Hosea v. Toth

232 P.3d 576
CourtCourt of Appeals of Washington
DecidedMay 24, 2010
Docket62333-8-I
StatusPublished

This text of 232 P.3d 576 (Hosea v. Toth) 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
Hosea v. Toth, 232 P.3d 576 (Wash. Ct. App. 2010).

Opinion

232 P.3d 576 (2010)

David C. HOSEA, Appellant,
v.
George L. TOTH and Maria L. Perry, Respondents.

No. 62333-8-I.

Court of Appeals of Washington, Division 1.

May 24, 2010.

*577 Timothy J. Knowling, Seattle, WA, for Appellant.

Matthew T. Adamson, Jameson Babbitt Stites & Lombard, Seattle, WA, for Respondents.

SCHINDLER, J.

¶ 1 The Registration of Contractors Act, chapter 18.27 RCW, requires building contractors to file either a surety bond or an assigned savings account with the Department of Labor and Industries (the Department). Under RCW 18.27.040(4), the surety is only liable for the amount of the bond. If multiple claims exceed the amount of the bond, the statute establishes the priority of payments as follows: laborers, claims by residential homeowners for breach of contract, persons furnishing materials or equipment, and taxes owed to the state. Residential homeowners George Toth and Maria Perry (collectively "Toth") and homeowner David Hosea filed separate lawsuits against the same specialty contractor for breach of contract and sued the surety on the bond. The court ordered disbursement of the full amount of the $6000 surety bond to Toth because Toth first obtained a judgment against the contractor. Hosea contends the trial court erred in awarding Toth the full amount of the bond and refusing to disburse the funds on a pro rata basis. Under the plain language of RCW 18.27.040(4), the legislature did not adopt a priority scheme for payments on the bond as between claimants in the same tier based on which party first obtains a judgment. Under RCW 18.27.040(4), where multiple lawsuits in the same statutory priority tier are commenced and pending, the bond proceeds should be disbursed on a pro rata basis. We reverse and remand.

FACTS

¶ 2 On October 26, 2007, Toth filed a complaint in King County Superior Court against contractor Jonathan Griffin, doing business as "Foundations." Toth alleged that Griffin did not comply with the construction contract in performing foundation work. Toth sought approximately $40,000 in damages, equitable relief, and an award of attorney fees. Toth also sued the surety that issued the contractor bond to Griffin, Old Republic Insurance Company, for the full amount of the $6000 bond.

¶ 3 Hosea also filed a lawsuit against Griffin and Old Republic in 2007. Hosea alleged Griffin breached the construction contract to repair and replace the foundation and retaining wall for his garage.[1]

*578 ¶ 4 On January 4, 2008, Toth obtained an order of default against Griffin. On February 28, the court entered a judgment in Toth's favor in the amount of $16,828. On April 11, Hosea obtained an order of default against Griffin. On May 6, Toth, Hosea, and Old Republic entered into a "Stipulation and Order Authorizing Consolidation of Cases for Purposes of Reaching Bond Proceeds, Exoneration of Bond and Reservation of Rights" (Stipulation and Order).

¶ 5 The Stipulation and Order states that both Hosea and Toth filed lawsuits asserting claims against the surety bond issued by Old Republic. In order "to avoid the multiplicity of actions against the bond," the parties agreed that the two lawsuits "should be consolidated for the purposes of reaching the bond proceeds" under one cause number. The parties stipulated that Old Republic could deposit the full amount of the $6000 bond into the King County Court Registry, and agreed to dismiss Old Republic. The parties also agreed that the bond proceeds would not be disbursed absent a court order.

¶ 6 On July 28, Toth filed a motion for disbursement of the bond proceeds. Toth argued that he was "entitled to all of the $6000 in bond proceeds" because he had obtained a judgment first, and the amount of Hosea's claim was unknown. In support of his motion, Toth submitted a copy of the complaint, the order of default, the judgment he obtained, and the Stipulation and Order.

¶ 7 Hosea objected to disbursement of the entire amount of the bond proceeds to Toth. Hosea pointed out that on July 17, his case was noted for a hearing to obtain a judgment, but entry of the judgment had been delayed and the hearing rescheduled for August 13. Hosea submitted the order of default against Griffin and his motion for entry of judgment against Griffin for $43,638 plus attorney fees and costs, the order denying the motion for judgment without prejudice, and a declaration from the arbitrator explaining the procedural issue that delayed entry of the judgment on July 17. The court entered an order disbursing the entire amount of the $6000 surety bond to Toth.

¶ 8 After Hosea obtained a judgment against Griffin for $43,638 plus $12,452 in attorney fees and costs, he filed a motion for reconsideration. The court denied the motion for reconsideration. Hosea appeals.

ANALYSIS

¶ 9 Hosea contends the court erred in disbursing the entire amount of the contractor surety bond to Toth. Hosea asserts that the court's decision to distribute the bond proceeds to a party first obtaining a judgment where there are multiple claims pending that exceed the amount of the bond is contrary to the plain language and intent of the statutory provision for actions against the contractor surety bond as set forth in RCW 18.27.040(4). Toth argues that because RCW 18.27.040(4) does not address the priority of payments for claims within the same priority tier, the common law rule of "first-in-time, first-in-right" applies.

¶ 10 The meaning of a statute is a question of law subject to de novo review. City of Olympia v. Drebick, 156 Wash.2d 289, 295, 126 P.3d 802 (2006). The court's objective is to ascertain and carry out the legislature's intent. Dep't of Ecology v. Campbell & Gwinn, LLC, 146 Wash.2d 1, 9-10, 43 P.3d 4 (2002). If the statute's meaning is plain on its face, then the court must give effect to that plain meaning as the expression of legislative intent. Id. The plain meaning of a statutory provision is derived from the ordinary meaning of its language, as well as the general context of the statute, the related statutory provisions, and the statutory scheme as a whole. Christensen v. Ellsworth, 162 Wash.2d 365, 373, 173 P.3d 228 (2007). We must also construe a statute to give effect to all the language so that no portion is "rendered meaningless or superfluous." Kilian v. Atkinson, 147 Wash.2d 16, 21, 50 P.3d 638 (2002).

¶ 11 The express purpose of the Registration of Contractors Act, chapter 18.27 RCW, is to "afford protection to the public" from "unreliable, fraudulent, financially irresponsible, or incompetent contractors." RCW 18.27.140.

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Bluebook (online)
232 P.3d 576, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hosea-v-toth-washctapp-2010.