Elite Cornerstone Construction, Llc., Resp/cr-app's V. Park Place Motors, App/cr-resp ( 2021 )

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
PARK PLACE MOTORS, LTD.,
a Washington corporation, No. 81640-3-I
Appellant/ Cross-Respondent, DIVISION ONE
v. PUBLISHED OPINION
ELITE CORNERSTONE
CONSTRUCTION,
LLC, a Washington limited liability
company; LINVILLE LAW FIRM, PLLC,
a Washington professional limited
liability company; LAWRENCE BALLIS
LINVILLE and JANE DOE LINVILLE 1,
his spouse and the marital community
comprised thereof, DAVID E. LINVILLE
and JANE DOE LINVILLE 2, his spouse
and the marital community comprised
thereof; and CHRISTIAN LINVILLE and
JANE DOE LINVILLE 3, his spouse and
the marital community comprised
thereof,
Respondent/ Cross-Appellant.
COBURN, J. — After Elite Cornerstone Construction, LLC (Elite) obtained a
writ of garnishment with Park Place Motors (PPM) as the judgment debtor, PPM
filed a separate lawsuit challenging the garnishment and then voluntarily
dismissed the suit. Under RCW 6.27.230, the garnishment attorney fee
provision, the superior court awarded attorney fees and costs to Elite after the
Citations and pin cites are based on the Westlaw online version of the cited material.
No. 81640-3-I/2
dismissal. PPM appeals and Elite cross-appeals, arguing that the superior court
should have granted Elite’s request for additional attorney fees and costs
incurred after the superior court’s initial award.
For the purposes of RCW 6.27.230, PPM’s separate action constituted a
controversion of garnishment and Elite was the “prevailing party” after the court
granted PPM’s action to voluntarily dismiss its action. Thus, Elite established a
basis to request attorney fees and costs under the garnishment fee provision.
However, Elite requested its fees in PPM’s dismissed lawsuit. Elite did not
establish entitlement for a fee award under the causes of action brought under
that cause number. Given this holding, we deny Elite’s cross-appeal. Therefore,
we affirm in part, reverse in part, and remand for the trial court to vacate its order
of attorney fees and costs under the PPM action cause number.
FACTS AND PROCEDURAL HISTORY
There are no relevant disputed facts. PPM, a car dealership, hired Elite to
paint a commercial building. PPM eventually replaced Elite with another
contractor and refused to pay Elite money that Elite believed it was owed.
In September 2019, Elite sued PPM (Elite Action) in King County Superior
Court and obtained a judgment against PPM for a total of $134,035.30 under
cause number 17-2-14665-0.
In November 2019, Elite, through counsel at the Linville Law Firm, PLLC,
obtained a writ of garnishment from the superior court against Banner Bank for
the portion of the judgment that PPM had not satisfied. Banner Bank held the
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deposit account for PPM. Banner Bank signed the answer to the writ of
garnishment on or around November 25, 2019. 1
On December 5, 2019 under cause number 19-2-32231-4 (PPM Action),
PPM sued Elite, Linville Law Firm, PLLC, and three attorneys at the Linville firm 2
in an action separate from the garnishment proceedings. PPM alleged causes of
action for conversion and wrongful garnishment. 3
On December 27, 2019, an attorney for Elite, Christian Linville, filed an
application for judgment and order to pay in the Elite Action, stating, in relevant
part, that “[t]here is no unresolved exemption claim and there is no
controversion.” (Emphasis added.)
The same day, the superior court issued a written judgment and order to
pay in the Elite Action, which ordered PPM to pay Elite a judgment of
$131,062.05 plus $465.00 in costs. Banner Bank paid the judgment from PPM’s
1 Elite’s law firm, Linville Law Firm, received a copy of the answer on
December 2, 2019. The record does not establish the exact date the answer
was filed with the court or when PPM received a copy of the answer. However,
on appeal PPM does not contend that it did not receive Banner Bank’s answer or
that the answer was somehow late or delayed.
2 For clarity, we refer to the defendants collectively as Elite.
3 According to PPM, Elite’s garnishment was improper because a third
party, NextGear Capital, Inc., had a perfected security interest in the money in
the bank account at issue pursuant to a promissory note and security agreement
between NextGear and PPM (“NextGear Security Agreement”). PPM alleged
that at the time Elite caused the writ to be served on Banner Bank, it had actual
knowledge of the NextGear Security Agreement and constructive notice that
NextGear had filed a UCC-1 financing statement claiming a security interest in all
of PPM’s assets.
