Court Opinion

ID: 9906682
Source: CourtListenerOpinion
Date Created: 2023-12-04 21:31:38.098615+00
Date Added: 2024-06-11T09:25:32.028902
License: Public Domain

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

In the Matter of the Receivership of:
                                                 No. 84320-6-I
APPLIED RESTORATION, INC.
                                                 DIVISION ONE

ANDERSEN CONSTRUCTION                            PUBLISHED OPINION
COMPANY,

                     Appellant,

v.

REVITALIZATION PARTNERS, LLC,

                     Respondent.

       HAZELRIGG, A.C.J. — Andersen Construction Company appeals two

separate orders for turnover issued by a court commissioner in favor of receiver

Revitalization Partners, LLC, and challenges the superior court’s denial of its

motion for revision. Andersen also argues the commissioner erred when they

disallowed its claims against Applied Restoration, Inc. and entered final judgment

in favor of the receiver. Because the record establishes that Andersen repeatedly

refused to comply with the court orders pursuant to the receivership statute and

because Andersen fails to demonstrate any error arising from the decisions of

either the commissioner or judge in this matter, we affirm.
No. 84320-6-I/2

                                            FACTS

        In May 2019, Applied Restoration, Inc. (ARI) and Andersen Construction

Company entered into an agreement (subcontract) for ARI to perform work on the

construction of the Quil Ceda Creek Casino (project), owned by the Tulalip Tribes

of Washington (owner). ARI served as a subcontractor for Andersen, the general

contractor on the project. In accordance with the agreement, ARI employed nine

to ten laborers per day who worked directly on the project and also subcontracted

with third parties (sub-tier subs) who provided further labor and materials for ARI’s

work on the project. Through March 2020, Andersen paid ARI for the work that it

had performed pursuant to the billing process and terms set out in the subcontract

and prime contract. 1 On March 31, due to ongoing financial difficulties, ARI

assigned all of its assets to Revitalization Partners, LLC and, on April 2, the trial

court entered an order appointing Revitalization as the general receiver of ARI’s

property and assets. At the time of the assignment, ARI had not paid all sub-tier

subs for their work on the project, in violation of the subcontract. On April 6,

Revitalization contacted Andersen, explained that ARI had been placed into

receivership and identified itself as the receiver. 2 Revitalization assured Andersen

that it would continue to operate ARI and fulfill its obligations on the project as

previously agreed.

        1 The subcontract expressly incorporated various terms and provisions set out in the prime

contract between Andersen and the owner.
        2 “Receivership” simply means “the case in which the receiver is appointed.”            RCW
7.60.005(11). A “general receivership” is “a receivership in which a general receiver is appointed”
and a “custodial receivership” is “a receivership in which a custodial receiver is appointed.” Id.

                                               -2-
No. 84320-6-I/3

       Thereafter, Andersen stopped paying ARI and did not pay Revitalization for

the work performed post-assignment. Revitalization demanded assurance from

Andersen that it would pay ARI for the work, but Andersen refused absent certain

conditions: “If the Receiver cannot guarantee that it will pay all pre-receivership

claims related to this Project, then Andersen cannot issue April’s payment, the

Receiver must reject the subcontract agreement and Andersen will find another

subcontractor.” According to Andersen, Revitalization was not entitled to payment

from Andersen because the “unequivocal language of the Subcontract between

Andersen and ARI . . . control[led] the terms of payment to ARI and/or the

Receiver.” Revitalization had paid sub-tier subs $42,467.25 for post-assignment

work and ARI extended over $200,000.00 on work and materials for the project

during that time.

       Between May and July 2020, Revitalization filed three motions against

Andersen for turnover of the subcontract funds pursuant to RCW 7.60.005(9) and

.070. On May 15, Revitalization filed its first motion, seeking $157,342.97, but that

motion was denied as the project owner had not yet paid Andersen, accordingly it

had neither possession or control of the funds.        The statute requires either

possession or control of funds as a prerequisite to turnover. RCW 7.60.070.

Roughly two weeks later, the owner issued payment to Andersen for work ARI had

completed in April 2020.       Revitalization then requested confirmation from

Andersen that it would pay ARI for post-assignment work but, on June 3, Andersen

again refused to do so unless Revitalization guaranteed that it would pay all pre-

assignment claims related to the project.

