                                                                                           Filed
                                                                                     Washington State
                                                                                     Court of Appeals
                                                                                      Division Two

                                                                                    September 25, 2018



    IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

                                        DIVISION II
 CHADWICK and APRIL FERGUSON, and                                  No. 49723-9-II
 CARING HANDS PRESCHOOL,

                       Appellants,
        vs.

 CORA KRUGER, MARTHA STANDLEY,                              UNPUBLISHED OPINION
 CHUCK STANDLEY, LEAH CAPILI,
 ANTONIO CAPILI, CAMMEY ROCCO,
 RALPH ROCCO, NANCY MANGLONA, ED
 MANGLONA, JODY HITCHINGS, CHRIS
 HITCHINGS, LAURA THOMPSON and
 marital community of, MICHAEL SCHMITT
 and marital community of, HELANA
 CODDINGTON, ERIN BELL, JEFFREY
 BELL, NATASHA SOUDER, ROSE
 JOHNSTON, YVETTE CLINE,
 WASHINGTON STATE DEPARTMENT OF
 EARLY LEARNING, WASHINGTON STATE
 DEPARTMENT OF SOCIAL AND HEALTH
 SERVICES,

                       Defendants,

 MARILYN WALSH and JACK WALSH,

                       Respondents.


       MAXA, C.J. – April and Chadwick Ferguson appeal the trial court’s summary judgment

order dismissing their claims against Marilyn and Jack Walsh relating to a lease agreement

between the parties for a property the Walshes own. The Fergusons filed a complaint against the
No. 49723-9-II


Walshes and several other parties relating to the operation and licensing of the Fergusons’

childcare business on the leased property.

          We hold that the trial court did not err in (1) certifying the summary judgment order as

final under CR 54(b) despite the fact that additional claims against other parties remained

unresolved; (2) denying the Fergusons’ CR 56(f) motion to continue the Walshes’ summary

judgment motion; (3) dismissing on summary judgment the Fergusons’ claims for breach of

contract, unjust enrichment, breach of the covenant of quiet enjoyment, constructive eviction,

and civil conspiracy; and (4) awarding the Walshes their reasonable attorney fees under RCW

4.84.185 based on a finding that the Fergusons’ claims were frivolous.

          Accordingly, we affirm the trial court’s summary judgment order dismissing the

Fergusons’ claims and the trial court’s award of attorney fees to the Walshes. We also award the

Walshes their reasonable attorney fees on appeal for all claims except for unjust enrichment and

civil conspiracy.

                                               FACTS

Lease Agreement and Termination

          The Walshes own a building in Sequim. Marilyn1 operated a state-licensed pre-school

and childcare business in the building for 22 years. In 2006, the Walshes leased the building to a

third person. That person vacated the building in 2012, and the Walshes advertised the building

for rent.

          In April 2012, the Fergusons agreed to lease the building and signed a lease agreement

with the Walshes. The Fergusons previously had operated a childcare center at another location

and intended to open a new childcare center in the building. The lease stated that the Fergusons



1
    We refer to individual parties by their first names to avoid confusion. We intend no disrespect.


                                                   2
No. 49723-9-II


wanted to “lease the premises for the purpose of conducting a child day care and preschool.”

Clerk’s Papers (CP) at 388. The lease further stated, “The premises are to be used for the

purposes of a child day care and pre-school. Lessee shall restrict its use to such purposes, and

shall not use or permit the use of the premises for any other purpose without the written consent

of [the Walshes].” CP at 389. But the lease did not expressly warrant that the building was

suitable for use as a childcare center.

       The lease provided for an initial period of four one-month terms beginning in May, with

the lease to automatically renew for a year beginning September 1. The rent was $500 per month

during the first four-month period and $1,500 per month thereafter.

       In order to begin operations, the Fergusons required business and building licenses. This

process included approvals from the Washington Department of Early Learning, the health

department, and the fire marshal. Generally it takes at least 90 days to obtain the necessary

licenses. In July, the fire marshal unexpectedly required the installation of an automatic fire

suppression system before the building could be licensed. Such a system had not previously

been required. The Walshes contracted for the system to be installed at their expense.

       As part of the fire suppression system, the attic had to be reinsulated. The parties agreed

that Chadwick would provide labor at a reduced rate, with the Walshes providing the necessary

materials. The Walshes agreed to compensate the Fergusons for this work.

