Ripa v. Federal National Mortgage Association et al

Filing 39

ORDER that Defendants' motion for attorneys' fees (Doc. 33 ) is granted. Defendants are awarded attorneys' fees and non-taxable expenses against Plaintiff in the amount of $16,686.80. Signed by Judge David G Campbell on 4/23/2014.(KMG)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Alan Ripa,

No. CV-13-01612-PHX-DGC
Plaintiff,

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v.

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ORDER

Federal National Mortgage Association, et
al.,

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Defendants.

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On October 21, 2013, the Court granted Defendants’ Motion to Dismiss under

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Federal Rules of Civil Procedure 8(a), 9(b), and 12(b)(6). Doc. 27. Defendants Wells

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Fargo Bank, N.A. and Federal National Mortgage Association have moved for an award

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of attorney’s fees pursuant to Rule 54(d)(2), seeking fees for claims against them arising

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out of contract under A.R.S. § 12-341.01(A). Doc. 33. The motion has been fully

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briefed. Docs. 36, 38. The Court will grant the motion.

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I.

Legal Standard.

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Under Arizona law, “[i]n any contested action arising out of a contract, express or

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implied, the court may award the successful party reasonable attorney fees.” A.R.S.

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§ 12-341.01(A). Under Arizona law, the trial court has discretion regarding awarding

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attorneys’ fees. See Wilcox v. Waldman, 744 P.2d 444, 450 (Ariz. Ct. App. 1987).

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Courts consider: (1) the merits of the unsuccessful party’s claim, (2) whether the

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successful party’s efforts were completely superfluous in achieving the ultimate result,

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(3) whether assessing fees against the unsuccessful party would cause extreme hardship,

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

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the legal question presented was novel or had been previously adjudicated, and

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(6) whether a fee award would discourage other parties with tenable claims from

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litigating. Velarde v. PACE Membership Warehouse, Inc., 105 F.3d 1313, 1319-20 (9th

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Cir. 1997); Associated Indem. Corp. v. Warner, 694 P.2d 1181, 1184 (Ariz. 1985) (en

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banc); Uyleman v. D.S. Rentco, 981 P.2d 1081, 1086 (Ariz. Ct. App. 1999). No single

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factor is determinative – the court should weigh all factors in exercising its discretion.

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See Wilcox, 744 P.2d at 450.

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II.

Analysis.

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A.

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Plaintiff contends that the “non-contract claims,” including the consumer fraud

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claims, statutory violation claims, negligent misrepresentation, and negligent supervision

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claims, are not tied to the contract. Doc. 36 at 3-4. Defendants respond that all of

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Plaintiff’s claims depend, explicitly or implicitly, on a contractual relationship between

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the parties because they all related to the Note and Deed of Trust. Doc. 38 at 4. Where a

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defendant allegedly breaches a duty that would not exist but for the contract, those claims

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are found to arise in contract. Doc. 34 at 2-3; see Assyia v. State Farm Mut. Auto. Ins.

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Co., 273 P.3d 668, 672-73 (Ariz. Ct. App. 2012). Plaintiff asserted two breach of

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contract claims in this case, and the Court finds that the remaining claims arose of out of

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contract. Therefore, the Court will individually consider the six factors outlined above.

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Appropriateness of Awarding Fees.

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Whether the Claims had Merit.

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The Court dismissed all fourteen of Plaintiff’s claims. Doc. 27. Plaintiff asserts

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that the claims should not have been dismissed, but he does not explain the reason for his

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assertion. Doc. 36 at 7. This factor favors Defendants.

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2.

Whether Defendants’ Efforts were Superfluous.

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Plaintiff contends that Defendants made no offer to resolve the matter. Id. at 3.

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Defendants respond argue that during the pendency of the motion to dismiss, they

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reached out to Plaintiff’s counsel regarding potential settlement options and Plaintiff

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never responded. Doc. 34 at 6; Exhibit D. Plaintiff has not shown that Defendants could

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have avoided this litigation. This factor favors Defendants.
3.

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Whether Imposition of Fees would be a Hardship for Plaintiff.

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Plaintiff does not contend that imposition of fees would be a hardship. “[T]he

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party asserting financial hardship has the burden of coming forward with prima facie

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evidence of financial hardship.” Woerth v. City of Flagstaff, 808 P.2d 297, 305 (Ariz. Ct.

