Title: Syringa Networks v. Idaho Dept of Admin

State: idaho

Issuer: Idaho Supreme Court (civil)

Document:

IN THE SUPREME COURT OF THE STATE OF IDAHO 
 
Docket No. 38735 
 
SYRINGA NETWORKS, LLC, an Idaho 
limited liability company, 
 
Plaintiff-Appellant, 
 
v. 
 
IDAHO DEPARTMENT OF 
ADMINISTRATION; J. MICHAEL 
“MIKE” GWARTNEY, in his personal and 
official capacity as Director and Chief 
Information Officer of the Idaho Department 
of Administration; JACK G. “GREG” 
ZICKAU, in his personal and official 
capacity as Chief Technology Officer and 
Administrator of the Office of the CIO; 
ENA SERVICES, LLC, a Division of 
Education Networks of America, Inc., a 
Delaware corporation; QWEST 
COMMUNICATIONS COMPANY, LLC, a 
Delaware limited liability company, 
 
Defendants-Respondents. 
 
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Boise, February 2013 Term 
 
2013 Opinion No. 35 
 
Filed: March 29, 2013 
 
Stephen W. Kenyon, Clerk 
 
 
 
Appeal from the District Court of the Fourth Judicial District of the State of 
Idaho, in and for Ada County.  The Hon. Patrick H. Owen, District Judge. 
 
The judgment of the district court is vacated in part and affirmed in part. 
 
David R. Lombardi, Givens Pursley, Boise, argued for Syringa Networks. 
 
Steven F. Schossberger, Hawley Troxell Ennis & Hawley, Boise, argued for 
Idaho Department of Administration, J. Michael Gwartney, and Jack G. Zickau. 
 
Phillip S. Oberrecht, Greener Burke Shoemaker Oberrecht, Boise, argued for 
ENA Services. 
 
Steven J. Perfrement, Holme Roberts & Owen, Denver, Colorado, argued for 
Qwest Communications Co. 
 
 
 
2 
 
EISMANN, Justice. 
 
This is an appeal out of Ada County from a judgment dismissing an action challenging 
the bidding process for the Idaho Education Network.  We affirm the dismissal of all claims 
except the claim contending that the bidding process violated the statutes governing purchases by 
the division of purchasing.  We remand this case for further proceedings consistent with this 
opinion. 
 
I. 
Factual Background. 
 
In 2008, the legislature enacted legislation to establish the Idaho Education Network 
(IEN), which is to be a high-bandwidth telecommunications distribution system for distance 
learning in every public school in the state.  Ch. 260, § 3, 2008 Idaho Sess. Laws 753, 754.  The 
Department of Administration (Department) was given administrative oversight of the IEN, 
including “[p]rocur[ing] telecommunications services and equipment for the IEN through an 
open and competitive bidding process.”  I.C. § 67-5745D(5)(h). 
On December 15, 2008, the Department issued a Request for Proposals (RFP) to 
purchase goods and services for the first phase in establishing the IEN, which is to “connect each 
public high school with a scalable, high-bandwidth connection, including connections to 
institutions of higher education as necessary.”  Subsequent phases would include connecting 
each elementary and middle school, connecting libraries, and connecting state agencies.  The 
closing date for submitting proposals was January 12, 2009, at 5:00 p.m.  Any proposal 
submitted in response to the RFP had to be in writing and, pursuant to the terms of the RFP, was 
considered “an offer to perform a contract in full response to the request for proposals,” which 
had to remain valid for 180 days after the scheduled closing date for submitting proposals. 
The Department held a bidders conference on December 29, 2008, to solicit questions 
and input regarding the RFP.  It then issued a written statement of questions asked and the 
answers to those questions.  One of the questions was whether this was a single or multiple 
award contract, and the Department responded that it was a multiple award contract of five years 
with three five-year extensions for a total of twenty years.  Another question was whether it was 
 
3 
permissible to bring in an out-of-state partner, and the answer was, “Yes, we need to establish 
partnerships, both inside and outside of our state as applicable.” 
The Department issued an amendment to the RFP on January 6, 2009, which stated that 
the contract would be for a five year period, with three extensions of five years each.  It also 
issued a list of written questions that had been submitted after the bidders conference, with 
answers to those questions.  One of the questions asked about apparently conflicting statements 
in the RFP which were that the contract “will be awarded to up to four providers” and that 
“highest consideration will be given to the Partner or Partners presenting the best and most cost 
effective ‘total end-to-end service support solution’ and supporting network architecture.”  The 
Department answered that while “the State reserves the right to make multiple awards, it is the 
State’s preference to choose a single response that represents comprehensive partnerships and 
coverage but still provides a single point of accountability per end user community.”  Another 
question asked who would coordinate the development, outsourcing, and implementation of the 
statewide network if multiple vendors are selected, and the Department answered that “it is still 
the desire of the State to contract with a single end-to-end managed internet service provider 
with existing partners and\or a willingness to form partnerships.” 
Syringa Networks, LLC (Syringa), is an Idaho telecommunications company.  On 
January 7, 2009, it entered into a “teaming agreement” with ENA Services, LLC (ENA), a 
Tennessee company that specializes in providing education network services.  Pursuant to their 
agreement, ENA submitted a proposal in response to the RFP, although the cover letter stated 
that both ENA and Syringa were responding jointly to the proposal.  Qwest Communications 
Company, LLC (Qwest), and Verizon Business Network Services, Inc., also submitted 
responsive proposals. 
The proposals were then scored based upon six specific criteria, with the maximum 
possible score being 1000 points.  The ENA and Qwest proposals received the highest scores, 
with ENA’s proposal being given a score of 856 and Qwest’s proposal being given a score of 
635.  On January 20, 2009, the Department issued a letter of intent to award contracts to Qwest 
and ENA.  On January 28, 2009, the Department issued statewide blanket purchase orders to 
Qwest and ENA, with each of them having the same scope of work.  One month later, it issued 
amendments to the two purchase orders to alter the scope of work that each would perform.  
Qwest became “the general contractor for all IEN technical network services” (providing the 
 
