Mutual of Enumclaw Insurance v. Gregg Roofing, Inc.

315 P.3d 1143, 178 Wash. App. 702
CourtCourt of Appeals of Washington
DecidedDecember 31, 2013
DocketNo. 42940-3-II
StatusPublished
Cited by51 cases

This text of 315 P.3d 1143 (Mutual of Enumclaw Insurance v. Gregg Roofing, Inc.) 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
Mutual of Enumclaw Insurance v. Gregg Roofing, Inc., 315 P.3d 1143, 178 Wash. App. 702 (Wash. Ct. App. 2013).

Opinion

Maxa, J.

¶1 Mutual of Enumclaw Insurance Company (MOE) appeals a $1.5 million jury verdict award on Gregg Roofing, Inc.’s claim for tortious interference with a business relationship. The evidence at trial indicated that Gregg Roofing sustained minimal lost profits and consequential damages, meaning that a large majority of the damages award must have related to injury to its reputation. MOE argues that Gregg Roofing failed to present any evidence to quantity the amount of injury to its reputation, and therefore that the trial court erred when it denied MOE’s CR 50 motion for judgment as a matter of law and its alternative motions for a new trial or reduction of the verdict. We agree, and hold that Gregg Roofing’s evidence regarding injury to its reputation was insufficient to support the jury verdict. We reverse and remand for a new trial on the damages issue only.

FACTS

Claim Background

¶2 In June 2005, Parkside Church in Camas hired Gregg Roofing to install a new roof on the church and to repair dry rot. In August, after Gregg Roofing had removed the roof in preparation to install a new one, an unexpected rainstorm [708]*708damaged the building’s interior when water leaked through the temporary covering Gregg Roofing had installed. The church filed a water damage claim with its insurer, MOE, which assigned its employee Robert Lowrie as the adjuster for the claim.

¶3 Lowrie met with the church’s pastor and persuaded him to terminate Gregg Roofing’s contract and instead to hire Charles Prescott Restoration, Inc. (CPR), owned by Donald Chill, to repair the water damage. The church hired CPR, fired Gregg Roofing, and did not allow Gregg Roofing to complete the remaining $5,301 on its $16,212 roof replacement contract. In exchange for being given the job, Chill gave Lowrie financial gifts and “kickbacks.” Clerk’s Papers (CP) at 135. CPR fraudulently performed excessive and unnecessary repairs for which it received insurance payments, which Lowrie authorized despite knowing that the repairs were unnecessary. MOE paid a total of $2,345,537.66 to repair the damage to the church, a significant portion of which it paid to CPR.

¶4 MOE was subrogated to the church’s rights and sued Gregg Roofing, alleging that Gregg Roofing had breached its contract by causing the damage to the church.1 Gregg Roofing asserted various counterclaims, including a claim for tortious interference with a business relationship based on Lowrie convincing the church to fire Gregg Roofing. Gregg Roofing alleged that MOE was liable for Lowrie’s conduct because he was acting within the scope of his employment with MOE.

Pretrial Rulings

¶5 In a separate lawsuit MOE also had sued Chill and CPR for fraud; negligent misrepresentation; and violation of the Consumer Protection Act, chapter 19.86 RCW. The trial court originally consolidated MOE’s case against Chill [709]*709and CPR with its case against Gregg Roofing. However, Gregg Roofing successfully moved to sever the two cases before trial. Gregg Roofing and MOE subsequently filed summary judgment motions, which resulted in the dismissal of all claims and counterclaims except MOE’s breach of contract claim and Gregg Roofing’s tortious interference with a business relationship claim.

¶6 During discovery, MOE propounded an interrogatory to Gregg Roofing asking for the amount of claimed damages and the method of calculation. Gregg Roofing’s response was that damages to its business reputation were “ ‘at least $10,000.’ ” CP at 241. MOE also made a request for production for Gregg Roofing’s tax returns, but Gregg Roofing failed to produce them until the week before trial. Allen Tiffany, Gregg Roofing’s president, testified in his deposition that he could have retrieved the documents from his attic earlier but did not. Because Gregg Roofing failed to timely produce its tax returns and because MOE claimed that damages were speculative, MOE moved to exclude evidence of damage to Gregg Roofing’s business reputation. The trial court denied the motion to exclude all evidence of damage to Gregg Roofing’s business reputation but granted MOE’s motion to exclude evidence of lost profits except for the $5,301 remaining on the contract.

