Singleton v. Frost

Decision Date10 September 1987
Docket NumberNo. 53639-2,53639-2
Citation742 P.2d 1224,108 Wn.2d 723
PartiesSheryl SINGLETON, Plaintiff, v. Patricia FROST, Executrix of the Estate of Fay Frost, Deceased, Jane Doe (Jo Ann) Frost, his former wife, Respondents, Allen J. Shontz and Jane Doe Shontz, his wife, Petitioner.
CourtWashington Supreme Court

Richard B. Sanders, Seattle, for petitioner.

David M. Abercrombie, Seattle, for respondents.

CALLOW, Justice.

This case questions the scope of a trial judge's discretion, if any, to deny reasonable attorney's fees to the prevailing party in a suit on a contract providing that such fees shall be paid.

On April 16, 1980, the petitioner, Allen Shontz, loaned the marital community of Fay and Jo Ann Frost $15,000 in return for a promissory note secured by a deed of trust to a 40-acre parcel of community real estate referred to as the "High Rock" property. Although the promissory note bore the signatures of both Fay and Jo Ann Frost, Jo Ann Frost's signature had been forged.

The Frosts commenced dissolution proceedings in July 1980, which culminated in a decree of dissolution on May 10, 1981.

On January 20, 1981, Sheryl Singleton loaned Fay Frost $10,000 in exchange for a promissory note secured by a deed of trust to a 3 1/2 acre parcel of real estate which was Fay Frost's separate property. The next day, January 21, 1981, Mr. Shontz agreed to relinquish his interest in the High Rock property in exchange for what he believed would be a first lien position on the 3 1/2 acre parcel. Unbeknownst to Mr. Shontz, his lien was recorded 1 day after the deed of trust in favor of Ms. Singleton.

Ms. Singleton commenced this action seeking judgment against Fay Frost and priority over Shontz. Shontz cross-claimed against Fay and Jo Ann Frost seeking judgment for their delinquency on the promissory note delivered to Shontz plus an award of reasonable attorney's fees. Fay Frost died prior to trial, but the action continued against his estate.

The case was tried to the court. Circumstantial evidence presented at trial suggested that Fay Frost had received a check in the sum of $15,000 from Shontz, but had immediately returned $4,000 in cash to Shontz as part of the loan agreement. The trial court found in favor of Singleton rendering judgment against Frost and granting her lien priority over Shontz. The trial court also found in favor of Shontz, awarding Shontz a judgment of $12,446.10 against the Frost estate and the community assets in the possession of Jo Ann Frost. This sum constituted the principal and interest owed on the $15,000 note to Shontz, reduced by the sum of $4,000 allegedly paid to Shontz as a kickback.

The trial court acknowledged in a finding of fact that "Allen Shontz has incurred reasonable attorney fees and expenses of litigation in connection with the identified obligation" and in a conclusion of law stated that "Fay Frost individually and the assets of the marital community of Fay Frost and Jo Ann Frost in the possession of Jo Ann Frost are indebted to defendant Allen Shontz in the sum of $12,466.10 for principal and accrued interest as of the 1st day of December, 1983, together with statutory attorneys fees in the sum of $100." The court's finding and conclusion are reflected in its award of $12,466.10 to Allen Shontz for "principal, pre-judgment interest and statutory attorneys fees." The trial court made no award of reasonable attorney's fees in favor of Shontz, although it awarded the plaintiff, Sheryl Singleton, $10,000 in "reasonable attorney's fees", plus $100 in statutory attorney's fees and $75 in costs. The trial court did not state any distinction between the two situations to explain why it awarded reasonable attorney's fees to Singleton, but denied them to Shontz.

After trial, Jo Ann Frost moved to amend the pleadings to include a defense that the promissory note to Shontz was usurious because of the claimed $4,000 "kickback" paid at the time the note was issued. The trial court denied the motion and found that the defense of usury had not been sufficiently pleaded and that the defendants were estopped from relying upon usury as a defense. 1

Shontz appealed, claiming that the trial court improperly discounted his judgment by $4,000, and that the trial court's refusal to award him reasonable attorney's fees (as well as the trial court's award of attorney's fees to Jo Ann Frost) was reversible error. Jo Ann Frost cross-appealed claiming that the trial court abused its discretion denying her post-trial motion to amend the pleadings to include a claim for usury.

The Court of Appeals affirmed the denial of reasonable attorney's fees to Shontz, affirmed the $4,000 discount of the Shontz judgment, affirmed the refusal to permit the belated amendment by Jo Ann Frost, reversed the award of attorney's fees to Jo Ann Frost and refused to award Shontz reasonable attorney's fees on appeal.

