Deep Water Brewing, LLC v. Fairway Res., Ltd.

• Decision Date: 09 August 2012
• Docket Number: No. 30064–1–III.
• Citation: Deep Water Brewing, LLC v. Fairway Res., Ltd., 282 P.3d 146 (Wash. App. 2012)
• Parties: DEEP WATER BREWING, LLC; a Washington limited liability corporation; Robert D. Kenagy and Roberta D. Kenagy, husband and wife and the marital community composed thereof, Respondents and Cross Appellants, v. FAIRWAY RESOURCES, LIMITED; a Washington limited liability corporation; Michael Taylor and Patricia Taylor, and the marital community composed thereof; and John Does 2–42, Defendants, Jack A. Johnson and Jane Doe Johnson, husband and wife and the marital community composed thereof; Key Development Corporation, a Washington corporation; and Key Bay Homeowners' Association, a Washington nonprofit corporation, Appellants.
• Court: Washington Court of Appeals

282 P.3d 146

DEEP WATER BREWING, LLC; a Washington limitedliability corporation; Robert D. Kenagy and Roberta D. Kenagy, husband and wife and the marital community composed thereof, Respondents and Cross Appellants,

v.FAIRWAY RESOURCES, LIMITED; a Washington limitedliability corporation; Michael Taylor and Patricia Taylor, and the marital community composed thereof; and John Does 2–42, Defendants,Jack A. Johnson and Jane Doe Johnson, husband and wife and the marital community composed thereof; Key Development Corporation, a Washington corporation; and Key Bay Homeowners' Association, a Washington nonprofit corporation, Appellants.

No. 30064–1–III.

Court of Appeals of Washington, Division 3.

Aug. 9, 2012.

Stephan E. Todd, Attorney at Law, Mill Creek, WA, Robert Brian Jackson, Attorney at Law, Woodinville, WA, for Appellants.

Paul S. Kube, Julie Katherine Norton, Ogden Murphy Wallace PLLC, Wenatchee, WA, E. Ross Farr, Ogden Murphy Wallace, PLLC, Seattle, WA, for Respondents and Cross Appellants.

KORSMO, C.J.

¶ 1 This appeal concerns the interest on an attorney fees award that was paid following the first appeal of this case.We conclude that (1) absent express limitation or direction, an appellate remand does not limit a trial court's existing original discretion to set an attorney fees award and (2) an opinion remanding a case must be read in its entirety.As a result, we reverse the trial court in part, affirm on the cross-appeal, and deny further attorney fees.

PROCEDURAL HISTORY

¶ 2 This is the second time this case has been before this court.In the previous appeal, we affirmed a judgment in favor of Deep Water Brewing, LLC, and Robert and Roberta Kenagy(collectively Deep Water).Deep Water Brewing, LLC v. Fairway Resources Ltd.,152 Wash.App. 229, 215 P.3d 990(2009), review denied,168 Wash.2d 1024, 230 P.3d 1038(2010).The trial court had also awarded attorney fees of $243,000 and costs of $35,000.Because that award was inadequately documented, this court remanded “for the entry of appropriate findings of fact and conclusions of law to support the award of fees and costs attributable to the Kenagys' claims related to securing a successful recovery.”Id. at 285, 215 P.3d 990.

¶ 3 Once the Supreme Court denied review, the defendants, Fairway Resources, Ltd., Jack Johnson, Key Development Corp., and Key Bay Homeowners' Association(hereafter Fairway), sought to use their supersedeas bond to pay the judgment.Deep Water opposed the effort, but the trial court ultimately permitted it.The judgment was paid, including the attorney fees and costs, except for the interest on the fees and costs award.

¶ 4The court also addressed the findings necessitated by this court's remand ruling.The trial court expressed that it was not making “new findings” or exercising any discretion.The trial court explained its understanding of the remand order:

The Court of Appeals simply ordered that this court supplement the record to determine whether or not there were sufficient facts to support this Court's original attorney's fee award of $243,000 for fees and $35,000 for costs.

Clerk's Papersat 875.

¶ 5 On April 14, 2011, the trial court issued findings supporting its fees and costs award and calculated interest on the award from the original 2008 judgment date.It declined Deep Water's request to apply a multiplier to the lodestar analysis.The trial court also denied an award of $6,124.00 in attorney fees and costs that Deep Water requested related to its fight over use of the supersedeas bond.The court did award Deep Water just $6,098.00 of the requested $7,443.50 in attorney fees related to the remand period from November 25, 2010 to April 20, 2011.

¶ 6 Fairway timely appealed the interest start date, and Deep Water cross appealed the denial of the additional fees it had requested.

ANALYSIS

¶ 7 The appeal asks us to determine whether the trial court correctly ordered that interest ran from the date of its 2008 judgment rather than its subsequent 2011 order.On cross appeal we are also asked to decide whether the trial court erred in declining to consider Deep Water's request for a 1.5 lodestar multiplier, and whether it likewise erred in declining to award Deep Water additional attorney fees.Both parties request attorney fees on appeal.We address each issue in turn.

