Alano Club 12, Inc. v. Hibbs

Decision Date05 August 1986
Docket NumberCA-CIV,No. 1,1
Citation724 P.2d 47,150 Ariz. 428
PartiesALANO CLUB 12, INC., and Alano Boosters Club, Petitioners-Appellees, v. J.E. HIBBS, Director of the Department of Revenue; Gale L. Garriott, Hearing Officer; and ARIZONA DEPARTMENT OF REVENUE, BINGO SECTION, Real Parties in Interest, Respondents-Appellants. 8360.
CourtArizona Court of Appeals
OPINION

EUBANK, Presiding Judge.

Appeal is taken in this case from an award of attorney's fees made to the appellees pursuant to A.R.S. § 12-348 after the superior court determined that the Arizona Department of Revenue had abused its discretion in summarily suspending appellees' bingo licenses. Appellees Alano Club 12, Inc., and Alano Boosters Club had been granted bingo licenses pursuant to A.R.S. § 5-401 et seq. On July 14, 1984, appellees received a summary suspension and notice of proposed revocation of their bingo licenses for failure to meet the statutory net proceeds percentage requirement set forth in A.R.S. § 5-407(B).

On July 24, 1984, a hearing was held before the Department of Revenue on the propriety of the summary suspension. On July 26, 1984, the hearing officer issued a proposed decision finding that the summary suspension was justified pursuant to A.R.S. § 41-1012(C) and A.R.S. § 5-407(B) which allow summary suspension of a license if the public health, safety or welfare requires emergency action.

On July 30, 1984, the law firm of Lee, Theisen & Eagle filed a notice of appearance in the administrative proceedings on behalf of appellees and sought a rehearing which was denied. Appellees' attorney then filed a petition for special action in the trial court to obtain reinstatement of the licenses which was heard by the Honorable Bernard Dougherty on August 9, 1984. Appellants sought to dismiss the special action as being premature because the matter was still pending before the Director of the Department of Revenue. Judge Dougherty granted the motion and dismissed the petition for special action.

On August 13, 1984, the Director of the Department of Revenue approved and adopted the hearing officer's proposed decision. That same date, appellees' attorney filed another special action in superior court to oppose the summary suspension of the bingo licenses which was heard before the Honorable Marilyn A. Riddel on August 15 and 16, 1984. Indicating that the sole issue before the court was whether the public health, safety or welfare imperatively required emergency action permitting the Department to suspend appellees' license without prior warning, notice, or right to be heard, the trial court vacated the order of suspension, finding it to be arbitrary and without basis in the law. The court expressly noted that the decision had no bearing on the merits of whether or not appellees' licenses should be ultimately revoked in a proper proceeding.

The appellants filed a notice of appeal from the trial court's order on August 21, 1984 and a petition for special action to the Arizona Supreme Court to contest the trial court's ruling. On August 29, 1984, the appellees' counsel filed a motion to amend judgment to include an award of attorney's fees. On September 13, 1984, after a new Board of Trustees for appellee Alano Club 12, Inc., had been chosen, appellees voluntarily surrendered their bingo licenses to the Department of Revenue. The appellants then had their petition for special action dismissed and filed a motion to dismiss their appeal. The trial court granted the motion for voluntary dismissal of the appeal indicating that the order was without prejudice to the request for attorney's fees. On February 26, 1985, the trial court considered the request for attorney's fees along with appellants' objections thereto and granted attorney's fees of $10,951.79. Appellants appeal from the attorney's fees award.

The appellees sought attorney's fees in the trial court pursuant to A.R.S. § 12-348(A)(3) which provides as follows:

A. In addition to any costs which are awarded as prescribed by statute, a court shall award fees and other expenses to any party other than this state or a city, town or county which prevails by an adjudication on the merits in any of the following:

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3. A court proceeding to review a state agency decision, pursuant to chapter 7, article 6 of this title, or any other statute authorizing judicial review of agency decisions. [Footnote omitted.]

The appellees requested attorney's fees of $10,951.79 representing the time the law firm of Lee, Theisen & Eagle had spent on the case between July 26, 1984 and September 14, 1984 at $75 per hour, the maximum amount generally allowed by the statute. 1 The legislature's purpose for enacting a statute providing for fees against the state, cities, towns and counties is set forth in the historical note to the statute:

A. The legislature finds that certain individuals, partnerships, corporations and labor or other organizations may be deterred from seeking review of or defending against unreasonable governmental action because of the expense involved in securing the vindication of their rights. The economic deterrents to contesting governmental action are magnified in these cases by the disparity between the resources and expertise of these individuals and their government.

B. The purpose of this section is to reduce the deterrents and the disparity by entitling prevailing parties to recover an award of reasonable attorney fees, expert witness fees and other costs against the state.

