No. 49307-8-IThe Court of Appeals of Washington, Division One.
Filed: November 25, 2002 DO NOT CITE. SEE RAP 10.4(h). UNPUBLISHED OPINION
Appeal from Superior Court of King County, No. 002151268, Hon. Mary Yu, September 21, 2001, Judgment or order under review.
Counsel for Appellant(s), Edward P. Weigelt Jr., Attorney At Law, P.O. Box 2299, Lynnwood, WA 98036-2299.
Philip A. Talmadge, Talmadge Stockmeyer, 18010 Southcenter Parkway, Tukwila, WA 98188.
Counsel for Respondent(s), Megan O. Masonholder, 2707 Colby Ave #1001, P.O. Box 5397, Everett, WA 98201.
Lars E. Neste, 5224 Wilson Ave S, Seattle, WA 98118.
Michael T. Schein, Reed Longyear Malnati Ahrens Strickland, 801 2nd Ave Ste 1415, Seattle, WA 98104.
BECKER, C.J.
Appellant Brian O’Neill failed to sign closing documents before the specified closing time in a real estate purchase and sale agreement. As a result, the sellers refused to close. They retained a non-refundable deposit that O’Neill had earlier paid in exchange for an extension of the closing date. O’Neill’s claims against the sellers and the real estate agent were dismissed on summary judgment. Finding no evidence that the failure to close was caused by anything except O’Neill’s own failure to sign the documents on time, we affirm the dismissal.
In October 1997, respondent Michael Spano entered into a listing agreement with respondent James Hartford, a real estate agent at Windermere Real Estate, for the sale of a vacant lot in Lake Forest Park. Spano was in the process of short platting the property into two lots. One lot had a house and was listed for $100,000. The other lot was vacant and was listed for $85,000. Appellant Brian O’Neill, a businessman who has had considerable experience in real estate transactions, offered to purchase the vacant lot for $83,000 in July 1999. Spano accepted the offer. They entered into a purchase and sale agreement. Hartford agreed to act as a dual agent for the transaction. O’Neill paid $2,000 in earnest money.
The parties recognized that there might be difficulty in obtaining the necessary permits for O’Neill to build on the property. As a result, the parties executed an addendum in which they agreed to extend the closing date by 30 days.
In October 1999, O’Neill sought a second extension of closing. Spano agreed to extend the closing date for another 180 days in exchange for a $25,000 non-refundable deposit. O’Neill paid Spano the $25,000. The closing date was set for April 18, 2000.
As the April 18 closing date approached, Hartford attempted to contact O’Neill through his agent to inquire about whether he was ready to close. O’Neill was out of town. On April 18, Hartford realized that the transaction would not close on time and sent a fax to both Spano and O’Neill with a proposed addendum to extend the closing date a third time.
The parties agreed to extend closing until April 28, 2000.
The first title commitment, dated April 19, 2000, incorrectly referenced Spano’s adjacent lot. However, the error in this document was discovered and it was replaced on April 21 by a corrected title commitment. On April 24, 2000, Hartford instructed Premier Escrow to open an escrow for the transaction. The closing documents were prepared by April 26. On that same day, Hartford contacted O’Neill and reminded him of the April 28 closing date and the need to sign the escrow documents. At O’Neill’s request, Hartford asked Spano to extend the closing date yet again. Spano was unwilling to do so without another non-refundable deposit, a condition O’Neill was unwilling to accept.
On April 27, Premier left a message for O’Neill to come in to sign escrow documents and deposit sufficient funds to close the transaction. On the morning of April 28, Hartford left O’Neill a voice-mail message stating that O’Neill was in danger of losing his deposits and that he had to sign escrow documents that day.
At 11:30 a.m. on April 28, O’Neill’s assistant contacted Premier. Premier warned the assistant that the closing documents needed to be signed that day, unless there was an additional extension of the closing date. Premier informed O’Neill’s assistant that the cutoff time for recording the deed in King County was 3:30 p.m., but that the title company had to have authorization to record no later than 3 p.m. At O’Neill’s request, Premier faxed the closing documents to O’Neill. O’Neill believed that there were errors in the closing documents. He asked his assistant to research the errors. According to O’Neill, his assistant found one error: the settlement statement did not credit O’Neill’s $2,000 earnest money payment toward the payoff amount. Premier corrected this error when it was pointed out, and faxed a new settlement statement to O’Neill. Meanwhile, however, O’Neill left for a doctor’s appointment without signing the closing documents. These documents included the supplemental escrow instructions incorporating the corrected title commitment, a statutory warranty deed that included the correct legal description of the property, and a tax affidavit with the correct legal description of the property.
