Opinion
No. 37728-4-II.
May 12, 2009.
Appeal from a judgment of the Superior Court for Cowlitz County, No. 07-2-02026-9, Jill M. Johanson, J., entered May 5, 2008.
Reversed and remanded by unpublished opinion per Hunt, J., concurred in by Van Deren, C.J., and Armstrong, J.
UNPUBLISHED OPINION
Waste Control Recycling appeals the trial court's summary judgment in favor of EMS Multi Material. Waste Control argues that (1) there are material issues of fact about the identity of the product that Waste Control was contractually bound to deliver to EMS; and (2) more specifically, although the purchase order and invoices stated "mixed paper," the parties actually contracted for a substandard product called "shaker mix."
EMS counters that (1) there is no issue of material fact because Waste Control admitted it did not provide "mixed paper" as stated on the purchase order and invoices; and (2) extrinsic evidence is not admissible to vary or to contradict written contract terms, which specify "mixed paper." EMS also requests attorney fees on appeal under RAP 18.9(a). We reverse summary judgment, remand for trial, and deny EMS's request for attorney fees.
FACTS I. Waste Control and EMS's Business Dealings
This contract dispute concerns the grade or quality of recycled scrap paper that the parties agreed Waste Control would sell to EMS to broker and to sell to its ultimate paper mill purchaser in China: Did the parties contract for "mixed paper" or a substandard product called "shaker mix"? "Shaker mix" is considered a sub standard product, compared to "mixed paper," because it contains a high content of "outthrows" and "prohibitive materials."
"Outthrows" are "all papers that are so manufactured or treated or are in such form as to be unsuitable for consumption as the grade specified." Clerk's Papers (CP) at 32. "Prohibitive materials" are "any materials which, by their presence . . . in excess of the amount allowed, make the [product] unusable as the grade specified" or "pose a risk of damage to the equipment." CP at 32. For "mixed paper," prohibitive materials include plastics, glass, and aluminum; if the product includes too high a percentage of such prohibitive materials, it is not "mixed paper grade." CP at 22.
Reviewing the propriety of summary judgment below, we must view the facts in the light most favorable to Waste Control, the non-moving party. Accordingly, we set forth the following facts in that light.
A. 2005 Contract (Not in Dispute)
In 2005, Ken Simkins, working for EMS, entered into negotiations with Rick Campbell, a broker for Waste Control, to purchase recycled materials. In June 2005, Campbell and Simkins toured a "KB Recycling" facility in Portland, Oregon, and viewed a product that Waste Control calls "shaker mix." The parties sometimes also refer to this "shaker mix" as "KB mix."
1. EMS's search for "shaker mix" buyer
Following Simkins' June tour of the KB "shaker mix" facility, EMS struggled to find a buyer for the "KB mix." On September 1, Fritz Sparks, an EMS owner, sent Simkins an email that stated:
We got confirmation from Sun Paper in Qingdao [China] for 10 containers of mix ex Tacoma. The price works out to be $86, and this is after sending them the same photos we sent to Newport.
Looking at the facts in the light most favorable to Waste Control on summary judgment, "mix" appears to refer to the KB "shaker mix" that Campbell and Simkins had viewed at KB's Portland facility.
CP at 131. Newport CH International (Newport) is a large exporter located in Tacoma, Washington. Because Newport ships large volumes, it is able to ship recycled materials to China without a pre-shipping inspection by a Chinese inspection agency, to which the parties refer as "CCIC."
When EMS was finally able to sell the "KB mix," it was through Newport.
We cannot discern from the record the precise name of this Chinese inspection agency.
On September 8, 2005, a "Steve Cotto" sent Simkins and Sparks an email that stated:
Per the msg below [from Sun Paper], CCIC has rejected the Waste Control mix without sending out an inspector because of past experience at KB recycling.
CP at 132. The "msg" (message) to which Cotto refers in his email above read:
We were informed by CCIC officer that this supplier's materials has [sic] been rejected few times in the past, and CCIC will not send anyone to this site currently. We will go ahead and cancel this inspection schedule because of that. If you have mixed paper from other suppliers that are ready for inspection, please contact me.
