Stafford L. Smith v. Woodruff D. Smith

IN THE SUPREME COURT OF THE STATE OF IDAHO
Docket No. 42621
STAFFORD L. SMITH, )
)
Plaintiff-Counterdefendant-Respondent, )
) Boise, February 2016 Term
v. )
) 2016 Opinion No. 90
WOODRUFF D. SMITH, )
) Filed: September 9, 2016
Defendant-Counterclaimant-Third Party )
Plaintiff-Appellant, ) Stephen Kenyon, Clerk
)
and )
)
SMITH CHEVROLET CO., INC., and )
STAFFWOOD PARTNERSHIP, )
)
Third Party Defendants-Respondents. )
Appeal from the District Court of the Seventh Judicial District of the State of
Idaho, Bonneville County. Hon. Jon J. Shindurling, District Judge.
The judgment of the district court is affirmed.
Ray Quinney & Nebeker P.C., Salt Lake City, Utah, for appellant. Robert P.
Harrington argued.
Preston & Scott and Snow, Christensen & Martineau, Salt Lake City, Utah, for
respondents. Stanley J. Preston argued.
_______________________________________________
HORTON, Justice.
Woodruff Smith appeals from the district court’s grant of judgment on the pleadings and
award of attorney fees to Stafford Smith in a suit seeking specific performance of a contract. We
affirm.
I. FACTUAL AND PROCEDURAL BACKGROUND
Stafford Smith and Woodruff Smith (Woody) are brothers. Their father established Smith
Chevrolet, and over the years the brothers have co-owned several auto dealerships, other
businesses, and parcels of real property. The brothers each own 50% of Staffwood, an entity that
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owns properties and other assets. In 2010, a dispute arose between the brothers involving their
business dealings, and on November 10, 2010, the brothers entered into a settlement agreement
(the 2010 Agreement) that gave ownership of Smith Chevrolet to Stafford. The 2010 Agreement
also identified four parcels of land that either brother could purchase through a bid process.
These parcels are described as the Smith Chevrolet Property, RV Property, Outlet Property, and
Motor City Property. Between 2010 and 2012, various transactions occurred between Smith
Chevrolet, Woody, Stafford, and Staffwood which culminated in another dispute between the
brothers and another settlement agreement (the 2012 Agreement). The 2012 Agreement provided
that each brother had the right to initiate a bid process to purchase the properties owned by
Staffwood.
In 2013, Stafford initiated the process to purchase the Smith Chevrolet Property, RV
Property, and the Outlet Property (collectively “the Bid Properties”) from Staffwood. Woody
countered with his own bid, and the brothers then entered into a bidding war that lasted several
months. Throughout 2013, the brothers placed bids and discussed terms regarding the purchase
of the Bid Properties from Staffwood. On October 17, 2013, Woody placed a bid for the Bid
Properties, and Stafford withdrew from the bidding process.
On December 4, 2013, Woody sent a letter to the management of Staffwood in which he
asserted that he had won the bidding process and asked Stafford to clear the title to the Smith
Chevrolet Property. On December 20, 2013, Stafford sent a letter to Woody indicating that he
was willing to purchase the Bid Properties. On December 20, 2013, Stafford’s attorney wrote to
Woody’s attorneys and represented:
Stafford is willing to purchase the subject properties from Staffwood, including
the Outlet Center property, on the following terms and conditions:
1. Stafford will pay the sum $2,800,000 for the properties that were the subject
of the bid process, which amount is $50,000 more than his last bid;
2. The funds Woody has escrowed under the bid process will be returned to him
at closing;
3. In light of the holidays, the closing on Stafford’s purchase will take place
thirty (30) days from the date the parties sign an agreement as to the terms of
Stafford’s purchase of the subject properties;
4. The net proceeds from the sale of the subject properties will be divided
between Staffwood’s partners after satisfying the following obligations:
a. Payment in full of Staffwood’s loan from Wells Fargo Bank;
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b. Payment to Smith Chevrolet of the funds it has advanced above its
lease obligation on behalf of Staffwood to ensure adequate funds for
Staffwood to pay its ongoing obligations, which payment is pursuant
to the parties’ agreement as set forth in Section 10.4 of the July 5,
2012 Settlement Agreement. These obligations include, but are not
limited to, accounting costs, taxes, insurance, maintenance, repairs and
servicing the Wells Fargo Bank loan. Exact amounts to be repaid to
Smith Chevrolet shall be determined by means of an audit conducted
by Staffwood’s accountant, Kevin Oakey, but said amounts are
anticipated to be in excess of $350,000; and
c. Staffwood’s retention of a mutually agreed amount as a reserve to
enable Staffwood to pay its ongoing obligations on its remaining
properties. Stafford recommends that the retained sum should be
$50,000 but in no event should the retained amount be less than
$20,000.
