“A party that offers no argument in its opening brief on a claimed assignment of error waives the assignment.”
How later courts described this case
- “A party that offers no argument in its opening brief on a claimed assignment of error waives the assignment.”
Written by the judges who cited it.
The opinion
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
WEST COAST SELF STORAGE LLC,
No. 86506-4-I
Appellant,
DIVISION ONE
v.
UNPUBLISHED OPINION
STATE OF WASHINGTON
DEPARTMENT OF REVENUE,
Respondent.
MANN, J. — West Coast Self Storage Group (West Coast) provides development,
construction management, and property management services to owners of self-storage
facilities. West Coast entered into an Affiliation Agreement, followed by Development
Agreements and Construction Management Agreements (CMA) with Catalyst Storage
Partners LLC (Catalyst) to develop and construct five self-storage facilities in
Washington.
After an audit, the Department of Revenue (Department) determined that West
Coast was responsible for construction of the self-storage facilities and assessed the
retail sales classification of the business and occupation (B&O) tax under RCW
82.04.250, and the retail sales tax under RCW 82.08.020. West Coast appeals a
decision by the Board of Tax Appeals (Board) affirming the assessments.
We affirm the assessment.
No. 86506-4-I/2
I
A
West Coast provides development, construction management, and property
management services to owners of self-storage properties in Washington, Oregon, and
California. West Coast is not a licensed contractor. In 2008, West Coast entered into
an “Affiliation Agreement” with Catalyst Storage Partners LLC (Catalyst). 1 The
Affiliation Agreement provided the framework in which West Coast agreed to identify
sites to be developed into self-storage facilities that would be owned, acquired, or
leased by Catalyst. The Affiliation Agreement set forth the process by which projects
would be approved for development and construction. The Affiliation Agreement
included as exhibits a model Development Agreement, Acquisition Agreement,
Management Services Agreement, and Construction Management Agreement (CMA).
Relevant here are West Coast’s development services and construction
management services related to five projects: Padden Parkway, Columbia City,
Sheridan Beach, West Seattle, and East Vancouver. West Coast entered into
Development Agreements with Catalyst for each project. Under the Development
Agreements, West Coast provided the following services: site identification, site
evaluation, preparation of purchase and sale agreement, entitlements and design, due
diligence, preparation of a real estate package, site coordination, and obtaining building
permits. 2
1 Catalyst is short for both Catalyst Storage Seattle (CSS) and Catalyst Storage Partners (CSP).
2 It is undisputed that the Development Agreements for each project are materially similar and so
for clarity we refer to them collectively.
-2-
No. 86506-4-I/3
The Development Agreements also required West Coast to find a qualified
general contractor, negotiate a construction contract, and obtain and negotiate bid
proposals for the major cost elements. The Development Agreements incorporated a
model CMA as an exhibit. West Coast was compensated with a development fee of 2
percent of the total project cost with 25 percent due upon initial project approval and the
remaining 75 percent when Catalyst granted construction approval.
West Coast and Catalyst then entered into CMAs for the five projects. 3
Consistent with the model CMA, section 3 of the Padden Parkway, Columbia City,
Sheridan Beach, and East Vancouver CMAs listed the “construction services to be
performed by” West Coast, as “Construction Manager.” The Construction services
included, in relevant part:
4.1. Construction of Improvements. The Owner hereby engages and
authorizes Construction Manager to perform or provide the services
described in this Section 4 relating to the construction of the
improvements. Construction Manager hereby agrees to perform or
provide such services. . . .
4.2. Services to be performed by Construction Manager During
Construction. Construction Manager shall monitor and use its best efforts
to cause the construction of improvements to proceed and be completed
in accordance with or in advance of the schedule, which efforts shall
include, without limitation, the following responsibilities: . . .[4]
4.7 Substantial and Final Completion.
(a) Construction Manager shall cause construction of the improvements to
proceed so that the improvements are substantially completed and then
finally completed (i) within the Development Budget, (ii) in a good and
workmanlike manner in accordance with the plans and specifications and
all legal requirements, and (iii) in accordance with the Schedule. [West
Coast] shall not permit the construction of the improvements to be
3 It is undisputed that the CMAs are materially similar and so for clarity we refer to them
collectively. The few differences among the agreements are noted in the discussion below.
