Iron Gate Partners 5, Llc, V Tapio Construction ( 2017 )

Filed
Washington State
Court of Appeals
Division Two
February 22, 2017
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION II
IRON GATE PARTNERS 5, L.L.C., No. 47749-1-II
Appellant,
v.
TAPIO CONSTRUCTION, INC., UNPUBLISHED OPINION
Respondent,
R.T. WHARTON & ASSOCIATES, INC.,
A&A CONTRACTING, INC.,
Defendants.
JOHANSON, J. — Iron Gate Partners 5 LLC (Iron Gate) appeals the jury’s defense verdict
and award of attorney fees in Iron Gate’s breach of contract action against Tapio Construction Inc.
(Tapio). We reject Iron Gate’s argument that the performance guaranty made Tapio strictly liable
for water intrusion into the facility. Therefore, we hold that the trial court did not err when it
denied Iron Gate’s summary judgment motion, the motion in limine, and the CR 50 motions.
However, based on the plain language of the contract and its execution context, we hold that the
trial court erred when it awarded Tapio its attorney fees.
No. 47749-1-II
We affirm the trial court’s denial of Iron Gate’s summary judgment motion, motion in
limine, and CR 50 motions and reverse the trial court’s attorney fee award to Tapio.
FACTS
I. BACKGROUND
A. CONSTRUCTION OF THE FACILITY
In 2006, Iron Gate contracted with Tapio, R.T. Wharton & Associates Inc. (Wharton), Kiwi
Storage Systems (Kiwi),1 and others to design and build a 481-unit self-storage facility (the
Facility) in Vancouver. Although Tapio holds a general contractor’s license, Tapio functioned as
one of multiple contractors on the project. A master contract (the Contract), drafted by Iron Gate,
governed Tapio’s work. Iron Gate entered into substantially the same contract with the other
contractors.
The Facility’s construction was completed in July 2007. The Facility included two parallel,
two-story buildings, separated by an earthen berm. Atop the berm was a driveway aisle allowing
second-story access to storage units. First-story access was available from the buildings’ outer
sides at ground level. A few months after the facility’s completion, Iron Gate employees noticed
standing water in the first-floor units.
1
A Tapio owner testified that Wharton, a structural engineer, designed the Facility and Kiwi built
the Facility’s metal portions.
2
No. 47749-1-II
B. CONTRACT TERMS
Section 15 of the Contract included, relevant to this appeal, the following performance
guaranty:
Contractor warrants and guarantees to Owner . . . the satisfactory performance of
the Work for a period of one (1) year from . . . the date of Completion. . . .
Contractor agrees to repair or replace any or all Work, together with any other
adjacent work, which may be displaced by so doing, to Owner’s satisfaction, that
. . . fails to perform for one (1) year from the date of Completion.
Clerk’s Papers (CP) at 55. “Addendum A” to the Contract defined “Work” as discrete tasks,
including as item 1.3 a “[r]etaining wall package to include”
[l]abor and materials to form concrete footings and walls. Furnish and install rebar
package. Concrete pumping, concrete, place and finish. Furnish and install
ecoline-r liquid applied membrane waterproofing and “miradrain system” with
perforated drain pipe on building “A & B” retaining walls before back filling.
CP at 57. The “Work” also included providing erosion control, a grading and excavation package,
an underground utilities package, a building foundation package, concrete paving, and city street
improvements. The “[b]uilding foundation package,” item 1.5, included furnishing and installing
a “rebar package for cast in place concrete” and concrete on the second-floor deck. CP at 57.
Regarding attorney fees, the Contract provided that “[i]n the event of litigation between
the parties hereto . . . on account of the breach of or to enforce or interpret . . . the Contract . . .,
the losing party shall pay all costs and reasonable attorney[] fees actually incurred by the
prevailing party, including those on appeal.” CP at 55 (emphasis added).
