Kristen Abendroth, V John Ryan Bays ( 2022 )

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
KRISTEN ABENDROTH, a Washington
resident; KYLE ABENDROTH, a
Washington resident; DOUGLAS BILES, a No. 83333-2-I
Washington resident; ALICE BILES, a
Washington resident; ALEJANDRO DIVISION ONE
CALDERON, a Washington resident;
EYRIA EATMON, a Washington resident;
DIONNE EATMON, a Washington
resident; CALVIN JONES, a Washington UNPUBLISHED OPINION
resident; CHARLOTTE JONES, a
Washington resident; DARRIN MARTIN, a
Washington resident; AMBER MARTIN, a
Washington resident; MATTHEW
SHAFFER, a Washington resident; JONI
MCKEE, a Washington resident; KRISTY
COLUNGA, a Washington resident;
JOHNNY WILLIAMS JR., a Washington
resident,
Appellants,
v.
BENJAMIN RYAN COMMUNITIES LLC,
fka BUILDERS OF AMERICA LLC, a
Washington Limited Liability Company,
Respondent.
BUILDERS OF AMERICA, LLC, a
Washington limited liability company,
Third-Party Plaintiff,
v.
AA SIDING LLC, a Washington limited
liability company; KLIM ROOFING AND
CONSTRUCTION, INC., a Washington
corporation; and CUSTOM HOME
Citations and pin cites are based on the Westlaw online version of the cited material.
No. 83333-2-I/2
SOLUTIONS LLC, a Washington limited
liability company; ROBERT E. ANSON,
dba ANSON MASONRY; ANGEL’S HOME
CONSTRUCTION, INC., a Washington
corporation; NORTHWEST CUSTOM
DECKS, INC., a Washington corporation;
CHARLES W. PARKER, dba PARKER &
SONS; PACIFIC CHOICE
CONSTRUCTION LLC, a Washington
limited liability company; and RUSTY
NAIL, INC., a Washington corporation,
Third-Party Defendants.
CHUN, J. — Plaintiff homeowners sued Benjamin Ryan Communities LLC
(BRC), f/k/a Builders of America LLC, over alleged defects in their houses. BRC
moved for summary judgment. Plaintiffs did not file briefing or evidence
opposing the motion and did not appear at the summary judgment hearing. The
court granted summary judgment dismissing plaintiffs’ claims. Plaintiffs moved
for vacation of the order under CR 60(b), arguing excusable neglect. The court
vacated its summary judgment order to allow plaintiffs to appear for a summary
judgment hearing but prohibited further briefing. Following a second summary
judgment hearing, the court again granted summary judgment, dismissing all of
plaintiffs’ claims. BRC requested attorney fees and costs, which the court
awarded.
Plaintiffs appeal, contending: (1) the trial court erred by prohibiting further
briefing and submission of evidence, (2) the court erred by not considering their
declarations, (3) the court erred by granting summary judgment on the breach of
contract claims, (4) the court erred by dismissing some claims with prejudice
because BRC failed to so request, (5) RCW 64.50.020 prohibits the court from
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dismissing its claims with prejudice, (6) the court erred by not applying a setoff to
the award of attorney fees and costs, (7) the court erred by not applying the
doctrine of unjust enrichment to the award, (8) the contract provision providing for
attorney fees and costs was ambiguous, (9) BRC failed to prove damages or
pecuniary loss, and (10) BRC failed to prove the reasonableness of its requested
award. For the reasons below, we affirm.
I. BACKGROUND
Plaintiffs are homeowners of 10 houses in Tacoma. They sued BRC—the
company that constructed, marketed, and sold the houses—asserting claims
related to alleged defects in the houses. The claims were breach of contract,
breach of warranty, violation of the Washington Consumer Protection Act (CPA),1
negligent misrepresentation, and breach of the independent duty doctrine.
A. First Summary Judgment Hearing
BRC moved for summary judgment. Its motion did not explicitly request
dismissal with prejudice, but it did request dismissal without prejudice for the
breach of warranty claims. BRC made these arguments: (1) that the construction
statute of repose barred all claims related to seven of the houses, (2) that
Washington law did not support the breach of the independent duty doctrine
claim, (3) that Washington law did not support the negligent representation claim,
(4) that plaintiffs did not meet the elements of a CPA claim, (5) that plaintiffs
failed to provide adequate notice for the breach of warranty claims as
RCW 64.50.020 requires, (6) that one of the plaintiffs was not in privity with it,
1
Ch. 19.86 RCW.
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and (7) that plaintiffs failed to establish the elements of the breach of contract
claim. It supported its motion with multiple declarations and exhibits.
Defense counsel originally noted the summary judgment hearing for
November 1, 2019. They notified opposing counsel. Then, to comply with a
case management requirement, defense counsel re-noted the hearing for August
30, 2019, and informed opposing counsel. Sarah Noble, the office manager for
plaintiffs’ counsel, pointed out to defense counsel that setting the hearing on
August 30 would violate CR 56’s requirement of 28 days’ notice, and said that
multiple days, including September 20, were open. Thus, defense counsel re-
noted the hearing for September 20 and again notified opposing counsel.
