Mezzanine Properties, Inc., V. Bkco Title And Escrow, Llc

• Court: Court of Appeals of Washington
• Decided: March 11, 2024
• Docket: 85064-4
• Status: Unpublished

Opinion

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

MEZZANINE PROPERTIES, INC., No. 85064-4-I

Appellant, DIVISION ONE

DANIEL CHUN,

Plaintiff,

v. UNPUBLISHED OPINION BKCO TITLE AND ESCROW, LLC; DAREN HAMILTON and marital estate; VIJA WILLIAMS and BEN WILLIAMS and marital estate; KELLER WILLIAMS REALTY, INC.; and GENINE WOOD and marital estate,

Respondents.

BOWMAN, J. — Mezzanine Properties Inc. appeals the trial court’s order

confirming an arbitration award in favor of Keller Williams Realty Inc., its leasing

agent Ben Williams, and its brokers Vija Williams and Genine Wood (collectively

KWR) and dismissing BKCO Title and Escrow LLC and its president Daren

Hamilton (collectively BKCO) from their lawsuit. We affirm the trial court’s order

confirming the arbitration award and award KWR attorney fees and costs on

appeal, but we reverse the court’s order dismissing BKCO and remand for further

proceedings. No. 85064-4-I/2

FACTS

Apex TTF Bellevue LLC (Apex) is a Washington corporation that owns

property located in Bellevue. KWR is a Texas corporation with an office in

Kirkland that regularly conducts business in King County as a real estate listing

firm. Mezzanine is a Washington corporation and regularly conducts business as

a real estate buyer brokerage firm. KWR and Mezzanine are both members of

the Northwest Multiple Listing Service (NWMLS). BKCO is a Washington

corporation that routinely serves as an escrow closing agent in real estate

transactions.

In February 2021, Apex hired KWR as its agent to sell their Bellevue

property. The parties executed an “Exclusive Sale and Listing Agreement”

(ESLA) that says Apex will pay KWR a commission of 5 percent of the sales

price. And from that commission, KWR will offer a 2.5 percent commission to

any buyer’s agent who is a cooperating member of NWMLS.

On November 2, 2021, Derek and Juiling Edmonds offered to purchase

the Apex property through their agent, Mezzanine. The parties executed a

“Residential Purchase and Sale Agreement” and hired BKCO as the escrow

closing agent. BKCO held in escrow $131,625 as commission.

On December 8, 2021, BKCO issued a settlement statement apportioning

a $58,500 commission to KWR and a $73,125 commission to Mezzanine. KWR

disputed the settlement statement. It claimed that an addendum to the ESLA

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precluded Mezzanine from seeking any commission from the sale.1 So, it

instructed BKCO not to release the commission. When Mezzanine contacted

BKCO to ask about the status of its commission, BKCO explained that KWR

disputed the commission and that Mezzanine should contact KWR to discuss the

issue.

In late January 2022, KWR offered to resolve the dispute by paying

Mezzanine a 1.25 percent commission. Mezzanine rejected the offer. Unable to

settle the dispute, Mezzanine asked BKCO to place the commission in a court

registry.

In March 2022, Mezzanine and its managing broker Daniel Chun

(collectively Mezzanine) sued KWR and BKCO, alleging breach of contract,

fraud, conversion, breach of fiduciary duties, breach of good faith and fair

dealing, unjust enrichment, tortious interference, and violations of the Consumer

Protection Act (CPA), chapter 19.86 RCW, the Uniform Voidable Transactions

Act, chapter 19.40 RCW, and the Escrow Agent Registration Act, chapter 18.44

RCW. In June 2022, KWR moved to compel arbitration of Mezzanine’s claims. It

argued that the NWMLS rules mandate its members arbitrate commission

disputes.2 At the same time, BKCO moved for summary judgment. It argued

that the “only claim against BKCO relates to its withholding the claimed

The addendum to the ESLA provides, “The current tenant of the property, 1

Derek Edmonds and Juiling Edmonds holds a first right of refusal to purchase the property. They and their broker are excluded from a selling office commission should they successfully close on the property.” 2 NWMLS arbitration rule 1 reads, “It is the duty of the Members of NWMLS to submit all controversies involving commissions arising from NWMLS listings to arbitration by NWMLS, exclusively, notwithstanding any other arbitration agreement between the parties.”

