Court Opinion

ID: 4346756
Source: CourtListenerOpinion
Date Created: 2018-12-03 21:37:24.237571+00
Date Added: 2024-06-11T14:48:27.919178
License: Public Domain

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       IN THE COURT OF APPEALS FOR THE STATE OF WASHINGTOie "-nc;
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FUJI FOOD PRODUCTS, INC., a                    )         No. 76152-8-1
California corporation,                        )
                                               )         DIVISION ONE
                     Respondent,               )
                                               )         UNPUBLISHED OPINION
              v.                               )
                                               )
OCCIDENTAL, LLC, a Washington limited          )
liability company,                             )
                                               )
                     Appellant.                )
                                               )         FILED: December 3, 2018

        ANDRUS, J. — Occidental LLC, a commercial landlord to Fuji Food Products

 Inc., appeals from an adverse jury verdict for conversion and an attorney fee award

 in Fuji's favor. Fuji cross appeals an adverse jury verdict on its claim for the return

 of a security deposit. We affirm the jury verdicts but reverse the award of attorney

fees to Fuji and remand for rehearing on the attorney fee award under Marassi v.

 Lau, 71 Wash. App. 912, 859 P.2d 605,606-07 (1993).

                                        FACTS

        Fuji, a producer of prepackaged sushi, edamame, and salads, entered into

 a commercial lease with Occidental for 20,000 square feet of warehouse space in

 Seattle's SODO neighborhood (the Premises). The original lease ran for five
No. 76152-8-1/2

years, from December 1, 2008, to November 30, 2013. Fuji paid Occidental a

security deposit of $42,000 when it took occupancy of the Premises.

       Paragraph 56 of the lease specified that upon vacating the Premises, Fuji

"shall remove all cooler rooms and HVAC systems on the roof." Fuji understood

this provision to require the removal of three modular cooler rooms—one referred

to as "the cooler," designed to keep food at 36 to 38 degrees, one identified as a

"blast cooler," which had high velocity fans designed to quickly reduce temperature

to meet FDA regulations, and one used as a freezer (collectively, "the cooler

rooms"). Fuji purchased the cooler rooms, among other miscellaneous items,from

the previous tenant, Monterey Gourmet Foods (Monterey), for $135,000. The

leased space also included a temperature-controlled production area, but Fuji did

not consider this space or any other areas of the Premises to fall within the

definition of "cooler rooms." The modular cooler rooms were physically located in

the southern portion of the Premises.

       In early September 2013, Fuji asked Occidental's representative,

Dr. Hokwai Woo, if Occidental would be interested in extending the lease on a

month-to-month basis. Dr. Woo indicated that the lease permitted Fuji to remain

as a month-to-month tenant but Fuji, as a holdover tenant, would have to pay rent

of 175 percent of the base monthly rent. Dr. Woo also stated if Fuji chose to leave,

it must "remove all equipment such as cooler, refrigerator, cooling system on the

roof, heating system on the east loading dock, the Y-loading dock on the east, and

plug all floor drains." On October 10, 2013, Fuji notified Occidental it would vacate

the Premises by November 30 to avoid any holdover rent.

                                         2
No. 76152-8-1/3

       Throughout October 2013, Fuji and Occidental discussed the scope of Fuji's

contractual obligations to remove cooler rooms from the facility. Fuji agreed it was

contractually obligated to remove the three modular cooler rooms located in the

southern portion of the Premises. Occidental contended Fuji had to remove

structures in the middle and north end of the warehouse, actions Fuji did not

believe it was required to undertake.

       Before the parties resolved this issue, Occidental learned that another

tenant, Vinum Wine Importing & Distribution was interested in taking over a portion

of Fuji's space with the cooler rooms left in place. At Occidental's request, the

parties extended the lease to December 13, 2013, while Occidental negotiated

with Vinum. Fuji was willing to leave the cooler rooms in place for Vinum's use if

Occidental would agree to release it from any responsibility for removing them from

the Premises.

       Occidental and Fuji signed an extension agreement on November 8, 2013,

relieving Fuji of the obligation to pay any rent between November 30, 2013, the

original lease expiration date, and December 13, 2013, the new lease expiration

date, as long as Fuji vacated the premises by the latter date. The extension

agreement provided that Fuji would refrain from removing the cooler rooms

until November 21, 2013. It also directed Fuji to "begin removing the Cooler

Rooms...from the Premises on the Removal Extension Date unless prior to that

date Landlord expressly releases Fuji from its obligations to remove them and any

other improvements."

                                         3
No. 76152-8-1/4

        Fuji, Occidental, and Vinum spoke by conference call on November 21,

2013. Fuji understood from this call that Occidental agreed to release it from the

obligation to remove the cooler rooms. On December 6, 2013, Joseph Marchica,

Fuji's Chief Executive Officer (CEO), sent Dr. Woo a draft release agreement to

sign. Dr. Woo disputed the accuracy of the draft on December 9, 2013, sending a

revised version of the release to Marchica on December 10, 2013. The following

morning, Marchica made what he thought were minor changes to Dr. Woo's draft

and asked to finalize the document that day. No release was ever executed.

        Occidental and Vinum were unable to reach agreement on lease terms, and

on the afternoon of December 11, 2013, Occidental notified Fuji that it had to

remove the cooler rooms by December 13. On December 12, Fuji informed

Occidental it was not possible to remove the cooler rooms on such short notice,

and it would not pay holdover rent. It informed Dr. Woo that it would surrender the

Premises on December 13, 2013, with the understanding that Occidental would

provide Fuji with access to the building to remove the cooler rooms at a later date.

        Fuji returned the keys to Dr. Woo on December 13, 2013. On December

17, 2013, Occidental sent Fuji a letter notifying it that it was in default of the lease

because it had left the Premises without removing the cooler rooms, removing

doors, and closing certain openings in partition walls. The letter provided "[t]his is

your written notice to cure this default," referring to Section 16 of the lease.1

1 Under Paragraph 16.1(c) of the lease, Occidental was required to give Fuji 30 days' notice of any
default to allow Fuji time to cure the default. Fuji argued at trial that Occidental did not give Fuji 30
days to cure the alleged default.
                                                 -4-
No. 76152-8-1/5

          Although Occidental's December 17, 2013, letter did not mention Vinum,

the evidence at trial established that Occidental and Vinum had agreed on lease

terms for Fuji's space with the modular cooler rooms in place the very same day.

