Opinion
No. 60164-4-I.
March 2, 2009.
Appeal from a judgment of the Superior Court for Whatcom County, No. 02-2-02250-9, Charles R. Snyder, J., entered June 12, 2007.
Affirmed by unpublished opinion per Becker, J., concurred in by Schindler, C.J., and Appelwick, J.
The owners of six condominium units appeal from a judgment entered after a bench trial. The trial court decided that the condominium included only the land upon which their units were built, and that the declarant was free to sell the neighboring land on which he had originally intended to develop a second phase of the condominiums. We conclude the trial court correctly interpreted the condominium documents as requiring an amendment to the declaration to include the second phase land; had equitable power to reform the documents to show a boundary line separating the condo units from the other property; and properly denied the declarant's request for attorney fees.
Respondent Nick Mantadakis, the declarant, purchased a block of land in Blaine in 1991. On the land stood an old house and a two-building motel. Mantadakis planned to develop the land into condominiums. Initially he developed phase 1. This included six condo units where the old house had been. After the phase 1 units were completed in 1992, he filed and recorded a declaration of condominium and a survey map with plans. The survey map depicted the phase 1 units and the "future phase" to be developed to the south, where the motel was located. The declaration stated that the condominium property was described on "Schedule A attached hereto." Including a legal description of the real property included in the condominium is one of the declarant's obligations under the Condominium Act. RCW 64.34.216(1)(b). But Mantadakis failed to attach "Schedule A".
Mantadakis decided not to develop the future phase units on the motel property. In 2000, he sold the entire block of land, less the six condo units, to respondent Gary Gogal. He did not make any amendments to the declaration before making the sale. A dispute eventually developed between Gogal and the condo owners. The condo owners claimed the motel property purchased by Gogal was actually part of the condo property. They sued to quiet title. Gogal defended the quiet title action and brought a third party claim against Mantadakis, arguing in the alternative that if the condo owners were found to hold title to the motel property, then Mantadakis had breached the warranty of title. All three parties participated in a bench trial, with Mantadakis and Gogal both ranged against the condo owners' claim of title.
The trial court quieted title to the motel property in Gogal and established a common boundary between the motel and condo units by reforming the declaration and survey map. The condo owners appeal that decision. Having quieted title in Gogal, the trial court had no reason to reach Gogal's breach of warranty claim and therefore dismissed it. Mantadakis moved for attorney's fees and costs against Gogal. The trial court denied his request. Mantadakis appeals the denial of fees.
INCLUSION OF MOTEL
The condo owners assert that the motel property has been part of the condominium since the condo was established in 1992. They contend the trial court erred when it concluded that an amendment to the declaration would have been necessary to add the motel to the condo property.
A condominium is created under the Condominium Act "only by recording a declaration executed by the owner of the interest subject to this chapter in the same manner as a deed and by simultaneously recording a survey map and plans pursuant to RCW 64.34.232." RCW 64.34.200(1). To protect condominium purchasers, a declarant must also prepare a public offering statement. RCW 64.34.405.
Interpretation of the declaration, the survey map, and the public offering statement is a question of law if it does not depend on a choice among reasonable inferences to be drawn from extrinsic evidence.
A question of interpretation of an integrated agreement is to be determined by the trier of fact if it depends on the credibility of extrinsic evidence or on a choice among reasonable inferences to be drawn from extrinsic evidence. Otherwise a question of interpretation of an integrated agreement is to be determined as a question of law.
Berg v. Hudesman, 115 Wn.2d 657, 667-68, 801 P.2d 222 (1990) (holding that extrinsic evidence is admissible as to the entire circumstances under which the contract was made, as an aid in ascertaining the parties' intent and adopting the Restatement (Second) of Contracts §§ 212 and 214(c) (1981)).