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App. 1990). Plaintiff has failed to meet this burden. This factor favors Defendants.
4.

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Whether Defendant Succeeded with Respect to All Relief.

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The Court granted Defendants’ motion to dismiss (Doc. 27) and entered judgment

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in favor of Defendants (Doc. 30). Because Defendants prevailed on all claims, this factor

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favors Defendants.
5.

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Whether Legal Issues were Novel.

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Defendants contend that the legal issues were not novel and that many of the same

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issues in the complaint had been pled and rejected in this court. Doc. 34 at 7; see Raup v.

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Wells Fargo Bank, NA, No. CV-13-00137-PHX-GMS, 2013 WL 3216175 (D. Ariz. June

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25, 2013). Plaintiff does not contend that the legal issues were novel; he only notes that

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in Raup, the court did not dismiss all claims. Doc. 36 at 6. The Court agrees with

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Defendants that the legal issues were not novel. This factor favors Defendants.
6.

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Whether a Fee Award would Discourage Meritorious Litigation.

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Defendants contend that an award of attorneys’ fees would protect against

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“groundless, yet time-consuming suits.” Doc. 34 at 8. Defendants argue that Plaintiff’s

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counsel, who was also counsel for plaintiffs in Raup, was aware of the pleading

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deficiencies in the complaint but proceeded to pursue his claims. Id. at 7-8. Therefore,

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Defendants contend that an award of fees would enforce the principle that “a plaintiff

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should not proceed on meritless claims in contract actions.” Id. at 8. Plaintiff does not

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argue that a fee would discourage meritorious litigation. This factor favors Defendants.

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In sum, the Court finds that all six factors favor Defendants and that an award of
fees is appropriate.

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B.

Reasonableness of Requested Fees.

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Defendants request a total of $16,686.60 in fees.

Doc. 34 at 1-2.

Plaintiff

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contends that the only work completed in this matter involved the dismissal of the claims,

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and that “it is unconscionable” that “this amount should be charged for a case that went

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no further than a Rule 12 Motion.” Doc. 36 at 7. Local Rule 54.2(f) states that a

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memorandum in opposition to a motion for an award of attorney’s fees “shall identify

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with specificity all disputed issues of material fact and shall separately identify each and

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every disputed time entry or expense item.” LRCiv 54.2(f). Plaintiff has not specifically

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identified a single disputed expense.

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Defendants discuss the factors used to determine reasonable attorneys’ fees as

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outlined in Schweiger v. China Doll Rest., Inc., 673 P.2d 927, 931 (Ariz. Ct. App. 1983),

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including (1) the qualities of the advocate, (2) the character of the work, including its

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difficulty and importance, (3) the work actually performed, including the skill, time and

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attention given to the work, and (4) the result. Doc. 34 at 8. Defendants contend that the

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work performed was “necessary to respond and defend against claims in this action,” and

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the number of hours expended was reasonable because they were earned by performing

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services that “would have been undertaken by a reasonable and prudent lawyer to

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advance or protect his client’s interests.” Doc. 34 at 9. Defendants further contend that

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the average billing rate was equal to $174.86 per hour, which is similar to or lower than

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rates charged by other Phoenix law firms. Id. at 10. Defendants also note that their

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attorneys have a combined total of more than seven years of experience representing

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banks and other financial institutions, and the paralegal’s rates were justified because the

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paralegal “works regularly with members of the firm’s financial services litigation

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subgroup in a litigation support role.” Id. Plaintiff does not address any of these issues.

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The Court finds the hourly rates charged by Defendants’ legal team to be

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reasonable for the Phoenix market and for attorneys of the skill and experience needed

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for a case such as this. The Court also finds the time records provided by defense counsel

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to be sufficiently detailed, and the hours incurred in defending this case to be reasonable.

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Having considered the record as a whole and the relevant fee award factors, see Warner,

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694 P.2d at 1184, the Court finds the requested fee award to be reasonable and

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appropriate.

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reasonableness of a fee award).

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See also LRCiv 54.2(c)(3)(A)-(M) (listing factors bearing on the

IT IS ORDERED that Defendants’ motion for attorneys’ fees (Doc. 33) is

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granted.

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Plaintiff in the amount of $16,686.80.

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Defendants are awarded attorneys’ fees and non-taxable expenses against

Dated this 23rd day of April, 2014.

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