Rell's Fire Protection Group, Inc. v. The Rock Top, LLC

Court of Appeals of Washington·Decided July 11, 2023·No. 38626-1·Unpublished

Opinion

FILED

JULY 11, 2023

In the Office of the Clerk of Court WA State Court of Appeals, Division III

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON DIVISION THREE

RELL’S FIRE PROTECTION GROUP, ) No. 38626-1-III INC., a Washington corporation, )

)

Appellant, )

)

v. )

)

THE ROCK TOP LLC, a Washington ) UNPUBLISHED OPINION limited liability company; M & J ) HAMILTON, LLC, a Washington limited ) liability company; and HAMILTON- ) PRICE, INC., a Washington corporation, ) d/b/a MICHAELS ON THE LAKE, )

)

Respondents. )

LAWRENCE-BERREY, J. — This case stems from two contract disputes between Rell’s Fire Protection Group, Inc. (RFP), appellant, and The Rock Top LLC (Rock Top) and Hamilton-Price, Inc., doing business as Michaels on the Lake (Michaels), respondents. By motion practice, jury trial, and a later bench trial, both sides successfully defended against the others’ claims for affirmative relief, and the trial court denied each side’s request for attorney fees.

No. 38626-1-III Rell’s Fire Protection v. The Rock Top

RFP appeals the result of the bench trial, including the denial of its reasonable attorney fees. Michaels and Rock Top cross appeal the denial of their reasonable attorney fees. We affirm the trial court’s determination that RFP failed to prove that any of the eight disputed invoices for additional extras were proper, but reverse its denial of Michaels’ and Rock Top’s fee requests.

FACTS

Parties Travis Smith (Travis1) and his son, Dewayne Smith (Dewayne), own and operate RFP. RFP sells, leases, installs, and services fire suppression equipment. Michael Hamilton (Mike) and his son, Jordan Hamilton (Jordan), own and operate restaurants located in Moses Lake, Washington, including Michaels and Rock Top.

Summary of facts relevant to the bench trial This appeal arises from two contract disputes. The first is a lease agreement between RFP and Michaels for fire suppression equipment. The second is for RFP to install a gas line and an exhaust hood system for Rock Top, a new restaurant. The contracts create a secured interest in favor of RFP for all goods sold or leased, and

1 Because the fathers and sons share last names, we refer to the individuals by their first names. We intend no disrespect.

No. 38626-1-III Rell’s Fire Protection v. The Rock Top

requires the debtor to pay RFP’s reasonable attorney fees in the event the debt is referred to an attorney for collection.

The Michaels Lease. In 2006, RFP entered into a lease agreement with Michaels for a fire suppression system. The agreement was that RFP would lease equipment to Michaels for $450 per year. RFP listed the equipment’s replacement cost at $2,750 as of February 20, 2006, and the lease was for a period of five years with an option to renew for another five years. Every year, around February, RFP sent an invoice to Michaels for the leased equipment and Michaels would send payment.

The Lease Equipment Agreement provided in relevant part:

[A]ll service work shall be [performed] by [RFP]. . . . [S]hould the lease agreement be violated in any way by the Leasee it will be the sole decision of [RFP] to accept or decline return of its leased equipment or demand payment at current market value at the time of violation . . . .

Clerk’s Papers (CP) at 328.

In February 2013, RFP serviced the leased equipment at Michaels and billed Michaels for the service work in addition to the yearly lease fee. Michaels had not made a payment on its account since January 10, 2013. Around May 2013, the business relationship between the two father and son teams began to fracture due to disputes involving the Rock Top project.

No. 38626-1-III Rell’s Fire Protection v. The Rock Top

As of May 23, 2013, RFP claimed Michaels still owed $1,313.62. However, due to nonpayment, Travis terminated the Michaels lease on May 25, 2013, and stated the equipment would be removed by an authorized subcontractor. Travis learned that Jordan had disposed of the leased equipment. When he learned of this, he invoiced Michaels $5,800, which he claimed was the market value of the equipment at the time Michaels breached the lease.

