Court Opinion

ID: 2765055
Source: CourtListenerOpinion
Date Created: 2014-12-29 21:10:10.270462+00
Date Added: 2024-06-11T11:27:22.320539
License: Public Domain

v i,- k ::

      IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

MICHAEL KEITH and LOIS ANNE                No. 70656-0-
KEITH, husband and wife,
                                           DIVISION ONE
                           Plaintiffs,

            v.

PRESTIGE CUSTOM BUILDERS, INC.,

                           Defendant.

PRESTIGE CUSTOM BUILDERS, INC.,            UNPUBLISHED

                           Respondent,     FILED: December 29. 2014

            v.

CHET'S ROOFING AND
CONSTRUCTION, INC.,

                  Third Party Defendant,
         and
HUARD SEPTIC DESIGN
MONITORING, LLC,

                           Appellant,
            and
MIRSKY ELECTRIC, INC.; STUCCO
WORKS, LLC; and CHESTER
CHMIELINSKI and HELEN
CHMIELINSKI, individually and on
behalf of the marital community
comprised thereof, doing business as
CHET'S ROOFING AND
CONSTRUCTION,

                 Third Party Defendants.
No. 70656-0-1/2

        Cox, J. — At issue is whether Huard Septic Design and Monitoring LLC is

entitled to an award of reasonable attorney fees based on a contract with

Prestige Custom Builders Inc. Because there is no contract between them that

supports such an award, we affirm the trial court's denial of reasonable attorney

fees.

        In April 2006, Prestige and Huard entered into a Master Subcontractor

Agreement ("Master Agreement"), as "Contractor" and "Subcontractor,"

respectively.1 Huard signed this contract on April 12, 2006, and Prestige signed

it on April 17, 2006. Thus, the "date hereof under this contract is April 17, 2006.

        This five-page contract, drafted by Prestige, provided for the terms and

conditions that would apply to Huard "furnishing any materials and/or performing

any work on" construction projects that Prestige would undertake in the future. It

further provided that an individual construction project would be described in "a

separate addendum agreement called a Project Subcontract." And it specified

what constituted a "Project Subcontract."

        Another document in the record before us is dated April 10, 2006.2 It is

comprised of a letter from Huard to Prestige, together with a preprinted form

containing terms and conditions drafted by Huard. It has three pages. Lois Anne

Keith, one of the owners of the real property on which it appears Huard

performed work, signed the document as "Owner" on April 26, 2006. There are

no other signatures that appear near the signature of "Owner."

        1 Clerk's Papers at 34-38.

        2 Id. at 40-42.
No. 70656-0-1/3

       In 2012, Michael and Lois Anne Keith commenced this action, suing their

general contractor, Prestige, alleging substandard work and numerous defects in

the construction of their home. Subsequently, Prestige impleaded four

subcontractors, including Huard, claiming they were liable for the alleged defects.

       Huard did not move to compel arbitration, notwithstanding that Article XVI

of the Master Agreement provides for arbitration of disputes. Rather, it moved for

summary judgment, pursuant to CR 56. The trial court granted this motion and

dismissed with prejudice Prestige's claims against Huard.

       Huard then moved for an award of attorney fees incurred in defending

against Prestige's claims. The trial court denied this motion.

       Huard appeals.

                      CONTROLLING CONTRACT TERMS

       Huard first argues that it is entitled to attorney fees based on an attorney

fee provision in what it characterizes as the "Project Subcontract." In response,

Prestige contends that this provision in the Project Subcontract does not apply.

Thus, a threshold issue is whether the terms of the Master Agreement control

over the terms in the Project Subcontract. We hold that the terms and conditions

of the Master Agreement control, not those of any other document in this record.

