Opinion
No. 58906-7-I.
September 4, 2007.
Appeal from a judgment of the Superior Court for King County, No. 06-2-01253-4, Jim Rogers, J., entered September 11, 2006.
Affirmed by unpublished per curiam opinion.
In the condemnation suit between the City of Shoreline (the City) and Anthony and Barbara Catania (collectively Catania), Catania filed a motion to exclude evidence that Catania had an obligation to dedicate a sidewalk easement to the City. Catania argued that the City's breach of contract claim was unrelated and separate from the condemnation action. In response, the City agreed with Catania's position. The court then entered an order granting Catania's motion to exclude evidence related to the City's requirement to dedicate and record a sidewalk easement. Following entry of the condemnation judgment, the City filed a complaint against Catania for breach of contract seeking damages for the refusal to dedicate the sidewalk easement. The court dismissed the City's lawsuit on summary judgment but denied Catania's request for attorney fees under the RCW 8.25.070(1)(b), CR 11 and RCW 4.84.185. On appeal, Catania characterizes the breach of contract lawsuit as a collateral attack of the condemnation judgment and argues he is entitled to attorney fees under the condemnation statute, RCW 8.25.070(1)(b). In addition, Catania challenges the trial court's refusal to impose CR 11 sanctions or award attorney fees for a frivolous lawsuit under RCW 4.84.185. Because the parties agreed that the City's breach of contract claim was unrelated and separate from the condemnation action, we conclude Catania is not entitled to attorney fees under RCW 8.25.070(1) (b). We also conclude the trial court did not abuse its discretion in refusing to award attorney fees under either CR 11 or RCW 4.84.185, and affirm.
FACTS
Catania owns the Seattle Restaurant Store, a retail and wholesale business in Shoreline. In 1997, Catania decided to relocate his business and purchased a former restaurant on Aurora Avenue. In 1998, Catania applied for a change of use of the property and building permits for construction and remodeling. As part of the permit application, Catania certified that "all applicable City of Shoreline codes and requirements for the work authorized by this permit, if issued, will be met." The City code development standard required an eight-foot sidewalk. As a condition of the permits, the City required Catania to dedicate the sidewalk as an easement. During a preconstruction meeting, the City addressed the sidewalk easement requirements with Catania's contractor. In January 2000, despite Catania's failure to dedicate the sidewalk easement, the City issued a Certificate of Occupancy for Catania's store.
In 2004, the City began work on a project to widen and improve Aurora Avenue along the 145th-165th Street corridor. On August 25, 2004, the City filed a condemnation action against the property owners on Aurora Avenue to acquire the land necessary for the street widening project. After the court entered an order of public use and necessity, Catania stipulated to the City's acquisition of the property needed for the project, leaving just compensation as the only issue for trial. Catania's appraiser valued the property at $119,000. On April 1, 2005, the City offered Catania $89,844 as just compensation for the property, subject to dedication of the sidewalk easement. On April 8, the City Planning Division sent a letter reiterating Catania's obligation to dedicate the sidewalk easement as required by the City code and the 1998 and 1999 building permits. In the letter, the City demanded that Catania sign and record the enclosed easement. Catania rejected the City's offer of $89,844 and refused to execute the easement.
Prior to the condemnation trial, the City designated witnesses and evidence related to Catania's refusal to dedicate the sidewalk easement. Catania filed a motion to exclude the City's witnesses and evidence concerning the claimed easement. Catania argued the City's easement claim was a separate and unrelated claim, which the court did not have jurisdiction to address in a condemnation proceeding. In response to Catania's motion to exclude, the City conceded that the claim against Catania concerning the easement should be resolved in a separate action. In reply, Catania accepted the City's concession. Based on Catania's position and the City's agreement to exclude all testimony and evidence relating to the requirements that Catania file a sidewalk easement, the court granted Catania's motion. At the conclusion of the condemnation trial, the court awarded Catania $111,113 as just compensation. The court also awarded Catania $42,381 in attorney fees and costs.
RCW 8.25.070 requires a condemnor to pay attorney fees if the judgment exceeds by ten percent the highest written settlement offer.
In January 2006, the City filed a lawsuit against Catania for breach of contract for refusing to comply with the requirements to dedicate a sidewalk easement. Catania filed a motion for summary judgment dismissal on several grounds, including statute of limitations, statute of frauds, and lack of mutual consent. The court concluded that the City code did not require Catania to dedicate a sidewalk easement and dismissed the lawsuit. The court awarded statutory attorney fees and costs but denied Catania's motion for attorney fees and costs under RCW 8.25.070(1)(b), CR 11, and RCW 4.84.185. In the order and judgment denying Catania's request for attorney fees, the court stated the basis for its decision.
