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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Andes Industries, Inc., and PCT 

International, Inc., 

Plaintiffs, 

v. 

EZconn Corporation and eGtran 

Corporation, 

Defendants.

No. CV-15-01810-PHX-NVW

ORDER 

Before the Court is EZconn Corporation’s Motion for an Award of Attorneys’ 

Fees (Doc. 42), PCT’s opposition to the Motion (Doc. 43), EZconn’s reply (Doc. 49), and 

EZconn’s supplement to the Motion (Doc. 54). 

The Motion and supplement seek an award based on attorney fees invoiced to 

EZconn for legal services provided on behalf of EZconn, eGtran Corporation, Cheng-Sun 

Lan, and Polar Star Management Ltd. during January 2016 through February 2018 by its 

counsel Hagens Berman Sobol Shapiro LLC related to CV-15-01810-PHX-NVW and 

CV-15-02549-PHX-NVW. EZconn does not seek reimbursement for any of the attorney 

fees invoiced to eGtran Corporation during September 2013 through March 2016 by its 

counsel Ruttenberg IP Law, PC, related to CV-14-00400-APG-GWF (transferred to this 

Court as CV-15-02549-PHX-NVW), which are the subject of a separate fee application 

(Doc. 46) and order. 
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I. BACKGROUND 

Andes Industries, Inc., owns PCT International, Inc., which develops, 

manufactures, and sells products for broadband telecommunications networks. Andes 

and PCT are Nevada corporations and have their principal place of business in Mesa, 

Arizona. eGtran Corporation is a British Virgin Islands corporation with its principal 

place of business in Taiwan. EZconn Corporation is a Taiwanese corporation with places 

of business in Taiwan and the People’s Republic of China. At relevant times, eGtran 

Corporation held an ownership interest in EZconn. For a number of years, EZconn 

manufactured broadband telecommunications products for PCT and also for its 

competitor Holland Electronics, LLC. 

On March 18, 2014, Andes and PCT sued EZconn, eGtran Corporation, ChengSun Lan, Polar Star Management Ltd., Chi-Jen (Dennis) Lan, and Kun-Te Yang in the 

District of Nevada (CV-14-00400-APG-GWF). Andes and PCT pled twelve claims, 

alleging a conspiracy among all Defendants and seeking a judgment holding the 

Defendants jointly and severally liable. Among other things, Andes and PCT alleged that 

EZconn breached its contracts with PCT by disclosing PCT’s confidential and proprietary 

information to Holland Electronics. On March 25, 2015, the Nevada district court 

dismissed Andes and PCT’s claims against EZconn and eGtran Corporation for lack of 

personal jurisdiction. 

On September 10, 2015, Andes and PCT sued EZconn and eGtran Corporation in 

this court (CV-15-01810-PHX-NVW), alleging the same twelve claims that the Nevada 

district court had dismissed for lack of personal jurisdiction. On December 14, 2015, 

upon motion by Andes and PCT, the Nevada district court transferred the remainder of 

CV-14-00400-APG-GWF to this Court, which was opened as CV-15-02549-PHX-NVW. 

On June 24, 2016, the Court dismissed with prejudice all claims by Andes and 

PCT against eGtran Corporation, Polar Star Management Ltd., and Cheng-Sun Lan and 

all claims against EZconn except for claims of breach of contract and breach of the 
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implied duty of good faith and fair dealing. On July 22, 2016, Andes and PCT filed an 

appeal from the June 24, 2016 Order, noting that the appeal likely was premature because 

a final judgment had not been entered. On August 23, 2016, Andes and PCT filed a 

motion to resolve jurisdiction or, in the alternative, to stay the appeal. On October 18, 

2016, the Ninth Circuit dismissed the appeal for lack of jurisdiction. 

On September 14, 2017, the Court granted summary judgment in EZconn’s favor 

on the claims of breach of contract and breach of the implied duty of good faith and fair 

dealing, and judgment was entered. On September 28, 2017, judgment was entered in 

favor of eGtran Corporation and against Andes and PCT. The judgments awarded 

EZconn and eGtran Corporation all of the relief they sought. 

EZconn seeks award of attorney fees under A.R.S. § 12-341.01(A) in the total 

amount of $443,400.90, which were incurred defending itself, eGtran Corporation, 

Cheng-Sun Lan, and Polar Star Management Ltd. in CV-15-01810-PHX-NVW and CV15-02549-PHX-NVW and defending appeal No. 16-16340 in the United States Court of 

Appeals for the Ninth Circuit. EZconn seeks to recover only fees that it was charged and 

has paid in full. 