At trial, RFP contended that the equipment had increased from its 2006 assigned value of $2,750 because Mike had the system serviced semi-annually and had upgrades installed. On cross-examination, Travis testified about performing the maintenance and doing the upgrades on the leased equipment at Michaels. He stated he would send the invoices for that work to Michaels on the completion of the work. However, when pressed by counsel, Travis testified those records were at his office. He never supplied those invoices throughout the entire litigation.

In a declaration, Jordan stated that the equipment was seven years old at the time he disposed of it, and it would have been worth considerably less than $2,750.

No. 38626-1-III Rell’s Fire Protection v. The Rock Top

Nevertheless, in early March 2014, Michaels tendered $2,750, in addition to other amounts, to RFP.2 The Rock Top Contract. In late 2012, Mike and Jordan decided to renovate the old Golden Corral restaurant, which would later become Rock Top. In anticipation of the project, Rock Top hired RFP to install a gas line. In December of that year, Mike and Jordan met with Dewayne to discuss hiring RFP to install a new exhaust hood system in the restaurant. RFP agreed to do the work; the original bid price for the project was $26,435.50, including tax. RFP began work that month. Dewayne installed the exhaust hood as well as some extras for Rock Top. All work was completed by the end of March 2013.

The parties agree that RFP performed extra work at the Rock Top project. The original work and agreed-upon extras are memorialized in the record as follows:

2 The amount tendered in early March 2014 was $6,372.50, which represented $2,750.00 from Michaels for the equipment and $3,622.50 from Rock Top for nine months of interest on $23,000.00. RFP cashed the check on April 4, 2014.

No. 38626-1-III Rell’s Fire Protection v. The Rock Top

Work Order # Work Description Invoice # Charge Record Cites 16226 • 1 – 1 ½” Gas Line Install 36483 $2,561.07 Ex. 51;

• 6 – Rolls of Pipe Wrap (Paid on CP 312, • 14 – hrs labor December 18, 1187; RP1 2012) 1782.

16845 (Rock • 1 – Exhaust Hood System Class 37003 $26,435.50 Ex 3; CP 687, Top Bid) • 2 – Canopy Hood S/S 10’ lights 901, 922, w/ makeup air 960, 993, • 2 – Exhaust fans Upblast 3200 1094, 1096;

Cfm 16” RP1 1778, • 1 – Make Up Air fan 6000 Cfm 1895.

18”

• 1 – Wall Pad S/S 20’ x 8’

• 2 Exhaust Duct System w/ Duct Wrap

• 4 – Fire Damper • 3 – Fan Roof Curb • 1 – Ansul fire system UL 300 • 1 – Ansul Gas Valve 1 ½”

• 1 – Extinguisher (wet chem)

A260

• 3 – Extinguisher (dry chem)

A500

16925 • 1 - Gas line “meter to under 37100 $3,346.52 Ex. 20; CP ground” (original 30, 61, 168, • 1 – double stack oven hook up charge) 295, 371, • 1 – Salamander re-fab gas line 677, 861, • 1 – 14 [ ] S.S. Salamander mount $3,013.11 928-29, 962, install (charge after 995; RP1 • 2 – outside fire place hook up fire 1780-81, • 1 – outside overhead heater hook extinguishers 1783-86, up removed) 1895.

• 1 – outside overhead S.S.

dormant 1/2” line

• 1 – A260 wet chem kitchen ext recharge

• 3 – New A200 Abc 5 lb Ext

No. 38626-1-III Rell’s Fire Protection v. The Rock Top

Missing • 1 – Serve Window S/S Liner 37101 $566.48 Ex. 21; CP Work Order • 1 – Wall End Cap S/S 31, 62, 169, 862, 923,

963, 996;

RP1 1780-81,

1788-89,

1895.

N/A • Accrued Interest 37095 $528.69 Ex. 94 (later

removed)

N/A • Accrued Interest 37155 $449.40 CP 20, 32, 63 (not billed

until May 25,

2013)

In early March 2013, Michaels and Rock Top each received a notice from the Department of Labor and Industries (L&I). The notices stated that RFP owed taxes totaling $23,783.53 and directed each company to pay whatever it owed RFP directly to L&I. Over the next several weeks, the parties worked with L&I to ensure that whatever payment Michaels and Rock Top made was appropriate.

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