No. 20504-5-IIIThe Court of Appeals of Washington, Division Three. Panel Five.
Filed: July 3, 2003 UNPUBLISHED OPINION
Appeal from Superior Court of Spokane County Docket No: 00-2-04021-5 Judgment or order under review Date filed: 08/23/2001
Counsel for Appellant(s), Raymond E. Jr. Cook (Appearing Pro Se), 810 E. Deer Park-Milan Rd, Deer Park, WA 99006.
Dale L. Russell (Appearing Pro Se), Attorney at Law, P.O. Box 1225, Deer Park, WA 99006-1225.
Counsel for Respondent(s), Shay S. Scott, Attorney at Law, 101 SW Main St. Ste 1800, Portland, OR 97204-3226.
A W Farms is a joint venture of William and Alex Guhlke, who are brothers, and the entity that manages their farm. Sunshine Lend
Lease, Inc. is a corporation that conducts logging business and it is one of a number of corporations utilized by Raymond E. Cook, Jr. for that purpose. Raymond Cook and William Guhlke have known each other since the 1970s. In 1997, William Guhlke hired Deer Park Transfer, a Cook entity, to log a portion of the Guhlkes’ property. Again, in January 2000, William Guhlke contacted Mr. Cook about additional logging.
After Mr. Cook and William Guhlke discussed the scope of the project, the logger made certain representations to the property owner. Mr. Cook estimated that he would pay the Guhlkes between $100,000 and $150,000 for the entire job; he also told William Guhlke that he would have $50,000 to him by March. Additionally, they discussed payment rates for the logs. Mr. Cook specifically promised Mr. Guhlke that he would provide scale slips and would deliver the slips to Mr. Guhlke’s bank, the Wheatland Bank. He also promised to provide load-specific information, tickets, scheduling tickets, and summaries.
Eventually, Mr. Cook presented Mr. Guhlke with a document entitled `Timber Purchasing Agreement,’ representing a contract between A W Farms and Sunshine. Ex. 31. The timber purchasing agreement bears the signature of Raymond E. Cook, in his capacity as President of Sunshine. Paragraph 2 of the timber purchasing agreement provides the `Stumpage Rate-Payment Schedule.’ Ex. 31. This paragraph states the following rates will be paid: $275 for Douglas Fir; $380 for Ponderosa Pine 12 inches and larger in diameter; $220 for Ponderosa Pine less than 12 inches in diameter; and $10 per ton for Douglas Fir Tops. These rates reflected the parties’ prior negotiations. Additionally, paragraph 4 of the agreement was entitled `Scaling’ and this paragraph detailed how the property would be scaled. Ex. 31.
After Mr. Guhlke received the contract, he attempted several times to arrange a meeting with Mr. Cook to discuss adding language to the contract relating to an easement. Mr. Guhlke felt this easement language was necessary to complete a later phase of the project. Mr. Cook never met with Mr. Guhlke, and Mr. Guhlke never signed the contract. However, Mr. Cook began to log A W Farms’ property in January 2000 and continued logging for approximately six months. Mr. Cook contracted with two of Stimson Lumber Company’s mills for the sale of logs from the Guhlkes’ properties.
At trial, Stimson’s procurement manager, Donald Moskeland, testified that each log agreement requires that the logger provide for entering the applicable state compliance number that refers to the property owner’s cutting permit number or approved state forest practice number. This ensures the mill that the logs have been harvested according to the state requirements. The mill relies upon the logger to provide the correct forest practice permit number on the contract, along with the project name.
Stimson Mill supplies each logger with a booklet of load tickets, sometimes called wood tickets. These tickets bear the project name or brand number that corresponds to the project name or brand number stamped on the log purchase agreement. All other information on the load ticket is provided by the logger. The load ticket itself is a two-part, perforated ticket, so that one part may be retained by the mill, and the other part may be retained by the logger. A load ticket must accompany each load arriving at the mill. When a load of logs arrives at the mill, the truck is weighed, and this process generates a weight ticket. Next, each log is measured, which generates a scale ticket. Stimson Mill retains ledgers with all the information from each load, including the load ticket.
