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

CYNTHIA CHASAN, Plaintiff/Appellant, 

v.

FARMERS INSURANCE EXCHANGE; FARMERS INSURANCE 

COMPANY OF ARIZONA, et al., Defendants/Appellees. 

No. 1 CA-CV 14-0832 

Appeal from the Superior Court in Maricopa County 

No. CV1999-004815 

The Honorable Arthur T. Anderson, Judge 

AFFIRMED 

COUNSEL 

Law Offices of Richard Langerman, Phoenix 

By Richard W. Langerman 

Counsel for Plaintiff/Appellant 

Broening Oberg Woods & Wilson, PC, Phoenix 

By James R. Broening, Jathan P. McLaughlin, Kevin R. Myer 

Counsel for Defendants/Appellees
CHASAN v. FARMERS 

Decision of the Court 

2

MEMORANDUM DECISION 

Judge John C. Gemmill delivered the decision of the Court, in which 

Presiding Judge Andrew W. Gould and Judge Margaret H. Downie joined. 

G E M M I L L, Judge: 

¶1 Cynthia Chasan and the estate of her late husband, Dow 

Chasan (collectively “Chasan”) challenge the Maricopa County Superior 

Court’s ruling awarding attorney fees and sanctions to Farmers Insurance 

Company of Arizona (“FICA”) and Farmers Insurance Exchange (“FIE”). 

For the reasons set forth below, we affirm. 

BACKGROUND 

¶2 We address only the facts relevant to this appeal; other details 

may be found in our three earlier decisions: Chasan v. Farmers Group, Inc., 

Case No. 1 CA-CV 03-0102 (Ariz. App. Jan. 20, 2005) (mem. decision) 

(“Chasan I”); Chasan v. Farmers Group, Inc., Case No. 1 CA-CV 07-0323, 2009 

WL 3335341 (Ariz. App. Sept. 24, 2009) (mem. decision) (“Chasan II”); and 

Estate of Chasan v. Farmers Ins. Exchange, Case No. 1 CA-CV 12-0397, 2013 

WL 2297026 (Ariz. App. May 23, 2013) (mem. decision) (“Chasan III”).

¶3 Chasan sued the Farmers Insurance group of companies in 

1999, alleging breach of contract and bad faith stemming from a 1998 

burglary. Chasan’s amended complaint, filed in 2000, named four Farmers 

entities: FICA, FIE, Farmers Group Inc. (“FGI”), and Fire Insurance 

Exchange (“FIRE”). In 2002, the trial court granted summary judgment in 

favor of all four defendants. Chasan appealed; in Chasan I, we reversed the 

summary judgment ruling and remanded for further proceedings. 

¶4 Following Chasan I, Chasan’s claims against FGI and FIRE 

were again resolved by motion. Chasan’s claims against FICA and FIE went 

to trial, where the jury found for the Chasans and awarded them 

compensatory and punitive damages. FICA and FIE appealed, and in 

Chasan II, we reduced the punitive damages award to Mrs. Chasan, vacated 

the punitive damages award to Mr. Chasan, reversed and vacated an 

additur entered for Mr. Chasan, and vacated the attorney fees award to the 

Chasans. 2009 WL 3335341 at *16, ¶¶ 71–73. We also found that FICA and 
CHASAN v. FARMERS 

Decision of the Court 

3

FIE were successful parties entitled to recover reasonable attorney fees and 

costs. Id. at *16, ¶ 70. 

¶5 On remand following Chasan II, the trial court affirmed, in 

large part, the jury’s compensatory damages awards and again awarded 

punitive damages to Mr. Chasan. The trial court also ruled that the Chasans 

were successful parties entitled to recover reasonable attorney fees and 

costs. As a result, the trial court denied FICA’s and FIE’s motion for 

sanctions under Arizona Rule of Civil Procedure (“Rule”) 68, explaining 

that the motion hinged on an offer of judgment to Chasan for $133,333.33, 

including attorney fees and costs. 

¶6 Both sides appealed, which led to Chasan III. There, we

determined the judgments the Chasans obtained were not more favorable 

than FICA’s and FIE’s December 14, 2000 offers of judgment. Chasan III, 

2013 WL 2297026, at *6–*10, ¶¶ 25–36. We vacated the fee awards to the 

Chasans, deemed FICA and FIE the successful parties from December 14, 

2000 forward, and remanded for a determination of a reasonable attorney 

fees award to FICA and FIE. Id. at *9, ¶ 36. We also determined that FICA 

and FIE would be eligible to request Rule 68 sanctions and explained that 

the trial court “may consider [Chasan’s] argument that, although FICA and 

FIE were jointly represented, FICA cannot recover attorneys’ fees because 

the bills were sent to and paid by FIE . . . . ” Id. 

¶7 On remand, FICA and FIE moved for an award of attorney 

fees and Rule 68 sanctions. Chasan opposed the motion, arguing that 

neither FICA nor FIE paid the fees they sought to recover. Chasan also 

applied for a supplemental attorney fees award, arguing that she was the 

successful party from October 10, 2002 forward. 

¶8 The trial court granted FICA’s and FIE’s requests for attorney 

fees and Rule 68 sanctions and denied Chasan’s supplemental fee 

application. The trial court entered judgment against Chasan for $223,416 

in attorney fees and $100,915.81 in Rule 68 sanctions. Chasan timely 

appeals. We have jurisdiction under Arizona Revised Statutes (“A.R.S.”) 

section 12-2101(A)(2). 

DISCUSSION 

¶9 This appeal hinges on the parties’ competing interpretations 

of A.R.S. § 12-341.01 and Rule 68. We review these interpretations de novo, 

using principles of statutory construction. See Halt v. Gama ex rel. Cty. of 

Maricopa, 238 Ariz. 352, 354, ¶ 9 (App. 2015); Arizona Tile, LLC v. Berger, 223 

Ariz. 491, 498–99, ¶ 35 (App. 2010). 
CHASAN v. FARMERS 

Decision of the Court 

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I. Attorney Fees Award to FICA and FIE 

¶10 Chasan argues neither FICA nor FIE can recover attorney fees 

because the fees were paid by FIRE, not FICA or FIE. Chasan contends that 

the “billing statements prepared . . . indicate that the firm’s client in the 

Chasan litigation was FIRE” and therefore FICA and FIE are precluded 

from recovering attorney fees under A.R.S. § 12-341.01(B), which limits the 

recovery of fees to “the amount paid or agreed to be paid.”

¶11 This court has explained that § 12-341.01(B)1 imposes two 

prerequisites on the recovery of attorney fees: (1) an attorney-client 

relationship between the litigant and counsel; and (2) a “genuine financial 

obligation on the part of the litigant” to pay the fees. Moedt v. Gen. Motors 

Corp., 204 Ariz. 100, 103, ¶ 11 (App. 2002) (internal citation and quotation 

omitted). Chasan points to a 2014 letter from counsel providing the address 

to which billing statements “generally” were sent and three checks issued 

by “Farmers Insurance Group of Companies/Fire Insurance Exchange” as 

proof that neither FICA nor FIE actually paid — or incurred an obligation 

to pay — attorney fees. See A.R.S. § 12-341.01(B). 

¶12 Even assuming FIRE made payments to counsel, FICA and 

FIE had an attorney-client relationship with counsel and accepted the 

benefits of representation.2 FICA and FIE therefore incurred an obligation 

to pay attorney fees. See Wilcox v. Waldman, 154 Ariz. 532, 538 (App. 1987) 

(“[T]he fact that fees may ultimately be borne by third parties . . . does not 

prevent the successful party from meeting the requirements of A.R.S. § 12-

 

1 In relevant part, A.R.S. § 12-341.01 provides: 

A. In any contested action arising out of a contract, express or 

implied, the court may award the successful party reasonable 

attorney fees. 

. . .

B. The award of reasonable attorney fees pursuant to this 

section should be made to mitigate the burden of the expense 

of litigation to establish a just claim or a just defense. It need 

not equal or relate to the attorney fees actually paid or 

contracted, but the award may not exceed the amount paid or 

agreed to be paid. 

2 Neither FICA nor FIE appear to dispute that another Farmers entity paid 

at least a portion of the fees. 
CHASAN v. FARMERS 

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341.01(B)”); see also Journal-Minter Publ’g Co. v. Curley, 31 Ariz. 280, 282–83 

(1927) (explaining that when services are rendered to a client, the obligation 

to pay for those services arises regardless of whether a written agreement 

exists). 

¶13 Chasan cites Lisa v. Strom, 183 Ariz. 415 (App. 1995), to 

support her contention that FICA’s and FIE’s obligation to pay fees was not 

genuine. But Lisa is distinguishable on multiple grounds. There, we held 

an attorney-litigant representing himself, his wife, and his marital 

community could not recover attorney fees under A.R.S. § 12-349. Lisa, 183 

Ariz. at 418–20. We explained that “[t]he judicial system would be unfair if 

an attorney-litigant could qualify for a fee award without incurring the 

potential out-of-pocket obligation that the opposing nonlawyer party must 

bear in order to qualify for a similar award.” Id. at 419. We further noted 

that an award of fees would not have made the parties whole because any 

hypothetical payment would have been “made by the [marital] community 

to itself.” Id. at 420. 

