IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

JEANETTE K. PHILLIPS, 

### ) No. 78762-4-I (Consolidated with No. 78860-4-I) Appellant/Cross- 

### ) Respondent, 

### ) DIVISION ONE

v. 

### ) UNPUBLISHED OPINION CHRISTOPHER R. SMITH and JOELLE 

### ) R. SMITH, a married couple, 

### ) ) Respondents/Cross- 

### ) Appellants. 

### )

___________________________________

### ) FILED: March 23, 2020 HAZELRIGG, J.

— Jeanette K. Phillips seeks reversal of an order granting summary judgment to Christopher and Joelle Smith (the Smiths) and ordering Phillips to sell a house to the Smiths pursuant to the provisions of a lease agreementwith option to purchase. Phillips contendsthatthe Smiths did not meet theirobligations underthe contract and thatthe courterred in awarding the Smiths costs and fees. The Smiths cross-appeal, arguing that the court should have awarded them damages for rental payments madeto Phillips during litigation. We affirm the order of summary judgment and remand for entry of an award of damages for rental payments made as a result of the breach and for entry of findings offact and conclusions of law regarding the award of attorney fees and costs.No. 78762-4-1/2 FACTS In 1991, Jeanette Phillips purchased a house on Ashworth Avenue in Seattle, where she lived until 2007. From 2007 to 2015, she rented the house to approximately 13 differenttenants. Phillips met ChristopherSmith when Smith, a mason, wasworking atthe home of Phillips’ friend Susan Rubstello. Phillips hired Smith to repairthe chimney at herAshworth Avenue house. She knewthat Smith
was looking for a place to rent and asked him if he would be interested in renting the house. She wanted to replace the currenttenants because theywere behind
on rental payments and not taking care ofthe yard. Smith and his wife, Joelle, agreed to rentthe house and moved in on June 15, 2015. The parties did notsign
a lease agreement before the Smiths moved in but agreed that the lease would last three to five years and the Smiths would pay rent of $2,500 per month. At Rubstello’s suggestion, Phillips and Smith had also discussed including an option to purchasethe house in the lease agreement before the Smiths moved in. On June 30, 2015, Phillips sentthe Smiths a list of“things we need to work out,” including notes about potential tax consequences and sellerfinancing. The parties determined thatthe house was worth $700,000 after looking atZillow1 and Redfin2and agreed on thatasa purchase price. Atthetime, Phillips owed between $100,000 and $115,000 on her mortgage, and the parties were aware that the Smiths would not be able to assume the mortgage. The parties planned for the Smiths to pay offthe existing debt before taking title to the house. Phillips’ notes

I Awebsite and cell phone application utilized as a real-estate database, search engine, business directory, and rental management.

2Awebsite and cell phone application utilized as a real-estate broker.
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indicated that, “afterthe existing loan was paid off, [she] would be the financierfor the $600,000 that was left.” She was willing remain the lenderforthe $600,000 for up to 10 years afterthe Smiths tooktitle to the house. Phillips did not consult
an attorney about these issues because she believed the parties were going to worktogetherwith the same lawyer. In early October2015, Phillips emailed Smith saying itwas “very important for[her] peace ofmind that [they] getthe lease agreementcompleted even if[they] have to wait on the other stuff.” That month, the parties met at the Ashworth Avenue house with Rubstello to discuss the terms of the agreement. Rubstello took notes on the proposed terms and the parties initialed each page of her handwritten notes. The notes indicated thatthe parties agreed to a selling price of $700,000 and Phillips would lend the Smiths the amount due at closing at a five percent interest rate. Afterthe meeting, Smith gave Phillips a draft“LeaseAgreementwith Option to Purchase Real Estate” that he had adapted from a form agreement he found online. Phillips reviewed the draft agreement in its entirety and hand-wrote two comments on the draft, which she discussed with Smith by telephone. The first comment concerned the term of the lease option, which she corrected from 15 years to three years. The second comment indicated that she wanted language removed thatwould givethe Smiths a right ofassignment. Afterthis conversation, Phillips understood that Smith was going to make those changes to the draft. Phillips acknowledged that paragraph 24 stated that both parties had sought the advice ofcounsel, ifdesired, and that she had not done so.

