Justia Washington Supreme Court Opinion Summaries

U.S. Bank National Association foreclosed on property owned by real estate company Dalton M, LLC. The bank did not have the right to do that: Dalton M actually owned the property outright, not subject to any lien. Dalton M ended up suing U.S. Bank to quiet title and for damages for slander of title. Dalton M prevailed at trial on both of those claims. The trial court also awarded substantial fees to Dalton M based on the slander of title claim. The Court of Appeals reversed on that claim, holding that Dalton M had failed to prove its “pending sale” element, which wiped out the sole basis for the trial court's fee award. Instead, the Court of Appeals awarded fees to Dalton M on an entirely new theory that no party had pleaded or argued to the trial court and that the trial court had never considered: the theory that U.S. Bank had engaged in extensive prelitigation bad faith conduct not amounting to violation or contempt of any court order or ruling, and that this provided a new equitable exception to Washington’s general rule that each party must bear their own costs of suit. The Washington Supreme Court determined the appellate court's decision violated both the Rules of Appellate Procedure (RAPs) and Washington controlling precedent. The Court of Appeals violated these rules: it sua sponte raised a new issue that was more like an unpleaded claim, that new issue was distinct from issues or theories raised before, resolution of that new issue was not necessary to resolve the questions presented about the claims actually pleaded, and resolution of that new issue depended on facts that the parties never had a chance to develop at trial. The Supreme Court therefore reversed the Court of Appeals’ award of attorney fees. View "Dalton M, LLC v. N. Cascade Tr. Servs., Inc." on Justia Law

Plaintiff, an invitee, was allegedly injured by exposure to asbestos on the defendant landowner’s property. The landowner, petitioner ExxonMobil Oil Corporation (Mobil), requested a jury instruction to limit its potential liability for injuries caused by “known or obvious” dangers pursuant to § 343A of Restatement (Second) of Torts (Am. L. Inst. 1965). The trial court declined to give the § 343A instruction, and the jury issued a verdict in favor of the plaintiff. The Court of Appeals affirmed. Mobil argued that the jury should have been instructed on both §§ 343 and 343A of the Restatement as a matter of law. According to Mobil, an instruction on § 343A was necessary to make the jury instructions complete and to allow Mobil to argue its theory of the case. The Washington Supreme Court affirmed: “it is well established that the issuance of jury instructions is ‘within the trial court’s discretion’ and that instructions on ‘a party’s theory of the case’ are not ‘required’ unless they are supported by ‘substantial evidence.’” View "Wright v. 3M Co." on Justia Law

Gary and Jeanette Merritt own four residential properties in Marysville, Washington. Between 2005 and 2007, the Merritts opened five home equity lines of credit (HELOCs), executing five five promissory notes (notes or HELOC agreements) in favor of USAA Federal Savings Bank. The Merritts secured these loans by executing deeds of trust on the properties with USAA as the beneficiary. In November 2012, the Merritts filed for Chapter 7 bankruptcy. The Merritts stopped making their monthly payments on the USAA loans prior to the November 2012 bankruptcy filing. USAA never accelerated any of the loans or acted to foreclose on the properties. In 2020, the Merritts filed four quiet title complaints seeking to remove USAA’s liens on each of the properties. Relying on Edmundson v. Bank of America, NA, 378 P.3d 272 (2016), the Merritts argued that the six-year statute of limitations to enforce the deeds of trust expired six years after February 12, 2013, the day before their bankruptcy discharge. In October 2020, the Merritts moved for summary judgment in each case. In November 2020, the trial court denied each of these motions. In February 2021, USAA moved for summary judgment in each case. USAA argued that the plaintiffs were not entitled to quiet title because the statute of limitations to foreclose on the deeds of trust would not begin to run until the maturity date of each loan, the earliest of which will occur in 2025. The Court of Appeals affirmed the trial court, holding that the the six-year statute of limitations had not begun to run on enforcement of the deeds of trust since none of the loans had yet matured. The issue this case presented for the Washington Supreme Court's review was whether a bankruptcy discharge triggered the statute of limitations to enforce a deed of trust. The Court affirmed the Court of Appeals and the trial court and hold that bankruptcy discharge did not trigger the statute of limitations to enforce a deed of trust. View "Merritt v. USAA Federal Savings Bank" on Justia Law

