Lavigne v. CHASE, HASKELL, HAYES

• Decision Date: 23 July 2002
• Docket Number: No. 19550-3-III.,19550-3-III.
• Citation: 112 Wn. App. 677,50 P.3d 306,112 Wash. App. 677
• Court: Washington Court of Appeals
• Parties: Michael B. LAVIGNE, Appellant, v. CHASE, HASKELL, HAYES & KALAMON, P.S., Respondents.

50 P.3d 306

112 Wn. App. 677

112 Wash. App. 677

Michael B. LAVIGNE, Appellant, v. CHASE, HASKELL, HAYES & KALAMON, P.S., Respondents.

No. 19550-3-III.

Court of Appeals of Washington, Division 3, Panel Eight.

July 23, 2002.

Roger K. Anderson, Seattle, for Appellant.

Patrick N. Rothwell, Seattle, for Respondents.

BROWN C.J.

The appellants' predecessor corporation, RCL Northwest, Inc. (RCL),¹ obtained a 1991 default judgment against certain Arizona residents. RCL then hired the law firm of Chase, Haskell, Hayes & Kalamon (Chase) to collect the judgment. Chase registered the judgment in Arizona, but failed to renew it before it expired in 1996. RCL sued Chase for negligence. The trial court granted summary judgment to Chase, reasoning RCL produced no evidence showing the judgment was collectible. RCL appeals, arguing the negligent attorney should bear the burden of proving the lost judgment was uncollectible, an issue of first impression in Washington. Although we decline to adopt RCL's position, we find material fact issues remain regarding the value of the judgment in Arizona and its collectibility before the failure to renew the judgment. Accordingly, we reverse and remand for trial.

FACTS

On February 22, 1991, RCL obtained a default judgment in the Spokane County Superior Court totaling $85,065.71 against Alfred J. Bowen and Cheryl Bowen, husband and wife (Bowens). The Bowens resided in Arizona. In September 1991, RCL retained Chase to collect the judgment on a 40 percent contingency fee basis. Chase registered the Spokane judgment in an Arizona court on October 4, 1991. In 1992, Chase informed RCL that collection would be "very difficult" because of the Bowens' lack of unencumbered assets. Clerk's Papers (CP) at 37. The Bowens' divorce was apparently finalized in 1993. Nevertheless, Chase suggested the Bowens "may be willing to settle this matter." CP at 37.

An Arizona firm enlisted by Chase to aid in the collection effort related that Al Bowen seemed to be hiding assets to escape creditors, possibly by transferring ownership to his brother Tom Bowen. Later, RCL and Chase got into a dispute over costs incurred in connection with the collection effort. In 1996, Chase obtained a judgment against RCL in small claims court for $2,124.96 for costs owed.

In January 1997, Chase sent a letter to RCL terminating its representation. The letter partly stated, "You should be aware that the statute of limitations on enforcing your judgment is 10 years in the state of Washington. I do not know how long judgments remain enforceable in the state of Arizona." CP at 69. Arizona has a 5-year statute of limitation on renewing judgments, including judgments registered from another state. A.R.S. § 12-1611; A.R.S. § 12-1702. Hence, RCL's judgment had expired in 1996 and was no longer enforceable.

RCL filed a legal malpractice claim against Chase in 1998. Discovery ensued during which RCL admitted it had no "documentation" of assets owned by either Al Bowen or Cheryl Bowen. CP at 4-8. But RCL denied that it had no "evidence" that Al Bowen or Cheryl Bowen owned assets. CP at 4-8. Chase then filed a summary judgment motion alleging RCL could not establish a prima facie malpractice claim. RCL filed responsive pleadings with numerous exhibits, including a transcript of a 1997 deposition of Al Bowen. In the deposition, Mr. Bowen asserted he owned very little property but also admitted he earned income in Arizona from consulting work he did for two companies owned by his brother Tom Bowen.

The trial court ruled the Bowen transcript inadmissible for trial purposes, apparently for hearsay reasons. Chase then filed a new summary judgment motion contending RCL could not establish damages because RCL had produced no evidence that the judgment was collectible. RCL filed a response memorandum. The trial court granted summary judgment dismissal, mainly reasoning RCL failed to produce evidence the judgment was collectible. RCL appealed.

ISSUES

The broad issue is whether the trial court erred in granting Chase summary judgment when deciding no material facts remained regarding collectibility and concluding RCL failed to show damage. The unique issue in this attorney malpractice case involving a law firm's failure to renew a judgment is who between the plaintiff and the defendant bears the burden of proving the judgment was collectible.

In a preliminary issue Chase contends RCL invited dismissal when it conceded to the trial court that an adverse evidentiary ruling "eviscerated" its case and that summary judgment was appropriate. RCL replies the "eviscerated" comment was taken out of context and that it did not concede the merits of its case. Under the invited error doctrine, a party may not set up an error at trial and then complain of it on appeal. In re Pers. Restraint of Thompson, 141 Wash.2d 712, 723, 10 P.3d 380 (2000). The doctrine applies when a party takes affirmative and voluntary action that induces the trial court to take an action that party later challenges on appeal. Id. at 723-24, 10 P.3d 380.

The doctrine does not apply here because RCL did not "set up" an error. When the verbatim of the summary judgment hearing is viewed in context, it is apparent RCL felt compelled by the trial court's negative evidentiary ruling to go along with resolution by summary judgment. RCL did not concede the merits of its case, and the trial court agreed on that point. It would be unfair to characterize RCL counsel's exasperated comment that the trial court's evidentiary ruling "eviscerated" RCL's case as constituting a waiver of the merits of their case.

ANALYSIS

In reviewing a summary judgment, the appellate court engages in the same inquiry as the trial court. Huff v. Budbill, 141 Wash.2d 1, 7, 1 P.3d 1138 (2000). Summary judgment is appropriate when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. CR 56(c); Huff 141 Wash.2d at 7, 1 P.3d 1138. "A material fact is one upon which the outcome of the litigation depends." Tran v. State Farm Fire & Cas. Co., 136 Wash.2d 214, 223, 961 P.2d 358 (1998) (citing Ruff v. King County, 125 Wash.2d 697, 703, 887 P.2d 886 (1995)). The appellate court reviews all facts and reasonable inferences in the light most favorable to the nonmoving party. Huff, 141 Wash.2d at 7, 1 P.3d 1138. And de novo review applies to issues of law. Id.

"To establish a claim for legal malpractice, a plaintiff must prove the following elements: (1) The existence of an attorney-client relationship which gives rise to a duty of care on the part of the attorney to the client; (2) an act or omission by the attorney in breach of the duty of care; (3) damage to the client; and (4) proximate causation between the attorney's breach of the duty and the damage incurred." Hizey v. Carpenter, 119 Wash.2d 251, 260-61, 830 P.2d 646 (1992) (citations omitted).

"Proximate cause consists of two elements: cause in fact and legal causation." Nielson v. Eisenhower & Carlson, 100 Wash.App. 584, 591, 999 P.2d 42 (citing City of Seattle v. Blume, 134 Wash.2d 243, 251, 947 P.2d 223 (1997),review denied, 141 Wash.2d 1016, 10 P.3d 1071 (2000)). "Cause in fact refers to the `but for' consequences of the act, that is, the immediate connection between an act and an injury." Blume, 134 Wash.2d at 251-52,947 P.2d 223. "The `but for' test requires a plaintiff to establish that the act complained of probably caused the subsequent disability." Daugert v. Pappas, 104 Wash.2d 254, 260, 704 P.2d 600 (1985). "Cause in fact is generally for the trier of fact to decide." Hetzel v. Parks, 93 Wash.App. 929, 939, 971 P.2d 115 (1999) (citing Daugert, 104 Wash.2d at 257,704 P.2d 600).

"Legal causation rests on policy considerations determining how far the consequences of a defendant's act should extend." Blume, 134 Wash.2d at 252, 947 P.2d 223. "It involves the question of whether liability should attach as a matter of law, even if the proof establishes cause in fact." Id. at 252, 947 P.2d 223.

In the legal malpractice context, proximate cause boils down to whether the client would have fared better but for the attorney's negligence. Daugert, 104 Wash.2d at 257, 704 P.2d 600; Brust v. Newton, 70 Wash.App. 286, 293-94, 852 P.2d 1092 (1993). Unless the question involves a pure matter of law, such as whether the client would have prevailed on a statute of limitations issue, the trier of fact determines the existence of proximate cause. See Brust, 70 Wash.App. at 293-94,

852 P.2d 1092.

Our sole focus is the damage element. For discussion, we assume ample evidence to raise a genuine issue of material fact with regard to the other elements. At issue is whether material facts remain on the issue of the collectibility of the lost judgment.

In the legal malpractice context, "damages are the monetary value of an injury." 3 RODNEY E. MALLEN & JEFFREY M. SMITH, LEGAL MALPRACTICE § 20.1 (5th Ed.2000). "Injury" refers to the invasion of another's legal interest. Supra. "Damages" generally refers to monetary compensation to the injured party. Supra.

Here, the injury is rather apparent; it appears Chase missed the Arizona statute of limitations resulting in the irretrievable loss of RCL's judgment. The more difficult question relates to RCL's compensation for the injury. What are the damages in light of the depicted poor chance of recovery of any monetary sum for the damage sustained?

In this connection, Chase relies upon inapposite authority. In Sherry v. Diercks, 29 Wash.App. 433, 435-36, 628 P.2d 1336 (1981), the attorney's actions resulted in a default judgment against his client. Division One of this court affirmed the trial court's dismissal order reasoning the client could not prove causation because he had not shown he would have prevailed had he defended the suit. Id. at 437-38, 628 P.2d 1336. Here, the scenario is quite different; RCL had already obtained an enforceable judgment, which Chase let slip...