Title: Frank J. Fazzio, Jr. v. Edward J. Mason Appeal from decision to award specific performance

State: idaho

Issuer: Idaho Supreme Court (civil)

Document:

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IN THE SUPREME COURT OF THE STATE OF IDAHO   
Docket No. 36068 
 
FRANK J. FAZZIO, JR., and CINDY ANN 
FAZZIO, husband and wife, and IDAHO 
LIVESTOCK COMPANY, LLC, 
 
       Plaintiffs-Respondents, 
 
v. 
 
EDWARD J. MASON, an individual, 
 
       Defendant-Appellant. 
 
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Boise, February 2011 Term 
 
2011 Opinion No. 41 
 
Filed:  March 21, 2011 
 
Stephen W. Kenyon, Clerk 
 
Appeal from the District Court of the Fourth Judicial District, State of Idaho, Ada 
County.  Hon. Kathryn A. Sticklen and Hon. Richard D. Greenwood, District 
Judge. 
Judgment of the district court ordering specific performance, affirmed.  Costs to 
Respondents. 
Hawley, Troxell, Ennis & Hawley, Boise, for appellant.  D. John Ashby and 
Merlyn W. Clark argued. 
Derek A. Pica, PLLC, Boise, for respondents.  Derek A. Pica argued. 
__________________________________ 
BURDICK, Justice 
 
Appellant Edward J. Mason (Mason) breached two agreements to purchase farmland (the 
“Properties”) from Respondents.  Mason admits that he breached the agreements but appeals the 
district court’s decision to award specific performance to Respondents.  Mason argues that 
specific performance is not an appropriate remedy in this case because he cannot comply with 
the award, contract damages provide an adequate remedy at law and specific performance results 
in a windfall for Respondents.  We affirm. 
I.  FACTUAL AND PROCEDURAL BACKGROUND 
On April 12, 2006, Mason entered into an agreement to purchase a parcel of real property 
from Respondents Frank J. Fazzio, Jr. and Cindy Ann Fazzio (Mr. and Mrs. Fazzio) for the 
 
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purchase price of $1,530,000.  On the same day, Mason entered into an agreement to purchase 
two parcels of real property from Respondent Idaho Livestock Company, LLC (Idaho Livestock) 
for the purchase price of $2,000,000.  Mr. Fazzio, as manager, acted on behalf of Idaho 
Livestock in entering into the agreement with Mason.  Pursuant to both purchase agreements, the 
closing date was February 26, 2007. 
While the agreements were pending, Mason had the Properties annexed to the City of 
Kuna (Kuna).  Mason also caused the Properties to be joined into the Kuna sewer local 
improvement district (LID), causing an encumbrance in the approximate amount of $425,000.  
Mason failed to close on the Properties on February 26, 2007.  Mr. and Mrs. Fazzio and Idaho 
Livestock (collectively hereinafter the “Fazzios”) filed for arbitration with the American 
Arbitration Association seeking specific performance.  On September 12, 2007, in order to avoid 
arbitration, Mason and the Fazzios entered into settlement agreements whereby Mason would 
still purchase the Properties but at a later date.  Pursuant to the settlement agreements, if Kuna 
approved Mason’s preliminary plat, Mason was required to close on the Properties by December 
21, 2007.  Neither the original contracts nor the settlement agreements were contingent upon 
Mason obtaining financing.  Both settlement agreements provide:  
Specific Performance.  Should either party breach or violate this Settlement 
Agreement, the non-offending party shall have a remedy of specific performance 
and may apply to the district court of the county of Ada, state of Idaho to have 
this Settlement Agreement enforced by a judgment for specific performance. 
Kuna approved Mason’s preliminary plat prior to December 21, 2007; however, Mason again 
failed to close on the Properties.   
 
On January 22, 2008, the Fazzios filed an Application for Entry of Arbitration Award, Or 
In the Alternative, Complaint for Breach of Contract.  The Fazzios moved for summary 
judgment, asking the district court to either confirm their settlement as an arbitration award or to 
grant them summary judgment for breach of contract.  The Fazzios requested specific 
performance.  On December 30, 2008, the district court granted the motion for summary 
judgment.  The district court declined to confirm the settlement agreement as an arbitration 
award, but it ordered specific performance under the breach of contract claim, finding that there 
was good reason to enforce the contract by specific performance rather than by the legal remedy 
of contract damages.  In support of its order for specific performance, the district court noted that 
the Properties are unique, that the Properties were significantly and materially altered when 
 
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Mason caused them to be annexed to Kuna, that the contract was for a cash sale, and that 
performance is not so unlikely or impossible as to render the order futile. 
 
