Court Opinion

ID: 2719018
Source: CourtListenerOpinion
Date Created: 2014-08-19 19:09:55.166858+00
Date Added: 2024-06-11T12:14:05.319763
License: Public Domain

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    IN THE COURT OF APPEALS OF THE STATE OF WASHJTGTO

                                              DIVISION II

BATTLE GROUND PLAZA, LLC,                                                  No. 43874- 7- 11

                   Appellant/ Cross Respondent,

           v.

DEAN            MALDONADO         and    JANE     DOE               UNPUBLISHED OPINION
MALDONADO, husband and wife and their marital

community;       MILLS   END,     LLC;    MILLS   END
 CENTER, LLC; DRKBG, LLC; DOUGLAS RAY;
 and IRWIN JESSEN;

                   Respondents /Cross Appellants.

       MELNICK, J. —      Battle Ground Plaza LLC (BG Plaza LLC) appeals the superior court' s ( 1)

grant of summary judgment for Douglas Ray and the Estate of Irwin Jessen ( Jessen) on its right of

first refusal claim; (2) denial of summary judgment on its seniority claim against Dean Maldonado;

and ( 3) award of attorney fees and costs to Ray and Jessen. Ray and Jessen contracted to sell the

Battle Ground Plaza                     Center ( BG Plaza   Property)   to BG Plaza LLC.           The contract
                         Shopping

included a right of first refusal provision for an adjacent 0. 5 acre undeveloped parcel (undeveloped

parcel).

           First, BG Plaza LLC argues the superior court erred by granting summary judgment for

Ray and Jessen because they failed to comply with the right of first refusal provision. BG Plaza

LLC argues Ray and Jessen contracted to sell the undeveloped parcel to Maldonado without

                                 the " Reciprocal Easement Agreement" for parking it      entered     into   with
advising BG Plaza LLC       of
43874- 7- 11

Maldonado as part of the undeveloped parcel sale. But the bankruptcy court previously approved

the sale of the   undeveloped parcel   to Maldonado       and   issued    a   final   order on   the sale.   Thus, BG

Plaza LLC' s claim is precluded under the doctrine of collateral estoppel and is an improper

collateral attack. We affirm the superior court' s grant of summary judgment in favor of Ray and

Jessen.

          Second, BG Plaza LLC argues the superior court erred by denying its motion for summary

judgment on its seniority claim because its rights to the BG Plaza Property are senior to any right

Maldonado      received   in the Reciprocal Easement Agreement.               Because the sale of the BG Plaza

Property has not closed, BG Plaza LLC does not have an ownership interest in the BG Plaza

Property. Thus, BG Plaza LLC' s seniority claim is merely hypothetical and speculative and does

not present an actual, present, and existing dispute that is ripe for review. 1 We affirm the superior

court' s denial of BG Plaza LLC' s summary judgment motion.

          Last, BG Plaza LLC argues the superior court abused its discretion when awarding Ray

      Jessen attorney fees                                its             for   an offset of      attorney fees.   We
and                           and costs   and   denying         request

disagree and affirm the superior court' s award of attorney fees.

          We affirm the trial court' s grant of summary judgment in favor of Ray and Jessen, its denial

of BG Plaza LLC' s summary judgment motion, and its award of attorney fees.

 1 This argument is more appropriately discussed in terms of the respective parties' rights in the BG
Plaza Property pursuant to the purchase and sale agreements and the Reciprocal Easement
Agreement. But because this issue is not ripe for review and we do not reach a decision on it, we
address it in terms of the parties argued seniority claim.

                                                      2
43874- 7- 11

                                                        FACTS

I.         BACKGROUND

           As of 2000, Ray and Jessen owned the BG Plaza Property and an adjacent undeveloped

parcel in the City of Battle Ground. On August 10, 2000, Ray filed for relief under Chapter 11 of

the United States Bankruptcy Code.

           In December 2000, Ray and Jessen entered a purchase and sale agreement to sell the BG

Plaza    Property ( BG    Plaza Agreement) to Bruce Feldman, Inc., who later assigned its interest as

purchaser      to BG Plaza LLC.      The BG Plaza Agreement granted BG Plaza LLC a right of first

refusal to purchase the adjacent undeveloped parcel.2

           On June 8, 2001, the bankruptcy court approved the sale of the BG Plaza Property to BG

Plaza LLC.       In March 2002, the bankruptcy court approved Ray' s third amended plan. This plan

included the sale of both the jointly owned BG Plaza property to BG Plaza LLC and the

2
     Specifically, the right of first refusal states:

           Seller grants to Purchaser a " Right of First Refusal" with respect to the land owned
           by Seller ( consisting of approximately a half acre) that is immediately adjacent to
           the Property Purchaser is buying from Seller pursuant to this contract. This Right
           of.First Refusal means that Seller may not sell or become contractually obligated
           to sell the adjacent parcel without giving written notice to Purchaser of all of the
           terms and conditions upon which Seller is willing to sell the adjacent property and
           giving Purchaser the opportunity to buy the adjacent land on those terms. Purchaser
           shall have seventy -two ( 72) hours from receipt of any such written notice within
           which to accept Seller' s offer by serving a written and signed acceptance upon
           Seller. If Purchaser fails to communicate acceptance of the offer within 72 hours
           of receipt, then Purchaser' s Right of First Refusal shall lapse as to that particular
           offer and Seller may sell it upon the stated terms to someone else. In the event that
           Seller ... becomes willing to sell upon terms that are different than those contained
           in the original notice, then Purchaser' s Right of First Refusal shall again apply and
           must be satisfied ( including a new notice) before sale or voluntary transfer of the
            adjacent property to any other party.

