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

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Pending before the Court is Plaintiff's Motion for Attorney Fees. (Doc. 208) Defendant State Farm argues that a portion of Plaintiff's request for fees is improper and that any fee award should be limited to the amount contemplated in the contingency fee agreement. For the following reasons, the Court will award Plaintiff $42,300. Plaintiff and his counsel entered into a contingency fee agreement. That agreement provided Plaintiff's counsel was entitled to thirty-percent of any recovery. The agreement also stated that "in the event any proceedings are had subsequent to verdict or judgment of the trial court, such as a new trial or an appeal or appeals to an appellate court or courts, a new and additional Agreement will be entered into." Based on that language, Plaintiff and his counsel entered into an additional agreement after the jury award in this case. That agreement provided Plaintiff would pay counsel $250.00 per hour for all post-trial proceedings. Plaintiff now seeks an award of thirty-percent of the jury verdict ($42,300),
Case 2:03-cv-01415-ROS Document 226 Filed 11/27/2006 Page 1 of 3

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

) ) ) Plaintiff, ) ) vs. ) ) State Farm Fire and Casualty Company, an) ) Illinois corporation, et al., ) ) Defendants. ) ) Jerry Simms, a single man,

CV-03-1415-PHX-ROS ORDER

1 2 3 4 5 6 7 8 9 10 11

$10,375 for post-trial activity, and $9,308 for non-legal assistance in presenting the case. As the prevailing party in this breach of contract action, the Court "may award [Plaintiff] reasonable attorney fees." A.R.S. § 341.01. There are six factors that should be considered when determining if an award of fees is appropriate: 1) whether the unsuccessful party's claim or defense was meritorious; (2) whether the litigation could have been avoided or settled and the successful party's efforts were completely superfluous in achieving the result; (3) whether assessing fees against the unsuccessful party would cause an extreme hardship; (4) whether the successful party prevailed with respect to all of the relief sought; (5) whether the legal question presented was novel and whether such claim or defense have previously been adjudicated in this jurisdiction; and (6) whether the award would discourage other parties with tenable claims or defenses from litigating or defending legitimate contract issues for fear of incurring liability for substantial amounts of attorney's fees. AmerisourceBergen Corp. v. Dialysist West, Inc., No. 04-15595, 2006 WL 2846342, *7 (9th

12 Cir. Oct. 6, 2006) (quoting Wagenseller v. Scottsdale Mem'l. Hosp., 710 P.2d 1025, 1049 13 (Ariz. 1985)). Based on an evaluation of these factors, Plaintiff is entitled to an award of 14 fees. Plaintiff is not, however, entitled to the entire amount he requests. 15 Pursuant to the contingency fee agreement between Plaintiff and his counsel, Plaintiff 16 is entitled to $42,300 (30% of $141,000). Normally, a fee award pursuant to a contingency 17 fee agreement "operates as a ceiling on the amount of attorneys' fees that may be recovered." 18 Continental Townhouses East Unit One Ass'n v. Brockbank, 733 P.2d 1120, 1129 (Ariz. Ct. 19 App. 1986); see also Pasco Indus., Inc. v. Talco Recycling, Inc., 985 P.2d 535, 550 (Ariz. Ct. 20 App. 1998) (because party had "a 40 percent contingency fee agreement with its attorneys, 21 its attorneys' fees award must be limited to 40 percent of the amount it is awarded on the 22 breach of contract claim."). Plaintiff argues that the contingency fee amount should not 23 operate as a ceiling in this case because he entered into a new agreement with his counsel for 24 post-trial proceedings. Plaintiff is correct that "a prevailing party and its counsel are free to 25 voluntarily renegotiate a binding fee agreement between themselves at any time." Gametech 26 Intern., Inc. v. Trend Gaming Systems, L.L.C., 380 F. Supp. 2d 1084, 1094 (D. Ariz. 2005). 27 It would be inappropriate, however, to "foist the burden of increased fees upon the losing 28 -2Case 2:03-cv-01415-ROS Document 226 Filed 11/27/2006 Page 2 of 3

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

party post-verdict with the benefit of the prevailing party's 20/20 hindsight." Id. Allowing a party to renegotiate its fee agreement after it has become the prevailing party in a lawsuit would invite that party to shift substantial financial burdens to the losing party. Id. (enforcing amended fee agreement would shift "greater financial burden" to the losing party).1 Thus, Plaintiff's contingency agreement controls the award of attorneys fees in this case and Defendant is not responsible for the fees incurred pursuant to the post-verdict fee agreement. Plaintiff acknowledges that a portion of his fee request is attributable to a company that "offered technical support rather than legal support during the presentation of the trial of this matter." Arizona law does not allow for the recovery of fees associated with non-legal support. See Continental, 733 P.2d at 1128. Therefore, Plaintiff's request regarding fees for non-legal support will be denied. Accordingly, IT IS ORDERED Plaintiff's Motion for Attorneys' Fees (Doc. 208) is GRANTED IN PART. Plaintiff is entitled to an award of $42,300. Defendant shall pay this amount to Plaintiff within thirty days of this Order. IT IS FURTHER ORDERED Plaintiff's Motion for Judgment (Doc. 222) is DENIED. Judgment was already entered in this matter on July 24, 2006. DATED this 27th day of November, 2006.

Plaintiff argues that Gametech, 380 F. Supp. 2d 1084, is distinguishable because the prevailing party in that case sought to change the percentage of the contingency fee after the verdict whereas here Plaintiff's original contingency percentage remained the same. The distinction is immaterial because the end result of enforcing the agreement in this case would be the same as enforcing the changed agreement in Gametech; the changed agreements both required awarding fees beyond the contingency percentage in effect up through the verdict. -3Case 2:03-cv-01415-ROS Document 226 Filed 11/27/2006 Page 3 of 3

1