Creative Artists Agency LLC v. Rodriguez et al

MOTION for Attorney Fees

D. Ariz.November 16, 2017

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 SL 2569182.2 SHUMAKER LOOP & KENDRICK LLP Peter R. Silverman (Admitted Pro Hac Vice) 1000 Jackson Street Toledo, OH 43604-5573 Telephone: (419) 321-1307 Facsimile: (419) 241-6894 E-mail: psilverman@slk-law.com SPENCER FANE LLP Helen R. Holden (No. 013264) 2425 East Camelback Road, Suite 850 Phoenix, AZ 85016-4251 Telephone: (602) 333-5430 Facsimile: (602) 333-5431 E-mail: hholden@spencerfane.com Attorneys for Defendants Richard Rodriguez and Rita Rodriguez UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA Creative Artists Agency, LLC Plaintiff, v. Richard Rodriguez and Jane Doe Rodriguez, husband and wife, Defendants. No. 4:CV-17-00404-TUC-DCB DEFENDANTS’ MOTION FOR ATTORNEYS’ FEES Pursuant to Rule 54(d)(2), Fed. R. Civ. P. and LRCiv 54.2(b), Defendants Richard and Rita Rodriguez move for an award of attorneys’ fees incurred in defending against claims brought by Plaintiff Creative Artists Agency, LLC (“CAA”). See Rule 54(d)(2), Fed. R. Civ. P.; LRCiv 54.2(b). This Motion is based upon (1) the Memorandum of Points and Authorities incorporated below; (2) the Declarations of Peter Silverman and Helen Holden and supporting documentation submitted as exhibits A and B hereto; (3) the Statement of Consultation pursuant to LRCiv 54.2(d)(1) submitted as Exhibit C hereto; and (4) all other matters of record in this action. Case 4:17-cv-00404-DCB Document 14 Filed 11/16/17 Page 1 of 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 - 2 - SL 2569182.2 MEMORANDUM OF POINTS AND AUTHORITIES I. Background. On August 16, 2017 CAA sued the Rodriguezes in this Court, alleging breach of contract, breach of the duty of good faith and fair dealing, and unjust enrichment. Essentially, CAA alleged that the Rodriguezes failed to pay amounts owed to CAA under an oral contract for its agency representation of Rich Rodriguez. The Rodriguezes filed a motion to dismiss for lack of subject matter jurisdiction. Before filing the motion, defense counsel inquired with CAA’s counsel regarding the basis for diversity jurisdiction. CAA’s counsel did not provide a detailed response, stating only that there was complete diversity among the parties, but not providing the supporting detail. Then, rather than responding to the motion to dismiss or amending the complaint, CAA submitted a Notice of Voluntary Dismissal of its Complaint. The court ordered that this action be dismissed on November 2, 2017. Dkt. 13. II. The Rodriguezes Are Eligible To Recover Their Attorneys’ Fees and Expenses. Having fully prevailed in this action, the Rodriguezes are eligible to recover the attorneys’ fees they incurred. Eligibility for fees is based upon A.R.S. § 12-341.01(A), which provides: “[i]n any contested action arising out of a contract, express or implied, the court may award the successful party reasonable attorney fees.” It is well-settled that a litigant is entitled to fees as the prevailing party even when there is no ruling on the merits. As the Ninth Circuit explained in Med. Protective Co. v. Pang, 740 F.3d 1279, 1283 (9th Cir. 2013): Arizona appellate courts have repeatedly held that “[a]n adjudication on the merits is not a prerequisite to recovering attorney's fees under [Section 12–341.01].” Fulton Homes Corp. v. BBP Concrete, 214 Ariz. 566, 155 P.3d 1090, 1096 (Ariz. Ct. App. 2007); see also Britt v. Steffen, 220 Ariz. 265, 205 P.3d 357, 359 (Ariz. Ct. App. 2008) (holding defendant could be “successful” when complaint was dismissed without prejudice for failure to prosecute); Vicari v. Lake Havasu City, 222 Ariz. 218, 213 P.3d 367, 373–74 (Ariz. Ct. App. 2009) (approving award of attorney's fees where case terminated by voluntary dismissal). “[S]uccessful parties” are “not limited to those who have a favorable final Case 4:17-cv-00404-DCB Document 14 Filed 11/16/17 