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bank account to the court registry, which then turned the money over to Linville
Law Firm, PLLC. 4
In February 2020, PPM moved to voluntarily dismiss the PPM Action
without prejudice pursuant to CR 41(a)(1)(B). The following month, the court
granted PPM’s motion for voluntary dismissal without prejudice and allowed for
either party to bring a motion for attorney fees or costs.
Elite, under the cause number for the PPM Action, then moved for
attorney fees and costs, requesting a total of $43,968.46 in attorney fees and
costs. On April 30, 2020, the superior court entered an order under the same
cause number granting Elite’s motion. The court listed two grounds for the
award: First, that Elite was the prevailing party for the purpose of awarding
attorney fees under RCW 6.27.230; and, second, that PPM’s actions overall were
“factually and legally unsupportable, frivolous, and advanced without reasonable
cause in violation of RCW 4.84.185.”
PPM moved for reconsideration, and Elite moved for entry of judgment.
The superior court entered an order granting in part and denying in part PPM’s
motion for reconsideration. The court vacated its award for defendants’ attorney
fees and costs pursuant to RCW 4.84.185. PPM’s motion for reconsideration
was denied in all other respects and the April 30, 2020 order remained effective.
4 On or around January 17, 2020, well after the deadline to controvert,
attorney Henry Dean, on behalf of PPM, filed a declaration controverting Banner
Bank’s answer to the garnishment in the Elite Action. Dean controverted Banner
Bank’s answer on essentially the same grounds listed in PPM’s complaint. As far
as the record before us reflects, Banner Bank did not respond and no party noted
a hearing for a determination of whether an issue was presented that requires a
trial, as permitted by the garnishment procedures at RCW 6.27.220.
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Elite had requested attorney fees and costs in opposing PPM’s motion for
reconsideration; the superior court denied Elite’s request for these additional
fees. PPM then filed a response opposing Elite’s motion for entry of judgment;
Elite replied.
On June 19, 2020, the superior court entered a judgment awarding Elite
$43,968.46 in attorney fees and costs in the PPM Action. The post-judgment
interest rate was listed at 12 percent per annum.
PPM appeals; Elite cross-appeals.
DISCUSSION
The disputes here are solely about attorney fees and costs. PPM argues
that the superior court erred by granting Elite its attorney fees and costs in PPM’s
action pursuant to RCW 6.27.230. In contrast, Elite’s cross-appeal argues that
the trial court erred by not awarding it additional attorney fees and costs incurred
for having to respond in the superior court proceedings after the trial court’s initial
award of attorney fees on April 30, 2020.
We apply a two-part standard of review to a trial court’s award or denial of
attorney fees: (1) we review de novo whether there is a legal basis for awarding
attorney fees by statute, under contract, or in equity, and (2) we review a
discretionary decision to award or deny attorney fees and the reasonableness of
any attorney fee award for an abuse of discretion. Falcon Properties LLC v.
Bowfits 1308 LLC, 16 Wn. App. 2d 1, 11, 478 P.3d 134 (2020) (citing Gander v.
Yeagar, 167 Wn. App. 638, 647, 282 P.3d 1100 (2012)).
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The issue in PPM’s appeal is whether the trial court erred by granting
Elite its attorney fees and costs in the PPM Action pursuant to RCW 6.27.230.
RCW 6.27.230 provides “Where the answer is controverted, the costs of
the proceeding, including a reasonable compensation for attorney’s fees, shall be
awarded to the prevailing party. . .” (Emphasis added.) Thus, to be awarded
attorney fees under the statute, the answer must be “controverted” and the party
requesting fees must be the “prevailing party.” PPM argues that Elite meets
neither of these requirements.
As a threshold issue, PPM argues that Elite should be judicially estopped
from arguing that PPM controverted Banner Bank’s answer to Elite’s writ of
garnishment. PPM relies on the fact that, after PPM filed its action, an attorney
for Elite filed an application for judgment and order to pay in the Elite Action
stating in a declaration that “there is no controversion.”
Elite contends that PPM waived this argument below because it raised
judicial estoppel for the first time in its reply brief in support of reconsideration on
June 4, 2020. Elite never had the opportunity below to respond to PPM’s new
judicial estoppel argument and the superior court did not address it.