       The Fergusons intended to open their childcare center no later than September, and

specifically before school started. However, the required building improvements caused a delay

in obtaining the necessary licenses. The Fergusons’ childcare center opened for business on

September 19.




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No. 49723-9-II


       The Fergusons operated a childcare center in the building for almost two and a half years.

In February 2015, the Department of Early Learning suspended the Fergusons’ childcare license

and shut down the business.

       Throughout their tenancy, the Fergusons were not current on their rent payments. By

March, the Walshes calculated that the Fergusons’ arrearages for rent and utilities combined to

exceed $9,000. The parties initially attempted to negotiate an alternative payment plan, but the

Fergusons did not make the first required payment in March. On March 16, the Walshes served

a three-day notice for the Fergusons to pay rent or vacate the premises. The Fergusons vacated

the property and were deemed to have abandoned the building and their lease on April 3.

Lease with Fergusons’ Employees

       In 2014, before the Fergusons’ license had been revoked, two of the Fergusons’

employees, Helena Coddington and Erin Bell, asked the Walshes whether the lease could be

transferred if they purchased the business from the Fergusons. The employees did not purchase

the business, and there were no additional conversations about leasing until after the Fergusons

abandoned the property. However, in April 2016, the Walshes signed a lease for the building

with Coddington and Bell.

Fergusons’ Complaint

       In December 2015, the Fergusons filed a complaint in Kitsap County against the Walshes

and a variety of other defendants, including Coddington, Bell, and employees of the Department

of Early Learning. The complaint stated several causes of action specifically against the

Walshes, as well as causes of action against other defendants relating to the Fergusons’ license

suspension.




                                                4
No. 49723-9-II


       After some procedural matters were resolved, the Fergusons filed a timely amended

complaint in Clallam County on May 26, 2016. The Fergusons asserted 16 causes of action

related to the lease of the childcare center, including that the Walshes breached the lease

agreement by failing to have the building suitable for its intended purpose as a childcare center,

were unjustly enriched by work the Fergusons did on the property, constructively evicted the

Fergusons by requiring unfair amounts of rent and requiring the Fergusons to perform duties not

required by contract, and conspired with Coddington and Bell to transfer the business and

building to the Fergusons’ employees.

Summary Judgment Order

       The Walshes filed an answer on June 10, and on June 30 filed a motion for summary

judgment as to all claims applicable to them. The parties twice continued the summary judgment

hearing, ultimately to September 16. The Fergusons then filed a CR 56(f) motion to continue the

summary judgment motion, arguing that they had insufficient time to conduct discovery after

filing their amended pleading. The Fergusons noted that they had been waiting to begin

discovery until the parties’ pretrial issues had been resolved, and submitted an affidavit

identifying evidence they intended to produce.

       The trial court denied the Fergusons’ motion to continue the summary judgment motion.

The court stated that the Fergusons had not shown a reasonable basis for failing to provide

responsive declarations, and had not shown that witnesses were unavailable to provide timely

affidavits or declarations. The court added that the information sought by the Fergusons in their

proposed discovery would not raise a material issue of fact on any claim against the Walshes.

       The trial court granted the Walshes’ summary judgment motion. The court ruled that the

Fergusons had not presented any evidence that supported any of their claims against the




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No. 49723-9-II


Walshes. The trial court also found that the Walshes were entitled to an award of attorney fees

and costs under RCW 4.84.185. The court found that the action considered in its entirety was

frivolous, and that the Fergusons’ claims against the Walshes were not supported by any rational

argument in law or fact. The court also noted that paragraph 25.1 of the lease agreement

provided for an award of attorney fees. The court awarded the Walshes attorney fees and costs

totaling $11,142.75.

       The trial court found that there was no just reason for delay in entering judgment

dismissing the claims against the Walshes. The trial court later entered written findings under

CR 54(b), allowing for entry of final judgment as to some but not all of the action’s parties or

claims.2 The court found that the Fergusons’ claims against the Walshes were almost entirely

separate from any claims against the other defendants. The only cause of action that included

other defendants was the allegation of civil conspiracy, but the trial court found there was no

evidence to support that allegation. The court also found,

       3. Based upon the record before the Court, . . . the remaining issues before the
       Court do not involve [the Walshes]. Future action in the case will not change the
       Court’s ruling to dismiss the claims against [the Walshes]. The questions remaining
       before the trial court do not involve the issues on appeal.

