Title: Ameritel v. The Pocatello-Chubbuck Auditorium Declaratory judgment action

State: idaho

Issuer: Idaho Supreme Court (civil)

Document:

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IN THE SUPREME COURT OF THE STATE OF IDAHO 
 
Docket No. 33448 
 
AMERITEL INNS, INC.,                                  
                                                      
         Plaintiff-Appellant-Cross Respondent,      
                                                      
v.                                                    
                                                      
THE POCATELLO-CHUBBUCK  
AUDITORIUM OR COMMUNITY  
CENTER DISTRICT, dba THE  
POCATELLO CONVENTION & VISITORS   
BUREAU,                                               
                                                      
         Defendant-Respondent-Cross Appellant.   
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Pocatello, April 2008 Term 
 
2008 Opinion No.  99 
 
Filed:  July 23, 2008 
 
Stephen Kenyon, Clerk 
 
Appeal from the District Court of the Sixth Judicial District of the State of Idaho, 
Bannock County.  Honorable Peter D. McDermott, District Judge. 
 
The district court order granting summary judgment is reversed and the case is 
remanded. 
 
Racine, Olson, Nye, Budge & Bailey, Pocatello, for appellant/cross-respondent.    
Richard Hearn argued. 
 
Lowell N. Hawkes, Pocatello, for respondent/cross-appellant.   
 
                     _______________________________________________ 
 
HORTON, Justice. 
 
This appeal arises from a declaratory judgment action concerning the permissibility of 
expenditures made by the Respondent Pocatello-Chubbuck Auditorium District (the District).  
AmeriTel Inns, Inc. (AmeriTel) appeals the district court’s grant of summary judgment in favor 
of the District.  The District cross-appeals the district court’s denial of its request for an award of 
attorney fees.  We reverse the decision of the district court. 
I. FACTUAL AND PROCEDURAL BACKGROUND 
The facts in the case are essentially without dispute.  The voters approved the District 
during the November 3, 1998 election and the District incorporated itself as a nonprofit 
corporation on November 18, 2002.  The District’s primary purpose is to market the 
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Pocatello/Chubbuck Lodging Association and the cities of Pocatello and Chubbuck.  The District 
is charged with the mission statement: “To create, promote & develop within the travel industry 
a positive awareness of what Southeast Idaho has to offer for the leisure and business traveler 
and to generate economic growth for the Greater Pocatello Area.”  
The District derives its revenue from two sources: grants from the Idaho Tourism 
Commission and a two percent room tax collected by local motels and hotels.  With these 
revenues, the District engages in a bidding process to bring events to the Pocatello area.  The 
District provides event organizers with “seed money” to entice the organizers to host events in 
the Pocatello area.  The District sometimes rents and pays for facilities on behalf of the event 
sponsors.  The District approves expenditures on the ability to put “heads in beds,” or entice 
overnight visitors to Pocatello area RV parks, hotels, and motels.  Consistent with its limited 
mission statement, the District has expended funds to “promote the tourism industry and to bring 
… visitors and people to convene in Pocatello” the district has not constructed a public 
auditorium, exhibit hall, convention center, sports arena or facility of a similar nature, nor does it 
plan to do so. 
On October 11, 2005, AmeriTel filed a verified complaint seeking the following relief: 
(1) a declaration that the District’s expenditures of public funds to individuals and private entities 
exceeds its statutory authority and violates the Idaho State Constitution; (2) an order enjoining 
the District from making further expenditures for such purposes; (3) an order enjoining further 
collection of the auditorium tax on hotels and motels; and (4) an award of attorney fees and 
costs.  On April 24, 2006, AmeriTel filed a motion for summary judgment.  On May 9, 2006, the 
District filed its own motion for summary judgment.  On August 3, 2006, the district court issued 
its memorandum decision granting the District’s motion for summary judgment and denying 
AmeriTel’s motion for summary judgment.  The district court denied the District’s request for an 
award of attorney fees.  AmeriTel timely appealed.  The District has cross-appealed the district 
court’s denial of its request for an award of attorney fees.  We reverse.   
II. STANDARD OF REVIEW 
In reviewing a ruling on a summary judgment motion, this Court employs the same 
standard used by the district court.  Sprinkler Irrigation Co. v. John Deere Ins. Co., Inc., 139 
Idaho 691, 695, 85 P.3d 667, 671 (2004).  Summary judgment is appropriate “if the pleadings, 
depositions, and admissions on file, together with the affidavits, if any, show that there is no 
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genuine issue as to any material fact and that the moving party is entitled to a judgment as a 
matter of law.”   I.R.C.P. 56(c).  This Court liberally construes all disputed facts in favor of the 
non-moving party and draws all reasonable inferences and conclusions supported by the record 
in favor of the party opposing the motion.  Lockheed Martin Corp. v. Idaho State Tax Comm’n, 
142 Idaho 790, 793, 134 P.3d 641, 644 (2006).   
III. ANALYSIS 
AmeriTel raises two substantive issues on appeal: (1) whether the District’s expenditures 
violate the statutes that govern auditorium districts; and (2) whether the District’s expenditures 
are unconstitutional under the Idaho State Constitution.  AmeriTel also asks this Court for an 
award of attorney fees on appeal.  It is well established that this Court will not decide the 
constitutionality of a statute unless it is absolutely necessary for a determination of the case.  
Poesy v. Bunney, 98 Idaho 258, 264, 561 P.2d 400, 406 (1977).  We will decline to address 
constitutional issues on appeal when the matter can be determined on statutory grounds.  State v. 
Doe, 140 Idaho 271, 273, 92 P.3d 521, 523 (2004) (citing State v. Young, 122 Idaho 278, 283, 
833 P.2d 911, 916 (1992); Smith v. Dep’t of Employment, 100 Idaho 520, 521, 602 P.2d 18, 19 
(1979)).  Because we decide the instant case on statutory grounds, we do not find it necessary to 
address AmeriTel’s arguments under the Idaho State Constitution. 
A. The district court erred when it held that the District’s expenditures were not 
outside the authority granted to it under the plain meaning of I.C. § 67-4902. 
 
