James Goughnour, V Mark And Carolyn Doyle, 47407-7

Background

In May 2009 Goughnour and the Doyles signed a lease that capped rent: "Rent will never exceed Landlord’s mortgage payment for the property tenant occupies." Goughnour paid rent under that agreement.
In March 2010 Goughnour learned the Doyles had not been making mortgage payments and claimed prior rent payments were overpayments; he debited one month against that claimed overpayment.
In April 2010 the parties executed a new rental agreement setting rent at $800/month and expressly superseding the 2009 agreement; Goughnour thereafter paid the reduced rent and did not receive reimbursement for earlier alleged overpayments.
The Doyles later sought unlawful detainer; the trial court in that action dismissed Goughnour’s counterclaims about overpayments for lack of subject matter jurisdiction and the appellate court resolved tenancy issues in Doyle I and Doyle II.
In Oct. 2013 Goughnour sued the Doyles for breach of contract, fraud, conversion/obtaining money by false pretenses, breach of fiduciary duty, conspiracy, and CPA violations, seeking damages in excess of $85,000.
The Doyles did not appear; the trial court entered a default order but denied default judgment, dismissed the claims sua sponte, and cited its reading of the prior Doyle I decision; the Court of Appeals reversed and remanded.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Doyle I (prior appellate decision) bars relitigation of whether the 2010 agreement superseded the 2009 agreement for all purposes (law of the case)	Doyle: Doyle I did not decide whether the 2010 agreement generally extinguished claims arising under the 2009 agreement; those issues were not litigated there	Doyles (as applied by trial court): Doyle I shows the 2010 agreement superseded the 2009 agreement and thus extinguished overpayment claims	Court: Trial court erred to the extent it treated Doyle I as controlling beyond the tenancy/termination issues actually decided; law of the case did not bar relitigation of overpayment claims
Whether the trial court may consider affirmative defenses when deciding a default judgment	Doyle: Trial court must not raise affirmative defenses for absent defendants; issues like accord/waiver/preclusion are affirmative defenses for defendants to present	Doyles: (Implicit) Prior rulings and the 2010 agreement preclude claims	Court: Trial court erred by effectively raising defenses (preclusion, accord and satisfaction, waiver) on the Doyles’ behalf
Whether plaintiff requested a sum certain entitling him to mandatory default judgment	Doyle: Although complaint sought “in excess of $85,000”, his default-judgment motion sought $85,000 plus costs; that does not convert the claim into a sum certain	Doyles: (Implicit) Plaintiff sought a fixed amount	Court: Plaintiff did not seek a sum certain under CR 55 and the court therefore needed to determine damages via fact-finding; mandatory entry of judgment was not required
Whether trial court had to accept plaintiff’s interpretation of the 2009 contract after default	Doyle: Default admits factual allegations but not legal conclusions; contract interpretation is a question of law unless extrinsic evidence is necessary	Doyles: (Implicit) Court may adopt a plain-meaning reading that the 2010 agreement superseded the 2009 agreement	Court: Trial court correctly declined to accept plaintiff’s legal interpretation wholesale, but erred if it refused to consider plaintiff’s factual allegations about the meaning of “mortgage payment”; ambiguity requires consideration of extrinsic facts admitted by default

Key Cases Cited

Dan’s Trucking, Inc. v. Kerr Contractors, Inc., 183 Wn. App. 133 (appellate de novo review where issues resolved by law applied to uncontested facts)
J-U-B Eng’rs, Inc. v. Routsen, 69 Wn. App. 148 (trial court must not raise affirmative defenses for defaulting defendant)
Skidmore v. Pac. Creditors, Inc., 18 Wn.2d 157 (distinguishes liquidated/sum-certain claims from unliquidated claims for default judgment)
Kaye v. Lowe’s HIW, Inc., 158 Wn. App. 320 (default admits factual allegations but not legal conclusions; court must still assess whether facts state a cause of action)
Hanson Indus., Inc. v. Kutschkau, 158 Wn. App. 278 (legal conclusions not admitted on default)
Casterline v. Roberts, 168 Wn. App. 376 (distinguishing facts from law; mislabeled legal conclusions treated as law)
Viking Bank v. Firgrove Commons 3, LLC, 183 Wn. App. 706 (contract interpretation: use extrinsic evidence only to clarify ambiguous terms)
Lodis v. Corbis Holdings, Inc., 192 Wn. App. 30 (law of the case doctrine applies only where facts and legal questions are substantially the same)
Kelley v. Carr, 567 F. Supp. 831 (default judgment principles: court must determine whether unchallenged facts constitute a cause of action)