FILED 

August 22, 2013 

In the Office ofthe Clerk of Court 

W A State Court of Appeals, Division III 

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON 

DIVISION THREE 

CC&H INVESTMENTS, a partnership, ) 

) 

Respondent, ) 

) 

v. ) 

) 

RCS NORTHWEST, LLC, an Idaho ) 

Limited Liability Company, who acquired ) 

title as RCS NORTHWEST LLC ) 

LIMITED LIABILITY COMPANY; ) 

EARL Y BIRD SUPPLY, INC., a ) 

Washington corporation; WILLIAM ) 

JENKINS, d/b/a! JENKINS PLUMBING, ) 

INC., and all other persons or parties ) 

claiming any right, title, estate, lien or ) 

interest in the real estate described in the ) 

complaint; and LEWISTON­ ) 

CLARKSTON PARTNERS HABITAT ) 

FOR HUMANITY, ) 

) 

Defendants, ) 

) 

CHARLEY HEWITT, d/b/a HEWITT ) 

CONSTRUCTION CO., and JANE DOE ) 

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UNPUBLISHED OPINION 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 senior to mechanics' liens that had 
No.30590-2-III 

CC&H Invs. v. RCS Nw., LLC 

been filed by three ofthe defendants. One ofthe lienholders, Charley Hewitt, doing 

business as, Hewitt Construction Co., appeals the summary judgment dismissal ofhis 

counterclaim-a counterclaim that was based not on his lien, but on the theory that 

CC&H was unjustly enriched by improvements he had made to the foreclosed property. 

The trial court properly dismissed Mr. Hewitt's claim to the extent it was based 

solely on the benefit conferred by Mr. Hewitt's improvements to the property. But Mr. 

Hewitt claims to have had a conversation with a CC&H principal late in the project, who 

allegedly provided assurances that Mr. Hewitt should continue his work and could expect 

to be paid. With respect to Mr. Hewitt's claim for work performed thereafter, issues of 

fact remain that require trial. We reverse in part and remand. 

FACTS AND PROCEDURAL BACKGROUND 

RCS Northwest LLC is a real estate developer. Between 2008 and 20 I 0, CC&H 

extended three loans totaling $368,500 to RCS, which were used by RCS to acquire 

property located in Asotin and finance development of 23 single family home sites 

platted as the Highland Place subdivision. The loans were secured by deeds of trust 

against RCS's property that were 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 named the holders ofthe 

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CC&H Invs. v. RCS Nw., LLC 

mechanics' liens as defendants and prayed for a determination that their interests were 

junior to its deeds of trust. 

Mr. Hewitt, a licensed general contractor, was engaged by RCS to construct the 

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 if he had not constructed the 

infrastructure, the property on which CC&H held deeds of trust would be worth less than 

the amount CC&H was owed by RCS. He admitted that CC&H acquired its deeds of 

trust before he made improvements to the property. But he 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&H to retain the benefit without paying for its 

value. 

CC&H moved for summary judgment against all ofthe defendants. In support of 

its motion, it filed a declaration ofDick Coles, one of its partners, which established 

among other matters 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 to pay its 

contractors. We were not the guarantors on this job. 

18. 	 We already paid for the services which are the subject of the 

defendants' liens. They are now asking that we pay twice. Their 

remedy lies with RCS not CC&H. 

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CC&H Invs. v. RCS Nw., LLC 

Clerk's Papers (CP) at 94. 

CC&H also filed a declaration of Ron Stricklin, a member-manager ofRCS, 

establishing that RCS granted the last ofCC&H's three deeds oftrust in February 2010. 

Mr. Stricklin testified in the declaration that CC&H "paid me funds with which to satisfy 

the subcontractor's bills for services and labor," but that "I used those funds for other 

legitimate purposes related to the project and was unable to pay the subcontractors who 

have now filed liens." CP at 97. 

In opposition to the motion for summary judgment, 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 

included the following allegations that Mr. Coles made representations to induce him to 

complete the infrastructure even though he was not being 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 project would be done. I asked Mr. 

Coles what he knew about this guy, Ron Stricklin and point blank asked 

Dick Coles "will I get paid". I was assured by Dick Coles that Ron 

Stricklin was reliable or ok or words to that effect and that he was certain 

that I would get paid when the job was done. 

