IN THE COURT OF APPEALS OF THE STATE OF IDAHO
Docket No. 34961
SUNNYSIDE INDUSTRIAL AND )
PROFESSIONAL PARK, LLC an Idaho ) 2009 Opinion No. 33
limited liability company and SUNNYSIDE )
PARK UTILITIES, INC., an Idaho ) Filed: April 28, 2009
corporation, )
) Stephen W. Kenyon, Clerk
Plaintiffs-Appellants, )
)
v. )
)
EASTERN IDAHO PUBLIC HEALTH )
DISTRICT, fka DISTRICT SEVEN )
HEALTH DEPARTMENT, )
)
Defendant-Respondent. )
)
Appeal from the District Court of the Seventh Judicial District, State of Idaho,
Bonneville County. Hon. Joel E. Tingey, District Judge.
Order denying motion for attorney fees, affirmed; order denying motion for
reconsideration of attorney fees, affirmed.
Fuller & Carr, Idaho Falls, for appellant. Mark R. Fuller argued.
Hopkins, Roden, Crockett, Hansen & Hoopes, Idaho Falls, for respondent.
Gregory L. Crockett argued.
______________________________________________
PERRY, Judge
Sunnyside Industrial and Professional Park, LLC and Sunnyside Park Utilities, Inc.
appeal from the district court’s order denying its motion for attorney fees pursuant to I.C. §§ 12-
117 and 12-121. Sunnyside also appeals from the district court’s order denying its motion for
reconsideration of attorney fees. For the reasons set forth below, we affirm.
I.
FACTS AND PROCEDURE
Sunnyside developed commercial real estate and provided sewer and water services to
some of the developed lots. Eastern Idaho Public Health District, f/k/a District Seven Health
1
Department, granted Sunnyside a permit to install an underground septic tank and sewage
disposal system. After the system was installed in compliance with the Health District’s
specifications, the Health District lifted sanitary restrictions. Ten years later, the system failed
and overflowed, causing sewage to spill into the drain field. The Health District granted
Sunnyside a permit to install a temporary system to alleviate the overload and gave Sunnyside
the permanent options of connecting with the city’s sewer system through annexation or
installing a large soil absorption system. After the Health District’s deadline passed for
Sunnyside to present a plan for an acceptable permanent solution, the Health District gave notice
of its intent to re-impose the original sanitary restrictions on the property. Sunnyside appealed to
the district director. The director affirmed the notice of intent to re-impose restrictions because
Sunnyside had not complied with the conditions upon which sanitary restrictions were initially
lifted. Sunnyside appealed to the District Board of Health. The Board also affirmed the notice
of intent to re-impose restrictions, but held that the Department of Environmental Quality (DEQ)
should provide the remedy. Thereafter, the Health District issued a certificate of disapproval and
re-imposed sanitary restrictions on the property.
Sunnyside filed a petition in the district court for declaratory judgment and judicial
review of the administrative decision seeking to set aside the notice of intent to re-impose
sanitary restrictions and the subsequent re-imposition of sanitary restrictions, as well as the
certificate of disapproval which had been imposed against the property. The district court, in
granting relief to Sunnyside, held that the DEQ had authority to re-impose sanitary restrictions
and to issue certificates of approval and disapproval. The district court further concluded that the
Health District could not usurp these specific grants of authority in asserting its responsibility to
do all things required for the preservation and protection of the public health. The DEQ granted
some of this authority to the Health District, but the district court found that Sunnyside operated
a central system under the jurisdiction of the DEQ. Accordingly, the district court held the
Health District acted without authority and its notices of intent to re-impose sanitary restrictions,
certificate of disapproval, and the re-imposition of sanitary restrictions were null and void.
Sunnyside then filed a motion for costs pursuant to I.R.C.P. 54(d) and attorney fees
pursuant to I.C. §§ 12-117 and 12-121. The district court awarded Sunnyside costs as the
prevailing party, but declined to award attorney fees under either section. The district court held
that attorney fees under I.C. § 12-117 were not appropriate because the Health District was not a
2
state agency according to I.C. § 39-401 and had acted with a reasonable basis in fact or law.
Even though it acted without authority, the district court held that the Health District acted
reasonably to mitigate a public health concern caused by the overflowing septic tank and sewage
pooling on the surface of the property. The district court held that attorney fees were
inappropriate under I.C. § 12-121 because an appeal seeking judicial review of an agency ruling
does not institute a civil action. Furthermore, the district court held that the matter was not
brought, pursued or defended frivolously, unreasonably, or without foundation. Sunnyside filed
a motion for reconsideration of its motion for attorney fees, which was denied by the district
court. Sunnyside appeals.
