Court Opinion

ID: 9939885
Source: CourtListenerOpinion
Date Created: 2024-02-12 22:17:22.918255+00
Date Added: 2024-06-11T13:42:05.638478
License: Public Domain

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

 ARON ENGLISH,
                                                   No. 85107-1-I
                      Appellant,
                                                   DIVISION ONE
               v.
                                                   UNPUBLISHED OPINION
 CHARCOAL CREEK LLC, CALVIN
 WHITE,

                      Respondents,

 ERIC BLAKEMORE, INC. dba
 FREDERICKS APPLIANCE CENTER,

                     Defendant.

       CHUNG, J. — Aron English purchased a home from developer Charcoal

Creek LLC. Charcoal Creek cut down trees on the property after the parties

entered into a purchase and sale agreement (PSA) but before the closing on the

home. English sued for breach of the PSA, and Charcoal Creek counterclaimed

for waste because English removed irrigation and landscaping materials on a

neighboring property owned by Charcoal Creek. After a bench trial in which

English prevailed on the breach of the PSA and Charcoal Creek prevailed on its

waste claim, the trial court denied the parties’ requests for attorney fees and

costs on the grounds that both had prevailed on major issues related to the
No. 85107-1-I/2

contract and even if English could recover fees on the breach claim alone, the

record did not allow for segregation of attorney fees.

         English appeals solely the ruling on fees and costs. We conclude that the

trial court erred by finding that English was not a prevailing party and by denying

fees to both parties. English prevailed on the only claim based on the PSA and is

therefore entitled to reasonable fees and costs based on the contract. Charcoal

Creek prevailed on the waste claim and is entitled to statutory fees. Therefore,

we reverse and remand for the trial court to determine the fee awards for each

party.

                                           FACTS

         Charcoal Creek LLC1 built eight high-end homes in a small development

named The Orchard located in West Seattle. Aron English and Charcoal Creek

executed a purchase and sale agreement (PSA) for the purchase of one of the

properties on January 11, 2021. After entering into the PSA, Charcoal Creek

hired Haskins Tree Care LLC to cut down trees in the development, including

nine trees on English’s property. The sale of the property closed on February 16,

2021, and English took possession.

         In late August or early September 2021, Charcoal Creek landscaped the

hillside of a parcel of land adjacent to English’s property. English removed the

plants and irrigation line, depositing the materials on the patio of the neighboring

         1 The managing member of Charcoal Creek, Calvin White, is also a named defendant.

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No. 85107-1-I/3

house. Charcoal Creek attempted to resolve the issue with English and recoup

its losses, but English referred all communication to his lawyer.

       The following month, English filed a lawsuit against Charcoal Creek

alleging timber trespass, waste, breach of contract, negligent or intentional

misrepresentation, and unjust enrichment, all related to removal of the trees on

his property. Charcoal Creek counterclaimed for trespass and waste for English’s

removal of the landscaping and irrigation materials from the neighboring

property.

       The parties engaged in settlement discussions. English claimed the value

of the removed trees was $71,900, which with treble damages under the timber

trespass statute amounted to $215,700. He also alleged that Charcoal Creek

realized $356,500 in increased value to its properties by removing the trees and

demanded this value as damages for the unjust enrichment claim. Altogether,

English sought to recover damages totaling $572,200, excluding attorney fees

and costs. The parties failed to reach a settlement agreement.

       Charcoal Creek moved for partial summary judgment on English’s claims

for unjust enrichment, timber trespass, and waste, and also sought a finding of

liability for treble damages on its waste claim against English. The trial court

granted summary judgment only on the claim for unjust enrichment, which it

dismissed with prejudice.

       The parties proceeded to a bench trial. English abandoned all claims

except for timber trespass for one of the trees and breach of contract for the

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No. 85107-1-I/4

removal of the others. As for damages, English claimed that for breach of the

PSA, “diminution in the property value is the appropriate award for damages

measured by the difference between the contract price and the fair market value

of the price immediately after the breach.” According to English, removal of the

trees diminished his property value by $245,000. Charcoal Creek argued for

replacement cost of the trees as the proper measure of damages.

