Court Opinion

ID: 4344564
Source: CourtListenerOpinion
Date Created: 2018-11-26 20:44:11.663135+00
Date Added: 2024-06-11T14:49:14.332632
License: Public Domain

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

 KAES ENTERPRISES, LLC,
                                                      No. 77288-1-1
                                 Appellant,
                                                      DIVISION ONE
                 V.
                                                      UNPUBLISHED OPINION
 KOPPENBERG ENTEPRISES, INC, a
 Washington corporation,

                                  Respondent.         FILED: November 26, 2018

       CHUN, J. — Koppenberg Enterprises, Inc.(Koppenberg) held several

subcontracts to erect columbarial at national cemeteries for interment of United

States veterans. Kaes Enterprises, LLC (Kaes) contracted to supply and ship

thousands of marble memorial plaques (niche covers) to various cemeteries for

Koppenberg employees to install on the columbaria. Government inspectors

visited the sites and rejected many of the installed niche covers as flawed. The

contracts obligated Kaes to replace rejected niche covers. As a result, Kaes

replaced thousands of niche covers at significant cost. Kaes eventually brought

suit against Koppenberg for breach of contract, arguing the replacement niche

covers were secondary sales requiring payment from Koppenberg. After a bench

trial, the trial court entered judgment in favor of Koppenberg and we affirm.

    1 Columbaria are precast concrete units erected in cemeteries and churches to inter urns.
Each columbarium has multiple small compartments for urns. Each compartment has a marble
plaque or niche cover.
No. 77288-1-1/2

                                              I.
                                         BACKGROUND
        Christopher (Chris)2 Kaes served as a federal contracting officer with the

Air Force. After retiring from the Air Force, Chris worked in federal contracting

and procurement for other organizations. Chris subsequently formed his own

venture, Kaes Enterprises, LLC.

        In December 2010, Kaes entered a teaming agreement with Levantine

USA, Inc.(Levantine), a large supplier of natural stone, to bid on federal

solicitations for niche covers from the Veterans Administration (VA). Kaes

contracted with an Alabama marble supplier to cut the niche covers. Levantine

prepared the pricing and coordinated shipping from the quarry in Alabama to the

project sites.

        Koppenberg held VA subcontracts to erect columbaria at veteran

memorials in national cemeteries. Owner Kim Koppenberg (Kim) had identified

Levantine as a potential supplier of marble niche fronts. Austin Lowrie, the

commercial division manager at Levantine, informed Koppenberg all VA projects

were bid under the teaming agreement and connected Chris and Kim.

        For federal contracts like these veteran memorial projects, the government

contracts with a prime contractor. The prime contractor then enters into

subcontracts for different aspects of the projects, such as Koppenberg's

installation of columbaria. Usually, Memorial Program Services(MPS)3 supplied

    2 This opinion refers to the individuals by their first names to distinguish them from their
corporations. We intend no disrespect.
    3 MPS is a government agency that purchases materials directly from suppliers.

                                                  2
No. 77288-1-1/3

Koppenberg with niche covers for its columbaria projects.4 At the time Kim and

Chris met, however, Koppenberg had bid on three contracts for the National

Cemetery Administration (NCA),5 requiring subcontractor-supplied niche covers.

Kim and Chris considered this an opportunity for Kaes to begin supplying niche

covers for government projects.

       In November 2010, Koppenberg received the subcontracts to install

columbaria for veteran memorials at Bakersfield National Cemetery, Eagle Point

National Cemetery, and Fort Rosecrans National Cemetery. The subcontracts

required Koppenberg to provide marble niche covers. The project requirements

specified size and color and directed the subcontractor to "[u]nload, inspect,

store, and protect niche covers after delivery to the job site and prior to erection."

       Koppenberg subsequently submitted purchase orders for Kaes to provide

marble niche covers for the three projects. The purchase orders specified,

                                        4" thick as per approved samples and
"marble niche fronts 11-1/4" x 15-3/4" x/
                                        3

specifications for this project. All materials that are supplied and rejected must

be replaced unless damaged by [sic] after arrival onsite."

       Kaes first supplied Eagle Point. Kaes received the Eagle Point purchase

order in November 2010. Through Levantina, Kaes obtained the niche covers

from a quarry in Alabama and drop shipped them to the cemetery site for

installation. Kaes used specially designed foam-lined crates for shipping, with

the covers protected by thick polyplastic individual sleeves. The shipment in

   4 Kaeshad wanted to become involved as a direct supplier to the government through MPS.
   5 NCA is a department of the VA.

