Court Opinion

ID: 4912350
Source: CourtListenerOpinion
Date Created: 2021-09-20 18:23:59.31076+00
Date Added: 2024-06-11T08:13:40.203215
License: Public Domain

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

JAMES W. CHERBERG AND NAN               )      No. 81482-6-I
CHOT CHERBERG,                          )
                                        )      DIVISION ONE
                    Respondents,        )
                                        )      ORDER GRANTING
                    v.                  )      RESPONDENTS’ MOTION
                                        )      TO MODIFY OPINION AND
HAL E. GRIFFITH and JOAN L.             )      ORDER WITHDRAWING AND
GRIFFITH, husband and wife,             )      AND SUBSTITUTING OPINION
                                        )      AND ORDER DENYING APPELLANTS’
                    Appellants.         )      MOTION FOR RECONSIDERATION
                                        )

      Respondents James and Nan Chot Cherberg filed a motion to modify the court’s

opinion filed on August 16, 2021. Appellants Hal and Joan Griffith also moved to

reconsider the court’s August 16, 2021 opinion. The panel has determined that the

respondents’ motion to modify the opinion should be granted and that the opinion filed

on August 16, 2021 shall be withdrawn and substituted with a new unpublished opinion.

The panel has also determined that the appellants’ motion for reconsideration is denied.

      Now, therefore, it is hereby

      ORDERED that the respondents’ motion to modify the opinion is granted and that

the opinion filed on August 16, 2021 shall be withdrawn and substituted with a new

unpublished opinion. It is also

      ORDERED that the appellants’ motion for reconsideration is denied.
No. 81482-6-I/2

                      FOR THE COURT:

                  2
          IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

JAMES W. CHERBERG AND NAN                      )        No. 81482-6-I
CHOT CHERBERG,                                 )
                                               )
                       Respondents,            )
                                               )        DIVISION ONE
                       v.                      )
                                               )
HAL E. GRIFFITH and JOAN L.                    )
GRIFFITH, husband and wife,                    )
                                               )        UNPUBLISHED OPINION
                       Appellants.             )
                                               )

       MANN, C.J. — Hal and Joan Griffith appeal the trial court’s findings of fact and

conclusions of law following a bench trial arising from a dock dispute between the

Griffiths and their neighbors, James and Nan Cherberg. The Griffiths argue that

substantial evidence does not support the trial court’s finding that the Griffiths agreed to

the proposed dock or the finding that the Griffiths breached the purchase and sale

agreement (PSA). The Griffiths also contend that the trial court erred in awarding

specific performance, erred in awarding damages unreasonably incurred by the

Cherbergs, and erred in its attorney fee award. We affirm.

         Citations and pin cites are based on the Westlaw online version of the cited material.
No. 81482-6-I/2

                                          FACTS

       The Griffiths have lived on Mercer Island’s northern shore since 1996. In

February 2012, the Griffiths purchased the next-door property from their neighbor

Sandra Dunn. Prior to purchasing the Dunn property, the Griffiths and Dunns shared

the use of a dock that straddled their common property boundary under a joint dock

agreement. After buying the former Dunn property, the Griffiths burdened the property

with two exclusive-use easements that benefitted the Griffiths’ property: an easement

securing the use of the existing dock and an easement securing the exclusive use of a

small promontory between the two properties.

       After recording the easements, the Griffiths listed the property for sale through

real estate agent Kris Robb. The listing specifically stated that it was a “no dock

property.” Robb’s former clients, the Cherbergs, expressed interest in buying the

property. The Cherbergs asked Robb to serve as a dual agent. The Cherbergs wanted

to build a small dock and would need the Griffiths’ cooperation to do so. Robb relayed

to the Griffiths the Cherbergs’ interest in building a small dock. The Griffiths indicated

that they would have no objection to a modest dock as long as it did not interfere with

the use of their own dock.

        On June 5, 2012, the Cherbergs submitted an offer through a PSA. The next

day, the Griffiths accepted the offer by countersigning the purchase and sale

agreement, putting the property under contract pending inspection. The signed

purchase and sale agreement included an addendum providing in part:

       Sellers hereby agree to assist Buyers in their effort to obtain a dock
       permit. They agree not to challenge in any way the Buyers solicitation of
       said permit.

                                          -2-
No. 81482-6-I/3

       Sellers hereby agree to allow Buyers to encroach into the normal 35 foot
       setback between docks to no closer than 25 feet.[1] This may entail
       changing the easement which is in place regarding the landscape on the
       Western most property along the waterfront. Sellers agree to cooperate
       with Buyers in order to obtain a permit for a dock along the Western line of
       the property.

