Selkirk Seed Co. v. Forney

• Citation: 134 Idaho 98,996 P.2d 798
• Decision Date: 03 March 2000
• Docket Number: No. 24292., No. 24271
• Parties: SELKIRK SEED COMPANY, an Idaho corporation, individually, and on behalf of other private, non-governmental/non-public insureds of the State Insurance Fund with complaints filed against them for benefits before the State of Idaho Industrial Commission, Petitioner-Cross Appellant, v. Drew S. FORNEY, in his capacity as Manager of the State Insurance Fund; State Insurance Fund; Max M. Sheils, Jr., individually and as a special deputy attorney general; and Julie Cooper, in her capacity as Claims Bureau Chief for the State Insurance Fund, Respondents, and Alan G. Lance, Idaho State Attorney General, Respondent-Cross Respondent. Selkirk Seed Company, an Idaho corporation, individually, and on behalf of other private, non-governmental/nonpublic insureds of the State Insurance Fund with complaints filed against them for benefits before the State of Idaho Industrial Commission, Petitioner-Appellant, v. Drew S. Forney, in his capacity as Manager of the State Insurance Fund and State Insurance Fund, Respondents-Respondents on Appeal, and Alan G. Lance, Idaho State Attorney General; Max M. Sheils, Jr., individually, and as a special deputy attorney general; and Julie Cooper, in her capacity as Claims Bureau Chief for the State Insurance Fund, Respondents.
• Court: United States State Supreme Court of Idaho

996 P.2d 798

134 Idaho 98

SELKIRK SEED COMPANY, an Idaho corporation, individually, and on behalf of other private, non-governmental/non-public insureds of the State Insurance Fund with complaints filed against them for benefits before the State of Idaho Industrial Commission, Petitioner-Cross Appellant, v. Drew S. FORNEY, in his capacity as Manager of the State Insurance Fund; State Insurance Fund; Max M. Sheils, Jr., individually and as a special deputy attorney general; and Julie Cooper, in her capacity as Claims Bureau Chief for the State Insurance Fund, Respondents, and Alan G. Lance, Idaho State Attorney General, Respondent-Cross Respondent.

Selkirk Seed Company, an Idaho corporation, individually, and on behalf of other private, non-governmental/nonpublic insureds of the State Insurance Fund with complaints filed against them for benefits before the State of Idaho Industrial Commission, Petitioner-Appellant, v. Drew S. Forney, in his capacity as Manager of the State Insurance Fund and State Insurance Fund, Respondents-Respondents on Appeal, and Alan G. Lance, Idaho State Attorney General; Max M. Sheils, Jr., individually, and as a special deputy attorney general; and Julie Cooper, in her capacity as Claims Bureau Chief for the State Insurance Fund, Respondents.

Nos. 24271, 24292.

Supreme Court of Idaho, Coeur D'Alene, 1999 Term.

March 3, 2000.

Starr Kelso Law Office, Chtd., Coeur d'Alene, for appellants. Starr Kelso argued.

Hon. Alan G. Lance, Attorney General; Michael S. Gilmore, Deputy Attorney General, Boise, for respondents. Michael S. Gilmore argued.

SILAK, Justice.

This is an appeal from an action in which appellant Selkirk Seed (Selkirk) sought a declaratory judgment stating that the Office of the Idaho Attorney General did not have authority to represent non-governmental insureds of the Idaho State Insurance Fund (SIF). Selkirk's motion for summary judgment was granted in part and denied in part.

I. FACTS AND PROCEDURAL BACKGROUND

A. Facts

In 1995, the Idaho Legislature passed the Legal Services Unification Act, which restricted the use of private attorneys in representing state governmental entities. Section 67-1401 of the Idaho Code, as amended by the Legal Services Unification Act, states that it is the duty of the Attorney General " [t]o perform all legal services for the state and to represent the state and all departments, agencies, offices, officers, boards, commissions, institutions, and other state entities, in all courts and before all administrative tribunals or bodies of any nature." I.C. § 67-1401(1). Section 67-1406 of the Idaho Code further states that unless one of the enumerated exceptions applies, no " department, agency, office, officers, board, commission, institution or other state entity shall be represented by or obtain its legal advice from an attorney at law other than the attorney general...."

The Office of the Attorney General determined that SIF fell under the purview of the Act, and in October 1995, the Attorney General and SIF entered into an agreement for the provision of legal services by the Office of the Attorney General. Pursuant to the agreement, the Office of the Attorney General defended SIF and Selkirk, SIF's insured, against a worker's compensation claim filed by Anthony J. LaMarsh (LaMarsh). The attorney general assigned special attorney general Max Sheils (Sheils) to defend SIF and Selkirk, but a dispute subsequently arose concerning Sheils' defense against LaMarsh's claim.

B. Procedural Background

On May 14, 1996, Selkirk filed a declaratory judgment action against respondents SIF, SIF General Manager Drew S. Forney, and Attorney General Alan G. Lance. Selkirk alleged that the Attorney General had appointed Sheils without notice or consultation with Selkirk. Selkirk also alleged that Shells had taken actions that were not consistent with Selkirk's interests. Selkirk further alleged that, by representing private insureds such as Selkirk, the Attorney General was acting outside his statutory and constitutional authority. Selkirk filed an amended complaint on May 20, 1996, adding breach of contract and violation of the covenant of good faith and fair dealing claims against Sheils and SIF Claims Bureau Chief Julie Cooper. Selkirk did not allege, in either the original or the amended complaint, that the Attorney General lacked the authority to represent SIF.

