Barton v. State, No. 86924–3.

CourtUnited States State Supreme Court of Washington
Writing for the CourtFAIRHURST
Citation178 Wash.2d 193,308 P.3d 597
Docket NumberNo. 86924–3.
Decision Date15 August 2013
PartiesJared K. BARTON, a single man, Respondent, v. STATE of Washington, DEPARTMENT OF TRANSPORTATION, Petitioner, Korrine C. Linvog, individually; Thomas Linvog and Madonna Linvog, husband and wife, Respondents. Skagit County Department of Public Works, Defendant.

178 Wash.2d 193
308 P.3d 597

Jared K. BARTON, a single man, Respondent,
v.
STATE of Washington, DEPARTMENT OF TRANSPORTATION, Petitioner,
Korrine C. Linvog, individually; Thomas Linvog and Madonna Linvog, husband and wife, Respondents.

Skagit County Department of Public Works, Defendant.

No. 86924–3.

Supreme Court of Washington,
En Banc.

Aug. 15, 2013.


[308 P.3d 600]


Michael Patrick Lynch, Office of the Attorney General, Olympia, WA, Michael Augustin Nicefaro Jr., Office of The Attorney General, Seattle, WA, for Petitioner.

Ralph James Brindley, Paul Nicholas Luvera Jr.David Merritt Beninger, Luvera Barnett Brindley Beninger et al., Howard Mark Goodfriend, Smith Goodfriend PS, Brent William Beecher, Hackett Beecher & Hart, Seattle, WA, for Respondent.


George M. Ahrend, Ahrend Albrecht PLLC, Ephrata, WA, Bryan Patrick Harnetiaux, Attorney at Law, Spokane, WA, Amicus Curiae on behalf of Washington State Association.

Stewart Andrew Estes, Keating, Bucklin & McCormack, Inc., P.S., Michael Barr King, Carney Badley Spellman PS, Seattle, WA, Amicus Curiae on behalf of Washington Defense Trial Lawyers.

FAIRHURST, J.

[178 Wash.2d 197]¶ 1 This case concerns a partial settlement agreement made between a plaintiff and some, but not all, defendants in the aftermath of a motorcycle and motor vehicle accident. In the underlying suit, Jared K. Barton sued Korrine C. Linvog, Korrine's 1 parents, Thomas and Madonna Linvog (hereinafter the Linvogs), and the State of Washington. Prior to trial, Barton executed an agreement with the Linvogs. In the agreement, the Linvogs agreed to advance Barton $20,000 in exchange for Barton's promise not to execute on a judgment against them above their insurance policy limits. Neither Barton nor the Linvogs initially disclosed the agreement to the court or the State. After a 16 day trial, the jury awarded Barton $3.6 million and the court entered judgment against the State, Korrine, and the Linvogs. In the process of paying the judgment, the State learned about the agreement. The State moved to vacate the judgment on the grounds of fraud and misrepresentation. The trial court denied the motion to vacate but sanctioned Barton's attorney for failing to disclose the agreement pursuant to discovery requests. We affirm.

FACTS AND PROCEDURAL HISTORY

¶ 2 Korrine was driving her parents' car when she pulled into an intersection and collided with Barton, who was approaching the intersection on his motorcycle with the right of way. Barton suffered serious injuries, including brain damage. Barton sued Korrine for negligence and sued the Linvogs under the family car doctrine. Barton also sued [178 Wash.2d 198]the Washington State Department of Transportation under the theory of negligent highway design and maintenance.

¶ 3 William Spencer, attorney for the Linvogs, offered to settle with Barton for the limits of the Linvogs' insurance policy—$100,000. Ralph Brindley, Barton's attorney, refused the settlement offer because he wanted to maintain joint liability between Korrine, the Linvogs, and the State. However, Brindley apparently told Spencer that his normal policy was not to pursue claims against individuals in excess of their insurance policy limits.

[308 P.3d 601]

¶ 4 Almost two years after the accident occurred, Brindley sought a $20,000 advance from the Linvogs to pay for medical expenses incurred by Barton, who was uninsured. Spencer, seeing an opportunity to cap the liability of his clients in the event of a verdict rendered solely against the Linvogs, drafted a document entitled “Stipulation of Parties Regarding Advanced Payment” (the Stipulation). Clerk's Papers (CP) at 924–25. The Stipulation provided that the Linvogs (through their insurance company Mutual of Enumclaw) would pay Barton $20,000 and such payment would reduce (by $20,000) any future settlement or verdict against the Linvogs. The Stipulation further provided that Barton “would not execute on any judgment” he obtained from the Linvogs in excess of their liability insurance. CP at 925. The Stipulation concluded that “the advance payment does not represent a settlement of any claims Plaintiff Jared Barton has brought in this matter against Defendants.” Id. Brindley signed the Stipulation but it was not signed by anyone else. Spencer and Brindley did not intend the Stipulation to affect Korrine's liability to Barton or the State's contribution rights against Korrine or the Linvogs. Mutual of Enumclaw tendered a $20,000 check to Barton, which he cashed.

¶ 5 Some months earlier, the State had sent discovery requests to Barton and the Linvogs asking whether the parties had entered into any pretrial settlements, releases, or agreements. In their initial responses, both Barton and [178 Wash.2d 199]the Linvogs denied the existence of any such agreement, which was true at the time. After executing the Stipulation, however, neither Brindley nor Spencer thought to supplement their answers to the State's requests.

¶ 6 After a 16 day trial, the jury returned a $3.6 million verdict in Barton's favor. The jury found Korrine 5 percent at fault ($180,000) and the State 95 percent at fault ($3.42 million). Because the court had earlier granted summary judgment on the issue of Barton's comparative fault-finding Barton fault free Korrine, the Linvogs, and the State were jointly and severally liable for Barton's injuries. The court entered judgment against Korrine, the Linvogs, and the State.

¶ 7 The State appealed the trial court's evidentiary rulings and the court's granting of Barton's motion for summary judgment on the issue of comparative fault. But the Court of Appeals affirmed and remanded. Barton v. State, noted at 147 Wash.App. 1021, 2008 WL 4838687, review denied,166 Wash.2d 1012, 210 P.3d 1018 (2009). After remand, Barton sought to collect his judgment from the Linvogs and the State. Mutual of Enumclaw paid Barton the balance of the Linvogs' policy limits—$80,000. Brindley executed a partial satisfaction of judgment in the amount of $100,000. In the course of discussing the payment of the judgment with Spencer and Brindley, the State learned about the Stipulation and obtained a copy of the Stipulation from Spencer.

¶ 8 Soon after learning about the Stipulation, the State filed a motion to vacate the judgment of the trial court and for new trial and for sanctions. The State alleged that Barton and the Linvogs' failure to disclose the Stipulation (1) amounted to fraud and misrepresentation, (2) warranted severe discovery sanctions, (3) constituted a “Mary Carter” 2 agreement that improperly realigned the interests of the parties, and (4) resulted in an unfair trial because (a) [178 Wash.2d 200]the State was unable to cross-examine Korrine to establish bias and (b) the family car doctrine jury instruction inaccurately stated that the parents were liable for Korrine's share of fault. The State deposited its share of the judgment ($3.42 million) in the registry of the court, requesting that the funds be held in trust pending the motion to vacate.

¶ 9 The trial court denied the State's motion to vacate. In a detailed memorandum decision, the trial court found that the failure to disclose the Stipulation did not prejudice the State and did not affect the outcome of the trial. The trial court found discovery sanctions were warranted for Brindley's failure to supplement his interrogatory answers (Spencer was not subject to sanctions). The trial court ordered that Barton would not receive $146,000 in interest that he otherwise would have been entitled to receive (interest

[308 P.3d 602]

that accrued over the nine months between the State's depositing the judgment with the court and the release of the funds to Barton). The State appealed, arguing that the trial court erred by denying the State's motion to vacate. In an unpublished decision, the Court of Appeals affirmed the trial court on all grounds. Barton v. State, noted at 164 Wash.App. 1024, 2011 WL 5175599.

¶ 10 The trial court ordered the State to pay Barton's judgment balance ($80,000). The trial court also entered judgment against Korrine and the Linvogs in favor of the State on its claim for contribution in the amount of $92,632.30 ($80,000 plus interest), plus interest at the judgment rate. The State filed a petition for review, which we granted. Barton v. State, 174 Wash.2d 1008, 278 P.3d 1112 (2012).

ISSUES
¶ 11 A. Does an agreement between a plaintiff and some, but not all, defendants, in which the defendants give the plaintiff an advance payment in exchange for plaintiff's [178 Wash.2d 201]promise not to execute on a judgment in excess of defendants' insurance policy limits, release the defendants so that they are not jointly and severally liable with nonagreeing defendants?
¶ 12 B. Did the Stipulation negate Korrine and the Linvogs' contribution liability?

¶ 13 C. Did the trial court abuse its discretion in its choice of sanctions?

ANALYSIS


A. Does an agreement between a plaintiff and some, but not all, defendants, in which the defendants give the plaintiff an advance payment in exchange for plaintiff's promise not to execute on a judgment in excess of defendants' insurance policy limits, release the defendants so that they are not jointly and severally liable with nonagreeing defendants?

¶ 14 We granted review on the State's question of whether the Stipulation destroyed joint and several liability between the State, Korrine, and the Linvogs. Essentially, the State asks this court to determine whether the Stipulation released the Linvogs within the meaning of RCW 4.22.060 and .070—a question not reached by the trial court or the Court of Appeals. The State argues that the operative legal effect of the Stipulation released the Linvogs, thus destroying joint and several liability and negating the State's contribution rights. The State argues that the trial court's failure to accord the Stipulation its operative legal effect was reversible legal error. After discussing the standard of review and...

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