INCLUSION, INC., an Idaho corporation; INCLUSION NORTH, INC., an Idaho corporation; and INCLUSION SOUTH, INC., an Idaho corporation, Plaintiffs-Respondents,
IDAHO DEPARTMENT OF HEALTH AND WELFARE, a department of the State of Idaho, and RICHARD ARMSTRONG, in his official capacity as Director of the Idaho Department of Health and Welfare, Defendants-Appellants.
Opinion No. 138
from the District Court of the Fourth Judicial District,
State of Idaho, Ada County. Hon. Richard D. Greenwood,
court award of attorney fees, vacated. IDHW's
requested award is granted.
Lawrence D. Wasden, Idaho Attorney General, Boise, for
appellants. Carl J. Withroe, Deputy Attorney General argued.
Charney & Associates, Eagle, for respondents. Dennis M.
Idaho Department of Health and Welfare (IDHW) appeals the Ada
County district court's award of attorney fees under
Idaho Code section 12-120(3). IDHW contends the district
court abused its discretion by basing the award on the amount
billed by the Attorney General. We agree.
FACTUAL AND PROCEDURAL BACKGROUND
Inc., Inclusion North, Inc., and Inclusion South, Inc.,
(collectively Inclusion) provide residential rehabilitation
support services to Idahoans eligible for Medicaid. In
September 2012, Inclusion filed a complaint against IDHW,
alleging IDHW breached binding Medicaid Provider Agreements
by failing to adequately reimburse Inclusion for its
services. In June 2013, Inclusion amended its complaint with
unjust enrichment and quasi-estoppel claims.
April 2014, the district court granted summary judgment for
IDHW, concluding no triable issue of fact supported
Inclusion's claims. IDHW then moved for attorney fees
under Idaho Code section 12-120(3) and requested $74, 925.00
in fees. IDHW's requested award reflects 599.4 hours of
work billed at a rate $125.00 per hour. Though $125.00 per
hour is not the actual hourly rate billed during litigation,
IDHW contended its requested award was reasonable based on
prevailing hourly rates for comparable legal services in the
local market (Boise).
district court found that IDHW's requested award was
based on a reasonable amount of hours and a reasonable hourly
rate, as determined by the Boise market. As the district
court acknowledged, "the hourly rate requested is
reasonable and certainly well within the rate in the
marketplace in the Fourth District in Ada County, in
particular." Even so, the district court took issue with
how IDHW's requested award was not based on the actual
hourly rate billed during litigation. As the district court
explained, "[e]xcept where the award of attorney fees is
paid to the lawyer, fees awarded to a party should not exceed
the amount the client actually paid for the lawyer." To
that end, the district court multiplied 599.4 hours of work
by $54.00 per hour to award a total
of $30, 857.11. IDHW moved to reconsider, but the district
court upheld the award for $30, 857.11. IDHW timely appealed.
ISSUES ON APPEAL
the district court abuse its discretion when fashioning the
award of reasonable attorney fees under Idaho Code section
the prevailing party entitled to attorney fees on appeal?
STANDARD OF REVIEW
award of attorney fees and costs is within the discretion of
the trial court and subject to an abuse of discretion
standard of review." Smith v. Mitton, 140 Idaho
893, 901, 104 P.3d 367, 375 (2004). To determine whether the
district court abused its discretion, this Court evaluates
whether the district court: (1) correctly perceived the issue
as one of discretion; (2) acted within the outer boundaries
of its discretion and consistently with relevant legal
standards; and (3) ...