RONALD E. BUSH, United States Magistrate Judge.
Currently pending before the Court are the following motions: (1) the Kaysers' Motion to Amend Judgment (Docket No. 148), (2) the Kaysers' Motion for an Award of Costs (Docket No. 151, Att. 1), (3) the Kaysers' Motion for an Award of Attorneys' Fees (Docket No. 152), and (4) McClary's Renewed Motion for Judgment as a Matter of Law and Alternative Motion to Alter or Amend the Judgment (Docket No. 153). Having carefully reviewed the record and otherwise being fully advised, the Court enters the following Memorandum Decision and Order:
Through their Second Amended Complaint, the Kaysers asserted the following substantive claims against McClary: (1) breach of contract, (2) tortious interference with contract, (3) trespass, and (4) quiet title/injunction. See Second Am. Compl. (Docket No. 69). Following a five-day jury trial in October 2011, the jury found that McClary's father, James McClary, was competent at the time he executed the underlying Grant of Easement and that there was valid consideration for that same Grant of Easement. See Special Verdict Form, p. 1 (Docket No. 145). In turn, the jury also found that McClary breached the Grant of Easement, trespassed upon the easement, and tortiously interfered with Plaintiff's contract to sell their property to the Richardsons — all by constructing the at-issue fence. See id. at pp. 2-3.
Although finding that McClary breached the Grant of Easement and trespassed upon the easement by building the fence, the jury concluded that the Kaysers suffered no resulting damage on those claims. See id. However, the jury found that, in tortiously interfering with the Kaysers' contract to sell their property to the Richardsons, McClary damaged the Kaysers in the amount of $15,000. See id. at pp. 3-4. The jury additionally assessed punitive damages against McClary in the amount of $8,000. See id. at p. 4.
Through their Motion to Amend Judgment, the Kaysers ask that this Court quiet title to the Grant of Easement in their favor by decreeing the validity of the Grant of Easement; ordering McClary to remove the fence; and, permanently enjoining McClary from taking any action in violation of the Grant of Easement. See Mem. in Support of Mot. to Am. J., pp. 2, 5-9 (Docket No. 148, Att. 1). Separately, the Kaysers request that the punitive damages award be increased to an amount equal to their attorneys' fees. See id. at pp. 2, 9-13. In other motions, the Kaysers also seek to recover their litigation costs and attorneys' fees. See Mot. for an Award of Costs (Docket No. 151, Att. 1); Mot. for an Award of Attys' Fees (Docket No. 152).
Because the Kaysers' post-trial requests for relief necessarily turn on the adequacy of the jury's verdict, McClary's Renewed Motion for Judgment as a Matter of Law/Motion to Alter or Amend the Judgment will be taken up first. If the verdict remains intact, the Court will then consider the Kaysers' Motion to Amend Judgment and related Motion for an Award of Costs and Motion for an Award of Attorneys' Fees.
Presented orally at the close of the Kaysers' case-in-chief on October 6, 2011 and, later, through a formal filing, McClary made a Rule 50(a) Motion for Judgment as a Matter of Law. See Mot. for J. as a Matter of Law (Docket No. 138). At that time, McClary made two arguments: (1) the Kaysers' breach of contract claim (and, presumably, the Kaysers' other claims that are dependent upon the existence of a contract, i.e., the Grant of Easement) fails as a matter of law due to the absence of any consideration; and (2) the Kaysers' request for punitive damages should be stricken because there is no basis to support such a claim. See id. The Court denied the motion when it was raised during trial, and the jury returned a verdict in the Kaysers' favor. McClary now moves to renew her Motion for Judgment as a Matter of Law, pursuant to F.R.C.P. 50(b).
Renewed motions for judgment as a matter of law are made pursuant to Rule 50(b), which states:
Fed.R.Civ.P. 50(b).
"Pursuant to Rule 50 of the Federal Rules of Civil Procedure, a court may grant a motion for judgment as a matter of law ... against a party on a claim or issue where the party has been `fully heard on [that] issue during a jury trial' and the court finds that a `reasonable jury would not have a legally sufficient evidentiary basis' to find for that party." Funai Elec. Co., Ltd. v. Daewoo Elecs. Corp., 593 F.Supp.2d 1088, 1092-93 (N.D.Cal.2009) (citing Fed.R.Civ.P. 50(a) & (b)). "Where a party moves for [a motion for judgment as a matter of law] in a case that has been tried to a jury, the court must determine whether `there exists evidence of record upon which a jury might properly have returned a verdict in [the non-movant's] favor when the correct legal standard is applied.'" Id. (citations omitted). "The test is whether the evidence, construed in the light most favorable to the non[-]moving party, permits only one reasonable conclusion, and that conclusion is contrary to that of the jury." White v. Ford Motor Co., 312 F.3d 998, 1010 (9th Cir.2002); see also E.E.O.C. v. Go Daddy Software, Inc., 581 F.3d 951, 961 (9th Cir.2009) ("We review a jury's verdict for substantial evidence in ruling on a properly made motion under Rule 50(b) The test applied is whether the evidence permits only one reasonable conclusion, and that conclusion is contrary to the jury's verdict."). Therefore, first, the court must determine the correct law; second, the court must review the jury's factual findings to determine whether they are supported by substantial evidence. See Funai Elec., 593 F.Supp.2d at 1092 (citation omitted). While the jury's factual findings are given "substantial deference," the legal standards the jury applies are considered de novo to determine, as a matter of law, whether the correct standards have been used. Id. at 1092-93 (citation omitted).
