Court Opinion

ID: 3181558
Source: CourtListenerOpinion
Date Created: 2016-03-01 19:46:22.116618+00
Date Added: 2024-06-11T09:20:28.835904
License: Public Domain

Filed
                                                                                           Washington State
                                                                                           Court of Appeals
                                                                                            Division Two

                                                                                            March 1, 2016

    IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

                                          DIVISION II
 TED SPICE,                                                           No. 44101-2-II

                                Appellant,

         v.

 DONNA E. DUBOIS, as personal
 representative for the Estate of DORIS E.
 MATHEWS, deceased,
                                                               UNPUBLISHED OPINION
                                Respondents.

       WORSWICK, J. — Ted Spice appeals the trial court’s denials of his requests for attorney

fees, judgment notwithstanding the verdict, and a new trial. After a jury trial regarding a breach

of contract claim and numerous counterclaims, the jury returned a verdict that distributed several

parcels of real property between Spice and the estate of Doris Mathews. Spice argues that the

trial court erred by (1) designating the estate as the prevailing party, and therefore finding that

Spice was not entitled to attorney fees under two contracts between Spice and Mathews, and (2)

not granting Spice’s motion for judgment as a matter of law or a new trial. We hold that neither

party was the prevailing party and that Spice did not preserve his other issues for appeal.

Consequently, we affirm the trial court’s orders.
No. 44101-2-II

                                             FACTS

        Ted Spice met Doris Mathews in 2003 when he became her tenant. Mathews owned

several rental properties, which had fallen into disrepair. Spice began to help Mathews maintain

and manage the properties.

        In January 2004, Mathews issued a promissory note to Spice agreeing to pay half of “all

equity or monies realized in any amounts ranging from $5,000 up to $8,000,000 from property

sales, investments, developments, refinancing proceeds or any type of business projects

whatsoever relating to any properties purchased, bonds relating to” several of Mathews’s

properties,1 “including all property or investments, property purchases or any other business

project coordinated by the grantor now or transacted in the future.” Ex. 4. As collateral, the

promissory note identified “all future investments and properties purchase [sic], deeds, deeds of

trust, contract, mortgages, developments, current investments, projects including interest monies

or deeds held in” the same properties. Ex. 4. The promissory note contained an attorney fee

provision, which entitled Spice to reasonable attorney fees in the event he sued to collect on the

note.

        In February 2004, Spice obtained a durable power of attorney over Mathews. In April

2004, Spice and Mathews together formed a real estate development company called Plexus

Investments, LLC (Plexus). Spice held a 51 percent interest in Plexus, and Mathews held a 49

percent interest. Mathews and Spice signed a Plexus Operating Agreement governing the

company. This operating agreement also included an attorney fee provision for reasonable

1
 The properties were 11003 58th St. Ct. E., 11010 58th St. Ct. E., 5818 Milwaukee Ave. E., and
10915-10917 58th St. Ct. E.

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No. 44101-2-II

attorney fees to the substantially prevailing party in any dispute “arising out of the terms of this

Agreement or the Members’ relationship or a suit or action permitted herein.” Ex. 6 at 19.

           Both Spice and Mathews actively participated in Plexus. But Spice did not keep a

detailed accounting for Plexus beyond using bank statements and taxes, and sometimes he and

Mathews withdrew money from Plexus accounts at casinos. Both Spice and Mathews used

Plexus money for personal expenditures. The casino withdrawals alone totaled over $400,000,

and additional unidentified withdrawals from Plexus accounts totaled several hundred thousand

dollars.

           Several property transfers are at issue in this case.