CP at 132. Also on September 8, a "Joe Wen" emailed Sparks: Dear Fritz,
I just received a call from CCIC informing me about one of your packing plant [sic] in Tacoma — KB Recycling. They said that that particular plant had many rejections on the Mixed, and as such, they suggest me to cancel the inspection as they don't want to waste my money in case it fails again. As you know, we have a very good relationship with CCIC so they usually pre-select the new suppliers base [sic] on their records. . . . For now, KB inspection has been cancelled and we will not load from this plant. Please kindly ensure good quality from your other plants. Thanks. Joe.
CP at 133. On September 9, Simkins emailed Sparks:
I will ask Rick about inspection. You understand that it is unlikely this stuff is being sold as "regular" mix. I am getting the feeling the people that are buying it are Chinese, self inspection and very close to the mill.
CP at 135.
In October, Simpkins emailed Sparks:
Do you think you could get your guys to take some (I think two minimum) containers of the KB mix?
I think I could have the bales be loaded from Waste Control, when the inspector comes he is shown Waste's regular mix then lastly have three bales of Waste's mix put on the butt end?
CP at 142 (emphasis added). On October 28, Sparks replied to Simkins with the following email:
The problem we had with Waste Control was that as soon as we gave CCIC the address, they contacted our buyer and informed them that the mix from this location was of very poor quality. They never even went to see it, but our buyer asked us not to ship.
What we have been able to do here is give CCIC our plant location for most of the material we are shipping. This at least protects our supply sources from ACN.
We cannot discern from the record on appeal a more specific identity for "ACN."
CP at 143 (emphasis added). Simkins responded:
Actually it was KB [mix] they refused and when we switched to Waste Control they caught wind of it. . . . at least I think that is what happen. I was not thinking of anyone state side but you [sic] two contacts in China.
CP at 143 (emphasis added). Sparks replied:
Yes, I think you are right, now that you mention it in this context. The problem with our Xingang group is they are under scrutiny for mix due to those bad containers that arrived from Ireland this summer. . . .
The other group, Sun Paper, was the one that was alerted by CCIC of the poor reputation for our supplier ex Tacoma. I think they may smell a rat, but I will give them a call and see how they may react to a booking in Tacoma.
CP at 143 (emphasis added).
2. EMS's purchase orders
In November and December 2005, EMS sent two purchase orders to Waste Control, each requesting five containers of "mixed paper" at $76 per ton. Both purchase orders provided that "unless otherwise specified, grade is in accordance with PS standards." CP at 101. According to Sparks, EMS had agreed to purchase "No. 3 mixed paper" according to the "PS standards"; but "PS standards" were no longer in use in 2005 and 2006. Instead, the industry generally used guidelines published by the Institute for Scrap Recycling Industries (ISRI) in a Scrap Specifications Circular; but the 2006 Scrap Specifications Circular stated that grade 3 for "mixed paper" was "not currently in use."
Before Waste Control shipped to China on EMS's behalf, EMS's Fritz Sparks viewed the product at Waste Control's facility in Longview, Washington. Sparks asked Waste Control to "dress up" the bales, which meant to pull visible and possibly objectionable material from the bales' visible exteriors. Sparks determined that the product met the definition of "mixed paper" and would be acceptable to EMS's purchaser in China.
For each of the ten containers of scrap paper that Waste Control shipped in response to these EMS purchase orders, Waste Control invoiced "shaker mix." EMS received these "shaker Page 7 mix" invoices and paid Waste Control for the ten containers of "shaker mix." EMS brokered these 10 containers through Newport in Tacoma in order to avoid local Chinese inspections before shipping the scrap paper to a paper mill in China. Newport paid EMS $91 per ton for the scrap paper in the ten containers, yielding a profit of $15 per ton for EMS. The normal profit margin for "mixed paper" was $3 to $5 per ton.
The record does not show the price the paper mill in China paid to Newport.
On February 7, 2006, EMS's Sparks wrote in an email to Waste Control's Campbell:
FYI, we did get a little trailer on one of the containers of mix we shipped earlier. They broke open four bales at random from one containers. [sic] They recovered about 2.2 kg of aluminum and slightly less of plastic containers. There was about 4 kg of other non fibers. They did not explain what this was. All-in-all they felt all these numbers were acceptable.
The record does not define the parties' meaning for this term.
CP at 146. Nevertheless, the Chinese paper mill accepted the 2005 "shaker mix" shipment.