-3-No. 78762-4-1/4 Two days later, Smith emailed Phillips explaining thatthe 15-yearterm was based on hercurrent mortgage loan with the bankand asking whatwould happen iftheydid not havethe moneyto pay offthe rest ofthe loan atthe end ofthe lease term. Phillips responded bytelephone thatthis was a risk ofentering into a lease with option to purchase and that she could choose to extend the option lease at herdiscretion. The following day, the Smiths brought Phillips a revised copy of the final agreement. The Smiths explained the changesthat had been madefrom the prior draft, but Phillips did not read the final draft before signing. On October22, 2015, the parties signed the agreementand had it notarized at Phillips’ bankin Kenmore. When Phillips signed the contract, she knew that she had the right to discuss it with an attorney but had notdone so. Smith recorded the agreementwith the King CountyAuditorthe same day. The final option lease specified a term ofthree years, from June 15, 2015 to 11:59 p.m. on June 14, 2018. The Smithswere entitled to exercise theiroption to purchase the house for $700,000, less any credits toward the purchase price, “at anytime during the term ofthis option lease” by providing notice to Phillips “at leastsixty (60) days priortothe expiration ofthe initial term.” The section regarding transferoftitle included the following language: “[i]n the eventthe Buyers/Tenants chose [sic] to exercise theiroption to purchase, theywill notifythe Seller/Landlord during the term ofthis agreement. The Seller/Landlord further agrees to furnish the Buyers/Tenants with an owner’s title binderwithin forty-five

. . . (45) days after receiving notice.” The agreementalso provided that “[t]he deed shall be delivered

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and the purchase money shall be paid

. . . no later than sixty (60) days after notification to the Seller/Landlord ofthe Buyers’/Tenants’ exercise ofthe purchase option.” The agreement noted that “[t]ime is ofessence in this option to purchase agreement.” The agreement included the monthly rent of $2,500 and provided that the Smiths would pay an additional $500 per month after Phillips supplied them with her completed personal estate planning documentation providing the Smiths with “security protection.” This additional paymentwould be applied “toward [Phillips’] financial obligations currently owing against the real estate to be credited against the purchase price.” The Smiths never began making this payment because Phillips did not send them herestate planning documents. In November2016, about halfwaythrough thethree-yearoption leaseterm, Phillips emailed Smith regarding shopping for a home loan. In response, Smith sent an email saying: Jean. We are opening a cafe and will not be in any position to purchase the home forabout a year. But as soon as we can we will beg[i]n the process which will be well before the time allotted on our agreement. I am sure. Sorrywe cannot act anysooner. Phillips responded, “That is notwhatyou said lastTuesday.” Smith explained, I did not fully under[stand] what you were saying last Tuesday. I assumed you meant to make sure it all happens within the allotted time. Ifyou would like to modify the contract we can discuss. But I am very busy atthe moment and won’t have much time to deal with this till afterthe holidays. Sorry [J]ean. Laterthat day, Phillips sentthe following email: Chris, you broke the lease by taking up the kitchen floor without consulting me. I do not understand whyyou would do something like that unless you were not serious about the contract of the house.

