Opinion
No. 56492-7-I.
June 26, 2006.
Appeal from a judgment of the Superior Court for King County, No. 04-2-26347-6, Julie Spector, J., entered January 6, February 7, and June 2, 2005.
Counsel for Appellant(s), Glen Alan Prior, Pacific Law Inc PS, Trans Pacific Trade Ctr, 3700 Pacific Hwy E Ste 306, Fife, WA 98424-1162.
Counsel for Respondent(s), Gail Grant Stewart, Stewart Ragen PLLC, 800 5th Ave Ste 4100, Seattle, WA 98104-3100.
Affirmed in part, reversed in part, and remanded by unpublished opinion per Cox, J., concurred in by Schindler, A.C.J., and Ellington, J.
The primary issues on appeal are whether the trial court properly granted defendants' motion for summary judgment and imposed sanctions on plaintiffs. We hold that there are genuine issues of material fact that remain for trial. With one exception, sanctions were not proper. We affirm in part, reverse in part, and remand.
In October 2002, Gai and Eski entered into a consignment agreement in which Eski agreed to sell Gai's jewelry to his customers, Ken and Vanessa Chamberlin. Under the terms of the agreement, Eski agreed to sell the jewelry and pay Gai $50,000 within one week or to return the jewelry either within one week or upon demand.
After a week passed, Gai demanded payment or the return of her jewelry, but Eski refused. Gai called the Chamberlins, looking for her jewelry. After Gai spoke with the Chamberlins, they had the jewelry appraised. The appraisals valued the jewelry at 30 to 50 percent of what they paid. The Chamberlins eventually ended their business relationship with Eski. It is unclear from the record when that relationship ended.
In January 2003, Gai sued Eski. The parties settled the following month, which included a dismissal of the lawsuit.
In October 2004, Eski sued Gai alleging tortious interference with his business relationship with the Chamberlins. Gai moved for summary judgment. Eski moved to continue the summary judgment hearing, and the trial court denied the motion. Gai moved to strike Eski's declarations and exhibits in support of his opposition to summary judgment. The court ordered them stricken and ruled them inadmissible. The court granted summary judgment and imposed sanctions against Eski, finding his lawsuit frivolous.
Eski appeals.
SUMMARY JUDGMENT
Eski argues that the trial court erred in granting Gai's motion for summary judgment. We agree.
A motion for summary judgment may be granted when 'there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law.' A material fact is one on which the outcome of the litigation depends. A summary judgment motion must be supported by affidavits and set forth facts that would be admissible in evidence. We review a summary judgment order de novo, viewing the facts and reasonable inferences in the light most favorable to the nonmoving party. We review de novo a trial court's evidentiary rulings made in conjunction with a summary judgment motion.
Owen v. Burlington N. Santa Fe R.R., 153 Wn.2d 780, 789, 108 P.3d 1220 (2005).
Khung Thi Lam v. Global Med. Sys., 127 Wn. App. 657, 661 n. 4, 111 P.3d 1258 (2005).
Folsom v. Burger King, 135 Wn.2d 658, 663, 958 P.2d 301 (1998).
Motion to Strike
Eski argues that the trial court erred in striking his declarations and exhibits submitted in response to Gai's summary judgment motion. We disagree.
Eski submitted two declarations (by Eski and by his attorney, Glen Prior), with exhibits, in support of his opposition to the motion for summary judgment. Gai moved to strike Eski's declarations on the ground that they failed to meet the requirements of CR 56(e), did not state the place they were signed as required by RCW 9A.72.085, and contained hearsay. The trial court ordered the declarations and exhibits stricken for failure to meet the requirements of CR 56, RCW 9A.72.085, ER 802, and ER 1002. Here, Eski fails to articulate why the stricken declarations and exhibits are admissible, as required by CR 56(e). We will not review an issue raised in passing or unsupported by authority or persuasive argument. We note that the trial court did consider Eski's supplemental declaration and Prior's supplemental declaration with Prior's exhibits. Thus, it is hard to see how there was any prejudice in excluding the original declarations.
