Floor Express, Inc. v. Daly

138 Wash. App. 750
CourtCourt of Appeals of Washington
DecidedMay 22, 2007
DocketNo. 34301-1-II
StatusPublished
Cited by5 cases

This text of 138 Wash. App. 750 (Floor Express, Inc. v. Daly) 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
Floor Express, Inc. v. Daly, 138 Wash. App. 750 (Wash. Ct. App. 2007).

Opinion

¶1 Margaret Daly subcontracted with Floor Express, Inc., to provide and install flooring at Providence Mother Joseph Care Center (Mother Joseph). Daly withheld a portion of the contract balance from Floor Express and cancelled some work, claiming that Floor Express defectively installed improper flooring. When Floor Express sued Daly to recover the outstanding balance, Daly counterclaimed for the cost of replacing the floor. At the beginning of trial, Floor Express moved to dismiss the counterclaim, arguing that Daly did not have standing to sue for the allegedly defective floor and that Mother Joseph, the only party damaged according to Floor Express, was a necessary party. The trial court granted the motion, and Daly appealed. We reverse, holding that Daly has standing to sue for Floor Express’s alleged breach of their contract, that Mother Joseph is not a necessary party to the action, and that Daly has a damages claim because it is liable under its contract with Mother Joseph for the cost of fixing the floor.

Armstrong, J.

FACTS

¶2 Margaret Daly subcontracted with Floor Express to provide and install flooring materials at Mother Joseph.

[753]*753¶3 During the remodel, one of Daly’s contractors punctured a water pipe, causing damage to the newly installed flooring in the care center’s main dining room. Shortly thereafter, Daly contracted with Floor Express to purchase new materials and to have Floor Express reinstall flooring in the main dining room. Floor Express installed the new flooring and billed Daly $4,158.78.

¶4 Before Floor Express finished installing the floor, Mother Joseph asked Daly to cancel the contract, citing problems with Floor Express’s work. Daly cancelled its contract with Floor Express and refused to pay for the dining room reinstallation. Daly also cancelled two other outstanding invoices and refused to pay Floor Express’s $2,003.70 restocking fee on those invoices.

¶5 Floor Express sued Daly and its bonding company, Colonial American Casualty & Surety Company. Daly counterclaimed for the cost of replacing all of the flooring that Floor Express installed and for the cost of removing and replacing cabinetry that contractors installed over the flooring. Daly alleged damages in excess of $35,000 resulting from Floor Express’s breach of contract and misrepresentations.

¶6 Daly and Mother Joseph entered a joint prosecution and defense agreement. Through the agreement, Daly agreed to prosecute, at her own expense, a breach of contract claim against Floor Express, seeking all damages that Floor Express’s breaches caused. She also agreed to pay any recovered proceeds to Mother Joseph up to the amount that Mother Joseph had paid her for the floors. Mother Joseph agreed to indemnify Daly from any future claims that a third party may bring related to the floors.

¶7 On the first day of trial, Floor Express moved to dismiss the counterclaim, arguing that Mother Joseph was a necessary party and that Daly had no standing to sue Floor Express for breach since the defective floor and materials injured only Mother Joseph. The trial court allowed Daly time to join Mother Joseph. Daly refused to do so but presented an addendum to the joint prosecution [754]*754agreement in which Mother Joseph stated that it intended to hold Daly responsible for the defective floor. The court determined that the agreement did not represent an assignment of Mother Joseph’s claims to Daly and again allowed Daly time to join Mother Joseph. When Daly again refused, the trial court granted Floor Express’s motion to dismiss.

ANALYSIS

I. Breach of Contract

¶8 Floor Express argues that Mother Joseph has neither required Daly to fix the allegedly defective floors nor sought damages from Daly for the allegedly defective floors. Floor Express also argues that Daly and Mother Joseph’s agreement, and its addendum, do not require Daly to repair the floors or pay Mother Joseph’s cost to repair them. Essentially, Floor Express argues that because any alleged breach of its contract with Daly harmed only Mother Joseph, Daly lacks standing to prosecute the counterclaim.

¶9 A party injured by a breach of contract may recover all damages that accrue naturally from the breach, including any incidental or consequential losses the breach caused. Panorama Vill. Homeowners Ass’n v. Golden Rule Roofing, Inc., 102 Wn. App. 422, 427, 10 P.3d 417 (2000) (citing Eastlake Constr. Co. v. Hess, 102 Wn.2d 30, 46, 686 P.2d 465 (1984)). The purpose of expectation damages is to return the injured party to “as good a pecuniary position as [she] would have had if the” breaching party would have performed properly. Eastlake, 102 Wn.2d at 39 (citing Diedrick v. Sch. Dist. No. 81, 87 Wn.2d 598, 610, 555 P.2d 825 (1976)).

¶10 Daly’s counterclaim against Floor Express alleged that Floor Express failed to “perform all work in a workmanlike manner according to standard practices,” as their contracts required. Clerk’s Papers (CP) at 100. And Daly claims that she will bear the cost of replacing the defective flooring. She also contends that she will incur costs to remove cabinetry before someone can install new flooring [755]*755and that she will then incur costs to reinstall the cabinetry. The addendum to Daly and Mother Joseph’s agreement states that Daly is liable to Mother Joseph for the full extent of Mother Joseph’s damages arising from the allegedly defective flooring. In her declaration, Karen Gormally, Mother Joseph’s executive director, stated that “Mother Joseph[] seeks the cost to remove the incorrect floor, purchase correct flooring material, and install correct flooring material, and then reinstall all fixtures that must be removed in order to accomplish the above.” CP at 595.

¶11 Where a subcontractor breaches its agreement with the general contractor by failing to properly perform the work called for in the agreement, the general contractor’s legal exposure to the owner is a consequential damage of the subcontractor’s breach if that exposure is a reasonably foreseeable consequence of the breach. See Crest Inc. v. Costco Wholesale Corp., 128 Wn. App. 760, 764, 115 P.3d 349 (2005) (a nonbreaching party may recover damages that are reasonably within the parties’ contemplation at the time they made the contract as the probable result of the breach of that contract (quoting Gagliardi v. Denny’s Rests., 117 Wn.2d 426, 446, 815 P.2d 1362 (1991))). And if Floor Express installed defective flooring, it could reasonably foresee that Mother Joseph would hold Daly responsible for correcting the problem.

¶12 Because Daly seeks to recover damages for Floor Express’s breach of their contract, the trial court erred in ruling that Daly lacked standing or did not sustain damages.

II. Is Mother Joseph a Necessary and Indispensable Party?

¶13 The trial court determined that Mother Joseph is a necessary party to pursue the counterclaim.

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Cite This Page — Counsel Stack

Bluebook (online)
138 Wash. App. 750, Counsel Stack Legal Research, https://law.counselstack.com/opinion/floor-express-inc-v-daly-washctapp-2007.