       On June 6, the same day that the parties executed the purchase and sale

agreement, the Cherbergs’ dock contractor, Ted Burns, e-mailed the Cherbergs to

inform them that they would need to enter into a joint use agreement (JUA) with the

Griffiths in order to build a dock:

       [T]he Joint Use Agreement with the [Griffiths] should allow us to be within
       20’ of their existing dock, and it would be even better if we could be within
       15’. In addition, it should address either the removal of the [existing
       floating dock] or the ability to locate within 5’ of the floats.

Burns’s e-mail included a sketch of the proposed dock (New Dock Sketch), a plot

showing the lot lines, and a blank form JUA from the City of Mercer Island.

       On June 13, 2012, the Cherbergs sent the Griffiths a new proposed addendum.

The June 6 e-mail from Burns to Cherberg accompanied the addendum, including the

plot showing the property lines, the New Dock Sketch, and the blank form JUA. The

copy of Burns’s e-mail that the Griffiths received was annotated by Robb with the words,

“This is a general proposal but is not binding but nothing will happen but to code.”

       On June 23, 2012, the parties agreed to and finalized the second addendum,

which provided in part:

       Seller acknowledges receipt of the NEW DOCK email copy from Ted
       Burns outlining the proposed dock Buyer intends to pursue. Seller further
       acknowledges the receipt of a copy of the lateral lines plot from King
       County Records and the proposed Dock sketch.

       1   The Griffiths struck this language before signing.

                                                   -3-
No. 81482-6-I/4

      Seller agrees to remove the floating dock at such time as the Buyer asks
      for it to be removed but not prior to that time and cooperate with Buyer
      and the piling company to pursue a permit in order to obtain the dock.[2]
      Seller further agrees to sign a Joint Use Agreement as attached which will
      allow the Buyer to place the proposed dock within the 35 foot setback
      usually required.

The PSA closed on June 29, 2012. The parties did not execute a JUA at closing.

      Over the next six months, the Cherbergs and Griffiths continued to discuss the

size and location of the Cherbergs’ proposed dock without reaching agreement. On

January 11, 2013, the Cherbergs’ attorney, Charlie Klinge, e-mailed the Griffiths’

attorney, Shannon Sperry, with an update:

      Dock: The dock issues are complex which is typical due to the multiple
      agencies and regulations involved, and of course the narrow site is
      challenging. I talked to Jim [Cherberg] about getting a final dock layout
      that Griffith can review and then make comments on and/or approve. Jim
      has been going through various options with the dock designer to balance
      all the issues: personal desires, neighbors, and agencies. It seemed to
      me that Jim needed to come to conclusions and then present that to the
      Griffiths. So, that will take a bit more time. I think we should let Jim focus
      on finalizing a dock plan. Once Cherberg and Griffith are agreed on the
      dock location, then we can look at the Joint Use Agreement, etc.

      On January 21, James Cherberg wrote to the Griffiths to update them about the

status of the dock’s design:

      l have asked [the dock builder] Seaborn to provide a detailed scaled
      drawing of this location and access to the dock and its acceptability to you.
      In this location it would still be necessary, however, to meet Mercer
      lsland’s Joint Agreement Use (on both sides of the dock). I have Cc’cd
      this e-mail to my attorney to keep him in the loop, as you have requested
      Shannon Sperry review M.I.’s Agreement with him after we’ve agreed on
      the dock location and access.

      2   The Griffiths struck this language before signing.

                                                  -4-
No. 81482-6-I/5

        In April 2013, the Cherbergs applied for a permit with the U.S. Army Corps of

Engineers (Corps) to build a dock, install two ground-based boatlifts, and plant native

shoreline vegetation. 3 The proposed dock drawing submitted to the Corps was similar

to the sketch provided to the Griffiths with the second addendum, but was larger and

approximately 5 feet closer to the Griffiths’ dock.

        In January 2014, the Corps questioned the size and proximity of the proposed

dock to the Griffiths’ dock and resulting interference with the Griffiths’ use of their dock:

        It appears that the Griffiths[’] pier north of the project is on the Cherberg
        property, as you stated. It seems that 18.5 feet would be insufficient room
        for the Griffith family to use their pier, especially since a large pier like that
        could accommodate a larger vessel.

On January 29, Burns replied that “[t]he Proposed pier location was discussed with the

Griffiths as part of purchasing the property and they agreed with the location.”

