Mason v. Mortgage America, Inc.
| Decision Date | 07 June 1990 |
| Docket Number | No. 56353-5,56353-5 |
| Court | Washington Supreme Court |
| Parties | Harold MASON and Alisha Mason, husband and wife, Petitioners, v. MORTGAGE AMERICA, INC., a Washington corporation; American Mobile Homes, a Washington corporation, Respondents, James J. Griffiths and Florine Griffiths, husband and wife, d/b/a Northwest Septic & Excavating; and Contractor's Bonding Insurance Co., a Washington corporation, Washington Contractor's Bond # 614472, Defendants. En Banc |
McCormick, Hoffman, Rees, Faubion, Quinn & Van Buskirk, P.S., David C. Hemmelgarn, Tacoma, for respondents.
This case concerns a dispute regarding the purchase of a mobile home wherein Mr. and Mrs. Mason (the purchasers) sued American Mobile Homes, Inc. (the mobile home seller), Mortgage America, Inc. (the lender) and James J. Griffiths (the site preparation contractor) for breach of contract and violation of the Washington Consumer Protection Act. The trial court awarded actual damages against the seller and lender, treble damages and attorneys' fees under the Consumer Protection Act and ordered conveyance of the purchasers' real estate back to them. The Court of Appeals reversed the trial court's award of actual damages, treble damages and attorneys' fees. The relevant facts are as follows.
In January 1984 the purchasers, having seen seller's advertisements, went to its lot. There, they selected a mobile home and contracted to purchase a "Commodore Comet" mobile home for approximately $34,000. The seller referred the purchasers to the lender, Mortgage America, Inc., for financing. In March 1984 the purchasers entered an agreement with the lender wherein the lender agreed to finance the purchase of the mobile home and the site preparation of the purchasers' land in exchange for a note secured by a deed of trust on the purchasers' real estate. Although the "Agreement" stated that purchasers would grant a deed of trust to secure the obligation, the lender actually had them sign over their property by way of a quitclaim deed.
The lender instructed the purchasers to locate a site preparation contractor by soliciting bids. A bid to perform the work on the land submitted by James J. Griffiths (dba Northwest Septic & Excavating) for $7,725.48 was acceptable to both the purchasers and lender. Lender's agent, Wesley St. Clair, rewrote Mr. Griffiths' bid verbatim and added $800 as a charge to oversee the contractor's work. The work necessary to install the home which was listed in the bid essentially included clearing of the land, construction of a driveway, construction of concrete pads under the mobile home, installation of water lines and construction of a septic system. The bid specifically provided that all stumps and debris were to be piled for burning. The contract between the purchasers and Griffiths, the site preparation contactor, provided for three payments, the first due before work started, the second due after the land was cleared, the pads finished and the curtain drain installed, and the last upon completion.
There ensued a series of complaints by the purchasers concerning the quality and timeliness of the site preparation contractor's work. Instead of being piled to burn, the stumps and debris were pushed into a ravine on the property. There is evidence that the lender paid the second installment to the contractor over the purchasers' protests and before the work was finished in a satisfactory manner. On June 12, 1984, lender, at the urgings of the purchasers, told the contractor to stop work, informing him he was in breach of contract because the work had not been completed in a timely manner and because the work that had been started was unsatisfactory. In its letter to the contractor, the lender demanded a total refund of the sum of the two payments made by lender (made pursuant to the lender's agreement with the purchasers) so that the work could be redone and completed. The same day the lender informed the contractor that he was terminated, it wrote to the purchasers informing them that the contractor had been ordered to stop work and also informing them that they should choose a new contractor to complete the work and that the completion costs would be for the purchasers to pay. Purchasers did not obtain a new contractor, but began work on the septic system themselves.
