JZK, Inc. v. Coverdale
| Decision Date | 19 January 2016 |
| Docket Number | No. 46465-9-II,46465-9-II |
| Court | Washington Court of Appeals |
| Parties | JZK, INC., a Washington corporation, Respondent, v. VIRGINIA COVERDALE; JOHN DOES 1-20 and JANE DOES 1-20, also known as ENLIGHTEN ME FREE, Appellant. |
UNPUBLISHED OPINION
WORSWICK, J. — JZK, Inc. obtained an injunction, a judgment for attorney fees, a writ of execution, and an order of contempt against Virginia Coverdale after Coverdale posted a video on the Internet in violation of a nondissemination agreement. Coverdale appeals several superior court orders arguing that the court erred by (1) granting JZK summary judgment and denying Coverdale summary judgment on the issue of the contract's breach, (2) dismissing Coverdale's affirmative defenses and counterclaims, (3) denying Coverdale's motion to amend her answer to the complaint, (4) failing to strike JZK's summary judgment rebuttal brief, and (5) finding Coverdale in contempt of two court orders. We affirm all the superior court's orders except for the order finding Coverdale in contempt. Accordingly, we reverse the contempt order in part and remand for the court to reconsider its contempt decision consistent with this opinion.
FACTS
JZK, Inc. is a for-profit Washington corporation that operates Ramtha's School of Enlightenment (RSE). At RSE, students learn about the teachings of "Ramtha," a 35,000-year- old spiritual entity purportedly channeled by RSE's founder, JZ Knight. Clerk's Papers (CP) at 122. At one point, Knight purported to channel Jesus as well as Ramtha, but she later retracted this claim.
Before students participate in RSE events, they are required to sign "Conditions of Participation" (CoPs). CP at 13. At issue in this case are two CoPs from 2006 and 2007 which Coverdale signed. The 2007 CoP states that the conditions "apply to all future events or activities in which you participate at the School." CP at 37. The CoPs inform the signer that "[t]he information and techniques taught here are for your knowledge only," and that the signer is "licensed to use this information and techniques for your personal use only." CP at 239, 37. The 2006 CoP prohibits the distribution of information "that you teach or learn at the School," and the 2007 CoP prohibits the distribution of "any information or techniques that you learn or are taught at the School." CP at 239, 37. They further prohibit "assist[ing] or facilitat[ing] other persons" in distributing such information. CP at 239, 37. The 2007 CoP also contains a reasonable attorney fees provision for enforcement of the conditions. The CoPs are enforceable "for the life of JZ Knight, plus 21 years." CP at 240, 38.
Beginning in about 2008, RSE began offering "live stream" instruction events over the internet. CP at 1079. These live stream events were available to existing students, who had presumably signed a CoP at an in-person event, and to new students, who signed an online version of a CoP.
Virginia Coverdale was a student at RSE beginning in 2006. She signed the 2006 and 2007 CoPs. In 2008, Coverdale and Knight had a personal dispute when Coverdale began dating Knight's former boyfriend. Knight sent Coverdale an email in 2008 barring Coverdale from allfuture RSE events, but in 2009, Knight allowed Coverdale to return to RSE. Coverdale attended several RSE events during 2009 and 2010, but never signed another CoP.
By 2012, Coverdale became increasingly critical of RSE and Knight, and she had many concerns about the organization. For example, Coverdale was especially concerned about potential fire hazards at RSE, and she was frustrated by how local authorities responded when she raised these concerns. Coverdale was also concerned with the relationship she perceived between local elected officials and RSE.
Coverdale received a flash drive in the mail one day from an anonymous source. The flash drive contained an approximately 11-hour video recording of a live stream event at RSE. It is undisputed that Coverdale did not attend the live stream event from which this video came. Coverdale posted approximately two and a half minutes of this video on the internet. Neither the 11-hour video nor the shorter video Coverdale posted is part of our record on appeal, nor were they filed in the superior court. Coverdale avers that the video portrayed Knight "making derogatory, bigoted, and hate-filled statements about homosexuality, Catholicism, and Jewish people at a February 2012 JZK, Inc. event." Br. of Appellant at 6 (citing CP at 69, 90-91). She also avers that it showed an elected county commissioner attending an RSE event. JZK said only that the video was "taken from a video recordings [sic] depicting JZ Knight channeling Ramtha during the course of a 2012 RSE event."1 CP at 14.
JZK filed for a temporary restraining order (TRO) against Coverdale, and the superior court granted its motion. Later, the superior court granted JZK a preliminary injunction restricting Coverdale from releasing further videos. JZK also filed a complaint alleging breach of contract, and sought injunctive relief to prevent Coverdale from distributing JZK's proprietary material. In response, Coverdale pleaded several affirmative defenses and counterclaims.2 JZK moved for partial summary judgment dismissing Coverdale's counterclaim of misrepresentation and fraud on the grounds that it violated JZK's religious freedom rights. The superior court granted this motion.
The parties agreed to a case schedule, setting the discovery cutoff for June 14, 2013. On April 15, eight weeks before the discovery cutoff, Coverdale moved to amend her answer to JZK's complaint. She sought to add eight affirmative defenses and five counterclaims.3 JZK objected to this proposed amendment, arguing that the necessary discovery would likely delaytrial for over a year. The superior court denied this motion, noting the undesirability of further complicating what began as a simple breach of contract case. It also noted that the proposed new affirmative defenses were sufficiently similar to the original defenses that Coverdale would be able to argue her theories even without the amendment.
On May 17, 2013 JZK filed a motion for partial summary judgment to dismiss Coverdale's affirmative defenses and remaining counterclaims. The superior court granted this motion in part, dismissing all but three affirmative defenses (unconscionability, misrepresentation and fraud, and fraudulent inducement).4 On May 31, both JZK and Coverdale moved for summary judgment. The hearing on this final summary judgment motion was scheduled for Friday, June 28. JZK filed its rebuttal to Coverdale's response to JZK's summary judgment motion on Monday, June 24. Coverdale moved to strike this rebuttal, arguing that it was late and included new argument that addressed Coverdale's defenses, which defenses she raised in her response. The superior court considered this motion, but granted summary judgment in favor of JZK.5 The superior court denied Coverdale's summary judgment motion. The superior court entered judgment for JZK: it granted a permanent injunction and awarded JZK attorney fees and costs in the amount of $600,021.
JZK then requested a writ of execution to partially satisfy its judgment out of Coverdale's personal property—namely, her motor vehicle. The superior court issued this writ, directing the sheriff to deliver possession of Coverdale's vehicle to JZK. The superior court did not issue an order prohibiting Coverdale from transferring or otherwise disposing of her vehicle.
Regarding Coverdale's vehicle, the parties contested whether its value exceeded the $3,250 personal property exemption in RCW 6.15.010(1)(c)(iii). Coverdale moved to quash the writ, claiming the vehicle exempt. The superior court denied Coverdale's motion to quash the writ, instead ordering the parties to follow a procedure to appraise the vehicle.6 The superior court set a deadline for the appraisal.
Coverdale did not follow the superior court's ordered procedure to have the vehicle appraised: instead, she provided JZK a website-generated "Trade Bookout Sheet" which she had obtained through a car dealership. CP at 1999. This sheet estimated her vehicle's value. Subsequently, JZK learned that Coverdale had sold her vehicle to a friend, Kevin O'Sullivan, and distributed the proceeds. JZK sought an order of contempt against both Coverdale and her attorney for violating the writ of execution and the appraisal order. The superior court found only Coverdale in contempt, and found that she intentionally violated both orders. The superior court assessed a $3,000 penalty as sanction for the contempt, but it provided Coverdale three weeks to purge the contempt by repurchasing the vehicle from O'Sullivan or otherwise bringing the vehicle back into the jurisdiction of the court. Coverdale did not do so. Coverdale appeals.
ANALYSIS
Coverdale argues that the superior court erred by failing to strike JZK's rebuttal brief in support of its summary judgment motion because the rebuttal (1) was untimely and (2) included new argument and evidence. We disagree.
We review a superior court's ruling on a motion to strike for an abuse of discretion. King County Fire Prot. Districts No. 16 v. Hous. Auth. of King County, 123 Wn.2d 819, 826, 872 P.2d 516 (1994). A superior court abuses its discretion when its decision is manifestly unreasonable or is based on untenable grounds or reasons. In re Marriage of Littlefield, 133 Wn.2d 39, 46-47, 940 P.2d 1362 (1997).
Coverdale argues that JZK's rebuttal on its summary judgment motion was untimely because it was due on Friday, June 21, but was not filed until Monday, June 24. We hold that the rebuttal was timely filed.
CR 6(a) is a general rule governing how time should be computed under the civil and local rules. It provides that when a deadline is less than seven days away, weekends are not included in the computation. CR 6(a)....
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