Title: H20 Environmental v. Farm Supply

State: idaho

Issuer: Idaho Supreme Court (civil)

Document:

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IN THE SUPREME COURT OF THE STATE OF IDAHO 
 
Docket No. 45116 
 
H2O ENVIRONMENTAL, INC., an Idaho 
corporation, 
  
           Plaintiff-Appellant, 
 
v. 
 
FARM SUPPLY DISTRIBUTORS, INC., an 
Oregon corporation, 
  
           Defendant-Respondent. 
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Boise, June 2018 Term 
 
Filed: October 17, 2018 
 
Karel A. Lehrman, Clerk  
 
Appeal from the District Court of the Fourth Judicial District of the State of 
Idaho, Ada County, Hon. Gerald F. Schroeder, Senior District Judge. 
 
The judgment of the district court is reversed and remanded with instructions. 
 
Fisher Rainey Hudson, Boise, for Appellant.  Rebecca A. Rainey argued. 
 
Perkins, Mitchell, Pope & McAllister, LLP, Boise, for Respondent.  Hans A. 
Mitchell argued. 
 
                     _______________________________________________ 
 
HORTON, Justice. 
The underlying dispute in this case involves a commercial transaction between H2O 
Environmental, Inc. (H2O) and Farm Supply Distributors, Inc. (Farm Supply). Following a 
bench trial before the magistrate court, H2O was awarded $7,354.64 for Farm Supply’s breach of 
an express oral contract. The magistrate court subsequently awarded attorney’s fees to H2O 
pursuant to Idaho Code section 12-120(3), but limited its award to the amount in controversy. 
H2O appealed to the district court, claiming that the magistrate court abused its discretion. The 
district court affirmed and awarded attorney’s fees to Farm Supply. H2O timely appealed. We 
reverse and remand with instructions. 
I. 
FACTUAL AND PROCEDURAL BACKGROUND 
Farm Supply employed H2O to clean up a fuel spill at a gas station in Boise in July of 
2014. H2O billed Farm Supply $45,828.19 for the work performed. Farm Supply paid 
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$38,473.55, leaving a balance due of $7,354.64. H2O filed suit to recover the disputed amount. 
Farm Supply disputed whether a contract had been formed between H2O and Farm Supply and 
whether H2O’s charges were reasonable. Near the end of the trial, H2O inquired: “Should we 
talk about a schedule for submitting things to [the magistrate court] in the way of closing?” The 
magistrate court stated in response: “The only reason I’m hesitating is because you’ve already 
spent so many hours on this case that, as I indicated, it’s going to be hard for me to think there’s 
reasonableness on the attorney fees over $7,000.” 
H2O prevailed at trial. The magistrate court awarded H2O the disputed amount of 
$7,354.64 and pre-judgment interest of $597.32. H2O subsequently filed a memorandum of costs 
and fees in support of its request for an award of $55,924.46. Attorney’s fees accounted for 
$53,403.50 of this sum. Farm Supply opposed H2O’s request for costs and fees. The magistrate 
court addressed the issue of costs and fees in June of 2016. The magistrate court held that H2O 
was the prevailing party in the litigation. The magistrate court then observed: 
What I don’t find is that it needed all that time and all the attorney’s fees that 
[H2O] requested. 
And I think [Farm Supply] did a very good job of going through all the 
factors that I, as a judge, am supposed to look at in terms of determining what are 
reasonable fees. And I agree, this was not a hard factual case. . . . It was not a hard 
legal case. I mean, you had some legal arguments, but . . . this was not about some 
remote legal theor[ies]. It was the facts and putting them on. 
And thus, I am going to basically adopt [Farm Supply’s] memo on terms 
of attorney’s fees and I will award some fees. I will award the amount in dispute. 
And I will award the mandatory costs, but I am not going to award more. 
. . . . 
And I think as I said before, I feel—I regret that somehow I was not more 
helpful in getting this resolved. I sort of feel like I have a bit of a record of doing 
that, of getting cases resolved before they go to trial. And in my court they don’t 
turn into attorney fees cases. You were a rare one that did. But I do not find a 
basis to award more than what was in dispute. And if [Farm Supply] will prepare 
me an order along those lines, I will sign it. 
 
