Court of Appeals Division I
State of Washington

Opinion Information Sheet

			

 IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

THOMAS ESPINOSA and KARI 
ESPINOSA, husband and wife,                      )         No. 65664-3-I
                                                 )
                      Respondents,               )         DIVISION ONE
                                                 )
              v.                                           UNPUBLISHED OPINION
                                                 )
PROJECT SERVICES CORP., a                        )
Washington corporation; and GREGORY              )
GLIEGE, a single man,
                                                 )
                      Appellants.                )         FILED: January 17, 2012

                                                 )

                                                 )
                                                 )

                                                 )

       Appelwick, J.  --  Project Services appeals the trial court's February 2010 

order affirming specific performance under a vacant land purchase and sale 

agreement, extending the closing date and granting the Espinosas attorney fees 

and costs.  It also argues the Espinosas were not the substantially prevailing 

party entitled to fees.  Gliege argues that even if the Espinosas were entitled to 

fees, they should have been awarded only against Project Services, not against 

him personally.  Because Gliege was not a party to the original contract, we hold  

No. 65664-3-I/2

that he is not personally liable for the judgment of attorney fees and costs.  We

affirm in part, reverse in part, and remand for correction of the judgment.

                                        FACTS

       The underlying facts of this case were set forth in an earlier appeal to this 

court.  Espinosa v. Project Servs. Corp., noted at 144 Wn. App. 1025, 2008 WL 

1934847, at *2 ("Espinosa I").  Thomas and Kari Espinosa entered into a vacant 

land purchase and sale agreement           (VLPSA or "the contract") with Project 

Services Corporation on March 15, 2006.  The VLPSA required Project Services 

to maintain the property in the condition it was in when the Espinosas first 

viewed it.  The VLPSA was originally set to close on May 3, 2006, but the closing 

date was extended to May 15, 2006 by agreement of the parties.  On May 12, 

2006, a fire occurred at the property when debris was brought from off-site and 

placed too close to a smoldering fire.  Gregory Gliege, the president of Project 

Services, extinguished the fire using heavy equipment to cover it with dirt, but 

resulting in some alteration to the property.  Based on their concerns following 

the fire, the Espinosas included a reservation of rights with the closing 

documents.  Espinosa I, 2008 WL 1934847, at *1-2.  Project Services refused to 

sign the reservation, and the transaction failed to close.  Id. at 2.  The Espinosas 

brought suit against Project Services on October 13, 2006, requesting specific 

performance of the VLPSA and alleging breach of contract, fraud, and 

misrepresentation.  Id.     The trial court granted partial summary judgment for 

Project Services and dismissed the Espinosas' claim for specific performance.  

Id. at 3.  But, in Espinosa I, this court reversed the trial court, holding that the 

                                           2 

No. 65664-3-I/3

Espinosas had established a prima facie case that the land was improperly 

altered by Gliege, and thus there was a question of material fact about which 

party breached the contract.  Id. at 4.

       On October 24, 2008, the Espinosas filed their first amended complaint 

adding Gliege as an additional defendant.          Project Services had transferred 

ownership of the property to Gliege after the closing date, and the Espinosas 

named him "so that the relief sought [could] be effectively obtained."              The 

Espinosas initially sought the remedy of specific performance and damages for 

breach of contract.  Project Services answered and submitted a counterclaim 

against the Espinosas for breach of contract and slander of title.  The Espinosas 

denied the counterclaim and requested rescission of the contract, or in the 
alternative, specific performance if possible.1  They also requested damages.  

       The Espinosas moved for summary judgment, arguing that Project 

Services' failure to maintain the property constituted a material breach of the 

contract.  Project Services opposed the motion.  The trial court granted the 

Espinosas' motion in part, finding that Project Services breached its obligations 

under the VLPSA.  The trial court also found the Espinosas were entitled to 

attorney fees and costs.  It reserved a determination of the amount of attorney 

fees and costs and reserved the issue of the appropriate remedy.  The trial court 

then bifurcated the trial, with a judge to make the initial decision on liability and 

       1 The Espinosas contend in their brief that they sought either specific 
performance or rescission beginning with their October 2008 first amended 
complaint.  Project Services disputes this, and it appears that the Espinosas did 
not request rescission until their June 19, 2009 answer to Project Services'
counterclaim.  
                                           3 

No. 65664-3-I/4

determine whether rescission or specific performance was appropriate, and a 

jury to determine damages.  

