Wagner Development, Inc. v. Fidelity and Deposit Co. of Maryland

• Decision Date: 28 May 1999
• Docket Number: No. 21861-5-II,No. 6191833,R,6191833,21861-5-II
• Citation: 95 Wn.App. 896,977 P.2d 639
• Court: Washington Court of Appeals
• Parties: WAGNER DEVELOPMENT, INC., a Washington corporation, Appellant, v. FIDELITY AND DEPOSIT COMPANY OF MARYLAND, Bondespondent.

Page 896

95 Wn.App. 896

977 P.2d 639

WAGNER DEVELOPMENT, INC., a Washington corporation, Appellant, v. FIDELITY AND DEPOSIT COMPANY OF MARYLAND, Bond No. 6191833,

Respondent.

No. 21861-5-II.

Court of Appeals of Washington,

Division 2.

May 28, 1999.

[977 P.2d 641] William Henry Broughton, Broughton & Assoc. Inc. Ps, Silverdale, for Respondent.

Jeffrey Gene Poole, Jeffrey G. Poole Pc, Seattle, forAppellant.

SEINFELD, J.

Wagner Development, Inc. appeals from a summary judgment dismissing its action for wrongful attachment. Although the attaching party later prevailed on the issue specified in the writ of attachment--breach of contract--it did not obtain a favorable overall judgment on the related claims before the trial court. Rather, Wagner obtained a net monetary recovery on its related lien foreclosure action. Finding this fact determinative, we reverse.

FACTS ¹

Eileen Hansen, a property developer, contracted with Pape & Sons Construction, Inc., for site preparation for a residential development in Poulsbo, Washington. Pape awarded a subcontract for a portion of the work to Wagner. But Wagner left the project after it became involved with Pape in a dispute about the work. Pape then completed the work using other subcontractors, but the dispute resulted in additional costs to Hansen and delays to the project schedule.

Meanwhile, Wagner filed a lien against the property and in April 1991, brought an action for lien foreclosure based upon its claim that it was not paid for its services. In May 1991, Hansen sued Pape for various contract related damages. Among her contentions was a claim that Pape breached its contract to her by allowing liens that Wagner Pape's answer included a counterclaim and a third party complaint against Wagner. The third party complaint alleged that Wagner breached its contract with Pape by failing to perform its work properly and by filing a wrongful lien against the subject property. Pape sought contract damages in excess of $200,000. Wagner counterclaimed for breach of contract against Pape.

and a second subcontractor had filed against the property to remain. Hansen also alleged that Pape was liable for the legal expenses she had and would incur defending against Wagner's lien foreclosure action.

In July 1993, Pape filed an affidavit for attachment of Wagner's personal property. The affidavit caption contained the cause numbers for Hansen's breach of contract action (92-2-01994-1) and for Wagner's lien foreclosure action (91-2-00741-3). The affidavit stated that "the purpose of the cause of action is to recover damages for breach of contract." The trial court issued the writ in September; Fidelity and Deposit Company of Maryland posted the required attachment bond on behalf of Pape. All documents contained both cause numbers.

A year later, the trial court consolidated Hansen's breach of contract action with Wagner's foreclosure action. Hansen and Pape settled; thus, only the claims between Wagner and Pape were at issue at trial.

The jury found that Wagner had breached its contract with Pape and awarded Pape damages of $13,741; it did not award Wagner any damages on its counterclaim for breach of contract. But the trial court awarded Wagner $17,237.43 on the lien foreclosure claim and $25,000 in attorney fees. After offsetting Pape's award against Wagner's and adding in interest and attorney fees, the trial court entered a $35,850.83 judgment for Wagner. ² The trial court then granted Wagner's motion to quash the writ of attachment and release the funds.

Wagner subsequently filed this action for wrongful attachment against Fidelity. Both parties moved for summary judgment. The superior court granted Fidelity's motion and dismissed Wagner's claims. It also ordered the release of the attachment bond.

Wagner moved for reconsideration, attaching several pleadings and rulings from the underlying breach of contract and lien foreclosure actions. Wagner argued for the first time that the court should have considered this evidence in ruling on the motions for summary judgment and also argued for the first time that a ruling in the underlying contract case, providing that Wagner could file an action for wrongful garnishment, should act as the law of the parties' case and bar further consideration of the issue on collateral estoppel grounds. The court refused to consider the attachments to the reconsideration motion and denied the motion.

Wagner appeals the trial court's orders denying its motions for summary judgment and for reconsideration. It argues that because Pape recovered nothing following trial, the attachment was wrongful; that Pape is collaterally estopped from contesting the wrongfulness of its conduct; and that the law of the case doctrine bars Pape's claim of wrongfulness.

ANALYSIS

In reviewing a summary judgment, we engage in the same analysis as the trial court: "a motion for summary judgment is properly granted if the moving party shows that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Sneed v. Barna, 80 Wash.App. 843, 847, 912 P.2d 1035 (1996). "Summary judgment is appropriate if reasonable persons could reach but one conclusion." Plotkin v. State, 64 Wash.App. 373, 377, 826 P.2d 221 (1992) (citing Carlson v. Gibraltar Sav., 50 Wash.App. 424, 428, 749 P.2d 697 (1988)). We consider the facts in the light most favorable to the nonmoving party. Bowles v. Washington Dep't of Retirement Sys., 121 Wash.2d 52, 62, 847 P.2d 440 (1993); Sneed, 80 Wash.App. at 847, 912 P.2d 1035; CR 56(c).

I. WRONGFUL ATTACHMENT

Attachment and prejudgment garnishment are procedures for seizing a defendant's property before judgment is entered in a pending action. KELLY KUNSCH, 1A WASHINGTON PRACTICE, METHODS OF PRACTICE § 51.1, at 397 (1997). These prejudgment remedies are used (1) to protect against a defendant's disposing of property before a plaintiff can obtain a judgment and execute against the property, (2) to obtain security for any judgment that may be obtained, or (3) to obtain jurisdiction quasi in rem when personal jurisdiction cannot be obtained over a defendant. 1A WASH. PRAC . § 51.1, at 397. Attachment is directed against property of the defendant which is in his possession or control, while the object of garnishment is to reach an indebtedness due the defendant by a third person, or property in the possession of a third person that belongs to the defendant. 7 C.J.S., Attachment § 2, at 227 (1980).

In Washington, attachment proceedings are governed by RCW 6.25. Before a writ of attachment can issue, the plaintiff must execute and file with the court clerk a surety bond. RCW 6.25.080(1). A defendant who suffers actual damages as a result of a wrongful attachment may sue on the bond or may sue the plaintiff or the sheriff in a common law action. 1A WASH. PRAC . § 51.3, at 400. The best choice of remedy may be an action on the bond because RCW 6.25.100, which governs such actions, allows the recovery of exemplary damages and because an action on the bond permits flexibility in choice of parties. Such an action may be brought against the surety and the plaintiff, the plaintiff alone, or the surety alone. 1A WASH. PRAC . § 51.3, at 401.

A defendant bringing an action on the attachment bond for actual damages and attorney fees must prove "that the attachment was wrongfully sued out." RCW 6.25.100. ³ The defendant may conclusively prove wrongful attachment by showing that it obtained a final judgment in its favor in the underlying action. "Nothing more need be proved to establish liability under ... an attachment bond...." 1A WASH. PRAC . § 51.3, at 399; see also Ross v. Peck Iron & Metal Co., 264 F.2d 262, 267 (4th Cir.1959) (as a general rule, no cause of action for wrongful attachment will accrue if the plaintiff prevails); but see 7 C.J.S. § 395, at 741 (judgment for plaintiff on merits of cause of action supporting attachment is not conclusive that attachment was not wrongful). If the plaintiff did not obtain a judgment in its favor, the court must discharge the attachment. 1A WASH. PRAC . § 51.36, at 429. Thus, a dissolution of the attachment on the merits is conclusive proof that the writ was wrongfully obtained. 7 C.J.S. § 395, at 740; Gale v. Transamerica Corp., 65 Ill.App.3d 553, 22 Ill.Dec. 92, 382 N.E.2d 412, 415 (1978).

In the present case, Pape sought a writ of attachment on the basis that its claim was for breach of contract. One of the grounds for issuing a writ of attachment is that the object for which the action is brought is to recover on a contract. RCW 6.25.030(10). Pape recovered approximately $13,000 on its breach of contract claim against Wagner, and Wagner recovered nothing on its breach of contract counterclaim.

But the trial court found that Wagner was entitled to approximately $17,000 in the lien foreclosure action that arose out of the same contractual obligations and was consolidated with the contract action before trial. Further, Pape pleaded the lien foreclosure issue in its contract cause of action and identified it by cause number on all the attachment pleadings and the order of attachment. After entering judgment for Wagner, the trial court ordered the writ of attachment quashed and the funds released to Wagner's attorneys. Thus, Wagner's contention that Pape did not prevail on its contract claim because it recovered nothing and because the writ of attachment was quashed has merit. ⁴

Fidelity, citing Brown v. Peoples Nat'l Bank, 39 Wash.2d 776, 238 P.2d 1191 (1951), argues that Pape did recover on its breach of contract claim and that Wagner's lien foreclosure recovery is irrelevant because the writ of attachment was based on the contract action. In Brown, the Bank submitted an affidavit in support of its motion for a prejudgment writ of attachment. The affidavit set forth two grounds for issuance of the writ. One was that the defendants were about to...