Free Reply - District Court of Arizona - Arizona

1 RYLEY CARLOCK & APPLEWHITE One North Central Avenue, Suite 1200 2 Phoenix, Arizona 85004-4417 Telephone: 602/258-7701 3 Telecopier: 602/257-9582 4 Charles L. Chester ­ 002571 Matthew T. Clarke ­ 018281 5 Attorneys for Defendants 6 7 8 9 10 11 12 13 14 15 16 17 18 19 I. The Court may Properly Award Fees on All State Based Claims. Under Arizona law a successful party to a tortious interference with contract claim may recover attorney fees under §12-341.01(A). Rutledge v. Arizona Board of Regents, 147 Ariz. 534, 711 P.2d 1207 (App. 1985). Plaintiff asserts (Response at p. 2UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA JOHN KILLINGSWORTH, a married man, Plaintiff, vs. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, and DAVE GONZALES, Defendants.

No. CIV-03-1950-PHX-NVW REPLY IN SUPORT OF DEFENDANTS' MOTION FOR ATTORNEYS' FEES The Honorable Neil V. Wake

20 4) that Rutledge was overruled by the Arizona Supreme Court in a decision that 21 "controls" this issue, citing Bar J. Bar Cattle Co. v. Pace, 158 Ariz. 481, 763 P.2d 545 22 (App. 1988). Plaintiff is wrong. 23 Bar J Bar Cattle, is an Arizona Court of Appeals case, and not an Arizona 24 Supreme Court case. Importantly it does not "control" the issue before this Court. 25 The law in this area is governed by and clarified in two Arizona Supreme Court 26 cases, Sparks v. Republic National Life Ins., 132 Ariz. 529, 647 P.2d 1127 (1982) and 27 Barmat v. John and Jane Doe Partners A-D, 155 Ariz. 519, 747 P.2d 1218 (1987). 28 "[A]ttorney's fees may be awarded pursuant to §12-341.01(A) based upon facts which
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1 show a breach of contract, the breach of which may also constitute a tort. The fact that 2 two legal theories are intertwined does not preclude recovery of attorney's fees under 3 §12-341.01(A) as long as the cause of action in tort could not exist but for the breach of 4 contract." Sparks, 132 Ariz. at 543, 647 P.2d at 1141; Barmat, 155 Ariz. at 522, 747 5 P.2d at 1221. 6 Plaintiff argues fees are not recoverable for defense of Plaintiff's interference

7 with contract claim, based upon the decision of the Arizona Court of Appeals, Division
1 8 One in Bar J Bar Cattle. The facts of that case are distinguishable. In Bar J. Bar Cattle

9 there were three parties: Bar J Bar Cattle Company ("Bar J"), Pace, and the state of New 10 Mexico. Bar J sued Pace alleging intentional interference with Bar J's expectation that 11 it could purchase land from New Mexico. Bar J did not have a contract for the sale of 12 land. Because there was no contract from which a tort could arise, the Sparks "but for" 13 test could not be met. See also, Barmat, 155 Ariz. at 523, 747 P.2d at 1222 ("where the 14 cause of action does not depend on the existence of a contract . . . the `but for' test of 15 Sparks is not satisfied" and "§12-341.01(A) is not applicable..."). 16 Conversely, in Rutledge there was a contract between the litigating parties.

17 There, plaintiff sued defendants for intentional interference with his contractual 18 relationship with the defendants. Following a defense verdict the trial court awarded

19 the defendants attorney fees. On appeal, Rutledge argued that an intentional interference 20 with contract claim is a tort that does not arise from contract for purposes of §1221 341.01(A). Relying on Sparks, the Arizona Court of Appeals, Division One rejected the 22 argument and upheld the award of fees, noting that "clearly" the claim for "intentional 23 24 Plaintiff focuses on a single sentence from Bar J Bar Cattle: "The duty not to interfere with the contract of another arises out of law, not contract." 158 Ariz. at 486, 763 P.2d 26 at 550. That statement can only be understood in the factual context of that case and in relationship to the sentence immediately preceding it, to wit: "[I] the case before us 27 there was no contractual relationship between Bar J Bar and Pace." Absent a contract between the parties, the tort alleged by plaintiff could only arise if at all, by implication 28 of law. 25
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1 interference with contractual relations . . . would not exist but for the alleged breach of 2 contract" (emphasis original). Rutledge, 147 Ariz. at 557, 711 P.2d at 1230. 3 An analysis of caselaw demonstrates a single fundamental principle--for a tort to

4 arise from contract the elements of the tort must include a breach of contract. In 5 Rutledge, as here, breach of contract is part of the prima facie case for intentional 6 interference with contract. Thus the duty to not interfere with the contract arises from 7 contract, not tort. 8 As argued in Defendants' opening brief, Rutledge is good law and consistent

