Opinion
No. 57319-5-I.
November 27, 2006.
Appeal from a judgment of the Superior Court for Snohomish County, No. 05-2-11051-0, Larry E. McKeeman, J., entered October 21 and November 16, 2005.
Counsel for Appellant(s), Kurt F. Stark (Appearing Pro Se), Ana M. Stark (Appearing Pro Se).
Counsel for Defendant(s), John P. Braislin, Betts Patterson Mines PS, Seattle, WA.
Jody Kristen Reich, Betts Patterson Mines, Seattle, WA.
Counsel for Respondent(s), Bruce A. Peterson, Attorney at Law, Everett, WA.
Pamela A. Okano, Reed McClure, Two Union Square, Seattle, WA.
Affirmed by unpublished per curiam opinion.
Kurt and Ana Stark contracted with a general contractor to construct their new home. The contractor hired subcontractors to install the flooring and tile in the home. When the Starks became dissatisfied with the tile and flooring installation, they filed this action against the first-and second-tier subcontractors, but did not sue the general contractor. Because the Starks failed to establish any factual issues as to whether they were third-party beneficiaries of the contracts between the general contractor and the subcontractors, we affirm the trial court's dismissal of their claims, including claims for breach of contract and breach of implied warranties, on summary judgment. We also award attorney fees to the subcontractors for a frivolous appeal.
FACTS
Viewed in the light most favorable to the Starks, the materials before the trial court support the following factual summary. In October 2003, the Starks entered into a written contract with Bradford Building Design (Bradford) for the construction of the Starks' new home. Among other things, the contract provided that Bradford was responsible for supervising the construction of the house. During the course of construction, Bradford contracted with respondent Van Dam Floor Covering to install flooring, tile, and other materials in the home. Van Dam, in turn, contracted with respondent Straight Grain Hardwood Floors to install and finish the hardwood floors.
After becoming dissatisfied with the installation of bathroom tiles and the hardwood flooring and the failure of the subcontractors to correct all alleged deficiencies, the Starks filed this action against Van Dam and Straight Grain, alleging claims of breach of implied warranties, "property damage," violation of the Consumer Protection Act, negligence, breach of contract, and negligent misrepresentation. The complaint also named as defendants the flooring supplier, Pankratz Forest Industries, and Van Dam's bonding company, Contractors Bonding Insurance Company (CBIC). The Starks did not name Bradford, the general contractor, as a defendant.
Pankratz was later dismissed by stipulation and is not a party to the appeal.
Both Van Dam and Straight Grain moved to dismiss under CR 12(b)(6). In response to the motions, the Starks urged the trial court to consider several documents, including a letter from the flooring supplier to Straight Grain about the results of an inspection of the alleged defective flooring, a copy of the Starks' contract with the general contractor, letters from Van Dam to the Starks, and an affidavit by Kurt Stark. The trial court eventually entered orders dismissing the Starks' claims for failure to state a cause of action. In its orders, the court indicated that the result was same under CR 12(b)(6) and CR 56. The court also awarded Straight Grain attorney fees and costs of $4,705 under RCW 4.84.185.
STANDARD OF REVIEW
The Starks contend that this court should apply the standard of review for dismissals under CR 12(b)(6). But when responding to the motions to dismiss, the Starks submitted various documents, including letters and an affidavit, and repeatedly urged the trial court to consider those materials. If, in response to a CR 12(b)(6) motion to dismiss, "matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in rule 56." CR 12(b). The trial court did not exclude the Starks' supporting materials. Accordingly, we review the trial court's dismissals as a summary judgment. St. Yves v. Mid State Bank, 111 Wn.2d 374, 377, 757 P.2d 1384 (1988).
(Emphasis added).
When reviewing a grant of summary judgment, this court considers the evidence and the reasonable inferences therefrom in the light most favorable to the nonmoving party. Schaaf v. Highfield, 127 Wn.2d 17, 21, 896 P.2d 665 (1995). Summary judgment is appropriate "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); White v. State, 131 Wn.2d 1, 9, 929 P.2d 396 (1997).
In their appeal, the Starks have raised numerous assignments of error involving both Van Dam and Straight Grain. But their supporting arguments do not always relate to the assignments of error and statement of issues or clearly identify the party to which they apply. Accordingly, in identifying and addressing the issues on appeal, we rely primarily on the Starks' arguments, rather than on their assignments of error. See Saunders v. Lloyd's of London, 113 Wn.2d 330, 345, 779 P.2d 249 (1989) (appellate court will not consider issues unsupported by adequate argument and authority).
DECISION Negligent Misrepresentation
The Starks first contend that the trial court erred in dismissing their claim for negligent misrepresentation against Straight Grain. This contention rests on a letter from Jeff Donnell, a representative of the flooring supplier, to Van Dam following an inspection of the installation. In the letter, Donnell stated that the floor installation was "within the recognized standards of the industry." The Starks maintain that after originally agreeing to correct the defective floor finish, Van Dam justifiably relied on Donnell's misrepresentation and refused to perform any corrective work.
A plaintiff claiming negligent misrepresentation must prove, by clear, cogent, and convincing evidence, that: (1) the defendant supplied false information to another in a business transaction; (2) the defendant knew or should have known that he or she supplied the information to guide the plaintiff in a business transaction; (3) the defendant negligently communicated the false information; (4) the plaintiff justifiably relied on the false information; and (5) the false information proximately caused the plaintiff's damages. Lawyers Title Ins. Corp. v. Baik, 147 Wn.2d 536, 545, 55 P.3d 619 (2002). But the Starks have not identified any relevant authority to support their assertion of a claim based on Van Dam's "justifiable reliance" on Straight Grain's alleged misrepresentation. The trial court did not err in dismissing the Starks' claim for negligent misrepresentation.
Breach of Contract/Breach of Implied Warranties
The Starks next contend the trial court erred in dismissing their claim of breach of contract against Van Dam and Straight Grain. They allege that they were the intended third-party beneficiaries of the contract between Bradford and Van Dam and, to some extent, of the contract between Van Dam and Straight Grain, and are therefore permitted to seek recovery for breach of the implied warranties in those contracts. These contentions fail for several reasons.
Recognizing that they have no direct privity with either subcontractor, the Starks' arguments on appeal rest heavily on their claim that they are third-party beneficiaries of the contracts between Bradford, the general contractor, and the subcontractors. But the creation of a third-party beneficiary contract requires that both parties "intend that the promisor assume a direct obligation to the intended beneficiary at the time they enter into the contract." (Italics ours.) Burke Thomas, Inc. v. International Org. of Masters, 92 Wn.2d 762, 767, 600 P.2d 1282 (1979). The Starks cannot satisfy this requirement by relying on their own actions after the dispute arose, such as entering into a supplemental contract with Bradford. See Postlewait Constr., Inc. v. Great American Ins. Cos., 106 Wn.2d 96, 101, 720 P.2d 805 (1986) (the fact that one of the parties to a contract and a third person intend that the latter should be a beneficiary is insufficient to create a third-party beneficiary).
Moreover, the rule in Washington is that "a property owner is generally not a third-party beneficiary of a contract between the general contractor and a subcontractor." Warner v. Design and Build Homes, Inc., 128 Wn. App. 34, 43, 114 P.3d 664 (2005). Such contracts
are made to enable the principal contractor to perform; and their performance by the subcontractor does not in itself discharge the principal contractor's duty to the owner with whom he has contracted. The installation of plumbing fixtures or the construction of cement floors by a subcontractor is not a discharge of the principal contractor's duty to the owner to deliver a finished building containing those items; and if after their installation the undelivered building is destroyed by fire, the principal contractor must replace them for the owner, even though he must pay the subcontractor in full and has no right that the latter shall replace them. It seems, therefore, that the owner has no right against the subcontractor, in the absence of clear words to the contrary. The owner is neither a creditor beneficiary nor a donee beneficiary; the benefit that he receives from performance must be regarded as merely incidental.
Warner, 128 Wn. App. at 43 (quoting 9 Arthur L. Corbin, CORBIN ON CONTRACTS § 779D (1979)). Here, the Starks have failed to create any material factual issue suggesting that the subcontractors intended to create a contract directly obligating them to perform a duty owed to the Starks or that their actions in originally installing materials or correcting any deficiencies constituted anything other than performance under the terms of their contracts with Bradford.
As the Starks correctly note, vertical privity may be sufficient to support implied warranty liability under certain circumstances. But "[f]or vertical privity to be sufficient to create an implied warranty, the claimant must essentially occupy the position of an intended third party beneficiary." Urban Dev., Inc. v. Evergreen Bldg. Prods., 114 Wn. App. 639, 647, 59 P.3d 112 (2002), aff'd sub nom., Fortune View Condominium Ass'n v. Fortune Star Development Co., 151 Wn.2d 534, 90 P.3d 1062 (2004). For the reasons set forth above, the Starks have failed to create a factual issue suggesting that they occupied any position remotely comparable to a third-party beneficiary.
The trial court did not err in dismissing the Starks' claims for breach of contract and breach of implied warranties.
