CKP, Inc. v. GRS Construction Co.

821 P.2d 63, 63 Wash. App. 601, 1991 Wash. App. LEXIS 455
CourtCourt of Appeals of Washington
DecidedDecember 23, 1991
Docket23681-4-I; 23733-1-I
StatusPublished
Cited by46 cases

This text of 821 P.2d 63 (CKP, Inc. v. GRS Construction Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
CKP, Inc. v. GRS Construction Co., 821 P.2d 63, 63 Wash. App. 601, 1991 Wash. App. LEXIS 455 (Wash. Ct. App. 1991).

Opinion

Baker, J.

Park South Apartments (Park South), a limited partnership, and GRS Construction Company (GRS) appeal from the trial court's judgment and decree of foreclosure of materialmen's liens in favor of CKP. CKP cross-appeals from the trial court's summary judgment dismissal of its liens pursuant to RCW 60.04.010 and .040, to the extent that they were based on the statutory agency of GRS for Park South. CKP further alleges that its fee award should have been in the form of an in personam rather than an in rem judgment against Park South. We affirm in part and reverse in part.

*605 I

Facts

CKP entered into a subcontract with GRS, the prime contractor, to do site work and utility installation for the construction of an apartment complex, Park South. CKP commenced work on the Park South site on May 9, 1985. A work schedule of 45 days was contemplated in the original contract, based upon the scope of the work then set forth. For various reasons, delays ensued and disputes arose. In the course of the project, CKP performed certain extra work at the request of GRS prior to the issuance of written change orders authorizing payment for extras.

On July 16, 1985, the grading plans were revised. The new grading plans would have required virtually all of the installed utilities to be adjusted. The parties were unable to agree on a contract modification pertaining to a revised schedule for completion and whether additional change orders were necessary to complete the revised plans. GRS threatened to withhold payment unless CKP agreed to terms it proposed. However, CKP never agreed to the proposed terms and walked off the job on or about September 4, 1985.

CKP filed its lien on October 3, 1985, in the amount of $56,375. CKP mailed Park South the materialmen's notice required by RCW 60.04.020 on October 24, 1985. The notice of Hen specificaHy aUeged that additional work in excess of that required by the subcontract had been performed, and the fuU value of such labor, material and equipment was being calculated. CKP reserved the right to supplement the claim of Hen by such additional amounts.

A complaint was subsequently filed for foreclosure of the Hen. In the complaint and in an amended complaint, CKP alleged an additional $17,005 was owing, and that as a result of the changes and modifications to the scope of work demanded by GRS, CKP had suffered farther damages in an amount to be proven at time of trial. CKP further expressly prayed to be allowed to amend its claim of Hen to conform to the proof presented at trial.

*606 GRS, Park South, and other parties involved at the trial level counterclaimed against CKP for damages in the approximate sum of $325,000, with other amounts to be proven at trial.

The parties stipulated that all Park South partners, including limited partners brought into the partnership after the filing of CKP's lien, and United Bank, which provided substitute financing in 1986 after the filing of the lien, were "fully aware of the existence of this lawsuit, the lien foreclosure action, and that a Lis Pendens was against the property."

In a pretrial motion for summary judgment, the trial court ruled that CKP was not required to send a materi-almen's notice if GRS was acting as an actual agent for Park South, but that a question of fact remained as to whether GRS was acting in such a capacity. The court further ruled that CKP's lien authorized by RCW 60.04.040 could not be created through a statutory agent. It dismissed CKP's cause of action for foreclosure of its lien pursuant to RCW 60.04.010 for materials furnished prior to August 24, 1985 (60 days preceding notice), and its lien pursuant to RCW 60.04.040 for labor, materials or equipment furnished in the clearing, grading or filling of the subject property, to the extent that GRS ordered the work solely in its capacity as a statutory agent for Park South.

A 6-week bench trial ensued. The court held that the threats by GRS to withhold payment for completed work and the refusal to allow further change orders for the revised plans constituted a substantial breach of the contract by GRS and justified CKP's termination of the work. The court further concluded that because GRS was Park South's actual agent, CKP was not required to give a materialmen's notice to Park South or GRS and that CKP's lien was valid. The court allowed the lien to be amended in the full amount of the judgment. Judgment was awarded in the amount of $102,670.50, plus prejudgment interest from September 15, 1985, in the amount of $40,167.63, together with attorney fees in the amount of $89,500, for a total *607 judgment of $232,338.13 against GRS, secured by the real property owned by Park South.

Further recitation of the facts will follow as necessary for resolution of the issues herein.

II

Park South Appeal

A. Actual Agency of GRS for Park South.

Park South seeks dismissal of CKP's lien, claiming that GRS was not its actual agent. It argues that GRS retained the right to control the manner and method in which its work was done, a characteristic of an independent contractor as opposed to an agent. CKP responds that GRS was the actual agent of Park South for the limited purpose of subjecting Park South's property to hens. CKP asserts that Park South gave GRS that authority and consented to a limited agency for the purpose of establishing hens under RCW 60.04.010 and .040.

RCW 60.04.040 authorizes a hen against real property for labor, materials, and equipment furnished in the clearing, grading and filling of such property where such work is "at the request of the owner of any real property, or his agent". RCW 60.04.010 authorizes a hen against real property for labor, materials, and equipment furnished at the instance of the owner of the property or his agent. The section further provides:

and every registered or licensed contractor, registered or licensed subcontractor, architect, or person having charge, of the construction, alteration or repair of any property subject to the hen as aforesaid, shall be held to be the agent of the owner for the purposes of the establishment of the lien created by this chapter[.]

An express or implied agency relationship may exist when one party acts at the instance of and, in some material degree, under the direction and control of another. Hewson Constr., Inc. v.

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Cite This Page — Counsel Stack

Bluebook (online)
821 P.2d 63, 63 Wash. App. 601, 1991 Wash. App. LEXIS 455, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ckp-inc-v-grs-construction-co-washctapp-1991.