       4. An appeal by Ferguson of the order dismissing [the Walshes] will not delay the
       trial of the remaining issues. The dismissal of [the Walshes] simplified the issues
       for trial. Had [the Walshes] not been dismissed, it is likely that the causes of action
       against them would have been severed and heard in a separate trial.

CP at 5-6.




2
  The trial court initially omitted written findings as required by CR 54(b). A commissioner of
this court noted the omission and ruled that if the parties failed to obtain the required findings,
the notice of appeal would be converted to a notice of discretionary review. The parties obtained
and filed the trial court’s CR 54(b) findings as required.



                                                 6
No. 49723-9-II


       The Fergusons challenge the trial court’s CR 54(b) order and appeal the trial court’s order

denying their continuance motion, granting the Walshes’ summary judgment motion, and

awarding attorney fees to the Walshes.

                                            ANALYSIS

A.     CR 54(b) CERTIFICATION

       The Fergusons argue that the trial court erred in entering final judgment against the

Walshes under CR 54(b). They claim that dismissing the Walshes prejudices their claims of civil

conspiracy against the remaining defendants. We disagree.

       1.   Legal Background

       An order generally is not appealable as a matter of right until a final judgment has been

entered that resolves all claims regarding all parties. Loeffelholz v. Citizens for Leaders with

Ethics & Accountability Now, 119 Wn. App. 665, 693, 82 P.3d 1199 (2004); see RAP 2.2(a)(1).

However, an appeal may be taken from a judgment that did not resolve all claims if there is “an

express direction by the trial court for entry of judgment and an express determination in the

judgment, supported by written findings, that there is no just reason for delay.” RAP 2.2(d).

       Similarly, CR 54(b) provides that the trial court may direct the entry of a final judgment

as to fewer than all claims or parties “only upon an express determination in the judgment,

supported by written findings, that there is no just reason for delay and upon an express direction

for the entry of judgment.” CR 54(b) applies in situations where it could be unjust to delay entry

of a judgment on a distinct claim until the entire case had been finally adjudicated. Gull Indus.,

Inc. v. State Farm Fire & Cas. Co., 181 Wn. App. 463, 480, 326 P.3d 782 (2014).

       A final judgment under CR 54(b) is appropriate when there is “ ‘(1) more than one claim

for relief or more than one party against whom relief is sought; (2) an express determination that




                                                 7
No. 49723-9-II


there is no just reason for delay; (3) written findings supporting the determination that there is no

just reason for delay; and (4) an express direction for entry of the judgment.’ ” Id. (quoting

Hulbert v. Port of Everett, 159 Wn. App. 389, 405-06, 245 P.3d 779 (2011)). Here, the

Fergusons contest only the second CR 54(b) factor, whether there was just reason for delay.

           To determine whether there is no just reason for delay, the trial court should consider five

factors:

           “(1) [T]he relationship between the adjudicated and the unadjudicated claims, (2)
           whether questions which would be reviewed on appeal are still before the trial court
           for determination in the unadjudicated portion of the case, (3) whether it is likely
           that the need for review may be mooted by future developments in the trial court,
           (4) whether an immediate appeal will delay the trial of the unadjudicated matters
           without gaining any offsetting advantage in terms of the simplification and
           facilitation of that trial, and (5) the practical effects of allowing an immediate
           appeal.”

Gull Indus., 181 Wn. Ap. at 480 (quoting Hulbert, 159 Wn. App. at 406).

           We review a decision to enter judgment under CR 54(b) for an abuse of discretion. Gull

Indus., 181 Wn. Ap. at 481. We give substantial deference to the trial court’s judgment to apply

CR 54(b). Nelbro Packing Co. v. Baypack Fisheries, LLC, 101 Wn. App. 517, 525, 6 P.3d 22

(2000).

           2.   Analysis

           Here, the Fergusons address only the first factor relevant to whether there was no just

reason for delay. They argue that the trial court erred in entering final judgment on the civil

conspiracy claim against the Walshes because they also have unadjudicated conspiracy claims

against Coddington and Bell.

           However, even though the Fergusons’ civil conspiracy claim against the Walshes may be

the same as their claim against Coddington and Bell, judicial economy would not necessarily be

best served by delaying this appeal. The Fergusons’ lawsuit involves two largely separate



                                                    8
No. 49723-9-II


factual issues – one relating to the Fergusons’ lease, which primarily involves the Walshes, and

another involving the Fergusons’ licensing, with which the Walshes are not involved. As the

trial court found, dismissing the Walshes will simplify the remaining issues for trial and will not

delay trial of those issues.

