Fluor Enterprises, Inc. v. WALTER CONST., LTD.

172 P.3d 368
CourtCourt of Appeals of Washington
DecidedNovember 19, 2007
Docket59806-6-I
StatusPublished
Cited by15 cases

This text of 172 P.3d 368 (Fluor Enterprises, Inc. v. WALTER CONST., LTD.) 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
Fluor Enterprises, Inc. v. WALTER CONST., LTD., 172 P.3d 368 (Wash. Ct. App. 2007).

Opinion

172 P.3d 368 (2007)

FLUOR ENTERPRISES, INC., a California corporation, Respondent,
v.
WALTER CONSTRUCTION, LTD., a Washington corporation, formerly known as Walter and SCI Construction, Ltd., Walter Construction (USA), Inc, a Washington corporation; Walter Construction (USA), LLC, a Washington limited liability company, Appellant.

No. 59806-6-I.

Court of Appeals of Washington, Division 1.

November 19, 2007.

*369 Richard Miles Stanislaw, Christopher Wright, Stanislaw Ashbaugh LLP, Seattle, WA, for Respondent.

Catherine Wright Smith, Howard Mark Goodfriend, Edwards Sieh Smith & Goodfriend PS, Arthur Daniel McGarry, Bradley Lew Powell, Oles Morrison Rinker & Baker LLP, Seattle, WA, for Appellant.

PUBLISHED IN PART

AGID, J.

¶ 1 This appeal involves consolidated claims for breach of a settlement agreement and breach of a construction subcontract that arose out of a construction dispute between a contractor and subcontractor. The trial court entered judgment for the contractor on an arbitration award on the settlement agreement claim. The contractor sought to enforce the judgment by obtaining a writ of execution and directing a sheriff's sale of the subcontractor's pending construction claim against the contractor. The subcontractor moved to quash the writ and stay the sheriff's sale, but the trial court denied the motion. We granted discretionary review. Because both parties' claims were consolidated in the same lawsuit and the trial court did not enter CR 54(b) findings that the judgment confirming the award was final and there was no just reason to delay its entry, the judgment was not yet enforceable. Accordingly, we reverse and remand to the trial court.

FACTS

¶ 2 In 1996, the Department of Corrections (DOC) entered into a construction contract with Fluor Enterprises, Inc. (Fluor) to construct the Stafford Creek Corrections Center for approximately $127 million. Fluor then subcontracted the structural steel and concrete work to Walter Construction, Ltd. (Waiter). Disputes arose between DOC and Fluor and between Fluor and Walter resulting in several lawsuits which have a complicated procedural history.

¶ 3 The litigation between Fluor and Walter that is the subject of this appeal involves two sets of claims. The first arose out of a settlement agreement between Walter and Fluor (the "Settlement Agreement" suit), and the other related to the construction subcontract (the "Construction Claims" suit). These claims arose when DOC sought a declaratory judgment in King County Superior Court to end or limit its liability to Fluor. Walter and Fluor decided to join forces against DOC. They entered into an agreement (the "Settlement Agreement") in which Walter agreed to assign its claims against DOC to Fluor and to share in whatever Fluor recovered from DOC in its suit against DOC. Walter also agreed to release Fluor from a $3 million subcontract balance, and Fluor agreed to pay Walter $3 million up front.

*370 ¶ 4 Fluor then asserted the claims Walter had assigned to it in its answer to DOC's complaint. DOC moved to strike those portions of Fluor's claim. The trial court granted the motion, ruling that the Settlement Agreement was invalid under the Severin[1] doctrine.

¶ 5 Following this order, Fluor and Walter pursued independent claims against each other. Fluor first sued Walter in King County Superior Court seeking the return of the $3 million paid under the Settlement Agreement (the "Settlement Agreement" suit). Walter counterclaimed, asserting that Fluor breached the Settlement Agreement and claiming resulting damages. Walter then sued Fluor in Grays Harbor County Superior Court, alleging it breached the construction contract and reserving its right to compel arbitration under the subcontract (the "Construction Claim" suit). This case was later transferred to King County Superior Court.

¶ 6 In September 2005, Fluor moved for sanctions against Walter for discovery violations in the Settlement Agreement suit. In October 2005, the trial court granted the motion, ordering sanctions against Walter and striking Walter's counterclaims. Fluor then amended its complaint to seek additional damages arising from Walter's breach of the construction subcontract.

¶ 7 In February 2006, Walter filed a motion in the court to which the Construction Claims suit was assigned to consolidate both cases, compel arbitration of the construction claims, and stay other proceedings. That trial judge granted the motion and consolidated the cases before the judge who was presiding over the Settlement Agreement suit.

¶ 8 The parties ultimately proceeded to arbitration on the Settlement Agreement suit in the summer of 2006. Arbitration on the Construction Claims was set for September 2007 before a panel of American Arbitration Association ("AAA") arbitrators. In August 2006, Fluor prevailed in the Settlement Agreement arbitration. The arbitrator awarded it $3 million, but he denied Fluor's request to enjoin Walter from pursuing its construction claims. Fluor then moved in the trial court to confirm the arbitrator's award and to enter judgment on that award. Fluor also moved to clarify the trial court's original 2005 sanctions order that dismissed Walter's counterclaims in the Settlement Agreement suit.

¶ 9 On October 11, 2006, the trial court entered judgment for Fluor on the Settlement Agreement claim and clarified the previous sanctions order by stating: "any counterclaim by Walter against Fluor on the Stafford Creek Project is precluded." Fluor then executed on the judgment and obtained writs of garnishment. Walter moved to quash these writs, but the trial court denied the motion. Fluor also asked the arbitrators who were scheduled to hear the Construction Claims to terminate those claims based on the trial court's October 11, 2006 order dismissing Walter's counterclaims.

¶ 10 Waiter then filed a notice of appeal of the trial court's October 11, 2006 order, but shortly thereafter asked this court to dismiss it as premature. Walter argued that the appeal was premature because the AAA arbitrators had not yet decided whether the trial court's order terminated Walter's claims in the Construction Claims suit. Walter reasoned that if the AAA arbitrators did not terminate its construction claims, there would be nothing from which to appeal. While Walter's motion to dismiss the appeal was pending in this court, the AAA arbitrators denied Fluor's motion to terminate Walter's construction claims. On March 12, 2007, this court granted Walter's motion to dismiss the appeal, determining that it was only final as to some of the claims and therefore not yet appealable.

¶ 11 Meanwhile, Fluor obtained an ex parte writ of execution for the Settlement Agreement judgment which directed a sheriff's sale of Walter's pending construction claim, Walter's only claimed asset. Walter moved to quash the writ of execution and *371 stay the sale. On March 23, 2007, the trial court denied the motion and Walter sought discretionary review. While Walter's motion for discretionary review was pending, Fluor moved in the trial court to sever the Construction Claims from the Settlement Agreement claims. The trial court denied the motion on May 15, 2007. On June 17, 2007, this court granted discretionary review of the trial court's order denying Walter's motion to quash the writ of execution

I. Enforceability of the Settlement Agreement Judgment

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Bluebook (online)
172 P.3d 368, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fluor-enterprises-inc-v-walter-const-ltd-washctapp-2007.