Moses v. Phelps Dodge Corp., Civ. 92-143-TUC-JFB (WDB).

• Decision Date: 21 June 1993
• Docket Number: No. Civ. 92-143-TUC-JFB (WDB).,Civ. 92-143-TUC-JFB (WDB).
• Citation: 826 F. Supp. 1234
• Parties: Dok Sin MOSES, a Married Woman, Plaintiff, v. PHELPS DODGE CORPORATION, a Foreign Corporation, et al., Defendants.
• Court: U.S. District Court — District of Arizona

826 F. Supp. 1234

Dok Sin MOSES, a Married Woman, Plaintiff, v. PHELPS DODGE CORPORATION, a Foreign Corporation, et al., Defendants.

No. Civ. 92-143-TUC-JFB (WDB).

United States District Court, D. Arizona.

June 21, 1993.

Chris J. Kimminau, Tucson, AZ, for plaintiff.

Nathan R. Niemuth and Michael D. Moberly, Phoenix, AZ, for defendants.

MEMORANDUM & ORDER

BATTIN, Senior District Judge.

Pending before Court is Defendants' Petition for Award of Attorney's Fees. For the reasons stated below, the Petition is granted, in the amount set forth below.

Plaintiff filed this case contending that she was wrongfully terminated from her job in breach of her employment contract and in violation of both Arizona state law and Title VII of the Civil Rights Act of 1964. On March 4, 1993, the Court granted summary judgment in favor of Defendant, based upon a finding that most of Plaintiff's claims were barred by the applicable statutes of limitation, and that Plaintiff had failed to establish duress sufficient to equitably toll the running of the statutes. 818 F.Supp. 1287. The Court also found that Plaintiff's breach of contract claim was precluded by her failure to exhaust the grievance mechanisms set forth in the Employee Handbook governing her employment. See Mem. and Ord. of March 4, 1993. Thus, Defendant was the prevailing party in this litigation, and as such seeks an award of attorney's fees in the amount of $24,120.50.

First, Defendant seeks an award of attorney's fees under 42 U.S.C. § 2000e-5(k), which provides for a discretionary award of attorney's fees to a prevailing party in an action under Title VII, and under A.R.S. § 41-1481.J, which provides for an award of fees to a prevailing party in an action under the Arizona Civil Rights Act.

It is well established that an award of fees to a prevailing defendant under § 2000e-5(k) is appropriate only upon a finding that the action was "frivolous, unreasonable, or without foundation, even though not brought in subjective bad faith." Thomas v. Bible, 983 F.2d 152, 155 (9th Cir.1993) (quoting Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 421, 98 S.Ct. 694, 700, 54 L.Ed.2d 648 (1978)). The federal policy disfavoring fee awards to prevailing defendants under Title VII applies equally to an award of fees under A.R.S. § 41-1481.J. See Sees v. KTUC, Inc., 148 Ariz. 366, 714 P.2d 859, 862 (App.1985). In this case, the Court finds that Plaintiff's action was not "frivolous, unreasonable or without foundation". Defendant is therefore not entitled to an award of fees under either the federal or state civil rights statutory scheme.

Next, Defendant seeks an award of attorney's fees pursuant to A.R.S. § 12-341.01.A, which provides for a discretionary award of attorney's fees to the successful party in "any contested action arising out of a contract...." Plaintiff argues that the Christiansburg standard (limiting an award of fees to a prevailing defendant to those cases where the action was "frivolous, unreasonable, or without foundation") applies to a request for fees under A.R.S. § 12-341.01, in the employment context, and that Defendant's request for fees under that section should be denied as well. Defendant disagrees. Both parties rely upon the same case, Mullins v. Southern Pacific Transportation Co., ___ Ariz. ___, ___, 851 P.2d 839, 842 (App.1992), in support of their respective positions.

After a careful reading of Mullins and of Sees, the Court concludes that the federal policies limiting an award of fees under § 2000e-(5)(k) and A.R.S. § 41-1481.J do not apply to an award of fees to a prevailing defendant under § 12-341.01.A. Nothing in the factual background or language of those cases compels that conclusion. To the contrary, "A.R.S. § 12-341.01.A is remedial in nature and such relief is equally available to those who successfully defend an action as to those who successfully seek affirmative relief." Schwartz v. Farmers Ins. Co. of Arizona, 166 Ariz. 33, 800 P.2d 20 (App. 1990). Thus, to the extent that a claim in an employment case arises out of a contract and not out of federal or state civil rights law, it should be treated as any other contract claim, and attorney fees thereunder awarded pursuant to the standards generally applicable to such discretionary determinations.

In Associated Indem. Corp. v. Warner, 143 Ariz. 567, 694 P.2d 1181 (1985), the Arizona Supreme Court set forth the factors to be considered in determining whether attorney's fees should be awarded under § 12-341.01. Those factors include:

1. the merits of the claim or defense presented by the unsuccessful party;

2. whether the litigation could have been avoided or settled and the successful party's efforts were completely superfluous in achieving the result;

3. whether assessing fees against the unsuccessful party would cause an extreme hardship;

4. whether the successful party prevailed with respect to all of the relief sought;

5. the novelty of the legal question presented, and whether the claim or defense had previously been adjudicated in this jurisdiction;

6. whether the award in that particular case would discourage other parties with tenable claims or defenses from litigating or defending legitimate contract issues for fear of incurring liability for substantial amounts of attorney's fees.

Id. at 570, 694 P.2d at 1184.

Applying those standards to this case, the Court first notes that of the eight causes of action asserted by Plaintiff, only Count IV arose out of contract. The legal question presented by the contract claim was not particularly complex or novel, and Defendant prevailed under existing Arizona case law which indicated that the handbook provisions in question were contractual in nature, and that Plaintiff was bound by her consent to follow the exclusive remedies afforded...