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No. 47749-1-II
II. BREACH OF CONTRACT ACTION
A. IRON GATE’S SUMMARY JUDGMENT MOTION
In April 2011, Iron Gate sued Tapio for breach of contract.2 Arguing that Tapio had
breached the performance guaranty in section 15 of the Contract, Iron Gate moved for summary
judgment. Iron Gate contended that because the performance guaranty’s language was
unambiguous and Tapio had breached the guaranty, summary judgment was appropriate. Iron
Gate argued that as a matter of law, water intrusion violated the performance guaranty, regardless
of whether Tapio’s work caused the intrusion or the water came through defects created by other
parties. Iron Gate claimed also that undisputed evidence revealed that Tapio had failed to properly
install waterproofing components for the concrete retaining walls so that water intruded into the
storage units. Tapio responded that the performance guaranty was not breached if others’ work
caused the water intrusion and that there were genuine issues of material fact regarding whether
the water intruded as a result of Tapio’s work.
The trial court “appreciated [Iron Gate’s] argument” that regardless of fault, Tapio was
liable under the performance guaranty, but the trial court disagreed with Iron Gate based on the
Contract’s language. 1 Report of Proceedings (RP) at 38. The trial court denied Iron Gate’s
summary judgment motion and ruled that summary judgment was inappropriate because it was
unclear how the moisture had intruded into the storage units.
2
Iron Gate sued both Tapio and Wharton, and Tapio subsequently brought third party claims
against A&A Contracting Inc. (A&A), Tapio’s subcontractor. The trial court ultimately dismissed
both Wharton and A&A.
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No. 47749-1-II
B. IRON GATE’S MOTION IN LIMINE
Before trial, Iron Gate moved to exclude evidence of the fault “of any other named or
unnamed parties” except to support Tapio’s failure to mitigate defense. CP at 661. Iron Gate
argued that the performance guaranty made the fault of those other than Tapio irrelevant. In
response, Tapio contended that Iron Gate had to prove that Tapio’s alleged breach of warranty had
caused water to get inside. The trial court denied3 the motion in limine because there were
“questions of causation and [whether] there [was] moisture getting through and what is causing it
to get through.” 2 RP (Apr. 4, 2014) at 68-69.
C. JURY TRIAL
1. WATER INTRUSION EVIDENCE
Iron Gate’s part-owner, Glen Aronson, testified that he noticed standing water, which he
initially attributed to power washing, in the Facility’s interior within four months of the July 2007
completion. An employee saw water intrusion in the first-floor units adjoining the berm beginning
in the fall 2007. The water intruded mostly from the seam between the retaining wall and the floor
and also from cracks in the retaining wall. In April 2009, the Facility’s managers alerted Aronson
that there was an “issue with water intrusion” into the lower level units. 2 RP (Apr. 15, 2014) at
283. During heavy rains, Aronson observed water streaming down the walls from cracks in the
walls’ middles, from tieback holes in the walls, and from the walls’ top edges. The water intrusion
slowed after Iron Gate employees caulked expansion joints between the second-floor units and the
driveway.
3
The record on appeal does not contain a written ruling.
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No. 47749-1-II
Iron Gate’s expert testified that he saw cracks in the concrete at the driveway aisle slab’s
edge on the second floor. Also, a structural expert observed floor-to-ceiling cracking on the first-
floor units’ walls adjoining the berm caused by under-reinforced steel and improper jointing.
Tim Yarnot, Tapio’s senior project manager, testified that the company hired A&A to apply
the retaining-wall waterproofing called for by the Contract. John Tapio, a Tapio owner, testified
that the Contract did not require Tapio to caulk exterior cold joints on the second floor because
Iron Gate thought that Tapio’s price for that work was too high.
A construction defect investigator testified that water entered the first-floor units through
the construction joint between the vertical retaining wall and the horizontal pan deck. The pan
deck was metal framing that Kiwi, not Tapio, had constructed.