                                            3
No. 77288-1-1/4

fulfillment of the purchase order arrived at Eagle Point in January 2011 and

Koppenberg paid in full by March 3, 2011. Kaes delivered niche covers to

Bakersfield on March 24, 2011, with payment by Koppenberg on June 13, 2011.

Fort Rosecrans received deliveries in satisfaction of the purchase order in April,

May, and August, 2011. Koppenberg paid Kaes for these shipments in August

and December 2011.

      At the time of delivery, Koppenberg employees visually inspected the

crates for shipping damage and stored them unopened until installation. At

installation, Koppenberg employees unpacked the crates, set the covers in the

niches, and screwed each one into place.

      After installation, government employees inspected the niche covers for

compliance with the specifications. On May 11, 2011, Koppenberg forwarded an

email from the VA to Kaes explaining this process: "Typically we have the

contractor install the covers they feel meet spec, then MPS comes out to

inspect." A follow-up email warned, "[D]on't be surprised if they reject 25% or

more."

      On May 10 and 11, 2011, an MPS employee visited Bakersfield to inspect

the installed niche covers. Inspection occurred at Eagle Point on May 12, 2011.

Eagle Point and Bakersfield both had rejection rates of 25 to 30 percent. At

Eagle Point, the inspector rejected 777 of the 3,100 installed niche covers.

      After the Eagle Point inspection, Lowrie from Levantina met with the MPS

inspector to discuss the high rate of rejections. The inspector agreed to select

units to serve as examples for the quarry to use in quality control. Lowrie wrote

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No. 77288-1-1/5

an email for Koppenberg to forward to the Eagle Point and Bakersfield prime

contractors.6 The email promised changes to production process, quality control

inspections, and shipping. The email also assured the prime contractors the

supplier and quarry would replace defective units at no cost.

        Koppenberg began requesting replacement niche covers, which Kaes

supplied in large quantities. In June 2011, Koppenberg requested 750 to 850

replacement niche covers for Bakersfield, reflecting a 25 to 35 percent rejection

rate. MPS conducted several rounds of inspections of the various sites,

continuing to reject installed niche covers. This resulted in multiple shipments of

replacements. Bakersfield received replacements in July and early September

2011. Eagle Point received 800 replacements on June 15, 2011, and 600 more

replacements in September 2011. Fort Rosecrans received replacements in

August 2011.

        In late September 2011, Kaes became extremely concerned about

repeated inspections and seemingly arbitrary standards for evaluation of the

niche covers. Kaes demanded written explanations for each individual rejected

niche cover and contemplated filing a protest or claim against the VA. Kaes sent

formal letters to Koppenberg with its demands, stating,"KAES finds the large

number of undocumented, unspecified, niches being rejected for this project, with

oral notification only, unacceptable." Kaes further demanded,"For the end user

to examine and then consider any niche as rejected, they must provide, and we

    6 Lowrie sent this email to Kim without including Chris on the message. The trial court found
Lowrie to be Kaes's agent with respect to these projects. Kaes does not assign error to this
finding, which results in a verity on appeal. See In re Marriage of Akon, 160 Wash. App. 48, 57, 248
P.3d 94(2011).

                                               5
No. 77288-1-1/6

require, specific, written documentation for each and every individual niche

rejected for purportedly failing to meet specifications." Kaes alerted Koppenberg

it would back-charge for returned niche covers meeting specifications and

without documentation of the reasons for rejection.

       Koppenberg passed this message to the prime contractors for the

projects. But by November 4, 2011, Kaes had not received any specific

documentation for individual rejected niche covers. The returned, rejected niche

covers arrived at the quarry with serious damage because Koppenberg shipped

them without their original packaging.

       Despite lack of compliance with the demand for detailed documentation of

individual rejections, Kaes continued supplying replacement niche covers. Eagle

Point received replacements in November and December 2011. In total, Kaes

supplied approximately 8,800 replacement niche covers.

       In September 2011, Kaes attempted to solicit help from Koppenberg and

the prime contractors to protest the repeated inspections and rejections by MPS.

Koppenberg appeared sympathetic with Kaes's complaints, but never pursued a

grievance or claim. Instead, Koppenberg signed unconditional releases to close

the projects.

