By: Ben Reeves
The Arizona Court of Appeals recently held that any successful plaintiff in a forcible detainer action (i.e., an eviction action) may recover an award of its attorneys’ fees and costs incurred at trial under A.R.S. § 12-1178(A). See Bank of New York v. Dodev, 1 CA-CV 17-0652 (Ct. App. Nov. 20, 2018). Prior to this decision, caselaw held that fees were only awardable in actions arising out of the termination of a residential lease. RREEF Mgmt. Co. v. Camex Prods., Inc., 190 Ariz. 75, 945 P.2d 386 (Ct. App. 1997). Changes to the statute, however, rendered the prior caselaw obsolete. Although the holding in Dodev is important, the facts of the case are truly astonishing…and somewhat depressing.
In Dodev, Ivaylo Dodev (Dodev) defaulted on his home loan in 2008. He nevertheless “succeeded in remaining on the [p]roperty by filing numerous legal actions that delayed the foreclosure and subsequent trustee’s sale” at least through the date of the opinion—a ten (10) year period.
After litigating with Dodev for years in federal district court and in bankruptcy court, the Bank of New York (Bank) finally acquired the property through trustee’s sale in 2016. After providing Dodev with written notice to vacate the home, Bank initiated a forcible detainer (or eviction) action under A.R.S. § 12-1173.01.
Dodev then evaded service, argued insufficiency of service, moved to dismiss for lack of jurisdiction, and removed the case to federal court. Dodev’s actions led Bank to voluntarily dismiss two (2) forcible detainer actions, without prejudice.
The third eviction action, however, went to trial. Dodev again argued insufficiency of service and lack of jurisdiction, but the trial court overruled those arguments and ordered Dodev to file an answer—which Dodev refused to do. At trial, Dodev claimed that he was on medication that prevented him from testifying, but still refused to file an answer. Accordingly, the trial court entered a default judgment against him. Dodev appealed, and obtained a stay of eviction by posting the appropriate bonds.
On appeal, the Court of Appeals: (i) confirmed that Rule 41, Ariz R. Civ. P., does not apply in eviction actions, (ii) held that Dodev’s appeal from one of the previously dismissed eviction actions did not divest the trial court of jurisdiction in the third case, (iii) held that the trial court did not err by ordering Dodev to file an answer, (iv) affirmed the sufficiency of service of process on Dodev, and (v) affirmed the award of Bank’s fees and costs. This last portion of the opinion is the focus of this post.
A.R.S. § 12-1178(A) was amended in 2008 to provide that if a plaintiff prevails in an eviction action, then the court “shall give judgment for the plaintiff for…attorneys’ fees, [and] court and other costs[.]” Since no other appellate decision had yet interpreted this provision to award fees, the Court of Appeals took this opportunity to clarify that—despite its earlier decisions to the contrary—any successful plaintiff in a detainer action may recover an award of fees.
The Court of Appeals, however, went on to conclude that A.R.S. § 12-1178(A) only applied to the trial court and not to an appellate court. Accordingly, the statute did not authorize an award of fees incurred as a result of the appeal.
Eviction actions in Arizona are designed to afford a speedy remedy for parties entitled to immediate possession of property. Dodev provides an example of this procedure gone horribly awry. Nevertheless, some comfort can be found in the fact that fees can be awarded—at least at the trial court level.