       "The 'touchstone of contract interpretation is the parties' intent.'"3

"Washington courts follow the objective manifestation theory of contracts,

imputing an intention corresponding to the reasonable meaning of the words

       3 Realm. Inc. v. City of Olvmpia, 168 Wash. App. 1, 4-5, 277 P.3d 679
(quoting Durand v. HIMC Corp., 151 Wash. App. 818, 829, 214 P.3d 189 (2009)),
review denied, 175 Wash. 2d 1015 (2012).
No. 70656-0-1/4

used."4 "An interpretation which gives effect to all of the words in a contract

provision is favored over one which renders some of the language meaningless

or ineffective."5

       This court may affirm a trial court's decision on any basis supported by the

record.6

       Article I of the Master Agreement provides as follows:

       I. MASTER SUBCONTRACTOR AGREEMENT
       The parties hereto agree that from the date hereof until this Master
       Agreement is terminated that Prestige Custom Builders, Inc., the
       "Contractor", may contract with Huard Septic Design & Monitoring,
       the "Subcontractor", for the furnishings of materials and/or the
       performance of various work on projects being constructed by the
       Contractor. The parties further agree that this Master
       Agreement shall control their respective rights and privileges,
       which arise out of the Subcontractor furnishing any materials
       and/or performing any work on the Contractor's construction
       projects.

       It is the intent of the parties that these terms and conditions
       apply to any provision of services by the Subcontractor
       regardless of whether these terms and conditions are
       referenced in any purchase order, subsequent contract memo,
       etc. during the term of this contract.

        Entering into this Master Agreement shall not obligate either the
        Contractor or the Subcontractor to agree to any subsequent
        request for services or to any volume of business during the term of
        this Master Agreement. The intent is that if any services are
        procured and agreed by both parties during the term of this
        Agreement, the terms and conditions of this Master Agreement
        shall apply. If any terms and conditions on any preprinted written
        form from the Contractor conflicts with this Master Agreement, the

        4 \± at 5.

      5 Seattle-First Nat'l Bank v. Westlake Park Assocs.. 42 Wash. App. 269, 274,
711 P.2d361 (1985).

        6 LaMon v. Butler, 112Wn.2d 193, 200-01, 770 P.2d 1027(1989).
No. 70656-0-1/5

       terms of this Master Agreement apply and supercede any other
       terms to [the] contrary.

       Each individual project conducted with the Subcontractor will be
       described in a separate addendum agreement called a Project
       Subcontract. Your signed proposal or quote, including specific
       details on Project Scope of Work, Price, Schedule, and Payment
       Terms and exclusions, constitutes a Project Subcontract.^1

       The emphasized language in the first three paragraphs of the above

excerpt shows that the parties intended for the Master Agreement to control the

parties' "rights and privileges" that "arise[s] out of [Huard] furnishing any

materials and/or performing any work on" Prestige's construction projects.

Moreover, the terms and conditions of the Master Agreement apply to the

projects "regardless of whether these terms and conditions are referenced" in

subsequent documents. This provision is explicit that "if any services are

procured and agreed by both parties during the term of this Agreement, the

terms and conditions of this Master Agreement shall apply"8

       The objective manifestation of intent of this provision is clear—the terms

and conditions of the Master Agreement control for any projects for which Huard

provided materials and/or work, and there are no exceptions. Further, this is true

even "[i]f any terms and conditions on any preprinted form from [Prestige]

conflicts with this Master Agreement. . . ."9

       In short, the terms and conditions of the Master Agreement control, and

the terms and conditions of subsequent agreements between these parties do

       7 Clerk's Papers at 34 (emphasis added).

       8 jd. (emphasis added).

       9 Id.
No. 70656-0-1/6

not. Thus, to the extent that Huard relies on provisions of what it claims is the

"Project Subcontract" defined in the Master Agreement, those provisions are not

applicable.

       Notwithstanding the clear wording of the Master Agreement that we just

discussed, Huard argues that the terms and conditions of what it characterizes

as the "Project Subcontract" apply regarding the award of attorney fees.

Specifically, it contends that the paragraph titled "DISPUTES" in the preprinted

portion of the April 10, 2006 document that it drafted and sent to Prestige is

applicable. Huard is mistaken.

       First, we doubt that the April 10, 2006 document constitutes a "Project

Subcontract," as defined in the Master Agreement. The Master Agreement

specifies that such a subcontract is:

       Your signed proposal or quote, including specific details on
       Project Scope of Work, Price, Schedule, and Payment Terms and
       exclusions . . . .[10]

       The April 10, 2006 document that contains what appears to be Huard's bid

specifying details regarding work to be done at the Keiths' home is not signed by

Huard. Thus, it does not qualify as a Project Subcontract under the plain terms

of the Master Agreement between Prestige and Huard.