 Clerk' s Papers ( CP) at 119.

                                                          3
43874 -7 -II

undeveloped parcel. Under the plan, the undeveloped parcel was to be sold either under the terms

of the right of first refusal or to another third party should BG Plaza LLC not elect to exercise its

right of first refusal.

          On May 18, 2005, Ray and Jessen entered a purchase and sale agreement to sell the

undeveloped         parcel (   Parcel Agreement) to Maldonado.                        The Parcel. Agreement included a

provision      that Maldonado'        s " obligation     to   purchase   the   Property [ was]   conditioned on ...   Review

                                                               3
and acceptance          of the      cross parking agreements. "                Clerk' s Papers ( CP) at 69 ( emphasis in

original).     The Parcel Agreement also required Ray and Jessen to deliver to Maldonado within ten

days   after     the execution      date   a   copy   of a "[   dross easement for access and parking" document.

CP   at   70 (   emphasis      in   original).    On May 31, Maldonado signed an addendum to the Parcel

Agreement that referenced the BG Plaza Agreement and BG Plaza LLC' s right of first refusal for

the undeveloped parcel.

          On            27, BG Plaza LLC              received notice      of   the   Parcel Agreement.     BG Plaza LLC
                  May

neither exercised nor declined to exercise its .right of first refusal, claiming that its right of first

refusal was not ripe until its purchase of the BG Plaza Property closed. On July 5, the bankruptcy

court approved        the   sale of   the   undeveloped parcel          to Maldonado.      BG Plaza LLC never appealed

this order.

           On October 8, Maldonado, Ray, and Jessen amended the Parcel Agreement, reducing the

purchase price and          extending the closing date.            On October 18, BG Plaza LLC received notice of

the amended Parcel Agreement and, on October 21, gave Ray and Jessen notice of its intent to

 exercise its right of first refusal. At the same time it provided a $ 5, 000 promissory note and stated

 3 The cross parking agreement would allow patrons of BG Plaza Property and any establishment
 built on the undeveloped parcel to utilize parking available on both lots.
                                                                    4
43874 -7 -II

that   principal and   interest   would   be   payable   by   December 19.   Shortly thereafter, Ray moved the

bankruptcy court to approve the modified sale of the undeveloped parcel to Maldonado. BG Plaza

LLC objected to the proposed sale and asserted the sale violated the conditions of its right of first

refusal.    It also requested all cross parking agreements and other documents pertaining to both

properties from Ray and Jessen. Jessen' s counsel did not respond to BG Plaza LLC' s request.

           On November 1, the bankruptcy court approved the sale of the undeveloped parcel to

Maldonado      with    the   revised sale price.     The bankruptcy court ruled that the sale was " free and

clear of   liens   and encumbrances pursuant          to 11 USC §    363, including but not .imited to the right
                                                                                            l

of first refusal granted to Battle Ground Plaza, LLC, and the deed of trust granted to Battle Ground

Plaza, LLC,    by Irwin P.     Jessen in favor   of   Battle Ground Plaza, LLC."    CP at 178. The bankruptcy

court found that BG Plaza LLC' s attempted exercise of its right of first refusal failed to mirror the

Parcel Agreement.            Subsequently, the bankruptcy court denied BG Plaza LLC' s motion for

reconsideration. BG Plaza LLC did not appeal the bankruptcy court' s approval of the undeveloped

parcel sale to Maldonado or the order denying its motion for reconsideration.

           In November 2005, the undeveloped parcel sale closed; shortly thereafter Ray, Jessen, and

Maldonado          executed    and   recorded    a    Reciprocal   Easement Agreement.        The   sale   of the

undeveloped parcel enabled Ray to pay the remaining creditors' claims under the terms of his

chapter 11 plan and, on December 29, the bankruptcy court entered a final decree closing Ray' s

bankruptcy case.

II.        PROCEDURAL HISTORY

           In June 2006, BG Plaza LLC first learned of Ray, Jessen, and Maldonado' s Reciprocal

Easement Agreement. On July 5, BG Plaza LLC commenced a lawsuit in Clark County Superior

 Court     against    Ray,    Jessen,   Maldonado,       and Maldonado' s successor entities for specific

                                                               5
43874- 7- 11

performance,4 damages, and declaratory relief, arguing that Ray and Jessen had failed to comply

with the terms of BG Plaza LLC' s right of first refusal because they did not advise BG Plaza LLC

of their intent to execute the Reciprocal Easement Agreement.

