Opinion
No. 57903-7-I.
March 12, 2007.
Appeal from judgments of the Superior Court for King County, No. 04-2-21766-1, Richard A. Jones, J., entered February 3 and 21, 2006.
Counsel for Appellant(s), Frank Raymond Siderius, Siderius Lonergan Martin LLP, Seattle, WA.
Counsel for Respondent(s) John Herman Hertog Jr. Hertog Coster PLLC, Seattle, WA.
Richard L Furman Jr. Hertog Coster PLLC, Seattle, WA.
Corey Thomas Denevan Hertog Coster PLLC, Seattle, WA.
Reversed and remanded by unpublished opinion per Baker, J., concurred in by Schindler, A.C.J., and Coleman, J.
BAKER, J. Pamela Thompson sought return of funds allegedly overpaid to L' Arche Noah, an Adult Family Home. The trial court granted summary judgment in Thompson's favor, subject to L' Arche Noah's right to seek an offset to be determined at the scheduled trial date. Subsequently, the court granted Thompson a further summary judgment, holding that the claim for an offset was barred by the statute of limitations. We reverse both rulings.
I.
David Bishop was born with Downs Syndrome. In March 1995, his sister, Pamela Thompson, acting as his guardian, placed Bishop with an adult family home operated by L' Arche Noah Sealth of Seattle.
There was no written agreement, but the parties orally agreed to a monthly fee for Bishop's care. Under the agreement, Bishop was admitted as a private pay resident until such time as the state Division of Developmental Disabilities awarded funding for his care. Bishop had approximately $1,200.00 a month available as well as a special needs trust which could provide an additional $400.00 a month for a total of $1,600.00 to cover the cost of a shared room at the home. Bishop was later transferred to a private room.
L' Arche Noah is a non-profit corporation. It contracts with the Washington State Department of Social and Health Services, Division of Developmental Disabilities (DDD) to provide residential care to people with developmental disabilities.
As a residential program contracting with DDD, L' Arche must accept the reimbursement rate established by DDD as full compensation for all residential services provided under the contract. DDD pays contactors monthly for services provided to clients at rates established by DDD, less client participation. The services covered by the DDD contract include the basic requirements of residential living, such as room and board, toiletries, bathing, dressing, self-medication, travel to medical services, and shopping trips. DDD does not contract for supplemental care, such as teaching, development of social or communications skills, services outside the residence, additional cable or telephone lines, or, notably, private rooms when such rooms are occupied by choice. Charges for such supplemental services, while not covered by the DDD, are authorized by DDD as a private contractual arrangement between contractor and client. DDD calculated the amount Bishop would pay each month to help defray the cost of his basic residential care at L' Arche. During the period between February 1999 through January 2004, the total of Bishop's participation as calculated by DDD was $29,003.73.
Ch. 71A RCW; former WAC 388-820-120 (2004), recodified as WAC 388-101 1420.
After his placement in 1995, Thompson paid the agreed monthly charges, apparently without disputing them. In addition to the basic monthly rate of $1,600.00, Thompson paid for incidental expenses not covered by the basic rate; she forwarded Bishop's Social Security checks, provided petty cash, payments from his trust fund, and $350.00 a month from Bishop's employment as part of his contribution.
Over time, Thompson began reducing payments to L' Arche Noah and contesting the amount of Bishop's contribution over and above the payments by DDD. In December 1999, Thompson, her lawyer, and a representative of Bishop's trust met with representatives of L' Arche and DDD to discuss Bishop's care and payment for his residency. L' Arche drafted a contract, but Thompson did not sign it. The draft contract breaks down the monthly charges and proposed methods of payment, incorporating state payment, Social Security payments, and Bishop's wages. It shows a total of $860.04 of monthly supplemental charges in addition to the basic services contracted for with DDD. Included on the list of supplemental charges were a private room, personal training, behavior modification and therapy, community nights and vacations, and Yoga classes.
Thompson brought suit against L' Arche Noah in August 2004, alleging that L' Arche had over-billed, and seeking reimbursement of the over-payments. Thompson asserted that L' Arche Noah could only bill for the amount of Bishop's participation as calculated by DDD from February 1999 through January 2004. Thompson asserted that any amount paid above and beyond the DDD contribution was over-billed.
The trial court granted Thompson summary judgment, holding that L' Arche must accept the DDD stipulated rate as full compensation for all contracted services provided to Bishop. It held that during the period from February 1999 through January 2004, L' Arche Noah had received $27,722.27 more than the amount allowed by DDD. The court held that the case was governed by the six-year statute of limitations for written agreements, apparently based on L' Arche Noah's contract with DDD. When the trial court granted Thomson summary judgment, L' Arche Noah requested, and was granted, the right to seek an offset, to be determined at the scheduled trial date.