At 2 p.m., O’Neill’s agent delivered funds to Premier for the closing. Premier immediately contacted O’Neill’s office and asked O’Neill’s assistant when O’Neill would fax the signed closing documents to Premier.
The assistant answered that O’Neill had left for a doctor’s appointment without signing the closing documents. Premier reiterated the importance of submitting the closing documents before 3 p.m., without which the transaction could not close. At 3 p.m., Premier again contacted O’Neill’s assistant and requested the signed closing documents. Premier explained that the recording cutoff was 10 minutes away. O’Neill did not fax the signed closing documents until 5:30 p.m. and the transaction failed to close.
The parties attempted to negotiate another extension, but they could not agree on the terms. Thereafter, Spano refused to return O’Neill’s $2,000 earnest money and his $25,000 deposit. O’Neill filed suit against Spano and his wife, and against Hartford and his employer Windermere. The suit also named Debra Blodgett, Premier’s escrow agent, as a defendant but that claim is not involved in this appeal. O’Neill alleged that Spano breached the purchase and sale agreement by refusing to sell the property without legal justification. He alleged that Spano and Hartford illegally retained his earnest money and deposit. He also alleged that Hartford was negligent in his role as an agent, and violated his duty of loyalty.
The defendants moved separately for summary judgment dismissal. The trial court granted the motions. O’Neill appeals the dismissal of his claims against Spano and Hartford.
When reviewing a grant of summary judgment, we engage in the same inquiry as the trial court. RAP 9.12; Harris v. Ski Park Farms, Inc., 120 Wn.2d 727, 737, 844 P.2d 1006 (1993). Summary judgment is appropriate only when, after reviewing all facts and reasonable inferences in the light most favorable to the nonmoving party and all questions of law de novo, there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. CR 56(c); Wilson v. Steinbach, 98 Wn.2d 434, 437, 656 P.2d 1030 (1982). This court considers “only evidence and issues called to the attention of the trial court.” RAP 9.12; see also Folsom v. Burger King, 135 Wn.2d 658, 663, 958 P.2d 301
(1998). Actionable negligence occurs when a party’s breach of a duty owed to another proximately causes harm. Wojcik v. Chrysler Corp., 50 Wn. App. 849, 854, 751 P.2d 854 (1988). Issues of negligence and proximate cause generally are not susceptible to summary judgment; however, such issues may be decided on summary judgment under the guidelines described above. Wojcik, 50 Wn. App. at 854.
HARTFORD AND WINDERMERE
Hartford and Windermere moved for summary judgment and asked the court to dismiss O’Neill’s claims of negligence and breach of fiduciary duty. They argued that O’Neill had “failed to identify any breach of duty on the part of Windermere or Hartford which caused his loss.” They emphasized that the sellers signed all necessary closing documents and were willing to close.
They pointed out that O’Neill had admitted in his deposition that he was fully aware of the closing date; that he was “ready to close” on that date; and that he had been notified by Hartford that a consequence of failing to close would be the forfeiture of his deposits.
In response to Hartford’s motion for summary judgment, O’Neill submitted the declaration of Gordon Stephenson, a licensed real estate broker.
Because the trial court considered the declaration and did not strike it on Hartford’s motion below, it is properly before this court on appeal. RAP 9.12.
