Black Diamond Development Company, Llc, Et Al., Apps. V. Union Bank, N.a., Res.

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
BLACK DIAMOND DEVELOPMENT
COMPANY, LLC, a Washington
Limited Liability Corporation;
LEE WITTENBERG, individually and
on behalf of his marital community;
WAYNE COURTNEY, individually and
on behalf of his marital community,
Appellants,
v.
UNION BANK, N.A.	j •'•'»•)
Respondent.
No. 71114-8-1
DIVISION ONE
UNPUBLISHED OPINION
FILED: 	March 30, 2015
c
Leach, 	J. 	— 	Black 	Diamond 	Development 	LLC 	and 	guarantors 	Lee
Wittenberg and Wayne Courtney appeal the dismissal of their claims against
Union Bank for an alleged breach of a permanent financing agreement and an
award of attorney fees to Union Bank. 	Union Bank challenges the timeliness of
this appeal. 	Because the court resolved Union Bank's counterclaim no earlier
than October 17, 2013, Black Diamond timely appealed. 	Because the alleged
financing agreement omits material terms and does not satisfy the requirements
of 12 	U.S.C. § 	1823(e), 	Union 	Bank has no contractual obligation to extend
permanent financing to Black Diamond. 	But because Black Diamond put Union
Bank on notice of its improper accounting claim and the court did not consider

NO. 71114-8-1/2
the merits of the claim, the trial court erroneously dismissed it. 	As a result, no
party has yet prevailed in this case, and any award of attorney fees is premature.
We affirm in part, reverse in part, and remand for proceedings consistent with
this opinion.
FACTS
On November 28, 2005, Black Diamond Development LLC and Frontier
Bank made 	an 	agreement for 	the 	construction financing 	of two 	commercial
buildings in Black Diamond, Washington. 	They signed 11 related documents for
the transaction. 	These included a 	construction 	loan agreement, 	commercial
guarantees executed by Black Diamond members Lee Wittenberg and Wayne
Courtney, a deed of trust, a promissory note, and the notice of final agreement.
In 	2007, 	Black 	Diamond 	and 	Frontier 	Bank 	signed 	two 	documents
extending 	the 	maturity date 	of the 	construction 	loan 	agreement. 	The 	first
extended it 90 days, and the second extended it until September 25, 2010.
On 	April 	30, 	2010, 	Frontier 	Bank 	failed. 	Union 	Bank 	became 	the
successor in interest to the Federal Deposit Insurance Corporation (FDIC) as
receiver of Frontier Bank and acquired the Black Diamond construction loan. 	In
May 2010, 	Union 	Bank contacted 	Black Diamond 	to 	inform 	it that the 	loan
agreement would mature in September. 	Black Diamond challenged that date
based on 	its understanding that it had 	an agreement with Frontier Bank for

NO. 71114-8-1/3
permanent financing. 	From 2010 to July 2012, 	Black Diamond continued to
make 	principal 	and 	interest 	payments 	to 	Union 	Bank, 	despite 	the 	loan
agreement's maturation.
In January 2012, Union Bank issued a notice of default to Black Diamond,
demanding 	all funds 	owed 	under the 	loan 	agreement. 	Union 	Bank 	issued
revised notices in June and August of 2012, stating the amount it claimed Black
Diamond owed after it defaulted by failing to pay the full balance owed when the
loan 	matured 	in 2010. 	In response, 	Black Diamond denied the default and
requested information about Union Bank's default calculation.
Procedural History
On August 9, 2012, Black Diamond filed a complaint, asserting breach of
contract and estoppel claims. 	For relief, it requested damages and a permanent
injunction to prevent foreclosure or pursuit of default as long as it made the
"required 	monthly 	payment 	on 	the 	loan." 	On 	September 	11, 	2012, 	Black
Diamond filed a "motion for preliminary injunction and order directing defendant
to provide an accounting." 	The trial court did not rule on this motion. 	To avoid
foreclosure, 	Black 	Diamond 	paid 	"'under 	protest'" 	the 	amount 	Union 	Bank
claimed due and informed the bank that it did "'not agree that the bank has
properly calculated the amount that is owing for many reasons, which is the basis
of the lawsuit.'"

NO. 71114-8-1/4
Union Bank filed its answer and counterclaim on June 18, 2013. 	In the
counterclaim, 	it alleged that Black Diamond owed it attorney fees 	under the
construction loan agreement and Wittenberg and Courtney owed them under
their guarantees. 	Black Diamond, Wittenberg, and Courtney filed a reply on July
3, 2013, denying any default, alleging that Wittenberg and Courtney's guarantee
liability ended when Black Diamond paid the full amount Union Bank claimed,
and asserting seven affirmative defenses.
