Auburn Valley Industrial Capital Llc, Respondent V. Ross B. Hansen, Et Al., Appellants

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
AUBURN VALLEY INDUSTRIAL
CAPITAL LLC, a Delaware limited
liability company,
Respondent,
ROSS B. HANSEN and JANE DOE
HANSEN, individually and their
marital community, d/b/a
NORTHWEST TERRITORIAL MINT;
NORTHWEST TERRITORIAL MINT,
LLC, a Washington limited liability
company,
Appellants.
NO. 69568-1-
DIVISION ONE
UNPUBLISHED OPINION
— 	He
;'-'~o;:
X2» 	com.
FILED: 	July 14, 2014 en
Leach, 	J. 	— 	Ross 	Hansen, 	d/b/a/ 	Northwest 	Territorial 	Mint, 	and
Northwest Territorial Mint LLC 	(collectively NW Mint) appeal the 	trial court's
findings of fact, 	conclusions of law, and judgment holding 	NW Mint liable for
Auburn Valley Industrial Capital LLC's remedial action costs under the Model
Toxics 	Control Act 	(MTCA), 	chapter 	70.105D 	RCW, 	and 	for damages 	for
breaching its commercial lease with Auburn. 	NW Mint also appeals the court's
supplemental judgment and order awarding attorney fees and costs to Auburn.
Substantial evidence supports the trial court's findings of fact, which support its
conclusions that NW Mint breached the lease. 	Because NW Mint identifies no

NO. 69568-1-1/2
costs recoverable under the MTCA that are not recoverable under the lease, we
do not decide if the MTCA applies to this case. 	NW Mint fails to show that the
trial court abused its discretion when it awarded costs and fees to Auburn. 	We
affirm.
FACTS
NW Mint is a full service mint that fabricates coins and other metallic
items. 	In May 2002, Ross Hansen, d/b/a/ Northwest Territorial Mint, signed a six-
year 	agreement 	with 	MegaWest 	LLC 	to 	lease 	suite 	101 	of 	a commercial-
industrial property.1 	The building was new when this lease began, and Ross
Hansen, d/b/a/ Northwest Territorial Mint, was the first tenant in suite 101. 	In
July 2007, MegaWest sold the building and assigned its interest in the lease to
Auburn. 	NW Mint occupied the premises and was a tenant under the lease from
December 31, 2002, until April 30, 2010, when the lease ended.
Section 11 of the lease stated,
1 In December 2002, Hansen formed Northwest Territorial Mint LLC, which
was not a party to this lease agreement. The trial court concluded,
Northwest Territorial Mint, LLC was acting as a Tenant under the
Lease and as an operator of the mint business at the Auburn
property from December 31, 2001 through the end of NW Mint's
lease in April of 2010. 	NW Mint's operations at the Auburn property
were held out to the public as operations of Northwest Territorial
Mint, LLC. 	Northwest Territorial Mint, LLC succeeded to enough of
Hansen's rights and obligations under the Lease to be considered a
Tenant under the Lease. 	At a minimum, Northwest Territorial Mint,
LLC occupied the leased premises as its principal place of business
and made all of the monthly Lease payments to Auburn from 2007
until the end of the Lease.
The premises leased is located in an area zoned as M-1, which permits uses
including "residential, daycare, preschools, nursery schools, health and fitness
clubs, restaurants, and other uses."
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NO. 69568-1-1/3
HAZARDOUS WASTE. 	Tenant shall not store, generate, dispose
of 	or 	otherwise 	allow 	the 	release 	of 	any 	hazardous 	waste 	or
materials in, on or under the Premises, Property or Project or any
adjacent property, or in any improvements placed on the Premises.
Except as otherwise provided, Tenant represents and warrants to
Landlord 	that Tenant's 	intended 	use 	of the 	Premises 	does 	not
involve the use, production, disposal or bringing on to the Premises
of any Hazardous Waste. 	As used herein, the term "Hazardous
Waste" 	includes 	any 	substance, 	waste 	or 	material defined 	or
designated as hazardous, toxic or dangerous (or any similar term)
by any federal, state or local statute, regulation, rule or ordinance
now 	or 	hereafter 	in 	effect, 	including, 	but 	not 	limited 	to, 	the
Comprehensive 	Environmental 	Response, 	Compensation 	and
Liability Act, 42 U.S.C. § 9601, or the Washington Model Toxics
Control Act ("MTCA"), 	RCW 70.105D.010 et seq. 	Tenant shall
promptly comply with all statutes, regulations and ordinances, and
with all orders, decrees or judgments of governmental authorities or
courts having jurisdiction, relating to the use, collection, treatment,
disposal, storage, control, removal or cleanup of Hazardous Waste
in, 	on 	or 	under 	the 	Premises 	or 	any 	adjacent 	property, 	or
incorporated 	in 	any improvements, at Tenant's expense. 	After
notice to Tenant and a reasonable opportunity for Tenant to effect
such, 	Landlord 	may, 	but is not obligated 	to, enter 	upon 	the
Premises 	and 	take 	such 	actions 	and 	incur 	such 	costs 	and
expenses to effect 	such compliance 	as 	it 	deems advisable to
protect 	its 	interest 	in 	the 	Premises; 	provided, 	however, 	that
Landlord 	shall 	not be 	obligated 	to give Tenant 	notice and 	an
opportunity to effect such compliance if (i) such delay might result
in material adverse damage to Landlord or the Property, (ii) Tenant
has already had actual knowledge of the situation and a reasonable
opportunity to effect such compliance, or (iii) an emergency exists.
