FLASH v. GREENBERG

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NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES. See Ariz. R. Supreme Court 111(c); ARCAP 28(c); Ariz. R. Crim. P. 31.24 IN THE COURT OF APPEALS STATE OF ARIZONA DIVISION ONE FLASH & THE BOYS LLC, an Arizona limited liability company; ALBERT J. SCHILLINGER, JR., as Trustee of Nationwide Mortgage Plan and Trust, ) ) ) ) ) ) Plaintiffs/Appellants, ) ) v. ) ) GREENBERG TRAURIG, LLP, ) ) Defendant/Appellee. ) ) No. DIVISION ONE FILED: 10/30/2012 RUTH A. WILLINGHAM, CLERK BY: sls 1 CA-CV 11-0704 DEPARTMENT A MEMORANDUM DECISION (Not for Publication Rule 28, Arizona Rules of Civil Appellate Procedure) Appeal from the Superior Court in Maricopa County Cause No. CV2009-010004 The Honorable Eileen S. Willett, Judge APPEAL DISMISSED SPECIAL ACTION JURISIDCTION ACCEPTED; RELIEF GRANTED Jaburg & Wilk PC By Kathi M. Sandweiss Roger L. Cohen Attorneys for Plaintiffs/Appellants Phoenix Greenberg Traurig, LLP By Lawrence J. Rosenfeld Julie R. Barton Mona M. Stone Attorney for Defendant/Appellee Phoenix T I M M E R, Presiding Judge ¶1 Flash & The Boys, LLC, and Albert Schillinger, Jr. (collectively, Flash ) appeal the trial court order awarding attorney s fees and expenses to the law firm of Greenberg Traurig, LLP ( GT ) pursuant to Arizona Rule of Civil Procedure ( Rule ) 37. Because GT is not entitled to an award of fees and expenses for representing its own interests in the lawsuit, we vacate the court s award. BACKGROUND ¶2 In the course of litigating this note-collection case, a dispute arose regarding the accuracy of discovery responses by defendant Brian Lesk and his former counsel, GT. 1 Consequently, plaintiff Flash moved the court to strike Lesk s answer, enter judgment for Flash, and impose monetary and non-monetary sanctions against Lesk and GT pursuant to Rules 37(b)(2)(C), 37(c), and 37(d). Lesk and GT responded separately, and GT filed a cross-motion 37(a)(4)(B) for an award of attorney s to the pursuant fees and motion to Rule expenses incurred in opposing the motions. ¶3 The trial court denied Flash s motions and awarded GT its 1 reasonable attorney s fees After and expenses incurred the challenged discovery responses, GT withdrew representing Lesk with his consent due to a fee dispute. 2 in from defending the motions. 2 After additional briefing and argument regarding authority the court s to award fees, the court reiterated the award, reasoning [i]f a party can be sanctioned for conduct in violation of Rule 37(b), (c), (d) . . . so too should a party be entitled to fees and costs incurred for successfully defending the same alleged conduct deemed by the Court not to have run afoul of Rule 37. After the court entered a signed order awarding fees and expenses to GT, Flash timely filed a notice of appeal. ANALYSIS I. ¶4 Jurisdiction Before considering the merits of this appeal, we must consider our jurisdiction to do so. Corp., 168 Ariz. 301, 304, 812 P.2d Davis v. Cessna Aircraft 1119, 1122 (App. 1991) (noting court of appeals has a duty to review jurisdiction and dismiss an appeal if jurisdiction is lacking). jurisdiction is generally disposing all claims directs of the entry of and limited parties final to reviewing unless judgment Our appellate the upon judgments trial an court express determination that there is no just reason for delay and upon an express direction for the entry of judgment. 2 Ariz. R. Civ. P. The court denied a similar request for fees and costs by Lesk because the merits of the complaint against him remained to be adjudicated. 3 54(b); see Musa v. Adrian, 130 Ariz. 311, 312-13, 636 P.2d 89, 90-91 (1981). The order challenged in this appeal does not contain Rule 54(b) pending against language. Lesk and Because others, we Flash s do claims not have remain appellate jurisdiction, and we therefore dismiss the appeal. ¶5 appeal Nevertheless, we exercise our discretion to treat this as a jurisdiction. petition for special action, and we accept See Lloyd v. State Farm Mut. Auto. Ins. Co., 189 Ariz. 369, 375, 943 P.2d 729, 735 (App. 1996) (noting court of appeals can treat inappropriately initiated appeal as a petition for special action). Flash lacks a plain, speedy, and adequate remedy by appeal as GT is not a party to the underlying lawsuit and may attempt to immediately seek collection of the awarded fees and expenses. II. ¶6 See Ariz. R.P. Spec. Act. 1(a). Fees for self-representation Although the majority of the parties arguments focuses on whether the fee-shifting provisions of Rule 37(a)(4) apply to all motions filed under Rule 37, we need not resolve that dispute. Even assuming Rule 37(a)(4)(B) authorized the court to award fees against Flash as the non-prevailing party on its motions, GT did not incur any attorney s fees and expenses and was therefore not entitled to any reimbursement. 3 3 GT argues Flash waived the self-representation challenge to the fee award by raising it in a disguised motion for 4 ¶7 In order to be reimbursed attorney s fees, a party must have (1) an attorney-client relationship with counsel, and (2) a genuine financial obligation to pay fees and expenses to such counsel. Lisa v. Strom, 183 Ariz. 415, 419, 904 P.2d 1239, 1243 (App. 1995). 