Bingham v. Montane Resource Associates

• Decision Date: 03 September 1999
• Docket Number: No. 24316.,24316.
• Citation: 133 Idaho 420,987 P.2d 1035
• Parties: Ivan F. BINGHAM and Marti E. Bingham, Plaintiffs-Appellants-Cross Respondents, v. MONTANE RESOURCE ASSOCIATES, a partnership, Defendant-Respondent-Cross Appellant.
• Court: Idaho Supreme Court

987 P.2d 1035

133 Idaho 420

Ivan F. BINGHAM and Marti E. Bingham, Plaintiffs-Appellants-Cross Respondents, v. MONTANE RESOURCE ASSOCIATES, a partnership, Defendant-Respondent-Cross Appellant.

No. 24316.

Supreme Court of Idaho, Boise, May 1999 Term.

September 3, 1999.

Nielson & Reece, P.L.L.C., Pocatello, for appellants. Nick L. Nielson argued.

Dial, Looze & May, Pocatello, for respondent. John K. Looze argued.

TROUT, Chief Justice.

This is an appeal from the district judge's order awarding the respondent/cross-appellant Montane Resource Associates (Montane), attorney fees and costs. The appellants/cross-respondents, Ivan and Marti Bingham (the Binghams), appeal the award of fees pursuant to I.C. § 45-413 and the award of discretionary costs. Montane cross-appeals the denial of fees under I.C. §§ 12-120 and 12-121.

I. FACTUAL AND PROCEDURAL BACKGROUND

The underlying suit upon which the attorney fees and costs were awarded involved property and timber initially owned by Richard and Linda Greene (the Greenes). Richard Greene contracted with Montane to provide logging services for the timber on the land and while that contract was being performed, the Greenes sold the land to Heber Jacobsen and his wife, Christine Lake (the Jacobsens), in January 1995. The Jacobsens leased the land back to the Greenes and also gave them an option to repurchase the land. Montane finished its work after the transfer of the land between the Greenes and the Jacobsens was complete. However, Montane was allegedly not paid under the terms of the contract. On September 1, 1995, Montane recorded a loggers' lien to secure payment for services rendered and filed suit against the Greenes and Jacobsens on February 14, 1996 to start foreclosure proceedings.

On May 17, 1996, the Binghams purchased the property from the Jacobsens. The Binghams were aware of the loggers' lien at the time of the purchase and intended to satisfy the lien. A default judgment was subsequently entered against the Greenes and Jacobsens on July 15, 1996, holding them liable in the amount of $15,897.05¹ and giving Montane the right to foreclose the lien. On December 13, 1996, the Binghams filed an action against Montane asking the district judge to declare the loggers' lien invalid, to quiet title in the real property in their name, and to award damages. On January 27, 1997, Montane filed a motion to dismiss and on February 11, 1997, the Binghams filed a motion for summary judgment. The district judge twice heard oral argument on the motion to dismiss and subsequently allowed the Binghams to amend their complaint to allege an ownership interest in the logs on the property. Montane answered the amended complaint on March 21, 1997, at that time asserting that the complaint was barred by the doctrine of res judicata. On March 24, 1997, the district judge heard argument on the Binghams' motion for summary judgment and on May 23, 1997, issued a memorandum decision and order granting Montane's motion to dismiss and denying the Binghams' summary judgment motion. The district judge held that the Binghams' claims were indeed barred by res judicata. The Binghams did not appeal the district judge's decision on the motion for summary judgment and motion to dismiss.

Montane, as prevailing party on the motions, then sought to recover attorney fees and costs. The district judge, in a November 12, 1997 decision, awarded attorney fees in the amount of $5,899.00 to Montane under I.C. § 45-413, a statute allowing a court to award attorney fees for persons claiming a lien against property. The district judge declined to base an award of attorney fees on I.C. § 12-120(1) and (3), or I.C. § 12-121. First, the district judge reasoned that attorney fees pursuant to I.C. § 12-120(1) were not appropriate because the amount pled was not $25,000 or less. Second, the judge denied fees under I.C. § 12-120(3), holding that there was no contractual or commercial relationship between Montane and the Binghams. Third, the judge held that attorney fees under I.C. § 12-121 were not appropriate because some of the Binghams' claims were not frivolous. The district judge also awarded discretionary costs of $91.96 and costs as a matter of right in the amount of $42.00 to Montane. Both parties now appeal.

II. BINGHAMS' CLAIMS ON APPEAL

A. The district judge erred in awarding attorney fees, sua sponte, to Montane pursuant to I.C. § 45-413.

1. Standard of Review

The Binghams' claim that the district judge improperly awarded fees under I.C. § 45-413 is based on a number of arguments. The central argument, however, is that Montane's loggers' lien was invalid and as such, had the lien been examined, Montane would not have been able to foreclose on the lien and Montane would have had no basis for an award of attorney fees under I.C. § 45-413. Ultimately, the Binghams' claim focuses on interpreting I.C. § 45-413 to determine whether fees under that statute are properly awarded given the facts of the case. When a dispute centers around whether the district judge properly awarded attorney fees under a statute in the first instance, the Court exercises free review. The determination of the meaning of a statute and its application is a matter of law. J.R. Simplot Co., v. Western Heritage Ins. Co., 132 Idaho 582, 583, 977 P.2d 196, 197 (1999).

2. Attorney Fees pursuant to I.C. § 45-413

Montane made its request for attorney fees by asserting a counterclaim for fees in its answer to the Binghams' amended complaint. In the counterclaim, Montane asserted that because it had been necessary for it to retain the services of an attorney, it was then entitled to reasonable attorneys fees pursuant to I.C. §§ 12-120, 12-121 and I.R.C.P. 54. After the district judge's ruling on the Binghams' claims holding that the claims were barred by res judicata, Montane filed a Memorandum of Costs in which it asserted a right to costs as a matter of right, discretionary costs and attorney fees under I.C. §§ 12-121 and 12-120. Specifically, Montane argued that "this is a commercial transaction by reason of the logs upon which the disputed lien attached were cut to be sold for commercial purposes and the amount claimed is under $25,000." Additionally, at the hearing on fees and costs, Montane argued for attorney fees based on I.C. §§ 12-120(1), 12-120(3), and 12-121. At no point did Montane assert that it was entitled to fees under I.C. § 45-413. Rather, the district judge awarded fees under I.C. § 45-413 sua sponte, reasoning that because the Binghams' claim was the same as the claim in the foreclosure action against the Greenes and Montane would have been entitled to fees in that earlier action, I.C. § 45-413 applied to the current action.

The district judge's underlying assumption that he had the power to award fees on a basis not asserted by Montane is erroneous. In order to be awarded attorney fees, a party must actually assert the specific statute or common law rule on which the award is based; the district judge cannot suasponte make the award or grant fees pursuant to a party's general request. The Idaho Court of Appeals addressed this issue in Fournier v. Fournier, 125 Idaho 789, 791-92, 874 P.2d 600, 602-03 (Ct.App.1994). In Fournier, Barbara Fournier brought a motion to compel Dayton Fournier to comply with a stipulation for a professional evaluation. Barbara also sought attorney fees. The motion did not specify under which statute it was being filed nor did the request for attorney fees state any statute or rule upon which the request was made. After a hearing, the magistrate judge ordered Dayton to comply with the stipulation and also awarded attorney fees, but did not state the basis for the award, only noting that it did so "[a]cting as a court of equity." Id. at 790, 874 P.2d at 601. On review, the Court of Appeals stated that in Idaho, "there is no equitable authority to award attorney fees generally." Id. at 791, 874 P.2d at 602. The court noted that although attorney fee awards had previously been approved based on the "right result/wrong theory" rule, due process considerations require additional limitations to the rule. The court stated:

At the very least, a statutory or contractual justification for an award of fees must be advanced below by the party seeking such an award. Without such a limitation, a party may be subject to an award against it while being given no opportunity to raise relevant facts or to argue applicable legal principles. The opportunity to be heard and advance legal argument on dispositive issues is essential to proper procedure.

Id. The court then held that if a particular statute, rule or contract is not advanced below, it cannot be a basis for upholding an award of attorney fees on appeal. Id. at 792, 874 P.2d at 602-03. While in that case there were various valid post hoc justifications for awarding attorney fees, the court noted that it was not the task of the reviewing court to search out statutory support for the award of fees below; rather, the "support must be garnered by the court and counsel at the time the award is requested ...." Id.

Similarly, this Court has held that where a party does not state the basis for a claim for attorney fees on appeal, the claim will be denied. We stated that I.A.R. 35(a)(5), which requires a statement of the basis for a claim for attorney fees on appeal to be included in the claimant's brief, is "necessary in order to allow the responding party a due process opportunity to challenge such claims." Curr v. Curr, 124 Idaho 686, 694, 864 P.2d 132, 140 (1993).

We find that the Idaho Court of Appeals' reasoning in Fournier is sound and similarly hold that it is incumbent on the moving party to assert the grounds upon which it seeks an award of attorney fees. The district judge is not empowered to award fees on a basis not asserted by the moving party. As the Fournier court noted, "[t]he opportunity to be heard and advance legal argument on...