          Maldonado, joined by Ray and Jessen, moved to dismiss the lawsuit on the basis that the

superior court        lacked    subject matter      jurisdiction.      The superior court remanded the case to the

United States Bankruptcy Court for the Western District of Washington for a determination of

whether      it had   retained   jurisdiction.      In January 2007, on Ray and Jessen' s motion and over BG

Plaza LLC'      s objection,     the   bankruptcy      court reopened            Ray' s bankruptcy          case.      On August 29,

2007, the bankruptcy court entered an order retaining jurisdiction over BG Plaza LLC' s claim for

specific performance and concerning the respective parties' rights under the Reciprocal Easement

Agreement.5

           The Estate of Jessen6 filed a motion for summary judgment in the bankruptcy court and

argued that there were no material issues of fact about whether Ray and Jessen had failed to provide

BG Plaza LLC with sufficient notice of all conditions on which they would have sold the

undeveloped parcel         to Maldonado.            The bankruptcy court granted Jessen' s motion for summary

judgment; ruled that its previous orders approving the sale were final and not subject to collateral

4 At oral argument, BG Plaza LLC abandoned its specific performance claim and stated it is now
seeking ,only damages. Wash. Court of Appeals oral argument, Battle Ground Plaza, LLC v.
Maldonado, No. 43874 -7 -II (Apr. 1, 2014),                at   6   min.,   20   sec. -   7   min.,   15   sec. (   on file with court).

5
    The   bankruptcy     court' s order stated: "[     T] his Court shall retain jurisdiction to hear and decide the
claim for      specific performance made              by [ BG       Plaza LLC],       and the US Bankruptcy Court shall
reserve    jurisdiction    at   this time    over   the claim   made    by [ BG Plaza LLC], concerning the rights of
the   respective parties under         the   reciprocal easement        agreement."  CP at 405.

6
    Jessen   passed     away in September 2006.             Eugene Anderson and William Macrae -Smith were
appointed as co- personal representatives of his estate and were substituted for Jessen on November
9, 2006.
43874- 7- 11

attack by BG Plaza LLC in state court; and, ruled that, in any event, Ray and Jessen had complied

with   the terms   of   the   right of   first   refusal.   BG Plaza LLC appealed to the Bankruptcy Appellate

Panel of the Ninth Circuit, which affirmed the bankruptcy court' s decision. BG Plaza LLC then

appealed to the United States Court of Appeals for the Ninth Circuit. The Ninth Circuit held the

bankruptcy court lacked jurisdiction over the state breach of contract claims, reversed the

bankruptcy appellate panel, and remanded with instructions to vacate the bankruptcy court' s

judgment for lack of jurisdiction.?

          Before the Ninth Circuit issued its opinion, BG Plaza LLC filed a motion for summary

judgment in Clark        County     Superior Court          on   its seniority   claim.   Ray, Jessen, and Maldonado

asserted that the bankruptcy court still retained jurisdiction over this claim. The bankruptcy court,

however, stated that it would not decide the jurisdictional issue on the seniority claim because it

was not ripe.

          Following remand to the state superior court, BG Plaza LLC moved for summary judgment
and argued that the Reciprocal Easement Agreement was junior to BG Plaza LLC' s interest in the

BG Plaza Property. Ray and Jessen also moved for summary judgment and argued that BG Plaza

LLC'   s claims were      barred    by    the    bankruptcy      court' s sale order.     The superior court denied BG

Plaza LLC' s motion, ruling that BG Plaza LLC' s seniority claim was not ripe because the sale of

the BG Plaza       Property     to BG Plaza LLC had              not closed.     The superior court granted Ray and

Jessen'   s   motion     for    summary judgment,             concluding that BG Plaza LLC' s claims were

extinguished by the bankruptcy court' s November 1, 2005 sale order.

7 The Ninth Circuit stated that the " Clark County Court was perfectly capable of taking jurisdiction
and assessing whether BG Plaza [ LLC' s] claim is precluded given that the sale had already been
finalized     and approved      in the   previous     bankruptcy      proceeding."      CP at 263.

                                                                  7
43874- 7- 11

III.        ATTORNEY FEES

            After the superior court' s summary judgment rulings, Ray and Jessen filed a motion for

attorney fees and costs in the amount of $229, 648. 67 pursuant to two prevailing party attorney fee

provisions in the BG Plaza Agreement. 8 The superior court denied this motion and stated ( 1) it

would not award         fees   under   CR 11   and   RCW 4.84. 185; (      2) it would consider only those fees from

the bankruptcy court proceedings " that can be allocated to the support of the Court' s order for

summary judgment"              and that " there is going to have to be a tie -in of how those bankruptcy

proceeding         matters related   to the Court'   s ultimate   entry ...    of the order for summary judgment ";

 3) it would not award any attorney fees related to BG Plaza LLC' s seniority claim; and ( 4) the

fees requested must be reasonable considering the multiple attorneys and paralegals that

participated. Report of Proceedings ( RP) at 5.

            In response to the superior court' s oral ruling, Ray and Jessen submitted an amended

motion       for attorney fees       and costs   in the   amount    of $ 100,    114. 77.    This fee request included

  12, 463. 00 for the      services of   Michael Higgins,         who   had   initially   represented   Ray; $ 990. 00 for

the services of Timothy Dack, who had initially represented Jessen; and $ 86, 661. 77 for the services

of Bullivant Houser Bailey, who represented both Ray and Jessen.

8 BG Plaza Agreement provision 10 states:

            In the event suit or action is instituted by Seller, Purchaser, Purchaser' s Agent or
            Seller' s Agent to enforce or declare the meaning of any of the terms of this contract,
            the prevailing party shall be entitled to recover such sum as the court may adjudge
            reasonable as attorney fees at trial and on any appeal of any such suit or action, in
            addition to all other sums provided by law.

CP     at   107.    And BG Plaza Agreement           provision      Anything to the contrary herein
                                                                  29( C)   states: "

notwithstanding, in the event of any litigation arising out of this contract, the court may award to
the prevailing party all reasonable costs and expenses, including attorneys' fees." CP at 116.

                                                              8
43874 - -II
       7

             The superior court granted Ray and Jessen' s amended motion for attorney fees in a letter

ruling without providing any findings of fact or conclusions of law and without providing any

explanation       for its ruling.    It   awarded $   3, 170. 00 for Michael Higgins'   s   services, $ 137. 50 for

Timothy       Dack'   s services, and $   90, 250. 00 ($ 3, 588. 23 more than requested) for Bullivant Houser

Bailey' s     services.   BG Plaza LLC appeals the superior court' s dismissal of its lawsuit and award

of attorney fees to Ray and Jessen.9

             During the pendency ofthis appeal, and because the superior court had not entered findings

of fact and conclusions of law on its attorney fee award, we remanded the case for entry of findings

of    fact   and conclusions of     law. On remand, the superior court entered findings and conclusions

and also corrected an error in its initial fee award and instead awarded a, total of $82, 803. 67 in

attorney fees and costs to Ray and Jessen. BG Plaza LLC timely appeals.

                                                      ANALYSIS

I.           RIGHT OF FIRST REFUSAL CLAIM

             The superior court concluded BG Plaza LLC' s claim seeking to enforce its right of first

refusal by specific performance or for an award of damages was " extinguished" by the bankruptcy
court' s     November 1, 2005        sale order pursuant    to 11 U. S. C. §   363.   On appeal, BG Plaza LLC

argues that the bankruptcy court' s November 1, 2005 sale order cannot be given such " preclusive

9
     Ray and Jessen initially appealed the superior court' s first denial of their request for attorney fees
and costs.     But following the superior court' s subsequent award of attorney fees, they did not
pursue their appeal and, instead, requested that we affirm the superior court' s award of attorney
fees and costs.

                                                            9
43874- 7- 11

         10
effect. "      Appellant'    s   Br.   at   16.   Because the bankruptcy court' s November 1, 2005 sale order

concluded that the sale was free and clear of liens and encumbrances, which included BG Plaza

LLC' s right of first refusal, BG Plaza LLC is collaterally estopped from seeking to enforce its right

of first refusal and may not now collaterally attack the sale order in state court.

               C] ollateral estoppel is intended to prevent retrial of one or more of the crucial issues or

determinative facts determined in                 previous    litigation.'   Christensen v. Grant County Hosp. Dist.

No. 1, , 152 Wn.2d 299, 306, 96 P. 3d 957 ( 2004) ( quoting                  Luisi Truck Lines, Inc. v. Wash. Utils. &

Transp.    Comm 'n, 72 Wn.2d 887, 894, 435 P. 2d 654 ( 1967)).                    Once a party has had a full and fair

opportunity to litigate an issue, the party is precluded from litigating that same issue in subsequent
                                                                                      1993).           Issues litigated
actions.      Hanson   v.   City    of Snohomish, 121 Wn.2d 552, 561, 852 P. 2d 295 (

in federal court are precluded from relitigation in state court. See Nielson v. Spanaway Gen. Med.

Clinic, Inc., 135 Wn.2d 255, 268 -69, 956 P. 2d 312 ( 1998).                     Collateral estoppel requires that the

party seeking application of the doctrine establish that:

            1) the issue decided in the earlier proceeding was identical to the issue presented
           in the later proceeding; (2) the earlier proceeding ended in a judgment on the merits;
           3) the party against whom collateral estoppel is asserted was a party to, or in privity
           with a party to, the earlier proceeding; and ( 4) application of collateral estoppel
           does not work an injustice on the party against whom it is applied.

Christensen, 152 Wn.2d               at   307.    We review de novo whether collateral estoppel bars an action.

City   of Walla Walla        v. $   401, 333. 44, 150 Wn. App. 360, 365, 208 P. 3d 574 ( 2009).

1° BG Plaza LLC also argues that its state superior court suit " is an altogether proper independent
action that can set aside an order allowing the sale of property as allowed by [ Federal Rules of
Civil Procedure] FRCP 60( d)( 1)"                 or Appellant' s Reply Br. at 3 -5. BG Plaza LLC,
                                                       FRCP 60( d)( 3).
however, did not file an FRCP 60( d) motion and, instead, collaterally attacked the sale order in its
state superior court action. Thus, this argument fails.

                                                                   10
43874- 7- 11

             Here, collateral estoppel bars BG Plaza LLC' s right of first refusal claim because all four

parts of the test have been met. First, the instant case and the bankruptcy case involve the same

issue: BG Plaza LLC'                s    ability to   enforce   its   right   of   first   refusal.     The bankruptcy court' s

November 1, 2005 sale order approved the sale of the undeveloped parcel to Maldonado " free and

clear of     liens    and encumbrances pursuant             to 11 USC §        363, including but not limited to the right

of   first   refusal    granted     to Battle Ground Plaza, LLC."                  CP   at   178.     The bankruptcy court also

determined that BG Plaza LLC' s attempt to exercise its right of first refusal was insufficient

because the terms of its offer were different from those in the Parcel Agreement. Accordingly, an

issue decided in the earlier bankruptcy proceeding was identical to the issue presented to the

superior court.