        The Fergusons also argue that the other claims against the Walshes are related to the

alleged conspiracy. But as addressed below, the Fergusons have not presented evidence to

support their claims for constructive eviction or breach of the covenant of quiet enjoyment. And

their claim for breach of contract relating to the fire suppression system is not conceivably

related to an agreement between the Walshes, Coddington, and Bell. Because those claims are

proper for appellate review at this time, judicial economy favors resolving all claims against the

Walshes, including the civil conspiracy claim.

        Accordingly, we hold that the trial court did not abuse its discretion in certifying its

summary judgment order as final under CR 54(b).

B.      CR 56(f) MOTION FOR CONTINUANCE OF SUMMARY JUDGMENT

        The Fergusons argue that the trial court erred in denying their motion to continue the

Walshes’ summary judgment motion. We disagree.

        CR 56(f) allows the trial court to order a continuance to allow a party opposing summary

judgment to conduct discovery. Bavand v. OneWest Bank, FSB, 196 Wn. App. 813, 821-22, 385

P.3d 233 (2016). A trial court may deny a continuance for any of three reasons: “ ‘(1) the

requesting party does not offer a good reason for the delay in obtaining the desired evidence; (2)

the requesting party does not state what evidence would be established through the additional

discovery; or (3) the desired evidence will not raise a genuine issue of material fact.’ ” Id. at 822

(quoting Pitzer v. Union Bank of Cal., 141 Wn.2d 539, 556, 9 P.3d 805 (2000)). We review a




                                                  9
No. 49723-9-II


trial court’s denial of a CR 56(f) motion for a continuance for an abuse of discretion. Bavand,

196 Wn. App. at 822.

        Regarding the first CR 56(f) element, the trial court found that the Fergusons had “not

shown a reasonable basis for not having provided responsive declarations as they suggest they

need.” CP at 63. The Fergusons claim that they were unable to obtain declarations from key

witnesses because the witnesses were defendants or otherwise were unwilling to cooperate. But

the Fergusons could have scheduled the depositions of these witnesses. Instead, they conducted

no discovery in the six months between when they filed their complaint and when the Walshes

filed their summary judgment and conducted no discovery even after the motion was continued

for over two months. The Fergusons argue that they could not conduct discovery until all parties

had filed answers, but the Fergusons could have compelled the parties to file their answers.

        Regarding the second CR 54(b) element, the Fergusons identified evidence that would be

established through additional discovery. However, the Fergusons also acknowledged that they

had personal knowledge of many of the facts they allege are relevant to their claims.

        Regarding the third CR 54(b) element, the evidence that would be established through

discovery that the Fergusons identified would not raise a genuine issue of material fact on their

claims against the Walshes. On the breach of contract claim, the Fergusons claimed that they

knew a person who has knowledge of the property’s noncompliance with code requirements.

But it is uncontested that the building was noncompliant before the Walshes installed the fire

suppression system. The Fergusons did not identify how this additional information would

create an issue of fact.

        On the unjust enrichment claim, the Fergusons testified that they knew the people who

assisted with maintenance work on the property. However, because the Walshes’ unrebutted




                                                10
No. 49723-9-II


evidence is that they were never contacted about the maintenance issues the Fergusons’ identify,

to raise an issue of material fact the Fergusons would have to identify how the maintenance was

unjust. Even if the Fergusons show what work was completed, they have not demonstrated that

they will present evidence that any injustice was done.

       On the covenant of quiet enjoyment and constructive eviction claims, the Fergusons have

not identified any evidence they intend to introduce.

       On the civil conspiracy claim, the Fergusons testified that they knew people who would

testify about how Coddington and Bell intended to rent the property, and who would testify

about several defendants’ intentions to enter into a lease with the Walshes. They also state that

they would provide internet records showing that Coddington and Bell intended to lease the

building, and they would subpoena Coddington’s phone records to show her communications

with Walsh. But the Fergusons do not identify how any of this information will demonstrate an

unlawful purpose.

       Accordingly, we hold that the trial court did not err in denying the Fergusons’ CR 56(f)

motion to continue on any of their claims.

