Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-3_11-cv-08210/USCOURTS-azd-3_11-cv-08210-1/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

---

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 

WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Rachel Tanais Delieutraz, 

Plaintiff, 

vs. 

Steve T. Johnson, 

Defendant.

No. CV-11-08210-PCT-NVW

ORDER 

Before the Court is Plaintiff’s Motion for Attorneys’ Fees, Taxable Costs, and 

Non-Taxable Costs (Doc. 30). 

I. BACKGROUND 

On January 8, 2013, Plaintiff was granted summary judgment on her claim for 

breach of fiduciary duty. (Doc. 28.) Her other claims were not decided because recovery 

under them would have been duplicative. The Order granting summary judgment 

directed the Clerk to enter judgment against Defendant and in favor of Plaintiff in the 

amount of $125,000.00 with interest from June 21, 2011, to the date of judgment at the 

rate of 4.25% per annum and interest from the date of judgment to the date paid at the 

rate of 0.15% per annum and to terminate this case. (Id.) The Clerk entered the 

judgment the same day. (Doc. 29.) 

On January 22, 2013, Plaintiff filed a Motion for Attorneys’ Fees, Taxable Costs, 

and Non-Taxable Costs (Doc. 30). 

Case 3:11-cv-08210-NVW Document 35 Filed 04/11/13 Page 1 of 7
- 2 - 

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 

II. TAXABLE COSTS 

The Local Rules require a party seeking taxable costs to file a Bill of Costs with 

supporting documentation. LRCiv 54.1(a). After the fourteen-day objection period has 

expired, the Clerk of Court has thirty days to tax the costs and allow such items as are 

properly allowable. LRCiv 54.1(b). Instead of filing a Bill of Costs and documentation 

separately to be addressed by the Clerk, Plaintiff filed it as Exhibit 6 to the Affidavit of 

Allison L. Kierman. (Doc. 30-1 at 50.) Because the Bill of Costs was timely filed, but 

not as a separate document, Plaintiff will be granted leave to re-file it separately. 

III. ATTORNEYS’ FEES 

Under Arizona law, “[i]n any contested action arising out of contract, express or 

implied, the court may award the successful party reasonable attorney fees.” A.R.S. 

§ 12-341.01(A). A fee award “need not equal or relate to the attorney fees actually paid 

or contracted, but the amount may not exceed the amount paid or agreed to be paid.” 

A.R.S. § 12-341.01(B). Defendant does not dispute that Plaintiff is the successful party 

in this contested action. 

A. “Arising Out of Contract” 

“[A]ttorney’s fees may be awarded pursuant to § 12-341.01(A) based upon facts 

which show a breach of contract, the breach of which may also constitute a tort.” Sparks 

v. Republic Nat’l Life Ins. Co., 132 Ariz. 529, 543, 647 P.2d 1127, 1141 (1982); accord

Ramsey Air Meds, LLC v. Cutter Aviation, Inc., 198 Ariz. 10, 14, 6 P.3d 315, 319 (App. 

2000). “The fact that the two legal theories are intertwined does not preclude recovery of 

attorney’s fees under § 12-341.01(A) as long as the cause of action in tort could not exist 

but for the breach of contract.” Id. (both). 

However, where the duty breached is not created by the contractual relationship, 

but rather is a duty imposed by law, the cause of action does not depend on the existence 

of a contract, and the “but for” test of Sparks is not satisfied. Barmat v. John and Jane 

Doe Partners A-D, 155 Ariz. 519, 523, 747 P.2d 1218, 1222 (1987) (a cause of action for 

legal malpractice would exist without a contract because attorneys owe special duties to 

Case 3:11-cv-08210-NVW Document 35 Filed 04/11/13 Page 2 of 7
- 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 

their clients as a matter of public policy); In re Naarden Trust, 195 Ariz. 526, 530, 990 

P.2d 1085, 1089 (Ct. App. 1999) (duties of a trustee of a living trust arose from the 

relationship created by the trust and were not contractual). The Arizona Court of Appeals 

distilled the following principles for determining whether a tort claim “arises out of 

contract”: 

In analyzing this issue, the court should look to the 

fundamental nature of the action rather than the mere form of 

the pleadings. The existence of a contract that merely puts 

the parties within tortious striking range of each other does 

not convert ensuing torts into contract claims. Rather, a tort 

claim will “arise out of a contract” only when the tort could 

not exist “but for” the breach or avoidance of contract. When 

the duty breached is one implied by law based on the 

relationship of the parties, that claim sounds fundamentally in 

tort, not contract. In such cases, it cannot be said that the 

plaintiff’s claim would not exist “but for” the contract. The 

test is whether the defendant would have a duty of care under 

the circumstances even in the absence of a contract. 

