MARK LIGHTING FIXTURE COMPANY, INC., a New Jersey corporation, Plaintiff-Appellant, v. GENERAL ELECTRIC SUPPLY COMPANY, A DIVISION OF GENERAL ELECTRIC COMPANY, a New York Corporation, Defendant-Third Party Complainant-Appellee, and Tri-Valley Electric, Inc., an Arizona corporation, Third Party Defendant-Appellee.
1 CA-CIV 8008
Court of Appeals of Arizona, Division 1, Department B
Aug. 19, 1986
745 P.2d 123
DISPOSITION
That portion of the court of appeals’ decision holding that it was bound to apply the formula used in the Transamerica decision to investment tax credits is vacated, as is its award of attorneys’ fees. This case is reversed and remanded to superior court with instructions to calculate the taxpayer‘s deduction by use of the formula D = CN X NTN as explained above and to enter judgment accordingly. AS & R has requested attorneys’ fees pursuant to
GORDON, C.J., FELDMAN, V.C.J., and CAMERON and HOLOHAN, JJ., concur.
Beus, Gilbert, Wake & Morrill by Leo R. Beus, Keith S. Knochel, Phoenix, for plaintiff-appellant.
Johnston & Grynkewich by Gary S. Grynkewich, Tucson, for third party defendant-appellee Tri-Valley Elec., Inc.
CONTRERAS, Judge.
The central issue in this appeal is whether costs pursuant to
On October 22, 1982, Mark Lighting Fixture Company, Inc. filed a breach of contract action against General Electric Supply Company in Maricopa County Cause No. C-472488. General Electric then filed a third-party complaint against Tri-Valley Electric, Inc. for indemnification. During the ensuing year the parties conducted extensive discovery, but no motion to set and certificate of readiness was filed. On September 15, 1983, a minute entry was issued placing the case on the inactive calendar for dismissal on November 15, 1983, unless a motion to set and certificate of readiness was filed or a judgment entered before that date. Thereafter, when neither occurred, a minute entry signed by a superior court commissioner issued on November 22, 1983, ordering that the case be dismissed without prejudice for lack of prosecution pursuant to Rule V, Uniform Rules of Practice. Since the dismissal was without prejudice, the appellant reasserted its claim by filing the same action again under Maricopa County Cause No. C-501781.
General Electric filed a statement of costs on December 16, 1983, and on December 20, 1983, filed an application for attorney‘s fees pursuant to
On May 22, 1984, appellant filed a motion pursuant to Rule 60(c), Arizona Rules of Civil Procedure, to vacate the minute entry order of dismissal in C-472488, alleging excusable neglect, and also moved to consolidate that case with the second one it had filed in C-501781. On May 25, 1984, a hearing was held on the reasonableness of the attorney‘s fees requests. The trial court granted General Electric‘s request for $5,182.00 in attorney‘s fees and Tri-Valley‘s request for $8,350.00, subject to its subsequent ruling on the Rule 60(c) motion. After hearing oral argument on the request for Rule 60(c) relief, the trial court denied the motion, finding that while there was an open question on the issue of excusable neglect, the appellant had not made a timely request for relief. On August 13, 1984, a formal written order was entered dismissing the action, denying the Rule 60(c) motion, denying the motion to consolidate, and granting General Electric attorney‘s fees of $5,182.00 and costs of $1,325.75 and Tri-Valley attorney‘s fees of $8,350.00 and costs of $859.00. Mark Lighting appeals from the trial court‘s award of costs and attorney‘s fees to General Electric and Tri-Valley, who will both be referred to as “appellees.”
JURISDICTION TO AWARD ATTORNEY‘S FEES
We first consider an issue raised by appellant for the first time in its reply brief. Appellant argues that the awards of attorney‘s fees must be reversed because the trial court lacked jurisdiction to rule on the attorney‘s fees requests. Normally, issues will not be considered on appeal if they have not been raised below, Brown Wholesale Electric Co. v. Safeco Insurance Co. of America, 135 Ariz. 154, 659 P.2d 1299 (App.1982), or if they are raised on appeal for the first time in the reply
Appellant argues that the attorney‘s fees requests were not timely filed and therefore the trial court lacked jurisdiction to consider them. Appellant cites the case of Title Insurance Co. of Minnesota v. Acumen Trading Co., Inc., 121 Ariz. 525, 591 P.2d 1302 (1979), in which the Arizona Supreme Court held that if a lower court judgment does not contain an award of attorney‘s fees where fees have been requested pursuant to
With the foregoing proposition in mind, the appellant contends that the minute entry order of dismissal which was signed by the court commissioner and filed with the clerk should be considered a judgment from which the 15 day time period for filing motions to reconsider or alter the judgment began to run. Appellant points out that in Stoneberg v. Northwood, 121 Ariz. 230, 589 P.2d 473 (App.1978), Division Two of this court held that a minute entry order signed by the judge and filed with the clerk was in compliance with Rule 58(a), Arizona Rules of Civil Procedure, which prescribes the requirements of a final judgment, and therefore was a final, appealable order. Appellant argues that since the signed minute entry order dismissing the case on November 22, 1983, did not contain an award of attorney‘s fees and since the requests for attorney‘s fees were not filed within the requisite 15 days from the entry of the signed minute entry order, the trial court had no jurisdiction to consider the requests for attorney‘s fees. We disagree.
