New West Fisheries, Inc. v. Hough, No. 55535-9-I (Wash. App. 1/16/2007), 55535-9-I
| Decision Date | 16 January 2007 |
| Docket Number | No. 55535-9-I,55535-9-I |
| Parties | NEW WEST FISHERIES, INC., A Washington corporation, Appellant/Cross-Respondent, v. MARK M. HOUGH and JANE DOE HOUGH, husband and wife Respondents/Cross-Appellants, and JOHN R. NEELEMAN and JANE DOE NEELEMAN, husband and wife, Respondents/Cross-Respondents. |
| Court | Washington Court of Appeals |
Appeal from King County Superior Court. Docket No. 02-2-32045-7. Judgment or order under review. Date filed: 12/10/2004. Judge signing: Honorable Carol A Schapira
Counsel for Respondent(s), Robert M. Sulkin, Mcnaul Ebel Nawrot Er Al, 600 University St Ste 2700, Seattle, WA, 98101-3143.
Counsel for Appellant/Cross-Respondent, David Strout, Bush Strout & Kornfeld, 601 Union St Ste 5500 Seattle, WA, 98101-2373.
Kenneth Wendell Masters, Wiggins & Masters PLLC, 241 Madison Ave N, Bainbridge Island, WA, 98110-1811.
Counsel for Respondent/Cross-Appellant, Jeffrey Paul Downer, Lee Smart Cook Martin & Patterson PS, 701 Pike St Ste 1800, Seattle, WA, 98101-3929
In 1993, the City of Bellingham and New West Fisheries, Inc. entered into an agreement to exchange land. In exchange for title to a portion of New West's property, the City agreed to convey an unimproved street to New West. In 1995, New West retained attorney John R. Neeleman to sue the City for damages caused by the City's misrepresentations and breach of the property exchange agreement. From 1995 to 1997, Neeleman filed three separate complaints against the City on behalf of New West. Each complaint alleged that a statutory claim for damages was filed with the City and rejected. In May 1997, New West retained attorney Mark M. Hough to represent it in the lawsuit against the City. Approximately a year later, Hough told New West there was no evidence that a pre-suit tort claim for damages was ever filed with the City. Hough also told New West that a claim for damages was mandatory and described the requirements for filing one. In February 1998, without first dismissing New West's pending lawsuit, Hough submitted New West's claim for damages to the City. In 2001, in two separate summary judgment motions, the Whatcom County trial court judge first dismissed New West's misrepresentation claim on the merits and then dismissed New West's breach of contract claim because a pre-suit claim for damages was not filed. In November 2002, New West sued Neeleman and Hough for legal malpractice in King County Superior Court. New West alleged Neeleman and Hough each breached the standard of care by failing to file a claim for damages resulting in significant financial damages. After a series of summary judgment motions, the court dismissed New West's legal malpractice claim against Hough and Neeleman as barred by the statute of limitations.
We affirm the trial court's decision to dismiss New West's legal malpractice lawsuit against Neeleman as barred by the three-year statute of limitations. As a matter of law, we conclude the question of whether the 1993 version of the pre-suit claim statute, RCW 4.96, required filing a damages claim on a beach of contract cause of action was unsettled until this court's decision in Harberd v. City of Kettle Falls, 120 Wn. App. 498, 84 P.3d 1241, rev. denied, 152 Wn.2d 1025, 101 P.3d 421 (2004). But there is no question that the statute required filing a claim for damages before suing a city on a tort cause of action. Here, if a claim for damages on New West's tort claim had been timely filed, it would have necessarily included a description of New West's breach of contract claim damages. Because there are material issues of fact about when New West knew or should have known about the City's alleged misrepresentations and whether Hough had sufficient time to file a claim for damages on the tort claim, we reverse the trial court's decision to dismiss New West's legal malpractice lawsuit against Hough and remand for trial. On Hough's cross-appeal, we conclude the trial court did not abuse its discretion in granting New West's motion to file a second amended complaint against Hough.
New West Fisheries, Inc. (New West) was in the business of purchasing, processing, and marketing seafood products. New West owned and operated a fish processing facility in the City of Bellingham.
In 1992, New West planned to expand its Bellingham facility by constructing a cold storage unit on its property. The expanded facility would allow New West to purchase fish from Alaska and Canada, engage in year-round production, and market fish in North American.
At approximately the same time, the City of Bellingham decided to expand the City's waterfront access along Roeder Avenue and widen the Roeder Avenue Bridge. The City notified New West in 1992 that it intended to purchase or condemn 6700 square feet on the east side of New West's property for the Roeder Avenue project. New West proposed giving the City the land it needed for the project in exchange for the City's agreement to vacate a portion of Chestnut Street on the west side of New West's property so it could still proceed with its planned expansion.
On August 7, 1992, New West filed a petition to vacate a portion of Chestnut Street. The Council referred the petition to a committee for further review. Thereafter, the City and New West engaged in lengthy negotiations. In 1993, New West and the City reached an agreement. New West agreed to execute a statutory warranty deed in exchange for the City's agreement to vacate Chestnut Street. In addition, the City agreed to pay for the demolition and partial reconstruction of New West's facility. The City's March 23, 1993 letter to New West summarizes the agreement.
The general understanding is that the City will vacate all of Chestnut Street. It will then take from New West a statutory warranty deed to the strip of land needed to widen Roeder Avenue. In addition, the City will pay for demolition of a portion of New West's building and reconstruction of it at the west end of the present structure. The vacation proceeding will shortly be re-opened before the City Council. A new public hearing should not be necessary. If the Council approves the vacation, the ordinance will recite as consideration the grant to the City of the strip of land along Roeder.
In May of 1993, New West retained Hartley Paul of Lane Powell Spears Lubersky L.L.P., to prepare the necessary documents to transfer title of New West's property to the City. Paul drafted a warranty deed based on conversations with both the City's attorney, Richard Little, and New West's president, Robert Seidel. The Warranty Deed states that the City agrees to convey title to Chestnut Street "free and clear of all liens and easements."
This Deed is given in consideration of Grantee's covenants below, and of Grantee's conveyance to Grantor by means of street vacation ordinance, of title to all of that portion of Chestnut Street described on Exhibit B attached hereto ("Parcel B") free and clear of all liens, encumbrances, easements, reservations and restrictions."
By letter dated May 4, 1993, Little told New West that the City Council would likely consider the Chestnut Street vacation ordinance on May 17, 1993, but there was no need for a public hearing. A proposed ordinance was introduced on May 17. On May 24, the City Council passed Ordinance 10426. The Ordinance vacated the Chestnut Street right-of-way subject to utility easements. New West did not attend the council hearing. The Mayor signed Ordinance 10426 on June 11, 1993. Although the City was statutorily required to publish the Ordinance in the local Bellingham newspaper, it did not do so.
On September 28, 1993, New West executed a "Warranty Deed for Right of Way Purposes." City officials, including a city attorney and the Mayor, formally approved the Warranty Deed. The Warranty Deed set forth the property exchange agreement and reiterates that New West's title to Chestnut Street is free and clear of any restrictions or easements. The escrow instructions also state the Deed is not effective "unless and until all of the Parcel B Chestnut Street property is in fact vacated and becomes owned by New West free and clear of liens, encumbrances, easements, rights and restrictions." On November 23, 1993, the Warranty Deed was released from escrow to the City. The City recorded the Deed on November 24 1993.
On February 22, 1995, New West submitted the application for a building permit to expand its facility and build on the Chestnut Street property. The City denied the application because "Ordinance 10426 retains According to New West, this was the first time it learned that the Chestnut Street property was subject to utility easements.
In March 1995, New West demanded the City pass an ordinance without utility easement restrictions. New West told the City it had to complete construction by June 15, 1995, and any delay would force New West to cancel its agreements to purchase fish in Alaska and Canada.
According to Little, two weeks later, the City reversed its initial decision denying New West's building permit application. Little said the City agreed to vacate the Chestnut Street utility easements when New West decided where it wanted the utility services "stubbed off" in May, 1995, and agreed to pay the expense of moving the water service. In August 1996, the City adopted Ordinance 10786. Ordinance 10786 vacates the utility easement rights the City reserved in Ordinance 10426. By 1997, New West's expansion of its facility was nearly complete. New West Sues the City
After the City rejected New West's building permit in February 1995, New West retained attorney John R. Neeleman. On June 2, 1995, Neeleman filed a "Complaint for Declaratory and Injunctive Relief and Damages" against the City in federal court. The Complaint sought damages resulting from the delay in...
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