On January 20, 2009, Mason filed the Notice of Appeal.  On March 23, 2009, this Court 
dismissed the appeal as premature, because a final judgment had not yet been issued.  On April 
3, 2009, the Fazzios filed a Motion for Entry of Judgment.  On April 7, 2009, Mason submitted a 
Motion for Reconsideration.  On May 28, 2009, the district court denied the Motion for 
Reconsideration.  
On May 28, 2009, the district court entered a Judgment, and a Corrected Judgment on 
October 5, 2009, in favor of the Fazzios on the ground that Mason failed to pay the balance due 
under the settlement agreements consistent with the December 30, 2008 court order granting 
summary judgment.  Judgment was entered against Mason in favor of the Mr. and Mrs. Fazzio in 
the principal amount of $1,530,000, plus $412,471.08 interest, and in favor of Idaho Livestock in 
the principal amount of $2,000,000, plus $539,177.66 interest.  The Fazzios were also granted 
vendor’s liens to the Properties, which are to be enforceable through foreclosure sale pursuant to 
Chapter 1, Title 6, Idaho Code.  Upon satisfaction of the judgment, and so long as the property 
has not been sold in satisfaction of the vendor’s lien, Mason is entitled to transfer of title of the 
Properties subject to the requirement that he reimburse the Fazzios for any sums actually paid for 
charges and assessments of the Kuna LID previously paid by the Fazzios. 
On September 17, 2009, the district court entered the Supplemental Judgment for 
Attorney’s Fees and Costs, awarding the Fazzios attorney fees and costs pursuant to I.C. § 12-
120(3) in the amount of $36,999.50.  The district court disallowed $12,015 in attorney fees 
claimed by the Fazzios on the ground that these fees were to be addressed by this Court because 
they were incurred while defending against Mason’s premature appeal to this Court. 
On October 13, 2009, Mason filed the Amended Notice of Appeal.   
II.  STANDARD OF REVIEW 
This Court set forth the standard of review for an appeal from an order of summary 
judgment in Infanger v. City of Salmon as follows: 
In an appeal from an order of summary judgment, the Court’s standard of 
review is the same as the standard used by the trial court in ruling on a motion for 
summary judgment.  All disputed facts are to be construed liberally in favor of the 
non-moving party, and all reasonable inferences that can be drawn from the 
record are to be drawn in favor of the non-moving party.  Summary judgment is 
appropriate if the pleadings, depositions, and admissions on file, together with the 
 
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affidavits, if any, show that there is no genuine issue as to any material fact and 
that the moving party is entitled to a judgment as a matter of law.  If there is no 
genuine issue of material fact, only a question of law remains, over which this 
Court exercises free review. 
137 Idaho 45, 46–47, 44 P.3d 1100, 1101–02 (2002) (internal citations omitted). 
In P.O. Ventures, Inc. v. Loucks Family Irrevocable Trust, this Court stated: 
Specific performance is an extraordinary remedy that can provide relief 
when legal remedies are inadequate.  The inadequacy of remedies at law is 
presumed in an action for breach of a real estate purchase and sale agreement due 
to the perceived uniqueness of land.  The decision to grant specific performance is 
a matter within the district court’s discretion.  When making its decision the court 
must balance the equities between the parties to determine whether specific 
performance is appropriate. 
144 Idaho 233, 237, 159 P.3d 870, 874 (2007) (internal citations omitted).  “A trial court does 
not abuse its discretion if it (1) recognizes the issue as one of discretion, (2) acts within the 
boundaries of its discretion and applies the applicable legal standards, and (3) reaches the 
decision through an exercise of reason.”  Johannsen v. Utterbeck, 146 Idaho 423, 429, 196 P.3d 
341, 347 (2008).   
III.  ANALYSIS 
A.  The district court did not abuse its discretion in awarding specific performance. 
Mason sets forth three grounds upon which he argues that the district abused its 
discretion in awarding specific performance.  First, Mason argues the district court applied the 
wrong legal principle by failing to recognize or apply the equitable rule that a court should not 
order an equitable remedy which is not feasible.  Second, he argues that damages are an adequate 
remedy, making specific performance inappropriate.  Third, he argues that specific performance 
results in a windfall for the Fazzios.  The Fazzios argue that the district court acted within its 
discretion in awarding specific performance and that the settlement agreements explicitly 
provide for specific performance.  Mason’s arguments are addressed in turn. 
1.  Impossibility of performance. 
 