¶14 Neither FICA nor FIE is an attorney-litigant and neither 

represented itself in this litigation. The facts of this case thus are much 

closer to Caruthers v. Underhill, 230 Ariz. 513 (App. 2012). There, the 

plaintiffs argued that the successful defendant, Underhill Holding 

Company (“UHC”), could not recover attorney fees because a related 

company, Underhill Transfer Company (“UTC”), paid UHC’s fees. Id. at 

527, ¶ 60. We found UHC could recover attorney fees because 

[t]he declaration of UHC’s counsel submitted in support of 

UHC’s application for attorneys’ fees stated that, pursuant to 

its fee agreement with his firm, UHC was billed monthly for 

all attorneys’ fees and other expenses incurred. It further 

noted that UHC had already paid for the vast majority of 

those fees and expenses. 

...

Although the billing statements list Underhill [Transfer] 

Company and not UHC next to “Client Number,” UHC’s 

counsel explained at oral argument that the firm’s software 

allowed only one name. In addition, many of the invoices 

were addressed to Underhill Holding Corporation. The 

record sufficiently establishes that UHC agreed to pay its 

attorneys’ fees. 
CHASAN v. FARMERS 

Decision of the Court 

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Id. at 527, ¶¶ 60–61. 

¶15 Here, the affidavits FICA and FIE submitted with their 

attorney fees application state that “the terms of the fee arrangement 

between the Law Firm and Farmers provide that the Law Firm be 

reimbursed for attorney and paralegal services at a specified hourly rate” 

and that “the records, and accompanying checks issued by Farmers indicate 

that the [billing] statements were submitted to, and paid, by Farmers.” 

FICA and FIE also submitted a record of payments to counsel totaling 

$663,747.72. On this record, the trial court permissibly determined that 

FICA and FIE owed a genuine obligation to pay their counsel’s fees. Section 

12-341.01(B) does not bar FICA and FIE from recovering attorney fees.

II. Chasan’s Supplemental Application for Attorney Fees

¶16 Chasan also challenges the trial court’s denial of her 

supplemental application for attorney fees. On October 10, 2002, the 

Chasans sent a letter to counsel for FICA and FIE expressing the Chasans’ 

then-willingness to “forego any appeal in this matter in exchange for a 

satisfaction of any judgment that your clients obtain.” After our decision in 

Chasan III, Chasan filed a supplemental application for attorney fees, 

contending — for the first time — that this letter constituted a settlement 

offer more favorable than the final judgment FICA and FIE ultimately 

obtained. Accordingly, Chasan argued she is the successful party under 

A.R.S. § 12-341.01(A)3 and is entitled to attorney fees from October 10, 2002 

forward. 

¶17 In response, FICA and FIE argued that Chasan was precluded 

from asserting her successful party argument because she failed to raise it 

 

3 In relevant part, A.R.S. § 12-341.01(A) provides: 

If a written settlement offer is rejected and the judgment 

finally obtained is equal to or more favorable to the offeror 

than an offer made in writing to settle any contested action 

arising out of a contract, the offeror is deemed to be the 

successful party from the date of the offer and the court may 

award the successful party reasonable attorney fees. 

We assume, without deciding, that the October 10, 2002 letter constituted a 

“written settlement offer” for the purposes of this statute. 
CHASAN v. FARMERS 

Decision of the Court 

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in Chasan III. The trial court agreed, denied Chasan’s fee application, and 

awarded attorney fees to FICA and FIE “from December 14, 2000 forward.” 

¶18 A question that was “necessarily involved and decided” on 

appeal generally becomes the “law of the case” and may not be 

reconsidered by a trial court on remand. State v. Bocharski, 218 Ariz. 476, 

489, ¶ 60 (2008) (quoting State v. King, 180 Ariz. 268, 278 (1994)); see also 

Lennar Corp. v. Transamerica Ins. Co., 227 Ariz. 238, 242–43, ¶ 12 (App. 2011). 

The doctrine is meant to uphold the principle that “orderly processes of 

judicial procedure require an end to litigation.” State v. Maxwell, 19 Ariz. 

App. 431, 435 (1973) (quoting Gore v. Bingaman, 124 P.2d 17, 20 (Cal. 1942)). 

Nonetheless, we will not preclude a court from reconsidering a prior 

decision if substantial injustice will result. Lennar Corp., 227 Ariz. at 243, ¶ 

12. 