II.
ANALYSIS
A. Attorney Fees under I.C. § 12-117
Sunnyside argues that the Health District is a state agency for the purposes of an award of
attorney fees under I.C. § 12-117.1 Additionally, Sunnyside argues that the Health District acted
without a reasonable basis in fact or law because, when a state agency acts outside the scope of
its authority, the action is per se unreasonable. Therefore, Sunnyside contends that it was
entitled to attorney fees as the prevailing party in the district court. The Health District responds
that it is not a state agency for purposes of an award of attorney fees under I.C. § 12-117 because
the legislature clearly provided in the Health District’s enabling statute, I.C. § 39-401, that health
districts not be considered state agencies. Furthermore, the Health District contends that it acted
reasonably to protect the public health and safety from the threat posed by the sewage
overflowing from Sunnyside’s overburdened septic system. Additionally, the Health District
argues that it possessed a reasonable belief that it had authority over systems like Sunnyside’s
1
Idaho Code Section 12-117(1) provides:
Unless otherwise provided by statute, in any administrative or civil
judicial proceeding involving as adverse parties a state agency, a city, a county or
other taxing district and a person, the court shall award the prevailing party
reasonable attorney's fees, witness fees and reasonable expenses, if the court finds
that the party against whom the judgment is rendered acted without a reasonable
basis in fact or law.
3
and that attorney fees should not be awarded based on a reasonable, but erroneous, interpretation
of an ambiguous statute.
Idaho Code Section 12-117 is not a discretionary statute. Rincover v. State, Dept. of Fin.,
Sec. Bureau, 132 Idaho 547, 549, 976 P.2d 473, 475 (1999). Therefore, we exercise free review
over the decision of a district court applying I.C. § 12-117. Fischer v. City of Ketchum, 141
Idaho 349, 356, 109 P.3d 1091, 1098 (2005). We first consider whether the Health District may
be properly considered a state agency for purposes of an award of attorney fees pursuant to I.C. §
12-117. When interpreting a statute, we will construe the statute as a whole to give effect to the
legislative intent. George W. Watkins Family v. Messenger, 118 Idaho 537, 539-40, 797 P.2d
1385, 1387-88 (1990); Zener, 135 Idaho at 355, 17 P.3d at 299. The plain meaning of a statute
will prevail unless clearly expressed legislative intent is contrary or unless plain meaning leads to
absurd results. Watkins Family, 118 Idaho at 540, 797 P.2d at 1388; Zener, 135 Idaho at 355, 17
P.3d at 299.
This case requires us to interpret I.C. § 12-117 which provides that a district court shall
award attorney fees to a party who brings a successful civil suit against a state agency that has
acted without a reasonable basis in fact or law. Idaho Code Section 12-117 incorporates the
definition of agency found in the Idaho Administrative Procedure Act (IDAPA), I.C. § 67-5201.
That Section defines an “agency” as:
[E]ach state board, commission, department or officer authorized by law to make
rules or to determine contested cases, but does not include the legislative or
judicial branches, executive officers listed in section 1, article IV, of the
constitution of the state of Idaho in the exercise of powers derived directly and
exclusively from the constitution, the state militia or the state board of correction.
(Emphasis added). This definition does not unambiguously provide whether health districts are
to be considered state boards, commissions, or departments. However, even if the plain language
were clear, I.C. § 39-401 expressly provides the legislative intent regarding the Health District’s
status as a state agency which is contrary to the position which Sunnyside advocates. That
Section provides:
The various health districts, as provided for in this chapter, are not a single
department of state government unto themselves, nor are they a part of any of the
twenty (20) departments of state government authorized by section 20, article IV,
Idaho constitution, or of the departments prescribed in section 67-2402, Idaho
Code.
4
It is legislative intent that health districts operate and be recognized not as
state agencies or departments, but as governmental entities whose creation has
been authorized by the state, much in the manner as other single purpose
districts. Pursuant to this intent, and because health districts are not state
departments or agencies, health districts are exempt from the required
participation in the services of the purchasing agent or employee liability
coverage, as rendered by the department of administration. However, nothing
shall prohibit the health districts from entering into contractural [contractual]
arrangements with the department of administration, or any other department of
state government or an elected constitutional officer, for these or any other
services.
....
This section merely affirms that health districts created under this chapter
are not state agencies, and in no way changes the character of those agencies as
they existed prior to this act.
(Emphasis added). The legislative intent of I.C. § 39-401 is clear that health districts are not to
be considered state agencies or departments.
