In The News

Recent Appellate Decisions – August 3 to August 9, 2012

Selected summaries prepared by Commissioner James Verellen (ret.)

Washington Supreme Court

August 9, 2012

In re Recall of Ward,  No.  86899-9

http://www.courts.wa.gov/opinions/index.cfm?fa=opinions.showOpinion&filename=868999MAJ

recall petition –  alleged willful violation Open Public Meetings Act – legally sufficient

A recall petition alleges that Ward and Whittaker, commissioners for a fire protection district, engaged in misfeasance related to the creation of a chief organizational officer position for Ward, enrollment of the district in the state retirement system, and grant of retroactive compensation and retirement credit for Ward.

The Supreme Court (9-0) holds that three charges based on the use of public office to obtain retirement credits “fail to rise to the level of self-dealing suggesting substantial misfeasance.”  But the charge that they willfully violated the Open Public Meetings Act by falsifying meeting minutes to reflect a decision not made in an open meeting is legally sufficient to allow the next phase of the recall process … signature gathering.

Macias v. Saberhagen Holdings, Inc, No. 85535-8

http://www.courts.wa.gov/opinions/index.cfm?fa=opinions.showOpinion&filename=855358MAJ

http://www.courts.wa.gov/opinions/index.cfm?fa=opinions.showOpinion&filename=855358Di1

product liability – asbestos – duty to warn – safety respirator

Macias worked as a tool keeper in a shipyard.  His duties included cleaning safety respirators used by other workers, and replacing the respirator canisters used to filter out harmful contaminants.  Macias developed mesothelioma.  He sued the respirator manufacturers for negligence and products liability, including the failure to warn of the risks of exposure to contaminants.

The manufacturers unsuccessfully sought summary judgment arguing that they did not manufacture any product containing asbestos and as a matter of law they had no duty to warn of the dangers associated with asbestos in another company’s product.  Division II granted discretionary review and reversed, relying on Simonetta v. Viad Corporation, 165 Wn.2d 341 (2008) and Braaten v. Saberhagen Holdings, 165 Wn.2d 373 (2008), to conclude that the respirator manufacturers were not in the chain of distribution of the asbestos containing products and had no duty to warn of the hazards of exposure to asbestos.

The Washington Supreme Court (5-4) affirmed the trial court:

• Where substantially all of the exposure to injury-causing asbestos occurred after July 26, 1981, the Washington Products Liability Act (WPLA) applies.
• When a negligence claim is product-based, the negligence theory is subsumed under the WPLA product liability claim.
• Strict liability principles extend to failure to warn cases and foreseeability of the risk of harm is not an element.
• In Simonetta and Braaten, the court “held that generally a manufacturer does not have a duty to warn of the dangers inherent in a product that it does not manufacture, sell or supply.”  Those cases do not control “because the duty at issue [here] is to warn of the danger of asbestos exposure inherent in the use and maintenance of the defendant manufacturers’ own products, the respirators.”
• “The only issue before us is whether as a matter of law the manufacturers are entitled to summary judgment on the basis that they had no duty to warn of the danger of exposure to asbestos when their respirators were cleaned and maintained for reuse because these manufacturers were not in the chain of distribution of the asbestos-containing products themselves.”
• “[T]he very purpose of the respirators would, of necessity, lead to high concentrations of asbestos (and/or other contaminants) in them, and in order to reuse them as they were intended to be reused, this asbestos had to be removed.”
• The respirator’s manufacturers “were clearly in the chain of the distribution of these products – respirators that necessarily and purposefully accumulated asbestos in them when they functioned exactly as they were planned to function.  It does not matter that the respirator manufacturers were not in the chain of distribution of products containing asbestos when manufactured.”
• “[T]his case comes within the general rule that a manufacturer in the chain of distribution is subject to liability for failure to warn of the hazards associated with use of its own products…[H]ere when the products were used exactly as intended and cleaned for reuse exactly as intended they inherently and invariably posed the danger of exposure to asbestos.”
• “[T]he fact that predictably, or foreseeably, the respirators will be used to filter asbestos does not involve improper consideration of foreseeability of injury to impose a duty.  Rather, it is a matter of considering whether the product might be unreasonably unsafe in the absence of adequate warnings and, as is always true in product liability cases, the use to which the product will be put is always a part of this determination.”
• The plaintiffs have identified the manufacturer of the product that allegedly caused the injury; other questions, for example, whether the danger was so obvious that no warnings were required may arise on remand and are not addressed.