Yet plaintiffs did not respond to the summary judgment motion; it did not
submit any briefing or evidence in opposition. On September 17, three days
before the hearing, Noble emailed defense counsel, asking whether there was a
hearing on September 20. Defense counsel responded affirmatively the next
morning.
On September 20, the trial court held the summary judgment hearing and
plaintiffs’ counsel did not appear. The court granted the summary judgment
motion and signed BRC’s proposed order. Defense counsel downloaded the
executed order on October 1 and sent it to plaintiffs’ counsel on October 3. By
that time, the 10-day period to file a motion for reconsideration had passed.
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B. CR 60(b) Motion
On October 10, plaintiffs filed a CR 60(b)2 motion requesting that the court
vacate the summary judgment order. Plaintiffs’ counsel claimed that he thought
the summary judgment hearing was still on November 1. He contended that
defense counsel purposefully waited until 10 days had passed before sending
the order to plaintiffs’ counsel so that they would be unable to move for
reconsideration. Plaintiffs’ counsel attached declarations from attorney Todd
Skoglund and expert Martin Flores. The Skoglund declaration included exhibits
such as purchase and sale agreements and warranties. The expert declaration
concerned Flores’s inspections of the houses and discovery of defects.
BRC opposed the CR 60(b) motion, arguing that it was simply a motion for
reconsideration disguised as a CR 60(b) motion. BRC contended that the
evidence plaintiffs submitted was inadmissible for multiple reasons and that it
was directed at opposing the summary judgment motion, not at supporting the
CR 60(b) motion.
The trial court held a hearing on the CR 60(b) motion. There, Skoglund
argued for the first time that he suffered from vertigo and that the condition
amounted to excusable neglect under CR 60(b)(1). The court concluded that
Skoglund’s illness led to excusable neglect and vacated the summary judgment
order. The court asked BRC to schedule another summary judgment hearing so
2
CR 60(b) provides, in part, “On motion and upon such terms as are just, the
court may relieve a party or the party’s legal representative from a final judgment, order,
or proceeding for the following reasons: (1) Mistakes, inadvertence, surprise, excusable
neglect or irregularity in obtaining a judgment or order.”
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plaintiffs could appear for oral argument. But the court noted that the summary
judgment deadlines had passed and, in its order, stated that briefing on the
summary judgment motion was closed.
C. Second Summary Judgment Hearing
The court held a second summary judgment hearing on November 15.
Plaintiffs argued that the declarations they submitted with their CR 60(b) motion
were properly before the court for its consideration of the summary judgment
motion. BRC disagreed. The court did not expressly address the issue.
Plaintiffs conceded that BRC should prevail on three of its arguments: the ones
on the independent duty doctrine, negligent misrepresentation, and the CPA.
The court accepted the concessions and, after argument, granted BRC’s
summary judgment motion on all the claims.
The parties then submitted competing orders, leading to another hearing
on November 26. During the hearing, plaintiffs argued that all their claims should
be dismissed without prejudice rather than with prejudice. The court signed
BRC’s proposed order. The order listed the submissions the court considered,
and the list did not include the declarations plaintiffs submitted in connection with
their CR 60(b) motion. The order dismissed with prejudice all claims associated
with seven of the houses as barred by the statute of repose. It dismissed with
prejudice the breach of contract claims for the remaining three houses. And it
dismissed without prejudice the breach of warranty claims for these three houses
based on plaintiffs’ failure to adequately notify the defendant under
RCW 64.50.020.
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D. Attorney Fees and Costs
BRC then moved for $66,410.60 in attorney fees and $64,249.39 in costs
based in part on language in the purchase and sale agreements. The language
states, “[I]f Buyer or Seller institutes suit against the other concerning this
Agreement the prevailing party is entitled to reasonable attorneys’ fees and
expenses.” Plaintiffs responded that they did not have to pay BRC fees and
costs because insurers had provided BRC with a defense. They also challenged
the reasonableness of the fees.
The court held a hearing on January 24, 2020. It noted that no law
supported a setoff of the fees based on insurers having paid for some or all of the
attorney fees and that the contractual language clearly provided for fees and
costs to the prevailing party. The court ruled for BRC and entered an order
awarding fees and costs in the amount BRC requested.
E. Appeal
In February 2020, plaintiffs appealed the summary judgment order and the
order awarding attorney fees and costs.3
In September, the trial court entered a judgment for fees and costs, which
included findings of fact and conclusions of law. The court found the hours spent
on the case and the hourly rate to be reasonable. And it found the expert costs
3
Plaintiffs did not designate the court’s order on plaintiffs’ CR 60(b) motion in
their notice of appeal as required by RAP 5.3(a). BRC does not raise a RAP 5.3(a)
argument. We review the order pursuant to RAP 2.4(b). See Cox v. Kroger Co., 2 Wn.
App. 2d 395, 407, 409 P.3d 1191 (2018) (we will review an undesignated order if “‘the
order or ruling prejudicially affects the decision designated in the notice’” (quoting
RAP 2.4(b))).
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No. 83333-2-I/8
to be reasonable.
