Appeal from the District Court of the Seventh Judicial District, State of Idaho, Bingham County. Hon. Darren B. Simpson, District Judge.
The opinion of the court was delivered by: Burdick, Chief Justice
District court decision, vacated in part, affirmed in part and remanded.
This case concerns the district court's grant of a motion for voluntary dismissal of a suit filed by Fern Peterson (Fern) against Cecil and Yu Wen Davis, Kevin and Sherri Murray, David Lawrence, and Private Wilderness, LLC (collectively, Private Wilderness). This also resulted in the dismissal of a third-party complaint filed by Private Wilderness against Robert and Nancy Peterson (the Petersons). In resolving the appeal, we address issues raised by Private Wilderness concerning whether the district court erred when it concluded there was no prevailing party when it granted the voluntary dismissal. We also address the Petersons' cross-appeal, in which they argue that the district court erred in denying their motion for reconsideration of their I.R.C.P. 12(b)(6) and 12(c) motion to dismiss on the basis that it was moot, and by not addressing their pending summary judgment motion at the time of dismissal. We vacate in part and remand, upholding the district court's discretion concluding no prevailing party, but find the court erred by denying the motion for reconsideration.
I. FACTUAL AND PROCEDURAL BACKGROUND
In 2005 Fern Peterson agreed to sell a parcel of real property to Cecil and Yu Wen Davis, Kevin and Sherri Murray and David Lawrence. Later, these prospective buyers assigned their interest in the property to Private Wilderness, LLC. Robert and Nancy Peterson own a parcel of real estate that is contiguous to the property purchased by Private Wilderness.
Private Wilderness filed suit (the Easement Case) against the Petersons in June 2006, claiming that it held an easement by implication over their property. The Petersons filed counterclaims for trespass, interference with a prospective economic advantage, and interference with the quiet and peaceful enjoyment of their property.
On December 17, 2007, Fern filed suit (the Mortgage Case) against Private Wilderness seeking to foreclose on Private Wilderness' mortgage and collect the remainder due under a promissory note. Fern claimed that Private Wilderness was in default pursuant to paragraphs 5.3 and 10.6 of the Purchase and Sale Agreement regarding assignment of the agreement and good faith to carry out the purpose of the Agreement, as well as pursuant to paragraphs 5, 17, and 26 of the Mortgage. Private Wilderness filed an answer to the complaint on February 4, 2008. On October 22, 2008, an amended complaint was filed adding a cause of action for injunctive relief seeking to compel Private Wilderness to perform agreed upon obligations. Specifically, Fern sought to compel Private Wilderness to keep the property in good repair, maintain a fish fence pursuant to an agreement with the Idaho Department of Fish and Game and to abate fire risk. Also included in the obligations was an agreement detailed in paragraph 17 of the Mortgage, which prevented transfer of more than ten percent of ownership interest without consent. An answer to the amended complaint was filed on December 11, 2008.
On May 13, 2008, and then on March 20, 2009, the parties to the Easement Case placed stipulations in the record granting Private Wilderness an easement across the Petersons' property. In the first instance, the parties' attorneys stated their agreement on the record, stating that "the current action shall be dismissed with each party to pay their own costs and attorney fees. Each party releases the other from all claims." A judgment was filed in the case in April 2009, with a final judgment filed on June 23, 2009, specifically indicating the "all claims" language: "Each party releases the other from all claims."
Private Wilderness filed a third-party complaint (the Indemnity Case) against the Petersons on June 15, 2009, contending that any breach in the mortgage agreement between Private Wilderness and Fern was a result of the Petersons' intentional interference with Private Wilderness' access and ingress to its property. Included in the Petersons' answer to the third-party complaint was an affirmative defense stating that all claims were barred by the express terms of the parties' stipulation and the judgment entered in the Easement Case. The court allowed the third-party complaint to be joined on August 5, 2009.
On August 11, 2009, the Petersons filed a motion requesting that the trial court dismiss the case and enter a judgment on the pleadings under I.R.C.P. 12(b)(6) and 12(c). The district court denied that motion on November 3, 2009. The Petersons filed a motion for reconsideration of the order denying their motion to dismiss on November 18, 2009. On December 7, 2009, Fern filed a motion for voluntary dismissal of the Mortgage Case pursuant to I.R.C.P. 41(a)(1). On December 9, 2009, the Petersons filed a motion for summary judgment under I.R.C.P. 56(c). On January 5, 2010, the Petersons, having received no response to their motion for summary judgment from Private Wilderness, filed a request for the district court to enter an order granting summary judgment and an award of attorney fees.
The district court heard both the Petersons' motion for reconsideration and Fern's motion for voluntary dismissal on December 21, 2009. On January 11, 2010, the court granted Fern's motion for voluntary dismissal under I.R.C.P. 41(a)(2), dismissed the Indemnity Case, declined to declare any party to be the prevailing party, and ordered that each party pay its own attorney fees and costs. A judgment to this effect was entered on the same day. On February 22, 2010, ...