II. ANALYSIS 

A. A.R.S. § 12-341.01(A) Permits Award of Attorney Fees Related to All 

of Andes and PCT’s Claims Against EZconn, eGtran Corporation, 

Polar Star Management Ltd., and Cheng-Sun Lan. 

A.R.S. § 12-341.01(A) provides: “In any contested action arising out of a 

contract, express or implied, the court may award the successful party reasonable attorney 

fees.” Under § 12-341.01(A), attorney fees may be awarded based upon facts that show a 

breach of contract, the breach of which may also constitute a tort. Sparks v. Republic 

Nat. Life Ins. Co., 132 Ariz. 529, 543, 647 P.2d 1127, 1141 (1982). Intertwining of 

contract and tort legal theories does not preclude a fee award if the cause of action in tort 

could not exist but for the breach of contract. Id.; Ramsey Air Meds, L.L.C. v. Cutter 
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Aviation, Inc., 198 Ariz. 10, 13, 6 P.3d 315, 318 (Ct. App. 2000). “[W]hen two claims 

are so intertwined as to be indistinguishable, a court has discretion to award attorney fees 

under § 12–341.01 even though the fees attributable to one of the causes of action would 

not be recoverable under this statute.” Zeagler v. Buckley, 223 Ariz. 37, 39, 219 P.3d 

247, 249 (Ct. App. 2009). “Moreover, when, as here, claims are so interrelated that 

identical or substantially overlapping discovery would occur, there is no sound reason to 

deny recovery of such legal fees.” Id. 

In CV-14-00400-APG-GWF, CV-15-01810-PHX-NVW, and CV-15-02549-PHXNVW, Andes and PCT pled the following twelve claims against eGtran Corporation, 

EZconn, Cheng-Sun Lan, Polar Star Management Ltd., Chi-Jen (Dennis) Lan, and KunTe Yang: breach of fiduciary duty, aiding and abetting a breach of fiduciary duty, 

usurpation of corporation opportunities, breach of contract, tortious interference with 

contract, tortious interference with prospective economic advantage, fraud, constructive 

fraud, breach of the implied duty of good faith and fair dealing, unfair competition, unjust 

enrichment, and civil conspiracy. 

Andes and PCT alleged that Cheng-Sun Lan, Chi-Jen (Dennis) Lan, Kun-Te Yang, 

Polar Star Management Ltd., EZconn, and eGtran Corporation misappropriated PCT’s 

confidential proprietary information and abused the fiduciary duty arising from their 

special, confidential relationship with PCT. Andes and PCT alleged that eGtran 

Corporation directed and controlled operations of EZconn, the corporate dealings of 

eGtran Corporation and EZconn were intermingled, and Cheng-Sun Lan directed and 

controlled all EZconn and eGtran Corporation business operations related to PCT. Andes 

and PCT alleged that EZconn and eGtran Corporation were alter egos of Cheng-Sun Lan 

and that all of the Defendants acted in concert under Cheng-Sun Lan’s control. Andes 

and PCT alleged that, relying on representations by Cheng-Sun Lan and others at 

EZconn, PCT engaged EZconn as its contract manufacturer and, pursuant to a contractual 

agreement, provided EZconn with confidential proprietary information. Andes and PCT 
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alleged that the written purchase orders by which PCT contracted for the manufacture of 

specific products contained detailed Terms and Conditions by which the parties agreed to 

broad protections of PCT’s confidential proprietary information. Andes and PCT alleged 

that EZconn and eGtran Corporation, under the control of Cheng-Sun Lan and his 

affiliates, disclosed PCT’s confidential proprietary information in violation of the 

contractual Terms and Conditions. Andes and PCT alleged that EZconn breached its 

obligations under contracts with PCT and that eGtran Corporation and Cheng-Sun Lan 

tortiously interfered with PCT’s contractual rights. Andes and PCT alleged that each of 

the Defendants breached fiduciary duties owed to PCT, aided and abetted a breach of 

fiduciary duty, usurped PCT’s corporate opportunities, tortiously interfered with PCT’s 

prospective contractual relationships, committed constructive fraud, breached the implied 

duty of good faith and fair dealing owed as a party to a contract with PCT, violated 

common law prohibiting unfair competition, received unjust enrichment, and conspired 

and acted in concert to commit the alleged wrongful and illegal conduct. 