H2O appealed to the district court asserting that the magistrate court abused its discretion 
by limiting the award of attorney’s fees to the amount in controversy. The district court held that 
the magistrate court had not predetermined the amount of attorney’s fees it would award, noting 
that the magistrate court considered all of the factors required under Idaho Rule of Civil 
Procedure 54(e)(3). Thus, the district court affirmed the magistrate court’s award of attorney’s 
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fees. The district court then awarded Farm Supply its attorney’s fees on appeal pursuant to Idaho 
Code section 12-120(3). H2O timely appealed. 
II. STANDARD OF REVIEW 
  
When reviewing the decision of a district court sitting in its capacity as an appellate 
court: 
The Supreme Court reviews the trial court (magistrate) record to determine 
whether there is substantial and competent evidence to support the magistrate’s 
findings of fact and whether the magistrate’s conclusions of law follow from 
those findings. If those findings are so supported and the conclusions follow 
therefrom and if the district court affirmed the magistrate’s decision, we affirm 
the district court’s decision as a matter of procedure. 
Bailey v. Bailey, 153 Idaho 526, 529, 284 P.3d 970, 973 (2012) (quoting Losser v. Bradstreet, 
145 Idaho 670, 672, 183 P.3d 758, 760 (2008)).  
The amount of attorney’s fees to be awarded is a decision committed to the discretion of 
the trial court. Id. As we recently clarified, an alleged abuse of discretion is reviewed under a 
four-part test: 
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 choices available to it; and (4) reached 
its decision by the exercise of reason. 
Lunneborg v. My Fun Life, 163 Idaho 856, 864, 421 P.3d 187, 195 (2018). 
III. ANALYSIS 
This appeal presents two issues for our consideration. As a threshold matter, we consider 
Farm Supply’s contention that H2O failed to properly preserve the primary issue on appeal. We 
then consider whether the district court erred when it affirmed the decision of the magistrate 
court. 
A. H2O properly preserved the issue of attorney’s fees for appeal.  
Farm Supply asserts that H2O failed to preserve the issue of attorney’s fees for appeal 
because H2O did not argue in the lower court that the award of attorney’s fees was improperly 
limited to the amount in controversy. Farm Supply also asserts that H2O “failed to support the 
issue [on appeal] with argument applying the cases upon which it relies, to the facts of this case.” 
The district court assumed, without deciding, that H2O’s objections had been properly preserved. 
Farm Supply is correct that this Court “will not consider issues that are raised for the first 
time on appeal,” Parsons v. Mutual of Enumclaw Insurance Co., 143 Idaho 743, 746, 152 P.3d 
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614, 617 (2007) (quoting Murray v. Spalding, 141 Idaho 99, 101, 106 P.3d 425, 427 (2005)), or 
those “that are not supported by propositions of law, authority, or argument.” Id. at 747, 152 P.3d 
at 618 (quoting Callaghan v. Callaghan, 142 Idaho 185, 190, 125 P.3d 1061, 1066 (2005)). 
However, that is not the case here because the issue of an appropriate award of attorney’s fees 
was preserved for appeal and H2O has supported its arguments with citations to pertinent 
authority. 
The issue of attorney’s fees was explicitly raised by H2O and Farm Supply before the 
trial court. H2O submitted a Memorandum in Support of Motion for Costs and Attorney’s Fees 
that addressed each of the factors that a trial court must consider when evaluating an award for 
attorney’s fees under Idaho Rule of Civil Procedure 54(e)(3). Farm Supply submitted a Response 
in Opposition to Plaintiff’s Motion for Costs and Fees that included its own analysis of the Rule 
54(e)(3) factors. It is beyond dispute that the issue of an appropriate award of attorney’s fees was 
the issue that the trial court was asked to decide.  
Farm Supply asserts that “H2O failed to raise, and so preserve, the issue [of the 
magistrate court improperly limited the fee award to the amount in controversy] in the lower 
courts.”  This assertion is only half true. H2O did not advance this argument before the 
magistrate court, but one section of its brief before the district court was captioned: “The 
Magistrate Court abused its discretion by predetermining that reasonable attorney fees could not 
exceed the amount in controversy.” Clearly, the issue was presented to the district court. 
Therefore, we consider only Farm Supply’s contention that H2O was required to raise this 
specific argument before the magistrate court.  
We addressed this issue in In re Guardianship of Doe, 157 Idaho 750, 339 P.3d 1154 
(2014). There, Mother had petitioned for termination of a guardianship and sought visitation with 
