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affirming trial court's finding that one co-owner's failure to inform other co-owners about the purchase and sale agreement at issue was inconsistent with a claim of partnership
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No. 64402-5-I.
Filed: March 7, 2011.
Appeal from a judgment of the Superior Court for Skagit County, No. 04-2-02102-5, John M. Meyer, J., entered October 2, 2009.
Affirmed in part, reversed in part, and remanded by unpublished opinion per Cox, J., concurred in by Ellington and Appelwick, JJ.
In this second review of this case, Robert Peterson makes 22 assignments of error to findings and conclusions of the trial court in the bench trial following remand in the prior review. Because there was no error in the trial court's comprehensive and correct findings, but two errors in its conclusions, we affirm in part. Because the trial court committed legal error when it refused to award prejudgment interest and attorney fees to Joseph and Kimberly Woodmansee, we reverse in part. Accordingly, we remand for further proceedings solely on the parts of the decision that we reverse.
The facts regarding the underlying real estate transactions between these parties are outlined in our prior opinion following our grant of discretionary review in Woodmansee v. Peterson. In that review, specific performance and attorney fees were at issue. We affirmed in part, reversed in part, and remanded for further proceedings. We expressly declined to address other claims regarding Peterson's actions or omissions in these transactions.
Noted at 132 Wn. App. 1050, 2006 WL 1195512.
Following remand by this court, Peterson sold his interest in Parcel 3 to the Woodmansees for $135,000 per acre. The Woodmansees then went to trial on their amended complaint against Peterson. The court found Peterson liable in a bench trial for breach of duty, fraud, wrongful interference with a business expectancy, and promissory estoppel. The court awarded the Woodmansees prejudgment interest on the difference between the amount paid to Peterson for his interest in Parcel 3 and the original Purchase and Sale Agreement (PSA) price. It denied prejudgment interest on the excess amount paid for his co-owners' interests. It also denied the Woodmansees' request for attorney fees.
Peterson appeals, and the Woodmansees cross-appeal.
BREACH OF FIDUCIARY DUTIES
Peterson argues that the trial court erred in finding that he breached any fiduciary duties to the Woodmansees. We disagree.
Peterson challenges 15 findings of fact and 19 conclusions of law of the trial court. We limit our review to those challenges that are necessary to decide the legal theories supporting Peterson's liabilities. We note that regardless of the theory of liability, the damages remain the same.
Breach of a fiduciary duty requires the plaintiff to prove: "(1) the existence of a duty owed; (2) a breach of that duty; (3) a resulting injury; and (4) that the claimed breach was the proximate cause of the injury." An agent has a duty to act in good faith, to fully disclose his interest in and his actions involving the affected property, and to deliver all benefits derived from a breach of these duties to the principal.
Miller v. U.S. Bank of Washington, N.A., 72 Wn. App. 416, 426, 865 P.2d 536 (1994) (citing Hansen v. Friend, 118 Wn.2d 476, 479, 824 P.2d 483 (1992)).
Crisman v. Crisman, 85 Wn. App. 15, 22, 931 P.2d 163 (1997) (citing Moon v. Phipps, 67 Wn.2d 948, 956, 411 P.2d 157 (1966)).
An agency relationship may arise when one engages another to perform a task for the former's benefit. Consent between the parties and control are the essential elements of an agency relationship. The principal may either control or have the right to control the performance of the benefit. "It is the existence of the right of control, not its exercise, that is decisive."
O'Brien v. Hafer, 122 Wn. App. 279, 281, 93 P.3d 930 (2004).
Barker v. Skagit Speedway, Inc., 119 Wn. App. 807, 814, 82 P.3d 244 (2003) (citing Nordstrom Credit, Inc. v. Dep't of Revenue, 120 Wn.2d 935, 941, 845 P.2d 1331 (1993); Moss v. Vadman, 77 Wn.2d 396, 403, 463 P.2d 159 (1969)).
O'Brien, 122 Wn. App. at 281.
Id. (quoting Pagarigan v. Phillips Petroleum Co., 16 Wn. App. 34, 37, 552 P.2d 1065 (1976)).
Whether a party acts as another's agent or breaches a fiduciary duty are both questions of fact. A trial court's findings of fact are reviewed for substantial evidence. Substantial evidence is evidence sufficient to persuade a fair-minded, rational person of the finding's truth. Unchallenged findings of fact are verities on appeal. We review de novo the trial court's conclusions of law to determine if they are supported by the findings of fact.
Id. (citing Uni-Com Northwest, Ltd. v. Argus Publ'g. Co., 47 Wn. App. 787, 796, 737 P.2d 304 (1987)); Valentine v. Department of Licensing, 77 Wn. App. 838, 846, 894 P.2d 1352 (1995).
Sunnyside Valley Irr. Dist. v. Dickie, 149 Wn.2d 873, 879, 73 P.3d 369 (2003).
Id. at 879.
In re Marriage of Brewer, 137 Wn.2d 756, 766, 976 P.2d 102 (1999).
Bingham v. Lechner, 111 Wn. App. 118, 127, 45 P.3d 562 (2002) (citing City of Seattle v. Megrey, 93 Wn. App. 391, 393, 968 P.2d 900 (1998)).
Here, the trial court appears to have prepared its own comprehensive findings in this bench trial. Among them are the following:
11. Peterson volunteered to act as agent for Woodmansees to communicate the original PSA to [James Hillman, Ed Sheron, Shirley Sheron, and Alayna Sheron (collectively the "co-owners")] and obtain their signatures. As a licensed real estate broker for 40 years, Peterson knew that in undertaking to get the other owners' signatures on the PSA, he was acting as an agent for Woodmansees.
12. Woodmansees consented to Peterson's offer, and in reliance on Peterson, forewent having Torset [the Woodmansees' agent] contact Hillman and Sherons. Peterson substituted for Woodmansees' agent, Torset, in the performance of these specific acts. Woodmansees retained the right to control Peterson in how he proceeded to obtain the signatures. Woodmansees could have had Peterson bring back the PSA signature sheet and proceed to obtain the signatures themselves. Peterson was Woodmansees' agent for the purpose of obtaining the other owners' signatures.
13. Torset had a number of conversations with Mr. Peterson about the status of the execution of the PSA. Peterson told him that the co-owners were hard to contact, and that he was still attempting to get their signatures. That was a misrepresentation upon which Woodmansees and Torset relied to their detriment. Peterson was always able to contact the Sherons. Peterson always knew how to contact Hillman and had contacted Hillman at his address on a number of occasions during the relevant time period. If Peterson had told Torset and Woodmansee that he had not attempted to contact the co-owners, then they would have contacted Hillman and Sherons themselves. Peterson showed a lack of fairness and good-faith dealing throughout.