According to Mason, it is a “well-established rule that a court should not order an 
equitable remedy, including specific performance, which is not feasible.”  Mason asserts that it is 
undisputed that he does not have the approximately $3.5 million needed to close on the 
Properties, and therefore, the award of specific performance is futile.  Mason argues that when 
the district court was presented with this argument, it mistakenly analyzed a different legal 
 
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doctrine—the defense of impossibility of performance—despite Mason’s efforts to explain the 
difference between the two doctrines.   
Mason is correct that the defense of impossibility of performance is distinct from the 
various equitable doctrines which concern whether an award of specific performance is 
appropriate.  The defense of impossibility is a complete defense that excuses the defendant from 
performing.  See Twin Harbors Lumber Co. v. Carrico, 92 Idaho 343, 348, 442 P.2d 753, 758 
(1968).  Whereas equitable doctrines that preclude, or warn against granting, equitable relief 
provide no defense for breaching a contract and leave the plaintiff with a remedy at law, such as 
damages.  See, e.g., Suchan v. Rutherford, 90 Idaho 288, 303, 410 P.2d 434, 443 (1966) 
(reversing district court’s order of specific performance and remanding to calculate damages).   
Mason, however, misconstrued the equitable doctrine upon which he relies.  Mason’s 
argument concerns whether specific performance is appropriate where it is difficult or impossible 
for the defendant to comply.  However, Mason first cites the following quote from Anderson v. 
Whipple: “Equity will not enter a decree for specific performance the enforcement of which is not 
practicable or feasible.”  71 Idaho 112, 125, 227 P.2d 351, 359 (1951) (emphasis added) 
(overruled on other grounds by David Steed & Assocs. v. Young, 115 Idaho 247, 766 P.2d 717 
(1988)).  The equitable doctrine cited in Anderson concerns the court’s ability to practically and 
feasibly enforce a remedy of specific performance in the given case, not the defendant’s ability 
to perform.1  Mason has not made an argument concerning the court’s ability to enforce the order 
of specific performance in this case.  Even if Mason had made an argument concerning the 
feasibility of the court’s enforcement, these contracts were for cash sales, and this Court has 
determined that cash sales for land are easily enforceable.  Perron v. Hale, 108 Idaho 578, 583, 
                                                 
1 At issue in Anderson was whether this Court would specifically enforce an oral agreement whereby the 
defendants were to occupy their Mother’s farm property as tenants for life at a reasonable rental rate with title in fee 
upon Mother’s death.  71 Idaho at 117–20, 227 P.2d at 353–55.  This Court noted: “An agreement, which leaves any 
of the material terms or conditions for future determination, cannot be enforced.”  Id. at 125, 227 P.2d at 359.   In 
declining to award specific performance, this Court’s analysis focused on the Court’s ability to enforce the remedy, 
not the defendant’s ability to perform: 
Equity will not enter a decree for specific performance the enforcement of which is not 
practicable or feasible.  These parties have had many disagreements as to what the rent should be 
and since 1946 have been entirely unable to reach any agreement at all.  Under such 
circumstances, to enforce the decree entered, the court must, necessarily, either retain jurisdiction 
for the purpose of determining the reasonable rental each year during the life of the plaintiff, or the 
parties would be required to have the rental determined by jury each year, so long as they remain 
unable to agree.  Such a result is abhorrent to equity.  49 Am. Jur., Specific Performance, secs. 70 
and 72. 
Id. 
 
