Jerry And Sally Mulder, V Cabinet Distributors, Inc. ( 2015 )

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CABINET DISTRIBUTORS, INC., a UNPUBLISHED OPINION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
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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.
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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
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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.
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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.
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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.
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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:
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