Michael Milakovich, Tapio’s water intrusion expert, observed water entering between the
rebar and retaining wall, as well as through retaining wall cracks. Milakovich sprayed water at the
base of a second-floor unit’s roll-up door and into the door jamb. In Milakovich’s opinion,
rainwater intruded into the second floor through the unweatherproofed unit door jambs, which
were Kiwi’s work, then migrated to the first floor. Water that intruded though the apron and
driveway joint was able to “drop alongside the building” into the core drainage plane between the
retaining wall drain mat and membrane. 7 RP at 779. Milakovich opined that he “[didn’t] think
the walls [were] a problem in this . . . situation.” 8 RP at 853.
2. IRON GATE’S CR 50 MOTIONS
Iron Gate moved for a directed verdict under CR 50(a) and (b). Iron Gate argued that the
case involved only contract construction (determining the Contract terms’ legal effect), which was
an issue for the trial court. Iron Gate reasoned that because Tapio’s work included all the concrete
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No. 47749-1-II
work and because water came through the concrete, Tapio breached the performance guaranty.
The trial court denied both CR 50 motions.
3. JURY INSTRUCTIONS
The trial court instructed the jury that Iron Gate had to prove, among other things, that the
Contract’s terms included a “warranty and guaranty to Iron Gate that [Tapio’s] Work would
satisfactorily perform” for one year after completion, that Tapio had breached the Contract, and
that Tapio’s breach resulted in Iron Gate’s damages. CP at 1455.
4. VERDICT AND ATTORNEY FEE AWARD
The jury returned a defense verdict, and the trial court awarded Tapio $125,000 in attorney
fees as the prevailing party. The trial court found that Tapio did “actually incur” attorney fees and
costs and concluded that this was so regardless of its insurance carrier’s involvement. CP at 1377.
ANALYSIS
I. SUMMARY JUDGMENT DENIAL
Iron Gate’s underlying argument is that as a matter of law, the trial court erred when it
declined to adopt Iron Gate’s broad reading of the guaranty provision.4 Iron Gate argues that the
“iron-clad and strict” performance warranty “absolutely guarantee[d] against any water intrusion”
so that as a matter of law, summary judgment for Iron Gate was appropriate. Br. of Appellant at
1-2. Iron Gate contends that the trial court erred when it denied Iron Gate’s summary judgment
4
For instance, Iron Gate argues that this case asks whether a “strict performance guarantee” is
“construed as a matter of law,” that “Iron Gate sought to enforce what it believed was a watertight
guarantee,” and that Tapio unconditionally promised “that no water would intrude the storage
units.” Br. of Appellant at 1-2, 6.
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No. 47749-1-II
motion because the undisputed fact that water intruded into the storage units established that Tapio
breached the performance guaranty. We disagree.
A. STANDARD OF REVIEW AND APPLICABLE LAW
Where the trial court denies summary judgment due to a substantive legal issue, our
standard of review is de novo. Washburn v. City of Federal Way, 169 Wn. App. 588, 609, 283
P.3d 567 (2012) (quoting Univ. Vill. Ltd. Partners v. King County, 106 Wn. App. 321, 324, 23
P.3d 1090 (2001)), aff’d, 178 Wn.2d 732, 310 P.3d 1275 (2013).
Contract interpretation is the process of ascertaining the parties’ intention. Berg v.
Hudesman, 115 Wn.2d 657, 663, 801 P.2d 222 (1990). When the facts regarding the meaning of
a contract provision are undisputed, interpretation is a matter of law. Mut. of Enumclaw Ins. Co.
v. USF Ins. Co., 164 Wn.2d 411, 424 n.9, 191 P.3d 866 (2008).
Washington follows the “objective manifestation theory of contracts” under which we
focus on the reasonable meaning of an agreement’s words rather than the parties’ unexpressed
subjective intent. Hearst Commc’ns, Inc. v. Seattle Times Co., 154 Wn.2d 493, 503, 115 P.3d 262(2005). “We generally give words in a contract their ordinary, usual, and popular meaning unless
the entirety of the agreement clearly demonstrates a contrary intent.” Hearst Commc’ns, Inc., 154
Wn.2d at 504. We view the contract as a whole and interpret particular language in context with
other provisions. Viking Bank v. Firgrove Commons 3, LLC, 183 Wn. App. 706, 713, 334 P.3d
116 (2014). And following the “context” rule adopted by Berg, we consider the context of the
contract’s execution. Viking Bank, 183 Wn. App. at 713 (citing Berg, 115 Wn.2d at 666-69).
