Court Opinion

ID: 4469628
Source: CourtListenerOpinion
Date Created: 2020-01-06 20:14:23.579136+00
Date Added: 2024-06-11T08:48:21.297830
License: Public Domain

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

 MICHAEL BUICH,
                                                   No. 78931-7-I
                      Appellant,
                                                   DIVISION ONE
               V.
                                                   UNPUBLISHED OPINION
 TADICH GRILL DEVELOPMENT
 COMPANY, LLC, a Washington limited
 liability company,

                      Respondent.                  FILED: January 6, 2020

       APPELWICK, C.J.   —   The trial court vacated a default judgment obtained by

Buich against TGDC and awarded attorney fees to TGDC. Buich argues the trial

court abused its discretion. We affirm.

                                       FACTS

       Michael Buich is the owner of Tadich Grill Inc. (TGI), which owns and

operates the Tadich Grill, a restaurant in San Francisco. The Buich family has

owned Tadich Grill since the late 1 920s. Gerard Centioli is the president and chief

executive officer of ICON Inc. and the president of lCONcepts LLC, the majority

stakeholder of Tadich Grill Development Company LLC (TGDC).             TGDC was

formed in 2009 by lCONcepts and Buich to market TGI in additional cities.

      Since TGDC’s founding, the company opened only one new restaurant.

That restaurant opened in Washington, D.C., in 2015. It filed for bankruptcy in

January 2018. The restaurant’s failure was due in part to negative publicity from
No. 78931-7-1/2

a Washington Post article concerning unseemly allegations regarding the Buich

family.     The parties disagreed on how to respond to the article, and their

relationship has since deteriorated considerably. Between May 14 and 24, 2018,

Buich filed two lawsuits and a cross complaint against TGDC in three different

forums. Those forums included a California state court, the United States District

Court for the Northern District of California, and this action in Washington state

court. Buich and TGI are represented in the California actions by William Frimel.

Buich is represented in the Seattle action by Jeffery Bilanko.

          On March 18, 2018, Buich sent a letter to Centioli through his Seattle

attorney, Bilanko, indicating his desire to dissolve TGDC. Centioli responded that

he had retained counsel in connection with the matter and would forward the

correspondence for their review. Buich filed the dissolution action in King County

Superior Court on May 24. Centioli was personally served in that action on the

same day.

          On June 1, Buich scheduled a hearing for a motion for summary judgment

in the dissolution matter. Buich attempted to personally serve Centioli notice of

the motion the same day, but was unsuccessful.

          Centioli is represented by Perkins Coie LLP. Davis Wright Tremaine LLP

(DWT) was retained to represent TGDC after Perkins Coie determined it should

not also represent TGDC. DWT obtained and reviewed papers associated with

the three actions on June 8, 2018 and commenced work for TGDC the same day.

Due to an apparent oversight in the transition of TGDC’s defense to DWT, DWT

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No. 78931-7-1/3

never received proof of service associated with the May 24, 2018 service of

Centioli in the Washington dissolution action.

       Later on June 8, John Freed, an attorney at DWT, left a voice mail for

Buich’s California attorney, William Frimel, representing that he had been retained

to defend TGDC in the California cases. Freed then sent an e-mail to Frimel again

indicating that DWT had been retained to defend TGDC. In his e-mail, Freed

indicated that he was unsure whether TGDC had been served. Freed also copied

Will Rava, an attorney at Perkins Coie, who was representing the remaining

defendants in the California actions. Subsequent to this e-mail, Freed, Frimel, and

Rava had a phone conference. During the conference, Buich’s California attorney,

Frimel, represented that Centioli was avoiding service. Frimel now claims that it

was clear that he was referring to service of process when referring to the

California cases, and to service of notice of the summary judgment hearing when

referring to the Washington case.                  TGDC’s attorney now claims that the

conversation was in regards to service generally, and that he was led to believe

that TGDC had not been served in the Washington dissolution action at all. In an

e-mail later that day, Buich’s California attorneys wrote: “Please confirm that Davis

Wright Tremaine will accept service on behalf of TGDC of the latest papers counsel

in the dissolution action is trying to serve. I have attached acceptance of service

forms [for the California cases]   .   .   .   and will ask dissolution counsel to forward the

same for the dissolution matter.” DWT did not respond to this e-mail.

