Source: https://docs.justia.com/cases/federal/district-courts/arizona/azdce/2:2012cv01176/705612/25
Timestamp: 2016-10-24 14:49:01
Document Index: 122749813

Matched Legal Cases: ['§ 12', '§ 12', '§ 12', '§ 12', '§ 12', '§ 12', '§ 12']

ORDER granting Precision's 18 Motion for Attorney Fees and awarding fees in the amount of $4,282 for Sandstone Marketing Incorporated v. Precision Converters Incorporated et al :: Justia Dockets & Filings Log In
ORDER granting Precision's 18 Motion for Attorney Fees and awarding fees in the amount of $4,282.00. ORDERED granting Peter Kohm and Agrifabrics LLC's 19 Motion for Attorney Fees and awarding fees in the amount of $3,912.00. Signed by Judge Frederick J Martone on 12/12/2012.(LFIG)
Precision Converters, Inc.; Peter Kohm;)
Agrifabrics LLC,
Sandstone Marketing, Inc.,
No. CV 12-01176-PHX-FJM
Plaintiff filed this action asserting products liability and breach of contract claims.
On September 13, 2012 we dismissed the action without prejudice (doc. 16). We now have
before us defendant Precision Converters Inc.'s ("Precision") motion for attorneys' fees (doc.
18), plaintiff's response (doc. 22), Precision's reply (doc. 24), defendants Peter Kohm and
Agrifabrics LLC's motion for attorneys' fees (doc. 19), plaintiff's response (doc. 21), and
Kohm and Agrifabrics LLC's reply (doc. 23). Because these motions raise nearly identical
issues, we consider them together.
Defendants move for attorneys' fees as the prevailing parties in a matter arising out
of a contract, pursuant to A.R.S. § 12-341.01.1 Plaintiff argues that under choice of law
In addition, Peter Kohm and Agrifabrics LLC move for attorneys' fees based on the
contract between plaintiff and Precision (dba Agrifabric). The attorneys' fees provision in the
contract applies to actions initiated by Precision. Because plaintiff, not Precision, initiated
principles South Carolina law governs the award of attorneys' fees. In a diversity case, such
as the one here, the availability of attorneys' fees is governed by the statutory law of the state
in which the action was brought. See Diamond v. John Martin Co., 753 F.2d 1465, 1467 (9th
Cir. 1985). Here, plaintiff filed this action in Arizona. Therefore, A.R.S. § 12-341.01
A.R.S. § 12-341.01 authorizes a court to award reasonable attorneys' fees to the
"successful party" in a contested action arising out of contract. Plaintiff argues that the
contract in this action is not disputed, and that defendants are not "successful" parties within
the meaning of the statute. A "contested action is one in which the defendant has appeared
and generally defends against the claims and demands made by the plaintiff." Morrison v.
Shanwick Intern. Corp., 167 Ariz. 39, 46, 804 P.2d 768, 776 (Ct. App.1990). A defendant
against whom a contract action is dismissed without prejudice is considered a "successful
party." Britt v. Steffen, 220 Ariz. 265, 267, 205 P.3d 357, 359 (Ct. App. 2008). Here,
defendants filed a motion to dismiss plaintiff's claims, thereby making this a contested action.
We found that plaintiff's claims against defendants are subject to arbitration, and dismissed
the contested action without prejudice. Therefore, defendants are "successful" parties within
the meaning of § 12-341.01.
A court has wide discretion in deciding whether to award fees under § 12-341.01. The
award of fees “should be made to mitigate the burden of the expense of litigation to establish
a just claim or a just defense.” A.R.S. § 12-341.01(B). “It need not equal or relate to the
attorney fees actually paid or contracted.” Id. In deciding whether to award fees under § 12-
341.01, we consider factors such as (1) whether the unsuccessful party's claims were
meritorious; (2) whether the litigation could have been avoided or settled; (3) whether
assessing fees would cause extreme hardship; (4) whether the successful party prevailed with
respect to all relief sought; (5) whether the legal question was novel; and (6) whether an
this action, we find Peter Kohm and Agrifabrics LLC are not entitled to attorneys' fees under
award would discourage other parties with tenable claims from litigating them. Associated
Indem. Corp. v. Warner, 143 Ariz. 567, 570, 694 P.2d 1181, 1184 (1985).
After considering each of the Warner factors, we conclude that an award of fees in this
case is appropriate. Plaintiffs’ contentions with respect to arbitration were not entirely
meritorious. Plaintiff did not dispute defendants' argument that the claims against Precision
are subject to arbitration. Instead, plaintiff argued that we could not dismiss the breach of
contract claim because it was also asserted against Peter Kohm and Agrifabrics LLC, non-
signatories to the contract. But Kohm was Precision's agent and Agrifabrics was a division
of Precision. Plaintiff could have avoided the action by submitting the matter to arbitration
pursuant to the arbitration clause in the contract. The question of whether the arbitration
provision in the contract is enforceable is not novel. Defendants prevailed, and an award of
fees would not discourage other parties from filing meritorious actions. Indeed, an award of
attorneys' fees might discourage parties from ignoring arbitration provisions. Plaintiff has
not argued that an assessment of fees would result in extreme hardship. All of these factors
favor an award of fees.
We now turn to the reasonableness of the requested fees. Precision seeks $4,282.00
in fees. Precision’s insurance company, Cincinnati Insurance Company, employed two
attorneys with hourly rates of $165 and $140 an hour, to represent the interests of its insured.
These rates are within the range of prevailing rates in Phoenix. Moreover, the attorneys
expended a reasonable amount of time–a total of 28.3 hours–in defending Precision's right
to arbitrate this matter. Peter Kohm and Agrifabrics LLC seek $3,912.00 in fees. Peter
Kohm and Agrifabrics LLC retained one attorney with an hourly rate of $195, which is
within the range of prevailing rates in Phoenix. The attorney expended a total of 18.40 hours
on implementing a joint legal strategy with Precision. Plaintiff argues that certain time
entries in defendants' counsel's billing statement are improperly block-billed. We disagree.
Counsel properly billed for various tasks, and the time spent on each task is reasonable.
IT IS ORDERED GRANTING Precision's motion for an award of attorneys’ fees
(doc. 18), and awarding fees in the amount of $4,282.00.
IT IS ORDERED GRANTING Peter Kohm and Agrifabrics LLC motion for an
award of attorneys’ fees (doc. 19), and awarding fees in the amount of $3,912.00.
Of course, nothing we say here in any way affects the merits of the underlying claims
against defendants. The arbitrator will resolve those claims. Our fee award relates only to
the choice of forum. If plaintiff prevails on its underlying contract claim, it may seek an
award of fees against defendants.