Dr. Woo sent a draft lease addendum to Vinum on December 17, but asked it to

hold off on executing the lease until January 3, 2014.

          Fuji replied on December 23, 2013, stating it had no obligation to remove

the cooler rooms based on Occidental's representation that it had an agreement

with Vinum to lease the Premises with the cooler rooms in place. Fuji also stated

that if Occidental and Vinum did not have an agreement, it would remove the cooler

rooms but needed Occidental to provide it access to do so. Fuji demanded the

return of its security deposit. Occidental refused.

         Fuji commenced this action in April 2014. It alleged five claims against

Occidental: (1) breach of contract, (2) unjust enrichment, (3) conversion, (4)

negligent misrepresentation, and (5) violations of the Consumer Protection Act

(CPA). Occidental counterclaimed for breach of contract, claiming it had incurred

monetary damages to pay utilities and to remove tenant improvements Fuji was

obligated to remove. The trial court dismissed the CPA claim on summary

judgment, and dismissed Fuji's negligent misrepresentation claim during pretrial

motions.2

         At the conclusion of Fuji's case-in-chief, Occidental sought judgment as a

matter of law under CR 50 on Fuji's conversion claim, which the trial court denied.

2   Fuji did not prosecute the unjust enrichment claim at trial and appears to have abandoned it.
                                                  5
No. 76152-8-1/6

Occidental renewed its motion post-trial, and the trial court again denied

Occidental's motion.

       On its counterclaim for breach of lease, Occidental claimed that Fuji had

(1)failed to repair a frozen pipe, (2) failed to pay final utility charges and Fuji's

share of common area maintenance for 2013; (3) failed to pay holdover rent for

the period of time after Fuji surrendered the Premises and the date Occidental

could make it useable for another tenant;(4)failed to repair and replace a door in

the northern portion of its space, and (5) refused to reimburse Occidental $67,873

it paid to Allegiance Trucking to demolish structures in the north portion of Fuji's

leased space that Occidental contended were "cooler rooms" within Paragraph 56

of the lease. It claimed damages of approximately $81,000, after the security

deposit offset of $42,000.

       During trial, the parties prepared a proposed Special Verdict Form for the

jury to answer a series of questions regarding Fuji's breach of contract and

conversion claims and Occidental's counterclaims. The jury found that Occidental

breached its duty of good faith and fair dealing but did not otherwise breach the

lease. It also found that Fuji had incurred no damages as the result of Occidental's

breach. On the conversion claim, the jury found Occidental had converted Fuji's

cooler rooms and awarded damages of $60,000.

       On Occidental's counterclaim, the jury found Occidental had not fulfilled all

conditions precedent to give rise to its contract counterclaim. It also found Fuji

surrendered possession on December 13,2013, and breached the lease by failing

to fulfill certain conditions prior to surrendering the Premises, but it did not abandon

                                           6
No. 76152-8-1/7

the cooler rooms when it left. The jury awarded Occidental $42,000 in damages,

but it was instructed to reduce the award by Fuji's $42,000 security deposit. Its net

award to Occidental was $0.

       The trial court found Fuji to be the prevailing party and awarded $263,462

in attorney fees and costs of $22,507.

        Occidental appeals, contending the trial court erred in denying its motion for

a directed verdict or judgment as a matter of law on the conversion claim and in

finding Fuji to be the prevailing party. Fuji cross appeals, claiming the trial court

erred in accepting an inconsistent verdict that found Fuji had breached the lease

after finding Occidental had not fulfilled the conditions precedent to bring the

contract claim.3

                                          ANALYSIS

A. Fuji's Conversion Claim

        Occidental claims the trial court erred by denying its motions to dismiss

Fuji's conversion claim before, during, and after trial. Occidental contends Fuji

voluntarily abandoned its cooler rooms as a matter of law when its attorney sent

the December 23, 2013, letter disclaiming any obligation to remove them from the

Premises. Fuji, however, argued that Occidental converted the cooler rooms no

later than December 17,2013, by agreeing to a lease with Vinum that included the

very same cooler rooms.

3 Fuji also challenges the dismissal of its negligent misrepresentation claim. Because there was
inadequate briefing on this issue, we decline to address the cross appeal relating to the negligent
misrepresentation claim. See Norcon Builders, LLC v. GMP Homes VG, LLC, 161 Wash. App. 474,
486, 254 P.3d 835, 842(2011)(court will not consider inadequately briefed argument).
                                              - 7-
No. 76152-8-1/8

        This court reviews de novo the denial of a motion for judgment as a matter

of law. Davis v. Microsoft Corp., 149 Wn.2d 521,530-31,70 P.3d 126(2003). The

court accepts the truth of the non-moving party's evidence and draws all

reasonable inferences in its favor. Id. A motion for judgment as a matter of law is

granted only when the court can say, as a matter of law, there is no substantial

evidence or reasonable inference to sustain a verdict for the non-moving party. Id.

at 531.

        The tort of conversion involves willfully interfering with the property of

another without lawful justification, resulting in the deprivation of the owner's right

to possess his property. Wash. State Bank v. Medalia Healthcare LLC, 96 Wn.

App. 547, 554, 984 P.2d 1041 (1999), review denied, 140 Wash. 2d 1006 (2000).

Abandonment of property is a complete defense to a conversion claim.4 Lowe v.

Rowe, 173 Wash. App. 253, 263, 294 P.3d 6(2012), review denied, 177 Wash. 2d 1018

(2013). Abandonment of a legal right is generally a question of fact, reviewed on

appeal for supporting substantial evidence. In re Trustee's Sale of Real Prop. of

Brown, 161 Wash. App. 412, 415, 250 P.3d 134 (2011). The party claiming

abandonment must show that it was both intentional and voluntary. Ferris v.

