Opinion
No. 32600-1-II.
Filed: April 18, 2006.
Appeal from Superior Court of Pierce County. Docket No: 04-2-11205-8. Judgment or order under review. Date filed: 10/22/2004. Judge signing: Hon. John A McCarthy.
Counsel for Appellant(s), Steven C. Andersen, Bullivant Houser Bailey PC, 805 Broadway St Ste 400, Vancouver, WA 98660-3310.
Deborah Lynn Carstens, Bullivant Houser Bailey PC, 1601 5th Ave Ste 2300, Seattle, WA 98101-1618.
Jerret E. Sale, Bullivant Houser Bailey PC, 1601 5th Ave Ste 2300, Seattle, WA 98101-1618.
Counsel for Respondent(s), Thomas L. Dickson, Dickson Maher Ingels LLP, 1401 Wells Fargo Plaza, 1201 Pacific Ave, Tacoma, WA 98402-4301.
Casey R. Ingels, Maher Ingels Shakotko Christe, 1015 Pacific Ave Ste 300, Tacoma, WA 98402-4403.
Kevin Terry Steinacker, Dickson Steinacker LLP, 1401 Wells Fargo Plaza, 1201 Pacific Ave, Tacoma, WA 98402-4322.
UNPUBLISHED OPINION
Western States Paving Co. (Western) sued Pease Sons, Inc. (Pease) for breach of a subcontract to pave Washington State University's (WSU) new campus in Vancouver, Washington. Pease moved to dismiss the suit under CR 12(b)(6) and requested sanctions and attorney fees under CR 11. Pease argued that because the statute of limitations had commenced on June 18, 2004, the breach of contract suit was untimely. The trial court treated the motion as one for summary judgment and entered an order dismissing all of Western's claims with prejudice. It also awarded Pease $14,124.25 in attorney fees and legal costs. We affirm the trial court's order dismissing Western's claims, but we reverse and remand the award of attorney fees for entry of findings of fact.
FACTS
In July 1994, Pease contracted with WSU to construct its Vancouver campus. In August of that same year, Pease subcontracted with Western for the project's paving services.
The subcontract specified the paving materials to be used but allowed Pease to issue change orders for upgraded materials. Section 7A of the subcontract addressed payment for change orders as follows: '[N]o payment shall be due Subcontractor because of changed work unless and until Contractor has received such payment from Owner for changed work.' 1 Clerk's Papers (CP) at 53. Provisions like this are generally called 'pay if paid' clauses. The Pease/Western contract also contained a standard, alternative dispute resolution clause, requiring mandatory arbitration of disagreements arising under the contract and providing payment of the prevailing party's attorney fees and costs.
The attorney fee provision states:
In the event that arbitration and/or litigation is instituted to enforce or contest the provisions of this subcontract or adjudicate any question arising under this subcontract, the prevailing party shall be entitled to its attorney fees and all costs of such arbitration and/or litigation, including, without limitation, consultant and expert witness fees, expenses, in addition to costs otherwise taxable by law.
1 CP at 54.
Western completed all the work under the contract on or about July 31, 1996. Included were two requested upgrades at an additional cost of $23,933.
A contract dispute arose between WSU and Pease that settled for $1.7 million dollars around March 19, 1998. According to the WSU/Pease agreement, the settlement amount represented 'the total sum payable and includes without limitation within that sum sales tax and all other taxes, markups, contract adjustments or liabilities, and claims for costs, services, consultants and attorneys fees and interest.' 1 CP at 87. The WSU/Pease agreement provided that Pease would be paid the agreed sum by the earlier of July 20, 1998, or 20 days from when settlement funds became available to WSU or interest would accrue.
Western asserts the date was March 23, 1998, but this date has no support in the record.
On June 18, 1998, Pease wrote Western a check for $55,556.90. Pease included a 'full final payment' notation on the check. 1 CP at 93. Because the payment did not cover the work order changes, Western did not cash the check. Over a year later, on October 21, 1999, Western wrote Pease a letter stating:
Please find enclosed the retainage check issued on June 18th, 1998 for [the WSU project]. Since we believe that we are still owed additional money on this project for the upgrade rock, the release stamped on the back of the check prohibited us from depositing it. Upon receipt of this letter, please [contact our vice president] to reconcile full and final payment on this project.
1 CP at 95.
On November 30, 1999, Pease wrote Western, stating:
We are returning to you, the retention check in the amount of $55,556.90. This check represents final payment for W.S.U. Vancouver project.
