As part of an ongoing series, Timothy Mitchell, managing partner of Cruser Mitchell’s Seattle office, provides monthly updates on the latest developments in Washington insurance defense law. These updates will contain brief summaries and key quotes from recent cases.
Please contact Tim at (253) 509-1874 or tmitchell@cmlawfirm.com if you would like to discuss these cases in greater detail, or have any questions on any other matters involving Washington state law.
CIVIL PROCEDURE
Abel v. Grant County Public Utility District (2/21/23)
[Note: This is a summary of an unpublished opinion, which holds no precedential value]
Holding: Court of Appeals (Div. 1) affirmed jury instructions that plaintiff had to prove incompetency by clear, cogent and convincing evidence in order to toll statute of limitations.
Key Quotes:
- “RCW 4.16.190(1) provides if a person entitled to bring an action . . . [is] at the time the cause of action accrued . . . incompetent or disabled to such a degree that he or she cannot understand the nature of the proceedings, such incompetency or disability as determined according to chapter 11.130 RCW . . . the time of such disability shall not be a part of the time limited for the commencement of action. The burden of proving events justifying the tolling of the statute of limitations rests upon the party asserting it.”
- “Under our well-established common law, the law presumes competence and the burden of proving incompetency is proof by clear, cogent and convincing evidence.”
Spear v. Curry (2/14/23)
[Note: This is a summary of an unpublished opinion, which holds no precedential value]
Holding: Court of Appeals (Div. 2) affirmed trial court’s ruling setting aside default judgment when defendant believed prior counsel was representing him in litigation.
Key Quotes:
- “CR 60(b)(1) provides for relief from a judgment for “[m]istakes, inadvertence, surprise, excusable neglect or irregularity in obtaining a judgment or order. Courts apply a four-prong test to determine if a default judgment should be vacated under CR 60(b)(1): (1) that there is substantial evidence supporting a prima facie defense; (2) that the failure to timely appear and answer was due to mistake, inadvertence, surprise, or excusable neglect; (3) that the defendant acted with due diligence after notice of the default judgment; and (4) that the plaintiff will not suffer a substantial hardship if the default judgment is vacated.. The first two factors are the primary considerations in whether to set aside a default judgment. Whether to set aside a default judgment is ultimately a matter of equity. . . . What is just and equitable must be determined based on the specific facts of each case, not based on a fixed rule.”
- To support a motion to vacate a default judgment, “a defendant generally must submit affidavits identifying specific facts that support a prima facie defense. The defendant must present ‘concrete facts’ that support a defense. However, the superior court views all facts and reasonable inferences in the light most favorable to the defendant. Any set of facts that, if believed, would entitle the defendant to relief can support setting aside a default judgment. [E]ven a ‘tenuous’ defense may be sufficient to support a motion to vacate.”
- “A motion to vacate under CR 60(b)(1) must be filed within a reasonable time and within one year from the judgment. Courts have held that one month is within a reasonable time while three months is not within a reasonable time.”
Ortega v. Miller (1/17/23)
[Note: This is a summary of an unpublished opinion, which holds no precedential value]
Holding: Court of Appeals (Div. 1) affirmed dismissal of complaint due to failure to serve defendant within 90 day window tolling statute of limitations after lawsuit was filed, when process server was on 10 day bereavement leave.
Key Quotes:
- “RCW 4.16.170 is a “tentative commencement” provision. Filing a complaint before the limitations period expires is one way for a party to tentatively commence an action, but the action will not survive the statute of limitations unless the plaintiff accomplishes service of process within 90 days of filing the complaint: For the purpose of tolling any statute of limitations an action shall be deemed commenced when the complaint is filed or summons is served whichever occurs first. If service has not been had on the defendant prior to the filing of the complaint, the plaintiff shall cause one or more of the defendants to be served personally, or commence service by publication within ninety days from the date of filing the complaint. If the action is commenced by service on one or more of the defendants or by publication, the plaintiff shall file the summons and complaint within ninety days from the date of service. If following service, the complaint is not so filed, or following filing, service is not so made, the action shall be deemed to not have been commenced for purposes of tolling the statute of limitations.”
- “Courts may equitably toll the statute of limitations when justice requires. Equitable tolling of the statute of limitations is an extraordinary form of relief. . . . Washington law allows equitable tolling of a statute of limitations in a civil case only under the following conditions: (1) the plaintiff has exercised diligence, (2) the defendant’s bad faith, false assurances, or deception has interfered with the plaintiff’s diligent efforts, (3) tolling is consistent with (a) the purpose of the underlying statute and (b) the purpose of the statute of limitations, and (4) justice requires tolling the statute of limitations.”
Rios v. Gonzales (3/29/22)
[Note: This is a summary of an unpublished opinion, which holds no precedential value]
Holding: Court of Appeals (Div. 2) affirmed dismissal of action where plaintiff failed to timely serve defendant under RCW 46.64.040, Washington’s nonresident motorist act, holding that plaintiff failed to provide notice to defendant “forthwith” of his service upon the secretary of state due to monthlong delay.
Key Quote: “RCW 46.64.040, Washington’s nonresident motorist act, “allows for substituted service on the Washington secretary of state when the person intended to be served is not an inhabitant of or cannot be found within Washington.” RCW 46.64.040 provides the requirements for effecting substitute service on the secretary of state: Service of such summons or process shall be made by leaving two copies thereof with a fee established by the secretary of state by rule with the secretary of state of the state of Washington, or at the secretary of state’s office, and such service shall be sufficient and valid personal service upon said resident or nonresident: PROVIDED, That notice of such service and a copy of the summons or process is forthwith sent by registered mail with return receipt requested, by plaintiff to the defendant at the last known address of the said defendant, and the plaintiff’s affidavit of compliance herewith are appended to the process, together with the affidavit of the plaintiff’s attorney that the attorney has with due diligence attempted to serve personal process upon the defendant at all addresses known to him or her of defendant and further listing in his or her affidavit the addresses at which he or she attempted to have process served. (Emphasis added). Our Supreme Court has held that “[i]t is appropriate to require strict compliance with the detailed procedures for service of process set forth in RCW 46.64.040. Further, “notice to the defendant is essential for due process. A plaintiff’s failure to adhere to the statute’s procedures for notifying the defendant that process has been served on the secretary renders service on the secretary a nullity.”
DRUMMOND v. BONAVENTURE OF LACEY, LLC (12/14/2021)
Holding: Court of Appeals (Div. 2) reversed a ruling that RCW 70.129 (Long Term Care Resident Rights) prevented an assisted living community from enforcing an arbitration agreement with the estate of a former patient.
Key Quotes:
- “RCW 70.129.105 provides that no long-term care facility . . . shall require or request residents to sign waivers of potential liability for losses of personal property or injury, or to sign waivers of residents’ rights set forth in this chapter. . . . RCW 70.129.005 does not contain a right to a jury trial and, thus, cannot be used as a basis to argue that the arbitration agreement violates RCW 70.129.105.”
- “Arbitration is strongly favored under Washington and federal law and all presumptions [are] to be made in favor of arbitration. The FAA provides that arbitration agreements [are] valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. In other words, a court can invalidate an arbitration agreement for fraud or unconscionability, but the FAA preempts state rules that prohibit or invalidate an arbitration agreement solely because it is an arbitration agreement. The FAA also displaces laws that “covertly” undermine arbitration agreements by targeting the defining features of arbitration agreements.”
CORNELIUS v. ALPHA KAPPA LAMBDA (11/8/2021)
[Note: This is a summary of an unpublished opinion, which holds no precedential value]
Holding: Court of Appeals (Div. 1) reversed and remanded matter for hearing on determination of procedural unconscionability of arbitration agreement.
Key Quote: “Procedural unconscionability is the lack of meaningful choice, considering all the circumstances surrounding the transaction. To determine whether an agreement is procedurally unconscionable, courts look at (1) the manner in which the contract was entered, (2) whether [the signatory] had a reasonable opportunity to understand the terms of the contract, and (3) whether the important terms were hidden in a maze of fine print. These three factors [should] not be applied mechanically without regard to whether in truth a meaningful choice existed. An arbitration agreement may be procedurally unconscionable if it is an adhesion contract. Adhesion contracts are standard form contracts presented on a “take it or leave it basis” by a party with disproportionately more bargaining power. But an adhesion contract is not necessarily procedurally unconscionable. The key inquiry is whether the party lacked meaningful choice.”
FERGUSON v. WAID (8/2/21)
[Note: This is a summary of an unpublished opinion, which holds no precedential value]
Holding: Court of Appeals (Div. 1) affirmed dismissal of professional negligence claims against attorney, holding that the three year statute of limitations began to run on the date the adverse judgement was entered against Plaintiff, among other reasons.
Key Quote: “The limitation period begins when the plaintiff is either aware or should have been aware of the facts underlying the claim, regardless of whether the plaintiff is aware of the particular legal cause of action. In professional malpractice cases, the pivotal factor which tolls the running of the statute of limitations is the absence of knowledge of injury. Notably, when a court enters a judgment adverse to a party, that party is formally advised of the judgment of the court and, hence, receives notification of any damage which results from their attorney’s representation.”
MOSE v. GRAY (8/2/21)
[Note: This is a summary of an unpublished opinion, which holds no precedential value]
Holding: Court of Appeals (Div. 1) reversed a denial of an award attorney fees under RCW 4.84.250 when counterclaimant’s claim totaled less than $10,000 and the verdict was in excess of Plaintiff’s rejected offer to settle.
Key Quote: “Under RCW 4.84.250, fees “shall be taxed and allowed to the prevailing party” in “any action for damages where the amount pleaded by the prevailing party” is less than $10,000. . . . An award of fees under RCW 4.84.250 is mandatory if the prevailing party meets the conditions of the statute. A plaintiff is the prevailing party under RCW 4.84.250 only if the recovery exceeds the amount that the plaintiff offered to settle. A defendant, on the other hand, is the prevailing party if the plaintiff recovers nothing at trial, even if the defendant made no settlement offer. . . . the failure to plead an exact amount of damages does not preclude fees under RCW 4.84.250”
KOSROVANI v. ROGER JOBS MOTOR, INC. (6/1/21)
[Note: This is a summary of an unpublished opinion, which holds no precedential value]
Holding: Court of Appeals (Div. 1) affirmed enforcement of CR 2A settlement agreement against plaintiff even though subsequently proposed indemnity terms were not included in initial settlement agreement (the indemnity provisions were excluded from final enforcement).
Key Quote: “The purpose of CR 2A is to give certainty and finality to settlements. CR 2A applies to preclude enforcement of an agreement only when the agreement was made by the parties or attorneys “in respect to the proceedings in a cause” and the “purport” of the agreement is disputed. The purport of an agreement is disputed within the meaning of CR 2A if there is a genuine dispute over the existence or material terms of the agreement. A litigant’s remorse or second thoughts about an agreement is not sufficient to create a genuine dispute. Where the CR 2A requirements are met, a motion to enforce a settlement is a commonly accepted practice.”
LARSON v. JARRITOS (6/8/21)
[Note: This is a summary of an unpublished opinion, which holds no precedential value]
Holding: Court of Appeals (Div. 2), noting that under RCW 4.16.170 service of process on one defendant tolls the statute of limitations against unserved defendants, affirmed a motion to dismiss due to plaintiff’s failure to timely serve respondent defendants within the statute of limitations after an initially served co-defendant was dismissed from the case.
Key Quote: “Under RCW 4.16.170, service of process on one defendant tolls the statute of limitations as to unserved defendants. But [a] plaintiff who fails to serve each defendant risks losing the right to proceed against unserved defendants if the served defendant is dismissed. Thus, if we presume for the sake of argument that the summonses and complaint were timely filed, the statute of limitations was initially tolled as to the Respondents when [plaintiff] served WinCo Foods within 90 days of [plaintiff]’s filing of the summonses and complaint. But when WinCo Foods was dismissed before [plaintiff] served either of the Respondents, [plaintiff] lost the right to proceed against the unserved parties, the Respondents, unless he can show that the statute of limitations was somehow tolled as to the Respondents.”
SUNDARARAMAN v. MANGAN (6/14/21)
[Note: This is a summary of an unpublished opinion, which holds no precedential value]
Holding: Court of Appeals (Div. 1) affirmed motion to strike a trial de novo request from mandatory arbitration, holding that appellant had failed to sign the request, as required by both statute and court rule.
