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Civil Procedure Victories

Balestrieri v. Balestrieri
Defendant who files motion to dismiss under rule 12(b) in lieu of answer forfeits attorneys' fee claim if he doesn't ask for fees at the time he moves to dismiss.
Plaintiff sued his son for breach of contract. The son moved to dismiss pursuant to rule 12(b)(2) of the Arizona Rules of Civil Procedure—lack of personal jurisdiction. The son did not ask for attorneys' fees in the motion. After the motion was granted the son filed a motion for fees which was granted. The Arizona Court of Appeals affirmed the granting of the motion to dismiss but vacated the order awarding fees.

Rule 54(g)(1) states a request for attorneys' fees "shall be made in the pleadings." Rule 7(a) defines pleadings as a complaint, an answer, a reply to a counterclaim, an answer to a cross-claim,

a third-party complaint and an answer to a third-party complaint. It does not mention rule 12(b) motions. The court of appeals found the purpose of rule 54(g)(1) to be the promotion of settlement out of court and "unless each party is on notice before each stage of the law suit that its opponent intends to ask for attorneys' fees, that purpose cannot be served." Because a rule 12(b) motion effectively takes the place of an answer the purpose of rule 54(g)(1) can only be served if the request for fees is included in that motion; waiting until the motion is granted defeats the purpose of putting the plaintiff on notice that fees are being requested and that settlement of the disagreement ought to be considered before the motion is ruled upon. Finally, the court found that requesting attorneys' fees does not constitute a waiver of the jurisdictional defense.

Clark v. Renaissance West, LLC
Arbitration agreement is substantively unconscionable where costs to
arbitrate are prohibitively high.
Plaintiff sued defendant nursing home for medical malpractice and neglect of a vulnerable adult under ARS sec. 46-455 as a result of defendants allegedly allowing a severe pressure sore to develop on his back. The defendants moved to dismiss on the basis the plaintiff had signed an arbitration agreement requiring him to arbitrate all disputes with the home. The trial court held a hearing where plaintiff's expert testified that based on the complex nature of Plaintiff's claims, it would cost Plaintiff approximately $22,800 in arbitrator's fees to arbitrate the case. Plaintiff testified that he was retired and lived on a fixed income, and that based on the likely amount of arbitrators' fees, he could not afford to arbitrate his claims. The trial court denied the defendants' motion to dismiss. Defendants appealed and the Arizona Court of Appeals affirmed.

First the court of appeals distinguished procedural from substantive unconscionability, the former being based upon the fairness of the bargaining process and the latter being based upon the fairness of the material terms of the contract itself. Where the terms of the contract are "so one-sided as to be overly oppressive or unduly harsh to one of the parties" it is substantively unconscionable. Such is the case here where it is proven the costs of arbitration are so high as to "deny a potential litigant the opportunity to vindicate his or her rights." Unconscionability is a question of law for the court and the party seeking to void the agreement must prove with reasonable certainty what the costs will be and specific individualized facts regarding assets and liabilities that establish the party's inability to pay them. Finally the court must consider whether under the terms of the contract the costs can be waived for financial hardship.

Here the plaintiff put on the testimony of an experienced nursing home neglect attorney who testified to the rates charged by arbitrators in Maricopa County and produced actual bills from arbitrators in other cases. He further testified to the complexity of the case at hand with specificity and consequently the likely length of time the arbitration would take. Based upon this he estimated arbitration costs to be $22,800. Plaintiff testified he was retired on a fixed income and held no financial resources such as savings or stocks and that a portion of his fixed income was veteran's assistance for financially strapped vets. The agreement had no hardship waiver. Hence the court found it appropriate to defer to the trial court's sound judgment and affirmed the denial of the motion to dismiss.

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