Lee v. Nickerson

• Decision Date: 10 July 2008
• Docket Number: No. 33896.,33896.
• Citation: 189 P.3d 467,146 Idaho 5
• Parties: Jay LEE and Coral Lee, husband and wife, d.b.a. Earth Construction, Plaintiffs-Counterdefendants-Respondents, v. Charles R. NICKERSON and Donna Nickerson, husband and wife, Defendants-Counterclaimants-Appellants.
• Court: Idaho Supreme Court

189 P.3d 467

146 Idaho 5

Jay LEE and Coral Lee, husband and wife, d.b.a. Earth Construction, Plaintiffs-Counterdefendants-Respondents, v. Charles R. NICKERSON and Donna Nickerson, husband and wife, Defendants-Counterclaimants-Appellants.

No. 33896.

Supreme Court of Idaho, Boise, June 2008 Term.

July 10, 2008.

Knowlton & Miles, PLLC, Lewiston, for appellants. Manderson L. Miles, Jr., argued.

Dale O. Cox, Orofino and Brady Law, Chtd., Boise, for respondents. Dale O. Cox and Kyle D. Duren argued.

BURDICK, Justice.

This appeal concerns the propriety of dismissing a counterclaim as a discovery sanction and the adequacy of an attorney fee award. We affirm the district court's dismissal of the counterclaim and remand the case to the district court on the issue of attorney fees.

I. FACTUAL AND PROCEDURAL BACKGROUND

Appellants Charles and Donna Nickerson (the Nickersons) hired Jay Lee d.b.a. Earth Construction to construct a level barn pad and to do some work on a pond on their property. In 2004 Lee filed suit against the Nickersons alleging the Nickersons did not pay him for his work on the pond. The complaint contained a $5,500 breach of contract claim, a $5,500 unjust enrichment claim, a $5,500 implied contract claim, and a $20,000 claim based on the Nickersons' alleged refusal to allow Lee to retrieve his equipment left on the Nickersons' property. The Nickersons answered and counterclaimed asserting two claims of breach of contract, and claims for unjust enrichment, intentional torts per se, and intentional infliction of emotional distress.

During discovery the Nickersons refused to allow Lee on their property in order to inspect the property. The district court eventually dismissed the Nickersons' counterclaim as a discovery sanction. The case went to trial, and a jury found that the Nickersons did not breach any contract with Lee, that the Nickersons were not unjustly enriched, and that the Nickersons did not keep equipment belonging to Lee. Hence, the district court entered judgment in favor of the Nickersons and the district court awarded the Nickersons attorney fees. The Nickersons now appeal the dismissal of their counterclaim and the amount of their attorney fee award.

II. ANALYSIS

The Nickersons argue the district court erred when it dismissed their counterclaim and that it erred in awarding the Nickersons an inadequate amount of attorney fees. Additionally both parties request attorney fees on appeal. We address each issue below.

A. Dismissal of the Nickersons' Counterclaim

On appeal the Nickersons assert the district court erred in dismissing their counterclaim. The district court dismissed the counterclaim as a discovery sanction when the Nickersons refused to allow Lee on their property to complete an inspection of the work site with his experts. The Nickersons' attributed their refusal to allow Lee on their property to an alleged incident in which Lee threw a clipboard at Donna Nickerson, ran Donna Nickerson over with his vehicle, and almost hit Jeannie Smith and Amanda Nickerson with his vehicle while on the Nickersons' property. First, we will review the relevant facts concerning the proceedings below, and then we will address the legal issue.

1. Summary of proceedings and delays below

On June 5, 2005, Lee moved for an inspection of the Nickersons' property. This motion also requested costs and attorney fees "for having to file [the] Motion based upon the Nickersons' failure to cooperate with Earth Construction's request for inspection of the Nickersons' property." Kyle Duren, counsel for Lee, swore in an affidavit that on April 28, 2005, he advised the Nickersons' attorney, April Godbe, of Lee's desire to inspect the Nickersons' property and that in response Godbe requested she be provided with suggested dates for the inspection. The parties then exchanged a series of letters; Lee proposed two dates for the inspection, the Nickersons rejected the dates without proposing an alternative date, and Lee requested they provide him with available inspection dates for the first part of June.

Duren's affidavit also stated he had a telephone conversation with Godbe on May 26, 2005, wherein Godbe told him the Nickersons refused the request to inspect the property. On May 27, 2005, Duren sent a letter to Godbe confirming the Nickersons' refusal and stating Lee would file an I.R.C.P. 34(a)(2) motion seeking an order to allow the inspection; Duren then filed the June 5, 2005, motion. After a hearing on June 27, 2005, the district court granted Lee's motion for inspection of property. The district court's order specifically provided that Lee and his experts were entitled to go upon the Nickersons' property for the purpose of inspection. The district court also ordered the Nickersons to provide dates and times for the inspection by July 1, 2005.

