Medical Protective Company v. Herman Pang

FILED
NOT FOR PUBLICATION JUN 26 2013
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
MEDICAL PROTECTIVE COMPANY, a No. 11-17384
foreign corporation,
D.C. No. 2:05-cv-02924-JAT
Plaintiff - Appellee,
v. MEMORANDUM *
HERMAN PANG, M.D.,
Defendant - Appellant.
Appeal from the United States District Court
for the District of Arizona
James A. Teilborg, District Judge, Presiding
Argued and Submitted June 14, 2013
San Francisco, California
Before: TASHIMA and BYBEE, Circuit Judges, and WOOD, Senior District
Judge.***
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
***
The Honorable Kimba M. Wood, Senior District Judge for the U.S.
District Court for the Southern District of New York, sitting by designation.
Dr. Herman Pang appeals from the district court’s denial of his motions for
attorney’s fees and costs. We review the denial of fees for abuse of discretion, but
review de novo “[a]ny elements of legal analysis and statutory interpretation” that
figured in the court’s analysis. Barrios v. Cal. Interscholastic Fed’n, 277 F.3d
1128, 1133 (9th Cir. 2002). A court abuses its discretion if its denial “is based on
an inaccurate view of the law.” Id.
The district court properly denied Pang’s motion for costs pursuant to
District of Arizona Local Rule 54.1(d), a valid local rule. See Fed. R. Civ. P. 83.
The action was terminated by settlement; accordingly, “the parties must reach
agreement on costs, or bear [their] own costs.” D. Ariz. Loc. R. 54.1(d). We thus
affirm the district court’s denial of Pang’s motion for costs.
However, the district court abused its discretion in denying Pang’s motions
for attorney’s fees because its holding rested on an “inaccurate view of the law.”
Barrios, 277 F.3d at 1133. Pang moved for an award of attorney’s fees pursuant to
Ariz. Rev. Stat. § 12-341.01, which grants trial courts discretion to award
attorney’s fees to the “successful party” in actions arising out of contract. “An
adjudication on the merits is not a prerequisite” to recovering under Section 12-
341.01, Fulton Homes Corp. v. BBP Concrete, 155 P.3d 1090, 1096 (Ariz. Ct.
App. 2007), and a party may be successful without “prevail[ing] on the merits of
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the underlying claims,” Mark Lighting Fixture Co., Inc. v. Gen. Elec. Supply Co.,
745 P.2d 123, 128 (Ariz. Ct. App. 1986). To determine which party was
successful, the court should consider “the totality of the circumstances and the
relative success of the parties.” McAlister v. Citibank (Arizona), 829 P.2d 1253,
1262 (Ariz. Ct. App. 1992); see also Berry v. 352 E. Va., L.L.C., 261 P.3d 784, 788
(Ariz. Ct. App. 2011) (noting that the successful party is the “net winner” and that
the trial court should apply a “totality of the litigation test” in cases involving
“varied success”).
The district court improperly fixated on the fact that it had never resolved
the merits of any of the underlying claims, and failed to assess whether Pang was
the “successful party” in light of the totality of the circumstances. We also note
that Arizona courts have contemplated that attorney’s fees might be awarded at
more than one point in time during the course of litigating an action arising out of a
contract. See Britt v. Steffen, 205 P.3d 357, 359-60 (Ariz. Ct. App. 2008)
(providing for an award of attorney fees when a party has prevailed only on a
motion to dismiss without prejudice). Thus, the post-judgment motion to vacate
the settlement was part of an action arising out of a contract and may be eligible for
an award of attorney’s fees.
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Accordingly, we vacate both of the district court’s orders denying Pang’s
motions for attorney’s fees and remand so that the district court can determine (1)
whether Pang was the “successful party” as defined by Arizona law, and (2) if so,
whether the district court should exercise its discretion to award attorney’s fees..
See Assoc. Indem. Corp. v. Warner, 694 P.2d 1181, 1184 (Ariz. 1985) (in banc).
Each party to bear its own costs on appeal.
AFFIRMED IN PART; VACATED AND REMANDED IN PART.
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