David Peterson, App/x-resp V. Michael Kennewick, Et Al., Resps/x-apps

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IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DAVID PETERSON, as an individual and
derivatively on behalf of VB ASSETS LLC,
a Delaware limited liability company,
Appellant/ Cross-Respondent,
v.
MICHAEL KENNEWICK, an individual; and
RICHARD KENNEWICK, an individual; and
ROBERT KENNEWICK, an individual,
Defendants,
NUANCE COMMUNICATIONS, INC., a
Delaware corporation; and VOICEBOX
TECHNOLOGIES CORPORATION, a
Delaware corporation,
Respondents/ Cross-Appellants.
No. 81065-1-I
DIVISION ONE
UNPUBLISHED OPINION
COBURN , J. — David Peterson appeals King County Superior Court’s order
granting summary judgment to his former employers Voicebox Technology
Corporation and Nuance Communications, Inc. He contends his employers
miscalculated his severance pay. We determine the superior court properly
granted Voicebox/Nuance summary judgment as to all of Peterson’s severance
claims and properly denied Voicebox/Nuance’s request for attorney fees and
costs. We affirm.

No. 81065-1-I/2
2
FACTS
Peterson worked for Voicebox as the Vice President of Global Automotive
Sales and Business Development. Beginning in 2013, Voicebox provided
Peterson with a 2013 Sales Compensation Plan (2013 Plan) paying him a base
salary plus commissions on sales at a rate of 1.85 percent.
In 2015, Voicebox and Peterson entered into a Severance and Change in
Control Agreement (Severance Agreement) providing Peterson “with enhanced
financial security and incentive and encouragement to remain with the
Company.” The Severance Agreement provided that Peterson’s severance
benefits included “a one-time ‘lump sum’ payment of severance pay (less
applicable withholding taxes) in an amount equal to six (6) months of the current
base salary, as then in effect, plus six (6) times the average monthly commission
paid to Employee, as calculated the full prior fiscal year.”1
In 2017, Voicebox notified Peterson that it was reducing his commission
rate on sales from its largest customer from 1.85 percent to 0.25 percent and
increasing his commission rate on new business sales to 3 percent. Voicebox
provided Peterson with a 2017 Sales Compensation Plan (2017 Plan) outlining
the reduction and confirming the new rate would apply to commissions after
May 31, 2017. Peterson refused to sign the 2017 Plan and disputed the amount
of his 2017 commissions. Peterson also claimed Voicebox underpaid his
commissions for 2015 and 2016 sales.
1 Voicebox’s fiscal year was the calendar year.

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In early 2018, Voicebox was planning to sell its business to Nuance.
Voicebox’s Chief Executive Officer Michael Kennewick wanted to resolve
Peterson’s commission dispute before closing the sale. Voicebox agreed to
settle the dispute by paying Peterson the difference between his current
commission rate of 0.25 percent and his previous commission rate of
1.85 percent for June through December 2017 sales. Voicebox and Peterson
signed an Employee Release Agreement (Release Agreement) stating:
The Company has paid the Employee a gross amount, including
base salary and commissions, of $242,156.54 for calendar year
2017 (the “2017 Compensation”). As a show of good will, the
Company will provide a lump sum equal to $227,019.23 (the
“Consideration”) to the Employee. Employee agrees and
acknowledges that in no event will he receive more than aggregate
of the 2017 Compensation and the Consideration from the
Company for work performed, or commissions on amounts
collected, in calendar year 2017.
After the parties signed the Release Agreement, Nuance paid Peterson
$227,019.23.
A little over a month later, on April 2, Nuance acquired Voicebox. Two
days later, Nuance notified Peterson that it was terminating his employment.
Peterson was concerned that Nuance would not include the $227,019.23 as
2017 commissions in its calculation of his severance pay. Peterson calculated
the amount he believed he was entitled to under the Severance Agreement as
$234,587.89 and emailed Kennewick as well as others at Voicebox and Nuance.
Nuance did not consider the $227,019.23 as actual 2017 commissions as
Peterson requested. On April 17, Nuance provided Peterson with a Separation