A Rule 50(b) motion for judgment as a matter of law is not a freestanding motion; rather, it is a renewed Rule 50(a) motion. See Go Daddy, 581 F.3d at 961. That is, under Rule 50(a), a party must make a Rule 50(a) motion for judgment as a matter of law before a case is submitted to a jury and, if the judge denies or defers ruling on the motion, and the jury then returns a verdict against the moving party, the party may renew its motion under Rule 50(b). See id. "Because it is a renewed motion, a proper post-verdict Rule 50(b) motion is limited to the grounds asserted in the pre-deliberation Rule 50(a) motion." Id. "Thus, a party cannot properly raise arguments in its post-trial motion for judgment as a matter of law under Rule 50(b) that it did not raise in its pre-verdict Rule 50(a) motion." Id.; see also Fed.R.Civ.P. 50(b) Adv. Comm. Notes 1991 ("A post[-]trial motion for judgment can be granted only on grounds advanced in the pre-verdict motion."); Fed.R.Civ.P. 50(b) Adv. Comm. Notes 2006 ("Because the Rule 50(b) motion is only a renewal of the pre[-]verdict motion, it can be granted only on grounds advanced in the pre[-]verdict motion.").
Still, in ruling on a Rule 50(b) motion based on grounds not previously asserted in a Rule 50(a) motion, "`[courts] are limited to reviewing the jury's verdict for plain error, and should reverse only if such plain error would result in a manifest miscarriage of justice.'" Go Daddy, 581 F.3d at 961 (quoting Janes v. Wal-Mart Stores, Inc., 279 F.3d 883, 888 (9th Cir.2002)). "`This exception ... permits only extraordinarily deferential review that is limited to whether there was any evidence to support the jury's verdict.'" Go Daddy, 581 F.3d at 961 (quoting Yeti by Molly, Ltd. v.
McClary contends that Idaho's Economic Loss Doctrine "prohibits recovery of purely economic losses in tort" and, as such, "the jury should not have been instructed to award damages for Plaintiffs' [tortious interference with contract] claim." See Mem. in Supp. of Renewed Mot. to Am. J., pp. 4 & 9 (Docket No. 153, Att. 1). Such a description of the Idaho Economic Loss Doctrine, however, is overly broad.
As a general matter, absent personal injury or property damage, Idaho's Economic Loss Doctrine prohibits recovery of purely economic losses
In the Court's research, this precise issue has not been ruled upon by Idaho
In examining these decisions, the Court is persuaded by their logic and reasoning, and is further convinced that the Economic Loss Doctrine is not an outright bar to a tortious interference with contract claim for at least two reasons.
First, a claim for tortious interference with contract is intended to protect a party's economic interest in contractual relations. Accordingly, economic losses must be recoverable and it would not be sensible for the tort to be recognized under Idaho law on one hand, and then effectively eviscerated by application of the Economic Loss Doctrine on the other hand. See, e.g., Restatement (Second) of Torts § 774A (1979) ("One who is liable to another for interference with a contract or prospective contractual relation is liable for damages for the pecuniary loss of the benefits of the contract or the prospective relation [and] consequential losses for which the interference is a legal cause ...."); Restatement (Second) of Torts § 766 (1979) ("One who intentionally and improperly interferes with the performance of a contract ... between another and a third person by inducing or otherwise causing the third person not to perform the contract, is subject to liability to the other for the pecuniary loss resulting to the other from the failure of the third person to perform the contract.").
Second, the very nature of a tortious interference with contract claim presumes that the parties are not in contractual privity with one another. Therefore, in the ordinary circumstance, the injured party
Thus, this Court finds that, if confronted with the instant question, the Idaho Supreme Court would conclude that the Economic Loss Doctrine does not outright bar the Kaysers' tortious interference with contract claim as McClary argues.
McClary re-incorporates the arguments from her previous Rule 50(a) Motion for Judgment as a Matter of Law (Docket No. 138), and argues that there was no consideration for the Grant of Easement. See Mem. in Supp. of Renewed Mot. to Am. J., pp. 10-15 (Docket No. 153, Att. 1) ("In this matter, Plaintiffs failed to provide any evidence of consideration for the easement agreement at issue. In fact, it is undisputed that no consideration was given for the January 11, 2000 easement agreement.") (emphasis in original).
Therefore, it cannot be said as a matter of law that there is no legally sufficient evidentiary basis for the jury to find for the Kaysers on the issue of consideration — particularly given the acknowledged presumption in place. Therefore, McClarys' Renewed Motion for Judgment as a Matter of Law and, alternatively, Motion to Amend or Alter the Judgment is denied in this respect.
On October 12, 2011, consistent with the verdict of the jury, this Court entered a Judgment in favor of the Kaysers and against McClary in the amount of $23,000 ($15,000 attributable to McClary's tortious interference with contract and $8,000 in punitive damages). See J. (Docket No. 147). Within that Judgment, the Court added:
See id. at p. 2. The Kaysers' Motion to Amend Judgment seeks to finally resolve their quiet title/injunction claim, while also increasing the amount of punitive damages from $8,000 to at least the amount of their attorneys' fees.
A court has "considerable discretion" in ruling upon a Rule 59(e) motion since specific grounds for a motion to amend or alter a judgment are not listed in the Rule. See McDowell v. Calderon, 197 F.3d 1253, 1255, n. 1 (9th Cir.1999). However, amending a judgment is "an extraordinary remedy which should be used sparingly." Id.
"In general, there are four basic grounds upon which a Rule 59(e) motion may be granted: (1) if such motion is necessary to correct manifest errors of law
The Kaysers' Quiet Title/Injunction claim is encapsulated within two paragraphs of the Kaysers' Second Amended Complaint:
See Second Am. Compl., ¶¶ 18 & 19 (Docket No. 69). Accordingly, through their Rule 59(e) motion, the Kaysers request that the Court (1) quiet title to the Grant of Easement in their favor by decreeing the validity of the Grant of Easement, (2) order McClary to remove the fence, and (3) permanently enjoin McClary from taking any action in violation of the Grant of Easement. See Mem. in Supp. of Mot. to Am. J., pp. 2 & 5-9 (Docket No. 148, Att. 1).
