Opinion
No. 35137-4-II.
August 21, 2007.
Appeal from a judgment of the Superior Court for Thurston County, No. 04-2-01456-2, Wm. Thomas McPhee, J., entered July 14, 2006.
Affirmed in part and remanded by unpublished opinion per Van Deren, A.C.J., concurred in by Bridgewater and Hunt, JJ.
Debbie White appeals the trial court's ruling in favor of AA Remodeling (AA) on her breach of contract claim. White contends that the trial court erred when it (1) allowed testimony from an AA expert whose opinions AA disclosed after the cut-off date for disclosure of primary expert witnesses and (2) denied her request for attorney fees as the prevailing party under RCW 18.27.040(6). AA cross-appeals, claiming that the trial court erred in failing to award it attorney fees as the prevailing party under RCW 18.27.040(6). AA also asks that we join its bonding company, Contractors' Bonding and Insurance Company (CBIC), under Rules of Appellate Proceedings (RAP) 5.3 (f) and (i). Finally, both parties request attorney fees on appeal under RCW 18.27.040. We affirm in part and remand for the trial court to recalculate the judgment to show the awards and offsets, to enter judgment on the third-party claim against AA's CBIC bond, and to determine the prevailing party and attorney fee award under RCW 18.27.040. After itemizing the awards and offsets, the trial court may net any judgments between and among the parties.
RCW 18.27.040(6) provides:
The prevailing party in an action filed under this section against the contractor and contractor's bond or deposit, for breach of contract by a party to a construction contract, is entitled to costs, interest, and reasonable attorneys' fees. The surety upon the bond is not liable in an aggregate amount in excess of the amount named in the bond nor for any monetary penalty assessed pursuant to this chapter for an infraction.
RAP 5.3(f) provides: "The appellate court will disregard defects in the form of a notice of appeal or a notice for discretionary review if the notice clearly reflects an intent by a party to seek review." RAP 5.3 (i) further provides:
If there are multiple parties on a side of a case and fewer than all of the parties on that side of the case timely file a notice of appeal or notice for discretionary review, the appellate court will grant relief only (1) to a party who has timely filed a notice, (2) to a party who has been joined as provided in this section or (3) to a party if demanded by the necessities of the case. The appellate court will permit the joinder on review of a party who did not give notice only if the party's rights or duties are derived through the rights or duties of a party who timely filed a notice or if the parties rights or duties are dependent upon the appellate court determination of the rights or duties of a party who timely filed a notice.
We grant AA's request to join Contractors' Bonding and Insurance Company (CBIC) because we must necessarily address the effect of the bond on both parties' requests for attorney fees as the prevailing party under RCW 18.27.040(6).
FACTS
This case involves a dispute arising from a remodel of White's lake front cabin in Thurston County, Washington. In 2002, White reached an agreement with AA to do the work in phases, with White approving each phase as it was completed. The arrangement lasted until mid-June 2003 when, by mutual agreement, AA left the job.
In July 2003, AA gave White an invoice dated June 17, 2003, accounting for all charges and payments to the date AA left the job, exclusive of interest. The invoice showed total charges of $55,000 less payments of $25,000, for a remaining balance due of $30,000. White refused to pay the balance. Nevertheless, AA returned to the job in January 2004 and "finished the shell, completed the siding and trim, and moved two or more windows." Clerk's Papers (CP) at 402. It also performed truss repairs, but the repairs did not conform to the manufacturer's instructions. AA left the job permanently on January 6, 2004.
Both AA and White sued. AA filed its breach of contract claim first, alleging nonpayment damages. White answered AA's complaint alleging breach, but describing a different contract, and also alleging negligent representation and damages caused by delay in completion of the project. In her counterclaim, White also asserted a third-party claim under chapter RCW 18.27.040(3) against AA's contractor's bond, issued by CBIC.
18.27.040(3) provides in part:
Any person, firm or corporation having a claim against the contractor for any of the items referred to in this section may bring suit upon the bond or deposit in the superior court of the county in which the work was done or of any county in which jurisdiction of the contractor may be had.
