ERVIN v. MULLER, 28016-7-II (Wash.App. 7-29-2003)

No. 28016-7-IIThe Court of Appeals of Washington, Division Two.
Filed: July 29, 2003 UNPUBLISHED OPINION

Appeal from Superior Court of Mason County Docket No: 99-2-00182-0 Judgment or order under review Date filed: 10/01/2001

Counsel for Appellant(s), Wendy I. Ervin (Appearing Pro Se), Ralph L. Ervin, 51 N. Minerva Terrace Rd., Skokomish Nat, WA 98584.

Counsel for Respondent(s), Jay Allan Goldstein, Attorney at Law, 1800 Cooper Point Rd SW Ste 8, Olympia, WA 98502-1179.

HUNT, C.J.

Wendy and Ralph Ervin, joined by Gary and Christine Impett, appeal the trial court’s adverse judgment in their action to defeat Arthur Muller’s foreclosure on a residential real estate contract after the Ervins and the Impetts missed payments. The Ervins argue that (1) their real estate contract payments were not in arrears and that Muller’s books were in error; (2) the contract provision that increased the principal to cover their missed payments was unconscionable; (3) the trial court should have ruled the contract illegal because it resulted in increasing indebtedness; (4) the contract violated the Truth in Lending Act[1] and the Consumer Protection Act;[2] (5) the interest rate was usurious; and (6) the trial court’s Dead Man’s Statute[3] evidentiary rulings were in error. We hold otherwise and affirm.

FACTS I. Real Estate Contract
On September 26, 1978, Arthur Muller sold a house to Kenneth and Cheryn Ray using a standard form real estate contract (Contract). This Contract included the following terms: (1) $37,500 purchase price; (2) $315.00 monthly payments; (3) 9.5 percent annual interest; and (4) tax and insurance to be paid by the Rays. The Contract also provided:

(9) In case the purchaser fails to make any payment herein provided or to maintain insurance, as herein required, the seller may make such payment or effect such insurance, and any amounts so paid by the seller, together with interest at the rate of 10 [percent] per annum thereon from date of payment until repaid, shall be repayable by purchaser on seller’s demand, all without prejudice to any other right the seller might have by reason of such default.

Exhibit (Ex.) 52.

On February 4, 1982, Gary and Christine Impett assumed this Contract from the Rays. The outstanding balance was $36,942.45. The next year, the Impetts fell behind in their payments. Although they claimed to have satisfied these missed payments by June 12, 1984,[4] shortly thereafter, they received Muller’s June 14, 1984 Notice of Intention to Declare Forfeiture and to Cancel Contract.[5]

II. Addendum to Contract
Seeking to avoid foreclosure, the Impetts and Muller executed an Addendum to the Contract on September 13, 1984. The Addendum (1) acknowledged that the Impetts had fallen behind in monthly tax and insurance payments; (2) provided that Muller would pay the Impetts’ homeowners insurance and their past-due and future taxes, which amounts Muller would add to their outstanding $39,731.72 balance[6] on the Contract; (3) raised the Impetts’ monthly payments to $450; (4) increased the annual interest rate to 12 percent; and (5) left all other provisions of the 1978 Contract in effect. The Impetts claim that annual taxes and insurance, to be paid by Muller under the Addendum, were expected to remain less than $500. The Impetts continued to miss payments.[7]

III. Transfer of Property
In 1991 or 1992, Wendy Ervin traded houses with her brother, Gary Impett, who issued the Ervins a quit claim deed to the Contract property on January 3, 1993. The Ervins began making the Contract payments.

In March 1992, Muller wrote Impett and the Ervins that missed payments, taxes, and insurance costs had increased the principal balance such that $450 payments could not pay the monthly interest. The parties agreed to increase the monthly payments to $500. Since 1991, the Ervins have missed 13 payments.[8]

Muller accounted for these payments by (1) calculating the monthly interest on the principal balance; (2) attributing payments first to interest and then to principal; and then (3) adding any unpaid interest or principal back to the principal balance. Thus, if one month’s interest was not paid in full, the next month’s interest calculation would include additional interest on the previously unpaid interest, thereby `compounding’ the interest, increasing the effective interest rate, and sometimes increasing the principal balance.[9]

Consequently, there were many months in which the Ervins’ payments did not cover the interest and any unpaid interest was added to the principal balance. As a result, the principal balance in September 2001 was $34,045.46, only $2,436.39 less than the balance 18 years earlier.[10]

IV. Lawsuit
In March 1999, the Ervins sued Muller, alleging (1) fraud; (2) violation of the rule against perpetuities; (3) usury; (4) conversion; (5) breach of contract; (6) waste; and (7) violation of the Truth in Lending Act (TILA). The trial court rejected each of these claims, entered judgment for Muller, and awarded attorney fees and costs of over $87,000 to Muller as provided in the Contract. The Ervins appeal.

