Court Opinion

ID: 4170823
Source: CourtListenerOpinion
Date Created: 2017-05-22 19:22:34.575025+00
Date Added: 2024-06-11T14:24:07.089990
License: Public Domain

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
  IAN AND KERI SCHUMACHER,                   )
                                             )        No. 76022-0-I
                        Respondents,         )
                                             )       DIVISION ONE
                v.                           )
                                             )        UNPUBLISHED OPINION
  T. GARRETT CONSTRUCTION,                   )
  INC., a Washington corporation,            )
                                             )
                        Appellant,           )
                                             )
                and                          )
                                             )
  TODD G. and JESSICA YOST,                  )
  husband and wife, and the marital          )
  community composed thereof,                )
                                             )
                        Defendants.          )       FILED: May 22, 2017

         TRICKEY, A.C.J. — T. Garrett Construction, Inc. (TGC) appeals the trial
  court's damages award to Ian and Keni Schumacher. TGC argues that the

  construction defects at issue and its failure to construct a cedar fence did not

  breach the agreement between the parties or any implied warranties. TGC

  requests that, if it prevails on appeal,this court award it the attorney fees it incurred

  below. The agreement's terms did not contain any express warranty against

  construction defects and did not require TGC to construct a cedar fence. The

  construction defects were not serious enough to violate the implied warranty of

, habitability. Therefore, we reverse and remand for an award of attorney fees below

  to TGC.
No. 76022-0-1 / 2

                                      FACTS

       TGC is a construction contractor in the business of remodeling homes and

speculative building.   In 2013, TGC began construction of a new house in

Edgewood, Washington.

       While the home was under construction, TGC listed it for sale through its

real estate agent, Laura Petkov. Petkov prepared a real estate sales flyer and

placed a listing on the local Multiple Listing Service (MLS). The MLS listing

contained information about the home, including mentioning a cedar fence.

       In October 2013, the Schumachers toured the home with their real estate

agent, Doug Walker. The home had been framed, the roof and windows had been

installed, and a partial cedar fence separated the back yard from the neighboring

property.

       On October 20, the Schumachers submitted a signed real estate purchase

and sale agreement(REPSA)to TGC offering to purchase the home for $496,900.

The REPSA listed an earnest money amount of $2,500, incorporated by reference

a building specification sheet detailing the components of the property, and

contained an integration clause, an attorney fee clause, and an inspection

addendum. It also included a counteroffer addendum, which added several terms

to the REPSA and included a copy of the sales flyer to illustrate where the additions

would be located.

       The inspection addendum provided in part that the REPSA was conditional

on the Schumachers' subjective satisfaction with the property after inspecting it. If

the Schumachers were not satisfied with the property for any reason, they could

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No. 76022-0-1/ 3

give TGC notice and terminate the REPSA. The Schumachers would waive their

right to terminate the REPSA if they failed to give timely notice or failed to act

during the reply period. The inspection addendum's reply period was set at 10

days after mutual acceptance of the REPSA. If the Schumachers waived their

rights under the inspection addendum,TGC was not obligated to make any repairs

or modifications. The REPSA did not incorporate the sales flyer or MLS listing.

       On October 21, Petkov sent Walker an e-mail with an updated builder

specification sheet, which was the final version exchanged by the parties.

       TGC signed the REPSA on October 22, and TGC and the Schumachers

initialed each page of the specification sheet on October 23.1

       TGC continued construction of the home, including building a prestained,

non-cedar wood fence along the front and side of the home.

       Between October 22, 2013 and closing on January 31, 2014, TGC and the

Schumachers communicated regularly and met at the home several times to

discuss the Schumachers' selections of finishes and other items in the home. A

formal walk-though took place on January 22, 2014. Neither party made notes

during the walk-through. The Schumachers made certain requests to TGC during

and immediately after the walk-through, which TGC responded to and satisfied.

