### FILED **JANUARY 30,**  **2018 In**  **the Office**  **of the**  **Clerk of** **Court WA**  **State Court**  **of Appeals,**  **Division III** 



### IN **THE COURT**  **OF APPEALS**  **OF THE**  **STATE OF**  **WASHINGTON**

**DIVISION THREE**  **SUZANNE G.**  **KUNDA, )**  **)** 

### Appellant, **)**

**) V.**  **)** 

### ) 

### MICKEY **D. SHAUL**  **and MICHELLE**  **R. )**  **SHAUL, husband**  **and wife**  **and the**  **marital )**  **community comprised**  **thereof; MICK**  **) SHAUL**  **CONSTRUCT ION,**  **a sole**  **) proprietorship;**  **AMERICAN )**  **CONTRACTORS INDEMNITY**  **) COMPANY,**  **Bond No.**  **100124722, a**  **) California**  **corporation, )**  **)** 

### Respondent. **) No.**  **34920-9-111**

**UNPUBLISHED OPINION** 

**KORSMO, J.**  **-A bonding**  **company successfully**  **convinced the**  **trial court** **that it**  **had no**  **obligation to** **pay on**  **a contractor's**  **bond because the** **jury verdict form**  **did not**  **mention the**  **company when**  **it returned**  **a verdict against**  **the contractor.**  **We reverse.**  **FACTS Some**  **unusual procedural twists** **and turns**  **have created** **a unique** **problem that**  **largely renders**  **the underlying**  **factual circumstances**  **of this**  **case irrelevant** **to our** **No. 34920-9-111** 

**Kunda v.**  **Shaul, et**  **ux, et** **al**
**decision. 1**  **Suzanne Kunda**  **sued Mick**  **Shaul Construction,**  **a sole**  **proprietorship, and**  **American Contractors**  **Indemnity Company**  **(ACIC) over**  **a home**  **remodeling project.**  **ACIC had**  **issued Shaul's**  **contractor's bond.**  **Kunda alleged**  **five causes**  **of action**  **against Shaul;**  **the only**  **mention of** **ACIC in**  **the complaint**  **was an**  **allegation that**  **it was**  **responsible for**  **Shaul's breach**  **of contract**  **due to**  **the bond.·**  **Shaul and**  **ACIC used**  **the same**  **attorney in**  **accordance with**  **Shaul's obligations**  **under the**  **bond to**  **provide a**  **defense and**  **indemnify ACIC.**  **The defendants**  **filed a** **joint**
**answer to**  **the complaint,**  **admitting the**  **existence of** **the contractor's**  **bond, denying**  **liability, and**  **raising 19**  **affirmative defenses,**  **the last**  **10 of** **which dealt**  **with ACIC**  **or the**  **bond. Shaul**  **had also**  **filed a**  **breach of** **contract action**  **against Kunda;**  **the two**  **matters**
**were consolidated**  **for trial.**  **The matters**  **proceeded to**  **a weeklong** **jury trial**  **in Walla**  **Walla Superior**  **Court in**  **January 2016.**  **The jury**  **was asked**  **to consider**  **14 verdict**  **forms to**  **resolve the**  **competing claims.**  **None of** **the verdict**  **forms mentioned**  **ACIC as**  **either a**  **claimant or**  **as a**  **potentially liable**  **party. The** **jury returned**  **verdicts in**  **favor of** **Kunda on**  **three of** **her five**  **claims, including**  **breach of** **contract, unjust**  **enrichment, and**  **conversion. The** **jury verdict**  **form for**  **Kunda's breach**  **of contract**  **claim only**  **listed Shaul**  **Construction and**  **its owners**  **as the**  **liable**

**1 Also,**  **little of** **the record**  **from the**  **proceedings prior**  **to judgment**  **is included**  **in the**  **record on**  **appeal. There**  **is no**  **copy of** **the bond**  **in the**  **appellate record.**  

