IDAHO TRANSPORTATION DEPARTMENT, Plaintiff-Appellant, v. ASCORP, INC., d/b/a Debco Construction, Defendant-Respondent.
No. 42018.
Supreme Court of Idaho, Boise, September 2015, Term.
Sept. 25, 2015.
357 P.3d 863
request for proposals and because that question is not an issue on appeal, we hold that it was not an alternative independent ground as to whether the Trade Secrets Act wаs violated. Therefore, Simmons Sanitation is not entitled to an award of attorney fees on appeal based upon the alleged failure of Walco to appeal an alternative independent ground for the district court‘s judgment.
IV. Conclusion.
We affirm the judgmеnt of the district court and we award Respondents costs on appeal.
Chief Justice J. JONES, Justices BURDICK, W. JONES, and J. Pro Tem HOSACK concur.
Blewett & Mushlitz, LLP, Lewistоn, attorneys for respondent. Ron Blewitt argued.
WALTERS, J. pro term.
This is an appeal from an order of the district court awarding attorney fees to Ascorp, Inc. d/b/a Debco Construction (Debco) against the Idaho Transportation Department (ITD) in a declaratory judgmеnt action filed by ITD to determine rights of the parties with respect to a contract for highway construction services on a project in Twin Falls, Idaho. The district court dismissed the action upon Debco‘s motion under Idaho Rule of Civil Procedure 12(b)(6) and awarded attorney fees to Debco under
I. FACTUAL AND PROCEDURAL BACKGROUND
While somewhat сonvoluted in its background, this appeal stems from a dispute over amounts due and owing under a state highway contract. Debco Construction and ITD entered into a contract whereby Debco agreed to provide construction services on a stаte highway project in Twin Falls, Idaho, known as the Washington Street Project. The contract included a process (Specifications) for adjustment of the construction price and contained provisions covering alternative dispute resolution, a review process for all claims arising under the contract, and a binding arbitration clause. The interplay of these Specifications was at the core of the dispute underlying this lawsuit. During the course of the construction project at issue, ITD agreed tо certain adjustments that increased the amount paid to Debco. In addition to these already-paid increases, Debco asserted that approximately $3,000,000 was due and owing to Debco. This action as originally filed centered on how Debcо attempted to collect these additional amounts.
Under the terms of the Specifications, ITD had the opportunity to resolve all claims by way of a claims review process prior to being subjected to binding arbitration. The review process, titled “Administrative Process,” required submission of any claim to ITD‘s engineers. Debco filed a claim with ITD seeking payment of an additional $3,120,982.74.1 This constituted the start of the claims review process outlined in the Specifications. One day later, however, Debco filed an аrbitration demand with the American Arbitration Association (AAA), the entity identified in the Specifications. So as to avoid any waiver in the AAA proceedings, ITD responded to the arbitration demand and also filed a motion with AAA to stay the proceedings pending exhaustion of ITD‘s claims review process. Debco opposed ITD‘s motion to stay, and AAA denied ITD‘s motion by email notice to counsel for both parties. The assigned arbitrator stated, “Absent mutual agreement or court order, [AAA] shall proceed with the administration of this matter.”
In response to Debco‘s resort to arbitration, ITD commenced the instant action in district court for declaratory and injunctive relief to enforce the contract‘s claims review provision. ITD alleged that Debco had failed to exhаust the claims process outlined in the Specifications prior to demanding arbitration. ITD asserted the provision in the construction
While Debco‘s motion to dismiss was pending before the district court, AAA scheduled a preliminary arbitration hearing and requested initial payment from the parties on or before the scheduled hearing. Based on this pending hearing and AAA‘s request for initial payment, ITD filed motions with the district court sеeking a temporary restraining order (TRO) and a preliminary injunction to enjoin the arbitration proceedings. The next day, Debco filed an opposition to ITD‘s request for temporary and injunctive relief on grounds that Debco had paid both parties’ initial AAA fеes. At a telephonic conference, the district court denied ITD‘s motion for a TRO reasoning that Debco‘s payment of the AAA fees removed the pending harm to ITD.
