Case Title: McCarthy Corporation v. Stark Investment Group

Citation: 

Docket Number: 47749

State: idaho

Court: Idaho Supreme Court (civil)

Date: 2021-06-24T00:00:00Z

Document:
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IN THE SUPREME COURT OF THE STATE OF IDAHO 
 
Docket No. 47749 
 
MCCARTHY CORPORATION, an Idaho 
corporation, 
 
     Plaintiff-Counterdefendant- 
     Appellant, 
 
v. 
 
STARK INVESTMENT GROUP, LLC, an 
Idaho limited liability company; CRAIG 
STARK, a married man;  
 
     Defendants-Counterclaimants- 
     Respondents, 
 
and 
 
U.S. BANK, N.A., a national association, 
 
     Defendant-Respondent. 
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Boise, May 2021 Term 
 
Opinion filed: June 24, 2021 
 
Melanie Gagnepain, Clerk  
 
Appeal from the District Court of the First Judicial District of the State of Idaho, 
Kootenai County. Richard S. Christensen, District Judge. 
 
The judgment of the district court is affirmed. 
 
Lukins & Annis, PS, Coeur d’Alene, for Appellant. 
 
Ramsden, Marfice, Ealy & De Smet, LLP, Coeur d’Alene, for Respondents. 
 
                     _______________________________________________ 
 
MOELLER, Justice. 
 
 
Craig Stark entered into a contract with McCarthy Corporation to construct a storage 
facility for recreational vehicles and boats. The relationship began amicably but quickly turned 
sour after McCarthy sent Stark an invoice for work Stark believed he had already paid for in full. 
After the parties were unable to resolve their dispute, Stark terminated McCarthy’s contract.  
McCarthy then filed a lien against Stark’s property and brought suit for breach of contract and to 
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foreclose its lien. Stark, Stark Investment Group, and U.S. Bank, Stark’s construction lender on 
the project, counterclaimed for breach of contract, breach of the implied covenant of good faith 
and fair dealing, fraudulent misrepresentation, slander of title by the recording of an unjust lien, 
and breach of the Idaho Consumer Protection Act (“ICPA”).  
After a lengthy bench trial, the district court largely agreed with Stark’s counterclaims 
and dismissed McCarthy’s complaint. On the counterclaims, the district court found: (1) 
McCarthy breached the contract; (2) McCarthy breached the implied covenant of good faith and 
fair dealing through its erroneous billing practices, by not negotiating the billing dispute in good 
faith, and by improperly requesting payment upfront for services; and, (3) McCarthy violated the 
ICPA by engaging in misleading, false, or deceptive practices. The district court awarded 
damages to Stark under the breach of contract counterclaim and the ICPA violation. It also 
awarded Stark his reasonable attorney fees. McCarthy appealed the district court’s findings, 
damages award, and attorney fees award.  
I. FACTUAL AND PROCEDURAL BACKGROUND 
Factual Background 
Craig Stark (“Stark”) was employed at a nuclear power plant in Texas. As he neared 
retirement in the summer of 2017, Stark decided to retire to Idaho. Stark had some experience in 
real estate development, having built six homes, a storage facility in Iowa, and a Recreational 
Vehicle (RV) park in Texas. In March of 2017, Stark purchased approximately twenty-five acres 
in Kootenai County, Idaho. Stark planned to construct an RV and boat storage facility 
(hereinafter “the Project”) to provide him with retirement income. Before Stark purchased the 
property, he met with a civil engineer, Scott McArthur, from h2 Surveying and Engineering 
(“h2”). Stark employed McArthur and h2 to survey the property, prepare a site disturbance plan, 
assist with obtaining a conditional use permit (CUP), and prepare the Project’s plans and 
specifications. Stark also contracted with McCarthy Corporation (“McCarthy”)—a registered 
Idaho contractor relatively new to the excavating business—for the site preparation. McArthur 
introduced Stark to Jason Cheyne, a project manager and heavy equipment operator for 
McCarthy. Cheyne became McCarthy’s project manager on the Project.  
Stark acted as his own general contractor. This created challenges because Stark resided 
in Texas until August of 2017. As a result of the logistical challenges, Stark asked McArthur to 
monitor the Project in his absence. This request resulted in dual responsibilities for McArthur 
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because he was already acting as the quantities engineer with h2 so that McCarthy could prepare 
invoices for payment. Yet, at the same time, McArthur became Stark’s eyes, ears, and sometimes 
voice on the Project.  
The Project was divided into two “phases.”  Phase 1 consisted of preparing the land to 
construct four buildings, an office, fencing, and parking. Phase 2 consisted of constructing five 
additional storage facilities. The contract between Stark and McCarthy contained a typical 
“change order” provision, which required any significant changes in the plans to be approved in 
writing in advance by Stark:  
Change Orders. Contractor agrees to verbal change orders provided the amount 
does not exceed $1000 in value; the change order amount is emailed to the 
Owner; and the Owner accepts the change Order amount by email or writing. The 
parties agree that any change order exceeding $1000 in value shall be signed by 
Owner and delivered to Contractor. 
Prior to entering into the contract, Cheyne dug four test holes on the property for 
McArthur to analyze and determine whether there was sufficient quantity and quality of earthen 
materials on-site to be used for the Project’s site preparation. The test holes would also be used 
to calculate an engineer’s estimated quantities of stripped waste and other materials necessary to 
complete Phase 1 of the Project. Cheyne and McCarthy would also use these calculations to 
prepare McCarthy’s bid on the Project. McCarthy’s bid on the entire Project entailed 35 
individual bid items totaling $413,551.54. Much of the conflict in this case revolves around three 
specific bid items, enumerated as items 3, 14, and 19: 
 
Bid Item # 
Bid Item Description 
Estimated Units Unit Price 
Total Item Price 
3 
Stripped Waste Material 
18,878 cubic 
yds. 
$2.50 
$47,195.69 
4 
Import/Suitable/Structural 
Material (compacted in 
place) 
 
15,602 cubic 
yds. 
 
