### FILED MARCH 13,2014 In theOffice oftheClerkofCourt W AStateCourtofAppeals,Division III

IN THE COURT OFAPPEALS OFTHE STATE OFWASHINGTON DIVISION THREE WILLIAM HOUKand JANICE HOUK, 

### ) husband and wife, 

### ) ) Respondents, 

### ) ) v. 

### ) ) BEST DEVELOPMENT

### & ) CONSTRUCTION COMPANY, INC., a ) Washington Corporation, DAVEWINLOW ) dba SUNDANCE EXCAVATING, BURT ) SHAHAN, an individual, LANCE ) POUNDER EXCAVATION, INC., a ) Washington Corporation, JOHN AKINS ) MASONRY, INC., a Washington ) Corporation, R.K. STARK ) CONSTRUCTION CO., CHARLES ) MAYFIELD, an individual dba CM ) SIDING, TIM VIGIL, an individual dba T J ) VIGIL CONSTRUCTION, APOLLO ) ELECTRIC, INC., a Washington ) Corporation, GALE INSULATION, ) WALKER ROOFING, LLC, a Washington ) Limited Liability Company, REED ) CONCRETE COMPANY, INC., a ) Washington Corporation, STI ) NORTHWEST, INC., a Washington ) Corporation, ) Defendants. 

### ) ) NICHOLS & SHAHAN DEVELOPMENT, 

### ) LLC, a Washington Limited Liability 

### ) No. 31163-5-111

PUBLISHED OPINIONNo. 31163-5-111



# I 1 Houk v. BestDev. & 

### Constr. 

### Co., Inc. Company, and JOSEPH NICHOLS, an ) individual, ) 

### I Petitioners. ) BROWN, J.-On discretionary review, real estate developers Nichols & Shahan 

# I Development, LLC (a dissolved limited liability company) and Joseph K. Nichols 

# I (collectively NSD) ask us to overturn the trial court's denial of its summaryjudgment motion against home purchasers and plaintiffs William and Janice Houk. NSD contends 

# I the trial court erred in not concluding the limitation provisions of RCW 25.15.303 added 

## ! i in 2010 are prospective and require a plaintiffto sue within three years aftera certificate ofdissolution is filed. We agree with NSD. Applying this lawto the undisputed material facts, we reverse and grant summaryjudgmentto NSD. FACTS In 2004, the Houks moved into a newly constructed home in NSD's development. The Houks soon began noticing multiple defects in their home, some serious. On October2, 2006, Washington's secretary ofstate dissolved NSD as an LLC. On December 16, 2010, the Houks sued NSD for damages, alleging breach ofcontract, breach of implied warranties, and breach ofexpress warranties, negligence, and violation ofWashington's Consumer Protection Act, chapter 19.86 RCW. NSD requested summaryjudgmentdismissal, arguing the Houks' complaint was time barred because it wasfiled more than three years after NSD dissolved. The trial court disagreed, concluding the recently amended RCW 25.15.303 required an LLC to file a certificate ofdissolution and since NSD did notfile the certificate, itwas still subjectto litigation. This court granted NSD's request for discretionary review.



### 2No. 31163-5-111 

### Houk v. Best Oev. & 

### Constr. Co., Inc. ANALYSIS The issue is whetherthe trial court erred by denying NSD's requestfor summary judgment dismissal after it concluded the limitation provisions of RCW 25.15.303 as amended in 2010 apply retroactively. We review the denial ofa summaryjudgment motion de novo and perform the

same inquiry as the trial court. 

### Macias v. Saberhagen Holdings, Inc., 175Wn.2d 402, 407-08,282 P.3d 1069 (2012). A party moving for summaryjudgment bears the burden ofdemonstrating there is no genuine issue of material fact and thatthe moving party is entitled tojudgment as a matterof law. CR 56(c); 

### Atherton Condo. Apartment Owners Ass'n Bd. ofOir. v. Blume Dev. Co., 115Wn.2d 506, 516, 799 P.2d 250 (1990). Likewise, the interpretation ofa statutory amendment is a question of lawthatwe review de novo. 

### Oep'tofEcology v. Campbell & 

### Gwinn, LLC, 146Wn.2d 1,9,43 P.3d 4 (2002). We presume statutory amendments are prospective unless there is a legislative intentto applythe statute retroactively orthe amendment is clearly curative or remedial. 

### Johnson v. Cont'l

# w., Inc., 99 Wn.2d 555,559,663 P.2d 482 (1983). RCW25.15.303 first became effective in 2006. The statute stated, "The dissolution ofa limited liability company does nottake away or impair any remedy available against that limited liability company, its managers, or its members for any right or claim existing, or any liability incurred at anytime, whether priorto or after dissolution, unless an action or other proceeding thereon is not commenced within three years afterthe filing ofthe effective date ofdissolution." RCW 25.15.303 (2006).