          Between 2007 and 2009, Mathews granted Spice quitclaim deeds to 11003 58th St. Ct. E
           and 11319 58th St. Ct. E.
          In 2004, Spice granted Plexus a quitclaim deed to a property in Napavine.
          Between 2007 and 2008, Mathews granted Plexus a quitclaim deed to 5818 Milwaukee
           Ave. E. and 11305 58th St. Ct. E.
          In 2008, Mathews granted herself, Spice, and Paul Pasyuk a quitclaim deed to 11305 58th
           St. Ct. E.
          In 2009,2 Plexus granted Spice quitclaim deeds to 5818 Milwaukee Ave. E., 10915-10917
           59th St. Ct. E, and a parcel in Kitsap County.

In addition, the ownership of 11010 58th St. Ct. E. was at issue: it was listed in the promissory

note, but it appears that Mathews never conveyed it to Plexus or Spice.

           In December 2009, Mathews died. Spice filed a creditor’s claim against her estate

alleging that he was owed $8,000,000 under the promissory note. Mathews’s estate rejected this

claim in full. Spice then filed suit against the estate alleging breach of contract. Spice later

amended his complaint to allege conversion, tortious interference, breach of fiduciary duty, and

2
    These transfers occurred after Mathews’s death.

                                                      3
No. 44101-2-II

frivolous litigation. Spice’s suit relied only on the promissory note, not on the Plexus Operating

Agreement, to establish breach of contract.

       The estate filed 25 counterclaims, including fraud, undue influence, breach of fiduciary

duties, wrongful death, and other claims regarding Spice’s relationship with Mathews. One of

these counterclaims was a quiet title action concerning the properties discussed above. The trial

court dismissed the counterclaim for wrongful death on summary judgment, but the remaining 24

counterclaims proceeded to trial.

       Spice moved in limine to exclude certain character evidence including “who parks at

[Spice’s] home” and “who stays at [Spice’s] home.” Clerk’s Papers (CP) at 683-84. The trial

court granted this motion.

       The case proceeded to a jury trial, during which witnesses testified about Spice’s and

Mathews’s relationship and business dealings. At trial, the estate’s counsel asked a witness

about who visited Spice at his home, and the witness responded: “Boys. Lots and lots of young

boys.” 4 Verbatim Report of Proceedings (VRP) at 435. The trial court sustained Spice’s

objection, and at a sidebar conference, the trial court contemplated whether a mistrial was

appropriate. The court found that the witness’s “tone and inflection” raised an “obvious

inference as to Mr. Spice’s sexual orientation and actual misconduct on the part of Mr. Spice.” 4

VRP at 439. The court also found that the witness anticipated the question and that it was asked

in such a way so as to evade the order in limine regarding character evidence. The court said that

either a mistrial or individual questioning of jurors would be an appropriate remedy. Spice

refused the offer to declare a mistrial. Instead, the trial court questioned each juror individually

about whether he or she noticed the innuendo in the question and answer, and, if so, whether the

                                                  4
No. 44101-2-II

juror could still be fair. The trial court satisfied itself that each juror could provide a fair verdict.

Upon Spice’s request, the trial court later found the estate’s counsel in contempt for violating the

order in limine.

          Instead of asking the jury to issue special verdicts regarding each claim and counterclaim,

the parties and the court had the jury present its verdict in the form of distributing the properties

at issue in the case. The jury found that neither Spice nor the estate was entitled to all right title

and interest in the properties. Instead, the jury distributed the property as follows:

         11003, 11004, 11007, 3 and 110114 58th St. Ct. E: 25 percent to Spice, 75 percent to the
          estate.
         Napavine property: 5 100 percent to Spice.
         5818 #A and #B Milwaukee Ave E.6: 100 percent to the estate.
         11305 58th St. E.7: 100 percent to the estate.
         11319 58th St. E.8: 100 percent to Spice.
         10915-10917 58th St.9: 100 percent to the estate.
         Kitsap County acreage: 50 percent to Spice, 50 percent to the estate.