       On June 19, Buich’s Washington attorney filed a motion for default without

notice to TGDC. He included a declaration that TGDC had not answered the

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No. 78931-7-114

complaint or otherwise appeared in the action. Buich’s motion did not disclose any

of the prior communications between Buich’s California attorney and DWT. The

court granted the motion the next day. Buich’s Washington attorney then moved

for an entry of default judgment on June 22. The motion was denied because it

did not include evidence regarding any matter set forth in the motion, including

service.

       At 5:20 p.m. on June 25, TGDC’s attorneys e-mailed Buich’s Washington

attorney to inquire about whether TDGC had been served in the dissolution action.

Also on June 25, Buich’s Washington attorney claimed he filed another motion for

entry of default judgment. He admits that this motion was filed after the 5:20 p.m.

e-mail from TGDC, but assert he had not known of the TGDC e-mail at that time.

Court records indicate that the motion was filed on June 26 at 9:00 am. The

motion asserted that TGDC “failed to file its answer, a notice of appearance, or

provide a defense in this matter.” The motion and supporting declaration contain

no reference to the previous California communications, or the e-mail that Buich’s

attorney had received the previous day. The court granted the motion at 9:10 am.

on June 26.

      At 4:30 p.m. on June 26, Buich’s attorney responded to TGDC’s service

inquiry with the summons, complaint, and declaration of service of the complaint,

and said that default judgment had been entered. TGDC’s attorney responded by

requesting that Buich stipulate to vacate the default judgment. Buich’s attorney

responded by asking for a detailed explanation of TGDC’s basis to defend the

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No. 78931-7-1/5

dissolution action on the merits. TGDC’s attorney provided a written summary of

their defenses at 9:27 p.m. on July 2.

       On July 3, without responding to TGDC’s request for stipulation, Buich’s

attorney filed dissolution papers for TGDC with the Washington Secretary of State

based on the default judgment. Later that day, Buich’s California attorney filed a

motion in the federal action claiming TGDC had been dissolved.

       On July 9, TGDC’s attorney sent a letter to Buich’s Washington attorney,

again requesting that he stipulate to vacate the judgment. He indicated that if

Buich refused, he would pursue a motion to that effect and make a complaint to

the Washington State Bar Association for professional misconduct.           Buich’s

attorney responded that he would not stipulate to vacating the judgment.

       On July 24, TGDC moved to vacate the default judgment. The trial court

found that TGDC had made an informal appearance, rendering the default

judgment void for lack of notice. The trial court also found the judgment could be

set aside due to misrepresentation and misconduct by Buich’s attorneys, or due to

excusable neglect by DWT. The court granted the motion to vacate, ordered Buich

to revoke the dissolution of TGDC, and awarded TGDC $49,466 in attorney fees.

       Buich appeals.

                                  DISCUSSION

      The appellant makes four arguments. First, he contends that TGDC made

no informal appearance in the case, and therefore was not entitled to notice of the

motion for default under CR 55(a)(3). Second, he contends that TGDC is not

entitled to relief from default under CR 60(b)(1), because TGDC’s failure to appear

                                            5
No. 78931-7-1/6

was not due to excusable neglect and it has not established a prima facie defense

to dissolution. Third, he contends that there was no fraud, misrepresentation, or

misconduct by his attorney that would justify vacating the default judgment under

CR 60(b)(4).    Last, he contends that the trial court erred in awarding TGDC

attorney fees. In the alternative, he contends that DWT’s hours expended and

hourly rates were unreasonable.

       The trial court’s findings of fact are viewed for substantial evidence.

Blackburn v. Dep’t of Soc. & Health Servs., 186 Wash. 2d 250, 256, 375 P.3d. 1076

(2016). Substantial evidence is evidence sufficient to persuade a rational, fair-

minded person of the truth of the finding. ki. This court reviews questions of

whether an appearance has been established as a matter of law de novo when the

facts are not in dispute. Meade v. Nelson, 174 Wash. App. 740, 750, 300 P.3d 828,

833 (2013). This court otherwise reviews a trial court’s decision to set aside a

default judgment for abuse of discretion. Trinity Universal Ins. Co. of Kan. V. Ohio

Cas. Ins. Co., 176 Wash. App. 185, 195, 312 P.3d 976 (2013). Vacation of default

judgment is equitable in nature, and the trial court has discretion to do justice

between the parties. See Hous. Auth. of Grant County v. Newbiciginq, 105 Wn.

App. 178, 185, 192, 19 P.3d 1081 (2001). Therefore, this court should review a

trial court’s decision to award attorney fees for motion to vacate an order for default

judgment for abuse of discretion.   14. (“The decision to impose terms as a condition
on an order setting aside a judgment lies within the discretion of the court.”

(quoting Knapr v. SL. Savidcie, Inc., 32 Wash. App. 754, 756, 649 P.2d 175 (1982)).

This court also reviews whether the amount of attorney fees is reasonable under

                                              6
No. 78931-7-1/7

an abuse of discretion standard. Taliesen Corp. v. Razore Land Co., 135Wn. App.

106, 141, 144 P.3d 1185 (2006).

  I.   Vacation of Default Judgment

       A. CR 60(b)(5): Void for Lack of Notice

       The trial court found that TGDC had made an informal appearance in the

matter based on the e-mail and telephonic communications that occurred before

the entry of default judgment. Based on this finding, TGDC was entitled to notice

before a default could be taken. Since notice had not been given, the trial court

concluded under CR 60(b)(5) that the default and default judgment were void for

lack of notice. The facts are not in dispute, only the import of those facts.

       Under CR 55(a)(3), a party is entitled to notice of a motion for default if they

have appeared for any purpose. The appearance requirement may be satisfied

informally through the doctrine of substantial compliance. Morin v. Burns, 160
Wash. 2d 745, 749, 161 P.3d 956 (2007). To determine if a party has substantially

complied, the court examines the defendant’s relevant conduct after litigation has

commenced to determine if it was designed to, and, in fact, did apprise the plaintiff

of the defendant’s intent to litigate the case. k1. at 755. Mere intent to defend,

whether shown before or after a case is filed, is not enough. Id. at 756. “[T]he

defendant must go beyond merely acknowledging that a dispute exists and instead

acknowledge that a dispute exists in court.” k1.

           1. No Informal Appearance June 8

       Here, TGDC is involved in three separate lawsuits: an action in federal

district court in the District of Northern California, a California state action and this

                                               7
No. 78931-7-1/8

Washington dissolution action.         DWT was retained to represent TGDC after

Perkins Cole determined it should not also represent TGDC in these actions,

presumably because they represented Centioli personally. DWT had received a

copy of the Washington pleadings, but had not received proof of service.

          DWT’s only contact after the Washington litigation had commenced and

before the motion for default was on June 8. The initial e-mail to William Frimel

stated:

          Hi Bill,
          I’m writing to follow up on the voicemail [sic] I just left you regarding
          the Tadich Grill action in the Northern District. Davis Wright
          Tremaine was retained yesterday to represent Tadich Grill
          Development Company, LLC. We are not sure whether Plaintiff has
          served TGDC, but we understand it served other Defendants at
          various times in recent days. Regardless, we could use a bit of time
          to get up to speed on this complex matter, and would appreciate it if
          you would grant us a short extension of time to respond to the
          Complaint. To the extent you haven’t served TGDC, we would be
          happy to accept service to move things along.

          I’ve copied Will Rava from Perkins Cole, who is representing the
          remaining Defendants. We propose agreeing to a uniform deadline
          next month for all Defendants to respond to the Complaint. Is this
          concept acceptable to Plaintiff? If so, we propose a collective July
          13 deadline. Please let us know. If you are agreeable, I’ll prepare
          and circulate a stipulation to all parties early next week.

          Looking forward to working with you.

          Thank you.

          Jake Freed
      This e-mail was followed by the telephone conference between DWT

attorney Jake Freed, Buich’s California attorney William Frimel, and Will Rava,

                                                 8
No. 78931-7-1/9

from Perkins Coie. The declarations of counsel describe the content of that call.

According to Jake Freed:

      On June 8, 2018, I called William Frimel, counsel for Plaintiff Tadich
      Grill, Inc. (“Tadich”) to ask whether Tadich had served TGDC in a
      related action in the Northern District of California (“Federal Action”),
      and to obtain an extension of time for TGDC to respond to the
      Federal Action complaint. After assuring me that he had served
      TGDC, without explaining how he did so, Mr. Frimel refused to grant
      the routine professional courtesy of an extension unless DWT, which
      does not represent Gerard Centioli, could find someone to accept
      service of the Complaint on Mr. Centioli’s behalf. Mr. Frimel accused
      Mr. Centioli of “avoiding service” through acts such as “hiding at his
      girlfriend’s,” although Mr. Frimel provided no factual supportforthese
      accusations. Contrary to Mr. Frimel’s representations regarding Mr.
      Centioli’s supposed avoidance of service, attorneys representing
      Tadich’s principal (and Mr. Frimel’s other client) Michael Buich, had,
      on May 24, 2018, personally served Mr. Centioli with the complaint
      in this parallel dissolution action against TGDC in King County. On
      information and belief, Mr. Frimel was aware of this May 24 personal
      service on Mr. Centioli, such that his representations about Mr.
      Centioli avoiding personal service were incomplete and materially
      misleading.

According to William Frimel:

      Subsequently on June 8, 2018, Mr. Freed, Mr. Rava, and I had a
      phone conversation, during which, I informed Mr. Freed that Gerard
      Centioli appeared to be avoiding service of the complaints in both
      California actions. I also informed Mr. Freed that Mr. Centioli
      appeared to be avoiding service of the notice of summary judgment
      hearing date in the Washington dissolution action. I specifically
      stated that the dissolution action was pending. I never told or implied
      to Mr. Freed that TGDC had not been served with the compliant in
      the Washington dissolution action. At no point during this phone
      conference did Mr. Freed ever request any information about the
      Washington Dissolution Action. Nor did Mr. Freed ever state or
      otherwise indicate that Davis Wright Tremaine (“DWT”) represented
      TGDC in the Washington action or that anyone at DWT was
      appearing for TGDC in the Washington action. In fact, Mr. Freed did
      not acknowledge the Washington action at all.

(Boldface omitted.) The exchange concluded with these e-mails:

                                             9
No. 78931-7-1/10

      Bill-

      Perkins Coie confirms it will accept service on behalf of Gerard
      Centioli in exchange for Defendants’ collective deadline to respond
      to the federal complaint being extended to July 13. Please send Will
      Rava any acceptance of service forms.

      If this is acceptable to you, I will prepare a stipulation under Local
      Rule 6-1 for a self-executing extension, and will circulate it on
      Monday. Since you are going to be in Hawaii, do you have a
      colleague who can provide e-filing consent on behalf of Plaintiff?

      Thank you.

      J a ke

      {. . . .1

      J a ke,

      ICON, ICONcepts and TGDC’s responses are currently due June 19. An
      additional month does not seem reasonable given the daily harm that is
      occurring. Please explain the thought process for such a long extension
      Bill

      [. . .

      Bill,

     As I mentioned we were retained yesterday and are asking for some
     professional courtesy so we have time to get up to speed on what is
     a complex multi-forum matter with significant history. We are
     unaware of any daily harm, or of any attempt by Plaintiff to seek
     emergency injunctive relief to address such harm.

     That said, we can meet you in the middle and file responses on June
     29. Is this acceptable?

     Thanks.

     Jake

      [. . .

