Opinion
No. 61041-4-I.
February 23, 2009.
Appeal from a judgment of the Superior Court for King County, No. 00-2-20900-2, James A. Doerty, J., entered December 14, 2007.
Affirmed in part, reversed in part, and remanded by unpublished opinion per Lau, J., concurred in by Becker and Cox, JJ.
This case originated as an interpleader action to settle a dispute over a $5,000 earnest money deposit. D. Bradley Landis filed a counterclaim against Preview Properties, Inc., asserting breaches of fiduciary and statutory duties, conversion, and violations of the Consumer Protection Act (CPA). After we reversed the trial court's judgment in favor of Landis, the Washington Supreme Court reinstated the judgment on his successful unchallenged claims and remanded to the trial court to clarify the basis for its damage award and to award attorney fees and costs to Landis as appropriate. Preview now appeals from the trial court's rulings on remand. We affirm Landis's damages award, but reverse the award of attorney fees and costs based on the reinstated permanent injunction.
FACTS
In March 2000, Landis entered into a purchase and sale agreement to sell vacant land to Layne Sapp. Sapp was represented by real estate agent Jess Stansberry of Preview Properties, Inc. Sapp paid $5,000 in earnest money, which Preview deposited into a trust account. Stansberry asked Landis to extend the closing date, and Landis signed an extension agreement. Stansberry asked for a second extension, and Landis signed a modified agreement. Stansberry told Landis that Sapp had signed both agreements. But Sapp had not signed them, so the original closing date remained in effect. When closing did not occur by the original closing date, the purchase and sale agreement expired by its own terms.
By June 12, 2000, both Landis and Sapp had demanded payment of the $5,000 earnest money. On August 10, 2000, Preview filed a Civil Rule 22 interpleader action to settle their demands. Landis filed a counterclaim against Preview, alleging claims for common law and statutory conversion, violation of the CPA, and violation of fiduciary and statutory broker licensee duties under RCW 18.86.030. Landis also sought a preliminary injunction to enjoin Preview from further violations of the CPA during the pendency of the action.
Landis also filed a cross-claim against Sapp, which was dismissed after Sapp stipulated that Landis was entitled to the earnest money.
The trial court granted Landis's motion for partial summary judgment on the conversion claims and left the question of damages for trial. Following a bench trial, the court ruled in favor of Landis. It concluded that Preview committed common law and statutory conversion and that Preview breached its fiduciary and statutory duties. It further concluded that Preview's actions occurred in the course of business, were detrimental to the public interest, and violated the CPA.
The trial court awarded Landis $57,708 in damages for breaches of duty, $65 for conversion, $3,000 for lost time and unnecessary expense, and $66,482.64 in attorney fees and costs. It found that Landis's attorney fees and costs "were reasonable, and were reasonably and necessarily incurred in connection with Mr. Landis' pursuit of his Consumer Protection Act claim." Finding of Fact 29. The court also entered a permanent injunction requiring Preview to pay out or interplead earnest monies held in trust within 30 days of demand.
RCW 19.86.090 provides, "Any person . . . may bring a civil action in the superior court to enjoin further violations, to recover the actual damages sustained by him or her, or both, together with the costs of the suit, including a reasonable attorney's fee, and the court may in its discretion, increase the award of damages to an amount not to exceed three times the actual damages sustained. . . ."
Preview appealed to this court, arguing that the trial court erred in ruling in favor of Landis' conversions and CPA claims. In an unpublished opinion, we held that Preview's actions did not give rise to an action in conversion and that Landis had failed to prove the public interest element of his CPA claim. We reversed the judgment. Preview Props., Inc. v. Landis, noted at 130 Wn. App. 1050, 2005 WL 3462798.
Landis filed a petition for review, arguing that the Court of Appeals erred by (1) reversing his conversion and CPA claims and (2) reversing the entire judgment even though Preview failed to challenge several key findings and conclusions regarding breach of fiduciary and statutory duties and the permanent injunction. Review was granted only on the issue of whether we properly reversed the entire judgment. The court agreed with Landis that this was error.
The Court of Appeals opinion addresses only the trial court's rulings on Landis's CPA and conversion claims, reflecting Preview's characterization of the issues on appeal. Preview did not assign error to key findings of the trial court that addressed damages awarded to Landis for breach of common law fiduciary duties and the duties of real estate broker licensees under RCW 18.86.030.
Preview Props., Inc. v. Landis, 161 Wn.2d 383, 387, 165 P.3d 1 (2007).
