Opinion
No. 28886-9-II.
Filed: March 9, 2004. UNPUBLISHED OPINION
Appeal from Superior Court of Clark County. Docket No. 98-2-02045-1. Judgment or order under review. Date filed: 05/22/2002. Judge signing: Hon. James D Ladley.
Counsel for Appellant(s), Wade Rowland Dann, Dann Meacham, 2014 E Madison St. Ste 100, Seattle, WA 98122-2965.
Eric Ronald Hultman, Dann Meacham, 2014 E Madison St. Ste 100, Seattle, WA 98122-2965.
Philip Albert Talmadge, Talmadge Stockmeyer, 18010 Southcenter Pkwy, Tukwila, WA 98188-4630.
Counsel for Respondent/Cross-Appellant, Howard Mark Goodfriend, Edwards Sieh Smith Goodfriend PS, 1109 1st Ave Ste 500, Seattle, WA 98101-2988.
James T. McDermott, Ball Janik LLP, 101 SW Main St. Ste 1100, Portland, OR 97204-3219.
WaferTech, L.L.C. entered into a prime construction contract with Meissner + Wurst Zander, U.S. Operations, Inc. (M+W). M+W subcontracted with Natkin/Scott, a Joint Venture for some specialized work. Natkin/Scott also entered into prime contracts with WaferTech for other parts of the project.
Natkin/Scott assigned its rights to Business Services of America, an entity created to pursue Natkin/Scott claims. For clarity, we refer to the appellant as Natkin/Scott.
M+W terminated its subcontract with Natkin/Scott based on safety violations. Natkin/Scott sued M+W. Natkin/Scott also sued WaferTech directly, through a construction lien foreclosure action, and under M+W's "pass-through rights." The trial court allowed Natkin/Scott to pursue its pass-through claims against WaferTech because it found that M+W was a validly registered Washington contractor. But it limited Natkin/Scott to $2.4 million of any pass-through recovery against WaferTech, based on an agreement between M+W and Natkin/Scott.
Pass-through claims are those in which a subcontractor's claims, the subcontractor not having contractual privity with the owner, are "passed-through" the prime contractor who has contractual privity to initiate a suit against the owner. Howard Contracting, Inc. v. G.A. MacDonald Constr. Co., 71 Cal.App.4th 38, 83 Cal.Rptr.2d 590, 602 (1998).
The trial court also found that Natkin/Scott had waived and released some of its construction lien claims and it limited Natkin/Scott's remaining claims against WaferTech to $1.5 million. The trial court further dismissed some of Natkin/Scott's claims as barred after finding that it was not a validly registered Washington contractor when it entered into its subcontract with M+W. Natkin/Scott appeals a trial court order barring and limiting its claims. Natkin/Scott also appeals the trial court's award of more than $800,000 in attorney fees and costs incurred by WaferTech in defending the lien claim. WaferTech cross-appeals the trial court's ruling that M+W was a validly registered contractor. We affirm in part, reverse in part, and remand for further proceedings.
FACTS
WaferTech planned to build a $1.2 billion silicon wafer manufacturing plant in Camas. WaferTech contracted with ADP/Fluor Daniel (the project manager) to design and manage the project. The work was let through more than 30 prime contracts.
M+W had knowledge and experience in constructing wafer manufacturing facilities, including impurity-free "cleanrooms." II Report of Proceedings (RP) at 15. WaferTech contracted with M+W to act as the cleanroom prime contractor.
Because M+W's contractor registration status bears on issues here, a timeline of its contractor registration status and its contract negotiations with WaferTech helps illuminate the facts:
August 20, 1996: WaferTech sent a letter of intent to award the cleanroom contract to M+W.
Clerk's Papers (CP) at 1301.
November 21, 1996: M+W and WaferTech agree to enter the cleanroom construction contract. Exhibit 659; CP at 2032 (M+W's Procurement manager declaration); M+W repeats this contract entry date in its cross-claim. CP at 2093. M+W and WaferTech recite this contract entry date in their February 8, 1999 Settlement Agreement. Exh. 662.
