Court Opinion

ID: 4326750
Source: CourtListenerOpinion
Date Created: 2018-11-01 15:48:32.175403+00
Date Added: 2024-06-11T14:47:05.438752
License: Public Domain

FILED
                                                                       November 1, 2018
                                                                 In the Office of the Clerk of Court
                                                                WA State Court of Appeals, Division III

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

J.H. PROPERTIES,                               )
                                               )        No. 35527-6-III
                     Appellant,                )
                                               )
       v.                                      )
                                               )
BILLY E. THOMPSON, AND ALL                     )        UNPUBLISHED OPINION
OTHER OCCUPANTS,                               )
                                               )
                     Respondents.              )

       SIDDOWAY, J. — After losing its unlawful detainer action against Billy E.

Thompson, J.H. Properties objected to his request for an award of attorney fees. It

argued that Mr. Thompson breached a “no smoking” provision of his lease and that it had

lost its unlawful detainer action solely because it was found to have waived the breach by

accepting rent. The trial court awarded the fees. Its order awarded them to Northwest

Justice Project, which had represented Mr. Thompson in the action, and identified

Northwest Justice Project as the judgment creditor.

       Approximately three weeks after entry of the order, Mr. Thompson died

unexpectedly. J.H. Properties then filed this appeal in which it for the first time

challenges the trial court’s jurisdiction to award fees, the reasonableness of the award

amount, and Northwest Justice Project’s standing to appeal.
No. 35527-6-III
J.H. Properties v. Thompson

       We decline to consider issues raised for the first time on appeal. We hold that the

order refusing to modify our commissioner’s decision that Northwest Justice Project

could be substituted as the appellant is final and binding. We affirm the trial court’s

order and award Northwest Justice Project its reasonable attorney fees and costs on

appeal subject to compliance with RAP 18.1(d).

                       FACTS AND PROCEDURAL BACKGROUND

       On May 11, 2017, J.H. Properties filed a complaint for unlawful detainer against

Billy E. Thompson, alleging he had violated no smoking provisions of his lease. Mr.

Thompson, represented by Northwest Justice Project, filed an answer in which he

asserted waiver, among other affirmative defenses. At a show cause hearing on May 30,1

J.H. Properties requested a continuance to obtain information about rent payment to

respond to the waiver defense. The court granted a one-week continuance.

       In a response to the waiver defense, J.H. Properties argued to the court that First

Union Management, Inc. v. Slack, 36 Wash. App. 849, 679 P.2d 936 (1984) held that “[a]

landlord does not waive non-monetary breaches . . . by taking a rent payment from the

tenant where the tenant is given notice that acceptance of rent is not a waiver of the

preceding or existing breach.” Clerk’s Papers (CP) at 88 (Finding of Fact 20). At the

continued show cause hearing on June 5, the trial court orally ruled that J.H. Properties’

acceptance of rent did not constitute a waiver of any breach of the lease by Mr.

       1
           All of the trial court proceedings took place in 2017.

                                                2
No. 35527-6-III
J.H. Properties v. Thompson

Thompson but that an issue of fact remained as to whether Mr. Thompson had breached.

It set the matter for an evidentiary hearing.

       At the evidentiary hearing that took place thereafter, Mr. Thompson persisted in

his argument of waiver, and the trial court reversed its position. In findings of fact that

are not challenged on appeal, the trial court found that following J.H. Properties’ service

in February and April 2017 of notices to comply or vacate, to terminate, and to quit and

vacate due to nuisance, it accepted four payments toward Mr. Thompson’s May and June

rent. While it found that an April notice served by J.H. Properties asserted that the

receipt of rent with knowledge of a breach was not a waiver, the court concluded that the

notice was a “unilateral statement” by J.H. Properties and was not binding on Mr.

Thompson. Report of Proceedings (RP) at 118. It distinguished First Union

Management as having involved a nonwaiver clause that appeared in the parties’ lease

and did bind the tenant. Finding that J.H. Properties had waived any breach, the court

granted Mr. Thompson’s motion to dismiss the unlawful detainer action.

       Mr. Thompson moved for an award of attorney fees and costs. He relied on a

provision of the lease and on RCW 59.18.290(2). J.H. Properties resisted the motion. In

both its written opposition and at oral argument of the motion, J.H. Properties relied

solely on its contention that an award of attorney fees under RCW 59.18.290(2) was

discretionary and that the contractual right to fees turned on an issue of “breach or

default.” CP at 109. It argued that because the trial court had not found that Mr.

                                                3
No. 35527-6-III
J.H. Properties v. Thompson

Thompson complied with terms of the lease, “principles of equity support denying an

award of attorney fees.” CP at 110; and see RP at 122-23.

       The court orally granted the attorney fee motion. Mr. Thompson and Northwest

Justice Project thereafter presented an order awarding fees and costs totaling $5,467.25.

The order stated that “[p]laintiff shall pay a reasonable attorney fee of $4560.00 to

[d]efendant’s attorney Northwest Justice Project” and “[p]laintiff shall pay costs of

$907.25 to [d]efendant’s attorney Northwest Justice Project.” CP at 118. It identified

Northwest Justice Project as the judgment creditor. J.H. Properties did not object to the

form of order or contest the reasonableness of the fees and costs.

       On August 22, roughly three weeks after entry of the order awarding fees and

costs, Mr. Thompson died unexpectedly. J.H. Properties timely appealed.

       After Northwest Justice Project was notified of Mr. Thompson’s death, it moved

to substitute as the respondent on appeal. In support of its motion, it filed an

authenticated, redacted copy of its retainer agreement with Mr. Thompson that contained

assignment language.2 J.H. Properties objected. The motion was granted by our court

commissioner.