### 3No. 31163-5-111 

### Houk v. BestDev. & 

### Constr. Co., Inc. In 2009, our Supreme Court decided 

### ChadwickFarms OwnersAss'n v. FHC LLC, 166 Wn.2d 178,207 P.3d 1251 (2009). One issue in 

### Chadwickwas when does the limitations period startwhen distinguishing between an administratively-dissolved LLC (secretary ofstate cancels LLC for noncompliance) and nonadministrativelydissolved LLC (LLC dissolves itself). The court held, "Ifa limited liability company is dissolved upon events specified in the company agreement orthe consent ofthe members

... the company and its managers and members control the timing of dissolution.

. .. Butwhen the secretary ofstate administratively dissolves a limited liability companyforfailure to pay fees orfile reports (as here), cancellation ofthe certificate offormation automatically occurs two years later ifthe'company does not seek reinstatement." 

### Id. at 190. "In either case, the critical event isthe cancellation of the certificate offormation." 

### Id. at 191. Once an LLC is cancelled, "it no longer exists

...for**a~y** purpose." 

### Id. at 194. The 

### Chadwickcourt referred to RCW 25.15.303 as a "statute of limitations" and reasoned it "meansthat an action against a limited liability company, whether arising before or afterdissolution, must be broughtwithin three years ofdissolution." 

### Chadwick, 166Wn.2d at 195. In 2010, our legislature amended RCW 25.15.303 to read, "The dissolution ofa limited liability company does not take away or impairany remedy available to or against that limited liability company, its managers, or its membersfor any right orclaim existing, or any liability incurred at any time, whether priorto or after dissolution, 

### unless the limitedliabilitycompany has fileda 

### certificate ofdissolution." (Emphasis added.)



### 4No. 31163-5-111 

### Houk v. BestDev. & 

### Constr. Co., Inc. Underthe 2006 version of RCW 25.15.303, no requirement existed for a dissolved LLC to file documentation with the secretary of state before the statute of limitationswas triggered. The limitations period beganto run on the LLC's "effective date ofdissolution." RCW25.15.303 (2006). It is undisputed this version of RCW 25.15.303 was in effect on the datethat NSDwas administratively dissolved, during the three year limitations period triggered by NSD's dissolution, and for an additional period ofeight monthsthereafter. Under RCW25.15.303 (2006), the Houks were required to

commence their lawsuit against NSD no laterthan October2,2009, which is three years from the datethat NSD was administratively dissolved. The Houks, however, filed suit on December 16, 2.010. Thus, under RCW25.15.303 (2006) their complaint

was untimely. Ifthe amended version of RCW25.15.303 applied retroactively then the Houks' lawsuitwould betimely. As discussed above, we presume statutory amendments are prospective unless there is a legislative intent to applythe statute retroactively orthe amendment is clearly curative or remedial. 

### Johnson, 99 Wn.2d at 559. In the absence ofa cleardeclaration bythe legislature regarding retroactivity, as here, it is "helpful to characterize changes to a statute as ... 'curative' or 'remedial' to assist in determining legislative intent." 

### Hale v. Wellpinit SchoolDist. No. 49, 165Wn.2d 494,508, 198 P.3d 1021 (2009). An amendment is curative and retroactive if it clarifies ortechnically corrects an ambiguous statute. 

### State v. Jones, 110Wn.2d 74, 82, 750 P.2d 620 (1988). The amendment must be "clearly curative" for itto be retroactively applied. 

### Howell v. 

### 5No. 31163-5-111 

### Houk v. BestDev. & 

### Constr. Co., Inc. Spokane 

### & InlandEmpire BloodBank, 114Wn.2d 42,47,785 P.2d 815 (1990). But "[w]here ambiguity is lacking in statutory language, this court presumes an amendment to the statute constitutes a substantive change in the law, and the amendment presumptively is not retroactively applied." 

### In re F.D. Processing, Inc., 119Wn.2d 452, 462,832 P.2d 1303 (1992). Thus, ambiguity in the statutory language is a condition precedent to finding that an amendmentwas "curative." Relating'to RCW25.15.303 (2006), the 

### Chadwickcourt stated, "The plain language in RCW25.15.303 and the other provisions in theAct resolve the statute's meaning. Because we find no ambiguity, we have no reason to consider legislative history." 165Wn.2d at 195. One cannot cure anambiguitywhere none exists. Because ourSupreme Court determined thatthe 2006 version of RCW 25.15.303 was unambiguous, the 2010 amendmentsto that statute (particularly those adding a new filing requirement) cannot be interpreted as curative. Similarly, the strong presumption against retroactivity may be overcome where a statute is "remedial." 

