlement to attorneys' fees arising from efforts to
protect its security interest following a breach of any
covenant in the agreement. (Doc. 65-3 at 4.) There is little
doubt that Plaintiffs' failure to pay on their mortgage
constituted a breach of a covenant. Defendant, however, has
failed to establish that any fees it incurred defending
this action were caused by that breach. Rather, it
appears that any fees incurred in this action were
proximately caused by Defendant's decision to postpone
acting to preserve its security interest in the property
until such time had passed that Plaintiffs had gained a
colorable argument that the statute of limitations had run.
Moreover,
although this Court did ultimately decline to accept
Plaintiffs' argument that the statute of limitations
barred Defendant's foreclosure action, Defendant does not
establish that Plaintiffs' conduct in bringing this
collateral action constituted a breach of any covenant.
Accordingly, the Court finds that the contractual provision
cited does not govern, and so the Court proceeds to an
analysis of the claimed statutory bases for an award of costs
and fees.
B.
Costs
Defendant
claims that it incurred nontaxable expenses in the amount of
$2, 672.41. (Doc. 86.) Defendant has provided an itemized
statement of its costs. (Doc. 86-4.)
In a
diversity action, federal law governs an award of taxable
costs. Felix v. Pic- N-Run, Inc., No. CV
09-8015-PCT-JAT, 2012 WL 551645, at *4 (D. Ariz. Feb. 21,
2012) (citing Aceves v. Allstate Ins. Co., 68 F.3d
1160, 1167 (9th Cir.1995) (applying federal procedure instead
of state procedure to determine the amount of costs); see
also 28 U.S.C. § 1920; Fed.R.Civ.P. 54(d)(1);
LRCiv. 54.1(a).
Although
Defendant describes its request as one for “nontaxable
costs, ” many of the listed costs are in fact taxable
under LRCiv 54.1(e). Defendant requests costs for obtaining a
copy of the complaint, which are taxable under LRCiv
54.1(e)(5), various filing fees, all of which are taxable
under LRCiv 54.1(e)(1), costs of producing court copies of
filings, which are taxable under LRCiv. 54.1(e)(5), and
deposition costs, which are taxable under LRCiv. 54.1(e)(3).
(Doc. 86-4.)
Under
LRCiv. 54.1(a), a party seeking taxable costs must, within
fourteen days, file a bill of costs on a form provided by the
Clerk of Court and attach documentation supporting the
requested costs. The docket reflects that no such bill of
costs was filed. The time for so filing has passed. Defendant
will therefore not recover these costs.
In
addition to the above taxable costs, Defendant also requests
costs that are properly considered nontaxable, including for
postage, parking, and delivery fees. (Doc. 86-4.) Defendant
relies on A.R.S. § 12-341.01 as a basis for recovery of
these nontaxable expenses. But the Arizona Supreme Court has
explained that, with limited exceptions, non-taxable costs
cannot be recovered under § 12-341.01. Ahwatukee
Custom Estates Mgmt. Ass'n, Inc. v. Bach, 973 P.2d
106, 107 (Ariz. 1999). The exceptions, including the cost of
computerized legal research and the cost of ...