Court Opinion

ID: 4281089
Source: CourtListenerOpinion
Date Created: 2018-06-04 20:50:52.303669+00
Date Added: 2024-06-11T14:34:39.480964
License: Public Domain

FILED
                                                                 COURT OF APPEALS ON I
                                                                 :STATE OF WASHINGTON

                                                                 2018 JUN -4 AM 8: 45

      IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

BLACK DIAMOND DEVELOPMENT               )        No. 76079-3-1
COMPANY, LLC, a Washington              )
Limited Liability Corporation; LEE      )        DIVISION ONE
WITTENBERG, individually and on         )
behalf of his marital community;        )
WAYNE COURTNEY, individually            )
and on behalf of his marital community, )        UNPUBLISHED OPINION
                                        )
                      Appellants,       )
                                        )
       v.                               )
                                        )
UNION BANK, N.A.,                       )
                                        )
                      Respondent.       )        FILED: June 4, 2018
                                        )
       LEACH, J. — Black Diamond Development Company LLC appeals the trial

court's summary dismissal of its claims against Union Bank N.A. and its attorney

fee award to Union Bank. Union Bank also challenges this attorney fee award.

We affirm the trial court's dismissal of Black Diamond's claims against Union

Bank. But we reverse the trial court's award of fees. The trial court abused its

discretion in two ways: by awarding Union Bank fees incurred litigating an issue

on which Black Diamond ultimately prevailed and by reducing the reasonable

hourly rate for Union Bank's attorney without providing an adequate reason. We

remand for the trial court to reconsider its fee award.
No. 76079-3-1 /2

                                   FACTS

      In November 2005, Frontier Bank loaned Black Diamond about $4 million.

The original loan was set to mature on May 28, 2007. The parties extended the

maturity date to September 25, 2010.

      On April 30, 2010, Frontier Bank failed, and Union Bank acquired the loan.

The loan matured on September 25, 2010. Black Diamond tried to renew or

refinance the loan and sought permanent financing. In connection with these

requests, Union Bank had the property appraised and an environmental survey

conducted. Union Bank determined that Black Diamond did not meet its criteria

for permanent financing.

      After the loan matured, Union Bank notified Black Diamond that it was in

default and the principal and interest were due in full.   But Black Diamond

continued to make monthly payments of $23,360, the same amount it had been

paying before the loan matured.

      In January 2012, Union Bank notified Black Diamond that if Black

Diamond did not pay the loan in full, Union Bank would start charging default

interest on February 4, 2012. Yet Black Diamond continued to make monthly

payments in the same amount as before it defaulted.

      On April 11, 2012, and again on May 14, 2012, Union Bank notified Black

Diamond that it considered Black Diamond's payments to be partial payments

                                       -2-
No. 76079-3-1/ 3

that did not change the default status of the loan. In July 2012, Union Bank

stopped accepting Black Diamond's payments altogether. Union Bank returned

Black Diamond's July, August, September, and October payments.

       On August 9, 2012, Black Diamond sued Union Bank. It alleged Union

Bank had breached its contract by not providing permanent financing. It asked

the court to require that Union Bank provide permanent financing and to prevent

Union Bank from foreclosing on its property.

       In October 2012, Black Diamond asked Union Bank to prepare a payoff

demand. Union Bank provided a payoff demand that included the amount'owed

for principal, interest, default interest, and certain fees. To avoid foreclosure,

Black Diamond obtained alternative financing from a third party and paid the

amount requested.

       In August 2013, the superior court granted Union Bank's summary

judgment motion and dismissed Black Diamond's breach of contract and

estoppel claims. The trial court also granted Union Bank's request for attorney

fees, which Black Diamond paid.

      On appeal, we affirmed the trial court's dismissal of the breach of contract

and equitable estoppel cIaims.1 We decided, however, that the trial court had

       1 Black Diamond Dev. Co. v. Union Bank, N.A., No. 71114-8-1, slip op. at
9-14     (Wash.      Ct.    App.      Mar.     30,   2015)     (unpublished),
http://www.courts.wa.gov/apinions/pdf/711148.pdf.
                                      -3-
No. 76079-3-1/4

improperly failed to address Black Diamond's allegation of improper accounting.2

We reversed so the trial court could consider the claim.3 We also reversed the

attorney fee award because neither party had prevailed yet.4

       In August 2016, Black Diamond filed a new complaint. The complaint

clarified the improper accounting claim and alleged new claims, including a claim

for interest paid on the reversed attorney fee award.

       Union Bank reviewed its records again and found that its payoff demand

had overestimated certain fees by $62 and included a $5,000 appraisal fee that

Union Bank had agreed not to charge to Black Diamond. Union Bank paid these

amounts to Black Diamond with interest. Union Bank also paid 4.02 percent

interest on the reversed attorney fee award, the parties' contractually agreed

upon interest rate for the loan.

       The trial court granted Union Bank's motion for summary judgment,

dismissing the remaining claims. The court awarded attorney fees to Union

Bank. The award included the attorney fees and costs previously granted in the

first summary judgment motion. The trial court awarded fees at a reduced rate

for Union Bank's attorney fees incurred after remand.

       Both Black Diamond and Union Bank appeal.

      2 Black Diamond, slip op. at 18.
      3 Black Diamond, slip op. at 18.
      4 Black Diamond, slip op. at 23.
                                         -4-
No. 76079-3-1 / 5

                                    ANALYSIS

       Black Diamond appeals the summary judgment dismissal of its claims

against Union Bank and the attorney fee award. Union Bank cross appeals the

amount of the fee award. The trial court properly dismissed Black Diamond's

improper accounting claim and claim for interest on returned attorney fees. But

the trial court abused its discretion in calculating the attorney fee award.

                               Improper Accounting

       First, Black Diamond challenges the trial court's dismissal of its improper

accounting claim. We review a summary judgment order de novo.5 We review

the facts and all reasonable inferences in the light most favorable to the

nonmoving party.6 A court properly grants summary judgment if no genuine

issue of material fact exists and the moving party is entitled to a judgment as a

matter of law.7 Mere allegations or conclusory statements of fact unsupported by

evidence are not sufficient to establish a genuine issue of material fact.5

       Black Diamond claims questions of fact remain as to whether Union Bank

included any improper charges in its payoff demand. Black Diamond specifically

argues that several of Union Bank's improper actions caused charges to accrue.

       5   Snohomish County v. Rugg, 115 Wash. App. 218, 224, 61 P.3d 1184
(2002).
       6Lvbbert v. Grant County, 141 Wash. 2d 29, 34, 1 P.3d 1124 (2000).
       7 CR56(c).
      8 Baldwin v. Sisters of Providence in Wash., Inc., 112 Wash. 2d 127, 132,
769 P.2d 298 (1989).
                                      -5-
No. 76079-3-1/6

"The rights and obligations of the parties to a credit agreement shall be

determined solely from the written agreement."9 Thus, we look to the agreement

to decide whether Union Bank breached any duty it owed to Black Diamond

when it calculated the payoff amount. As we explain below, it did not. Thus,

Black Diamond fails to show any issue of fact exists about the improper

accounting claim.

       1. Terminating Automatic Payments

       First, Black Diamond claims that Union Bank improperly canceled Black

Diamond's ability to make automatic payments.           Before May 2011, Black

Diamond had made monthly payments automatically. In May 2011, Union Bank

terminated Black Diamond's ability to make automatic payments. Black Diamond

contends that this obliged Black Diamond to deliver each payment check by

hand, causing delay and resulting in additional interest.

      But Black Diamond does not show that it had any right to make automatic

payments. Neither the construction loan agreement nor the later change-in-

terms agreements provide any right to make automatic payments. Further, when

Union Bank terminated Black Diamond's ability to make automatic payments,

Union Bank was not required to accept any installment payment from Black

Diamond because it was in default. Union Bank had no obligation to accept less

      9 RCW   19.36.110.
                                        -6-
No. 76079-3-1/ 7

than the full amount owed.           Because Union Bank had the right to refuse

automatic payments, Black Diamond cannot identify any issue of fact about any

interest that accrued as a result.