AmeriTel argues that the plain meaning of I.C. §§ 67-4902, 67-4904, and 67-4922A does 
not authorize the District to market facilities that it does not own or operate and that the 
legislative history of I.C. § 67-4902 demonstrates that the legislature intended the statute to 
encourage local communities to build public facilities.  The District argues that AmeriTel’s 
interpretation of I.C. § 67-4902 renders I.C. § 67-4912(f) a nullity and conflicts with I.C. §§ 67-
4912 (d) and (m).  Additionally, when construing I.C. § 67-4904, the District urges this Court to 
consider the 1998 version of the statute that was in effect at the time the District was formed.   
The interpretation of a statute is a question of law over which this Court exercises free 
review.  State v. Hart, 135 Idaho 827, 829, 25 P.3d 850, 852 (2001).  The object of statutory 
interpretation is to give effect to legislative intent.  State v. Yzaguirre, 144 Idaho 471, 475, 163 
P.3d 1183, 1187 (2007) (citing Robison v. Bateman-Hall Inc., 139 Idaho 207, 210, 76 P.3d 951, 
954 (2003)).  The literal words of the statute provide the best guide to legislative intent, and 
therefore, the interpretation of a statute must begin with the literal words of the statute.  Id.    “In 
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determining the ordinary meaning of a statute ‘effect must be given to all the words of the statute 
if possible, so that none will be void, superfluous, or redundant.’”  State v. Mercer, 143 Idaho 
108, 109, 138 P.3d 308, 309 (2006) (quoting In re Winton Lumber Co., 57 Idaho 131, 136, 63 
P.2d 664, 666 (1936)).  Moreover, the Court must consider all sections of applicable statutes 
together to determine the intent of the legislature.  Davaz v. Priest River Glass Co., Inc., 125 
Idaho 333, 336, 870 P.2d 1292, 1295 (1994). 
 
There are two statutes pertinent to this Court’s analysis: I.C. § 67-4902, which contains 
the definition of an auditorium district, and I.C. § 67-4912, which enumerates the general powers 
of the board of directors of an auditorium district.  Idaho Code § 67-4902 provides in relevant 
part: 
An auditorium or community center district is one to build, operate, maintain, 
market and manage for public, commercial and/or industrial purposes by any 
available means public auditoriums, exhibition halls, convention centers, sports 
arenas and facilities of a similar nature, and for that purpose any such district shall 
have the power to construct, maintain, manage, market and operate such facilities. 
 