AAA held a preliminary arbitration hearing. Based on ITD‘s request for more time to administer its claims process, the arbitration panel refused to schedule a full arbitration hearing on the merits of Debco‘s claim. Given the extension granted by AAA, ITD withdrew its motion seeking a preliminary injunction. The district court subsequently held a hearing on Debco‘s motion to dismiss ITD‘s complaint. At the conclusion of the hearing, the court ruled from the bench, granting the motion and dismissing ITD‘s complaint pursuant to Idaho Rule of Civil Procedure 12(b)(6) based on its interpretation of this Court‘s decision in Storey Construction, Inc. v. Hanks, 148 Idaho 401, 224 P.3d 468 (2009). The district court issued a written order memorializing its oral ruling and entered a sеparate judgment in Debco‘s favor on all claims asserted against Debco in ITD‘s complaint.2 Debco sought an award for costs and attorney fees. Over ITD‘s objection, the court awarded Debco approximately $25,000 in attorney fees and costs.
ITD appealed the district court‘s dismissal of its complaint, as well as the award of attorney fees and costs to Debco. After the case was set for argument before this Court, counsel for ITD filed a notice of settlement and memorandum agreemеnt in mediation advising of the “full and final settlement and resolution of all claims of any nature whatsoever arising out of their contractual relationship on the Washington Street Project.” The agreement recited that the settlement “does not affect the pending Supreme Court appeal (Idaho).” Based on this filing, this Court vacated the scheduled argument and conditionally dismissed the appeal. In response, Debco moved for this Court to reinstate the appeal so as to allow argument on the issue of attorney fees, which was encompassed by the appeal. This Court reset the matter for argument on the issue of attorney fees only.
II. ISSUES ON APPEAL
- Whether the district court erred in awarding attorney fees and costs to Debco.
- Whether attorney fees and cоsts on appeal should be awarded.
III. STANDARD OF REVIEW
The awarding of attorney fees and costs is within the discretion of the trial court and subject to review for an abuse of discretion. Smith v. Mitton, 140 Idaho 893, 897, 104 P.3d 367, 371 (2004). When we consider whether a trial court abused its discretion, the standard is whether the cоurt perceived the issue as discretionary, acted within the boundaries of its discretion and consistently with the legal standards applicable to the specific choices available, and reached its decision by and exercise of reason. Magleby v. Garn, 154 Idaho 194, 196-97, 296 P.3d 400, 402-03 (2013). Whether an action is based on a commercial transaction is a question of law over which this Court exercises free review. Intermountain Real Props., LLC v. Draw, LLC, 155 Idaho 313, 320, 311 P.3d 734, 741 (2013).
A. The district court‘s award of attorney fees to Debco.
Following the district court‘s grant of Debco‘s motion to dismiss ITD‘s complaint, Debco sought, and the district court awarded, attorney fees and costs under
In any civil action to recover on an open account, account stated, note, bill negotiable instrument, guaranty, or contract relating to the purchase or sale of goods wares, merchandise or services and in any commercial transaction unless otherwise provided by law, the prevailing party shall be allowed a reasonable attorney‘s fee to be set by the court, to be taxed and collected as costs.
The term “commercial transaction” is defined to mean all transactions except transactions for personal or household purposes. The term “party” is defined to mean any person, partnership, corporation, association, private organization, the state оf Idaho or political subdivision thereof. The only deficiency identified by ITD regarding the district court‘s fee award under
“Whether a district court has correctly determined that a case is based on a commercial transaction for the purpose of [
Here, ITD‘s declaratory and injunctive action was based upon the enforceability of a covenant contained in a highway construction contract vis-a-vis resorting tо arbitration without first exhausting a review process specified in the contractual provisions. A highway construction contract clearly qualifies as a commercial transaction; it is not a transaction for personal or household purposеs. The plain language of
We hold that the district court did not err in determining that the gravamen of ITD‘s declaratory judgment action seeking enforcement of contractual provisions concerned a commercial transaction for the purpose of
B. Attorney fees and costs on appeal.
On appeal, Debco requests attorney fees on three grounds:
V. CONCLUSION
The district court‘s award of attorney fees and costs pursuant to
Chief Justice J. JONES, Justices EISMANN, BURDICK and HORTON concur.