### IN THE SUPREME COURT OF 

### THE STATE OF 

### IDAHO Docket No. 38511 

## STATEOFIDAHO,DEPARTMENTOT' ) 

### TRANSPORTATION, Plaintiff-Respondent,



### HJ GRATHOL, a

### California general 

### partnership, Defendant-Appellant,

and 

### STERLING SAVINGS 

### BANK, A 

### Washington 

### corporation; and 

### DOES

## I through 5, Defendants. 

### ) ) 

# ) Coeur d'Alene, 

### May 2012

### Term ) 

# ) 2012

### OpinionNo. 85 ) 

# ) Filed: June 1,2012 

### ) 

# ) Stephen 

### W. Kenyon, 

### Clerk

Appeal from the district court of the FirstJudicial 

### District 

### ofthe State

### ofldaho, Kootenai 

### County. Hon. Lansing Haynes, 

### District Judge. The decision of thedistrict court is

### affrrmed. Neither party is awarded attorney's fees. Costs on appeal are awardedto Respondent.

Ramsden 

### & Lyons, 

### LLP, Coeur d'Alene, for

### Appellant. Christopher D. Gabbert argued. Holland 

### & Hart, Boise, 

### for Respondent. Mary 

### V.

### york argued. W. JONES, Justice 

### I. NATURE oF THE CASE 

### HJ Grathol ("Grathol") 

## is a califomia general partnership 

### that owns real estate 

### in Kootenai County, 

### Idaho. Grathol purchased a parcel

### for commercial 

### real estate development, 

### which 

### is located 

### at

### or nearthe northeast 

### comer

### of US Highway 95 and state 

### Highway 54 

### in Kootenai 

### county (hereinafter referred 

### to as 

### "Grathol's parcel" 

### or ,,the 

### parcel',). The Idaho 

### Transportation 

### Board 

### ("the Board") 

### later sought

## to condemn sixteen acres

## of the parcel (hereinafter the portion 

### of Grathol's parcel that is subject to condemnation shall be referred to as

### "the subject 

### property") in orderto 

### realigr US Highway 95 andto construct an interchange 

### with

State Highway 

### 54. Grathol contends that the Board failedto negotiate for the subject property 

### in goodfaith because the Board's offer did not account for the extension 

### ofSylvan Roadto Roberts Road

### ('the Sylvar/Roberts Extension"), which Grathol contends would front the subject property 

### and significantly increase 

### its

### value. Grathol fi.rther asserts

### thatthe Board 

### failed

### to

### file its Complaint and Order 

### of Condemnation 

### in accordance 

### with I.C. $ 7-707 before 

### movingfor early possession of the subject property pursuanttothe "quick-take" provisions of 

### I.C. 5 7-721.



### II. FAcruAL AND PRoCEDURAL 

### BAcKcRoUND Grathol engages 

### in the business

### of commercial real estate development 

### in 

### ldaho. It has taken 

### significant steps

### to corffnercially develop the parcel, 

### u'hich 

### it originally purchased as a commercial real estate investment

### venture. To further the development 

### of its parcel, Grathol 

### filed site plans, submitted a

### traffic impact study, and successfully secured commercial rezoning 

### from Kootenai 

### County. Moreover, Grathol has marketed the parcel and engaged 

### in negotiations 

### with potential tenants. 

### As 

### it currently exists, 

### US Highway 95 is 

### primarily a two-lane 

### highway. In 2002, the Board initiated a comprehensive study 

### of US Highway 95 between the communities 

### of Garwood and Sagle 

### to determine the

### feasibility of improving the highway to afourJane divided highway 

### withTlpe 

## V Access 

### Control. The study concluded that 

### the highway should 

### be improved 

### in order

### to increase safety and accommodate present and future 

### traffic demands. The study was eventually incorporated into the Garwood to Sagle 

### Project which 

### primarily soughtto realign US 

### Highway 95 and

### to construct an interchange 

### with State 

### Highway

### 54. The Board approved the 

### Garwood

## to Sagle 

### Projectthrough

## its annual approval

## of the federally firnded State Transportation 

### Improvement 

### Plan 

### ("the STIP"), 

### which incorporated 

### the Garwood

## to Sagle 

### Project. Due

### to the size

### of the Garwood 

### to Sagle Project, 

### the Board 

### divided

## it into seven segments. Grathol's parcel is located 

### within the

### Athol Segment. The Board hasthe power 

### of eminent domain pursuant 

### to I.C. $

### 40-311(l). The Board contends that the subject property 

### is needed 

### for the Garwood 

### to Sagle Project,

### Athol Segment, andthat 

### it authorized the condemnation 

### ofthe subject property through its annual approval 

### ofthe STIP. According to 

### MAI appraiser Stanley Moe, the

### fair market value 

### of the subject property is 

### $571,000. In an

### effort to avoid a condemnation action, the Board offered Grathol an additional 

### ten percent 

### above

### the appraised

### fair market 

### value

### for a total 

### offer

## of $628,100. Gratholcountered 

### the Board's 

### offer with a demand 

### for $3 

### million 

### to $3.5 

### million on June 

### 28,2010,

contending thatthe appraisal does not account 

### for the subject propefty' sfrontage, 

### whichwould result from the Sylvar/Roberts Extension. The Board contends that 

### it is not seeking to condemn any portion of the parcel in order to construct the Sylvan/Roberts Extension. It points out that neither the Complaint nor 

### tlle Order

### of Condemnation references the condemnation 

### of any portion 

### of the parcel 

### for construction 

### of the Sylvar/Roberts 

### Extension. In this regard, Jason Minzghor, Project Development Engineer 

### with the Board, contendsthat Grathol is under the mistaken belief that the Board intends to condemn

a portion 

### of its parcel

### for the Sylvan/Roberts Extension because 

### of a meeting held on

### August 

### I, 2010. During that meeting, 

### two property owners, Jameson Mortgage and Frederick Krasnick, approached 

### the Board

### with a proposal 

### to extend Sylvan Road

### to Roberts Road

### through their respective 

### properties. Minzghor asserts 

### that 

### the proposalwas contingent 

### upon Mortgage, Krasnick and Grathol dedicating a portion of their properties for the Sylvar/Roberts Extension 

### in exchange 

### for the resulting frontages that 

### would run through their 

### properties. Minzghor claims that after Grathol rejected the proposal, there have been nofurther plans in this regard. 

