Opinion
No. 59818-0-I.
May 19, 2008.
Appeal from a judgment of the Superior Court for King County, No. 05-2-14014-3, Bruce W Hilyer, J., entered March 30, 2007.
Affirmed by unpublished opinion per Cox, J., concurred in by Dwyer, A.C.J., and Lau, J.
This is an action for breach of contract and foreclosure of mechanics' and materialmen's liens by Chayer Enterprises, Inc., doing business as Seattle Painting and Decorating Company ("Seattle Painting"), against Townhomes at Kirkland, LLC ("Townhomes"). Townhomes appeals, contending that the adverse jury verdict is not supported by substantial evidence. It also claims that the trial court erred in awarding prejudgment interest and attorney fees. Finally, Townhomes argues that the claim of lien was not timely recorded. We reject these arguments and affirm.
In July or August 2003, Seattle Painting entered into a verbal contract with Townhomes to paint the interiors of the condominium units located at the latter's property for a specific price per unit. The price depended on whether the unit was small, medium, or large (hereinafter, the "fixed price contract").
After Seattle Painting completed work on many of the units, Townhomes' project manager determined that additional painting was needed. There was trade damage caused by other contractors doing unrelated work in some of the units. There was also some additional work not contemplated in the original verbal agreement. The project manager also determined that additional painting outside of the units, including in the garage and stairwells, was needed.
Seattle Painting orally agreed to perform this additional work, which included painting and related preparation work, on a "time and materials basis." Specifically, Seattle Painting agreed to work for $35 per hour plus the cost of materials, with one exception. The exception was that one type of preparation in the garage would be performed at $13 per hour plus the cost of materials.
Seattle Painting performed the work over several months and submitted invoices to Townhomes as work was completed. Townhomes usually paid the invoices, paying a total of $490,727.34 under the contracts.
Around July 2004, Townhomes stopped paying the invoices because it thought it was being overcharged. Seattle Painting completed its work on the contracts in September 2004.
On December 9, 2004, Seattle Painting recorded a claim of lien against the Townhomes property. Thereafter, it commenced this action. Townhomes Page 3 counterclaimed, alleging that Seattle Painting overcharged in violation of the contract.
At trial, Townhomes moved to dismiss Seattle Painting's lien claim in part because it was untimely as to the garage contract. It later moved to dismiss the lien claim in part, alleging that it was also untimely as to the trade damage contract. The trial court granted the first motion and denied the second, concluding the lien claim was untimely as to the garage contract but timely as to the trade damage contract.
After a five-day trial, the jury found Townhomes liable for breach of contract and awarded $88,641.20 in damages. It found Seattle Painting not liable on Townhomes' counterclaim.
Seattle Painting moved for attorney fees and costs, which the trial court granted. It also sought prejudgment interest on the jury award, which the trial court ultimately awarded.
Townhomes appeals.
JURY VERDICT
Townhomes argues that the jury award is not supported by substantial evidence in the record. We disagree.
An appellate court may not overturn a jury verdict unless the verdict is outside the range of substantial evidence in the record, shocks the conscience of the court, or seems to result from passion or prejudice. The determination of damages is particularly a jury's function, and a court "strongly presumes" the verdict is correct. When a jury returns a lump sum verdict, the trial court may not dissect the verdict into its component parts. Other than to inquire whether the substantial evidence test has been met, an appellate court should not concern itself with the amount of damages because "the jury is the final arbiter of the effect of the evidence, for it determines the credibility of the witnesses, the weight of their testimony, and the consequence of all other evidence."
Washburn v. Beatt Equip. Co., 120 Wn.2d 246, 268-69, 840 P.2d 860 (1992) (quoting Bingaman v. Grays Harbor Com'ty Hosp., 103 Wn.2d 831, 699 P.2d 1230 (1985)).
Bunch v. King County Dep't of Youth Servs., 155 Wn.2d 165, 179, 116 P.3d 381 (2005).
