Seaborn Pile Driving Co., Inc. v. Glew

Citation: 131 P.3d 910Docket: 54796-8-I

Court: Court of Appeals of Washington; March 30, 2006; Washington; State Appellate Court

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

In the case Seaborn Pile Driving Co. Inc. v. Gayle and Janet Glew, Seaborn Pile Driving constructed a 70-foot pier for the Glews in 1999. In 2000, Seaborn sued the Glews for $1,824.48 for unpaid work, while the Glews counterclaimed for breach of contract and violations of the Consumer Protection Act (CPA), alleging improper permitting. Seaborn offered a Civil Rule 68 judgment of $4,500 to settle the claims, which did not specify attorney fees or address Seaborn's original collection claim. The Glews accepted the offer and subsequently sought attorney fees, which Seaborn contested, claiming the offer included such fees.

The trial court granted the Glews attorney fees only for their counterclaims. Seaborn appealed, but the appellate court affirmed the lower court's decision, determining that the offer did not encompass attorney fees, and since it was unequivocally accepted, the Glews were entitled only to fees related to their counterclaims. The background revealed a significant permitting issue, where Seaborn misrepresented the pier as a repair to obtain necessary city permits, leading to further legal complications and the eventual rescinding of permits by the City of Seattle.

Seaborn proposed to dismiss its initial collection claim contingent upon the Glews' written acceptance of an offer of judgment, suggesting a stipulation to dismiss all claims with prejudice and without costs. The Glews accepted the offer without modifications. Following this, Seaborn dismissed its complaint, while the Glews sought a judgment of $4,500 plus $68,000 in attorney fees, claiming entitlement as the prevailing party based on the contract's second attorney fee provision. They were awarded $38,000 in attorney fees. Seaborn appealed the attorney fees judgment and the rescission of the settlement agreement, but for the appeal to be valid, the court had to determine the offer of judgment was a nullity. The court ruled against Seaborn on this issue, not addressing the rescission arguments. 

Issues regarding CR 68 offers are reviewed de novo, while factual disputes are generally reviewed for clear error. Under CR 68, an offer of judgment can be made, and if accepted within ten days, the court enters judgment. If the offer is silent on attorney fees, the court refers to the underlying statute or contract to determine if fees are included as costs. Seaborn contended that the relevant contract defined attorney fees as part of costs, but the contract contained two provisions: one for collection actions that included attorney fees as costs, and another for litigation that separated attorney fees from costs. The court clarified that while the collection clause applies to the Glews' counterclaims under RCW 4.84.330, it does not extend to non-collection actions, thereby affirming that the litigation clause remains applicable and that Seaborn's argument lacks legal merit.

Counterclaims for breach of contract were analyzed within the context of a suit aimed at contract collection, clarifying that such claims do not qualify as "costs and charges incurred in collection." The court appropriately applied the litigation clause, which distinguishes attorney fees from other costs, thereby excluding attorney fees from Seaborn's offer of judgment. Seaborn argued that its offer was void due to a lack of mutual assent, asserting its intent to include attorney fees. This claim was primarily supported by Hodge v. Development Services of America, where an offer of judgment was deemed a rejection due to qualified acceptance. However, the court clarified that Seaborn misinterprets Hodge and Radecki v. Amoco Oil Co., as those cases involved rejections and counteroffers, whereas the Glews' acceptance mirrored the offer without qualification. 

The ruling also referenced Hennessy v. Daniels Law Office, which illustrated that ambiguous terms in an offer are interpreted against the drafter, thus supporting the Glews' entitlement to attorney fees. Seaborn's assertion that its unexpressed intent to include attorney fees negates their availability to the Glews was countered by the precedent from Do v. Farmer, confirming that an unambiguously accepted offer of judgment remains valid even if it lists attorney fees as $0. The court emphasized that while extrinsic evidence can aid contract interpretation, it cannot introduce a party's unexpressed intent. Relevant considerations included the low offer amount, absence of explicit language regarding attorney fees, the limited scope of the offer, and the lack of subsequent clarification attempts by Seaborn. Overall, the case falls under established legal principles regarding unequivocal acceptance of offers and the treatment of attorney fees in contractual agreements.

Seaborn proposed a settlement offer of $4,500 but later sought clarification from the Glews regarding the dismissal of all claims and whether attorney fees were included. The trial court determined that, although Seaborn intended for the offer to include attorney fees, this intention was not explicitly stated in the written contract. Consequently, the court ruled that the offer was for $4,500 exclusive of attorney fees, adhering to CR 68 and relevant case law. Seaborn's argument that lump sum offers do not require breakdowns did not strengthen its position, as the Ninth Circuit established that unless attorney fees are explicitly included in such offers, they remain recoverable through separate motions. The court emphasized that a clear waiver of attorney fees is necessary, and the absence of such clarity in Seaborn's offer meant the Glews could pursue attorney fees in addition to the settlement amount. Additionally, Seaborn contended that the Glews should not have received attorney fees for the collection action; however, the court noted that the Glews were not awarded fees for that claim, having reduced their requested amount and specifying that awarded fees pertained only to counterclaims.

Seaborn contends that the Glews should not have received attorney fees for enforcing or rescinding the settlement agreement, arguing that it lacked an attorney fee provision, referencing CPL, L.L.C. v. Conley. In CPL, the court determined that the lack of an attorney fee provision in a memorandum agreement governed the lawsuit instead of the original contract's provision. However, this case differs as the Glew-Seaborn interim settlement agreement was intended to outline litigation steps rather than serve as an accord and satisfaction. The agreement included disclaimers allowing parties to litigate unresolved cost allocations in the ongoing legal action, and no claims were dismissed due to it. The rescission of the settlement occurred within the context of the original lawsuit, making it a dispute under that contract. The trial court properly awarded the Glews attorney fees related to the settlement agreement and its rescission. Further assignments of error regarding the rescission are not addressed since the effective offer of judgment resolves any prior errors. The trial court's award of attorney fees to the Glews as the prevailing party on their counterclaim under the litigation clause is affirmed.

In legal proceedings concerning contracts or leases executed after September 21, 1977, if such agreements stipulate that attorney's fees and costs incurred for enforcement will be awarded to one party, the prevailing party is entitled to reasonable attorney's fees in addition to other costs. A unilateral attorney fee provision is deemed reciprocal, allowing the other party to also seek fees. In the case of Seaborn's offer of $4,500 after extensive litigation, the offer lacked explicit language regarding costs or fees and did not dismiss the collection claim, thereby leaving the potential for the opposing party to seek attorney fees at trial. It is recommended that offers under Rule 68 explicitly state inclusion of attorney fees to prevent additional liability for fees beyond the offered amount. The underlying statutes must clarify whether attorney fees are considered part of costs to avoid ambiguity in settlements.