### On November 

### 19, 2010, 

### the Board

### filed 

### its Complaint 

### with an attached 

### Order

## of Condemnation,

### which was dated 

### November 17, 2010, and was signed 

### by the Director 

### of the Idaho Transportation Department 

### ("the 

### Director") on behalf

### of the 

### Board. On December 21, 2010, the Board

### filed its Motion for an Order Granting Possession 

### of Real Property pursuant to the 

### "quick-take" provisions 

### of I.C. $

### 7-721. Gruthol 

### filed its Response to the Board's 

### Motion 

### for

an Order Granting Possession 

### of Real Property on January 

### 10,2011, contending, among other 

### things, 

### that 

### the Complaint and

### the Order

## of Condemnation 

### failed

## to meet

### the statutory requirements 

### of I.C. $ 

### 7-707 andthat the Board 

### failed to negotiate 

### in good

### faith. The 

### district court 

### filed its Order Granting Possession 

### of Real Property on January 27, 2011, holding that the requirements 

## of I.C. 

### $ 7-721 werc satisfied 

### and that 

### the amount 

### of

### just compensation was $571,000. The district court then

### filed a Rule 54(b) Certificate onJanuary27,2011, holding that there was no

### just reason

### for delay 

### of the entry 

### of final judgment because the Board established the "quick-take" provisions 

### of I.C. g

### 7-721. On February

### l, 201l, Grathol

### timely frled its Notice 

### ofAppeal. Thereafter, thedistrict court entered Final Judgment on March

### 4,2011. 

## III. IssUEs oN APPEAL

# 1. Whether the Complaint and Order 

### of Condemnation were 

### filed in accordance 

### with I.C. $ 7-707? 

# 2. Whether the Board failedto negotiate in goodfaith pursuantto 

### I.C. 57-721(2)(d)? 

# 3. Whether Grathol is entitled to attomey's fees on appeal pursuant to I.C. $

### l2-l l7? 

# 4. Whether the Board is entitled to attomey's fees on appeal pursuantto I.C. 

### $ 12-121? 

### IV. STANDARD oF 

### REvIEw The 

### "quick+ake" provisions 

### of I.C. $ 7-721(2) 

### allow state entities that possess the power 

### of eminent domain 

### to "obtain property



### . . .

### for a 

### public purpose 

### without thedelay 

### of a lengthy 

# tial;' Payette Lakes 

### ll'ater and Sewer Dist. 

### v. Hays, 103 Idaho 

### 717,718, 653 

### P.2d 438, 439 

### (1982). After commencing an action 

### for condemnation,

### the state

### entity may deposit

### with the 

### court the amount 

### initially determined 

### as'Just compensation" 

### for the 

### property. 

# Id. After a hearing is held, the court can then enter an order enabling the state 

### entity to take possession 

### of and use the property pending a

### full turial. 

### Id. Subsection (2) of 

### I.C. $ 7-721 states thatthe court 

### "shallfirst determine whether or not 

### plaintiff(a) has the right 

### of eminent domain, 

### (b) whether 

### or not the use

### to which the property 

### is

### to be applied 

## is a use authorized 

### by law, (c) whether or notthetaking is necessary 

### to such use, and (d) whether or not 

### plaintiff has sought, 

### in good faith, to purchase the lands sought to 

## betaken...." 

# A. The

### Complaint and the 

### Order of 

### Condemnation Were Filed in Accordance 

### with I.C. s7-707 Grathol contends that the Order 

### of Condemnation was not

### filed in accordance 

### with I.C. $

7-707 (6) because the Director signedthe Order 