Page 2 of 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 - 3 - SL 2569182.2 judgment at the conclusion of the” action. Wagenseller v. Scottsdale Mem'l Hosp., 147 Ariz. 370, 710 P.2d 1025, 1048 (1985). Rather, a party may be successful without recovering “the full measure of the relief it requests,” Sanborn v. Brooker & Wake Prop. Mgmt., 178 Ariz. 425, 874 P.2d 982, 987 (Ariz.Ct.App.1994), and need not “prevail on the merits of the underlying claims” in order to be deemed a successful party under Section 12.341.01, Mark Lighting Fixture Co. v. Gen. Elec. Supply Co., 155 Ariz. 65, 745 P.2d 123, 128 (Ariz. Ct. App. 1986). Consistent with this general rule, the Arizona Court of Appeals has specifically held that that A.R.S. § 12-341.01(A) applies even when a plaintiff voluntary dismisses a complaint. Vicari v. Lake Havasu City, 222 Ariz. 218, 224-25, 213 P.3d 367, 373–74 (App. 2009). Vicari involved a suit by a sub-contractor against a municipality. Id. The municipality filed a motion to dismiss the complaint, and rather than contest the motion, the sub-contractor voluntarily dismissed the complaint. Id. The Court of Appeals held that the City was entitled to attorneys’ fees under A.R.S. § 12-341.01(A). Id. Similarly, CAA voluntarily dismissed its suit rather than respond to the Rodriguezes’ Motion to Dismiss. Even though there was no decision on the merits, the Rodriguezes were successful in defending against CAA’s contract action, and so are eligible for an award of fees under A.R.S. § 12-341.01(A). See Vicari, 222 Ariz. at 224-25, 213 P.3d at 373-74; see also Keystone Floor & More, LLC v. Ariz. Register of Contractors, 223 Ariz. 27, 30, 219 P.3d 237, 240 (App. 2009) (fees are appropriately awarded at the conclusion of an action, defined as “any matter or proceeding in a court” and citing A.R.S. § 1-215). III. The Rodriguezes Are Entitled To Recover Their Attorneys’ Fees and Expenses. Arizona law reflects a settled policy in favor of compensating the prevailing party in contract litigation for fees incurred in the course of litigation. Section 12-341.01 applies to “any contested action arising out of a contract.” A.R.S. § 12-341.01(A). This includes oral contracts. See, e.g., Rudinsky v. Harris, 231 Ariz. 95, 102, 290 P.3d 1218, 1225 (App. 2012). An award of fees rests within the sound discretion of this court. Associated Indemnity v. Warner, 143 Ariz. Case 4:17-cv-00404-DCB Document 14 Filed 11/16/17 Page 3 of 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 - 4 - SL 2569182.2 567, 570, 694 P.2d 1181, 1184 (1985). In Warner, the Arizona Supreme Court set forth six factors for determining whether an award of fees should be made. Id. Here, each of the factors favors a fee award: 1. The merits of the claim or defense presented by the unsuccessful party. See id. Here, CAA’s Complaint plainly lacked adequate allegations of federal jurisdiction, even though CAA chose the federal forum in the first instance. 2. Whether litigation could have been avoided or settled and whether the successful party’s efforts were completely superfluous in achieving the result. See id. Here, the parties have a significant disagreement on CAA’s underlying contract claims. Thus, litigation could not have been avoided, and Defendants’ efforts to obtain dismissal were not superfluous. 3. Whether assessing fees against the unsuccessful party would cause an extreme hardship. See id. Assessing the Rodriguezes’ modest fees against CAA would not cause an extreme hardship. CAA is an extremely large and successful agency and has ample resources to satisfy the fee award. 4. Whether the successful party prevailed with respect to all of the relief sought. See id. The Rodriguezes prevailed in obtaining dismissal of CAA’s entire action against them. 5. The novelty of the legal question presented, and whether such claim or defense had previously been adjudicated in this jurisdiction. See id. There were no novel issues presented. CAA brought straightforward claims for breach of contract and unjust enrichment. Moreover, the rules regarding diversity jurisdiction for LLCs – the issue raised in the Rodriguezes’ motion to dismiss – are well-established. 