Court Opinion

ID: 2778329
Source: CourtListenerOpinion
Date Created: 2015-02-10 21:12:30.243306+00
Date Added: 2024-06-11T11:13:16.768430
License: Public Domain

FILED
                                                                                                   COURT OF APPEALS
                                                                                                       DIVISION II
                                                                                                 2015 FEB 10 %
                                                                                                               M 8: 59
                                                                                                 ST
                                                                                                                      TON
                                                                                                 BY_
       IN THE COURT OF APPEALS OF THE STATE OF WASHIN

                                                DIVISION II

 JERRY MULDER and SALLY MULDER, and                                             No. 45667 -2 -II
their marital community,

                                    Respondent,

           v.

 CABINET            DISTRIBUTORS,              INC.,    a                UNPUBLISHED OPINION
 Washington corporation,

                                    Appellants.

          LEE, J. —    Cabinet Distributors, Inc. ( CDI)    appeals the trial court' s order awarding Jerry

and    Sally Mulder ( the   Mulders) attorney fees.     CDI argues that the contract for the purchase and

installation of cabinets does not authorize attorney fees for the Mulders' claims. CDI also argues

that if the contract does authorize attorney fees for the Mulders' claims, then the trial court erred

by determining       that the Mulders   were   the substantially prevailing party.     The trial court erred by

determining that the Mulders were the substantially prevailing party because even if the contract

authorized an award of attorney fees, neither party substantially prevailed. Therefore, we reverse

the trial court' s order granting the Mulders' motion for attorney fees and remand for entry of an

order denying both parties' motions for attorney fees.

                                                       FACTS

          In 2011, a jury returned a verdict in favor of the Mulders on their claim that CDI breached

its   contract   by improperly installing   cabinets.   Mulder   v.   Cabinet Distribs., Inc.,   noted at   173 Wn.
No. 45667 -2 -II

App. 1015, 2013 WL 509010. The jury also returned a verdict in favor of CDI for its counterclaim

to collect past -due payments. Id. The jury awarded the Mulders damages in the amount of $7, 600,

and awarded CDI damages in the amount of $2,400. Id.

        The Mulders moved for a new trial. Id. The trial court granted the motion for a new trial,

and   CDI   appealed   to this   court.   Id. On appeal, we reversed the trial court' s order granting the

Mulders' motion for a new trial. Id. We remanded for entry of judgment and a determination of

whether an award of attorney fees was proper. Id.

         On remand, both parties filed motions for attorney fees. CDI argued that the contract does

not authorize an award of attorney fees to the Mulders for their causes of action. CDI also argues

that even if the contract does authorize an award of attorney fees for the Mulders' action, CDI -

not   the Mulders —was      the substantially prevailing party because CDI successfully defended the

majority    of   the Mulders'    claims.    The Mulders did not offer authority or argument regarding

whether the contract provision entitled them to attorney fees for their underlying causes of action.

The Mulders argued that they were the substantially prevailing party because their net judgment

was greater than CDI' s net judgment.

         On   July   1, 2013, the trial   court   heard the   parties'   motions   for attorney fees.   Presumably,

the trial court found that the contract authorized attorney fees to any action brought to enforce the

contract because it applied RCW 4. 84. 330, which would only apply if the contract authorized

attorney fees, but the     record   does   not reveal   any discussion      or explicit   finding.   The trial court

determined that the Mulders were the prevailing party and entitled to attorney fees through RCW

4. 84. 330 because the Mulders' net affirmative judgment was a greater dollar amount than CDI' s

judgment. The trial      court explained    its determination, "[ W]hen you have a ball game, whether you

                                                          2
No. 45667 -2 -II

kick   a   field   goal at   the    end or you   beat them    by     20   points, you prevailed."   Verbatim Report of

Proceedings ( VRP) at 9. The trial court made an oral ruling awarding the Mulders attorney fees.

