Filed
Washington State
Court of Appeals
Division Two
March 1, 2016
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION II
TED SPICE, No. 44101-2-II
Appellant,
v.
DONNA E. DUBOIS, as personal
representative for the Estate of DORIS E.
MATHEWS, deceased,
UNPUBLISHED OPINION
Respondents.
WORSWICK, J. — Ted Spice appeals the trial court’s denials of his requests for attorney
fees, judgment notwithstanding the verdict, and a new trial. After a jury trial regarding a breach
of contract claim and numerous counterclaims, the jury returned a verdict that distributed several
parcels of real property between Spice and the estate of Doris Mathews. Spice argues that the
trial court erred by (1) designating the estate as the prevailing party, and therefore finding that
Spice was not entitled to attorney fees under two contracts between Spice and Mathews, and (2)
not granting Spice’s motion for judgment as a matter of law or a new trial. We hold that neither
party was the prevailing party and that Spice did not preserve his other issues for appeal.
Consequently, we affirm the trial court’s orders.
No. 44101-2-II
FACTS
Ted Spice met Doris Mathews in 2003 when he became her tenant. Mathews owned
several rental properties, which had fallen into disrepair. Spice began to help Mathews maintain
and manage the properties.
In January 2004, Mathews issued a promissory note to Spice agreeing to pay half of “all
equity or monies realized in any amounts ranging from $5,000 up to $8,000,000 from property
sales, investments, developments, refinancing proceeds or any type of business projects
whatsoever relating to any properties purchased, bonds relating to” several of Mathews’s
properties,1 “including all property or investments, property purchases or any other business
project coordinated by the grantor now or transacted in the future.” Ex. 4. As collateral, the
promissory note identified “all future investments and properties purchase [sic], deeds, deeds of
trust, contract, mortgages, developments, current investments, projects including interest monies
or deeds held in” the same properties. Ex. 4. The promissory note contained an attorney fee
provision, which entitled Spice to reasonable attorney fees in the event he sued to collect on the
note.
In February 2004, Spice obtained a durable power of attorney over Mathews. In April
2004, Spice and Mathews together formed a real estate development company called Plexus
Investments, LLC (Plexus). Spice held a 51 percent interest in Plexus, and Mathews held a 49
percent interest. Mathews and Spice signed a Plexus Operating Agreement governing the
company. This operating agreement also included an attorney fee provision for reasonable
1
The properties were 11003 58th St. Ct. E., 11010 58th St. Ct. E., 5818 Milwaukee Ave. E., and
10915-10917 58th St. Ct. E.
2
No. 44101-2-II
attorney fees to the substantially prevailing party in any dispute “arising out of the terms of this
Agreement or the Members’ relationship or a suit or action permitted herein.” Ex. 6 at 19.
Both Spice and Mathews actively participated in Plexus. But Spice did not keep a
detailed accounting for Plexus beyond using bank statements and taxes, and sometimes he and
Mathews withdrew money from Plexus accounts at casinos. Both Spice and Mathews used
Plexus money for personal expenditures. The casino withdrawals alone totaled over $400,000,
and additional unidentified withdrawals from Plexus accounts totaled several hundred thousand
dollars.
Several property transfers are at issue in this case.
Between 2007 and 2009, Mathews granted Spice quitclaim deeds to 11003 58th St. Ct. E
and 11319 58th St. Ct. E.
In 2004, Spice granted Plexus a quitclaim deed to a property in Napavine.
Between 2007 and 2008, Mathews granted Plexus a quitclaim deed to 5818 Milwaukee
Ave. E. and 11305 58th St. Ct. E.
In 2008, Mathews granted herself, Spice, and Paul Pasyuk a quitclaim deed to 11305 58th
St. Ct. E.
In 2009,2 Plexus granted Spice quitclaim deeds to 5818 Milwaukee Ave. E., 10915-10917
59th St. Ct. E, and a parcel in Kitsap County.
In addition, the ownership of 11010 58th St. Ct. E. was at issue: it was listed in the promissory
note, but it appears that Mathews never conveyed it to Plexus or Spice.
In December 2009, Mathews died. Spice filed a creditor’s claim against her estate
alleging that he was owed $8,000,000 under the promissory note. Mathews’s estate rejected this
claim in full. Spice then filed suit against the estate alleging breach of contract. Spice later
amended his complaint to allege conversion, tortious interference, breach of fiduciary duty, and
2
These transfers occurred after Mathews’s death.
