IN THE SUPREME COURT OF THE STATE OF IDAHO
Docket No. 36861
ALLIED BAIL BONDS, INC., an Idaho )
corporation, )
) Coeur d’Alene, April 2011 Term
Plaintiff-Appellant, )
) 2011 Opinion No. 81
v. )
) Filed: July 8, 2011
COUNTY OF KOOTENAI, a political )
subdivision of the State of Idaho, ROCKY ) Stephen Kenyon, Clerk
WATSON, Kootenai County Sheriff, JOHN )
and JANE DOES 1 through 13, )
)
Defendants-Respondents. )
Appeal from the District Court of the First Judicial District of the State of Idaho,
Kootenai County. Hon. John T. Mitchell, District Judge.
The decision of the district court is affirmed.
Bistline Law, PLLC, Coeur d’Alene, for appellant. Drake D. Mesenbrink argued.
Kootenai County Prosecutor’s Office, Coeur d’Alene, for respondents. Darrin L.
Murphey argued.
_______________________________________________
HORTON, Justice.
In April, 2001, Allied Bail Bonds, Inc. (Allied), the Kootenai County Sheriff (Sheriff),
and the Kootenai County Board of Commissioners (Board) entered into a settlement agreement
setting forth procedures for how inmates at the county jail would be informed of and obtain bail
bonds. Allied brought this suit alleging several claims, including breach of the settlement
agreement. The district court dismissed Allied’s claims. We affirm.
I. FACTUAL AND PROCEDURAL BACKGROUND
In September 2000, Allied brought suit against the Sheriff and Kootenai County, alleging
that the Sheriff’s practices interfered with its business. On April 19, 2001, Allied, the Sheriff,
and the Board entered into a settlement agreement. The agreement outlined the process by which
the Sheriff was required to inform inmates of their bail bond options. On October 9, 2007,
1
Allied filed the instant action, alleging the Sheriff and the Board had breached the settlement
agreement, failed to produce documents pursuant to a request for public records, and interfered
with Allied’s ability to engage in its bail bonds business.
The following day, October 10, 2007, Allied filed a $700 surety bond with one surety in
relation to its suit against the Sheriff. As an affirmative defense, the Sheriff asserted that Allied
had “failed to comply with the bond requirement set forth in Idaho Code § 6-610.” The district
court heard argument on the bond issue and ordered Allied to file a $25,000 bond with two
sureties. Allied filed a $25,000 bond with one surety. The defendants objected that “Allied’s
filing of a bond with the court after the complaint was filed is untimely and therefore does not
satisfy the requirements of Idaho Code § 6-610. Additionally, the power of attorney filed by
Allied does not satisfy the undertaking requirements required by the statute, in that the power of
attorney has an expiration date and the court has not received adequate surety.” The district
court held that because Allied failed to post a bond contemporaneously with its complaint against
the Sheriff and because Allied failed to file an undertaking of two sureties, application of I.C. §
6-610 required dismissal of the action.
Allied filed a second amended complaint on December 9, 2008. The second amended
complaint contained additional allegations that, by encouraging the use of credit card bond
payments, the Sheriff had violated article VIII, section 4 of the Idaho Constitution. Allied also
alleged that I.C. §§ 19-3947 and 31-878, statutes authorizing county commissioners to supervise
adult misdemeanor probation, violated Article X, Section 5 of the Idaho Constitution.
The defendants filed a motion to dismiss Allied’s claims. The defendants argued that the
district court lacked subject matter jurisdiction over Allied’s tort claims because Allied had not
complied with the notice requirements of the Idaho Tort Claims Act (ITCA), I.C. §§ 6-901
through 6-929. They also argued that Allied’s complaint failed to state a claim under the public
records request statutes and that the settlement agreement was void and unenforceable. The
defendants asserted that Allied lacked standing to challenge I.C. §§ 19-3947 and 31-878, and that
those statutes were constitutional. Further, the defendants argued that Allied did not have a
protected property interest in its bail bond business.