In presenting the foregoing jurisdictional argument, appellant ignores Division One‘s opinion in Johnson v. Nelson, 128 Ariz. 587, 627 P.2d 1085 (App.1981), which was in effect at the time the awards of attorney‘s fees and costs were made. In Johnson v. Nelson, we disagreed with Division Two‘s decision in Stoneberg that a minute entry order signed by the court and filed with the clerk is a judgment within the meaning of Rule 58(a). We specifically held in Johnson v. Nelson that a separate instrument apart from a minute entry is required as the appropriate memorial for a judgment or appealable order. If we follow Johnson, no judgment was “entered” in the present case until the separate formal written instrument was signed by the court and filed with the clerk on August 13, 1984. The requests for attorney‘s fees had been filed long before that date and hence were not untimely, so the trial court did not lack jurisdiction to consider the requests if we follow Johnson.
The appellant attempts to bolster its argument with a decision rendered after the briefs were filed and after oral argument was heard. On February 27, 1986, the Arizona Supreme Court issued its opinion in Focal Point, Inc. v. Court of Appeals, 149 Ariz. 128, 717 P.2d 432 (1986).1 Focal Point addressed the conflict between the two divisions of the court of appeals represented by the Johnson and Stoneberg cases. The supreme court chose Stoneberg and rejected Johnson. It found that the written minute entry entitled “Judgment” in Focal Point satisfied the three requirements of Rule 58(a): it was written, signed by a judge, and filed with the clerk of the court. To require a separate instrument under the circumstances would place “undue emphasis on form, more so than is required by the language of the rule.” Id. at 129, 717 P.2d at 433. Although we seriously question the soundness of this choice, we must consider its applicability, if any, to this case.
We conclude that at least the first and third factors militate against applying the general rule of retroactive application of the Focal Point holding. As to the first factor, Focal Point overruled previously clear precedent in Division One upon which these litigants, particularly appellees, may have relied. Additionally, the Focal Point choice between the split of authority was not foreshadowed by any previous supreme court rulings.
The second factor is not particularly relevant to the Focal Point issue, but this court has not detected a past problem with the rule of Johnson v. Nelson which retroactive application of Focal Point would relieve. In fact it was the firm belief of Division One that the Johnson rule provided certainty and finality where such was critically needed.
Finally, with respect to the third factor, retroactive application would cause injustice and hardship to the appellees who believed their claim was protected in Division One by the logical rationale of Johnson v. Nelson. With Johnson in effect, the appellees were justified in relying upon it and realistically could not have been expected to file post-judgment motions following the filing of a signed minute entry order of dismissal. This is especially true in the case before us since the signed minute entry order was not entitled “judgment” as it was in Focal Point.
Based on the foregoing discussion, we do not apply Focal Point retroactively and therefore we reject appellant‘s argument that the trial court lacked jurisdiction to rule on the attorney‘s fees requests.
MERITS OF ATTORNEY‘S FEES AND COSTS AWARDS
We now turn to the ruling on the merits of the requests for costs and attorney‘s fees. The trial court‘s awards of costs were made pursuant to
The successful party to a civil action shall recover from his adversary all costs expended or incurred therein unless otherwise provided by law.
The awards of attorney‘s fees were made pursuant to
In any contested action arising out of a contract, express or implied, the court may award the successful party reasonable attorney‘s fees....