In construing legislative acts it is our duty to ascertain the purpose and intent of the
legislature and give force and effect thereto. Watkins Family, 118 Idaho at 539, 797 P.2d at
1387. In this case, we need look no further than the legislature’s express intent that health
districts not be considered as state agencies. However, a review of the legislative history of this
section further supports this conclusion. The Health District’s current enabling statute was
introduced in 1975 as Senate Bill 1264. Prior to committee discussions, the legislature sought
the advice of the Idaho Attorney General as to the agency status of health districts as then
constituted. The Attorney General responded with an advisory opinion concluding that health
districts were state agencies. See Op. Att’y Gen. No. 38-75, p. 117 (1975). The Senate
committee minutes of January 26, 1976, reflect an acknowledgement of, and disagreement with,
the Attorney General’s opinion. Therefore, the committee recommended the inclusion of a
statement of legislative intent, which later became I.C. § 39-401, to remedy the Attorney
General’s opinion and ensure that health districts not be considered as state agencies. Likewise,
the House committee minutes of March 3, 1976, reflect the compromise between health districts
and the Department of Health and Welfare reducing the liability of the state toward health
districts and mooting the Attorney General’s opinion. At the end of the opinion, the Attorney
General concluded:
5
[T]he legislature may exclude the boards and departments of the public health
districts from any requirements otherwise imposed upon state agencies. . . . [I]n
acknowledgement of the unique role health district departments and boards play,
legislation could be promulgated to exclude them from statutory requirements
otherwise applicable to other state agencies. The form and wisdom of such
legislation is the domain of the legislature.
Op. Att’y Gen. No. 38-75, at 122-23. By codifying its legislative intent in I.C. § 39-401, the
legislature accepted this proposal and provided that health districts were exempt from the
requirements imposed on other state agencies because health districts were not to be considered
state agencies.
Sunnyside argues that I.C. § 39-401 provides that the legislature only intended that health
districts not be considered state agencies to exempt them from the required participation in the
services of the purchasing agent or employee liability coverage. Sunnyside contends that I.C. §
39-401 does not provide that the legislature intended to exempt health districts from the
application of I.C. § 12-117. However, I.C. § 39-401 does not provide that the legislature
intended that health districts not be considered state agencies for the sole purpose enumerated
therein. Rather, the section provides that the exemption from required participation in the
services of the purchasing agent or employee liability coverage is just one byproduct of the
expressed legislative intent. To make matters even more clear, at the end of the section, the
legislature unequivocally reaffirmed its position that the purpose of I.C. § 39-401 was to provide
that health districts are not state agencies.
Sunnyside contends that the Health District is authorized to make rules and determine
contested cases and, therefore, it falls under the definition of agency provided by the IDAPA.
However, this argument ignores the clear legislative intent provided by I.C. § 39-401.
Regardless of the functions performed by the Health District, the legislature has provided that it
is not to be considered a state agency. This unequivocal legislative intent is applicable even if
the Health District performs some agency actions. Sunnyside claims that the legislature cannot
grant the Health District agency authority to make rules and decide contested cases while
simultaneously exempting the Health District from the burdens of state agency status. However,
Sunnyside provides little authority in support of this proposition, and we are unpersuaded that
the legislature was without this authority. The legislature clearly can grant certain agency
6
functions to an entity and, at the same time, declare that performing those functions does not
raise said entity to “state agency” status.
Sunnyside argues that the Health District’s former name, District Seven Health
Department, implies that it qualifies under the IDAPA definition of agency. Sunnyside cites Bott
v. Idaho State Building Authority, 122 Idaho 471, 479, 835 P.2d 1282, 1290 (1992), for the
proposition that courts should consider the name of the entity as a factor in determining agency
status. In Bott, the Supreme Court said that the name of the entity is of some assistance, but it
did not look to the name as a conclusive factor. After recognizing that the name of the entity was
of assistance in determining that it was not a state agency, the Court looked to the powers
granted to the agency in order to determine the legislative intent in its creation. Based on that
review, the Court determined that the legislature did not intend that the Idaho State Building
Authority be treated as an agency for the purposes of attorney fees pursuant to I.C. § 12-117. In
this case, as we stated above, we do not have to strain to ascertain the legislative intent because
the legislature has clearly provided its intent in I.C. § 39-401. The Health District’s former name
does not change the express legislative intent that it not be considered a state agency.
Sunnyside argues that in Rincover, 132 Idaho at 550, 976 P.2d at 476, the Supreme Court
broadly applied I.C. § 12-117 to the activities of agencies and other enumerated governmental
agencies. Therefore, Sunnyside contends that the section should apply to the Health District
because the legislature provided in I.C. § 39-401 that it is a governmental entity whose creation
is authorized by the state. However, Rincover refers to the other governmental entities
enumerated by I.C. § 67-5201(2) which are state boards, commissions, departments or officers.
Rincover does not alter the legislative intent of I.C. § 39-401, which clearly provides that health
districts are not state agencies. Sunnyside further argues that I.C. §§ 12-117 and 39-401 are
irreconcilable. We have herein analyzed both sections and conclude that they are not
irreconcilable. Therefore, we need not further address Sunnyside’s arguments on this point.
Lastly, Sunnyside argues that the Supreme Court has treated local entities making
determinations under the Local Land Use Planning Act (LLUPA) as state agencies because the
legislature provided for judicial review of such decisions under the IDAPA. See, e.g., Crown
Point Dev., Inc. v. City of Sun Valley, 144 Idaho 72, 74-75, 156 P.3d 573, 575-76 (2007); Evans
v. Teton County, 139 Idaho 71, 74, 73 P.3d 84, 87 (2003). Because the legislature also provided
for such review of the Health District’s decisions, Sunnyside contends that the Health District
7
should likewise be treated as a state agency for the purposes of awarding attorney fees under I.C.
§ 12-117. However, the Supreme Court cases holding that entities making determinations under
the LLUPA will be treated as state agencies for purposes of judicial review are limited to that
context and do not extend to all decisions subject to judicial review under the IDAPA.
Furthermore, Sunnyside’s argument again fails to account for the one important distinguishing
feature in this case--the express legislative intent as codified in I.C. § 39-401. To hold that the
Health District is a state agency, we would either have to completely ignore that section or strike
it down in its entirety. We are unpersuaded to follow either of those alternatives. Therefore, the
district court did not err by denying Sunnyside’s motion for attorney fees pursuant to I.C. § 12-
117 because the Health District is not a state agency. Pursuant to this holding, we need not
further consider whether the Health District acted with a reasonable basis in fact or law.
B. Attorney Fees Under I.C. § 12-121
Sunnyside next argues that the district court abused its discretion by denying attorney
fees under I.C. § 12-121. Sunnyside contends that its petition for judicial review and complaint
for declaratory judgment initiated a civil action for purposes of an award of attorney fees under
that section. Furthermore, Sunnyside contends that the Health District brought, pursued or
defended the matter frivolously, unreasonably, or without foundation. The Health District
responds that Sunnyside’s petition for declaratory judgment and judicial review did not
commence a civil action. Additionally, the Health District argues that its defense of the matter
was not frivolous and unfounded as the Health District had a reasonable belief that it had
authority to re-impose sanitary restrictions and presented legitimate, triable factual issues.
The decision whether to award attorney fees under I.C. § 12-121 rests within the sound
discretion of the district court and will only be reversed where there is an abuse of discretion.
Bingham v. Montane Res. Assocs., 133 Idaho 420, 427, 987 P.2d 1035, 1042 (1999). When a
trial court’s discretionary decision is reviewed on appeal, the appellate court conducts a multi-
tiered inquiry to determine: (1) whether the lower court correctly perceived the issue as one of
discretion; (2) whether the lower court acted within the boundaries of such discretion and
consistently with any legal standards applicable to the specific choices before it; and (3) whether
the court reached its decision by an exercise of reason. Sun Valley Shopping Ctr., Inc. v. Idaho
Power Co., 119 Idaho 87, 94, 803 P.2d 993, 1000 (1991).
8
An award of attorney fees may be granted under I.C. § 12-121 and I.A.R. 41 to the
prevailing party in any civil action and such an award is appropriate when the court is left with
the abiding belief that the appeal has been brought or defended frivolously, unreasonably, or
without foundation. Rendon v. Paskett, 126 Idaho 944, 945, 894 P.2d 775, 776 (Ct. App. 1995).
In this case, the district court did not address the issue of whether Sunnyside’s petition instituted
a civil action. Instead, the district court denied Sunnyside’s request for attorney fees because the
Health District did not defend the action frivolously, unreasonably, or without foundation. Thus,
we will address whether this determination by the district court constituted an abuse of
discretion.
