                                                                  FILED
                                                          COURT OF /WEALS DIV 1
                                                           STATE OF VASE:NG-I 01;

                                                           2011 OCT     L:111: 22

      IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON


                                       )
GLOBAL CHEMICAL SOLUTIONS,             )        No. 74805-0-1
LLC, a Washington limited liability,   )
company,                               )        DIVISION ONE
                                       )
                     Respondent,       )
                                       )
               v.                      )
                                       )
CENTECH, LLC, a Washington limited )            UNPUBLISHED
liability company; JOHN GRAFF and      )
TERESA GRAFF, husband and        wife, )        FILED: October 2, 2017
and the marital community comprised )
thereof,                               )
                                       )
                     Appellants,       )
                                       )
              and                      )
                                       )
ROBERT BLACK and MICHIKO               )
BLACK, husband and wife, and           )
the marital community comprised        )
thereof,                               )
                                       )
                      Defendants.      )
                                       )


      Cox, J. — Centech LLC, John Graff and Teresa Graff appeal the superior

court's nunc pro tunc order entering judgment on a jury verdict in favor of Global

Chemical Solutions, LLC(GCS)after a 12-day jury trial. The trial court did not

abuse its discretion in refusing Centech's requested jury instructions on warranty

and frustration of purpose. Moreover, the trial court's award of prejudgment

interest was justified because the amount of damages awarded by the jury did
No. 74805-0-1/2

not require opinion or discretion. Finally, the trial court did not abuse its

discretion in refusing to offset the damages award against Centech by the

amount of a settlement agreement between GCS and another defendant, Robert

Black. Accordingly, we affirm.

       GCS was a chemical distribution company owned by Greg Porter, John

Hen nesy, and Black. Black was president of GCS and responsible for the day to

day operations of the business. Hennessey had arranged for a revolving line of

credit(LOC)that was personally guaranteed by him and Porter. Centech was a

company dealing in glycerin byproducts, owned by its CEO, John Graff.

       In 2011, friction developed between GCS's owners over GCS's failure to

perform up to expectations and its increasing debt. Hennessy and Porter were

dissatisfied with some of Black's decisions and actions and disputed Black's

contention that the LOC was a loan instead of a capital contribution.

       Graff and Black decided to go into business together, and negotiated with

Hennessy and Porter to purchase the assets of GCS. Black would resign as

president of GCS and become president and 50 percent owner of Centech.

       In December 2012, GCS and Centech executed an Asset Purchase and

Sale Agreement(the "APA"). Pursuant to the APA, GCS agreed to sell and

assign to Centech all of its assets including inventory and accounts receivable.

Centech agreed to assume all of GCS's accounts payable and expenses

incurred in the ordinary course of business except the LOC.

       Section 2.2 of the APA governs calculation of the final purchase price, and

it sets a maximum price of $1.026 million. Graff had previously identified various


                                           2
No. 74805-0-1/3

items listed as assets on GCS's books as "questionable," and these

"Questionable Assets" are identified in section 2.2 of the APA. In the APA,the

sum total of the Questionable Assets together with some other contingencies

were deducted from the maximum purchase price to arrive at a "Provisional

Purchase Price" of $898,880.

      The final purchase price depended upon the Purchase Price Adjustment. -

The Purchase Price Adjustment would be determined based on a number of

factors including whether Centech was able to collect the Questionable Assets,

Centech's post-closing inventory sales, and its sales of new products provided by

GCS's key supplier. The final purchase price would be set on July 31, 2013, the•

"true-up" date. On that day, the Purchase Price Adjustment would be applied to

the provisional purchase price to determine the final purchase price. The final

purchase price could not exceed $1.026 million.

       Centech made a cash down payment and gave GCS a promissory note

for the remainder with Graff and Black each specified as 50 percent personal

guarantors.

       Initially Centech made regular payments on the promissory note and Graff

sent Porter monthly sales reports as required by the APA. Relations between

Black and Graff began to break down until Centech ended up firing Black.

       In July 2013, shortly before the true-up date, Graff wrote to Porter,

accusing him and GCS of fraudulently misrepresenting the validity/collectability of

the Questionable Assets and of withholding information about Black's dishonesty




                                         3
No. 74805-0-1/4

and bad character. Graff claimed that Centech was entitled to a deeply

discounted final purchase price, but Porter did not agree.

      After making some reduced payments, Centech stopped making any

payments on the Promissory Note by July 2014. GCS sued Centech for breach

of the APA, and sued Black and Graff for breach of their personal guaranties.