There is implicit opposing argument contained in her own Rule 50(b)/ 59(e); however, otherwise, McClary offers no specific opposition to the Kaysers equitable relief efforts. With that in mind, and in keeping with the jury's Special Verdict relating to the Grant of Easement's formation, the Court hereby confirms the validity of the Grant of Easement and, accordingly, quiets title as to the Grant of Easement in the Kaysers' favor. Further, the Court orders McClary to remove the at-issue fence within two weeks of the entry of an Amended Judgment, following this Memorandum Decision and Order.
However, once the fence is removed, any future harm to Plaintiff is speculative. Without actual or imminent injury moving forward (or any suggestion in the record that Plaintiff will disregard the legal effect of the Grant of Easement), the Court will not enter a permanent injunction. See 11A Fed. Prac. & Proc. Civ. § 2942 (2d ed.) ("Because injunctive relief looks to the future, and is designed to deter rather than punish, relief will be denied if the conduct has been discontinued on the ground that the dispute has become moot and does not require the court's intervention."). Therefore, the Kaysers' Motion to Amend Judgment is denied in this respect. Having said this, there is now a judicial determination of the validity of the Grant of Easement, and in the event McClary does violate the Grant of Easement (in any manner), the Kaysers
With all this in mind, and to maintain consistency with the jury's findings and the evidence presented at trial, the Judgment will be amended to include the following language:
The Kaysers seek to amend the portion of the Judgment regarding punitive damages to include at least the amount of their attorneys' fees. See Mem. in Supp. of Mot. to Am. J., p. 9 (Docket No. 148, Att. 1) (citing I.C. § 6-807).
The primary purpose behind an award of punitive damages is to deter similar conduct from happening in the future. See Vandelin v. Costco Wholesale Corp., 140 Idaho 416, 95 P.3d 34, 49 (2004); see also Jury Inst. No. 33 (Docket No. 142) ("... you may, in addition to any compensatory damages to which you find Plaintiffs are entitled, award to Plaintiffs an amount which will punish Defendant and deter Defendant and others from engaging in similar conduct in the future."). Recovery of attorneys' fees, therefore, is not the objective behind a punitive damages award — to be sure, specific Idaho statutes
As pointed out by the Kaysers in their briefing, the Court addressed this issue during jury deliberations. See Mem. in Supp. of Mot. to Am. J., p. 13 (Docket No. 148, Att. 1). When presented with a question from the jury concerning whether it was allowed to award "court costs," the Court indicated (without objection) that such matters were to be decided by the Court, at the conclusion of the case. Additionally, the jury had no evidence before it about such matters. The Kaysers' arguments do not compel a different result now.
First, the case law relied upon by the Kaysers (while admittedly subject to the Kaysers' interpretation, though mostly pre-dating Idaho Code section 6-1604) is not clear-cut. As McClary points out, the majority of these cases largely exist to justify an existing punitive damages award,
Second, by amending a judgment to increase a punitive damages award to at least the amount of attorneys' fees incurred, the Court would be usurping legislative authority. Currently, Idaho Code outlines the statutory avenues for recovering attorneys' fees — in fact, the Kaysers have cited to those sections of the Idaho Code in support of their contemporaneous Motion for an Award of Attorneys' Fees. Overlooking these sections in favor of Idaho Code section 6-807 sidesteps the will of the Idaho Legislature, particularly when no Idaho statute specifically authorizes an attorneys' fees award as contemplated by the Kaysers' arguments in these respects.
Therefore, even assuming that Idaho Code section 6-807 represents substantive Idaho law, for the above-referenced reasons, the Court cannot conclude that the amount of the jury's $8,000 punitive damages award is somehow unsupported by the record or the product of legal error so as to justify an amendment to the Judgment. As a result, the Kaysers' Motion to Amend Judgment is denied in this respect.
An award of standard costs in a diversity case is governed by Rule 54(d) and the federal court's local rules. Champion Produce,
Local Rule 54.1(b) defines prevailing party as "the one who successfully prosecutes the action or successfully defends against it, prevails on the merits of the main issue, and the one in whose favor the decision or verdict is rendered and judgment entered." Dist. Idaho Loc. Civ. R. 54.1(b); see also Idaho R. Civ. P. 54(d)(1)(B) ("In determining which party to an action is a prevailing party and entitled to costs, the trial court shall in its sound discretion consider the final judgment or result of the action in relation to the relief sought by the respective parties") Here, the jury rejected McClary's affirmative defenses, while finding that she (1) breached the Grant of Easement, (2) trespassed, and (3) tortiously interfered with Plaintiff's contract to sell their property to the Richardsons. Additionally, as to the tortious interference with contract claim, the jury awarded Kaysers $15,000 in damages, along with an additional $8,000 punitive damages award. Finally, in this Memorandum Decision and Order (and stemming directly from the jury's verdict), this Court has granted the Kaysers' Motion to Amend Judgment regarding the Kaysers' quiet title/injunction claim. Under these circumstances, the Kaysers are the prevailing party. The fact that the Kaysers did not fully prevail upon alternate theories of recovery against McClary, coupled with the jury perhaps not awarding the Kaysers as much in damages as they might have preferred, does not change this conclusion.
Local Rule 54.1(c) defines the types of taxable costs available to the prevailing party under Rule 54(d)(1). See Dist. Idaho Loc. Civ. R. 54.1(c)(1-7). Through the Kaysers' Bill of Costs, supported by Anna E. Eberlin's Affidavit, the Kaysers seek to recover (1) $180.00 in clerk's fees and service fees pursuant to Local Rule 54.1(c)(1); (2) $1,589.07 in deposition costs pursuant to Local Rule 54.1(c)(3); (3) $498.96 in witness fees pursuant to Local Rule 54.1(c)(4); and (4) $37.67 in copying costs pursuant to Local Rule 54.1(c)(5). See Bill of Costs (Docket No. 151); see also Eberlin Aff. (Docket No. 151, Att. 3). McClary has not objected to any specific portion of these requested amounts, and the Kaysers' Bill of Costs complies with the requirements of Local Rule 54.1. Therefore, costs will be taxed against McClary in the amount of $2,305.70 and the Kaysers' Motion for Award of Costs is granted in this respect.