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“backbone”) and ENA became “the Service Provider listed on the State’s Federal E-rate Form 
471” and was to “coordinate overall delivery of all IEN network services and support.” The 
effect of these amendments was to make Qwest the exclusive provider of the backbone, which is 
what Syringa intended to provide as a subcontractor of ENA. 
On December 15, 2009, Syringa filed this lawsuit against the Department; its director, J. 
Michael Gwartney; Jack G. Zickau, the chief technology officer; ENA; and Qwest.  Syringa sued 
the individuals in both their individual and official capacities.  The district court ultimately 
dismissed Syringa’s lawsuit against all of the Defendants on their respective motions for 
summary judgment.  Syringa timely appealed the grants of summary judgment, and the State 
Defendants timely cross-appealed the refusal to award them attorney fees. 
 
II. 
Did the District Court Err in Dismissing Syringa’s Challenge to Qwest’s Amended 
Purchase Order for Failure to Exhaust Administrative Remedies? 
 
For competitively bid contracts, the administrator of the division of purchasing must 
provide a notice that “describe[s] the property to be acquired in sufficient detail to apprise a 
bidder of the exact nature or functionality of the property required.”  I.C. § 67-5718(2).  
“Property” is defined as “[g]oods, services, parts, supplies and equipment, both tangible and 
intangible, including, but nonexclusively, designs, plans, programs, systems, techniques and any 
rights and interests in such property.”  I.C. § 67-5716(3).  The contract is to be awarded to the 
lowest responsible bidder, I.C. § 67-5718(4), as determined by the administrator, I.C. § 67-
5717(3). 
However, the administrator “may make an award of a contract to two (2) or more bidders 
to furnish the same or similar property where more than one (1) contractor is necessary.”  I.C. § 
67-5718A(1).  To do so, the administrator must make a written determination that it is necessary 
to award the contract to more than one contractor in order to (a) “furnish the types of property 
and quantities required by state agencies”; or (b) “provide expeditious and cost-efficient 
acquisition of property for state agencies”; or (c) “enable state agencies to acquire property 
which is compatible with property previously acquired.”  I.C. § 67-5718A(1) & (2).  All 
contracts made in violation of these statutes are void and any money advanced by the State in 
consideration of such contracts must be repaid.  I.C. § 67-5725. 
 
5 
The initial contracts awarded to ENA and Qwest on January 28, 2009, constituted an 
award to two bidders to furnish the same or similar property.  The material provisions of their 
contracts were identical.  There was no differentiation as to the scope of work each was to 
perform under their respective contracts.  However, the administrator did not make the required 
written determination to award the contract to two bidders until after Syringa requested a copy of 
that determination.  In response to Syringa’s public records request for the required written 
determination, the administrator sent a letter dated June 30, 2009, to a deputy attorney general 
stating that on December 3, 2008, he had a discussion with the state purchasing manager and 
they “agreed that no one vendor had the capability to service the State of Idaho and its geography 
to enable the network.”  The administrator’s letter concluded:  “At that time, I did not document 
this decision in writing.  Please accept this statement as that written determination.”  On 
February 22, 2010, the administrator issued a formal written determination that two of the 
required criteria were met ((a) and (b) quoted above).  That determination was based upon the 
administrator’s finding that “no one vendor had the capability to service the State of Idaho 
(‘State’) and its geography to enable the network.”  On appeal, Syringa does not challenge the 
multiple award. 
Although the written determination indicated that the decision to award two contracts was 
based upon Idaho’s geography, the Department decided not to divide the work to be done by 
ENA and Qwest geographically.  On February 26, 2009, the administrator issued change orders 
with respect to ENA’s and Qwest’s contracts.  Qwest became the statewide provider of the 
backbone, and ENA became the statewide E-rate service provider.  With that change, ENA and 
Qwest were no longer providing the same or similar property under their respective contracts.    
Qwest became the exclusive provider of what Syringa was to provide as a subcontractor of ENA. 
Syringa sought to challenge the amended contracts.  The State Defendants (the 
Department and Messrs. Gwartney and Zickau) moved for summary judgment with respect to 
this count on the ground that Syringa did not have standing to challenge the amended awards, 
and, if it had standing, it failed to exhaust its administrative remedies under Idaho Code section 
67-5733.  The district court held that Syringa had standing, but failed to exhaust its 
administrative remedies under section 67-5733.  On appeal, the State Defendants contend that 
Syringa both lacked standing and failed to exhaust its administrative remedies. 
 