In late 2012, Black Diamond served its first discovery request, asking for
documents revealing the amount and calculations for every line item charged on
default. 	On July 2, 2013, the trial court granted Black Diamond's motion to
compel Union Bank's production of internal documents.
On July 19, 2013, 	Union 	Bank filed 	a motion for summary judgment.
Black Diamond filed a motion to stay any hearing on this motion until after Union
Bank provided the ordered discovery materials. 	The trial court granted summary
judgment to Union Bank on August 30, 2013. 	The trial court decided that Union
Bank 	had 	no obligation 	to 	provide 	permanent financing 	to 	Black 	Diamond
because the alleged agreement "is missing some material provisions that defeat
it as 	a 	contract. . . . [I]f 	I'm 	looking 	at the 	commitment 	letter, 	there 	aren't
enough—what is left to negotiate is really a vast majority of the contract and not
simply small terms."

NO. 71114-8-1/5
On September 9, 2013, Black Diamond filed a motion for clarification and
reconsideration, asking the court to address its accounting claim based upon
Union Bank's alleged misapplication of payments. 	On October 2, 2013, the trial
court denied 	Black Diamond's motion. 	On October 17, 2013, the trial court
entered an order awarding Union Bank $93,154.54 in attorney fees against Black
Diamond, Wittenberg, and Courtney. 	On October 31, 2013, the court entered a
final judgment, dismissing all claims with prejudice and holding Black Diamond,
Wittenberg, and Courtney jointly and severally liable for the attorney fees.
Black 	Diamond, 	Wittenberg, 	and 	Courtney appealed 	on 	November 5,
2013.
STANDARD OF REVIEW
This court reviews 	a 	summary judgment motion 	de 	novo.1 	A court
properly grants summary judgment if no genuine issue of material fact exists and
the moving party is entitled to a judgment as a matter of law.2
ANALYSIS
Timeliness of Appeal
Union Bank challenges this court's authority to hear this appeal, claiming
Black Diamond, Wittenberg, 	and 	Courtney filed 	it too 	late. 	Black Diamond
1 Snohomish County v. Ruqg, 	115 Wn. App. 	218, 224, 61 	P.3d 1184
(2002).
2 CR 56(c).
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NO. 71114-8-1/6
argues that it had 30 days after the final judgment entered on October 31, 2013,
to appeal all issues decided by the trial court. 	Union Bank argues that the time to
appeal should be measured from one of two dates, either August 30, when the
trial court entered its order granting Union Bank summary judgment, or October
1, when the trial court entered its order denying Black Diamond's motion for
reconsideration 	and 	clarification. 	It argues 	that 	those 	orders 	resolved 	all
substantive claims, leaving undecided only issues of attorney fees.
RAP 5.2(a) generally requires that a party seeking appellate review of a
superior court decision file a notice of appeal within 30 days after the trial court's
entry of a final judgment. 	For purposes of this deadline, this rule considers as
final a judgment that finally decides all substantive issues between the parties but
reserves for a future decision "an award of attorney fees or costs."3
A timely notice of appeal of a trial court decision relating to attorney
fees and costs does not bring up for review a decision previously
entered in the action that is otherwise appealable under rule 2.2(a)
unless a timely notice of appeal has been filed to seek review of the
previous decision.[4]
A motion 	for reconsideration of a final judgment extends the appellate
filing deadline to 30 days after the trial court's entry of an order on that motion.5
3 Carrara. LLC v. Ron & E Enters.. Inc.. 137 Wn. App. 822, 825-27, 155
P.3d 161 (2007); RAP 2.2(a)(1).
4 RAP 2.4(b).
5 RAP 5.2(e); Brower v. Pierce County, 96 Wn. App. 559, 562, 984 P.2d
1036 (1999) (citing Buckner. Inc. v. Berkev Irriq. Supply, 89 Wn. App. 906, 911-
12,951 P.2d 338 (1998)).
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NO. 71114-8-1/7
"[Ojnly in extraordinary circumstances and to 	prevent a 	gross miscarriage of
justice"6 will an appellate court extend the time to file a notice of appeal. 	Black
Diamond has not requested an extension of time.
When a case includes multiple claims,
the court may direct the entry of a final judgment as to one or more
but fewer than all of the 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.[7]
If the trial court has not decided all of the claims or all of the rights and liabilities
of the parties, a judgment "is subject only to discretionary review until the entry of
a final judgment adjudicating all the claims, counts, rights, and liabilities of all the
parties."8
On August 30, 2013, the trial court entered a summary judgment order
dismissing Black Diamond's claims with prejudice. 	But the court did not decide
Union Bank's counterclaim for attorney fees against Black Diamond under the
construction loan agreement and against Wittenberg and Courtney under their
commercial guarantees. 	The plaintiffs asserted seven affirmative defenses to the
counterclaim, many of which challenged the viability of the contracts providing
the basis for the counterclaim. 	The order denying Black Diamond's motion for
6 RAP 18.8(b).
7 CR 54(b).
8 RAP 2.2(d).
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NO. 71114-8-1/8
reconsideration also did not address the merits of Union Bank's counterclaim or
the plaintiffs' affirmative defenses to it. 	Until the court decided the merits of these
issues, it had not entered a final judgment that commenced the 30-day appeal
period.
Union Bank cites Carrera, LLC v. Ron & E Enterprises, Inc.,9 and Bushonq
v. Wilsbach10 for the proposition that a 	party 	must appeal an 	order granting
summary judgment and dismissing all claims, though a court has not decided
attorney fees and costs. 	But as Black Diamond argues, in Carrera and Bushong
appellants appealed more than 30 days after a court decision resolving all claims
and establishing a right to recover fees. 	This precluded them from challenging
the earlier decision establishing a legal basis for the fees awarded by a later
decision.11 	The trial court's summary judgment order and 	its order denying
reconsideration left unresolved more than the amount of attorney fees and costs.
The court's October 17, 2013, order granting attorney fees resolved the seven
alleged 	affirmative defenses 	to 	the 	counterclaim 	as 	well as 	the 	individual
plaintiffs' liability on their guarantees. 	Thus, Carrera and Bushonq do not support
Union Bank's 	position. 	Because 	no final judgment resolving 	Union Bank's
9 137 Wn. App. 822, 825, 155 P.3d 161 (2007).
10 151 Wn. App. 373, 376-77, 213 P.3d 42 (2009).
11 Carrara, 137 Wn. App. at 826; Bushonq, 151 Wn. App. at 376.
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NO. 71114-8-1/9
counterclaim entered before October 17, 2013, Black Diamond timely filed its
notice of appeal on November 5, 2013.
Permanent Financing
Black 	Diamond 	contends that the 	record 	establishes the existence of
genuine issues of material fact about an agreement for permanent financing.
Union Bank responds that the record shows no genuine issues of material fact
exist about the failure of Black Diamond and 	Frontier to agree to necessary
terms, about the failure of Black Diamond to perform conditions required under
its alleged contract, or about the application of 12 U.S.C. § 1823(e) to bar Black
Diamond's claim.
Washington courts use an objective manifestation test to 	determine if
parties have formed a contract.12 	This means that the parties must objectively
manifest their mutual agreement to the contract terms.13 	In addition, a contract
for real estate financing "must be definite enough on 	material terms to allow
enforcement without the court supplying those terms."14
Black Diamond argues that Frontier Bank's loan commitment letter, the
2005 loan agreement documents, and later documents authored by a Frontier
Bank vice president meet these requirements or at least raise genuine issues of
12 Keystone Land & Dev. Co. v. Xerox Corp., 152 Wn.2d 171, 177, 94
P.3d 945 (2004).
13 Keystone Land & Dev., 152 Wn.2d at 177.
14 Setterlund v. Firestone. 104 Wn.2d 24, 25, 700 P.2d 745 (1985).
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NO. 71114-8-1/10
material fact. 	Union Bank disputes whether the court should consider some of
these documents and contends that they do not contain all of the material and
essential 	terms. 	It identifies 	as 	missing 	the 	loan 	amount, 	default 	terms,
prepayment terms, 	and 	cure 	rights. 	But 	Black 	Diamond 	responds that the
commitment letter and 	promissory note contain the amount agreed upon. 	It
claims the 2007 agreement, the promissory note, and the deed of trust provide
the agreed upon default terms and cure rights. 	It also argues that the 2007
agreement and the promissory note contain the prepayment terms.
Union Bank first argues RCW 19.36.110 prohibits the use of e-mail or
other correspondence to establish the rights and obligations of the parties. 	This
statute states, "The rights and obligations of the parties to a credit agreement
shall be determined solely from the written agreement." 	Because the documents
relied upon by Black Diamond do not establish an enforceable agreement, we do
not need to decide this issue.
Union 	Bank 	next 	argues 	that 	no 	mutual 	assent 	to 	necessary 	terms
occurred. 	In Hubbell v. Ward,15 the court identified 13 material terms absent from
the real estate contract in issue required to support a specific performance claim.
