Central Washington Asphalt, Inc. v. Dep't of Transportation

Opinion

FILED

AUGUST 20, 2026

In the Office of the Clerk of Court WA State Court of Appeals, Division III

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON DIVISION THREE

CENTRAL WASHINGTON ASPHALT, ) INC., a Washington corporation, ) No. 41078-1-III )

Appellant, )

)

v. )

) UNPUBLISHED OPINION WASHINGTON STATE DEPARTMENT ) OF TRANSPORTATION, )

)

Respondent. )

HILL, J. — Central Washington Asphalt, Inc. (CWA) and the Washington State Department of Transportation (Department) arbitrated a dispute arising under their public works contract. Both parties reserved the right to request attorney fees depending on the arbitrator’s decision. The arbitrator found in favor of CWA for an amount that exceeded its settlement offer to the Department. CWA filed a post-award petition for fees, which the arbitrator denied as untimely under American Arbitration Association (AAA) R-51(a). CWA filed a motion to confirm the arbitration award in superior court and requested attorney fees, arguing that fees were mandatory under RCW 39.04.240. The superior court confirmed the award but denied CWA’s request for fees.

On appeal, CWA argues it is entitled to attorney fees under RCW 39.04.240, and the arbitrator exceeded his authority by denying its request pursuant to an AAA rule that concerns clerical errors in an award. The Department argues the arbitrator was

Cent. Wash. Asphalt v. Dep’t of Transp. authorized to reject CWA’s request for attorney fees under the rule, and RCW 39.04.240 does not apply to arbitration.

We agree with CWA. The arbitrator committed facial legal error and exceeded his authority by rejecting CWA’s request for fees when it was entitled to those fees under Washington law.

BACKGROUND

The basis for this appeal arises from an arbitration dispute between CWA and the Department. A public works project was awarded to CWA by the Department’s North Central Region. A dispute emerged concerning whether certain items of work fell within the scope of the bid documents.

The matter proceeded to arbitration in October 2024. At the conclusion, counsel for both parties informed the arbitrator that they reserved the right to request attorney fees following the decision, even though they were not currently seeking said fees. The arbitrator later ruled in favor of CWA. However, the arbitrator held that each party would bear its own attorney fees and costs.

CWA filed a post-award petition requesting that the arbitrator tax CWA’s legal expenses to the arbitration award pursuant to RCW 39.04.240 and RCW 4.84.250. CWA provided the Department’s settlement offer, requested reasonable attorney fees under RCW 39.04.240, and outlined reasonable expenses. The arbitrator declined to review the petition for post-award fees based on AAA rule R-51(a). The rule reads:

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Within 20 calendar days after the transmittal of an award, the arbitrator on his or her initiative, or any party, upon notice to the other parties, may request that the arbitrator correct any clerical, typographical, technical, or computational errors in the award. The arbitrator is not empowered to redetermine the merits of any claim already decided.

AM. ARB. ASS’N, CONSTRUCTION INDUSTRY ARBITRATION RULES AND MEDIATION PROCEDURES r. R-51(a) at 34 (July 1, 2015) (this rule was recodified as R.52(a) in 2024), https://www.adr.org/media/va5jdqiq/constructionrules_web_0.pdf [https://perma.cc/XSK2-4RUQ]. Because CWA filed its post-award petition five days after the rule’s deadline, the arbitrator concluded he did not have jurisdiction to modify the award.

CWA filed a motion in superior court to “Confirm Arbitration Award and Tax Attorney Fees as Costs.” Clerk’s Papers at 6-28 (some capitalization omitted). CWA argued that the arbitrator was required to award it attorney fees pursuant to RCW 39.04.240. The trial court confirmed the judgment from the arbitration award and denied CWA’s request for attorney fees and arbitration expenses.

CWA appeals.

ANALYSIS

Standard of Review Under RCW 7.04A.230(1)(d), courts shall modify an arbitration award if the arbitrator exceeds their authority. Arbitrators exceed their authority “when the face of the arbitration award exhibits an erroneous rule of law.” Mainline Rock & Ballast, Inc. v.

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Cent. Wash. Asphalt v. Dep’t of Transp. Barnes, Inc., 8 Wn. App. 2d 594, 608-09, 439 P.3d 662 (2019). In determining whether an error occurred, courts apply the facial legal error standard. Id. at 609. Unless the court identifies the arbitrator’s adoption of an erroneous rule or mistake in applying the law on the face of the award, the court will not vacate or modify the decision. Id. Courts may not search the arbitral proceedings for legal error. Id. The party seeking to vacate the award bears the burden of demonstrating the arbitrator’s error. Id.