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701 P.2d 198, 203 (1985) (awarding specific performance of land sale and noting “[t]he 
agreement was for a cash sale which can be easily enforced”).  
More on point, Mason cites Paloukos v. Intermountain Chevrolet Co., 99 Idaho 740, 588 
P.2d 939 (1978).  In Paloukos, the defendant car dealership, Intermountain, was unable to obtain 
the particular truck it promised to order and sell to the plaintiff, Paloukos, because of a product 
shortage.  Id. at 743, 588 P.2d 942.  This Court declined to grant specific performance primarily 
on the ground that damages provided an adequate remedy at law.  Id. at 745, 588 P.2d at 944.  
However, after finding the availability of an adequate remedy at law, this Court added: 
Moreover, the sole remaining defendant in this case, Intermountain, is a dealer, 
not a manufacturer, of automobiles.  Paloukos does not allege that Intermountain 
is in possession of a conforming pickup which it could sell him.  Indeed, the 
record suggests quite the contrary.  It is well established that the courts will not 
order the impossible, such as ordering the seller under a sales contract to sell to 
the buyer that which the seller does not have.  See Moody v. Crane, 34 Idaho 103, 
199 P. 652 (1921); 5A A. Corbin, Contracts § 1170 (1964); 2 Restatement of 
Contracts § 368, illus. 1 (1932).  
Id. at 745–46, 588 P.2d at 944–45 (emphasis added).  While Paloukos is not directly on point 
since it involves a sale of goods and was decided primarily on the ground that there was an 
adequate remedy at law, the case sets forth the general equitable doctrine that a court should not 
order specific performance where it is impossible—not merely impractical—for the defendant to 
comply. 
The district court recognized that Mason did not assert the defense of impossibility of 
performance and recognized that Mason was arguing specific performance would be 
inappropriate given his alleged inability to perform.  The district court stated in its decision: 
Mason does not argue an excuse for breaching the settlement agreement, 
most notably declining to plead impossibility as a defense.  Rather, the parties 
focus on whether the Fazzios are entitled to an award of specific performance.  In 
Mason’s memorandum in opposition, as well as in his accompanying affidavit, he 
explains in detail the specific efforts he has undertaken to obtain financing.  He 
also provides some explanation as to why it would not be prudent for him to 
liquidate his assets to comply with the contractual terms, as the Fazzios have 
suggested. 
Mason argues, however, that when the district court attempted to apply the equitable doctrine of 
impossibility, it mistakenly assessed the facts of this case under the defense of impossibility 
instead of under the equitable doctrine.  Specifically, Mason argues that the district court 
dismissed his impossibility claim upon finding that the impossibility was subjective to him, but 
 
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Mason argues that, unlike the defense of impossibility, the equitable doctrine of impossibility is 
not limited to instances of objective impossibility.   
The Restatement (First) of Contracts § 368 (1932) provides, “specific enforcement will 
not be decreed if the performance sought is impossible”, and explains in Comment A that this 
equitable doctrine of impossibility applies in instances of both subjective and objective 
impossibility.  The district court, on the other hand, relied on Christy v. Pilkinton, 273 S.W.2d 
533 (Ark. 1954), where the Arkansas Supreme Court limited the equitable doctrine of 
impossibility of performance to instances of objective impossibility in a case with facts very 
similar to the facts of this case.  In Christy, the seller of real estate sought specific performance, 
but the buyers put forth evidence showing that they did not have and could not borrow the 
unpaid balance of the purchase price.  Id.  The Arkansas Supreme Court nevertheless awarded 
specific performance and explained: 
Proof of this kind does not establish the type of impossibility that 
constitutes a defense.  There is a familiar distinction between objective 
impossibility, which amounts to saying, “The thing cannot be done,” and 
subjective impossibility—“I cannot do it.”  Rest., Contracts, § 455; Williston on 
Contracts, § 1932.  The latter, which is well illustrated by a promisor’s financial 
inability to pay, does not discharge the contractual duty and is therefore not a bar 
to a decree for specific performance. 
Id.   
 
