Opinion
No. 53222-7-I
Filed: August 23, 2004 UNPUBLISHED OPINION
Appeal from Superior Court of Snohomish County. Docket No: 02-2-05569-7. Judgment or order under review. Date filed: 10/03/2003. Judge signing: Hon. Thomas J Wynne.
Counsel for Appellant(s), James Jennings Jameson, Attorney at Law, 805 164th St SE Ste 206, Mill Creek, WA 98012-6316.
Counsel for Respondent(s), M. Geoffrey G. Jones, Attorney at Law, 1820 32nd St, PO Box 79, Everett, WA 98206-0079.
1st Columbia Mortgage and Joel Pearson appeal a monetary judgment against them for damages for breach of contract and negligence arising from the untimely closing of a new loan to Orion Burns and Karla Burns (Burns). The loan was to refinance a delinquent loan that was foreclosed by a trustee's sale on February 1, 2002. Because there was sufficient evidence to support the findings of fact and those findings support the conclusions of law, we affirm. We also impose sanctions against 1st Columbia and Pearson for this frivolous appeal.
Burns formerly owned residential property in Snohomish, Washington. They lost that property following a foreclosure sale by a trustee under a deed of trust on February 1, 2002. Burns sued 1st Columbia and Pearson, claiming they lost their home because of the actions or omissions of these defendants.
In October 2001, Burns received a notice of trustee's sale stating their property would be sold at a foreclosure sale set for February 1, 2002 unless they cured defaults under the loan documents. They found a loan officer who could help them refinance, Joel Pearson who worked for 1st Columbia Mortgage. Their initial contact with Pearson was in December 2001. At that time, the home was appraised at $470,000. The underlying indebtedness to pay off the then existing loan, including costs of foreclosure, was approximately $322,455. Burns' equity in the property was $147,560.
Burns and 1st Columbia entered into a written agreement in which the company agreed to use its best efforts to secure refinancing. In mid-January 2002, Pearson obtained a preliminary commitment for title insurance which included a copy of the notice of trustee's sale setting the date on February 1, 2002. But he failed to note that information. Significantly, he told Burns they would not need any cash at closing.
On January 24, the loan file reached an escrow office to close the loan. Scott Anderson, the escrow agent, noticed the trustee's sale was scheduled for February 1, 2002. But Pearson told Anderson the trustee's sale had been extended for a week. Anderson took the loan documents to Burns for them to sign on January 24, 2002. He informed Burns that they needed $6,014 at closing to pay all costs and satisfy all payoffs. They had no knowledge of this requirement prior to this.
Pearson subsequently called Burns and told them that contrary to his representations of December 2001, they would now need cash to close the loan. Burns needed additional time to come up with the $6,014 from a special account.
On February 1, 2002, Karla Burns delivered a check to cover the closing costs to Pearson. Loan funds were already in escrow at that time. Pearson then delivered the check to escrow. Later that day the loan closed.
But no one notified the trustee of the deed of trust in foreclosure that the refinance to pay off the defaulted loan was closing. Thus, the trustee conducted the foreclosure sale as scheduled, at 10:30 a.m. on February 1, 2002. The successful bidder at the sale bid $322,441.07 to purchase the property. That bidder later sent a notice of eviction to Burns, and they were forced to vacate.
On February 8, 2002, Pearson called Burns and informed them that a mistake had been made because he thought the sale was on February 8, 2002.
Burns filed suit and following a bench trial, and the trial court entered judgment for $184,897.80 against 1st Columbia and Pearson. 1st Columbia and Pearson appeal.
BREACH OF CONTRACT
1st Columbia argues that it did not breach its loan agreement with Burns. We disagree.