-5-No. 78762-4-1/6 Further, you said on the 9th thatyou would get started on buying the house. I am not interested in waiting forthe economyto tank again. It is going to happen, as it has every republican administration in my lifetime. You had the plan to buy the house before you started the café. My brotherdied on October gth and Iwantto geton with my lifewhich I cannot do unless I have the moneyfrom my house. Life has gotten awfullyshortall ofa sudden and I wantto get on with it. Startshopping fora mortgageand getqualified. Lock in a rate soyou can afford to do both the caféand the house. I was not kidding on the 9t~~ and I am not kidding now. I do not know howyou could have misunderstood me. Almost a year later, on October 28, 2017, Smith emailed Phillips and advised herthattheywere taking steps to prepare to purchasethe house, saying, “I believe our loan should be near complete bythe beginning ofthe year!! Before May we will have a check for $750,000.00 dollars [sic] payable to Jean Phillips.” Phillips called Smith after receiving this email to discuss rent payments, butdid not otherwise respond because she “didn’ttake him seriously.” Phillips did not obtain
a title binderwithin 45 days ofthis email. Afewweeks later, on November 15, 2017, Smith sent anotheremail about steps to purchase the house: I talked to my real estate lawyer and everything looks solid in the contract. It looks like you will need payment before being able to get the title to the home as there is [I’m] guessing around 100k left on the loans. The loan is already processed and so ifyou would like we can close the deal well before [M]ay. Let me know. Phillips responded that she would have her attorney contactthe Smiths’ attorney and asked for their contact information. Phillips interpreted this email as a

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continuation ofthe October email and did not obtain a title binder in the following 45 days. On December21, 2017, the Smiths sent Phillips an email stating, “Hi Jean, this is a letterto letyou know our intentto purchase 8001 [A]shworth Ave N, with
a minimum of60 [d]ays notice.” Phillips recognized this as the Smiths exercising their purchase option underthe option lease. She did not respond to this email or return subsequent phone calls from the Smiths. She did not obtain a title binder within the next45 days. Smith emailed Phillips again on January 11, 2018 and attached a residential purchase and sale agreement that specified a closing date near the end of the lease term: Hi Jean. Attached is a copyofthe loan/purchase agreementforyou to review. The close date would be 6/1 3/1 7. All your current debts on the house would be paid in full following escrow. There will be no additional costs ortaxes to you, I have taken care of everything. I currently am holding a copy that we can meet and sign or you can simply print, sign and send me the attached copy and I will get it to my agent Tyler Woodbridge of John L Scott in Renton. This form does not need to be notarized, onlythe forms completing the transaction afteryou are handed a check on 6/13/17. Till then we obviouslywill continue to pay our lease. Ifthere is any other information you want, please let me know. Have your lawyer lookoverthe paperwork ifyou would like, I am using the [simplest] loan so everything is very [straightforward].

-7-No. 78762-4-1/8 Hope you are doing good! The Smiths The purchase and sale agreement contained afinancing addendum that gave the Smiths 90 days to apply for a “Conventional First” mortgage loan after Phillips’ acceptance ofthe agreement. Phillips did not respond to this email. Smith emailed heragain on January 16, 2018, saying, ‘Hoping to hearback from you soon. That contractexpires on Friday and it’s easyenough to havethem make anotherbut I would ratheravoid that ifpossible. Ifyou have otherconcerns, I would like to hearthem so we can workthrough them.” Phillips did not respond tothis email, butdid mark up the proposed purchase and sale agreement. Phillips did not obtain an owner’s title binder after receiving these emails. On February7, 2018, Phillips emailed Smith the following letter: Dear Chris: You asked me to think about it and after doing the numbers, and speaking with my accountantthis is what I came up with. When we discussed the agreementthreeyears agoyou said ifitwas not a win for both of us itwould not happen. Then you tore up the floor and made changes to the house without giving me receipts to take expenses off mytaxes. You saythatthe hotwatertank exploded, ifthat is so, my insurance would have covered the repairs except for a deductible. Still you didn’t give me a receipt or even tell me that it happened until November. When my brother died, I was required to get values on everything that he owned. That includedthe land in Kenmorewhich Iwould have paid forwith the proceeds from selling 8001. The land is in atrustthe trust had to be revalued to currentvalue on land is 2.5 million. Right now, tojust payforthe land, I must get over $1 million dollars for 8001 which is worth $1.1 million now. I need my Kenmore house repaired butthere will not be any money forthat once I payforthe land. After capital gains, paying off mortgage and excise taxes I will net about $435K[.}

