Klein v. Loyden ( 2019 )

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
BRIAN KLEIN, et al., Plaintiffs/Appellants,
v.
TREG D. LOYDEN, et al., Defendants/Appellees.
No. 1 CA-CV 19-0253
FILED 12-17-2019
Appeal from the Superior Court in Maricopa County
No. CV2017-053170
The Honorable Theodore Campagnolo, Judge
AFFIRMED
COUNSEL
Jennifer Sodaro, Scottsdale
Counsel for Plaintiffs/Appellants
Treg Loyden, Chandler
Defendant/Appellee
Jaburg & Wilk, PC, Phoenix
By Douglas O. Guffey
Counsel for Defendant/Appellee
KLEIN, et al. v. LOYDEN, et al.
Decision of the Court
MEMORANDUM DECISION
Judge Jennifer M. Perkins delivered the decision of the Court, in which
Presiding Judge Samuel A. Thumma and Judge Paul J. McMurdie joined.
P E R K I N S, Judge:
¶1 Appellants (plaintiffs in the trial court) contend that the trial
court awarded them an insufficient amount of attorney’s fees after a bench
trial resulted in a judgment in their favor. For the following reasons, we
affirm.
FACTUAL AND PROCEDURAL BACKGROUND
¶2 In May 2016, plaintiffs Brian and Barry Klein agreed with
defendant Treg Loyden, a real estate broker, to purchase, rehabilitate, and
sell real property in Tempe, Arizona. Plaintiffs each invested $87,500 in the
property for a total of $175,000. Meyer Homes, LLC — Loyden’s business
entity — purchased the property and obtained a $100,000 loan to fund the
rehabilitation. The rehab was never completed properly, and Brian Klein
eventually made several monthly interest payments on the $100,000 loan
on behalf of Meyer Homes to avoid foreclosure.
¶3 In 2017, plaintiffs sued Loyden and Meyer Homes. As
amended, plaintiffs’ operative pleading alleged (1) fraud; (2) breach of
contract; (3) breach of the covenant of good faith and fair dealing; and (4)
breach of fiduciary duty. They also sought punitive damages as to counts
(1) and (4). Defendants counterclaimed for (1) intentional interference with
a contract; (2) intentional interference with business expectancy and
relations; (3) breach of the covenant of good faith and fair dealing
(operating agreement); (4) breach of the covenant of good faith and fair
dealing (partnership agreement); (5) breach of contract; (6) breach of
fiduciary duty; and (7) statutory damages under A.R.S. § 33-420(A).
Defendants sought punitive damages as to count (1), (2), (6), and (7).
¶4 The case went to a four-day bench trial in September 2018,
and the trial court issued its detailed ruling the following month. The court
found for plaintiffs on all but their fraud claim, and on each of the
defendants’ counterclaims. But the court found that plaintiffs failed to show
damages, “except for the amount that Brian Klein should be reimbursed for
2
KLEIN, et al. v. LOYDEN, et al.
Decision of the Court
his monthly [loan] payments on behalf of Meyer Homes[,]” which
amounted to $11,054.29. The court also found against plaintiffs on their
claim for punitive damages.
¶5 The trial court held plaintiffs were entitled to attorney’s fees
and taxable costs under A.R.S. §§ 12-341 and -341.01. Plaintiffs filed an
application and affidavit for attorney’s fees and costs, including exhibits
with monthly fee breakdowns and a copy of the attorney-client fee
agreement. The application requested $115,935 in fees and $2,628.86 in
costs, for a total of $118,563.86. Defendants objected, arguing that the
amount requested was unreasonable. The trial court issued a detailed
minute entry finding plaintiffs were entitled to attorney’s fees under A.R.S.
§ 12-341.01, but that the amount requested was unreasonable. The court
awarded plaintiffs $30,000 in attorney’s fees and $2,164.16 in costs, for a
total of $32,164.16. After entry of a final judgment, plaintiffs timely
appealed from this award.
DISCUSSION
¶6 Plaintiffs contend the amount of attorney’s fees the trial court
awarded to them was objectively unreasonable. A trial court’s award of
attorney’s fees to the successful party under A.R.S. § 12-341.01 is
permissive, not mandatory. Manicom v. CitiMortgage, Inc., 236 Ariz. 153, 162,
¶ 38 (App. 2014). The trial court has broad discretion to award and
determine the amount of attorney’s fees. Vortex Corp. v. Denkewicz, 235 Ariz.
551, 562, ¶ 39 (App. 2014); see also Associated Indem. Corp. v. Warner, 143 Ariz.
567, 570 (1985) (listing the various factors trial courts should consider when
deciding whether to award attorney’s fees). We will not reverse the trial
court’s decision unless there is no reasonable basis for it. Democratic Party of
Pima Cty. v. Ford, 228 Ariz. 545, 548–49, ¶ 12 (App. 2012).
¶7 If the trial court determines a party is entitled to fees as the
successful party under A.R.S. § 12-341.01, it must then determine the
reasonableness of the fees requested. Assyia v. State Farm Mut. Auto. Ins., 229
Ariz. 216, 222, ¶ 22 (App. 2012). An application for attorney’s fees must be
sufficiently detailed so that the trial court may assess the reasonableness of
the time incurred, and billing rates should be like those prevailing in the
community for similar work. See Schweiger v. China Doll Rest., Inc., 138 Ariz.
183, 187–88 (App. 1983) (“Just as the agreed upon billing rate between the
parties may be considered unreasonable, likewise, the amount of hours
claimed may also be unreasonable.”).
3
KLEIN, et al. v. LOYDEN, et al.
Decision of the Court
¶8 The trial court properly considered all the relevant factors in
concluding that plaintiffs’ requested fees were unreasonable. In their
response to plaintiffs’ application, defendants made detailed arguments
challenging the reasonableness of plaintiffs’ counsels’ hourly rate and time
spent on specific tasks. The trial court concluded “that the time expended
appeared to be excessive for the type of case[,]” and “that [p]laintiffs’
hourly rate does not appear to be commensurate with her experience or
knowledge with this type of case.” The court further noted that “[p]laintiffs
were equally responsible for not resolving some or all of the issues” and
that they failed to prove damages other than a modest reimbursement
amount.
¶9 The trial court concluded $30,000 was a reasonable amount of
attorney’s fees to award plaintiffs under A.R.S. § 12-341.01. Plaintiffs
challenge the trial court’s “lack of specificity for the reasoning of the
award[,]” but they cite no authority requiring the court to issue specific
findings in support of its reasonableness determination. See Hawk v. PC
Village Ass’n, Inc., 233 Ariz. 94, 100, ¶ 21 (App. 2013) (“In exercising its
discretion to award fees, the court . . . need not make findings on the
record.”). On the record provided, a reasonable basis supported the trial
court’s fee award, and “[w]e will not substitute our judgment for that of the
trial court if there is any reasonable basis to uphold its decision . . . .”
Radkowsky v. Provident Life & Acc. Ins., 196 Ariz. 110, 113, ¶ 18 (App. 1999).
CONCLUSION
¶10 We affirm.
AMY M. WOOD • Clerk of the Court
FILED: AA
4