The American Rule controls assessment of attorney fees arising out of litigation. Under this rule, each party is responsible for paying its own attorney fees, unless specific authority granted by statute or contract allows the assessment of those fees against the other party. The American Rule contrasts with the English Rule, under which the losing party pays the prevailing party’s attorney fees. The American Rule is premised on a belief that people should not be discouraged from seeking redress for perceived wrongs in court, or from trying to extend coverage of the law. Arguably, society would suffer if a person is unwilling to pursue a meritorious claim merely because he or she would have to pay defendant’s expenses upon a loss.
But, what is the tri-pellate lawyer to do after an opposing and prevailing party in an Arizona state court case applies for attorney fees as authorized? What are the proper objections to make in such matters to convince the court to not award any fees or, alternatively, to award much less that the amount sought? Below is a brief primer on that topic.
The tri-pellate attorney should, initially, detail the reasons why the court, at its discretion, should deny fees to a technically eligible applicant. Courts look to the accomplishments made in the case as to whether or not to award a prevailing party all or something less than the fees sought. See, e.g., Charles v. Nat’l Tea Co., 488 F.Supp. 270 (W.D. La. 1980) (awarding less than half of the attorney fees sought where plaintiff obtained only relief in form of injunction against future acts of discrimination by defendant); Noble v. Herrington, 732 F.Supp. 114 (D.Colo. 1989) (awarding 80% less than claimed fee to account for plaintiff’s limited success). When a case involves several claims based on different facts or legal theories, a court may decline to award fees for the unsuccessful separate and distinct claims. Berry v. 352 E. Virginia, L.L.C., 228 Ariz. 9, ¶23 (App. 2011).
Courts also consider plaintiff’s rejection of a settlement offer in making their discretionary inquiry into a successful party’s entitlement to attorney fees. Sheppard v. Riverview Nursing Ctr., 88 F.3d 1332 (4th Cir. 1996). This latter consideration is, undoubtedly, because “public policy wisely encourages settlements.” McDermott, Inc. v. Amclydey, 511 U.S. 202, 215 (1994). Therefore, a party opposing a fee request may bring to the court’s attention unreasonable conduct of the adversary that increased litigation costs or prevented the expeditious resolution of the dispute, in other words, action that “ignited litigation flames that scorched the earth” SWC Baseline & Crimson Investors, L.L.C. v. Augusta Ranch, Ltd. Partnership, 228 Ariz. 271, ¶57 (App. 2011). Thus, courts should be told that the adversary (or her attorney) rejected reasonable and fair settlement offers, abused discovery proceedings, or escalated, unreasonably protracted, or complicated the case. See, e.g. First Interstate Bank or Ariz. v. Simon, 159 Ariz. 91, 92 (App. 1988).
“Arizona law requires a party seeking attorney’s fees to do more than dump a mound of paperwork on the court with a “ here, you figure it out attitude.” City of Prescott v. Town of Chino Valley, 163 Ariz. 608 (App. 1989), aff’d in part, vacated in part, 166 Ariz. 480 (1990). Instead, applications for attorney fees must meet certain requirements. Schweiger v. China Doll Rest., 138 Ariz. 183, 189 (App. 1983). An application for attorney fees must include the hourly rate, the dates on which the services were provided, the names of the persons who performed the services, a description of the services that were rendered, and the number of hours spend performing each one. Barth v. Cochise Cnty., 213 Ariz. 59 (App. 2006) Vague general time entries have been roundly criticized by Arizona courts.
Any contractual provision authorizing attorney fees should be cited in the fee application and, if appropriate, attached to the fee application. First Fed. Sav. & Loan Ass’n v. Ram, 135 Ariz. 178, 181 (App. 1982). In cases where fees are not paid on an hourly basis, the “prevailing market rate” is the appropriate measure for an award of reasonable attorney fees. State ex rel Corbin v. Tocco, 173 Ariz. 587, 591 (App. 1992). Therefore, an affidavit on that topic should be included in the fee application.
Time entries should be in sufficient detail to assist the court in assessing and evaluating the reasonableness of the work performed and time expended. China Doll, above, 138 Ariz. at 188. Clerical or administrative time should be objected to as unnecessary for an attorney to perform. Time records should be contemporaneously kept. Geller v. Lesk, 230 Ariz. 624, ¶17 (App. 2012). The fee application should demonstrate a thoughtful and deliberate review of client billings to expunge excessive or duplicate time. Fuddruckers, Inc. v. Doc’s B.R. Others, Inc., 623 F.Supp. 21, 24 (D. Ariz. 1985). In other words, a fee application should “be a plain, complete-in-itself statement demonstrably confined to the matter for which fees are recoverable.” City of Prescott v. Town of Chino Valley, above. Fee applications should not simply consist of a rehash of client billings or a summary of all expended time. Id., citing Hensley, above, 461 U.S. at 434. The fee claimant should bring to the court’s attention deleted categories of time, tasks, services or other adjustments that have been made in order to exercise “billing judgment.” Block billing is also inappropriate. Lyon v. Chase Bank USA, N.A., 656 F.3d 877, 892 (9th Cir. 2011).
The tri-pellate lawyers needs to know the relevant factors for and technical requirements of an attorney fee applications. That knowledge will allow this attorney to properly analyze such filings in order to avoid or significantly whittle away at an attorney fee award. This obviously provides a benefit to the client and simultaneously preserves the record to potentially challenge an attorney fee award on appeal.
This article is intended for litigators to consider issues from both a “trial” lawyer and “appellate” lawyer perspective, and not just one or the other. Hence, a “tri-pellate” lawyer perspective is encouraged.
If you have any questions, please email me at gcohen@mcrazlaw.com.
