Case Title: Garner v. Povey

Citation: 

Docket Number: 37561

State: idaho

Court: Idaho Supreme Court (civil)

Date: 2011-08-04T00:00:00Z

Document:
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IN THE SUPREME COURT OF THE STATE OF IDAHO 
 
Docket No. 37561 
 
DANIEL S. GARNER and SHERRI-JO 
GARNER husband and wife; NOLA 
GARNER, a widow and NOLA GARNER as 
trustee of the NOLA GARNER LIVING 
TRUST, dated July 29, 2007, 
 
       Plaintiffs-Respondents, 
 
v. 
 
BRAD POVEY and LEIZA POVEY, husband 
and wife, 
 
       Defendants-Appellants, 
 
and 
 
HAL J. DEAN and MARLENE T. DEAN, 
husband and wife, DOUGLAS K. VIEHWEG 
and SHARON C. VIEHWEG, husband and 
wife, JEFFREY J. NEIGUM and 
KATHLEEN A. NEIGUM as trustees of the 
JEFFERY J. NEIGUM and KATHLEEN A. 
NEIGUM REVOCABLE TRUST, dated 
September 17, 2004; FIRST AMERICAN 
TITLE INSURANCE COMPANY, a foreign 
title insurer with an Idaho certificate of 
authority; and FIRST AMERICAN TITLE 
COMPANY, INC., an Idaho corporation, 
 
        Defendants. 
______________________________________ 
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Boise, June 2011 Term 
 
2011 Opinion No. 88 
 
Filed:  August 4, 2011 
 
Stephen W. Kenyon, Clerk 
 
Appeal from the District Court of the Sixth Judicial District of the State of Idaho, 
Franklin County. The Honorable Stephen S. Dunn, District Judge. 
 
The decision of the district court is affirmed in part and reversed in part and the 
case is remanded. 
 
Atkin Law Offices, P.C., Bountiful, Utah, for appellants. Blake S. Atkin argued. 
 
 
2 
 
Beard St. Clair Gaffney PA, Rexburg, for respondents. Michael D. Gaffney 
argued.  
_____________________ 
 
J. JONES, Justice. 
 
 
Following the decision of this case on the merits, the Appellants sought an award of 
attorney fees under the “commercial transaction” prong of I.C. § 12-120(3) and for frivolous 
litigation under I.C. § 12-121. The district court denied fees on both grounds. We affirm the 
denial of fees under I.C. § 12-121, but reverse the denial under I.C. § 12-120(3). 
I. 
Factual and Procedural Background     
This case arose out of a dispute as to the easement rights of the Respondents over property 
formerly owned by the Appellants. On May 22, 1987, Daniel Garner entered into a contract to 
purchase a forty-acre parcel of real property located in Franklin County from Ralph and Thelma 
McCulloch. The contract of sale purported to provide Daniel an easement across the McCullochs’ 
property, but the warranty deed whereby the McCullochs conveyed the property to Daniel did not 
grant an easement. As a result, Daniel did not obtain an express easement. However, as the district 
court subsequently determined, Daniel ultimately acquired an easement either by prescription or 
prior use.1  The parties refer to this easement as “the original access road.” 
 
On May 23, 1990, Brad2 and Leiza Povey (the Poveys) acquired, by warranty deed, the 
remaining property owned by the McCullochs. As a result of that transaction, the Poveys acquired 
the property containing the original access road. The warranty deed conveying the property to the 
Poveys does not mention any easement in favor of Daniel. In the district court, the Poveys 
conceded that Daniel was entitled to an easement across the property, but they disputed the 
location and the scope of the easement.  
 
In 1992, the Poveys conveyed, by warranty deed, some of the property that they had 
acquired from the McCullochs to Daniel’s parents, Gary and Nola Garner. This property is 
adjacent to Daniel’s property. The Poveys retained the property containing the original access road. 
Although the property that Gary and Nola acquired from the Poveys was not accessible without 
crossing the Poveys’ property, the warranty deed did not grant an easement in favor of the Garners. 
                                                 
1 When this action was commenced in 2008, Daniel had been using the original access road since he obtained the 
forty-acre parcel from the McCullochs in 1987.  
2 Sherri-Jo Garner is Daniel Garner’s wife. Brad Povey is Sherri-Jo Garner’s uncle.  
 
