Oltman v. Holland America Line Usa, Inc.

• Decision Date: 13 March 2008
• Docket Number: No. 79529-1.,79529-1.
• Court: Washington Supreme Court
• Parties: Jack OLTMAN, individually and as executor of the estate of Bernice Oltman; and Susan Oltman, Petitioners, v. HOLLAND AMERICA LINE USA, INC., a Delaware corporation; and Holland America Line, Inc., a Washington corporation, Respondents.

178 P.3d 981

163 Wash.2d 236

Jack OLTMAN, individually and as executor of the estate of Bernice Oltman; and Susan Oltman, Petitioners, v. HOLLAND AMERICA LINE USA, INC., a Delaware corporation; and Holland America Line, Inc., a Washington corporation, Respondents.

No. 79529-1.

Supreme Court of Washington, En Banc.

Argued November 27, 2007.

Decided March 13, 2008.

Noah Christian Davis, Seattle, for Petitioners.

John Patrick Hayes, Jeremy H. Rogers, Forsberg & Umlauf, Seattle, for Respondents.

Stephen Michael Rummage, Kristina Silja Bennard, Davis Wright Tremaine LLP, Seattle, Lawrence W. Kaye, Gerald L. Gorman, Aksana Moshiav, Kaye, Rose & Partners LLP, San Diego, for Amicus Curiae Cruise Line Intern. Ass'n.

Bryan Patrick Harnetiaux, Spokane, for Amicus Curiae Wash. State Trial Lawyers Ass'n Foundation.

MADSEN, J.

¶ 1 Petitioners Jack Oltman and his mother Bernice Oltman¹ were passengers who became ill on a cruise ship sailing from Chile to San Diego. They filed suit against respondents Holland America Cruise Line USA, Inc. and Holland America Line, Inc. (hereafter Holland America) in King County Superior Court, asserting several causes of action. Petitioner Susan Oltman, who was not a passenger on the ship, asserted a claim for loss of consortium. The trial court granted summary judgment to the respondents on the basis that a forum selection clause in the cruise contracts requires that suit be brought in the United States District Court for the Western District of Washington. The Court of Appeals affirmed. We conclude that summary judgment was improperly granted on the loss of consortium claim, but in other respects we affirm the Court of Appeals.

FACTS

¶ 2 Jack Oltman booked a cruise on the luxury cruise ship ms Amsterdam through Vacations to Go in Houston, Texas, on March 18, 2004, 13 days before the ship was to sail from Valparaiso, Chile, to San Diego, California. Jack and Bernice each received a Cruise and "CruiseTour Contract," and a "Cruise Ticket."² Jack stated in his declaration that they received their travel documents either approximately six days before boarding or at the time they boarded. The Oltmans contend that they had no "opportunity to review the fine print in the travel documents." Pet. for Review at 5. Uncontroverted evidence shows that Jack and Bernice could not have boarded the ms Amsterdam without presenting their Cruise and CruiseTour Contracts (with their Cruise Tickets).

¶ 3 Although Jack and Bernice have not submitted complete copies of their travel documents, they did submit copies of their Cruise Tickets. An exemplar of the complete travel documents was submitted by Holland America.³ The cruise ticket is denominated as a Cruise and CruiseTour Contract and contains a forum selection clause designating the federal district court in western Washington as the chosen forum, with the sole exception being that King County courts are the chosen forum where the federal court lacks subject matter jurisdiction. The contract also contains contractual limitations periods, providing that notice of injury must be provided to Holland America within six months of the injury, and providing a one-year limitations period in which to file a lawsuit, running from the date of injury.

¶ 4 The ms Amsterdam was scheduled to depart from Valparaiso on March 31, 2004, and arrive in San Diego at 8 a.m. on April 17, 2004. Jack and Bernice boarded the ship March 31. Sometime after they boarded, a severe gastrointestinal disease broke out and infected a number of passengers on board, resulting in an announcement about the illness by the ship's captain and issuance of a health notice. The Oltmans maintain that because none of the passengers were quarantined, the virus continued to be transmitted from passenger to passenger. Toward the end of the cruise, Jack and Bernice allege, they contracted the gastrointestinal illness and began to experience severe symptoms. Although the exact dates of the onset of their illnesses have not been established, the record shows that on April 16, 2004, each consulted with the ship's medical staff. Insurance claim forms in connection with these consultations show that Jack's visit was a "followup exam" for gastritis, Clerk's Papers (CP) at 45, and that Bernice's visit was a "consult — no exam" and that she was diagnosed with gastroenteritis, CP at 46.

¶ 5 On March 30, 2005, plaintiffs Jack, Bernice, and Susan Oltman filed suit in King County Superior Court against Holland America. Jack and Bernice asserted claims of negligence, breach of contract, and fraud. Susan asserted a claim for loss of consortium. The plaintiffs served Holland America on April 1, 2005. Thirty-one days after service of the complaint, on May 2, 2005, Holland America served their answer (filed April 29, 2005) on the Oltmans, past the 20-day time limit of CR 12(a)(1) for serving an answer. In the answer, Holland America asserted the forum selection clause, improper venue, and other contract limitations as affirmative defenses. The plaintiffs filed a motion to strike the affirmative defenses, claiming that an affirmative defense is waived when asserted in an untimely answer. The trial court denied the motion. Holland America then moved for summary judgment based solely on the forum selection clause. The trial court granted the motion. The Court of Appeals affirmed. Oltman v. Holland Am. Line USA, Inc., 136 Wash.App. 110, 148 P.3d 1050 (2006). The Oltmans' petition for review was granted.

ANALYSIS

¶ 6 We review a grant of summary judgment de novo. Beaupre v. Pierce County, 161 Wash.2d 568, 571, 166 P.3d 712 (2007). Summary judgment is appropriate when "there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law." CR 56(c). Some of the issues involve discretionary rulings by the trial court, such as a ruling on a motion to strike an attorney's declaration, and these are generally reviewed under an abuse of discretion standard.⁴

¶ 7 The first issue is whether, as the Oltmans claim, Holland America waived its affirmative defenses. There is no dispute that Holland America's answer to the complaint was served 31 days after service of the complaint, 11 days beyond the 20-day period allowed under CR 12(a)(1). The Oltmans ask the court to hold that affirmative defenses are waived if they are asserted in an untimely answer and the late assertion causes actual prejudice to the plaintiff. They claim they were prejudiced because if the forum selection clause defense had been raised in a timely answer, then they would have been able to refile their complaint in federal court in conformity with the forum selection clause within the one-year contractual limitations period.

¶ 8 The Court of Appeals held that the waiver issue was not preserved because the plaintiffs did not claim prejudice in the trial court. Oltman, 136 Wash.App. at 115, 148 P.3d 1050. However, contrary to the Court of Appeals' view, the Oltmans did claim prejudice in response to Holland America's motion for summary judgment. Then, as now, they argued prejudice resulting from assertion of the forum selection clause defense in the late answer.

¶ 9 A trial court's denial of a motion to strike an affirmative defense is a discretionary ruling that we review for abuse of discretion. Phillips v. Richmond, 59 Wash.2d 571, 574-75, 369 P.2d 299 (1962); see King County Fire Prot. Dist. No. 16 v. Hous. Auth., 123 Wash.2d 819, 826, 872 P.2d 516 (1994). A defendant shall serve the answer no more than 20 days after service of the complaint. CR 12(a)(1). Affirmative defenses "shall be asserted in the responsive pleading," or, alternatively, a defendant may assert lack of subject matter or personal jurisdiction, improper venue, insufficient process, insufficient service, failure to state a claim, or failure to join a party in a motion filed under CR 12(b). CR 12(b). An affirmative defense of improper venue is waived if not made by motion under the rule or included in a responsive pleading. CR 12(h)(1).

¶ 10 Conceding that there is no state case law holding that an affirmative defense is waived if not asserted in the answer, the Oltmans nonetheless rely on CR(h)(1), viewing the forum selection clause defense as the same thing as improper venue⁵ and citing Washington appellate cases holding that a defense is waived if not included in the answer. But here Holland America did assert its affirmative defenses in its answer. Nothing in the rule or the state cases supports the conclusion that asserting an affirmative defense in an untimely answer constitutes waiver.

¶ 11 As Holland America maintains, a number of federal courts hold that an affirmative defense is not waived merely because it is asserted in a late response. E.g., Breland v. ATC Vancom, Inc., 212 F.R.D. 475, 477 (E.D.Pa.2002) (rejecting plaintiffs' argument that the defendant waived the right to assert a defense of improper venue when the defendant filed its response to the complaint 11 days late); Foss v. Klapka, 95 F.R.D. 521, 522 (E.D.Pa.1982) (defense of lack of personal jurisdiction is not waived when asserted in the first response to a complaint filed over 20 days after service of the complaint). Some courts have concluded, to the contrary, that an affirmative defense is waived if asserted in an untimely response. E.g., Granger v. Kemm, Inc., 250 F.Supp. 644 (E.D.Pa.1966) (answer under Fed.R.Civ.P. 12(a) is required within 20 days after service of the complaint and unless an objection to venue is made either in the answer or by motion within this 20-day period, the objection to venue is waived; defendant's motion to dismiss on improper venue grounds was waived where it was filed 55 days after service of the complaint). But a leading treatise notes that the conclusion that a defense of improper service or venue is waived if asserted in an untimely response "is premised on an overly strict interpretation" of the rules, which do not...