Whether or not Tenant has actual 	knowledge of the 	release of
Hazardous Waste on the Premises or Property or any adjacent
property as the result of Tenant's use ofthe Premises, Tenant shall
reimburse Landlord for all costs and expenses incurred by Landlord
in connection with such compliance activities. 	Tenant shall notify
Landlord immediately of any release of any Hazardous Waste in,
on, under or from the Premises, Property or Project. 	Tenant shall
indemnify, defend and hold harmless Landlord against any and all
losses, 	liabilities, 	suits, 	obligations, 	fines, damages, 	judgments,
penalties, claims, charges, cleanup costs, remedial actions, costs
and 	expenses 	(including, 	without 	limitation, 	consultant 	fees,
attorneys' fees and disbursements) which 	may 	be imposed 	on,
incurred or paid by, or asserted against Landlord or the Premises,
Property or Project by 	reason 	of, 	or in 	connection with 	(i) any
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NO. 69568-1-1/4
misrepresentation, breach of warranty or other default by Tenant
under this Lease, or (ii) the acts or omissions by Tenant under this
Lease, or (iii) the acts or omissions of Tenant, or any sublessee or
other person for whom Tenant would otherwise be liable, resulting
in the 	release 	of any 	Hazardous Waste. 	This 	indemnity and
Tenant's other duties 	under this 	paragraph 	11 shall 	survive the
termination of this Lease.
Section 13 of the lease stated,
Tenant will at all times during the Term keep the Premises and all
systems therein and the doors and windows thereof neat, clean and
in good order, repair and 	in a sanitary condition. . . . Except for
reasonable 	wear and 	tear 	and 	damage 	by fire or 	unavoidable
casualty, Tenant will at all times preserve the Premises in as good
repair as they are now or may hereafter be put to. All repairs shall
be at Tenant's sole cost and expense, except for repairs required
for the outside roof, exterior walls and foundation which shall be
Landlord's 	responsibility. 	Tenant 	will, 	at 	all times, 	cause 	the
Premises to comply with all ordinances, regulations, rules or orders
of every governmental 	entity 	undertaking 	jurisdiction 	over the
Premises.
This provision 	also stated, 	"Tenant agrees that at the expiration 	or sooner
termination of this Lease, Tenant will quit and surrender the Premises without
notice, and in a neat and broom clean condition." 	The lease also contained the
following attorney fee and cost provision:
If Landlord employs an attorney or if Landlord brings suit to recover
any rent due hereunder, or for breach of any other provision of this
Lease . . . , Landlord shall be awarded its attorney's fees, statutory
court costs, and all other litigation costs and expenses expended or
incurred 	in connection with such action and 	in any appellate or
collection proceedings. 	All sums due from Tenant to Landlord shall
bear interest at the Default Interest rate.
In 	June 	2007, 	before 	purchasing 	the 	property, 	Auburn 	hired 	EBI
Consulting to perform a phase I environmental site assessment ofthe building. 	A
phase I environmental site assessment report informs a potential purchaser or
lender if the property contains or likely contains any recognized environmental

NO. 69568-1-1/5
conditions—any 	hazardous 	substances 	on 	a 	property 	under 	conditions 	that
indicate an existing release, a past release, or a material threat of a release of
any hazardous substances into structures on the property or into the ground,
groundwater, 	or 	surface 	water 	of 	the 	property. 	Recognized 	environmental
conditions include hazardous substances under conditions in compliance with
laws but do not include de minimis conditions. 	Because a phase I environmental
site assessment is a screening tool to determine if any recognized environmental
conditions 	warrant 	additional 	investigation, 	it 	does 	not 	include 	any 	actual
sampling. 	A phase I environmental site assessment also affords its user the
ability to satisfy one of the requirements to qualify for the innocent landowner,
contiguous property owner, 	or bona fide 	prospective purchaser limitations on
liability 	under 	the 	federal 	Comprehensive 	Environmental 	Response,
Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9601, as well as the
MTCA. 	Federal standards govern these assessments.
EBI's phase I environmental site assessment report noted that NW Mint
used the property to produce commemorative coins. 	NW Mint used machinery
and equipment including presses, stamps, and saws, and it used a commercial-
grade soap to polish the coins. 	EBI's report identified no evidence of recognized
environmental 	conditions 	or 	evidence 	of 	leaks, 	staining, 	or 	obvious
accumulations of metal dust.2 	EBI's assessment did not include interviews with
2 At trial, a representative from EBI testified, "And in the context of those
concentrations being relatively high concentrations in our sampling, for example,
we would 	be—that amount would 	be spread out over a square foot. 	So the

NO. 69568-1-1/6
any individuals from 	NW Mint. 	It also did not include inspections of HV/AC,
heating, ventilation, or air conditioning systems, or of roof areas. 	Auburn relied
on EBI's phase I environmental site assessment when it purchased the property.3
In May 2010, after the lease ended, Auburn hired EBI to survey the entire
condition 	of 	the 	premises. 	This 	survey 	included 	an 	industrial 	hygiene
assessment to allow Auburn "to be sure that the property was safe for lease in an
unrestricted manner to any particular type of tenant that they could attract to the
property." 	EBI's survey did 	not include a human health risk assessment. 	If
contamination 	levels 	in 	collected 	samples 	were 	below 	EBI's 	own 	surface
contamination limits, 	EBI would certify the facility as clean and certify that a
tenant could occupy the premises without restrictions or limitations.
In its "Site Cleanliness Investigation Report," EBI determined that based
on its own surface contamination limits, the premises was "grossly contaminated
with 	toxic 	metal 	dusts, 	fines, 	and 	process 	residuals."4 	EBI 	found, 	"All
ability to observe that is very limited." 	He also testified that EBI 	only later
became aware that NW Mint conducted industrial processes on the premises,
such as furnaces for melting metal, locations for pouring melted metal into molds,
blasting operations, and electroplating.
3 The trial court concluded that Auburn undertook all appropriate inquiry
into the 	previous ownership and 	uses of the 	premises consistent with 	good
commercial practice.
4 In this report, EBI stated,
There 	are 	currently 	no 	regulatory 	limits 	addressing 	surface
contamination for industrial type settings, so EBI 	has developed
surface contamination limits based on regulatory daily intake and
exposure limits. 	If the contaminant concentration is less than these
developed surface limits, EBI is willing to confirm that the surfaces
are clean and that the facility 	is clean/free of hazardous 	toxic
contamination. 	However, all of the five (5) composite samples had
sufficient contamination to indicate that the facility is contaminated

NO. 69568-1-1/7
manufacturing areas greatly exceed the limits for silver, selenium, and copper.
Additionally, at least one area exceeds the limit for each of the following toxic
metals: 	Arsenic, cadmium, chromium, lead, cobalt, manganese, nickel and zinc."
EBI concluded, "Inhalation of the toxic metal dusts or skin contact of settled dust
could have significant harmful health effects." 	Further, "[a]ny settled dusts or
metal fines would 	likely be listed or characterized 	as 	a regulated hazardous
waste." 	EBI 	recommended 	that 	workers 	properly 	trained 	in 	exposure 	to
hazardous substances clean the facility.
Before 	receiving 	EBI's 	report, 	Auburn 	did 	not believe that 	NW 	Mint
released hazardous substances at the premises. 	Auburn shared the report with
NW Mint and included a letter stating,
Pursuant 	to, 	among 	others 	Sections ... 11 	("Hazardous
Waste"), 	13 ("Maintenance 	and 	Repairs; 	Redelivery")... of the
Lease, we are affording your client the opportunity under the Lease
to take steps to remediate the contamination 	of the 	premises.
Action needs to be taken to bring contaminant levels down to safe
levels within the parameters of the specifications in the enclosed
report.
EBI 	issued 	a 	"Lease 	Space 	Move 	Out Survey" 	in 	June 	2010 after
inspecting the physical condition of the premises. 	In its report, EBI noted that
Hansen would 	not allow photographs of the building's interior and would 	not
provide 	answers 	about 	his 	business 	or manufacturing 	processes. 	EBI 	was
with a number of toxic metals and should not be leased or occupied
without further cleaning and decontamination.
At trial, 	a representative from 	EBI 	testified, 	"We 	used 	our approach, 	and 	if
somebody had offered a scientifically based actual alternative to cleaning up the
property, that we could have ... had a dialogue on, we were more than happy to
do that. That never happened."

NO. 69568-1-1/8
unable to access the roof. 	EBI shared this survey with NW Mint and enclosed a
letter stating, "EBI Consulting has concluded that Ross Hansen did not properly
maintain the premises nor return the premises in good working condition as
required under the terms of the Lease."
Auburn established a deadline of June 1, 2010, for NW Mint "to agree to
assume full responsibility for clean-up of the premises to a condition meeting the
terms of the lease and satisfactory to EBI Consulting, such that the landlord is in
a 	position 	to 	safely 	market 	this 	space 	and 	to 	have 	that 	clean-up 	done
immediately." 	NW Mint hired AMEC, an environmental consultant, to review
EBI's report. 	Before allowing AMEC to inspect the property, Auburn initially
insisted 	that NW Mint agree to responsibility for "whatever clean-up that is
determined by the experts needs to be done." 	NW Mint declined. 	In response to
NW Mint's 	renewed 	request to access the premises, 	Auburn 	wrote a 	letter
stating,
Because [Hansen] 	had 	been 	equivocal 	in 	prior communications
regarding your client as liable for this contamination, we believed it
would be an act of good faith on your client's part to acknowledge
his responsibility for such contamination, and that doing so would
facilitate better cooperation between the parties and a common
purpose 	to 	addressing 	and 	remediating 	the 	contamination,
especially given your client's lack of cooperation with the owner in
the past.[5]
AMEC 	completed 	its 	review 	of 	EBI's 	report 	in 	June 	2010. 	AMEC
concluded, "It is the opinion of AMEC that the EBI's methodology and approach
5 Auburn ultimately permitted industrial hygienist Elisabeth Black to access
the premises and conduct sampling.
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NO. 69568-1-1/9
are flawed and cannot be relied upon to determine whether there is a potential
health risk to occupants of the building." 	It noted, "AMEC has not established
clean-up criteria for this facility at this time, but we would certainly use different
methodology to do so." 	It also stated, "Further investigation is needed, and they
may conclude that there are areas that need to be cleaned up."
In June 2010, industrial hygienist Elisabeth Black developed a proposal for
NW Mint "to facilitate the removal of settled dust and metals." 	She expressed "no
reason to believe that the EBI results weren't accurate." 	Black "took issue with,
perhaps, their sampling method and clean-up criteria they established, but from
my perspective, in counseling my client, it seemed like going to clean-up was
likely the simplest option." 	NW Mint rejected Black's proposal.
In August 2010, Black presented NW Mint with a proposal to identify the
levels of metals and surface dust on the premises. 	Auburn's expert, Stephen
Frost, accompanied Black as she sampled the premises and took side-by-side
samples.
In November 2010, Black issued a report concluding, based on a limited
amount of information, that the premises posed a potential hazard. 	Black also
stated in her report, "Whether or not this condition creates an adverse health
impact to a future tenant of the building cannot be determined based on available
information." 	She 	noted that the elevated samples 	were not attributable to
background 	contamination from 	natural 	and 	human 	sources—these samples
exceeded background levels. 	And she found that the metal concentrations and
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NO. 69568-1-1/10
types 	of metals 	were 	unusual.6 	Black 	recommended 	that an "experienced
abatement firm with training in hazardous waste operations" conduct a "thorough
cleaning" "according to a protocol prepared by a certified industrial hygienist."
Auburn hired Clean Harbors to clean the premises. 	EBI oversaw Clean
Harbors' 	remediation, which took place from January through October 2011.
Clean Harbors cleaned the premises according to EBI's contamination limits.
In October 2011, EBI issued to Auburn a certification letter confirming that
future tenants could use suite 101 without restrictions or limitations attributable to
hazardous 	metals. 	In 	March 	2012, 	EBI 	issued 	a 	"Facility 	Cleaning 	&
Decontamination 	Certification 	and 	Environmental 	Closure 	Report," 	which
documented the investigation and remediation work in suite 101.