PPM incorrectly claims it raised the judicial estoppel argument in its
response opposing Elite’s motion for an entry of judgment. In fact, PPM does not
even mention “judicial estoppel” in its response brief opposing Elite’s motion for
an entry of judgment. 5
5While PPM did raise the fact that Elite’s attorney previously declared
there was no controversion, PPM did so only to argue that the attorney violated
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We agree with Elite that PPM waived its judicial estoppel argument and
decline to address it. See Blueberry Place Homeowners Ass’n v. Northward
Homes, Inc., 126 Wn. App. 352, 362, 110 P.3d 1145 (2005) (declining to address
party’s argument that opposing party’s bad faith litigation conduct provided an
independent basis to award attorney fees because, although the issue of the
alleged bad faith litigation had been raised below, it was not addressed by the
trial court).
A. Controversion
PPM argues that it did not “controvert” Banner Bank’s garnishment answer
within the meaning of RCW 6.27.230 because it brought an entirely separate
action for “conversion” and damages under 42 U.S.C. § 1983.
RCW 6.27.210 provides the following procedure to controvert a
garnishee’s answer:
If the garnishee files an answer, either the plaintiff or the defendant,
if not satisfied with the answer of the garnishee, may controvert
within twenty days after the filing of the answer, by filing an affidavit
in writing signed by the controverting party or attorney or agent,
stating that the affiant has good reason to believe and does believe
that that answer of the garnishee is incorrect, stating in what
particulars the affiant believes the same is incorrect.
We previously recognized that filing an affidavit is not the only way a party
may controvert a garnishee’s answer. Blair v. GIM Corp. Inc., 88 Wn. App. 475,
945 P.2d 1149 (1997). In Blair, the issue was whether a judgment debtor
“controverted” the garnishee’s answer, for the purposes of awarding attorney
the Rules of Professional Conduct 3.3 regarding candor to the tribunal. PPM
does not continue this line of argument on appeal.
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No. 81640-3-I/8
fees and costs under RCW 6.27.230, by filing a motion to quash the writ of
garnishment. Id. at 477. The basis of the motion to quash was that the
garnishment proceedings were precluded by a stipulation agreement with the
judgment creditor. Id. at 477.
We rejected Blair’s argument that the garnishment statutes—specifically
RCW 6.27.210—mandate the use of an affidavit as the exclusive means of
controverting the garnishee’s answer: “We find no ambiguity as the statute
provides either the plaintiff or the defendant ‘may . . . by filing an affidavit’
controvert the answer of the garnishee. The word ‘may’ is permissive and not
mandatory and shows in the context of this statute an elective right to use the
affidavit procedure.” Id. at 480. We explained that although the purpose of the
garnishment laws was to simplify procedures, they did not prohibit more involved
procedures:
[T]he garnishment laws were designed to simplify the procedures
for remediating judgment creditor/debtor relationships, when
confronted with collection problems in garnishment proceedings.
We reason the permissive use of this simplified procedure does not
exclude the use of a more involved procedure in the form of a
motion to quash a garnishment, attacking the validity of an
underlying judgment or the ability to collect it.
Id. The court concluded that precedent “demonstrate[s] the court’s concern for
substance over form regarding controversion of a garnishee’s answer,” and held
that the respondents successfully controverted the answer, and affirmed the trial
court’s award of attorney fees and costs under RCW 6.27.230. Id. at 481.
The same logic applies here. Although PPM did not use the permissive
affidavit procedure in RCW 6.27.210, PPM “controverted” Banner Bank’s answer
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No. 81640-3-I/9
by filing its action alleging “wrongful garnishment” on or around December 5,
2019.
PPM attempts to distinguish its case from Blair because it filed a separate
action and added Elite’s attorney as parties to its action. However, PPM fails to
provide any legal authority for the proposition that a party cannot controvert the
answer in a separate action and add additional parties. Both the permissive
language of RCW 6.27.210—“may” file an affidavit—and the reasoning in Blair
lead us to conclude that PPM controverted Banner Bank’s answer to the writ of
garnishment and, thus, the provision for attorney fees and costs under RCW
6.27.230 applies to these circumstances.
B. Prevailing Party
While acknowledging that, generally, a party who obtains a judgment is a
prevailing party, PPM contends that Elite is not a prevailing party because no
judgment was entered after PPM voluntarily dismissed its action.
