Kilo 6 Owners Association v. Everett Hangar, Llc ( 2019 )

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
EVERETT HANGAR, LLC, a )
Washington limited liability company, ) No. 76949-9-1
)
Respondent, ) DIVISION ONE
)
v. )
)
KILO 6 OWNERS ASSOCIATION, ) UNPUBLISHED OPINION
a Washington nonprofit corporation; )
9li :6 WI 83 liVr 6101
KILO SIX, LLC, a Washington limited )
liability company; HISTORIC )
HANGARS, LLC, a Washington )
limited liability company; HISTORIC )
FLIGHT FOUNDATION, a Washington )
nonprofit corporation; and JOHN )
SESSIONS, an individual, )
) FILED: January 28, 2019
Appellants. )
)
LEAcH, J. — Kilo 6 Owners Association, Kilo Six LLC, Historic Hangars LLC,
Historic Flight Foundation, and John Sessions (Kilo 6) appeal the trial court's attorney
fees award to Everett Hangar LLC. Kilo 6 claims that Everett Hangar was not the
prevailing party below. Alternatively, Kilo 6 asserts that the attorney fees award is
unreasonable.
First, in Kilo 6's previous appeal related to this case, this court held that the trial
court properly awarded Everett Hangar attorney fees. That Everett Hangar is the
prevailing party became the law of the case, and we decline to reconsider our decision.
No. 76949-9-1/ 2
Second, substantial evidence supports the trial court's findings of fact which, in turn,
support its conclusions of law and its $863,669.57 attorney fees award to Everett
Hangar. We affirm.
BACKGROUND
This lawsuit involves neighboring lots 11, 12, and 13 at the Snohomish County
Airport (Paine Field). The lessees of lots 11 and 12 own the hangars constructed on
them. No hanger has been built on Lot 13. Historic Hangars and Kilo Six, entities
owned by John Sessions, lease lots 11 and 13, respectively. Everett Hangar leases lot
12. The Historic Flight Foundation (Foundation), also owned by John Sessions,
subleases lot 11 from Historic Hangars. To facilitate separate ownership and operation
of the three lots, Snohomish County agreed to execute covenants, conditions, and
restrictions (the CC&Rs). Sessions is the president of the Kilo 6 Owners Association
(the Association), which is created by the CC&Rs and enforces them.
Everett Hangar sued Kilo 6, claiming violations of the easement provision and
safety and security provision of the CC&Rs Everett Hangar sought injunctive relief to
protect its easement rights to the taxiway providing access from its hangar to the airport
runway and to address safety concerns arising from activities on lots 11 and 13. After a
bench trial, the trial court granted Everett Hangar an injunction, finding that Kilo 6
violated the CC&Rs based on both grounds that Everett Hangar raised. The trial court
awarded Everett Hangar $819,053.57 in attorney fees.
Kilo 6 appealed the trial court's injunction. In an unpublished opinion, this court
reversed a portion of the trial court's injunctive relief and remanded to the trial court to
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enter additional findings of fact about its attorney fees award.1 Kilo 6 filed a motion for
reconsideration, claiming that Everett Hangar should not receive any attorney fees. It
also asserted that the Association, Kilo Six, and Sessions should receive their attorney
fees because they prevailed on all claims asserted against them. This court denied Kilo
6's motion Kilo 6 filed a petition for review to our Supreme Court specifically seeking
review of our fee decision. Our Supreme Court denied review.2
On remand, the trial court entered an amended permanent injunction and
supplemental findings of fact and conclusions of law. It awarded $863,669.57 in
attorney fees to Everett Hangar. Kilo 6 appeals this award.
STANDARD OF REVIEW
An appellate court performs a two-part inquiry when reviewing attorney fees
awards.3 First, the court reviews de novo whether the prevailing party was entitled to
attorney fees.4 Second, the court uses an abuse of discretion standard to review the
reasonableness of the amount of fees awarded.5 "A trial judge is given broad discretion
in determining the reasonableness of an award, and in order to reverse that award, it
must be shown that the trial court manifestly abused its discretion."6 This court will
1Everett Hangar, LLC v. Kilo 6 Owners Ass'n No. 73504-7-1, slip op. at 29-31
(Wash. Ct. App. Aug. 8, 2016)(unpublished),
http://www.courts.wa gov/opinions/pdf/735047.pdf.
2 Everett Hangar, LLC v. Kilo 6 Owners Ass'n 187 Wash. 2d 1007, 386 P.3d 1091
(2017).