6 
a.  Syringa has standing.  “The doctrine of standing focuses on the party seeking relief 
and not on the issues the party wishes to have adjudicated.”  Miles v. Idaho Power Co., 116 
Idaho 635, 641, 778 P.2d 757, 763 (1989).  To satisfy the requirement of standing, “litigants 
generally must allege or demonstrate an injury in fact and a substantial likelihood that the 
judicial relief requested will prevent or redress the claimed injury.” Id. “The injury must be 
distinct and palpable and not be one suffered alike by all citizens in the jurisdiction.” Selkirk–
Priest Basin Ass’n, Inc. v. State ex rel. Batt, 128 Idaho 831, 833–34, 919 P.2d 1032, 1034–35 
(1996).  There must also be a fairly traceable causal connection between the claimed injury and 
the challenged conduct.  Young v. City of Ketchum, 137 Idaho 102, 104, 44 P.3d 1157, 1159 
(2002).  “An interest, as a concerned citizen, in seeing that the government abides by the law 
does not confer standing.”  Troutner v. Kempthorne, 142 Idaho 389, 391, 128 P.3d 926, 928 
(2006). 
When the amendments to the contracts issued to Qwest and ENA are viewed in isolation, 
Syringa does not have standing to challenge them.  It is not a party to either contract.  Its position 
as an intended subcontractor of ENA does not make it a party to ENA’s contract with the State, 
nor does it create privity of contract with the State.  Hobson Fabricating Corp. v. SE/Z Constr., 
LLC, WL 6601809, at *4 (Idaho Dec. 19, 2012).  However, when the amendments to the 
contracts are viewed in the context of the entire bidding process, Syringa does have standing. 
Idaho Code section 67-5718A(1) allows the State to award contracts to multiple bidders 
“to furnish the same or similar property” where more than one contractor is necessary for a 
statutorily specified reason.  It is apparent from the record that the State Defendants believed that 
the statute only controlled the initial award to multiple bidders.  If they were initially awarded 
contracts to furnish the same or similar property, amending those contracts so that the successful 
bidders were no longer furnishing the same or similar property would not violate the statute.  
They believed the State could do in two steps what was prohibited in one.1 
A government agency may not do indirectly what it is prevented by law from doing 
directly.  See O’Bryant v. City of Idaho Falls, 78 Idaho 313, 325, 303 P.2d 672, 678 (1956) 
                                                 
1 The RFP stated:  “All purchases, leases, or contracts which are based on competitive proposals will be awarded 
according to the provisions in the Request for Proposal.  The State reserves the right to reject any or all proposals, 
wholly or in part, or to award to multiple bidders in whole or in part.”  (Emphasis added.)  This provision would not 
negate the requirement of Idaho Code section 67-5718A(1) that awarding a contract to multiple bidders must be to 
furnish the same or similar property. 
 
7 
(“What cannot be done directly by the City of Idaho Falls because of constitutional limitations 
cannot be accomplished indirectly.”).  If the State could circumvent the statute simply by 
amending the contracts awarded to multiple bidders, then the statute would be of no effect.  That 
two-step approach is obviously not permissible when considered in light of subsection (3) of the 
statute, which states, “Where a contract for property has been awarded to two (2) or more bidders 
in accordance with this section, a state agency shall make purchases from the contractor whose 
terms and conditions regarding price, availability, support services and delivery are most 
advantageous to the agency.”  I.C. § 67-5718A(3).  Subsection (3) obviously intends, for the 
benefit of the taxpayers, that the multiple bidders who are awarded contracts will remain as 
competitors, which will only occur if they are furnishing the same or similar property. 
The amendments to the purchase orders issued to ENA and Qwest were, in effect, 
changing the RFP after the bids were opened.  The RFP solicited proposals from bidders who 
were able to perform the entire contract which, under the wording of the RFP, would be a “total 
end-to-end service support solution.”  The RFP defined a proposal as “[a] written response 
including pricing information to a request for proposals that describes the solution or means of 
providing the property requested and which proposal is considered an offer to perform a contract 
in full response to the request for proposals.”  (Emphasis added.)  The RFP did not seek bids for 
one contract to provide the backbone and a separate contract to be the E-rate service provider. 
An RFP is required to “describe the property to be acquired in sufficient detail to apprise 
a bidder of the exact nature or functionality of the property required.”  I.C. § 67-5718(2).  A 
“request for proposals may be changed by the buyer through issuance of an addendum, provided 
the change is issued in writing prior to the bid opening date and is made available to all vendors 
receiving the original solicitation.”  IDAPA 38.05.01.052.  By amending the contracts so that 
Qwest and ENA were no longer furnishing the same or similar property, the State has, in effect, 
changed the RFP after the bids had been opened in violation of I.C. § 67-5718(2) and IDAPA 
38.05.01.052.  The separate contracts as amended no longer conform to the RFP’s description of 
the property to be acquired.  The description of property to be provided by Qwest under its 
amended contract is not a minor deviation from the property to be provided by the successful 
bidder under the RFP, nor is the property to be provided by ENA under its amended contract.  
“[M]ere schemes to evade law, once their true character is established, are impotent for the 
 
