Lietz v. Hansen Law Offices, P.S.C.

• Decision Date: 07 February 2012
• Docket Number: No. 40987–9–II.,40987–9–II.
• Citation: 271 P.3d 899
• Parties: Paul LIETZ, Appellant, v. HANSEN LAW OFFICES, P.S.C., Amy Hansen (Personally and in her official capacity), Respondents.
• Court: Washington Court of Appeals

271 P.3d 899

Paul LIETZ, Appellant,

v.HANSEN LAW OFFICES, P.S.C., Amy Hansen (Personally and in her official capacity), Respondents.

No. 40987–9–II.

Court of Appeals of Washington, Division 2.

Feb. 7, 2012.

Susan B. Mindenbergs, Law Office of Susan B. Mindenbergs, Seattle, WA, for Petitioner.

Geoffrey Colburn Cross, Attorney at Law, Tacoma, WA, for Respondents.

HUNT, P.J.

¶ 1 Paul Lietz appeals the trial court's (1) refusal to enter a CR 68 offer of judgment, which Hansen Law Offices, PSC, and Amy Hansen (collectively, Hansen) extended before trial and Lietz claims he unconditionally accepted; and (2) refusal to award attorney fees under RCW 49.48.030 ¹. Lietz argues that the trial court erred in (1) finding no “meeting of the minds” ² about whether the offer of judgment included attorney fees; (2) ruling the offer of judgment agreement invalid, despite Hansen's offer and Lietz's unconditional acceptance having satisfied the doctrine of mutual assent (formerly known as “meeting of the minds”) ³; and (3) denying him reasonable attorney fees, to which RCW 49.48.030 and Washington case law entitled him. Bypassing Lietz's mutual assent argument, Hansen responds that McGuire v. Bates, 169 Wash.2d 185, 234 P.3d 205 (2010), fully resolves the issue in her favor. We reverse and remand to the trial court to enter the CR 68 offer of judgment agreement and to award reasonable attorney fees to Lietz. We also award Lietz attorney fees on appeal.

FACTS

¶ 2 From approximately January 5, 2006, to June 13, 2007, Paul Lietz worked as a paralegal and investigator for Hansen. Lietz planned to become an attorney through Washington's Rule 6 Law Clerk Program; and Hansen had agreed to serve as his Rule 6 sponsor while he worked for her law firm. Hansen agreed to pay Lietz $15.00 per hour to work as an investigator on her personal injury cases. The parties dispute whether Hansen also agreed to pay Lietz $250 a week to work as a paralegal on Thursdays and Fridays. On June 13, 2007, Hansen terminated Lietz's working relationship with her firm.⁴ Eventually, she also ended her Rule 6 sponsorship of him.

¶ 3 On June 18, 2008, Lietz sued Hansen for breach of employment contract and failure to pay $14,483.47 in wages for work he had performed for her as a paralegal and as an investigator. He sought economic damages, double damages, costs, and reasonable attorney fees under RCW 49.48.030.⁵ Hansen filed a counterclaim, apparently asserting that Lietz's lawsuit was frivolous. ⁶ Trial was set for May 3, 2010.

I. Settlement Offers

¶ 4 In early October 2009, Hansen submitted a CR 68 offer of judgment to Lietz for $2,500,⁷ which Lietz rejected. In mid–October, the parties held a settlement conference with a Pierce County Superior Court judge. Hansen orally offered to settle for $7,500, which offer Lietz rejected.⁸

¶ 5 On April 20, 2010, Hansen served Lietz with a second document dated April 19 and entitled “Offer of Judgment,” which she purportedly made “pursuant to RCW 4.84.185 and 4.84.280 and CR 68.” Clerk's Papers (CP) at 43. In the bottom left-hand side of the footer of the document, Hansen also referred to the document as an “Offer of Settlement.” CP at 43. This second “Offer of Judgment” stated:

Defendants wish to bring this matter to a quick and amicable disposition; and, therefore, offers to settle the claim against defendants at the present time in the amount of $7,500.00.

CP at 43 (emphasis added). This offer did not mention attorney fees or Hansen's counterclaim. On April 28, Lietz accepted this offer in writing as follows:

[Lietz] accepts Defendants' offer of judgment dated April 19, 2010 in the amount of seven thousand five hundred dollars ($7,500).

CP at 45. Similar to Hansen's offer, Lietz's acceptance did not mention attorney fees or Hansen's counterclaim.

¶ 6 On April 29, Hansen filed a Notice of Settlement, stating, “ [A]ll claims against all parties in this action have been resolved,” and she asked the trial court to remove the case from the trial calendar. CP at 26 (emphasis added). On April 30, Hansen mailed Lietz a check for $7,500 and an Agreed Order of Dismissal. Lietz returned the check and the Agreed Order of Dismissal to Hansen the same day and advised her that he would move for entry of judgment and seek attorney fees. CP at 147.

II. Motion for Entry of Judgment under CR 68; Attorney Fee Dispute

¶ 7 On May 6, Lietz moved for entry of judgment under CR 68 and for attorney fees under RCW 49.48.030. He proposed entry of a judgment for $44,045, which comprised the $7,500 agreed upon in the April 19, 2010 offer of judgment and $36,545 in attorney fees under RCW 49.48.030. Hansen opposed the addition of attorney fees, contending that she had offered the $7,500 to settle all of Lietz's claims, including any attorney fees.

