Transport Truck & Trailer, Inc. v. Freightliner, LLC

FILED
NOT FOR PUBLICATION MAR 01 2010

MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS

FOR THE NINTH CIRCUIT

TRANSPORT TRUCK & TRAILER, No. 08-35855
INC.,
D.C. No. 1:06-cv-00282-BLW
Plaintiff-counter-defendant -
Appellant,
MEMORANDUM *
and

TRANSPORT EQUIPMENT LEASING,
LLC,

Plaintiff,

v.

FREIGHTLINER, LLC,

Defendant-counter-claimant -
Appellee.

TRANSPORT EQUIPMENT LEASING No. 08-35894
LLC,
D.C. No. 1:06-cv-00282-BLW
Plaintiff,

and

*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
TRANSPORT TRUCK & TRAILER,
INC.; et al.,

Plaintiffs-counter-defendants -
Appellees,

v.

FREIGHTLINER, LLC,

Defendant-counter-claimant -
Appellant.

TRANSPORT TRUCK & TRAILER, No. 09-35169
INC.,
D.C. No. 1:06-cv-00282-BLW
Plaintiff-counter-defendant -
Appellee,

v.

FREIGHTLINER, LLC,

Defendant-counter-claimant-
plaintiff - Appellant,

v.

WILLARD W. HOWELL,

Defendant-counter-claimant -
Appellee.

Appeal from the United States District Court

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 for the District of Idaho
B. Lynn Winmill, Chief District Judge, Presiding

Argued and Submitted January 13, 2010
Seattle, Washington

Before: KLEINFELD and TALLMAN, Circuit Judges, and SETTLE, *** District
Judge.

We affirm the district court’s grant of summary judgment for defendant

Freightliner, LLC, on Transport Truck & Trailer, Inc.’s claims, and for defendant

Transport Truck on Freightliner’s counterclaims, and its decision not to award

attorneys’ fees to either side.

1. Preclusive effect of state administrative agency findings.

The district court applied issue preclusion to bar relitigation of factual

findings made by the state agency during the administrative proceeding. We

review de novo the district court’s determination that collateral estoppel is

available. Miller v. County of Santa Cruz, 39 F.3d 1030, 1032 (9th Cir. 1994)

(citations omitted). Where “collateral estoppel is available, we review for abuse of

discretion the district court’s decision to give preclusive effect to the agency

decision.” Id. (citation omitted).

***
The Honorable Benjamin Hale Settle, United States District Judge for
the Western District of Washington, sitting by designation.

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 We affirm the district court’s determination that Transport Truck was

precluded from relitigating the issues that were finally determined by the Idaho

Department of Transportation in its administrative hearing on the franchise

termination. The record reflects that Transport Truck had a full and fair

opportunity to litigate the issues before the state administrative agency, and that the

state administrative proceedings met the requirements of fairness set forth in

United States v. Utah Construction & Mining Company, 384 U.S. 394, 422 (1966).

Idaho state courts apply res judicata to issues and claims determined by Idaho

administrative agencies. See J & J Contractors v. Idaho Transp. Bd., 797 P.2d

1383, 1385 (Idaho 1990) (“The doctrine of claim preclusion, or res judicata,

applies to the effect of administrative decisions.”) (citations omitted); see also

Ticor Title Co. v. Stanion, 157 P.3d 613, 617 (Idaho 2007) (“The doctrine of res

judicata covers both claim preclusion (true res judicata) and issue preclusion

(collateral estoppel).”) (citation omitted). Thus, application of issue preclusion is

available and appropriate. The district court did not abuse its discretion in giving

the state agency’s decision preclusive effect. Miller, 39 F.3d at 1032 (citing

University of Tennessee v. Elliot, 478 U.S. 788, 797-99 (1986)); see also Misischia

v. Pirie, 60 F.3d 626, 629 (9th Cir. 1995).

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 2. Summary Judgment on Transport Truck’s Claims

We review de novo the district court’s grant of summary judgment. Carmen

v. S. F. Unified Sch. Dist., 237 F.3d 1026, 1029 (9th Cir. 2001). We affirm the

district court’s grant of summary judgment in favor of Freightliner on each of

Transport Truck’s claims.

Transport Truck failed to present sufficient evidence supporting its claim for

breach of the implied covenant of good faith and fair dealing beyond what had

already been presented in the four-day hearing before the state agency’s hearing

officer. The hearing officer had already considered the evidence and relevant

factors and found that Freightliner had not acted in bad faith. Because the issues

presented had already been litigated and determined against Transport Truck, and

Transport Truck had failed to present additional evidence, Transport Truck did not

show that there was a genuine issue of material fact preventing summary judgment

in favor of Freightliner.

Transport Truck contends that it raised questions of material fact concerning

whether Freightliner interfered with Transport Truck’s negotiations in 2003 for its

sale to the Papé Group, and thus should go to trial on its claim of intentional

interference with prospective economic gain. But Transport Truck’s Second

Amended Complaint does not mention the 2003 negotiations with the Papé Group

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with which Freightliner allegedly interfered, and thus did not put the defendant on

notice of that claim. Because the claim was not pleaded, it does not prevent

summary judgment.

Transport Truck did not establish a genuine issue of material fact on its

claim arising out of the new Freightliner dealership hiring some of Transport

Truck’s former employees. It demonstrated neither that the conduct, an

announcement in the newspaper, was tortious, nor that damages were proximately

caused by interference with Transport Truck’s employment contracts. For a

tortious interference with contractual relations claim, Idaho law requires

knowledge by the interfering party of the existence of the contract or prospective

economic advantage, intentional interference without justification, causation, and

damages. Idaho First Nat’l Bank v. Bliss Valley Foods, Inc., 824 P.2d 841, 858-59

(Idaho 1991).

3. Summary Judgment on Freighliner’s Counterclaims

Freightliner’s counterclaims are barred by the limitation of remedies clause

in the parties’ contract, which expressly prohibits “consequential damages . . . such

as lost profits.” Termination of the franchise agreement is the remedy for breach

contracted for by the parties, and Freightliner has already terminated it.

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 4. Attorneys’ Fees

We review for abuse of discretion a district court’s award of attorneys’ fees

under state law. See Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 894,

898 (9th Cir. 2006). We review de novo whether a state statute permits attorneys

fees. See O'Hara v. Teamsters Union Local No. 856, 151 F.3d 1152, 1157 (9th Cir.

1998).

Idaho Code § 12-120(3) allows for the reasonable award of attorneys’ fees to

the prevailing party in any action to recover on a contract. Idaho Code § 12-

120(3); City of McCall v. Buxton, 201 P.3d 629, 638 (Idaho 2009). Because this

case arises out of a dispute over the obligations inherent in the franchise contract

between Transport Truck and Freightliner, Idaho Code §12-120(3) applies and fees

may be awarded to the prevailing party.

Although prevailing party fees were available under Idaho law, the district

court did not abuse its discretion by finding that there was no prevailing party in

the litigation. Under Idaho law, the district court has discretion to determine which

party prevailed in the litigation. Shore v. Peterson, 204 P.3d 1114, 1125 (Idaho

2009). The court considers three principal factors in determining which party, if

any, prevailed: “(1) the final judgment or result obtained in relation to the relief

sought; (2) whether there were multiple claims or issues between the parties; and

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(3) the extent to which each of the parties prevailed on each of the claims or

issues.” Nguyen v. Bui, 191 P.3d 1107, 1112 (Idaho App. 2008) (interpreting

Idaho R. Civ. P. 54(d)(1)(B)). Moreover, “[w]hen both parties are partially

successful, however, it is within the court’s discretion to decline an award of

attorney fees to either side.” Shore, 204 P.3d at 1125 (citing Israel v. Leachman,

72 P.3d 864, 867 (Idaho 2003)). In determining whether a trial court abused its

discretion, Idaho appellate courts consider “whether the trial court: (1) perceived

the issue as one of discretion; (2) acted within the outer boundaries of this

discretion and consistently with the legal standards applicable to the specific

choices available to it; and (3) reached its decision by an exercise of reason.” Id. at

1126.

The district court did not abuse its discretion in declining to award attorneys’

fees to either side. First, it identified the issue as one within its discretion.

Second, it acted within Idaho law by declining to award attorneys’ fees to either

side where both parties had been partially successful (and partially unsuccessful).

Finally, it gave clear reasons for deciding not to award fees. In particular, the

district court examined the alleged respective “values” of the claims and

counterclaims and compared them. Because both sides lost their claims and no

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damages were awarded to either side, the district court found that this comparison

was unhelpful in determining which party was the “prevailing” party.

Because the district court properly applied state law in reaching its decision

on attorneys’ fees, the district court did not abuse its discretion in refusing to award

attorneys’ fees to either side.

AFFIRMED.

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