The contract contemplated a future purchase contract, but the parties had not
specified the terms of this contract. 	As a result, the court did not enforce the
15 40 Wn.2d 779, 782-83, 246 P.2d 468 (1952).
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NO. 71114-8-1/11
contract because no mutual assent occurred.16 The 13 necessary terms included
the right to default.17 A contract must also contain a price or amount.18
Black Diamond cites Farm Crop 	Energy, 	Inc. 	v. 	Old 	National 	Bank of
Washington19 to 	argue 	that 	the 	loan 	documents 	contained 	sufficient 	terms.
Though the Farm Crop court did not address the issue of what material terms an
agreement for permanent financing 	must contain and 	remanded the case on
different grounds, 	Black Diamond finds 	it instructive because the court tacitly
accepts a trial court jury instruction, stating, a "loan commitment is a written
contract which obligates the bank to loan money to the plaintiff... in accordance
with the terms and conditions of the commitment."20 	The commitment letter
produced in full by the dissent in that case contains certain terms—interest rate,
amortization, collateral, duration, payment schedule, and loan amount.21 	Black
Diamond argues that the Frontier Bank commitment letter with similar terms also
creates a contract.
But, 	as 	Union 	Bank correctly notes, 	Frontier Bank's loan commitment
letter 	offered 	no 	more 	than 	an 	"agreement 	to 	agree,"22 	unenforceable 	in
16 Hubbell, 40 Wn.2d at 786-87.
17 Hubbell, 40 Wn.2d at 782.
18 Hubbell, 40 Wn.2d at 780-81; Sea-Van Invs. Assocs. v. Hamilton, 125
Wn.2d 120, 129, 881 P.2d 1035 (1994).
19 109 Wn.2d 923, 750 P.2d 231 (1988).
20 Farm Crop, 109 Wn.2d at 938 n.2 (Callow, J., dissenting).
21 Farm Crop, 109 Wn.2d at 934-36 (Callow, J., dissenting).
22 See Keystone Land & Dev., 152 Wn.2d at 175-76.
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NO. 71114-8-1/12
Washington.23 The letter states, "When all conditions governing a roll over loan
have 	been 	met, 	Frontier 	Bank 	shall 	have 	the 	exclusive 	right 	to 	place 	the
permanent financing 	of the subject property for 	a 	maximum 	period 	of three
months at terms and conditions that are acceptable to Borrower and Lender."
A document contemplating future negotiations does not establish mutual
assent to a binding agreement.24 	To be enforceable, "[a] contract to enter into a
future contract must specify all its material and essential terms, and leave none
to be agreed upon as the result of future negotiations."25 	The commitment letter
cannot be read to promise more than permanent financing on future "terms and
conditions that are acceptable to Borrower and Lender." 	It plainly contemplates a
future agreement for permanent financing at unstated terms and conditions. 	The
documents identified by Black Diamond do not show any objective manifestation
of 	mutual 	intent 	to 	incorporate 	the 	terms 	of 	the 	2005 	loan 	documents 	in
permanent financing. 	At best, they reaffirm Frontier Bank's initial promise to
provide permanent financing on terms to be negotiated in the future.
Further, the record shows that Black Diamond never met the conditions
described 	in the documents 	it claims establish an agreement for permanent
financing. 	The commitment letter identified two 	conditions 	Frontier required
23 Keystone Land & Dev., 152 Wn.2d at 176.
24 Keystone Land & Dev., 152 Wn.2d at 179.
25 Hubbell, 40 Wn.2d at 784-85; Kruse v. Hemp, 121 Wn.2d 715, 722, 853
P.2d 1373(1993).
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NO. 71114-8-1/13
before making a loan for permanent financing: 	(1) construction of Building C and
(2) the aggregate collected rents of both buildings B and C equal $381,000 or
more. 	Black Diamond argues that it fulfilled the condition when it achieved
aggregate collected rent of $381,000 for building B alone. 	But it never built
Building C, and the record does not reveal that the parties agreed to waive that
condition.26 	At oral argument, 	Black Diamond conceded that the absence of
Building 	C 	would 	materially 	affect the 	value 	of the 	collateral 	it offered 	for
permanent financing.