        In May 2014, the Corps again asked about the proximity: “Does Mr. Griffith have

any objections to the proposed pier?” Burns forwarded this question along to James

Cherberg and asked him for “the wording you’d like me to use in responding to [the

Corps].” Cherberg responded, “Like we talked before, this language to [the Corps] is

fine: ‘Mr. Cherberg intends to construct [a] dock included in the Purchase and Sale

Agreement between himself and [Griffith].’” In July 2014, the Corps issued the permit.

        In November 2014, the Cherbergs’ attorney sent a demand letter for the

execution of a joint use agreement. The demand letter included a proposed joint use

agreement and a copy of the new dock design submitted to the Corps and City of

Mercer Island. The Griffiths refused to sign the proposed joint use agreement. Instead,
        3Proposals to construct new docks are subject to review by the Corps as well as the City of
Mercer Island. The Corps reviews proposed docks for, among other factors, their impact on navigability
and feasibility of vessels to approach and tie up to existing docks.

                                                -5-
No. 81482-6-I/6

the Griffiths proposed the Cherbergs build a smaller dock with greater separation from

their own dock. The Cherbergs rejected the Griffiths’ proposed dock.

        The Cherbergs filed suit in May 2015, seeking specific performance to compel

the Griffiths to sign the joint use agreement. Following discovery and briefing, in April

2016 the trial court granted the Cherbergs’ motion for summary judgment, finding that

the Griffiths had breached the PSA. The trial court then denied the Griffiths’ motion for

reconsideration and granted the Cherbergs’ motion for specific performance. The

Griffiths appealed. We reversed the order granting the Cherbergs’ motion for summary

judgment and ordering specific performance, and remanded for trial. 4

        Following a bench trial, the court concluded that the Griffiths agreed to the New

Dock Sketch design provided by Burns. The court also found that the Griffiths breached

the PSA. The court awarded $121,346.10 in damages to the Cherbergs. The court

also awarded the Cherbergs $502,935.00 in attorney fees and $27,739.90 in costs. The

Griffiths appeal.

                                              ANALYSIS

        Following a bench trial, we review whether the findings of fact are supported by

substantial evidence and whether those findings support the conclusions of law. Pub.

Util. Dist. No. 2 of Pacific County. v. Comcast of Wash., 184 Wn. App. 24, 48, 336 P.3d

65 (2014). Substantial evidence means sufficient evidence sufficient to persuade a

rational, fair-minded person that the premise is true. Pub Util. Dist., 184 Wn. App. at 48.

        4 Cherberg v. Griffith, No. 75276-6-I (Wash. Ct. App. Nov. 20, 2017) (unpublished),
https://www.courts.wa.gov/opinions/pdf/752766.pdf.

                                                -6-
No. 81482-6-I/7

Unchallenged findings of fact are verities on appeal. State v. O’Neill, 148 Wn.2d 564,

571, 62 P.3d 489 (2003).

       We review the evidence in the light most favorable to the prevailing party and this

court defers to the trier of fact on questions of witness credibility or conflicting testimony.

Weyerhaeuser v. Tacoma-Pierce County Health Dep’t, 123 Wn. App. 59, 65, 96 P.3d

460 (2004). “The trial court’s determination on conflicting evidence is decisive, and this

court cannot substitute its judgment for that of the trial court, even if we were of the

opinion that the factual dispute should have been resolved the other way.” Du Pont v.

Dep’t of Lab. & Indus., 46 Wn. App. 471, 479, 730 P.2d 1345 (1986).

   A. Substantial Evidence — New Dock Sketch

       The Griffiths challenge the trial court’s determination that they agreed to the New

Dock Sketch, arguing that substantial evidence does not support findings 1.63, 1.66,

and 1.68. We disagree.

The trial court found:

       1.63 The second addendum uses the word “proposed” three times: “Seller
       acknowledges receipt of the New Dock email copy from Ted Burns
       outlining the proposed dock”; Seller further acknowledges the receipt of a
       copy of the lateral lines plot from King County records and the proposed
       dock sketch”; “Seller further agrees to sign a Joint Use Agreement as
       attached which will allow the Buyer to place the proposed dock within the
       35-foot setback usually required.”

              ....

       1.65 . . . There are four, separate clauses in the written, signed, second
       addendum, say that this is the dock that is being proposed and this is the
       dock that the buyer intends to pursue.

