Court of Appeals Division I
State of Washington

Opinion Information Sheet

			

     IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

 LAWLESS CONSTRUCTION 
 CORPORATION, a Washington                        )         No. 66762-9-I
 corporation,
                                                  )         DIVISION ONE
                       Appellant,
                                                  )         UNPUBLISHED OPINION
                v.
                                                  )
 TUYEN DINH NGUYEN and MAI TUYET 
 VAN, residents of King County,                   )
 Washington,
                                                  )
                       Respondents.                         FILED: May 14, 2012
                                                  )

                                                  )

                                                  )

                                                  )

                                                  )

                                                  )

                                                  )

                                                  )

       Appelwick, J.  --  After Lawless Construction Corporation rested at trial, the trial 

court dismissed its claims for breach of contract, promissory estoppel, and lien 

foreclosure. It awarded the Nguyens $82,740 in attorney fees, even though the amount 

in controversy was less than $10,000.  We affirm the dismissal.  However, the trial 

court did not enter adequate findings to enable appellate review of its fee award.  We 

vacate the attorney fee award and remand for the trial court to enter appropriate 

findings in support of any attorney fee award. 

No. 66762-9-I/2

                                            FACTS

       Tuyen Nguyen and Mai Van (the "Nguyens") sued their homebuilder for 

construction defects.  Then, the Nguyens brought a legal malpractice claim against the 

attorneys that represented them in that case.  On September 25, 2008, Mark Lawless, 

the vice president of Lawless Construction Corporation (LCC), testified for the defense 

in the malpractice case.  

       After inspecting the Nguyens' home, Lawless testified that he would charge 

$26,200 plus tax to repair the Nguyens' floor and front door.  The Nguyens' attorney, C. 

Nelson Berry, III, attempted to bind Lawless to that claim: "You are under oath.  Would 

you do this work today for this price?" Lawless responded that he had "already 

contacted somebody who's prepared to start" for "[t]his price, this work."  

       Later, Berry tried to get Lawless to sign a contract:

       I am drafting an agreement here.  It says, "I agree to repair the marble 
       floor and the front door of the Nguyen home, particularly described in my 
       trial testimony in King County Cause No. 07-2-04479-5 SEA, for $22,500, 
       plus $3,700, plus Washington State sales tax.  If Tuyen Nguyen and Mai 
       Van are compelled to sue me to enforce this contract, I agree to pay their 
       reasonable attorney fees and costs for doing so.  Work to be commenced 
       within 30 days of my signing this agreement."  

       Are you prepared to sign this agreement?

Lawless responded that he would perform the work "[u]nder my contract, yes; not that 

one."  Ultimately, Lawless stated, "I will commit to what I discussed here today using my 

contract terms and I will reiterate that one more time."  They did not discuss the terms 

of Lawless's contract.

       Over the next several months, Berry and Lawless attempted to negotiate 

acceptable contract terms.  On October 10, Berry sent a letter to Lawless memorializing 

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No. 66762-9-I/3

a conversation in which Lawless agreed to provide a proposed contract within 30 days.  

On October 15, Lawless responded and pointed out an omission in Berry's letter.  

Specifically, that Berry neglected to mention that they had discussed a "special contract 

that will be required due to the nature of [the Nguyens]."  Lawless reiterated that he 

said at trial that he would perform the work under his own conditions, instructed Berry 

to provide a $5,000 deposit so an attorney could begin drafting a contract, and stated 

that all payments must be made in advance.  Lawless also raised other conditions, 

including that the contract include an indemnity provision, that the Nguyens provide an 

interpreter, and that the Nguyens vacate the premises during construction.  

       Two days later, on October 17, Berry responded that the Nguyens did not agree 

to the "new term" that they deposit $5,000 to have an attorney draft a contract.  At the 

end of the letter, Berry threatened that "if we do not receive your contract within 30 

days of our conversation of October 10, 2008, to do this work in the manner and at the 

price to which you testified, my clients have instructed me to pursue their legal 

remedies against you."  

       On October 20, Lawless wrote that "[y]our current threat only confirms my 

suspicion about the nature of your clients and makes the terms of any contract that we 

engage in that much more important.  I discussed this with you on October 10, 2008, 

but you seem unwilling to address any prerequisite."  Lawless confirmed that he was 

ready to perform the work under the terms expressed at trial, but that using his own 

contract terms was part of the agreement.  Lawless did not understand how Berry could 

express disbelief about new terms, when they had never discussed specific terms.  

       On November 3, Berry wrote to Lawless that the Nguyens agreed to some of 

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No. 66762-9-I/4

Lawless's minor terms, such as providing an interpreter and vacating the premises.  

