Court Opinion

ID: 4020756
Source: CourtListenerOpinion
Date Created: 2016-08-02 16:16:42.118702+00
Date Added: 2024-06-11T14:30:22.351916
License: Public Domain

FILED
                                                                AUGUST 2, 2016
                                                          In the Office of the Clerk of Court
                                                         WA State Court of Appeals, Division Ill

         IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
                            DIVISION THREE

ROIL ENERGY, LLC., a Nevada Limited          )
Liability Company, by and through the        )    No. 32577-6-111
derivative claim of ALLAN HOLMS, a           )
married man and a Washington Resident,       )
                                             )
                     Appellants,             )
                                             )    UNPUBLISHED OPINION
       v.                                    )
                                             )
JOSEPH ("JAY") EDINGTON and JANE )
DOE EDINGTON, husband and wife and )
residents of Spokane County, Washington; )
TOLL RESERVE CONSORTIUM INC.,                )
a Nevada Corporation recently renamed as )
HOLMS ENERGY DEVELOPMENT                     )
CORPORATION, a Nevada Corporation; )
VAL AND MARI HOLMS, husband and              )
wife, and the marital community              )
comprised thereof, residents of the State of )
Montana; HOLMS ENERGY, LLC, a                )
Nevada Limited Liability Company, and        )
BAKKEN RESOURCES, INC., a Nevada )
Corporation.                                 )
                                             )
                     Respondents.            )

      FEARING, C.J. -This appeal pits two half-brothers, Allan Holms and Val Holms,
No. 32577-6-111
Roil Energy v. Edington

against one another. The dispute arises from discussions between the two brothers

concerning development of mineral rights owned by Val. The trial court held that the

two never formed an enforceable agreement, but found that Val committed fraud, breach

of fiduciary duty, conspiracy, and oppression of Allan. The trial court denied Allan an

award of damages because of lack of proof of damages. We affirm the dismissal of the

contract claim, but reverse the tort judgments because an element of each tort cause of

action is proof of damages.

                                          FACTS

       The business dispute on appeal lies between Allan Holms and Val Holms, half-

brothers who share the same father. Allan resides in Spokane, and Val lives in Montana.

When Allan and Val's father died, each inherited mineral interests located in McKenzie

County, North Dakota. The interests of each brother lie on separate parcels, and Allan's

mineral interests are not involved in this appeal.

       Val Holms' mineral interests are the subject of this appeal. Val's interests lie

within the North Dakota Bakken Oil Fields, scene of recent oil production. Val shared

his mineral interests with his sister Evenette Greenfield and a cousin, with each holding a

one-third interest. The interest came through Val's mother, who was not the mother of

Allan. Presumably the interests are undivided, but the record does not show such. In

2009, Val Holms transferred his mineral interests to Toll Reserve Consortium, Inc., a

Nevada corporation.solely owned by Val.

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     No. 32577-6-111
     Roil Energy v. Edington

             Sometime in late 2009, Allan Holms met Jay Edington at a social event. Edington

     is a Spokane financial consultant involved in mergers and acquisitions of public

     companies. Edington suggested to Allan that the two work together on an investment

     scheme involving public "shell" companies. Contemporaneous to Edington's proposal to

     Allan Holms, Val Holms asked brother Allan for an $80,000 loan to open an auto body

     shop. During a 2009 Christmas visit in Spokane, Allan declined the loan request and

     suggested to Val that the two develop Val's North Dakota mineral interests instead.

             Allan Holms introduced Val to Jay Edington during the Christmas holiday.

II
     During the initial meeting and in other meetings in January and February 2010, Edington

     proposed the utilization of a reverse merger to raise capital for development of Val's

     mineral interests. This court remains uneducated as to what capital the three needed to

     raise to exploit the mineral interests held by Val Holms, why Val would not reap more

     income by leasing his mineral rights to an oil company, and how Val's one-third interest

     could be developed without participation of the owners of the remaining two-thirds

     interest.

            The reverse merger sought by Jay Edington entailed placing Val Holms' North

     Dakota mineral interests in a private entity owned by Edington and the Holms, the three

     acquiring a controlling interest in the shares and management of a public shell company,

     and then transferring the mineral interests of the private entity to the public company in

     exchange for the public company's shares. Edington explained that the three could more

                                                  3
No. 32577-6-III
Roil Energy v. Edington

easily raise capital by selling the shares of an established, but nonoperating, publicly-

traded company. When the private company acquired a majority interest in the public

company's stock during the asset transfer, the private company would become the

controlling entity and merge into the public company.

       According to Jay Edington, the reverse merger, as compared to forming a new

public company, lessened the expense and decreased the time needed to raise capital.

Creating a new public corporation requires filing with the Securities and Exchange

Commission and completing extensive paperwork before the selling of shares

commences. Edington assured Allan and Val Holms that a reverse merger would also

permit transfer of the mineral rights for shares of a company free of taxation.

       Allan and Val Holms respectively claim that each did not understand the reverse

merger process recommended by Jay Edington. Allan and Val's imperfect understanding

extended to knowing the three would form a limited liability company with Allan

contributing initial funding, Val providing his mineral interests, and Edington providing

the labor and expertise to procure a public shell company for the reverse merger and

marketing the shell company's shares. Allan agreed to supply seed capital of from

$200,000 to $250,000 and to raise two million dollars in private equity from investors

who would buy shares in the public corporation.

       On February 1, 2010, Jay Edington chose APD Antiquities, Inc. (APD) as the

target public shell corporation for the reverse merger. Edington was the founder of and a

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    No. 32577-6-III
    Roil Energy v. Edington
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    consultant to APD. He advised Allan Holms to purchase 2.5 million shares of APD

    common stock for $0.02 per share. On February 1, Edington also sent a template to

    Allan and Val for reverse mergers and asset purchase agreements.

           The trio did not execute any written agreement, but Jay Edington outlined each

    party's responsibilities in a timeline chart that he presented to Allan and Val Holms on

    February 13, 2010. The timeline listed that Allan would submit $200,000 to the limited

    liability company by March 1, 2010, and Val would assign his North Dakota mineral

    interests to the company and record the transfer by March 8, 2010.

           According to Val Holms, Allan, Edington, and he discussed numerous ownership

    percentages for the business venture. Val Holms consistently told others that he intended

    to hold the controlling interest in both the limited liability company and APD Antiquities

    because the value of his mineral interests exceeded the value of Allan's and Jay

    Edington's contributions. According to Edington, the division of ownership shares was

    never finalized. Allan claims the parties agreed to a 40/40/20 split in ownership.

          By early February 2010, Jay Edington commenced surreptitiously e-mailing Val

    Holms and expressing unhappiness in Allan's participation in the venture. Val's sister,

    Evenette Greenfield, gained copies of these secretive e-mails and later supplied copies to

    Allan. In a February 3, 2010 e-mail to Val, Edington expressed irritation at Allan's greed

    and his desire to act as "'Big Daddy"' while Val and Edington performed the work. Ex.

    82 at 1. Edington expressed worry that Allan intended to keep the equity from the APD

                                                5
    No. 32577-6-111
    Roil Energy v. Edington

    Antiquities shares he would purchase for the three or share the shares with Val without

    providing any shares to Edington. Edington rhetorically asked why he would invest his

    time, energy, and expertise to reap Allan a fortune. Edington desired a three-way split of

    the APD Antiquities shares.

           Jay Edington recommended to Val and Allan Holms that the three men form their

J   limited liability company, as the private entity for the reverse merger, in Nevada. On
!

I   February 19, 2010, the threesome formed Roil Energy, LLC, a Nevada limited liability

!   company that designated Edington's daughter, a Nevada resident, as the registered agent.

    The formation document listed Allan, Val, and Edington as managing members of Roil

    Energy.

          Jay Edington's reverse merger plan contemplated that he, Val Holms, and Allan

    Holms would not be the only members of Roil Energy, LLC. Instead an additional

    member or members would participate to the extent of an undetermined percentage

    ownership interest in the limited liability company. Neither Val nor Allan Holms knew

    the identity of the additional member or members, and no percentage membership

    interest was ever assigned to those unidentified members.