       Following a bench trial on liability, the trial court issued an oral ruling on 

September 3, 2009, finding that Project Services materially breached the 

contract and that the Espinosas were entitled to submit the reservation.  The trial 

court concluded that     the Espinosas were entitled to an award of specific 

performance, and set the closing date for December 31, 2009.  The damages 

phase of the trial was set for hearing on December 14, 2009.  At the hearing, the 

Espinosas stated that they would not present additional evidence on damages.  

Instead, they would rely on the evidence already submitted at the liability phase, 

would waive their jury trial and defer to the judge's determination.  On December 

28, 2009, the trial court heard argument on the damages claim and on the 

proposed findings of fact and conclusions of law.  The trial court announced its 

decision awarding no damages to the Espinosas, and entered findings of fact, 

conclusions of law, and final judgment that same day. That document confirmed 

the change of closing date to December 31, 2009, concluded that the Espinosas 

were the prevailing party following Project Services' breach, and concluded that 

they did not carry their burden on the matter of damages.  The trial court also 

awarded the Espinosas attorney fees and costs in the amount of $93,796.62, 

after reducing their fees by $7,500 for attorney fees for the damages portion of 

the case.  Both Project Services and Gliege were named as judgment debtors.

       On December 31, 2009, the closing date, the Espinosas' counsel sent an 

e-mail to Project Services' counsel stating that the Espinosas would not be 

                                           4 

No. 65664-3-I/5

closing on the property, and stating that they would release the earnest money 
to Project Services.2  The Espinosas later explained to the trial court that they 

were unable to close the sale due to difficulty in securing the necessary 

financing in light of the economic crisis and more restrictive banking regulations.  

       Project Services moved for reconsideration and amendment of the 

December  judgment on January 6, 2010 after the sale again failed to close.  

Project Services also sought attorney fees, arguing that based on the failure to 

close, the Espinosas breached the contract in their own right and were no longer 

the prevailing party.  The Espinosas responded that Project Services could not 

properly raise an alleged breach of contract as a new claim or theory for 

recovery, when that alleged breach occurred three days after the judgment.  The 

trial court ruled on the motion for reconsideration orally on February 1, 2010, 

and in writing on February 23, 2010.  The trial court exercised its equitable 

authority, pushing the closing date back to April 1, 2010, reaffirming specific 

performance as the remedy, and leaving all other contract provisions in effect.  It 

also modified the original attorney fee award, making it contingent upon whether 

the sale actually closed.  Under this ruling, the $93,796.62 award was to be 

deducted from or credited against the original purchase price in the VLPSA.  In 

       2 The e-mail from the Espinosas' attorney, Rod Dembowski, to Project 
Services' attorney, Roy Stegena, read in part as follows: 

       I received final word late yesterday from the Espinosas that they 
       will not be closing on the property.  Please send whatever form 
       Preview Properties (assuming they still hold the earnest money) 
       requires to release the earnest money to your client.  We will 
       promptly have our clients sign it.
                                           5 

No. 65664-3-I/6

the event that the Espinosas were again unable close the sale by April 1, 2010, 

they would no longer be entitled to the award, and Project Services would 

receive the $9,000 earnest money.  

       While Project Services' January 6, 2010 motion for reconsideration was 

pending, Gliege performed additional work on the property, removing trees that 

were damaged or fallen, and removing approximately twelve trees to enhance 

the property's view.  The Espinosas continued to work on obtaining funds to 

close the purchase by April 1, 2010.  Upon visiting the property shortly before 

the new closing date, the Espinosas discovered that Gliege had removed trees 

and made additional alterations to the property, such as widening the driveway.  

       On March 24, 2010, the Espinosas moved the court for relief from 

judgment under CR 60 and requested an additional 60 days extension of the 

closing to investigate.  Gliege and Project Services opposed the motion, arguing 

in part that it was untimely.  They conceded that Gliege had removed the trees, 

but asserted that he did so as maintenance, and to spruce up the property for 

sale, believing that the VLPSA had expired when it did not close on December 

31, 2009.  The trial court conducted a hearing on the motion on March 29, 2010.  

At the hearing, the trial court expressed its concern that Gliege and his attorney 

failed to disclose these alterations at the February 1, 2010 hearing.  The trial 

court stated it may have reached a different decision on the motion for 

reconsideration if at the time it had been properly informed of the additional 

alteration.  The trial court granted the Espinosas' motion, permitted the parties to 

engage in additional discovery, and extended closing to June 30, 2010.  It also 

                                           6 

No. 65664-3-I/7

emphasized that no additional work was to be done on the property without a 

court order.  

       Discovery commenced, and each side submitted testimony from expert 

arborists to address the matter of damages and the value of the removed trees.  

The trial court heard the motion on June 22, 2010, and stated: 

              For the purposes of my ruling, the amount of damages is not 
       the paramount issue.  The issue is, did Mr. Gliege compound the 
       alteration of the property by the removal of the trees ...  . .  

              . . . . 

              Had I known what I know now in February when the oral 
       argument was presented to me, I would not have reconsidered.  I 
       would have [let] the findings of fact, conclusions of law and the 
       judgment stand.

The trial court made it clear that it would not have chosen specific performance 

as a condition of the Espinosas receiving their attorney fees and costs, 

essentially requiring them to go through with the purchase, if it was aware of the 

additional alteration.  The trial court therefore granted the Espinosas' motion to 

amend, rescinded the contract, and returned the earnest money to the 

Espinosas.  It also granted them their attorney fees and costs as it had back in 

December, no longer conditioned upon their closing the VLPSA, and added 

those additional fees and costs incurred after February.  The trial court entered 

an amended final judgment consistent with its final order against both Project 

Services and Gliege.  Project Services and Gliege appealed.

                                    DISCUSSION

       When findings of fact and conclusions of law are entered following a 

                                           7 

No. 65664-3-I/8

bench trial, appellate review is limited to determining whether the findings are 

supported by substantial evidence and, if so, whether the findings support the 

trial court's conclusions of law and judgment.  Sunnyside Valley Irrigation Dist. v. 

Dickie, 111 Wn. App. 209, 214, 43 P.3d 1277 (2002), aff'd, 149 Wn.2d 873, 73 

P.3d 369 (2003).  Evidence is substantial if it is sufficient to persuade a fair-

minded person that the declared premise is true.  Id.  Conclusions of law are 

reviewed de novo.  Sunnyside, 149 Wn.2d at 880.

   I.  February 2010 Order on Reconsideration

       Project Services' arguments and assignments of error focus first on the 

trial court's February 23, 2010 order on reconsideration.  Project Services

contends the trial court erred by upholding the earlier award of attorney fees to 

the Espinosas (albeit, conditioned on the closing of the purchase) and by 

extending the closing date to April 1, 2010.

       A. Attorney Fees and Costs

       It is clear from the December 28, 2009 decision that the Espinosas were 

the prevailing party on their breach of contract claim, and the trial court initially 

awarded them the remedy of specific performance.  They also successfully 

defended against Project Services' slander of title and breach of contract claims.  

The contract provides that the prevailing party is entitled to reasonable attorney 

fees and expenses in the event of a suit concerning the agreement.  Project 

Services now argues that, after failing to close on December 31, 2009, the 

Espinosas should no longer have been considered the substantially prevailing 

party.  On December 28, 2009, the trial court granted the Espinosas the remedy

                                           8 

No. 65664-3-I/9

of specific performance.  Project Services contends that when  the Espinosas

rejected that relief, they breached the contract and relinquished the ability to 

claim they were the substantially prevailing party.  

       Under RCW 4.84.330, "prevailing party" means the party in whose favor 

final judgment is rendered.  As a general rule, the prevailing party is one who 

receives an affirmative judgment in its favor.  Riss v. Angel, 131 Wn.2d 612, 

633, 934 P.2d 669 (1997).  But, if neither party wholly prevails, the determination 

of who is the substantially prevailing party depends on the extent of the relief 

accorded.    Marassi v. Lau, 71 Wn. App. 912, 916, 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); Transpac Dev., Inc. v. Young Suk Oh, 132 Wn. App. 

212, 217, 130 P.3d 892 (2006).  

