Berry v. 352 E. Virginia, L.L.C., 228 Ariz. 9

Berry and wife, as trustees, sued 352 E. Virginia for breach of contract related to selling an office building; the case involved a warranty and as-is sale with a prevailing-party fees clause.
A staircase remodel was negotiated; cost sharing was amended to split up to $10,000, with holdbacks and invoices tied to escrow disbursements.
In 2006, costs rose to about $17,250 for the staircase, with disputes over disbursement to 352 and Berry.
Arising disputes over receipts and itemizations, Berry redirected escrow disbursements and ultimately the suit proceeded to arbitration, yielding a partial award to 352 and a breach-of-warranty verdict for Berry.
After trial, both sides sought fees; the superior court awarded Rule 68 sanctions against Berry and awarded 352 partial attorneys’ fees and costs, then vacated and remanded, and the final judgment included prejudgment interest.
Berry appealed, challenging fee awards, Rule 68 sanctions, prejudgment interest, and the overall designation of the prevailing party.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether contract-based attorneys’ fees apply	Berry argues fees should be governed by the contract, not §12-341.01(A).	352 contends statutory §12-341.01(A) governs fee entitlement.	Contractual fees not controlling; contract not pleaded as basis for fee award.
Whether prejudgment interest was properly awarded	Berry challenges liquidated nature and timing of interest.	352 asserts liquidated claim and entitlement to prejudgment interest as of June 6, 2006.	352's claim was liquidated; prejudgment interest properly awarded.
Who is the prevailing party for §12-341.01(A) purposes	Berry argues Berry prevailed on some claims; seeks proportional fees.	352 contends it recovered money and partial fees; totality of litigation favors 352.	Trial court properly found 352 prevailed overall, allowing partial fee recovery.
Whether Berry was entitled to fees under the second sentence of §12-341.01(A) (settlement offer rule)	Berry argues his April 2008 offer should trigger fee shifting if final judgment equals offer.	352 asserts judgment finally obtained was not more favorable than the offer.	Not eligible; judgment finally obtained did not exceed Berry’s offer.
Rule 68 sanctions: whether remand is needed for proper calculation	Berry conceded; no error in sanctions ruling.	Correct imposition of Rule 68 sanctions requires calculation of costs/fees incurred as of offer date.	Remand to determine amount reasonably incurred as of the offer date for sanctions.

Chase Bank of Ariz. v. Acosta, 179 Ariz. 563 (App. 1994) (contractual attorneys’ fees enforced only if pleaded and proven)
John C. Lincoln Hosp. & Health Ctr. v. Maricopa Cnty., 208 Ariz. 532 (App. 2004) (de novo review for prejudgment interest)
Alta Vista Plaza, Ltd. v. Insulation Specialists Co., 186 Ariz. 81 (App. 1995) (liquidated damages and prejudgment interest framework)
Sanborn v. Brooker & Wake Prop. Mgmt., Inc., 178 Ariz. 425 (App. 1994) (prevailing party determination and fee awards when multiple claims exist)
Ayala v. Olaiz, 161 Ariz. 129 (App. 1989) (totality-of-litigation approach to prevailing party fees)
Schweiger v. China Doll Rest., Inc., 138 Ariz. 183 (App. 1983) (declines fees for unsuccessful separate claims; totality approach)
Henry v. Cook, 189 Ariz. 42 (App. 1996) (partial success can support prevailing party status)
Ocean W. Contractors, Inc. v. Halec Constr. Co., 123 Ariz. 470 (App. 1979) (monetary award as a factor in determining prevailed status)