Bncc, Inc. v. Access Electric Supply, Inc. ( 2013 )

IN THE COURT OF APPEALS FOR THE STATE OF WASHINGTON
ACCESS ELECTRIC SUPPLY, INC., No. 68738-7-1
a Washington corporation,
Respondent/Third Party DIVISION ONE
Defendant,
c.
BNCC, INC., a Washington corporation,
and KELLY ELECTRIC, INC. a
Washington corporation,
-J r= —"
Appellant/Third-Party
Plaintiff CO
cn
BNCC, INC., a Washington corporation, CO
Third-Party Plaintiff
UNPUBLISHED OPINION
SOUTH COUNTY BUILDERS, INC.,
d/b/a KELLY ELECTRIC, a Washington
corporation,
Third Party-Defendant.
FILED: June 17. 2013
Spearman, A.C.J. — BNCC, Inc. appeals summary judgment orders
denying its claim for attorney fees following its successful defense of the claims
alleged by Access Electric Supply, Inc. Because the trial court properly
determined that BNCC was not entitled to attorney fees as a matter of law, we
affirm. We also deny BNCC's request for fees on appeal.
No. 68738-7-1/2
FACTS
BNCC entered into a contract with the Issaquah School District to build a
school. BNCC entered a subcontract with Kelly Electric, Inc., to perform
electrical work at the school. The subcontract includes an addendum in which
the subcontractor, Kelly, agrees to indemnify the contractor, BNCC, against all
claims by third parties connected with work performed by sub-tier subcontractors
and suppliers. [CP 40] The indemnification addendum indicates that the
contractor may recover defense costs, including attorney fees, arising from such
claims.
Kelly ordered electrical equipment from Access Electric Supply, Inc., for
the school project. Access delivered $49,866 of equipment but did not receive
payment.
Access filed a suit against BNCC and Kelly, alleging unjust enrichment of
BNCC, and claiming entitlement to a constructive trust on the amounts paid to
BNCC by the school district. Access also claimed it was entitled to enforce the
subcontract between BNCC and Kelly as a third party beneficiary. Finally,
Access claimed damages for Kelly's breach of contract.1
BNCC filed an answer with affirmative defenses, cross claims, counter
claims, and a third party complaint against Kelly. BNCC filed a motion for
summary judgment dismissal of all Access's claims against BNCC, arguing that
Access had no privity of contract with BNCC and failed to provide preclaim notice
as required by RCW 39.08.065. At a hearing on BNCC's motion for summary
judgment, Access argued that the preclaim notice provisions applied only to
1Kelly is nota party to this appeal.
No. 68738-7-1/3
claims against a bond, not claims against the contractor. The trial court granted
BNCC's motion for summary judgment and dismissed Access's claims as barred
by RCW 39.08.065. [VRP 11/16/11 25]
BNCC then filed a motion for summary judgment on its counter claim
against Access for an award of attorney fees, costs, and interest under CR 11
and RCW 4.84.185 and the indemnification addendum to its subcontract with
Kelly. The trial court denied the motion. Access then filed a motion for summary
judgment dismissal of BNCC's claims for fees. The trial court granted the motion
and dismissed the case.
BNCC appeals.
DISCUSSION
We review summary judgments de novo. Michael v. Mosquera-Lacv. 165
Wn.2d 595, 601, 200 P.3d 695 (2009). '"Summary judgment is appropriate when
'there is no genuine issue as to any material fact and ... the moving party is
entitled to a judgment as a matter of law.'" Id. (quoting Locke v. City of Seattle.