Ruvalcaba v. Kwang Ho Baek, No. 85732-6

http://www.courts.wa.gov/opinions/index.cfm?fa=opinions.showOpinion&filename=857326MAJ

private way of necessity – voluntary landlock – 35-year delay in seeking private condemnation – attorney fees

Consistent with article 1, sec. 16 of the Washington Constitution, RCW 8.34.010 allows a private condemnation if a private way of necessity is reasonably necessary.

R purchased a parcel of land with public street access to the east.  In 1971, R sold the eastern portion of the parcel without retaining any access easement.  R intended to obtain easements from neighbors to allow access to the landlocked portion retained by R, but failed to do so.

In 2008, R brought a private condemnation action against the owners of property to the north of the landlocked property (the Northern Owners).  R contends that steep slopes make access to the east costly and impractical.

The trial court granted summary judgment in favor of the Northern Owners because “one cannot create, by one’s own action of landlocking one’s property, the ‘reasonable necessity’ that is an element of the plaintiff’s case in a private condemnation of a way by necessity.”  The Court of Appeals reversed, concluding that the decision to voluntarily landlock property is one fact to be weighed in determining the reasonable need for a way of necessity.

The Washington Supreme Court (9-0) affirmed the trial court:

• A need for a private way of necessity does not have to be absolute, but it must be more than merely convenient or advantageous.
• The condemnor has the burden of proving reasonable necessity, including the absence of alternatives.
• The court does not need to reach the question whether a person who voluntarily landlocks their property is automatically precluded from ever obtaining a private way of necessity.
• “Here, [R] landlocked their own parcel, made claims of reasonable necessity based on financial impracticability, and waited approximately 35 years to bring a condemnation action.  Under this set of factual circumstances, no reasonable finder of fact could find that there was reasonable necessity.”
• The court exercises its discretion to award the Northern Owners their reasonable attorney fees.

Division II  Washington State Court of Appeals

August 8, 2012

Arthur West v. Thurston County And Port Of Olympia, No. 40865-1

http://www.courts.wa.gov/opinions/index.cfm?fa=opinions.showOpinion&filename=408651MAJ

frivolous appeal

West filed a complaint against the Port of Olympia and others with general allegations of Public Records Act violations, conspiracy, fraud and “unconstitutional expenditure” of public funds.  The Port filed a motion for summary judgment.  West did not respond to the motion.  The trial court granted summary judgment in favor of the Port.

Division II affirmed the trial court concluding West offered no facts in support of his claims, and did not clarify his claims to present any justiciable controversy.   Division II awarded the Port its reasonable attorney fees on appeal for a frivolous appeal.

M.r.b., et. al. v. Puyallup School District, No. 40737-0

http://www.courts.wa.gov/opinions/index.cfm?fa=opinions.showOpinion&filename=407370MAJ

public schools –  school newspapers – sexual content – invasion of privacy, negligent hiring and supervision, outrage – motion for new trial

A high school newspaper published an edition featuring articles on oral sex.  The editorial board comprised of five students made editorial decisions.   D, an editorial board member, interviewed the students who are the plaintiffs.  She wore a badge for the school paper and identified herself as a staff member of the paper.  She explained the topic for her article to each and asked if she could quote them.  She invited the students to decline to be interviewed or to decline to answer any question.   Each of the plaintiffs agreed to be interviewed.  D recorded each interview and took notes from her recordings. The board complied with requests from students to remove their quotes or to be quoted anonymously.  The article included some testimonials of the plaintiffs’ sexual history.