All of the claims pled by Andes and PCT were intertwined, arose out of the 

contractual relationship between PCT and EZconn, and were so interrelated that identical 

or substantially overlapping legal services were required. Further, Andes and PCT’s 

pleadings sought a judgment holding all of the Defendants jointly and severally liable for 

all damages sustained by Andes and PCT. 

In January 2016, EZconn, eGtran Corporation, Cheng-Sun Lan, and Polar Star 

Management Ltd. engaged the law firm Hagens Berman Sobol Shapiro LLC to represent 

them in CV-15-01810-PHX-NVW and CV-15-02549-PHX-NVW. Under the 

engagement agreement, EZconn agreed to pay for services performed on behalf of 

EZconn, eGtran Corporation, Polar Star Management Ltd., and Cheng-Sun Lan. On June 

24, 2016, all claims against eGtran Corporation, Polar Star Management Ltd., and ChengSun Lan were dismissed with prejudice under Rule 12(b)(6) of the Federal Rules of Civil 

Procedure at the same time that most of the claims against EZconn were dismissed with 
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prejudice.1 Under A.R.S. § 12-341.01(A), a prevailing party may recover a reasonable 

attorney’s fee “for every item of service which, at the time rendered, would have been 

undertaken by a reasonable and prudent lawyer to advance or protect his client’s interest” 

in the action. Schweiger v. China Doll Rest., Inc., 138 Ariz. 183, 188, 673 P.2d 927, 932 

(Ct. App. 1983). It was reasonable and prudent for EZconn to pay for the legal expenses 

of eGtran Corporation, Polar Star Management Ltd., and Cheng-Sun Lan where joint and 

several liability was pled, many legal issues were common to all Defendants, and it was 

likely that the only claims that would survive dismissal were the contract claims against 

EZconn. 

Therefore, under A.R.S. § 12-341.01(A), the Court has discretion to award fees to 

EZconn that were incurred in defense of all of the claims pled by Andes and PCT against 

EZconn, eGtran Corporation, Polar Star Management Ltd., and Cheng-Sun Lan. 

However, the Supplement to EZconn Corporation’s Motion for Award of Attorneys’ Fees 

includes $2,604.00 in fees incurred after judgment related to disputes between EZconn 

and PCT regarding EZconn patents (Doc. 54-3), which the Court finds to be 

insufficiently related to the claims for which EZconn, eGtran Corporation, Polar Star 

Management Ltd., and Cheng-Sun Lan were the successful parties. 

B. Factors to Be Considered Under A.R.S. § 12-341.01(A) Favor the 

Discretionary Award of Attorney Fees. 

An award of fees under § 12-341.01 is discretionary. Fulton Homes Corp. v. BBP 

Concrete, 214 Ariz. 566, 569, 155 P.3d 1090, 1093 (Ct. App. 2007). The statute does not 

establish a presumption that attorney fees be awarded in contract actions. Associated 

Indem. Corp. v. Warner, 143 Ariz. 567, 569, 694 P.2d 1181, 1183 (1985). In determining 

whether to award attorney fees under § 12-341.01, trial courts may consider the following 

 1

 EZconn’s fee application does not seek fees incurred to defend Chi-Jen (Dennis) 

Lan or Kun-Te Yang, who had not been served before EZconn, eGtran Corporation, 

Cheng-Sun Lan, and Polar Star Management Ltd. filed Rule 12(b)(6) motions. 
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non-exclusive factors pertinent to discretion: the merits of the unsuccessful party’s case, 

whether the litigation could have been avoided or settled, whether assessing fees against 

the unsuccessful would cause an extreme hardship, the degree of success by the 

successful party, any chilling effect the award might have on other parties with tenable 

claims or defenses, the novelty of the legal questions presented, and whether such claim 

had previously been adjudicated in this jurisdiction. Id. at 570, 694 P.2d at 1184. 

In their opposition to EZconn’s fee request, Andes and PCT do not dispute that the 

Associated Indemnity factors favor award of attorney fees here. EZconn, eGtran 

Corporation, Polar Star Management Ltd., and Cheng-Sun Lan were entirely successful 

in this litigation. Andes and PCT’s claims lacked merit; most were dismissed with 

prejudice for failure to state a claim. EZconn did not move to dismiss their breach of 

contract claim, but instead obtained summary judgment based on evidence showing 

undisputed facts. Because Andes and PCT’s claims were not tenable, it is unlikely that a 

fee award would have a chilling effect on other parties with tenable claims. 

