Spice v. Lake
| Docket Number | 82683-2-I |
| Decision Date | 31 May 2022 |
| Parties | TED SPICE, a Single Person, and PLEXUS INVESTMENTS, LLC, a Washington Limited Liability Company, Appellants, v. CAROLYN A. LAKE, Individually and on Behalf of the Marital Community Comprised of CAROLYN A. LAKE and JOHN DOE LAKE; and GOODSTEIN LAW GROUP, PLLC, a Washington Professional Limited Liability Company, Respondents. |
| Court | Washington Court of Appeals |
UNPUBLISHED OPINION
Ted Spice and a business he formed, Plexus Investments LLC appeal the summary judgment dismissal of their legal malpractice claim against Carolyn Lake and her employer Goodstein Law Group PLLC. Spice contends there are genuine issues of material fact as to whether Lake breached her duty of care and caused Spice damage. Spice also appeals the trial court's award of discovery sanctions. We affirm.
The history of Spice's efforts to develop a parcel of land in Puyallup, Washington, and the disputes his activities engendered with the City of Puyallup (the City), his former business partner Doris Mathews, her estate after she passed away (Mathews Estate), and her daughter, Donna Dubois, is well known to this court.[1]
Spice has now sued his former attorney, Lake, who represented him in his two Land Use Petition Act[2] (LUPA) appeals, claiming he was unable to complete his planned development because of her legal malpractice. A short summary of the facts, to put this claim into context, is in order.
In September 2003, Spice began a business relationship with Doris Mathews in which Spice agreed to develop a number of properties she owned. Mathews initially signed a letter granting Spice the authority to act as her agent regarding her properties. In 2004, Mathews entered into an agreement with Spice, giving him the right to receive one-half of all proceeds from the property sales, investments, developments or refinancing from her properties, up to $8 million. Mathews later executed a durable power of attorney giving Spice the authority to act on her behalf.
Mathews and Spice formed Plexus Investments LLC (Plexus) to hold develop and maintain several business properties. Among these properties was a 3.5-acre plot located at 11003 58th Street Court East, Puyallup, WA 98372 (the Property).[3] The Property, located outside the Puyallup city limits, had several residential units in a state of disrepair. Spice and Mathews wanted to redevelop the Property for commercial use.
The planned development required expanded water service from the City. At the time, to obtain the necessary building permits, commercial developers were required to obtain a water availability letter from the City. In June 2004, the City refused to grant Spice a water availability letter because the Property was outside city limits and it claimed it had no obligation to provide additional water unless Spice could demonstrate that the Property was part of an ongoing annexation. The City rejected a number of applications for water availability letters from similarly situated property owners, including Mike Stanzel.
In October 2004, Spice hired Lake of the Goodstein Law Group PLLC to represent him in his dispute with the City. Lake initiated the dispute resolution process specified under the Pierce County Code and a Pierce County hearing examiner ruled that, because the City was unwilling to provide water service, Spice could pursue alternative water resources. If alternative water sources were not feasible, the hearing examiner told Spice that he could request an order requiring the City to provide the necessary water.
On February 2, 2006, Lake filed Spice's first LUPA petition seeking review of the hearing examiner's decision (LUPA I). Lake took no further action on the petition until November 2006 at which time she recommended that Spice withdraw the petition and instead ask the hearing examiner to compel the City to provide water, as contemplated by his administrative order. When Lake voluntarily dismissed the LUPA I petition, the City moved to have it dismissed with prejudice. The trial court granted the motion to dismiss with prejudice, over Lake's objection.
Meanwhile, Spice explored alternative water sources. When it became apparent that there were no feasible water alternatives for the Property, Lake filed a request for another hearing with the hearing examiner seeking to compel the City to provide water. She premised her request on the hearing examiner's earlier ruling inviting Spice to revisit the issue. But on August 7, 2007, the hearing examiner denied the application, concluding it lacked the legal authority under the Puyallup City Code to order the City to provide water services.
