Brighthouse Life Insurance Company v. Lawrence Rudolph

District Court, D. Arizona·Decided March 25, 2026·No. 2:24-cv-00870·Unknown

Opinion

WO

Brighthouse Life Insurance Company, No. CV-24-00870-PHX-DJH

Plaintiff, ORDER

v.

Lawrence Rudolph,

Defendant. Before the Court is Brighthouse Life Insurance Company’s (“Brighthouse”) Motion for Attorney Fees. (Doc. 26). The Court previously entered default judgment in favor of Brighthouse and allowed the filing of the present Motion. (Doc. 21 at 10–11). The Motion is unopposed and the time to file a Response has passed. See LRCiv. 7.2(c). Brighthouse seeks $71,419.50 in attorneys’ fees, $3,522.74 in expenses, $2,022.48 for brokerage commission costs, and $3,200.00 for investigative costs. I. Background By prior order, the Court granted Brighthouse’s Motion for Entry of Default Judgment against Lawrence Rudolph (“Defendant”), awarding Brighthouse $773,901.17 in compensatory damages and the premium payment of $1,232.67. This action centered around the validity of a life insurance policy bearing the policy number 214140755UT (“the Policy”) that was issued to Defendant and which provided coverage on the life of his wife, Bianca T. Rudolph. (Doc. 26 at 2). In its initial complaint, Brighthouse sought declaratory judgment on eight counts (1) finding that the Policy was void at inception; (2) declaring that the Policy is void because it is an illegal contract; (3) declaring the Policy void because it is against public policy; (4) finding that Rudolph filed a fraudulent claim for the insurance death benefits; (5) establishing that Rudolph committed fraud; (6) finding that Rudolph made negligent misrepresentation; (7) holding that Rudolph breached a contract; and (8) finding that Rudolph breached the covenant of good faith and fair dealing. (Id. at 3). Defendant has failed to appear or otherwise respond. (Id.) Brighthouse now seeks an award of $71,419.50 in attorneys’ fees, $3,522.74 in expenses, $2,022.48 for brokerage commission costs, and $3,200.00 for investigative costs. (Id. at 13.). II. Legal Standard A party seeking attorneys’ fees must show both that it is eligible for and entitled to the requested attorneys’ fees and that the fees are reasonable. LRCiv 54.2(c). To establish eligibility and entitlement, a party must show that an award of fees is proper based on a “contract, an applicable statute, a finding that the losing party acted in bad faith, or other exceptional circumstances.” Sea-Land Serv., Inc. v. Murrey & Son's Co. Inc., 824 F.2d 740, 744 (9th Cir. 1987). Then, the party requesting attorney fees and costs must also show that the attorney’s fees are “reasonable”. Brighthouse cites to A.R.S. §§ 12-341 and 12-341.01(A) as the means by which Brighthouse is establishing eligibility and entitlement to attorneys fees. A.R.S. § 12-341.01 reads in full: “The successful party to a civil action shall recover from his adversary all costs expended or incurred therein unless otherwise provided by law.” A.R.S. § 12-341.01. “This language is mandatory; the superior court has no discretion to deny costs to the successful party.” Roddy v. Cnty. of Maricopa, 184 Ariz. 625, 627, 911 P.2d 631, 633 (Ct. App. 1996). “Cost” is a term of art with a limited meaning and does not encompass everything a party used to obtain victory. In re Nelson, 207 Ariz. 318, 322, 86 P.3d 374, 378 (2004) (affirming cost is limited to ‘taxable costs’). For civil cases in the superior court, the Court turns to A.R.S. § 12.332 for guidance. Id. A.R.S. § 12-341.01(A) provides that “[i]n any contested action arising out of contract, express or implied, the court may award the successful party reasonable attorney’s fees.” A.R.S. § 12-341.01(A). It does not “alter[], prohibit[] or restrict[] present or future contracts or statutes that may provide for attorney fees” and may not be construed as such. Id. Additionally, 12-341.01(A) also provides that the awarded fees “may not exceed the amount paid or agreed to be paid.” Lastly, 12-341.01(C) affirms that “[t]he court and not a jury shall award reasonable attorney fees under this section.” Id. III. Discussion The Court will first address Brighthouse’s Motion for Attorneys’ fees, addressing eligibility, entitlement, reasonability, and any adjustments that may arise. The Court will then discuss Brighthouse’s request for brokerage commission costs, investigate costs, and expenses. A. Attorneys’ fees. The Court will first assess if the Plaintiff has established eligibility and entitlement to attorneys’ fees. Then the Court will examine if the fees and hours requested are reasonable. Finally, the Court will examine if the fees need to be adjusted. 1. Eligibility There are two criteria for eligibility under 12-341(A): “(1) the moving party must be the successful party and (2) the action must arise out of a contract. A party is successful if it accomplished the result sought in litigation.” Rindlisbacher v. Steinway & Sons Inc., 2021 WL 2434207, at *4 (D. Ariz. May 26, 2021), aff'd sub nom. Rindlisbacher v. Steinway, Inc., No. 20-17331, 2021 WL 6067258 (9th Cir. Dec. 20, 2021) (internal quotations and citations omitted). Brighthouse was successful in their action against Defendant on or about August 25, 2023, when this Court entered Default Judgement in its favor. (Doc. 26 at 5). Plaintiff’s claims arose out of a contract. (Id. at 5.) Plaintiff is therefore eligible. Rindlisbacher, 2021 WL 2434207 at *5. 2. Entitlement Eligibility under A.R.S. § 12-341.01(A) alone is not sufficient to establish an entitlement to fees. Harris v. Maricopa Cnty. Superior Ct., 631 F.3d 963, 974 (9th Cir. 2011). Brighthouse asserts that because they were successful on all claims, they are entitled to an award. (Doc. 26 at 6 (“A.R.S. § 12.341-01(A)[sic] provides for the recovery of attorneys’ fees by the successful party in an action arising out of contract.”)) The Court has discretion to determine the circumstances appropriate for the award of fees, guided by the factors in Associated Indem. Corp. v. Warner, 143 Ariz. 567, 570, 694 P.2d 1181, 1184 (1985). Harris, 631 F.3d at 974. The factors are (1) the merits of the unsuccessful party's claims; (2) whether “[t]he litigation could have been avoided or settled;” (3) whether a fee award “would cause an extreme hardship;” (4) whether the successful party prevailed in full; (5) “the novelty of the legal question;” and (6) whether an award would overly deter others from asserting tenable claims or defenses. Rindlisbacher, 2021 WL 2434207, at *6. When considering these factors, the Court should bear in mind the purposes of § 12-341.01, which includes: (1) mitigating “the burden of the expense of litigation to establish a just claim or a just defense;” (2) encouraging “more careful analysis prior to filing suit” by imposing th

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