       On August 11, 2015, Kaes brought a breach of contract claim against

Koppenberg. Kaes argued Koppenberg accepted and used the goods, requiring

payment for all replacement niche covers. After a bench trial, the trial court

entered judgment for Koppenberg.

       Kaes appeals.

                                         6
No. 77288-1-1/7

                                   DISCUSSION
       A. Affirmative Defenses

       Kaes argues the trial court erred by allowing Koppenberg to argue the

unpled affirmative defenses of rejection and revocation. The trial court

determined Koppenberg's answer to the complaint put "the issues of acceptance,

rejection and revocation of acceptance before the court." Additionally, the trial

court concluded Kaes did not allege surprise or prejudice due to Koppenberg's

failure to formally assert the affirmative defenses. While we disagree in part with

the trial court's reasoning, we conclude Kaes effectively waived any objection to

Koppenberg's failure to affirmatively plead defense.

       Affirmative defenses must be specifically pleaded. CR 8(c). This applies

to any "matter constituting an avoidance or affirmative defense." CR 8(c).

Courts consider revocation of acceptance as an affirmative defense that must be

set forth in the pleadings. Allis-Chalmers Corn. v. Sygitowicz, 18 Wash. App. 658,

660, 571 P.2d 224(1977).

       Generally, affirmative defenses are waived unless they are affirmatively

pleaded, asserted under CR 12(b), or tried by the express or implied consent of

the parties. Bickford v. City of Seattle, 104 Wash. App. 809, 813, 17 P.3d 1240

(2001). However,"the rule's policy is to avoid surprise and affirmative pleading is

not always required." Bickford, 104 Wash. App. at 813. Thus, a court considers

noncompliance harmless when the failure to plead an affirmative defense does

not affect the substantial rights of the parties. Hogan v. Sacred Heart Medical

Center, 101 Wash. App. 43, 54-55, 2 P.3d 968(2000). Additionally, "objection to a

                                         7
No. 77288-1-1/8

failure to comply with the rule is waived where there is written and oral argument

to the court without objection on the legal issues raised in connection with the

defense." Mahoney v. Tingley, 85 Wash. 2d 95, 100, 529 P.2d 1068 (1975).

       An appellate court reviews trial court decisions on the application of the

civil rules for abuse of discretion. Sprague v. Sysco Corp., 97 Wash. App. 169,

171, 982 P.2d 1202(1999).

       Kaes's complaint alleged,"Koppenberg has accepted and/or used all

products from Plaintiff Kaes." The trial court concluded Koppenberg's denial of

this allegation effectively raised the issue of rejection. But denial of an allegation

does not amount to affirmative pleading. Koppenberg specifically enumerated

several affirmative defenses in its answer to the complaint, but omitted any

mention of revocation of acceptance.

       Despite Koppenberg's failure to plead the issue, rejection of the niche

covers occupied a significant portion of the trial testimony and evidence. Both

parties introduced evidence of Koppenberg's receipt of the product, installation,

rejection, and requests for replacement niche covers. Therefore, the parties

argued the issue of Koppenberg's rejection of the niche covers without objection.

This constitutes waiver of objection to the failure to comply with CR 8(c). See

Mahoney, 85 Wash. 2d at 100. Furthermore, given the significant evidence from

both parties on the issue of rejection, Kaes cannot demonstrate surprise.

                                          8
No. 77288-1-1/9

Noncompliance with CR 8(c) was of no consequence.7 The trial court did not

abuse its discretion by considering the unpled affirmative defense.

        B. Contract Interpretation

        Kaes assigns errors to many of the trial court's conclusions of law

pertaining to interpretation of the contracts. Where the trial court has weighed

the evidence, the reviewing court's role is limited to determining whether

substantial evidence supports the findings of fact, and whether those findings in

turn support the trial court's conclusions of law. Ford Motor Co. v. City of Seattle,

Exec. Serv. Dep't., 160 Wash. 2d 32, 56, 156 P.3d 185(2007). "Substantial

evidence to support a finding of fact exists where there is sufficient evidence in

the record 'to persuade a rational, fair-minded person of the truth of the finding."

Hegwine v. Longview Fibre Co., Inc., 162 Wash. 2d 340, 353, 172 P.3d 688(2007)

(quoting In re Estate of Jones, 152 Wash. 2d 1, 8, 93 P.3d 147 (2004)). An

appellate court will not substitute its judgment for that of the trial court, reweigh

the evidence, or adjudge witness credibility. In re Marriage of Rockwell, 141 Wn.

App. 235, 242, 170 P.3d 572(2007). Questions of law are reviewed de novo.

Heqwine, 162 Wash. 2d at 353.

            1. Incomplete Record

        As a threshold issue, we address the incomplete record before us on

review. Kaes assigns error to the trial court's conclusions of law but only

    7 Additionally, "[w]hen issues that are not raised by the pleadings are tried by express or
implied consent of the parties, they will be treated in all respects as if they had been raised in the
pleadings." Dewey v. Tacoma Sch. Dist. No. 10, 95 Wash. App. 18, 26, 974 P.2d 847(1999). On
appeal, an appellate court can deem the pleadings to have been amended to conform to the
proof. See Maziarski v. Blair, 83 Wash. App. 835, 839, 924 P.2d 409 (1996).

                                                  9
No. 77288-1-1/10

designated a partial record, omitting the verbatim reports of proceedings of the

direct testimony of Kim and Carlton Fuqua, a Koppenberg employee. This

impedes our review of Kaes's assignments of error.

       "The party presenting an issue for review has the burden of providing an

adequate record to establish such error." State v. Sisouvanh, 175 Wash. 2d 607,

619, 290 P.3d 942(2012); see RAP 9.2(b). An incomplete record compromises

the ability of the appellate court to review the trial court's findings of fact for

substantial evidence. In re Parentage and Custody of A.F.J., 161 Wash. App. 803,

806 n.2, 260 P.3d 889(2011). Therefore, in such instances, we treat the findings

as verities on appeal. A.F.J., 161 Wash. App. 806 n.2.

       Kaes challenges the trial court's findings of fact and conclusions of law,

but failed to provide complete verbatim reports of proceedings. We cannot fairly

evaluate the findings based on the record before the trial court. Therefore, we

consider the court's findings of fact as verities.

           2. Uniform Commercial Code(UCC)and Parol Evidence

       Kaes contends the trial court erred by employing usage of trade, course of

performance, and the prime and subcontractor contracts to interpret the

purchase orders. Kaes asserts the purchase orders constituted contracts to

provide goods governed by the UCC. It contends the installation of the niche

covers constituted acceptance, and that Koppenberg improperly rejected those

goods thereafter. Accordingly, Kaes claims Koppenberg must pay for all the

niche covers in keeping with the terms of the contract. Koppenberg argues parol

                                           10
No. 77288-1-1/11

evidence demonstrates the intention to inspect after installation and for Kaes to

supply replacement niche covers without additional charge.

        Under the UCC,the terms of a contract intended by the parties as a final

expression of their agreement may not be contradicted by evidence of prior

agreement or of a contemporaneous oral agreement. RCW 62A.2-202(a).

However, the contract may be "explained or supplemented" by course of

performance,8 usage of trade, and evidence of consistent additional terms.9

RCW 62A.2-202(a),(b). Course of performance and usage of trade are relevant

"in ascertaining the meaning of the parties' agreement, may give particular

meaning to specific terms of the agreement, and may supplement or qualify the

terms of the agreement." RCW 62A.1-303(d). The terms of an agreement and

course of performance or usage of trade must be construed consistently

whenever reasonable. RCW 62A.2-103(e).

         Kaes contends the trial court should have followed Cervitor Kitchens, Inc.

v. Chapman,82 Wn.2d 673, 513 P.2d 25(1973), and found Koppenberg's

installation of the niche covers constituted acceptance of the products under the

UCC. In that case, Cervitor Kitchens sued to recover the sale price of four

kitchen units. Cervitor, 82 Wash. 2d at 674. The company shipped the units, which

    8 A course of performance "is a sequence of conduct between the parties to a particular
transaction that exists if: (1)The agreement of the parties with respect to the transaction involves
repeated occasions for performance by a party; and (2)The other party, with knowledge of the
nature of the performance and opportunity for objection to it, accepts the performance or
acquiesces in it without objection." RCW 62A.1-303(a).
    9 Usage of trade "is any practice or method of dealing having such regularity of observance in
a place, vocation, or trade as to justify an expectation that it will be observed with respect to the
transaction in question." RCW 62A.1-303(c). Evidence of relevant usage of trade offered by one
party is not admissible unless the party has given sufficient notice to prevent unfair surprise.
RCW 62A.1-303(g).

