Stilwell v. Williams, City of et al

Filing 173

ORDER Defendants' motion 164 for an award of attorneys' fees and related costs is denied. Signed by Judge H Russel Holland on 4/25/2014.(KMG)

WO

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA

RONNIE D. STILWELL and COURTNEY
STILWELL,

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)
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Plaintiffs,
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vs.
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CITY OF WILLIAMS, et al.,
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Defendants.
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__________________________________________)

No. 3:12-cv-8053-HRH
[Prescott Division]

ORDER
Motion for Award of Attorneys’ Fees and Related Costs
Defendants move for an award of attorneys’ fees and related costs.1 This motion is
opposed.2 Oral argument has not been requested and is not deemed necessary.

1

Docket No. 164.

2

Docket No. 169. Plaintiffs’ opposition does not comply with Local Rule 7.1(b)
because the font is too small and it does not comply with Local Rule 7.2(e)(1) because it is
over length. The court has nonetheless in its discretion considered plaintiffs’ opposition.

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Background
Plaintiffs are Ronnie D. and Courtney Stilwell. Defendants are the City of Williams;
Joseph and Lyda Duffy; Raymond Glenn and Elsie Cornwell; Billy and Bessie Pruett; and
Kathy and Tracy Fuller.
Mr. Stilwell was employed as the City’s Water Superintendent until he was
terminated on January 5, 2011. In their amended complaint,3 plaintiffs asserted the
following claims: 1) an ADEA retaliation claim against the City, Duffy, and Cornwell; 2)
an equal protection § 1983 claim against all defendants; 3) a First Amendment § 1983
retaliation claim against all defendants; 4) a 14th Amendment due process § 1983 claim
against all defendants; 5) a common law wrongful discharge claim against the City, Duffy,
and Cornwell; 6) a wrongful discharge claim under A.R.S. § 23-1501(3)(d) against the City,
Duffy, and Cornwell; 7) a breach of contract claim against the City; 8) a breach of the
implied covenant of good faith and fair dealing claim against the City; 9) an intentional
interference with contract claim against Duffy and Cornwell; 10) an intentional infliction
of emotional distress claim against all defendants; 11) a negligent infliction of emotional
distress claim against all defendants; 12) a slander and/or libel claim against the City and
Duffy; 13) a slander and/or libel claim against the City, Duffy, and Cornwell based on
alleged statements made to Mr. Stilwell’s prospective employers; 14) a slander claim

3

Docket No. 18.
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against Fuller; 15) a libel claim against all defendants; and 16) a false light invasion of
privacy claim against all defendants.
Plaintiffs moved for summary judgment on their due process § 1983 claim, their
A.R.S. § 23-1501(3)(d) wrongful discharge claim, their breach of the implied covenant of
good faith and fair dealing claim, and their intentional interference with contract claim
against Duffy. Defendants cross-moved for summary judgment on all of plaintiffs’ claims.
During the pendency of the cross-motions for summary judgment, plaintiffs withdrew their
second, twelfth, and thirteen claims for relief.4
On March 5, 2014, the court granted summary judgment to defendants5 and the
judgment dismissing plaintiffs’ amended complaint was entered the same day.6
Pursuant to Local Rule 54.2, defendants now move for an award of attorneys’ fees
and related costs.7 Defendants seek $147,263.25 in fees and $9,318.79 in costs.8
4

Plaintiffs’ Response to Defendants’ Motion[s] for Partial Summary Judgment [etc.]
at 36 & 56, Docket No. 152.
5

Docket No. 162.

6

Docket No. 163.