       The Schumachers did not request to cancel the sale or have their earnest

money returned to them, and did not hire a third, party to inspect the home or the

surrounding land. The home passed all inspections by the building authorities,

and the building department issued it a certificate of occupancy.

1 The parties also signed a limited builder's warranty, but later stipulated that it was
unenforceable and inapplicable to the present case.
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No. 76022-0-1 /4

       After closing, the Schumachers complained to TGC about a number of

problems, including issues with the kitchen cabinets and trim, and the exterior

stone veneer of the garage. TGC had improperly installed the stone on the exterior

garage. The Schumachers obtained a bid from Reliable Masonry Service to

remove and replace the exterior garage wall stone for $5,500 plus sales tax.

       A year after closing, TGC notified the Schumachers in writing that either it

or its subcontractors would repair some of the alleged defects at no cost. This

included repairing the kitchen cabinetry and trim problems and entirely removing

and replacing the stone on the exterior garage wall. The Schumachers rejected

TGC's offer.

       The defects were aesthetic in nature and did not present a significant safety

risk to the Schumachers. The Schumachers did not move out of the home.

       In February 2015,the Schumachers filed a complaint against TGC,alleging

breach of contract, breach of the implied warranties of habitability and fitness for a

particular purpose, breach of limited warranty, and violations of the Consumer

Protection Act, chapter 19.86 RCW. The trial court awarded the Schumachers

damages for their breach of contract claim in the amount of $9,772.50. The trial

court based its damages award on the defective stone on the garage exterior

($5,500 plus $522.50 in sales tax), defective cabinets and trim in the kitchen

($350), and TGC's failure to build a cedar fence ($3,400). The trial court dismissed

the Schumachers' other claims. The trial court found that the Schumachers were

the substantially prevailing party and awarded attorney fees and costs totaling

$13,021.31.

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No. 76022-0-1/ 5

       TGC appeals.

                                      ANALYSIS

                             TGC Assignments of Error

       The Schumachers argue that TGC improperly assigns error in its opening

brief by failing to include a specific assignment of error to the trial court's judgment.

The Schumachers claim that this precludes this court from considering any claim

of error in the trial court's judgment. We disagree.

       An appellant's brief should include a separate concise statement of each

error it contends was made by the trial court, together with issues pertaining to

those assignments of error and argument in support. RAP 10.3(a)(4), (6).              A
party's failure to assign error or to provide argument and citation to authority in

support of an assignment of error precludes appellate consideration of an alleged

error. Escude ex rel. Escude v. King County Pub. Hosp. Dist. No. 2, 117 Wn. App.

183, 190 n.4,69 P.3d 895(2003). But this court will not determine cases or issues

on the basis of compliance or noncompliance of the Rules of Appellate Procedure

except in compelling circumstances where justice demands. RAP 1.2(a); State v.

Olson, 126 Wn.2d 315, 318-19, 323, 893 P.2d 629(1995).

       Here, TGC's assignments of error were not defective. TGC's notice of

appeal designated the trial court's judgment. TGC's opening brief assigned error

to the three conclusions of law reached by the trial court that form the basis for its

final judgment. TGC's assignments of error are sufficient to satisfy RAP 10.3(a).

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No. 76022-0-1/6

                  Stone Garage Exterior and Kitchen Cabinetry

       TGC argues that the trial court erred in awarding the Schumachers

damages for its improper installation of the stone garage exterior and kitchen

cabinetry. TGC primarily argues that the implied warranty of habitability was the

only basis on which the Schumachers could have recovered, and that warranty

was not breached. It also argues that the trial court applied the wrong legal

standard to arrive at its damages award. We agree with TGC.

       The Schumachers raise several grounds in support of the award: the

counteroffer addendum to the REPSA; policy considerations placing liability on the

builder-vendor; they did not have to request the particular relief awarded by the

trial court; and that TGC erroneously argues that the implied warranty was the sole

remedy available to the Schumachers.          The Schumachers' arguments are

unavailing because they are not supported by the record.

