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Bald, Fat & Ugly, LLC v. Keane

Supreme Court of Idaho

June 20, 2013

BALD, FAT & UGLY, LLC, Petitioner-Respondent,
v.
RICHARD A. KEANE and LISA C. KEANE, husband and wife; R & L DEVELOPMENTS, LLC, an Idaho limited liability company; and KEANE AND CO. CONSTRUCTION, INC., an Idaho corporation, Respondents-Appellants.

2013 Opinion No. 70

Appeal from the District Court of the Second Judicial District of the State of Idaho, in and for Nez Perce County. The Hon. Jeff M. Brudie, District Judge.

The judgment and order of the district court are reversed.

Jeffrey A. Thomson, Elam & Burke, Boise, argued for appellants.

David R. Risley, Risley Law Office, Lewiston, argued for respondent.

EISMANN, Justice.

This is an appeal from a judgment holding the appellants in contempt for their failure to comply with an order confirming an arbitration award and for an order awarding attorney fees against them in the contempt proceeding. Because the order confirming the arbitration award did not require the appellants to do anything and because contempt cannot be used to enforce payment of the debt in this case, we reverse the judgment of the district court finding them in contempt and the order later entered awarding the respondent attorney fees and court costs.

I.

Factual Background.

Richard A. and Lisa C. Keane; R & L Developments, LLC; and Keane and Co. Construction, Inc., (collectively "the Keanes") and Bald, Fat & Ugly, LLC, ("BFU") had a dispute arising out of a development known as the Houston Professional Plaza located in Lewiston, Idaho. They mediated their dispute, but a disagreement arose regarding the terms of the mediated agreement. They then agreed to submit the matter to arbitration. The arbitrator granted two awards in favor of BFU. In Award No. 1, he awarded BFU the sum of $205, 131.17. In Award No. 2, he determined that the Keanes were to pay the sum of $159, 762.00 jointly to BFU and its attorney, to be held in trust by the attorney for the purpose of paying the cost of the repairs to the exterior of the common area, and that the Keanes were to be refunded any amount by which the cost of the repairs was less than $229, 887.00.[1] The arbitration award did not specify any date by which the Keanes were to pay the money. It also stated, "No interest is awarded in respect to said amount."

On November 20, 2009, BFU filed an application asking the district court to confirm the awards and to enter judgment on them. It then filed an amended application to reflect a payment by the Keanes of $144, 053.26 on December 22, 2009. On May 3, 2010, the district court entered a document entitled, "Order Confirming Arbitration Awards." On September 1, 2010, the court entered an order authorizing the issuance of a writ of execution on the order confirming the awards. The writ was issued and served by the sheriff upon the Keanes, but the sheriff returned the writ not satisfied. It does not appear that the sheriff attempted to levy upon any real or personal property of the Keanes. BFU then obtained an order for a debtor's examination. On April 1, 2011, it filed a partial satisfaction of judgment to reflect the payment of $93, 680.90. The Keanes did not direct how the payments made were to be applied, and so BFU applied them to Arbitration Award No. 1.

On May 4, 2011, BFU filed a motion to have the Keanes held in contempt for failing to pay Arbitration Award No. 2. The supporting affidavit stated that no part of the sums owing under Arbitration Award No. 2 had been paid. BFU also filed a motion for post-judgment attorney fees and costs. On May 26, 2011, the district court heard the motion for post-judgment attorney fees and costs, and it arraigned Mr. Keane on the contempt motion, who entered a denial of the alleged contempt. On June 6, 2011, the court entered an order awarding BFU the sum of $11, 146.40 in post-judgment costs and attorney fees pursuant to Idaho Code section 12-120(5).[2]

The evidentiary hearing on the motion for contempt was held on September 9, 2011. On October 31, 2011, the district court entered its findings of fact, conclusions of law, and order finding that "Richard A. and Lisa C. Keane, Keane and Company Construction, Inc. and R&L Developments, L.L.C. are in contempt of the Court's Order confirming the arbitration awards" because they "have not paid the amount of Award #2, nor have any payments whatsoever been made toward the amount due in Award #2."[3] The court ordered that "Respondent Keane shall pay Award #2 in full and in compliance with the direction of the Arbitrator within thirty (30) days of the signing of the Courts [sic] Finding of Facts, Conclusions of Law, and Order."

On November 30, 2011, the Keanes filed a notice of appeal. By order dated December 14, 2011, this Court remanded the matter for entry of a final judgment because there was no judgment in this case. The district court and BFU apparently believed that the order confirming the arbitration award was a judgment because at BFU's request the court had issued a writ of execution based upon the order, and the court awarded attorney fees under Idaho Code section 12-120(5), ...


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