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You told me you had invested in a caféso it seemed like you didn’t have funds to buy my house. As I said before, my 8001 house is now worth 1.1 million and someone iswilling to pay me for it. So, ifyou can getthe moneyto make this awin win for both of us. I would be happyto sell the house to you for 1.1 million. Or, you can take me forthe $400,000.00 and I would lose, and you would win. Jean Phillips later recalled the email containing this letterfrom Smith’s inbox. She did not have a specific buyer interested in purchasing the house. The Smiths engaged counsel, who wrote to Phillips on February 12, 2018 to again give notice of the Smiths’ intent to exercise the purchase option. She attached a purchase and sale agreementto thatemail that included a closing date of June 13, 2018, was contingent upon the Smiths obtaining financing, gave the Smithsthree monthsto applyfora“Conventional First” mortgage loan, and allowed the Smithsto assign their interest in the agreement. The letter indicated that“[w]e expectyou to promptlyexecute and return the purchase agreement.” That day, Phillips sent Rubstello a text message saying “I just lost 300[]thousand dollars because of your interference in my business when I was venerable [sic].” When Rubstello asked what she was talking about, Phillips responded, “My house is worth 1[]million. I have a buyer who will pay 1[]milI. [C]hris didn’tfollowthe lease but hejust sent a purchase option to buy and so he gets the 300 k equity and I lose 300k. You fail as a financial advisor.” Phillips’ attorney then contacted the Smiths’ attorney. On February 16, 2018, Phillips’ counsel stated, “[i]t appears from the communications from Mr. Smith that he exercised the option on November 15, 2017 and was not able to

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closewithin the 60 day period required undertheAgreement, therefore breaching the Agreement and waiving Buyers’ option right.” (Emphasis omitted). The email pointed outthe section ofthe agreement providing thatthe purchase money shall be paid no later than 60 days after the date ofthe notice. The Smiths’ attorney replied thatthe Smiths would be “readyto close within 60 days (on April l3th), as required bythe option agreement.” On March 1, 2018, Phillips sentthe Smiths a noticetoterminatetenancythat required them to vacate the housewithin 11 days. On March 12, 2018, the Smiths filed suit for breach of contract, seeking injunctive relief ordering enforcement of the purchase option and preventing Phillipsfrom evicting them, as well as damages and attorneyfees and costs. The parties filed cross motions forsummaryjudgment. The court granted the Smiths’ motion, denied Phillips’ motion, and ordered Phillipsto sell the housetothe Smiths pursuantto the provisions ofthe agreement. The court also awarded the Smiths reasonable costs and attorney fees in the amount of $77,052.41. The court did not enterfindings offact and conclusions of law.
ANALYSIS I. SummaryJudgment Phillips contends thatthe trial court erred in granting the Smiths’ motion for summaryjudgment and in denying her own motion for summaryjudgment. She argues that the Smiths forfeited their rights under the agreement by improperly exercising the option and failing to tenderthe purchase price, which relieved her of her obligation to perform. The Smiths argue that their notices were effective

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and they were able to purchase the house within the allotted time, but Phillips’ anticipatory breach ofthe agreement excused their nonperformance.
A. Standard of Review We reviewsummaryjudgmentorders de novo, engaging inthesame inquiry
as the trial court. Green v. A.M.P. (Am. Pharm. Co.), 136 Wn.2d 87, 94, 960 P.2d 912 (1998). We consider the evidence and all reasonable inferences from the evidence in the light most favorable to the nonmoving party. Keck v. Collins, 184 Wn.2d 358, 370, 357 P.3d 1080 (2015). Summaryjudgment is appropriatewhere there is no genuine issue as to any material fact and the moving party is entitled to ajudgment as a matterof law. CR 56(c); Keck, 184Wn.2d at 370. The moving party bears the burden to showthatthere is no genuine dispute as to any material fact. Green, 136Wn.2d at 100. “Onlywhen reasonable minds could reach butone conclusion on the evidence should the courtgrantsummaryjudgment.”Versuslaw, Inc. v. Stoel Rives, LLP, 127 Wn. App. 309, 319, 111 P.3d 866 (2005). The appellate court may affirm the trial court’sjudgment on any theory established by the pleadings and supported bythe evidence. Wendle v. Farrow, 102 Wn.2d 380, 382, 686 P.2d 480 (1984).
B. Exercise ofOption Phillips firstarguesthatthe Smithsfailed to properly exercise theiroption to purchase the house. The Washington Supreme Court has explained the general principles ofoption agreements as follows: An optionee may exercise an option by complying with the terms of acceptance set forth in the option agreement. If the optionee

-11-No. 78762-4-1112 unconditionally exercises the option in accordance with the terms of the contract, the optionor must sell the property in accordance with the terms of the option. If the optionee fails to exercise the option within the time specified or in the manner provided, all rights under the contract, along with any consideration given, are forfeited. Ifthe optionee exercisesthe option undertheterms ofthe contractand the optionor refuses to sell the property, the optionee may be entitled to specific performance ofthe contract. Theterms ofan option contract are to be strictly construed and, generally, time is ofthe essence. Pardee v. Jolly, 163 Wn.2d 558, 568, 182 P.3d 967 (2008) (citations omitted). The option contract allowed the Smiths to exercise theiroption to purchase iftheygave noticeto Phillips inwriting, via letteroremail, thattheywere exercising the option at least 60 days before the end ofthe agreement. A separate section of the agreement concerning transfer of title required the seller to “furnish the Buyers/Tenants with an owner’s title binder within forty five

. . . (45) days after receiving notice.” This requirement imposes an obligation on the selleronly. The section of the agreement concerning closing states that “[t]he deed shall be delivered and the purchase moneyshall be paid atthe lending institution’s, orother office, of Buyers’/Sellers’ choice, no laterthan sixty (60) days after notification to the Seller/Landlord ofthe Buyers’ITenants’ exercise ofthe purchase option.” This section imposes obligations on both the buyers and the seller. The agreement provides that “[t]ime is ofessence in this option to purchase agreement.” Timely, written notice was all that was required for the Smiths to properly exercise their option. The agreement did not require any specific words of acceptance or inclusion ofa closing date in the notice. The requirement that the parties close the sale within 60 days after notification was included in a separate section ofthe contract and was not a term ofacceptance ofthe option.

- 12-No. 78762-4-1/13 Although the October and November emails reference the potential sale, the December 21, 2017 email was the first explicit, unambiguous notice that the Smiths were exercising their option to purchase the house. This notice was delivered in writing, by email, more than 60 days before the end of the lease agreement. The Decemberemail complied with theterms ofacceptance specified in the agreement, triggering Phillips’ obligation to sell the propertyto the Smiths in accordance with the terms ofthe contract. The February email from the Smiths’ counsel also metthe requirements forexercise ofthe option. Phillips argues that the Smiths’ exercise of the option was improper because their proposed purchase and sale agreements sent in January and February imposed conditions on the sale that were not included in the original agreement. She contends that these conditions amounted to a rejection of the original offer contained in the agreement and extension of a counter-offer. This argument does not take into account that the acceptance had already occurred and the contract had already been formed as ofthe Decemberemail. Additionally, Phillips does not pointto any indication bythe Smithsthatthey would refuse to complete the sale if she did not agree to the purchase and sale agreement as written. Indeed, the record indicates the opposite. When Phillips objected to the closing date listed in the proposed purchase and sale agreement, the Smiths withdrew the proffered document and stated they would be ready to close within 60 days as required by the option agreement. The statements from the Smiths’ counsel thattheyexpected Phillips “to promptlyexecute and return the purchase agreement” do not indicate thattheywould notentertain any changesto

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the agreement, especially in light ofthe factthat Phillips had not been responsive to the Smiths’ prior attempts to finalize the sale. The Smiths gave timely, written notice to Phillips thattheywere exercising their option to purchase the house in December 2017. The parties were then obligated to completethetransaction in accordancewith theterms ofthe contract.3
C. Breach of Contract Phillips next contendsthatthe Smiths are notentitled to reliefbecause they did nottenderthe purchase priceas required bythe contract. The Smiths respond that they were relieved of their duty to perform because Phillips committed an anticipatory breach ofthe contract before the time for performance. Generally, when a contract requires performance by both parties, the party claiming thatthe other breached the contract by nonperformance “must establish
as a matter offactthe party’s own performance.” Wallace Real Estate lnv., Inc. v. Groves, 124 Wn.2d 881, 897, 881 P.2d 1010 (1994). In a contract forthe sale of real estate, “the payment ofthe purchase price and the delivering ofthe deed are concurrentacts.” ki. However, one party is not required to perform ifthe other has committed an anticipatory breach ofthe contract. CKP, Inc. v. GRS Const. Co., 63 Wn. App. 601, 620, 821 P.2d 63 (1991). An anticipatory breach occurswhen one ofthe partiesto a bilateral contract repudiatesthe contract priorto the time ofperformance. Wallace Real Estate, 124 Wn.2d at 898. “An intent to repudiate may be expressly asserted or

~ Phillips argues brieflythat the provision ofthe agreement stating that she would provide financing forthe sale is unenforceable. However, because the Smiths did notseek enforcementof the sellerfinancing provision, we decline to considerthis argument.

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circumstantiallymanifested byconduct.” CKP, 63Wn. App. at620. Aparty’s intent not to perform may not be implied from doubtful and indefinite statements that performance may or may not take place orfrom a negative attitude alone. Lovric
v. Dunatov, 18 Wn. App. 274, 282, 567 P.2d 678 (1977). “The law requires a positive statementoraction bythe promisor indicating distinctly and unequivocally that he either will not or cannot substantially perform any of his contractual obligations.” ki. “The question of anticipatory repudiation is one offact, and can be decided on summary judgment only ‘if, taking all evidence in the light most favorable to the non-moving party, reasonable minds can reach only one conclusion.” Versuslaw, 127 Wn. App. at 321 (quoting Alaska Pac. Trading Co. v. Eagon Forest Prods., Inc., 85 Wn. App. 354, 365, 933 P.2d 417 (1997)). “There is an implied covenant of good faith and fair dealing in every contract, a covenantor implied obligation byeach partyto cooperatewith the other
so that he may obtain the full benefit of performance.” Miller v. Othello Packers, Inc~ 67 Wn.2d 842, 844, 410 P.2d 33 (1966). When a party reneges on a deal without affording the otherpartyan opportunityto address an action believed to be
a material breach ofthe contract, they violate their duty to operate in good faith. See McEachren v. Sherwood & Roberts, Inc., 36 Wn. App. 576, 580, 675 P.2d 1266 (1984). “{W}hen an agreement makes time of the essence, fixes a termination date, and there is no conduct giving rise to estoppel or waiver, the agreement becomes legally defunct upon the stated termination date if performance is nottendered.” Local 112, I.B.E.W. Bldg. Ass’n v. Tomlinson Dan Mart, Inc., 3OWn. App. 139, 142, 632 P.2d 911 (1981). There is an exception to

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this rule “when the failure to meetthe time limit is the result ofone ofthe parties’ bad faith or lackofdue diligence.” ki. Phillips contendsthatthe Smiths gavefive effective notices oftheir intentto exercise the option, beginning with the October 28, 2017 email, and the 60-day period to tender the purchase price had expired before any communication between the attorneys took place. As noted above, the December 2017 email constituted thefirstexplicit, unequivocal noticethatthe Smithswere exercising the option. Phillips admitted that she did not interpret the October and November emails as exercise of the option. Even if those earlier communications were sufficient to constitute acceptance, Phillips would not be entitled to claim that the 60-day period for closing expired when she made no response to the Smiths’ notice and allowed the period to pass without cooperating to effectuate the completion ofthe sale. The Smiths contend that Phillips’ “complete refusal to cooperate with the Smiths since their notice and herattemptto bullythem into changing the terms of the Option Agreement,” along with her attorney’s assertion that they had waived their option right in his February 16, 2018 email, “indicated distinctly and unequivocallythat shewould not be closing the sale on February 19, 2018.” Viewing the evidence in the light most favorable to Phillips, her lack of response tothe Smiths’ exercise ofthe option and her February7,2018 letterwere not sufficiently definite to indicate her intent to repudiate the contract. Her attorney’s email stating his beliefthat the Smiths had breached the contract and waived their option right and proposing changes to the purchase and sale