In completing the agreements with Stimson Mill, Mr. Cook provided information related to A W Farms, including the project name, brand numbers, and forest practice permit numbers. No other landowner information was provided on these two agreements. Mr. Moskeland explained that when a logger delivers a load accompanied by a load ticket, Stimson expects, as a matter of company policy, that the logs originated from land covered under the forest practice permit number identified on the log purchase agreement. Mr. Cook testified that mills do not require him to reveal the origin of logs when he delivers the logs to the mills.
In the early phase of the project, Mr. Guhlke met with Mr. Cook on the job site to discuss the operation. Dale King was present during the discussions. Mr. King previously worked as a contractor for Mr. Cook and had logged portions of Mr. Guhlke’s property. During the discussions, Mr. King asked Mr. Guhlke why he was cutting more timber, when he already had cut 1.2 million board feet in 1997 on the earlier job. Mr. Guhlke was baffled by this comment, because the documentation Mr. Cook provided to him regarding the 1997 logging indicated that only 600,000 board feet had been harvested. In response, Mr. Cook told Mr. Guhlke that he would provide him with an accounting from that operation, but he never did.
The parties originally intended to log the Guhlkes’ property in five stages. Mr. Cook, however, terminated his logging operation before finishing the final two stages. When he stopped logging in approximately June 2000, Mr. Cook paid A W Farms $29,861.
During trial, Mr. Cook was asked:
Q. Okay. Did you apart from this contract and during discussions with Mr. Bill Guhlke promise to pay him according to the rates in Paragraph 2?
A. I told him that I would live up to the rate, yes, that I quoted him.
Report of Proceedings (RP) at 72. Mr. Cook provided Mr. Guhlke with three summaries related to the amount of timber that was cut, but Mr. Guhlke testified that the summaries did not contain enough information to determine how Mr. Cook arrived at the payment calculation. Mr. Cook refused to provide additional information to Mr. Guhlke.
The Guhlkes and A W Farms sued Mr. Cook, along with his wife, and Sunshine for breach of contract and fraud. The complaint was later amended to include claims for spoliation of evidence and timber trespass.
At trial, Mr. Cook explained the discrepancy between his payments to A W Farms and the Stimson Mill records by stating that he combined the logs from the Guhlkes’ property with two other properties that he was logging. Mr. Cook claimed that his delivery to Stimson Mill included logs from the property of Adeline Johnson, his mother-in-law, and from Ben Edwards. In support of his claim, Mr. Cook testified that he paid Ms. Johnson exactly $30,000 for the logs removed from her property. The only documentation supporting this claim was three checks made payable to Ms. Johnson dated March 2, 2000. The memo lines on each of the three checks stated, `repay loads/logs.’ RP at 164. Mr. Cook further testified that Ms. Johnson had loaned him $200,000 in January 1999, but he denied that he had not made any payments on the loan.
A W Farms obtained copies of the three checks from Mr. Cook’s bank. Unlike Mr. Cook’s checks, the copies obtained from the bank stated on the memo lines `repay for loan’ instead of `repay loads/logs.’ RP at 164. Mr. Cook explained that he had altered the checks before producing them to A W Farms because his accountant, who is his attorney’s wife, told him to do so.
Additionally, Mr. Cook claimed he delivered 21 loads of logs from Ms. Johnson’s property during the time he was performing the 2000 operation for A W Farms. On March 2, 2000, when the three checks were written, only 3 of the 21 loads had been cut and delivered to the mill. When he was asked how he would know he owed Ms. Johnson exactly $30,000 before all the timber had been cut and delivered, Mr. Cook responded, `That’s — We — we had the estimate on what it was going to be on how many truckloads. It was based on the truckloads.’ RP at 407.
Before trial, A W Farms and the Guhlkes applied to the superior court for a prejudgment writ of garnishment. They sought to garnish the trust account of Dale L. Russell, an attorney representing Sunshine and the Cooks. The basis for the prejudgment garnishment was a response made by Mr. Cook to a question regarding how he used the monies that he had received from the mills for the logs that he had cut. As a partial explanation, he stated that he had paid his attorney $20,000 as a retainer to represent him in the A W Farms lawsuit. Mr. Russell attended the deposition with Mr. Cook.
