Bennett Blum, M.D., Inc. v. Connie Cowan, Prof'l Ltd.

235 Ariz. 204

330 P.3d 961

690 Ariz. Adv. Rep. 4

BENNETT BLUM, M.D., INC., An Arizona Corporation, Plaintiff/Appellee,

v.Connie COWAN, a Single Woman; and Law Office of Rand Haddock, PLC, an Arizona Professional Limited Liability Company, Defendants/Appellants.

Nos. 2 CA–CV 2012–0166, 2 CA–CV 2013–0090.

Court of Appeals of Arizona, Division 2.

July 3, 2014.

Snell & Wilmer L.L.P. By William N. Poorten, III, Andrew M. Jacobs, and Katherine V. Foss, Tucson, Counsel for Plaintiff/Appellee.

Mesch, Clark & Rothschild P.C., By Gary J. Cohen, Tucson, Counsel for Defendants/Appellants.

Judge VÁSQUEZ authored the opinion of the Court, in which Judge HOWARD and Judge OLSON¹ concurred.

OPINION

VÁSQUEZ, Judge.

¶ 1 In this action arising out of a contract, appellants Connie Cowan and the Law Office of Rand Haddock, PLC (Haddock) appeal from the trial court's post-judgment award of attorney fees in favor of appellee Bennett Blum, M.D., Inc. (Blum).² For the reasons set forth below, we vacate the award and remand for further proceedings.

Factual and Procedural Background

¶ 2 Haddock represented Cowan in a contested will proceeding involving the sale of Cowan's deceased father's ranch (will litigation). Haddock and Cowan signed a contract under which Blum agreed to provide assistance as a medical expert on the issue of undue influence in the will litigation. Blum served as a medical expert at a settlement conference, but Cowan and Haddock refused to pay the amount he billed.

¶ 3 In July 2011, Blum filed a complaint against Cowan and Haddock, alleging breach of contract for nonpayment of fees. After a bench trial in September 2012, the court found in favor of Blum. The court entered a final judgment in October 2012, awarding Blum $18,708.74 in damages, plus attorney fees and costs.

¶ 4 In November 2012, Blum initiated a separate garnishment proceeding in the trial court. Appellants then filed a motion for stay of execution of the judgment, seeking “time to obtain a supersedeas bond,” and filed a notice of appeal from the October 2012 judgment.³ In a February 2013 under-advisement ruling, the court denied appellants' motion for a stay and granted Blum's applications for entry of judgment against the garnishees. Blum then requested attorney fees and costs incurred in the garnishment and other post-judgment proceedings against appellants. In May 2013, the court granted Blum's request in a signed, under-advisement ruling. Appellants timely appealed that ruling. We have jurisdiction pursuant to A.R.S. §§ 12–120.21, 12–2101(A)(2).

Post–Judgment Attorney Fees

¶ 5 Appellants maintain the trial court erred by awarding Blum attorney fees incurred post-judgment. We review a trial court's award of attorney fees for an abuse of discretion. Orfaly v. Tucson Symphony Soc'y, 209 Ariz. 260, ¶ 18, 99 P.3d 1030, 1035 (App.2004). However, we review questions of law, including the court's authority to award attorney fees and contract interpretation, de novo. Geller v. Lesk, 230 Ariz. 624, ¶ 8, 285 P.3d 972, 975 (App.2012). And, we will affirm an award of attorney fees if it was appropriate under any of the authorities relied upon by the proponent. See Harris v. Reserve Life Ins. Co., 158 Ariz. 380, 384, 762 P.2d 1334, 1338 (App.1988).

¶ 6 In his motion for post-judgment attorney fees and costs, Blum argued he was entitled to attorney fees based upon the fee provision in the contract; A.R.S. §§ 12–341, 12–341.01(A); and Rules 54(f) and 77(f), Ariz. R. Civ. P. In response, appellants argued the amount of fees requested was “unreasonable as a matter of law,” the fees relating to Blum's responses to appellants' post-judgment motions were not authorized by § 12–341.01(A), and the court should deny the fees arising from the garnishment proceeding pursuant to A.R.S. § 12–1580(E). After hearing argument and receiving supplemental briefing on the applicability of § 12–1580(E),⁴ the trial court granted Blum's motion, apparently relying on § 12–341.01(A) as the basis for the award. The court explained § 12–1580(E) “adds an additional basis for an award of attorneys' fees in the specific area of garnishment to ... § 12–341.01, [and is] not an exclusive basis.”

¶ 7 On appeal, appellants contend that § 12–341.01(A) does not authorize an award of attorney fees “to object to a motion for stay pending appeal; to attempt collection efforts; or to file motions or responses to motions post-judgment.” ⁵ They further argue that, even if § 12–341.01(A) applies, they are the successful parties entitled to their attorney fees, not Blum.⁶ And, again relying on § 12–1580(E), appellants argue “Blum was not entitled to recover any fees incurred in connection with the garnishments.”

