Bus. Serv. of America II, Inc. v. Wafertech LLC

• Decision Date: 19 April 2012
• Docket Number: No. 85654–1.,85654–1.
• Citation: 274 P.3d 1025
• Parties: BUSINESS SERVICES OF AMERICA II, INC., Respondent, v. WAFERTECH LLC, Petitioner.
• Court: Washington Supreme Court

274 P.3d 1025

BUSINESS SERVICES OF AMERICA II, INC., Respondent,

v.WAFERTECH LLC, Petitioner.

No. 85654–1.

Supreme Court of Washington, En Banc.

Argued Oct. 22, 2009.Decided April 19, 2012.

Howard Mark Goodfriend, Smith Goodfriend PS, Seattle, WA, James T. McDermott, Aaron D. Goldstein, Ball Janik LLP, Portland, OR, for Petitioner.

Eric Ronald Hultman, Hultman Law Office, Kirkland, WA, for Respondent.

Stewart Andrew Estes, Keating, Bucklin & McCormack, Inc., PS, Daniel Joseph Gunter, Bryan Joseph Case, Riddell Williams, PS, Shilpa Bhatia, Wilson Smith Cochran Dickerson, Seattle, WA, amicus counsel for Washing Defense Trial Lawyers.CHAMBERS, J.

¶ 1 Business Services of America II, Inc. (BSA) sued WaferTech LLC. After the trial court dismissed BSA's claims, BSA appealed. In March 2004, the Court of Appeals affirmed dismissal of all but one claim, which it remanded for trial. After remand, the case lay mostly dormant until June 2009, when BSA noted the case for trial. WaferTech then moved for dismissal. The trial court granted the motion to dismiss, and BSA appealed. BSA argued that the trial court had no discretion to dismiss the case because CR 41(b)(1) states that if a case is noted for trial before a dismissal hearing, it “shall not” be dismissed. The Court of Appeals agreed with BSA and reversed. WaferTech sought review. We affirm the Court of Appeals and remand to the trial court for further proceedings consistent with this opinion.

Facts

¶ 2 BSA and WaferTech were opposing parties in a lawsuit that began in 1998 following a construction contract dispute. BSA was the assignee of claims by a subcontractor who had been terminated from the contract. At trial all of BSA's claims against WaferTech were dismissed, and $856,760.48 in attorney fees were entered against it. The Court of Appeals affirmed dismissal of most claims but reversed with respect to a lien foreclosure claim, which it remanded for trial in 2004. Bus. Servs. of Am. II, Inc. v. WaferTech, LLC, noted at 120 Wash.App. 1042, 2004 WL 444724.

¶ 3 In April 2005, WaferTech filed a satisfaction of judgment with respect to the attorney fees it had been awarded. Then, in July 2006, the trial court issued a “Stipulation and Order for Return of Exhibits.” Neither party responded to the order, and the trial court destroyed the exhibits. Next, in May 2008, BSA's counsel filed a notice of intent to withdraw as BSA's counsel in the case. The notice stated, not entirely accurately, “No trial date is set. This case has been dismissed and judgment entered thereon against Plaintiffs.” Clerk's Papers (CP) at 43.

¶ 4 After remand, BSA went through a receivership and changed ownership several times. Finally, in 2009, the current owner of BSA's claim decided to try the lien claim. BSA noted the case for trial on June 15, 2009. Two months later, WaferTech moved for dismissal. BSA opposed the motion, arguing that CR 41(b)(1) prohibited dismissal because it states that a case shall not be dismissed if it is noted for trial before the hearing on the motion to dismiss. The trial court granted dismissal, finding that it was not constrained by CR 41(b)(1). BSA appealed, and the Court of Appeals reversed the trial court, holding that CR 41(b)(1) limited the court's discretion to dismiss the case. Bus. Servs. of Am. II, Inc. v. WaferTech LLC, 159 Wash.App. 591, 245 P.3d 257 (2011).

Analysis

a. Standard of Review

¶ 5 Interpretation of a court rule is a question of law we review de novo. State v. Schwab, 163 Wash.2d 664, 671, 185 P.3d 1151 (2008) (citing City of College Place v. Staudenmaier, 110 Wash.App. 841, 845, 43 P.3d 43 (2002)). Court rules are interpreted in the same manner as statutes and are construed in accord with their purpose. State v. Wittenbarger, 124 Wash.2d 467, 484, 880 P.2d 517 (1994). The starting point is thus the rule's plain language and ordinary meaning. See State v. J.P., 149 Wash.2d 444, 450, 69 P.3d 318 (2003) (citing Nat'l Elec. Contractors Ass'n v. Riveland, 138 Wash.2d 9, 19, 978 P.2d 481 (1999)).

b. Dismissal under CR 41(b)(1)

¶ 6 The dismissal of an action for want of prosecution is in the discretion of the court in the absence of a guiding statute or rule of court. Snohomish County v. Thorp Meats, 110 Wash.2d 163, 167, 750 P.2d 1251 (1988) (citing State ex rel. Dawson v. Superior Court, 16 Wash.2d 300, 304, 133 P.2d 285 (1943)). However, dismissal is mandatory if CR 41(b)(1) applies. Id. at 167, 168–69, 750 P.2d 1251. The rule states in full:

Any civil action shall be dismissed, without prejudice, for want of prosecution whenever the plaintiff, counterclaimant, cross claimant, or third party plaintiff neglects to note the action for trial or hearing within 1 year after any issue of law or fact has been joined, unless the failure to bring the same on for trial or hearing was caused by the party who makes the motion to dismiss. Such motion to dismiss shall come on for hearing only after 10 days' notice to the adverse party. If the case is noted for trial before the hearing on the motion, the action shall not be dismissed.

CR 41(b)(1) (emphasis added). There is only one exception to the mandatory application of the italicized portion of the rule: “Where dilatoriness of a type not described by CR 41(b)(1) is involved, a trial court's inherent discretion to dismiss an action for want of prosecution remains.” Thorp Meats, 110 Wash.2d at 169, 750 P.2d 1251 (citing Gott v. Woody, 11 Wash.App. 504, 508, 524 P.2d 452 (1974)). Such dilatoriness “refers to unacceptable litigation practices other than mere inaction.” Wallace v. Evans, 131 Wash.2d 572, 577, 934 P.2d 662 (1997).

¶ 7 The sole question is whether CR 41(b)(1) applies in this case to limit the trial court's inherent discretion to dismiss. BSA's argument is straightforward. It claims that it noted the case before the hearing on the motion to dismiss, and therefore the case cannot be dismissed. See CR 41(b)(1). WaferTech makes two arguments in response. First, it asserts that this case falls under the “unacceptable litigation practices other than mere inaction” exception to the rule in CR 41(b)(1). Wallace, 131 Wash.2d at 577, 934 P.2d 662. Specifically, it relies on the lack of any response from BSA to the trial court's stipulation and order for return of exhibits and the notice of withdrawal from BSA's counsel, sent to both the trial court and WaferTech, stating that the case had been dismissed. WaferTech claims that these two instances amount to conduct other than mere inaction, and thus the court was within its discretion to dismiss the action. See id.

¶ 8 Second, WaferTech argues that CR 41(b)(1) does not apply on remand. It claims that CR 41(b)(1), by its terms, applies when a case is not noted “within 1 year after any issue of law or fact has been joined” and asserts this requirement is rendered inoperative when a case has been noted, tried, appealed, and remanded in part. It also points out that no case has ever applied CR 41(b)(1) to limit, on remand from appeal, a court's inherent authority to dismiss a case.

¶ 9 The trial court in making its decision to dismiss the case primarily relied upon WaferTech's second argument. The following is the language at issue in this case: “If the case is noted for trial before the hearing on the motion, the action shall not be dismissed.” CR 41(b)(1). This court addressed the purpose behind that language in Thorp Meats:

This sentence was promulgated to encourage cases to be heard on the merits, the courts recognizing that involuntary dismissal for want of prosecution “is punitive or administrative in nature and every reasonable opportunity should be afforded to permit the parties to reach the merits of the controversy.” Thus, the notice of trial setting interposed after the motion to dismiss and before the hearing on the motion is the exception to what would otherwise be a mandatory dismissal under CR 41(b)(1).

Thorp Meats, 110 Wash.2d at 168, 750 P.2d 1251 (footnote omitted) (quoting Yellam v. Woerner, 77 Wash.2d 604, 608, 464 P.2d 947 (1970)). Relying on the statement that the purpose of the rule is to encourage cases to be heard on the merits, WaferTech asserts that when issues of fact and law are joined in a case, and the case is noted for trial, tried on the merits, appealed, and remanded for further trial, the concerns underlying the promulgation of CR 41(b)(1) are no longer relevant. According to WaferTech, under these circumstances the rule's purpose has been served because the merits of the controversy have already been reached at least once. WaferTech also contends that CR 41(b)(1) by its terms applies only when a case is not noted within a year after joinder of any issues and so cannot apply to a case that was already noted and tried, appealed, and then remanded. See CR 41(b)(1). Thus, WaferTech argues, a trial court regains its discretion to dismiss at the point of remand.

¶ 10 As the Court of Appeals pointed out, there is no authority whatsoever for the claim that the rule does not apply after remand. Bus. Servs., 159 Wash.App. at 598, 245 P.3d 257. Moreover, we have held under the predecessor rule to CR 41(b)(1) that an issue of law or fact is joined when, among other circumstances, a case is remanded from an appeal. State ex rel. Wash. Water Power Co. v. Superior Court, 41 Wash.2d 484, 490, 250 P.2d 536 (1952) (citing Rule 3, former Rules of Pleading, Practice and Procedure, 34A Wash.2d 69 (1938)). There is no reason to treat CR 41(b)(1) differently, and we hold CR 41(b)(1) applies to cases on remand.

¶ 11 WaferTech's other argument relies on the solitary exception to the ordinarily strict application of CR 41(b)(1). In Wallace, 131 Wash.2d at 577, 934 P.2d 662, as mentioned, this court found that a trial court has discretion to ignore the prohibition of dismissal under CR 41(b)(1) where delay was caused by “unacceptable litigation practices other than mere inaction.” WaferTech argues BSA went beyond “mere inaction” by ...