Gregory Hochhalter, Respondents/cross-appellants V. David Lewis
CourtCourt of Appeals of Washington
Date FiledNovember 10, 2026
Docket60637-2
StatusUnpublished
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Full Opinion
Filed
Washington State
Court of Appeals
Division Two
November 10, 2026
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION II
GREGORY HOCHHALTER and SCOTT No. 60637-2-II
ANDERSON,
Respondents/Cross-Appellants,
DEBRA BEECH,
Plaintiff,
v.
KAT’S COVE CONDOMINIUM UNPUBLISHED OPINION
ASSOCIATION, SHANE KEARNS, and
SOON HEE KEARNS,
Defendants,
DAVID LEWIS,
Appellant/Cross-Respondent,
BILL LAUDERDALE and KATHIE
LAUDERDALE,
Respondents/Cross-Appellants.
No. 60637-2-II
MAXA, J. – David Lewis appeals the trial court’s confirmation of an arbitration award and
entry of judgment following the arbitration of a dispute between Lewis and fellow condominium
unit owners Gregory Hochhalter, Debra Beech, and Scott Anderson (collectively Hochhalter).
This appeal arose out of the parties’ disagreement over the governance and finances of Kat’s
Cove Condominium Association (Kat’s Cove).
Lewis contests the arbitrator’s denial of his counterclaim for an accounting of what each
owner had paid toward Kat’s Cove’s expenses and the arbitrator’s award of attorney fees to
Hochhalter as the substantially prevailing party. Lewis argues that the trial court erred in
confirming the arbitration award because the arbitrator’s rulings on those issues contained legal
errors on the face of the award. Hochhalter cross-appeals the trial court’s reduction of the
arbitrator’s attorney fee award in his favor.
We hold that (1) the trial court did not err in confirming the arbitration award, but (2) the
trial court erred in reducing the arbitrator’s attorney fee award. Accordingly, we affirm the trial
court’s confirmation of the arbitration award, but we reverse the trial court’s reduction of the
attorney fee award and remand for entry of judgment consistent with the arbitrator’s fee award.
FACTS
Background
Kat’s Cove is the owners’ association for a five-unit condominium building in Ocean
Shores. Lewis, through his company Venturi Properties, formed Kat’s Cove in 2007.
Over time, questions arose about who controlled Kat’s Cove’s board of directors and who
had paid its expenses. In November 2018, Gregory Hochhalter sued Kat’s Cove and Lewis to
obtain association records. In June 2019, the trial court entered a temporary restraining order
prohibiting Lewis from representing that he was an officer or director of Kat’s Cove and from
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acting on behalf of Kat’s Cove. Gregory1 later filed an amended complaint seeking declaratory
and injunctive relief and adding Beech and Anderson as plaintiffs. Lewis counterclaimed for an
accounting of all amounts unit owners had paid since Kat’s Cove’s formation, to determine
whether each owner had paid a fair share.2
The Kat’s Cove declaration requires that certain disputes among owners be resolved
through arbitration. In September 2019, Lewis filed a motion to compel arbitration, and the trial
court denied the motion. In July 2021, Division Three of this court reversed, holding that the
dispute was subject to arbitration. Hochhalter v. Kat’s Cove Condo. Ass’n, No. 37979-5-III, slip
op. at 15, 20 (Wash. Ct. App. July 8, 2021) (unpublished),
https://www.courts.wa.gov/opinions/pdf/379795_unp.pdf.
Arbitration
The case proceeded to arbitration. On November 19, 2024, the arbitrator issued a letter
decision (November decision) that granted in part Hochhalter’s requests for declaratory and
injunctive relief, denied Lewis’s accounting counterclaim, and determined that Hochhalter was
the substantially prevailing party entitled to attorney fees. On January 7, 2025, the arbitrator
issued a second letter decision (January decision) that set the amount of attorney fees and costs
an arbitration judgment setting out his rulings.
Declaratory and Injunctive Relief Claim
Hochhalter sought three forms of declaratory relief and three forms of injunctive relief.
1
We refer to Gregory Hochhalter by his first name when referring to him individually. We
intend no disrespect.