12. . .. I had no idea that Dick Coles was one ofthe investors in 

CC&H at the time I was having the discussions with him. We were 

actually talking about another unrelated project when 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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No. 30590-2-111 

CC&H Invs. v. RCS Nw., LLC 

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

the job and that CC&H/Coles were financing the whole thing. 

CP at 102-03. Mr. Hewitt testified that he continued to work on the project and complete 

the development "only because I relied on what Dick Coles and Ron Stricklin had told 

me, that there was money to pay for my improvements and that I would get paid." CP at 

103. 

CC&H filed a supplemental declaration ofMr. Coles in which he acknowledged 

having had a conversation with Mr. Hewitt but denied Mr. Hewitt's version ofwhat was 

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, it would have been a truthful statement based on his experiences with Mr. 

Stricklin up to that point in time. 

The trial court granted CC&H's motion for summary judgment. Mr. Hewitt 

appeals. 

ANALYSIS 

A party may bring a claim for unjust enrichment to recover the value of a benefit 

retained even absent any contractual relationship, if fairness and justice 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 between the parties. Id. The party must prove three elements: "(1) 

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No. 30590-2-111 

CC&H Invs. v. RCS Nw., LLC 

the defendant receives a benefit, (2) the received benefit is at the plaintiffs expense, and 

(3) the circumstances make it unjust for the defendant to retain the benefit without 

payment." Id at 484-85. 

The mere fact that a defendant has received a benefit from the plaintiff is 

insufficient to justify recovery. Relief is available only ifit is unjust for the defendant to 

keep the benefit received without paying. Chandler v. Wash. Toll Bridge Auth., 17 

Wn.2d 591, 601, 137 P.2d 97 (1943); Norcon Builders, LLC v. GMP Homes VG, LLC, 

161 Wn. App. 474, 490, 254 PJd 835 (2011). It also is critical that the enrichment be 

unjust as between the parties 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&H received a benefit in this case. It foreclosed on 

residential development property 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&H to retain this benefit. 

ee&H relies, 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 other persons (here, 

Res and Mr. Hewitt) does not make the third person liable for unjust enrichment based 

on the mere failure by one of the 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 would prevent this general rule from applying, for the most part, to the 

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No.30590-2-III 

CC&H Invs. v. RCS Nw., LLC 

benefit that CC&H derived from Mr. Hewitt's improvements to the Highland Park 

subdivision. A lender does not have 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 third person 

benefiting has engaged in some misleading act. See Farwest, 48 Wn. App. at 733. 

Among the misleading acts that will support a claim ofunjust enrichment is for a lender 

to urge a contractor to continue working in circumstances similar to those in this case. 

See Irwin Concrete, Inc. v. Sun Coast Props., 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 of dismissal of a claim on summary judgment is de novo. Hisle v. 

Todd Pac. 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. Allstate Ins. 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 that Mr. Stricklin could be counted 

upon to perform and pay. He claims to have completed the infrastructure in reliance. 

These facts, iftrue, are sufficient to support a claim of unjust enrichment for the 

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No.30590-2-II1 

CC&H Invs. v. RCS Nw., LLC 

incremental benefit, if any, that was conferred by Mr. Hewitt after the conversation with 

Mr. Coles took place. Accordingly, we reverse in part the trial court's order granting 

summary judgment. Mr. Hewitt is entitled to a trial. on this aspect of his unjust 

enrichment claim. 

CC&H requests attorney fees on appeal under RAP 18.1 and RCW 60.04.181(3). 

It is 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, ifit had prevailed. 

We reverse, in part, the trial court's order on summary judgment. 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 ofMr. Coles's alleged statements and 

assurances recounted in Mr. Hewitt's declaration opposing summary judgment. 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 "Order Confirming Sale 

ofReal Property" is affirmed. 

A majority ofthe panel has determined that this opinion will not be printed in the 

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No. 30590-2-111 

CC&H lnvs. v. RCS Nw., LLC 

Washington Appellate Reports but it will be filed for public record pursuant to RCW 

2.06.040. 

SiddO~/;r- WE CONCUR: 

Ko smo, C.J. 

Brown, J. 

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