Aqua Management, Inc. v. Abdeen (CA1 3/23/10)

This discusses how costs, fees, and interest affect the question of whether an appeal from arbitration is 23% successful.

AMI sued Abdeen; the case went to compulsory arbitration. The arbitrator gave AMI an award plus costs and fees but denied prejudgment interest. Abdeen appealed; after a bench trial the court awarded AMI slightly less principal, denied costs and fees, but added prejudgment interest. AMI then moved for fees and costs under Rule 77(f), arguing that Abdeen hadn’t beaten the arbitration award by 23%. The trial court denied the motion, ruling that the fee award doesn’t count toward the comparison. AMI appealed.

(We simplify somewhat. The trial court got mixed up about which party had appealed, didn’t say whether it had taken prejudgment interest into account, and thought it had jurisdiction to rule on a substantive motion after the Notice of Appeal. And the final judgment didn’t add the numbers up correctly, which nobody but the Court of Appeals noticed. This all makes the opinion a bit tedious and confusing, which could largely have been avoided by better drafting but wasn’t much, what else is new.)

So, do the attorney’s fees count? A case called Vega (199 Ariz.) had said that everything counts, which is what the rule clearly means (“at least twenty-three percent (23%) than the monetary relief . . . granted by the arbitration award”). Vega meant that costs count. This case holds that the same analysis means (1) that fees count and (2) that prejudgment interest counts, too.

The case also holds (3) that post-judgment interest on the arbitration award does not count.

(link to opinion)