Finally, Union Bank claims that 12 U.S.C. § 1823(e) bars Black Diamond's
contract claim. 	This statute limits the agreements enforceable against the FDIC
or its successor in interest. 	To be enforceable, the agreement must (1) 	be in
writing, (2) be executed by the parties contemporaneous with the acquisition of
the asset (permanent loan), and (3) be approved by the bank's board of directors
or loan committee, with this approval reflected in meeting minutes maintained
continuously by the bank as an official record.27 	An agreement must satisfy all
these 	requirements to 	be enforceable against the 	FDIC 	or 	its successor in
interest.28
26 See Sea-Van Invs.. 125 Wn.2d at 127.
2712 U.S.C. § 1823(e); D'Oench, Duhme & Co. v. Fed. Deposit Ins. Corp.,
315 U.S. 447, 456, 62 S. Ct. 676, 86 L. Ed. 956 (1942).
28 Bell & Murphy & Assocs., Inc. v. Interfirst Bank Gateway, N.A.. 894 F.2d
750, 754 (5th Cir. 1990); see Nw. Land & Inv.. Inc. v. New W. Fed. Sav. & Loan
Ass'n. 64 Wn. App. 938, 943-44, 827 P.2d 334 (1992).
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NO. 71114-8-1/14
Union 	Bank argues that no genuine issue of material fact exists as to
whether the parties fully and contemporaneously executed an agreement for
permanent financing. 	Black Diamond argues that the loan documents expressly
contained a permanent financing obligation, placing this situation outside of that
covered 	by 12 	U.S.C. § 	1823(e).29 	But "the proper inquiry is 'whether the
borrower lent himself to a scheme or arrangement that would be likely to mislead
or deceive 	banking 	authorities.'"30 	Black Diamond 	relies 	upon 	a 	2005 loan
agreement, a 	commitment letter, 	and 2007 agreements executed at different
times. 	These documents do not satisfy the requirement for document execution
contemporaneous with acquisition of the pertinent asset. 	12 U.S.C. § 1823(e)
bars Black Diamond's claims.
Improper Accounting
Black 	Diamond 	asserts 	that 	genuine 	issues 	of 	material 	fact 	exist
concerning its claim for "incorrect and excessive amounts" Union Bank charged it
on default and that the court erred in dismissing its motion for reconsideration
and clarification. 	Black Diamond contends the court failed to decide if Union
Bank improperly calculated the amount Black Diamond owed on default, as well
29 See In re Beitzell & Co., Inc.. 163 B.R. 637, 649 (Bankr. D.D.C. 1993)
("A careful examination of the cases finding that a claim or defense is barred by
D'Oench and/or § 1823(e) reveals that those defenses or claims are premised
solely on unrecorded agreements, promises or representations and not on any
obligation found explicitly in the loan documents.").
30 Beitzell, 163 B.R. at 646 (incorrectly Quoting D'Oench, 315 U.S. at 460).
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NO. 71114-8-1/15
as 	whether 	the 	bank 	charged 	Black 	Diamond 	for 	environmental 	regulation
compliance reviews and an appraisal after assuring Black Diamond it would not.
Union Bank asserts that Black Diamond did not plead this claim and that in any
case the improper accounting claim was not ripe for review.
Washington requires a party to give proper notice of a claim to opposing
parties in its pleadings through "'a concise statement of the claim and the relief
sought.'"31 	A complaint fails if it does not give defendants proper notice.32 	But
courts construe pleadings "to do substantial justice,"33 and even if a "claim 'is not
a vision of precise pleading,'" it may still give the notice required by CR 8.34
In its original complaint, Black Diamond alleged that it paid Union Bank
$61,350 as an up-front permanent loan commitment fee, that Union Bank did not
credit Black Diamond for loan payments, and that the bank improperly charged
Black Diamond for appraisal and environmental reviews. 	The complaint stated,
24. 	... Plaintiffs believe that Defendant has improperly calculated
the interest, failed to properly apply payments to principal and is
seeking 	repayment 	of 	improper 	amounts 	in the 	appraisal 	and
environmental 	review 	categories, 	as 	those 	costs 	relate,
31 	Champagne v. Thurston 	County, 	163 Wn.2d 69, 	84, 	178 P.3d 936
(2008) (quoting Pac. Nw. Shooting Park Ass'n v. City of Seguim, 158 Wn.2d 342,
352, 144 P.3d 276 (2006)); CR 8(a).
32 Champagne. 163 Wn.2d at 84.
33 CR 8(f).
34 Burnet v. Spokane Ambulance. 131 Wn.2d 484, 492, 933 P.2d 1036
(1997) (quoting Schoeninq v. Grays Harbor Cmtv. Hosp., 40 Wn. App. 331, 336-
37, 698 P.2d 593 (1985)).
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NO. 71114-8-1/16
substantially or in part, to the very loan which Plaintiffs sought and
Defendant refused to give.