February 25, 1997: The project manager sends a second letter of intent, as written confirmation, awarding M+W the $37 million cleanroom prime contract. CP at 1306-07; Exh. 68.
March 4, 1997: M+W signs and returns the February 25, 1997 letter of intent. CP at 1306-07.
March 19, 1997: M+W first applies for Washington contractor registration. April 2, 1997: M+W registers as a Washington contractor. CP at 1326. September 25, 1997: The formal contract signed by WaferTech and M+W begins: "THIS CONTRACT IS entered into, effective as of November 21, 1996 . . ." CP at 1303-04.
M+W then subcontracted with Natkin/Scott to install the cleanroom plumbing and piping system (the 403 contract). Natkin/Scott also entered into prime contracts with WaferTech for other parts of the plant project (the 401 and 402 contracts).
Because Natkin/Scott's contractor registration status also bears on issues here, a timeline of its contractor registration status and its contract negotiations with M+W also further illuminates the facts: December 13, 1996: Natkin/Scott submits bid to M+W, who does not accept the bid. Negotiations continue between the two companies. CP at 426. February 21, 1997: Joint Venture Agreement creates Natkin/Scott from Natkin Contracting L.L.C. and Scott Company of California. CP at 427. April 14, 1997: Natkin/Scott applies for Washington contractor registration with the Department of Labor and Industries (LI). By April 24, LI rejects application for failing to have a valid bond. Exh. 637. The bond specified that it was effective from March 20, 1997 to March 20, 1997. Exh. 637.
April 23, 1997: Natkin/Scott revises bid to M+W. CP at 426-27. M+W sends letter of intent to award $6.58 million cleanroom plumbing and piping contract to Natkin/Scott. CP at 427; Exh. 645.
April 28, 1997: The bonding company sends letter to LI specifying the effective bond period is from March 20, 1997 to March 20, 1998, not March 20, 1997 to March 20, 1997. Exh. 637.
April 29, 1997: Natkin/Scott signs and mails back the April 23, 1997 letter of intent. CP at 427.
May 1, 1997: Natkin/Scott validly registers as a Washington contractor. CP at 427; Exh. 637.
Natkin/Scott sued WaferTech under the 401 and 402 contracts. The parties settled, and the 401 and 402 contracts are not at issue on appeal. The trial court entitled these claims the "Track B" litigation. The dispute at issue here concerns the 403 cleanroom plumbing and piping contract, which the trial court entitled the "Track A" litigation. II RP at 19.
In late 1997, when Natkin/Scott's work exceeded that anticipated by the 401, 402, and 403 contracts, it notified WaferTech, the project manager, and M+W of its additional work claims. In December 1997 and January 1998, Natkin/Scott signed several lien waivers and claims releases for M+W so that Natkin/Scott could receive progress payments for work completed through January 31, 1998. But these releases did not expressly reserve Natkin/Scott's claims for additional compensation. After January 31, 1998, Natkin/Scott submitted releases that expressly reserved the right to additional compensation.
On March 30, 1998, WaferTech notified M+W that Natkin/Scott's safety violations constituted default of M+W's prime contract with WaferTech. On April 17, 1998, the project manager, on behalf of WaferTech, directed M+W to terminate Natkin/Scott's contract. The project manager also advised M+W that WaferTech would terminate its contract with M+W if M+W did not terminate Natkin/Scott.
On April 22, 1998, M+W terminated Natkin/Scott. The same day, M+W notified WaferTech that it would hold WaferTech liable for M+W's increased project costs arising from terminating Natkin/Scott.
According to the WaferTech and M+W contract, WaferTech retained authority to direct M+W to terminate a subcontractor for breach of contract based on safety violations. But according to the M+W and Natkin/Scott subcontract, M+W had to give Natkin/Scott "forty-eight hours" to cure the safety violations before terminating the subcontract. Clerk's Papers at 23-24. M+W did not do so.
On April 28, 1998, Natkin/Scott filed and recorded a $7.65 million construction lien on WaferTech's Camas property. In May 1998, Natkin/Scott filed a lawsuit against M+W, alleging claims based on breach of the subcontract, wrongful termination, and quantum meruit, and against WaferTech, asserting a foreclosure claim on its construction lien. M+W and WaferTech disagreed as to which entity was responsible for increased project costs associated with Natkin/Scott's termination. Exhibits 463, 945. On February 8, 1999, M+W and WaferTech settled and dismissed their claims, expressly reserving their rights against each other as to Natkin/Scott's litigation claims. Exh. 662. On March 25, 1999, M+W filed a cross-claim against WaferTech for its additional costs and any costs associated with Natkin/Scott's termination.
This is the Track A litigation referred to in footnote 5.
M+W voluntarily dismissed its cross-claims against WaferTech on March 29, 1999.
On July 21, 1999, Natkin/Scott moved for partial summary judgment, arguing that M+W breached the subcontract when it failed to give Natkin/Scott its contractually-specified 48 hours to cure safety violations. The trial court granted the motion. Natkin/Scott could then recover from M+W its unpaid direct costs, overhead, and profit for work completed under the subcontract.
WaferTech moved for partial summary judgment seeking to reduce Natkin/Scott's lien from $7.65 million to $1.5 million. On February 27, 2001, the trial court determined that Natkin/Scott waived and released its lien claims through January 31, 1998, when it failed to properly reserve them. The trial court granted WaferTech's motion and accordingly reduced the lien to $1.5 million for post-January 31 claims.
$1.5 million represents the trial court's valuation of Natkin/Scott's post-January 31, 1998 lien claims.
On March 19, 2001, M+W agreed to settle Natkin/Scott's claims against it and entered into a "Severin Agreement for Pursuit of Claims." Exh. 1354. Under it, M+W assigned its pass-through rights to Natkin/Scott, allowing Natkin/Scott to pursue M+W's claims directly against WaferTech. Natkin/Scott also received $2.4 million from M+W to settle. On March 26, 2001, the trial court granted M+W and Natkin/Scott's joint motion to dismiss their claims and counterclaims with prejudice.
The Severin doctrine generally applies to "contract claims against the federal government." Frank Briscoe Co. v. County of Clark, 772 F. Supp. 513, 516-17 n. 7 (D. Nev. 1991); see Severin v. United States, 99 Ct. Cl. 435 (1943), cert. denied, 322 U.S. 733 (1944). Nevertheless, M+W and Natkin/Scott entered into a so-called Severin Agreement to specify Natkin/Scott's pass-through claims. Under the Severin doctrine, the prime contractor can recoup damages on behalf of the subcontractor if the prime contractor suffers actual damages. Frank Briscoe, 772 F. Supp. at 516. Actual damages to the prime contractor are (1) reimbursing the subcontractor for the subcontractor's damages or (2) the prime contractor remaining liable for reimbursing the subcontractor for such damages in the future. Frank Briscoe, 772 F. Supp. at 517.
On May 16, 2001, Natkin/Scott filed a second amended complaint, asserting its lien foreclosure claim against WaferTech and also its pass-through claims against WaferTech based on breach of contract, wrongful termination, and quantum meruit. In response, WaferTech impleaded M+W and asserted third party claims against it.
WaferTech then moved for partial summary judgment on Natkin/Scott's pass-through claims. WaferTech argued that Natkin/Scott had expressly released its claims for work through January 31, 1998, and its claims passing through M+W could not revive them. The court denied the motion. WaferTech moved for partial summary judgment on M+W's counterclaims, arguing that M+W was not a validly registered contractor when it entered into its contract with WaferTech. The trial court denied WaferTech's motion, instead ruling as a matter of law that M+W was a properly registered contractor.