ANALYSIS I. Failure To Follow Appellate Rules
Muller asks us to dismiss the Ervins’ appeal because Wendy Ervin’s pro se Appellant’s Brief violates several Rules of Appellate Procedure (RAP):

(1) RAP 10.3(a)(3) (no statement of issues); (2) RAP 10.3(a)(5) (argument does not trace the issues); (3) RAP 10.3(a)(5) (argument does not cite legal authority or record); (4) RAP 9.6(b)(1)(E) (findings of fact or conclusions of law not designated in clerk’s papers); (5) RAP 10.3(g) (no assignment of error for each allegedly improper finding of fact); and (6) RAP 9.5(a)(1) (no verbatim report of proceedings forwarded to opposing party).

Wendy Ervin did fail to designate the Findings of Fact as part of the record on appeal. RAP 9.6(b)(1)(E). She also failed to provide the Report of Proceedings to Muller.[11] RAP 9.5(a)(1). In the argument section of her brief, Ervin refers frequently and generally to her 51-page Appendix to support her legal and factual claims instead of providing the required specific cite to a statute, court case, or record page. RAP 10.3(a)(5). Her brief continues for paragraphs or pages without citing the record at all, and often when she does refer to the record, she provides no page numbers to identify which of the 690 pages of the report of proceedings support her assertion.

Pro se litigants are expected to comply with the RAPs. State Farm Mut. Auto. Ins. Co. v. Avery, 114 Wn. App. 299, 310, 57 P.3d 300 (2002). Nonetheless, we may address legal and factual issues that are improperly briefed when the basis for the claim is apparent. State v. Young, 89 Wn.2d 613, 625, 574 P.2d 1171 (1978) (quoting DeHear v. Seattle Post-Intelligencer, 60 Wn.2d 122, 126, 372 P.2d 193 (1962) (basis for assigned error `apparent without further research.’)) Such is the case to some extent here.[12] For example, Ervin’s Argument headings, which she frames as issues, substantially correlate with her assignments of error; thus, the general grounds for her several challenges to the Contract, though not fully supported, are apparent.

Other of Ervin’s bases for her claims, however, are so lacking in both legal and factual support that we cannot consider them. Because Ervin’s briefing is insufficient and she presents no tenable basis for claims not apparent to us, `justice demands’ that we dismiss the following claims on appeal:

(1) The `Addendum was . . . `a Perpetuity” that resulted in a `steadily increasing indebtedness’ in violation of the `Uniform Statutory Rule Against Perpetuities.’

Ervin appears to assume that a contract that will never pay off under its minimal payment terms (thereby never allowing title to pass) is a wrongful `perpetuity’ under Washington’s common law rule[13] against perpetuities. But Ervin cites no authority for this proposition, and we find none.[14] (2) The Addendum was not an `arms-length’ contract.

Ervin appears to assume that the original purchasers, the Rays, were the only party with whom Muller could negotiate an arms-length contract. Not only is her argument unclear, but she neither cites to the record nor presents a legal argument explaining when a real estate contract is not at arms-length. (3) Muller had a `fiduciary relationship’ with Ervin that required `disclosure of all the relevant elements of the’ Addendum.

Ervin provides legal citations to support her contention that all lenders bear at least a `quasi-fiduciary’ relationship to borrowers. But this is not the law: `The general rule in Washington is that a lender is not a fiduciary of its borrower; a special relationship must develop between a lender and a borrower before a fiduciary duty exists.’ Miller v. U.S. Bank of Wash., 72 Wn. App. 416, 426-27, 865 P.2d 536 (1994). Ervin neither explains what constitutes a `special relationship’ nor includes citations to the record to show substantial evidence of a `special relationship’ between the parties here giving rise to a fiduciary duty. (4) Barring testimony relating to statements of a deceased party (with whom Muller executed the Addendum contract) was `reversible error’ because `the Dead Man Statute has been `condemned’ in 1947[,] termed a `relic’ in 1907 and overruled in a case on point in 1878.’