       1.66 The proposed dock agreement is fully defined: This dock is 21 feet
       from the Griffiths’ dock at the closest point, it is 75 over the water, and it
       has a U-shape at the end.

                                           -7-
No. 81482-6-I/8

       1.67 The PSA was voluntarily signed by all parties; the Griffiths cannot
       now claim they did not read it or were ignorant of its contents.

       1.68 By signing the second addendum, acknowledging receipt of the
       proposed dock and the details related to the dock, the parties understood
       the proposal and agreed that the terms of the PSA would apply to the
       proposal.

       When reviewing contracts on appeal, “[t]he touchstone of contract interpretation

is the parties’ intent.” Tanner Elec. Co-op. v. Puget Sound Power & Light Co., 128

Wn.2d 656, 674, 911 P.2d 1301 (1996). Washington follows the “objective

manifestation theory” of contract interpretation. Viking Bank v. Firgrove Commons 3,

LLC, 183 Wn. App. 706, 712-13, 334 P.3d 116 (2014). We give “words in a contract

their ordinary, usual, and popular meaning unless the entirety of the agreement clearly

demonstrates a contrary intent.” Viking Bank, 183 Wn. App. at 713.

       We also apply the “context rule” from Berg v. Hudesman, 115 Wn.2d 657, 669,

801 P.2d 222 (1990) to determine the parties’ intent. This rule allows the court to

consider the context surrounding the execution of the contract, including the

consideration of extrinsic evidence. Viking Bank, 183 Wn. App. at 713. “The court may

consider (1) the subject matter and objective of the contract, (2) the circumstances

surrounding the making of the contract, (3) the subsequent conduct of the parties to the

contract, (4) the reasonableness of the parties’ respective interpretations, (5)

statements made by the parties in preliminary negotiations, (6) usages of trade, and (7)

the course of dealing between the parties.” Spectrum Glass Co., Inc. v. Pub. Util. Dist.

No. 1 of Snohomish County, 129 Wn. App. 303, 311, 119 P.3d 854 (2005).

                                          -8-
No. 81482-6-I/9

        When interpreting the contract between the Cherbergs and the Griffiths, the court

followed the context rule from Berg to consider the parties’ intent, concluding that the

Griffiths agreed not to object to the proposed dock as indicated in the two addendums

and the New Dock e-mail and sketch. The court relied on the PSA, the first addendum,

the second signed addendum, and the e-mails between the parties. Both the

Cherbergs and Griffiths testified at trial about the execution of the second addendum,

and the court found the Cherbergs’ versions of events more credible. The court

concluded that all of the negotiations between the Cherbergs and Griffiths were not

attempts to define an undefined agreement, but rather attempts by the Cherbergs to

enforce the agreement.

        Ultimately, the court’s decisions about the intent of the parties was a credibility

determination that we will not disturb on appeal. The Griffiths agreed to allow the

Cherbergs to build a dock, and the two parties negotiated the terms of that contract

before signing the second addendum, including a plan for the parameters of the dock.

        Further, the unchallenged findings of fact support the trial court’s conclusions that

the Griffiths agreed to assist, cooperate with, and not challenge a final version of the

New Dock Sketch, for a dock within the 35-foot setback and near the westernmost

property line, which may require alteration of the easement. No evidence suggests that

the parties needed a fully engineered drawing of the proposed dock to execute the PSA.

When we consider the evidence in the light most favorable to the Cherbergs, there is

substantial evidence to support the finding that the Griffiths agreed to the proposed

dock.

                                            -9-
No. 81482-6-I/10

   B. Substantial Evidence — Breach of PSA

      The Griffiths next argue that substantial evidence does not support the court’s

finding that they breached the PSA. We disagree.

   The court found:

      1.80 When the appropriate request was made, the specific language in the PSA
      is that “we will not object” and “we will agree,” and the Griffiths did not comply
      with that promise. As such, any objection to the dock ultimately proposed to the
      City (Exhibit 421), was a breach because this proposal was fully consistent with
      the New Dock email and sketch.

      1.81 The dock the Cherbergs proposed to the City (Exhibit 431) is fairly close to
      the New Dock email and sketch; it is 66 feet or less over water, which is shorter
      than agreed to in the PSA as acknowledged by receipt of the New Dock email
      and sketch, and further away from the Griffiths’ dock than the New Dock email
      and sketch. In sum it is better for the Griffiths than the dock in the New Dock
      email and sketch, yet they still objected to it.