In September 2005, the district court permitted Godbe to withdraw as counsel for the Nickersons and Manderson Miles to replace her as their counsel. On September 15, 2005, Miles sent a letter to Duren confirming a conversation where Miles expressed the Nickersons' refusal to allow Lee on their property and provided inspection dates for Lee's experts ranging from October 19, 2005, to November 16, 2005. Miles sent another letter on October 14, 2005, stating it had been a month since he provided possible inspection dates, Lee had not responded choosing a date, and that the Nickersons found someone to work on their pond but the work had to be done the following week. Miles requested Duren let him know immediately if Lee still wanted an inspection. In return, Duren faxed a letter to Miles stating there was not enough notice to coordinate with Lee's experts to inspect the property before the repairs and that the first available date for Lee's experts to inspect the property was November 4, 2005. The letter also advised Miles that they "have deemed it necessary that Jay Lee be present for the inspection of the Nickersons' property in order to answer any of the expert consultants' inquiries that may arise." Additionally, the letter reminded the Nickersons that pursuant to the district court's order, Lee was permitted upon the property to conduct an inspection.

Lee also moved for a protective order preventing the Nickersons from performing any work on the Nickersons' property until after Lee's experts could inspect the property. The district court granted Lee's motion and entered a protective order. Thereafter, the Nickersons made a motion to move up the inspection and to bar Lee from their property. On October 20, 2005, the district court held a telephonic hearing on the motion. The court ruled Lee was entitled to assist in preparing his defense and would be allowed to accompany his experts to inspect the property.

During the telephonic hearing, the district court noted the Nickersons' history of preventing the inspection, stated its belief that Lee is entitled to assist his experts by participating in the inspection, and asked the Nickersons what restrictions the court could impose in order to address their concerns. The Nickersons responded there were no circumstances under which they would allow Lee on their property. The district court stated if the Nickersons were unwilling to accede to the court's authority, it would dismiss their counterclaim and enter a default against them. The district court offered to require the Nickersons' attorney and a deputy sheriff be present when Lee was on the property. The court then stated that before entering a default it would allow another hearing where the Nickersons could speak their concerns in person and continued the hearing until October 26, 2005.

At the October 26, 2005, hearing the Nickersons testified and expressed their concerns over Lee coming onto their property. During cross-examination Donna Nickerson stated that even if the district court entered an order allowing Lee to be present on the Nickersons' property and participate in the inspection, she would not obey it. After hearing the testimony, the district court stated if the Nickersons did not allow Lee on the property it would dismiss their counterclaim. The district judge then offered to accompany Lee on the inspection of the property, and the hearing was recessed so that the Nickersons could discuss this possibility with their attorney. The Nickersons still refused to allow Lee on their property. The district court dismissed the Nickersons' counterclaim but did not enter a default judgment on Lee's claims.

2. Analysis

It is within the discretion of the trial court to impose an I.R.C.P. 37(b) sanction dismissing a cause of action. Ashby v. W. Council, Lumber Prod. & Indus. Workers, 117 Idaho 684, 686, 791 P.2d 434, 436 (1990). A decision to impose a sanction of dismissal will "not be overturned on appeal absent a manifest abuse of discretion." Id. To determine whether there is an abuse of discretion this Court considers whether (1) the court correctly perceived the issue as one of discretion; (2) the court acted within the boundaries of such discretion and consistently with legal standards applicable to specific choices; and (3) the court reached its decision by an exercise of reason. State Ins. Fund v. Jarolimek, 139 Idaho 137, 138-39, 75 P.3d 191, 192-93 (2003).

Due to the extreme nature of a dismissal with prejudice sanction, the trial court must consider three factors. Id. at 139, 75 P.3d at 193. "The two primary factors are a clear record of delay and ineffective lesser sanctions, which must be bolstered by the presence of at least one `aggravating' factor, including: 1) delay resulting from intentional conduct, 2) delay caused by the plaintiff personally, or 3) delay causing prejudice to the defendant."¹ Id. (quoting Ashby, 117 Idaho at 686-87, 791 P.2d at 436-37). The record must show the trial court considered the necessary factors. Id.; Ashby, 117 Idaho at 687, 791 P.2d at 437. "To sustain the imposition of sanctions, the trial court...