Straub v. Smith

• Citation: 175 P.3d 754,145 Idaho 65
• Decision Date: 27 November 2007
• Docket Number: No. 33348.,33348.
• Parties: Cobi STRAUB, Plaintiff-Respondent, v. Donald R. SMITH and Leslie Smith, husband and wife, Defendants-Appellants.
• Court: United States State Supreme Court of Idaho

175 P.3d 754 145 Idaho 65 Cobi STRAUB, Plaintiff-Respondent,
v.
Donald R. SMITH and Leslie Smith, husband and wife, Defendants-Appellants. No. 33348. Supreme Court of Idaho, Boise, April 2007 Term. November 27, 2007.

[175 P.3d 756]

John Patrick Whelan, Coeur d'Alene, for appellants.

Beck & Poorman, LLC, Hayden, for respondent.

SUBSTITUTE OPINION THE OPINION DATED JULY 31, 2007 IS HEREBY WITHDRAWN.

BURDICK, Justice.

Donald and Leslie Smith appeal from the district court's denial of an award of attorney fees and costs. We reverse and remand.

I. FACTUAL AND PROCEDURAL BACKGROUND

Appellants, Donald Smith and Leslie Smith (the Smiths), sold a duplex located in Post Falls, Idaho to Respondent, Cori Straub. In relation to that transaction, Straub filed a complaint against the Smiths. The Smiths filed a pro se answer in which they did not plead costs or attorney fees. The Smiths retained counsel in November 2004. Then, in December 2004 Straub filed an amended complaint which contained a request for an award of punitive damages. The Smiths did not respond to the amended complaint.

Six days before trial, Straub sent a fax to the Smiths stating she wished to dismiss the case and asking the Smiths to sign a stipulation to the dismissal. On that same day, a motion to dismiss the case with prejudice, signed by Straub's attorney, and a stipulation to the dismissal signed by the Smiths' attorney, were filed with the court. Neither the motion to dismiss nor the stipulation mentioned costs or fees. Straub then prepared an order of dismissal for the district court,

175 P.3d 757

which the court accepted. The order dismissed the case with prejudice and stated there would be no award of fees or costs. Straub did not present the proposed order to the Smiths before submitting it to the district court.

The Smiths then filed a motion for reconsideration of the court's order of dismissal and a memorandum of costs with the district court. After a hearing on the motion, the district court denied the Smiths' motion for reconsideration. The Idaho Court of Appeals reversed the denial of the motion for reconsideration and remanded to the district court. This Court, on its own motion, granted a review on the briefs.

II. ANALYSIS

The Smiths appeal the district court's denial of their motion to reconsider the portion of the court's order dismissing the case without an award of costs or attorney fees.¹ Straub argues that the Smiths waived their right to claim costs and fees and that the Smiths would not be entitled to costs or fees because they did not request them in their pleading. The Smiths ask for attorney fees on appeal. We will address each issue below.

A. The Smiths did not waive their right to claim costs or fees.

Straub argues that because this was an LR.C.P. 41(a)(1) voluntary dismissal by stipulation of the parties and not an I.R.C.P. 41(a)(2) dismissal by court order, the Smiths waived their right to claim costs and fees when they did not expressly reserve the right in their stipulation. We will first determine' the type of dismissal and then address Straub's waiver argument.

First, Straub argues that the dismissal was pursuant to I.R.C.P. 41(a)(1) and not LR.C.P. 41(a)(2). Under I.R.C.P. 41(a)(1) "an action may be dismissed by the plaintiff without order of court ... (ii) by filing a stipulation of dismissal signed by all parties who have appeared in the action." If the defendant does not stipulate to the dismissal, I.R.C.P. 41(a)(2) provides that the "action shall not be dismissed at the plaintiff's instance save upon order of the court and upon such terms and conditions as the court deems proper."

On April 15, 2005, "[b]ased upon the plaintiffs motion to dismiss, the defendants' stipulation and good cause appearing," the district court entered an order of dismissal. That order dismissed the case with prejudice "and without an award of attorney fees or costs to either party." Straub argues that this order has no effect because it came after the I.R.C.P. 41(a)(1)(ii) dismissal by stipulation of parties. Although the parties failed to sign the same document stipulating to the dismissal, two documents were filed on the same day stipulating to the dismissal of the case with prejudice. Straub filed a motion to dismiss the case with prejudice and the Smiths filed a document stipulating to the entry of an order granting the plaintiff's motion to dismiss the case with prejudice. These documents were both filed on April 12, 2005; neither document mentioned costs or attorney fees. Even though the two documents filed by the parties use the phrasing "order to dismiss the case," in substance these documents appear to constitute an I.R.C.P. 41(a)(1)(ii) dismissal. Therefore, because we look to substance over form, In re Weick, 142 Idaho 275, 279, 127 P.3d 178, 182 (2005), we will consider it a dismissal by stipulation of the parties.

