North Coast Elec. Co. v. Selig

• Decision Date: 02 January 2007
• Docket Number: No. 56450-1-I.,56450-1-I.
• Citation: 151 P.3d 211,136 Wn. App. 636
• Court: Washington Court of Appeals
• Parties: NORTH COAST ELECTRIC COMPANY, a Washington Corporation, Appellant/Cross-Respondent, v. Martin SELIG; Martin Selig Real Estate, Respondents/Cross Appellants, and Selig Real Estate Holdings Eleven, LLC, a Washington limited liability company; Selig Real Estate Holdings Twelve, LLC, a Washington limited liability company; King County, Washington; Seattle First National Bank, a national banking association, successor in interest to Seafirst Mortgage Corporation, a Washington corporation; The Bank of Nova Scotia, San Francisco Agency, a Canadian Chartered Bank acting through its San Francisco Agency; Citicorp Real Estate, Inc., a Delaware corporation; SFT II, Inc., a Delaware corporation; Wells Fargo Bank Minnesota, N.A., as Trustee for the Registered Holders of Credit Suisse First Boston Mortgage Securities Corp., Commercial Mortgage Pass-through certificates, series 2000-C-1; Seattle Trust & Savings Bank, a Washington corporation; Stuart C. Johnston & Associates, Inc., a Washington corporation; Immunex Corporation, a Washington corporation; DDB Seattle, Inc., a Washington corporation; Stewart Title of Washington, LLC, a Washington limited liability company; Seattle Construction Resources, Inc., a Washington corporation; Teldata Systems, Inc., a Washington corporation; State of Washington Department of Employment Security; Nuprecon, Inc., an Oregon corporation, Defendants.

151 P.3d 211

136 Wn. App. 636

NORTH COAST ELECTRIC COMPANY, a Washington Corporation, Appellant/Cross-Respondent, v. Martin SELIG; Martin Selig Real Estate, Respondents/Cross Appellants, and Selig Real Estate Holdings Eleven, LLC, a Washington limited liability company; Selig Real Estate Holdings Twelve, LLC, a Washington limited liability company; King County, Washington; Seattle First National Bank, a national banking association, successor in interest to Seafirst Mortgage Corporation, a Washington corporation; The Bank of Nova Scotia, San Francisco Agency, a Canadian Chartered Bank acting through its San Francisco Agency; Citicorp Real Estate, Inc., a Delaware corporation; SFT II, Inc., a Delaware corporation; Wells Fargo Bank Minnesota, N.A., as Trustee for the Registered Holders of Credit Suisse First Boston Mortgage Securities Corp., Commercial Mortgage Pass-through certificates, series 2000-C-1; Seattle Trust & Savings Bank, a Washington corporation; Stuart C. Johnston & Associates, Inc., a Washington corporation; Immunex Corporation, a Washington corporation; DDB Seattle, Inc., a Washington corporation; Stewart Title of Washington, LLC, a Washington limited liability company; Seattle Construction Resources, Inc., a Washington corporation; Teldata Systems, Inc., a Washington corporation; State of Washington Department of Employment Security; Nuprecon, Inc., an Oregon corporation, Defendants.

No. 56450-1-I.

Court of Appeals of Washington, Division 1.

January 2, 2007.

Publication Ordered January 23, 2007.

Wm. Randolph Turnbow, Hershner Hunter LLP, Eugene, OR, John Michael Greeley, Attorney at Law, Seattle, WA, for Appellant/Cross-Respondent.

William Keller McInerney Jr., WK McInerney PLLC, Arnold M. Willig, Hacker & Willig Inc. PS, Seattle, WA, for Respondents/Cross Appellants.

BAKER, J.

¶ 1 North Coast Electric Company sued Martin Selig for the unpaid purchase price of fixtures and materials. Selig counterclaimed, alleging a violation of RCW 60.04.081, disparagement of title, and intentional interference with contractual relations. On North Coast's motion for summary judgment, the court ruled in favor of North Coast's claims and awarded attorney fees. Subsequently, on Selig's motion for reconsideration, the court struck certain portions of the award. North Coast appeals from the court's order on motion for reconsideration. After Selig's counterclaims were voluntarily dismissed, the court awarded North Coast attorney fees in conjunction with Selig's counterclaims. Selig appeals from that order, arguing that the award was not warranted under the parties' contract, Civil Rule 11, or RCW 4.84.185. We affirm in part and remand in part.

I.

¶ 2 North Coast Electric Company sued Martin Selig for the unpaid purchase price of light fixtures and related materials, requesting the principle amount of $102,319.22 plus sales tax and interest. The complaint included a claim for foreclosure of a lien filed against certain real property and breach of contract claims.

¶ 3 Selig counterclaimed, alleging a violation of RCW 60.04.081, disparagement of title, and intentional interference with contractual relations. Selig argued that North Coast's lien was wrongful because, under RCW 60.04.031, a lien can only be recorded against a site which is the subject of a contract. The lien was recorded against Selig's property at 1000 Second Avenue, but the light fixtures were installed in Selig's Fourth and Blanchard Building. Selig also claimed that no pre-lien notice was filed, as required by RCW 60.04.031.

¶ 4 North Coast moved for summary judgment on its claims and for a supplemental award of $35,238.50 for attorney fees and costs. It claimed it was entitled to attorney fees pursuant to a clause in the parties' credit agreement. By executing the "Confidential Credit Application," Selig agreed to the following:

In the event it becomes necessary to refer any amount to an attorney for collection, we agree and promise to pay your reasonable attorney's fee and collection costs, even though no suit is filed. If a legal proceeding is commenced, we agree to pay NORTH COAST ELECTRIC CO's reasonable attorney's fees in such proceeding or any appeal thereof.

¶ 5 In response, Selig conceded the amount due for the light fixtures and materials, but contested the request for attorney fees. Selig argued that North Coast could not recover attorney fees under the credit application because it was not a contract. Selig did not object to the amount or category of fees.

¶ 6 The court granted North Coast's motions. It found in favor of North Coast on its contract claims, and noted that satisfaction of the judgment would moot the foreclosure claim. It granted North Coast's request for attorney fees in full.

¶ 7 Selig moved for reconsideration on the attorney fee award, objecting to the categorization of some costs and to an award of fees for secretarial work. The court granted Selig's motion for reconsideration. It disallowed secretarial costs in the sum of $4,352.50, undocumented future attorney fees in the sum of $3,500, and undocumented future costs in the sum of $400. But the court added $1,000 to North Coast's award for having to respond to the motion for reconsideration because no specific objection to the requested fees and costs was raised during the prior hearing.

¶ 8 Selig voluntarily dismissed his counterclaims under CR 41. Because there were no remaining claims or counterclaims in the action the court certified as final under CR 54 its order granting North Coast summary judgment and attorney fees, the order on motion for reconsideration, and the order dismissing Selig's counterclaims. North Coast appealed, seeking review of the court's order on motion for reconsideration. Selig did not cross-appeal from the order of final judgment.

¶ 9 Several months later, the court granted North Coast's motion for attorney fees in connection with Selig's counterclaims, awarding $50,741.50 for attorney fees and $3,119.79 for costs. The court based the award on the credit agreement, CR 11, and RCW 4.84.185. Selig appealed.

II.

A. North Coast's Appeal

¶ 10 "When reviewing an award of attorney fees, the relevant inquiry is first, whether the prevailing party was entitled to attorney fees, and second, whether the award of fees is reasonable."¹ Whether a party is entitled to attorney fees is an issue of law, which is reviewed de novo.² Whether the amount of fees awarded was reasonable is reviewed for an abuse of discretion.³ A trial judge is given broad discretion in determining the reasonableness of an award, and in order to reverse that award, it must be shown that the trial court manifestly abused its discretion.⁴

¶ 11 North Coast argues that it is entitled to secretarial fees and future fees and costs under the credit contract. It argues that "reasonable attorney fees" includes such expenses. Selig responds that the secretarial fees sought by North Coast are not fees for legal services, as this court described those services in Absher Construction Company v. Kent School District.⁵ Selig also argues that a court cannot determine in advance whether future fees and costs are reasonable, and therefore they cannot be awarded.

¶ 12 Our Supreme Court has held that "reasonable attorney fees" includes reasonably, necessary expenses of litigation.⁶ It has not expressly decided whether secretarial work can be included in calculating an attorney fee award. This court's decision in Absher provides the best guidance on whether secretarial time may be included in an attorney fee award. In Absher, we found the Arizona court's reasoning in Continental Townhouses E. Unit One Ass'n v. Brockbank⁷ persuasive. Because nonlawyer personnel decrease the expense of litigation, use of their services should not be discouraged.⁸ Excluding such services from an attorney fee award might act as a deterrent to providing cost-effective legal services. We held that the services of a "qualified legal assistant" may be included in an attorney fee award. To fit into this category,

(1) the services performed by the nonlawyer personnel must be legal in nature; (2) the performance of these services must be supervised by an attorney; (3) the qualifications of the person performing the services must be specified in the request for fees in sufficient detail to demonstrate that the person is qualified by virtue of education, training, or work experience to perform substantive legal work; (4) the nature of the services performed must be specified in the request for fees in order to allow the reviewing court to determine that the services performed were legal rather than clerical; (5) as with attorney time, the amount of time expended must be set forth and must be reasonable; and (6) the amount charged must reflect reasonable community standards for charges by that category of personnel.⁹

¶ 13 "[C]ompensation for preparing pleadings for duplication, preparing and delivering copies, requesting copies, and obtaining and delivering a docket sheet" is not within the realm of "reasonable attorney fees."¹⁰

¶ 14 In its brief, North Coast separates the costs of "legal assistants" from the costs of "secretaries." This alone suggests that the secretarial work was not substantive legal work. The description of the fees sought shows that the secretaries performed such tasks as obtaining information from the assessor, preparation of the lien claim, preparation of correspondence to the court, and the preparation of faxes.¹¹ Although the preparation of the lien claim may be legal in nature, the majority of the work appears clerical. Additionally, North Coast did not specify the qualifications of the secretaries performing the services in sufficient detail to demonstrate that they are qualified by virtue of education, training, or work experience to perform substantive legal work, as required under Absher. We conclude that the court did not err in striking the award for secretarial work.

¶...