                                                 11
No. 77288-1-1/12

the contractor did not inspect upon delivery. Cervitor, 82 Wash. 2d at 675. After

installation of the kitchen units, the contractor attempted to reject the units, citing

poor quality and failure to comply with specifications. Cervitor, 82 Wash. 2d at 675.

The Washington Supreme Court determined installation of the kitchen units was

inconsistent with continuing ownership of the seller and amounted to acceptance

of the products despite any defects. 82 Wash. 2d at 676-77. Like Cervitor, Kaes

claims Koppenberg's installation of the niche covers was inconsistent with Kaes's

continuing ownership of the product and reflected acceptance of the goods under

the contract.

       The trial court determined Cervitor did not apply because of the additional

requirements established by the terms of the prime and subcontracts, usage of

trade, and course of performance between the parties. The trial court properly

considered this evidence under RCW 62A.1-202. As a result of the parol

evidence, the trial court determined the purchase orders legally entitled the VA,

prime contractors, and Koppenberg to inspect and reject or revoke acceptance of

nonconforming niche covers until final inspection. The purchase orders required

Kaes to replace the nonconforming niche covers without charge, regardless of

installation.

       The trial court's findings of fact, which are verities in this appeal, illustrate

incorporation of the VA contract terms, usage of trade within the industry, and a

clear course of performance between Kaes and Koppenberg to support this

interpretation of the contracts. The parol evidence demonstrates Kaes was

aware of the typical process of installation followed by inspection and possible

                                           12
No. 77288-1-1/13

rejection of the niche covers. In addition, Kaes repeatedly provided replacement

covers long after delivery of the original shipments.

        The trial court found the language in the purchase orders bound Kaes to

the specification of the VA contracts. The VA contracts with prime contractors

and subcontractors provided terms and specifications for marble used in the

projects. The purchase orders' reference to "approved samples and

specifications for this project" referred to the specification established by the VA

contracts. These verities on appeal support the trial court's conclusion of law

that the purchase orders required Kaes to replace all non-conforming niche

covers after installation and inspection.10

        The trial court also included extensive findings of fact about usage of trade

for military cemetery construction projects. These findings detailed the niche

cover process from arrival and crate inspection, through installation, VA

inspection, rejection, and replacement, until final inspection at the end of the

project. The findings conclude Koppenberg and Kaes knew of and followed the

usage of trade in delivery, handling, installation, and inspection of the marble

niche covers.11 This usage of trade then properly informed the trial court's

interpretation of the purchase orders.

        As for course of performance, the trial court described the working

relationship between Kaes and Koppenberg throughout fulfillment of the

    10 The trial court provided few findings on the incorporation of the federal prime and
subcontract terms in the purchase orders. Nonetheless, the extensive findings about usage of
trade and course of performance provide ample support for the trial court's ultimate conclusion
that the purchase orders required Kaes to replace all rejected niche covers at no additional cost.
    11 The trial court further determined the usage of trade caused Kaes no unfair surprise or
prejudice. Like the other findings of fact, this is a verity on appeal.

                                                13
No. 77288-1-1/14

purchase orders.12 The court found Kaes knew Koppenberg employees

inspected just the crates on arrival, leaving the niche covers securely packaged

inside. At the time of installation, Koppenberg employees uncrated and screwed

the niche covers in place. After installation, VA inspectors evaluated and

rejected large numbers of niche covers as non-conforming. Kaes then replaced

the rejected niche covers. Kaes and Lowrie worked to improve quality and

coordinate delivery of the replacement niche covers. Between the three projects,

Kaes replaced over 8,000 niche covers.

