Idaho Newspaper Foundation v. City of Cascade

788 P.2d 237 (1990) 117 Idaho 422

IDAHO NEWSPAPER FOUNDATION, a nonprofit Idaho corporation; Central Idaho Publications, Inc., an Idaho corporation, doing business as the Central Idaho Star News, Plaintiffs-Appellants,
v.
The CITY OF CASCADE and its Mayor and City Council in their official capacity, Ina Kolsky, Mayor, Terry Ford, Ron Young, Lyman Smalley, and John Cloninger, Council; Cascade School District, and its Board of Trustees in their official capacity, Ann Young, Chairman, Karolyn Plehal, Elting Hasbrouck, Mark Jensen and Colt Herrick, Board Members, Defendants-Respondents, and
Thunder Mountain Publishers, Inc., an Idaho corporation, doing business as the Advocate, a Valley County newspaper, Defendant in Intervention-Respondent.

No. 17657.

Court of Appeals of Idaho.

March 2, 1990.

Allen R. Derr & Associates, Boise, for appellant. Frederick J. Frahm argued.

Robert H. Remaklus, Cascade, for respondent City of Cascade.

Thomas G. Maile IV, Boise, for respondent Thunder Mountain Publishers.

BURNETT, Judge.

In this case we are asked to review a district court's award of attorney fees in a mandamus action. The dispositive issue is whether the award was authorized by I.C. § 12-120(3). For the reasons set forth below, we reverse.

The relevant facts are as follows. The City of Cascade and the Cascade School District are public entities required by law to publish notices of various actions. In 1987 these entities began to publish their legal notices in a newspaper called "The Advocate." This decision prompted the Idaho Newspaper Foundation and a competing newspaper, the "Central Idaho Star News" to file this lawsuit. They asserted that "The Advocate" lacked the minimum circulation and subscriber base prescribed by I.C. § 60-106 for newspapers publishing legal notices. They sought a writ of mandate directing the City and the School District to publish legal notices in a properly qualified newspaper. Upon cross-motions for summary judgment, the district court held that "The Advocate" satisfied the applicable statutory criteria. The application for mandamus relief was therefore denied.

The City and School District then requested awards of attorney fees. The district court declined to make awards under I.C. § 12-121, finding that the suit had not been brought or pursued frivolously, unreasonably or without foundation. However, the court did award fees under I.C. § 12-120(3). This appeal followed, presenting only the attorney fee issue.

Our analysis begins and ends with the language of I.C. § 12-120(3). As amended on July 1, 1986, the statute directs the award of a reasonable attorney fee to the prevailing party "[i]n any civil action to recover on an open account, account stated, note, bill, negotiable instrument, guaranty, or contract related to the purchase or sale of goods, wares, merchandise, or services and in any commercial transaction. ..." (Emphasis added.) Prior or to the 1986 amendment, which added the reference to "any commercial transaction," we stated that attorney fees are recoverable under the statute only in an action brought "to recover on ... [a] contract." Chenery v. Agri-Lines Corp., 106 Idaho 687, 690, 682 P.2d 640, 643 (Ct.App. 1984) (review denied). Here, the City and School District have seized upon the words "any commercial transaction," arguing that there is no longer any requirement that the action be brought "to recover on" a contract. Upon this hypothesis they further argue that I.C. § 12-120(3) now applies to any lawsuit where a commercial relationship exists.

We acknowledge that there is an awkward syntactical gap between the preamendment phrase "to recover on" and the postamendment phrase "and in any commercial transaction." However, we need not decide today whether the City and School District are right in suggesting that this gap signifies a new category of commercial cases covered by the statute regardless of whether suit has been brought "to recover on" a contract. For even if such a hypothesis were true, it would not support a conclusion that the statute extends to all lawsuits where a commercial relationship exists. Under the most expansive view of the statute, a lawsuit still must seek resolution of a dispute arising from a commercial transaction between the parties.

Here, there was no such commercial transaction between the City or School District, on one hand, and the Foundation or the "Star News" on the other, when the suit was filed. Indeed, the purpose of the suit was to compel performance of a perceived public duty in order to create a possibility of future commercial transactions benefitting the "Star News." We think there is a clear distinction between litigation of a dispute arising from a commercial transaction and litigation on non-commercial issues that might have future commercial ramifications.

Moreover, a suit in mandamus rests not upon the existence of a commercial transaction but solely upon the existence of a statutory public duty. See, e.g., Dalton v. Idaho Dairy Products Comm'n, 107 Idaho 6, 9, 684 P.2d 983, 986 (1984). In contrast, I.C. § 12-120(3) has nothing to do with the duties of public officials. It simply adds an attorney fee entitlement to the terms on which two parties enter into certain commercial transactions. See generally Myers v. Vermaas, 114 Idaho 85, 87, 753 P.2d 296, 298 (Ct.App. 1988). Therefore, we conclude that I.C. § 12-120(3) has been applied improperly to this case.

The district court's order awarding attorney fees is reversed. Costs to the appellants. No attorney fees on appeal.

WALTERS, C.J., and WESTON, J. Pro Tem., concur.