### of Condemnation andthe Board never approved the condemnation 

### ofthe subject property through aformal board meeting, 

### which Grathol asserts 

### is contrary 

### to a strict construction 

### of LC. $$ 40-308, 

### 40-3l

## l(l), and 40-505, among others. Grathol further asserts that becausethe Order

### of Condemnation, 

### which Grathol claims contains 

### an express declaration 

### that the Board 

### is extending Sylvan Road

### to Roberts Road through 

### Grathol's parcel, 

### conflicts 

### with the Complaint, 

### which Grathol asserts does 

### not address the Sylvan/Roberts Extension, 

### both are 

### invalid pursuant

### to I.C. $ 7

### -707(6) because

### they 

### do not provide a clear description of the property rights acquired. 

# l. The 

### Director May Sign the Order of Condemnation on Behalf of the 

### Board "The interpretation 

### of a statute is a question 

### of law over

### whichthis Court exercises free 

### review." Doev. Boy Scouts 

### of

### Am.,l48 Idaho 

### 427,430,224P.3d494,497 (2009). Judicial interpretation 

### of a statute begins

### with an examination 

### of the statute's 

### literal

### words. State v.

### Burnight, 132 

### Idaho 654, 

### 659,978 P.2d,214,219

### (1999). "This Court interprets statutes

according totheir plain, express meaning and resorts to

### judiciai construction only 

### if the statute is ambiguous, incomplete, absurd, 

### or arguably 

### in conflict 

### with other 

### laws." Arelv. T

### & L Enter., 

### Inc., 146 Idaho 29, 32, 189 P.3d I 149, 1 I52 (2008). Idaho Code section 7-707(6) states: 

### An order

### of condemnation, or resolution, 

### or other 

### official and 

### binding document entered by the 

### plaintiffwhich setsforth and clearly identifies all property rights to 

### be acquired 

### including 

### rights

### to and 

### from the 

### public way, and permanent and 

### temporary easements

### known 

## or reasonably identifrable 

## to the condemning autnodty. According 

### to the 

### plain language 

### of the statute, an order

### of condemnation must be "entered" by the 

### Board. Pursuant 

### to LC. $40-505, the 

### Director possesses "necessary incidental powers" 

### of administration on behalf 

### of the 

### Board. Black's Law dictionary defines an "incidental 

### power" as 

## "[a] power 

### that, although 

### not expressly granted, 

### must 

### exist because 

## it is necessary 

### to the accomplishment 

## of an erpress 

### purpose." Black's 

### Law Dictionary 1288 

### (9th ed. 2009). Therefore, according 

### to LC. $ 40-505, the Director possesses broad powers

### to carry 

### out the express actions 

### of the 

### Board. Inthis regard, the 

### plain language

### of I.C. $40-505 statesthat the Director acts asthe administrative arm of the 

### Board. The power

### of eminent domain is one ofthe powers exclusively vested by law 

### in the 

### Board. See 

### I.C. $

### 40-311(l). As the record establishes, the Director did not unilaterally condemn the subj ect propertywithout theauthority 

