Cole v. Kunzler

• Decision Date: 01 February 1989
• Docket Number: No. 17012,17012
• Citation: 768 P.2d 815,115 Idaho 552
• Court: Idaho Court of Appeals
• Parties: Stanley G. COLE and Mark J. Taylor, individually and d/b/a Cole & Taylor, Attorneys at Law, a partnership, and Stanley G. Cole Law Offices, Plaintiffs-Appellants, v. Floyd W. KUNZLER and Irva Kunzler, husband and wife, Defendants-Respondents.

Page 815

768 P.2d 815

115 Idaho 552

Stanley G. COLE and Mark J. Taylor, individually and d/b/a Cole & Taylor, Attorneys at Law, a partnership, and Stanley G. Cole Law Offices, Plaintiffs-Appellants, v. Floyd W. KUNZLER and Irva Kunzler, husband and wife, Defendants-Respondents.

No. 17012.

Court of Appeals of Idaho.

Feb. 1, 1989.

Raymundo G. Pena, Rupert, for plaintiffs-appellants.

Alfred E. Barrus, Barrus, Bywater & Smyser, Burley, for defendants-respondents.

WALTERS, Chief Judge.

This case involves application of the doctrine of res judicata in an action brought by two attorneys to collect fees allegedly due them from a former client. The collection action was filed in the magistrate division of the district court. On motion for summary judgment filed by the defendants (one of them being the former client), the trial judge held that the claim was barred by an adjudication previously made in favor of the client in another action instituted by one of the attorneys to enforce a lien for recovery of the fees. The court also awarded costs and attorney fees to the defendants for defending the instant action and, further, denied a motion by the attorneys for an award to them of fees incurred as the result of a continuance granted to the defendants during the proceedings. The trial court's determinations were upheld on appeal to the district court. We also affirm the trial court's judgment.

The case comes to us with the following background. The appellants, Stanley Cole and Mark Taylor, practiced law together. Their office was in Rupert, Idaho. Taylor represented Floyd Kunzler (one of the defendants herein) in a dispute involving the administration of the estate of Kunzler's father in neighboring Cassia County. ¹ Kunzler was an heir in the estate, and, for a time, served as personal representative of the estate. During pendency of the estate proceeding and before the assets remaining in the estate had been distributed to the heirs, Taylor and Cole severed their business relationship. In that process, Cole evidently assumed control over their account receivable for fees allegedly due from Kunzler. Cole filed a petition in the estate proceeding, seeking an adjudication and enforcement of the right of Cole and Taylor to an attorney's lien under I.C. § 3-205 ², in the amount of $5,238.20, against the assets of the estate distributable to Floyd Kunzler.

An evidentiary hearing on Cole's petition was held before the magistrate presiding over the administration of the estate. At that hearing, Cole relied upon his affidavit--filed with his petition--to support his claim, and Floyd Kunzler testified in person. The magistrate subsequently entered a written decision and order denying relief to Cole. The magistrate determined that Cole had failed to prove he and Taylor were entitled to any fees beyond the amount Kunzler already had paid them for representation in the controversy involving the estate. Cole later filed a motion for reconsideration of the magistrate's ruling. The motion was denied.

Cole did not appeal in the Cassia County proceeding. Instead, Cole and Taylor filed another action--this time in Minidoka County--directly against Floyd Kunzler and his wife, Irva. ³ In that action, the present one, Cole and Taylor alleged the Kunzlers were indebted to them in the amount of $5,238.20 on an account stated theory. To secure recovery of the amount sought in their complaint together with fees for pursuing the action, Cole and Taylor obtained a writ of attachment directed to the First Interstate Bank, N.A., in Burley, Cassia County, Idaho, ordering the bank to keep in its possession and not to release to the Kunzlers, $7700 distributable to Floyd Kunzler from the estate of Kunzler's father. ⁴ The writ included a temporary restraining order enjoining Kunzler from disposing of his interest in the property held by the bank, but provided that he could obtain possession of the property by filing, with the clerk of the court, a written undertaking (in a specified amount) executed by two or more sureties. Conjunctively, the court issued an order to the Kunzlers directing them to appear before the court at a scheduled hearing and show cause why the writ of attachment should not remain in force during the pendency of the action.

The Kunzlers appeared in person before the court, in compliance with the order to show cause. Because they were not represented by counsel, upon their request the proceeding was continued for one week, to permit them to obtain an attorney. Counsel for Cole and Taylor objected to the continuance, unsuccessfully. He also moved for an order allowing him attorney fees against the Kunzlers for preparation for the show cause hearing. The court took that motion under advisement.

