Trantor v. Fredrikson

• Decision Date: 18 February 1993
• Docket Number: No. 1,CA-CV,1
• Citation: 176 Ariz. 389,861 P.2d 674
• Parties: Margie P. TRANTOR, Plaintiff/Appellant, Leighton P. Clark, Appellant, v. Glen FREDRIKSON and Jane Doe Fredrikson, his wife, Defendants/Appellees. 91-0179.
• Court: Arizona Court of Appeals

Page 674

861 P.2d 674

176 Ariz. 389

Margie P. TRANTOR, Plaintiff/Appellant, Leighton P. Clark, Appellant, v. Glen FREDRIKSON and Jane Doe Fredrikson, his wife, Defendants/Appellees.

No. 1 CA-CV 91-0179.

Court of Appeals of Arizona,

Division 1, Department C.

Feb. 18, 1993.

Review Granted Oct. 19, 1993.

[176 Ariz. 390] Leighton P. Clark, Phoenix, for appellants.

Ayers & Brown, P.C. by Thomas G. Luikens, Phoenix, for defendants/appellees.

OPINION

GERBER, Judge.

This is an appeal from an award of attorney's fees entered against appellant Margie Trantor (Trantor) and her attorney, Leighton Clark (Clark), in favor of appellees Glen and Jane Doe Fredrikson (the Fredriksons). Fees were awarded after the trial court granted summary judgment in favor of the Fredriksons. We conclude that the trial court's award of attorney's fees should be reversed.

FACTS AND PROCEDURAL HISTORY

Trantor, an employee of AMFAC Electrical Supply (AMFAC), sued the Fredriksons for negligence after she sustained injuries by falling through an office ceiling in a building leased by AMFAC from the Fredriksons. Trantor alleged in her complaint that the storage structure above the ceiling from which she fell was dangerous, that the Fredriksons either knew or should have known of the existence of the defective structure, that it was being used by Trantor's employer, and that the Fredriksons therefore owed Trantor a duty to take reasonable precautions to prevent an injury from occurring.

Shortly after answering the complaint, the Fredriksons filed a motion for summary judgment arguing that, because the structure from which Trantor fell had been constructed by Trantor's employer after the commencement of the lease and the Fredriksons had no knowledge of the structure, they owed no duty of care towards Trantor under Restatement of Torts (2d) § 355 (1965). Trantor elected not to oppose the motion for summary judgment. Judgment was thereafter granted in favor of the Fredriksons.

The Fredriksons then moved for attorney's fees under Ariz.Rev.Stat.Ann. ("A.R.S.") §§ 12-341.01(A), 12-341.01(C), and 12-349. The trial judge subsequently awarded the Fredriksons attorney's fees in the amount of $5,500.00 against Trantor and Clark jointly, without making any findings of fact or setting forth any statutory basis for the award. After the trial judge granted the fees but before final judgment was entered, Trantor filed a motion for reconsideration in which she argued that the award of fees was inappropriate because her claim was not groundless, was made in good faith, and did not constitute harassment. This motion was denied. Trantor and Clark then brought this appeal from the judgment.

DISCUSSION

Trantor and Clark argue on appeal that the trial court's award of attorney's fees in favor of the Fredriksons should be reversed because the trial court made no findings of fact or conclusions of law as required by A.R.S. §§ 12-341.01(C) and 12-350. Although the Fredriksons moved for attorney's fees under A.R.S. §§ 12-341.01(A), 12-341.01(C), and 12-349, the trial judge did not identify which statute justified granting the fees. We must assume that the basis for the award was either A.R.S. §§ 12-341.01(C) or 12-349 because there was no contract involved. The Fredriksons concede that A.R.S. § 12-341.01(A) does not apply; they did not discuss that statute as a basis for the award in their briefs.

A.R.S. § 12-341.01(C) provides that the court shall award attorney's fees in an action "upon clear and convincing evidence that the claim or defense constitutes harassment, is groundless and not made in good faith." A.R.S. § 12-349 similarly states that the court shall assess attorney's fees against an attorney or party if the attorney or party "[b]rings or defends a claim without substantial justification" or "[b]rings or defends a claim solely or primarily for delay or harassment." A.R.S. § 12-349 further provides that "without substantial justification" means that "the claim or defense constitutes harassment, is groundless and is not made in good faith." A.R.S. § 12-350 provides that the court shall set forth the specific reasons for the award in granting attorney's fees pursuant to A.R.S. § 12-349.

The Arizona Supreme Court recently held in State v. Richey, 160 Ariz. 564, 774 P.2d 1354 (1989), that a trial court must make appropriate findings of fact and conclusions of law in awarding attorney's fees under either A.R.S. §§ 12-341.01(C) or 12-349:

Because [A.R.S. § 12-341.01(C) ] specifically requires a higher burden--"clear and convincing evidence"--before a trial court can determine that a claim or defense constitutes harassment, is groundless and not made in good faith, the trial court must make appropriate findings of fact and conclusions of law to enable a party required to pay attorneys' fees to seek appellate review....