3
 The market value of the triplex at 11003 was roughly $610,000. It is unclear from the record
whether the triplex includes 11004 and 11007.
4
    This may be a scrivener’s error; the record elsewhere refers only to 11010 58th St.
5
 The record does not appear to contain value estimates for the Kitsap County acreage or the
Napavine property.
6
    The market value of this property was roughly $269,000.
7
    The market value of this property was roughly $250,000.
8
    The market value of this property was roughly $325,000.
9
    The market value of this property was roughly $225,000.

                                                    5
No. 44101-2-II

       After the jury’s verdict, Spice moved for judgment as a matter of law or a new trial under

CRs 49, 50, and 59. He argued that judgment as a matter of law or a new trial was appropriate

because there was not sufficient evidence to support the jury’s verdict. At a hearing on this

motion, Spice’s attorney told the court, “[W]e’re not asking for a new trial.” VRP (Oct. 5, 2012)

at 3-4. Instead, Spice said he wanted the court to revise the jury’s verdict as a judgment as a

matter of law.

       The trial court denied Spice’s motion for judgment as a matter of law or a new trial. It

noted that the case was complex and that it was difficult to know on what basis the jury made its

decision, because there were no special verdict forms about specific claims or documents. But

the court explained that the jury must have decided not to rule in Spice’s favor because there

were “hundreds of thousands of dollars of monies that were unaccounted for,” and the defense

had posited that legal documents between the parties were unfairly or even fraudulently

favorable to Spice. VRP (Oct. 5, 2012) at 11. It referred to the testimony about transfers of

money and concluded that the jury could have concluded that “the operating agreement[] was a

fraud, that any of the transfers were a fraud or misrepresented to [Mathews], that Mr. Spice may

have taken more cash and [the jury] offset that amount toward anything he might be claiming in

the property.” VRP (Oct. 5, 2012) at 12. It denied the motion for judgment as a matter of law or

a new trial, concluding that the jury had considered conflicting evidence and the credibility of the

witnesses and distributed the properties accordingly.

       Spice moved for reasonable attorney fees pursuant to the promissory note and the Plexus

Operating Agreement, arguing that he was the substantially prevailing party. The estate also

moved for reasonable attorney fees as the substantially prevailing party under the promissory

                                                 6
No. 44101-2-II

note. The trial court denied reasonable attorney fees to both parties. Regarding Spice, the trial

court found that he was not the substantially prevailing party, after considering the “values of the

properties and the amount of interest in the real property” that the estate received. CP at 1225.

The court also rejected Spice’s argument that he was the substantially prevailing party for having

defended against the estate’s numerous affirmative defenses and counterclaims.

       Turning to the estate’s request for attorney fees, the trial court found that the estate was

the substantially prevailing party. But the trial court denied the estate’s request for reasonable

attorney fees because of the estate’s “excessive motion and litigation practice and ineffective use

of court time,” as well as the delays caused by the estate’s counsel’s inexperience. CP at 1227.

The court also wrote:

       This Court also repeats its finding that it has serious questions regarding the legality
       of the documents upon which both parties are relying on with regard to their
       contractual source of the reasonable attorney’s fees request; specifically, a
       promissory note and the Plexus, LLC, operating agreement. Although no specific
       jury instruction was requested to make a finding as to whether or not those
       documents were in fact credible, the Court can only infer, from the decision of the
       jury which weighed heavily in the ultimate result in favor of the Estate of Doris E.
       Mathews, that they also shared those questions regarding the legality of said
       documents.

CP at 1227. The trial court concluded that an award of statutory attorney fees and costs only was

appropriate based on the estate counsel’s lack of experience, counsel’s excessive motions, and

the number of baseless counterclaims and affirmative defenses.

