Ryan Williams v. Leroy Christiansen

Opinion

Filed Washington State Court of Appeals Division Two

July 21, 2026

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

DIVISION II RYAN WILLIAMS, an individual, No. 61278-0-II

Appellant,

v.

LEROY CHRISTIANSEN, individually and on UNPUBLISHED OPINION behalf of the marital community composed of LeRoy and “Jane/John Doe” Christiansen; STEVEN FUESTON, individually and on behalf of the marital community composed of Steven and “Jane/John Doe”; 6TH & D LLC, a Washington Limited Liability Company; 111TH AVE PUYALLUP LLC, a Washington Limited Liability Company; 128TH ST PUYALLUP LLC, a Washington Limited Liability Company; BLUE SKY LAND DEVELOPMENT LLC; a Washington Limited Liability Company; CFW LLC, a Washington Limited Liability Company; CLEAR CREEK PROPERTY LLC, a Washington Limited Liability Company; CW1 LLC, a Washington Limited Liability Company; LR1 LLC, a Washington Limited Liability Company; PIONEER LAND DEVELOPMENT LLC, a Washington Limited Liability Company; PIONEER LAND DEVELOPMENT GROUP LLC, a Washington Limited Liability Company and JOHN DOES 1-20,

Respondents.

CRUSER, J.—Ryan Williams appeals the trial court’s order on an evidentiary hearing

denying his claims for relief. This case concerns a dispute between the members of the 128th St No. 61278-0-II

Puyallup LLC. Williams, a member of the LLC, argued to the trial court that the contract between

LeRoy Christiansen and Steven Fueston (the Managers of the LLC) and Scott Fueston, a contractor

performing services for the LLC, violated section 9 of the “Restated Operating Agreement”

because it was not in writing, that it violated section 19 of Resated Operating Agreement because

it constituted an unwritten amendment to Williams’ financial interest in the LLC, and that it

allowed the Managers to convert Williams’ net profits from the sale of the LLC’s property without

his consent. The trial court disagreed with Williams and ruled in favor of the Managers.

Williams appeals, raising these same claims of error and additionally arguing that the

contract with Scott Fueston was invalid because Scott could not legally perform the services he

was hired to perform without violating the real estate broker’s act, ch. 18.85 RCW.

The Managers respond that their contract with Scott Fueston did not violate the LLC’s

record keeping requirements, nor did it violate the Restated Operating Agreement because it did

not affect Williams’ membership interest in the LLC. With respect to Williams’ argument related

to the real estate broker’s act, the Managers ask us not to consider this claim because Williams

raised that issue for the first time in his closing argument and it was not tried with the consent of

the Managers.

We disagree with Williams’ contentions and affirm.

FACTS

Together, Ryan Williams, LeRoy Christiansen, and Steven Fueston (Members) operate

several companies to facilitate their land development projects. Williams formed 128th St Puyallup

LLC (LLC) in 2015. The purpose of this company was to “develop land and sell it for profit.”

Clerk’s Papers at 185. The LLC was initially owned one-third by Williams and two-thirds by

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LeRoy Christiansen, with the intention that the parties would assign a one-third interest to Steven

Fueston at a later date when he resolved his divorce. In 2017, the Members executed a “Restated

Operating Agreement” (Operating Agreement) identifying Williams, Christiansen, and Fueston

each as managers with equal membership interest in the LLC.

The Operating Agreement provides that “the net profits and net losses of the Limited

Liability Company (other than from capital transactions), . . . shall be credited or charged, as the

case may be, to the capital accounts of each Member in proportion to the Members’ Percentage

Interests.” Ex. 1 at 6. “[N]et profits” means “the profits or losses of the Limited Liability Company

from the conduct of the Limited Liability Company’s business, after all expenses incurred in

connection therewith have been paid or provided for.” Id. at 4. “[C]apital transactions” include

“the sale of all or any part of the Property or other assets of the Limited Liability Company or

interests therein.” Id.