                                        -3-
No. 84320-6-I/4

       On June 4, Revitalization told Anderson that ARI’s employees would not be

working on the project that day due to “Andersen’s unwillingness to commit to

paying [ARI] for the work being done, as well as the completed work.” That same

day, Andersen forwarded a letter to Revitalization from the owner to demand return

of its $113,480.89 payment to Andersen for the work on the project in April. On

June 5, Revitalization demanded Andersen turn over the subcontract funds for the

May billing and provided notice of another action for turnover, but Andersen

refused and, further, remitted the April funds to the owner.

       On June 11, Revitalization filed a second motion for turnover for the April

billing. On July 7, after reviewing the motion, accompanying declarations, and

exhibits, the superior court commissioner granted the motion and ordered

Andersen to pay the subcontract funds to Revitalization for both April and May

2020. The order required Andersen to pay Revitalization for labor, materials, and

vendor costs directly related to the project and to place the balance of the amount

set out in each month’s billing into the court registry. Further, the court ordered

Andersen to follow the same payment pattern for the month of June, due on

August 20. Andersen then filed a motion for reconsideration of the order, but the

commissioner rejected Andersen’s arguments and denied reconsideration.

Subsequently, Andersen filed a motion for revision of the commissioner’s denial of

reconsideration by a superior court judge. The court denied the motion for revision.

       On July 29, as Andersen had not complied with the commissioner’s

previous turnover order regarding payment for the month of May, Revitalization

filed a third motion for turnover. Though Andersen had placed most of the funds

                                        -4-
No. 84320-6-I/5

for the May billing into the court registry pending outcome of the motion, the

previous order required Anderson pay those funds directly to Revitalization. On

November 3, the commissioner granted the third motion for turnover, in part, and

ordered the funds for the May billing to be released to Revitalization. 3

        On February 26, 2021, Andersen filed an amended proof of claim wherein

it asserted an unsecured debt of $941,444.45 against ARI and Revitalization based

on the following: “(i) alleged incomplete work by ARI ($664,146), (ii) cost to repair

north exterior ($45,339), (iii) amounts to be retained for subcontractor payments

($18,139.82), (iv) amounts paid by Andersen to subcontractors Salmon Bay and

PCI [(Performance Contracting, Inc.)] ($302,098.92), and (v) insurance costs

($13,096.40).” Andersen additionally sought $76,483.24 as reimbursement for its

direct payment to PCI.         Though the foregoing amounts total $1,119,303.38,

Andersen still owed $177,858.93 to Revitalization for work completed post-

assignment and sought to offset that amount by reducing the claim to $941,444.45.

        On April 21, 2021, Revitalization filed a motion to authorize rejection of the

executory contract with Andersen pursuant to RCW 7.60.130.                        The motion

expressly requested that the court authorize Revitalization’s rejection of the

subcontract between ARI and Andersen. On May 14, the commissioner granted

the motion and authorized Revitalization to reject the subcontract. 4

         3 Andersen filed a motion for discretionary review of the July 7 and November 3 orders

granting turnover, which this court denied. Ruling Den. Rev., Andersen Constr. Co., v.
Revitalization Partners, LLC, No. 82096-6-I (Wash. Ct. App. May 7, 2021).
         4 In briefing, Revitalization asserts that Andersen did not seek rejection damages under

RCW 7.60.130(2) within the statutorily proscribed timeframe, thus waiving any such recovery on
that basis. Andersen has not responded to that contention.

                                              -5-
No. 84320-6-I/6

      On February 3, 2022, Revitalization filed an objection to Andersen’s claim

and sought leave of the court to disallow a portion of the unsecured claim. A

hearing on the motion was conducted on March 16, at the conclusion of which the

court entered an order disallowing Andersen’s claims. Specifically, the order

disallowed $1,006,023.09 of Andersen’s claim, allowed $113,340.29 as an

unsecured claim, and prohibited the $177,858.93 offset sought by Andersen.

Andersen was ordered to pay Revitalization that amount due under the subcontract

directly. However, despite repeated requests from Revitalization, Andersen did

not make the payment and Revitalization filed a motion seeking a contempt finding

for Andersen’s failure to remit payment. Though the court did not hold Andersen

in contempt, it entered an order providing that the remedy for further

noncompliance would be to “reduce the obligation to a judgment.”