We accepted review solely on the issue of whether it was within the trial court's discretion to deny Shontz reasonable attorney's fees where such fees were specifically provided for in the promissory note. The timeliness of the motion to amend and the validity of the trial court's disposition of the alleged $4,000 "kickback" are not before us on appeal.

We hold that the trial court has discretion regarding the amount of attorney's fees which are reasonable, but that where a contract provides for an award of reasonable attorney's fees to the prevailing party, such an award must be made.

RCW 4.84.330 states that a contract containing an attorney's fee provision entitles the prevailing party in an enforcement action to recover reasonable attorney's fees and costs:

RCW 4.84.330. Actions on contract or lease which provides that attorney's fees and costs incurred to enforce provisions be awarded to one of parties--Prevailing party entitled to attorney's fees--Waiver prohibited. In any action on a contract or lease entered into after September 21, 1977, where such contract or lease specifically provides that attorney's fees and costs, which are incurred to enforce the provisions of such contract or lease, shall be awarded to one of the parties, the prevailing party, whether he is the party specified in the contract or lease or not, shall be entitled to reasonable attorney's fees in addition to costs and necessary disbursements.

Attorney's fees provided for by this section shall not be subject to waiver by the parties to any contract or lease which is entered into after September 21, 1977. Any provision in any such contract or lease which provides for a waiver of attorney's fees is void.

As used in this section "prevailing party" means the party in whose favor final judgment is rendered.

J. Sutherland, Statutory Construction § 57.03 (4th ed. 1984), states as follows:

Where the language of a statute is clear and unambiguous, courts may hold that the construction intended by the legislature is obvious from the language used. The ordinary meaning of language should always be favored. The form of the verb used in a statute, i.e., something "may," "shall" or "must" be done, is the single most important textual consideration determining whether a statute is mandatory or directory....

... "Ordinarily, the use of the word 'shall' in a statute carries with it the presumption that it is used in the imperative rather than in the directory sense...."

(Footnotes omitted.) This rule was explained and applied to a statutory provision of reasonable attorney's fees under a garnishment statute in Burr v. Lane, 10 Wash.App. 661, 677-78, 517 P.2d 988 (1974), which held:

Whether the word "shall" is to receive a mandatory or permissive interpretation is a matter of legislative intention. Spokane County ex rel. Sullivan v. Glover, 2 Wash.2d 162, 97 P.2d 628 (1940). As pointed out in Snyder v. Cox, 1 Wash.App. 457, 462 P.2d 573 (1969), a garnishment case in which the court held the word "shall" used in a portion of RCW 7.32.160 is mandatory:

If the right of anyone depends upon giving the word shall an imperative construction, the presumption is that shall is used in reference to that right or benefit, and it receives a mandatory interpretation.

Snyder v. Cox, supra at 462, 462 P.2d 573. See also Jordan v. O'Brien, 79 Wash.2d 406, 486 P.2d 290 (1971). The apparent purpose of the attorney's fee provision in the garnishment statute is to encourage garnishees, who are involuntarily involved in litigation in which they are commonly strangers, to answer truthfully. RCW 7.33.290, in part above quoted, appears to call for general and uniform application. No exceptions are made. There is no appropriate language suggesting the right to the fee is in the court's discretion. The legislative use of the word "shall" rather than "may" in the quoted phrase "shall abide the issue of such contest," is consistent with and strengthens the case for the interpretation of the statute suggested. The word "shall" in statutes providing an attorney's fee to a garnishee defendant has been given an imperative meaning. A court is required to permit recovery of an attorney's fee, its only discretion being as to amount. Carter v. First Nat'l Bank, 15 Ga.App. 55, 82 S.E. 628 (1914); Dallas Packing Co. v. Kimberling, 289 S.W. 149 (Tex.Civ.App.1926). See 38 C.J.S. Garnishment § 264(b)(2), at 524 n. 95 (1943).

Similar language providing for an award of attorney's fees in RCW 4.84.330 is also mandatory. There is no authority to support an interpretation of RCW 4.84.330 other than as mandating an award of reasonable attorney's fees to the prevailing party where a contract so provides. An interpretation allowing the trial court to deny recovery of reasonable attorney's fees at its discretion or whim would render the statute meaningless.

The promissory note executed by Fay Frost (on which Jo Ann Frost's signature was forged) contains a standard clause providing that attorney's fees and costs expended in collecting on the note will be paid by...

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