Matt Surowiecki, Jr. And Ineza Kuceba, Apps. v. Hat Island Community Assn., Res.

• Court: Court of Appeals of Washington
• Decided: November 12, 2013
• Docket: 69519-3
• Status: Unpublished

Opinion

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

MATT SUROWIECKI, JR. and INEZA KUCEBA, No. 69519-3-

Appellants/Cross Respondents, DIVISION ONE tpO

UNPUBLISHED OPINION ^ ^S T 7 ~~-'

HAT ISLAND COMMUNITY ASSOCIATION, a Washington nonprofit corporation and homeowners' association, vij ^i.rr Respondent/Cross Appellant. FILED: November 12, 2013 o=

Appelwick, J. — The homeowners' suit against HICA was dismissed for failure to

state a claim. The trial court granted HICA's motion to dismiss and its subsequent

motion for attorney fees. The homeowners appealed both orders. HICA cross

appealed, arguing that the trial court abused its discretion in awarding fees in an

amount less than what it found to be reasonable. We dismiss the untimely appeal of the

order dismissing the suit. We affirm that attorney fees are awardable under the statute,

but reverse the award of attorney fees and remand for further findings by the trial court.

FACTS

Matt Surowiecki Jr. and Ineza Kuceba (the homeowners) are members of the Hat

Island Community Association (HICA), a nonprofit corporation under chapter 24.03

RCW and a homeowners' association under chapter 64.38 RCW. The homeowners

sued HICA to enforce an alleged right of association members to vote at special

meetings. HICA moved to dismiss the complaint for failure to state a claim under CR

12(b)(6), based on the lack of authority for the alleged right in either HICA's bylaws or No. 69519-3-1/2

applicable statutes. The trial court granted HICA's motion to dismiss on September 28,

2012.

HICA subsequently moved for attorney fees under the homeowners' associations

act (Act), RCW 64.38.050. The trial court granted HICA's motion on October 17, 2012.

But, despite finding that the requested amount of $22,226 was reasonable, the court

awarded HICA only $13,500.

On October 31, 2012, the homeowners filed a notice of appeal of both the order

granting HICA's motion to dismiss and the order granting HICA's motion for attorney

fees. HICA cross appealed, arguing that the trial court abused its discretion when it

awarded HICA attorney fees in an amount less than what the court found to be

reasonable. HICA also moved to dismiss the homeowners' appeal of the dismissal

order, arguing that the appeal was time-barred.

DISCUSSION

The homeowners argue that their appeal was timely filed. They further contend

that the trial court erred in awarding fees under the Act. The homeowners maintain that

they did not invoke the Act, and, even if they had, this was not an "appropriate case"

under the statute. RCW 64.38.050. HICA counters that the trial court properly awarded

fees under the Act, but abused its discretion when it adjusted the lodestar downward

after a specific finding of reasonable fees

I. Timeliness of Appeal

To be timely, an appeal must be filed within 30 days of the trial court's final

decision. RAP 5.2(a). Where there are multiple claims for relief and a final judgment

does not dispose of all the claims, a party may appeal the judgment only upon the No. 69519-3-1/3

court's express direction for entry of judgment and determination that there is no just

reason for delay. RAP 2.2(d).

The homeowners appealed the order dismissing their claims 33 days after its

entry. They rely on RAP 2.2(d) to assert that the dismissal order did not grant relief on

all of HICA's claims and thus did not constitute a final order. According to the

homeowners, HICA's multiple claims were its motion to dismiss and its request for

attorney fees. Because the dismissal order granted relief on only the former and left the

latter unresolved, the homeowners contend that the 30 day clock did not begin to run

until judgment was entered on November 14, 2012.

The homeowners are correct that RAP 2.2(d)'s general effect is to postpone an

appeal where additional claims for relief are still pending. However, other court rules

clarify that claims for attorney fees are treated differently than typical pending claims.

RAP 2.2(a)(1) allows a party to appeal a final judgment of any proceedings, regardless

of whether the judgment reserves for future determination an award of attorney fees or

costs. RAP 2.4(b) explicitly notes that, where a party timely appeals an award of

attorney fees, it does not bring up for review an earlier decision on the merits unless

timely notice of appeal was filed on that decision. By characterizing HICA's request for

attorney fees as an independent claim on the merits, the homeowners ignore the

contrary characterization of such requests in the court rules.

The homeowners' stance also conflicts with this court's treatment of appeals

involving attorney fees. Carrara, LLC v. Ron & E Enters., Inc., 137 Wn. App. 822, 155

P.3d 161 (2007) is on point. There, the trial court granted summary judgment against

the appellant on July 8, 2005, and awarded attorney fees to the respondent on No. 69519-3-1/4

September 22. Id at 824. The appellant appealed both decisions on October 21,

timely for the order granting fees but more than three months after the order granting

summary judgment. Id. at 824-25. The appeal of the summary judgment order was

thus time-barred. Id. at 824. Similarly, in Bushonq v. Wilsbach, this court found that the

appellant was precluded from challenging the legal basis of an attorney fee award

where she failed to timely appeal the earlier judgments establishing that award's legal

basis. 151 Wn. App. 373, 377, 213 P.3d 42 (2009). The theme in both cases was

clear: "[Cjounsel should appeal from the judgment on the merits, even if the issue of

attorney fees is still pending." 2A Karl B. Tegland, Washington Practice: Rules

Practice RAP 2.4 author's cmts. at 220 (7th ed. 2011).1 The appeal is time-barred.