Foster v. Giroux, 8 Wn. App. 398, 399, 506 P.2d 897 (1973).
Cox v. Charles Wright Acad., 70 Wn.2d 173, 176-77, 422 P.2d 515 (1967).
Substantial evidence is evidence sufficient to convince a fair-minded person of the truth of the matter. We do not review credibility determinations on appeal.
Bunch, 155 Wn.2d at 179-80.
See In re Marriage of Rideout, 150 Wn.2d 337, 352, 77 P.3d 1174 (2003).
Here, Seattle Painting asserted at trial that its damages were $112,932.60, the total of six unpaid invoices. The jury awarded $88,641.20. This is within the range of evidence and therefore presumptively correct.
Townhomes argues that substantial evidence does not support this figure because Seattle Painting produced no documentation to support the figures it charged in the invoices. This argument disregards the full range of evidence adduced at trial.
Javier Gonzalez, Seattle Painting's superintendent and supervisor for the job in this case, testified at trial. He stated that he frequently provided accurate information to company president Steven Chayer regarding the number of hours he and his employees worked and materials purchased for each day of work. He kept notes, relied on his memory, spoke with Chayer often regarding the hours expended on the project, and reviewed materials bills every week. Gonzalez also stated that the unpaid invoices contained no charges that overlapped with the work done on the fixed price contract. Chayer testified that he prepared the invoices based upon constant contact with and reports from Gonzalez regarding the specific work done and number of hours worked, written notes, costs, and employee time cards. He kept the written information in the project file, attached to the relevant invoice.
Chayer also testified that based on his own review of the billing records, Townhomes should be reimbursed $8,648.83 for an inadvertent billing mistake.
Townhomes hired an accountant, Charles Pratt, to perform an audit of Seattle Painting's records in this case. Pratt testified at trial that he and his staff reviewed project records at Seattle Painting's offices and concluded that 85 percent to 95 percent of the documentation supported the charges to the entire project. He estimated that between 5 percent and 15 percent of the documentation was either incomplete or unclear.
Taken together, this is substantial evidence to uphold the jury's damages award. The jury was entitled to believe that Gonzalez and Chayer accurately billed for invoices 19 through 24 except for inadvertent overbilling of $8,648.83. We also note that the jury was entitled to believe the accountant's testimony that 85 percent of the total of invoices less the overbilled amount (($112,932.60-$8,648.83) x 0.85 = $88,641.20) was the proper measure of damages in this case.
See also Clerk's Papers at 175 (Townhomes stated in its brief below that the jury's award was exactly 85% of the claimed amount.)
Townhomes argues that several cases establish that under a cost-plus contract, the contractor is required to prove its actual costs with detailed records. We do not read those cases to require a different result in this case.
Appellant's Brief at 19-24 (citing Walsh Servs., Inc. v. Feek, 45 Wn.2d 289, 274 P.2d 117 (1954); Keever Assocs., Inc., 129 Wn. App. 733, 119 P.3d 926 (2005), review denied, 157 Wn.2d 1009 (2006)).
Walsh Services, Inc. v. Feek is merely an example in which the reviewing court determined that the trial judge's findings were supported by substantial evidence under the particular facts of that case, which involved a cost-plus contract. That case is not helpful here.
Walsh Servs., 45 Wn.2d at 298.
The other, Keever Associates, Inc., held that the unchallenged findings did not support the trial court's conclusion that a particular type of charge was a "cost" under a cost-plus contract. This case does not require reversal of the award in this case.
Keever, 129 Wn. App. at 739.
Similarly, Townhomes argues that reversal is required because Pratt in his record review did not distinguish between the hours worked on the fixed price contract and those worked on the time and materials contracts. It argues that the actual records were not provided to the jury to make that determination. But Gonzalez testified that the unpaid invoices reflected work done on a time and materials basis and did not include any work done for the fixed price contract. The jury was entitled to believe him and to believe Pratt that 85 percent of the invoiced charges, less the overbilled amount for this project, were supported by adequate documentation.