          On February 19, 2010, the same day as the formation of Roil Energy, Allan and

    Val Holms rendezvoused in Butte, Montana. Val brought copies of the two mineral

    deeds and told Allan the originals had been mailed to North Dakota for filing. The deeds

    had not been mailed or recorded and were never recorded. The mineral deeds purported

                                                6
No. 32577-6-111
Roil Energy v. Edington

to transfer Val's mineral rights, through his company, Toll Reserve Consortium, Inc., to

Roil Energy for $10 in consideration. Val Holms did not intend to record the deeds until

Allan Holms contributed the $200,000 and performed other commitments. According to

Jay Edington, the reverse merger plan anticipated the transfer of the mineral interests

after the closing of an agreement, raising of needed capital, and a private stock

placement. At the Butte meeting, Val handed copies of each deed to Allan.

       Tom Greenfield, son of Evenette Greenfield and nephew of both Allan Holms and

Val Holms, attended the meeting between Allan and Val Holms on February 19, 2010.

Based on the discussion, Tom Greenfield concluded that Val would hold a majority

interest in the venture.

       During the brothers' Butte meeting, Allan delivered a check for $10,000 to Val to

open a Roil Energy company bank account. Val later opened the account, deposited the

check, and used the deposited funds to pay company bills, including his monthly salary of

$6,000.

       APD Antiquities, the shell target corporation, needed funds from investors to

purchase the mineral interests from the limited liability company formed by Allan and

Val Holms and Jay Edington. As a prelude to seeking investors for APD Antiquities,

APD needed to acquire the right to purchase the mineral interests through an option to

purchase agreement, so that potential investors knew that such a right existed despite the

transfer of the interests occurring later. No option to purchase agreement was ever

                                             7
No. 32577-6-III
Roil Energy v. Edington

drafted.

       According to Jay Edington, a valuation of Val Holms' mineral interests was

needed to effectuate the reverse merger. Presumably the potential investors in APD

Antiquities would wish to know the value of the asset being transferred to the

corporation. The parties sought a valuation from Boyd Hennimen, a petroleum geologist

and friend of Allan Holms. Hennimen refused to prepare a valuation of the mineral

interests because, for at least two reasons, a valuation would be difficult. No drilling had

occurred on the subject land, and Val gained his mineral interests through a gift.

       Jay Edington continued to express, to Val Holms, displeasure with Allan. In late

February 2010, Edington mentioned frustration over Allan's controlling style, delay in

forwarding names of nominees for the APD Antiquities stock transfers, and tardiness in

transferring funds for the purchases. By late February, Val concluded that his brother

intended to gain control of his mineral interests.

       On February 23, 2010, Jay Edington sent Allan and Val Holms a draft letter of

intent from APD Antiquities agreeing to an asset purchase agreement with Roil Energy

and a draft executive summary for Bakken Resources, Inc., a new public corporation that

would replace APD Antiquities. Edington requested that Allan and Val provide

information for the executive summary regarding the property location, nearby oil wells,

and other germane data. The Holms brothers never completed the draft summary. The

parties never finalized or signed a letter of intent.

                                               8
No. 32577-6-III
Roil Energy v. Edington

       Allan Holms never contributed to Roil Energy any additional sums beyond the

$10,000 of seed capital and did not raise any of the $2 million he agreed to raise from

new investors. He did not approach any potential investors, other than conducting a

phone conversation with an unidentified person at Morgan Stanley. Allan did, however,

buy 1.3 million shares of APD Antiquities from existing shareholders at 2 to 4.5 cents per

share. The purchased shares represented fifty-five percent of APD's common stock. Jay

Edington and Val Holms expected Allan to share the shares.

       Jay Edington arranged for the sale of APD Antiquities' shares from current

shareholders. Allan Holms purchased the shares of APD Antiquities through nominees.

The purpose of using nominee purchasers was to prevent any one record shareholder

from holding more than 9.9 percent of the corporation's common stock. Allan Holms

and Jay Edington knew that APD Antiquities stock value might, upon the reverse merger,

significantly increase in value. We do not know if Allan and Edington shared this

information with sellers of APD stock.

       In a February 24, 2010, phone conversation, Jay Edington warned Val Holms of

Allan's potential control of the venture. Edington advised Val that, if the trio completed

the proposed transaction, Val would not control Roil Energy or APD Antiquities, since

Allan would control 3.8 million shares of APD out of a total of 5.2 million shares

outstanding. On another occasion, Edington cautioned Val that Allan insisted that Val

not be involved in the APD Antiquities stock acquisition.

                                             9
No. 32577-6-111
Roil Energy v. Edington

       E-mail from Jay Edington to Val Holms, on February 24, 2010, documents the

intent of the pair to withdraw from any venture involving Allan. In the first e-mail of the

day, Edington expressed anger at "beingjerked around by Allan." Ex. 150 at 1.

Edington informed Val that Allan refused to buy corporate stock according to the deal

Edington had structured and Allan refused to share the purchased stock with Val.

Edington declared: "Thank God you did not send those documents [mineral deeds] in for

recording." Ex. 150 at 1. Edington added: "Fortunately, there is absolutely nothing in

writing at this time, so nothing legally binding that he can hang his hat on, if you decide

to pull the rug out." Ex. 150 at 1. Edington recommended finding a way to "unwind this

immediately and hope the fallout is not too much." Ex. 150 at 1. He suggested

purchasing the remaining shares and conceiving a "logical reason" for aborting the trio's

plan to develop the mineral interests. Ex. 150 at 2. Edington recommended enlisting the

help of geologist Boyd Henneman, who had been consulted on the Bakken oil fields.

Edington stated: "I might even go so far [as] to utilize another public company that I

know about." He warned Val, however, that "[i]f Allan wires any funds or sends in

checks to APD, then we are technically locked in." Ex. 150 at 2.

       In a later February 24, 2010, e-mail, Jay Edington explained to Val Holms that

they each must raise $25,000 to render "Plan B" feasible. Ex. 154. On February 25,

Edington drafted an e-mail for Val to send Allan disclosing that Val knew about the APD

Antiquities stock Allan purchased and planned to buy and asking: "Am I safe to assume

                                             10
No. 32577-6-III
Roil Energy v. Edington

that I participate in these shares and they are being purchased for the three of us?" Ex.

160. During the evening of February 25, 2010, Val Holms e-mailed Allan Holms:

              Allan,
              Funny thing-I was just going through the time line that Jay has
      developed and in my rush to get my part finished with Boyd, I apparently
      overlooked a very important piece of the puzzle. I see that 2.5 million
      shares are being purchased from the company at $.02 and some additional
      shares from existing shareholders.
              I am very disappointed that this has not been brought to my
      attention. Is it safe to assume that I am participating in this transaction
      concerning these shares? Are they being purchased for all three of the
      partners or is this another one of your self-enrichment deals that does not
      figure me into the equation?
              Val

Ex. 161.

      Brother Allan Holms responded early morning February 26:

              Thanks for the vote of confidence. It helps to discuss questions
      rather than make assumptions and then try to pick a fight.
              The deal has not changed and is as discussed with you numerous
      times, we share everything 50/50. I am currently putting up all of the
      money to buy the shares from existing people at from .02 to .045 cents a
      share. According to Jay these become free trading shares and are liquid.
      Supposedly I receive my cost back in the future and we share those stocks
      1/3; 1/3; and 1/3. They will not even be issued in my name. The 2.5
      million shares are purchased and the money goes into the company. The
      other shares are purchased from existing shareholders of the public
      company.
              I have to wire the money today. If there is going to be a concern on
      your part, let me know before noon when I am supposed to send the wires.
      Incidentally, as you know I have sailed my own ship all my life and I have
      given you the option of getting on that ship if you want.

Ex. 163.

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No. 32577-6-III
Roil Energy v. Edington

       Val Holms responded to Allan the same day:

               Sounds good to me. I was taken back by the time line and was
       wondering what the hell was going on being that you seem to be on top of
       everything and was wondering why this was not brought to my attention.
       It's not that I am trying to start a war but I have been around you long
       enough to know that nothing gets by you and it took me by surprise that it
       had not been brought up.
               Go ahead and wire the money and I will see you either late Saturday
       or Sunday. I wouldn't worry about getting your money back because it is a
       dead ringer to produce. If you are concerned I have a couple of investors
       that would be more than happy to get in on the deal in any way that they
       can. All I know is time is slipping by and it seems that you have been so
       wrapped up in your other deals that you do not have the time to concentrate
       on the project at hand, and I don't want to lose it because we are dragging
       our feet too long.

Ex. 165.

       During February 2010, Jay Edington sustained communications with Allan Holms

as though Edington continued with plans for the reverse merger venture to capitalize and

exploit Val's mineral interests. On February 26, Edington urged Allan to wire funds for

stock purchase agreements.