The trial court certified the contractor registration issue to this court under CR 54(b). We declined to take review, in part because the trial court did not commit obvious or probable error. RAP 2.3(b)(1); COA No. 28020-5-II. After we denied review, the trial court then noted,
I think the registration [M+W] issue is a matter of law, Counsel, now that I look at it. Again, I think I should have — maybe I should have made a different ruling on M+W. Again, I sort of dodged my responsibility there, thinking the appellate court would take care of it, if I had erred. I think I did. But then, that's something that will go up.
IX RP at 18
WaferTech moved for partial summary judgment, seeking to limit Natkin/Scott's direct claims against it to $2.4 million based on Natkin/Scott's and M+W's settlement. On December 21, 2001, the trial court granted WaferTech's motion, limiting Natkin/Scott's pass-through claim recovery from WaferTech to $2.4 million. In its initial November 26, 2001, letter ruling, the trial court reasoned that the Severin Agreement, along with M+W and WaferTech's agreement to dismiss their claims with prejudice, limited M+W's damages and similarly limited WaferTech's potential liability on the pass-through claims. Severin v. United States, 99 Ct. Cl. 435 (1943), cert. denied, 322 U.S. 733 (1944).
The matter was set for a jury trial. At the start of trial, M+W and WaferTech settled their claims against each other and the court dismissed them with prejudice. The remaining trial issues revolved around Natkin/Scott's lien foreclosure claim against WaferTech and its pass-through claims for breach of contract, wrongful termination, and quantum meruit.
At trial, WaferTech renewed its motion for partial summary judgment to limit Natkin/Scott's lien claims to work completed after January 31, 1998. The trial court determined that Natkin/Scott's pre-January 31 lien claim waivers were unambiguous, valid, and enforceable. It granted WaferTech's motion and limited Natkin/Scott's recovery to contractual costs incurred beginning February 1, 1998. The trial court also awarded WaferTech $66,058.50 in attorney fees and costs in defending the excessive lien claim.
RCW 60.04.081(4), frivolous claim statute, states: "If . . . the court determines that the lien is
. . . clearly excessive, the court shall issue an order . . . reducing the lien if clearly excessive, and awarding costs and reasonable attorneys' fees to the applicant to be paid by the lien claimant."
At trial in April 2002, Natkin/Scott asked the court to rule, as a matter of law, on its pass-through rights based on its breach of contract and wrongful termination claims. The trial court dismissed both of these claims because it determined WaferTech did not breach its contract with M+W. The court concluded that the contract between WaferTech and M+W allowed WaferTech to notify M+W that it would terminate its contract if M+W did not terminate Natkin/Scott for safety violations. This ruling deprived Natkin/Scott of pass-through rights on its wrongful termination and breach of contract claims against WaferTech.
Natkin/Scott and WaferTech then waived their right to a jury trial on Natkin/Scott's remaining quantum meruit and lien foreclosure claims. The trial court dismissed the jury. The trial court then heard testimony regarding Natkin/Scott's contractor registration status. It found that Natkin/Scott was not validly registered as a Washington contractor when it subcontracted with M+W. The trial court concluded that Natkin/Scott was therefore barred from bringing suit against M+W and dismissed Natkin/Scott's remaining quantum meruit and lien foreclosure claims.
On May 22, 2002, the trial court entered findings of fact and conclusions of law on its trial rulings. It reaffirmed its earlier letter opinion ruling on April 9, 2001, in favor of WaferTech for $66,058.50 in attorney fees and costs expended defending the excess lien claim. WaferTech requested additional fees and costs incurred in defending Natkin/Scott's lien foreclosure claim through May 14, 2001. On September 13, 2002, the trial court awarded WaferTech an additional $790,701.98 in attorney fees and costs for defending the lien claim.
Natkin/Scott appeals and WaferTech cross-appeals.