The Kaysers seek an additional $2,195.10 under Local Rule 54.1(c)(8) for certain "other items" of costs, including $1,100.00 in expert witness fees/costs, $95.10 in miscellaneous online research, and $1,000.00 in mediation expenses. See id.; see also Mem. in Supp. of Mot. For Award of Costs, pp. 4-5 (Docket No. 151, Att. 2); Dist. Idaho Loc. Civ. R. 54.1(c)(8)
First, pursuant to Local Rule 54.1 and 28 U.S.C. § 1821, witnesses "in attendance at any court of the United States, ... or before any person authorized to take his deposition pursuant to any rule or order of a court of the United States" may be paid an attendance fee of $40 per day for each day's attendance, as well as travel costs, with certain limitations. 28 U.S.C. § 1821; Dist. Idaho Loc. Civ. R. 54.1(c)(4). "Fees for expert witnesses are not taxable in a greater amount than that statutorily allowable for ordinary witnesses." Dist. Idaho Loc. Civ. R. 54.1(c)(4). The Court has already permitted the recovery of those fees outlined by federal law and Local Rule and, in its discretion, will not expand the scope of related expenses (to include the costs of appraisals and trial testimony fee) now. The Kaysers' Motion for Award of Costs is therefore denied in this respect.
Second, the Kaysers' attempts to recover online research fees (exclusive of the automated legal research they request in their Motion for Attorneys' Fees) and mediation costs are similarly rejected given not only the fact that there is no solid legal basis upon which to reimburse such expenses within this District, but also because doing so would potentially act as a disincentive to mediating claims generally. The Kaysers' Motion for Award of Costs is therefore denied in these respects.
In sum, the Kaysers' $4,500.80 cost request is reduced by $2,195.10. Accordingly, the Kaysers are awarded costs in the amount of $2,305.70.
Idaho law governs the award of attorneys' fees in this matter because federal courts must follow state law as to attorneys' fees in diversity actions. See Interform Co. v. Mitchell, 575 F.2d 1270, 1280 (9th Cir.1978) (applying Idaho law). The Kaysers request attorneys' fees in the amount of $147,149.70 pursuant to Idaho Code section 12-120(3), Idaho Code section 12-121, and Idaho Code section 6-202.
Idaho Code section 12-120(3) provides that the prevailing party "shall be allowed" an award of reasonable attorneys' fees in any civil action to recover on ... "any commercial transaction." I.C. § 12-120(3). The statute defines the term "commercial transaction" to mean "all transactions except transactions for personal or household purposes." Id. Under Idaho Code section 12-120(3), an award of attorneys' fees is proper if "the commercial transaction is integral to the claim, and constitutes the basis upon which the party is attempting to recover." Brower v. E.I. DuPont De Nemours and Co., 117 Idaho 780, 792 P.2d 345, 349 (1990).
The Kaysers are the prevailing party. See supra. As the prevailing party, the Kaysers argue that "the gravamen" of this lawsuit is the commercial transaction between their predecessors-in-interest (the Larsens) and McClary's predecessor-in-interest (her father, James McClary). See Mem. in Supp. of Mot. for an Award of Attys' Fees, p. 14 (Docket No. 152, Att. 1) ("Each of the claims stems from the original commercial transaction between the
Generally speaking, disputes seeking a determination of property rights are not considered commercial transactions within Idaho Code section 12-120(3). See Baxter v. Craney, 135 Idaho 166, 16 P.3d 263, 271-72 (2000) ("[T]his action is primarily a dispute over property ownership and easement rights and as such does not fall within the meaning of a commercial transaction as defined in Idaho Code section 12-120(3) and as applied by the courts.") (citing Jerry J. Joseph C.L.U. Ins. Assoc. v. Vaught, 117 Idaho 555, 789 P.2d 1146 (Idaho Ct.App.1990) (denying attorneys' fees under Idaho Code section 12-120(3) in action where, inter alia, property owner sought judgment to establish access easement and to remove fence hindering use of easement); Chen v. Conway, 121 Idaho 1006, 829 P.2d 1355, 1361 (Idaho Ct.App.1992) (determining that quiet title action involving dispute over existence of prescriptive easement was not a commercial transaction under Idaho Code section 12-120(3)); Durrant v. Christensen, 117 Idaho 70, 785 P.2d 634 (1990) (holding that action in which landowners sought adjudication of water rights and permanent restraining order prohibiting defendant from interfering with diversion and use of water was not based on commercial transaction as defined in Idaho Code section 12-120(3)); Sun Valley Hot Springs Ranch, Inc. v. Kelsey, 131 Idaho 657, 962 P.2d 1041 (1998) (concluding that action to determine ownership of easement rights did not fall within the meaning of commercial transaction under Idaho Code section 12-120(3) and therefore attorneys' fees were properly denied)).
Here, the Kaysers' Second Amended Complaint highlights the fact that this action, while possibly remotely connected to
Courts have the authority to award reasonable attorneys' fees to prevailing parties under Idaho Code section 12-121, which provides in relevant part that "[i]n any civil action, the judge may award reasonable attorney's fees to the prevailing party or parties, provided that this section does not alter, repeal or amend any statute which otherwise provides for the award of attorney's fees." I.C. § 12-121. However, such fees "may be awarded by the court only when it finds, from the facts presented to it, that the case was brought, pursued or defended frivolously, unreasonably or without foundation ...." Id. R. Civ. P. 54(e)(1). This has been held to require a finding that "the position of the nonprevailing party is plainly fallacious and, therefore, not fairly debatable." Assocs., Northwest, Inc. v. Beets, 112 Idaho 603, 733 P.2d 824, 826 (Idaho Ct.App.1987); see also Bonaparte v. Neff, 116 Idaho 60, 773 P.2d 1147, 1151 (Idaho Ct.App.1989). An award of attorneys' fees under Idaho Code section 12-121 is at the discretion of the Court, "but it must be supported by findings and those findings, in turn, must be supported by the record." Partout v.
Here, the Kaysers argue that (1) McClary's conduct in violating the Grant of Easement warrants, in and of itself, an attorneys' fees award under Idaho law, and (2) McClary's defenses to the Kaysers' claims lacked evidentiary support, separately justifying an award of attorneys' fees. See Mem. in Supp. of Mot. for an Award of Attys' Fees, pp. 5-10 (Docket No. 152, Att. 1). McClary naturally disagrees, arguing in response that she maintained legitimate defenses to the Grant of Easement's formation, as supported by the evidence presented at trial. See Opp. to Mot. for an Award of Attys' Fees, pp. 4-9 (Docket No. 154).
The Court disagrees with the Kaysers, to the extent they argue that Skelton v. Haney, 116 Idaho 511, 777 P.2d 733 (1999), compels an award of their attorneys' fees. See Mem. in Supp. of Mot. for an Award of Attys' Fees, pp. 5-7 (Docket No. 152, Att. 1). As McClary points out, in Skelton, the defendants presented no defenses to the easement's validity; in contrast, here, McClary argued that the Grant of Easement failed due to a lack of valid consideration and, also, Mr. McClary's alleged incapacity to contract. See Opp. to Mot. for an Award of Attys' Fees, pp. 4-6 (Docket No. 154) ("Considering the Skelton defendants had no remotely valid defenses to the validity of the easement, it goes without saying that the court was justified in awarding fees based on defendants making it virtually impossible for plaintiffs to get to their homes. That is not the situation the Court is dealing with here."). The Kaysers' reading of Skelton is just too expansive. Nonetheless, McClarys' defenses themselves are lacking in substance.
It is clear from the trial record that the jury did not believe McClary's claims regarding the alleged invalidity of the easement. However, the fact that she lost the trial battle does not compel, nor necessarily even suggest, a finding that her position in this lawsuit was "brought, pursued or defended frivolously, unreasonably or without foundation," or that her position was "plainly fallacious and, therefore, not fairly debatable." See Id. R. Civ. P. 54(e)(1); see also Assocs., Northwest, Inc., 733 P.2d at 826 (Idaho Ct.App.1987); Bonaparte, 773 P.2d at 1151. To answer that question requires a deeper examination of the evidence — the full constellation of facts pertaining to McClary's conduct and actions contemporaneous to the execution of the easement by her father, and her conduct and actions contemporaneous with and following her learning of the easement after her father had passed away. In the Court's mind, that deeper examination of the evidence reveals that McClary's position in this lawsuit was unreasonable and without foundation, and that her actions in setting the stage for the filing of this lawsuit, and in defending against it, were fallacious and unsupportable.
McClary's claim that her father was incompetent to enter into an easement agreement was based, according to her testimony, upon her belief that her father was not competent to enter into the Grant of Easement. She also believed that the easement itself was not supported by valid
However, it is the underpinnings of McClary's positions that are important now — not the fact that she took such positions or held these beliefs at the summary judgment stage.
To begin, the primary evidence in the trial record that Mr. McClary was a man too incapacitated to grant a written easement is McClary's own testimony. In some settings, the fact of McClary's testimony alone on such matters might be enough to resist an argument that the case had been defended unreasonably and without foundation. That is not so in this case.
The Court has considered carefully the evidence pertaining to and the testimony of those persons who were in regular and even daily contact with Mr. McClary during the pertinent time period. That evidence described a man of diminishing capacities as he aged and a man with various health difficulties, but they did not describe a man suffering from great dementia or ongoing mental confusion. Mr. McClary was largely housebound because of physical difficulties, according to the evidence at trial, but nonetheless he was making decisions every day about his daily activities and he followed that routine rigorously.
McClary, on the other hand, lived in Colorado, and would visit with her father by telephone (in short conversations she described as perfunctory) and she would come to Boise on an irregular basis and visit him in his home. Her distance from Boise meant also that her contact with her father was much more limited than the contact of his caregivers and family friends in Boise. Yet, the record indicates no effort on her part to fully investigate (or to reconcile against her own viewpoint) the assessment of persons who were regularly around her father as to what his mental capacities may have been at the time he executed the written easement document.
In contrast, however, there was evidence already known to McClary, or readily available to her, that supported the Kaysers' position that Mr. McClary had made a voluntary and knowledgeable decision to sign the written easement agreement, even if she believed it was a foolish thing for him to have done. In that regard, the record indicates that the view plane across the contested lot was never directly obstructed during the years it was owned by Mr. McClary, including not just the years that the adjoining property was owned by the Larsens, but also during the years the property was owned by the Kaysers. In that time period, the contested lot was maintained as a broad expanse of grass, with various shrubs and trees around portions of its perimeter, but with no view-obstructing fences or other structures. At any time, if the particulars of the agreement that the Kaysers allege had been made had not been honored and adhered to by Mr. McClary, there could have been a fence erected, or landscaping or structures placed, that would have directly affected the view plane. That never occurred. It is inescapable that McClary was aware of how the lot was maintained, and the fact that the manner in which it was maintained permitted a view from the home owned first by the Larsens, and later by the Kaysers, long before she took the position that the written easement was somehow unenforceable.