3 
 
The deed contained the following language: 
TO HAVE AND TO HOLD the said premises, with their appurtenances unto the 
said Grantees, their heirs and assigns forever. And the said Grantors do hereby 
covenant to and with the said Grantees that they are the owners in fee simple of said 
premises; that they are free from all incumberances and that they will warrant and 
defend the same from all lawful claims whatsoever.  
Before the district court, the Garners argued that, because the warranty deed conveyed the property 
along with its “appurtenances,” the Poveys’ right to use the original access road was conveyed to 
Nola and Gary. The district court determined that no express easement was granted to the Garners 
in the warranty deed, but concluded that Gary and Nola had an easement across the original access 
road by prescription or prior use.3  
 
Over the next thirteen years, the Poveys conveyed to several other grantees, none of whom 
are parties to this appeal, portions of the land adjacent to the Garners.  During that time, there has 
apparently been confusion and dispute as to the exact location and nature of the Garners’ easement 
and the extent to which the Poveys’ successors in interest were on notice of, and recognized, the 
easement.  Indeed, it was the Poveys’, and their successors’, alleged interference with the easement 
that gave rise to this action.  
 
Daniel Garner, Sherri-Jo Garner, Nola Garner, and Nola Garner as trustee of the Nola 
Garner Living Trust (the Garners), filed suit against the Poveys alleging that (1) the Poveys 
physically interfered with the Garners’ easement by plowing over the original access road; (2) the 
Poveys wrongfully conveyed their property without mentioning the Garners’ easement in the 
deeds; and (3) the Poveys breached their duty, arising from the 1992 warranty deed between the 
Poveys and Gary and Nola Garner, to warrant and defend the Garners’ easement. At the time the 
suit was filed, the Poveys no longer owned the land upon which the original access road is located. 
 
The district court ultimately granted summary judgment in favor of the Poveys. The district 
court determined that the Poveys did not breach any duties owed to the Garners by transferring the 
property without specifically mentioning the Garners’ easement in the deeds because a servient 
estate holder has no duty, upon sale of the servient estate, to protect implied or prescriptive 
easements. The court further determined that the Poveys did not physically interfere with the 
                                                 
3 After Gary Garner passed away in 2005, Daniel obtained an interest in the property that Gary and Nola had 
acquired from the Poveys. Daniel was also gifted a portion of the property from Nola Garner. Nola also transferred a 
portion of her interest in the property to the Nola Garner Living Trust, of which Nola is the sole trustee. Therefore, 
Daniel Garner, Sherri-Jo Garner, Nola Garner, and the Nola Garner Living Trust all claim an interest in the property 
that the Poveys conveyed to Nola and Gary Garner in 1992.    
 
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Garners’ easement.  Indeed, the district court found that the Garners were not prejudiced by the 
Poveys’ act of plowing over the original access road, and that the plowing merely caused a minor 
inconvenience that did not constitute an unreasonable interference with the easement. The district 
court did not directly address the Garners’ breach of warranty claim.  
 
Following the favorable summary judgment ruling, the Poveys submitted a memorandum 
of costs and attorney fees. The Poveys requested attorney fees pursuant to I.C. § 12-121 on the 
ground that the Garners brought and pursued the action frivolously, unreasonably, or without 
foundation, and pursuant to I.C. § 12-120(3) on the ground that the action involved a commercial 
transaction. In support of their claim for attorney fees under I.C. § 12-120(3), the Poveys argued 
that the Garners’ claims were based on the transaction between the Poveys and Nola and Gary 
Garner in 1992 whereby Nola and Gary purchased property from the Poveys and that such 
transaction was commercial in nature. The Poveys also argued that the Garners attested, under 
oath, in their verified complaint that their action involved a commercial transaction. The district 
court ultimately denied the Poveys’ request for attorney fees under both I.C. § 12-121 and I.C. § 
12-120(3), and the Poveys timely appealed to this Court. 
II. 
Issues on Appeal  
I. 
Whether the district court erred in granting the Garners’ motion to strike the 
affidavit of Jeff Neigum?  
II. 
Whether the district court erred in denying the Poveys’ request for attorney fees 
under I.C. § 12-121?  
III. 
Whether the district court erred in denying the Poveys’ request for attorney fees 
under I.C. § 12-120(3)?    
IV. 
Whether either party is entitled to attorney fees on appeal? 
III. 
Discussion   
A. 
The district court did not abuse its discretion in granting the Garners’ 
motion to strike the affidavit of Jeff Neigum.   
The Poveys assert that the Garners bought this action against the Poveys because Daniel 
and Sherri-Jo Garner were involved in a family dispute with Brad Povey, and wanted to use 
litigation as a way to get even. In support of their request for attorney fees pursuant to I.C. § 12-
121, the Poveys submitted an affidavit from Jeff Neigum, wherein he testified that,  
[Daniel Garner] had a personal vendetta against Brad Povey and was hoping to 
make us mad at Brad so that we would sue him. He even told me some of the 
 
