Opinion ID: 534410
Heading Depth: 1
Heading Rank: 6

Heading: Ravi and Sood's Cross-Appeal

Text: 71 Appellees Ravi and Sood cross-appeal the district court's denial of their request for attorney fees made under state and federal statutes. The factual basis for a fee award is subject to the clearly erroneous standard of review. Rosebrough Monument Co. v. Memorial Park Cemetery Ass'n, 736 F.2d 441, 446 (8th Cir.), cert. denied, 469 U.S. 981, 83 L.Ed.2d 320, 105 S.Ct. 385 (1984). Discretionary fee awards are reversible only for abuse of discretion, Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 69 (9th Cir.1975), cert. denied, 425 U.S. 951, 48 L.Ed.2d 195, 96 S.Ct. 1726 (1976), but the appellate court reviews the legal standard de novo. Rawlings v. Heckler, 725 F.2d 1192, 1194 (9th Cir.1984). 72 Plaintiff initially argues that the district court should not have considered the fee request, since it was untimely filed.
73 The district court dismissed all claims against Ravi and Sood by order of November 26, 1986. Judgment was entered December 22, 1986. Ravi and Sood filed the fee application on March 31, 1987, so the fee application came about 100 days after entry of judgment. The district court did not address the timeliness question, even though plaintiff raised the argument below. It simply went on to the merits of the application. 74 Although there is no specific time limit for application for fees, this Court has held that the district court should deny the application if the delay is unreasonable. Masalosalo v. Stonewall Ins. Co., 718 F.2d 955, 957 (9th Cir.1983). In Masalosalo, we affirmed the district court's finding that a 100 day delay from entry of final judgment was not unreasonable. Furthermore, in Metcalf v. Borba, 681 F.2d 1183 (9th Cir.1982), we suggested that a strong consideration is whether the delayed application unfairly surprise[d] or prejudice[d] the affected party. Id. at 1187 (quoting White v. New Hampshire Dept. of Employment Security, 455 U.S. 445, 71 L.Ed.2d 325, 102 S.Ct. 1162 (1982)). Plaintiff does not contend that he was surprised or prejudiced. 75 The district court's apparent conclusion that the application was timely was not clearly erroneous.
76 Ravi and Sood in part base their fee application on Ariz.Rev.Stat.Ann. § 12-341.01(A), which provides in relevant part: 77 In any contested action arising out of a contract, express or implied, the court may award the successful party reasonable attorney's fees.... 78 Arizona courts have interpreted the statute to allow fees for extracontractual claims which are intrinsically related to a contract, or which could not exist but for a breach of the contract. Marcus v. Fox, 150 Ariz. 333, 723 P.2d 682, 684 (1986). 79 In Associated Indemnity Corp. v. Warner, 143 Ariz. 567, 694 P.2d 1181, 1184 (1985), the Arizona Supreme Court listed the following factors to consider with respect to a § 12-341.01(A) fee award: 80 1. The merits of the claim or defense presented by the unsuccessful party. 81 2. The litigation could have been avoided or settled and the successful party's efforts were completely superfluous in achieving the result. 82
83 4. The successful party did not prevail with respect to all of the relief sought. 84 Courts should also consider whether the award in any particular case would discourage other parties with tenable claims or defenses from litigating or defending legitimate contract issues for fear of incurring liability for substantial amounts of attorney's fees. Id. 85 The district court declined to award fees on the grounds that the claims were not totally devoid of merit, defendant was relatively better able to absorb the fees, and for fear that a $72,000 fee award would discourage meritorious wrongful discharge claims. The district court was persuaded by the fact that defendants were insured, and were therefore much better equipped to bear the expense. 86 Ravi and Sood contend that the district court erred in giving weight to the relative wealth of the parties. Since the Arizona Supreme Court has adopted the collateral source rule, they argue, the district court may not deny a request for fees on the ground that the party requesting fees is represented by an insurer. See Michael v. Cole, 122 Ariz. 450, 595 P.2d 995, 997 (1979). However, in Catalina Foothills Ass'n v. White, 132 Ariz. 427, 646 P.2d 312, 313 (Ct.App.1982), the court addressed the specific issue at hand, and stated that: 87 We do not hold that the trial court cannot properly consider such fact, i.e., that someone else may be obligated to bear the expense, but we find the weight to be accorded that fact to be wholly within the trial court's discretion. 88 The trial court's decision is upheld as not an abuse of its discretion. 89 Ravi and Sood next argue that the district court should have examined the merits of each individual claim, as opposed to concluding merely that plaintiff's action was not devoid of merit as a whole. However, the merits of the particular claim or defense is just one factor to consider in deciding whether to award discretionary fees. The district court need not engage in the weighing process for each and every claim and defense asserted in an action. 3. Fees for Frivolous Suit 90 Defendants also base their fee application on 42 U.S.C. § 1988, and Ariz.Rev.Stat.Ann. § 12-341-02(C), both of which allow fee awards for defending frivolous claims. 42 U.S.C. § 1988 provides that the district court may, in its discretion, award fees to the prevailing party in a civil rights case. The Court has held that fees may be awarded under this section against a plaintiff where the suit was vexatious, frivolous, or brought to harass or embarrass the defendant. Hensley v. Eckerhart, 461 U.S. 424, 429 n. 2 (1983). Ariz.Rev.Stat.Ann. § 12-341-01(C) allows a fee recovery upon clear and convincing evidence that the claim ... constitutes harassment, is groundless and not made in good faith.... 91 The district court denied the application on the ground that defendant had not presented sufficient grounds for a finding that the claims were frivolous, groundless, or not made in good faith. 92 This order is reviewable under the clearly erroneous standard. See Rosebrough Monument Co., 736 F.2d at 446. The denial of fees was not clearly erroneous.