4 For the Sheridan Park CMA, these paragraphs are renumbered as paragraphs 3.1 and 3.2.
-3-
No. 86506-4-I/4
abandoned or permanently discontinued. Construction Manager shall
promptly give notice to the Owner of the completion of the
improvements.[5]
The West Seattle CMA included several changes in language. First, a new
recital was added stating that West Coast, as the Owner’s Representative, was not
responsible for the actual performance of the construction:
Owner acknowledges and agrees that Owner’s Representative is not a
licensed contractor, it will only act in the capacity as an adviser to and
representative of Owner, and nothing in this Agreement makes Owner’s
Representative responsible for the actual performance of the construction
of the project.
Second, the “constructive services” section and paragraphs were renumbered as
paragraph 3, and relabeled as “constructive oversight and advisory services.” The
language of the services was modified as follows:
3.1. Construction of Improvements. The Owner hereby engages and
authorizes Owner’s Representative to perform or provide the oversight
and advisory services described in this Section 3 . . . relating to the
construction of the improvements. Owner’s Representative hereby agrees
to perform or provide such services.
3.2 Services to be Performed by Owner’s Representative During
Construction. Owner’s Representative shall monitor, on behalf of the
Owner, and make progress reports to Owner and make necessary
recommendations to cause the General Contractor’s construction of the
improvements to proceed and be completed in accordance with or in
advance of the schedule, which efforts shall include, without limitation, the
following responsibilities:
....
3.7 Substantial and Final Completion. Owner’s Representative, as
adviser to the Owner, shall provide status report to the Owner and make
recommendations to cause the General Contractor’s construction of the
5 Paragraph 3.7 was modified in the Sheridan Beach CMA to read: “Construction Manager, as
adviser to the Owner, shall cause constructions of the improvements to proceed.”
-4-
No. 86506-4-I/5
improvements to proceed so that the improvements are substantially
completed and then finally completed (i) within the Development Budget,
(ii) in a good and workmanlike manner in accordance with the plans and
specifications and all legal requirements, and (iii) in accordance with the
schedule. Construction Manager shall not permit the construction of the
improvements to be abandoned or permanently discontinued by the
General Contractor. Construction Manager shall promptly give notice to
the Owner of the completion of the improvements.
B
The Department audited West Coast for the period January 1, 2011, to
December 2015. The Department concluded that West Coast’s revenue for
development and construction management services fell within the retail sales
classification of the B&O tax under RCW 82.04.250, and the retail sales tax under RCW
82.08.020. The Department assessed $246,975 in retail sales tax, $12,469 in retailing
B&O tax, $71,976 in service and other activities B&O tax, $14,271 in interest, and a
$16,571 penalty.
West Coast appealed the assessment to the Department’s Administrative Review
and Hearing Division. The reviewing officer first affirmed the assessment, but on
reconsideration granted the petition for the portion of the revenue derived from work
under the Development Agreements, and denied the petition for the portion of the
revenue derived from work under the CMAs. On remand to address the portion of
development income, the Department could not differentiate between income received
under the Development Agreements from income received under the CMAs. As a
result, the Department made no change to the original assessment.
West Coast appealed to the Board and moved for summary judgment. A tax
referee entered an initial decision denying summary judgment to West Coast, but
-5-
No. 86506-4-I/6
granting it to the Department. West Coast sought review before the full Board, which
denied the petition and adopted the initial decision as its own. The final decision
included the following relevant conclusions of law:
14. The terms of the Affiliation Agreement, Development Agreements, and
Construction Management Agreements clearly show that, at the time the
Development Agreements were executed, the parties to the agreements
contemplated that [West Coast] would be awarded both Development
Agreements and Construction Management Agreements. “In construing a
contract, a court must interpret it according to the intent of the parties as
manifested by the words used.”