Decisions “respecting the management, operation and control” of the LLC shall be made

by LeRoy Christiansen, Steven Fueston, and Ryan Williams. Id. at 8. The Members have an

obligation to keep complete and accurate records of the transactions of the LLC “in accordance

with generally accepted accounting principles.” Id. at 7. Section 19 of the Operating Agreement

prohibits the Members of the LLC from altering the financial interests of the Members without the

vote or consent of all the Members.

Following litigation in 2018, Williams was removed as a manager but maintained his

membership interest. The remaining managers of the LLC, Fueston and Christiansen (Managers),

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entered into an oral contract with Scott Fueston1 for project management services related to the

LLC. Scott would be compensated with 10 percent of the net profits of the sale of the company’s

property developments.2 Between 2021 and 2023, the Managers sold the property associated with

the LLC in two phases and paid Scott the compensation owed to him.

Williams filed a motion for summary judgment requesting that he be reimbursed for one

third of the funds the Managers paid to Scott for the work he performed for the LLC. Williams

argued that the oral contract between the Managers and Scott violated several provisions of the

LLC’s Operating Agreement. First, Williams argued that the oral contract violated section 9 of the

Operating Agreement, which required the Managers to keep accurate records of transactions of the

LLC, because the agreement was not in writing. Williams further argued that the contract with

Scott violated the Operating Agreement’s prohibition on any member assigning or transferring his

interest in the LLC, including the net profits of the LLC, without the prior written consent of the

other members. In essence, Williams argued that by incurring an obligation to pay people who

provided services for value to the LLC, the Managers altered the character and value of Williams’

membership interest in the LLC. Williams did not allege that the contract was invalid because it

required Scott to illegally provide real estate broker services without the required license in his

motion.

1 Because Steven Fueston and Scott Fueston have the same last name, we refer to Scott by his first name for clarity. 2 Both in the proceedings below and in this court, the parties occasionally use the terms “net proceeds” and “net profits” as though they are interchangeable. They are not. The testimony below established that the agreement between the Managers and Scott was for Scott’s compensation to be paid from net profits.

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The trial court did not treat the motion as a motion for summary judgment and instead held

an evidentiary hearing on the matter akin to a bench trial. At the hearing, Williams’ counsel asked

Scott a series of questions aimed at establishing that he provided property management services

without a real estate brokers license. Most of these questions were objected to by the Managers.

For example:

Q: . . . As the owner of a property management company, are you aware that you need to have a real-estate license to operate such a property management company in the state of Washington?

[Managers’ trial counsel]: Objection. That is a legal statement and a legal conclusion in the form of a question.

THE COURT: I’m going to allow the question, if he can answer.

BY [Williams’ trial counsel]:

Q: Are you aware, as the owner of a property management company, that you are required in the state of Washington to have a real-estate license--

A. No. ....

[Managers’ trial counsel]: I’m going to object again, Your Honor. He is stating the law, and we do not know for sure if that is the law.

THE COURT: Well, Counsel, your objection is noted. It is cross- examination. He is stating that he is something he is proposing as a question. The witness denied knowledge of something, and there we go.

....

Q: So would it be fair to say you were providing property management services in violation of state law-- . . . when you were providing property management services for 128th Street?

[Managers’ trial counsel]: Objection. Calls for him to potentially self- incriminate. . . . This is a legal argument that can be made at the end of the case.

5 No. 61278-0-II

Verbatim Rep. of Proc. (VRP) (Aug. 21, 2024) at 117-18, 124-25.

In closing, Williams argued for the first time that the contract between Scott and the

Managers was invalid because Scott could not legally perform under the contract based on him not

having a real estate broker’s license. In response, the Managers’ counsel argued, “I want to address

momentarily the broker license issue that was brought up for the first time in this hearing in that

closing. Nothing contained in their motion says anything about illegal property management, and

there hasn’t been any illegal property management.” VRP (Sept. 25, 2024) at 141. The Managers’

counsel further argued that the services provided by Scott were legally provided because they fell

into a statutory exception to the brokers requirement. In its oral ruling, the trial court stated that it

did not believe “there was enough evidence in order to reach a legal conclusion regarding”

Williams’ argument that Scott was illegally acting as a real estate broker without a license. Id. at

160.

The trial court concluded that Williams failed to meet his burden of proof and denied

Williams’ motion.

Williams appeals.

DISCUSSION

I. VIOLATION OF THE OPERATING AGREEMENT

Williams argues that the trial court erred by concluding that the Managers’ contract with

Scott did not violate the LLC’s Operating Agreement. Specifically, Williams contends that the

contract (1) violated section 9 of the Operating Agreement because it was not in writing,

(2) constituted an unwritten amendment to Williams’ financial interest in the LLC in violation of

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section 19 of the Operating Agreement, and (3) no provision of the Operating Agreement gave the

Managers authority to convert Williams’ net profits from the sale without his consent.

The Managers contend that Williams’ arguments fail because Williams mischaracterizes

the nature of Scott ’s compensation. Rather than being paid a percentage of the net profits of the

LLC as Williams contends, Scott was paid a percentage of the net profits of the sale of the property.

Therefore, the Managers argue, the Managers did not interfere with Williams’ membership

interest. We agree with the Managers.

A. Legal Principles

On appeal of the trial court’s decision in a bench trial, we review the trial court’s findings

of fact for substantial evidence and determine whether those factual findings support the trial

court’s conclusions of law. Real Carriage Door Co., Inc. ex rel. Rees v. Rees, 17 Wn. App. 2d

449, 457, 486 P.3d 955 (2021). We review the trial court’s legal conclusions and the trial court’s

application of the facts to the law de novo. Id. “Therefore, we review the trial court’s conclusions

of law pertaining to contract interpretation de novo.” Viking Bank v. Firgrove Commons 3, LLC,

183 Wn. App. 706, 712, 334 P.3d 116 (2014). “We generally give words in a contract their

ordinary, usual, and popular meaning unless the entirety of the agreement clearly demonstrates a

contrary intent.” Hearst Commc’ns, Inc. v. Seattle Times Co., 154 Wn.2d 493, 504, 115 P.3d 262

(2005).

B. Analysis

First, Williams argues that the contract with Scott violated section 9 of the Operating

Agreement because it was not in writing. Section 9 of the Operating agreement requires the

Members of the LLC to “keep or cause to be kept complete and accurate records and books of

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account in which shall be entered each transaction of the Limited Liability Company in accordance

with generally accepted accounting principles.” Ex. 1 at 7 (emphasis added).

Williams fails to demonstrate that the contract to perform services was a “transaction”

subject to section 9. Similarly, Williams does not articulate a “generally accepted accounting

principle[ ]” or any provision of the Operating Agreement that requires contracts for services to be

in writing. Id. at 7. To the extent that Williams argues that the actual transaction in which the

Managers paid Scott violated section 9, the record included the checks paid to Scott for his

services. Williams does not explain how these records are insufficient to meet the record keeping

requirements of the Operating Agreement. Accordingly, the trial court did not err when it

concluded that the Managers did not breach section 9 of the Operating Agreement.

Next, Williams argues that the trial court erred by failing to conclude that the contract

constituted an unwritten amendment to Williams’ financial interest in the LLC in violation of

section 19 of the Operating Agreement. But, as the Managers argue, the contract did not alter

Williams’ financial interest in the LLC.

Here, the Managers entered into a contract with Scott in which Scott agreed to be

compensated for his services in an amount equal to 10 percent of the net profits of the sale of the

company’s property development. The agreement provides that Williams is entitled to a portion of

the net profits of the LLC and recognizes that distributions to the Members are calculated “after

all expenses incurred in connection [with the company’s business] have been paid or provided

for.” Ex. 1 at 4. While paying Scott for his service certainly reduces the net profits of the LLC, this

method of calculating the fee owed to Scott does not alter Williams’ membership share in the LLC.

