Arizona Court of Appeals Clarifies Attorney Fee-Shifting Statute

In February of 2020, the Arizona Court of Appeals (Division One) issued an interesting opinion regarding the attorney fee-shifting statute, A.R.S. § 12-341.01. In Fields v. Elected Officials Retirement Plan, 459 P. 3d 503 (Ariz. App. 2020), the Court of Appeals held that a fee agreement between a client and lawyer that provided the lawyer would be paid only the full amount of any fee award if a court awarded statutory recovery of attorney’s fees but also required the client to petition the court for such an award was a genuine financial obligation of the client to the lawyer.

"Losing Hand" by Damian Gadal is licensed under CC BY 2.0

The State of Arizona, an additional defendant in the case, had argued in the trial court and to the Court of Appeals that the fee agreement did not really obligate the client to pay anything since there existed a significant possibility the trial court would not award recovery of attorney’s fees and, therefore, an award of fees under A.R.S. § 12-341.01 was unavailable.

The Court of Appeals held the fee agreement at issue was a contractual obligation that bound the client to do two things: 1. Seek an award, and 2. Pay any award over to the lawyer. The conditional nature of the obligation to pay did not eliminate the client’s obligation.

This is important to the work I do because I often have real estate clients who are seeking a remedy against a government entity against whom an award of attorney’s fees may be available under A.R.S. § 12-348. I have structured fee agreements like this before, though perhaps not quite this elegantly. Fields v. EORP provides an important blueprint for lawyers and clients to structure their fee agreement before the lawyer begins representation. The decision ensures lawyers can undertake cases that might be in the public interest but not easily paid for by the client at an hourly rate or using a traditional contingency fee recovery from an award of money damages.

If you have a zoning or eminent domain case that might involve litigation against a government entity, I am able to help. Fields v. EORP provides another tool to enable me to take such cases.