See State v. Johnson, 119 Wn.2d 167, 170-71, 829 P.2d 1082 (1992).
Moving to the substance of the motion, the trial court did not specify which ground or grounds supported its ruling. Thus, we examine each of the arguments Gai offered in support of her motion: (1) preclusion by the terms of the settlement and release agreement; (2) res judicata; and (3) lack of causation.
Settlement and Release Agreement
Settlements are strongly favored and are encouraged. A release in a settlement agreement 'generally extends to all matters within the parties' contemplation at the time it is executed.'
Chadwick v. Northwest Airlines, Inc., 33 Wn. App. 297, 300, 654 P.2d 1215 (1982).
Id. at 302.
In February 2003, Gai and Eski entered into a settlement and release agreement that included a dismissal of Gai's prior action against Eski for conversion, fraud, and breach of contract. The release, in pertinent part, states:
Lorraine Gai and Imran Eski . . . release the other . . . from any liability for matters alleged in the Lawsuit or which could have been alleged in the Lawsuit and from damages of any kind or nature, known or unknown arising out of the prejudgment writs of attachment and garnishment obtained by Lorraine Gai in connection with the Lawsuit.
(Emphasis added.)
Gai argues that at the time of settlement Eski could have raised his claims for tortious interference and the failure to do so bars the present action. More specifically, Gai argues that Eski was well aware of her communications with the Chamberlins prior to the settlement and the Chamberlins stopped doing business with Eski after these communications. Nevertheless, there are genuine issues of material fact as to when and why the Chamberlins ended their business relationship with Eski. Eski contends that the Chamberlins first communicated to him on April 29, 2003 that they would no longer be doing business with him, and this is when his causes of action accrued. Significantly, the settlement agreement and dismissal of the prior lawsuit were in February of that year. Thus, regardless of whether Gai had prior conversations with the Chamberlins, it is unclear whether those conversations resulted in the termination of the business relationship prior to the February 2003 settlement. This record suggests they might not.
Eski also asserts that he sold two watches to Vanessa Chamberlin in February 2003. Ken Chamberlin states that he decided not to do any further business with Eski in October 2002, but does not state when he communicated that decision to Eski. Chamberlin further states that his decision had nothing to do with his conversation with Gai, but was based solely on the fact that Eski is dishonest. These are material facts to be decided by a jury.
In sum, viewing this record in the light most favorable to the non-moving party, there is a genuine issue of material fact when Eski's causes of action for this lawsuit accrued. The release does not preclude Eski's current action.
Res Judicata
'Res judicata, or claim preclusion, prohibits the relitigation of claims and issues that were litigated, or could have been litigated, in a prior action.' Res judicata requires a concurrence of identity of four elements: (1) cause of action; (2) subject matter; (3) persons and parties; and (4) the quality of the persons for or against whom the claim is made. Res judicata also requires a final judgment on the merits. A dismissal with prejudice constitutes a final judgment on the merits.
Pederson v. Potter, 103 Wn. App. 62, 67, 11 P.3d 833 (2000), review denied, 143 Wn.2d 1006 (2001).
Schoeman v. New York Life Ins. Co., 106 Wn.2d 855, 858, 726 P.2d 1 (1986).
Id. at 860.
Hisle v. Todd Pac. Shipyards, 151 Wn.2d 853, 866 n. 10, 93 P.3d 108 (2004) (citing Maib v. Md. Cas. Co., 17 Wn.2d 47, 52, 135 P.2d 71 (1943)).
Here, the first of the above elements is at issue and is material. Eski and Gai entered into a stipulation and order dismissing Gai's action with prejudice. Therefore, the first lawsuit is a final judgment on the merits. Also, there is identity in persons and parties, as well as identity in the quality of persons because Eski and Gai are parties to both lawsuits.
Pederson, 103 Wn. App. at 73.
If a cause of action has not accrued at the time of the first lawsuit, it is not the same cause of action and is not barred by res judicata. In Harsin v. Oman, the supreme court stated:
Johnson v. National Bank of Commerce, 152 Wash. 47, 50-51, 277 P. 79 (1929).
