Mundinger v. Wells Fargo Bank NA et al

Filing 35

ORDER granting 24 Defendants' Motion for Attorney Fees and awarding defendants $1,500 in fees. Signed by Judge Frederick J Martone on 8/11/11.(DMT)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Amy Y. Mundinger, Aaron Mundinger, )
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Plaintiffs,
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vs.
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Wells Fargo Bank, et al.,
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Defendants.
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No. CV-10-2774-PHX-FJM
ORDER

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The court has before it defendants’ motion for attorney’s fees (doc. 24) and

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memorandum in support (doc. 30), plaintiffs’ response (doc. 33), and defendants’ reply (doc.

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34).

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On April 25, 2011, we granted defendants’ motion to dismiss and dismissed the first

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amended complaint with prejudice. Defendants’ now seek an award of attorney’s fees in the

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amount of $18,411.40, pursuant to A.R.S. § 12-341.01(A), which authorizes a court to award

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reasonable attorney’s fees to the “successful party” in a contested action arising out of

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contract.

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We agree with defendants that this action “arose out of a contract,” and therefore falls

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within A.R.S. § 12-341.01. An action need not involve a breach of contract claim in order

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to be eligible for fees under § 12-341.01. Instead, a prevailing party is eligible for fees if the

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action involves the “rights, obligations, validity, enforceability and priority of rights arising

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out of contract.” Deutsche Credit Corp. v. Case Power & Equip. Co., 179 Ariz. 155, 164,

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876 P.2d 1190, 1199 (Ct. App. 1994). Plaintiffs filed claims based upon their belief that the

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promissory note was modified, and challenging defendants’ authority under the deed of trust

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to notice and conduct a trustee’s sale. Underlying each of these claims are the rights and

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obligations of the parties under the promissory note and the deed of trust. As such, these

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claims have “arisen out of contract” for purposes of § 12-341.01.

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A court has wide discretion is deciding whether to award fees under § 12-341.01. The

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award of fees “should be made to mitigate the burden of the expense of litigation to establish

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a just claim or a just defense.” Id. § 12-341.01(B). “It need not equal or relate to the

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attorney fees actually paid or contracted.” Id. In deciding whether to award fees we consider

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factors such as (1) whether the unsuccessful party's claims were meritorious; (2) whether the

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litigation could have been avoided or settled; (3) whether assessing fees would cause extreme

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hardship; (4) whether the successful party prevailed with respect to all relief sought; (5)

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whether the legal question was novel; and (6) whether an award would discourage other

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parties with tenable claims from litigating them. Associated Indem. Corp. v. Warner, 143

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Ariz. 567, 570, 694 P.2d 1181, 1184 (1985).

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After considering each of the Warner factors, we conclude that an award of fees in this

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case is appropriate.

Plaintiffs’ claims, though perhaps colorable, were not entirely

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meritorious. Given the parties’ diverse positions, settlement was not possible. The legal

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questions presented, involving Arizona’s deed of trust statute, and issues of unjust

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enrichment and promissory estoppel, were not novel. Defendants prevailed on every claim

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and an award of fees would not discourage other parties from filing meritorious actions.

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Given that plaintiffs defaulted on their mortgage loan, it is reasonable to presume that a

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hardship is likely. This factor alone weighs in plaintiffs’ favor.

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Defendants request $18,411.40 in fees, in this simple matter that was resolved on a

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motion to dismiss. Defendants employed two lawyers, with hourly rates ranging from $400

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to $225 an hour—with those fees in the higher range exceeding prevailing Phoenix rates for

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this type of case. They expended 17.5 hours on their second motion to dismiss and 23.5
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hours on their reply, and a total of more than 59 hours defending against claims that they

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themselves described as “routinely dismissed” by courts in this District and elsewhere (doc.

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6 at 1). We think 15 hours at $250.00 per hour would be sufficient to get a non-meritorious

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and routine complaint dismissed. We then discount that by plaintiffs’ presumed hardship to

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yield $1,500.00

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Therefore, IT IS ORDERED GRANTING defendants’ motion for an award of
attorney’s fees (doc. 24), and awarding defendants $1,500 in fees.
DATED this 11th day of August, 2011.

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