$4.03 
 
$62,877.67 
19 
4” compacted base rock – 
¾” crushed/angular rock 
(placed and compacted) 
 
2,867 tons 
 
$17.70 
 
$50,571.50 
 
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The Project plans called for McCarthy to first strip the waste material from the property (Bid 
item 3), then replace it with fill material (Bid item 4), and finally, cover part of the area with 4 
inches of compacted base rock and 3/4 inches of crushed angular rock (Bid item 19). Regarding 
Bid item 4, it was anticipated that this would be accomplished by McCarthy taking material from 
an on-site borrow pit to raise the building pad elevations to satisfy the CUP requirements. Bid 
item 19 was intended to serve as the subbase layer for the asphalt.  
The first step of the site preparation called for removing the trees on the property. 
McCarthy subcontracted with Mendenhall Logging to complete this work, which was completed 
by the beginning of April 2017. The next step entailed stripping the future building sites of 
vegetation and topsoil and excavating an on-site borrow pit. The on-site borrow pit would be 
used to mine materials that would, in turn, be used on the property to raise the building and 
parking area elevations to meet the CUP requirements. Cheyne subcontracted this work to a 
Montana excavating company, Basin Industrial Services, Inc., (“Basin”). Basin was not licensed 
in Idaho.  
On May 18, 2017, McCarthy sent Stark Invoice No. 2435 for the work performed on Bid 
items 3 and 4. The invoice totaled $112,725.77, which closely resembled the original bid 
amounts. Stark paid it in full on May 22, 2017.  
During excavation of the on-site borrow pit, Cheyne and Basin came to the conclusion 
that there would not be enough fill material generated from the on-site borrow pit to adequately 
raise the elevations of the building sites and parking areas consistent with the CUP. Cheyne 
started to import material from a nearby, alternative, off-site pit, known as the “Swartout Pit.” 
Cheyne took this course of action because it was the least expensive option for obtaining 
material and it would result in less delay than other options.  
Cheyne claimed he told McArthur as of May 22, 2017, that he decided to use the 
Swartout Pit for more fill material. Cheyne believed McArthur to be in agreement with this 
decision and McArthur had authority from Stark. McArthur asserted otherwise. McArthur 
testified at trial that he did not agree to, nor did he have knowledge that Cheyne was going to use 
the Swartout Pit for more fill material. McArthur’s understanding was that there was enough 
material at the on-site borrow pit to complete Phase 1 of the Project, i.e., bring the initial 
building pad elevations up to CUP requirements. McArthur understood Cheyne’s concerns about 
lack of material at the on-site borrow pit as referring to Phase 2 of the Project. McArthur further 
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testified that he had no knowledge that Cheyne used the Swartout Pit for material until after the 
fact. Stark was not informed that Cheyne was importing material from the Swartout Pit.  
On July 13, 2017, Stark received Invoice No. 2481, which entailed Bid items 19, 25, 30, 
and 32. Bid item 19 closely resembled McCarthy’s original bid: 4 inches of compacted base rock 
and ¾ inches of crushed angular rock, placed and compacted. McCarthy charged Bid Item 19 as 
2,867 tons at $17.70206 per ton, for a total item cost of $50,751.80. Five days later, on July 18, 
2017, Stark paid Invoice 2481 in full.  
Despite Stark and McArthur not agreeing to import additional fill material from the 
Swartout Pit, McArthur provided calculations for the volume of earthen material removed from 
the site, the amount of material the on-site borrow pit provided, and for the volume of material 
imported from the Swartout Pit. He provided these calculations to McCarthy on July 21, 2017. 
McArthur calculated that McCarthy stripped 21,475 cubic yards of material from the property, 
the on-site borrow pit provided 13,353 cubic yards of fill material, and McCarthy imported 3,584 
cubic yards of material from the Swartout Pit. McArthur used a 12% material loss calculation 
due to compaction for both the on-site fill material and the imported fill material. When 
McArthur explained these calculations to McCarthy in an email, McArthur noted that the 3,584 
cubic yards of imported material from the Swartout Pit was the number provided by McCarthy. 
The calculations revealed the Project used a total of 16,937 cubic yards of fill material.  
McCarthy then used McArthur’s calculations to generate Invoice No. 2488, which totaled 
$158,980.00. Stark received Invoice 2488 on July 25, 2017. The invoice included a single line 
item for 3,584 tons of “4 [inch] compacted base rock (concrete slab)—¾ [inch] crushed/angular 
rock” at a unit rate of $30.00 for a total cost of $107,520.00. This line item charge concerned 
Stark. He questioned this amount with Robert McCarthy (hereinafter individually “Robert”), 
president of McCarthy, as Stark had already paid $65,530.08 for 15,602 cubic yards of import 
material compacted in place (Bid Item 4) through Invoice No. 2435 and $50,751.80 for 2,867 
tons of 4 inch compacted base rock and ¾ inch crushed angular rock (Bid Item 19) through 
Invoice No. 2481. The new charge seemed identical to Bid item 19, which Stark had already paid 
in full. Moreover, the unit price was higher than either Bid item 4 or 19 in the original contract.  
Stark did not pay Invoice 2488. Stark testified that when he confronted Robert about 
Invoice 2488, Robert responded by stating, “just pay it now and we’ll figure it out later.” Stark 
explained that he did not pay Invoice 2488, because he was required by his lender, U.S. Bank, to 
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only submit accurate invoices for payment. As the district court noted, this “discrepancy in 
billing became the irritation that became the boil that infected the parties’ heretofore positive 
relationship.” McCarthy now concedes Invoice 2488 contained errors.  
On August 22, 2017, McCarthy sent Stark Invoice No. 2504, totaling $121,620.55. This 
invoice included a charge for 6,451.2 tons of “import converted to tons” at a unit rate of $9.00 
for a total amount of $58,060.80. At this time, McCarthy also informed Stark that the paving 
company McCarthy hired as a subcontractor required half of the paving cost—$99,000—upfront, 
and Stark needed to pay McCarthy for this. The following day, Robert provided Stark with 
another invoice but renumbered it as “Invoice 2488,” in the increased amount of $238,986.98. 
This invoice included a similar “import converted to tons” charge, but also included a “to be 
completed” charge of $99,000 for the paving company’s upfront fee.  
After receiving the increased invoice, the notice to pay the paving costs upfront, and the 
parties’ failure to resolve the billing discrepancies, Stark’s counsel sent McCarthy a termination 
letter on August 25, 2017. The letter reasoned that Stark was terminating the contract for 
McCarthy’s material breach of the contract, but the letter did not set forth the nature of the 
material breach. Despite the termination, McCarthy continued to send Stark revised versions of 
Invoice 2488. On September 1, 2017, Stark received an invoice for $162,087.56. This invoice 
included a slight increase for “import converted to tons” in the amount of $58,060.80 and a not-
before-seen, one line item charge for “6,554.95” cubic yards of “additional borrow” at a unit 
price of $4.03 per cubic yard for a total of $26,416.45. On September 11, 2017, Stark received a 
subsequent invoice in the lesser amount of $145,706.56. It included a slightly lesser charge for 
“import converted to tons” at $55,000 but the same “additional borrow” charge of $26,416.45.  
On September 22, 2017, Stark sent McCarthy a payment of $49,399.99 with the 
condition that McCarthy execute an unconditional lien release for all labor, material, and 
services rendered through September 22, 2017. Stark also included a detailed letter that 
explained why he believed he owed McCarthy only $49,399.99 from the latest invoice of 
$145,706.56. Stark agreed to pay McCarthy for the additional 3,200 cubic yards of fill material it 
imported from the Swartout Pit, at the contract rate used for other fill material. McCarthy 
rejected the payment and conditions. On this same day, McCarthy filed a Claim of Lien on 
Stark’s property for $145,706.56 with the Kootenai County Recorder as Instrument No. 
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2612854000. On October 5, 2017, Stark sent McCarthy an identical payment of $49,399.99, but 
without conditions. McCarthy accepted the payment.  
On October 23, 2017, Stark received another invoice in the increased amount of 
$176,691.71. The “import converted to tons” charge increased from 6,451.2 tons to 8,780.4 tons 
with an increased unit rate of $10.95 per ton for a total charge of $96,145.38. The amount of 
“additional borrow” in this invoice increased from 6,554.95 cubic yards to 17,612 cubic yards 
for a total charge of $70,976.36. This invoice was practically identical to the last invoice, except 
for the increase in “import converted to tons” and “additional borrow.” The total invoice 
calculated at $226,031.70 but stated the amount due was $176,691.71; presumably because it 
applied Stark’s final $49,399.99 payment generally instead of specifically to certain line items, 
as stated in Stark’s letter. McCarthy had not performed any additional work or provided any 
additional materials since its termination on August 25, 2017. Stark did not make another 
payment.  
After the dispute began between Stark and McCarthy, Robert took over direction of the 
subsequent invoices, including the multiple renditions of Invoice 2488 and Invoice 2504. The 
following is a summary of the invoices McCarthy sent to Stark:  
Invoice Number 
Invoice Date/Date Received 
Invoice Amount 
2488 
07/25/2017 
$158,980.00 
2504 
08/22/2017 
$121,620.55 
2488 
08/23/2017 
$238,986.98 
2488 
09/01/2017 
$162,087.56 
2488 
09/11/2017 
$145,706.56 
2488 
10/23/2017 
$176,691.71 
 