       We also note that the April 10, 2006 document that Huard drafted appears

to primarily define the terms and conditions between "Owner" and Huard over the

work to be done on the Keiths' property. For example, the word "Owner" appears

       10 id. (emphasis added).

                                             6
No. 70656-0-1/7

throughout the preprinted terms.11 But neither the word "Contractor" nor

"Prestige" appears in the DISPUTES paragraph on which Huard primarily rests

one of its arguments for fees.12 And there is a signature block for "Owner" at the

end of the preprinted portion of the document, but no signature block for Prestige

or "Contractor."13

       At oral argument, Huard noted that the signature of someone named Terry

appears on the face page of this document. But that does not change our view

of the document's effect. This signature appears to be next to initials showing

the correction of the design fee from $2,000 to $1,850.14 That does not convince

us that Terry, assuming he was the agent for Prestige, agreed to the terms and

conditions of the Disputes paragraph that appears much later in the document on

which Huard rests its argument.

       Even if Huard could persuasively argue why we should ignore its inability

to overcome these threshold obstacles, Huard's arguments based on this

document are wholly unpersuasive.

       Huard asserts that the Master Agreement incorporates what it

characterizes as the Project Subcontract. But there are no terms or conditions in

the Master Agreement, in our view, that support Huard's argument that these

terms and conditions of the April 10, 2006 document are incorporated into the

       11
            See id. at 41-42.

       12 Id, at 41.

       13 id at 42.

       14 id at 40.

                                            7
No. 70656-0-1/8

Master Agreement. Thus, Huard's arguments based on incorporation are

unpersuasive. Further, the terms of the Master Agreement characterize a project

subcontract as an addendum agreement to the Master Agreement. This does

not advance Huard's argument. Even if the April 10, 2006 document is an

addendum to the Master Agreement, the plain language of the Master

Agreement states that the controlling terms are those contained in the Master

Agreement. The terms in the April 10, 2006 document simply do not control.

      Huard argues that Article I of the Master Agreement does not address the

relationship between the Master Agreement and other documents. Huard

contends that Article I only controls conflicts between terms in the Master

Agreement and terms in Prestige's own preprinted forms. Huard is incorrect.

       Huard relies solely on the following emphasized language from Article I:

       Entering into this Master Agreement shall not obligate either the
       Contractor or the Subcontractor to agree to any subsequent
      request for services or to any volume of business during the term of
      this Master Agreement. The intent is that if any services are
      procured and agreed by both parties during the term of this
      Agreement, the terms and conditions of this Master Agreement
      shall apply. If any terms and conditions on any preprinted
      written form from [Prestige] conflicts with this Master
      Agreement, the terms of this Master Agreement apply and
       supercede any other terms to [the] contrary.J151

       While Huard is correct that this emphasized language addresses conflicts

between the Master Agreement and terms on any preprinted written form from

Prestige, Huard's reading of Article I is too narrow. Looking to Article I as a

whole, it is clear that it addresses the relationship between the Master

Agreement and other documents. Specifically, the parties intended for the terms

       15 id. at 34 (emphasis added).

                                             8
No. 70656-0-1/9

of the Master Agreement to control, regardless of the existence of terms in other

documents. This is especially apparent from the sentence that immediately

precedes the one emphasized by Huard. That sentence states, "The intent is

that if any services are procured and agreed by both parties during the term of

this Agreement, the terms and conditions of this Master Agreement shall

apply."™ This sentence is broad and contains no limitations or conditions on

when the terms of the Master Agreement apply. The sentence identified by

Huard merely provides a clarifying point—that the terms of the Master Agreement

apply even if the terms and conditions on a preprinted written form from Prestige

conflicts with the terms of the Master Agreement. Huard's argument is not

persuasive.

