Opinion ID: 874364
Heading Depth: 2
Heading Rank: 2

Heading: Applicability of I.R.C.P. 54(e)

Text: Alternatively, the Holcombs argue that even if the Zenners are the prevailing party, the district court erred by awarding the Zenners actual attorney fees pursuant to the language of the contract, rather than considering the factors under I.R.C.P. 54(e)(3) to determine a reasonable amount of fees and costs to award. The Holcombs argue that, although the contract provision does not state reasonable attorney fees, I.R.C.P. 54(e) is nevertheless applicable because it would strain the plain meaning of I.R.C.P. 54(e)(1) to interpret the rule to mean that a contract must provide for reasonable attorney fees in order for I.R.C.P. 54(e) to apply. The application of [a] procedural rule is a question of law on which we exercise free review. Blaser v. Cameron, 116 Idaho 453, 455, 776 P.2d 462, 464 (Ct.App.1989). Under I.R.C.P. 54(e)(1), a court may award reasonable attorney fees ... when provided for by ... contract. (Emphasis added). I.R.C.P. 54(e)(3) sets forth the factors the court must consider to determine what amount is reasonable. However, I.R.C.P. 54(e) is only applicable if the reasonableness criteria found in I.R.C.P. 54(e)(3) is not inconsistent with the attorney fees provision in the contract. I.R.C.P. 54(e)(8). I.R.C.P. 54(e)(8) states: The provisions of this Rule 54(e) relating to attorney fees shall be applicable... to any claim for attorney fees made pursuant ... to any contract, to the extent that the application of this Rule 54(e) to such a claim for attorney fees would not be inconsistent with such other ... contract. Here, the district court found the contract calls for actual attorney fees. The Holcombs failed to appeal that finding, but argue, as a matter of law, the contract provision is subject to I.R.C.P. 54(e). Requiring the court to determine the amount of attorney fees by considering the factors in I.R.C.P. 54(e)(3) would be contrary to the language of the contract and, therefore, contrary to I.R.C.P. 54(e)(8). Due to this inconsistency, I.R.C.P. 54(e) is not applicable. The contract provision does not contemplate the court's involvement in determining whether the fee is reasonable. Even if the Holcombs had asserted a different interpretation of the contract provision, which they did not, we would construe the contract most strongly against the person who prepared the contract. Win of Michigan, Inc. v. Yreka United, Inc., 137 Idaho 747, 751, 53 P.3d 330, 334 (2002). The Holcombs cite to various Idaho cases in which this Court applied the I.R.C.P. 54(e) factors to determine the amount of attorney fees to award where the fees were awarded by contract; however, all of these cases are distinguishable from the facts and issues at hand. [3] Therefore, we hold that I.R.C.P. 54(e)(3) is inapplicable because it is inconsistent with the language of the contract. However, we caution that contractual language such as its attorney fees or all attorney fees does not give the prevailing party an unqualified right to unlimited attorney fees. The non-prevailing party may still argue that the amount claimed is an unconscionable penalty. Clampitt v. A.M.R. Corp., 109 Idaho 145, 148, 706 P.2d 34, 37 (1985) (holding that a liquidated damages amount set by contract is enforceable where the amount bears a reasonable relation to the damages actually sustained). The Holcombs also argue the district court should have applied I.R.C.P. 54(e)(3) in determining the amount of fees to award because the Zenners asserted in their pleadings that they were entitled to reasonable attorney fees. This argument appears to bring the parties' expectations concerning the meaning of the contract provision into contention. However, at oral argument, counsel for the Holcombs stated that interpretation of the contract was not an issue in this case. Counsel went on to state the contract language says what it says. Because the interpretation of the contract is not being challenged, this argument need not be addressed any further. Finally, the Holcombs argue that I.R.C.P. 54(e) should apply because the district court used I.R.C.P. 54(d)(1) to determine prevailing party status. However, this Court has held that when a contract provision limits the award of attorney fees to a `prevailing party,' the I.R.C.P. 54(d)(1) definition of `prevailing party' [is] applicable. However, if the... contract sets forth a different standard, the determination of the award of attorney fees [is] based upon the ... contractual standard, not the prevailing party standard of I.R.C.P. 54(d)(1). Farm Credit Bank of Spokane v. Wissel, 122 Idaho 565, 569 n. 4, 836 P.2d 511, 515 n. 4 (1992). Here, the contract provision used the prevailing party standard and, therefore, I.R.C.P. 54(d)(1) is applicable in determining prevailing party status. However, the contract set forth a different standard for determining the amount of attorney fees to award. Thus, I.R.C.P. 54 is not applicable to the determination of attorney fees, which is based upon the ... contractual standard. Id. Based on the analysis set forth above, we affirm the district court's award of actual attorney fees pursuant to the language of the contract.