       Project Services relies on Marassi, and asserts that, because it prevailed 

in the damages phase of trial, both parties have achieved a measure of success, 

and this court must look to the extent of relief accorded.  Project Services then 

takes this argument even further.  It contends that after the Espinosas failed to 

close,  they  had forsaken the only relief afforded to them, leaving Project 

Services as the only party entitled to any relief, and thus establishing it as the 

substantially prevailing party.  We reject that argument.  The fact that the 

Espinosas were unable to close on December 31, 2009 or avail themselves of 

the relief granted does not undermine the trial court's December 28, 2009 ruling 

that they were the prevailing party in the underlying lawsuit.  Here, unlike in 

Marassi, Project Services did not prevail in the underlying contract dispute, but 

                                           9 

No. 65664-3-I/10

was deemed to have breached the contract and was awarded nothing.  Because 

the Espinosas succeeded in their breach of contract claim, they were initially, 

and remained, the prevailing party.  

       The trial court considered this same argument on December 28, 2009, 

stating:

       There are several intertwining issues, but the court would find that 
       the Espinosas were the prevailing parties under the lawsuit.  

              And defendants indicate that, well, they should only be 
       prevailing parties if in fact they carry through with their specific
       performance.  The court rejects that approach.  The court may 
       have been sitting as a court of equity in terms of presenting various 
       relief, i.e., rescission or specific performance, but having done so, 
       the court then is required to follow the conditions of the contract.  
       And the contract in this case indicates that the prevailing party will 
       be entitled to their attorneys' fees.  It doesn't say, well, you're only 
       entitled to these attorneys' fees in the event that you in fact close 
       this transaction.  It says, you're entitled to your attorneys' fees if 
       you are successful at the lawsuit.  The plaintiffs have been 
       successful at the lawsuit.

This analysis remains applicable now.  We hold that the trial court did not err in 

awarding the Espinosas attorney fees and costs.

       B. Extension of Closing Date

       In a related argument, Project Services contends the trial court abused its 

discretion by extending the closing date from December 31, 2009 to April 1, 

2010.  Project Services contends that the Espinosas'              failure to close    by 

December 31 constituted a material breach by them as buyers.  Project Services

also suggests in the alternative that if the Espinosas did not breach the contract, 

it was only the trial court's improper and sua sponte decision to extend the 

closing date that prevented such a breach.  

                                           10 

No. 65664-3-I/11

       In matters of equity, trial courts have broad discretionary power to fashion 

equitable remedies.  Sorenson v. Pyeatt, 158 Wn.2d 523, 531, 146 P.3d 1172 

(2006).  

       The trial court understandably expressed its trepidation with                 the 

Espinosas tying up the property for years if they were not going to go through 

with the purchase.  While litigation was pending, Project Services was unable to 

sell to another buyer.  But, the evidence before the trial court in February 2010

suggested the Espinosas had every intention of going through with the specific 

performance remedy and always wanted to close the sale.  The Espinosas 

presented evidence that they attempted to secure financing from Frontier Bank, 

but were unsuccessful.  Accordingly, the trial court stated: 

              So it seems to me, using the equitable powers that are 
       available under this prayer, that it would be appropriate that the 
       judgment of attorney fees and costs would only be satisfied from 
       the proceeds of a sale of the property for its original price of 
       $375,000.  

              Now, in light of this court's ruling, I will extend by 60 days 
       the time for the plaintiffs to close, and that is the closing date will 
       be [April 1], 2010.  All other terms of the purchase and sale 
       agreement shall remain in full force and effect.

This result -- a conditional judgment for fees and costs to the 

Espinosas -- ultimately did not stand when the trial court subsequently granted 

rescission instead of specific performance in its June 2010 ruling.  But, it was a 

result that the trial court was entitled to reach, under its broad discretionary 

authority sitting in equity.  Indeed, as the Espinosas point out, this result was 

consistent with what Project Services had in fact requested in its response.  

                                           11 

No. 65664-3-I/12

Instead of the independently enforceable award of attorney fees and costs that 

was in place after the December 28, 2009 judgment, the trial court required the 

award of fees and costs to be in the form of an offset against the contract price.  

At the time, based on the drastic decrease in property value during the 

intervening years, requiring the Espinosas to pay the original 2006 VLPSA price 

was a favorable result for Project Services, as they argue themselves.  We hold 

that the trial court did not abuse its broad discretion in extending the closing 

date or conditioning the Espinosas' attorney fees on their closing the sale.

