Dolan v. King Cnty.
Decision Date | 18 November 2014 |
Docket Number | No. 44982-0-II,44982-0-II |
Court | Washington Court of Appeals |
Parties | KEVIN DOLAN, and a class of similarly situated individuals, Plaintiffs/Respondents, v. KING COUNTY, a political subdivision of the State of Washington, Defendant/Respondent, STATE OF WASHINGTON, DEPARTMENT OF RETIREMENT SYSTEMS, Appellants. |
WORSWICK, P.J. — It is axiomatic that an entity cannot be bound by a contract to which it is not a party except under very limited circumstances. Jones v. Matson, 4 Wn.2d 659, 670, 104 P.2d 591 (1940); Trane Co. v. Brown-Johnston, Inc., 48 Wn. App. 511, 520, 739 P.2d 737 (1987). In this case, the trial court ruled that the Department of Retirement Systems (DRS), was bound to a settlement agreement between Kevin Dolan, as representative of a "Class" of public defenders, and King County. Because DRS was not a party to this contract, it cannot be bound by its terms.
DRS appeals two superior court orders entered in a settled class action lawsuit between Kevin Dolan, as representative of a Class of public defenders, and King County. First, DRS appeals the final approval order, which contains findings, conclusions, and rulings approving a settlement between the Class and the County. Second, DRS appeals the order granting DRS only partial intervention.
DRS argues that (1) the Administrative Procedure Act1 (APA) removed the superior court's original subject matter jurisdiction to enter orders affecting PERS (Public Employees Retirement System), and that the superior court erred by (2) ruling that its final approval order binds DRS, who was not a party to the settlement and (3) denying DRS's motion to intervene as a "full party," on grounds that DRS's motion to intervene was untimely. Because the superior court erred by ruling that a party is bound to a contract to which it is not a party, we reverse the final approval order. Because the superior court erred by basing its partial intervention order on the erroneous legal conclusion that DRS's motion to intervene was untimely, we reverse the partial intervention order. We remand for further proceedings consistent with this opinion.
In 2006, a class of public defenders represented by Kevin Dolan sued King County, alleging that the County wrongfully failed to enroll the Class members in PERS, a retirement program administered by DRS. Following a bench trial, the superior court ruled that the Class members were "employees" entitled to enrollment in PERS. Dolan v. King County, 172 Wn.2d 299, 301, 258 P.3d 20 (2011).
The County petitioned our Supreme Court for direct review of the superior court's ruling. See Dolan, 172 Wn.2d at 310. In 2011, our Supreme Court granted review, affirmed, and remanded the case to the superior court to resolve the remedy issues:
[T]he [class members] are "employees" under RCW 41.40.010(12) and are entitled to be enrolled in the PERS. We affirm the [superior] court and remand to that court for further proceedings regarding remedies.
Dolan, 172 Wn.2d at 301 (emphasis added).
In March of 2012, following our Supreme Court's remand, DRS sent a letter to the superior court requesting to become amicus curiae for the remainder of the proceedings:
[DRS] is not a party to this case and does not seek to protect the interests of either plaintiffs or defendants. It wishes, instead, to serve as amicus in the truest form of that concept, to counsel the court as a friend. We believe that the current parties have differing interests and loyalties than [DRS], and do.not have the background or expertise to identify tax and PERS eligibility related issues for the court.
Clerk's Papers (CP) at 287-89 (footnote omitted). The Class objected to DRS's letter requesting amicus curiae status. On April 4, 2012, following the Class's objection, DRS sent a letter to the parties stating its intent to abandon its request to become amicus curiae:
On December 18, 2012, the Class and the County filed a stipulation announcing that they had reached a tentative settlement. Under the settlement, the County would make retroactive payments to PERS on behalf of the County (as employer) and the Class members (as employees) from the date that the County should have enrolled the Class members. The settlement granted the Class members retroactive benefit eligibility and service credits in PERS from the date that the County should have enrolled the Class members in PERS.
DRS was not a party to and had no involvement in the settlement. But DRS received a copy of the settlement agreement, which contained provisions granting DRS the right to object to the settlement at the reasonableness hearing, where the superior court would hear objections and approve the settlement only if it found the settlement to be "fair, adequate, and reasonable." See Pickett v. Holland Am. Line-Westours, Inc., 145 Wn.2d 178, 188, 35 P.3d 351 (2001). The settlement also purported to give DRS a right to appeal any order approving the settlement.
On March 29, 2013, prior to the reasonableness hearing, the Class and the County moved for preliminary approval of the settlement.2 DRS responded with a motion to shorten time and a motion to present its "amicus curiae" position. CP at 96. DRS's motions requested that thesuperior court wait to give preliminary approval to the settlement until it was modified to address DRS's concerns. On the same day, the superior court denied DRS's two motions and gave preliminary approval to the settlement. Also on the same day, DRS notified the superior court that it intended to file a motion to intervene.
On April 22, 2013, DRS moved for mandatory intervention under CR 24(a)(2). DRS's motion to intervene requested allowance to intervene as a "full party," such that its approval of the settlement would be required before the superior court could approve the settlement. DRS's motion to intervene came before a trial to determine remedy. In fact, because the Class and the County had been in settlement discussions, the trial court had not set any date for that remedy trial.
While the Class and the County did not oppose allowing DRS to intervene to object to the settlement's approval, they did object to DRS intervening as a "full party" with the ability to be a party to the settlement, whose approval is necessary for there to be a binding agreement. The superior court entered an order granting DRS only partial intervention, based on the superior court's legal conclusion that DRS's motion to intervene was untimely:
CP at 312-13 (emphasis added). The superior court elaborated on its reasoning in its oral ruling:
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