S taught the journalism class and was the adviser for the paper.  S reviewed the edition before it was published.  The student editorial board also consulted the prior journalism advisor, who suggested that the student journalists confirm they had permission from the quoted students before publishing. D assured S that she had the consent of the named students.  S asked D to confirm a second time with each quoted student.  D did not do so.  The edition received a journalism award.

The plaintiffs sued the district for invasion of privacy, negligent hiring and supervision and for outrage.  The trial court ultimately concluded that the school was a limited open forum.  The court instructed the jury that the students have a First Amendment right to freedom of speech and press, but educators do not offend the First Amendment by exercising control over school publications so long as their actions are reasonably related to legitimate educational concerns.  During the trial, the District presented evidence of an “open forum” instructional theory and referred to the large amounts of the damages identified by the plaintiffs’ pretrial statement of damages.  The jury found for the School District.  The trial court denied the students’ motion for a new trial.

Divsiion II affirmed the trial court:

• Whether or not the school is a Hazelwood non-public forum rather than a limited open forum, the instruction give by the trial court was proper.
• The trial court did not commit reversible error by allowing testimony about the open forum method of instructing high school journalism; the evidence was “generally clear” that it related to the teaching method and not the District’s right to prohibit publication.
• The trial court did not err in denying the motion for a new trial based on alleged misconduct; the references by the District to the large amounts of students claim for damages were not objected to at trial and the statements were not flagrant.

Robert Emerick v. Cardiac Study Center, Inc., No. 41597-6

http://www.courts.wa.gov/opinions/index.cfm?fa=opinions.showOpinion&filename=415976MAJ

covenant not to compete – physician –  protectable interests of employer – scope of restraint – public policy

Reasonableness of a covenant not to compete is measured by (1) whether the restraint is necessary to protect the employer’s business or goodwill, (2) whether it imposes greater restraint than reasonably necessary for that purpose, and (3) whether enforcing the covenant violates public policy – would the public be injured through the loss of the employee’s services and skill.  A court considers partial enforcement if some of the terms are unreasonable.

In 2002, Cardiac hired Dr. Emerick, a cardiologist with three years experience.  Cardiac had four offices, each near a hospital in Pierce County.  In 2004, Dr. Emerick became a shareholder and signed a covenant not to compete in Pierce County or Federal Way for five years after termination for any reason.  In 2009, Dr. Emerick’s employment was terminated. Dr. Emerick filed an action to declare the covenant invalid.  The trial court granted Dr. Emerick’s motion for summary judgment, initially ruling the covenant was unenforceable for violating public policy.  When the court entered written findings of fact and conclusions of law, the court determined the temporal scope was “overly broad.”  The trial court permanently enjoined Cardiac from enforcing the covenant, which bars Emerick from serving patients he “does not solicit and has not solicited.”  Cardiac appeals.

Division II reversed the summary judgment:

• The trial court narrowly focused on Dr. Emerick’s preexisting skills and knowledge in concluding that Cardiac had minimal interests to protect.  Cardiac’s client base, referral sources, business model and goodwill are legitimate protectable business interests.
• The trial court did not explain its conclusion that the temporal scope was too broad and that the six months Dr. Emerick had not practiced was “ample time” to protect Cardiac’s financial interests.  The trial court did not explain its very general geographic statements about “countless cities in Pierce County and Federal Way.”  The trial court did not attempt to save as much of the covenant as could reasonably and fairly be enforced.
• The trial court may consider the public policy of public access to necessary services, but must balance those concerns against the employer’s right to protect its business.  The trial court’s broad public policy statements about “fairness to the public” do not address a specific risk to the public for this particular specialty in this particular geographic area.
• Division II does not adopt the approach of some other states discouraging covenants not to compete between physicians.

Trustee’s Sale Of Real Property Of: John B. Giannusa, Sr.,  No. 41985-8

http://www.courts.wa.gov/opinions/index.cfm?fa=opinions.showOpinion&filename=419858MAJ

foreclosure sale – surplus – purchasing junior lienholder

The holder of the second position deed of trust purchased at the trustee’s sale foreclosing the first position deed of trust.  The successful bid was more than the cost and balance owing on the first.  The surplus was paid into the registry of the court.  The owner of the property (debtor) moved to disburse the surplus to him.  The second lienholder objected arguing that its second position deed of trust had priority to the surplus.  The superior court denied the owner’s motion.

Division II affirmed:

• Purchasing junior lienholders are permitted to recover surplus funds.
• “[T]he junior lienholder’s interest, eliminated by the trustee’s sale, attaches to the surplus.”
• Obtaining the surplus is neither the equivalent of obtaining a deficiency judgment nor gaining an unfair advantage; the purchasing second lienholder has to pay the full bid price and if the second seeks and receives the surplus, that amount is credited against the debt owed to the second.
• Division II declines to consider the argument raised for the first time on appeal, that a purchasing junior lienholder is precluded from pursuing a surplus because “the purchasing junior lienholder merges its deed of trust into its ownership interest.”

Division III Washington State Court of Appeals

August 9, 2012

Deep Water Brewing, LLC, et al v. Fairway Resources, Limited, et al No. 30064-1

http://www.courts.wa.gov/opinions/index.cfm?fa=opinions.showOpinion&filename=300641MAJ

interest – attorney fee award on remand from first appeal – lodestar – fees on second appeal

When an appellate court reverses a trial court judgment and directs that a new judgment be entered, then interest runs from the date of the new judgment.  When an appellate court “merely modifies the trial court award and the only action necessary in the trial court is compliance with the mandate” then interest accrues from the date of the original judgment.

In the first appeal, Division III affirmed a 2008 judgment in favor of Deep Water, except that the court remanded “for the entry of appropriate findings of fact and conclusions of law to support the award of fees and costs…”.  In 2011, the trial court stated it was not making “new findings” or exercising any discretion on remand, but was supplementing the record to determine whether there were sufficient facts to support the original attorney fee award.  The trial court entered findings in support of the original amount of 2008 attorney fees award, and calculated interest on the attorney fees from the date of the original 2008 judgment.  The trial court declined to apply a multiplier, and denied a portion of post-2008 attorney fees requested by Deep Water.  Both sides appealed from the 2011 judgment.

Division III reversed the trial court’s ruling that interest on the attorney fees ran from 2008, and affirmed the other rulings:

• “[I]n cases that are neither affirmed nor reversed, the issue of postjudgment interest appears to turn largely upon the wording or the effect of the remand order.”
• Trial courts retain the discretion to set the amount of attorney fees on remand “unless expressly limited by the appellate courts or the exercise of discretion would be inconsistent with the ruling on appeal.”
• When construing an opinion for purposes of determining the scope of remand, the opinion “must be read in its entirety without any particular emphasis.”
• Here, the trial court retained its authority to exercise its discretion in awarding attorney fees on remand, and was required to enter findings and conclusions necessary to support any award.
• “[T]he trial court had and exercised discretion upon remand, regardless of its own characterization of its authority.”
• “Because the trial had and exercised discretion upon remand, the interest calculation should run from the 2011 judgment.”
• Adjustments to the lodestar “are both discretionary and rare.”  A multiplier is not warranted where the lodestar analysis already contemplates the attorney’s skill and case complexity.
• “The only instance where a court is required to explain itself when it declines to award fees is where the amount awarded is substantially less than that requested.”
• Division III declined to award any fees for the second appeal;  “We recognize that civil litigation is often impassioned.  However, there comes a point at which even the most ardent combatants must lay down their weapons.”