¶ 8 “[I]t is well-settled in Arizona that ‘[c]ontracts for payment of attorneys' fees are enforced in accordance with the terms of the contract.’ ” McDowell Mountain Ranch Cmty. Ass'n v. Simons, 216 Ariz. 266, ¶ 14, 165 P.3d 667, 670 (App.2007), quoting Heritage Heights Home Owners Ass'n v. Esser, 115 Ariz. 330, 333, 565 P.2d 207, 210 (App.1977) (second alteration in McDowell Mountain Ranch Cmty. Ass'n ). Accordingly, a court lacks discretion to refuse to award attorney fees under a contractual provision. Mining Inv. Grp., LLC v. Roberts, 217 Ariz. 635, ¶ 26, 177 P.3d 1207, 1213 (App.2008); Chase Bank of Ariz. v. Acosta, 179 Ariz. 563, 575, 880 P.2d 1109, 1121 (App.1994).

¶ 9 The contract in this case includes the following provision for attorney fees:

In the event either Party hereto shall commence legal proceedings against the other to enforce the terms hereof, or to declare rights hereunder, as the result of the breach of any covenants or condition of this Agreement, the prevailing Party in any such proceeding shall be entitled to recover from the losing Party its costs of suit, including reasonable attorneys' fees.

A. Post–Judgment Motions

¶ 10 The attorney fees stemming from appellants' Rule 60(c) motion and motion to stay fall squarely within the broad language of this contractual provision.⁷ There is no dispute that the underlying action arose from the parties' contract and that Blum was the prevailing party on his breach-of-contract claim in that action. In their Rule 60(c) motion, appellants sought relief from the underlying judgment, and, in their motion to stay, appellants sought to delay execution of that judgment. SeeAriz. R. Civ.App. P. 7(a). Thus, both the Rule 60(c) motion and the motion to stay necessarily were related to the underlying action on the contract. The trial court denied appellants' motion for stay, and appellants withdrew their Rule 60(c) motion.

¶ 11 The trial court therefore had no discretion to refuse to award Blum attorney fees for appellants' Rule 60(c) motion and motion to stay under the contract. See McDowell Mountain Ranch Cmty. Ass'n, 216 Ariz. 266, ¶ 14, 165 P.3d at 670. Because the contract controls, we need not address the applicability of § 12–341.01(A). See Harris, 158 Ariz. at 384, 762 P.2d at 1338; see also Lisa v. Strom, 183 Ariz. 415, 418 n. 2, 904 P.2d 1239, 1242 n. 2 (App.1995) (contract's attorney fees provision controls to exclusion of statute).

¶ 12 Moreover, we disagree with appellants that Blum's request for attorney fees was untimely because “Blum did not generally make a fee request post-judgment, much less a request that stated the legal basis for a request.” In support of this argument, appellants rely on Ezell v. Quon, 224 Ariz. 532, ¶ 31, 233 P.3d 645, 652 (App.2010). But that case is inapplicable here because it involved a request for attorney fees on appeal based solely on Rule 21, Ariz. R. Civ.App. P. See Ezell, 224 Ariz. 532, ¶¶ 28, 31, 233 P.3d at 652. And, in any event, Blum requested attorney fees in the underlying action in his complaint and then again within a week after the trial court had issued its February 2013 ruling. See Ariz. R. Civ. P. 54(g)(1), (2) (claim for attorney fees shall be made in pleading; motion for attorney fees shall be filed within twenty days of decision on merits). In both the complaint and the motion, Blum specified the contract as a basis for the award.

B. Garnishment Proceeding

¶ 13 However, we conclude the trial court erred in awarding attorney fees relating to the garnishment proceeding pursuant to § 12–341.01(A). Garnishment proceedings are “purely statutory,” Patrick v. Associated Drygoods Corp., 20 Ariz.App. 6, 8, 509 P.2d 1043, 1045 (1973), and are “treated in all respects ... as an original independent action” from the underlying lawsuit, Davis v. Chilson, 48 Ariz. 366, 371, 62 P.2d 127, 130 (1936).⁸ And, § 12–341.01(A) does not apply to “ ‘purely statutory causes of action.’ ” Keystone Floor & More, LLC v. Ariz. Registrar of Contractors, 223 Ariz. 27, ¶ 11, 219 P.3d 237, 240 (App.2009), quoting Hanley v. Pearson, 204 Ariz. 147, ¶ 17, 61 P.3d 29, 33 (App.2003); Kennedy v. Linda Brock Auto. Plaza, Inc., 175 Ariz. 323, 325–26, 856 P.2d 1201, 1203–04 (App.1993). We therefore turn to the garnishment statutes to determine whether the award was proper.

¶ 14 Section 12–1580(E) provides that, in a garnishment proceeding, “[t]he prevailing party may be awarded costs and attorney fees in a reasonable amount determined by the court.” However, “[t]he award shall not be assessed against nor is it chargeable to the judgment debtor, unless the judgment debtor is found to have objected to the writ solely for the purpose of delay or to harass the judgment creditor.” A.R.S. § 12–1580(E). Here, the trial court assessed attorney fees against appellants, the judgment debtors. However, because it relied improperly on § 12–341.01(A) as the basis for the award, the court did not make the requisite findings under § 12–1580(E). And, in the absence of such findings, the court erred by awarding fees against appellants in the garnishment proceedings.

¶ 15 Blum nevertheless argues “ § 12–1580(E) does not apply” and “[t]his Court should reject [a]ppellants' argument that ... § 12–1580(E) somehow trumps...