The condo owners assign error to numerous findings of fact entered by the trial court, primarily to argue that they should have been labeled as conclusions of law. Indeed, their case on appeal is primarily legal, not factual. They contend that when the three condominium documents are read in concert effect is given to all their terms, and unavoidable inferences are drawn from the extrinsic evidence, it is plain that the motel property was intended to be part of the condominium from the beginning. They contend that the motel property must still be a common area of the condominium because it was never withdrawn by amendment to the declaration. Accordingly, they contend the court erred when it found that an amendment to the declaration was necessary to add the motel property to the condominium. We understand the trial court's determination on this point as a conclusion of law, because the court interpreted the condominium documents and did not have to resolve the credibility of extrinsic evidence in order to do so. To the extent the trial court labeled this determination as a finding of fact, we will review it as a conclusion of law. Robblee v. Robblee, 68 Wn. App. 69, 74 n. 1, 841 P.2d 1289 (1992).
Findings of fact to which no error has been assigned are verities on appeal. Chandler v. State, Office of Ins. Com'r, 141 Wn. App. 639, 648, 173 P.3d 275 (2007). The unchallenged findings in this case establish the following facts. Mantadakis acquired title to the property in February 1991. The property included lots 7 through 12 of Rosbrugh's Addition and lots 29 through 31 of Kingsley's Addition. These long, rectangular lots are contiguous and comprise a block of land approximately 225 feet by 137 feet. They are laid out from north to south in this order: 12, 11, 10, 9, 8, 7, 31, 30, 29.
During 1991 and early 1992 Mantadakis engaged the services of an architect, a surveyor and attorney to assist him in developing the property into a condominium. In April 1991 the surveyor, George Raper, prepared a boundary and topographical survey map of the property. His survey map showed a two-story house situated on lots 11 and 12 and a two-building, nine-unit motel located on lot 7 of Rosbrugh's Addition and lots 29, 30, and 31 of Kingsley's Addition. This survey did not establish the precise dimensions of each individual lot relative to the exterior boundary, nor did it show any of the subsequent improvements that Mantadakis was planning to construct on the property.
Mantadakis conveyed a one-third interest in the property to Dimitrios Rozakis in September 1991. Although Rozakis remained on the title to the property, he did not actively participate in the partnership, did not make the required cash contribution to the partnership, and authorized Mantadakis under a power of attorney to execute all documents on his behalf.
The "Declaration and Covenants, Conditions, Restrictions and Reservations for Garden Townhouse Condominiums" was recorded with the Whatcom County Auditor in June 1992. A survey map and plans for the Garden Townhouse Condominium, phase 1 was also recorded with the Whatcom County Auditor in June 1992. At or about the same time, a public offering statement was prepared for Mantadakis. Mantadakis signed each of these documents as the declarant.
Article 2 of the declaration, titled "Description of Land," contained this statement: "the land on which the Buildings and improvements provided for in this Declaration are located is described in Schedule A attached hereto." No Schedule A was ever recorded with the Whatcom County Auditor and no copy of a Schedule A has ever been produced.
The legal description of condominium included on sheet 1 of the survey map describes the property as including all nine lots: 7 through 12 of Rosbrugh's Addition and lots 29, 30 and 31 of Kingsley's Addition. Sheet 2 of the survey map and plans depicts phase 1 as six adjoining units, each with a detached garage in back, situated on the five northern lots — lots 12, 11, 10, 9 and 8. The southernmost four lots — 7, 31, 30 and 29 — are shown as the site of a "future phase." There is no demarcation line on the survey map between the phase 1 units and the "future phase." Five potential condominium units are depicted in the "future phase" portion of the survey map. These units are depicted using dotted lines, intended to show that the units did not actually exist at that time. The survey map does not show the location of the motel buildings that existed in the future phase portion of the property at the time it was recorded. Two separate motel buildings have been located on the area shown as "future phase" for 50 years or more. The buildings have been, and continue to be, operated as a motel or similar use.
Article 23 of the declaration spelled out the procedure to be employed in the event that Mantadakis, as the declarant, chose to add or withdraw any land from the condominium. According to the declaration, Mantadakis' right to add a subsequent phase by amendment would expire seven years after the initial declaration recording. Thus, Mantadakis' right to add any phases or land to phase 1 of the condominium expired on June 15, 1999.