Based on its findings, the court concluded:

      2.8 The Griffiths’ did not breach the PSA by their initial objection to the
      Corps, because the dock permitted by the Corps is different than, and not
      as favorable to, the Griffiths as the proposed dock in the New Dock email
      and sketch.

      2.9 The Griffiths did breach the PSA beginning on April 23, 2015, by
      objecting to the dock proposed to the City (Exhibit 431; Exhibit 446) as it is
      66 feet or less over water, shorter than agreed to in the New Dock email
      and sketch, and further away from the Griffiths’ dock than the New Dock
      email and sketch.

      2.10 On July 27, 2015, the Griffiths breached the PSA by Rich Hill, the
      Griffiths’ attorney, writing to the City to reiterate the Griffiths’ objections to
      the proposed dock and their unwillingness to sign the JUA.

The Griffiths contend that they cannot be liable for breach of contract, because the

Cherbergs first breached the contact by pursuing permits for a dock that was bigger

than the New Dock Sketch.

                                            -10-
No. 81482-6-I/11

        Contracts have an implied covenant of good faith and fair dealing which requires

each party to fully cooperate with the other so that each party may obtain the full benefit

of the performance. Metro. Park Dist. of Tacoma v. Griffith, 106 Wn.2d 425, 437, 723

P.2d 1093 (1986). The Griffiths’ argument that the Cherbergs acted in bad faith, thus

predating their own breach, is without merit. Testimony on both sides supports the

Cherbergs’ good faith belief that the New Dock Sketch and the dock that the Cherbergs

presented to the Corps were similar. 5

        The Griffiths contend that they acted in good faith by proposing dock designs that

fell within the criteria agreed upon by the parties. This agreement centers on their

contention that there was no agreement on the specific dock. As discussed above,

however, there is substantial evidence to support the trial court’s findings. Because the

trial court found that the New Dock Sketch was agreed upon by the parties, the Griffiths’

continued objection to the City over the Cherbergs’ proposed dock, and the Griffiths’

continued refusal to sign the JUA, provide substantial evidence to support the trial

court’s finding of breach.

    C. Specific Performance

        The Griffiths argue that the court erred by awarding specific performance. We

disagree.

        The trial court found that:

        5 Hal Griffith stated, “They’re very similar in most regards.” A professional engineer, Jeffrey
Layton, retained by the Cherbergs’ attorneys testified as follows:
                [PLAINTIFF’S ATTORNEY]: So the dock that was permitted by the Corps is
                actually virtually identically long to the Ted Burns PSA dock; is that right?
                [LAYTON]: Yes, I agree with that.
                [PLAINTIFF’S ATTORNEY]: Not virtually, it is?
                [LAYTON]: It is. It’s the same.

                                                  -11-
No. 81482-6-I/12

       2.15 The Cherbergs are not entitled to have a dock pursuant to the PSA. They
       are entitled to have the Griffiths support the proposed dock in the New Dock
       email and sketch, to refrain from obstructing the permitting process and building
       of the dock, and to sign the JUA.

The court ordered specific performance consistent with this finding:

       2.19 The Griffiths shall sign the JUA and are ordered not to object to any dock
       that is no closer to their property line than agreed to in the New Dock email
       sketch, and no closer to the Griffiths’ dock at any point than agreed to in the New
       Dock email sketch, and no closer to any part of the ELL at the end of their dock
       than agreed to in the New Dock email sketch.

       2.20 The Griffiths are also ordered to agree to modification of the easement as
       necessary to accommodate the Cherbergs’ dock within the exclusive landscape
       easement area as stated in the first addendum and in accordance with the “New
       Dock” email and sketch and the terms of these findings.

       When a party seeks specific performance of a contract, rather than damages, a

higher standard of proof must be met: “clear and unequivocal evidence that leaves no

doubt as to the terms, character, and existence of the contract.” Kruse v. Hemp, 121

Wn.2d 715, 722, 853 P.2d 1373 (1993). “Specific performance is a proper remedy only

if a valid contract exists, a party has or is threatening to breach the contract, the terms

of the contract are clear, and the contract is not the product of fraud or unfairness.”

Pardee v. Jolly, 163 Wn.2d 558, 569, 182 P.3d 967 (2008).

       If a court cannot adequately compensate a party’s loss with monetary damages,

then a court may use its broad equitable powers to compel a party to specifically

perform its promise. Crafts v. Pitts, 161 Wn.2d 16, 23-24, 162 P.3d 382 (2007). Within

these equitable powers, the court can order a party to convey a unique parcel of land.

Pitts, 161 Wn.2d at 25.

       The court found that the Griffiths agreed to assist with and not challenge the New

Dock Sketch, and that the dock is specifically defined. Substantial evidence supports

                                           -12-
No. 81482-6-I/13

these terms of the contract. Specific performance is the logical way to enforce the

terms of the PSA. The area for a potential dock is unique to the Cherbergs, as they

purchased the property with the specific intention of building a dock on that property.

Monetary damages cannot remedy the Cherbergs, only the pursuit of their dock can.

      As the court correctly found, the PSA does not guarantee the Cherbergs a dock.

The dock is ultimately subject to permitting requirements. Rather, the terms of the

agreement require the Griffiths to support the proposed dock, not to challenge the

permitting process, modify the easement as needed, and to sign the JUA. Therefore,

the trial court properly ordered specific performance.

   D. Damages

      The Griffiths next contend that the trial court erred by awarding damages as they

were unreasonably incurred by the Cherbergs. We disagree.

      After the Griffiths refused to sign the JUA on April 23, 2015, the Cherbergs

attempted to permit a dock through a new Mercer Island law that repealed the

requirement of a JUA but only allowed one noncommercial, resident dock per residential

waterfront lot. MICC 19.07.110(E)(4). Mercer Island, the Shoreline Hearings Board,

and the King County Superior Court rejected the proposed permit. The Griffiths

challenged the permit in each venue.

      The trial court awarded the Cherbergs damages for their efforts to obtain

permitting after the Griffiths breached the JUA on April 23, 2015. This included an

award to the Cherbergs: $87,866.30 for their attorney, Charles Klinge’s, assistance in

seeking and then appealing the decisions denying the permit; $28,127.00 for Jeffrey

Layton’s expert engineering services; $1,366.00 for Scott Holsapple’s landscape

                                         -13-
No. 81482-6-I/14

architecture fees; and $3,986.75 for Triad Engineering’s engineering surveying fees.

The total damages award was $121,346.10. The court awarded the damages under the

prevailing party fees clause, and under the theory of equitable indemnity.

       The Griffiths argue that this award was unreasonable because the pursuit of this

permit was futile under the City of Mercer Island’s new law. The Griffiths also contend

that the $87,866.30 awarded to the Cherbergs for their land use attorney was improper.

They rely on Maytown Sand & Gravel, LLC v. Thurston County, 191 Wn.2d 392, 437,

423 P.3d 223 (2018) (attorney fees not available as damages absent a contract, statute,

or recognized ground in equity), abrogated on other grounds by Yim v. City of Seattle,

194 Wn.2d 682, 451 P.3d 694 (2019).

       We review de novo the question of whether damages were proper for the cause

of action. Bill & Melinda Gates Found. v. Pierce, 15 Wn. App. 2d 419, 436, 475 P.3d

1011 (2021). We review the reasonableness of a damage award for an abuse of

discretion. Aecon Bldgs. Inc. v. Vandermolen Constr. Co., 155 Wn. App. 733, 742, 230

P.3d 594 (2009).

                                     1. Basis for Damages

       While the trial court relies on the PSA as a basis for damages, we disagree. The

PSA provides “if Buyer or Seller institutes suit against the other concerning this

Agreement the prevailing party is entitled to reasonable attorney’s fees and expenses.”

This provision, relied on by the trial court, does not support the award of damages. The

Cherbergs sought alternative permitting through the new statute, which did not relate to

the parties’ agreement in the PSA. Further, these damages awarded were not attorney

fees and expenses.

                                          -14-
No. 81482-6-I/15

        Alternatively, the trial court awarded damages under the theory of equitable

indemnity. When the natural and proximate consequences of a wrongful act of a

defendant involve the plaintiff in litigation with others, there may be a recovery of

damages for reasonable expenses incurred in the litigation, including attorney fees.

Manning v. Loidhamer, 13 Wn. App. 766, 769, 538 P.2d 136 (1975). This theory of

indemnification requires that “the original suit generating the expenses must be

instituted by a third party not connected with the original transaction.” Loidhamer, 13

Wn. App. at 769. To create liability, three elements are necessary: (1) a wrongful act or

omission by A toward B; (2) the act or omission exposes or involves B in litigation with

C; and (3) C was not connected with the initial transaction or event. Loidhamer, 13 Wn.

App. at 769. Because the Cherbergs themselves initiated the permitting processes, the

doctrine of equitable indemnification does not apply. 6

        The Cherbergs contend that equitable principles support their award of damages.

