Ranger Ins. Co. v. Pierce County

• Decision Date: 18 September 2008
• Docket Number: No. 80389-7.,80389-7.
• Citation: 164 Wash.2d 545,192 P.3d 886
• Court: Washington Supreme Court
• Parties: RANGER INSURANCE COMPANY, Respondent, v. PIERCE COUNTY, Pierce County Superior Court Clerk, "John Doe" and "Jane Doe", and the State Of Washington, Petitioners.

192 P.3d 886

164 Wash.2d 545

RANGER INSURANCE COMPANY, Respondent, v. PIERCE COUNTY, Pierce County Superior Court Clerk, "John Doe" and "Jane Doe", and the State Of Washington, Petitioners.

No. 80389-7.

Supreme Court of Washington, En Banc.

Argued May 8, 2008.

Decided September 18, 2008.

Douglas Warren Vanscoy, Attorney at Law, Deputy Pros. Atny., Tacoma, WA, for Petitioners.

Brett Andrews Purtzer, Attorney at Law, Tacoma, WA, for Respondent.

SANDERS, J.

¶ 1 Pierce County applied money from Ranger Insurance Company (Ranger), at the request of Ranger's agent, to forfeited bonds underwritten by another surety. When the bonds were exonerated, Ranger's funds were not returned. Ranger sued Pierce County for negligence. The trial court granted Pierce County summary judgment of dismissal, holding it met its duty to Ranger as a matter of law. Analyzing the issue as an agency problem the Court of Appeals reversed the trial court. We affirm the Court of Appeals reversal of summary judgment as material issues of fact exist under both duty and agency theories.

FACTUAL AND PROCEDURAL HISTORY

¶ 2 Signature Bail Bonds (Signature) is a bail bond company authorized to post appearance and appeal bonds in Pierce County. It represents two corporate surety companies, Ranger and Granite State Insurance Company (Granite State). Signature holds a power of attorney from each to post bonds on their behalf.

¶ 3 In February 1998 Signature wrote an appearance bond on Ranger paper for $15,000 on behalf of David J. Rogers in case no. 97-1-05295-7. More than a year later, in November 1999, Signature wrote a second bond for $10,000 for Rogers in the same case, this time on Granite State paper. Signature wrote another appearance bond for Rogers on Ranger paper for $20,000 on a second case, no. 98-1-03952-5.

¶ 4 Two years later, in February 2000, Signature wrote a bond for Brandon Sims on Granite State paper for $5,800 in case no. 00-1-01029-1. Two days later Signature wrote an additional bond in the same case on Granite State paper for $4,200.

¶ 5 In March, Sims failed to appear for a pretrial conference and the court ordered the entire $10,000 bond forfeited. That same month Rogers failed to appear for an omnibus hearing for one of his cases, no. 97-1-05295-7, and the court ordered both appearance bonds, totaling $25,000, forfeited. This resulted in a total obligation of $35,000 based on these forfeited bonds, $15,000 by Ranger and $20,000 by Granite State. Rogers's $20,000 bond in case no. 98-1-03952-5 was never forfeited.¹

¶ 6 Signature sent two checks totaling $35,000 to Pierce County² to satisfy the outstanding obligations for Ranger and Granite State. However Signature stopped payment on those checks. At Signature's request Ranger sent a check for $35,000 to Pierce County, which Pierce County originally applied to Rogers's second case although the $20,000 bond had not been forfeited.

¶ 7 Signature called Pierce County asking it to apply Ranger's $35,000 to the forfeited $15,000 bond written on Ranger paper. Signature also asked Pierce County to apply Ranger's remaining $20,000 to the three forfeited bonds written on Granite State paper, covering both Sims's and Rogers's forfeited bonds. The clerk complied.

¶ 8 Sims and Rogers were subsequently apprehended and returned to custody. The orders of forfeiture were vacated, the bonds exonerated, and the bond money returned to Signature, minus $750 in court costs in each of the two cases. Signature apparently did not forward any of these funds to Ranger.

¶ 9 Ranger sued Pierce County alleging the court clerk negligently handled Ranger's $35,000. In July 2003 the trial court granted Pierce County summary judgment of dismissal on three grounds: Pierce County's repayment resulted in a lack of damage to Ranger, quasi-judicial immunity of Pierce County, and failure to properly serve the State.³ The Court of Appeals reversed the trial court's summary judgment. It held Pierce County did not have quasi-judicial immunity, nor was the State prejudiced by a failure to serve the State as required by RCW 4.92.100. Ranger Ins. Co. v. Pierce County, noted at 122 Wash.App. 1077, 2004 WL 1834650 (Ranger I). It also held "a genuine issue of material fact exists as to whether the clerk reasonably believed that [James] Barbieri had apparent authority. . . ." Id. at *5. In his well reasoned dissent Acting Chief Judge Morgan argued Pierce County "discharged its liability" to Ranger when it returned the funds to Signature, Ranger's agent.⁴ Ranger I, 122 Wash. App. 1077, 2004 WL 1834650, at *10. Pierce County filed a petition for review, which was denied. Ranger Ins. Co. v. Pierce County, 154 Wash.2d 1030, 116 P.3d 399 (2005).

¶ 10 On remand Pierce County again moved for summary judgment, arguing it met the standard of care and therefore was not negligent. In support of this motion, Pierce County submitted a declaration from Joel McAllister, manager of finance and information services for the King County Department of Judicial Administration.⁵ This declaration states, "the actions of the Pierce County Superior Court Clerk's Office in connection with the Ranger check and the 1997 and 1998 Rogers and 2000 Sims cases were fully consistent with the standard of care concerning receipt, allocation and disbursement of funds as those exist in clerk's offices today and in 2000." Clerk's Papers (CP) at 77-78. Ranger submitted no evidence to counter McAllister's assessment.

¶ 11 Based on the McAllister declaration, the trial court granted summary judgment in favor of Pierce County, holding it "resolves the issue in the County's favor on the question of violation of duty or failure to provide the requisite standard of care. . . ." Verbatim Report of Proceedings at 20-21. The Court of Appeals reversed, noting "[n]othing in the record on appeal shows Ranger's objective manifestations supporting Signature's apparent authority." Ranger Ins. Co. v. Pierce County, 138 Wash.App. 757, 770, 158 P.3d 1231 (2007) (Ranger II). We granted review. 163 Wash.2d 1005, 180 P.3d 784 (2008).

STANDARD OF REVIEW

¶ 12 We review summary judgments de novo. City of Sequim v. Malkasian, 157 Wash.2d 251, 261, 138 P.3d 943 (2006). "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.'" Locke v. City of Seattle, 162 Wash.2d 474, 483, 172 P.3d 705 (2007) (alteration in original) (quoting CR 56(c)). When determining whether an issue of material fact exists, the court must construe all facts and inferences in favor of the nonmoving party, Ranger Insurance. See Reid v. Pierce County, 136 Wash.2d 195, 201, 961 P.2d 333 (1998). A genuine issue of material fact exists where reasonable minds could differ on the facts controlling the outcome of the litigation. Wilson v. Steinbach, 98 Wash.2d 434, 437, 656 P.2d 1030 (1982); Barrie v. Hosts of Am., Inc., 94 Wash.2d 640, 618 P.2d 96 (1980).

¶ 13 Summary judgment is subject to a burden-shifting scheme. The moving party is entitled to summary judgment if it submits affidavits establishing it is entitled to judgment as a matter of law. See Meyer v. Univ. of Wash., 105 Wash.2d 847, 719 P.2d 98 (1986). The nonmoving party avoids summary judgment when it "set[s] forth specific facts which sufficiently rebut the moving party's contentions and disclose the existence of a genuine issue as to a material fact." Id. at 852, 719 P.2d 98. To this end the nonmoving party "may not rely on speculation, [or] argumentative assertions that unresolved factual issues remain." Seven Gables Corp. v. MGM/UA Entm't Co., 106 Wash.2d 1, 13, 721 P.2d 1 (1986).

ANALYSIS

¶ 14 "In an action for negligence a plaintiff must prove four basic elements: (1) the existence of a duty, (2) breach of that duty, (3) resulting injury, and (4) proximate cause." Degel v. Majestic Mobile Manor, Inc., 129 Wash.2d 43, 48, 914 P.2d 728 (1996) (citing Tincani v. Inland Empire Zoological Soc'y, 124 Wash.2d 121, 127-28, 875 P.2d 621 (1994)). If any of these elements cannot be met as a matter of law, summary judgment for the defendant is proper.

¶ 15 Ranger alleges Pierce County was negligent when it applied Ranger's money to another surety's forfeited bond leading to Ranger's loss. Pierce County brought a motion for summary judgment contending it met its duty as a matter of law. Ranger argued a material issue of fact exists on whether Signature had the apparent authority to direct Pierce County to allocate Ranger's funds to another surety's obligations.

¶ 16 To meet its duty a municipality must exercise "that care which an ordinarily reasonable person would exercise under the same or similar circumstances." Berglund v. Spokane County, 4 Wash.2d 309, 315, 103 P.2d 355 (1940). Whether a defendant has met the applicable duty is a question for the jury, unless reasonable minds could not differ. Hertog ex rel. S.A.H. v. City of Seattle, 138 Wash.2d 265, 979 P.2d 400 (1999). Pierce County argues it acted as a reasonably prudent clerk in similar circumstances and, therefore, was not negligent as a matter of law.

¶ 17 In an effort to establish its adherence to the standard of care, Pierce County submitted Joel McAllister's declaration, which states Pierce County's actions "were fully consistent with the standard of care concerning receipt, allocation and disbursement of funds as those exist in clerk's offices today and in 2000." CP at 77-78. If this declaration demonstrates Pierce County acted as a "reasonably prudent clerk" and did not breach its duty, then summary judgment is appropriate, as Ranger did not submit any evidence to rebut this declaration. Meyer, 105 Wash.2d at 852, 719 P.2d 98.

¶ 18 However, a simple statement indicating an individual acted according to the customs of the industry is not always determinative. In the words of Justice Oliver Wendell Holmes, "`[w]hat usually is done may be evidence of what ought to be done, but what...