National v. Despain

Annotate this Case

Download PDF

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 NATIONAL HEALTH FINANCE, DM, L.L.C., an Arizona limited liability company, Plaintiff/Appellant, V. HOLLY N. DESPAIN and JOHN DOE DESPAIN; THOMAS ERHARD and JANE DOE ERHARD, Defendants/Appellees. ) ) ) ) ) ) ) ) ) ) ) ) ) ) DIVISION ONE FILED: 06/05/2012 RUTH A. WILLINGHAM, CLERK BY: sls No. 1 CA-CV 11-0489 DEPARTMENT C MEMORANDUM DECISION (Not for Publication Rule 28, Arizona Rules of Civil Appellate Procedure) Appeal from the Superior Court in Maricopa County Cause No. CV2009-091065 The Honorable John R. Ditsworth, Judge AFFIRMED Williams & Halladay PLC By Peter M. Williams Emilie D. Halladay Attorneys for Plaintiff/Appellant Chandler Riviere Law Group PLLC By Roger W. Riviere Yana Krassilnikova Attorneys for Defendants/Appellees Phoenix T I M M E R, Judge ¶1 Plaintiff National Health Finance, DM, L.L.C. ( NHF ), appeals the superior court s judgment awarding Holly N. Despain and Thomas Erhard (collectively, Defendants ) attorneys fees for their successful defense of this health care provider lien case. NHF Defendants argues and the court misapplied erred Arizona by Rule ( Rule ) 54(b) in entering judgment. awarding of any Civil fees to Procedure For the following reasons, we disagree and therefore affirm. BACKGROUND ¶2 In May 2005, Rolan and Ruby Johnston were physically injured in a vehicle accident. 1 Despain was driving the other car involved in the accident, and Erhard was the named insured of that car. The Johnstons received medical treatment for their injuries, and they eventually settled their legal claims against Defendants arising from the accident. ¶3 Meanwhile, the Johnstons treatment providers sold and assigned to NHF the Johnstons accounts receivable. In connection with the outstanding accounts, NHF recorded notices and claims of health care provider liens ( Liens ) on July 21 and August 4, 2005, pursuant to Arizona ( A.R.S. ) section 33-932 (West 2012). 2 1 Revised Statutes NHF mailed notices of The Johnstons were also in a car accident in April 2005. 2 Absent material revisions after the relevant date, we cite a statute s current Westlaw version. 2 the Liens to the Johnstons and their attorney, Michael Middleton. ¶4 In August 2009, NHF sued the Johnstons seeking payment for the outstanding medical bills. first-amended complaint adding In November, NHF filed a several defendants and claims. Significantly, NHF sued Despain and Erhard, alleging they had notice of the Liens and violated A.R.S. §§ 33-931 to -934 (West 2012) ( Lien Statutes ) by failing to remit payment to NHF upon settlement of the Johnstons claims. denying Johnstons liability and and asserted Middleton for Defendants filed an answer a cross-claim indemnity arising against the out the of parties settlement agreement. ¶5 NHF obtained a default judgment against the Johnstons. Defendants subsequently moved for summary judgment arguing the court should dismiss the claims against them because NHF never provided them Statutes. judgment, notice The and of court entered the Liens agreed, a Rule as required granted 54(b) by the Defendants judgment in summary April dismissing all claims against them (the merits judgment ). did not appeal the merits judgment. an award of subsequently attorneys fees, entered second a which Rule Lien 2011 NHF Defendants later moved for NHF opposed. 54(b) judgment The court awarding Defendants attorneys fees and costs of more than $10,000 (the fee judgment ). This timely appeal followed. 3 DISCUSSION I. ¶6 Fee award NHF does not contest the amount of attorneys fees awarded but argues the superior court erred by awarding any fees to Defendants. First, NHF contends the court erred by basing the award on the contract fee statute. 12-341.01 (West 2012) was an improper NHF argues A.R.S. § basis for the award because the claims against NHF were statutory and not based on contract. We will affirm the trial court if it was correct for any reason. City of Phoenix v. Geyler, 144 Ariz. 323, 330, 697 P.2d 1073, 1080 (1985). ¶7 The court awarded Defendants attorneys fees pursuant to A.R.S. § 12-341. Section 12-341, however, applies to costs not attorneys fees. Compare A.R.S. § 12-341 ( The successful party to a civil action shall recover from his adversary all costs expended or incurred therein unless otherwise provided by law. ), with A.R.S. § 12-341.01(A) ( In any contested action arising out of a contract, express or implied, the court may award the successful party reasonable attorney fees. ). Thus, the court erred in referring to § 12-341 as a basis for an award of fees. Nevertheless, the error is otherwise had a basis for awarding fees. harmless if the court Glaze v. Marcus, 151 Ariz. 538, 540, 729 P.2d 342, 344 (App. 1986) ( We will affirm the trial court s decision if it is correct for any reason, even 4 if that reason was not considered by the trial court. ) (citation omitted). ¶8 The Lien Statutes expressly provide the trial court discretion to award fees to the prevailing party. 934(B). award basis, Accordingly, Defendants we will because their the and reverse not fees, court that the clearly award award intended had to due a the incorrect citation to authority for granting fees. Ariz. at 540, 729 P.2d at 344. A.R.S. § 33to statutory court s Glaze, 151 In light of our decision, we address NHF s remaining arguments only insofar as they concern A.R.S. § 33-934(B). 3 ¶9 NHF argues Defendants were not entitled to a fee award because they were not the prevailing parties. NHF asserts it prevailed because it obtained a default judgment against the Johnstons and ultimately obtained more relief than Defendants, especially as claims against Defendants remain pending. argument lacks merit. Defendants clearly prevailed This on the claims NHF raised against them when the superior court entered summary judgment on those claims. Ariz. 82, 85, 887 P.2d 612, 615 See Drozda v. McComas, 181 (App. 1994) ( Typically, determining the prevailing party for purposes of awarding fees 3 NHF argues the court erred in applying the factors set Associated Indem. Corp. v. Warner, 143 Ariz. 567, 570, 1181, 1184 (1985). Because these factors apply only awarded pursuant to A.R.S. § 12-341.01(A), we do not this argument. 5 forth in 694 P.2d to fees consider and costs is quite simple. Plaintiff sues defendant . . . ; if plaintiff is awarded a judgment, plaintiff has prevailed, and if defendant successfully defends and avoids an adverse judgment, defendant has prevailed. ) (quoting Mountain States Broad. Co. v. Neale, 783 P.2d 551, 555 (Utah Ct. App. 1989)). NHF s success against other defendants in this case is immaterial for purposes claims of determining raised against whether them. 4 Defendants prevailed Additionally, as on the explained hereafter, see infra ¶¶ 12-14, no claims remain pending against Defendants. Consequently, because Defendants entirely prevailed on all NHF s claims, the court did not abuse its discretion in ruling Defendants were the prevailing parties and awarding them attorneys fees. 4 The cases relied on by NHF are inapposite because they concern the various methods courts employ to determine a prevailing party when both the plaintiff and defendant partially succeed on their respective claims or defenses. That is not the case here because NHF did not prevail in any way against Defendants. See Berry v. 352 E. Virginia, L.L.C., 228 Ariz. 9, 14, ¶ 24, 261 P.3d 784, 789 (App. 2011) ( Partial success does not preclude a party from prevailing and receiving a discretionary award of attorneys fees. ); Schwartz v. Farmers Ins. Co. of Ariz., 166 Ariz. 33, 38, 800 P.2d 20, 25 (App. 1990) ( In the instant case there are multiple-claims brought against a defendant, with varied success, and both parties seek an award of their attorney s fees pursuant to A.R.S. § 12-341.01.A. . . . The trial court may rightfully utilize a percentage of success factor or a totality of the litigation test . . . to determine who was the successful party. ); Trollope v. Koerner, 21 Ariz. App. 43, 47, 515 P.2d 340, 344 (1973) ( We hold that since the appellants recovery of $791.75 exceeded that of appellees compulsory counterclaim recovery of $500, the net judgment being in appellants favor for $291.75, the trial court erred by not awarding the successful appellants their costs. ). 6 ¶10 because NHF briefly argues the court erred by awarding fees Defendants could be indemnified for their attorneys fees pursuant to the settlement agreement with the Johnstons and Middleton. We are unaware of any authority requiring a fee- claimant to pursue other sources of recovery as a prerequisite for obtaining a fee award, and NHF fails to cite any. We therefore reject NHF s argument. ¶11 In sum, the superior court did not err by awarding attorneys fees to Defendants. II. ¶12 Finality of judgment NHF next argues the court erred in certifying the fee judgment as final pursuant to Rule 54(b). certification decision for an abuse of We review the court s discretion. GM Dev. Corp. v. Cmty. Am. Mortg. Corp., 165 Ariz. 1, 9, 795 P.2d 827, 835 (App. 1990). ¶13 NHF contends that although the merits judgment disposed of its claim brought under the Lien Statutes, common law causes of action remain. We disagree. First, NHF is barred from relitigating this issue under the doctrine of collateral estoppel. After the court granted Defendants motion for summary judgment, they moved for entry of final judgment on all claims asserted against them. NHF responded in opposition, but the court entered the merits judgment with Rule 54(b) language on April 29, 2011, stating Defendants had prevailed on the only 7 causes of action asserted against them. that ruling. NHF did not appeal The fee judgment repeats this ruling, but because NHF failed to appeal the merits judgment, it is barred from relitigating the issue. See Funk v. Ossman, 150 Ariz. 578, 580- 81, 724 P.2d 1247, 1249-50 (App. 1986). ¶14 Second, even assuming collateral estoppel does apply, the court s ruling is supported by the record. not According to the first-amended complaint and NHF s disclosure statement, the only claim asserted against Defendants, in addition to the statutory lien claim, is an allegation of intentional interference with commercial dealings by failing to remit the settlement funds pursuant to an agreement for payment between NHF and others, including Defendants, arising from A.R.S. § 33931. In its disclosure statement, NHF again described the basis for the agreement as one for recovery under A.R.S. [§] 33-931. Neither NHF s response to the motion for summary judgment nor its response to the motion for entry of judgment on all claims sets forth an alternative basis for the alleged agreement between NHF and Defendants. Thus, once the superior court ruled that establish NHF had Defendants, failed NHF s to claim for a lien interference claim with against commercial dealings based on that lien similarly failed. ¶15 In sum, the court did not abuse its discretion certifying the fee judgment as final pursuant to Rule 54(b). 8 in ATTORNEYS FEES ON APPEAL ¶16 Defendants request an award of attorneys fees appeal pursuant to A.R.S. § 33-934(B), among other bases. on We award Defendants their fees pursuant to this provision subject to their compliance with Arizona Rule of Civil Appellate Procedure 21. CONCLUSION ¶17 For the foregoing reasons, we affirm. /s/ Ann A. Scott Timmer, Judge CONCURRING: /s/ Michael J. Brown, Presiding Judge /s/ Margaret H. Downie, Judge 9

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.