Justia Washington Supreme Court Opinion Summaries

Articles Posted in Contracts
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In August 2004, the Askinses purchased a used car by entering into a retail installment contract with East Sprague Motors & R.V.'s, Inc. for $13,713.44 at an interest rate of 18.95% per year. The contract was contemporaneously assigned to Fireside Bank (formerly known as Fireside Thrift Co.). The Askinses made two years of regular payments, then returned the car to Fireside in an attempt to satisfy the loan. However, the loan was never satisfied. Fireside sold the car for less than the remaining balance owed, leaving the Askinses with an ongoing obligation. Fireside then sued the Askinses for the remaining balance of the loan. The Askinses did not appear, and the court entered a default judgment against them, which included prejudgment interest, costs and attorney fees. Fireside assigned the debt to Cavalry Investments, LLC, in 2012. For the next 8 years, the Askinses were subjected to 14 writs of garnishment and several unsuccessful attempts at garnishment by Fireside and Cavalry. Approximately $10,849.16 was collected over the course of the garnishment proceedings. Fireside and Cavalry did not file any satisfactions of the garnishment judgments or partial satisfactions of the underlying judgment. Cavalry’s final writ of garnishment, obtained on August 3, 2015, stated that the Askinses still owed $11,158.94. This case presented an opportunity for the Washington Supreme Court to discuss the limits of CR60, in cases where a creditor uses the garnishment process to enforce a default judgment against a debtor. The Court held CR 60 may not be used to prosecute an independent cause of action separate and apart from the underlying cause of action in which the original order or judgment was filed. The Court held the trial court properly considered argument and evidence relevant to the questions of what was still owed on the underlying existing judgment and whether that judgment had been satisfied. The trial court correctly ruled that the judgment had been satisfied and ordered that the Askinses were entitled to prospective relief. View "Fireside Bank v. Askins" on Justia Law

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Krista Peoples and Joel Stedman filed Washington Consumer Protection Act ("CPA") suits against their insurance carriers for violating Washington claims-handling regulations and wrongfully denying them personal injury protection (PIP) benefits. The federal district court for the Western District of Washington certified a question of law relating to whether Peoples and Stedman alleged an injury to "business or property" to invoke their respective policies' PIP benefits. Peoples alleged her insurance carrier refused, without any individualized assessment, to pay medical provider bills whenever a computerized review process determined the bill exceeded a predetermined limit, and that the insurance company's failure to investigate or make individualized determinations violated WAC 284-30-330(4) and WAC 284-30-395(1). Due to this practice of algorithmic review, the insurance carrier failed to pay all reasonable medical expenses arising from a covered event, in violation or RCW 48.22.005(7). Stedman alleged his carrier terminate PIP benefits whenever an insured reached "Maximum Medical Improvement," which he alleged violated WAC 284-30-395(1). The Washington Supreme Court held an insurance carrier's wrongful withholding of PIP benefits injures the insured in their "business or property." An insured in these circumstances may recover actual damages, if proved, including out-of-pocket medical expenses that should have been covered, and could seek injunctive relief, such as compelling payment of the benefits to medical providers. Other business or property injuries, apart from wrongful denial of benefits, that are caused by an insurer's mishandling of PIP claims are also cognizable under the CPA. View "Peoples v. United Servs. Auto. Ass'n" on Justia Law

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The United States District Court for the Ninth Circuit certified a question of law to the Washington Supreme Court. Specifically, the federal appellate court asked whether an insurance company was bound by its agent’s written representation (made in a certificate of insurance) that a particular corporation was an additional insured under a given policy. This question arose in a case where: (1) the Ninth Circuit already ruled that the agent acted with apparent authority; but (2) the agent’s representation turned out to be inconsistent with the policy; and (3) the certificate included additional text broadly disclaiming the certificate’s ability to “amend, extend or alter the coverage afforded by” the policy. The Washington Supreme Court responded yes: an insurance company is bound by the representation of its agent in the circumstances presented by the federal court. “Otherwise, an insurance company’s representations would be meaningless and it could mislead without consequence.” View "T-Mobile USA, Inc. v. Selective Ins. Co. of Am." on Justia Law

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John and Michelle Strauss challenged the Court of Appeals decision affirming summary dismissal of their action against Premera Blue Cross, which arose out of the denial of coverage for proton beam therapy (PBT) to treat John's prostate cancer. At issue was whether the Strausses established the existence of a genuine issue of material fact regarding PBT's superiority to intensity-modulated radiation therapy (IMRT), thereby demonstrating that proton beam therapy was "medically necessary" within the meaning of their insurance contract. The Washington Supreme Court determined they did, and therefore reversed the Court of Appeals' decision, and remanded for a jury trial on the disputed facts. View "Strauss v. Premera Blue Cross" on Justia Law

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While driving his truck, Moun Keodalah and an uninsured motorcyclist collided. After Keodalah stopped at a stop sign and began to cross the street, the motorcyclist struck Keodalah's truck. The collision killed the motorcyclist and injured Keodalah. Keodalah's insurance policy with Allstate Insurance Company included underinsured motorist (UIM) coverage. Keodalah requested Allstate pay him his UIM policy limit of $25,000. Allstate refused, offering $1,600 based on its assessment Keodalah was 70% at fault for the accident. After Keodalah asked Allstate to explain its evaluation, Allstate increased its offer to $5,000. Keodalah sued Allstate asserting a UIM claim. The ultimate issue before the Washington Supreme Court in this case was whether RCW 48.01.030 provided a basis for an insured's bad faith and Consumer Protection Act claims against an insurance company's claims adjuster. The Supreme Court held that such claims were not available, and reversed the Court of Appeals. View "Keodalah v. Allstate Ins. Co." on Justia Law

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The federal district court for the Western District of Washington certified a question of state law to the Washington Supreme Court. Money Mailer, LLC and Wade Brewer entered into a franchisor/franchisee relationship. In 2015, Money Mailer sued Brewer alleging breach of contract and for nearly $2 million in damages. Brewer counterclaimed, arguing among other things that Money Mailer violated the Franchise Investment Protection Act (FIPA) by selling him "products and services ... at more than a fair and reasonable price," contrary to RCW 19.100.180(2)(d). Brewer moved for partial summary judgment on the alleged FIPA violation. The district court found undisputed Money Mailer sold printed advertisements to Brewer at twice the price at which Money Mailer obtained and/or produced them. The court determined this markup violated RCW 19.100.180(2)(d) as a matter of law, and on this ground, granted in part Brewer's motion. In concluding Money Mailer's behavior violated the FIPA, the district court relied on two conclusions regarding Washington law: (1) the Court impliedly found that a franchisee may generally rely on the price at which a franchisor purchased a particular good or service to show what the "fair and reasonable price" for that service is; and (2) that selling a franchisee a particular good or service for twice what it cost the franchisor was not a "fair and reasonable price" and violated FlPA as a matter of Washington law. The federal court certified those conclusions as questions, asking the Washington Supreme Court to clarify whether those two rules of law were correct. After review, the Supreme Court answered "no" to both. A "fair and reasonable price" in RCW 19.100.180(2)(d) was a question of fact involving what prudent franchisors and franchisees in similar circumstances would regard as an appropriate price. "The circumstances must take into account the forces of the marked...whether Money Mailer violated the FIPA remains a question of fact to be determined by the district court." View "Money Mailer, LLC v. Brewer" on Justia Law

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Jared Karstetter worked for labor organizations representing King County, Washington corrections officers for over 20 years. In 1987, Karstetter began working directly for the King County Corrections Officers Guild (Guild). Throughout his employment with the Guild, Karstetter operated under successive 5-year contracts that provided for just cause termination. Eventually, Karstetter formed his own law firm and worked primarily for the Guild. He offered services to at least one other client. His employment contracts remained substantially the same. Karstetter's wife, Julie, also worked for the Guild as Karstetter's office assistant. In 2016, the King County ombudsman's office contacted Karstetter regarding a whistleblower complaint concerning parking reimbursements to Guild members. The Guild's vice-president directed Karstetter to cooperate with the investigation. The Guild sought advice from an outside law firm, which advised the Guild to immediately terminate Karstetter. In April 2016, the Guild took this advice and, without providing the remedial options listed in his contract, fired Karstetter. In response, Karstetter and his wife filed suit against the Guild, alleging, among other things, breach of contract and wrongful discharge in violation of public policy. The Guild moved to dismiss the suit for failure to state a claim. The trial court partially granted the motion but allowed Karstetter's claims for breach of contract and wrongful termination to proceed. On interlocutory review, the Court of Appeals reversed and remanded the case, directing the trial court to dismiss Karstetter's remaining breach of contract and wrongful termination claims. The Washington Supreme Court found that “the evolution in legal practice has uniquely affected the in-house attorney employee and generated unique legal and ethical questions unlike anything contemplated by our Rules of Professional Conduct (RPCs).” In this case, the Court found in-house employee attorneys should be treated differently from traditional private practice lawyers under the RPCs. “Solely in the narrow context of in-house employee attorneys, contract and wrongful discharge suits are available, provided these suits can be brought without violence to the integrity of the attorney-client relationship.”Karstetter alleged legally cognizable claims and pleaded sufficient facts to overcome a CR 12(b)(6) motion of dismissal. The Court of Appeals' ruling was reversed. View "Karstetter v. King County Corr. Guild" on Justia Law

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On October 30, 2013, Consuelo Prieto Mariscal was driving her minivan in Pasco, Washington, with her daughter. There were vehicles, including an orange, pickup truck and a van, on the right side of the road. As Prieto passed the orange pickup truck, she heard a noise, felt her van jump a little, and saw a boy, Brayan, lying on the ground. Realizing Brayan was seriously hurt, her daughter called 911. Brayan was taken to a nearby hospital. Prieto and her daughter both told the police they did not see how the accident happened. There were no other eyewitnesses, and though the officer only spoke to Prieto and her daughter, he noted in his report the "bicyclist pulled into the roadway [and] was stuck on the left side and fell to the ground. The passenger side front tire drove over the child['s] right front leg." Brayan gave a number of statements, the most detailed of which related his right shoelace got stuck in the spokes of his bicycle and his right leg was run over when he leaned over to untangle the lace. Monica Diaz Barriga Figueroa, Brayan's mother, retained counsel, and signed a blank personal injury protection (PIP) application form. The English-speaking legal assistant completed the form for the Spanish-speaking Diaz, pulling language of the accident from the police report. The significant difference between the PIP form and Brayan's testimony became a central issue at trial. Prieto's counsel stressed the differences between Diaz's and Brayan's testimony and the PIP form; Diaz's counsel stress the PIP form was based on accounts from people who did not see the accident. At trial, and over Diaz's counsel's objection, Prieto's counsel referenced the PIP form as a statement against interest. Diaz's counsel moved to exclude the PIP form as privileged. The issue before the Washington Supreme Court was whether the form could be considered work product entitled to protection from disclosure. The Court determined that in this instance, where the insured gained the status of insured by statute, rather than contract, the form at issue was privileged. The Court affirmed the Court of Appeals and remanded this matter back to the trial court for a new trial. View "Figueroa v. Mariscal" on Justia Law

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The Ninth Circuit Court of Appeals certified a question of Washington law to the Washington Supreme Court concerning premises liability. Shannon Adamson, an employee of the Alaska Marine Highway System (AMHS), fell approximately 15 feet when the passenger ramp at the Port of Bellingham's (Port) Bellingham Cruise Terminal (BCT) collapsed. The accident caused severe, life-changing injuries. The State of Alaska leased the BCT from the Port, allowing ferries to dock at the BCT and load and unload passengers and their vehicles. The Port elected to not implement an interlock device; when Adamson was operating the passenger ramp, slack was created in some attached cables. When she removed the locking pins, the ramp collapsed, snapped the cables, and Adamson and the ramp fell approximately 15 feet until the ramp caught on the ferry. Adamson and her husband sued the Port in federal court, alleging negligence and seeking damages for medical expenses, loss of wages, pain and suffering and loss of consortium. The federal court determined Adamson was the Port's business invitee; the jury returned a verdict in favor of Adamson and awarded over $16 million in damages. The court found the Port under three separate theories of liability: duty to a business invitee, duty as a landlord, and a promise to perform repairs under the lease contract. The issue presented to the Washington Supreme Court centered on whether a property owner-landlord was liable for injuries that occur on its property when the lessee has exclusive possession at the time of the accident but only priority use under the lease and the landlord has contracted to maintain and repair the premises. The Supreme Court answered the first certified question in the affirmative and consequently, did not address the second question. View "Adamson v. Port of Bellingham" on Justia Law

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The City of Olympia, Washington contracted with NOVA Contracting, Inc. to replace a deteriorating culvert. The contract contained a "notice of protest" provision, which was taken from the Washington Department of Transportation's "standard Specifications for Road, Bridge, and Municipal Construction (2012) manual. NOVA sued the City for breach of the implied covenant of good faith and fair dealing; the City moved to dismiss based in part on NOVA's filature to file a protest first before taking the City to court. The trial court dismissed NOVA's claim, but the Court of Appeals reversed. The Washington Supreme Court has addressed this written notice issue twice before; the Court of Appeals interpreted those holdings, however, as only applying to claims for cost of work performed and not claims for expectancy and consequential damages. The Supreme Court held the two prior cases applied even to claims of expectancy and consequential damages. Therefore, the Court reversed the appellate court and remanded this case for further proceedings. View "NOVA Contracting, Inc. v. City of Olympia" on Justia Law