reverse the trial judge's decision assessing attorney's fees against merrill because thirteen dash or that the attorney's fees statute in arizona should not merits and that mr niles has his small portion well not small to him but he just has a slice of the issues related to attorney's fees i just want to clarify that all right so please proceed on behalf of mr knight and just so you know i don't think you'll need twenty minutes because that was allocated among all the potential appellants pre sold that's what you'll need ok i don't think i'll take the twenty minutes the arizona attorney's fees statute allows in the court's discretion to award attorney's fees when the action or the claim arises out of contract we've had many cases in arizona that grapple with the issue of the entitlement or the authority to award attorneys fees when there may be a contract involved but the true action or the true claim involves a duty that exists that applies to all of us not based on the contract that's what we have argued to the court with which we argued to the court  the the word that some of those cases the recent cases have talked about is interwoven yes or intertwined and the cases support our view and they do not support judge bol contracts for these condominiums which were to be built in mexico and that you would not have a claim for the return of your deposit money but for those contracts therefore the claim claims arise out of contract that is correct i was asking you about the equity side of the analysis the equity side i don't know that you say she didn't address the whatever equities might relate to your client versus the other pellets she found that mr niles authorization to the lawyer who filed the case pays  it anymore b s that the dates are somewhat important because i do they are kind of complicated and they are important and the case started in two thousand and ten with a default actually reached a default judgment mr hayes was doing pretty well i guess i would say from an attorney's point of view at that point he didn't talk to mr and mrs niles there was a default judgment there was a title company there was an escrow company they thought they would recover their deposit money from the title or the escrow company which were alive defend it's at the time that was in february of two thousand and eleven two months later both mr and mrs niles communicated with hayes and told the lawyer we no longer want to be involved extricate us from this they then didn't hear again until two thousand and twelve there was a little bit of a misunderstanding and it was it's very complicated because hayes didn't actually join them in the action until january two thousand and twelve so here's a lawyer who was specifically instructed not to go forward with these two clients and yet he went ahead and joined them in the action and then subsequent to that seven or even subsequent to that in august hayes then withdrew as the attorney for mr and mrs niles and subsequent why it's a pretty easy thing to go in and say i hereby ask for voluntary dismissal my claim well unfortunate when that didn't happen right yes but unfortunately in that circumstance you would be liable for all the things that we're talking about and at that point he then would have well that the defendants would have been the prevailing party against m and they would have had an entitlement to collect costs or attorney's fees against him potentially well potentially but if he if he were let out of the case was there ever some something from presented to the court to say let me out of this case i'm not involved in the case and i won a dismissal with prejudice no there was nothing there and that's that's what's a little i'm very sympathetic to your client's plight but i can see why the district court looking at the papers  saying but it's still a party so what i see your point but if i do you think would be the legal basis for us to disagree with the court on that point on the equity part well first of all if he if he made a request for voluntary dismissal he then would be subject to a taxable cost assessment as well as an attorney's claim and at that point there would have been and why is that you can't voluntarily dismiss a claim against the defendant if you're a plaintiff and not subject yourself to taxable costs attorney's fees are taxable costs this well is a state statute yes it would be it would be it would be taxable cost and attorney's fees he would have been in the same position he's in today if you if you filed a motion for voluntary dismissal he would have been subject to a taxable cost having trouble with that you can never get out i mean it's it's like hotel california you can never get out on a case ever ever you're always liable for attorney's fees yes the wealthy are not always that i mean i don't think the answer is no you're not that's what people that's why people dismiss cases if sometimes the plaintiffs say you know like we don't want to be on the hook well maybe not future attorneys fees but past attorneys fees a party so instead he just stays in and well the party does not have the discretion just to say ok i'm going to quit with you and your plight of the court you say when i want to not only voluntary dismissal i also want to dismiss it with prejudice because he's not going to pursue anything he didn't get joined in this thing till two thousand and twelve and then the court says know i mean he shouldn't be on the hook here i mean that the difficulty is that no one came in and argued his position that is correct but it would have subjected him he then would the defendants were the prevailing part so now we're saying because we didn't do that he stayed until the end they became the prevailing party but now he wants out well that's going to argue i think that's a bigger hole to dig yourself out of than it would have been going in as a matter of procedure and asking for dismissal or withdrawal of a claim i agree with your position but yeah it also it doesn't really analyze the fact that mr niles did not participate in any of the litigation he did not oppose the motion for summary judgment he asked for an agreement from the other side to just dismiss with each party bearing their own costs they would not agree to that and find out why yes so that if you get to that equitable argument we thought that at a minimum the court should have looked at this and said well number one you didn't join the action until what turned out to be january two thousand and twelve mr hayes withdrew his representation formally in