¶ 8 Lietz responded that Seaborn Pile Driving Co. v. Glew, 132 Wash.App. 261, 267, 131 P.3d 910 (2006), review denied, 158 Wash.2d 1027, 152 P.3d 347 (2007), requires the trial court to award attorney fees, in addition to the offer of judgment amount, where a CR 68 offer of judgment is silent on attorney fees and the attorney fees are not defined as “costs” under the relevant attorney fee statute. CP at 159. He argued that (1) the statute awarding attorney fees for recovering unpaid wages, RCW 49.48.030, does not define attorney fees as “costs”; and (2) therefore, the trial court must award him attorney fees in addition to the $7,500 agreed upon when he accepted Hansen's offer of judgment. CP at 159.

¶ 9 Hansen argued to the trial court that her offer of judgment was “unambiguous,” claiming that it clearly expressed her intent to resolve all claims against her because it deviated from the standard CR 68 language and used the words “settle” and “settlement.” Verbatim Report of Proceedings (VRP) (May 14, 2010) at 8. When pressed further by the court about why the document did not specify that it included attorney fees if her intent was to settle the entire case for $7,500, Hansen responded that it was “scrivener's error” and “maybe there's no meeting of the minds.” VRP (May 14, 2010) at 11.

¶ 10 Finding that there was no “meeting of the minds” about whether the offer of judgment included attorney fees, the trial court refused to enter the April 19, 2010 offer of judgment.⁹ VRP (May 14, 2010) at 15. The trial court also suggested that Lietz had an obligation to clarify any ambiguity with Hansen, or at least to put Hansen on notice that he intended to seek attorney fees, before accepting the offer.

III. Motions for Reconsideration and Discretionary Review

¶ 11 Lietz moved for reconsideration, briefing the issue of mutual assent, and arguing that the trial court should construe any ambiguity in the offer of judgment against Hansen because she had drafted the document. Hansen did not specifically allege lack of mutual assent in her response. Instead, she argued that her attorney had made a “unilateral mistake” in drafting the April 19, 2010 offer of judgment and that the trial court should not enforce the CR 68 judgment under the “snap up” doctrine.¹⁰ CP at 201. The trial court denied Lietz's motion for reconsideration,¹¹ and set a trial date for the underlying wage claim.

¶ 12 Lietz moved for discretionary review. Ruling that the trial court had committed probable error that substantially alters the status quo, a commissioner of our court granted review. We set the case for oral argument before a panel of judges.

ANALYSIS

I. Refusal To Enter CR 68 Offer of Judgment

¶ 13 Lietz argues that the trial court erred by refusing to enter the parties' April 19, 2010 offer of judgment based on lack of mutual assent, because the trial court erroneously evaluated Hansen's unexpressed, subjective intentions rather than her objective manifestations as case law requires. We agree.

A. Standard of Review

¶ 14 We review issues involving construction of CR 68 offers of judgment de novo; and we review for clear error disputed factual findings concerning the circumstances under which the defendant made the offer. Seaborn, 132 Wash.App. at 266, 131 P.3d 910 (quoting Herrington v. County of Sonoma, 12 F.3d 901, 906 (9th Cir.1993)). Washington's CR 68 is virtually identical to Federal Rule of Civil Procedure 68. Hodge v. Dev. Servs. of Am., 65 Wash.App. 576, 579, 828 P.2d 1175 (1992). Thus, in the absence of state authority, Washington courts look to federal interpretation of the equivalent rule. Hodge, 65 Wash.App. at 580, 828 P.2d 1175. In addition, courts must construe ambiguities in an offer of judgment against the drafter. Seaborn, 132 Wash.App. at 272, 131 P.3d 910 (citing Nusom v. Comh Woodburn, Inc., 122 F.3d 830, 833 (9th Cir.1997)).

B. CR 68 Offers of Judgment; Default Rule

¶ 15 CR 68 sets forth a procedure for defendants to offer to settle cases before trial. The rule aims to encourage parties to reach settlement agreements and to avoid lengthy litigation. Dussault v. Seattle Pub. Schs., 69 Wash.App. 728, 732, 850 P.2d 581 (1993), review denied, 123 Wash.2d 1004, 868 P.2d 872 (1994). The rule achieves this objective by shifting any post-offer of judgment costs of litigation to a plaintiff who rejects a defendant's CR 68 offer and does not achieve a more favorable result at trial. Seaborn calls this cost-shifting provision the “CR 68 default rule.” Seaborn, 132 Wash.App. at 272, 131 P.3d 910.

¶ 16 CR 68 provides, in relevant part:

At any time more than 10 days before the trial begins, a party defending against a claim may serve upon the adverse party an offer to allow judgment to be taken against him for the money or property or to the effect specified in his offer, with costs then accrued. If within 10 days after the service of the offer the adverse party serves written notice that the offer is accepted, either party may then file the offer and notice of acceptance together with proof of service thereof and thereupon the court shall enter judgment.... If the judgment finally obtained by the offeree is not...