Who is a “prevailing party” presents a mixed question of law and fact that
this court reviews under the error of law standard. Hernandez v. Edmonds
Memory Care, LLC, 10 Wn. App.2d 869, 874, 450 P.3d 622 (2019). The purpose
of statutory interpretation is to determine the intent of the legislature. Id. This
court also discerns plain meaning from the ordinary meaning of the language at
issue, the context of the statute that includes the provision, related provisions,
and the statutory scheme as a whole. Id.RCW 6.27.230 does not define “prevailing party,” nor is the term defined
elsewhere in the garnishment statutes. “Whether an individual is a prevailing
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party after voluntary dismissal turns on whether the claimant meets the
conditions of the specific statute that authorizes the fees.” AllianceOne
Receivables Mgmt., Inc. v. Lewis, 180 Wn.2d 389, 394, 325 P.3d 904 (2014).
The parties cite cases defining “prevailing party” after dismissal under other
statutes unrelated to RCW 6.27.230; because this issue turns on the specific
statute authorizing the fees, we find the cases cited by the parties unpersuasive.
Fees are authorized where the answer to a writ of garnishment is
controverted. PPM controverted the answer from Banner Bank claiming
conversion and wrongful garnishment. Had PPM challenged the garnishment as
part of the garnishment proceedings in the Elite Action, it would have prompted a
response from Elite. Regardless of whether PPM would have voluntarily
dismissed its controversion in the Elite Action prior to a trial, the end result would
have been a judgment and order either in Elite’s favor or PPM’s favor. In other
words, following a controversion one party will prevail and shall be awarded fees
and costs.
The legislature’s choice to require attorney fees and costs to be awarded
to a prevailing party following a controversion suggests that meritless challenges
to garnishments and improper garnishments are discouraged. Any lack of a
judgment specific to the PPM Action is a direct result of PPM choosing to
challenge the garnishment in a separate action and voluntarily dismissing it. If
we were to follow PPM’s logic, it would create an end run around RCW 6.27.230
allowing parties to avoid paying attorney fees where the legislature has
determined that they should.
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Elite successfully urged the court to issue a writ of garnishment in its
favor. Elite obtained the relief it sought in the action—the garnishment of PPM’s
bank account to satisfy its debt. Though the PPM Action was under a separate
cause number from the Elite Action, for the reasons detailed above, the
garnishment statutory scheme indicates that a controversion can take various
forms, and we view the “prevailing party” as similarly encompassing the
controversion in this case. Elite was the “prevailing party” for the purposes of
RCW 6.27.230.
C. Post-judgment interest
PPM challenges the 12 percent per annum post-judgment interest rate the
court assigned to its judgment awarding Elite attorney fees and costs. PPM
argues that because its action, or Elite’s argument that the garnishment was
controverted, “sounded in tort,” the judgment rate should be governed by RCW
4.56.110(3)(b), generally governing interest rates on judgments founded on the
tortious conduct of individuals or other entities. PPM offers no legal authority
supporting its argument that the judgment of attorney fees and costs here was
founded on tortious conduct. As detailed at length above, attorney fees and
costs were awarded to Elite pursuant to RCW 6.27.230, the fee-shifting statute
for garnishments. The catch-all provision in RCW 4.56.110(6) is the statute that
would be applicable, which sets the interest rate at 12 percent per annum. Thus,
we reject PPM’s argument that RCW 4.56.110(3)(b) applies to judgments under
the garnishment provision.
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D. Right relief; wrong cause number
Finally, PPM argues that the PPM Action, under cause number
19-2-32231-4, was an independent action for conversion and for violating 42 §
U.S.C. 1983 and that neither of these allow for an award of attorney fees and
costs to Elite under the circumstances present here. PPM is correct in that Elite
did not establish entitlement for a fee award under the causes of action brought
in cause number 19-2-32231-4. While Elite did establish a lawful basis for
attorney fees under RCW 6.27.230 because PPM controverted the garnishment,
the relief Elite requested related to cause number 17-2-14665-0, the garnishment
action. Thus, we remand for the superior court to vacate its order of attorney
fees and costs under cause number 19-2-32231-4.
Lastly, Elite cross-appeals, arguing that the superior court erred by
denying Elite’s request for additional attorney fees and costs incurred in
proceedings after the court’s April 30, 2020 initial order awarding Elite attorney
fees. Elite and PPM also both request attorney fees on appeal. Because neither
party was entitled to attorney fees in the PPM action below, cause number 19-2-
32231-4, we deny Elite’s cross-appeal and do not award attorney fees to either
party on appeal.
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We grant PPM’s appeal and deny Elite’s cross-appeal.
Reversed in part, affirmed in part, and remanded for action consistent with
this opinion.
WE CONCUR:
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