       A breach of contract occurs when a party to an agreement fails to comply

with a specific term. See G.W. Constr. Corp. v. Professional Serv. Indus., Inc., 70

Wn. App. 360, 364, 853 P.2d 484 (1993). An injured party suing for breach of

contract may seek either damages resulting from the breach or performance under

available warranties. See Panorama Village Homeowners Ass'n v. Golden Rule

Roofing, Inc., 102 Wn. App. 422,430, 10 P.3d 417(2000).

       The only duty a builder-vendor of a newly completed residence owes to its

first purchaser, beyond complying with the express terms of the contract of sale, is

the implied warranty of habitability. Stuart v. Co!dwell Banker Comm. Grp., Inc.,

109 Wn.2d 406, 416-17, 745 P.2d 1284 (1987). Washington does not recognize

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No. 76022-0-1/ 7

an implied warranty of workmanlike performance in contracts for construction of a

dwelling. See Urban Dev. Inc. v. Evergreen Bldg. Prods., LLC, 114 Wn. App. 639,

646, 59 P.3d 112 (2002). The implied warranty of fitness for a particular purpose

does not apply to transactions involving real property. Condon Bros., Inc. v.

Simpson Timber Co.,92 Wn.App. 275, 280-81, 966 P.2d 355(1998). Washington

does not recognize a cause of action for negligent construction on behalf of

individual homeowners. Stuart, 109 Wn.2d at 417.

       In Washington,the implied warranty of habitability has replaced the doctrine

of caveat emptor in the context of the sale of new residential dwellings by builder-

vendors. Atherton Condo. Apartment-Owners Ass'n Bd. of Directors v. Blume Dev.

Co., 115 Wn.2d 506, 518, 799 P.2d 250 (1990) (citing House v. Thornton, 76

Wn.2d 428, 457 P.2d 199 (1969)). This implied warranty requires that "the

foundations supporting [the new house] are firm and secure and that the house is

structurally safe for the buyer's intended purpose of living in it." House, 76 Wn.2d

at 436. This implied warranty of habitability arises by implication from the sales

transaction itself and, therefore, is independent of the terms of the sales contract.

Stuart, 109 Wn.2d at 417.

       The implied warranty applies to defects that may severely restrict the

habitability of the dwelling, amount to serious structural deficiencies, or present a

substantial risk of future danger. Westlake View Condo. Ass'n v. Sixth Ave. View

Partners, LLC, 146 Wn. App.760,771-72, 193 P.3d 161 (2008); see also Atherton,

115 Wn.2d at 520. The implied warranty does not apply to mere defects in

workmanship, and does not require a builder-vendor to construct a perfect

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No. 76022-0-1 / 8

residential dwelling. Atherton, 115 Wn.2d at 520, 522 (citing Stuart, 109 Wn.2d at

417).

        TGC does not challenge any of the trial court's findings of fact on appeal,

therefore, they are verities on appeal. Tapper V. Emp't Sec. Dep't, 122 Wn.2d 397,

407, 858 P.2d 494 (1993). An appellate court's review is limited to determining

whether those facts support the trial court's conclusions of law and judgment.

Lakeside Pump & Equip., Inc. v. Austin Constr. Co., 89 Wn.2d 839, 842, 576 P.2d

392 (1978). Contract interpretation is a question of law reviewed de novo when

the interpretation does not depend on the use of extrinsic evidence. Wash. State

Major League Baseball Stadium Pub. Facilities Dist. v. Huber, Hunt & Nichols-

Kiewit Constr. Co., 176 Wn.2d 502, 517, 296 P.3d 821 (2013).

        In their complaint, the Schumachers claimed that TGC breached the

REPSA by failing to provide all of the items identified in the agreement and building

specification sheet, as well as some of the items paid for as upgrades. At trial,

TGC argued that the Schumachers' breach of contract claim, as related to the

stone garage exterior and kitchen cabinetry defects, had been waived under the

inspection addendum in the REPSA.

