3320 MLK, LLC v. Helsell Fetterman, LLP

• Decision Date: 19 July 2021
• Docket Number: 81406-1-I
• Court: Washington Court of Appeals
• Parties: 3320 MLK, LLC, a Washington limited liability company; CARL RAYMOND HAGLUND, a single person; COLUMBIA CITY CONDOS #1, LLC, a Washington limited liability company; 4532 S. HENDERSON, LLC, a Washington limited liability company; 2023 24th AVE, LLC, a Washington limited liability company; CLAREMONT PROPERTIES, LLC, a Washington limited liability company; COLUMBIA CITY CONDOS-OWAHE, LLC, a Washington limited liability company; COLUMBIA CITY CONDOS-KENNY, LLC, a Washington limited liability company; COLUMBIA CITY CONDOS-CORAL REEF #1, LLC, a Washington limited liability company; COLUMBIA CITY CONDOS-CORAL REEF #2, LLC, a Washington limited liability company; MY BIG CHINESE ROOSTER INVESTMENT COMPANY, LLC, a Washington limited liability company; BIG ROOSTER INVESTMENTS, LLC, a Washington limited liability company; COLUMBIA MODERN LIVING, LLC, a Washington limited liability company; I STREET LLC, a Washington limited liability company; SEWARD PARK, LLC, a Washington limited liability company; 2910 S. BYRON, LLC, a Washington limited liability company; 3320 MICRO, LLC, a Washington limited liability company; 3948 FARRAR, LLC, a Washington limited liability company; 5949 36, LLC, a Washington limited liability company; and 5002 ROSE, LLC, a Washington limited liability company, Appellants, v. HELSELL FETTERMAN, LLP, a Washington limited liability partnership; and BRANDON S. GRIBBEN, individually and on behalf of the marital community comprised of BRANDON GRIBBEN and JANE DOE GRIBBEN, Respondents.

3320 MLK, LLC, a Washington limited liability company; CARL RAYMOND HAGLUND, a single person; COLUMBIA CITY CONDOS #1, LLC, a Washington limited liability company; 4532 S. HENDERSON, LLC, a Washington limited liability company; 2023 24th AVE, LLC, a Washington limited liability company; CLAREMONT PROPERTIES, LLC, a Washington limited liability company; COLUMBIA CITY CONDOS-OWAHE, LLC, a Washington limited liability company; COLUMBIA CITY CONDOS-KENNY, LLC, a Washington limited liability company; COLUMBIA CITY CONDOS-CORAL REEF #1, LLC, a Washington limited liability company; COLUMBIA CITY CONDOS-CORAL REEF #2, LLC, a Washington limited liability company; MY BIG CHINESE ROOSTER INVESTMENT COMPANY, LLC, a Washington limited liability company; BIG ROOSTER INVESTMENTS, LLC, a Washington limited liability company; COLUMBIA MODERN LIVING, LLC, a Washington limited liability company; I STREET LLC, a Washington limited liability company; SEWARD PARK, LLC, a Washington limited liability company; 2910 S. BYRON, LLC, a Washington limited liability company; 3320 MICRO, LLC, a Washington limited liability company; 3948 FARRAR, LLC, a Washington limited liability company; 5949 36, LLC, a Washington limited liability company; and 5002 ROSE, LLC, a Washington limited liability company, Appellants, v. HELSELL FETTERMAN, LLP, a Washington limited liability partnership; and BRANDON S. GRIBBEN, individually and on behalf of the marital community comprised of BRANDON GRIBBEN and JANE DOE GRIBBEN, Respondents.

No. 81406-1-I

Court of Appeals of Washington, Division 1

July 19, 2021

UNPUBLISHED OPINION

Appelwick, J.

Haglund appeals the summary judgment dismissal of his claims for breach of fiduciary duty and legal malpractice against Gribben and Helsell Fetterman. Haglund argues Gribben breached the duty of care owed to Haglund as a client by providing inadequate counsel at trial and failing to timely file a supersedeas bond posttrial. We affirm.

FACTS

On April 11, 2016, in the underlying litigation to this matter ^[1] Pacific 5000 LLC sued Carl Haglund and his company, 3320 MLK LLC.^[2] Pacific 5000 was the debtor on a bank loan Haglund purchased. Pacific 5000 alleged that after it stopped making loan payments in furtherance of an agreement to sell the building to Haglund, he reneged and foreclosed on the loan. It further alleged that Haglund engaged in illegal acts to manipulate the bid price, including trespassing onto the property and committing intentional waste of the electrical system.

On October 14, 2016, Haglund's initial attorney withdrew from the case. On October 31, 2016, Brandon Gribben of Helsell Fetterman LLP, entered his formal appearance as counsel for Haglund. This was also the due date for Haglund's primary witness disclosures. That afternoon Gribben sent an e-mail to opposing counsel stating,

Attached is a courtesy copy of my notice of appearance, which will be filed with the court shortly. I noticed that the disclosure of primary witnesses is due today and I am requesting a one week extension while I get caught up to speed on the case. I hope to be in touch early next week once I have had a chance to review the documents.

On November 2, 2016, opposing counsel rejected the request. Gribben also moved twice to continue the trial date, but was unsuccessful in both efforts. On November 23, 2016, Gribben filed the now tardy primary witness disclosure. In January and February 2017, Haglund informed Gribben of several new witnesses.

On March 3, 2017, the trial court entered partial summary judgment in favor of Pacific 5000 on its claim of intentional trespass. The issue of the amount of damages proximately caused by the trespass remained for trial.

On March 30, 2017, Pacific 5000 filed a motion in limine addressing several issues, including the exclusion of 15 defense witnesses as not timely disclosed. The court excluded 10 of the 15 witnesses. The trial court's order on motions in limine also excluded many of the exhibits Haglund offered. It ruled the documents were irrelevant, misleading and/or unfairly prejudicial.

On April 19, 2017, Pacific 5000 filed its final amended complaint that included claims of fraud, breach of contract violation of the Consumer Protect Act, ch. 19.86 RCW, slander of title, declaratory judgment, restitution/unjust enrichment, interference with contractual relations, civil conspiracy, trespass, and waste. The case proceeded to trial.

On June 6, 2017, the trial court sent the parties an outline of the court's decision. On June 29, 2017, the trial court entered findings of fact and conclusions of law and a judgment in favor of Pacific 5000 and against Haglund in the amount of $1, 148, 034.43. It concluded that Pacific 5000 was damaged in a complete loss of its $313, 447.21 equity in the property under multiple theories. The court awarded treble the damages for the trespass, under RCW 4.24.630, and for restraint of trade, under RCW 19.86.030, and awarded attorney fees. The court agreed with Pacific 5000's analysis concerning its other causes of action. However, the court did not allow double recovery under multiple legal theories and stated that its alternative damages for loss of equity measured from the foreclosure sale would be less than the trespass damages.

On Friday July 7, 2017, Haglund obtained a supersedeas bond in the amount of $1, 525, 000.00 to prevent execution on judgment.^[3] Later that day, he delivered the supersedeas bond to Gribben to file with the Pierce County Superior Court. Gribben acknowledged receipt of the bond in an e-mail to Haglund and informed him that he would file the bond "first thing Monday morning." Haglund believed the bond needed to be filed either July 7, 2017 or by Monday July 10, 2017 to avoid execution of the judgment. Gribben admits that he understood that if a bond did not get filed, execution on the judgment could proceed. Gribben did not file the supersedeas bond on Monday, as promised.

On July 10, 2017 Gribben filed a motion for reconsideration. In this motion, Gribben argued that Haglund had not caused the vandalism to Pacific 5000's building. He argued there was newly discovered evidence demonstrating that Haglund did not damage the electrical wiring to the building or otherwise cause waste. Gribben presented the court with a declaration from Haglund and documentation to show that the vandalism predated Haglund's trespass onto the site.

The next day, on July 11, 2017, Pacific 5000 obtained a charging order against 17 of Haglund's limited liability companies (LLCs). In this order, the court found the judgment against Haglund was unpaid. It restricted the business activities of the LLCs owned by Haglund as follows:

[U]ntil such judgment is satisfied in full, including interests [sic] and costs, that none of said limited liability companies, their members or their managers shall undertake, enter into, or consummate any sale, encumbrance, hypothecation or modification of any membership interest of the Judgment Debtors without court approval or approval of the Judgment Creditors herein.

And, it ordered,

[E]ach of the companies affected by this order are directed to pay any and all distributions, credits, draws or payments owing by such companies to either of the Judgment Debtors into the registry of the court.

Gribben filed the supersedeas bond with the trial court on July 12, one day after the charging order went into effect. Gribben contacted opposing counsel to confirm that there was a stay on enforcement of the judgment. Gribben informed Haglund that opposing counsel agreed to stay the enforcement of the judgment.^[4]

On August 2, 2017, Haglund called another attorney at Helsell Fetterman and left a voicemail message indicating he would be filing a malpractice claim against Gribben. The managing partner at Helsell Fetterman contacted Haglund on August 3, 2017, disclosing that Haglund's allegation of malpractice created a conflict of interest and letting him know, if he did not waive the conflict, the firm would have to withdraw as his attorneys in the lawsuit. On August 16, 2017, Stephanie Bloomfield and Robert Wilke, attorneys with Gordon Thomas Honeywell LLP, substituted into the case to replace Gribben as Haglund's counsel.

On August 17, 2017, Haglund, through Bloomfield, moved to set aside the judgment under CR 60. Haglund alleged that Gribben had been grossly negligent in failing to produce "key documents and witnesses." He argued that had these records been produced, they would have corroborated his assertion the premises were vandalized prior to his trespass. The motion was set to be heard along with the motion for reconsideration.

On August 25, 2017, the court denied Haglund's July 10 motion for reconsideration, finding that Haglund's declaration did not contain new evidence not in his possession before trial. It also concluded that "if the evidence in Mr. Haglund's declaration were admitted, it would not alter the court's findings of fact and conclusions of law."

On September 14, 2017, Haglund appealed a number of orders and the final judgment in the matter.

In Haglund's motion to vacate the charging order, dated February 14, 2018, he alleged it was interfering with real estate transactions involving his other LLCs. Haglund also contended that the title insurer was unwilling to deposit funds from these transactions into the registry of the court, even though the charging order provided that it must do so.

On March 26, 2018, the parties stipulated to discharging the supersedeas bond contingent on Haglund's agreement to satisfy the judgment and to dismiss his appeal. On April 10, 2018, counsel for the parties stipulated that all the issues in this matter were fully settled and the appeal should be dismissed.

Haglund filed suit for legal...