           On August 8, the parties returned to present an order on judgment, but could not agree on

an order for attorney fees. The trial court ordered the parties to either present an agreed final order,

or receive CR 11 sanctions and fines. On September 5, an agreed order on judgment and attorney

fees was filed. CDI appeals the trial court' s order granting the Mulders attorney fees.

                                                         ANALYSIS

           CDI argues that the contract provision in the purchase agreement does not authorize

attorney fees for the Mulders' claims because the provision is limited to authorizing attorney fees

in   collection actions.       CDI also argues that even if the agreement authorizes attorney fees for the

Mulders' claims, the trial court erred in determining that the Mulders were the substantially

prevailing party.        We agree that the trial court erred in determining that the Mulders were the

substantially prevailing party. We reverse the trial court' s order granting the Mulders' motion for

attorney fees and remand for entry of an order denying both parties' motions for attorney fees.

           Washington        courts    follow the " American Rule,"           where each party pays its own attorney

fees   unless an award         is   authorized   by   contract, statute, or a recognized ground        in equity. Dave

Johnson Ins. Inc. v. Wright, 167 Wash. App. 758, 783, 275 P. 3d .339, review denied, 175 Wash. 2d
1008 ( 2012).       We review de novo whether a legal basis exists for awarding attorney fees by statute,

under contract, or in equity; and, we review the reasonableness of the award for an abuse of

discretion. Cook        v.
                             Brateng,    180 Wn.      App.   368, 375, 321 P.3d 1255 ( 2014). A trial court abuses

its discretion when its decision is unreasonable, based on untenable grounds, or made for untenable

reasons. Cook, 180 Wash. App. at 375.

                                                                 3
No. 45667 -2 -II

        Here, the only basis for an award of attorney fees is the contract provision authorizing

attorney fees.        CDI argues that the under the plain language of the contract, the attorney fees

provision limits the award of attorney fees to collection actions. Br. of Appellant at 11.

A.      THE CONTRACT

        We review interpretation of contract provisions de novo and apply fundamental contract

construction rules when          interpreting     a contract.        Viking Bank v. Firgrove Commons 3, LLC, 183

Wn.   App.   706, ,        334 P.3d 116, 120 ( 2014);        Cambridge Townhomes, LLC v. Pac. Star Roofing,

Inc., 166 Wash. 2d 475, 487, 209 P.3d 863 ( 2009).                 A contract is construed to give controlling weight

to the parties'    intent,   as expressed       in the   contract' s plain   language. W. Plaza, LLC v. Tison, 180

Wn.   App.   17, 22, 322 P.3d 1 ( 2014)         review granted,        336 P.3d 1165 ( 2014). We " give words in a

contract their ordinary, usual, and popular meaning unless the entirety of the agreement clearly

demonstrates      a   contrary intent."      Viking Bank, 334 P.3d at 120 ( quoting Hearst Commc' ns, Inc. v.

Seattle Times Co., 154 Wash. 2d 493, 504, 115 P.3d 262 (2005)). "[ W] e view the contract as a whole,

interpreting   particular       language in the       context of [the]    other contract provisions."   Viking Bank,
334 P.3d at 120.

        The    contract      between CDI        and   the Mulders is     titled: " KITCHEN & BATH PRODUCTS

PURCHASE AGREEMENT." Clerk' s Papers ( CP) at 14. The contract provision that allows for

attorney fees reads as follows:

        Late   payments shall          be   subject   to interest     charges of   18% per annum, and in no
        event     higher than the interest           by law[.] In the event collection action
                                                  rate provided

        or court proceedings are instituted to enforce this agreement or any portion thereof
        PURCHASER agrees to pay the cost of said collection and /or reasonable attorney
        fees   and      costs   in   addition   to any     sum   due herein[.]      The laws of the State of
        Washington govern this contract and venue of any dispute is placed in Grays Harbor

                                                                 4
No. 45667 -2 -II

         County, Washington[.]   CDI has retained National Revenue Corp. a collection
         agency, to manage any delinquent accounts[.]

CP at 15. 1

         CDI argues that the provision, read as a whole, applies only to collections actions.

Specifically, CDI argues that the provision limits the recovery of attorney fees only to collections

actions. CDI argues that although the provision contains the phrase " to enforce this agreement or

any   portion   thereof," the use of the term " collection action" and other references to collections

within the provision demonstrates that the provision as a whole applies solely to collections

actions. Br. of Appellant at 12 ( quoting CP at 15).

         We disagree.       The use of the word " collection" in the contract does not demonstrate an

intent to limit the attorney fees provision to collection actions alone; especially when the phrase

specifically authorizes attorney fees " to enforce this agreement or any portion thereof' without

qualification.    Because the contract authorizes an award of attorney fees to enforce the contract

without qualification, the attorney fees provision applies to the underlying claims in this action.

         Although the attorney fees provision unilaterally requires the Mulders to pay attorney fees,2

under RCW 4. 84. 330, unilateral attorney fees provisions must be interpreted as bilateral. Hawkins

v.   Diel, 166 Wn.   App.   1, 10, 269 P.3d 1049 ( 2011).   When a unilateral attorney fees provision is

1 The Clerk' s Papers are underlined by hand, and the underlining has made the punctuation
unclear.

2 The Mulders do not offer argument or authority regarding whether the contract provision applies
to   all contract enforcement actions.      Presumably, they assume that the attorney fees provision
applies to all actions to enforce the contract because their argument focuses on whether RCW
4. 84. 330 authorizes attorney fees bilaterally to the prevailing party in a contract enforcement action
where the contract unilaterally authorizes attorney fees.

                                                      5
No. 45667 -2 -II

interpreted as bilateral, attorney fees must be awarded to the prevailing party. Hawkins, 166 Wn.

App.    at   10.     Here, neither party is the prevailing party because both parties had affirmative

judgments         entered against         them.       See Eagle Point Condo. Owners Ass 'n v. Coy, 102 Wash. App.
697, 706, 9 P.3d 898 ( 2000);                  Kyle v. Williams, 139 Wash. App. 348, 356, 161 P.3d 1036 ( 2007),

review    denied, 163 Wash. 2d 1028 ( 2008) ( citing Eagle Point, 102 Wn.                              App. 697);   see also Wright,

167 Wn.      App.        at   782 -84.    If   neither      party   prevails
                                                                               entirely, " then the determination of who is a

prevailing party depends                 upon who      is the substantially prevailing party." Riss v. Angel, 131 Wash. 2d
612, 633, 934 P.2d 669 ( 1997).

B.        SUBSTANTIALLY PREVAILING PARTY

          We review a determination of who is the substantially prevailing party de novo. Hawkins,

166 Wn.      App.        at   9 -10. "   The substantially prevailing party need not prevail on his or her entire

claim."      Hawkins, 166 Wn.                  App.    at   10.     Determining who is the substantially prevailing party

depends      on    the   relief granted.            Wright, 167 Wn.       App.   at   783.   If "both parties are awarded relief,

the   net affirmative          judgment may determine the prevailing party."                       Phillips Bldg. Co. v. An, 81

Wn.     App.   696, 702, 915 P.2d 1146 ( 1996).                      However, the net affirmative judgment method may

not be appropriate " in situations where a party receives an affirmative judgment on only a few

claims."     Phillips, 81 Wash. App. at 702.

          If both parties are awarded " some measure of relief and there is no singularly prevailing

party, neither party may be entitled to attorney fees" and both parties will pay their own costs and

fees. Phillips, 81 Wn.               App.      at   702.    For example, in Hertz v. Riebe, the plaintiffs succeeded on

their   breach     of contract claim and               the   defendants      succeeded on      their   collections claim.   86 Wash.
6
No. 45667 -2 -II

App.   102, 104 -05, 936 P.2d 24 ( 1997). The court held that because both parties prevailed on major

issues, neither party was entitled to attorney fees. Hertz, 86 Wash. App. at 105 -06.