             Second, the       bankruptcy        court sale order was a         final judgment         on   the   merits.   See Third

Nat' l Bank      v.   Fischer (In       re   Fischer), 184 B. R. 293, 301 ( Bankr. M.D. Tenn. 1995) (                 quoting Cedar

Island Builders, Inc.          v.   S.   County   Sand & Gravel, Inc., 151 B. R. 298, 300 ( D. R.I. 1993));                  see also

In   re   Sax, 796 F. 2d 994, 996 ( 7th Cir. 1986) (                       holding that bankruptcy sale orders are final

decisions).

             Third, BG Plaza LLC participated in the earlier bankruptcy proceeding regarding the sale

order. BG Plaza LLC received notice of the hearing and the bankruptcy court fully considered BG

Plaza LLC' s attempted exercise of its right of first refusal before approving the sale of the

undeveloped parcel to Maldonado free and clear of BG Plaza LLC' s right of first refusal. See Am.

Linen     Supply Co.      v.   Nursing        Home    Bldg. Corp., 15 Wn. App. 757, 766 -67, 551 P. 2d 1038 ( 1976)

 holding that collateral estoppel is proper if "the party against whom the estoppel is claimed has

had the opportunity to fairly and fully present that party' s case ").

                                                                      11
43874- 7- 11

             Finally, application of collateral estoppel here does not work an injustice on BG Plaza LLC

because it had         a   full   and    fair   hearing     on   the   right of   first   refusal   issue. " The determination of

whether application of collateral estoppel will work an injustice on the party against whom the

doctrine is        asserted —the        fourth   element—        depends primarily on `whether the parties to the earlier

proceeding         received a     full   and    fair   hearing on the     issue in   question. "'     Clark v. Baines, 150 Wn.2d

905, 913, 84 P. 3d 245 ( 2004) (                 quoting Thompson v. Dep' t of Licensing, 138 Wn.2d 783, 795 -96,

982 P. 2d 601 ( 1999)).            BG Plaza LLC received notice of the hearing and filed an objection to the

approval of the sale of the undeveloped parcel to Maldonado. Despite BG Plaza LLC' s objection

and attempted exercise of its right of first refusal, the bankruptcy court approved the sale of the

undeveloped parcel to Maldonado free and clear of BG Plaza LLC' s right of first refusal after a

hearing       on    the issue.     The bankruptcy court also determined that BG Plaza LLC' s attempted

exercise of its right of first refusal failed to mirror the Parcel Agreement and was improperly

exercised. Thus, applying collateral estoppel does not work an injustice on BG Plaza LLC.

             Further,   a   bankruptcy          sale order under        11 U. S. C. §     363 for property sold free and clear of

all liens " is shielded from collateral attack not by res judicata, but by virtue of the nature of rights

transferred        under    11 U. S. C. § 363."           Regions Bank v. J. Oil Co., LLC, 387 F. 3d 721, 732 ( 8th
                                                                           R.

Cir. 2004).          Once the bankruptcy court has approved the sale, the sale order is not subject to

collateral attack          because the      approval of a sale under §            363 is an in rem proceeding that is good as

against      the   world, not     just those       who were actual parties            to the   proceedings.        Regions Bank, 387

F. 3d   at   732 ( quoting Gekas           v.   Pipin, 861 F. 2d 1012, 1017 ( 7th Cir. 1988)). " A collateral attack is

an   attempt       to impeach      a   judgment in        an action other      than that     in   which   it   was rendered."   Cassell

v.   Portelance, 172 Wn.               App.     156, 165, 294 P. 3d 1 ( 2012) (            citing Batey v. Batey, 35 Wn.2d 791,

798, 215 P. 2d 694 ( 1950)).                The    relief   BG Plaza LLC is seeking —now                  only damages because, at

                                                                         12
43874- 7- 11

oral argument        before   our court,    it   abandoned    its   claim   for    specific performance —would      have the

effect of impeaching the bankruptcy court' s November 1, 2005 sale order.

           Other than appealing the sale order, the appropriate method to attack a court- approved sale

is   by   a motion   to   vacate   the   sale under     FRCP 60( b).      United Student Aid Funds, Inc. v. Espinosa,

559 U. S. 260, 269 -70, 130 S. Ct. 1367, 176 L. Ed. 2d 158 ( 2010).                       The finality of bankruptcy court

orders following the conclusion of direct review would ordinarily prevent a party from challenging

the orders' enforceability; however, FRCP 60( b) provides an exception to finality and allows a

party to seek relief from a final judgment under a limited set of circumstances, including newly
discovered     evidence or         fraud.   FRCP 60( b)( 2) -( 3);       United Student Aid Funds, 559 U. S. 269 -70;

see also     Valley   Nat' l Bank of Ariz.        v.   Needler, 922 F. 2d 1438, 1442 ( 9th Cir. 1991) ( affirming an

order imposing FRCP 11 sanctions against a debtor' s counsel because debtor' s counsel collaterally

attacked a sale order and did not seek " any review, reconsideration, or stay of the bankruptcy

court' s order ").