While it is admitted, there can be but one recovery upon the same cause of action. This does not mean the subject-matter of a cause of action can be litigated but once. It may be litigated as often as an independent cause of action arises which, because of its subsequent creation, could not have been litigated in the former suit, as the right did not then exist. It follows from the very nature of things that a cause of action which did not exist at the time of a former judgment could not have been the subject-matter of the action sustaining that judgment.
68 Wash. 281, 283-84, 123 P. 1 (1912) (emphasis added).
Here, there is an issue of material fact whether Eski's causes of action accrued before or after the parties settled and dismissed the first lawsuit. If Eski's action arose after settlement, it is not the same cause of action and not barred by res judicata. Moreover, the subject matter would not be the same.
A cause of action accrues when the plaintiff knew, or in the exercise of diligence should have known, all of the essential elements of the cause of action. There is an issue of material fact when Eski knew or should have known the Chamberlins terminated their business relationship, and whether res judicata applies cannot be decided on summary judgment.
In re Estates of Hibbard, 118 Wn.2d 737, 744-45, 826 P.2d 690 (1992).
Causation
Tortious interference with business relations requires four elements: (1) the existence of a valid contractual relationship or business expectancy; (2) knowledge of the relationship or expectancy on the part of the person who interferes; (3) intentional interference inducing or causing a breach or termination of the relationship or expectancy; and (4) resultant damage to the party whose relationship or expectancy has been disrupted.
Scymanski v. Dufault, 80 Wn.2d 77, 82, 491 P.2d 1050 (1971).
Here, the third of the above elements is primarily at issue. Gai argues that Eski cannot establish causation because Ken Chamberlin declared that Gai had nothing to do with his decision to terminate business dealings with Eski. In Chamberlin's declaration, he states that after Gai called him looking for her jewelry, he had the jewelry he purchased from Eski appraised. After the appraisals came back at only 30 to 50 percent of what he paid, he concluded that Eski misrepresented himself. Chamberlin declares 'My decision not to do any further business with Mr. Eski had nothing whatsoever to do with Lorraine Gai . . . or anyone other than Mr. Eski himself.' This is a factual question.
Although Chamberlin declares that Gai's statements had nothing to do with him and his wife terminating their business relationship with Eski, there is still a genuine issue of material fact for the jury to determine whether Gai's statements influenced the Chamberlins' decision to terminate the relationship. Lack of causation was not a proper basis to grant summary judgment.
In sum, there are genuine issues of material fact for all three bases that Gai argued in support of summary judgment. Summary determination of those issues is not appropriate.
Continuance
Eski argues that the trial court abused its discretion in denying his motion to continue the summary judgment hearing. We disagree. 'A continuance may be granted to a party who knows of the existence of a material witness and shows good reason why the affidavit of that witness cannot be obtained in time for summary judgment proceedings.' A motion for a continuance is within the sound discretion of the trial court, and exercise of that discretion will be set aside only for a manifest abuse of discretion. A trial court abuses its discretion only if its decision is manifestly unreasonable, exercised on untenable grounds, or is arbitrary. Here, Eski filed his lawsuit against Gai on October 1, 2004. The summary judgment hearing was scheduled for January 6, 2005. Eski moved to continue the summary judgment hearing, asserting discovery was not complete. Eski argued that he was waiting on another declaration by Ken Chamberlin and also wanted to depose Chamberlin in order to resolve the conflict regarding the challenged October 24, 2004 declaration. The trial court denied the motion.
Carr v. Deking, 52 Wn. App. 880, 886, 765 P.2d 40 (1988); CR 56(f).
Harris v. Drake, 152 Wn.2d 480, 493, 99 P.3d 872 (2004).
Id.
In the continuance motion, Eski failed to show why he was unable to obtain Ken Chamberlin's affidavit before the summary judgment hearing. Moreover, Chamberlin's October 24, 2004 declaration was not in dispute because the trial court struck the facsimile challenging it. Because Eski fails to show good cause why he was unable to obtain Chamberlin's affidavit before summary judgment, we hold that the trial court did not abuse its discretion in denying the motion.