See Report of Proceedings (Jan. 10, 2007) at 107-26.
Seattle Painting argues that Townhomes' substantial evidence challenge contravenes the law of the case, which established that the unpaid invoices were the proper measure of damages. In response, Townhomes argues that if the law of the case instructed the jury to award the sum total of the invoices, the jury violated the law of the case by awarding a different number. Both parties are incorrect.
Jury Instruction number 14 states in part:
If your verdict is for Seattle Painting on its breach of contract claim, the measure of actual damages is the total amount of the unpaid invoices (Nos. 19-24; Exhibits 84, 86, 88, 90, 92, and 94).
Clerk's Papers at 93.
But elsewhere in the same jury instruction, it states:
In order for either party to recover actual damages, that party has the burden of proving . . . the amount of those damages.
. . . .
The burden of proving damages rests with the party claiming them and it is for you to determine, based upon the evidence, whether any particular element has been proved by a preponderance of the evidence. In determining an award of damages to either party, you must be governed by your own judgment, by the evidence in this case, and by these instructions, rather than by speculation, guess, or conjecture.
Id. (emphasis added).
Jurors are presumed to follow instructions.
Tincani v. Inland Empire Zoological Soc'y, 124 Wn.2d 121, 136, 875 P.2d 621 (1994).
Taken as a whole, this instruction did not require the jury to award damages for the total of invoices 19 through 24. Rather, assuming the jury found for Seattle Painting on its breach of contract claim, the instruction required the jury to consider those invoices and award those damages that were proved by a preponderance of the evidence. Thus, contrary to Seattle Painting's argument, Townhomes may attempt to challenge the verdict on appeal based on a lack of evidence. Conversely, the jury did not, as Townhomes argues, disregard the instructions by exercising its judgment and determining that a lesser amount was proved.
The jury verdict is supported by substantial evidence in the record.
PREJUDGMENT INTEREST
Townhomes argues that the trial court erred in awarding prejudgment interest. We disagree.
Prejudgment interest is allowed in Washington if the amount claimed is either liquidated or when the amount is due upon a contract and is determinable by computation with reference to a fixed standard contained in the contract. A liquidated claim is one "where the evidence furnishes data which, if believed, makes it possible to compute the amount with exactness, without reliance on opinion or discretion."
Prier v. Refrigeration Eng'g Co., 74 Wn.2d 25, 32, 442 P.2d 621 (1968).
King County v. Puget Sound Power Light Co., 70 Wn. App. 58, 61, 852 P.2d 313 (1993) (citing Prier, 74 Wn.2d at 32).
The existence of a dispute over the claim does not alter the character of a sum as being liquidated or unliquidated. The issue is whether the amount can be calculated with exactness, not whether the merits of the claim are certain. Likewise, the fact that a defendant is partially successful in reducing its share of liability for the plaintiff's liquidated damages does render the claim unliquidated.
Prier, 74 Wn.2d at 33.
Id.
Hadley v. Maxwell, 120 Wn. App. 137, 144, 84 P.3d 286 (2004).
We review a trial court's award of prejudgment interest for an abuse of discretion.
Scoccolo Constr., Inc. v. City of Renton, 158 Wn.2d 506, 519, 145 P.3d 371 (2006).
Here, the trial court correctly concluded that the claim was liquidated because the amount owed could be calculated with exactness. That amount was capable of calculation based on the individual invoices, the testimony supporting the figures in those invoices, and the relevant discounts. Townhomes' counterclaims could not change the character of Seattle Painting's claim from liquidated to unliquidated.
Citing Kiewit-Grice v. State, Townhomes argues that the fact that the jury awarded a lesser sum illustrates that it exercised discretion and the claim was unliquidated. But in that case, the defendant challenged the reasonableness of the amount claimed, and the court held:
77 Wn. App. 867, 895 P.2d 6 (1995).
Where a defendant has challenged the reasonableness of the amount awarded for extra work arising outside of the contract, the award is unliquidated, "because reliance upon opinion and discretion was necessary in determining the reasonableness of the amounts expended."