       The parties stipulated to certain facts, which the court incorporated into its

findings of fact. After considering the arguments and the evidence presented at

trial, the court determined that no timber trespass occurred because Charcoal

Creek had removed the trees before English owned the property. As for the

breach of contract claim, the court held that removal of the trees was a breach of

the PSA and English was entitled to replacement value of the trees in the amount

of $47,000. The court found the expert appraiser’s testimony about diminished

market value was not credible, reliable or persuasive, and that removal of the

trees did not diminish the market value of the property. The court concluded that

English did not prove damages or harm from the breach of the PSA beyond the

$47,000 replacement value of the trees.

      As to Charcoal Creek’s waste claim, the court concluded that English

“went onto Charcoal Creek’s land and wrongfully caused waste or injury to the

land or wrongfully injured personal property or improvements to real estate on

the land,” but Charcoal Creek did not prove damages or harm due to the waste.

After a request for reconsideration from Charcoal Creek, the trial court amended

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No. 85107-1-I/5

its decision and determined the evidence, unrebutted by English, established that

$7,000 was the amount of damages, or restoration value, that would reasonably

and fairly compensate Charcoal Creek for the waste and injury English caused

by removing the landscaping. Therefore, under RCW 4.24.630, which allows

treble damages for claims of waste, English was liable to Charcoal Creek for

treble damages in the amount of $21,000.

       English filed a motion for attorney fees and costs under the terms of the

PSA, seeking $675,975.92. Charcoal Creek sought $12,724 in fees. The trial

court denied both requests, concluding that there was no prevailing or

substantially prevailing party.

       English appeals only the trial court’s denial of attorney fees and costs.

                                    DISCUSSION

       “Under Washington law, a trial court may grant attorney fees only if the

request is based on a statute, a contract, or a recognized ground in equity.”

Gander v. Yeager, 167 Wn. App. 638, 645, 282 P.3d 1100 (2012). We apply a

two-part review to awards or denials of attorney fees: we review the legal basis

for the award de novo, while we review the amount of the award for abuse of

discretion. Id. at 647. A trial court abuses its discretion when its decision is

manifestly unreasonable or based on untenable grounds or untenable reasons.

Sw. Suburban Sewer Dist. v. Fish, 17 Wn. App. 2d 833, 838, 488 P.3d 839

(2021). A decision is based on untenable grounds or untenable reasons if the

trial court applies the wrong legal standard or relies on unsupported facts. Mayer

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No. 85107-1-I/6

v. Sto Indus., Inc., 156 Wn.2d 677, 684, 132 P.3d 115 (2006). “[T]he court’s

decision is ‘manifestly unreasonable’ if ‘the court, despite applying the correct

legal standard to the supported facts, adopts a view that no reasonable person

would take.’ ” Mayer, 156 Wn.2d at 684 (quoting State v. Rohrich, 149 Wn.2d

647, 654, 71 P.3d 638 (2003)). “The trial court must create an adequate record

for review of fee award decisions, which means in part that the record must show

a tenable basis for the award.” Loeffelholz v. Citizens for Leaders with Ethics &

Accountability Now (C.L.E.A.N.), 119 Wn. App. 665, 690, 82 P.3d 1199 (2004).

       Here, the PSA provides a basis for attorney fees: “if Buyer or Seller

institutes suit against the other concerning this Agreement . . . the prevailing

party is entitled to reasonable attorneys’ fees and expenses.” The parties also

agree that RCW 4.24.630 provides for fees on successful claims of waste.

However, the trial court denied the parties’ motions to award fees based on its

application of the “major issues” doctrine. The court reasoned, “In sum, Charcoal

Creek prevailed on the major issues of English’s unjust enrichment claim

($356,500), English’s primary contract-damages theory ($245,000), and [its]

waste counterclaim. English prevailed on the major issue of contract liability.”

Therefore, the court concluded, neither party qualified as the prevailing party

entitled to fees. As an additional ground for denial, the court determined that it

could not segregate fees for English’s successful breach of contract claim from

his unsuccessful claims for unjust enrichment and timber trespass based on the

billing records provided. We address each issue in turn.

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No. 85107-1-I/7

       I.     Prevailing Party

       “As a general rule, a prevailing party is one who receives an affirmative

judgment in its favor.” Cornish Coll. of the Arts v. 1000 Virginia Ltd. P’ship, 158

Wn. App. 203, 231, 242 P.3d 1 (2010). The issue of who is the prevailing party is

a mixed question of law and fact to be reviewed under the error of law standard.

Eagle Point Condo. Owners Ass’n v. Coy, 102 Wn. App. 697, 706, 9 P.3d 898

(2000). Analytically, resolving a mixed question of law and fact requires

establishing the relevant facts, determining the applicable law, and then applying

that law to the facts. Tapper v. Emp’t Sec. Dep’t, 122 Wn.2d 397, 403, 858 P.2d

494 (1993).

       “In a contract dispute where ‘several distinct and severable claims’ are at

issue, the determination of the prevailing party may be subjective and difficult to

assess.” Cornish Coll. of the Arts, 158 Wn. App. at 232 (quoting Marassi v. Lau,

71 Wn. App. 912, 917, 859 P.2d 605 (1993), abrogated on other grounds by

Wachovia SBA Lending, Inc. v. Kraft, 165 Wn.2d 481, 200 P.3d 683 (2009)). If

neither party wholly prevails, then the substantially prevailing party prevails for

the purposes of the fee award. Marassi, 71 Wn. App. at 916. If both parties

prevail on major issues, an attorney fee award is not appropriate. Id. The parties

refer to this as the “major issues doctrine.”

       The trial court applied the major issues doctrine and concluded that

neither party should receive attorney fees. The trial court found that both

Charcoal Creek and English prevailed on major issues in two distinct ways. First,

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No. 85107-1-I/8

the court determined “[t]his entire lawsuit is one ‘concerning th[e] Agreement.’

And under the Agreement’s plain language, the parties agreed to an award of

fees and costs to a party that prevails in the lawsuit that was instituted,” and “all

the parties’ claims concern, and flow out of, the Agreement.” Because Charcoal

Creek prevailed on the waste and timber trespass claims and English prevailed

on the breach of contract, the court determined that both parties prevailed on

major issues in the lawsuit. Alternatively, the trial court looked at only the breach

of contract claim and found that English asserted “two very different theories of

recovery”—diminution of value and replacement cost—but prevailed only on one.

English challenges both of the court’s alternative approaches. We examine each

separately.

              A. Claims Concerning the Contract

       English argues the trial court erroneously determined that all claims and

counterclaims concerned the PSA because common law and statutory-based

claims are not “on the contract.” According to English, the major issues doctrine

does not apply because his breach of contract claim is the only one “on the

contract.” Charcoal Creek contends that “concerning the contract” has a broader

meaning such that a dispute can concern an agreement without implicating a

specific provision of the contract and the trial court properly concluded that the

major issues doctrine applied and precluded any award of attorney fees. We

agree with English that his claim that Charcoal Creek breached the PSA is the

only claim that allows for attorney fees and costs under the terms of that contract.

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No. 85107-1-I/9

       A prevailing party may recover attorney fees under a contractual fee

shifting provision “only if the party brings a ‘claim on the contract,’ that is, only if a

party seeks to recover under a specific contractual provision.” Boguch v.

Landover Corp.¸153 Wn. App. 595, 615, 224 P.3d 795 (2009). An action is on a

contract for purposes of a contractual attorney fees provision if the action arose

out of the contract and if the contract is central to the dispute. Seattle-First Nat’l

Bank v. Washington Ins. Guar. Ass’n, 116 Wn.2d 398, 413, 804 P.2d 1263

(1991). A breach of duty based on statute or common law is not on the contract

“even if the duty would not exist in the absence of a contractual relationship.”

Boguch, 153 Wn. App. at 615. “Stated differently, an action ‘sounds in contract

when the act complained of is a breach of a specific term of the contract, without

reference to the legal duties imposed by law on that relationship.’ ” Boguch, 153

Wn. App. at 616 (quoting G.W. Constr. Corp. v. Prof’l Serv. Indus., Inc., 70 Wn.

App. 360, 364, 853 P.2d 484 (1993)).