her children. Id. at 752–53, 339 P.3d at 1156–57. The magistrate court denied the motion to 
terminate the guardianship, granted Mother visitation, and summarily ordered that no costs or 
fees would be awarded. Id. at 753, 339 P.3d at 1157. Guardians appealed the order denying 
attorney’s fees. Discussing whether the appellant was required to address the basis of the 
magistrate court’s decision, we stated: 
In its order denying Mother’s motion, the magistrate court wrote that “the 
parties shall bear their own attorney’s fees and costs.” Guardians argued to the 
district court that the magistrate court erred by summarily denying attorney fees. 
The district court held that the issue was improperly raised for the first time on 
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appeal because they did not seek attorney fees before the magistrate, file any 
objection to the denial, or file a motion to reconsider it. In so ruling, the district 
court erred. 
In its order, the magistrate court sua sponte ruled “that the parties shall 
bear their own attorney’s fees and costs.” Prior to the issuance of the court’s 
order, neither party could have known what the court’s ruling would be and would 
have no basis for claiming to be the prevailing party. Once the court ruled, 
Guardians did not have to file a memorandum of costs or object in order to 
preserve the issue for appeal. Oakes v. Boise Heart Clinic Physicians, PLLC, 152 
Idaho 540, 544, 272 P.3d 512, 516 (2012). Likewise, Guardians did not have to 
file a motion for reconsideration in order to preserve the issue on appeal. Parkside 
Sch., Inc. v. Bronco Elite Arts & Athletics, LLC, 145 Idaho 176, 179, 177 P.3d 
390, 393 (2008). Therefore, the district court erred in failing to vacate the 
magistrate court’s sua sponte ruling that neither party was entitled to an award of 
court costs or attorney fees.  
Id. at 757–58, 330 P.3d at 1161–62. As was the case in Guardianship of Doe, H2O could not 
have argued that the magistrate court’s award of attorney’s fees was arbitrary or predetermined 
until the magistrate court rendered its decision. By raising this claim before the district court, 
H2O properly preserved this issue for appeal. 
B. The district court erred when it affirmed the magistrate court’s award of attorney’s 
fees. 
H2O contends that the district court erred when it affirmed the magistrate court’s award 
of attorney’s fees because the magistrate court abused its discretion when it improperly limited 
the award to the amount in controversy. We hold that the district court erred when it affirmed the 
magistrate court’s arbitrary limitation on the award of attorney’s fees to the amount in 
controversy. 
The prevailing party in a lawsuit arising from a commercial transaction “shall be allowed 
a reasonable attorney’s fee to be set by the court . . . .” I.C. § 12-120(3).  “[T]he calculation of a 
reasonable attorney fee is within the trial court’s discretion.” Bailey v. Bailey, 153 Idaho 526, 
529, 284 P.3d 970, 973 (2012). When awarding attorney’s fees, the trial court must consider the 
following factors: 
A. the time and labor required; 
B. the novelty and difficulty of the questions; 
C. the skill requisite to perform the legal service properly and the experience and 
ability of the attorney in the particular field of law; 
D. the prevailing charges for like work; 
E. whether the fee is fixed or contingent; 
F. the time limitations imposed by the client or the circumstances of the case; 
G. the amount involved and the results obtained; 
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H. the undesirability of the case; 
I. the nature and length of the professional relationship with the client; 
J. awards in similar cases; 
K. the reasonable cost of automated legal research (Computer Assisted Legal 
Research), if the court finds it was reasonably necessary in preparing a party’s 
case; [and,] 
L. any other factor which the court deems appropriate in the particular case. 
I.R.C.P. 54(e)(3). “When awarding attorney’s fees, a [trial] court must consider the applicable 
factors set forth in I.R.C.P. 54(e)(3) and may consider any other factor that the court deems 
appropriate.” Johannsen v. Utterbeck, 146 Idaho 423, 432, 196 P.3d 341, 350 (2008) (footnote 
omitted) (quoting Lee v. Nickerson, 146 Idaho 5, 10–11, 189 P.3d 467, 472–73 (2008)). “Though 
it is not necessary for the court to address all of the I.R.C.P. 54(e)(3) factors in writing, the 
record must clearly indicate the court considered all of the factors.” Id. at 432–33, 196 P.3d at 
350–51. “[A]lthough the time and labor actually expended by an attorney is to be considered, it 
is also to be evaluated under a standard of reasonableness.” Med. Recovery Servs., LLC v. Jones, 
145 Idaho 106, 110, 175, P.3d 795, 799 (Ct. App. 2007). 
 