The Supreme Court then reviewed the basis of the trial court's award and noted,
[T]he trial court's unchallenged findings indicate that Preview's agent knowingly misrepresented to Landis that Sapp had signed two extensions of the closing deadline, that Landis reasonably relied on those representations, and that Preview's management personnel disregarded or failed to understand the obligations of a broker licensee under RCW 18.86.030.
Id. at 387-88. Moreover, the trial court's findings and conclusions indicated that Preview breached its fiduciary and statutory duties, did not deal honestly and in good faith with Landis, and proximately caused Landis's damages. The trial court additionally determined that these actions amounted to a CPA violation because they occurred in the course of business dealings and were detrimental to the public interest.
The Washington Supreme Court then observed that even though we reversed the CPA determination on the narrow ground that Landis failed to establish the public interest element of the claim, we agreed that Preview's actions were unethical and unfair and that the facts established wrongdoing. Id. at 388-89. And our opinion did not mention RCW 18.86.030.
The Supreme Court held,
[T]he Court of Appeals reversal of Landis's CPA claim appears to have had no effect on the trial court's damages award for "breaches of [Preview's] duties." Nevertheless, to the extent that the basis for the trial court's award might be considered ambiguous, we remand to the trial court to perform any necessary segregation among the claims.
Accordingly, we reinstate the judgment for Landis on his successful unchallenged claims. We also reinstate the $3,000 award for 'lost time and unnecessary expense' because that award was supported by the record and was not addressed by the Court of Appeals. Likewise, because the Court of Appeals did not address the permanent injunction, the injunction is reinstated.
On remand, the trial court will award fees and costs as the court deems appropriate regarding Landis's surviving claims. See Travis v. Wash. Horse Breeders Ass'n, 111 Wn.2d 396, 411, 759 P.2d 418 (19[8]8) (trial court must segregate time spent on CPA claim and other legal theories). See also Smith v. Behr Process Corp., 113 Wn. App. 306, 344-45, 54 P.3d 665 (2002) (remanding for required segregation of fee award among CPA and other claims).
The Supreme Court denied Landis's motion for reconsideration but made minor amendments to portions of its opinion regarding the award of attorney fees and costs.
Preview, 161 Wn.2d at 389.
On remand, the trial court found that the damage award of $57,708 for breach of fiduciary and statutory duties and the $3,000 award for lost time and unnecessary expense were supported by the record, were proximately caused by Preview, were not ambiguous, and did not contain any monies related to any alleged CPA violation. The court also found that Landis was entitled to an award of "nonsegregable attorneys fees and costs reasonably and necessarily incurred on that and related matters in this case in connection with the proving of entitlement and entry of that permanent injunction, less the $2,269.50 this Court finds were incurred in connection with his conversion claims reversed on appeal."
Landis filed a motion to determine attorney fees and costs on remand and for entry of judgment against Preview. The trial court entered judgment for Landis as follows:
a. for $57,708 for breaches of Preview Properties' fiduciary and statutory duties,
b. for $3,000 in lost time and unnecessary expense incurred,
c. $64,213.14 in trial attorneys fees and costs, and $16,004.44 in remand attorneys fees and costs, all incurred in connection with the proving of entitlement to and entry of the permanent injunction for a total judgment on remand, after subtracting the reversed $65 conversion award, after subtracting the $2,269.50 reduction in attorneys fees incurred in connection with the reversed conversion claim, and after subtracting the $127,255.64 paid by Preview Properties to satisfy the trial judgment, in the amount of $13,669.94.
Preview now appeals the trial court's findings of fact, conclusions of law, and judgment on remand.
ANALYSIS
Appealing From a Remand
As a preliminary matter, Landis argues that Preview's appeal should be dismissed because "'an appeal from a judgment entered by an inferior court in pursuance of a mandate of the appellate court can not be sustained[.]'" Frye v. King County, 157 Wn. 291, 293, 289 P.18 (1930) (quoting Krantz v. Rio Grande W. Ry. Co., 13 Utah 1, 43 P. 623, 624 (1896)); Marchel v. Bunger, 15 Wn. App. 182, 547 P.2d 921 (1976) ("[a]n appeal cannot be taken from an order entered by a trial court in conformance with the remittitur of this court.").
But RAP 12.9(a) now governs the issue of appellate review after remand.
The appellate court may recall a mandate issued by it to determine if the trial court has complied with an earlier decision of the appellate court given in the same case. The question of compliance by the trial court may be raised by motion to recall the mandate, or by initiating a separate review of the lower court decision entered after issuance of the mandate.
