Kidder Mathews & Segner, Inc., Respondent V. Harbor Marine Maintenance & Supply, Inc., Appellant

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
KIDDER MATHEWS & SEGNER, INC., 	)
a Washington corporation, 	)
Respondent,
v.
HARBOR MARINE MAINTENANCE &
SUPPLY, INC., a Washington
corporation,
Appellant.
)
)
)
)
)
)
)
)
)
)
___________)
NO. 68066-8-1
DIVISION ONE
UNPUBLISHED OPINION
FILED: 	April 1, 2013
LEACH, C.J. -Harbor Marine Maintenance & Supply Inc. appeals the trial
court's entry of summary judgment in favor of Kidder Mathews & Segner Inc. for
a brokerage fee claimed under a client representation agreement and its denial
of Harbor's motion for reconsideration. 	Harbor signed a client representation
agreement with Kidder requiring Kidder to assist Harbor with securing a property
lease to relocate its business. 	After Harbor signed a lease, Kidder sued Harbor
to recover a brokerage fee under the agreement. 	Because Harbor fails to show
that 	a genuine 	issue 	of material fact 	exists 	regarding 	Kidder's 	right to the
brokerage fee, we affirm.

NO. 68066-8-1/2
FACTS
Harbor Marine Maintenance & Supply Inc. sells marine equipment and
provides marine repair and maintenance services. 	Kidder Mathews & Segner
Inc. provides commercial brokerage services.
Harbor leased business space at the Everett Marina from the Port of
Everett (Port) for approximately 30 years. 	In 2008, the Port terminated Harbor's
lease to accommodate the Port's redevelopment plans. 	Harbor learned that
Norton Industries owned a nearby property that might be available to lease.
Harbor president Lauren 	Bivins spoke periodically with 	Norton president Jim
Schack from 2008 until December 2009 about the property's potential availability.
In 	December 2009, 	Bivins concluded that the Norton property would 	not be
available to 	lease 	and 	began 	negotiating with 	the 	Port to 	lease a different
property.
After 	Harbor's 	negotiations 	with 	the 	Port 	failed, 	Harbor's 	attorney
suggested that Bivins contact Kidder to assist with the negotiations. The attorney
introduced Bivins to Kidder broker Matthew Henn. 	On January 29, 2010, Henn
and Matthew Hagen, another Kidder broker, presented Harbor with Everett area
lease com parables, including details on four available properties. 	On February 1,
Bivins 	signed 	a 	client 	representation 	agreement 	(CRA) 	with 	Kidder. 	The
agreement states,
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Harbor Marine, 	Inc. 	shall 	hereinafter be referred 	to 	as "Client."
Owner 	or 	Owner's 	agent 	shall 	hereinafter 	be 	referred 	to 	as
"Owner." 	It 	is 	hereby 	confirmed 	that 	GVA 	Kidder 	Mathews,
hereinafter referred to as "Agent," exclusively represents Client.
It is hereby confirmed that in the event of the consummation
of a lease renewal, 	new lease, or purchase of a facility, 	Client
hereby requires that a brokerage commission in consideration of
brokerage services rendered shall be paid by Owner to Agent.
Henn submitted to the Port a series of lease proposals. 	When these
negotiations with the Port stalled, 	Bivins asked 	Henn to research alternative
properties. 	Henn 	and 	Hagen subsequently asked 	Schack if a property that
Norton owned-the same property that Bivins considered previously-might be
available 	to 	lease. 	Schack 	informed 	them 	that 	the 	building 	was 	currently
unavailable but that it might soon become available. 	Schack asked them to
place the building on the list of properties for Harbor to consider.
On March 24, 2010, Henn and Hagen met with Harbor's attorney, Harbor's
accountant, and Bivins. 	Bivins was surprised to learn that the Norton property
was available. 	That day, he toured the building with Henn and Hagen.
On March 31, Bivins met with Schack to discuss a possible lease, without
informing Kidder. 	On April 27, after learning about the negotiations, Henn sent
Bivins an e-mail stating, "Tomorrow I will email you a copy of our representation
agreement. 	You might want to talk with [J]im that he is legally required to pay a
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NO. 68066-8-1/ 4
fee unless you would rather pay the fee. 	In the meantime, we will stall w[ith] the
Port." On May 21, Harbor signed a lease agreement with Norton.
In November 2010, Kidder sued Harbor in Snohomish County Superior
Court to 	recover the 	brokerage fee. 	The court granted 	Kidder's motion for
summary 	judgment 	and 	subsequently 	denied 	Harbor's 	motion 	for
reconsideration. 	Harbor appeals.
STANDARD OF REVIEW
We review de novo a trial court's summary judgment order. 	We engage in
the same inquiry as the trial court, 	considering the facts and all reasonable
inferences from the facts in the light most favorable to the nonmoving party. 1
"Summary judgment is properly granted if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, show that
there is no genuine issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law.''2
ANALYSIS
Harbor claims that Kidder must be the procuring cause of a lease to be
entitled to a brokerage fee. 	Kidder contends, and the trial court agreed, that the
procuring 	cause 	rule does 	not apply because the 	applicable CRA provision
1 Right-Price 	Recreation. 	LLC 	v. 	Connells 	Prairie 	Cmty. 	Council, 	146
Wn.2d 370, 381, 46 P.3d 789 (2002).