Division Two sua sponte issued an order granting plaintiffs leave to
supplement the record with the fee judgment and to submit a supplemental brief
addressing the judgment. Plaintiffs filed a supplemental brief, which did not
challenge the judgment or any findings and instead stated that the judgment
“appears to be compliant with the Civil Rules and Rules of Appellate Procedure.”
II. ANALYSIS
A. Burnet Claim
Plaintiffs say that the trial court erred by prohibiting them from submitting
briefing and evidence in opposition to BRC’s motion for summary judgment.
They claim that excluding evidence was a harsh sanction for which the court
failed to conduct a required Burnet4 analysis. BRC responds that the court had
discretion to include “just” terms to its granting of plaintiffs’ CR 60(b) motion, and
the ruling prohibiting briefing and submission of evidence was such a term and
not a sanction. We agree with BRC.
We review a trial court’s ruling on a CR 60(b) motion for abuse of
discretion. Jones v. Home Care of Wash., Inc., 152 Wn. App. 674, 679, 216 P.3d
1106 (2009). “Discretion is abused where it is exercised on untenable grounds
or for untenable reasons.” Id.4
Burnet v. Spokane Ambulance, 131 Wn.2d 484, 494, 933 P.2d 1036 (1997)
(requiring a court applying a “harsher” remedy to consider on the record whether (1) the
party acted willfully or deliberately, (2) the other party was substantially prejudiced, and
(3) a lesser sanction would suffice (quoting Snedigar v. Hodderson, 53 Wn. App. 476,
487, 768 P.2d 1 (1989)).
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No. 83333-2-I/9
CR 60(b) provides, “On motion and upon such terms[5] as are just, the
court may relieve a party or the party’s legal representative from a final judgment,
order, or proceeding.” (Emphasis added.) “‘The decision to impose terms as a
condition on an order setting aside a judgment lies within the discretion of the
court.’” Hous. Auth. of Grant County v. Newbigging, 105 Wn. App. 178, 192, 19
P.3d 1081 (2001) (quoting Knapp v. S.L. Savidge, 32 Wn. App. 754, 756, 649
P.2d 175 (1982)). CR 60(b) “is equitable in nature and gives the trial court liberal
discretion to ‘preserve substantial rights and do justice between the parties.’” Id.(quoting Pamelin Indus., Inc. v. Sheen–U.S.A., Inc., 95 Wn.2d 398, 404, 622
P.2d 1270 (1981)).
Plaintiffs compare this case to Keck v. Collins, 184 Wn.2d 358, 368, 357
P.3d 1080 (2015), in which the trial court held that an order striking evidence as
untimely for a summary judgment hearing was a harsh sanction requiring a
Burnet analysis. They contend the trial court erred by not conducting such an
analysis here and that such an analysis would prohibit the exclusion of evidence.
But this case differs from Keck. There, the plaintiffs filed an affidavit after the
summary judgment filing deadline but before the summary judgment hearing and
the court struck the affidavit and did not consider it. Id. at 366–67. Here,
plaintiffs did not submit any evidence before the summary judgment hearing,
untimely or otherwise. Instead, plaintiffs failed to appear for the hearing, then
5
While “terms” may refer in some cases to payment of legal expenses, it is not
limited to such payments. Cf. Guess?, Inc. v. Chang, 912 F. Supp. 372, 380 (N.D. Ill.
1995) (affirming the trial court’s application of a “condition that the personal property
identified in the turnover order remain in the possession of Guess? and not be
liquidated”).
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No. 83333-2-I/10
moved for vacation of the summary judgment order under CR 60(b). As BRC
points out, the court’s decision to prohibit new briefing and evidence stemmed
from its order on the CR 60(b) motion.
Courts have “liberal discretion” to “‘do justice between the parties’” and
this includes imposing conditions to its order granting relief under CR 60(b).
Newbigging, 105 Wn. App. at 192 (quoting Pamelin Indus., Inc., 95 Wn.2d at
404). And plaintiffs do not argue that the court’s decision was not a “just” term
under CR 60(b).
B. Claim of Deceit
Plaintiffs claim that BRC “deceitful[ly]” told the court to rely on the
declarations plaintiffs submitted with their CR 60(b) motion during the hearing on
that motion and then switched positions at the summary judgment hearing. They
say the trial court then erred by not considering the declarations when ruling on
the summary judgment motion. BRC responds that the trial court did not err and
made clear at the earlier hearing that it was not going to consider the
declarations as they were untimely. We conclude that the court acted within its
discretion by not considering plaintiffs’ declarations from their CR 60(b) motion
when deciding the summary judgment motion.
We review decisions to exclude evidence for abuse of discretion. Coogan
v. Borg-Warner Morse Tec Inc., 197 Wn.2d 790, 804, 490 P.3d 200 (2021).
Plaintiffs submitted two declarations with their CR 60(b) motion. The
declarations and attached exhibits were clearly submitted to oppose the
summary judgment motion rather than support the CR 60(b) motion. The Flores
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No. 83333-2-I/11
declaration was about the expert’s findings about defects in the houses and the
Skoglund declaration was titled “Declaration of Todd Skoglund in Support of
Plaintiffs’ Response to Benjamin Ryan Communities LLC fka Builders of
America, LLC’s Motion for Partial Summary Judgment.” In its briefing and at the
CR 60(b) hearing, BRC argued to the trial court that the evidence plaintiffs
submitted with their CR 60(b) motion—the two declarations and attached
exhibits—were inadmissible and were attempts to rebut the summary judgment
motion after deadlines had passed. But at the CR 60(b) hearing, BRC also said
My view is he attempted a chance to—he attempted a chance in a
response to a motion for summary judgment by submitting evidence
with this motion. That evidence does not relate to CR 60 or the CR
60 elements. It relates to summary judgment.
