Lincoln Land Co v. LP Broadband ( 2017 )

IN THE SUPREME COURT OF THE STATE OF IDAHO
Docket No. 44612
LINCOLN LAND COMPANY, LLC, an )
Idaho limited liability company, )
)
Plaintiff-Appellant-Cross Respondent, )
)
v.
)
LP BROADBAND, INC., a Colorado )
corporation, successor by merger to )
MicroServ, Inc., an Idaho corporation, ) Twin Falls, November 2017 Term
Defendant-Respondent- )
Cross Appellant. ) 2017 Opinion No. 135
)
_____________________________________ ) Filed: December 26, 2017
LP BROADBAND, INC., )
) Karel A. Lehrman, Clerk
Third Party Plaintiff-Respondent, )
v. )
)
GENERAL MILLS, INC. and GENERAL )
MILLS OPERATIONS, LLC, )
)
Third Party Defendants-Respondents. )
_______________________________________ )
Appeal from the District Court of the Seventh Judicial District of the
State of Idaho, Bonneville County. Hon. Dane H. Watkins, Jr., District Judge.
The district court’s judgment is affirmed. Costs on appeal are awarded
to respondent.
Fuller & Beck Law Offices, PLLC, Idaho Falls, for appellant Lincoln
Land Company, LLC. Mark R. Fuller argued.
Swafford Law, P.C., Idaho Falls for respondent/cross-appellant
LP Broadband. Larren K. Covert argued.
Givens Pursley, LLP, Boise, for respondents/cross-appellants
General Mills. Alexander P. McLaughlin argued.
_____________________
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JONES, J.
I. NATURE OF THE CASE
In a case arising out of Bonneville County, Lincoln Land Company, LLC (“Lincoln
Land”), appeals a district court’s judgment, which dismissed Lincoln Land’s complaint. LP
Broadband cross-appeals the district court’s denial of LP Broadband’s motion for attorney fees.
The dispute arose over LP Broadband’s placement and use of antenna equipment on the
rooftop of a grain silo that is owned by Lincoln Land, but leased to General Mills. General Mills
had allowed MicroServ Computer Technologies, Inc., (“MicroServ”) (which merged with LP
Broadband in 2013) to utilize the rooftop space on the property since March 2000, in exchange
for $50 per month. Lincoln Land subsequently purchased the grain silos and, in 2010, executed a
lease agreement with General Mills, which specifically prohibited a sublease of the property
without prior written consent from Lincoln Land. Notwithstanding the lease provision, General
Mills continued to sublease the rooftop space to LP Broadband. Upon discovering that LP
Broadband was using the rooftop space, Lincoln Land filed a complaint against LP Broadband
for unjust enrichment. Therein, Lincoln Land argued that it had conferred a benefit to LP
Broadband and that it would be inequitable for LP Broadband to retain such a benefit without
compensating Lincoln Land. The district court dismissed the complaint after concluding that
Lincoln Land failed to establish that it—not General Mills—had conferred the benefit to LP
Broadband.
II. FACTUAL AND PROCEDURAL BACKGROUND
In March 2000, MicroServ and General Mills entered into an agreement that permitted
MicroServ to utilize grain silo rooftop space for $50 per month (the “Rooftop Agreement”). At
the time, the grain silos were owned by Evan’s Grain and Elevator Company but leased to
General Mills. The Rooftop Agreement allowed MicroServ to use the rooftop of the grain
elevators for a period of no less than three years, and up to five years with annual renewals after
the first three years.
In March 2006, Lincoln Land purchased the property from Evan’s Grain and Elevator
Company. In June 2010, Lincoln Land leased the property and elevators to General Mills. The
lease agreement prohibited General Mills from subletting the property without prior written
consent from Lincoln Land. Despite the lease provision, MicroServ, and subsequently LP
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Broadband, 1 utilized the rooftops between July 2010 and April 2014 without Lincoln Land’s
knowledge or consent. LP Broadband made monthly rental payments to General Mills.
After learning of LP Broadband’s use of the rooftops, Lincoln Land filed a complaint
alleging that LP Broadband had been unjustly enriched through its use of Lincoln Land’s
property. LP Broadband filed a third-party complaint against General Mills seeking
indemnification.