At the outset, we note that the legislature has not defined what constitutes a facility under I.C. § 
67-4902.  However, the legislature has provided a non-exhaustive list of facilities that comply 
with the statute.  The list makes clear that an auditorium district must “build, operate, maintain, 
market and manage” some sort of physical facility.  We are not asked to decide what type of 
building qualifies as a “facility” under I.C. § 67-4902.  Instead, in the instant case, the parties 
dispute whether an auditorium district is required to construct and operate a physical facility, or 
whether it may simply market existing facilities within the community. 
The literal language of the statute requires that an auditorium district “build, operate, 
maintain, market and manage” public facilities.  Id. (emphasis added).  The word “and” is a 
“conjunction connecting words or phrases expressing the idea that the latter is to be added to or 
taken along with the first.”  BLACK’S LAW DICTIONARY 86 (6th ed. 1990).  The legislature’s 
inclusion of the word “and” indicates that an auditorium district is one that performs all of the 
listed functions in the statute.  If the legislature wanted to make it clear that an auditorium could 
choose to only market public facilities, then it could have used the words “and/or,” as it did when 
describing the purposes that auditorium district facilities must serve.  See I.C. § 67-4902.  
Consequently, we hold that an auditorium district must build, operate, maintain, market, and 
manage a public facility.  An auditorium district cannot simply market existing facilities within 
its borders.   
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The District argues, however, that this literal interpretation of I.C. § 67-4902 “effectively 
deletes” other relevant statutory provisions.  The District argues that this interpretation conflicts 
with I.C. § 67-4912(f), which provides that the auditorium board has the power to “acquire, 
dispose of and encumber real and personal property, and any interest therein, including leases 
and easements within said district.”  It is evident that in order to “build” or “construct” a public 
facility, as contemplated by I.C. § 67-4902, an auditorium district must, of necessity, be 
empowered to acquire some interest in real property.  For this reason, we do not find our 
interpretation of I.C. § 67-4902 to be in conflict with the powers granted to auditorium district 
boards by I.C. § 67-4912(f).  Although the District argues that a literal interpretation of I.C. § 67-
4902 would prevent an auditorium district from purchasing an existing facility because it did not 
“build” the facility, the instant case does not ask this Court to determine whether an auditorium 
district can purchase an existing facility.  We decline to address a hypothetical scenario not at 
issue in this case, as such a discussion would be mere dicta.   
The District also argues that a literal interpretation of I.C. § 67-4902 would contradict 
I.C. § 67-4912(d), which provides that an auditorium board has the following powers: 
Except as otherwise provided in this chapter, to enter into contracts and 
agreements, cooperative and otherwise, affecting the affairs of the district, 
including contracts with the United States of America and any of its agencies or 
instrumentalities, 
and 
contracts 
with 
corporations, 
public 
or 
private, 
municipalities, or governmental subdivisions, and to cooperate with any one (1) 
or more of them in building, erecting, marketing or constructing facilities within 
the district.  Except in cases in which a district will receive aid from a 
governmental agency, purchasing shall be accomplished in accordance with the 
provisions of chapter 28, title 67, Idaho Code.1 
 
(emphasis added).   
I.C. § 67-4912(d) does not contradict I.C. § 67-4902 merely because the former is written 
in the disjunctive.  Rather, the two statutory provisions are clearly complementary:  I.C. § 67-
4902 defines “auditorium or community center district” and I.C. § 67-4912 enumerates the 
powers of the district’s board.  I.C. § 67-4912(f) confers upon an auditorium board the general 
power to contract.  It makes clear that an auditorium board can contract with corporations, 
municipalities, or governmental subdivisions in order to build, erect, market, or construct 
facilities within the district.  In the course of conferring the power to contract, it would have been 
                                                 
1 
We have quoted I.C. § 67-4912(d) as presently codified.  This subsection was amended in 2005.  However, 
the amendments are not material to the issues before this Court on appeal. 
 
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absurd for the Legislature to have used the conjunctive, requiring an auditorium board to enter 
into a contract for both the construction and marketing of a public facility.   
 