       English’s breach of contract claim was based on language in the PSA

including “shrubs, plants and trees planted in the ground” as items included in the

sale of the property which was to be maintained “in its present condition, normal

wear and tear excepted, until the Buyer is provided possession.” The other

claims of timber trespass, unjust enrichment, negligent or intentional

misrepresentation, and waste are based on non-contractual theories and do not

pertain to specific provisions of the PSA. Likewise, Charcoal Creek’s waste claim

                                            9
No. 85107-1-I/10

was not grounded on a specific provision of the PSA and is based on conduct

that occurred significantly after the closing on the property.

       Charcoal Creek argues that the use of the language “concerning the

Agreement” in the PSA extends its application to disputes even if they do not

implicate a specific provision. In support, Charcoal Creek cites Brooks v. Nord,

Tr. of David I. Huffman & Lois P. Huffman Living Tr. Dated Sept. 22, 2006, 16

Wn. App. 2d 441, 446, 480 P.3d 1167 (2021), which construed a similarly worded

fee provision in a residential purchase and sale agreement that awarded fees in

any dispute “concerning” the agreement. In that case, the trial court denied

attorney fees under the agreement where the seller successfully defended a suit

for misrepresentation and failure to disclose. Id. at 445. On appeal, the court

determined the seller was owed attorney fees because the claims arose out of

the contract, explaining that “ ‘[c]oncerning’ is broader than ‘part of;’ a dispute

can concern the agreement even if a specific provision of the agreement is not

implicated. Such is the case here because the action was ‘on [the] contract.’ ” Id.

at 446.

       However, Brooks involved a tort action, and “in an action in tort, the

prevailing party is entitled to attorney fees when the action is based on a contract

containing an attorney fee provision.” 16 Wn. App. 2d at 446; see also Borish v.

Russell, 155 Wn. App. 892, 907, 230 P.3d 646 (2010) (attorney fees recoverable

for prevailing party in a tort claim arising from the contract); Brown v.

Johnson¸109 Wn. App. 56, 59, 34 P.3d 1233 (2001) (suit for misrepresentation

                                          10
No. 85107-1-I/11

arose out of the parties’ agreement and the purchase and sale agreement was

central to the claim); Stieneke v. Russi, 145 Wn. App. 544, 571, 190 P.3d 60

(2008) (fraud claims were on the contract and allowed for fees). English’s only

alleged tort claims—negligent or intentional misrepresentation—were abandoned

by the time of trial.

       English’s remaining claims of unjust enrichment and timber trespass and

Charcoal Creek’s waste claim are not based on the PSA for purposes of applying

the major issues doctrine. Unjust enrichment is “the method of recovery for the

value of the benefit retained absent any contractual relationship” based in equity.

Young v. Young, 164 Wn.2d 477, 484, 191 P.3d 1258 (2008). And as an

equitable remedy that exists when a contract does not, the unjust enrichment

claim cannot concern the PSA. Id.

       English’s claim for timber trespass and Charcoal Creek’s waste

counterclaim are statutory, arising under RCW 64.12.030 and RCW 4.24.630

respectively. The timber trespass claim pertained only to trees removed after

closing, when English would have owned the land. RCW 64.12.030. Because the

sale closed, the provisions of the PSA merged into the deed, as “[e]xecution,

delivery, and acceptance of the deed becomes the final expression of the parties’

contract and therefore subsumes all prior agreements.” Barber v. Peringer, 75

Wn. App. 248, 251, 877 P.2d 223 (1994). The timber trespass claim could not

concern an agreement that no longer existed at the time of the conduct at issue.

The same reasoning applies to Charcoal Creek’s waste counterclaim. According

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No. 85107-1-I/12

to the trial court, “Because the waste counterclaim involved an unresolved

boundary line dispute—which itself stemmed from the property sale under the

Agreement—the waste counterclaim was a claim concerning the Agreement.”

However, any property line dispute arose after closing and, therefore, concerns

the deed rather than the PSA. See Barber, 75 Wn. App. at 248 (acceptance of

deed subsumes all prior agreements).

      The only claim concerning the PSA is English’s breach of contract. The

court erred in applying the “major issues doctrine” to determine English was not

the prevailing party on issues “concerning the agreement” because Charcoal

Creek also prevailed in defending against unjust enrichment and timber trespass,

and prevailed in its waste counterclaim. English was the prevailing party on its

breach of contract claim.