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details about the trouble between him and Brad Povey. He told me that Brad had 
intervened with Brad’s father (the grandfather of Dan Garner’s wife, Sherri-Jo) to 
keep him from selling to Dan and Sherri-Jo the Troy Grave’s dairy. That 
intervention by Brad had made Dan and Sherri-Jo very angry with Brad and that 
is why Dan wanted to make us mad so that we would sue Brad. . . . I feel we were 
embroiled in this lawsuit because Dan Garner wanted to get even with Brad 
Povey for a completely unrelated event.  
 
The district court granted the Garners’ motion on the ground that the testimony in the 
affidavit was not relevant to the issue of whether the Poveys were entitled to attorney fees under 
I.C. § 12-121. More specifically, the district court concluded that,  
a claim under I.C. § 12-121 must be based on an analysis of the legal positions 
taken in the case, and not on extraneous factors. . . . [T]he facts asserted in the 
affidavit are irrelevant to the question of whether Garners pursued this case 
frivolously, unreasonably or without foundation. There may be a variety of 
motives for bringing any lawsuit, some appropriate and some not. But the only 
question to be considered by this Court is whether the legal theories and facts of 
the case were pursued in violation of I.C. § 12-121 and I.R.C.P. 54(e)(1). The 
Court has concluded [] that the issues raised in this case were fairly debatable and 
legitimate, even when resolved against the Garners.  
 
The Poveys argue that the district court “made a critical error in the law applicable to its 
decision” by concluding that it must analyze the legal position taken by the Garners, and not 
extraneous factors, when determining whether attorney fees were appropriate under I.C. § 12-
121. The Poveys assert that Jeff Neigum’s testimony in the affidavit demonstrated that the 
Garners had an ulterior motive for filing suit against the Poveys and, therefore, it was relevant to 
the issue of whether the Garners pursued the action frivolously, unreasonably, or without 
foundation.  
 
The district court determined, in essence, that the statements contained in the affidavit 
were irrelevant to the issue at hand. The court based its determination to strike the affidavit on 
I.R.C.P. 56(e), which pertains to affidavits filed in a summary judgment proceeding, but should 
have based its ruling on I.R.E. 402, which states that “[e]vidence which is not relevant is not 
admissible.” “‘The question of whether evidence is relevant is reviewed de novo, while the 
decision to admit relevant evidence is reviewed for an abuse of discretion.’”  State v. Sheldon, 
145 Idaho 225, 228, 178 P.3d 28, 31 (2008) (quoting State v. Shutz, 143 Idaho 200, 202, 141 
P.3d 1069, 1071 (2006)).  In determining whether the district court abused its discretion, the 
Court considers (1) whether the trial court correctly perceived the issue as one of discretion; (2) 
whether the trial court acted within the outer boundaries of its discretion and consistently with 
 
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the legal standards applicable to the specific choices available to it; and (3) whether the trial 
court reached its decision by an exercise of reason. Cantwell v. City of Boise, 146 Idaho 127, 
134, 191 P.3d 205, 212 (2008).   
 