RCW 5.60.030, the Dead Man Statute, is current and valid statutory law in the State of Washington. Ervin cites no cases that question the continuing validity of this statute. (5) `The court consistently made rulings that evidence was hearsay without regard to’ the `Business Records as Evidence Act,’ RCW 5.45.020, which allows certain `evidence’ relating to corporate `activities.’

Again, without appropriate citations to the record, it is unclear what hearsay evidence Ervin wants included; therefore, we cannot evaluate its admissibility or whether the trial court abused its discretion. (6) Muller’s accounting expert was improperly `allowed to testify’ critically of Ervin’s expert’s `analysis,’ which then was `not in evidence.’

Again, this argument is unclear and lacks supporting citation to the record or law. (7) Ervin `properly authenticated’ the `Articles of Incorporation and Articles of Dissolution’ for Muller’s prior company.

Ervin provides no citation to the law, and her apparent quotations from the record lack page numbers. Moreover, Ervin does not explain why she needs this evidence to show that Muller allowed Impett to `rely on the idea that he was protected by the law in signing the Addendum.’ Br. of App. 49.

Accordingly, we confine our discussion to Ervin’s primary challenge to the legality and enforceability of the Contract as modified by the Addendum.

II. Compound Interest
Ervin essentially argues that (1) the Contract does not allow compounding of interest; (2) Muller’s compounding interest has caused the interest to exceed the contractual limit of 12 percent per annum; (3) even if the Contract allowed compounding of interest, Muller did not invoke the relevant Contract provision; and (4) even if Muller did invoke a Contract provision allowing compound interest, he compounded interest improperly because he did not account for Ervin’s late payments as a `second indebtedness,’ separate from the original principal balance. Interpreting the rights and duties under a contract is generally a question of law, which we review de novo. Johnson v. Yousoofian, 84 Wn. App. 755, 760, 930 P.2d 921 (1996), review denied, 132 Wn.2d 1006 (1997). Contrary to Ervin’s assertion, the original real estate Contract, paragraph nine, allows compound interest:

(9) In case the purchaser fails to make any payment herein provided or to maintain insurance, as herein required, the seller may make such payment or effect such insurance, and any amounts so paid by the seller, together with interest at the rate of 10 [percent] per annum thereon from date of payment until repaid, shall be repayable by purchaser on seller’s demand, all without prejudice to any other right the seller might have by reason of such default.

Ex. 52 (emphasis added).

A plain reading of this Contract provision is that if the `purchaser fails to make any payment,’ including insurance or monthly interest, `the seller may make such payment’ and immediately start charging interest thereon.[15] This provision clearly allowed Muller to charge interest on accumulated unpaid interest. We disagree with Ervin that the language `seller may make such payment’ required Muller to invoke this provision expressly before using it; she points to no Contract language so requiring.

Muller concedes that he should have separately accounted for the missed payments and then charged interest on that separate account.[16] But, as the trial court found, this technical mistake appears to have been harmless in that a separate accounting would not have changed the resulting balance that Ervin owed. Thus, Ervin fails to show that the trial court erred in rejecting her compound-interest theory of recovery.

III. Usury
Ervin also argues that the Addendum’s interest rate was usurious because (1) the Contract did not expressly allow interest to exceed 12 percent; (2) when interest was compounded, the effective interest rate exceeded the statutory maximum of 12 percent; (3) on the face of the Addendum, no payment could ever reduce the principal; and (4) the Contract and Addendum here differ from the contract in Blake v. Yount, 42 Wn. 101, 84 P. 625 (1906).[17] Essentially, Ervin argues that, since the Addendum’s interest rate was usurious, the terms of the 1978 Contract govern;[18] thus, the principal balance should have been paid off around December 1994 or January 1995, even though the `loan balance for missed payments’ would have continued until November 1996.

Muller responds that (1) the Contract and Addendum provided for 10 and 12 percent interest rates, respectively, compounded in the event of nonpayment; (2) usury statutes do not apply to private real estate contracts executed before 1981; (3) the Contract and Addendum were not usurious on their faces; (4) Ervin has failed to produce evidence of intent to collect a usurious interest rate; (5) the usury statute allows interest rates on contracts entered into in 1984 to be as high as 15.45 percent, which Ervin has not shown Muller to have exceeded; and (6) contrary to Ervin’s contention, Blake v. Yount held that charging new interest on past due unpaid interest is not usury.

Generally, for an interest rate to be usurious, it must be so at the inception of the contract. Thweatt v. Hommel, 67 Wn. App. 135, 143, 834 P.2d 1058, review denied, 120 Wn.2d 1016 (1992). Where usury is not apparent on the face of the contract, the party alleging usury has the burden of proof. Durias v. Boswell, 58 Wn. App. 100, 105, 791 P.2d 282
(1990).