To complete the Project, Stark contracted with Waldo Construction, Inc., and other 
subcontractors. Due to McCarthy’s lien on the property, Stark was required by U.S. Bank to 
extend his construction loan at least three times.  
Procedural History 
McCarthy brought suit against Stark, Stark Investment Group, LLC, and U.S. Bank, 
seeking to (1) foreclose the lien it placed against Stark’s property and (2) seek damages for 
breach of contract. McCarthy also requested attorney fees pursuant to Idaho Code section 12-
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120(3). Stark answered McCarthy’s complaint and counterclaimed for breach of contract, breach 
of the implied covenant of good faith and fair dealing, fraudulent misrepresentation, slander of 
title and recordation of unjust lien claim, and breach of the Idaho Consumer Protection Act 
(ICPA). Stark requested attorney fees under Idaho Code section 12-120(3), and under Idaho 
Code section 48-608(1) of the ICPA. Before trial, Stark voluntarily dismissed his counterclaim 
for fraudulent misrepresentation. The case proceeded to a seven-day bench trial.  
Following trial, the district court determined that McCarthy (1) breached the contract by 
failing to obtain a written and signed change order for importing materials from the Swartout Pit, 
and (2) breached the covenant of good faith and fair dealing through McCarthy’s billing 
practices and demand for the paving costs upfront. The district court found that McCarthy failed 
to present a written change order at trial and that McCarthy did not meet its burden to show that 
McArthur had knowledge of the use of materials from the Swartout Pit so that he could waive 
the change order provision. “The only fact that is clear to the [district] [c]ourt is that there was no 
change order approved, or even requested, as to the import and use of the materials from the 
Swartout Pit.” Furthermore, the district court determined that McCarthy breached the implied 
covenant of good faith and fair dealing in three ways: (1) over-billing through its multiple 
invoices; (2) Robert’s “cavalier” comment to Stark to “just pay the invoice and work it out later”; 
and (3) McCarthy’s demand for payment for paving services upfront when the work had not 
started, the paving contractor did not require payment upfront, and the contract only required 
payment for services actually performed.  
The district court granted some of the breach of contract damages requested by Stark. 
The district court found that Stark had met his burden by showing that completion of the Project 
cost an additional $202,090.81. By terminating McCarthy’s employment, Stark avoided paying 
$150,329.98 to McCarthy to complete the Project. Therefore, the district court concluded that 
because the Project was completed at an additional $51,760.83, Stark was entitled to a judgment 
in that amount.  
Next, the district court addressed McCarthy’s claim to foreclose its lien on Stark’s 
property. The district court noted that “the lien claimant bears the burden of presenting 
substantial and competent evidence that the claimed labor and materials which are the subject of 
the lien were actually incorporated into the land which is subjected to the lien.” The district court 
concluded that McCarthy did not meet this burden by (1) failing to reconcile Invoice 2488 or the 
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four subsequent revised invoices, (2) not supporting or explaining the original lien amount, and 
(3) failing to account for the increased amended lien amount after Stark made a payment of 
almost $50,000. Although the much of the trial testimony was in conflict, the district court 
stated: “When comparing the testimony of Stark to the testimony of Rob McCarthy, the [district 
court] finds the former to be more credible and convincing than the latter.” Accordingly, the 
district court ordered McCarthy’s amended lien be “removed.”  
Turning to Stark’s remaining counterclaims, the district court denied Stark’s 
counterclaim for slander of title. The district court concluded that Stark’s action for slander of 
title could only succeed if Stark proved that McCarthy had no basis for the entire amount of its 
lien claim; it was not enough to show the lien claim was partially inaccurate. Although Stark was 
successful in defending against McCarthy’s lien claim, he did not show the entire amount of the 
lien claims were filed in bad faith and with a reckless disregard for the truth. The district court 
concluded that Stark essentially needed to show the lien claim was done with malice as to the 
entire amount. The district court noted that McCarthy was new to site-preparation work and had 
never handled anything similar to this Project. “Although it may have been irresponsible for 
McCarthy to take on the Stark project, its poor decision making; its failure to provide proper 
invoices; and its customer neglect do not automatically translate into ‘malice’ for the entire sum 
set forth in the claims of lien.” (Emphasis in original).  
 
Finally, the district court addressed Stark’s counterclaim that McCarthy violated the 
ICPA under Idaho Code section 48-603(17) The ICPA prohibits unfair methods and practices, 
including “engaging in any act or practice which is otherwise misleading, false, or deceptive to 
the consumer.” I.C. § 48-603(17). Stark alleged McCarthy’s false invoices, dishonest demand for 
money upfront for paving work, and “bullying” of McArthur fall within the prohibited conduct 
of the statute. The district court agreed with Stark only on the first two allegations.  
As was shown by the numerous Invoice(s) No. 2488, McCarthy was billing for 
items it didn’t properly quantify and was attempting by the same course of action 
to bill for what Stark had already paid for. Compounding the deceit was Rob 
McCarthy’s response and attitude of “just pay the bill and we’ll work it out later,” 
when confronted by Stark about the overbilling. 
Regarding McCarthy’s request to Stark to pay for the paving work upfront, McCarthy threatened 
to hold up the Project unless Invoice 2488 was paid. Stark refused to pay Invoice 2488 because 
of legitimate concerns that went unaddressed by McCarthy. Instead, McCarthy then concocted a 
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rouse that the paving company was requiring 50% upfront costs for the asphalt and that Stark 
needed to pay for that. However, at trial, McCarthy presented no independent or corroborating 
evidence that the asphalt company asked for a 50% down payment. The district court found 
McCarthy’s actions to be a misleading or deceptive act, likely to entice Stark to pay McCarthy 
more money.  
 
The ICPA allows a person to recover ascertainable losses as damages due to an unlawful 
practice. I.C. § 48-608(1). Here, the district court reasoned that McCarthy’s unfair billing 
practices led to Stark’s ascertainable losses. The wrongful billing by McCarthy, and its 
unwillingness to correct it, coupled with the misleading directive to Stark to pay for the paving 
services upfront, led to Stark’s termination of McCarthy. The district court found that with the 
billing issues unresolved, McCarthy placed a lien on Stark’s property and filed a lien foreclosure 
suit against Stark and U.S. Bank. McCarthy’s action required Stark to defend U.S. Bank in this 
matter, which caused it to incur additional construction loan costs, and additional inspection fees. 
Furthermore, due to McCarthy’s lien, U.S. Bank required Stark to place $265,037.55 as 
collateral, into a non-interest bearing account with U.S. Bank from November 10, 2017, through 
trial.  
At trial, Stark presented evidence that the costs to indemnify and defend U.S. Bank were 
$4,646.70. The additional construction loan costs were $2,050.00 and the two inspection fees 
totaled $900.00. Gavin Mobraten, a banker at U.S. Bank, testified at trial that the requirement of 
Stark to deposit money into a collateral non-interest account, the indemnity and defense costs, 
extra loan costs, and inspection fees could have been avoided but for McCarthy’s lien. Mobraten 
also testified that if Stark had put $265,000.00 into an investment account in 2017, instead of the 
non-interest account required by U.S. Bank, he could have reasonably expected an interest return 
rate of 5-7%. The district court accepted Stark’s evidence on the defense and indemnification 
costs, the extra construction loan costs, and the inspection fees as ascertainable damages under 
the ICPA. The district court also found Mobraten’s testimony persuasive but used the lower 5% 
return to calculate Stark’s missed interest opportunity because of the collateral non-interest 
account requirement. The district court calculated that Stark missed the opportunity to earn 
$26,503.76 in interest because of McCarthy’s lien. Therefore, the district court awarded Stark a 
total of $34,100.46 in damages under the ICPA.  
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Stark timely requested attorney fees. McCarthy opposed his request. Initially, the district 
court denied Stark’s request in part because it requested attorney fees on work performed on 
behalf of U.S. Bank and Stark Investment Group, LLC. The district court reasoned that there was 
no contract or commercial transaction between McCarthy and U.S. Bank or Stark Investment 
Group, LLC. Therefore, the district court allowed Stark to resubmit a cost bill for just Stark’s 
attorney fees and costs.  
Stark timely filed an amended memorandum of costs and attorney fees. The district court 
then awarded attorney fees under Idaho Code section 12-120(3) and Idaho Code section 48-
608(5). First, the district court determined Stark was entitled to attorney fees under Idaho Code 
section 12-120(3) because the case was a civil action to recover on a contract relating to the 
purchase or sale of goods and professional services. The contract was a commercial transaction 
not for household or personal purposes. Stark was also entitled to attorney fees under the ICPA 
because of his successful counterclaim. The district court awarded Stark $129,434.00 in attorney 
fees and $4,535.33 in costs.  
McCarthy timely filed a notice of appeal, assigning error to the district court as follows: 
(1) its conclusion that McCarthy failed to demonstrate it is owed any money by Stark to 
foreclose its lien; (2) its finding that McCarthy breached the parties’ contract; (3) its finding that 
McCarthy violated the ICPA; (4) its decision to award Stark damages under the ICPA; and, (5) 
its decision to award Stark attorney fees.  
II. STANDARD OF REVIEW 
The applicable standard of review regarding a trial court’s factual findings and legal 
conclusions after a bench trial was explained in Caldwell Land and Cattle, LLC v. Johnson 
Thermal Systems, Inc.:  
Review of a trial court’s conclusions following a bench trial is limited to 
ascertaining whether the evidence supports the findings of fact, and whether the 
findings of fact support the conclusions of law. Borah v. McCandles, 147 Idaho 
73, 77, 205 P.3d 1209, 1213 (2009) (citing Benninger v. Derifield, 142 Idaho 486, 
488-89, 129 P.3d 1235, 1237-38 (2006)). This Court will not set aside a trial 
court’s findings of fact unless the findings are clearly erroneous. Id. Clear error 
will not be deemed to exist if the findings are supported by substantial and 
competent, though conflicting, evidence. Mortensen v. Berian, 163 Idaho 47, 50, 
408 P.3d 45, 48 (2017) (quoting Pandrea v. Barrett, 160 Idaho 165, 171, 369 P.3d 
943, 949 (2016)). Substantial and competent evidence exists [i]f there is evidence 
in the record that a reasonable trier of fact could accept and rely upon in making 
the factual finding challenged on appeal. . . . Id.  
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165 Idaho 787, 795, 452 P.3d 809, 817 (2019) (internal quotations omitted).  
“ ‘An award of attorney fees and costs is within the discretion of the trial court and 
subject to an abuse of discretion standard of review.’ ” Nye v. Katsilometes, 165 Idaho 455, 459, 
447 P.3d 903 907 (2019) (quoting Ballard v. Kerr, 160 Idaho 674, 716, 378 P.3d 464, 506 
(2016)). When this Court reviews a trial court’s discretionary decision, it applies a four-prong 
test to determine whether there was an abuse of discretion: whether the trial court “(1) correctly 
perceived the issue as one of discretion; (2) acted within the outer boundaries of its discretion; 
(3) acted consistently with the legal standards applicable to the specific choice available to it; 
and (4) reached its decision by the exercise of reason.” Lunneborg v. My Fun Life, 163 Idaho 
856, 867, 421 P.3d 187, 198 (2018). 
III. ANALYSIS 
A. The district court’s finding that McCarthy failed to establish that it was owed money by 
Stark for labor, materials, and services on the Project is supported by substantial and 
competent evidence.  
McCarthy asserts that it is owed $105,715.351—$96,145.38 for import material and 
$9,570.00 for six specific items: (1) $500 for storm pipes; (2) $4,750.00 for dry utility trenching; 
(3) $2,500 for the final mobilization payment; (4) $1,000 for compaction testing; (5) $330 for 
compacted base rock; and, (6) $500 for a septic permit and test holes. McCarthy contends that 
the district court erred by concluding that McCarthy failed to show it was owed money by Stark 
for labor, materials, and services performed in order to foreclose its lien. We affirm the district 
court’s finding that McCarthy failed to meet its burden. 
“ ‘The right of a materialman to assert a lien against a structure for which materials have 
been furnished is a right granted and therefore determined by statute.’ In Idaho, the right exists in 
I.C. §§ 45-501 and 505.” Sims v. ACI Northwest, Inc., 157 Idaho 906, 342 P.3d 618, 621 (2014) 
(quoting BMC W. Corp. v. Horkley, 144 Idaho 890, 893, 174 P.3d 399, 402 (2007)). The purpose 
of the lien statute is to “compensate persons who perform labor upon or furnish materials to be 
used in the construction alteration or repair of a building or structure.” Pierson v. Sewell, 97 
Idaho 38, 41, 539 P.2d 590, 593 (1975). A lien claimant bears the burden to present substantial 
and competent evidence that “the labor or materials were incorporated into the land or building 
                                                 
1 At trial, McCarthy partially abandoned its lien claim in the amount of $70,750.35—the “additional borrow” charge 
in McCarthy’s latest invoice, leaving a requested amount of $105,750.35.  
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that is the subject of the claim.” Elec. Wholesale Supply Co. v. Neilson, 136 Idaho 814, 821-22, 
41 P.3d 242, 249-50 (2001).  
First, McCarthy claims that it is owed $96,145.38 for import material it hauled to the 
Project from the Swartout Pit, as noted in Exhibit W.2 In its briefing, McCarthy maintains that it 
presented substantial and competent evidence that it was owed money for the imported material. 
It directs this Court to evidence in the record—but the evidentiary support it provided fails to 
meet that burden. McCarthy cited to exhibits W, 111, 113, 121, and 124. Exhibit W is 
McCarthy’s final invoice to Stark; Exhibit 111 is Stark’s detailed letter to McCarthy explaining 
specifically how much he owes McCarthy; Exhibit 113 is McCarthy’s first lien recorded on 
Stark’s property; Exhibit 121 is a map for “dry utility trenching” that contains some “borrow fill” 
numbers; and, Exhibit 124 does not exist in the record. Looking at Exhibit W, the ninth row 
down reads “import converted to tons” at 8,780.4 tons. Robert testified that he and Cheyne 
calculated that amount by counting the number of truckloads from the Swartout Pit to the Project 
site (271) multiplied by the number of tons of material per truckload (18) multiplied by a 1.8 tons 
per cubic yard conversion factor to reach the final number (271 x 18 x 1.8 = 8,780.4). Robert 
testified the hauling rate was $10.95 per ton, which resulted in the charge of $96,145.38 for the 
import material from the Swartout Pit (8,780.4 x $10.95 = $96,145.38). Although a ticket or 
invoice has been provided for each truckload, they were not admitted as evidence into the record. 
The additional alleged support McCarthy cites from the record does not pertain to any of the 
other items it claims it is owed. As the district court found, McCarthy was similarly unclear on 
demonstrating what it was owed below: 
Throughout his testimony Rob McCarthy did less to clarify what was owed and 
why, and more to confound the issue for the trier of fact. When comparing the 
testimony of Stark to the testimony of Rob McCarthy, the [district court] finds the 
former to be more credible and convincing than the latter. This is especially so 
when considering Stark’s testimony as to the line by line items in Exhibit T and 
T-1. Therefore, the [district court] finds that McCarthy has not met its burden of 
proof of presenting substantial and competent evidence that it was owed any 
further sums by Stark.  
On the other hand, the district court’s finding that Stark demonstrated it paid for everything it 
owed is supported by the record. For example, Stark points to Exhibit 111, which is a detailed 
                                                 
2 It is worth noting that this was a constantly moving target: at one time McCarthy billed Stark $55,000.67 for 
imported material on August 23, 2017. This figure changed to $58,060.80 on September 1, 2017. It changed again to 
a flat $55,000 with the following invoice on September 11, 2017. On McCarthy’s final invoice, it billed Stark 
$96,145.38 for import material.  
14 
 
letter he caused to be sent to McCarthy that explained exactly how much Stark owed McCarthy 
and why. Stark explained the factual basis for this letter in detail during his trial testimony.  
McArthur calculated the earthen material removed from the property to total 21,475 
cubic yards based on a topographic survey. McArthur also calculated that the on-site borrow 
provided 13,353 cubic yards of fill material, taking into consideration a 12% material loss due to 
compaction. Finally, even though it was not approved, McArthur factored in Cheyne’s report of 
3,584 cubic yards of material imported from the Swartout Pit, also taking into consideration a 
12% material loss due to compaction. McArthur added the on-site borrow number (13,353 cubic 
yards) and the imported material number (3,584 cubic yards) to arrive at a total of 16,937 cubic 
yards of fill material.  
Due to continuing conflict between McCarthy and Stark, with Stark’s permission Basin 
hired a surveyor to survey the property to determine fill material amount used. Basin conducted 
the survey three months after it completed its work and provided the results. The survey showed 
that 20,037 cubic yards of material had been placed to fill the area for building pads, using a 1.2 
percent fill compaction factor. Taking out the fill factor, the surveyor arrived at 16,697 cubic 
yards of fill material. 
Even though Stark already paid for 15,602 cubic yards of fill material through Invoice 
2435, Stark paid McCarthy for the additional 3,200 cubic yards of fill material it imported from 
the Swartout Pit at the contracted rate. McArthur’s calculations and Basin’s surveyor’s 
calculations arrive at a similar number, showing McCarthy imported 3,200 cubic yards of import 
material, using the contract rate for fill material of $4.03 per cubic yard. Therefore, Stark agreed 
to pay an additional $12,896.00 for the imported fill material, as part of its final payment of 
$49,399.99. This means that Stark paid McCarthy for 18,802 cubic yards of fill material even 
though two surveys showed less than 17,000 cubic yards of fill material was used.  
Furthermore, Stark went through each of the six specific items McCarthy claims it is still 
owed. First, McCarthy does not explain where it billed Stark $500.00 for 6” SDR storm pipe. 
However, on exhibit V line item 5, McCarthy billed Stark $500.00 for work performed under 
“piping/drainage.” This item was not disputed by Stark and covered by his final payment of 
$49,339.99. Second, Stark demonstrated that it does not owe McCarthy $4,740 for dry utility 
trenching because it had already paid for that on Invoice 2481. Indeed, Invoice 2481 shows Stark 
paid $3,900 for “dry utility trenching.” Third, Stark explained that it did not pay McCarthy the 
15 
 
final mobilization payment because McCarthy was terminated before the job was finished. The 
mobilization bid item was intended to defray the initial start-up and overhead costs associated 
with moving materials and equipment to the job site. The contract between Stark and McCarthy 
stated that Stark would pay $5,000 down, $2,500 at 50% Project completion, and the final $2,500 
at 100% Project completion. Because the job was not completed, Stark did not pay the final 
$2,500 mobilization payment. In its post-trial brief, McCarthy alleged that it was owed the final 
$2,500 payment for mobilization because McCarthy “had fully mobilized on the project site and 
thus fully earned this fee.” However, it is clear the Project was not completed, as Stark had to 
hire Waldo Construction, Inc., to finish the Project.  
Next, Stark explained that he did not owe McCarthy an additional $1,000 for compaction 
testing because compaction testing was only two-thirds complete. Therefore, because Stark had 
already paid McCarthy $2,000 for compaction testing, he owed nothing further. Finally, Stark 
asserted that Cheyne and McCarthy represented that they would not charge for septic test holes. 
Because no change order was submitted, Stark only paid for the septic permit fee of $500 and not 
the test holes charge of $1,000.  
In sum, we find that the record supports the district court’s conclusion that McCarthy fell 
short of its burden to demonstrate it was owed any money by Stark. On the other hand, Stark 
demonstrated that it did not owe McCarthy any money because in its final $49,399.99 payment 
to McCarthy, Stark paid for all fill material, including fill material from the Swartout Pit, storm 
pipes, the appropriate mobilization and compaction testing amount, and for the septic permit fee. 
Stark also showed that he had already paid McCarthy for trenching and, thus, owed it nothing 
further. Therefore, we affirm the district court’s conclusion that McCarthy failed to meet its 
burden that it was owed any monies. Accordingly, we also affirm its decision not to foreclose 
McCarthy’s lien on Stark’s property.  
B. Substantial and competent evidence supports the district court’s finding that McCarthy 
breached the parties’ contract by not obtaining a change order for the additional fill.  
McCarthy contends the district court erred by finding that McCarthy breached the parties’ 
agreement by failing to obtain a change order for the additional fill. To sustain a cause of action 
for breach of contract, one must show: (1) “the existence of the contract,” (2) “the breach of the 
contract,” (3) “the breach caused damages,” and, (4) “the amount of those damages.” Mossell 
Equities, LLC v. Berryhill & Co., 154 Idaho 269, 278, 297 P.3d 232, 241 (2013). McCarthy only 
contends it did not breach the contract, it does not contest the other elements of a breach of 
16 
 
contract claim: that there was a contract, Stark’s calculation of damages, or the amount of the 
district court’s awarded damages. McCarthy argues that Stark waived the change order provision 
in the contract personally and through his agent McArthur so that McCarthy did not need a 
written change order to import fill material from the Swartout Pit.  
We begin by recognizing the well-known legal standard for modifying a written contract: 
The rule is well recognized that the provision in a private building or construction 
contract that alterations or extras must be ordered in writing can be avoided by the 
parties to the contract where their words, acts or conduct amount to a waiver, 
modification, rescission or abandonment of that provision or where the owner by 
his acts or conduct is estopped to rely on it.  
Obray v. Mitchell 98 Idaho 533, 536, 567 P.2d 1284, 1287 (1977) (quoting Harrington v. 
McCarthy, 91 Idaho 307, 310, 420 P.3d 790, 793 (1966)). “[E]xpress terms of written contracts 
may be later modified by terms implied in fact through the conduct of the parties.” Jones v. 
Micron Tech., Inc., 129 Idaho 241, 245, 923 P.2d 486, 490 (Ct. App. 1996) (citing Harrington, 
91 Idaho at 310, 420 P.3d at 793).  
The evidence presented at trial was conflicting. McCarthy presented evidence that on 
May 19, 2017, Cheyne called McArthur to inform him they were running out of material at the 
on-site borrow pit. McArthur did not answer the phone so Cheyne immediately sent a text 
message. Cheyne’s text message read, “We are running way over the 15,000 yards at Starks … 
There isn’t close to enough borrow to fill the other end.” (Emphasis added). McArthur then 
called Cheyne. Cheyne and McArthur discussed possible solutions to the problem: Cheyne 
suggested (1) lowering the building pad elevations, (2) taking material from another on-site 
borrow pit, or (3) importing material. McArthur told Cheyne that he would get back to him with 
an answer after he discussed the situation with Stark. McArthur noted that lowering the building 
elevations was not an option because it would violate the CUP. Also, McArthur was reluctant to 
open a second on-site borrow pit.  Cheyne testified that “[w]e ended the conversation with [sic] 
he would get back to me, but it sounded like importing material was the best option.”  
Stark testified that the next day McArthur sent Cheyne a text message, “From Craig: 10-4 
was hoping we may miss the rain. As long as there is enough phase-2 rock area to give us a good 
layout for steel delivery we should be fine.” Then, on May 22, 2017, Cheyne sent Stark a text 
message that read, “We should be mass graded by Thursday importing rock on Friday ready for 
electricians by Friday of next week.” (Emphasis added). Cheyne also sent a text message that 
17 
 
stated he was eager to start “hauling material.” Cheyne sent an email to Stark and McArthur on 
June 1, 2017, that stated “we will import material threw [sic] the weekend. . . .” (Emphasis 
added). McCarthy argues that this evidence shows Stark and McArthur knew Cheyne’s plan was 
to import material from the Swartout Pit, Stark agreed to it, and, if not, his agent McArthur 
agreed to it. In the alternative, McCarthy suggests Stark and McArthur should have known from 
Cheyne’s text messages and email that McCarthy was importing material and neither raised any 
objection with Cheyne.  
 
On the other hand, McArthur testified that he, Stark, and Cheyne initially estimated there 
was enough material at the on-site borrow pit to satisfy phase 1 and phase 2 of the Project. Stark 
testified that he believed Cheyne’s text messages about “importing material” to be in reference to 
hauling in 3/4 inch crushed angular rock (Bid item 19). McArthur believed Cheyne’s notification 
that there was not enough fill for “the other end” was in reference to phase 2 of the Project. 
Consistent with this theory, after Cheyne notified McArthur of the lack of fill material at the on-
site borrow pit, McArthur sent a text message to Stark: “Last night [Cheyne] said he was 
concerned after we staked the buildings that he might not have as much material to build phase 2 
as he thought. . . .” (Emphasis added). Stark’s response back to McArthur is the text McArthur 
forwarded to Cheyne, mentioned above, that referenced phase 2. McArthur testified that he 
would have expected Cheyne to contact him if there was not enough fill for phase 1. He never 
recalled Cheyne reaching out to inform him there would not be enough fill material at the on-site 
borrow pit to complete phase 1. McArthur believed the property was large enough to open a 
second on-site borrow pit, rather than import material. McArthur testified that he did not learn 
that Cheyne and McCarthy imported fill material from the Swartout Pit until after-the-fact. Stark 
echoed this sentiment and testified that he did not know Cheyne was importing material from the 
off-site Swartout Pit, stating, “[t]hey never asked permission for that.”  
 
We conclude that McCarthy has not met its burden on appeal by showing that the district 
court’s findings were not supported by substantial evidence. Even though some of the evidence 
presented below is conflicting, this Court does not disturb a district court’s findings unless they 
are clearly erroneous. Mortensen, 163 Idaho at 50, 408 P.3d at 48. When the district court 
considered the conflicting evidence, it found: “[t]he only fact that is clear to the Court is that 
there was no change order approved, or even requested, as to the import and use of the materials 
from the Swartout Pit.” This finding has not been undercut by anything McCarthy has presented 
18 
 
on appeal. McCarthy has neither shown that there was a change order signed by Stark or 
McArthur, nor that McArthur and Stark waived the change order provision through their actions. 
Clearly, the parties were not on the same page: Cheyne intended to import material while 
McArthur and Stark believed there was enough material to complete phase 1 of the Project. Even 
if McArthur acted as an agent for Stark, McCarthy did not point to specific evidence presented at 
trial showing Cheyne and McArthur were on the same page about importing material and 
McArthur agreed to it. Even Cheyne’s testimony conceded that after speaking with McArthur, 
there was no final decision until McArthur spoke to Stark. Cheyne’s text messages to Stark that 
reference importing material were not specific enough to put Stark on notice that McCarthy was 
importing fill material. In sum, without a written change order, or a clear action waiving the 
change order provision, the district court’s findings are supported by competent and substantial 
evidence. Accordingly, we affirm its conclusion that McCarthy breached the contract by not 
obtaining a change order provision before importing material from the Swartout Pit.  
 
In light of our ruling, we need not address whether McCarthy also breached the parties’ 
contract by violating the implied covenant of good faith and fair dealing. This is because 
McCarthy did not appeal the district court’s award of damages for breach of contract. Therefore, 
it is irrelevant whether McCarthy further breached the contract under the implied covenant of 
good faith and fair dealing because Stark was not awarded additional damages for Stark’s 
counterclaim for breach of the implied covenant of good faith and fair dealing.  
C. The district court’s finding that McCarthy breached the Idaho Consumer Protection 
Act is supported by substantial and competent evidence.  
 
McCarthy contends the district court erred by finding that it engaged in conduct that 
violated the ICPA. The ICPA’s purpose is “to protect both consumers and businesses against 
unfair methods of competition and unfair and deceptive practices in the conduct of trade or 
commerce, and to provide efficient and economical procedures to secure such protection.” I.C. § 
48-601. It achieves this purpose by declaring any acts or practice that are misleading, false, or 
deceptive as unlawful. I.C. § 48-603(17).  
The following unfair methods of competition and unfair or deceptive acts or 
practices in the conduct of any trade or commerce are hereby declared to be 
unlawful  
. . . .  
(17) Engaging in any act or practice that is otherwise misleading, false, or 
deceptive to the consumer.  
19 
 
I.C. § 48-603(17).  
 
First, McCarthy argues that the error in the initial Invoice 2488 was unintentional because 
once the error was realized, it was corrected. McCarthy’s first argument mischaracterizes the 
findings of the district court. McCarthy’s initial Invoice 2488 was not the sole basis for finding 
McCarthy violated the ICPA. As shown above, McCarthy continued to submit invoices to Stark 
for payment and the amount kept changing:  
Invoice Number 
Invoice Date/Date Received 
Invoice Amount 
2488 
07/25/2017 
$158,980.00 
2504 
08/22/2017 
$121,620.55 
2488 
08/23/2017 
$238,986.98 
2488 
09/01/2017 
$162,087.56 
2488 
09/11/2017 
$145,706.56 
2488 
10/23/2017 
$176,691.71 
 
The district court explicitly found:  
As was shown by the numerous Invoice(s) No. 2488, McCarthy was billing for 
items it didn’t properly quantify and was attempting by the same course of action 
to bill for what Stark had already paid for. Compounding the deceit was Rob 
McCarthy’s response and attitude of “just pay the bill and we’ll work it out later,” 
when confronted by Stark about the overbilling. 
(Emphasis added).  
This clarifies that it was not merely McCarthy’s initial error on Invoice 2488 that 
supported the district court’s finding, but it was the fact that McCarthy continued to erroneously 
bill Stark for things Stark had already paid for. After the initial version of Invoice 2488 was 
issued, McCarthy sent four revised invoices of Invoice 2488. Each subsequent invoice was sent 
without any supporting documentation to explain how McCarthy arrived at the invoiced amount. 
Each subsequent invoice billed Stark for “import converted to tons” and “additional borrow,” 
charges seemingly related to Bid items 3, 4, and 19. McCarthy failed to explain how Stark owed 
more money for Bid Items 3, 4, or 19 when Stark paid for those services, in full, through 
Invoices 2435 and 2481. Moreover, McCarthy’s explanation in his appellate briefing about 
Invoice 2488—“[u]pon discovery, it was corrected in a matter of days”—is another 
mischaracterization. Clearly, the error was not fixed in a matter of days. McCarthy does not 
20 
 
attempt to rebut the evidence that McCarthy’s “fix” to the invoicing dispute was Robert’s 
“cavalier” suggestion to Stark to “just pay the bill and we’ll work it out later.” Moreover, even 
after receiving payment, McCarthy increased its lien on Stark’s property.  
Second, McCarthy asserts its request for 50% payment upfront for the asphalt was not 
misleading; it was merely a request, not a condition of the work to be done. However, 
McCarthy’s email to Stark read, “[w]ould you mind 50% upfront for asphalt? Asphalt is 
requesting it.” (Emphasis added). Despite McCarthy’s assertion, the second sentence in the email 
makes it clear that it was a condition in order to get the work done, not a mere favor. Much more 
troubling is that it was a clear attempt to deflect responsibility from McCarthy and falsely place 
it on the asphalt provider. Cheyne testified that the paving company did not request 50% of the 
cost upfront. Cheyne further testified that he heard Rob McCarthy say that paving would not get 
completed “until we get all the other invoices resolved.” This, by definition, would make 
McCarthy’s email to Stark a false or misleading statement under the ICPA.  
In sum, there is substantial and competent evidence in the record to support the district 
court’s findings that McCarthy violated the ICPA by deceptively billing Stark multiple times for 
work Stark already paid for, by telling Stark to just pay the invoice and they can work it out later, 
and by falsely misleading Stark by informing him that the asphalt subcontractor requested 50% 
of the paving costs upfront. We affirm the district court’s determination that McCarthy violated 
the ICPA.  
D. The district court properly awarded damages under the Idaho Consumer Protection Act 
because substantial and competent evidence supported its finding that Stark suffered an 
ascertainable loss. 
 
McCarthy contends the district court erred by awarding Stark damages for lost interest on 
the money Stark deposited with U.S. Bank in the non-interest bearing collateral account. 
McCarthy argues Stark had no intention to invest these funds because he borrowed most of the 
money from his daughter, and otherwise would not have used the funds to earn interest. 
McCarthy’s argument is made without citation to any authority to support its position. 
 
Idaho Code section 48-608(1) provides that a consumer who suffers ascertainable losses 
due to an unlawful act or practice is entitled to recover his actual damages. I.C. § 48-608(1). The 
district court’s findings are well-supported. Stark was required by U.S. Bank to place 
$265,037.55 into a non-interest bearing account with U.S. Bank after McCarthy filed its lien 
against Stark’s property. McCarthy does not contest that the money was actually deposited, or 
21 
 
that the account was a non-interest bearing account. Mobraten, the vice president and 
commercial banking manager with U.S. Bank, testified that this money could have reasonably 
earned 5 to 7% in interest if invested. McCarthy did not contest this evidence. The district court 
awarded the conservative end of that range—5%. Because Stark met his burden to prove an 
ascertainable loss, we affirm the district court’s award of damages under the ICPA.  
E. The district court did not abuse its discretion by allowing Stark to submit a new cost bill 
with segregated fees.  
 
McCarthy contends the district court erred by awarding Stark’s attorney fees. McCarthy 
argues that Stark failed to segregate the fees from Stark, Stark Investment Group, and U.S. Bank. 
McCarthy cites Hackett v. Streeter, 109 Idaho 261, 264, 706 P.2d 1372, 1375 (Ct. App. 1985) for 
the proposition that where no effort is made to segregate fees between jointly represented parties, 
Hackett mandates the denial of a request for fees. Instead, the district court allowed Stark to 
submit a new cost bill. Essentially, McCarthy’s argument is narrow—it alleges the district court 
abused its discretion by allowing Stark to submit a new cost bill with segregated fees. We find 
Hackett distinguishable from this case and find the district court did not abuse its discretion by 
allowing Stark to submit a revised cost bill with proper segregation of fees.  
 
In Hackett, one attorney defended a subdivision developer and a contractor for the 
alleged negligent construction of a subdivision water system. Hackett, 109 Idaho at 262-63, 706 
P.2d at 1373-74. After a bench trial, only the contractor, not the subdivision developer, was 
found liable. Id. The plaintiff sought fees against the contractor and the subdivision developer 
sought fees against the plaintiff. Id. at 263, 706 P.2d at 1374. However, the attorney representing 
the successful subdivision developer and the unsuccessful contractor did not distinguish between 
the fees incurred by each party in its request against the plaintiff. Id. Therefore, the district court 
denied the fee request altogether. Id. On appeal to the Idaho Court of Appeals, the court 
affirmed. Id. at 265, 706 P.2d at 1376.  
 
The Court of Appeals recognized that the attorney representing both the subdivision 
developer and contractor submitted an affidavit with the fee request that essentially declined to 
segregate the fees because the parties would be severally and jointly liable if the allegations in 
plaintiff’s complaint were true. Id. at 264, 706 P.2d at 1375. Therefore, the district court was left 
with a difficult decision: either award the entire fee request, requiring plaintiff to pay for the 
unsuccessful defendant’s legal fees, or award no fees altogether. Id. The Court of Appeals held 
22 
 
that in this difficult situation, where the option to segregate the fees was declined, the district 
court did not abuse its discretion by denying the attorney fee request altogether. Id.  
 
Hackett is distinguishable from this case. Here, all defendants—Stark, Stark Investment 
Group, and U.S. Bank—were successful against McCarthy. However, the district court denied 
awarding attorney fees for any work performed on behalf of Stark Investment Group or U.S. 
Bank because they had no contractual relationship with McCarthy. Therefore, it ordered a new 
cost bill to be submitted with only Stark’s attorney fees. Stark obliged this request to segregate 
the fees between the parties, instead of refusing to segregate fees like the defendants in Hackett. 
Moreover, in a similar case, this Court has held Hackett is “not applicable” where jointly 
represented defendants were successful and their fees were not segregated. See Taylor v. Riley, 
162 Idaho 692, 403 P.3d 636 (2017). Here, by allowing Stark to cure the issue, and Stark 
obliging, the district court did not abuse its discretion. Accordingly, we affirm the district court’s 
award of attorney fees.  
F. Stark is entitled to attorney fees on appeal under the contract with McCarthy. 
 
Stark contends it is entitled to attorney fees on appeal pursuant to the contract between 
the parties, the ICPA, and Idaho Code section 12-120(3).  
 
The contract between McCarthy and Stark explicitly provides for attorney fees if a party 
initiates judicial action to interpret the contract. This provision includes an appeal. “If a party 
initiates an arbitration or judicial action, including an appeal, as to the interpretation or 
enforcement of this agreement, including remedies upon default, the substantial prevailing party 
shall be entitled to reimbursement of its reasonable fees and costs.” (Emphasis added). Stark has 
prevailed on appeal: he succeeded on his breach of contract claim against McCarthy and 
successfully defended against McCarthy’s claim that Stark waived the change order provision 
under the contract. Therefore, we award Stark his reasonable attorney fees and costs under the 
contract because the contract provided for attorney fees and costs to the prevailing party and 
Stark is the prevailing party on appeal. I.A.R. 40(a) and 41(a); see also Alsco, Inc. v. Fatty’s Bar, 
LLC, 166 Idaho 516, 535, 461 P.3d 798, 817 (2020) (Attorney fees on appeal awarded pursuant 
to contract). 
  
VI. CONCLUSION 
For the foregoing reasons, we affirm the district court’s holdings that McCarthy breached 
the contract between the parties and McCarthy violated the ICPA. Further, we affirm the district 
23 
 
court’s award of damages to Stark under the ICPA and its award of attorney fees to Stark. Stark 
is awarded his reasonable attorney fees and costs on appeal.  
Chief Justice BEVAN, and Justices BURDICK, BRODY and STEGNER CONCUR.