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No. 44101-2-II
frivolous litigation. Spice’s suit relied only on the promissory note, not on the Plexus Operating
Agreement, to establish breach of contract.
The estate filed 25 counterclaims, including fraud, undue influence, breach of fiduciary
duties, wrongful death, and other claims regarding Spice’s relationship with Mathews. One of
these counterclaims was a quiet title action concerning the properties discussed above. The trial
court dismissed the counterclaim for wrongful death on summary judgment, but the remaining 24
counterclaims proceeded to trial.
Spice moved in limine to exclude certain character evidence including “who parks at
[Spice’s] home” and “who stays at [Spice’s] home.” Clerk’s Papers (CP) at 683-84. The trial
court granted this motion.
The case proceeded to a jury trial, during which witnesses testified about Spice’s and
Mathews’s relationship and business dealings. At trial, the estate’s counsel asked a witness
about who visited Spice at his home, and the witness responded: “Boys. Lots and lots of young
boys.” 4 Verbatim Report of Proceedings (VRP) at 435. The trial court sustained Spice’s
objection, and at a sidebar conference, the trial court contemplated whether a mistrial was
appropriate. The court found that the witness’s “tone and inflection” raised an “obvious
inference as to Mr. Spice’s sexual orientation and actual misconduct on the part of Mr. Spice.” 4
VRP at 439. The court also found that the witness anticipated the question and that it was asked
in such a way so as to evade the order in limine regarding character evidence. The court said that
either a mistrial or individual questioning of jurors would be an appropriate remedy. Spice
refused the offer to declare a mistrial. Instead, the trial court questioned each juror individually
about whether he or she noticed the innuendo in the question and answer, and, if so, whether the
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No. 44101-2-II
juror could still be fair. The trial court satisfied itself that each juror could provide a fair verdict.
Upon Spice’s request, the trial court later found the estate’s counsel in contempt for violating the
order in limine.
Instead of asking the jury to issue special verdicts regarding each claim and counterclaim,
the parties and the court had the jury present its verdict in the form of distributing the properties
at issue in the case. The jury found that neither Spice nor the estate was entitled to all right title
and interest in the properties. Instead, the jury distributed the property as follows:
11003, 11004, 11007, 3 and 110114 58th St. Ct. E: 25 percent to Spice, 75 percent to the
estate.
Napavine property: 5 100 percent to Spice.
5818 #A and #B Milwaukee Ave E.6: 100 percent to the estate.
11305 58th St. E.7: 100 percent to the estate.
11319 58th St. E.8: 100 percent to Spice.
10915-10917 58th St.9: 100 percent to the estate.
Kitsap County acreage: 50 percent to Spice, 50 percent to the estate.
3
The market value of the triplex at 11003 was roughly $610,000. It is unclear from the record
whether the triplex includes 11004 and 11007.
4
This may be a scrivener’s error; the record elsewhere refers only to 11010 58th St.
5
The record does not appear to contain value estimates for the Kitsap County acreage or the
Napavine property.
6
The market value of this property was roughly $269,000.
7
The market value of this property was roughly $250,000.
8
The market value of this property was roughly $325,000.
9
The market value of this property was roughly $225,000.
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No. 44101-2-II
After the jury’s verdict, Spice moved for judgment as a matter of law or a new trial under
CRs 49, 50, and 59. He argued that judgment as a matter of law or a new trial was appropriate
because there was not sufficient evidence to support the jury’s verdict. At a hearing on this
motion, Spice’s attorney told the court, “[W]e’re not asking for a new trial.” VRP (Oct. 5, 2012)
at 3-4. Instead, Spice said he wanted the court to revise the jury’s verdict as a judgment as a
matter of law.
The trial court denied Spice’s motion for judgment as a matter of law or a new trial. It
noted that the case was complex and that it was difficult to know on what basis the jury made its
decision, because there were no special verdict forms about specific claims or documents. But
the court explained that the jury must have decided not to rule in Spice’s favor because there
were “hundreds of thousands of dollars of monies that were unaccounted for,” and the defense
had posited that legal documents between the parties were unfairly or even fraudulently
favorable to Spice. VRP (Oct. 5, 2012) at 11. It referred to the testimony about transfers of
money and concluded that the jury could have concluded that “the operating agreement[] was a
fraud, that any of the transfers were a fraud or misrepresented to [Mathews], that Mr. Spice may
have taken more cash and [the jury] offset that amount toward anything he might be claiming in
the property.” VRP (Oct. 5, 2012) at 12. It denied the motion for judgment as a matter of law or
a new trial, concluding that the jury had considered conflicting evidence and the credibility of the
witnesses and distributed the properties accordingly.