Subsequently, the court granted a further summary judgment in favor of Thompson, holding that L' Arche Noah's right to an offset was barred by the three-year statute of limitations applied to oral contracts. L' Arche Noah appeals both summary judgments, as well as the court's decision to award Thompson attorney fees under the Trust and Estate Dispute Resolution Act.
Ch. 11.96A RCW.
II.
Summary judgment orders are reviewed de novo. In reviewing a grant of summary judgment, we engage in the same inquiry as the trial court. A summary judgment will be affirmed if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. We consider all facts submitted and all reasonable inferences from the facts in the light most favorable to the nonmoving party.
Stokes v. Polley, 145 Wn.2d 341, 346, 37 P.3d 1211 (2001).
Huff v. Budbill, 141 Wn.2d 1, 7, 1 P.3d 1138 (2000).
Huff, 141 Wn.2d at 7.
Wilson v. Steinbach, 98 Wn.2d 434, 437, 656 P.2d 1030 (1982).
Statute of Limitations.
Thompson argued, and the trial court apparently agreed, that L' Arche Noah's written contract with DDD supported a six-year statute of limitations for her claims. On appeal, she characterizes Bishop as a third party beneficiary of L' Arche Noah's contract with DDD.
Thompson also cites to Chatos v. Levas, 14 Wn.2d 317, 321, 128 P.2d 284 (1942) for the proposition that the statute of limitations begins to run from the date of execution of the contract. Chatos concerned a promissory note, payable on demand, in which no time for payment is expressed. It has no relevance here.
The question of whether the contract between L' Arche Noah and the DDD was properly construed to give rise to a six-year statute of limitations, and whether Bishop was indeed a third party beneficiary, need not detain us. Regardless of the nature of that contract, it was not the entire agreement entered into between L' Arche Noah and Thompson.
In addition to the written contract with DDD, L' Arche Noah entered into an oral contract with Thompson. Thompson was admitted as a private resident under that oral contract. Thompson concedes that Bishop was admitted as a private resident until such time as DDD made funds available to him. It is undisputed that Bishop subsequently moved into a private room and remained in a private room throughout the period in question. It appears he was the recipient of numerous supplemental services in addition to the private room, such as personal training, behavioral therapy, vacations, and Yoga classes. These supplemental services were apparently provided pursuant to the oral agreement between Thompson and L' Arche Noah, and were independent of the contract with DDD.
An action upon a contract in writing shall be commenced within six years. An action upon a contract that does not arise out of a written instrument, i.e., an oral contract, shall be commenced within three years. A written agreement for purposes of the six-year statute of limitations must contain all the essential elements of the contract, and if resort to parol evidence is necessary to establish any essential element, then the contract is partly oral and the three-year statute of limitations applies.
Bogle Gates v. Holly Mt. Res., 108 Wn. App. 557, 560, 32 P.3d 1002 (2001).
The agreement between Thompson and L' Arche Noah included the underlying written contract between L' Arche Noah and the DDD, and the oral contract between Thompson and L' Arche Noah. Consequently, it is a mixed oral and written contract, and any action arising under that contract would be subject to a three-year statute of limitations.
Furthermore, statutes of limitations do not run against defenses arising out of the transaction sued upon. Thompson's claim and L' Arche Noah's defense arose from the same cause of action. The supplemental charges which L' Arche Noah asserts account for any discrepancy in billing constitute its defense to Thompson's claim. Any defense by L' Arche Noah is not barred by the statute of limitations so long as Thompson's claim itself is timely.
Seattle First Nat' l Bank v. Siebol, 64 Wn. App. 401, 407, 824 P.2d 1252 (1992).
Siebol, 64 Wn. App. at 407.
Summary Judgment.
The confusion over the applicable statute of limitations is an indication that the fundamental factual issues of the dispute are unresolved. Thompson asserts that the amount of her claim against L' Arche Noah does not include any charges for supplemental or additional services provided outside the contract with DDD. L' Arche Noah asserts the contrary. The central factual issues in this litigation are the terms of the contract between the parties and the nature of the payments made pursuant to it. The parties disagree on the terms of the contract, and dispute the nature of payments made on Bishop's behalf.
It is neither possible nor appropriate for this court to make a factual determination regarding the nature and amount of payments made by Thompson to L' Arche Noah, nor to pronounce on the terms of the contract between the parties. Neither does the record clearly support the claims of either party. Given the substantive importance of the material facts in question, we hold that it was error for the trial court to grant either summary judgment.