We note that the agreement at issue is between Burns and 1st Columbia. Pearson signed the agreement in a representative capacity, not individually. Thus, we must decide if 1st Columbia breached the agreement to use best efforts by Pearson's actions or omissions. The supreme court in Suess v. Heale stated:
68 Wn.2d 962, 966-67, 416 P.2d 458 (1966).
Intention or meaning in a contract may be manifested or conveyed either expressly or impliedly, and it is fundamental that that which is plainly or necessarily implied in the language of a contract is as much a part of it as that which is expressed. If it can be plainly seen from all the provisions of the instrument taken together that the obligation in question was within the contemplation of the parties when making their contract or is necessary to carry their intention into effect, the law will imply the obligation and enforce it. The policy of the law is to supply in contracts what is presumed to have been inadvertently omitted or to have been deemed perfectly obvious by the parties, the parties being supposed to have made those stipulations which as honest, fair, and just men they ought to have made. Therefore, whatever may fairly be implied from the terms or nature of an instrument is, in the eyes of the law, contained in it. (W)hat is implied in law need not be expressed. 17 Am.Jur.2d, Contracts, sec. 255 at 649 (1964).
Here, we must determine whether the trial court's findings of fact are supported by substantial evidence. Any unchallenged findings of fact are verities on appeal. We may decline to examine assignments of error that are unsupported by argument and citation to authority. We must also determine whether the findings of fact support the conclusions of law, and we review conclusions of law de novo.
Bering v. SHARE, 106 Wn.2d 212, 220, 721 P.2d 918 (1986) (citing Thorndike v. Hesperian Orchards, Inc., 54 Wn.2d 570, 575, 343 P.2d 183 (1959)), cert. denied, 479 U.S. 1050 (1987).
Cowiche Canyon Conservancy v. Bosley, 118 Wn.2d 801, 808, 828 P.2d 549 (1992) (citing Nearing v. Golden State Foods Corp., 114 Wn.2d 817, 818, 792 P.2d 500 (1990)).
Ottgen v. Clover Park Technical College, 84 Wn. App. 214, 218 n. 2, 928 P.2d 1119 (1996) (citing State v. Lord, 117 Wn.2d 829, 853, 822 P.2d 177 (1991), cert. denied, 506 U.S. 856 (1992); State v. Dennison, 115 Wn.2d 609, 629, 801 P.2d 193 (1990)).
Miller v. Badgley, 51 Wn. App. 285, 290, 753 P.2d 530 (1988) (citing Holland v. Boeing Co., 90 Wn.2d 384, 390, 583 P.2d 621 (1978)); Bingham v. Lechner, 111 Wn. App. 118, 127, 45 P.3d 562 (2002) (citing City of Seattle v. Megrey, 93 Wn. App. 391, 393, 968 P.2d 900 (1998), review denied, 149 Wn.2d 1018 (2003)).
Appellants Pearson and 1st Columbia make numerous assignments of error. However, in their brief, they fail to support most assignments of error with argument or authority.
1st Columbia appears to challenge finding 18, which states that there was an implied term in the contract that 1st Columbia would secure a refinance loan for Burns prior to the Trustee's sale on February 1, 2002. The challenge is unpersuasive.
Although the agreement sets no express deadline to obtain financing and states that financing is not guaranteed, the court properly implied that 1st Columbia would secure refinancing, if at all, by February 1, 2002. The sole purpose of the refinancing was to avert the loss of the property by a trustee's sale. Pearson knew that Burns' property was in danger of a foreclosure sale and the loan would have to be closed prior to that sale. To secure the loan after the Trustee's sale would have defeated the purpose of obtaining the refinancing.
Exhibit 8 (The agreement states, 'Agent's Duties — Agent shall use its best efforts to secure financing for Client. Agent does not warrant that financing will actually be obtained.).
Given the contemplation of the parties making the contract and the obvious purpose of securing financing, there was substantial evidence to support the court's decision in finding 18.
This finding supports the conclusion of law that 1st Columbia breached its contract with Burns. The loan funds were in escrow, but the untimely notice of the change in conditions requiring over $6,000 to close the loan breached the agreement. The untimely notice was caused by Pearson's failure to pay attention to the February 1, 2002 critical date.
Pearson and 1st Columbia next argue that Burns breached the contract by failing to tender $6,014 of closing costs on January 26, 2002. This argument fails because it directly contradicts unchallenged finding 15 that found Burns had no knowledge of the fact that they would need additional funds to close the transaction until Anderson, the escrow agent, met with them. Additionally, unchallenged finding 16 states, that Burns 'had a reasonable belief initially that they would not have to come up with any additional money.' Because Burns had no knowledge of the additional money they would need to close the loan until six days before the actual foreclosure sale, the court correctly concluded that they did not breach the terms of the contract by tendering the closing costs to Pearson on February 1, 2002.