      GCS settled with Black, and proceeded to trial against Centech and Graff.

Centech and Graff claimed they were fraudulently induced to enter into the APA.

They claimed GCS misrepresented the value and collectability of its assets, and

had they known how Black treated his partners, that he couldn't meet sales

goals, that he demanded extortion money and that he twisted their deal, Centech

and Graff never would have entered into the APA and Graff would not have

signed the guarantee.

       In response, GCS argued that Graff had thoroughly examined its books

and records, used what he learned to negotiate favorable terms in the APA, and

had ample evidence of Black's dealings before entering into business with him.

      After a 12-day trial, the jury found in favor of GCS on all counts; it rejected

Centech and Graff's claims that they were induced by fraud or negligent

misrepresentation. The jury found Centech liable for $453,837 before interest

and attorney fees. It found that Graff's personal guarantee for 50 percent of

Centech's payment obligations was enforceable.

      The trial court entered the final, clarified judgment including prejudgment

and post-verdict interest, costs and attorney fees totaling a judgment of

$922,455.12 against Centech and $528,738.16 against Graff.


                                         4
No. 74805-0-1/5

       Centech and Graff appeals.

                                JURY INSTRUCTIONS

       Centech argues that the trial court abused its discretion in refusing to

instruct the jury on warranty and what Centech considers to be other "necessary

definitions under the applicable law." We disagree.

       Jury instructions are sufficient when they allow a party to argue their

theory of the case, are not misleading, and when read as a whole "properly

inform the trier of fact of the applicable law."1 As long as these conditions are

met, no more is required, and the trial court may refuse to give augmenting

instructions or instructions that are cumulative, collateral, or repetitive.2 The trial

court may not give any instruction that is not supported by the evidence, and

"[t]he evidence must raise more than a mere possibility before a theory can be

submitted to the jury."3

       Whether a jury instruction reflects an accurate statement of law is

reviewed de novo.4 But "[t]he number and specific language of the instructions

are matters left to the trial court's discretion."5

       Centech claims that additional instruction was necessary on "contract

construction or interpretation," because otherwise the jury was left to "guess



       1 Bodin v. City of Stanwood, 130 Wn.2d 726, 732, 927 P.2d 240(1996).
       2 Id.; Havens v. C & D Plastics, Inc., 124 Wn.2d 158, 165-66, 876 P.2d 435
(1994).
       3 Glenn v. Brown, 28 Wn. App. 86, 88, 622 P.2d 1279 (1980)(quoting Bd. of
Regents of Univ. of Washington v. Frederick & Nelson, 90 Wn.2d 82, 86, 579 P.2d 346 .
(1978)); see State v. Benn, 120 Wn.2d 631, 654, 845 P.2d 289, cert. denied, 510 U.S.
944, 114 S. Ct. 382, 126 L. Ed. 2d 331 (1993).
       4 Joyce v. Dep't of Corrs., 155 Wn.2d 306, 323, 119 P.3d 825(2005).
       5 Leeper v. Dep't of Labor & Indus., 123 Wn.2d 803, 809, 872 P.2d 507(1994)
(quoting Douglas v. Freeman, 117 Wn.2d 242, 256-57, 814 P.2d 1160 (1991)).
                                            5
No. 74805-0-1/6

about the law applicable to the language of a complex APA." It argues that

"determining the meaning of a contract is a responsibility for the judge, applying

settled rules of construction."

       Here, the trial court instructed the jury as to the definition of a contract and

the meaning of a material breach, and it reviewed Centech's defenses and

affirmative defenses. It instructed the jury on GCS's burden to prove breach, and

Centech's burden to prove its affirmative defenses. Moreover, the trial court

instructed the jury on how to interpret the APA by instructing it:

       to give effect to the intent of the parties at the time they entered the
       contract, . .. to take into consideration all the language used in the
       contract, giving to the words their ordinary meaning, unless the
       parties intended a different meaning,. .. to determine the intent of
       the contracting parties by viewing the contract as a whole,
       considering the subject matter and apparent purpose of the
       contract, all the facts and circumstances leading up to and
       surrounding the making of the contract, the subsequent acts and
       conduct of the parties to the contract, and the reasonableness of
       the respective interpretations offered by the parties.[61

       These instructions correctly stated the law applicable to a breach of

contract action because they adequately explained the applicable law, they were

not misleading, and they allowed the parties to argue their theories of the case.7

       Centech argues that the jury needed clear instructions on what a warranty

is, that proof of scienter or intent is not needed on a breach of warranty claim,

and what the particular warranty clause in the APA entailed. It argues that the

trial court abused its discretion in refusing to give an instruction that repeated the

exact language set out in section 4 of the APA on the "Representations and


      6 Clerk's Papers at 333; 6 WASHINGTON PRACTICE: WASHINGTON PATTERN JURY
INSTRUCTIONS: CIVIL 301.05 (6th ed. 2012).
      7 Bodin, 130 Wn.2d at 732.