The rule does not foreclose appellate review of a trial court's rulings on remand. Rather, it provides an appellant with two choices — file a motion to recall the mandate or initiate a separate review of the lower court decision. RAP 12.9(a) permits Preview to seek appellate review of the trial court's rulings on remand to ensure that they comply with the mandate from the Supreme Court.
Damages
Preview argues that the trial court erred in entering remand finding of fact 1, in which the trial court determined that Landis's reinstated damage award was unambiguously based on Preview's unappealed breaches of fiduciary and statutory duties and not on the reversed CPA claim. "Appellate review is limited to determining whether the trial court's findings are supported by substantial evidence and, if so, whether the findings in turn support the conclusions of law." Willener v. Sweeting, 107 Wn.2d 388, 393, 730 P.2d 45 (1986).
Preview argues that the damage award is ambiguous because the trial court failed to determine whether the damages were proximately caused by the alleged breaches of duty or by the reversed CPA claim. Preview then challenges the legal and factual basis for the breach of fiduciary and statutory duty claims. Having cast doubt on these claims, Preview contends that the damages awarded to Landis were proximately caused by the overturned CPA violation and therefore must be reversed. Preview also challenges the $3,000 award for "lost time and unnecessary expense" on similar grounds.
But the issues on remand are sharply limited. RAP 12.2 provides, "Upon issuance of the mandate of the appellate court as provided in rule 12.5, the action taken or decision made by the appellate court is effective and binding on the parties to the review and governs all subsequent proceedings in the action in any court. . . ." The law of the case doctrine "'refers to the "binding effect of determinations made by the appellate court on further proceedings in the trial court at remand,"' or to '"the principle that an appellate court will generally not make a redetermination of the rules of law which it has announced in a prior determination in the same case."' State v. Harrison, 148 Wn.2d 550, 562, 61 P.3d 1104 (2003) (quoting Lutheran Day Care v. Snohomish County, 119 Wn.2d 91, 113, 829 P.2d 746 (1992)). And unchallenged findings of fact are verities on appeal. Halvorsen v. Ferguson, 46 Wn. App. 708, 722, 735 P.2d 675 (1986).
The Supreme Court's mandate to the trial court was narrow and specific. It let stand our reversal of the CPA and conversion claims, but reinstated the damage award to Landis on his unchallenged claims for breaches of fiduciary and statutory duties and on the $3,000 for "lost time and unnecessary expense." However, "to the extent the basis for the trial court's award might be considered ambiguous, we remand to the trial court to perform any necessary segregation among the claims." Preview, 161 Wn.2d at 389.
The potential ambiguity in the trial court's damage award arises from finding of fact 25 (in the 2004 trial).
Damages to Landis caused by Preview Properties' breaches of its duties, conversion and violation of the Consumer Protection Act amount to:
(a) $57,708 ($67,708 in lost interest, less the $10,000 ultimate increase in the sale price) for breaches of its duties,
(b) $65 for conversion (8% of $5000/365 days x 59 days [6/12 to 8/09],
(c) $3,000 in lost time and unnecessary expense ($60/hr. times 50 plus hours), and
(d) their attorneys fees and costs in this matter.
The trial court summarized the total award in its conclusions of law.
10. Landis is entitled to an award of damages to them proximately caused by Preview Properties in this matter for:
a) for $57,708 for breaches of its duties;
b) for $65 for conversion;
c) for $3,000 in lost time and unnecessary expense incurred; and
d) for an award of all the reasonable attorneys fees and costs set out in Finding of Fact No. 29, specifically $66,482.64.
The Supreme Court's opinion leaves no doubt that the $65 award for conversion is reversed and the $3,000 in lost time and unnecessary expense is reinstated. Thus, the trial court's job on remand was to determine whether any portion of the $57,708 damage award was based solely on the reversed CPA claim and, if so, to segregate it from the reinstated damage award for breaches of fiduciary and statutory duties.
Any potential ambiguity regarding the basis of the $57,708 damage award is readily addressed by examining the findings of fact and conclusions of law. Conclusion of law 10 specifies that the $57,704 award is for "breaches of [Preview's] duties." It also states that Preview is entitled to an award of attorney fees and costs set out in finding of fact 29. That finding specifies that the fees and cost award is based on the CPA. Moreover, the trial court's findings indicate that the evidentiary basis for the breach of duty claims and the CPA claim were identical. Preview's actions constituted a breach of fiduciary and statutory duties. And because those same actions occurred in the course of business and were detrimental to the public interest, they also violated the CPA. The CPA claim was reversed on the narrow ground that Landis failed to prove the public interest element. Therefore, the reversal of the CPA claim has no legal consequence on the breach of duty claims.
Preview cannot challenge the trial court's rulings on remand by seeking to undermine findings of fact and conclusions of law that it chose not to appeal after the 2004 trial. And it cannot raise factual assertions and arguments that were left in place by the appellate courts' rulings. We did not reach the question of proximate cause in our prior opinion. The Washington Supreme Court expressly reinstated the judgment on the breach of duty claims. Those claims are now the law of the case. We reject Preview's attempt to get a second bite at the apple.
Although we noted that "Preview Properties has raised valid concerns regarding the court's determinations that Landis's injuries were proximately caused by Preview Properties' actions," we decided that it was unnecessary to address the issue. Preview, 2005 WL 3462798 at *4.
Attorneys Fees and Costs
Preview argues that the trial court erred in awarding Landis attorneys fees and costs based on the reinstated permanent injunction. "Only a successful plaintiff is entitled to fees under the [CPA]." Travis, 111 Wn.2d at 409. "When reviewing an award of attorney fees, the relevant inquiry is first, whether the prevailing party was entitled to attorney fees, and second, whether the award of fees is reasonable." Ethridge v. Hwang, 105 Wn. App. 447, 459, 20 P.3d 958 (2001). Whether a party is entitled to attorney fees is an issue of law which is reviewed de novo. Id. at 460. Whether the amount of the award was reasonable is reviewed under an abuse of discretion standard. Id.
At oral argument to this court, the parties agreed that the sole basis for any attorney fees award is the CPA claim. And the parties do not dispute that the trial court properly segregated that portion of the fee award based on the reversed conversion claim.
The Supreme Court held, "On remand, the trial court will award fees and costs as the court deems appropriate regarding Landis's surviving claims." Preview, 161 Wn.2d at 389. It specified that the trial court must segregate time spent on CPA claims from other legal theories. But the court let stand our prior holding that Landis had failed to prove the public interest element of his CPA claim. And its opinion made it clear that Landis was not entitled to an award of damages based on the reversed CPA claim. Thus, the issue is whether Landis is a "successful plaintiff" who is entitled to an award of fees under the CPA, where the permanent injunction was reinstated on purely procedural grounds after the underlying CPA claim was overturned.
Landis argues that the Supreme Court's opinion definitively shows that the CPA action was one of his surviving claims. He contends that there were two separate and distinct CPA claims: the CPA claim that was reversed on appeal and the CPA claim based on the unappealed permanent injunction. According to Landis, the factual basis for the permanent injunction survived because Preview did not appeal finding of fact 26 stating, "The interests of the public . . . would be furthered by the entry of a permanent injunction. . . ."
We disagree and conclude as a matter of law that Landis is not entitled to an award of attorney fees and costs under the CPA based on a permanent injunction that was reinstated on purely procedural grounds, where the underlying basis for the CPA claim was reversed. A permanent injunction is a form of relief that may be granted to a person injured by a violation of the CPA. It is not a separate CPA claim. See RCW 19.86.090. Moreover, the factual basis for the public interest element of the CPA claim and the permanent injunction are one and the same. The Supreme Court revived the permanent injunction on purely procedural grounds. That does not breathe new life into the factual basis of the CPA claim. The "public interest" language in finding of fact 26 is mere surplusage.
Because we conclude that Landis is not entitled to an award of attorney fees and costs based on the CPA, we need not address Preview's arguments regarding the reasonableness of the award.
Landis also requests attorney fees and costs on appeal under RAP 18.1. "Where a statute or contract allows an award of attorney fees at trial, an appellate court has authority to award fees on appeal." Bloor v. Fritz, 143 Wn. App. 718, 753, 180 P.3d 805 (2008). The trial court awarded Landis attorney fees and costs under the CPA based on the reinstated permanent injunction. On the same basis, Landis asserts that he is also entitled to attorney fees and costs on appeal. Because we conclude that the trial court erred in awarding Landis fees under the CPA, there is no basis for an award of fees on appeal under RAP 18.1.
In sum, we affirm the trial court's ruling regarding the damages award, reverse the award of attorney fees and costs under the CPA, and remand to the trial court for entry of judgment against Preview Properties consistent with this opinion.
We concur.