            We hold that BG Plaza LLC is collaterally estopped from seeking to enforce its right of

first refusal and may not now collaterally attack the sale order in state court. We affirm the superior

court' s grant of summary judgment on the right of first refusal issue.

II.         SENIORITY CLAIM

            BG Plaza LLC requested a finding from the superior court that its rights to the BG Plaza

                            the Reciprocal Easement Agreement                      are senior   to Maldonado'   s rights.   The
Property      and under

superior court concluded this claim was not ripe for review and denied summary judgment for BG

Plaza LLC. On appeal, BG Plaza LLC argues its seniority claim is ripe and that the superior court

should      have found its     rights    to be    senior   to Maldonado'      s.    We disagree. Because the sale of the

                                                                    13
43874- 7- 11

BG Plaza Property has not yet closed, any dispute regarding who has seniority rights has not yet

come to fruition. BG Plaza LLC' s seniority claim is not a justiciable controversy.

         Before a court may rule by declaratory judgment, a justiciable controversy must exist.

Walker     v.   Munro, 124 Wn.2d 402, 411, 879 P. 2d 920 ( 1994).                    For declaratory judgment purposes,

a justiciable controversy is:

            1) ...       an actual, present and existing dispute, or the mature seeds of one, as
         distinguished          from      a    possible,    dormant,       hypothetical,    speculative,        or    moot

         disagreement, (2) between               parties   having   genuine and     opposing interests, ( 3) which
         involves         interests that        must    be direct      and   substantial,   rather than potential,
         theoretical, abstract or academic, and ( 4) a judicial determination of which will be
         final and conclusive.

Walker, 124 Wn.2d at 411 ( quoting Nollette v. Christianson, 115 Wn.2d 594, 599, 800 P.2d 359

 1990)).        In other words, a claim is ripe for judicial determination if the issues raised are primarily

legal   and      do   not require     further factual development,            and   the   challenged action          is final.   First

Covenant Church of Seattle              v.
                                              City ofSeattle,   114 Wn.2d 392, 400, 787 P. 2d 1352 ( 1990),                 adhered

to   on remand,        120 Wn.2d 203, 840 P. 2d 174 ( 1992). " Absent these elements, the court `steps into

the   prohibited area of            advisory    opinions. "'    Walker, 124 Wn.2d at 411 -12 ( quoting Diversified

Indus. Dev. Corp. v. Ripley, 82 Wn.2d 811, 815, 514 P. 2d 137 ( 1973)).

           In this      case   there is   no    actual, present,    or    existing dispute.     The sale of the BG Plaza

Property has          not yet closed and       may     never close."      If the sale does not close, then BG Plaza LLC

would have no ownership rights in the BG Plaza Property or the Reciprocal Easement Agreement,

and thus would have no rights that could be senior to Maldonado' s rights. Where the transaction

11 Throughout the trial proceedings between Ray, Jessen, and BG Plaza LLC regarding the sale of
the BG Plaza Property, BG Plaza LLC maintained that it had no obligation to close and that it may
never    close.         Instead, BG Plaza LLC stated it would wait until after the property had been
remediated           to decide. •   Additionally, BG Plaza LLC may be unable to close due to its insolvency
and   because it " owns         no   tangible property and       its     obligations exceed    its   assets."   CP at 1751 -52.

                                                                    14
43874 -7 -II

at issue has not yet occurred or remains a matter of speculation, no justiciable controversy exists.

Diversified Indus. Dev.              Corp.,   82 Wn.2d at 815.

           Because BG Plaza LLC does not have an ownership interest in the BG Plaza Property and

will not until the closing of the sale, its claim of seniority is merely possible, hypothetical, or

speculative. Accordingly, BG Plaza LLC' s seniority claim is not ripe because it does not present

an     actual,   present,     and     existing dispute.             We affirm the superior court' s denial of summary

judgment for BG Plaza LLC on its seniority claim.

III.       ATTORNEY FEES CLAIM

           BG Plaza LLC argues the superior court erred by awarding Ray and Jessen attorney fees

and    failing    to   award    it   an offset.   We hold the superior court' s award of attorney fees and costs

was not an abuse of discretion. We also hold the superior court did not abuse its discretion by not

awarding BG Plaza LLC an offset of attorney fees for prevailing on the jurisdiction issue in the
Ninth Circuit.

           We apply       a   two -
                                  part    standard of review            to   a superior court' s award of   attorney fees: "(   1)

 W] e    review    de   novo whether          there   is   a   legal basis for awarding attorney fees ...    and ( 2) we review

a    discretionary      decision to       award . .            attorney fees and the reasonableness of any attorney fee

award     for    abuse of     discretion."      Gander v. Yeager, 167 Wn. App. 638, 647, 282 P. 3d 1100 ( 2012).

The superior court has broad discretion when determining the reasonableness of an attorney fee

award. Hall v. Feigenbaum, 178 Wn. App. 811, 827, 319 P. 3d 61, review denied, 180 Wn.2d 1018

 2014).      We will overturn the superior court' s award only if the superior court' s decision is

manifestly unreasonable or based on untenable grounds. Hall, 178 Wn. App. at 827.

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43874- 7- 11

          A.      ATTORNEY FEES AND COSTS

          A superior court may award attorney fees if authorized by a contract, statute, or rule.