In addition, as you are aware, the sale of Staffwood’s Pocatello property
will take place in the near future. Woody has agreed to the terms of the sale, but
requested that the proceeds from the sale not be distributed until the parties reach
a settlement agreement. Stafford estimates that the net proceeds from this sale will
be approximately $230,000. Assuming the sale takes place as planned, it is
proposed that the net proceeds from this sale be distributed to the partners once an
agreement is signed in writing regarding Stafford’s purchase of the subject bid
properties or, alternatively, that these funds be distributed simultaneously with the
closing of Stafford’s purchase of the bid properties.
Of course, once we reach an agreement on Staffwood’s [sic] purchase of
the bid properties, we will expect to promptly receive your proposal for dividing
Staffwood’s remaining properties between the partners. Please let me know as
soon as possible whether the foregoing is acceptable to your client.
On January 13, 2014, Woody’s attorneys responded by a letter to Stafford’s attorney:
Woody hereby accepts Stafford’s offer as set forth in your letter of
December 20, 2013.
For purposes of certainty and clarification, we set forth below further
detail about our understanding of the terms of settlement. In paragraph no. 8
below, we propose that the parties attempt to agree on a way that this transaction
may be done on a tax free basis. Woody’s accountants believe that by treating the
entire transaction as a distribution in dissolution of the parties’ interests in
Staffwood, the parties can come out the same as agreed without incurring
negative tax consequences. This would seem to be beneficial to both parties, but
since this provision is outside of the terms of Stafford’s offer, we make clear that
we do not require Stafford’s agreement to paragraph no. 8.
Also, as requested, we propose a division of the balance of the Staffwood
property, which we have set forth below. It does not matter to Woody which
election Stafford makes of these two Property Sets. We do not see how the
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property can be divided any other way without resulting in joint or adjacent
ownership of any properties, which may cause conflict or irritation in the future.
Accordingly, the points of understanding are as follows:
1. Stafford closes on the 3 bid properties at $2.8 million (“Closing”),
which Closing is to be held within 30 days of the date hereof. [FN1:
You indicated that Stafford needed 30 days because of the holidays.
Now that the holidays have passed, Woody is willing to close this in a
much shorter time frame if Stafford is able to do so. Earlier closing
will also save the parties additional interest.]
2. Funds escrowed by Woody in the bid process shall be returned upon
finalizing this agreement.
3. All funds from the Closing shall go to the account of Staffwood, and
shall be disbursed as follows: (a) payoff of Wells Fargo loan (assumed
to be about $875,000 at closing); and (b) refund of rent overpayment
by Smith Chevrolet and other expenses mentioned in your letter, will
be set at $350,000. [FN2: An audit of this amount would delay the
Closing. Woody proposes to set this at $350,000 and be done with it.]
Balance of funds from Closing shall be distributed equally to the
partners.
4. The balance of the properties shall be divided into two sets of
property/cash as set forth below. Stafford shall have the choice to
choose Property Set A or Property Set B, and Woody shall receive the
Property Set not elected by Stafford.