       2. Default Interest

       Next, Black Diamond claims that Union Bank improperly charged default

interest. Union Bank first notified Black Diamond that it would begin charging

default interest in its January 2012 default letter. The letter stated, "Bank hereby

demands payment of these amounts by February 3, 2012." The letter also

stated,

      In accordance with the Note, Bank is further exercising its right to
      invoke the default rate of interest provided for therein.
      Consequently, Borrower shall pay Bank interest on the aggregate
      outstanding principal amount of the Note at a rate per annum equal
      to 6 percent(6%) in excess of the Applicable Rate, calculated from
      February 4, 2012 until all amounts payable under the Note are paid
      in full.

Despite this notice, in February, March, and April, Black Diamond continued to

make monthly payments in the same amount as before.

       First, Black Diamond contends that the January 2012 letter did not meet

statutory notice requirements. Black Diamond cites RCW 61.24.030(8) and lists

several claimed defects based on this statute. But this statute is part of the

deeds of trust actl° and defines notices required before a trustee sale may occur.

      10 Ch. 61.24 RCW.
                                          -7-
No. 76079-3-1/ 8

It does not define the notice required before default interest may be charged.

Black Diamond cites no authority to show that the default letter Union Bank sent

provided insufficient notice in this context.

         Second, Black Diamond contends that the loan agreement does not

permit Union Bank to charge default interest retroactively. Black Diamond claims

that because Union Bank accepted February, March, and April payments that did

not include the default interest, it could not retroactively collect that interest.

Black Diamond does not show how Union Bank's delayed collection harmed it.

         Union Bank did not try to collect any more interest than it would have

received had Black Diamond paid the correct amount in February, March, and

April.   The agreement allows Union Bank to charge default interest "[u]pon

default, including failure to pay upon final maturity."    Union Bank told Black

Diamond when it would begin to charge default interest. Black Diamond does

not show that Union Bank did anything improper by collecting the accumulated

interest in April rather than on a monthly basis beginning in February.

         Black Diamond also asserts that Union Bank improperly applied payments

to regular interest and default interest rather than to the principal and regular

interest.   Before May 2012, Union Bank applied Black Diamond's monthly

payments to the principal and regular interest. But in May and June 2012, Union

Bank applied Black Diamond's payment to default interest and regular interest.

                                          -8-
No. 76079-3-1/ 9

Black Diamond claims that this conduct caused more interest to accrue on the

principal. But the agreement authorized Union Bank to apply payments to "any

accrued interest," regular or default.11 Thus, it authorized Union Bank's decision

to apply the payment to the interest instead of to the principal.

       Black Diamond does not show how any action by Union Bank involving

the default interest breached a duty owed to it. So Black Diamond does not raise

an issue of fact about the default interest charged in the payoff.

       3. Appraisal and Environmental Report Fees

       Next, Black Diamond contends that Union Bank should not have included

in the payoff demand the appraisal and environmental report fees. Union Bank

ordered an appraisal and environmental report as part of its process for deciding

whether to extend the term of the loan or provide permanent financing. Black

Diamond contends that Union Bank should not have included these fees

because they were not incurred for the foreclosure and, instead, related to the

loan renewal request.       But Black Diamond provides no authority for the

proposition that the payoff demand could include only expenses related to the

foreclosure. To the contrary, the construction loan agreement provides that

Black Diamond is responsible for an array of fees:

       11 The agreement states that "payments will be applied first to any accrued
unpaid interest; then to principal; then to any unpaid collection costs; and then to
any late charges."
                                         -9-
No. 76079-3-1/ 10

      Whether or not the Project shall be consummated, Borrower shall
      assume and pay upon demand all out-of-pocket expenses incurred
      by lender in connection with the preparation of loan documents and
      the making of the Loan, including without limitation the following:
      (A) all closing costs, loan fees, and disbursements;(B) all expenses
      of Lender's legal counsel; and (C) all title examination fees, title
      insurance premiums, appraisal fees, survey costs, required fees,
      and filing and recording fees.

The appraisal and environmental fees were related to the loan. More specifically,

they were incurred because Union Bank was evaluating whether to grant Black

Diamond's renewal request. Thus, Union Bank properly included the fees in the

demand.

       4. Returned Payments

       Next, Black Diamond argues that Union Bank improperly cashed payment

checks and issued refund checks. In July 2012, Black Diamond made its regular

payment. But Union Bank did not apply the payment to the loan. Instead, it sent

a partial payment letter stating that "the Bank will no longer accept partial

payments in an amount less than the full amount required to reinstate the Loan."

With the letter, the bank enclosed a refund check for the payment amount.

       Black Diamond contends that Union Bank should have included interest

with the returned amounts. It asserts that it is now entitled to interest for the time

from Union Bank's cashing of its check until the refund. But Union Bank had the

right to decline to accept the partial payments. Union Bank is not required to pay

                                        -10-
No. 76079-3-1 / 11

interest simply because Black Diamond continued to try to make these

payments.

       5. Attorney Fees in Payoff

       Next, Black Diamond challenges the attorney fees charged in the payoff

demand. The payoff demand included $26,022.40 for attorney fees. Black

Diamond contends that this amount was unreasonable and relies on the trial

court's decision to reduce the hourly rates of Union Bank's counsel, DLA Piper, in

its attorney fee award. But when the trial court awarded Union Bank attorney

fees, it considered the fees charged in the payoff demand and reduced its award

accordingly:

       Because plaintiffs paid the full amount of DLA Piper's fees charged
       to the Payoff Demand, but this Court finds that in this instance
       lower rates are reasonable, Union Bank's total fees award will be
       reduced by $7,222.40, which is the difference between the rates
       defense counsel actually charged and the rates this Court
       previously found to be "reasonable."

Thus, the trial court accounted for all unreasonableness of the attorney fees in

the payoff demand. Black Diamond contends that the trial court's decision about

the reasonableness of these fees somehow shows that summary judgment was

improper. But because the trial court accounted for any unreasonableness of

attorney fees in the payoff demand, Black Diamond does not show how further

developing these facts would show that it is entitled to any more relief.

                                        -11-
No. 76079-3-1 /12

       Black Diamond also challenges the fees Union Bank charged for work

performed by Hacker & Willig, the trustee for the foreclosure proceedings.

Specifically, Black Diamond claims that part of the trustee's fees could not have

been connected to the default and should not be charged to Black Diamond.

Again, Black Diamond cites no authority for the proposition that the payoff

demand can include only those fees connected to the default. The construction

loan agreement in fact provides that Black Diamond is required to pay "all of

Lender's costs and expenses, including Lender's attorneys' fees and Lender's

legal expenses, incurred in connection with the enforcement of this Agreement."

Black Diamond contends that this provision was superseded by the change-in-

terms agreement, which provides that the borrower will pay any fees incurred in

collecting amounts owed:

       ATTORNEY FEES; EXPENSES. Lender may hire or pay someone
       else to help collect this Agreement if Borrower does not pay.
       Borrower will pay Lender that amount. This includes, subject to any
       limits under applicable law, Lender's attorneys' fees and Lender's
       legal expenses, whether or not there is a lawsuit.

But this provision is not inconsistent with the provision in the construction loan

agreement. And the change-in-terms agreement states that the agreement

represents a change in the maturity date and that all other terms remain the

same. Thus, the loan agreement permits Union Bank to recover the fees

incurred in connection with assessing the viability of a loan refinance.

                                        -12-
No. 76079-3-1 / 13

      Black Diamond also challenges the Hacker & Willig fees on the basis that

it performed work duplicative of work also performed by Assayag Mauss. Trial

courts have discretion to decide attorney fee awards.12 But a calculation of hours

reasonably expended should not include duplicated effort.13 Black Diamond cites

generally to the invoices provided by the two firms and claims that Hacker &

Willig's work on reviewing the default notice prepared by Assayag Mauss was

duplicative. Both firms' invoices indicate that they worked on drafting the notice

of default. But as trustee, Hacker & Willig could properly review the default

notice prepared by Assayag Mauss. On this issue, the trial court could and did

properly use its discretion to decide the amount Union Bank charged for this work

was reasonable and therefore no question of fact existed.