### ofthe Board. Instead, 

### the Board approved 

### of the condemnation

### of the subject 

### property through 

### its annual approval

### of the 

### STIP. 

### &e I.C. $

### 40-310. Althoughthe Order

### of Condemnation was signed 

### by the 

### Director, 

### it was

### filed in the name 

### of the Board, not the Director, and expressly invoked the Board's power 

### of condemnation pursuant 

### to I.C. $

### 40-311(1). 

### It isthe Board, not the Director, who is exercising the power 

### of eminent domain 

### in the Order

### of Condemnation. The 

### Director is merely acting 

### in an administrative capacity on behalf 

### of the Board pursuant 

### to I.C. 

### $ 40-314(3) and Board Policy 

### 8-{3-01 in orderto carry out the Board's express power of condemnation. 

### Grathol's assertion that 

### the Board must 

### hold a board meeting every 

### time 

## it condemns private property 

### for a 

### public purpose 

### is unsupported 

### by the 

### plain language 

### of the statutesthat Grathol cites 

### in its opening 

### brief and impractical due to the sheer size 

### of public roads projects andthe relative infrequency of board meetings. 

### It is

### for these reasons that the Director 

### typically signs orders 

### of condemnation on behalf

### of the 

### Board. Furthermore, the cases that Grathol cites 

### in its opening 

### brief are irrelevant and unconvincing becausethe Board never ceded 

### its powertocondemn private property

### for public purposes tothe 

### Director. Grathol's assertionthat the Board

violated ldaho's Open Meeting 

### Act because 

### it did not hold aformal board meeting 

### to condemn the subject property is

### similarly unconvincing. 

## 2. The Complainl 

### and Order 

## of Condemnation 

### Do Not Express 

### Any Intention to Condemn 

### Any Portion 

### of Grathol's Land

## for the Purpose 

### of the SylvailRoberts Extension Although the Order 

### of Condemnation referstothe Sylvan/Roberts Extension, that section deals

### with rights 

### of access 

### to and

### from the remaining non-condemned 

### portions 

### of Grathol's parcel 

### to various roads and 

### highways. Furthermore, 

### the Order 

### of Condemnation specifically identifies the subject property as being such "property [as] has been designated and shown asthe 

### above parcel number 

### on the plans

## of said project 

### now 

### on

## file in the 

### office

## of the Idaho Transportation 

### Department." The plans refer tothe US-95, Garwoodto Sagle,

### Athol Stage, and 

### map 

### out

## the 16.314 acres

## of the subject 

### property, 

### but they make 

### no reference

## to the Sylvan/Roberts 

### Extension. The Complaint makes reference

### to those plans 

### as

### well when 

### it identifies the subject property, 

### but 

### it also makes no reference to

### the Sylvan/Roberts Extension. Instead, 

### it states that the Board seeks

### to condemn the subject property 

### in order 

### to 

### "widen[] and 

### improv[e]

. . . U.S. Highway 95 south 

### of State Highway 52to north of the community 

### of Sagle

. .