       Next, Huard argues that there is no conflict between the Master

Agreement and what it characterizes as the Project Subcontract. In response,

Prestige argues that the trial court properly found that provisions in these

contracts conflict and that the Master Agreement controls. But, neither party

explains why the issue of whether the provisions conflict is material. As just

discussed, Article I indicates that the terms of the Master Agreement apply

without limitation or condition. Huard does not identify any conditional language

in the Master Agreement that requires there to be a conflict in order for the terms

of the Master Agreement to control. Thus, this argument does not change our

conclusion.

       16
            Id. (emphasis added).
No. 70656-0-1/10

                    AWARD OF ATTORNEY FEES AT TRIAL

       We next consider whether reasonable attorney fees are awardable under

any of the terms and conditions of the Master Agreement. We conclude, as the

trial court concluded, that this agreement does not support such an award.

       "Washington follows the American rule 'that attorney fees are not

recoverable by the prevailing party as costs of litigation unless the recovery of

such fees is permitted by contract, statute, or some recognized ground in

equity.'"17 "In general, a prevailing party is one who receives an affirmative

judgment in his or her favor."18

       "Whether a contract or statute authorizes an award of attorney fees is a

question of law reviewed de novo."19

                          Disputes &Arbitration Provision

       Huard argues that it is entitled to attorney fees under Article XVI of the

Master Agreement, the "Disputes & Arbitration" provision. The trial court rejected

this argument. So do we.

       In its order denying fees, the trial court concluded that Huard took no

action to compel arbitration. It also concluded that the Master Agreement

       17 Panorama Vill. Condo. Owners Ass'n Bd. of Dirs. v. Allstate Ins. Co.,
144 Wash. 2d 130, 143, 26 P.3d 910 (2001) (quoting McGreevv v. Or. Mut. Ins. Co.,
128 Wash. 2d 26, 35 n.8, 904 P.2d 731 (1995)).

       18 Riss v. Angel, 131 Wash. 2d 612, 633, 934 P.2d 669 (1997).

       19 McGuire v. Bates, 169 Wash. 2d 185, 189, 234 P.3d 205 (2010).

                                             10
No. 70656-0-1/11

"unambiguously allowed attorney's fees only for the prevailing party in an

arbitration proceeding."20 Accordingly, it denied Huard's motion.

         A plain reading of the Disputes & Arbitration provision supports the trial

court's conclusion. This provision states:

         XVI. Disputes & Arbitration
         If any dispute arises between the parties, the parties will make a
         good faith effort to first resolve without resort to litigation. If a
         dispute cannot be resolved between the parties, then either party
         may file suit in a court of competent jurisdiction. If suit is filed, the
         dispute will be decided according to the Mandatory Arbitration
         Rules regardless of the amount in dispute. Each party expressly
         waives the dollar limits currently in effect and the arbitrator may
         issue an award in any dollar amount. The arbitrator shall have the
         authority to determine the amount, validity and enforceability of a
         lien. The parties agree to accept the arbitrator's award as final and
         binding. The parties each waive their right to file any appeal for trial
         de novo in Superior Court. In any such arbitration proceeding,
         the prevailing party shall in all cases be awarded his or her
         reasonable attorney's fees regardless of whether the dispute
         is resolved through settlement or arbitration.[21]

         This emphasized language expressly indicates that attorney fees are

available for the prevailing party in an arbitration proceeding. Nothing in this

provision indicates that attorney fees are available for the prevailing party in any

other type of proceeding. As the trial court properly concluded, the Master

Agreement is silent as to whether a party who prevails at trial is entitled to an

award of attorney fees. Accordingly, because this case did not involve an

arbitration proceeding, this provision does not provide a basis for a fee award to

Huard.

         20 Clerk's Papers at 199.

         21 id. at 37 (emphasis added).

                                                11
No. 70656-0-1/12

       Huard makes several arguments that it is entitled to fees under this

provision. None are persuasive.

       First, Huard argues that an "arbitration proceeding" is "contractually

defined as including a suit filed in a court of competent jurisdiction and

determined according to the Mandatory Rules of Arbitration."22 Thus, it argues

that because Prestige's claim "was properly decided by a superior court judge

according to Rule 1.3 of the Mandatory Arbitration Rules," Huard was entitled to

an award of fees under this provision.23 This argument is unconvincing.

       This provision does not contractually define "arbitration proceeding" in the

manner suggested by Huard. And when this provision is reasonably read as a

whole, it is clear that the parties intended for an "arbitration proceeding" to

involve an arbitrator. Notably, the provision consistently refers to the "arbitrator"

when it discusses the parties' contractual modifications of the Mandatory

Arbitration Rules. Nothing about this provision suggests that an "arbitration

proceeding" is defined merely as filing suit in a court of competent jurisdiction

that includes mandatory arbitration proceedings as an option to resolve disputes.

       Moreover, it is without serious dispute that this case was never "decided

according to the Mandatory Arbitration Rules." Huard failed to move to compel

arbitration. Rather, it moved for summary judgment pursuant to CR 56. This

case, as this record amply demonstrates, was decided under Rule 56 of the Civil

Rules for Superior Court, not the Mandatory Arbitration Rules.

       22 Brief of Appellant at 28.

       23 id at 30.

                                              12
No. 70656-0-1/13

       Huard relies on MAR 1.3 to support its argument. That rule provides that

a case filed in the superior court remains under the jurisdiction of the superior

court in all stages of the proceeding, including arbitration.24 It also states that

until a case is assigned to an arbitrator, the rules of civil procedure apply, and

after a case is assigned to the arbitrator, the MAR apply, except where stated

otherwise.25 But the jurisdiction of the superior court is irrelevant to the question

before us. And this rule does not establish that this case was decided according

to the Superior Court Mandatory Arbitration Rules. Arguments to the contrary

are simply unpersuasive.

       Second, Huard points out that the provision recognizes a right to fees

when "the dispute is resolved through either 'settlement or arbitration.'"26 Huard

argues, "If a party can be entitled to fees if it prevails through settlement, then

obviously prevailing through arbitration is not the only vehicle."27 This argument

fails to overcome the obvious difficulty. There was no arbitration, and one must

at least be commenced before fees are potentially awardable.

       Third, Huard argues that the phrase "in all cases" in the last sentence of

this provision supportsthe conclusion that it is entitled to fees.28 That sentence
states, "In any such arbitration proceeding, the prevailing party shall in all cases

       24 MAR 1.3(a).

       25 MAR 1.3(b)(1).

       26 Reply Brief of Appellant at 22 (quoting Clerk's Papers at 37).

       27 id

       28 Brief of Appellant at 32.

                                              13
No. 70656-0-1/14

be awarded his or her reasonable attorney's fees regardless of whether the

dispute is resolved through settlement or arbitration."29 Huard latches on to this

emphasized language to argue that fees are awardable in any "case" arising out

of a dispute about the contract. But this argument completely ignores the

opening clause of this sentence, "In any such arbitration proceeding . . . "30

Such a reading would render the opening clause meaningless, and thus, we

reject this argument.

       Fourth, Huard argues that Prestige's construction of this provision "leads

to absurd consequences."31 It contends that if Prestige "can always take a shot

at winning" because if Prestige prevails, it would be entitled to fees under the

indemnification provision, but if its claim is so weak that it does not survive

summary judgment, then the subcontractor will never be entitled to fees.32 But,

as the trial court concluded, Huard could have moved to compel arbitration. It

chose not to do so. And as Prestige notes, refraining from arbitration can be a

rational choice, as it provides certain advantages. Thus, it is not the construction

of this provision that leads to these consequences, but rather, it is a party's

strategic decision that can lead to such consequences.

       Finally, Huard argues that, at the very least, this provision is ambiguous

and, consequently, it must be interpreted in Huard's favor since it was drafted by

       29 Clerk's Papers at 37 (emphasis added).

       30 ]d (emphasis added).

       31 Brief of Appellant at 32.

       32 id at 33.

                                             14
No. 70656-0-1/15

Prestige. But, as already discussed, the language of this provision is plain and

unambiguous. Thus, this argument is also unpersuasive.

                              Indemnification Provision

       Huard argues that it is entitled to fees under Article XIX of the Master

Agreement, the "Indemnification" provision. Specifically, Huard argues that

under RCW 4.84.330, this provision is bilateral. Because Huard failed to properly

preserve this argument below, we decline to consider it.