      6. Failure To Provide Information

      Last, Black Diamond contends that Union Bank failed to provide

accounting information. Black Diamond specifically contends that Union Bank

failed to provide statements showing how charges were assessed and interest

accrued, information that it claims could have allowed Black Diamond to dispute

improper charges. But Black Diamond does not show the relevance of this to the

claim before us.     These allegations relate to Black Diamond's claim for

      12Mahler v. Szucs, 135 Wash. 2d 398, 435, 957 P.2d 632(1998).
      13Bowers v. Transamerica Title Ins. Co., 100 Wash. 2d 581, 597, 675 P.2d
193(1983).
                                   -13-
No. 76079-3-1 / 14

declaratory relief seeking an accounting, not the improper accounting claim.

Black Diamond's complaint about the accounting information it received does not

relate to its improper accounting claim.

                     Interest Paid on Returned Attorney Fees

       Black Diamond also challenges the trial court's dismissal of its claim for

interest on the returned attorney fee award. It contends that Union Bank owes

additional interest on the attorney fees Union Bank returned to it after the first

appeal.

       After the trial court granted Union Bank's summary judgment motion the

first time, it awarded attorney fees to Union Bank. On appeal, we determined

that the attorney fee award was premature. Accordingly, Union Bank returned

the fee award but did not include interest on the fees, explaining that "[u]nder the

circumstances, Black Diamond is not entitled to interest." After Black Diamond

added a claim for interest owed on the returned attorney fees to its complaint,

Union Bank paid Black Diamond interest on the attorney fees. Union Bank

calculated the interest using the parties' contractually agreed upon loan interest

rate of 4.02 percent. Union Bank asserted that because it paid the interest, Black

Diamond's claim was now moot. The trial court agreed and dismissed the claim

on summary judgment.

                                       -14-
No. 76079-3-1 /15

       Appellate courts review awards of prejudgment interest for abuse of

discretion, unlike awards of postjudgment interest that are reviewed de novo.14

Black Diamond contends that the proper standard of review is de novo because it

challenges the trial court's decision on a summary judgment motion. But the

underlying issue involves the question of the amount of prejudgment interest, on

which trial courts may exercise their discretion.15 Thus, we apply an abuse of

discretion standard to this issue.

       Black Diamond argues that the statutory prejudgment interest rate should

apply. Unless otherwise agreed between the parties, RCW 19.52.010 requires

12 percent interest for "[e]very loan or forbearance of money, goods, or thing in

action."16 Here, the contract does not specifically provide for the interest rate on

an award of attorney fees. But because the contract does provide for interest on

the loan, the trial court could determine that the parties had found this rate to be

a reasonable rate. The trial court acted within its discretion when it decided that

       14 TJ Landco, LLC v. Harley C. Douglass, Inc., 186 Wash. App. 249, 255-56,
346 P.3d 777(2015).
       15 TJ Landco, 186 Wash. App. at 255-56.
       16 Black Diamond relies on Humphrey Industries Ltd. v. Clay Street,
Associates, 176 Wash. 2d 662, 295 P.3d 231 (2013), to show that this 12 percent
interest rate should apply here. But Humphrey does not stand for the proposition
that the proper prejudgment interest rate on awards of attorney fees is 12
percent. It holds only that returned attorney fees accrue prejudgment interest,
not postjudgment interest. Humphrey, 176 Wash. 2d at 672-73. Humphrey does
not control our decision on this issue.
                                        -15-
No. 76079-3-1/ 16

the contractual interest rate was proper for the returned attorney fees. And even

if we reviewed this issue de novo, we would reach the same result.

