HUDSON v. Clifford

• Decision Date: 23 September 2010
• Docket Number: No. 82409-6.,82409-6.
• Citation: 239 P.3d 579
• Court: Washington Supreme Court
• Parties: Lea HUDSON, individually, Petitioner, v. Clifford and “Jane Doe” HAPNER, individually, and as a marital community composed thereof; and Matthew Norton, a Washington corporation, Respondents.

239 P.3d 579

Lea HUDSON, individually, Petitioner,

v.Clifford and “Jane Doe” HAPNER, individually, and as a marital community composed thereof; and Matthew Norton, a Washington corporation, Respondents.

No. 82409-6.

Supreme Court of Washington,En Banc.

Argued Jan. 26, 2010.

Decided Sept. 23, 2010.

Kari Ingrid Lester, Ben F. Barcus & Associates, P.L.L.C., Tacoma, WA, for Petitioner.

Elizabeth Ann Jensen, Attorney at Law, Fircrest, WA, Marilee C. Erickson, Pamela A. Okano, Reed McClure, Seattle, WA, for Respondents.

MADSEN, C.J.

¶ 1 This case began with an automobile accident. The case was referred to mandatory arbitration, and the plaintiff, Lea Hudson, won a monetary award. Respondents (Hapner) requested a trial de novo under the Superior Court Mandatory Arbitration Rules (MAR). Hudson improved her position at trial, receiving a substantially greater award. Hapner successfully appealed, obtaining reversal and instructions for a new trial. Despite appellate success, Hapner moved in the trial court to withdraw his request for trial de novo, end the litigation, and pay the original arbitration award. The trial court denied the motion but the Court of Appeals reversed, holding that the mandatory arbitration rules provide a unilateral right to withdraw a request for trial de novo. We agree that the rules do provide for unilateral withdrawal, but hold that this right must be exercised prior to the start of trial proceedings. Accordingly, we reverse the Court of Appeals and remand for a new trial.

FACTS

¶ 2 On April 6, 1998, Hapner rear-ended Hudson in an automobile accident. Hudson filed a lawsuit and requested arbitration under the mandatory arbitration rules. On November 17, 2000, arbitration resulted in an award of $14,537.97 for Hudson. ¹ Hapner requested a trial de novo. At the conclusion of trial the jury awarded Hudson a significantly higher amount than the arbitration award: $292,298. ² Pursuant to MAR 7.3, the court also granted attorney fees, $38,956.25, costs, $1,624.80, and later added $4,935 in attorney fees in a supplemental judgment.

¶ 3 Hapner appealed, alleging various evidentiary errors related to admissibility of expert witness testimony, portions of Hudson's testimony, and use of a model spine at trial.

¶ 4 In a separate section of her appellate brief, Hudson requested attorney fees under MAR 7.3. She also requested fees and costs on appeal in the event she prevailed.

¶ 5 The Court of Appeals ruled that evidence had been improperly excluded and reversed, remanding the matter for a new trial. Hudson v. Hapner, noted at 126 Wash.App. 1057, 2005 WL 834433, at *3 ( Hudson I ). The court also denied Hudson's attorney fees on appeal, holding that “her claim of reasonable attorney fees at trial must abide the outcome” of the second trial. Id. at *4.

¶ 6 After the Court of Appeals issued its decision, Hapner filed a cost bill requesting $200 in statutory attorney fees and $3,473.25 in costs incurred on appeal. Appellants' Cost Bill on Appeal at 1-2 (Apr. 21, 2005) (citing RAP 14.3). ³ Hapner argued he was “the prevailing party on appeal” and that he was entitled to statutory attorney fees and costs pursuant to RAP 14.3.

¶ 7 Hudson objected to the cost bill, arguing (i) “both parties must bear their own costs,” because Hapner had only prevailed in part, (ii) awarding costs to Hapner violated the purposes of the mandatory arbitration rules, which contain its own attorney fees provisions, and (iii) in the alternative, an award of attorney fees and costs to Hapner under RAP 14.2 should at least “abide the final determination of this action.” Resp't's Objection to Appellants' Cost Bill at 1, 3, 4, 6 (May 2, 2005).

¶ 8 The Court of Appeals awarded costs and attorney fees to Hapner as the substantially prevailing party.

¶ 9 Hudson's subsequent motion for reconsideration (reiterating her request for attorney fees) and her petition for review in this court were both denied.

¶ 10 Following remand, Hapner filed a motion to compel supplemental discovery. Hudson complied, providing additional information about her medical records and billing. Thereafter, Hapner moved to withdraw his request for trial de novo and submitted a draft judgment in which he offered to pay the original arbitration award plus interest, as well as Hudson's attorney fees and costs incurred in proceedings before the superior court. ⁴ Hudson objected and moved to strike. The trial court denied Hapner's motion, and Hapner appealed.

¶ 11 In the second appeal, Hudson requested attorney fees and costs in a separate section of her brief. ⁵ Specifically, she requested attorney fees and costs “[u]pon prevailing in this appeal and pursuant to MAR 7.3 and RAP 18.1(b).” Resp't's Br. at 25-26.