### 2

### No. **34920-9-III**

**Kunda v.**  **Shaul, et**  **ux, et**  **al** 

### parties. **Kunda was**  **awarded $132,346.00**  **by the** **jury. 2**  

### The**judgment was**  **filed March**  **30, 2016.**  **It listed**  **Shaul Construction**  **and the**  **owners individually as**  **debtors; the**  **judgment totaled**  **$153,251.80 when**  **costs and**  **attorney fees**  **were included.**  **Kunda's efforts**  **at collecting**  **from Shaul**  **proved unavailing,3**  **so she**  **turned to**  **ACIC to**  **collect on**  **the $12,000** **bond. ACIC**  **rebuffed her**  **efforts. Kunda**  **then filed**  **a post-judgment**  **motion for**  **summary judgment**  **against ACIC**  **on August**  **29, 2016.**  **ACIC appeared**  **and moved**  **for dismissal**  **of the**  **claim against**  **it, arguing**  **that the**  **failure to**  **obtain**
**a jury**  **verdict against**  **ACIC was**  **a failure**  **to prosecute**  **the case**  **and required**  **a dismissal**  **with prejudice.**  **The trial**  **court heard**  **the competing**  **motions on**  **November 7,**  **2016. The**  **court concluded** **that ACIC**  **had not**  **admitted liability**  **in its**  **answer. It**  **therefore denied**  **the motion**  **for summary** **judgment and**  **granted ACIC's**  **motion to**  **dismiss. Ms.**  **Kunda timely**  **appealed to**  **this court.**  **A panel**  **heard oral**  **argument on**  **the matter.**  **ANALYSIS This**  **peculiar fact**  **pattern begets**  **a peculiar**  **result. We**  **conclude that**  **because neither** **Kunda nor**  **ACIC received**  **a jury**  **verdict on**  **its claims**  **against the**  **other, use**  **of the** 

**2** 

### The **verdict form**  **does not**  **segregate damages**  **between the**  **breach of** **contract and**  **other claims.** 

**3** 

### We **were advised**  **at oral**  **argument that**  **the Shauls**  **filed for**  **bankruptcy, leading Kunda**  **to seek**  **recovery on**  **the bond.**  **3 No.**  **34920-9-III**

**Kunda v.**  **Shaul, et**  **ux, et**  **al**
**summary judgment**  **process post-verdict**  **was not**  **improper because**  **the issues**  **were left unresolved.** **4 Well**  **settled standards**  **govern review**  **of a**  **typical summary** **judgment ruling.**  **A reviewing**  **court considers**  **those matters**  **de novo,**  **considering the**  **same evidence**  **presented to**  **the trial**  **court. Lybbert**  **v. Grant**  **County, 141**  **Wn.2d 29,**  **34, 1**  **P.3d 1124**  **(2000). If** **there is**  **no genuine**  **issue of** **material fact,**  **summary judgment**  **will be**  **granted if**  **the moving**  **party is**  **entitled to** **judgment as**  **a matter**  **of law.**  **Id. "The**  **purpose of**  **summary judgment is**  **to avoid**  **a useless trial**  **when there**  **is no**  **genuine issue of any**  **material fact." Olympic**  **Fish Prod.,**  **Inc. v.**  **Lloyd, 93**  **Wn.2d 596,**  **602, 611**  **P.2d 737**  **(1980). The**  **"Contractors Registration**  **Act" (CRA),**  **chapter 18.27**  **RCW, provides**  **a mechanism**  **for homeowners**  **to recover**  **against a**  **contractor's surety**  **bond. Cosmopolitan**  **Eng'g Grp.,**  **Inc. v.**  **Ondeo Degremont,**  **Inc., 159**  **Wn.2d 292,**  **299, 149**  **P.3d 666**  **(2006). The**  **surety typically**  **provides a**  **performance bond,**  **which protects**  **the homeowner**  **from the**  **contractor's material**  **breach of** **the underlying**  **contract. 33**  **Matthew King,**  **WASHINGTON PRACTICE:**  **WASHING TON** **CONSTRUCTION LAW** **MANUAL §**  **13 :4,**  **at 261**  **(2008). The**  **CRA requires**  **general contractors**  **to file**  **with the**  **Department of** **Labor and**  **Industries a**  **$12,000 bond**  **issued by**  **a suitable**  **surety insurer.**  **RCW 18.27.040(1).**  **"Any**

