Crews v. Collins

• Court: Arizona Court of Appeals
• Writing for the Court: HATHAWAY; BIRDSALL, C.J., and HOWARD
• Citation: Crews v. Collins, 680 P.2d 216, 140 Ariz. 80 (Ariz. App. 1984)
• Decision Date: 13 April 1984
• Docket Number: No. 2,CA-CIV,2
• Parties: Bessie L. CREWS, a single woman, Plaintiff/Appellee, v. Billy D. COLLINS and Susan E. Collins, husband and wife, Defendants/Appellants. 5023.

Page 216

680 P.2d 216

140 Ariz. 80

Bessie L. CREWS, a single woman, Plaintiff/Appellee, v. Billy D. COLLINS and Susan E. Collins, husband and wife, Defendants/Appellants.

No. 2 CA-CIV 5023.

Court of Appeals of Arizona Division 2.

April 13, 1984.

Johnston & Grynkewich, by Gary S. Grynkewich, Tucson, for plaintiff/appellee.

William L. Berlat, Tucson, for defendants/appellants.

OPINION

HATHAWAY, Judge.

Defendants/appellants appeal from the final judgment entered May 12, 1983, in this litigation arising out of defendants' default on a promissory note. The amount of attorney's fees awarded plaintiff is challenged on appeal.

After trial by the court, sitting without a jury, plaintiff was awarded judgment in the sum of $25,574.72, the principal sum owing on the promissory note, plus back interest in the sum of $2,045.98. Plaintiff was also awarded judgment for attorney's fees in the sum of $9,000 and costs.

Defendants contend on appeal that the trial court abused its discretion by awarding an amount deemed to be reasonable attorney's fees without sufficient showing as to what reasonable fees would be under the circumstances. Defendants also contend they were not afforded a hearing on the issue.

The promissory note provided:

"If this note is placed in the hands of an attorney for collection we agree to pay a reasonable attorney fee."

Defendants argue that by this provision, the parties contemplated an award of "reasonable" fees and cite Crouch v. Pixler, 83 Ariz. 310, 320 P.2d 943 (1958), for the proposition that where reasonable fees are contractually provided, it is error for the court to fix the amount in the absence of proof establishing what is a reasonable fee. They also acknowledge that aside from the promissory note provision, the court could award fees by virtue of A.R.S. § 12-341.01, which provides:

"A. In any contested action arising out of a contract, express or implied, the court may award the successful party reasonable attorney's fees. This section shall in no manner be construed as altering prohibiting or restricting present or future contracts or statutes that may provide for attorney's fees.

B. The award of reasonable attorney's fees awarded pursuant to subsection A should be made to mitigate the burden of the expense of litigation to establish a just claim or a just defense. It need not equal or relate to the attorney's fees actually paid or contracted, but such award may not exceed the amount paid or agreed to be paid."

In support of plaintiff's demand for fees, plaintiff's attorney submitted an affidavit disclosing that representation of plaintiff was undertaken on a collection or contingency basis and that plaintiff's counsel's fees are to be billed at the rate of one-third of all sums recovered, exclusive of costs. The affidavit recites that in order for plaintiff to be made whole under the arrangement, attorney's fees in the sum of $13,810.35 should be allowed inasmuch as plaintiff should receive $27,620.70 after costs and attorney's fees and since counsel is entitled to "( 1/3) of all sums recovered ...." (emphasis in original) exclusive of costs, the $27,620.70 should be considered two-thirds of the total recovery, which would be $41,431.05. Plaintiff's attorney's affidavit also contained the following:

"6. Should the court determine that attorneys fees should be awarded on some other basis beside a percentage of the amount in question, a hearing should be scheduled by the Court in that affiants have a substantial amount of testimony which should be presented which will tend to prove that the Defendant's [sic] defense of the above captioned action was not made in good faith, that the Plaintiff at all times pertinent to this action attempted to negotiate in good faith with respect to the potential for discounting a principal amount of the promissory note, and that the Plaintiff, at the request of the Defendants delayed seeking relief in this action in an effort to cooperate with the Defendants by awaiting the outcome of a proceeding in the Bankruptcy Court.

7. In the event the Court does not wish to hold a hearing as requested hereinabove, and in the event the Court does not see fit to award attorneys fees based on a contingency fee arrangement as set forth hereinabove, your Affiant believes that the Court can take judicial notice of an appropriate amount as and for attorneys fees based on the amount in question, the complexity of the issues, and the results achieved in this case. As a further consideration, the Court can take judicial notice of its file. In particular, the Court should take judicial notice of the delays which have taken place in this case in the name of performing discovery which said delays have all been occasioned by the...