                                   Attorney Fees

       Finally, Black Diamond and Union Bank both challenge the court's

attorney fee award. We review whether a party is entitled to attorney fees de

novo.17 In order to reverse the award, the challenging party must show that the

trial court manifestly abused its discretion.18 A trial judge has broad discretion to

determine the reasonableness of an award." We review that decision for an

abuse of discretion. Still, trial courts must exercise that discretion on articulable

grounds 20

       To decide a reasonable fee, a court first determines the lodestar amount.21

It calculates the lodestar amount by multiplying the number of hours reasonably

expended by the reasonable hourly rate.22 "The court should discount hours

spent on unsuccessful claims, duplicated or wasted effort, or otherwise

unproductive time."23 But "the fee award should not be reduced simply because

       17   N. Coast Elec. Co. v. Selig, 136 Wn.- App. 636, 643, 151 P.3d 211
(2007).
        N. Coast, 136 Wash. App. at 643.
       18
        N. Coast, 136 Wash. App. at 643.
       18
     28 Mahler, 135 Wash. 2d at 435.
     21 Bowers, 100 Wash. 2d at 597.
     22 Bowers, 100 Wash. 2d at 597.
     23 Chuong Van Pham v. Seattle City Light, 159 Wash. 2d 527, 538, 151 P.3d

976(2007).
                                    -16-
No. 76079-3-1/ 17

the plaintiff failed to prevail on every contention raised in the lawsuit."24 The

result is what matters in deciding which party prevailed.25 Thus, if a party has

limited success, the court should award fees that are reasonable in light of that

result.26 No precise formula exists for determining the extent to which a party

prevails, so "the trial court has discretion in determining the plaintiff's degree of

success."27

                                  Black Diamond

       Black Diamond raises several challenges to Union Bank's attorney fee

award. We agree with only one.

       First, Black Diamond contends that the fee award to Union Bank was too

big because Union Bank did not prevail on the improper accounting claim. In a

contract dispute, the court awards attorney fees only to a prevailing party.28

113]revailing party' means the party in whose favor final judgment is rendered."29

Black Diamond points out that Union Bank acknowledged an error in accounting

had occurred and the payoff amount was incorrect, albeit only slightly. But after

      24   Hensley v. Eckerhart, 461 U.S. 424, 435, 103 S. Ct. 1933, 76 L. Ed. 2d
40 (1983).
        25 Hensley, 461 U.S. at 435.
        28 Chuong Van Pham, 159 Wash. 2d at 540-41 (quoting Hensley, 461 U.S. at
440).
        27 Bright v. Frank Russell Invs., 191 Wash. App. 73, 81, 361 P.3d 245(2015)
(citing Hensley, 461 U.S. at 436-37).
        28 RCW 4.84.330.
        29 RCW 4.84.330.

                                          -17-
No. 76079-3-1/ 18

Union Bank paid Black Diamond back for the error, Black Diamond continued to

pursue its other claims. Union Bank moved for summary judgment, and the trial

court granted that motion. Although Union Bank discovered a minor accounting

error, it still substantially prevailed on the improper accounting claim. Here, the

trial court granted summary judgment unreservedly in favor of Union Bank.

Thus, the trial court acted within its discretion in determining that Union Bank was

the prevailing party even though Union Bank discovered some improper

accounting.

       Next, Black Diamond challenges fees incurred on specific parts of the

litigation. We address each challenge in turn.

       First, Black Diamond contends that it should not be charged for attorneys

who prepared for and attended oral argument but did not speak at the argument.

Black Diamond contends that this time was unproductive and an award of fees is

therefore unreasonable. We disagree. Attorneys may spend productive time

preparing for oral argument and supporting the attorney who argues without

actually arguing.

      Second, Black Diamond challenges the fee award to the extent that it

includes time spent researching the interest on the returned attorney fees. Black

Diamond asserts that Union Bank's attorneys initially erroneously determined

that it was not obligated to pay interest on the attorney fees. Indeed, Union Bank

                                       -18-
No. 76079-3-1 /19

claims that in April 2015, when it repaid the attorney fee award, it did not believe

that it was required to pay interest on that award. But after discovering a more

recent June 2015 decision that suggested otherwise,3° Union Bank paid Black

Diamond interest on the attorney fees. The court did not abuse its discretion by

not reducing the award because Union Bank's attorneys changed their opinion as

the result of a new decision.

       Third, Black Diamond contends that Union Bank should not recover fees

for time spent litigating various unsuccessful motions. It specifically challenges

the time spent litigating the timeliness of Black Diamond's appea1,31 Union Bank's

unsuccessful motion to publish, and a motion to strike expert testimony that

Union Bank never filed. But courts need not break down a prevailing party's

success to such a degree.32 The court properly determined that Union Bank was

the prevailing party and did not need to account for these motions.