Subsequently, Lincoln Land moved for partial summary judgment on its unjust
enrichment claim with the amount of unjust enrichment to be determined at trial. LP Broadband
filed its own motion for summary judgment arguing that Lincoln Land could not make out a
prima facie case for unjust enrichment because it was General Mills—not Lincoln Land— that
conferred the benefit.
After a hearing, the district court entered its memorandum decision and order wherein it:
(1) granted LP Broadband’s motion for summary judgment; and (2) dismissed Lincoln Land’s
complaint. The district court concluded that it was General Mills—not Lincoln Land—that
conferred the benefit by granting LP Broadband permission to use the rooftop. The district court
reasoned that “[i]f, as Lincoln Land argues, General Mills’ decision to permit LP Broadband to
use the rooftop was in violation of the Lease Agreement . . . . Such a mistake or alleged breach of
contract does not alter the fact that it was General Mills, not Lincoln Land, which conferred the
benefit.” The district court acknowledged that Lincoln Land supported the allegation that the
lease between General Mills and LP Broadband was below market value, but ultimately held that
“[b]ecause the benefit was conferred by General Mills and not by Lincoln Land, this [c]ourt need
not consider whether the lease payment was below market value.” Further, the district court held
that, because it granted summary judgment dismissing Lincoln Land’s complaint, it did not need
to consider LP Broadband’s request for indemnification. 2
LP Broadband then filed a motion requesting attorney fees, which the district court
denied. First, the district court held that attorney fees pursuant to Idaho Code section 12-120(3)
1
In May 2013, MicroServ merged with LP Broadband.
2
LP Broadband and General Mills executed a stipulation dismissing LP Broadband’s claims against General Mills
with prejudice. However, the agreement recognized that if Lincoln Land’s appeal resulted in the revival of Lincoln
Land’s unjust enrichment claim, it would also revive LP Broadband’s claim against General Mills, as well as any
rights or defenses of General Mills.
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were not appropriate because a commercial transaction never occurred between Lincoln Land
and LP Broadband (the district court found that the commercial transaction actually occurred
between General Mills and LP Broadband). Second, the district court held that attorney fees were
not appropriate under Idaho Code section 12-121 because Lincoln Land’s claim was not
frivolous, unreasonable, or without foundation, i.e., General Mills did not have the authority to
sublease the rooftop space to LP Broadband, and Lincoln Land provided evidence that supported
its claim that the sublease was below market value. Third, the district court held that LP
Broadband could not recover attorney fees under Idaho Code section 12-123 because Lincoln
Land’s arguments were supported by a good faith argument for an extension of existing law. The
district court awarded LP Broadband $136.00 in costs for its initial appearance fee, but declined
to award any discretionary costs pursuant to Idaho Rule of Civil Procedure 54(d)(1)(D).
Lincoln Land timely appealed the district court’s dismissal of its complaint. LP
Broadband filed a timely cross-appeal of the district court’s denial of attorney fees.
III. ISSUES ON APPEAL
1. Whether the district court erred by finding that Lincoln Land did not confer a benefit to
LP Broadband.
2. Whether the district court erred by denying LP Broadband’s request for attorney fees.
3. Whether any party is entitled to attorney fees on appeal.
IV. STANDARD OF REVIEW
This Court applies the same standard of review that was used by the trial court in ruling
on a motion for summary judgment. Quemada v. Arizmendez, 153 Idaho 609, 612, 288 P.3d 826,
829 (2012) (quoting Vreeken v. Lockwood Eng'g, B. V., 148 Idaho 89, 101, 218 P.3d 1150, 1162
(2009)). Summary judgment is proper “if the pleadings, depositions on file, together with the
affidavits, if any, show that there is no genuine issue as to any material fact and that the moving
party is entitled to judgment as a matter of law.” I.R.C.P. 56(c) 3. “[T]his Court construes
disputed facts, and all reasonable inferences that can be drawn from the record, in favor of the
non-moving party.” Grabicki v. City of Lewiston, 154 Idaho 686, 690, 302 P.3d 26, 30 (2013)
(internal citation omitted).
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The district court granted summary judgment in May 2016. Effective July 1, 2016, Idaho Rule of Civil Procedure
56 was amended. The relevant portion of the rule now provides: “The court must grant summary judgment if the
movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law.” I.R.C.P. 56(a).
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“The nonmoving party must submit more than just conclusory assertions that an issue of
material fact exists to establish a genuine issue.” Nw. Bec–Corp v. Home Living Serv., 136 Idaho
835, 838, 41 P.3d 263, 266 (2002) (internal citation omitted). Accordingly, “[t]he moving party
is entitled to judgment when the nonmoving party fails to make a showing sufficient to establish
the existence of an element essential to that party’s case on which that party will bear the burden
of proof at trial.” Badell v. Beeks, 115 Idaho 101, 102, 765 P.2d 126, 127 (1988) (citing Celotex
v. Catrett, 477 U.S. 317 (1986)).
V. ANALYSIS
A. The district court did not err by granting summary judgment to LP Broadband
because Lincoln Land did not confer a benefit to LP Broadband.
Lincoln Land argues that the district court erred when it determined that General Mills—
not Lincoln Land—conferred a benefit to LP Broadband. Lincoln Land reasons that it was the
only party that could legally confer the benefit, i.e., the use of the property, to LP Broadband
because the lease between Lincoln Land and General Mills specifically prohibited General Mills
from subleasing any portion of the property without prior written consent. Further, Lincoln Land
argues that Idaho law does not require a direct link between a plaintiff and a defendant to
establish the first element of an unjust enrichment claim. Lincoln Land asserts that the emphasis
is on the receipt of a benefit by a defendant, rather than the intentional conferral by a plaintiff. In
sum, Lincoln Land argues that LP Broadband received a benefit, and it would be inequitable for
LP Broadband to retain the benefit without compensating Lincoln Land.
LP Broadband concedes that it received the benefit of access and use of the rooftop
space; however, it contends that this benefit was conferred by General Mills. LP Broadband
argues that Idaho case law supports the district court’s holding that to satisfy the first element of
an unjust enrichment claim the plaintiff must confer an actual benefit to the defendant.
Similarly, General Mills argues that the district court correctly determined that Lincoln
Land did not confer a benefit to LP Broadband, but rather, Lincoln Land conferred a benefit to
General Mills, which General Mills then conferred to LP Broadband. General Mills contends that
mere use of property by a defendant—even unauthorized use—is not a substitute for the
requirement that a plaintiff seeking to recover under unjust enrichment theory be the one to
actually confer the benefit in question to the defendant.
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To establish a claim for unjust enrichment, a plaintiff must prove: “(1) there was a benefit
conferred upon the defendant by the plaintiff; (2) appreciation by the defendant of such benefit;
and (3) acceptance of the benefit under circumstances that would be inequitable for the defendant
to retain the benefit without payment to the plaintiff for the value thereof.” Stevenson v.
Windermere Real Estate/Capitol Grp., Inc., 152 Idaho 824, 827, 275 P.3d 839, 842 (2012)
(internal citation omitted).
In Stevenson, the Stevensons attempted to purchase a condominium from Jefferson and,
pursuant to the purchase agreement, deposited earnest money with Jefferson’s broker,
Windermere. Id. at 825, 275 P.3d at 840. Upon receiving written authorization from the
Stevensons, Windermere transferred the funds to Jefferson, who then paid Windermere a partial
commission. Id. Jefferson subsequently decided not to sell the condominium and failed to return
the Stevensons’ earnest money deposit as required by the purchase agreement. Id. The
Stevensons filed suit, advancing a claim of unjust enrichment against Jefferson and Windermere.
Id. at 826, 275 P.3d at 841. This Court found that Windermere was not a party to the purchase
agreement between the Stevensons and Jefferson, and that “[t]he Stevensons’ argument, reduced
to its essence, is that because they conferred a benefit upon Jefferson, and Jefferson conferred a
benefit upon Windermere, they can cut out the middleman and directly recover from
Windermere for unjust enrichment.” Id. at 827, 275 P.3d at 842. Ultimately, this Court rejected
the Stevensons’ argument and held that it was Jefferson who conferred the benefit on
Windermere. Id. at 829, 275 P.3d at 844.