Spice moved for reasonable attorney fees pursuant to the promissory note and the Plexus
Operating Agreement, arguing that he was the substantially prevailing party. The estate also
moved for reasonable attorney fees as the substantially prevailing party under the promissory
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No. 44101-2-II
note. The trial court denied reasonable attorney fees to both parties. Regarding Spice, the trial
court found that he was not the substantially prevailing party, after considering the “values of the
properties and the amount of interest in the real property” that the estate received. CP at 1225.
The court also rejected Spice’s argument that he was the substantially prevailing party for having
defended against the estate’s numerous affirmative defenses and counterclaims.
Turning to the estate’s request for attorney fees, the trial court found that the estate was
the substantially prevailing party. But the trial court denied the estate’s request for reasonable
attorney fees because of the estate’s “excessive motion and litigation practice and ineffective use
of court time,” as well as the delays caused by the estate’s counsel’s inexperience. CP at 1227.
The court also wrote:
This Court also repeats its finding that it has serious questions regarding the legality
of the documents upon which both parties are relying on with regard to their
contractual source of the reasonable attorney’s fees request; specifically, a
promissory note and the Plexus, LLC, operating agreement. Although no specific
jury instruction was requested to make a finding as to whether or not those
documents were in fact credible, the Court can only infer, from the decision of the
jury which weighed heavily in the ultimate result in favor of the Estate of Doris E.
Mathews, that they also shared those questions regarding the legality of said
documents.
CP at 1227. The trial court concluded that an award of statutory attorney fees and costs only was
appropriate based on the estate counsel’s lack of experience, counsel’s excessive motions, and
the number of baseless counterclaims and affirmative defenses.
Accordingly, the trial court entered the following relevant conclusions of law: that Spice
was not the prevailing party, and that the estate receive only statutory fees and costs. The court
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No. 44101-2-II
wrote that it did not “believe there is a contractual basis to award fees [to the estate].” CP at
1228. Spice appeals.10
ANALYSIS
I. ATTORNEY FEES
Spice argues that the trial court erred by denying his request for attorney fees. He argues
primarily that he was the substantially prevailing party.11 We hold that Spice was not entitled to
attorney fees because neither party was the substantially prevailing party.12
A. Standard of Review
We generally engage in a two-step process to review a trial court’s denial of attorney
fees. State v. AU Optronics Corp., 180 Wn. App. 903, 913, 328 P.3d 919 (2014). First, we
review de novo whether a statute, contract, or equity provides a basis for the award of attorney
fees. AU Optronics, 180 Wn. App. at 913. Where, as here, the award of attorney fees depends
on a determination of who substantially prevailed, we review the trial court’s determination of
who is the substantially prevailing party de novo. Hawkins v. Diel, 166 Wn. App. 1, 10, 269
P.3d 1049 (2011). Second, we review the trial court’s decision to award attorney fees, as well as
10
The estate does not appeal the trial court’s decision to not award the estate’s reasonable
attorney fees under the promissory note.
11
As a threshold matter, the estate argues that we should deem the trial court’s findings of fact
about attorney fees verities on appeal because Spice failed to include these findings verbatim in
his brief as required by RAP 10.4(c). Spice does include the material portions of the findings of
fact in his brief, and we exercise our discretion to consider his argument on the merits.
12
Spice and the estate argue the validity and applicability of the attorney fee provisions in the
promissory note and Plexus Operating Agreement. Because we affirm the trial court’s finding
that Spice did not substantially prevail, we do not address these arguments.
8
No. 44101-2-II
the reasonableness of the amount, for an abuse of discretion. AU Optronics, 180 Wn. App. at
913. A trial court abuses its discretion when its decision is unreasonable, based on untenable
grounds, or made for untenable reasons. Cook v. Brateng, 180 Wn. App. 368, 375, 321 P.3d
1255 (2014).
B. Substantially Prevailing Party
Spice argues that he was the substantially prevailing party, and therefore he deserved
reasonable attorney fees under the promissory note and the Plexus Operating Agreement. We
disagree because neither party substantially prevailed. Thus, the trial court did not abuse its
discretion by denying Spice’s request for attorney fees because he was not a substantially
prevailing party.
Under RCW 4.84.330, the prevailing party in a contract dispute is entitled to attorney
fees incurred to enforce the contract, so long as the contract specifically provides for attorney
fees to either party. Here, the promissory note provides for reasonable attorney fees in the event
of default, and the Plexus Operating Agreement provides for attorney fees to the substantially
prevailing party.