When Mantadakis recorded the declaration in June 1992, the phase 1 condominium units were already completed. Mantadakis offered them for sale in the summer of 1992. The first unit did not sell until April 1994. The next sale did not occur until September 1996, with two sales following in January 1997 and one in June 1997. The final unit sold in August 1998. By August 1998, Mantadakis determined that the condominium development was a financial failure and that the market for the condominium units he at one time intended to develop on the "future phase" part of the property did not exist. Mantadakis did not exercise his right to add a subsequent phase or land to the condominium as provided in Article 23 before his right to add land expired on June 15, 1999.
In May 1999, Mantadakis and Rozakis dissolved their partnership and declared that the subsequent phase of the condominium would not be completed. Their agreement for dissolution was recorded in the Whatcom County Auditor's Office in October 1999. In July 1999, Ocean Developments — the entity started by Mantadakis and Rozakis — conveyed to Mantadakis lots 29 though 31 of Kingsley's First Addition and lots 7 though 12 of Rosbrugh's First Addition, except units 1 though 6 of the Garden Townhouse Condominiums.
In April 2000, Mantadakis agreed to sell and Gogal agreed to purchase lots 7 through 12 of Rosbrugh's Addition and 29 through 31 of Kingsley's Addition, except units 1 through 6 of the Garden Townhouse Condominium Phase I. Mantadakis conveyed the property to Gogal with a statutory warranty deed that was recorded with the Whatcom County Auditor's Office in July 2000.
In 2002 an issue arose between the condo owners and Gogal as to where the boundary was between the motel and the condos. The condo owners obtained a survey by Wilson Engineering showing that the motel stood partly on lot 7. Eventually, the owners filed this suit, claiming that the condominium actually included the entire property — not only lot 7, but also lots 31, 30 and 29. The trial court entered judgment quieting title in Gogal to the motel property — which included the three southernmost lots and part of lot 7. The court established the boundary separating the two properties based on its finding that Mantadakis, the common grantor, had intended the south wall of the condominium structure to serve as a boundary line. The court also found that the conduct of the condo owners showed they too had accepted the southern wall as the boundary line.
This appeal followed. The condo owners claim that the trial court's decision leaves them with a structure on a cramped lot that is illegal and nonconforming. They contend that it would be more just to deprive Gogal of his title to the motel property, because he would then be entitled to recover damages from Mantadakis, whose failure to attach a legal description to the declaration created the uncertainty. In their view, the evidence shows that Mantadakis included all nine lots in the condominium, and then sold Gogal a lot he did not own. Gogal and Mantadakis respond that the unchallenged findings and uncontroverted testimony show that Mantadakis never intended to declare the motel property as part of the condominium.
The Declaration
The condo owners claim the declaration, trial exhibit 8, shows that the motel property was intended to be part of the condominium. The declaration states that it "provides a description of: the land within all phases." It does not state that it provides a description of phase 1 land only. They say this means that when the declaration further refers to the survey map as depicting "a survey of the surface of the Phase 1 land," it means that all nine lots shown on the map constitute the phase 1 land. But this interpretation can be sustained only by reading the quoted language in isolation. The cited provision, section 23.1.1, begins with the statement that the condominium will be developed in more than one phase. The provisions regarding "phase 1" are said to be "effective immediately to establish Phase 1." "The provisions regarding subsequent phases shall not be effective to establish subsequent phases . . . as a Condominium under the Act until Declarant records an amendment to the Declaration (and an amendment to the Survey Map and Plans, if necessary) pursuant to subsection 23.1.2." Section 23.1 thus clearly contemplates the recording of an amendment to the declaration as a prerequisite before the "future phase" land depicted on the survey map is established as part of the condominium and subjected to the Condominium Act.
