Lisa v. Strom

• Decision Date: 28 February 1995
• Docket Number: No. 1,CA-CV,1
• Citation: Lisa v. Strom, 183 Ariz. 415, 904 P.2d 1239 (Ariz. App. 1995)
• Parties: Donald J. LISA and Isabelle O. Lisa, Plaintiffs-Appellants, v. Jack STROM and Sara Strom, Defendants-Appellees. 93-0151.
• Court: Arizona Court of Appeals

Page 1239

904 P.2d 1239

183 Ariz. 415

Donald J. LISA and Isabelle O. Lisa, Plaintiffs-Appellants, v.Jack STROM and Sara Strom, Defendants-Appellees.

No. 1 CA-CV 93-0151.

Court of Appeals of Arizona Division 1, Department C.

Feb. 28, 1995.

Review Denied Oct. 24, 1995.

[183 Ariz. 416] Lisa & Associates by Donald J. Lisa, Steven Lin, Scottsdale, for appellants.

Jack Strom and Sara Strom, in pro. per.

OPINION

WEISBERG, Judge.

The primary issue in this appeal is whether an attorney-litigant and his spouse may recover attorney's fees when they have been represented by the attorney-litigant and his wholly-owned law firm.We hold that, notwithstanding the existence of an attorney-client relationship, the attorney-litigant and spouse are not entitled to an award of attorney's fees absent a genuine financial obligation on their part to pay such fees.

FACTS AND PROCEDURAL HISTORY

Plaintiffs Donald J. and Isabelle O. Lisa("the Lisas") rented a residence from defendants Jack and Sara Strom("the Stroms"), beginning in January, 1988.The lease provided for a security deposit of $2,850.00.At the expiration of the leasehold term, the Lisas decided not to renew.After moving out, the Lisas had the home professionally cleaned.They asked the Stroms to keep $100.00 of the security deposit for the cost to repair some minor damage to the bedroom ceiling and to refund the balance.The Stroms instead refunded only $755.66, withholding $2094.34 for alleged repair costs.

The Lisas sued the Stroms for wrongful failure to return the security deposit under Ariz.Rev.Stat.Ann.("A.R.S.")section 33-1321.Louis Hoffman("Hoffman"), an associate in the law firm of Lisa & Lisa, was the attorney of record.Shortly thereafter, Lisa & Lisa disbanded, Hoffman left Lisa's employ, and his representation of the Lisas ceased.Mr. Lisa and Lisa & Associates were then named as counsel of record.Following mandatory arbitration, the arbitrator found in favor of the Lisas.The Stroms then appealed for a trial de novo.

A bench trial was held, with Donald Lisa as the attorney of record, representing himself and his spouse, with assistance from Lisa & Associates attorney Steven Lin("Lin").After trial, the court entered detailed findings of fact and conclusions of law, including the following:

2.The lease provided that plaintiffs pay a security deposit of $2,850.00, which sum was paid by plaintiffs;

3.The residence was vacated timely, and the keys were returned to the landlord.In addition, several witnesses testified that the property was left in an exceptionally clean condition.The carpeting had been professionally cleaned by plaintiffs immediately before leaving;

4.The defendants Strom on March 11, 1991, sent an itemization of expenses to plaintiffs which satisfied the requirements of A.R.S. § 13-1321(c).A check in the amount for [sic] $755.66 accompanied the itemized statement as a partial refund of the security deposit;

5.The defendants Strom retained the sum of $2,094.34 from the security deposit for alleged damages to the residence, as set forth:

$75.34 -- for changing of the locks

$430.00 -- house painting

$1,389.00 -- replacement of front door because of damage

$200.00 -- ceiling repair in the master bedroom;

6.The Court finds the defendants wrongfully withheld funds from the security deposit and that such withholding was wilful; that defendant should have returned $2,750.00 to plaintiffs; that only $100.00 for ceiling repairs was reasonable; that the withholding of $75.34 for lock replacement was unwarranted, especially when the lease itself limited such replacement to $25.00.No credible evidence was introduced by defendants that the residence needed painting or was ever painted.Furthermore, no evidence was ever introduced showing damage to the front door.The plaintiffs' videotape evidence showed beyond any question that the only minor "damage" to the doors were two tiny nail holes used for christmas [sic] wreaths.Even, at the time of these proceedings, the front door has not been replaced nor repaired.

7.Defendants Strom own a number of homes in the valley, at least nine properties.Defendants Strom have also been involved in numerous law suits regarding real estate.The defendantJack Strom is knowledgeable in real estate matters, especially the landlord tenant area of the law;

8.The Court determines that the defendant wrongfully withheld the sum of $1,994.34 from plaintiffs in violation of A.R.S. § 33-1321(D) and plaintiffs are entitled in an amount twice the amount wrongfully withheld $3,988.68;

9.PlaintiffDonald Lisa is a licensed and actively practicing member of the Arizona State Bar.That he acted as his own attorney throughout the entire course of this litigation.It is undisputed in Arizona that when an attorney represents himself in a legal proceeding, he is not entitled to attorney's fees.See, Connor v. Cal-Az Properties, Inc., 137 Ariz. 53, 56, 668 P.2d 896, 899( [App.]1983);Hunt Inv. Co. v. Eliot, 154 Ariz. 357, 742 P.2d 858( [App.]1987).