The property at issue in this case was a residential home that was purchased in 2007 by Shawn and Stephanie Kurtz. The house was located in a subdivision, which required property owners to pay homeowners association (HOA) assessments to petitioner Copper Creek (Marysville) Homeowners Association. If the assessments were not paid, then Copper Creek was entitled to foreclose on its lien. However, Copper Creek’s lien was “subordinate to any security interest perfected by a first deed of trust or mortgage granted in good faith and for fair value upon such Lot.” The Kurtzes stopped paying their HOA assessments and the home loan in varying times in 2010. The Kurtzes (in the process of divorcing) individually filed for bankruptcy. Neither returned to the house, nor did they make any further payments toward their home loan or their HOA assessments. However, there was no attempt to foreclose on the deed of trust. As a result, the house sat vacant for years and fell into disrepair. The Kurtzes remained the property owners of record and HOA assessments continued to accrue in their names. In 2018, Copper Creek recorded a notice of claim of lien for unpaid HOA assessments, fees, costs, and interest. In January 2019, Copper Creek filed a complaint against the Kurtzes seeking foreclosure on the lien and a custodial receiver for the property. The issue this case presented concerned the statute of limitations to foreclose on a deed of trust securing an installment loan after the borrower receives an order of discharge in bankruptcy. As detailed in Merritt v. USAA Federal Savings Bank, No. 100728-1 (Wash. July 20, 2023), the Washington Supreme Court held that a new foreclosure action on the deed of trust accrues with each missed installment payment, even after the borrower’s personal liability is discharged. Actions on written contracts are subject to a six-year statute of limitations. Therefore, the nonjudicial foreclosure action on the deed of trust in this case was timely commenced as to all unpaid installments within the preceding six years, regardless of the borrowers’ bankruptcy discharge orders. In addition, the Court held the trial court properly exercised its discretion to award fees as an equitable sanction for respondents’ litigation misconduct. View "Copper Creek (Marysville) Homeowners Ass'n v. Kurtz" on Justia Law

Alaska Airlines’ (AA’s) Collective Bargaining Agreement with its flight attendants required those flight attendants to schedule vacation days in advance. The Department of Labor & Industries (L&I) argued that RCW 49.12.270 displaced the CBA’s mandatory advance scheduling requirement term without explicitly saying so. AA argued that it did not. The Washington Supreme Court agreed with AA: "It takes more to displace a mandatory CBA term than RCW 49.12.270 contains. In fact, RCW 49.12.270 explicitly preserves non-choice-of-leave terms of the CBA and RCW 49.12.290 bars interpreting RCW 49.12.270 to 'reduce any provision in a [CBA].'" The Court therefore held that RCW 49.12.270 did not displace the advance scheduling requirement of the CBA. View "Alaska Airlines v. Dep't of Labor & Indus." on Justia Law

In this case, three Latino voters from Franklin County, Washington alleged that the county’s system for electing its board of commissioners violated the Washington voting rights act of 2018 (WVRA) by “dilut[ing] the votes of Latino/a voters.” The plaintiffs (respondents on appeal) ultimately settled with defendants Franklin County and the Franklin County Board of Commissioners. The issues on appeal were raised by James Gimenez, a Franklin County voter who was allowed to intervene by the trial court. Immediately after his motion to intervene was granted, Gimenez moved to dismiss the plaintiffs’ claim, arguing that the plaintiffs did not have standing and that the WVRA was facially invalid. The trial court denied Gimenez’s motion to dismiss, and he was not an active participant in the case thereafter. After the trial court entered a final order approving the parties’ settlement, Gimenez appealed directly to the Washington Supreme Court, arguing that in his view, the WVRA protected some Washington voters but excluded others. Based on this interpretation, Gimenez argued that plaintiffs did not have standing because the WVRA did not protect Latinx voters from Franklin County as a matter of law. Gimenez also argued that the WVRA was repealed by implication and was facially unconstitutional because it required local governments to implement electoral systems that favored protected voters and disfavored others on the basis of race. The Supreme Court disagreed with Gimenez's interpretation of the WVRA, and found plaintiffs had stnging and the WVRA was valid and constitutional on its face. View "Portugal v. Franklin County" on Justia Law

The federal district court in Washington State certified a question of law to the Washington Supreme Court. Washington law required group life insurance policies to have an incontestability clause providing that “the validity of the policy shall not be contested, except for nonpayment of premiums, after it has been in force for two years from its date of issue.” The certified question in this case asked whether an insurer could invalidate a life insurance policy after this two-year period on grounds that the policies were void ab initio or never “in force.” New York Life Insurance (NY Life) issued two life insurance policies to Lorenzo Mitchell, naming his nephew, Simon Mitchell, as the sole beneficiary. Lorenzo died more than two years after the policies were issued, and Simon sought to collect on the policies. NY Life became aware that Lorenzo had Down syndrome and lived with significant intellectual disabilities. These facts raised questions about the circumstances under which the policies were issued. NY Life sued Simon in federal district court seeking declaratory relief that the policies were void ab initio under three possible theories: imposter fraud, incapacity, and lack of an insurable interest. The Washington Supreme Court concluded NY Life’s first and third claims were not barred by that provision. “In contrast, lack of capacity does not, on its own, render an insurance contract void; it renders it at most voidable. Because a voidable contract is not void ab initio, we hold the incontestability provision bars NY Life’s second claim.” View "New York Life Ins. Co. v. Mitchell" on Justia Law