                                          6
No. 74805-0-1/7

Warranties of the Seller," even though the jury was provided with a copy of the

APA, including the warranty provisions. These arguments are unpersuasive.

       First, as noted by the trial court, it would have been inappropriate to give

another definition of warranty when the APA already defined that term.

Moreover, these proposed instructions merely augmented the instructions the

trial court decided to give and were potentially confusing to the jury.8

       Centech relies on Mega v. Whitworth College, as support for its contention

that additional instructions were necessary.9 But in that case the appellate court

only affirmed the trial court's own determination that it had erred when it

instructed the jury on contract interpretation by allowing the jury to interpret and

apply extrinsic evidence, in the form of an earlier letter, to an employment

contract.19 After trial, the trial court had determined as a matter of law that the

contract should be interpreted without resorting to extrinsic evidence, and

ordered a new trial on that basis." On appeal, this court gave "great deference.

. . to the trial court's decision to grant a new trial," because a "tenable basis

exist[ed]for the court's new trial order."12

       Here, unlike in Mega, the trial court did not decide that it had erroneously

instructed the jury on a matter of law. Because the instructions given

satisfactorily explained Washington law in a manner that allowed any reasonable

jury to decide the issues before it, the trial court did not abuse its discretion in



       8 Id. at 732; Havens, 124 Wn.2d at 165-66.
       9 138 Wn. App. 661,670,158 P.3d 1211 (2007).
       10 Id. at 672.
       11 Id.
       12 Id.

                                           7
No. 74805-0-1/8

refusing to include Centech's instructions as unnecessary and potentially

confusing to the jury.13

        Finally, Centech argues that the jury should have been instructed on the

defense of frustration of purpose because "one of its obligations under the

contract, hiring Mr. Black as head of sales, made it impossible to even begin to

perform the other obligations." We again disagree.

        First, Centech cites to no authority in support of its contention that the trial

court erred in refusing this proposed instruction so we need not consider the

merits of this contention.14 In any event, Centech is wrong on the merits as well.

        The doctrine of frustration is applicable:

       [w]here, after a contract is made, a party's principal purpose is
       substantially frustrated without his fault by the occurrence of an
       event the non-occurrence of which was a basic assumption on
       which the contract was made, his remaining duties to render
       performance are discharged, unless the language or the
       circumstances indicate the contrary."[15]

If the supervening event that frustrated the purpose of the contract "was, or

should reasonably have been,foreseen by the parties" and there is no provision

in the contract "then an inference that the risk was assumed by the promisor is

justified."16




        13Barnett v. Sequim Valley Ranch, LLC, 174 Wn. App. 475, 492-93, 302 P.3d
500 (2013).
       14 See DeHeer v. Seattle Post-Intelliqencer, 60 Wn.2d 122, 126, 372 P.2d 193
(1962); King Aircraft Sales, Inc. v. Lane, 68 Wn. App. 706, 717, 846 P.2d 550(1993).
       15 Wash. State Hop Producers, Inc., Liquidation Trust v. Goschie Farms, Inc.,
112 Wn.2d 694, 700, 773 P.2d 70(1989)(quoting Restatement(Second) of Contracts §
265 (1979)).
       16 Weyerhaeuser Real Estate Co. v. Stoneway Concrete, Inc., 96 Wn.2d 558,
563, 637 P.2d 647 (1981).
No. 74805-0-1/9

       The trial court refused to instruct the jury on the defense of frustration of

purpose because, although the APA specified that Black would join Centech,

there was insufficient evidence to show that his failure to perform in that role

would support the defense of frustration of purpose as a matter of law.17

       Centech produced no evidence that Black's failure to perform once he

joined Centech was unforeseeable nor that his adequate performance was "a

basic assumption on which the contract was made."18 To the contrary, Black's

failure was foreseeable because both Graff and Porter testified that Graff knew

about the alleged misrepresentations and malfeasance concerning Black.

       For example, during the negotiations leading up to the APA, Graff learned

that Black was making misrepresentations and last-minute demands. Before

executing the APA, Porter had discovered that Black had revised GCS's financial

statement, moving the LOG from "current liabilities" to "paid in capital." A loan

officer and Porter alerted Graff that Black had improperly altered GCS's financial

statements.