B. 2006 Contract
On February 14, Sparks wrote to Campbell:
We do have a new mix order for you, with the mill willing to purchase 5 to 10 containers. They want to keep this separate from our other orders, not because of the quality but because of the price (for the last one we re-imbursed [sic] them the difference between our order with you and our other suppliers. Apparently someone challenged them on receiving fund [sic] back). Our new price is better than the old one, but we thought it would actually be a little better than it is. We can pay $79 delivered to the port of Tacoma per sort ton, 44,000 to 45,000 lbs per container.
FYI, they have finished going through the first five containers. Non fiber materials edged up slightly higher than the first container indicated, but still the percentage of 4.4 [percent], plus or minus, was not bad. They got a little nervous with a few bales that seemed to have quite a few cans inside the bales, but they commented that the outside of the ales was very good, and customs didn't even look further than the second row in any container. This was very good.
CP at 147 (emphasis added).
Thereafter, on EMS's behalf, Sparks agreed to purchase 10 additional containers of the "KB mix" from Waste Control, at a price of $78 per ton. On February 15, 2006, Sparks sent Waste Control a purchase order requesting 10 containers of "mixed paper" at $79 per ton. Like EMS's 2005 purchase orders, this 2006 purchase order provided that "unless otherwise specified, grade is in accordance with PS standards." This purchase order also included the comment, "Baled, Dry Mix." Neither EMS's purchase order in particular nor the record in general provide a definition for "Baled, Dry Mix."
In December 2005, Simkins left EMS to work for another company.
In his declaration in support of summary judgment, Sparks agreed that EMS had contracted with Waste Control to purchase 10 more containers of the same product — "mixed paper" — that Waste Control had supplied for the 2005 contract. He asserted, however, that the product Waste Control shipped in 2006 was not "mixed paper."
At oral argument, Waste Control asserted that it had refused EMS's offer of this higher price because of the risks involved in moving a product of such questionable value. Absent anything in the record to the contrary, this assertion could explain the difference between the $79 price on EMS's purchase order and the $78 price on Waste Control's invoices.
On March 10, Waste Control sent EMS 10 invoices (one for each container) for "mix mixed paper" that Waste Control had shipped to fill EMS's February 15 purchase order. As with the similar 2005 transaction, Waste Control again shipped "shaker mix," not "mixed paper" grade scrap paper. Each of these invoices indicated a price of $78 per ton. EMS again brokered this shipment through Newport, this time at a price of $89 per ton, yielding EMS a profit of $11 per ton.
Newport again sold the shipment to a paper mill in China. On receipt, however, the Chinese paper mill rejected the shipment "because the scrap paper in the containers was well below the 'mixed paper' grade of scrap paper." Sparks traveled to China to inspect the shipment and found that the product "was of such poor quality it could not be utilized in any form of operation." As a result, EMS reimbursed Newport for the purchase price of the product and its disposal.
II. Procedure
On October 11, 2007, EMS sued Waste Control, alleging that Waste Control had breached their 2006 contract by "failing to supply the grade of goods as agreed." Waste Control answered that it had not breached the contract because the parties had contracted for "shaker mix," which Waste Control had shipped. Waste Control also counterclaimed for sanctions under CR 11, alleging that EMS and its attorneys had "failed to fully investigate the facts surrounding the purchase of the 'shaker mix' from [Waste Control]."
EMS moved for summary judgment. EMS submitted Sparks' declaration, in which he stated that: (1) EMS had purchased 10 containers of "mixed paper" from Waste Control in November and December 2005; (2) EMS had "entered into a second contract for the purchase of an additional 10 containers of 'mixed paper' grade scrap paper," which "second contract was memorialized with a Purchase Order dated February 15, 2006"; (3) EMS sold the 2006 shipment to Newport, which sold it to a paper mill in China; (4) on EMS's behalf, Waste Control then shipped the 10 containers to the paper mill in China; (5) the Chinese paper mill rejected the shipment because it was not the higher grade "mixed paper" it had purchased; and (6) because EMS had to reimburse Newport for delivery of the wrong grade of paper mix and for disposal of the nonconforming product, EMS incurred damages as a result of Waste Control's breach of contract.
