Clark et al v. Podesta et al

Filing 175

MEMORANDUM DECISION AND ORDER. NOW THEREFORE IT IS HEREBY ORDERED: Plaintiff's Motion for Post-Judgment Attorney Fees 165 is DISMISSED WITHOUT PREJUDICE. Signed by Judge Candy W. Dale. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (st)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

ERIC R. CLARK, Attorney at Law, and
CLARK ASSOCIATES, PLCC,
Plaintiffs,

Case No. 1:15-CV-00008-CWD
MEMORANDUM DECISION AND
ORDER

v.
JEFFREY J. PODESTA, individually,
and as the agent of Street Search, LLC,
and STREET SEARCH LLC, a New
Jersey limited liability company,
Defendants.

BACKGROUND
Pending before the Court is Plaintiff Eric Clark’s motion for post-judgment
attorney fees. (Dkt. 165.) On January 18, 2017, the Court entered a judgment awarding
$129,576.76 with post-judgment interest to Plaintiffs Eric R. Clark, Attorney at Law, and
Clark & Associates, PLLC (“Clark”) against Defendants Jeffrey J. Podesta, individually,
and as the agent of Street Search, LLC, and Street Search, LLC (“Podesta”). (Dkt. 118.)
The judgment was entered pursuant to the parties’ Stipulation for Entry of Judgment
(Dkt. 117), which expressly stated that each party would “bear their own attorney fees

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and costs incurred until entry of judgment.” Since that time, the parties have been
engaged in post-judgment discovery related to Clark’s efforts to collect the judgment.
In addition to post-judgment collection efforts through this Court, Clark filed a
collections lawsuit in New Jersey—Podesta’s state of residence. Clark hired a New
Jersey-based firm on a contingency fee basis. The firm will receive thirty percent of any
amount collected from Podesta. If successful in collecting the entire judgment of
$129,576.76, the firm’s contingency fee would be $38,873.30 plus an additional thirty
percent of the accrued post-judgment interest. Clark now demands this sum should be
awarded as post-judgment attorney fees. Additionally, Clark asks the Court to award him
$68.00 for administrative post-judgment costs. As of the date of this order, the New
Jersey action is ongoing.
In support of his motion, Clark cites Section 12-120(5) of the Idaho Code, which
provides for an award of post-judgment attorney fees and costs for parties entitled under
the code to pre-judgment fees and costs. Clark argues the award of post-judgment fees is
not contingent on a party actually being awarded pre-judgment fees—but only that the
party was entitled by Idaho law to have received a pre-judgment fee award.
Clark claims he was entitled to receive an award of fees pursuant to Section 12120(3), which provides an award of fees to prevailing parties in recovery actions related
to commercial transactions. Clark asserts that, because the provision of legal services is a
commercial transaction, and because he was the prevailing party, even if partially by
stipulation, he is entitled to an award of reasonable post-judgment fees and costs.
Podesta challenges Clark’s motion on multiple bases. First, he contends the
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motion is untimely pursuant to Idaho Rules of Civil Procedure 54(d)(1)(F) and 54(d)(5).
Podesta argues Clark was required by Rule 54(d)(5) to bring his motion for postjudgment attorney fees within 14 days after entry of the judgment. Podesta cites Allison v.
Briggs, Inc., a 1992 case where the Idaho Supreme Court held that post-judgment
attorney fees were not authorized under then Section 12-120(3) of the Idaho Code. 826
P.2d 916 (1992). The court also declined to expand the reading of Rule 54(d)(1)(F) to
allow for recovery of post-judgment fees other than those expressly incurred for the
service of the writ of execution upon judgment.
Podesta posits, that although the applicable section of the Idaho Code was
amended after the Allison decision and now clearly allows for post-judgment attorney
fees under Section 12-120(5), Idaho Rule of Civil Procedure 54(d)(4) applies—requiring
a party seeking post-judgment fees and costs under Section 12-120(5) to file a
memorandum of costs within 14 days after the entry of judgment. Marmor v. Marmor,
2014 Ida. App. Unpub. LEXIS 271 (Ct. App. 2014).
Second, Podesta argues that Clark has not actually incurred any post-judgment
attorney fees at this point in time. The New Jersey firm is working on a contingency
basis, and will not be paid until the conclusion of the New Jersey action.
For the reasons that follow, the Court finds that Clark’s motion is untimely and
will deny it without prejudice.
DISCUSSION
The Court’s subject matter jurisdiction over this case is based in diversity. 28
U.S.C. § 1332. As such, state law is applied to resolve all substantive questions. Erie R.R.
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v. Thompkins, 304 U.S. 64 (1938). Federal law is applied to resolve all procedural
questions. Id. at 92. The determination of whether to award fees is a substantive question
when a state has enacted a statute where the award of fees is tied to the outcome of the
case—in other words, where a state statute enables a court to award fees to prevailing
parties. Chambers v. NASCO, Inc., 501 U.S. 32, 34, (1991); See also Alyeska Pipeline
Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 260 n. 31 (1975).
The determination of whether to award fees is a substantive question in this case.
Here, Section 12-120(3) of Idaho Code provides that a court may award fees to prevailing
parties to recover for services in any commercial transaction. It reads as follows:
In any civil action to recover on an open account, account stated, note, bill,
negotiable instrument, guaranty, or contract relating to the purchase or sale
of goods, wares, merchandise, or services and in any commercial
transaction unless otherwise provided by law, the prevailing party shall be
allowed a reasonable attorney’s fee to be set by the court, to be taxed and
collected as costs.
The Idaho Supreme Court confirmed that this subsection “provides for mandatory,
not discretionary, award of attorney fees to a prevailing party in commercial litigation.”
Fuller v. Wolters, 119 Idaho 415, 425, 807 P.2d 633, 643 (1991) (citing Griggs v. Nash,
775 P.2d 120 (1989)). In Griggs, the Idaho Supreme Court noted that Section 12-120(3)
provides a substantive, automatic award and such award is in essence “adjunct to the
underlying commercial agreement between the parties.” 775 P.2d 120, 127. The code
defines a “commercial transaction” as “all transactions except transactions for personal or
household purposes.” The transaction Clark and Podesta entered into was for the