       Also, shortly before the parties were due to finalize the purchase and sale,

Black demanded payment in order to release all claims he had as an owner of

GCS even though he had previously agreed to sign the release without

consideration. Graff had also learned that Black had used GCS funds to pay his

personal attorney and that Black had only agreed to go forward if Porter and

Hennesy agreed to ratify this use of personal funds.



       17See Goschie Farms, 112 Wn.2d at 704.
       186 WASHINGTON PRACTICE: WASHINGTON PATTERN JURY INSTRUCTIONS: CIVIL
302.10 (6th ed. 2012).
                                          9
No. 74805-0-1/10

       Despite the erroneous financial statement, Black's demand for a release

payment, and a caution from Centech's counsel about going into business with

Black, Graff chose to proceed with the purchase and sale negotiations. He never

asked Porter or Hennessy anything about Black, and specifically told Porter that

he did not want to know about Porter's problems with Black and their problems

through GCS.

       Based on Centech's failure to introduce evidence that warranted an

instruction on the defense of frustration of purpose, the trial court did not abuse

its discretion in refusing to instruct the jury on that theory.19

                                       SETOFF

       Centech contends that the trial court abused its discretion in refusing to

apply a $386,000 offset or setoff to the judgment against it. It claims that the trial

court's reasoning for denying the setoff is unknown because it did not enter any

findings of fact or conclusions of law. We disagree.

       Under Washington law, the party who claims an offset has the burden of

proving his or her claim.29 In addition, a court does nat need to apply an offset to

any settlement amounts that have not been paid.21

       This court reviews the trial court's decision on whether to grant an offset

for abuse of discretion.22



       19 Weyerhaeuser Real Estate Co., 96 Wn.2d at 563.
       29 Harmony at Madrona Park Owners Ass'n v. Madison Harmony Dev., Inc., 160
Wn. App. 728, 735, 253 P.3d 101 (2011); Maziarski v. Bair, 83 Wn. App. 835, 841, 924
P.2d 409(1996).
       21 See Brewer v. Fibreboard Corp., 127 Wn.2d 512, 532, 901 P.2d 297 (1995).
       22 Eagle Point Condo. Owners Ass'n v. Coy, 102 Wn. App. 697, 701, 9 P.3d 898
(2000).
                                           10
No. 74805-0-1/11

       As part of the APA, both Graff and Black signed guarantees for 50 percent

of any liability imposed on Centech. Before trial, GCS settled with Black who

agreed to pay $225,000 over 36 months at 5 percent interest. The obligation to

pay this $225,000 amount was secured by a deed of trust on Black's home. The

settlement was also secured with a confession of judgment for $386,000, which

in turn was coupled "with a covenant not to execute except in the event of a

default in payment." The confession of judgment included a 10-day right to cure

provision.

       In response to GCS's motion for entry of judgment, Centech requested a

setoff against the verdict of $386,000 in light of Black's confession of judgment,

claiming that otherwise a double recovery would result. GCS explained that the

settlement amount was $225,000 while the $386,000 confession ofjudgment

was contingent because it would only be executed upon if Black defaulted on the

settlement agreement and failed to cure that default within ten days.

       The trial court agreed with GCS and refused to apply any setoff.

       Centech characterizes the settlement with Black as an amount

"recovered" by GCS, and an amount that GCS "received" from Black, and claims

that a setoff is necessary to prevent double recovery. But as of the date that

Centech requested a setoff, Black had not yet paid any of the settlement amount.

Moreover, although Centech claims there is no evidence that GCS will not collect

that amount, it previously conceded that Black was unlikely to make payment on

the amount owed.




                                        11
No. 74805-0-1/12

       In support of its argument that setoff was warranted before Black paid,

Centech cites to Coulter v. Asten Group, Inc., claiming that in that case the trial

court applied the full amount of a setoff against the concurrent liability of other

liable parties, even though the settlement amount had yet to be paid.23 We are

unpersuaded.

       In Coulter, this court held that, in the absence of any evidence showing

that the total settlement amount would not be paid, the trial court did not abuse

its discretion in offsetting the judgment by the total value of the settlement

agreement.24 But the holding in Coulter affirming the trial court's decision to

apply an offset before settlement funds were paid does not prove that a different.

result would be an abuse of discretion, especially when payment of the

settlement funds appears unlikely.

       GCS has agreed that, to the extent Black pays, Centech will be entitled to

a partial satisfaction of the judgment against it. Until then, Centech is not entitled

to offset the judgment by the amount of the settlement, and the trial court did not

abuse its discretion in refusing to apply an offset to the judgment.25

       Finally, Centech argues that because the trial court did not enter findings

of fact and conclusions of law to support its decision to deny any offset, this court

must remand so that the trial court can do so. Centech claims that such findings

and conclusions are required by CR 52. Centech is wrong.




       23 155 Wn. App. 1, 10-11, 230 P.3d 169(2010).
       24 Id. at 12.
       25 Brewer, 127 Wn.2d at 532.

                                          12
No. 74805-0-1/13

       CR 52(a)(1) and (2) specify when the trial court must find the facts and

specifically state its conclusions of law. CR 52(a)(5) states that findings of fact

and conclusions of law are not necessary for decisions on motions, with certain .

exceptions not relevant here. Therefore we reject Centech's contention.

                              PREJUDGMENT INTEREST

       Centech claims that the trial court abused its discretion in awarding pre-

judgment interest because the amount of liability could not be determined before -

trial and required the exercise of opinion or discretion. We disagree.

       Washington permits prejudgment interest for liquidated claims only.26 "A

'liquidated' claim is a claim 'where the evidence furnishes data which, if believed,

makes it possible to compute the amount with exactness, without reliance on

opinion or discretion!"27 In contract cases, this means that prejudgment interest

is allowed when the amount due "is determinable by computation with reference

to a fixed standard contained in the contract."28

       We review a trial court's decision on whether to award prejudgment

interest for abuse of discretion.29

       Centech notes that section 2.2 of the APA provides for certain

adjustments to the purchase price depending on whether Centech was able to

collect on certain accounts using "best collection efforts." It argues that, as of the




       26   Hansen v. Rothaus, 107 Wn.2d 468, 472, 730 P.2d 662(1986).
       27   Id. (quoting Prier v. Refrigeration Eng'q Co., 74 Wn.2d 25, 32, 442 P.2d 621
(1968)).
       28Prier, 74 Wn.2d at 32.
       29Scoccolo Const., Inc. ex rel. Curb One, Inc. v. City of Renton, 158 Wn.2d 506,
519, 145 P.3d 371 (2006).
                                             13
No. 74805-0-1/14

true-up date, July 31, 2013, GCS was challenging whether Centech has used

best collection efforts, so the purchase price was unliquidated before trial.

       As additional support for its argument, Centech notes that "the APA plainly

requires GCS to adjust the purchase price down proportionately to the difference"

between the actual sales made by Centech and the Earn-Out Target." Finally, it

notes that GCS conceded during trial that it had erred in calculating total sales

and erroneously increased the putative purchase price by over $47,000. We are

unpersuaded.

       While there is a provision in the APA calling for Centech to use "best

efforts" in collecting accounts receivables and selling inventory, that provision

was never at issue during trial. Porter testified that GCS was not contesting

whether Centech used best efforts, so there would be no testimony introduced on

that issue. He also agreed that he would take Graff's word for the amount of

unsold inventory and conceded that all the remaining questionable accounts

receivable were uncollectible.

       As to the Earn-Out Target, Porter agreed that there was a computational

error because one of the accounts, Lucid Tech, was initially placed in both the

accounts receivable column and the earn-out column. But, this was an

accounting error that was easily corrected. Such an error does not prevent the

claim from being liquidated.30 After correcting the error, Porter applied the

formula set forth in Section 2.2 of the APA and testified that the final amount

owed was $453,837, the exact amount the jury awarded.



       30 Id. at 519-20; Prier, 74 Wn.2d at 33.

                                            14
No. 74805-0-1/15

      Accordingly, the trial court did not abuse its discretion in awarding

prejudgment interest.

                               ATTORNEY FEES

      GCS requests an award of attorney fees on appeal. An award is proper,

subject to its compliance with RAP 18.1.

      "A contractual provision for an award of attorney's fees at trial supports an

award of attorney's fees on appeal under RAP 18.1."31

      The APA and Graff's guaranty provide for attorney fees to the prevailing

party and the trial court awarded attorney's fees to GCS. Because the APA and

guaranty provided for an award of attorney fees at trial, we grant GCS's request

for attorney fees on appeal pursuant to RAP 18.1.32

      We affirm. We grant GCS's request for fees on appeal, subject to

compliance with RAP 18.1.




WE CONCUR:




       31 Edmundson v. Bank of Am., 194 Wn. App. 920, 932-33, 378 P.3d 272(2016).
       32 Id.

                                        15