Blumhardt, 48 Wash. 2d 395, 402, 293 P.2d 935 (1956). Abandonment must be

proved by "clear, unequivocal and decisive evidence." Shew v. Coon Bay Loafers,

Inc., 76 Wash. 2d 40, 50,455 P.2d 359(1969). Whether a verdict should have been

4Fuji notes that Occidental did not plead abandonment as an affirmative defense in its answer and
thus, waived the right to raise it at trial. When a party fails to plead an affirmative defense, it is
generally waived. Henderson v. Tyrrell, 80 Wash. App. 592, 624, 910 P.2d 522(1996). Occidental,
however, raised this defense early in the case on summary judgment. The trial court rejected Fuji's
waiver argument, ruling that it would instruct the jury on the affirmative defense of abandonment.
Fuji has not assigned error on appeal to this ruling.
                                                -8-
No. 76152-8-1/9

directed on a question of fact is itself a question of law. Postema v. Postema

Enterprises, Inc., 118 Wash. App. 185, 192, 72 P.3d 1122(2003).

      Occidental was not entitled to judgment as a matter of law if, as Fuji argued

at trial, Occidental converted the cooler rooms on December 17,2013, by agreeing

to lease Fuji's space and cooler rooms to Vinum. There is evidence in the record

to support this contention. Michael De Maar, Vinum's president, testified that

Vinum entered into a written lease for Fuji's space and three modular cooler rooms.

De Maar was interested in the cooler rooms because Vinum was starting to sell

beer, and it needed the ability to maintain the beer at 37 degrees. De Maar and

Dr. Woo went back and forth on terms of a lease throughout November and early

December 2013. According to De Maar, he and Woo reached a deal on all material

terms on December 17, 2013. Although they did not execute the written lease

amendment until January 3, 2014, the delay occurred only because of the

intervening holidays. This evidence was sufficient for the jury to conclude that

Occidental's conversion occurred before Fuji sent the December 23, 2013, letter.

       Judgment as a matter of law was also inappropriate because the December

23 letter was equivocal as to Fuji's intent to abandon the cooler rooms. The letter

provided:

       To be clear, Tenant's position is as follows:

   1. Tenant has no obligation to remove the Cold Storage Facilities or the
      remaining Partitions based on the November 21 understanding and
      the fact that Landlord has reached an agreement with Vinum for the
      lease of the Premises with them in place.

   2. Tenant is not obligated to remove any other improvements because
      it has (1) removed all its production and operating equipment, air
      compressors, tools for operation, shelving, and racking systems and

                                        -9-
No. 76152-8-1/10

      all office furnishings, computers and phones and (2)the rooms in the
      other areas of the Premises are not "cooler rooms."

   3. In the unlikely event that Landlord and Vinum do not have an
      agreement in principle for the lease of the Premises with the Cold
      Storage Facilities and remaining Partitions intact, Tenant stands by
      its December 11 response to Landlord to remove the Cost Storage
      Facilities and the remaining Partitions provided Landlord grants
      Tenant access in which to do so and with the understanding that
      removal will require some lead time.

   4. Subject to item no. 3 above, Tenant has complied with all its
      obligations under the Lease and demands a return of its security
      deposit, which per the Lease, is due within 15 days of the expiration,
      i.e., by December 28, 2013.
       Marchica, Fuji's CEO,explained events leading up to this letter. He testified

that Fuji did not plan to leave the cooler rooms in place if Occidental and Vinum

had no deal. He stated that the company's intent was to transport them to Fuji's

Los Angeles plant and to store them until Fuji decided whether it needed cold

storage at another facility. Marchica knew it would take three weeks to remove the

coolers. He asked for notice by November 21 if Vinum did not want the cooler

rooms so it could arrange for their removal before the December 13 lease

expiration. Vinum's De Maar testified that during the November 21 conference

call, Occidental and Vinum told Marchica they wanted Fuji to leave the cooler

rooms.

       When Marchica received Woo's December 11, 2013, email demanding

removal of the cooler rooms, he responded immediately that Fuji could not possibly

remove the cooler rooms in two days. He testified he sent several e-mails and left

voicemails for Dr. Woo asking for time to remove the cooler rooms. Marchica

affirmed Fuji had no intent to abandon the coolers at that point.

                                       - 10-
No. 76152-8-1/11

       Marchica further testified that on December 23, 2013, when Fuji's counsel

sent the letter, he had no idea that Vinum had already agreed to lease the space

with the cooler rooms in place. It was Marchica's understanding that Fuji had made

several attempts to gain access to remove the cooler rooms but that Occidental

had essentially locked it out. For this reason, Marchica testified, the letter also

stated if Occidental had not reached agreement with Vinum and granted Fuji

access, Fuji would reclaim its property.

       There is substantial evidence negating Occidental's abandonment defense.

Assuming the evidence in the light most favorable to Fuji, a reasonable jury could

conclude either that Occidental's conversion occurred before Fuji sent the

December 23, 2013, letter, or that Fuji did not intend this letter to be an expression

of intent to voluntarily relinquish ownership of the cooler rooms. A jury could

reasonably find the text of the letter to be equivocal evidence of Fuji's intent to

abandon the cooler rooms.

       Next, Occidental argues the trial court erred in denying its CR 50 motion to

dismiss the conversion claim under the independent duty doctrine.                  The

independent duty doctrine dictates when a party is limited to contract remedies

even if an underlying tort is present:

       An injury is remediable in tort if it traces back to the breach of a tort
       duty arising independently of the terms of the contract. The court
       determines whether there is an independent tort duty of care. . . .
       When no independent tort duty exists, tort does not provide a
       remedy.

Eastwood v. Horse Harbor Foundation, Inc., 170 Wash. 2d 380, 389, 241 P.3d 1256

(2010). We review de novo a trial court's determination whether a claim is barred
No. 76152-8-1/12

under the independent duty doctrine. Key Development Inv., LLC v. Port of

Tacoma, 173 Wash. App. 1, 22, 292 P.3d 833(2013).