The fact that Scott ’s fee was calculated based on the net profits of the sale of the LLC’s property

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similarly does not alter or reduce the share of the net profits of the LLC that Williams is entitled

to.

Finally, Williams argues that no provision of the Operating Agreement gave the Managers

authority to convert Williams’ net profits from the sale without his consent. But, as discussed

above, the Managers did not convert Williams’ net profits from the sale. Moreover, hiring Scott to

provide project management services for the LLC certainly fell within the Managers’ authority to

make “all decisions respecting the management, operation and control of the business and affairs

of the Limited Liability Company.” Ex. 1 at 8. Accordingly, the trial court did not err by failing to

conclude that the contract with Scott violated the Operating Agreement.

II. INVALID CONTRACT

Williams argues that the trial court erred by failing to conclude that the contract was illegal

under the real estate brokers act, ch. 18.85 RCW, and WAC 308-124D-215 because Scott,

Williams alleged, was operating a real estate firm as defined in RCW 18.85.011(18) but was not

licensed to provide real estate brokerage services under RCW 18.85.011(17).

The Managers contend that we should decline to consider the merits of this assignment of

error because Williams did not plead this claim below and the issue was not tried with either the

implied or express consent of the Managers as required by CR 15(b). We agree with the Managers.

Under CR 15(b), “[w]hen issues not raised by the pleadings are tried by express or implied

consent of the parties, they shall be treated in all respects as if they had been raised in the

pleadings.” (Emphasis added.)

In determining whether the parties impliedly tried an issue, an appellate court will consider the record as a whole, including whether the issue was mentioned before the trial and in opening arguments, the evidence on the issue admitted at the trial,

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and the legal and factual support for the trial court’s conclusions regarding the issue.

Dewey v. Tacoma Sch. Dist. No. 10, 95 Wn. App. 18, 26, 974 P.2d 847 (1999).

Here, whether the contract was invalid because Scott did not have a real estate license was

not tried either expressly or by implication. Williams did not raise this issue before trial or in

opening argument. And the Managers objected repeatedly to the trial court hearing evidence on

this unpled claim and to the trial court’s consideration of the issue. Furthermore, the trial court

made no factual findings on this tardy claim. Williams, as the party that sought a ruling on this

claim, neither objected to the trial court’s failure to enter findings nor proposed his own factual

findings on this issue. Therefore, even if the trial court had not erred in allowing this claim to be

tried below, we would still be unable to consider Williams’ argument that the trial court erred in

failing to find in his favor on this issue.3

CONCLUSION

Williams fails to demonstrate that the oral contract violated the LLC’s record keeping

requirements, the trial court did not err in finding that the contract did not violate the Operating

Agreement, and the Managers had authority to enter into the contract without Williams’ consent

because the contract did not affect Williams’ membership interest in the LLC. We decline to

review Williams’ claim that the Manager’s contract with Scott violated the real estate broker’s act.

Accordingly, we affirm.

3 Williams also does not explain why, even if Scott was undertaking duties in violation of the real estate broker’s act or WAC 308-124D-215, the correct remedy is to claw back the funds paid to Scott for his services and redistributing them to the Members. He also cites no authority in support of this contention. Where, as here, “no authorities are cited in support of a proposition, the court is not required to search out authorities, but may assume that counsel, after diligent search, has found none.” DeHeer v. Seattle Post-Intelligencer, 60 Wn.2d 122, 126, 372 P.2d 193 (1962).

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A majority of the panel having determined that this opinion will not be printed in the

Washington Appellate Reports, but will be filed for public record in accordance with RCW

2.06.040, it is so ordered.

CRUSER, J.

We concur:

PRICE, A.C.J.

MAXA, J.