Sunnyside contends that it is entitled to attorney fees under I.C. § 12-121 because the
district court found that the Health District had acted outside the scope of its authority. For
support Sunnyside relies on the holding of Lockhart v. Department of Fish and Game, 121 Idaho
894, 828 P.2d 1299 (1992). In that case, the Supreme Court held that, when an agency acts
outside of the scope of its authority, it acts without a reasonable basis in fact or law for the
purposes of I.C. § 12-117. Id. at 898, 828 P.2d 1303. However, Idaho Code Sections 12-117
and 12-121 contemplate different conduct. Idaho Code Section 12-117 addresses whether the
agency’s actions which gave rise to the litigation had a reasonable basis in fact or law. Idaho
Code Section 12-121 addresses a party’s conduct and argument during the course of litigation.
Therefore, we must analyze whether the Health District’s defense was frivolous, unreasonable,
or without foundation.
In its order denying Sunnyside’s motion for attorney fees, the district court found:
Having previously found that the actions of [the Health District] were not taken
without a reasonable basis in fact or law, the Court further finds that with regard
to [the Health District], this matter was not brought, pursued or defended
frivolously, unreasonably, or without foundation.
Because the district court concluded that the Health District had a reasonable justification for the
course of action it pursued, it accordingly concluded that it was not frivolous for the Health
District to advance that position in defense of the litigation.
When there are fairly debatable questions, attorney fees are not awardable pursuant to
I.C. § 12-121. Black v. Ameritel Inns, Inc., 139 Idaho 511, 515, 81 P.3d 416, 420 (2003). We
have reviewed the record in this case and conclude that the Health District had a legitimate,
defensible position that it had authority to re-impose sanitary restrictions on Sunnyside’s
9
property. According to the Health District, its memorandum of understanding with the DEQ
vested power in the responsible agency to re-impose sanitary restrictions and it believed that it
was the responsible entity. The district court found that this interpretation was erroneous based
on the expanded use of the septic system and that the Health District acted without authority.
However, that does not render the Health District’s defense of the litigation frivolous,
unreasonable, or without foundation. Therefore, Sunnyside was not entitled to attorney fees
pursuant to I.C. § 12-121, and the district court did not abuse its discretion in denying
Sunnyside’s motion for attorney fees pursuant to that section. Because of our holding, we need
not further address Sunnyside’s argument that its petition for judicial review and declaratory
judgment instituted a civil action.
C. Motion to Reconsider
Sunnyside filed a motion to reconsider the denial of its request for attorney fees, which
the district court denied. The decision to grant or deny a request for reconsideration generally
rests in the sound discretion of the trial court. Campbell v. Reagan, 144 Idaho 254, 258, 159
P.3d 891, 895 (2007); Carnell v. Barker Mgmt. Inc., 137 Idaho 322, 329, 48 P.3d 651, 658
(2002). Sunnyside was not entitled to attorney fees under I.C. §§ 12-117 or 12-121, therefore,
we conclude that the district court did not abuse its discretion by denying Sunnyside’s motion to
reconsider the awarding of attorney fees under either section.
D. Attorney Fees on Appeal
Sunnyside also requests attorney fees on appeal under I.C. § 12-117 and 12-121.
Sunnyside has not prevailed on appeal on either issue, therefore Sunnyside is not entitled to
attorney fees under either section.
III.
CONCLUSION
The Health District is not a state agency for purposes of an award of attorney fees under
I.C. § 12-117. Thus, the district court did not err in denying Sunnyside’s motion for attorney
fees pursuant to that section. Furthermore, the Health District did not defend the litigation
frivolously, unreasonably, or without foundation. Therefore, the district court did not abuse its
discretion by denying Sunnyside’s motion for attorney fees pursuant to I.C. § 12-121.
Accordingly, the district court’s order denying attorney fees pursuant to I.C. §§ 12-117 and 12-
121 is affirmed. The district court did not abuse its discretion by denying Sunnyside’s motion to
10
reconsider. Therefore, the district court’s order denying Sunnyside’s motion for reconsideration
is also affirmed. As the prevailing party, the Health District is awarded costs on appeal as a
matter of course pursuant to I.A.R. 40(a). We do not award the Health District attorney fees
because it did not request them.
Judge GRATTON, CONCURS.
Judge GUTIERREZ, SPECIALLY CONCURRING
I concur fully with the majority’s analysis in Part II.B of its opinion. I concur with the
result the majority reaches in Part II.A; however, I write separately because I would analyze the
issue differently. I am not fully convinced that the legislature has unequivocally provided that
health districts not be considered state agencies for purposes of attorney fees under I.C. § 12-117.
However, even were we to assume that health districts should be considered state agencies for
purposes of I.C. § 12-117, I do not believe that the Health District acted unreasonably without a
basis in fact or law in this case as appellant suggests. Accordingly, I agree that the district
court’s denial of Sunnyside’s attorney fees under I.C. § 12-117 should be affirmed.
11