ANALYSIS Natkin/Scott's Contractor Registration
Unless validly registered under the Registration of Contractors Act, also known as the CRA, a contractor has no standing to seek redress from the courts. RCW 18.27.080; Bort v. Parker, 110 Wn. App. 561, 571, 42 P.3d 980, review denied, 147 Wn.2d 1013 (2002). Valid registration requires a contractor to submit an application to the Department of Labor and Industries (LI), including proof of a current bond and current insurance. RCW 18.27.010, .040, .050, .080.
Natkin/Scott first contends that the trial court erred in finding that it was not validly registered when it entered into its subcontract with M+W. Natkin/Scott asserts that it was validly registered and therefore has standing to sue WaferTech.
We limit our review of the trial court's findings of fact to determine whether substantial evidence supports them and, if so, whether the findings support the conclusions of law. Scott v. Trans-System, Inc., 148 Wn.2d 701, 707-08, 64 P.3d 1 (2003). Substantial evidence exists where there is a sufficient quantum of evidence in the record to persuade a fair-minded, rational person of the truth of the finding. City of Tacoma v. William Rogers Co., 148 Wn.2d 169, 191, 60 P.3d 79 (2002). Here, the trial court found that M+W accepted Natkin/Scott's bid for the WaferTech project and sent a letter of intent to award the contract to Natkin/Scott on April 23, 1997. It further found that Natkin/Scott did not have a valid bond on that date. It then concluded that Natkin/Scott entered into its contract with WaferTech before becoming validly registered on May 1, 1997.
Our review of the record discloses that substantial evidence does not support the trial court's findings. On April 14, 1997, Natkin/Scott applied to LI for contractor registration. The application included proper proof of insurance through May 1, 1997. But the bond recited March 20, 1997, for both its start and end dates, causing LI to temporarily reject the application as incomplete.
To correct this deficiency, Natkin/Scott asked the bonding company to correct its typographical error. The bonding company then sent a letter identifying the correct bond termination date as March 20, 1998. On May 1, 1997, after receiving the letter, LI immediately issued Natkin/Scott its registration. LI required neither a new application nor additional materials; it merely accepted the bonding company's letter, indicating that LI believed that Natkin/Scott's application was complete except for the scrivener's error.
On April 29, Natkin/Scott submitted a second insurance certificate for May 1, 1997-May 1, 1998.
Under RCW 18.27.080, a contractor may substantially comply with the CRA and seek redress for its claims through the courts. In deciding whether substantial compliance applies, a court must take "into consideration the length of time during which the contractor did not hold a valid certificate of registration." RCW 18.27.080. Whether substantial compliance exists is fact dependent on each case. B.A. Van De Grift, Inc. v. Skagit County, 59 Wn. App. 545, 549, 800 P.2d 375 (1990). Thus, we must decide whether Natkin/Scott substantially complied with the CRA before contracting with M+W.
The trial court determined that Natkin/Scott entered its contract with M+W on April 23, 1997, and that Natkin/Scott complied with the CRA on May 1, 1997. Here, when Natkin/Scott submitted its application, it had a valid bond (as later explained in the bonding company letter) and insurance. The court found that Natkin/Scott did not properly register as a contractor on May 1, 1997. We disagree. At most, eight days elapsed between Natkin/Scott contracting with M+W and LI issuing Natkin/Scott's registration. We reverse the trial court because Natkin/Scott substantially complied with the CRA before entering into its contract with M+W.
Because we hold that Natkin/Scott substantially complied with the CRA, we do not address its other arguments for finding that it was properly registered.
M+W's Contractor Registration Status
Because resolution of WaferTech's cross-appeal on M+W's contractor registration status disposes of several arguments, we turn next to that issue. WaferTech contends that the trial court erred in deciding sua sponte that M+W was a validly registered Washington contractor when it entered into its prime contract with WaferTech. WaferTech asserts that because M+W was not validly registered, the CRA bars Natkin/Scott's claims passed through M+W.
