Opinion
No. 55651-7-I.
May 8, 2006.
Appeal from a judgment of the Superior Court for San Juan County, No. 02-2-05162-7, Vickie I. Churchill, J., entered April 19, 2004.
Counsel for Appellant(s), Philip James Buri, Buri Funston PLLC, 1601 F St, Bellingham, WA 98225-3011.
Mark Aaron Kaiman, Lustick Law Firm, 1313 E Maple St Ste 221, Bellingham, WA 98225-5708.
Counsel for Respondent(s), K. Garl Long, Attorney At Law, 1215 S 2nd St Ste a, Mount Vernon, WA 98273-4801.
Reversed by unpublished per curiam opinion.
Evidence that Shepler Construction, Inc., performed unprofessional work and used incorrect methods in building a house for Gary Leonard and Susan Kiraly-Leonard created an issue of material fact about whether Shepler met its contractual obligation to perform in a workmanlike manner. We reverse the trial court's order of summary judgment dismissing the Leonard's counterclaim for Shepler's breach of contract and remand for trial.
FACTS
The Leonards contracted with Shepler to build a custom home. The fixed price contract contained a dispute resolution mechanism and a provision for Shepler to remedy nonconforming work before final payment. After construction began, disputes between the Leonards and Shepler's employees led to difficulties between the parties. Progress payments eventually stopped, work ceased, and the Leonards notified Shepler through their lawyer that its employees were not allowed on the site.
Shepler filed a mechanic's lien. When attempts to invoke the contract's dispute resolution provisions went unanswered, Shepler filed suit to enforce the lien and obtain damages for breach of contract. The Leonards filed counterclaims including a construction defect claim alleging Shepler breached the contract by failing to complete the work in a workmanlike manner. Meanwhile, the Leonards hired another contractor, Sliger Construction, to finish construction of the home.
Shepler moved for summary judgment on the lien and the Leonards' construction defect counterclaim. In support of the motion, Shepler relied on the deposition of Ken Sliger of Sliger Construction. According to Sliger, Shepler's work was not shoddy and the only real problem was it was incomplete. In opposition, the Leonards submitted the declarations of the finish carpenter, Gerald Green, the siding installer, Kevin Taylor, and heating contractor Dick Wilson. These declarations contained several criticisms of Shepler's work, including specific points regarding interior walls, vinyl siding, house wrap under the siding, the chimney chase and the heating system. In reply, Shepler provided the declarations of Michael Drake, who installed the heating system, Jay Shepler, Shepler's president and additional excerpts from the Sliger deposition, listing the areas Shepler and its subcontractors would have addressed had they completed the work. The court granted Shepler's motion for summary judgment.
After summary judgment was granted, the Leonards obtained new counsel and filed a declaration by construction consultant Richard Russell in support of a motion to reconsider. In Russell's opinion the construction was defective for several reasons in addition to those described in Leonards' response to the original motion. The trial court denied the motion, concluding the Leonards had not shown good cause for reconsideration under CR 59.
Though the parties had previously stipulated discovery was complete and the matter ready for trial, the Leonards sought to add Russell as a trial witness. The court denied the motion.
Jay and Jeff Shepler and Susan Leonard testified at trial. The court ruled the lien was valid and the Leonards breached the contract. The court concluded, however, that some of Shepler's change orders claims were not supported, and rejected Shepler's request for additional damages because the Leonards did not comply with the contract's dispute resolution provision. The court entered judgment in favor of Shepler and awarded Shepler attorney fees under the contract.
The Leonards appeal, challenging the trial court's summary judgment order, denial of their motion for reconsideration, and the order prohibiting Russell from testifying at trial. Shepler cross-appeals, assigning error to the trial court's decision not to award additional damages.
ANALYSIS
The Leonards' primary argument is the trial court erred in granting summary judgment dismissing their counterclaim. Summary judgment is appropriate if the pleadings, affidavits, depositions, answers to interrogatories, and admissions on file demonstrate the absence of genuine issues of material fact, and that the moving party is entitled to judgment as a matter of law. CR 56(c). The court must consider the facts submitted and all reasonable inferences from those facts in the light most favorable to the nonmoving party. Denaxas v. Sandstone Court of Bellevue, L.L.C., 148 Wn.2d 654, 662, 63 P.3d 125 (2003). Review of summary judgment is de novo. Denaxas, 148 Wn.2d at 662.
