NEFF v. PORT SUSAN CAMPING CLUB

8 NICS App. 55, NEFF v. PORT SUSAN CAMPING CLUB (May 2008)

IN THE TULALIP TRIBAL COURT OF APPEALS

TULALIP INDIAN RESERVATION

TULALIP, WASHINGTON

Paul and Joan Neff, Appellants,

Port Susan Camping Club, Appellee.

No. TUL-CV-GC-2005-0368; -0390 (May 29, 2008)

SYLLABUS^*

Following a remand, trial court issued supplemental findings of fact and conclusions of law citing specific evidence in the record that a private association had established good cause to terminate a membership. Trial court also awarded attorney’s fees to the association. Court of Appeals holds that substantial evidence cited by trial court supports trial court’s findings of fact and trial court correctly applied applicable law in awarding attorney fees to the prevailing party. Trial court order affirmed.

Before: Jane Smith, Chief Justice; Robert Anderson, Justice; Douglas Nash, Justice.

Appearances: Cory D. Rein for Appellants; Larry M. Trivett for Appellee.

OPINION

Anderson, J.:

Background

This is the third time this matter has been before this court. The underlying facts are set forth in an Opinion and Order dated November 16, 2006 (Neff I). There were two issues before the court in the prior appeal. “First, was the September 8, 2005 verbal agreement a legally binding contract that would govern the terms of Mr. Neff’s continued membership in Port Susan? Second, if not, was Port Susan’s action terminating Mr. Neff’s membership valid?” Neff v. Port Susan Camping Club, 7 NICS App. 138, 140 (Tulalip Tribal Ct. App. 2006) (Neff I). We answered the first question in the negative and remanded the matter to the trial court for a determination of the “Neffs’ challenge to the September termination of Mr. Neff’s

8 NICS App. 55, NEFF v. PORT SUSAN CAMPING CLUB (May 2008) p. 56

membership[.]” Id. at 142. We applied state law in making our determination since tribal Ordinance 72 grants the tribal court jurisdiction to resolve disputes involving Port Susan and its members and incorporates state law “to the extent not inconsistent with other tribal law provisions.” Ord. 72, § 2.

On remand, the trial court issued “Supplemental Findings of Fact and Conclusions of Law” on March 27, 2007. The trial court concluded that Port Susan had followed the proper procedures for termination of Mr. Neff’s membership and referenced material in the record sufficient to support its determination that the proper procedures had been followed. The trial court also found that there was “substantive evidence supporting Port Susan’s decision to terminate Mr. Neff’s memberships in the Club.” That determination, however, did not point to any specific evidence in the record. We accordingly remanded in order for the trial court to enter findings with references and citations to the evidence in the trial record in support of its finding. Neff v. Port Susan Camping Club, 8 NICS App. 32 (Tulalip Tribal Ct. App. 2007) Opinion and Order dated December 10, 2007 (Neff II). We did not reach the issue of attorney’s fees that had been awarded since the judgment was not final. Neff II at 34. We now resolve the remaining issue.

Good Cause to Terminate Membership

On January 28, 2008 the trial court issued its Supplemental Findings of Fact and Conclusions of Law in response to this court’s Order. Having reviewed the trial court’s findings, we conclude that the trial court correctly determined that Port Susan had good cause to terminate Mr. Neff’s membership.

Attorneys Fees

Under Washington law attorney's fees may be awarded only when authorized by private agreement, a statute, or a recognized ground of equity. Fisher Properties, Inc. v. Arden-Mayfair, Inc., 106 Wn.2d 826, 849-50, 726 P.2d 8 (1986). The relationship between Neff and Port Susan is contractual. Garvey v. Seattle Tennis Club, 60 Wn.App. 930, 933, 808 P.2d 1155 (1991). Port Susan’s bylaws, a part of this contract, contained a provision requiring that “any member” reimburse Port Susan for all legal expenses including attorney fees if Port Susan was the successful party in a legal dispute with that member. Contractual agreements on costs and attorney’s fees are governed by RCW 4.84.330, which provides in relevant part:

In any action on a contract or lease entered into after September 21, 1977, where such contract or lease specifically provides that attorney's fees and costs, which are incurred to enforce the provisions of such contract or lease, shall be awarded to one of the parties, the prevailing party, whether he is the party specified in the contract or lease or not, shall be entitled to reasonable attorney's fees in addition to costs and necessary disbursements.

8 NICS App. 55, NEFF v. PORT SUSAN CAMPING CLUB (May 2008) p. 57

Here, the parties have raised two main issues regarding the interpretation of this statute. The first issue is whether the action brought by Neff constitutes “an[] action on a contract” under RCW 4.84.330. The second issue is whether the Court should apply the “affirmative judgment rule” or the “proportionality rule” to determine which party is the “prevailing party” for the purposes of awarding attorney’s fees under RCW 4.84.330.¹

RCW 4.84.330 governs when “any action [is brought] on a contract” to enforce an attorney’s fees provision of that contract. For the purposes of this statute, an action is brought “on a contract” “when the action ar[ises] out of the contract and the contract is central to the dispute." Mehlenbacher v. DeMont, 103 Wash. App. 240, 244, 11 P.3d 871 (Wash. App. 2000) (citing Seattle First Nat. Bank v. Washington Ins. Guar. Ass'n, 116 Wash. 2d 398, 413, 804 P.2d 1263 (1991)). Neff’s claim in this case was that Port Susan wrongfully terminated his membership and sought reinstatement. The litigation was about the meaning and effect of the contractual relationship between Neff and Port Susan such that the litigation satisfies the statutory requirement that it be and action brought on a contract.

Neff argues, however, that the trial court erred in granting Port Susan attorney’s fees because Port Susan’s bylaws only allow for fees to be assessed against its members. Neff contends since he was no longer a member of Port Susan when he instituted this lawsuit he should not be subject to the attorney’s fees provision. This argument fails on the merits. Under RCW 4.84.330 it is irrelevant whether Neff was or was not a member of Port Susan at the commencement of this action. To establish if this action was “an action under a contract” the Court need only establish that two criteria are satisfied. First that the action arose out of a contract between Neff and Port Susan and second that the given contract is central to this dispute. See DeMont, 103 Wash. App. 240 at 244. Both of these requirements are satisfied here. Neff commenced this action to reverse the termination of his membership rights which were governed by Port Susan’s Charter and Bylaws and the enforcement of Neff’s membership was the central issue to this dispute.

Under RCW 4.84.330, when an action is brought on a contract, the attorney’s fees incurred to enforce that contract “shall be awarded to…the prevailing party.” RCW 4.84.330. The statute defines a “prevailing party” as “the party [in] whose favor final judgment is rendered.” RCW 4.84.330. The Washington Supreme Court held “for purposes of attorney fee awards, ‘prevailing party’ is generally one who received affirmative judgment in his or her favor.” Riss v. Angel, 131 Wash.2d 612, 633, 934 P.2d 669 (1997), see also Piepkorn v. Adams,

8 NICS App. 55, NEFF v. PORT SUSAN CAMPING CLUB (May 2008) p. 58

102 Wash.App. 673, 686, 10 P.3d 428 (Div. 1 2000)(concluding “in general, a prevailing party is one who receives an affirmative judgment in his or her favor”).

Here, Neff contends the affirmative judgment rule, which is generally applied by Washington courts, is inappropriate to determine the allocation of attorney’s fees in this case. He argues the Court should instead apply the “proportionality rule” created in Marassi v. Lau, 71 Wn. App. 912, 859 P.2d 605 (1993). In Marassi, the plaintiff brought 12 distinct and separate claims. Marrassi, 71 Wn.App. at 916. Although the plaintiff received a final judgment in his favor, he only prevailed on two of these twelve original claims. Id. In light of this outcome, the Marassi court concluded the application of the net affirmative judgment rule would not obtain a fair or just result. Id. The Court held “when the alleged contract breaches at issue consist of several distinct and severable claims a proportionality approach is more appropriate.” Id. at 917. Under this approach, the defendant is awarded attorney fees for those claims it successfully defends, and the plaintiff is awarded attorney fees for the claims it prevails upon and these awards are then offset. Id.

The proportionality rule applied in Marassi is not appropriate here. Unlike Marassi, where the plaintiff brought 12 “distinct and severable claims,” there was only one distinct issue in this case: whether Port Susan correctly followed its Charter and Bylaws when terminating Neff’s membership. Although Neff raised two issues on appeal regarding the method of termination of his membership and prevailed on one of them, these issues were not distinct and severable, but were simply theories used to support Neff’s position on the one main issue in this case. “A party need not recover its entire claim in order to be considered the prevailing party,” but must have “substantially prevailed” on that claim to be entitled to attorneys fees. Silverdale Hotel Assocs. v. Lomas & Nettleton Co., 36 Wn.App. 762, 774, 677 P.2d 773 (1984). Given that there was only one distinct claim in this litigation, and Port Susan substantially prevailed on this claim, the affirmative judgment rule is appropriate. Therefore, Port Susan is the “prevailing party” for the purposes of RCW 4.84.330.

Conclusion

Since Port Susan was the prevailing party in this case, Port Susan is entitled to reasonable attorney’s fees pursuant to RCW 4.84.330. The trial court’s decision is hereby affirmed.

The syllabus is not a part of the Court’s Opinion. The syllabus is a summary of the Opinion prepared by the publishers of this Reporter only for the convenience of the reader. Therefore, the syllabus should not be cited in whole or part as legal authority. Only the Opinion, which follows the syllabus, may be cited as legal authority.

In Neff’s opening brief, he argues that Joan Neff should also be awarded attorney’s fees for costs incurred defending herself against claims brought by Port Susan. Although Port Susan did initially argue that Joan Neff’s membership was terminated, it abandoned this position before the case went to trial. At trial the court simply affirmed that Joan Neff remained a member of Port Susan. Whether Port Susan is liable to Joan Neff for attorney’s fees depends on whether she is considered a “prevailing party.” Since the issue of her membership status was not addressed at trial she was not a “prevailing party” in a litigation sense.