So I would submit that it is briefed now—or you do have the
evidence in front of you, and that you should consider it on that. Any
other—anything else would amount to a third chance to respond to
the motion for summary judgment, which would be unfair.6
At the hearing, the court recognized that the submission of evidence was
untimely. It then ruled that no further briefing, and apparently submission of new
evidence, was permitted but did not explicitly say whether it would consider the
two declarations. During the second summary judgment hearing, BRC
contended that there was no evidence in opposition to its summary judgment
motion in the record. The court did not address this contention during the
hearing. In the court’s order granting BRC’s summary judgment motion, the
court did not list the declarations among the materials it considered in ruling on
6
Plaintiffs rely on this language to support their argument that BRC initially
agreed that the declarations were properly before the court.
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No. 83333-2-I/12
the motion.7
Plaintiffs’ argument focuses on BRC’s alleged wrongdoing, i.e., saying the
court should consider the declarations and then saying the court should not
consider them. But they cite no law supporting the claim that this led to
reversible error by the trial court. M.E. through McKasy v. City of Tacoma, 15
Wn. App. 2d 21, 39, 471 P.3d 950 (2020), review denied sub nom. M.E. through
Wilson v. City of Tacoma, 196 Wn.2d 1035, 478 P.3d 90 (2021) (“We will not
consider issues or assignments of error that are not supported by argument or
authority”); RAP 10.3(a)(6).
For the first time in their reply brief, plaintiffs say that BRC cannot claim
the declarations were properly excluded based on their untimeliness because
when the court vacated the first order granting summary judgment, all the
deadlines associated with the motion for summary judgment were necessarily
vacated. We need not address arguments raised for the first time in a reply brief.
Cowiche Canyon Conservancy v. Bosley, 118 Wn.2d 801, 809, 828 P.2d 549(1992) (“An issue raised and argued for the first time in a reply brief is too late to
warrant consideration.”). Also, plaintiffs cite no law to support this contention.
See M.E. through McKasy, 15 Wn. App. 2d at 39.
7
Plaintiffs claim that by saying, “This Court is satisfied that the—that the facts
before me, which I will be—which I have considered, are sufficient to find that there was
excusable neglect,” the court indicated that it admitted the declarations into the record.
But this claim is an inferential leap. And in any event, the court indicated that the
summary judgment deadlines had passed and that it did not consider the declarations in
its order by not listing them as documents it considered.
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C. Claim of “Ample” Evidence
Plaintiffs say the court erred by granting BRC’s summary judgment motion
when there was “ample” evidence in the record to support their breach of
contract claim. BRC responds that because the court rightfully excluded the
declarations submitted by plaintiffs, there was no evidence in the record to
establish a genuine issue of material fact. It also emphasizes that the court’s
order dismissing the other four claims and all claims as to seven of the houses
should remain undisturbed on appeal as plaintiffs’ challenge is limited to the
breach of contract claim. We agree with BRC.
We review de novo orders granting summary judgment. Turner v. Dep’t of
Soc. & Health Servs., 198 Wn.2d 273, 284, 493 P.3d 117 (2021). “Summary
judgment is appropriate where there is no genuine issue as to any material fact,
so that the moving party is entitled to judgment as a matter of law.” Id. “We view
the facts in a light most favorable to the nonmoving party.” Id.In granting summary judgment, the court accepted plaintiffs’ concessions
as to three of their five claims: the independent duty doctrine claim, the negligent
misrepresentation claim, and the CPA claim. Plaintiffs do not claim error as to
the dismissal of those three claims. The court also ruled that the statute of
repose barred all claims for seven of the houses and thus granted summary
judgment. Plaintiffs do not challenge the application of the statute of repose on
appeal so we do not disturb the dismissal of all claims for those seven houses.8
8
Plaintiffs challenge the summary judgment dismissal based on the statute of
repose for the first time in their reply brief, so we do not address it. Cowiche Canyon
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Finally, plaintiffs do not challenge the dismissal of the breach of warranty claims
aside from the discussion below about dismissal without prejudice. Thus, we
review the summary judgment order as it relates to the dismissal of the breach of
contract claims for the remaining three houses.
As discussed above, in granting summary judgment, the trial court
apparently did not consider the declarations attached to the CR 60(b) motion.
And, discussed above, plaintiffs do not establish that the court erred in excluding
them. Thus, the trial court did not consider any evidence in opposition to the
motion for summary judgment, and so we cannot say that the court erred in
deciding that there was no genuine issue as to any material fact for the breach of
contract claims.