Section 23.1.2 requires an amendment to the declaration in order to establish the subsequent phase land and any improvements on it as a condominium:
23.1.2 For such subsequent phase following Phase 1, the Declarant shall execute and record an amendment to this Declaration stating that said subsequent phase (including the subsequent phase land, and all Apartments, Buildings and other improvements thereon) is established as a Condominium under the Act.
(Emphasis added.) This procedure for adding subsequent phase land is consistent with the statement in section 23.1.1 that an amendment to the declaration is required to add subsequent phases.
Concluding that the declaration required an amendment to add the motel property to the phase 1 units is also supported by the procedure set out in the declaration for payment of condominium assessments. Section 23.2 discusses the way that condominium percentages are established in relation to the phased development. It states that the percentages for owners of phase 1 units are calculated with relation to the total of the values for the apartments within phase 1 — not with relation to expenses associated with subsequent phases or the motel property. If additional phases were "made effective by the filing of the above-described Declaration Amendment by Declarant," the percentages for the phase 1 units were to be recalculated with relation to the total values of all apartments in all phases.
Section 23.5, labeled "Phased Amendment," provides that the declarant has authority to file an amendment with such information as is necessary "to establish a subsequent phase as a part of the Condominium development pursuant to the Act." Such an amendment was to be recorded when "the Buildings, Apartments and other improvements in said phase have been substantially completed" and "a sufficient number of Apartments within said phase have been pre-sold." As the trial court reasoned, this section means that without the recording of an amendment, any subsequent phase would not be part of the condominium.
Section 23.6 contains yet another reference to amendment as the mechanism for a subsequent phase: "At the time the amendment incorporating a subsequent phase into the Condominium is made," the existing apartment owners will not be adversely affected by any lien that might arise in connection with development of the subsequent phase land.
Section 23.7, labeled "Withdrawal of Subsequent Phases," provides the declarant with the right to "withdraw the land within uncompleted phases" by recording an amendment to the declaration:
If, despite good faith efforts of Declarant, and for reasons (including, but not limited to, financing availability, labor disputes, material shortages and acts of God) beyond the reasonable control of Declarant, all or any of the subsequent phases are not completed and the amendment(s) provided for in Section 23.5 is not recorded, then Declarant at any time may elect not to incorporate all or some of such subsequent phases into the subject Condominium project and elect not to record the amendments provided for in Section 23.5. To effectuate the foregoing, Declarant, upon its sole signature and without further consent of any of the other Owners being required, and as an attorney-in-fact for all Apartment Owners with an irrevocable power coupled with an interest, may file such amendment to this Declaration and to the Survey Map and Plans as is necessary to withdraw the land within uncompleted phases (and improvements constructed thereon) from the provisions of this Declaration and to relinquish Declarant's rights under this Article 23. In the event Declarant should exercise its rights under this Section 23.7 to withdraw the land within uncompleted phases (and improvements thereon), from the provisions of this Declaration, then: the phases in fact completed shall thereafter continue to constitute a complete, fully operational Condominium; land within uncompleted phases (and improvements thereon) may be used for any other lawful purpose in Declarant's discretion; and the easements provided for in Section 23.4 shall continue for the benefit of land within uncompleted phases and Declarant (and its heirs, successors and assigns) for the development and utilization of land within uncompleted phases.
(Emphasis added.) The trial court reasoned, we think correctly, that the "withdrawal" language in section 23.7 means that if the declarant "were to have filed an amendment to the condominium declaration to include these extra lots, and then changed their mind, and decided the market isn't going to support that, they could have withdrawn that prior to completion."
Report of Proceedings, March 21, 2007 at 11 (oral ruling).
The trial court concluded that under the terms of the declaration, lot 7 and lots 29-31 "did not become part of the condominium at the time of the recording of the Declaration, and could not become part of the condominium until added through an amendment to the Declaration and Survey Map and Plans." Conclusion of Law 2.8. This interpretation is consistent with and gives effect to all parts of the declaration. In contrast, adopting the condo owners' proposed interpretation would render the declaration internally inconsistent and would require ignoring the repeated references to the necessity of an amendment to add a subsequent phase.