¶ 12 The Court of Appeals reversed the trial court, holding that the mandatory arbitration rules provide a unilateral right to withdraw at any time. The court also denied Hudson's request for attorney fees and costs incurred during this second appeal, since Hudson was not the prevailing party on appeal. Hudson v. Hapner, 146 Wash.App. 280, 187 P.3d 311 (2008) ( Hudson II ). ⁶ Hudson then filed a motion for reconsideration, urging the court to reconsider both of its decisions ( Hudson I and II ) pursuant to RAP 2.5(c)(2) and grant her request for attorney fees incurred during both appeals. This motion was denied.

¶ 13 Hudson petitioned this court for review.

ANALYSIS

¶ 14 On December 7, 2000, Hapner requested a trial de novo. After completing one trial, one appeal, and almost six years of litigation, Hapner sought to unilaterally withdraw his request for a trial de novo. Hudson argues there is no unilateral right to withdraw or, if it exists, it cannot be asserted at this late stage in proceedings. We conclude that Hapner had a unilateral right to withdraw his request. However, we agree with Hudson that his decision came too late.

¶ 15 RCW 7.06.060(1) and the mandatory arbitration rules do not explicitly create a right to withdraw a request for trial de novo. However, MAR 7.3, the attorney fees provision, mentions voluntary withdrawal of such a request.

The court shall assess costs and reasonable attorney fees against a party who appeals the award and fails to improve the party's position on the trial de novo. The court may assess cost and reasonable attorney fees against a party who voluntarily withdraws a request for a trial de novo.

MAR 7.3 (emphasis added).

¶ 16 RCW 7.06.060(1) provides an almost identical statement, but adds that fees and costs may be assessed following voluntary withdrawal “if the withdrawal is not requested in conjunction with the acceptance of an offer of compromise.”

¶ 17 We interpret the mandatory arbitration rules as if they were drafted by the legislature. Wiley v. Rehak, 143 Wash.2d 339, 343, 20 P.3d 404 (2001). Because we avoid interpreting statutes in ways that render provisions meaningless, Svendsen v. Stock, 143 Wash.2d 546, 555, 23 P.3d 455 (2001), the same principle applies here. The language of MAR 7.3 and RCW 7.06.060(1) contemplates that a party may withdraw a request for trial de novo without the consent of the other party. If this occurs, the court has discretion to assess attorney fees and costs. Hudson's argument, that there is no unilateral right to withdraw, would render the attorney fee provisions meaningless.

¶ 18 The Court of Appeals reached the same conclusion in Thomas-Kerr v. Brown, 114 Wash.App. 554, 559 n. 16, 59 P.3d 120 (2002). In that case the defendant withdrew his request for a trial de novo. The plaintiff argued the case should have proceeded to trial. Here, the Court of Appeals reasoned that MAR 7.3 implies that a party has a right to unilaterally withdraw a request for trial de novo and, since the plaintiff had not requested a trial de novo, she was not entitled to a jury trial.

¶ 19 Hudson argues that the Court of Appeals was wrong in Thomas-Kerr because once a case is no longer in arbitration, the civil rules apply, not the mandatory arbitration rules. As authority, Hudson cites MAR 1.3(b)(1), which states that until a case is assigned to the arbitrator, the rules of civil procedure apply. But this provision does not preclude the application of MAR 7.3 after an arbitration is concluded.

¶ 20 The parties agree that the primary goal of mandatory arbitration is to reduce congestion in the courts and delays in hearing cases. Nevers v. Fireside, Inc., 133 Wash.2d 804, 815, 947 P.2d 721 (1997); Haywood v. Aranda, 143 Wash.2d 231, 238, 19 P.3d 406 (2001). We believe that interpreting MAR 7.3 and RCW 7.06.060(1) to permit unilateral withdrawal of a request for trial de novo furthers the intent underlying the rules and the statute. Regardless of the outcome in a particular case, as a general proposition, permitting withdrawals of requests for trial de novo serves the purposes of arbitration because such withdrawals will generally eliminate any further court congestion and delay in many, if not the majority, of these cases. The aim of MAR 7.3 is to “influence [a party's] choices in the hope of reducing court congestion.” Du Do v. Farmer, 127 Wash.App. 180, 187, 110 P.3d 840 (2005). Our decision lends itself to this purpose, regardless of its impact in this particular case.

¶ 21 Accordingly, we hold the mandatory arbitration rules create an implied right to unilateral withdrawal.

¶ 22 Anticipating this holding, Hudson argues that even if the mandatory arbitration rules and chapter 7.06 RCW permit unilateral withdrawal, Hapner's decision comes too late. We agree.

¶ 23 While we hold there is an implied right to unilaterally withdraw a request for trial de novo based on the language in the attorney fees provisions, neither the mandatory arbitration rules nor the statute implies a time limit for exercising the right. Therefore, we look to the language and purpose of the rules and chapter 7.06 RCW to determine the scope of the right.

¶ 24 First, the language of MAR 7.3 indicates that the decision...