Trial testimony revealed numerous disagreements between AA and White about the extent, quality, and value of AA's work and White's offset claims for payments she made to other builders to complete the project. The trial court specifically found that AA was the prevailing party on its breach of contract claim and, thus, was entitled to recover damages from White for nonpayment. The trial court also found that White had not proved the existence of the contract she alleged in her counterclaim and third-party claim. Accordingly, it ordered a judgment in favor of AA and against White in the amount of $24,524 in contract damages and $4,300 in restitution, for a total principal judgment award of $28,824. Without entering a judgment against CBIC or determining the prevailing party under the bond statute, RCW 18.27.040(6), the trial court concluded that neither party was entitled to attorney fees under the statute, awarding AA, as the prevailing party, only $200 in statutory fees and the $110 cost of the filing fee.
The parties do not contest the trial court's resolution of the factual issues or the offsetting awards. White claims that the trial court abused its discretion when it allowed AA's late-disclosed expert to testify as a rebuttal witness and both parties assert that the trial court erred in not awarding attorney fees to the prevailing party under RCW 18.27.040(6).
ANALYSIS
I. Motion to Exclude Witness
White contends that the trial court erred in denying her motion to exclude AA's expert witness, Leo Deatherage. She asks us to remand for a new trial that either excludes Deatherage's testimony or allows discovery to be reopened before the new trial.
Before trial, White asked the court to exclude Deatherage's testimony because he was not timely disclosed as a primary expert witness according to the case scheduling order. AA disclosed Deatherage on August 1, 2005, three days after the trial court's deadline for disclosure of primary expert witnesses, but before the last date to disclose expert rebuttal witnesses under the case scheduling order. AA stated that Deatherage would testify about the value and quality of AA's work. In response to White's motion, the trial court limited Deatherage's testimony to rebuttal of White's expert witness's testimony.
Thus, White successfully obtained an order denying AA's use of its disclosed expert in its case-in-chief. In confining Deatherage to a rebuttal witness role, the trial court's order was in accord with the case scheduling order and prevented any prejudice to White's ability to prepare for trial by avoiding the unjust result of leaving White without an expert to rebut Deatherage's testimony in AA's case-in-chief.
Furthermore, when offered the opportunity to depose Deatherage after the trial court's ruling, White's counsel made a strategic decision to not depose him. Thus, White cannot now complain that she was denied an opportunity to learn the nature of AA's expert's testimony prior before trial.
The trial court did not abuse its discretion in refusing to strike Deatherage's testimony in its entirety.
II. Attorney Fees Claims At Trial
Both White and AA contend that the trial court erred in denying them attorney fees under RCW 18.27.040. White contends that, although AA prevailed on the breach of contract claim, AA merely demurred on her counterclaim against the CBIC bond; therefore, AA "exposed itself to an award of fees under RCW 18.27." Br. of Appellant at 14. Without citation to authority, White reasons that "[t]o prevail on this demurrer defense, [AA] had to prevail absolutely and without any allowance of a recovery to [White]." Br. of Appellant at 14. AA responds that the trial court clearly found that it prevailed and, therefore, under the plain language of RCW 18.27.040, it was entitled to attorney fees. CBIC, in anticipation of our order granting joinder, responds that, as the prevailing party on the bond issue, it should receive attorney fees under RCW 18.27.040(6). We granted AA's motion to join CBIC and we, therefore, remand for entry of judgment on the third party claim and determination of attorney fees under RCW 18.27.040(6).
Washington follows the American Rule for attorney fees where compensation for attorney fees and costs may be awarded only if authorized by contract, statute, or a recognized ground in equity. Cosmopolitan Eng'g Group, Inc., v. Ondeo Degremont, Inc., 159 Wn.2d 292, 296-97, 149 P.3d 666 (2006) ( citing In re Impoundment of Chevrolet Truck, 148 Wn.2d 145, 160, 60 P.3d 53 (2002)). The award of attorney fees under a statute is a matter of trial court discretion that we will not disturb absent a clear showing of an abuse of that discretion. Boeing Co. v. Sierracin Corp., 108 Wn.2d 38, 65, 738 P.2d 665 (1987).
