CAMPBELL v. OAKLAND, 162 Wn. App. 1053 (2011)

No. 29265-7-III.The Court of Appeals of Washington, Division Three.
Filed: July 19, 2011. UNPUBLISHED OPINION.

Appeal from a judgment of the Superior Court for Kittitas County, No. 09-2-00530-6, Scott R. Sparks, J., entered July 2, 2010.

Affirmed by unpublished opinion per Korsmo, J., concurred in by Kulik, C.J., and Brown, J.

KORSMO, J.

This appeal results from the sale of real estate near Roslyn. When the market declined, the purchasers were unable to refinance a balloon payment and the sellers declined to modify the agreement. The purchasers sought to restrain a forfeiture of the property. The trial court subsequently granted summary judgment in favor of the sellers. We affirm.

FACTS
The sellers, Donald and Cherris Oakland, owned a 2.18 acre parcel near the intersection of Highway 903 and Bullfrog Road in Kittitas County. Robert Sukert owned adjoining property which he had successfully rezoned from Suburban to Commercial. He entered into a real estate contract with the Oaklands in February 2007. The following month he rescinded his offer.

The Oaklands hired real estate agent Paul Ingram to market the property for them in April 2007. He prepared flyers indicating that the property was zoned Suburban and Suburban II, with the potential to be rezoned Commercial. Douglas and Michelle Campbell, as well as Mr. Sukert, obtained copies of the flyer. The flyers also carried a disclaimer stating: “information from reliable sources, but not guaranteed.”

The county adopted a new countywide zoning ordinance on July 19, 2007 that had the effect of rezoning the property to Rural Residential. This rezone changed the property density requirements from one dwelling per acre to one dwelling per five acres. A sunset provision granted property owners one year to subdivide existing Suburban properties into one acre units.

The Campbells and Sukert (buyers) reached an agreement with the Oaklands to purchase the property in September 2007. They made a down payment and were required to make monthly payments before a balloon payment became due in 2009. The buyers were unaware that the zoning had changed in July. Prior to closing, they checked the zoning with Kittitas County authorities. They were shown a plat map listing the property as Suburban. The buyers hoped to rezone the property to Commercial. If that effort failed, they intended to divide the land into two parcels.

The buyers learned in February 2008 that the land had been rezoned. They did not seek to subdivide the land in accordance with the sunset clause. They did seek to rezone the land to Commercial, but later withdrew their request on November 5, 2008. Throughout the contract period, their monthly payments were nearly always late. The buyers approached the sellers in February 2009 about reducing the balloon payment. The sellers declined to renegotiate. The sellers recorded a notice of intent to forfeit real estate contract on July 22, 2009.

The buyers responded by filing suit to restrain the forfeiture. They asked the court to either permit specific performance or to rescind the contract. They filed a $265,000 cash bond in support of their specific performance claim. The buyers ultimately withdrew the specific performance claim. Instead, they sought rescission of the contract under a theory of misrepresentation, contending that they would not have purchased the property if they had known about the rezone to Rural Residential. The sellers sought summary judgment. The court agreed with that motion, dismissed the rescission claim, and awarded attorney fees and costs to the sellers under the real estate contract.

Prior to entry of the final order, the buyers moved to have the court set a supersedeas amount to stay enforcement of the judgment pending appeal. The sellers argued that it was premature to set a supersedeas because no appeal had yet been filed. The trial court declined to set a supersedeas amount. The court did enter its final order. That document permitted the sellers immediately to obtain their costs and attorney fees from the cash bond. The clerk transferred the funds immediately.

The buyers soon thereafter filed a notice of appeal. They did not further seek to supersede the judgment.

ANALYSIS
The primary issue in this appeal is the summary judgment ruling on the rescission claim. The buyers also challenge the award of attorney fees and the clerk’s immediate disbursal of those funds. The sellers seek attorney fees for this action. We will address each issue in turn.

Summary Judgment

The standard of review for cases resolved on summary judgment is a matter of well-settled law. A reviewing court also considers those matters de novo, considering the same evidence presented to the trial court. Lybbert v. Grant County, 141 Wn.2d 29, 34, 1 P.3d 1124 (2000). The facts, and all reasonable inferences to be drawn from them, are viewed in the light most favorable to the nonmoving party Id. If there is no genuine issue of material fact, summary judgment will be granted if the moving party is entitled to judgment as a matter of law. Id. Because the trial court does not resolve factual disputes, it does not enter findings in relation to a summary judgment. Duckworth v. City of Bonney Lake, 91 Wn.2d 19, 21-22, 586 P.2d 860
(1978).

The buyers sought rescission under a theory of innocent misrepresentation based on the flyers declaring that the zoning was Suburban. That theory required them to establish that (1) the misrepresentation was material; (2) they relied upon the misrepresentation; and (3) their reliance was justified Skagit State Bank v. Rasmussen, 109 Wn.2d 377, 384-385, 745 P.2d 37 (1987).[1] Because we must view the facts in the light most favorable to the buyers as the nonmoving party, we will assume that the flyers misrepresented the zoning.[2] Nonetheless, we conclude that the buyers have not satisfied the final two prongs of the innocent misrepresentation standard.

The parties debate whether the misrepresentation was material. The buyers have presented sufficient evidence to raise questions of fact on that issue. The zoning of the land was important to them and they did make efforts to confirm the land’s zoning designation. Thus, the materiality prong is satisfied.

The second prong is whether the buyers relied upon the misrepresentation. They did not. The buyers checked the zoning status with the county; they did not take the flyers at face value. If they relied upon any zoning information at all, it was the county’s information that mistakenly identified the zoning as Suburban.

The final prong is whether any reliance was justified. The sellers also failed to satisfy this prong. The flyers expressly disclaimed reliability. The real estate contract likewise confirmed that the sellers made no representation about uses of the property. The buyers also knew that the land was not zoned Commercial and that they would have to obtain a rezoning. These were not unsophisticated purchasers. The record does not reflect any reason why rezoning from Rural Residential to Commercial would be more difficult than rezoning from Suburban to Commercial, particularly where the buyers already owned an adjoining parcel that had successfully been rezoned to Commercial. Reliance on the flyer as some sort of guarantee of likelihood of rezoning success was not justified in light of all of the other steps necessary to reach Commercial zoning status.

The buyers failed to establish two elements of their innocent misrepresentation claim. The trial court correctly granted summary judgment to the sellers.

Bond Issues

The buyers raise three arguments related to the bond they filed in support of the motion to restrain the sale. First, they argue that the trial court erred by denying their motion to reduce the bond once they dropped the specific performance claim. Next they argue that the court erred in not setting a supersedeas amount. Finally, they argue the trial court erred in permitting the buyers to immediately collect against the bond. We will briefly discuss each claim because the errors were either moot or harmless.

As to the initial claim that the trial court should have reduced the bond after the specific performance claim was withdrawn, the buyers concede that the issue is moot. A claim is moot when an appellate court cannot grant effective relief E.g., In re Det. of C.M., 148 Wn. App. 111, 115, 197 P.3d 1233, review denied, 166 Wn.2d 1012 (2009). Even if we agreed with the argument, about which we express no opinion, we could not grant any effective relief. The claim is moot and we will not address it.

The next contention is a claim that the trial court erred in failing to set the supersedeas amount when requested. We have some sympathy for this claim. Respondents contend that the request was premature because no notice of appeal had been filed. It is the filing of the bond, not the determination of its amount, that stays enforcement of a civil judgment. If the trial court knew the amount of the judgment it was ordering, it had sufficient evidence to consider the request. The amount of the bond will oftentimes help parties determine whether or not to appeal because it determines whether or not they can stay the judgment. A party that cannot afford to stay the judgment may decline to pursue an appeal because the potential remedy after the judgment is enforced is unattractive. That information should be available up front rather than after the decision to appeal has been made.

Nonetheless, the buyers receive no relief on this issue because they have not prevailed. They were not harmed by the ruling.

Their final argument is in the same position. They rightly point out that CR 62(a) prohibits enforcement of a civil judgment until 10 days after entry of the final order or 14 days after a notice of appeal has been filed. Respondents present no authority allowing the judgment to be enforced immediately in derogation of the rule. Once again, however, the error in this regard is harmless since the buyers have not prevailed in this appeal.

The issues relating to the bond are either moot or constitute harmless error. They do not present grounds for affording the buyers any relief.

Attorney Fees and Costs

Finally, the buyers contend that the trial court erred in granting attorney fees and costs to the respondents. They also challenge the amount of fees and costs ordered. The sellers request attorney fees on appeal. Because the contract provides for attorney fees and the sellers prevailed in the superior court and this court, they are entitled to fees in both proceedings. We also discern no error in the amounts set at trial.

Attorney fees may be awarded when there is a recognized basis in statute, contract, or equity to do so. E.g. Mellor v. Chamberlin, 100 Wn.2d 643, 649, 673 P.2d 610 (1983). The real estate contract at issue here provided for attorney fees to the party prevailing in litigation arising out of the contract. Clerk’s Papers at 177. Having prevailed against the misrepresentation claim, the sellers were entitled to their attorney fees under the contract.[3] The court did not err.

Having prevailed in this court, the sellers are likewise entitled to attorney fees in this court. Provided that sellers comply with RAP 18.1, a commissioner of this court will award attorney fees for this action.

In addition to challenging the decision to award attorney fees, the buyers also challenge the amount of the award. An attorney fee award is reviewed for manifest abuse of discretion Chuong Van Pham v. City of Seattle, Seattle City Light, 159 Wn.2d 527, 538, 151 P.3d 976 (2007). Discretion is abused when it is exercised on untenable grounds or for untenable reasons. Id. The lodestar method is the preferred method for determining the amount of attorney fees to award. Id. The trial court determines the reasonable number of hours spent by counsel, excluding duplicitous or wasteful efforts, and multiples that time by a reasonable rate to set an award. Id.

The record reflects that the trial court scrupulously followed that formula here. While the buyers challenge the trial court’s calculation, alleging that there was unnecessary or duplicative work included, they cite to no specific errors. Our review of the record indicates that the trial court did not accept all of the requested fees, but did cut unnecessary services in awarding the fees. The award is based on tenable grounds. There was no abuse of discretion.

The buyers also challenge the costs assessed by the trial court. We also review cost rulings for abuse of discretion Citizens for Clean Air v. City of Spokane, 114 Wn.2d 20, 40-41, 785 P.2d 447 (1990). The buyers do challenge specific costs related to service and depositions. Service costs are recoverable. RCW 4.84.010(2). Although RCW 4.84.010(7) only permits recovery of pro rata
deposition costs used at trial, our case law holds that the costs of depositions used in summary judgment proceedings can be recovered. Herried v. Pierce County Pub. Transp. Ben. Auth. Corp., 90 Wn. App. 468, 476, 957 P.2d 767, review denied, 136 Wn.2d 1005 (1998) Gearheart v. Shelton, 23 Wn. App. 292, 297, 595 P.2d 67, review denied, 92 Wn.2d 1023 (1979). Moreover, the real estate sales contract also provided for costs. Under these circumstances, we see no abuse of the court’s considerable discretion in its cost award.

The judgment is affirmed.

A 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.

KULIK, C.J. and BROWN, J., concur.

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