9 with the Supreme Court opinions in Sparks and Barmat. Moreover, because the facts of
2 10 Rutledge are similar to the facts in our case, this Court should properly rely upon

11 Rutledge to award attorney fees for defense of the intentional interference with contract 12 claim, as requested. 13 14 II. The Fees Requested Were Reasonable and Adequately Documented. Plaintiff urges that the Court should not award fees for work that would have

15 been otherwise been performed on discrimination claims. citing Moses v. Phelps Dodge 16 Corp., 826 F.Supp. 1234 (D. Ariz. 1993). Defendants seek reimbursement for only a 17 fraction of their overall fees, and only those fees incurred developing defenses, 18 conducting discovery, and otherwise litigating claims that arose out of contract. 19 Defendants do not seek fees for defense of the discrimination claims. 20 Plaintiff also challenges Defendants' percentage of claims approach to It would be unreasonable to require Defendants to sift

21 calculating fees incurred.

22 through dozens of deposition transcripts, motions, letters, e-mails, and other litigation 23 related documents in an attempt to ascertain the specific time spent asking questions of 24 witnesses or responding to discovery requests that dealt solely with contract claims. 25 In Rutledge, plaintiff sued, inter alia, various ASU football coaches for intentional interference with his contract to attend and play football at ASU. 147 Ariz. at 538, 711 27 P.2d at 1211. Plaintiff alleged the coaches caused the breach of his contract by subjecting him to repeated emotional abuse until he had no choice but quit the team and 28 leave the university. 26
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1 Instead, Defendants offer a very modest, well supported application for attorney fees 2 directed solely at recouping fees for work performed on claims that arose from contract. 3 The fees sought are itemized specifically by work performed, or as a "percentage of 4 claims" when work can not reasonably be itemized (such as identifying "contract" 5 questions during depositions of witnesses to both contract claims and non-contract 6 claims). Defendants seek less than $76,000 out of more than $800,000 in fees incurred. 7 Defendants' fee application is reasonable, sufficiently documented, and in compliance 8 with L.R.Civ.Pro. Rule 54.2. 9 Defendants recognize that the determination of a proper amount of any fee award

10 is a matter that lies entirely within the sound discretion of the Court. See, Marvin 11 Johnson P.C., v. Shoen, 888 F.Supp. 1009, 1018 (D. Ariz. 1995) (An award of attorney 12 fees pursuant to A.R.S. §12-341.01(A) is discretionary.); Layne v. Transamerica 13 Financial Services, Inc., 146 Ariz. 559, 707 P.2d 963, 966 (App. 1985) (same). By 14 requesting the stated award Defendants do not mean to invade the Court's province in 15 this regard. Defendants simply and respectfully request that the Court exercise its 16 discretion to award fees in an amount it deems just and reasonable under the 17 circumstances of this case. 18 As for Plaintiff's attempt to bootstrap "victory" by suggesting he prevailed on

19 some of the discovery and other motions filed in this matter, the status of a party as the 20 prevailing party reflects the party's status overall. This Court is not required to pick and 21 chose which motions were won and lost along the way. Defendants prevailed on all of 22 Plaintiff's claims and are the prevailing parties to this litigation. 23 Finally, Plaintiff attempts to discredit the hours spent defending his contract

24 claims by arguing about the number of pages attributed to those claims in various 25 motions. The number of words used to dispose of an issue by motion is not a direct 26 correlation to the time spent developing defenses to that issue through discovery, 27 research, or otherwise. 28
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III. Conclusion. For the foregoing reasons, and for the reasons stated more fully in Defendants;'

3 Motion for Attorneys' Fees, and Defendants' Memorandum of Points and Authorities in 4 support thereof, and for good cause shown, Defendants move this Court for an Order 5 granting Defendants their reasonable attorney fees in the amount of $75,697 and taxable 6 costs in the amount of $15,442.53. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
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DATED this 22nd day of December, 2005. RYLEY CARLOCK & APPLEWHITE

By

/s/ Matthew T. Clarke Charles L. Chester Matthew T. Clarke Mariette Spence One North Central Avenue, Suite 1200 Phoenix, Arizona 85004-4417 Attorneys for Defendants

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1

CERTIFICATE OF SERVICE I hereby certify that on December 22, 2005, I electronically transmitted the attached

2 REPLY IN SUPPORT OF DEFENDANTS' MOTION FOR ATTORNEYS' FEES to the 3 Filing to the following CM/ECF registrants: 4 5
John Gabroy & Garry Bryant Attorneys for Plaintiffs Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic

6 And a courtesy copy mailed via first class mail to: 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
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By /s/ Lisa Lopez The Honorable Neil V. Wake U.S. District Court, Phoenix Division 401 West Washington Street, SPC 52 Phoenix, Arizona 85003

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