Applicable Law “Private arbitration in Washington State is governed exclusively by statute.”

Broom v. Morgan Stanley DW Inc., 169 Wn.2d 231, 236, 236 P.3d 182 (2010). The prevailing party in an action arising out of a public works contract is entitled to attorney fees. RCW 39.04.240; RCW 4.84.250; Am. Safety Cas. Ins. Co. v. City of Olympia, 162 Wn.2d 762, 773, 174 P.3d 54 (2007). A party prevails when the recovery either equals or exceeds the amount offered in a settlement by the party seeking relief. RCW 4.84.260.

Does Arbitration Constitute an Action?

The Department contends CWA is not entitled to attorney fees under RCW 39.04.240 and RCW 4.84.260 because the pertinent statutes are only applicable to actions, which do not include arbitration. CWA argues that the plain language and

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Cent. Wash. Asphalt v. Dep’t of Transp. legislative history of RCW 39.04.240 show that arbitration falls under the definition of an action under the relevant statutes.

CWA supports its position by citing to International Association of Fire Fighters, Local 46 v. City of Everett, 146 Wn.2d 29, 42 P.3d 1265 (2002). There, the trial court analyzed RCW 49.48.030, which mandated an award of attorney fees in an action for wages. Id. at 34. Local 46 prevailed in an arbitration proceeding against the City of Everett and was awarded backpay, but the City of Everett refused to pay attorney fees. Id. at 33. Local 46 filed a complaint to recover the attorney fees, and the superior court granted the City of Everett’s motion for summary judgment, refusing to grant fees. Id.

On appeal, the City of Everett argued the term “action” in the statute did not include arbitration proceedings. Id. at 36-37. Our Supreme Court rejected this argument. First, it reasoned arbitration can serve as a substitute for a judicial action and that arbitrators “‘become the judges of both the law and the facts.’” Id. at 38 (internal quotation marks omitted) (quoting N. State Constr. Co. v. Banchero, 63 Wn.2d 245, 249- 50, 386 P.2d 625 (1963) (per curiam)). In the context of the statute at issue in that case, the court held that “[a] restrictive interpretation of ‘action’ would preclude recovery of attorney fees in cases involving arbitration even though the employee is successful in recovering wages or salary owed.” Id. at 41. The court reasoned that excluding arbitration from the definition of an action would be inconsistent with legislative policy and that RCW 49.48.030 is remedial in nature. Id.

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Consistent with Fire Fighters, we hold that arbitration constitutes an action under RCW 39.04.240. First, the statute is remedial in nature. It provides a right for prevailing parties to recover attorney fees when certain conditions are satisfied. Excluding arbitration from the definition of “action” is the type of restrictive interpretation that Fire Fighters sought to avoid for remedial statutes. Id.

Second, holding that “action” does not include arbitration under RCW 39.04.240 ignores public policy and the language within the statute. RCW 39.04.240(2) explicitly prevents parties to a public works contract from waiving the right to attorney fees. “RCW 39.04.240 was meant to act as a form of protection for contractors who could not otherwise receive attorney fees.” Conway Constr. Co. v. City of Puyallup, 197 Wn.2d 825, 839, 490 P.3d 221 (2021). No evidence exists that the legislature intended to allow parties to waive this right merely by submitting to arbitration. This holding would run contrary to the policy outlined in the statute.

Lastly, the purpose of RCW 39.04.240 is to encourage settlements and parties to “carefully analyze the merits of their claims.” H.B. 1671, 56th Leg., Reg. Sess. (Wash. 1999). These purposes are equally applicable to arbitration, and we see no reason to exclude arbitration given these purposes.

The Department advocates for a different conclusion, citing Broom, 169 Wn.2d at 236. There, the Washington Supreme Court considered whether RCW 4.16.005, which provides a general statute of limitations, applied to arbitration proceedings. Id. at 243.

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Cent. Wash. Asphalt v. Dep’t of Transp. The court determined that arbitration proceedings do not constitute actions under RCW 4.16.005 strictly for purposes of the statute of limitations. Id. at 244. While RCW 4.16.005 does not explicitly distinguish between judicial actions and arbitration proceedings, the legislature distinguishes between arbitration proceedings and judicial actions throughout chapter 7.04A RCW, specifically within RCW 7.04A.060, RCW 7.04A.080, and RCW 7.04A.210. Id. at 244.

