Brin v. Stutzman
| Decision Date | 02 February 1998 |
| Docket Number | Nos. 39183-6-,39187-9-I,s. 39183-6- |
| Citation | 951 P.2d 291,89 Wn.App. 809 |
| Parties | Ellen R. BRIN, a single person, Respondent, v. Roger James STUTZMAN, a single person, Appellant.17 TIEllen R. BRIN, a single person, Appellant/Cross-Respondent, v. Roger James STUTZMAN, a single man, Respondent/Cross-Appellant. |
| Court | Washington Court of Appeals |
Robert B. Gould, Law Offices of Robert B. Gould, Brian J. Waid, Seattle, for Respondent.
Ellen Brin filed a replevin action against Roger Stutzman to recover several items of personal property. Stutzman asserted a malicious prosecution counterclaim based on Brin's factual allegation that he "engaged in a course of conduct of preying upon women and obtaining from them items of personal [property] and monies under false pretenses." Clerk's Papers at 4. Brin then filed a separate securities action to recover financial losses associated with options trading recommended by Stutzman, seeking damages under RCW 21.20.430(1) for Stutzman's alleged violation of RCW 21.20.010 and damages under an implied private cause of action for his alleged violation of RCW 21.20.020.
Stutzman appeals the replevin judgment contending, among other things, that the trial court erred by dismissing his malicious prosecution counterclaim. Brin appeals the securities judgment, contending that the trial court erred by not holding Stutzman civilly liable under RCW 21.20.430(1) for violating RCW 21.20.010. Stutzman cross-appeals, contending, among other things, that the trial court erred by holding him civilly liable for violating RCW 21.20.020. Because the appeals were linked for oral argument and disposition, and arise out of the same general facts, we find it appropriate to resolve them in a single opinion.
A defendant may only assert a malicious prosecution counterclaim under RCW 4.24.350 based on an improperly filed cause of action as a whole. A favorable civil judgment--absent evidence of fraud, perjury, or other corrupt means--is conclusive evidence of probable cause to initiate and maintain the cause of action even if later reversed on appeal. And probable cause is an absolute defense to a malicious prosecution claim. Brin prevailed at trial on her replevin action as a whole. Therefore, the trial court did not err by dismissing Stutzman's malicious prosecution counterclaim. In addition, we conclude that the trial court did not abuse its discretion by refusing to impose CR 11 sanctions against Brin and that sufficient evidence in the RCW 21.20.430(1) imposes civil liability on persons who violate RCW 21.20.010 if and only if they possess the attributes of a seller. RCW 21.20.020 only governs "investment advisers" as defined by RCW 21.20.005(6). Stutzman did not possess the attributes of a seller and was not an "investment adviser" under RCW 21.20.005(6). Therefore, even assuming that Stutzman engaged in conduct proscribed by the antifraud provisions of RCW 21.20, the trial court erred by awarding Brin restitution of fees paid to Stutzman for his investment advice. Accordingly, we reverse the securities judgment. We conclude, however, that the trial court did not abuse its discretion by refusing to impose CR 11 sanctions against Brin in the securities action.
record supports the trial court's order for replevin of the personal property to Brin. Accordingly, we affirm the replevin judgment.
Brin's husband died in 1987. She inherited their house, subject to a mortgage, and her husband's life insurance proceeds. Brin hired Jay Friedman to invest the proceeds of the life insurance, which at no time exceeded $750,000. Her portfolio under Friedman consisted of very conservative blue chip investments, providing Brin with a predictable stream of income. Following her husband's death, Brin provided financial support to her children and her parents. She did not have a job and did not plan to get one while her parents remained dependent on her for personal care.
In 1991, Brin met Stutzman. They began a social relationship in May 1992, and became sexually intimate in November 1992. Before the relationship began, Stutzman owned a business that he sold for approximately $200,000. Stutzman misrepresented to Brin that he sold the business for $13 million, splitting the proceeds with his former wife. After the sale of his business, Stutzman supported himself, at least in part, by investing in options.