In response to the garnishment, Mr. Russell filed an answer stating that he had not been paid such a retainer and that he was not in possession of any funds belonging to either the Cooks or Sunshine. Mr. Cook filed an affidavit that confirmed Mr. Russell’s answers and that attempted to explain his deposition testimony. After a hearing, the trial court found that pursuant to RCW 6.27.230, the answer of the garnishee (Mr. Russell) was controverted, that the controversion was by the defendants (the Cooks and Sunshine), and plaintiffs (A W Farms, William Guhlke and Alex Guhlke) were the prevailing parties. As a result, the court awarded a judgment for attorney fees in the amount of $14,437 against Sunshine and the Cooks. The judgment was entered on May 18, 2001, and states that it is a final judgment regarding the garnishment controversion. During trial, Mr. Cook explained that he commingles logs from multiple landowners under log purchase agreements, and this is the method he has always utilized in his logging operations. In response, Mr. Guhlke testified that if he had been aware that Mr. Cook planned to commingle logs from other properties with his logs, he would never have allowed Mr. Cook to log his property. Likewise, he testified that if, at the time of contracting, he had known that A W Farms would not be paid according to the terms of the contract and at the stumpage rates set forth in paragraph 2 of the contract, he would not have retained Mr. Cook to log his property. Stimson Mill provided the Guhlkes with vendor payment advice forms related to their logs delivered to the mill. Stimson tracks its payments to each logger using vendor advice payment forms. These forms indicate that Mr. Cook delivered 293,030 board feet of A W Farms’ logs and was paid $153,967.80. Mr. Moskeland testified that roughly one year prior to trial, Mr. Cook appeared at the mill and requested all the load tickets associated with the A W Farms’ project name. Mr. Moskeland provided Mr. Cook with these tickets. Mr. Cook failed to produce these tickets during discovery.
The trial court found that a contract existed between A W Farms and Sunshine. The court also found that the parties agreed that A W Farms would be paid in accordance with the terms set forth in paragraph 2 of the contract. Additionally, the court found that Sunshine was required under the contract to account for the amount and type of logs removed from the Guhlkes’ property. Also, the court found that all of the lumber delivered by Sunshine and Mr. Cook to Stimson Lumber Company came from the Guhlkes’ property and that Mr. Cook’s representations about log deliveries from other properties were false. The court stated that the fact that these misrepresentations were false was corroborated by Mr. Cook’s deliberate and intentional alterations of the three $10,000 checks. Accordingly, the court entered a judgment for breach of contract against Sunshine in the amount of $56,148.30.
Finally, the court found that clear, cogent, and convincing evidence existed of fraud. Specifically, the court found that Mr. Cook’s representations that A W Farms would be timely paid for logs cut and would be provided an accounting were material representations, and that Mr. Cook intended A W to act upon these representations. Additionally, the court found that A W Farms had the right to rely upon these representations and, in fact, did rely upon them because A W Farms allowed Mr. Cook to cut the timber from its property. Accordingly, the court entered a judgment for fraud in the amount of $56,148.30 against Mr. Cook individually.
The court awarded attorney fees against both Sunshine and Mr. Cook in the amount of $65,045.05 on three bases: (1) fraud and breach of fiduciary duty caused A W Farms to pursue this litigation; (2) spoliation and modification of and withholding of evidence; and (3) refusal to cooperate/stonewalling and obfuscation during discovery.
Raymond Cook appeals.
Contract — Sunshine Lend Lease, Inc. This court reviews findings of fact to determine whether they are supported by substantial evidence and, if so, whether the findings support the conclusions of law. Brin v. Stutzman, 89 Wn. App. 809, 824, 951 P.2d 291 (1998) (quoting Willener v. Sweeting, 107 Wn.2d 388, 393, 730 P.2d 45 (1986)). `Substantial evidence exists if the record contains evidence of sufficient quantity to persuade a fair-minded, rational person of the truth of the declared premise.’ In re Estate of Eubank, 50 Wn. App. 611, 617, 749 P.2d 691
(1988). A trial court’s conclusions of law are reviewed de novo. City of Seattle v. Megrey, 93 Wn. App. 391, 393, 968 P.2d 900 (1998).