Key Quote: “In order to obtain a trial de novo in the superior court, [w]ithin twenty days after [the arbitrator files his or her decision and award with the clerk of the superior court, together with proof of service thereof on the parties], any aggrieved party may file with the clerk a written notice of appeal and request for a trial de novo in the superior court on all issues of law and fact. The notice must be signed by the party. Such trial de novo shall thereupon be held, including a right to jury, if demanded. RCW 7.06.050(1); accord SCCAR 7.1(b) (“The request for a trial de novo…must be signed by the party.”).”
HARLEY MARINE SERVICES v. CHRISTENSEN (6/28/21)
[Note: This is a summary of an unpublished opinion, which holds no precedential value]
Holding: Court of Appeals (Div. 1) affirmed denial of employer’s motion to compel arbitration, holding that arbitration clause in prior employment agreement specific to a prior position did not apply when the parties signed a new employment agreement for promoted position that did not include an arbitration clause and did not incorporate terms of prior agreement.
Key Quote: “Before deciding whether specific claims are subject to arbitration, the trial court must determine whether a valid agreement to arbitrate is in effect. The usual rules of contract interpretation govern interpretation of an employment contract. Washington follows the objective theory of contract interpretation, under which courts must attempt to ascertain the intent of the parties from the objective manifestations of the agreement and ordinary meaning of the words within the contract. We determine the intent of the contracting parties by considering the language of the agreement as well as the contract as a whole, the subject matter and objective of the contract, all the circumstances surrounding the making of the contract, the subsequent acts and conduct of the parties to the contract, and the reasonableness of respective interpretations advocated by the parties.”
NORTHWEST RECYCLER, INC et al. v. STEVENS et al. (4/26/21)
[Note: This is a summary of an unpublished opinion, which holds no precedential value]
Holding: Court of Appeals (Div. 1) held employee (1) could enforce prior arbitration agreement even though subsequent employee handbooks attempted to rescind arbitration agreement by not including arbitration language, and (2) did not waive right to arbitration by initially not raising arbitration defense in initial answer and discovery.
Key Quotes:
- “Although an employer may unilaterally modify conditions of employment relating to employee discipline so long as employees receive reasonable notice, an employer may not unilaterally alter an agreement to arbitrate.”
- “To establish waiver, on the part of its opponent, the party opposing arbitration must demonstrate that the opponent (1) had knowledge of the existing right to compel arbitration, (2) acted inconsistently with that right, and (3) those inconsistent acts prejudiced the party opposing arbitration.”
MILWAUKEE LUMBER Co. v. VERISTONE FUND I, LLC (3/29/21)
[Note: This is a summary of an unpublished opinion, which holds no precedential value]
Holding: Court of Appeals (Div. I) held that “a party who willfully ignores a summons and complaint cannot later take advantage of the court’s authority to vacate a default judgment.” Noting that a process server’s affidavit of service will be considered presumptively correct unless challenged, the Court of Appeals held that the appellant’s two affidavits claiming that no service had occurred, without more, were not enough to overcome this presumption. Noting the trial court had found that the appellant had willfully failed to respond to the served complaint for “strategic” reasons, the Court of Appeals affirmed the decision to deny the motion to vacate. This opinion, while not binding, underscores the importance of timely answering a complaint.
Key Quote (Court of Appeals reiterated the following standard for motion to vacate default judgment under CR 60(b)(1)): “The court weighs four factors when deciding this question: (1) That there is substantial evidence extant to support, at least prima facie, a defense to the claim asserted by the opposing party; (2) that the moving party’s failure to timely appear in the action, and answer the opponent’s claim, was occasioned by mistake, inadvertence, surprise or excusable neglect; (3) that the moving party acted with due diligence after notice of entry of the default judgment; and (4) that no substantial hardship will result to the opposing party. But when a defendant caused the default by willfully failing to appear, the second factor outweighs the others because equity demands the judgment stand to avoid rewarding misconduct. Equity will not allow for vacation of [a default] judgment if the actions leading to default were willful. Willful defiance of the court’s authority can never be rewarded in an equitable proceeding. The movant has the burden of demonstrating that equity favors vacating the judgment.”