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Goodwin v. Beckley

United States District Court, D. Idaho

March 26, 2014

DALE GOODWIN; JOHN & NANCY LINDBERG, husband and wife; ANN WALCH; and JOHN DOES 1-15, Plaintiffs,
v.
WAYNE BECKLEY; PAUL BECKLEY; and BALD MOUNTAIN, LP, Defendants.

MEMORANDUM DECISION AND ORDER

B. LYNN WINMILL, Chief District Judge.

INTRODUCTION

Before the Court is plaintiffs' Motion for Attorney Fees. (Dkt. 103). For the reasons explained below, the Court will grant the motion.

BACKGROUND

In 2006, plaintiffs decided to invest money in California real estate. They lent several hundred thousand dollars to defendants. Defendants said the loans would be secured with a second-position deed of trust in real property, but they allegedly failed to grant that security interest. Instead, they allowed other interests to be recorded ahead of plaintiffs'. Defendants later defaulted on the loans, and in November 2009, plaintiffs sued. See Compl., Dkt. 1.

In August 2010, this Court entered a default judgment of nearly $426, 000 against defendants. See Default Judgment, Dkt. 32. The Court awarded plaintiffs approximately $24, 000 in attorneys' fees and costs associated with obtaining that judgment. See Oct. 12, 2010 Decision, Dkt. 38, Nov. 29, 2010 Decision, Dkt. 42. Plaintiffs now seek an additional fee award of around $8, 000. They incurred these fees in connection with their ongoing efforts to collect on the judgment. More specifically, plaintiffs incurred these fees when they attempted to garnish certain funds Beckley received from his employer. Beckley claimed that these funds were exempt as "Social Security or SSI"" and/or "Retirement, Pension or Profit Sharing Benefits." See Claim of Exemption, Dkt. 86, at 1. The Court denied Beckley's claimed exemption. See Aug. 29, 2013 Order, Dkt. 97.

ANALYSIS

1. Entitlement to Attorneys' Fees

Idaho law governs the award of attorney fees in this diversity action. Interform Co. v. Mitchell, 575 F.2d 1270, 1280 (9th Cir. 1978) (applying Idaho law). Plaintiffs request attorney fees under Idaho Code § 12-120(3), as well the attorneys' fees provisions in the promissory notes defendants signed.

The attorneys' fee provisions in the promissory notes are not restricted to fees incurred in obtaining judgment on the note. Rather, these provisions broadly state:

"If any default is made hereunder... Maker further promises to pay all costs of collection when incurred, including but not limited to reasonable attorneys' fees, costs and expenses incurred by Holder hereof in connection with security the payment [sic] of this Note, or any such default in any action or other proceeding brought to enforce any of the provisions of this Note.

Sept. 15, 2006 Note, Ex. B to Compl., Dkt. 1 at 13, § 7; see also Exs. C-E (containing identical provisions).

"Contractual provisions for payment of attorney fees are enforceable in Idaho." Shurtliff v. N.W. Pools, Inc. , 815 P.2d 461, 466 (Idaho Ct. App. 1991). Thus, as the defaulting party on the notes, defendants are bound to pay attorneys' fees plaintiffs have incurred in their ongoing collection efforts.

Additionally, this Court previously held that plaintiffs were entitled to attorneys' fees as prevailing parties on a commercial transaction. See Oct. 12, 2010 Order, Dkt. 38, at 2 ("In this case, the applicable law is Idaho Code § 12-120, which allows a prevailing party to recover fees pursuant to a commercial contract."). If a party is entitled to recover fees as a prevailing party on a commercial transaction under Idaho Code § 12-120(3), then "such party shall also be entitled to ...


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