SYKES v. ELLENBURG CAPITAL CORPORATION

• Decision Date: 16 April 1999
• Docket Number: No. 22772-0-II,22772-0-II
• Citation: SYKES v. ELLENBURG CAPITAL CORPORATION, No. 22772-0-II (Wash. App. Apr 16, 1999)
• Court: Washington Court of Appeals
• Parties: ALBERT C. SYKES, ET AL., RESPONDENTS, v. ELLENBURG CAPITAL CORPORATION, ET AL., APPELLANTS.

[1]
[2]	ALBERT C. SYKES, ET AL., RESPONDENTS,; v.; ELLENBURG CAPITAL CORPORATION, ET AL., APPELLANTS.
[3]	No. 22772-0-II
[4]	Washington Court of Appeals
[5]	Source of Appeal: Appeal from Superior Court of Pierce County Docket No: 96-2-07725-4 Judgement or order under review Date filed: 12/05/1997 Judge signing: Hon. Terry D. Sebring
[6]	April 16, 1999
[7]	Counsel: Counsel for Appellant(s) Thomas R. Merrick Bullivant Houser Bailey Pendergrass & Hoffman 2400 Westlake Ofc Tower 1601 Fifth Avenue Seattle, WA 98101-1618 R. D. Lindahl Bullivant Houser Bailey 300 Pioneer Tower 888 SW 5th Ave Ste 300 Portland, OR 97204-2089 Robert J. Roche Bullivant Houser Bailey Pendergrass & Hoffman 2400 Westlake Ofc Tower 1601 Fifth Avenue Seattle, WA 98101-1618 Counsel for Respondent(s) Hollis H. Barnett Campbell Dille & Barnett 317 Meridian St S Puyallup, WA 98371-5913 Charles K. Wiggins Attorney At Law 241 Madison Ave N Bainbridge Is, WA 98110
[8]	The opinion of the court was delivered by: Bridgewater, J.
[9]	Judges: Authored by Carroll C. Bridgewater Concurring: J. Dean Morgan Karen G. Seinfeld
[10]	[Editor's note: originally released as an unpublished opinion]
[11]	Ellenburg Capital Corporation, Diversified Partners, Inc., Gerald D. Ellenburg, "Jane Doe" Ellenburg, and Ell-Cap/Diversified 49 (collectively "Sellers") appeal an order confirming a settlement agreement and an order imposing CR 11 sanctions. A commissioner of this court bifurcated Sellers' remaining appeal issues, principally involving the trial court's grant of summary Judgement in favor of plaintiffs Albert C. Sykes, David Hamm, Jr., Rose Hamm, Stephen R. Sandberg and Mary L. Sandberg (collectively "Purchasers"). We hold that the settlement between the parties disposed of the right of appeal and we affirm the order confirming settlement. We affirm the CR 11 sanctions because the Sellers' position was for the purpose of delay, and we impose an award under RAP 18.9 for compensatory damages and attorney's fees because this appeal is frivolous. Sellers' appeal of the summary Judgement is moot and is dismissed. We affirm.
[12]	In 1994, Purchasers bought the Bowman Hilton mobile home park from the Sellers for approximately $4,400,000. The mobile home park lies in a flood zone adjacent to the Puyallup River. Two years after the sale, the Puyallup River breached an up-river dike and flooded the mobile home park, reducing its value to $1,200,000. Purchasers sued Sellers for misrepresentation, based in part on the failure of Sellers to disclose a 1984 Army Corps of Engineers report specifically recommending that a new dike be built between the mobile home park and the Puyallup River. Sellers assert, both here and below, that Purchasers knew the mobile home park was located in a flood zone and Purchasers were negligent in failing to make further inquiries into the risks posed by flooding. Early in the litigation, Purchasers obtained a pre-Judgement writ of attachment against another property owned by Sellers known as the Thunderbird mobile home park. Purchasers and Sellers cross-moved for summary Judgement. The trial court granted summary Judgement against all but one of the defendants. The remaining defendant, Ellenburg Capital Corporation, had declared bankruptcy, staying any proceedings against it. (The bankruptcy stay was eventually lifted.) After a hearing concerning damages, the trial court, on December 5, 1997, entered Judgement in favor of Purchasers for $3,800,000.
[13]	On December 18, 1997, Purchasers' attorney (Barnett) sent a letter to Sellers' attorney (Merrick) outlining a proposed settlement covering all defendants. The letter stated in pertinent part:
[14]	Dear Mr. Merrick: This is a follow up to our telephone conversation on December 17, 1997, in reference to the pending action.
[15]	1. Plaintiffs would proceed with a sheriff's sale and execution of the Judgement of the Thunderbird Mobile Home Park and would bid in $4,000,000.00 less the current amount owing to Pacific Mutual.
[16]	2. All four (4) Defendants would cooperate with the sheriff's sale and not raise legal objections or encourage others to do so, including the filing of any bankruptcies.
[17]	3. The current trial date for Ellenburg Capital Corporation set for April 1, 1998, would be continued, and four (4) months following the sheriff's sale, if there had been no further legal contest of the execution including any bankruptcy filings, Plaintiffs would then file a full satisfaction of the Judgement with the Pierce County Clerk, and dismiss the pending action against Ellenburg Capital Corporation. During the interim, Plaintiffs would defer any further execution proceedings, and discovery in reference to Ellenburg Capital Corporation.*fn1
[18]	Essentially, Purchasers proposed exchanging the Thunderbird mobile home for a satisfaction of the Judgement. The proposed settlement amounted to a substantial discount of the Judgement because the Sellers' net equity in Thunderbird was about $2,500,000. On December 26, 1997, Sellers filed a notice of appeal of the summary Judgement orders. On December 31, Sellers accepted the settlement proposed in Purchasers' December 18 letter. Merrick wrote simply:
[19]	Dear Mr. Barnett: The defendants hereby accept your clients' proposal/offer as set forth in items 1 through 3 in your December 19, 1997 letter to me. Sincerely, Thomas R. Merrick.
[20]	The attorneys agreed that Purchasers' attorney would prepare a more formal settlement agreement. Barnett sent the formal settlement agreement to Merrick on January 8, 1998. But, on the same day, Merrick sent a letter to Barnett stating that there was no need for further documentation because the attorneys'

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