....

We also note, by way of comparison, that A.R.S. § 12-350 requires the trial court to "set forth the specific reasons" for a fee award made pursuant to § 12-349, which permits fee awards when claims are brought "without substantial justification" or "primarily for delay or harassment." ... Because the contexts in which § 12-341.01(C) applies may often overlap those in which § 12-349 applies, we hold that requiring a trial court to set forth specific findings in the former as well as in the latter contexts is appropriate.

(Emphasis added.) 160 Ariz. at 565, 774 P.2d at 1355.

Because the trial court failed to make these required findings, the supreme court vacated the trial court's award of attorney's fees to the plaintiffs.

In the instant case, the trial judge made no findings of fact or conclusions of law in either her minute entry or the formal judgment awarding fees to the Fredriksons. Because we cannot determine on what factual basis the trial court awarded fees, the award must be vacated under Richey as well as under St. Joseph's Hosp. v. Hansgen, 174 Ariz. 228, 848 P.2d 313, (App.1992) (where party's request for attorney's fees under A.R.S. § 12-349 and Ariz.R.Civ.P. 11 and 59 was granted but trial court made no findings and gave no explanation for award of fees, fees could not be upheld under A.R.S. § 12-349). See also Wells Fargo Credit Corp. v. Smith, 166 Ariz. 489, 803 P.2d 900 (App.1990) (court reverses Rule 11 sanctions because trial court did not make specific findings justifying its conclusion that party's claims were frivolous, relying on Richey, and because existence of disputed facts at time of summary judgment hearing indicated that party's claim was "well-grounded").

The Fredriksons argue that, because Trantor did not object to the trial court's failure to make specific findings, the issue should be considered waived. In Hamm v. Y & M Enterprises, Inc., 157 Ariz. 336, 757 P.2d 612 (App.1988), Division Two of this court held that an argument regarding the lack of findings not made before the trial court would not be considered on appeal. See also Callanan v. Sun Lakes Homeowners' Ass'n # 1, 134 Ariz. 332, 337, 656 P.2d 621, 626 (App.1982) (in an appeal of award of attorney's fees under A.R.S. § 10-049(B), court held that, even if that statute required trial court to set forth in judgment express finding concerning reasonable cause, plaintiff waived right to urge failure to do so as a basis for reversal where plaintiff failed to object to form of judgment in trial court); Bayless Investment & Trading Company v. Bekins Moving and Storage Co., 26 Ariz.App. 265, 547 P.2d 1065 (1976) (while failure to object to lack of required findings under Rule 52(a), Arizona Rules of Civil Procedure, did not deprive appellants of right to question on appeal sufficiency of evidence to support judgment, appellants could not argue on appeal that mere lack of finding was grounds for reversal).

Although Hamm supports the Fredriksons' waiver argument, the supreme court decided Richey after Hamm, holding unqualifiedly that A.R.S. §§ 12-341.01(C) and 12-349 require that the trial court set forth specific findings, the absence of which requires vacating the award. The requirement that a trial court make findings when awarding fees under A.R.S. §§ 12-341.01(C) or 12-349, as well as under Rule 11, may not be waived. These statutes appear alike in requiring findings to justify the assessments even in the absence of a request for them. Such a requirement appears consistent with the punitive nature of the sanctions, as well as with the view that appellate courts should not be put to the task of searching the record for unspecified reasons to support the assessment.

It is true, as the dissent argues, that Richey does not discuss waiver. Neither does it suggest that a trial court objection was made. The lack of an objection appears immaterial to the central point that a statement of reasons is essential for appellate review. There can be no meaningful review of a trial court's punitive award in the absence of the trial court's reasons, the very failure prompting reversal in Richey.

Furthermore, A.R.S. § 12-341.01(C) and § 12-349 are not judicial creations but rather legislative mandates to the court that compel it to impose penalties in those situations. As such, these provisions are closely akin to contempt. The party who suffers such a penalty needs to have fair notice of the conduct prompting the penalty. Giving such notice is inherent in the punitive nature of these statutes, in contrast to merely compensatory attorney fees or Rule 52 findings of fact in routine civil cases. Such a duty inheres in the trial court regardless of any request from counsel.

CONCLUSION

We hold that because of the absence of findings, attorney's fees were improperly assessed against Trantor and Clark. The trial court's attorney's fee award is vacated.

TOCI, J., concurs.

McGREGOR, Judge, dissenting.

The majority's decision to vacate the trial court's award of attorney's fees results from two conclusions. First, the majority concludes that "a trial court...