C. The Requested Amount of Attorney Fees Is Reasonable. 

“The award of reasonable attorney fees pursuant to [§ 12-341.01] 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.” A.R.S. § 12-341.01(B). 

“Once a litigant establishes entitlement to a fee award, the touchstone under § 12-341.01 

is the reasonableness of the fees.” Assyia v. State Farm Mut. Auto. Ins. Co., 229 Ariz. 

216, 222, 273 P.3d 668, 674 (Ct. App. 2012). 

To determine reasonable attorney’s fees in commercial litigation, courts begin by 

determining the actual billing rate that the lawyer charged in the particular matter. 

Schweiger v. China Doll Rest., Inc., 138 Ariz. 183, 187, 673 P.2d 927, 931 (Ct. App. 

1983). “[I]n corporate and commercial litigation between fee-paying clients, there is no 

need to determine the reasonable hourly rate prevailing in the community for similar 
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work because the rate charged by the lawyer to the client is the best indication of what is 

reasonable under the circumstances of the particular case.” Id. at 187-88, 673 P.2d at 

931-32. If persuaded that the contracted hourly rates are unreasonable, courts may use a 

lesser rate. Id. at 188, 673 P.2d at 931. Andes and PCT do not dispute the 

reasonableness of the hourly rates agreed to and paid by EZconn. 

Under the Arizona Supreme Court’s Rules of Professional Conduct, factors to be 

considered in determining the reasonableness of an attorney fee include the following: 

(1) the time and labor required, the novelty and difficulty of the questions 

involved, and the skill requisite to perform the legal service properly; 

(2) the likelihood, if apparent to the client, that the acceptance of the 

particular employment will preclude other employment by the lawyer; 

(3) the fee customarily charged in the locality for similar legal services; 

(4) the amount involved and the results obtained; 

(5) the time limitations imposed by the client or by the circumstances; 

(6) the nature and length of the professional relationship with the client; 

(7) the experience, reputation, and ability of the lawyer or lawyers 

performing the services; and 

(8) the degree of risk assumed by the lawyer. 

A.R.S. Sup. Ct. Rules, Rule 42, Rules of Prof. Conduct, ER 1.5. In addition, Local Rules 

require consideration of whether the fee contracted between the attorney and the client is 

fixed or contingent, the “undesirability” of the case, and awards in similar actions. 

LRCiv 54.2(c). 

EZconn submitted evidence regarding the foregoing factors that shows the amount 

of attorney fees requested is reasonable, which Andes and PCT do not dispute. Andes 

and PCT do not object to any specific time entries. In their opposition to EZconn’s fee 

request, Andes and PCT implies that an award of $6,006.00 related to EZconn’s defense 

of the appeal is unreasonable by stating, “In fact, the only filings by the appellees in that 

appeal were notices of appearance and the Ninth Circuit’s form mediation statement.” 

(Doc. 43 at 7.) The Court has reviewed each of EZconn’s time entries related to the 
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appeal and concludes that the amounts of time spent reviewing court rules, researching 

appellate jurisdiction issues, communicating with the client and opposing counsel, 

preparing a motion to dismiss the appeal for lack of jurisdiction, preparing for and 

attending a medication assessment conference, reviewing the motion to resolve 

jurisdiction filed by Andes and PCT, and reviewing the Ninth Circuit’s order of dismissal 

for lack of jurisdiction are reasonable. 

Therefore, EZconn Corporation will be awarded the amount of fees it requested 

except for $2,604.00 incurred for services related to a patent dispute between EZconn and 

PCT. 

IT IS THEREFORE ORDERED that EZconn Corporation’s Motion for an Award 

of Attorneys’ Fees (Doc. 42) is granted. 

IT IS FURTHER ORDERED directing the Clerk to enter judgment in favor of 

Defendant EZconn Corporation and against Plaintiffs Andes Industries, Inc., and PCT 

International, Inc., in the amount of $440,796.90 for attorney fees, plus post-judgment 

interest at the federal rate of 2.09% from the date of this judgment until paid. 

Dated this 5th day of April, 2018.