In its answer and counterclaim, 	Union Bank affirmed the amounts it claimed
Black Diamond owed and denied the allegations in paragraph 24. 	We conclude
that Black Diamond sufficiently pleaded a claim that Union Bank failed to properly
calculate the amount owed on default.
Union Bank argues that Black Diamond proved its original complaint did
not assert this claim because it later served a 	proposed amended complaint,
specifically stating this claim before summary judgment and filed a motion for
clarification 	also 	addressing 	the 	improper 	accounting 	claim 	postsummary
judgment. 	Union Bank also argues that Black Diamond untimely attempted to
amend the complaint under CR 15(a) and King County Local Rule (KCLR) 4.2 by
surreptitiously adding the claim into its motion for clarification. 	The bank cites
Doyle 	v. 	Planned 	Parenthood 	of Seattle-King 	County, 	Inc..35 	Haselwood 	v.
Bremerton Ice Arena. Inc.,36 and Parry v. Windermere Real Estate/East, Inc.,37 to
35 31 Wn. App. 126, 132, 639 P.2d 240 (1982) (plaintiff improperly tried to
amend 	a 	complaint to 	include 	a 	products 	liability claim 	not 	recognized 	by
Washington).
36 137 Wn. App. 872, 889-90, 155 P.3d 952 (2007) aff'd sub nom. Estate
of Haselwood v. Bremerton Ice Arena, Inc., 166 Wn.2d 489, 210 P.3d 308 (2009)
(the Court of Appeals found 	no 	prejudice in the trial court's dismissal of the
motion to amend and claims were groundless because they alleged a violation of
Washington's public works act, chapter 39.04 RCW, though the case involved a
private project).
37 102 Wn. App. 920, 10 P.3d 506 (2000). 	Union Bank cites this case to
show that KCLR 4.2(a)(1) prohibits raising additional claims or defenses after the
date designated in the case schedule. 	But the court actually concludes that "it
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NO. 71114-8-1/17
support this position. 	But we do not find cases about late amendments to a
complaint helpful because we conclude that Black Diamond sufficiently pleaded a
claim for improper accounting in its original complaint. 	While Black Diamond's
proposed amended 	complaint more clearly asserted 	this claim, 	this clearer
statement does not alter the fact that paragraph 24 of its original complaint
provided sufficient notice to Union Bank.
Union Bank also claims that the improper accounting claim first became
ripe when Black Diamond asked Union Bank for its payoff demand in October
2012, after it filed its August 2012 complaint. 	To determine if a claim presents a
cause of action ripe for review, a court evaluates the fitness of the issues for
judicial review and the hardship that withholding consideration would bring to the
parties.38 	Union 	Bank first issued a 	notice of default to Black Diamond on
January 11, 2012. This notice demanded an aggregate amount of $2,767,089.79
due, with interest accruing daily. 	Union Bank issued a new notice on June 11,
2012. 	This default 	notice provides 	an 	accounting, 	demands 	payment, 	lists
consequences 	of default, 	and 	states 	that borrowers 	and 	guarantors have
recourse to the courts to "contest the alleged default on any proper ground." 	It
would defy logic to hold that a party's properly preserved defense is waived
merely 	by 	signing 	a 	form 	required 	by 	local 	rule 	for 	case 	scheduling 	and
management." Parry, 102 Wn. App. at 928.
38 First United Methodist Church v. Hearing Exam'r, 129 Wn.2d 238, 245,
916 P.2d 374 (1996).
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NO. 71114-8-1/18
includes a claim for costs including an "appraisal" of $11,300.00 and a fee for
"environmental" of $2,200.00. 	A final August 13, 2012, default notice contains
the same 	information. 	We 	conclude that the specific amounts 	Union Bank
demanded and the foreclosure 	Black Diamond faced 	if it did 	not pay those
amounts made the issue ripe for review.
The court erroneously found that "all of plaintiffs' 	claims arose out of
plaintiffs' mistaken belief that the Construction Loan Agreement obligated Union
Bank to extend permanent financing" and did not address the issue of an alleged
improper accounting. 	We reverse the dismissal of this claim.39
Equitable Estoppel
The trial court also dismissed Black Diamond's equitable estoppel claim.
Black Diamond argues that "[independent from overages on default," this court
should estop Union Bank from collecting default interest and penalties because
of Union Bank's representations about the extension of permanent financing.
Union Bank cites case law to argue that equitable estoppel may operate only as
a defense, not an offense. 	Therefore, the bank argues, Black Diamond may not
assert its estoppel claim.