In MRS, a dispute arose between two collection agencies, Medical Recovery Services
(MRS) and Bonneville Billing and Collections (BBC), who both had outstanding accounts
relating to the same debtor. Medical Recovery Serv., LLC v. Bonneville Billing and Collections,
Inc., 157 Idaho 395, 396, 336 P.3d 802, 803 (2014). MRS obtained a judgment to garnish the
debtor’s wages. Id. However, the debtor’s employer, WSEC, mistakenly sent garnishment of the
debtor’s wages to BBC instead of MRS. Id. at 803–04, 336 P.3d at 803–04. BBC refused to
return the money, and MRS filed suit for conversion and unjust enrichment. Id. This Court
determined that BBC was not unjustly enriched because MRS conferred no benefit to BBC.
Specifically, this Court held that “[t]o confer a benefit in the context of unjust enrichment, the
plaintiff must give the defendant an interest in money, land, or possessions, or perform services
beneficial to, or at the request of, the other.” Id. at 399, 336 P.3d at 806 (citing 42 C.J.S. Implied
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Contracts § 9). Ultimately, MRS did nothing for the benefit of BBC, instead, the benefit BBC
enjoyed was conferred by WSEC when it sent the checks. Id.
In Brewer, William and Robert Brewer (the Brewers) were tenants in common with their
aunt, Kinzer, and various other family members. Brewer v. Wash. RSA No. 8 Ltd. P’ship, 145
Idaho 735, 737, 184 P.3d 860, 862 (2008). Kinzer managed the property and entered into various
leases, one of which was a lease with Inland Cellular to operate communication towers on the
property. Id. The Brewers did not authorize the lease, and Kinzer never spoke with the Brewers
regarding the lease. Id. The Brewers subsequently sued Kinzer, the other tenants in common, and
various lease holders, including Inland Cellular, alleging, among other things, unjust enrichment.
Id. at 738, 184 P.3d at 863. The district court granted Inland Cellular’s motion for summary
judgment on the claim for unjust enrichment. Id. On appeal, this Court held that the Brewers
bore the burden of proving their unjust enrichment claim, and “failed to point to a single fact in
the record either below or on appeal that creates a genuine issue of material fact.” Id. at 740, 184
P.3d at 865. Instead, this Court found that the Brewers had “merely made unsubstantiated
allegations relating to the lease.” Id.On the contrary, in Idaho Lumber, Walker leased a building (the “Building”) and
property from Buck. Idaho Lumber, Inc. v. Buck, 109 Idaho 737, 739, 710 P.2d 647, 649 (Ct.
App. 1985). Walker and Idaho Lumber executed a contract for Idaho Lumber to remodel the
Building. Id. Buck knew that Walker was going to remodel the Building but declined to
participate. Id. Walker defaulted on the remodel contract and his lease with Buck. Id. As a result,
Idaho Lumber filed an unjust enrichment claim against Buck. Id. The district court determined
that Buck had been unjustly enriched by the labor and materials that Idaho Lumber supplied. Id.The Idaho Court of Appeals affirmed the judgment, and, with respect to the first element of
unjust enrichment, held: “[b]ecause the value of [Buck’s] property was unquestionably increased
by the labor and materials supplied by Idaho Lumber, Buck was enriched at the expense of Idaho
Lumber.” Id. at 746, 710 P.2d at 656.
The crux of this appeal is whether Lincoln Land established that it had conferred a
benefit to LP Broadband. Lincoln Land’s primary argument is that, because the lease between
General Mills and Lincoln Land prevented subleasing, any attempt by General Mills to confer a
benefit to LP Broadband was illegal, making LP Broadband’s use of the property an
appropriation from Lincoln Land. However, Lincoln Land’s argument ignores the fact that the
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lease granted General Mills the right to quiet enjoyment of the entire property. Lincoln Land’s
interest at the time was a reversionary interest at the expiration of the lease. As a result, at the
time LP Broadband received a benefit, Lincoln Land did not have the ability to confer a
possessory interest in the property.