15. Because the parties to the Development and Construction
Management Agreements, at the time the Development Agreements were
entered into, contemplated that the same party would be awarded both
contracts, the Agreements are combined and taxed as a single activity.
RCW 82.04.051(2) and (3).
16. [West Coast] is the party responsible for construction because
Paragraph 4.7(a) of the Construction Management Agreements clearly
states that [West Coast] is required to:
[C]ause construction of the improvements to proceed so that
the improvements are substantially completed and then
finally completed (i) within the Development Budget, (ii) in
good and workmanlike manner in accordance with the plans
and specifications and all legal requirements, and (iii) in
accordance with the schedule. [West Coast] shall not permit
the construction of the improvements to be abandoned or
permanently discontinued.
17. In the event [West Coast] breaches this term of the Agreements, [West
Coast] is in breach and is liable for damages. The fact that another party
may also be liable does not relieve [West Coast] of its legal obligations
under the Agreements.
18. Because [West Coast] is responsible for the construction and the
predominant activity under the agreements is services rendered in respect
to constructing buildings or other structures, it is subject to retail B&O tax
and retail sales tax for all activities under the Agreements.
-6-
No. 86506-4-I/7
West Coast petitioned for review by the Snohomish County Superior Court. The
superior court transferred the petition to this court under RCW 34.05.518(1)(a), (b)(i).
II
A
We review decisions by the Board under the Administrative Procedure Act (APA),
ch. 34.05 RCW. Echo Glob. Logistics, Inc. v. Dep’t of Revenue, 22 Wn. App. 2d 942,
945, 514 P.3d 704 (2022). Relevant here, under the APA, this court may grant relief if
the Board “erroneously interpreted or applied the law.” RCW 34.05.570(3)(d); Steven
Klein, Inc. v. Dep’t of Revenue, 183 Wn.2d 889, 895, 357 P.3d 59 (2015). Because the
Board’s decision was on summary judgment, this court must “overlay the APA ‘error of
law’ standard of review with the summary judgment standard and review an agency’s
interpretation or application of the law de novo while viewing the facts in the light most
favorable to the nonmoving party.” Echo Glob. Logistics, 22 Wn. App. 2d at 945. The
Board may grant a motion for summary judgment “if the written record shows that,
viewing the evidence in a light most favorable to the nonmoving party, there is no
genuine issue as to any material fact and that a party is entitled to judgment as a matter
of law.” WAC 456-09-545; WAC 456-10-503.
“A reviewing court must accord substantial weight to an agency’s interpretation of
a statute within its expertise, and to an agency’s interpretation of rules that the agency
promulgated.’” PeaceHealth St. Joseph Med. Ctr. v. Dep’t of Revenue, 9 Wn. App. 2d
775, 779, 449 P.3d 676 (2019) (quoting Verizon Nw., Inc. v. Emp’t Sec. Dep’t, 164
Wn.2d 909, 915, 194 P.3d 255 (2008)), aff’d 196 Wn.2d 1, 468 P.3d 1056 (2020). As
the agency charged with assessing and collecting taxes, the Department is entitled to
-7-
No. 86506-4-I/8
this deference. See RCW 82.01.060(1) (department of revenue assesses and collects
all taxes).
As the party asserting invalidity, West Coast bears the burden of demonstrating
the invalidity of agency action. RCW 34.05.570(1)(a). 6
B
Washington imposes B&O tax for the “act or privilege of engaging in business
activities.” RCW 82.04.220(1). Most services and other activities not specifically taxed
under another classification are subject to B&O tax under the “service and other”
classification. RCW 82.04.290(2). Such services are taxed at a higher B&O rate than
most activities, but importantly, are not subject to retail sales tax.