Survey Map
The condo owners assert that the survey map and plans provide additional evidence that the motel is part of the condominium. They point to the "legal description of condominium" on sheet 1, which identifies three parcels (A, B, and C) that together make up the entire block of land. The "land herein described" is dedicated "for Condominium purposes . . . and to submit the property to the Act." They also emphasize the "big black line" on sheet 2 that surrounds the entire block of land, all nine lots. The condo owners point out that there is no line on the map purporting to delineate a boundary separating the condo from the motel property.
By statute, a survey map is supposed to use the label "MAY BE ADDED TO THE CONDOMINIUM" for any land that may be added, and the label "MAY BE WITHDRAWN FROM THE CONDOMINIUM" for any land that may be withdrawn. RCW 64.34.232(2)(c). The Garden Townhouses survey map, sheet 2, does not use either label, but it does use the labels "PHASE 1" and "FUTURE PHASE" to distinguish the five lots on which the existing units are located from the four lots to the south. The phase 1 units are indicated by solid black lines while the future phase units are "ghosted in" using dotted lines. The surveyor who prepared the map, George Raper, testified that the encircling black line "represents the boundary of the particular lots we were using to create the condominium survey." But he also testified that the "future phase" area was not a part of the phase 1 condominium project. Taken as a whole, his testimony is far from offering dispositive support for the inference the condo owners wish to draw from the "big black line." We conclude the survey map, even considering the black line encircling the entire property, does not compel a conclusion that the declarant intended to include the motel property in the condominium. It is equally consistent with a conclusion that the declarant had his entire property surveyed for purposes of submitting it to the condominium act in two distinct phases.
Report of Proceedings, February 27, 2007 at 85.
Report of Proceedings, February 27, 2007 at 109-10.
Public Offering Statement
The condo owners also point to the public offering statement. Among other things, the public offering statement sets forth the rights reserved to the declarant. Unlike the declaration, the public offering statement does not state that the declarant can add land to the condominium, but it does state that the declarant can withdraw from the condominium real property proposed as the site for phase 2. It does so by reserving the following development rights for the declarant:
(a) To create additional units, common elements or limited common Elements within the real property included in the Condominium as more particularly described in the architectural drawings, survey maps and site plans attached as Exhibits to the Declaration of Condominiums and hereby incorporated by reference.
. . . .
(c) To withdraw from the Condominium the real property proposed as the site for Phase 2, if that phase is not completed as provided in the Declaration of Condominium.
(Emphasis added.) The condo owners contend that the motel property proposed for phase 2 must have been included in the condominium, because otherwise there would be no point in reserving for the declarant the right to withdraw the phase 2 land.
The trial court determined that the declaration, not the public offering statement, controlled the decision about whether the motel property was included in the condominium. Although the quoted language in the public offering statement can be read in isolation to suggest that the motel property was already part of the condominium, that statement must be read in context of the provisions of the declaration to which it refers ("as provided in the Declaration of Condominium"). As discussed above, section 23.7 of the declaration provides a mechanism for withdrawal of the "future phase" land from the condominium by amendment in the event the declarant, having previously added the land by amendment, changed his mind about developing it. Therefore, the quoted language from the public offering statement does not defeat the conclusion the trial court reached by interpreting the declaration.
Local Building Codes
The condo owners offered the testimony of Terry Galvin, a city of Blaine planning director, to support their argument that the motel was part of the condominium. Galvin testified that the condominium units could not have legally received permits to be built in their present location if the motel and condominium were separate lots. For there to be two separate lots based on Blaine municipal code requirements, Galvin testified that there would have to be a minimum of 16 feet between the condominium and the motel building. The Wilson Engineering survey commissioned by the condo owners established that there was no more than 10 feet between the buildings. Galvin also gave testimony which, the condo owners argue, establishes when combined with other evidence that the land on which the present six units stand is, by itself, too small to meet the local code's minimum lot size requirement of 17,000 square feet for six units. Galvin testified that there was not an adequate amount of setback to legally divide the two properties. He said that if part of the condominium were destroyed by fire, a variance would be necessary to rebuild it.