       Accordingly, the trial court entered the following relevant conclusions of law: that Spice

was not the prevailing party, and that the estate receive only statutory fees and costs. The court

                                                  7
No. 44101-2-II

wrote that it did not “believe there is a contractual basis to award fees [to the estate].” CP at

1228. Spice appeals.10

                                            ANALYSIS

                                         I. ATTORNEY FEES

       Spice argues that the trial court erred by denying his request for attorney fees. He argues

primarily that he was the substantially prevailing party.11 We hold that Spice was not entitled to

attorney fees because neither party was the substantially prevailing party.12

A.     Standard of Review

       We generally engage in a two-step process to review a trial court’s denial of attorney

fees. State v. AU Optronics Corp., 180 Wn. App. 903, 913, 328 P.3d 919 (2014). First, we

review de novo whether a statute, contract, or equity provides a basis for the award of attorney

fees. AU Optronics, 180 Wn. App. at 913. Where, as here, the award of attorney fees depends

on a determination of who substantially prevailed, we review the trial court’s determination of

who is the substantially prevailing party de novo. Hawkins v. Diel, 166 Wn. App. 1, 10, 269

P.3d 1049 (2011). Second, we review the trial court’s decision to award attorney fees, as well as

10
   The estate does not appeal the trial court’s decision to not award the estate’s reasonable
attorney fees under the promissory note.
11
  As a threshold matter, the estate argues that we should deem the trial court’s findings of fact
about attorney fees verities on appeal because Spice failed to include these findings verbatim in
his brief as required by RAP 10.4(c). Spice does include the material portions of the findings of
fact in his brief, and we exercise our discretion to consider his argument on the merits.
12
  Spice and the estate argue the validity and applicability of the attorney fee provisions in the
promissory note and Plexus Operating Agreement. Because we affirm the trial court’s finding
that Spice did not substantially prevail, we do not address these arguments.

                                                  8
No. 44101-2-II

the reasonableness of the amount, for an abuse of discretion. AU Optronics, 180 Wn. App. at

913. A trial court abuses its discretion when its decision is unreasonable, based on untenable

grounds, or made for untenable reasons. Cook v. Brateng, 180 Wn. App. 368, 375, 321 P.3d

1255 (2014).

B.     Substantially Prevailing Party

       Spice argues that he was the substantially prevailing party, and therefore he deserved

reasonable attorney fees under the promissory note and the Plexus Operating Agreement. We

disagree because neither party substantially prevailed. Thus, the trial court did not abuse its

discretion by denying Spice’s request for attorney fees because he was not a substantially

prevailing party.

       Under RCW 4.84.330, the prevailing party in a contract dispute is entitled to attorney

fees incurred to enforce the contract, so long as the contract specifically provides for attorney

fees to either party. Here, the promissory note provides for reasonable attorney fees in the event

of default, and the Plexus Operating Agreement provides for attorney fees to the substantially

prevailing party.

       “The substantially prevailing party need not prevail on his or her entire claim.” Hawkins,

166 Wn. App. at 10. Determining which party substantially prevailed depends on the relief

granted. Dave Johnson Ins., Inc. v. Wright, 167 Wn. App. 758, 783, 275 P.3d 339 (2012). If

“both parties are awarded relief, the net affirmative judgment may determine the prevailing

party.” Phillips Bldg. Co. v. An, 81 Wn. App. 696, 702, 915 P.2d 1146 (1996). However, the net

affirmative judgment method may not be appropriate where a party receives affirmative

judgment on just a few claims. Phillips, 81 Wn. App. at 702. Alternatively, where multiple and

                                                 9
No. 44101-2-II

distinct claims were at issue, the trial court should take a “proportionality approach.” Marassi v.

Lau, 71 Wn. App. 912, 917, 859 P.2d 605 (1993), overruled on other grounds by Wachovia SBA

Lending, Inc. v. Kraft, 165 Wn.2d 481, 490, 200 P.3d 683 (2009).

       But if both parties are awarded “some measure of relief and there is no singularly

prevailing party, neither party may be entitled to attorney fees” and both parties will pay their

own costs and fees.13 Phillips, 81 Wn. App. at 702. For example, in Hertz v. Riebe, the

plaintiffs succeeded on their breach of contract claim and the defendants succeeded on their

collections claim. 86 Wn. App. 102, 104-05, 936 P.2d 24 (1997). The court held that because

both parties prevailed on major issues, neither party was entitled to attorney fees. Hertz, 86 Wn.

App. at 105-06.

       Here, neither party substantially prevailed because both parties were afforded some

measure of relief. Hertz, 86 Wn. App. at 105-06; Phillips, 81 Wn. App. at 702. The many issues

at trial involved whether the estate breached the promissory note, whether the estate committed

conversion, tortious interference, or breach of fiduciary duty, and whether Spice committed any

of the torts and contract violations alleged in the 25 counterclaims. But the jury provided its

verdict in the form of distributing property. It found that neither Spice nor the estate was entitled

to all right and interest in the properties, instead dividing them as follows: Spice received 100

percent of two of the properties, the estate received 100 percent of four of the properties, and the

13
 The estate does not argue that neither party substantially prevailed, but Spice admits that this
would be the case if we hold that both parties prevailed on major issues.

                                                 10
No. 44101-2-II

parties shared interest in the remaining properties. Thus, both parties were awarded significant

portions of the properties, and neither party clearly prevailed over the other.

       Spice argues that we should deem him the prevailing party because he prevailed against

all of the estate’s counterclaims. We disagree: the jury provided a verdict in the form of

distributing property only. It is inappropriate to attempt to look behind the jury’s distribution of

property to divine what claims or counterclaims they believed had been proved. We do not

inquire into the jury’s process. Breckenridge v. Valley Gen. Hosp., 150 Wn.2d 197, 204-05, 75

P.3d 944 (2003). Thus, there is no basis upon which we can determine how many claims on

which each party prevailed.

       Moreover, Spice provides no authority for the proposition that a party substantially

prevails by prevailing on numerically more claims or counterclaims. Where a party cites no

authority for a proposition, we may assume that the party has unsuccessfully searched for such

authority. Dep’t of Ecology v. Wahkiakum County., 184 Wn. App. 372, 376-77 n.3, 337 P.3d

364 (2014), review denied, 182 Wn. 2d 1023 (2015). In other words, there is no support for the

notion that we should determine that Spice substantially prevailed merely because he defended

against 24 counterclaims, even if the record supported the notion that the jury found that he

defended all those counterclaims.

       Spice argues in the alternative that we should award both parties proportional attorney

fees because both prevailed on major issues. A proportional award of attorney fees is sometimes

appropriate when each party prevails on distinct and severable claims. See Marassi, 71 Wn.

App. at 915. But as stated above, it is impossible to know which claims each party prevailed on.

                                                 11
No. 44101-2-II

Thus, in this circumstance, it is appropriate that each party bear its own costs and fees, because

neither party substantially prevailed. See Phillips Bldg. Co., 81 Wn. App. at 702.

       Because neither party substantially prevailed, the trial court did not abuse its discretion

by denying attorney fees to Spice.14 As stated above, Spice received less than half of the

properties. And as the trial court noted, it is inappropriate for Spice to attempt to determine how

many of the counterclaims he won. Thus, the trial court had tenable grounds and reasons for

ruling that Spice, as a nonprevailing party, should not receive attorney fees. See Cook, 180 Wn.

App. at 375.

                                      II. POST-TRIAL MOTIONS

       Spice argues that the trial court erred by denying his motions for judgment as a matter of

law or a new trial.15 We disagree.

A.     Judgment as a Matter of Law Issue Not Preserved

       CR 50(b) governs post-verdict motions for judgments as a matter of law. Such a motion

is proper when the court can find, as a matter of law, that there was no substantial evidence or

reasonable inference to sustain a verdict for a nonmoving party. Guijosa v. Wal-Mart Stores,

Inc., 144 Wn.2d 907, 915, 32 P.3d 250 (2001). But a party loses the opportunity to make a

motion for judgment as a matter of law if it fails to move for a directed verdict under CR 50(a)

14
  The trial court found that the estate was the substantially prevailing party. This finding does
not affect the analysis in this case because the trial court ultimately denied the estate’s request for
reasonable attorney fees on other grounds, and the estate does not appeal this determination.
15
  After the jury verdict, Spice simultaneously moved for judgment under CRs 49, 50, and 59.
He appeals the trial court’s adverse ruling for judgment as a matter of law under CR 50(b) and a
new trial under CR 59.