        The trial court ruled that the inspection addendum's waiver of rights was

enforceable and precluded a number of the Schumachers' claims. The trial court

found that there were several aesthetic defects in and around the home, but none

presented a significant safety risk to the occupants of the home. The trial court

nonetheless awarded damages to the Schumachers for the improper installation
No. 76022-0-1 /9

of the stone garage exterior and kitchen cabinetry.2 In its judgment, the trial court

stated that these damages were awarded for breach of contract. The trial court

appeared to base its decision on whether the defects were observable during the

inspection.

       The trial court erred in awarding damages to the Schumachers for the

improper installation of the stone garage exterior and kitchen cabinetry. First, the

improper installation of the garage stone and kitchen cabinetry did not breach the

terms of the REPSA. The REPSA did not represent that the challenged items

would be properly installed. The parties did not negotiate any warranty that TGC's

construction work would be performed in a workmanlike manner or to any other

standard. The terms of the REPSA did not provide a basis on which the

Schumachers could maintain a breach of contract claim based on the improper

installation of the stone garage exterior and kitchen cabinetry.

       Second, the inspection addendum bars the Schumachers' recovery of

damages for the improper installation of the stone garage exterior and kitchen

cabinetry. The trial court ruled that the inspection addendum was valid and barred

a number of the Schumachers' claims. The parties do not challenge the validity of

the inspection addendum on appeal.

       As discussed above, the Schumachers inspected the home and made

certain requests to TGC, which it responded to and satisfied. No further action

was taken during the inspection period. Under the inspection addendum, the

2 In its conclusions of law, the trial court also held that the Schumachers were not entitled
to any damages for construction defects or improperly performed work. The trial court
similarly held that the inspection addendum barred the Schumachers from recovering
damages for a number of other claims.
                                             9
No. 76022-0-1/10

Schumachers thus signaled their subjective satisfaction with the home and waived

their right to demand that TGC make additional repairs or modifications.

       Whether the defects were readily observable during the inspection is

irrelevant under the REPSA and the inspection addendum. Under the inspection

addendum, the Schumachers had the opportunity to retain their own inspectors

and to negotiate an extension of the inspection period. The fact that they did

neither does not make TGC contractually liable to them for the improper installation

of the stone garage exterior or kitchen cabinetry. Therefore, the Schumachers

were not entitled to damages for the improperly installed stone garage exterior or

kitchen cabinetry under the REPSA.

      Third, the implied warranty of habitability does not provide a basis for

awarding damages to the Schumachers. The trial court found that the defects in

and around the home did not present a significant safety risk to the occupants of

the home, and did not breach the implied warranty of habitability. Therefore, the

implied warranty of habitability does not provide an alternate basis to justify the

damages awarded to the Schumachers for the improper installation of the stone

garage exterior or kitchen cabinetry.

       In sum,TGC did not breach the terms of the REPSA,there was no express

warranty between the parties, and the challenged defects did not rise to the level

of breaching the implied warranty of habitability. The trial court erred in awarding

damages to the Schumachers for TGC's improper installation of the stone garage

exterior and kitchen cabinetry.

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No. 76022-0-1 / 11

       The Schumachers claim that the trial court's damages award is supported

by the counteroffer addendum attached to the REPSA. The Schumachers contend

that the counteroffer addendum shows that the parties agreed to install stone

masonry to the front wall of the home. The counteroffer addendum does not add

terms to the REPSA beyond the addition of masonry to the areas indicated in

exhibit B of the counteroffer addendum, and does not provide an express warranty

regarding the quality of workmanship. For the same reasons discussed above, the

counteroffer addendum does not provide a contractual basis for the Schumachers'

recovery of damages.