Gander, 167 Wn.         App.   at   645.    Here, the BG Plaza Agreement authorizes attorney fees and costs

for the prevailing party for any litigation arising out of the BG Plaza Agreement. Ray and Jessen

were the prevailing parties on the right of first refusal claim, which arose from the BG Plaza

Agreement.      Thus, Ray and Jessen, as the prevailing parties, are entitled to attorney fees on the

right of first refusal claim and for attorney fees and costs in presenting their claim for attorney

fees.

          Next, we review whether the superior court' s fee award is manifestly unreasonable or based

on untenable     grounds.      As a general rule, Washington courts calculate reasonable attorney fees

based   on   the lodestar   method.         Clausen    v.   Icicle Seafoods, Inc., 174 Wn.2d 70, 81, 272 P. 3d 827

 2012).      Under this method, the court evaluates whether counsel spent a reasonable number of

hours —excluding         any wasteful or duplicative hours and any hours pertaining to unsuccessful

claims —and whether counsel                billed   at a reasonable rate.       Smith   v.   Behr Process   Corp.,   113 Wn.

App.    306, 341, 54 P. 3d 665 ( 2002) ( citing Bowers                v.   Transamerica Title Ins. Co., 100 Wn.2d 581,

597, 675 P. 2d 193 ( 1983)).               Where an attorney fee award " is authorized for only some of the

claims, the attorney fees award must properly reflect a segregation of the time spent on issues for
which     attorney fees    are authorized       from time      spent on other     issues."     Hume v. Am. Disposal Co.,

124 Wn. 2d 656, 672, 880 P. 2d 988 ( 1994).                  However, determining the attorney " fee award should

not   become    an     unduly burdensome proceeding....                     An `explicit hour - -
                                                                                              by hour analysis of each

lawyer' s times sheets' is unnecessary as long as the award is made with a consideration of the

relevant     factors    and reasons sufficient         for   review are      given   for the amount    awarded."      Absher

                                                                 16
43874- 7- 11

Const. Co.      v.   Kent Sch. Dist. No. 415, 79 Wn.          App.     841, 848, 917 P. 2d 1086 ( 1995) ( quoting

Animal Welfare Soc' y v. Univ. of Wash., 54 Wn. App. 180, 187, 773 P. 2d 114 ( 1989)).

         BG Plaza LLC makes several arguments regarding the superior court' s attorney fee award.

BG Plaza LLC claims the superior court erred by ( 1) awarding more fees than were claimed, 12 ( 2)

awarding fees for time         spent on   the seniority   claim and    companion    case, (   3) awarding fees for time

spent   in   bankruptcy proceedings, ( 4)         awarding fees   on   duplicative time, ( 5)   awarding fees for time

spent after it decided the summary judgment motions, and ( 6) awarding costs that are considered

normal office overhead.

          Ray and Jessen submitted detailed time sheets of their attorney fees and costs, which

segregated out any charges not related to the right of first refusal claim or its claim for attorney

fees.    Upon review of these times sheets and the parties arguments regarding attorney fees, the

superior court disallowed fees for services unrelated to the right of first refusal claim or attorney

fee   request.       See CP   at   1844 ( " The   Court will not and did not award fees and costs relating to

unsuccessful claims, and it has for that reason required that Sellers segregate time attributable to

Plaintiffs seniority      claim. ").     With the exception of disallowing one attorney' s time spent on the

summary judgment motion, the superior court found that the time Ray' s and Jessen' s attorneys

claimed they spent was not duplicative and that "it is reasonable that attorneys of different abilities,

often with one attorney supervising another, will act on behalf of the client and each will bill the
client   accordingly."        CP at 1837.

 12 On remand for entry of findings of fact and conclusions of law for the attorney fees award, .the
 superior court corrected this error and thus, we do not address this argument.

                                                             17
43874- 741

           Also, except as specifically disallowed, the superior court determined that the amount of

time Ray' s and Jessen' s attorneys spent to accomplish their tasks was reasonable " in light of the

amount at stake, the somewhat complex issues presented, and the need to address ( often in depth)

each of    the      issues   raised   by   Plaintiff' s   attorneys."   CP    at   1838.   The superior court reasonably

allowed fees for time spent in bankruptcy court on the right of first refusal issues because the

 amount requested include[ d] time spent on activities that would be recoverable if those activities

were conducted in" the superior court. CP at 1839. Finally, the superior court found that " it is an

acceptable and common practice                 to   charge costs   separately from fees — i.e., not to include all costs .

as overhead ... [        and] that it was a common practice of the Bullivant Houser Bailey law firm .. .

to bills   costs     separately from fees."         CP at 1837. We hold the superior court' s findings and award

of attorney fees and costs in the amount of $82, 803. 67 were not manifestly unreasonable or based

on untenable grounds.            We affirm the superior court' s attorney fee award.

           B.          OFFSET

           BG Plaza LLC argues it was entitled to an offset of attorney fees for prevailing on the

jurisdiction issue in the Ninth Circuit. We disagree.

