131 Wash. App. 675 | Wash. Ct. App. | 2006
— The city of Montesano (City) appeals the trial court’s decision awarding City employee Clint Dice three months’ severance pay and attorney fees under his employment contract with the City. It argues that the trial court (1) did not give effect to the contract’s plain meaning, (2) erred when it ruled severance pay constituted salary or wages under RCW 49.48.030, and (3) did not properly segregate its legal fee award. Dice cross-appeals, claiming the court erred when it did not grant him double damages and all his requested attorney fees, including those for discovery and negotiations incurred before he filed the lawsuit. We affirm the trial court’s award of severance pay as wages and the award of attorney fees incurred in the successful contract claim. We reverse the court’s denial of double damages to Dice under RCW 49.52.050 and .070. And we remand for further hearings to determine and award Dice additional fees and costs related to discovery, case preparation, and his double damages claims, but not negotiations, incurred prior to filing the lawsuit.
FACTS
I. Substantive Facts
¶2 On August 19,1996, Dice entered into an employment contract with the City as Public Works Director. Under the contract, Dice was an “at will” employee.
f 3 On July 8, 2003, the City notified Dice that it planned to terminate his employment effective August 19, the “anniversary date of the contract.” CP at 16. The City refused to pay Dice the lump sum payment equal to three months’ salary, which caused Dice to file suit. It is undisputed that the City terminated Dice without cause.
II. Procedural Facts
¶4 At trial, Dice moved for summary judgment, arguing that the City breached its contract with him when it failed to pay him the three months’ salary required by the contract. He alleged that because it terminated him without cause, the City owed him $18,357 (three times his monthly salary of $6,119). He further argued that the City violated RCW 49.52.050(2),
¶6 The court found no genuine issues of material fact and, in a letter opinion, granted Dice’s motion for summary judgment. The court stated: “It is agreed that Mr. Dice could be terminated with or without cause. Also, the City did not conduct annual reviews to determine whether the contract should be renewed each year. The contract of employment just automatically continued with no action by either party.” CP at 117. The court further held that since the contract was “somewhat ambiguous,” the City had enough uncertainty to argue its position in good faith. CP at 123. Thus, it did not grant Dice’s claim for double damages and attorney fees under RCW 49.52.050 and .070. Finally, the court stated: “It is apparent to me that the City of Montesano drafted the contract.... Therefore, under the facts and circumstances of this case, I interpret the contract to require the City of Montesano to pay Mr. Dice a lump sum payment equal to three months’ salary.” CP at 118.
¶7 Dice moved for reconsideration of the court’s decision denying him attorney fees. The City also moved for reconsideration, arguing that the trial court failed to follow the plain meaning of the contract. In a second letter opinion, the court denied the City’s motion, but it granted Dice’s and agreed to hear argument on attorney fees. After that hearing, the court issued a third letter opinion, in which it granted Dice attorney fees based on the actual costs of litigating his successful claim for the three months’ salary.
¶8 Dice requested $10,097 as his reasonable fees. In addition to his attorney’s hourly billing breakdown for the litigation, the figure included costs associated with (1) an
¶9 The City timely appeals. Dice cross-appeals.
ANALYSIS
I. Standard of Review
¶10 When reviewing an order of summary judgment, we engage in the same inquiry as the trial court. Grundy v. Thurston County, 155 Wn.2d 1, 6, 117 P.3d 1089 (2005). Summary judgment is appropriate only if the pleadings, affidavits, depositions, and admissions on file demonstrate the absence of any genuine issues of material fact and that the moving party is entitled to judgment as a matter of law. CR 56(c). The court must consider all facts submitted and all reasonable inferences from them in the light most favorable to the nonmoving party. Grundy, 155 Wn.2d at 6 (quoting Highline Sch. Dish No. 401 v. Port of Seattle, 87 Wn.2d 6, 15, 548 P.2d 1085 (1976)). The court should grant the motion only if, from all the evidence, reasonable persons could reach but one conclusion. Lilly v. Lynch, 88 Wn. App. 306, 312, 945 P.2d 727 (1997).
