Court Opinion

ID: 2649568
Source: CourtListenerOpinion
Date Created: 2014-01-16 18:37:27.66106+00
Date Added: 2024-06-11T12:55:40.029647
License: Public Domain

FILED 

                                                                          JAN 16,2014 

                                                                 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 

KEITH MILLER, a married individual,           )         No. 31445-6-111
                                              )
                     Appellant,               )
                                              )
              v.                              )
                                              )
PAUL M. WOLFF CO., a foreign                  )         PUBLISHED OPINION
corporation; and CURTIS BEESLEY, an           )
individual,                                   )
                                              )
                     Respondents.             )

       BROWN, J. - Paul M. Wolff Company (PMW) appeals the trial court's judgment

granted to Keith Miller following Mr. Miller's trial de novo following mandatory arbitration.

Mr. Miller worked for PMW as a commissioned sales representative. After he resigned

and unsuccessfully offered to complete unfinished jobs, he sued PMWand its president,

Curtis Beesley (collectively PMW) for unpaid commissions. An arbitrator sided with Mr.

Miller and awarded him wage damages, but denied attorney fees for unpaid wages.

Unsatisfied, Mr. Miller pursued a trial de novo where he was awarded slightly less wage

damages, but received his requested attorney fees. PMW contends the court erred in

finding Mr. Miller was entitled to commissions under the procuring cause doctrine, in

concluding Mr. Miller improved his position at trial, and in awarding attorney fees under

RCW 49.48.030. We find no error, and affirm.
No. 31445-6-111
Miller v. Paul M. Wolff Co.

                                          FACTS

       The facts are drawn largely from the trial court's unchallenged findings of fact.

PMW is a subcontractor, specializing in concrete finishing services. It employs field

sales representatives who are responsible for facilitating and overseeing projects within

their territories. If the project is awarded to PMW, the field sales representative is

responsible for managing the company's performance under the contract through

completion. Managing PMW's performance through completion of the project is

considered the final step in the sales representative's performance. PMW has

historically paid its sales representatives a 15 percent commission on projects that meet

a 35 percent gross profit threshold. Field sales representatives are paid commissions

after PMW completes its work and receives payment.

       PMW employed Mr. Miller as a field sales representative for several years until

January 9, 2009. Then, Mr. Miller resigned to operate his own concrete company, Final

Concrete, LLC. PMW claims the purpose of Final Concrete was to compete with PMW;

however, PMW's unlawful competition claims were dismissed in summary judgment and

the one issue appealed was rejected by Division Two of this court in an unpublished

opinion. See Miller v. Paul M. Wolff Co., noted at 165 Wn. App. 1020,2011 WL
6916485, at *1.

       When he resigned, Mr. Miller unsuccessfully offered to complete his unfinished

projects for PMW. The parties' employment contract does not address whether, and to

what extent, post-termination commissions would be paid. On January 12, 2009, Mr.

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No. 31445-6-111
Miller v. Paul M. Wolff Co.

Miller sought commissions on at least 14 at-issue projects listed in the court's findings of

fact. PMW assigned other employees to finish these projects, which took several

months to complete after Mr. Miller's resignation. The 35 percent gross profit threshold

was met in 10 of the unfinished projects. PMW paid $25,862.87 to another field sales

representative in commissions on eight of these projects. Mr. Miller had unsuccessfully

requested $27,036.21 for these projects when he sued PMW, pal11y requesting

equitable relief under the procuring cause doctrine. The parties proceeded to

mandatory arbitration.

       The arbitrator concluded Mr. Miller was entitled to recovery under the procuring

cause doctrine and awarded him $22,802.84, but denied his request for attorney fees

and costs under RCW 49.48.030. The arbitrator concluded the award flowed from an

equitable remedy and was not for wages and salary owed. Mr. Miller requested a trial

de novo.

       After trial, the court awarded Mr. Miller $21,628.97 for his procuring cause

doctrine claim, $897.95 in costs, and $74,662.00 in attorney fees. The court concluded

Mr. Miller improved his position on trial de novo because he was awarded attorney fees

at trial, but the court noted "even if only the fees incurred through arbitration, but not

those incurred thereafter, are used in making the comparison ... the difference

between the two actual damage awards is so small (Le., $1,173.87)." Clerk's Papers

(CP) at 494. PMW appealed.

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No. 31445-6-111 

Miller v. Paul M. Wolff Co. 