Waste Control opposed EMS's motion for summary judgment and filed its own cross motion for summary judgment. Waste Control argued that (1) the parties had contracted (apparently orally) for "shaker mix"; (2) Waste Control had delivered "shaker mix"; (3) the "PS Standards" to which EMS referred in its purchase order did not apply because those standards were not in use at the time the parties entered into the contract; and (4) EMS had
surreptitiously inserted the word "mixed paper" [in the purchase order] in order to (a) pass [sic] the Chinese inspectors into believing the shipment was mixed paper, (b) provide to create a claim against [Waste Control] as insurance to offset the losses that [EMS] would suffer if it got caught, (c) or both.
Waste Control did not, however, specifically allege fraud as an affirmative defense as CR 8(c) requires.
CP at 65. Waste Control submitted Sparks' deposition, and Campbell's declaration. Exhibits to Sparks' deposition included: (1) the purchase orders and invoices for the November and December 2005 shipments; (2) the purchase order and invoices for the February/March 2006 shipment; and (3) several emails, which Waste Control alleged showed that EMS understood it was purchasing a particular product from a particular location that produced only one type of mix, "KB mix," which both parties knew did not meet general industry definitions of "mixed paper."
According to Sparks' deposition, Simkins never told him that the only mix KB produced was "shaker mix." The above emails and Campbell's declaration, however, indicate that Sparks was aware that the "KB mix" was not "regular mixed paper."
Ruling that there were no issues of material fact, the trial court granted summary judgment to EMS and dismissed Waste Control's action for the following reasons: (1) The contract, as memorialized by the 2006 purchase order, called for "mixed paper"; and (2) Waste Control did not dispute that the product it had provided did not meet any definition of "mixed paper." The trial court entered an amended judgment for EMS in the amount of $48,364.98 plus $10,478.40 in prejudgment interest, $200 in attorney fees, and $588.25 in costs. The trial court denied Waste Control's cross-motion for summary judgment and CR 11 sanctions.
In its original judgment, the trial court awarded EMS $67,385.22 plus prejudgment interest. CP at 206. It is not clear from the record before us how the trial court determined this initial figure. The amended judgment reflects the damages that EMS pleaded in its complaint.
Waste Control appeals.
ANALYSIS
Waste Control essentially argues that the 2006 purchase order was not an integrated agreement. More specifically, Waste Control argues that (1) Waste Control and EMS "otherwise specified" that Waste Control was selling a specific product ("KB mix") to EMS, not "mixed paper" as defined by any outside standard, such as the PS standards mentioned in the purchase order; and (2) because no "PS standards" existed at the time of the contract, there is a material issue of fact about what the parties meant by the term "mixed paper."
In its brief, Waste Control includes the following heading: "The factual evidence in the record creates a genuine issue of fact as to whether the February 15, 2006 'purchase order' accurately memorialized the prior verbal agreement between the parties." After this heading, Waste Control asserts:
The Declaration of Rick Campbell establishes that the specific product that he negotiated to sell [EMS] did not meet the definition of "mixed paper" as that term is used in the industry. . . . Campbell's testimony further establishes that he negotiated the sale of a particular product that was generated by a particular facility, not the sale of "mixed paper" as determined by any outside standard. . . . Campbell negotiated for the sale of a sub-grade product and the record establishes that [EMS] knew that it was a particular sub-grade product.
Br. of Appellant at 22-23.
Waste Control further argues that the evidence it presented to the trial court was sufficient to demonstrate the existence of material issues of fact. For example, Waste Control points to: (1) emails showing that EMS knew it was purchasing a product with more "outthrows" than ISRI guidelines allowed in products classified as "mixed paper"; (2) EMS's difficulty in marketing the product; (3) the substantial difference between the high profit margin EMS obtained on the "KB mix" and the usual lower profit margin for "mixed paper"; and (4) EMS's acceptance of the same product, namely the "KB mix," in the earlier shipment on the 2005 contract, even though that shipment clearly did not meet any definition of "mixed paper" because it contained 4.4 percent outthrows.
We agree with Waste Control that there were material issues of fact that precluded summary judgment for EMS.
I. Standard of Review A. Summary Judgment
On review of an order for summary judgment, we perform the same inquiry as the trial court. Hisle v. Todd Pac. Shipyards Corp., 151 Wn.2d 853, 860, 93 P.3d 108 (2004) (citing Kruse v. Hemp, 121 Wn.2d 715, 722, 853 P.2d 1373 (1993)). Summary judgment is appropriate only if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." CR 56(c). "A material fact is one upon which the outcome of the litigation depends in whole or in part." Atherton Condo. Apartmen-Owners Ass'n Bd. of Directors v. Blume Dev. Co., 115 Wn.2d 506, 516, 799 P.2d 250 (1990).