¶7 When the trial court granted Gregg Roofing’s motion to sever MOE’s case against Chill and CPR from the Gregg Roofing case, it also granted Gregg Roofing’s motion to exclude evidence or argument regarding any fraud. Before trial, Gregg Roofing again moved to exclude evidence of Chill’s fraud conviction and evidence that he was in prison, arguing that the evidence was irrelevant and inadmissible under ER 403. The trial court granted the motion. At trial, MOE made an offer of proof for evidence relating to Chill’s fraud conviction as well as testimony regarding the connection between Chill and Lowrie. The trial court denied the request to admit them based on its previous rulings.

[710]*710 Damages Evidence

¶8 At trial, Gregg Roofing’s only testimony regarding damages came from Tiffany, its president. With regard to lost profits, Tiffany testified that Gregg Roofing was not allowed to finish the project and therefore was not paid the $5,301.07 remaining on the contract. He stated that Gregg Roofing expected a 10 percent profit on the Parkside Church contract. Therefore, the total lost profits on the amount the church failed to pay were approximately $530. With regard to consequential damages, Tiffany testified that after the church incident Gregg Roofing was not asked to bid on several other residential and commercial roofing projects on which the company normally would have been expected to bid. He specifically mentioned two churches and a four-building apartment complex. Tiffany also testified that another contractor had recommended Gregg Roofing for a job, but that the project owner declined because of the “Parkside Church fiasco.” Report of Proceedings (RP) at 1646. Gregg Roofing did not provide any evidence regarding the profits it may have lost because it did not bid on these projects or any other evidence regarding financial losses relating to MOE’s conduct.

¶9 Tiffany provided minimal testimony regarding the fact that Gregg Roofing had sustained injury to its reputation. He expressed his opinion that Gregg Roofing’s business reputation had been injured. He explained that “everybody” knew that Gregg Roofing had started work on the church because its boldly labeled yellow trucks had been there for two weeks before the flooding, and that the church’s roof remained unfinished with plastic sheeting over the top of it for months. As noted above, Tiffany also mentioned not being asked to bid on several jobs, but admitted that “I don’t know that I totally know, how much work we missed and how much . . . the word spread in a negative manner around the community.” RP at 1626. Tiffany concluded, “I know it’s hurt... our reputation, and our name for doing quality work was damaged.” RP at 1623. [711]*711¶10 Tiffany also provided almost no testimony regarding the amount of damages caused by Gregg Roofing’s injured reputation. Tiffany made only five statements at trial regarding injury to reputation damages, and in four of those statements he admitted that Gregg Roofing had no documents or any other evidence regarding the amount of damages.

Q. . . . [I]s there anything else in terms of reputational damage . . .

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Lacey Ruddell Hoyt V. County Of Skagit
Court of Appeals of Washington, 2026
State Of Washington, V. Andrew Ronald Graves
Court of Appeals of Washington, 2026
Jennifer Sedgley, V. Peacehealth
Court of Appeals of Washington, 2025
Daniel Kaplan Kirkland, V. Alison Amber Knudson
Court of Appeals of Washington, 2025
Susanne Turnipseed, V. Dayton Campbell Harris
Court of Appeals of Washington, 2025
Kenneth Wren, et ux. v. Stanford and Sons, LLC
Court of Appeals of Washington, 2025
Kathryn Lee Kim, V. Seattle Children Hospital
Court of Appeals of Washington, 2024
Tamera Swager & Marty Swager V. CCM Holdings, LLC
Court of Appeals of Washington, 2023
Christy M. Mckinley, V. Lars J. Sommer
Court of Appeals of Washington, 2023
Tanya Carter, V. Rachel Armstrong
Court of Appeals of Washington, 2023
In re Dependency Of A.C.
Washington Supreme Court, 2023
Katz v. Katz
W.D. Washington, 2022
State of Washington v. David Robert Vigil
Court of Appeals of Washington, 2021

Cite This Page — Counsel Stack

Bluebook (online)
315 P.3d 1143, 178 Wash. App. 702, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mutual-of-enumclaw-insurance-v-gregg-roofing-inc-washctapp-2013.