Property Set A Property Set B
*Snake River Landing Property Bellon Road Property
Less: $400, 000 Cash to Property B Blackfoot property
Recipient
**Pocatello property
$400,000 Cash from Property
A Recipient
*Recipient A assumes and pays, and holds Recipient B harmless from,
the $1.9 million note and deed of trust pertaining to this property.
**Recipient B shall receive all proceeds from the recent sale of this
property.
5. Staffwood’s approximately 7 acre plot west of the Snake River shall
not be divided, but shall be conveyed by Staffwood to the City of
Idaho Falls in connection with the Closing in order that each of the
parties in their capacity of partners of Staffwood may receive equal
benefit of the write off.
6. Conveyance of property in Property Sets A and B to the respective
party shall occur contemporaneously with the Closing. No such
conveyance or transfer of funds shall occur prior to Closing. [FN3:
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This avoids piecemeal settlement and motivates the parties to close. As
mentioned in footnote 1 above, Woody is ready to close as soon as
Stafford is able.]
7. The parties agree that upon Closing, all debts, claims or obligations (a)
owing to Staffwood from themselves or their respective entities, (b)
owing to them from Staffwood, and (c) owing to each other (except for
(i) continuing obligations of Stafford pursuant to Section 3.3 of the
November 10, 2010 Settlement Agreement, and (ii) continuing
obligations of the parties pertaining to the windup of SV Idaho
pursuant to Section 4 of the July 5, 2012 Settlement agreement), if
any, shall be released and settled by this Agreement.
8. In order to reduce taxes to the maximum extent possible, the parties
agree to discuss and attempt to agree prior to Closing concerning ways
by which Stafford’s receipt of the 3 bid properties along with other
division of cash and property to the parties hereunder may be treated
overall as an equal distribution of Staffwood assets in liquidation of
their ownership interest in Staffwood. If the parties cannot agree prior
to Closing, Closing of the bid properties and the subsequent divisions
shall take place exactly as set forth above.
9. Staffwood shall remain in existence after the closing until the end of
calendar year 2014 in order that Staffwood may be used to complete a
1031 like-kind exchange if desired, provided that nothing shall require
any action which increases the tax burden of the other party.
10. Staffwood shall then be dissolved prior to the end of calendar year
2014, unless it is being utilized for a 1031 like-kind exchange as
described in paragraph no. 9 above; in which case, Staffwood will be
dissolved upon completion of the 1031 transaction.
We look forward to hearing how Stafford would like to proceed.
On January 30, 2014, Stafford’s attorney sent a letter via email to Woody’s attorney that
stated:
Stafford is pleased that Woody has accepted Stafford’s settlement offer
based on the terms communicated in my letter to you dated December 20, 2013.
Please be advised that Stafford is willing to divide the remaining Staffwood
property consistent with the terms outlined in your letter dated January 13, 2014,
and Stafford has decided to choose Property Set B.
After additional correspondence between the brothers’ attorneys, a dispute arose as to the precise
terms of the agreements.
On March 7, 2014, Stafford filed his complaint, amended on March 17, for specific
performance of the agreements. On April 14, 2014, Woody filed an answer, counterclaim and
third-party complaint in which he contended that there was no binding agreement for the
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purchase of the Bid Properties. On April 14, 2014, Woody filed a motion to dismiss or in the
alternative a motion for summary judgment. On May 21, 2014, Stafford filed a motion for
judgment on the pleadings asking the district court to find that the correspondence between the
brothers’ attorneys constituted enforceable contracts.
On July 28, 2014, the district court issued its opinion and order granting Stafford’s
motion for judgment on the pleadings and denying Woody’s alternative motions to dismiss or for
summary judgment. The district court held that the correspondence between the attorneys
resulted in the formation of two contracts between the brothers. The district court determined
that the December 20, 2013, letter and the January 13, 2014, reply letter created an enforceable
contract for the sale of the Bid Properties. Likewise, the district court determined that the
January 13, 2014, letter and the January 30, 2014, reply resulted in a contract for the division of
the remaining Staffwood properties.
