Attorneys' Fees to Successful Party with Genuine Financial Obligation to Pay ARS § 12-341.01
Fields v. Elected Officials Retirement Plan,No. 1 CA-CV 18-0126 (App. Div. I, February 6, 2020) (J. Weinzweig) https://www.azcourts.gov/Portals/0/OpinionFiles/Div1/2020/1%20CA-CV%2018-0126%20-%20Fields%20v.%20EORP%20-%20FINAL.pdf
SUCCESSFUL PARTY ENTITLED TO ATTORNEYS' FEES UNDER A.R.S. § 12-341.01 WHERE PARTY CONTRACTUALLY OBLIGATED TO SEEK AND PAY ATTORNEYS FEES AWARDED
Plaintiffs are retired judges and members of the Elected Officials Retirement Plan who sued the state for declaratory and injunctive relief claiming A.R.S. § 38-810 unconstitutionally changed the way employer contributions to the plan were set to their detriment. They won. Plaintiffs' contract with their lawyers provided the lawyers would be compensated under a contingency fee, but further provided the law firm would “limit recovery of [its attorney] fees to those fees and costs awarded by the [superior court] under any applicable fee shifting statute. [And] Clients agree to pay those fees and costs over to Attorneys.” The defendant challenged any such award of fees under A.R.S. § 12-341.01 on the basis the statute requires the party seeking fees have a “genuine financial obligation “ to compensate their attorneys and that no such obligation existed here. The trial court awarded plaintiff $46,088.80 in attorney fees and $1,899 in costs. The Arizona Court of Appeals affirmed
Plaintiffs promised first to “petition ”the superior court for an award of attorney fees and costs under the fee-shifting statute, and promised then to surrender “those fees and costs over to” counsel. Those twin promises are contractually enforceable under Arizona law and represent a genuine financial obligation to compensate counsel. The conditional nature of payment does not diminish the genuine financial obligation. Arizona courts have long recognized that attorney fees are recoverable under § 12-341.01 “when the contract between the party and the attorney is a contingency-fee agreement,” reasoning that “[a]fter obtaining a judgment, a client who has retained counsel on a contingency basis must surrender the agreed upon percentage of the judgment as remuneration.