**4 Since**  **we grant**  **relief to**  **Ms. Kunda,**  **we necessarily**  **deny ACIC's**  **request for**  **attorney fees**  **on appeal**  **and do**  **not further**  **address that**  **issue. 4** **No. 34920-9-111** 

**Kunda v.**  **Shaul, et**  **ux, et**  **al**
**person, firm,** **or corporation**  **having a**  **claim against**  **the contractor**  **... may**  **bring suit**  **against the**  **contractor and**  **the bond."**  **RCW 18.27.040(3).**  **"The surety**  **issuing the**  **bond shall**  **be named**  **as a**  **party to**  **any suit**  **upon the**  **bond." Id.**  **(emphasis added). These**  **rules allow**  **plaintiffs flexibility**  **to account**  **for their**  **individual circumstances; the**  **CRA does**  **not require**  **a plaintiff** **to sue**  **the contractor**  **and surety**  **in a**  **single action;**  **suits may**  **be brought**  **separately. Wardv.**  **LaMonico, 47**  **Wn. App.**  **373, 378,** **735 P.2d**  **92 (1987).**  **Nevertheless, actions**  **filed under**  **RCW 18.27.040**  **refer only**  **to actions**  **for recovery**  **against the**  **contractor's bond.**  **Ondeo, 159**  **Wn.2d at**  **299. A**  **trial court**  **properly includes** 
**a surety**  **in a** **judgement for**  **damages, but**  **caps damages**  **against the**  **surety at**  **the amount**  **of its**  **bond. Brotherton**  **v. Kralman**  **Steel Structures,**  **Inc., 165**  **Wn. App.**  **727, 732,** **269 P.3d**  **307 (2011).**  **While the**  **bond protects**  **those with**  **claims against**  **a contractor,** **the bond**  **is not**  **the equivalent**  **of liability**  **insurance and**  **the bonding**  **company does**  **not perform**  **the function of** **a typical**  **insurer. See,**  **generally, I**  **STEVEN PLITT**  **ET AL.,**  **COUCH ON** **INSURANCE 3D**  **§ 1:** **18 (2016)**  **( discussing**  **differences); Harman**  **v. Pierce**  **County Bldg** **Dep 't,**  **I 06**  **Wn.2d 32,** **720 P.2d**  **433 (1986) (contractor's**  **bond and**  **contractor's liability insurance protect different**  **interests). Typically,** **liability of** **the surety**  **is measured**  **by the**  **liability of** **the principal,** 

**provided the**  **default for**  **which the**  **surety is**  **sought to**  **be held**  **falls within**  **the purview**  **of the**  **bond. Lybecker**  **v. United** **Pac. Ins.**  **Co., 67**  **Wn.2d 11,** **18,406 P.2d**  **945 (1965);**  **11 LEER.** **Russ &**  **THOMAS F.**  **SEGALLA, COUCH**  **ON INSURANCE**  **3D §**  **163:32** 

### 5

### No. **34920-9-111**

**Kunda v.**  **Shaul, et**  **ux, et**  **al** 

### (2016); **see also**  **Tucker v.**  **Brown,** 

### 20 **Wn.2d 7** **40, 848,**  **150 P** **.2d 604**  **( 1944)**  **("The liability**  **of a**  **bondsman is**  **always measured**  **by the**  **express terms**  **of his**  **covenant, the**  **duties and**  **obligations of** **his principal,**  **as defined**  **by the**  **state statutes,**  **and the**  **conditions contained**  **in the**  **bond. The**  **surety cannot**  **be held**  **liable unless**  **the principal**  **is liable.").**  **"A trial**  **is the** **judicial examination**  **of the**  **issues between**  **the parties,**  **whether they** 
**are issues**  **of law**  **or of** **fact." CR**  **38. In**  **a typical**  **case, the**  **bonding company would**  **be included**  **with the**  **contractor on**  **the liability verdict**  **form for**  **the breach**  **of contract**  **claim**
**or the**  **issue would**  **have been**  **decided as**  **a matter**  **of law**  **by the** **judge at** **the request**  **of a**  **party upon**  **the close**  **of the**  **evidence. None**  **of those**  **possibilities occurred**  **here. Similarly,**  **none of** **the affirmative**  **defenses were**  **presented to**  **the jury**  **for consideration.**  **In this**  **circumstance, we**  **conclude that**  **there was**  **no resolution**  **of any**  **of these**  **issues and**  **that the**  **trial remained**  **incomplete. The**  **question of** **what is**  **to be**  **done remains.**  **Our starting**  **point is**  **the fact** **that there**  **is an**  **unchallenged jury**  **verdict bearing**  **on this**  **issue-the jury's**  **determination that**  **the contractor** **breached its**  **contract with**  **Ms. Kunda.**  **What are**  **the consequences**  **of that**  **verdict for**  **these unresolved**  **issues? ACIC**  **raises several**  **arguments suggesting**  **that the** 
**case concluded**  **with the** **jury's resolution**  **of the**  **verdict forms submitted**  **to it.**  **We disagree.**  **Unlike the**  **criminal law,**  **we are**  **aware of** **no implied acquittal doctrine**  **that would**  **apply to**  **a civil**  **case and**  **serve as**  **the basis**  **for a**  **determination that**  **ACIC was**  **not liable**  

### 6

### No. **34920-9-111**

**Kunda v.**  **Shaul, et**  **ux, et**  **al**



### on **the bond.**  **ACIC suggests**  **that CR**  **40(d) required**  **dismissal of** **the unresolved**  **issues. Again,**  **we disagree.**  **That rule**  **merely states**  **the possibilities**  **once a**  **case is**  **called for** **trial: it**  **will tried,**  **dismissed, or**  **continued. The**  **rule does**  **not speak**  **to the** **problem of** **issues left**  **unresolved by**  **trial. There**  **was a**  **trial in** **this case;**  **CR 40(** **d) is**  **not implicated.** **5** 

### Instead, **Kunda sought**  **relief under**  **the summary** **judgment process.** **6** 

### ACIC **understandably, and**  **correctly, argues**  **that the**  **rules do**  **not contemplate**  **CR 56**  **being used**  **after trial.**  **While we**  **agree that**  **the rules**  **contemplate summary** **judgment motions**  **will be**  **brought prior**  **to trial,**  **it appears**  **that allowing**  **the summary** **judgment process**  **in this**  **particular factual**  **circumstance better**  **serves the** **purpose of** **the rule**  **than denying**  **its use**  **here would**  **do. ACIC**  **correctly points**  **out that**  **summary judgment**  **motions typically are**  **required to**  **be heard**  **more than**  **14 days**  **prior to**  **trial. CR**  **56(c). However,**  **the same**  **sentence of**  **the rule**  **also provides**  **that the**  **timing is**  **subject to**  **the discretion**  **of the**  **trial court.** **7** 

### We

**5** 

### In **the typical**  **civil case,**  **a plaintiff** **will lose**  **if she**  **fails to**  **prove one**  **of the**  **elements of** **her case.**  **Similarly, parties**  **will seek** **judgment as**  **a matter**  **of law**  **if the**  **evidence (or**  **lack thereof)**  **compels a**  **result in**  **their favor.**  **Neither of** **those circumstances**  **exist here.**  **6** 

### Counsel **admitted at**  **trial that**  **the rule**  **was not**  **a particularly**  **good fit,**  **although no**  **rule appeared**  **to be.**  **We agree**  **that this**  **approach usually will**  **have little**  **to recommend**  **it and**  **caution against reliance**  **on the**  **process employed**  **in this**  **action. In**  **many instances,**  **CR 60**  **might be**  **appropriate, but**  **the bankruptcy**  **filing made**  **use of** **that rule**  **impractical here.**  **7** 

### "Summary**judgment motions**  **shall be**  **heard more**  **than 14**  **calendar days**  **before the**  **date set**  **for trial**  **unless leave**  **of court**  **is granted**  **to allow**  **otherwise." CR**  **56(c).**
**7**