Appellant argues that these statutes were not meant to allow costs and attorney‘s fees to defendants in a situation such as that found in this case where no determination on the merits has been made, where the plaintiff‘s suit has been dis-
In considering the issues raised by the appellant, we first must determine whether it is ever possible to be a “successful party” under these statutes without prevailing on the merits of any of the underlying claims. We are assisted in answering this question by the Arizona Supreme Court‘s supplemental opinion in Wagenseller v. Scottsdale Memorial Hospital, 147 Ariz. 370, 710 P.2d 1025 (1985). In the Wagenseller supplemental opinion, the precise issue was whether a party who successfully appeals the trial court‘s grant of summary judgment is a “successful party” eligible to recover attorney‘s fees under
We now turn to the more specific issue of whether the defendants in a case in which the plaintiff‘s suit has been dismissed without prejudice due to plaintiff‘s failure to prosecute may be considered “successful” parties for purposes of recovering costs and attorney‘s fees pursuant to
We do not find the Carter decision to be persuasive. The statute in Carter awarded attorney‘s fees to the “prevailing” party in a usury action. The Oklahoma court decision was influenced by the fact that attorney‘s fees under the statute in that case were considered to be a penalty and, thus, the statute should be strictly construed. This is in contrast to the statute at bar. The purpose of attorney‘s fees, as stated in
More relevant to the situation presented in this case are other cases in which a plaintiff‘s suit has been dismissed for want of prosecution. The cases have generally held, with some exceptions, that the termination of an action or proceeding by dismissal for want of prosecution constitutes a “trial” or “final hearing” of such action for the purpose of allowing assessment of a “docket fee” or “attorney‘s fee” as a part of the costs. 1 S. Speiser, Attorneys’ Fees § 12:31 (1973). Appellant has cited one case, Samuels v. Sabih, 62 Cal.App.3d 335, 133 Cal.Rptr. 74 (App.1976), in which attorney‘s fees were denied upon the trial court‘s dismissal of an action without prejudice for lack of prosecution. We note that the statute in that case is readily distinguishable from the Arizona statute. The California statute allowed attorney‘s fees to the prevailing party and defined “prevailing party” to mean the party in whose favor final judgment is rendered. The California court concluded that the legislature did not intend an order of dismissal for lack of prosecution to be a formal judgment for purposes of the statute.
The Arizona legislature could have chosen language similar to that used in the California statute to indicate that the merits of an action must be reached before costs and attorney‘s fees can be awarded in the trial court. Instead it provided for costs to be awarded to “the successful party to a civil action” (
We now turn to appellant‘s argument that Local Rule 3.7(e) prevents the trial court from granting attorney‘s fees until the merits of the case have been decided. Appellant‘s contention in this regard is without merit. Rule 3.7(e) is a procedural rule established by the Maricopa County Superior Court.2 Procedural
The final issue to be determined is whether the trial court properly exercised its discretion in granting attorney‘s fees pursuant to
In Associated Indemnity Corp. v. Warner, 143 Ariz. 567, 694 P.2d 1181 (1985), the Arizona Supreme Court enumerated six factors to assist the trial court in determining whether to award attorney‘s fees pursuant to
- whether the unsuccessful party‘s claim or defense was meritorious;
- whether the litigation could have been avoided or settled and the successful party‘s efforts were completely superfluous in achieving the result;
- whether assessing fees against the unsuccessful party would cause an extreme hardship;
- whether the successful party did not prevail with respect to all of the relief sought;
- whether the legal question presented was novel and whether such claim or defense had previously been adjudicated in this jurisdiction; and
- 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.
143 Ariz. at 570, 694 P.2d at 1184. The fact that the merits in this case were left for future resolution lies within the fourth factor, i.e., whether the successful party prevailed with respect to all of the relief sought. Another important consideration, set forth as the first factor, is whether the unsuccessful party‘s claim or defense was meritorious. In this case the record shows no effort by the appellant to demonstrate that its claim was meritorious. Instead, its sole argument for resisting the present award of attorney‘s fees against it was that it had refiled its claim and that the merits would be determined. This does not indicate that its claim is meritorious.
We also note that appellant might have avoided the problem of having attorney‘s fees and costs assessed against it prior to
Under the circumstances presented in this case, where the appellant did not demonstrate it had a meritorious claim and failed to take proper and timely steps that may have avoided the instant problem, we find no abuse of discretion in the trial court‘s decision to award costs and attorney‘s fees and to award them at the present time rather than postponing the ruling until the merits were determined in C-501781. We also note that appellant‘s contentions that discovery was completed and that the action in C-501781 would be speedily resolved were disputed by the appellees. Whether to award attorney‘s fees and costs in this procedural context was within the sound discretion of the trial judge. We find no abuse of discretion.
Appellant also attacks the amount of attorney‘s fees awarded to Tri-Valley, indicating that the third-party suit not only sought indemnification but additional affirmative relief as well. Since appellant has not demonstrated that any of the attorney‘s fees awarded to Tri-Valley were for time spent on these additional matters, we find no grounds for disturbing the award.
The appellee General Electric has requested an award of attorney‘s fees on appeal pursuant to
For the reasons stated herein, we affirm the trial court‘s award of costs and attorney‘s fees in this case.
JACOBSON, P.J., concurs.
CORCORAN, Judge, dissenting:
I respectfully dissent. Unlike the majority, I agree with Focal Point, and believe that Johnson v. Nelson was an anomaly.
The request for attorneys’ fees preceded the enactment of
Although any party to this case could have filed a motion to set and certificate of readiness pursuant to Rule 5(b), Uniform Rules of Practice, no one did. Through the tacit acquiescence of all parties, this case was dismissed without prejudice.
I would reverse the awards of costs and attorney‘s fees.