      On June 10, 2022, Revitalization filed a motion to enter final judgment

against Andersen. The motion was heard on June 27 and, despite filing a written

objection to the judgment, Andersen failed to appear for the hearing.        The

commissioner entered judgment in favor of Revitalization in the amount of

$177,858.93.

      Andersen timely appealed.

                                  ANALYSIS

I.    Procedural Posture and Standard of Review

      Andersen first assigns error to the commissioner’s orders that granted the

receiver’s second and third motions for turnover. According to Andersen, under

RCW 7.60.070, the orders of turnover for April and May billings were erroneous

                                      -6-
No. 84320-6-I/7

because Andersen did not have possession or control over those funds when the

turnover was demanded. However, because of the manner by which Andersen

has pursued review in this case, neither the commissioner’s July 7 order on the

second motion for turnover concerning the April billings nor the July 17 denial of

Andersen’s motion for reconsideration of that order are directly before this court.

       On July 7, 2020, the commissioner granted Revitalization’s second motion

for turnover in part and, on July 17, 2020, denied Andersen’s motion for

reconsideration of that order. Andersen then filed a motion for revision of the

commissioner’s July 17 order, but the superior court judge denied that motion.

Because Andersen challenges the superior court’s denial of revision in its notice

of appeal to this court, the commissioner’s two previous orders upon which that

denial of revision was based are outside the scope of our review. “Once the

superior court makes a decision on revision, the appeal is from that decision.”

Faciszewski v. Brown, 187 Wn.2d 308, 313 n.2, 386 P.3d 711 (2016). Accordingly,

“this court reviews the superior court’s ruling, not the commissioner’s.” Maldonado

v. Maldonado, 197 Wn. App. 779, 789, 391 P.3d 546 (2017). The superior court’s

denial of a motion for revision “constitutes an adoption of the commissioner’s

decision, and the court is not required to enter separate findings and conclusions.”

Id. We review the denial of a motion for revision for an abuse of discretion, which

exists when the court’s decision is “exercised on untenable grounds or for

untenable reasons, or if its decision was reached applying the wrong legal

standard.” River House Dev., Inc. v. Integrus Architecture, P.S., 167 Wn. App.

221, 231, 272 P.3d 289 (2012); Maldonado, 197 Wn. App. at 789.

                                        -7-
No. 84320-6-I/8

       Receiverships are an equitable remedy and trial courts are “accorded great

flexibility in fashioning relief under [their] equitable powers.” Bero v. Name Intel.,

Inc., 195 Wn. App. 170, 179, 381 P.3d 71 (2016); Friend v. Friend, 92 Wn. App.

799, 803, 964 P.2d 1219 (1998). In matters of equity, trial courts have inherent

authority beyond that expressly granted by the legislature. See Allen v. Am. Land

Rsch., 95 Wn.2d 841, 852, 631 P.2d 930 (1981) (“The superior court’s inherent

authority to enforce orders and fashion judgments is not dependent on the

statutory grant.”).   Thus, “[w]e review the authority of a trial court to fashion

equitable remedies under the abuse of discretion standard.” In re Foreclosure of

Liens, 123 Wn.2d 197, 204, 867 P.2d 605 (1994).

       Chapter 7.60 RCW also provides trial courts with broad discretion over

receiverships. Bero, 195 Wn. App. at 175. For example, courts have discretion to

appoint and terminate receivers and to “manage the duration of the extraordinary

remedy.” Mony Life Ins. Co. v. Cissne Fam., LLC, 135 Wn. App. 948, 952, 148

P.3d 1065 (2006); Bero, 195 Wn. App. at 178. Once the trial court appoints a

receiver, that person becomes an agent of the court and retains “broad powers to

manage the receivership property, liquidate assets, and satisfy creditors.” Bero,

195 Wn. App. at 175.

       With these equitable and statutory powers in mind, we review the trial

court’s rulings regarding the receivership that order turnover, disallow claims, and

enter judgment, for an abuse of discretion. Again, an abuse occurs when a

decision is “‘manifestly unreasonable, or exercised on untenable grounds, or for

untenable reasons.’” Mony Life Ins., 135 Wn. App. at 952-53 (internal quotation

                                        -8-
No. 84320-6-I/9

marks omitted) (quoting T.S. v. Boy Scouts of Am., 157 Wn.2d 416, 423, 138 P.3d

1053 (2006)).        The trial court’s findings of fact are reviewed for substantial

evidence, which exists when there is “a sufficient quantum of evidence in the

record to persuade a reasonable person that the declared premise is true.”

Wenatchee Sportsmen Ass’n v. Chelan County, 141 Wn.2d 169, 176, 4 P.3d 123

(2000).

II.     Turnover Orders

        A “[r]eceiver” is a “person appointed by the court as the court’s agent, and

subject to the court’s direction, to take possession of, manage, or dispose of

property of a person.” RCW 7.60.005(10). Pursuant to RCW 7.60.070, “Upon

demand by a receiver . . . any person shall turn over any property over which the

receiver has been appointed that is within the possession or control of that person

unless otherwise ordered by the court for good cause shown.” Property is defined

in this chapter as “all right, title, and interests, both legal and equitable, and

including any community property interest, in or with respect to any property of a

person with respect to which a receiver is appointed, regardless of the manner by

which the property has been or is acquired.” RCW 7.60.005(9). 5 Further, once a

trial court enters an order appointing a receiver, an automatic stay that is applicable

to all persons arises of “[a]ny act to obtain possession of estate property from the

         5 Andersen argues in its brief that the trial court erred in entering both orders for turnover

because “Andersen did not have property belonging to ARI” as defined by the subcontract. Its
argument largely relies on the contention that the terms of the subcontract supersede the provisions
of the receivership statute, such as RCW 7.60.070 and .110(c). However, as set out in detail herein,
Andersen offers no authority in support of this position which is clearly at odds with both the court’s
equitable powers and general public policy considerations.

                                                -9-
No. 84320-6-I/10

receiver, or to interfere with, or exercise control over, estate property.” RCW

7.60.110(1)(c).

       A. April Billing

       The April billing funds were addressed in the order granting the second

motion for turnover, the order denying reconsideration of that turnover order, and

the superior court’s order denying revision of the order denying reconsideration.

Though we elect to address the arguments of the parties regarding this assignment

of error and go to the original ruling by the commissioner, we note that Andersen

offers no argument as to how the judge’s order denying revision was an abuse of

discretion.

       When it granted the second motion for turnover, the trial court found that

Andersen was withholding the April billing, which amounted to $113,481.00, and

that Andersen’s claim for an offset of $272,236.83 against that billing was not

appropriate. Andersen was ordered to pay $113,481.00 of the subcontract funds

as follows: $84,164.54 to Revitalization for costs directly related to the project and

$29,313.46 to be placed in the court registry for the balance of the April billing.

Those payments were due on July 15, 2020.

       First, Andersen’s argument that it did not have any property belonging to

Revitalization for the April billing under the terms of the subcontract is irrelevant.

Andersen offers no authority for its bald assertion that the terms of the subcontract

control over those of the receivership statute. Again, under RCW 7.60.006(9),

property belonging to the receiver includes “all right, title, and interests, both legal

and equitable, and including any community property interest, in or with respect to

                                         - 10 -
No. 84320-6-I/11

any property of a person with respect to which a receiver is appointed, regardless

of the manner by which the property has been or is acquired.” Because there is

no dispute that the work addressed in the April billing was performed,

Revitalization, as the receiver, had a right to payment for that work; the funds

belonged to Revitalization.

      Second, Andersen cites to United States v. Aubrey, in support of its

argument that the April funds were Tribal property and Andersen never had control

of them.   800 F.3d 1115 (9th Cir. 2015).        Andersen’s reliance on Aubrey is

misplaced. In that case, the United States was prosecuting a contractor who had

contracted directly with a Tribal organization and the dispute concerned federal

funds that had been transferred to the Tribal organization. The case is materially

distinguishable on those facts alone.

      Here, the court’s finding that Andersen was in possession or control of the

property is supported by substantial evidence. As the commissioner explained

after reviewing the correspondence from both the owner and Andersen, it was

clear “that Andersen was paid by the [owner] and Andersen took affirmative action

to cause the [owner] to cancel payment.” This was confirmed by the content and

timing of e-mails between the parties, Andersen’s own declaration, and the letter

from the owner that Andersen forwarded to Revitalization.