In 2009, Auburn sued Hansen for breach of contract, seeking injunctive
relief and damages arising out of a dispute about access to an electrical room,
phone room, and common areas of the premises. 	In 2010, Auburn sued NW
Mint, asserting breach of contract claims arising under the lease and a claim to
recover "remedial action costs" under RCW 70.105D.080. 	Auburn claimed that
NW 	Mint 	breached the lease by contaminating the building 	with 	hazardous
6 Black testified,
[T]his is not a condition you would typically encounter, either in
types of metals or concentrations of metals. 	It is unusual because
we rarely ever get metals and surface dust values for an industrial
facility, it is type sampling that's fairly rare, unless it is directed at
lead, 	for 	which 	there 	are 	standards; 	it 	is not typically 	done.
Unusual, because I think, as I have said before, it puts the land
owner or properties owner in a condition that was going to require
some action to move forward and make that space leasable for
unrestricted use.
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NO. 69568-1-1/11
substances, as defined by federal and state law, by damaging the building in
excess of normal wear and tear, and by failing to remove tenant improvements.
Auburn alleged over $1.3 million in damages. 	On February 11, 2011, the trial
court consolidated these cases.
In January 2012, Auburn hired toxicology expert John Schell to conduct a
human health risk assessment of the leased premises—a quantitative evaluation
of risk.7 	Schell testified at trial that a "cleanup level" under the MTCA is a
protective level that is safe for human health. 	He concluded that the levels of
arsenic, 	chromium-VI, 	copper, 	and 	selenium 	exceeded 	the 	MTCA 	cleanup
standards.8 	Schell testified that before Clean Harbors cleaned the premises,
"Based on my calculations of a risk based cleanup level, some of those metals,
the concentrations in the dust, posed a potential health threat."
In June 2012, NW Mint applied to the Washington State Department of
Ecology's Voluntary Cleanup 	Program 	(VCP).9 	The Department of Ecology
(Ecology) rejected NW Mint's application, reasoning,
We 	did 	not 	accept 	your 	application 	because 	the 	release 	you
reported 	does 	not constitute a 	hazardous waste site requiring
remedial 	action 	under 	the 	Model 	Toxics 	Control 	Act 	(MTCA),
7 Schell testified that "risk is a function of both the toxicity of the material
and the dose that is received."
8 Schell 	relied 	upon a 	bulk dust sample analysis that Stephen Frost
conducted, which determined the concentrations of constituent metals. 	Schell
noted that using the United States Environmental Protection Agency's calculation
method, the levels of silver also exceeded the cleanup standard.
9 The VCP supports independent cleanup actions. 	It allows owners and
operators of contaminated sites to enter into an agreement with the Department
of Ecology to review cleanup-related documents and to issue opinions about
compliance with the MTCA.
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NO. 69568-1-1/12
Chapter 70.105D RCW. 	This opinion is based on an analysis of
whether there has been a 	"release" into the "environment" of a
"hazardous 	substance" 	as 	defined 	by 	MTCA, Chapter 70.105D
RCW, and its implementing regulations, Chapter 173-340 WAC.
Documents provided to Ecology state that areas within the building
contain 	dust 	composed 	of 	silver, 	selenium, 	copper, 	arsenic,
cadmium, chromium, lead, cobalt, manganese, nickel and zinc.
From 	the 	documents 	provided, 	metal 	dust 	did 	not 	enter 	the
"environment". 	Rather, the dust was contained within the building.
This 	opinion 	is 	regarding 	the 	administrative 	and 	technical
requirements of MTCA, and is not an opinion regarding whether
other local, state or federal requirements may apply to the facility.
In 	July 2012, 	NW Mint filed 	a second 	application to the VCP. 	This
application was not different materially from NW Mint's first application. 	Ecology
rejected this application, reasoning,
We did not accept your application because the data provided to
Ecology is insufficient to show a release into the environment of a
hazardous substance. 	This decision is based on an analysis of
whether there has been a 	"release" into the "environment" of a
"hazardous 	substance" 	as 	defined 	by MTCA, 	Chapter 70.105D
RCW, 	and 	its 	implementing 	regulations, 	Chapter 	173-340
WAC. . . . Ecology makes no determination as to whether there is a
threatened 	release of a 	hazardous substance. 	The VCP is not
designed 	for 	review 	of 	remedial 	actions 	related 	solely 	to 	a
threatened release.
Documents provided to Ecology state that areas within the building
contain 	dust 	composed 	of 	silver, 	selenium, 	copper, 	arsenic,
cadmium, 	chromium, 	lead, 	cobalt, 	manganese, 	nickel and 	zinc
(collectively "metals dust"). 	Ecology received no sampling data of
surface water, ground water, drinking water supply, land surface or
subsurface strata, or ambient air. 	If such data is provided, you may
reapply to enter the VCP.
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NO. 69568-1-1/13
This 	decision 	is 	regarding 	whether 	Ecology 	will 	accept 	your
application 	to enter the VCP. 	This decision 	is not an opinion
regarding whether other local, state or federal requirements may
apply to the facility. 	This decision does not determine whether any
independent 	remedial 	action 	performed 	at 	the 	facility 	is the
substantial 	equivalent 	of 	an 	Ecology-conducted 	or 	Ecology-
supervised remedial action. 	Such determinations are made by a
court. See RCW 70.105D.080. 	The state, Ecology and its officers
and employees are immune from all liability, and no cause of action
of any nature may arise from any act or omission in providing this
informal advice and assistance. 	See RCW 70.105D.030(1)(i).
On October 15, 2012, the trial 	court entered 	155 findings of fact, 31
conclusions of law. 	The court concluded that Hansen and Northwest Territorial
Mint LLC were "strictly liable, jointly and severally, for all remedial action costs
incurred by Auburn at the Auburn property." 	On November 14, 2012, the trial
court entered an order granting in part and denying in part Auburn's motion to
amend these findings of fact and conclusions of law and entered a judgment in
favor of Auiburn.10 	In the judgment, the court awarded to Auburn $869,746.53 in
remedial action costs under the MTCA and damages for NW Mint's breach of the
lease. 	The court also awarded attorney fees and costs to Auburn under the
MTCA and the lease.
On June 4, 2013, the trial court entered a supplemental judgment and
order awarding $1,582,046.61 in costs and attorney fees to Auburn.