WaferTech seems to argue that the trial court should not have denied its motion for summary judgment on the contractor registration issue and then, sua sponte, rule in favor of M+W. We disagree because a court may, on its own, grant summary judgment in favor of the nonmoving party when denying a moving party's motion for summary judgment. Health Ins. Pool v. Health Care Auth., 129 Wn.2d 504, 507, 919 P.2d 62 (1996).
After denying M+W's motion for summary judgment, the trial court determined, as a matter of law, that M+W was validly registered before entering their contract. The trial court's ruling hinged on its determination that M+W and WaferTech entered into their written contract after M+W registered under the CRA. But a review of the record discloses that M+W and WaferTech believed otherwise.
We review an order on summary judgment de novo, considering all facts and inferences in the light most favorable to the nonmoving party. Hubbard v. Spokane County, 146 Wn.2d 699, 706-07, 50 P.3d 602 (2002). Summary judgment will be affirmed if there are no genuine issues of material fact. Hubbard, 146 Wn.2d 706-07.
In three documents, M+W and WaferTech agreed that their contract began on November 21, 1996. On September 25, 1997, M+W and WaferTech signed the cleanroom contract and agreed that the "contract is entered into, effective as of November 21, 1996." Exh. 659. On March 25, 1999, in M+W's cross-claim against WaferTech, it states that the contract was entered into by the parties on November 21, 1996. And on February 8, 1999, M+W's and WaferTech's settlement agreement stipulated that their written cleanroom contract was effective November 21, 1996.
Because M+W and WaferTech agreed that they entered into their contract on November 21, 1996, and because M+W was not validly registered until April 2, 1997, we hold that Natkin/Scott cannot assert that its claims pass through an unregistered contractor. Young v. Am. Can Co., 131 Wn. 374, 376, 230 P. 147 (1924) (an assignor's rights cannot be of greater interest in the contract, than the assignor possesses).
Natkin/Scott also contends that the trial court erred in limiting its pass-through claims against WaferTech to $2.4 million. Because we hold that M+W was not a validly registered contractor, and Natkin/Scott may not assert any rights through it. We do not further address this argument or Natkin/Scott's argument based on other pass-through claims.
Lien Release/Claims Waivers
Natkin/Scott also contends that the trial court erred in deciding that its pre-January 31, 1998 lien release waivers bar its claims for additional work performed before January 31, 1998. It asserts that the trial court erred in not applying the Berg context rule and considering extrinsic evidence regarding execution of the lien releases. Berg v. Hudesman, 115 Wn.2d 657, 801 P.2d 222 (1990). Natkin/Scott argues that it could provide evidence as to why it failed to reserve any rights when it signed the lien releases.
Natkin/Scott offered testimony showing an intention independent of the lien waivers and claim releases. This is not a proper use of extrinsic evidence.
A release is a contract subject to contract interpretation principles. Del Rosario v. Del Rosario, 116 Wn. App. 886, 891, 68 P.3d 1130 (2003). Like the trial court, we do not interpret unambiguous language, but rather give it its ordinary meaning. Martinez v. Kitsap Pub. Servs., Inc., 94 Wn. App. 935, 944, 974 P.2d 1261 (1999). And we will not read ambiguity into a contract where it can be reasonably avoided. Martinez, 94 Wn. App. at 944. The Berg context rule is appropriate when interpreting a contract and is used as an aid to ascertain the parties' intent. W. Wash. Corp of Seventh-Day Adventists v. Ferrellgas, Inc., 102 Wn. App. 488, 495, 7 P.3d 861 (2000), review denied, 143 Wn.2d 1003 (2201). Although this rule allows extrinsic evidence to show intent, it does not allow evidence of intent that is independent of the contract. W. Wash. Corp., 102 Wn. App. at 495. From the beginning of the project through January 31, 1998, Natkin/Scott signed lien release waivers in order to secure progress payments. The waivers did not separately reserve any rights to payment for additional work or change orders. Beginning February 1, 1998, Natkin/Scott added express language reserving rights, including "[a]ny and all contract change order modifications not yet issued and not yet billed; and any and all delays, acceleration and/or impact costs resulted by Natkin/Scott." Exh. 677.