8 
purpose intended.  Courts sweep them aside as so much rubbish.”  O’Bryant, 78 Idaho at 325, 
303 P.2d at 678. 
Syringa has alleged a distinct and palpable injury, not suffered by all Idaho citizens, that 
is alleged to have been caused by the challenged conduct and that can be redressed by judicial 
relief.  The record indicates that had the RFP solicited bids for separate contracts that described 
the property to be acquired in accordance with the amended contracts ultimately awarded, 
Syringa would have bid to perform the work specified in the amended contract awarded to 
Qwest.  Syringa submitted a bid to ENA to perform that same work.  Therefore, Syringa has 
standing to challenge the amended contract to Qwest because it constituted, in effect, changing 
the RFP after the bids were opened. 
b.  Syringa had no administrative remedies to exhaust.  The district court held that 
Syringa failed to exhaust its administrative remedies under Idaho Code section 67-5733.  That 
statute did not provide Syringa with any administrative remedy to challenge the amendment to 
ENA’s contract.  The statute permits a vendor to administratively challenge the specifications, 
I.C. § 67-5733 (1)(a), which are the “explicit requirements furnished with an invitation to bid, 
request for proposals or request for quotations upon which a purchase order or contract is to be 
based,” IDAPA 38.05.01.011.45.  The statute permits a bidder whose bid was found to be 
nonresponsive to appeal that decision administratively.  I.C. § 67-5733(1)(b).  It permits a bidder 
who was determined not to be the lowest responsible bidder to contest that determination.  I.C. § 
67-5733(1)(c).  Finally, it permits an administrative challenge to an intended sole source 
procurement, I.C. § 67-5733(1)(d), which does not apply here because there was more than one 
vendor for the property to be acquired, I.C. § 67-5720(2).  None of those administrative remedies 
permit the challenge being made by Syringa here.  The district court erred in dismissing count 
three of Syringa’s complaint on the ground that Syringa failed to exhaust its administrative 
remedies.  The “failure to exhaust administrative remedies is not a bar to litigation when there 
are no remedies to exhaust.”  Lochsa Falls, L.L.C. v. State, 147 Idaho 232, 239-40, 207 P.3d 963, 
970-71 (2009).  Therefore, the district court erred in dismissing Syringa’s challenge to the 
amended contract and/or purchase order(s) issued to Qwest.   
 
III. 
Did the District Court Err in Holding that the Teaming Agreement Was Unenforceable?  
 
9 
 
When reviewing on appeal the granting of a motion for summary judgment, we apply the 
same standard used by the trial court in ruling on the motion.  Infanger v. City of Salmon, 137 
Idaho 45, 46-47, 44 P.3d 1100, 1101-02 (2002).  We construe all disputed facts, and draw all 
reasonable inferences from the record, in favor of the non-moving party.  Id. at 47, 44 P.3d at 
1102.  Summary judgment is appropriate only if the evidence in the record and any admissions 
show that there is no genuine issue of any material fact regarding the issues raised in the 
pleadings and that the moving party is entitled to judgment as a matter of law.  Id. 
On January 7, 2009, Syringa and ENA entered into a teaming agreement.  “A teaming 
agreement is not a phrase with a fixed meaning.”  Cable & Computer Tech. Inc. v. Lockheed 
Sanders, Inc., 214 F.3d 1030, 1034 (2000).  “An American Bar Association handbook on 
government contracting speaks of teaming arrangements as ‘primarily’ including agreements 
‘under which the signatories cooperate to pursue a particular contract’; such agreements 
generally ‘anticipate the entry into a separate subcontract or joint venture upon the award of a 
contract.’ ”  Id. at 1034-35 (quoting Carl J. Peckinpaugh, Government Contracts for Services 89-
90 (1997)).  However, a teaming agreement can be drafted under which the parties agree to all of 
the necessary elements of a contract regarding the ultimate objective if one of them is a 
successful bidder.  Teaming agreements are subject to the same requirements as other contracts 
that there must be an agreement as to all material terms of the contract. 
The teaming agreement at issue in this case provided that ENA was to assume the lead 
role in preparing a proposal in response to the RFP, with Syringa providing such input, review, 
and information as required to complete the proposal.  There is no contention that ENA breached 
that part of the teaming agreement.  The issue is whether the parties had entered into a binding 
agreement regarding their relationship once ENA was awarded the contract.  Syringa alleged that 
ENA had breached the teaming agreement after it was notified that it was a successful bidder.  
On ENA’s motion for summary judgment, the district court held that the teaming agreement 
lacked material and sufficiently definite terms to be enforceable. 
“It is essential to an enforceable contract that it be sufficiently definite and certain in its 
terms and requirements so that it can be determined what acts are to be performed and when 
performance is complete.”  Dale’s Service Co., Inc. v. Jones, 96 Idaho 662, 664, 534 P.2d 1102, 
1104 (1975).  “No enforceable contract comes into being when parties leave a material term for 
future negotiations, creating a mere agreement to agree.” Maroun v. Wyreless Systems, Inc., 141 
 