### No. **34920-9-III**

**Kunda v.**  **Shaul, et**  **ux, et**  **al**


### think **the trial**  **court erred**  **by not**  **allowing the**  **CR 56**  **motion to**  **be heard**  **since the**  **failure of** **the parties**  **to submit**  **the remaining**  **issues to**  **the jury**  **left them**  **untried and**  **employment of** **CR 56**  **would prevent**  **an unnecessary**  **second trial.**  **There is**  **no genuine**  **prejudice to**  **ACIC. As**  **noted previously, Ms.**  **Kunda was**  **free to**  **have sued**  **Shaul and**  **ACIC in**  **separate actions.**  **Ward,** 

### 47 **Wn. App.**  **at 378.**  **It is**  **recognized that** **while it**  **would be**  **inequitable to**  **bind a**  **surety conclusively**  **by a** **judgment to** **which it**  **was not**  **a party,**  

### it **is, at**  **a second**  **proceeding, not unfair** **to presume**  **the validity**  **and correctness**  **of the**  **judgment against**  **the contractor**  **when considering**  **the liability**  **of the**  **surety. Id.**  

### at **379- 380;**  **RESTATEMENT (THIRD)**  **OF** 

### SURETYSHIP **& GUARANTY**  **§ 67**  **(1996) (emphasis**  **added). Under**  **this approach,**  **the surety**  **maintains the**  **ability to**  **rebut the**  **verdict and**  **raise its**  **own defenses**  **that are**  **independent of** **the contractor's**  **liability. Ward,**  

### 47 **Wn. App.**  **at 3** **80. Thus,**  **we have**  **no hesitation**  **in concluding**  **that principles**  **of res** **judicata would**  **not have**  **barred a**  **second trial**  **against ACIC**  **or the**  **use of** **the verdict**  **against Shaul**  **in that**  **action. By**  **analogy to**  **Ward,** 

### we **believe that**  **use of** **CR 56**  **to preclude**  **an unnecessary second trial**  **was appropriate.**  **It also**  **is not**  **unprecedented to**  **add parties**  **to a** **judgment after**  **trial. An**  **early case**  **allowing the**  **real party**  **in interest**  **to become**  **a party**  **on appeal**  **is Schroeder**  **v. Hotel**  **Commercial Co.,**  

### 84 **Wash. 685,**  **694-695, 147**  **P. 417**  **(1915). There**  **the court**  **permitted**

**8 No.**  **34920-9-III**

**Kunda v.**  **Shaul, et**  **ux, et**  **al**
**the real**  **party in**  **interest to** **join in**  **an appeal**  **that was**  **also a**  **trial de**  **novo. Id.**  **at 694.**  **The court**  **noted avoidance**  **of an**  **unnecessary second**  **trial as**  **the reason**  **for the**  **action: There**  **is no**  **pretense that**  **the Eilers**  **Music House,**  **had it**  **been a**  **nominal party**  **throughout, could**  **have advanced**  **anything further**  **in its**  **behalf than**  **has been**  **presented. To**  **compel the**  **respondent to**  **again litigate**  **this transaction**  **with that**  **company would**  **be a**  **manifest injustice. We**  **have often**  **held that**  **a person,**  **though not**  **a technical**  **party to**  **the action,**  **is bound**  **by a**  **decree if** **he be**  **interested in**  **the subject-matter**  **and has**  **exercised the**  **right to** **participate in**  **the litigation.**  **Id. at**  **695. This**  **court relied**  **on Schroeder**  **in Betchard-Clayton,**  **Inc. v.**  **King, 41**  **Wn. App.**  **887, 894-895,**  **707 P.2d**  **1361 (1985).**  **There, the**  **corporate officers**  **of one**  **party were**  **added as**  **defendants after**  **the end**  **of the**  **case and**  **a third**  **party plaintiff** **was added.**  **Id. Relying**  **in part**  **on CR**  **21, this**  **court upheld**  **the actions,**  **noting that**  **the rule**  **permitted addition**  **of parties**  **after the**  **close of** **the case.**  **Id. This**  **court, citing**  **still more**  **authorities, stressed**  **the uselessness**  **of not**  **permitting the**  **addition of** **new parties.**  **Id. at**  **896. Washington**  **courts have**  **freely added**  **parties after**  **trial, including**  **to judgments,**  **to avoid**  **unnecessary second**  **trials. That**  **policy, again by**  **analogy, also**  **supports the**  **use of**  **CR 56**  **in this**  **case. ACIC**  **was a**  **party to**  **the action**  **and was**  **able to**  **present any**  **evidence it**  **had. It**  **fully participated**  **in the**  **case and would**  **have been**  **shielded from liability under the**  **bond if** **Shaul had**  **prevailed on**  **the breach**  **of contract**  **case. Both**  **parties failed**  **to offer**  **a verdict**  **form to**  **deal with**  **ACIC's liability**  **or its**  **affirmative defenses.**  **Under these**