In re the Marriage of Brewer, 137 Wn.2d 756, 766, 976 P.2d 102 (1999) (any unchallenged findings of fact are verities on appeal).
We conclude that 1st Columbia breached its contract with Burns and that damages for breach were appropriate.
NEGLIGENCE
1st Columbia and Pearson argue that they were not negligent in handling this transaction. We disagree.
All the elements of negligence — duty, breach, causation, and injury — are present in this case.
Keller v. City of Spokane, 146 Wn.2d 237, 242, 44 P.3d 845 (2002).
Time was of the essence in this transaction and the contract implied a duty to provide timely refinancing. 1st Columbia and Pearson, as an agent of 1st Columbia, had a duty to ensure that Burns had timely notice of the changed loan conditions to provide cash to close. Pearson and 1st Columbia breached this duty by failing to notify Burns that they would need $6,014 in cash to close the loan, failing to recognize the date of the trustee's sale, and ultimately failing to provide timely financing of the loan. Unchallenged finding 14 shows that Pearson had a preliminary commitment for title insurance in his loan file that indicated that the trustee's sale was scheduled for February 1, 2002. Pearson was negligent because he only 'perused' that document until sometime after the property had been sold on February 1, 2002.
Pearson was also negligent because he led the escrow agent, Anderson, to believe the sale was delayed or extended to February 8. Because Pearson failed to notify Anderson of the true date of sale, Anderson was not able to request that the trustee delay the sale.
Finally, unchallenged finding 15 that Burns had no knowledge of the fact that they would be required to come up with over $6,000 to close the transaction demonstrates they were not negligent.
The failure of Pearson and 1st Columbia to take the steps necessary to inform Burns of their obligations and to provide financing in a timely fashion was the proximate cause of the loss to Burns.
1st Columbia and Pearson argue that an apportionment of damages is required. We disagree.
RCW 4.22.070 allows apportionment of damages only in negligence actions involving fault of more than one entity. Here Pearson and 1st Columbia are the only negligent parties. Apportionment of damages was not warranted.
FRIVOLOUS APPEAL
Rule of Appellate Procedure (RAP) 18.9(a) allows us, on our own motion, to order a party who files a frivolous appeal to pay 'terms or compensatory damages' to another party harmed by the party's actions. In determining whether an appeal is frivolous and was, therefore, brought for the purpose of delay, justifying the imposition of terms and compensatory damages, we are guided by the following considerations: (1) A civil appellant has a right to appeal under RAP 2.2; (2) all doubts as to whether the appeal is frivolous should be resolved in favor of the appellant; (3) the record should be considered as a whole; (4) an appeal that is affirmed simply because the arguments are rejected is not frivolous; and (5) an appeal is frivolous if there are no debatable issues upon which reasonable minds might differ, and it is so totally devoid of merit that there was no reasonable possibility of reversal. Here, the unchallenged findings clearly demonstrate that 1st Columbia breached its contract with Burns. Likewise, the record clearly establishes 1st Columbia and Pearson were negligent. There is simply no reasonable possibility of reversal and terms are warranted.
In re Marriage of Penry, 119 Wn. App. 799, 804, 82 P.3d 1231 (2004).
Streater v. White, 26 Wn. App. 430, 434-35, 613 P.2d 187 (1980).
We note that the agreement between 1st Columbia and Burns contains a provision permitting the prevailing party to be awarded fees. Burns are the prevailing party here and would be entitled to fees on this independent basis. Nevertheless, we base our award on RAP 18.9.
Both fees and costs on appeal shall be awarded to Burns upon timely compliance with RAP 18.1. In addition, sanctions totaling $1,000 shall be paid to Burns by 1st Columbia, Pearson, and their counsel.
We affirm the order and judgment and award terms against 1st Columbia Mortgage and Pearson.
COX, APPELWICK and AGID, JJ.