As previously noted, when this Court reviews an alleged abuse of discretion by a trial 
court, it determines if the lower 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 choices available to it; and (4) reached its decision by 
the exercise of reason. 
Lunneborg v. My Fun Life, 163 Idaho 856, 864, 421 P.3d 187, 195 (2018). 
It is undisputed that the trial court perceived that the issue before it was one of discretion. 
It is also undisputed that the trial court acted within the outer boundaries of its discretion. The 
question presented by this appeal is whether the trial court acted consistently with the applicable 
legal standards and reached its decision by an exercise of reason. In this instance, the third prong 
of the abuse of discretion inquiry is closely related to the fourth prong because the applicable 
legal standard compels the trial court to award a reasonable attorney fee after considering the 
Idaho Rule of Civil Procedure 54(e)(3) factors. Stated differently, the applicable overarching 
legal standard here is one of reasonableness. Consequently, we focus our analysis on the 
interrelated third and fourth prongs of the abuse of discretion inquiry. 
In Johannsen, this Court held that the trial court did not reach its decision regarding 
attorney’s fees through an exercise of reason because it relied primarily on conjecture. 146 Idaho 
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at 433, 196 P.3d at 351. There, the trial court referred to the Idaho Rule of Civil Procedure 
54(e)(3) factors and stated: “I’ve reviewed all of the subparts to Rule 54(e) in calculating [the 
attorney’s fee] amount. I’ve spent hours and hours reading this over . . . .” Id. However, the trial 
court relied on its view that the case was “about a $10,000 project” and awarded attorney’s fees 
accordingly. Id. We observed that it was “unclear why the [trial] court determined that the 
attorney’s fees submitted by Respondent were excessive, other than the judge’s vague statement 
that he knows what is excessive and what is reasonable based on his litigation experience.” Id. 
“In determining the case to be ‘about a $10,000 project,’ the [trial] court seem[ed] to pull the 
award of attorney’s fees out of thin air.” Id. Despite the trial court’s explicit reference to its 
consideration of the Rule 54(e)(3) factors, we ruled that the award of attorney’s fees was 
arbitrary and based on conjecture. Id. Thus, this Court held that the trial court’s award of $10,000 
in attorney’s fees was not the product of an exercise of reason. Id. 
 