Sunshine argues that no contract existed, and that the parties merely exchanged offers. `The burden of proving a contract is on the party asserting it, and he must prove each essential fact, including the existence of a mutual intention.’ American States Ins. Co. v. Breesnee, 49 Wn. App. 642, 646, 745 P.2d 518 (1987).
‘To form an express contract, the parties must express their intentions and the terms of their agreement, either orally or in writing, at the time they enter into the contract.’ Concerned Citizens of Hosp. Dist. No. 304 v. Bd. of Comm’rs of Pub. Hosp. Dist. No. 304, 78 Wn. App. 333, 341, 897 P.2d 1267 (1995). The parties’ intentions are determined from the reasonable meaning of their words and acts. City of Everett v. Estate of Sumstad, 95 Wn.2d 853, 855-56, 631 P.2d 366 (1981). `In discerning the parties’ intent, subsequent conduct of the contracting parties may be of aid, and the reasonableness of the parties’ respective interpretations may also be a factor in interpreting a written contract.’ Berg v. Hudesman, 115 Wn.2d 657, 668, 801 P.2d 222 (1990).
Sufficient evidence exists that both parties intended to create a contract. They verbally agreed upon the scope of the project, and the price to be paid for the timber. Subsequent to this conversation, Mr. Cook drafted and signed a contract, memorializing the conversation. Both Mr. Cook and Mr. Guhlke state that the prices contained in the contract reflected their agreement. Thus, the evidence indicates that the parties intended to enter into a contract. The failure to sign a document is not fatal to the formation of a contract. Fuller v. Ostruske, 48 Wn.2d 802, 807, 296 P.2d 996 (1956); Van Geest v. Willard, 27 Wn.2d 753, 765, 180 P.2d 78 (1947).
In Fuller, Mr. Ostruske decided to terminate Philip Strand’s employment. Mr. Strand worked on the company’s project site in Kodiak, Alaska. The two men agreed that Mr. Ostruske would purchase Mr. Strand’s stock provided that they could agree upon a price. The parties engaged in some negotiations, and Mr. Ostruske prepared and signed a written document detailing the terms of Mr. Strand’s termination, and his agreement to sell the stock for approximately $16,000. Mr. Strand did not sign this agreement at the time he received it. However, he took a signed copy of the agreement and promptly left Alaska.
Subsequently, Mr. Ostruske claimed that he was not bound by the agreement and that he would not purchase Mr. Strand’s stock for the quoted price. The court held that ‘[i]f the terms of a contract are agreed upon and the intention of the parties is plain, then a contract exists, even though one or both of the parties may have contemplated that a more formal contract would be executed subsequently.’ Fuller, 48 Wn.2d at 807. `Under such circumstances, a written draft of the contract is viewed merely as a convenient memorial or record thereof.’ Id. The court also stated that acceptance of an offer can be shown by subsequent conduct. Id.
Fuller is similar to this case. While the Guhlkes indicated to Mr. Cook that they desired additional assurances about the manner in which he would log the property, the fact remains that the Guhlkes allowed Mr. Cook to begin logging the property and to continue to log the property for six months. Mr. Cook admitted that he considered himself bound to pay the Guhlkes pursuant to the stumpage rates set forth in paragraph 2 of the contract. The testimony indicates that the terms of the contract were agreed upon and the intentions of the parties were clear. Additionally, A W Farms’ conduct in allowing Mr. Cook to log the property after he had delivered a contract to the Guhlkes and Mr. Cook’s admission that he would pay the stumpage rates indicated in the contract further indicates that a contract was created.
The court’s conclusion that a contract existed is supported by the facts and the record. Accordingly, the judgment for breach of contract against Sunshine is affirmed.
Fraud — Raymond and Arlene Cook. Mr. Cook argues that the trial court’s finding of fraud was not supported by the record. Essentially, Mr. Cook contends that no evidence supports any of the trial court’s findings related to the nine elements of a fraud claim.