The issue this case presented for the Washington Supreme Court’s review centered on whether the Washington Growth Management Hearings Board’s (“Board”) decision to dismiss a timely petition for review was arbitrary and capricious when it found that the petitioner did not substantially comply with the service requirements under WAC 242-03-230(2)(a) without considering prejudice. The City of Kenmore argued and the Court of Appeals held that the Board’s interpretation of substantial compliance derived from Your Snoqualmie Valley v. City of Snoqualmie, No. 11-3-0012 (Cent. Puget Sound Growth Mgmt. Hr’gs Bd. Mar. 8, 2012 (Ord. on Mots.)), was entitled to deference, that the definition did not require a finding of prejudice, and that the Board’s application of the test for substantial compliance to the facts in this case was not an abuse of discretion. The Supreme Court held that the Board’s erroneous interpretation and application of the substantial compliance standard articulated in the prior Board decision constituted arbitrary and capricious action and that the petitioners substantially complied with the service requirements. View "Kenmore MHP LLC v. City Of Kenmore" on Justia Law

This case arose from a car accident in which respondenr Miriam Gonzalez Carmona ran a red light and hit petitioner Kylie Hanson’s car. At the time, Carmona was driving home from an out of town work training, driving a car owned by her employer, Southeast Washington Office of Aging and Long Term Care (SEW ALTC). Hanson filed a complaint against Carmona individually and the SEW ALTC Advisory Council (Advisory Council), under a theory of vicarious liability alleging Carmona was acting within the scope of her employment at the time of the accident. The Advisory Council and Carmona moved for summary judgment because Hanson did not comply with RCW 4.96.020(4)’s presuit notice requirement to sue a government entity or its employees for tortious conduct and the statute of limitations had run. Hanson then amended her complaint to remove all references to the Advisory Council and the allegations that Carmona was acting in the scope of employment. The trial court granted summary judgment in favor of the Advisory Council, but it allowed the case to proceed forward against Carmona in her individual capacity. The Court of Appeals reversed. After review, the Washington Supreme Court affirmed the Court of Appeals, but on different grounds. The Supreme Court held that RCW 4.96.020(4) applied when an employee is acting within the scope of employment but is sued in their individual capacity. "The plain language of the statute encompasses acts within the scope of employment and the government entity, not the employee, is bound by any judgment, even if not technically sued. Accordingly, the legislature can require presuit notices for employee acts committed within the scope of employment." View "Hanson v. Carmona" on Justia Law

CC (mother) and VC (father) were driving through eastern Washington when CC went into premature labor. CC gave birth to AC in a nearby hospital. AC’s umbilical cord tested positive for cannabis. Hospital staff noted that CC was disabled, that CC and VC were homeless, and that they had no baby supplies. The hospital reported its concerns to the State, and the State sent social worker Michelle Woodward to investigate. Woodward contacted CC’s family from whom she heard reports of the couple’s domestic violence, criminal history, and drug use. The State took custody of AC and temporarily placed him with a foster family. The court later found AC dependent at a contested shelter care hearing and ordered CC to participate in random drug testing and an evidence-based parenting program. The court also ordered the State to provide regular, supervised visitation. At about this time, a new social worker, Diana Barnes, was assigned to AC. The court held another dependency hearing where Woodward, Barnes, and parenting therapist Logan Wright testified in support of AC’s dependency. Woodward and Barnes relied extensively on hearsay based largely on secondhand reports and statements rather than their own personal interactions or investigations. None of these reports were submitted into evidence, no records custodian authenticated them, and none of the out-of-court witnesses whose statements were recorded in those reports were called to testify. Counsel for VC made two unsuccessful objections to the hearsay presented through the social workers. The court ultimately found that the parents’ past history with the criminal justice system and Child Protective Services supported dependency, a finding substantially based on hearsay. CC and VC appealed. The Washington Supreme Court held the trial court’s impermissible reliance on hearsay prejudiced the parents and materially affected the outcome of the trial. Accordingly, the Court reversed the trial court’s dependency finding for AC as to both parents. View "In re Dependency of A.C." on Justia Law