      Once the owner issued payment to Andersen for work ARI had completed

in April, Revitalization requested confirmation from Andersen that it would pay for

the post-assignment work. However, on June 3, Andersen refused to do so without

express agreement that Revitalization would pay all pre-assignment claims from

                                        - 11 -
No. 84320-6-I/12

the sub-tier subs. On June 4, in response to this refusal, Revitalization told

Anderson that its employees would not be working on the project that day.

Andersen responded by accusing Revitalization of breaching the subcontract and,

later that same day, forwarded a letter to Revitalization from the owner that

demanded return of the April billing funds from Andersen. The commissioner

expressly found the timing of the e-mails and the word choice in the owner’s letter

stating, “[i]t has come to the [owner’s] attention . . .,” established that Andersen

had possession of the April funds, even if temporarily, and withheld them. On June

5, Revitalization demanded Andersen turn over the funds, but Andersen refused

and instead returned them to the owner.

       Pursuant to RCW 7.60.070, Andersen was required to “turn over any

property over which the receiver ha[d] been appointed that [was] within [its]

possession or control.” Because substantial evidence supports the trial court’s

finding that “Andersen had possession of the funds owed to ARI” and “withheld

those funds,” this finding was proper. Moreover, as Revitalization correctly asserts

in briefing, “If a party could simply avoid the consequences of a receivership by

transferring estate property, the statute would be useless in effectuating its goals—

achieving equity for all creditors.”

       Accordingly, the commissioner’s order on turnover as to the April billing was

not an abuse of discretion and, therefore, the superior court did not abuse its

discretion in denying Andersen’s motion for revision of the commissioner’s order

denying reconsideration of the order for turnover.

                                       - 12 -
No. 84320-6-I/13

        B. May Billing

        Regarding the order granting the third motion for turnover, Andersen again

argues that the terms of the subcontract are controlling and asserts that it never

had possession or control of the May billing funds. Neither argument holds merit;

the former lacks any supporting authority and the latter is refuted by the fact the

Andersen placed $81,179.70 into the court registry for the May billing, at least a

rebuttable demonstration of control over the funds. 6 The commissioner’s order

granting the second motion for turnover set out the specific procedure Andersen

was to follow for the funds relating to the April and May billings. When Andersen

failed to comply with the court’s requirements as to the May billing, the

commissioner granted the third motion for turnover, which ordered the release of

funds that Andersen had placed into the court registry for that billing.

        Andersen further argues that both turnover orders were erroneous “due to

a bona fide dispute over the funds.”                We disagree.         Under RCW 7.60.070,

Andersen was required to turn over the property to Revitalization “unless there

exist[ed] a bona fide dispute with respect to the existence or nature of the receiver’s

interest in the property, in which case turnover shall be sought by means of an

action under RCW 7.60.160.” Andersen cites to the commissioner’s order granting

the receiver’s second motion for turnover and argues that, because “portions of

the funds related to the April Billing were to be placed in the court registry,” RCW

          6 While Andersen asserts that these funds did not constitute the May billing because

Andersen paid them out of pocket without first being paid by the owner, that alone does not
establish an abuse of discretion on the part of the trial court. Rather, this order was a clear example
of the trial court exercising its equitable powers and, considering Andersen’s continued refusal to
abide by the court’s previous orders under the receivership statute, the trial court’s order was not
beyond its authority. See Friend, 92 Wn. App. at 803-04.

                                                - 13 -
No. 84320-6-I/14

7.60.160 should have governed the action. However, Andersen fails to understand

that the funds that it was ordered to pay directly to the receiver, $84,164.54 for

demonstrable costs for labor, materials, and vendor costs related to the project,

were not disputed. As there was no bona fide dispute, there was no abuse of the

discretion by the commissioner or the superior court on revision.

       Andersen next contends that the turnover orders were erroneous because

they conflicted with the court’s previous orders in the “Foushee matter.” That

matter, which involved ARI and a different owner, is distinguishable and

immaterial. While Andersen argues that the facts are “nearly identical,” it ignores

the key distinction that Foushee had neither control nor possession of the funds

the receiver demanded but, as established here, Andersen did. More critically,

despite Andersen’s argument to the contrary, a different ruling based on distinct

facts in a tangentially related matter involving the same receivership does not

trigger application of the law of the case doctrine. “Except in the case of jury

instructions, the law of the case doctrine requires a prior appellate court decision

in the same case.” In re Est. of Jones, 170 Wn. App. 594, 605, 287 P.3d 610

(2012). Because the commissioner’s orders in the Foushee matter constitute

neither jury instructions nor the decision of an appellate court, the rule of the case

doctrine is inapplicable here.