“Generally, the measure of damages for breach of contract is that the injured party is

entitled to recovery of all damages naturally accruing from the breach, and to be put in

        6 In Wharf Rest., Inc. v. Port of Seattle, 24 Wn. App. 601, 614, 605 P.2d 334 (1979), a restaurant
sued the Port of Seattle when the Port leased its premises to another operator after the restaurant failed
to timely exercise its option to renew its lease. The restaurant commenced and prevailed in an action
against the Port and its new lease, but the court did not award the restaurant fees based on equitable
indemnity:

        The Wharf does, however, cite our decision in Manning v. Loidhamer, 13 Wn. App. 766,
        538 P.2d 136 (1975) in support of its argument that it is entitled to attorneys’ fees and
        actual costs because it was the Port’s refusal to negotiate with it or to renew the Wharf’s
        old lease that caused the Wharf to become embroiled in litigation with The Wharfside
        Companies. In Wilber v. Western Properties, 22 Wn. App. 458, 467, 589 P.2d 1273,
        (1979), we held: “(a)s we made clear in Manning v. Loidhamer, Supra, in order to recover
        attorneys' fees and . . . costs, the suit generating them must be instituted by a third party
        unconnected with the transaction.” That was not the situation here. It was the Wharf
        itself, and not a third party that instituted the present action. The Wharf is not entitled to
        recover actual costs and attorneys’ fees.

Wharf Rest., Inc., 24 Wn. App. at 614.

                                                  -15-
No. 81482-6-I/16

as good a position as he would have been in had the contract been performed. Nw.

Land & Inv., Inc. v. New W. Fed. Sav. & Loan Ass’n, 57 Wn. App. 32, 43, 786 P.2d 324

(1990). The trial court has broad discretion in fashioning equitable relief, which includes

awarding consequential damages in addition to specific performance. Cornish Coll. of

the Arts v. 1000 Virginia Ltd. P’ship, 158 Wn. App. 203, 230, 242 P.3d 1 (2010).

“Consequential damages awarded in addition to specific performance are not awarded

for breach of the contract. Rather, they are awarded at the equitable discretion of the

trial court in an attempt to make the nonbreaching party whole.” Cornish Coll. of the

Arts, 158 Wn. App. at 228. 7

       The damages from the Cherbergs’ pursuit of an alternative permitting process

naturally occurred from the breach. After the Griffiths continually challenged the

Cherbergs’ attempts to obtain a dock pursuant to the signed PSA, the Cherbergs found

a new potential avenue to obtain a dock permit without the Griffiths’ ability to interfere.

Jim Cherberg attended a Mercer Island City Council meeting to obtain clarification of

how the new permitting rules would be applied. Based on questioning by a councilman

who was aware of complications with particular docking circumstances on Mercer

Island, and because the Cherbergs were unable to use the dock on their property due to

the exclusive landscape easement, the Cherbergs had a good faith belief that they

could obtain a permit under the new code.

       But for the Griffiths’ breach of the PSA, the Cherbergs would not have had to

pursue the alternative permitting. If the Cherbergs had been granted the new permit,

        7 See also Rekhi v. Olason, 28 Wn. App. 751, 757, 626 P.2d 513 (1981) (“The damages are not

awarded for breach of contract, but are awarded so that the purchaser, unable to have exact performance
because of the delay, may have an accounting of any losses caused by the delay, so that he can be
restored as nearly as possible to the position he would have been in had the seller performed.”).

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they would not have sought specific performance of the PSA. The Griffiths challenged

the Cherbergs through both avenues. To put the Cherbergs in the position had the

breach not occurred, both specific performance and damages were necessary to ensure

that the Cherbergs could apply for the agreed-upon dock, and to compensate them for

their previous attempts to permit that dock. The court’s broad equitable discretion to

award those damages, including the cost of the Cherbergs’ attorney, form an

appropriate basis for damages.

                                  2. Reasonableness of Award

       The damages awarded to the Cherbergs were also reasonable. The Cherbergs

provided stipulated exhibits of the invoices of their land use attorney, their engineer,

their architect, and their surveyor. The court determined that the Griffiths’ first breach—

April 23, 2015—was the trigger for the award, and thus limited the damages to those

incurred after the trigger. Because there was a legal basis for awarding damages, and

because the Griffiths cannot prove an abuse of the court’s discretion in awarding

damages, we affirm the damages award.