       However, the trial court should have reduced the award to account for the

fees incurred in defending against Black Diamond's motion for reconsideration

before the first appeal. After the trial court granted Union Bank's first summary

judgment motion, Black Diamond moved for clarification and reconsideration,

      30 See Arzola v. Name Intelligence, Inc., 188 Wash. App. 588, 592, 595, 355
P.3d 286 (2015) (holding that an award of prejudgment interest on a reversed
award of damages, attorney fees, and costs was appropriate).
      31 See Black Diamond, slip op. at 5-8.
      32 Hensley, 461 U.S.
                           at 435.
                                      -19-
No. 76079-3-1 /20

seeking clarification about whether it had also dismissed Black Diamond's

improper accounting claim. The trial court denied the motion. But, on appeal, we

reversed the dismissal of the improper accounting claim.33 Thus, Black Diamond

prevailed on this claim in the first appeal. Black Diamond calculated that Union

Bank incurred $11,360 defending against the motion for reconsideration by

considering Union Bank's attorneys' hourly rates and the time it claims it spent on

the motion. The trial court could have reduced the award based on these facts

and should have done so in light of Black Diamond's success in the first appeal.

                                    Union Bank

       Union Bank also challenges the fee award. It contends that the trial court

abused its discretion when it reduced the hourly rates for Union Bank attorneys.

We agree.

       In an October 17, 2013, order awarding attorney fees, the trial court found

that a reasonable hourly rate for Union Bank's counsel, Stellman Keehnel, was

$500 per hour. In its later award of fees, however, the trial court found that a

reasonable rate for work performed by Mr. Keehnel in 2014 and 2016 was $395

per hour. The court found that "for the period following the October [17], 2013

fees award until the present, the reasonable rate in this case for defense counsel

Stellman Keehnel and Andrew Escobar is $395 per hour, which is the same rate

      33   Black Diamond, slip op. at 18.
                                        -20-
No. 76079-3-1/ 21

charged by plaintiffs' counsel Craig Rusk." Before Union Bank submitted the fee

request, the court indicated in an oral ruling that it would use Rusk's fees, which

were $395 per hour, as the benchmark for reasonableness in the case. Union

Bank submitted a fee request a few days later and included evidence to support

its claim that a $500 hourly fee was reasonable. But the trial court maintained in

its findings of fact that $395 was a reasonable rate.

       Union Bank asserts that the trial court's explanation for the reduction is

inadequate.    A trial court may consider a number of factors in setting the

reasonable rate.34 Factors include the attorney's usual fee, "the level of skill

required by the litigation, time limitations imposed on the litigation, the amount of

the potential recovery, the attorney's reputation, and the undesirability of the

case."35 Here, the court explained in an addendum, that it based this finding on

the quality of the work performed and the number of years in practice: "This

Court adjusted the hourly rates of Defendant's counsel as same as those

charged by the Plaintiffs' counsels.       Based upon the quality of the work

performed, the number of years in practice, the Court finds these hourly rates as

reasonable and appropriate for this matter." The trial court did not explain,

however, why the reasonable hourly rate for work completed after October 17,

2013, was less than the rate for work completed earlier.            Black Diamond

      34 See   Bowers, 100 Wash. 2d at 597.
      35   Bowers, 100 Wash. 2d at 597.
                                      -21-
No. 76079-3-I /22

contends that the later period of litigation involved less complex issues than the

earlier litigation. But the trial court made no such finding. We agree with Union

Bank that the trial court abused its discretion in reducing the fee award without

adequately explaining why it decided to adjust the hourly rate downward for the

later litigation.

        As Union Bank acknowledged in oral argument, it has not requested fees

on appeal. Thus, we award none.

                                 CONCLUSION

        We affirm in part and reverse in part. We affirm the summary judgment for

Union Bank on both the improper accounting claim and the claim for interest on

returned attorney fees.     We conclude, however, that the court abused its

discretion in calculating Union Bank's attorney fee award. We remand for further

proceedings consistent with this opinion.

WE CONCUR:

  rci
                                                 A4W/

                                       -22-