Frivolous, Unreasonable and Without Foundation is Back or it Never Left?

In a prior post, we told you about how the Idaho Supreme Court said that on March 1, 2017, court's would award attorney fees when "justice so required" rather than when a case was "brought, pursued or defended frivolously, unreasonably or without foundation.”

Well, the Legislature intervened and amended Idaho Code Section 12-121 (effective February 28, 2017). Click here to see the amended statute. Now attorney fees will be awarded just as they have for the last 30 plus years. In short, to get attorney fees in a case where there isn't a statute or contract saying the winner gets attorney fees, the winner must convince the judge that the case was "brought, pursued or defended frivolously, unreasonably or without foundation.”

As a recap, here is how we got here. Last year, the Idaho Supreme Court held that a winner of a civil lawsuit will be awarded attorney fees "when justice so requires" after March 1, 2017.  See Hoffer v. Shappard, 168 Idaho 868, 380 P.3d 681 (2016).  

Up to that date, everyone assumed it was settled law that Idaho courts would award attorney fees when a case is "brought, pursued or defended frivolously, unreasonably or without foundation.” I.R.C.P. 54(e)(1). In other words, "justice so required" an award of attorney fees when a claim or defense was frivolous, unreasonable or without foundation. This standard was not found in Idaho Code. It was found in the civil rules adopted by the Idaho Supreme Court.

The Idaho Supreme Court found that the civil rule usurped the express intent of the Legislature. The Court held that after March 1, 2017, "the courts of this state will apply the standard expressed by the Legislature: prevailing parties in civil litigation have the right to be made whole for attorney fees they have incurred 'when justice so requires.'” Hoffer v. Shappard, 160 Idaho at 883, 380 P.3d at 696. 

The Court recognized this was a major change and delayed its implementation (probably to give the Legislature time to intervene):

We recognize that this Court's long-belated recognition of express legislative intent may have profound effects on litigants. Thus, we have determined that it is appropriate to give the bench and bar advance notice of the effective date of the new rule. This new rule of law will become effective on March 1, 2017, and will have prospective effect, applying to all cases that have not become final as of that date.

Id. 

Justice Burdick dissented. He stated that "the majority leaves trial judges at bay, with no guidance to decipher when justice will 'so require” attorney fees to be awarded.'" Id. at 884, 380 P.3d at 697. Without any "sideboards" to guide a trial judge, it was likely there would be inconsistent results. Id. Moreover, since the decision to award attorney fees was left up to discretion of the trial judge, there would be very little chance of overturning an award by a trial judge on appeal. Id

Justice Burdick also observed that the decision may have lead to only the rich seeking recourse in court. It is already economic suicide for most of Idaho's citizens to seek recourse in court because of the cost of litigation is so high. If there is a risk of losing and paying other side's attorney fees as well, it "will chill litigation." Id

Some may say this was a good thing because there is too much litigation. However, it may also have the effect of "inhibit[ing] access to justice and tilt[ing] the table even further toward moneyed interests in our courts." Id. 

Well, all this debate is now moot because the Legislature keep kept the standard the same. Today, as in the last 30 years, if a statute or contract does not award attorney fees, the winner only gets them if it can convince the judge that the case was "brought, pursued or defended frivolously, unreasonably or without foundation.”