II. Contract Interpretation
¶11 “In construing a written contract, the basic principles require that (1) the intent of the parties controls; (2) the court ascertains the intent from reading the contract
¶12 A contract is ambiguous if its terms are uncertain or they are subject to more than one meaning. Mayer, 80 Wn. App. at 421. A provision is not ambiguous simply because the parties suggest opposing meanings. Mayer, 80 Wn. App. at 421. Interpretation of an unambiguous contract is a question of law; thus, summary judgment is appropriate. Mayer, 80 Wn. App. at 420.
¶13 Here, although the parties suggest different interpretations of Dice’s employment agreement, both assert that it is not ambiguous.
¶14 Here, the City argues that the trial court should have given independent effect to the duration and termination clauses. Further, it argues that the trial court should have interpreted the contract according to what the City considered the contract’s plain meaning, allowing the City to terminate Dice’s employment without penalty during the agreement’s anniversary month.
¶15 We agree with the parties; the contract is unambiguous and the trial court could grant summary judgment by interpreting the plain meaning of the agreement without resort to extrinsic evidence. Tanner Elec., 128 Wn.2d at 674. If a contract can reasonably be interpreted in two ways, one of which is ambiguous and one of which is not, the latter interpretation should be adopted when each clause can be given effect. See St. Yves, 111 Wn.2d at 378.
¶16 Reading the termination and duration clauses together, as we must, it is clear that either the City or Dice could terminate the agreement on 30 days’ written notice at any time. See, e.g., Tanner Elec., 128 Wn.2d at 674. The duration clause reserved the right for either party to terminate the contract with 30 days’ notice, regardless of the annual term. Thus, according to St. Yves, the annual term was merely presumptive. 111 Wn.2d at 378. And although the duration clause stated that the contract ran from “year to year,” in light of the whole contract, the phrase really meant “indefinitely.” Here, the “year to year” portion of the duration clause was surplusage since it was qualified by a clause giving either party the right to terminate the employment contract on 30 days’ notice. CP
¶17 Furthermore, the contract contained a clause stating that Dice was an “employee at will.” CP at 10. And at-will employment contracts are not contracts for a specified time period. Roberts v. Dudley, 140 Wn.2d 58, 63, 993 P.2d 901 (2000). The only other mention of annual review in the contract was contained in the compensation provision, which was based on a calendar year and not the date of hire stated in the duration provision.
¶18 The City’s administration of the contract also supports our interpretation of the duration clause. See Berg, 115 Wn.2d at 666-67 (the court may review extrinsic evidence to aid in the determination of the parties’ intent in an unambiguous contract); Tanner Elec., 128 Wn.2d at 674 (where only one reasonable inference can be drawn from the extrinsic evidence, interpretation of a contract is a question of law). The City did not conduct annual performance reviews of Dice, nor did it formally renew the contract every year. Rather, Dice’s employment continued with no action by either party. There is no extrinsic evidence showing that either party intended the phrase “from year to year” to mean anything other than indefinite, ongoing employment. CP at 14.
¶19 The agreement here clearly stated that if the City terminated Dice’s employment for any reason other than cause, the City was required to pay him three months’ salary. The City did not, as it argued on appeal, reserve to itself a window of time around the anniversary date of the agreement when it could avoid its obligation to pay Dice the three months’ salary if it terminated him without cause. To infer such a term would create additional provisions in the contract, which we cannot do. Universal Land & Constr. Co. v. City of Spokane, 49 Wn. App. 634, 637, 745 P.2d 53 (1987) (“[C]ourts should not make another or different contract for the parties under guise of construction.”). That inference would negate the clear benefit the City bestowed upon Dice in the termination clause.
