United States District Court, D. Idaho
ROBERT CAYNE; RONNIE RIVERA; SEAN RIVERA; KEN McELROY; individually and on behalf of all others similarly situated, Plaintiffs,
WASHINGTON TRUST BANK, a Washington corporation; and WEST SPRAGUE AVENUE HOLDINGS, LLC, a Washington limited liability company, Defendants.
MEMORANDUM DECISION AND ORDER RE: DEFENDANTS'
MOTION FOR ATTORNEY FEES AND PETITION FOR COSTS (DKT.
Honorable Ronald E. Bush Chief U.S. Magistrate Judge.
pending before the Court is Defendants' Motion for
Attorney Fees and Petition for Costs (Dkt. 392). This
Decision addresses and decides the issue of whether there is
an entitlement to recover any of such fees and nontaxable
facts of this case are detailed in multiple decisions issued
during the course of the litigation. See, e.g.,
(Dkts. 44, 174, 177, 263, 457.) Recounted briefly here are
pertinent procedural history and substantive facts that bear
upon Defendants' Motion.
were members of the “Club at Black Rock” (the
“Club”), a golf course and residential resort
community located on the shores of Lake Coeur d'Alene,
Idaho. Marketed and designed for people of affluence,
Plaintiffs each paid a large sum of money as a membership
deposit in order to become members of the Club. In doing so,
club members entered into Membership Agreements with the
Club. Those agreements required payment of such membership
deposits but also called for a return of the deposits under
certain conditions, which included termination of membership,
termination of the Membership Plan, and discontinuance of
Club was owned by a legal entity known as the Club at Black
Rock, LLC (the “LLC”). Over time, the LLC
borrowed more than $12 million from Defendant Washington
Trust Bank (“Washington Trust”). The loans making
up that debt were secured by various means, including
security interests in the real and personal property
connected with the Club. When the LLC fell into significant
financial difficulty, the LLC and Washington Trust negotiated
a work-out agreement - an “Agreement for Deed in Lieu
of Foreclosure” (the “DIL”). As part of
that agreement, Washington Trust released the LLC from all
its debts and liabilities in exchange for conveyance of the
real and personal property associated with the Club, and
released the individual primarily responsible for the
development of the Club from any personal liability for the
certified class action lawsuit, Plaintiffs brought claims for
breach of contract, misrepresentation/fraud, a consumer
protection act violation, and sought to recover from
Washington Trust the membership deposits they had paid to the
Club. (Dkt. 1-1). This Court granted in part and denied in
part Defendants' Motion for Judgment on the Pleadings.
(Dkt. 44). Relevant here, the Court ruled that Plaintiffs had
stated a plausible claim for relief for breach of contract;
however, the Court dismissed, without prejudice,
Plaintiffs' claims for misrepresentation/fraud and
violation of the Idaho Consumer Protection Act. See
id. After further motion practice, the Court granted in
part and denied in part both Plaintiffs' and
Defendants' Motions for Summary Judgment. (Dkts. 174,
177). A two-week jury trial followed, resulting in a verdict
in Defendants' favor. Following its rulings on
Plaintiffs' Motion for Judgment as a Matter of Law and
Motion for New Trial (as well as other post-trial motions),
the Court now issues this Decision on whether Defendants are
entitled to recover attorney fees and costs.
Pursuant to Rule 23(h), Defendants are Entitled to Recover
Attorney Fees under Idaho Code § 12-120(3)
a certified class action, the court may award reasonable
attorney's fees and nontaxable costs that are authorized
by law or by the parties' agreement.” Fed.R.Civ.P.
23(h). In diversity actions, federal courts must follow state
law as to attorney fees. See Interform Co. v.
Mitchell, 575 F.2d 1270, 1272 (9th Cir. 1978).
Generally, the law of the forum state is applied to determine
whether a party is entitled to attorney fees. See MRO
Commc'ns, Inc. v. American Tel. & Tel.
Co., 197 F.3d 1276, 1282 (9th Cir. 1999). If the
attorney fee rules of the forum state conflict with the
attorney fee rules of the state which provides the
substantive law for the case, a choice of law analysis is
undertaken. Only when there is a conflict between the law of
the forum and the law of the state that provides the
substantive law for the claim on whether to award
attorney fees, is there a need for a choice of law analysis
(which can include consideration of the non-forum state's
public policy). Those circumstances are not present here. In
this case, Idaho is both the forum state and the state of the
substantive law for the Membership Agreement; hence, a choice
of law analysis is not required.
making this ruling, the Court considered the parties'
arguments as to which state law controls for purpose of
entitlement (or the lack of entitlement) to attorney fees.
Plaintiffs contend that Washington law applies because
Washington law governed the interpretation of the DIL.
Washington law does apply to the DIL, as the Court previously
held. (Dkt. 37). The DIL was a vital document in determining
whether Plaintiffs could proceed with a claim that Defendants
assumed a contractual liability for the refund of the
membership deposits. But, it is the Membership Agreement that
Plaintiffs sued upon and which formed the basis of their
breach of contract claim.
breach of contract claim was the only remaining claim in the
case after the Court's ruling on the Motion for Judgment
on the Pleadings. See (Dkt. 44); (Dkt. 52)
¶¶ 71-81. This claim was tried to the jury.
Accordingly, Washington law does not apply to whether
Defendants are entitled to attorney fees; instead, Idaho law
applies. Idaho is both the forum state and the state
supplying the substantive law and, thereby, the law on
attorney fees. With this in mind, Defendants seek fees under
Idaho Code § 12-120(3), which provides:
In any civil action to recover on an open account, account
stated, note, bill, negotiable instrument, guaranty, or
contract relating to the purchase or sale of good, wares,
merchandise, or services and in any commercial transaction
unless otherwise provided by law, the prevailing party shall
be allowed a reasonable attorney's fee to be set by the
court, to be taxed and collected as costs. The term
“commercial transaction” is defined to mean all
transactions except transactions for personal or household
I.C. § 12-120(3).
frequently-invoked provision of Idaho law covers an array of
business transactions. Among other things, an award of
attorney fees is proper if “the commercial transaction
is integral to the claim, and constitutes the basis upon
which the party is attempting to recover.” Blimka
v. My Web Wholesaler, LLC, 152 P.3d 594, 599 (Idaho
2007) (citing Brower v. E.I. DuPont De Nemours and
Co., 792 P.2d 345, 349 (Idaho 1990)). Further, Idaho
Code § 12-120(3) is triggered if a party alleges the
existence of a contractual relationship of the type embraced
by the statute, even though no liability under a contract is
ultimately established. See Miller v. St. Alphonsus
Reg'l Med. Ctr., 87 P.3d 934, 948 (Idaho 2004).
Likewise, if a party asserts a claim based upon the existence
of an alleged commercial transaction, attorney fees are
awardable to the prevailing party who defends against such
claim even if the alleged commercial transaction is found not
to have existed. See id.
alleged the existence of a contractual relationship between
themselves and Defendants that Defendants later breached.
Plaintiffs' pleadings and the arguments establish this
beyond dispute. According to Plaintiffs, Washington Trust
“contractually bound itself to honor the Membership
Contracts with the Club's members, including assuming the
obligation to refund the membership deposits if any of the
conditions precedent to triggering a refund of the membership
deposits occurred.” (Dkt. 52) ¶ 9. Further,
Plaintiffs alleged that Defendants “breached the
Membership Contracts by failing and refusing to refund