Free Motion for Attorney Fees - District Court of Arizona - Arizona

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LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

Dan W. Goldfine (#018788) Richard G. Erickson (#019066) Adam Lang (#022545) SNELL & WILMER L.L.P. One Arizona Center 400 East Van Buren Street Phoenix, AZ 85004-2202 Telephone: (602) 382-6000 Facsimile: (602) 382-6070 [email protected] [email protected] [email protected] Attorneys for Plaintiff and Counterdefendant Meritage Homes Corporation and Third Party Defendants Steve Hilton, John Landon, and Larry Seay IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA Meritage Homes Corporation, a Maryland Corporation, formerly d/b/a Meritage Corporation, Hancock-MTH Builders, Inc., an Arizona corporation, Hancock-MTH Communities, Inc., an Arizona corporation, and currently d/b/a Meritage Homes Construction, Inc., an Arizona corporation, and Meritage Homes of Arizona, Inc., an Arizona corporation, Plaintiffs, v. Ricky Lee Hancock and Brenda Hancock, husband and wife; Gregory S. Hancock and Linda Hancock, husband and wife, Rick Hancock Homes L.L.C., an Arizona limited liability company; RLH Development, L.L.C., an Arizona limited liability company; and J2H2, L.L.C., an Arizona limited liability company, Defendants. Greg Hancock, an individual, Defendant, Counter-Claimant, and Third Party Plaintiff, v. Steven J. Hilton, an individual; John R. Landon, an individual; Larry W. Seay, an individual; and Snell & Wilmer, L.L.P., an Arizona professional corporation, Third Party Defendants. Case No. CV-04-0384-PHX-ROS MOTION FOR INTERIM ATTORNEY FEES AGAINST GREG HANCOCK

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Snell & Wilmer L.L.P.

Case 2:04-cv-00384-ROS

Document 302

Filed 04/14/2006

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LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

Pursuant to Fed. R. Civ. P. 54(d)(2) and LRCiv 54.2(b)(1), plaintiff and counterdefendant Meritage Homes Corporation and third-party defendants Steven J. Hilton, John R. Landon, and Larry W. Seay (collectively, the "Third-Party Defendants") move for an interim award of their reasonable attorneys' fees and nontaxable costs against defendant and counter-claimant Greg Hancock ("Hancock"). Meritage Homes is entitled to its fees and costs for two overlapping reasons, one of which also entitles the Third-Party Defendants (all Meritage Homes officers) to recover their fees and costs. First, Meritage Homes is entitled to its fees and costs because the agreements between Hancock and Meritage Homes which Hancock claimed were violated expressly provide that the successful party in any dispute arising out of them shall be entitled to reasonable attorneys' fees and costs. For example, Paragraph 16 of the Employment Agreement, the heart of Hancock's claims, provides: [In] [a]ny dispute, controversy, or claim, whether contractual or non-contractual, between the parties hereto arising directly or indirectly out of or connected with this [Employment] Agreement . . . [t]he arbitrator(s) shall award reasonable attorneys fees and costs to the prevailing party. (emphasis added). Also, the Master Transaction Agreement, which was also central to Hancock's claims, provides in Paragraph 11.8: If any legal action . . . is brought for the enforcement of this Agreement, or because of an alleged dispute, breach, default, or misrepresentation in connection with any of the provisions of this Agreement, the successful or prevailing party or parties shall be entitled to recover reasonable attorneys' fees, accounting fees, and other costs incurred in that action or proceeding, in addition to any other relief to which it or they may be entitled. (emphasis added.) And the Asset Purchase Agreement mandates attorneys' fees and costs

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Snell & Wilmer L.L.P.

as well in Paragraph 5.8: 25 26 27 28 If any legal action . . . is brought for the enforcement of this Agreement, or because of an alleged dispute, breach, default, or misrepresentation in connection with any of the provisions of this Agreement, the successful or prevailing party or parties shall be entitled to recover reasonable attorneys' fees, accounting fees, and other costs incurred in that action or
Document 302- 2 - Filed 04/14/2006

