In a diversity action, federal courts must, of course, follow state law as to attorney's fees.
Appellant contended appellee company sold concrete-molding forms, but appellee argued payment was for rental. The district court found that the parties entered into a contract for the rental of forms in the first construction job of appellant. Consequently, appellee sought payment for appellant's use of its forms in a second construction job and the return of its forms. Appellee filed a counterclaim seeking a decision giving it ownership of the forms and general and punitive damages for abuse of process. The trial court found that no oral or written agreement had been entered into for use of the forms in the second job and appellant had used the forms despite knowledge on his part that Interform was claiming ownership. The court found that appellant was unjustly enriched by the use of the forms. On appeal, the court affirmed in all respects but remanded for attorney's fees to be determined and awarded to appellee.
Did the trial court err in denying attorney's fees to the appellee?
Finding the trial court acted within both the spirit and letter of Idaho law by admitting evidence extrinsic to purchase orders to determine whether transaction was a sale or lease, the court affirmed in all respects except attorney fees. Under Section 28 of the Idaho Code, the purchase orders were not intended as final expression of the parties' agreement. The parties' intent was not solely determined by what a reasonably intelligent person would have understood such intent to be after examining purchase orders only. Since appellee was entitled to sue on payment bond under Section 54 of the Idaho Code, the court reversed and remanded to determine attorney fees. The provision of law states "In any action brought upon either of the bonds provided herein, or against the public body failing to obtain delivery of the payment bond, the prevailing party, upon each separate cause of action, shall recover a reasonable attorney's fee to be taxed as costs."