2
Lewis also asserted the accounting claim as a cross-claim against three other unit owners who
are not parties to this appeal. Consistent with the January 7, 2025, arbitration decision and the
parties’ briefs, we refer to the claim as a counterclaim.
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No. 60637-2-II
Regarding declaratory relief, Hochhalter asked the arbitrator to declare that (1) Kat’s
Cove had not had valid officers or directors since June 2017; (2) all actions taken by the
purported officers and directors after June 2017 were void; and (3) Lewis and his company,
Venturi Properties, must pay all assessments in full, with no credit for payments allegedly made
before entry of judgment. The arbitrator ruled that a July 2017 owners meeting was not properly
called or noticed and that, as a result, Kat’s Cove had not had valid officers or directors since
June 2017. He also ruled that actions taken by the purported officers and directors after June
2017 were “null, void, and of no effect to the extent those actions relate to the other parties to
this lawsuit.” Clerk’s Papers (CP) at 13. The arbitrator excepted from that ruling a promissory
note that Lewis had executed on behalf of Kat’s Cove in favor of his company, Venturi
Properties, which he ruled remained a valid debt. And he ruled that all unit owners, including
Lewis, “must pay all assessments in full as and when due.” CP at 13.
Regarding injunctive relief, Hochhalter asked the arbitrator to (1) bar Lewis from
representing that he was an officer or director of Kat’s Cove or taking any action on its behalf,
(2) bar Lewis from ever serving as an officer or director, and (3) order a meeting of all unit
owners to elect directors. The arbitrator denied the first two requests. Instead, he terminated the
temporary restraining order and ruled that “all unit owners in Kat’s Cove, including David
Lewis, shall have the right to participate in the management of the condominium association.”
CP at 14. The arbitrator also ordered a special meeting to be scheduled as soon as possible to
elect a new board of directors.
Accounting Counterclaim
The arbitrator stated that Lewis’s accounting counterclaim was “an extremely
complicated claim potentially extending all the way back to 2007.” CP at 14. He noted that
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accounting claims are equitable in nature and that courts have broad discretion to fashion
equitable remedies.
The arbitrator described the evidence of what the owners had paid over the years as
“sparse.” CP at 14. The parties had receipts or copies of checks for some of their expenses but
lacked documentation for many others. Lewis and an expert prepared a spreadsheet “setting
forth the amounts paid and amounts due for each unit and unit owner.” CP at 15. The arbitrator
commended that effort but had “serious concerns that this spreadsheet does not provide an
accurate overview of the amounts paid or contributed by each unit owner.” CP at 15.
The arbitrator explained those concerns. Kat’s Cove had received an insurance
reimbursement, and although “[o]nly Mr. Lewis knows the exact amount of the refund payment
and only Mr. Lewis knows what happened to those funds,” there was “no documentation to
substantiate” his accounting of them. CP at 15. The arbitrator also questioned “the integrity of
the data” in the spreadsheet, noting that the expert “did not or could not verify all of the
payments allegedly made” by Lewis and that some entries were not supported by checks or
invoices. CP at 15. And the spreadsheet contained “some questionable entries.” CP at 15.
The arbitrator then set forth his legal analysis and reasoning for the accounting
counterclaim:
The rule is that “[c]laimants generally must establish damages with reasonable
certainty.” Holmquist v. King Cnty., 192 Wn. App. 551, 559, 368 P.3d 234 (2016).
“Although mathematical certainty is not required, the amount of damages must be
supported by competent evidence.” Id. at 560. “Evidence of damage is sufficient
if it gives the trier of fact a reasonable basis for estimating the loss and does not
require mere speculation or conjecture.” Id.
Here, I am convinced that Mr. Lewis paid more than his fair share of the expenses
for Kat’s Cove. In other words, Mr. Lewis has proven the fact of damages.
However, the evidence here is insufficient to prove the amount of damages. A
sufficient record does not exist from which I can feel reasonably certain that each
owner and unit is being given proper credit for all payments made to Kat’s Cove or
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for the benefit of the owners of Kat’s Cove. If I were to make an award on the
accounting claim, then it would require speculation or conjecture and this is not a
permissible basis for determining the amount of damages.
Regardless of who paid how much in dues or otherwise, the inescapable conclusion
is that Mr. Lewis was in the best position to prevent these problems from arising.
....
I am not implying that Mr. Lewis had bad intentions, but this was his property and
the condominium association was his creation and he was in the best position to
provide initial oversight.
CP at 15.
The arbitrator continued:
“It is well settled that a party with unclean hands cannot recover in equity.” Miller
v. Paul M. Wolff Co., 178 Wn. App. 957, 965, 316 P.3d 1113 (2014). Equity will
not interfere on behalf of a party whose conduct in connection with the subject
matter or transaction in litigation has been unconscientious, unjust, or marked by
want of good faith. Portion Pack, Inc. v. Bond, 44 Wn.2d 161, 265 P.2d 1045
(1954). . . . If Mr. Lewis had conscientiously laid the groundwork for management
of the association . . . then I strongly feel that this lawsuit would have been avoided.
By no means do I excuse the actions of the other unit owners who also failed to pay
dues or take the initiative to properly form a board of directors and manage the
association. However, the equities in this case lead me to the conclusion that an
accounting would be inequitable.
CP at 15-16.
Based on this analysis, the arbitrator denied the accounting counterclaim.
Attorney Fees
Paragraph 12.6.4 of Kat’s Cove’s declaration provides that a party “substantially
prevailing in such arbitration shall be entitled to recover from the other party or parties thereto,
such reasonable amounts for its costs and attorney fees incurred in connection with the
arbitration as shall be determined by the arbitrator.” CP at 81. In the November decision, the
arbitrator stated without discussion that Hochhalter was the substantially prevailing party and
was entitled to reasonable attorney fees and costs from Lewis.
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No. 60637-2-II
In the January decision, the arbitrator determined the amount of fees and costs. He
recited the lodestar method for determining reasonable attorney fees, including that hours should
be discounted for time “spent on unsuccessful claims, duplicated effort, or otherwise
unproductive time.” CP at 339-40. He determined that the hourly rate of Hochhalter’s counsel
was reasonable and stated that he needed to determine the hours “reasonably expended,” taking
into account the claims on which Hochhalter had prevailed. CP at 340. He noted that
Hochhalter had asserted “six separate claims for relief” and that Lewis had brought “one
counterclaim for an equitable accounting.” CP at 340.
The arbitrator then addressed each of Hochhalter’s claims. He determined that
Hochhalter substantially prevailed on two claims: the request to declare that Kat’s Cove had no
valid officers or directors and the request to declare the purported officers’ and directors’ actions
void, “with the exception that the promissory note executed by David Lewis on behalf of the
Association shall remain a valid debt of the Association.” CP at 340. Lewis substantially
prevailed on one claim: the request to bar him from ever serving as an officer or director. Two
claims were uncontested: the request for a declaration regarding dues and the request for a
special meeting. And the request to bar Lewis from acting on behalf of Kat’s Cove was moot
“because the temporary restraining order was already in place” by the time the case reached
arbitration. CP at 341.
Regarding Lewis’s accounting counterclaim, the arbitrator stated that no party
substantially prevailed. He explained that under his ruling no owner owed the association for
past debts, so “the slate is wiped clean and all owners must pay their fair share moving forward.”
CP at 341. He noted “compelling evidence” that Lewis had paid more than his fair share, but
explained that he made no award “because too much time had passed, the amounts owed by each
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No. 60637-2-II
party simply would have been too speculative, and there was collective responsibility of all
owners which contributed to the ongoing failure of the Association to regularly impose and
collect dues.” CP at 341.
The arbitrator then considered other factors, noting that Lewis had prevailed on some
contested motions and that some litigation in the trial court had to be duplicated in arbitration. “In
light of all of the considerations discussed above,” the arbitrator awarded Hochhalter one-half of
the requested attorney fees, a total of $30,262.50, and costs of $602.45. CP at 342.
Trial Court Proceedings
Hochhalter moved in the trial court to confirm the arbitration award. Lewis then moved
to modify, correct, or vacate the award, arguing that the award contained legal errors on its face.
The trial court described the November decision as “well reasoned and specific as to each
claim.” Rep. of Proc. (RP) at 24. The court stated that it was “a little troubled” by the
accounting section of the decision, but it did not vacate that ruling. RP at 26.
Compared to “how careful” the arbitrator had been elsewhere in the ruling, the trial court
described the attorney fee award as “a little odd” and “a little random.” RP at 25-26. The court
stated that it had “no idea how he came up with the fees.” RP at 25. The court did “not
necessarily agree as to exactly who the prevailing party is,” but agreed that Hochhalter had
prevailed on “two out of the six major issues.” RP at 26. The court reduced the attorney fees to
$19,800, which the court described as “a third of the award of the $60,000.” RP at 26.
The trial court entered an order confirming the award but reducing the attorney fees to
$19,800. The order stated only that “[t]he arbitrator’s award is approved, except that attorney’s
fees awarded is reduced to $19,800.00.” CP at 355. In February 2025, the court entered
judgment on the award as modified.
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Lewis appeals the trial court’s confirmation of the arbitration award and entry of
judgment. Hochhalter cross-appeals the trial court’s reduction of the arbitrator’s attorney fee
award.
ANALYSIS
A. WASHINGTON ARBITRATION ACT
Washington’s arbitration act, chapter 7.04A RCW, governs the arbitration process and
enforcement of arbitration awards.
Once an arbitration is complete, RCW 7.04A.190(1) requires an arbitrator to make a
record of an award and give notice of that award to each party to the arbitration proceeding.
RCW 7.04A.200 states that the arbitrator may modify or correct the award under certain
circumstances. Following a final award, RCW 7.04A.220 allows either party to file a motion
with the trial court to confirm the award. Either party also may file a motion with the trial court
to vacate the award under RCW 7.04A.230 or to modify or correct the award under RCW
7.04A.240. Those statutes provide specific grounds for modifying, correcting, or vacating
arbitration awards.
RCW 7.04A.220 provides that the court shall issue an order confirming the arbitration
award unless the award is modified or corrected under RCW 7.04A.200 or .240, or vacated under
RCW 7.04A.230. Further, once the trial court enters an order confirming the arbitration award,
RCW 7.04A.250(1) provides that the court shall enter a judgment on the award.
RCW 7.04A.280(1) states that parties may appeal orders confirming, modifying,
correcting, or vacating an arbitration award and a final judgment on the award. The appellate
court’s review is “ ‘limited to the same standard applicable in the court that confirmed, vacated,
modified, or corrected the award.’ ” State v. Am. Tobacco Co., 28 Wn. App. 2d 452, 478, 537
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No. 60637-2-II
P.3d 303 (2023) (quoting Salewski v. Pilchuck Veterinary Hosp., Inc., 189 Wn. App. 898, 903,
359 P.3d 884 (2015)).
B. VACATION OF ARBITRATION AWARD
Lewis argues that the trial court should have vacated the arbitration award under RCW
7.04A.230(1)(d) because the award contains legal errors on its face. We disagree.
1. Statutory Grounds for Vacation
RCW 7.04A.230(1) states that the trial court shall vacate the arbitration award if one of
several grounds are present. Our review is limited to determining whether one of the statutory
grounds for vacation exists. Mainline Rock & Ballast, Inc. v. Barnes, Inc., 8 Wn. App. 2d 594,
607, 439 P.3d 662 (2019). And the party seeking to vacate the award has the burden of showing
that a statutory ground applies. Id. at 609.
The only ground for vacation potentially applicable here is RCW 7.04A.230(1)(d): “[a]n
arbitrator exceeded the arbitrator’s powers.” Under this provision, an arbitration award can be
vacated if a legal error appears on the face of the award. Broom v. Morgan Stanley DW, Inc., 169
Wn.2d 231, 239, 236 P.3d 182 (2010).3
However, trial courts considering a motion to vacate an arbitration award and appellate
courts on appeal generally do not address the merits of arbitration awards. AURC III, LLC v.
Point Ruston Phase II, LLC, 3 Wn.3d 80, 96, 546 P.3d 385 (2024). When reviewing an
arbitration award, trial courts do not conduct a trial de novo, do not consider the merits of the
case, and do not reexamine the evidence. Broom, 169 Wn.2d at 239. “[C]ourts may not search
the arbitral proceedings for any legal error.” Id. And the facial legal error standard “does not
3
Broom involved a previous version of this statutory ground, former RCW 7.04.160(4) (repealed
in 2005).
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No. 60637-2-II
extend to a potential legal error that depends on the consideration of the specific evidence offered
or to an indirect sufficiency of the evidence challenge.” Salewski, 189 Wn. App. at 904.
Public policy in Washington strongly favors the finality of arbitration awards. Jensen v.
Misner, 1 Wn. App. 2d 835, 841, 407 P.3d 1183 (2017). As a result, the facial legal error rule is a
“very narrow” means of vacating an award. Mainline Rock, 8 Wn. App. 2d at 609. Historically,
Washington courts have “applied the facial legal error standard carefully.” Id.; see, e.g., Broom,
169 Wn.2d at 244-45 (the arbitrator applied a statute of limitations that was not applicable to
arbitration); Salewski, 189 Wn. App. at 904 (giving an example of an arbitrator awarding
punitive damages when the law does not allow punitive damages).
The court in Mainline Rock explained the scope of the facial legal error standard:
An arbitration award shall not be vacated if the appellant’s argument cannot be
decided without delving into the substantive merits of the claim. The error must be
recognizable from the language of the award. We do not address mistakes of law
not found on the face of the award. We do not reach the merits of the arbitrator's
legal conclusions. We do not even review the arbitration decision under an arbitrary
and capricious standard.
8 Wn. App. 2d at 610 (citations omitted). “[U]nless the award on its face shows the adoption of
an erroneous rule or mistake in applying the law, the award will not be vacated or modified.” Id.
at 609.
Lewis argues that we should review de novo whether equitable relief is appropriate,
whether a party is entitled to attorney fees, and which party substantially prevailed. He cites
Niemann v. Vaughn Cmty. Church, 154 Wn.2d 365, 374, 113 P.3d 463 (2005) and In re Estate of
Boatman, 17 Wn. App. 2d 418, 426, 488 P.3d 845 (2021). But both of these cases involved the
direct review of a trial court’s rulings, not the review of an arbitration award. As discussed
above, our review of an arbitration award is limited to whether legal error appears on the face of
the arbitration award, such as where the arbitrator adopts an erroneous rule or mistakenly applies
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No. 60637-2-II
the law. Mainline Rock, 8 Wn. App. 2d at 609. We do not engage in de novo review of an
arbitrator’s rulings.
Although there is a split in authority, the more recent cases hold that the face of the award
includes the arbitrator’s reasoning. See Id., 8 Wn. App. 2d at 611-12. “ ‘Where a final award
sets forth the arbitrator’s reasoning along with the actual dollar amounts awarded, any issue of
law evident in the reasoning may also be considered as part of the face of the award.’ ” Salewski,
189 Wn. App. at 904 (quoting Cummings v. Budget Tank Removal & Envtl. Servs., LLC, 163 Wn.
App. 379, 389, 260 P.3d 220 (2011)).4
2. Analysis of Accounting Counterclaim
Lewis argues that the accounting claim portion of the arbitration award contains several
legal errors on its face. He argues that the arbitrator (1) failed to conduct a proper accounting,
(2) misallocated the burden of proof for the accounting counterclaim, (3) applied a higher
standard of proof to the amount of damages than to the fact of damages, and (4) misapplied the
unclean hands doctrine. We disagree.
a. Proper Accounting
Lewis argues that the arbitrator failed to conduct a proper accounting, relying on a rule
that when equity undertakes an accounting, the court will “so far as possible, ascertain all of the
facts and decree absolute justice between the parties.” Muscek v. Equitable Sav. & Loan Ass’n,
25 Wn.2d 546, 555, 171 P.2d 856 (1946). He contends that the arbitrator departed from that rule
by giving all owners a “fresh start” instead of determining what each owner owed.
4
Lewis asserts that the face of the arbitration award includes the November letter, the January
letter, and the arbitration judgment. Hochhalter does not contest this assertion. We therefore
treat all three documents as the face of the arbitration award.
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No. 60637-2-II
But the arbitration award does not show that the arbitrator departed from the rule that
Lewis cites. The rule itself requires a court to ascertain the facts only “so far as possible.”
Muscek, 25 Wn.2d at 555. The arbitrator reviewed the evidence of each owner’s payments,
including the spreadsheet Lewis offered, and concluded that the record did not allow him to
determine the amounts owed without speculation. That is a conclusion that a complete
accounting was not possible on this record, not a refusal to undertake one. And whether the
evidence allowed a more complete accounting is a question of evidentiary sufficiency, which we
cannot review. Salewski, 189 Wn. App. at 904.
We hold that the arbitration award does not contain a facial legal error regarding a proper
accounting.
b. Burden of Proof
Lewis argues that the arbitrator misallocated the burden of proof, relying on a rule that
each party bears the burden of proving its own claimed credits in an accounting. Spalding v.
Mason, 161 U.S. 375, 394, 16 S. Ct. 592, 40 L. Ed. 738 (1896). He contends that the arbitrator
departed from that rule by denying him relief because the other owners failed to prove what they
had paid.
But the arbitration award does not state a rule contrary to the one Lewis cites. The only
statement in the award that bears on the burden of proof is the general rule that “ ‘[c]laimants
generally must establish damages with reasonable certainty.’ ” CP at 15 (quoting Holmquist v.
King County., 192 Wn. App. 551, 559, 368 P.3d 234 (2016)). That rule places the burden of
proving his own damages on Lewis, which he does not dispute. Nothing on the face of the
arbitration award assigns Lewis the burden of proving the other owners’ payments.
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No. 60637-2-II
The face of the arbitration award also does not show that the arbitrator misapplied that
rule by requiring Lewis to prove the other owners’ payments. Lewis infers such an allocation
from the arbitrator’s statement that he could not “feel reasonably certain that each owner and unit
is being given proper credit for all payments made to Kat’s Cove or for the benefit of the owners
of Kat’s Cove.” CP at 15. He reads that statement to mean that he was denied relief because the
other owners failed to prove their credits.
But that statement does not allocate the burden of proof. On its face, it describes only the
state of the record and does not say which party was responsible for proving any owner’s
payments. And many of the arbitrator’s specific concerns related to Lewis’s own proof: an
insurance reimbursement with “no documentation to substantiate” Lewis’s account, payments by
Lewis that his expert “did not or could not verify,” and “questionable entries” in Lewis’s
spreadsheet. CP at 15. Read in that context, the arbitrator’s statement expresses doubt about the
reliability of the evidence as a whole, and does not state a rule about who had to produce that
evidence. Lewis’s contrary reading is an inference, and facial legal error must be recognizable
“from the language of the award,” Mainline Rock, 8 Wn. App. 2d at 610, and an inference drawn
from one possible reading of the arbitrator’s language does not meet that standard.
We hold that the arbitration award does not contain a facial legal error in its allocation of
the burden of proof.
c. Amount of Damages
Lewis argues that the arbitrator improperly applied a higher standard of proof to the
amount of his damages than to the fact of his damages. He relies on a rule that once the fact of
damage is established, uncertainty as to the amount will not prevent recovery. Lewis River Golf,
Inc. v. O.M. Scott & Sons, 120 Wn.2d 712, 717-18, 845 P.2d 987 (1993); Holmquist, 192 Wn.
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No. 60637-2-II
App. at 560. He contends that the arbitrator departed from that rule by denying him any
recovery after concluding that he had proven the fact of damages.
But the arbitration award does not state a rule contrary to the one Lewis cites. The
arbitrator quoted Holmquist for the principles that “ ‘mathematical certainty is not required’ ”
and that evidence is sufficient “ ‘if it gives the trier of fact a reasonable basis for estimating the
loss and does not require mere speculation or conjecture.’ ” CP at 15 (quoting Holmquist, 192
Wn. App. at 560).
The face of the arbitration award does not show that the arbitrator misapplied that
standard. The arbitrator distinguished between the fact and the amount of damages, considered
whether the evidence gave him a reasonable basis for estimating the amount, and concluded that
it did not. The rule Lewis cites relaxes the precision required to prove the amount of damages,
but it does not eliminate the need for a reasonable basis for an estimate. See Holmquist, 192 Wn.
App. at 560.
Lewis also argues that it was legal error for the arbitrator to omit Holmquist’s statement
that once the fact of damages is established, uncertainty as to the amount will not prevent
recovery. 192 Wn. App. at 559-60. But mere omission of a rule in an arbitration award is not
facial legal error. In fact, an arbitrator is not required to provide any reasoning or analysis
behind an award. Mainline Rock, 8 Wn. App. 2d at 614.
Finally, Lewis argues that if his evidence was sufficient to establish the fact of damages,
it was sufficient as a matter of law to prove the amount of damages. But proof of the fact of
damage does not compel an award when the evidence provides no reasonable basis for
determining the amount. See Burkheimer v. Thrifty Inv. Co., 12 Wn. App. 924, 928-29, 533 P.2d
449 (1975) (affirming the trial court’s denial of recovery where it was “perfectly clear” that
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No. 60637-2-II
damages resulted but the computation of damages was “too speculative to permit recovery”).
And whether the evidence here provided a reasonable basis for estimating damages is a question
of evidentiary sufficiency, which we cannot review. Salewski, 189 Wn. App. at 904.
We hold that the arbitration award does not contain a facial legal error in the standard of
proof the arbitrator applied to the amount of damages.
d. Unclean Hands
Lewis argues that the arbitrator misapplied the unclean hands doctrine. But we decline to
decide whether the arbitrator misapplied the doctrine because his damages ruling independently
supports the denial of the accounting counterclaim.
3. Analysis of Attorney Fee Award
Lewis argues that it was facial legal error for the arbitration award to designate
Hochhalter as the substantially prevailing party. We disagree.
Lewis relies on the rules that when neither party wholly prevails, the substantially
prevailing party depends on the extent of the relief afforded, and that when both parties prevail
on major issues, no party substantially prevails. Marassi v. Lau, 71 Wn. App. 912, 916, 859 P.2d
605 (1993); Puget Sound Serv. Corp. v. Bush, 45 Wn. App. 312, 320-21, 724 P.2d 1127 (1986).
He contends that he substantially prevailed because he should have prevailed on the accounting
counterclaim, and because the promissory note in favor of his company remained valid, making
him the only party owed money. In the alternative, Lewis contends that no party substantially
prevailed because each side prevailed on two major issues.
But the arbitration award does not state a rule contrary to those Lewis cites. The
arbitrator recited the lodestar method, stated that he needed to consider “which claims and issues
the Plaintiffs prevailed on and which they did not,” and then addressed the outcome of each
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No. 60637-2-II
claim. CP at 339-41. The arbitrator did not cite authority for determining the substantially
prevailing party, but an arbitrator is not required to explain the reasoning behind an award, and
the absence of a stated rule is not a facial legal error. See Mainline Rock, 8 Wn. App. 2d at 614.
Further, the face of the award does not show that the arbitrator misapplied those rules.
The arbitrator identified each claim, determined who prevailed on that claim, and awarded
Hochhalter half of the requested fees “[i]n light of all of the considerations.” CP at 340-42.
Lewis’s first argument that he should have prevailed on the accounting counterclaim fails
because, as discussed above, he is not entitled to vacation of the ruling on the accounting
counterclaim. Regarding his argument that he was the only party owed money, the arbitrator
accounted for that fact by treating the promissory note as an exception to a claim on which
Hochhalter prevailed. Lewis’s contention that the note deserved more weight, like his alternative
argument that each side prevailed on two major issues, challenges how the arbitrator weighed
and characterized the outcomes. But how to characterize the outcome of each claim, and how
much weight each claim deserved, depends on the arbitrator’s assessment of the evidence,
claims, and proceedings, which we cannot reexamine. Salewski, 189 Wn. App. at 904.
We hold that the arbitration award does not contain a facial legal error in its designation
of Hochhalter as the substantially prevailing party.
4. Summary
The arbitration award here was based on the specific facts of this case. Faced with sparse
records spanning many years, the arbitrator created what he considered to be an equitable
resolution of the parties’ dispute. The arbitration statutes seek to avoid judicial intervention in a
fact-based arbitration award. See Westmark Props., Inc. v. McGuire, 53 Wn. App. 400, 402, 766
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P.2d 1146 (1989) (stating that the purpose of arbitration is to avoid the courts, “not to serve as a
prelude to litigation”).
Lewis failed to meet his burden of showing a facial legal error that requires vacating the
award. Accordingly, we hold that Lewis was not entitled to vacation of the award under RCW
7.04A.230(1)(d).
C. MODIFICATION OF ATTORNEY FEE AWARD
Hochhalter argues in his cross-appeal that the trial court had no authority to reduce the
arbitrator’s attorney fee award. We agree.
RCW 7.04A.220 states that a trial court must confirm an arbitration award unless the
award is modified or corrected under RCW 7.04A.200 or .240, or vacated under RCW
7.04A.230. Under RCW 7.04A.240(1), the court shall modify or correct an award only if (a)
there was an evident mathematical miscalculation or an evident mistake in the description of a
person, thing, or property referred to in the award, (b) the arbitrator made an award on a claim
not submitted to the arbitrator and the award may be corrected without affecting the merits of the
decision on the claims submitted, or (c) the award is imperfect in a matter of form not affecting
the merits of the decision on the claims submitted. If none of these grounds applies, “the court
shall confirm the award.” RCW 7.04A.240(2).
Here, none of the grounds for modification applies. The arbitrator explained that he was
awarding half of the requested fees, so there was no evident mathematical miscalculation. The
attorney fee request was submitted to the arbitrator under paragraph 12.6.4 of the declaration.
And the reduction was not a correction of form.
Neither the trial court’s order nor the record of the hearing refers to RCW 7.04A.240 or
identifies any other statutory basis for the reduction. Instead, the court reduced the fees based on
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No. 60637-2-II
its own view of who prevailed. The court stated that it had “no idea how he came up with the
fees” and that it did “not necessarily agree as to exactly who the prevailing party is.” RP at 25-
26. The court then set the fees at $19,800 based on its view that Hochhalter prevailed on “two
out of the six major issues.” RP at 26. That was a redetermination of the merits of the fee award,
which RCW 7.04A.240 does not permit.
Lewis argues that the trial court was entitled to review the arbitrator’s legal analysis for
facial legal error, but the remedy in that situation would be vacation under RCW 7.04A.230, not
modification. And as discussed above, the award contains no facial legal error in its prevailing
party determination.
We hold that the trial court erred in reducing the arbitrator’s attorney fee award because
no statutory ground authorized the court to modify that portion of the award. Accordingly, we
reverse the reduction and remand for entry of judgment consistent with the arbitrator’s award of
$30,262.50 in attorney fees.
D. ATTORNEY FEES ON APPEAL
Both parties request attorney fees on appeal under paragraph 12.6.4 of Kat’s Cove’s
declaration. We award attorney fees to Hochhalter and deny Lewis’s request.
RAP 18.1(a) allows a party to recover reasonable attorney fees on appeal if applicable
law grants that party the right to recover them. A contractual provision authorizing attorney fees
at trial supports an award of fees on appeal. Boyd v. Davis, 127 Wn.2d 256, 264, 897 P.2d 1239
(1995). Paragraph 12.6.4 of the Kat’s Cove declaration provides that a party substantially
prevailing in arbitration is entitled to recover reasonable attorney fees “incurred in connection
with the arbitration.” CP at 81. Both parties agree that this provision entitles the substantially
prevailing party on appeal to reasonable attorney fees.
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No. 60637-2-II
Hochhalter is the substantially prevailing party on appeal because he prevails on both
Lewis’s appeal and his own cross-appeal. Accordingly, we award Hochhalter reasonable
attorney fees. Because Lewis does not prevail, we deny his request.
CONCLUSION
We affirm the trial court’s confirmation of the arbitration award, reverse the trial court’s
reduction of the arbitrator’s attorney fee award, and remand for entry of judgment consistent with
the arbitrator’s attorney fee award.
A majority of the panel having determined that this opinion will not be printed in the
Washington Appellate Reports, but will be filed for public record in accordance with RCW
2.06.040, it is so ordered.
MAXA, J.
We concur:
PRICE, A.C.J.
CRUSER, J.
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