        In light of these findings, the trial court determined the purchase orders

entitled the VA, prime contractors, and Koppenberg to inspect and reject all non-

conforming niche covers until final inspection by the VA. The purchase orders

also required Kaes to replace rejected niche covers without charge, regardless of

installation or payment. The course of performance between the parties shows

    12 Although Kaes provided incomplete verbatim reports of proceedings, Kaes submitted
hundreds of pages of exhibits. These exhibits support the course of performance described by
the trial court. As early as May 2, 2011, Koppenberg informed Kaes that inspection did not occur
upon arrival of the shipment, but waited until setting of the niche covers. "As far as the quality,
we really cant [sic] tell until we break it open and start setting them." Soon after, Kaes received
the email describing the process in which the contractor installs the covers and then MPS
inspects. An MPS inspector confirmed this process by inspecting and reporting only on the
installed niche covers.
          Given the timing of delivery, inspection, and rejection, Kaes knew rejection did not occur
immediately upon arrival, yet agreed to replace the rejected niche covers when MPS rejected
them after installation. The original delivery of niche covers arrived in Bakersfield in March 2011.
The first inspection and associated rejections occurred in May 2011. Kaes shipped replacement
niche covers in July and September 2011. Similarly, in Eagle Point, the original delivery of niche
covers occurred in January 2011 with the first inspection and rejection occurring in May 2011.
Kaes shipped replacement covers in June, August, November, and December 2011. Finally, Fort
Rosecrans received its original shipments of niche covers in April and August 2011. Inspection
occurred thereafter with replacements coming in August and October 2011.
          Thus, beginning in May 2011, Kaes was aware government inspectors rejected marble
niche covers after installation. From May to September 2011, Kaes supplied replacements for
those rejected covers and worked to improve the quality of the product to reduce the number of
rejections. Thus, the record demonstrates Kaes's commitment to fulfilling the requests for quality
replacements of rejected niche covers under the terms of the contracts.

                                                14
No. 77288-1-1/15

Kaes's intention to work with Koppenberg to provide suitable niche covers to

replace those rejected by MPS after installation. This course of performance

properly served as parol evidence for the parties' contractual relationship. Based

on this evidence, Kaes provided the niche covers, expecting installation and

subsequent inspection. Kaes also agreed to replace the rejections free of

charge. These findings support the trial court's legal conclusion that Koppenberg

complied with the rejection process established by course of performance and

usage of trade, resulting in no legal obligation to pay Kaes the replacement niche

covers.

       C. Documentation of Rejections

       Kaes contends the trial court failed to consider its demand for detailed

written rejection of each niche cover under RCW 62A.2-605. Koppenberg argues

Kaes waived this requirement. We agree.

       Under the UCC,"[t]he buyer's failure to state in connection with rejection a

particular defect which is ascertainable by reasonable inspection precludes him

or her from relying on the unstated defect to justify rejection or to establish

breach." RCW 62A.2-605(1). In addition, "a course of performance is relevant to

show a waiver or modification of any term inconsistent with the course of

performance." RCW 62A.1-303(f).

       The trial court concluded Kaes had waived the written notification of non-

conformity because it did not raise the issue until several months after a

significant portion of the niche covers had been inspected and rejected. The trial

court's findings on the parties' course of performance supports this conclusion.

                                          15
No. 77288-1-1/16

Kaes received notification of the first rejections and need to replace niche covers

in May 2011 but did not begin requesting detailed written documentation until late

September 2011. By the time of the request, Kaes had already shipped

approximately 6,300 replacement niche covers, representing the majority of the

8,200 replacements provided.

       Given this history, the trial court properly considered Kaes's failure to

request written rejection until after shipping thousands of replacement niche

covers as evidence of the parties' course of performance. The course of

performance supports the trial court's legal conclusion that Kaes waived written

rejection.

       D. Retainage

       Kaes claims Koppenberg improperly withheld retainage and the trial court

failed to award the retained $26,626.00. Kaes cites Kim's admission of

withholding retainage and an entry in an exhibit detailing Koppenberg,"[u]nder

paid by $26,626.00 for expenses for replacing rejected niche fronts on all

projects due to rejected materials." Koppenberg claims all funds were paid.

       The trial court made no findings of fact or conclusions of law on this issue.

In the absence of a finding of fact, an appellate court "must indulge in the

presumption that the party with the burden of proof failed to sustain their burden

on this issue." In re Welfare of A.B., 168 Wash. 2d 908, 927 n.42, 232 P.3d 1104

(2010). Because Kaes had the burden of proving breach of contract, the trial

court's failure to enter a finding of fact is construed as Kaes's failure to meet this

burden of proof.

                                          16
No. 77288-1-1/17

       Other than described above, Kaes failed to produce evidence Koppenberg

withheld funds as retainage. Koppenberg provided evidence all funds were paid.

Therefore, substantial evidence supports the trial court's conclusion.

       We affirm.

WE CONCUR:

.AvaavA4.4,f

                                        17