   II. Award of Fees Against Gliege Personally

       Project Services     argues that     any fees and costs awarded to the 

Espinosas should have been imposed only against Project Services and not 

against Gliege personally.  It contends that Gliege was not a party to the VLPSA 

since the property was not transferred to him until after the material breach had 

occurred, but prior to the initiation of the law suit.  

       Project Services transferred ownership of the           property  to Gliege by 

quitclaim deed on August 8, 2006, several months after the March 2006 fire and 

breach of the VLPSA.  The Espinosas' original complaint filed on October 13, 

2006 only named Project Services.  This was consistent with the fact that the

Espinosas and Project Services were the only two parties               involved in the

VLPSA.  The Espinosas first added Gliege's name in their amended complaint 

filed on October 24, 2008. That amended complaint stated: "Defendant Gregory 

Gliege was the president of Project Services, caused the property to be 

transferred to his personal name after the closing date, and is named herein as 

                                           12 

No. 65664-3-I/13

the owner of the property in dispute, so that the relief sought can be effectively 

obtained."  The relief sought was specific performance.          It did not allege that 

Gliege was a party to the contract.

       On September 3, 2009, having already found that Project Services 

breached the contract      by altering the property, the trial court granted the 

Espinosas the remedy of specific performance.          The court also concluded that 

they were entitled to an award of attorney fees and costs, as provided for in the 

contract.  The Espinosas filed their motion for attorney fees and costs on 

December 16, 2009, and Project Services filed their response on December 22, 

2009. Neither party addressed the issue of whether Gliege should be personally 

liable, jointly and severally, for any fees or costs awarded.  The trial court 

awarded the Espinosas a $93,796.62 judgment, and indicated that both Project 

Services and Gliege were judgment debtors.  That judgment was based on the 

fees and costs the Espinosas incurred litigating the breach of contract issue and 

damages, which they were entitled to as the prevailing party based on paragraph 

p of the VLPSA.  But, while the trial court included Gliege as a debtor liable for 

the judgment, it did not enter any findings or conclusions pertaining to the basis 

for his personal liability.  

       The matter of Gliege's personal liability on the judgment was raised for 

the first time by Gliege and Project Services in their January 6, 2010 motion for 

reconsideration.  They argued there, as they do now on appeal, that Project 

Services was the only seller listed in the VLPSA and that Gliege was never a 

party to the contract (or guilty of any breach) in his individual capacity.  The 

                                           13 

No. 65664-3-I/14

Espinosas responded on January 25, 2010 with several arguments for why 

Gliege should be personally liable.  They contended: (1) that a May 2006 

amendment to the VLPSA included Gliege personally; (2) that he was an 

assignee of the contract, and took on its obligations and rights when he took 

ownership of the property; and (3) that he took title to the property subject to the 

Espinosas' contract rights, and the Espinosas' action against him personally was 
appropriate since it was an "action on the contract."3 4

       The trial court's order on February 23, 2010 made no affirmative findings 

of fact on the Espinosas' arguments, nor did it enter any conclusions of law to 

support Gliege's personal liability.  However, when it added the condition that 

the Espinosas were only entitled to attorney fees and costs as an offset upon 

closing, the result was that the Espinosas' judgment for fees and costs was 

required to come directly out of money they would pay to Project Services in 

specific performance upon closing.  While Project Services did not own the 

property, it was the corporate name on the VLPSA, not Gliege's.

       Finally, on the Espinosas' CR 60 motion, the trial court             entered an 

amended final judgment in June 2010, vacating the February 2010 order and 

       3 An "action on a contract" is broadly construed and encompasses any 
action in which it is alleged that a person is liable on a contract.  Herzog 
Aluminum Inc. v. Gen. Am. Window Corp., 39 Wn. App. 188, 197, 197, 692 P.2d 
867 (1984).  An action is "on a contract" if it arises out of the contract and the 
contract is central to the dispute.  Edmonds v. John L. Scott Real Estate, Inc., 87 
Wn. App. 834, 855, 942 P.2d 1072 (1997).  
       4 They also argued for the first time that liability could be extended to 
Gliege by piercing the corporate veil, if the court deemed that appropriate.  This 
theory was not fully developed and the court entered no findings or conclusions 
on this issue.
                                           14 

No. 65664-3-I/15

reinstating  the independent attorney fee judgment as it initially existed in 

December 2009.  The trial court also awarded additional fees and costs that had 

been incurred since that time.  For a third time, the trial court made no findings 

of fact or conclusions of law that established Gliege's personal liability.  