III.   Rejection of Andersen’s Claims

       Andersen avers the trial court erred in rejecting its claims and ordering it to

pay the subcontract balance to the receiver. Specifically, Andersen challenges the

                                        - 14 -
No. 84320-6-I/15

rejection of claims for the “retention balance ($18,139.81),”7 costs it asserted were

required to repair ARI’s “defective work ($45,339.00),” and costs of completing

ARI’s “abandoned work ($664,146.00).”

        The receivership statute is instructive and controlling 8 here; according to

the relevant provisions, Andersen had 30 days following Revitalization’s rejection

of the subcontract to file a claim for damages on that basis. A general receiver

may “reject any executory contract or unexpired lease of the person over whose

property the receiver is appointed upon order of the court following notice to the

other party to the contract or lease upon notice and a hearing.” RCW 7.60.130(1).

Such a rejection “shall be treated as a breach of the contract or lease occurring

immediately prior to the receiver’s appointment” and any claim of a party to the

contract or lease, based on the receiver’s rejection of it, “shall be served upon the

receiver in the manner provided for by RCW 7.60.210 within thirty days following

the rejection.” RCW 7.60.130(2). Because Andersen failed to file a claim for

damages within the 30 days after the court permitted Revitalization to reject the

subcontract, those claims were properly barred.

        7 In construction contracts, “retainage” refers to the percentage that the owner or general

contractor may withhold from each progress payment to the contractor or subcontractor until final
completion of the project. Steven Walt & Emily L. Sherwin, Contribution Arguments in Commercial
Law, 42 EMORY L.J. 897, 907-08 (1993).
         Andersen explicitly asserts that it is entitled to the “reimbursement” of $18,138.81 for the
retention of three sub-tier subs that Revitalization had not paid, however, it fails to provide any
statutory basis that would entitle it to such a “reimbursement.”
         8 The majority of Andersen’s argument, once again, focuses on the terms of the subcontract

rather than those found in the receivership statute and argues, without authority, that the former is
controlling. The commissioner correctly disagreed.

                                               - 15 -
No. 84320-6-I/16

        Andersen next challenges the commissioner’s order disallowing claims for

completion damages9 based on its determination that Andersen anticipatorily

breached the subcontract. According to Andersen, it did not anticipatorily breach

the subcontract and ARI breached the subcontract first by abandoning the work.

        An anticipatory breach is a “‘positive statement or action by the promisor

indicating distinctly and unequivocally that [they] either will not or cannot

substantially perform any of [their] contractual obligations.’” Olsen Media v. Energy

Scis., Inc., 32 Wn. App. 579, 585, 648 P.2d 493 (1982) (quoting Lovric v. Dunatov,

18 Wn. App. 274, 282, 567 P.2d 678 (1977)). “A party’s intent not to perform may

not be implied from doubtful and indefinite statements that performance may or

may not take place.” Wallace Real Est. Inv., Inc. v. Groves, 124 Wn.2d 881, 898,

881 P.2d 1010 (1994). However, when a party makes repeated conditional threats

to withhold payment due under a contract, such conduct may qualify as repudiation

of the contract and an anticipatory breach that justifies the other party walking

away. See CKP, Inc. v. GRS Constr. Co., 63 Wn. App. 601, 620, 821 P.2d 63

(1991).

        Here, Andersen expressly, directly, and repeatedly told Revitalization that it

would not provide further payments unless Revitalization guaranteed it would pay

the “outstanding amounts owed” to the sub-tier subs under the terms of the

subcontract. Although Revitalization explained to Andersen that it was prohibited

         9 Completion damages are those “incurred to complete the contract following the owner’s

just termination of the contract for default or the contractor’s wrongful repudiation of the contract or
wrongful abandonment of the project.” 6 PHILIP L. BRUNER & PATRICK J. O'CONNOR, JR., BRUNER &
O'CONNOR ON CONSTRUCTION LAW § 19:78 (2023). Typically, they are measured by “the reasonable
cost to complete the contract in conformance with its terms, less unpaid contract funds.” Id.

