Burns Concrete, Inc. v. Teton Couny
| Decision Date | 12 May 2023 |
| Docket Number | 49463 |
| Parties | BURNS CONCRETE, INC., an Idaho corporation; and BURNS HOLDINGS, LLC, an Idaho limited liability company, Plaintiffs-Counterdefendants- Appellants-Cross Respondents, TETON COUNTY, a political subdivision of the State of Idaho, Defendant-Counterclaimant- Respondent-Cross Appellant. |
| Court | Idaho Supreme Court |
UNPUBLISHED OPINION
Appeal from the District Court of the Seventh Judicial District of the State of Idaho, Teton County. Dane H. Watkins, Jr. District Judge.
The judgment of the district court is affirmed.
Parsons Behle &Latimer, Boise, for Appellants. Robert B Burns argued.
Hall Angell &Associates, LLP, Idaho Falls, for Respondent. Blake G. Hall argued.
This appeal concerns the district court's award of attorney fees to Burns Concrete, Inc., and Burns Holdings, LLC (collectively "Burns"). After extensive litigation Burns prevailed on the merits of its claims and judgment was entered against Teton County. The district court awarded Burns attorney fees pursuant to the parties' development agreement. Both Burns and Teton County appeal, arguing the district court abused its discretion in awarding the fees. Burns argues the district court should have awarded more fees, while Teton County argues it should have denied the fees or awarded less fees. For the reasons discussed below, we affirm the district court.
In 2006, Burns purchased property in Teton County upon which it intended to build and operate a concrete manufacturing facility. Burns Concrete, Inc. v. Teton County, 168 Idaho 442, 447, 483 P.3d 985, 990 (2020) ("Burns 2020"). Shortly thereafter, Burns entered into a development agreement with Teton County concerning the facility. Id. Burns later sued Teton County in May 2013, asserting causes of action for breach of the development agreement and rescission, a declaratory judgment, and unjust enrichment. Id. Teton County counterclaimed, seeking declaratory judgment and alleging breach of contract. Id. The litigation was lengthy and continued for eight years and included two prior appeals to this Court.
For much of the litigation, Burns maintained a traditional, hourly-based attorney fee agreement with its law firm, Parsons Behle &Latimer. Id. at 449, 483 P.3d at 992. By the time of trial, Burns claimed that it could no longer meet its financial obligations to Parsons Behle "on a reasonably current basis." Id. Shortly after the trial concluded, but before the district court issued its findings of fact and conclusions of law, Burns and Parsons Behle entered into a new fee agreement. See id.
The new agreement provided for different hourly rates depending on when the fees were paid:
Id. at 461, 483 P.3d at 1004. The new fee agreement required Burns to pay enhanced attorney fees in the amount of triple the hourly rate if fees were not paid within 120 days of their invoice date. Id. at 449, 461, 483 P.3d at 992, 1004. However, Burns was only required to pay this increased rate out of money collected from Teton County. Id. at 449, 483 P.3d at 992. In Burns 2020, we referred to this agreement as a "contingency fee agreement" and will, for the sake of consistency, maintain that label here. See id.
This appeal concerns two of the district court's orders that awarded fees pursuant to the modified contingency fee agreement. The litigation between Burns and Teton County was extensive. As previously mentioned, this is the third time this Court has considered this lawsuit on appeal. The conflict between these parties also produced an appeal in another case. See Burns Holding, LLC v. Teton Cnty. Bd. of Comm'rs, 152 Idaho 440, 272 P.3d 412 (2012).
The first appeal followed the district court's grant of summary judgment to Teton County. In 2016, this Court reversed that grant of summary judgment and remanded the case to the district court for further proceedings. See generally Burns Concrete, Inc. v. Teton County, 161 Idaho 117, 384 P.3d 364 (2016) ("Burns 2016"). On remand, the district court granted partial summary judgment in Burns' favor on its breach of contract claim, and the case proceeded to a court trial on damages. Burns 2020, 168 Idaho at 449, 483 P.3d at 992. The district court awarded Burns more than $1 million in damages. Id. at 450, 483 P.3d at 993. The district court entered judgment for that amount and both parties again appealed to this Court. Id.
Shortly after filing its second appeal, Burns filed a memorandum of costs and attorney fees pursuant to the attorney fee provision in the parties' development agreement. Id. Burns sought $1,071,753.73 in attorney fees. Id. The district court awarded $792,529.25 ("first fee order"). Id. Teton County appealed the order. Id.
Burns then filed its first supplemental fee request seeking attorney fees incurred since its first request and for enhanced attorney fees pursuant to the modified contingency fee agreement. Id. The district court awarded Burns $16,254.50 of its requested $88,603.50 in attorney fees ("first supplemental fee order"). Id. Burns cross-appealed the district court's first fee order and first supplemental fee order. Id.
The three appeals were consolidated and constituted the second appeal heard by this Court in this case. See generally Burns 2020, 168 Idaho 442, 483 P.3d 985. Our decision in the second appeal affirmed the district court's grant of partial summary judgment to Burns on its breach of contract claim, but vacated the district court's award of damages and its attorney fee orders. Id. at 463, 483 P.3d at 1006. On the damages award, we remanded the case with instructions to increase the damages awarded to Burns. Id. On the attorney fee award, we held that the district court had abused its discretion by failing to adequately explain the basis for its award. See id. at 461-62, 483 P.3d at 1004-05. We also provided guidance to the district court on how it should assess the reasonableness of the "unconventional fee agreement" between Burns and Parsons Behle, explaining that the district court should consider several factors related to contingency fee agreements. Id. Finally, we denied Burns' request for an award of attorney fees incurred in the appeal. Id. at 463, 483 P.3d at 1006.
Following the second remand, the district court entered a memorandum decision and order concerning damages and attorney fees. Relevant to this appeal, the district court affirmed the $792,529.25 awarded in the first fee order. The district court explained that Burns originally sought $1,071,753.73 in attorney fees, $514,672.77 of which was computed at the normal hourly rate and $557,080.96 of which was computed at the enhanced hourly rate. The district court affirmed all but $684 of the normal rate fees. The district court also affirmed its award of $278,540.48 in enhanced fees, and provided additional explanation for its decision.
In affirming the enhanced fees, the district court noted the extensive litigation that had occurred prior to Burns entering the contingency fee agreement and the attorney fees incurred to that point "understandably impacted [Burns'] business operations." Further, the district court considered the risks Burns was facing when it entered the contingency fee agreement, including the risks associated with recovering damages that involved "highly contested issues and evidence[.]" The district court also considered the risks faced by Parsons Behle, which it found were "more difficult to measure." Ultimately, the district court concluded that an award for 300% of the hourly rate was unreasonable, but that an award for 200% of the hourly rate fees was reasonable.
The district court then addressed its first supplemental fee award. The district court determined that it failed to award enough attorney fees after considering the factors in Idaho Rule of Civil Procedure 54(e)(3) and the guidance provided by this Court in Burns 2020. The district court stated it found significance in this Court's guidance that a contingency fee agreement that was reasonable when entered into does not become unreasonable simply because more attorney fees are ultimately recovered than would have been recovered under an hourly fee agreement. Thus, the district court awarded a portion of the enhanced hourly rate fees it had originally denied in its first supplemental fee order.
Following the district court's memorandum decision and order on remand, the parties litigated issues related to pre- and post-judgment interest. On May 7, 2021, the district court entered its amended judgment ("first amended...
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