Fraudulent Misrepresentation. The elements of fraud must be proven by clear, cogent and convincing evidence. Stiley v. Block, 130 Wn.2d 486, 505, 925 P.2d 194 (1996). This is the equivalent of saying that the ultimate fact in issue must be shown to be `highly probable.’ Douglas N.W., Inc. v. Bill O’Brien Sons Constr., 64 Wn. App. 661, 678, 828 P.2d 565 (1992). It is the trier of fact and not the appellate court that must weigh the evidence and decide whether the evidence meets the clear, cogent and convincing standard; the appellate function begins and ends with ascertaining whether or not there is substantial evidence supporting the facts as found. Bland v. Mentor, 63 Wn.2d 150, 154, 385 P.2d 727 (1963). On a challenge to the sufficiency of the evidence, all evidence must be taken in the light most favorable to the plaintiff, and the plaintiff is entitled to all reasonable inferences. Couie v. Local Union No. 1849 United Brotherhood of Carpenters Joiners of America, 51 Wn.2d 108, 112, 316 P.2d 473 (1957).
The nine essential elements of fraud are: (1) representation of an existing fact; (2) materiality; (3) falsity; (4) the speaker’s knowledge of its falsity; (5) intent of the speaker that it should be acted upon by the plaintiff; (6) plaintiff’s ignorance of its falsity; (7) plaintiff’s reliance on the truth of the representation; (8) plaintiff’s right to rely upon it; and (9) damages suffered by the plaintiff. Stiley, 130 Wn.2d at 505. A false representation as to a presently existing fact is a prerequisite to a misrepresentation claim. Shook v. Scott, 56 Wn.2d 351, 355, 353 P.2d 431 (1960); Stiley, 130 Wn.2d at 505-06. Promises of future performance are not representations of existing fact. Micro Enhancement Int’l, Inc. v. Coopers Lybrand, L.L.P., 110 Wn. App. 412, 436, 40 P.3d 1206 (2002).
Here, the trial court’s legal conclusion that Mr. Cook committed the tort of fraudulent misrepresentation ultimately is based upon its findings regarding accounting and paying for the logs, ownership of the logs delivered to the mill, and falsification of the three $10,000 checks. But the trial court’s findings that Mr. Cook fraudulently represented that A W Farms would timely account and pay for the Guhlkes’ logs are not representations of existing facts. Rather, they are promises of future performance. Similarly, the trial court’s findings regarding Mr. Cook’s subsequent fraudulent misrepresentations regarding ownership of the logs delivered to the mill and the falsified checks do not support a claim for fraudulent misrepresentation. These are not representations upon which the Guhlkes relied or which proximately caused their damages.
Promissory Fraud. Promissory fraud is a subspecies of fraudulent misrepresentation. Restatement (Second) of Torts sec. 525 (1976); Tyson Foods, Inc. v. Davis, 347 Ark. 566, 66 S.W.3d 568, 577 (2002); Lazar v. Superior Court, 12 Cal.4th 631, 909 P.2d 981, 49 Cal.Rptr.3d 377, 381-82
(1996); Steinberg v. Chicago Med. Sch., 69 Ill.2d 320, 334, 13 Ill. Dec. 699, 371 N.E.2d 634 (1977). The elements of promissory fraud are (a) misrepresentation, false representation, concealment or nondisclosure; (b) knowledge of falsity; (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage. Lazar, 49 Cal.Rptr.3d at 380-81. Promissory fraud rests upon the proposition that the `promise to do something necessarily implies the intention to perform; hence, where a promise is made without such intention, there is an implied misrepresentation of fact that may be actionable fraud.’ Id. at 381. The plaintiff must prove that when the promise was made, the defendant intended to deceive. But this burden cannot be met by showing merely that the alleged promise is not kept. Restatement, supra, sec. 530, cmt. d. Most importantly, the party alleging promissory fraud must produce specific, objective manifestations of fraudulent intent. Bower v. Jones, 978 F.2d 1004, 1012 (7th Cir. 1992).
The essence of the Guhlkes’ fraud claim is that when Mr. Cook promised to account and pay for their harvested timber, Mr. Cook had the intent not to perform either act. This is a promissory fraud claim. To prevail on this claim, the Guhlkes needed to produce evidence of a fraudulent intent that existed when the promise was made. On this crucial issue, the trial court’s findings are insufficient. There is a finding that Mr. Cook intended to deceive the Guhlkes, but this finding is supported by other findings that focus on what occurred after the promise was made, i.e., Mr. Cook did not keep his promise and misled the parties and the court about what he did. A promissory fraud claim must be supported by findings showing a fraudulent intent that existed when the promise was made, which findings are supported by specific, objective evidence of that fraudulent intent.
Based upon our analysis, we conclude the best remedy is to reverse the fraud judgment against the Cooks and remand to the trial court to enter additional findings as may seem appropriate on promissory fraud.
Attorney Fees. Fees in Pursuit of Prejudgment Garnishment. The trial court awarded A W Farms its attorney fees and costs under RCW 6.27.230 for pursuing a prejudgment writ of garnishment. A W Farms sought the prejudgment writ of garnishment based on Mr. Cook’s deposition testimony that he had given his attorney $20,000 as a retainer and that the source of these funds was the proceeds from logging the Guhlkes’ property. A W Farms sought to garnish the funds in the attorney’s account. The attorney answered the writ of garnishment by denying that he held funds subject to the garnishment. Additionally, Mr. Cook responded to the garnishment by filing a declaration in which he attempted to explain his deposition testimony and in which he corroborated his attorney’s controversion of the garnishment.
Before trial, A W Farms asked the court to award it attorney fees and costs incurred in the garnishment proceedings. Apparently abandoning the garnishment, A W Farms argued ‘[t]he garnishment proceedings would not have been pursued against Mr. Russell had Mr. Cook truthfully answered the questions regarding the disposition of the funds from defendant Sunshine Lend Lease.’ Clerk’s Papers (CP) at 200 (emphasis omitted). The superior court judge agreed, entering a judgment against Sunshine and against the Cooks on May 18, 2001. The judgment specifically provided: `This is a final judgment regarding the garnishment controversion and, there being no just reason for delay, the Court expressly directs the Clerk to enter judgment forthwith.’ CP at 212. On September 17, 2001, Raymond Cook appealed the August 23, 2001 judgment that resolved the principal case. Regardless, he asks that we review the prior judgment for attorney fees and costs entered in the ancillary garnishment proceeding.
RAP 2.4(b) provides:
The appellate court will review a trial court order or ruling not designated in the notice, including an appealable order, if (1) the order or ruling prejudicially affects the decision designated in the notice, and (2) the order is entered, or the ruling is made, before the appellate court accepts review.
Consequently, a party need not file a notice of appeal within 30 days of every appealable order or judgment, but may instead await the final decision in the case. Fox v. Sunmaster Prods., Inc., 115 Wn.2d 498, 505, 798 P.2d 808 (1990). The appellate court will review prior orders in judgments, even those which were immediately appealable, provided a timely notice of appeal is filed from the final decision in the case. Id.
RAP 2.4(b) provides for review of issues not designated in the notice of appeal if the trial court’s ruling prejudicially affects the decision designated in the notice. Here, the superior court’s decision that A W Farms should be awarded its attorney fees and costs in the garnishment proceeding, based upon Mr. Cook’s misrepresentation that he paid $20,000 to his attorney from proceeds of timber sales, did not prejudicially affect the trial court’s decision in the principal case. Accordingly, review of that issue is not appropriate.
Remaining Attorney Fees. The trial court found that A W was entitled to attorney fees on three separate bases: (1) fraud and breach of fiduciary duty caused A W Farms to pursue this litigation; (2) spoliation and modification of and withholding of evidence; and (3) refusal to cooperate/stonewalling and obfuscation during discovery. The court also sanctioned Mr. Cook’s attorney, Dale Russell, for discovery abuses. Specifically, the court notes that Mr. Russell improperly claimed that the identity of `A.B. Johnson’ was privileged and this claim was made for purposes of stonewalling and obfuscating the process of the case. CP at 401.
Washington follows the American rule that a prevailing party normally does not recover its attorney fees. Rorvig v. Douglas, 123 Wn.2d 854, 861, 873 P.2d 492 (1994). `Attorney fees may be awarded only if authorized by `contract, statute or recognized ground in equity.” Bowles v. Dep’t of Retirement Sys., 121 Wn.2d 52, 70, 847 P.2d 440 (1993) (quoting Painting Decorating Contractors of Am. v. Ellensburg Sch. Dist., 96 Wn.2d 806, 815, 638 P.2d 1220 (1982)).
In this case, the court imposed fees for several reasons, one of which was the discovery abuses engaged in by Mr. Cook and his counsel. Specifically, Mr. Cook refused to provide information in response to discovery requests, and he altered evidence and refused to produce certain documents in response to requests for production. A W Farms moved in June 2001 for sanctions against Mr. Cook’s attorney, Dale Russell, for discovery abuse under CR 37. This motion was reserved for trial. Under CR 37, the court may order Mr. Cook and/or his attorney to pay attorney fees for their failure to comply with discovery.
Generally, Civil Rule 37 is the enforcement section for the discovery process. Under CR 37(d), upon the motion of a party, the court may award attorney fees for these types of discovery abuses. However, the rule also provides: `In lieu of any order or in addition thereto, the court shall require the party failing to act or the attorney advising the party or both to pay the reasonable expenses, including attorney fees, caused by the failure . . . .’ CR 37(d).
The decision to allow attorney fees under CR 37 requires the exercise of judicial discretion that will not be disturbed on appeal except upon a clear showing of abuse of discretion. Reid Sand Gravel, Inc. v. Bellevue Prop., 7 Wn. App. 701, 705, 502 P.2d 480 (1972) (citing State ex rel. Carroll v. Junker, 79 Wn.2d 12, 26, 482 P.2d 775 (1971)).
‘Generally speaking, the trial court has broad discretion under Rule 37 to make whetever [sic] disposition is just in the light of the facts of the particular case, and the purpose of the rule is to make available to the court the means of preventing injustice when one party has by his conduct placed the other party at an unfair disadvantage.’
Reid Sand Gravel, 7 Wn. App. at 705 (quoting Annot., 2 A.L.R. Fed. 811, 816 (1969)); see also Wash. State Physicians Ins. Exch. Ass’n v. Fisons Corp., 122 Wn.2d 299, 338, 858 P.2d 1054 (1993) (appellate court reviews trial court’s decision to impose sanctions for an abuse of discretion); Rhinehart v. Seattle Times Co., 51 Wn. App. 561, 574, 754 P.2d 1243 (1988) (`Absent a manifest abuse of discretion, the appellate court will not overturn the trial court’s exercise of its broad discretion under CR 37 to impose sanctions for noncompliance with a discovery order.’).
The record supports the court’s finding that Mr. Cook abused the discovery process by withholding documents, altering evidence, and improperly claiming privilege related to discoverable information. As such, the trial court’s award of fees should not be deemed an abuse of discretion.
A W Farms requests attorney fees on appeal. They contend that they are entitled to fees because the appeal was frivolous. RAP 18.9 authorizes an award of terms or compensatory damages against a party who `uses these rules for the purpose of delay, files a frivolous appeal, or fails to comply with these rules.’
The following considerations apply in determining whether an appeal is frivolous:
(1) A civil appellant has a right to appeal under RAP 2.2; (2) all doubts as to whether the appeal is frivolous should be resolved in favor of the appellant; (3) the record should be considered as a whole; (4) an appeal that is affirmed simply because the arguments are rejected is not frivolous; (5) an appeal is frivolous if there are no debatable issues upon which reasonable minds might differ, and it is so totally devoid of merit that there was no reasonable possibility of reversal.
Streater v. White, 26 Wn. App. 430, 435, 613 P.2d 187 (1980). Here, Sunshine presented debatable issues, and thus the appeal was not frivolous.
A W Farms is not entitled to fees on appeal on this basis.
In conclusion, we affirm the judgment of the trial court in all respects except that we reverse the judgment for fraud against Raymond and Arlene Cook. Regarding the fraud claim, we remand to the trial court to enter additional findings as may seem appropriate on promissory fraud.
The majority of the panel has determined this opinion will not be printed in the Washington Appellate Reports, but it will be filed for public record pursuant to RCW 2.06.040.
BROWN, C.J. and SCHULTHEIS, J., concur.