Stipulations Are Limited: “Independent Contractor” for Wage Claims Does Not Establish ICRA “Contractor” Status or Illegality Without Proof

Case: Ward v. Bishop Construction
Court: Supreme Court of Idaho
Date: December 31, 2025
Subject: Idaho Contractor Registration Act (ICRA), illegality defense, scope of stipulations, burden of proof, appellate fees under I.C. § 12-120(3)

I. Introduction

Ward v. Bishop Construction arises from a pay dispute between cousins: Joel Ward (plaintiff) sought compensation for construction labor performed for Bishop Construction, LLC and its sole member Ren Bishop (defendants). Ward sued for wage-related claims and later for breach of contract and unjust enrichment, alleging Bishop failed to pay him for years of work across Idaho, Montana, and Wyoming.

The litigation’s trajectory turned on a trial stipulation. On the day of the bench trial, Ward agreed to stipulate that he was an “independent contractor,” narrowing the case by eliminating wage claims and leaving only breach of contract and unjust enrichment. After Ward prevailed at trial on breach of contract, Bishop—for the first time—invoked the Idaho Contractor Registration Act (ICRA) in a post-trial fee dispute, arguing the contract was illegal because Ward was not registered as an Idaho contractor. The district court accepted the illegality argument, reduced contract damages to out-of-state work, and substituted unjust enrichment damages for Idaho work, later awarding substantial attorney fees.

The Idaho Supreme Court’s key issue was whether the post-trial ICRA illegality ruling could stand on this record—particularly where the “independent contractor” stipulation was not framed as an ICRA stipulation, and where the defendants introduced no meaningful proof at trial that Ward fell within ICRA’s registration requirement.

II. Summary of the Opinion

The Court vacated the district court’s amended/post-trial illegality ruling and remanded with instructions to reinstate the district court’s original findings of fact, conclusions of law, and amended judgment consistent with those original findings.

Central holdings:

ICRA illegality defense failed on this record. Although illegality may be raised at any time, the “facts and circumstances” necessary to support illegality were not established here.
The pretrial stipulation was limited. The stipulation that Ward was an “independent contractor” for purposes of eliminating wage claims did not conclusively establish Ward was a “contractor” under ICRA.
Affirmative defense burden matters. Bishop, as the party asserting ICRA as an affirmative defense, bore the burden to establish facts supporting that defense; the trial record did not contain proof sufficient to show Ward was required to register under ICRA.
Attorney fees on appeal. Ward, as prevailing party, was awarded fees and costs on appeal under I.C. § 12-120(3).

As a practical consequence, the district court’s post-trial shift (reducing contract damages and awarding unjust enrichment for Idaho work) falls away; the case returns to the original breach-of-contract recovery and the original fee/cost posture, as directed on remand.

III. Analysis

A. Precedents Cited (and How They Shaped the Decision)

1. Appellate review after bench trial

The Court reiterated the familiar framework from Alsco, Inc. v. Fatty's Bar, LLC (quoting Lunneborg v. My Fun Life): appellate review asks (i) whether evidence supports the findings of fact, and (ii) whether those findings support the conclusions of law. Findings supported by substantial and competent evidence are not clearly erroneous. This matters because the ultimate question—illegality—was reviewed as a legal question, but it depended on whether the record contained enough facts to support that legal conclusion.

2. Illegality is a legal question, reviewed de novo

Relying on Farrell v. Whiteman, the Court emphasized that illegality is a question of law assessed from “all the facts and circumstances.” It paired this with Griffith v. Clear Lakes Trout Co. and TCR, LLC v. Teton Cnty. for the proposition that appellate courts review questions of law de novo and are not bound by the district court’s legal conclusions drawn from the facts.

The Court also cited Genho v. Riverdale Hot Springs, LLC to underscore that de novo review is “free review.” That mattered because the Supreme Court independently evaluated whether the trial record supported ICRA illegality and concluded it did not.

