Sun Valley Shopping Center, Inc. v. Idaho Power Co.

Decision Date02 January 1991
Docket NumberNos. 17434,17435,s. 17434
Citation803 P.2d 993,119 Idaho 87
CourtIdaho Supreme Court
PartiesSUN VALLEY SHOPPING CENTER, INC., d/b/a Atkinson's Market, an Idaho corporation, Continental Casualty Company (as Subrogee of Pek Corporation d/b/a Chateau Drugs, an Idaho corporation), Plaintiffs-Appellants, and John B. McCabe, individually, Real Party in Interest-Appellant, v. IDAHO POWER COMPANY, a Maine corporation, Defendant-Respondent. UNIGARD INSURANCE COMPANY (as Subrogee of Nancy's Beauty Shop), Unigard Insurance Company (as Subrogee of William J. Boaz and Pamela S. Boaz d/b/a Ketchum Nutrition Center), Plaintiffs-Appellants, and John B. McCabe, individually, Real Party in Interest-Appellant, v. IDAHO POWER COMPANY, a Maine corporation, Defendant-Respondent. GIACOBBI SQUARE, a Joint Venture, a Partnership, By and Through its Partners, Frank Pearson, Joseph Humphreys, Stanton Atkinson, and Don Atkinson, Capitol Investments, a General Partnership, by its Partners Ron Sharp and Robert (Bob) Fenzl, Industrial Indemnity (as Subrogee of D.C.I. Group Companies, Inc. a/k/a Design Concepts, Inc., and Design Concepts, Inc., a Corporation, Arnie Egilsson and Dorette Egilsson d/b/a The Icelander, U.S. Fidelity & Guaranty Co. (as Subrogee of Desimo, Inc. d/b/a Carrolls), Terry Kent Sturges d/b/a Kids Stuff, U.S. Fidelity & Guaranty Co. (as Subrogee of Ann Hellwig d/b/a Put On's), Kim Piotter d/b/a Undercover Agency, Allied Mutual Insurance Company, an Iowa corporation, f/k/a Aid Insurance Company (Mutual), as Subrogee of Mountain Tops of Sun Valley, Inc., a Corporation, and John and Shirley Christensen, Plaintiffs-Appellants, and John B. McCabe, individually, Real Party in Interest-Appellant v. IDAHO POWER COMPANY, a Maine corporation, Respondent. Boise, May 1990 Term

Quane, Smith, Howard & Hull, Boise, for plaintiffs-appellants, Sun Valley Shopping Center, Unigard and Giacobbi Square Shopping Center. Mr. Thomas H. Lopez argued.

E. Lee Schlender, Chartered, Hailey, Clausen, Miller, Gorman, Caffrey and Witous, PC, Chicago, Ill., for real party in interest-appellant McCabe. Mr. James T. Ferrini argued.

Risch, Goss, Insinger & Salladay, Boise, for defendant-respondent. Mr. G. Lance Salladay argued.

JOHNSON, Justice.

These appeals concern awards of costs and attorney fees against plaintiffs and one of their attorneys who unsuccessfully brought and pursued a lawsuit for damages caused by a fire.

In resolving the issues presented, we hold:

1. The trial court did not abuse its discretion in awarding discretionary costs against the plaintiffs pursuant to I.R.C.P. 54(d)(1)(D).

2. It is not necessary for us to address the award of costs pursuant to I.R.C.P. 68. This award duplicated the other awards of costs against the plaintiffs.

3. The trial court did not abuse its discretion in awarding attorney fees against the plaintiffs pursuant to I.C. § 12-121 and I.R.C.P. 54(e)(1) on the grounds that the case was brought and pursued by the plaintiffs frivolously, unreasonably, and without foundation.

4. The trial court abused its discretion in awarding attorney fees and costs against one of the attorneys for the plaintiffs pursuant to I.R.C.P. 11(a)(1).

I. THE BACKGROUND AND PRIOR PROCEEDINGS.

In 1983 the Sun Valley Shopping Center was damaged by fire. Tenants in the shopping center and insurance companies that insured owners of the shopping center and its tenants filed three lawsuits against Idaho Power Company (IPC), alleging that IPC was responsible for the fire. The cases were consolidated for trial.

IPC filed an offer of judgment offering to allow judgment of $5,000.00 to be entered against IPC in each of the three cases. The plaintiffs did not accept this offer. Before trial, IPC moved for summary judgment. The trial court denied this motion on the ground that there were factual issues to be resolved.

The case proceeded to a jury trial. At the conclusion of the plaintiffs' case in chief, IPC moved to dismiss the complaints. The trial court denied this motion. The jury returned a verdict in favor of IPC, and judgment was entered. No appeal was taken from the judgment.

IPC moved for costs and attorney fees against the plaintiffs and their attorneys. The trial court awarded IPC the following costs and attorney fees:

1. $40,624.26 in costs as a matter of right against the plaintiffs, pursuant to I.R.C.P. 54(d)(1)(C).

2. $84,055.88 in discretionary costs against the plaintiffs, pursuant to I.R.C.P. 54(d)(1)(D).

