Attorneys' Fees, Clauses and Entitlements

In any contested action arising out of a contract, express or implied, the court may award the successful party reasonable attorney fees. (A.R.S. § 12-341.01) In any civil action commenced or appealed in a court of record in this state, the court shall assess reasonable attorney fees, expenses and, at the court's discretion, double damages of not to exceed five thousand dollars against an attorney or party, i if the attorney or party does any of the following: Brings or defends a claim without substantial justification. Brings or defends a claim solely or primarily for delay or harassment. Unreasonably expands or delays the proceeding. Engages in abuse of discovery.  (A.R.S. § 12-349)

Arizona follows the so-called "American rule," providing that each party in a lawsuit ordinarily bears its own attorneys' fees unless there is a contractual or applicable statutory provision authorizing an award of fees. Swanson v. Image Bank, Inc., 202 Ariz. 226, 43 P.3d 174 (Ct. App.2002); Marcus v. Fox, 150 Ariz. 333, 723 P.2d 682 (1986). Clauses in contacts specifying an award of attorneys' fees are valid in Arizona. F.D.I.C. v. Adams, 187 Ariz. 585, 931 P.2d 1095 (Ct. App. 1996); Bennett v Appaloosa Horse Club, 201 Ariz. 372, 35 P.3d 426 (Ct. App. 2001).

In addition to common-law support for attorneys' fees clauses in contracts, and other, specialized statutes, the broad language of A.R.S. § 12-341.01 has led to considerable litigation over the particular circumstances in which parties may be entitled to recover their attorneys' fees, even absent contractual authorization. A publication available from Continuing Legal Education of the State Bar of Arizona, Arizona Attorneys' Fees Manual (Bruce E. Myerson and Patricia K. Norris, co-editors, 4th ed. 2003), collects and discusses those circumstances in great detail. It also contains a ten page Index of particular Arizona Statutes and Rules Governing Attorneys Fees, covering everything from "adoption" to "writs."