On September 3, 2014, Stafford filed a motion for attorney fees and costs. Stafford
requested attorney fees under Idaho Code section 12-120(3) and under the 2012 Agreement.
Woody opposed Stafford’s motion, arguing that the fees were unreasonable and that Idaho Code
section 12-120(3) was not applicable. On December 1, 2014, the district court granted Stafford’s
motion for attorney fees. Woody timely appealed.
II. STANDARD OF REVIEW
“I.R.C.P. 12(c) governs motions for judgment on the pleadings. By its terms, Rule 12(c)
treats such motions similarly to motions for summary judgment. Thus, the standard of review
applicable to lower courts’ rulings on motions for summary judgment also applies to motions for
judgment on the pleadings.” Trimble v. Engelking, 130 Idaho 300, 302, 939 P.2d 1379, 1381
(1997). Summary judgment is appropriate “if the pleadings, depositions, and admissions 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). “For purposes of
a motion for judgment on the pleadings, the moving party admits all the allegations of the
opposing party’s pleadings and also admits the untruth of its own allegations to the extent they
have been denied.” State v. Yzaguirre, 144 Idaho 471, 474, 163 P.3d 1183, 1186 (2007). “All
doubts are to be resolved against the moving party, and the motion must be denied if the
evidence is such that conflicting inferences may be drawn therefrom, and if reasonable people
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might reach different conclusions.” G & M Farms v. Funk Irr. Co., 119 Idaho 514, 517, 808 P.2d
851, 854 (1991).
III. ANALYSIS
We consider two primary issues on appeal: (1) whether Woody’s appeal from the district
court’s decision as to contract formation is moot due to satisfaction of the judgment; and (2)
whether the district court abused its discretion when it awarded Stafford attorney fees. Stafford
contends that Woody’s appeal is moot because Woody has already satisfied the judgment.
Woody responds that his appeal is not moot for two reasons. First, Woody contends that he “only
closed on the real estate transactions and cash disbursements because he was under a court order
to do so within ten days.” (emphasis in original). Woody argues that satisfaction of a judgment
only renders an appeal moot when it is voluntary, and the district court’s ten day requirement for
specific performance renders Woody’s satisfaction of the judgment involuntary. Second, Woody
contends that his “appeal is not moot with respect to the fee award.” We address these issues in
turn.
A. Woody’s appeal from the district court’s decision as to contract formation is moot.
As a preliminary matter, we note that nothing in the record before this Court shows that
Woody satisfied the judgment. Instead, statements in both parties’ briefing recognize that the
judgment has been satisfied. However, based on those statements and the parties’ representations
at oral argument that Woody has satisfied the judgment, we find that the issue of contract
formation is moot.
“A case becomes moot when the issues presented are no longer live or the parties lack a
legally cognizable interest in the outcome.” Farrell v. Whiteman, 146 Idaho 604, 610, 200 P.3d
1153, 1159 (2009). “An issue is moot if it presents no justiciable controversy and a judicial
determination will have no practical effect upon the outcome.” Id. “When a judgment debtor
voluntarily pays the judgment, the debtor’s appeal becomes moot, and it will be dismissed.”
Quillin v. Quillin, 141 Idaho 200, 202, 108 P.3d 347, 349 (2005).
Woody contends that his satisfaction of the judgment was involuntary; however, Woody
has not pointed to any authority or evidence in the record to support his claim that the district
court’s ten-day stipulation for performance under the judgment forced Woody to involuntarily
satisfy the judgment. The record shows that on August 21, 2014, Woody filed an objection to the
district court’s judgment entered on August 20, 2014. The objection was not to the judgment’s
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requirement of performance within a specified time; rather it was to the duration in which
performance was required. Woody asserted that the judgment was not sufficiently similar to the
terms of the correspondence that the district court found to have resulted in a contract. Woody
identified a number of requested changes which would make the judgment conform more closely
to the terms contained in the correspondence, including this objection: “The December 20 letter
makes no reference to ten days for closing but rather refers to thirty days from signing of an
agreement the parties never signed.” We can discern no basis for concluding that a ten-day
period for performance, rather than 30 days, rendered Woody’s subsequent satisfaction of the
judgment involuntary.