       The trial court concluded that the duty not to steal someone else's property

is related to, but independent of, any duties in the parties' lease. We agree. First,

Occidental argues that Fuji's claimed injury, the lost value of the cooler rooms and

the forfeited security deposit, is the same injury it claimed to suffer as a result of

the alleged breach of lease. The inquiry under Eastwood, however, is not what

damages a party has sustained. It is a question of the source of the alleged duty.

The fact that Fuji sought the same damages in tort and in contract is not the

relevant inquiry.

       Second, Occidental contends that Fuji's right to possess the cooler rooms

after surrendering the Premises was governed by the lease. Occidental relies on

Paragraph 11 of the lease for the proposition that Fuji contractually agreed that if

it left property behind, the property reverted to Occidental, thus eliminating any

independent tort duty it may have owed to Fuji. The lease language does not

support this argument.

       Paragraph 11.5(c) provided that, subject to the provisions of Paragraph 56,

any "alterations, improvements or additions" made to the Premises became the

landlord's property. Under this section, machinery, equipment, and trade fixtures

remained the property of the tenant, unless removal would cause material damage

to the Premises.5 Paragraph 56 of the lease required Fuji to remove the cooler

rooms and HVAC systems at the end of the tenancy:

5 Paragraph   11.5, entitled "Alterations and Additions," provided:

                                                - 12 -
No. 76152-8-1/13

      56. EXISTING TENANTS IMPROVEMENTS. Tenant shall remove
      all Cooler Rooms and HVAC systems on the roof. Other
      improvements will remain at termination of Lease with the exception
      of all production and operating equipment, air compressors, tools for
      operation, shelving and racking systems and all office furnishings,
      computers and phones. Wiring shall be left in place with computer
      and phone jacks.

Reading Paragraphs 11.5(c) and Paragraph 56 together, the parties' intent was

clear—the modular cooler rooms were not considered an "improvement" that

became property of Occidental at the end of the lease.

       Even if it were arguable, Marchica testified that the cooler rooms were

"modular, meaning that they could be taken down and put up. They were

transportable." Although the coolers would have cost over $60,000 to remove and

transport to California, there is nothing to indicate that their removal would have

caused material damage to the Premises. Thus, the lease did not transfer

ownership of the cooler rooms to Occidental at the end of the tenancy.

       Because the parties did not agree contractually that ownership of the cooler

rooms would transfer to Occidental, the duty not to convert Fuji's property arose

outside of the four corners of their agreement. Because Occidental owed a tort

duty not to convert Fuji's cooler rooms independent of the lease, the conversion

claim was not barred by the independent duty doctrine.

      (c) Subject to the provisions of Paragraph 56, unless Landlord requires their removal, as
      set forth in paragraph 11.5(a), all alterations, improvements or additions which may be
      made on the Premises, shall become the property of Landlord and remain upon and be
      surrendered with Premises at the expiration of the term. Notwithstanding the provisions of
      this paragraph 11.5(c), Tenant's machinery, equipment and other trade fixtures, other than
      that which is affixed to the Premises so that it cannot be removed without material damage
      to the Premises, shall remain the property of Tenant and may be removed by Tenant
      subject to the provision of Paragraph 11.3.

                                           - 13-
No. 76152-8-1/14

        The trial court did not err in denying Occidental's CR 50 motions to dismiss

Fuji's conversion claim.

B. Occidental's Breach of Lease Counterclaim

        On its cross appeal, Fuji challenges the jury's finding that it breached the

lease. It argues this finding conflicts with the finding that Occidental failed to fulfill

all conditions precedent triggering Fuji's obligation to perform.6

        As a preliminary matter, Occidental contends Fuji cannot raise this issue on

appeal under RAP 2.5 because it did not bring the alleged inconsistency to the

attention of the trial judge in a timely manner. App. Reply at 19. CR 49(b) provides

that:

        When the answers [to the jury interrogatories] are inconsistent with
        each other and one or more is likewise inconsistent with the general
        verdict, judgment shall not be entered, but the court shall return the
        jury for further consideration of its answers and verdict or shall order
        a new trial.

In Gierde v. Fritzsche, 55 Wash. App. 387, 393,777 P.2d 1072(1989),the court held

that under CR 49(b), a party's failure to object to inconsistencies in a special verdict

prior to the jury's discharge constitutes a waiver of any objection on appeal. This

court declined to review the issue on appeal because counsel, despite recognizing

the inconsistency, remained silent in an attempt to "try his luck with a second jury."

Id. at 394.

        In Malarkey Asphalt Co. v. Wyborney,62 Wn.App.495, 511,814 P.2d 1219

(1991), however, the court considered a challenge to a special verdict form despite

6 Fuji designates this assignment of error as "conditional," because it argues the court need only
address the issue if it deems Occidental a prevailing party for purposes of a fee award. Because
the viability of Occidental's counterclaim is relevant to our analysis of Occidental's prevailing party
argument, we discuss this issue first.
                                                - 14 -
No. 76152-8-1/15

the appellant's failure to bring the error to the trial court's attention before it

dismissed the jury. This court found no waiver because, unlike in Gerde, there

was no indication the appellant kept the issue from the trial court for strategic

reasons. Id. In Mears v. Bethel Sch. Dist. No. 403, 182 Wash. App. 919, 929, 332
P.3d 1077 (2014), the court acknowledged the differing approaches taken in

Gjerde and Malarkey. It chose not "to resolve these divergent approaches to the

waiver question" in order to "provide guidance to trial courts faced with inconsistent

verdict claims." Id.

       The record here does not show that Fuji's counsel recognized problems

with the special verdict but chose to remain silent in the hope of getting back in

front of a different jury. In Fuji's post-trial motion for attorney fees, it asked the trial

court to dismiss Occidental's counterclaim based on inconsistent findings by the

jury. Fuji did not suggest it was entitled to a new trial in front of a different jury.