2 Phillips v. King County, 136 Wn.2d 946, 956, 968 P.2d 871 (1998); CR
56( c).
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NO. 68066-8-1/5
provides a lesser standard for liability for a commission. 	Harbor also contends
that it raises a genuine 	issue of material fact 	regarding 	Kidder's 	right to 	a
brokerage fee under the CRA. 	Because undisputed evidence establishes that
Kidder should be considered the procuring cause of the lease, we affirm the trial
court without resolving the parties' dispute over the meaning of the controlling
contract language.
Under the procuring cause rule, "when a party is employed to procure a
purchaser and does procure a purchaser to whom a sale is eventually made, that
party is entitled to a commission regardless of who makes the sale. "3 A broker is
the procuring cause of the sale "if it sets in motion a series of events culminating
in the sale and, in doing so, accomplishes what the broker undertook under the
agreement. "4 It is not enough to locate the purchaser; the broker's efforts must
have actually led to the transaction on which the broker claims a commissions
Harbor contends that Kidder was not the procuring cause of the lease
because it did not have "the required 'minimal causal relationship' that resulted in
the eventual lease." We disagree.
3 Wash. Profl Real Estate, LLC v. Young, 163 Wn. App. 800, 809, 260
P.3d 991 (2011) (citing Prof' Is 100 v. Prestige Realty, Inc., 80 Wn. App. 833, 836-
37, 	911 	P.2d 	1358 (1996)), 	review denied, 	173 Wn.2d 	1017, 272 	P.3d 247
(2012).4 Wash. Prof'l Real Estate, 163 Wn. App. at 810 (citing Roger Crane &
Assocs. v. Felice, 74 Wn. App. 769, 776, 875 P.2d 705 (1994)).
5 Roger Crane, 74 Wn. App. at 776-77.
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NO. 68066-8-1 I 6
Bivins testified that before Henn presented Harbor with information about
the Norton property, he believed that the property was unavailable. 	Except for
the size of the building on the property, he had no information about the building,
not even its current rent. 	Immediately after Henn presented the Norton property
information, Bivins and Henn viewed the building together. 	On March 31, 2010,
less than one week after Henn provided detailed information about the Norton
property to 	Harbor, 	Bivins began 	separate negotiations with 	Schack. 	When
Bivins discussed the brokerage fee with Schack, Schack refused to pay it. 	After
learning of the negotiations between Bivins and Schack, Henn sent an e-mail to
Bivins, in which he wrote, "Matt Hagen left Jim voicemails on both April 15th and
again on April 21st to confirm" whether or not the building was available to lease,
"with no return call." 	Harbor did not inform Kidder about its negotiations and
gave 	Kidder 	"no 	opportunity 	to 	consummate 	the 	sale 	or 	to 	protect 	his
commission.''6
Nothing 	in 	the 	record 	indicates 	that 	Kidder 	abandoned 	its 	efforts to
negotiate a lease with Schack. 	The undisputed evidence shows that Kidder tried
continuously to procure a lease agreement with Schack from the time Kidder first
showed Harbor the property until Kidder learned about the separately negotiated
lease. 7 "[W]hen the owner in bad faith deprives the broker of the opportunity of
6 Feeley v. Mullikin, 44 Wn.2d 680, 688, 269 P.2d 828 (1954).
7 See Feeley, 44 Wn.2d at 688.
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NO. 68066-8-1/7
consummating the sale to a purchaser whom he has produced and with whom he
is negotiating, the broker may be considered as the proximate and procuring
cause of the sale as a matter of law.''8 Because the undisputed facts in this case
establish 	Harbor's 	bad 	faith 	effort 	to 	deprive 	Kidder 	of 	the 	opportunity 	to
consummate the lease, we consider Kidder the procuring cause of the lease as a
matter of law and entitled to a commission.
Harbor cites Lloyd Hammerstad, Inc. v. Saunders9 and Roger Crane &
Associates v. Felice10 to show that Kidder was not the procuring cause of the
lease. 	Neither case 	supports 	Harbor's position 	because neither involved 	a
similar fact pattern. 	Neither case involves a party who engaged a broker and
then attempted to avoid a commission obligation by consummating a transaction
behind the broker's back.
Harbor also 	alleges 	that the 	parties 	did 	not 	intend 	for 	it to 	pay the
commission 	to 	Kidder. 	The 	pertinent 	CRA 	language 	states, 	"It 	is 	hereby
confirmed that in the event of the consummation of a lease renewal, new lease,
or purchase of a facility, Client hereby requires that a brokerage commission in
consideration of brokerage services rendered shall be paid by Owner to Agent."
Harbor claims that this plain language, Henn's representations before Harbor
8 Feeley, 44 Wn.2d at 686.
9 6 Wn. App. 633, 495 P.2d 349 (1972).
10 74 Wn. App. 769, 875 P.2d 705 (1994).
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NO. 68066-8-1 I 8
signed the CRA and during lease negotiations, and "the undisputed evidence that
even Kidder believed that the CRA obligated the owner of the property, 	not
Harbor, to pay any commission that would result from the lease agreement" all
support its interpretation.
Kidder responds that the CRA's unambiguous terms state that Harbor
must require the "Owner" (here, Norton) to pay the commission. 	It asserts that
Harbor breached the CRA by negotiating a lease that did not require Norton to
pay the commission and by refusing to pay the commission itself.
When a court interprets a written contract, its purpose is to determine the
parties' intent. 11 The court applies the "context rule," which allows it to consider
extrinsic evidence to ascertain the parties' intent and to interpret the contract.12
Regardless 	of whether the 	contract 	language 	is 	ambiguous, 	the 	court may
consider (1) the contract's subject matter and objective, (2) the circumstances
surrounding the contract's formation, (3) the parties' subsequent conduct, (4) the
reasonableness 	of 	the 	parties' 	respective 	interpretations, 	(5) 	the 	parties'
statements made in preliminary negotiations, (6) usages of trade, and (7) the
11 Spectrum Glass Co. v. Pub. Util. Dist. No. 1 of Snohomish County. 129
Wn. App. 303, 310, 119 P.3d 854 (2005) (citing U.S. Life Credit Life Ins. Co. v.
Williams, 129 Wn.2d 565, 569, 919 P.2d 594 (1996)).
1 Spectrum Glass, 129 Wn. App. at 311 (citing Williams, 129 Wn.2d at
569).
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NO. 68066-8-1/9
course of dealing between the parties. 13 While a court may consider extrinsic
evidence to interpret a contract,
"(a]dmissible extrinsic evidence does not include (1) evidence of a
party's unilateral or subjective intent as to the meaning of a contract
word 	or 	term, 	(2) 	evidence 	that 	would 	show 	an 	intention
independent of the contract, or (3) evidence that varies, contradicts
or modifies the written language of the contract."l141
"'[S]ummary judgment is not proper if the parties' written contract, viewed
in 	light 	of 	the 	parties' 	other 	objective 	manifestations, 	has 	two 	"or 	more"
reasonable but competing meanings."'15 But a contract provision's interpretation
presents a question of law when its interpretation does not depend upon the use
of extrinsic evidence or the extrinsic evidence leads to only one reasonable
inference.16 "Therefore, 	'summary judgment is 	proper if the 	parties' written
contract, viewed in light of the parties' other objective manifestations, has only
one reasonable meaning."'17
We agree with Kidder that the CRA's language is not ambiguous. 	The
CRA obligated Harbor to include a provision in the lease agreement requiring the
13 Spectrum Glass, 129 Wn. App. at 311 (citing Berg v. Hudesman, 115
Wn.2d 657, 666-68, 801 P.2d 222 (1990)).
14 Go2Net. Inc. v. C I Host, Inc., 115 Wn. App. 73, 84, 60 P.3d 1245
(2003) ~quoting Bort v. Parker, 110 Wn. App. 561, 574, 42 P.3d 980 (2002)).
1 Go2Net, 115 Wn. App. at 83 (quoting Hall v. Custom Craft Fixtures. Inc.,
87 Wn. App. 1, 9, 937 P.2d 1143 (1997)).
16 Spectrum Glass, 	129 Wn. App. at 311 	(citing Tanner Elec. Coop. v.
Puget Sound Power & Light Co., 128 Wn.2d 656, 674, 911 P.2d 1301 (1996)).
17 Go2Net, 115 Wn. App. at 85 (quoting Hall, 87 Wn. App. at 9).
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NO. 68066-8-1/10
owner to pay the commission. 	Harbor does not dispute that it did not include
such a provision. 	Therefore, Harbor must pay Kidder's resulting damages, the
commission that it should have required Norton to pay Kidder. 	Harbor offers no
plausible basis to conclude that the CRA's language alone bound Norton to pay
the commission or that Harbor was not required to pay when it entered into a
lease that did not require Norton to pay a brokerage fee.
Both parties request attorney fees on appeal. 	The CRA states, "If Agent
employs an 	attorney to enforce any of the terms of this agreement, 	and is
successful either in whole or in part, whether by trial or otherwise, Owner agrees
to pay the attorney's fees and costs incurred by Agent." 	RCW 4.84.330 allows a
party that prevails in an action to enforce a contract to enforce such a provision
for attorney fees and costs. 18 We award reasonable attorney fees and costs to
Kidder because Kidder has prevailed in this action to enforce its contract with
Harbor.
CONCLUSION
Because Harbor fails to show a genuine issue of material fact exists
regarding its commission obligation to Kidder under the CRA, we affirm the trial
18 Herzog Aluminum. Inc. v. Gen. Am. Window Corp., 39 Wn. App. 188,
197,692 P.2d 867 (1984).
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NO. 68066-8-1/11
court's summary judgment order and award costs and reasonable attorney fees
to Kidder incurred on this appeal upon its compliance with applicable court rules.
fWE CONCUR:
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