“The substantially prevailing party need not prevail on his or her entire claim.” Hawkins,
166 Wn. App. at 10. Determining which party substantially prevailed depends on the relief
granted. Dave Johnson Ins., Inc. v. Wright, 167 Wn. App. 758, 783, 275 P.3d 339 (2012). If
“both parties are awarded relief, the net affirmative judgment may determine the prevailing
party.” Phillips Bldg. Co. v. An, 81 Wn. App. 696, 702, 915 P.2d 1146 (1996). However, the net
affirmative judgment method may not be appropriate where a party receives affirmative
judgment on just a few claims. Phillips, 81 Wn. App. at 702. Alternatively, where multiple and
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No. 44101-2-II
distinct claims were at issue, the trial court should take a “proportionality approach.” Marassi v.
Lau, 71 Wn. App. 912, 917, 859 P.2d 605 (1993), overruled on other grounds by Wachovia SBA
Lending, Inc. v. Kraft, 165 Wn.2d 481, 490, 200 P.3d 683 (2009).
But if both parties are awarded “some measure of relief and there is no singularly
prevailing party, neither party may be entitled to attorney fees” and both parties will pay their
own costs and fees.13 Phillips, 81 Wn. App. at 702. For example, in Hertz v. Riebe, the
plaintiffs succeeded on their breach of contract claim and the defendants succeeded on their
collections claim. 86 Wn. App. 102, 104-05, 936 P.2d 24 (1997). The court held that because
both parties prevailed on major issues, neither party was entitled to attorney fees. Hertz, 86 Wn.
App. at 105-06.
Here, neither party substantially prevailed because both parties were afforded some
measure of relief. Hertz, 86 Wn. App. at 105-06; Phillips, 81 Wn. App. at 702. The many issues
at trial involved whether the estate breached the promissory note, whether the estate committed
conversion, tortious interference, or breach of fiduciary duty, and whether Spice committed any
of the torts and contract violations alleged in the 25 counterclaims. But the jury provided its
verdict in the form of distributing property. It found that neither Spice nor the estate was entitled
to all right and interest in the properties, instead dividing them as follows: Spice received 100
percent of two of the properties, the estate received 100 percent of four of the properties, and the
13
The estate does not argue that neither party substantially prevailed, but Spice admits that this
would be the case if we hold that both parties prevailed on major issues.
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No. 44101-2-II
parties shared interest in the remaining properties. Thus, both parties were awarded significant
portions of the properties, and neither party clearly prevailed over the other.
Spice argues that we should deem him the prevailing party because he prevailed against
all of the estate’s counterclaims. We disagree: the jury provided a verdict in the form of
distributing property only. It is inappropriate to attempt to look behind the jury’s distribution of
property to divine what claims or counterclaims they believed had been proved. We do not
inquire into the jury’s process. Breckenridge v. Valley Gen. Hosp., 150 Wn.2d 197, 204-05, 75
P.3d 944 (2003). Thus, there is no basis upon which we can determine how many claims on
which each party prevailed.
Moreover, Spice provides no authority for the proposition that a party substantially
prevails by prevailing on numerically more claims or counterclaims. Where a party cites no
authority for a proposition, we may assume that the party has unsuccessfully searched for such
authority. Dep’t of Ecology v. Wahkiakum County., 184 Wn. App. 372, 376-77 n.3, 337 P.3d
364 (2014), review denied, 182 Wn. 2d 1023 (2015). In other words, there is no support for the
notion that we should determine that Spice substantially prevailed merely because he defended
against 24 counterclaims, even if the record supported the notion that the jury found that he
defended all those counterclaims.
Spice argues in the alternative that we should award both parties proportional attorney
fees because both prevailed on major issues. A proportional award of attorney fees is sometimes
appropriate when each party prevails on distinct and severable claims. See Marassi, 71 Wn.
App. at 915. But as stated above, it is impossible to know which claims each party prevailed on.
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No. 44101-2-II
Thus, in this circumstance, it is appropriate that each party bear its own costs and fees, because
neither party substantially prevailed. See Phillips Bldg. Co., 81 Wn. App. at 702.
Because neither party substantially prevailed, the trial court did not abuse its discretion
by denying attorney fees to Spice.14 As stated above, Spice received less than half of the
properties. And as the trial court noted, it is inappropriate for Spice to attempt to determine how
many of the counterclaims he won. Thus, the trial court had tenable grounds and reasons for
ruling that Spice, as a nonprevailing party, should not receive attorney fees. See Cook, 180 Wn.
App. at 375.
II. POST-TRIAL MOTIONS
Spice argues that the trial court erred by denying his motions for judgment as a matter of
law or a new trial.15 We disagree.
A. Judgment as a Matter of Law Issue Not Preserved
CR 50(b) governs post-verdict motions for judgments as a matter of law. Such a motion
is proper when the court can find, as a matter of law, that there was no substantial evidence or
reasonable inference to sustain a verdict for a nonmoving party. Guijosa v. Wal-Mart Stores,
Inc., 144 Wn.2d 907, 915, 32 P.3d 250 (2001). But a party loses the opportunity to make a
motion for judgment as a matter of law if it fails to move for a directed verdict under CR 50(a)
14
The trial court found that the estate was the substantially prevailing party. This finding does
not affect the analysis in this case because the trial court ultimately denied the estate’s request for
reasonable attorney fees on other grounds, and the estate does not appeal this determination.
15
After the jury verdict, Spice simultaneously moved for judgment under CRs 49, 50, and 59.
He appeals the trial court’s adverse ruling for judgment as a matter of law under CR 50(b) and a
new trial under CR 59.
12
No. 44101-2-II
before the case is submitted to a jury. Gorman v. Pierce County, 176 Wn. App. 63, 86, 307 P.3d
795 (2013), review denied, 179 Wn.2d 1010 (2014); see CR 50(b).
Spice concedes he requested the judgment as a matter of law only after the verdict came
back from the jury, without previously having made a motion for a directed verdict. Thus, Spice
failed to preserve his judgment as a matter of law issue, and this claim fails.
B. Motion for New Trial Issue Not Preserved
Spice appears to argue that the trial court erred by denying his motion for a new trial
because the evidence did not support the jury’s verdict and because the estate’s attorney
committed misconduct. We hold that Spice is not entitled to a new trial on either basis because
he failed to preserve either issue for appeal.
1. Request for New Trial Issue Not Preserved
Spice’s written motion in the trial court appeared to request a judgment as a matter of law
and a new trial in the alternative, but at the hearing on Spice’s motion, his counsel said: “[W]e’re
not asking for a new trial.” VRP (Oct. 5, 2012) at 3-4. Instead, he said he was requesting the
trial court to alter the jury’s verdict. Because Spice did not request or argue why he was entitled
to a new trial below, he has not preserved this issue on appeal and we decline to consider it.
RAP 2.5. Additionally, because Spice told the trial court he was not seeking a new trial, the trial
court did not rule on his request for a new trial. Thus, there is no ruling for us to review.
2. Misconduct Argument Not Preserved on Appeal
Spice also argues that he deserved a new trial under CR 59 because of the misconduct of
the estate’s counsel. Spice failed to preserve this issue for appeal for two reasons.
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No. 44101-2-II
First, Spice did not argue to the trial court that opposing party misconduct required a new
trial. He argued only that the jury verdict was unsupported and should be altered. Because we
review the trial court’s ruling on a motion for a new trial for an abuse of discretion, we generally
review only those grounds argued to the trial court. See RAP 2.5.
Second, Spice refused the trial court’s offer to declare a mistrial after a witness appeared
to raise an inappropriate innuendo about Spice’s sexuality. A party waives the right to request a
new trial based on misconduct if it declines a mistrial on the same basis. Estate of Lapping v.
Grp. Health Co-Op. of Puget Sound, 77 Wn. App. 612, 619-21, 892 P.2d 1116 (1995). Thus,
Spice has waived the right to a new trial due to misconduct because he declined a mistrial when
the misconduct occurred.
ATTORNEY FEES ON APPEAL
Both Spice and the estate request attorney fees on appeal. We grant the estate’s request.
Spice argues that he is entitled to attorney fees under RCW 4.84.330, which permits
attorney fees to the prevailing party under a contractual agreement. But because Spice is not the
prevailing party on appeal, he is not entitled to attorney fees on appeal.
Similarly, the estate requests attorney fees on appeal under RCW 4.84.330, pursuant to
the attorney fee provision in the promissory note. Because we hold in the estate’s favor on
appeal, RCW 4.84.330 entitles the estate to reasonable attorney fees on appeal to be set by the
commissioner of this court upon compliance with RAP 18.1(d).
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No. 44101-2-II
Affirmed.
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.
Worswick, J.
We concur:
Johanson, C.J.
Maxa, J.
15