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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

LAW OFFICE OF WILLIAM R. HOBSON PC, Plaintiff/Appellant, 

v.

ANGELLEE CHEN, Defendant/Appellee. 

No. 1 CA-CV 20-0223 

Appeal from the Superior Court in Maricopa County

No. CV2016-091045 

The Honorable Janice K. Crawford, Judge

REVERSED

COUNSEL

Stanley R. Lerner, P.C., Phoenix

By Stanley R. Lerner

Counsel for Plaintiff/Appellant

Angellee Chen, Oakland, CA

Defendant/Appellee

MEMORANDUM DECISION

Acting Presiding Judge David B. Gass delivered the decision of the Court, 

in which Judge Michael J. Brown and Judge Lawrence F. Winthrop joined.

FILED 12-22-2020
HOBSON v. CHEN

Decision of the Court

2 

G A S S, Judge:

¶1 The Law Office of William R. Hobson, P.C. (Hobson), appeals 

the superior court’s order dismissing its complaint for failure to state a 

claim. Because some interpretations of the complaint entitle Hobson to 

relief, we reverse. 

FACTUAL AND PROCEDURAL HISTORY

¶2 Angellee Chen retained an attorney to sue Maricopa County, 

her former employer. Chen then changed attorneys, retaining Hobson. 

Hobson proposed a hybrid contingency fee agreement to Chen. Under the 

proposed arrangement, Chen would pay an hourly rate that was fifty 

percent lower than Hobson’s usual hourly rate and a reduced contingency

fee if she prevailed. Chen never signed the proposed agreement.

¶3 The proposed hybrid contingency fee agreement provided 

Hobson’s “hourly rates will be . . . $350.00/hour” for senior attorneys. The

proposed agreement did not specify if $350.00 per hour was Hobson’s 

regular hourly rate or the proposed reduced rate. Hobson sent two interim 

invoices to Chen, charging $350.00 per hour for work completed to date, 

which she paid. Hobson did not send any invoices after the first two, 

believing Chen did not have the money to pay them. 

¶4 Though Hobson sent no further invoices to Chen, it continued 

representing her until it successfully opposed the County’s summary 

judgment motion and induced a proposed settlement. At that point, Chen 

fired Hobson and re-retained her first attorney. Soon after, Chen and the 

County settled. Hobson and Chen could not reach an agreement on 

outstanding fees owed for Hobson’s services.

¶5 Hobson filed a one-count complaint seeking to recover in 

quantum meruit the attorney fees it alleges Chen should have paid. Hobson 

and Chen filed a series of pretrial motions. Most relevant here is Chen’s 

third motion to dismiss, which argued Hobson could not recover its fees as 

a matter of law under any theory. The superior court initially denied the 

motion. Chen moved for reconsideration, which the superior court also 

denied. The superior court later reconsidered—sua sponte—Chen’s motions 

and dismissed Hobson’s complaint for failure to state a claim.

¶6 Hobson timely appealed. This court has jurisdiction under 

Article 6, Section 9, of the Arizona Constitution, and A.R.S. § 12-120.21.A.1. 
HOBSON v. CHEN

Decision of the Court

3 

ANALYSIS

¶7 This court reviews de novo a dismissal for failure to state a 

claim. Levine v. Haralson, Miller, Pitt, Feldman & McAnally, P.L.C., 244 Ariz. 

234, 237, ¶ 7 (App. 2018). When reviewing a motion to dismiss, this court 

must “assume the truth of all of the complaint’s material allegations.” 

Stauffer v. Premier Serv. Mortg., LLC, 240 Ariz. 575, 577, ¶ 9 (App. 2016) 

(quotation omitted). This court will not affirm such a dismissal unless the 

plaintiff would not, as a matter of law, be entitled to relief under any 

interpretation of the facts susceptible of proof. Id. (quotation omitted). 

¶8 Under the Arizona Rules of Professional Conduct, a 

contingency fee agreement must be in writing and signed by the client. 

Ariz. R. Super. Ct. 42, ER 1.5(c). In Levine—as here—an attorney sought to 

recover in quantum meruit for legal services provided before the client 

changed counsel. Id. at 236, ¶¶ 2–3. The attorney admitted he had no 

written contingency fee agreement, instead claiming he had an oral 

agreement for a portion of the contingency fees upon success of the client’s 

suit. Id. at ¶ 5. The Levine panel recognized unwritten, and therefore 

unsigned, contingency fee agreements contravene public policy and

preclude recovery of such fees in quantum meruit. Id. at 238, ¶ 13. 

¶9 Hobson argues Levine does not control because Hobson does 

not seek to recover fees under its proposed hybrid contingency fee 

agreement, as Chen did not sign that agreement. Rather, Hobson argues it 

is seeking to recover the reasonable value of the services it provided—the 

remaining balance under a $350.00 hourly rate. Longstanding precedent 

establishes an attorney may claim fees from a client in quantum meruit if “the 

amount of compensation claimed is not fixed by an agreement between the 

parties.” Schwartz v. Schwerin, 85 Ariz. 242, 245 (1959). Accordingly, if there 

was no operative agreement between Hobson and Chen, Hobson would be 

allowed to recover the reasonable value of the legal services it provided. 

¶10 This court may consider a document attached to the 

complaint when evaluating a motion to dismiss for failure to state a claim. 

See Ariz. R. Civ. P. 10(c) (“A copy of a written instrument that is an exhibit 

to a pleading is a part of the pleading for all purposes.”). Exhibit 1 to the 

complaint is a copy of the proposed hybrid fee agreement. It states the 

hourly portion of Hobson’s fees will be “calculated at the reduced hourly 

rate of 50% of the hourly rate of each attorney” working on the matter, 

which the agreement said was $350.00 per hour for senior attorneys. 
HOBSON v. CHEN

Decision of the Court

4 

¶11 Admittedly, the proposed hybrid contingency fee agreement 

does not make it clear whether the $350.00 represents the discounted rate 

(from $700.00) or whether the $350.00 represents the standard rate to be 

discounted (to $175.00). Exhibit 6 to the complaint—which contains an 

email William Hobson sent to Chen’s rehired counsel when the fee issue 

arose—adds to the ambiguity by arguably conflicting with the complaint’s 

allegations. In the email, William Hobson said he only realized Chen had 

not signed the proposed hybrid contingency fee agreement when Chen’s 

rehired counsel asked to see the signed copy.

¶12 The above discussion establishes why, at the motion-todismiss stage, the superior court could not reasonably resolve whether 

Hobson was seeking to recover fees under the unsigned contingency fee 

agreement. See Levine, 244 Ariz. at 239, ¶ 19. If we take Hobson’s well-pled 

allegations as true, some allegations conflict with information in the 

documents attached to the complaint, creating fact issues. Some 

interpretations of the complaint’s allegations would allow Hobson to 

recover its fees. The superior court, therefore, erred when it granted Chen’s 

motion to dismiss for failure to state a claim. See Schwartz, 85 Ariz. at 245; 

Levine, 244 Ariz. at 238, ¶ 13. 

CONCLUSION

¶13 The superior court’s dismissal of Hobson’s complaint is

reversed. We grant Hobson’s request for costs incurred in this appeal under 

ARCAP 21 and A.R.S. § 12-341. We decline to award attorney fees at this 

stage, but the superior court may consider any requests for fees on remand, 

including fees incurred in this appeal, pending the outcome of this 

litigation. See Eans-Snoderly v. Snoderly, 249 Ariz. 552, 559, ¶ 27 (App. 2020).