Talking Rock Land, LLC v. Inscription Canyon Ranch, LP – 4/9/2024

June 21, 2024

The Arizona Court of Appeals, Division One holds that, when reducing a fee award, a trial court need not make explicit findings about which individual fee entries are excessive or improperly incurred.

Two companies, “TRL” and “ICR,” disputed the terms of their contractual relationship in a declaratory judgment action in superior court. The superior court granted summary judgment in favor of ICR and held that it was entitled to its attorneys’ fees and costs under the terms of the parties’ contract and A.R.S. § 12-341.01. ICR filed a request and a supplemental request for its fees and costs. After full briefing, the court granted ICR a reduced fee award, noting that some entries lacked requisite detail, some fees sought were for billing on other matters, and that ICR’s fees were disproportional to TRL’s fees, which supported a finding that the fees were clearly excessive and subject to reduction. TRL appealed the summary judgment ruling in ICR’s favor and ICR cross-appealed, arguing that the superior court erred in reducing the attorneys’ fees it sought under the contracts.

The court of appeals, in this opinion, addressed only ICR’s cross appeal. In its cross appeal, ICR argued, inter alia, that the superior court abused its discretion by failing to award the entirety of the fee sought in the absence of discrete findings demonstrating which particular fee entries were not properly incurred under McDowell Mountain Ranch Community Association, Inc. v. Simons, 216 Ariz. 266, 270 (App. 2007). The court of appeals rejected ICR’s argument, concluding that McDowell Mountain did not create an express requirement that courts make findings about which specific entries were clearly excessive when reducing the amount requested in a fee award. Rather, so long as the record reflects a reasonable basis for the court’s decision in awarding fees, there is no abuse of discretion.

In addition, the court of appeals rejected ICR’s argument that the superior court abused its discretion by relying on TRL’s disproportionality argument and comparing the parties’ fees. The court of appeals explained that, when determining the reasonableness of a fee, courts consider, inter alia, the fees customarily charged in the locality. Because TRL’s fees were an example of fees charged in the locality, the superior court did not abuse its discretion by comparing the attorneys’ fees both parties incurred when assessing whether ICR’s fees were excessive.

Judge Thumma authored the opinion, which Judges Williams and McMurdie joined.

Posted by: BriAnne Illich Meeds