NW Mint appeals.
The court removed 	legal fees from 	Auburn's 	remedial action costs,
reducing the calculation from $657,818.68 to $391,573.23. 	NW Mint does not
appeal this order.
10
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NO. 69568-1-1/14
STANDARD OF REVIEW
We review challenged findings of fact by examining if substantial evidence
supports the findings and if the findings in turn support the conclusions of law.11
Substantial evidence exists if it is sufficient to persuade a fair-minded, rational
person of the truth of the matter asserted.12 	Unchallenged findings of fact are
verities on appeal.13 	A trial court's interpretation of contract language presents
an issue of law that we review de novo.14
We review the legal basis for an attorney fee award de novo but review
the reasonableness of the award amount for abuse of discretion.15 	A trial court
abuses 	its discretion 	if its decision 	is 	manifestly 	unreasonable or 	based 	on
untenable grounds.16
ANALYSIS
NW Mint raises three issues. 	First, it claims that it did not breach the
parties' lease. 	Second, NW Mint contends that the MTCA does not apply to the
premises at issue and that it did not violate this statute. 	Third, NW Mint asserts
11 State v. Ross, 106 Wn. App. 876, 880, 26 P.3d 298 (2001) (citing State
v. Dempsev, 88 Wn. App. 918, 921, 947 P.2d 265 (1997); State v. Hill. 	123
Wn.2d 641, 647, 870 P.2d 313 (1994)).
12 State v. Lew, 156 Wn.2d 709, 733, 132 P.3d 1076 (2006) (citing State
v. Mendez, 137 Wn.2d 208, 214, 970 P.2d 722 (1999)).
13 Hill, 123Wn.2dat644.
14 224 Westlake. LLC v. Enqstrom Props., LLC, 169 Wn. App. 700, 716,
281 P.3d 693 (2012) (citing Knipschield v. C-J Recreation, Inc., 74 Wn. App. 212,
215, 872P.2d 1102(1994)).
15 W. Consultants. 	Inc. v. Davis, 	177 Wn. App. 	33, 	38, 	310 P.3d 824
(2013) (citing Hulbert v. Port of Everett, 159 Wn. App. 389, 407, 245 P.3d 779
(2011)).
16 State v. Emery, 161 Wn. App. 172, 190, 253 P.3d 413 (2011) (quoting
State v.Allen. 159 Wn.2d1, 10, 147 P.3d 581 (2006)).
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NO. 69568-1-1/15
that the trial court abused 	its discretion when 	it awarded fees 	and 	costs to
Auburn. 	We affirm NW Mint's liability under the lease and the court's attorney
fee and cost award. 	As a result, we do not need to reach NW Mint's MTCA
claim.17
NW Mint makes three challenges to its liability under the lease. 	First, NW
Mint claims that "the residual metals NW Mint left at the Premises did not present
a risk of actual harm to human health or the environment." 	Second, it alleges,
"NW 	Mint 	complied 	with 	all 	statutes, 	regulations 	and 	orders 	concerning
hazardous wastes." 	Third, NW Mint asserts, "NW Mint left the Premises in a
'broom clean' condition, which is the Lease's only cleanup standard." 	We reject
these contentions.
The trial court found, "Section 13 of the Lease applies to the physical
condition of Suite 101, and the 'broom clean' specification in Section 13 does not
modify or supersede the 	requirements of Section 	11 of the 	Lease regarding
hazardous substances." 	It also found, "NW Mint did not cooperate with Auburn's
investigation and cleanup of the contamination in 2010 and 2011." 	The court
concluded, 	"NW 	Mint 	stored, 	generated, 	disposed, 	or 	otherwise 	released
hazardous materials on the premises, in breach of Section 11 [of] the Lease." 	It
also concluded, "NW Mint failed to notify Auburn of the release of hazardous
17 Auburn contends that NW Mint's brief fails to comply with RAP 10.3.
Because the nature of Auburn's challenges are clear, Auburn shows no prejudice
from 	any alleged violation, 	and RAP 	1.2 requires us to interpret these 	rules
liberally to promote justice and facilitate the decision of cases on the merits, we
waive any technical violations of RAP 10.3.
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NO. 69568-1-1/16
waste at the Auburn Property in breach of Section 11 of the Lease." Additionally,
it concluded, "Auburn provided NW Mint notice and a reasonable opportunity to
comply with measures that Auburn deemed advisable to protect its interest in the
Auburn Property. 	NW Mint failed to undertake any appropriate or meaningful
remedial 	action." 	NW Mint breached 	section 	13 "by failing to 	maintain the
premises in good order and repair at the time ofsurrender on April 30, 2010."
NW Mint claims, 	"Before the Lease terminated 	in 2010, 	Auburn never
objected to NW Mint's use of metals such as silver, copper and 	nickel in its
manufacturing 	processes. 	Auburn 	never claimed that NW Mint's operations
breached 	Section 	11 of the 	Lease." 	It asserts that the trial court "erred 	in
concluding that the mere presence of metallic dust in the Premises constituted a
breach of Section 	11 of the 	Lease" because "Auburn did 	not 	introduce any
evidence that the residual metallic dust, which was in the Premises at lawful, de
minimus [sic] levels, presented a threat to human health or the environment."
The record shows that NW Mint "store[d], generate^], dispose[d] of or
otherwise allow[ed] the release of any 	hazardous waste released hazardous
materials" on the premises and did not notify Auburn of these releases. 	The trial
court found, 	"Hazardous 	substance 	metal 	fumes, 	dust and 	residues were
dispersed throughout the facility and were also released to the 'environment,' as
evidenced 	by 	high 	levels 	of 	hazardous 	substance 	metal 	dust/residue found
outside of the building, both on the roof and on the loading dock area outside of
the building."
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NO. 69568-1-1/17
Although NW Mint assigns error to the court's conclusion that "[t]he metal
dust/residue, including arsenic, chromium, lead, selenium, silver, copper, nickel,
and 	zinc, at the Auburn Property are 	hazardous substances as 	defined by
MTCA/CERCLA," it does not support this assignment of error with any argument.
If a party fails to support an assignment of error with legal arguments, we do not
consider them on appeal.18 	The 	lease 	prohibited 	any storage, 	generation,
disposal, or other releases of hazardous materials, 	regardless of whether the
releases posed a risk to human health or the environment. 	NW Mint fails to
establish its compliance with section 11 of the lease.
NW Mint also breached the lease because it did not maintain the premises
in "neat, clean and in good order, repair and in a sanitary condition," as section
13 required. 	NW Mint 	rejected 	Auburn's 	requests to clean the premises to
enable 	Auburn 	to 	relet 	it to 	a 	new 	tenant. 	Even 	if NW Mint 	"quit and
surrendered] the Premises 	... in a neat and broom clean condition," these
violations were sufficient to constitute a breach of both section 11 and section 13.
NW Mint also challenges its liability under the MTCA. 	RCW 70.105D.080
states,
Except as provided in RCW 70.105D.040(4)(d) and (f), a person
may bring a private right of action, including a claim for contribution
or for declaratory relief, against any other person liable under RCW
70.105D.040 for the 	recovery of remedial action costs. 	In the
action, 	natural 	resource damages 	paid 	to the state under this
is Howell v. Spokane & Inland Empire Blood Bank, 117 Wn.2d 619, 624,
818 P.2d 1056 (1991) (citing Schmidt v. Cornerstone Invs.. Inc.. 115 Wn.2d 148,
795 P.2d 1143 (1990); Howell v. Spokane & Inland Empire Blood Bank. 114
Wn.2d 42, 46, 785 P.2d 815 (1990)).
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NO. 69568-1-1/18
chapter may also be recovered. 	Recovery shall be based on such
equitable 	factors 	as 	the 	court 	determines 	are 	appropriate.
Remedial action costs shall include reasonable attorneys' fees and
expenses. 	Recovery of remedial action costs shall be limited to
those remedial actions that, when evaluated as a whole, are the
substantial equivalent of a department-conducted or department-
supervised 	remedial 	action. 	Substantial 	equivalence 	shall 	be
determined by the court with reference to the rules adopted by the
department under this chapter. . . . The prevailing party in such an
action shall recover its reasonable attorneys' fees and costs. 	This
section applies to all causes of action regardless of when the cause
of action may have arisen.
A "remedial action" is
any action 	or expenditure consistent with 	the purposes of this
chapter to identify, eliminate, or minimize any threat or potential
threat posed by hazardous substances to human health or the
environment including any investigative and monitoring activities
with respect to any release or threatened release of a hazardous
substance and any health assessments or health effects studies
conducted in order to determine the risk or potential risk to human
health.'19]
RCW 70.105D.040 states,
(1) [T]he following persons are liable with respect to a facility:
(a) The owner or operator of the facility;
(b) Any person who owned or operated the facility at the time of
disposal or release of the hazardous substances;
(2) Each person who is liable under this section is strictly liable,
jointly and severally, for all remedial action costs and for all natural
resource 	damages 	resulting 	from 	the 	releases 	or 	threatened
releases of hazardous substances.
An "owner or operator" is "[a]ny person with any ownership interest in the facility
or who 	exercises any control 	over the facility."20 	A "facility" 	includes 	"any
building" 	or "any 	site or area where 	a hazardous substance, 	other than 	a
19 Former RCW 70.105D.020(26) (2007).
20 Former RCW 70.105D.020(17)(a).
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NO. 69568-1-1/19
consumer product in consumer use, has been deposited, stored, disposed of, or
placed, or otherwise come to be located."21
Auburn argues that it is entitled to recover the same amount of fees and
costs under the lease and the MTCA. 	NW Mint identifies no costs recoverable
under the MTCA that are not recoverable under the lease. 	Because we affirm
NW Mint's liability under the lease, we do not address MTCA's applicability to this
case.
Finally, NW Mint makes four challenges to the trial court's supplemental
judgment and order awarding attorney fees and costs. First, NW Mint claims that
the court "abused its discretion by accepting Auburn's billing statements without
question and failing to deduct for wasteful and duplicative work." 	Second, NW
Mint contends, "The trial court abused its discretion by failing to segregate the
time 	related 	to Auburn's 	unsuccessful 	tenant 	improvement claim." 	Third, 	it
alleges, "Auburn's attorneys spent unnecessary time on post-judgment matters,
including the Fee Motion." 	Fourth, NW Mint asserts, "The trial court abused its
discretion by awarding Auburn every penny of its claimed $425,767.28 in costs."
The trial court awarded $425,767.28 in litigation expenses, $1,116,279.33
in attorney fees, 	and $50,000.00 in "[f]ees/costs for December 2012 through
entry of supplemental judgment." 	Its award also included a $10,000.00 credit for
a security deposit. 	The court concluded, "The evidence supports a full award of
all of Auburn's 'remedial action' legal expenses under MTCA and its attorneys'
21 Former RCW 70.105D.020(5).
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NO. 69568-1-1/20
fees and costs under the 2002 Lease based on 	both the traditional 'lodestar'
analysis and an 'equitable factors' analysis."
Generally, Washington 	courts apply 	the 	lodestar method 	to calculate
attorney 	fees.22 	The court 	awarding 	attorney fees 	makes an independent
determination 	about 	the 	reasonableness 	of the 	fees 	requested.23 	The fee
applicant bears the burden of establishing that a fee is reasonable.24
To apply the lodestar method, 	the court considers first the number of
hours 	reasonably expended on the matter.25 	"'[T]he attorneys 	must provide
reasonable documentation of the work performed.'"26 	This documentation must
include at least (1) the number of hours worked, (2) the type of work performed,
and (3) the category of attorney who performed the work.27 	The court does not
need to conduct an hour-by-hour analysis of each lawyer's time sheets, so long
as 	the 	court 	provides a 	consideration 	of the relevant factors 	and reasons
22 Mahler v. Szucs, 135 Wn.2d 398, 433, 957 P.2d 632 (1998), overruled
on other grounds by Matsvuk v. State Farm Fire & Cas. Co.. 173 Wn.2d 643, 272
P.3d 802 (2012).
23 McGreevv v. Or. Mut. Ins. Co.. 90 Wn. App. 283, 291, 951 P.2d 798
(1998) (quoting Absher Constr. Co. v. Kent Sch. Dist. No. 415, 79 Wn. App. 841,
847, 	917 	P.2d 	1086 (1995)), 	overruled 	on other grounds 	by Panorama Vill.
Con'do. Owners Ass'n Bd. of Dirs. v. Allstate Ins. Co.. 144 Wn.2d 130, 26 P.3d
910(2001).
24 Absher Constr. Co.. 79 Wn. App. at 847 (citing Blum v. Stenson. 465
US 	886, 897, 104 S. Ct. 1541, 79 L. Ed. 2d 891 (1984); Scott Fetzer Co. v.
Weeks, 122 Wn.2d 141, 151, 859 P.2d 1210 (1993)).
25 McGreevv, 90 Wn. App. at 291.
26 McGreevv. 90 Wn. App. at 292 (quoting Bowers v. Transamerica Title
Ins. Co.. 100 Wn.2d 581, 597, 675 P.2d 193 (1983)).
27 McGreevv, 90 Wn. App. at 292 (citing Bowers. 100 Wn.2d at 597).
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NO. 69568-1-1/21
sufficient to review the amount of the fee award.28 	"The awarding court should
take into account the hours spent on unsuccessful claims, duplicated effort, or
otherwise unproductive time."29
The second step in the lodestar method requires the court to determine if
the hourly fee charged was reasonable.30 As a third step, the court multiplies the
numbers from the first two steps to produce the lodestar fee.31
Finally, the court may adjust the lodestar amount up or down to reflect
factors 	not already considered.32 	The 	party proposing 	a deviation from the
lodestar amount bears the burden of justifying it.33
When a contract specifies that a party may recover costs beyond statutory
costs, the prevailing party is not limited to statutory costs, 	and the court will
enforce the parties' intended meaning.34
The trial court found, 	"Auburn has provided contemporaneous records
documenting the number of hours worked by its counsel as part of the remedial
action and in the course of the litigation. 	These records adequately informed the
court of the type of work performed and the category of attorney who performed
the work." 	It also found, "The hourly rates charged by Auburn's counsel were
28 McGreevv. 90 Wn. App. at 292 (quoting Absher Constr. Co.. 79 Wn.
App. at 848).
29 McGreevv. 90 Wn. App. at 292 (citing Bowers. 100 Wn.2d at 597).
30 McGreevv. 90 Wn. App. at 291.
31 McGreevv. 90 Wn. App. at 291.
32 Bowers. 100 Wn.2d at 598-99.
33 Bowers. 100 Wn.2d at 598 (quoting Copeland v. Marshall. 641 F.2d
880, 892 (D.C. Cir. 1980)).
34 Ethridqe v. Hwang, 105 Wn. App. 447, 462, 20 P.3d 958 (2001).
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NO. 69568-1-1/22
reasonable 	at 	the 	time 	the 	client 	was 	billed 	for 	services. 	The 	attorneys
representing all parties were very experienced and produced exceptional work."35
The 	court 	concluded, 	"The 	hours 	expended 	and 	hourly 	rates 	charged 	by
Auburn's 	counsel 	as 	'remedial 	action' 	attorneys' 	fees 	in 	this 	case 	were
reasonable."
NW Mint claims that the trial court awarded fees for duplicative work,
including "[e]xcessive contacts between Auburn's counsel," "[duplication of effort
in reviewing pleadings and documents," and "[duplication of effort in conducting
depositions or attending hearings." 	The court entered the following findings of
fact:
9. 	The court also has made a reduction for duplicative
efforts at trial. 	It was not 	necessary to 	have four 	partner level
lawyers present at the entire trial, particularly due to the fact that
one lawyer never made any oral representation to the court and the
other 	lawyer's 	participation 	was 	limited 	to 	questioning 	two
witnesses on the first day of trial. 	The presence of these attorneys
was 	unnecessarily 	duplicative. 	Given 	that 	there 	were 	two
experienced lawyers already representing Auburn at trial, the court
does not find it necessary that Mr. Johnson was present for trial or
that Mr. Hamell remained after his witnesses testified on the first
day of trial. 	The court will reduce the award for their trial time. 	Mr.
Johnson billed approximately 104 hours at $33,800, and Mr. Hamell
billed 104 hours at $30,680.
10. 	Defendants argued that other time was duplicative as
well. 	The court does not find this defense argument convincing.
This case was aggressively litigated by the Defendants and Auburn
had 	the 	right to respond 	in kind. 	The 	communication 	between
plaintiff's counsels was reasonable and not excessive. 	The court
finds that plaintiff's counsels reasonably allocated their resources
for their motions practice and depositions. 	Finally, the court finds
that the costs requested are appropriate given the broad definition
of costs in MTCA claims.
35 NW Mint does not challenge the hourly fees of Auburn's attorneys.
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NO. 69568-1-1/23
11. 	Aside from the specific reductions discussed above,
the 	evidence 	established 	that 	Auburn's 	counsel 	expended 	a
reasonable number of hours in representing Auburn with respect to
Auburn's "remedial action" responses to the contamination caused
by Defendants, and in achieving a successful 	litigation 	result to
resolve Auburn's claims under MTCA and under the 2002 Lease.
12. 	As evidenced by the detailed documentation provided
by Auburn, the hours billed by Auburn's counsel as part of the
remedial action and in the course of the litigation of the MTCA and
the 2002 Lease claims were not wasteful or duplicative.
NW Mint fails to cite any controlling authority in challenging the amount of
communications among Auburn's attorneys or any authority showing that the
entries were improperly vague. 	NW Mint also cites no authority establishing that
having multiple attorneys review pleadings and documents is improper. 	Further,
although NW Mint claims that the trial court abused its discretion by awarding
more than $27,000 in fees when only one of the two attorneys who attended
depositions 	and 	hearings for Auburn 	actually 	represented 	Auburn, 	it fails 	to
indicate which specific entries that it is challenging.36 Therefore, NW Mint fails to
show that the trial court awarded fees for duplicative work.
NW Mint also alleges that the trial court failed to exclude the requested
fees and costs related to Auburn's unsuccessful tenant improvement claim.37 	It
argues that because the fact pattern for this claim was unrelated to the fact
pattern 	for 	the 	contamination 	claim, 	the 	court 	"abused 	its 	discretion 	by
36 NW Mint cites a declaration offering expert opinion on Auburn's cost
and 	fee application, 	but the entries 	included 	in 	that document do 	not total
$27,000.
37 	Section 	14 	of the 	lease 	required 	NW 	Mint 	to 	remove 	all 	of its
improvements that Auburn requested itto remove.
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NO. 69568-1-1/24
unquestioningly 	accepting 	Auburn's 	unsupported 	estimate 	of the 	time 	its
attorneys spent on the unsuccessful tenant improvement claim."
A trial court need not segregate attorney fees when it finds that claims are
"so related that no reasonable segregation of successful and unsuccessful claims
can be made."38 The trial court found,
Auburn was unsuccessful in its tenant improvement claim and the
award should be reduced for the hours expended on that claim.
The tenant improvement claim 	constituted a 	minimal amount of
work however, and there are limited invoices that are applicable to
it. . . . The court finds that the invoices were sufficient to determine
the work performed in this lawsuit. 	Much of the testimony provided
and the work performed regarding the tenant improvement claim
related 	to 	Auburn's 	other 	property 	damage 	and 	contamination
claims; hence, the claims were inextricably intertwined. The tenant
improvement 	claim 	itself was simply 	a 	very 	minor 	part of the
litigation. 	Nevertheless, a reduction is necessary and the court
accepts the 100 hour estimate proffered 	by the Plaintiff totaling
approximately 	$37,000 	in 	reduction 	as 	reasonable and frankly,
perhaps generous.
The 	court rejected 	NW 	Mint's 	argument that 	it was 	impossible 	to
determine the number of hours expended on the tenant improvement claim. 	NW
Mint cites no evidence indicating that the tenant improvement claim rested on a
different common core of facts than the contamination claim. 	The trial court did
not abuse its discretion.
NW Mint also 	contests the fees 	awarded 	for "post-judgment matters,
including the Fee Motion." 	It challenges the court's order denying NW Mint's
motion to strike declarations and exhibits supporting Auburn's motion for attorney
fees and costs or to continue the fee hearing. 	In its motion, NW Mint claimed
38 Hume v.Am. Disposal Co., 124 Wn.2d 656, 673, 880 P.2d 988 (1994).
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NO. 69568-1-1/25
that declarations and attached documents filed with Auburn's reply in support of
its motion for attorney fees and costs constituted "new evidence" that NW Mint
did 	not 	have 	adequate 	time 	to 	analyze. 	The 	trial 	court 	relied 	upon 	this
challenged 	evidence 	when 	it 	determined 	that 	Auburn's 	fee 	request 	was
reasonable.
We will reverse a trial court's denial of a continuance only upon a showing
of both an 	abuse of discretion 	and 	resulting prejudice.39 	NW Mint cites 	no
specific billing record to support its contention. 	The evidence submitted with
Auburn's reply raised no new issues; it simply rebutted the arguments made in
NW 	Mint's 	response 	to 	Auburn's 	motion 	for 	attorney 	fees 	and 	costs.40
Additionally, Auburn provided many of the documents to NW Mint previously.
We reject NW Mint's arguments.
Finally, NW Mint claims that Auburn was not entitled to recover deposition
expenses, daily transcription charges, travel costs for parties, lay witness travel
costs, support staff overtime, computer management software, copying charges,
and meal expenses during trial. 	The lease's attorney fee and cost provision
entitles Auburn to recover "its attorney's fees, statutory court costs, and all other
litigation costs and expenses expended or incurred in connection with [an action
39 State v. Herzog, 69 Wn. App. 521, 524, 849 P.2d 1235 (1993).
40 See Colwell v. Holy Family Hosp., 104 Wn. App. 606, 616, 15 P.3d 210
(2001) ("The party moving for summary judgment must raise all of the issues on
which it believes it is entitled to summary judgment in its initial motion. 	A trial
court may not grant summary judgment to the moving party on issues that are
first raised in rebuttal." (citing White v. Kent Med. Ctr.. Inc.. 61 Wn. App. 163,
168, 810 P.2d 4 (1991); Mollov v. City of Bellevue. 71 Wn. App. 382, 385, 859
P.2d 613 (1993))).
-25-

NO. 69568-1-1/26
for breach of the lease] and in any appellate or collection proceedings. 	All sums
due from Tenant to Landlord shall bear interest at the Default Interest rate."
The 	trial 	court 	concluded, 	"The 	legal 	services 	provided 	by 	Auburn's
counsel were 	necessary and 	appropriate to guide and 	assist Auburn 	in the
investigation and remediation of the former NW Mint Facility and to achieve a
successful litigation result to resolve Auburn's claims under MTCA and under the
2002 Lease." 	NW Mint fails to show that the broad lease provision precludes
Auburn from recovering the cited costs and expenses.
Both parties request fees and costs incurred on appeal under RAP 18.1,
RCW 70.105D.080, RCW 4.84.330, and the lease. 	Because Auburn prevails in
this appeal, it is entitled to recover attorney fees and costs under RAP 18.1,
RCW 4.84.330, and the lease.
CONCLUSION
Substantial evidence supports the trial court's findings, which support its
conclusions that NW Mint breached its lease with Auburn. 	NW Mint fails to show
that the trial court abused its discretion when it awarded Auburn all of its fees and
costs under the lease. We do not reach the applicability of the MTCA to this
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NO. 69568-1-1/27
case. 	We affirm the trial court and award fees and costs to Auburn incurred on
appeal upon its compliance with RAP 14.4.
WE CONCUR:
/*	^J 	(bxj-
-27-