Court Opinion

ID: 2801929
Source: CourtListenerOpinion
Date Created: 2015-05-19 21:16:46.177348+00
Date Added: 2024-06-11T12:39:22.478591
License: Public Domain

FILED
                                                                                                         COURT OF APPEALS
                                                                                                            DIVISION r1
                                                                                                       2D 15 NNA Y 19
                                                                                                                      MI     014
                                                STA
     IN THE COURT OF APPEALS OF THE STATE OF WASHI                                                                     SH1NG10N
                                                                                                       BY
                                                     DIVISION II

 NORTHWEST CASCADE, INC., a                                                            No. 45312 -6 -II
 Washington corporation,

                      Respondents /Cross -Appellants,

          v.

 UNIQUE CONSTRUCTION, INC., a
 Washington corporation; TEMPORAL
 FUNDING, LLC, a Washington Limited
 Liability Company; the WILLIAM K. and
 MARION L. LLLP; and SAHARA
 ENTERPRISES, LLC,

                                          Defendants,

 WILLIAM REHE and SUZANNE REHE,                                                 PUBLISHED OPINION

                      Appellants /Cross -Respondents.

         WoRSwIcK, J. — Northwest Cascade, Inc. (NWC) secured a judgment against Unique

Construction, Inc. ( Unique),           a corporation owned by William and Suzanne Rehe. In an earlier

appeal, Division One of this court held that Unique' s corporate veil could be pierced, paving the

way for NWC to collect its judgment against the Rehes. The Rehes filed a homestead

declaration    on   Unique'     s"   89th Street   Property,"   which the trial court quashed.

         The Rehes now appeal the trial court' s order quashing the homestead declaration, arguing

that ( 1) the trial   court   lacked    personal   jurisdiction   over   them, ( 2)   the trial court violated RAP 7. 2

by considering NWC' s motion to quash while the appeal was pending in Division One of this

court, ( 3)   a claimant   is   an owner of a      property   under   the homestead      statutes   if they   possess and
No. 45312 -6 -II

use that property, even if they have no legal or equitable interest in it, and (4) they have a legal or

equitable interest in the 89th Street Property because either their contributions and residence at

the property give them a legal or equitable interest or piercing the corporate veil gave them

Unique' s interest in the property.

         NWC cross -appeals the trial court' s denial of its request for attorney fees and costs

incurred to litigate its motion to quash, arguing that it is entitled to attorney fees and costs as the

prevailing party because litigating its motion to quash was a " collection proceeding" that fell

within the attorney fees and costs provision of NWC' s contract with Unique.

         We affirm the trial court' s order quashing the homestead declaration, holding that ( 1) the

Rehes   waived personal        jurisdiction   by failing to timely raise     it, (2)   the trial court had authority

under   RAP 7. 2 to   consider     NWC'   s motion   to   quash, ( 3)   a claimant must have either a legal or an

equitable   interest in   a   property to be   an owner of    it   under   the homestead     statutes, (   4) Unique held

all legal and equitable interest in the 89th Street Property, and ( 5) piercing of the corporate veil

does not allow the Rehes to claim a homestead exemption in Unique' s property. However, we

reverse the trial court' s denial of NWC' s attorney fees and costs by holding that litigating

NWC' s motion to quash falls within the contract' s attorney fees and costs provision. We remand

for a determination of NWC' s reasonable attorney fees consistent with this opinion.

                                                          FACTS

A.       Background

         The Rehes are Unique' s sole shareholders. William Rehe is Unique' s president. In 2004

and 2005, Unique began acquiring lots for the development of a 34 -lot residential real estate

                                                             2
No. 45312 -6 -II

project   in Tacoma.'     On March 27, 2006, Unique entered into a contract with NWC to build the

plat' s infrastructure. The contract contained an attorney fees and costs provision that stated:

          If the contract price is not paid as agreed and if collection proceedings or a suit is
          started,   then [ Unique]   agree[ s]   to pay   all costs   incurred
                                                                    by [ NWC], including all
          costs of suit and a reasonable attorneys' fee as determined by the court.