Additionally, the District argues that a literal interpretation of I.C. § 67-4902 conflicts 
with I.C. § 67-4912(m), which provides that an auditorium board has the power to “promote any 
functions for said district, provided that said board shall not engage in operations that are 
inconsistent with the purpose of said district; and it shall be the policy of the board not to 
compete with existing facilities and services in the district, wherever practicable.”  The District 
argues that requiring auditorium districts to build new facilities would force auditorium districts 
to compete with existing facilities within the district.  We are not persuaded that this proposition 
is true.  To the contrary, it is evident that the purposes of the auditorium district act, to “serve the 
public need and use” and to “promote the prosperity, security and general welfare” of the 
populace served by an auditorium district, see I.C. § 67-4901, are advanced when an auditorium 
district constructs a public facility to fill a need not being fulfilled by existing facilities.  Thus, an 
auditorium district may build a facility that does not exist in its district, such as a convention 
center.2   
The District also urges this Court to consider I.C. §§ 67-4904 (2) and (3), as they existed 
in 1998 when the District was formed.3  Idaho Code § 67-4904 details the requirements and 
contents of a petition to organize an auditorium district.  Neither party contests the formation of 
the District or suggests that the petition for organization was deficient in any way.  Idaho Code 
§§ 67-4904 (2) and (3) do not define the purposes, powers or functions of an auditorium district; 
rather, they address the requirements of a petition for organization.  We conclude that the 
                                                 
2  
Further, I.C. § 67-4912(m) does not prevent an auditorium district from competing with existing facilities 
in a district.  Rather, the statute provides that an auditorium district should avoid competition wherever practicable. 
 
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As amended in 1998, I.C. § 67-4904 provided, in relevant part, as follows: 
 
The organization of a district shall be initiated by a petition filed in the office of the clerk of the 
court vested with jurisdiction, in a county in which the major part of the real property in the 
proposed district is situated….   
 
 
The petition shall set forth: 
* * * 
 
 
(2) A general description of the facilities to be constructed or marketing programs or 
both. 
 
 
(3) The estimated cost of the proposed facilities or marketing programs or both. 
 
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provisions of I.C. § 67-4904, as codified in 1998, do not reflect a legislative intent to expand the 
purposes or powers of an auditorium district.   
 
Although this Court has previously stated that “[the] legislature has granted broad powers 
to auditorium districts,” and “[t]he board of directors of an auditorium district is likewise granted 
broad powers . . . including exercising ‘all rights and powers necessary or incidental to or 
implied from the specific powers granted,’” those powers are not without limitation.  See 
AmeriTel Inns, Inc. v. Greater Boise Auditorium Dist., 141 Idaho 849, 853, 119 P.3d 624, 628 
(2005) (holding that an auditorium board is not granted the power to use public funds to 
campaign in a contested election).  Today we identify another limit on the power of an 
auditorium district: an auditorium district does not have the power to simply market public 
facilities within its borders.  For this reason, we reverse the judgment of the district court.   
This decision is not a rebuke of the District’s good faith efforts to improve the Pocatello 
and Chubbuck communities.  While the District’s board has clearly acted with only the best 
intentions for the Pocatello and Chubbuck communities, the relevant statutes do not permit us to 
decide this case based on good intentions.  This decision does not have retroactive effect as to 
past activities of the District.  Given the declaratory relief sought by AmeriTel the District will 
be barred from making future expenditures of tax revenues derived under the Auditorium District 
Act in any manner inconsistent with this opinion.   
B. The District was not entitled to an award of attorney fees at the district court level. 
The District has cross-appealed the district court’s denial of its request for an award of 
attorney fees pursuant to I.C. §§ 12-117, 12-121 and 12-123.  As we conclude that the district 
court erred in granting judgment in favor of the District, the District was not entitled to an award 
of attorney fees.    
C. AmeriTel is not entitled to an award of attorney fees on appeal. 
AmeriTel requests an award of attorney fees on appeal pursuant to I.C. § 12-117.  An 
award of attorney fees under this statute is only appropriate “if the court finds that the party 
against whom the judgment is rendered acted without a reasonable basis in fact or law.”  I.C. § 
12-117.  We are unable to conclude that the District has acted without a reasonable basis in fact 
or law, as the issues presented by this appeal are matters of first impression before this Court.  
Therefore, we decline to award AmeriTel attorney fees.   
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IV. CONCLUSION 
We conclude that the District is operating outside its statutory authority under I.C. § 67-
4902.  Accordingly, we reverse the decision of the district court and remand for proceedings 
consistent with this opinion.  We award costs, but not attorney fees, to AmeriTel.   
 
Chief Justice EISMANN, Justice BURDICK, and Justices Pro Tem KIDWELL and 
TINGEY CONCUR.