       2
         The agreement provided in relevant part as to “Attorney fees” that, “In some
cases, a court can require the opposing party to pay attorney fees. [Northwest Justice
Project] may claim and retain an award of attorney fees from the opposing party to the
extent allowed by law.” See Second Decl. of Tyler Graber, Ex. C at 1 (boldface omitted).
As to “Litigation or case costs,” it provided, “If my case is filed in court, [Northwest
Justice Project] can try to collect from the opposing party the amount of costs advanced

                                              4
No. 35527-6-III
J.H. Properties v. Thompson

       J.H. Properties filed a motion asking the court to modify the commissioner’s

ruling, which was denied by a three-judge panel. J.H. Properties did not seek

discretionary review by the Supreme Court of the court’s order denying its motion to

modify the commissioner’s ruling.

                                        ANALYSIS

       J.H. Properties makes three assignments of error on appeal. We address them in

the order presented.

       J.H. Properties’ first assignment of error is that the trial court erred in awarding

attorney fees “because no basis exists for the award, and the award was unjust and

unreasonable given the trial court’s prior letter ruling.” Appellant’s Br. at 1. In the

argument section of its brief, J.H. Properties asks that we review de novo (1) whether the

trial court lacked jurisdiction over the unlawful detainer action and for that reason could

not award fees, citing Housing Authority of the City of Everett v. Terry, 114 Wash. 2d 558,

789 P.2d 745 (1990); (2) whether because Billy Thompson, not Northwest Justice

Project, was the party to the lease agreement, a contractual basis for the fee award was

lacking; and (3) whether Northwest Justice Project violated the statutory procedure for

entry of judgment when it identified itself as the judgment creditor. Appellant’s Br. at 6-

11.

by [Northwest Justice Project].” Id.

                                              5
No. 35527-6-III
J.H. Properties v. Thompson

       None of these arguments was made in the trial court. RAP 2.5(a) states the

general rule for appellate disposition of issues not raised in the trial court: appellate

courts will not entertain them. State v. Guzman Nunez, 160 Wash. App. 150, 157, 248 P.3d
103 (2011) (citing State v. Scott, 110 Wash. 2d 682, 685, 757 P.2d 492 (1988)), aff’d, 174
Wash. 2d 707, 285 P.3d 21 (2012). The reason for this rule is to afford the trial court the

opportunity to correct errors, thereby avoiding unnecessary appeals and retrials. Smith v.

Shannon, 100 Wash. 2d 26, 37, 666 P.2d 351 (1983).

       Should J.H. Properties contend that the equitable argument it raised in the trial

court can be found in its argument on appeal, we reject that argument. Waiver by

acceptance of rent is a defense to a claim of breach. By bringing an unlawful detainer

action after accepting May and June rent payments, J.H. Properties subjected Mr.

Thompson to a meritless suit. It fails to cite any authority suggesting the equities operate

in its favor on these facts.

       J.H. Properties’ second assignment of error is to the amount of the fee award given

that the trial court originally ruled that J.H. Properties had not waived its claims of

breach. Citing the court’s reversal of itself, J.H. Properties argues that most of Mr.

Thompson’s fees and costs would not have been incurred “had the case been dismissed at

the time of the letter ruling on June 12.” Appellant’s Br. at 13. It cites no authority for

the proposition that a legal error by the trial court, later reconsidered, is a basis for

                                                6
No. 35527-6-III
J.H. Properties v. Thompson

denying attorney fees to a party that was correct in its legal position all along. Here, too,

however, we decline to review this contention raised for the first time on appeal.

       J.H. Properties’ third assignment of error is that Northwest Justice Project is not a

proper party to the appeal. Under the Rules of Appellate Procedure, our court

commissioner is authorized to rule on a motion to substitute a party on appeal. See RAP

17.2(a) (a commissioner rules on all motions except “(1) a motion in a brief, (2) a motion

to modify a ruling by a commissioner or the clerk, (3) a motion for reconsideration of a

decision, (4) a motion to recall the mandate . . . and (5) a motion to publish”). A party

aggrieved by a commissioner’s ruling may move to have the ruling modified by a three-

judge panel. State v. Rolax, 104 Wash. 2d 129, 133, 702 P.2d 1185 (1985). Following a

ruling by a three-judge panel, the aggrieved party may seek discretionary review by the

Supreme Court. RAP 13.5(a). Because J.H. Properties did not seek discretionary review

by the Supreme Court, the panel’s decision denying the motion to modify our

commissioner’s decision is final and binding. We will not reconsider it.

       Northwest Justice Project requests an award of attorney fees and costs on appeal,

citing RAP 18.1, RAP 18.9, the lease agreement, and RCW 59.18.290(2).

       Under RAP 18.1(a), a party may recover attorney fees on appeal if authorized by

applicable law. When a lease contains a unilateral attorneys’ fees and costs provision

RCW 4.84.330 operates to make that provision bilateral. Additionally, RCW

59.18.290(2) permits the prevailing party in an unlawful detainer action to recover

                                              7
No. 35527-6-III
JH Properties v. Thompson

59.18.290(2) permits the prevailing party in an unlawful detainer action to recover

reasonable attorneys' fees and costs. We award Northwest Justice Project its reasonable

attorney fees and costs on appeal subject to compliance with RAP 18.1 (d).

       Affirmed.

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

Washington Appellate Reports, but it will be filed for public record pursuant to RCW

2.06.040.

 WE CONCUR:

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 Lawrence-Berrey, C.J.      1                     Pennell, J.

                                              8