We note that Woody did not ask the district court to stay enforcement of the judgment, as
permitted by Idaho Appellate Rule 13(b)(8). He did not ask this Court to stay enforcement of the
judgment, as permitted by Idaho Appellate Rule 13(g). This is notable because Woody did file a
motion to stay enforcement of the district court’s award of attorney fees to Stafford.
Further, “[a] case is moot if the party lacks a legally cognizable interest in the outcome or
‘if it does not present a real and substantial controversy that is capable of being concluded
through judicial decree of specific relief.’ ” Podsaid v. State Outfitters & Guides Licensing Bd.,
159 Idaho 70, 73, 356 P.3d 363, 366 (2015) (quoting Wade v. Taylor, 156 Idaho 91, 96, 320 P.3d
1250, 1255 (2014)). Here, Woody asks this Court to “vacate the judgment on the pleadings . . .
and remand this matter for further proceeding in the trial court consistent with applicable law
regarding contract formation.” Stafford responds:
Woody has not requested any meaningful relief that the Court can grant. He has
requested “that this Court vacate the judgment on the pleadings.” However, doing
so makes no sense without a request that the Court also undo the voluntary
closing, and the transfers of real estate and disbursements of cash that took place
at the closing. Woody has not requested this relief, which means that a judicial
determination in Woody’s favor “will have no practical effect upon the outcome”
of the case.
We agree. If we were to grant Woody the relief that he requests, it would have no practical effect
upon the outcome of this litigation. If Woody had prevailed in this appeal, in order to effectuate
any practical change in the outcome this Court would have to sua sponte include directions on
remand that the district court nullify any and all transactions that occurred to satisfy the
judgment. Essentially, we would have to remand the case with instructions that the district court
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somehow “put the toothpaste back in the tube.” As a practical matter, we cannot see how this
might occur.
Due to Woody’s failure to seek a stay of the judgment and the inability to unwind the
subsequent transactions, we hold that Woody’s appeal on the issue of contract formation is moot.
However, because Woody has not satisfied the district court’s award of attorney fees, we will
consider that issue.
B. The district court did not err when it awarded Stafford attorney fees under Idaho Code
section 12-120(3).
Idaho Code section 12-120(3) provides:
In any civil action to recover on an open account, account stated, note,
bill, negotiable instrument, guaranty, or contract relating to the purchase or sale of
goods, wares, merchandise, or services and in any commercial transaction unless
otherwise provided by law, the prevailing party shall be allowed a reasonable
attorney's fee to be set by the court, to be taxed and collected as costs.
I.C. § 12-120(3).
On appeal, Woody argues that Stafford was not entitled to attorney fees below under
Idaho Code section 12-120(3) because Stafford was not the prevailing party in the action,
Stafford’s fees were unreasonable, and the gravamen of Stafford’s complaint was not a
commercial transaction.
1. Stafford is the prevailing party.
The district court determined that Stafford was the prevailing party. “In determining
which party to an action is a prevailing party and entitled to costs, the trial court must, in its
sound discretion, consider the final judgment or result of the action in relation to the relief sought
by the respective parties.” I.R.C.P. 54. Stafford received a judgment in his favor granting the
relief requested in his complaint. The district court did not abuse its discretion by determining
that Stafford was the prevailing party.
2. The district court did not abuse its discretion when it determined that Stafford’s
requested attorney fees were reasonable.
Woody argues the district court erred when it determined that Stafford’s fee request was
reasonable. Woody contends that “Stafford’s motion for fees was not premised on the prevailing
market rate for legal services in Idaho Falls. . . . Stafford’s fee petition was based on the
prevailing market rate in Salt Lake City, not Idaho Falls.”