                                        ANALYSIS

                                   A. Procuring Cause

       The issue is whether the trial court erred in concluding Mr. Miller was entitled to

damages under the procuring cause doctrine. PMW contends Mr. Miller's failure to

oversee the completion of the projects in question and his unclean hands preclude a

recovery in equity.

       Whether a sales person's activities were the procuring cause of the sale is fact

specific. Zelensky v. Viking Equip. Co., 70 Wn.2d 78,91,422 P.2d 293 (1966). We

review a conclusion of law based on findings of fact to determine whether the trial

court's 'findings are supported by substantial evidence, and if so, whether those findings

support the conclusions of law. Cantu   v. Dep't of Labor & Indus., 168 Wn. App. 14,21,
277 P.3d 685 (2012). Substantial evidence is evidence of sufficient quantity to

persuade a fair-minded, rational person of the truth of the declared premise. Bering    v.
SHARE, 106 Wash. 2d 212, 220, 721 P.2d 918 (1986).

       "The procuring cause rule states that when a party is employed to procure a

purchaser ... to whom a sale is eventually made, he is entitled to a commission .. '. if

he was the procuring cause of the sale." Willis v. Champlain Cable Corp., 109 Wn.2d

747,754,748 P.2d 621 (1998). A broker is the procuring cause or agent when he or

she sets in motion the series of events culminating in a sale. Roger Crane &Assoc.,

Inc. v. Felice, 74 Wash. App. 769, 776, 875 P.2d 705 (1994) (citing Bonanza Real Estate,

Inc. v. CrOUCh, 10 Wash. App. 380, 385, 517 P.2d 1371 (1974». When an employment

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No. 31445-6-111
Miller v. Paul M. Wolff Co.

relationship ends, the employer "cannot terminate an agent's right to compensation if he

or she caused the sale." Syputa v. Druck Inc., 90 Wash. App. 638, 645,954 P.2d 279

(1998).

       The procuring cause doctrine "is essentially an equitable doctrine." Id. at 649. It

is based upon the equitable maxim that the principal shall not be pennitted to enrich
           .Il

himself at the expense of the agent or broker, whose services have inured to his

benefit.'" Feeley v. Mullikin, 44 Wash. 2d 680, 687, 269 P.2d 828 (1954) (quoting Grace

Realty Co. v. Peytavin Planting Co., 156 La. 93, 100 So. 62 (1924». Trial courts have

broad discretion to fashion an equitable remecty, reviewable for abuse of discretion.

Ehsani v. McCullough Family P'ship, 160 Wash. 2d 586, 589,159 P.3d 407 (2007).

       If a written contract expressly provides "how commissions will be awarded when

an employee or agent is terminated," the procuring cause rule is inapplicable. Willis,
109 Wash. 2d at 755. In the absence of a contractual provision specifying otherwise, the

procuring cause doctrine acts as a gap filler. Indus. Representatives, Inc. v. CP Clare

Corp.,74 F.3d 128 (7th Cir. 1996). Here, in finding of fact 3, which is unchallenged and

therefore a verity on appeal, 1 the court found that the parties' contract does not specify

whether commissions would be paid for projects that were still in progress when

employmerit ended. Thus, the procuring cause doctrine applies.

       PMW argues to prove procuring cause in this situation, Mr. Miller must show he

completed five steps that begins with securing the contract and ends with final payment.

       1   Jensen   V.   Lake Jane Estates, 165 Wash. App. 100, 105,267 P.3d 435 (2011).

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No. 31445-6-111
Miller v. Paul M. Wolff Co.

          But, "[t]he standard for the procuring cause doctrine is activity that sets in motion

the chain of events or negotiations culminating in a sale." Syputa, 90 Wash. App. at 646.

"Thus, an agent receives commissions on sales when the sales 'resulted from the

agent's efforts.'" Id. (quoting Willis, 109 Wn.2d at 754). In Syputa, a former sales agent

sued an aerospace firm to recover post termination commissions. 90 Wash. App. at 638.

The trial court dismissed the claim in summary judgment. Id. Division One of this court

reversed and remanded, holding issues of material fact existed as to whether the sales

agent was the procuring cause of the company's contracts with an airplane

manufacturer. Id. at 649-50.

          Here, based on the unchallenged findings of fact, Mr. Miller "located the at-issue

jobs, submitted bids thereon, and secured binding contracts with the customers." CP at

443 (finding offact 10). Ten of the 14 at-issue jobs met the 35 percent gross profit

threshold. Commissions on these 10 jobs totaled approximately $27,000. The trial

court discounted the total commissions by 20 percent when making its award to Mr.