In contrast, Washington imposes a retail sales tax and a B&O tax on retail sales
related to construction. RCW 82.04.250; RCW 82.08.020. For construction, a retail
sale is defined, in relevant part, as:
[T]he sale of or charge made for . . . labor and services rendered in
respect to . . . [t]he constructing, repairing, decorating, or improving of new
or existing buildings or other structures under, upon, or above real
property of or for consumers.
RCW 82.04.050(2)(b).
In 1999, the Washington Legislature adopted RCW 82.04.051 and defined
“services rendered in respect to” in the context of “constructing, building, repairing,
6 West Coast assigns error to the Board’s grant of summary judgment in favor of the Department,
the nonmoving party. But summary judgment for the nonmoving party is appropriate when there are no
disputed facts and the nonmoving party is entitled to judgment as a matter of law. See Impecoven v.
Dep’t of Revenue, 120 Wn.2d 357, 365, 841 P.2d 752 (1992); Guardado v. Taylor, 17 Wn. App. 2d 676,
686, 490 P.3d 274 (2021). West Coast provides no argument on the claimed error and so we decline to
address it further. Brown v. Vail, 169 Wn.2d 318, 336 n.11, 237 P.3d 263 (2010) (“A party that offers no
argument in its opening brief on a claimed assignment of error waives the assignment.”).
-8-
No. 86506-4-I/9
improving, and decorating of buildings and other structures.” LAWS OF 1999, ch. 212, §§
1-2. The legislature explained its reasoning:
“services rendered in respect to constructing buildings or other structures”
has generally included the entire transaction for construction, including
certain services provided directly to the consumer or owner rather than the
person engaged in the performance of the constructing activity. Changes
in business practices and recent administrative and court decisions have
confused the issue. It is the intent of the legislature to clarify which
services, if standing alone and not part of the construction agreement, are
taxed as retail or wholesale sales, and which services will continue to be
taxed as a service.
LAWS OF 1999, ch. 212, § 1(1). The legislature clarified that the entire price for
construction was to continue to be taxed as a retail sale:
(2) It is further the intent of the legislature to confirm that the entire price
for the construction of a building or other structure for a consumer or
owner continues to be a retail sale, even though some of the individual
services reflected in the price, if provided alone, would be taxed as
services and not as separate retail or wholesale sales.
LAWS OF 1999, ch. 212, § 2.
Accordingly, RCW 82.04.051(1) defines the phrase “services rendered in respect
to” as
those services that are directly related to the constructing, building,
repairing, improving, and decorating of buildings or other structures and
that are performed by a person who is responsible for the performance of
the constructing, building, repairing, improving, or decorating activity.
(Emphasis added.) As of the time of the tax periods at issue here, the term “services
rendered in respect to” did not include certain professional services as:
engineering, architectural, surveying, flagging, accounting, legal,
consulting, land development or management, or administrative services
provided to the consumer of, or person responsible for performing, the
constructing, building, repairing, improving, or decorating services.
-9-
No. 86506-4-I/10
Former RCW 82.04.051(1) (1999). 7
RCW 82.04.051(1) defines the phrase “responsible for the performance” as the
person who “is obligated to perform the activities, either personally or through a third
party.” RCW 82.04.051(4)(b). This does not, however, include “[a] person who reviews
the work for a consumer, retailer, or wholesaler, but does not supervise or direct the
work.” RCW 82.04.051(4)(b).
RCW 82.04.051(2) addresses the situation where a person might be subject to a
services tax under RCW 82.04.290(2) for part of a contract or agreement, but also be
subject to a construction tax under RCW 82.04.250. Resolution of this question focuses
on the predominant activity:
(2) A contract or agreement under which a person is responsible for both
services that would otherwise be subject to tax as a service under RCW
82.04.290(2) and also constructing, building, repairing, improving, or
decorating activities that would otherwise be subject to tax under another
section of this chapter is subject to the tax that applies to the predominant
activity under the contract or agreement.
RCW 82.04.051(2) (emphasis added).