Here, there is nothing in the record which explains the relationship between the 
magistrate court’s evaluation of the Idaho Rule of Civil Procedure 54(e)(3) factors and its 
decision regarding the amount to award for attorney’s fees. It is not enough for a trial court to 
acknowledge the existence of the Rule 54(e)(3) factors; rather, it must appear that there is a 
reasoned application of those factors in the trial court’s decision regarding the amount of 
attorney’s fees to be awarded. Stated differently, in the absence of a clear explanation from the 
trial court, we will find an abuse of discretion when a trial court acknowledges the governing 
legal standard and arrives at a decision that appears to be incongruent with the application of that 
standard.  
Ultimately, the abuse of discretion standard permits an appellate court to correct the 
arbitrary exercise of judicial power. As was the case in Johannsen, the trial court’s limitation of 
the award of attorney’s fees to the amount in controversy represented an arbitrary action which 
was inconsistent with the requirements of Rule 54(e)(3) and did not reflect a reasoned 
application of the Rule. Therefore, we hold that the district court erred when it upheld the 
magistrate court’s decision.  
Upon determination that a trial court has abused its discretion, “the appellate remedy 
ordinarily is not to usurp the judge’s authority by exercising such discretion ourselves.”  Evans v. 
Sawtooth Partners, 111 Idaho 381, 387, 723 P.2d 925, 931 (Ct. App. 1986)). Rather, the 
appropriate remedy “is to remand the case for reconsideration in light of the correct legal 
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standard.” Id. Therefore, we reverse the district court’s decision, vacate the district court’s award 
of attorney’s fees to Farm Supply, and remand with instructions to the district court to determine 
an appropriate award of attorney’s fees to H2O incurred on intermediate appeal. The district 
court is further instructed to vacate the magistrate court’s award of attorney’s fees and to remand 
this matter to the magistrate court for a determination of a reasonable attorney’s fee to H2O 
consistent with the requirements of Rule 54(e)(3).  
C. H2O is entitled to attorney’s fees on appeal.  
The prevailing party in a lawsuit arising from a commercial transaction is entitled to an 
award of attorney’s fees on appeal. Bryan Trucking, Inc. v. Gier, 160 Idaho 422, 427, 374 P.3d 
585, 590 (2016); I.C. § 12–120(3). This lawsuit arises from a commercial transaction. We 
therefore award attorney’s fees to H2O as the prevailing party on appeal.  
IV. CONCLUSION 
The magistrate court’s decision to cap the award of attorney’s fees at the amount in 
dispute was an abuse of discretion. Therefore, we reverse the district court’s decision affirming 
the magistrate court, vacate the district court’s award of attorney’s fees to Farm Supply, and 
remand with instructions to the district court to determine an appropriate award of attorney’s fees 
to H2O incurred on intermediate appeal. We further instruct the district court to vacate the 
magistrate court’s award of attorney’s fees and to remand this action to the magistrate court for a 
determination of a reasonable attorney’s fee consistent with the requirements of Rule 54(e)(3). 
We award attorney’s fees and costs on appeal to H2O. 
 
Justice BRODY and Justice Pro Tem SOUTHWORTH CONCUR. 
 
BURDICK, Chief Justice, concurring.            
 
I concur in the majority opinion, but write separately to express my concern that this case 
is a great example of what is wrong with the judicial system today and what will lead to its 
demise in the future. The evasive and obstructive tactics by Farm Supply’s insurance company, 
Zurich, have resulted in this simple case being ensnared in litigation for over four years. I also 
write to emphasize that, on remand, the entirety of this course of litigation be taken into account 
in determining a reasonable attorney fee award for H2O. Put simply, this case has been in 
litigation for over four years, all in an attempt for H2O to recover the sum of $7,354.65 owed to 
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it by Farm Supply via its insurance company, Zurich, for work that H2O satisfactorily completed 
in 2014. Rather than simply pay H2O for the work that was contracted for—work that Farm 
Supply itself has never disputed as unreasonable or unsatisfactory—the record is replete with 
instances of counsel for Farm Supply, because of the actions of Zurich, engaging in practices that 
hindered and prolonged the course of litigation. The record reveals the following timeline and 
procedural history:  
On July 12, 2014, fuel that was being transported by one of Farm Supply’s trucks spilled 
at a gas station in Boise. Craig Willis, the president and CEO of Farm Supply was notified of the 
spill and he subsequently called H2O, who dispatched a team to go clean the spill. Mr. Willis 
testified at trial that Farm Supply hired H2O and that he requested H2O come clean up the spill. 
H2O immediately responded and began performing the requested work. Mr. Willis testified that 
H2O did a “tremendous job.” On July 18, 2014, H2O emailed the first invoice and supporting 
documentation to Farm Supply for work completed July 12 through July 15. No objection was 
made, and H2O continued with cleanup efforts. On July 30, Christopher Miceli, a representative 
from Vertex,—a company hired by Zurich to review H2O’s invoice—emailed H2O a 
spreadsheet objecting to certain charges in the first invoice based on rates “recommended” by 
Vertex. On August 11, 2014, H2O emailed the second invoice to Farm Supply containing all 
remaining charges for the cleanup services performed by H2O. On August 27, Zurich sent a 
check to H2O on behalf of Farm Supply for $38,473.55, which was $7,354.64 less than the 
amount H2O had billed Farm Supply in the two invoices ($45,828.19). On October 23, Vertex 
sent a spreadsheet to H2O’s counsel with recommended lower charges for the second invoice. 
Obviously these lower charges were not the agreed upon price between the contracting parties. 
Thus, the amount of $7,354.64 was disputed as unreasonable.  
Prior to filing a complaint for the unpaid amount owed, H2O’s counsel attempted to work 
with Zurich to get paid and avoid litigation for over fifty days via demand letters, phone calls, 
and emails. When those efforts were unsuccessful, H2O filed suit seeking to recover the amount 
owed to them and attorney fees. H2O incurred significant attorney fees in responding to Farm 
Supply’s written discovery. H2O only sought discovery relating to one central issue—what did 
Farm Supply rely on in determining H2O’s charged rates were unreasonable. H2O sought to gain 
this information through a 30(b)(6) deposition. Farm Supply opposed the 30(b)(6) deposition on 
several grounds. Counsel for Farm Supply, with little to no reasoning, first contended that the 
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topic “invades the attorney-client and work product privileges.” The central issue to the case was 
why Farm Supply thought H2O’s rates were unreasonable; it is unclear why or how this topic is 
work product or privileged information. See Skelton v. Spencer, 98 Idaho 417, 420, 565 P.2d 
1374, 1377 (1977) (“This Court has . . . recognized that the attorney-client privilege is a 
defensive shield and not an offensive sword.”).  
And, interestingly, Farm Supply opposed the deposition in part because “Farm Supply 
has no knowledge regarding the reasonableness of the amount charged by [H2O] for fuel 
remediation services. . . . This information is not known or reasonably available to Farm 
Supply[.]” However, in its answer, Farm Supply contended that any payment to H2O would be 
unjust enrichment because H2O “has been fully compensated for the reasonable value of goods 
or services provided.” Thus, attorneys for Farm Supply contended on one hand that H2O had 
been paid what it was reasonably owed, and on the other hand, contended it could not be deposed 
