G.a. Casebeer, Et Al., App. V. Aecon Buildings, Inc., Res.
Annotate this Case
Download PDF
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION ONE
No. 62374-5-I/2
AECON BUILDINGS INC., f/k/a BFC
FRONTIER, INC., a Washington
)
No. 62374-5-I
corporation,
)
Respondent,
ORDER GRANTING
MOTIONS TO PUBLISH
)
v.
)
VANDERMOLEN CONSTRUCTION CO.,
INC., a Washington corporation; BRITCO
)
STRUCTURES, INC., a Washington
corporation; BRITCO GENERAL
)
PARTNERSHIP, a foreign partnership;
JOHN LUPO CONSTRUCTION, INC., a
)
Washington corporation; PACIFIC
INDUSTRIES NORTHWEST, INC., d/b/a
)
COMMERCIAL PACIFIC COMPANY, a
Washington corporation; QUIGG BROS.,
)
INC., a Washington corporation; WESTERN
PARTITIONS, INC., an Oregon corporation;
)
SUNSET AIR, INC., a Washington
corporation; and HAWKES ELECTRIC,
)
INC., a Washington corporation,
2
)
Defendants,
)
No. 62374-5-I/3
Nonparty applicant Gregory L. Harper of the Harper │Hayes PLLC law
firm and nonparty applicants Vanessa Cartwright-Henry and Brian Baehmer,
individually and on behalf of their daughter, Victoria Cartwright-Baehmer, a
minor, having filed their motions to publish; and appellant, Glen Casebeer, and
respondent, Aecon Buildings, Inc., having filed their responses herein; and a
panel of the court having reconsidered its prior determination not to publish the
opinion filed for the above entitled matter on December 28, 2009, and finding
that it is of precedential value and should be published;
Now, therefore it is hereby
ORDERED that the written opinion filed on December 28, 2009, shall be
published and printed in the Washington Appellate Reports.
DATED this
day of February, 2010.
Judge
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
3
No. 62374-5-I/4
4
No. 62374-5-I/5
AECON BUILDINGS INC., f/k/a BFC
FRONTIER, INC., a Washington
corporation,
Respondent,
v.
VANDERMOLEN CONSTRUCTION CO.,
INC., a Washington corporation; BRITCO
STRUCTURES, INC., a Washington
corporation; BRITCO GENERAL
PARTNERSHIP, a foreign partnership;
JOHN LUPO CONSTRUCTION, INC., a
Washington corporation; PACIFIC
INDUSTRIES NORTHWEST, INC., d/b/a
COMMERCIAL PACIFIC COMPANY, a
Washington corporation; QUIGG BROS.,
INC., a Washington corporation;
WESTERN PARTITIONS, INC., an
Oregon corporation; SUNSET AIR, INC.,
a Washington corporation; and HAWKES
ELECTRIC, INC., a Washington
corporation,
Defendants,
BRITCO STRUCTURES, a foreign
partnership,
Third Party Plaintiff,
CONSTRUCTION RESOURCES
GROUP, a Washington limited liability
company; TRI-STATE ENGINEERING, a
Washington corporation; and ADDSPACE, INC., a Washington corporation,
Third Party Defendants,
GLEN A. CASEBEER, d/b/a CHINOOK
BUILDERS, INC., a Washington sole
proprietorship,
Appellant.
5
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
No. 62374-5-I
DIVISION ONE
PUBLISHED OPINION
FILED: December 28, 2009
No. 62374-5-I/6
Appelwick, J. — Aecon, a general contractor, took a default judgment
against subcontractor Casebeer and his company, Chinook, when they failed to
appear in a construction defect lawsuit. Chinook’s insurer, Hartford, moved to
vacate the default order on the equitable ground that Aecon failed to notify
Hartford when it filed suit and served Casebeer.
contested the motion for default judgment.
Hartford appeared and
The trial court denied Hartford’s
motion to vacate the default and entered judgment after taking evidence. We
affirm.
FACTS
Aecon Buildings, Inc. served as general contractor for the construction of
the Quinault Beach Resort and Casino for the Quinault Indian Nation. Aecon
subcontracted with Glen A. Casebeer and Chinook Builders, Inc.,1 to do the
framing on the project.
After completion of the resort, the Quinault alleged
claims against Aecon for construction defects that caused water intrusion and
other property damage. Aecon and the Quinault initiated arbitration, as required
by their contract. Aecon tendered claims to several subcontractors whose work
was implicated in the alleged defects. In January 2005, Aecon filed a lawsuit
against these subcontractors, alleging that their defective performance under the
subcontract caused the damage claimed by the Quinault. The original filing did
not include Chinook as a defendant.