Miller.

          PMW argues the procuring cause doctrine does not apply when an employee

resigns. While Washington courts have not specifically addressed this issue, courts in

Illinois and Florida have allowed damages under the procuring cause doctrine for

employees who have resigned from their sales positions. See Scheduling Corp. of Am.

v. MasseI/o, 456 N.E.2d 298, 305 (III. 1983); United Farm Agency of Fla., Inc. v. DKLS,
Inc., 560 SO.2d 1212, 1213 (Fla. 1990). Because Washington courts have not

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No. 31445-6-111
Miller v. Paul M. Wolff Co.

expressly required an employee to be terminated to be eligible for relief under the

procuring cause doctrine and because the Illinois and Florida cases are persuasive, we

hold that resignation is not a precluding factor for recovery under the procuring cause

doctrine in Washington.

       PMW next argues recovery is precluded because Mr. Miller has unclean hands.

It is well settled that a party with unclean hands cannot recover in equity. J.L. Cooper &

Co. v. Anchor Sec. Co., 9 Wn.2d 45,73,113 P.2d 845 (1941). PMW complains Mr.

Miller'S conduct in forming another concrete company was unjust and in bad faith, but

PMW's wrongful competition claims were summarily dismissed and the one issue

appealed was rejected by Division Two of this court. See Miller, 2011 WL 6916485, at

*1.

       In sum, based on the Syputa and Willis standard, Mr. Miller was the procuring

cause of the at-issue PMW contracts. Thus, the trial court had tenable grounds to apply

the procuring cause doctrine in fashioning an equitable remedy. Therefore, we

conclude the trial court did not abuse its discretion.

                                     B. Attorney Fees

       The issue is whether the trial court erred in denying PMW's request for attorney

fees, but granting Mr. Miller's request after trial. PMW contends fees were unwarranted

because Mr. Miller did not improve his position on trial de novo. PMW argues RCW

49.48.030 does not provide a basis for Mr. Miller's recovery.

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No. 31445-6-111
Miller v. Paul M. Wolff Co.

       We review the trial court's application of court rules and statutes authorizing

attorney fee awards de novo as a question of law. Niccum v. Enquist, 175 Wash. 2d 441,

446,286 P.3d 966 (2012). In Washington, a party may recover attorney fees solely

when authorized by statute, a recognized ground of equity, or party agreement. Id.

       RCW 7.06.060(1) and SUPERIOR COURT MANDATORY ARBITRATION RULES (MAR)

7.3 direct courts to assess costs and reasonable attorney fees "against a party who

appeals the [arbitrator's] award and fails to improve" the party's position at the trial de

novo. RCW 7.06.060(1) provides, "The superior court shall assess costs and

reasonable attorneys' fees against a party who appeals the award and fails to improve

his or her position on the trial de novo." Likewise, MAR 7.3 states, "The court shall

assess costs and reasonable attorney fees against a party who appeals the award and

fails to improve the party's position on the trial de novo." "RCW 7.06.060(1) and MAR

7.3's purposes are to ease court congestion, encourage settlement, and discourage

meritless appeals." Huntington v. Mueller, 175 Wash. App. 77, 81.302 P.3d 530 (2013)

(citing Niccum. 175 Wash. 2d at 451).

       Here, the trial court's award of wage damages was less than the arbitrator's

award, but the court awarded Mr. Miller attorney fees and costs for a total award

substantially more than the arbitration award. PMW contends attorney fees cannot be

considered in assessing an improvement in position. We disagree.

       In Mei Tran v. Yu Han Yu, 118 Wash. App. 607, 612, 75 P.3d 970 (2003). the court

considered whether a party appealing an arbitration award failed to improve her position

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     No. 31445-6-111 

     Miller v. Paul M. Wolff Co. 

     at a trial de novo when the compensatory damages awarded at trial were less than

     those awarded at arbitration, but the judgment was higher because of the court's award

     of statutory costs and CR 37 sanctions. The court held that a court should "compare

     cornparables" to determine whether a party failed to improve its position. Mei Tran, 118
Wash. App. at 612. Accordingly, a court would compare the compensatory damages

     awarded by the arbitrator with the compensatory damages awarded at trial. Id. The

     court would not include awards for statutory costs and sanctions because those costs

     were not before the arbitrator and were not "comparable" to the compensatory damages

     awarded by the arbitrator. Id. at 615-16. Indeed, the court noted, a party would

     invariably improve his or her position if costs such as "attomey fees" and interest were

     taken into account. Id. at 612.