We agree that a buyer’s financial inability to pay is not a complete bar to specific 
performance in a case involving the breach of an agreement to purchase land.  While the 
defendant’s subjective ability to comply with the award of specific performance is a relevant 
equitable factor to be considered, the district court acted within its discretion in dismissing 
Mason’s impossibility argument.  The district court considered the difficulties Mason faced in 
obtaining financing but concluded “we cannot find that the present case presents a situation 
where performance is so unlikely and impossible that it would render the order futile.”  Mason’s 
affidavits show that he has been unable to obtain financing, despite many attempts to do so, and 
that liquidating his assets to close on the deal may be imprudent, given the current real estate 
market and given that the majority of his assets are real property serving as collateral on bank 
loans for most of which Mason owes more than the appraised property value.  While the 
imprudence of liquidating one’s assets may be a relevant factor in determining whether specific 
performance is appropriate in a given case, imprudence is not impossibility.  Even if Mason had 
 
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no assets that could be liquidated, his inability to obtain financing up to the time of the decision 
does not show impossibility, because he may still be able to obtain financing.  Thus, it was 
within the district court’s discretion, upon considering Mason’s ability to perform, to award 
specific performance. 
 
2.  Adequate remedy at law. 
Mason argues that contract damages (measured by the difference between the contract 
prices and the market values of the Properties on the day Mason breached, plus any 
consequential damages) provide a plain, speedy, adequate and complete remedy.  According to 
Mason, the values of the Properties on the day of breach are readily ascertainable, there is no 
evidence the properties are unique or have deteriorated, and any damages resulting from the 
annexation of the Properties and their being joined to the Kuna LID can be measured and 
included in an award of damages. 
As this Court explained in Perron: 
The general rules of the common law are that: (1) a party is entitled to the 
equitable remedy of specific performance when damages, the legal remedy, are 
inadequate; (2) because of the perceived uniqueness of land, it is presumed that 
damages are inadequate in an action for breach of a land sale contract, and the 
non-breaching party need not make a separate showing of the inadequacy of 
damages; (3) the remedy is equally available to both vendors and purchasers; and 
(4) additionally, the appropriateness of specific performance as relief in a 
particular case lies within the discretion of the trial court.  E.g. Cribbet, Principles 
of the Law of Property, p. 144 (2d ed. 1975); 71 Am.Jur.2d Specific Performance, 
§ 112 (1973); Scogings v. Andreason, 91 Idaho 176, 180, 418 P.2d 273, 277 
(1966).  Notwithstanding these general rules, this Court has denied specific 
performance of a land sale contract when the “reasons assigned by the authorities 
for the rule applied in land contract cases are not convincing when applied to the 
facts of the case . . . .”  [Suchan, 90 Idaho at 295, 410 P.2d at 438] (vendor of 
farm denied specific performance). 
108 Idaho at 582, 701 P.2d at 202. 
In awarding specific performance, the district court explained: “Not only is the real 
property itself inherently unique, the real property was significantly and materially altered by 
Mason in anticipation of the sale by causing it to be annexed into the City of Kuna.”  We agree.  
Mason significantly altered the Properties—which the Fazzios used as farmland—by causing 
them to be annexed in anticipation of developing them, as they are now subject to Kuna’s 
ordinances.  In light of the presumption that damages are inadequate in an action for a breach of 
land sale contract and due to Mason’s alteration of the Properties, it was within the district 
 
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court’s discretion to award specific performance in this case.  See Perron, 108 Idaho at 583, 701 
P.2d at 203 (upholding award for specific performance in case involving breach of land sale 
contract, noting that alteration of property, amongst other factors, “militate[s] for the grant of 
specific performance”). 
3.  Windfall. 
 
Mason argues that specific performance will result in a windfall to the Fazzios.  After 
Mason failed to pay the balance due on the settlement agreements pursuant to the district court’s 
order granting summary judgment, the district court entered a judgment for the contract prices 
plus interest, and granted the Fazzios vendors’ liens on the Properties.  Mason claims that he 
cannot satisfy the judgment and that, therefore, the Properties will be sold at foreclosure sales 
where the Fazzios will be entitled to deficiency judgments pursuant to I.C. § 6-108 for the 
difference between the total judgment and the value of the Properties when sold.  Mason asserts 
that while the real estate market had already declined from the contract date to the date of breach, 
the real estate market has plummeted since then.  Thus, according to Mason, a deficiency 
judgment will be much larger than would be an award of damages, which is measured by the 
difference between the contract price and the value of the properties at the time of breach in 
December 2007 plus any consequential damages.  According to Mason, this results in a windfall 
to the Fazzios.   
 