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No. 84320-6-I/17

from doing so by the plain language of the receivership statute, Andersen would

not yield and reiterated its refusal to pay the funds unless Revitalization satisfied

its condition. In an e-mail to Revitalization, Andersen explicitly stated that “[i]f the

Receiver cannot guarantee that it will pay all pre-receivership claims related to this

Project, then Andersen cannot issue April’s payment, the Receiver must reject the

subcontract agreement and Andersen will find another subcontractor.” According

to Andersen, Revitalization was not entitled to payment from Andersen as the

“unequivocal language of the Subcontract between Andersen and ARI . . .

control[led] the terms of payment to ARI and/or the Receiver.” 10

        Based on its continuous threats and, as the commissioner noted, the fact

that “[t]hroughout this matter Andersen has been obstructive to the receivership

process,” we conclude that substantial evidence supports the commissioner’s

implicit finding that Andersen anticipatorily breached the subcontract before the

court granted Revitalization permission to reject it.                        Because Andersen

anticipatorily breached the subcontract and was thus not entitled to completion

damages, the trial court did not err in disallowing this portion of its claim.

        Andersen further contends that the trial court erred by ordering payment of

the “subcontract balance,” i.e., the $177,858.93 that Andersen sought as an

        10 As Andersen had posted a payment bond on the project, it faced liability under the

subcontract in the event that Revitalization failed to pay its sub-tier subs in full. In order to avoid
its own liability under the terms of the subcontract, Andersen chose to pay the sub-tier subs
pursuant to the subcontract and in violation of the receivership statute.
         It is unclear whether compliance with the requirements of the receivership statute would
constitute a defense to any claims against Andersen for breach of the payment terms set out in the
contract with the project owner, and the parties have made no such argument. In other words,
while Andersen insists that it had no choice but to withhold payment to Revitalization, Andersen
may have made a strategic choice to prioritize the subcontract above the receivership statute.

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No. 84320-6-I/18

offset. 11 Strangely, Andersen asserts there is “no evidence in the record” that the

subcontract balance was owed to Revitalization.                   However, at the contempt

hearing on Andersen’s failure to comply with its payment obligations, Andersen

confirmed that it sought to “offset” the $177,858.93 from the amount it owed to

Revitalization because it had already paid the subcontractor PCI in full. The trial

court rejected Andersen’s attempted offset and explained that the payment to the

subcontractor PCI was wrongful. The court concluded that Andersen was only

entitled to an offset in an amount equal to a pro-rata share. In the order disallowing

Andersen’s claims, the court reiterated that “Andersen paid the subcontractor

(wrongfully) PCI in full. PCI should only have pro-rata share as other unsecured

creditors will. Andersen is entitled to PCI’s pro-rata share once that pro-rata share

is determined.”      Accordingly, the trial court prohibited “the offset sought by

Andersen in its [c]laim in the amount of $177,858.93” and required Andersen to

pay that amount directly to Revitalization.

       Under RCW 7.60.210, the submission of all claims in general receiverships

“arising prior to the receiver’s appointment, must be served in accordance with this

chapter, and any claim not so filed is barred from participating in any distribution

to creditors in any general receivership.” RCW 7.60.230 provides the priorities for

distribution of payment to creditors for the allowed claims in a general receivership.

Pursuant to the statutory priorities, creditors with general unsecured claims are

paid on a pro-rata basis after all other claims have been distributed.                         RCW

       11 Again, Andersen relies on its position that it did not anticipatorily breach the subcontract

and insists that Revitalization abandoned the project. As we have explained, this argument is
belied by the record.

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7.60.230(1)(h). Because Andersen’s claim is unsecured and does not fall within

any exception to the priority scheme, Andersen shall receive distribution for that

claim on a pro-rata basis along with any other unsecured creditors. Andersen

chose to pay its subcontractors for claims that arose before ARI was placed into

receivership and sought reimbursement of those payments in full as an offset. Its

arguments on appeal are as unpersuasive as they were in the trial court; Andersen

cannot circumvent the receivership statute and, though it paid its subcontractors

in full, it is only entitled to a pro-rata distribution of its claim.