Clerk' s Papers ( CP) at 302.

          In 2006, the Rehes moved into Unique' s 89th Street Property, which was a lot with a

house built by Unique. Without paying Unique rent, the Rehes continued to reside at the 89th

Street Property through this litigation except for an 18 -month period when they temporarily

moved out.

B.        Unique 's Breach of Contract, NWC' s Suit, and Unique 's Transfer ofthe 89th Street
          Property

          Unique stopped paying NWC on the contract. On July 7, 2008, NWC sued Unique for

breach of contract.

          On July 29, 2009, Unique recorded a quitclaim deed transferring the 89th Street Property

to a Nevada limited liability company ( LLC) named Black Point Management. On December

16, 2010, Black Point transferred the 89th Street Property by quitclaim deed to an LLC

controlled by a limited liability limited partnership that was formed at the Rehes' direction. The

transfers of the 89th Street Property were identified as tax exempt and no consideration was paid

for them. The transfers of the 89th Street Property left Unique insolvent.

 In 2005, Unique transferred the lots to a single purpose limited liability company wholly owned
by the Rehes.

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No. 45312 -6 -II

         On October 30, 2009, NWC amended its complaint to add the Rehes as defendants and to

add two additional claims: a claim seeking to pierce Unique' s corporate veil to hold the Rehes

personally liable and a claim under the Uniform Fraudulent Transfer Act2 ( UFTA) for fraudulent

conveyance of the 89th Street Property.

C.       Bifurcated Trial

         The breach of contract and UFTA claims were tried to a jury. The jury returned a verdict

in favor of NWC on both claims, and made a special finding that Unique transferred the 89th

Street Property with the actual intent to hinder, delay, or defraud creditors. The veil piercing

claim then went to a bench trial after which the trial court ruled that Unique' s corporate veil

could not be pierced.

         The trial court entered a judgment against Unique for $216, 505. 46. The trial court also

voided the transfer of the 89th Street Property and quieted title to Unique. The trial court

awarded attorney fees and costs to NWC for the breach of contract and UFTA claims, and

awarded attorney fees to the Rehes for the veil piercing claim. The trial court dismissed the

Rehes with prejudice.

D.       First Appeal

         NWC appealed the trial court' s denial of the veil piercing claim and its award of attorney

fees to the Rehes. Unique cross -appealed the attorney fees and costs award. This appeal was

heard by Division One of this court. See Nw. Cascade, Inc. v. Unique Const., Inc., noted at 180
Wash. App. 1017, 2014 WL 1289586, review denied, 181 Wash. 2d 1009, 335 P.3d 941 ( 2014).

2
    Chapter 19. 40 RCW.
No. 45312 -6 -I1

E         Writ ofExecution on the 89th Street Property and NWC' s Motion To Quash

          While the appeal was pending, the trial court entered a writ of execution against the 89th

Street Property. Prior to the 89th Street Property' s sale, the Rehes filed a homestead declaration,

claiming to have lived at the property since 2002.

       NWC filed a motion to quash the Rehes' homestead declaration. The Rehes filed a

memorandum opposing NWC' s motion. After a hearing on NWC' s motion to quash, where the

Rehes presented argument, the trial court entered an order quashing the Rehes' homestead

declaration. The trial court ruled that the Rehes could not claim a homestead exemption in the

89th Street Property because they lacked a sufficient interest in that property to be owners of it

under the homestead statutes and because NWC executed against the 89th Street Property to

recover   Unique'   s   debt ( rather than the Rehes' debt). The trial court denied NWC' s request for

attorney fees and costs for litigating its motion to quash.

          The Rehes filed a motion for reconsideration, arguing for the first time that the trial court

lacked personal jurisdiction over them. The trial court denied the motion for reconsideration.

The trial court also denied NWC' s request for attorney fees and costs to defend against the

Rehes' motion for reconsideration.