          Here, both parties prevailed on major issues because CDI succeeded on its collection claim

and   the Mulders       succeeded on one of      their   breach   of contract claims.          We determine that both

parties prevailed on major issues and received affirmative relief, and neither party is entitled to

attorney fees as the substantially prevailing party. Hertz, 86 Wash. App. at 105 -06; Phillips, 81 Wn.

App. at 702.

                                    ATTORNEY FEES AND SANCTIONS

          When a contract provision authorizes attorney fees at trial, they are also available to the

prevailing party on      appeal.
                                    Thompson v. Lennox, 151 Wash. App. 479, 491, 212 P.3d 597 ( 2009).

A party must " include a separate section in her or his brief devoted to the request" for appellate

attorney fees. Stiles      v.   Kearney,   168 Wn.   App.   250, 267, 277 P.3d 9 ( 2012), review denied, 175
Wash. 2d 1016 ( 2012); RAP 18. 1( b).          This requirement is mandatory, and " requires more than a bald

request   for attorney fees      on appeal."   Stiles, 168 Wash. App. at 267.

          The Mulders request attorney fees on appeal, but they are not the prevailing party and,

therefore, are not entitled to attorney fees on appeal. Although CDI prevails in this appeal, we do

not award appellate attorney fees. In CDI' s first appeal to this court, we denied CDI' s request for

appellate attorney fees because its request was insufficient to meet the requirements of RAP 18. 1. 3

3 CDI' s attorney fees request in its opening appellate brief in its first appeal is as follows:

                   Pursuant to RAP 18. 1, CDI requests herein its reasonable attorney' s fees
          and expenses based on the subject contract between plaintiffs and CDI and
          plaintiffs'   continued assertions of their right       to   recover   the   same.   Specifically,   CDI
No. 45667 -2 -II

Mulder v. Cabinet Distributors, Inc., 173 Wash. App. 1015. In its request for appellate attorney fees

in this appeal, CDI provides the exact same language that we found insufficient in the first appeal.4

 The law of the case doctrine provides that an appellate holding enunciating a principle of law

must   be followed in     subsequent   stages   of   the   same   litigation."   Cook, 180 Wash. App. at 375.

Therefore, under the law of the case doctrine, we again find that CDI has failed to supply citation

or authority for appellate attorney fees.

        CDI also requests sanctions against the Mulders under RAP 18. 9 and 10. 7 for violations of

RAP 10. 3.   Under RAP 18. 9 and RAP 10. 7, we can impose sanctions on a party or counsel who

files a brief that fails to comply with the rules for appellate briefing. Iverson v. Snohomish County,

117 Wn.   App. 618, 624, 72 P.3d 772 ( 2003).     CDI argues that the Mulders violated RAP 10. 3 by

failing to cite to the record for factual assertions. We decline to award sanctions under RAP 18. 9

because the errors in the Mulders' briefing were not so egregious to warrant sanctions. Iverson,
117 Wash. App. at 624 ( declining to award sanctions for failure to properly cite to the record).

        requests its reasonable attorneys fees incurred in recovery of amounts due and
        owing under the subject contract, as alleged in CDI' s counter- claim.

Br. of Appellant at 24 ( No. 42457- 6 -II).

4 CDI' s attorney fees request in its opening appellate brief in this appeal is as follows:

                   Pursuant to RAP 18. 1, CDI requests herein its reasonable attorney' s fees
        and expenses based on the subject contract between plaintiffs and CDI and
        plaintiffs' continued assertions of their right to recover the same. Specifically, CDI
        requests its reasonable attorneys fees incurred in recovery of amounts due and
        owning under the subject contract, as alleged in CDI' s counter- claim.

Br. of Appellant at 19.

                                                           8
No. 45667 -2 -II

         We reverse the trial court' s order granting the Mulders' motion for attorney fees and

remand   for entry   of an order   denying   both   parties'   motions   for attorney fees.   We also deny both

parties' attorney fees and costs on appeal.

         A majority of the panel having determined that this opinion will not be printed in the

Washington Appellate reports, but will be filed for public record in accordance with RCW

2. 06. 040, it is so ordered.

 We concur:

                                                         9