Here, the trial court determined that the earlier releases unambiguously released all claims without reservation. It did not err in doing so and it properly limited Natkin/Scott's lien claim to costs incurred only after January 31, 1998.
Attorney Fees
Natkin/Scott further contends that the trial court improperly awarded WaferTech attorney fees and costs for defending against Natkin/Scott's lien claim. It asserts that the trial court abused its discretion in (1) failing to review the work time entries to determine whether they supported WaferTech's billing for motion work; (2) failing to enter findings of fact and conclusions of law; and (3) awarding attorney fees for work not related to defending the construction lien foreclosure.
We review an attorney fee award for an abuse of discretion. Rettkowski v. Dep't of Ecology, 128 Wn.2d 508, 519, 910 P.2d 462 (1996). A court abuses its discretion when it bases its decision on untenable grounds or gives untenable reasons. Rettkowski, 128 Wn.2d at 519.
Under RCW 60.04.081(4) (frivolous lien claims), a court "shall" award a prevailing party costs and reasonable attorney fees on determining that the lien is clearly excessive. And under the lodestar method for imposing fees, the prevailing party must provide proof of the fees' reasonableness and the court must find them nonduplicative, reasonable, and related to defending a particular claim. RPC 1.5; Mahler v. Szucs, 135 Wn.2d 398, 433-34, 957 P.2d 632, 966 P.2d 305 (1998).
A lawyer's fee shall be reasonable. The factors to be considered in determining the reasonableness of a fee include the following:
(1) The time and labor required, the novelty and difficulty of the questions involved, the skill requisite to perform the legal service properly and the terms of the fee agreement between the lawyer and client;
(2) The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
(3) The fee customarily charged in the locality for similar legal services;
(4) The amount involved in the matter on which legal services are rendered and the results obtained;
(5) The time limitations imposed by the client or by the circumstances;
(6) The nature and length of the professional relationship with the client;
(7) The experience, reputation, and ability of the lawyer or lawyers performing the services; and
(8) Whether the fee agreement or confirming writing demonstrates that the client had received a reasonable and fair disclosure of material elements of the fee agreement and of the lawyer's billing practices. RPC 1.5(a).
The trial court found that Natkin/Scott's lien claim was excessive and on May 22, 2002, it awarded WaferTech $66,058.50 in attorney fees. Later, on September 13, 2002, the trial court awarded WaferTech an additional $581,481.75 in attorney fees and $65,444.23 in costs related to defending Natkin/Scott's lien claim before May 14, 2001.
Based upon Natkin/Scott's concession, the trial court awarded WaferTech an additional $143,776 in attorney fees and costs for defending the lien foreclosure after May 14, 2001. WaferTech's total award for defending the lien claim was $856,760.48.
WaferTech asserts that because Natkin/Scott did not file an amended appeal asking us to review the attorney fee award, it waived its right of review. But WaferTech cites former RAP 2.4(g), effective until December 24, 2002. Now a party need not file an amended notice of appeal or an amended notice for discretionary review as previously required by RAP 4.2(g).
Natkin/Scott argues that the trial court did not determine that WaferTech incurred reasonable fees and costs related to defending the lien claim. We disagree. WaferTech submitted detailed entries of its legal work, including the hourly rate of and work performed by whom. The trial court noted that WaferTech's attorney and paralegal hourly fees were reasonable, comparable to other attorney fees, and related to work it performed defending the lien claim.
Natkin/Scott also argues that it demonstrated that WaferTech's fees were excessive. At trial, it offered the court its statement of what WaferTech should have incurred in defending the lien. The trial court stated that it found WaferTech's submission more credible, a finding that we do not disturb on appeal. RP (5/22/02) at 24-25. Gormley v. Robertson, Wn. App., 83 P.3d 1042 (2004). Natkin/Scott's argument fails.