¶21 Thus, in our review of the trial court’s summary judgment order, we determine that reasonable persons could reach but one conclusion: the City could terminate Dice’s employment with 30 days’ notice at any time, but the City had to pay Dice three months’ salary if it terminated his employment without cause. Lilly, 88 Wn. App. at 312. We hold that the trial court did not err when it required the City to pay Dice three months’ salary when it terminated his employment without cause in August 2003.
III. Double Damages under RCW 49.52.050 and .070
¶22 Dice argues that he is entitled to double damages under RCW 49.52.070 and .050. RCW 49.52.070 is the enforcement provision of RCW 49.52.050. It states that any employer who violates RCW 49.52.050 shall be liable to the aggrieved employee in a civil action for twice the wages it unlawfully and willfully withheld. The employee is also entitled to costs and reasonable attorney fees for a successful claim under these statutes. RCW 49.52.070; Bates v. City of Richland, 112 Wn. App. 919, 938, 51 P.3d 816 (2002). The City argues that since there was a bona fide dispute over whether it had to pay Dice severance pay, the court properly found that the City did not act willfully and, therefore, the court properly denied double damages under RCW 49.52.070.
¶23 Whether or not an employer willfully withheld wages or salary is a question of fact. Bates, 112 Wn. App. at 939. But where the facts are undisputed and reasonable minds could not differ, we may determine the issue as a
¶24 Generally, the existence of a bona fide dispute is enough to preclude a finding of willfulness. Bates, 112 Wn. App. at 939. But here, the court recognized that the contract required that the City pay Dice the three months’ pay upon terminating his employment. And when the City ignored the unambiguous language that it had drafted, we hold that it acted willfully. Thus, we reverse the trial court’s ruling and grant Dice double damages.
IV. Attorney Fees
¶25 The City argues that Dice was not entitled to attorneys fees under RCW 49.48.030 because the money awarded to Dice was liquidated damages and not salary as contemplated in the statute.
¶26 The award of attorney fees under a statute or contract is a matter of trial court discretion that we will not disturb absent a clear showing of an abuse of that discretion. Fluke Capital & Mgmt. Servs. Co. v. Richmond, 106 Wn.2d 614, 625, 724 P.2d 356 (1986); Culinary Workers & Bartenders Union, Local No. 596 v. Gateway Cafe, Inc., 91 Wn.2d 353, 372, 588 P.2d 1334 (1979).
A. Salary or Wages Designation under RCW 49.48.030 for Attorney Fees Award
¶27 The City argues that if it did owe Dice three months’ pay, the court erred in finding that the payment constituted salary or wages under RCW 49.48.030 because it was merely a lump sum payment measured by Dice’s monthly salary. RCW 49.48.030 states:
*689 In any action in which any person is successful in recovering judgment for wages or salary owed to him, reasonable attorney’s fees, in an amount to be determined by the court, shall be assessed against said employer or former employer.
“RCW 49.48.030 is a remedial statute that must be construed liberally in favor of the employee.” Bates, 112 Wn. App. at 939. We narrowly construe exceptions. Bates, 112 Wn. App. at 939.
¶28 The statute itself does not define wages, but Washington case law has applied the definition from RCW 49.46.010(2), which states: “ Wage’means compensation due to an employee by reason of employment.” See, e.g., Bates, 112 Wn. App. at 939-40 (quoting Hayes v. Trulock, 51 Wn. App. 795, 806, 755 P.2d 830 (1988)). In Barrett v. Weyerhaeuser Co. Severence Pay Plan, we defined severance pay as “ ‘remuneration for the service rendered during the period covered by the agreement.’ ” 40 Wn. App. 630, 633, 700 P.2d 338 (1985) (quoting Owens v. Press Publ’g Co., 20 N.J. 537, 120 A.2d 442, 447 (1956)). Because it is a remedial statute, our courts have interpreted RCW 49.48.030 broadly, demonstrating that the award of attorney fees under the statute is not limited to judgments only for wages and salaries earned for work performed but, rather, such fees are recoverable for any type of compensation due by reason of employment. Bates, 112 Wn. App. at 940; see, e.g., Gaglidari v. Denny’s Rests., Inc., 117 Wn.2d 426, 450-51, 815 P.2d 1362 (1991) (breach of employment contract); Naches Valley Sch. Dist. No. JT3 v. Cruzen, 54 Wn. App. 388, 399, 775 P.2d 960 (1989) (breach of labor contract).
¶29 Here, the three months’ salary due Dice constitutes “wages” because it derives solely from Dice’s employment contract with the City and the amount was calculated according to his employment earnings at the time of discharge. An employee need not be currently employed to recover statutory attorney fees in a successful action against an employer for wages or salary. Bates, 112 Wn. App at 940. Furthermore, the City’s interpretation would suggest that an employer could refuse to pay bargained-for
B. Segregation of Fees between Contract Claim and Double Damages Claim at Trial
¶30 The City argues that if the court did not err when it awarded Dice attorney fees, it erred when it failed to segregate or reduce his claimed fees to distinguish between fees incurred on the successful contract claim and those incurred in pursuing double damages under RCW 49-.52.070. It contends that significant fees were incurred in researching Dice’s personnel records to rule out termination for cause and that this information did not relate to Dice’s successful claim.
¶31 Where attorney fees are recoverable on only some of a party’s claims, the award must properly reflect a segregation of the time spent on the varying claims. Hume v. Am. Disposal Co., 124 Wn.2d 656, 672, 880 P.2d 988 (1994). The court must separate time spent on theories essential to the successful claim and time spent on theories relating to other causes of action. Hume, 124 Wn.2d at 673 (quoting Travis v. Wash. Horse Breeders Ass’n, 111 Wn.2d 396, 410-11, 759 P.2d 418 (1988)). If the court finds that claims are so related that segregation is not reasonable, then it need not segregate the attorney fees. Hume, 124 Wn.2d at 673.
¶32 Here, the court determined that Dice’s counsel had made a good faith effort to eliminate time spent on the double damages theory and thus awarded fees based on his designation. The court also subtracted fees Dice incurred prior to filing his suit against the City and awarded $8,166.25 as reasonable fees related to Dice’s successful contract claim.
¶34 And in light of our holding that Dice is entitled to double damages under RCW 49.52.050 and .070, he is also entitled to the attorney fees incurred in pursuit of that claim. Thus, although the court properly segregated the fees according to its ruling, we now reverse and grant Dice fees for all his successful claims and remand for that determination.
C. Fees Incurred prior to Filing Suit
¶35 Dice argues that the court erred when it deducted attorney fees he incurred before filing suit against the City. He claims that the court should have awarded him the fees and costs related to his prefiling settlement negotiations and discovery.
¶36 RCW 49.48.030 allows reasonable attorney fees in any action in which a person is successful in recovering a judgment for wages or salary owed to him. The statute does not, however, define “action.” Our Supreme Court attempted to define “action” in the context of legislative intent. In International Ass’n of Fire Fighters, Local 46 v. City of Everett, the court applied the Black’s Law Dictionary definition of “action” and resolved that it is a “ ‘civil or criminal judicial proceeding,’ ‘an ordinary proceeding in a court of justice,’ and ‘any judicial proceeding, which, if conducted to a determination, will result in a judgment or decree.’ ” 146 Wn.2d 29, 40, 42 P.3d 1265 (2002) (quoting
¶37 When our Supreme Court extended the meaning of “action” to include arbitration, it justified its expansion based on the judicial nature of arbitration. Settlement negotiations do not carry that same judicial nature and should not be considered “action” under RCW 49.48.030. Thus, the trial court did not abuse its discretion when it failed to award Dice fees incurred during prefiling negotiations.
¶38 But to properly prosecute a claim, Civil Rule 11 requires that an attorney adequately investigate the factual basis of all claims as well as the proper and applicable legal theories.
|39 The record contains plaintiff’s cost bill and request for attorney fees, which reference and attach Dice’s first attorney’s time sheets. Although Dice’s trial attorney segregated the costs and fees between the successful claims at trial, prefiling negotiations and discovery, the first attorney did not. The trial court is in the best position to obtain the necessary evidence relating to the fees and costs incurred prior to filing the lawsuit. Thus, we remand to the trial court to determine and award attorney fees and costs for the necessary and proper prefiling preparation, including all activities related to the factual bases for Dice’s claims and all legal research done to investigate the proper legal bases for the claims asserted before the trial court.
D. Attorney Fees on Appeal
¶40 Dice cites RAP 18.1 and RCW 49.48.030 and/or RCW 49.52.070 and argues that he is entitled to attorney fees on appeal.
¶41 RAP 18.1 allows this court to award fees and costs where it is statutorily allowed. Both statutes grant attorney fees to an employee who is successful in a claim for wages against his employer. Since Dice prevails here, he is entitled to attorney fees on appeal upon compliance with RAP 18.1.
V. Conclusion
¶42 We affirm summary judgment in favor of Dice for three months’ salary and the award of attorney fees on contract claims that were successful at trial, and remand for determination and award of fees and costs he incurred
Bridgewater and Penoyar, JJ., concur.
Review denied at 158 Wn.2d 1017 (2006).
The clause read: “THIS MEMORANDUM OF UNDERSTANDING is intended to set forth all the terms and conditions of‘At Will’ employment between the CITY OF MONTESANO ... and PUBLIC WORKS DIRECTOR ....” Clerk’s Papers (CP) at 10.
The termination clause read: “In the event the DIRECTOR is terminated for any reason other than for cause . . . the CITY agrees to pay the DIRECTOR a
The duration clause read: “This Memorandum of Understanding shall become effective August 19, 1996, and remain in full force and effect, from year to year, provided that either party reserves the right to terminate this Memorandum of Understanding with thirty days’ written notice.” CP at 14 (emphasis added).
RCW 49.52.050 reads in pertinent part:
Any employer or officer, vice principal or agent of any employer, whether said employer be in private business or an elected public official, who .. .
(2) Wilfully and with intent to deprive the employee of any part of his wages, shall pay any employee a lower wage than the wage such employer is obligated to pay such employee by any statute, ordinance, or contract...
Shall be guilty of a misdemeanor.
RCW 49.52.070 states:
Any employer and any officer, vice principal or agent of any employer who shall violate any of the provisions of subdivisions (1) and (2) of RCW 49.52.050 shall be liable in a civil action by the aggrieved employee or his assignee to judgment for twice the amount of the wages unlawfully rebated or withheld by way of exemplary damages, together with costs of suit and a reasonable sum for attorney’s fees: PROVIDED, HOWEVER, That the benefits of this section shall
Neither party argues that the terms of the agreement are ambiguous based on the trial court’s ruling on Dice’s claim for double damages. There, the court concluded that the contract was “somewhat ambiguous,” thus creating sufficient uncertainty for the City to argue in good faith that it did not owe Dice the three months’ salary. CP at 123.
Civil Rule 11(a) reads in pertinent part:
The signature of a party or of an attorney constitutes a certificate by the party or attorney that the party or attorney has read the pleading, motion, or legal memorandum; that to the best of the party’s or attorney's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances: (1) it is well grounded in fact; (2) it is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law or the establishment of new law; (3) it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation .... If a pleading, motion, or legal memorandum is signed in violation of this rule, the court, upon motion or upon its own initiative, may impose upon the person who signed it, a represented party, or both, an appropriate sanction, which may include an order to pay to the other party or parties the amount of the reasonable expenses incurred because of the filing of the pleading, motion, or legal memorandum, including a reasonable attorney fee.