### FILED August 22, 2013 In the Office ofthe Clerk ofCourt W A State Court ofAppeals, Division III
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON DIVISIONTHREE CC&H INVESTMENTS, a partnership, ) ) Respondent, ) ) 

### v. ) ) RCS NORTHWEST, LLC, anIdaho ) Limited Liability Company, who acquired ) title as RCS NORTHWESTLLC ) LIMITED LIABILITY COMPANY; ) EARLY BIRD SUPPLY, INC., a ) Washington corporation; WILLIAM ) JENKINS, d/b/a! JENKINS PLUMBING, ) INC., and all otherpersons orparties ) claiming any right, title, estate, lien or ) interest in thereal estate described inthe ) complaint; and LEWISTON­ ) CLARKSTON PARTNERS HABITAT ) FORHUMANITY, ) ) Defendants, ) ) CHARLEYHEWITT, d/b/a HEWITT ) CONSTRUCTION CO., and JANEDOE ) HEWITT, ) ) Appellant. ) No. 30590-2-III

UNPUBLISHED OPINION

SIDOOWAY, 

### J.

- CC&H Investments, a construction lender, brought this action to foreclose three deeds oftrust and have them declared seniorto mechanics' liens that hadNo.30590-2-III CC&HInvs. v. RCSNw., LLC
been filed by three ofthe defendants. One ofthe lienholders, Charley Hewitt, doing business as, Hewitt Construction Co., appeals the summaryjudgment dismissal ofhis counterclaim-acounterclaimthat was based not onhis lien, but onthe theory that CC&Hwas unjustly enriched by improvements he had made to the foreclosed property. The trial court properly dismissed Mr. Hewitt's claimto the extent it was based solely onthe benefit conferred by Mr. Hewitt's improvements to the property. ButMr. Hewitt claims to have had a conversation with a CC&Hprincipal late in the project, who allegedly provided assurances thatMr. Hewitt should continue his work and could expect to be paid. With respect to Mr. Hewitt's claim for work performedthereafter, issues of fact remain thatrequire trial. We reverse in part and remand. FACTS AND PROCEDURAL BACKGROUND RCS Northwest LLC is a real estate developer. Between 2008 and 20I0, CC&H extended three loans totaling $368,500 to RCS, which were usedby RCS to acquire property located in Asotin and finance development of23 single family home sites platted as the Highland Place subdivision. The loans were secured by deeds oftrust against RCS's property thatwere duly recorded. In the fall of2010, RCS evidently became unable to pay material and labor costs on the project, and mechanics' liens were filed by Mr. Hewitt, Early Bird Supply Inc., and Jenkins Plumbing Inc. In 2011, CC&H commenced the action below to foreclose its deeds oftrust. It namedthe holders ofthe

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mechanics' liens as defendants and prayed for a determination that their interests were juniorto its deeds oftrust. 

### Mr. Hewitt, a licensed general contractor, was engaged by RCS to constructthe major infrastructure for the subdivision. In answering CC&H's complaint, he asserted a
cross claim against RCS for the $114,972 he alleged remained owing for his work. He also asserted a counterclaim against CC&H, alleging that ifhe hadnotconstructed the infrastructure, the property on which CC&H held deeds oftrust wouldbe worth less than the amount CC&H was owedby RCS. He admitted that CC&H acquired its deeds of trust before he made improvements to the property. Buthe argued that his construction ofthe infrastructure conferred a benefit on CC&H, that CC&H was aware ofthe benefit, and that it would be inequitable for CC&Hto retain the benefitwithoutpaying for its value. CC&Hmoved for summaryjudgment against all ofthe defendants. In support of its motion, it filed a declaration ofDick Coles, one ofits partners, which established among othermatters that it made its first two loans to RCS two years before any mechanics' liens were filed and that its third loan was to enable RCS to pay deposits on materials and specialty contractors. 