As discussed, the University did not allow any of the claims for upgraded rock. The pursuit of the claim was stymied by the University lawyers' argument that it had not been submitted in a complete and timely fashion. [Pease] reached settlement without collection of monies for [Western] upgraded rock.
1 CP at 85.
And in a letter dated March 30, 2001, and stamped received on April 2, 2001, Pease wrote to Western stating: 'Please find enclosed a check for $55,556.90. This check represents full and final payment for all retention-related claims on the . . . project.' 1 CP at 97.
On May 23, 2003, Western demanded that Pease submit the issue of payment due for upgrades to arbitration. And on July 13, 2004, Western sued Pease seeking damages for breach of contract, breach of the implied covenant of good faith and fair dealing, and, in the alternative, demanded that the matter be submitted to arbitration or other dispute resolution process in Clark County Superior Court. Clark County Superior Court transferred venue to Pierce County on August 27, 2004.
On September 24, 2004, Pease filed its motion to dismiss, asserting that Western's claims were time barred and that the subcontract required mediation or arbitration of contractual disputes.
The trial court granted Pease's dismissal motion stating: I think that the arbitration resolution process lives or dies on whether or not it was sought within the appropriate statute of limitations. So I think the issue for me is, when it was sought, was the statute already expired by virtue of the language of the contract of 1994?
And I think the issue is one of the commencement of the running of the statute of limitations and whether the dispute process that was being undertaken with Washington State University resulted in a reasonable time afterward as being 1999 or 1996, as the defendant has asserted.
And I believe that the defendant is correct, that the reasonable length of time afterwards to seek the full amount under the subcontract does not require a full six years after rejection or after final decision by Washington State University.
So I am in agreement with the defendant that the statute of limitations has expired, and therefore, the motion to dismiss should be granted.
Report of Proceedings (Oct. 8, 2004) at 17-18.
On October 22, 2004, the trial court found the statute of limitation barred Western's lawsuit. It dismissed Western's claims with prejudice and awarded Pease $14,124.25 in attorney fees. Western appeals.
ANALYSIS Standard of Review
In ruling on Pease's motion to dismiss, the trial court considered matters outside the pleadings, thus converting the CR 12(b)(6) motion into one for summary judgment. CR 12(b); Stevens v. Murphy, 69 Wn.2d 939, 943, 421 P.2d 668 (1966), overruled in part on other grounds by Merrick v. Sutterlin, 93 Wn.2d 411, 610 P.2d 891 (1980). Accordingly, we review the matter de novo as a summary judgment under CR 56. Stevens, 69 Wn.2d at 943 . Summary judgment is appropriate when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. CR 56(c); Owen v. Burlington N. Santa Fe R.R. Co., 153 Wn.2d 780, 787, 108 P.3d 1220 (2005). A motion for summary judgment accepts all facts and reasonable inferences in the light most favorable to the nonmoving party. Owen, 153 Wn.2d at 787 .
The essential question here is when the statute of limitations commenced. In claims for breach of contract, the statute of limitations commences at the time of breach or, under the discovery rule, 'when a party knows or, in the exercise of due diligence should know, of the other party's breach.' Wm. Dickson Co. v. Pierce County, 128 Wn. App. 488, 495, 116 P.3d 409 (2005) (quoting Architechtonics Constr. Mgmt., Inc. v. Khorram, 111 Wn. App. 725, 737, 45 P.3d 1142 (2002) (discovery rule applies to contract claims), review denied, 148 Wn.2d 1005 (2003))
Western makes two alternative arguments to support its claim that its July 13, 2004 breach of contract suit against Pease was timely. First, Western maintains that the applicable six-year statute of limitations commenced November 30, 1999, because this is the date that Pease informed Western by letter that it settled its claim with WSU without being paid for the change orders and that it was not going to pay Western for them. Western asserts that it is possible this date represents its first notice that Pease did not intend to perform its obligations under the subcontract and that Western, in the exercise of due diligence, could not have discovered this information before. Alternatively, Western maintains that the statute of limitation commenced on July 20, 1998, because under the terms of the contract's 'pay if paid' clause, Western is not entitled to payment until WSU paid Pease. Because the WSU/Pease settlement permits payment to be made to Pease as late as July 20, 1998, and because the complaint does not allege when Pease received the settlement payment from WSU, Western asserts it is possible that Pease did not receive payment until this date. Western also argues that if the 'pay if paid' clause operates to require that payment be made a reasonable time after the work was completed, a reasonable time could include the time it actually took WSU to pay Pease.
