Holmes v. Holmes

• Decision Date: 31 March 1994
• Docket Number: No. 20503,20503
• Parties: Linda HOLMES, Plaintiff-Appellant, v. Mark HOLMES, Defendant-Respondent.
• Court: Idaho Court of Appeals

Page 595

874 P.2d 595

125 Idaho 784

Linda HOLMES, Plaintiff-Appellant, v. Mark HOLMES, Defendant-Respondent.

No. 20503.

Court of Appeals of Idaho.

March 31, 1994.

Davison, Copple, Copple, Copple & Ludwig, Boise, for plaintiff-appellant. Jon R. Cox, argued.

Beer & Cain, Boise, for defendant-respondent. Dennis L. Cain, argued.

LANSING, Judge.

In this case we are asked to review a magistrate's disallowance of an award of attorney fees following resolution of a dispute over spousal support payments. For the following reasons, we conclude that the magistrate's order must be vacated and the matter remanded for reconsideration of the appellant's request for attorney fees.

Linda and Mark Holmes were divorced in December 1989. Prior to their divorce they executed a property settlement agreement which provided that Mark would pay spousal support to Linda at the rate of $4,250 per month through August 1992. Thereafter, the payments were to continue at a decreased rate of $2,000 per month until they would terminate in August 1993. Mark's obligation under this provision was subject to the express condition that if Linda "ceases to continue her education for any reason other than mental or physical incapacitation or act of God," the spousal support would be reduced to the sum of $2,000 per month for a period of twelve months and then terminate. The decree of divorce ordered spousal support payments on the same terms specified in the property settlement agreement. The decree also ratified and confirmed the agreement but provided that the agreement was not merged into the decree.

In January 1990, Linda began to attend university classes and was continuously enrolled from that time forward. Support payments continued as scheduled until April 1992 when Mark halted payments.

On June 9, 1992, Linda filed a motion requesting that Mark be held in contempt for non-payment of support. Linda's motion also sought a modification of Mark's visitation rights with respect to one of the parties' children. Mark responded with a counter-motion to terminate spousal support on the ground that Linda was no longer continuing her education. In the proceedings on the two motions, Mark argued that the spousal support obligation created by the agreement continued only so long as Linda was enrolled as a full-time student, while Linda interpreted it to mean that as long as she was enrolled in any college course, she would be in compliance with the requirement that she continue her education. The magistrate rejected both parties' interpretations and concluded that the parties had in fact never had a meeting of the minds as to the meaning of that contractual clause. The magistrate "filled in the gap" by holding that Linda had an implied duty to pursue her education in good faith. He concluded that while Linda had not always maintained a credit load necessary to be considered a full-time student, she was making a good faith effort to complete her education. Accordingly, the magistrate found that although Mark's interpretation of the contract was reasonable, it was nonetheless incorrect, and Mark was in error when he ceased making spousal support payments. The magistrate declined to hold Mark in contempt, but ordered him to continue the support payments and to pay a $17,000 arrearage. The magistrate's order specified that failure by Mark to comply immediately would be grounds for a finding of contempt and the imposition of sanctions.

Linda then requested an award of attorney fees pursuant to a the following provision in the property settlement agreement:

If action is instituted to enforce any of the terms of this agreement then the losing party agrees to pay to the prevailing party all costs and attorneys fees incurred in this action.

The magistrate denied Linda's request for attorney fees. The magistrate reasoned that because he did not accept either party's interpretation of the ambiguous contract, it would be unfair to characterize either party as prevailing. Linda appealed to the district court, which affirmed the magistrate's ruling.

On appeal from an appellate decision of the district court, while we value the district court's opinion, we independently examine the record of the proceedings before the magistrate. Wood v. Wood, 124 Idaho 12, 855 P.2d 473 (Ct.App.1993).

Contractual terms providing for recovery of attorney fees incurred in actions to enforce the contract represent an election by the parties to place the risk of litigation costs on the one who is ultimately unsuccessful. Such provisions are ordinarily to be honored by the courts. I.R.C.P. 54(e)(1); Vaughn v. Vaughn, 91 Idaho 544, 548, 428 P.2d 50, 54 (1967); Bank of Idaho v. Colley, 103 Idaho 320, 326, 647 P.2d 776, 782 (Ct.App.1982); Industrial Investment Corporation v. Rocca, 102 Idaho 920, 922-23, 643 P.2d 1090, 1092-93 (Ct.App.1982).

Here, the magistrate recognized that the attorney fees provision in the contract was enforceable, but concluded that neither party had prevailed. The magistrate therefore declined to award fees.

A trial court's determination as to which party, if any, prevailed, is discretionary. Badell v. Badell, 122 Idaho 442, 450, 835 P.2d 677, 685 (Ct.App.1992). The exercise of that discretion is guided by I.R.C.P. 54(d)(1)(B) which provides:

In determining which party to an action is a prevailing party and entitled to costs, the trial court shall in its sound discretion consider the final judgment or result of the action in relation to the relief sought by the respective parties, whether there were multiple claims, multiple issues, counterclaims, third party claims, cross-claims, or other multiple or cross issues between the parties, and the extent to which each party prevailed upon each of such issue or claims. The trial court in its sound discretion may determine that a party to an action prevailed in part and did not prevail in part, and upon so finding may apportion the costs between and among the parties in a fair and equitable manner after considering all of the issues and claims involved in the action and the resultant judgment or judgments obtained.

In reviewing on appeal an exercise of the trial court's discretion, we consider (1) whether the lower court rightly perceived the issue as one of discretion; (2) whether the court acted within the boundaries of such discretion and consistently with any legal standards applicable to specific choices; and (3) whether the court reached its decision by an exercise of reason. Sun Valley Shopping Center, Inc. v. Idaho Power Co., 119 Idaho 87, 94, 803 P.2d 993, 1000 (1991).

Here, the claim for attorney fees was properly recognized to be a matter of discretion. However, under the second tier of our inquiry, we conclude that the magistrate did not apply the correct legal standards in determining whether Linda was the prevailing party on the spousal support dispute. The magistrate focused upon whether Linda's argument was accepted by the court rather than upon the factors delineated in Rule 54(d)(1)(B). That rule directs that the court compare the final judgment or result of the action in relation to the relief sought by the respective parties and, where there were multiple claims or multiple issues, the extent to which each party prevailed upon each claim or issue. Here, with respect to Linda's spousal support claim she obtained the entirety of the relief which she had sought--a determination of her entitlement to continuing spousal support and an order compelling Mark to pay a $17,000 arrearage. Only two claims grounded on the property settlement agreement were presented, Linda's claim that she was entitled to continuation of payment, and Mark's claim that his spousal support obligation had ended under the contract terms. Clearly, it was Linda who obtained the relief sought with respect to those competing claims. The conflicting spousal support motions really presented only a single issue--how to interpret the contractual provision that conditioned Linda's entitlement to spousal support upon continuation of her education. The trial court's resolution of that issue was to only Linda's...