v.
Ballard Leary Phase Ii, Lp, Et Ano.
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
CANAL STATION NORTH CONDOMINIUM ASSOCIATION, a No. 69500-2-I Washington nonprofit corporation, DIVISION ONE Respondent, UNPUBLISHED OPINION
BALLARD LEARY PHASE II, LP, a Washington limited partnership; BRCP/CPI PHASE II, LLC, a Washington limited liability company; CONTINENTAL PACIFIC INVESTMENTS REAL ESTATE FUND 1, LP, a Washington limited partnership; CPI FUND 1, LLC, a Washington liability company; CONTINENTAL PROPERTIES, LLC, a Washington limited liability company; CLAUDIO GUINCHER and JANE DOE GUINCHER, individually and the marital community comprised thereof; and DON BOWZER and JANE DOE BOWZER, individually and the marital community compromised thereof, Appellants, DOE AFFILIATES 1-50; DOE rva c=> -^o o PRINCIPALS 1-10; DOE DECLARANT u cHcr CD BOARD MEMBERS 1-10; DOE m ci ' C~) CONTRACTORS 1-20; DOE (\5 —' "Tl ~~n DECLARANT AGENTS 1-10; DOE CO .t--* "~-n ^ TRANSFEREES 1-50; UPONOR, INC., an 3S* f/>~ ;. rc ™j>v Illinois corporation; DAHL BROTHERS o Sc- CANADA, LTD, a Canadian corporation; en Xs o BRASS-CRAFT MANUFACTRUING r-o 5 ~< COMPANY, a Michigan corporation; DOE MANUFACTURING COMPANIES 1-20; doe distributing companies 1-20, Defendants. FILED: December 23, 2013 No. 69500-2-1/2 Appelwick, J. — The Association sued Ballard Leary and several other defendants for alleged construction defects. Before filing an answer, Ballard Leary filed a CR 12(b)(6) motion to dismiss two of the Association's claims for lack of standing and two other claims as premature. When the trial court denied the motion, Ballard Leary moved to compel arbitration pursuant to RCW 64.55.100 of the Washington Condominium Act. The trial court issued an order striking Ballard Leary's arbitration demand, finding that Ballard Leary waived arbitration. We hold that the motion under CR 12(b)(6) did not constitute a waiver of the right to arbitrate and that arbitration was timely demanded as to the claims against the statutory declarants. Arbitration was properly denied as to the remaining claims and parties to the lawsuit. We affirm in part, reverse in part, and remand for further proceedings consistent with this opinion. FACTS This lawsuit arises from alleged construction defects in the Canal Station North Condominium development at 5450 Leary Avenue in Seattle, Washington. The Canal Station North Condominium Association (Association) filed its first amended complaint on May 15, 2012, alleging several causes of action: (1) breach of implied warranty of quality under the Washington Condominium Act (WCA), chapter 64.34 RCW; (2) breach of implied warranty of habitability; (3) breach of express warranty and contract;(4) negligent misrepresentations; (5) breach of fiduciary duty; (6) violation of the Washington Consumer Protection Act (CPA), chapter 19.86 RCW; (7) and disgorgement of fraudulent transfers. No. 69500-2-1/3 The Association named several defendants: Ballard Leary Phase II LP (Ballard Leary, the statutory declarant1); BRCP/CPI Phase II LLC (general partner of the declarant); Continental Pacific Investments Real Estate Fund I LP (managing partner of BRCP/CPI); CPI Fund I LLC (general partner of Continental Pacific); Continental Properties LLC (manager of CPI Fund); Claudio Guincher (served on Association board of directors) and Jane Doe Guincher; Don Bowzer (same) and Jane Doe Bowzer;2 as well as other unidentified alter egos, unknown affiliates, and asset transferees of the declarant. The Association referred to BRCP/CPI, Continental Pacific Investments, CPI Fund, and Continental Properties collectively as "Continental." The Association also alleged that three out-of-state corporations—Uponor Inc., Dahl Brothers Canada LTD, and Masco Corp.—"designed, manufactured, supplied, and/or distributed defective component parts of plumbing systems installed" at Canal Station. The Association referred to these three corporations collectively as "manufacturer defendants."
[*8]No. 69500-2-1/9 No. 69500-2-1/11 No. 69500-2-1/12
[*10][*11]12(b)(6) motion. However, we cannot say that Ballard Leary's conduct is consistent with intent to forego its right to arbitrate. We hold that Ballard Leary did not waive its right to arbitrate under RCW 64.55.100 by filing the CR 12(b)(6) motion to dismiss before seeking to compel arbitration. The trial court erred in refusing to grant the demand for arbitration with the statutory declarants. We reverse. Because Ballard Leary did not waive arbitration by its conduct, we need not decide whether the WCA creates an unwaivable right to arbitrate.[4] II. Proper Declarants Under RCW 64.55.100 Ballard Leary argues that the trial court erred when it ruled that not all the defendants are subject to arbitration, because they are not statutory declarants under RCW 64.55.100. Specifically, the trial court found that defendants CPI Fund, Continental Properties, Guincher, and Bowzer, are not declarants under RCW 64.55.100 and are therefore not proper parties to arbitration. Ballard Leary contends this was error, because the Association alleged in its complaint that these defendants are agents, affiliates, and/or alter egos of the declarant.5 Ballard Leary argues this constitutes a judicial admission that the defendants are in fact declarants, so the Association should be equitably estopped from arguing to the contrary.
[*12]No. 69500-2-1/13
Ballard Leary points to several paragraphs in the Association's first amended complaint to argue that the Association admitted the defendants are declarants. Two of these paragraphs, by example, state: 2.14 Pursuant to RCW 64.34.020(1) and/or RCW 19.40.011(1), all or some of Declarant, Continental, DOE AFFILIATES 1-50 and DOE PRINCIPALS 1-10 are alter egos of one another and/or qualify as "affiliates" of the Declarant, and/or pursuant to RCW 19.40.011(7) qualify as "insiders" of Declarant and one another. As alter egos of Declarant, these defendants are each responsible for all tort, contract, and warranty liabilities alleged herein against the Declarant. [2].16 DOE DECLARANT BOARD MEMBERS 1-10 are currently unidentified persons who were appointed by the Declarant and/or its alter egos and owners to serve, as agents of Declarant during the period of declarant control of the Association. Based on this language, the Association does not allege that CPI Fund, Continental Properties, Guincher, and Bowzer are declarants. Rather, it alleges that they are affiliates, alter egos, and/or agents of the declarant, Ballard Leary. This does not, as Ballard Leary claims, mean that they are themselves declarants. Ballard Leary cites no authority for its proposition that alter egos or agents of the declarant must be joined in arbitration. Nor does Ballard Leary cite any authority supporting its theory that alter egos or agents must be treated the same as the defendant. Thus, we need not consider it. RAP 10.3(a)(6); State v. McNeair, 88 Wn. App. 331, 340, 944 P.2d 1099 (1997) (failure to cite authority constitutes a concession that the argument lacks merit). In fact, the WCA contemplates limited parties to the arbitration. RCW 64.55.100 specifies: "If the declarant, an association, or a party unit owner demands an arbitration by filing such demand with the court. . . the parties shall participate in a private No. 69500-2-1/14
[*13]arbitration hearing." (Emphasis added.) Ballard Leary contends that "the parties" means "all the parties to a lawsuit," not just the declarant, association, and unit owners. However, the statute does not so state. See In re Pers. Restraint of Bovan, 157 Wn. App. 588, 599, 238 P.3d 528 (2010) ("We will not read into the statute words that are not there."). The "parties" most plausibly relates back to the three parties specified in the statute: the declarant, the association, and unit owners. RCW 64.55.100(1). Reading RCW 64.55.100 as a limited arbitration right is supported by the fact that not every claim arising under the WCA can be enforced against only a declarant. For instance, both declarants and dealers6 can be liable for breach of implied warranties of quality under RCW 64.34.445. Likewise, board members owe fiduciary duties to unit owners under RCW 64.34.308(1). Furthermore, reading "the parties" as "all parties to a lawsuit" renders another provision of the WCA superfluous. Kilian v. Atkinson, 147 Wn.2d 16, 21, 50 P.3d 638 (2002) ("Statutes must be construed so that all the language is given effect and no portion is rendered meaningless or superfluous."). RCW 64.55.150 provides a mechanism for joining subcontractors and suppliers in arbitration. If those parties to the lawsuit were automatically joined under RCW 64.55.100, as Ballard Leary contends, then RCW 64.55.150 would be meaningless. CPI Fund, Continental Properties, Guincher, and Bowzer are not declarants. Because they are not declarants, they are not proper parties to the arbitration under RCW 64.55.100. We hold that the trial court did not err in refusing to refer them to No. 69500-2-1/15
[*14]arbitration. And, notably, the trial court did not exclude BRCP/CPI (general partner of Ballard Leary) and Continental Pacific Investments (managing partner of BRCP/CPI) from arbitration. III. Manufacturer Defendants Similarly, Ballard Leary argues that the Association's claims against the manufacturer defendants—Masco, Dahl Brothers, and Uponor—should also be submitted to arbitration. The Association alleged that these three manufacturer defendants "designed, manufactured, supplied, and/or distributed" defective plumbing products. (Emphasis added.) Ballard Leary contends that this brings them within the gamut of RCW 64.55.150. RCW 64.55.150 provides: Upon the demand of a party to an arbitration demanded under RCW 64.55.100, any subcontractor or supplier against whom such party has a legal claim and whose work or performance on the building in question becomes an issue in the arbitration may be joined in and become a party to the arbitration. Based on the Association's complaint, the manufacturer defendants are suppliers whose work on the building is at issue. However, RCW 64.55.150 requires the party asserting a legal claim against the supplier to demand for that supplier to be joined in arbitration: "Upon the demand of a party to an arbitration demanded under RCW 64.55.100, any subcontractor or supplier against whom such party has a legal claim . ..." (Emphasis added.) To join the manufacturer defendants in arbitration here, the Association, which holds the claim, must make a demand to join them.[7] The No. 69500-2-1/16
[*15]Association has not done so. Because Ballard Leary does not currently have a claim against the manufacturer defendants, it cannot join them in arbitration.[8] Therefore, the trial court did not err in concluding that these defendants were not proper parties to the arbitration based on the status of the pleadings. IV. Association's Motion to Strike The Association moved to strike material from the appendix in Ballard Leary's reply brief, specifically: the declaration of Jennifer Smitrovich, the summary judgment motion from Townsend, and the law review article and legislative reports. In her declaration, Smitrovich warranted, as an attorney for Ballard Leary and the Continental defendants, that they did not request any discovery, answer any discover, request any depositions, conduct any expert site investigations, file any dispositive motions, or file an answer before demanding arbitration. The Association is correct that this improperly supplements the record without our approval under RAP 9.10 and 9.11. And, regardless, the record already supports Smitrovich's statements. Similarly, the Townsend summary judgment motion provides additional facts outside the two published opinions in that case. We grant the Association's motion to strike Smitrovich's declaration and the Townsend summary judgment motion. We deny the Association's motion to strike the legislative reports and law review article. Legislative reports may be attached in an appendix under RAP 10.4(c): "If a Rev. 515, 533 (2006) ("Upon the demand of a party who has a legal claim against a subcontractor, such subcontractor may be joined in the arbitration ifthe work performed by the subcontractor is at issue in that proceeding.").
[*16]No. 69500-2-1/17
party presents an issue which requires study of a statute ... the party should type the material portions of the text out verbatim or include them by copy in the text or in an appendix to the brief." Likewise, the law review article about the WCA did not establish specific facts of this case, but rather "'legislative facts'" that we may consider when determining the constitutionality or interpretation of a statute. See State ex rel. T.B. v. CPC Fairfax Hosp.. 129 Wn.2d 439, 453-54, 918 P.2d 497 (1996) (refusing to strike scholarly articles attached in appendices). We affirm in part, reverse in part, and remand for further proceedings consistent with this opinion. £. 7^ WE CONCUR: beutJ\ _ C- <^z?(, J.
[*17]