Rathod v. Feely Indus.

• Docket Number: 84256-1-I
• Decision Date: 31 July 2023
• Parties: SAMIR RATHOD and DARSHANA RATHOD, husband and wife, Plaintiffs, v. FEELY INDUSTRIES, LLC, d/b/a TRUE CUSTOM CABINETRY, a Washington limited liability company; TGC INC., a Washington corporation; and RLI CORP. d/b/a CBIC, an Illinois corporation, Defendants. BUILDERS' INSULATION OF OREGON, LLC, an Oregon limited liability company, Respondent v. JEFF HALLSTROM CONSTRUCTION, INC., a Washington State corporation, Defendant. SAMIR RATHOD and DARSHANA RATHOD, and the marital community composed thereof, Appellants. JEFF HALLSTROM CONSTRUCTION, INC., a Washington corporation, Plaintiff, v. SAMIR RATHOD and DARSHANA RATHOD, and the marital community composed thereof, Defendants. NORCO FIRE PROTECTION, INC., a Washington corporation, Plaintiff, v. SAMIR RATHOD and DARSHANA RATHOD, and the marital community composed thereof, Defendants. WESTERN SURETY CO., a South Dakota corporation, Defendant.
• Court: Washington Court of Appeals

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SAMIR RATHOD and DARSHANA RATHOD, husband and wife, Plaintiffs, v. FEELY INDUSTRIES, LLC, d/b/a TRUE CUSTOM CABINETRY, a Washington limited liability company; TGC INC., a Washington corporation; and RLI CORP. d/b/a CBIC, an Illinois corporation, Defendants.

BUILDERS' INSULATION OF OREGON, LLC, an Oregon limited liability company, Respondent v. JEFF HALLSTROM CONSTRUCTION, INC., a Washington State corporation, Defendant.

SAMIR RATHOD and DARSHANA RATHOD, and the marital community composed thereof, Appellants.

JEFF HALLSTROM CONSTRUCTION, INC., a Washington corporation, Plaintiff, v. SAMIR RATHOD and DARSHANA RATHOD, and the marital community composed thereof, Defendants.

NORCO FIRE PROTECTION, INC., a Washington corporation, Plaintiff, v. SAMIR RATHOD and DARSHANA RATHOD, and the marital community composed thereof, Defendants.

WESTERN SURETY CO., a South Dakota corporation, Defendant.

No. 84256-1-I

Court of Appeals of Washington, Division 1

July 31, 2023

UNPUBLISHED OPINION

Coburn, J.

Samir and Darshana Rathod wanted to build their dream home. That endeavor resulted in the consolidation of three lawsuits involving eight parties and multiple claims and cross claims. This appeal involves one dispute that arose after the Rathods failed to pay Builders' Insulation of Oregon (Builders) for their work insulating the Mercer Island home the Rathods were building. The trial court found the Rathods breached their contract with Builders and ordered the Rathods to pay Builders the total value of the contract as well as Builders' attorney fees and costs. The Rathods challenge the award of attorney fees and a summary judgment ruling determining the existence of a contract. We affirm the summary judgment ruling, but reverse the award of attorney fees and remand because the trial court based its attorney fees award, in part, on facts not supported in the record.

FACTS

Because the challenge is to a grant of summary judgment, we discuss substantive facts as presented at the time of summary judgment and not from the trial record.

The Rathods purchased a property on Mercer Island where they planned to build their "dream home." In May 2018 Samir^[1] terminated his contract with his general contractor and hired Jeff Hallstrom Construction Inc. (JHCI) as the new general contractor. In June 2018, JHCI presented Samir with a bid for insulation services from Builders. Samir discussed several changes to the bid directly with Builders employees Dale Nichols and Francisco Cortez between June and August 2018. During that time, Samir sent several emails requesting certain types of insulation in different parts of the home to "minimize noise" between bedrooms and an office and to create "sound deadening" in a planned media room. Samir and Builders discussed the type of installation available for these purposes and which would suit his needs.

In late July, Builders submitted a proposed bid to Samir via email for the insulation services. Another email delivering a revised proposal to Samir explained that it was revised with additional options "per our phone conversation." Builders submitted two more revised bids. The last bid was submitted to Samir on August 29, 2018. The email was addressed to both Hallstrom and Samir. The bid listed Hallstrom as the contact. Samir did not object to the bid or ask for more revisions. This final bid stated that payment was due within 30 days of the date of invoice and reserved Builders' "right to recover reasonable attorney's fees and expenses associated with the collection of invoices not paid in full within such 30 day period." Builders began the insulation work days later. No one ever signed the August 29 bid.