SANCTIONS
Eski argues that the trial court erred in granting Gai's motion for attorney fees and costs under RCW 4.84.185 and CR 11. We agree in part.
We review a trial court's award of sanctions and attorney fees under RCW 4.84.185 or CR 11 for an abuse of discretion.
Skimming v. Boxer, 119 Wn. App. 748, 754, 82 P.3d 707, review denied, 152 Wn.2d 1016 (2004).
RCW 4.84.185 authorizes the trial court to award to the prevailing party reasonable expenses and attorney fees incurred in opposing a frivolous action. 'An action is frivolous if it "cannot be supported by any rational argument on the law or facts." The action must be frivolous in its entirety.
Id. at 756.
Jeckle v. Crotty, 120 Wn. App. 374, 387, 85 P.3d 931, review denied, 152 Wn.2d 1029 (2004) (quoting Clarke v. Equinox Holdings, Ltd., 56 Wn. App. 125, 132, 783 P.2d 82, review denied, 113 Wn.2d 1001 (1989)).
Biggs v. Vail, 119 Wn.2d 129, 136, 830 P.2d 350 (1992).
Here, the trial court found Eski's complaint was frivolous under RCW 4.84.185 and ordered him to pay Gai's reasonable expenses and attorney fees. However, as we have already discussed in this opinion, Eski's arguments are not frivolous.
First, Eski's claims have a basis in law. The tort underlying this action exists and there are genuine issues of material fact when his causes of action arose. If they accrued after the settlement and release agreement, they are not precluded by that agreement nor barred by res judicata. There is also an issue of material fact whether Gai was the cause of the Chamberlins terminating their business relations with Eski. Second, the action has a factual basis. Eski had a business expectancy with the Chamberlins selling them jewelry over the course of several years. Gai had knowledge that Eski was doing business with the Chamberlins, and she called them looking for her jewelry. Whether Gai intentionally interfered causing a termination of that expectancy is a genuine issue of fact for the jury. Thus, sanctions under RCW 4.84.185 are not appropriate.
CR 11
CR 11 provides that a trial court may impose sanctions and award reasonable expenses and attorney fees incurred if a party files pleadings that are not grounded in fact or warranted by law or are filed for an improper purpose, such as to harass. The purpose of CR 11 is to deter baseless filings, not filings that may have merit. 'Complaints which are 'grounded in fact' and 'warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law' are not 'baseless' claims, and are therefore not the proper subject of CR 11 sanctions.'
CR 11(a); Skimming, 119 Wn. App. at 754.
Bryant v. Joseph Tree, Inc., 119 Wn.2d 210, 220, 829 P.2d 1099 (1992).
Id. at 219-20.
Here, the trial court found that Eski's lawsuit was not well grounded in law or fact, Eski and Prior failed to make a reasonable inquiry into the facts before filing suit, and the lawsuit was filed for the improper purpose of harassing and intimidating Gai. The record shows otherwise. As stated above, Eski's tortious interference claims are well grounded in law and fact. Therefore, the CR 11 sanctions are not appropriate.
LR 7
Eski argues that the trial court erred in sanctioning Prior $500 for refiling a brief that was single spaced in order to conform to the LR 7 page requirement. This argument has no merit.
LR 7 requires the initial motion and opposing memorandum 'shall not exceed 12 pages without authority of the Court. . . .' Prior moved to file an over length brief consisting of 31 pages opposing Gai's motion for attorney fees and costs. The trial court denied the request. Prior filed a second brief opposing attorney fees and costs, and single spaced several pages in order to conform to the 12 page requirement. The trial court sanctioned Prior for violating both the King County Local Rules and the court's direct order.
LR 7(4)(B)(v).
The trial court was within its discretion to order sanctions for this violation.
OTHER MATTERS
Eski argues that the trial court erred in naming Prior as a judgment debtor because Prior was not a party to the action. Eski further asserts that because Prior never received a summons or complaint in this action against him, he was denied procedural and substantive due process protections when sanctioned by the trial court.
This court previously rejected this very argument by the same counsel in Splash Design, Inc. v. Lee. There is no basis to change our decision. The trial court properly named Prior as a judgment debtor.
104 Wn. App. 38, 43-44, 14 P.3d 879 (2000), review denied, 143 Wn.2d 1022 (2001).
ATTORNEY FEES
Eski argues that the trial court abused its discretion under CR 41 by dismissing Gai's counterclaim without awarding costs. Neither the court rule nor the statute supports this argument
A trial court may award reasonable attorney fees under 42 U.S.C. § 1988 to the prevailing party in a federal civil rights action under 42 U.S.C. § 1983. We review an attorney fee award under 42 U.S.C. § 1988 for an abuse of discretion.
42 U.S.C. § 1988(b); see also Ermine v. City of Spokane, 143 Wn.2d 636, 641, 23 P.3d 492 (2001).
Ermine, 143 Wn.2d at 641.
Here, Gai filed a counterclaim against Eski alleging witness intimidation under 42 U.S.C. § 1985(2). After the trial court granted Gai's summary judgment motion, she moved to voluntarily dismiss her counterclaim without prejudice under CR 41(a) and (c). A voluntary nonsuit without prejudice under CR 41(a)(2) is discretionary where good cause is shown and upon such terms as the court deems proper.
Jackson v. Standard Oil Co., 8 Wn. App. 83, 102, 505 P.2d 139 (1972).
Eski responded to Gai's motion, alleging her counterclaim was frivolous and requested fees under 42 U.S.C. § 1988(b). The trial court granted Gai's motion to voluntarily dismiss her counterclaim and denied Eski's cost request. The trial court properly dismissed Gai's counterclaim under CR 41(a)(2) because the counterclaim was permissive, was made after Gai's summary judgment win, and was done to terminate the litigation and get a final judgment. Eski has shown no basis for imposing terms or conditions. Eski contends that Gai does not have standing to bring a claim under 42 U.S.C. § 1985(2) because she was not a party to the immigration proceedings. However, 42 U.S.C. § 1985(2) applies not only to intimidation of a party, but also a witness, or juror. Because Gai was a witness in Eski's deportation hearing, she had standing to bring the counterclaim.
Heffernan v. Hunter, 189 F.3d 405, 410 (3d Cir. 1999) (holding a witness or juror may be a 'party' entitled to bring an action under 42 USC 1985(2)); but see David v. United States, 820 F.2d 1038, 1040 (1987) (holding relief under 42 USC 1985(2) is not available for a 'mere witness').
We hold that the trial court did not abuse its discretion in denying Eski attorney fees.
Next, Eski argues that he was denied equal access to justice because the trial court considered Gai's legal invoices for in camera review. Gai claimed the invoices were protected by attorney-client privilege. But Gai disclosed the amount of fees incurred, the rate charged, and the hours spent in defending the lawsuit in sworn testimony that was shared with Eski.
We need not decide whether the invoices were privileged. Eski has failed to show any prejudice by being denied these statements, having been provided with sworn statements regarding the relevant information generally used to support a fee application.
RAP 18.9
Gai requests attorney fees and costs under RAP 18.9 contending that this appeal is frivolous.
RAP 18.9 permits an appellate court to award attorney fees to a party responding to a frivolous appeal. '[A]n appeal is frivolous if there are no debatable issues on which reasonable minds might differ, and the appeal is so totally devoid of merit that there was no reasonable possibility of reversal.'
RAP 18.9(a); Carrillo v. City of Ocean Shores, 122 Wn. App. 592, 618, 94 P.3d 961 (2004).
Carrillo, 122 Wn. App. at 619.
Here, the trial court erred in granting summary judgment and dismissing Eski's claims. Therefore, Eski's appeal consists of debatable issues of fact and is not frivolous and fees are not awardable on that basis.
We affirm the trial court's order striking Eski's declarations and exhibits, denying his motion for continuance, and denying costs. We also affirm the sanctions order for violation of the page limits of the King County Local Rule. We reverse the orders granting summary judgment and imposing sanctions and awarding attorney fees under RCW 4.84.185 and CR 11 and remand for further proceedings.
ELLINGTON and SCHINDLER, JJ., concur.