The Stephenson declaration identified a number of alleged breaches of Hartford’s duties. However, O’Neill has not shown how these alleged breaches caused the closing to fail. Stephenson stated that in his opinion Hartford breached the applicable standard of care when he failed to order commitments for title insurance until a few days before closing. He said Hartford was negligent when he sent the transaction to escrow only three and a half days before closing, instead of allowing 30 to 60 days to clear up problems that might arise. He said it was foreseeable that there might be a problem of getting in touch with O’Neill, who was known to be often unavailable. O’Neill thus contends that the late opening of escrow caused a “panic mode environment” and imposed “needless time pressure on O’Neill”. However, O’Neill, as he stated in his deposition, was fully aware of the closing date and “ready to close” on that date. He had been notified by Hartford that a consequence of failing to close would be the forfeiture of his deposits. O’Neill has failed to show that the late opening of escrow caused him to be unready to close the transaction. Stephenson opined that Hartford was negligent when he failed to put a legal description of the property in the real estate purchase and sale agreement. O’Neill also contends that Hartford breached a duty of care when he supplied initial escrow instructions that did not have a proper legal description. However, the fact that the original purchase and sale agreement lacked a legal description is immaterial. The parties agreed that one would be added later. The correct legal description was supplied a week before closing and was used in the closing documents. Any breach related to legal descriptions, if one occurred, was not a proximate cause of the failure to close. Stephenson asserted that Hartford was negligent in failing to disclose to O’Neill the risks of dual agency; and in failing to obtain O’Neill’s written approval for that arrangement. O’Neill’s argument about dual agency is based on the statutory duty of a real estate agent to “provide a pamphlet on the law of real estate agency . . . to all parties to whom the licensee renders real estate brokerage services”. RCW 18.86.030(1)(f). O’Neill declared that he did not receive such a pamphlet from Hartford and had he known about the risks of dual agency, “I would have obtained my own agent from the outset”.
In July 1999, O’Neill signed the purchase and sale agreement and initialed each page. Page 4 of the agreement contains an agency disclosure clause that states that the agent is a dual agent representing both parties. This clause also states that `All parties acknowledge receipt of the pamphlet entitled `The Law of Real Estate Agency.”
In his deposition, O’Neill stated that he may have discussed dual agency with Hartford, but he did not recall receiving the pamphlet.
Q. Did you and [Hartford] have any discussions about who he represented in the transaction?
A. You know, I’m not trying to be vague, you know, and I’ll answer the questions as, you know, well, and as truthfully as I remember them. You know, I — we may have. We may have, you know. So . . .
Q. Do you recall Jim Hartford giving you a document called The Law of Real Estate Agency?
A. I don’t.
It was only later, in a declaration in reply to the defendants’ motions for summary judgment, that O’Neill denied receipt of any information about dual agency.
Mr. Hartford never explained to me that as a dual agent representing me and the sellers he would not be able to devote his undivided loyalty to my cause. He never told me that all my bargaining positions disclosed to him would have to be revealed to the sellers. He never gave me any written documents explaining any of these things.
When a party has given clear answers to unambiguous deposition questions which negate the existence of any genuine issue of material fact, that party cannot thereafter create such an issue with a declaration that merely contradicts, without explanation, previously given clear testimony Marshall v. AC S Inc., 56 Wn. App. 181, 185, 782 P.2d 1107 (1989). O’Neill’s deposition testimony was clear: he had no relevant memory which would permit him to deny the discussions and delivery of the pamphlet. Without O’Neill’s later self serving denial, the only evidence in the record is that he did receive the pamphlet. O’Neill’s contradictory declaration does not raise a genuine issue of material fact as to breach of duty. Moreover, even assuming that a sophisticated buyer like O’Neill would have obtained his own agent if the risks of dual agency had been pointed out to him, it is entirely speculative to assume that a different agent would have brought about a different outcome.
O’Neill argues that Hartford breached a duty of loyalty when he disclosed to Spano confidential information about O’Neill’s bargaining position. However, the record does not support this claim. O’Neill cites to a portion of his argument before the trial court that in turn references two faxes.[1] The faxes were both addressed from Hartford to O’Neill. But neither fax shows any disclosure by Hartford to Spano.
Not only has O’Neill failed to substantiate his claim that Hartford provided confidential information to Spano in breach of duty of loyalty, he has also failed to explain how such a disclosure — if it did occur — caused the closing to fail, or otherwise harmed him. Because the error in the legal description was corrected a week before the closing date, it too cannot be seen as a cause.
In short, there is no evidence that any of Hartford’s alleged breaches of duty were a proximate cause of O’Neill’s failure to sign the documents or his forfeiting of the $25,000. The court did not err in granting summary judgment in favor of Hartford and Windermere.