However, extrinsic evidence regarding contract execution may be used only to determine the
meaning of specific words and terms and not to show an intention independent of the instrument
8
No. 47749-1-II
or to vary, contradict, or modify the written word. Hearst Commc’ns, Inc, 154 Wn.2d at 503(quoting Hollis v. Garwall, Inc., 137 Wn.2d 683, 695-96, 974 P.2d 836 (1999)).
B. SUMMARY JUDGMENT INAPPROPRIATE
Iron Gate contends that the guaranty is so broad that water intrusion into the Facility,
regardless of fault or cause, breached the Contract as a matter of law and that the Contract called
for Tapio to “waterproof” the building. Br. of Appellant at 6.
We begin with the provisions at issue: the performance guaranty, in which Tapio
“guarantee[d] . . . the satisfactory performance of the Work for a period of one (1) year” and the
addendum defining “Work.” CP at 55. “Work” comprised a series of discrete items, such as a
retaining wall package, including concrete footings and walls and with membrane waterproofing
and a MiraDRAIN system to be applied to the retaining walls. Another item was the building
foundation package, including concrete for the second-floor deck. Notably, the only reference to
waterproofing was to apply membrane waterproofing to the retaining walls.
The reasonable meaning of the performance guaranty belies Iron Gate’s contention that
any water intrusion into the Facility breached the Contract. No part of the guaranty provision or
Addendum A promised that the entire Facility would be watertight or warranted against water
intrusion into the storage units. Rather, under the provision’s plain language, Tapio guaranteed
only the satisfactory performance of the discrete items of “Work” listed in Addendum A. Part of
that guaranty promised the satisfactory performance of a membrane waterproofing system on the
retaining walls. But a guaranty that a waterproofing membrane to be applied to the retaining walls
would satisfactorily perform does not amount to a promise that the entire facility will be watertight.
9
No. 47749-1-II
We hold that the ordinary, usual meaning of the performance guaranty unambiguously contradicts
Iron Gate’s assertion that Tapio agreed to provide an entirely watertight facility.
We look also to the context of the Contract’s execution to determine whether the parties
objectively intended that Tapio would guarantee the entire Facility against water intrusion. See
Hearst Commc’ns, Inc, 154 Wn.2d at 503; Viking Bank, 183 Wn. App. at 713. Here, substantially
the same contract was used with multiple contractors. Further, Tapio was not “the” general
contractor, but was one of the multiple contractors, each hired to work on a portion of the project.
And notably, the scope of work did not require Tapio to caulk exterior cold joints, a potential
source of water intrusion.
The context in which the parties executed the Contract shows that Tapio was responsible
for discrete portions of the project, not for overseeing the entire project, which supports our holding
that Tapio was not required to guarantee that the entire Facility would be watertight. Given that
the parties expressly agreed that Tapio was not to waterproof exterior cold joints, the context
further implies that the Contract did not guarantee that every discrete item of Tapio’s Work would
be waterproof. For these reasons, we hold that both the language of the guaranty provision and
the context in which the parties executed the Contract contradicts Iron Gate’s assertion that any
water intrusion into the Facility breached the guaranty provision as a matter of law.
Iron Gate relies upon Shopping Center Management Co. v. Rupp, 54 Wn.2d 624, 343 P.2d
877 (1959), and Port of Seattle v. Puget Sound Sheet Metal Works, 124 Wash. 10, 213 P. 467(1923). But these cases, both decided before Berg’s objective intent test, do not support Iron
Gate’s position.
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No. 47749-1-II
In both Shopping Center Management Co. and Port of Seattle, our Supreme Court
considered whether the failure of work specifically described and guaranteed by the contract and
caused by something other than the contractor’s defective workmanship was covered by the
relevant guaranty.5 54 Wn.2d at 625, 629, 633; 124 Wash. at 10-13. Here, however, Tapio did
not specifically describe and guarantee the entire Facility, but only discrete items listed in
Addendum A to the Contract. And Tapio’s defense was that work other than the Work described
in the Contract resulted in the water intrusion.
For these reasons, Iron Gate’s argument that as a matter of law, water intrusion into the
Facility breached the performance guaranty fails, and we reject Iron Gate’s argument that the trial
court should have granted summary judgment in Iron Gate’s favor. Because the performance
guaranty is not as broad as Iron Gate contends, Tapio appropriately argued for denial of Iron Gate’s
summary judgment motion on the basis that Tapio disputed the water intrusion’s source. The trial
court properly denied the summary judgment motion based on these disputed facts’ existence.
Thus, we affirm the trial court’s order denying summary judgment to Iron Gate.
II. MOTION IN LIMINE’S DENIAL
In a related argument, Iron Gate contends that the trial court erred when it denied Iron
Gate’s motion in limine to exclude evidence of others’ fault. In particular, Iron Gate argues that
the mere fact that Tapio’s Work did not satisfactorily perform meant that Tapio was liable under
5
In both cases, the described work’s failure breached the performance guaranty regardless of the
reason that the work failed to satisfactorily operate. Shopping Ctr. Mgmt. Co., 54 Wn.2d at 633;
Port of Seattle, 124 Wash. at 13, 19.
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No. 47749-1-II
the performance guaranty, regardless of whether others’ work was also defective or unsatisfactory.
We reject Iron Gate’s argument.
We review evidentiary rulings, such as denial of a motion in limine, for abuse of discretion.
Mut. of Enumclaw Ins. Co. v. Gregg Roofing, Inc., 178 Wn. App. 702, 728, 315 P.3d 1143 (2013).
A trial court abuses its discretion if its decision was manifestly unreasonable or exercised on
untenable grounds or for untenable reasons. Gregg Roofing, 178 Wn. App. at 728. To prevail on
a breach of contract claim, the party claiming breach must establish that the contract imposed a
duty, the duty was breached, and the breach proximately caused the damages. C 1031 Props., Inc.
v. First Am. Title Ins. Co., 175 Wn. App. 27, 33-34, 301 P.3d 500 (2013) (quoting Nw. Indep.
Forest Mfrs. v. Dep’t of Labor & Indus., 78 Wn. App. 707, 712, 899 P.2d 6 (1995)).
Here, Iron Gate filed a motion in limine that sought to exclude evidence of third party fault
except as evidence of failure to mitigate and claimed that the performance guaranty was so broad
that the fault of others was irrelevant. The trial court denied the motion in limine because there
were “questions of causation and [whether] there [was] moisture getting through and what is
causing it to get through.” 2 RP (Apr. 4, 2014) at 68-69.
As discussed, Iron Gate is incorrect that water’s mere presence in the Facility breached the
performance guaranty. Because the guaranty was not as broad as Iron Gate asserts, Tapio could
defend by establishing that nonperformance of its Work had not caused the water intrusion.6 See
C 1031 Props., 175 Wn. App. at 33-34. Because evidence of others’ fault was relevant to whether
6
The jury instructions reflected the causation element: they stated that Iron Gate had to prove that
Iron Gate was damaged “as a result of Tapio’s breach.” CP at 1455. And it was an affirmative
defense for Tapio to prove that the damages were due to the fault of parties other than Tapio.
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No. 47749-1-II
Tapio’s alleged breach resulted in the water intrusion, the trial court had tenable grounds and
reasons to deny Iron Gate’s motion in limine. Accordingly, we affirm the motion’s denial.