                                           10
No. 78931-7-I/Il

       Jake and Will,

       We will agree to responses by ICON, lCONcepts, TGDC and Gerard
       on or before June 29 in exchange for Perkins Coie accepting service
       on behalf of Gerard of (1) the Second Amended Cross-Complaint in
       the San Francisco Superior Court matter, and (2) the Complaint in
       the trademark matter. Please confirm that Davis Wright will accept
       service on behalf of TGDC of the latest papers counsel in the
       dissolution action is trying to serve.

       I have attached the acceptance of service forms for items (1) and (2)
       above and will ask dissolution counsel to forward the same for the
       dissolution matter.

      Please forward the proposed stipulation and the executed
      acceptances of service.
      Thank you.

       Bill Frimel
       DWT did not represent in the e-mails or during the phone conference an

intent appear and defend in the Washington action.         The focus was on the

California actions. When the last e-mail asked if DWT would accept service of

papers in the Washington action, DWT did not respond. The acceptance of service

forms were not forwarded to them.

      Substantial evidence does not support the trial court’s finding that during

this exchange DWT had referenced the dissolution action pending in Washington.

TGDC did not informally appear in this action on June 8.

          2. Informal Appearance June 25

      TGDC made an informal appearance via the June 25 e-mail to Buich’s

Washington counsel. The e-mail was received after the default was taken, but

before the court accepted the second motion for default judgment for filing and

before the judgment was entered.        The June 25 e-mail acknowledges the

                                           11
No. 78931-7-1112

dissolution action and TGDC’s intent to litigate through the statement ‘please send

us proof of service, so that we can that we can get the case, including our deadline

to respond to the complaint, calendared appropriately.”           (Emphasis added.)

However, this appearance still would not entitle TGDC to notice of the motion for

entry of default judgment. CR 55(a)(3), which governs motions for entry of default,

contains a provision requiring notice if a party has appeared. CR 55(b), which

governs motions for entry of default judgment, does not contain a similar provision.

       Morin is instructive here on the notice requirements of default judgment

proceedings. 160 Wash. 2d at 748. In one of the consolidated cases, Gutz, the

defendant’s representatives made several contacts prior to the motion for default

judgment that the court determined were more appropriately analyzed for

inequitable conduct by plaintiff’s counsel.     See ki. at 751, 758 (remanded for

consideration of whether attorney’s conduct warranted relief under White v. HoIm,

73 Wash. 2d 348, 352, 438 P.2d 581 (1968), or CR 60(b)(1) or (4)).              After the

defendant’s motion to vacate the default order was denied, the plaintiff moved for

an entry of default judgment. j~ at 751-52. Notwithstanding the fact that the

defendant had appeared in court to contest the default, the plaintiff moved for an

entry of default judgment without notifying the defendant. j4~. at 752. The trial court

granted the motion for entry of default judgment without notice.             jç~   The

Washington Supreme Court declined to void that order for lack of notice, and

instead remanded for consideration on whether the default should be vacated

under CR 60(b)(1) and 60(b)(4). ki. at 758. Under Morin, the June 25 e-mail did

not entitle TGDC to notice of the motion for entry of default judgment.

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No. 78931-7-1/13

       The trial court erred in vacating the default and default judgment under CR

60(b)(5).

       B. CR 60(b)(4): Fraud, Misreiresentation or Misconduct

       The trial court also found that the default judgment could be vacated based

on 60(b)(4). CR 60(b)(4) allows the court to set aside an entry of default judgment

based on fraud, misrepresentation, or other misconduct of an adverse party. “[FJor

more than a century, it has been the policy of [the Washington Supreme Court] to

set aside default judgments liberally.” Morin, 160 Wash. 2d at 754.