F.        Division One' s Reversal ofthe Trial Court' s Veil Piercing Ruling

          On March 31, 2014, Division One reversed the trial court' s veil piercing ruling and held

that Unique' s corporate veil could be pierced. Nw. Cascade, Inc., 2014 WL 1289586, at * 6.

Division One remanded the issues of attorney fees and costs for the trial court' s determination

consistent with the reversal. 2014 WL 1289586, at * 6.

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No. 45312 -6 -II

           The Rehes appeal the order quashing the Rehes' homestead declaration. NWC cross -

appeals the trial court' s, denial of attorney fees and costs for litigating its motion to quash.

                                                         ANALYSIS

                                               I. PERSONAL JURISDICTION

           The Rehes argue the trial court lacked personal jurisdiction over them because the trial .

court had previously dismissed them with prejudice when it entered its judgment. NWC argues

the Rehes waived their personal jurisdiction defense by failing to timely raise it. We agree with

NWC.

           A party who fails to raise the personal jurisdiction defense in any entry of appearance,

pleadings, or answers waives that defense and " submits himself or herself to the jurisdiction of

the    court."   In   re   Marriage of Steele, 90 Wn.       App.      992, 997, 957 P.2d 247 ( 1998); see State ex

rel.   Coughlin       v.   Jenkins, 102 Wn.   App. 60, 63,       7 P.3d 818 ( 2000). " Even informal acts, such as

written or oral statements         to the   plaintiff   in the   action can constitute an appearance."    Coughlin,
102 Wash. App. at 63.

           Here, NWC filed a motion to quash. The Rehes filed a memorandum in opposition to

NWC' s motion to quash and appeared at the hearing, but did not raise a personal jurisdiction

defense until its motion for reconsideration of the trial court' s order quashing the Rehes'

homestead declaration. Thus, by failing to raise the personal jurisdiction defense in their answer

and in their appearance at the hearing, the Rehes waived that defense and submitted themselves

to the trial court' s jurisdiction.

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No. 45312 -6 -II

                                           II. VIOLATION OF RAP 7. 2

       The Rehes argue the trial court violated RAP 7. 2 by ruling on NWC' s motion to quash

while the Division One appeal was pending. We disagree.

       After review is accepted, the trial court has authority to act in a case only to the extent

provided by RAP 7. 2. RAP 7. 2( e) states in part:

       Postjudgment Motions and Actions to Modify Decision. The trial court has
       authority to hear and determine ( 1) postjudgment motions authorized by the civil
       rules,   the   criminal rules, or statutes ....   If the trial court determination will change
        a decision then being reviewed by the appellate court, the permission of the
        appellate court must be obtained prior to the formal entry of the trial court decision.

RCW 6. 32.270 authorizes subsequent proceedings regarding real property, and states in part:

        In any supplemental proceeding, where it appears to the court that a judgment
        debtor may have an interest in or title to any real property, and such interest or title
        is disclaimed by the judgment debtor or disputed by another person or it appears
        that the judgment debtor may own or have a right of possession to any personal
        property, and such ownership or right of possession is substantially disputed by
        another person, the court may, if the person or persons claiming adversely be a
        party to the proceeding, adjudicate the respective interests of the parties in such real
        or personal     property ....   Any person so made a party, or any party to the original
        proceeding, may have such issue determined by a jury upon demand therefor.

  A] n interested litigant    whose name appears of record ...       and over whom ...   the court has

acquired jurisdiction" is a party to the proceedings. Junkin v. Anderson, 12 Wash. 2d 58, 72, 120
P.2d 548, 123 P.2d 759 ( 1941).

        Here, the trial court quieted title to the 89th Street Property in the judgment debtor,

Unique. By subsequently filing a homestead declaration, the Rehes disputed Unique' s interest in

the property. NWC' s postjudgment motion to quash requested the very thing RCW 6. 32. 270

authorized: a supplemental proceeding to adjudicate the parties' respective interests in the 89th

Street Property. Because the Rehes are interested litigants whose names appear of record and

                                                         7
No. 45312 -6 -II

over whom the trial court had acquired personal jurisdiction by waiver, they were parties to the

proceeding. Thus, by authorizing consideration of NWC' s postjudgment motion, RCW 6. 32.270

gave the trial court authority to hear that motion under RAP 7.2( e). 3

       Any determination the trial court made on NWC' s motion to quash the Rehes'

declaration of homestead would not change Division One' s veil piercing ruling or the related

attorney fee requests. Thus, the trial court did not need appellate court permission to enter its

judgment   under   RAP 7. 2( e),   and the trial court did not err by ruling on NWC' s motion to quash

while the Division One appeal was pending.

                                              III. HOMESTEAD

       The Rehes further argue they are entitled to a homestead exemption because they are

owners of the 89th Street Property under the homestead statutes.4 Again, we disagree.

       We   review    statutory interpretation de   novo.   Dep' t   of Ecology   v.   Campbell & Gwinn,

LLC, 146 Wash. 2d 1, 9, 43 P.3d 4 ( 2002).       If a statute' s meaning is plain on its face, we must

follow that plain meaning. 146 Wash. 2d at 9 -10. A statute' s plain meaning is discerned from the

ordinary meaning of the language, the context of the statute, related provisions, and the statutory

3 The Rehes argue RCW 6. 32.270 did not give the trial court authority to consider NWC' s
motion to quash because RCW 6. 32. 270 gave the Rehes the right to demand a jury trial. But
RCW 6. 32.270 requires a jury trial only if a party requests it. The Rehes do not assert, and the
record does not support, that the Rehes requested a jury trial. Thus, because the Rehes did not
request a jury trial under RCW 6. 32.270, that statute could not prevent the trial court from
considering NWC' s motion to quash.

4 NWC argues for the first time on appeal that res judicata precludes the Rehes' homestead
defense. We do not consider this argument because we do not consider a res judicata claim
raised for the first time on appeal. Jumamil v. Lakeside Casino, LLC, 179 Wash. App. 665, 680,
319 P.3d 868 ( 2014).

                                                      8
No. 45312 -6 -II

scheme as a whole.         Udall    v.   T.D. Escrow Servs., Inc., 159 Wash. 2d 903, 909, 154 P.3d 882

 2007). If a term is defined in a statute, we use that definition. Pac. Indus. Inc. v. Singh, 120

Wn.     App.    1, 6, 86 P.3d 778 ( 2003). " Homestead and exemption laws are favored in law and are

to be   liberally   construed."     Sweet v. O' Leary, 88 Wash. App. 199, 204, 944 P.2d 414 ( 1997).

          Article 19,     section   1    of   the Washington State Constitution   states, "   The legislature shall

protect by law from forced sale a certain portion of the homestead and other property of all heads

of   families."     In 1895, the legislature responded to this directive by passing the homestead

statutes, former chapter 6. 12 RCW.5

          RCW 6. 13. 010 defines " homestead" and " owner ":

           1) The homestead consists of real or personal property that the owner uses as a
          residence. In the case of a dwelling house or mobile home, the homestead consists
          of the dwelling house or the mobile home in which the owner resides or intends to
          reside, with appurtenant buildings, and the land on which the same are situated and
          by which the same are surrounded .... Property included in the homestead must
          be actually intended or used as the principal home for the owner.
                      2) As used in this chapter, the term. "owner" includes but is not limited to
          a purchaser under a deed of trust, mortgage, or real estate contract.

 Emphasis       added).    RCW 6. 13. 070 states in part:

           T] he homestead is exempt from attachment and from execution or forced sale for
          the   debts of the   owner      up to [$ 125, 000].

 Emphasis       added); see    RCW 6. 13. 030. RCW 6. 13. 040( 1) states in part:

           A] homestead ...         is automatically    by the exemption ... from and after
                                                         protected

          the time the real or personal property is occupied as a principal residence by the
          owner or, if the homestead is unimproved or unproved land that is not yet occupied
          as a homestead, from and after the declaration or declarations required by the
          following subsections are filed for record.