The district court dismissed Allied’s claims, and entered judgment dismissing Allied’s
second amended complaint on March 9, 2009. The court later found the defendants were the
prevailing parties and awarded them attorney fees pursuant to the settlement agreement. The
2
court held that even if the settlement agreement was unenforceable, it entitled the defendants to
attorney fees. Although the Sheriff and the Board had advanced statutory bases for an award of
attorney fees, the court did not address the statutory claims based upon its determination that the
settlement agreement provided for fees.
Allied timely appealed the district court’s final judgment.
II. STANDARD OF REVIEW
This Court exercises free review over questions of law, including jurisdictional and
constitutional issues. Meisner v. Potlatch Corp., 131 Idaho 258, 260, 954 P.2d 676, 678 (1998).
Whether a contract violates public policy is a question of law. Bakker v. Thunder Spring-
Wareham, LLC, 141 Idaho 185, 189, 108 P.3d 332, 336 (2005).
On review of a district court’s I.R.C.P. 12(b)(6) dismissal, this Court views all inferences
in the light most favorable to the non-moving party. Orthman v. Idaho Power Co., 126 Idaho
960, 962, 895 P.2d 561, 563 (1995). When considering a 12(b)(6) motion, we look only to the
pleadings to determine whether a claim for relief has been stated. Young v. City of Ketchum, 137
Idaho 102, 104, 44 P.3d 1157, 1159 (2002). The issue is not whether the plaintiff will ultimately
prevail, but whether the party is entitled to offer evidence to support the claim. Orthman, 126
Idaho at 962, 895 P.2d at 563 (citations omitted).
III. ANALYSIS
A. Allied waived its challenge to the constitutionality of I.C. §§ 19-3947 and 31-878.
At oral argument, Allied expressly waived its argument that I.C. §§ 19-3947 and 31-878,
which vest power to manage adult misdemeanor probation in county commissioners, are
unconstitutional because article X, section 5 of the Idaho Constitution vests all power to manage
matters of adult probation and parole solely in the State Board of Correction. We therefore
decline to address the issue.
B. The district court properly dismissed Allied’s article VIII, section 4 claim for lack of
timely notice of the claim.
Allied asserts that the Sheriff granted preferential treatment to credit card providers and
thereby violated Idaho Constitution article VIII, section 4. Allied contends that the Sheriff’s
conduct gives rise to a cause of action for tortious interference with a business relationship, as
well as a constitutional cause of action under article VIII, section 4. It is undisputed that Allied
failed to provide timely notice of its claims against the Board and the Sheriff as required by the
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ITCA, and is therefore barred from pursuing tort claims against the respondents. However,
Allied argues that its claim under article VIII, section 4 is a claim arising under the Idaho
Constitution, and is thus excluded from the requirements of the ITCA. 1 The Sheriff responds
that the ITCA applies to all claims for money damages arising out of a wrongful government act,
including Allied’s claim. The district court held that tortious interference with a business
relationship was the gravamen of Allied’s claim under article VIII, section 4, and that the court
therefore lacked subject matter jurisdiction over the claim.
Under the ITCA, government entities are liable for money damages arising out of most of
their own, or their employees’, “negligent or otherwise wrongful act[s] or omission[s].” I.C. §§
6-902(7) & -903(a). The ITCA mandates that if a claimant does not provide the government
with timely notice of its claim, it loses the right to assert the claim. I.C. § 6-908. Timely and
adequate notice under the ITCA “is a mandatory condition precedent to bringing suit, the failure
of which is fatal to a claim, no matter how legitimate.” McQuillen, 113 Idaho at 722, 747 P.2d at
744.
Allied contends that article VIII, section 4 of the Idaho Constitution gives rise to a
constitutional cause of action that is substantively similar to the tort of wrongful interference
with economic relationship, but to which the ITCA does not apply. Article VIII, section 4 states:
County, etc., not to loan or give its credit.
No county, city, town, township, board of education, or school district, or other
subdivision, shall lend, or pledge the credit or faith thereof directly or indirectly,
in any manner, to, or in aid of any individual, association or corporation, for any
amount or for any purpose whatever, or become responsible for any debt, contract
or liability of any individual, association or corporation in or out of this state.
1
In its briefing, Allied cited McQuillen v. City of Ammon, 113 Idaho 719, 747 P.2d 741 (1987), for the proposition
that the same conduct may give rise to causes of action both in tort and under the Constitution, in which case the
constitutional claim is not barred by failure to comply with the ITCA. However, Allied disingenuously failed to
note that this reasoning was not endorsed by the majority of the McQuillen Court; rather, it was advanced by Justice
Bistline in his dissent. Id. at 726, 747 P.2d at 748. In that case, a landowner claimed to have relied upon a city’s
issuance of a land use permit and sought damages for the city’s negligent revocation of the permit. Id. at 722, 747
P.2d at 744. Justice Bistline argued in his dissenting opinion that the facts alleged would normally give rise to a tort
action for impairment of property rights, but when asserted against a government entity, gave rise to a constitutional
claim of eminent domain that was not subject to the mandates of the ITCA. Id. at 726, 747 P.2d at 748. However,
the McQuillen majority disagreed, recognizing the plaintiff’s claim as a mere tort and dismissing the claim for
failure to comply with the ITCA. Id. at 722, 747 P.2d at 744. At oral argument, Allied discounted its reliance on
McQuillen, but did not offer any other authority in support of the proposition that the government conduct at issue
was not governed by the ITCA.
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The tort of wrongful interference with economic relationship requires a showing that “intentional
interference with a prospective economic advantage result[ed] in injury to the plaintiff [and] is
wrongful by some measure beyond the fact of the interference itself.” Idaho First Nat’l Bank v.
Bliss Valley Foods, Inc., 121 Idaho 266, 286, 824 P.2d 841, 861 (1991) (internal citations
removed) (citing Pleas v. City of Seattle, 774 P.2d 1158, 1163 (Wash. 1989); Top Serv. Body
Shop, Inc. v. Allstate Ins. Co., 582 P.2d 1365, 1368 (Or. 1978)).
We affirm the district court’s holding that the essence of Allied’s claim is that the Sheriff
wrongfully diverted Allied’s potential customers away from Allied, toward credit card
companies, with the intent to harm Allied’s business. We thus hold that Allied’s decision to
plead its claim under article VIII, section 4 does not alter the fact that the claim sounds in tort
and therefore requires compliance with the ITCA. 2 The district court properly held that the
failure to provide timely notice of the tort claim barred Allied’s claim.
C. The district court properly dismissed Allied’s claims against the Sheriff for failure to
timely post bond.
Idaho Code § 6-610 applies to actions arising out of law enforcement officers’ official
duties and requires a plaintiff to post bond “as a condition precedent” to initiating suit against, or
serving process on, an officer. I.C. § 6-610(2). Allied contends first that I.C. §§ 6-610(4) and 6-
610(5) do not permit an officer to object where bond is not timely filed, but merely permit
objection to a plaintiff’s complete failure to file a bond. Allied argues that since it filed a bond
only one day after filing its complaint, Allied did not totally fail to file a bond and the Sheriff has
no grounds for an objection. Idaho Code §§ 6-610(4) and 6-610(5) state:
(4) At any time during the course of a civil action against a law enforcement
officer, the defendant or respondent may except to either the plaintiff’s or
petitioner’s failure to file a bond or to the sufficiency of the sureties or to the
amount of the bond.
(5) When the defendant or respondent excepts to the plaintiff’s or petitioner’s
failure to post a bond under this section, the judge shall dismiss the case.
In support of its argument, Allied cites dicta in Rogers v. State, 98 Idaho 742, 572 P.2d 176
(1977). There, this Court cautioned that literal application of the statute’s requirement that a
2
We express doubt that article VIII, section 4, a violation of which consists of “the imposition of some monetary
liability upon a municipal corporation in favor of a non-public entity,” Hanson v. City of Idaho Falls, 92 Idaho 512,
516, 446 P.2d 634, 638 (1968), gives rise to a cause of action that is substantively similar to tortious interference
with economic relationship, as Allied contends.
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plaintiff file bond in an amount fixed by a trial court before filing the suit-initiating complaint
involves an “apparently sizeable jurisdictional problem,” because it requires a court to set the
bond’s value before the court gains jurisdiction over the case. Id. at 743, 572 P.2d at 177.
We hold that I.C. § 6-610(2) plainly requires a plaintiff to post bond before it initiates suit
against a law enforcement officer, and also that I.C. §§ 6-610(4) and 6-610(5) permit an
objection and dismissal where a plaintiff fails to do so. To overcome the “jurisdictional
problem” noted in Rogers, a plaintiff may invoke the jurisdiction of a district court by filing with
the court, located in the county where the law enforcement officer performs his or her official
duties, a petition requesting an order fixing the amount of bond. The petition should show that
the petitioner expects to be a party to an action against a law enforcement officer, the subject
matter of the expected action and facts sufficient for the court to establish the amount of bond
the plaintiff must post before it files suit or serves process. Cf. I.R.C.P. 27(a)(1) (establishing
procedures governing depositions to perpetuate testimony).
Allied contends in the alternative, under the doctrine of functus officio, that the December
9, 2008 filing date of its second amended complaint is the date upon which Allied initiated suit
against the Sheriff. However, I.R.C.P. 15(c) provides that “[w]henever the claim or defense
asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or
attempted to be set forth in the original pleading, the amendment relates back to the date of the
original pleading.” This “relation back doctrine” protects claims from expiration of the statute of
limitations, provided the defendant has sufficient notice. Black Canyon Racquetball Club, Inc. v.
Idaho First Nat’l Bank, N.A., 119 Idaho 171, 179, 804 P.2d 900, 908 (1991) (quoting 6 C.
Wright & A. Miller, Federal Practice & Procedure §§ 1497, 1496 (1971)). The doctrine of
functus officio, on the other hand, holds that an amended complaint supersedes prior complaints
such that all subsequent pleadings must be based upon the contents of the amended complaint.
W.L. Scott, Inc. v. Madras Aerotech, Inc., 103 Idaho 736, 739, 653 P.2d 791, 794 (1982). Thus,
the combined effect of the relation back and functus officio doctrines is that an amended
complaint is considered to have been filed on the date the original complaint was filed but to
represent, entirely and exclusively, the substance of the plaintiff’s claims. Cable v. Olson, 52
Idaho 389, 391, 15 P.2d 737, 737 (1932).
In the present case, Allied filed its original complaint, containing claims arising out of the
Sheriff’s alleged breach of the settlement agreement, on October 9, 2007, and it filed a $700
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bond the next day. Allied filed a second amended complaint, also with claims arising out of the
Sheriff’s alleged breach of the settlement agreement, on December 9, 2008. The second
amended complaint thus relates back to October 9, 2007, and precedes the October 10, 2007 date
of Allied’s bond filing. Since Allied initiated suit against the Sheriff before it filed the bond
required by I.C. § 6-610, we hold that the district court properly dismissed Allied’s claims
against the Sheriff.
D. The district court properly dismissed Allied’s public records claim.
The district court held that Allied failed to state a claim under Idaho’s public records
statute because Allied sought only attorney fees in relation to the respondents’ alleged violation
of the statute. Under that statute, “[t]he sole remedy for a person aggrieved by the denial of a
request for disclosure [of public records] is to institute proceedings in the district court of the
county where the records or some part thereof are located, to compel the public agency or
independent public body corporate and politic to make the information available for public
inspection . . .” I.C. § 9-343(1). As the district court noted, Allied conceded in its July 16, 2008
response to the respondents’ motion to dismiss that it did “not seek damages for the violation of
Idaho Code, Title 9, Chapter 3, other than for attorney fees.” Since the only remedy Allied
sought was attorney fees, Allied did not seek the statute’s sole remedy of compelled document
production. Thus, Allied failed to state a public records claim, and the district court’s dismissal
of the claim was proper.
E. The district court properly held that the Board is not liable for the Sheriff’s alleged
breaches.
Allied contends that the Board is liable for the Sheriff’s conduct, either under the doctrine
of respondeat superior or by its endorsement of the settlement agreement. The Board responds
that county commissioners are not liable for the breach of a county officer. The district court
held that the Board “does not have the authority to perform or direct the statutory duties of the
Sheriff.”
1. The Board’s limited powers do not include the power to control or manage the
Sheriff’s official conduct.
The Board is not authorized to control other constitutional officers and therefore is not
vicariously liable for the Sheriff’s alleged torts. Article XVIII, section 6 of the Idaho
Constitution, titled “County officers,” provides for the election of both county commissioners
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and a sheriff. The distinct constitutional offices have distinct roles and obligations. “A board of
county commissioners is a tribunal created by statute with limited jurisdiction and only quasi
judicial powers, and can not proceed except in strict accordance with the mode provided by
statute.” Johnson v. Young, 53 Idaho 271, 285, 23 P.2d 723, 728-29 (1932) (quoting Gorman v.
Bd. of Comm’rs of Boise Cnty., 1 Idaho 553, 556 (1874)). County commissioners are authorized
by statute “[t]o supervise the official conduct of all county officers . . . ; see that they faithfully
perform their duties; direct prosecution for delinquencies; approve the official bonds of county
officers, and when necessary, require them to make reports, and to present their books and
accounts for inspection.” I.C. § 31-802. This Court has narrowly construed county
commissioners’ authority to oversee the conduct of other constitutional officers, holding that
such authority exists only where a statute expressly provides commissioners with authority to
control or manage that conduct. Gorman, 1 Idaho at 559. (lacking statutory authority, county
commissioners’ removal of elected county officer improper); Reilly v. Bd. of Comm’rs of Latah
Cnty., 29 Idaho 212, 222, 158 P. 322, 325 (1916) (county commissioners not authorized to
require county recorder to keep real property index that differed from the index mandated by
statute); Hansen v. White, 114 Idaho 907, 911, 762 P.2d 820, 824 (1988) (county commissioners
authorized to implement county employee merit system under statutory grant of authority).
Among a sheriff’s statutory duties is the duty to “[t]ake charge of and keep the county jail and
the prisoners therein.” I.C. § 31-2202(6). Also, a sheriff must keep a defendant in custody until
the defendant posts bail. I.C. §§ 8-106, 19-817.
Allied cites no statute that empowers the Board to control the process by which the
Sheriff conducts bail proceedings at its jail. Although Allied points to I.C. §§ 20-622 and 31-
1503 as statutes authorizing the Board to manage the process by which the Sheriff collects bail
from prisoners, the first merely requires county commissioners to “take all necessary precaution
against escape, sickness, or infection” at county jails, while the second requires commissioners to
disallow the account of a county officer if the officer fails to perform his official duties. Since
the provision of bail is not related to prisoner escape, sickness or infection, I.C. § 20-622 cannot
be said to authorize county commissioners to control how sheriffs conduct the bail process.
Similarly, I.C. § 31-1503’s mandate that county commissioners disallow an officer’s account if
his or her duties are not satisfactorily performed does not empower county commissioners to
direct sheriffs’ statutorily-authorized conduct regarding bail. Because no statute empowers
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county commissioners to control the constitutional office of sheriff, we affirm the district court’s
holding that the Board was not vicariously liable for the Sheriff’s official conduct.
2. Since the Board is not authorized to control the Sheriff’s official conduct, any
agreement requiring the Board to do so is ultra vires and unenforceable.
Allied next contends that the Board assumed the obligation to control the Sheriff’s
conduct by endorsing the settlement agreement. The Board responds that its endorsement was
merely made to resolve prior litigation pursuant to I.C. § 31-813, which authorizes county
commissioners “[t]o direct and control the prosecution and defense of all suits to which the
county is a party in interest, and employ counsel to conduct the same, with or without the
prosecuting attorney, as they may direct.”
This Court has recognized that I.C. § 31-813, which authorizes county commissioners to
direct litigation, empowers commissioners to enter settlement agreements to end county
litigation. Bd. of Cnty. Comm’rs v. Bassett, 14 Idaho 324, 324, 93 P. 774, 774 (1908). However,
the power to enter into settlement agreements does not empower county commissioners to
perform acts ultra vires, or beyond the scope of their statutorily-authorized duties. Thus, a board
of county commissioners may not expand its statutory authority by contractually creating or
acquiring the duty to control the conduct of other constitutional officers. To hold otherwise
would blur the distinct roles set forth by the Idaho Constitution. We thus hold that the district
court properly held that the settlement agreement is unenforceable against the Board.
F. We affirm the district court’s holding that Allied did not assert a protected property
interest.
The Sheriff contends that Allied did not plead its claim of a constitutionally protected
property interest with sufficient particularity and is therefore precluded on appeal from asserting
such claim. However, it appears from the record before the Court that the Sheriff did not present
this argument prior to this appeal. “Appellate court review is limited to the evidence, theories
and arguments that were presented below.” Nelson v. Nelson, 144 Idaho 710, 714, 170 P.3d 375,
379 (2007) (quoting Obenchain v. McAlvain Const., Inc., 143 Idaho 56, 57, 137 P.3d 443, 444
(2006)). Thus, the issue of whether Allied has a constitutionally protected property interest in its
license to conduct business is properly before the Court.
The Sheriff argues that Allied’s bonding license is merely a privilege, not a protected
property right. The district court held that because Allied did not have existing contractual
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relationships with jail inmates, and because the Sheriff did not wholly exclude Allied from
conducting its licensed business, Allied did not assert a property interest entitled to constitutional
protections.
We agree with the district court. A license is a mere privilege and does not create a
vested property right. Yellow Cab Taxi Serv. v. City of Twin Falls, 68 Idaho 145, 151, 190 P.2d
681, 684 (1948). The government may infringe upon a license as long as the infringement is not
arbitrary, unreasonable, or capricious. Id.; see also Coeur d’Alene Garbage Serv. v. Coeur
d’Alene, 114 Idaho 588, 591, 759 P.2d 879, 882 (1988) (“If the City had merely regulated the
operation of [the licensee] in the annexed areas by requiring it to comply with reasonable
standards established by the City, there would have been no taking.”).
We held in Coeur d’Alene Garbage Service that a licensee’s existing and active business
relationships may rise to the level of a protected property interest. 114 Idaho at 591, 759 P.2d at
882. If a state actor wholly excludes a licensee from continuing its existing business
relationships, the licensee may be entitled to just compensation. Id. Yet a licensee does not have
a property interest in expanding its customer base. Unity Light & Power Co. v. City of Burley,
92 Idaho 499, 504, 445 P.2d 720, 725 (1968). Thus, a licensee has no property interest in
potential business relationships, but may be entitled to protection from total infringement upon
its existing relationships.
Allied does not allege any facts that place this case within the reach of Coeur d’Alene
Garbage Service. That is, Allied does not contend that the Sheriff wholly excluded Allied from
exercising its licensed right to do business in Kootenai County, nor that the Sheriff has prevented
it from engaging in business with existing, active customers. In effect, Allied asserts that by
accepting credit card bond payments, the Sheriff has introduced a new form of competition to
Allied’s licensed bail bond business. Allied asks this Court to ignore Idaho precedent which
characterizes a license as a mere privilege and elevate its bail bond license to a protected
property interest. We are unwilling to do so. The Sheriff’s acceptance of bail bond payment by
credit card provides inmates with an additional and convenient means of exercising their right to
post bond, and therefore is not arbitrary, unreasonable, or capricious. The district court properly
held that the Sheriff has not unlawfully infringed upon any protected property interest. 3
3
Allied also asserts that it has a protected property interest in performance of the settlement agreement. It is true
that the subject matter of a contract may be protected from infringement by a state actor. Curr v. Curr, 124 Idaho
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G. We affirm the district court’s award of attorney fees.
The district court awarded the respondents attorney fees based on a provision in the
settlement agreement entitling the prevailing party in any dispute arising from the agreement to
fees. We review a district court’s award of attorney fees for an abuse of discretion. Appel v.
LePage, 135 Idaho 133, 138, 15 P.3d 1141, 1146 (2000). A court does not abuse its discretion if
it “(1) correctly perceived the issue as one of discretion; (2) acted within the outer boundaries of
its 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.” Sun Valley Potato Growers, Inc. v.
Tex. Refinery Corp., 139 Idaho 761, 765, 86 P.3d 475, 479 (2004).
Allied asserts that a case must be decided on the merits in order for there to be a
prevailing party entitled to attorney fees. This is a question of law over which this Court
exercises free review. Contreras v. Rubley, 142 Idaho 573, 576, 130 P.3d 1111, 1114 (2006).
The authority cited by Allied does not support its contention. To the contrary, this Court held in
Straub v. Smith, 145 Idaho 65, 69, 175 P.3d 754, 758 (2007), that attorney fees may be
appropriate where the parties have voluntarily stipulated to dismissal – one instance where a case
is not decided on the merits. Attorney fee awards may also be appropriate where a case is
dismissed on I.R.C.P. 12(b) grounds. E.g., Nampa Charter School, Inc. v. DeLaPaz, 140 Idaho
23, 29-30, 89 P.3d 863, 869-70 (2004); Losser v. Bradstreet, 145 Idaho 670, 676, 183 P.3d 758,
764 (2008). The lack of a decision on the merits does not provide grounds to vacate the district
court’s award of attorney fees to the respondents.
Further, the district court’s award of attorney fees was not an abuse of discretion. Where
a court holds a contract is unenforceable, the prevailing party may nonetheless be entitled to an
award of attorney fees under the contract. Garner v. Bartschi, 139 Idaho 430, 439, 80 P.3d 1031,
1040 (2003); Ayotte v. Redmon, 110 Idaho 726, 728-29, 718 P.2d 1164, 1166-67 (1986)
(upholding district court’s award of attorney fees to party successfully seeking rescission). “‘It is
of no consequence that the underlying contractual obligation is unenforceable. A prevailing
party may recover attorney fees even though no liability under a contract was established or
where no contract was, in fact, ever formed.’” Garner, 139 Idaho at 439, 80 P.3d at 1040
686, 691-92, 864 P.2d 132, 137-38 (1993). In the present case however, Allied contends that the Sheriff’s alleged
breach of the settlement agreement amounts to an infringement. Allied’s logic is flawed. The mere fact that a state
actor is a party to a contract does not elevate that state actor’s contractual breach to a constitutional violation.
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(quoting Hilbert v. Hough, 132 Idaho 203, 207, 969 P.2d 836, 840 (Ct. App. 1998)). In the
present case, paragraph twelve of the settlement agreement entitled the prevailing party in any
action to enforce the agreement to an award of reasonable attorney fees.
The district court had broad discretion to find the respondents, as the parties that
prevailed as to each of Allied’s claims, were the prevailing parties. The court acted within the
bounds of its discretion and the applicable law when it found that the respondents were entitled
to attorney fees under the settlement agreement, and reached its decision by an exercise of
reason. We hold the district court properly awarded attorney fees to the respondents as the
parties prevailing below.
H. The Board and the Sheriff are entitled to attorney fees on appeal.
Allied requests attorney fees on appeal under the settlement agreement, I.C. § 12-120(3),
and I.C. § 12-121. The respondents likewise request attorney fees on appeal under the settlement
agreement, I.C. § 9-344, I.C. § 12-117, I.C. §12-120(3), and I.C. § 12-121.
We hold that the respondents are the prevailing parties on appeal and are entitled to
attorney fees pursuant to I.C. § 12-117. In a civil action between a political subdivision and a
person, the prevailing party is entitled to reasonable attorney fees if “the nonprevailing party
acted without a reasonable basis in fact or law.” I.C. § 12-117(1). For purposes of the statute, a
private organization such as Allied is a person. I.C. § 12-117(4)(a). Allied misrepresented
controlling precedent in its briefing, and also presented multiple arguments in its briefing that it
abandoned at oral argument. Further, Allied unreasonably pursued this appeal even though it
failed to comply with the notice requirement of the ITCA and the bond requirement of I.C. § 6-
610. Jenkins v. Barsalou, 145 Idaho 202, 208, 177 P.3d 949, 955 (2008). Allied’s conduct on
appeal was not reasonably based in either fact or law, and we therefore award to respondents
attorney fees associated with this appeal.
IV. CONCLUSION
We affirm the district court’s judgment dismissing Allied’s claims and awarding attorney
fees to respondents. Attorney fees and costs to respondents.
Chief Justice EISMANN and Justices BURDICK, J. JONES and W. JONES CONCUR.
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