6. Whether the award . . . 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. See id. A fee award here would not discourage other parties from bringing legitimate claims. To the contrary, it would encourage parties to investigate and confirm federal jurisdiction before hauling defendants into federal court. Case 4:17-cv-00404-DCB Document 14 Filed 11/16/17 Page 4 of 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 - 5 - SL 2569182.2 Because all six Warner factors favor a fee award, this Court should award the Rodriguezes their reasonable attorneys’ fees. IV. The Rodriguezes’ Attorneys’ Fees Are Reasonable. The total amount sought by the Rodriguezes is $13,453 in attorneys’ fees. The attached Declarations of Peter Silverman and Helen Holden explain the basis on which these fees were incurred, and attach the detailed billing records that reflect those amounts. See Exhibits A and B. The two principal factors in assessing the reasonable of fees are the hourly rate charged and the amount of time incurred. See Schweiger v. China Doll Restaurant, Inc., 138 Ariz. 183, 187-89, 673 P.2d 927, 931-33 (1983). Other factors, including “the qualities of the advocate,” “the character of the work to be done,” “the work actually performed by the lawyer,” and “the result” obtained, are also relevant and may be considered by the Court. Id. at 931. Under Arizona law, in assessing the hourly rate charged “in corporate and commercial litigation between fee-paying clients” there is no need to determine the reasonable hourly rate prevailing in the community for similar work because the rate charged by the lawyer to the client is the best indication of what is reasonable under the circumstances of the particular case. Id. at 931-32 (emphasis added). Here, the rates charged here were agreed to by the Rodriguezes. Accordingly, such rates are presumptively reasonable. The hours worked are similarly reasonable. Under Arizona law, the prevailing party “is entitled to recover a reasonable attorney’s fee for every item of service which, at the time rendered, would have been undertaken by a reasonable and prudent lawyer to advance or protect his client’s interest.” Schweiger, 673 P.2d at 932 (citation omitted). Here, the Rodriguezes’ attorneys evaluated the complaint, prepared an answer and counterclaim, and prepared a motion to dismiss. Although the answer and counterclaim was not filed given CAA’s voluntary dismissal, it was a “reasonable and prudent” task to perform in the circumstances. Thus, the work Case 4:17-cv-00404-DCB Document 14 Filed 11/16/17 Page 5 of 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 - 6 - SL 2569182.2 performed by the Rodriguezes’ attorneys falls squarely within the applicable test: work that “would have been undertaken by a reasonable and prudent lawyer to advance or protect [the] client’s interest,” id.; the resulting hours billed are therefore reasonable, and recoverable, under Arizona law. CONCLUSION For the foregoing reasons, Defendants Richard and Rita Rodriguez respectfully request that the Court enter judgment for $13,453 in attorneys’ fees, in favor of Defendants and against Plaintiff. DATED this 16th day of November, 2017. SPENCER FANE LLP By s/ Helen R. Holden Helen R. Holden Attorneys for Defendants/Counterclaimant Richard Rodriguez and Defendant Rita Rodriguez Case 4:17-cv-00404-DCB Document 14 Filed 11/16/17 Page 6 of 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 - 7 - SL 2569182.2 CERTIFICATE OF SERVICE I hereby certify that on November 16, 2017, I electronically transmitted the attached document to the Clerk’s Office using the CM/ECF System for filing. s/ Terri Hartloff Case 4:17-cv-00404-DCB Document 14 Filed 11/16/17 Page 7 of 7