       The trial court found that Buich’s attorneys “acted in a manner that misled

DWT into believing that TGDC had not been served,” and that Buich’s attorneys

would be forwarding forms to accept service.         This finding is supported by

substantial evidence.     TGDC’s attorneys claim Buich’s California attorneys

represented that Centioli was “avoiding service” without disclosing that Centioli had

been served in the dissolution action.      Buich’s California attorney, however,

claimed that he stated specifically that Centioli was avoiding service for the notice

of summary judgment, rather than service of process. Buich’s attorneys later on

June 8, asked DWT to confirm that they would accept service for “the latest papers

counsel in the dissolution action is trying to serve.” The trial court knew that DVVT

did not know prior to the phone conversation that Centioli had been served with a

summons and complaint in that action. Buich’s California counsel of course knew

service of process had been completed and knew that DVVT was confused about

whether service of process had been completed. Viewing the respective versions

counsel presented of the phone conversation and the subsequent e-mails, the trial

                                            13
No. 78931-7-1/14

court was entitled, as the finder of fact, to conclude that the DWT version of the

conversation was correct. Morse v. Antonellis, 144 Wash. 2d 572, 574, 70 P.3d 125

(2003) (Credibility determinations are soley for the trier of fact and cannot be

reviewed on appeal.). In that version, Buich’s statement that ‘Centioli was avoiding

service of process” was not qualified by clarification of what was to be served. This

omission reasonably led DWT to conclude Centioli was avoiding service of original

process to commence the Washington action. The finding that DWT had been

misled is supported by substantial evidence.

       For purposes of CR 60(b)(4), it is immaterial whether a misrepresentation

is innocent or willful. Peoples State Bank v. Hickey, 55 Wash. App. 367, 371, 777
P.2d 1056 (1989) (“It is immaterial whether the misrepresentation was innocent

and willful. The effect is the same whether the misrepresentation was innocent,

the result of carelessness, or deliberate.”). Here, there was misrepresentation by

omission of material fact which misled DWT into not appearing in the action.

       The trial court did not err in vacating the default judgment under CR

60(b)(4).

       C. CR 60(b)(1): Mistake or Excusable Neglect

       Four factors must be shown to vacate a default judgment under CR

60(b)(1): (1) Substantial evidence supports a prima facie defense; (2) failure to

respond was due to mistake, inadvertence, surprise, or excusable neglect; (3) the

defendant acted with due diligence after notice of the default judgment; and (4)the

plaintiff will not suffer substantial hardship if the default judgment is vacated. Little

v. King, 160 Wash. 2d. 696, 703-04, 161 P.3d. 345 (2007). Application of the four

                                               14
No. 78931-7-1/15

part test is not mechanical. VanderStoep v. Guthrie, 200 Wash. App. 507, 517, 402
P.3d 883 (2017), review denied, 189 Wash. 2d 1041, 409 P.3d (2018). The primary

concern is whether justice is being done. ~ This court must determine what is

“just and equitable” based on the specific facts of each case, not based on a fixed

rule.   ki. at 517-1 8.   We review the trial court’s decision to vacate a default

judgment for abuse of discretion. Trinity, 176 Wash. App. 195.

        TGDC has presented a prima facie defense to dissolution. In reviewing the

prima facie case, the court views the evidence and reasonable inferences in the

light most favorable to the defendant. VanderStoep, 200 Wash. App. at 519-20. The

defendant’s argument does not have to be particularly strong or conclusive. ki. at

520. Buich’s argument for dissolution is that it is no longer reasonably practicable

for TGDC to carry on its activities.1 Buich points out that TGDC is not actively

developing new restaurants, and that Buich himself will never consent to the

opening of another restaurant. TGDC’s defense is that the parties are not actively

developing restaurants because Buich and TGDC are engaged in litigation to

determine their rights under the operating agreement. It points out that TGDC

continues to operate the Tadich Grill website and facilitates the sale of Tadich Grill

        I Buich points out that RCW 25.15.274 does not define “reasonably
practicable,” and that there are no published Washington cases defining its
meaning. So, he cites various statutes and authorities from other jurisdictions in
support of his definition: that it is not “reasonably practicable” for limited liability
company to carry on its activities if (1) the member’s and/or managers are unable
to work together to achieve the company’s purpose and/or (2) where the entity is
financially unstable. Buich’s arguments are more appropriately addressed at trial
than at this preliminary stage. As noted above, the application of the test is not
mechanical, but rather is guided by principles of equity. VanderStoep, 200 Wn.
App at 517. Our primary inquiry is whether justice is being done. ki.