II. Attorney Fees

We review questions of law de novo. Wilson Court Ltd. v. Tony Maroni's, Inc.,

134 Wn.2d 692, 698, 952 P.2d 590 (1998). Where the parties dispute a legal

conclusion resulting from the facts, and not the facts themselves, we decide the issue

as a matter of law. Blueberry Place Homeowners Ass'n v. Northward Homes, Inc., 126

Wn. App. 352, 358, 110 P.3d 1145 (2005). Pleadings are meant to facilitate proper

decision on the merits, not create formal impediments, and courts should construe them

liberally. State v. Adams, 107 Wn.2d 611, 620, 732 P.2d 149(1987).

1The homeowners argue that Carrara and Bushong do not apply. To distinguish the present case, they point to HICA's motion for entry of final judgment, filed November 1, 2012. Because neither Carrara nor Bushong involved such a motion "to conclude the proceedings," the homeowners maintain that the cases do not control. This misconstrues the nature of the motion and the judgment itself: attorney fees. Under RAP 2.4(b) and the relevant case law, a pending attorney fee award will not extend an appeal's 30 day clock. No. 69519-3-1/5

While the homeowners do not dispute that the Act applies to HICA, they argue

that they brought their claim solely under the bylaws and not the statute. However, this

characterization of their claim is too narrow. In their complaint, the homeowners

specifically acknowledge that "[t]he authority of HICA to act and conduct its business is

derived from and governed by [cjhapter 24.03 RCW and fclhapter 64.38 RCW."

(Emphasis added.) The complaint goes on to request attorney fees "as allowed by law."

This was sufficient to invoke the statute.

The homeowners also challenge the court's authority to award attorney fees on

these facts. They contend that purpose of the Act's fee-shifting provision is to

discourage frivolous litigation, and, because the trial court found no frivolity, this case is

inappropriate for attorney fees. The Act authorizes the court, in an appropriate case, to

award reasonable attorney fees to the prevailing party. RCW 64.38.050. Under the

Act, the trial court has discretion as to what is an "appropriate case." Roats v. Blakely

Island Maint. Comm'n, Inc., 169 Wn. App. 263, 284, 279 P.3d 943 (2012). This court

will not disturb a trial court's decision to grant or deny attorney fees in the absence of an

abuse of discretion. Id. 283-84. A trial court abuses its discretion if its decision is

manifestly unreasonable or exercised on untenable grounds or for untenable reasons.

]± at 284.

The fee-shifting provisions certainly exist in part to encourage meritorious

litigation. See Eagle Point Condo. Owners Ass'n v. Cov, 102 Wn. App. 697, 713, 9 P.3d

898 (2000). However, neither the statute nor the case law limits an appropriate case to

only frivolous cases. The homeowners make no convincing argument that the decision

was an abuse of discretion. We find none. No. 69519-3-1/6

The question remains whether the trial court properly adjusted the lodestar fee

downward after a specific finding of reasonable fees. We review a trial court's decision

on fees for abuse of discretion. See Schmidt v. Cornerstone Invs., Inc., 115 Wn.2d 148,

169, 795 P.2d 1143 (1990). As a general rule, Washington courts calculate reasonable

attorney fees based on the lodestar method. Mahler v. Szucs, 135 Wn.2d 398, 433,

957 P.2d 632 (1998). Under this method, the court evaluates whether counsel spent a

reasonable number of hours—excluding any wasteful or duplicative hours and any

hours pertaining to unsuccessful claims—and whether counsel billed a reasonable rate.

Id. at 434. Courts must take an active role in determining reasonableness, and develop

an adequate record upon which to review a fee award, jd at 434-35. Findings of fact

and conclusions of law are required to establish such a record. Id at 435. The lodestar

is the presumptive measure of a reasonable attorney fee award. Chuong Van Pham v.

Seattle City Light, 159 Wn.2d 527, 542, 151 P.3d 976 (2007).

The Lodestar fee, in rare instances may be adjusted upward or downward in the

trial court's discretion. Mahler, 135 Wn.2d at 434. These adjustments, often referred to

as multipliers, have been recognized where certain factors are present. See, e.g.,

Wash. State Commc'n Access Project v. Regal Cinemas, Inc., 173 Wn. App. 174, 221,

293 P.3d 413 (2013) (contingent risk), review denied, Wn.2d , 308 P.3d 643

(2013); Bloor v. Fritz, 143 Wn. App. 718, 750-51, 180 P.3d 805 (2008) (novelty and

complexity). Such adjustments are discretionary and rare. Sanders v. State, 169

Wn.2d 827, 869, 240 P.3d 120 (2010). This is because the lodestar analysis already

contemplates a reasonable fee based on the work performed. Deep Water Brewing,

LLC v. Fairway Resources, Ltd., 170 Wn. App. 1, 10, 282 P.3d 146 (2012). No. 69519-3-1/7

Here, the court performed a lodestar calculation and expressly arrived at a

reasonable fee. HICA provided detailed information about the nature and extent of its

attorneys' work, ultimately requesting $22,266. The trial court did not disapprove of or

adjust the hourly rate. It did not discount the hours worked. Rather, the trial court

explicitly stated that $22,266 represented a reasonable attorney fee.

The court then reduced the amount of the award to $13,500. The basis for this

adjustment to the lodestar is unclear. It was inconsistent with the court's explicit finding

of the reasonableness of the hours worked and hourly rate. The court made only a brief

comment that it did not find the homeowners' claims frivolous and that it was exercising

its discretion. If the court's intent was to disapprove of the hours worked, it needed to

do so during the initial lodestar calculation. If the court had a legitimate basis for a

downward multiplier in mind, findings were required. None were made. This was an

abuse of discretion.

We dismiss the untimely appeal of the order dismissing the suit. We affirm that

attorney fees are awardable under the statute, but reverse the award of attorney fees

and remand for further findings by the trial court.

WE CONCUR:

tn/y A