       The Schumachers rely on Atherton to argue that it was proper for the trial

court to consider whether the defects were observable during the walk-through in

light of public policy considerations. 115 Wn.2d 506. Under Atherton, purchasers

have a right to expect to receive what they bargained for and are protected from

latent defects. 115 Wn.2d at 521-22. Liability for defects is properly fixed on the

builder-vendor rather than the purchaser due to the builder-vendor's superior

knowledge and ability to avoid. Atherton, 115 Wn.2d at 521-22. But Atherton

announced these policy considerations in the context of the implied warranty of

habitability. The trial court held that TGC did not breach the implied warranty of

habitability. The defects at issue here are aesthetic and, therefore, the policy

considerations underlying Atherton's analysis of the implied warranty of habitability

carry less weight.

       The Schumachers contend that the trial court's damages award for the

stone garage exterior and kitchen cabinetry was proper even though they did not

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 No. 76022-0-1 / 12

request that particular relief. It is true that final judgments must grant the relief a

 party is entitled to, even if that party has not requested that particular relief in its

 pleading. CR 54(c). But CR 54(c) is inapplicable to the present case because

• TGC is not objecting to the award on that basis. TGC argues that there was not a

valid legal basis to sustain the trial court's damages award to the Schumachers,

 not that the trial court erred by awarding relief the Schumachers did not seek. As

discussed above, neither the REPSA nor the implied warranty of habitability

 provide a basis. Whether the Schumachers requested the particular relief granted

by the trial court is irrelevant.

        The Schumachers argue that TGC erroneously claims that the implied

warrant of habitability is the exclusive remedy available to purchasers of new

residential property from a builder-vendor. The Schumachers claim that TGC

offered no evidence that the parties intended to limit the remedies available to

them. Parties may contract for an exclusive remedy via express agreement, but

the agreement must clearly indicate that the parties intended to limit the available

remedies. Graoch Assocs. No. 5 Ltd. P'ship v. Titan Const. Corp., 126 Wn. App.

856, 865, 109 P.3d 830 (2005). The Schumachers mischaracterize TGC's

 position. TGC argues that the implied warranty of habitability is the only implied

warranty that applies to the present case and that the terms of the REPSA do not

 provide express warranties. TGC is correct. The REPSA did not limit the remedies

available to the parties. The Schumachers were able to sue for a breach of the

 REPSA or any other ground available to them under Washington law. The

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No. 76022-0-1 /13

Schumachers have not shown that they were impermissibly barred from seeking

remedies by the REPSA or otherwise.

                                  Cedar Fence

      TGC argues that the trial court erred in awarding damages to the

Schumachers for their breach of contract claim based on TGC's alleged failure to

build a cedar fence. TGC contends that the REPSA did not require it to build a

cedar fence for the Schumachers, and in the alternative that the inspection

addendum in the REPSA precluded the Schumachers' claim. We agree.

       Contractual Obligation

      TGC first argues that it was not contractually obligated to build a cedar

fence. Specifically, it argues that the REPSA does not contain any reference to a

cedar fence, including in the specification sheet. The Schumachers claim that

TGC was obligated to construct a cedar fence because the sales flyer, attached to

the counteroffer addendum as exhibit B, mentions one. Because the REPSA did

not require TGC to construct a cedarfence and the sales flyer was not incorporated

in its entirety, we agree with TGC.

      "Absent fraud, deceit or coercion, a voluntary signator is bound to a signed

contract." Sherman v. Lunsford, 44 Wn. App. 858, 861, 723 P.2d 1176 (1986).

Parties are bound by the contract as-signed. Wells Trust by Horning v. Grant Cent.

Sauna and Hot Tub Co. of Seattle, 62 Wn. App. 593, 602, 815 P.2d 284 (1991).

      The presence of an integration clause "strongly supports a conclusion that

the parties' agreement was fully integrated." Olsen Media v. Enemy Sciences,

Inc., 32 Wn. App. 579, 584, 648 P.2d 493 (1982). If the contract is integrated,

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No. 76022-0-1 /14

other documents are inadmissible as parol evidence. Olsen Media, 32 Wn. App.

at 584. But if the parties to a contract clearly and unequivocally incorporate by

reference some other document into their contract, that document becomes part

of the contract. Satomi Owners Ass'n v. Satomi, LLC, 167 Wn.2d 781, 801, 225

P.3d 213(2009). Where material is incorporated for a limited purpose, it becomes

part of the contract for that purpose only, and is treated as irrelevant for all other

purposes. W.Wash. Corp. of Seventh-Day Adventists v. Ferrellgas, Inc., 102 Wn.

App. 488, 499, 7 P.3d 861 (2000).

       The correct interpretation of an integrated agreement is determined as a

question of law, unless it depends on the credibility of extrinsic evidence or a

choice among reasonable inferences that can be drawn from extrinsic evidence.

Berg v. Hudesman, 115 Wn.2d 657, 667-68, 801 P.2d 222 (1990) (quoting

RESTATEMENT(SECOND)OF CONTRACTS § 212(1981)).

       Here, the REPSA did not require TGC to construct a cedar fence for the

Schumachers. The REPSA and attached specification sheet do not contain any

provisions requiring TGC to build a fence as part of the home. For example, the

specification sheet details many aspects of the home's construction, but the

landscaping and exterior structure sections do not list a fence. As the trial court

noted in its oral decision, the REPSA and the specification sheet did not mention

a fence.3    Therefore, the REPSA and specification sheet did not create a

contractual duty for TGC to construct a cedar fence.

3 The trial court appeared to determine that the fence was part of the deal based on the
fact that one was actually constructed.
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No. 76022-0-1/ 15

        The Schumachers argue that, because exhibit B of the counteroffer

addendum to the REPSA contains a reference to a cedar fence, the parties

intended to require TGC to build a cedar fence. But exhibit B was not incorporated

in its entirety, and the cedar fence was not included in the REPSA as an additional

term.

        Exhibit B is a copy of the sales flyer for the home with circled areas on an

illustration of the home. The paragraph describing the home states, "Cedar

fence." But the parties attached this exhibit for the limited purpose of illustrating

two additional terms contained in the counteroffer addendum: "Masonry stone to

be installed in all areas as shown on attached exhibit B (see circled areas)" and

"Covered front porch to be installed as shown on attached exhibit B (see circled

area)."5 The counteroffer addendum does not mention the cedar fence. There is

no indication in the counteroffer addendum that the parties also intended to

incorporate exhibit B's reference to a cedar fence as a term in the contract.

        And nothing in the REPSA suggests that the parties meant to incorporate

the other terms in the sales flyer. The REPSA contained an integration clause that

stated, "This Agreement constitutes the entire understanding between the parties

and     supersedes    all   prior   or   contemporaneous      understandings     and

representations."6 The REPSA incorporated by reference eight addenda, which

did not include the sales flyer or MLS listing. As the trial court noted, the sales

4 Ex. 1.
5 Ex. 1.
6 Ex. 1 at 4.

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No. 76022-0-1 / 16

flyer and MLS listing predated the REPSA and were not incorporated by reference

and, therefore, were superseded by operation of the REPSA's integration clause.

       In sum, TGC was not contractually obligated to construct a fence for the

Schumachers. The REPSA and its addenda did not include any provision requiring

TGC to construct a fence. The MLS listing and sales flyer both mentioned a cedar

fence, but neither were incorporated into the REPSA. Although a copy of the sales

flyer was included in the counteroffer addendum, it was for the limited purpose of

illustrating the changes to the REPSA agreed to by the parties. Therefore, the trial

court erred in awarding breach of contract damages to the Schumachers based on

TGC's failure to construct a cedar fence.

      The trial court, relying on Beg, determined that TGC and the Schumachers

intended that TGC would construct a cedar fence by looking to the MLS listing and

sales flyer as extrinsic evidence. 115 Wn.2d 657. The relevant issue before the

Berg court was the admissibility of extrinsic evidence as to the entire

circumstances under which the contract was made, as an aid to ascertaining the

parties' intent. 115 Wn.2d at 667. Berg involved a dispute between a landlord and

tenant regarding the proper formula used to calculate rent. 115 Wn.2d at 661-63.