39 See Beers v. Ross, 137 Wn. App. 566, 569, 154 P.3d 277 (2007); Ash
v.Dep't of Labor & Indus., 173 Wn. App. 559, 566-67, 294 P.3d 834 (2013).
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NO. 71114-8-1/19
But a party seeking damages based on an estoppel claim must assert a
promissory estoppel claim, not a claim for equitable estoppel.40 	While at least
one 	Washington 	case 	recasts 	a 	claim 	for 	equitable 	estoppel 	as 	one 	for
promissory estoppel,41 we decline to do so here. 	A claim for promissory estoppel
requires a plaintiff to prove that a promise was made and the promisor should
reasonably expect that promise to cause the promisee to change positions, the
promise does cause the promisee to do so, and the promisee justifiably relies on
the promise in such a way that a court's enforcement of the promise provides the
only way to prevent injustice.42
Black Diamond has not presented evidence sufficient to create a genuine
issue of material fact about any promise for permanent financing on which it
could justifiably rely. 	The trial court did not err in dismissing its estoppel claim.
Motion To Stay Pending Discovery
Before Union Bank filed its motion for summary judgment, the trial court
granted 	Black 	Diamond's 	motion 	to 	compel 	Union 	Bank 	to 	provide 	e-mail
documentation. 	When Union 	Bank filed its summary judgment motion, Black
Diamond filed a CR 56(f) motion for a stay until it received pending discovery.
40 Klinke v. Famous Recipe Fried Chicken, Inc., 94 Wn.2d 255, 259, 616
P.2d 644 (1980); McCormick v. Lake Wash. Sch. Dist., 99 Wn. App. 107, 117,
992P.2d511 (1999).
41 See, e.g., McCormick, 99 Wn. App. at 117.
42 Havens v. C&D Plastics, Inc., 124 Wn.2d 158, 171-72, 876 P.2d 435
(1994).
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NO. 71114-8-1/20
The court reserved its decision on the CR 56(f) motion for oral argument on
August 30, 2013. 	On that date, the trial court granted Union Bank's summary
judgment motion, without the bank's production of documents.43
An appellate court reviews denial 	of a 	CR 	56(f) 	motion for abuse of
discretion.44 	A trial court abuses its discretion when its decision is manifestly
unreasonable or based upon untenable grounds or untenable reasons.45 	If the
requesting party does not offer a good reason for the delay in obtaining the
desired 	evidence or fails to state what the evidence would establish or the
evidence will not raise a genuine issue of material fact, the court may deny the
motion.46
Black 	Diamond 	argues that it required 	additional discovery to 	resolve
factual 	issues about the intent of the parties and the meaning of agreement
terms. 	Union Bank counters that no genuine issue of material fact as to the
parties' mutual assent to terms exists because the alleged agreement did not
43 As Union Bank mentions, the standard under CR 26(b)(1) requires only
that 	requested 	discovery 	be 	"relevant to the 	subject matter 	involved in the
pending action," and thus the court could grant a CR 26 motion but deny a CR
56(f) motion under the rule's more stringent standard.
44 Tellevik v. 31641 W. Rutherford St., 120 Wn. 2d 68, 90, 838 P.2d 111
(1992) (citing Coqqle v. Snow, 56 Wn. App. 499, 504, 784 P.2d 554 (1990)).
45 T.S. v. Boy Scouts of Am.. 157 Wn.2d 416, 423, 138 P.3d 1053 (2006)
(quoting State ex rel. Carroll v. Junker. 79 Wn.2d 12, 26, 482 P.2d 775 (1971)).
46 Pitzer v. Union Bank of Cal.. 141 Wn.2d 539, 556, 9 P.3d 805 (2000)
(quoting Tellevik. 120 Wn.2d at 90).
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NO. 71114-8-1/21
contain necessary material terms. 	Therefore internal e-mail could not prove to a
fact finder any bilateral intent to agree.
Black Diamond sought the requested documents to prove the existence
and scope of a contract for permanent financing, breach of Frontier Bank's duty
to act in good faith, 	and the application of the D'Oench47 doctrine under 12
U.S.C. § 1823(e). 	But Union Bank had placed the loan file into evidence. 	Black
Diamond does not show how any further evidence would have raised an issue of
material fact about the missing necessary material terms. 	Thus, we conclude
that the court did not abuse its discretion when it denied Black Diamond's motion
for stay pending discovery.
Wittenberg and Courtney's Joint and Several Liability
In its October 17, 2013, order, the trial court stated that the attorney fees
clause in the 2005 	loan agreement and the commercial guarantees entitled
Union Bank to attorney fees and that "[pjlaintiffs Lee Wittenberg and Wayne
Courtney are individually liable for Union Bank's attorneys' fees under the terms
of 	the 	Commercial 	Guaranties." 	The 	October 	31, 	2013, 	judgment 	states,
"Plaintiffs 	Black 	Diamond 	Development Company, 	LLC, Lee Wittenberg 	and
Wayne Courtney are jointly and severally liable for Union Bank, N.A.'s attorneys'
fees and costs." 	Black Diamond argues that the court erred in finding Wittenberg
47 D'Oench. Duhme & Co. v. Fed. Deposit Ins. Corp.. 315 U.S. 447, 62 S.
Ct. 676, 86 L Ed. 956(1942).
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NO. 71114-8-1/22
and Courtney liable for attorney fees because Black Diamond paid the principal
debt and asserts that the court prematurely awarded attorney fees because it
never addressed the improper accounting issue.
This court reviews de novo whether a contractual provision authorizes an
award of attorney fees.48 	Under Washington law, "when [a] principal debt has
been 	discharged, 	the 	guarantor 	is likewise relieved 	of liability."49 	But if a
contract's language provides otherwise, a court will hold a guarantor liable.50
Here, the 2005 loan agreement states, "Borrower agrees to pay upon demand all
of Lender's costs and expenses, including Lender's attorneys' fees and Lender's
legal expenses, incurred in connection with the enforcement of this Agreement."
The 	commercial 	guaranty 	agreements 	signed 	by Wittenberg 	and 	Courtney,
respectively, 	provide, 	"Guarantor 	agrees 	to 	pay 	upon 	demand . . . Lender's
attorneys' fees and Lender's legal expenses, 	incurred in connection with the
enforcement 	of 	this 	Guaranty." 	The 	agreements 	make 	each 	guarantor
responsible 	for 	the 	"Indebtedness 	of 	Borrower 	to 	Lender" 	and 	define
indebtedness to include attorney fees.
48 Tradewell Grp.. Inc. v. Mavis. 71 Wn. App. 120, 126, 857 P.2d 1053
(1993).
49 Fruehauf Trailer Co. of Canada Ltd. v. Chandler. 67 Wn.2d 704, 707,
409P.2d651 (1966).
50 Seattle-First Nat'l Bank v. W. Coast Rubber Inc.. 41 Wn. App. 604, 609-
10, 705 P.2d 800 (1985).
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NO. 71114-8-1/23
This 	action 	arose 	out 	of 	Black 	Diamond's 	breach 	of contract claims
asserted under the 2005 agreement and the 2007 agreement. 	Because the
complaint 	named 	Wittenberg 	and 	Courtney 	as 	plaintiffs 	and 	they 	sued 	as
guarantors and 	Union 	Bank incurred 	legal expenses "in connection with the
enforcement of this Guaranty," we hold that despite the payment of the principal
debt, the contract language makes Wittenberg and Courtney jointly and severally
liable for attorney fees.
However, in a contract dispute, a court only awards attorney fees to a
prevailing party.51 	Because the trial court did not resolve the issue of improper
accounting, 	the 	prevailing 	party 	cannot 	be 	determined 	yet. 	The 	trial 	court
prematurely awarded attorney fees to Union Bank. 	As this court suggested to
counsel at oral 	argument, the amounts at issue strongly suggest the ultimate
outcome of this issue. 	But Black Diamond 	has the right to have this issue
decided by the trial court after resolution of its accounting claim. 	On remand, the
trial court shall also have the authority to award attorney fees on appeal to the
ultimately prevailing party, if any.
CONCLUSION
Black Diamond timely filed its appeal on November 5, 2013, because the
trial court did not decide all claims of all parties until it determined the guarantors'
51 RCW 4.84.330; Wachovia SBA Lending. Inc. v. Kraft. 165 Wn.2d 481,
489, 200 P.3d 683 (2009).
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NO. 71114-8-1/24
joint and several liability on October 17, 2013. 	Because the alleged financing
agreement omits material terms and does not satisfy the requirements of 12
U.S.C. § 1823(e), Union Bank has no contractual obligation to extend permanent
financing to Black Diamond. 	But because Black Diamond put Union Bank on
notice of its improper accounting claim and the court did not consider the merits
of the claim, the trial court erroneously dismissed it. As a result, no party has yet
prevailed in this case, and any award of attorney fees is premature. 	We affirm in
part, reverse in part, and remand for proceedings consistent with this opinion.
/-ZZsoA,
WE CONCUR:
*Cs(f^\c^} 	L 	:>
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