 “The remedy of specific performance may be invoked where necessary to complete 
justice between the parties.  The object of specific performance is to best effectuate the purpose 
for which the contract is made, and specific performance should be granted upon such terms and 
conditions as justice requires.”  81A C.J.S. Specific Performance § 2 (2011).  In considering 
whether to award specific performance, a court must balance the equities between the parties.  
Fullerton v. Griswold, 142 Idaho 820, 823, 136 P.3d 291, 294 (2006).  While it is presumed that 
remedies at law are inadequate in an action for breach of a real estate purchase and sale 
agreement due to the perceived uniqueness of land, specific performance is an equitable remedy 
and should not be granted when it would be unjust, oppressive or unconscionable.  Kessler v. 
Tortoise Dev., Inc., 134 Idaho 264, 270, 1 P.3d 292, 298 (2000).  
While Mason may be correct that a deficiency judgment would be larger—perhaps much 
larger—than a damages award in this case, this does not mean that specific performance results 
in a windfall for the Fazzios.  After Mason failed to comply with the award of specific 
 
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performance, the district court entered a judgment against Mason for the contract prices plus 
interest, which put the Fazzios precisely in the position they would have been in but for Mason’s 
breach.  The Fazzios are getting nothing more than they would have received had Mason fulfilled 
his obligations under the settlement agreements.  Any difference between a deficiency judgment 
and an award of contract damages is attributable to the decline in the land’s value.  The fact that 
the transactions turned out to be bad deals for Mason is the result of changed conditions in the 
real estate market, which is a risk that Mason, an experienced real estate developer, took when he 
entered into the transactions.   
Furthermore, the settlement agreements contemplated the availability of specific 
performance, stating: “Should either party breach . . . this Settlement Agreement, the non-
offending party shall have a remedy of specific performance and may apply to the district court . 
. . to have this Settlement agreement enforced by a judgment for specific performance.”  A 
contract clause which gives a non-breaching party the right to elect the remedy of specific 
performance does not require a court to award specific performance.  See DiGiuseppe v. Lawler, 
269 S.W.3d 588, 597 (Tex. 2008) (despite specific performance provision in contract, specific 
performance would be awarded only if the general equitable requirements for specific 
performance were met); see also Black v. American Vending Co., 238 S.E.2d 420, 421 (Ga. 
1977) (reaching same conclusion as DiGiuseppe, stating: “Parties cannot by contract compel a 
court of equity to exercise its power in what is really an ordinary case at law.”).  Nevertheless, 
the fact that Mason agreed to the inclusion of this specific performance clause in the settlement 
agreements provides some additional support to finding that specific performance is equitable in 
this case, as the inclusion of the clause shows that specific performance was within 
contemplation of the parties and may have been part of reason the Fazzios entered into the 
settlement agreements and allowed Mason to extend the closing date. 
We hold that it was within the district court’s discretion to award specific performance, 
as specific performance is not unjust, oppressive or unconscionable in this case.   
B. Attorney Fees. 
The Fazzios request attorney fees pursuant to the settlement agreements, I.C. § 12-120(3) 
and I.A.R 41.  Idaho Code § 12-120(3) provides: 
In any civil action to recover on an open account, account stated, note, bill, 
negotiable instrument, guaranty, or contract relating to the purchase or sale of 
goods, wares, merchandise, or services and in any commercial transaction unless 
 
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otherwise provided by law, the prevailing party shall be allowed a reasonable 
attorney's fee to be set by the court, to be taxed and collected as costs. 
Because the Fazzios are the prevailing party in this civil action involving a commercial 
transaction, we award attorney fees to the Fazzios pursuant to I.C. § 12-120(3).  As requested by 
the Fazzios, this award includes the fees they incurred defending against the original appeal 
which this Court conditionally dismissed, so long as no fees have been duplicated in the total 
attorney fees request. 
IV.  CONCLUSION 
We affirm the district court’s grant of specific performance.  The district court recognized 
that it had the discretion to award damages or specific performance, and upon considering 
Mason’s evidence suggesting it would be difficult for him to comply as well as considering the 
other equitable factors relevant to this case, the district court exercised reason in electing to 
award specific performance to the Fazzios.  Attorney fees and costs to the Fazzios. 
Chief Justice EISMANN and Justices J. JONES, W. JONES and HORTON, CONCUR.