The Department, relying on Broom, argues that neither RCW 39.04.240 nor RCW 4.84.250 through .280 refers to contractual arbitrations in chapter 7.04A RCW as actions. It focuses on the language within RCW 4.84.010, which separately refers to trial and mandatory arbitration. The Department asserts this distinction suggests the legislature did not intend to include contractual arbitrations within chapter 4.84 RCW or in RCW 39.04.240, which adopts chapter 4.84 RCW’s fee-shifting provisions. We disagree. The distinction between trial and mandatory arbitration within RCW 4.84.010 relates specifically to the recovery of expenses in obtaining evidence. We do not see this distinction as evidence of the legislature’s intent to exclude arbitration from action. Furthermore, the statute at issue in Broom was not remedial in nature, which was central to the court’s holding in Fire Fighters.

The Department next focuses on the language within three different statutes in an attempt to identify a distinction between a judicial action and arbitration under RCW 39.04.240. First, the Department cites RCW 39.04.240(1), which requires parties

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Cent. Wash. Asphalt v. Dep’t of Transp. to comply with deadlines for settlement offers in order to be entitled to attorney fees. One such deadline references the service and filing of the summons and complaint, which the Department believes limits the scope of this statute to judicial actions. RCW 39.04.240(1). Second, RCW 4.84.250 requires the court to fix attorney fees when certain conditions are met. The Department contends that because the court must fix the amount of fees, the legislature intended to exclude arbitration from the term “action.”

While this language indicates that the legislature crafted its language with judicial actions in mind, this does not overcome our Supreme Court’s approach to construing remedial statutes liberally. Again, arbitration can serve as a substitute for a judicial action. Fire Fighters, 146 Wn.2d at 38. Because RCW 39.04.240 and the statutes it incorporates are remedial in nature, we construe its meaning liberally in order to protect the rights of prevailing parties in public works disputes.

Lastly, RCW 39.04.240(2) states that the rights provided under the section may not be waived, and any such waiver is void as against public policy:

The rights provided for under this section may not be waived by the parties to a public works contract that is entered into on or after June 11, 1992, and a provision in such a contract that provides for waiver of these rights is void as against public policy. However, this subsection shall not be construed as prohibiting the parties from mutually agreeing to a clause in a public works contract that requires submission of a dispute arising under the contract to arbitration.

The Department contends that the word “however” implies that contractual arbitration serves as an exception to the rule against waiver. We disagree. The final

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Cent. Wash. Asphalt v. Dep’t of Transp. sentence of this subsection does not indicate that the parties can waive attorney fees by submitting a dispute to a public works contract to arbitration; rather, the statute clarifies that it shall not be interpreted to prevent parties from submitting to arbitration.

We agree with CWA that arbitration proceedings constitute an “action” for the purposes of attorney fees under RCW 39.04.240. Consistent with the Supreme Court’s decision in Fire Fighters, we must interpret the statute liberally in order to effectuate its purpose.

Facial Legal Error We now turn to CWA’s contention that the arbitrator exceeded his authority by refusing to grant CWA’s request for attorney fees. CWA argues it was entitled to attorney fees under RCW 39.04.240, and the arbitrator committed facial legal error by denying its request as untimely under AAA rule R-51. The Department argues the statute is silent on the deadline to request attorney fees, and the arbitrator was authorized to rely on the AAA rules to dismiss the request. We agree with CWA.

A. Whether the Arbitrator Could Rely on R-51 to Deny Attorney Fees The arbitrator denied CWA’s request for attorney fees based on an AAA rule that addresses the correction of clerical errors in an award:

R-51. Modification of Award

(a) Within 20 calendar days after the transmittal of an award, the arbitrator on his or her initiative, or any party, upon notice to the other parties, may request that the arbitrator correct any clerical, typographical, technical, or

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computational errors in the award. The arbitrator is not empowered to redetermine the merits of any claim already decided.

(b) If the modification request is made by a party, the other parties shall be given 10 calendar days to respond to the request. The arbitrator shall dispose of the request within 20 calendar days after transmittal by the AAA to the arbitrator of the request and any response thereto.

(c) If applicable law provides a different procedural time frame, that procedure shall be followed.

AM. ARB. ASS’N, CONSTRUCTION INDUSTRY ARBITRATION RULES AND MEDIATION PROCEDURES r. R-51(a) at 34.

The AAA rules do not provide a definition for “clerical” or the other types of errors listed. Therefore, we turn to CR 60(a), which addresses clerical mistakes in judgments. In the context of CR 60, clerical errors are those based on mere mechanical mistakes while judicial errors are those of substance that embody the trial court’s intention. Marchel v. Bunger, 13 Wn. App. 81, 84, 533 P.2d 406 (1975).

Here, the arbitrator explicitly ruled that each party would bear its own attorney fees and costs. The Department contends that we should interpret R-51(a) as granting the arbitrator the authority to modify any part of its award, not just clerical errors, because this is the only AAA rule that addresses modification. We disagree. Such a reading would require us to ignore the clear language of the rule, limiting its scope to correcting clerical errors and clarifying judgments. Because the arbitrator ruled in the initial decision that each party would bear its own costs, CWA’s subsequent request for fees went beyond seeking correction of a clerical error or ambiguity requiring clarification.

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Cent. Wash. Asphalt v. Dep’t of Transp. We conclude the arbitrator inappropriately relied on R-51 to create a deadline that applies strictly to correcting clerical errors, which is inapplicable to its decision to deny attorney fees.

B. Whether the Arbitrator’s Ruling Conflicts with Washington Law CWA argues that the arbitrator committed facial legal error when it ordered each party to bear its own attorney fees and costs. CWA likens the error to the one appealed in Kennewick Education Association v. Kennewick School District No. 17, 35 Wn. App. 280, 666 P.2d 928 (1983). The Kennewick Education Association (KEA) and Kennewick School District 17 (District) submitted a dispute to arbitration. Id. at 281. The arbitrator found in favor of KEA and ordered the District to pay punitive damages. Id. The District did not comply with the award, and KEA filed an action to enforce the arbitrator’s decision. Id. The trial court granted the District’s motion for summary judgment. Id.

On appeal, we held the arbitrator committed facial legal error because punitive damages are contrary to the policy of this state and are prohibited unless authorized by statute. Id. at 282. Because punitive damages were not authorized by statute, the arbitrator exceeded their authority, as the award did not comply with Washington law. Id.

CWA attempts to distinguish this matter from our more recent decision in Mainline. In that case, Mainline Rock and Barnes had a payment dispute under their

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Cent. Wash. Asphalt v. Dep’t of Transp. commercial contract for the mining and crushing of rock. Mainline, 8 Wn. App. 2d at 596, 602. They submitted the dispute to arbitration pursuant to their contract, and the panel ruled in favor of Barnes. Id. However, Barnes believed it was entitled to a separate payment for waste material. Id. at 604. Barnes filed a motion to vacate the arbitration award in the superior court, arguing the arbitrator considered improper evidence and failed to grant pre-award interest and attorney fees under the agreement. Id. at 606. The trial court denied the motion and confirmed the arbitration award at Mainline’s request. Id.

On appeal, Barnes argued the arbitrator exceeded their authority under RCW 7.04A.230(1)(d) based on its consideration of improper evidence and failure to award attorney fees and pre-award interest. Id. Regarding the improper evidence issue, we limited our review to the panel’s three-page decision along with the dissenting opinion and held that Barnes failed to demonstrate legal error on the face of the award. Id. at 608, 611-14. Barnes argued the original agreement between the parties contained an integration clause that the panel ignored; however, any finding of error by the arbitrator would have required going beyond the face of the award and reviewing the contract between the parties. Id. at 612.

We denied Barnes’s request for pre-award interest for similar reasons.

Id. at 614-15. We also denied Barnes’s attorney fees argument because the award made no mention of a mandatory attorney fees clause in the agreement, and the arbitrator found

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Cent. Wash. Asphalt v. Dep’t of Transp. that neither party was the prevailing party in accordance with Washington case law. Id. at 615-16.

Unlike Mainline, CWA argues that we need not go beyond the face of the award to find facial legal error. We agree. Here, the arbitrator denied CWA’s right to fees pursuant to an irrelevant arbitration rule, and his refusal to follow Washington law governing mandatory attorney fees on this basis constitutes facial legal error. Furthermore, in Mainline we refused to examine the underlying contract between the parties to search for a mandatory fee provision. Here, we are concerned with a mandatory fee statute, which does not require us to examine evidence or an underlying contract.

