Archive for the ‘Civil Procedure’ Category

Court of Appeals: Div. III – Doctor’s Claims Against Hospital and Staff Very Costly

June 3, 2010

Perry v. Rado

Dr. Perry is a gynecologist who practices medicine through his professional services corporation in Kennewick, Washington. In the fall of 2006, he was a member of the medical staff at Kadlec Medical Center (KMC) until his staff membership and clinical privileges were terminated. I bet it’s difficult to practice obstetrics and gynecology when the hospital won’t let you through the front door. So Dr. Perry sued the hospital and several staff members including Drs. Rado, Bowers, Rawlins, and Occhino who all participated in Dr. Perry’s peer review that resulted in his termination. Drs. Rawlins and Occhino also are members of an OB/GYN practice that competes with Dr. Perry’s office. I guess that’s one way to eliminate the competition.

Apparently, Dr. Perry had a problem with one of his surgeries and he was suspended. Perry entered into an agreement with KMC that he would not conduct certain types of surgeries without a “monitor” to assist him. He violated that agreement and after a hearing (which resulted in a finding in his favor) and an administrative appeal, his privileges were permanently suspended. Dr. Perry then filed a suit in federal court where all but his state claims were dismissed. So Dr. Perry filed suit in superior court alleging seven claims. Most of the claims were dismissed under CR 12(b)(6) except for one and Dr. Perry voluntarily dismissed that one. The trial court awarded KMC over $380,000 in fees and costs. OUCH!! Dr. Perry appealed the dismissals under CR 12(b)(6).

RCW 7.71.030(1) states: “This section shall provide the exclusive remedy for any action taken by a professional peer review body of health care providers …, that is found to be based on matters not related to the competence or professional conduct of a health care provider.” Further, Section (2) states “[a]ctions shall be limited to appropriate injunctive relief, and damages shall be allowed only for lost earnings directly attributable to the action taken by the professional review body.” The claims that Dr. Perry was pursing were not related to the competence or professional conduct of a health care provider so his only remedy was injunctive relief. Dr. Perry was not seeking injunctive relief; he was seeking damages other than for wage loss. The trial court had permitted Dr. Perry to amend his complaint to seek reinstatement of his medical privileges. This would have been injunctive relief. But Dr. Perry did not amend his complaint. Whoops! Affirmed.

Crazy Doctor

And to pour more salt in the wounds, RCW 7.71.030 requires an award of reasonable attorney fees and costs to the “prevailing party.” Guess who the “prevailing party” was? Not Dr. Perry. DOUBLE OUCH!! He must have paid close to a total of $1 million in attorney fees and costs when this was all done. After this experience, he may want to take up proctology.

Court of Appeals: Div. I: Purposeful Availment Still the Standard for Personal Jurisdiction

May 5, 2010

Freestone Capital Partners, LP v. MKA Real Estate Opportunity Fund, I, LLC

This case arose out of a declaratory judgment action brought by a group of lenders in Washington to enforce remedies arising out of the $30 million dollar delinquency of a group of California borrowers.

The issues in this appeal involved: 1. Whether a Washington court had personal jurisdiction over the California borrowers, 2. What state’s law governed the dispute, and 3. Whether the parties were entitled to attorneys fees and costs.

The Court of Appeals determined that because MKA had purposefully availed itself of the privileges of transacting business in the State of Washington, Washington courts had personal jurisdiction over MKA.

The Court of Appeals held that there was not a sufficient record to determine whether there was an actual conflict between Washington and California law and remanded the case to the trial court to make this determination

The Court of Appeals determined that the trial court did not err in awarding some attorney fees to Freestone, but left to the trial court the determination of what additional fees might be appropriate on remand.

Court of Appeals: Div I: Evicting a Tenant Can Be Tough, Make Sure You Jump Through All the Hoops

April 29, 2010

Housing Authority of Everett v. Kirby

Carroll Kirby failed to pay rent one month. The Housing Authority tried to evict him. They failed to state in the summons and complaint that he could answer by facsimile or mailing. He moved the court to have the case dismissed on that ground. He also asked for attorney fees. The court commissioner determined that the summons and complaint were invalid, but declined to award attorney fees because the court believed it lacked authority to do so once the case was dismissed. The Court of Appeals held affirmed, except that it held that Mr. Kirby was entitled to statutory attorney fees in the amount of $200.

Court of Appeals: Div. III – “Better Late Than Never” Does Not Apply to Default Order

February 27, 2010

 

Brooks v. University City, Inc.

