RWR Management, Inc. v. Citizens Realty Co.

135 P.3d 955
CourtCourt of Appeals of Washington
DecidedMay 30, 2006
Docket23507-6-III
StatusPublished
Cited by8 cases

This text of 135 P.3d 955 (RWR Management, Inc. v. Citizens Realty Co.) 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
RWR Management, Inc. v. Citizens Realty Co., 135 P.3d 955 (Wash. Ct. App. 2006).

Opinion

135 P.3d 955 (2006)
133 Wash.App. 265

RWR MANAGEMENT, INC., a Washington corporation d/b/a R.W. Robideaux & Company, Respondent,
v.
CITIZENS REALTY COMPANY, a Washington corporation; Lincoln Investment Company of Spokane; RPS II, L.L.C. d/b/a River Park Square; and CPC Development, Inc., a Washington corporation d/b/a The Penney's Building, Appellants.

No. 23507-6-III.

Court of Appeals of Washington, Division 3.

May 30, 2006.

*958 Cheryl Rani Guttenbe Adamson, Diehl Randall Rettig, Attorneys at Law, Kennewick, WA, for Appellant.

Robert Allan Dunn, Dunn & Black PS, Spokane, WA, Charles Kenneth Wiggins, Wiggins & Masters PLLC, Bainbridge Island, WA, for Respondent.

BROWN, J.

¶ 1 Citizens Realty Company, Lincoln Investment Company of Spokane, RPS II, L.L.C. d/b/a River Park Square, CPC Development, Inc. d/b/a The Penney's Building (collectively RPS) appeal a $6.5 million quantum meruit judgment obtained by RWR Management Inc. d/b/a R.W. Robideaux & Co. (RWR). Although finding contracts existed, a jury rejected damages for RWR's written and oral contract claims. RPS contends the jury verdicts are inconsistent. Additionally, RPS contends instructional and evidentiary error occurred at trial. Finally, RPS contends the trial court erred in disqualifying prior counsel. We reject each contention, and affirm.

FACTS

¶ 2 RPS owns the River Park Square shopping mall and garage in downtown Spokane. RWR is a property management and consulting firm. In 1988, RWR became the managing and leasing agent for River Park Square. Robert W. Robideaux is RWR's president and principal. RPS and RWR amended their management agreement, requiring RWR to "assist Owner in redevelopment of River Park Square" and perform such duties "as directed by Owner." Ex. P-17.

¶ 3 RPS later requested Mr. Robideaux to become RPS's "right hand" and chief coordinator for the redevelopment project. Report of Proceedings (RP) at 273; Ex. P-26. RWR agreed. In 1996, the parties entered into a coordination agreement to replace all their prior written and oral agreements regarding RWR's role in the River Park Square redevelopment. This agreement was later modified by Exhibit P-107, increasing RWR's monthly compensation. The modified contract provided RPS "will at the completion of this Agreement review and determine the bonus amount to be paid to [RWR], if any, at [RPS's] sole discretion." Ex. P-107 at 4.

¶ 4 Through the years, several of the parties' agreements were memorialized by the law firm Witherspoon, Kelley, Davenport & Toole, P.S. (Witherspoon). RWR did not retain independent counsel to represent it in negotiating the agreements. Witherspoon represented RWR and Mr. Robideaux on several unrelated matters.

¶ 5 Between 1999 and 2000, the parties continued to negotiate RWR's fees relating to both its management and consulting services. In October 2002, RWR unsuccessfully requested a flat compensation fee of $550,000 for "unpaid past services and contributions" to the River Park Square project. Ex. P-155. This amount was a settlement amount; RWR actually felt it was owed between $1,009,862 and $1,725,102 in uncompensated fees.

¶ 6 Negotiations broke down, prompting RWR to sue in November 2002. RWR alleged, among other things, breach of contract and quantum meruit/unjust enrichment. RWR alleged RPS was unjustly enriched because RWR provided substantial "hours of time, services, and effort" of which it was not compensated. Clerk's Papers (CP) at 27. RPS terminated all agreements between the parties. RWR requested disqualification of RPS's counsel, Witherspoon, based on conflict of interest. Filing a memorandum opinion, the court disqualified Witherspoon. The court declined reconsideration.

¶ 7 At trial, RWR offered a letter from a potential development director asking for a development fee of six percent of total project costs. The total project costs were approximately $115 million. Mr. Robideaux testified RWR took over the development director role. Additionally, during trial, RWR submitted a damages summary, requesting $7,790,825 in specified unpaid development fees and agent/broker fees.

¶ 8 Mr. Robideaux testified he previously requested more compensation from RPS because "our company and myself, we could not *959 continue the way we were going." RP at 699-700. RWR's accountant, Gordon Budke, testified the Robideauxs and their companies "were in high financial stress." RP at 961. He further testified RWR was in "financial hurt" and its expenses were close to its incoming management fee from RPS, which limited Mr. Robideaux's salary. RP at 978.

¶ 9 The court heard argument regarding whether a proposed RPS exhibit showing Mr. and Mrs. Robideaux's sources of income from 1993 to 2002 should be admitted. RWR successfully argued the parties' prior motion in limine, dismissing the parties' individually from the lawsuit, precluded the proposed exhibit. The court ruled "none of their personal income outside of that which they have received from entities at issue here is relevant." RP at 987. This ruling precluded further cross-examination regarding the Robideauxs' personal finances.

¶ 10 During trial, the court reserved a portion of RWR's breach of contract claim relating to an alleged refusal by RPS to provide insurance coverage and indemnify RWR in previous bondholder litigation. Further, the court dismissed RWR's trespass, misappropriation, and tortuous interference claims. The court declined to give RPS's proposed Jury Instruction No. 52, providing:

Due to rulings made by the Court on a number of matters outside the presence of the jury, you are instructed not to consider, and should disregard, plaintiff's claims against defendants for:
(1) trespass to property;
(2) misappropriation of, or interference with, plaintiff's property, including prospective tenant lists;
(3) interference with plaintiff's business relationships with third parties;
(4) breach of contract for failure to provide insurance coverage for the bondholders' litigation; and
(5) breach of contract for failure to indemnify plaintiff for its time and expense associated with the bondholders' litigation.

CP at 1730-731.

¶ 11 The court instructed on the remaining claims and directed the jury to consider evidence admitted "that relates to that claim." CP at 1733 (Jury Instruction No. 1). The court instructed that if the jury finds "no enforceable oral contract between the parties" it must award RWR the reasonable value of services performed if proven by a preponderance of the evidence that RWR performed the services with RPS's knowledge and RPS knew, or should have known, RWR expected payment. CP at 1751 (Jury Instruction No. 16).

¶ 12 During deliberations, the jury inquired if it could bind RPS to future legal fees incurred by RWR regarding the bondholder litigation. The court responded, it had "reserved all issues associated with the bondholders litigation." CP at 1971.

¶ 13 The jury returned a verdict for $6.5 million in quantum meruit for RWR's uncompensated services which RPS benefited from and knew, or should have known, were performed in the expectation of payment. The jury made a special finding that RPS breached the management agreement with RWR, but awarded no damages. The jury made a special finding that RPS did not breach the coordination or modified coordination agreement relating to RWR's redevelopment services. In Question No.

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Cite This Page — Counsel Stack

Bluebook (online)
135 P.3d 955, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rwr-management-inc-v-citizens-realty-co-washctapp-2006.