We consider all facts in the light most favorable to the nonmoving party. Vallandigham v. Clover Park Sch. Dist. No. 400, 154 Wn.2d 16, 26, 109 P.3d 805 (2005) (citing Atherton, 115 Wn.2d at 516). The moving party bears the burden of demonstrating that there is no genuine issue of material fact. Atherton, 115 Wn.2d at 516. "If the moving party satisfies its burden, the nonmoving party must present evidence that demonstrates that material facts are in dispute." Id. Waste Control has satisfied the nonmoving party's burden here.
B. Parol Evidence Rule
RCW 62A.2-202 provides:
Final written expression: Parol or extrinsic evidence. Terms with respect to which the confirmatory memoranda of the parties agree or which are otherwise set forth in a writing intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement but may be explained or supplemented
(a) by course of dealing or usage of trade (RCW 62A.1-205) or by course of performance (RCW 62A.2-208); and
RCW 62A.1-205 provides in part:
(1) A course of dealing is a sequence of previous conduct between the parties to a particular transaction which is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct.
(2) A usage of trade is any practice or method of dealing having such regularity of observance in a place, vocation or trade as to justify an expectation that it will be observed with respect to the transaction in question. The existence and scope of such a usage are to be proved as facts. If it is established that such a usage is embodied in a written trade code or similar writing the interpretation of the writing is for the court.
RCW 62A.2-208(1) provides:
Where the contract for sale involves repeated occasions for performance by either party with knowledge of the nature of the performance and opportunity for objection to it by the other, any course of performance accepted or acquiesced in without objection shall be relevant to determine the meaning of the agreement.
(b) by evidence of consistent additional terms unless the court finds the writing to have been intended also as a complete and exclusive statement of the terms of the agreement.
"'[T]he parol evidence rule only applies to a writing intended by the parties as an 'integration' of their agreement; i.e., a writing intended as a final expression of the terms of the agreement.'" Berg v. Hudesman, 115 Wn.2d 657, 670, 801 P.2d 222 (1990) (quoting Emrich v. Connell, 105 Wn.2d 551, 556, 716 P.2d 863 (1986)) (alteration in original). Whether a written contract is fully integrated is a question of fact. Lopez v. Reynoso, 129 Wn. App. 165, 171, 118 P.3d 398 (2005) (quoting Barber v. Rochester, 52 Wn.2d 691, 698, 328 P.2d 711 (1958)), review denied, 157 Wn.2d 1003 (2006). A contract is only partially integrated if it is a final expression of those terms it contains, but it is not a complete expression of all the terms upon which the parties agreed. Berg, 115 Wn.2d at 670.
Where the contract is only partially integrated, extrinsic evidence is admissible to prove additional terms that are not inconsistent with the written terms. Id. If the parties did not intend the written contract to be fully integrated, "the writing may be supplemented or replaced by consistent terms or agreements." Lopez, 129 Wn. App. at 171. We may discern the parties' intent from the agreement language, the contract's objective, the circumstances surrounding the making of the contract, the parties' subsequent conduct, and the reasonableness of their respective interpretations. Id. at 170.
In Lopez, Division Three of our court held that the trial court properly considered extrinsic evidence (1) to determine whether a written purchase and sale contract was a final expression of the parties' agreement, and (2) to substitute $8,000 for the $6,500 purchase price specified in the contract. Lopez, 129 Wn. App. at 167, 172. Lopez involved a contract for sale of a used car and the seller's repossession of the car when the buyer stopped making payments. The written contract stated that the sale price was $6,500 and that the buyer had paid a down payment of $500. Id. at 168.
But the seller asserted that (1) the actual agreed upon price was $8,000, with a $2,000 down payment; (2) the buyer, however, had wanted the lower amount listed in the contract; and (3) because the buyer had already paid a $2,000 down payment and because the payments would be the same, the seller had agreed to write the contract reciting the lower amount as the sale price. Id. The buyer argued that (1) the $2,000 she (the buyer) had given to the seller was actually a payment that went toward the $6,500 purchase price (rather than a down payment on a higher price); (2) therefore, instead of being delinquent on her payments, she (the buyer) actually owed nothing more on the car when the seller repossessed it; and (3) thus, the seller repossessed the car improperly. Id. at 169. In light of the extrinsic evidence submitted at trial, Division Three upheld the trial court's implicit finding that the contract was not fully integrated, held that extrinsic evidence of the substituted price was consistent with the written contract, and affirmed the trial court. Id. at 172, 175.
Our Supreme Court's recent decision in Brogan Anensen LLC v. Lamphiear, ___ Wn.2d ___, 202 P.3d 960 (2009) sheds light on the issue before us here. Addressing the admissibility of extrinsic evidence in a contract dispute, the court held that a question of material fact precluded summary judgment on the issue of the possession date in a real estate purchase and sale agreement where the agreement did not define the term "possession date." Id. at 962. The parties had used a form contract that provided for possession at 9 pm on the "possession date." Id. The form contained several boxes with different options for defining the "possession date," but the parties did not check any of the boxes. Id. Thus, the "possession date" was undefined and, therefore, ambiguous; and using extrinsic evidence to define the phrase did not "alter, modify, or contradict any clear contract term or show intent independent of the agreement." Id. Following the well-settled rule that an appellate court will not speculate about the weight or credibility of extrinsic evidence, the court reversed the summary judgment and remanded for trial. Id.
II. Question of Material Fact
The extrinsic evidence that Waste Control submitted to the trial court raised a question of material fact as to whether EMS's 2006 purchase order was a fully integrated agreement. The purchase order provided that "unless otherwise specified, grade is in accordance with PS standards." CP at 113. In opposing summary judgment, Waste Control argued that the parties had "otherwise specified" the grade by contracting for a specific product from a specific location, namely "KB mix."
A. No Internal or External Definition of "Mixed Paper"
As in Brogan Anensen, the term "mixed paper" was not defined in the EMS-Waste Control contract; in the absence of an internal contractual definition of "mixed paper," the trial court should have considered extrinsic evidence to define that term. Although EMS's purchase order said that the term "mixed paper" was defined according to "PS standards," those standards did not exist at the time EMS executed its purchase order; thus, there was no external definition of "mixed paper" and, again, the trial court should have considered extrinsic evidence to determine how the parties defined that term.
We further note that EMS's attempt to substitute the ISRI guidelines in effect in 2006 for the PS standards it specified in its purchase order belies its argument that there are no material issues of fact: The ISRI standard for "mixed paper" specifies that total outthrows in "mixed paper" may not exceed 3 percent; but Sparks knew that the product he was purchasing on EMS's behalf contained approximately 4.4 percent outthrows. In fact, in the same email to Campbell in which Sparks had indicated EMS wanted to purchase more of the product Waste Control had previously sold to EMS in 2005, Sparks had also specifically mentioned the 4.4 percent outthrows in the first shipment.
B. Parties' Course of Dealing
Furthermore, the trial court's reliance on Campbell's statement that the "KB mix" would not fit "any definition" of "mixed paper" was misplaced given the course of dealing between the parties. It is clear from the evidence that in February 2006, EMS and Waste Control intended to form a contract for sale and purchase of the same product that had been the subject of their November and December 2005 purchases and shipments. In opposition to EMS's motion for summary judgment, Waste Control submitted: (1) Campbell's declaration that "[u]ltimately, agreement between Fritz Sparks and myself was for EMS to purchase 10 additional containers," CP at 150 (emphasis added); (2) the invoices for the November and December 2005 purchases, which showed that the product for which the parties had contracted at that time had been "shaker mix" — "a product that was of mixed quality and would not fit any definition of 'mixed paper'"; and (3) Campbell's statement that he
never represented to [EMS] that the KB Recycling product [also called shaker mix] could ever qualify as regular "mixed paper" whether grades (1), (2) of IRSI standards or even (3) of the old PS standards. Even if the IRSI standards apply to this transaction, the first paragraph says that the buyer and seller should negotiate the grade. That is exactly what happened in this sale from WASTE CONTROL to EMS.
CP at 151.
