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Idaho Supreme Court uncaps attorneys' fees in gas station cleanup case

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By Gabriel Neves | Oct 31, 2018

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BOISE, Idaho (Legal Newsline) – The Idaho Supreme Court has ruled a court abused its discretion when it capped attorneys' fees in a breach of contract dispute between two companies over the cleanup of a spill at a Boise gas station in 2014.

Justice Joel Horton, on the bench of the Idaho Supreme Court, issued a 13-page ruling on Oct. 17, reversing the 4th Judicial District Court in Ada County's decision in the lawsuit filed by H2O Environmental Inc. against Farm Supply Distributors Inc.

H2O sued Farm Supply over allegations of breach of an oral contract after it was hired to perform cleaning services at a gas station in July 2014 and billed $45,828.19 for the work performed. H2O claimed that Farm Supply only paid $38,473.55, still leaving an unpaid balance of $7,354.64. It filed the suit to recover the money, and Farm Supply questioned if a contract was formed and if H2O's charges were reasonable.

A magistrate court decided in H2O's favor, awarding the company $7,354.64 and prejudgment interest of $597.32. H20 later filed a memorandum requesting $55,924.46 in costs and fees. Of that request, the amount of $53,403.50 was for attorneys' fees.

Farm Supply disputed the costs and fees, and H2O appealed to the district court regarding the amount of fees awarded, stating, as of the ruling, that "magistrate court abused its discretion by limiting the award of attorney’s fees to the amount in controversy," the ruling states.

The district court affirmed the decision.

In his ruling, Horton sided with H2O's argument of the fees limitation error, stating that "the district court erred when it affirmed the magistrate court’s arbitrary limitation on the award of attorney’s fees to the amount in controversy."

He also considered that "the magistrate court’s decision to cap the award of attorney’s fees at the amount in dispute was an abuse of discretion."

Chief Justice Roger Burdick and justices Robyn Brody, Richard Bevan and George Southworth also concurred.

Idaho Supreme Court case number 45116

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