C.     SUMMARY JUDGMENT ON THE FERGUSONS’ CLAIMS

       1.    Standard of Review

       We review summary judgment orders de novo. Keck v. Collins, 184 Wn.2d 358, 370,

357 P.3d 1080 (2015). On summary judgment, we construe all evidence and reasonable

inferences in favor of the nonmoving party. Id. Summary judgment is appropriate when the

record shows “no genuine issue as to any material fact” and “the moving party is entitled to a

judgment as a matter of law.” CR 56(c); see Keck, 184 Wn.2d at 370. A genuine issue of

material fact exists if the evidence would be sufficient for a reasonable jury to find in favor of the




                                                 11
No. 49723-9-II


nonmoving party. Id. at 370. “If reasonable minds can reach only one conclusion on an issue of

fact, that issue may be determined on summary judgment.” Sutton v. Tacoma Sch. Dist. No. 10,

180 Wn. App. 859, 865, 324 P.3d 763 (2014).

       On summary judgment, the moving party has the initial burden to show there is no

genuine issue of material fact. Lee v. Metro Parks Tacoma, 183 Wn. App. 961, 964, 335 P.3d

1014 (2014). A moving defendant meets this burden by showing that there is an absence of

evidence to support the plaintiff’s case. Id. Once the moving party has made such a showing,

the burden shifts to the nonmoving party to set forth specific facts that rebut the moving party’s

contentions and show a genuine issue of material fact. See Elcon Constr., Inc. v. E. Wash. Univ.,

174 Wn.2d 157, 169, 273 P.3d 965 (2012).

       2.   Breach of Contract Claim

       The Fergusons argue that the trial court erred in granting summary judgment on their

breach of contract claim because the Walshes had a duty to provide premises that met the lease’s

intended purpose. We disagree.

            a.   Legal Background – Contract Interpretation

       To demonstrate a breach of contract, the plaintiff must show that (1) the contract imposed

a duty on the defendant, (2) the defendant breached that duty, and (3) an economic loss occurred

as a result of the breach. Myers v. Dep’t of Soc. & Health Servs., 152 Wn. App. 823, 827-28,

218 P.3d 241 (2009). We interpret contracts according to the contracting parties’ intent. Id. at

828.

       We apply an objective manifestation theory of contracts, which attempts to determine the

parties’ intent based on objective manifestations in the agreement rather than unexpressed

subjective intent of the parties. Pelly v. Panasyuk, 2 Wn. App. 2d 848, 865, 413 P.3d 619




                                                12
No. 49723-9-II


(2018). Subjective intent is generally irrelevant if intent can be determined from the actual

words of the contract. Brogan & Anensen, LLC v. Lamphiear, 165 Wn.2d 773, 776, 202 P.3d

960 (2009).

              b.   No Breach of Express Duty

       The Fergusons appear to argue that the Walshes breached the lease because the building

was not suitable for the use stated in the lease – as a child day care and preschool – without the

installation of a fire suppression system. They apparently claim that the delay caused by that

installation was responsible for the fact that they opened their business on September 19, 2012

rather than earlier in September as they had planned.

       The lease agreement did state that the Fergusons intended to use the building as a child

day care and preschool, and that the Fergusons were required to limit their use to those purposes

unless the Walshes consented. However, the Walshes made no express warranty that the

building was immediately suitable for such purposes without the need to comply with the

requirements of licensing authorities. The Walshes also made no express guarantee that the

Fergusons would be able to obtain all necessary licenses by the beginning of September.3

       Further, it is undisputed that the fire marshal’s requirement that a fire suppression system

be installed before he would certify the building was unexpected and had never been required

before. The Fergusons do not allege that the Walshes somehow were responsible for any delay.

In fact, it is undisputed that the Walshes promptly arranged for the installation at their expense.

       The Fergusons also seem to argue that their rent should have been prorated or eliminated

during the period of construction. But there is no lease term requiring the Walshes to reduce rent



3
  The Walshes represented in the lease that the premises were “in fit condition for use by lessee,”
but that representation clearly relates to whether the premises were “in a good state of repair and
in sanitary condition.” CP at 390.


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No. 49723-9-II


in this situation. The Fergusons allude to the lease provision that requires the Walshes to reduce

rent if the premises are partially destroyed. But installation of a fire suppression system does not

represent a partial destruction of the premises.

