Arizona Court of Appeals Division Two Holds That a Court May Not Certify an Attorney Fee Claim as a Final Judgment Pursuant to Rule 54(b) in Advance of a Related Judgment Regarding the Merits.

The plaintiffs, Mr. and Mrs. Kim, filed a breach of contract action and claim for attorneys’ fees against the seller and his real estate agent Haider Mansoori for allegedly breaching a purchase contract for approximately forty acres of vacant land. Mansoori filed a motion for partial summary judgment on the attorneys’ fees claim asserted against him, arguing that the Kims could not be awarded attorney fees under A.R.S. § 12-341.01 because the action did not “aris[e] out of a contract.” The trial court granted Mansoori’s motion, finding the Kims would not be entitled to attorneys’ fees under § 12-341.01 because “there is no[] contract between Mansoori and Kim.” The trial court further directed the entry of judgment pursuant to Ariz. R. Civ. P. 54(b), purportedly making the judgment final and appealable. The Kims appealed the propriety of the trial court’s Rule 54(b) certification of the claims as a final judgment.

The Court of Appeals held that Ariz. R. Civ. P. 54(g), which governs the procedure for claiming and being awarded attorneys’ fees, expressly precludes a determination on an attorney fee request prior to a decision on the merits. It further held that Rule 54(b) does not authorize certification of a type of final judgment – a judgment on an attorney fee claim preceding a decision on the merits – that is expressly forbidden in Rule 54(g). The Court of Appeals explained that the 1999 amendment to Rule 54(b), which discusses attorneys’ fees, merely allowed a determination of attorneys’ fees to be made after a judgment on the merits and did not contemplate or address a determination of attorneys’ fees before a judgment on the merits. Accordingly, the trial court erred when it certified as final a judgment on an attorneys’ fee claim pursuant to Rule 54(b) in advance of a “related judgment regarding the merits of [the] cause.” In light of that, the Court of Appeals determined that it lacked jurisdiction over the appeal, and dismissed it.
The decision was authored by Judge Eckerstrom; Judges Brammer and Espinosa concurred.