Builders began the installation in September 2018. During the installation process, Samir communicated with Builders via text message and phone, concerned that Builders was not installing the insulation to the specifications provided in the bid. Samir provided photos showing the measurements of the spray foam insulation on the ceiling, saying that it was not two inches thick as they had agreed to in the bid and asking Builders to fix it because Builders was not "executing on the bid correctly." Builders arranged to have a crew correct the work to align with the terms in the bid. Builders completed the installation in late September and the insulation was inspected and approved by the City of Mercer Island upon completion. Samir remained unsatisfied with Builders' installation despite the inspection and text messaged Builders that the "[i]nspection doesn't equal doing what's in the agreement. Inspection means you met the minimum city requirements. Two totally different things." Builders sent an invoice directly to Samir in early October for payment of the $29,400 reflected in the final bid. Samir responded by denying liability based on the fact neither he or Hallstrom signed "the contract." Samir wrote in an email, "Jeff [Hallstrom] is not contracted with me to do anything other than provide advisory services on the home that I am building. There were proposals emailed to me by both Dale and Francisco, but Jeff told me that he did not sign a contract on my behalf, and I didn't sign the contract either . . . my liability (and Jeff's liability) is $0."

Though the only relevant parties to this appeal are the Rathods and Builders, because the challenged attorney fees touch upon the motion to consolidate multiple suits involving eight parties and the denial of the motion to sever, we briefly explain the relationship of the parties and various suits. The Rathods sued two companies for a breach of contract. One that provided custom cabinetry and the other millwork and finishing carpentry services. In a separate action, JHCI sued the Rathods alleging breach of contract, unjust enrichment quantum meruit, and conversion. The Rathods counterclaimed for unjust enrichment and to claim the surety bond. NORCO Fire Protection, Inc. also sued the Rathods and the Rathods counterclaimed against NORCO and Western Surety Co. In yet another action, Builders sued JHCI, alleging breach of contract and unjust enrichment. JHCI joined and cross claimed against the Rathods. The Rathods counterclaimed only against JHCI for unjust enrichment related to Builders' work. Builders amended their complaint, alleging breach of contract and unjust enrichment against the Rathods.

In January 2021, the court granted the Rathods' motion to consolidate all the cases. Builders later moved to sever, which the Rathods opposed arguing that much of the testimony that related to the claims and cross claims between the Rathods, JHCI and Builders are also applicable to the other consolidated cases. The court denied Builders motion to sever in April 2021.

In January 2022, Builders moved for summary judgment asking the court to find that the August 29 final bid was an enforceable contract and to award damages in the amount of the contract, $29,400. The court granted the motion in part and denied in part, finding that there was no genuine issue of material fact as to the existence of an enforceable contract between Builders and the Rathods, but finding that there was genuine issue of material fact as to Builders performance under the contract and the amount the Rathods owed to Builders. Builders sought to resolve the matter via settlement prior to trial without success.

The case proceeded to a bench trial in March 2022. The trial lasted five weeks. Builders ultimately presented one day of testimony during the entirety of the trial. Following trial, the trial court issued findings of fact and conclusions of law. The Rathods do not assign error to any of these court's findings or conclusions. The court found that

[o]n or about August 29, 2018, the Rathods entered into a contract with Builders to insulate the Home for a price, accounting for selected options and discounts, of $29,400.00. See Exh. 709. On February 7, 2022, this Court (Scott, J.) determined that an enforceable contract exists between Builders and Mr. Rathod for the installation of insulation at the Home."

The trial court, in order to "clarify and supplement Judge Scott's order," found that Exhibit 709 is the enforceable contract "regardless of the fact that the contract was not physically signed by the Rathods." This is so, the trial court found, because Samir negotiated directly with Builders, received the contract and did not object, and engaged directly with Builders following the installation. The trial court further found that Builders completed their work and that the Rathods breached their contract with Builders. The trial court entered judgment awarding Builders $29,400 in principal judgment along with the requested attorney fees and costs, yet to be submitted.

Builders subsequently moved for an award of $268,429 in reasonable attorney fees and $15,756.70 in costs under the contract and as a prevailing party. The Rathods objected to the request for attorney fees. The Rathods did not object to costs. They argued the fees were unreasonable because they were more than 10 times the amount of the original bid, and because, among other reasons, having two attorneys attend the trial was duplicative, unnecessary and excessive. Builders, in a footnote in its reply to the objection, asserted that "Builders' two attorneys attempted to keep costs down by having only one appear at times during the trial." The trial court granted Builders' request for attorney fees and costs without any reduction based on "the reasons stated in Builders' briefs in support thereof and incorporated herein." The Rathods moved for reconsideration of the award of attorney fees. The trial court denied the motion. In doing so, the trial court noted that it had provided its reasons by referencing the Builders'...