Ramsey Air Meds, 198 Ariz. at 15-16, 6 P.3d at 320-21. 

Here, Defendant opened a bank account “in trust for” Plaintiff, thus forming a 

fiduciary relationship. He sent her a letter stating that he had opened a new bank account 

in Plaintiff’s name, he was the trustee of the account, and the account belonged to 

Plaintiff. Plaintiff electronically transferred funds into the account. Defendant withdrew 

all of the funds and did not return them when requested to do so by Plaintiff. The 

fundamental nature of Plaintiff’s breach of fiduciary duty claim is based on their 

agreement regarding Plaintiff’s money, not on duties imposed by law because of their 

fiduciary relationship. Defendant would not have had a duty of care under the 

circumstances in the absence of their agreement. Therefore, Plaintiff’s breach of 

fiduciary duty claim could not have existed but for Defendant’s breach of their 

agreement, and Plaintiff’s breach of fiduciary duty claim arises out of contract for the 

purpose of § 12-341.01(A). 

Case 3:11-cv-08210-NVW Document 35 Filed 04/11/13 Page 3 of 7
- 4 - 

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 

B. Reasonable Attorney Fees 

Various factors bear on the reasonableness of the requested attorney fee award, 

such as the time and labor required of counsel, novelty and difficulty of the questions 

presented, customary fees charged in matters of the type involved, and the amount of 

money involved and the results obtained. LRCiv 54.2(c)(3). 

As Plaintiff noted, she took only one deposition and filed only one motion, the 

motion for summary judgment, which relied entirely on the deposition and admissions. 

The Complaint alleged five routine state law claims: breach of contract, breach of the 

covenant of good faith and fair dealing, breach of fiduciary duty, conversion, and unjust 

enrichment. This case involved few documents and no complex legal issues. Yet, to 

recover $125,000, Plaintiff incurred $99,070.40 in attorney fees. 

Plaintiff’s request includes $73,070.40 for her DLA Piper LLP (US) attorneys’ 

and paralegals’ fees. The request shows a total of 173.20 hours expended and the hourly 

rate for each attorney and paralegal, but does not show how many hours were performed 

by each attorney and paralegal. The hourly rates charged are significantly above the 

customary rates charged in the Phoenix market for lawyers of very high ability, and 

therefore only a portion of the DLA Piper fees will be shifted to Defendant under the 

discretion provided by A.R.S. § 12-341.01(A). The request will be further reduced to 

reflect time spent communicating with Swiss counsel and time spent by a paralegal 

“reviewing file” in preparation for other tasks. 

Plaintiff also requests an award of $26,000 for her MCE Avocats (Switzerland) 

attorneys’ and paralegals’ fees. She states that the MCE attorneys assisted her in 

understanding the U.S. legal process, protocols, and procedures and worked with DLA to 

fully develop the facts related to the litigation. Although most of the descriptions of tasks 

performed are not written in English, it appears that much of the work performed is 

duplicative of work performed by DLA Piper. None of the MCE fees will be shifted to 

Defendant under the discretion provided by A.R.S. § 12-341.01(A). 

Case 3:11-cv-08210-NVW Document 35 Filed 04/11/13 Page 4 of 7
- 5 - 

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 

A reasonable amount of an attorney fee award to Plaintiff in these circumstances is 

$35,000.00. 

C. Exercise of Discretion 

The award of fees to the successful party in a contested action arising out of 

contract is discretionary with the trial court. Fulton Homes Corp. v. BBP Concrete, 214 

Ariz. 566, 569, 155 P.3d 1090, 1093 (Ct. App. 2007). Numerous factors may be 

considered in determining whether attorney fees should be granted. These include the 

merits of Defendant’s defense, Plaintiff’s success in obtaining the relief sought, the 

avoidable expense incurred, the possibility that the award will cause “extreme hardship,” 

any chilling effect the award might have on other parties with tenable claims or defenses, 

and the novelty of the legal questions presented. Associated Indem. Corp. v. Warner, 143 

Ariz. 567, 570, 694 P.2d 1181, 1184 (1985). 

Plaintiff succeeded in obtaining the relief sought. Although Defendant asserted a 

statute of limitations defense to Plaintiff’s breach of contract claim, he admitted to the 

facts establishing her breach of fiduciary duty claim for which the limitations period had 

not expired. A fee award may cause Defendant hardship, but there is no evidence 

showing that it would cause significantly more hardship than does the January 8, 2013 

Judgment for $125,000 plus interest. The legal questions presented are not novel, and a 

fee award is not likely to have a chilling effect on other parties with tenable defenses. 

Upon consideration of these factors, the Court will exercise its discretion to award 

Plaintiff reasonable attorney fees under A.R.S. § 12-341.01(A). 

IV. NON-TAXABLE COSTS 

In order to recover non-taxable costs, LRCiv 54.2(e)(3) requires that each related 

non-taxable expense be identified with particularity. Plaintiff seeks reimbursement for 

Westlaw research costs in the amount of $1,543.93, but has submitted only a listing of 

dates and attorney names followed by “amount,” which appears to be a dollar amount for 

three dates and what may be the number of transactions for the other dates. Because the 

supporting documentation for the Westlaw charges does not give any indication how the 

Case 3:11-cv-08210-NVW Document 35 Filed 04/11/13 Page 5 of 7
- 6 - 

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 

amount of $1,543.93 was calculated or for what purposes the legal research was 

conducted, Plaintiff’s request for non-taxable costs will be denied. 

V. RELIEF FROM JUDGMENT 

Plaintiff also requests prejudgment interest and that she be awarded the conversion 

value as of either June 21, 2011, or January 8, 2013, rather than the amount stated in the 

January 8, 2012 judgment. These post-judgment requests should have been presented as 

a motion to alter or amend a judgment under Fed. R. Civ. P. 59(e). 

“Although Rule 59(e) permits a district court to reconsider and amend a previous 

order, the rule offers an extraordinary remedy, to be used sparingly in the interests of 

finality and conservation of judicial resources.” Kona Enters., Inc. v. Estate of Bishop, 

229 F.3d 877, 890 (9th Cir. 2000) (internal quotation marks and citation omitted). 

“Reconsideration under Rule 59(e) is appropriate if (1) the district court is presented with 

newly discovered evidence, (2) the district court committed clear error or made an initial 

decision that was manifestly unjust, or (3) there is an intervening change in controlling 

law.” SEC v. Platforms Wireless Int’l Corp., 617 F.3d 1072, 1100 (9th Cir. 2010). 

Because none of these conditions apply, the requests, construed as a Rule 59(e) motion, 

will be denied. 

IT IS THEREFORE ORDERED that Plaintiff’s Motion for Attorneys’ Fees, 

Taxable Costs, and Non-Taxable Costs (Doc. 30) is granted in part and denied in part as 

follows: 

1. Plaintiff may re-file her Bill of Costs and supporting documentation as a 

separate document by April 19, 2013. 

2. Plaintiff’s request for non-taxable costs is denied. 

3. Plaintiff’s requests to modify the Judgment entered January 8, 2013, are 

construed as a motion under Fed. R. Civ. P. 59(e) and denied. 

4. Plaintiff’s request for award of attorney fees is granted in the amount of 

$35,000.00. 

Case 3:11-cv-08210-NVW Document 35 Filed 04/11/13 Page 6 of 7
- 7 - 

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 

IT IS FURTHER ORDERED that the Clerk enter judgment against Defendant and 

in favor of Plaintiff in the amount of $35,000.00 with interest to run from the date of 

judgment to the date paid at the rate of 0.13% per annum. 

Dated this 11th day of April, 2013. 

Case 3:11-cv-08210-NVW Document 35 Filed 04/11/13 Page 7 of 7