This ruling is based upon both parties' agreement to sever this cause of action from the condemnation case, leaving solely a contract issue for the court to decide. Although the court decided against Shoreline, Rule 11 sanctions are without basis.
Catania appeals the trial court's decision denying his request for attorney fees under RCW 8.25.070(1)(b), CR 11 and RCW 4.84.185.
ANALYSIS
Catania argues the record does not support the trial court's conclusion that Catania and the City agreed "to sever this cause of action from the condemnation case" and the decision to deny attorney fees under RCW 8.25.070(1)(b).
Under CR 2(A) and RCW 2.44.010, an attorney's concession on behalf of a client is binding and will not be reviewed on appeal unless the party contesting it can show that the concession was the product of fraud or that the attorney overreached his authority. Nguyen v. Sacred Heart Med. Ctr., 97 Wn. App. 728, 735, 987 P.2d 634 (1999). But Catania does not argue and the record does not support the conclusion that the City's concession and agreement to sever the breach of contract lawsuit from the condemnation proceeding was the product of fraud or the result of overreaching by counsel. In Catania's Motion to Exclude Certain of the City's Witnesses and Exhibits, Catania argued the court's jurisdiction in the condemnation proceeding was limited and did not permit the court to consider evidence of the City's breach of contract claim. In response, the City agreed with Catania's position and conceded that the breach of contract claim was "best handled in a separate action." In reply, Catania quoted the City's concession in the City's response and stated, "[t]he Catanias agree." The trial court's determination that the parties agreed to sever the City's contract claim is supported by the record.
In the alternative, by characterizing the City's breach of contract lawsuit as a collateral attack of the condemnation judgment, Catania claims the court erred in refusing to award attorney fees under the condemnation statute, RCW 8.25.070(1)(b).
The Catanias also claim that the City violated RAP 10.7(1) by improperly revising its Respondent's Brief on appeal. Because none of the City's changes were substantive, we disagree.
Washington follows the American rule in awarding attorney fees. Under the American rule, "?a court has no power to award attorney fees as a cost of litigation in the absence of contract, statute, or recognized ground of equity providing for fee recovery.'" City of Seattle v. McCoy, 112 Wn. App. 26, 30, 48 P.3d 993 (2002) (quoting Dayton v. Farmers Ins. Group, 124 Wn.2d 277, 280, 876 P.2d 896 (1994)). Under RCW 8.25.070(1)(b), a court must award a condemnee reasonable attorney fees and reasonable expert witness fees if the compensation amount after trial exceeds by ten percent the highest written offer made to the condemnee in settlement prior to trial. The court has no discretion about whether to award attorney fees under RCW 8.25.070(1)(b). State v. Roth, 78 Wn.2d 711, 479 P.2d 55 (1971).
Catania relies on a 1918 Iowa case, Waterloo, Cedar Falls Northern Railway Co. v. Burrell, 184 Iowa 689, 169 N.W. 53 (1918), to argue that the City's breach of contract lawsuit was a collateral attack on the condemnation judgment. In Waterloo, the Waterloo, Cedar Falls § Northern Railway Company (the Railroad) planned to build a new rail line between Waterloo and Cedar Rapids. In exchange for the Railroad's agreement to build the rail line on his property, Frank Burrell offered to give the railroad a 100 foot right of way across his land. The railroad agreed to Burrell's proposal and located the rail line on his property. When Burrell refused to dedicate the right of way, the railroad filed a condemnation action. The jury awarded Burrell just compensation for the right of way. For the first time on appeal, the Railroad argued that, based on the agreement with Burrell, it was entitled to the right of way without paying just compensation. Burrell v. Waterloo, Cedar Falls § Northern Railway Co., 173 Iowa 441, 155 N.W. 809 (1916). After dismissal of the appeal, the Railroad filed a lawsuit against Burrell for breach of contract, arguing that the payment for just compensation in the condemnation proceeding "was wrongfully extracted." Waterloo, 184 Iowa at 692. The court held that because the breach of contract claim was "wholly inconsistent" with the Railroad's position in the condemnation action, the Railroad waived any remedy for breach of contract by pursuing the condemnation and was estopped from asserting the contract claim.
