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

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NOT FOR PUBLICATION

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

) ) ) Plaintiff, ) ) vs. ) ) DriveTime Corporation; Ernie Garcia,) ) CEO et al. (Ugly Duckling), ) ) Defendants. ) ) Janet Rose Roth,

No. CV-03-0839-PHX-SRB ORDER

Pending before this Court is Defendants' Motion for Award of Attorneys' Fees and Non-Taxable Expenses (Doc. 160). I. INTRODUCTION Defendants DriveTime Corporation and Ernie Garcia seek to recover attorneys' fees pursuant to Ariz. Rev. Stat. § 12-341.01(A). Defendants filed this motion on December 14, 2004 after this Court issued an Order on November 30, 2004 granting Defendants' Motion for Summary Judgment (Doc. 158) on the basis that Plaintiff Janet Rose Roth's claims were barred by her Severance Agreement with DriveTime. Pursuant to Local Rule of Civil Procedure 54.2 of the United States District Court for the District of Arizona, Defendants filed a Memorandum in Support of Motion for Award of Attorneys' Fees and Related NonTaxable Expenses (Doc. 169) on January 27, 2005, and a Notice of Filing Task-Based Itemized Statement of Attorneys' Fees and Related Non-Taxable Expenses (Doc. 171) on
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February 1, 2005. Plaintiff filed a document entitled "Answer Defendants Notice of Filing Task-Based Itemized Statement of Attorneys' Fees and Related Non-Taxable Expenses" (Doc. 178) on March 28, 2005, which the Clerk of this Court has designated as a response to Defendants' Notice of Filing Task-Based Itemized Statement of Attorneys' Fees and Related Non-Taxable Expenses (Doc. 171). Plaintiff also concurrently filed an identical document entitled "Motion to Dismiss Defendants' Notice of Filing Task-Based Itemized Statement of Attorneys' Fees and Related Non-Taxable Expenses" (Doc. 179), which the Clerk of this Court has designated as a motion to strike Defendants' Notice of Filing TaskBased Itemized Statement of Attorneys' Fees and Related Non-Taxable Expenses. II. LEGAL STANDARDS AND ANALYSIS This Court has jurisdiction to award attorneys' fees pending Plaintiff's appeal. See Masalosalo v. Stonewall Ins. Co., 718 F.2d 955, 957 (9th Cir. 1983). A. Defendants' Motion Filed Pursuant to Local Rule of Civil Procedure 54.2(b)(1) Under Local Rule of Civil Procedure 54.2, a party seeking an award of attorneys' fees must file and serve a motion specifying the applicable judgment and the statutory or contractual authority entitling the party to the award, L.R. Civ. P. 54.2(b)(1)(A), and the amount of attorneys' fees and related non-taxable expenses sought or a fair estimate of such amount, L.R. Civ. P. 54.2(b)(1)(B). Defendants have specified the applicable judgment and authority entitling them to the award. Although Defendants cite A.R.S. § 12-341.01(A) as the basis for entitlement, the appropriate authority is the Severance Agreement entered into by the parties on November 12, 2002 ("Severance Agreement"). A.R.S. § 12.341.01(A) states: "[i]n any contested action arising out of a contract, express or implied, the court may award the successful party reasonable attorney fees." However, the statute also states: "[t]his section shall in no manner be construed as altering, prohibiting or restricting present or future contracts or statutes that may provide for attorney fees." Id. Where "the parties have provided in their contract the conditions under which attorney's fees may be recovered," "the statute is inapplicable." -2Case 2:03-cv-00839-SRB Document 181 Filed 07/15/2005 Page 2 of 6

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Sweis v. Chatwin, 585 P.2d 269, 272 (Ariz. Ct. App. 1978). See also Sullivan v. State Land Dep't, 838 P.2d 1360, 1362 (Ariz. Ct. App. 1992) (quotations omitted) ("The statute applies in contract actions when the contract has not provided for the payment of fees; it does not govern when the contract expressly provides for them."). "Unlike fees awarded under A.R.S. § 12-341.01(A), the court lacks discretion to refuse to award fees under the contractual provision." Chase Bank of Ariz. v. Acosta, 880 P.2d 1109, 1121 (Ariz. Ct. App. 1994) (quotation omitted); see also Bennett v. Appaloosa Horse, 35 P.3d 426, 432 (Ariz. Ct. App. 2001) (quotation omitted) ("The awarding of attorneys' fees to a prevailing party pursuant to a contract between the parties is mandatory."). Here, the parties signed a contract containing express provisions for attorneys' fees. The Severance Agreement states: "[w]ithout limiting the remedies of Company under this Agreement, Employee understands that if Employee violates the terms of this Agreement . . . Company will be entitled to . . . its attorneys' fees." "Where a contract has a unilateral provision permitting one party to recover attorneys' fees under certain circumstances, § 12-341.01(A) requires that the contract provision be applied when the party seeking recovery of fees is the one allowed recovery under the unilateral contract provision." Pioneer Roofing Co. v. Mardian Constr. Co., 733 P.2d 652, 668 (Ariz. Ct. App. 1986) (citation omitted). Because the contract contains a unilateral provision that provides recovery for Defendants and Defendants are the ones seeking recovery, if the Court finds that the Severance Agreement was a valid contract and that Plaintiff breached the contract, Defendants have specified the necessary authority entitling them to an award of attorneys' fees. See id.; Sullivan, 838 P.2d at 1363 (granting the appellant attorney's fees where the trial court found that a valid lease existed between the parties and the parties were thus bound by the lease terms, including the provision for attorney's fees). In granting Defendants' Motion for Summary Judgment (Doc. 158), the Court found the Severance Agreement valid and all of Plaintiff's claims thereby barred. Plaintiff violated the terms of the Severance Agreement by filing suit against Defendants, despite waiving the right to do so in the Severance Agreement. Thus, the parties' contract provides the necessary -3Case 2:03-cv-00839-SRB Document 181 Filed 07/15/2005 Page 3 of 6

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authority entitling Defendants to an award of attorneys' fees, in compliance with L.R. Civ. P. 54.2(b)(1)(A). Further, because the authority is based on a contract, the award of attorneys' fees is mandatory. Defendants have also specified in their motion a fair estimate of the amount of attorneys' fees and related non-taxable expenses sought, in compliance with L.R. Civ. P. 54.2(b)(1)(B). Thus, Defendants have satisfied the requirements for filing a Motion for recovery of attorneys' fees pursuant to L.R. Civ. P. 54.2(b)(1). B. Defendants' Memorandum and Supporting Documentation Filed Pursuant to Local Rule of Civil Procedure 54.2(b)(2) and 54.2(c) - (e) Under Local Rule of Civil Procedure 54.2, a party seeking an award of attorneys' fees must also file a memorandum in support of a motion for award of attorneys' fees containing discussion of eligibility for, entitlement to, and reasonableness of the requested award, L.R. Civ. P. 54.2(b)(2), 54.2(c), and supporting documentation including a statement of consultation, fee agreement, task-based itemized statement of fees and expenses and affidavit of moving counsel, L.R. Civ. P. 54.2(d)-(e). Defendants have filed the necessary documents containing the required elements in compliance with L.R. Civ. P. 54.2(b)(2), 54.2(c)-(e). The Court finds that Defendants are eligible for and entitled to an award of attorneys' fees based on the provision in the Severance Agreement. Defendants are also entitled to fees for preparing the motion and memorandum for award of attorneys' fees and related non-taxable expenses. Cf. In Re Nucorp Energy, Inc., 764 F.2d 655, 659-90 (9th Cir. 1985) ("In statutory fee cases, federal courts, including our own, have uniformly held that time spent in establishing the entitlement to and amount of the fee is compensable."). With regard to reasonableness of the requested award, L.R. Civ. P. 54.2(c)(3) provides a non-exclusive list of 12 factors to be considered: (1) the time and labor required, (2) the novelty and difficulty of the questions presented, (3) the skill necessary to perform the legal service, (4) the preclusion of other employment because of acceptance of the action, (5) the customary fee in similar matters, (6) whether the fee agreement is fixed or contingent, (7) any time limitations imposed by the client or the circumstances, (8) the amount of money -4Case 2:03-cv-00839-SRB Document 181 Filed 07/15/2005 Page 4 of 6

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involved and the results obtained, (9) the experience, reputation and ability of counsel, (10) the undesirability of the case, (11) the nature and length of the professional relationship between the attorney and the client, and (12) awards in similar actions. Defendants' taskbased itemized statement of fees and expenses provides the necessary information as required by L.R. Civ. P. 54.2(e). Defendants' counsel's affidavit also discusses the reasonableness of the rate, time spent, and expenses incurred in accordance with L.R. Civ. P. 54.2(d)(4)(B)-(C). Plaintiff requests that the Court grant her "Motion to Dismiss Defendants' request for their Motion for an Award of Attorneys' Fees including Related Non-Taxable Expenses" because of "inconsistencies, discrepancies" and "misinformation." (Pl.'s Resp. at 5.) However, Plaintiff has not met her burden in responding to Defendants' Motion. Local Rule of Civil Procedure 54.2(f) requires a response to "identify with specificity all disputed issues of material fact" and "separately identify each and every disputed time entry or expense item," which Plaintiff's Response does not do. The Court has reviewed Defendants' memorandum explaining the reasonableness and necessity of the fees incurred, including the elimination of duplicative billing and time incurred by the attorney who oversaw the case while lead counsel was on maternity leave. The Court has also reviewed counsel's affidavit regarding attorneys' fees, task-based itemized statement and the statement in the Reply that the estimated $1,500 in additional fees for litigating the attorneys' fees issue had been exceeded. The Court finds that Defendants' reasonable attorneys' fees are $47,322.60. IT IS ORDERED granting Defendants' Motion for Award of Attorneys' Fees and Related Non-Taxable Expenses (Doc. 160). IT IS FURTHER ORDERED awarding attorneys' fees in favor of Defendants in the amount of $47,322.60. IT IS FURTHER ORDERED denying Plaintiff's Motion to Dismiss docketed as a motion to strike (Doc. 179).

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IT IS FURTHER ORDERED directing the Clerk of the Court to enter judgment accordingly. DATED this 15th day of July, 2005.

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