      Two days later, Edington sent Allan and Val Holms a draft of an operating

agreement for Roil Energy that he advised was "critical" to define the ownership of its

managing members. He explained that the operating agreement could be dated any time

after formation of the limited liability company, but, "legally speaking," Roil Energy

lacked a valid agreement that established ownership interests in the company. Ex. 171.

The draft agreement contained blanks wherein the respective ownership interests of the

                                            12
No. 32577-6-111
Roil Energy v. Edington

members of Roil Energy would be inserted. No one ever inserted figures into the blanks.

The parties never signed an operating agreement.

       In late February 2010, geologist Boyd Henneman met Allan Holms, Val Holms,

and Jay Edington and presented a disappointing outlook for development of mineral

interests in McKenzie County, North Dakota. On March 4, Edington and Val prepared

an e-mail for Val to send to Allan. Val may have spoken with Allan on the telephone

before sending the message. In the sent e-mail, Val stated: "I am sorry that you have

changed your mind to proceed with Bakken Resources, and I can fully understand your

position in not wanting to go forward with it[,] especially after our meeting with Boyd

[Henneman]." Ex. 183. Val continued: "for the time being I am going to retain my

mineral rights and hope that Boyd was wrong. But I doubt it." Ex. 183.

       On March 5, 2010, Allan Holms wrote Val to say that Val must have

misunderstood, and that Allan still desired to proceed with the plan to develop the

mineral interests. Allan suggested that they slow the process and conduct more research.

Allan did not agree with Boyd Henneman' s opinion and cautioned that the brothers

needed to consider Jay Edington' s business interests as well.

       On March 5, Allan Holms also e-mailed Jay Edington about Val's plans to

withdraw from the trio's venture. Edington slyly responded: "This is all news to me, but

explains why I have not had any calls from Val. I think Boyd took the wind out of Val's

sails and also sensitized him about public companies." Ex. 189. Ten minutes later,

                                            13
     No. 32577-6-III
     Roil Energy v. Edington

     Edington sent Val a draft e-mail to send to Allan stating that, after "soul searching," Val

     had decided to "step back from Bakken." Ex. 190. Edington also told Val to claim he

     had not talked to Edington since the last meeting. Val sent Edington' s recommended e-

     mail to Allan and then did not respond to e-mail and telephone calls from Allan.

             On March 6, 2010, Jay Edington outlined Plan B in an e-mail to Val Holms and

     stated that the pair should dissolve Roil Energy immediately. Edington expressed delight

     that Val chose "to eliminate Allan from the Bakken Resources, Inc. project." Ex. 194 at

     2. Edington's steps proposed for Plan B included ceasing use of APD Antiquities as the

     public shell company and consummating a reverse merger with a new public company

     called Multisys Language Systems, Inc., already formed to market language education

     software. Edington' s daughter created Multisys, and she no longer valued her marketing

     partner. Plan B further involved immediate dissolution of Roil Energy, because of

     Allan's partial ownership of the limited liability company. Edington wrote: "The reality
I
I    is that Roil never executed an operating agreement, so it does not legally exist." Ex. 194
I
     at 3. Plan B finally entailed purchasing all or part of Evenette Greenfield's share in the

II   mineral interests. Edington assured Val that, under Plan B, Val would gain "absolute

     control" of the mineral interests company and protection from Allan's bullying. Ex. 194

I
!
     at 3.
I            On March 7, 2010, the day after explaining Plan B to Val Holms, Jay Edington
I
I    sent Allan Holms an e-mail stating that, with Val now unresponsive, Edington and Allan
1
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No. 32577-6-111
Roil Energy v. Edington

should treat the $10,000 seed capital Allan provided to Roil Energy as a loan. Edington

gave a personal guarantee to Allan that Allan would be reimbursed for all money he

contributed toward the Roil Energy and APD Antiquities venture. Edington assured

Allan that Edington preferred that the Roil Energy venture proceed as planned. Edington

then e-mailed Val, with a copy to Allan, expressing concern that Val had not returned

Edington's telephone calls. Edington declared that he had invested time in the project

and wanted to know Val's thoughts. Edington then sent a private e-mail to Val that

explained that Edington's previous e-mail to the brothers opened the door for Val to

respond with a list of reasons why he rejected the proposed mineral interests venture.

According to Edington, Val and Edington could isolate Allan, unwind Roil Energy, and

"go underground" to develop a new reverse merger without Allan. Ex. 202.

       Allan Holms unsuccessfully continued attempts to contact Val and to assure him

Allan did not want his mineral interests. In one e-mail, Allan agreed that, if the proposed

venture failed to proceed, the mineral interests would revert to Val. Val and Jay

Edington prepared reasons for Val's withdrawal from the venture. In a resulting March

9, 2010, e-mail, Val explained that he wanted to hold his mineral interests to "insure the

financial future ofme and my family." Ex. 210. He did not wish to lose control over the

mineral rights.

       On March 16, 2010, Val Holms filed, in Nevada, articles of dissolution for Roil

Energy, LLC, by signing only his name as a managing member. On March 18, Val sent a

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No. 32577-6-111
Roil Energy v. Edington

letter, with an enclosed check for $10,000, to Allan. The letter read, in part: "in

repayment of the loan made to Roil" and "[t]his clears up any obligations that I may have

had to you regarding Roil Energy." Ex. 236 at 2. Allan negotiated the check. Val closed

the Roil Energy bank account. Jay Edington repaid Allan the sum Allan spent on

purchasing APD Antiquities stock.

      Plan B proceeded. Val Holms and Jay Edington formed Holms Energy, LLC,

transferred Val's North Dakota mineral interests to Holms Energy, and, in November

2010, completed a reverse merger with Multisys Language Systems, Inc., the public shell

company. The pair renamed Multisys as Bakken Resources, Inc. Bakken Resources

transferred to Holms Energy, LLC, 40,000,000 shares of Bakken Resources, Inc. stock,

$100,000 cash, and a ten-year overriding royalty of approximately 29 .41 percent of the

gross amount of royalty payments received by Bakken Resources. By April 2013,

Bakken received royalties from multiple wells producing oil and gas. Bakken Resources

is now a publicly traded Nevada corporation.

      Allan Holms professed shock, in spring 2011, that Jay Edington and brother Val

used Val's North Dakota mineral interests to form and operate Bakken Resources.

Beginning in February 2012, Allan and Edington unsuccessfully attempted a scheme

whereby Allan would join the board of directors of Bakken Resources, the two would

demand the resignation of Val as chief executive officer of the company, and Edington

and Allan would assume control of Bakken Resources.

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     No. 32577-6-III
     Roil Energy v. Edington
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lI                                          PROCEDURE

            On March 14, 2012, Allan Holms sued, on his own and Roil Energy's behalf, Jay

I
J
     Edington, Holms Energy Development Corporation, Bakken Resources, Inc., Holms

     Energy, LLC, Toll Reserve Consortium, Inc., Val Holms and Mari Holms. Allan alleged

     breach of contract and fiduciary duties, wrongful dissolution of Roil Energy, LLC, civil

     conspiracy, tortious interference with a prospective business opportunity, fraud, and

     declaratory judgments. In amended complaints, Allan added claims of constructive trust

     and breach of the contract to form a joint enterprise. In July 2013, Allan and Edington

     filed a certificate of revival for Roil Energy that related back to the date of the LLC's

     formation.

            The trial court dismissed on summary judgment the claim of tortious interference

     before trial. Allan Holms settled with Jay Edington before trial.

            The court conducted a bench trial from November 4 through November 18, 2013.

     During trial, Jay Edington testified that, in a reverse merger scheme using an asset

     purchase as the strategy, the scheme follows a two-step process. First, an option to

     purchase the asset is prepared and executed, and then an asset purchase agreement is

     prepared and executed. An option to purchase is necessary to show investors in the

     public shell company that the company has a binding option to acquire the critical asset.

     According to Jay Edington, Allan, Val Holms, and he never finalized or signed an option

     agreement or asset purchase agreement. William F. Ross, an expert who testified on

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No. 32577-6-111
Roil Energy v. Edington

behalf of Allan Holms, stated that, in the two most common types of reverse mergers, the

parties need either a signed asset purchase and sale agreement or a signed merger

agreement.