At the outset, Lincoln Land argues that the present facts are distinguishable from those in
MRS. First, Lincoln Land contends that the mistake in MRS related to personal property rather
than real property, which is an important distinction because pursuant to Idaho Code section 55-
607, “a tenant cannot ‘mistakenly’ transfer a greater estate in real property than the tenant
possesses.” I.C. § 55-607. Accordingly, Lincoln Land argues that General Mills could not have
conferred any real property benefit to LP Broadband. Second, Lincoln Land argues that the basis
of the holding in MRS is that, at the time of the employer’s mistake, MRS had no ownership in
the property because the property flowed directly from the employer to BBC. Lincoln Land
argues that unlike the circumstances in MRS, Lincoln Land did retain the ownership interest in
the property that was subsequently given to LP Broadband. However, as stated previously,
because of the lease agreement between Lincoln Land and General Mills, Lincoln Land had no
possessory interest in the property to confer at the time LP Broadband received that benefit.
Instead, it was General Mills that chose to grant LP Broadband the benefit of utilizing the
rooftop space.
If General Mills violated the lease agreement by granting LP Broadband access to the
rooftops, the obvious cause of action would have been for breach of contract, not unjust
enrichment. Just as we found that MRS did not confer a benefit to BBC, we find that Lincoln
Land did not confer a benefit to LP Broadband; rather, it was General Mills, even if by mistake
or in violation of the lease, that conferred the benefit. See MRS, 157 Idaho at 399, 336 P.3d at
806.
Lincoln Land also attempts to distinguish the present facts from this Court’s decision in
Brewer, in which this Court analyzed whether unauthorized use of land could still constitute a
benefit conferred in the context of unjust enrichment. Brewer, 145 Idaho at 739, 184 P.3d at 864.
Initially, Lincoln Land disputes the district court’s interpretation of this Court’s holding in
Brewer. In its decision, the district court reasoned that Brewer provided further clarification on
this Court’s application of the first element of an unjust enrichment claim. Specifically, the
district court recognized this Court’s statement that “the Brewers ‘merely asserted that Inland
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Cellular’s use of the land was a benefit’ appears to indicate that the Idaho Supreme Court did not
consider Inland Cellular’s use of the property without the Brewers’ authorization to be sufficient,
by itself, to establish that the Brewers conferred a benefit on Inland Cellular.” Lincoln Land
argues that Brewer does not stand for this proposition, and that the district court’s decision “will
only give rise to a claim for unjust enrichment where the unauthorized use was conferred upon
the trespasser by the lawful owner (which would of necessity mean the use is no longer
unauthorized).” However, this is a mischaracterization of the district court’s holding, which
simply referenced Brewer for the proposition that use of the property without authorization is not
sufficient, by itself, to establish that a benefit was conferred.
Further, Lincoln Land argues that, unlike the Brewers who failed to establish genuine
issues of material fact, Lincoln Land has met its burden because LP Broadband admits that it
occupied the premises, installed equipment on the rooftop of the property, and remained upon the
property pursuant to a lease with General Mills. Lincoln Land also argues that it has provided
factual evidence of the value of the benefit, including the below market rent paid to General
Mills and monthly revenue received by LP Broadband. However, Lincoln Land’s arguments do
not address whether Lincoln Land in fact conferred a benefit to LP Broadband. Instead, Lincoln
Land appears to address the third element of unjust enrichment, i.e., whether it would be
inequitable to allow LP Broadband to retain the benefit of a below market lease. However,
discussion of the third element of unjust enrichment is unnecessary because we affirm the district
court’s holding that Lincoln Land failed to satisfy the first element of unjust enrichment.
The current posture of the parties aligns closely with the facts set forth in Stevenson. The
Stevensons argued that “because [the Stevensons] conferred a benefit upon Jefferson, and
Jefferson conferred a benefit upon Windermere, they can cut out the middleman and directly
recover from Windermere for unjust enrichment.” Stevenson, 152 Idaho at 827, 275 P.3d at 842.
Similarly, Lincoln Land argues that it can cut out the middleman—General Mills—because it
conferred a benefit on General Mills, which was then conferred upon LP Broadband. We rejected
the Stevensons’ argument, and we now reject Lincoln Land’s argument on the same basis, i.e.,
just as the Stevensons could not cut out the middleman—Jefferson—and recover from
Windermere, Lincoln Land cannot cut out the middleman—General Mills—and recover from LP
Broadband. While Lincoln Land may have suffered a wrongdoing on its property, the proper
avenue for relief is simply not a claim for unjust enrichment.