Brooks worked  for ICT Group and slipped and fell on a patch oil in their parking lot.  The parking lot was leased from University City, Inc.  Brooks sued both ICT and UCI for negligence for failing to properly maintain the parking lot.

On May 3, 2006, Ms. Brooks served ICT with a summons and complaint. ICT did not respond. On July 26, 2006, Ms. Brooks moved for an order of default. On August 10, 2006, the court entered an order of default against ICT. And Ms. Brooks mailed a copy of the order to ICT. On April 17, 2007, Ms. Brooks settled with and dismissed her claims against University City. She then moved for a default judgment against ICT. On November 9, 2007, the trial court entered default judgment against ICT for $313,000 and costs. Around November 17, 2008, Ms. Brooks mailed a copy of the judgment to ICT.  Imagine the sinking feeling in someone’s stomach when they received a $313,000 judgment in the mail.  Whoops!

Bad News

On December 12, 2008, ICT appeared and moved to vacate the default order and judgment. It argued that the default order should be vacated because (1) it did not owe a duty to Ms. Brooks; and (2) it did not appear earlier only because its registered agent mistakenly forwarded the summons and default order to the wrong ICT employee. The trial court refused to vacate the default order because it determined that ICT’s untimely appearance was inexcusable and prejudicial to Ms. Brooks.

The court also denied ICT’s motion to vacate the default judgment. It reasoned that ICT was not entitled to notice of the default judgment because it was in default. And it concluded that ICT’s failure to timely act on the summons and complaint was not an extraordinary circumstance justifying relief from judgment.  Now you want to argue?!  Where were you a year ago?

On appeal, ICT argues that pursuant to CR 55(f)(1), Brooks was required to give them notice of entry of the default judgment because more than one year had passed since service of the summons.

CR 55(f)(1) does provide:

When more than 1 year has elapsed after service of summons with no appearance being made, the court shall not . . . enter a judgment until a notice of the time and place of the application for . . . judgment is served on the party in default, not less than 10 days prior to the entry.

Under the plain language of the rule, the default judgment must be vacated.  However, ICT also argued that the default order should also be set aside as there was excusable neglect: their registered agent just sat on the summons and complaint for a year and didn’t forward it to the legal department.  Yeah, not feeling the “excusable” part here.

Division III agreed with the trial court, that this was not excusable neglect and refused to invade the court’s sound discretion.  So the order of default was not reversed.  So Brooks has a default order, but no judgment.  I was trying to think this through as to the next procedural step.  I guess if you have a default order, but no judgment AND the opposing party is now present, you could just present for judgment and the only thing the opposing party could argue is the amount of damages.  Long way to get there, but I guess it’s better than fighting with some insurance company who is probably going to say your slip and fall in the oil in the parking lot is your own fault.  It’s like punching the face of the tied up bully.  I like!

Duct Tape

Court of Appeals: Div. I – Service of Process on Foreign Corporation Should be Done by Personal Service

February 23, 2010

Ralph’s Concrete Pumping v. Concord Concrete Pumps

Ralph’s Concrete Pumping (Ralph’s) is a Washington corporation.  Concord Concrete Pumps (Concrete) is a British Columbia, Canada corporation.

Ralph’s sued Concrete for breach of contract.  Ralph’s served Concord in Canada by mail.  Concord acknowledged receipt of the summons and complaint by signing a delivery receipt.  Concord did not appear or answer the summons and complaint.  Ralph’s got a default judgment against Concrete for $175,000. 

Concord then made a special appearance, moving to vacate the default judgment.  The motion to vacate was denied and Concord appealed.

The Court of Appeals determined that since the long arm statute, RCW 4.28.150, provided for personal service, and because Ralph’s failed to file an affidavit that established that service could not be made within the State of Washington, the court did not have personal jurisdiction over Concrete.  The Court of Appeals held that the default judgment was void.

The Court of Appeals declined to award attorney fees because the statute did not provide them unless service of process was accomplished by personal service.

Court of Appeals: Div. II – County’s exaction necesitates participation in private lawsuit under CR 19

February 18, 2010

Graziano v. Woodfield Neighborhood Homeowners Assoc.

Mr. Graziano bought a lot within the Woodfield Estates Subdivision at a tax foreclosure sale.  The neighborhood association blocked his permit application on the grounds that his lot is restricted to recreational and park use.  He sued and lost on summary judgment.  The court of appeals reversed and remanded because neither party joined a necessary party under CR 19, namely Pierce County.

