2.8.3 Attorneys' Fees and Costs

• Jurisdiction: Arizona

§ 2.8.3 Attorneys’ Fees and Costs

Of additional significance, there is a mandatory award of reasonable attorneys’ fees and costs to the prevailing party in an action to foreclose on a lot or unit for unpaid assessments. A.R.S. § 33-1807 (H) states:

A judgment or decree in any action brought under this section [A.R.S. § 33-1807 ] shall include costs and reasonable attorneys’ fees.

In addition, most declarations state that the lien and the personal obligation come “together with” reasonable attorneys’ fees. The mandatory statutory award of “reasonable” attorneys’ fees (and the contractual provisions in most declarations) do not provide a court with the broad discretion available under A.R.S. § 33-1241 .01. The same applies to actions to enforce the use restriction covenants. Rather, the courts have consistently held that the term “reasonable” when inserted in a contractual provision allowing for an award of attorneys’ fees to the prevailing party requires the court to award fees unless the opposing party meets certain requirements.

In Heritage Heights Home Owners Ass’n v. Esser, ²³⁴ the court confronted the issue of whether a court is obligated to award the prevailing party its attorneys’ fees. The court held, in part:

The covenant requiring a violating party to pay the costs and attorneys’ fees of a prevailing party in a successful enforcement action was embodied as a provision in the deed restrictions:

In the event the major builder, or GOLDEN HERITAGE CORPORATION, or the Association, employs an attorney, or attorneys to . . . enforce compliance with or specific performance of the terms and conditions of this Declaration, the owner, owners and parties against whom the action is brought shall pay all attorneys’ fees and costs thereby incurred by any such enforcing party prevailing in any such action.
By accepting the deed, Mr. Esser became contractually bound to abide by its provisions. Murphey v. Gray, 84 Ariz. 299, 305, 327 P.2d 751, 755 (1958). The rule is that “Contracts for payment of attorneys’ fees are enforced in accordance with the terms of the contract.” 25 C.J.S. Damages § 50c; Kammert Brothers Enterprises v. Tanque Verde Plaza Co., 4 Ariz. App. 349, 370, 371, 420 P.2d 592, 613 (1966). Having found the restriction valid and having required its enforcement, the trial court was obliged by the contract to assess attorneys’ fees and costs in favor of the enforcing party. ²³⁵

Although A.R.S. § 33-1807 (H) is a statute rather than a contractual provision, the obligation of a court to follow its requirements is the same as if it were a contractual provision.

In Schweiger v. China Doll Restaurant, Inc., ²³⁶ the court set forth guidelines for courts to follow in awarding attorneys’ fees where the parties have agreed, by contract, that the prevailing party is entitled to recover “reasonable” attorneys’ fees. Because A.R.S. § 33-1807 (H) obligates an award of “reasonable attorneys’ fees,” a court is likely to apply the rationale of China Doll. In China Doll, the court stated:

The basis for the fee request in this case is a contractual provision in the parties’ lease which provides that the lessor (Schweiger) may recover from the

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