The condo owners argue that since the code would not allow two lots, and since the city did issue a building permit, there must have been only one legal lot. There is some dispute about the actual measurements of the space occupied by the existing units. The surveyors used different approaches, and it is possible the six units together occupy less than the code limit of 17,000 square feet. But even if they are over the code limit, the fact that the city did issue a building permit for the six units is not relevant to discerning what Mantadakis intended when he created the condominiums in 1992. The declaration does not expressly adopt or refer to the local regulations.
Other Evidence
The condo owners identify several other documents they claim are objective manifestations of the declarant's intent: a building permit application and site plan Mantadakis submitted with a boundary line around the entire property, documents from the assessor's office assigning one parcel number where there had been separate numbers for Parcels A, B and C, and the quit claim deed Mantadakis received from his partner in 1999. To the extent these documents constitute extrinsic evidence that might aid in ascertaining the declarant's intent, they are entirely consistent with the conclusion that an amendment was necessary to bring the motel property into the condominium.
Furthermore, the evidence discussed by the condo owners is not the end of the extrinsic evidence that was introduced. In unrebutted testimony, Mantadakis said that he created and maintained separate bank accounts for the condominium, the Garden Townhouse Owners Association, and the motel. Expenses for each operation were paid from their respective accounts. He never commingled funds from the separate accounts. He purchased and maintained separate insurance policies for the two properties.
The condo association was responsible for purchasing insurance for all common areas, and testimony established that the condo association never purchased liability insurance for the motel. It is undisputed that the condo owners never came onto the motel property, contributed labor to the motel operation, paid any motel expenses, received any income from the motel, or paid any consideration for the motel property. Several condo owners testified that they did not believe they were purchasing any part of the motel when they purchased their condominium units.
The condo owners contend it is a significant fact that Mantadakis invoked the attorney client privilege with respect to Christopher Fletcher, the attorney who assisted him with the development of the condominiums. They argue it is an unavoidable inference that Mantadakis did this to prevent Fletcher from giving damaging testimony. The only authority cited for this argument is a case in which the attorney-client privilege was not an issue. Moreover, the condo owners have not identified any ruling made by the trial court concerning Mr. Fletcher to which they have assigned error. This contention is not properly before us.
In summary, the trial court did not err in concluding that the four lots in question did not ever become part of the Garden Townhouse Condominiums. Title to the motel property was properly quieted in Gogal.
LOCATION OF BOUNDARY LINE
The next question is whether the trial court erred when it set the location of the boundary line. The court reformed the survey map so that the southernmost wall of the condominium became the line separating the properties. As a result, the Gogal property occupies part of lot 7. The court established legal descriptions for the condo and for the Gogal property, and reformed the declaration and several other documents to include the correct legal descriptions.
The condo owners contend the boundary line should have been set further south, along the line of lot 7. They also contend that to the extent the motel encroaches into lot 7, it must be removed to give them a sufficient setback and prevent them from having a nonconforming lot.
The trial court relied on the common grantor doctrine as authority for drawing the line along the edge of the condo structure. A grantor who owns land on both sides of a line he has established as the common boundary is bound by that line. Winans v. Ross, 35 Wn. App. 238, 240, 666 P.2d 908 (1983) (citing Fralick v. Clark Cy., 22 Wn. App. 156, 589 P.2d 273 (1978)). The line will also be binding on grantees if the land was sold and purchased with reference to the line, and there was a meeting of the minds as to the identical tract of land to be transferred by the sale. The common grantor doctrine involves two questions: (1) was there an agreed boundary established between the common grantor and the original grantee, and (2) if so, would a visual examination of the property indicate to subsequent purchasers that the deed line was no longer functioning as the true boundary? Winans, 35 Wn. App. at 240-41.