The Poveys fail to explain how the district court “made a critical error in the law” in 
concluding that Jeff Neigum’s testimony was irrelevant to the question at hand. In many cases, 
the party bringing an action may have a variety of motives for doing so, some of which may be 
improper. But that fact is irrelevant when the party has a valid legal or factual basis for pursuing 
the action. Because the Poveys requested attorney fees under I.C. § 12-121, the only relevant 
inquiry is whether the Garners had a valid legal or factual basis for bringing the action. 
Therefore, the district court correctly perceived Mr. Neigum’s testimony to be irrelevant to the 
fee issue and did not err in granting the Garners’ motion to strike his affidavit. 
B. 
The district court did not abuse its discretion in denying the Poveys’ request 
for attorney fees under I.C. § 12-121.  
 
The Poveys contend that the Garners pursued this action frivolously, unreasonably, and 
without foundation. The Poveys argue that when the Garners brought this suit, the Poveys did 
not own any of the property involved, nor did the Poveys do anything to interfere with the 
Garners’ use of the easement or deny the Garners’ right to an easement. They thus conclude that 
the action was without merit. 
 
In denying the Poveys’ request for attorney fees under I.C. § 12-121, the district court 
concluded that,  
This case raised important questions concerning the types of easements Garners 
had, what Poveys’ responsibilities were regarding those easements, and whether 
Poveys had improperly interfered with those easements, either by physically 
plowing over them or in the [subsequent] conveyances. . . . While the Court 
concluded as a matter of law that Poveys had no duty with regard to [another 
grantee’s] deed, Poveys’ duty was a serious and debatable question. There was a 
paucity of cases dealing with the duties of the servient estate holder with regard to 
any duty to protect the holder of a prescriptive or prior use easement and the 
Court had to carefully analyze many cases to decide what the duty was and 
whether Poveys breached that duty. . . . The Court finds that the many questions 
discussed in this case about the scope of the easements and Poveys’ duties were 
“fairly debatable” and required substantial legal analysis for resolution. Under this 
standard, the Court is not left with the abiding belief that Garners’ claim was 
pursued frivolously, unreasonably or without foundation.   
 
Fees under I.C. § 12-121 are not awarded to a prevailing party as a matter of right but, 
 
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rather, are subject to the district court’s discretion.4 Coward v. Hadley, 150 Idaho 282, 290, 246 
P.3d 391, 399 (2010). A district court should only award fees “when it is left with the abiding 
belief that the action was pursued, defended, or brought frivolously, unreasonably, or without 
foundation.” C & G, Inc. v. Rule, 135 Idaho 763, 769, 25 P.3d 76, 82 (2001) (internal quotation 
marks omitted).5  However, “when a party pursues an action which contains fairly debatable 
issues, the action is not considered to be frivolous and without foundation.” Id. A claim is not 
necessarily frivolous simply because the district court concludes it fails as a matter of law. Gulf 
Chem. Employees Fed. Credit Union v. Williams, 107 Idaho 890, 894, 693 P.2d 1092, 1096 (Ct. 
App. 1984). Furthermore, “[a] misperception of the law, or of one’s interest under the law is not, 
by itself, unreasonable. Rather, the question is whether the position adopted was not only 
incorrect, but so plainly fallacious that it could be deemed frivolous, unreasonable, or without 
foundation.” Snipes v. Schalo, 130 Idaho 890, 893, 950 P.2d 262, 265 (Ct. App. 1997) (internal 
citation omitted) (internal quotation marks omitted).   
 
A district court’s denial of fees under I.C. § 12-121 will not be overturned absent an 
abuse of discretion. Chavez v. Barrus, 146 Idaho 212, 225, 192 P.3d 1036, 1099 (2008).  In this 
case, the district court did not abuse its discretion.  The district court correctly perceived the I.C. 
§ 12-121 issue as a matter within its discretion. The judge recognized that if he found the 
Garners pursued this action frivolously, unreasonably, or without merit, he could award fees to 
the Poveys. He then considered the relative merit of the Garners’ claims in light of the limited 
case law on the subject finding them colorable despite failing as a matter of law.  Furthermore, 
the district court addressed the Poveys’ arguments regarding the Garners’ motives for bringing 
the suit and their alleged failure to negotiate, appropriately finding both to be irrelevant in the 
I.C. § 12-121 analysis. Finally, after concluding that the Garners raised fairly debatable issues, 
the district court was not left the abiding belief that the Garners’ action was frivolous, 
unreasonable, or without foundation.  Accordingly, the district court did not abuse its discretion 
in denying fees under I.C. § 12-121.  
                                                 