McClary's view of her father's incapacity to execute the Grant of Easement is made questionable by other facts in the record, as well. For instance, during the period of time when McClary alleges her father was incompetent to enter into the Grant of Easement, and in the years that followed before his death, he was acting as the trustee for McClary's mother's trust, of which McClary was an ongoing beneficiary. Yet, McClary did not seek to have her father declared incompetent to serve as trustee for the trust.
McClary testified that she first became aware of the written easement when her fiancé discovered it on the desk in her father's home office, shortly after he had passed away. See Jt. Tr. Ex. 1009. Her voice was quite indignant at trial, when she said that after reading the easement that it
McClary's testimony made abundantly clear that she was angered by the fact of the written easement. It also is clear that her reaction to what had happened was not the product of any reasonable investigation, but rather stemmed from her own, subjective, perception that her father had given away something that she believed he should not have done. Consider that she was not present in 1979 when the oral agreement was first reached at the time Mr. McClary sold the adjoining lot to the Larsens, when the record indicates that Mr. McClary promised Paul Larsen that Lot B would be maintained so as not to obstruct the view from the lot that was sold to the Larsens. Neither, she admitted, was she present when the written agreement was executed by her father in January, 2000. But her statements and her actions demonstrated that she was mad about it, didn't like it, was angry that it reduced the value of the property she was going to inherit, and she didn't want to accept it, regardless of what the facts surrounding the granting of the easement and its validity might have been.
Although both she and Mr. Kayser describe the other as being rude and intemperate at the time McClary went to see Mr. Kayser after the easement had been discovered, the Court finds Mr. Kayser's testimony regarding that encounter more credible. From that testimony, and from the entirety of McClary's testimony, the Court is left with the impression that McClary did not want to dispassionately consider the Kaysers' point of view, and certainly didn't want to consider that her father might have willingly, with a competent mind to do so, granted the Easement in a manner that was proper and enforceable.
Following that encounter with the Kaysers, McClary testified that she "talked to attorneys, realtors, some neighbors." After that, she says that she never told anyone that she thought the easement was valid. Implicit in her testimony is an assertion, on her part, that she believed the easement was invalid. McClary's actions, however, strongly belie such a belief. In 2004 after her father's death, she brought the easement to the attention of the personal representative of her father's estate. According to McClary, the personal representative and the attorney for the estate were unaware of the existence of the easement. After learning about it, McClary said that the personal representative had a reappraisal done of Mr. McClary's home, and the real property associated with it (including the lot affected by the easement), so that the value of the home and its connected real property was lessened, thereby lessening the value of the estate for estate tax purposes. Although McClary could have contested those efforts, she did not do so.
In 2006, after McClary had received title to her father's home, she talked to Gloria
During this period between the death of her father in 2004 and her contemporaneous inheritance of her father's home, and the attempt by the Kaysers to sell their home beginning in 2009, McClary did nothing to seek to invalidate the easement. She was well aware that the Kaysers firmly believed that the easement was valid. At any time during that period, if she believed so strongly that it was invalid, she could have filed a judicial action seeking a declaratory judgment that the easement was invalid. She did not do so.
In 2009, that changed. First, McClary tried to sell her father's home, but only with Lot A, not also with Lot B — the lot affected by the easement. The only plausible inference to be drawn from that effort is that she wanted to try to sell the home and Lot A separately from Lot B, in order to try to market Lot B as a building lot. For whatever reason, the home and Lot A did not sell.
In the meantime, McClary had the financial benefit of the position she took with the taxing authorities (that the easement was valid), and her hand had not been forced to openly take some other position. However, presumably in large part because of the dilemma she faced in trying to sell Lot B as a residential lot with the view easement restrictions, she was working behind the scenes. Sometime in the summer of 2009, she contacted Art Berry, a Boise commercial real estate broker who lived in the same Hillcrest Country Club neighborhood as the McClarys and the Kaysers. McClary solicited his assistance in trying to sell the lot, or negotiate a deal with the Kaysers to purchase the easement so as to remove the easement's encumbrance upon Lot B. Mr. Berry's initial feelers to potential buyers apparently were unproductive. He reported that to McClary, and had a further discussion with her of possibly trying to purchase the easement from the Kaysers, which obviously would have made it easier to sell Lot B. That led to this e-mail from McClary to Mr. Berry on August 6, 2009:
See Pls.' Tr. Ex. 12.
This e-mail, capturing as it does McClary's mindset about the easement issues in an unguarded moment, contains a nearly complete unraveling of her purported reasons for challenging the validity of the easement in this lawsuit. First, it demonstrates that she was unwilling to test the easement in a lawsuit. She did, however, want to "repurchase" the easement, but only at a presumably reduced price that she was hoping the Kaysers might agree to after she attempted to "make a sale [of their house] problematic." Second, her e-mail, with its unvarnished
Initially, McClary's efforts in that regard were petty: "I am trying to make the lot look as bad as possible," she wrote to Berry, and she said at trial that she had "no duty ... to mow the lawn for their pleasure." Later, she tried to maneuver behind the scenes, which led to a contact by Mr. Berry with Mr. Kayser in which Mr. Berry said that "he was trying to help Pam Cleary [sic] down the street sell her father's home and adjacent lot." Mr. Berry told Mr. Kayser that McClary had told him "there is a cloud hanging over the marketability of the lot based upon a view easement agreement which you and her father struck some years ago." See Def.'s Tr. Ex. 552. On behalf of McClary, Mr. Berry asked if "there would be a possibility of repurchasing that easement to make the lot buildable ... [or] to repurchase the easement for a lesser amount and create a restriction on the building pad on the vacant lot so as to preserve some view for the house...." Id.
On September 17, 2009, Mr. Kayser responded to Mr. Berry's inquiries, stating in relevant part:
Id.
The proof at trial corroborated each of the points raised by Mr. Kayser. His trial testimony in particular was consistent with this description of events, and was clearly believed by the jury over McClary's testimony about such matters. But more significant, for these purposes, is the fact that
After receiving Mr. Kayser's September 17, 2009 correspondence, Berry reported back to McClary, stating that he had "sent a detailed e-mail to Kayser indicating [he] represented [McClary] and asked for a purchase offer price to remove the easement," and that Kayser had "sent back a very polite email outlining the history of the easement relationship and indicating that he was merely the "inheritor" of the easement since it was negotiated and filed between Paul B. Larsen and [McClary's] Dad ...." Pls.' Tr. Ex. 13. Berry also asked about the sewer line through the middle of Lot B, and the lot line adjustments, asking if McClary knew anything about those things. Finally, Berry said that someone had surfaced who was interested in buying the Kaysers' house, and who was also interested in purchasing Lot B. Berry asked McClary to give him a price for which she would be willing to sell the lot. Id.
Following these events, McClary testified that she was "keeping an eye" on Boise property values (which she said were "dropping"), presumably in the context of her efforts to sell her parents' home, when she discovered that a sale was pending on the Kaysers' home. When the "sold" sign appeared, she made direct contact with the Kaysers' realtor, to say that her lawyer would be contacting the realtor about the easement, and then McClary's lawyer did just that, which led to further communications between McClary's lawyer and Mr. Kayser, after which Mr. Kayser asked his lawyer to communicate with McClary's lawyer. That led to an email from Stephen Grant, on behalf of the Kaysers, to McClary's attorney, Julie Klein. In that email, Mr. Grant repeats again the salient facts that the Kaysers contend supported the validity of the easement. See Def.'s Tr. Ex. 555.
Although for years McClary had accepted the validity of the easement in seeking and obtaining a property tax reduction, the marketing of the Kaysers' home apparently raised both her ire and the ante. The Kaysers were not dissuaded from seeking to sell their property by the contacts from McClary's lawyer. That fact should not have surprised McClary, given the conversation and written communications on the subject that had taken place five years earlier. Yet, McClary still did not seek a judicial declaration of her rights. Instead, she hired a contractor to build a fence along the property line between the McClary property and the Kayser property, directly and fully obstructing the view plane. As was her unmistakable intent, the building of the fence scuttled the pending sale.
All of these actions reflect decisions made by someone not confident that she had a legitimate and reasonable basis to challenge the easement granted by her father. Rather, they reflect decisions made by McClary from spite and from a misplaced and unsupportable belief that she could have her way by making life miserable for the Kaysers, particularly in regard to any attempt they might make to sell their home.
Viewed through such a lens, refined with the benefit of a more developed record in a trial, and for the reasons described at length above, the Court finds that McClary's "defenses" are unreasonable, unjustified, and offend Idaho Code section 12-121. Accordingly, Idaho Code section 12-121 applies to award the Kaysers their reasonable attorneys fees. The Kaysers' Motion for an Award of Attorneys' Fees is therefore granted in this respect.
Relative to the Kaysers' trespass claim, the jury determined that McClary trespassed upon the easement by constructing a fence. See Special Verdict Form, p. 2 (Docket No. 145). Although the jury also concluded that McClary's trespass did not cause damage to the Kaysers (see id. at p. 3), the Kaysers alternatively seek to recover their attorneys' fees under Idaho Code section 6-202 — Idaho's statute dealing with "actions for trespass." Idaho Code section 6-202 reads:
I.C. § 6-202.
Courts interpret Idaho Code section 6-202 to apply "when the trespass is shown to have been willful and intentional, and the wronged party seeks treble damages therefore.... In all other circumstances, the common law principles relating to trespass actions apply." Mock v.
In Idaho, the traditional common law requirements for a trespass claim include (1) an invasion, (2) which interferes with the right of exclusive possession of the land, and (3) which is a direct result of some act committed by the defendant. See id. Consistent with these elements, the Kaysers' Second Amended Complaint identifies only a claim for "trespass," without any reference to Idaho Code section 6-202 or the possibility for treble damages. Further, the Kaysers' proposed jury instruction as to their trespass claim (adopted in all substantive respects within the Court's final jury instructions) identified their burden as having to prove "(1) [t]hat Defendant physically intruded or invaded Plaintiffs' interest in real property; (2) [t]hat Plaintiffs did not consent to Defendant's physical intrusion or invasion of Plaintiffs' interest in real property; [and] (3) [t]he nature and extent of the damages to Plaintiffs and the amount thereof." See Pls.' Prop. Jury Inst. No. 29 (Docket Nos. 56 & 99);
The significance of the distinction between the two claims is self-evident when examining a party's ability to recover attorneys' fees. Because the Kaysers never brought their trespass claim under Idaho Code section 6-202 but, instead, under Idaho common law principles, Idaho Code section 6-202 is not available to the Kaysers to recover their attorneys' fees. Therefore, the Kaysers' Motion for an Award of Attorneys' Fees under Idaho Code section 6-202 is denied in this respect.
Having determined that Idaho Code section 12-121 applies, the Court must now determine whether the requested attorneys' fees are reasonable. "The most useful starting point for determining
What constitutes a reasonable fee is a discretionary determination for the trial court, to be guided by the criteria of Idaho Rule of Civil Procedure 54(e)(3). See Sanders v. Lankford, 134 Idaho 322, 1 P.3d 823 (Idaho Ct.App.2000) (citing Kelly v. Hodges, 119 Idaho 872, 811 P.2d 48, 52 (Idaho Ct.App.1991)). "The factors of Rule 54(e)(3) include: time and labor; difficulty; skill required; prevailing charges; fixed or contingent fee; time limitations; amount and result; undesirability of the case; relationship with the client; awards in similar cases; costs of automated research; and any other factors." Sun Valley Potato Growers, Inc. v. Texas Refinery Corp., 86 P.3d 475, 483 (Idaho 2004). The Court may not single out or give undue weight to any one factor such as to exclude the other factors listed in Rule 54(e)(3). See id. (citing DeWils Interiors, Inc. v. Dines, 106 Idaho 288, 678 P.2d 80, 82 (Idaho Ct.App.1984)).
The Kaysers seek $145,537.00 in attorneys' fees. See Mem. in Supp. of Mot. for an Award of Attys' Fees, pp. 17-18 (Docket No. 152, Att. 1); see also Eberlin Aff. in Supp. of Mot. for an Award of Attys' Fees (Docket No. 152, Att. 3). In response, McClary argues that this amount is excessive and unreasonable because (1) the issues in this action were not particularly novel or complex, (2) a large amount of time went into the Kaysers' unsuccessful Motion for Partial Summary Judgment, and (3) the transition in attorneys from Wayne Meuleman to Jeff Sykes required Mr. Sykes "to get up to speed on a case that had been ongoing for a significant period of time." See Opp. to Mot. for an Award of Attys' Fees, pp. 16-19 (Docket No. 154). The Court takes up McClary's arguments in reverse order below.
First, the Court recognizes that a new attorney staffed to the case nearly one year after billing began may have some catching up to do. Even if that occurred here, any redundant billing is more than offset by the $55.00-$80.00 difference
Second, while the Kaysers' Motion for Partial Summary Judgment was unsuccessful, the Court will not carve out those expenses here. Motion practice is an accepted and entirely legitimate means of trying to narrow issues, or decide disputes
Third, it is obvious that a considerable amount of the Kaysers' time and related expense correlated to McClary's extensive defense tactics — including, removing the action from state court to federal court, later seeking to remand the action back to state court, and moving to continue/vacate the trial date. Extensive discovery, and its attendant expense, originated because of the nature of McClary's arguments (such as the need to review her father's medical records), and there were multiple motions filed by the parties dealing with discovery disputes, expert witnesses, and trial in limine requests. Those circumstances, combined with the apparent unhappiness of the parties toward each other which seemed to color the litigation, made this case a pricey proposition for both parties, even though the Court had alerted counsel early on, given the way the case was proceeding, about the Court's concern that "no one will be happy at the end of this."
Such issues notwithstanding, the Court must still make an independent review of the request for attorneys' fees, to assess the reasonableness of the same. A law firm's billings to a client may be entirely reasonable in the context of the relationship between the law firm and the client, and the work undertaken and performed, but the total fees represented in those billings are not necessarily all reasonable when it comes to deciding how much of that amount should be assessed against the opposing party. That is the circumstance in this case.
The Court has scrutinized the billing records of the Kaysers' counsel carefully. There are some particular instances where one might quibble with the time spent on a particular task, or the need for the task to be performed at all. But those are easy targets in hindsight — in the course of litigation, and particularly during the course of trial preparation, such high and low water marks are much more difficult to discern, particularly when one hallmark of effective lawyering is prepared lawyering. Although in some cases the Court will excise particular time entries and fee charges for excessiveness, or for lacking any reasonable necessity, there were no particular instances in this case that the Court found appropriate for such action.
However, this case involved two lawyers working on behalf of the Kaysers — a partner and an associate — for nearly the entirety of its course. That is not unusual by itself. Indeed, those tasks that can be performed well by a less-experienced lawyer, billing at a lower rate than a partner, is a common and appropriate practice in every law firm, and is beneficial to the client. Even so, in this case the Court finds that it was not necessary to have two lawyers involved at trial. That is not to say that the two lawyers involved in this case were not working diligently, or that there were not tasks that the less-experienced associate was doing that would have been required of the partner if the associate had not been involved. Rather, the Court concludes that the presence of both lawyers at trial, and the full trial preparation preceding and during trial by two lawyers, even if determined by the law firm to be appropriate on behalf of its clients, is not something that is appropriately
Accordingly, during the 17-day period referenced above, Mr. Sykes billed a total of 83.4 hours while Ms. Eberlin billed a total of 105.4 hours.
Therefore, the Kaysers are entitled to recover $128,705.00 in attorneys' fees, $687.50 in paralegal/clerical fees, and $1,612.70 in automated legal research for a total of $131,005.20. The Court finds this amount to be consistent with the reasonable rates in a case of this nature, appropriately and necessarily incurred, and in line with the rates prevailing in the community.
For the foregoing reasons, IT IS HEREBY ORDERED that:
1. The Kaysers' Motion to Amend Judgment (Docket No. 148) is GRANTED, in part, and DENIED, in part, as follows:
a. The Court hereby confirms the validity of the Grant of Easement and, accordingly, quiets title to the Grant of Easement in the Kaysers' favor. Further, the Court orders McClary to remove the at-issue fence within two weeks of the entry of an Amended Judgment, following this Memorandum Decision and Order. The Kaysers' Motion to Amend Judgment is therefore granted in this respect.
b. Once the fence is removed, any future harm to the Kaysers is naturally speculative. Without actual or imminent injury moving forward, there is no reason to permanently enjoin McClary from violating
c. The Kaysers' punitive damages award will not be increased to an amount commensurate with the Kaysers' attorneys' fees. The Kaysers' Motion to Amend Judgment is therefore denied in this respect.
2. The Kaysers' Motion for an Award of Costs (Docket No. 151, Att. 1) is GRANTED, in part, and DENIED, in part. The Kaysers' $4,500.80 cost request is reduced by $2,195.10. Accordingly, the Kaysers are awarded costs in the amount of $2,305.70.
3. The Kaysers' Motion for an Award of Attorneys' Fees (Docket No. 152) is GRANTED, in part, and DENIED, in part. The Kaysers are entitled to recover $128,705.00 in attorneys' fees, $687.50 in paralegal/clerical fees, and $1,612.70 in automated legal research for a total of $131,005.20.
4. McClary's Renewed Motion for Judgment as a Matter of Law and Alternative Motion to Alter or Amend the Judgment (Docket No. 153) is DENIED.