D. Claim of Failure to Request Dismissal with Prejudice
Plaintiffs say the court erred by dismissing their claims with prejudice
when BRC did not request dismissal with prejudice in its summary judgment
motion, reply, or proposed order. BRC responds that it was not required to so
request and, citing a federal case,9 says that summary judgment dismissals are
presumed to be with prejudice. We conclude the court did not err.
“It is the responsibility of the moving party to raise in its summary
judgment motion all of the issues on which it believes it is entitled to summary
judgment.” White v. Kent Med. Ctr., Inc., P.S., 61 Wn. App. 163, 168, 810 P.2d 4Conservancy, 118 Wn.2d at 809 (“An issue raised and argued for the first time in a reply
brief is too late to warrant consideration.”).
9
Rivera v. PNS Stores, Inc., 647 F.3d 188, 195 (5th Cir. 2011) (“a motion for
summary judgment ‘is necessarily granted with prejudice’” (quoting Quintero v.
Klaveness Ship Lines, 914 F.2d 717, 722 (5th Cir.1990)).
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(1991).
BRC did not request dismissal with prejudice in its summary judgment
motion. But in part of its motion, pertaining to dismissal under RCW 64.50.020,
which requires dismissal to be without prejudice, BRC explicitly requested that
the breach of warranty claims be dismissed without prejudice. It also did not
specify that dismissal was with prejudice in its first proposed order. This order
was later signed but then vacated by the court. The second summary judgment
order did specify which claims were dismissed with prejudice and which claims
were not.
Plaintiffs claim, without citing authority, that requesting that dismissal
occur with prejudice is an “issue,” which must be raised in the summary judgment
motion. See White, 61 Wn. App. at 168 (holding that all “issues” must be raised
in a summary judgment motion). But “[w]e will not consider issues or
assignments of error that are not supported by argument or authority.” M.E.
through McKasy, 15 Wn. App. 2d at 39; RAP 10.3(a)(6). In any event, that BRC
specified in its motion that it was requesting dismissal of the breach of warranty
claims without prejudice suggests that it sought dismissal with prejudice of the
other claims. Moreover, BRC’s arguments for summary judgment, aside from the
argument about lack of notice under RCW 64.50.020, were of the type that would
seek dismissal with prejudice (e.g., that the statute of repose barred some claims
or that Washington law does not provide for certain types of claims). Plaintiffs
cannot cure the defects of those claims like it can a lack of notice. Plaintiffs also
emphasize that dismissals under CR 41—concerning voluntary and involuntary
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dismissals—are without prejudice. But the dismissal of claims here was not
under CR 41, it was a summary judgment under CR 56.
E. Dismissal Without Prejudice Under RCW 64.50.020
Plaintiffs say the court erred by dismissing all their claims with prejudice
because RCW 64.50.020 requires dismissal to be without prejudice. BRC
responds by emphasizing that the court did dismiss without prejudice the breach
of warranty claims, to which RCW 64.50.020 applied. We conclude the court did
not err.
RCW 64.50.020(1) requires that adequate notice be given to a
construction professional in a construction defect action. If adequate notice is
not given, the trial court must dismiss the action without prejudice.
RCW 64.50.020(6).
The court dismissed plaintiffs’ breach of warranty claims without prejudice
under RCW 64.50.020(6) but dismissed all other claims with prejudice. Thus,
plaintiffs incorrectly claim that the court dismissed all of their claims with
prejudice. It dismissed the breach of warranty claims without prejudice, as
required by the statute.
Plaintiffs also appear to contend that the statute is somehow jurisdictional
and that once the trial court decided that plaintiffs had given inadequate notice
under RCW 64.50.020, it should have dismissed all their other claims without
prejudice as well. Plaintiffs cite no authority to support such a contention. See
M.E. through McKasy, 15 Wn. App. 2d at 39 (“We will not consider issues or
assignments of error that are not supported by argument or authority”);
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RAP 10.3(a)(6).
F. Attorney Fees and Costs
1. Setoff for attorney fees and costs paid by insurers
As for the award of attorney fees and costs, plaintiffs say the trial court
erred by failing to recognize its discretion to apply a setoff or other equitable
doctrine, and by not applying such a setoff, given that insurers paid for BRC’s
defense. BRC says Washington and non-Washington courts have rejected the
idea that a prevailing party is not entitled to attorney fees and costs simply
because an insurer has paid for those fees and costs. We conclude the court did
not err.
“Whether a party is entitled to attorney fees is an issue of law that we
review de novo.” Fairway Estates Ass’n of Apt. Owners v. Unknown Heirs,
Devisees of Young, 172 Wn. App. 168, 181, 289 P.3d 675 (2012).
Attorney fees may be awarded only if authorized by contract, statute, or
recognized equitable ground. Evanston Ins. Co. v. Penhall Co., 13 Wn. App. 2d
863, 877–78, 468 P.3d 651 (2020), review denied, 196 Wn.2d 1040, 479 P.3d
713 (2021).
The purchase and sale agreements between plaintiffs and BRC include an
attorney fee provision, stating, “if Buyer or Seller institutes suit against the other
concerning this Agreement the prevailing party is entitled to reasonable
attorneys’ fees and expenses.” The parties do not dispute BRC is the prevailing
party. In support of its motion for fees and costs, BRC introduced billing records.