Natkin/Scott next argues that the trial court failed to enter required findings of fact and conclusions of law regarding its attorney fee award. We agree that the trial court did not initially enter findings on its May 22, 2002, $66,058.50 award, but it did so later in its September 13, 2002, findings and conclusions. Natkin/Scott's argument fails.
In the May 22, 2002 order, the trial court clearly identified that "there is a direct and proximate connection between certain of the attorneys' fees . . . and its [WaferTech] successful reduction of Natkin/Scott's claims of lien"; the "successful motion of partial summary judgment on the line waiver and release issue was crucial to the success of WaferTech's motion to reduce" the lien. And the trial court went on to state that "pursuant to RCW 60.04.081, it is appropriate that WaferTech be awarded its attorney fees directly incurred in its successful motion for partial summary judgment in addition to the . . . fees directly incurred in its motion to reduce" the lien. CP at 2385-86.
Finally, Natkin/Scott argues that the trial court improperly awarded $790,701.98 in costs and attorney fees to WaferTech, not related to defending the lien claim.
This $790,701.98 award comprises $716,257.75 in fees and $74,444.23 in costs.
The trial court determined that WaferTech's reasonable attorney fees before May 14, 2001, were $581,481.75 and its costs $65,444.23, not including its earlier lien defense claim award for $66,058.50. The trial court concluded that these fees and costs were all related to defending Natkin/Scott's lien foreclosure claim and were recoverable by WaferTech under RCW 60.04.081.
And the trial court also determined that WaferTech's continued defense of the foreclosure claim after May 14, 2001, was inextricably intertwined with Natkin/Scott's breach of contract, wrongful termination, and quantum meruit pass-through claims. As such, the trial court concluded that after this date, WaferTech's litigation expenses were not recoverable under RCW 60.04.081. The trial court did, however, award WaferTech $134,776 in attorney fees and $9,000 in costs for work completed on the lien foreclosure claim after May 14, 2001, based on Natkin/Scott's concession that WaferTech could recover for some work after May 14, 2001. Natkin/Scott argues that it did not concede the amounts awarded. Natkin/Scott fails to adequately support this argument and we do not otherwise address it. RAP 10.3(a)(5).
The trial court did not abuse its discretion in awarding attorney fees and costs to WaferTech.
Prejudgment Interest
Natkin/Scott also contends that the trial court erred in awarding WaferTech prejudgment interest on a $66,058.50 attorney fee award. It asserts that because attorney fees are discretionary, the trial court cannot base a prejudgment interest award on an attorney fee award. We agree. Weyerhaeuser Co. v. Commercial Union Ins. Co., 142 Wn.2d 654, 687-88, 15 P.3d 115 (2000) (attorney fee award is discretionary and not subject to prejudgment interest).
The trial court also awarded prejudgment interest on the September 13, 2002 award for attorney fees for $716,257.75. Under former RAP 2.4(g), we also review this award.
We reverse the prejudgment interest awards and remand to recalculate the judgment.
Attorney Fees on Appeal
Both Natkin/Scott and WaferTech seek attorney fees and costs on appeal. Under RAP 18.1, we may award reasonable attorney fees and costs to the prevailing party. Natkin/Scott prevailed on its CRA argument, whereas WaferTech prevailed on its pass-through claims. WaferTech may also be entitled to fees under RCW 60.04.181(3). Because neither party prevailed on all claims and because an award under RCW 60.04.181 is discretionary, we decline to award fees on appeal to either party.
RCW 60.04.181(3) states in part: "The court may allow the prevailing party in the action, whether plaintiff or defendant, as part of the costs of the action, the moneys paid for recording the claims of lien, costs of title report, bond costs, and attorneys' fees and necessary expenses incurred by the attorney in the superior court, court of appeals, supreme court, or arbitration, as the court or arbitrator deems reasonable."
Affirmed in part, reversed in part, and remanded for further proceedings.
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.
SEINFELD, J. and HUNT, C.J. concur.