Id. at 872 (quoting CKP, Inc. v. GRS Constr. Co., 63 Wn. App. 601, 617, 821 P.2d 63 (1991)).
Here, Seattle Painting's main claim was for breach of contract. It sought a specific amount — the total of the six unpaid invoices. Reasonableness of the amount claimed was not at issue for its main claim, as it would have been for its alternative cause of action for quantum meruit (quasi contract). Only if the alternative action had been the basis of the award would the jury have been required to determine the reasonable value of the services performed.
Clerk's Papers at 88 (Jury Instruction 9, listing elements for quantum meruit); Clerk's Papers at 93 (Jury Instruction 14, instructing that the measure of damages is the reasonable value of the services); Clerk's Papers at 60 (defendant's trial brief); Modern Builders, Inc. v. Manke, 27 Wn. App. 86, 96, 615 P.2d 1332 (1980) (damages for quantum meruit not liquidated).
This case is more like McConnell v. Mothers Work, Inc. andScoccolo Construction, Inc. v. City of Renton. In those cases, the juries had to evaluate disputed evidence. The court in McConnell held that the claim was liquidated because the data needed to determine the amount owed was in the record and, if believed, allowed the jury to compute the amount with exactness.
131 Wn. App. 525, 128 P.3d 128 (2006).
158 Wn.2d 506, 145 P.3d 371 (2006).
In Scoccolo, the jury awarded a sum less than that claimed by the plaintiff. The court distinguished Kiewit-Grice and held that the claim was liquidated because the jury was not asked to assess the reasonableness of the claimed expenses, even though the defendant succeeded in reducing the claimed amount.
Scoccolo, 158 Wn.2d at 519-20.
As we have observed, the fact that Seattle Painting did not prove all its damages is not dispositive. The jury did not assess the reasonableness of the claimed amount. Rather, it evaluated disputed evidence to determine whether the claimed amounts had been proved.
Townhomes argues that the jury could not calculate damages based on a fixed standard in the contract because Seattle Painting did not supply the "necessary data" (its timecards or receipts with which the jury could calculate "time and materials"). But this is a challenge to the sufficiency of the evidence, which we have already decided against Townhomes.
TIMELINESS OF LIEN CLAIM
Townhomes argues that the lien claim for trade damage was untimely. The record shows otherwise.
One claiming a lien under the mechanics' and materialmen's lien statute must record a notice of claim of lien in the county where the subject property is located within 90 days after the person has ceased to furnish labor, professional services, materials, or equipment under the contract.
RCW 60.04.091; Intermountain Elec., Inc. v. G-A-T Bros. Constr., Inc., 115 Wn. App. 384, 391, 62 P.3d 548 (2003).
The burden of establishing a right to a lien rests upon the person claiming it.
Northlake Concrete Prods., Inc. v. Wylie, 34 Wn. App. 810, 813, 663 P.2d 1380 (1983).
Here, the trial court denied Townhomes' motion to dismiss the lien claim for the contract to perform work relating to trade damage. The court stated in its order:
The Court finds that the work done on the various units to refinish painting caused by "trade damage" was in fact and in law a series of undertakings under one "time [and] materials contract" and therefore the lien was timely filed.
Clerk's Papers at 169.
The trial court's findings and conclusion are supported by the record. Seattle Painting recorded the claim of lien on December 9, 2004. It states that the last date on which labor was performed or services, material, or equipment were furnished was September 12, 2004. The claim was signed, sworn under penalty of perjury, and acknowledged by a notary. That is sufficient evidence.
The lien was timely recorded.
ATTORNEY FEES
Townhomes argues that the trial court erred in awarding attorney fees below because Townhomes partially prevailed and Seattle Painting did not improve upon the pretrial settlement offer. Both parties seek fees on appeal. We disagree with Townhomes and also award Seattle Painting fees for this appeal.
