K&L Gates Construction Law Blog

Prevailing Parties Denied Attorney Fees for Lack of a Public Works License

Harris, Inc. v. Foxhollow Constr. & Trucking Inc., 151 Idaho 761, 264 P.3d 400 (2011)

Following work on a public project, a general contractor brought suit against a paving subcontractor and an excavation subcontractor alleging breach of contract, fraud and other claims.  The paving sub had a public works license for contracts up to $500,000, but the excavation sub had no license.  In what the district court called an “illegal ruse,” the subs agreed to submit a joint bid, using the paving sub’s license.  The total bid, including paving and excavation, exceeded $500,000.  After a trial to the court, the district court entered judgment for defendants, including an award of attorney fees to the paving subcontractor.  The general contractor appealed.

The Supreme Court of Idaho affirmed the judgment in favor of defendants, but reversed the award of attorney fees.  Under Idaho law, reasonable attorney fees are allowed in “any action to recover on a contract for services or in any commercial transaction.” I.C. § 12-120(3).  The Supreme Court found, however, that even if this was a commercial transaction, the contract was illegal because the licensed subcontractor engaged in a “flagrant disregard of the law” by teaming up with an unlicensed subcontractor.  As a result, the paving subcontractor was not entitled to recover its attorney fees despite having prevailed in a commercial transaction.

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