SPANO
The complaint alleged that Spano breached the purchase and sale agreement and unlawfully retained the earnest money and the $25,000 deposit. O’Neill argues that the trial court’s grant of summary judgment on these claims was improper. First, he contends the errors in the closing documents would have prevented Spano from closing even if O’Neill had timely signed the documents. O’Neill relies on Willener v. Sweeting, 107 Wn.2d 388, 394, 730 P.2d 45 (1986) (where a contract requires performance by both parties, a party claiming failure must establish as a factual matter that party’s own performance). O’Neill argues that Spano breached his contractual obligations under the purchase and sale agreement when the incorrect title commitment was submitted to escrow on April 19. However, the correct title commitment was incorporated into the closing documents a week before the closing deadline.
Because there was no error in the closing documents on April 28 that would have prevented Spano from closing, summary judgment on this issue was proper. O’Neill also mentions the $2,000 error regarding the amount of money to be credited to him in the settlement statement. O’Neill acknowledged in his deposition that this error was corrected on the afternoon of April 28, when there was still enough time to close. Again, because the error was corrected before the closing deadline, it did not impair Spano’s ability to perform. Furthermore, O’Neill has not identified evidence or argument by which either of these mistakes could be attributed to Spano. O’Neill also argues that a past course of dealing between the parties, in which they agreed to extensions after the closing date had passed, raised a genuine issue of material fact precluding summary judgment. In response, Spano states that this argument was raised for the first time on appeal. O’Neill does not respond to this and does not indicate where in the record this argument can be found. Because this argument was not raised below, it is not reviewable on appeal. RAP 2.5 Lindblad v. Boeing Co., 108 Wn. App. 198, 207, 31 P.3d 1 (2001). Although O’Neill did not sign the closing documents, he did timely submit a check to escrow for the full amount needed to close the transaction. He argues that his submission of the cashier’s check speaks volumes and establishes substantial performance. He takes the position that his failure to timely submit signed closing documents was not a material breach.
The doctrine of substantial performance is applied in rare instances where only minor and relatively unimportant deviations remain to accomplish full contractual performance. Taylor v. Shigaki, 84 Wn. App. 723, 729, 930 P.2d 340 (1997). O’Neill has not cited authority demonstrating that the timely signing of closing documents can be regarded as a minor detail. The purchase and sale agreement indicates that it was not a minor detail. It provides that the sale `shall’ be closed by the closing agent on the closing date. It also provides, “Time is of the essence in this Agreement.” O’Neill agreed that the $25,000 deposit would be non-refundable in the event that the transaction did not close within the agreed-upon time. It is agreed between the Seller and Buyer as follows: To extend the closing date 180 days to accommodate septic design approval. In return Buyer will pay a $25,000 (Twenty Five Thousand Dollars) direct deposit to Sellers which will be non-refundable should this transaction fail to close or credited towards Buyer’s down payment if this transaction closes within the agreed upon time. Said six-month extension to begin 10/18/99.
The fact that extensions of time were the focus of the parties’ prior negotiations about performance of the contract, and that O’Neill deposited $25,000 to be credited back to him only “if this transaction closes within the agreed upon time”, establishes that O’Neill’s failure to sign on time was a material breach. We conclude that O’Neill’s submission of the cashier’s check was not enough to establish substantial performance when he did not sign the closing documents within the agreed upon time.
Because O’Neill has not shown how Spano could be held responsible for O’Neill’s failure to timely sign the closing documents, his claim that Spano breached the agreement was properly dismissed. O’Neill’s next argument is that a trial is required to determine whether Spano unlawfully refused to refund O’Neill’s non-refundable payment of $25,000, deposited in exchange for the 180-day extension. Spano argues that the deposit was a provision for liquidated damages, enforceable under Wallace Real Estate Inv. v. Groves, 124 Wn.2d 881, 881 P.2d 1010
(1994). O’Neill contends the provision was an unenforceable penalty.
A liquidated damages provision in a real estate contract is enforceable if the liquidated sum is a reasonable preestimate of loss. Wallace Real Estate, 124 Wn.2d at 897. In Wallace, the Supreme Court concluded that a clause allowing liquidated damages of $250,000, negotiated by a sophisticated purchaser of property, was a reasonable preestimate of loss even in the absence of actual damage to the seller. Wallace, 124 Wn.2d at 894. O’Neill attempts to distinguish Wallace based on its statement that “while proof of actual damages is no longer a requirement, nevertheless, actual damages may be considered where they are so disproportionate to the estimate that to enforce the estimate would be unconscionable.” Wallace, 124 Wn.2d at 894. He contends that his deposit of $25,000 was not a reasonable preestimate of Spano’s loss because the real estate market was appreciating during the time that they entered into the agreement. Because O’Neill has not provided evidence of Spano’s actual damages, his argument that the actual damages are disproportionate to the liquidated damages is speculative, and does not raise a genuine issue of material fact. See Grimwood v. University of Puget Sound, Inc., 110 Wn.2d 355, 359-60, 753 P.2d 517 (1988). O’Neill, a sophisticated businessman with substantial experience in real estate investment, himself offered the sum of $25,000 as consideration for a six month extension of the closing date. O’Neil stated in his deposition that offering a $25,000 deposit was `no big deal to me, you know. I negotiate thousands of transactions every year; so . . . It’s not like I do five or ten, you know. I shouldn’t say thousands; but, hundreds and hundreds. . . . it’s numbers all day long, you know. And big numbers a lot of times.’ The agreed sum of $25,000 compensated Spano for the lost opportunity involved in holding the property off the market for another six months. O’Neill has pointed to no evidence from which a fact finder could determine that $25,000 was an unconscionable amount. Because the $25,000 deposit was a reasonable preestimate of loss, the trial court properly ruled on summary judgment that Spano would be allowed to keep it. O’Neill also argues that the $25,000 deposit violates the policy of the earnest money statute, RCW 64.04.005. This argument lacks merit. The deposit was clearly not earnest money. It does not fall within the scope of RCW 64.04.005.
ATTORNEY FEES
The purchase and sale agreement provides for an award of reasonable attorney fees to the prevailing party in an action brought by either the seller or buyer to enforce the terms of the agreement. The trial court awarded Spano $13,058.95 in attorney fees and costs as the prevailing party.
The record on appeal must show the trial court’s determination of reasonableness using the lodestar method of calculating fees. Mahler v. Szucs, 135 Wn.2d 398, 433-34, 957 P.2d 632 (1998). Under this methodology, a court must determine whether the attorney expended a reasonable number of hours in securing a successful recovery for the client and whether the counsel’s hourly rate was reasonable. Then the court determines the fee by multiplying the reasonable hourly rate by the reasonable number of hours incurred in obtaining the successful result Mahler, 135 Wn.2d at 433-34. To withstand appeal, a fee award must be accompanied by findings of fact and conclusions of law to establish a record adequate for review. If it is not, remand for entry of findings relating to the calculation of the awards is the proper remedy. Mahler v. Szucs, 135 Wn.2d 398, 435, 957 P.2d 632 (1998). O’Neill argues that the attorney fee award in favor of Spano must be reversed under Mahler because there are no formal findings and conclusions.
We find there is an adequate record for review, despite the lack of formal findings and conclusions. Spano submitted a declaration in support of his motion for attorney fees and costs. The declaration detailed the number of hours his two attorneys spent in securing a successful recovery and their hourly rates of $185 and $135 respectively. The attorneys declared that these hourly rates were “reasonable and consistent with other rates in the legal community for similar legal services.” O’Neill did not submit contrary evidence, nor did he challenge the reasonableness of the fees or hours spent or any other aspect of the award. The order granting attorney fees states that the trial court reviewed the attorney fee declaration and found the fees to be reasonable. “The Court awards Defendant Spano reasonable attorney’s fees in the amount of $11,982.00 and costs in the amount of $1,076.95 as the prevailing party under the terms of the Purchase and Sale Agreement.” A trial court’s award of attorney fees is reviewed for an abuse of discretion. Mahler, 135 Wn.2d at 435. O’Neill has not shown any basis for even suspecting that the trial court abused its discretion in calculating the award of fees and costs. A remand for entry of formal findings and conclusions would merely waste time and add more attorney fees.
We affirm the trial court’s award of fees and costs, and grant Spano and his wife attorney fees on appeal subject to compliance with RAP 18.1.
The trial court entered the judgment for attorney fees against “Brian P. O’Neill and Jane Doe O’Neill”. O’Neill’s wife was not a party to the lawsuit, and Spano concedes there is no basis upon which to hold her in the lawsuit as a judgment creditor. The judgment is remanded for revision so that it can be re-entered solely against O’Neill in his separate capacity.
In all other respects the judgment is affirmed.
COX and AGID, JJ., concur.