The condo owners assert that there was no proof that Mantadakis and Gogal agreed that the southern wall of the condo would be the boundary. But a formal, or specific, or separate contract as to the boundary line between the parties is not necessary. Winans, 35 Wn. App. at 241. An agreement or meeting of the minds between the common grantor and the original grantee may be shown by the parties' manifestations of ownership after the sale. Winans, 35 Wn. App. at 241.
The trial court found that the south wall boundary line was demonstrated by the fact that Mantadakis planted a hedge and built a fence along this line after he constructed the condominiums, creating a visual border that was in place when the condo owners purchased their units. This finding, which is both unchallenged and supported by substantial evidence, supports application of the common grantor doctrine. Although Gogal once told one of the condo owners he thought the boundary line was located between the southern wall of the condo and the northernmost motel building, it is the objective behavior of the parties that matters, not their subjective impressions. Also, there is no evidence that Gogal or Mantadakis did anything reflective of an agreement that the boundary line ran underneath the motel building.
Finding of Fact 1.32.
The trial court used equitable powers to give each of the two properties a legal description. The Condominium Act expressly provides that principles of law and equity supplement the Act when not inconsistent with the Act. RCW 64.34.070. The trial court used the equitable powers granted in RCW 58.04.020 for a court to define a lost or uncertain boundary:
Whenever the boundaries of lands between two or more adjoining proprietors have been lost, or by time, accident or any other cause, have become obscure, or uncertain, and the adjoining proprietors cannot agree to establish the same, one or more of the adjoining proprietors may bring a civil action in equity, in the superior court, for the county in which such lands, or part of them are situated, and that superior court, as a court of equity, may upon the complaint, order such lost or uncertain boundaries to be erected and established and properly marked.
The condo owners invoke the principle that equity should not be used to harm the innocent. They contend it was inequitable to draw a boundary line that leaves them with a nonconforming lot and no legal access to their south wall. They also argue that it violated the separation of powers doctrine for the trial court to ignore the Blaine land use laws in order to correct a mistake made by a declarant who failed to fulfill his obligations under the Condominium Act. However, the only remedy they propose is to draw the line in such a way as to require eliminating one of the motel buildings. The inequity of this remedy is an obvious issue they have not addressed.
Absent reformation of the key documents to establish a boundary, the condominium was technically illegal due to Mantadakis' failure to include a legal description in the declaration. It was necessary for the trial court to establish legal descriptions setting a certain boundary in order to confirm that units 1 through 6 were a valid condominium under the Act. The only question, then, is whether the court erred in setting the boundary line along the south wall of the condominium building. This issue is reviewed under the abuse of discretion standard, because trial courts have broad discretionary power to fashion equitable remedies. In re Foreclosure of King County Liens, 123 Wn.2d 197, 204, 867 P.2d 605 (1994).
The injustice claimed by the condo owners appears from the record to be more theoretical than real. They did not obtain findings from the trial court showing that they carried their burden of proving their allegations of damage. Their evidence about the difficulties they will face because of the lack of proper setbacks was not unchallenged and is not so compelling that we can say the trial court should have paid more attention to it. The separation of powers doctrine sometimes comes into play when a court attempts to invoke its inherent authority as a means to override an action by the legislative branch it regards as wrongheaded, see, e.g., In Re Juvenile Dir., 87 Wn.2d 232, 552 P.2d 163 (1976). The condo owners have failed to cite authority showing a separation of powers problem exists in circumstances where the court was cloaked with statutory authority to establish an uncertain boundary.
The boundary line set by the court conforms to the physical indications that had been observed by all concerned for quite some time, including the condo owners. The alternative proposed by the condo owners is tangibly inequitable as it would require immediate destruction of a motel building and would give land to the condo owners that none of them believed they had actually purchased. The record provides no basis to believe that if Mantadakis had attached to the declaration a legal description such as the one the trial court created, any of the condo owners would have refused to purchase their condos. We conclude the boundary line does not represent an abuse of discretion.
