Hunt Inv. Co. v. Eliot, CA-CIV

• Decision Date: 01 September 1987
• Docket Number: CA-CIV
• Citation: Hunt Inv. Co. v. Eliot, 742 P.2d 858, 154 Ariz. 357 (Ariz. App. 1987)
• Parties: HUNT INVESTMENT COMPANY, Plaintiff-Appellant, Cross Appellee, v. Bradfield F. ELIOT and Janet Eliot, husband and wife, Defendants-Appellees, Cross Appellants. 19052.
• Court: Arizona Court of Appeals

Page 858

742 P.2d 858

154 Ariz. 357

HUNT INVESTMENT COMPANY, Plaintiff-Appellant, Cross Appellee, v.Bradfield F. ELIOT and Janet Eliot, husband and wife, Defendants-Appellees, Cross Appellants.

1 CA-CIV 9052.

Court of Appeals of Arizona Division 1, Department A.

Sept. 1, 1987.

[154 Ariz. 358] Jack H. Simon, Mesa, for plaintiff-appellant/cross appellee.

Teilborg, Sanders & Parks, P.C. by Richard B. Sanders and Coni Rae Good, Phoenix, for defendants-appellees/cross appellants.

OPINION

GREER, Judge.

This appeal and cross-appeal raise questions concerning the award of costs and reasonable attorney's fees to the plaintiff in a tax lien foreclosure action pursuant to A.R.S. § 42-454.The issues raised on appeal are:

(1) Whether reimbursement of costs incurred by the plaintiff is limited to "taxable costs," as set forth in A.R.S. § 12-322, and

(2) Whether the trial court abused its discretion by reducing the amount of attorney's fees requested by plaintiff.

The sole issue raised in the cross-appeal is whether the plaintiff was acting as his own counsel, therefore barring his right to any attorney's fees.The trial court awarded the plaintiff attorney's fees and costs.We affirm the trial court.

FACTS

On or about February 19, 1980, plaintiff-appellantHunt Investment Company(Hunt) purchased a residence at a tax sale from the Maricopa County Treasurer, for delinquent 1978 taxes of $489.62.Five years later, Hunt filed suit to foreclose the property owner's right to redeem the property pursuant to A.R.S. § 42-454.After being personally served, property owners Bradfield F. and Janet Eliot redeemed the property.The Eliots subsequently filed an answer to the complaint.Hunt thereafter moved for an award of its reasonable attorney's fees and costs, as permitted by A.R.S. § 42-454.It requested $2,040.00 in attorney's fees and $190.58 for costs.

After extensive discovery, the Eliots filed a response to Hunt's motion opposing the requested amount of attorney's fees and costs.The grounds for their opposition to the attorney's fees were:

(1) the claimed fees included time spent reviewing documents on tax parcels and property interests other than the property at issue,

(2) the request included time spent conducting a records review with the county assessor's and county recorder's offices for the names and addresses of defendants which was contrary to the customary practice among attorneys, who generally obtain and rely upon title research reports and litigation guarantees prepared by title companies, which are less expensive,

(3) fees were claimed for communications to and from Transamerica Title resulting from Hunt's counsel's failure to communicate necessary information or his provision of erroneous information,

(4) the fees included an unnecessary redemption check which was made after suit was filed and appellant's counsel had been informed that a redemption would be made, and

(5) the request included fees for Hunt's response and oral argument for attorney's fees and costs in support of his application.

The Eliots also opposed the award of any attorney's fees because they claimed that Hunt in essence represented himself.Hunt Investment Company is an Arizona general partnership consisting of two general partners.One partner is Jack Simon, Hunt's attorney, and the other partner is the Ina P. Hunt Trust.Jack Simon is the trustee for the trust, with the ultimate right to distribute all trust assets to himself, upon the death of certain still-living beneficiaries.

The Eliots opposed the amount of costs claimed by Hunt because not all of them were taxable costs provided by A.R.S. §§ 12-332 and -333.Hunt had sought reimbursement for postage and non-certified copying charges, neither of which are allowed under those sections.The Eliots requested that the costs be reduced by $28.64.

The trial court ultimately awarded Hunt attorney's fees of $400 and $251.94 in costs.The court, in effect, awarded only the taxable costs as authorized by A.R.S. § 12-332, thereby reducing the amount of costs requested by $60.58.The court expressly held that Hunt's counsel was not representing himself.Hence, an attorney-client relationship existed, and attorney's fees could be awarded under A.R.S. § 42-454.

Hunt moved for a new trial on the basis that it was improper for the trial court to reduce the amount of attorney's fees requested and that all costs, rather than just taxable costs, should be awarded.The motion for new trial was denied on March 5, 1986.Hunt filed a timely appeal from the denial of its motion for new trial and the Eliots filed a cross-appeal on the issue of whether attorney's fees could be awarded at all.