These records showed that insurers AIG and Wesco paid for some fees and
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costs. At the hearing, plaintiffs argued that despite the contract provision, they
should not be ordered to pay for attorney fees and costs because the insurers
paid for BRC’s defense. The court responded, “I have to look at the four corners
of the document. It doesn’t—the document itself, that clause doesn’t say, you
know, exclusive of any, you know, setoff, or prepayment by—pursuant to any
indemnification.” The court then awarded BRC attorney fees and costs.
Plaintiffs’ argument that the court should have applied a setoff for the
amount already paid by the insurers centers on the theory that BRC is not
entitled to attorney fees and costs because insurers provided it with a defense.
But plaintiffs cite no authority supporting such a theory. This court rejected a
similar argument in Roats v. Blakely Island Maint. Comm’n, Inc., 169 Wn. App.
263, 286 n.10, 279 P.3d 943 (2012). See also Pub. Util. Dist. 1 of Grays Harbor
County v. Crea, 88 Wn. App. 390, 396, 945 P.2d 722 (1997) (“The PUD argues
that the trial court should not have awarded attorney’s fees under the statute
because Crea’s fees were paid by an insurer that was not a party to the lawsuit. .
. . This argument has no merit”). In Roats, the plaintiffs argued that the
defendants “may not be granted an award of attorney fees to the extent that
those fees were paid by its insurer.” 169 Wn. App. at 286 n.10. This court held
that the award was proper, noting, “Importantly, the purpose of such an award is
not simply to ‘make the Association whole,’ as the Roatses contend; it is also to
discourage the nonpayment of assessments by the Association’s members.”10
10
Plaintiffs seek to distinguish Roats by pointing out that here there is no other
purpose to the award, such as discouraging nonpayment. But such an award could
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Id. And other jurisdictions have rejected similar arguments.11
Citing Corder v. Brown, plaintiffs contend that, without a setoff, BRC would
reap an improper windfall. 25 F.3d 833, 839 (9th Cir. 1994). In Corder, the Ninth
Circuit held that a setoff was needed to prevent an “improper windfall” when
some of the attorney fees had been paid by two other settling defendants. Id.Corder, which is not binding on this court, is distinguishable because here, it was
insurers, not other defendants, who paid for the fees and costs. Plaintiffs fail to
establish that the court erred by not applying a setoff.12
2. Unjust enrichment
Plaintiffs say the court erred by not applying the unjust enrichment
doctrine and rejecting BRC’s request for attorney fees. BRC notes that this
argument also relies on the theory that a party cannot recover fees and costs if
discourage parties from bringing meritless claims. And the purpose of the award was
not the key basis for the court’s decision in Roats.
11
Avalon Care Ctr. - Fed. Way, LLC v. Brighton Rehab., LLC, No. 2:10-CV-
01038 BSJ, 2013 WL 4027535, at *4 (D. Utah Aug. 7, 2013), aff’d, 595 F. App’x 794
(10th Cir. 2014) (“‘Aegis is not excused from its obligation to reimburse Brighton for
attorney’s fees incurred in Brighton’s defense because Brighton’s defense costs were
actually paid by Brighton’s insurer. . . . ‘[i]t is well-settled that an award of attorney fees is
not necessarily contingent upon an obligation to pay counsel.’” (alteration in original)
(quoting Wilson v. Gen. Servs. Admin., 126 F.3d 1406, 1409 (Fed. Cir. 1997))); New
Flyer Indus. Canada ULC v. Rugby Aviation, LLC, No. C18-299RSL, 2020 WL 5203580,
at *1 (W.D. Wash. Sept. 1, 2020) (“[P]laintiffs contend that defendant lacks standing to
recover attorney’s fees because defendant’s insurance carrier paid its attorney’s fees
and costs. . . . The Court rejects plaintiffs’ standing argument”).
12
Plaintiffs contend as a policy matter that allowing for “double recovery” would
chill litigation by harmed homeowners. But on the other hand, adopting plaintiffs’
approach could encourage unwarranted lawsuits against insured parties. See Taniguchi
v. Kan Pac. Saipan, Ltd., 633 F.3d 1218, 1220 (9th Cir. 2011), vacated and
remanded, 566 U.S. 560, 132 S. Ct. 1997, 182 L. Ed. 2d 903 (2012) (“If we were to
adopt Taniguchi’s suggested analysis, a plaintiff could file lawsuits against an insured
defendant ‘without incurring litigation costs after losing on the merits.’ In essence,
Taniguchi’s reasoning punishes a prevailing party for being insured.” (citation omitted)
(quoting Manor Healthcare Corp. v. Lomelo, 929 F.2d 633, 639–40 (11th Cir. 19991))).
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No. 83333-2-I/20
an insurer provides a defense and says that this argument should also be
rejected as unsupported. We conclude the court did not err.
“A person has been unjustly enriched when [they have] profited or
enriched [themselves] at the expense of another contrary to equity.” Farwest
Steel Corp. v. Mainline Metal Works, Inc., 48 Wn. App. 719, 731–32, 741 P.2d 58(1987). A party claiming unjust enrichment must prove: “(1) the defendant
receive[d] a benefit, (2) the received benefit is at the plaintiff’s expense, and
(3) the circumstances make it unjust for the defendant to retain the benefit
without payment.” Young v. Young, 164 Wn.2d 477, 484–85, 191 P.3d 1258(2008).
As BRC points out, the core of this argument is the same as plaintiffs’
setoff argument discussed and rejected above. Plaintiffs also cite no authority
applying the unjust enrichment doctrine to the award of attorney fees, nor are we
aware of any. Because plaintiffs do not establish that the unjust enrichment
doctrine applies here, we reject their argument.
3. Contract language
Plaintiffs say the term “entitled” in the attorney fee provision of the
purchase and sale agreements renders the provision ambiguous.13 They say
that the provision does not specify who is to pay the prevailing party attorney
fees and costs and when such a payment should occur and that, because of the
ambiguity, the provision should be interpreted in their favor. BRC says we
13
Plaintiffs appear to make the same ambiguous contract language argument
under multiple headings in their brief. We address all of them here.
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should decline to address this argument because it is unsupported by argument
and authority. We address this argument and conclude the court did not err.
“Whether a contractual provision authorizes the award of attorney fees is a
question of law reviewed de novo.” Renfro v. Kaur, 156 Wn. App. 655, 666–67,
235 P.3d 800 (2010).
“When interpreting contracts, we attempt ‘to determine the parties’ intent
by focusing on the objective manifestations of the agreement, rather than on the
unexpressed subjective intent of the parties,’ imputing an intention corresponding
to the reasonable meaning of the words used.’” In re Est. of Petelle, 195 Wn.2d
661, 665, 462 P.3d 848 (2020) (quoting Hearst Commc’ns, Inc. v. Seattle Times
Co., 154 Wn.2d 493, 503, 115 P.3d 262 (2005)).
The intent of the parties may be discovered from “the contract as a
whole, the subject matter and objective of the contract, all the
circumstances surrounding the making of the contract, the
subsequent acts and conduct of the parties to the contract, and the
reasonableness of respective interpretations advocated by the
parties.”
Healy v. Seattle Rugby, LLC, 15 Wn. App. 2d 539, 544–45, 476 P.3d 583 (2020)
(internal quotation marks omitted) (quoting Tanner Elec. Coop. v. Puget Sound
Power & Light Co., 128 Wn.2d 656, 674, 911 P.2d 1301 (1996) ). “A contract
term is ambiguous only when, viewed in context, two or more meanings are
reasonable.” Id. at 545. “A court will not read ambiguity into a contract ‘where it
can reasonably be avoided.’” GMAC v. Everett Chevrolet, Inc., 179 Wn. App.
126, 135, 317 P.3d 1074 (2014) (quoting Mayer v. Pierce County Med. Bureau,
Inc., 80 Wn. App. 416, 421, 909 P.2d 1323 (1995)). “An interpretation which
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gives effect to all of the words in a contract provision is favored over one which
renders some of the language meaningless or ineffective.” Id. (quoting Seattle–
First Nat’l Bank v. Westlake Park Assocs., 42 Wn. App. 269, 274, 711 P.2d 361(1985)).
The attorney fees provision of the purchase and sale agreements
provides:
Professional Advice and Attorneys’ Fees. Buyer and Seller are
advised to seek the counsel of an attorney and a certified public
accountant to review the terms of this Agreement. Buyer and Seller
agree to pay their own fees incurred for such review. However, if
Buyer or Seller institutes suit against the other concerning this
Agreement the prevailing party is entitled to reasonable attorneys’
fees and expenses.
This provision is not ambiguous, and its reasonable meaning supports the court’s
award of attorney fees and costs to BRC. The second sentence in the provision
explains that plaintiffs and BRC are respectively responsible for paying their own
fees for a review of the agreement. The final sentence, the one at issue here,
begins, “However,” and provides that in the event of a lawsuit “the prevailing
party is entitled to reasonable attorneys’ fees and expenses.” The use of the
word, “However,” explains the relationship between the two sentences. Each
party is responsible for their own fees, however, in the case of a lawsuit one
party is responsible for the other party’s fees and expenses. If the provision
would be satisfied by an insurer paying said fees and expenses, the sentence
would not need to be qualified in such a way. See GMAC, 179 Wn. App. at 135
(“‘An interpretation which gives effect to all of the words in a contract provision is
favored over one which renders some of the language meaningless or
22
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ineffective.’” (quoting Seattle–First Nat’l Bank, 42 Wn. App. at 274)).
4. Damages and pecuniary loss
Plaintiffs say the trial court erred by awarding attorney fees because BRC
proved no damages or pecuniary loss. BRC does not respond. We conclude the
trial court did not err.
Plaintiffs contend that BRC must prove that it suffered damages or
pecuniary loss to be entitled to attorney fees. But in support of their contention
they cite cases about breach of contract claims, which state that for a party to
succeed on a breach of contract claim they must establish damages. See, e.g.,
Baldwin v. Silver, 165 Wn. App. 463, 473, 269 P.3d 284 (2011). But BRC’s
request for attorney fees and costs is not a claim for breach of contract. Plaintiffs
cite no authority requiring proof of damage or pecuniary loss to be entitled to
attorney fees.