¶19 The law of the case doctrine applies here. As stated by this 

court, the central issue in Chasan III was “whether a judgment finally 

obtained by [Chasan] was more favorable than [FICA’s and FIE’s] written 

settlement offer she rejected a dozen years ago,” implicating “the successful 

party determination for a statutory attorneys’ fees award.” 2013 WL 

2297026 at *1, ¶ 1. We held Chasan was the successful party until FICA and 

FIE made a settlement offer on December 14, 2000; FICA and FIE were 

deemed the successful parties “from December 14, 2000 forward.” Id. at *9, 

¶ 36. The successful party determination was therefore “necessarily 

involved and decided” in Chasan III.

4 See Bocharski, 218 Ariz. at 489, ¶ 60. 

The trial court appropriately refused to reconsider this court’s 

determination that FICA and FIE were the prevailing parties from 

December 14, 2000 forward. 

¶20 We disagree with Chasan’s contention that she could not have 

raised the October 2002 letter in Chasan III because she was not aggrieved 

by the judgment then under review. As the appellants, FICA and FIE 

argued they were entitled to attorney fees from December 14, 2000 forward. 

As the appellee, Chasan did not need to be aggrieved in order to respond 

to this affirmative argument. Chasan could have raised the issue of the 

October 2002 settlement offer during Chasan III. Because Chasan had a fair 

opportunity to present her argument, applying the law of the case doctrine 

on remand does not result in a “manifestly unjust decision.” Lennar Corp., 

 

4 Because Chasan III held FICA and FIE to be the successful parties “from 

December 14, 2000 forward” (emphasis added), we find unconvincing 

Chasan’s argument that the court’s decision did not address whether 

FICA’s and FIE’s success “would continue indefinitely.” 
CHASAN v. FARMERS 

Decision of the Court 

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227 Ariz. at 243, ¶ 12 (quoting Dancing Sunshines Lounge v. Indus. Comm’n, 

149 Ariz. 480, 482 (1986)). 

¶21 Furthermore, even if the law of the case doctrine does not 

apply here, we agree that Chasan waived the argument that the 2002 letter 

changed the successful party calculus. As this court has explained, “issues 

not raised and argued in a first appeal may not be raised later in a second 

appeal.” Jimenez v. Wal-Mart Stores, Inc., 206 Ariz. 424, 427, ¶ 11 (App. 2003) 

(citing Carrillo v. State, 169 Ariz. 126, 132 (App. 1991)). In Chasan III, Chasan 

had the opportunity to argue that she was the successful party as of October 

10, 2002. Because Chasan did not clearly raise and argue the issue until 

after Chasan III, she has waived the argument. See Carrillo, 169 Ariz. at 132. 

The trial court correctly determined that she could not assert it on remand. 

Accordingly, we affirm the trial court’s denial of Chasan’s supplemental 

application for attorney fees. 

III. Rule 68 Sanctions Award to FICA and FIE 

¶22 Chasan also challenges the trial court’s award of Rule 68 

sanctions. We review the imposition of sanctions for an abuse of discretion. 

Berry v. 352 E. Virginia, LLC, 228 Ariz. 9, 15, ¶ 31 (App. 2011). 

¶23 Chasan first contends Chasan III held that “the trial court 

should limit the sanctions to the costs/expenses actually paid by each 

party.” We did not so hold; instead, we found FICA and FIE were eligible 

to request Rule 68 sanctions upon remand. Chasan III, 2013 WL 2297026, at 

* 8, *10, ¶¶ 31, 36. 

¶24 Chasan also argues FICA and FIE cannot recover Rule 68 

sanctions because FIRE allegedly paid their costs and expenses. Rule 68, as 

it existed in 2000 when FICA and FIE made their offers of judgment,5

authorized an award of “reasonable expert witness fees and double the 

taxable costs of the offeror . . . incurred after making the offer.” Ariz. R. Civ. 

P. 68(d) (emphasis added). Chasan does not dispute that the costs FICA 

and FIE sought to recover were incurred on their behalf. Therefore, even 

assuming FIRE actually paid the costs, FICA and FIE incurred them. FICA 

and FIE may therefore recover Rule 68 sanctions. 

 

5 The parties stipulated in Chasan III that the 2000 version of Rule 68 applies 

to FICA’s and FIE’s offers of judgment. 2013 WL 2297026, at *7 n.7, ¶ 26. In 

any event, the language of the current Rule 68(d) is substantially similar on 

this point. 
CHASAN v. FARMERS 

Decision of the Court 

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CONCLUSION 

¶25 We affirm the trial court’s awards of attorney fees and Rule 

68 sanctions to FICA and FIE. Both sides request attorney fees on appeal 

pursuant to A.R.S. §§ 12-341.01(A) and 12-349. In our discretion, we deny 

these requests. Because FICA and FIE are the successful parties in this 

appeal, they are entitled to taxable costs upon compliance with ARCAP 21.