United States District Court, W.D. Washington, Tacoma
ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT, DKT. ##
B. Leighton United States District Judge
MATTER is before the Court on the parties' Cross-Motions
for Summary Judgment. Dkt. # 10. This case arises from Defendant
Travelers Casualty and Surety Company of America's
refusal to pay an attorney fees and costs award obtained by
the City of Olympia against NOVA Contracting,
Inc.-Olympia's former contractor and Travelers's
assured. Travelers contends that it has no obligation to pay
because the fees were awarded pursuant to a Washington
statute, rather than a contractual provision. For the
following reasons, the Court GRANTS the City of Olympia's
Motion and DENIES Travelers's Motion.
21, 2014, Olympia and NOVA entered a Contract to construct a
culvert associated with the Olympia Woodland Trail
Improvements Project. NOVA Contract, Dkt. # 12-7, at 25. The
one-page document provides, among other things, that NOVA
would be liable for liquidated damages for late completion of
the project. Id. However, it also incorporates and
binds NOVA to the 2012 Washington State Standard
Specifications for Road, Bridge, and Municipal Construction
(“WSDOT Specs”). Id. Section 1-07.1 of
the WSDOT Specs state that the contractor (in this case NOVA)
“shall always comply with all Federal, State, tribal,
or local laws, ordinances, and regulations that affect Work
under the Contract.” 2012 WSDOT Specs, Washington State
Department of Transportation, § 1-07.1 (Dec. 27, 2019),
available at: https://www. wsdot.wa.
principal on a public works project, NOVA was legally
required to obtain a performance bond with a surety company
guaranteeing that NOVA would “faithfully perform all
provisions of [the] contract.” RCW 39.08.010(1)(a).
NOVA obtained such a Bond from Travelers. Dkt. # 12-1. The
Bond guarantees performance of “all obligations under
the Contract” and only becomes void once those
obligations have been “well and faithfully
September 19, 2014, Olympia terminated its Contract with NOVA
for the latter's default. NOVA then sued Olympia on
December 4, 2014, with Olympia counterclaiming for liquidated
damages. On March 27, 2015, Olympia offered to accept payment
in the amount of $25, 000 from NOVA as settlement of all
claims. Dkt. # 12-6. This settlement offer (which NOVA
rejected) was made pursuant to RCW 39.04.240, which expands
the attorney fees award provisions of RCW 4.84.250-280 for
actions arising out of a public works contracts. Id.
Under RCW 4.84.260, a party is deemed to have
“prevailed” for purposes of an attorney fee award
“when the recovery, exclusive of costs, is as much as
or more than the amount offered in settlement by the
[party].” The parties do not dispute that Olympia's
September 19 settlement offer met the requirements of RCW
39.04.240 and RCW 4.84.250-280.
prevailed in the litigation with NOVA and received a judgment
for $42, 140.70 in liquidated damages, $55, 150.00 in
attorney fees, and $257.00 in costs. Dkt. # 12-10 at 4.
Olympia attempted to tender the judgment to Travelers for
payment, but Travelers would only agree to pay the liquidated
damages. Dkt. # 12-11. Meanwhile, NOVA appealed the trial
court's decision and lost, further increasing the amount
of attorney fees and costs awarded to Olympia. Olympia now
seeks $119, 467.20 plus interest from Travelers to cover its
fees and costs from the litigation with NOVA. Complaint, Dkt.
# 1-1 at 7-9.
judgment is proper “if the pleadings, the discovery and
disclosure materials on file, and any affidavits show that
there is no genuine issue as to any material fact and that
the movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(c). In determining whether an issue of fact
exists, the Court must view all evidence in the light most
favorable to the nonmoving party and draw all reasonable
inferences in that party's favor. Anderson Liberty
Lobby, Inc., 477 U.S. 242, 248-50 (1986); Bagdadi v.
Nazar, 84 F.3d 1194, 1197 (9th Cir. 1996). A genuine
issue of material fact exists where there is sufficient
evidence for a reasonable factfinder to find for the
nonmoving party. Anderson, 477 U.S. at 248. The
inquiry is “whether the evidence presents a sufficient
disagreement to require submission to a jury or whether it is
so one-sided that one party must prevail as a matter of
law.” Id. at 251-52. The moving party bears
the initial burden of showing that there is no evidence which
supports an element essential to the nonmovant's claim.
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
Once the movant has met this burden, the nonmoving party then
must show that there is a genuine issue for trial.
Anderson, 477 U.S. at 250. If the nonmoving party
fails to establish the existence of a genuine issue of
material fact, “the moving party is entitled to
judgment as a matter of law.” Celotex, 477
U.S. at 323-24.
Attorney Fees and Costs Award under RCW 39.04.240
case turns on one legal issue: whether the Performance Bond
obligates Travelers' to pay the attorney fees and costs
awarded to Olympia pursuant to RCW 39.04.240. Travelers
argues that, because the Bond only guarantees NOVA's
performance of “all obligations under the Contract,
” Dkt. # 12-1, Travelers is not required to pay fees
and costs that were awarded pursuant to a statute not
referenced in the Contract. Olympia responds that RCW
39.04.240 is incorporated into the Contract with NOVA as a
matter of law, making the state court's award guaranteed
under the Bond.
bonds are “in the nature of insurance contracts”
and “subject to the rules applicable to simple contract
law.” Colorado Structures, Inc. v. Ins. Co. of the
W., 161 Wash.2d 577, 586 (2007) (internal quotations
omitted). “If unambiguous, [a bond] should be construed
in accordance with the parties' plain intent, [but] [i]f
ambiguous, it should be construed in favor of liability of
the surety.” Id. at 588 (internal quotation
omitted). A bond and the underlying contract between the
contractor and the obligee should be considered together to
ascertain the obligation assumed by the ...