The Department counters by citing Trusley v. Statler, 69 Wn. App. 462, 849 P.2d 1234 (1993). There, the arbitrator dismissed Trusley’s complaint and denied the Statlers’ requested attorney fees under RCW 4.84.185, which provides courts with the authority to grant attorney fees based on a frivolous claim or defense. Id. at 463. The Statlers filed a motion in the superior court for judgment on the award and requested reasonable attorney fees under the mandatory fee statute, RCW 4.84.250, which the court granted. Id. at 463-64.

We reversed the superior court’s award of attorney fees because the Statlers did not request that the arbitrator exercise their authority and award attorney fees under RCW 4.84.250. Id. at 464. The superior court delegated the authority to award attorney

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Cent. Wash. Asphalt v. Dep’t of Transp. fees in mandatory arbitration pursuant to a mandatory arbitration rule in Yakima County. Id. Because the Statlers failed to request that the arbitrator exercise its discretion to award fees specifically under RCW 4.84.250, the fees were not part of the arbitration award, and the superior court could not amend the award. Id.

We reject the Department’s argument that Trusley prevents courts from awarding attorney fees when fees are not granted by the arbitrator. Unlike CWA, the Statlers failed to request fees to the arbitrator under the mandatory statute. Id. at 463. Instead, CWA asked the arbitrator to award fees under the discretionary statute and waited to request fees under the mandatory statute when moving the superior court for judgment on the arbitrator’s award. CWA reserved its right to request fees at the conclusion of arbitration proceedings pending the award. At the conclusion, CWA had no basis to formally request fees because its right to fees depended on whether the award matched or exceeded its settlement offer. RCW 4.84.260. After the arbitrator issued his award, CWA requested fees to the arbitrator, which was denied. Again, unlike the Statlers in Trusley, CWA requested fees from the arbitrator, not the trial court, and did so after learning it was entitled to fees given the amount of the award.

The parties also rely on Broom. The Brooms filed an action against Morgan Stanley, asserting negligence and other claims. Broom, 169 Wn.2d at 235. The parties submitted their claims to arbitration in accordance with their agreement. Id. The arbitration panel ruled that all but one of the Brooms’ claims were barred by state and

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Cent. Wash. Asphalt v. Dep’t of Transp. federal statutes of limitations. Id. The Brooms moved in superior court to vacate the arbitration award, arguing the arbitrator committed facial legal error because the statute of limitations does not apply to arbitration. Id. The trial court agreed and vacated the award. Id. The Washington State Supreme Court affirmed. Id. at 245. It held that the arbitrator exceeded its authority by dismissing the Brooms’ claims because the statute of limitations does not apply to arbitration proceedings. Id. at 244.

CWA likens Broom to the facts at hand, arguing that the arbitrator violated state law by refusing to award attorney fees. The Department claims Broom supports its position because the arbitrator in the present matter properly refused to apply the attorney fee statute into its award. We agree with CWA. The attorney fee statute at issue, unlike the statute of limitations in Broom, is remedial in nature and the statute must be construed liberally.

CONCLUSION

The arbitrator exceeded its authority by rejecting CWA’s request for attorney fees.

We remand the matter to the trial court to calculate and award CWA its reasonable attorney fees. 1

1 The Department argues CWA is not owed fees for the time it spent preparing an arbitration brief that was not relied on by the arbitrator. This issue will be decided by the trial court.

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To the extent that CWA requests arbitration expenses, we reject this argument.

RCW 39.04.240 is restricted to attorney fees and makes no mention of expenses. RCW 4.84.010 requires the court to award costs in certain circumstances, but this specific statute was not made applicable to public works contracts within RCW 39.04.240.

CWA requests reasonable attorney fees on appeal pursuant to RCW 39.04.240 and RCW 7.04A.250(3). CWA’s request for reasonable attorney fees on appeal is granted. The Department also requests reasonable attorney fees pursuant to RCW 7.04A.250(3). Because CWA prevails on this appeal, we deny the Department’s request for fees.

A majority of the panel has determined this opinion will not be printed in the Washington Appellate Reports, but it will be filed for public record pursuant to RCW 2.06.040.

_____________________________

Hill, J.

WE CONCUR:

_____________________________ _____________________________ Cooney, A.C.J. Murphy, J.