             B. Different Contract Damages Theories as “Major Issues”

      According to the trial court, because English asserted diminution of value

and replacement cost as theories of recovery and prevailed only in proving

replacement damages, the major issues doctrine applies to preclude attorney

fees. English contends he prevailed on the claim even though he was awarded a

smaller damage award than he sought. Charcoal Creek argues English explicitly

sought two distinct remedies and won only one, so the court’s application of the

major issues doctrine was appropriate. We disagree with the trial court’s

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No. 85107-1-I/13

characterization of English’s alternative damages theories as separate issues for

the purposes of the major issues doctrine.

       The major issues doctrine applies when a contract dispute has “several

distinct and severable claims.” Marassi, 71 Wn. App. at 917. Here, the parties do

not dispute that English litigated a single breach of contract claim with two

possible theories of recovery—diminution of value and replacement cost of the

trees. Because English raised only one breach of contract claim, there are not

multiple, distinct claims to support application of the major issues doctrine. The

fact that he was awarded damages of $47,000 rather than $245,000 does not

change his status as prevailing party on that single claim. “A party need not

recover its entire claim in order to be considered the prevailing party.” Silverdale

Hotel Assocs. v. Lomas & Nettleton Co., 36 Wn. App. 762, 774, 677 P.2d 773

(1984) (defendant was not the prevailing party where damages award was less

than plaintiff requested); see Taliesen Corp. v. Razore Land Co., 135 Wn. App.

106, 144 P.3d 1185 (2006) (while the defendant was successful in reducing the

compensable costs, the judgment was entered for plaintiff who was the prevailing

party and, therefore, entitled to attorney fees).

       The cases cited by the trial court also do not support applying the major

issues doctrine to different damages theories for the single contract claim in this

case. In Rowe v. Floyd, 29 Wn. App. 532, 629 P.2d 925 (1981), the sellers of real

estate brought an action to forfeit the interests of the buyers who failed to make a

payment under the terms of the contract, and the buyers “asserted as an

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No. 85107-1-I/14

affirmative defense that they were not in default, and, in a counterclaim, they

asked for their reasonable attorney’s fees in the event they prevailed.” Id. at 533.

The trial court found that the buyers were entitled to a reduction in their payment

on the installment under a disaster clause in the contract, set a deadline for the

buyers’ payment, and dismissed the complaint for forfeiture. Id. While a single

claim for forfeiture was the source of the litigation, the trial court was required to

address several major issues—validity of the contract, impact of the disaster

clause, necessity of forfeiture, and calculation of buyer’s payment—to reach its

final decision on the contract claim. Id. at 533-35. The appellate court agreed that

both parties prevailed on major issues—the buyers successfully resisted the

forfeiture and the seller recovered the money owed under the contract—and

affirmed the trial court’s order declining to award fees to either party. 29 Wn. App.

at 534-35. 2

        Tallman v. Durussel, 44 Wn. App. 181, 183, 721 P.2d 985 (1986), also

cited by the trial court, addressed attorney fees in the context of an award on

appeal. Id. at 189. Tallman concerned the second of two lawsuits between

        2This court has rejected application of Rowe and the “major issues doctrine” where

“multiple distinct and severable contract claims are at issue.” Transpac Dev., Inc. v. Oh, 132 Wn.
App. 212, 218, 130 P.3d 892 (2006) (quoting Marassi, 71 Wn. App. at 917). Transpac involved a
lease termination based on an invalid sublease where “each party avoided the remedies the other
party sought,” with Oh successfully defending against a claim of unpaid rent, and Transpac
successfully defending against the counterclaim for remodeling expenses and loss of subtenant
rent. 132 Wn. App. at 217-20. Because there were multiple distinct and severable claims from a
single lease agreement, and both parties prevailed in part, a proportional fee award was
appropriate. Id. at 219-20. As an alternative ground for reversing the trial court’s decision, English
argues for application of this proportionality approach. However, the parties here allege, and
prevail on, claims with two different sources of attorney fee recovery—the PSA and, for the waste
claim, RCW 4.24.630—rather than a single contract. Unlike in Transpac, they do not have
multiple distinct claims under a single contract.