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provision of legal services and was a “commercial transaction” covered by Section 12120(3).
Section 12-120(5) of Idaho Code extends Section 12-120(3)’s mandatory award to
post-judgment fees and costs. It reads as follows:
In all instances where a party is entitled to reasonable attorney’s fees and
costs under subsection (1), (2), (3) or (4) of this section, such party shall
also be entitled to reasonable postjudgment attorney’s fees and costs
incurred in attempting to collect on the judgment. Such attorney’s fees and
costs shall be set by the court following the filing of a memorandum of
attorney’s fees and costs with notice to all parties and hearing.
Notably, Section 12-120(5) applies when, if at the time judgment was entered, the
prevailing party would have been entitled to attorney fees under Section 12-120(3).
Magleby v. Gran, 296 P.3d 400 (2013). In other words, an award for post-judgment costs
and fees is mandatory if, at the time of judgment, the prevailing party would have been
entitled to pre-judgment attorney fees. Medical Recovery Services, LLC v. Siler, 394 P.3d
73 (2017).
Therefore, as Clark correctly asserts, there is no requirement that the prevailing
party actually receive an award of pre-judgment attorney fees under Section 12-120(3) to
recover post-judgment fees and costs under 12-120(5). Instead, the requirement is that, at
the time of judgment, the party seeking post-judgment fees was entitled to receive fees as
a “prevailing party” in a civil action related to a commercial transaction.
This conclusion is in line with the Idaho Supreme Court’s explanation of the intent
of Section 12-120(5): “The statute establishes a policy in favor of compensating a party
for reasonable legal expenses incurred in attempts to collect on a judgment when the

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party was entitled to attorney fees and costs in obtaining the judgment.” Action Collection
Services, Inc. v. Bigham, 192 P.3d 1110 (2008). “Prevailing party” at a minimum means
the party “is one who has been awarded some relief by the court.” P.N. v. Seattle School
Dist. No. 1, 474 F.3d 1165, 1169–70 (9th Cir.2007) (quoting Buckhannon Bd. & Care
Home, Inc. v. W. Va. Dep't of Health & Human Res., 532 U.S. 598, 603 (2001)); see also
Mihalka v. Shepherd, 181 P.3d 473, 476–77 (Idaho 2008) (defining prevailing party
under I.R.C.P. 54).
Clark alleged three causes of action in his complaint. (Dkt. 1-4). On August 5,
2016, the Court granted Clark’s motion for summary judgment as to the third cause of
action. (Dkt. 73.) And, as set forth above, on January 18, 2017, the Court entered a
Judgment in favor of Clark pursuant to Podesta’s consent on the first and second causes
of action. (Dkt. 118.) Given this, Clark is the prevailing party, and thus is entitled to an
award of reasonable post-judgment attorney fees pursuant to Sections 12-120(3) and (5)
of Idaho Code.
However, Podesta asks the Court to apply Idaho Rule of Civil Procedure
54(d)(5)’s 14-day filing requirement to bar Clark’s post-judgment motion for attorney
fees and costs. Podesta asserts this rule applies to all post-judgment motions for fees and
costs, including those made pursuant to Section 12-120(5) for costs incurred in
attempting to collect on a judgment. However, as set forth above, federal law applies in
diversity actions to resolve procedural questions within the contours of the Erie doctrine.
Therefore, contrary to Podesta’s assertions, the Federal Rules of Civil Procedure apply to

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determine questions of timely filing and the procedural standards for making motions for
attorney fees—even if the basis for the motion and the award is found in state statute.
The Federal Rules of Civil Procedure provide that a claim for attorney fees must
be made by motion, unless substantive law requires the fees to be proved at trial as an
element of damages. Fed. R. Civ. Pro. 54(d)(2)(A). Here, the substantive law, Section 12120 of Idaho Code, does not require the fees to be proved as an element of damages.
Thus, the claim by Clark was properly made by motion.
The Federal Rules of Civil procedure further require that, unless an applicable
statute or court order provides otherwise, the motion 1) must be filed within 14 days after
the entry of judgment, 2) must specify the statue or other grounds entitling the party to
award, 3) must state the amount sought or provide a fair estimate, and 4) if the court
orders it, must disclose the terms of any fee agreement regarding the services for which
the claim is being made. Fed. R. Civ. P. 54(d)(2)(B)(i-iv).
Therefore, as in Idaho Rule of Civil Procedure 54(d)(5), the federal rule requires
also that a motion for attorney fees be filed within 14 days of entry of judgment.
However, neither rule applies to the applicable statute, Idaho Code Section 12-120(5),
which provides for attorney fees incurred after the judgment has been entered. This
conclusion has foundations in both Idaho state law and federal law jurisprudence
interpreting the respective and complimentary14-day post-judgment filing provisions.
For example, in Marmor, the Idaho case cited by Podesta, The Idaho Court of
Appeals did apply Idaho Rule of Civil Procedure 54(d)(5)’s 14-day time bar to a postjudgment motion for fees and costs. However, the context is distinct from the context
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before this Court. In Marmor, the court entered an order in favor of the award of prejudgment attorney fees and costs. Post-judgment, and more than 14 days after the entry of
that order, the prevailing party filed a memorandum of costs seeking fees and costs
incurred to obtain the order for pre-judgment fees and costs. In other words, the court
applied the 14-day time-clock from the date the order for fees was issued, not the date of
the final judgment. Likewise, federal courts have held that post-judgment motions for
attorney fees are timely if, when filed after the judgment has issued, they are filed within
14 days of the post-judgment order to which they relate. Miltimore Sales, Inc. v. Int'l
Rectifier, Inc., 412 F.3d 685, 691 (6th Cir. 2005).
The application of the Federal counterpart, Rule 54(d)(2)(b)(i), to motions for fees
incurred in attempting to collect a judgment is illogical. In many, if not all cases, a
prevailing party will not know legal action to collect on a judgment will be required until
well after 14 days have passed from the entry of judgment. Further, it often takes months,
if not years, for post-judgment actions to conclude. Until such conclusion, a prevailing
party seeking costs pursuant to Section 12-120(5) would not be able to supply a court
with the amount sought, or even a fair estimate of it.
Finally, the Federal Rules of Civil procedure allow for statutes to define
requirements for the receipt of attorney fees. The Idaho statute at hand states that postjudgment “attorney’s fees and costs shall be set by the court following the filing of a
memorandum of attorney’s fees and costs with notice to all parties and hearing.” The
statute anticipates that the party seeking fees will be able to set forth, in a memorandum,

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the fees and costs it seeks—again, a requirement that is often not contemplated nor can be
completed until well after 14 days have passed since the entry of judgment.
This is exactly the situation in this post-judgment action. And it is exactly the
reason why Clark’s motion for post-judgment fees and costs is untimely.
CONCLUSION
The Court finds that, under the Federal Rules of Civil Procedure and pursuant to
Sections 12-120(3) and (5) of the Idaho Code, Clark, as the prevailing party, is entitled to
reasonable post-judgment fees and costs. However, the Court also finds Clark’s motion is
premature. The post-judgment action has not concluded and the amount of fees and costs
that will be incurred by Clark is unascertainable at this point in time. Clark may renew
this motion once post-judgment activities have concluded, if he chooses to do so.
However, he must file also a memorandum of costs itemizing each claimed expense,
including the terms of any agreement about fees for the services for which the claim is
being made.
ORDER
NOW THEREFORE IT IS HEREBY ORDERED:
1)

Plaintiff’s Motion for Post-Judgment Attorney Fees is DISMISSED
WITHOUT PREJUDICE.
October 26, 2017

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