10.The Court finds that the defendantJack Strom has defended this case without substantial justification and in bad faith.That he engaged in the abuse of the discovery process and that his defense was groundless in violation of A.R.S. §§ 12-349and12-350; accordingly,

IT IS ORDERED granting judgment in favor of plaintiffs and against defendants in the sum of $2,000.00, as an assessment for violating A.R.S. §§ 12-349and12-350.

IT IS FURTHER ORDERED that plaintiffs are entitled to the sum of $3,988.68, which is twice the amount of $1,994.34 wrongfully withheld by defendants, pursuant to A.R.S. § 33-1321(D).

IT IS FURTHER ORDERED denying plaintiffs' request for attorney's fees.

The Lisas' motion to reconsider was denied.Following the court's entry of final judgment, the Lisas appealed.

ISSUES

We address the following issues:¹

1.Did the trial court err in denying attorney's fees under the lease and/or under A.R.S. section 12-349?

2.Did the trial court err in not awarding punitive damages to the Lisas?

3.Did the trial court err in not awarding treble damages for the wrongful withholding of the security deposit?

DISCUSSION

I.Attorney's Fees

The Lisas requested attorney's fees pursuant to the lease, ² which provided:

In the event of judicial action, the prevailing party shall be entitled to reasonable attorney's fees and court costs from the losing party as determined by the Court as part of any judgment rendered in such action.

They also requested fees under A.R.S. section 12-349.Although the trial court found the Stroms had violated A.R.S. section 12-349, it concluded that the Lisas were not entitled to an award of attorney's fees on either basis because Mr. Lisa had "acted as his own attorney throughout the entire course of this litigation."In doing so, the trial court relied upon our decisions in Connor v. Cal-Az Properties, Inc., 137 Ariz. 53, 668 P.2d 896(App.1983), andHunt Inv. Co. v. Eliot, 154 Ariz. 357, 742 P.2d 858(App.1987).

The Lisas argue on appeal that the trial court's finding was wrong because Donald Lisa was representing Isabelle Lisa in addition to himself and because they were also represented by other attorneys who were associates in his law firm.

In Connor, the trial court had granted the plaintiffs, three attorneys who represented themselves in the action, an award of attorney's fees pursuant to a clause in the real estate contract.On appeal, we held that a licensed attorney who represents himself in litigation is not entitled to an award of attorney's fees because of the lack of an attorney-client relationship:

In Arizona, one who acts only for himself in legal matters is not considered to be engaged in the practice of law.State ex rel. Frohmiller v. Hendrix, 59 Ariz. 184, 190, 124 P.2d 768, 772(1942).Even though the buyers in this case were themselves all attorneys, and carried out tasks ordinarily performed by lawyers, their activities did not constitute the practice of law because they represented themselves.

. . . . .

In our opinion, the presence of an attorney-client relationship is a prerequisite to the recovery of attorneys' fees.The "creation of the relation of attorney and client ... is essential to the right of an attorney to recover compensation for his services rendered."1 S. Speiser, Attorneys' Fees§ 4:1 at 147(1973).

137 Ariz. at 56, 668 P.2d at 899(citations omitted).The Lisas argue that Connor is distinguishable because Donald Lisa did not represent himself only, he also represented Isabelle and the marital community.The Lisas rely upon our decision in Hunt, 154 Ariz. 357, 742 P.2d 858.

In Hunt, the issue was whether an attorney, Simon, who represented himself, another partner and a partnership, was entitled to an award of attorney's fees.We held that in such a case the attorney was engaged in the practice of law and therefore the attorney's fees provision applied.In so holding, we distinguished Connor:

The Connor court stated that "one who acts only for himself is not considered to be engaged in the practice of law."137 Ariz. at 56, 668 P.2d at 899(emphasis added).Thus, the question is whether Simon acted only for himself.In Connor, the three plaintiffs were attorneys who represented themselves in the lawsuit.In this case, however, the plaintiff is a partnership, as opposed to a natural person....[W]e do not believe a partnership can represent itself because it is not a natural person.

154 Ariz. at 362, 742 P.2d at 863.

We noted that, in representing his own half-interest in the partnership, the attorney "would not be considered engaged in the practice of law."Id.However, if he had not been an attorney, he could not have represented either the other one-half partnership interest or the partnership itself.Id.Because Simon was an attorney, he could represent the other partnership interest and the partnership, and this created an attorney-client relationship:

Simon...