3 Ethridge v. Hwang 105 Wash. App. 447, 459, 20 P.3d 958 (2001).
4 Ethridge, 105 Wash. App. at 459-60.
5 Ethridge, 105 Wash. App. at 459-60.
6 Ethridge 105 Wash. App. at 460.
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reverse an attorney fees award only where the trial court exercised its discretion based
on untenable grounds or reasons!
ANALYSIS
Everett Hangar Was the Prevailing Party and Was Entitled to Attorney Fees
First, Kilo 6 contends that in its previous appeal, this court did not hold that
Everett Hangar was the substantially prevailing party and establish the law of the case
that the trial court was required to follow. We disagree.
The law of the case doctrine "ordinarily precludes redeciding the same legal
issues in a subsequent appeal" of the same claim.8 A reviewing court will not consider
the same legal issues if there is "no substantial change in the evidence at a second
determination of the cause."9 But a court should reconsider an identical legal issue if
the prior appeal is clearly erroneous and application of the law of the case doctrine
would result in manifest injustice.10
In Kilo 6's first appeal, it challenged the trial court's fee award based on three
grounds: (1) neither party should have been awarded fees because neither party
prevailed, (2) the trial court did not use the proportionality rule to calculate fees, and (3)
the trial court's award was unreasonable." This court explained in its unpublished
opinion, "Everett Hangar brought claims I through IV of its complaint under the CC&Rs
7Fiore v PPG Indus., Inc., 169 Wash. App. 325, 351, 279 P.3d 972(2012).
8 Folsom v. County of Spokane, 111 Wash. 2d 256, 263, 759 P.2d 1196 (1988).
9 Folsom 111 Wn.2d at 263(quoting Adamson v. Traylor, 66 Wash. 2d 338, 339,
402 P.2d 499(1965)).
1° Folsom, 111 Wash. 2d at 264.
11 Everett Hangar, No. 73504-7-1, slip op. at 9.
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or the Association bylaws. The CC&R fee provision applies only to these claims. Here,
the trial court awarded Everett Hangar relief on each of these claims and thus properly
awarded Everett Hangar attorney fees."12 In Kilo 6's unsuccessful motion for
reconsideration, it claimed that this court erred in affirming the trial court's attorney fees
award and remanding only for entry of additional findings of fact about the award. It
asserted that because this court reversed a portion of the trial court's injunctive relief,
the Association, Kilo Six, and Sessions prevailed on appeal and were entitled to
attorney fees, while Historic Hangars, the Foundation, and Everett Hangar were not
prevailing parties, so they were not entitled to fees.
On remand, Kilo 6 again challenged the trial court's attorney fees award based
on their claim that Everett Hangar was not the prevailing party. The trial court rejected
this claim, holding that the prevailing party issue had already been decided: "On
remand, [Kilo 6] attempt[s] to re-argue their position that Plaintiff is not a prevailing
party. This argument was previously rejected by this court, and that decision was
upheld by the Court of Appeals. Accordingly the court will not reconsider the argument
here."
Kilo 6 relies on Deep Water Brewing, LLC v Fairway Resources, Ltd.,13 to
support that when an appellate court has remanded an award of attorney fees for entry
of findings and conclusions to support the award, the trial court retains discretion in
awarding, denying, and calculating attorney fees. But, there, Division Three of this court
12 Everett Hangar, No. 73504-7-1, slip op. at 28.
13 170 Wash. App. 1, 7-10, 282 P.3d 146 (2012).
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stated only that on remand for entry of findings and conclusions to support an attorney
fees award, the trial court retains the discretion to determine the amount of attorney
fees.
In light of the fact that trial courts have discretion to set the amount
of attorney fees, we conclude from Fisher [Properties, Inc v Arden-
Mayfair, Inc. 115 Wash. 2d 364, 798 P.2d 799 (1990)] and its progeny that
the trial courts retain that discretion on remand unless expressly limited by
the appellate courts or the exercise of discretion would be inconsistent
with the ruling on appeal.E141
Division Three did not hold that the trial court had discretion to reconsider the
prevailing party's legal right to recover fees. Here, consistent with Deep Water Brewing,
the trial court had discretion to change the amount of its original attorney fees award on
remand. We conclude that the trial court did not err in applying the law of the case that
Everett Hangar is the prevailing party.
Alternatively, Kilo 6 claims that this court's earlier opinion is clearly erroneous
because it conflicts with four cases. We disagree.
First, Kilo 6 relies on Cornish College of the Arts v. 1000 Virginia Ltd
Partnership15 to establish that in multiparty litigation, a court must determine who is a
prevailing party on a party-by-party basis. "[A] prevailing party is one who receives an
affirmative judgment in its favor."16 In Cornish College, Cornish sued two defendants for
specific performance of an option to purchase a building it leased and damages for
wrongful eviction.17 It brought ownership and occupancy claims against both
14 Deep Water Brewing, 170 Wn. App. at 8(footnote omitted).
15 158 Wn App. 203, 242 P.3d 1(2010).
16 Cornish Coll , 158 Wn. App. at 231.
17 Cornish Coll , 158 Wn. App. at 210-15
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defendants and they made three counterclaims.18 Cornish prevailed on all of its claims
except its ownership claim against one of the defendants and successfully defended
against the defendants' counterclaims.18 Based on the attorney fees provision in the
parties' agreement, the trial court awarded it attorney fees.2°
On appeal, this court applied the proportionality approach to attorney fees.21
This approach requires that a court award each party fees for the claims on which it
succeeds or offsets fees for the claims that a party successfully defends against.22 This
court explained that a court applies the proportionality approach in a case like Cornish
College involving a contract dispute where "several distinct and severable claims" are
at issue." It awarded Cornish fees incurred for its successful ownership and occupancy
claims against one of the defendants and for successfully defending against the
defendants' counterclaims.24 It also awarded the other defendant its fees for
successfully defending against Cornish's ownership claim.28
Here, Kilo 6 asserts that Cornish College required that the trial court engage in a
party-by-party analysis. On remand after appeal, the trial court issued an amended
permanent injunction enjoining only Historic Hangars and the Foundation from specific
activities. Kilo 6 maintains that because the Association, Kilo Six, and Sessions
15Cornish Coll. 158 Wash. App. at 214, 232.
15Cornish Coll 158 Wash. App. at 233-34.
20 Cornish Coll. 158 Wash. App. at 212-15.
21 Cornish Coll., 158 Wash. App. at 230-31.
22 Cornish Coll. 158 Wn App. at 232.
23 Cornish Coll. 158 Wash. App. at 232 (quoting Marassi v. Lau, 71 Wash. App. 912,
917, 859 P.2d 605 (1993)).
24 Cornish Coll , 158 Wn. App. at 233-34.
25 Cornish Coll., 158 Wash. App. at 233-34.
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prevailed on all claims, these defendants are the prevailing parties as a matter of law.
"However, where 'the plaintiffs claims for relief . .. involve a common core of facts or
[are] based on related legal theories,' a lawsuit cannot be 'viewed as a series of discrete
claims' and, thus, the claims should not be segregated in determining an award of
fees."26 A trial court need not segregate attorney fees if it determines that "the claims
are so related that no reasonable segregation can be made."27
Although this court reversed select injunctive provisions so that the remaining
three defendants were not subject to the injunction, the proportionality approach is not
appropriate because the claims are not severable; Everett Hangar based its claims for
injunctive relief on a common core of facts and the same legal theory related to
violations of the easement and safety and security provisions of the CC&Rs arising from
activities on lots 11 and 13. This court's previous decision does not conflict with
Cornish College.
Next, Kilo 6 contends that this court's decision conflicts with McGary v. Westlake
Investors28 and Seashore Villa Ass'n v. Huqqland Family Ltd. Partnership.29 Kilo 6 cites
these cases for the proposition that when both parties prevail on major issues after
appeal, neither substantially prevails nor is entitled to attorney fees. It claims that, here,
Historic Hangars and the Foundation prevailed on "most issues," including claims for
26Fiore 169 Wash. App. at 352 (alteration in original)(internal quotation marks
omitted)(quoting Brand v Dept of Labor & Indus., 139 Wn.2d 659,672-73, 989 P.2d
1111 (1999)).
27 Ewing v. Gloqowski, 198 Wash. App. 515, 523, 394 P.3d 418 (2017).
28 99 Wash. 2d 280, 288, 661 P.2d 971 (1983).
29 163 Wash. App. 531, 534, 547, 260 P.3d 906 (2011).
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damages and a portion of Everett Hangar's requested injunctive relief. It contends that
consistent with McGary and Seashore Villa because Historic Hangars, the Foundation,
and Everett Hangar each prevailed on major issues, they must bear their own fees. But
Everett Hangar withdrew its claim for money damages, which the trial court then
dismissed. Kilo 6 did not successfully defend against those claims. And although this
court reversed a portion of the injunctive relief the trial court granted, Everett Hangar
received some of the injunctive relief that it requested. Because the claims are not
severable, Everett Hangar remains the prevailing party. This court's previous opinion
does not conflict with either McGary or Seashore Villa.
Last, Kilo 6 relies on Singleton v Frost3° to support the proposition that in an
action involving a contract with a prevailing party fee provision, a court must award
attorney fees to a party who prevails. As discussed above, the various claims are not
distinct and severable, and Everett Hangar received some of its requested injunctive
relief. It thus remained the substantially prevailing party and, consistent with Singleton
is entitled to attorney fees.
We conclude that this court's previous opinion is not clearly erroneous
The Trial Court's Attorney Fees Award Is Reasonable
Kilo 6 next claims that the trial court's attorney fees award is unreasonable
because the trial court did not apply the proportionality approach and did not exclude
time spent on unsuccessful claims, duplicated effort, and unproductive time. We
disagree.
30 108 Wash. 2d 723, 729, 742 P.2d 1224(1987).
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In awarding attorney fees, the trial court must discount the hours an attorney has
recorded for work in a case for hours spent on "unsuccessful claims, duplicated effort,
or otherwise unproductive time.'"31 The trial court must consider the relevant facts and
provide reasons for the award sufficient for review, but "a detailed analysis of each
expense claimed is not required."32 It need not "deduct hours here and there just to
prove to the appellate court that it has taken an active role in assessing the
reasonableness of a fee request."33 "[I]t is the trial judge who watches a case unfold
and who is in the best position to determine the proper lodestar amount.'"34
First, Kilo 6 claims that the trial court abused its discretion by not applying the
proportionality approach because each of the five defendants successfully defended
against some, or all, of Everett Hangar's claims. But, as discussed above, the
proportionality approach applies when the claims at issue are distinct and severable,
which is not the case here. And whether the proportionality approach applies relates to
which parties prevailed, not to the reasonableness of the fee award that Kilo 6
challenges.
Second, Kilo 6 claims that the trial court erred in not excluding from its attorney
fees calculation the time that Everett Hangar's counsel spent on unsuccessful claims,
duplicated effort, and unproductive time Kilo 6 objects to a number of Everett Hangar's
31 Miller v. Kenny, 180 Wash. App. 772, 823, 325 P.3d 278 (2014)(quoting Bowers
v. Transamerica Title Ins. Co., 100 Wash. 2d 581, 597, 675 P.2d 193 (1983)).
32 Steele v. Lundgren 96 Wash. App. 773, 786, 982 P.2d 619 (1999).
33 Miller, 180 Wash. App. at 823.
34 Fiore 169 Wash. App. at 351 (alteration in original)(quoting Morgan v. Kingen,
141 Wash. App. 143, 163, 169 P.3d 487 (2007)).
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requested fees, including 71.8 hours spent drafting the complaint, hours spent on
unsuccessful claims, hours spent communicating with individuals who were neither
parties nor witnesses, time spent researching and preparing motions that were never
filed, and hours spent on administrative tasks.
Consistent with Everett Hangar's argument, the record shows that the trial court
considered Kilo 6's challenges to Everett Hangar's requested fees, including its claims
of duplicative or unproductive time. The trial court stated in its detailed 10-page findings
of fact and conclusions of law that it "closely analyzed the invoices and accompanying
spreadsheet submitted by counsel for Everett Hangar for fees incurred through and
after trial, determining whether the entries were too general or related to time spent on
issues not relevant to this case." The trial court also stated that Everett Hangar's
counsel properly excluded time dedicated to Everett Hangar's unsuccessful fiduciary
duty claim from its attorney fees calculation. It awarded $30,000 less than Everett
Hangar's counsel requested for their posttrial work and explained that both the number
of hours Everett Hangar's counsel spent on trial work and counsel's rates were
reasonable. In dismissing Kilo 6's objections to Everett Hangar's fees calculations, the
trial court concluded that Everett Hangar requested a fair approximation of those hours
its counsel reasonably expended on its successful claims and avoided duplicated effort
in its staffing. Substantial evidence supports the trial court's thorough findings and
conclusions.
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Attorney Fees on Appeal
Both Everett Hangar and Kilo 6 request attorney fees on appeal under the
CC&Rs and RAP 18 1. RAP 18.1 allows a reviewing court to award a party reasonable
attorney fees if applicable law grants a party the right to recover them. Here, the
CC&Rs state, "In any action to enforce the provisions of this Declaration or Association
rules, the prevailing party shall be entitled to recover all costs, including, without
limitation, reasonable attorneys' fees and court costs, reasonably incurred in such
action." Because the injunction arose from violations of the CC&Rs, we award Everett
Hanger attorney fees on appeal as the substantially prevailing party, subject to its
compliance with RAP 18.1(d).
CONCLUSION
It is the law of the case that Everett Hangar is the prevailing party below. And
substantial evidence supports the trial court's attorney fees award of $863,669.57. We
affirm.
,date4i
WE CONCUR:
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