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“The awarding of attorney fees and costs is within the discretion of the trial court and
subject to review for an abuse of discretion.” Smith v. Mitton, 140 Idaho 893, 897, 104 P.3d 367,
371 (2004). In its opinion and order granting Stafford’s motion for attorney fees, the district
court considered this issue and reasoned:
Woody argues the hourly rate sought [by] Stafford for his counsel is not
reasonable. Woody bases his claim on the standard rate in the Idaho Falls
community. Again given the fact that both parties are represented by counsel
outside of Idaho Falls, we do not feel compelled to hold the parties to the local
community standard. Based on the affidavits of Stafford’s counsel, this Court
finds no reason why the rates requested are unreasonable.
Notably, Woody’s attorneys are also from Salt Lake City. In his objection before the
district court and again on appeal, Woody relies on an unpublished opinion from the United
States District Court for the District of Idaho. Monsanto Co. v. PacifiCorp, No. CV 01 607 E
LMB, 2006 WL 1128226 (D. Idaho Apr. 24, 2006). There, the federal magistrate considered a
request for an award of attorney fees for attorneys from St. Louis, Missouri, and found that the
prevailing hourly rate in St. Louis was significantly higher than that of local counsel.
Woody correctly quotes from that decision: “The fee applicant bears the burden of
proving that the billing rates fall within the prevailing market rate in the community in which the
case was tried.” Id. at *6. However, Woody fails to note that the federal court cited Ninth Circuit
authority in support of this statement. The court cited to Gates v. Deukmejian, 987 F.2d 1392(9th Cir.1993), which held that “[r]easonable fees under § 1988 are calculated according to the
prevailing market rates in the relevant legal community.” Id. at 1405. Woody also fails to
mention that Gates did not apply a community-specific standard, but looked to “the rates of
attorneys practicing in the forum district.”
We decline to follow the statement from Monsanto upon which Woody relies.1 “[I]t is
well established that ‘the decisions of lower federal courts are not binding on state courts.’ ”
English v. Taylor, No. 42947, 2016 WL 3853710, at *4 (Idaho July 12, 2016) (quoting Dan
Wiebold Ford, Inc. v. Universal Computer Consulting Holding, Inc., 142 Idaho 235, 240, 127
P.3d 138, 143 (2005)). In deciding this matter, we will apply our own precedent.
1
We note that Woody’s objection before the district court relied on factual findings by the magistrate in Monsanto
as to what a reasonable hourly rate was in support of his claim that Stafford’s attorneys’ hourly rate was “excessive
in light of relevant precedent from Idaho Courts.” It is not a surprise that the district court did not rely on an eight
year old case as establishing what a reasonable hourly rate was.
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In Lettunich v. Lettunich, 141 Idaho 425, 111 P.3d 110 (2005), a case also involving
litigation between brothers (Mike and Ed), we held that “the court should consider the fee rates
generally prevailing in the pertinent geographic area.” Id. at 435, 111 P.3d at 120. When the
Lettunich brothers’ conflict returned to us, it was a dispute over attorney fees. There, Ed, the
brother against whom attorney fees were assessed, argued “that that “pertinent geographic area”
is the Third Judicial District and that it does not include the neighboring Fourth Judicial District
in which Boise is located.” Lettunich v. Lettunich, 145 Idaho 746, 750, 185 P.3d 258, 262 (2008)
(Lettunich II). We rejected that argument:
The bottom line in an award of attorney fees is reasonableness. See, Sun
Valley Potato Growers, Inc. v. Texas Refinery Corp., 139 Idaho 761, 86 P.3d 475(2004) (award of attorney fees vacated where prevailing party did not provide the
trial court with sufficient information from which to determine the reasonableness
of the amount claimed). The pertinent geographic area is the area from which it
would be reasonable to obtain counsel.