To resolve ambiguity in the lease document, the court looked to prior agreements,

prior rental income from subtenants, and other values outside of the master lease

at issue. Berg, 115 Wn.2d at 672-73.

       Berg is inapplicable here. As discussed above, the REPSA contained an

integration clause that explicitly superseded all prior or contemporaneous

understandings and representations. The trial court found in its conclusions of law

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No. 76022-0-1 / 17

that the sales flyer and MLS listing predated the REPSA and were superseded.

The parties did not put forward any other extrinsic evidence in support of their

intent that a cedar fence was part of the REPSA. The trial court erred when it

relied on Berg to find that the parties intended that TGC would construct a cedar

fence.

         Inspection Addendum Waiver

         In the alternative, TGC argues that even if it was contractually obligated to

construct a cedar fence, the inspection addendum to the REPSA operates to bar

the Schumachers' claims. Because we hold there was no contractual obligation,

we do not determine whether the Schumachers would have waived that right.

         The Schumachers argue for the first time on appeal that TGC failed to

establish that it constructed the non-cedar fence within the 10-day inspection

period. They argue that this precludes TGC's argument that the inspection

addendum bars their claim. The Schumachers did not raise this argument

concerning the 10-day inspection period in their complaint or trial brief below.

         An appellate court may refuse to review any claim of error which was not

raised in the trial court. RAP 2.5(a). "A party may present a ground for affirming

a trial court decision which was not presented to the trial court if the record has

been sufficiently developed to fairly consider the ground." RAP 2.5(a); see Wilson

& Son Ranch, LLC v. Hintz, 162 Wn. App. 297, 304-05, 253 P.3d 470 (2011)

(allowing a novel argument on appeal may result in injustice to the opposing party

due to lack of notice that it must develop a record).

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No. 76022-0-1/ 18

          Here, the record has not been sufficiently developed to consider the

Schumacher's novel argument. TGC was not given an opportunity below to

address whether the non-cedar fence was constructed within the inspection period

and, if so, how this affected the inspection addendum. We decline to consider the

Schumachers' new argument on appeal.

                               Attorney Fees and Costs

          TGC requests that, if this court reverses the trial court's damages award to

the Schumachers, it also award TGC the attorney fees and costs it incurred below.

The REPSA contains an attorney fees provision, which states that "if Buyer or

Seller institutes suit against the other concerning this Agreement the prevailing

party is entitled to reasonable attorneys'fees and expenses."7 The trial court held

that the Schumachers were the substantially prevailing party and were entitled to

their reasonable attorney fees and costs.

          Because we reverse the trial court's damages award for the stone garage

exterior, kitchen cabinetry, and lack of a cedar fence, the Schumachers have not

prevailed on any of their claims against TGC. Therefore, TGC is the substantially

prevailing party and is entitled to recover its reasonable attorney fees and costs

below under the REPSA in an amount to be determined on remand.

                          Attorney Fees and Costs on Appeal

          TGC and the Schumachers each request an award of appellate attorney

fees and costs if they prevail. RAP 18.1. In an action on a contract that specifically

provides for attorney fees and costs, the prevailing party is entitled to its

7   Ex. 1 at 4.
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No. 76022-0-1/ 19

reasonable attorney fees and costs incurred to enforce the provisions of the

contract. RCW 4.84.330.

      The REPSA contains an attorney fees and costs provision that entitles the

prevailing party to its reasonable attorney fees and expenses. On appeal, TGC

challenged the trial court's damages award for construction defects and the lack

of a cedar fence. TGC has prevailed on both. TGC is the substantially prevailing

party on appeal, and is entitled to recover its reasonable appellate attorney fees

and costs.

      Reversed and remanded for further proceedings consistent with this

opinion.

WE CONCUR:

                                                                                     --4
                                                                             577.    rn

                                                                                           "

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