Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_04-cv-01150/USCOURTS-azd-2_04-cv-01150-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1441 Petition for Removal- Insurance Contract

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NOT FOR PUBLICATION

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

U.S. Home Corporation, 

Plaintiff, 

vs.

Maryland Casualty Company, et al., 

Defendants. 

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No. CV-04-1150-PHX-FJM

ORDER

The court has before it Defendants' Motion for Award of Attorney's Fees (doc. 111),

Plaintiff's Motion to Strike the Motion as untimely (doc. 116), Defendants' Response to the

Motion to Strike and Cross-Motion for Extension of Time (doc. 121), Plaintiff's Response

to the Cross-Motion (doc. 119), Defendants' Reply (doc. 124), Plaintiff's Supplement to its

Response to the Cross-Motion (doc. 127), and Defendants' Reply to Plaintiff's Supplemental

Response (doc. 128). We also have before us Defendants' Memorandum in Support of its

Motion for Attorney's Fees (doc. 125), Plaintiff's Response (doc. 129), and Defendants' Reply

(doc. 130). 

I

Defendants seek an award of attorney's fees pursuant to A.R.S. § 12-341.01 as the

prevailing party in a contract dispute. In their motion, defendants claim attorney's fees in the

amount of $107,846.00 and non-taxable costs in the amount of $8,187.26, for a total fee

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We note that in their memorandum in support of the motion for attorney fees,

defendants seek an award of attorney's fees and non-taxable costs in the combined amount

of $112,233.50. Memorandum at 10. There is no explanation to account for the difference

in the claimed amounts; however, we need not address this disparity because we conclude,

in any event, that an award of $75,000 is appropriate in this case. 

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award of $116,033.26.1

 U.S. Home moves to strike the motion for fees because defendants

filed the motion three days late. See LRCiv 54.2(b) (requiring a party seeking fees to file a

motion within fourteen days of the entry of judgment). Defendants counter that their failure

to timely file the motion is excusable neglect because transition to this court's electronic

filing system resulted in a secretary's failure to calendar the filing deadline. We acknowledge

that the transition to this new system has occasionally resulted in confusion and error. We

also note that there was no prejudice to plaintiff because it was informed at the time

judgment was entered that defendants intended to file a motion for fees; and moreover, the

length of delay was de minimus–only three days–while the memorandum in support of the

motion was not due for another 45 days. See LRCiv 54.2(b)(2) (memorandum shall be

served 60 days after entry of judgment). Accordingly, we grant defendants' motion for

extension of time in which to file the motion for attorney's fees (doc. 121), and deny

plaintiff's motion to strike the attorney's fees motion (doc. 116).

II

In deciding whether to award fees under A.R.S. § 12-341.01, we consider a number

of factors, including (1) whether the unsuccessful party's claim or defense was meritorious;

(2) whether the litigation could have been avoided or settled; (3) whether assessing fees

would cause extreme hardship; (4) whether the successful party prevailed with respect to all

relief sought; (5) whether the legal question was novel; and (6) whether the award would

discourage other parties with tenable claims from litigating them. Associated Indem. Corp.

v. Warner, 143 Ariz. 567, 570, 694 P.2d 1181, 1184 (1985). By enacting A.R.S. § 12-

341.01(B), the legislature intended that the risk of paying the opposing party's attorney's fees

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would encourage a more careful analysis prior to filing suit. All-Way Leasing, Inc. v. Kelly,

182 Ariz. 213, 219, 895 P.2d 125, 131 (Ct. App. 1994). 

Applying the Warner factors to this case, we first find that plaintiff's legal position,

though colorable, was not entirely meritorious. By suing defendants, plaintiff "undertook a

calculated commercial risk." All-Way Leasing, Inc., 182 Ariz. at 218, 895 P.2d at 130.

Although plaintiff relied heavily on Univ. Mech. Contractors of Ariz., Inc. v. Puritan Ins.

Co., 150 Ariz. 299, 723 P.2d 648 (1986), it did so by disregarding the more analogous

precedent established subsequently in U.S. Fid. & Guar. Corp. v. Advance Roofing & Supply

Co., 163 Ariz. 476, 788 P.2d 1227 (Ct. App. 1989). Plaintiff should have recognized from

a reading of Advance Roofing, as well as comparable cases from a majority of other

jurisdictions, that the risk of not succeeding with their argument was high; and further that

attorney's fees could be awarded against them if they failed. See All-Way Leasing, Inc., 182

Ariz. at 219, 895 P.2d at 131. 

Second, the parties agree that there was no possibility of settlement in this case.

Third, plaintiff acknowledges that it is a "large homebuilder in the Arizona market," and only

asserts that an award of $100,000 in attorney's fees would be "an extreme hardship for any

company." Plaintiff's Response at 3. There is no evidence that assessing fees against

plaintiff will constitute an undue hardship. Fourth, defendants prevailed with respect to all

relief sought. Fifth, the legal question in this case was not novel. Rather, this case involved

the application of directly analogous Arizona caselaw. Finally, there is no indication that a

fee award in this case will discourage other litigants from advancing tenable claims.

Considered together, the Warner factors weigh in favor of awarding attorney's fees in this

case. 

The award of attorney's fees under A.R.S. § 12-341.01(B) "need not equal or relate

to the attorney fees actually paid," but instead should "mitigate the burden of the expense of

litigation to establish a just claim or a just defense." Recognizing that non-taxable costs are

not available to a successful party as a part of an award of attorney's fees under § 12-341.01,

Ahwatukee Custom Estates Mgmt. Ass'n v. Bach, 193 Ariz. 401, 401, 973 P.2d 106, 106

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(1999), and excluding amounts claimed for fees that are unreasonable, including, for

example, fees related to oversized motions, we conclude that a fee award of $75,000.00 is

appropriate. 

IT IS THEREFORE ORDERED GRANTING defendants' motion for attorney's

fees in the amount of $75,000 (doc. 111).

IT IS FURTHER ORDERED GRANTING defendants' motion for extension of

time (doc. 121).

IT IS FURTHER ORDERED DENYING plaintiff's motion to strike (doc. 116).

DATED this 17th day of March, 2006.

 

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