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We are also unpersuaded by Lincoln Land’s argument that this case is analogous to Idaho
Lumber. Specifically, we find that Idaho Lumber is distinguishable from this case for two
reasons: (1) the posture of the litigants is completely different; and (2) the nature of the benefit
conferred is completely different. First, in Idaho Lumber the Idaho Court of Appeals found that
Buck, the owner of the property, was unjustly enriched by Idaho Lumber’s physical
improvements to the building. Idaho Lumber, 109 at 746, 710 P.2d at 656. However, here, the
owner of the silos—Lincoln Land—is arguing that LP Broadband was unjustly enriched through
its use of the property. Thus, the posture of the parties distinguishes this case from Idaho
Lumber. Second, in Idaho Lumber, the benefit conferred upon Buck was the physical
improvement of the building. Id. However, here, the benefit conferred upon LP Broadband was
merely access to a rooftop space. General Mills provided such access; therefore, Lincoln Land is
not entitled to unjust enrichment.
Ultimately, we affirm the district court’s judgment because Lincoln Land has failed to
demonstrate that it conferred the benefit upon LP Broadband.
B. The district court did not err by denying LP Broadband’s request for attorney fees.
This Court reviews an award of attorney fees for an abuse of discretion. Bryan Trucking,
Inc. v. Gier, 160 Idaho 422, 425, 374 P.3d 585, 588 (2016). To prove an abuse of discretion, this
Court looks to three factors: “(1) whether the trial court correctly perceived the issue as one of
discretion; (2) whether the trial court acted within the boundaries of its discretion and consistent
with legal standards applicable to the specific choices available to it; and (3) whether the trial
court reached its decision by an exercise of reason.” Fox v. Mountain West Elec., Inc., 137 Idaho
703, 711, 52 P.3d 848, 856 (2002) (internal citations omitted).
LP Broadband argues that the district court erred in denying its request for attorney fees
because the claim at issue is the result of a commercial transaction. In support of this argument,
LP Broadband reasons that Idaho law does not require that the transaction be proven, instead
“only . . . the basis of the claim [must] be rooted in a commercial transaction.” Further, LP
Broadband contends that the district court erred when it determined that this matter was not
brought and defended frivolously. Specifically, LP Broadband contends that Lincoln Land’s
failure to present evidence of a benefit to LP Broadband made its unjust enrichment claim
meritless.
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Lincoln Land argues that the district court correctly denied LP Broadband’s request for
attorney fees because there was no commercial transaction between Lincoln Land and LP
Broadband. Lincoln Land claims that after LP Broadband successfully argued that no
commercial transaction existed, it cannot now characterize the action as one based upon a
commercial transaction to obtain attorney fees. Further, Lincoln Land argues that the district
court correctly found that its claims were based on a violation of Lincoln Land’s rights as owner
of the subject property, and that the arguments were supported by a good faith argument for an
extension of existing law.
Idaho code section 12-120(3) provides that a prevailing party shall be allowed reasonable
attorney fees related to a civil action to recover on a commercial transaction. I.C. § 12-120(3).
“The term ‘commercial transaction’ is defined to mean all transactions except transactions for
personal or household purposes.” Id. “[A]ttorney fees are not appropriate under I.C. § 12-120(3)
unless the commercial transaction is integral to the claim, and constitutes the basis upon which
the party is attempting to recover.” Baxter v. Craney, 135 Idaho 166, 174, 16 P.3d 263, 271
(2000) (citing Brower v. E.I. DuPont DeNemours & Co., 117 Idaho 780, 784, 792 P.2d 345, 349
(1990)). Further, this Court has held that “only the parties to the commercial transaction are
entitled to attorney fees under I.C. §12-120(3).” Printcraft Press, Inc. v. Sunnyside Park Utilities,
Inc., 153 Idaho 440, 461, 283 P.3d 757, 778 (2012). “Whether a district court has correctly
determined that a case is based on a ‘commercial transaction’ for the purpose of I.C. § 12-120(3)
is a question of law,” over which this Court exercises free review. Fritts v. Liddle & Moeller
Const., Inc., 144 Idaho 171, 173, 158 P.3d 947, 949 (2007) (internal citations omitted).