3 No. 85064-4-I/4

commission,” so the court should order it to deposit the disputed commission in

the court registry and dismiss it from the lawsuit.

On July 13, 2022, the court granted KWR’s motion to compel arbitration

and BKCO’s motion to dismiss. It ordered BKCO to deposit the disputed

commission in the court registry, dismissed BKCO from the lawsuit, and stayed

the case pending NWMLS arbitration of the commission dispute.

In December 2022, the NWMLS arbitration panel denied Mezzanine’s

claim and issued an arbitration award in favor of KWR.3 In January 2023, KWR

moved to confirm the arbitration award and disburse the funds in the court

registry. On January 17, 2023, the court granted the motion and dismissed the

case with prejudice and without costs. Mezzanine moved for reconsideration of

both the court’s July 2022 order dismissing BKCO from the lawsuit and the

January 2023 order confirming the arbitration award. The court denied both

motions.

Mezzanine appeals.

ANALYSIS

Mezzanine argues the trial court erred by confirming the arbitration award

in favor of KWR and dismissing BKCO at summary judgment. KWR asks for

attorney fees and costs on appeal. We address each argument in turn.

3 The arbitration panel decided that “[h]aving heard, and carefully considered, the testimony and evidence offered by both parties,” KWR “shall pay $0” to Mezzanine.

4 No. 85064-4-I/5

1. Confirmation of Arbitration Award

Mezzanine argues that the trial court “committed a reversible error

confirming an arbitration award of ZERO by awarding $73,125.00 to [KWR] in the

absence of a contractual, legal or factual basis to do so.” We disagree.

Under Washington law, trial courts will review an arbitrator’s decision “only

in certain limited circumstances.” Int’l Union of Operating Eng’rs, Local 286 v.

Port of Seattle, 176 Wn.2d 712, 720, 295 P.3d 736 (2013). To do otherwise

would question the finality of arbitration decisions and undermine alternative

dispute resolution. Id. Our review of an arbitrator’s award is limited to “the same

standard applicable in the court which confirmed, vacated, modified or corrected

that award.” Salewski v. Pilchuck Veterinary Hosp., Inc., 189 Wn. App. 898, 903,

359 P.3d 884 (2015). We review only whether one of the statutory grounds to

modify or vacate an award exists. Id. at 903-04.4 The party challenging the

award bears the burden of showing such grounds exist. Cummings v. Budget

Tank Removal & Env’t Servs., LLC, 163 Wn. App. 379, 388, 260 P.3d 220

(2011).

Mezzanine argued below that the trial court should refuse to confirm the

arbitration award because “it is a futility and does not resolve the core issue in

this lawsuit.” On appeal, Mezzanine argues we should vacate the award

because there was “no contractual, legal or other basis for Mezzanine’s

4 Under the uniform arbitration act, chapter 7.04A RCW, courts may modify an arbitration award on one of the narrow statutory grounds listed in RCW 7.04A.240(1) or vacate the award for the limited reasons in RCW 7.04A.230(1).

5 No. 85064-4-I/6

commission to be paid to [KWR].”5 But Mezzanine identifies no statutory ground

to modify or vacate the award in support of its argument. As a result, we affirm

the trial court’s order confirming the arbitration award and disbursing funds.6

2. Summary Judgment

Mezzanine argues that the trial court erred by granting summary judgment

for BKCO. We agree.

We review orders on summary judgment de novo, engaging in the same

inquiry as the trial court. Kim v. Lakeside Adult Fam. Home, 185 Wn.2d 532,

547, 374 P.3d 121 (2016). “Summary judgment is appropriate only if there is no

genuine issue as to any material fact and the moving party is entitled to judgment

as a matter of law.” Rublee v. Carrier Corp., 192 Wn.2d 190, 198, 428 P.3d 1207

(2018); CR 56(c). We consider facts and inferences in a light most favorable to

the nonmoving party. Id. at 199.

A defendant can prevail on summary judgment by challenging the

plaintiff’s ability to establish an essential element of a cause of action. See

Young v. Key Pharms., Inc., 112 Wn.2d 216, 225, 770 P.2d 182 (1989). The

defendant bears the initial burden of showing a lack of evidence. Id. at 225 n.1.