5 Former chapter 6. 12 RCW was recodified as chapter 6. 13 RCW in 1981 ( LAws OF 1981, ch.
329, § 22). Former chapter 6. 12 RCW was amended numerous times prior to its 1981
recodification. These pre -1981 amendments do not affect our analysis.

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No. 45312 -6 -II

Under this plain language, only the owner of a property may claim a homestead exemption in

that property.

       To claim a homestead exemption in a property, the owner must either occupy the

property   as a principal residence or   intend to do   so.   RCW 6. 13. 040( 1).   Once the owner

occupies the property as a principal residence, a homestead exemption is established

automatically    without a   declaration. RCW 6. 13. 040( 1).     An owner who intends to occupy a

property as a principal residence in the future may file a declaration of homestead to establish the

exemption from the date the declaration is filed.6 See RCW 6. 13. 040( 1).

A.     Meaning     of the Term " Owner" in the Homestead Statutes

       The Rehes argue that under the homestead statutes, they need to show only possession

and use of a property to be the owner of that property. NWC argues the Rehes must show either '

a legal or an equitable interest in a property to be the owner of that property. We agree with

NWC.

        Prior to 1981, the homestead statutes used the term " claimant" instead of "owner."

Former RCW 6. 12. 040 ( 1977).       Four key cases from the Supreme Court interpreted the

homestead statutes as they existed prior to the 1981 recodification that added the term " owner."

6 The Rehes correctly assert that the lack of a valid homestead declaration does not prevent them
from having an automatic homestead exemption in the 89th Street Property. See RCW
6. 13. 040( 1). But because the trial court' s order quashing the Rehes' homestead declaration
concluded the Rehes had no homestead exemption in the 89th Street Property because they lack
a sufficient interest in the property, we interpret the trial court' s order quashing the Rehes'
homestead declaration as precluding the Rehes from claiming an automatic homestead
exemption in the 89th Street Property.

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No. 45312 -6 -II

           First, in    Downey     v.   Wilber,    a claimant owned a      dwelling   house   on   land he leased. 117
Wash. 660, 661, 202 P. 256 ( 1921).                  The claimant claimed a homestead exemption to the land

and   dwelling house. 117           Wash.     at   661.    The Court agreed, holding that title in fee to a property

is not necessary for a homestead exemption because the only interest required is " a sufficient

interest in     real   property to      entitle   him to   maintain a   home thereon."      117 Wash. at 661.

          Next, in Desmond v. Shotwell, a vendee purchased a property from a vendor pursuant to a

conditional contract under which the vendor kept title to the property until the vendee completed

payment.        142 Wash. 187, 188, 252 P. 692 ( 1927). The Court had ruled in a previous case that

such a contract deprived the vendee of any legal or equitable title in the property until he

completed payment.            142 Wash. at 188. Accordingly, the judgment creditor in Desmond argued

that because a vendee who had not completed payment had no legal or equitable title in the

property,       such a vendee could not claim a             homestead    exemption    in that property. 142 Wash. at

188. The court disagreed, holding that " nowhere in the statutes providing for homesteads is

there any requirement that the person asserting the right must own either a legal or an equitable

interest in the property          claimed."        142 Wash. at 188.

           In   Security   Savings & Loan Association v. Busch, the claimants attempted to claim a

homestead exemption to a property they had conveyed to another by quitclaim deed. 84 Wash. 2d
52, 52 -53, 55 -56, 523 P.2d 1188 ( 1974).                 The claimants argued that they did not need a legal title

to the   residence,      citing   Downy      and   Desmond. Busch, 84 Wash. 2d           at   55. The court disagreed,

holding that because the homestead declarants in both Downy and Desmond possessed a legal

interest in the property at issue, the language from Desmond suggesting that a legal or equitable

interest   was not required was            dicta. Busch, 84 Wash. 2d         at   55. The Court held that either a legal or

                                                                  11
No. 45312 -6 -II

equitable   interest is        required    because   absent such an         interest, " there   was nothing left to which [ a]

homestead        could ...      attach." 84 Wash. 2d at 56.

          In Felton       v.   Citizens Federal Savings &            Loan Association ofSeattle, a claimant borrowed

money from a loan association, secured by a deed of trust against the claimant' s property, and

later   claimed a      homestead     exemption       in the property. 101 Wash. 2d 416, 417, 679 P.2d 928 ( 1984).

The loan association argued the claimant could not claim a homestead exemption in the property

because he needed a legal interest in the property, rather than the equitable interest he had under

the deed    of   trust. 101 Wash. 2d at 419. Our Supreme Court rejected the loan association' s

argument, holding that where an equitable interest exists, such equitable interest is sufficient to

claim a homestead exemption in a property. The court stated:

           A] s   we stated (     in dicta) in Desmond, " nowhere in the [ homestead]                    statutes ...   is
          there any requirement that the person asserting the right must own either a legal or
          an equitable interest in the property claimed."       What was required by [ the
          homestead statutes] at all times relevant to this case was that homestead claimants
          live    on   the property      as   their home,      or   intend to do     so.   Thus, possession was ( and

          is) the key to the right to homestead.[7'
101 Wash. 2d        at   419 -20 ( some       alterations   in   original) ( internal citations omitted) (      quoting

Desmond, 142 Wash. at 188).

          Interpreting the plain meaning of the word " owner" in tandem with the case law, owners

must    have ownership           of an   interest " to   which      their homestead        could ..   attach."   Busch, 84

7 While Felton used the word " owner" and referenced the post -1981 amendment version of the
homestead statutes, it was actually interpreting the statute as it existed prior to 1981 because the
homestead declaration in that                 case was   filed   prior    to 1981. 101 Wash. 2d at 417 -18.

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No. 45312 -6 -II

Wn.2d at 56. Thus, to be an owner of a property one must have a legal or an equitable interest in
                     8
that property.

          Each of the four cases discussed above turned on whether the claimant had at least a legal

or an equitable interest in the property. As explained in Busch, the claimant in Desmond and the

claimant in Downey both had legal interests in the property allowing them to claim a homestead

exemption. See Busch, 84 Wash. 2d at 55 -56; Downey, 117 Wash. at 661; Desmond, 142 Wash. at

188. In Felton, the deed of trust provided the claimant with an equitable interest in the property

that allowed him to claim a homestead exemption. 101 Wash. 2d at 419 -20. But in Busch, the

claimants who sacrificed their legal and equitable interest in the property by quitclaiming it to

another could not claim a homestead exemption. 84 Wash. 2d at 56. In these prior cases, the court

explained that the legislature intended to limit the term owner to parties that own a legal or an

equitable   interest in the property " to       which   their homestead could ...   attach." 84 Wash. 2d at 56.

B.       Application to the Rehes' Homestead Exemption in the 89th Street Property

          The Rehes argue they have a legal or equitable interest in the 89th Street Property

because the Rehes' contributions and residence at the property give them a legal or equitable

8 The Ninth Circuit Court of Appeals cited Felton to hold that under the Washington homestead
statutes, the owner needs an equitable interest in the property only where the owner cannot show
occupancy       and use.    In   re   Wilson, 341 B.R. 21, 25 ( B. A.P. 9th Cir. 2006). For the reasons set out
in this opinion, we hold that this is an inaccurate interpretation of the homestead statutes. See In
re   Salvini'   s   Estate, 65 Wash. 2d 442, 446 -47, 397 P.2d 811 ( 1964) ( holding     that federal courts'
interpretation of state statutes do not bind Washington state courts).

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No. 45312 -6 -II

interest and because piercing of the corporate veil gave them Unique' s interest in the property.

We disagree. 9

        1.   The Rehes' Interest in the Property after Quieting Title to Unique.

       The Rehes argue they have an equitable interest in the 89th Street Property because they

possessed and used that property and because they, without consideration, transferred to Unique

the 89th Street land and the funds to build the house. We disagree because when the trial court

quieted title to the 89th Street Property in Unique in a ruling that was not appealed, it placed all

legal and equitable interest in the land in Unique.