Berry proposed that the Nguyens pay in full by placing funds in escrow to be withdrawn 

as the work progressed, but reiterated that they would not provide a $5,000 deposit for 

Lawless to draft a contract.  Berry closed the letter by threatening to pursue legal 

remedies if Lawless did not provide a contract within 30 days of the October 10 

conversation.  

       Lawless replied on November 5, and            again demanded $5,000 to draft the 

contract.  He stated that Berry's proposal to place the funds in escrow was 

unacceptable.  Lawless also stated there would be a $1,500 charge to meet with the 

Nguyens and pick their tile.  Lawless expressed disappointment that Berry continued to 

make legal threats despite the fact that negotiations were progressing and none of 

Lawless's specific contract terms were discussed at trial.  

       On November 7, Berry responded  that the Nguyens agreed to Lawless's 

indemnity term and agreed to provide a cashier's check upon execution of the contract.  

Rather than meet to discuss the tile, Berry instructed Lawless to include in the contract 

that he would install the same or similar tile to what was already in the home.  His 

clients again refused to pay $5,000 for the contract, and he closed the letter with a 

legal threat.  

       Lawless responded the same day, asserting that they appeared to have an 

agreement.  But, he explained that the 30 day deadline could not be met because it had 

taken so long to agree on terms.  Lawless informed Berry, "[S]hould your clients not 

execute the [contract] as we have agreed, LCC reserves its right to claim for lost profit 

and administrative fees in negotiating the terms of the contract.  The administrative 

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No. 66762-9-I/5

fees now approach $2,500 and will increase as we have the attorney draft the 

language."  

       Berry confirmed receipt of Lawless's letter and asked for a price break down for 

different portions of the work.  On December 17, Lawless sent Berry a contract.  The 

contract included terms that the parties had not discussed, such as a requirement that 

the Nguyens purchase a $250,000 insurance policy for the benefit of LCC.  Berry wrote 

to Lawless on December 22 that he passed the contract on to his clients, and reiterated 

that he would like a price breakdown.  Lawless responded on December 24 that the 

trial testimony had a sufficient price breakdown, and that the Nguyens did not need to 

know LCC's profit margin.  

       On February 7, 2009, Lawless sent a letter to Berry inquiring about the status of 

the contract.  Lawless stated that, as the contract provided, he had a crew ready to 

begin work on February 15.  He was concerned because he could not order the tile 

until he received a signed contract.  On February 18, Lawless sent another letter 

indicating the start date had come and gone and his scheduled crew had nothing to do.  

He informed Berry that the Nguyens had not lived up to the bargain they agreed to and 

that if he did not hear from Berry by February 28 he would be record a lien on the 

Nguyens' property.  Lawless offered to walk away from the agreement for $3,500, the 

expenses he claimed he had incurred to that date.  The Nguyens apparently decided to 

use hardwood floors instead of tile and chose another contractor, but did not 

communicate that decision to Lawless.  

       On March 13, LCC recorded a lien on the Nguyens' property for $3,500.  It listed 

that performance began September 26,             and   the last date of performance was 

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No. 66762-9-I/6

December 19, 2008.  Lawless believed that he had provided $3,500 in professional 

services, including the costs of his attorney to review the contract and his own 

preparation of the plans and specifications.  

       LCC sued for breach of contract and to foreclose the lien.  In addition to the 

$3,500 lien, it sought to recover $6,000 in anticipated profits.  Eventually, LCC filed an 
amended complaint, adding a promissory estoppel claim.1  

       After LCC rested at trial, the trial court granted the Nguyens' CR 41(b)(3) motion 

to dismiss.  It determined that there was no contract, that there was no meeting of the 

minds on essential terms, that the Nguyens did not make a legally binding promise, and 

that the lien was frivolous.  The court awarded the Nguyens costs and fees.  LCC 

appeals.

                                        DISCUSSION

       The Nguyens argue that LCC failed to include verbatim the challenged findings 

of fact as required by RAP 10.4(c), and that the LCC did not properly assign error to 

conclusions of law.  They argue that we must treat the findings as verities on appeal, 

and treat the conclusions of law as the law of the case.  But, we may waive compliance 

with RAP 10.4(c) in order to serve justice.  RAP 1.2(c); In re Marriage of Zeigler, 69 

Wn. App. 602, 606, 849 P.2d 695 (1993).  And, there is no appellate rule that requires 

an appellant to formally assign error to specific conclusions of law.  Here,  LCC 

challenged findings by number, and argued at length regarding challenged findings and 

conclusions.  The Nguyens suffered no prejudice, and even articulated in their

       1  LCC argues it asserted both equitable estoppel and promissory estoppel.  The 
amended complaint only mentions promissory estoppel.  But, LCC also argued 
equitable estoppel in its briefing below.

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No. 66762-9-I/7

response which findings LCC was challenging.  We will proceed on the merits.

   I.  Dismissal

       The trial court may grant a motion to dismiss at the close of the plaintiff's case, 

either as a matter of law or as a matter of fact, when there is no evidence, or 

reasonable inferences therefrom, that would support a verdict for the plaintiff.  

Commonwealth Real Estate Servs. v. Padilla, 149 Wn. App. 757, 762, 205 P.3d 937 

(2009).  When the trial court acts as a fact finder, as it did here, appellate review is 

limited to whether substantial evidence supports the trial court's findings and whether 

the findings support its conclusions of law.  Id.

       LCC argues that the evidence does not support the trial court's findings.               It 

argues that the trial court erred by concluding that there was no meeting of the minds 

on the essential terms necessary to form a contract, that the Nguyens did not make a 

legally binding promise that LCC could justifiably rely upon, and that the lien was 

invalid.  

       First, LCC argues that there is not substantial evidence to support the trial 

court's findings and conclusions that there was no meeting of the minds on the 

essential terms necessary to form a contract.  While Lawless was under oath, he 

agreed to price and performance.  But, it is clear from the lengthy negotiation period 

that followed that the parties had not agreed on all of the terms Lawless deemed 

essential.  Lawless repeatedly asserted that he needed special protections due to the 

Nguyens' litigious nature.  After the Nguyens consented to some of Lawless's requests, 

Lawless sent the Nguyens a contract.  That contract, however, contained terms that the 

parties had not discussed.  The Nguyens decided not to sign.  The trial court's finding 

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No. 66762-9-I/8

that the parties did not reach a meeting of the minds is supported by substantial 

evidence.

       Next, LCC argues that the Nguyens should have been estopped from denying 

the existence of the contract.  It argues that where the Nguyens attempted to bind 

Lawless to a contract under oath, threatened to sue if he did not perform, and indicated 

they wanted to start within 30 days of signing a contract, that it was reasonable to begin 

drafting plans and specifications and making arrangements with subcontractors.  But, 

the parties explicitly did not     agree on material terms.  As demonstrated by the 

negotiation period that followed Lawless's testimony, their agreement was a 

quintessential agreement to agree.  During the negotiation process, Lawless and the 

Nguyens disagreed about numerous contract terms.  LCC could not have, during that 

time period, justifiably considered the contract to be a done deal.  And, when the 

negotiation process was nearing an end, Lawless sent the Nguyens a contract that 

contained terms that had not been discussed.  The Nguyens never agreed to the new 

terms contained in the written contract.  Rather, Berry indicated that he sent the 

contract to the Nguyens for review, and that the Nguyens still wanted a more detailed 

price breakdown.  There was substantial evidence to support the trial court's findings 

that the LCC did not justifiably provide professional services.          That finding, in turn, 

supports the trial court's conclusion that the Nguyens did not make a binding promise 

and that LCC's estoppel claims should be dismissed.

       Finally, LCC challenges a series of findings that are relevant for purposes of 

determining whether the lien was invalid or frivolous.  Under RCW 60.04.021, a lien is 

authorized "for the contract price of labor, professional services, materials, or 

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No. 66762-9-I/9

equipment furnished at the instance of the owner" when there is an improvement of real 

property.  The statute provides that professional services rendered in preparation for 

construction,  repair, or remodeling activities on real property are considered an 

improvement.  RCW 60.04.011(5).  But, the existence of a contract is essential to 

claiming a lien.  Colo. Structures, Inc. v. Blue Mountain Plaza, LLC, 159 Wn. App. 654, 

664, 246 P.3d 835 (2011).  

       Here, the trial court concluded, "In the absence of an enforceable contract or a 

legally binding promise to do work on the [Nguyens'] property, [LCC] was not entitled to 

assert a Claim of Lien, and [its] claim for lien foreclosure should be dismissed."  In its 

judgment, the trial court declared that the lien was invalid.  There is substantial 

evidence to support the trial court's findings and conclusions that there was no meeting 

of the minds     and that the Nguyens did not make a legally binding promise.  

Consequently, it was proper for the trial court to conclude that LCC was not entitled to 

record a lien on the Nguyens' property.