Citing Gunnier v. Yakima Heart Center, Inc., 134 Wn.2d 854, 858, 953 P.2d 1162 (1998), North Coast Enterprises, Inc. v. Factoria Partnership, 94 Wn. App. 855, 859, 974 P.2d 1257, review denied, 138 Wn.2d 1022 (1999), and Amelco Electric v. Donald M. Drake Co., 20 Wn. App. 899, 583 P.2d 648 (1978), review denied, 91 Wn.2d 1020 (1979), Pease asserts that requests for payments on change orders must be made within a reasonable time and that the statute of limitation commenced when Western acquired the right to enforce a cause of action and seek relief in the courts. Pease also contends that the statute of limitation commenced after Western completed the work or, at the latest, when it tendered a check dated June 18, 1998, to Western that did not include payment for the change orders and contained a 'final payment' notation.
Western does not dispute that it knew from the June 18, 1998 check that the 'final payment' Pease tendered did not include payment of the change order upgrades. But it claims that November 30, 1999, or alternatively July 20, 1998, are the dates that trigger the statute of limitations because these dates are the dates when it first knew that Pease was not going to pay for change orders.
Moreover, Western asserts that '[n]othing on the check alerts Western States to any intention of Pease . . . not to pay the change-order work.' Reply Br. of Appellant at 12. But this assertion runs contrary to the facts. The check that was incorporated by reference into Western's complaint states in no uncertain terms that cashing the check constitutes full and final payment for the Vancouver campus project. Thus, this check clearly alerted Western to Pease's intention to exclude work order changes from final payment. Although what Western knew, or with due diligence should have known, is normally a question of disputed fact, where reasonable minds could not differ, questions of fact may be decided as a matter of law. See Goodman v. Goodman, 128 Wn.2d 366, 373, 907 P.2d 290 (1995) (ordinarily in determining the legal question of whether the statute of limitations applies to bar a suit, the underlying factual questions are questions of fact for the jury; but where the facts are susceptible of but one reasonable interpretation, they may be decided as a matter of law); Gillespie v. Seattle-First Nat'l Bank, 70 Wn. App. 150, 170, 855 P.2d 680 (1993), review denied, 123 Wn.2d 1012 (1994). Here, the facts are susceptible to only one interpretation.
Western also argues that the date on the check, June 18, 1998, shows when the check was written but not when it was mailed or received. Western asserts that since the only evidence in the record is that a check was written on June 18, 1998, and Western's letter refusing the check is dated October 21, 1999, Pease could have mailed the check sometime between June 18, 1998 and October 21, 1999. Thus, Western argues that when the check was actually mailed is a disputed question of fact requiring a trial. We disagree. A party opposing summary judgment cannot rely on 'argumentative assertions that unresolved factual issues remain.' Seven Gables Corp. v. MGM/UA Entm't Co., 106 Wn.2d 1, 13, 721 P.2d 1 (1986).
Here, Western does not assert that it did not timely receive the June 18, 1998 check, only that it is theoretically possible that it did not do so. Its argument that, given the date of its October 21, 1999 letter returning the check to Pease, the trial court was required to assume that the check from Pease was not timely mailed to Western is wholly speculative and unfounded on this record. Seven Gables Corp., 106 Wn.2d at 13 (the nonmoving party may not rely on speculation, argumentative assertions that unresolved factual issues remain, or on having its affidavits considered at face value). The trial court properly ruled that the statute of limitations commenced on June 18, 2004, and that Western untimely filed its lawsuit on July 13, 2004.
Because we find Western's claim untimely, we do not address the validity of the 'pay if paid' clause. See Amelco, 20 Wn. App. 899 .
Attorney Fees
The Western/Pease contract provides that the prevailing party shall recover reasonable attorney fees and costs. The trial court accordingly awarded Pease $14,124.25 in attorney fees. But it did not enter findings of fact supporting the award. We therefore remand to the trial court to enter findings necessary to support its attorney fee award. Mahler v. Szucs, 135 Wn.2d 398, 435, 957 P.2d 632, 966 P.2d 305 (1998) (remand necessary when the record contains inadequate findings of fact and conclusions of law to support attorney fees award).
The contract reads:
In the event that arbitration and/or litigation is instituted to enforce or contest the provisions of this subcontract or adjudicate any question arising under this subcontract, the prevailing party shall be entitled to its attorney fees and all costs of such arbitration and/or litigation, including, without limitation, consultant and expert witness fees, expenses, in addition to costs otherwise taxable by law.
1 CP at 54.
Pease also requests attorney fees on appeal. We award Pease such fees subject to its compliance with RAP 18.1(d).
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. and HUNT, J., concur.