District ordered to pay city's legal bill

SANDPOINT - The Independent Highway District is being ordered to pay more than $56,000 in legal costs and fees to the city, which successfully sued the district over withheld tax revenue.

The city sued last year, contending that the district was withholding funds in violation of a long-standing joint powers agreement to turn over tax revenue it collected in Sandpoint to the city.

The district stopped sending the tax revenue after a legal review of the joint powers agreement which concluded the agreement was contrary to the Idaho Constitution.

The district moved to dismiss the city's suit late last year, but Judge John T. Mitchell declined to grant the motion. The district and the city subsequently agreed to turn over approximately $200,000 while the case wended its way through 1st District Court.

Later, the city moved for summary judgment, contending there were no issues of material fact that would necessitate a trial.

Mitchell agreed and granted summary judgment in favor of the city on July 31. Mitchell ruled there were no ambiguities in the agreement. Moreover, the Idaho Supreme Court declined to hear an appeal by the highway district.

After prevailing on the summary judgment motion, C. Matthew Andersen, the city's outside counsel in the matter, moved for the award of $56,131 in attorney fees and $775 in costs.

Andersen noted in court documents that novelty and difficulty of the legal questions in the case influenced the cost of the lawsuit.

"The issues raised by IHD, and the manner in which they were raised, created a difficult procedural posture. In essence, the case needed to be tried out on a motion that was not appealable but which presented issues of Constitutional proportion that the IHD contend are novel," Andersen wrote.

Mitchell ordered the district to pay $56,131 in legal costs plus an unspecified amount of post-judgment interest to the city on Aug. 22, court records show.