. . . .
15. On August 12, 2004, Peterson wrote back to Woodmansees that Peterson had communicated the PSA to the co-owners of Parcel 3, that the co-owners had rejected the price of $65,000 per acre, and that the co-owners demanded a price of $100,000 per acre. This misrepresented these matters.
. . . .
17. Woodmansees offered $100,000 per acre for Parcel 3 in reliance on Peterson's misrepresentations.
. . . .
31. The day after Sherons and Woodmansees executed the third PSA for parcel 3, Peterson wrote a letter to Woodmansees stating that he had not yet gotten the signature of Hillman, and asked Woodmansees to give him more time to do so. This request was an acknowledgement that Woodmansees were entitled to control him in communicating with Hillman and Sherons.
Clerk's Papers at 2609-11, 2615.
Peterson challenges findings 11, 12, 13, and 31. He does not challenge findings 15 or 17. Thus, these latter findings are verities on appeal. Accordingly, there is no dispute that he misrepresented material information to the Woodmansees, as finding 15 states.
Peterson challenges the portion of finding 11 that states that he was the Woodmansees' agent for obtaining the co-owners' signatures on the PSA and that he, therefore, owed them duties of good faith and loyalty. Peterson does not challenge the court's finding that his experience as a real estate agent meant that he understood he was acting as the Woodmansees' agent. He also does not dispute that he volunteered to get his co-owners' signatures on the PSA for the Woodmansees. Based on these unchallenged findings, there was substantial evidence that Peterson was acting as the Woodmansees' agent to obtain the signatures.
He challenges findings 12 and 31: that the Woodmansees had a right to control him. He claims that his failure to obtain his co-owners' signatures demonstrated the Woodmansees' lack of control. This argument makes no sense. It is the existence of the right of control that is key, not its exercise. In a letter, Peterson explained to Torset and Woodmansee that he had not yet received Hillman's signature, "I know I can somehow work this all out by no later than November 1st; bear with me." Peterson's request is substantial evidence that the Woodmansees controlled his performance in obtaining the signatures.
O'Brien, 122 Wn. App. at 281 (quoting Pagarigan, 16 Wn. App. at 37).
Finally, Peterson challenges the statement in finding 13 that he showed a lack of fairness and good-faith dealing, but does not challenge the description of his behavior. There can be no reasonable dispute that these actions constitute substantial evidence that Peterson breached his duty of good faith.
The findings outlined above, which either are verities on appeal or are supported by substantial evidence, support the elements of breach of fiduciary duty. Peterson owed the Woodmansees a duty of loyalty and good faith in obtaining his co-owners' signatures on the PSA because he was acting as their agent in that regard. He was their agent because both parties consented that he should obtain the signatures and the Woodmansees had the right to control his performance of that action. Peterson breached his duties to them by not contacting the co-owners with the original offer and stating that they would not accept less than $100,000 per acre. Peterson's breach proximately caused the Woodmansees' injuries because they increased their offer per acre in reliance on his misrepresentations. If the Woodmansees had known that Peterson did not give the co-owners the original PSA, they would have obtained the signatures themselves. Peterson's breach also proximately caused the Woodmansees to pay an increased price for Peterson's interest in Parcel 3. The Woodmansees would have paid $65,000 per acre for that interest if Peterson had obtained the co-owners' signatures as promised.
Peterson argues that Buckley v. Hatupin and McLennan v. Investment Exchange Co. require a different result. In both cases, a seller's agent misrepresented a property's lowest price. The buyer subsequently sued to recover the difference between the price paid and the price authorized by the seller. Neither plaintiff could recover because the court held that the agent was clearly the seller's agent and no confidential relationship existed between the buyer and the agent.
198 Wash. 543, 89 P.2d 212 (1939).
170 Mo. App. 389, 156 S.W. 730 (1913).
Buckley, 198 Wash. at 545; McLennan, 170 Mo. App. at 731.
Buckley, 198 Wash. at 545; McLennan, 170 Mo. App. at 731.
Buckley, 198 Wash. at 547-48; McLennan, 170 Mo. App. at 731.
Here, the trial court properly found that Peterson was the Woodmansees' agent in securing the other owners' signatures. He breached his duty as their agent and his breach proximately caused their damages. The cases on which Peterson relies do not require a different result in this case.
Peterson argues that he was not the Woodmansees' agent because "there was no agreement between [them] that he was to act primarily for the Woodmansees' benefit." He cites the Restatement (Second) of Agency § 14K, which states: "One who contracts to acquire property from a third person and convey it to another is the agent of the other only if it is agreed that he is to act primarily for the benefit of the other and not for himself." But, Peterson did not contract to acquire property and convey it to another. Rather, he agreed to obtain his co-owners' signatures for the Woodmansees' benefit. Thus, the Restatement is not persuasive.
Restatement (Second) of Agency § 14K (1958) (superseded by Restatement (Third) of Agency § 1.01 (2006)).
Peterson argues that the fiduciary duty of good faith and fair dealing between contracting parties is inapplicable because there was no completed contract in this case. The existence of a contract is irrelevant to the question whether he breached fiduciary duties as the Woodmansees' agent.
Finally, Peterson appears to argue that he had no fiduciary duty to sell his property to the Woodmansees. He also assigns error to the court's conclusion that he also breached his fiduciary duties by inserting the commission provision into the second PSA. He offers no substantive argument in support of these claims. We need not review an issue raised in passing or unsupported by authority or persuasive argument.
See State v. Johnson, 119 Wn.2d 167, 171, 829 P.2d 1082 (1992).
FRAUD
Peterson argues that his actions toward the Woodmansees did not constitute fraud. The record amply demonstrates otherwise.
Fraud requires proof of nine elements: "(1) representation of an existing fact; (2) materiality; (3) falsity; (4) the speaker's knowledge of its falsity; (5) intent of the speaker that it should be acted upon by the plaintiff; (6) plaintiff's ignorance of its falsity; (7) plaintiff's reliance on the truth of the representation; (8) plaintiff's right to rely upon it; and (9) damages suffered by the plaintiff."
Stieneke v. Russi, 145 Wn. App. 544, 563, 190 P.3d 60 (2008) (citing Stiley v. Block, 130 Wn.2d 486, 505, 925 P.2d 194 (1996)).
Here, the trial court made the following unchallenged findings of fact:
15. On August 12, 2004, Peterson wrote back to Woodmansees that Peterson had communicated the PSA to the co-owners of Parcel 3, that the co-owners had rejected the price of $65,000 per acre, and that the co-owners demanded a price of $100,000 per acre. This misrepresented these matters. Peterson knew he had not disclosed the original PSA to Hillman and Sherons, and that they had not rejected it. Woodmansees and Torset did not know that Peterson's statements were false, or they would have contacted the co-owners themselves. . . .
16. Peterson knowingly made these false, material misrepresentations to Woodmansees, intending that the Woodmansees rely upon them. . . .
17. Woodmansees offered $100,000 per acre for Parcel 3 in reliance on Peterson's misrepresentations. Woodmansees' reliance upon Peterson's misrepresentations was reasonable under the circumstances, including: Peterson signed the original PSA himself and had not indicated that he wished to change the terms; Peterson represented that the other owners were difficult to contact and to deal with; and Peterson again undertook to obtain the signatures of the co-owners on the second PSA, ostensibly to help Woodmansees.
18. . . . Relying upon Peterson's representation, Woodmansees and Peterson executed a second Purchase and Sale Agreement for Parcel 3 at the price of $100,000 per acre.
19. The only reason Woodmansees raised their offer was because of Peterson's representations of the demand for that price by the co-owners. . . .
30. . . . Torset and Woodmansee met with the Sherons on September 27, 2004, and at that time they drew up and executed a third PSA for Parcel 3. They agreed on a price of $100,000 per acre. . . . Torset drove the PSA to Hillman in eastern Washington the next day, where he executed it.
Clerk's Papers at 2610-12, 2614-15.
Based on these findings, each element of fraud is satisfied. The unchallenged findings show that Peterson represented to the Woodmansees that his co-owners demanded $100,000 per acre rather than $65,000 per acre. This was material to the transaction, false, and Peterson knew of its falsity. Peterson intended for the Woodmansees to rely on the representation. The Woodmansees did not know that Peterson had not actually spoken to the co-owners and reasonably relied on his misrepresentation. Their reliance caused them damages because they eventually paid the co-owners $100,000 per acre for the property rather than $65,000 per acre. Therefore, the trial court's conclusion that Peterson committed fraud is well-supported by this record.
Peterson challenges the trial court's conclusion that the Woodmansees had the right to rely on his promise that he would obtain the co-owners' signatures. He offers no substantive argument in support of this challenge. Thus, we need not address this argument.
See Johnson, 119 Wn.2d at 171.
Peterson again argues that Buckley requires reversal. There, the court held that because Hatupin was not the Buckleys' agent, they had no right of recovery against him. But, it explained that "a principal who has been deceived, to his prejudice, by his agent, may recover from his agent property obtained from him by the agent through false and fraudulent representations." Here, Peterson was acting as the Woodmansees' agent and they were prejudiced because of his misrepresentations. Therefore, Buckley actually supports Peterson's liability to the Woodmansees.
Buckley, 198 Wash. at 554-55.
Id. at 550.
For similar reasons, Peterson's reliance on McLennan, Bosley v. Monahan, Bradley v. Oviatt, Huttig v. Nessy, Linnemann v. Summers, R. Harris Co. v. Weller, and Sanders v. Stevens is also unpersuasive.
McLennan, 170 Mo. App. at 731 (agent was clearly the agent of the seller and no confidential relationship existed between the buyer and the agent).
137 Iowa 650, 112 N.W. 1102 (1907) (no confidential relationship between buyer and seller's agent).
86 Conn. 63, 84 A. 321 (1912) (seller's agent was not liable to buyer because he did not make a misrepresentation about the price and the buyer did not rely on his statements of the value of the land).
100 Fla. 1097, 130 So. 605 (1930) (seller's agent was only liable to the seller for misrepresentations of the authorized selling price, not to the buyer).
95 N.J. Eq. 507, 123 A. 539 (1924) (holding that seller's agent not liable for fraud because reliance element not proved).
52 App. D.C. 6, 280 F. 980 (1922) (holding that seller's agent was not liable to buyer for securing the highest price possible for the property at issue).
23 Ariz. 370, 203 P. 1083 (1922) (seller's agent not liable to buyer for misrepresentations of his commission on the sale because there was no evidence that seller would have accepted a lower total price).
Peterson argues that his misrepresentation was "seller's talk" and not fraud because he was his co-owners' agent and was simply negotiating a better price for them. He relies on the Restatement (First) of Agency § 348, which states in relevant part:
"Sellers' talk" by agent. An agent, acting for the benefit of the principal, is privileged to make such misrepresentations in bargaining as are permitted to the principal as a bargainer. Thus, as the principal is permitted to misstate without liability in deceit the lowest price at which he is willing to sell, or the highest price at which he is willing to buy, the agent also, without being liable in deceit, may make such misrepresentations concerning the state of the principal's mind.
Restatement (First) of Agency § 348, cmt. D (1933).
Peterson proposes several legal theories under which he acted as his co-owners' agent, none of which are persuasive.
First, he argues that he was his co-owners' agent because they gave him the authority to negotiate on their behalf. This is untrue. The trial court made the following findings about Peterson's relationship with his co-owners:
24. Peterson knew at the time that he made the misrepresentations to Woodmansees that he had no authority from Sherons and Hillman to reject Woodmansees' offer on their behalf. Hillman and Sherons never gave Peterson any authority to decide anything for them regarding the sale of the property, and Peterson had no authority from them to negotiate the price of Parcel 3. Peterson was not an agent of Hillman and Sherons in the negotiations with Woodmansees for the sale of Parcel 3.
Clerk's Papers at 2613.
This finding was challenged by Peterson so it is reviewed for support by substantial evidence.
Peterson did not testify at trial, but his deposition was admitted as substantive evidence. In his deposition, Peterson addressed this issue:
Q. . . . You didn't have authority to sign [the PSA] for [Hillman and Sheron]?
A. That's right.
Q. And, you didn't have authority to reject it for them, did you?
A. I guess I didn't.
Q. Yeah. You knew that at the time, didn't you?
A. Probably did.
Q. Certainly did?
A. Um-hmm.
Q. You mean yes?
A. Yes.
Q. So when you had second thoughts about them signing it or not, that was something that really was outside of your authority to decide for them?
A. Probably.
Q. Certainly?
A. Yeah.
Q. You went on your paragraph 19, page 9 [of your declaration]. It says, "I felt I had the necessary authority to speak for the co-owners despite our communication problems and decided that there was no reason to sign up a contract of $65,000.["] So now this says that you felt you had the authority to reject it on their behalf; is that correct?
A. Um-hmm.
Q. But in retrospect, you now know you didn't have that authority; is that correct?
A. Correct.
Clerk's Papers at 934-35.
Additionally, in a letter to Torset, Peterson stated, "I have never had the legal authority for my partners regarding sale of [Parcel 3]." This is substantial evidence that Peterson was not his co-owner's agent.