Instead, it argued that, as a matter of law, it was entitled to judgment against

Occidental because the jury found Occidental failed to fulfill conditions precedent

to prosecuting its claim. Id. Because this case is distinguishable from G'erde, we

conclude Fuji preserved the issue for appeal.

       The special verdict form contained 13 questions, organized by party and

claim. The questions and jury answers relating to Occidental's counterclaim were:

        1. Was there a mutual understanding between Occidental and Fuji
           that the term "cooler rooms" as contained in the Lease included
           the structures in the North portion of the Premises?

                  Yes                    X    No

       2. Did Fuji have an obligation to remove the structures in the North
          portion of the Premises?

                                           - 15 -
No. 76152-8-1/16

             X     Yes                      No

       3. Did Occidental fulfill all of its contractual obligations and
          conditions precedent to give rise to the counterclaims asserted?
                 Yes                X No

       4. Did Fuji Foods surrender possession of the premises on
          December 13, 2013?
            X Yes                    No

       5. Did Fuji Foods abandon all Cooler Rooms?
                 Yes               X No

       6. Did the lease require Fuji Foods to fulfill certain conditions prior
          to surrendering possession of the premises?
             X Yes                        No
          If you answered "Yes," move on to the next question. If you
          answered "No," then you may sign this Verdict Form.

       7. Did Fuji Foods breach the lease by failing to fulfill any of the
          conditions prior to surrendering possession of the premises?
              X Yes                       No

          If you answered "Yes" to this question, what is the total amount
          Occidental was actually damaged as a result of Fuji's breach of
          contract?
          $•       42,000       . Reduce this amount by the $42,000
          security deposit paid by Fuji: $ 0

       Fuji contends that the jury's answer to Question 3, that Occidental failed to

fulfill all of its contractual obligations or conditions precedent, is inconsistent with

its answer to Question 7, that Fuji breached the lease. It argues that Fuji cannot

be liable for breach of contract if Occidental failed to prove that all conditions

precedent to Fuji's performance had been fulfilled.

       In evaluating a claim of inconsistent findings on a special verdict form, the

court must—if possible—reconcile the jury's answers and not substitute its

judgment for the jury's.     Mears, 182 Wash. App. at 927; Estate of Stalkup v.

Vancouver Clinic, Inc., PS, 145 Wash. App. 572, 586, 187 P.3d 291 (2008). If the

                                         - 16 -
No. 76152-8-1/17

answers on the verdict form reveal a clear contradiction such that the court cannot

determine how the jury resolved an ultimate issue, it should reverse the judgment.

State Dept. of Highways v. Evans Engine & Equip. Co., 22 Wn. App. 202,204, 589

P.2d 290(1978), review denied, 92 Wash. 2d 1010 (1979).

       Fuji relies on Evans to argue that we should strike the jury's answer to

Question 7 as surplusage. In that case, the jury found the defendant liable for the

plaintiffs injuries, and the court held that this response was tantamount to a

general verdict. It concluded that the subsequent questions asking whether the

defendant's employee had been loaned to another defendant were "surplusage."
22 Wash. App. at 209. We do not find any of the jury's answers here to be tantamount

to a general verdict. Nor do we believe it is appropriate to ignore any of the

answers to the special interrogatories. "It is the rule in this state that answers to

special interrogatories should, if possible, be read harmoniously to support a

judgment." Evans, 22 Wash. App. at 204. In harmonizing a verdict, we do not read

the special verdict in isolation but as part of the whole verdict, including the jury

instructions. Guijosa v. Wal-Mart Stores, Inc., 101 Wash. App. 777, 797,6 P.3d 583

(2000), aff'd, 144 Wash. 2d 907, 32 P.3d 250 (2001).

       Jury Instruction 3 provided that Occidental had the burden of proving the

following propositions to prevail on its breach of contract claim: (1) Occidental

entered into a lease with Fuji allowing Occidental to enter the Premises after 10

days' prior written notice to put the Premises in good order, condition and repair

and to charge Fuji for any costs it incurs in making such repairs; (2) Occidental

provided Fuji with 10 days' written notice that it had hired Allegiance Trucking to

                                       - 17-
No. 76152-8-1/18

demolish the interior of the south portion of the Premises; (3) Fuji was required

under the lease to perform the work that Occidental hired Allegiance Trucking to

perform;(4) Fuji was given the opportunity and access to perform the specific work

on the Premises after proper notice and refused to do so; and (5) Occidental was

damaged as a result of paying Allegiance Trucking to perform the work that it

alleges was Fuji's responsibility.

       The evidence indicated that in January 2014, Dr. Woo hired Allegiance to

demolish the interior of the Premises and return it to an "open warehouse spaces."

Ruben Garner, Allegiance's owner, testified that he charged Occidental

approximately $77,000, to remove refrigeration rooms in the north portion of the

Premises,to strip down the walls, to haul hazardous material from the north portion

of the Premises, to remove cooling fans, to replace structural beams on the north

portion of the Premises, and to patch the roof.

       Although Dr. Woo obtained a bid from Allegiance to remove the coolers in

the south portion of the Premises, Garner testified that he only did work on the

north portion of the Premises. Dr. Woo corroborated this evidence; he testified he

paid Allegiance only for work in the north end of the Premises. Dr. Woo explicitly

directed Allegiance not to remove the refrigeration rooms in the south portion of

the Premises. A reasonable jury could conclude from this evidence that Occidental

failed to establish the second element of Occidental's breach of contract claim.

       Furthermore, the fourth element of Instruction 3 required Occidental to

prove that Fuji was given access to remove the cooler rooms in the south portion

of the Premises. Marchica testified that before turning over the keys to Occidental,

                                      - 18-
No. 76152-8-1/19

Fuji asked Occidental for access to the building on December 16, 2013, to which

Fuji received no reply. Dr. Woo testified that he did not respond to Marchica's

request for access. Instead, Dr. Woo testified Fuji did not need access, as Fuji

should have simply kept the keys rather than turning them in on December 13,

2013. Dr. Woo also testified that at that point, he handed the situation over to his

attorneys without responding to Marchica's request for access, and claimed that

Fuji never contacted his attorneys to request access again. Contrary to this

testimony, the December 23, 2013, letter included a request for access.