Meanwhile in April 1984 the seller delivered a "Commodore Cameo" mobile home to the partially prepared site on the purchasers' property. This home differed in a number of respects from the "Commodore Comet" which the purchasers had ordered. The trial court found that the substituted home was probably of equal value and utility though the evidence showed that the interior decor was substantially different (color, vinyl coverings, cabinets), that the model delivered had cathedral ceilings in only three or four rooms instead of throughout the home, and that the utility room was smaller in the Cameo than in the Comet. Purchaser, Mr. Mason, testified that he informed the seller that the wrong mobile home had been delivered, but that the seller referred him to the lender. He testified that when he then contacted the lender, it referred him back to the seller. Mr. Mason further testified that each of these parties told him the mobile home belonged to the other. In June 1984 the purchasers' attorney notified the lender in writing that they wished to rescind the purchase agreement. The mobile home remained on the property unoccupied until after this lawsuit was commenced. It was finally removed from the purchasers' property in December 1984.
In November 1984 the purchasers commenced this lawsuit against the seller, lender, contractor and various agents (not presently involved) for breach of contract and warranties and violation of the Consumer Protection Act. Purchasers sought actual damages, treble damages up to the statutory limit of $10,000, attorneys' fees and costs. Following a bench trial, the trial court found that the purchasers were uninformed and uneducated consumers who selected a mobile home from seller's lot believing the one they selected would be delivered and that a different home was in fact delivered. 1 The trial court found that the contractor did not fully perform in accordance with his contract because of his termination but did add value to the purchasers' land in the amount of $5,750. The contractor was awarded $599.68 against the purchasers, the difference between the amount already paid by the lender to the contractor and the amount by which the value of the property had been enhanced.
The trial judge further found that Mr. St. Clair, agent of the lender corporation, reviewed, accepted and rewrote the contractor's bid and added $800 which represented a fee to be paid by the purchasers to the lender for the services of St. Clair 2 as a "specialist to oversee" the contractor's work. The court found that the lender had breached its contract to supervise the contractor's work 3 and that as a result of the unfair and deceptive acts of the lender and seller, the purchasers were damaged in the amount of $12,500. The court also found the lender was "tied to" the seller and the fault of one was the fault of the other.
The trial court concluded that there was a causal link between the unfair and deceptive acts of the seller and lender and the injuries suffered by the purchasers and awarded $12,500 in damages to the purchasers together with treble damages up to $10,000 and attorneys fees and costs of $7,500 under the Consumer Protection Act. The trial court also ordered the lender to reconvey the real property which the purchasers had previously quit claimed to it.
On appeal, the Court of Appeals in an unpublished opinion affirmed as to the contractor, and reversed as to the seller and lender concluding that the purchasers had not sustained any damages and that therefore the award of treble damages and attorneys' fees under the Consumer Protection Act were not recoverable. 4
The purchasers petitioned this court arguing that there was substantial evidence to support the trial judge's award of damages. 5 The seller and lender responded that in view of the court's order of rescission of the purchase contract and order of reconveyance of the real property that the purchasers could not recover any damages or attorneys' fees under the Consumer Protection Act.
One basic issue is presented in this court.
Is the trial court's finding of $12,500 damages supported by substantial evidence in the record and are treble damages and attorneys' fees recoverable under the Consumer Protection Act?
CONCLUSION. We conclude that there is substantial evidence to support the trial court's award of damages, and that treble damages and attorneys' fees are recoverable under this state's Consumer Protection Act.
There is substantial evidence to show that the seller delivered the wrong mobile home and refused to remove it from the purchasers' property until after this lawsuit was commenced. There is also evidence to support the trial court's finding that the lender breached its contract to oversee the site preparation work on the purchasers' property and that it refused to reconvey the purchasers' real estate until ordered by the trial court to do so. Although Mr. St. Clair, as the lender's agent, copied the site contractor's bid verbatim and added an $800 fee for overseeing the site preparation, he testified at trial that he felt he had no duty to oversee the project.
Contract damages are ordinarily based on the injured party's expectation interest and are intended to give that party the benefit of the bargain by awarding him or her a sum of money that will, to the extent possible, put the injured party in as good a position as that party would have been in had the contract been performed. 6
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