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Ferrell v. United Financial Cas. Co.

Supreme Court of Idaho, Pocatello

July 2, 2013

Sam FERRELL and Deva Ferrell, Plaintiffs-Appellants,
v.
UNITED FINANCIAL CASUALTY COMPANY, d.b.a Progressive Insurance Company, whose true name is unknown, Defendant-Respondent.

Page 530

[Copyrighted Material Omitted]

Page 531

Thomsen Stephens Law Offices, PLLC, Idaho Falls, for appellants. Jacob S. Wessel argued.

Lerma Law Office, PA, Boise, for respondent. John J. Lerma argued.

BURDICK, Chief Justice.

This appeal arises from the Bonneville County district court's decisions regarding an uninsured motorist claim between Sam and Deva Ferrell (the Ferrells) and United Financial Casualty Company (United Financial). The parties underwent arbitration, and the Ferrells subsequently filed a petition that sought confirmation of the arbitration award and an award of costs and attorney fees. The district court ordered confirmation of the arbitration award and interest based upon an agreement of the parties. On the issue of attorney fees, the district court found that arbitration began five months prior to the amendment of I.C. § 41-1839 which explicitly allowed attorney fees in arbitration, and therefore the statute as it existed did not provide for attorney fees in this action. We reverse in part and remand to the district court.

I. FACTUAL AND PROCEDURAL BACKGROUND

Sam and Deva Ferrell are brothers who operate a construction business together. On December 22, 2008, the Ferrells were driving to work when their car was struck by an uninsured motorist. At the time of the accident, the Ferrells had an uninsured motorist endorsement in their insurance policy from United Financial.

One year later, the Ferrells sent United Financial a letter alleging a total of $17,000 in lost income from injuries related to the accident. After United Financial tendered $1,717, the Ferrells demanded arbitration pursuant to the insurance policy on January 22, 2010. On November 4, 2010, the parties underwent arbitration, and a panel of three arbitrators awarded the Ferrells a total of $9,134.24 for lost wages. The arbitration award did not address the issues of costs and fees.

The Ferrells filed a Petition for Confirmation of Arbitration Award and Award of Costs and Fees (Petition) on November 16, 2010. The Petition prayed for a judgment confirming the arbitration award, an order declaring the Ferrells as the prevailing party in arbitration, an award of attorney fees and costs, and an award of pre-judgment interest.[1] After filing and subsequently withdrawing a motion to stay the proceedings, United Financial filed an answer to the Petition on February 17, 2011.

The Ferrells filed a motion for attorney fees and costs under I.C. § 41-1839 on March 11, 2011. A hearing on the motion was held on April 6, 2011, and the district court issued a Memorandum Decision and Order Re: Motion for Fees and Costs on April 29, 2011. In its decision, the district court found that because the Ferrells did not file a lawsuit prior to arbitrating their claim, United Financial would not be subject to the mandatory fee provision in the amended I.C. § 41-1839 and a subsequent suit seeking attorney fees is not the type of action contemplated by the statute. Additionally, the district court found that the amendments to I.C. § 41-1839 did not apply retroactively in this case. The district court also found the Ferrells to be the prevailing party and entitled to costs, which was reversed by the district court on reconsideration. In the reversal, the district court held the insurance policy provided that each party will pay their own costs and fees. The Ferrells timely appealed these decisions to this Court.

II. ISSUES ON APPEAL

1. Whether the district court erred in denying the Ferrells an award of attorney fees pursuant to I.C. § 41-1839.
2. Whether the district court erred in denying the Ferrells an award of costs pursuant to I.R.C.P. 54.
3. Whether the Ferrells are entitled to attorney fees and costs on appeal.

Page 532

III. STANDARD OF REVIEW

" When an award of attorney fees depends on the interpretation of a statute, the standard of review for statutory interpretation applies." BECO Const. Co., Inc. v. J-U-B Engineers, Inc.,145 Idaho 719, 726, 184 P.3d 844, 851 (2008) (citing Stout v. Key Training Corp., 144 Idaho 195, 196, 158 P.3d 971, 972 (2007)). This Court exercises " free review over matters of statutory interpretation." KGF Dev., LLC v. City of Ketchum, 149 Idaho 524, 527, 236 P.3d 1284, 1287 (2010) (quoting State v. Doe, 147 Idaho 326, 327, 208 P.3d 730, 731 (2009)). " The interpretation of a statute ‘ must begin with the literal words of the statute; those words must be given their plain, usual, and ordinary meaning; and the statute must be construed as a whole. If the statute is not ambiguous, this Court does not construe it, but simply follows the law as written.’ " Verska v. Saint Alphonsus Reg'l Med. Ctr., 151 Idaho 889, 893, 265 P.3d 502, 506 (2011) (quoting State v. Schwartz, 139 Idaho 360, 362, 79 P.3d 719, 721 (2003)). " A statute is ambiguous where the language is capable of more than one reasonable construction." Porter v. Bd. of Trustees, Preston School Dist. No. 201, 141 Idaho 11, 14, 105 P.3d 671, 674 (2004). " We have consistently held that where ...


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