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agreement, however, manifested a clear intent that performance of the contract would not take place on February 19, 2018. The subsequent notice terminating the Smiths’ tenancy and requiring them to vacatethe premises manifested a clear intent to repudiate the contract in its entirety. Even viewed in the light most favorable to the non-moving party, the evidence indicates that Phillips repudiated the contract and the Smiths were excused from performance.
II. Award ofCosts and Attorney Fees Phillips contends that the trial court erred in awarding the Smiths $77,052.41 for “reasonable costs and attorney fees incurred in this litigation” because this amount included fees and costs related to wasteful and duplicative efforts. She also contends that the trial court erred in failing to enterfindings of fact and conclusions of law concerning the award. The Smiths argue that Phillips has not demonstrated that the award was manifestly unreasonable, but they do not respond to the argument regarding entry offindings. In Washington, trial courts may award attorney fees when authorized by a private agreement, a statute, ora recognized ground ofequity. Fisher Prop’s, Inc.
v. Arden-Mayfair, Inc., 106 Wn.2d 826, 849—50, 726 P.2d 8 (1986). Whether a statute or contract provision authorizes an award of attorney fees is a question of lawthat we review de novo. Deep Water Brewing, LLC v. Fairway Res. Ltd., 152 Wn. App. 229, 277, 215 P.3d 990 (2009). We review the reasonableness of an award forabuse ofdiscretion. Rettkowski v. Dep’tof Ecology, 128Wn.2d 508, 519, 910 P.2d 462 (1996). “The trial courtabuses its discretion onlywhen the exercise of its discretion is manifestly unreasonable.”j~

- 17-No. 78762-4-1/18 Generally, Washington follows the lodestar method of calculating reasonable attorney fees. Mahler v. Szucs, 135 Wn.2d 398, 433, 957 P.2d 632 (1998), overruled on othergrounds by Matsyukv. State Farm Fire & Cas. Co., 173 Wn.2d 643, 272 P.3d 802 (2012). Underthis system, thetrial courtdeterminesthe number of hours reasonably expended in the litigation from documentation ofthe work performed and the category of attorneywho performed the work. Bowers v. TransamericaTitle Ins. Co., 100Wn.2d 581, 597, 675 P.2d 193 (1983). “The court must limit the lodestar to hours reasonably expended, and should therefore discount hours spent on unsuccessful claims, duplicated effort, or otherwise unproductive time.”j.ç[~ The total numberof hours reasonablyexpended multiplied by the reasonable hourly rate of compensation for each attorney involved yields the basic lodestarfee, which the court maythen adjustto reflecta numberofother factors. Id. Duetothe discretionary nature ofthis calculation, when atrial court awards attorney fees, “it must supply findings offact and conclusions of law sufficient to permit a reviewing court to determine why the trial court awarded the amount in question.” SentinelC3, Inc. v. Hunt, 181 Wn.2d 127, 144, 331 P.3d 40 (2014). Although “[fleedecisions are entrusted tothe discretion ofthetrial court,” appellate courts “exercise [their] supervisory role to ensure that discretion is exercised on articulable grounds.” Mahler, 135 Wn.2d at435. TheWashington Supreme Court held that a trial court “erred byfailing to explain the amount of its award” when it did not enter any findings offact or conclusions of lawjustifying the attorney fee

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award, but onlyentered a two-pagejudgment summary listing the awards forfees and costs. SentinelC3, 181 Wn.2d at 145. Here, paragraph 26 of the option lease provides that, “[un the event this agreement is placed in the hands of an attorney for enforcement[,j the prevailing party shall be entitled to recover court costs and attorney fees.” The Smiths submitted documentation of the legal work performed in litigating the case and requested attorneyfees and costs of$84,344.41. Phillips objected tothis amount, arguing thatthe Smiths had not proven the reasonableness ofthe requested fees, that the request included duplicative or unnecessary items, and that the explanation oftime spentwas insufficientlyspecific. She requested that anyfees imposed be reduced by at least $17,208.50, for a maximum fee award of $67,135.91. The order granting summaryjudgment for the Smiths and denying summaryjudgmentfor Phillips statesthat“it is hereby.