At issue is whether Shepler's work was defective within the meaning of the contract, which required the work to be 'substantially completed in a workmanlike manner according to standard practices of the area and in compliance with all applicable state and local building, electrical, and mechanical codes.' The Leonards contend the declarations submitted in opposition to summary judgment create genuine issues of material fact precluding summary judgment on their counterclaim. We agree.
Repeating an argument it made in the trial court, Shepler cites Atherton Condominium Apartment-Owners Ass'n Bd. of Directors v. Blume Dev. Co., 115 Wn.2d 506, 522, 799 P.2d 250 (1990) for the proposition that a homebuyer is not entitled to a perfect house. Atherton is not helpful because it involved the parameters of the implied warranty of habitability, not an express contractual provision for workmanlike construction of the type in this case.
While the Leonards have attached to their brief a copy of Russell's declaration submitted to the trial court in support of the motion to reconsider summary judgment, that declaration is not relevant to our review of the order granting summary judgment and we do not consider it.
Shepler correctly points out that none of the Leonards' three responsive declarations expressly describes its work as insufficient under the precise terms of the contract. But viewed in the light most favorable to the Leonards, the declarations nonetheless support the reasonable inference that Shepler failed to meet the agreed to standard in the contract. For example, Green stated that among the reasons he found Shepler's work 'very unprofessional' was that some of the walls were visibly out of plumb, one to the extent it 'did not even come close to a right angle', which resulted in a situation where interior doors could not be properly installed. Similarly, according to Taylor, house wrap was not used where it should have been, which created a substantial risk of dry rot in the material under the siding. Drawing all reasonable inferences in favor of the Leonards, the declarations support the conclusion that Shepler's work failed to meet the contractual standard of being 'workmanlike according to standard practices of the area.'
Shepler also contends the responsive declarations failed to rebut Sliger's opinion that the work was merely incomplete. This is arguably true of some of the listed complaints. But the evidence supports the reasonable inference that Shepler would have done no further work to correct the problem of out-of-plumb walls because those walls were finished and Jay Shepler regarded the issue as simply a question of adjusting finish molding. Likewise there is a reasonable inference that Shepler would not have installed additional house wrap. Jay Shepler believed it unnecessary to use on the lower story because of the foam and concrete construction used on the lower story.
In a statement of supplemental authority, Shepler has suggested an alternative basis for affirming the trial court under RCW 64.50.020 as a result of the holding in Lakemont Ridge Homeowners Ass'n v. Lakemont Ridge L.P., 125 Wn. App. 71, 104 P.3d 22 (2005). That case, however, has now been reversed by the Supreme Court in a decision adverse to Shepler's position. See Lakemont Ridge Homeowners Ass'n v. Lakemont Ridge Ltd. P'ship, 2006 Wash. App. Lexis 271 (Wash. Apr. 6, 2006).
Viewing the record in the light most favorable to the Leonards, there is a material issue of fact as to whether Shepler breached its contractual obligation to perform in a workmanlike manner. We therefore vacate the judgment, including the attorney fees award, and remand the case for trial. Both parties have requested reasonable attorney fees under the contract. The determination of who is the prevailing party under the contract, however, depends on the ultimate outcome of the trial. Stuart v. Am. States Ins. Co., 134 Wn.2d 814, 824, 953 P.2d 462 (1998) (attorney fees abide remand outcome); Schumacher Painting Co. v. First Union Mgmt., Inc., 69 Wn. App. 693, 702, 850 P.2d 1361 (1993) (prevailing party is determined by the outcome at the conclusion of the entire case). The award of fees and expenses shall be determined by the trial court at the conclusion of the trial.
Because we remand for trial, it is not necessary to address the Shepler's counterclaim for damages resulting from the Leonard's failure to abide by the contract's dispute resolution provisions. In light of the additional evidence that will be provided upon remand, the trial court's assessment of breach and damages by the parties may change. Any opinion this court could offer now would only be advisory.
Reversed and remanded for trial.
SCHINDLER, DWYER and COLEMAN, JJ.