Brin informed Stutzman that she was concerned about her financial situation because her spending exceeded her investment earnings by approximately $2,000 a month. Stutzman told her that she could earn a higher return on her assets if she invested in options. At the time, Brin intended to refinance her home to take advantage of a drop in interest rates and to purchase a new car. Stutzman suggested that she take $100,000 out of the principal in her home to invest in options. Instead, Brin invested $30,000 into an options account, $20,000 of which she obtained from refinancing her house. She selected the options in which she would invest based on Stutzman's advice; in each instance, Stutzman purchased for his own account the same options that he advised Brin to purchase. Brin's stockbroker, acting at her direction, made the actual purchases of the options for her account.
In return for his investment advice, Stutzman suggested that they evenly split the profits that Brin earned on the options she purchased; Brin agreed to this arrangement. Stutzman also informed Brin that he would cover her losses, but he never did. Brin's gains from the options trades totaled $34,112.50; her losses totaled $36,240.87. Brin, in accord with the profit sharing agreement, paid Stutzman a total of $13,360. She also paid her stockbroker $5,529.88 in commissions.
On July 9, 1994, Brin encountered Ruth Rupert outside Stutzman's apartment, and discovered that Rupert was also having a romantic relationship with Stutzman. Brin terminated her relationship with Stutzman. Shortly thereafter, Brin met with Rupert and Joanne Bay, another woman with whom Stutzman was having a romantic relationship, to discuss Stutzman and their relationships with him.
Stutzman retained several items of Brin's personal property after their relationship ended. In a letter dated July 13, 1994, Brin's counsel demanded that Stutzman return thirty-three items of personal property to Brin by July 20, including a 1985 Subaru automobile, a 1988 Subaru
automobile, a computer, a treadmill, and Brin's investment records. Stutzman unsuccessfully attempted to contact Brin's counsel to discuss Brin's demands.
On July 25, 1994, Brin filed a replevin action against Stutzman to recover the 1985 Subaru, the 1988 Subaru, the computer, the treadmill, and her investment records. In addition to pleading the requirements for a replevin action as set forth in Ch. 7.64 RCW, Brin alleged that Stutzman preyed upon women for financial gain: "Upon information and belief, plaintiff believes, and hence alleges, that defendant has engaged in a course of conduct of preying upon women and obtaining from them items of personal possession and monies under false pretenses." Clerk's Papers at 4.
Stutzman claimed ownership of the 1985 Subaru, the 1988 Subaru, the computer, and the treadmill; he returned Brin's investment records. Stutzman then asserted a malicious prosecution counterclaim and moved for CR 11 sanctions based on Brin's factual allegation that he preyed upon women for financial gain.
The trial court ordered replevin of the personal property to Brin but awarded Stutzman $2,400 that he had advanced to Brin for repairs on the 1988 Subaru. Although the court found that Brin failed to prove that Stutzman preyed upon women for financial gain, it nonetheless dismissed Stutzman's malicious prosecution counterclaim with prejudice. The trial court also rejected Stutzman's request for CR 11 sanctions against Brin.
Stutzman appeals the replevin judgment, contending that the trial court erred by dismissing his malicious prosecution counterclaim, ordering replevin of the personal property to Brin, and refusing to impose CR 11 sanctions against Brin. requests attorney fees for defending an appeal she deems frivolous.
Actions for malicious prosecution are not favored in the law. Hanson v. City of Snohomish, 121 Wash.2d 552, 557, 852 P.2d 295 (1993).
To maintain an action for malicious prosecution, the plaintiff must allege and prove (1) that the prosecution claimed to have been malicious was instituted or continued by the defendant; (2) that there was want of probable cause for the institution or continuation of the prosecution; (3) that the proceedings were instituted or continued through malice; (4) that the proceedings terminated on the merits in favor of the plaintiff, or were abandoned; and (5) that the plaintiff suffered injury or damage as a result of the prosecution.
Gem Trading Co. v. Cudahy Corp., 92 Wash.2d 956, 962-63, 603 P.2d 828 (1979) (quoting Peasley v. Puget Sound Tug & Barge Co., 13 Wash.2d 485, 497, 125 P.2d 681 (1942)), aff'd 22 Wash.App. 278, 588 P.2d 1222 (1978).
Although courts continue to list all five elements, 1 the ...
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