### .

# ." The Complaintfurther elaborates 

### that 

### "[t]he particular segrnent

### of the Project 

### for which Defendants' property 

### is required 

### is U.S. 95 Garwood

### to Sagle

### -Athol Stage, Kootenai County, Idaho, 

### ITD Project No. 4009(791), Key No. 9791 

### ." Thus,there 

### is no basis

### for Grathol's assertionthat the Order

### of Condemnation 

### conllicts with the

### Complaint. Grathol 

### would like this Court

### to consider the possible extension 

### of Sylvan Road to Roberts Road through Grathol's property 

### in thefuture 

### in determining 

### just compensation 

### and whether

### the Complaint conflicts 

### with the Order

### of Condemnation. 

## If Sylvan Road is extended 

### to Roberts Road through Grathol's property 

### inthefuture, then, atthat time, the Board 

### will be required 

### to determine the

### just compensation due 

### for that 

### portion 

### of Grathol's property that 

### is necessary 

### for the 

### project. 

### At this time, 

### this Court refuses 

### to engage 

### in such speculative contemplation. 

# B. The Board Negotiated 

### in Good 

### Faith 

### for the Subject 

### Property Pursuant to 

### l.C. $ 7- 

### 72t(z)(d)Grathol contends that the Board 

### did not negotiate 

### in good

### faith 

### to purchasethe subject

property pursuant 

### to 

### I.C. g 7-721(2)(d) because the appraisal 

### did not include any consideration for the extension 

### of Sylvan Road to Roberts Road across Grathol's parcel. Idaho 

### Code section 7-721 states that 

### "[i]n any proceeding under the provisions 

### of this chapter 

### for the acquisition 

### of real property, the 

### plaintiff may take possession

### of and use such property at any time after

### just compensation has been

### judicially determined and payment thereof 

### made 

### into court."Judicial determination 

### ofjust compensation 

## is satisfied

### when

### the court determines, among other requirements, that the 

### plaintiff has sought, 

### in goodfaith, to purchase the lands sought to betaken andthe 

### court shall enter 

### ar orderthereon 

### which shall be a

### final order as

### to these issues and an appeal may be taken therefrom; provided, however, 

### no appeal therefrom shall stay further proceedings. 

### l.C. S 7

### -721(2)(d). Just compensation is based onfair market value, 

### which is the pricefor 

### which the property that is taken could be sold by an owner 

### willing to sell to a

### willing purchaser on the date 

### of the

### taking. Ada Cnty. 

### Highway Dist. v. 

### Magwire, 104 Idaho 

### 656,658-59,662P.2d237, 

### 23940 (1983). 

### Neitherthe Order 

### of Condemnation 

### nor the Complaint proposes condemnation 

### of any portion 

### of Grathol's parcel for the purpose

### ofthe Sylvan/Roberts 

### Extension. Though the Order 

### of Condemnation 

### briefly mentions the Sylvan/Robens Extension, that section describes 

### right 

### of

access to and from the remaining property belonging to Grathol tothe Sylvan/Roberts Extension. 

### The

### Affidavit 

### of Jason 

### Minzghor asserts 

### that the Board has 

### no intention 

### of condemning any portion 

### of Grathol's parcel for the construction 

### of the Sylvan/Roberts 

### Extension. As mentioned before, Grathol elected notto dedicate its property for the Sylvan/Roberts Extension, causingthe Board

### to abandon that 

### proposal. Because the basis 

### of Grathol's argument relies 

### entirely on its assertion 

### that the 

### Board's 

### offer does 

### not account 

### for the Sylvan/Roberts Extension, 

### this Court 

### holds that the Board negotiated 

### in good

### faith 

### for the subject 

### property pursuant 

### to LC. $ 7- 72r(2)(d). 

# C. Grathol Is 

### Not 

### Entitled to 

### Attorney's Fees on

### Appeal Pursuant to 

### I.C. $ 

### 12-1U Grathol requests attomey's fees on appeal pursuant to I-C. 

### $ 12-117. Because Grathol is not the prevailing party on appeal, 

### it is not entitled to attomey's fees. 

# D. The 

### Board Is 

### Not 

### Entitled to

### Attorney's Fees on

### Appeal Pursuant to 

### LC. S 12-121The Board contendsthat 

### it is entitled 

### to aftomey's fees on appeal pursuant 

### to I.C. 

### $ 12-



### 121 because 

### Grathol acted 

### without 

### a reasonable basis 

### in fact

### or law 

## in filing this appeal. Pursuantto 

### I.C. $ 12-121, the prevailing pany may be awarded attomey's 

### fees'Vhen this Court 

## is left with an abiding 

### belief thatthe appeal has been brought 

## or defended 

### frivolously, unreasonably, or 

### without foundation." Karlson v.

### Harris,l40 Idaho 

### 561,571,97 

### P.3d428,438 (2004). This Court denies the Board's request because 

### I.C. 

### $ 12-117 is the exclusive means 

### for awarding attomey's fees for actions 

### involving state

### entities. See Potlatch Educ. Ass'n v. Potlatch Sch. 

### Dist. No.285,148 Idaho 

### 630,635,226P.3d1277,1282 (2010). 

### \.I. CoNcLUsroN Because

### the Board negotiated 

## in good 

### faith 

## for the subject property 

### and 

### filed its Complaint and Order

### of Condemnation 

### in accordance

### with LC. S7-707,

### this Courtaffirms the 

### district court's decision 

### holding 

### thatthe "quick-take" provisions 

## of LC.

## g 7-721(2'S were satisfied. Neither party is entitled to aftomey's fees on appeal. Costs are awarded tothe Board. Chief Justice 

### BURDICK, Justices 

### EISMANN. J.JONES and HORTON CONCUR,