No. 81065-1-I/4
4
Agreement offering him $121,505.36 in severance pay “based of[f] his current
base salary (6 months) and 6 times his commissions earned in FY17, as reported
by the VBT finance team as actual commissions paid in that FY.” After
unsuccessfully trying to persuade Nuance to change its offer, Peterson and
Nuance entered into the Separation Agreement, which Peterson revoked six
days later.
Peterson initiated a suit against Voicebox and Nuance.2 Peterson
asserted claims of breach of the Separation Agreement, withholding severance
payment in violation of RCW 49.48.010, and willful withholding of wages in
violation of RCW 49.52.050. Voicebox/Nuance asserted a counterclaim alleging
Peterson breached the Release Agreement and requested attorney fees and
costs under that Agreement. Voicebox/Nuance also asserted a counterclaim for
declaratory relief as to whether Peterson was precluded from filing non-
severance claims if the superior court found that Peterson was entitled to
severance. Voicebox/Nuance moved for summary judgment, and Peterson
moved for summary judgment on all claims and counterclaims regarding his
severance pay.
2 Peterson also asserted claims for breach of fiduciary duties against
Voicebox directors Michael, Robert, and Richard Kennewick. Those claims are
not before us.

No. 81065-1-I/5
5
The superior court granted Voicebox/Nuance’s motion for summary
judgment but denied its request for attorney fees and costs.3 Peterson appeals
and Voicebox/Nuance cross appeals.
DISCUSSION
This court reviews a summary judgment order de novo. Hearst
Commc’ns, Inc. v. Seattle Times Co., 154 Wn.2d 493, 501, 115 P.3d 262 (2005).
“Summary judgment is appropriate only where there are no genuine issues of
material fact and the moving party is entitled to judgment as a matter of law.”
Pelly v. Panasyuk, 2 Wn. App. 2d 848, 864, 413 P.3d 619 (2018) (citing
CR 56(c)). “We review the evidence in the light most favorable to the nonmoving
party and draw all reasonable inferences in that party’s favor.” LaCoursiere v.
CamWest Dev., Inc., 181 Wn.2d 734, 740, 339 P.3d 963 (2014). The parties
stipulated and the superior court concluded there were no genuine disputes as to
any material fact. The court did not enter any findings of fact and ruled as a
matter of law.
“ ‘Absent disputed facts, the legal effect of a contract is a question of law
that we review de novo.’ ” Rosen v. Ascentry Tech., Inc., 143 Wn. App. 364,
369, 177 P.3d 765 (2008) (quoting Keystone Masonry v. Garco Constr., 135 Wn.
App. 927, 932, 147 P.3d 610 (2006)). “As part of an employment agreement, a
severance pay plan is subject to the same rules of construction as are other
3 The superior court’s final order was a second amended order to correct a
scrivener’s error.

No. 81065-1-I/6
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contracts.” Barrett v. Weyerhaeuser Co. Severance Pay Plan, 40 Wn. App. 630,
634, 700 P.2d 338 (1985). “Severance benefits are payable, if at all, in
accordance with the terms of the contract and intent of the parties.” Id. The
parties do not dispute that based on the Severance Agreement, the calculation of
Peterson’s severance should be partly based on his 2017 commissions.
2017 Commissions/Severance
The parties agree that Voicebox’s $227,019.23 payment to Peterson per
the Release Agreement was a settlement. However, Peterson claims that
payment was both a settlement and earned commissions on sales in 2017, and
he claims Nuance should have included that amount in its calculation of
severance. We disagree.
The rules of contract interpretation apply to the Release Agreement. “The
purpose of contract interpretation is to ascertain the intent of the parties.” Kelley
v. Tonda, 198 Wn. App. 303, 311, 393 P.3d 824 (2017). We follow the “objective
manifestation theory” of contracts. Hearst Commc’ns, Inc., 154 Wn.2d at 503.
Our goal is to determine the parties’ intent at the time they executed the contract
rather than “the interpretations the parties are advocating at the time of the
litigation.” Int’l Marine Underwriters v. ABCD Marine, LLC, 179 Wn.2d 274, 282,
313 P.3d 395 (2013). “Clear and unambiguous contracts are enforced as
written.” Grey v. Leach, 158 Wn. App. 837, 850, 244 P.3d 970 (2010) (citing
McDonald v. State Farm Fire & Cas. Co., 119 Wn.2d 724, 733-34, 837 P.2d 1000
(1992)). We give “words in a contract their ordinary, usual, and popular meaning