       Andersen’s final challenge to the award of the subcontract balance to

Revitalization is the assertion that it is barred by the law of the case doctrine

because it conflicts with the commissioner’s turnover order.             As already

established, that doctrine has no bearing in this context.

III.   Entry of Judgment against Andersen

       When Andersen failed to comply with the court’s order on the turnover

motions, Revitalization moved for a finding of contempt. While the court declined

to find that Andersen was in contempt, it expressly noted that a remedy for

Andersen’s continued failure to comply could be entry of judgment. After payment

had still not been made, Revitalization moved for entry of judgment, to which

Andersen objected in writing.           However, despite filing formal opposition to

Revitalization’s action, Andersen failed to appear for the hearing on the motion and

the trial court entered judgment in favor of Revitalization.

       Andersen argues that the trial court erred in entering judgment against it for

the same reasons it asserts that the court erred with regard to the order disallowing

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its claims.   These arguments have been addressed herein and need not be

repeated. Andersen further avers that the court erred by refusing the request in

its written opposition to “enter express findings of fact linking the judgment amount

to documents in the record.” Revitalization contends that the trial court did not err

as to the form of the judgment because the trial court had already addressed the

issues, did not require additional proceedings, and made oral findings of fact.

       As it did in its written objection to the entry of judgment, Andersen cites

Pacific Marine Insurance Co. v. Department of Revenue, 181 Wn. App. 730, 737,

329 P.3d 101 (2014) in its opening brief and claims the case stands for the

proposition Andersen characterized, in both its pleading in the trial court and

appellate briefing, as an “[a]ppellate court cannot affirm a superior court’s entry of

judgment if the grounds are not supported by the court record.” No such rule

statement lives in that opinion. In Pacific Marine, the court simply provided the

common rule that an appellate court “may affirm the superior court’s summary

judgment decision on any ground supported by the record.” Id.

       Beyond the mischaracterization of the language in Pacific Marine, Andersen

cites no authority for its assertion that the trial court was required to provide explicit

written findings of fact. This court need not consider arguments for which a party

has not cited authority. Norcon Builders, LLC v. GMP Homes VG, LLC, 161 Wn.

App. 474, 486, 254 P.3d 835 (2011). Moreover, the trial court made oral findings.

The commissioner found that awarding Andersen what it sought would have

provided Andersen an amount close to its pre-filing, rather than post-filing, claim.

The trial court clearly stated, “That’s not appropriate.”          Andersen does not

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challenge the court’s oral findings. Unchallenged findings are treated as verities

on appeal. Tapper v. Emp’t Sec. Dep’t, 122 Wn.2d 397, 407, 858 P.2d 494 (1993).

Absent any authority to the contrary, the trial court did not err by not entering written

findings of fact in this case.

IV.    Attorney Fees

       Andersen requests attorney fees, costs, and expenses incurred herein

pursuant to article 11.5 of the subcontract which provides that the prevailing party

shall be entitled to such an award. Because Andersen has not prevailed, we reject

its request for fees and costs.

       Revitalization also seeks an award of attorney fees pursuant to RCW

7.60.080 and RAP 18.9(a). Under RAP 18.9(a), this court may order a party who

files a frivolous appeal “‘to pay terms or compensatory damages to any other party

who has been harmed by the delay or the failure to comply or to pay sanctions to

the court.’” Kinney v. Cook, 150 Wn. App. 187, 195, 208 P.3d 1 (2009) (quoting

RAP 18.9(a)). Such sanctions include “‘an award of attorney fees and costs to the

opposing party.’” Id. (quoting Yurtis v. Phipps, 143 Wn. App. 680, 696, 181 P.3d

849 (2008)). “[A]n appeal is frivolous if there are no debatable issues upon which

reasonable minds might differ, and it is so totally devoid of merit that there was no

reasonable possibility of reversal.” Streater v. White, 26 Wn. App. 430, 435, 613

P.2d 187 (1980). While we reject Andersen’s arguments, they were not frivolous.

Accordingly, we decline to award fees as a sanction.

       Revitalization further asserts Andersen’s repeated opposition to the

cooperation required under RCW 7.60.080 resulted in frivolous litigation and

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excessive legal fees. However, the plain language of the statute is devoid of any

mention of attorney fees and we similarly decline to award them on that proffered

basis.

         Affirmed.

WE CONCUR:

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