       Our Supreme Court has held that a corporation' s shareholders have no property interest

in that corporation' s physical assets because the corporations are separate organizations with

different privileges and liabilities from the shareholders. Christensen v. Skagit County, 66
Wash. 2d 95, 97, 401 P.2d 335 ( 1965).    Moreover, living on a property, standing alone, does not

create a legal or equitable interest in the property sufficient to claim a homestead. See SSG

Corp. v. Cunningham, 74 Wash. App. 708, 714, 875 P.2d 16 ( 1994).

       Here, the trial court quieted title to the 89th Street Property in Unique, and the Rehes did

not challenge this determination. The Rehes lost any interest in the land and money they

contributed to Unique when they contributed it. See Christensen, 66 Wash. 2d at 97. The mere fact

9 NWC argues the Rehes' corporate veil argument violates judicial estoppel by attempting to
pierce the corporate veil for the Rehes' benefit, when the Rehes argued at trial that NWC could
not pierce the corporate veil for NWC' s benefit. But "judicial estoppel may be applied only in
the event that a litigant' s prior inconsistent position benefited the litigant or was accepted by the
court."  Taylor v. Bell, _ Wn. App. _, 340 P.3d 951, 958 ( 2014). Because Division One
reversed the trial court and held that the veil could be pierced for NWC' s benefit, the Rehes'
prior position that the veil could not be pierced did not benefit the Rehes and was not accepted
by the court. Thus, judicial estoppel does not apply.

                                                  14
No. 45312 -6 -II

they live on the property does not give them a legal or equitable interest in the property to claim

a homestead exemption. See SSG Corp., 74 Wash. App. at 714. Thus, we hold that the trial

court' s unchallenged ruling quieting title in Unique gave all legal and equitable interest in the

89th Street Property to Unique, and that this deprived all other parties, including the Rehes, of

any legal or equitable interest in the 89th Street Property.

          2.    The Rehes' Interest in the 89th Street Property after Corporate Veil Piercing

          The Rehes argue that because the corporate veil was pierced, the Rehes and Unique are

the same legal entity. Thus, the Rehes argue that because Unique is an owner of the 89th Street

Property, the Rehes are also owners of the 89th Street Property, thus allowing the Rehes to claim

a homestead exemption in Unique' s property. We disagree.

          Veil piercing is an equitable remedy imposed to rectify an abuse of the corporate

privilege.      Columbia Asset Recovery Grp., LLC v. Kelly, 177 Wash. App. 475, 488, 312 P.3d 687

 2013).    Where the corporate veil can be pierced, it can be pierced " not for all purposes, but only

for the purpose of adjusting the allocation of loss between the particular creditor and a person

who   has,     under all   the   circumstances, misused'   the   corporate   form." EDWARD BRODSKY AND M.

PATRICIA ADAMSKI, Law of Corporate Officers and Directors: Rights, Duties and Liabilities

1414 ( 2011) (     citation omitted);    see Garvin v. Matthews, 193 Wash. 152, 155 -57, 74 P.2d 990

 1938); see also Rena -Ware Distrib., Inc. v. State, 77 Wash. 2d 514, 518, 463 P.2d 622 ( 1970).

Even where the veil can be pierced for one purpose, we continue to honor the corporation' s

separate identity except where doing so would perpetuate a fraud or injustice. See Garvin, 193

Wash. at 155 -57; Wash. Sav -Mor Oil Co. v. Tax Comm' n, 58 Wash. 2d 518, 523, 364 P.2d 440

                                                            15
No. 45312 -6 -II

 1961); Morgan     v.   Burks, 93 Wash. 2d 580, 587, 611 P.2d 751 ( 1980); Rena -Ware Distributors,

Inc., 77Wn.2dat518.