                                                 14
No. 85107-1-I/15

Tallman and investor Durussel, who entered into a promissory note payable to

Tallman. Id. at 182-83. In the first lawsuit, Durussel sued Tallman for rescission

of the contract, fraud, and misrepresentation, but the jury found for Tallman. Id. at

183. Tallman then sued Durussel for the balance of a promissory note. Id. The

trial court granted partial summary judgment to Tallman, determining that the

installments in default at the time of the prior action should have been raised as

compulsory counterclaims and were barred, but the installments that came due

after were not barred. Id. On appeal, we concluded the cause of action on the

promissory note was not barred in its entirety, as Durussel had argued, but also

that the relation-back doctrine did not apply to save the barred installments, as

Tallman had argued. Id. at 185-86. Because each of the parties prevailed on one

of the major issues on appeal, there was no prevailing party for the purposes of

contractual attorney fees. Id. at 189. Neither Rowe nor Tallman characterized

different damages theories on a single claim as separate “major issues” that

determine who is the prevailing party.

       Here, the trial court concluded that Charcoal Creek breached the PSA

agreement and entered judgment for English in the amount of $47,000. As a

result, English received an affirmative judgment in his favor on the breach of

contract claim. The theory of damages and lower recovery than sought does not

impact English’s status as prevailing party for the purposes of attorney fees

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No. 85107-1-I/16

under the PSA. Thus, the trial court abused its discretion by applying the major

issues doctrine and denying English’s fees for breach of contract. 3

                C. Fees for Charcoal Creek’s Waste Claim

        Although Charcoal Creek did not appeal, our ruling regarding the trial

court’s denial of English’s fees for breach of contract on the grounds above also

reverses the trial court’s denial of Charcoal Creek’s motion for attorney fees for

the successful waste claim. RCW 4.24.630(1) includes liability for reasonable

attorney fees and litigation-related costs to the injured party in a successful waste

claim. Here, the trial court denied Charcoal Creek’s statutory fees, as “subsumed

by the attorney-fees provision in the parties’ Agreement,” because the

counterclaim for waste was part of the lawsuit “concerning th[e] Agreement” and

was one of the major issues on which Charcoal Creek prevailed that made fee

recovery inappropriate for either party.

        However, English’s breach of contract claim is the only claim concerning

the PSA. The trial court’s conclusion that the availability of statutory attorney fees

is preempted by the PSA was an abuse of discretion. Moreover, the waste claim

concerns independent actions English took months after signing the PSA and

         3 Charcoal Creek argues that English’s “rejection of several make-whole offers could be

an independent alternative ground for affirming the trial court.” Charcoal Creek cites to Richter v.
Trimberger, 50 Wn. App. 780, 784, 750 P.2d 1279 (1988), and Eagle Point, 102 Wn. App. at 707.
However, in Richter, the court noted the “peculiar nature of this case,” in which there had been a
tender of agreed funds. 50 Wn. App. at 784. Eagle Point involved the specific rule for attorney
fees when a party does not accept an offer of judgment under CR 68. 102 Wn. App. at 707. “If the
judgment finally obtained by the offeree is not more favorable than the offer, the offeree must pay
the costs incurred after the making of the offer.” CR 68. The settlement negotiations between
Charcoal Creek and English did not include a CR 68 offer of judgment or tender of funds. The
failed settlement negotiations do not provide grounds for denial of attorney fees.

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No. 85107-1-I/17

closing on the property. As a result, Charcoal Creek is entitled to fees under

RCW 4.24.630 as the injured party. Upon remand the trial court should determine

the statutory fee award to Charcoal Creek.

       II.    Segregation of Fees

       As discussed above, the terms of the PSA allow for recovery of attorney

fees only on English’s breach of contract claim. Where attorney fees are

recoverable for some of a party’s claims, the award must segregate the time

spent on issues for which fees are authorized from time spent on other issues.

Mayer v. City of Seattle, 102 Wn. App. 66, 79-80, 10 P.3d 408 (2000).

Segregation is required even if the claims overlap or are interrelated. Loeffelholz,

119 Wn. App. at 690. However, if “the trial court finds the claims to be so related

that no reasonable segregation of successful and unsuccessful claims can be

made, there need be no segregation of attorney fees.” Hume v. Am. Disposal

Co., 124 Wn.2d 656, 673, 880 P.2d 988 (1994).