   E. Attorney Fees Award

       The Griffiths argue that the court erred by awarding the Cherbergs attorney fees

based on the prevailing party theory. We apply a two-part standard of review to a trial

court’s award of attorney fees: “(1) we review de novo whether there is a legal basis for

awarding attorney fees by statute, under contract, or in equity and (2) we review a

discretionary decision to award or deny attorney fees and the reasonableness of any

attorney fee award for an abuse of discretion.” Gander v. Yeager, 167 Wn. App. 638,

647, 282 P.3d 1100 (2012). We will not award attorney fees as part of the cost of

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litigation in absence of a contract, statute, or recognized ground of equity. Durland v.

San Juan County, 182 Wn.2d 55, 76, 340 P.3d 191 (2014).

        The Cherbergs originally brought causes of action for quiet title, ejectment,

breach of contract, and negligent misrepresentation. The court dismissed the negligent

misrepresentation claim on summary judgment. After the court granted the Cherbergs’

motion for summary judgment in 2016, the parties agreed to dismiss the balance of the

claims.

        In addition to the damages awarded, the trial court also awarded the Cherbergs

reasonable attorney fees. In their motion for prevailing party fees, the Cherbergs

argued that the dismissal of any claims before trial does not entitle the Griffiths to a

proportionality offset, and that the allegations and evidence were integral to trial. The

Cherbergs requested: $507,980.15 for Frey Buck’s attorney fees; $140,942.25 for

Klinge’s attorney fees, and $27,739.90 in costs. The Griffiths opposed the fee award,

contending that the Cherbergs did not segregate the recoverable fees from those

incurred in prosecuting the dismissed claims.

        The trial court conducted a lodestar8 analysis and found the Cherbergs’ attorney

hourly rates were reasonable. The trial court awarded the Cherbergs: Frey Buck’s

attorney fees of $487,522.00; Klinge’s attorney fees of $15,413.00, 9 and costs of

$27,739.90 as “reasonable and necessary and directly related to the Cherbergs’ efforts

       8 The court determines reasonable attorney fees by calculation of the “‘lodestar,’ which is the

number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate.” 224
Westlake, LLC v. Engstrom Properties, LLC, 169 Wn. App. 700, 734, 281 P.3d 693 (2012).
       9 The court noted that these fees awarded to Klinge had not been previously awarded as

damages.

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to overcome the Griffiths’ breach of contract.” In sum, the court awarded $502,935.00

in attorney fees and $27,739.90 in costs.

       The PSA provides for attorney fees and costs to the prevailing party. The

prevailing party is the one who receives judgment in that party’s favor. Blair v.

Washington State Univ., 108 Wn.2d 558, 571, 740 P.2d 1379 (1987). If attorney fees

are recoverable for only a portion of the party’s claims, “the award must properly reflect

a segregation of the time spent on issues for which fees are authorized from time spent

on other issues.” Loeffelholz v. Citizens for Leaders with Ethics & Accountability Now

(C.L.E.A.N.), 119 Wn. App. 665, 690, 82 P.3d 1199 (2004). An exception is available if

no reasonable segregation can be made. Loeffelholz, 119 Wn. App. at 691. If “the trial

court finds the claims to be so related that no reasonable segregation of successful and

unsuccessful claims can be made, there need be no segregation of attorney fees.”

Loeffelholz, 119 Wn. App. at 691.

       The Griffiths’ claim that the Cherbergs were not entitled to fees is without merit.

Although the court did dismiss the negligent misrepresentation claim on summary

judgment, the actual dispute between the parties was resolved in the breach of contract

claim. The Cherbergs prevailed on that claim and, under the PSA, are entitled to

prevailing party fees.

       The trial court “must supply findings of fact and conclusions of law sufficient to

permit a reviewing court to determine why the trial court awarded the amount in

question.” SentinelC3, Inc., 181 Wn.2d 127, 144, 331 P.3d 40 (2014). Although the

court trial did not enter detailed findings of fact outlining its calculation of the fee award,

the court did not abuse its discretion in the amount of attorney fees awarded. The

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Cherbergs provided extensive evidence to support their motion for fees, and the court

clearly considered what amount was appropriate, ultimately awarding the Cherbergs

less fees than requested and reducing Klinge’s fees based on the damage award. 10

        Affirmed.

WE CONCUR:

         10 Both parties request attorney fees on appeal. Pursuant to the prevailing party provision of the

PSA, the prevailing party is entitled to reasonable attorney fees and costs on appeal. We award
reasonable attorney fees and costs on appeal to the Cherbergs subject to their compliance with RAP
18.1(d).

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