Idaho Code section 12-121 provides:
In any civil action, the judge may award reasonable attorney’s fees to the
prevailing party or parties, provided that this section shall not alter, repeal or
amend any statute which otherwise provides for the award of attorney’s fees. The
term “party” or “parties” is defined to include any person, partnership,
corporation, association, private organization, the state of Idaho or political
subdivision thereof.
I.C. § 12-121. This Court has held that an award of attorney fees pursuant to Idaho Code section
12-121 is not a matter of right, “but is appropriate only when the court, in its discretion, is left
with the abiding belief that the case was brought, pursued, or defended frivolously,
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unreasonably, or without foundation.” Hoover v. Hunter, 150 Idaho 658, 664, 249 P.3d 851, 857
(2011) (internal citation omitted).
Idaho Code section 12-123 allows a court to award reasonable attorney fees to any party
adversely affected by frivolous conduct in a civil action. I.C. § 12-123(2)(a). Frivolous conduct
is defined as conduct that either: (i) serves to merely harass or maliciously injure another party;
or (ii) is not supported in fact or warranted under existing law and cannot be supported by a good
faith argument for an extension, modification, or reversal of existing law. Id. at (1)(b).
Further, I.R.C.P. 54(d) allows for costs to be awarded as a matter of right to the
prevailing party.
We find that the district court correctly denied LP Broadband’s request for attorney fees
under Idaho Code section 12-120(3) because a commercial transaction never occurred between
Lincoln Land and LP Broadband. Printcraft Press, 153 Idaho at 461, 283 P.3d at 757, 778
(“[O]nly the parties to the commercial transaction” are entitled to attorney fees under Idaho Code
section 12-120(3)).
Next, we review whether the district court properly denied LP Broadband’s request for
attorney fees under Idaho Code section 12-121, when LP Broadband was the prevailing party.
The district court determined that Lincoln Land’s claim was not frivolous, unreasonable, or
without foundation because: (1) General Mills did not have the authority to sublease the rooftop
space to LP Broadband; and (2) Lincoln Land’s evidence established the below market value of
the sublease. We find that the district court perceived its decision—whether to award attorney
fees under Idaho Code section 12-121—as one of discretion; acted within the boundaries of its
discretion; and reached its decision by an exercise of reason. On the same basis, we find that the
district court acted within its discretion to deny LP Broadband’s request for attorney fees
pursuant to Idaho Code section 12-123 because the district court found that Lincoln Land’s
arguments were supported by a good faith argument seeking an extension of existing law based
on its rights as the property owner.
Last, we hold that the district court correctly concluded that LP Broadband was entitled
to its initial filing fee pursuant to I.R.C.P. 54(d)(1)(C)(i).
C. No attorney fees awarded on appeal.
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LP Broadband requests attorney fees on appeal pursuant to Idaho Code sections 12-120
and 12-121; Idaho Rule of Civil Procedure 54; Appellate Rules 40 and 41; and all other
applicable rules and statutes.
Attorney fees are permissible on appeal to the prevailing party in civil action. I.C. § 12-
121. However, “[a]ttorney fees are not appropriate under I.C. §12-121 and I.R.C.P. 54(e) unless
all claims brought . . . are frivolous and without foundation.” Anderson v. Goodlife, 140 Idaho
446, 450, 95 P.3d 64, 68 (2004) (internal citations omitted). Costs are awarded to the prevailing
party on appeal “as a matter of course.” I.A.R. 40
We decline to award attorney fees on appeal for the same reasons outlined by the district
court, i.e., the commercial transaction occurred between General Mills and LP Broadband, not
LP Broadband and Lincoln Land. Additionally, Lincoln Land’s claims were not frivolous or
without foundation; thus, attorney fees are denied pursuant to Idaho Code section 12-121.
LP Broadband, the prevailing party, is awarded costs on appeal pursuant to Idaho
Appellate Rule 40.
VI. CONCLUSION
This Court hereby affirms the district court’s judgment and awards costs on appeal to LP
Broadband.
Chief Justice BURDICK and Justices JONES, HORTON, BRODY and BEVAN,
CONCUR.
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