3. $124,680.14 in costs against the plaintiffs, pursuant to I.R.C.P. 68.

4. $340,766.04 in attorney fees against the plaintiffs, pursuant to I.C. § 12-121 and I.R.C.P. 54(e)(1).

5. $421,138.91 against plaintiffs' chief counsel, John McCabe, pursuant to I.R.C.P. 11(a)(1), for IPC's costs and attorney fees incurred after an amended complaint was filed on April 21, 1986.

The plaintiffs appealed all the awards against them, except the award of costs as a matter of right. McCabe appealed the award against him.

II. COURT DID NOT ABUSE ITS DISCRETION IN AWARDING DISCRETIONARY COSTS.

The plaintiffs assert that the trial court abused its discretion in awarding discretionary costs to IPC. We disagree.

I.R.C.P. 54(d)(1)(D) provides:

(D) Discretionary Costs. Additional items of cost not enumerated in, or in an amount in excess of that listed in subparagraph (C) [providing for costs as a matter of right], may be allowed upon a showing that said costs were necessary and exceptional costs reasonably incurred, and should in the interest of justice be assessed against the adverse party. The trial court, in ruling upon objections to such discretionary costs contained in the memorandum of costs, shall make express findings as to why such specific item of discretionary cost should or should not be allowed. In the absence of any objection to such an item of discretionary costs, the court may disallow on its own motion any such items of discretionary costs and shall make express findings supporting such disallowance.

The trial court found that the discretionary costs awarded to IPC against the plaintiffs were reasonable and justified and that the interests of justice required plaintiffs to reimburse IPC for those costs. We conclude that the trial court did not abuse its discretion in awarding these costs.

It is not necessary for us to address the issue of the award of costs pursuant to I.R.C.P. 68. This award only duplicated the award of costs as a matter or right pursuant to I.R.C.P. 54(d)(1)(C) and of discretionary costs pursuant to I.R.C.P. 54(d)(1)(D).

III. THE TRIAL COURT DID NOT ABUSE ITS DISCRETION IN AWARDING ATTORNEY FEES PURSUANT TO I.C. § 12-121 AND I.R.C.P. 54(e)(1).

The plaintiffs assert that the trial court abused its discretion by awarding attorney fees to IPC pursuant to I.C. § 12-121 and I.R.C.P. 54(e)(1), after denying IPC's motion for summary judgment and IPC's motion to dismiss at the conclusion of the plaintiffs' case-in-chief. We disagree.

In Anderson v. Ethington, 103 Idaho 658, 651 P.2d 923 (1982), this Court ruled that the denial of summary judgment does not rule out the award of attorney fees under I.C. § 12-121. In Anderson this Court said:

It is conceivable that a party may prevail on a motion for summary judgment and still have brought the claim without reasonable foundation. This situation can occur because of the rules governing summary judgment motions. Summary judgment should be granted only when the pleadings, depositions and admissions, together with affidavits, if any, show that there is no genuine issue as to any material fact. The facts are to be liberally construed in favor of the party opposing the motion, who is also to be given the benefit of all favorable inferences which might be reasonably drawn from the evidence. While a genuine issue may appear on the face of the pleadings and affidavits, it does not necessarily follow that the evidence introduced at trial sustains that position. At the end of the trial the court concluded that the third party complaint was without reasonable foundation. The fact that it had previously found for the party on summary judgment does not necessarily establish that the complaint was reasonable and well founded.

Id. at 660, 651 P.2d at 925 (citation omitted).

Although I.R.C.P. 54(e)(1) had not become effective when the action was filed in Anderson, the conclusion of the Court in that case is still valid. I.R.C.P. 54(e)(1) specifies that before the trial court may award attorney fees under I.C. § 12-121, it must find, "from the facts presented to it, that the case was brought, pursued or defended frivolously, unreasonably or without foundation." This requirement does not change the principle established in Anderson. It merely limits the trial court's exercise of discretion under I.C. § 12-121 to those cases in which the trial court makes the necessary finding.

We have taken a different view from that expressed in Anderson where the trial court in a nonjury case has denied a motion to dismiss at the close of trial and later awarded attorney fees to the defendant. In J.M.F. Trucking, Inc. v. Lewiston Carburetor & Electric, Inc., 113 Idaho 797, 748 P.2d 381 (1987), this Court considered an award of attorney fees in a nonjury case under I.C. § 12-121 and I.R.C.P. 54(e)(1). In reversing the award, the Court said:

It is simply inconsistent and arbitrary for the trial court to have denied the motion to dismiss ..., stating that reasonable factual conflicts existed sustaining the claim, and to later allow an award of attorney fees on the basis that the [claim] was frivolously and unreasonably pursued.

Id. at 799, 748 P.2d at 383.

Here, the trial court considered a motion to dismiss at the close of the plaintiffs' case-in-chief. We note first that in denying the motion to dismiss the trial court did not, as the trial court did in J.M.F. Trucking, explicitly state that reasonable factual conflicts existed sustaining the claim. However, we construe the...

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