because it had no knowledge of what a reasonable charge would be. This inconsistency is one of 
many examples of Farm Supply’s attorneys giving H2O the run-around and prolonging the 
course of litigation. See Idaho R. Professional Conduct 3.2 (“A lawyer shall make reasonable 
efforts to expedite litigation consistent with the interests of the client.”).   
After several communications back and forth, an agreement was finally reached that 
H2O’s counsel would need to travel to Enterprise, Oregon, to conduct the deposition. Counsel 
for Farm Supply assured H2O it would select a designee that would testify to the topics set out in 
H2O’s deposition notice, i.e., any information as to why the amount charged by H2O was 
unreasonable. H2O incurred significant legal fees related to the preparation, travel, and taking of 
this deposition. However, despite Farm Supply’s assurances, the two deponents appointed by 
Farm Supply did not provide any testimony regarding the reasonable value of H2O’s services. 
Instead, Mr. Willis stated he had no knowledge of environmental remediation services, no 
knowledge of the value of such services, and that he had no reason to believe H2O’s charges 
were unreasonable other than the correspondence sent to his office. The other deponent selected 
by Farm Supply, Carol Ward, was asked, “Do you have any knowledge, whatsoever, of the 
reasonableness of any of the charges that H2O charged Farm supply of its services?” to which 
she answered, “No.” She went on to say, “I know nothing about environmental cleanup.” Thus, 
Farm Supply’s counsel required H2O’s counsel to travel to Enterprise, Oregon, to depose people 
with no knowledge of the information H2O sought in the deposition notice. This fool’s errand 
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that Farm Supply sent H2O’s counsel on was a waste of time and resources, and runs afoul of 
Idaho Rule of Civil Procedure 30(b)(6). See I.R.C.P. 30(b)(6) (“The persons designated must 
testify about information known or reasonably available to the organization.”). Here, while 
information regarding the reasonableness of H2O’s rates was reasonably available to Farm 
Supply via Mr. Miceli’s opinion, Mr. Willis and Ms. Ward did not testify to such. The tactics 
used by Farm Supply to avoid complying with the 30(b)(6) deposition are demonstrative of the 
problematic evasive litigation tactics that result in drawn-out, arduous litigation that generates 
exorbitant attorney fee amounts.  
Of note, Farm Supply did not designate Mr. Miceli for the 30(b)(6) deposition, even 
though he prepared the spreadsheet that Farm Supply relied on to argue H2O’s rates as 
unreasonable. In fact, Farm Supply did not even disclose Mr. Miceli as an expert until the last 
day to conduct discovery, which effectively allowed Farm Supply to avoid having Mr. Miceli 
deposed. Instead, Farm Supply waited to disclose Mr. Miceli until counsel for H2O had already 
traveled to Enterprise for depositions, had already filed a motion in limine to exclude Mr. 
Miceli’s testimony because he had not been disclosed, and until after H2O was out of time to 
depose Mr. Miceli. See Profits Plus Capital Mgmt., LLC v. Podesta, 156 Idaho 873, 887, 332 
P.3d 785, 799 (2014) (referencing a Montana case admonishing the “blatant and systemic abuse” 
of the discovery process where the defense concealed evidence “until the eve of trial”). While the 
court did ultimately allow H2O to depose Mr. Miceli, it granted them a one hour deposition to 
occur the day before trial. Here again, Farm Supply’s attorneys engaged in run-around tactics to 
avoid having their expert disclosed and deposed.  
On October 21, 2015, the parties engaged in mediation after Farm Supply had moved to 
compel mediation. Two days after mediation, Farm Supply made an offer of judgment for the 
$7,354.65 it owed H2O. However, this offer contended to be inclusive of legal fees, but did not 
account for the fact that H2O had incurred $19,616.78 in attorney fees and costs in attempting to 
get the money owed to it by Farm Supply. Thus, the mediation attempt failed and the case 
continued to trial.    
At trial, Farm Supply relied solely on Mr. Miceli’s opinion as its basis for contending 
H2O’s rates as unreasonable. Yet, according to the trial court, Mr. Miceli’s testimony was “not 
probative and was not credible.” Mr. Miceli testified as to what he relied upon in determining 
H2O’s rates were unreasonable. The general theme of his testimony was that he relied on rate 
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sheets from companies in cities that Mr. Miceli was unfamiliar with, from years other than 2014, 