       Nevertheless, the parties expended a great deal of energy debating whether the 

trial court was entitled to further declare that the lien was frivolous.  LCC correctly

argues that a lien can be invalid without being frivolous.  W.R.P. Lake Union Ltd. P'ship 

v. Exterior Servs., Inc., 85 Wn. App. 744, 752, 934 P.2d 722 (1997).  But, LCC does not 

articulate what additional relief it would obtain if we declared that the trial court erred by 

concluding that the lien was frivolous.  RCW 60.04.081(4) provides that, if a lien is 

frivolous and made without reasonable cause, the court shall release the lien and 

award costs and fees against the claimant.  Here, in addition to determining that the 

lien was frivolous, the trial court properly determined that the lien was invalid.  The 

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No. 66762-9-I/10

Nguyens were awarded attorney fees pursuant to RCW 60.04.181(3), RCW 4.84.250, 

and RCW 4.84.330.  None of those statutes require that the lien be frivolous in order 

for attorney fees to be awarded.  RCW 4.84.250, .330; 60.04.181(3).  LCC does not 

argue that the Nguyens were not entitled to fees pursuant to those statutes.  Thus, the 

Nguyens obtained nothing additional from the determination that the lien was frivolous, 

and we need not consider the propriety of that conclusion.

II.    Attorney Fees Dispute

       After the Nguyens filed their motion to dismiss, they filed a motion for fees and 

costs.  LCC articulated numerous complaints about the Nguyens' request.  For 

instance, LCC argued that the hourly rates were too high, and that the requested award 

of over $80,000 was unreasonably high for a lawsuit where the amount in controversy 

was under $10,000.  

       In addition to general claims that the Nguyens requested an unreasonable 

amount, LCC argued there were problems with many specific charges.  It asserted that 

there were duplicative charges, charges for unrelated cases, and charges for motions 

and theories that the Nguyens did not prevail on.  

       LCC claimed that many more problems arose from Berry's role as trial counsel.  

During the pendency of its lawsuit, LCC identified Berry as a material witness.  

Nevertheless, Berry continued to represent the Nguyens.  Eventually, LCC filed a 

successful motion to disqualify him, and Berry was replaced by Guy Beckett.  LCC 

argued that it was unreasonable to award fees for all of Berry's work because he 

should have known he was a material witness in the case, and that the Nguyens were 

seeking significant fees incurred by Berry after he was identified as a material witness, 

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No. 66762-9-I/11

but before he was formally disqualified.  LCC also argued that there was unreasonable 

billing incurred for time that Berry spent getting Beckett up to speed on the case, and 

that Berry could have avoided that expense by realizing from the outset that he was a 

material witness.  Further, LCC argued that, in one instance, Berry and Beckett each 

charged for a deposition when Berry had already been disqualified and was not even 

taking the deposition.  

       Despite the extensive argument about the fees, the trial court signed the order 

prepared by the Nguyens that included only one finding on fees and costs:

       Applying the principles set forth in RPC 1.7, the attorney fees incurred by 
       the Defendants in the amount of $82,740 and costs and expenses in the 
       amount of $4,665.60 are reasonable and were necessarily incurred.

The amount of $82,740 is only $90 less than the Nguyens requested, apparently 

reflecting the fact that the Nguyens conceded in their reply that the original request 

contained $90 of duplicative billing.  

       On appeal, LCC argues that the fee award was grossly excessive and that the 

trial court did not enter sufficient findings to create an adequate record for appeal.  We 

note first that, while the size of an award in relation to the amount in controversy may 

be a relevant factor for the trial court to consider, that consideration is not dispositive.  

Mahler v Szucs, 135 Wn.2d 398, 433,  957 P.2d 632, 966 P.2d 305 (1998).  But, 

"[c]ourts must take an active role in assessing the reasonableness of fee awards, rather 

than treating cost decisions as a litigation afterthought.  Courts should not simply 

accept unquestioningly fee affidavits from counsel."  Id. at 434-35.          To establish an 

adequate record for appellate review of fee awards, the trial court must enter findings of 

fact and conclusions of law.  Id. at 435.

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No. 66762-9-I/12

       Here, despite detailed challenges to the fees claimed, the trial court signed the 

Nguyens' proposed findings of fact and conclusions of law, which contained only one 

finding regarding attorney fees.  It filled in a blank space for the amount of attorney 

fees.  It only deducted $90 from the requested amount, apparently recognizing the 

Nguyens' explicit concession that there was $90 of duplicative billing.  In light of the 

size of the fee award in comparison with the amount in controversy, and the number 

and nature of charges disputed, the trial court's solitary finding that the fees were 

reasonable and necessary is insufficient to create a record for appellate review.  We 

remand for the trial court to enter appropriate findings.

III.   Attorney Fees on Appeal

       The Nguyens request reasonable attorney fees and costs incurred for purposes 

of this appeal pursuant to RAP 18.1 and RCW 60.04.181(3), 4.84.250, and 4.84.330, 

the three bases under which the trial court awarded fees.  LCC does not contest the 

Nguyens' request.  Accordingly, we award the Nguyens reasonable fees and costs.  

WE CONCUR:

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