Although this case is a fairly straightforward application of basic civil procedure, the reasoning has some implications that merit discussion.  The court reasoned that Pierce County had an interest in “requiring that Woodfield provide recreational opportunities for the new subdivision’s families on site,” and as such Mr. Graziano’s plea for quiet title could not be resolved without the county.  The County’s interest began when it demanded, as a condition for plat approval, the dedication of a certain amount of space in the neighborhood for recreation and park facilities.  When a County does this, it’s called an exaction: where a condition for development is imposed on a parcel of land that requires part of the land to be dedicated to public use.

It is unclear at this point how wide reaching this holding may be.  Possibly, it will be exceedingly rare because most people probably don’t go around buying deed restricted property in tax foreclosure sales.  On the other hand, it’s possible that this sort of thing happens all of the time.  Further, considering how many deed restrictions stem from public regulation, it is possible that Counties will have to be involved in a significantly larger number of lawsuits dealing with homeowners and homeowners’ associations.

Court of Appeals: Div. I – Washington Courts Don’t Have Jurisdiction Over a Dispute Between Two Foreign Corporations

February 16, 2010

SeaHavn v. Glitnir Bank

SeaHavn was a company based in the British Virgin Islands.  Glitnir Bank is a bank based in Iceland.  They negotiated a loan to buy fishing vessels from a Greek company.  They signed parts of an agreement in Seattle, Washington.  The deal fell apart and SeaHavn sued Glitnir Bank in the King County Superior Court.  Other than signing the deal in Washington, Glitnir Bank had virtually no connection to the State of Washington.

The Court of Appeals held that because Glitnir Bank had minimal contacts with the State of Washington, it could not have reasonably foreseen that it would be hailed into court in the State of Washington.  Glitnir Bank had not purposefully availed itself to the benefits of the laws of State of Washington.  As such, the Washington long arm statute, RCW 4.28.185, when read to incorporate the requirements of the Due Process clause as set for in the United States Supreme Court case of Burger King Corp. v. Rudzewicz (and others), gave the courts of Washington personal jurisdiction over Glitnir Bank.

Court of Appeals: Div. III – First High Court Analysis of Venue Statute for Personal Injury Cases

February 13, 2010

 

Moore v. Flateau

This case is purely a venue question: where is the action proper; King County or Yakima County? There is a good analysis of RCW 4.12.020 in this case, which statute was changed in 2001. Previously this statute allowed plaintiffs in “motor vehicle accidents” to bring suit in the county where the accident happened or in the county where the defendant resided. The Legislature changed the statute to expand it to all types of injuries and not just those that arise out of motor vehicle accidents. Flateau v. Moore:

In 2004, Flateau contracted to sell his motorcycle modification business to Moore. Two documents outlined the agreement. The first sold the business while the second provided that Flateau would work for Moore. Neither document provided a venue provision, although the sales contract provided that disputes be resolved in Seattle via arbitration. All notices in the contracts provided they be sent to Moore in Yakima and Flateau in Redmond.

In February 2008, Moore sent notice to Flateau at a Bothell address that he was terminating the contracts. Flateau responded demanding that Moore stop breaching the contract. Two days later Moore filed suit in Yakima County for breach of contract and a “tort of promissory estoppel,” however the complaint was not immediately served on Flateau. Flateau then filed suit in King County against Moore for breach of the two contracts. Moore then notified Flateau that he had already filed suit in Yakima County and he moved to dismiss the King County action. The King County Superior Court dismissed the action for lack of jurisdiction because the Yakima County action had been filed first. However, on reconsideration, King County vacated the dismissal upon the parties’ stipulation that either county would be appropriate to resolve the disputes depending on the outcome of a pending motion to change venue in Yakima County.

Yakima County then denied Flateau’s motion to change venue, finding that it was unclear where Mr. Flateau lived. The Yakima court also found that at least a portion of the claim arose in Yakima County because it involved damage to personal property. Discretionary review was granted by the Court of Appeals.

Flateau’s argument was that the alleged damages of the suit were economic in nature and thus he is entitled to be sued in his home county under the general venue statute.

RCW 4.12.030 provides grounds for which a court may change venue. Subsection (1) provides that venue may be changed when the complaint is not brought in the proper county. The succeeding subsections provide for change of venue in other circumstances such as the convenience of the witnesses, the ends of justice, and judicial disqualification. RCW 4.12.030(2), (3), (4).

The Court of Appeals determined that Sections 2 thru 4 of RCW 4.12.030 allowed a court to make a discretionary decision, thus an abuse of discretion review, but that Section 1 was a legal question that is reviewed de novo. RCW 4.12.025 provides that venue is proper where the defendant resides or any one defendant resides and provides for corporation venue as well. RCW 4.12.020 provides that actions involving damages “for injuries to the person or for injury to personal property” shall be brought were the action arose, but gives the plaintiff the option of bringing the action in the county where the defendant resides at the time of the commencement of the action. The quoted language is new as of 2001 and has not been defined by any court.

Moore contended that since he worked in Yakima County and there was damage to his “personal property” (his business), that Yakima County was the proper venue. So this came down to what is “personal property.” Black’s Law Dictionary defines it as “[a]ny movable or intangible thing that is subject to ownership and not classified as real property.” Without any guidance from the Legislature (imagine that), the Court turned to the underlying facts in the case. Since this was a breach of contract claim and thus about economic damages, the court concluded that this case was not about “injury to personal property.” Thus Yakima County was not a proper venue. So all of this work just to determine which court will hear the dispute. Is King County Superior Court that much better than Yakima County Superior Court? No comment. You never know when you might wind up there!

Yakima            King County

WA Legal Roundup: Division II

January 4, 2010

Phelps v. Southwest WA Med Ctr et al.

Phelps slipped in the parking lot where she worked.  She did not remember the cause of her fall and there were no witnesses.  Other witnesses stated that the parking lot was icy that morning and another coworker almost fell.  Phelps’ husband returned to the scene later in the afternoon and found a puddle of water (14 inches) near the rear of her vehicle. She sued the clinic owner, employer, and property manager for her injuries.  They hired an accident reconstructionist to opine that the cause of the fall was ice.  The Trial Court excluded Phelps’ expert’s opinions and  granted summary judgment in favor of the defendants for failure of plaintiff to show causation.  Phelps appealed. 

The Appeals Court found sufficient evidence to take the question of breach of duty to a jury wherein they noted that in the deposition of the executive director of the clinic he admitted to contacting the maintenance to assure that de-icing was being done due to the freezing weather conditions.  The court stated that this was constructive notice to surpass a summary judgment motion.

Next, the court looked at the issue of causation.  After it noted causation can only be determined as a matter of law if the appeals court found that reasonable minds would only reach one conclusion, the court held that, here, Phelps presented sufficient evidence would allow a reasonable inference to be drawn that she fell on ice.  The court noted in particular that Phelps did not just rely on her testimony, which includes substantial memory loss, but also of medical evidence consistent with a fall, evidence that temperatures would have created ice, and other witness testimony that the parking lot was slick.  Based on the above arguments the court found that the trial court erred in granting summary judgment in favor of the defendants. 

The appeals court reviewed the trial court’s decision to exclude the accident reconstructionist because his opinion was speculation where no evidence supported it.  The court again disagreed with the trial court holding that the expert’s opinions draw reasonable inferences supported by the evidence in the record.  Moreover, the court stated that while there is room to challenge the expert’s opinions that is better done in cross examination. 

Reversed and remanded.

WA Legal Roundup: Division II

October 23, 2009

 

Dill v. Michelson Realty Co. et al

The Dill’s brought an action against the defendants under the Residential Landlord- Tenant Act.  The Dill’s leased property and a storage area from the defendants and claim that they destroyed and disposed of some of their property in the storage area. 

The case was moved to mandatory arbitration and the Dill’s agreed to waive any amount over $50,000.00.  The arbitrator found in their favor awarding them $45,000.00 and a separate attorney’s fee award of $27K.  The Defendants moved for entry of judgment on the arb award but with a modification to include all fees, costs and award to be a total of $50,000.00.  The Dills argued that the $50,000.00 limit was exclusive of fees, interests, and costs. The trial court entered judgment with no modification. 

The defendants appeal the trial court’s judgment confirming the arbitration award arguing that because the award was higher than $50,000.00 it was erroneous as a matter of law. The Dills argue that the trial court’s entering of judgment is not appealable.

The Appeals Court agrees with the Dills.  They hold that the trial court’s entering of judgment is not appealable.  They state that the purpose of mandatory arbitration is to alleviate the court congestions.  Moreover, they found that there is a means to appealing the arbitration through trial de novo, which was not properly requested.

The Appeals Court dismissed the appeal and award the Dill’s fees.


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