Background
The Arizona Cardinals and related entities entered a 2016 settlement agreement with the City of Glendale resolving a dispute over vehicle parking near State Farm Stadium. In 2022, Glendale proposed building a parking garage. The Cardinals maintained that the agreement required their consent before the City could proceed; the City disagreed and planned to begin construction in January 2024.
The Cardinals sued for declaratory and injunctive relief. The superior court issued a preliminary injunction barring the City from building the garage or taking related action without the Cardinals’ written consent. Glendale initially appealed, then abandoned the appeal and said it would not build the garage. The Cardinals voluntarily dismissed the action and sought fees and costs under the settlement agreement. The superior court awarded $511,239.73 in fees and $5,603.07 in costs.
The Court’s Holding
The Court of Appeals held that the Cardinals were prevailing parties under the settlement agreement’s fee provision. The agreement contemplated equitable relief for a breach or threatened breach, and the Cardinals obtained the practical result they sought: Glendale stopped pursuing the parking garage after the Cardinals secured a preliminary injunction. The Cardinals were not required to continue litigating after the City abandoned the project.
The court also upheld the superior court’s overall reasonableness determination, including its 15% reduction for block billing and excessive time on discrete tasks, and upheld recovery of transcript expenses under the agreement’s broad authorization for reasonable costs and expenses. But the parties agreed that one firm’s application used standard rather than discounted billing rates. The court therefore vacated the fee-and-cost judgment and remanded solely to enter a corrected award of $442,496.23 in attorney fees and $5,603.07 in costs.
Key Takeaways
- A party may prevail under a contractual fee clause by obtaining the practical relief sought through a preliminary injunction and the opposing party’s subsequent change in conduct.
- A voluntary dismissal does not defeat prevailing-party status when the defendant’s conduct renders further litigation unnecessary.
- Contract language allowing “reasonable costs and expenses” can support recovery beyond taxable statutory costs.
Why It Matters
The decision underscores that fee entitlement under a settlement agreement turns on the parties’ contract and the litigation’s practical outcome. A defendant cannot necessarily avoid a fee award by abandoning the challenged conduct after the plaintiff has obtained temporary equitable relief.
The opinion is designated nonprecedential under Arizona Supreme Court Rule 111(c).