. . ORDERED, ADJUDGED AND DECREED that Smith is entitled to an award of his reasonable costs and attorney fees incurred in this litigation in the amount of $77,052.41 .“ Ajudgment summary was also entered listing the same amount due with no further explanation. The courtdid notenterseparatefindings offactorconclusions oflaw regarding the award ofattorneyfees and costs. Although the court was correct in concluding that the option lease entitles the Smithsto an award ofcourtcosts and attorneyfees asthe prevailing party, the court erred in failing to enterfindings offact and conclusions of law explaining the award. Absent these findings, we are unable to assess whether the court exercised its discretion appropriately, especially because the award differed from

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the requests of the parties. In this instance, remand for entry of findings of fact and conclusions of law regarding the award of attorney fees and costs is appropriate.
Ill. Damages In their cross-appeal, the Smiths contend that the trial court erred in declining to award them reimbursementof rent paid to Phillips during the litigation. The Smiths argue that they are entitled to reimbursement of the rent payments madesinceApril 2018, because theywould not have been required to makethese payments to Phillips if the sale of the house had taken place on April 13, 2018. Phillips argues in response that the Smiths have not proven their damages with reasonable certainty because they have not shown what their expenses would have been after the sale ofthe house and they are not entitled to be placed in a better position than theywould have been ifthe contract had not been broken. Generally, the injured party in a breach of contract action is entitled to
recover all damages that accrue naturally from the breach and to be put into as good a pecuniary position as ifthe contract had been performed. Eastlake Const. Co. v. Hess, 102 Wn.2d 30, 39, 686 P.2d 465 (1984). “He is entitled to the benefit of his bargain, i.e., whatever net gain he would have made underthe contract[,]” but is not “entitled to more than he would have received had the contract been performed.” Platts v. Arney, 50 Wn.2d 42, 46, 309 P.2d 372 (1957) (emphasis omitted). Ifthe breach relieves the injured partyofduties underthe contractwhich would have required them to spend money, the amount of those expenditures should be deducted from amount recovered. k~.

-20-No. 78762-4-1/21 Here, ifthe contract had been performed and the parties had completed the sale ofthe house, the Smiths would not have had to pay rent to Phillips after the close of the sale. Although the contract provided for the Smiths’ repairs, maintenances, and improvements to be credited toward the purchase price, as well as any payments above the monthly rent, it did not provide for the rent payments themselves to be credited toward the sale price. The rent payments afterthe April 13, 2018 closing date specified in the final notice ofthe exercise of the option accrued naturallyfrom Phillips’ anticipatory breach ofthe contract. The Smiths are entitled to recover these damages, less any expenditures that would have been required butforthe breach.
IV. Attorney Fees on Appeal Both parties contend that they are entitled to attorney fees on appeal pursuantto RAP 18.1 and paragraph 26 ofthe option lease. “Reasonable attorney fees are recoverable on appeal ifallowed bystatute, rule, orcontract” and properly requested under RAP 18.1. In re Guardianship ofWells, 150 Wn. App. 491, 503, 208 P.3d 1126 (2009). The option lease entitles the prevailing partyto an award of attorneyfees and costs. Both parties include a section requesting fees in their opening briefs to this court. As the prevailing party, the Smiths are entitled to an award of attorney fees and costs on appeal in an amount to be determined by a commissionerofthis court in accordance with RAP 18.1. Remanded for an award ofdamages for rent paid as a result ofthe breach and for entry of findings of fact and conclusions of law regarding the award of attorneyfees and costs.

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Affirmed in part, remanded in part. 

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A 4 WE CONCUR: 

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A 

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