Civil Procedure: Sanctions Payable to Co-Defendant Where Position Not Improved on Appeal

Fisher v. Edgerton, 696 Ariz. Rep. 22 (App. Div. I, September 30, 2014) (J. Kessler)

DEFENDANT WHO APPEALS COMPULSORY ARBITRATION RESULT AGAINST PLAINTIFF AND CODEFENDANT ARGUING CODEFENDANT AT FAULT MUST PAY FEES AND COSTS TO CODEFENDANT WHERE POSITION NOT IMPROVED 23%

Defendant Fisher was found to be 100% at fault in a three car rear end collision by an arbitrator in compulsory arbitration. Fisher appealed arguing codefendant Edgerton was at fault. Fisher was found 100% at fault by a jury on appeal and had attorneys' fees, expert fees and taxable costs awarded against her and in favor of defendant Edgerton.  The Arizona Court of Appeals affirmed.   “The two co-defendants are adverse parties regarding comparative fault and, if the appealing defendant cannot shift at least 23% more of the liability to her co-defendant, Rule 77(f) expressly requires an award of reasonable attorneys' fees and costs  . .  .  .  The intent of Rule 77(f) ‘is to discourage parties from pursuing marginal appeals of arbitration awards, as an appeal effectively defeats the purpose behind compulsory arbitration.'  Here, Fisher's demand for trial de novo caused the parties to re-litigate fault and specifically the fault allocation between Fisher and Edgerton. Fisher's appeal and attempt to shift fault to Edgerton were unsuccessful and represent the type of appeal Rule 77(f) was designed to discourage.”   The court rejected Fisher's constitutional due process claim finding that the award of fees and costs was not analogous to punitive damages where absent court imposed limits, a defendant is potentially exposed to unforeseeably high awards.  Here defendant is put on notice by rule 77(f) that these fees and costs would be assessed if she did not substantially improve her position vis a vis the codefendant and the amount of fees and costs was certainly estimable.   Finally, the court rejected the appellant's equal protection argument that her right to jury trial was effectively denied by the imposition of an unreasonably high sanction. The court found the right to jury trial always comes with a cost and here the interest in discouraging the appeal of arbitration awards on marginal grounds justified the imposition of fees and costs as a sanction where that jury trial did not result in a 23% improvement of appellant's position vis a vis the codefendant. The awards must be reasonable, but there was no claim below that they were unreasonable.