7

Defendants’ motion was timely filed but defense counsel’s statement of consultation
does not reflect a good faith effort to resolve the attorneys’ fees issue prior to the instant
motion being filed. The court has nonetheless in its discretion considered the instant
motion.
8

Attached as Exhibit E to the instant motion is a document entitled “Defendants’
Statement of Costs and Notice of Taxation of Costs.” Although the costs outlined in this
(continued...)
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Discussion
There is no dispute that defendants are the prevailing parties in this matter. The
issue here is whether as the prevailing parties, defendants are entitled to an award of some
or all of their attorneys’ fees and related costs.
Defendants first argue that they are entitled to attorneys’ fees for their defense of
plaintiffs’ ADEA retaliation claim. “The ADEA does not expressly provide for the award
of attorney's fees. Instead, the ADEA incorporates the remedial provisions of the Fair
Labor Standards Act....” Richardson v. Alaska Airlines, Inc., 750 F.2d 763, 765 (9th Cir.
1984). “The FLSA’s fee-shifting provision refers only to a prevailing plaintiff and says
nothing of a prevailing defendant.” Mach v. Will County Sheriff, 580 F.3d 495, 501 (7th Cir.
2009) (internal citation omitted). But, “the ADEA’s remedial scheme does not preclude
application of the common law rule that a prevailing defendant may obtain attorneys’ fees
if the plaintiff litigated in bad faith.” Id. “A finding of bad faith is warranted where an
attorney ‘knowingly or recklessly raises a frivolous argument, or argues a meritorious
claim for the purpose of harassing an opponent.’” Primus Automotive Financial Services,
Inc. v. Batarse, 115 F.3d 644, 649 (9th Cir. 1997) (quoting In re Keegan, 78 F.3d 431, 436 (9th

8

(...continued)
document are the kind usually treated as taxable costs, defendants request that the court
treat these costs as “related costs”, rather than taxable costs. See Defendants’ Reply [etc.]
at 2, Docket No. 172.

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Cir. 1996)). “A party also demonstrates bad faith by ‘delaying or disrupting the litigation
or hampering enforcement of a court order.’” Id. (quoting Hutto v. Finney, 437 U.S. 678,
689 n.14 (1978)). “An award of attorneys’ fees for bad faith ‘is punitive and the penalty can
be imposed only in exceptional cases and for dominating reasons of justice.’” Dogherra v.
Safeway Stores, Inc., 679 F.2d 1293, 1298 (9th Cir. 1982) (quoting United States v. Standard
Oil Co., 603 F.2d 100, 103 (9th Cir. 1979)).
Plaintiffs’ ADEA retaliation claim against the City was not frivolous or pursued to
harass defendants or delay this litigation. Although the court found that plaintiffs could
not establish causation as to this claim, plaintiffs’ argument that Mr. Stilwell’s termination
was the end result of a 15-month campaign of harassment by defendant Duffy was not
frivolous. And although plaintiffs’ ADEA retaliation claim against Duffy and Cornwell
failed as a matter of law, the fact that plaintiffs pursued this claim did not delay the
litigation and required little, if any, additional work for defense counsel. Because plaintiffs’
did not litigate their ADEA retaliation claim in bad faith, defendants are not entitled to
attorneys’ fees and related costs for their defense of this claim.
Defendants next argue that they are entitled to attorneys’ fees for their defense of
plaintiffs’ § 1983 claims (claims 2, 3, and 4). Pursuant to 42 U.S.C. § 1988(b), “a prevailing
defendant” in a § 1983 case “may only recover fees in ‘exceptional circumstances’ where
the court finds that the plaintiff's claims are ‘frivolous, unreasonable, or groundless.’”

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Braunstein v. Ariz. Dep’t of Transp., 683 F.3d 1177, 1187 (9th Cir. 2012) (quoting Harris v.
Maricopa Cnty. Superior Court, 631 F.3d 963, 971 (9th Cir. 2011)).
Defendants argue that plaintiffs’ § 1983 equal protection and free speech claims were
frivolous because they were foreclosed by Ahlmeyer v. Nevada System of Higher
Education, 555 F.3d 1051 (9th Cir. 2009). Defendants also argue that it is clear that plaintiffs
realized that the § 1983 equal protection claim was frivolous since they withdrew it after
defendants filed their motion for summary judgment on this claim. As for plaintiffs’ § 1983
due process claim, defendants argue that this claim was frivolous because the evidence
clearly showed that Mr. Stilwell was an at-will employee who could be terminated without
cause.
Plaintiffs’ § 1983 equal protection and free speech claims were not frivolous.
Plaintiffs made a plausible argument supported by legal authority that Ahlmeyer did not
apply. That the court found defendants’ argument more persuasive does not make these
claims frivolous nor does the fact that plaintiffs ultimately chose to withdraw their § 1983
equal protection claim.