5. Reasonableness of attorney fees and costs
Plaintiffs say the trial court erred by awarding attorney fees and costs
because BRC failed to segregate its time,14 explain what time was spent doing
what tasks, or explain why its hours and hourly rates were reasonable. BRC
responds that plaintiffs challenge none of the court’s findings of fact or
conclusions of law in the fee judgment. It says that since the reasonableness of
14
Plaintiffs fail to explain which claims require segregation of time. See Bellevue
Pac. Ctr. Ltd. P’ship v. Bellevue Pac. Tower Condo. Owners Ass’n, 171 Wn. App. 499,
517, 287 P.3d 639 (2012) (“When ‘an attorney fees recovery is authorized for only some
of the claims, the attorney fees award must properly reflect a segregation of the time
spent on issues for which attorney fees are authorized from time spent on other issues.’”
(quoting Hume v. Am. Disposal Co., 124 Wn.2d 656, 672–73, 880 P.2d 988 (1994))).
23
No. 83333-2-I/24
fees is a factual question, and because unchallenged findings are verities on
appeal, plaintiffs’ challenge fails. We agree with BRC.
“The reasonableness of an attorney fee award is subject to review for
abuse of discretion.” 224 Westlake, LLC v. Engstrom Properties, LLC, 169 Wn.
App. 700, 734, 281 P.3d 693 (2012). “The party challenging the trial court[’]s
decision bears the burden of demonstrating that the award was clearly untenable
or manifestly unreasonable.” Bellevue Pac. Ctr. Ltd. P’ship v. Bellevue Pac.
Tower Condo. Owners Ass’n, 171 Wn. App. 499, 517, 287 P.3d 639 (2012).
“‘Whether attorneys fees are reasonable is a factual inquiry depending on the
circumstances of a given case.’” Id. (quoting Wash. State Physicians Ins. Exch.
& Ass’n v. Fisons Corp., 122 Wn.2d 299, 335, 858 P.2d 1054 (1993)).
In its fee judgment, the trial court made these findings:
12. The Court finds that the hourly rate billed by defense counsel
is reasonable in light of the experience of those defense attorneys,
the rates ordinarily billed for similar work in this jurisdiction, of which
the Court is familiar, and considering the complexity of the case,
which involved seven claims for relief relating to the construction of
10 homes. The Court also finds that the amount of hours billed was
reasonable due to the complexity of the case, the number of claims
and issues involved, and the length of the case. The Court further
finds that defense counsel was required to expend additional time on
the case due to plaintiffs’ counsel’s failure to respond to motions or
to appear before the court at the date and time noted for motions,
necessitating additional briefing and trips to the courthouse.
13. The Court also finds that the amount billed for expert fees is
reasonable in light of the complexity of the factual issues relating to
the construction of 10 different homes. Multiple experts were
required to inspect 10 different homes for different issues, and to
perform an analysis of the issues and generate reports regarding the
same. In light of all this, the amount billed is reasonable.
The court entered the judgment after plaintiffs appealed their case, but Division
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Two allowed them to file a supplemental brief addressing the judgment. Despite
that opportunity, plaintiffs did not assign error to these findings of fact and instead
stated that the judgment “appears to be compliant with the Civil Rules and Rules
of Appellate Procedure.”
Plaintiffs raise two separate issues; neither is convincing. First, they
contend that BRC failed to provide enough evidence to support the court’s award
of attorney fees and costs. But despite getting a chance to do so, they did not
challenge the court’s findings. Thus, the court’s findings that the attorney fees
and expert costs requested by BRC are reasonable are verities on appeal. See
State v. Escalante, 195 Wn.2d 526, 531, 461 P.3d 1183 (2020). The court thus
acted within its discretion in awarding the fees and costs to BRC.
Second, plaintiffs contend that we should remand this issue because we
have an insufficient record to review it. The cases plaintiffs cite in support of this
contention are distinguishable. In those cases, the record did not suffice to
explain why the trial court reduced the amount awarded or the record was
insufficient because the courts entered no findings of fact and conclusions of law.
See Taliesen Corp. v. Razore Land Co., 135 Wn. App. 106, 146–47, 144 P.3d
1185 (2006) (remanding for the trial court to explain the basis for the reduction in
the fee award); State Farm Mut. Auto. Ins. Co. v. Johnson, 72 Wn. App. 580,
595, 871 P.2d 1066 (1994) (remanding where the trial courts did not enter
findings of fact stating the basis of the award precluding appellate review);
Bentzen v. Demmons, 68 Wn. App. 339, 350, 842 P.2d 1015 (1993) (remanding
because the trial court entered no factual findings supporting its basis for
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No. 83333-2-I/26
awarding fees, thus precluding appellate review); Smith v. Dalton, 58 Wn. App.
876, 885, 795 P.2d 706 (1990) (remanding because the record did not show why
the trial court reduced the requested award); Rhinehart v. Seattle Times, 59 Wn.
App. 332, 342, 798 P.2d 1155 (1990) (remanding because the record lacked the
verbatim report of proceedings creating an insufficient record to review the trial
court’s reduction of the award). Neither of these issues is present here.
We affirm.
WE CONCUR:
26