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unless the entirety of the agreement clearly demonstrates a contrary intent.”
Hearst Commc’ns, Inc., 154 Wn.2d at 504. “Interpretations giving lawful effect to
all the provisions in a contract are favored over those that render some of the
language meaningless or ineffective.” Grey, 158 Wn. App. at 850. “[W]e view
the contract as a whole, interpreting particular language in the context of other
contract provisions.” Viking Bank v. Firgrove Commons 3, LLC, 183 Wn. App.
706, 713, 334 P.3d 116 (2014).
Peterson contends the plain language of the Release Agreement
establishes the $227,019.23 was additional compensation for commissions in
calendar year 2017.
We first address the plain language of the Release Agreement. Peterson
contends, “[p]aragraph 1(a) expressly provides the $227,019.23 Consideration
payment would be additional compensation to Peterson for 2017.” It does not.
Paragraph 1(a) uses the term “compensation” to refer to the $242,156.54 that
Voicebox paid to Peterson in base salary and commissions in calendar year
2017. It referred to this payment as “2017 Compensation,” and it referred to the
$227,019.23 payment as “Consideration.” Furthermore, the paragraph
acknowledges the two different payment amounts distinctly. “Employee agrees
and acknowledges that in no event will he receive more than the aggregate of the
2017 Compensation and the Consideration from the Company for work
performed, or commissions on amounts collected, in calendar year 2017.”

No. 81065-1-I/8
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Peterson also cites to paragraph 2 of the Release Agreement as
describing the consideration as “compensation.” It does not. Paragraph 2 of the
Release Agreement states:
2. 	Payment of All Compensation. Employee acknowledges and
represents that, other than the consideration set forth in this
Agreement, the Company has paid or provided all salary, wages,
bonuses, deferred compensation, commissions, stock, stock
options, vesting, and any and all other benefits and compensation
due to Employee, if any, through the Effective Date of this
Agreement.
While the title of the paragraph refers to compensation, the text of the paragraph
explicitly states, “other than the consideration set forth in this Agreement” to
distinguish the various forms of compensation including commissions.
We now turn to Peterson’s reliance on extrinsic evidence. Peterson
asserts that under the “context rule,” first articulated in Berg v. Hudesman, 115
Wn.2d 657, 801 P.2d 222 (1990), this court “should consider extrinsic evidence
of the surrounding circumstances to ascertain the intent of the parties,” and “the
meaning of the words used,” “regardless of whether the language of the contract
is ambiguous.” However, as our Supreme Court stated, “[s]ince Berg, we have
explained that surrounding circumstances and other extrinsic evidence are to be
used ‘to determine the meaning of specific words and terms used’ and not to
‘show an intention independent of the instrument’ or to ‘vary, contradict or modify
the written word.’ ” Hearst Commc’ns, Inc., 154 Wn.2d at 503. “Extrinsic
evidence is not admissible to show ‘a party’s unilateral or subjective intent as to
the meaning of a contract word or term’; to show an intent ‘independent of the

No. 81065-1-I/9
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instrument’; or to ‘vary, contradict, or modify the written word.’ ” Pelly, 2 Wn.
App. 2d at 866 (quoting Hollis v. Garwall, Inc., 137 Wn.2d 683, 695, 974 P.2d
683 (1999)). In other words, “the subjective intent of the parties is generally
irrelevant if the intent can be determined from the actual words used.” Hearst
Commc’ns, Inc., 154 Wn.2d at 504. The plain language of the Release
Agreement provides the payment was consideration separate from the 2017
compensation that included commissions.
“Regardless of whether the language in the document is ambiguous,” we
“may consider extrinsic evidence concerning (1) the subject matter and objective
of the contract, (2) the circumstances surrounding the making of the contract,
(3) the subsequent conduct of the parties to the contract, (4) the reasonableness
of the parties’ respective interpretations, (5) statements made by the parties in
preliminary negotiations, (6) usages of trade, and (7) the course of dealing
between the parties.” Pelly, 2 Wn. App. 2d at 866 (citing Berg, 115 Wn.2d at
666-69; Hearst Commc’ns, Inc., 154 Wn.2d at 502) (emphasis added). Even
considering extrinsic evidence, the $227,019.23 was a settlement of the disputed
commissions and not earned commissions.
Peterson argues the parties intended the $227,019.23 to resolve the
commission dispute, and Voicebox calculated the amount using Peterson’s
1.85 commission rate, so the payment is both a settlement and actual 2017
commissions. Peterson contends emails and text messages between him and
Kennewick subsequent to executing the Release Agreement establish the

No. 81065-1-I/10
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$227,019.23 was for earned commissions. On April 23, 2018, Peterson sent
Kennewick a text message that said, “I have a call on [W]ednesday with
[N]uance about the severance payment. Since you won’t be here can you write a
statement in support of our view that the 2017 commissions should include the
amount paid in 2018.” Kennewick responded, “Sure. I can do that.” On May 15,
Kennewick e-mailed Peterson:
Dave, to be clear, I am making no legal interpretation of your
agreement nor have I read it. I did tell you, when you asked me,
that I agreed with you that our dispute and ultimate settlement for
2017 was for commissions against sales and that these amounts
were consistent with what you received the previous years.
Kennewick and Voicebox/Nuance acknowledge they calculated the settlement
amount by using the 2017 commissions at the 1.85 percent rate. They contend,
however, the payment was a settlement for disputed claims and not earned
commissions and that it “made the settlement offer it did, after months of
unsuccessful discussions, only because Peterson’s claims were a complication
for the pending sale of Voicebox to Nuance.”
The context does nothing more than illuminate the fact that Voicebox used
Peterson’s former commission rate to determine an amount that would settle the
dispute about the commissions without conceding that the $227,019.23 was
actually what Peterson earned in 2017 commissions.
Because the consideration was not part of Peterson’s earned 2017
commissions, we reject Peterson’s claim that Nuance anticipatorily breached the

No. 81065-1-I/11
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Severance Agreement by failing to include the $227,019.23 consideration in its
calculation of the severance offer.4
Attorney Fees
Below, Voicebox/Nuance asserted a counterclaim arguing Peterson
breached the Release Agreement when he asserted the claim for a higher
severance amount. Voicebox/Nuance contends it is entitled to attorney fees and
costs under the attorney fees provision of the Release Agreement. That
provision provides,
In the event that either Party brings an action to enforce or effect its
rights under this Agreement, the prevailing Party shall be entitled to
recover its costs and expenses, including the costs of . . . litigation,
court fees, and reasonable attorneys’ fees incurred in connection
with such an action. [5]
Voicebox/Nuance contends that it is entitled to attorney fees because the
Release Agreement was central to Peterson’s claims below. To support this
contention, Voicebox/Nuance quotes Deep Water Brewing, LLC v. Fairway Res.
Ltd., 152 Wn. App. 229, 278, 215 P.3d 990 (2009). “The court may award
attorney fees for claims other than breach of contract when the contract is central
4 Because the $227,019.23 consideration was not part of Peterson’s 2017
commissions, which was the basis of Peterson’s other claims, we need not
address his contentions that Nuance willfully withheld wages in violation of
RCW 49.52.050, that Peterson is entitled to double exemplary damages under
RCW 49.52.070, and that Nuance failed to timely pay Peterson his wages in
violation of RCW 49.48.010.
5 Voicebox/Nuance incorrectly asserts that RCW 4.84.330 mandates the
award of attorney fees under the Release Agreement. RCW 4.84.330 applies to
contracts with unilateral attorney fee provisions; it does not control over the plain
language of contracts containing a bilateral attorney fee clause. Kaintz v. PLG,
Inc., 147 Wn. App. 782, 197 P.3d 710 (2008).

No. 81065-1-I/12
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to the existence of the claims.” However, Voicebox/Nuance excludes the rest of
that quote: “i.e., when the dispute actually arose from the agreements.” Id.
In Deep Water Brewing, the plaintiff based its tortious interference with
contract claim on the contracts at issue. Id. at 279. We explained that
“enforcement of the agreements and the claims that followed their breach is the
essence of [the plaintiff’s] tortious interference with contract claim.” Id. Because
the tort claim arose out of the contracts at issue, the trial court properly awarded
fees based on the fee provisions in those contracts. Id. Unlike the claims in
Deep Water Brewing, Peterson’s claims did not follow the enforcement of the
Release Agreement, which had the attorney fee provision. Instead, Peterson
used the Release Agreement as evidence to support his argument that he was
entitled to a larger severance payment under the Severance Agreement. At
issue was compliance with the Severance Agreement not the Release
Agreement. The superior court correctly denied Voicebox/Nuance’s request for
attorney fees. For the same reason, we deny Voicebox/Nuance’s request for
appellate attorney fees.
Peterson requests attorney fees and expenses on appeal under
RAP 18.1, RCW 49.48.030, and RCW 49.52.070. Because Peterson is not the
prevailing party, he is not entitled to fees and costs.
CONCLUSION
The superior court properly granted summary judgment to
Voicebox/Nuance as to all of Peterson’s severance claims and properly denied

No. 81065-1-I/13
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Voicebox/Nuance’s request for attorney fees and costs. Because the parties
failed to obtain a ruling from the superior court as to Voicebox/Nuance’s
counterclaims, we decline to address Peterson’s contention that the superior
court should have granted him summary judgment on the counterclaims.6
We affirm.
WE CONCUR:
6 See Pascua v. Heil, 126 Wn. App. 520, 533, 108 P.3d 1253 (2005)
(noting that this court generally does not review issues the lower court did not
decide).