Interest

¶ 8 Fairway's appeal challenges the start date for interest contained in the remand ruling and requires us to address two questions: (1) what is the effect of a remand order on a trial court's discretionary authority and (2) how are remand orders interpreted?The answers to those two questions present the ultimate question of whether our remand order in Deep Water prohibited the trial court from altering the attorney fees award if it so desired.We conclude that it did not.

¶ 9 Settled law frames our review of this issue.This court reviews a trial court's award of attorney fees for an abuse of discretion.Mahler v. Szucs,135 Wash.2d 398, 435, 957 P.2d 632(1998).Nevertheless, the trial court must calculate the fees using the lodestar method of analysis, and it must enter findings of fact and conclusions of law supporting its decision to award fees.Id. at 434–35, 957 P.2d 632, Such a record is necessary for an appellate court to review the award.Bentzen v. Demmons,68 Wash.App. 339, 350, 842 P.2d 1015(1993).Where a trial court fails to create the appropriate record, remand for entry of proper findings and conclusions is the appropriate remedy.Mahler,135 Wash.2d at 435, 957 P.2d 632.

¶ 10 Equally settled law governs the question of interest on judgments for attorney fees.The legislature has provided:

In any case where a court is directed on review to enter judgment on a verdict ... is wholly or partly affirmed on review, interest on the judgment or on that portion of the judgment affirmed shall date back to and shall accrue from the date the verdict was rendered.

RCW 4.56.110(4).

¶ 11 Awards that are affirmed on appeal do accrue interest, while those that are reversed do not.Id.;Fisher Props., Inc. v. Arden–Mayfair, Inc.,115 Wash.2d 364, 373, 798 P.2d 799(1990).Where the appellate court has “ ‘reversed the trial court judgment and directed that a new money judgment be entered,’ ” interest will run from the new judgment.Fisher,115 Wash.2d at 373, 798 P.2d 799(quotingFulle v. Boulevard Excavating, Inc.,25 Wash.App. 520, 522, 610 P.2d 387(1980)).Interest will accrue from the date of the original judgment where the appellate court decision“ ‘merely modifies the trial court award and the only action necessary in the trial court is compliance with the mandate.’ ”Id.(quotingFulle,25 Wash.App. at 522, 610 P.2d 387).Thus, in cases that are neither affirmed nor reversed, the issue of postjudgment interest appears to turn largely upon the wording or the effect of the remand order.¹

¶ 12Fisher, while not controlling on these facts, is still an instructive case.There the Supreme Court previously had reversed and remanded portions of a judgment pertaining to attorney fees with directions for the trial court“ ‘to determine what portion of Fisher's attorneys' services would have been provided had only the commissive waste claim been raised, and to award only those fees attributable to’ ” that claim.Id. at 374, 798 P.2d 799(emphasis in original)(quotingFisher Props., Inc. v. Arden–Mayfair, Inc.,106 Wash.2d 826, 850, 726 P.2d 8(1986)).Upon remand, the trial court awarded fees only on the successful claim, but it ordered that interest in the second judgment run from the date of the original judgment.In the second appeal, the Supreme Court held that because its order expressly reversed, remanded, and required new findings and a new judgment, interest on the award of attorney fees must run from the date of the second judgment.Id. at 374–75, 798 P.2d 799.The court also noted that the fact that the trial court awarded the same amount as in its first judgment was irrelevant for purposes of determining whether the trial court had exercised its discretion.Id. at 373, 798 P.2d 799.²

¶ 13 In light of the fact that trial courts have discretion ³ to set the amount of attorney fees, we conclude from Fisher and its progeny that the trial courts retain that discretion on remand unless expressly limited by the appellate courts or the exercise of discretion would be inconsistent with the ruling on appeal.In other words, the question is whether the remand limited the trial court's exercise of its original discretion.The answer to that question determines whether the court entered a new judgment under its own authority or clarified an old judgment in accordance with the remand order.

¶ 14This case was remanded to the trial court for entry of findings and conclusions to support its award of attorney fees.Deep Water,152 Wash.App. at 286, 215 P.3d 990.Deep Water argues that the trial court's authority was limited to a simple explanation of its findings and lacked authority to alter the award.

¶ 15We recognize that part of the issue arises from the somewhat inconsistent language of our remand.The beginning of the opinion stated, “We remand for the court to revisit the attorney fees and for entry of necessary findings and conclusion to support any award of attorney fees and costs.”Deep Water,152 Wash.App. at 238, 215 P.3d 990.This language reads very closely to that used in Fisher, as it orders the trial court to revisit the attorney fees issue.SeeFisher,115 Wash.2d at 374, 798 P.2d 799(holding that use of remand term “determine” required the trial court to enter new findings and exercise discretion rather than simply recalculate).

¶ 16 Yet at the end of our analysis, we simply stated, “We then remand for the entry of appropriate findings of fact and conclusions of law to support the award of fees and costs attributable to the Kenagys' claims related to securing a successful recovery.”Deep Water,152...