                                              15
No. 78931-7-1/16

gift cards. It also relies on TGDC’s valuable assets, including a right of first refusal

to purchase the Tadich Grill, a license agreement from Tadich Grill, and the

Washington, D.C. Tadich Grill project.

       Buich contends these claims are merely “conclusory,” and that TGDC hasn’t

provided enough detail for how it will continue to operate. The parties are currently

litigating the veracity of these claims in other forums.

       Questions of fact need to be resolved at a minimum under either parties’

arguments. At this early stage, equity is best served by allowing litigation of these

claims to continue on the merits. The evidence is sufficient to support finding

TGDC has met its burden of presenting a prima facie case.

       The trial court concluded that TGDC’s delay in responding was due to

excusable neglect. The neglect was precipitated by statements and conduct that

misled DWT into believing that Centioli had not been served in the action. And, as

evidenced by the June 25 e-mail, DV’JT was still under the impression that service

had not occurred in the Washington action. This evidence is sufficient to support

a conclusion of excusable neglect.

       DWT was in communication with Buich’s Washington attorney while Buich

sought entry of default judgment. DVVT immediately engaged in negotiations to

vacate the default upon learning of its entry. DWT filed a motion to vacate the

default judgment on July 18, just one week after Buich’s attorneys declined to

stipulate to vacate the default judgment. This evidence is also supported by the

fact that TGDC was diligent in seeking relief from default.

                                              16
No. 78931-7-1/17

       Last, Buich did not assert to the trial court that he would suffer undue

hardship if the default was vacated.

       The record contains sufficient evidence of the necessary factors to warrant

vacating the default judgment under CR 60(b)(1). The trial court did not abuse its

discretion by doing so.

       CR 55(c) allows the court to set aside a default “for good cause shown and

upon such terms as the court deems just.” CR 55(c)(1). The trial court had

properly vacated the default judgment. The underlying acts that misled DWT into

not appearing and defending that supported vacating the judgment also provide

an equitable basis for the trial court to vacate the order of default. The trial court

did not abuse its discretion by also vacating the order of default based on DWT’s

excusable neglect.

       We affirm the vacation of the default judgment and order of default.

 II.   Attorney Fees

       BuTch contends that the trial court erred in awarding attorney fees to TGDC.

Alternatively, he contends that that the award was not reasonable because both

the hours worked and the rates charged were unreasonable. Respondent argues

that the trial court’s award was equitable and reasonable, and that it is entitled to

further attorney fees on appeal. We affirm the trial court’s award of attorney fees

and award TGDC attorney fees for this appeal.

       A. Attorney Fees Below

       Vacation of default judgment is equitable in nature and the trial court has

discretion to do justice between the parties. Hous. Auth., 105 Wash. App. at 192.

                                             17
No. 78931-7-1118

This court should therefore review a trial courts decision to award attorney fees

for abuse of discretion. ki. (“The decision to impose terms as a condition on an

order setting aside a judgment lies within the discretion of the court.’ (quoting

Knapp, 32 Wash. App. at 756)). This court reviews whether the amount of attorney

fees is reasonable under an abuse of discretion standard. Taliesen, 135 Wash. App.

at 141.

          The trial court found multiple grounds upon which TGDC was entitled to

vacation of the default judgment. The court also found that Buich’s counsel failed

to inform the court of relevant communications between the parties. Based in part

on this behavior, TGDC sought CR 11 sanctions against Buich’s attorneys. The

trial court instead found that justice between the parties was best served by

awarding reasonable attorney fees to TGDC. Where the court has vacated a

default judgment, and in equity vacated a default order, it is not unreasonable to

award fees necessarily incurred in obtaining that order. The trial court did not

abuse its discretion in determining that an award of attorney fees was warranted.