The burden then shifts to the plaintiff to establish the challenged elements of their

5 Mezzanine also argues it was error for the trial court to “summarily dismiss all remaining causes of action outside the commission dispute.” But Mezzanine did not argue below that certain causes of action were unrelated to the commission dispute and should not be dismissed. We may refuse to review any claim of error that a party did not raise in the trial court. RAP 2.5(a). 6 Because we conclude Mezzanine raised no statutory grounds on which to modify or vacate the arbitration award, we also reject Mezzanine’s claim that the court erred by denying its motion for reconsideration.

6 No. 85064-4-I/7

claim. Id. at 225. If the plaintiff does not do so, the defendant is entitled to

summary judgment. Id.

In its motion for summary judgment, BKCO alleged that it “disclaimed any

interest in the withheld funds” and that the “only claim against BKCO relates to it

withholding the claimed commission.” So, according to BKCO, the trial court had

to dismiss Mezzanine’s claims once BKCO deposited the disputed funds in the

court registry. But Mezzanine’s complaint alleges several causes of action

against BKCO, including it (1) breached its contract by failing to disburse a

commission to Mezzanine, (2) committed fraud by conspiring to misrepresent

and misdirect Mezzanine in its communications, (3) committed conversion by

willfully interfering with Mezzanine’s property, (4) breached its fiduciary duties by

failing to pay Mezzanine its commission, (5) engaged in tortious interference with

Mezzanine’s business expectancy by withholding its commission for an improper

purpose, and (6) violated the CPA by colluding with KWR to deprive Mezzanine

of its commission. BKCO fails to show that any of those causes of action turn on

its continued possession of the disputed commission.

On appeal, BKCO argues that it is entitled to summary judgment because

Mezzanine failed to respond to its motion with competent evidence supporting

the elements of its claims. But BKCO did not challenge the elements of each of

Mezzanine’s claims in its motion for summary judgment. It alleged only that it

was entitled to summary judgment because each claim turned on its possession

of the disputed funds. And it is “ ‘incumbent upon the moving party to determine

what issues are susceptible to resolution by summary judgment, and to clearly

7 No. 85064-4-I/8

state in its opening [brief] those issues upon which summary judgment is

sought.’ ” Admasu v. Port of Seattle, 185 Wn. App. 23, 40, 340 P.3d 873 (2014)

(quoting White v. Kent Med. Ctr., Inc., 61 Wn. App. 163, 169, 810 P.2d 4 (1991)).

Because BKCO did not challenge the elements of each of Mezzanine’s claims,

Mezzanine had no duty to produce competent evidence supporting those

elements.

We reverse the trial court’s order granting summary judgment for BKCO

and remand for further proceedings.7

3. Attorney Fees and Costs

KWR asks for attorney fees and costs on appeal. Generally, when a

statute authorizes fees in the trial court, those fees are also available on appeal.

SEIU Healthcare Nw. Training P’ship v. Evergreen Freedom Found., 5 Wn. App.

2d 496, 515, 427 P.3d 688 (2018). RCW 4.84.330 authorizes an award of

attorney fees and costs to the prevailing party in an action enforcing the

provisions of a contract if the contract specifically provides for attorney fees.

NWMLS arbitration rule 34 provides:

In the event of an appeal to the Superior Court (and any appeal thereof to an appellate court), the court (including the appellate court) must, if the Petitioner is successful in whole or in part, include in its judgment: interest at the above rate and the Petitioner’s reasonable attorneys’ fees and costs. If the Responding Party is the prevailing party, the Responding Party is entitled to its reasonable attorneys’ fees and costs.

Because KWR is the prevailing party on appeal, we award it attorney fees and

costs subject to compliance with RAP 18.1.

7 Because we reverse the trial court’s summary judgment order, we need not address whether the trial court erred by denying Mezzanine’s motion for reconsideration.

8 No. 85064-4-I/9

We affirm the trial court’s order confirming the arbitration award for KWR

and award KWR its attorney fees and costs on appeal. But we reverse the

court’s order dismissing BKCO and remand for further proceedings.

WE CONCUR: