Opinion
NO. CV-07-5054-EFS.
March 4, 2008
ORDER GRANTING AND DENYING IN PART DEFENDANTS' MOTION FOR PARTIAL SUMMARY JUDGMENT
Before the Court, without oral argument, is Defendants' Motion for Partial Summary Judgment on RCW 4.96 Defense. (Ct. Rec. 58.) Plaintiff opposes the motion in part, contending that its contract claims are not barred by RCW 4.96 et al. After reviewing the submitted material and relevant authority, the Court is fully informed and grants and denies in part Defendants' motion. The reasons for the Court's Order are set forth below.
A. Background
In ruling on a motion for summary judgment, the Court considered the facts, including the parties' Joint Statement of Uncontroverted Facts (Ct. Rec. 72), and all reasonable inferences therefrom in the light most favorable to Plaintiff, the party opposing the motion. See United States v. Diebold, Inc., 369 U.S. 654, 655 (1972) ( per curium). The following factual recitation was created utilizing this standard.
On February 2, 2007, Plaintiff's counsel Robert Dunn wrote a "demand letter" to the City of Kennewick ("the City"), which included a copy of the to-be-filed complaint. (Ct. Rec. 46 ¶ 55; Ct. Rec. 63 ¶ 1.) City attorney John Ziobro drafted an internal memorandum and circulated it on February 6, 2007, to the City Manager, the City Council, and the Mayor. The internal memorandum detailed, inter alia, that CPGC's contract claims were not subject to the notice requirements of RCW 4.96 et seq. (Ct. Rec. 63 ¶ 2.) On February 12, 2007, CPGC filed its RCW 4.96 Notice of Tort Claims by mailing it to the City's post office box. (Ct. Rec. 46 ¶ 57; Ct. Rec. 63 ¶ 3.) Also, on February 12, 2007, CPGC filed this lawsuit alleging, among other theories, contract claims and tort claims.
B. Authority and Analysis
Defendants argue CPGC's contract and tort claims are barred by its failure to timely file a notice of claim as required by RCW 4.96 et al. CPGC agrees its tort claims are barred because of its failure to provide notice to the City at least sixty days before filing this action. Given CPGC's concession, the Court grants Defendants' motion in part and dismisses CPGC's tort claims. CPGC maintains, however, that RCW 4.96 et al. does not apply to contract claims and therefore it may pursue its contract claims.
The two statutes at issue are RCW 4.96.010 and 4.96.020. These statutes have been amended since their initial enactment in 1967, and Washington courts have been asked to analyze these sections on a number of occasions. Unfortunately, the Washington Supreme Court has not resolved, under the current version of the statutes, the question of whether a notice of contract claim must be presented to the local governmental entity in advance of a lawsuit.
The Court must interpret a statute to give effect to the Washington Legislature's intent. See Stewart Carpet Serv. v. Contractors Bonding Ins. Co., 105 Wn. 2d 353, 358 (1986). In doing so, the Court is to look at the statute's subject matter and language, as well as the constructions placed on the statute by the Washington courts. Id.; Pac. Sound Res. v. Burlington N. Santa Fe Ry., 130 Wn. App. 926, 935 (2005). The statute is to be given a "rational interpretation founded upon its design." Murphy v. Campbell Investment Co., 79 Wn.2d 417, 421 (1971) (quoting Discargar v. City of Seattle, 25 Wn.2d 306, 311-12 (1946)).
1. Legislative enactments
The 1967 versions of RCW 4.96.010 and 4.96.020 apply only to claims for "damages arising out of tortious conduct" because this phrase was used repeatedly and general "damages" language was not used. Both sections were amended in 1993. The 1993 amendment to RCW 4.96.010(1) is the current version and reads in pertinent part:
All local governmental entities, whether acting in a governmental or proprietary capacity, shall be liable for damages arising out of their tortious conduct, or the tortious conduct of their past or present officers, employees, or volunteers while performing or in good faith purporting to perform their official duties, to the same extent as if they were a private person or corporation. Filing a claim for damages within the time allowed by law shall be a condition precedent to the commencement of any action claiming damages. The laws specifying the content for such claims shall be liberally construed so that substantial compliance therewith will be deemed satisfactory.
RCW 4.96.010(1) (emphasis added). The statute's first sentence uses the phrase "damages arising out of their tortious conduct," while the second sentence uses the general phrase "claim for damages."
RCW 4.96.020 was also amended in 1993 by adding a sixty-day required tolling period and the following two subsections:
(1) The provisions of this section apply to claims for damages against all local governmental entities.
(2) All claims for damages against any such entity for damages shall be presented to and filed with the governing body thereof within the applicable period of limitations within which an action must be commenced.
Then, in 2001, the Legislature amended RCW 4.96.020 to require the appointment of an agent to receive claims. RCW 4.96.020 was amended again in 2006 to reflect that it applies to claims for damages against local governmental officers, employees, and volunteers, and that a failure of the local governmental entity to appoint an agent precludes the entity from raising a defense under RCW 4.96. Accordingly, the following is the current version of RCW 4.96.020:
(1) The provisions of this section apply to claims for damages against all local governmental entities and their officers, employees or volunteers, acting in such capacity.
(2) The governing body of each local governmental entity shall appoint an agent to receive any claim for damages made under this chapter. The identity of the agent and the address where he or she may be reached during the normal business hours of the local governmental entity are public records and shall be recorded with the auditor of the county in which the entity is located. All claims for damages against a local governmental entity, or against any local governmental entity's officers, employees, or volunteers, acting in such capacity, shall be presented to the agent within the applicable period of limitations within which an action must be commenced. The failure of a local governmental entity to comply with the requirements of this section precludes that local governmental entity from raising a defense under this chapter.
(3) All claims for damages arising out of tortious conduct must locate and describe the conduct and circumstances which brought about the injury or damage, describe the injury or damage, state the time and place the injury or damage occurred, state the names of all persons involved, if known, and shall contain the amount of damages claimed, together with a statement of the actual residence of the claimant at the time of presenting and filing the claim and for a period of six months immediately prior to the time the claim arose. If the claimant is incapacitated from verifying, presenting, and filing the claim in the time prescribed or if the claimant is a minor, or is a nonresident of the state absent therefrom during the time within which the claim is required to be filed, the claim may be verified, presented, and filed on behalf of the claimant by any relative, attorney, or agent representing the claimant.
(4) No action shall be commenced against any local governmental entity, or against any local governmental entity's officers, employees, or volunteers, acting in such capacity, for damages arising out of tortious conduct until sixty days have elapsed after the claim has first been presented to and filed with the governing body thereof. The applicable period of limitations within which an action must be commenced shall be tolled during the sixty-day period.
The captions for RCW 4.96.010 and 4.96.020 specifically refer to "tortious conduct," however "headings are generated by the code reviser and do not change the meaning of the law unless specifically adopted by the Legislature." Washington v. Cooley, 53 Wn. App. 163, 166 (1989); RCW 1.08.015.
RCW 4.96.020 (emphasis added). The first two subsections utilize the language "claims for damages," while the latter two subsections utilize the language "damages arising out of tortious conduct."
2. Case law
In 1993, the Washington Supreme Court analyzed the recently-enacted 1993 version and decided, "RCW 4.96.010 authorizes the filing of a claim for damages arising from tortious conduct as a condition precedent to bringing a suit, but not for other types of damages claims. . . ." Wilson v. City of Seattle, 122 Wn.2d 814, 822-23 (1993). The Washington Supreme Court specifically noted that the "1993 amendments do not affect our analysis in this case." Id. at 819 n. 1. RCW 4.96.010(1) has not been amended since 1993, and the amendments to RCW 4.96.020 since 1993 have not changed the "damages" language.
Notwithstanding the Wilson decision, the Washington Court of Appeals in 1994 in Harberd v. City of Kettle Falls determined that filing a notice of claim with the government entity is a condition precedent for both tort and contract claims — without citation to Wilson. 120 Wn. App. 498 (2004). Defendants maintain that Harberd can be reconciled with Wilson because the two cases analyzed different versions of the statute; this is incorrect as both cases analyzed the 1993 version of the statutes. Accordingly, there is a conflict between the holdings of these two cases.
3. Analysis
This Court is to apply Washington state law to resolve state law claims. Erie R.R. C. v. Tompkins, 304 U.S. 78, 79 (1938). When the Washington Supreme Court has spoken, this Court is to accept its pronouncement "unless [the Washington Supreme Court] has later given clear and persuasive indication that its pronouncement will be modified, limited, or restricted." West v. Am. Tel. Tel. Co., 311 U.S. 223, 236 (1940); see Air-Sea Forwarders v. Air Asia Co., 880 F.2d 176, 186 (9th Cir. 1989). When the Washington Supreme Court has not spoken, a Washington Court of Appeals' decision is "a datum for ascertaining state law which is not to be disregarded by a federal court unless it is convinced by other persuasive data that the highest court of the state would decide otherwise. West, 311 U.S. at 237.
Here, the Washington Supreme Court spoke in Wilson. Although it is arguable that the Legislature intended the 1993 amendments to create a notice-of-claim-filing condition precedent for all claims — both contract and tort as the Court of Appeals decided in Harberd —, the Supreme Court specifically noted in Wilson that the 1993 amendments did not alter its determination that a notice of claim was a condition precedent only for tort claims. Defendants argue, without citation to any authority, that the Washington Supreme Court's decision to deny review of Harberd indicates the Supreme Court agrees with the Harberd decision. The Court concludes that denial of review is not "clear and persuasive indication" that the Supreme Court will modify its William's holding. See West, 311 U.S. at 236.
Defendants also argue the Washington Supreme Court's failure to address Harberd in its subsequent cases analyzing RCW 4.96.010 and 4.96.020 reflects the Supreme Court's agreement with Harberd. This argument is tenuous at best given that the issues before the Washington Supreme Court in the cases following Harberd did not present any need to address Harberd or Wilson: Castro v. Stanwood School Distict, 151 Wn.2d 221 (2004) (addressing the sixty-day tolling period in a negligence action); Boesteder v. City of Renton, 155 Wn.2d 18 (2005) (involving nuisance, trespass, and 42 U.S.C. § 1983 civil rights claims); Troxell v. Rainier Public School District, 154 Wn.2d 345 (2005) (calculating sixty-day tolling period in a tort action). In fact, in one of the cases cited by the City, the Washington Supreme Court stated, "the Court of Appeals wrongly concluded that since petitioners' unfair labor practice claim sounded in tort, the claim was subject to former RCW 4.96.020. Unfair labor practice claims under chapter 41.56 RCW are not tort claims for damages and are thus not subject to the claims filing statute." Wright v. Terrell, ___ Wn.2d ___, 170 P.3d 570, 571-72 (2007). This statement indicates the Supreme Court will continue to abide by its decision in Wilson. See also Burnett v. Tacoma City Light, 124 Wn. App. 550, 558 n. 11 (2004) (citing to Wilson for the proposition that "RCW 4.96.010(1) authorizes claim filing ordinances only for damages arise out of tortious conduct of a local government entity").
Defendants also argue the Legislature is assumed to know the Harberd decision and therefore the Legislature's failure to clarify that RCW 4.96.010 and 4.96.020 only create a claims-filing condition precedent for tort claims indicates that the Legislature agrees with Harberd. The Legislature has not appeared to amend these statutes in response to Harberd; however, the Legislature is presumed to know about Wilson as well, which specifically ruled that presenting a claim is not a condition precedent to actions other than those seeking damages for tortious conduct. The Wilson decision is a Washington Supreme Court decision and therefore prevails over the conflicting Court of Appeals' Harberd decision.
In addition, based on this Court's interpretation of the statutes, the Court agrees with Wilson. In RCW 4.96.010, after specifically referring to "damages arising out of their tortious conduct, or the tortious conduct of their past or present officers . . .," the Legislature opted to use the shorter phrase "filing a claim for damages." This shorter phrase does not change the scope of RCW 4.96.010. Rather, the Legislature simply used a shorter phrase when specifying that the claim for damages caused by tortious conduct must be filed within the time for and prior to commencement of such action — this did not change the character of the conduct causing damage.
RCW 4.96.020 sets forth the procedural steps for filing the claim for damages as defined in RCW 4.96.010. RCW 4.96.020 does not by its use of the phrase "claims for damages" expand the scope of RCW 4.96.010. As used within RCW 4.96.020(1), the phrase "claims for damages" simply states that the "provisions of this section" applies to claims for damages which are explicity stated as "claims for damages arising out of tortious conduct" in subsections (3) and (4). There is nothing to indicate any claim filing time limits or procedures for any other type of damages — further evidence to this Court that the claim-filing procedures are for "damages arising out of tortious conduct." Also, nothing in RCW 4.96.020(2) changes that. Subsection (2) requires the appointment of an agent to accept such claims and the presentation of such claims to that agent with preclusive effects if the local government entity fails to do so. This legislative amendment alters nothing about the character of the damages as those "arising out of tortious conduct" as defined by RCW 4.96.010(1). Accordingly, the Court finds filing a notice of claim is not a condition precedent to a contract action.
Defendants did not contest CPGC's position that its claims of promissory estoppel, quantum meruit, and good faith and fair dealing are contract claims. Accordingly, Wilson requires this Court to conclude that CPGC's breach of contract, promissory estoppel, quantum meruit, and good faith and fair dealing claims are not barred by RCW 4.96 et seq. Therefore, Defendants' motion is denied in part.
CPGC's civil rights claim is not subject to the notice requirements of RCW 4.96 et seq. either. See Wright v. Terrell, 170 P.3d 570 (2007).
In its Reply, Defendants ask the Court to certify the question of whether filing a notice of claim is a condition precedent to filing contract claims if the Court finds this question is unresolved. RCW 2.60.020 provides:
when in the opinion of any federal court before whom a proceeding is pending, it is necessary to ascertain the local law of this state in order to dispose of such proceeding and the local law has not been clearly determined, such federal court may certify to the supreme court for answer the question of local law involved and the supreme court shall render its opinion in answer thereto.
(Emphasis added). In review of Wright and Burnett, this Court is firmly convinced Wilson remains the prevailing authority for the view that RCW 4.96 et al. applies only to tort claims and that there is no ambiguity which requires referral of this question to the Washington Supreme Court.
Accordingly, IT IS HEREBY ORDERED:
1. Defendants' Motion for Partial Summary Judgment on RCW 4.96 Defense (Ct. Rec. 58) is GRANTED (dismissal of CPGC's tort claims: intentional and fraudulent misrepresentation/bad faith, tortious interference with business expectancy, negligent misrepresentation, and negligence claims) and DENIED IN PART (contract claims).
IT IS SO ORDERED. The District Court Executive is directed to enter this Order and provide copies to counsel.