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Hahn v. Yale Northwest Materials Handling Co.

May 27, 1997


Appeal from Superior Court of King County. Docket No: 94-2-09753-9. Date filed: 11/21/95. Judge signing: Hon. John M. Darrah.

Authored by Susan R. Agid. Concurring: H. Joseph Coleman, Ann L. Ellington.

The opinion of the court was delivered by: Agid

AGID, J. -- Yale Northwest Materials Handling Co., Inc. terminated Stanley Hahn's employment, and Hahn sued Yale, alleging five causes of action. The trial court dismissed his wrongful withholding of wages, wrongful termination, and defamation claims on summary judgment. Hahn accepted Yale's $20, 000 CR 68 settlement offer and requested entry of judgment, including an additional amount for attorney fees and discovery motion expenses. The trial court denied his motion for entry of judgment, ruling that the $20,000 sum included attorney fees and expenses. Hahn argues that the $20,000 sum did not include attorney fees because they were not explicitly called out in the offer. We agree and reverse the trial court on that issue, affirm its dismissal of his wrongful termination claim, and remand to enter judgment and determine reasonable attorney fees.


In 1993, Yale Northwest Materials Handling Co., Inc. terminated Stanley Hahn's employment. He sued Yale alleging: (1) breach of promise of specific treatment; (2) breach of express contract; (3) liquidated damages for wrongful withholding of wages; (4) wrongful termination; and (5) defamation. He also requested attorney fees under RCW 49.48.030. After the trial court dismissed three of the claims, it ordered mediation, but Hahn and Yale could not reach an agreement.

On October 12, 1995, Yale served Hahn with an offer which read:

NOTICE IS HEREBY GIVEN that the defendants, in accordance with CR 68, *fn1 offer to allow judgment to be taken against them by the plaintiff in this action in the amount of twenty thousand dollars ($20,000.00), inclusive of taxable costs now accrued. Pursuant to CR 68, this offer shall be deemed withdrawn unless written notice of acceptance is received within ten (10) days after the service hereof.

Hahn accepted the offer eight days later and requested entry of judgment for the principal amount of $20,000, attorney fees of $20,525, and other expenses of $500. *fn2 On October 25, Yale wrote to Hahn explaining that the $20,000 included attorney fees, but Hahn did not respond to the letter. Yale then filed a response in the trial court arguing that the $20,000 included attorney fees and expenses. The trial court agreed and denied Hahn's motion for entry of judgment.


Hahn first contends that the trial court erred when it ruled that Yale's $20,000 offer included attorney fees because the "costs" referred to in the offer did not include attorney fees under the controlling statute, RCW 49.48.030. *fn3 "Costs" includes attorney fees only when the underlying statute defines them as such. Marek v. Chesny, 473 U.S. 1, 9, 105 S. Ct. 3012, 87 L. Ed. 2d 1 (1985). When an underlying statute does not define costs as including attorney fees, those fees are separate from and in addition to the costs referred to in CR 68. Hodge v. Development Servs. of Am., 65 Wash. App. 576, 580-83, 828 P.2d 1175 (1992). RCW 49.48.030 allows employees to recover attorney fees, but does not define them as costs. Yale's $20,000 sum therefore could not include attorney fees unless the offer specifically stated otherwise. Because it includes "costs" only and makes no separate reference to fees, the trial court erred in ruling that fees were included in the offer. Hodge, 65 Wash. App. at 583; see also Fiorito v. Goerig, 27 Wash. 2d 615, 619, 179 P.2d 316 (1947) (the term "costs" does not include attorney fees absent a statute or agreement providing otherwise).

Yale argues that "costs" is an ambiguous term and the court should therefore consider extrinsic evidence showing that its offer did include fees under Berg v. Hudesman, 115 Wash. 2d 657, 801 P.2d 222 (1990). Under RCW 49.48.030 and Hodge, 65 Wash. App. 576, 828 P.2d 1175, the term "costs" is unambiguous as used in this context, and extrinsic evidence is not admissible to contradict the term's plain meaning. Berg, 115 Wash. 2d at 669. Therefore, we cannot use evidence of the parties' prior dealings to contradict the legal meaning of "costs" in this context. *fn4

Hahn also argues that Yale's $20,000 offer did not include the $500 court-imposed terms which he characterizes as "expenses." He argues that "costs" and "expenses" have different meanings. We have held, however, that costs are expenses incurred in prosecuting or defending a suit. Fiorito, 27 Wash. 2d at 619. Hahn cites no contrary authority. The terms are synonymous, and the trial court properly found that Yale's $20,000 offer included the $500 awarded by the court.

It also properly dismissed Hahn's wrongful termination claim, concluding that his termination did not violate public policy as a matter of law. We review that ruling de novo. Kruse v. Hemp, 121 Wash. 2d 715, 722, 853 P.2d 1373 (1993).

Employers cannot terminate employees for reasons that contravene public policy. Gardner v. Loomis Armored Inc., 128 Wash. 2d 931, 935, 913 P.2d 377 (1996). Hahn argues that Yale's action violated the Consumer Protection Act, RCW 19.86, and therefore contravened public policy because Yale terminated him after he objected to certain employment practices. The Act covers only "unfair or deceptive acts or practices in the conduct of any trade or commerce," RCW 19.86.20, and specifically excludes employee services from the scope of commerce. RCW 19.86.070 (labor is not a commodity or article of commerce). Bruce v. Northwest Metal Prods. Co., 79 Wash. App. 505, 516-17, 903 ...

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