### In re F.D. Processing, Inc., 119Wn.2d at462-63. '''An amendment is deemed remedial and applied retroactively when it relates to practice, procedure or remedies, and does notaffect a substantive orvested right.'" 

### Id. (quoting 

### In re Mota, 114Wn.2d 465, 471, 788 P.2d 538 (1990)). "A 'right' is a legal consequence deriving from certain facts, while a remedy is a procedure prescribed.by lawto enforce a right." 

### Dep'tof

### Ret. 

### Sys. v. Kralman, 73 Wn. App. 25, 33, 867 P.2d 643 (1994) (citing 

### Hammack v. Monroe St. LumberCo., 54 Wn.2d 224, 231,339 P.2d 684 (1959)). "A statute which provides a claimantwith the right to proceed against persons 

### 6

### No. 31163-5-111 Houk v. BestDev. 

### & Constr. Co., Inc. 

### previously outside the scope ofthe statute deals with a substantive right, and therefore applies prospectively only." Kralman, 

### 73 Wn. App. at 33. Here, the Houks' claims against NSD were time barred by RCW25.15.303 (2006) beginning on October2, 2009. From that date forward, the Houks no longer had

a legal right to proceed with their claims against NSD and NSD had a legal right to assertthe statute oflimitations as acomplete defense. The 2010 amendments to RCW 25.15.303 created a new substantive remedy that is outside the scope oftheformer statute thatwould, if retroactively applied. deny NSD the right to assert the statute of limitations as a complete defense. Accordingly, the 2010 amendments are not remedial. Because the Houks have failed to show legislative intent to apply RCW 25.15.303 retroactively orthat the amendments are clearly curative or remedial, we follow the presumption that the statute is prospective. Thus, the trial court erred in concluding differently. Therefore, the Houks' claims are time barred. Accordingly, we

reverse the trial court and grant summary dismissal ofthe Houks' suit. We note the Houks askfor affirmative relief in their response brief, asking us to allowthem to amend their complaint to add additional causes ofaction. The Houks, as respondents, may not request affirmative reliefwithout proper notice. See 

### RAP 5.1 (d) (requiring the filing ofa notice ofcross-review to request affirmative relief). Moreover, the additional causes ofaction alleged against NSD and Mr. Nichol are issues raised for the firsttime on appeal. Under RAP 9.12, arguments not brought to the attention ofthe trial court atthe time ofsummaryjudgment may not be considered by the appellate



### 7

### No. 31163-5-111 Houk v. BestDev. 

### &Constr. Co., Inc. 

### court. Accordingly, these issues are not properly before us. Nevertheless, based on the reasoning above, further claims against NSD would be time barred. RCW 25.15.303. Finally, relying on RCW4.84.330, NSD requests attorney fees on appeal. RCW 4.84.330 states that a contract containing an attorney fees provision entitles the prevailing party in an enforcement action to recover reasonable attorney fees and costs. The parties' 2004 real estate contract lists Mr. Nichols1 

### as the seller and the Houks as the purchaser. Their contract states, "If Buyer, Seller, or any real estate licensee or broker involved in this transaction is involved in any dispute relating to any aspect ofthis transaction orthis Agreement, each prevailing party shall recover their reasonable attorneys' fees. This provision shall survive Closing." Clerk's Papers at 157. Where a contract provides for an award of reasonable attorney fees to the prevailing party, such an award "shall" be made. RCW 4.84.330. Here, the parties' contract contains an attorney fee provision and several oftheir claims are based on the contract, including violation of implied warranties. See Burbo v. Harley

### C. Douglass, Inc., 

### 125Wn. App. 684,701-02, 106 P.3d 258 (2005) ("the implied warranty of habitability is an implied-in-Iawterm ofthe contract for sale for the purposes ofattorney fees.") NSD prevails here. Thus, we grant attorney fees request. Reversed.

1 

### The Houks attempt to distinguish Mr. Nichols from NSD in their argument that fees are unwarranted, arguing Mr. Nichols was not acting on his own behalf but on behalf of NSD; thus, he cannot receive fees. However, both parties are combined for purposes ofthis appeal and for purposes of representation by their attorney. 

### 8

### No. 31163-5-111 Houk v. BestDev. & 

### Constr. Co., Inc.

WE CONCUR: 

# /b:, co:

Korsmo, C.J. Brown, 

### J.

9 

# I 

# I I ! t I