On August 29, 2007, Lake filed a second LUPA petition for review of the hearing examiner's August 7 decision, seeking a declaratory judgment and tort damages for the City's delay in providing water (LUPA II). By this time, Mathews again held title to the Property, and Lake, believing Spice had Mathews' authority to file suit in her name, named Mathews as a party to LUPA II.[4]
The City raised, as a defense to Spice's LUPA II petition, the dismissal of the LUPA I petition. Lake moved to vacate the order of dismissal but the trial court denied her motion. Lake appealed that ruling to Division Two of this court.
In September 2008, in ruling on Spice's LUPA II petition, the superior court concluded that the hearing examiner did not have the authority to order the City to provide water service, but did have authority to determine whether the City's preconditions to furnishing water were reasonable. The trial court bifurcated Spice's damages claim from the LUPA appeal and remanded the LUPA matter to the hearing examiner to determine whether the City could precondition the provision of water service on annexation. The trial court ordered the parties to set Spice's damages claim for trial.
While Spice litigated this water dispute with the City, Stanzel, who owned a nearby property, litigated a similar dispute with the City. See generally Stanzel v. City of Puyallup, 150 Wn.App. 835, 209 P.3d 534 (2009). Like Spice, Stanzel sought a water availability letter from the City to develop property located outside the city limits, in an area not being annexed, and he had no other feasible water source. And as in Spice's case, the Hearing Examiner concluded he lacked the authority to force the City to provide expanded water service to Stanzel's property. Stanzel filed a LUPA petition challenging this ruling and, in April 2008, a superior court ruled that the Hearing Examiner did have authority to order the City to issue a water availability letter, a ruling that conflicted with the superior court ruling in Spice's LUPA II case. The City appealed. Their dispute continued until Stanzel and the City settled in 2011.
But during the pendency of Stanzel's case with the City, in February 2009 Lake sent Spice an email highlighting the similarities between the two cases and explained that they could either proceed with his damages lawsuit contemporaneously with Stanzel's appeal or wait to see the outcome of the Stanzel case before deciding how to proceed. She laid out several options, including asking the hearing examiner to rule that annexation was not a reasonable condition for water service, asking the hearing examiner to stay the LUPA II matter pending the outcome of Stanzel's appeal, moving ahead to set the damages claim for trial, or moving to stay all trial court proceedings.
Lake ultimately recommended that Spice ask the hearing examiner to stay the administrative proceeding and to ask the trial court to stay the damages trial pending the outcome of the Stanzel case. Spice agreed that the "outcome of Stanzel is paramount" and told Lake to "HOLD OFF ON EVERYTHING UNTIL THE OUTCOME OF THE STANZEL APPEAL" so long as they would not lose any rights. Lake took no action in superior court or before the hearing examiner.
In March 2009, Division Two concluded that Lake's voluntary withdrawal of the LUPA I petition extinguished Spice's statutory right to judicial review of the hearing examiner's first decision and held that the trial court's order dismissing the LUPA I petition with prejudice and the order denying the motion to vacate that dismissal were moot. LUPA I, 149 Wn.App. at 467-68. The court further concluded that Spice's appeal was frivolous and awarded fees to Pierce County and the City. Id. at 468. The Washington Supreme Court granted review of this ruling but the parties settled before oral argument when the City agreed to forgo the fee award.
On December 8, 2009, while the LUPA II case was still on hold, Mathews died. Shortly after her death, Spice recorded several quitclaim deeds granting him title to several of Mathews' properties, including the remaining interest in the Property. Spice informed Lake of Mathews' passing but told her the Property was in his name and he did not want Mathews' estate to be involved. Lake told Spice that nothing needed to be done if the Property was in Spice's name and she did not inform the court of Mathews' death.
Shortly thereafter, Spice became involved in litigation with Mathews' only living child, Donna DuBois, the personal representative of Mathews' estate. DuBois and Spice had a contentious relationship and, according to Spice, DuBois refused to cooperate with him and frustrated his attempts to obtain financing and develop the Property. Spice filed a creditor's claim in Mathews' probate, leading DuBois to assert that the Mathews Estate owned the Property and several other properties then held in Spice's name. Spice initiated a lawsuit against DuBois to quiet title in the properties. DuBois filed counterclaims against Spice alleging fraud, undue influence, negligence, and breach of...
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