Next, Peterson argues that he was his co-owners' partner and therefore their agent. He argues that the partnership was based on "their past dealings in buying, holding and reselling their prior investments." Whether a partnership exists depends on the parties' intention, which is ascertained by examining all of the facts and circumstances, and the parties' actions and conduct.
Douglas v. Jepson, 88 Wn. App. 342, 347, 945 P.2d 244 (1997) (citing Malnar v. Carlson, 128 Wn.2d 521, 535, 910 P.2d 455 (1996)).
Here, the trial court made the following findings of fact on this issue:
53. Peterson's failure to inform Hillman and Sherons about the original PSA is inconsistent with Peterson's claim of partnership. Peterson did not conduct himself as a partner towards Hillman and Sherons. There was no conduct by Peterson, Hillman or Sherons which might imply a partnership relationship between them. Hillman and Sherons were not partners with Peterson in the ownership of Parcel 3.
54. The parties and the co-owners loosely used the term "partners" when writing about their common ownership with Peterson of Parcel 3. The parties used the term colloquially, and did not intend to imply that their legal relationship in the ownership of Parcel 3 was anything other than as tenants in common. No one used that term intending to imply or denote that Peterson had any authority to act for the co-owners. It was never understood or used by anyone in a context of describing a legal partnership or relationship.
Clerk's Papers at 2620-21.
These findings are supported by substantial evidence.
Hillman testified that he bought and sold many houses by himself, without a real estate agent. He explained that he owned a rental property with Peterson in Lynnwood before purchasing the Mount Vernon property. He also described how Peterson controlled buyer inquiries on the Lynnwood property without any consent from him: "[E]verything went to him. Like I said, he just took over, nothing we can do about it." After he purchased the Mount Vernon property with Peterson, Hillman believed they would sell it within a few months. But, that didn't happen "because [Peterson] dictated the thing when we were going to get out, that was it." When asked who was responsible for reselling the Mount Vernon property, Hillman replied, "I don't know whose job it was, but [Peterson] took over and did it anyway whether we liked it or not." Hillman testified that Peterson had no legal authority to deal with the Woodmansees on his behalf. Additionally, Hillman explained that although Peterson had represented him in the past, he never gave Peterson the authority to sign anything and in the past had rejected offers Peterson brought to him.
Clerk's Papers at 371.
Clerk's Papers at 372.
Mr. Sheron testified that he and his wife bought, fixed up, and sold several homes; bought and sold several pieces of land; and developed a piece of property. He explained that they bought a piece of land with Peterson before they purchased the Mount Vernon property. Mr. Sheron stated that he felt all of the co-owners were equally responsible for managing the Mount Vernon property and that he was free to sell his interest regardless of what Peterson thought. Therefore, the trial court's finding that there was no partnership is supported by substantial evidence.
Peterson relies on Nilsson v. McDole for the proposition that a party's admission of a partnership is conclusive on the issue of whether a partnership exists. In that case, the trial court disallowed evidence of admissions by the defendants that they were in a partnership. The supreme court held that such admissions were admissible and should have gone to the jury who is ultimately responsible for deciding whether a partnership existed.
73 Wash. 312, 131 P. 1141 (1913).
Nilsson, 73 Wash. at 315.
Id. at 314-15.
Nilsson does not require a different result here. Hillman did testify that he wrote a letter to Peterson including his contact information and explained that "I felt as long as we owned part — you know, partners in the property he should know where I am at." Mr. Sheron also referred to Peterson as "one of my partners." These statements by Hillman and Mr. Sheron were admitted at trial. Nevertheless, the judge, as finder of fact, found that a partnership did not exist. We will not substitute our judgment for that of the finder of fact on this matter. Peterson's reliance on Nilsson is not persuasive.
Clerk's Papers at 404.
Third, Peterson argues that he was his co-owners' agent based on their status as tenants in common in the property. He also argues he was his co-owners' agent because they ratified his actions. Although he assigned error to these conclusions of law, he offers no substantive argument in support. Accordingly, we do not address the arguments.
See Johnson, 119 Wn.2d at 171.
Finally, Peterson argues that his relationship with the co-owners is somehow analogous to the relationship between a husband and wife. From this premise, he claims he had authority to negotiate on their behalf. Neither the premise nor its conclusion makes sense. We reject the argument.
WRONGFUL INTERFERENCE WITH A BUSINESS EXPECTANCY
Peterson argues that the trial court erred in finding him liable for wrongful interference with a business expectancy. We disagree.
Wrongful interference with a contractual relationship or a business expectancy requires proof of five elements:
(1) the existence of a valid contractual relationship or business expectancy; (2) that defendants had knowledge of that relationship; (3) an intentional interference inducing or causing a breach or termination of the relationship or expectancy; (4) that defendants interfered for an improper purpose or used improper means; and (5) resultant damage.
Pac. Nw. Shooting Park Ass'n v. City of Sequim, 158 Wn.2d 342, 351, 144 P.3d 276 (2006) (quoting Leingang v. Pierce County Med. Bureau, Inc., 131 Wn.2d 133, 157, 930 P.2d 288 (1997)).
In order to satisfy the first element, the plaintiff need not prove that there is an existing enforceable contract, but must show a relationship between parties contemplating a contract that has a reasonable expectation of fruition.
Scymanski v. Dufault, 80 Wn.2d 77, 84-85, 491 P.2d 1050 (1971).
Here, the court made the following findings of fact:
19. The only reason Woodmansees raised their offer was because of Peterson's representations of the demand for that price by the co-owners. Peterson's misrepresentations caused Woodmansees to increase their offer to $100,000 per acre. Peterson intentionally interfered with Woodmansees' offer to Hillman and Sherons under the original PSA, in order to personally profit by deceiving Woodmansees into raising the offer. He intended the exact harm Woodmansees incurred: the increase in price for Parcel 3.
. . . .
25. Woodmansees had a valid business expectancy in obtaining the Parcel 3 property interests of the co-owners. Woodmansee and Peterson both knew of their opportunity to obtain a contract with Hillman and Sherons, and they expected Hillman and Sherons to sign it. Peterson knew that Hillman and Sherons wanted to sell, and he did not offer any reason why he might think that they would not sign the PSA if they knew of it. Peterson intentionally failed to disclose it to them because he expected them to sign it.
26. Woodmansees' expectation that Hillman and Sherons would sign the original PSA was reasonable and not merely wishful thinking, demonstrated in part by the fact that they offered a reasonable price for the Parcel according to the appraisals by Mr. Hewitt and Mr. Foote, Hillman and Sherons wanted to sell, and that they did in fact sign a PSA as soon as Peterson's interference was discovered.