for different services, and for non-emergency services. For example, Mr. Miceli testified that he 
relied upon a rate sheet from a company in Louisiana that does not do business in Boise. He 
stated that he did not know if that rate sheet was even applicable in 2014. Mr. Miceli also 
testified he relied on a rate sheet from a company with offices in Philomath and Grants Pass 
Oregon, but stated he did not know where either city was or what distance the cities were from 
Boise. Mr. Miceli also based his opinion on a rate sheet from a company in Boise, but admitted 
he did not know whether that company’s rate sheet included a crew truck with a lift gate, which 
can affect pricing. And, he admitted, the rate sheet was not for 2014 and was not for emergency 
services. Mr. Miceli testified that he also used a rate sheet from a company in Wilsonville, 
Oregon, but that he did not know where that was, what year the rate sheet was for, and did not 
know if the rate sheet was for emergency services. Also in Mr. Miceli’s spreadsheet was a 
reduction of the project manager’s hours by 15% of what H2O billed. At trial, Mr. Miceli stated 
he had no reason for his formula of reducing those hours. Rather, he relied on his experience in 
forming that conclusion. The trial court best summarized Mr. Miceli’s problematic testimony 
stating: 
 Farm Supply produced only the testimony of Mr. Miceli to refute H2O’s 
claims regarding the reasonableness of the rates H2O charged in Boise in 2014. 
However, Mr. Miceli demonstrated absolutely no knowledge of the 2014 Boise 
Market. He attempted to rely on rate sheets from companies based in locations 
with no proximity to Boise. For several companies, he did not know the location 
of the city from which they operated. He also used rate sheets from years other 
than 2014 and was uncertain in some cases whether he was using rates that were 
emergency response or scheduled work.  
Thus, the trial court found Mr. Miceli not probative and not credible.  
I note, Farm Supply itself did not dispute the scope or quality of work performed by 
H2O. In fact, Farm Supply itself has never disputed the rates charged by H2O. At trial, Mr. 
Willis was asked, “And in this particular case, you don’t have any knowledge or opinion as to 
whether the rates that were charged to your company by H2O are reasonable?” to which Mr. 
Willis responded, “No.” Farm Supply has never explained why it believed the charges to be 
unreasonable. Rather, only Farm Supply’s insurance company, Zurich, has contended the rates 
charged by H2O were unreasonable, thus prompting Farm Supply to engage in this litigation. 
Yet, the only evidence Zurich has relied on in contesting H2O’s rates is that of Mr. Miceli, which 
was “not probative and was not credible.”  
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In sum, this case centered on whether or not H2O’s charges for cleaning up Farm 
Supply’s fuel spill were reasonable. H2O repeatedly sought to find out why Farm Supply thought 
H2O’s rates were not reasonable, but Farm Supply would not answer this question, effectively 
refusing to pay its bill and refusing to say why. Instead, Farm Supply spent years in litigation 
evading answering why it believed H2O’s rates were not reasonable. Eventually, when Farm 
Supply was required to put on evidence at trial, the only evidence it produced in support of its 
argument that H2O’s rates were unreasonable was not probative and not credible. And, 
unsurprisingly, H2O won at trial, but not until it had accrued significant attorney fees after years 
of litigation. Limiting H2O’s recovery to the amount in controversy is especially problematic in 
this case, where a significant portion of the fees were accrued because Zurich was evading 
paying H2O and prolonging litigation. Because I find the actions of counsel for Farm Supply, via 
Zurich, to be obstructive and to have drawn out this litigation, I emphasize the entire course of 
this litigation be taken into account when calculating H2O’s attorney fee award. See Michalk v. 
Michalk, 148 Idaho 224, 235, 220 P.3d 580, 591 (2009) (in determining whether to award 
attorney fees, the “entire course of the litigation must be taken into account”).  
We, in this business, dismiss some smaller cases as “just fighting over attorney fees” and 
in so doing denigrate the efforts of litigants with smaller claims or defenses. In my own mind, I 
know as a trial judge, I would be looking at sanctions for this frivolous defense and obnoxious 
discovery abuses. For the reasons discussed above, I concur.  
Justice BEVAN CONCURS.