Opinion ID: 2514530
Heading Depth: 2
Heading Rank: 5

Heading: The district court abused its discretion in determining the amount of attorney's fees awarded to Respondent.

Text: In civil actions for commercial transactions attorney's fees are to be awarded to the prevailing party. I.C. § 12-120(3). The critical test in determining whether a civil action is for a commercial transaction is whether the commercial transaction comprises the gravamen of the lawsuit; it must be integral to the claim and constitute the basis upon which the party is attempting to recover. Esser Elec. v. Lost River Ballistics Technologies, Inc., 145 Idaho 912, 921, 188 P.3d 854, 863 (2008). In Lexington Heights Development, LLC v. Crandlemire, 140 Idaho 276, 92 P.3d 526 (2004), this Court found that a commercial transaction existed where 90 acres of real property was to be developed into a subdivision. Lexington Heights, 140 Idaho at 287, 92 P.3d at 537. Similarly, the gravamen of this case is a commercial transaction where the Operating Agreement was entered into by the parties for the purpose of developing real property into a subdivision. Thus, I.C. § 12-120(3) is applicable. The amount of attorney's fees to be awarded under I.C. § 12-120(3) is committed to the district court's discretion. Lettunich, 141 Idaho at 435, 111 P.3d at 120 ( citing Eastern Idaho Agricultural Credit Ass'n v. Neibaur, 133 Idaho 402, 412, 987 P.2d 314, 324 (1999)). The burden is on the party opposing the award to demonstrate that the district court abused its discretion. Eastern Idaho Agricultural Credit Ass'n, 133 Idaho at 412, 987 P.2d at 324. As noted above, 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. Jane Doe, 145 Idaho at 651, 182 P.3d at 708 (citation omitted). When awarding attorney's fees, a district court must consider the applicable factors [4] set forth in I.R.C.P. 54(e)(3) and may consider any other factor that the court deems appropriate. Lee v. Nickerson, 146 Idaho 5, 10-11, 189 P.3d 467, 472-73 (2008) ( citing Parsons v. Mut. of Enumclaw Ins. Co., 143 Idaho 743, 747, 152 P.3d 614, 618 (2007) ( quoting Hines v. Hines, 129 Idaho 847, 855, 934 P.2d 20, 28 (1997))). Though it is not necessary for the court to address all of the I.R.C.P. 54(e)(3) factors in writing, the record must clearly indicate the court considered all of the factors. Id. However, the bottom line in an award of attorney's fees is reasonableness. See Lettunich, 141 Idaho at 435, 111 P.3d at 121 (finding the attorney's fees award was unreasonably excessive where the district court did not consider the I.R.C.P. 54(e)(3) factors under a standard of reasonableness). In this case, the district court properly recognized the awarding of attorney's fees as an act of discretion and acted within the outer bounds of such discretion by considering the I.R.C.P. 54(e)(3) factors, but the court did not reach its decision through an exercise of reason. The district court judge stated: On the attorney's fees, I could put the attorneys under oath and have them examined and cross-examined and try to figure out how much time was spent on every little thing and what claim and counterclaim it related to and go for all day trying to figure that out. But I did sit through the trial. I did practice law for 25 years doing litigation. I've sat on many, many, many court trials; many, many jury trials as a judge; and I know what attorneys charge in this locality. I know what is excessive work [sic] and what is reasonable work. I know what needs to be done. So I think having to go through the jury trial, which would have been avoided had the counterclaim been dropped, getting ready for that and doing that is about a $10,000 project. So I'm going to award $10,000 under 12-120, Part 3, to Respondent, which I think is reasonable. And I've reviewed all of the subparts to Rule 54(e) in calculating that amount. I've spent hours and hours reading this over, but I don't want to bore you with reciting everything the Supreme Court may need to know. But I have given it a lot of thought. Soand obviously, this is a commercial transaction, so once you find that and find a prevailing party somewhat, even though there's mixed relief, there is some amount of attorney's fees that have to be awarded under Rule 12-120, Part 3. It is unclear why the district court determined that the attorney's fees submitted by Respondent were excessive, other than the judge's vague statement that he knows what is excessive and what is reasonable based on his litigation experience. In determining the case to be about a $10,000 project, the district court seems to pull the award of attorney's fees out of thin air. Basing attorney's fees on pure conjecture is inappropriate. It appears that the district court underestimated the work required of Respondent's attorney, but without more this Court does not have the information necessary to determine what would be a reasonable award of attorney's fees. Therefore, we remand on the issue of attorney's fees with instructions to the district court to make a finding as to why the requested attorney's fees were excessive.