            In Haley v. Highland, 142 Wash. 2d 135, 154,12 P.3d 119 (2000), our Supreme

     Court stated, "We generally agree with the Court of Appeals' view that only

     comparables are to be compared," but the court found it unnecessary in Haley to adopt

     a bright-line rule that "attorney fee awards have no place in making an MAR 7.3

     determination." Id. (emphasis added).

            Later, in Niccum, 175 Wash. 2d at 448, our Supreme Court clarified, "[T]his court

     has not adopted the doctrine of comparing com parables. " In Niccum, the issue was

     whether costs could be considered in comparing a jury award (which included costs)

     with an offer of compromise (which did not). The court found it would be unfair to

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\

 No. 31445-6-111
 Miller v. Paul M. Wolff Co.

 compare the two because a party is not entitled to costs in connection with an offer of

 compromise under RCW 7.06.060(1). Id. at 449.

        If we were to compare solely the compensatory damages in this case, Mr. Miller

 did not improve his position on trial de novo. But, Mr. Miller was awarded attorney fees

 on trial de novo after the arbitrator denied attorney fees based on the exact argument

 that was successful at trial. The situation may be different if attorney fees were not

 requested at arbitration. Indeed, to truly compare the comparables, the success of

. aggregate claims asserted should be considered in deciding if Mr. Miller "improve[d] ...

 [his] position." MAR 7.3; RCW 7.06.060(1).

        Given our discussion so far, we conclude the trial court properly concluded Mr.

 Miller improved his position and deny PMW's request for attorney fees.

        Next, PMW argues RCW 49.48.030 applies to wages not damages in equity. As

 previously disclJssed, we review a trial court's basis for awarding attorney fees de novo.

 Niccum, 175 Wash. 2d at 446.

        RCW 49.48.030 provides when "any person is successful in recovering judgment

 for wages or salary owed to him or her, reasonable attorney's fees ... shall be

 assessed against said employer or former employer." RCW 49.48.030 is a remedial

 statute we must liberally construe in favor of the employee. Int'l Ass'n of Fire Fighters,

 Local 46 v. City of Everett, 146 Wash. 2d 29, 34,42 P.3d 1265 (2002). While RCW

 49.48.030 uses the term "wages," Division One of this court has held that wages include

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No. 31445-6-111
Miller v. Paul M. Wolff Co.

commissions. Oautel v. Heritage Home Ctr., Inc., 89 Wash. App. 148, 153,948 P.2d 397

(1997).

       Equitable wage recoveries do not preclude an award of attorney fees under RCW

49.48.030, contrary to PMW's arguments. The legislature did not place that limit in

RCW 49.48.030. Our primary goal on review is to determine and give effect to the

legislature's intent and purpose in creating the statute. Woods v. Kittitas County, 162
Wash. 2d 597, 607,174 P.3d 25 (2007). If the statute's meaning is plain on its face, then

we must give effect to that plain meaning as an expression of legislative intent. Id. We

give meaning to every word and interpret the statute as written. Enter. Leasing, Inc. v.

City of Tacoma Fin. Oep't, 139 Wash. 2d 546, 552, 988 P.2d 961 (1999). RCW 49.48.030

plainly states if an employee recovers a judgment for wages owing then attorney fees

shall be assessed against the employer. Interpreting the statute as written, the trial

court did not err in awarding attorney fees to Mr. Miller.

       Lastly, PMW requests attorney fees on appeal under MAR 7.3 and RCW

7.06.060(1). Both the rule and statute allow recovery on appeal if fees were justified

below. Yoon v. Keeling, 91 Wash. App. 302, 306, 956 P.2d 1116 (1998). Here, however,

no basis exists for an attorney fee award to PMW below and, thus, no basis exists on

appeal.

       Mr. Miller requests fees for this appeal under RCW 49.48.030. In McGinnity v.

AutoNation, Inc., 149 Wn. App. 277,286,202 P.3d 1009 (2009), this court held, "a party

that is awarded fees in arbitration under RCW 49.48.030 may also recover fees for all

                                             11 

1
     No. 31445-6-111 

l    Miller v. Paul M. Wolff Co. 

I	
I    superior court and appellate court proceedings in the same matter." Mr. Miller is entitled

     to his fees upon compliance with RAP 18.1. As the prevailing party, he is also entitled

     to costs under RAP 14.2, subject to compliance with RAP 14.4.

            Affirmed.

                                                       Brown, J.
     WE CONCUR:

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