175 P.3d 758

However, even if we treat this as an I.R.C.P. 41(a)(1)(ii) dismissal, there is no support for Straub's argument that the Smiths waived their claim to costs or fees. First, there was no actual waiver in this case. A waiver is a voluntary, intentional relinquishment of a known right. Frontier Fed. Say. & Loan Ass'n v. Douglass, 123 Idaho 808, 812, 853 P.2d 553, 557 (1993). There is no indication that the Smiths voluntarily gave up their right to seek costs and fees. Straub notified the Smiths by fax of the dismissal. The fax in its entirety states:

My client has informed me that she no longer wishes to pursue this matter. Ours motion to dismiss is attached. If you have no objection, please sign the attached stipulation and return to my office. Otherwise, I will schedule a hearing for the motion.

I have notified the court.

Neither the motion to dismiss nor the stipulation mentions costs or fees. Since in this case the Smiths were unaware that stipulating to dismissal of the case also meant they were agreeing to not pursue costs or fees, there was no voluntary, intentional relinquishment of a known right.

Second, Straub argues that there is an implicit waiver of costs and fees if a defendant signs a stipulation to dismiss a case pursuant to I.R.C.P. 41(a)(1)(ii), unless in the stipulation the, parties expressly reserve the right to later determine an award of costs and fees, because a dismissal effectively ends the case for all purposes. We disagree.

A stipulation is a contract, and we will apply contractual principles of interpretation when reviewing a stipulation. Maroun v. Wyreless Sys., Inc., 141 Idaho 604, 611, 114 P.3d 974, 981 (2005); Win of Michigan, Inc. v. Yreka United, Inc., 137 Idaho 747, 750-51, 53 P.3d 330, 333-34 (2002). "The determination and legal effect of a contractual provision is a question of law." Maroun, 141 Idaho at 611, 114 P.3d at 981. Our primary objective when interpreting a contract is to discover the mutual intent of the parties at the time the contract is made. Opportunity, L.L.C. v. Ossewarde, 136 Idaho 602, 607, 38 P.3d 1258, 1263 (2002). "If possible, the intent of the parties should be ascertained from the language of the agreement as the best indication of their intent." Id. We construe the contract against the person who prepared the contract. Win of Michigan, Inc., 137 Idaho at 751, 53 P.3d at 334.

The stipulation, which was prepared by Straub, is silent on the issue of costs and fees. There is nothing to indicate that when the Smiths signed the stipulation, the silence indicated an intent that the Smiths would forego the opportunity to pursue an award of costs and fees. Furthermore, we have said costs and attorney fees are collateral issues which do not go to the merits of an action and that a district court retains jurisdiction to make such an award after a suit has been terminated. Inland Group of Cos., Inc. v. Obendorff, 131 Idaho 473, 475, 959 P.2d 454, 456 (1998). Thus, the stipulation to dismiss the case with prejudice must be interpreted not to include any agreement regarding costs and fees, which can be awarded after a suit is terminated. Hence, we hold that although the dismissal was pursuant to I.R.C.P. 41(a)(1), the Smiths did not waive their claim for fees and costs by failing to expressly reserve that issue in their stipulation.

B. Costs and attorney fees need not be pleaded.

The Smiths assert that their failure to plead costs is not fatal to their claim for costs. Straub argues that both attorney fees and costs must be pleaded in order to be recovered.²

175 P.3d 759

First, I.R.C.P. 54(e)(4) and our decision in Eighteen Mile Ranch, LLC v. Nord Excavating & Paving, Inc., 141 Idaho 716, 117 P.3d 130 (2005), make it clear that generally it is not necessary to plead attorney fees. The appellants in Eighteen Mile appealed the district court's denial of their post-trial request for attorney fees and costs based on its determination that they were not prevailing parties. Id. at 718, 117 P.3d at 132. The respondents argued that in order to be awarded attorney fees, the prevailing party must state in its pleadings the specific code section constituting the basis for the award. Id. at 720, 117 P.3d at 134. The Court disagreed, relying on I.R.C.P. 54(e)(4), which provides that generally, in a civil action, it is not necessary "for any party in a civil action to assert a claim for attorney fees in any pleading...." Id. The exception to the general rule is that if the basis for attorney fees is something other than I.C. § 12-121, attorney fees must be pleaded to be recovered when the judgment is by default. Eighteen Mile, 141 Idaho at 721, 117 P.3d at 135; I.R.C.P. 54(e)(4). The case before us does not involve a default judgment; thus, to require that attorney fees be pleaded in this case would be contrary to I.R.C.P. 54(e)(4). Hence, we hold it was not necessary for the Smiths to plead attorney fees in order to receive an award.

Second, it is not necessary to plead costs. Straub argues that I.R.C.P. 8(a)(1) requires that costs...