On June 4, 1996, Selkirk filed a motion for partial summary judgment on the first two claims. In a supporting memorandum, Selkirk stated: " For the purposes of this motion, Plaintiffs stipulate that the Attorney General can represent the State Insurance Fund, itself, in its capacity as a state agency." That same day, respondents filed a motion to dismiss for failure to state a claim pursuant to I.R.C.P. 12(b)(6). A hearing on both motions was held on July 3, 1996.

Eight months later, on March 10, 1997, Selkirk filed a motion to disqualify the Attorney General from representing Forney and SIF. Selkirk also sought to withdraw its earlier stipulation that the Office of the Attorney General could represent SIF. The motion alleged that according to several "newly discovered documents," SIF was not a state agency, making the Attorney General's representation of SIF illegal. These "new" documents included two private legal opinions, both prepared in 1995, one pertaining to SIF and the other to the Idaho Health Facilities Authority. Selkirk also pointed to a 1992 Attorney General's Legal Guideline discussing the status of the Idaho Housing Authority under the Public Records Act, as well as Ada County property tax information and correspondence between Forney and the attorney of former Governor Phil Batt.

Between May and June, 1997, Selkirk scheduled the depositions of several individuals involved in Berg v. Forney, Bonner County case no. CV-95-00791. At that point, there had been no argument or decision concerning Selkirk's motion to disqualify the Attorney General. Respondents filed a motion for a protective order on May 21, 1997, requesting that the district court vacate the depositions.

The district court heard oral argument on the motion for protective order on May 23, 1997. The court issued its decision on the motion from the bench, stating that it would not allow the depositions concerning the fraud allegedly perpetrated in Berg v. Forney because a final judgment had been entered in that case, and the issue of any fraud in Berg v. Forney was not part of a case or controversy before the court.¹

In a memorandum decision entered on May 29, 1997, the district court denied the respondents' motion to dismiss, and ruled that while the Office of the Attorney General was not required to represent SIF, SIF was free to choose the Attorney General as counsel. The Industrial Commission dismissed LaMarsh's worker's compensation complaint shortly after the district court granted partial summary judgment in favor of Selkirk. Selkirk subsequently stipulated to dismissal of the claims against Sheils and Cooper.

Both parties appealed. The appeals were consolidated, and respondents eventually withdrew their appeal.

II. ISSUES ON APPEAL

The issues before the Court on appeal are as follows:

A. Whether this case should be decided under the public interest exception to mootness for cases capable of repetition but evading review.

B. Whether SIF is required to obtain its legal services from the office of the Attorney General.

C. Whether SIF may contract with the Attorney General to represent its private/ nongovernmental insureds such as Selkirk.

D. Whether the district court abused its discretion by not permitting Selkirk to take the scheduled depositions that pertained to "fraud" perpetrated on the district court in Berg v. Forney.

III.

STANDARD OF REVIEW

In an appeal from an order granting summary judgment, this Court's standard of review is the same standard used by the district court in ruling on a motion for summary judgment. See, e.g., First Security Bank v. Murphy, 131 Idaho 787, 790, 964 P.2d 654, 657 (1998)

; Richards v. Idaho State Tax Comm'n, 131 Idaho 476, 478, 959 P.2d 457, 459 (1998). Summary judgment is appropriate only when the pleadings, depositions, affidavits and admissions on file show that there is no genuine issue of material fact, and the movant is entitled to judgment as a matter of law. See Murphy, 131 Idaho at 790,

964 P.2d at 657.

IV. ANALYSIS

A. While This Appeal Is Moot, It May Be Decided Under The Public Interest Exception For Cases That Are Capable Of Repetition But Evading Review.

Selkirk's first claim asked the district court to issue a declaratory judgment stating that the Attorney General did not have authority to represent SIF's non-governmental insureds. The respondents argue that this claim became moot when LaMarsh's worker's compensation claim was dismissed by the Industrial Commission. Respondents argue, nevertheless, that the Supreme Court should hear the appeal under the public interest exception to mootness.

Ordinarily, where there is no longer a live controversy between the parties, the case is dismissed as moot. See Great Beginnings Child Care, Inc. v. Office of Governor of State of Idaho, 128 Idaho 158, 911 P.2d 751 (1996)

. This Court has recognized, however, "that it is in the public interest to decide cases which are 'susceptible to repetition yet evading review.'" Id. at 160, 911 P.2d at 753 (quoting Ellibee v. Ellibee, 121 Idaho 501, 503, 826 P.2d 462, 464 (1992)).

This Court may, in its discretion, consider the appeal even though there is no longer a live controversy between the litigants. Whether the Attorney General has authority to represent SIF's private insureds is an issue that tends to evade review because worker's compensation claims before the Industrial Commission will usually be resolved before an action could make its way through district court. We therefore conclude that the public interest exception to mootness applies in this case,...