### Mr. Coles testified in his declaration: 17.
. .. CC&H cannot be held responsible for RCS' failure topay its contractors. We were notthe guarantors on thisjob. 18. We already paid for the services which are the subject ofthe defendants' liens. They are now asking that we pay twice. Their remedy lies with RCS not CC&H. 

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Clerk's Papers (CP) at 94. CC&H also filed a declaration ofRon Stricklin, a member-manager ofRCS, establishing that RCS grantedthe last ofCC&H'sthree deeds oftrust in February 2010. Mr. Stricklintestified in the declaration that CC&H "paid me funds withwhich to satisfy the subcontractor's bills for services and labor," but that "I usedthose funds for other legitimate purposes related to the project and was unable to paythe subcontractors who have now filed liens." CP at 97. In opposition to the motion for summaryjudgment, 

### Mr. Hewitt submitted his own declaration setting forth facts suggesting, he contended, that CC&H knew RCS was underwater financially and would be unable to pay its contractors. His declaration also includedthe following allegations thatMr. Coles made representations to induce him to complete the infrastructure even though he was notbeing paid: 11.
. .. When I was well along with the work on the project, but wasn't completely done, I had a conversation with Dick Coles. His emphasis to me was that I needed to get the project done and get it done soon. He kept asking me when the projectwould be done. I asked 

### Mr. Coles what he knew aboutthis guy, Ron Stricklin and pointblank asked DickColes "will I getpaid". I was assured by Dick Coles that Ron Stricklin was reliable orok orwords to that effect and that he was certain that I would getpaid when thejob was done. 12.
. .. I had no idea that Dick Coles was one ofthe investors in CC&H atthe time I was having the discussions with him. We were actually talking about another unrelatedprojectwhen the conversation came up. Thereafter, I asked Ron Stricklin about Dick Coles. Stricklin then told me that Coles was his friend and was the "money guy". Ron


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Stricklin also assured me that I would get paid when the county approved thejob and that 

### CC&H/Coles were financing the whole thing. CP at 102-03. Mr. Hewitttestified that he continued to work on the project and complete the development "only because I relied onwhatDick Coles and Ron Stricklin had told me, thatthere was money to pay for my improvements and that I would getpaid." CP at 

### 103. CC&H filed a supplemental declaration ofMr. Coles in which he acknowledged havinghad a conversation with 

### Mr. Hewittbut denied

### Mr. Hewitt's version ofwhatwas said. In particular, he denied making any assurances or guarantees that Mr. Hewitt would be paid or telling 

### Mr. Hewitt that he should try to complete the project. 

### Mr. Coles testified in his supplemental declaration that ifhe said anything to 

### Mr. Hewitt about

### Mr. Stricklin, itwould have been a truthful statement based on his experiences with Mr. Stricklin up to thatpoint in time. The trial court granted CC&H's motion for summaryjudgment. Mr. Hewitt appeals. ANALYSIS A party may bring a claim for unjust enrichment to recover the value ofa benefit retained even absent any contractual relationship, iffairness andjustice require it. 

### Young
v. 

### Young, 164 Wn.2d 477, 484, 191 P.3d 1258 (2008). In these situations, it is said that a quasi contract exists betweenthe parties. Id. The party must prove three elements: "(1)
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the defendantreceives a benefit, (2) the received benefit is at the plaintiffs expense, and (3) the circumstances make 