3. Illegality can be raised at any stage—but still requires a factual foundation

The Court relied on Trees v. Kersey for two points: (i) illegal contracts are generally unenforceable, and (ii) illegality can be raised “at any stage in litigation,” with courts having a duty to raise it sua sponte. The Court also cited Zimmerman v. Brown for the long-standing rule that where licensing is required for public protection, contracts made without the license may be void.

Critically, the Court did not retreat from these doctrines; it instead limited their application by insisting that illegality must still be established from the “facts and circumstances.” In other words, the timing of raising illegality is flexible, but the proof requirements do not evaporate.

4. What makes a contract “illegal”

Citing Quiring v. Quiring, the Court reiterated that an illegal contract rests on illegal consideration—acts or forbearances contrary to law or public policy. That definition anchored the Court’s insistence on connecting ICRA’s registration requirements to proven facts about Ward’s status and conduct, rather than to an ambiguous shorthand label (“independent contractor”).

5. Illegality as an affirmative defense and the burden of proof

Ward invoked Dick v. Reese and I.R.C.P. 8(c)(1)(I) for the proposition that illegality is an affirmative defense. The Court’s analysis ultimately leaned on Chandler v. Hayden: defendants bear the burden of proof at trial on affirmative defenses. The Court faulted Bishop for not putting on proof during the trial that Ward was an ICRA “contractor” required to register, particularly because ICRA was not litigated as an issue at trial.

6. Stipulations: binding only as to what they actually cover, and only if definite

The linchpin precedent is Reding v. Reding: stipulations are conclusive only as to matters “properly contained or included” within them. The Court used Reding to reject Bishop’s attempt to enlarge the scope of a wage-claim stipulation into a conclusive ICRA admission.

The Court reinforced the “definite and certain” requirement for enforceable stipulations/agreements by citing Kohring v. Robertson (treating stipulations as contracts governed by contract principles). Because ICRA was not identified as an issue when the stipulation was made, and because the stipulation did not clearly address ICRA status, it was not “definite and certain” enough to establish that Ward was a registrable ICRA contractor.

7. Attorney fees on appeal in commercial transactions

For fees, the Court invoked I.C. § 12-120(3) and relied on Oakes v. Boise Heart Clinic Physicians, PLLC, which held that breach of employment contract claims can qualify as commercial transactions. Since Ward prevailed on appeal (via his cross-appeal), he was awarded attorney fees and costs, with costs also awarded under I.A.R. 40(a).

B. Legal Reasoning

1. Distinguishing “independent contractor” from an ICRA “contractor”

ICRA defines “contractor” broadly (I.C. § 54-5203(3)) and generally requires registration to engage in contracting in Idaho (I.C. § 54-5204(1)), with enforcement consequences including a bar on maintaining actions for compensation (I.C. § 54-5217(2)).

But the Court drew a crucial distinction: the parties’ stipulation that Ward was an “independent contractor” was made to streamline and eliminate wage claims, not to establish that Ward was a “contractor” under ICRA. In effect, the Court refused to treat a litigation label used for one statutory context (wage law) as a factual admission controlling a different statutory regime (ICRA).

2. The record problem: ICRA was never actually tried

The Court repeatedly returned to the thinness of the record: Ward was the only witness; the evidence focused on hours, rates, and nonpayment; and ICRA was raised only after trial in a motion practice context. Ward was asked a single question about whether he was registered, but the case did not develop the broader factual questions that would ordinarily inform ICRA status (e.g., whether he held himself out as a contractor, the nature and structure of the contracting relationship, whether his role fit statutory exemptions, and other “facts and circumstances” relevant to the registration requirement).

Thus, although the district court correctly recognized it could consider illegality late, it erred by concluding Ward “does not dispute” ICRA contractor status based on a stipulation that did not address ICRA.

3. The Court’s reconciliation: “illegality may be raised anytime” does not mean “illegality may be found without proof”

Bishop argued that because illegality can be raised at any time (and courts may raise it sua sponte), he had no obligation to establish ICRA illegality at trial. The Supreme Court accepted the doctrinal premise but rejected the inference. Even a sua sponte illegality inquiry must be decided from the “facts and circumstances” in the record; here, those facts were not developed sufficiently to support the ICRA conclusion.

