Allianceone Receivables Mgmt., Inc. v. Lewis

• Decision Date: 08 May 2014
• Docket Number: No. 87445–0.,87445–0.
• Citation: 180 Wash.2d 389,325 P.3d 904
• Court: Washington Supreme Court
• Parties: ALLIANCEONE RECEIVABLES MANAGEMENT, INC, Respondent, v. William Carl LEWIS, Jr., and Jane Doe, and Marital Community, Appellants.

180 Wash.2d 389

325 P.3d 904

ALLIANCEONE RECEIVABLES MANAGEMENT, INC, Respondent,

v.William Carl LEWIS, Jr., and Jane Doe, and Marital Community, Appellants.

No. 87445–0.

Supreme Court of Washington, En Banc.

May 8, 2014.

Michael David Kinkley, Michael D. Kinkley PS, Lara A. Wilcox, Kirkpatrick & Startzel, P.S., Kirk David Miller, Kirk D. Miller, P.S., Spokane, WA, for Appellant.

K.C. Hawthorne, Kevin Underwood, Alliance One Inc, Gig Harbor, WA, Philip Albert Talmadge, Talmadge/Fitzpatrick, Tukwila, WA, Sidney Charlotte Tribe, Talmadge/Fitzpatrick, Seattle, WA, for Respondent.

FAIRHURST, J.

¶ 1 AllianceOne Receivables Management Inc. instituted a collections action against William Carl Lewis Jr. and then voluntarily dismissed it. Lewis claims that he is entitled to attorney fees as the “prevailing party” under RCW 4.84.250 and .270 since under RCW 4.84.270 a defendant is a prevailing party when the plaintiff “recovers nothing.” The district court denied Lewis' fee request, holding that there is no prevailing party for the purposes of an award of attorney fees when the plaintiff voluntarily dismisses the action. We affirm and hold that there must be a final judgment before attorney fees can be made available to the prevailing party under RCW 4.84.250 and .270. When a defendant requests fees under these statutes, the court should apply a three-factor test: (1) the damages sought must be equal to or less than $10,000, (2) there must be an entry of judgment, and (3) the defendant must be deemed the prevailing party. Here, there was no judgment because AllianceOne voluntarily dismissed its claim against Lewis. Without a judgment, there is no prevailing party. Lewis was not entitled to attorney fees upon dismissal at the district court, nor is he entitled to an award of attorney fees on appeal.

I. FACTUAL AND PROCEDURAL HISTORY

¶ 2 The facts in this case are generally not disputed. AllianceOne filed a collection suit against Lewis for three low dollar claims totaling $550.77, plus attorney fees. AllianceOne voluntarily dismissed two of the three claims, leaving one remaining claim totaling $272.67, which Lewis claimed he had already paid in full. After further proceedings, AllianceOne filed a motion for voluntary dismissal of the remaining claim without prejudice and without costs to either party. Lewis did not object to the dismissal of the claim but, since he had incurred attorney fees in the matter, he objected to dismissing the claim without costs. Lewis argued that he was the “prevailing party” under RCW 4.84.250 and .270 because AllianceOne recovered nothing in the suit.

¶ 3 The district court initially denied Lewis' request for attorney fees, relying on our decision in Wachovia SBA Lending, Inc. v. Kraft, 165 Wash.2d 481, 494, 200 P.3d 683 (2009), where we held that a final judgment must be entered for a defendant to be a prevailing party under RCW 4.84.330. Upon reconsideration, the district court affirmed the denial on different grounds, noting that since Wachovia interpreted a different statute than the one at issue in this case, it was not controlling. The district court noted that there is a split of authority in the Court of Appeals on this issue but it chose to follow Cork Insulation Sales Co. v. Torgeson, 54 Wash.App. 702, 775 P.2d 970 (1989), and Beckman v. Wilcox, 96 Wash.App. 355, 979 P.2d 890 (1999) from Divisions Two and Three. The district court held that “a CRLJ 41 voluntary dismissal does not effectuate costs and attorney fees.” Second Am. Designation of Clerk's Papers (Decision on Recons. Mot. (May 4, 2012) at 4). In light of the split authority, we granted Lewis' motion for direct review. We affirm the district court.

II. ISSUES

¶ 4 1. Whether a defendant can be a prevailing party under RCW 4.84.250 and .270 when a plaintiff voluntarily dismisses the case.

¶ 5 2. Whether either party is entitled to attorney fees on appeal under RCW 4.84.290.

III. ANALYSIS

A. “Prevailing party” under RCW 4.84.250 and .270

¶ 6 The meaning of a statute is a question of law reviewed de novo.¹State v. Breazeale, 144 Wash.2d 829, 837, 31 P.3d 1155 (2001); State v. J.M., 144 Wash.2d 472, 480, 28 P.3d 720 (2001). The court's objective is to ascertain and carry out the legislature's intent. J.M., 144 Wash.2d at 480, 28 P.3d 720. The starting point is always the statute's plain language, which may be discerned “ ‘from all that the Legislature has said in the statute and related statutes which disclose legislative intent about the provision in question.’ ” State v. J.P., 149 Wash.2d 444, 450, 69 P.3d 318 (2003) (quoting Dep't of Ecology v. Campbell & Gwinn, LLC, 146 Wash.2d 1, 11, 43 P.3d 4 (2002)). The court considers a statute within the context of the entire statutory scheme to determine the plain meaning. Williams v. Tilaye, 174 Wash.2d 57, 63, 272 P.3d 235 (2012) (citing Campbell & Gwinn, 146 Wash.2d at 11–12, 43 P.3d 4);see also ITT Rayonier, Inc. v. Dalman, 122 Wash.2d 801, 807, 863 P.2d 64 (1993) (A term in a regulation should not be read in isolation but, rather, within the context of the regulatory and statutory scheme as a whole; statutory provisions must be read in their entirety and construed together, not piecemeal.).

1. Attorney fees statutes in small claims

¶ 7 As a general rule in Washington, each party must bear its own attorney fees in civil actions. Cosmopolitan Eng'g Grp., Inc. v. Ondeo Degremont, Inc., 159 Wash.2d 292, 296, 149 P.3d 666 (2006). However, the legislature has carved out certain exceptions to this general rule. Williams, 174 Wash.2d at 63, 272 P.3d 235. “In the context of civil actions, the question of costs and attorney fees are dealt with in a series of provisions under chapter 4.84 RCW.” Wachovia, 165 Wash.2d at 488, 200 P.3d 683. These provisions generally award attorney fees to the prevailing party in an action, but the term “prevailing party” is not defined in the same manner in every statute. Id. Whether an individual is a prevailing party after voluntary dismissal turns on whether the claimant meets the conditions of the specific statute that authorizes the fees. Beckman, 96 Wash.App. at 362, 979 P.2d 890.

¶ 8 Courts have long approached RCW 4.84.250–.300 as a statutory scheme where each statute is given force in the context of related rules. See, e.g., Davy v. Moss, 19 Wash.App. 32, 33–34, 573 P.2d 826 (1978) (citing four provisions in their entirety to clarify the meaning of “action for damages” in chapter 4.84 RCW); Valley v. Hand, 38 Wash.App. 170, 684 P.2d 1341 (1984) (reading four provisions to determine prevailing party on appeal), overruled on other grounds by Williams, 174 Wash.2d 57, 272 P.3d 235;Beckmann v. Spokane Transit Auth., 107 Wash.2d 785, 733 P.2d 960 (1987) (reading three statutory provisions to determine whether pleading notice is required); Hertz v. Riebe, 86 Wash.App. 102, 107, 936 P.2d 24 (1997) (reading RCW 4.84.290 “in the broader context of the statutory scheme”); Hanson v. Estell, 100 Wash.App. 281, 997 P.2d 426 (2000) (reading three statutory provisions to clarify notification rule for settlement offers); LRS Elec. Controls, Inc. v. Hamre Constr., Inc., 153 Wash.2d 731, 107 P.3d 721 (2005) (reading five statutory provisions to award attorney fees on appeal to defendant after summary judgment); Williams, 174 Wash.2d at 61–62, 272 P.3d 235 (reading four statutory provisions in arbitration case).

¶ 9 RCW 4.84.250 is the starting point for determining which party, if any, is entitled to attorney fees in small claim actions. The prevailing party in a small claims action may request attorney fees “[n]otwithstanding any other provisions of chapter 4.84 RCW and RCW 12.20.060.” RCW 4.84.250. RCW 4.84.260 states that a plaintiff is the “prevailing party” and eligible for attorney fees when “the recovery, exclusive of costs, is as much as or more than the amount offered in settlement by the plaintiff.” (Emphasis added.) Under RCW 4.84.270, a defendant receives fees “if the plaintiff ... recovers nothing, or if the recovery, exclusive of costs, is the same or less than the amount offered in settlement by the defendant.” (Emphasis added.) Under RCW 4.84.280, settlement offers must be made at least 10 days before a trial begins and may not be conveyed to the judge until after final judgment is rendered. Only after the judgment can a court assess whether the plaintiff or defendant meets the definition of a “prevailing party” by examining a recovery after judgment and comparing it to settlement offers.² This contextual interpretation presents a plain language reading of the complete statutory scheme and is a logical analysis of a statute designed to promote settlement and avoid trials.

2. Plain language reading of “recovers nothing”

¶ 10 The meaning of the phrase “recovers nothing” is critical to interpreting these statutes. “In the absence of a specific statutory definition, words in a statute are given their common law or ordinary meaning.” State v. Chester, 133 Wash.2d 15, 22, 940 P.2d 1374 (1997). To determine the plain meaning of a term undefined by statute, the court first looks at the dictionary definition. State v. Kintz, 169 Wash.2d 537, 547, 238 P.3d 470 (2010). Black's Law Dictionary defines “recover” in full as:

1. To get back or regain in full or in equivalence . 2. To obtain by a judgment or other legal process plaintiff recovered punitive damages in the lawsuit>. 3. To obtain (a judgment) in one's favor plaintiff recovered a judgment against the defendant>. 4. To obtain damages or other relief; to succeed in a lawsuit or other legal proceeding defendant argued that the plaintiff should not be allowed to recover for his own negligence>.Black's Law Dictionary 1389 (9th ed.2009). The entirety of this definition indicates that “recover” is more often used in connection with a final judgment.

¶ 11 Statutory language must be interpreted in context, not in isolation. When determining the plain meaning of a statute, the court considers the...