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Idaho 604, 614, 114 P.3d 974, 984 (2005) (quoting from 17A Am. Jur. 2d Contracts § 181 
(2004)). 
The teaming agreement stated that its purpose was “to define the parties’ respective rights 
and obligations in connection with the Proposal, the Project, and the Prime Contract.”  It further 
stated that if ENA was awarded the prime contract, “ENA and Syringa shall enter into an 
agreement pursuant to which Syringa shall provide connectivity services statewide to ENA” and 
“the parties shall execute a partnership agreement as specified in this agreement that will also 
include any required flow-down provisions or other appropriate terms similar to those set forth in 
the Prime Contract.”  The teaming agreement then listed what the parties’ respective 
responsibilities would be under such a partnership agreement.  The agreement stated that ENA 
shall be responsible for the following functions for all participating schools and 
libraries:  (i) procuring and owning all customer premises equipment, (ii) 
coordinating field service, (iii) managing the customer relationship, (iv) serving as 
the fiscal and contracting agent, including responsibility for invoicing and 
collections, (v) management of E-Rate funds, and (vi) procuring, managing, and 
provisioning last mile circuits. 
 
The agreement stated that Syringa 
shall be responsible for (i) providing the statewide backbone for the services, (ii) 
providing and operating a network operations center for the backbone, (iii) 
providing for co-location of core network equipment, (iv) procuring and owning 
all customer premises equipment not provided by ENA, (v) coordinating field 
service for non-school or library sites, (vi) managing the customer relationship for 
non-school or library sites, and (vii) procuring, managing and provisioning last 
mile circuits for non-school or library sites. 
 
The agreement also provided that ENA and Syringa would be jointly responsible for “(i) 
leveraging the best price from existing carrier relationships, (ii) developing additional carrier 
relationship for the purposes of this project and (iii) interfacing between last mile circuits and 
Syringa’s backbone.” 
 
The district court held that the teaming agreement lacked the material term of price and 
that the logistics of how any work would be done was to be left to occur in subsequent 
negotiations.  The court referred to the deposition of Syringa’s CEO, who testified, “What this 
agreement does not state is how the money flow would happen.”  He stated:  “We knew what 
things cost.  We didn’t know the way the money would flow.”  He testified that he expected the 
division of money to be worked out in subsequent negotiations.  The court also pointed out that 
 
11 
the teaming agreement recognized that a further agreement would be required because it stated,  
“If ENA wins the Prime Contract as provided in Section 2(a) above, the parties shall execute a 
partnership agreement as specified in this agreement that will also include any required flow-
down provisions or other appropriate terms similar to those set forth in the Prime Contract.” 
 
On appeal, Syringa argues that the district court erred in failing to consider that Syringa 
provided a fixed price bid to ENA and that it relied upon that bid in submitting its cost proposal 
to the State.  “It is a settled common law contract principle that utilizing a subcontractor’s bid in 
submitting the prime or general contract bid does not, without more, constitute an acceptance of 
the subcontractor’s offer conditioned upon being awarded the general contract by the awarding 
authority.”  Mitchell v. Siqueiros, 99 Idaho 396, 399, 582 P.2d 1074, 1077 (1978).  Syringa has 
not pointed to any agreement under which the parties agreed that the prices submitted by Syringa 
would be the prices that ENA would pay it.  Because the parties did not agree upon price, which 
was a material term of the contract, the teaming agreement was not an enforceable contract.  The 
district court did not err in dismissing the claim against ENA for breach of contract. 
 
IV. 
Did the District Court Err in Dismissing the Tortious Interference With Contract Claims? 
 
Syringa alleged that Qwest and Messrs. Gwartney and Zickau committed the tort of 
interference with a contract, which was the teaming agreement.  Tortious interference with 
contract has four elements:  “(1) the existence of a contract; (2) knowledge of the contract on the 
part of the defendant; (3) intentional interference causing a breach of the contract; and (4) injury 
to the plaintiff resulting from the breach.”  Bybee v. Isaac, 145 Idaho 251, 259, 178 P.3d 616, 
624 (2008).  The first requirement of the tort is the existence of a contract that would entitle a 
party to that contract to recover damages for its breach.  Idaho First Nat’l Bank v. Bliss Valley 
Foods, Inc., 121 Idaho 266, 286, 824 P.2d 841, 861 (1991).  Because the teaming agreement was 
not an enforceable contract, these parties could not have committed the tort of interfering with 
that alleged contract.  Therefore, the district court did not err in dismissing the claim that Qwest 
and Messrs. Gwartney and Zickau committed the tort of interference with a contract. 
 
V. 
Did the District Court Err in Dismissing the Claim against Qwest of 
 
12 
Tortious Interference with a Prospective Economic Advantage? 
 
Syringa alleged that Qwest committed the tort of tortious interference with Syringa’s 
prospective economic advantage by interfering with its ability to subcontract with ENA.  In order 
to establish a claim for intentional interference with a prospective economic advantage, Syringa 
must show: 
(1) the existence of a valid economic expectancy, (2) knowledge of the 
expectancy on the part of the interferer, (3) intentional interference inducing 
termination of the expectancy, (4) the interference was wrongful by some measure 
beyond the fact of the interference itself, and (5) resulting damage to the plaintiff 
whose expectancy has been disrupted. 
 
Cantwell v. City of Boise, 146 Idaho 127, 138, 191 P.3d 205, 216 (2008).  The interference may 
be shown to be wrongful by proof that either:  (1) the interferer had an improper motive to harm 
the plaintiff; or (2) the means used by the interferer to cause injury to the prospective advantage 
were wrongful by reason of a statute, regulation, recognized common law rule, or an established 
standard of a trade or profession.  Yoakum v. Hartford Fire Ins. Co., 129 Idaho 171, 178, 923 
P.2d 416, 423 (1996).  The mere pursuit of one’s own business purposes is not sufficient to 
support an inference of an improper motive to harm the plaintiff.  Id. at 179, 923 P.2d at 424;     
Top Serv. Body Shop, Inc. v. Allstate Ins. Co., 582 P.2d 1365, 1372 (Or. 1978).   
For purposes of its motion for summary judgment, Qwest assumed that Syringa could 
establish the existence of a valid economic expectancy, knowledge of the expectancy by Qwest, 
and damages.  The only issues were whether there was a genuine issue of material fact as to 
whether Qwest intentionally interfered to induce the termination of the expectancy and did so by 
some measure beyond the fact of interference itself. 
 
The economic expectancy was that Syringa would be able to enter into a subcontract with 
ENA to provide the backbone.  Once the Department of Administration issued the amended 
contracts, ENA no longer had a contract to provide the backbone and, therefore, no need to enter 
into a subcontract with Syringa.  The district court granted summary judgment as to this claim 
because the record showed that the decision on how to divide the work between Qwest and ENA 
was a unilateral decision by the Department of Administration. 
 
The director of the Department submitted an affidavit stating:  “After the initial award, 
Administration then unilaterally determined how best to divide the work between the two 
awardees/contractors.  Administration’s determination was based upon the individual strengths 
 
13 
of each awardees/contractors’ proposals.”  Syringa contends that there is an issue of fact as to 
whether the Department made that decision without improper influence from Qwest. 
 
ENA initially entered into a contract with the State to provide the property specified in 
the RFP.  It was the later amendment of that contract that left ENA with no need of Syringa’s 
services.  Thus, to preclude summary judgment, Syringa must point to evidence creating a 
genuine issue of material fact showing that Qwest wrongfully induced ENA to agree to the 
amendment of its contract, either directly or indirectly through the State.  Syringa contends that 
such interference is shown by the facts that between the issuance of the letter of intent to award 
contracts to Qwest and ENA and the issuance of the amended contracts:  (a) Qwest engaged in 
closed-door meetings with the State and with ENA; (b) Qwest asked ENA to withdraw as a 
prime contractor and become a subcontractor of Qwest; and (c) Qwest submitted draft language 
to the State of a proposed amendment to its contract under which it would be the prime 
contractor for providing the backbone.  These facts do not create a genuine issue of material fact 
as to whether it was the Department that unilaterally determined how to divide the work between 
Qwest and ENA. 
 
The director of the Department testified that he first learned of the contents of the letter of 
intent during a telephone call with other employees of the Department.  During that conversation, 
the employees stated that they wanted to “split the bid,” which he understood to mean “that 
Qwest and ENA were asked to be partners and to go ahead and put this project in place.”  When 
asked whether Qwest and ENA being partners would mean they were both providing the same or 
similar property but at different locations, he responded:  “No.  What it means is they bring 
different skills to the game.  And they can get together and utilize those skills efficiently.”  He 
testified that the intent of awarding contracts to Qwest and ENA was for ENA to be the E-rate 
provider and for Qwest to provide the connectivity and that they were not to provide the same or 
similar services. 
 
The director met together with both Qwest and ENA after the multiple awards were 
made.  The ENA representative at that meeting informed Syringa in an email sent on January 30, 
2009, that the director “made it clear that he’d be running things and that he wanted ENA and 
Qwest to get together and come to an amicable solution to how we all might execute.” 
 
14 
Although Qwest thereafter had closed-door meetings with the State and with ENA, 
Syringa cannot point to anything that Qwest did during those meetings that would have induced 
ENA to agree to the contractual amendment.  Suspicion is not a substitute for facts. 
Being the E-rate provider and providing the backbone were the major elements of the 
RFP.  On February 6, 2009, Qwest learned that the State was going to designate ENA as the E-
rate provider for the project.  On February 10, 2009, a Qwest representative asked an ENA 
representative if ENA would agree to withdraw and become a subcontractor of Qwest.  ENA 
obviously did not agree to do that.  On February 10, 2009, Qwest also sent an email to the State 
with a proposed amendment to its contract under which Qwest would be “the contractor for all 
IEN network services” with ENA being listed as the E-rate service provider.  The email also 
included a list of reasons why ENA should not be listed as the E-rate service provider and Qwest 
should be.  On February 12, 2009, the State formally designated ENA as the E-rate service 
provider, obviously not acceding to Qwest’s request to be the service provider. 
ENA had an apparent business purpose for not objecting to the amendment of its contract 
with the State.  If the original contracts remained in place, the work would have to be divided 
geographically.  ENA would have a contract for an undefined portion of the State, but would 
have to subcontract with another to provide the backbone for that part of the State.  With the 
amendment, ENA will not be responsible for subcontracting to provide the backbone, but will 
instead be the E-rate service provider for the entire state.  
The facts argued by Syringa do not create a genuine issue of fact that it was not the 
Department’s decision to divide the work between ENA and Qwest in the manner it was done by 
the amended contracts.  The district court did not err in granting summary judgment dismissing 
this claim against Qwest. 
 
VI. 
Did the District Court Err in Awarding Attorney Fees to Qwest? 
 
The district court awarded Qwest attorney fees pursuant to Idaho Code section 12-120(3) 
on the ground that this was an action by Syringa to recover against Qwest in a commercial 
transaction.  The district court held that this action arose out of a commercial transaction because 
“the IEN procurement contemplated numerous commercial transactions between Syringa and 
Qwest, even though the direct prime contract would be between Qwest and the State and/or ENA 
 
15 
and the State.”  However, as the district court acknowledged:  “[T]he action must arise from a 
commercial transaction between the parties.  BECO Constr. Co., Inc. v. J-U-B Eng’rs, Inc., 145 
Idaho 719, 726, 184 P.3d 844, 851 (2008).” 
Here, there was no commercial transaction between Qwest and Syringa, and Syringa’s 
claims against Qwest did not allege that there were.  That there may in the future have been 
commercial transactions between Qwest and Syringa is not relevant to the award of attorney fees 
in this action.  Syringa’s claims against Qwest in this action were not to recover in an alleged 
commercial transaction between them.  The district court erred in awarding attorney fees to 
Qwest under Idaho Code section 12-120(3) on the ground that this was an action against Qwest 
to recover in a commercial transaction. 
Qwest also sought attorney fees below under Idaho Code section 12-121.  The district 
court did not address that basis of the requested award because it had awarded attorney fees 
under section 12-120(3).  Qwest asks that if we hold that section 12-120(3) was not applicable, 
we should uphold the award under section 12-121.  In order to be awarded attorney fees under 
that statute, Qwest must be the prevailing party.  In addition, the district court must conclude, in 
its discretion, that the action was brought frivolously, unreasonably, or without foundation.  
Garner v. Povey, 151 Idaho 462, 467-68, 259 P.3d 608, 613-14 (2011).  At this point, Qwest is 
not a prevailing party.  Once there is a prevailing party in the litigation, then the district court can 
consider that party’s request for an award of attorney fees. 
 
VII. 
Did the District Court Err in Failing to Award the State Attorney Fees 
Pursuant to Idaho Code Section 12-120(3) or 12-117(1)? 
 
The State Defendants sought an award of attorney fees pursuant to Idaho Code sections 
12-120(3), 12-121, 12-117, and 6-918A.  The district court denied the request for an award of 
attorney fees under sections 12-117 and 6-918A based upon the merits, and the State Defendants 
have not appealed that denial.  They only challenge our prior decisions regarding the 
applicability of section 12-120(3). 
The district court denied an award of fees under section 12-120(3) based upon our 
holding in State v. Hagerman Water Right Owners, Inc., 130 Idaho 718, 723, 947 P.2d 391, 396 
(1997), wherein we stated, “I.C. § 12-117 provides the exclusive basis upon which to seek an 
 
16 
award of attorney fees against a state agency.”  That holding has been followed in subsequent 
cases, but it is incorrect.  Section 12-117(1) sets forth specific conditions upon which attorney 
fees can be awarded “in any proceeding involving as adverse parties a state agency or a political 
subdivision and a person.”  However, the statute begins with the words “[u]nless otherwise 
provided by statute.”  Therefore, if another statute expressly provides for the awarding of 
attorney fees against a state agency or a political subdivision, attorney fees can be awarded under 
that statute also. 
 
Idaho Code section 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 
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.  
The term “commercial transaction” is defined to mean all transactions 
except transactions for personal or household purposes.  The term “party” is 
defined to mean any person, partnership, corporation, association, private 
organization, the state of Idaho or political subdivision thereof. 
 
 
The statute provides that the prevailing party is entitled to an award of attorney fees in 
the specified types of civil actions, and it expressly defines party to include “the state of Idaho or 
political subdivision thereof.”  Although the only “party” mentioned in the statute is the 
prevailing party, it is unlikely that the legislature intended for the statute to apply to the State or a 
political subdivision only if that entity prevails and not if it loses.  Therefore, we hold that 
section 12-117(1) is not the exclusive basis upon which to seek an award of attorney fees against 
a state agency or political subdivision, but attorney fees may be awarded under any other statute 
that expressly applies to a state agency or political subdivision, such as sections 12-120(3) and 
12-121.  On remand, the district court can reconsider whether the State Defendants are entitled to 
an award of attorney fees under an applicable statute other than section 12-117(1). 
 
VIII. 
Is any Party Entitled to an Award of Attorney Fees on Appeal? 
 
Syringa seeks an award of attorney fees against ENA on appeal pursuant to Idaho Code 
section 12-120(3) on the ground that its action against ENA is to recover in a commercial 
transaction.  Because Syringa failed to prevail on its breach of contract claim against ENA, it is 
 
17 
not entitled to an award of attorney fees under that statute.  Storey Constr. Inc. v. Hanks, 148 
Idaho 401, 411, 224 P.3d 468, 478 (2009). 
 
ENA seeks an award of attorney fees against Syringa on appeal pursuant to Idaho Code 
section 12-120(3).  Because this is an action by Syringa to recover against ENA in an alleged 
commercial transaction, ENA is entitled to an award of attorney fees on appeal against Syringa. 
 
Qwest seeks an award of attorney fees on appeal against Syringa pursuant to Idaho Code 
sections 12-120(3).  As we have held above, because there was no commercial transaction 
between Qwest and Syringa, nor was one alleged, Qwest is not entitled to attorney fees on appeal 
against Syringa. 
 
The State seeks an award of attorney fees on appeal pursuant to sections 12-117(1), 12-
120(3), and 12-121.  All three statutes are expressly applicable to the State, but they all only 
provide for the award of attorney fees to the prevailing party.  Because the State and Syringa 
have both prevailed in part on appeal, the State is not the prevailing party on appeal.  Tapadeera, 
LLC v. Knowlton, 153 Idaho 182, ___, 280 P.3d 685, 692 (2012). 
 
IX. 
Conclusion. 
 
We affirm the judgment dismissing all counts of the complaint except count three seeking 
to set aside the State’s contract with Qwest on the ground that it was awarded in violation of the 
applicable statutes.  We remand that claim for further proceedings that are consistent with this 
opinion.  We reverse Qwest’s award of attorney fees against Syringa.  We remand to the trial 
court the determination of whether any of the State Defendants are entitled to an award of 
attorney fees against Syringa for proceedings in the district court.  We award costs and attorney 
fees on appeal to ENA.  Because the State Defendants and Syringa both prevailed only in part on 
appeal, we do not award them either costs or attorney fees on appeal. 
 
 
Chief Justice BURDICK and Justice W. JONES, CONCUR.   
 
 
J. Jones, J., specially concurring.  
 
I concur in the Court’s opinion but wish to address two somewhat related issues. First, I 
agree that the teaming agreement was not sufficient to bind ENA after it received the contract 
 
18 
award, but I think ENA’s subsequent actions toward Syringa were less than honorable. Because 
there was no enforceable contract, I don’t believe that a tortious interference with contract claim 
can be sustained against Mr. Gwartney, although in my estimation a tortious interference with 
prospective economic advantage claim could have survived summary judgment, if it had been 
alleged against him.  
 
With regard to the teaming agreement, the Court correctly holds that the agreement was 
insufficient in setting out the details of the relationship between the parties following a contract 
award. The parties should have included provisions setting out their respective rights and 
obligations under the partnership agreement called for in the teaming agreement, or a mechanism 
by which those provisions could have been established, such as working out disputed provisions 
through use of binding arbitration. Neither approach was utilized by the parties and, therefore, 
the teaming agreement did not contain the essentials for an enforceable contract. It must be 
observed, however, that ENA was somewhat disloyal to its teaming partner, Syringa. When it 
appeared that the State was planning on having Qwest provide the connectivity services that 
ENA had intended on having Syringa provide under its bid, it didn’t take long for ENA to 
forsake its team partner and cozy up to Qwest. ENA acknowledged in its briefing and argument 
that it did not have the ability, standing alone, “to provide a complete, statewide bid in response 
to the [State’s request for proposal]”―it needed to team up with Syringa. After the contracts 
were awarded, and subsequently revised to essentially cut Syringa out, ENA does not appear to 
have worried too much about the fate of its former team partner and was not very straight-
forward in letting Syringa know that it was being cut loose. ENA couldn’t have been admitted to 
the dance without the help of its team partner but didn’t have much problem switching dance 
partners once it got through the door.  
 
Because the teaming agreement was insufficient for enforcement, Syringa’s claim against 
Mr. Gwartney for tortious interference with contract is not sustainable. That claim was alleged 
specifically against Gwartney, the Department of Administration, Zickau and Qwest. The 
tortious interference with prospective economic advantage claim was alleged only against Qwest. 
That claim did not depend upon the existence of an enforceable contract. Had it been alleged 
against Gwartney, I would have found sufficient evidence and inferences in the record to allow 
the matter to go trial. Gwartney appears to have been the architect of the State’s effort to bend 
the contracting rules to Qwest’s advantage. In deposition testimony, he essentially admitted 
 
19 
knowing, even before the contract award was made on January 20, 2009, that Qwest would be 
“making the connections and providing the broadband” for IEN.2 This was the work that Syringa 
was to perform under its teaming agreement with ENA. Syringa alleges that Gwartney made 
threatening statements against Syringa on a couple of occasions, indicating he would “make sure 
Syringa would never get any of the IEN business.” In all, there was sufficient evidence to have 
sustained a cause of action for tortious interference with prospective advantage as against 
Gwartney, had one been pleaded against him. However, it was not.  
 
 
Justice HORTON CONCURS. 
 
                                                 
2 Although he subsequently claimed he misspoke.