4 ¶8 GT does not satisfy either factor. First, because GT represented itself in the Rule 37 proceedings, it could not serve as both attorney and client and thus did not have an attorney-client relationship. Hunt Inv. Co. v. Eliot, 154 Ariz. 357, 362, 742 P.2d 858, 863 (App. 1987) ( It is undisputed in Arizona that one who acts on his own behalf, including an attorney, is not engaged in the practice of law. ); Connor v. Cal-Az Props., Inc., 137 Ariz. 53, 56, 668 P.2d 896, 899 (App. 1983) (to same effect). GT does not dispute reconsideration after the court had granted the cross-motion for fees. We disagree. Flash raised the argument in its objections to the application for fees, GT responded to it, and a hearing was held on this and other objections before the trial court entered the order that is the subject of this special action. Flash sufficiently raised the argument to the trial court. Cf. Evans Withycombe, Inc. v. W. Innovations, Inc., 215 Ariz. 237, 240, ¶ 15, 159 P.3d 547, 550 (App. 2006) (stating generally issues raised for first time in motion for reconsideration not properly raised because opposing party deprived of opportunity to respond). 4 In a brief footnote, GT asserts the Lisa line of cases is distinguishable because the attorneys in those cases were parties to the litigation. But GT does not explain the relevancy of this factual distinction, and we do not discern any. The policies underlying the holdings in these cases avoiding windfalls, treating non-attorney and attorney pro se litigants similarly are applicable whether the attorneylitigant is a party or a non-party. See infra ¶ 9. 5 this principle allegations those but against against instead it Lesk, were and GT argues that because inextricably also sought the Rule intertwined to protect 37 with Lesk s interests, it should not be denied fees simply because it had withdrawn from representing Lesk days before Flash filed its motions. We disagree. Regardless of GT s advocacy for Lesk s benefit, the fact remains GT did not represent Lesk during the Rule 37 proceedings, so no attorney-client relationship existed between GT and Lesk. And because Lesk had retained new counsel, who separately responded in opposition to Flash s motions, it was not necessary proceedings to for protect GT to Lesk s participate interests, in as the it Rule 37 implicitly contends. ¶9 Second, GT did not incur any financial obligation to pay the fees or expenses 5 awarded to it by the trial court. trial court s award, therefore, windfall our courts seek to avoid: constitutes the type The of The general rule against awarding fees to attorney-litigants is based upon a perception that such awards are windfalls to persons who have spent no money and incurred no debt for legal representation. Ariz. at 419, 904 P.2d at 1243. 5 Lisa, 183 And as with non-attorney- According to GT s application for attorney s fees and expenses, it incurred $517.20 in copy charges. Neither the application nor accompanying affidavit reflects GT paid an outside vendor to copy documents. 6 litigants, attorney-litigants are not entitled to compensation for lost opportunities to represent fee-paying clients result of the time expended representing themselves. ¶10 as a Id. In sum, even assuming Rule 37(a)(4)(B) authorized the trial court to reimburse GT its attorney s fees and expenses incurred in defending Flash s motion, the court erred in doing so because GT did not actually incur any attorney s fees and expenses due to its self-representation. In light of our decision, we need not address the parties remaining arguments. ATTORNEY S FEES ON SPECIAL ACTION REVIEW ¶11 Both parties request an award of attorney s fees in this special action pursuant to Rule 37. authorizes entitled to explained. Rule a fee an award, award we of deny fees See supra ¶¶ 6-10. 37(c)(1), which both for Even assuming Rule 37 requests. the GT reasons is not previously Flash requests fees pursuant to authorizes an imposition of sanctions, including attorney s fees, against a party who fails to timely disclose information pursuant to Rule 26.1. In light of the trial court s denial of Flash s motions, which Flash has not contested, sanctions are not warranted. in this taxable Appellate special costs action, upon Procedure however, compliance 21(a). See 7 As the prevailing party Flash with is Arizona Ariz. R.P. entitled Rule Spec. to its of Civil Act. 7(i) (making civil appellate rules applicable to the extent not inconsistent). CONCLUSION ¶12 For the foregoing reasons, we dismiss this appeal for lack of jurisdiction. We exercise our discretion to treat the appeal as a petition for special action, accept jurisdiction, and grant relief by vacating the trial court s order entered August 30, 2011. /s/ Ann A. Scott Timmer, Presiding Judge CONCURRING: /s/ John C. Gemmill, Judge /s/ Margaret H. Downie, Judge 8

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