Id. at 750–51, 185 P.3d at 262–63. We then stated:
On remand, the district court found that it was reasonable for Mike to
obtain legal counsel from Boise, considering the complexity of this case and the
time and resources that legal counsel would have to be able to devote to it. The
time and resources necessary were due in large part to Ed’s vigorous defense.
During the course of the proceedings, Ed retained the services of six different law
firms, including four located in the Fourth Judicial District—three in Boise and
one in Meridian. The district court did not abuse its discretion in basing its award
of attorney fees on the hourly rates charged by Mike’s Boise counsel.
Id. at 751, 185 P.3d at 263. It is not unreasonable for litigants in Bonneville County to retain
counsel from Salt Lake City. We note that parties appealing from litigation in southeast Idaho are
commonly represented by attorneys from that city. As in Lettunich II, the district court focused
on the bottom line: reasonableness of the requested fees and implicitly determined that it was
reasonable for Stafford to retain counsel from Salt Lake City. We can find no abuse of discretion
in this determination.
3. Idaho Code section 12-120(3) applies because the gravamen of the action was a
commercial transaction.
Woody argues that the gravamen of Stafford’s suit was not a commercial transaction but
a “settlement of an ongoing legal dispute between two brothers.” In its opinion and order
awarding Stafford attorney fees, the district court concluded:
This case arose as an attempt to determine whether a valid contract
existed. This Court found the contract defining Woody’s and Stafford’s share of
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the bid properties did in fact exist. Further, the dispute over the Bid Properties
was a product of the voluntary 2012 Settlement agreement. Because the disputes
between the Bid Properties and 2012 Settlement agreement are based on
commercial transaction, this case falls under I.C. § 12-120(3).
We agree with the district court.
In Garner v. Povey, this Court explained the analysis used to determine whether to award
attorney fees under Idaho Code section 12-120(3):
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. Idaho Code § 12-120(3) allows for an
award of attorney fees to the prevailing party in a civil action to recover “in any
commercial transaction.” A commercial transaction includes all transactions
except those for personal or household purposes. In determining whether attorney
fees should be awarded under I.C. § 12-120(3), the Court has conducted a two-
step analysis: (1) there must be a commercial transaction that is integral to the
claim; and (2) the commercial transaction must be the basis upon which recovery
is sought. The commercial transaction must be an actual basis of the complaint.
The lawsuit and the causes of action must be based on a commercial transaction,
not simply a situation that can be characterized as a commercial transaction. In
other words, the relevant inquiry is whether the commercial transaction
constituted the gravamen of the lawsuit, and was the basis on which a party is
attempting to recover.
151 Idaho 462, 469, 259 P.3d 608, 615 (2011) (internal quotations, citations, and alterations
omitted). Here, Stafford’s complaint alleges: “The Bid Properties Purchase Agreement
constitutes a valid and enforceable contract between Plaintiff and Defendant.” The complaint
continues: “The Division of Staffwood Properties Agreement constitutes a valid and enforceable
contract between Plaintiff and Defendant.” The claimed existence of a contract for a commercial
transaction was clearly the basis of the complaint in this action; therefore, Idaho Code section
12-120(3) was applicable and Stafford was entitled to attorney fees as the prevailing party in the
action.
C. Stafford is entitled to attorney fees on appeal under Idaho Code section 12-120(3).
Stafford requests attorney fees on appeal under Idaho Code sections 12-120(1), and 12-
120(3). Because we determine the issue of contract formation is moot, and because the district
court did not err when it awarded Stafford attorney fees under Idaho Code section 12-120(3),
Stafford is the prevailing party on appeal and is entitled to attorney fees under Idaho Code
section 12-120(3).
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IV. CONCLUSION
We affirm the judgment of the district court, including its award of attorney fees. We
award attorney fees and costs on appeal to Stafford.
Chief Justice J. JONES and Justices EISMANN, BURDICK and W. JONES, CONCUR.
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