Boltz & Odegaard v. Hohn

Citations: 714 P.2d 854; 148 Ariz. 361; 1985 Ariz. App. LEXIS 792Docket: 1 CA-CIV 7289

Court: Court of Appeals of Arizona; August 20, 1985; Arizona; State Appellate Court

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Earl F. Boltz, Jr. and Douglas Odegaard (Boltz), as plaintiffs-appellees, initiated a legal action against Edward L. Hohn, a month-to-month tenant, for unpaid rent and associated charges totaling $361.78 after Hohn vacated the premises by the end of December 1978. Hohn counterclaimed for $10,000 in compensatory damages and $5,000 in punitive damages, alleging interference with his business relationship. The case was transferred from justice court to superior court due to the counterclaim exceeding the $1,000 jurisdictional limit. Prior to trial, Hohn made an unaccepted offer of judgment for $250 plus costs. At trial, Boltz was awarded $200, while Hohn's counterclaim was unsuccessful. Boltz subsequently requested attorney's fees, which the court granted at $2,119. Hohn appealed both the judgment and the attorney's fees order, arguing that the superior court lacked subject matter jurisdiction because his counterclaim was not verified as required by A.R.S. 22-201(F). Boltz contended that Hohn should be estopped from challenging the court's jurisdiction after invoking it through his counterclaim.

Estoppel does not need to be addressed regarding Hohn's challenge to the superior court's jurisdiction, as no jurisdictional defect exists. The jurisdictional requirement under A.R.S. 22-201 concerns the amount of damages, and the failure to verify that the counterclaim damages exceeded $1,000 was a technical defect rectified by the defendant's sworn testimony during trial. 

Regarding attorney's fees, Boltz was awarded $2,119 under A.R.S. 12-341.01(A) and A.R.S. 22-201(F). A.R.S. 12-341.01 allows reasonable attorney's fees for the successful party in contract-related actions, while A.R.S. 22-201(F) permits the trial court to impose costs, including attorney's fees, on parties whose counterclaims exceed $1,000 but who are awarded less than that amount. 

Hohn contends Boltz should not receive attorney's fees incurred after Hohn's offer of judgment, which proposed judgment for $250 plus accrued costs. Hohn argues this offer implicitly included attorney's fees, suggesting that since Boltz was awarded less than the offer, he should be barred from recovering post-offer attorney's fees. However, the prevailing rule is that a litigant generally cannot recover attorney's fees from the loser unless provided by statute, court rule, or agreement. Arizona law establishes that attorney's fees are not considered "taxable costs" and cannot be recovered as such under A.R.S. 12-341. Consequently, even if Hohn's offer included attorney's fees, it would not prevent the recovery of those fees, as they do not qualify as costs.

Hohn contends that the trial court erred in awarding attorney's fees for Boltz's defense of Hohn's counterclaim, arguing that A.R.S. 12-341.01 permits fees only in contract-related cases and that his counterclaim was based on tort. However, the court found that Boltz's request for fees was valid under A.R.S. 22-201(F), which allows for the award of fees even in tort cases, particularly when the defendant does not exceed the jurisdictional limit of $1,000. The court also noted that Hohn, who filed and insisted on pursuing the counterclaim, provided minimal evidence to support it, justifying the fee award under A.R.S. 22-201(F). 

Hohn further argued that Boltz's documentation for the fee request was insufficient to demonstrate reasonableness, referring to the guidelines established in Schweiger v. China Doll Restaurant. Boltz's attorney submitted an affidavit stating he spent 32.6 hours at a rate of $65 per hour, totaling $2,119, but did not specify the time spent on individual tasks. Despite this, the court concluded that a remand to reassess the reasonableness of the fees was unnecessary, as the trial court had conducted a hearing to evaluate the request. The absence of a transcript from that hearing meant the appellate court could not challenge the trial court's findings. Hohn's prior objections did not address the reasonableness of the fees until after the award was made, and during a subsequent hearing, he did not pursue this argument further.

Hohn's appeal challenges the trial court's award of attorney's fees, but he did not contest the reasonableness of the fees, limiting his arguments to the entirety of the fee rather than its appropriateness. Consequently, the court concluded that Hohn waived his right to contest the fee's reasonableness. Hohn's notice of appeal referred to the "judgment," but his brief focused solely on the attorney's fees issue. He did not appeal the $200 judgment in favor of Boltz and Odegaard, the $191.25 in costs, or the dismissal of his counterclaim. The court affirmed the trial court's decision awarding attorney's fees of $2,119.25 to Boltz and Odegaard.

Regarding attorney's fees for the appeal, Boltz and Odegaard sought fees under A.R.S. 12-341.01(A) related to the contract and A.R.S. 22-201(F) concerning the counterclaim. Hohn's arguments about rule 68 of the Arizona Rules of Civil Procedure were not deemed "groundless," so A.R.S. 12-341.01(C) was not applied. However, Hohn's appeal issues pertained to attorney's fees under A.R.S. 12-341.01(A) and A.R.S. 22-201(F), making it appropriate to award fees for the appeal. The court decided to grant attorney's fees to Boltz and Odegaard, which will be determined according to rule 21 of the Arizona Rules of Civil Appellate Procedure. 

Notes clarify that federal case conflicts regarding rule 68 have been resolved, affirming that attorney's fees are not considered costs under Arizona law. Hohn's offer of judgment does not affect this analysis, as it only pertains to his complaint, not his counterclaim.