And finally, RCW 82.04.051(3) addresses the situation where a party enters into
successive contracts where the person is responsible for a services tax under RCW
82.04.290 for the first contract, and the construction tax under RCW 82.04.250 for the
subsequent contract. In that situation, the focus is on whether the subsequent contract
was anticipated:
(3) Unless otherwise provided by law, a contract or agreement under
which a person is responsible for activities that are subject to tax as a
service under RCW 82.04.290(2), and a subsequent contract or
7 As discussed below, this subsection of the statute was amended in 2020—after the relevant tax
periods.
-10-
No. 86506-4-I/11
agreement under which the same person is responsible for constructing,
building, repairing, improving, or decorating activities subject to tax under
another section of this chapter, shall not be combined and taxed as a
single activity if at the time of the first contract or agreement it was not
contemplated by the parties, as evidenced by the facts, that the same
person would be awarded both contracts.
(Emphasis added.)
Under this statutory framework, the primary questions before us are first, under
RCW 82.04.051(2), whether at the time of entering the model agreement or
Development Agreement, the parties anticipated that West Coast would be awarded
both the Development Agreements and CMAs? If so, then we review the Development
Agreements and CMAs as a single event. Second, was West Coast responsible under
the CMAs for “services rendered in respect to” construction as defined by RCW
82.04.051? This second step requires that we determine (a) were the services “directly
related” to construction; (b) was West Coast “responsible for the performance of” the
construction; and (c) was the construction activity the predominant activity under
agreements?
III
At the outset, West Coast argues that a 2020 amendment to RCW 82.04.051(1),
excluding “land development or management services” from retail sales, should apply
retroactively. We disagree. 8
8 Because we conclude that the Development Agreements and CMAs should be viewed as a
single taxing event, and that the predominant activity was construction, it may be irrelevant whether the
2020 amendment affects the outcome because services performed under the CMAs predominated over
those in the Development Agreements. We include this analysis to address West Coast’s assignment of
error.
-11-
No. 86506-4-I/12
In 2020, five years after the audit period in question, the legislature amended
RCW 82.04.051(1) and expanded the definition of “services rendered in respect to” as
used in RCW 82.04.050 to exclude “land development or management” services.
RCW 82.04.051(1) now states that “services rendered in respect to” means
in the context of constructing, building, repairing, improving, and
decorating buildings or other structures, those services that are directly
related to the constructing, building, repairing, improving, and decorating
of buildings or other structures and that are performed by a person who is
responsible for the performance of the constructing, building, repairing,
improving, or decorating activity. The term does not include services such
as engineering, architectural, surveying, flagging, accounting, legal,
consulting, land development or management, or administrative services
provided to the consumer of, or person responsible for performing, the
constructing, building, repairing, improving, or decorating services.
(Emphasis added.) The legislature then defined “land development or management as:
site identification, zoning, permitting, and other preconstruction regulatory
services provided to the consumer of the constructing, building, repairing,
improving, or decorating services. This includes, but is not limited to,
acting as an owner’s representative during any design or construction
period, including recommending a contractor, monitoring the budget and
schedule, approving invoices, and interacting on the behalf of the
consumer with the person who has control over the work itself or
responsible for the performance of the work.
RCW 82.04.051(4)(a).
“Courts generally presume that statutes act prospectively absent contrary
legislative intention.” Wash. Waste Sys., Inc. v. Clark County, 115 Wn.2d 74, 78, 794
P.2d 508 (1990). “But curative statutes, i.e., statutes which clarify ambiguities in older
legislation without changing prior case law, presumably act retroactively.” Washington
Waste Sys., 115 Wn.2d at 78. For example, in McGee Guest Home, Inc. v. Dep’t of
Soc. & Health Servs. of State of Wash., 142 Wn.2d 316, 325, 12 P.3d 144 (2000), our
Supreme Court held that certain amendments to the APA were retroactive. In that case,
-12-
No. 86506-4-I/13
the amendment at issue expressly intended to clarify an ambiguity in the statute created
by a recent superior court decision. McGee, 142 Wn.2d at 324. The court explained
that the amendment was curative because it clarified the ambiguity. McGee, 142 Wn.2d
at 325-26.
When RCW 82.04.051 was first enacted in 1999, the legislature explained its
intent to clarify services in light of changing business practices and then recent court
decisions confusing the issue. But the legislative history of the 2020 amendment does
not include the intent to clarify or correct an ambiguity in the statute and there is no
mention of ambiguity created by a recent controversy. The legislature amended its
intent statement only to “[r]ecognize the need to remove barriers to the creation of
affordable housing.” LAWS OF 2020, ch. 109, § 1. The 2020 amendment was not
curative but reduced the scope of services subject to retail sales tax by excluding land
development or management services as applied to construction in an effort to remove
barriers for affordable housing. S.B. Rep. on H.B. 2229, at 2, 66th Leg., Reg. Sess.
(Wash. 2020).
For these reasons, we conclude that the 2020 amendment is not curative and
does not apply retroactively to West Coast’s activities.
IV
West Coast argues that the Board erred in concluding that it was the party
responsible for construction, and that the predominant activity under the Development
Agreements and CMAs when considered in combination was construction. We
disagree.
-13-
No. 86506-4-I/14
A
Under the statutory framework discussed above, we first determine whether at
the time of entering the Affiliation Agreement and Development Agreements, the parties
anticipated that West Coast would be awarded both the Development Agreements and
CMAs? RCW 82.04.051(2). The Board concluded that the parties met this standard:
[Finding of Fact 20.] The Affiliation Agreement, Development
Agreements, and Construction Management Agreements explicitly show
that, at the time the Affiliation Agreement and subsequently the
Development Agreements were executed, the parties not only
contemplated but intended that [West Coast] would be awarded the
subsequent Construction Management Agreements for each project.
[Conclusion of Law 14.] The terms of the Affiliation Agreement,
Development Agreements, and Construction Management Agreements
clearly show that, at the time the Development Agreements were
executed, the parties to the agreements contemplated that [West Coast]
would be awarded both the Development Agreements and Construction
Management Agreements.
West Coast does not assign error to the Board’s conclusion. West Coast provides no
argument that the Board erred by combining the agreements and seems to concede
that any error in reading the agreements together was harmless. 9 We agree with the
Board. 10 Accordingly, we view the services provided under the Development
Agreements together with the CMAs as a single taxing event.
B
We next address whether West Coast was responsible for “services rendered in
respect to” construction. RCW 82.04.051. This requires we determine (a) were the
9 Other than citing to language in the Department’s administrative determination, West Coast
does not argue differently.
10 As discussed above, the Affiliation Agreement included a model Development Agreement and
a model CMA. The executed Development Agreements were consistent with the model agreement and
also incorporated a model CMA. The executed CMAs were nearly identical to the model agreements.
-14-
No. 86506-4-I/15
services “directly related” to construction; (b) was West Coast “responsible for the
performance of” the construction; and (c) was the construction activity the predominant
activity under agreements? RCW 82.04.051(1), (2), (4).
1
RCW 82.04.051 does not define the phrase “directly related.” If “the statute
defines a term, we must rely on that provided definition.” Cave Props. v. City of
Bainbridge Island, 199 Wn. App. 651, 656, 401 P.3d 327 (2017). Undefined words in
statutes must be given their plain and ordinary meaning and interpreted in the context of
the statute. Ekelmann v. City of Poulsbo, 22 Wn. App. 2d 798, 807, 513 P.3d 840
(2022). We may refer to dictionary definitions to determine that plain meaning. Clark
County v. Portland Vancouver Junction R.R., LLC, 17 Wn. App. 2d 289, 295, 485 P.3d
985 (2021). The dictionary defines the word “directly” as meaning in a “direct manner”
or “directly relevant” and the word “relate” as including to “to show or establish logical or
causal connection between.” MERRIAM-W EBSTER ONLINE DICTIONARY, https://www.
merriam-webster.com/dictionary/directly; https://www.merriam-webster.com/dictionary/
relate (last visited Aug. 13, 2025). Accordingly, only activities that are relevant and
logically connected to construction qualify as directly related to construction.
There can be little dispute that all five of the CMAs at issue are directly related to
construction. Indeed, the opening recitals of all five CMAs include language similar to:
A. The Owner has approved the construction of a self-storage facility on
the real property referred to as . . .
B. Construction Manager[11] is engaged in the business of providing
contract management, budgeting, bid management, contractor
11 The West Seattle CMA substitutes “Owner’s Representative” for Construction Manager.
-15-
No. 86506-4-I/16
evaluation and selection construction supervision, oversight and
consulting services on behalf of property owners in connection with the
construction of self-storage facilities.
The CMAs directly relate to construction. West Coast does not argue to the contrary.
2
Again, RCW 82.04.051(4)(b) defines “responsible for the performance” to mean
that the person is obligated to perform the activities, either personally or
through a third party. A person who reviews work for a consumer, retailer,
or wholesaler but does not supervise or direct the work is not responsible
for the performance of the work.
Washington follows the objective manifestation theory of contracts. Hearst
Commc’ns, Inc. v. Seattle Times Co., 154 Wn.2d 493, 503, 115 P.3d 262 (2005). Under
this theory, we determine the parties’ intent from the reasonable meaning of the words
used rather than the unexpressed subjective intent of parties. Hearst Commc’ns, 154
Wn.2d at 503. Words are given their “ordinary, usual, and popular meaning unless a
contrary intent is shown from the entirety of the agreement.” Condon v. Condon, 177
Wn.2d 150, 163, 298 P.3d 86 (2013). We do not interpret what was intended to be
written but what was written. Hearst Commc’ns., 154 Wn.2d at 504.
The CMAs for Padden Parkway, East Vancouver, Columbia City, and Sheridan
Beach all required West Coast to “use its best efforts to cause the construction of
improvements to proceed and be completed in accordance with or in advance of the
Schedule.” This included (a) holding preconstruction and progress meetings with the
general contractor; (b) coordinating the work of and act as a liaison with the general
contractor and planning team; (c) requiring the general contractor to maintain sufficient
personnel at the construction site; (d) use its best efforts to guard against defects and
-16-
No. 86506-4-I/17
deficiencies and reject any work that does not meet quality control; e) oversee all
aspects of construction and require compliance by all consultants and contractors; (f)
supervise the preparation and implementation of a construction flow chart to ensure
timely completion of construction and to coordinate the delivery of goods, materials, and
services; (g) make recommendations to Catalyst regarding any liens or encumbrances;
and (h) upon completion of the improvements for a portion of the property, oversee the
maintenance of such improvements until all improvements are complete.
These CMAs also require, as part of the construction services, that West Coast:
cause construction of the improvements to proceed so that the
improvements are substantially completed and then finally completed (i)
within the Development Budget, (ii) in a good and workmanlike manner in
accordance with the plans and specifications and all legal requirements,
and (iii) in accordance with the schedule. Construction Manager shall not
permit the construction of the improvements to be abandoned or
permanently discontinued.
We agree with the Board, that these requirements make clear that West Coast
was responsible for performance of the construction. While West Coast did not itself
perform the construction, it was responsible to ensure a third party did. And while West
Coast was reviewing work for Catalyst, it was both supervising and directing the work.
RCW 82.04.051(4)(b).
The West Seattle CMA differs from the other CMAs in how it describes West
Coast’s services. In the opening recitals, the CMA states that “Owner acknowledges
and agrees that Owner’s Representative is not a licensed contractor, it will act only in
the capacity as an adviser to and representative of Owner, and nothing in this
Agreement makes Owner’s Representative responsible for the actual performance of
the construction of the Project.” While this supports West Coast’s argument that it was
-17-
No. 86506-4-I/18
not responsible for the actual performance of the construction, the definition of
responsible for performance includes not just actual performance, but performance
“personally or through a third party.” RCW 82.04.051(4)(b).
West Coast is correct that the language in paragraphs 3.1, 3.2, and 3.7 of the
West Seattle CMA differs by spelling out that West Coast is acting more in an advisory
role. But again, RCW 82.04.051(4)(b) states that “[a] person who reviews work for a
consumer, retailer, or wholesaler but does not supervise or direct the work is not
responsible for the performance of the work.” (Emphasis added.) Therefore, a person
that reviews work for a consumer, retailer, or wholesaler and does supervise or direct
the work, is the person responsible for the performance of the work. Even under the
revised language in the West Seattle CMA, West Coast is “supervising” and “directing”
the construction.
For example, section 3 of the West Coast CMA spells out the “Construction
Oversight and Advisory Services to be Performed by [West Coast].” (Emphasis added.)
Then paragraph 3.1 states that the owner is engaging and authorizing West Coast to
“provide the oversight and advisory services” described in sections 3, 4, and 5. While
the term “supervising” is not defined in RCW 82.04.051, the dictionary definition of
“supervise” is “to be in charge of: superintend, oversee.” MERRIAM-WEBSTER ONLINE
DICTIONARY, https://www.merriam-webster.com/dictionary/supervise (last visited Aug.
13, 2025). Thus, under a plain reading of the CMA, West Coast was hired to supervise
the construction and meets the definition of “responsible for the performance.”
Similarly, paragraph 3.2 requires West Coast to “monitor” on behalf of the owner,
make progress reports to the owner, and “make necessary recommendations to cause
-18-
No. 86506-4-I/19
the General Contractor’s construction of the improvements to proceed and be
completed in accordance with or in advance of the Schedule.” (Emphasis added.) And
in paragraph 3.7, West Coast:
shall provide status report to the Owner and make recommendations to
cause the General Contractor’s construction of the improvements to
proceed so that the improvements are substantially completed and
then finally completed (i) within the Development Budget, (ii) in a good
and workmanlike manner in accordance with the Plans and
Specifications and all legal requirements, and (iii) in accordance with
‘the Schedule. Construction Manager shall not permit the construction
of the improvements to be abandoned or permanently discontinued by
the General Contractor. Construction Manager shall promptly give
notice to the Owner of the completion of the improvements.
(Emphasis added.)
The plain words of the contract make clear, that despite the change in language
from previous CMAs, West Coast was still required to both supervise and direct the
construction work for the West Seattle project and is therefore responsible for the
performance of the work under RCW 82.04.051(4)(b).
3
Finally, under RCW 82.04.051(2), where there is an activity and a person that is
responsible for both non-retail service and construction activities taxable under chapter
82.04 RCW, the activity is subject to the tax that applies to the predominant activity. We
agree with the Board that the predominant activity contemplated between the
Development Agreements and CMAs is construction. West Coast entered into the
Development Agreements to develop properties for construction of self-storage
-19-
No. 86506-4-I/20
facilities. 12 West Coast’s compensation under the Development Agreements was to be
paid upon the receipt of a building permit and final construction approval. West Coast
then entered into the CMAs in order to manage construction of the self-storage facilities
on the properties developed under the Development Agreements. Thus, the
predominant purpose of both the Development Agreements and CMAs was the
construction of self-storage facilities.
As a result, we agree with the Board that West Coast was responsible for
“services rendered in respect to” construction. RCW 82.04.051. We affirm the
assessment.
WE CONCUR:
12 For example, section 1 of the Padden Parkway Development Agreement sets out the
development services that West Coast is to provide. These include site identification, site evaluation,
purchase and sale agreement, entitlements and design, obtaining a building permit for construction,
preparation of the construction contract, and presentation for final construction approval.
-20-