Within the time frame allowed by the court, an attorney filed a notice of appearance for the Kunzlers. He also filed a motion to dismiss Cole's and Taylor's action and, later, an answer to their complaint. As an affirmative defense, the Kunzlers alleged that Cole's and Taylor's claim for collection of their account had been litigated and adjudicated previously and was therefore barred by the doctrine of res judicata. Because this action purportedly was barred, the Kunzlers also requested an award of attorney fees for defending the action, contending that the suit was frivolous, unreasonable and without foundation. Simultaneous with that answer, an affidavit by Floyd Kunzler was filed, outlining the lien-claim proceedings in the estate matter in Cassia County. Kunzlers' counsel followed up with a motion for summary judgment.

In the process of considering the summary judgment motion, the court and counsel listened to a tape recording of the proceeding held before the Cassia County magistrate on the petition to adjudicate the attorney's lien. ⁵ Copies of documents connected with that proceeding also were presented to the court. They included Cole's petition to adjudicate the claim of lien; his affidavit supporting the petition; the written decision and order of the magistrate denying the petition; Cole's motion to reconsider the magistrate's ruling; and the magistrate's written decision and order denying that motion.

Following oral arguments, supplemented by written briefs submitted on behalf of the parties, the court granted summary judgment to the Kunzlers. The court determined that the entitlement of Cole and Taylor to fees from Floyd Kunzler had been litigated previously in the estate proceeding in Cassia County, and that relitigation of their claim was barred.

Having prevailed, the Kunzlers applied to the court for an order allowing recovery of attorney fees and costs incurred in defending the action. Over timely objection by Cole and Taylor, the court granted the Kunzlers' request. The court found that the Kunzlers were entitled to the award upon two grounds. First, the court reasoned that the prejudgment attachment statute, I.C. § 8-503, renders the plaintiff responsible for all costs (including attorney fees) awardable to a defendant who prevails in an action where a writ of attachment has been issued. Second, the court held that Cole's and Taylor's action was brought unreasonably and became frivolous once the res judicata defense became clearly apparent, thus permitting an award of fees and costs also on those grounds. See I.R.C.P. 54(e)(1); I.C. § 12-121. Finally, the court denied the request for fees incurred by counsel for Cole and Taylor in preparation for the first hearing in this case.

On appeal by Cole and Taylor to the district court, the summary judgment and the trial court's orders with respect to fees and costs were affirmed. ⁶ Cole and Taylor then appealed to this Court.

Cole and Taylor submit three issues for determination: (1) whether the trial court erred in granting summary judgment to the Kunzlers on the basis of res judicata; (2) whether the trial court abused its discretion in awarding costs and attorney fees to the Kunzlers; and (3) whether the trial court erred in refusing to award fees to Cole and Taylor incurred as a result of the continuance granted to the Kunzlers. We will address each of these issues in turn, reviewing the record of the trial court independently of the district court's intermediate appellate decision. Matter of Griffiths, 113 Idaho 364, 744 P.2d 92 (1987).

I Res Judicata

We first note the standard of review on the res judicata issue determined by the trial court on summary judgment. Cole and Taylor do not suggest that any genuine issue of material fact existed which would preclude the trial court in this case from granting a summary judgment under I.R.C.P. 56(c). Their arguments, instead, go only to the question, whether, as a matter of law, their suit to collect unpaid fees due from the Kunzlers is barred as a result of Stanley Cole's separate but unsuccessful attempt to obtain an order favorably adjudicating the validity of the alleged lien against Floyd Kunzler's inheritance. Because this is a question of law, we exercise free review. Standards of Appellate Review § 3.2, IDAHO APPELLATE HANDBOOK (Idaho Law Foundation, Inc., 1985).

The doctrine of res judicata precludes relitigation of a matter previously adjudicated. It has two components--claim preclusion and issue preclusion. In Aldape v. Akins, 105 Idaho 254, 668 P.2d 130 (Ct.App.1983), we explained that claim preclusion treats a judgment, once rendered, as the full measure of relief to be accorded between the parties on the same claim. If judgment is rendered for the plaintiff, then his claim "merges" into the judgment and he may seek no further relief on the claim. Conversely, when a judgment is rendered for a defendant, the plaintiff's claim is extinguished and the judgment acts as a "bar" to further relief sought by the plaintiff on the same claim. The issue preclusion component of res judicata (sometimes referred to as collateral estoppel) bars the relitigation of issues actually adjudicated and essential...