American Power Products Inc. v. CSK Auto, Inc.

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Ariz. Rev. Stat. 12-341.01(A) provides that if a party makes a written settlement offer that is rejected, and the final judgment is more favorable to the offering party, that party “is deemed to be the successful party from the date of the offer.” American Power Products (American) and CSK Auto (CSK) entered into a contract that provided that, in the event of an action arising out of the contract, “the prevailing party shall be entitled to recover…reasonable attorneys’ fees.” American later sued CSK for breach of contract. Before trial, CSK served American with an offer of judgment in the amount of $1,000,001. American did not accept the offer and obtained a jury verdict in the amount of $10,733. The trial court concluded that American was the “prevailing party” at trial and awarded American attorney fees. The court of appeals affirmed the fee award. The Supreme Court reversed, holding (1) because the contract did not define “prevailing party” but did incorporate Arizona law to determine the parties’ rights and remedies, the statute applied for the purpose of determining the successful party; and (2) the trial court correctly determined that American was the prevailing party before CSK’s offer of judgment but erred in ruling that American was the prevailing party after CSK’s settlement offer. View "American Power Products Inc. v. CSK Auto, Inc." on Justia Law