III. CR 50 MOTIONS’ DENIAL
For similar reasons that Iron Gate contends the trial court erred when it denied the summary
judgment motion, Iron Gate contends that the trial court erred when it denied Iron Gate’s CR 50
motions for a directed verdict. We hold that Iron Gate’s arguments in this regard fail.
We review de novo a CR 50 motion’s denial. Paetsch v. Spokane Dermatology Clinic,
P.S., 182 Wn.2d 842, 848, 348 P.3d 389 (2015). A CR 50 motion should be granted only when,
viewing the evidence in the light most favorable to the nonmoving party, there is no competent
and substantial evidence that supports the verdict. Paetsch, 182 Wn.2d at 848 (quoting Indus.
Indem. Co. of Nw. v. Kallevig, 114 Wn.2d 907, 915-16, 792 P.2d 520 (1990)).
Here, as discussed, the guaranty provision’s plain language contradicts Iron Gate’s
assertion that Tapio guaranteed the Facility would be “watertight.” Br. of Appellant at 7. At the
end of Iron Gate’s case-in-chief, the jury had competent and substantial evidence to find that the
fact of water’s presence in the berm units alone did not breach the guaranty provision and thus did
not support a verdict for Iron Gate. Accordingly, the trial court did not err when it denied Iron
Gate’s first CR 50(a) motion.
Additionally, Tapio provided competent and substantial evidence from which the jury
could find that Tapio’s Work did not cause the water to intrude. For example, a Tapio expert
testified that water entered the berm units through the construction joint between the vertical first-
floor retaining wall and the horizontal pan deck; the pan deck was part of Kiwi’s, not Tapio’s,
work. And another Tapio expert opined that the walls were not the “problem” causing water
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No. 47749-1-II
intrusion. 8 RP at 853. Because there was competent and substantial evidence to support the
verdict for Tapio, the trial court did not err at the trial’s conclusion when it denied Iron Gate’s
second CR 50(a) motion. We disagree with Iron Gate that the trial court erred when it denied Iron
Gate’s CR 50 motions.
IV. TRIAL COURT’S ATTORNEY FEE AWARD
Iron Gate argues that because Tapio’s insurance carrier, not Tapio, incurred attorney fees,
the trial court improperly awarded Tapio its attorney fees “‘actually’ incurred” under the Contract.
Br. of Appellant at 25. Tapio responds that it is immaterial whether it was represented by insurance
defense counsel because our courts consistently award attorney fees to prevailing parties
represented by insurance counsel.7 We agree with Iron Gate.
Attorney fees may be awarded only if authorized by contract, statute, or recognized
equitable ground. Dave Johnson Ins., Inc. v. Wright, 167 Wn. App. 758, 783, 275 P.3d 339 (2012).
We review de novo whether a contractual provision authorizes an attorney fee award. Renfro v.
Kaur, 156 Wn. App. 655, 667, 235 P.3d 800 (2010). When we interpret a contract, we discern the
parties’ intent from the contract as a whole and decline to read ambiguity into an otherwise clear
and unambiguous contract. Mayer v. Pierce County Med. Bureau, Inc., 80 Wn. App. 416, 420,
909 P.2d 1323 (1995). We give words their ordinary, usual, and popular meaning, absent a clearly
demonstrated contrary intent, and we prefer interpretations that do not render portions of the
contract meaningless or ineffective. Hearst Commc’ns, Inc., 154 Wn.2d at 504; GMAC v. Everett
7
Tapio does not analyze the “actually incurred” language or otherwise explain, based on contract
principles, why we should read the provision to authorize Tapio its attorney fees.
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No. 47749-1-II
Chevrolet, Inc., 179 Wn. App. 126, 135, 317 P.3d 1074 (2014) (quoting Seattle-First Nat’l Bank
v. Westlake Park Assocs., 42 Wn. App. 269, 274, 711 P.2d 361 (1985)).
Here, Tapio obtained an attorney fee award under the Contract provision providing for
attorney fees “actually incurred by the prevailing party.”8 CP at 55. Our analysis of whether the
fee award to Tapio under this provision was correct begins with the ordinary, usual, and popular
meaning of “actually incurred.” Hearst Commc’ns, Inc., 154 Wn.2d at 504. “Actually” means “in
act or in fact,” and to “incur” is to “become liable or subject to.” WEBSTER’S THIRD NEW
INTERNATIONAL DICTIONARY 22, 1146 (2002). Thus, the ordinary meaning of fees “actually
incurred” by a prevailing party is those fees to which the party “in act or in fact became liable or
subject.” The limitation on fees “incurred” by the modifier “actually” further supports our reading
that the plain meaning of the provision at issue does not authorize an award of attorney fees to
Tapio, who was represented by insurance defense counsel. See also Mills v. Fletcher, 229 S.W.3d
765, 767-69 (Tex. App. 2007) (analyzing the plain meaning of “actually incurred”).
We look also to the context of the entire contract when we interpret a contractual provision.
Viking Bank, 183 Wn. App. at 713. Here, we note that in some provisions, the Contract refers to
“attorney[] fees” or “reasonable attorney[] fees” without limiting modifiers. CP at 49, 51, 52. In
other provisions, the Contract limits recovery to “actual attorney[] fees” incurred. CP at 52. We
decline to interpret the Contract in a way that renders meaningless this distinction between attorney
fees and attorney fees actually incurred that we find reflected throughout the Contract. See GMAC,
8
Tapio also cited RCW 4.84.330, which provides that if a contract specifically allows attorney fee
recovery to one party, the other party is also entitled to fees if it prevails. But the statute does not
address the situation here, where the Contract does not “specifically provide” for attorney fees to
either party if that party did not actually incur the fees. See RCW 4.84.330.
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No. 47749-1-II
179 Wn. App. at 135. Thus, the context of the Contract also supports our reading. For these
reasons, we hold that the attorney fee provision at issue is unambiguous and does not authorize an
attorney fee award to Tapio here.9
V. APPELLATE ATTORNEY FEES
Iron Gate requests an award of its attorney fees on appeal under the prevailing party fee
provision in the Contract and RAP 18.1(a). Tapio requests that we affirm the trial court and grant
Tapio its appellate attorney fees under the same provision. We decline to award either party its
appellate fees.
As discussed, we affirm the trial court’s denial of Iron Gate’s summary judgment motion,
motion in limine, and CR 50 motions. Although Tapio is the prevailing party on appeal, we hold
that the “actually incurred” language in the Contract’s attorney fees provision bars recovery where
the prevailing party was represented by insurance defense counsel. Because Tapio fails to argue
or explain how it “actually incurred” attorney fees on appeal, we decline to award Tapio its
appellate attorney fees under the Contract.
9
We are not persuaded to the contrary by Tapio’s cited authority, none of which involves a
prevailing party represented by insurance counsel who requested attorney fees under a contractual
provision similar to that at issue here. See Harold Meyer Drug v. Hurd, 23 Wn. App. 683, 687-
88, 598 P.2d 404 (1979) (party’s representation by public legal services corporation and having
paid no actual attorney fees immaterial to determination of reasonable legal fees under statute);
Pub. Utils. Dist. 1 v. Crea, 88 Wn. App. 390, 396, 945 P.2d 722 (1997) (attorney fees allowed
under statute providing for reasonable attorney fees even if paid by an insurer). The only cited
case involving contractually based attorney fees, Metropolitan Mortgage & Securities Co. v.
Becker, provided for “reasonable attorney fees,” apparently without limiting fees for parties
represented by in-house counsel. 64 Wn. App. 626, 632, 825 P.2d 360 (1992).
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No. 47749-1-II
We affirm the trial court’s denial of Iron Gate’s summary judgment motion, motion in
limine, and CR 50 motions, reverse the trial court’s attorney fee award to Tapio, and direct that
both parties bear their own appellate attorney fees.
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.
JOHANSON, J.
We concur:
WORSWICK, P.J.
SUTTON, J.
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