**9 No.**  **34920-9-III**

**Kunda v.**  **Shaul, et**  **ux, et** **al circumstances,**  **there simply is**  **nothing to**  **be gained**  **by requiring**  **a second** **trial to**  **address the**  **unresolved claims.**  **With respect**  **to Ms.**  **Kunda, the**  **problem appears**  **to be**  **more in** **the nature**  **of a**  **scrivener's error**  **than it**  **does any**  **failure of** **proof. With**  **respect to**  **ACIC, the**  **failure to**  **seek judgment**  **as a**  **matter of** **law or**  **to submit jury**  **interrogatories or**  **verdict forms**  **may have**  **been oversight**  **or it**  **may simply**  **have been**  **deemed unnecessary**  **in light**  **of the**  **evidence developed**  **at trial.**  **It might**  **even have**  **been a**  **deliberate effort**  **to take**  **advantage of** **the plaintiffs**  **apparent oversight**  **on her**  **verdict forms.**  **Rather than**  **attempt to**  **unravel this**  **Gordian's Knot,**  **we simply**  **follow the**  **example of** **Alexander the**  **Great and**  **cut through**  **it. 8**  **Whatever the**  **cause, we**  **see no**  **prejudice from**  **the late**  **addition of** **ACIC to**  **the judgment,**  **subject to**  **the limitation**  **of the**  **bond amount.**  **ACIC admitted**  **in its**  **answer that the**  **bond was**  **in effect**  **at the**  **time of** **the failed**  **remodel project. The** **jury's verdict against Shaul**  **confirmed that**  **the contractor,**  **not the**  **homeowner, breached the**  **contract. That**  **determination was**  **the last**  **piece of** **the puzzle**  **for the** **jury to**  **find for**  **Kunda on**  **the bond,**  **something it**  **would have**  **had to**  **do if** **requested. Similarly, the**  **trial judge would**  **have had**  **to do**  **the same**  **if a**  **timely request**  **had been**  **made. 9** 

**8 See**  **BULFINCH'S MYTHOLOGY:**  **THE AGE**  **OF FABLE**  **44 (Richard**  **P. Martin,**  **ed., 1991).**  **9 Since**  **the failures**  **of plaintiff** **made this**  **appeal necessary,**  **we decline**  **to award**  **costs or**  **fees in**  **this appeal.**  **RAP 14.2.**  **Both parties**  **will pay**  **their own.**  **10**

### No. **34920-9-111**

**Kunda v.**  **Shaul, et**  **ux, et**  **al Accordingly,**  **we reverse**  **the trial**  **court's rulings**  **in favor**  **of ACIC**  **and remand**  **for entry**  **of judgment**  **in favor**  **of Kunda**  **up to**  **the limit**  **of the**  **bond. Reversed.**  **A majority**  **of the**  **panel has**  **determined this**  **opinion will**  **not be**  **printed in**  **the Washington**  **Appellate Reports,**  **but it**  **will be**  **filed for**  **public record**  **pursuant to**  **RCW 2.06.040.**  **I Kors** **�**
**WE CONCUR:** 

**Pennell, J.** 



### 11