On May 3, 2006, Aecon tendered the
defense of the claim to Chinook. Chinook’s insurance broker received a copy of
1
There is conflicting information about whether this is a sole proprietorship or a corporation. For
the purpose of this opinion Chinook refers to the business and Casebeer refers to the individual.
6
No. 62374-5-I/7
the request for defense. The broker forwarded the tender to Chinook’s insurer,
Hartford Casualty Insurance Company.
The letter advised Chinook of the
construction defect claims and tendered defense of the claims to Chinook. The
letter made no mention of the lawsuit in which Chinook had not yet been named.
After receiving the forwarded letter from Chinook’s broker, Pete Harris a
claims adjuster from Hartford, tried without success to contact Casebeer and
Chinook for information relating to the tender of defense. Harris also contacted
Aecon for additional information.
According to Harris’s declaration Aecon’s
representative did not inform Hartford of any lawsuit including Chinook as a
defendant.
Aecon sent requested documents to Hartford.
Aecon filed and
served its amended complaint—adding Chinook and other new defendants—in
June 2006. Hartford was not informed of Chinook’s inclusion as a defendant in
the suit. Hartford sent a denial of defense letter to Aecon in November 2006 and
Chinook in December 2006.
Casebeer received proper service of the summons and complaint for the
lawsuit against Chinook on June 15, 2006. Hartford received no notification of
the suit from Casebeer, its insured. Chinook failed to respond to the complaint.
In September 2006, the trial court entered an order of default against Chinook.
In 2007, Aecon sued Hartford, and several other insurers, claiming bad
faith. The case was removed to federal court. See Aecon Bldgs, Inc. v. Zurich
N. Am., 572 F. Supp. 2d 1227 (W.D. Wash. 2008).
Aecon settled with the Quinault for $3.75 million dollars. In July 2007,
Aecon filed a motion asking for a determination of reasonableness of the
7
No. 62374-5-I/8
settlement under RCW 4.22.060. Hartford’s counsel in the coverage claim suit
received service of the motion for a reasonableness hearing.
According to
Hartford, this was the first notice of Chinook’s inclusion in the lawsuit. Hartford2
immediately moved to set aside the order of default. The trial court denied the
request.
With the exception of Chinook, Aecon settled with the subcontractors
included in the lawsuit for a total of $2,412,500.
Aecon moved for default
judgment against Chinook for the remaining amount owed in the Quinault
settlement plus attorney fees and costs incurred during all of the litigation with
the Quinault and the subcontractors. This amounted to over $2.4 million. The
trial court denied this motion for default judgment, because damages and the
attorney fees costs had not been allocated based on Chinook’s breach of
contract.
Aecon filed a second motion for default judgment against Chinook,
requesting $1,185,212 in damages as outlined by an expert witness, James
Paustian. The request also included additional requests for attorney fees and
costs and prejudgment interest, for a total default judgment of $1,788,651. Over
Chinook’s opposition, the trial court granted judgment on the damages, but
deferred the motion for fees and costs pending a calculation based on the
lodestar method.
Hartford, standing in the shoes of Chinook, appeals both the denial of the
2
Casebeer, and therefore Chinook, have never been located and have never responded in this
suit. Chinook’s representation has been undertaken by Hartford, presumably without notice to or
approval by Casebeer and Chinook.
8
No. 62374-5-I/9
motion to set aside the order of default and the default judgment.
After
submission of the appellant’s brief, Aecon moved to supplement the record on
appeal with evidence not before the trial court. The supplement consisted of
sworn deposition testimony of Hartford claims representative Harris, in which he
states that Aecon had informed him that Chinook would likely be brought into the
ongoing lawsuit. The deposition testimony was given during the federal action
between Aecon and Hartford seven months after filing the motion to set aside
the order of default.
Chinook stipulated to the supplementation, and a
Commissioner granted the motion to supplement.
DISCUSSION
I. Motion to Vacate Entry of Default
We review a trial court’s decision on a motion to vacate an order of
default or default judgment for abuse of discretion. Morin v. Burris, 160 Wn.2d
745, 753, 161 P.3d 956 (2007); In re Estate of Stevens, 94 Wn. App. 20, 29, 971
P.2d 58 (1999). Discretion is abused if exercised on untenable grounds or for
untenable reasons. Morin, 160 Wn.2d at 753. “A proceeding to vacate or set
aside a default judgment is equitable in its character, and the relief sought or
afforded is to be administered in accordance with equitable principles and
terms.” Id. at 754. As a result, the trial court can vacate an order of default for
good cause. CR 55(c)(1); Seek Sys., Inc. v. Lincoln Moving/Global Van Lines,
Inc., 63 Wn. App. 266, 271, 818 P.2d 618 (1991). Courts consider excusable
neglect and due diligence as factors in considering “good cause.” Id.