       Based on this record, a jury could have found insufficient evidence to

establish the fourth element of Instruction 3. The lack of evidence would explain

why the jury found Occidental had not fulfilled all of its contractual obligations or

conditions precedent in Question 6 of the Special Verdict Form.

       The jury, however, awarded Occidental the security deposit of $42,000.

This award is explained by Instruction 15, which set out the doctrine of anticipatory

breach:

              A party who is ready, willing, and able to perform is excused
       from the duty to perform when the other party repudiates the contract
       by word or act that definitely indicates it cannot or will not perform its
       obligations under the contract.

              In this case, if plaintiff Fuji Foods proves by a preponderance
       of the evidence that defendant Occidental repudiated the contract,
       then Fuji Foods was excused from the duty to remove the Cooler
       Rooms.

              Alternatively, if defendant Occidental proves by a
       preponderance of the evidence that Fuji Foods repudiated the
       contract, then Occidental was excused from the duty to return Fuji
       Foods'security deposit.

                                         -19-
No. 76152-8-1/20

(emphasis added). In essence, the jury was instructed that if it found Fuji had

repudiated the lease, Occidental could retain the security deposit.

       There is substantial evidence to support a finding that Fuji repudiated the

lease agreement. Occidental presented evidence that Fuji failed to fix a frozen

pipe before surrendering the Premises, and that Occidental had to hire a locksmith

to drill a lock to get into an area Fuji leased to fix this pipe. Kenny Sung, Fuji's

former president, acknowledged that under Paragraph 11.2 of the lease, fixing

plumbing problems was its responsibility.

       Occidental also presented evidence that Fuji failed to pay the last electricity

and water bills, or its share of the 2013 common area maintenance charges.

These utilities were Fuji's responsibility under Paragraph 7 of the lease. There

was also evidence that Occidental incurred costs to rebuild a partition wall that Fuji

was required to construct or pay to have rebuilt. Paragraph 57 of the lease

provided that at the termination of the lease, the tenant was to pay to close any

openings installed in partitions at the landlord's request. Occidental made the

explicit request that the openings be closed in its December 17,2013 default letter.

       The jury could have determined that Fuji repudiated the lease by failing to

fulfill these lease obligations and, by doing so, forfeited its right to the security

deposit. Such a finding would explain why the jury awarded Occidental $42,000,

the exact amount of the security deposit, rather than the $81,000 in damages it

sought at trial. In other words, despite a lack of evidence to find for Occidental on

its breach of contract counterclaim in Instruction 3, it could have nevertheless

found, based on Instruction 15, Fuji repudiated the agreement by failing to pay for

                                        -20-
No. 76152-8-1/21

items it was responsible for under the lease. The jury verdict can be harmonized

in this way. There is no basis for setting aside any of the jury's findings.

C. Prevailing Party

       The final issue is whether the trial court erred in awarding attorney fees to

Fuji and denying Occidental's motion for fees. Fuji and Occidental both sought an

award of attorney fees and costs under Paragraph 35 of the lease, which provided:

      35. ATTORNEY'S FEES. In the event either party requires the
      services of any attorney in connection with enforcing the terms of this
      Lease or in the event suit is brought for the recovery of any rent due
      under this Lease or for the breach of any covenant or condition of
      this Lease for the restitution of said Premises to Landlord and/or
      eviction of Tenant during said term or after expiration thereof, the
      prevailing party will be entitled to a reasonable sum for attorney's
      fees and court costs.

The trial court found Fuji to be the prevailing party, and awarded it $263,462.00 in

attorney fees and $22,506.97 in costs. It concluded that "all of the fees and costs

awarded to Fuji were incurred related to claims arising out of the Lease between

the parties and are, therefore, recoverable — regardless of whether one or more of

those claims were also founded upon tort theories."

       Whether a party is a "prevailing party" is a mixed question of law and fact

that the court reviews under an error of law standard. Eagle Point Condo. Owners

Ass'n v. Coy, 102 Wash. App. 697, 706, 9 P.3d 898 (2000). Occidental first argues

that Fuji cannot be the prevailing party because Fuji failed to prove its contract

claim whereas Occidental established Fuji breached the lease.

       This argument ignores the finding that Occidental breached its duty of good

faith and fair dealing. There is an implied duty of good faith and fair dealing in

every contract. Badgett v. Security State Bank, 116 Wash. 2d 563, 569, 807 P.2d

                                        - 21 -
No. 76152-8-1/22

356(1991). Fuji argued that Occidental breached this implied term by negotiating

a deal to lease Fuji's modular cooler rooms to Vinum while simultaneously claiming

Fuji had breached its duty to remove the same cooler rooms from the Premises,

refusing it access to recover its property, and hiding the fact of the Vinum lease

from Fuji. The good faith and fair dealing claim arose out of the lease. Although

the jury did not award Fuji monetary damages for Occidental's breach, the jury

nonetheless found a breach had occurred.

        Fuji also relies on the fact that it received a net affirmative monetary

judgment to support the conclusion that it is the sole prevailing party here. RCW

4.84.330 provides that:

       In any action on a contract or lease... where such contract or lease
       specifically provides that attorneys' fees and costs, which are
       incurred to enforce the provisions of such contract or lease, shall be
       awarded to one of the parties, the prevailing party, whether he or she
       is the party specified in the contract or lease or not, shall be entitled
       to reasonable attorneys' fees in addition to costs and necessary
       disbursements.

Under this statute, the prevailing party is usually "one who receives an affirmative

judgment in its favor." Marassi v. Lau, 71 Wash. App. 912, 915, 859 P.2d 605, 606-

07(1993). But Marassi recognized that when a case involves several distinct and

severable contract claims, the "net affirmative judgment" rule may not be a fair or

just result. Id. at 607.7 The fact that Fuji's damage award exceeded Occidental's

by $18,000, and thus, received the net affirmative judgment, is not dispositive.