Plaintiffs’ withdrawal came early enough in the summary

judgment process to save both the court and defendants time. Plaintiff’s § 1983 due process
claim was also not frivolous. Plaintiffs had a plausible argument that Stilwell’s at-will
employment status had been modified by the City’s Employee Manual and the parties’
mutual understanding that he was entitled to the disciplinary procedures that applied to

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employees who could only be terminated for cause. Because plaintiffs’ § 1983 claims were
not frivolous, unreasonable, or groundless, defendants are not entitled to attorneys’ fees
and related costs for their defense of these claims.9
Defendants next argue that they are entitled to attorneys’ fees for their defense of
plaintiffs’ contract claims (claims 7 and 8).10 The court, in its discretion, may award a
prevailing party reasonable attorneys’ fees “[i]n any contested action arising out of a
contract[.]” A.R.S. § 12–341.01(A).
The court declines to award defendants attorneys’ fees for their defense of claims
7 and 8 “[b]ecause there is nothing in the record to suggest what portion of the fees is
related to” the claims arising out of contract “as distinguished from” plaintiffs’ other
claims. Circle K Corp. v. Rosenthal, 574 P.2d 856, 862 (Ariz. Ct. App. 1977); see also, Marsh
v. Digital Equipment Corp., 699 F. Supp. 1411, 1412-13 (D. Ariz. 1988) (denying the
defendant’s application for fees under A.R.S. § 12-341.01(A) because the parties had not

9

Because defendants have not shown that they are entitled to attorneys’ fees
pursuant to 42 U.S.C. § 1988(b), they are also not entitled to attorneys’ fees or sanctions
pursuant to 28 U.S.C. § 1927 and Rule 11, Federal Rules of Civil Procedure.
10

Defendants contend that plaintiffs’ claim 9 for intentional interference with contract
is a claim “arising out of contract” but “[t]he duty not to interfere with the contract of
another arises out of law, not contract” and thus this claim is treated as a tort claim for
purposes of the instant motion. Bar J Bar Cattle Co. v. Pace, 763 P.2d 545, 550 (Ariz. Ct.
App. 1988).
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“treated the discrimination and contract claims as discrete issues and had [not] kept
separate time records relating to each issue”).
Defendants next argue that they are entitled to attorneys’ fees for their defense of
plaintiffs’ state law tort claims (claims 5-6 and 9-16) pursuant to A.R.S. § 12-349(A). Section
12-349(A) provides, in pertinent part, that
the court shall assess reasonable attorney fees, expenses and,
at the court’s discretion, double damages of not to exceed five
thousand dollars against an attorney or party, including this
state and political subdivisions of this state, if the attorney or
party does any of the following:
1. Brings or defends a claim without substantial justification.
2. Brings or defends a claim solely or primarily for delay or
harassment.
3. Unreasonably expands or delays the proceeding.
4. Engages in abuse of discovery.
“‘[W]ithout substantial justification’ means that the claim or defense is groundless and is
not made in good faith.” A.R.S. § 12-349(F).
The Ninth Circuit has held that this state law statute, which the court of appeals
characterized as a “sanctions statute” does not apply to actions in federal court, even if the
court is sitting in diversity. In re Larry's Apartment, L.L.C., 249 F.3d 832, 837-840 (9th Cir.
2001). But even if A.R.S. § 12-349(A) applied here, the court would decline to award
defendants attorneys’ fees because plaintiffs’ state law tort claims, albeit weak, were not
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groundless or made in bad faith nor did they unreasonably expand the litigation. Plaintiffs
had plausible factual and legal arguments as to each of these claims, even though they did
not ultimately prevail on any of these claims. And, these claims did not unreasonably
expand the litigation, although they involved some discovery that was not directly related
to plaintiffs’ other claims. Thus, defendants are not entitled to attorneys’ fees and related
costs for their defense of plaintiffs’ state law tort claims.
Conclusion
Defendants’ motion for an award of attorneys’ fees and related costs11 is denied.
DATED at Anchorage, Alaska, this 25th day of April, 2014.
/s/ H. Russel Holland
United States District Judge

11

Docket No. 164.
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