Case 2:04-cv-00384-ROS

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LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

proceeding, in addition to any other relief to which it or they may be entitled. (emphasis added). Second, as to both Meritage Homes and the Third-Party Defendants, Arizona law provides that they are entitled to their reasonable attorneys' fees and costs. It is a matter of black letter Arizona law that a successful party in an action "arising out of a contract" is eligible to recover its reasonable attorneys' fees. A.R.S. § 12-341.01(A). Additionally, a successful party is also entitled to recover its attorneys' fees for the fees expended in defending tort claims that are "interwoven" with the contract claims. See, e.g., Ramsey Air Meds, L.L.C. v. Cutter Aviation, 198 Ariz. 10, 13, 6 P.3d 315, 318 (App. 2000); Pettay v. Insur. Mktg. Servs., 156 Ariz. 365, 368, 752 P.2d 18, 21 (App. 1987); Campbell v. Westdahl, 148 Ariz. 432, 440-41, 715 P.2d 288, 296-97 (App. 1985). Hancock's counterclaims and third-party claims directly arise out of or relate to or are interwoven with contracts, including but not necessarily limited to the following agreements between Meritage Homes and Hancock: the Employment Agreement, the Master Transaction Agreement, the License Agreement, and the Agreement of Purchase and Sale of Assets. Hancock admits as much. In seeking relief in his counterclaim and third-party complaint, Hancock alleged that "[a]s the matter has arisen primarily out of a contractual relationship between the parties, [he sought] attorneys' fees in such amount as the Court shall award, together with costs and disbursements herein[.]" (See Defendant Greg Hancock's Answer to Plaintiff's First Amended Complaint; Counterclaim; Third Party Complaint at 12:16-18.) Further, in his response to an initial form of judgment in the Maricopa County Superior Court action Hancock v. Meritage Corporation, et al., No. CV2004-017311, Hancock also acknowledges that "[t]here is no doubt that the dispute between plaintiff (Greg Hancock) and defendant Meritage arises out of contract ­ several contracts, in fact." (See Greg Hancock's Objection to Form of Order and Request for Reconsideration at 2:25-2:26.) (emphasis added). And as this Court noted in the March 31, 2006 Order, "[a]ll of these claims [brought by Hancock as counterclaims and third-

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Snell & Wilmer L.L.P.

Case 2:04-cv-00384-ROS

Document 302- 3 - Filed 04/14/2006

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LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

party claims in this Court] are virtually identical to those brought in Arizona state court on September 8, 2004." (See Order at 3:1 n.2.) Meritage Homes and the Third-Party Defendants are the successful parties as a result of the Court dismissing this counterclaim and third-party complaint with prejudice. Their fair estimate of the interim fees incurred to date, not including the briefing of the motion for attorneys' fees may reach $395,000.00. They will file their Memorandum of Points and Authorities and supporting documentation in the timeframe provided under LRCiv 54.2(b)(2). DATED this 14th day of April, 2006. SNELL & WILMER L.L.P.

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Case 2:04-cv-00384-ROS

By s/ Adam E. Lang Dan W. Goldfine Richard G. Erickson Adam Lang One Arizona Center Phoenix, AZ 85004-2202 Attorneys for Plaintiff and Counterdefendant Meritage Homes Corporation and Third Party Defendants Steve Hilton, John Landon, and Larry Seay CERTIFICATE OF SERVICE I hereby certify that on April 14, 2006, I electronically transmitted the foregoing document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants: Ivan K. Mathew Mathew & Mathew, P.C. 1850 N. Central Avenue, Suite 1910 Phoenix, Arizona 85004 Attorneys for Defendant Rick Hancock Robert M. Frisbee Frisbee & Bostock, PLC 1747 East Morton Avenue Suite 108 Phoenix AZ 85020 Attorneys for Defendant Greg Hancock

Snell & Wilmer L.L.P.

Document 302- 4 - Filed 04/14/2006

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Mark I. Harrison Sarah Porter Osborn Maledon, P.A. 2929 North Central Avenue Suite 2100 Phoenix, Arizona 85012-2794 Attorneys for Defendant Greg and Linda Hancock and Counsel of Record Robert Frisbee Kenneth J. Sherk Timothy J. Burke Fennemore Craig, P.C. 3003 N. Central Ave. Suite 2600 Phoenix, AZ 85012-2913 Attorneys for Defendant Snell & Wilmer, L.L.P. in State Court Action s/ Adam E. Lang
1819997.2

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LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

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Case 2:04-cv-00384-ROS Document 302- 5 - Filed 04/14/2006 Page 5 of 5

Snell & Wilmer L.L.P.