On behalf of EMS's motion for summary judgment, Sparks declared: (1) "On February 15, 2006 and in reliance on the Waste Control 'mixed paper' grade scrap paper supplied by Waste Control to EMS in late 2005, I (on behalf of EMS) entered into a second contract for the purchase of an additional 10 containers of 'mixed paper' grade scrap paper," CP at 22 (emphasis added); and (2) he had determined that "the scrap paper being sold by Waste Control met the 'mixed paper' grade standard and would be acceptable to paper mills in China" before EMS placed the November and December 2005 orders.
Additionally, several of the email exhibits to Sparks' declaration contradicted EMS's assertion that it believed it was contracting for standard "mixed paper." Significantly, on September 9, Simkins had written to Sparks,
I will ask Rick about inspection. You understand that it is unlikely that this stuff is being sold as "regular" mix. I am getting the feeling the people that are buying it are Chinese, self inspection and very close to the mill.
CP at 135 (emphasis added). Moreover, Sparks acknowledged in his deposition that EMS was receiving at least double the normal profit margin for "mixed paper" when it re-sold the "KB mix" to Newport; this acknowledgment shows that Sparks knew the "KB mix" would not meet a standard definition of "mixed paper."
The other emails that Sparks and Simkins sent or received before the November/December 2005 transactions tend to show, at least for purposes of surviving summary judgment, that: (1) multiple people had informed Sparks that CCIC would not even look at the "KB mix" because it deemed the quality so poor; (2) EMS was aware that it was bargaining for a substandard product; (3) EMS knew the "KB mix" would not pass CCIC inspection; and (4) therefore, EMS took measures to avoid or to delude CCIC inspection in the United States. For example, Simkins suggested showing the CCIC inspectors "Waste Control's regular mix" and loading three bales of Waste Control's regular mix on the end of the container of primarily "shaker mix" bales. Similarly, in an email to Simkins, Sparks discussed changing the supplier's address to hide the true source of the product, noting, however, that a potential buyer "may smell a rat."
Looking at the evidence in the light most favorable to the non-moving party, Waste Control, there are issues of material fact about: (1) how the parties defined "mixed paper" for purposes of their contract, given the reference to non-existent PS standards in EMS's purchase order and the parties' prior course of dealing; and (2) whether the product that Waste Control shipped to fulfill EMS's February 2006 purchase order met the parties' definition of "mixed paper," regardless of how the scrap paper measured up to any external standards or what Waste Control called it. Because Waste Control produced evidence demonstrating issues of material fact that require trial, we reverse the trial court's grant of summary judgment to EMS.
III. Attorney Fees
EMS requests attorney fees under RAP 18.9, alleging ten specific violations entitling it to attorney fees, the first five of which essentially argue that Waste Control's appeal is frivolous. We disagree that Waste Control's appeal is frivolous.
See Delany v. Canning, 84 Wn. App. 498, 509-510, 929 P.2d 475 (quoting Streater v. White, 26 Wn. App. 430, 435, 613 P.2d 187, review denied, 94 Wn.2d 1014 (1980)), review denied, 131 Wn.2d 1026 (1997):
(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; (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.
EMS also asserts it is entitled to attorney fees because Waste Control's brief violated RAPs 10.3(a)(5), 10.3(a)(6), and 10.4(c). We agree that Waste Control's statement of the facts is somewhat argumentative; fails to include record cites after many factual statements; and, where it does cite to the clerk's papers, it does not cite correctly. We also agree that Waste Control's brief failed to cite legal authority and relevant record cites in support of some of the issues it presents for review. We disagree, however, that Waste Control failed to include the relevant contract language in its brief; on the contrary, Waste Control set forth the contract language verbatim in its brief.
Finally, EMS alleges that Waste Control's brief "personalizes the dispute in a manner that is demeaning to the opposing party and counsel without contributing to the resolution of the dispute on the merits." But EMS cites no authority for an award of attorney fees on this basis. Thus, we do not further consider this argument.
EMS is not the prevailing party on appeal. Waste Control's appeal is not frivolous. Although Waste Control did not fully comply with the RAPs governing the content of its brief, we reviewed these issues with counsel during oral argument and conclude that these omissions were inadvertent. Furthermore, these omissions were not so egregious as to obscure Waste Control's argument. Accordingly, we deny EMS's request for attorney fees on appeal.
We reverse summary judgment, remand for trial, and deny EMS's request for attorney fees.
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 pursuant to RCW 2.06.040, it is so ordered.
ARMSTRONG, J. and VAN DEREN, C.J., concur