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Roberts v. Kino Community Hospital
Citations: 159 Ariz. 333; 767 P.2d 56; 24 Ariz. Adv. Rep. 30; 1988 Ariz. App. LEXIS 377Docket: No. 2 CA-CV 88-0174
Court: Court of Appeals of Arizona; December 29, 1988; Arizona; State Appellate Court
Judith Roberts appeals a judgment that awarded attorney’s fees of $3,014.50 to Pharmacia, Inc. under A.R.S. 12-349(C). The appeal raises three issues: 1) whether the court erred in awarding attorney’s fees based on A.R.S. 12-349(C); 2) the reasonableness of the awarded amount; and 3) the recoverability of attorney's fees in a non-contract action if A.R.S. 12-349(C) does not apply. Roberts was hospitalized on December 18, 1986, for chemotherapy, during which she suffered tissue death in her left breast due to a defective product and improper device management, leading to surgery on February 5, 1987. She filed suit on June 22, 1987, against Davol, Inc., C.R. Bard, Inc., and other unnamed corporations. The first amended complaint, filed July 16, 1987, included Pharmacia, alleging it might be the manufacturer and claiming negligence in transporting the device. Pharmacia moved to dismiss the case on October 21, 1987, asserting lack of jurisdiction and that the action was groundless, supported by affidavits indicating it was not involved with the device. Despite Roberts initiating discovery on October 29 to verify Pharmacia's involvement, by December 8, 1987, it was confirmed that Pharmacia was neither the manufacturer nor distributor. Roberts offered to dismiss the case on December 10 and 11, but the motion to dismiss was heard on December 14, 1987. The court granted Pharmacia's motion, awarding costs and attorney’s fees, reasoning that Roberts' claim lacked substantial justification after November 6, 1987, and her dismissal offer was unreasonably delayed. Roberts objected to the judgment form, but the court overruled her objection. Attorney’s fees can only be awarded by statute, specifically under A.R.S. 12-349, which allows for such awards if a party brings or defends a claim without substantial justification. A.R.S. 12-349(C) provides an exception for awards if a claim is voluntarily dismissed within a reasonable time after the party knew or should have known the claim lacked substantial justification. Roberts argued that her telephonic offer to voluntarily dismiss on December 10 was made within a reasonable time, following her realization that Pharmacia should not be a defendant. Roberts contended that her claim against Pharmacia was justified until she received interrogatory answers on December 8, which confirmed Pharmacia’s non-involvement. She asserted that her belief was reasonable given Pharmacia's reputation and the complexity of identifying the device’s manufacturer. Her dismissal attempt on December 10 was deemed timely and justified based on the facts. The court found that the claim was not without substantial justification until after that date. The court concluded that it was improper to award attorney’s fees under A.R.S. 12-349, as Roberts' claim was justified until she received the relevant information. Consequently, the issue of the reasonableness of fees awarded was not addressed because the initial award was found improper. Roberts was awarded costs for the appeal, but each party would bear its own attorney’s fees. The decision was reversed, with judges Livermore and Howard concurring.