       Finally, the Fergusons argue that an issue of fact exists regarding the reason for the

lease’s reduced rent for the first four months. They claim that the reduced rent could not have

related to the installation of the fire suppression system. But the Walshes do not disagree, and

instead state that the rent reduction was to give the Fergusons time to obtain the necessary

licensing and open the childcare center. And the fact that the rent was reduced for the first four

months is not material to whether the Walshes breached the lease agreement.

       We hold that the Fergusons failed to present evidence creating a genuine issue of material

fact on their claim that the Walshes breached a duty in the lease agreement. Therefore, the trial

court did not err in granting summary judgment on the Fergusons’ breach of contract claim.

       3.    Unjust Enrichment Claim

       The Fergusons argue that an issue of fact exists regarding whether the Walshes were

unjustly enriched by work the Fergusons completed on the property. We disagree.

             a.   Legal Principles

       Unjust enrichment allows a plaintiff to recover the value of a benefit retained by the

defendant but without any contractual relationship between the parties. Bircumshaw v. Wash.

State Health Care Auth., 194 Wn. App. 176, 205, 380 P.3d 524 (2016). To prove unjust

enrichment, the plaintiff must demonstrate that (1) the defendant received a benefit, (2) the

benefit was at the plaintiff’s expense, and (3) the circumstances make it unjust for the defendant

to retain the benefit with no payment. Puget Sound Sec. Patrol, Inc. v. Bates, 197 Wn. App. 461,

475, 389 P.3d 709 (2017).




                                                   14
No. 49723-9-II


       A person is unjustly enriched when she profits or enriches herself at the expense of

another and does so in a manner contrary to equity. Norcon Builders, LLC v. GMP Homes VG,

LLC, 161 Wn. App. 474, 490, 254 P.3d 835 (2011). Therefore, enrichment alone is not enough –

it is essential that the enrichment be unjust both under the circumstances and as between the

parties to the transaction. Id. The mere fact that the defendant has benefitted from the plaintiff

does not justify recovery. Id. Unjust enrichment applies only if the circumstances make it unjust

for the defendant to keep the benefit without compensation. Id.

            b.    Analysis

       Here, the Fergusons appear to argue that the Walshes were unjustly enriched by work the

Fergusons completed to improve the property. The Fergusons submitted affidavits testifying that

Chadwick performed work to insulate the building’s attic, and that the Walshes did not help

maintain the property’s parking lot, plumbing, or electrical, resulting in the Fergusons hiring

labor or doing work to fix those issues themselves.

       Regarding the insulation work, there is no evidence that the Walshes received a benefit at

the Fergusons’ expense. The Fergusons submitted an invoice for labor and materials on the

project to the Walshes, and they do not claim that the Walshes failed to pay the invoice. The

only evidence approaching unjust enrichment for the insulation work is the Fergusons’ testimony

that Chadwick provided his own labor for free, and invoiced the Walshes only for materials and

labor provided by others. But the Fergusons’ testimony is that they agreed to this arrangement.

The Fergusons’ agreement to complete work on the property without compensation for their

labor does not create an issue of fact on whether the Walshes were unjustly enriched.

       Regarding maintenance work on the parking lot, plumbing, and electrical, the Fergusons’

evidence is limited to a single statement in their affidavits that the Walshes “would not help” and




                                                15
No. 49723-9-II


that the Fergusons “had to either hire labor and manage that labor or we had to do the labor

ourselves.” CP at 326. This testimony is conclusory, lacks any specifics about the nature of the

problems – how severe they were, how long they lasted, how much it cost to remedy the issues –

and is unsupported by any evidence. Conclusory statements of this type are typically insufficient

to show an issue of fact. SentinelC3, Inc. v. Hunt, 181 Wn.2d 127, 140, 331 P.3d 40 (2014).

And Marilyn’s unrebutted declaration statement was that the Walshes completed repairs to the

building that they were made aware of and that they never avoided a requested repair.

       We hold that the trial court did not err in granting summary judgment on the Fergusons’

unjust enrichment claim.

       4.   Breach of Covenant of Quiet Enjoyment Claim

       The Fergusons argue that the trial court erred in dismissing their claim that the Walshes

breached the covenant of quiet enjoyment. We disagree.

       The covenant of quiet enjoyment is an implied agreement in every lease that the tenant’s

possession will not be disturbed by the landlord or another party who has a legal right superior to

the tenant. 17 WILLIAM B. STOEBUCK & JOHN W. WEAVER, WASHINGTON PRACTICE: REAL

ESTATE: PROPERTY LAW § 6.30, at 350 (2004). Courts have applied the covenant of quiet

enjoyment when a landlord prevents the tenant from gaining possession of the leased property,

Draper Mach. Works, Inc. v. Hagberg, 34 Wn. App. 483, 486, 663 P.2d 141 (1983), locks out a

tenant, Olin v. Goehler, 39 Wn. App. 688, 692, 694 P.2d 1129 (1985), or fails to ensure the

property is in adequate condition to avoid closure by the government. Cherberg v. Peoples Nat.

Bank of Wash., 88 Wn.2d 595, 600, 564 P.2d 1137 (1977).

       Here, the Fergusons did not present any evidence that actions by the Walshes breached

the covenant of quiet enjoyment. The Fergusons argue that they were harassed, intimidated, and




                                                16
No. 49723-9-II


threatened by the Walshes in order to remove them from the property, but submitted no evidence

to support that argument. The uncontested record shows that the Fergusons fell behind on rent

payments and that the parties attempted to negotiate a payment plan for the unpaid rent. The

Walshes then served a three-day notice for the Fergusons to pay or vacate and the Fergusons

abandoned the property. There is no indication that this action was unlawful or violated the lease

agreement.

       We hold that the trial court did not err in granting summary judgment on the Fergusons’

claim for breach of the covenant of quiet enjoyment.

       5.    Constructive Eviction Claim

       The Fergusons argue that the trial court erred in dismissing their claim that they were

constructively evicted by the Walshes. We disagree.

       Constructive eviction occurs when a landlord intentionally or injuriously interferes with a

tenancy, either by depriving the tenant of beneficial enjoyment of the leased property or

materially impairing the tenant’s enjoyment. Old City Hall LLC v. Pierce County AIDS Found.,

181 Wn. App. 1, 8, 329 P.3d 83 (2014). In the context of a commercial lease, constructive

eviction can also occur when the landlord seriously interferes with a tenant’s conduct of business

on the property. Id. at 8-9. If a tenant has been constructively evicted, he or she has no

obligation to pay rent if he or she abandons the property. Id. at 8.

       Here, the Fergusons have not demonstrated that an issue of material fact exists regarding

their claim of constructive eviction. The Fergusons do not cite any evidence that shows the

Walshes interfered with their tenancy, and nothing in the record shows any type of improper

interference. The Walshes’ attempt to negotiate a plan for the Fergusons to pay unpaid rent and




                                                 17
No. 49723-9-II


the service of a notice to pay or vacate did not constructively evict the Walshes. Ennis v. Ring,

56 Wn.2d 465, 472, 341 P.2d 885 (1959).

       We hold that the trial court did not err in granting summary judgment on the Fergusons’

constructive eviction claim.

       6.    Civil Conspiracy Claim

       The Fergusons argue that the trial court erred in dismissing their civil conspiracy claim,

which was based on allegations that Marilyn talked with the Fergusons’ employees, Coddington

and Bell, about entering into a lease while the Fergusons were still leasing the property. We

disagree.

             a.   Legal Principles

       To establish a claim for civil conspiracy, the Fergusons must demonstrate through clear,

cogent, and convincing evidence that “ ‘(1) two or more people combined to accomplish an

unlawful purpose, or combined to accomplish a lawful purpose by unlawful means; and (2) the

conspirators entered into an agreement to accomplish the conspiracy.’ ” Woody v. Stapp, 146

Wn. App. 16, 22, 189 P.3d 807 (2008) (quoting All Star Gas, Inc., of Wash. v. Bechard, 100 Wn.

App. 732, 740, 998 P.2d 367 (2000)).

       When addressing on summary judgment a claim for which the standard is clear, cogent,

and convincing evidence, we view the evidence in light of the substantive evidentiary burden.

Woody, 146 Wn. App. at 22. Therefore, we determine whether, viewing the evidence in the light

most favorable to the plaintiff, a rational trier of fact could find that the nonmoving party

provided clear, cogent, and convincing evidence to support his or her claim. Id. To avoid

summary judgment, the nonmoving party must present evidence sufficient to establish with




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“high probability” the fact at issue. Portmann v. Herard, 2 Wn. App. 2d 452, 462-63, 409 P.3d

1199 (2018).

            b.   Analysis

       Here, the Fergusons have not presented evidence of either prong of civil conspiracy.

First, they have not demonstrated that Marilyn and the employees had an unlawful purpose or

engaged in unlawful means. They allege that Marilyn and the employees discussed leasing the

property while the Fergusons’ tenancy was ongoing, but do not demonstrate how that might be

unlawful. A potentially unlawful purpose that could apply is tortious interference with a

business expectation. See Life Designs Ranch, Inc. v. Sommer, 191 Wn. App. 320, 337, 364 P.3d

129 (2015). But the Fergusons cannot show at least one element of that claim – damage

resulting from the interference – because they voluntarily abandoned the property and do not

contest the Walshes’ notice to pay or vacate. Id. at 338.

       Second, the Fergusons have not shown any evidence of an agreement between Marilyn

and the employees. The only evidence in the record of communication between them is an email

from Marilyn to the Fergusons, stating that Coddington had informed Marilyn of problems with

the property’s plumbing. This evidence does not show a “high probability” that Marilyn and the

employees entered into an agreement for an unlawful purpose. Portmann, 2 Wn. App. 2d at 463.

       Accordingly, we hold that the trial court did not err in granting summary judgment on the

Fergusons’ civil conspiracy claim.

D.     ATTORNEY FEES IN TRIAL COURT

       The Fergusons argue that the trial court erred in awarding the Walshes attorney fees at

trial under CR 11 or RCW 4.84.185. We disagree.




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       Attorney fees are allowed under RCW 4.84.185 if the trial court enters a written finding

that the action was frivolous and advanced without reasonable cause. An action is frivolous if it

cannot be supported by rational argument on the law or fact. Hanna v. Margitan, 193 Wn. App.

596, 612, 373 P.3d 300 (2016). For a court to award attorney fees under RCW 4.84.185, the

lawsuit must be frivolous in its entirety. Skimming v. Boxer, 119 Wn. App. 748, 756, 82 P.3d

707 (2004). But an action may be frivolous as to some defendants, even if it is not frivolous as

to others. Hanna, 193 Wn. App. at 612. The purpose of RCW 4.84.185 is to discourage abuse

of the legal system, allowing for attorney fees when a party must defend itself against a meritless

claim asserted for the purpose of harassment, delay, nuisance, or spite. Skimming, 119 Wn. App.

at 756. We review a trial court’s decision under RCW 4.84.185 for a “clear showing of abuse”

of the trial court’s discretion. Hanna, 193 Wn. App. at 612.

       Here, the discussion above demonstrates that the Fergusons’ claims have no merit. The

trial court reviewed all of the evidence, considered all of the Fergusons’ arguments, and ruled

that their claims were frivolous. We hold that the trial court did not abuse its discretion in

making this determination.

E.     ATTORNEY FEES ON APPEAL

       The Walshes request attorney fees on appeal under RAP 18.1(a) and an attorney fee

provision in the parties’ lease. A party prevailing before this court may seek reasonable attorney

fees on appeal when a contract provides for an attorney fee award in the trial court. First-

Citizens Bank & Tr. Co. v. Harrison, 181 Wn. App. 595, 607, 326 P.3d 808 (2014). The parties’

lease provides, “If either party retains an attorney to enforce any provision, covenant or condition

of this lease . . . the defaulting party agrees to pay reasonable attorney’s fees.” CP at 393.




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        Because the Fergusons’ claims for breach of contract, breach of the covenant of quiet

enjoyment, and constructive eviction were based on the parties’ obligations under the lease, we

hold that the Walshes are entitled to recover attorney fees and costs incurred in responding to the

Fergusons’ appeal on those issues. However, because the Fergusons’ unjust enrichment and civil

conspiracy claims were not based on the parties’ contract, the Walshes are not entitled to

attorney fees for time spent responding to those portions of the Fergusons’ appeal.

                                          CONCLUSION

        We affirm the trial court’s summary judgment order dismissing the Fergusons’ claims

and the trial court’s award of attorney fees to the Walshes. We also award the Walshes their

reasonable attorney fees on appeal for all claims except for unjust enrichment and civil

conspiracy.

        A majority of the panel having determined that this opinion will not be printed in the

Washington Appellate Reports, but will be filed for public record in accordance with RCW

2.06.040, it is so ordered.



                                                      MAXA, C.J.


 We concur:




 JOHANSON, J.



 SUTTON, J.




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