Chinook alleges that Aecon acted inequitably by failing to notify Chinook’s
9
No. 62374-5-I/10
insurer, Hartford, about the lawsuit against Chinook. Chinook contends that this
inequitable conduct provides grounds for vacating the order of default, and that
the trial court erred by denying its motion to vacate.
According to Chinook,
Aecon failed to notify Hartford of its plans to amend the complaint and then the
actual amendment of the complaint to include Chinook as a defendant.
To
support the theory that concealing a lawsuit constitutes inequitable behavior
allowing for reversal of a default judgment, Chinook cites Morin, 160 Wn.2d at
745.
Morin consolidated three cases concerning the “appearance” requirement
for providing notice of default judgment proceedings. Id. at 753–4. In the third
case, the Gutzes and the Johnsons were involved in an automobile accident. Id.
at 758. Gutzes’ counsel engaged in settlement discussions with the Johnsons’
insurer. Id. Shortly after the statute of limitations ran, the insurer called Gutzes’
counsel to discuss settlement and asked whether there would be litigation. Id.
The Gutzes had filed suit shortly before the statute of limitations ran, but the
attorney made no mention of the suit to the insurer during the conversations
about settlement. Id. Without informing the insurer that a default judgment was
pending, counsel continued to negotiate a settlement with the insurer. Id. at
759. The Supreme Court believed that counsel’s failure to disclose may have
been an inequitable attempt to conceal the litigation that would allow for the
default judgment to be set aside. Id.
Chinook argues that Aecon’s behavior toward Hartford correlates to the
concealment discussed in Morin. But, Chinook ignores that the court also stated
10
No. 62374-5-I/11
that “Gutzes’ counsel had no duty to inform [the insurer] of the details of the
litigation.” Id. The inequitable conduct did not arise from counsel’s failure to
notify the insurer of the lawsuit.
Instead, the problem stemmed from the
apparent attempt to conceal the existence of the suit while the parties engaged
in settlement negotiations. Id.
Here, Aecon did not conceal the existence of the lawsuit from Hartford
during ongoing negotiations. Aecon and Hartford were not attempting to settle
the claims. The calls focused on gathering information in order to determine
whether Hartford had a duty to defend Aecon for the construction defects alleged
by the Quinault, either through the indemnity provisions of the subcontract or as
an additional insured on the policy. At the time of the telephone calls Aecon had
not yet named Chinook in the suit. Aecon could not conceal a lawsuit that did
not yet exist. Therefore, Aecon did not act inequitably by failing to disclose a
suit it had yet to file against Chinook.
This case is more akin to the scenario in Caouette v. Martinez, 71 Wn.
App. 69, 856 P.2d 725 (1993).
In Caouette, a trial court vacated a default
judgment because the defendants’ insurer did not receive notice of the motion to
obtain a default judgment. Id. at 77. Division Two determined that no case law
supported the proposition that it is inequitable to enter a default judgment
without notifying the insurer. Id. at 78. It stated, “We do not believe that a
plaintiff’s failure to notify a nonparty insurer of her intention to obtain a default
judgment against an insured is a basis for vacation of a default order and
judgment.”
Id.
Hartford is Chinook’s insurer, but not a named party in the
11
No. 62374-5-I/12
lawsuit. Aecon does not appear to have concealed the litigation, but merely
failed to notify Hartford.
Chinook points to the deposition testimony of claims adjuster Harris in the
supplemental evidence to demonstrate that Aecon had agreed to notify Hartford
of any filing against Chinook.
In his deposition, Harris stated that Aecon’s
representative “said that she was going to serve the insured and that that was a
couple of weeks out, and I would be getting a copy of that. But I don’t believe I
ever got it.” According to Chinook, Hartford relied on the representation that
Aecon would forward the pleadings after Chinook became part of the suit and
that failure to comply with this promise was inequitable.
But, Morin requires more than just inequitable conduct on the part of the
party filing for default judgment.
Morin states that “[i]f the Johnsons’
representative acted with diligence, and the failure to appear was induced by
Gutzes’ counsel’s efforts to conceal the existence of litigation . . . then the
Johnsons’ failure to appear was excusable under equity and CR 60.” 160 Wn.2d
at 759. The Johnsons’ counsel had to have “acted with diligence.” Id. Here,
Harris testified that Aecon’s representative said that the suit would be filed soon
and pleadings would be sent. But, when those pleadings never arrived, Harris
failed to make any inquiries into the status of the lawsuit. He did not act with the
diligence necessary for relief under equity or CR 60.
The trial court did not abuse its discretion by denying the motion to vacate
the order of default. Even the additional evidence before this court on appeal
does not reveal inequitable conduct requiring vacation of the default.
12
No. 62374-5-I/13
II. Findings of Fact and Conclusions of Law under CR 55(b)(2)
Under CR 55(b)(2), upon entry of default judgment when the amount of
damages is uncertain, a trial court must enter findings of fact and conclusions of
law to support the judgment. It states, “If, in order to enable the court to enter
judgment or to carry it into effect, it is necessary to take an account or to
determine the amount of damages . . . the court may conduct such hearings as
are deemed necessary . . . . Findings of fact and conclusions of law are required
under this subsection.” CR 55(b)(2). Chinook alleges error, because the trial
court did not enter findings of fact and conclusions of law.
Findings of fact and conclusions of law are generally required so that an
appellate court can evaluate the factual and legal basis for the trial court’s
decision in default cases. Little v. King, 160 Wn.2d 696, 706, 161 P.3d 345
(2007). In Little, the court determined that the lack of findings and conclusions
was not fatal to the judgment. Id. at 707. The judge in the case had listed the
materials examined and the specific amounts awarded for the different types of
damages. Id. The court agreed that the entry of judgment “‘necessarily implies
a finding of fact that Little suffered damages in the given amounts and the
conclusion of law that Little was entitled to recover those sums from King.’” Id.
(quoting Little v. King, noted at 127 Wn. App. 1021, 2005 WL 1090134, at *6,
aff’d, 160 Wn.2d 696 (2007)).
Despite Chinook’s claims to the contrary, this case is similar to Little. The
trial court entered judgment for the exact amount claimed as damages and
supported by expert evidence. This implies that the court accepted the expert’s
13
No. 62374-5-I/14
allocation of damages and rejected Chinook’s theories against the recovery.
The trial court may have erred by failing to enter findings and conclusions as
required by CR 55(b)(2), but the lack of findings and conclusions does not
hinder our review of this case. We see no need to remand solely for their entry.
III. Judgment
After entering an order of default, the court must make a reasonable
inquiry to determine the amount of damages. Smith v. Behr Process Corp., 113
Wn. App. 306, 333, 54 P.3d 665 (2002). The reasonability of the damage award
is a question of fact reviewed for abuse of discretion. Harmony at Madrona Park
Owners Ass’n v. Madison Harmony Dev., Inc., 143 Wn. App. 345, 357–58, 177
P.3d 755 (2008), review denied, 164 Wn.2d 1032 (2008). The trial court entered
judgment for Aecon in the amount of $1,185,212 based on expert reports and
depositions.
The evidence presented by Aecon shows that Chinook is responsible for
the deficiencies related to the exterior and interior shear walls.
The cost to
remediate and repair the problems associated with the shear walls amounted to
$1,124,324. The trial court implicitly accepted the expert testimony that reflects
that Chinook was solely responsible for these defects.
The same expert report contends that Chinook “may be responsible or are
partially responsible” for construction deficiencies including improper installation
of some of the first floor windows, plywood sheathing improperly spanning gaps
created by the offset module installation at the second to fourth floor shear walls,
and improperly installed holdowns. Chinook argues that the expert testimony
14
No. 62374-5-I/15
finding only partial responsibility should not result in full responsibility for the
damages relating to these defects. Examination of the expert’s cost estimate
allocation shows that Chinook was not allocated the full cost of remediation and
repair for these defects.
For example, the expert only allocated Chinook a
fraction of the cost to remediate the damage related to the improperly installed
windows. While the expert did not provide an explicit allocation of repairs to
other responsible subcontractors, the estimated allocation to Chinook reflects
only partial responsibility for some of the alleged defects.
The trial court accepted the expert’s allocation of the costs to Chinook.
Though Chinook was participating in this stage of the litigation, it did not supply
the court with an alternative damages calculation.
prepare an allocation of damages.
Chinook’s expert did not
The evidence provided by the expert
supports the damages awarded. The trial court did not abuse its discretion.
Aecon requests attorney fees under a provision of the subcontract which
states, “In the event of litigation between the Subcontractor and the Contractor
to enforce the rights under this subparagraph, reasonable attorneys’ fees shall
be allowed to the prevailing party.” As the prevailing party, Aecon is entitled to
receive fees on appeal.
We affirm.
15
No. 62374-5-I/16
WE CONCUR:
16
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.