Jacob's Meadow Owners Ass'n v. Plateau 44

Decision Date23 July 2007
Docket NumberNo. 57543-1-I.,No. 57649-6-I.,57543-1-I.,57649-6-I.
Citation162 P.3d 1153,139 Wn. App. 743
CourtWashington Court of Appeals
PartiesJACOB'S MEADOW OWNERS ASSOCIATION, a Washington non-profit corporation, Plaintiff, v. PLATEAU 44 II, LLC, a Washington limited liability company; Gottlieb Plateau 44 II, LLC, a Washington limited liability company; MMR Holding Company (f/k/a MacDonald Miller Residential, Inc.), a Washington corporation; Uponor Canada, Inc. (f/k/a Plasco Manufacturing Corporation), a Canadian corporation and John and Mary Does, one through two-hundred, Defendants. SSB, LLC, Appellant, Alpine Industries, Inc., a Washington corporation, doing business as Alpine Windows; America 1st Roofing & Builders, Inc., a Washington corporation; J. Briere Construction, Inc., a Washington corporation; Burton Landscape Group, Inc., a Washington corporation; C & P Paint, LLC, a Washington limited liability company; J-S Contracting, Inc., a Washington corporation; Precision Drywall, Inc., a Washington corporation; SDS Construction, Inc., a Washington corporation; The Concrete Way, Inc., a Washington corporation, Defendants, S.C. Visions, Inc., a Washington corporation; Respondent.

Earl Maier Sutherland, Terry Jay Price, Reed McClure, Seattle, WA, for Appellant.

Stephen Murray Todd, Sommer Baldwin Dykema, Todd & Wakefield, Eileen I. McKillop, Oles Morrison Rinker & Baker LLP, Seattle, WA, for Appellant/Respondent.

Heather Sharon Cohen, Marderosian Runyon Cercone Lehman Armo, Seattle, WA, for Respondent.

DWYER, J.

¶ 1 SSB, LLC, was the general contractor on the construction of the Jacob's Meadow Condominiums in Issaquah. S.C. Visions, Inc., a subcontractor on the construction project, was responsible for the installation of vinyl siding. After the developer of the condominiums sued SSB for damages caused by construction defects, SSB filed a complaint against S.C. Visions asserting claims for breach of contract and contractual indemnity. The trial court granted partial summary judgment to S.C. Visions, dismissing SSB's breach of contract claim. After trial, the jury found that S.C. Visions had a contractual duty to indemnify SSB for a portion of the settlement payment made to the developer on SSB's behalf, and the trial court entered judgment awarding SSB that amount. SSB then moved for an award of attorney fees and costs. The trial court awarded SSB the attorney fees and costs it incurred both in litigating its claim against S.C. Visions and in defending against the developer's claim.

¶ 2 S.C. Visions appeals, contending on several bases that the trial court erred both by entering judgment in favor of SSB and by awarding SSB attorney fees and costs. SSB cross-appeals, contending that the trial court erred by dismissing its breach of contract claim on summary judgment.

¶ 3 We hold that the trial court erred both by dismissing SSB's breach of contract claim and by awarding SSB those attorney fees incurred in defending against the developer's claim. Accordingly, we reverse and remand this matter to the trial court for further proceedings consistent with this opinion. We affirm the decisions of the trial court and the judgment entered on the jury's verdict in all other challenged respects.

FACTS

¶ 4 SSB was the general contractor on the construction of the Jacob's Meadow Condominiums in Issaquah. S.C. Visions was the subcontractor responsible for the installation of vinyl siding. Construction was completed in 2001. In April 2004, S.C. Visions was administratively dissolved by the Secretary of State. In June 2004, the Jacob's Meadow Owners Association filed a complaint against the developer of the condominiums, alleging numerous construction defects. The developer then filed a complaint against SSB. In December 2004, SSB filed a complaint against ten subcontractors, including S.C. Visions, asserting claims for breach of contract and contractual indemnity. Eventually, the developer settled with both the Jacob's Meadow Owners Association and SSB. SSB's settlement payment to the developer was made by SSB's insurer, Ohio Casualty Insurance Company. SSB subsequently settled with all subcontractors against which it had filed suit except S.C. Visions.

¶ 5 Before trial, S.C. Visions filed a motion for summary judgment seeking dismissal of SSB's breach of contract claim, asserting that SSB was unable to establish that it suffered damages sufficient to support the claim. The trial court granted the motion. SSB filed two subsequent motions for reconsideration, both of which were denied by the trial court. S.C. Visions also filed a motion for summary judgment contending that its corporate dissolution barred SSB's claims. The trial court denied this motion. S.C. Visions filed additional motions to exclude the testimony of Stacey Grund, an expert witness for SSB, and to exclude evidence of the indemnity claim. The trial court denied both motions.

