Opinion
No. 48217-3-I
Filed: August 5, 2002 UNPUBLISHED OPINION
Appeal from Superior Court of King County, No. 99-2-24521-1, Hon. Jay White, March 5, 2001, Judgment or order under review.
Counsel for Appellant(s), Howard M. Goodfriend, Edwards Sieh Smith Goodfriend P.S., 701 5th Ave Ste 7170, Seattle, WA 98104.
Charles M. Greenberg, 126 3rd Ave S Ste 101, Edmonds, WA 98020-8402.
Brendan P. Finucane, Edwards Sieh Smith Goodfriend, 701 5th Ave Ste 7170, Suite 7170, Seattle, WA 98104.
Counsel for Respondent(s), Fred S. Finkelstein, 1450 114th Ave S.E. #205, Bellevue, WA 98004-6934.
Patricia A. Richardson, 33530 1st Way S, P.O. Box 9718, Federal Way, WA 98063-9718.
Fred S. Finkelstein, 1450 114th Ave S.E. #205, Bellevue, WA 98004-6934.
Better Financial Solutions, Inc. ("BFS") appeals the summary judgment dismissal of its claims against the City of Federal Way; Lakeside Industries, a general contractor on a public works project for the City of Federal Way ("Lakeside"); Reliance Insurance Co., the general contractor's surety ("Reliance"); and Contractors Bonding Insurance Co, the surety of the subcontractor Breland Enterprises, Inc. ("CBIC"). The trial court determined that BFS did not properly file its claim against the City and also that it was not a proper claimant under the applicable statutes and under CBIC's bond. We affirm.
FACTS
Lakeside was the prime contractor on a public works project for the City of Federal Way. As required by RCW 39.08.010, it obtained a performance and payment bond and a retainage bond for which Reliance was surety. Lakeside subcontracted with Breland to perform concrete work on the project. CBIC was surety on Breland's performance and payment bond. Pursuant to RCW 60.28.011(1), the public works retainage statute, the City retained a portion of its contract payments to Lakeside.
Breland's contract with BFS is entitled "Agreement to Supply Temporary Labor." The agreement provides in part:
Whereas, CLIENT [Breland] desires to obtain temporary personnel (EMPLOYEES) to augment the CLIENT'S work force, and Supplier [BFS] agrees to supply personnel to work under the CLIENT'S supervision and control . . . the parties hereby agree as follows. . . .
CP 109.
Breland was solely responsible for the work on the project. The contract made Breland responsible for directing the employees' on-site activities. Breland also retained full control over the means and methods of work and procedures to be used on the job site. The contract provided that Breland was to provide on-site supervisory personnel and required it to maintain the job site in compliance with Occupational Safety and Health Act ("OSHA") and Washington Industrial Safety and Health Act ("WISHA") rules as well as other applicable regulations. The contract gave Breland the right to terminate a worker at any time.
All of the persons who worked under the contract between BFS and Breland had previously been Breland employees, and BFS was not involved in hiring any of the people who worked on the concrete project under Breland's subcontract with Lakeside. BFS wrote the workers' paychecks, withheld and remitted their employment taxes and unemployment insurance, and paid industrial insurance on behalf of the workers. While the contract between BFS and Breland was in effect, Breland's employees filled out BFS's time cards and their paychecks were drawn on BFS's payroll account. BFS did not go to the job site and did not supervise the work, nor did it supply tools, equipment, or materials for the job. In exchange for these services, BFS charged a 20 percent return on the funds paid.
Breland fell behind on its payments to BFS, and BFS filed a notice of claim against the bonds. The City moved for summary judgment on the ground that BFS's second amended complaint contained no allegations against the City and no allegation seeking recovery against the retainage bond. The trial court granted the City's motion for summary judgment and dismissed all claims against the City with prejudice.
Lakeside, Reliance, and CBIC moved for summary judgment. The trial court granted the motion on two grounds: BFS did not properly file its notice of claim with the City and BFS is not a proper claimant under the statutes and the performance and payment bond. The court dismissed BFS's claims against these entities with prejudice. In addition to claims under the statutes and bonds, BFS also asserted an unjust enrichment claim against Lakeside, which the court dismissed on summary judgment as well.
DISCUSSION
Lien Statutes and the Contractor's Bond
The trial court entered summary judgment in favor of Lakeside, Reliance, and CBIC on the ground that BFS was not a proper claimant under the lien and retainage statutes, RCW 39.08.010 and 60.28.011, and under the bond. We affirm the summary judgment in favor of these entities on the basis of our opinion in Better Financial Services v. Transtech Electric, Inc. in which we held that BFS does not fall within the class of persons or entities protected by the lien and retainage statutes and is therefore not a proper claimant under bonds furnished pursuant to these statutes.
No. 48782-5-I (Wash.Ct.App. July 29, 2002).
Pre-claim Notice
BFS argues that the trial court erred by dismissing its claim on the ground that it failed to timely file a pre-claim notice pursuant to RCW 39.08.065. The trial court's order granting the respondents' motion for summary judgment does not indicate that this was a ground upon which it granted summary judgment. Rather, the order states that the grounds were BFS's failure to file its notice of claim and the fact that BFS was not a proper claimant under the bonds. There is no transcript of the hearing on the summary judgment motions or the trial court's oral opinion. However, because we hold that BFS is not a proper claimant under the bonds, we do not address whether BFS's claims should or could have also been dismissed for failing to timely file a pre-claim notice.
Filing Claim Against the City
A person claiming the benefits under a lien statute must show that he or she strictly complied with the provisions of the statute. An entity asserting a lien under a retainage bond must give notice "in the manner provided in RCW 39.08.030."
Lumberman's of Washington, Inc. v. Barnhardt, 89 Wn. App. 283, 286, 949 P.2d 382 (1997).
The trial court concluded that BFS did not strictly comply with the terms of the claim filing statute. Because we hold that BFS is not a proper claimant under the retainage statute, we do not address whether BFS failed to strictly comply with the claim filing requirements. Unjust Enrichment
BFS argues that the trial court erred by dismissing its unjust enrichment claim against Lakeside. BFS's theory is that Lakeside was "unjustly enriched by labor yet unpaid." It claims that Lakeside paid Breland all but $5,181 due under Lakeside's subcontract with Breland, but Breland paid BFS only $33,157.56 under its contract with BFS, which was less than the contract amount. This, BFS claims, unjustly enriched Lakeside.
Br. of Appellant at 38.
Lakeside does not dispute that it owes the $5,181; it is holding the funds only until a court determines the proper party entitled to it.
The fact that Lakeside benefited by the contract between Breland and BFS does not render Lakeside liable under an unjust enrichment theory. In Farwest Steel Corp. v. Mainline Metal Works, Inc., Farwest supplied steel to Mainline Metal, a subcontractor on a public works project. When Mainline Metal failed to pay Farwest, Farwest filed an action against the prime contractor claiming, among other things, entitlement to recovery under an unjust enrichment theory.
48 Wn. App. 719, 741 P.2d 58 (1987).
The court rejected Farwest's unjust enrichment claim and noted that the prime contractor had never dealt with Farwest nor committed any act of bad faith toward it. The court stated that to succeed on an unjust enrichment claim, the party must show that the enrichment was unjust both under the circumstances and as between the two parties to the transaction.
The court stated that although the prime contractor was enriched by receiving but not paying fully for goods supplied by Mainline, there was no evidence that the enrichment was unjust with respect to Farwest or that it was at Farwest's expense. The prime contractor was a mere incidental beneficiary of the contract between Farwest and Mainline and did not acquiesce in or encourage Mainline's contract with Farwest. In short, the court concluded, the prime contractor "did not contribute in any fashion to Farwest's loss."
Id., 48 Wn. App. at 733.
Similarly, Lakeside had no dealing with BFS. The record does not show that Lakeside committed an act of bad faith towards BFS. There is no evidence that Lakeside acquiesced in or encouraged Breland's contract with BFS or that it misled BFS in any fashion. As in Farwest, Lakeside, the prime contractor, was at most an incidental beneficiary of the contract between Breland and BFS and did not contribute to BFS's loss. Lakeside paid all but $5,181 that was due Breland under the Lakeside-Breland contract. Lakeside had no obligation to see that Breland paid BFS the full amount it was due under the Breland-BFS contract. The fact that Breland failed to pay BFS the full amount does not establish that Lakeside was enriched, particularly at BFS's expense. The fact that Lakeside may have breached the "joint check agreement" under which it was supposed to make checks payable to Breland and BFS jointly does not show that Lakeside was unjustly enriched. Lakeside discharged all but $5,181 of its obligation.
BFS cannot claim unjust enrichment with respect to the $5,181 Lakeside is holding because Lakeside is completely willing to release these funds once a court determines who is entitled to them.
The fact that it made the checks payable to Breland rather than Breland and BFS jointly does not support the argument that Lakeside was unjustly enriched. The trial court properly dismissed BFS's unjust enrichment claim against Lakeside.
CONCLUSION
We affirm the trial court's order granting summary judgment in favor of Lakeside, the City of Federal Way, Reliance, and CBIC and dismissing BFS's claims. We therefore deny BFS's request for attorney fees.
KENNEDY and COX, JJ., concurs.