       The trial court determined that English’s “attorneys’ billing records do not

allow for segregation.” In reaching that decision, the court noted that English’s

counsel stated they had “removed fees and costs associated with Plaintiff’s

unjust enrichment claim and the claim for timber trespass,” but the records still

included multiple references to English’s failed claims of unjust enrichment and

timber trespass for which he could not recover attorney fees. The court also cited

the billing records for time spent on “summary judgment,” even though Charcoal

Creek’s summary judgment motion included the unjust enrichment, timber

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No. 85107-1-I/18

trespass, waste, and negligence claims. Finally, the court pointed to the billing for

discovery, mediation, and trial, stating “scores of time entries on these topics are

not specific to a particular claim and do not allow for segregation as to specific

claims.” The court concluded that English had not provided an evidentiary record

that would allow the court to award fees on the breach of contract claim.

       The trial court reasoned that English had failed to satisfy his burden to

adequately segregate fees as to the specific claims, not that segregation was

impossible. In such cases, the trial court abuses its discretion. Loeffelholz, 119

Wn. App. at 692. For example, in Loeffelholz, the trial court twice demanded

additional information to segregate the requested fees and made statements

about the inadequate segregation in the records before ultimately concluding it

was “unable” to segregate the fees. 119 Wn. App. 691-92. The reviewing court

disagreed with this conclusion, because the trial court “was saying that the

defendants had failed to furnish the necessary information, not that segregation

was not reasonably possible.” Id. at 692 (emphasis omitted). The trial court was

required to segregate the time spent on different issues on the record, and failure

to do so was an abuse of discretion. Id. As a result, the award “was arbitrary and

not supported by the record.” Id. On remand, the trial court was to require the

party to segregate the fees for the claims with various possible outcomes:

       If the defendants fail or refuse to segregate, the trial court shall
       deny fees. If the defendants segregate in a way that the trial court
       finds partly but not wholly persuasive, the trial court may at its
       option “independently decide what represents a reasonable amount
       of attorney fees” . . . provided that it shows, on the record, a rational
       basis for its decision.

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No. 85107-1-I/19

Loeffelholz, 119 Wn. App. at 692 (quoting Mayer, 102 Wn. App. at 79) (emphasis

omitted).

       As in Loeffelholz, the trial court here did not base its denial of fees on a

determination that segregation was not “reasonably possible.” Rather, the court

stated, “Even if it were appropriate to award fees to English on his breach-of-

contract claim alone (it is not), he has not provided an evidentiary record that

would allow the Court to do so.” The trial court must determine whether they are

segregable, not merely that the records provided do not allow for segregation.

The trial court may exercise its discretion to determine the number of hours

reasonably expended in the litigation, which includes discounting for hours spent

on “unsuccessful claims, duplicated effort, or otherwise unproductive time.”

Bowers v. Transamerica Title Ins. Co., 100 Wn.2d 581, 597, 675 P.2d 193

(1983). If a party “segregate[s] in way that is partly but not wholly persuasive,”

the court has discretion to decide what is a reasonable amount of fees, provided

it shows on the record a basis for its decision. Loeffelholz, 119 Wn. App. at 692-

93. On remand, the trial court should first determine whether segregation was

possible and, then, whether the provided billing records allow such segregation.

       III.   Fees on Appeal

       Both parties request fees on appeal under the terms of the PSA and RAP

18.1. “A contract that provides for attorney fees at trial also supports such an

award on appeal.” Atlas Supply, Inc. v. Realm, Inc., 170 Wn. App. 234, 241, 287

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No. 85107-1-I/20

P.3d 606 (2012). As the prevailing party to this appeal, English is entitled to his

fees on appeal subject to compliance with RAP 18.1(d).

                                  CONCLUSION

       English and Charcoal Creek were each entitled to attorney fees, as

English was the prevailing party under the PSA and Charcoal Creek was the

prevailing party under RCW 4.24.630(1). We reverse and remand to the trial

court for additional proceedings to assess whether English’s attorneys’ time is

segregable and whether the record supports the reasonableness of the fee

requests.

WE CONCUR:

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