27. Peterson knew of the Woodmansees' business opportunity with the co-owners, and intentionally interfered with it using wrongful methods and with improper motive, causing a termination of the expectancy. Peterson's wrongful acts destroyed the Woodmansees' opportunity to obtain the signatures of Hillman and Sherons on both the original and the second PSAs. Peterson's conduct was purposefully improper; it was wrongful in both purpose and means. His interference with both the original and second PSAs was not in good faith.
. . . .
49. When Woodmansee and Torset met with the Sherons, the Sherons had the second PSA in their hands. Mrs. Sheron testified that as far as they knew, $100,000 was always the price, it was the first offer the co-owners heard, and it therefore became the price they wanted. . . . Woodmansee continued to offer $100,000 per acre because Hillman and Sherons already knew that Woodmansees were willing to pay that price. There is no credible evidence to support defendant's speculation that after seeing the second PSA offer at $100,000, Hillman and Sherons might have accepted $65,000 an acre.
Clerk's Papers at 2611-14, 2619.
Peterson challenges findings 25 and 27. These findings are reviewed for substantial evidence in the record. The other findings are verities on appeal.
Sunnyside Valley, 149 Wn.2d at 879.
In finding 25, the trial court found that there was a business expectancy because both Peterson and the Woodmansees expected the co-owners, who were parties to the original PSA, to sign it. The PSA required the signatures of Peterson, the Woodmansees, Hillman and the Sherons. Finding 26 explained the expectation that the co-owners would have signed the original PSA was reasonable. There is substantial evidence to support this finding.
Finding 27, also challenged by Peterson, is similarly supported by substantial evidence. Peterson knew of the Woodmansees' business opportunity because he was a party to the PSA. Additionally, as found in unchallenged findings 16 and 19, Peterson's motivation in interfering was his own profit.
Given these findings of fact by the trial court, the elements of wrongful interference with a business expectancy are satisfied. First, the Woodmansees had a valid business expectancy that the co-owners would sign the original PSA. An executed contract was not required for purposes of this element. Second, Peterson knew about the expectancy because he was a party to the PSA and an agent for the Woodmansees to fulfill the expectancy by getting the signatures. Third, Peterson intentionally did not disclose the original PSA to the co-owners and his failure to do so terminated the Woodmansees' expectation that they could buy the property for $65,000 per acre. Fourth, Peterson's interference was for his own personal profit, which is an improper purpose. And, finally, the Woodmansees suffered damages in that they eventually paid $100,000 per acre for the property, rather than $65,000 per acre.
Peterson argues that he cannot be liable for wrongful interference with a business expectancy because he was a party to the contract. He relies on Olson v. Scholes. In that case, this court explained that wrongful interference with a business expectancy "does not apply to actions where the contest is between parties to an existing contract." If the interference was caused by a party to the contract, the proper remedy lies in a breach of contract claim, not tort law.
17 Wn. App. 383, 563 P.2d 1275 (1977).
Id. at 390 (emphasis added).
Id.
This court previously held that there was no valid contract between Peterson and the Woodmansees under the original PSA. Because there was no existing contract between Peterson and the Woodmansees, the Woodmansees cannot recover under a breach of contract claim. Olson and the other cases cited by Peterson are not persuasive because each involved an executed contract.
Woodmansee, 2006 WL 1195512, at *4-5.
See Reninger v. State Dep't of Corrections, 134 Wn.2d 437, 448, 951 P.2d 782 (1998) (remedy under an employment contact, not tort law); Olympic Fish Products, Inc. v. Lloyd, 93 Wn.2d 596, 598, 611 P.2d 737 (1980) (no tortious interference because defendant was an agent to one of the parties to the contract and there is no liability in tort for a party that induces its own breach); Houser v. City of Redmond, 16 Wn. App. 743, 746-47, 559 P.2d 577 (1977) (employer's agent cannot be liable for tortious interference in the breach of an employment contract); Hein v. Chrysler Corp., 45 Wn.2d 586, 596, 277 P.2d 708 (1954) (no tortious interference because both plaintiff and defendant were parties to a dealer contract).
Peterson argues that he was a party to the third PSA between the Woodmansees and his co-owners because he was their partner and agent in the transaction. But, as we already explained, Peterson was not acting as his co-owners' partner or agent. Thus, this argument is not persuasive.
Peterson also argues that the claim of wrongful interference with a business expectancy must fail because the Woodmansees never knew or communicated with the co-owners, and therefore, could not have a relationship. He relies on the following language in Scymanski v. Dufault:
80 Wn.2d 77, 491 P.2d 1050 (1971).
All that is needed is a relationship between parties contemplating a contract, with at least a reasonable expectancy of fruition.
Id. at 84-85.
The Woodmansees' relationship with the co-owners arose because they were parties to the same transaction. Peterson cites no authority that parties must communicate or know each other in order to satisfy the relationship element of wrongful interference with a business expectancy and it is assumed that he found none.
Even assuming that there was no relationship between the Woodmansees and the co-owners, the first element of wrongful interference with a business expectancy requires a contractual relationship or business expectancy. There is substantial evidence that the Woodmansees had a business expectancy. They need not also prove that they had a "relationship" with the co-owners.
Pac. Nw. Shooting Park Ass'n, 158 Wn.2d at 351 (quoting Leingang, 131 Wn.2d at 157).
PROMISSORY ESTOPPEL
Peterson argues that the court erred in concluding that he was liable under the doctrine of promissory estoppel. We disagree.
To obtain recovery in promissory estoppel, a plaintiff must establish:
"(1) [a] promise which (2) the promisor should reasonably expect to cause the promisee to change his position and (3) which does cause the promisee to change his position (4) justifiably relying upon the promise, in such a manner that (5) injustice can be avoided only by enforcement of the promise."
Havens v. C D Plastics, Inc., 124 Wn.2d 158, 171-72, 876 P.2d 435 (1994) (quoting Klinke v. Famous Recipe Fried Chicken, Inc., 94 Wn.2d 255, 259 n. 2, 616 P.2d 644 (1980)).
"A promise is `a manifestation of intention to act or refrain from acting in a specified way, so made as to justify a promisee in understanding that a commitment has been made.'"
Id. at 172 (quoting Restatement (Second) of Contracts § 2(1) (1981)).
The court made the following, unchallenged findings of fact:
9. Peterson offered to obtain the signatures of Hillman and Sherons to save Woodmansees and Torset the time and effort. This was unusual, as it would normally be the responsibility of the purchaser's agent to be certain that matters were signed around, but because of the history with Peterson, Woodmansees and Torset relied on Peterson to do what he said he would.
. . . .
15. On August 12, 2004, Peterson wrote back to Woodmansees that Peterson had communicated the PSA to the co-owners of Parcel 3, that the co-owners had rejected the price of $65,000 per acre, and that the co-owners demanded a price of $100,000 per acre. This misrepresented these matters. Peterson knew he had not disclosed the original PSA to Hillman and Sherons, and that they had not rejected it. Woodmansees and Torset did not know that Peterson's statements were false, or they would have contacted the co-owners themselves. . . .
16. Peterson knowingly made these false, material misrepresentations to Woodmansees, intending that the Woodmansees rely upon them. . . .
17. Woodmansees offered $100,000 per acre for Parcel 3 in reliance on Peterson's misrepresentations. Woodmansees' reliance upon Peterson's misrepresentations was reasonable under the circumstances, including: Peterson signed the original PSA himself and had not indicated that he wished to change the terms; Peterson represented that the other owners were difficult to contact and to deal with; and Peterson again undertook to obtain the signatures of the co-owners on the second PSA, ostensibly to help Woodmansees.
18. . . . Relying upon Peterson's representation, Woodmansees and Peterson executed a second Purchase and Sale Agreement for Parcel 3 at the price of $100,000 per acre.
19. The only reason Woodmansees raised their offer was because of Peterson's representations of the demand for that price by the co-owners. . . .
Clerk's Paper at 2609-11.
The elements of promissory estoppel are satisfied by these findings. First, Peterson promised to obtain the co-owners' signatures on the original PSA. Second, Peterson intended, and therefore reasonably expected, that the Woodmansees would not obtain the signatures from the co-owners on their own. Third, Peterson's promise did, in fact, cause the Woodmansees not to obtain the signatures. Fourth, the Woodmansees justifiably relied on Peterson's promise. And, injustice can only be avoided by enforcing the promise. Because Peterson failed to obtain the signatures, the Woodmansees had to pay the co-owners $100,000 per acre and Peterson $135,000 per acre for their interests in Parcel 3.
Peterson argues that the third element of promissory estoppel is missing because the Woodmansees did not change their position. He states that the Woodmansees knew that Peterson had been lying to them when they executed the third PSA. He also states that the Woodmansees "bought the partners' property knowing that they were not going to reach an agreement with Peterson for the purchase of his interest in Parcel 3. " But, the relevant change in position relates to the execution of the original PSA, not the third PSA, so this information does not require a different result.
Peterson implies that the Woodmansees' change in position was the loss of a future expectancy and not actionable. He cites Flower v. T.R.A. Industries, Inc. and Shah v. Allstate Insurance Co. in support. In Flower, the court held that there was promissory estoppel and did not discuss future expectancies. Shah involved negligence, negligent misrepresentation and violations of the Consumer Protection Act, but did not address promissory estoppel or breach of contract. Therefore, neither case is persuasive.
127 Wn. App. 13, 111 P.3d 1192 (2005).
130 Wn. App. 74, 121 P.3d 1204 (2005).
Flower, 127 Wn. App. at 31.
Shah, 130 Wn. App. at 77.
Peterson argues that the trial court erred in awarding damages on the sale of his interest in Parcel 3 because "[d]amages are not available where the contract never existed." He claims that there can be no damages because he had no contractual duty to sell his interest to the Woodmansees. Under contract law, that would be true. But, the trial court did not find there was a contract. Rather, it found Peterson liable under promissory estoppel, which is only available where there is no contract. Therefore, Peterson's reliance on Hedges v. Hurd and Schweiter v. Halsey is misplaced because neither involved claims of promissory estoppel.
Spectrum Glass Co., Inc. v. Public Utility Dist. No. 1 of Snohomish County, 129 Wn. App. 303, 317, 119 P.3d 854 (2005) (citing Klinke, 94 Wn.2d at 261 n. 4).
47 Wn.2d 683, 289 P.2d 706 (1955) (action for breach of contract).
57 Wn.2d 707, 359 P.2d 821 (1961) (action for a declaration of the rights and duties of the parties under an earnest-money agreement).
Peterson also argues that this court's previous decision forbids a claim for promissory estoppel because the court would have awarded specific performance of the sale of Parcel 3 if promissory estoppel had been available. His argument confuses breach of contract and promissory estoppel. Moreover, we expressly declined to address any issues other than specific performance and attorney fees in that review. That left to the trial court the questions now before us in this second review.
Finally, Peterson argues that the statute of frauds precludes use of promissory estoppel because the PSA was an agreement for the sale of land and therefore was required to be in writing. Washington law does not recognize promissory estoppel as relief where there is a statute of frauds issue. But, Peterson's promise was not that he would sell Parcel 3, but that he would obtain the co-owners' signatures. This promise was not required to be in writing under the statute of frauds. The cases cited by Peterson are not persuasive because they involved contracts required to be in writing under the statute of frauds, which is distinguishable from the promise at issue here.
25 David K. DeWolf Keller W. Allen, Washington Practice: Contract Law and Practice § 6:2, at 181 (2d ed. 2007) (citing Greaves v. Medical Imaging Systems, Inc., 124 Wn.2d 389, 879 P.2d 276 (1994)).
Lige Dickson Co. v. Union Oil Co. of Cal., 96 Wn.2d 291, 635 P.2d 103 (1981) (oral agreement for sale of goods for more than $500); Greaves, 124 Wn.2d at 395-97 (employment contract to be performed over more than one year); Firth v. Lu, 103 Wn. App. 267, 12 P.3d 618 (2000), rev'd, 146 Wn.2d 608, 49 P.3d 117 (2002) (purchase of shares in cooperative apartment unit was an interest in real property); Pacific Cascade Corp. v. Nimmer, 25 Wn. App. 552, 608 P.2d 266 (1980) (lease of an interest in real estate).
PREJUDGMENT INTEREST
Peterson argues that the court abused its discretion in awarding prejudgment interest to the Woodmansees on damages they incurred on the sale of Peterson's interest in Parcel 3. The Woodmansees cross-appeal, arguing that the trial court abused its discretion in failing to award prejudgment interest on the damages they incurred on the purchase of the co-owners' interests in Parcel 3. We disagree with Peterson and agree with the Woodmansees.
Prejudgment interest is a remedy designed to "`compensate a party for the loss of use of money to which he was entitled.'" It is awarded as a matter of right when a claim is liquidated. A liquidated claim is one "where the evidence furnishes data which, if believed, makes it possible to compute the amount with exactness, without reliance on opinion or discretion." If the fact finder must exercise discretion as to the measure of damages, the claim is unliquidated, and not entitled to prejudgment interest. A dispute over all or part of the claims does not change the character of the claim from liquidated to unliquidated.
Seattle-First Nat. Bank v. Wash. Ins. Guar. Ass'n, 94 Wn. App. 744, 759, 972 P.2d 1282 (1999) (quoting Jones v. Best, 134 Wn.2d 232, 242, 950 P.2d 1 (1998)).
Dautel v. Heritage Home Center, Inc., 89 Wn. App. 148, 153, 948 P.2d 397 (1997).