       Under RAP 2.5(a), the appellate court may refuse to review any claim of

error that was not raised in the trial court. Generally, it does not review "an issue,

theory, argument, or claim oferror not presented at the trial court level."33
       In its motion for award of attorney fees, Huard cited generally to the

Master Agreement and the Project Subcontract.34 But the only specific provision

that Huard cited within these agreements was Article XVI of the Master

Agreement, the Disputes &Arbitration provision. Huard did not cite Article XIX,
the Indemnification provision. Specifically, Huard argued in its motion:

              Prestige's Master [Agreement] states that the prevailing
       party to any dispute shall be awarded its attorneys' fees. See Ex. 1
       to Huard Decl. at sec. XVI ["Disputes &Arbitration" provision]. The
       Master [Agreement] explicitly incorporates the terms of the Project
       Subcontract. Id. at sec. I. Similarly, the Project Subcontract states
       that the prevailing party to any dispute shall be awarded its
       attorneys' fees and costs. Ex. 2 to Huard Decl. Under RCW
       4.84.330, such contractual attorneys' fee clauses are
       enforceable.1351

       33 Lindbladv. Boeing Co., 108 Wash. App. 198, 207, 31 P.3d 1 (2001).

       34 See Clerk's Papers at 61-66.

       35 id at 63 (emphasis added).

                                              15
No. 70656-0-1/16

       In Huard's reply in support of its motion, it again focused on the Project

Subcontract and on the language of Article XVI, the Disputes & Arbitration

provision of the Master Agreement.36 The only citation to Article XIX, the

Indemnification provision, was in a footnote of this reply, which stated:

              Section XIV of the Master [Agreement] regarding Default by
       Huard, Section XV regarding Huard's Insurance obligations, and
       Section XIX regarding Huard's Indemnity obligations, all grant
       Prestige one-way attorney fee recovery rights. This underscores
       Prestige's intent that attorneys' fees be recoverable in any
       dispute.1371

       But this citation in the footnote does not properly preserve Huard's

argument. First, this citation, in the reply brief, was too late to raise properly the

argument before the trial court. Second, Huard did not make any argument. It

neither provided the language of this provision, nor did it argue why this provision

entitled Huard to fees. Third, Huard did not cite to this provision in the footnote to

make an independent argument that it was entitled to fees under this section.

Rather, it cited to this provision to support its argument that these provisions

"underscore[] Prestige's intent that attorneys' fees be recoverable in any

dispute."38

       Huard argues that "RCW 4.84.330 was clearly raised below by Huard."39
It points out that it cited to this statute in its motion for an award of fees and in its

reply. But while Huard cited to this statute, it never did so in the context ofthe

       36 id at 160-65.

       37 id at 162 (first emphasis added).

       38 id (emphasis omitted).

       39 Reply Brief of Appellant at 1.

                                               16
No. 70656-0-1/17

Indemnification Provision. Additionally, it never cited this statute for the

proposition it now asserts, that "RCW 4.84.330 transforms Prestige's unilateral

fee provision into a bilateral provision."40 Rather, it cited to this statute in its

original motion to support the proposition that "[u]nder RCW 4.84.330, such

contractual attorneys' fee clauses are enforceable," and in its reply to support the

proposition that "attorney fee rights in a contract cannot be waived."41

       For these reasons, we decline to consider this argument any further.

                   AWARD OF ATTORNEY FEES ON APPEAL

       Huard finally argues that it is entitled to an award of attorney fees for this

appeal, citing the principle that "'[a] contract providing for an award of attorney

fees at trial also supports such an award on appeal.'"42 Because the Master

Agreement does not provide a basis for an award of attorney fees at trial in this

case, we deny Huard's request for fees on appeal.

       We affirm the decision of the trial court denying reasonable attorney fees

and deny Huard's request for reasonable attorney fees on appeal.

                                                               OdX^J.
WE CONCUR:

  IfStAe^ x^r
                                                     %Q„Llrd$. Y
       40id

       41 Clerk's Papers at 63, 161.

       42 Brief of Appellant at 35 (quoting Hall v. Feigenbaum, 178 Wash. App. 811,
827. 319 P.3d 61. review denied, 180Wn.2d 1018(2014)).

                                                17