CROSS APPEAL — ATTORNEY FEES
Mantadakis requested that Gogal be required to pay his attorney fees, a total of $28,046. The trial court denied this request. Mantadakis' cross-appeal of this ruling raises the question of whether he is entitled to attorney fees. This is an issue of law that is reviewed de novo. Ethridge v. Hwang, 105 Wn. App. 447, 460, 20 P.3d 958 (2001).
In Washington, attorney fees may be recovered only when authorized by a private agreement of the parties, a statute, or a recognized ground of equity. Mellor v. Chamberlain, 100 Wn.2d 643, 649, 673 P.2d 610 (1983). The basis of the request for attorney fees here is the purchase and sale agreement Mantadakis and Gogal signed. One of its provisions entitles the prevailing party to fees if the buyer, seller, listing agent or selling licensee "institutes suit concerning this Agreement." The terms of the purchase and sale agreement did not merge into the deed because of an anti-merger clause, and thus the attorney fee provision still has force.
The trial court entered two conclusions of law related to the attorney fee issue. First, since "Mantadakis owned the property conveyed to Gogal, there is no breach of warranty of title to Gogal, and Gogal's claim for breach of warranty against Mantadakis should be dismissed with prejudice." Conclusion of Law 2.26. Second, "because the Court found that the title claim of the Garden Townhouse Condominium Association against Gogal fails, it was not necessary for the Court to reach Gogal's claim for breach of warranty against Mantadakis, which was pled in the alternative. Mantadakis had a duty to defend Gogal's title which is required under RCW 64.04.030 and is not entitled to recover fees incurred in discharge of that duty by participating in this litigation." Conclusion of Law 2.27(b). RCW 64.04.030 provides that the grantor of a statutory warranty deed covenants to defend the grantee's title.
Mantadakis claims he is entitled to at least $4,030, the amount he says he incurred in defending against Gogal's third party claim. But he primarily argues that he is entitled to recover the entire $28,046 on the grounds that he did not owe Gogal a duty to defend against the condo owners' claims for title, and therefore should not have been dragged into the litigation in the first place.
In view of the fact that the dispute arose from the failure of Mantadakis to attach a legal description to the declaration, it is perhaps more fair to say it was Mantadakis who caused Gogal to become enmeshed in litigation. But as Mantadakis views the case, Gogal sued him for breach of warranty of title, and the trial court's ruling dismissing that claim shows that Gogal was unsuccessful in doing so. Therefore, according to Mantadakis, he is the prevailing party on that claim.
We disagree with that analysis. As the trial court concluded, Mantadakis was obligated to come into the case to defend Gogal because Mantadakis was the grantor of a statutory warranty deed. Gogal's claim for breach of warranty of title was an alternative that the trial court did not have to consider on the merits and therefore Mantadakis did not prevail on it.
Mantadakis argues that he did not have a statutory duty to defend Gogal because the defects alleged by the condo owners to establish their title were excepted out of any warranty by the terms of the deed itself. The warranty deed, plaintiff's Exhibit 20, was made subject to exceptions contained in "Exhibit B." These included terms, conditions, covenants, restrictions, regulations and requirements provided in the condo declaration, and provisions set forth in the survey map and plans. Mantadakis makes an analogous argument based on the reference in the purchase and sale agreement to exceptions to coverage disclosed in the preliminary commitment for title insurance, including the fact that a legal description was not included in the application for title insurance.
The trial court did not find or conclude that the language in these documents excused Mantadakis, as grantor, from his statutory duty to defend Gogal under RCW 64.04.030. Having reviewed the documents, we see in them no express language that would compel such a conclusion. The exceptions they note have no relevance because, as we have affirmed, there were no flaws in the title Mantadakis conveyed to Gogal. Because he and Gogal together prevailed against the condo owners, they avoided the alternative scenario in which it would have become necessary for the trial court to identify the prevailing party in Gogal's breach of warranty claim against Mantadakis. Mantadakis had a statutory duty to defend Gogal; he discharged his duty successfully; and there is no authority, statutory or contractual or otherwise, permitting him to receive an award of fees for the discharge of his duty.
The judgment is affirmed in all respects.
WE CONCUR: