Court Opinion

ID: 9577110
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:31:50.792601+00
Date Added: 2024-06-11T13:19:59.880936
License: Public Domain

Becker, J.
(dissenting) — The majority concludes the subcontractor, Expert Drywall, lost its statutory right to attorney fees by engaging in arbitration. I respectfully dissent.
To summarize: Expert Drywall believed Ellis-Don paid less than agreed for Expert Drywall’s work on the public project. The statute, designed to protect the rights of a subcontractor like Expert Drywall, gave Expert Drywall a lien against the statutory retainage. Expert Drywall perfected the lien as the statute requires, but also agreed beforehand to arbitrate its underlying dispute with Ellis-Don. Had there been no arbitration agreement, Expert Drywall’s timely suit against the retainage could have proceeded in superior court. We must assume the court, like the arbitrator, would have found that Ellis-Don substantially shorted Expert Drywall. As a prevailing claimant, Expert Drywall would have been entitled to attorney fees. Expert Drywall’s appeal asks us to explain why its voluntary agreement to arbitrate the dispute has now led to the opposite result.
The majority first explains that the arbitrator could not have awarded attorney fees since the public owner was not joined as a party to the arbitration.25 This seems to me an unnecessary insistence on a formality. The public owner—here, the District—is merely a stakeholder with no interest in the dispute arising under the contract between Expert Drywall and Ellis-Don except to release funds from the retainage if Expert Drywall prevails on its claim and Ellis-Don does not pay it. A public owner, if a nonsignatory to the arbitration agreement, cannot be com*896pelled to arbitrate.26 With nothing to gain or lose in the proceeding, the public owner is unlikely to participate in the arbitration voluntarily. To require the presence of the owner as a precondition for an award of attorney fees under the statute makes it unlikely that arbitration can be used to resolve lien claims against statutory retainage.
In my view, since parties may submit "any controversy” to arbitration,27 we should not foreclose the possibility that an arbitration can serve as the functional equivalent of an "action brought to enforce the lien.”28 An arbitrator should be authorized to make an award of attorney fees even in cases where the owner is not joined as a party. A judgment entered in the subcontractor’s favor on such an arbitration award would not, of course, bind the public owner to release the retainage unless the public owner was a party to the arbitration. But in resolving the underlying dispute it would establish the subcontractor as the prevailing party and fix the amount of attorney fees owed, thus making it unnecessary for the superior court to re-adjudicate those issues in a companion superior court suit.
The majority also explains that Expert Drywall is not entitled to attorney fees because it did not file a notice of claim before the arbitration proceeding.29 The majority assumes the lien did not exist until Expert Drywall filed its notice of claim,30 but this issue has not been briefed. Arguably, the lien arose as soon as the work was done. If so, fees incurred during the arbitration were for the purpose of enforcing the lien even though the other steps necessary to perfect the lien came later.
Expert Drywall did request attorney fees pursuant to *897RCW 60.28 in its prehearing memorandum to the arbitrator. Ellis-Don has not argued this was insufficient notice of the claim for attorney fees, or that the lack of a formal notice prejudiced Ellis-Don’s defense. Institution of both arbitration and litigation is the procedure recommended by the State Bar Association’s Deskbook for aggrieved parties who find themselves in "this seemingly contradictory morass of procedural requirements.”31 see no reason why Expert Drywall should necessarily be held to have waived a right to attorney fees, otherwise available, merely because the arbitration preceded the litigation.
The trial court dismissed Expert Drywall’s lien foreclosure action on summary judgment on the basis that "all disputes between the parties were submitted to the arbitrator for resolution.”32 If, as the majority holds, Expert Drywall did not submit to the arbitrator its claim against the retainage, the trial court’s basis for dismissing Expert Drywall’s lien foreclosure action was obviously incorrect. The majority explains the dismissal was nonetheless proper because "Ellis-Don paid the amount of the award. Therefore, Expert had no claim against the statutory retainage.”33 But Expert Drywall’s entitlement to attorney fees should not depend on the speed with which Ellis-Don paid the claim after it was adjudicated. To secure an award of attorney fees under the statute, it is not necessary that the claim actually be satisfied out of the retainage; it is only necessary that the claimant prevail against the contractor. Also, because Ellis-Don’s haste in paying the anticipated arbitration award appears to have been prompted by the pending lien foreclosure suit, it is not unreasonable to view fees incurred in bringing that suit as an expense of enforcing the lien.
The majority finally explains that subcontractors can protect themselves by negotiating around the procedural *898difficulties.34 As a practical matter this is probably the best explanation. In hindsight, Expert Drywall should have refused to arbitrate unless Ellis-Don agreed in advance to an attorney fee provision equivalent to what the statute provides. But this answer is not entirely satisfactory either. The right to attorney fees is provided by statute; it should not be subject to negotiation. The "contradictory morass of procedural requirements” became in this case a trap for the unwary.
At a minimum, I would reverse the dismissal of the lien foreclosure action and remand for Expert Drywall to have its day in court. I would also authorize the trial court to award fees on appeal to the extent Expert Drywall ultimately is able to establish that it incurred attorney fees in its efforts to enforce the lien.
Review denied at 134 Wn.2d 1011 (1988).

Majority at 890.

See McClure v. Davis Wright Tremaine, 77 Wn. App. 312, 315 n.1, 890 P.2d 466 (1995).

RCW 7.04.010.

RCW 60.28.030.

Majority at 893.

Majority at 894.

Washington State Bar Association, Alternate Dispute Resolution Deskbook: Arbitration and Mediation in Washington, § 3.3(3), at 3-9 (2d ed. 1995).

 Order of Sept. 21, 1995.

Majority at 891.

Majority at 894.