       The burden was on the Espinosas as plaintiffs to demonstrate why they 

were entitled to judgment against Gliege personally, when he was not a party to 

the original VLPSA at the time of its creation or the time of its breach.           See 

generally Navlet v. Port of Seattle, 164 Wn.2d 818, 858, 194 P.3d 221 (2008).  If

the trial court fails to enter a finding on a material factual issue, this court 

presumes that the party with the burden of proof failed to sustain his or her 

burden on that issue.  State v. Armenta, 134 Wn.2d 1, 14, 948 P.2d 1280 (1997).  

Here, the trial court did not enter findings on the matter of Gliege's personal 

liability in December 2009, February 2010, or June 2010.  Accordingly, we hold 

that the Espinosas have failed to sustain their burden of proof that Gliege should 

be personally liable for the award of attorney fees and costs.  We reverse the 

award of judgment against Gliege jointly and severally in his personal capacity, 

and affirm the judgment against Project Services.

   III. Espinosas' March 24, 2010 CR 60 Motion

       While Project Services' January 6, 2010 motion for reconsideration was 

pending, Gliege removed additional trees from the property.  He did not disclose 

this fact to the trial court or the Espinosas at the February 1, 2010 hearing on 

Project Services' motion or at any time before the trial court entered the order on 

that motion on February 23, 2010.  The Espinosas became aware of the 

                                           15 

No. 65664-3-I/16

additional changes to the property on March 7, 2010, upon visiting to prepare for 

the April 1, 2010 closing.  On March 24, 2010, the Espinosas moved the court 

for relief from judgment under CR 60, requesting an additional 60 day extension 

of the closing date to investigate.  

       A.    Challenge to the Timeliness of the Motion

       Project Services now argues that the trial court erred by considering and 

granting the Espinosas' CR 60 motion because it was untimely.  CR 60(b)(3) 

allows a court to relieve a party from a final judgment, order, or proceeding 

based on "[n]ewly discovered evidence which by due diligence could not have 

been discovered in time to move for a new trial under rule [CR] 59(b)."           It also 

provides that "[t]he motion shall be made within a reasonable time and for [newly 

discovered evidence] not more than 1 year after the judgment, order, or 

proceeding was entered or taken." CR 60(b).  CR 59, in turn, provides that when 

there are grounds for a new trial or reconsideration, a motion must be filed not 

later than 10 days after the entry of the order.  CR 59(b).  Project Services 

contends that the Espinosas failed to establish that the newly discovered 

evidence could not have been discovered within 10 days of the trial court's 

February 23, 2010 order.  

       The trial court heard argument on the CR 60 motion on March 29, 2010. 

The court    expressed its considerable concern about Gliege and Project 

Services' failure to disclose the alterations on February 1, 2010, particularly 

since it was prior alterations to the property that initially led to the lawsuit in 

2006.  And, while  the Espinosas' March 24, 2010 motion for relief was not 

                                           16 

No. 65664-3-I/17

submitted within ten days of the February 23, 2010 order, it was not a motion for 

a new trial or for reconsideration, as is contemplated under CR 59(b), and was 

thus not subject to the 10 day requirement.  Instead, it was a motion for relief 

from a judgment or order, governed by CR 60(b).          Accordingly, it was required

only to be brought within a reasonable time, not more than 1 year after the order, 

and based on "[n]ewly discovered evidence which by due diligence could not 

have been discovered in time to move for a new trial under rule [CR] 59(b)."         CR 

60(b).  The VLPSA required the seller to perform no alteration to the land.  The 

litigation commenced because of an earlier alteration of the land, and Project

Services did not disclose the subsequent alteration during the pendency of the 

litigation.  The fact that the trial court did not find that the Espinosas failed to 

exercise due diligence on these facts is unremarkable and not an abuse of 

discretion.  We  reject the challenge to the trial court's decision to hear  the 

motion or extend the closing date.  

       B.    Supplemental Award of Attorneys Fees

       The trial court allowed discovery, heard the merits of the motion for relief

in June.  It reversed its February 2010 order, which had the effect of reinstating 

the prior judgment from December 2009.            The trial court also awarded the 

Espinosas attorneys fees incurred subsequent to the entry of the February 

order.

       Project Services challenges the award of those fees.  However, there is 

no doubt that the Espinosas were the prevailing party and that the proceedings 

between February and June were a continuation of the same cause of action on 

                                           17 

No. 65664-3-I/18

the contract.  As previously noted, the contract provides for the award of fees to 

the prevailing party.  The Espinosas prevailed under the December judgment 

and under the June order which reinstated it.  We find no error.

   IV. Contested Findings of Fact and Conclusions of Law

       Finally, Project Services assigns error to two of the trial court's findings of 

fact and one conclusion of law contained in the December 28, 2009 findings of 

fact, conclusions of law, and final judgment.  The disputed findings of fact read: 

              16.  The Espinosas contacted Defendants about their 
       concerns.  The VLPSA provided for a ten day extension of closing.  
       Project Services Corp. refused to delay closing to allow the 
       Espinosas time to investigate the nature and extent of the damage 
       to the Property.

       . . . .

              18.  The Espinosas were within their rights by executing a 
       Reservation of Rights with respect to the damages caused by the 
       fire and grading and entering the document into escrow.

And, the disputed conclusion of law reads:

              8.  Plaintiffs were within their rights in terms of presenting 
       Exhibit No. 4 (the reservation of rights document) and it was not a 
       breach of the contract for them to do so.

Project Services contends that if the court finds in their favor on this matter, all 

other assignments of error become moot.  

       Project Services does not raise an argument that substantial evidence 

does not support the disputed findings or that the findings do not support the 

conclusion.  Instead, it argues that when the Espinosas added the reservation of 

rights to the VLPSA in 2006 upon discovering the alteration to the property, it 

prevented the transaction from closing by adding new material contract terms.  

                                           18 

No. 65664-3-I/19

But, as the Espinosas point out, this is merely a resurrection of the same 

argument that was raised in, and resolved by, this court in Espinosa I.  In 

Espinosa I, this court stated:

       Through the reservation of rights the Espinosas sought to ensure 
       that they received the land they had contracted to buy in the 
       condition they bargained for.  The reservation was an attempt to 
       preserve existing rights under the contract rather than assert new 
       rights or responsibilities for the parties.  However, adding a 
       reservation of rights in the absence of breach by Project Services 
       would itself be a breach by Espinosa, and they would be ineligible 
       for specific performance.

Espinosa I, 2008 WL 1934847, at *3.           Project Services never sought further 

review of this court's determination in Espinosa I.  The earlier holding thus 

constitutes the law of the case.  See Lutheran Day Care v. Snohomish County, 

119 Wn.2d 91, 113, 829 P.2d 746 (1992) ("'law of the case'" refers to "'the 

binding effect of determinations made by the appellate court on further 

proceedings  in the trial court on remand.'") (footnote omitted) (quoting 15 L. 

Orland & K. Tegland, Washington Practice: Judgments § 380, at 56 (4th ed. 

1986)).  While this language found only that there was a material fact still in 

dispute and that summary judgment for Project Services was inappropriate, it 

now must be read in conjunction with the subsequent undisputed trial court 

finding that Project Services did indeed breach the contract by altering the 

property.  The reservation of rights was not an assertion of new rights, but was 

merely the Espinosas' attempt to preserve their already existing rights under the 

VLPSA.  The trial court simply abided by the decision in Espinosa I in entering 

the challenged findings and conclusion.  We reject Project Services' argument.

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No. 65664-3-I/20

   V. Attorney Fees

       Both parties seek attorney fees and costs on appeal under RAP 18.1. 

The contract provides for the award of attorney fees and costs to the prevailing 

party:

       Attorneys' Fees.  If Buyer or Seller institutes suit against the other 
       concerning this Agreement, the prevailing party is entitled to 
       reasonable attorneys' fees and expenses.

Because the Espinosas substantially prevail on appeal, we award them attorney 

fees and costs as against Project Services.       However, Gliege has prevailed on 

the issue of his personal liability for attorneys fees.  Inasmuch as that claim was 

based on the assertion of contractual liability for those fees, Gliege is entitled to 

attorneys fees attributable to that issue on appeal.  See Herzog Aluminum, Inc. 

v. Gen. Am. Window Corp., 39 Wn. App. 188, 197, 692 P.2d 867 (1984).

       We affirm in part, reverse in part, and remand for correction of the 

judgment.

       WE CONCUR:

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No. 65664-3-I/21

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