Opinion
Nos. 27029-7-III; 27030-1-III; 27069-6-III; 27070-0-III.
April 14, 2009.
Appeals from judgments of the Superior Court for Okanogan County, Nos. 07-2-00321-7 and 07-2-00150-8, Jack Burchard, J., entered April 11, 2008.
Affirmed by unpublished opinion per Korsmo, J., concurred in by Schultheis, C.J., and Sweeney, J.
UNPUBLISHED OPINION
This is the second of two linked appeals arising from numerous trial court filings related to the sale of a ranch in Okanogan County. The original would-be purchaser under a real estate purchase contract was out-bid during probate proceedings by another purchaser who was allegedly solicited by the seller. On a motion for revision, the superior court confirmed the rulings of the probate court. Those rulings are the subject of the other appeal. After the probate court issued its rulings, appellant Alicia Elliott began several independent actions in the Okanogan Superior Court alleging breach of contract, and tortious interference with a contract. The trial court dismissed the actions and imposed sanctions against her attorneys. Ms. Elliott and her counsel appeal. Our decision in the other appeal resolves most of the issues presented here. On the remaining issues, the trial court did not abuse its considerable discretion in this matter. We affirm.
The other matter is In re Estate of Harder v. Elliott, No. 26401-7-III.
BACKGROUND
The factual background of the initial action is set forth in the other appeal and will only be summarized here. Ms. Elliott entered into a real estate purchase and sale agreement (REPSA) with Thomas Harder, guardian of Dr. James Harder who owned the ranch at the heart of the litigation. Dr. Harder died while the sale was pending and the matter was transferred to probate court. Extensions of the closing date were negotiated and the REPSA was ratified by each of Dr. Harder's heirs. When the matter finally came before the probate court for approval of the sale, a higher bid was received from Jay Hanseth on behalf of JMH-2 Investments, LLC (JMH2). The probate court, backed by the superior court on a motion for revision, directed that the property be sold to JMH2. Ms. Elliott contended that the heirs had sold her the property by ratifying the original agreement. She then appealed those rulings.
In the other appeal, we affirmed the trial court decision to sell to JMH2.
While those matters were unfolding, Ms. Elliott was busy on other fronts. Prior to the probate hearing of May 1, 2007, she filed an action on April 19 to compel the estate and JMH2 to specifically perform the REPSA, alleging that there had been a breach of contract and intentional interference with her contract rights. She did not, however, immediately serve that action. After the probate court's written orders reference the sale were entered, Ms. Elliott on June 15, 2007, served the summons and complaint requesting specific performance.
Clerk's Papers (CP) 639-643, 856-858.
CP 856-858, 894.
On July 2, 2007, Ms. Elliott filed a second suit against Mr. Harder in his capacity as personal representative, alleging that he had wrongfully rejected her creditor's claim.
In December she filed for summary judgment in both actions. The motions were continued and discovery ensued. The trial court denied Ms. Elliott's motions on January 24, 2008 and granted competing motions from the defendants, dismissing the actions. In particular, the court reiterated the determinations of the probate action and also found that Ms. Elliott's actions were foreclosed by collateral estoppel and res judicata. The court also ruled that Ms. Elliott was not entitled to specific performance of the REPSA, her remedy was limited to the return of the earnest money, and there was no evidence of fraud. The court also awarded attorney fees pursuant to CR 11, RCW 4.84.150, RCW 11.96A.150, and its inherent authority. After the parties reached agreement, the attorney fees were assessed against Ms. Elliott's counsel instead of against their client.
CP 38-51.
Ms. Elliott and her attorneys appealed. The estate and JMH2 sought to dismiss Ms. Elliott's actions for lack of standing. A commissioner of this court denied the motions to dismiss. The later appeals were consolidated with each other, but were only linked to the original probate appeal.
ANALYSIS
Ms. Elliott's appeal is controlled by the outcome of the linked appeal. We thus, somewhat summarily, address her arguments in that context. The decision to impose sanctions for frivolous litigation is a matter within the discretion of the trial court. We do not find abuse of discretion in the sanction rulings.
Several well-settled principles govern this case. Ms. Elliott's appeal comes to us from orders granting summary judgment to the defendants. We review a summary judgment de novo; our inquiry is the same as the trial court. Lybbert v. Grant County, 141 Wn.2d 29, 34, 1 P.3d 1124 (2000). We view the facts, and all reasonable inferences to be drawn from them, in the light most favorable to the nonmoving party. Id. If there is no genuine issue of material fact, summary judgment will be granted if the moving party is entitled to judgment as a matter of law. Id.; Trimble v. Wash. State Univ., 140 Wn.2d 88, 93, 993 P.2d 259 (2000).
A trial judge has discretion under CR 11 both to impose sanctions and the amount of any sanction that is imposed. Skimming v. Boxer, 119 Wn. App. 748, 754, 82 P.3d 707, review denied, 152 Wn.2d 1016 (2004). Likewise, the trial court has discretion under RCW 4.84.185 both to impose sanctions for frivolous litigation and to determine the amount of reasonable attorney fees. Fluke Capital Mgmt. Servs. Co. v. Richmond, 106 Wn.2d 614, 625, 724 P.2d 356 (1986); Zink v. City of Mesa, 137 Wn. App. 271, 277, 152 P.3d 1044 (2007), review denied, 162 Wn.2d 1014 (2008). The rule is similar under RCW 11.96A.150, which states that a trial court "may, in its discretion, order costs, including reasonable attorneys' fees, to be awarded to any party . . . from any party." Awards under this statute are reviewed for manifest abuse of discretion. In re Estate of Black, 116 Wn. App. 476, 489, 66 P.3d 670 (2003), aff'd, 153 Wn.2d 152, 102 P.3d 796 (2004).
Discretion is abused when it is exercised on untenable grounds or for untenable reasons. State ex rel. Carroll v. Junker, 79 Wn.2d 12, 26, 482 P.2d 775 (1971).
The final governing principle is found in the law governing multiple actions between parties. The doctrine of res judicata, also known as claim preclusion, applies to related lawsuits between parties. In general, a final ruling involving the same cause of action between the same parties will govern subsequent cases involving the same action. Hadley v. Cowan, 60 Wn. App. 433, 440-441, 804 P.2d 1271 (1991). See generally, Philip A. Trautman, Claim and Issue Preclusion in Civil Litigation in Washington, 60 Wash. L. Rev. 805 (1985).
With these various principles in mind, we turn to the arguments raised by these consolidated appeals.
Ms. Elliott's Appeal.
Ms. Elliott raises numerous claims based on her theory that she had an enforceable contract to purchase the ranch once the Harder heirs ratified the REPSA and, thus, no court approval was necessary. Unfortunately for her, we rejected that theory in the probate appeal. Her attempts to reargue that claim here fail.
To her credit, Ms. Elliott did attempt to consolidate all of the cases so that her overarching theme could be considered in one appeal.
There are four criteria that must be found in order to apply the doctrine of res judicata. There must be: (1) the same subject matter, (2) the same cause of action, (3) the same persons and parties, and (4) the quality of the parties. Hadley, 60 Wn. App. at 441; Trautman, supra, at 812.
Those criteria are satisfied here. The subject matter of all of these actions is the sale of the Harder ranch. The various actions all involve the same theory of enforcing the original REPSA, even if under different theories of relief, so the same cause of action is involved. Compare Hadley, 60 Wn. App. at 441-443 (tort claims of undue influence and interference with inheritance constituted same cause of action as a will contest settled by probate court). The parties are the same — the Harder estate, Ms. Elliott, and JMH2. While all the parties have taken inconsistent positions on that issue — arguing that Ms. Elliott was or was not a party for res judicata purposes, but claiming the opposite on standing to appeal — we have no trouble concluding they are all parties for this purpose. E.g., In re Estate of Jaussaud, 71 Wn.2d 87, 91, 426 P.2d 602 (1967) (settlement in probate partition action brought by appellant was bar to his later attempt to correct decree; parties to partition action were same as parties to correction action). The final criterion, the "quality" of the parties, is explained by Professor Trautman as involving the roles that a party had in the two actions. For instance, someone who took part in an earlier action as a guardian for a minor, but sued on his own behalf in a second action, was not the same "quality" in both cases. Trautman, supra, at 821. In other words, while technically the same people were involved, they were not acting as parties in each action. Thus, that factor also is satisfied here. The parties to the probate sale were acting in the same "quality" in these actions.
The criteria for applying res judicata are met here. Accordingly, our determination that the probate court properly directed the sale to JMH2 rather than Ms. Elliott and that the REPSA did not bear Ms. Elliott's interpretation of it, apply here as well. Those decisions foreclose most of her specific arguments in this action. There could be no breach of contract because the contract was lawfully upset under the probate bidding statute, RCW 11.56.110. Likewise, there was no error in rejecting the creditor's claim because there was no basis for the claim once the property was ordered sold to JMH2. There was no tortious interference with a contract by JMH2 for simply following the statutory process for bidding on property. Because the sale to JMH2 was proper, Ms. Elliott simply had no creditor's claim against the estate or any theory for recovery of damages.
The only somewhat independent issue Ms. Elliott presents is a claim that the probate sale was the result of fraud perpetrated on the court. Fraud is the only way to attack a sale ordered by a probate court. RCW 11.56.115. She argues that the estate misrepresented the contract by telling the court that it had to approve the sale. The trial court rejected that argument, noting that the entire REPSA had been in front of it in the original proceedings and that the parties had argued the meaning of the disputed language. Nothing was concealed and the court was not misled. Report of Proceedings (RP) (Jan. 24, 2008) 68.
This argument, too, is based on the view that the REPSA did not require court approval after ratification by the heirs. The argument was rejected by the commissioner who conducted the probate hearing, the superior court judge who heard the revision motions, and now by this court.
A party must show by clear and convincing evidence the existence of nine elements in order to establish a claim of fraud:
(1) representation of an existing fact; (2) materiality; (3) falsity; (4) the speaker's knowledge of its falsity; (5) intent of the speaker that it should be acted upon by the plaintiff; (6) plaintiff's ignorance of its falsity; (7) plaintiff's reliance on the truth of the representation; (8) plaintiff's right to rely upon it; and (9) damages suffered by the plaintiff.
Stiley v. Block, 130 Wn.2d 486, 505, 925 P.2d 194 (1996).
The facts of this case fall far short of establishing fraud under this standard. Ms. Elliott was certainly never deceived or ignorant about the meaning of the disputed contract language. Rather, she argues that the standard for fraud in the probate sales contract is simply whether the parties made "false statements" that "deceived the court and induced it to make the order of sale and confirm the sale after it was made," citing to Calderhead v. Smith, 162 Wash. 406, 410, 298 P. 421 (1931). That case does not bear her interpretation. The quoted statements from that opinion are not a test for fraud. Rather, the Calderhead court found the fraud was so clearly established by the facts that it was not necessary to repeat them. The court also did not set forth the standard for determining fraud, but simply summarized what the parties had done to deceive the court. There is no alternative standard for proving fraud in a probate sale.
Elliott's Opening Brief at p. 28.
The trial court properly granted summary judgment on Ms. Elliott's claims. They are foreclosed by our decision in the probate appeal. To the extent that the fraud claim was not totally barred by res judicata, it went utterly unproven. Arguing contrary interpretations of contract language is not a fraud upon the court.
Sanctions Ruling.
The remaining issue is a claim by Ms. Elliott's counsel that the trial court erred by imposing sanctions for frivolous litigation. While perhaps reasonable jurists could differ on whether sanctions were merited, we cannot conclude that the trial court abused its discretion.
The standards governing this area were set forth previously. Under either CR 11 or the two noted statutes, a trial court has significant discretion in determining whether sanctions should be imposed and the amount of sanctions awarded. The question, then, is whether the trial court had a tenable basis for imposing sanctions.
In light of rule and statutory authority supporting the court's ruling, we do not address the inherent authority argument.
The trial court explained its rationale orally:
Looking at Civil Rule 11 — yeah. The — all the claims based on — all the major claims were filed without — or in violation of Civil Rule 11. There were no well grounded facts. No reasonable attorney could have filed either of these lawsuits. They fly directly in the face of the principles of (inaudible) preclusion. Very simple, basic law.
There is nothing new here almost whatsoever. There is no — the — the suits are not warranted by existing law or good faith argument for extension, modification or reversal of existing law. These suits were imposed for improper purposes, delay, increased discovery. I really can't read their minds, but there is nothing new here.
The factual contentions are not warranted. The allegations are not warranted. The Court had ruled on all these things previously. So basically the entire process has been unjustified by law.
RP (Jan. 24, 2008) 75-76.
In a letter issued prior to the written order awarding fees, the court noted that it had ruled on the revision motions in the probate case on June 15 and that counsel for Ms. Elliott had filed the current actions before that date, but had not served the Defendants or taken any further action on that case. When the Court made its decision on June 15, 2007, Plaintiff immediately began serving all Defendants with the complaint and summons in what can only be seen as an attempt to relitigate the claims and issues the court had decided.
Counsel had filed the complaint before the decision that removed every possible basis for its case. Nonetheless, CR 11 required counsel and Plaintiff to review and revised the previously filed and signed documents. Escude v. King Co. Public Hospital, 117 Wn. App. 183, 194, 69 P.3d 895 (2003) (Counsel decided to "press on," after there was nothing left of their case.) and Doe v. Spokane and Inland Empire Blood Bank, 55 Wn. App. 106, 114, 780 P.2d 853 (1989).
CP 80.
The trial court ably articulated the reason for sanctions — the first (probate) case had settled the matter because it answered the question whether the REPSA required court approval or not. That rationale settled the matter in the trial court and largely did so in this court. The trial court had tenable grounds for determining that the new actions were without merit as attempts to reargue a matter that was already settled.
The trial court did not abuse its discretion by ordering sanctions against counsel.
Attorney Fees on Appeal.
All parties seek attorney fees on appeal. Ms. Elliott is not a prevailing party and there is no basis for awarding fees to her. The respondents both request that fees be awarded but make minimal argument for them. More is required under our rules. RAP 18.1(b). This appeal, while without ultimate merit, was not frivolous and Ms. Elliott did attempt to join it with the probate appeal so that all matters could be resolved together. In light of those circumstances, and for the reasons explained in our opinion in the probate appeal, we decline to exercise our discretion to award additional attorney fees.
The judgment of the trial court is affirmed.
A majority of the panel has determined this opinion will not be printed in the Washington Appellate Reports, but it will be filed for public record pursuant to RCW 2.06.040.
SCHULTHEIS, C.J. and SWEENEY, J., concur.