       Here, Division One held that the corporate veil could be pierced, allowing the Rehes to

be held liable for the debts of Unique. This does not mean, however, that the corporate veil can

be pierced for the purpose of allowing the Rehes to claim a homestead exemption in Unique' s

property. Allowing the Rehes to claim a homestead in Unique' s property would neither serve the

purpose of adjusting the allocation of loss between the particular creditor (NWC) and the persons

who have misused the corporate form (the Rehes) nor rectify the Rehes' abuse of the corporate

privilege. In fact, it would do the opposite and reward the Rehes' misuse of the corporate form

by allowing them to use corporate veil piercing to protect the corporate assets.

       Allowing the Rehes to have a homestead exemption would neither serve the purpose of

adjusting the allocation of loss between the creditor and the persons who misused the corporate

form nor rectify an abuse of the corporate privilege. Thus, the corporate veil piercing does not

allow the Rehes to claim a homestead exemption in Unique' s property.

         IV. CROSS- APPEAL: THE TRIAL COURT' S DENIAL OF ATTORNEY FEES TO NWC

        On its cross -appeal, NWC argues the trial court erred by denying it reasonable attorney

fees and costs for litigating its motion to quash. NWC argues it is entitled to reasonable attorney

fees and costs as the prevailing party because litigating its motion to quash was a " collection

proceeding" that fell within the contract' s attorney fees and costs provision. We agree.

        We review de novo whether a statute authorizes attorney fees and costs. Niccum v.

Enquist, 175 Wash. 2d 441, 446, 286 P.3d 966 ( 2012). RCW 4. 84. 330 provides that where a

contract or lease authorizes attorney fees and costs, the prevailing party is entitled to fees and

                                                    16
No. 45312 -6 -II

costs. An award of attorney fees and costs under RCW 4. 84.330 is mandatory, with no

discretion except as to the amount. Singleton v. Frost, 108 Wash. 2d 723, 729, 742 P.2d 1224

 1987);   Kofmehl v. Steelman, 80 Wash. App. 279, 286, 908 P.2d 391 ( 1996).

          Here, the contract' s attorney fees and costs provision stated:

          If the contract price is not paid as agreed and if collection proceedings or a suit is
          started,   then [ Unique]   agree[ s]   to pay   all costs   incurred
                                                                     by [NWC], including all
          costs of suit and a reasonable attorneys' fee as determined by the court.

CPat302.

          The contract price was not paid, and executing against the 89th Street Property to collect

the contract price required litigating the Rehes' homestead exemption in the 89th Street Property.

Thus, litigating NWC' s motion to quash was part of the " collection proceedings" that fell within

the contract' s attorney fees and costs provision. Because the corporate veil has been pierced, it is

irrelevant whether Unique or the Rehes signed the contract because Unique and the Rehes are

treated as a single legal entity for the purpose of adjusting the allocation of loss between NWC

and the Rehes. Thus, because NWC, is the prevailing party, it is entitled to attorney fees under

this contractual provision. RCW 4. 84. 330. Accordingly, we reverse the trial court' s ruling on

attorney fees and remand for a determination of attorney fees consistent with this opinion.

                                       ATTORNEY FEES ON APPEAL

          Both parties request reasonable attorney fees on appeal pursuant to the contract. A

contract provision that authorizes attorney fees below authorizes attorney fees on appeal.

  Where a statute allows an award of attorney fees to the prevailing party at trial, the appellate

court   has inherent authority to     make such an award on appeal. "'            Colwell v. Etzell, 119 Wash. App.
432, 442 -43, 81 P.3d 895 ( 2003) (      quoting Standing Rock Homeowners Ass 'n v. Misich, 106 Wash.
17
No. 45312 -6 -II

App.   231, 247, 23 P.3d 520 ( 2001)).   Because NWC prevails on appeal, we grant NWC attorney

fees on appeal and deny the Rehes' attorney fees on appeal.

         We affirm the trial court' s order quashing the Rehes' homestead declaration, but reverse

the trial court' s ruling on attorney fees and remand for a determination of NWC' s reasonable

attorney fees consistent with this opinion. We award NWC reasonable attorney fees on appeal.

 We concur:

                         A,c.   J,
  4
 B;           A. C. J.

 Sutton, J.

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