King County v. Puget Sound Power Light Co., 70 Wn. App. 58, 61, 852 P.2d 313 (1993) (citing Prier v. Refrigeration Eng'g Co., 74 Wn.2d 25, 32, 442 P.2d 621 (1968)).
Car Wash Enter., Inc. v. Kampanos, 74 Wn. App. 537, 549, 874 P.2d 868 (1994).
Prier, 74 Wn.2d at 33.
A trial court's award of prejudgment interest is reviewed for an abuse of discretion. "When it takes a view no reasonable person would take, or applies the wrong legal standard to an issue, a trial court abuses its discretion."
Scoccolo Constr., Inc. ex rel. Curb One, Inc. v. City of Renton, 158 Wn.2d 506, 519, 145 P.3d 371 (2006).
Cox v. Spangler, 141 Wn.2d 431, 439, 5 P.3d 1265 (2000) (citing State v. Castellanos, 132 Wn.2d 94, 97, 935 P.2d 1353 (1997)).
Here, the damages due to the Woodmansees were determinable by reference to the original PSA and the actual amounts the Woodmansees paid Hillman, Peterson, and the Sherons for their interests in Parcel 3. Computation of the difference in these amounts required no opinion or discretion. Therefore, the damages were liquidated.
The real issue on appeal is whether the Woodmansees are entitled to prejudgment interest on the damages because they were wrongfully denied use of the money due to Peterson's wrongful actions. We conclude that they were.
In the judgment, the trial court held:
The Woodmansees' motion for an award of prejudgment interest on their purchase of the Parcel 3 interests of Sherons and Hillman should be denied, because Robert Peterson never had use of any of the funds paid by Woodmansees to Sherons and Hillman. . . .
Clerk's Papers at 2661.
The court explained that the award of prejudgment interest was not warranted because "it is the retention by defendant of money that should have been paid to the plaintiffs that triggers a defendant's liability for prejudgment interest." Because Peterson never retained the sums paid for the co-owners' interests in Parcel 3, the court concluded prejudgment interest was improper.
Clerk's Papers at 2661 (emphasis added).
This case is controlled by Forbes v. American Building Maintenance Co. West. After the briefs in this case were filed, the supreme court clarified the law on this point. There, the plaintiff disputed attorneys fees owed to her former attorney in a suit against American Building Maintenance. The disputed fees were deposited into the court registry. While the funds were held in the registry, the plaintiff directed them to be deposited into an interest-bearing account of her choice. The trial court held that the attorney was entitled to the fees and awarded pre-judgment interest on the total amount. The plaintiff argued that she should not be liable for pre-judgment interest because she could not obtain access to the funds while they were in the registry and, therefore, did not have "use" of them. The supreme court disagreed, holding "prejudgment interest may be awarded not only when one party has improperly used the funds, but also when one party is improperly deprived of those funds. "
___ Wn.2d ___, 240 P.3d 790 (2010).
Id. at 794.
Id. at 794. (emphasis added)
Here, the trial court applied the wrong legal standard to the facts. The court relied on Grays Harbor County v. Bay City Lumber Co., Prier v. Refrigeration Engineering Co., Hansen v. Rothaus, Mahler v. Szucs, and Crest Inc. v. Costco Wholesale Corp. Each case is either distinguishable or supports an award of prejudgment interest.
47 Wn.2d 879, 891, 289 P.2d 975 (1955).
74 Wn.2d 25, 34, 442 P.2d 621 (1968).
107 Wn.2d 468, 473, 730 P.2d 662 (1986).
135 Wn.2d 398, 429-30, 957 P.2d 632 (1998).
128 Wn. App. 760, 775, 115 P.3d 349 (2005).
In Hansen, the supreme court considered whether damages in a negligence action could be liquidated for the purpose of awarding pre-judgment interest. It held that the damages applied equally to tort and contract claims. It stated: "[t]he plaintiff should be compensated for the `use value' of the money representing his damages for the period of time from his loss to the date of judgment." This language supports prejudgment interest here because the Woodmansees should be compensated for their loss of the "use value" of the excess money paid to the co-owners.
Hansen, 107 Wn.2d at 473.
Id. at 475.
Id. at 473 (citing Mall Tool Co. v. Far West Equip. Co., 45 Wn.2d 158, 177, 273 P.2d 652 (1954)).
In Grays Harbor County, the court awarded pre-judgment interest on the value of property destroyed while in the defendant's possession. The opinion does not consider whether interest would be properly awarded if the property had been in the possession of someone other than the defendant. Therefore, it does not require a denial of prejudgment interest to the Woodmansees.
Grays Harbor County, 47 Wn.2d at 891.
In Prier, the supreme court considered whether the damages suffered by the plaintiff were liquidated. Quoting Laycock v. Parker, the court explained that "he who retains money which he ought to pay to another should be charged interest upon it." But, there was no issue regarding who actually retained use of the funds in that case. Therefore, it is not persuasive.
Prier, 74 Wn.2d at 35.
103 Wis. 161, 79 N.W. 327 (1899).
Prier, 74 Wn.2d at 34.
Id. at 34.
In Mahler, the plaintiff was involved in a car accident and received an advance reimbursement for damages from her insurance company. The funds were kept in her attorney's trust account. Upon settlement, the court determined that Mahler was entitled to a credit on the amount she had to return to the insurance company for the advance. The supreme court determined that she was not entitled to pre-judgment interest because her attorney had the money in his trust account so she was not disgorged of its use value.
Mahler, 135 Wn.2d at 405-06.
Id. at 406-07.
Id. at 407-08.
Id. at 430.
The touchstone for an award of prejudgment interest is that a party must have the "use value" of the money improperly. In effect, an award of prejudgment interest compels a party that wrongfully holds money to disgorge the benefit.
Id. at 429-30 (emphasis added) (citing Hansen, 107 Wn.2d at 473).
But, the court merely intended to distinguish between a plaintiff that retains the "use value" of her money and one who loses it because another party wrongfully retains it. Here, the Woodmansees did not retain the "use value" of their money because it was held by the co-owners. Therefore, Mahler is distinguishable and does not require a denial of prejudgment interest here.
In Crest, the trial court awarded prejudgment interest to the plaintiff. The appellate court explained that the defendant could have tolled prejudgment interest by depositing the funds in the court's registry. It held that the trial court did not abuse its discretion in awarding prejudgment interest and explained the remedy's rationale:
Crest, 128 Wn. App. at 775-76.
Id.
Prejudgment interest is a make-whole remedy which is grounded in the "`sense of justice in the business community . . . that he who retains money which he ought to pay to another should be charged interest on it. '" The touchstone for an award of prejudgment interest is that a party must have the use value of the money withheld.
