NOTICE: NOT FOR OFFICIAL PUBLICATION.

UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL

AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE

ARIZONA COURT OF APPEALS

DIVISION ONE

SHAHID SHAWN HAMEED, et al., Plaintiffs/Appellees,

v.

ISHO PETROLEUM, LLC, Defendant/Appellant.

No. 1 CA-CV 22-0598 

Appeal from the Superior Court in Maricopa County

CV2022-003915

The Honorable Randall H. Warner, Judge

VACATED AND REMANDED

COUNSEL

Degnan Law Group, Phoenix

By David W. Degnan, Mark W. Horne, Casey C. Dempsey

Counsel for Defendant/Appellant

Iannitelli Marcolini, P.C., Phoenix

By Claudio E. Iannitelli

Counsel for Plaintiffs/Appellees

FILED 5-16-2023
HAMEED, et al. V. ISHO PETROLEUM

Decision of the Court

2

MEMORANDUM DECISION

Judge Daniel J. Kiley delivered the decision of the Court, in which Presiding 

Judge Maria Elena Cruz and Judge James B. Morse Jr. joined.

K I L E Y, Judge:

¶1 Isho Petroleum, LLC (“Isho”) appeals from the superior 

court’s denial of its request for an award of attorney fees incurred in 

securing the dismissal of a complaint filed by Shahid Shawn Hameed and 

Salman Rasheed (“Plaintiffs”). For the following reasons, we vacate the 

superior court’s ruling and remand for further proceedings.

FACTS AND PROCEDURAL BACKGROUND

¶2 After Plaintiffs agreed to buy, from Isho, a gas station and the 

land it sits on, the parties set forth the purchase terms in two separate 

contracts (the “Agreements”). The first is the Business Assets Purchase 

Agreement (“BAPA”) governing the sale of the gas station, while the 

second is the Commercial Real Estate Purchase Contract (“CRPC”) 

governing the sale of the underlying land.

¶3 The BAPA and the CRPC are similar in many respects. Both 

contracts, for example, contain mandatory fee-shifting provisions entitling 

the party that prevails in contract enforcement proceedings to an award of 

reasonable attorney fees and costs.1

1 The BAPA provides, in pertinent part:

Should Buyer, Seller, Broker, or Broker’s agents[] file an 

action . . . to enforce any right or rights arising under this 

[BAPA], the party prevailing in such action shall be entitled to 

recover reasonable attorney’s fees and all costs and expenses 

incurred incidental to the successful prosecution or defense of 

any such action.

The CRPC similarly provides:
HAMEED, et al. V. ISHO PETROLEUM

Decision of the Court

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¶4 The two contracts contain material differences as well. Of 

relevance here, the CRPC contains an alternative dispute resolution 

(“ADR”) clause that requires the parties to engage in mediation of any 

dispute prior to seeking judicial relief, while the BAPA contains no 

comparable provision.2 Additionally, the BAPA contains an 

order-of-precedence clause providing that, “[i]n the event of a conflict 

between the terms of the [BAPA] and the [CRPC], the terms of this [BAPA] 

shall control.”

¶5 When a dispute arose during the escrow process, Plaintiffs 

filed a complaint against Isho asserting alternative claims for damages and 

specific performance. Isho filed a motion to dismiss, asserting that the court 

lacked subject matter jurisdiction because the parties had not yet complied 

with the CRPC’s ADR clause by engaging in mediation. In response, 

Plaintiffs asserted that their claims were not subject to mediation under the 

CRPC’s ADR clause because, by virtue of the BAPA’s order-of-precedence 

clause, the BAPA, not the CRPC, governs their dispute, and the BAPA 

contains no ADR clause. Plaintiffs also stated, however, that they would 

agree to stay the case and mediate.

¶6 The superior court granted Isho’s motion and dismissed the 

case without prejudice, holding that “Plaintiffs filed this lawsuit 

prematurely” because the parties had not yet engaged in mediation. Noting

that the CRPC’s ADR clause mandates mediation as a condition precedent 

to litigation, the superior court found that the absence of a comparable ADR 

If Buyer or Seller files suit against the other to enforce any 

provision of this Contract or for damages sustained by reason of 

its breach, all parties prevailing in such action, on trial and 

appeal, shall receive their reasonable attorney’s fees and costs as 

awarded by the court.

2 The CRPC provides as follows:

Mediation: Buyer and Seller agree to mediate any dispute or 

claim arising out of or relating to this Contract, any alleged 

breach of this Contract, or services provided in relation to this 

Contract, claims for Earnest Money or representations made by 

the Buyer or Seller in connection with the sale, purchase, 

financing, condition, or other aspect of the Property to which this 

Contract pertains, including, without limitation, allegations of 

concealment, misrepresentation, negligence and/or fraud 

before resorting to court action.
HAMEED, et al. V. ISHO PETROLEUM

Decision of the Court

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provision in the BAPA did not create a “conflict” between the two 

Agreements that would trigger application of the BAPA’s 

order-of-precedence clause.

¶7 The superior court denied Isho’s request for an award of 

attorney fees, however, concluding that “there is no prevailing party here 

because the merits of the dispute have not been adjudicated.”

¶8 After denying Isho’s subsequent motion for reconsideration, 

the superior court entered judgment. Isho appealed the denial of its fee 

request. Plaintiffs filed a notice of cross-appeal, which they later withdrew.

We have jurisdiction over Isho’s appeal under A.R.S. § 12-2101(A)(1).

DISCUSSION

¶9 A contractual fee-shifting provision will be enforced 

according to its terms. Geller v. Lesk, 230 Ariz. 624, 627, ¶ 10 (App. 2012). 

Interpretation of a contractual provision, including a fee-shifting provision, 

is a question of law that we review de novo. See Murphy Farrell Dev., LLLP v. 

Sourant, 229 Ariz. 124, 133, ¶ 31 (App. 2012).

¶10 Isho argues that the superior court abused its discretion in 

denying its fee request, citing Britt v. Steffen, 220 Ariz. 265 (App. 2008), for 

the proposition that, when a contract action “has been dismissed without 

prejudice, the defendant is still considered a ‘successful party’ for purposes 

of A.R.S. § 12-341.01(A) even though such a dismissal does not operate as 

an adjudication upon the merits.” Id. at 267, ¶ 9.

¶11 In response, Plaintiffs “concede” that the superior court 

“incorrectly found that a dismissal without prejudice is not a decision on 

the merits for purpose of a fee award.” They nonetheless assert that the 

court reached the correct result in denying Isho’s fee request because the 

Agreements provide for the award only of “reasonable” fees, and, Plaintiffs

contend, Isho “did not incur any ‘reasonable’ attorney’s fees.” Plaintiffs

explain that they had agreed to stay the litigation and engage in mediation 

as soon as Isho’s counsel raised the issue, and that Isho acted unreasonably

in filing a motion to dismiss instead of accepting Plaintiffs’ offer to stay the 

litigation. Because they had agreed to a stay pending mediation of the 

parties’ dispute, Plaintiffs conclude, Isho’s efforts to secure the dismissal of

the case were “completely superfluous,” and the fees associated with 

securing the dismissal “were unreasonably incurred and therefore not 

recoverable in any amount.”
HAMEED, et al. V. ISHO PETROLEUM

Decision of the Court

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¶12 Because the parties do not dispute that Isho’s success in 

securing the dismissal of the complaint entitles it to “prevailing party” 

status under the Agreements, we need not address that question further. 

Instead, we turn to Plaintiffs’ argument that the superior court’s refusal to 

award Isho fees should be affirmed on the alternative ground that the fees 

Isho claimed were incurred needlessly, and so were not “reasonable” fees

within the meaning of the Agreements’ fee-shifting provisions.

¶13 A court “lacks discretion to deny a fee award” to the party 

that prevails in a contract dispute if such an award is mandated by “the 

terms of the parties’ contract.” Murphy Farrell, 229 Ariz. at 133, ¶ 32. Because 

the prevailing party is only entitled to recover “reasonable” fees, however, 

a court must disallow all requested fees in excess of a reasonable amount. 

See Tucson Ests. Prop. Owners Ass’n v. Jenkins, 247 Ariz. 475, 478, ¶ 10 (App. 

2019) (“[A] contractual provision providing for an award of unreasonable

attorneys’ fees will not be enforced.”) (citation omitted). If the prevailing 

party incurs fees in an amount greater than necessary in light of the result 

obtained, the court must reduce the fee award accordingly. Schweiger v. 

China Doll Rest., Inc., 138 Ariz. 183, 189 (App. 1983) (“Where a party has 

achieved only partial or limited success . . . it would be unreasonable to 

award compensation for all hours expended[.]”). It follows that if none of 

the fees incurred by the prevailing party were reasonably or necessarily 

incurred, then the reasonable amount of a fee award is zero dollars. See 

Farrar v. Hobby, 506 U.S. 103, 117 (1992) (O’Connor, J., concurring) (“[T]he 

reasonable fee” for “a Pyrrhic victory” is “zero.”). The fact that Isho is the 

“prevailing party” under the Agreements did not, therefore, require the 

superior court to award fees to Isho if the court determined that Isho’s 

requested fees were wholly unreasonable.

¶14 Although Plaintiffs “concede” that the superior court 

“incorrectly found” that a fee award was unavailable as a matter of law, 

Plaintiffs ask that we affirm the superior court’s denial of Isho’s fee request

on the alternative ground that “the record supports a finding that all of the 

attorneys’ fees” Isho sought “were unreasonably incurred and therefore not 

recoverable in any amount.” We decline Plaintiffs’ invitation to determine, 

in the first instance, whether Isho acted unreasonably in pursuing dismissal

of the case in lieu of accepting their offer of a stay pending mediation. Such 

a determination should be left to the superior court, which is better 

positioned to do so. See Chase Bank of Ariz. v. Acosta, 179 Ariz. 563, 574 (App. 

1994) (stating that an appellate court will defer to a superior court’s fee 

award in part because of “the trial court’s superior understanding of the 

litigation”) (cleaned up). We will, therefore, remand this matter with 
HAMEED, et al. V. ISHO PETROLEUM

Decision of the Court

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directions that the superior court determine the amount of fees, if any, that 

Isho reasonably incurred in securing the dismissal of this case.

¶15 Isho requests an award of fees on appeal. Because the superior 

court has not yet determined the extent to which Isho reasonably incurred 

fees in litigating its motion to dismiss, we cannot determine the 

reasonableness of the fees Isho has incurred in pursuing this appeal. 

Accordingly, in our discretion, we will leave to the superior court the 

determination of the reasonable amount of fees Isho has incurred on appeal. 

See Murphy Farrell, 229 Ariz. at 134, ¶ 38 (remanding with instructions for 

superior court to resolve remaining claims and holding that, because 

prevailing party had not yet been determined, the superior court should 

make that determination and then “award the prevailing party reasonable 

attorney’s fees expended on appeal”).

CONCLUSION

¶16 We vacate that portion of the judgment denying Isho’s 

attorney fees claim and remand to the superior court for further 

proceedings consistent with this decision.