A. White's Third-Party Claim
Our Supreme Court recently examined RCW 18.27.040 in Cosmopolitan. Therein, the Court interpreted the attorney fee provision in RCW 18.27.040(6) to allow attorney fees to the prevailing party in actions against a contractor's bond, distinguishing those fees from attorney fees incurred in an action against the contractor. Cosmopolitan, 159 Wn.2d at 299. In other words, the Court held that RCW 18.27.040(6) did not provide statutory authority for trial courts to award fees incurred in a related action for breach of contract. 159 Wn.2d at 300-01 ("[A]n action against the bond must also necessarily claim that a contractor breached a contract or failed to pay."). Thus, if White prevailed, she would be entitled to the fees associated only with her third party claim against the bond.
Here, the trial court ruled that White had not proved: (1) the existence of the contract she asserted or (2) damages for negligent misrepresentation and delay. Furthermore, the trial court concluded that: (1) AA "[was] the prevailing party" and (2) White was not "entitled to [her] fees and costs under RCW 18.27.040." CP at 410.
Because RCW 18.27.040(6) provides for the award of attorney fees only to the prevailing party, White's claim for attorney fees under that statute appears to be without merit. However, the trial court did not specifically enter a judgment on White's third party claim against the bond; thus, we remand for clarification of the trial court's findings under RCW 18.27.040.
B. AA's Bond Defense
Our Supreme Court has interpreted RCW 18.27.040's attorney fee provision "to be limited to actions against the bond." Cosmopolitan, 159 Wn.2d at 302. The Court also noted that, in crafting RCW 18.27.040(6), "it is entirely possible that the legislature simply did not consider that a contractor might prevail in an action against the bond and then seek attorney fees." Cosmopolitan, 159 Wn.2d at 305 n. 4. Nevertheless, the plain language of RCW 18.27.040(6) states:
The prevailing party in an action filed under this section against the contractor and contractor's bond or deposit, for breach of contract by a party to a construction contract, is entitled to costs, interest, and reasonable attorneys' fees. The surety upon the bond is not liable in an aggregate amount in excess of the amount named in the bond nor for any monetary penalty assessed pursuant to this chapter for an infraction.
"The court's fundamental objective is to ascertain and carry out the legislature's intent, and if the statute's meaning is plain on its face, then the court must give effect to that plain meaning as an expression of legislative intent." State ex rel. Citizens Against Tolls v. Murphy, 151 Wn.2d 226, 242, 88 P.3d 375 (2004).
Here, the trial court found that White failed to prove the contract she alleged in her third-party claim against the bond. Furthermore, the trial court stated unequivocally "that the plaintiff [AA] is the prevailing party." CP at 410. However, without elaborating, the trial court concluded that "RCW 18.27.040 does not provide [AA] with the right to attorney fees and costs." CP at 410.
In sum, the trial court failed to clarify its damages awards, failed to enter a judgment on White's third-party claim against the bond, and failed to award attorney fees to the prevailing party. Accordingly, we remand to the trial court for entry of judgment on the third-party claim and for a determination and award of attorney fees under RCW 18.27.040(6) to the prevailing party.
III. Attorney Fees on Appeal
Both White and AA request attorney fees on appeal. White requests fees under RCW 18.27.040(6), which also allows fees to the prevailing party on appeal. We hold that her request fails because at this time there is no entry of judgment on her third party claim against the bond. Additionally, because AA fails to provide a statutory basis for its request in the appropriate section of its brief, we also hold that AA's request for fees on appeal fails.
We granted AA's motion to join CBIC and we remand to the trial court for (1) clarification of its damages award under the various claims, before calculation of the offsets, (2) determination of the prevailing party on the third-party bond claim and entry of judgment, and (3) an award of attorney fees to the prevailing party under RCW 18.27.040(6) on the bond claim.
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.
BRIDGEWATER, J., HUNT, J., concur.