The mechanics' lien statute provides that a trial court may award costs and attorney fees to the prevailing party in an action under that statute.
We review an award of attorney fees for an abuse of discretion.
See Entm't Indus. Coal. v. Tacoma-Pierce County Health Dep't, 153 Wn.2d 657, 666, 105 P.3d 985 (2005).
Attorney Fees for Trial
In general, a prevailing party is one who receives a judgment in its favor. If neither party wholly prevails, then the prevailing party is the one who substantially prevails, which depends upon the relief afforded the parties.
Scoccolo, 158 Wn.2d at 521.
Id.
Here, even though Townhomes partially prevailed by successfully defending the lien claim for the garage work, Seattle Painting was the substantially prevailing party on appeal. It received a judgment in its favor of $88,641.20. Townhomes did not prevail on its counterclaim at trial.
The cases that Townhomes cites do not support its position that neither side is entitled to fees as a matter of law when both sides are partially successful with regard to a lien foreclosure. In Forrester v. Craddock, the plaintiffs succeeded in obtaining an award of $2,604.21 for their lien claim, while the defendants recovered $3,500 for their cross-claim. Both recoveries were less than those claimed. The supreme court held that the trial court would have abused its discretion if it had awarded fees to either party because defendants' monetary recovery "wiped out" plaintiffs', and the defendants' cross-claim was not within the lien statute. It is not the case here, as it was in Forrester, that both parties received a comparable damages award. Rather, Seattle Painting received a substantial award of money damages, while Townhomes received nothing and succeeded only in having dismissed the lien claim for the garage contract work.
51 Wn.2d 315, 324, 317 P.2d 1077 (1957).
Id.
Intermountain Electric, Inc. v. G-A-T Bros. Construction, Inc., also cited by Townhomes, addressed fees under RCW 60.04.081(4), which mandates fees when parties litigate the issue of whether a lien claim was frivolous. Frivolity of a lien claim is not at issue in this case as it was in Intermountain, so that case, applying a different statute, is not applicable here. Neither of these cases negates the rule that the trial court has discretion to determine which party substantially prevailed, supporting an award of fees under RCW 6.04.181(3).
115 Wn. App. 384, 62 P.3d 548 (2003).
Townhomes is also incorrect in asserting that Seattle Painting did not improve upon the pretrial settlement offer under Civil Rule 68. That rule provides, "If the judgment finally obtained by the offeree is not more favorable than the offer, the offeree must pay the costs incurred after the making of the offer." "Costs" includes attorney fees if the relevant statute or contract so specifies.
CR 68.
Magnussen v. Tawney, 109 Wn. App. 272, 275, 34 P.3d 899 (2001).
In determining whether a party has improved upon an offer of settlement, the reviewing court must compare a CR 68 offer that includes fees with a verdict that also includes fees.
Id.
Before trial, Townhomes filed an offer of judgment under CR 68 of $75,000 including costs and attorney fees incurred "to date." Townhomes' counsel calculated Seattle Painting's pretrial costs and attorney fees up to the date of the settlement offer to be $44,285.80, based on Seattle Painting's attorney fee submission. Thus, Townhomes' pretrial offer of judgment was: $30,714.20 plus $44,285.80 in pretrial fees and costs. The award at trial — $88,641.20 plus $100,916.02 in fees plus costs — was an improvement over the settlement offer. We therefore affirm the award of attorney fees.
See Magnussen, 109 Wn. App. at 276 (subtracting amount of pretrial fees to compare judgment with settlement offer).
Attorney Fees on Appeal
RCW 60.04.181(3) also authorizes attorney fees to the prevailing party on appeal.
Here, Seattle Painting has prevailed on all issues. Thus, it is entitled to attorney fees for this appeal, subject to its compliance with RAP 18.1(d).
We affirm the judgment and other orders of the trial court that are challenged on appeal.
WE CONCUR: