American Mobile Homes of Washington, Inc. v. Seattle-First Nat. Bank

• Decision Date: 27 September 1990
• Docket Number: No. 56878-2,SEATTLE-FIRST,56878-2
• Citation: 115 Wn.2d 307,796 P.2d 1276
• Court: Washington Supreme Court
• Parties: AMERICAN MOBILE HOMES OF WASHINGTON, INC., Respondent, v.NATIONAL BANK, Petitioner. En Banc

Page 307

115 Wn.2d 307

796 P.2d 1276

AMERICAN MOBILE HOMES OF WASHINGTON, INC., Respondent, v. SEATTLE-FIRST NATIONAL BANK, Petitioner.

No. 56878-2.

Supreme Court of Washington,

En Banc.

Sept. 27, 1990.

Davis, Wright & Jones, Craig Miller and Donald S. Kunze, Seattle, for petitioner.

Sampson, Wilson & Combs, Inc., P.S., Loren D. Combs and Susan Rae Sampson, Renton, for respondent.

BRACHTENBACH, Justice.

Two questions are presented. May a superior court consolidate two cases where one is pending in another county? May a superior court transfer to itself a case which is pending in another county?

American Mobile Homes of Washington (American) brought an action against Seattle-First National Bank (Seattle-First) in Pierce County Superior Court. Seattle-First sued American and several of American's officers in King County Superior Court. Both actions center around the parties' retail financing agreements which were personally guaranteed by three of American's officers. These guaranties, but not the underlying financing agreements, set venue of any disputes in King County. On American's motion, the Pierce County Superior Court ordered the two cases consolidated and set venue in Pierce County.

We reverse the order of the trial court. We hold that a superior court does not have the power to consolidate cases where one of the cases is not pending before it. A superior court also does not have the power to transfer to itself a case pending in a different county.

We also hold that the "priority of action" rule does not require that these cases be heard in Pierce County. The venue selection clauses together with other equitable considerations require that these cases be heard in King County. Therefore, we also reverse the trial court's denial of Seattle-First's motion to dismiss for improper venue. We remand the case to the Pierce County Superior Court for transfer to King County Superior Court.

The financial relationship between Seattle-First National Bank and American Mobile Homes ¹ dates back to the early 1970's. Seattle-First extended a retail financing line to American and entered into "full-recourse agreements" with American. Pursuant to these agreements Seattle-First purchased installment sales contracts from American, reserving the right to proceed against American when a customer defaulted. Three of American's officers personally guaranteed these full-recourse agreements. Each guaranty agreement contained a provision which stated, "[A]t Bank's option, the venue (location) of any suit to enforce this agreement may be in King County, Washington."

In the fall of 1988 the parties' relationship broke down. American repudiated its obligations under the full-recourse agreements because American believed Seattle-First had wrongfully carried out its obligations under the agreements. On February 10, 1989, Seattle-First sent American a letter demanding that, by the close of business on February 17, 1989, the company honor the recourse obligations then in default.

Instead of responding to Seattle-First's demands, American filed an action against Seattle-First in Pierce County Superior Court on February 17, 1989, claiming relief under contract and tort theories. American seeks to have the recourse provisions declared unenforceable. American alleges that Seattle-First improperly handled the full recourse contracts and breached various promises Seattle-First had made to American. If it was not for these alleged promises, American claims it would not have entered into the full recourse agreements, nor would the guarantors have agreed to guarantee American's performance.

Specifically, American alleges that Seattle-First wrongfully increased American's potential exposure under the recourse provisions by changing its customer practices with respect to credit checking and collection procedures and making statements to customers to encourage their default. American also alleges that Seattle-First improperly administered the accounts, that Seattle-First failed to properly notify American of account defaults, and that Seattle-First established a repossession system in competition with American's business.

Less than 4 hours after American filed its action in Pierce County, Seattle-First filed an action in King County Superior Court against American and several of its officers as guarantors of the full recourse contracts. Seattle-First seeks enforcement of the repudiated agreements and damages resulting from breach of the full recourse agreements. Seattle-First alleges that American refused to respond to its demand letter of February 10, 1989, and instead filed its action in Pierce County as a "preemptive strike" against the action it anticipated Seattle-First would file in King County.

In Pierce County Superior Court American moved to consolidate the two actions and to set venue in Pierce County. Seattle-First opposed this motion and filed a cross motion for dismissal of the Pierce County action on the ground that venue was improper. The trial court granted American's motion, and ordered consolidation of the two cases and set venue in Pierce County. The trial court denied Seattle-First's cross motion for dismissal.

The Court of Appeals granted Seattle-First's motion for discretionary review. This court accepted certification of this case from the Court of Appeals.

We first consider whether a superior court may consolidate a case pending before it with a case which is pending in the superior court of a different county. Next we consider whether a superior court may transfer the venue of a case from another county to itself. Finally, because these cases should be heard together, ² we consider whether venue should be set in Pierce County because it was the county in which suit was first filed or in King County because some but not all of the parties previously agreed to King County venue.

RCW 4.12.030 provides for transfer of venue. However, the trial court did not expressly transfer the King County action pursuant to the venue transfer statute. Instead, the trial court first consolidated the cases pursuant to CR 42(a) and then set venue of the consolidated action in Pierce County. Despite this express procedure set out in the trial court's order, American argues that the court impliedly transferred the King County action to Pierce County before consolidating the cases. Although we are not convinced that the trial court's language supports American's argument, we examine whether the trial court's result could be sustained under either the consolidation or the transfer theory. Therefore, we discuss, in turn, the power of the superior court to do both.

Consolidation

Whether a superior court may consolidate cases pending in different counties is a case of first impression in Washington. In Washington, cases may be consolidated pursuant to CR 42(a), which provides in part:

When actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all the matters in issue in the action; it may order all the actions consolidated;

....

This rule provides the procedure for consolidation of cases "pending before the court." Only if the various counties' superior courts are viewed as a single superior court of the State of Washington would cases pending in superior courts of different counties be "pending before the court," thus authorizing consolidation under CR 42(a). Neither the state constitution nor the statutes creating the superior courts support such a characterization. Both the constitutional provisions and the statutes pertaining to superior courts refer to multiple courts. See Const. art. 4, §§ 1, 5 ("The judicial power of the state shall be vested in ... superior courts ... There shall be in each of the organized counties of this state a superior court ...") (Italics ours.); see also, e.g., RCW 2.08.030 ("The superior courts are courts of record ...."). (Italics ours.) Under the language of the constitution and the statutes, there is no single superior court. Actions pending before the superior courts of different counties are not "pending before the court."

This conclusion is supported by analogous federal law. When a state rule is similar to a parallel federal rule we sometimes look to analysis of the federal rule for guidance. American Discount Corp. v. Saratoga West, Inc., 81 Wash.2d 34, 37, 499 P.2d 869 (1972). Of course we will follow federal analysis only to the extent we find federal reasoning persuasive. Orwick v. Seattle, 103 Wash.2d 249, 255, 692 P.2d 793 (1984). Here, federal cases interpreting Fed.R.Civ.P. 42(a), which is identical to CR 42(a), are instructive.

Federal courts do not allow consolidation of causes of action pending in different federal districts, reasoning that actions pending before different district courts cannot be considered "pending before the court" as required by Fed.R.Civ.P. 42(a). Swindell-Dressler Corp. v. Dumbauld, 308 F.2d 267, 273 (3d Cir.1962); National Equip. Rental, Ltd. v. Fowler, 287 F.2d 43, 47 (2d Cir.1961); Warwick, N.Y. v. New Jersey Dep't of Envtl. Protec., 647 F.Supp 1322, 1324-25 (S.D.N.Y.1986); Popkin v. Eastern Air Lines, Inc., 253 F.Supp. 244, 249 (E.D.Pa.1966); Silver v. Goodman, 234 F.Supp. 415, 416 (D.Conn.1964).

American also cites Const. art. 4, § 6 and State ex rel. Gough v. Superior Court, 137 Wash. 552, 243 P. 11 (1926) as authority for the consolidation. Article 4, section 6 provides only that the "process [of the superior courts] shall extend to all parts of the state." Gough holds only that the process of the superior court "may issue to any county in the state for the purpose of bringing in a party to an action or proceeding." Gough, at 555-56, 243 P. 11. Contrary to American's theory, the "process" used to compel witnesses and parties to submit to a superior court's jurisdiction does not authorize one superior court to compel another superior court to relinquish...