       On December 2, 2013, the trial court issued findings of fact and conclusions of

law. The court found that Val Holms did not record the mineral deeds conveying Toll

Reserve Consortium's mineral interests to Roil Energy because he never received the

total $200,000 Allan agreed to pay as seed money for Roil Energy. Val did not intend to

record the deeds and transfer title to Roil Energy until Allan paid the $200,000 and

performed his other commitments to raise capital. According to the trial court, Allan

Holms never approached any potential investors as promised. The parties never agreed to

their respective percentages in Roil Energy, LLC. Jay Edington contemplated additional

members in the limited liability company beyond the three.

       The trial court also found that the Holms brothers and Jay Edington never signed

an operating agreement in Roil Energy, never signed an agreement establishing their

respective ownership interests in Roil Energy, never signed a document that allocated the

shares anticipated to be received from APD Antiquities, and never signed a document

establishing an agreement to enter and fulfill the terms of a reverse merger. The transfer

of Val Holms' mineral interests to Roil Energy was not scheduled to occur until the

satisfaction of many steps and would occur on closing of the deal. The valuation of the

mineral interests was necessary to the reverse merger. The raising of capital and a private

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No. 32577-6-111
Roil Energy v. Edington

placement of corporate stock would precede the transfer of the mineral interests.

      The trial court noted that at various times, Allan Holms, Val Holms, and/or Jay

Edington discussed the two brothers sharing APD Antiquities stock equally or splitting

the stock with Jay Edington with the brothers each receiving forty percent of the stock

and Edington receiving twenty percent. By mid-February, Jay Edington communicated

other arrangements with each brother separately.

      Based on the findings of fact, the trial court concluded that Allan Holms, Val

Holms, and Jay Edington never entered into an enforceable contract. Necessary terms for

the entry of an agreement included the valuation of Val Holms' mineral rights, the

timing, amount and form of seed capital, the timing and amount of subsequent equity

investment, the percentage of ownership among Allan Holms, Val Holms, and Jay

Edington, the number of members in the limited liability company, and entry of an

operating agreement for Roil Energy, LLC. The parties contemplated entering many

agreements before binding themselves to a joint venture. The agreements included an

option to purchase Val Holms' mineral interests, an operating agreement from Roil

Energy, and an asset purchase agreement for APD to acquire Val Holms' mineral

interests. Because of the hidden communications and mistrust among the three, the

parties never formed a common purpose, community of interest, or equal right of control.

      The trial court concluded that any agreement by Val Holms to transfer his mineral

interests to Roil Energy was unenforceable under the Washington statute of frauds since

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No. 32577-6-III
Roil Energy v. Edington

any agreement was only oral. The trial court denied Allan any relief under a constructive

trust. Because the parties never formed an enforceable contract, the trial court concluded

that Val had the right to withdraw from the negotiations and to develop his mineral rights

in a different transaction.

       Despite the lack of an enforceable agreement, the trial court found that Val Holms

uttered material false representations of fact to Allan, on which misrepresentations Allan

relied when withdrawing from the project. According to the court, as a result of the

misrepresentations, Allan lost the opportunity to participate in the reverse merger project

as initially configured. The trial court concluded that Val committed fraud, but, due to

significant differences between the proposed Roil Energy and APD Antiquities reverse

merger and the completed Holms Energy and Multisys Language Systems merger, Allan

lacked ascertainable damages. The court ordered only declaratory relief that Val's and

Jay Edington's attempt to dissolve Roil Energy was unlawful and ineffective under

Nevada law.

       The trial court also concluded that Val Holms and Jay Edington committed civil

conspiracy, breach of fiduciary duties, and oppression of Allan, as a minority

shareholder, when Val and Edington fraudulently caused Allan to abandon his

participation with Roil Energy. Again, the court limited the remedy to declaratory relief.

       The trial court concluded that Allan Holms could not recover "benefit of the

bargain" damages. Clerk's Papers (CP) at 4438. Nevertheless, the court stated that Val

                                            20
No. 32577-6-III
Roil Energy v. Edington

might never have developed his mineral interests if Allan had not introduced Jay

Edington to Val. Consequently, the court invited the parties to brief what, if any,

facilitation value Allan lost by the fraudulent actions of Jay Edington and Val to exclude

him from the business venture. The court warned the parties, without objection, that it

would not consider new evidence.

       After the hearing on damages, the trial court entered additional findings of fact and

conclusions of law. The trial court found that contributions and shares of earnings are not

sufficiently comparable between Allan Holms and Jay Edington to form a fair basis for

damages based on a facilitation value. The trial court granted Allan and Roil Energy

reasonable expenses, including attorney fees, under the Nevada Revised Statute (NRS)

86.489 for successful derivative claims of fraud, civil conspiracy, breach of fiduciary

duties, and minority shareholder oppression.

       In a final order, the trial court entered supplemental findings and conclusions

regarding attorney fees awarded to Allan Holms. The court granted Allan Holms, under

NRS 86.489, attorney fees of $399,570.50 and litigation expenses of $13,362.58.

                                  LAW AND ANALYSIS

       Allan Holms and Roil Energy argue on appeal that the trial court misguidedly

dismissed their claim for tortious interference on summary judgment, erroneously ruled

after trial that the parties did not enter a binding agreement for a joint venture, mistakenly

concluded that the North Dakota mineral interest deeds were unenforceable, and

                                             21
    No. 32577-6-111
    Roil Energy v. Edington

    incorrectly denied Allan Holms and Roil Energy damages. Val Holms cross appeals.

    Val contends that the trial court erred in ruling that Allan sustained tort claims, when

    damages are an element of the torts and Allan proved no damages. Val asks that we

    reverse the award of fees and costs since Allan did not sustain any tort cause of action.

                                        Tortious Interference

           We first address the one cause of action dismissed on summary judgment. Allan

    Holms contends the trial court erred in granting Val's motion for partial summary

    judgment and thereby dismissing Roil Energy's claim of tortious interference with a

    business expectancy. Allan alleged that Val, Holms Energy, and Bakken Resources

    tortiously interfered with Roil Energy's opportunity to own and develop the North

    Dakota mineral interests and the interference prevented Roil Energy from benefiting from

    the exploitation of the minerals.

           We encounter difficulty in reviewing Allan Holms' assigned error because, in his

    appeal brief, Allan cites to trial exhibits and excerpts from the final judgment to argue the

    existence of questions of fact as to his cause of action for tortious interference.

    Nevertheless, the trial court disposed of the cause of action before trial and based on

    summary judgment declarations. Allan does not outline for us the facts found in the
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    declarations supporting and opposing the summary judgment motion and does not argue

    that those facts warranted denial of the summary judgment motion. For this reason alone,
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Roil Energy v. Edington

       We must have before us the precise record reviewed by the trial court when

granting summary judgment. Harris v. Kuhn, 80 Wn.2d 630,632,497 P.2d 164 (1972);

Clarkv. Tacoma Hous. Auth., 11 Wn. App. 518,519,523 P.2d 1200 (1974). Allan

Holms may have sent to us the precise record before the trial court on summary

judgment, but we cannot be sure of such and, more importantly, Allan does not identify

for us the contents of that record.

       If we were to mix the facts before the trial court on summary judgment with the

facts presented at trial, as Allan Holms does, we would also affirm the summary

judgment dismissal of the cause of action for tortious interference on the basis that Allan

showed no damages. Washington recognizes the fundamental premise that "a person has

a right to pursue his valid contractual and business expectancies unmolested by the

wrongful and officious intermeddling of a third party." Ca/born v. Knudtzon, 65 Wash. 2d
157, 162, 396 P.2d 148 (1964). To prove tortious interference with a business

expectancy, the plaintiff must show (1) the existence of a valid business expectancy, (2)

the defendant's knowledge of that expectancy, (3) the defendant's intentional

interference, causing termination of the expectancy, (4) the interference was by improper

means or for an improper purpose, and (5) resulting damage. Newton Ins. Agency &

Brokerage, Inc. v. Caledonian Ins. Grp. Inc., 114 Wash. App. 151, 157-58, 52 P.3d 30

(2002), review granted and case dismissed, 148 Wash. 2d 1021 (2003). A claim oftortious

interference with a business expectancy requires a threshold showing of resulting

                                            23
No. 32577-6-111
Roil Energy v. Edington

pecuniary damages. Tamosaitis v. Bechtel Nat'!, Inc., 182 Wn. App. 241,249,327 P.3d

1309, review denied, 181 Wash. 2d 1029, 340 P.3d 229 (2014).

       We analyze below whether Allan Holms established compensable damages and

conclude, as did the trial court, that he did not meet this burden. Since damages is a

requisite element of the tort of interference, Allan could not sustain the cause of action

even if the trial court denied the summary judgment motion and allowed the claim to

proceed to trial. Although the trial court did not base its summary judgment ruling on the

lack of damages, we may affirm the trial court on any ground supported by the record. In

re Marriage ofRideout, 150 Wash. 2d 337, 358, 77 P.3d 1174 (2003); Truck Ins. Exch. v.

VanPort Homes, Inc., 147 Wash. 2d 751, 766, 58 P.3d 276 (2002).

                                       Findings of Fact

       Val Holms contends that we must treat the trial court's findings of fact as verities

because Allan did not include a separate assignment of error for each challenged finding

of fact and failed to include, in his brief, the text of those findings of fact. Generally,

unchallenged findings are verities on appeal. Cowiche Canyon Conservancy v. Bosley,

118 Wash. 2d 801, 808, 828 P.2d 549 (1992). RAP 10.3(a)(4) requires the appellant to

provide a "separate concise statement of each error a party contends was made by the

trial court, together with the issues pertaining to the assignments of error." Any

challenged finding should be typed verbatim in the appellant briefs text or in an

appendix to the brief. RAP 10.4(c).

                                              24
No. 32577-6-III
Roil Energy v. Edington

       Allan Holms' opening brief includes a section entitled "Assignment of Error," but

he did not cite the findings and conclusions challenged in those assignments of error. He

also failed to type the challenged findings verbatim. We may, however, waive

compliance with RAP 10.3(a)(4) and RAP 10.4(c) in order to serve the interests of

justice. RAP 1.2(c); In re Marriage of Zeigler, 69 Wash. App. 602, 606, 849 P.2d 695

(1993). When the nature of the challenge is clear and the challenged findings are stated

in the appellant brief, the court will consider the merits. Green River Cmty. College,

District No. JO v. Higher Educ. Pers. Bd., 107 Wn.2d 427,431, 730 P.2d 653 (1986).

       Our appellate record contains the trial court's findings of fact and conclusions of

law. In his brief, Allan Holms identifies the findings challenged, and Val shows no

prejudice with respect to a failure of Allan's noncompliance with the rules of appellate

procedure. Accordingly, we review the merits of Allan's assignments of error.

                          Enforceable Joint Venture Agreement

       Allan Holms contends that the evidence, as a matter of law, established that he and

his brother entered an enforceable agreement for a joint venture. This argument omits the

undisputed fact that Allan and Val did not negotiate bilaterally for an agreement to

develop Val's North Dakota mineral rights. We encounter difficulty addressing Allan's

contention when he fails to note the trilateral nature of the discussions. Since many, if

not all, discussions assumed that Jay Edington would hold an ownership interest in the

reverse merger scheme, Allan may destroy his claim of an enforceable contract by

                                            25
No. 32577-6-III
Roil Energy v. Edington

omitting Edington as one of the persons needed to assent to an agreement.

       The essential elements of a joint venture include ( 1) an express or implied

contract, (2) a common purpose, (3) a community of interest, and (4) an equal right to

control. Paulson v. Pierce County, 99 Wash. 2d 645, 654, 664 P.2d 1202 (1983); Ballo v.

James S. Black Co., 39 Wash. App. 21, 27, 692 P.2d 182 (1984). The trial court concluded

that the trial evidence did not fulfill any of the four elements of a joint venture. We are

inclined to agree with the trial court. Nevertheless, we focus only on whether Allan and

Val Holms entered an express or implied contract.

       We assume that the general rules of contract formation apply also to the formation

of a contract to enter a joint venture. The prevailing view appears to support a conclusion

that ordinary contract rules apply to joint venture agreements. Mason v. Rose, 176 F .2d

486, 489 n.10 (2d Cir. 1949). To prove the existence of a contract, a party must show

that the parties manifested to each other their mutual assent to the same bargain at the

same time. Pac. Cascade Corp. v. Nimmer, 25 Wash. App. 552, 555-56, 608 P.2d 266

(1980). Usually "mutual assent" takes the form of an offer and an acceptance. Keystone

Land & Dev. Co. v. Xerox Corp., 152 Wash. 2d 171, 178, 94 P.3d 945 (2004). An offer is a

promise to perform as stated in exchange for a return promise being given. Pac. Cascade

Corp. v. Nimmer, 25 Wash. App. at 556. The intention to do something is not a promise to

do it. Pacific Cascade Corp. v. Nimmer, 25 Wash. App. at 556. The terms assented to

must be sufficiently definite. P.E. Sys., LLC v. CPI Corp., 176 Wn.2d 198,207, 289 P.3d
26
No. 32577-6-111
Roil Energy v. Edington

638 (2012).

       The trial court entered both findings of fact and conclusions of law to the effect

that Allan and Val Holms, either by themselves or in tandem with Jay Edington, never

reached a binding compact. Whether the parties have mutually assented to definite terms

is normally a question of fact for the fact finder. P.E. Sys., LLC v. CPI Corp., 176 Wash. 2d

at 207. To prevail on appeal, Allan Holms must show a lack of evidence to support the

trial court's conclusion that the parties never reached a binding agreement.

       Allan Holms focuses on an e-mail exchange between the brothers on February 26,

2010. In a message to Val, Allan wrote, in part: "The deal has not changed and is as

discussed with you numerous times, we share everything 50/50." Ex. 163. Val

responded: "Sounds good to me." Ex. 165. According to Allan, these two sentences

constitute a binding agreement.

       In his argument, Allan Holms omits a later sentence from his February 26 e-mail

to Val: "Supposedly I receive my cost back in the future and we share those stocks 1/3;

1/3; and 1/3." Ex. 163. As already indicated, the parties contemplated a tripartite

agreement that included Jay Edington, not a bilateral agreement between Allan and Val.

Confusion arises if Allan and Val share everything fifty-fifty, but yet stock is shared with

a third party. Also, even if we found that Val and Allan agreed to this overarching

concept, the agreement remains indefinite because the two never defined what constituted

"everything" that they would split in half.

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No. 32577-6-III
Roil Energy v. Edington

      Allan Holms' legal argument particularly fails because of overwhelming evidence

that the parties never reached a definitive agreement and compelling testimony that the

parties did not anticipate a binding agreement until the accomplishment of many tasks.

Allan Holms never approached any potential investors as promised. The parties never

agreed to the percentage ownership interests of each member of Roil Energy, LLC, nor to

the number of company members. The parties never executed an operating agreement for

the limited liability company, although Edington drafted a proposed agreement. Val

Holms always intended to hold the majority interest in any entity that owned his mineral

interests, but Allan did not agree. The three businessmen never finalized or executed an

option agreement or asset purchase agreement for the reverse merger. They did not draft

the necessary documents for approval of a stock offering from the Securities and

Exchange Commission. No one valued the mineral interests. Necessary terms for the

entry of an agreement included the valuation of Val Holms' mineral rights, the timing,

amount and form of seed capital, the timing and amount of subsequent equity investment,

the percentage of ownership among Allan Holms, Val Holms, and Jay Edington, the

number of members in the limited liability company, and entry of an operating agreement

for Roil Energy, LLC.

      Allan Holms argues that, in reliance on Val's objective manifestation of assent of

an agreement for a joint venture, Allan gave Val $10,000 as seed money for Roil Energy

and purchased $40,000 in APD Antiquities shares for the joint venture. This argument

                                           28
No. 32577-6-111
Roil Energy v. Edington

assumes that the parties objectively reached an agreement. Conduct performed by Allan

in conformance to discussions toward the end of an agreement never consummated does

not create a binding agreement when none otherwise exists. Allan's argument also fails

to note that he had promised to provide the limited liability company $200,000, not

$10,000, and Val returned the $10,000. Allan also recouped the price for the APD

Antiquities stock. If Allan believed the parties entered into an enforceable agreement, he

should not have accepted repayment.

       Allan Holms contends that a joint venture arose by implied contract. According to

Allan, overwhelming and undisputed evidence showed Val's intent to enter into a

contract with Allan. He relies on Nicholson v. Kilbury, 83 Wash. 196, 145 P. 189 (1915)

for the proposition that the parties need not enter into a written partnership agreement

before the court will find a joint venture relationship established. Nevertheless,

Nicholson v. Kilbury involved an eight-year relationship between an aunt and niece,

during which time the two operated many hotels. The aunt told friends and relatives that

the two were partners for purposes of the business. The state Supreme Court held that,

under the circumstances, a partnership was deemed established as a matter of law.

      Nicholson v. Kilbury lacks a close relationship to our appeal. Allan and Val

Holms never engaged in a business for a number of years. The Holms brothers

anticipated entering numerous written agreements before consummating the joint venture.

No definitive agreement was ever signed. The parties had conflicting testimony as to the

                                            29
    No. 32577-6-III
    Roil Energy v. Edington

    terms of the relationship. Many essential details remained unresolved.

           Allan Holms principally relies on Mason v. Rose, 176 F.2d 486 (2d Cir. 1949),

    wherein the federal appeals court applied both English and California law, since the court

    discerned no difference between the two jurisdictions' contract principles. Mason aids

    Val, not Allan Holms. Celebrated British actor James Mason entered a written agreement

    with experienced motion picture executive David Rose. Under the writing, the parties

    agreed to form a company to produce movies starring James Mason. Among other terms

    of the agreement, Rose committed to manage the company, including arranging financing

    for, distribution of, and production of the films. The two men agreed to split the profits

    of the venture. The trial court found that the parties lacked an enforceable agreement.

    The federal district court reasoned that the venture contemplated by the writing was a

    substantial and ambitious project that anticipated many steps not found in the short

    agreement. The writing lacked details of the method of raising capital, the payment of

    salaries to contract players, the purchase of film stories, the payment of overhead, and the

    disposition and reinvestment of any profits. The Second Circuit Court of Appeals

    affirmed. The writing was too indefinite with respect to the parties' respective rights and

    obligations. The appeals court rejected David Rose's argument that an agreement

    creating a joint venture is in a special category and not subject to as strict test of

    definiteness as contracts generally. The appellate court noted that the parties had failed

    to define the financial arrangements for the production of films, the management needed
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No. 32577-6-III
Roil Energy v. Edington

for the venture, and the services to be provided by James Mason.

       This court defers to the trial court's evaluation of the credibility of the witnesses

and the persuasiveness of the evidence. Merriman v. Cokeley, 168 Wash. 2d 627, 631, 230

PJd 162 (2010). We do not substitute our judgment for that of the trial court even ifwe

might resolve the factual dispute differently. Sunnyside Valley lrrig. Dist. v. Dickie, 149
Wash. 2d 873, 879-80, 73 PJd 369 (2003). Substantial evidence supports the trial court's

findings that Allan and Val Holms had not mutually assented to the same bargain at the

same time. These findings support the court's conclusion that the brothers lacked an

enforceable agreement for the joint venture. The trial court did not err.

                                       Mineral Deeds

       Allan Holms next assigns error to the trial court's conclusion that the statute of

frauds bars the enforcement of the North Dakota mineral interest deeds. According to

Allan, Val's execution of the signed and notarized mineral deeds, on behalf of Toll

Reserve Consortium, and delivery of those deeds to Allan passed title to Roil Energy.

Val handed notarized copies of the deeds to Allan on February 19, 2010, during the Butte

meeting.

       We decline to address whether the statute of frauds forbids enforcement of the

North Dakota mineral deeds. The trial court entered findings, supported by substantial

evidence that Val Holms did not intend to transfer title of the mineral rights until a later

date when Allan contributed the full $200,000 and fulfilled other promises. Therefore,

                                             31
No. 32577-6-111
Roil Energy v. Edington

we agree with the trial court that there was no delivery of the mineral deeds under the

law. Under this conclusion, satisfaction of the statute of frauds is immaterial. A

reviewing court may affirm the trial court on any grounds established by the pleadings

and supported by the record. In re Marriage ofRideout, 150 Wash. 2d at 358 (2003); Truck

Ins. Exch. v. VanPort Homes, Inc., 147 Wash. 2d at 766 (2002). Allan Holms agrees that

North Dakota law and properly applied Washington law echo one another with regard to

the subject of delivery. Therefore, we rely on Washington law.

       Essential to the validity of a deed is a delivery of the instrument. Raborn v.

Hayton, 34 Wash. 2d 105, 109, 208 P.2d 133 (1949); Martin v. Shaen, 26 Wash. 2d 346, 349,

173 P.2d 968 (1946); Martin v. Shaen, 22 Wn.2d 505,512, 156 P.2d 681 (1945). Stated

differently, a deed, in order to pass title, must be delivered by the grantor to the grantee.

Anderson v. Ruberg, 20 Wash. 2d 103, 107, 145 P.2d 890 (1944).

       Whether there has been a valid delivery under the circumstances depends on the

intention of the grantor. Juel v. Doll, 51 Wash. 2d 435, 436-37, 319 P.2d 543 (1957);

Raborn v. Hayton, 34 Wash. 2d at 109 (1949); Anderson v. Ruberg, 20 Wash. 2d at 107

(1944). Before the court can find a delivery, the intention of the grantor to consummate

the transaction so as to fully vest the title in the grantee must be clearly shown. Puckett v.

Puckett, 29 Wash. 2d 15, 18, 185 P.2d 131 (1947). To constitute a delivery, the evidence

must show that the grantor intended that the deed should pass the title at the time and that

he should lose all control over the deed. Mathewson v. Shields, 184 Wash. 284, 288, 50

                                              32
    No. 32577-6-III
    Roil Energy v. Edington

    P.2d 898 (1935); Showalter v. Spangle, 93 Wash. 326,332, 160 P. 1042 (1916). Each

    case, necessarily, must be decided from the standpoint of its own facts and affords but

    little, if any, assistance in deciding another other than as to the principles of law involved.

    Anderson v. Ruberg, 20 Wash. 2d at 108.

           The trial court was permitted to accept Val Holms' testimony that he did not

    intend to pass title to Roil Energy when handing Allan copies of the deeds. When the

    intention of the parties to the transaction is a controlling question, either party has the

    right to give direct testimony as to what his intention was at the time of such transaction.

    Cannon v. Seattle Title Trust Co., 142 Wash. 213,216,252 P. 699 (1927); Malloy v.

    Drumheller, 68 Wash. 106, 117, 122 P. 1005 (1912).

           In Raborn v. Hayton, 34 Wash. 2d 105 (1949), the court cancelled a deed and quieted

    title to property in the heir of the grantor under the deed. The grantor, before her death,

    signed a deed in favor of her former husband. The attorney preparing the deed testified at

    trial that the grantor did not intend title to pass to the former husband until he paid the

    sum of $20,000. The former husband never paid the sum. After the death of the former

    wife, the former husband took possession of the deed and recorded it. The court annulled

    the deed because of the failure to pay. In our appeal, Allan Holms never paid the

    consideration agreed for the transfer of the mineral interests.

           Val Holms delivered to Allan a copy, not the original, of the two mineral interest

    deeds. In Blachowski v. Blachowski, 135 N.J. Eq. 425, 39 A.2d 94 (N.J. Ch. 1944), the

                                                  33
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No. 32577-6-III
Roil Energy v. Edington

grantor's agent delivered a copy of the deed to the grantee, who recorded a copy. The

court, nevertheless, held that the deed did not transfer title since the grantor had no

present intention to part with title. The New Jersey court observed that an essential

element of delivery is the intent of the grantor that the deed shall become immediately

effective as a conveyance in accordance with its terms. Even if there be a physical

delivery of the document by the grantor to the grantee, the deed does not become

operative if the grantor expects it not to become effective until a later final delivery.

       Allan Holms characterizes Val Holms' defense as one of conditional delivery of

the deeds. Allan then cites Richmond v. Morford, 4 Wash. 337 (1892) for the proposition

that Washington does not recognize "conditional delivery." The result of Richmond v.

Morford is consistent with Washington rejecting the rule of "conditional delivery."

Nevertheless, the grantor delivered to the grantee the original of the deed, not a copy as

Val delivered to Allan. The grantee, contrary to Allan Holms, had not failed to fulfill

promises. Also, we note that the prevailing view now may be that a "conditional

delivery" is not an effective delivery. Turner v. Mallernee, 640 S.W.2d 517, 522 (Mo.

Ct. App. 1982); DiMaio v. Musso, 762 A.2d 363, 365 (Pa. Super. Ct. 2000); McLaughlin

v. Mcloughlin, 237 A.D.2d 336,337,654 N.Y.S.2d 407 (1997); Lerner Shops ofNC.,

Inc. v. Rosenthal, Inc., 225 N.C. 316, 34 S.E.2d 206, 208 (1945).

       Val Holms represented to Allan Holms that he recorded the deeds, but no

testimony supports a finding that Val intended a transfer of title despite that

                                              34
No. 32577-6-111
Roil Energy v. Edington

representation. The trial court found Val possessed no intent to transfer title until the

completion of additional steps. Val Holms' false representations may give rise to a claim

for fraud, but not for enforcement of the North Dakota deeds.

                                          Damages

       The trial court found that Allan Holms proved each element of the claims for

fraud, civil conspiracy, breach of fiduciary duty, and oppression of minority interest.

Nevertheless, the trial court initially denied an award of damages because the structure of

the proposed Roil Energy and APD Antiquities merger significantly differed from the

completed Holms Energy and Bakken Resources merger. Thus, the trial court ruled that

it could not award Allan damages based on a benefit of the bargain measurement.

Consequently, the trial court asked the parties to brief what, if any, "facilitation value"

Allan lost from the fraudulent action of Val and Jay Edington. After supplemental

briefing and argument, the trial court concluded that Allan's and Jay Edington's

contributions and share of earnings were not sufficiently comparable to form a fair basis

for facilitation damages. Consequently, the trial court awarded Allan no damages.

       Allan Holms assigns error to the trial court's failure to award damages. We

review the trial court's decision regarding damages for abuse of discretion. Harmony at

Madrona Park Owners Ass 'n v. Madison Harmony Dev., Inc., 143 Wash. App. 345, 357-

58, 177 P.3d 755 (2008). A trial court abuses its discretion if its decision is manifestly

unreasonable or based on untenable grounds. State ex rel. Carroll v. Junker, 79 Wash. 2d
35
No. 32577-6-111
Roil Energy v. Edington

12, 26,482 P.2d 775 (1971). We will reverse a damages award only if it is outside the

range of evidence, shocks the conscience, or is the result of passion or prejudice. Mason

v. Mortg. Am., Inc., 114 Wash. 2d 842, 850, 792 P.2d 142 (1990). We find no abuse of

discretion.

       Generally, the measure of damages for fraud and breach of fiduciary duties is the

benefit of the bargain. Salter v. Heiser, 39 Wn.2d 826,831,239 P.2d 327 (1951). But

when a plaintiff seeks damages that are not inherent in the benefit of the bargain rule, he

or she will be awarded damages for all losses proximately caused by the defendant's

wrong. Salter, 39 Wash. 2d at 832; Senn v. Nw. Underwriters, Inc., 74 Wn. App. 408,414,

875 P.2d 637 (1994). Uncertainty as to the fact of damage is a ground for denying

liability, but uncertainty as to the quantum of damages is not fatal to a plaintiff's right to

recover. Wenz/er & Ward Plumbing & Heating Co. v. Sellen, 53 Wash. 2d 96, 98-99, 330
P.2d 1068 (1958). In determining whether the evidence is sufficient to provide a

reasonable basis for estimating loss, the court (1) should be exceedingly reluctant to

immunize defendants due to insufficient evidence of loss, and (2) should have sufficient

evidence to assess damages without speculation and conjecture. Jacqueline's Wash., Inc.

v. Mercantile Stores Co., 80 Wn.2d 784,786,498 P.2d 870 (1972). The plaintiff must

produce the best evidence of loss available under the circumstances. Jacqueline's Wash.,

Inc. v. Mercantile Stores Co., 80 Wash. 2d at 787.

       The trial court concluded it could not assess damages based on a benefit of the

                                              36
No. 32577-6-111
Roil Energy v. Edington

bargain because the eventual structure, capitalization, and merger of the Holms

Energy/Bakken Resources venture significantly differed from the original planned

venture among Roil Energy, APD Antiquities, and others. In the Holms Energy/Bakken

Resources merger, Bakken Resources held an option to acquire the mineral rights that did

not ripen until Bakken Resources delivered $1.5 million in escrow. This second reverse

merger agreement also included an overriding royalty to Holms Energy based on the

revenue from the minerals and an additional payment to Val Holms of $100,000 for his

mineral interests. When the parties completed the Holms Energy and Bakken Resources

merger, Bakken Resources received the funds in escrow and it then issued a certificate

for forty million shares to Holms Energy. Holms Energy, in tum, transferred the North

Dakota mineral rights to Bakken Resources. Val received eighty percent of the forty

million shares and Jay Edington garnered 20 percent of the shares. Val became the chief

executive officer of Bakken.

       An analysis that Allan Holms proved no damages tracks the analysis that the

parties reached no enforceable joint venture agreement. Allan Holms requested damages

in the amount of his expected profits from the joint venture. Allan argued at trial that,

based on a forty/forty/twenty split that the parties agreed on, the court should have

awarded him forty percent of the Bakken shares, forty percent of the $100,000 Bakken

paid to Val for his mineral interests, and forty percent of the Holms Energy overriding

royalties. These figures total $4,516,433. Nevertheless, in his appeal brief, Allan Holms

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No. 32577-6-111
Roil Energy v. Edington

argues that he had an agreement with his brother for a split of fifty-fifty of the income,

not a three party division of forty /forty/twenty, illustrating that even Allan's differing

positions shows the lack of an agreement and an inability to assess damages. If the

parties never reached an agreement, Allan was entitled to no profits. He never held an

interest in the North Dakota mineral rights, such that he was entitled to royalties.

       The trial court found that Allan Holms, Val Holms, and Jay Edington failed to

reach an agreement about their respective ownership interests in Roil Energy and APD

Antiquities. Moreover, the three participants never valued the North Dakota mineral

rights and never discussed an override royalty payable to Roil Energy. Allan and

Edington insisted, during trial testimony, that the parties agreed that Allan, Val, and

Edington would split ownership of Roil Energy and APD Antiquities forty/forty/twenty.

Nevertheless, Val testified that the parties never allocated the shares, and he insisted he

always intended to retain fifty-one percent. The parties also intended to include other

members in Roil Energy with an undetermined percentage of ownership interest.

Exhibits showed that Edington's fear, in early February 2010 that the Holms brothers

would deny him any shares of Roil Energy. Later that month, when Val inquired ifhe

would gamer any share of APD Antiquities, Allan responded that the two brothers would

"share everything 50/50." Ex. 163. In the same e-mail, however, Allan discordantly

wrote that the three partners would respectively receive one third of APD Antiquities.

Neither Allan nor Val furnished information for the proposed operating agreement, which

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data would have defined the ownership interests of the managing members. Based on the

trial testimony, the trial court wisely ruled that Val's testimony was more credible and

that the evidence established that the three participants reached no agreement. In tum,

the trial court reasonably ruled that it could not discern what, if any, benefits or income

Allan would have reaped if he had not been defrauded. Stated differently, the trial court

was within its discretion in ruling that Allan failed to prove damages resulting from the

fraud, conspiracy, breach of fiduciary duty, and oppression of minority interest. This

conclusion is bolstered on the recognition that Val need not have defrauded Allan in

order to terminate discussions with Allan regarding development of the mineral rights.

       Allan Holms underscores his expert's testimony that the original trio's reverse

merger plan replicated the final structure of the Holms Energy/Bakken Resources merger.

This testimony does not assist Allan since the parties never agreed to the original reverse

merger plan. Also, the trial court heard evidence contrary to the expert's testimony.

       Allan Holms also argues that he was entitled to a facilitation value because he

introduced Jay Edington to Val. Allan notes that Edington's share of the Holms

Energy/Bakken Resources venture was 7 .9 million shares, which Allan contends is the

value Val assigned to Edington's participation in the new scheme. Allan asserts that he is

entitled to the value of those shares of approximately $1,975,000, minus the $200,000

Allan agreed to invest in the original venture, for a total of $1,775,000.

       The trial court reasonably concluded that the contributions and share of earnings

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No. 32577-6-III
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are not sufficiently comparable between Allan Holms and Jay Edington to form a fair

basis for damages and denied recovery. Therefore, we hold that the trial court did not

abuse its discretion in denying damages for facilitation.

       Allan Holms emphasizes the trial court's finding of fact 28, in which the court, in

part, found "sufficient evidence of a direct loss suffered by Allan Holms." CP at 4438.

From this finding, Allan argues that he must be granted some damages. Nevertheless, the

finding was a precursor to the trial court allowing Allan to argue that he was entitled to

recover damages for facilitating the contact between Jay Edington and Val Holms. In the

end, Allan proved no facilitation damages.

       On appeal, Allan Holms complains that the trial court refused to allow him to

present additional evidence to support an award based on facilitation value.

Nevertheless, he never objected to the trial court's announcement that it would not

entertain additional evidence. He never asked to reopen his case for presentation of new

evidence. Therefore, he waived this assignment of error. Generally, issues not raised in

the trial court may not be raised for the first time on appeal. RAP 2.5(a); State v. Nitsch,

100 Wn. App. 512,519,997 P.2d 1000 (2000).

       Allan Holms cites no case wherein a court awards damages to a party for

introducing two parties who eventually form a successful business relationship and

exclude the first party from an interest in the business. Nor do we find a decision,

wherein a court granted damages to a claimant under these circumstances.

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No. 32577-6-III
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       We question whether the trial court even needed to employ a sophisticated

analysis as to whether the operation of Holms Energy and Bakken Resources replicated

any agreement reached by Jay Edington, Allan Holms, and Val Holms, or any agreement

contemplated by them. Allan Holms failed to meet the conditions of selling APD

Antiquities stock and tendering $200,000 such that Val Holms had any obligation to part

with any mineral rights. If Val never became obligated to transfer any mineral interests

to Allan, Allan was never injured by Val's traitorous behavior.

                                    Constructive Trust

       Allan Holms contends that the trial court also erred in refusing to impose a

constructive trust on some of the profits of the Holms Energy/Bakken Resources venture.

Allan argues a constructive trust is the appropriate remedy in equity when a defendant

intentionally interfered with the plaintiffs business relationship arid thereby acquired the

property that was the subject of that relationship. The trial court concluded that this

remedy was not available because any income of Bakken Resources and Holms Energy

was based on a different corporate structure than the joint venture Allan hoped to enter.

Nevertheless, according to Allan, without his involvement in the Roil Energy project, Val

would have never capitalized his mineral rights into a going venture worth in excess of

$14,000,000 plus annual lease royalties.

       A constructive trust arises where a person holding title to property is subject to an

equitable duty to convey it to another on the ground that he would be unjustly enriched if

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No. 32577-6-III
Roil Energy v. Edington

he were permitted to retain it. Baker v. Leonard, 120 Wash. 2d 538, 547-48, 843 P.2d 1050

(1993); Dave Johnson Ins., Inc. v. Wright, 167 Wn. App. 758,773,275 P.3d 339 (2012).

A court can impose a constructive trust arising in equity when clear, cogent, and

convincing evidence serves as the basis for the decision. Baker v. Leonard, 120 Wash. 2d at

54 7. The primary purpose of a constructive trust is to prevent unjust enrichment.

Consulting Overseas Mgmt., Ltd. v. Shtikel, 105 Wash. App. 80, 87, 18 P.3d 1144 (2001).

       Val Holms always owned the mineral interests in the North Dakota property

during the time that Val and Allan discussed a joint venture. Allan never tendered the

$200,000 needed to participate in the venture. The parties never reached an agreement.

The trio of Val Holms, Allan Holms, and Jay Edington kept shifting allegiances in order

to isolate another, including isolating Val. On these grounds alone, the trial court

reasonably concluded that Allan has no just entitlement to any of the income from the

mineral rights. We deny all assignments of error in Allan Holms' appeal.

            Fraud, Conspiracy, Fiduciary Breach, and Oppression of Minority

       We begin our review of Val Holms' cross appeal. Val first argues that the trial

court erred when it declared him to be liable in fraud, civil conspiracy, and breach of

fiduciary duty when damages is an element of each cause of action. We agree.

      A claim for fraud fails as a matter of law if the plaintiff fails to prove all nine of its

essential elements. Brummett v. Washington's Lottery, 171 Wash. App. 664, 675, 288 P.3d
48 (2012). The ninth element of fraud is "resulting damages." Brummett v.

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No. 32577-6-III
Roil Energy v. Edington

Washington's Lottery, 171 Wash. App. at 675. As with a fraud claim, a claim of civil

conspiracy also requires the element of damages. Platts v. Platts, 73 Wash. 2d 434, 438,

438 P.2d 867 (1968). Finally, proof of damages is an essential element of a claim of

breach of fiduciary duty. Senn v. Nw. Underwriters, Inc., 74 Wash. App. at 414 (1994);

Interlake Porsche+ Audi, Inc. v. Bucholz, 45 Wash. App. 502, 509, 728 P.2d 597 (1986);

29 DAVID K. DEWOLF, WASHINGTON PRACTICE: WASHINGTON ELEMENTS OF AN

ACTION§ 12:1, at 365-66 (2015-16 ed.).

      Val Holms also contends that damages are an element of a cause of action for

oppression of a minority shareholder.   Nevertheless, a minority owner's claim for

oppression arises from the majority owner's fiduciary duties. Baur v. Baur Farms, Inc.,

832 N.W.2d 663, 670 (Iowa 2013); McLaughlin v. Schenk, 2009, UT 64, 220 P.3d 146,

156; Hayes v. Olmsted & Assocs., Inc., 173 Or. App. 259, 21 P.3d 178, 181 (2001);

Hollis v. Hill, 232 F.3d 460, 470 (5th Cir. 2000) (applying Nevada law). A cause of

action for oppression could be considered a species of breach of fiduciary duty. Allan

Holms cites no Nevada law to the contrary. Because an action for shareholder oppression

is linked to a breach of fiduciary duty, we hold that damages is an element of the cause of

action for oppression of a minority owner.

      Allan Holms argues that an action in fraud is valid even though the injury lacks a

compensable market value and cites Sigman v. Stevens-Norton, Inc., 70 Wash. 2d 915, 921-

22, 425 P.2d 891 (1967) for this proposition. Whereas, such may be true, the claimant

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No. 32577-6-111
Roil Energy v. Edington

must still prove some damages as confirmed in Sigman v. Stevens-Norton, Inc., 70 Wash. 2d

at 921.

          Allan Holms failed to prove that he suffered any damages. Accordingly, his

causes of action for fraud, breach of fiduciary duty, oppression of minority owner, and

conspiracy should have been dismissed. The trial court also erred when entering a

declaratory judgment that Val Holms committed fraud, conspiracy, breach of fiduciary

duty, and oppression, since damages are integral to the causes of action.

          In response to Val Holms cross appeal, Allan distinguishes between the meaning

of the words "damage" and "damages." "Damage" means legal injury, while "damages"

is the monetary compensation for such legal injury. Gilmartin v. Stevens Inv. Co., 43

Wn.2d 289,302,261 P.2d 73,266 P.2d 800 (1954) (Schwellenbach, J., dissenting).

According to Allan, the trial court's unchallenged findings support a conclusion that he

suffered damage due to Val's fraud, conspiracy, breach of fiduciary duties, and

oppression of minority interest and he need only prove damage, not damages, to sustain

his tort theories. Unfortunately for Allan, his citation of a dissenting opinion helps him

none. Washington courts have never adopted Justice Schwellenbach's distinction, in his

dissenting opinion in Gilmartin, between "damage" and "damages."

                                         Attorney Fees

          Val Holms contends that, because his brother failed to sustain any cause of action,

Allan is not the prevailing party on any claim, and Allan may not be awarded any fees

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and costs. We agree.

       The trial court awarded Allan Holms partial reasonable attorney fees and costs

under a Nevada statute, NRS 86.489 that applies to shareholder derivative actions. Roil

Energy was formed in Nevada. The statute declares:

               If a derivative action is successful, in whole or in part, or if anything
       is received by the plaintiff as a result of a judgment, compromise or
       settlement of an action or claim, the court may award the plaintiff
       reasonable expenses, including reasonable attorney's fees, and shall direct
       the plaintiff to remit to the limited-liability company the remainder of those
       proceeds received by the plaintiff.

NRS 86.489. The statute does not aid Allan because he was not successful on any of his

claims and he recovered nothing.

       Allan Holms also asks for an award of reasonable attorney fees and costs on

appeal. Because he does not prevail on any claim on appeal, we deny the request.

                                       CONCLUSION

       We affirm the trial court's dismissal of Allan Holms' and Roil Energy's claims for

tortious interference with business expectancy and breach of contract. We concur with

the trial court that Allan Holms proved no damages. We reverse the trial court's

judgments for fraud, breach of fiduciary duties, civil conspiracy, and oppression of a

minority shareholder, and we vacate the trial court's order of reasonable attorney fees and

costs in favor of Allan Holms.

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

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I
    No. 32577-6-III
    Roil Energy v. Edington

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

    2.06.040.

                                                Fearing, C.J.

    WE CONCUR:

                                                                                           {

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