In order to prove usury here, Ervin had to show (1) that the Contract/Addendum exacted a profit greater than that allowed by law, and (2) that Muller intentionally acted in such a way that violated the usury statute. See Lincoln v. Transamerica Inv. Corp., 89 Wn.2d 571, 577, 573 P.2d 1316 (1978). As for the `intent’ prong, Ervin need not prove that Muller intended to violate the usury laws, but only that he entered into a transaction (which turned out to be usurious) intentionally, rather than mistakenly or inadvertently. See Metro Hauling, Inc. v. Daffern, 44 Wn. App. 719, 721, 723 P.2d 32 (1986). Moreover, provisions for interest rates that exceed the legal rate are not usurious if the parties acted in good faith and did not intend to evade the usury law, e.g., clauses charging additional interest on late payments to induce prompt payment. Metro Hauling, 44 Wn. App. at 723.

A. Addendum

The Addendum here provided that (1) the principal balance was $39,731.72; (2) the annual interest rate was 12 percent; (3) the Ervins’ monthly payments to Muller were $450; and (4) the Lender would pay taxes and insurance. Thus, under the Addendum, out of the Ervins’ $450 monthly payments, $397.32 applied to interest (i.e., one percent of the principal balance) and the remaining $52.68 applied to taxes and insurance, which, if timely paid, would have more than covered taxes and insurance. Thus, on its face, the Addendum was not usurious because it allowed some of the Ervins’ monthly payments to apply toward the principal and to build equity in the house.

B. Accounting Errors

Ervin argues that, aside from the Addendum provisions, Muller made accounting errors resulting in his ledgers listing a higher beginning balance of $41,279.94. The trial court found such mathematical errors. But these errors did not exist at the Addendum’s inception; therefore, they were irrelevant to the Addendum’s provisions, and they do not show usury.

C. Legal Interest Rate Limit

Ervin contends that the trial court had insufficient evidence on which to decide that Muller exacted a rate of interest higher than authorized by law. Ervin asserts that (1) the Addendum set the maximum rate of interest at 12 percent; and (2) even if the 15.45 percent rate applied, Muller exceeded this rate. We disagree.

As we explained above, although the Addendum set a 12 percent standard interest rate, it did not eliminate the penalty provision of paragraph 9 in the 1978 Contract, which allowed compound interest resulting in an effective rate exceeding 12 percent. Compounding interest is permissible if provided by statute or agreed to by the parties to the contract. Caruso v. Local 690, Int’l Bhd. of Teamsters, 50 Wn. App. 688, 689, 749 P.2d 1304 (1988). Thus, contrary to Ervin’s assertion, Muller did not exact a rate of interest higher than the Contract authorized.

Furthermore, Ervin misconstrues the test for usury, which turns on exaction of interest exceeding the rate authorized by law, not by the contract. See, e.g., Lincoln, 89 Wn.2d at 577. RCW 19.52.020(1) establishes the highest interest rate authorized by law:

Any rate of interest shall be legal so long as the rate of interest does not exceed the higher of: (a) Twelve percent per annum; or (b) four percentage points above the equivalent coupon issue yield (as published by the Board of Governors of the Federal Reserve System) of the average bill rate for twenty-six week treasury bills . . .

Ervin has not assigned error to the trial court’s finding that the highest legal rate of interest was 15.45 percent in September 1984. Thus, in order to establish usury, Ervin must show that Muller exacted interest in excess of this statutory limit. This she has not done.

D. Effective Interest Rate Charged

Ervin argued to the trial court that the effective interest rate here exceeded 15.45 percent.[19] But she neither briefs the standard of review nor specifically challenges the trial court’s findings relating to interest rates.

The issue of what interest rate Muller actually charged resembles a question of fact, which we generally review for substantial evidence. Pilcher v. State, 112 Wn. App. 428, 435, 49 P.3d 947 (2002), review denied, 149 Wn.2d 1004 (2003). Here, sufficient evidence supports the trial court’s conclusion that the interest rate did not exceed 15.45 percent.

Ervin’s expert testified that during the 18-year period when Impett/Ervin paid on the Contract, the effective interest rate exceeded 15.45 percent only in the month of November 1984. But this testimony was inconsistent. Compare Report of Proceedings (RP) at 448 (16.62 percent) with Ex. 74 (16.57 percent). Moreover, there is substantial evidence in the record supporting the trial court’s distrust of Ervin’s expert and, thus, the trial court’s finding that Ervin failed to carry the burden of proving usury.[20]

E. Intent

Ervin appears to argue that computational errors revealed Muller’s intent to violate the usury laws. But the trial court found this `mathematical error,’ Clerk’s Papers (CP) at 343, Finding of Fact P, `not to have shown an intention by defendant MULLER to violate the law against usury,’ CP at 344, Conclusion of Law A.3. We disagree with Ervin and affirm the trial court; any computational errors in Muller’s hand-kept ledgers occurred after signing the 1978 Contract and the 1984 Addendum and, therefore, do not show an intent by Muller to act in a way that violated the usury laws.

IV. Fraud
Similarly, Ervin argues that the Addendum was fraudulent because (1) the parties entered into it to cure past due payments that led to the foreclosure, but the foreclosure notice fraudulently included amounts that she had already paid on the arrearage; and (2) Muller fraudulently added amounts representing the paid arrearage back into her owed balance. Muller responds, essentially, that Ervin’s complaints concern minor accounting errors and do not show fraud.

A party alleging fraud must prove the following nine elements by clear, cogent, and convincing evidence:

(1) A representation of an existing fact, (2) its materiality, (3) its falsity, (4) the speaker’s knowledge of its falsity, (5) his intent that it shall be acted upon by the person to whom it is made, (6) ignorance of its falsity on the part of the person to whom the representation is addressed, (7) the latter’s reliance on the truth of the representation, (8) his right to rely upon it, and (9) his consequent damage.

Michielli v. U.S. Mortgage Co., 58 Wn.2d 221, 225-26, 361 P.2d 758 (1961) (quoting Haagen v. Landeis, 56 Wn.2d 289, 291-92, 352 P.2d 636 (1960)).

The trial court must find that each element is highly probable, which we review for substantial supporting evidence. Douglas Northwest, Inc. v. Bill O’Brien Sons Constr., Inc., 64 Wn. App. 661, 678, 828 P.2d 565 (1992).

Again, Ervin does not show how Muller’s accounting errors, made after the parties signed the Addendum, could have fraudulently induced execution of the Addendum. Thus, these errors were not `existing facts’ represented to induce the agreement. Michielli, 58 Wn.2d at 225.

There is also substantial evidence to show that any errors in the foreclosure notice were unintentional. The notice stated that the total amount necessary to bring the contract current as of July 29, 1984, was $2,194.11, including (1) $945 for delinquent monthly payments for March, April, and May 1984; (2) $89 for an insurance premium; (3) $315 for the regular payment for June 1984; and (4) $735.11 in taxes and interest for 1982 and 1984. Ervin acknowledges that these payments referenced in the foreclosure were late and that still other payments remained outstanding, thus tending to show that Muller did not contrive these debts in order to foreclose.[21]

Similarly, it is not highly probable that the Ervins were `ignorant of the falsity’ of the arrearage amounts.[22] The claimed arrearage was comparatively recent; for example, June’s was within two days of the foreclosure notice.

V. Unconscionability
Ervin also argues that the Addendum was unconscionable because (1) substantively, it was one sided and overly harsh in that no payments would reduce the loan principal; and (2) procedurally, Ervin was given no information and had no alternative but to agree to a loan that would never pay off. As we explained earlier, if the Ervins had made timely payments, the Addendum’s terms would have reduced principal and eventually paid off the debt. See III, supra. Consequently, Ervin has failed to show that the Addendum was unconscionable.

VI. Truth in Lending Act
The trial court found, `The Truth in Lending Act[23] does not apply, and Plaintiffs have not shown that Defendant MULLER was a ‘[creditor]’ as defined in that Act.’ SCP at 345. Ervin argues that (1) Muller is a `creditor’ under the Truth in Lending Act (TILA); and (2) the TILA requires certain disclosures upon entering a `residential mortgage transaction.’ Muller counters that he is not a `creditor’ under the statute.

The TILA provides,

The term `creditor’ refers only to a person who both (1) regularly extends, whether in connection with loans, sales of property or services, or otherwise, consumer credit which is payable by agreement in more than four installments or for which the payment of a finance charge is or may be required, and (2) is the person to whom the debt arising from the consumer credit transaction is initially payable on the face of the evidence of indebtedness or, if there is no such evidence of indebtedness, by agreement. . . . Any person who originates 2 or more mortgages referred to in subsection (aa) of this section in any 12-month period or any person who originates 1 or more such mortgages through a mortgage broker shall be considered to be a creditor for purposes of this subchapter.

15 U.S.C. § 1602(f). This statute essentially establishes two tests for a creditor, one general and the other specific to mortgage-lenders.

Muller focuses on the latter test to argue that he is not a `creditor’ under the TILA. He reasons that (1) to be a `creditor,’ one must originate `mortgages referred to in subsection (aa)’ of 15 U.S.C. § 1602(f); (2) 15 U.S.C. § 1602(aa)(1) specifically excludes `residential mortgage transactions’; and (3) `residential mortgage transactions’ are mortgages `against the consumer’s dwelling to finance the acquisition or initial construction of such dwelling,’15 U.S.C. § 1602(w). Because the Impett/Ervin mortgage was clearly made for the purpose of financing the home’s original acquisition (as compared to providing a home equity line of credit), Muller concludes that he is, therefore, not a `creditor’ regulated by the TILA.

But the specific mortgage-lender test for a `creditor’ was added to the TILA by a 1994 amendment, well after the execution of either the original Contract or the Addendum. Therefore, the proper test is: (1) Does Muller `regularly extend credit’; and (2) was Muller named on the face of the instrument as the party to whom installment debts were initially payable?

Ervin has failed to present a supportable TILA claim both to the trial court and to us. Ervin apparently did not argue to the trial court that Muller `regularly extended credit,’ which the regulations define as having extended credit `more than 5 times for transactions secured by a dwelling’ in either the preceding or current calendar year. 12 C.F.R. § 226.2(17)(i) n. 3. And Ervin does not provide citations to the record to support her argument on appeal that the trial court erred because `Muller’s activities fit both parts of the definition for creditor; he entered into residential mortgage transactions payable to himself in more than 4 payments.’ Br. of App. 15. Again, we generally do not consider arguments raised for the first time on appeal. RAP 2.5(a). Moreover, we do not consider arguments unsupported by appropriate citations to the record. RAP 10.3(a)(5).

Similarly, the Ervins argued to the trial court that Muller failed to meet the disclosure requirements applicable to creditors entering into initial residential mortgage transactions. 12 C.F.R. § 226.18. But Wendy Ervin now raises for the first time on appeal that the disclosure requirements apply to creditors who later `expressly agree in writing with a subsequent consumer to accept that consumer as a primary obligor on an existing residential mortgage transaction.’ 12 C.F.R. § 226.20(b).[24] Again, we generally do not consider arguments raised for the first time on appeal. RAP 2.5(a).

Ervin has failed to show, therefore, that the trial court erred in concluding that the TILA did not apply.

VII. Attorney Fees
A. At Trial

The trial court awarded Muller $83,720.57 in attorney fees under Paragraph 11 of the Contract, which allows the seller to collect reasonable attorney fees needed to enforce the Contract.

Ervin argues that Muller was not entitled to these attorney fees because she `proved much of her case’ concerning the non-enforceability of the Contract below, thereby defeating Muller’s entitlement to attorney fees under Paragraph 11 of the Contract. In support of this argument, Ervin asserts that (1) one of Muller’s preliminary judgment drafts listed a figure for the amount owing on the Contract, which Muller later reduced in a draft that the trial court signed and entered as the final judgment; and (2) the final judgment amount was $2,443.03 less than the amount Muller had claimed was the principal balance before trial.

Ervin’s first argument fails. The amount listed in the draft judgment has no bearing on whether the trial court found that Muller prevailed below.

But her second argument has some merit. Muller concedes that the claimed principal balance was substantially overstated when trial began and that, had Ervin objected to the attorney fees when the judgment was entered below, we could consider her as having prevailed in a way that would justify a fee reduction. Because Muller raised Ervin’s failure to object for the first time at oral argument and because he made no reference to the record, we are unable to evaluate this claim. RAP 2.5(a), 10.3(a)(5).[25]

Accordingly, we remand to the trial court for a reduction of the attorney fee award to reflect that Muller did not prevail in defending the amount of the initial principal balance.[26]

B. On Appeal

Muller also seeks attorney fees on appeal under paragraph 9 of the Contract. Because he has substantially prevailed on appeal, he is entitled to attorney fees upon compliance with RAP 18.1.

Affirmed.

A majority of the panel having determined that this opinion will not be printed in the Washington Appellate Reports, but will be filed for public record pursuant to RCW 2.06.040, it is so ordered.

ARMSTRONG and MORGAN, JJ., concur.