Opinion
No. 59954-2-I.
September 2, 2008.
Appeal from a judgment of the Superior Court for Whatcom County, No. 00-2-00592-6, Michael E. Rickert, J., entered April 26, 2007.
This is an appeal of a case the trial court decided on remand after we reversed an order denying attorney fees to realtor defendants Jones, et al. In Lee v. Page, No. 56363-7-1 (November 6, 2006), we remanded for the trial court to determine attorney fees the realtor defendants incurred in defending against Lee's contract claims. On remand, the trial court again denied realtor defendants' motion for attorney fees, concluding that they did not spend any time defending against Lee's breach of contract claims and failed to segregate the fees they incurred in defending the contract claims. Defendant realtors appeal, contending that because Lee's negligence claims were actions "on a contract," they were entitled to attorney fees. Because at least some of the negligence claims were based on the listing agreements and may entitle the realtors to attorney fees incurred in defending against those claims, we must remand to the trial court to make that determination.
FACTS
Britt Lee sued her real estate agent Vera Jones, Coldwell Banker Miller-Arnason, LLC and its broker Gragg Miller ("realtors") for breach of contract and professional negligence arising out of six real estate transactions. Defendant realtors prevailed at trial, but were denied attorney fees under the terms of the purchase and sale agreement and the listing agreement because the contracts were unenforceable.
A more detailed recital of the facts is set forth in our previous opinion. See Lee v. Page, noted at 135 Wn. App. 1037, slip op. at 2-5 (2006). For purposes of this appeal, we need not repeat them here.
Lee, slip op. at 4.
On appeal, we reversed, holding that "the realtor defendants could be entitled to attorney fees even if the trial court properly ruled that the contracts were unenforceable," and that they were "entitled to fees expended defending against Lee's contract claim." But we also noted that it appeared from the record that the contract claims were abandoned and remanded to the trial court "to determine what fees, if any, the realtor defendants incurred in defending against Lee's contract claims."
Lee, slip op. at 7.
Lee, slip op. at 8.
On remand, the realtors did not identify those fees that were incurred in defending against the contract claims, but argued that because the negligence claims arose out of the contract, they were entitled to all the fees they incurred defending against the negligence claims. The trial court denied the motion, concluding that based on our mandate, it could award only those fees that were incurred in defense of the contract claim, not the negligence claims. The realtors appeal.
DISCUSSION
"`[A]n 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.'" In Edmonds v. John L. Scott Real Estate, Inc., we held that claims of negligence and breach of fiduciary duty were actions "`on a contract,'" and affirmed an award of attorney fees based on a real estate buyer/broker contract provision because the duty alleged to have been breached was created under and defined by the buyer/broker agreement. Similarly, in Brown v. Johnson, we held that an attorney fees provision in a purchase and sale agreement applied in a suit for misrepresentation in the sale of a home. We concluded that even though the claims arose out of tort duties and were based on the written disclosure statement, the misrepresentation action arose out of the parties' agreement to transfer ownership of the home, and the purchase and sale agreement was central to the claims.
Edmonds v. John L. Scott Real Estate, Inc., 87 Wn. App. 834, 855, 942 P.2d 1072 (1997) (alteration in original) (quoting Tradewell Group, Inc. v. Mavis, 71 Wn. App. 120, 130, 857 P.2d 1053 (1993)), review denied, 134 Wn.2d 1027 (1998).
87 Wn. App. 834, 855-56, 942 P.2d 1072 (1997), review denied, 137 Wn.2d 1027 (1998).
109 Wn. App. 56, 59-60, 34 P.3d 1233 (2001).
Id. at 59. See also Hill v. Cox, 110 Wn. App. 394, 412, 41 P.3d 495 (buyer's timber trespass claim against seller for violating logging provision in real estate contract "arose out of the contract," entitling buyer to attorney fees), review denied, 147 Wn.2d 1024 (2002).
Here, Lee ultimately abandoned her breach of contract claims, but also asserted claims of professional negligence based on the defendant realtors' duty "to exercise the appropriate standard of care in the selection, completion and drafting of all contracts at issue in the matter." At trial, she claimed that they negligently drafted the holdback provision and the inspection provision of the purchase and sale agreements, and that they forged the listing agreements. Thus, the negligence claims against which the realtors defended did appear to "arise out of the contract," triggering the attorney fees provisions. To the extent this conclusion is inconsistent with the ruling in our previous opinion that the realtors were not entitled to fees incurred defending against the negligence claim, we now clarify that opinion and hold that the realtors may be entitled to attorney fees incurred to defend against the negligence claims if they arose out of the parties' agreements.
But we also note that the trial court found that "at no time in pleadings or arguments did plaintiffs' [sic] make a claim against any defendant on contract based upon, arising out of, or central to any purchase and sale agreement," and the realtors do not assign error this finding. It is therefore a verity on appeal.
(Emphasis added.)
State v. Hill, 123 Wn.2d 641, 644, 870 P.2d 313 (1994).
There is thus no basis for an award of attorney fees based on an action arising out of the purchase and sale contracts. The realtors urge us to interpret the words "on contract" in this finding to mean that the plaintiffs did not have any breach of contract claims arising out of the purchase and sale agreements, which would not bar them from seeking fees for defending against the negligence claims arising out of the purchase and sale contracts. We do not find this interpretation persuasive. There is nothing in the trial court's findings to suggest that the court intended to limit this finding to breach of contract claims. Rather, by using the broader term "on contract," it was referring to any claim based on the contract "including tort actions" not just breach of contract claims, as the realtors suggest. Thus, given this unchallenged finding, there is no basis for attorney fees incurred in defending against any claims arising out of any of the purchase and sale agreements.
But because this finding does not refer to any claims based on the listing agreement, the realtors may still be entitled to attorney fees incurred in defending against any negligence claims that arose out of the listing agreement. Thus, the realtors must segregate the fees they incurred in defending against the negligence claims that were based on the listing agreement so the trial court can determine what the fee award should be. We must therefore remand to the trial court to make this determination and to award attorney fees accordingly. As we noted in our previous opinion, the trial court should also award fees incurred on appeal to the extent they relate to the argument that realtors are entitled to fees for claims arising out of the listing agreements.
Nor is there any other unchallenged finding that refers to claims based on the listing agreement.
See Hume v. Am. Disposal Co., 124 Wn.2d 656, 672-73, 880 P.2d 988 (1994) cert. denied, 513 U.S. 1112 (1995). ("[If] an attorney fees recovery is authorized for only some of the claims, the attorney fees award must properly reflect a segregation of the time spent on issues for which attorney fees are authorized from time spent on other issues," unless the trial court finds the claims so related that no reasonable segregation can be made).
For the Court:
WE CONCUR: