IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION ONE
LAKEHILL INVESTMENTS LLC, a ) No. 79116-8-I
Washington limited liability company, )
)
Appellant/Cross Respondent, )
)
v. )
)
RUSHFORTH CONSTRUCTION )
COMPANY, INC., d/b/a ) PUBLISHED OPINION
AP RUSHFORTH, a Washington )
corporation, and ADOLPH & )
PETERSON, INC., a Minnesota )
corporation, )
)
Respondent/Cross Appellant. )
)
VERELLEN, J. — A contractor accused of breach of contract due to
construction defects may assert the affirmative defense that the owner’s plans and
specifications were defective and caused all of the construction defects. Because
the successful affirmative defense shields the contractor from all liability, the
contractor is required to prove all construction defect damages established by the
owner are attributable to defective plans and specifications. Here, jury instruction
9 misstated AP Rushforth Construction Company’s burden of proving its
affirmative defense, and a new trial is required.
No. 79116-8-I/2
Lake Hills Investments, LLC assigns error to two other instructions but fails
to demonstrate prejudice. The court’s instruction on liquidated construction delay
damages misled the jury that it could excuse AP from delay days caused by
agents of AP, but Lake Hills does not establish any prejudice. The court should
have instructed the jury that only a material breach of the duty of good faith and
fair dealing by hindrance could excuse performance by AP, but under these
circumstances, the omission of “material” was harmless. None of the other issues
raised on appeal and cross appeal warrant any relief.
Therefore, we reverse and remand for a new trial.
FACTS
Lake Hills Village consists of several buildings constructed around a large
parking lot. The buildings are a public library, two mixed-use residential/retail
buildings, three commercial buildings, and some townhouses. Connecting the
library and an adjacent commercial building are an elevator tower and a
pedestrian bridge.
These structures were constructed over several years in several phases.
AP was the general contractor for four phases. Phase 1 was construction of the
library and Building A, a commercial building. Phase 2C was construction of half
of a large underground parking garage, including a large concrete slab on the
ground; the concrete topping slab on the parking garage, which also served as the
above-ground parking lot; and foundation work on the mixed-use buildings and
another commercial building, which are called, respectively, Building B, Building C,
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and Building D. Phase 3 was completing construction of Buildings B, C, and D.
Phase 4 was construction of the townhomes. Phase 5A was construction of the
elevator tower, the pedestrian bridge, the rest of the underground parking garage,
and construction of retail space under Building A. Phase 5B was construction of
the third commercial building, Building F.
Construction on AP’s portion of Lake Hills Village was supposed to begin on
February 16, 2013, and be completed by January 31, 2015. Each phase of the
project had its own substantial completion date, and Lake Hills could assess
liquidated damages for delay days past those substantial completion dates.1
Every phase of the project AP was contracted to build, phases 2C, 3, 5A, and 5B,
was delayed. In November of 2014, Lake Hills notified AP it was in breach of the
contract schedule and blamed AP’s management practices and insufficient jobsite
staffing. Lake Hills also began identifying work it considered defective, such as
excessive cracking in the concrete garage floor slab. AP blamed the delays on
Lake Hills “arbitrarily” cutting its pay applications, making it difficult for it to hire and
retain subcontractors.2 AP blamed construction defects on Lake Hills providing “a
1 At trial, the parties disputed whether delay days for purposes of liquidated
damages were calculated per phase per day, totaling $10,000 per calendar day if
each of the four contractual phases was simultaneously delayed, or was
calculated for the entire project. The jury concluded it applied per phase per day
but that the parties did not intend to assess liquidated damages for phases 5A and
5B. These findings have not been challenged.
2Report of Proceedings (RP) (July 30, 2018) at 2476-77; RP (Aug. 7, 2018)
at 3482-83.
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No. 79116-8-I/4
sketch” or “a concept” rather than buildable designs.3 Relations deteriorated, and
in late October of 2015, Lake Hills filed suit against AP for breach of contract. AP
stopped work a few weeks later and filed its own breach claim alleging
underpayment.
Pretrial, the parties produced more than 1,000,000 documents, took 59
depositions, and participated in six days of mediation. The court ruled that neither
party could introduce evidence of the other party’s “[d]isputes with others,” and the
court prohibited AP from introducing evidence of certifications Lake Hills made to
its lender when requesting funds.4
The trial lasted almost two months, and the jury heard from two dozen
witnesses. One witness, Oscar Del Moro, the owner’s representative overseeing
the Lake Hills Village project, testified for six-and-a-half days. Using a special
verdict form, the jury returned a mixed verdict. It found that construction defects
by AP breached the contract and awarded damages in six of eight areas of
claimed defects. The jury also found that each phase of the project was
completed past its substantial completion date, Lake Hills was responsible for the
vast majority of delay days, AP did not breach by stopping work, and Lake Hills
breached the contract by underpaying AP. The court awarded a net judgment in
favor of AP of $9,624,695.80, including $5,866,016 in attorney fees and costs.
Lake Hills appeals, and AP cross appeals.
3 RP (Aug. 2, 2018) at 3203.
4 RP (June 25, 2018) at 39.
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ANALYSIS
I. Jury Instructions
Lake Hills argues the court gave three erroneous jury instructions and erred
by refusing to adopt its proposed instruction. We review jury instructions “‘de novo
if based upon a matter of law or for abuse of discretion if based upon a matter of
fact.’”5 Jury instructions are legally erroneous when, read as a whole, they fail to
allow a party to argue its theory of the case, mislead the jury, or fail to inform the
jury of the applicable law.6 An erroneous instruction is grounds for reversal if it
prejudiced a party.7 We presume a party was prejudiced when the instruction
contains a clear misstatement of the law, but when the instruction was merely
misleading, the appellant must prove the instruction was prejudicial.8 The
presumption of prejudice can be overcome on a showing that the error was
harmless.9
5
Hendrickson v. Moses Lake Sch. Dist., 192 Wn.2d 269, 274, 428 P.3d
1197 (2018) (internal quotation marks omitted) (quoting Taylor v. Intuitive Surgical,
187 Wn.2d 743, 767, 389 P.3d 517 (2017)).
6
Anfinson v. FedEx Ground Package Sys., Inc., 174 Wn.2d 851, 860, 281
P.3d 289 (2012) (quoting Bodin v. City of Stanwood, 130 Wn.2d 726, 732, 927
P.2d 240 (1996)).
7 Id. (citing Joyce v. Dep’t of Corr., 155 Wn.2d 306, 323, 119 P.3d 825
(2005)).
8 Id. (citing Keller v. City of Spokane, 146 Wn.2d 237, 249-50, 44 P.3d 845
(2002)).
9 Paetsch v. Spokane Dermatology Clinic, P.S., 182 Wn.2d 842, 849, 348
P.3d 389 (2015) (citing Griffin v. W. RS, Inc., 143 Wn.2d 81, 91, 18 P.3d 558
(2001)).
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A. Jury Instruction 9
When an owner includes its building plans and specifications as part of a
contract, the contract contains an implied warranty that the plans and
specifications are workable and sufficient.10 Breach of that warranty could be the
basis of a contractor’s claim,11 counterclaim,12 or affirmative defense.13 Here, AP
alleged an affirmative defense based upon Lake Hills’ implied warranty, so our
analysis is limited to breach of the owner’s implied warranty as an affirmative
defense.
10 Tyee Constr. Co. v. Pac. Nw. Bell Tel. Co., 3 Wn. App. 37, 40-41, 472
P.2d 411 (1970) (quoting Ericksen v. Edmonds Sch. Dist. No. 15, 13 Wn.2d 398,
408, 125 P.2d 275 (1942)); 4A PHILIP L. BRUNER & PATRICK J. O’CONNOR, JR.,
BRUNER AND O’CONNOR ON CONSTRUCTION LAW § 13.7 (2009). Here, the issues
arise between the owner and contractor. Similar disputes can arise in a variety of
circumstances between parties other than owners and contractors. E.g., Huetter
v. Warehouse & Realty Co., 81 Wash. 331, 142 P. 675 (1914) (action by
subconcontractor against general contractor alleging deficient plans).
11 E.g., Larson v. Tacoma Sch. Dist. No. 10, 143 Wash. 414, 255 P. 113
(1927); Huetter, 81 Wash. at 332; Donald B. Murphy Contractors, Inc. v. State, 40
Wn. App. 98, 101-02, 696 P.2d 1270 (1985).
12 E.g., King County v. Vinci Const. Grands Projets, 191 Wn. App. 142,
162-63, 364 P.3d 784 (2015), aff’d sub nom. King County v. Vinci Constr. Grands
Projets/Parsons RCI/Frontier-Kemper, JV, 188 Wn.2d 618, 398 P.3d 1093 (2017).
13 E.g., Kenney v. Abraham, 199 Wash. 167, 170, 90 P.2d 713 (1939).
Although not at issue as argued on appeal, defective plans and specifications may
also come into play as part of a general defense to rebut the owner’s case by
showing that the owner failed to establish that the contractor’s deficient
performance caused the particular damages alleged. See W ILLIAM
SCHWARTZKOPF, CALCULATING CONSTRUCTION DAMAGES § 1.07 (3d ed. Supp. 2020)
(“When defending against a claim, the causal link or lack thereof between
damages claimed and [the contract] entitlement asserted provides a basis upon
which to attack the claim.”).
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No. 79116-8-I/7
Jury instruction 9 guided the jury on deciding Lake Hills’ breach of contract
claim alleging multiple construction defects in eight different areas of work. The
parties agreed AP had a duty to build in compliance with the contract, so Lake
Hills had to prove:
2. That AP breached the contract by failing to construct
certain areas of work in compliance with the contract documents;
and
3. That Lake Hills was damaged as a result of AP’s breach.[14]
Because the jury found AP liable,15 jury instruction 9 directed the jury to consider
AP’s affirmative defense that Lake Hills’ defective plans or specifications caused
the construction defects and its damages. The court instructed the jury:
For its affirmative defense, AP has the burden to prove that
Lake Hills provided the plans and specifications for an area of work
at issue, that AP followed those plans and specifications, and that
the [construction] defect resulted from defects in the plans or
specifications.
If you find from your consideration that this affirmative defense
has been proved for a particular area, then your verdict should be for
AP as to that area.[16]
14 Clerk’s Papers (CP) at 348 (jury instruction 9).
15 The special verdict form posed a single question about liability for this
multipart claim: “Do you find in favor of Lake Hills on its first breach of contract
claim as to any area of work (defective work)?” CP at 370. The jury could only
choose “yes” or “no,” even though jury instruction 9 asked the jury to weigh liability
for each “particular area of defective work.” CP at 348. If the jury answered “yes,”
then it was directed to make damage determinations for each of the eight areas of
alleged defective work. The jury found zero damages for two of the eight areas.
16 CP at 348-49.
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No. 79116-8-I/8
The court intended this defense to allow “apportionment of how much [each]
defect is due to each party.”17 It explained “if AP did something defectively and
that was 50 percent due to the plans and specifications and 50 percent due to
poor workmanship, th[en] they can only claim a lack of responsibility for the 50
percent due to plans and specifications.”18
Lake Hills argues the court erred by not stating AP’s burden was to prove
that the “construction defect results solely from the defective or insufficient plans
or specifications.”19 As argued on appeal, jury instruction 9 presents two
questions: whether the instruction on AP’s affirmative defense correctly stated the
law and, specifically, whether refusing to include “solely” was an abuse of
discretion.20
An affirmative defense is an absolute bar to liability even when the plaintiff
proves its case.21 “‘Affirmative defenses plead matters extraneous to the plaintiff's
prima facie case, which deny plaintiff's right to recover, even if the allegations of
17 RP (July 27, 2018) at 2402.
18 Id. at 2401.
19 Appellant’s Br. at 28.
20 See Housel v. James, 141 Wn. App. 748, 758, 172 P.3d 712 (2007) (the
precise wording of an instruction is “within the broad discretion of the trial court”)
(citing State v. Alexander, 7 Wn. App. 329, 336, 499 P.2d 263 (1972)).
21 Erickson v. Biogen, Inc., 417 F. Supp. 3d 1369, 1386 (W.D. Wash. 2019);
see BLACK’S LAW DICTIONARY 528 (11th ed. 2019) (definition of “affirmative
defense”: “A defendant’s assertion of facts and arguments that, if true, will defeat
the plaintiff’s or prosecution’s claim, even if all the allegations in the complaint are
true.”).
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No. 79116-8-I/9
the complaint are true.’”22 Because the defendant asserting an affirmative defense
presents an independent legal theory based on evidence extraneous to the
plaintiff’s case, it bears the burden of proof.23
Here, the affirmative defense in jury instruction 9 required that the jury
absolve AP of liability from a construction defect in an area of work if AP
established “the [construction] defect resulted from defects in the plans or
specifications.”24 Thus, proof of any defect in the plans and specifications for that
area contributing to a construction defect would let AP avoid all liability for that
area even if Lake Hills proved AP’s deficient performance caused some of the
damage. This instruction incorrectly understated AP’s burden of proof.25
Jury instruction 9 clearly misstated the law governing AP’s affirmative
defense, so we presume Lake Hills was prejudiced.26 AP suggests any error was
harmless because Lake Hills was able to argue its theory of the case and the jury
22
Erickson, 417 F. Supp. 3d at 1386 (quoting Fed. Deposit Ins. Corp. v.
Main Hurdman, 655 F. Supp. 259, 262 (E.D. Cal. 1987)).
23 See Main Hurdman, 655 F. Supp. at 262 (“[A]n affirmative defense puts
the plaintiff on notice that matters extraneous to his prima facie case are in issue
and ordinarily allocates the burden of proof on the issue.”) (citing Kouba v. Allstate
Ins. Co., 691 F.2d 873 (9th Cir. 1982)); McVay v. Reese, 62 Wash. 562, 563, 114
P. 184 (1911) (defendant has the burden of proving an affirmative defense).
24 CP at 348-49.
25 Additionally, the wording of jury instruction 9 did not accomplish the
court’s stated goal of limiting AP’s exposure to only damages resulting from AP’s
defective performance, as distinguished from damages resulting from Lake Hill’s
defective plans.
26Anfinson, 174 Wn.2d at 860 (“Prejudice is presumed if the instruction
contains a clear misstatement of law.”).
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No. 79116-8-I/10
awarded only a fraction of Lake Hills’ requested damages. The special verdict
form does not support that conclusion.
The jury awarded zero damages for two of the eight alleged defective areas
of work after finding AP liable. As to these two areas, there was evidence of both
deficient performance by AP and defective plans and specifications by Lake Hills.
For example, Lake Hills’ concrete expert testified excessive cracking in the garage
slab was caused by late and deficient saw cuts to the concrete, as well as
inappropriate placement of types of crack control joints. He testified the plans and
specifications did not contribute to the cracks. AP’s concrete expert testified he
saw no construction errors in the garage slab and the saw cutting and crack
control joint placement were irrelevant because the plans and specifications
caused the cracking by requiring the use of rebar as reinforcement throughout the
slab. Notably, AP’s expert agreed the saw cuts did not comply with the plans and
specifications but opined the failure to comply was irrelevant because the rebar
reinforcement caused the cracking. On this record and with this special verdict
form,27 we cannot rule out the possibility that the incorrect affirmative defense
portion of jury instruction 9 impacted the jury award.
Lake Hills contends the trial court should have used its proposed wording
that the “construction defect result[ed] solely from the defective or insufficient
27It is unclear if the jury found AP liable for those areas of work and then
absolved it because AP proved its affirmative defense or if the jury did not find AP
was liable for those areas of work.
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No. 79116-8-I/11
plans or specifications.”28 Including the word “solely” accords with the rule relied
upon by Lake Hills from Kenney v. Abraham:
[A] construction contractor who has followed plans and/or
specifications furnished by the [owner], his architect or engineer, and
which have proved to be defective or insufficient, will not be
responsible to the [owner] for loss or damage which results . . . solely
from the defective or insufficient plans or specifications.[29]
AP disputes that Kenney supports “solely” because its true holding is found
in that court’s reference to White v. Mitchell, where the court explained a
contractor “will be excused only by acts of God, impossibility of performance, or
acts of the other party to the contract, preventing performance.”30 But the ultimate
holding in Kenney was both that the contractor did not “buil[d] in accordance with
the plans and specifications”31 and that the rule that a contractor is not responsible
to the owner for damages which result solely from defective plans or specifications
“was not applicable where there is negligence, as in the case at bar, on the
contractor’s part.”32 White does not preclude or conflict with this holding.
28 Appellant’s Br. at 28.
29199 Wash. 167, 170, 90 P.2d 713 (1939) (emphasis added) (quoting
Annotation, Responsibility of Construction Contractor or His Bond to Contractee
for Defects or Insufficiency of Work Attributable to Plans and Specifications
Furnished by Latter, His Engineer or Architect, 88 A.L.R. 797, 798 (1934)
(replaced by S. Bernstein, Annotation, Construction Contractor’s Liability to
Contractee for Defects or Insufficiency of Work Attributable to the Latter’s Plans
and Specifications, 6 A.L.R.3d 1394, § 2 (1966))).
30 123 Wash. 630, 634-35, 213 P. 10 (1923).
31 Kenney, 199 Wash. at 171.
32 Id. at 173.
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No. 79116-8-I/12
The holding in another case relied upon by AP, Maryland Casualty
Company v. Seattle, is consistent.33 There, a contractor hired to build a sewer
tunnel sued Seattle for additional compensation after choosing a more expensive
method of completing the contract, and Seattle refused to pay the additional
costs.34 Applying the principle from White, the court upheld the trial court’s denial
of the contractor’s claim because the expensive option was not contemplated by
the contract and the contractor chose to use the more expensive method when a
less expensive, but more difficult, option was contractually authorized.35 That
holding also does not conflict with the rule identified and applied in Kenney that
defective plans and specifications only save the contractor if the damages are
solely the result of those defective plans and specifications.
In the construction defect case Valley Construction Company v. Lake Hills
Sewer District, our Supreme Court analyzed the case by applying the “well-settled”
“general principals” from Kenney, White, and Maryland Casualty.36 A contractor
filed suit for additional expenses incurred from building a sewer, and the owner
counterclaimed for repair costs from the contractor’s failure to follow the plans and
specifications.37 The contractor argued the expenses were necessary to complete
the contract after the owner refused to let the contractor change its chosen
33 9 Wn.2d 666, 116 P.2d 280 (1941).
34 Id. at 667-68.
35 Id. at 674-75, 676, 680.
36 67 Wn.2d 910, 915-16, 410 P.2d 796 (1965).
37 Id. at 911.
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No. 79116-8-I/13
construction method, despite discovering difficult soil conditions.38 Citing Kenney,
the court explained the additional difficulty of performing the contract did not
excuse the contractor from its duties and the contractor was not entitled to its
additional costs because it deviated from the contract specifications after the
owner’s refusal.39
Read together, Kenney, White, Maryland Casualty, and Valley Construction
support the basic contract principle that a party must perform its duties and a
failure to perform entitles the injured party to damages proximately caused by the
breach.40 A breach is the proximate cause of damages where it was both the
cause in fact and legal cause of an injury.41 A defective plans affirmative defense
can relieve a breaching general contractor of its liability by proving an alternate
proximate cause. AP’s affirmative defense theory was that a single cause,
defective plans or specifications, injured Lake Hills. To be relieved of all liability for
38 Id. at 911-14.
39 Id. at 917-18.
40 See Colorado Structures, Inc. v. Ins. Co. of the W., 161 Wn.2d 577, 589,
167 P.3d 1125 (2007) (“Regardless of whether the breach is ‘material,’ the
promisee can recover damages.”); Larson v. Union Inv. & Loan Co., 168 Wash. 5,
12, 10 P.2d 557 (1932) (contract damages can be awarded when foreseeable and
proximately caused by breach); Nw. Indep. Forest Mfrs. v. Dep’t of Labor & Indus.,
78 Wn. App. 707, 712, 899 P.2d 6 (1995) (“A breach of contract is actionable only
if the contract imposes a duty, the duty is breached, and the breach proximately
causes damage to the claimant.”) (citing Larson, 168 Wash. at 12; Alpine Indus.,
Inc. v. Gohl, 30 Wn. App. 750, 754, 637 P.2d 166 (1984)); see also RESTATEMENT
(SECOND) OF CONTRACTS § 348(2) (AM. LAW INST. 1981) (defective construction
damages compensable where they result from breach).
41
Nw. Indep. Forest Mfrs., 78 Wn. App. at 713 (citing Hartley v. State, 103
Wn.2d 768, 777, 698 P.2d 77 (1985)).
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No. 79116-8-I/14
its breaches, AP had to prove Lake Hills’ defective designs “solely” caused the
plaintiff’s damages. This standard, expressly articulated in Kenney, is also
acknowledged by commentators on construction law.42
Because the affirmative defense portion of jury instruction 9 clearly
misstated the law and under these circumstances, including “solely” would have
adequately stated the law, the court abused its discretion.43
B. Jury Instruction 16
Jury instruction 16 governed Lake Hills’ claim for liquidated delay damages
and stated AP’s affirmative defenses to that claim. Lake Hills had to prove:
1. That the terms of the construction contract included a duty for AP
to substantially complete each phase by a deadline;
2. That AP failed to meet the substantial completion deadline(s); and
3. That Lake Hills was damaged as a result of AP’s breach.[44]
42 See MICHAEL T. CALLAHAN, ET AL., CONSTRUCTION DISPUTES:
REPRESENTING THE CONTRACTOR § 20.02 (4th ed. Supp. 2020) (“It is equally well-
established that if a contractor builds in a workmanlike manner according to plans
or specifications furnished by the owner, the contractor will not be responsible for
damages resulting solely from defects in the plans or specifications, assuming, of
course, that the contractor has not otherwise contractually assumed responsibility
for design.”); SCHWARTZKOPF, supra, § 1.07 (“Damages that are calculated even to
the smallest degree of detail are of no value if the damages are not causally linked
to the entitlement claimed.”).
43 We note that including “solely” may not be the only way to clarify the
precise burden of proof for a defective plans affirmative defense, but other options
are beyond the scope of the briefing in this appeal.
44 CP at 357.
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No. 79116-8-I/15
If the jury found AP liable, it had to consider its affirmative defenses. Lake Hills
assigns error to AP’s first affirmative defense absolving it from liability for delays
AP proved were “not solely caused by AP.”45
Lake Hills argues the defense erroneously absolved AP of damages for
inexcusable delays by preventing recovery when Lake Hills contributed to a delay.
But it also agrees AP was not liable for delay days where both parties contributed
to a delay. This contradiction stems from Baldwin v. National Safe Depository
Corporation, a 1985 case cited by both parties that seems to provide inconsistent
guidance on apportioning liquidated damages.46
In Baldwin, the court analyzed whether a lease of four signs allowed for
apportionment of liquidated damages where both the lessor and lessee partially
breached the contract.47 The court began its analysis by stating, “The majority rule
is a plaintiff cannot recover liquidated damages for a breach to which he has
contributed, and there can be no apportionment of liquidated damages where both
parties are at fault.”48 Despite this broad statement, the court upheld the trial
court’s apportionment of liquidated damages because “undue difficulty of proof
was not a problem” and “the jury was presented with an adequate basis for
allocating the contractual measure of damages to the respective parties.”49 This
45 Id.
46 40 Wn. App. 69, 697 P.2d 587 (1985).
47 Id. at 70-71.
48 Id. at 72.
49 Id. at 73.
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No. 79116-8-I/16
contradiction reflected the jurisprudence at the time surrounding liquidated
damages.
When Baldwin was decided, the majority rule was that liquidated damages
should not be apportioned when both parties contributed to the injury. 50 But over
the past 30 years, a “strong majority” of jurisdictions have come to allow
apportionment of liquidated delay damages.51 “The modern trend is for courts to
endeavor to apportion liquidated damages based on causation of delay as
between the owner and contractor.”52 Baldwin itself reflected this trend away from
the then-majority rule by relying upon traditional contract principles to uphold the
jury’s apportionment of liquidated damages.53 The modern rule is clear and well-
50 40 Wn. App. at 72; see John Livengood & Daniel S. Brennan,
Approaches to Concurrent Delay, 39 CONSTRUCTION LAW . 27, 30 (Winter 2019)
(“The reluctance on the part of the courts to dissect the factual intricacies
associated with concurrent delay continued into the twentieth century.”); BARRY B.
BRAMBLE & MICHAEL T. CALLAHAN, CONSTRUCTION DELAY CLAIMS § 11.09 (6th ed.
Supp. 2020) (“The traditional view has been that if the delays were inextricably
intertwined, the owner was prevented from assessing liquidated damages against
the contractor, while the contractor, because of its partial responsibility, was
similarly not entitled to damages.”); see also WERNER SABO, LEGAL GUIDE TO AIA
DOCUMENTS § 8.11 (6th ed. 2020) (“In the past, courts did not favor liquidated
damages clauses.” (citing Gen. Ins. Co. v. Commerce Hyatt House, 5 Cal. App. 3d
460, 85 Cal. Rptr. 317 (1970))).
51 Hutton Contracting Co., Inc. v. City of Coffeyville, 487 F.3d 772, 785-86
(10th Cir. 2007) (citing cases); see BRAMBLE & CALLAHAN, supra, § 11.09
(explaining the modern process for apportioning concurrent delays).
5 PHILIP L. BRUNER & PATRICK J. O’CONNOR, JR., BRUNER AND O’CONNOR
52
ON CONSTRUCTION LAW § 15.82 n.28 (2020) (citing cases).
5340 Wn. App. at 73 (“As here, where actual damages would be difficult to
prove and the jury was presented with an adequate basis for allocating the
contractual measure of damages to the respective parties, we find no reason to
deny apportionment. The jury’s verdict represents a just approximation of the
damage to each party.”).
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No. 79116-8-I/17
reasoned: a fact finder can apportion liquidated construction delay damages when
the evidence and the parties’ contract allow it.54
Here, the affirmative defense instruction let the jury excuse AP of delay
days it did not cause alone. Lake Hills does not contend the jury mischaracterized
the delay days as excusable, inexcusable, or concurrent; does not contend
concurrent delay days are apportionable; and does not contend insufficient
evidence supported how the jury apportioned the delays. Thus, we need not
address how to classify and apportion delay days.55 Because the instruction
properly allowed apportionment of liquidated delay damages, the question is
whether the instruction reflected the circumstances here.
54 Id.; see also Hutton, 487 F.3d at 785-86 (applying “the modern view and
allow[ing] liquidated damages to be apportioned when faced with damages that
are in fact divisible”); Sauer Inc. v. Danzig, 224 F.3d 1340, 1347 (Fed. Cir. 2000)
(allowing apportionment of liquidated damages for delay); E. Coast Repair &
Fabrication, LLC v. United States, 199 F. Supp. 3d 1006, 1030-31 (E.D. Va. 2016)
(“‘[A]pportionment’ should be permitted [for sequential delay] when the evidence
provides a reliable basis on which to determine which party is responsible for
which delay.”) (citing R.P. Wallace, Inc. v. United States, 63 Fed. Cl. 402, 411-13
(Fed. Cl. 2004)); R.P. Wallace, 63 Fed. Cl. at 413 (explaining “general contractual
principles, logic and fairness” support apportionment of liquidated delay damages
except when the evidence does not allow for it).
55 Federal case law provides guidance on these issues. See E. Coast
Repair, 199 F. Supp.3d at 1030 (citing George Sollitt Constr. Co. v. United States,
64 Fed. Cl. 229, 243 (2005)) (discussing the federal courts’ rules for apportioning
liquidated delay damages); R.P. Wallace, 63 Fed. Cl. at 410-13 (distinguishing
concurrent and sequential delays), 412 n.16 (noting the common confusion of
“sequential” and “concurrent” delays). We also note that commentators explain
how to apportion concurrent delays. E.g., BRAMBLE & CALLAHAN, supra, at
§§ 1.01(D), 11.09.
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No. 79116-8-I/18
The first question is whether the contract allowed apportionment. We
interpret contracts to carry out the parties’ objective intentions.56 Contract terms
are given their ordinary, everyday meaning unless the entirety of the contract
demonstrates a contrary intent.57 The reasonable meaning of the words used
reveals the parties’ intentions.58
Paragraph 10 of section B in exhibit B to the contract authorizes liquidated
damages and explains AP must pay $2,500 for each delay day after the 21st day,
calculated per project phase. It also requires that AP’s substantial completion
dates be extended “in the event [Lake Hills] fails to achieve one of the milestone
dates [in the contract] and that failure causes . . . [AP] to miss meeting the
substantial completion date.”59 Section 8.3.1 of the contract requires that the time
for substantial completion be extended if events wholly outside AP’s control,
including acts by Lake Hills’ agents, cause it to be delayed. No time extensions
“shall be granted” for delays caused by the AP’s failure to place purchase orders.60
Section 5.3.1 requires all subcontractors hired by AP be held to the same terms in
their relationships with AP. The contract reflects the parties’ intent to apportion
delay days because it requires calculating liquidated damage amounts by
Hearst Commc’ns, Inc. v. Seattle Times Co., 154 Wn.2d 493, 503, 115
56
P.3d 262 (2005).
57 Id.
58 Id.
59 Ex. 1 at LH00027126.
60 Id. at LH00027107.
18
No. 79116-8-I/19
examining each day of delay, identifying the cause of delay, and adding or
subtracting delay days based on the conduct of each party and its agents.
The second question is whether the contract and evidence presented at trial
supported excusing delay days “not solely caused by AP.”
The precise phrasing of a jury instruction is within the trial court’s
discretion.61 A court abuses its discretion where its decision rests on untenable
legal or factual grounds.62 The court explained it phrased AP’s first affirmative
defense in jury instruction 16 as a negative statement to keep the instruction
simple for the jury. Lake Hills urged the court to require that AP prove Lake Hills
or its agents caused the delay days. The court rejected that proposal because it
would require instructing the jury on agency, and the court reasoned “that
additional language” was “not necessary” because “[i]t’s AP’s burden to show they
didn’t cause the delays.”63
The court’s chosen language does not reflect the contract. The parties
agreed to apportion delay days based on the conduct of Lake Hills or its agents
and AP or its agents. The instruction let the jury excuse AP from any day of delay
caused by anything other than itself, including its own agents. Because the
61 Housel, 141 Wn. App. at 758.
62Leren v. Kaiser Gypsum Co., Inc., 9 Wn. App. 2d 55, 75, 442 P.3d 273
(2019), as amended on denial of reconsideration (Aug. 8, 2019), review denied
sub nom. Leren v. Elementis Chemicals, Inc., 194 Wn.2d 1017, 455 P.3d 133
(2020).
63 RP (Aug. 15, 2018) at 4769.
19
No. 79116-8-I/20
instruction misled the jury without misstating the law, reversal is required only if
Lake Hills was prejudiced.64
Lake Hills argues it was prejudiced because “the jury found AP was not the
‘sole’ cause of 90 [percent] of the delay on the project.”65 But the findings do not
reflect prejudice from a misleading instruction. They reflect a credibility
determination. The jury’s findings match the testimony from AP’s scheduling
expert, except for 21 additional delay days it attributed to AP.
AP’s expert calculated 355 delay days on phase 3 and excused AP from
313 of them. The jury did the same. Notably, the unexcused delay days attributed
to AP were caused by a subcontractor. The expert calculated 476 delay days on
phase 5A and excused AP from 410 of them. The jury did the same. The expert
calculated 384 delay days on phase 5B and excused AP of all of them. The jury
did the same. The jury deviated from the expert only on phase 2C because it
attributed 21 days of delay to AP, while the expert excused AP from all delay days.
Although the language of jury instruction 16 was misleading, Lake Hills fails to
show prejudice.66
64 Anfinson, 174 Wn.2d at 860.
65 Appellant’s Br. at 32.
66 Lake Hills argues it was prejudiced because jury instruction 16 “imposed
an unfair double standard favoring AP” by using “solely” when jury instruction 9 did
not. Appellant’s Br. at 33. The argument is not compelling. Lake Hills fails to
show how this confused the jury or how it was prejudiced. Lake Hills also
contends a question asked by the jury during deliberations reflected confusion with
the instruction, but the actual confusion stemmed from a scrivener’s error in the
special jury verdict form, which the court remedied.
20
No. 79116-8-I/21
C. Jury Instruction 15
Lake Hills’ third claim alleged AP breached when it stopped working on the
project in late 2015. AP requested jury instruction 15 to argue any breach from
quitting was excused by Lake Hills’ prior breach from nonpayment. Jury
instruction 15 states:
If one party enters into a contract with another, there is an
implied agreement by each to do nothing that will hinder, prevent, or
interfere with the performance of the contract terms by the other.
If AP proves by a preponderance of the evidence that Lake
Hills interfered with or prevented AP from completing its work in its
entirety within the time required and/or completing the project in its
entirety, then AP was excused from performing its duty of the
same.[67]
The jury found AP did not breach by quitting the project.
Lake Hills argues jury instruction 15 improperly excused AP’s performance
due to a nonmaterial breach of the duties of good faith and fair dealing.
All parties to a contract have implied duties of good faith and fair dealing. 68
A party who breaches this duty by hindering or interfering such that the other party
could not perform its obligations “‘cannot take advantage of the failure.’”69 “‘If a
promisor prevents or hinders the occurrence of a condition, or the performance of
a return promise, and the condition would have occurred or the performance of the
67 CP at 356.
68
City of Woodinville v. Northshore United Church of Christ, 166 Wn.2d
633, 647, 211 P.3d 406 (2009).
69
Highlands Plaza, Inc. v. Viking Inv. Corp., 72 Wn.2d 865, 876, 435 P.2d
669 (1967) (quoting 5 WALTER H.E. JAEGER, WILLISTON ON CONTRACTS § 677 (3rd
ed. 1957)).
21
No. 79116-8-I/22
return promise been rendered except for such prevention or hindrance, the
condition is excused.’”70
A nonmaterial or cured breach will not excuse a party’s failure to perform.71
Accordingly, only a material breach of the duties of good faith and fair dealing
excuses the other party’s performance.72
AP argues that the instruction was “taken nearly verbatim from” Washington
pattern jury instruction (WPI) 302.08 and accurately states the law.73 But “‘[t]he
70 Id. at 877 (quoting RESTATEMENT OF CONTRACTS § 295 (AM. LAW INST.
1932)).
71 See Cartozian & Sons, Inc. v. Ostruske-Murphy, Inc., 64 Wn.2d 1, 5-6,
390 P.2d 548 (1964) (“While any breach will give rise to cause of action for
damages, a breach does not become cause for repudiation until it is, under all of
the circumstances surrounding the contract, so material as to amount to a
substantial or total failure of consideration.”) (citing 6 CORBIN, CONTRACTS, § 1253
at 13 (1951) (replaced by 10 JOHN E. MURRAY, JR., CORBIN ON CONTRACTS § 53.12
(rev. ed. 2014)); DC Farms, LLC v. Conagra Foods Lamb Weston, Inc., 179 Wn.
App. 205, 220, 317 P.3d 543 (2014) (“Only a breach or nonperformance of a
promise by one party to a bilateral contract so material as to justify a refusal of the
other party to perform a contractual duty, discharges that duty.”) (citing Jacks v.
Blazer, 39 Wn.2d 277, 285-86, 235 P.2d 187 (1951)).
72 See Northshore United Church of Christ, 166 Wn.2d at 647 (noting
material breach excuses performance and explaining a city’s material breach of
the duty of good faith excused performance); see also RESTATEMENT (SECOND) OF
CONTRACTS § 237 cmt. b (“[W]here performances are to be exchanged under an
exchange of promises, each party is entitled to the assurance that he will not be
called upon to perform his remaining duties of performance with respect to the
expected exchange if there has already been an uncured material failure of
performance by the other party. . . . In determining whether there has been a
failure of performance, the terms of the agreement and supplementary rules such
as . . . the duty of good faith and fair dealing (§ 205) should be considered.”);
RESTATEMENT (SECOND) OF CONTRACTS § 245 (“Where a party’s breach by non-
performance contributes materially to the non-occurrence of a condition of one of
his duties, the non-occurrence is excused.”).
73Resp’t’s Br. at 27 (citing 6A WASHINGTON PRACTICE: W ASHINGTON PATTERN
JURY INSTRUCTIONS: CIVIL 302.08, at 226 (7th ed. 2019)).
22
No. 79116-8-I/23
pattern [jury] instructions are not authoritative primary sources of the law.’”74 And
the comment to WPI 302.08 expressly recognizes that a party should be excused
only where the breach is material and contributes to the other party’s
nonperformance.75 The jury should have been instructed that only a material
breach of the duty of good faith and fair dealing by Lake Hills could excuse
performance by AP.
We presume prejudice from a misstatement of the law, but this presumption
can be overcome on a showing that the error was harmless.76 Under the very
particular facts presented here, Lake Hills was not prejudiced.
AP’s sole theory of excuse was that Lake Hills engaged in massive
underpayments and intentionally “starved AP of resources” to make it quit. 77 AP’s
closely related counterclaim alleged Lake Hills breached the contract by failing to
pay it $5,339,356, which “devastated th[e] project” and caused a “subcontractor
Univ. of Washington v. Gov’t Emps. Ins. Co., 200 Wn. App. 455, 475, 404
74
P.3d 559 (2017) (second alteration in original) (quoting 6 W ASHINGTON PRACTICE:
WASHINGTON PATTERN JURY INSTRUCTIONS: CIVIL 0.10, at 3 (6th ed. 2012)).
7525 DAVID K. DEW OLF, KELLER W. ALLEN, & DARLENE BARRIER CARUSO,
WASHINGTON PRACTICE: CONTRACT LAW AND PRACTICE § 18:302.08, at 605 (3d ed.
2014) (citing Puget Sound Corp. v. Bush, 45 Wn. App. 312, 724 P.2d 1127 (1986);
RESTATEMENT (SECOND) OF CONTRACTS § 245 cmt. b).
76 Paetsch, 182 Wn.2d at 849 (citing Griffin, 143 Wn.2d at 91-92).
77 RP (Aug. 16, 2018) at 4982.
23
No. 79116-8-I/24
revolt.”78 The jury found for AP and awarded it $5,136,213.53. The jury’s finding
on AP’s counterclaim was consistent with a finding of material breach.79
Lake Hills argues the jury could have believed AP’s argument that Lake
Hills’ bad faith payment practices breached the contract, excusing AP’s
performance although its conduct was not a material breach. But the sole theory
of excuse before the jury was based upon massive underpayment by Lake Hills
that devastated AP’s ability to continue working, the very essence of a material
breach.80 On the particular facts and arguments before the jury, if the jury
accepted AP’s theory of excuse, it necessarily was based upon a material breach
by Lake Hills. The absence of the word “material” in jury instruction 15 was
harmless.
D. Lake Hills’ Rejected Waiver Instruction
Lake Hills argues the court abused its discretion by refusing its proposed
instruction on excuse and waiver. Lake Hills’ proposed instruction stated:
A plaintiff may not recover for breach of contract if the
defendant’s breach was the result of a prior material breach by [the]
plaintiff. Thus, even if a defendant materially breached the contract,
the plaintiff cannot recover for that breach if the plaintiff material[ly]
breached the contract first. In other words, a prior material breach
78 RP (Aug. 16, 2018) at 4955, 4956; CP at 346-47.
79 See 224 Westlake, LLC v. Engstrom Properties, LLC, 169 Wn. App. 700,
724, 281 P.3d 693 (2012) (“‘[A] material breach is one ‘serious enough to justify
the other party in abandoning the contract . . . one that substantially defeats the
purpose of the contract.’”) (second alteration in original) (quoting Park Ave. Condo.
Owners Ass’n v. Buchan Devs., LLC, 117 Wn. App. 369, 383, 71 P.3d 692 (2003))
80See DC Farms, 179 Wn. App. at 220 (material breach “‘goes to the root
or essence of the contract’”) (quoting 15 RICHARD A. LORD & SAMUEL WILLISTON, A
TREATISE ON THE LAW OF CONTRACTS § 44:55, at 231-32 (4th ed. 2000)).
24
No. 79116-8-I/25
excuses the defendant’s subsequent material breach (i.e. excuses
the defendant’s continued performance of its obligations under the
contract).
However, a defendant cannot rely on a plaintiff’s prior material
breach to excuse its subsequent breach if the defendant continued to
perform under the contract despite its knowledge of the plaintiff’s
earlier material breach.[81]
Even assuming the instruction is legally accurate, Lake Hills fails to show
the trial court abused its discretion by declining to give it. Lake Hills contends it
was prejudiced on its delay claim because the absence of the instruction “allow[ed]
the jury to excuse all of AP’s breaches after July 25, 2014, the date on which the
jury found that Lake Hills breached the contract . . . including 108 days of delay AP
admitted it caused.”82 The record does not support Lake Hills’ argument. The jury
did not excuse the 108 delay days AP admitted it caused. Questions 8 through 13
of the special jury verdict form reveal the jury found AP liable for the 108 delay
days its scheduling expert testified were caused by AP or its agents.83 As
discussed, the jury’s findings about delay days almost exactly matched the
apportionment testified to by AP’s scheduling expert, and the expert’s
apportionment did not rely upon payment issues from pay applications to excuse
those delays. For example, the scheduling expert excused AP from 197 delay
81 CP at 3719.
82 Appellant’s Reply Br. at 16.
83
CP at 372 (jury excusing AP from 313 of 355 delay days on phase 3 and
from 410 of 476 delay days on phase 5A, totaling 108 nonexcused delay days);
Ex. 2882, at 2-3 (scheduling expert identifying 42 nonexcusable days from phase
3 and 66 nonexcusable delay days from phase 5A).
25
No. 79116-8-I/26
days from phase 5A, the tower/bridge construction, because Lake Hills did not
obtain a permit following a redesign. Lake Hills fails to show it was prejudiced.
Lake Hills also contends the absence of the instruction prejudiced its third
claim because AP could use Lake Hills’ material breaches for nonpayment from
June of 2014 to argue it was excused from performing when it quit in late 2015.
But Lake Hills’ underpayments of AP were ongoing well past June of 2014. AP
quit the project in November of 2015 because Lake Hills underpaid by
$630,255.94 on AP’s most recent pay applications.84 Because the evidence
presented let the jury excuse AP from quitting regardless of underpayments from
2014, Lake Hills fails to demonstrate prejudice. On this record, Lake Hills fails to
show the court abused its discretion by refusing its instruction.85
II. Comment on the Evidence
As a threshold matter, AP contends Lake Hills waived this issue by not
objecting at trial to the judge’s allegedly improper comments. Because a comment
on the evidence violates a constitutional prohibition, it may be raised for the first
time on appeal.86
84
Ex. 1014. Notably, the jury found Lake Hills underpaid AP by $2,186,648
on phase 5B of the project, which was under construction when AP quit. CP at
379.
85Because Lake Hills fails to demonstrate prejudice from the absence of
“material” in jury instruction 15 or the absence of its proposed instruction, the
absence of the two could not combine to prejudice Lake Hills, contrary to its
contention.
86
State v. Lampshire, 74 Wn.2d 888, 893, 447 P.2d 727 (1968); see
Egede-Nissen v. Crystal Mountain, Inc., 93 Wn.2d 127, 141, 606 P.2d 1214 (1980)
26
No. 79116-8-I/27
Lake Hills argues the judge commented on the evidence in two ways. First,
it argues the judge commented on the evidence by clarifying a key witness’s
testimony to the jury. Second, it argues the court’s conduct amounted to a
comment on that witness’s credibility.
Article IV, section 16 of the Washington Constitution prohibits a trial judge
from commenting on evidence.87 “‘The purpose of article IV, section 16 is to
prevent the jury from being influenced by knowledge conveyed to it by the court as
to the court's opinion of the evidence submitted.”88 A judge impermissibly
comments upon a witness’s testimony or credibility when the jury is able to infer
“‘from what the court said or did not say that [the judge] personally believed or
disbelieved the testimony in question.’”89
Lake Hills contends the “trial court’s most egregious intervention” was a
clarification the court made during cross-examination of Lake Hills’ witness Oscar
Del Moro.90 Del Moro oversaw the Lake Hills Village project on behalf of its owner,
including negotiating the construction contract with AP. He testified longer than
any other witness, almost seven days.
(citing RAP 2.5(a)(3) (discussing timeliness of objections to judicial comments on
evidence and noting manifest constitutional error may be raised at any time)).
87
Risley v. Moberg, 69 Wn.2d 560, 563, 419 P.2d 151 (1966) (quoting
WASH. CONST. art. IV, § 16).
88Hill v. Cox, 110 Wn. App. 394, 408, 41 P.3d 495 (2002) (quoting State v.
Elmore, 139 Wn.2d 250, 275, 985 P.2d 289 (1999)).
89
Egede-Nissen, 93 Wn.2d at 139 (quoting State v. Browder, 61 Wn.2d
300, 302, 378 P.2d 295 (1963)).
90 Appellant’s Reply Br. at 18.
27
No. 79116-8-I/28
During direct examination, Del Moro testified that costs, not cracking
concerns, influenced AP’s request to use welded wire mesh rather than rebar to
reinforce the concrete topping slab. On cross-examination, AP played an audio
recording of a meeting Del Moro had with AP’s employees to discuss construction
schedules and designs, including the topping slab. They did not discuss cost
savings. After playing the recording, the following exchange occurred:
Q: Mr. Del Moro, having listened to that recording and
reviewing it on paper, there is absolutely zero discussion
of cost savings regarding the substitution request, is
there?
A: That is correct. And I clarified that to you in my
deposition earlier.
COURT: Okay. “That is absolutely correct” is what the
jury will consider.[91]
This exchange occurred after there had been a series of rulings by the court on
Del Moro’s responsiveness to particular questions.
In the context of the recording and the questions, no reasonable juror could
have inferred any comment on the truth of the evidence from the judge adding the
word “absolutely.” The recording effectively impeached Del Moro, and the court’s
comment clarified the relevant portion of his response to AP’s question. Contrary
to Lake Hills’ view of the exchange, the court did not “instruct[ ] the jury that it must
accept as ‘absolutely correct’ Del Moro’s testimony as characterized by AP.” 92
Although the judge added “absolutely,” the extra word merely affirmed the relevant
91 RP (July 9, 2018) at 1166.
92 Appellant’s Br. at 44.
28
No. 79116-8-I/29
portion of Del Moro’s response to the specific question. The court’s clarification
was not a comment on the evidence.
Lake Hills also argues the court’s conduct during AP’s cross-examination of
Del Moro amounted to a comment on his credibility, requiring reversal and remand
to a different judge.
A trial judge has wide discretion in managing the courtroom.93 A judge also
has discretion to interrogate witnesses, interject to prevent undue repetition of
testimony, or ask a witness to clarify.94 But “[a] trial judge should not enter into the
fray of combat nor assume the role of counsel.”95 An “isolated instance,”
especially if invited and limited under the circumstances, is likely harmless error
and curable by an instruction, but “the cumulative effect of repeated interjections
by the court may constitute reversible error.”96
AP argues the court was merely exercising its considerable discretion to
manage the trial and “rein in an uncooperative witness.”97 The record supports
AP. By the time AP began cross-examination, Del Moro had testified for six days
93In re Marriage of Zigler & Sidwell, 154 Wn. App. 803, 815, 226 P.3d 202
(2010) (citing State v. Johnson, 77 Wn.2d 423, 426, 462 P.2d 933 (1969)).
94 United States v. Morgan, 376 F.3d 1002, 1008 (9th Cir. 2004) (quoting
United States v. Mostella, 802 F.2d 358, 361 (9th Cir. 1986)); In re Welfare of
Burtts, 12 Wn. App. 564, 577, 530 P.2d 709 (1975) (quoting Dennis v. McArthur,
23 Wn.2d 33, 38, 158 P.2d 644 (1945)); ER 614(b).
95Egede-Nissen, 93 Wn.2d at 141 (internal quotation marks omitted) (citing
Notes, Judicial Intervention in Trials, WASH. U.L.Q. 843 (1973)).
96 Id.
97 Resp’t’s Br. at 36.
29
No. 79116-8-I/30
and had been admonished repeatedly for speculating, testifying to hearsay, being
nonresponsive, and giving narrative responses. At one point, the judge sua
sponte stopped Del Moro’s lengthy response because he was testifying to hearsay
and, when he immediately began giving hearsay testimony again, she said he was
“invading” her ruling and told him to “say what you did once you had the
conversation, not what they told you.”98 Later, the judge again interrupted Del
Moro sua sponte when he began testifying to hearsay and admonished him to
“[w]atch your phrasing” and not testify to “what other people said to you.”99 Del
Moro’s own answers invited judicial intervention to prevent the jury from hearing
inadmissible evidence.
Lake Hills contends the court commented on the evidence because it
“repeatedly admonished Del Moro that he must answer only ‘yes’ or ‘no’ despite
his protests the questions could not be answered so simply.”100 Lake Hills cites to
an exchange to illustrate its point but, considered in context, the court was merely
ensuring Del Moro answered simple questions asked by AP’s counsel:
Q: [W]hen you initially filed the complaint, it was about a 2.7
million dollar claim; is that right?
A: I would have to look at it, but I think it’s about right.
Q: Now it’s a 7.6 million dollar claim, correct?
A: That was a couple of years before we knew the entire
scope of what was needed.
98 RP (July 5, 2018) at 877.
99 Id. at 881.
100 Appellant’s Br. at 45.
30
No. 79116-8-I/31
Q: Can you answer ‘yes’ or ‘no,’ sir?
A: I need to qualify what you’re asking.
COURT: No, don’t make me direct you to answer his
question.
A: There were two different scopes between the proposal
and the current proposal as to what is needed to repair.
COURT: The question is, has the amount of the claim
increased from about two million to over seven
million[?]
A: The amount of the claim has increased by a certain
amount based on the different scopes.[101]
Del Moro’s refusal to answer simple questions prompted the court’s interventions.
A review of the record shows the court’s numerous interjections were usually
prompted by Del Moro’s responses and remained within its discretion.102 Lake
Hills fails to show the court’s interjections conveyed any personal belief or disbelief
in Del Moro’s testimony. The judge did not comment on the evidence by
attempting to rein in a difficult witness who invited judicial intervention by
introducing inappropriate evidence and wasting time with nonresponsive answers.
Because Lake Hills’ request for retrial before a different judge is tied to its
contention the judge impermissibly commented on the evidence, it fails to show a
compelling need.
101 RP (July 9, 2018) at 1141-42.
Zigler & Sidwell, 154 Wn. App. at 815 (“We . . . review a trial judge’s
102
courtroom management decisions for abuse of discretion.”).
31
No. 79116-8-I/32
III. Evidentiary Rulings
Lake Hills argues it was prejudiced by the court’s decision to admit
impeachment evidence about its owner. AP argues it was prejudiced by the trial
court’s refusal to admit statements Lake Hills made to its lender.
We review a court’s decision to admit or exclude evidence for abuse of
discretion.103 A decision is outside the court’s discretion where it rests on
untenable legal or factual grounds.104 Even if a court erred by admitting improper
evidence, a harmless error does not require reversal.105 An error is harmless
“unless it was reasonably probable that it changed the outcome of the trial.”106
Lake Hills argues it was prejudiced when the court let AP question Lake
Hills’ owner about her litigation history with other contractors, portraying it as
litigious and likely to fight over money. Assuming the court erred by admitting
evidence of its owner’s litigation history, Lake Hills fails to show it was harmed. A
full review of the record shows the court admitted unchallenged evidence of Lake
Hills’ contentious approach to business. For example, Lake Hills’ owner testified
103Saldivar v. Momah, 145 Wn. App. 365, 394, 186 P.3d 1117 (2008)
(citing Hoglund v. Meeks, 139 Wn. App. 854, 875, 170 P.3d 37 (2007)).
104
Leren, 9 Wn. App. 2d at 75 (citing Hizey v. Carpenter, 119 Wn.2d 251,
268, 830 P.2d 646 (1992)).
105 Brundridge v. Fluor Fed. Servs., Inc., 164 Wn.2d 432, 452, 191 P.3d 879
(2008).
106 Id. (citing State v. Bourgeois, 133 Wn.2d 389, 403, 945 P.2d 1120
(1997)).
32
No. 79116-8-I/33
several times about her conflicts with AP over money.107 A letter written just a few
months into the project in 2013 showed Lake Hills was already unilaterally making
significant reductions in its payments to AP, and AP was protesting the cuts. Jim
McPhetridge, AP’s senior project manager who had worked with Lake Hills’ owner
on other projects, testified Lake Hills’ billing procedures “caused a lot of
contention.”108 Rod Robertson, AP’s second project manager at Lake Hills Village,
testified that Del Moro advised him to “finish the job and then sue the shit out of
[Lake Hills]” when they spoke about Lake Hills’ late progress payments to AP.109
Even if the court had refused to let AP ask about Lake Hills’ owner’s litigiousness,
which was merely a few questions to a single witness in a two-month trial, other
unchallenged evidence portrayed Lake Hills as litigious and inclined to battle over
money. Lake Hills fails to show those few questions, within a reasonable
probability, changed the outcome of the trial.
In its cross appeal, AP contends the court abused its discretion by refusing
to admit relevant evidence of certifications Lake Hills made to its lender regarding
the quality and progress of construction work on the project when requesting
draws. Lake Hills fails to identify an issue warranting affirmative relief when
considerable evidence was admitted regarding the certifications made by Lake
107
E.g., RP (July 18, 2018) at 2039 (testifying about a dispute from July
2015 between Lake Hills and AP over retainage fees).
108 RP (Aug. 2, 2018) at 3071.
109 RP (Aug. 8, 2018) at 3739.
33
No. 79116-8-I/34
Hills to its lender.110 Rather than address on appeal whether additional evidence
on certifications could have also been admitted at trial, we conclude the court
should make its relevancy decisions in the context of the retrial as it unfolds.111
We decline to offer abstract and speculative guidance in this setting.
IV. Attorney Fees
Lake Hills asks that this court vacate the trial court’s award of fees and
remand with instructions about how to evaluate attorney fees. It contends the
court erred by awarding certain expert witness fees, by declining to apply the
proportionality approach from Marassai v. Lau,112 by awarding costs and fees
under CR 68, and by how it calculated the amounts awarded. Because we are
reversing and remanding for a new trial, we vacate the trial court’s awards of costs
and attorney fees. We decline to reach these issues that may or may not be at
issue at the conclusion of a retrial.
Both parties request an award of attorney fees on appeal under their
contract, RCW 60.04.021, and RAP 18.1(a). The contract authorizes an award to
the prevailing party of “all of its attorney fees . . . including costs on appeal” in the
event of a breach.113 RCW 60.04.021 authorizes an award of attorney fees and
110See RP (July 19, 2018) at 2146-52 (admitting two certifications Lake
Hills made to its lender and questioning Lake Hills’ owner about them); RP (Aug.
16, 2018) at 4954 (AP quoting the certification language in closing argument).
111 ER 401; ER 403.
112
71 Wn. App. 912, 859 P.2d 605 (1993), abrogated on other grounds by
Wachovia SBA Lending, Inc. v. Kraft, 165 Wn.2d 481, 200 P.3d 683 (2009).
113 Ex. 1 at LH00027155.
34
No. 79116-8-I/35
expenses to the prevailing party. Because retrial is required, no party is yet the
prevailing party for all attorney fees.114 Thus, pursuant to RAP 18.1(i), we defer to
the trial court to determine the ultimate prevailing party or the appropriate
proportional amount of attorney fees at the conclusion of the retrial, including any
fees incurred on this appeal.
We reverse and remand for a new trial.
WE CONCUR:
114 See Felipe v. Dep’t of Labor & Indus., 195 Wn. App. 908, 920, 381 P.3d
205 (2016) (“When an appellate court remands a case for retrial, as we do here,
that court cannot properly award fees because the prevailing party has not yet
been determined.”) (citing Clark County v. McManus, 188 Wn. App. 228, 245, 354
P.3d 868 (2015), rev’d on other grounds, 185 Wn.2d 466, 372 P.3d 764 (2016)).
35
Lake Hills Investments Llc, App/cross-res. v. Ap Rushforth Constr. Co., Inc., Res/cross-app.
Combined Opinion