august of two thousand and twelve nothing really as far as the bulk of the attorney fees all occurred after that after mister murray all niles had communicated is desire to dismiss with each party bearing their own costs which the other side would not agree but he did not require any work as far as the motion for summary judgment filed by the defendants he did not participate in the motion for summary judgment filed by attorney hayes with all the other plaintiffs there should have been some consideration to look at really if he was responsible for attorney's fees during those seven or eight months he should have been that should have been identified and perhaps he should have been responsible for that so there was neither the fact that he tried to dismiss i know that at least one of the counsel for the birkhead plaintiff has been you know did you have any notice prior to today that they would not be sending a substitute counsel i now as as your honour's well know there's a number of issues that were raised by the appellant and you had it at this at this point i think it's fair to say that those were well briefed by you they've raised them and briefed them and we'll consider all of your responses and there is on the merits on the briefs ok you don't need to argue that today you have just confine ourselves to mr niles attorney for the issue the attorney for mr niles at the time of this lawsuit and at the time o niles it was the other attorney and in looking at the first paragraph of his answer in brief he states as follows much of the case has centered around whether the plaintive contracted with cain or the corporation or the defendants in their personal capacity and the alternative whether the court should pierce a corporate veil because  that alone raises the issue that this kid is completely except for the claims with regard to the land sales act revolves around the written contract that was entered into was it entered into by the corporation was it entered into by the plaintiffs that's that's the grab a man of the case and the fact that there are underlying towards does not change the fact that our statute fifteen five thirty one provides that under a contractual obligation that the judge has the authority to grant attorney's fees what about fraud in the inducement with is that exception to the general principle fraud indian do smith if you fraudulent mean due someone to enter into a contract there's a statute cover that but say if that were the only claim brought and if they were to have approved it perhaps the judge would not know they they lose the case i'm sorry they lose the case yes they lose the case is that a contract case fraud in the inducement no no no no but we're talking about fraud in new newsman was related to this contract because that's what their argument ok now we're missing each other have brought to you to cement of anything of any relationship but the relate them in your relationship the relationship between the parties here is that written contract and but for that written contract have survived they couldn't survive because the allegations that were made with regard to those sort claims related to the contract did you take discovery from each and every one of the named plaintiffs no no no there was discovery for maybe three or four of the plaintiffs if you take discovery from this the now yes i took his deposition i that one of the reasons he won't agree that i'm sorry is that one of the reasons your client won't permit him to get off on the attorney's fees is one of the reasons and the other reason is the judge wasn't presented with enough evidence to make that decision to start shifting parts are some of these issues i'm sorry judge you said the judge didn't have enough of a basis to assess how much participation each individual plaintiff had in others who was the driving force behind the lawsuit you have a lawsuit with what would you have twenty seven twenty eight  buyers typically the situation like that you're going to have maybe three or four or seven or eight people who are really driving it other people sort of sign on thinking they get their money back maybe a lot of people just signed up that is mr niles what i'm sorry when mr mean you had came on the case that that's where a lot of the discussion does occur in this he said his lawyer says ok that it really wasn't it wasn't actually joined by tell january of two thousand and twelve is that true that mr niles has not joined january to know what he was in the case before that mr niles got in the case immediately after the timeframe for that whenever mr mister many at made his appearance and i don't have that date right now but if we look at the extent of this loss it's been going on for about thirty six months and eighteen of those months mr niles and mrs niles were both in the lawsuit and the they could have gotten out had the asked the judge they never did nothing happen for a long time and when they asked you for your client my client know that i intend you know we've already expended enough attorney's fees and we're not going to do this mr niles had been an original investor not not as a condominium buyer but is it a regional investor and he knew very well the risks of this undertaking in mexico it's not like he's some innocent that doesn't know what he's going he had invested a substantial amount of money in this subdivision as well as my client had my client had already invested close to a million dollars in s there was a lot of losses  and the losses came not because my client stole money it came because of the they were not able to get the financing this was about two hundred other way what's the status today is the status today  so all these arguments that are made in the motion for summary judgment about misstatements about the condition of the land and all that we had to lean releases in two thousand and six our land was not i think everybody else must be and a lot of people suffer including our client and is it fair or not no it's not fair it's not fair to anybody nobody anticipated certainly not my clients  they they lost everything they had and were sorry that there was suffering on the part of the other parties but there's no question these parties knew what they were getting into it but that they were dealing with a corporation that we were dealing in mexico that there there was piling surance but you know i guaranteed the title it didn't guarantee that they were going to be paid that the title was still guaranteed  tried to execute the attorneys fees judgment i have now by what judge if you try to execute on that judgment against any of the oh no i'm lot of the money has already been paid by some of the other  appeal and i take it you had to say yes or no some discussions with mr niles attorney about resolving this or no yes you wish for me to any other oh i don't think there's anything for me thank you so  much it was the letters an exhibit august seventh two thousand and twelve that was the request to dismiss from history mrs niles which party very cos as far as i know there's never been any complaint yes and is that what you mean when you say that there was a period of time when mr was was not joining yes well so he was participating now well he didn't participate he authorized ha participate and then it wasn't until january of two thousand and twelve that hayes went ahead and joined him with some other plaintiffs in the second and where was he doing posed i think he was deposed probably in two thousand thirteen after he had already expressed his intention not to go forward he was trying to get out of the case but to cooperate with the defendants he he voluntarily went down and had his deposition taken that was otherwise but i want to tell you one of the thing if you if you look at this case with the authority when you're talking about the interwoven cases basically all of the cases support the plaintiffs in this case that attorneys fees should not be awarded in this case and if you look at dooley versus o'brian which is a two thousand and ten case two twenty six arizona one forty nine that is almost adenike all to the back of the bennett versus baxter case both of which as well as all of these other cases always involve an underlying contract but that's just the start of the inquiry which is what judge bolton did not complete and which the the defendants have never argued in these briefs yes they all involve a relationship that starts with a contract for example the garment case was the first one that set the law in changed in arizona that was a malpractise case and they said of course it that involved the agreement between the lawyers and the client in that was a contract would normally would establish the basis for the award under the attorneys fees statute but the claims involved malpractise the obligation not to malpractise applies to all of us regardless of the contract and every one of these cases is the same and if you look at bennett versus baxter there's a case where there truly was a contract dispute they litigated whether or not the purchaser was entitle to get the return of the escrow money or if it will would stay with the seller but in addition the seller through in all sorts of fraud claims slander claims all sorts of things that would not have existed but for the the initial contract but the court said none of the attorney's fees are or do because these are claims alleging duties that exist in apply to all of us and the in the court explains it in dooley when they say in order for the attorneys fees to be justified under the statute they must be based on a promise a promise that or that arises from the contractual relationship it has to be a voluntary undertaking but if we agree with you then i believe loses all the attorney's fees right well this is  even though you're only here for novels that would wipe out the entire judgment we could you could get this court to write an opinion that rules in your favor in the way you're asking us to the doesn't wipe out the entire judgment some of which is already been paid with those people be client is concerned if you read these cases all of these claims for example the primary claim as we just heard from the council was that these individuals treated hilo which entered the contract as their alter ego now the the analysis is that no one has the right to form an entity and treat it as their alter ego this had nothing to do with the promise  also to misappropriate the funds or steal the funds from philo that's not a promise that's a duty that applies to them and everybody everybody who is involved in a in a business entity so so that's the difference none of these claims had to do with a promise undertaking by these defendants everything was his lawyer mr hayes trying to assert personal liability i guess is an ex lawyer and he's an ex lawyer and as we've all read i don't  think obviously has very serious problems professionally and personally i guess medically but anyway the entire claim involved the personal responsibility for these individuals for the the contract that she low introduced as far as i know she low those contracts never came an issue and that's why i quoted the the passage from judge bolton when she considered the rule twelve b six by one of the the defendants and she specifically answered every one of these questions i could quote it for you but isn't it in both briefs and she said it is not necessary for the court to look at the kilo contracts in order to decide all these claims these are tort claims and for that reason she denied the twelve b six motion that same reasoning and thinking applies exactly to this this fax a choice and and it indicates the un it's clear that the arizona statute does not allow for attorney's fees based on the claims that we have in this case and if you look at the statutes it starts with we're familiar with that ok the statute of but i mean the cases say if you have interference with contractual relations fraud in the inducement slander of title breach of fiduciary duty misappropriation of a corporate opportunity fraudulent conveyance an accounting or legal malpracti of them the bennett and baxter was a real estate matter in which the defendant alleged slander of title and misrepresentation and fraud and the court set aside the attorneys fees award aachen and morris versus aachen which is cited is basically the same thing including interference with contractual relations even though everything was all based on the underlying purchase contracts so those weren't and the let's see the last one was that ramsey was it was a good example because there the person made a contract for of for a flight someplace and there was negligence in the pilot i think that crashed the plane i can't swear to that but the the even though it was based on a purchase in a sale of a ticket in transportation the court said the duty was not to act negligently as a pilot therefore no attorney's fees and of course obviously the relationship arose out of a contract but not for this statute and that's the ramsey case that's cited by both parties thank you