COSTS

Arizona Revised Statutes § 42-454 provides in pertinent part:

At any time prior to entry of judgment foreclosing the right of redemption any person entitled to redeem under this article may redeem as in other cases, notwithstanding that an action has been commenced.However, if redemption is made by any person who has been served personally or by publication in the action, judgment shall be entered in favor of the plaintiff against such person for the costs incurred by the plaintiff, together with a reasonable attorney's fee to be determined by the court....(emphasis added).

Hunt argues that the trial court's failure to award all its requested costs was contrary to the law and public policy.It points out that § 42-454 was intended to afford property owners a last opportunity to recover their property.The intent of the statute was also to encourage people to buy properties at tax sales by ensuring that if they do make a purchase which results in a redemption, they will be made whole by recovery of all their costs and attorney's fees.In addition, because of the governmental necessity of obtaining sufficient tax funds to perform necessary functions, the public policy of Arizona should be to encourage, rather than discourage, tax sale purchases of property.Therefore, the statute must be construed in a manner so as to encourage people to make such purchases.

Hunt cites several New Jersey cases which have addressed the public policy concerning tax sales and tax sale foreclosures.In Wiltsie v. Belenski, 114 N.J. Eq. 1, 168 A. 63(N.J.Ch.1933), the court held that attorney's fees should be awarded in tax sale foreclosure suits, despite the fact that the applicable statute did not expressly provide for attorney's fees.The court reasoned:

If complainants in these cases be not allowed a reasonable counsel fee, the buying at tax sales will be discouraged.Persons will not bid at tax sales if they believe that such transactions will, or may, result in their being considerably out of pocket.If purchase at tax sales is discouraged, municipalities will be thus deprived of the opportunity to collect their taxes, and such collection is obviously a public necessity.

168 A. at 63.See alsoLonsk v. Pennefather, 168 N.J.Super. 178, 402 A.2d 259(App.Div.1979);Township of Long Beach v. Daniel B. Frazier Co., 10 N.J.Misc. 918, 161 A. 677(N.J.Ch.1932).None of these cases have been followed, or even cited, by any other jurisdiction.

The Arizona Supreme Court addressed the question of recovery of attorney's fees and costs under § 73-834,Arizona Code 1939, the predecessor of A.R.S. § 42-454, in Southwest Metals Co. v. Snedaker, 59 Ariz. 374, 129 P.2d 314(1942).At issue in that case was whether the trial court abused its discretion in refusing to set aside a judgment clearing title in favor of the plaintiff, rather than affording the defendant his right to redeem the property in accordance with the statute.The court noted, in dicta, that "[i]f redemption is made, plaintiff will receive all that he has expended ...,"59 Ariz. at 391, 129 P.2d at 321(emphasis added), thus implying a plaintiff would receive reimbursement for all his costs in the event of a redemption.See generally19 Arizona Bar Journal 6, Goodman, Attorney's Fees in the Tax Lien Foreclosure Action: When Are They Awardable?, p. 6(1984).

Eliot argues that awardable costs are restricted to those set forth in A.R.S. §§ 12-332 and -333.Taxable costs authorized by § 12-332 are witness and officers fees, deposition costs, referees' compensation, cost of certified copies of papers or records, bond costs and costs incurred pursuant to court order or by agreement of the parties.Section 12-333 specifically disallows the cost of copying paper not required by law.Pursuant to these sections, the trial court denied Hunt reimbursement for postage and non-certified copies of papers, but allowed the types of costs specified in § 12-332.

This court has stated that "[u]nless provided for by statute, expenditures made by parties in civil proceedings are not recoverable as costs."Sweis v. Chatwin, 120 Ariz. 249, 251, 585 P.2d 269, 271(App.1978);Fowler v. Great American Ins. Co., 124 Ariz. 111, 114, 602 P.2d 492, 495(App.1979).Arizona Revised Statutes § 42-454 does not specify the types of costs which are allowed, and costs are not defined anywhere within Article 8 of Title 42.Arizona Revised Statutes § 12-332 specifically concerns costs in superior court, the court in which the proceedings of this case occurred.Different statutes dealing with the same subject matter, in this case the reimbursement of costs in superior court, should be construed together.City of Scottsdale v. McDowell Mountain Irrigation and Drainage Dist., 107 Ariz. 117, 121, 483 P.2d 532, 536(1971).We therefore conclude that costs under § 42-454 are limited by A.R.S. §§ 12-332 and -333.

We are not unmindful of the public purpose behind § 42-454, and the merits of awarding all costs rather than those delineated by statute.E.g., Southwest Metals Co. v. Snedaker, 59 Ariz. 374, 129 P.2d 314(1942).The legislature has determined, however, what costs are recoverable.It is not the judiciary's place to expand the types of recoverable costs in the absence of...