162 Wn.2d 474, 483, 172 P.3d 705 (2007))and CR 56(c).
Under CR 11, the trial court may impose sanctions, including attorney fees,
if an attorney, without reasonable inquiry, brings a claim that is not "well
grounded in fact and ... warranted by existing law or a good faith argument for
the extension, modification, or reversal of existing law or the establishment of
new law, . .." Under RCW 4.84.185, the trial court may award attorney fees to
the prevailing party "upon written findings by the judge that the action... was
frivolous and advanced without reasonable cause." Appellate courts review a
No. 68738-7-1/4
trial court's denial of fees under RCW 4.84.185 and sanctions under CR 11 for an
abuse of discretion. Fluke Capital & Mat. Serv. Co. v. Richmond. 106 Wn.2d 614,
625, 724 P.2d 356 (1986); Biggs v. Vail. 119 Wn.2d 129, 137, 830 P.2d 350(1992); Washington State Physicians Ins. Exch. & Ass'n v. Fisons Corp.. 122
Wn.2d 299, 338, 858 P.2d 1054 (1993).
Despite acknowledging the discretion generally exercised by the trial court
in determining the basis for fees under RCW 4.84.185 and sanctions under CR
11, BNCC contends that it was entitled to summary judgment on its claim for fees
and sanctions here as a matter of law. In the alternative, BNCC claims that the
trial court failed to appropriately analyze the legal basis for an award of fees and
sanctions.
The trial court did not enter written findings that Access's claims against
BNCC were frivolous or not well grounded in fact, not warranted by law, and filed
without reasonable inquiry. In the absence of such findings, BNCC was not
entitled to an award of fees as a matter of law and the trial court properly denied
BNCC's motion for summary judgment. And the trial court is "not required to
enter negative findings or findings that a certain fact has not been established."
Gen. Indus., Inc.. v. Eriksson. 2 Wn. App. 228, 229, 467 P.2d 321 (1970)
(quoting Miller v. Geranios. 54 Wn.2d 917, 338 P.2d 763 (1959)). In opposing
Access's motion for summary judgment on BNCC's claims for fees and sanctions,
BNCC agreed that the parties did not dispute the facts and argued only that it
was entitled to fees as a matter of law. Given the lack of a written finding that
Access's suit was frivolous and the lack of findings as to a violation of CR 11, the
No. 68738-7-1/5
trial court properly granted Access's motion for summary judgment dismissal of
BNCC's claims for fees under RCW 4.84.185 and sanctions under CR 11.
BNCC also contends that the trial court erred by denying an award of fees
based on the indemnification agreement in BNCC's subcontract with Kelly and
RCW 4.84.330. Relying on Herzog Aluminum. Inc. v. General American Window
Corp.. 39 Wn. App. 188, 692 P.2d 867 (1984) (purchase order with unilateral
attorney fee provision) and Deep Water Brewing. LLC v. Fairway Resources Ltd..
152 Wn. App. 229, 215 P.3d 990 (2009) (easement and right-of-way agreements
with expansive attorney fee and costs provisions), BNCC argues that Access
would have been entitled to contractual attorney fees as a third party beneficiary
to the subcontract had it prevailed against BNCC and RCW 4.84.330 requires
reciprocal application of such a fee award. Neither of the cases BNCC cites
involved an indemnification agreement and BNCC provides no relevant authority
or cogent argument to support such a result.
The indemnification addendum is limited on its face to Kelly's agreement
to pay BNCC's fees and costs spent defending against third party claims, such
as Access's lawsuit. The addendum does not provide terms granting BNCC a
right to fees for enforcing its right to indemnification. In the absence of express
terms providing for such fees, "an indemnitee may not recover legal fees incurred
in establishing his right to indemnification." Jones v. Strom Constr. Co.. 84
Wn.2d 518, 523, 527 P.2d 1115 (1974).
RCW 4.84.330 applies where a contract specifically provides that one of
the parties shall be awarded attorney fees that "are incurred to enforce the
No. 68738-7-1/6
provisions of such contract " RCW 4.84.330. In such cases, the statute
imposes reciprocal treatment ifthe other party prevails. Because the addendum
does not provide for an award of fees for enforcing its provisions, RCW 4.84.330
does not apply. The trial court properly dismissed BNCC's claim for attorney
fees on the basis of the indemnification addendum.
BNCC requests attorney fees on appeal under RAP 18.1 and the
indemnification addendum. Because the addendum does not provide for such an
award, BNCC is not entitled to attorney fees on appeal.
Affirmed.
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WE CONCUR:
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