                                                  12
No. 44101-2-II

before the case is submitted to a jury. Gorman v. Pierce County, 176 Wn. App. 63, 86, 307 P.3d

795 (2013), review denied, 179 Wn.2d 1010 (2014); see CR 50(b).

       Spice concedes he requested the judgment as a matter of law only after the verdict came

back from the jury, without previously having made a motion for a directed verdict. Thus, Spice

failed to preserve his judgment as a matter of law issue, and this claim fails.

B.     Motion for New Trial Issue Not Preserved

       Spice appears to argue that the trial court erred by denying his motion for a new trial

because the evidence did not support the jury’s verdict and because the estate’s attorney

committed misconduct. We hold that Spice is not entitled to a new trial on either basis because

he failed to preserve either issue for appeal.

       1. Request for New Trial Issue Not Preserved

       Spice’s written motion in the trial court appeared to request a judgment as a matter of law

and a new trial in the alternative, but at the hearing on Spice’s motion, his counsel said: “[W]e’re

not asking for a new trial.” VRP (Oct. 5, 2012) at 3-4. Instead, he said he was requesting the

trial court to alter the jury’s verdict. Because Spice did not request or argue why he was entitled

to a new trial below, he has not preserved this issue on appeal and we decline to consider it.

RAP 2.5. Additionally, because Spice told the trial court he was not seeking a new trial, the trial

court did not rule on his request for a new trial. Thus, there is no ruling for us to review.

       2. Misconduct Argument Not Preserved on Appeal

       Spice also argues that he deserved a new trial under CR 59 because of the misconduct of

the estate’s counsel. Spice failed to preserve this issue for appeal for two reasons.

                                                 13
No. 44101-2-II

       First, Spice did not argue to the trial court that opposing party misconduct required a new

trial. He argued only that the jury verdict was unsupported and should be altered. Because we

review the trial court’s ruling on a motion for a new trial for an abuse of discretion, we generally

review only those grounds argued to the trial court. See RAP 2.5.

       Second, Spice refused the trial court’s offer to declare a mistrial after a witness appeared

to raise an inappropriate innuendo about Spice’s sexuality. A party waives the right to request a

new trial based on misconduct if it declines a mistrial on the same basis. Estate of Lapping v.

Grp. Health Co-Op. of Puget Sound, 77 Wn. App. 612, 619-21, 892 P.2d 1116 (1995). Thus,

Spice has waived the right to a new trial due to misconduct because he declined a mistrial when

the misconduct occurred.

                                ATTORNEY FEES ON APPEAL

       Both Spice and the estate request attorney fees on appeal. We grant the estate’s request.

       Spice argues that he is entitled to attorney fees under RCW 4.84.330, which permits

attorney fees to the prevailing party under a contractual agreement. But because Spice is not the

prevailing party on appeal, he is not entitled to attorney fees on appeal.

       Similarly, the estate requests attorney fees on appeal under RCW 4.84.330, pursuant to

the attorney fee provision in the promissory note. Because we hold in the estate’s favor on

appeal, RCW 4.84.330 entitles the estate to reasonable attorney fees on appeal to be set by the

commissioner of this court upon compliance with RAP 18.1(d).

                                                 14
No. 44101-2-II

       Affirmed.

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

Washington Appellate Reports, but will be filed for public record in accordance with RCW

2.06.040, it is so ordered.

                                                                    Worswick, J.
 We concur:

 Johanson, C.J.

 Maxa, J.

                                               15