AIR INTERNATIONAL v. HARBOR AIRLINES, 147 Wn. App. 1037 (2008)

AIR INTERNATIONAL, LLC, Plaintiff, v. HARBOR AIRLINES ET AL., Defendants. LONESOME POLECAT, LLC, Appellant, v. ARTHUR JOEL EISENBERG ET AL., Defendants, WILLIAM P. MORGAN ET AL., Respondents.

No. 61334-1-I.The Court of Appeals of Washington, Division One.
November 24, 2008.

[EDITOR’S NOTE: This case is unpublished as indicated by the issuing court.]

Appeal from a judgment of the Superior Court for Island County, No. 02-2-00682-0, Alan R. Hancock, J., entered February 4, 2008.

Affirmed by unpublished per curiam opinion.

PER CURIAM.

Lonesome Polecat, LLC, appeals the trial court’s award of attorney fees to William and Geri Morgan for defending a frivolous action. But the trial court applied the correct standards and found that the entirety of Lonesome Polecat’s cross-claim action against the Morgans was frivolous. Lonesome Polecat fails to address the court’s carefully articulated basis for distinguishing its decision regarding the Morgans’ claim for fees from its ruling regarding other parties. The limited record Lonesome Polecat has provided for review does not support even a colorable argument that the trial court abused its discretion. We affirm and award the Morgans fees on appeal.

FACTS
Air International, LLC, possessed a second position deed of trust for real property owned by Harbor Airlines at the Oak Harbor Airport. Lonesome Polecat possessed first and sixth position deeds of trust relating to the same property. After Air International commenced nonjudicial foreclosure proceedings against Harbor Airlines, Lonesome Polecat tendered an offer to purchase Air International’s interest. Air International rejected Lonesome Polecat’s tender and thereafter filed suit against Harbor Airlines, Lonesome Polecat, and others.

Lonesome Polecat answered, claiming, among other things, that Air International and Harbor Airlines had engaged in a sham foreclosure scheme to defraud other creditors of Harbor Airlines. Lonesome Polecat also filed counterclaims against Air International and cross-claims against the Morgans and others. With respect to the Morgans, Lonesome Polecat alleged that William Morgan had managed the airport for Air International and in that capacity, had caused Lonesome Polecat and its owner substantial damages including lost rent, tax liability, and loss of the use of Lonesome Polecat’s real property adjacent to the airport.

Air International filed a motion for summary judgment, contending Lonesome Polecat’s claims failed as a matter of law because Lonesome Polecat was not entitled to possession of the airport. Counsel for the Morgans joined in the motion, adopting Air International’s argument. The trial court denied the motions for summary judgment.

The matter proceeded to trial, after which the court found for Air International and the Morgans on all of Lonesome Polecat’s claims.

Air International and the Morgans then filed requests for attorney fees under RCW 4.84.185. The trial court declined to award fees to Air International, because, although Lonesome Polecat’s counter-claims against Air International had ultimately all lacked merit, many of the determinative issues presented questions of first impression in Washington relating to lien priority and the meaning of the language used in the loans and deeds. The court awarded fees to the Morgans, however, because the Morgans had not been party to the deeds of trust, were not shown to be involved in Air International’s acts that Lonesome Polecat complained of, and Lonesome Polecat’s factual allegations against William Morgan personally had proved to be wholly speculative.

Lonesome Polecat appeals the award of fees to the Morgans.

ANALYSIS

Preliminarily, we note that our review is constrained by the limited record Lonesome Polecat has provided for our review. A party seeking appellate review carries the burden of providing this court the necessary record to decide the issues on appeal. Brothers v. Pub. School Employees of Wn., 88 Wn.App. 398, 409, 945 P.2d 208 (1997). Lonesome Polecat has properly designated only the record of the hearing at which fees were awarded to the Morgans and has not provided the verbatim record of the trial.[1] We accordingly must accept the summary of the trial evidence the court provided at the fees hearing because Lonesome Polecat has provided no basis to challenge that characterization. See Hyatt v. Sellen Constr. Co., 40 Wn App. 893, 895, 700 P.2d 1164 (1985).

The frivolous action statute authorizes a court to award fees if it finds “[t]hat the action, counterclaim, cross-claim, third party claim, or defense was frivolous and advanced without reasonable cause.” RCW 4.84.185. The standard of review under the statute is abuse of discretion. State ex. rel. Quick-Ruben v. Verharen, 136 Wn.2d 888, 903, 969 P.2d 64 (1998). A trial court abuses its discretion when its decision is manifestly unreasonable or based on untenable grounds. Washington State Physicians Ins. Exch. Ass’n v. Fisons Corp., 122 Wn.2d 299, 339, 858 P.2d 1054 (1993). Here, the trial court applied the correct standards and entered specific written findings that Lonesome Polecat had produced no evidence supporting its claims against the Morgans, that there was no rational argument that could be made in support of the claims, and that there was not even a debatable issue that the claims were groundless. Lonesome Polecat has not assigned error to these findings, which are therefore verities, and which support the award of fees. Rhinehart v. Seattle Times, 59 Wn. App. 332, 336, 798 P.2d 1155 (1990).

Lonesome Polecat nonetheless argues that because the court denied fees to Air International, it necessarily abused its discretion by granting fees to the Morgans. Citing Biggs v. Vail, 119 Wn.2d 129, 136, 830 P.2d 350
(1992) for the proposition that a trial court must find an action frivolous as a whole to award fees, Lonesome Polecat argues that the relevant “action” here was against all parties and was not frivolous because it included the issues of first impression that prevented awarding fees to Air International. But Biggs v. Vail simply applied statutory language in former RCW 4.84.185 requiring the trial court to “consider the action, counterclaim, cross-claim, third party claim, or defense as a whole” before awarding fees. 119 Wn.2d at 136 (emphasis added) (quoting former RCW 4.84.185 (1990)).[2] The trial court carefully considered each of Lonesome Polecat’s numerous theories of recovery against the Morgans and found them all frivolous. The court accordingly satisfied the Biggs requirement by determining that Lonesome Polecat’s cross-claim against the Morgans was frivolous in its entirety, notwithstanding that the counterclaim against Air International was not.

Significantly, Lonesome Polecat does not address, much less challenge, the trial court’s thorough and detailed explanation for why fees were appropriate for the Morgans even though they were not appropriate for Air International. The Morgans were not parties to the deeds of trust or loans in issue and were not employees of any of the parties. Mr. Morgan’s unpaid informal caretaker role at the airport did not involve handling funds that Lonesome Polecat had sought to recover.[3] Other claims stated by Lonesome Polecat’s owner directly against Mr. Morgan had turned out to be “wholly speculative and unsupported by any competent evidence.” Report of Proceedings (Feb. 4, 2008) at 20. But for Lonesome Polecat’s frivolous claims, the Morgans would not have been part of the litigation.

Lonesome Polecat alternatively argues that the trial court could not impose fees because it effectively found a basis existed for the cross-claim against the Morgans when it denied their motion for summary judgment. But Lonesome Polecat again fails to acknowledge that the trial court rejected this precise argument at the fees hearing. As the court noted, the Morgans had merely made a limited “piggybacking” motion for summary judgment, repeating Air International’s argument that Lonesome Polecat’s claim of a right of possession failed as a matter of law. Id. at 16. We agree with the trial court that, given the arguments presented, the denial of summary judgment presented no impediment to the court’s ultimate determination that Lonesome Polecat’s cross-claim against the Morgans was wholly frivolous.

Finally, citing language from MacDonald v. Korum Ford, 80 Wn. App 877, 891, 912 P.2d 1052 (1996) regarding a party’s obligation to mitigate harm caused by filings that violate CR 11, Lonesome Polecat contends that before bringing their claim for fees the Morgans should have notified not only its trial counsel, which they did, but also its former counsel who drafted the cross-claims. We reject this argument, as it was not raised in the trial court. RAP 2.5. Moreover, the language Lonesome Polecat relies on from Korum Ford does not impose a duty to warn both present and prior opposing counsel before bringing a claim for fees under CR 11, and even if it did, such a rule would not govern here because the claim was not against counsel but was against a party under RCW 4.84.185.

The trial court’s unchallenged findings provided more than a sufficient basis for the award of fees. The court’s ruling was not only consistent with the plain language of the statute; it was also entirely consistent with the recognized purpose of the statute to compensate the targets of frivolous suits for their fees and costs incurred in defending meritless cases. See Kearney v. Kearney, 95 Wn. App. 405, 416, 974 P.2d 872
(1999).

The Morgans seek attorney fees and costs under RAP 18.1 and RCW 4.84.185
for having to respond to a frivolous appeal. An appeal is frivolous if it raises no debatable issues and is so devoid of merit that there is no reasonable possibility of reversal. Andrus v. Dep’t of Transp., 128 Wn. App. 895, 900, 117 P.3d 1152 (2005), review denied, 157 Wn.2d 1005 (2006). Considering the issues raised and the manner in which they have been presented, fees are awarded subject to the Morgans’ compliance with RAP 18.1.

Affirmed.

[1] In their response brief, the Morgans note that Lonesome Polecat’s opening brief contains many factual assertions that are not supported by citations to the record. The Morgans cite as an example the claim that Mr. Morgan was known as an “enforcer” for Air International. See Br. of Appellant at 3. Lonesome Polecat has attached as appendices to its reply brief what it claims are trial exhibits supporting that characterization. But those exhibits were not designated to this court as part of the record on appeal. Under RAP 10.3(a)(7), “[a]n appendix may not include materials not contained in the record on review without permission from the appellate court.” Since Lonesome Polecat has not obtained the requisite permission, these documents are not considered. See Harbison v. Garden Valley Outfitters, Inc., 69 Wn. App. 590, 594-95, 849 P.2d 669 (1993). In addition, Lonesome Polecat repeatedly cites a document it describes as “Findings of Fact Conclusions of Law dated 12/3/08.” (emphasis added) See Br. of Appellant at 1-4, 6-8. It appears that by this reference Lonesome Polecat means to cite the trial court’s substantive bench trial findings, which possibly were entered on December 3, 2007 or some other date. But Lonesome Polecat did not designate those findings as part of the record on appeal and has not otherwise made any attempt to place them properly before this court for review. We therefore do not have a copy of those findings and necessarily cannot consider them.

[2] The quoted sentence was contained in the version of the statute construed by the Biggs court. This sentence has since been deleted by the legislature, and thus it could be argued that the frivolous nature of an action against a party can be considered on a claim-by-claim basis. The Supreme Court in Biggs thought otherwise, however, stating in dicta that legislative history of the subsequent amendments to the statute showed the legislature intended to retain the requirement. Biggs, 119 Wn.2d at 136. It is unnecessary for us to further consider the question here, however. For the reasons stated above, assuming the Biggs standard is applicable, it is clear the trial court did not abuse its discretion in awarding fees.

[3] The court also recalled that evidence that Mr. Morgan was allowed to park his airplane in one of the airport’s hangars without payment had not supported Lonesome Polecat’s theories because he had done so before Air International became involved in the airport and the space was not separately rentable in any event.