§ 10.10 AWARD OF ATTORNEYS' FEES AS APPELLATE SANCTIONS

• Jurisdiction: Arizona

§ 10.10 Award of Attorneys' Fees as Appellate Sanctions

Pursuant to Ariz. R. Civ. App. P. 25, when an appeal or a motion is frivolous or filed solely for the purpose of delay, or when any party has been guilty of an infraction of the appellate rules, the appellate court may impose upon the offending attorneys or parties reasonable penalties or damages, including attorneys' fees. See In re $15,379 in U.S. Currency, ___ P.3d ___, ¶¶ 28-34, 2 CA-CV 2015-0166, 2016 WL 7422255, at *6-7 (App. Dec. 22, 2016); ABC Supply, Inc. v. Edwards, 191 Ariz. 48, 56-57, 952 P.2d 286, 294-95 (App. 1996), on reconsideration, in part, (Oct. 30, 1997). Appellate courts traditionally use their authority to impose sanctions under Ariz. R. Civ. App. P. 25 with "great reservation," Ariz. Tax Research Ass'n v. Dep't of Revenue, 163 Ariz. 255, 258, 787 P.2d 1051, 1054 (1989), so as to not discourage appeals involving novel arguments or theories. Price v. Price, 134 Ariz. 112, 114, 654 P.2d 46, 48 (App. 1982). However, the court of appeals has stated that the judiciary should be active in imposing sanctions on counsel whose conduct is wholly unreasonable. SeeABC Supply, 191 Ariz. at 55, 952 P.2d at 293.

An appeal is frivolous "when it is prosecuted for an improper motive to harass the respondent or delay the effect of an adverse judgment-or when it indisputably has no merit-when any reasonable attorney would agree that the appeal is totally and completely without merit." Arizona Tax Research Ass'n, 163 Ariz. at 258, 787 P.2d at 1054 (internal quotation omitted). Absent an allegation of improper motive, the conclusion that an appeal is frivolous can be upheld only on the basis that the issues raised were not supported by any reasonable legal theory. See Johnson v. Brimlow, 164 Ariz. 218, 222, 791 P.2d 1101, 1105 (App. 1990). See Chapter 5, Sanctions and Punitive Fee Awards.

A.R.S. § 12-341.01(C) is no longer a basis for appellate sanctions as the Legislature repealed that statutory provision in 2012. Cases that rely on A.R.S. § 12-341.01(C) should therefore be cited with caution. Arizona Rule of Civil Procedure 11 is also not a basis to award fees for sanctionable conduct on appeal. SeeVilla de Jardines Ass'n v. Flagstar Bank, FSB, 227 Ariz. 91, 99 n.10 ¶¶ 26-27, 253 P.3d 288, 295 n.10 (App. 2011) (awarding fees under Ariz. R. Civ. App. P. 25, but not Rule 11, where party failed to present colorable legal argument because "Rule 11 is not a proper basis for an award of attorney fees on appeal").

The repeal of A.R.S. § 12-341.01(C) was accompanied by a revision of A.R.S. § 12-349, which authorizes appellate courts to award attorneys' fees as sanctions for frivolous appeals, harassment or dilatory tactics. By its terms, A.R.S. § 12-349 still provides for the recovery of fees in a frivolous appeal, specifically one brought "without substantial justification," "primarily for delay or harassment," or which "[u]nreasonably expands or delays the proceeding." A.R.S. § 12-349(A)(1)-(3).

The appellate courts may impose an award of attorneys' fees as a sanction even when an opposing party does not request such an award. For example, under Ariz. R. Civ. App. P. 25, the court of appeals has imposed fees when a party's brief does not meet minimum standards. See, e.g., Mangan v. Mangan, 227 Ariz. 346, 354, ¶ 32, 258 P.3d 172, 180 (App. 2011) (awarding attorneys' fees on appeal under Ariz. R. Civ. App. P. 25 as a sanction for "counsel's misrepresentation of the record and reliance on a memorandum decision as legal authority"); Davies v. Beres, 224 Ariz. 560, 568, ¶ 30, 233 P.3d 1139, 1147 (App. 2010) (acknowledging court's ability to assess fees for deficient briefs, but declining in its discretion to award fees against a pro per party for "failing to cite to the record in his opening brief, failing to set forth authority for this court's jurisdiction and failing to set forth the applicable standard of review for his arguments"); Adams v. Valley Nat'l Bank, 139 Ariz. 340, 342-43, 678 P.2d 525, 527-28 (App. 1984); Jhagroo v. City of Phx. Mun. Ct., 143 Ariz. 595, 598, 694 P.2d 1209, 1212 (App. 1984) (assessing fees due to a party's failure to provide appropriate references to the record in its brief). The supreme court has also assessed fees under Ariz. R. Civ. App. P. 25 against those who file frivolous petitions for review. See, e.g., Evans v. Arthur, 139 Ariz. 362, 365, 678 P.2d 943, 946 (1984). For examples of other Ariz. R. Civ. App. P. 25 awards, see 1A Appellate Handbook, § 3.2.2.

ABC Supply, Inc. v. Edwards, 191 Ariz. 48, 952 P.2d 286 (App. 1996), on reconsideration, in part, (Oct. 30, 1997) 10-10

Adams v. Valley Nat'l Bank, 139 Ariz. 340, 678 P.2d 525 (App. 1984)................................................ 10-11

Ahwatukee Custom Estates Mgmt. Ass'n, Inc. v. Bach, 193 Ariz. 401, 973 P.2d 106 (1999)..................... 10-8

Aries v. Palmer Johnson, Inc., 153 Ariz. 250, 735 P.2d 1373 (App. 1987).................................................. 10-8

Ariz. Tax Research Ass'n v. Dep't of Revenue, 163 Ariz. 255, 787 P.2d 1051 (1989).............................. 10-10

Assyia v. State Farm Mut. Auto. Ins. Co., 229 Ariz. 216, 273 P.3d 668 (App. 2012).......................... 10-2, 7

Ball v. City of Chandler Improvement Dist. No. 48, 150 Ariz. 559, 724 P.2d 1228 (App. 1986)...