           In   a    contract   dispute      where " several       distinct   and   severable   claims"   are at issue, the

proportionality appropriate is more appropriate. Marassi v. Lau, 71 Wn. App. 912, 917, 859 P. 2d
605 ( 1993),        abrogated on other grounds by Wachovia SBA Lending, Inc. v. Kraft, 165 Wn.2d 481,

200 P. 3d 683 ( 2009).          In the proportionality approach, the plaintiff is awarded attorney fees for the

claims it prevails upon and likewise the defendant for the claims it prevails upon and then the

awards are offset. Marassi, 71 Wn. App. at 918.

                                                                   18
43874- 7- 11

          A prevailing party is one who receives an affirmative judgment in its favor. Cornish Coll.

of the Arts    v.   1000 Va. Ltd. P 'ship, 158 Wn.            App.   203, 231, 242 P. 3d 1 (         2010);   see also Parmelee

v.   O' Neel, 168 Wn.2d 515, 522, 229 P. 3d 723 ( 2010) ( "` a                    plaintiff prevails when actual relief on

the merits of his claim materially alters the legal relationship between the parties by modifying the

defendant'     s   behavior in      a   way that   directly benefits    the plaintiff ") (       quoting Farrar v. Hobby, 506

U. S. 103, 111 - 12, 113 S. Ct. 566, 121 L. Ed. 2d 494 ( 1992)).                   A "victory in a preliminary injunction

is not sufficient to make a plaintiff a prevailing party where that plaintiff eventually loses on the

merits, as the victory is ` ephemeral' and the plaintiff has merely won the battle but lost the war."

Parmelee, 168 Wn.2d at 523 ( quoting Sole v. Wyner, 551 U.S. 74, 86, 127 S. Ct. 2188, 167 L. Ed.

2d 1069 ( 2007)).          A defendant who successfully defends may also be a prevailing party. Cornish,

158 Wn.     App.      at   231. "   If neither wholly prevails, then the determination of who 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, 13.1 Wn.2d 612, 633, 934 P. 2d 669 ( 1997)

 citing Marassi, 71 Wn. App. at 916).

          Neither party wholly or substantially prevailed in the Ninth Circuit. BG Plaza LLC initially
filed its   right of       first refusal   and    seniority   claims    in   state court.    Ray and Jessen had the claims

transferred to the bankruptcy court. BG Plaza LLC contested the bankruptcy court' s jurisdiction,

but the bankruptcy court asserted jurisdiction over the right of first refusal claim and declined to
assert   jurisdiction       over    the seniority     claim   because it     concluded      it   was not ripe.   The bankruptcy

court granted summary judgment in Ray' s and Jessen' s favor on the right of first refusal claim,

which the bankruptcy appellate panel affirmed. The Ninth Circuit held the bankruptcy court and

bankruptcy appellate panel lacked jurisdiction to decide the claims and vacated the judgments.

Although BG Plaza LLC successfully argued the jurisdiction issue to the Ninth Circuit, it is not a

                                                                   19
43874- 7- 11

prevailing party because it did not receive an affirmative judgment or relief. BG Plaza LLC did
not prevail on the merits of its substantive right of first refusal and seniority claims in the

bankruptcy      court.    It had to relitigate the same claims in state court where it ultimately lost.

Accordingly, we hold that the superior court did not abuse its discretion by not awarding an offset.

IV.     ATTORNEY FEES ON APPEAL

        Pursuant to the BG Plaza Agreement attorney fees provisions and RAP 18. 1, Ray, Jessen,

and   BG Plaza LLC        request   attorney fees   on appeal.         We may award attorney fees on appeal if

                                                    the               is                   to RAP 18. 1(   a)."   Malted
 allowed   by   statute, rule, or contract and            request          made pursuant

Mousse, Inc.     v.   Steinmetz, 150 Wn.2d 518, 535, 79 P. 3d 1154 ( 2003).                The BG Plaza Agreement

provisions authorize an award of attorney fees and costs to the prevailing party in the event of any

litigation arising out of the BG Plaza Agreement.

        BG Plaza LLC' s right of first refusal claim arose out of the BG Plaza Agreement.

Therefore, because Ray and Jessen prevail on the right of first refusal claim, we award them

attorney fees on appeal as to that claim. BG Plaza LLC' s seniority claim did not arise out of the

BG Plaza Agreement; thus, no parties are entitled to attorney fees on appeal for the seniority claim.

Ray and Jessen also prevailed on their attorney fee claim and are entitled to attorney fees as to

their attorney fee arguments on appeal.

         We affirm the superior court' s grant of summary judgment on the right of first refusal claim

because the bankruptcy court' s sale order was final, and thus BG Plaza LLC' s claim is precluded
under   the doctrine of collateral     estoppel and       as   an   improper   collateral challenge.   We also affirm

the superior court' s denial of summary judgment on the seniority issue because BG Plaza LLC

does not have an ownership interest in the BG Plaza Property because the sale of the BG Plaza

Property has      not    closed.    Thus, BG Plaza LLC' s seniority claim is merely hypothetical and

                                                               20
43874- 7- 11

speculative and does not present an actual, present, and existing dispute that is ripe for review. We

also affirm the superior court' s award of attorney fees and costs for Ray and Jessen.

        A majority of the panel having determined that this opinion will not be printed in the

Washington Appellate Reports, but will be filed for public record in accordance with RCW 2. 06. 040,

it is so ordered.

We concur:

        a,
         47

        Hunt, J.

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