Karstetter v. King Cnty. Corr. Guild
| Decision Date | 29 August 2022 |
| Docket Number | 83426-6-I |
| Parties | JARED KARSTETTER and JULIE KARSTETTER, his spouse, who together form a marital community, Appellants, v. KING COUNTY CORRECTIONS GUILD, a nonprofit corporation doing business as a labor union; RANDY WEAVER, SONYA WEAVER, LEONARD ORTH, KATHERINE ORTH, GARRIN CLARK, GABRIEL VIGIL, individually and as representatives of KING COUNTY CORRECTIONS GUILD, and WILLIAM B. AITCHISON, ANIL S. KARIA, and TREVOR CALDWELL individually and as representatives; and PUBLIC SAFETY LABOR GROUP, a legal services public corporation, Respondents. |
| Court | Washington Court of Appeals |
Jared Karstetter appeals the trial court's order dismissing his claims for breach of contract and wrongful termination against the King County Corrections Guild (Guild) on summary judgment. Karstetter argues that the trial court erred by applying the "right to control" test rather than the "economic dependence" test to determine that he was an attorney retained as an independent contractor rather than an employee of the Guild. Karstetter further argues that, regardless of which test the court applied, he should be considered an employee of the Guild and permitted to pursue his claims. We affirm.
Karstetter began his career in 1975 as a corrections officer for King County where he was a member of SEIU Local 519, Public Safety Employees (Local 519). From 1984 to 1987, Local 519 employed Karstetter as a business representative; Karstetter attended law school at the same time. Karstetter has been a licensed Washington attorney since 1988. Between 1987 and 1996 Karstetter claims that he began representing Local 519 through consecutive five-year contracts.[1] In 1996, Local 519 was decertified. Karstetter was terminated.
In 1995, Karstetter registered a professional service corporation, Jared C. Karstetter, Jr. P.S. (the P.S. Corp.), which has been active since. Karstetter is the P.S. Corp.'s governor, owner, and sole shareholder.
In 1996, after Local 519 was decertified by the corrections officers, the Guild was formed as the exclusive bargaining representative of corrections officers and sergeants employed by the King County Department of Adult and Juvenile Detention. Karstetter claims that he continued to represent the Guild in the same capacity as he did Local 519-as an in-house attorney-through consecutive five-year contracts. On October 10, 2011, the Guild approved Karstetter's most recent contract, and the one subject to this action, spanning January 1, 2012, through December 31, 2016.[2] The contract provided for just cause termination:
Consistent with the rights and expectations of the members that the GUILD represents ATTORNEY may be terminated for just cause. The definition of Just Cause shall be the same definition that is currently contained in the Collective Bargaining Agreement for GUILD members. In the event that the GUILD wishes to exercise this provision, due notice shall be provided to ATTORNEY and an opportunity to correct any behavior that GUILD deems inappropriate. ATTORNEY shall be afforded fundamental due process and an opportunity to answer to any and all charges. Termination of this Agreement shall be reserved as a final option.
In 2016, the King County Ombudsman's Office contacted Karstetter about a whistle blower complaint over parking reimbursements to Guild members. The Guild transferred the complaint to its Internal Investigation Unit (IIU). Karstetter produced information related to the complaint for the Ombudsman's Office. In April 2016, several Guild members filed Bar complaints against Karstetter. Karstetter requested that the Guild provide counsel to defend against Bar complaints by its members; the Guild refused. The Guild retained the Public Safety Labor Group (PSLG) law firm to advise on its internal governance matters, including the whistle blower complaint and Karstetter's conduct as counsel for the Guild. On April 21, 2016, PSLG provided the Guild a memorandum (PSLG Memo) that, in part, recommended the Guild terminate its relationship with Karstetter for Bar complaints, breaching client confidence, dishonesty during a court appearance, and unprofessional behavior harming the Guild and its members. On April 27, 2016, the Guild's Executive Board voted to terminate Karstetter.
In response to his termination, Karstetter and his wife filed suit against the Guild alleging, among other things, breach of contract and wrongful discharge in violation of public policy. The Guild moved to dismiss under CR 12(b)(6) for failure to state a claim for relief. The trial court partially granted the motion, but allowed Karstetter's claims for breach of contract and wrongful termination to proceed. We granted discretionary review and reversed and remanded, directing the trial court to dismiss Karstetter's breach of contract and wrongful termination claims. See Karstetter v. King County Corrections Guild, 1 Wn.App. 2d 822, 407 P.3d 384 (2017) rev'd, Karstetter v. King County Corrections Guild, 193 Wn.2d 672, 444 P.3d 1185 (2019). In doing so, we reasoned that Washington's Rules of Professional Conduct (RPC) 1.16 allowed the Guild to terminate its attorney-client relationship with Karstetter, thus rendering his contract's termination clause unenforceable. Karstetter sought and was granted review by the Washington Supreme Court.
The Supreme Court reversed, holding that "in the narrow context of in-house attorneys, contract and wrongful discharge suits are available, provided these suits can be brought 'without violence to the integrity of the attorney-client relationship.'" Karstetter, 193 Wn.2d at 682 ). The court held that Karstetter had pleaded facts sufficient to bring contract claims against the Guild as an in-house attorney employee and to assert wrongful termination. Karstetter, 193 Wn.2d at 686-87.
The Supreme Court explained its decision was narrow and limited to in-house attorneys:
our decision today is a narrow one, limited to in-house attorneys who are employed and operate as private employees for private employers. We do not opine on matters not before us: employment claims brought by traditional private practice attorneys and, more specifically, whether Karstetter's employment as an in-house attorney employee would survive summary judgment. Additional factual issues may arise should Karstetter decide to proceed with his complaint. Such potential issues are properly resolved at trial.
Karstetter, 193 Wn.2d at 684, n.6.
Following extensive discovery after remand, the parties cross moved for summary judgment. The trial court granted the Guild's motion, reasoning that Karstetter was an independent contractor subject to termination by RPC 1.16, and thus precluded his breach of contract and wrongful termination claims. Karstetter petitioned the Supreme Court for direct review. On December 1, 2021, the Supreme Court denied direct review and transferred the case to this court.
This court reviews summary judgment decisions de novo. Int'l Marine Underwriters v. ABCD Marine, LLC, 179 Wn.2d 274, 281, 313 P.3d 395 (2013). "Summary judgment is proper only where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law." Int'l Marine Underwriters, 179 Wn.2d at 281; CR 56(c). "A genuine issue of material fact exists where reasonable minds could differ on the facts controlling the outcome of the litigation." Ranger Ins. Co. v. Pierce County, 164 Wn.2d 545, 552, 192 P.3d 886 (2008). We construe "the facts submitted and all reasonable inferences therefrom in the light most favorable to the nonmoving party." Chelan County Deputy Sheriffs' Ass'n v. Chelan County, 109 Wn.2d 282, 294, 745 P.2d 1 (1987).
"Even where the evidentiary facts are undisputed, if reasonable minds could draw different conclusions from those facts, then summary judgment is not proper." Chelan County, 109 Wn.2d at 295.
This case turns on whether Karstetter was an independent contractor or employee of the guild. Because RPC 1.16 "robustly protects a client's right to terminate an attorney at any time, for any reason," if Karstetter were a traditional, contracted attorney operating out of a "private law firm," the rule "would almost certainly prohibit [him] from bringing employment claims against [his] client," the Guild. Karstetter, 193 Wn.2d at 678, 680; RPC 1.16(a)(3) (); RPC 1.16 cmt. 4 ("A client has a right to discharge a lawyer at any time, with or without cause."); Belli v. Shaw, 98 Wn.2d 569, 577, 657 P.2d 315 (1983).
The parties advance separate tests to determine whether Karstetter was an independent contractor or a Guild employee. The Guild contends that the court should apply the "right to control test." Karstetter, on the other hand, asks the court to employ the "economic dependence test." We agree with the Guild that the right to control test applies.
The Washington Supreme Court expressed the right to control test in Hollingbery v. Dunn, 68 Wn.2d 75, 411 P.2d 431 (1966):
A servant or employee may be defined as a person employed to perform services in the affairs of another under an express or implied agreement, and who with respect to his physical conduct in the performance of the service is subject to the other's control or right of control . . . An independent contractor, on the other hand, may be generally defined as one who contractually undertakes to perform services for another, but who is not controlled by the other nor subject to the other's right to control with respect to his physical conduct in performing the...
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