IN THE COURT OF APPEALS OF THE STATE OF IDAHO 

Docket No. 33965 

MEDICAL RECOVERY SERVICES, LLC, 

Plaintiff-Appellant, 

v. 

SHARON JONES, 

Defendant-Respondent. 

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2007 Opinion No. 83 

Filed: December 10, 2007 

Stephen W. Kenyon, Clerk 

Appeal from the District Court of the Seventh Judicial District, State of Idaho, 

Bingham County. Hon. Darren B. Simpson, District Judge; Hon. Scott H. 

Hansen, Magistrate. 

Attorney fee award, affirmed in part and remanded in part. 

McGrath, Meacham & Smith, PLLC, Idaho Falls, for appellant. 

Pendlebury Law Office, Idaho Falls, for respondent. 

______________________________________________ 

LANSING, Judge 

In this appeal, Plaintiff Medical Recovery Services, L.L.C. (“M.R.S.”) contends that the 

magistrate court awarded inadequate attorney fees to M.R.S. as the prevailing party in this 

collection action. We affirm in part and remand. 

I. 

BACKGROUND 

 M.R.S. is a debt collection agency. It received assignment of a debt of $637.00, plus 

$26.60 in prejudgment interest, owed to Mountain View Hospital by Sharon Jones. In 

September 2005, M.R.S. filed a complaint against Jones to recover this amount. The complaint 

also requested an award of attorney fees. On October 13, 2005, Jones met with M.R.S.’s 

attorney. They were apparently unable to reach a satisfactory resolution. Recognizing that she 

owed the debt, however, Jones paid the hospital directly on October 24, by placing the entire 

charge on a credit card. A few days later, she filed an answer to M.R.S.’s complaint, admitting 

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the allegations. M.R.S. then moved for judgment on the pleadings and filed a brief in support in 

which M.R.S. sought judgment for attorney fees incurred in the action. 

 At a January 23, 2006, hearing on M.R.S.’s motion, argument and colloquy focused 

primarily upon M.R.S.’s request for attorney fees. The magistrate court indicated that, as a rule 

of thumb, in such cases it typically awarded one-third of the principal amount for attorney fees, 

which would be about $200 in this case, and then inquired about the hourly rate of M.R.S.’s 

attorney and the time expended on this case. At the conclusion of this hearing, and without 

having received a memorandum of costs and fees incurred by M.R.S., the court announced that it 

was awarding $200 in attorney fees. Soon thereafter, Jones paid the fee and other costs ordered 

by the magistrate. 

 Thereafter, M.R.S. filed a motion requesting $1,860.75 in attorney fees pursuant to I.C. 

§ 12-120(1) and (3), and I.R.C.P. 54(d)(5) and (e). The motion was supported by affidavits 

outlining the time expended by attorneys and a paralegal and their hourly rates, in compliance 

with I.R.C.P. 54(e)(5). The motion asserted that the district court had prematurely ordered the 

attorney fees in the previous hearing because M.R.S. had not yet formally requested them. 

Following a hearing on May 22, 2006, the magistrate denied the motion and confirmed the 

original award of $200. M.R.S. appealed to the district court, which affirmed. M.R.S. again 

appeals. 

II. 

ANALYSIS 

A. Attorney Fees 

It is undisputed here that M.R.S. was entitled to fees in this case by terms of I.C. § 12-

120(1) and (3). The amount to be awarded under that statute is within the trial court’s discretion 

and will not be overturned unless the party appealing the decision shows an abuse of discretion. 

I.R.C.P. 54(e)(1); Brinkman v. Aid Ins. Co., 115 Idaho 346, 350-51, 766 P.2d 1227, 1231-32 

(1988), overruled on other grounds by Greenough v. Farm Bureau Mut. Ins. Co. of Idaho, 142 

Idaho 589, 130 P.3d 1127 (2006); Bldg. Concepts, Ltd. v. Pickering, 114 Idaho 640, 645, 759 

P.2d 931, 936 (Ct. App. 1988). In assessing whether an award of attorney fees was an abuse of 

discretion, this Court applies a three-factor test: (1) whether the trial court correctly perceived 

the issue as one of discretion; (2) whether the trial court acted within the outer boundaries of its 

discretion and consistently with the legal standards applicable to the specific choices available to 

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it; and (3) whether the trial court reached its decision by an exercise of reason. Burns v. 

Baldwin, 138 Idaho 480, 486-87, 65 P.3d 502, 508-09 (2003). 

To properly exercise its discretion on a request for attorney fees, a trial court must, at a 

minimum, consider the twelve factors outlined in I.R.C.P. 54(e)(3). Boel v. Stewart Title Guar. 

Co., 137 Idaho 9, 16, 43 P.3d 768, 775 (2002); Bldg. Concepts, Ltd., 114 Idaho at 645, 759 P.2d 

at 936; Nalen v. Jenkins, 113 Idaho 79, 81, 741 P.2d 366, 368 (Ct. App. 1987). These factors 

are: 

 (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. 

 (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. 

 (L) Any other factor which the court deems appropriate in the particular case. 

I.R.C.P. 54(e)(3). The trial court is required to consider the existence and applicability of each 

factor without placing undue weight or emphasis upon any one element. Nalen, 113 Idaho at 81, 

741 P.2d at 368. The trial court need not specifically address all of the factors in writing, so long 

as the record clearly indicates that all of them were considered. Boel, 137 Idaho at 16, 43 P.3d at 

775; Brinkman, 115 Idaho at 351, 766 P.2d at 1232. It is incumbent upon the appellant to 

demonstrate that the court failed to consider or apply the appropriate criteria. Irwin Rogers Ins. 

Agency, Inc. v. Murphy, 122 Idaho 270, 277, 833 P.2d 128, 135 (Ct. App. 1992). 

M.R.S. contends that the magistrate court abused its discretion in awarding only $200 in 

attorney fees because it did not consider the actual time that counsel spent on this case, applied a 

predetermined formula instead of considering the factors of Idaho Rule of Civil 

Procedure 54(e)(3), and improperly used a low award to penalize M.R.S.’s attorney. 

 A court may not use the award or denial of attorney fees to vindicate its sense of justice 

beyond the judgment rendered on the underlying dispute, provide indirect relief from an adverse 

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judgment, or penalize a party for misdeeds during the litigation. Eighteen Mile Ranch, LLC v. 

Nord Excavating & Paving, Inc., 141 Idaho 716, 720, 117 P.3d 130, 134 (2005); Evans v. 

Sawtooth Partners, 111 Idaho 381, 387, 723 P.2d 925, 931 (Ct. App. 1986); DeWils Interiors, 

Inc. v. Dines, 106 Idaho 288, 678 P.2d 80 (Ct. App. 1984). Nevertheless, a court need not 

blindly accept the figures advanced by the attorney, and may disallow fees that were 

unnecessarily and unreasonably incurred. Craft Wall of Idaho, Inc. v. Stonebraker, 108 Idaho 

704, 706, 701 P.2d 324, 326 (Ct. App. 1985). Thus, although the time and labor actually 

expended by an attorney is to be considered, it is also to be evaluated under a standard of 

reasonableness. Daisy Mfg. Co., Inc. v. Paintball Sports, Inc., 134 Idaho 259, 263, 999 P.2d 914, 

918 (Ct. App. 2000). “An attorney cannot ‘spend’ his time extravagantly and expect to be 

compensated by the party who loses at trial. Hence, a court may disallow fees that were 

unnecessarily and unreasonably incurred or that were the product of attorney ‘churning.’” Id.

(internal quotation marks and citations omitted). 

 In this case, the magistrate acted prematurely and improperly at the January 23, 2006 

hearing by awarding a specific amount of attorney fees before having received a Rule 54(d)(5) 

memorandum of costs and fees and Rule 54(e)(5) affidavit, which are necessary for application 

of the Rule 54(e)(3) factors. Also troubling is the magistrate’s assertion at that hearing that he 

would not give M.R.S. additional attorney fees regardless of what documentation it might later 

file. Nevertheless, the record clearly establishes that in response to M.R.S.’s later motion for 

attorney fees, at the May 22, 2006, hearing the magistrate did consider the time actually 

expended by M.R.S.’s counsel and the factors enumerated in the rule. 

Although the trial court indicated that it was “a little bit offended by the amount of 

attorney’s fees” and “disappointed” in counsel, the court’s further remarks show that the court’s 

rejection of most of the claimed fees was not a punishment, but was based on an analysis of the 

amount reasonably incurred. In particular, the court’s comments were focused on counsel’s 

work after Jones had attempted to arrange for payment early in the case. The court said: 

[O]n this case, you won’t make any money. Your law firm is going to lose four 

or five or six hundred dollars on this today. But the reason that I’m doing that is 

because [counsel] didn’t take the time to talk to [Jones] . . . and tell her, pay me 

the $200 of attorney fees plus the hundred dollars of costs, or whatever; . . . . 

[T]he impression that I have is [counsel] refused to talk to her, he refused to deal 

with her, wouldn’t give her a number. . . . [H]e didn’t respond by saying, look, I 

appreciate what you’re trying to tell me, lady, but you’re going to have to pay 

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some attorney fees and costs. So let’s just try to cut right to the chase here and 

get that resolved if we can. 

In the May 22, 2006, hearing, the magistrate reiterated: 

 Now, I do not want to dispute with you for a minute, [counsel], that 

you’ve got a lot more time in that. I can see that. . . . But under the 

circumstances, I just don’t feel like that is appropriate where this woman came to 

your office, tried to visit with you. Evidently you had a conversation where you 

didn’t really have a meeting of the minds. She goes out and pays the principal 

amount. I think you’re still entitled to be paid something, and that’s why I said 

200 instead of nothing. She’s paid the 200. She’s paid the filing fee. She’s paid 

the service fee. So for those reasons, it’s just kind of based on my training, my 

experience that I’ve had. I feel like that the 200 is appropriate in this particular 

case. 

 Neither party in this case presented evidence of what transpired during their 

conversations; they merely made unsworn assertions during the hearings. Regardless of the 

content of their conversations, it is undisputed that Jones telephoned M.R.S.’s attorney the day 

after service of the complaint, met with him the day after that, and four days later paid the full 

principal amount to the original creditor via a credit card charge. Jones contends that she 

expressed her willingness to fully settle the matter, including paying attorney fees, but that after 

she paid the debt directly to the hospital, M.R.S.’s attorney was angry and refused to state an 

amount for fees. The attorney disagreed with some of Jones’s depiction of their conversations, 

but admitted that he never gave her a specific figure that would resolve the attorney fee claim 

before preparing his motion for judgment on the pleadings, thereby expending more time and 

increasing the fees. After Jones paid the underlying debt, virtually all of the attorney’s services 

were undertaken in pursuit of an award of attorney fees. The record demonstrates that the 

magistrate’s comments about counsel’s actions did not express an intent to punish for perceived 

misconduct, but instead expressed a determination that these subsequent fees were not 

reasonable because they likely could have been avoided by better communication with Jones. 

M.R.S. also argues that the fee award was not derived by an exercise of reason because 

the magistrate employed a predetermined formula of one-third of the principal for attorney fees 

instead of considering the I.R.C.P. 54(e)(3) factors. On several occasions the magistrate did 

mention that, as a rule of thumb, he would order one-third of the principal amount as attorney 

fees in collection cases. However, taking the magistrate’s comments in their totality, it is evident 

that this was an assessment that encompassed an analysis of several Rule 54(e)(3) factors, 

including the relative simplicity of the issues, the requisite skill for collection services, the 

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prevailing charges, awards in similar cases, the amount involved, and the results obtained. To 

support its determination, the court noted the customary practices of other judges in the locality 

with respect to fee awards in collection cases. The court also asked about the attorney’s fee 

arrangement with M.R.S., but the attorney declined to give that information, so the court 

considered the one-third contingency fee agreements typically employed in such cases. The 

court also considered the relatively low principal amount involved, and the quick result obtained 

because the defendant admitted liability and quickly paid the underlying debt. It is therefore 

evident that the court did not disregard the factors of I.R.C.P. 54(e)(3) in favor of a 

predetermined formula. 

In sum, M.R.S. has not shown that the magistrate court abused its discretion by violating 

governing legal standards or by failing to exercise reason in arriving at the award for attorney 

services at the conclusion of the May 22 hearing. 

B. Paralegal Fees 

 Although the magistrate properly exercised its discretion in determining the award of fees 

for attorney services, we must remand this case because the magistrate did not perceive that it 

had discretion to award fees for work done by a paralegal. M.R.S.’s request included $192 for a 

paralegal’s work. The magistrate stated that under the Idaho Supreme Court decision, Hines v. 

Hines, 129 Idaho 847, 855, 934 P.2d 20, 28 (1997), such fees are not awardable as attorney fees 

or costs. In 1999, however, I.R.C.P. 54(e)(1) was amended to provide: “In any civil action the 

court may award reasonable attorney fees, which at the discretion of the court may include 

paralegal fees, to the prevailing party” (emphasis added). See P.O. Ventures, Inc. v. Loucks 

Family Irrevocable Trust, 144 Idaho 233, 239, 159 P.3d 870, 876 (2007). Because the 

magistrate court did not recognize that it had discretion to award fees for these expenses, we 

must remand for the court to reconsider whether to award any sum for paralegal services. 

C. Attorney Fees on Appeal 

 Jones requests an award of attorney fees on appeal pursuant to I.C. § 12-121 and 

I.R.C.P. 54(e)(1) on the ground that the appeal was bought frivolously, unreasonably or without 

foundation. We conclude, however, that there is no prevailing party, as we have affirmed in part 

but remanded for reconsideration of the claim for paralegal fees. Accordingly, no attorney fees 

or costs are awarded on appeal. 

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III. 

CONCLUSION 

While the magistrate court did not abuse its discretion in awarding fees for the work of 

M.R.S.’s attorney, it did not perceive that it had discretion to award attorney fees for a 

paralegal’s work. We therefore affirm the award for attorney services only but remand for the 

magistrate court to reconsider M.R.S.’s request for paralegal fees. No costs or fees to either 

party on appeal. 

 Chief Judge PERRY and Judge GUTIERREZ CONCUR.

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