### itunjust for the defendantto retain the benefitwithout payment." Id at 484-85. The mere fact that a defendant has received a benefit from the plaintiffis insufficient tojustify recovery. Reliefis available only ifitis unjust for the defendant to keep the benefitreceived withoutpaying. Chandler v. Wash. TollBridgeAuth., 17 Wn.2d 591, 601, 137 P.2d 97 (1943); Norcon Builders, LLCv. GMPHomes VG, LLC, 161 Wn. App. 474, 490, 254 PJd 835 (2011). It also is critical that the enrichment be unjust as between theparties to the transaction. Farwest Steel Corp. v. Mainline Metal Works, Inc., 48 Wn. App. 719, 732, 741 P.2d 58 (1987). It is undisputed that ee&Hreceived a benefit in this case. It foreclosed on residential developmentproperty that was more valuable with the infrastructure having been completed, thanks to the work performed by Mr. Hewitt. The question then becomes whether it is unjust for ee&Hto retain this benefit. ee&Hrelies, as did the trial court, on the general rule that the mere fact that a third person (here, ee&H)benefits from a contract between two otherpersons (here, Res and Mr. Hewitt) does not make the third person liable for unjust enrichment based
on the mere failure by one ofthe contracting parties (here, ReS) to perform. See Farwest, 48 Wn. App. at 732. Mr. Hewitt has failed to demonstrate any genuine issue of material fact that wouldprevent this general rule from applying, for the mostpart, to the 6

### No.30590-2-III CC&HInvs. 

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### benefitthat CC&H derived from Mr. Hewitt's improvements to the Highland Park subdivision. A lender does nothave a duty to see that loan funds are properly disbursed to contractors. Town Concrete Pipe ofWash" Inc. 

### v. Redford, 

### 43 Wn. App. 493, 501, 717 P.2d 1384 (1986). The general rule is subject to an exception, however, where the thirdperson benefiting has engaged in some misleading act. See Farwest, 

### 48 Wn. App. at 733. Amongthe misleading acts that will support a claim ofunjust enrichment is for a lender to urge a contractorto continue working in circumstances similarto those in this case. See Irwin Concrete, Inc. 

### v. Sun CoastProps., Inc., 

### 33 Wn. App. 190,653 P.2d 1331 (1982) (lender encouraged continued work knowing that foreclosure was looming); cf Town Concrete, 

### 43 Wn. App. 493 (lender was not unjustly enriched as long as it did nothing to mislead the contractor). Our review ofdismissal ofa claim on summaryjudgmentis de novo. Hisle 

### v. ToddPac. Shipyards Corp., 

### 151 Wn.2d 853, 860,93 P.3d 108 (2004). We review all facts and reasonable inferences from the facts in a light most favorable to the nonmoving party. Jones 

### v. AllstateIns. Co., 

### 146 Wn.2d 291,300,45 PJd 1068 (2002). Here, Mr. Hewitt has testified that he was encouraged by Mr. Coles to continue his work, with the clear implication from Mr. Coles being thatMr. Stricklin could be counted upon to perform and pay. He claims to have completed the infrastructure in reliance. These facts, iftrue, are sufficientto support a claim ofunjust enrichment for the 

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incremental benefit, ifany, that was conferred by 

### Mr. Hewitt after the conversation with 

### Mr. Coles tookplace. Accordingly, we reverse in partthe trial court's order granting summaryjudgment. Mr. Hewitt is entitledto a trial.on this aspect ofhis unjust enrichment claim. CC&H requests attorney fees on appeal under RAP 18.1 and RCW 60.04.181(3). Itis not the prevailing party, so we need not further consider whether it would be entitled to fees under chapter 60.04 RCW, dealing with mechanics' liens, ifithad prevailed. We reverse, in part, the trial court's order on summaryjudgment. The granting of the motion to dismiss 

### Mr. Hewitt's unjust enrichment claim is reversed to the extent of any benefit enjoyed by CC&H as a result of

### Mr. Coles's alleged statements and
assurances recounted in Mr. Hewitt's declaration opposing summaryjudgment. Mr. Hewitt's counterclaim based on any such benefit is remanded for trial. The unjust enrichment claim is one for money damages, so the trial court's "OrderConfirming Sale ofReal Property" is affirmed. A majority ofthepanel has determined that this opinion will not be printed in the



### 8No. 30590-2-111 CC&Hlnvs. v. RCSNw., LLC WashingtonAppellate Reports but it will be filed for public record pursuantto RCW 2.06.040.

# SiddO~/;r- WE CONCUR:

Ko smo, C.J.

Brown, J.

9