      We also find that the trial court did not abuse its discretion in determining

the reasonableness of DVVT’s hours and rates.        Washington courts use the

lodestar method to compute attorney fees. Henninqsen v. Worldcom, Inc., 102

Wn. App 828, 847, 9 P.3d 948 (2000).         The lodestar is first determined by

multiplying the reasonable number of hours worked by the reasonable hourly rate.

ki. The lodestar is presumed to be the reasonable fee, but trial court then has

discretion to adjust the lodestar upward or downward in rare instances. ki. Courts

must take an active role in assessing the reasonableness of fee awards. Berryman

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v. Metcalf, 177 Wash. App. 644, 657, 312 P.3d 745 (2013). In this case, all the hours

awarded to DWT were spent negotiating to stipulate vacation and on subsequent

motions practice.     In determining the reasonableness of the reward, the court

considered the conduct of Buich’s attorneys and their refusal to stipulate to the

vacation. Such consideration was within the trial court’s discretion.

       Buich provided detailed objections to a number of DWT’s billing entries that

he considered duplicative.2     DWT responded to these concerns by voluntarily

reducing their request by $1 0,325.00. The court indicated it had found other hours

unreasonable, as evidenced by its edits to the proposed order, and further reduced

the amount it awarded by roughly another $9,000. The trial court therefore took

an active role in determining the reasonableness of DWT’s hours worked.

       The finding that the rates charged were reasonable was also within the trial

court’s discretion.   DWT billed its client for hours worked by attorneys in San

Francisco and Seattle at their standard rates.         Where attorneys have an

established rate for billing clients, that rate will likely be the reasonable rate.

Bowers v. Transamerica Title Ins. Co., 100 Wash. 2d 581, 597, 675 P.2d 193 (1983).

       2 Buich cites Berryman, 177 Wash. App. at 659, and Mayer v. City of Seattle,
 102 Wn. App 66, 82-83, 10 P.3d 408 (2000) to support the proposition that a trial
court’s failure to address each challenged time entry warrants reversal. Those
cases are inapposite because each case involved special circumstances that
warranted more thorough review. Mayer required the court to segregate fees
associated with multiple claims and consider the contingent nature of
representation. 102 Wn. App at 80-83. Berryman involved a fee that was grossly
disproportionate to the amount in controversy. Berryman, 177 Wn. App at 661.
These cases do not stand for the proposition that the trial court must prepare
detailed findings in response to every challenged time entry of the fee award.
Rather, the proper test is whether the trial court took an active role in assessing
the reasonableness of the fee award. kI. at 657.

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Buich argues that it was unreasonable for DWT to have California attorneys work

on a Washington motion. TGDC counters that it charged the standard rate for

each attorney who worked on the case. TGDC further argues that the work that

San Francisco attorneys performed was necessary because they were primarily

responsible for this multi-forum dispute, and were therefore most familiar with the

facts and procedural history of this case. Buich cites no authority to support the

proposition that an out-of-state attorney’s rate for work reasonably necessary in

connection with a Washington motion must be found unreasonable if greater than

local rates. “Where no authorities are cited in support of a proposition, the court is

not required to search out authorities, but may assume that counsel, after diligent

search, has found none.” DeHeer v. Seattle Post-Intelliqencer, 60 Wash. 2d 122,

126, 372 P.2d 193 (1962). The trial court did not abuse its discretion in allowing

these attorneys to charge their standard rates for their work.

       We affirm the trial court’s award of attorney fees was reasonable.

   B. Attorney Fees on Appeal

      TGDC argues that it should be entitled to attorney fees because it prevailed

below and on appeal, and because the appeal is so frivolous as to warrant

sanctions under RAP 18.9(a). ‘[W]here a prevailing party is entitled to attorney

fees below, they are entitled to attorney fees if they prevail on appeal.” Sharbono

v. Universal Underwriters Ins. Co., 139 Wash. App. 383, 423, 161 P.3d 406 (2007).

The appeal is not frivolous. The attorney fees awarded below were discretionary,

not an entitlement which carries over on appeal. Though we disagree with the trial

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court in some of its findings, we affirm its conclusions and order. Therefore, we

exercise our discretion to award TGDC attorney fees on appeal.

      We affirm.

WE CONCUR:

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