¶ 6 Trial commenced on November 14, 2005. At the conclusion of SSB's case, S.C. Visions moved for judgment as a matter of law, contending that SSB lacked standing to seek indemnity from S.C. Visions for a portion of the settlement paid by SSB's insurer, and arguing that SSB had not offered evidence sufficient to prove that a written contract containing an indemnity provision existed between the parties. The trial court denied the motion.

¶ 7 In December 2005, the jury returned a verdict finding that S.C. Visions had a written contract with SSB that included an agreement by S.C. Visions to indemnify SSB. The jury further found that SSB was entitled to $779,392.00 pursuant to that agreement, representing a portion of the settlement paid by Ohio Casualty on SSB's behalf.

¶ 8 S.C. Visions then filed a motion for judgment notwithstanding the verdict, again arguing that SSB did not have standing to seek indemnification for a portion of the settlement amount. The trial court denied the motion.

¶ 9 After the verdict was rendered, SSB filed a petition for an award of attorney fees and costs. The trial court awarded SSB $328,651.32 in attorney fees and costs, representing the fees and costs incurred by SSB in litigating its claim against S.C. Visions as well as the fees and costs incurred by SSB in defending against the claim of the developer. The trial court then entered an amended judgment in favor of SSB in the amount of $1,108,043.32.

¶ 10 Both parties now seek relief on appeal. We hold that the trial court erred by dismissing SSB's breach of contract claim. The record contains evidence sufficient to demonstrate the existence of a genuine issue of material fact regarding damages suffered by SSB as a result of S.C. Visions' alleged breach of contract. Such evidence was, therefore, sufficient to overcome S.C. Visions' motion for summary judgment. We further hold that the trial court erred by awarding SSB the attorney fees it incurred in defending against the developer's claim. Such fees are an element of the damages to which SSB is entitled pursuant to S.C. Visions' duty to indemnify SSB, the measure of which must be determined by the trier of fact, in this case the jury. Accordingly, we reverse and remand this matter to the trial court for proceedings consistent with this opinion. We affirm the decisions of the trial court and the judgment entered on the jury's verdict in all other challenged respects.

DISCUSSION
Summary Judgment: Breach of Contract Claim

¶ 11 SSB contends that the trial court erred by dismissing its breach of contract claim, asserting that the evidence presented to and considered by the trial court on SSB's motion for reconsideration was sufficient to demonstrate the existence of a disputed issue of material fact and, therefore, overcome S.C. Visions' motion for summary judgment. We agree.1

¶ 12 The facts relevant to our resolution of this issue are as follows. S.C. Visions' motion for summary judgment asserted that SSB could not establish that it suffered damages sufficient to support its breach of contract claim. SSB's response to the motion asserted that "there is presently sufficient evidence in the record establishing SC Visions' breach of contract." SSB, however, neither indicated specifically what damages were suffered as a result of the alleged breach nor provided any evidence of the damages suffered. Accordingly, the trial court granted the motion for summary judgment, thereby dismissing SSB's breach of contract claim.

¶ 13 SSB then filed a motion for reconsideration pursuant to CR 59.2 Therein, SSB asserted that S.C. Visions had breached a provision in a written agreement between the parties which obligated S.C. Visions to install the vinyl siding "in accordance with applicable codes and ordinances." SSB further asserted that it had incurred damages as a result of S.C. Visions' breach, representing that portion of the settlement amount paid on behalf of SSB to the developer for the removal and replacement of the vinyl siding installed by S.C. Visions.

¶ 14 In conjunction with the motion for reconsideration, SSB submitted declarations by two experts asserting that S.C. Visions' work was not in compliance with building codes, as required by the cited provision in the agreement between the parties, and that SSB was damaged in an amount representing the cost of removing and replacing the vinyl siding. SSB also submitted a declaration by its counsel, asserting that SSB had made a settlement payment to the developer representing, in part, the replacement cost of the vinyl siding. Attached to those declarations were the settlement agreement entered into between the developer and SSB, the cost-estimate for the repair of the vinyl siding, and the agreement containing the provision alleged to have been breached by S.C. Visions.

¶ 15 The trial court denied SSB's motion for reconsideration, again stating that SSB had not provided evidence of damages sufficient to survive a motion for summary judgment. CP 3227. The trial court did not indicate whether it had considered...

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