Lotto Industries, Inc. v. Disabled American Veterans Phoenix, Chapter No. 1

MEMORANDUM **

Lotto Industries Inc. (“Lotto”) brought a diversity action against Disabled American Veterans Phoenix Chapter 1 (“DAV”) alleging breach of contract. Following a bench trial, the district court ordered the parties to bear their own attorneys’ fees and costs. Lotto appeals this determination. We affirm.

We review the district court’s refusal to award attorneys’ fees and costs for abuse of discretion. See Champion Produce, Inc. v. Ruby Robinson Co., Inc., 342 F.3d 1016, 1020 (9th Cir.2003). “An award of attorneys’ fees incurred in a suit based on state substantive law is generally governed by state law.” Id. at 1024 . The controlling Arizona law does not require the trial court to award fees in all contract disputes. See Ariz.Rev.Stat. § 12-341-01.A (2004). The district court properly considered the factors set forth in Associated Indem. Corp. v. Warner, 143 Ariz. 567 , 694 P.2d 1181 (Ariz.1985) (en banc), in determining whether a fee award was appropriate. The district court did not deny Lotto the opportunity to pursue attorney’s fees through a Rule 54(d)(2) motion; the issue was squarely presented to the court in the proposed findings and conclusions submitted by…