Id. at 775 (citing Colonial Imports v. Carlton Northwest, Inc., 83 Wn. App. 229, 242, 921 P.2d 575 (1996) (quoting 5 A. Corbin, Contracts § 1046 n. 69 (1964) (citing Laycock, 103 Wis. at 161) (emphasis added))).
Despite the explanatory language used by the court, that case does not require a different result here. The benefit of depositing money into the court registry is that interest accrues and is eventually paid to the prevailing party. If the plaintiff prevails, she is compensated for the "use value" of the money by virtue of receiving the interest. The language above simply illustrates this point and does not require that the defendant actually retain the money in order for the plaintiff to receive prejudgment interest.
Based upon these cases, the trial court abused its discretion in denying prejudgment interest on the excess money paid to the co-owners because the Woodmansees lost the "use value" of the funds. It is immaterial who retained the money. Because the damages incurred were liquidated, the Woodmansees are entitled to prejudgment interest on the entire amount.
Peterson argues that the damages were not liquidated. He relies on King Aircraft Sales, Inc. v. Lane, State of Washington Department of Corrections v. Fluor Daniel, Inc., Lakes v. von der Mehden, and Maryhill Museum of Fine Arts v. Emil's Concrete Construction Co. Each is distinguishable. In King, the damages included estimates of manufacturing and replacement costs and "potential" sales prices that the plaintiff would have received, all of which required discretion to determine. In Fluor Daniel, the court considered whether damages determined in arbitration were liquidated and could be the basis for prejudgment interest. In Lakes, the court considered whether a defendant's stipulation to the reasonableness of expenses incurred by the plaintiff rendered them liquidated. In Maryhill Museum, the court exercised its discretion in determining the cost of repairs because the costs were disputed by the parties. In contrast, here the parties do not dispute either the price per acre in the original PSA or the actual price per acre eventually paid by the Woodmansees. Therefore, these cases do not require a different result.
68 Wn. App. 706, 846 P.2d 550 (1993).
160 Wn.2d 786, 161 P.3d 372 (2007).
117 Wn. App. 212, 70 P.3d 154 (2003).
50 Wn. App. 895, 901, 751 P.2d 866 (1988).
King, 68 Wn. App. at 721-22.
Fluor Daniel, 160 Wn.2d at 791.
Lakes, 117 Wn. App. at 217.
Maryhill Museum, 50 Wn. App. at 902.
ATTORNEY FEES
The Woodmansees argue that the trial court erred by failing to award them attorney fees at trial. Additionally, they argue that they are entitled to attorney fees on appeal. We agree with both contentions.
Washington allows parties to recover attorney fees under a statute, contract, or some well-recognized principle of equity. Attorney fees on appeal are authorized under RAP 18.1 if applicable law grants a party the right to recover attorney fees. RCW 4.84.330 permits recovery of attorney fees:
Torgerson v. One Lincoln Tower, LLC, 166 Wn.2d 510, 525, 210 P.3d 318 (2009) (citing Quality Food Ctrs. v. Mary Jewell T, LLC, 134 Wn. App. 814, 817, 142 P.3d 206 (2006)).
RAP 18.1(a).
In any action on a contract . . . where such contract . . . specifically provides that attorney's fees and costs, which are incurred to enforce the provisions of such contract . . ., shall be awarded to one of the parties, the prevailing party, whether he is the party specified in the contract . . . or not, shall be entitled to reasonable attorney's fees in addition to costs and necessary disbursements.
Whether a party is entitled to attorney fees is a question of law reviewed de novo.
Sanders v. State, ___ Wn.2d ___, 240 P.3d 120, 140 (2010) (citing Spokane Research Defense Fund v. City of Spokane, 155 Wn.2d 89, 103-04, 117 P.3d 1117 (2005)).
In Hudson v. Condon, the Hudsons contested an award of attorney fees to the Condons in a claim for breach of fiduciary duty, breach of a lease and partnership agreement, and reformation of a lease. The appellate court upheld the award because the underlying partnership agreement provided for fees and costs expended in litigation "related" to the partnership. Explaining that there were no issues separate from the agreement or the lease in the lawsuit, the court held that all of the claims related to the agreement and attorney fees under the contract were therefore proper.
101 Wn. App. 866, 6 P.3d 615 (2000).
Id. at 868, 877.
Id. at 877.
Id. at 877-78.
Here, the original PSA, signed by Peterson, included the following provision for attorney fees:
Attorneys' Fees. If Buyer or Seller institutes suit against the other concerning this Agreement , the prevailing party is entitled to reasonable attorneys' fees and expenses.
Ex. 5 at 3 (second emphasis added).
The claims here arose from Peterson's wrongful actions during the execution of the PSA and "concerned" the agreement under the language of the attorney fee provision. The lawsuit does not address any issues separate from the PSA. Therefore, consistent with Hudson, the Woodmansees are entitled to attorney fees. Further, because the law allows recovery of fees at trial, attorney fees on appeal are also available and should be granted.
Peterson argues that Boguch v. Landover Corp, Hemenway v. Miller, Burns v. McClinton, and G.W. Construction Corp. v. Professional Services Industries, Inc. require a different result. We disagree. G.W. Construction Corp. distinguished between actions in tort and contract in order to resolve whether the statute of limitations applied. It did not discuss attorney fees. The agreements in Boguch, Hemenway, and Burns allowed attorney fees only for claims to enforce a provision of the contract. Furthermore, Burns cites and distinguishes Hudson because it involved a broad attorney fee provision. Because the fee provision at issue here was not limited to claims to enforce a provision of the contract, these cases are distinguishable.
153 Wn. App. 595, 224 P.3d 795 (2009).
116 Wn.2d 725, 807 P.2d 863 (1991).
135 Wn. App. 285, 143 P.3d 630 (2006).
70 Wn. App. 360, 853 P.2d 484 (1993).
Id. at 366.
Boguch, 153 Wn. App. at 607; Hemenway, 116 Wn.2d at 742; Burns, 135 Wn. App. at 309.
Burns, 135 Wn. App. at 309.
Peterson also argues that attorney fees cannot be based on the provision in the original PSA because it was held unenforceable. But, in Herzog Aluminum, Inc. v. General American Window Corp., this court held that attorney fees are awardable under RCW 4.84.330 even though the underlying contract is held to be unenforceable. Therefore, Peterson's argument fails.
39 Wn. App. 188, 692 P.2d 867 (1984).
Id. at 189-90.
We affirm the judgment in favor of the Woodmansees against Peterson, reverse the failure to award prejudgment interest and attorney fees to the Woodmansees, and remand for further proceedings consistent with this opinion, including a determination of fees on appeal pursuant to RAP 18.1.
WE CONCUR: