Court Opinion

ID: 2803476
Source: CourtListenerOpinion
Date Created: 2015-05-26 20:30:09.92071+00
Date Added: 2024-06-11T11:29:48.633816
License: Public Domain

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

SOUNDBUILT NORTHWEST, LLC, a
Washington limited liability company,             No. 72837-7-1

                     Respondent,                  DIVISION ONE
              v.
                                                  UNPUBLISHED OPINION
THOMAS PRICE and PATRICIA
PRICE, husband and wife, individually
And their marital community composed
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marital community composed thereof,
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       Trickey, J. — Where an appellate court has already determined that a party

is the prevailing party in a prior appeal, that party remains a prevailing party on

remand to the trial court for an award of attorney fees as provided for in a contract.

Here, the trial court erred in not awarding attorney fees to the defendants who

succeeded in getting the action dismissed on appeal based on the doctrine of res

judicata.

       The trial court further erred in limiting appellate fees awarded to those

incurred prior to the defendants' filing bankruptcy.

                                        FACTS

       A six day bench trial in March 2010 resulted in a judgment in favor of

Soundbuilt Northwest, LLC against Thomas and Patricia Price, Huynh Um and Jin

S. Um, d/b/a P&U Capital Partners, LLC (collectively, Price). That judgment

awarded Soundbuilt $5,990,916.08, including attorney fees ($91,120.50) and
No. 72837-7-1 / 2

costs ($2,281.78) under the real estate purchase and sale agreement (REPSA).

Price appealed the judgment.        While the matter was on appeal, Price filed

bankruptcy.

       On October 18, 2011, Division Two of the Court of Appeals, in an

unpublished opinion, held that the doctrine of res judicata barred Soundbuilt's

action and reversed the trial court's judgment in favor of Soundbuilt, remanding the

case to the trial court for "a final order of dismissal." Soundbuilt Nw.. LLC v. Price,

noted at 164 Wn. App. 1019,2011 WL 4929137. at *5. review denied, 174Wn.2d

1007, 278 P.3d 1112(2012).

       Additionally, Division Two awarded attorney fees to Price as the prevailing

party and remanded to the trial court to establish the amount. In its decision

Division Two stated:

       The REPSA attorney fees provision, however, provides that the
       prevailing party in "any other action arising out of this Agreement or
       the transactions contemplated hereby . . . shall be entitled to an
       award of reasonable attorneys fees and court costs incurred in such
       action or proceeding ... regardless of whether such action proceeds
       to final judgment." Accordingly, we grant Price and Um reasonable
       attorney fees and costs on appeal pursuant to the REPSA and RAP
       18.1. Except for those costs the commissioner of this court will
       determine pursuant to RAP 14.3 and 14.6, the trial court should
       determine the reasonable amount of the award on remand. RAP
       18.1(i).

Price, 2011 WL 4929137, at *5 (citation omitted). The Supreme Court denied

Soundbuilt's petition for review of Division Two's decision. Soundbuilt Nw., LLC v.

Price, 174 Wash. 2d 1007, 278 P.3d 1112 (2012).

       Price moved to vacate the judgment and requested attorney fees and costs.

The trial court entered an order vacating the judgment and dismissing the case
No. 72837-7-1 / 3

with prejudice, but reserved for future determination, Price's requests for an award

of attorney fees and costs.

        Price submitted affidavits requesting attorney fees of $109,418.75 for the

trial, plus 3.0 hours for preparation and hearing of the motion in the amount of

$930.00, $83,118.00 for fees on appeal, and $4,908.73 for costs and expenses at

trial court level.

        On January 17, 2014, the trial court granted Price's motion for fees but only

for those fees incurred on appeal. The trial court specifically found that the attorney

fees incurred at the appellate court were reasonable, but limited recovery to

$51,283.50, the amount incurred prior to Price's filing bankruptcy.

        Because Division Two's opinion did not specifically refer to Price's ability to

recover attorney fees for the trial, the trial courtfound it was without authority to do

so. The trial court did, however, award the costs incurred at trial.

        Price appealed. On February 12, 2014, the bankruptcy court entered an

Amended Ex Parte Order Granting Trustee Authority to Employ Special Counsel

Nunc Pro Tunc. The order permitted appellate counsel to represent Price and

authorized the trial court to award attorney fees and costs regardless of when they

occurred. Division Two's commissioner, over Soundbuilt's objection that it was

unfair, permitted Price to supplement the record with the bankruptcy order,

reasoning that both the order's nunc pro tunc status and the trial court's January

2014 order left open the option for Price to obtain an order at a future date.

        Price appeals the limitation of his attorney fees.
No. 72837-7-1 / 4

                                     ANALYSIS

Appellate Fees

       In its order limiting the fees to those incurred before the bankruptcy filing,

the trial court stated that such fees "will not be awarded by this court absent an

order by the bankruptcy court affirming the employment of Salvador Mungia and

the law firm of Gordon Thomas Honeywell."1

       Before the trial court's ruling, the bankruptcy court had already ratified

trustee Eric Orse's management authority to collect the attorney fee award

rendered in the current suit. The trial court failed to recognize this order. After the

trial court's decision, the bankruptcy court entered a formal order, issuing its order

nunc pro tunc. Because the trial court specifically found thefees requested for the
first appeal to be reasonable, Price is entitled to the entire amount of $83,118.00.
Attorney Fees at Trial

       RCW 4.84.330 provides for an award of attorney fees where provided for in
a contract. Here, Division Two has already determined that the REPSA provided

for such an award.

       Whether a party is a "prevailing party" is a mixed question of law and fact
that is reviewed under an error of lawstandard. Eaale Point Condo. Owners Ass'n

v. Coy, 102 Wash. App. 697, 706, 9 P.3d 898 (2000). "[T]he determination ofwho is
a prevailing party depends upon who is the substantially prevailing party, and this
question depends upon the extent of the relief afforded the parties." Riss v. Angel,
131 Wash. 2d 612, 633, 934 P.2d 669 (1997).

  Clerk's Papers (CP) at 1384.
No. 72837-7-1 / 5

      Soundbuilt argues that there has been no determination of who the

prevailing party is. We disagree. Division Two has already held that Price is the

prevailing party entitled to attorney fees under the REPSA and remanded to the

trial court to determine the amount. Such remand necessarily included an award

of attorney fees at the trial level. The trial court's finding that it was without

authority to award such fees on remand was error.

       Soundbuilt's citation to Hertz v. Riebe, 86 Wash. App. 102, 936 P.2d 24

(1997), is not helpful. There, the plaintiffs sued to recover earnest money tendered
in connection with a failed real estate purchase. The defendants counter-claimed

for rent owed during the plaintiffs' occupancy of the property. The court found a
breach of the REPSA, but at the same time ruled in favor of the defendants on

their counter-claim for rent. Because those claims were of equal magnitude there

was no clear winner.

       Nor is Soundbuilt's citation to Transpac Development. Inc. v. Oh, 132 Wn.

App. 212, 130 P.2d 892 (2006), of any assistance. In Transpac, the trial court
refused to award attorney fees to the defendant tenant underthe terms of a lease
agreement and RCW 4.84.330. The court reasoned that neither party was the
prevailing party because, although the landlord did not prevail on any of its claims,
the tenant also did not prevail on any of his counterclaims. We remanded, holding
that where distinct and severable contract claims are involved, the court cannot

refuse to award attorney fees to a prevailing party without a detailed consideration

ofwhat actually happened in the litigation. Transpac, 132 Wash. App. at 219.
No. 72837-7-1 / 6

       Such a proportionality approach is only awarded where "several distinct and

severable claims" are at issue. Marassi v. Lau, 71 Wash. App. 912, 917, 859 P.2d
605 (1993), abrogated on other grounds by Wachovia SBA Lending, Inc. v. Kraft,

165 Wash. 2d 481, 200 P.3d 683 (2009).

       In this case, there were no affirmative claims, only affirmative defenses.

Here, Price is the clear winner having won dismissal of all Soundbuilt's claims.

Moreover, Division Two of this court has already determined Price to be the

prevailing party. That is the law of this case.2

       In view of the fact that Soundbuilt was awarded over $91,000.00 in attorney

fees after the bench trial in which it mistakenly prevailed, Price's request for

$109,418.75 appears to be reasonable.              Soundbuilt does not attack the

reasonableness of those fees, but only argues that the trial court has discretion to

reduce the fees. This argument is incorrectly based on Soundbuilt's theory that it

somehow prevailed at the trial against Price's defenses to its action and it is only

the trial court that can determine who prevails.

       Nor is there any substance to Soundbuilt's claim that Price lost in its

argument to reform the contract to prevent individual liability. Had Soundbuilt not

improperly proceeded with this claim, Price would never had had to assert any

defenses with regard to such liability. Soundbuilt's position is untenable in view of

Division Two's determination that Price was the prevailing party.

2 Under the law of the case doctrine, an appellate court will generally refuse to consider
issues that were decided in a prior appeal. See Folsom v. County of Spokane, 111 Wash. 2d
256, 263-64, 759 P.2d 1196 (1988).

                                            6
No. 72837-7-1 / 7

       However, the record does not indicate that the trial court considered the

reasonableness of the fee request for the trial and Price requests this court to

remand for a determination that the attorney fees requested are reasonable.

       Additionally, Price requests attorney fees for this second appeal. Because

"[a] contractual provision for an award of attorney fees at trial supports an award

of attorney fees on appeal," Price is entitled to attorney fees for this appeal as the

prevailing party.3

       Accordingly, we affirm the trial court's finding that Price's request for the

attorney fees for the first appeal was reasonable and award the entire amount of

fees requested ($83,118.00) for the first appeal. We reverse the trial court's denial

of fees for the trial and remand for its determination whether the fees requested

are reasonable. Because we are remanding for a determination of reasonable

fees at the trial, we also remand to the trial court for a determination of the amount

of fees that should be awarded for Price's successful second appeal in this matter.

       Affirmed in part, reversed in part, and remanded for further proceedings.

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WE CONCUR:

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3 Reeves v. McClain, 56 Wash. App. 301, 311, 783 P.2d 606 (1989).