Hindman Constr. v. Boos

• Decision Date: 13 February 2023
• Docket Number: 83802-4-I
• Parties: HINDMAN CONSTRUCTION, INC., a Washington corporation, Appellant, v. GREG BOOS, an individual, and LAI LAI CHAN, an individual, Respondents, WHATCOM EDUCATIONAL CREDIT UNION, a Washington non-profit banking institution, Defendant.
• Court: Court of Appeals of Washington

1

HINDMAN CONSTRUCTION, INC., a Washington corporation, Appellant, v. GREG BOOS, an individual, and LAI LAI CHAN, an individual, Respondents, WHATCOM EDUCATIONAL CREDIT UNION, a Washington non-profit banking institution, Defendant.

No. 83802-4-I

Court of Appeals of Washington, Division 1

February 13, 2023

UNPUBLISHED OPINION

SMITH A.C.J.

Hindman Construction contracted with Greg Boos and Lai Lai Chan in July 2018 for Hindman to renovate Boos's^[1] home. Throughout the renovation, Boos suspected that Hindman was overcharging them and requested to see back-up receipts and invoices. Hindman did not provide any. After Hindman issued its final invoice, Boos refused to pay. Hindman then recorded a lien on Boos's house and sought to enforce it. Hindman sued to enforce the lien and for breach of contract, unjust enrichment, and recovery in quantum meruit. Boos brought successive motions for summary judgment seeking to dismiss Hindman's claims, which were granted, and Hindman appeals. Because material issues of fact exist as to the contract claim, we reverse dismissal of the contract claim and lien claim, but we affirm the dismissal of the equitable claims. We also reverse the award of attorney fees.

FACTS

Hindman Construction and Greg Boos and Lai Lai Chan entered into a construction contract in July 2018 for Hindman to renovate Boos's home in Bellingham. Several provisions of the contract are relevant to this appeal.

Article 4

Article 4 covers construction progress and final payments. It states:

[T]he Owners shall not . . . occupy or use the Contractor's work until and unless the Contractor shall have been first provided the signed and written punch list if any.

Article 7

Article 7 concerns the owners' responsibilities, including when and how the owners can reoccupy the house. It states:

OCCUPANCY: Owners shall not occupy nor be placed in possession nor will the Contractor deliver full or partial possession to the Owners until the building department of authority has approved the construction and issued an occupancy permit, and the Contractor has been paid in full, including all changes or additions ordered.

Article 11

Article 11 governs changes to the contract and construction plans. These change requests are called change orders. It sets out how change orders are submitted and states that any additional charges will be added to the contract price. It also states:

All change requests will be submitted in writing upon individual request. Scanned transmissions are acceptable. Verbal requests for changes are binding under this contract.... Owners and Contractor may acknowledge one change order in writing after it has been verbally authorized. The additional charge will be added to the contract price.

All change orders shall be incorporated in, and become a part of the contract. ... Change Orders may affect the completion date of the project.

Article 13 Article 13 covers warranty. It provides:

Contractor warrants all work for a period of one-year following the date of substantial completion or date of occupancy, whichever occurs first. Contractor will determine date of completion.

Article 13 also provides that:

Any claim or cause of action arising out of the terms of the contract, including this warranty, must be filed in a court of competent jurisdiction within 14 days following expiration of the warranty period. Any cause of action based upon breach of contract or warranty, which is not so filed, is waived.

Article 14

Article 14 addresses disputes and remedies. It states:

If a dispute should arise between the parties, the parties shall promptly meet and attempt in good faith to resolve it. Openness, calm and good faith are required of both parties. Any unsettled disputes between the parties shall be decided by an action filed in an appropriate court of jurisdiction unless the parties mutually agree otherwise.... In the event a dispute or lawsuit arises and one or both parties seek and receive the assistance of legal counsel, the prevailing party shall be paid its attorneys' fees and costs by the non-prevailing party.

Hindman began work on Boos's house in July 2018. Boos paid Hindman according to the contract and paid most of the originally estimated price by April 2019. Over the course of the renovation, Boos requested several change orders to the original plans. The change orders were not well documented and Hindman did not request that the orders be requested or issued in writing. In lieu of issuing written change orders, Hindman issued monthly invoices to Boos that reflected work completed, including any work requested by change order.

Boos claimed they discovered in reviewing an invoice that Hindman had significantly overcharged for the work. Boos also asserted that Hindman refused to produce supporting receipts when asked about the invoice. According to Boos, the parties decided in April 2019 that Hindman would not charge Boos more than $58,415.27 for the work remaining.^[2] Hindman disputes that it agreed to convert the contract into a "lump-sum project." Boos moved back into the house in June 2019 following a final inspection by the city of Bellingham.

Hindman subsequently issued an invoice in June for $87,590.68 and another, final invoice in August for $5,332.22. Boos did not pay. In December 2019, Hindman filed a lien against the property with the Whatcom County Auditor's office for the money owed. Boos claimed that after the project ended, they performed an accounting of all Hindman's invoices and discovered significant overcharges.

Discussions to resolve the payment dispute broke down in mid-2020 and Hindman initiated a lawsuit in August 2020 to foreclose its lien, claiming breach of contract, unjust enrichment, and seeking recovery in quantum meruit.

Hindman claimed that Boos "strung [him] along for many months" and abruptly ended negotiations. Boos denied all of Hindman's claims.

Boos moved for summary judgment, asserting that Hindman's claims were time barred by the claims limitation period set out in the contract. The trial court granted Boos's motion as to the contract claim, but denied it as to the other claims. Boos then moved for partial summary judgment to dismiss Hindman's equitable claims, which the trial court granted. Finally, Boos moved for summary judgment to dismiss Hindman's lien claim, asserting that it could not survive without the contract claim. The court granted the motion. Several months later, Boos moved for attorney fees and costs, which the court granted. Hindman appeals.^[3]

ANALYSIS

On appeal, Hindman assigns error to the trial court's grant of summary judgment as to Hindman's contract claim equitable claims, and lien foreclosure claim. It also assigns error to the trial court's attorney fees award. We conclude that the trial court erred in granting summary judgment as to the contract claim, but did not err in granting summary judgment as to the equitable claims. Because the lien foreclosure claim is inextricably intertwined with the contract claim, we conclude that summary judgment on the lien claim was premature.

Finally, as neither party has yet prevailed, we conclude that an award of attorney fees is premature.

Standard of Review

We review orders granting summary judgment de novo and conduct the same inquiry as the trial court, considering the facts and all reasonable inferences in the light most favorable to the nonmoving party. Lakey v. Puget Sound Energy 176 Wn.2d 909, 922, 296 P.3d 860 (2013). Summary judgment is appropriate only when "there is no genuine issue as to any material fact" and "the moving party is entitled to a judgment as a matter of law." CR 56(c). A "material fact" is one on which the outcome of the litigation depends in whole or in part. Boguch v. Landover Corp., 153 Wn.App. 595, 608, 224 P.3d 795 (2009). And" '[a] genuine issue of material fact exists when reasonable minds could differ on the facts controlling the outcome of the litigation.'" Ehrhart v. King County, 195 Wn.2d 388, 409, 460 P.3d 612 (2020) (quoting Dowler v. Clover Park Sch. Dist. No. 400, 172 Wn.2d 471,484, 258 P.3d 676 (2011)).

When the defendant is the party moving for summary judgment, the defendant bears the initial burden of demonstrating an absence of a genuine issue of material fact. Burton v. Twin Commander Aircraft LLC, 171 Wn.2d 204, 222, 254 P.3d 778 (2011). If the defendant succeeds in making this initial showing, the burden then shifts to the plaintiff. Burton, 171 Wn.2d at 222-23. "The defendant's motion will be granted if the plaintiff fails to present evidence 'sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.'" Kosovan v. Omni Ins. Co., 19 Wn.App. 2d 668, 680, 496 P.3d 347 (2021) (some internal quotation marks omitted) (quoting Burton, 171 Wn.2d at 223).

1. Dismissal of Contract Claim

We are presented with four issues concerning Hindman's breach of contract claim. First, whether the statute of limitations in article 13 of the contract applies to all claims arising out of the contract or solely to warranty claims. Second, whether the COVID-19^[4] pandemic is grounds to determine that the claims limitation period should be equitably tolled. Third whether the claim limitation period is unconscionable and, therefore, unenforceable under Tadych v. Noble Ridge Construction, Inc., No. 100049-9 (Wash. Oct. 27, 2022), https://www.courts. wa.gov/opinions/pdf/1000499.pdf. And fourth, if the limitation is not unconscionable, whether an issue of material fact exists concerning when the statute of limitation is triggered. We conclude the trial court correctly decided that article 13's claim limitation period applies to all claims arising out of the contract, that ...