Idaho Transportation Department v. Ascorp, Inc.
159 Idaho 138
Idaho2015Background
- Debco (Ascorp, Inc.) and the Idaho Transportation Department (ITD) contracted for the Washington Street highway construction project; the contract contained a claims review (administrative) process and a binding arbitration clause.
- Debco submitted a formal claim for about $3.12 million to ITD engineers (starting the contract review process) and the next day demanded arbitration under the contract.
- ITD sought to enforce the contract’s claim-review requirement by filing a declaratory judgment and injunctive action in district court, arguing Debco failed to exhaust the administrative process before arbitration.
- Debco moved to dismiss, asserting procedural arbitrability is for the arbitrator to decide; the district court granted Debco’s Rule 12(b)(6) motion and entered judgment for Debco.
- The district court awarded Debco attorney fees and costs under Idaho Code § 12-120(3) (commercial transactions). ITD appealed the fee award; the parties later settled the underlying monetary dispute but preserved the appeal over fees.
- The Idaho Supreme Court affirmed the fee award and granted Debco appellate fees under § 12-120(3).
Issues
| Issue | Plaintiff's Argument (ITD) | Defendant's Argument (Debco) | Held |
|---|---|---|---|
| Whether § 12-120(3) attorney fees apply where the suit is a declaratory/injunctive action enforcing contractual procedures | ITD: The suit sought declaratory and injunctive relief, not recovery on a commercial transaction, so § 12-120(3) does not apply | Debco: The gravamen was enforcement/interpretation of a construction contract (commercial transaction), triggering § 12-120(3) | Held: § 12-120(3) applies because the gravamen of ITD’s action was the contractual commercial transaction; fee award affirmed |
| Whether a declaratory judgment label precludes application of § 12-120(3) | ITD: Labeling the action declaratory means it is not an action "to recover" under § 12-120(3) | Debco: A declaratory action enforcing contractual rights still rests on a commercial transaction and falls within the statute | Held: Label alone does not preclude § 12-120(3) if the claim’s gravamen is contractual/commercial |
| Entitlement to appellate attorney fees under § 12-120(3) | ITD: (implicit) appellate fees not warranted if statute inapplicable | Debco: Having prevailed below and on appeal, Debco is entitled to fees on appeal under § 12-120(3) | Held: Debco awarded appellate attorney fees under § 12-120(3) |
| (Procedural) Whether district court erred in dismissing ITD’s complaint | ITD: District court wrongly dismissed; arbitrator should decide procedural arbitrability | Debco: Dismissal was proper under Storey Construction guidance | Held: Court did not resolve Storey correctness due to settlement; fee ruling affirmed without addressing correctness of dismissal in detail |
Key Cases Cited
- Storey Constr., Inc. v. Hanks, 148 Idaho 401, 224 P.3d 468 (Idaho 2009) (addressed arbitrability and related procedural issues)
- Freiburger v. J-U-B Engineers, Inc., 141 Idaho 415, 111 P.3d 100 (Idaho 2005) (labeling a suit as declaratory does not preclude § 12-120(3) if gravamen is contractual)
- Continental Cas. Co. v. Brady, 127 Idaho 830, 907 P.2d 807 (Idaho 1995) (claims alleging contractual relationships covered by § 12-120(3) trigger the statute)
- Garner v. Povey, 151 Idaho 462, 259 P.3d 608 (Idaho 2011) (whether a case is based on a commercial transaction under § 12-120(3) is reviewed as a question of law)
- Brower v. E.I. DuPont De Nemours & Co., 117 Idaho 780, 792 P.2d 345 (Idaho 1990) (§ 12-120(3) applies when the commercial transaction comprises the gravamen of the lawsuit)