4. Remedy: reinstatement of the original findings

Because the ICRA basis for rewriting the judgment failed, the Court directed reinstatement of the original findings of fact and conclusions of law. That instruction is notable: the Court did not remand for additional factfinding on ICRA; it restored the case to its pre-ICRA posture. That choice implicitly reflects concerns of fairness and procedural regularity—ICRA was not tried as an issue, and the post-trial rewrite materially altered merits relief after the evidentiary record had closed.

C. Impact

1. Constraining post-trial “statutory illegality” pivots

The decision signals that while Idaho courts may consider illegality at any stage, parties cannot expect a post-trial illegality theory to succeed absent an evidentiary foundation. Practically, litigants asserting ICRA illegality should raise it early enough to permit discovery, evidence, and focused findings—especially where the defense would bar compensation entirely under I.C. § 54-5217(2).

2. Clarifying the limited evidentiary value of “independent contractor” stipulations

Ward v. Bishop Construction is a cautionary precedent: a stipulation that someone is an “independent contractor” (often used to resolve wage-law classification disputes) does not necessarily establish the person is a “contractor” under ICRA. Courts and litigants must parse the statutory context, the scope of the stipulation, and whether its terms are definite and certain as to the issue later being asserted.

3. Litigation strategy: affirmative defenses must be tried (or at least supported)

By anchoring its ruling in Chandler v. Hayden, the Court reinforces that affirmative defenses require proof. This will likely affect how defendants litigate licensing/registration defenses going forward: raising such defenses only after an adverse merits ruling—without building a record—invites reversal.

4. Fee exposure under I.C. § 12-120(3)

The opinion also reminds litigants that commercial-transaction fee shifting can apply broadly, including in pay disputes framed as contract claims (consistent with Oakes v. Boise Heart Clinic Physicians, PLLC). A party that loses on a late-raised statutory defense may face not only merits liability but also appellate fee liability.

IV. Complex Concepts Simplified

ICRA (“Idaho Contractor Registration Act”): A statute requiring many people/entities performing construction as “contractors” in Idaho to register. If registration is required and not obtained, the unregistered contractor may be barred from suing to collect compensation (I.C. § 54-5217(2)), and may face criminal penalties (I.C. § 54-5217(1)).
Affirmative defense: A defense the defendant must plead and prove. Here, “illegality” (based on ICRA) functioned as a defense that could defeat Ward’s right to recover contract compensation.
Stipulation: An agreement during litigation that certain facts/issues are conceded. Under Reding v. Reding and Kohring v. Robertson, it binds the parties only as to what it clearly covers and only if it is definite and certain.
De novo review: The appellate court decides the legal issue anew, without deferring to the trial court’s legal conclusion (though factual findings are still reviewed for clear error).
Unjust enrichment: An equitable remedy requiring repayment of a benefit unfairly retained. The district court used it to award value for Idaho work after it concluded the contract was illegal; once the Supreme Court restored the original contract judgment, unjust enrichment fell away.
Commercial transaction attorney fees (I.C. § 12-120(3)): A prevailing party may recover attorney fees when the action arises from a commercial transaction (broadly defined as all transactions except personal/household).

V. Conclusion

Ward v. Bishop Construction establishes an important boundary in Idaho contract and licensing litigation: a litigation stipulation that a worker is an “independent contractor” to streamline wage claims does not, without more, prove the worker is an ICRA “contractor” required to register, nor does it supply a sufficient basis for a post-trial finding of contractual illegality. Even though illegality may be raised at any stage (and courts may raise it sua sponte), it must be supported by adequate “facts and circumstances” in the record. Because Bishop did not build that record, the Supreme Court vacated the altered judgment and ordered reinstatement of the original contract findings, while awarding Ward attorney fees and costs on appeal under I.C. § 12-120(3).