4 I.C. § 12-121 provides: 
In any civil action, the judge may award reasonable attorney’s fees to the prevailing party or parties, 
provided that this section shall not alter, repeal or amend any statute which otherwise provides for the 
award of attorney’s fees. 
5 According to I.R.C.P. 54(e),   
attorney fees under section 12-121, Idaho Code, may be awarded by the court only when it finds, from 
the facts presented to it, that the case was brought, pursued or defended frivolously, unreasonably or 
without foundation. . . . 
 
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C. 
The Poveys are entitled to fees under I.C. § 12-120(3). 
 
 
The Poveys assert that the district court erred in failing to award them attorney fees under 
I.C. § 12-120(3). They present two arguments in support of their fee claim. First, they contend 
that by alleging in their complaint that the suit was a commercial transaction within the meaning 
of I.C. § 12-120(3) the Garners “triggered” the application of that section, entitling them to a fee 
award. Second, they assert that the transaction was, in fact, commercial in nature and, therefore, 
they are entitled to a fee award. The Garners counter that the trigger argument is without legal 
support and that the only way the Poveys could obtain a fee award is to establish that there was a 
transaction between the parties that was commercial in nature. The Garners submit there is 
nothing in the record to establish that any transaction between the parties could be characterized 
as being a commercial one. 
 
In its ruling, the district court noted, “Poveys first assert that because Garners alleged, in 
the Complaint, that this case involved a commercial transaction, it must be deemed one and 
attorney fees must be allowed to the prevailing party.” The court rejected this contention based 
on its interpretation of the holding in Great Plains Equip., Inc. v. Northwest Pipeline Corp., 136 
Idaho 466, 36 P.3d 218 (2001).  The court went on to examine the nature of the Garners’ action, 
finding that it was a dispute about the type of easement the Garners had acquired and whether the 
Poveys had a legal duty to protect that easement. According to the district court, “the primary 
purpose of this litigation was to confirm N[ola] Garner’s easement right and to seek damages if 
that right was lost or interfered with, either physically or by conveyance, by Poveys.” The district 
court noted that any commercial transaction in the case was incidental to the primary purpose of 
the litigation. 
 
Disregarding the allegations of the complaint, there was little evidence before the district 
court that would establish the action as being commercial in nature. In their fee request to the 
district court, the Poveys failed to argue that the property was to be used for a commercial 
purpose. Indeed, it was first argued by the Poveys on appeal that the 1992 sale was a commercial 
transaction because the property was to be used for commercial farming and hauling gravel. 
Thus, the Poveys’ entitlement to fees must be based upon their first assertion—that they were 
entitled to fees because the Garners alleged in their complaint that the parties had engaged in a 
commercial transaction within the meaning of I.C. § 12-120(3), and that their action was based 
on such transaction. We conclude that the Poveys are entitled to attorney fees on this basis and 
 
9 
 
that the district court erred in concluding otherwise.  
Whether a district court has correctly determined that a case is based on a commercial 
transaction for the purpose of I.C. § 12-120(3) is a question of law over which this Court 
exercises free review. Great Plains, 136 Idaho at 470, 36 P.3d at 222. Idaho Code § 12-120(3) 
allows for an award of attorney fees to the prevailing party in a civil action to recover “in any 
commercial transaction.” A commercial transaction includes all transactions except those for 
personal or household purposes. I.C. § 12-120(3). In determining whether attorney fees should 
be awarded under I.C. § 12-120(3), the Court has conducted a two-step analysis: “(1) there must 
be a commercial transaction that is integral to the claim; and (2) the commercial transaction must 
be the basis upon which recovery is sought.” Great Plains, 136 Idaho at 471, 36 P.3d at 223 
(internal quotation marks omitted). “The commercial transaction must be an actual basis of the 
complaint . . . . [T]he lawsuit and the causes of action must be based on a commercial 
transaction, not simply a situation that can be characterized as a commercial transaction.”  Id. In 
other words, the relevant inquiry is whether the commercial transaction constituted “the 
gravamen of the lawsuit,” and was the basis on which a party is attempting to recover. Id. at 472, 
36 P.3d at 224.   
Pertinent to the inquiry as to whether allegations contained in a complaint can invoke 
application of I.C. § 12-120(3) is this Court’s decision in Magic Lantern Productions, Inc. v. 
Dolsot, 126 Idaho 805, 892 P.2d 480 (1995). In that case we stated: 
In Farmers Nat. Bank v. Shirey, 126 Idaho 63, 878 P.2d 762 (1994), the Court 
said: 
 
Where a party alleges the existence of a contractual relationship of 
a type embraced by section 12-120(3) . . . that claim triggers the 
application of [I.C. § 12-120(3)] and a prevailing party may 
recover fees even though no liability under a contract was 
established. 
 
Id. at 73, 878 P.2d at 772. 
 
This same principle applies where the action is one to recover in a 
commercial transaction, regardless of the proof that the 
commercial transaction alleged did, in fact, occur. 
 
Id. at 808, 892 P.2d at 483. This holding makes eminent sense and we, thus, reaffirm it. It would 
be anomalous to hold, as we have on a number of occasions, that a prevailing party is entitled to 
 
10 
 
attorney fees under the contract prong of I.C. § 12-120(3), where the opposing party has alleged 
a contract as the basis for recovery, even though no contract was established, and then not allow 
the prevailing party to recover under the commercial transaction prong of I.C. § 12-120(3) where 
the opposing party has alleged a commercial transaction as the basis of his claim.  
 
The district court, however, citing Great Plains, asserted that the above holding in Magic 
Lantern had been rejected by this Court, quoting from that opinion as follows: 
There must be a commercial transaction between the parties for attorney fees to 
be awarded. To the extent that Magic Lantern Productions, Inc. v. Dolsot, 126 
Idaho 805, 808, 892 P.2d 480, 483 (1995) may be read to mandate an award of 
attorney fees to the prevailing party when the other party has claimed fees 
pursuant to I.C. § 12-120(3), that interpretation is disavowed. A prevailing party 
may rely on I.C. § 12-120(3) if pled by another party for recovery of attorney fees 
if it is warranted under the statute. “[A] court is not required to award reasonable 
attorney fees every time a commercial transaction is connected with a case.” 
Bingham v. Montane Resource Associates, 133 Idaho 420, 426, 987 P.2d 1035, 
1041 (1999) (citing Ervin Construction Co. v. Van Orden, 125 Idaho 695, 704, 
874 P.2d 506, 515 (1993)). [Emphasis added].  
 
Id. at 471, 36 P.3d at 223. The district court misunderstood what statement in Magic Lantern this 
Court was disavowing in the above Great Plains quote. After the Magic Lantern quote that we 
have reaffirmed above, the Court went on to say, “Magic Lantern sought to recover on an alleged 
commercial transaction, as evidenced by Magic Lantern’s request for attorney fees pursuant to 
I.C. § 12-120.” Id. at 808, 892 P.2d at 483. Magic Lantern’s fee request under I.C. § 12-120 only 
implied a commercial transaction. There was no contention that Magic Lantern actually pleaded 
a commercial transaction. Great Plains thus attempted to clarify that a mere request for attorney 
fees pursuant to I.C. § 12-120(3), without more, is not sufficient to trigger the commercial 
transaction prong of that section. In other words, neither a claim or request in the prayer of a 
complaint for fees under I.C. § 12-120(3), nor a request or claim for attorney fees in a 
memorandum of costs and fees, is sufficient to trigger application of that fee provision. A party 
seeking fees based on a mere request under I.C. § 12-120(3) must show that a commercial 
transaction was the gravamen of the action before a court may award fees. However, allegations 
in the complaint that the parties entered into a commercial transaction and that the complaining 
party is entitled to recover based upon that transaction, are sufficient to trigger the application of 
I.C. § 12-120(3).  
 
11 
 
 
It is true that a fee award was denied to Northwest Pipeline (NWP), the prevailing party 
in Great Plains, even though the losing party, Cate-Idaho, had claimed it was entitled to attorney 
fees under I.C. § 12-120(3) with regard to an unjust enrichment claim, upon which it 
subsequently failed to recover. 136 Idaho at 472, 36 P.3d at 224 (“In this case, attorney fees were 
requested for the separate claim of unjust enrichment pursuant to I.C. § 12-120(3), and the 
gravamen of that claim was a commercial transaction.”). However, the Court held that attorney 
fees were not available under that statute because “[t]here was no transaction between the 
subcontractors and NWP. Consequently, NWP as the prevailing party cannot rely on I.C. § 12-
120(3) for an award of attorney fees.” Id. at 473, 36 P.3d at 225. Further, there was no contention 
that Cate-Idaho had alleged in its complaint that there was a commercial transaction between it 
and NWP. The Court simply held that a mere request for fees under § 12-120(3) is insufficient to 
establish such a transaction. Thus, Great Plains did not overrule the statement in Magic Lantern 
that a prevailing defendant can recover attorney fees under I.C. § 12-120(3) if the opposing 
party’s complaint alleges a claim seeking to recover on a commercial transaction, even though it 
fails to prove that such transaction occurred.  
 
In this case the Garners alleged in their complaint that: 
The wrongful actions of [the Poveys] include plowing over Segment “A” of the 
Original Access Road to facilitate sale of their property; wrongfully conveying 
property without confirming the right-of-way now held by Daniel, his wife, Nola 
and the Nola Trust; warranting against the right-of-way; and by actions herein 
seeking to have Daniel, his wife, Nola and the Nola Trust lose all fully effective 
access rights. By performing these wrongful actions, the Poveys breached the 
warranty contained in the Warranty Deed . . . .  
(emphasis added). The Garners’ complaint continued, alleging that they 
[brought] and pursue[d] this action to preserve their right-of-way and to recover 
damages against Defendants Brad Povey and Leiza Povey for their wrongful 
conduct in seeking to extinguish the right-of-way . . . . The purchase of the real 
estate by Gary and Nola from Povey Defendants was a commercial transaction 
under Idaho Code Sec. 12-120(3) so Plaintiffs . . . should be entitled to recover 
their reasonable attorney fees from Defendants Brad Povey and Lezia [sic] 
Povey. 
 
Daniel and Nola Garner both affirmed these allegations under oath.  The Garners did not simply 
invoke I.C. § 12-120 as a potential justification for fees; they pleaded it as the law governing the 
action and they alleged supporting facts in their verified complaint.  A commercial transaction 
was thus integral to the Garners’ claim and it was the basis upon which they sought to recover.  
 
12 
 
This was not a situation where, after the substantive litigation, a party seeking fees attempted to 
characterize the action as one based on a commercial transaction. Rather, according to the 
Garners’ complaint, the gravamen of this action was a commercial transaction of the type 
embraced by I.C. § 12-120(3). 
In this case, the Garners’ allegations triggered application of the statute. Accordingly, the 
Poveys, as the prevailing party below, were entitled to fees under § 12-120(3). We therefore 
reverse the district court’s contrary ruling and remand for further action consistent with this 
opinion.  
D. 
The Poveys are entitled to fees on appeal. 
 
The Poveys also argue that they are entitled to attorney fees on appeal pursuant to I.C. § 
12-120(3). As discussed above, the Garners’ alleged that this action was based on a commercial 
transaction, which triggered § 12-120(3).  The Poveys are the prevailing party in this appeal and, 
accordingly, they are also entitled to fees under I.C. § 12-120(3) on appeal.  
IV. 
Conclusion 
 
 We affirm the district court in granting the Garners’ motion to strike Jeff Neigum’s 
affidavit and denying fees under I.C. § 12-121. We reverse the denial of attorney fees for the 
Poveys under I.C. § 12-120(3) and remand to the district court to determine an appropriate fee 
award. Finally, we award the Poveys costs and attorney fees on appeal. 
 
 
Chief Justice BURDICK, and Justices EISMANN, W. JONES, and HORTON CONCUR.