Contrary to Catania's assertion otherwise, the Railroad did not assert breach of contract until after it appealed the jury's just compensation award. Waterloo, 184 Iowa at 691.
Waterloo is distinguishable and does not support Catania's argument that the trial court erred in denying his request for attorney fees under the condemnation statute. Here, unlike in Waterloo, the City did not take an inconsistent position by filing the breach of contract claim and first raised the breach of contract claim against Catania in the condemnation action. The City agreed with Catania's position that the breach of contract claim was unrelated and separate from the condemnation action and conceded the breach of contract claim was "best handled in a separate action." On this record, we conclude the City's lawsuit for breach of contract was not a collateral attack on the condemnation judgment entitling Catania to attorney fees under RCW 8.25.070(1)(b).
Catania also cites Eilers Music House v. Douglass, et al., 90 Wash. 683, 156 P. 937 (1916), Klein v. Zeeve, 199 Wash. 644, 92 P.2d 877 (1939), and The City of Snohomish v. Joslin, 9 Wn. App. 495, 513 P.2d 293 (1973), in support of the argument that he is entitled to attorney fees and costs under RCW 8.25.070(1)(b). In both Eilers and Klein, the court held the plaintiff was collaterally estopped from repossessing goods purchased on credit, while at the same time suing for the price of the goods. But here, unlike in Eilers and Klein, the City did not attempt to repossess property while suing for damages.
In Joslin, the court in the abatement action decided the property owner was entitled to attorney fees and costs under the condemnation statute because the property owner was forced to initiate a legal action asserting his property rights when the city acquired title to the property through adverse possession rather than condemnation. Joslin, 9 Wn. App. at 498. Joslin is factually distinguishable. Here, unlike in Joslin, the City acquired title through a condemnation action and Catania was not forced to initiate a lawsuit to assert his property rights.
We also conclude that the trial court did not abuse its discretion in refusing to impose CR 11 sanctions or award attorney fees for a frivolous lawsuit under RCW 4.84.185. CR 11 sanctions are warranted if an action (1) is not well grounded in fact, (2) is not warranted by existing law, and (3) the attorney signing the pleading has failed to conduct reasonable inquiry into the factual or legal basis of the action. Bryant v. Joseph Tree, Inc., 119 Wn. 2d 210, 220, 829 P.2d 1099 (1992). "Attorney fees under either CR 11 or RCW 4.84.185 are discretionary with the trial judge." Skimming v. Boxer, 119 Wn. App. 748, 754, 82 P.3d 707 (2004). The decision to award attorney fees will not be disturbed absent a clear abuse of discretion. Fluke Capital § Mgmt. Servs. Co. v. Richmond, 106 Wn.2d 614, 625, 724 P.2d 356 (1986). Under RCW 4.84.185 a court may require a party to pay the prevailing party reasonable expenses, including attorney fees incurred in a frivolous action. RCW 4.84.185. A lawsuit is frivolous when it cannot be supported by any rational argument on the law or facts. Daubner v. Mills, 61 Wn. App. 678, 684, 811 P.2d 981 (1991). But the fact that the complaining party ultimately does not prevail is not dispositive. Roeber v. Dowty Aero., 116 Wn. App. 127, 142, 64 P.3d 691 (2003).
Even though the City's breach of contract lawsuit was dismissed on summary judgment, the record supports the trial court's conclusion that the lawsuit was well grounded in fact and warranted by existing law. There is no dispute that in a part of his permit application Catania agreed to comply with the City Code. Nor is there any dispute that Catania was aware of the requirement to dedicate a sidewalk easement. Below, the City argued that under the mandatory language of the Code, Catania had an obligation to dedicate a sidewalk easement. The City relied on the code provision that provides in pertinent part:
B. The following development standards shall apply to uses locating in the Aurora Avenue corridor redevelopment overlay district:
. . . .
9. New development should provide an eight-foot sidewalk
. . . along Aurora Avenue.
Below, the City argued that the use of "shall" in section B created a requirement that new developers must provide a sidewalk easement. While the trial court rejected the City's statutory argument, we conclude the court's decision that the argument was well grounded in fact and warranted by existing law was not an abuse of discretion. Roeber, 116 Wn. App. at 142.
We affirm the court's decision to deny Catania's motion for attorney fees and costs under RCW 8.25.070(1)(b), CR 11 sanctions, or attorney fees for a frivolous lawsuit under RCW 4.84.185.