Medical Protective Company v. Herman Pang
2013 U.S. App. LEXIS 21718
| 9th Cir. | 2013Background
- Pang bought increased medical malpractice insurance from Medical Protective in July 2002, and was notified of a pending Williamson malpractice suit in July 2002.
- In 2005 Medical Protective filed suit in the District of Arizona seeking rescission of the coverage increase and Pang counterclaimed for bad faith.
- Before trial, Pang secured a favorable jury verdict in Williamson; Williamson appealed and, during the appeal, the parties settled the coverage dispute.
- The district court approved a March 26, 2008 order dismissing claims without prejudice, with potential reopening after Williamson’s appeal outcome.
- Williamson’s appeal succeeded; the Arizona Court of Appeals remanded for a new trial; the mandate issued February 25, 2010, but neither party moved to reopen, making the March 26 order final and the action dismissed with prejudice.
- Post-judgment motions followed: Pang sought fees under Arizona law (Section 12-341.01) and Medical Protective sought to amend or vacate; the district court denied the fee motions and later denied costs, then Pang appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Costs under Rule 54(d) after settlement | Pang contends he is the prevailing party and entitled to costs under Rule 54(d). | Medical Protective argues Local Rule 54.1(d) controls and bars costs when settlement terminates an action. | District court properly denied costs under Local Rule 54.1(d). |
| Attorney’s fees under Arizona § 12-341.01 | Pang contends he is a 'successful party' eligible for fees despite settlement. | Medical Protective argues no party was successful on the merits since there was no merits resolution. | District court abused discretion by applying an incorrect standard; remand to determine if Pang was the 'successful party' under Arizona law. |
| Scope of award for attorney’s fees for post-judgment opposition | Fees incurred opposing post-judgment motions should be recoverable as part of the contract action. | Fees for post-judgment motion opponents may require a new action to justify an award. | District court erred in requiring a new action; post-judgment motion fees may be recoverable; remand to determine if fee award is appropriate. |
Key Cases Cited
- Fulton Homes Corp. v. BBP Concrete, 155 P.3d 1090 (Ariz. Ct. App. 2007) (adjudication not prerequisite for § 12-341.01 award; totality of circumstances controls)
- Britt v. Steffen, 205 P.3d 357 (Ariz. Ct. App. 2008) (fees may be awarded for failure to prosecute; without prejudice dismissal can yield fees)
- Sanborn v. Brooker & Wake Prop. Mgmt., 874 P.2d 982 (Ariz. Ct. App. 1994) (non-merits relief can support fee recovery under § 12-341.01)
- McAlister v. Citibank, 829 P.2d 1253 (Ariz. Ct. App. 1992) (totality-of-the-litigation approach for 'successful party' under § 12-341.01)
- Hinkson v. United States, 585 F.3d 1247 (9th Cir. 2009) (district court abuse of discretion standards in fee determinations; de novo review on law)
- Barrios v. California Interscholastic Federation, 277 F.3d 1128 (9th Cir. 2002) (standard of review and application of state-law fee standards in federal court)
- Kona Enterprises v. Estate of Bishop, 229 F.3d 877 (9th Cir. 2000) (state-law interpretation guidance for fee-shifting statutes in federal practice)
- Berry v. 352 E. Va., LLC, 261 P.3d 784 (Ariz. Ct. App. 2011) (mult-claim cases; 'net winner' approach to determine successful party)
- Mark Lighting Fixture Co. v. Gen. Elec. Supply Co., 745 P.2d 123 (Ariz. Ct. App. 1986) (interpretation of 12-341.01; not limited to final judgment)
- Wagenseller v. Scottsdale Memorial Hospital, 710 P.2d 1025 (Ariz. 1985) (scope of 'successful party' and fee-shifting under Arizona law)