Consumer Protection Act
The Starks next contend that the trial court erred in dismissing their Consumer Protection Act claim against Van Dam. This claim apparently rests on the statements on Van Dam's web site that "[w]e always stand behind our products . . . we handpick . . . our installers . . . (they) will guarantee what they install."
In order to maintain a CPA claim under RCW 19.86, the Starks were required to prove (1) an unfair or deceptive act or practice, (2) occurring in the conduct of trade or commerce, (3) that impacts the public interest, and (4) proximately causes injury to the plaintiff in his or her business or property. Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 105 Wn.2d 778, 785-93, 719 P.2d 531 (1986). But the Starks have failed to make any showing that Van Dam's alleged deceptive act was the proximate cause of their injuries. Nothing in the record suggests that the Starks or anyone else was aware of the statements prior to the dispute or took any action in reliance on the statements. The trial court properly dismissed the CPA claim.
Remaining Claims
The Starks also contend that the trial court erred in dismissing claims of breach of express warranties, equitable estoppel, waiver of express warranty, and negligent property damage. But a review of the record shows that the Starks failed to make the same arguments to the trial court that they are now raising on appeal. Accordingly, we decline to consider them for the first time on appeal. See RAP 2.5(a). Contrary to the Starks' assertions, a conclusory comment at oral argument that "I think I could also argue a type of estoppel" or claims raised in a response to a motion for reconsideration are insufficient to raise a legal argument before the trial court, much less preserve an issue for appeal.
Attorney Fees under RCW 4.84.185
The Starks next contend that the trial court erred in awarding attorney fees to Straight Grain under RCW 4.84.185 for a frivolous action. They argue that the lawsuit was not frivolous because the trial court denied Straight Grain relief under CR 11 and because the trial court did not find that the claims against Van Dam were frivolous. The Starks cite no relevant authority to support these contentions.
Sanctions under CR 11 are distinct from claims under RCW 4.84.185 and require a showing that a party filed a pleading without conducting a reasonable inquiry into the factual and legal basis for the claims. See Bryant v. Joseph Tree, Inc. 119 Wn.2d 210, 220, 829 P.2d 1099 (1992). An action is frivolous for purposes of RCW 4.84.185 if it cannot be supported "by any rational argument on the law or facts." Jeckle v. Crotty, 120 Wn. App. 374, 387, 85 P.3d 931 (2004). Consequently, the failure to satisfy the requirements of CR 11 does not preclude an award for a frivolous action under RCW 4.84.185. See Biggs v. Vail, 119 Wn.2d 129, 133-37, 830 P.2d 350 (1992). The Starks have not cited any authority to the contrary.
Nor did the trial court's refusal to award fees to Van Dam for a frivolous action preclude an award to Straight Grain. Although all claims against the prevailing party must be frivolous in order to support an award under RCW 4.84.185, see Biggs v. Vail, 119 Wn.2d at 133, no authority supports the Starks' assertion that the trial court must find the action frivolous as to "all allegations and all parties." Brief of App., at 25. Such an interpretation would undermine the very purpose of RCW 4.84.185, which is to discourage frivolous lawsuits "and to compensate the targets of such lawsuits for fees and expenses incurred in fighting meritless cases." Biggs v. Vail, 119 Wn.2d at 137. The trial court did not abuse its discretion in awarding Straight Grain attorney fees under RCW 4.84.185.
Denial of Hearing/Refusal to Rule on Motion for Reconsideration.
Finally, the Starks contend that the trial court erred in refusing their request for a hearing on their motion for reconsideration of the trial court's order granting Straight Grain's motion for reconsideration and awarding sanctions and in refusing to rule on the motion for reconsideration. But the trial court's ruling on the request for a hearing was clearly discretionary, see SCLR 59(e)(3)(D), and the Starks have not identified any abuse of discretion. Nor do the Starks conclusory assertions identify any prejudice resulting from the trial court's refusal to consider a further motion for reconsideration.
Attorney Fees on Appeal
Both Van Dam and Straight Grain have requested an award of attorney fees for a frivolous appeal under RAP 18.9(a). An appeal is frivolous "if the appellate court is convinced that the appeal presents no debatable issues upon which reasonable minds could differ and is so lacking in merit that there is no possibility of reversal." In re Marriage of Foley, 84 Wn. App. 839, 847, 930 P.2d 929 (1997). That standard is satisfied here. The Starks have failed to identify any debatable issue on appeal in support of reversal. Accordingly, both Straight Grain and Van Dam are awarded attorney fees for a frivolous appeal.
The trial court's dismissal of the Starks' claims is affirmed; Straight Grain's and Van Dam's requests for attorney fees on appeal are granted subject to compliance with RAP 18.1(d).