7 At oral argument, Fuji argued that under Douglass v. Shamrock   Paving, Inc., 189 Wn.2d 733,406
P.3d 1155 (2017), the party who receives a net affirmative judgment in its favor must be found to
be the prevailing party. Douglass, however, addressed the issue of whether a landowner who
incurred remedial action costs under the Model Toxics Control Act was the prevailing party for
purposes of an award of attorney fees under RCW 70.105D.080. The court did not address how a
trial court should evaluate competing requests for attorney fees when both prevail on claims.
                                             - 22 -
No. 76152-8-1/23

       Occidental contends that although Fuji received a net affirmative judgment,

it did so only because Fuji prevailed on a tort claim for which a fee award is

impermissible. The trial court concluded that Fuji was entitled to recover attorney

fees because the fees "related to claims arising out of the Lease." The Washington

Supreme Court has held that[u]nder Washington law,for purposes of a contractual

attorneys' fee provision, an action is on a contract if the action arose out of the

contract and if the contract is central to the dispute." Seattle-First Nat'l Bank v.

Wash. Ins. Guar. Ass'n, 116 Wash. 2d 398, 413, 804 P.2d 1263 (1991). There, it

awarded attorney fees to the prevailing party, even though the cause of action was

not breach of contract. Thus, whether the claim asserted is based in contract or

tort is also not dispositive.

       The trial court relied on Edmonds v. John L. Scott Real Estate, Inc., 87 Wn.

App. 834, 942 P.2d 1072 (1997), Hill v. Cox, 110 Wash. App. 394, 41 P.3d 495

(2002), and Deep Water Brewing LLC v. Fairway Resources, Ltd, 152 Wash. App.
229, 215 P.3d 990 (2009), cases in which this court affirmed awards of attorney

fees based on a fee provision in a contract even though the claim on which the

party prevailed was a tort claim.

       In Edmonds, a buyer signed a broker agreement with a John L. Scott agent.

This agent showed her a house listed by a second Scott agent. 87 Wash. App. at

840. The buyer agreed to purchase this home on the assurance that a drainage

problem in the basement would be fixed and warranted. Id. at 841. As closing

approached, the basement remained wet. The buyer demanded the return of her

earnest money. Id. at 842. John L. Scott's counsel determined that the drainage

                                       - 23 -
No. 76152-8-1/24

problem had been fixed and the buyer was in default. Id. The broker disbursed

half of the earnest money to the sellers and half to the agents involved. Id. at 843.

      The buyer sued John L. Scott for breach of contract, CPA violations, breach

of fiduciary duty, conversion, negligence, and fraud. Id. at 843. The trial court

found for the buyer on all claims and awarded the buyer attorney fees. Id.. On

appeal, the broker claimed the buyer was not entitled to an award of attorney fees

for the time spent on the tort and CPA claims. The court disagreed, concluding

that the buyer's tort and statutory claims were based on the agent's drafting of the

earnest money agreement. Id. at 855-56. Furthermore, the breach of fiduciary

duty claim was based on the broker's disbursement of the buyer's earnest money

in a manner the broker claimed was mandated by the earnest money agreement.

Id. at 855-56. In other words, its defense to the buyer's tort claims rested on

language of the agreement. For this reason, it concluded the terms of the earnest

money agreement and the contractual relationship created by the agreement were

central to buyer's claims. Id. at 855-56.

       In Hill v. Cox, a landowner sued the seller claiming timber trespass. 110
Wash. App. at 400. In the real estate contract, the seller had reserved certain logging

rights but held no rights to log within 100 feet of the cabin sold to the landowner.

Id. at 399-400. The seller then hired loggers to cut 12 trees within the proscribed

area. Id. at 400. After the landowner sued, the trial court granted the landowner's

motion for summary judgment on liability. Id. at 400-01. The jury awarded the

landowner $47,000. Id. at 401.

                                       -24 -
No. 76152-8-1/25

       On appeal, the landowner sought attorney fees under the terms of the real

estate contract. Id. at 411. The court acknowledged the landowner chose to

pursue a statutory tort claim, rather than to enforce the contract. Id. But it

concluded there would have been no trespass to timber if the parties had not

agreed that trees within 100 feet of the cabin were not to be cut. Id. at 412. Thus,

the timber trespass arose out of the contract, and the contract was central to the

dispute. It therefore concluded the landowner was the prevailing party. Id.

       Finally, in Deep Water Brewing, a restaurant owner sued a development

company for breach of a right-of-way agreement for failing to protect its view

easement of Lake Chelan. 152 Wash. App. at 238. It also sued the president and

sole member of the development company for tortious interference with the right-

of-way agreement. Id. at 242. The court affirmed an award of attorney fees against

the president even though he was not a party to the right-of-way agreement. Id.

at 279. The court concluded that "[e]nforcement of the agreements and the claims

that followed their breach is the essence of the [plaintiffs] tortious interference with

contract claim." Id. at 279. The court affirmed the fee award against both the

developer and its president. Id.

       We contrast these three cases with Boyd v. Sunflower Properties LLC,

197 Wash. App. 137, 389 P.3d 626(2016). In that case, a buyer of undeveloped lots

sued the seller seeking to confirm the existence of an implied easement on a gravel

road that crossed the seller's remaining property. Id. at 141-42. The trial court

granted Sunflower's motion for summary judgment but denied its request for fees,

concluding that the buyer's claim arose in equity, not out of the purchase and sale

                                         -25-
No. 76152-8-1/26

agreement. Id. at 142. This court agreed. It noted that "[i]f a party alleges a breach

of a duty imposed by an external source, such as a statute or the common law, the

party does not bring an action on the contract, even if the duty would not exist in

the absence of a contractual relationship." Id. at 150(quoting Boquch v. Landover

Corp., 153 Wash. App. 595, 615, 224 P.3d 795(2009)). It concluded that, while the

agreement was factually relevant, it was not central to the dispute because the

implied easement claim would have existed whether a contract existed or not. Id.

at 151.

       This case is more akin to Edmonds than Sunflower. As in Edmonds, the

only way Fuji could establish conversion was to defeat Occidental's contention that

its possession of the cooler rooms was justified by language in the lease.

Occidental used the lease as a shield to liability for conversion. In this sense, its

defense to the tort claim arose out of the contract and the lease's terms were

central to the conversion dispute because Occidental made it so.

       Occidental contends that, under the doctrine ofjudicial estoppel, Fuji cannot

argue that its conversion claim "arose out of the lease" because it argued below

that the tort duty Occidental owed was independent of the contract. The equitable

doctrine ofjudicial estoppel precludes a party from asserting one position in a court

proceeding and later seeking an advantage by taking a clearly inconsistent

position. Harris v Fortin, 183 Wash. App. 522, 526, 333 P.3d 556 (2014). When

facts are not in dispute, we review a trial court's decision regarding the application

of judicial estoppel for an abuse of discretion. Id.

                                        - 26 -
No. 76152-8-1/27

       We find no abuse of discretion here. Whether a party may pursue a remedy

in tort under the independent duty doctrine is not the same analytical question as

whether a defendant's defense to a tort claim is based on language in the parties'

agreement and whether the agreement is central to the dispute.

       Occidental contends that even if Fuji prevailed in part, it should be deemed

the "substantially prevailing party" because not only did it prove Fuji breached the

lease and was awarded $42,000, but it also successfully defended many of Fuji's

claims, including the claim for the return of its security deposit. But the cases on

which Occidental relies do not support this approach. In Marine Enterprises, Inc.

v. Security Pacific Trading Corp., the contract at issue expressly provided that if

neither party wholly prevailed, then the party that substantially prevailed would be

entitled to fees. 50 Wn.App.768,771,750 P.2d 1290(1988). No similar language

exists in the Occidental/Fuji lease.

       In Transpac Dev., Inc. v. Oh, 132 Wash. App. 212, 217, 130 P.3d 892(2006),

the other case on which Occidental relies, the court did not award fees based on

whether one party substantially prevailed. Instead, it applied the proportional

approach of Marassi v. Lau, 71 Wash. App. 912, 915, 859 P.2d 605 (1993),

abrogated on other grounds by Wachovia SBA Lending, Inc. v. Kraft, 165 Wash. 2d
481, 200 P.3d 683(2009). Transpac does not support Occidental's "substantially

prevailing party" approach.

       Occidental's final argument is that, at a minimum, it is entitled to a

proportional award of fees under Marassi and Transpac.              We agree.      "A

proportionality approach awards the plaintiff attorney fees for the claims it prevails

                                       - 27 -
No. 76152-8-1/28

upon, and likewise awards fees to the defendant for the claims it has prevailed

upon. The fee awards are then offset." Id. at 917. In Marassi, the plaintiffs

contracted with a developer to make improvements to property. When the

defendant did not fulfill the contract, the plaintiff sued for breach of contract,

negligence,fraudulent conveyance, and misrepresentation, all of which arose from

the same contract. Id. at 913. Although the plaintiff prevailed on only 2 of 12

claims, this court awarded fees under the proportionality approach, reasoning that

proportionality is appropriate "when the alleged contract breaches at issue consist

of several distinct and severable claims." Marassi, 71 Wash. App. at 917.

       In Transpac, a landlord-tenant case, the landlord and tenant each sued

each other for breach of lease. 132 Wn. App at 213. Both sides sought attorney

fees under a bilateral attorney fee provision. Id. at 215. At trial, the court found

that the tenant had breached the lease by subletting it without the landlord's

approval and by failing to evict the subtenant. Id. at 215-16. It also found that

while the tenant breached the lease, the landlord was not entitled to damages

because it voluntarily terminated the lease and then failed to mitigate damages.

Id. at 216. The trial court did not award fees to either party because it found that

neither party prevailed. Id. at 216.

       This court reversed, holding that because the lease provided the prevailing

party was entitled to attorney fees, an award was mandatory under RCW 4.84.330.

Id. at 220-21. It concluded the Marassi proportionality approach was the most

appropriate given that both parties prevailed. Id. at 219-20 ("Following Marassi

and International Raceway, Inc., we conclude that when distinct and severable

                                       - 28 -
No. 76152-8-1/29

claims are involved, an order that leaves both parties to bear their own costs is not

adequately supported by a bare conclusion that each party recovered on a

substantial theory.")

       Fuji contends the proportionality approach is inappropriate because the

parties' claims were neither distinct nor severable. Fuji relies on the jury's findings

to argue that the claims cannot be severed because they all arose from the dispute

over the removal of the cooler rooms. But the jury's findings are not all related to

the cooler room dispute. As detailed in Instruction 19, Occidental asserted Fuji

breached the agreement in multiple ways and sought damages arising out of,

among other things, Fuji's failure to remove tenant improvements in the north

portion of the premises, failure to pay utility bills and to pay for a frozen pipe, and

the failure to pay the costs to repair roll up doors. Occidental's breach of contract

claims were distinct and severable from Fuji's claims.

       This case is analogous to Transpac. Both parties alleged breach of the

lease. Both parties proved at least one breach occurred. Fuji was awarded

$60,000 for Occidental's conversion of the modular cooler rooms and Occidental

was awarded $42,000, the amount of the forfeited security deposit. Fuji defeated

Occidental's request for $81,000 in holdover rent and damages but lost its claim

for a return of the security deposit. Fuji claimed damages in excess of $200,000,

the value Fuji placed on the coolers, and Occidental prevailed in reducing the

awarded damages to $60,000, but Occidental lost its affirmative defense of

abandonment.

                                        -29-
No. 76152-8-1/30

       Because the lease agreement entitled the prevailing party to an award of

fees, and both parties prevailed at trial, both Fuji and Occidental are entitled to an

award of attorney fees and costs under the Marassi proportional approach. We

reverse the award of attorney fees and costs to Fuji and remand the matter to the

trial court for rehearing on the issue of attorney fees and costs under Marassi.

       Occidental, as prevailing party in this court, is entitled to an award of

attorney fees in this appeal, subject to compliance with RAP 18.1.

WE CONCUR:

                                       - 30 -