A.R.S. § 12-348 by no means authorizes a blanket award of attorney's fees against the state, cities, towns and counties in all proceedings. Attorney's fees are awarded under the statute only for certain types of proceedings enumerated in subsection (A) and only where the other party prevails by an adjudication on the merits. Subsections (B), (D), and (G) of the statute then set forth various limitations, restrictions and qualifications on the award of attorney's fees. Subsection (D)(2) provides in relevant part:

D. The court shall base any award of fees as provided in this section on prevailing market rates for the kind and quality of the services furnished, except that:

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2. The award of attorney fees may not exceed the amount which the prevailing party has paid or has agreed to pay the attorney or a maximum amount of seventy-five dollars per hour.

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Appellants challenged the request for attorney's fees on two grounds. First they argued that the appellees had not prevailed on all the matters for which they claimed fees and therefore that the request for attorney's fees was excessive. Secondly, they sought to challenge the attorney-client relationship between appellees and Lee, Theisen & Eagle both to show that there was no agreement to pay attorney's fees and no payment of attorney's fees as required by subsection (D) and to show that the request for attorney's fees was being made by the attorneys rather than the parties themselves which they argue is not allowed by the statute.

I. WERE ATTORNEY'S FEES PROPERLY AWARDED?

We first consider the issue of whether appellees were entitled to some or all of the attorney's fees they requested even though they were not the prevailing party as required by A.R.S. § 12-348(A). On appeal appellants contend that appellees could not be considered the prevailing party in any of the proceedings in superior court because, even though appellees obtained a favorable order from the trial court on the issue of summary suspension of their licenses, they then voluntarily surrendered the licenses which mooted the appeal from the order which had the effect of granting relief to the appellants. We cannot consider this issue, however, because it was not raised in the trial court. An appellate court will not decide issues which are raised for the first time on appeal. Stratton v. Inspiration Consolidated Copper Co., 140 Ariz. 528, 530, 683 P.2d 327, 329 (App.1984); Cote v. A.J. Bayless Markets, Inc., 128 Ariz. 438, 444, 626 P.2d 602, 608 (App.1981). We find nothing in the record indicating that appellants ever argued in the trial court that appellees should not be considered the successful party in the proceedings before Judge Riddel so as to preclude them from any award of attorney's fees.

However, appellants did argue in the trial court and as an alternative argument on appeal that the appellees should not have been awarded attorney's fees for the special action they brought before Judge Dougherty in which they were not successful. Judge Dougherty dismissed the special action, presumably because administrative remedies had not been exhausted. Appellants argue that appellees are not entitled to attorney's fees for their unsuccessful special action before Judge Dougherty pursuant to the authority of Tanner Companies v. Arizona State Land Department, 142 Ariz. 183, 688 P.2d 1075 (1984).

In Tanner, in which a party had been granted attorney's fees pursuant to A.R.S. § 12-348(A)(5), the fee award contained fees for time spent in taking a special action which was dismissed without any determination on the merits. Division Two of this court ruled that the fees had to be modified because the "[t]he amounts spent or incurred for attorney's fees in the special action cannot be recovered since A.R.S. § 12-348(A)(5) allows an award of attorney's fees in such circumstances only if appellees prevail by an adjudication on the merits." 142 Ariz. at 196, 688 P.2d at 1088.

Appellees' only response to this issue is that they are entitled to all of the fees requested pursuant to Schweiger v. China Doll Restaurant, Inc., 138 Ariz. 183, 673 P.2d 927 (App.1983)...

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11 cases
  • Arnold v. Arizona Dept. of Health Services
    • United States
    • Arizona Supreme Court
    • March 13, 1989
    ...involved, justifies a higher fee. The state argues that this statute requires an actual agreement to pay. Alano Club 12, Inc. v. Hibbs, 150 Ariz. 428, 724 P.2d 47 (App.1986). Here no agreement to pay exists because the Center pursued this matter pro bono. The state asks that if the Center d......
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    ...not the attorney, regardless of what fee arrangement exists between the litigant and her counsel. Alano Club 12, Inc. v. Hibbs, 150 Ariz. 428, 434, 724 P.2d 47, 53 (App.1986). General Motors suggests that Alano Club should control our resolution of this case otherwise, claiming that the cas......
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    ...appeal. See Long v. City of Glendale, 208 Ariz. 319, 330 n.7, ¶ 36, 93 P.3d 519, 530 n.7 (App. 2004); Alano Club 12, Inc. v. Hibbs, 150 Ariz. 428, 434-35, 724 P.2d 47, 53-54 (App. 1986).¶16 Pursuant to the preemption doctrine, federal law supersedes conflicting state law. Defenders of Wildl......
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    ...He did not seek leave to amend his complaint, however. Therefore, we will not address this argument. See Alano Club 12, Inc. v. Hibbs, 150 Ariz. 428, 431, 724 P.2d 47, 50 (App. 1986) ("An appellate court will not decide issues which are raised for the first time on appeal."). 5. We do not c......
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