Weiss v. Lonnquist

• Decision Date: 14 December 2009
• Docket Number: No. 62754-6-I.,62754-6-I.
• Court: Washington Court of Appeals
• Parties: Reba WEISS, a single person, Respondent, v. Judith A. LONNQUIST, a single person, and Law Offices of Judith A. Lonnquist, P.S. a Washington professional services corporation, Appellants.

224 P.3d 787

153 Wash.App. 502

Reba WEISS, a single person, Respondent, v. Judith A. LONNQUIST, a single person, and Law Offices of Judith A. Lonnquist, P.S. a Washington professional services corporation, Appellants.

No. 62754-6-I.

Court of Appeals of Washington, Division 1.

December 14, 2009.

Elizabeth L. Van Moppes, Law Offices of Elizabeth Van Moppes, Seattle, WA, for Appellants.

Judith A. Lonnquist, Law Offices of Judith A. Lonnquist, P.S., Seattle, WA, pro se.

Robert B. Gould, Attorney at Law, Seattle, WA, for Respondent.

DWYER, A.C.J.

¶ 1 Where a fixed term employment contract expires and the employee continues to render the same services provided under the previous agreement, a court will presume that the employee is serving under a new, implied contract having the same terms and conditions as contained in the expired contract. However, where it is clear that the implied contract does not have the same terms and conditions as the earlier agreement, there is no basis to presume that the contracting parties necessarily renewed any specific term of the prior agreement. Because the evidence in the record and the pleadings herein establish that Judith Lonnquist and Reba Weiss did not completely renew the terms of Weiss's written, fixed-term employment contract after Lonnquist terminated it, there is no basis to presume that the parties subsequently entered into an implied agreement to arbitrate Weiss's employment-related claims as was provided for in the terminated contract. Inasmuch as a court cannot compel litigants to arbitrate claims unless they agreed to do so, the trial court correctly denied Lonnquist's motion to compel arbitration. Accordingly, we affirm.

I

¶ 2 On November 1, 2005, Weiss and Lonnquist executed a fixed-term employment contract ("the 2005 contract" or "the employment contract") employing Weiss as a full-time attorney with Lonnquist's law firm, the Law Office of Judith A. Lonnquist, P.S., a Seattle firm focusing on labor and employment matters.¹ According to the contract, Weiss would be "of counsel" to the firm, receive an annual base salary of $80,000 and employee benefits, and have a minimum billable hours target of 32 hours per week or 1,600 hours per year. The parties specified that "this Agreement shall be one year, from November 1, 2005 through October 31, 2006." The parties further specified two conditions under which the employment contract could be terminated during its term. First, the contract provided that Lonnquist had the right to immediately terminate Weiss's employment "for cause." Second, it provided that either party was entitled to terminate Weiss's employment without cause upon 30 days' written notice.² Finally, the contract contained an arbitration clause in which the parties agreed that "[a]ny dispute arising under this Agreement ... shall be submitted first to mediation and if still unresolved, to binding arbitration."³

¶ 3 Approximately nine months after executing the employment contract, Lonnquist decided to terminate it, supposedly because Weiss failed to meet billable hours targets. On July 14, 2006, Lonnquist provided Weiss with 30 days' notice of her intent to terminate the employment contract as of August 13, 2006. Lonnquist did not, however, terminate Weiss's employment with the firm. Weiss continued to work as an employee of the firm, apparently earning the same salary and benefits and subject to the same minimum billable hours targets as were provided in the now-terminated 2005 contract.

¶ 4 A little more than a year later, Lonnquist decided to fire Weiss. On August 20, 2007, Lonnquist gave Weiss 30 days' notice that her employment with the firm would terminate as of September 18, 2007.

¶ 5 The parties sharply dispute the reason why Lonnquist finally decided to terminate Weiss's employment with the firm. Lonnquist maintains that she did so because Weiss consistently failed to meet her minimum billable hours targets, resulting in a drain on the firm's financial resources. Weiss alleges that she was fired because she refused to file purportedly false witness testimony and an accompanying motion before a court on behalf of one of the firm's clients.

¶ 6 Whatever the reason for Weiss's discharge, her employment did not last even through the end of August. On August 22, Lonnquist restructured Weiss's compensation for the final month of her employment from a fixed salary to a sliding wage scale according to the number of hours Weiss billed. The next day, Weiss entered a hospital complaining of chest pains. Shortly thereafter, Weiss notified Lonnquist that she would not return to work at the firm. Lonnquist posted an announcement on the listservs of two Washington lawyer associations stating that Weiss was no longer employed by the firm and that Weiss's departure had "become more difficult than I would have hoped." Weiss's employment with the firm was terminated as of August 26, 2007.

¶ 7 In May 2008, Weiss sued Lonnquist, bringing five causes of action against her: (1) a claim for wrongful termination in violation of the public policy against lawyers knowingly filing false statements; (2) a common law tort claim for extreme and outrageous conduct; (3) statutory claims for unpaid wages, penalties, and fees pursuant to RCW 49.52.050(2) and .070; (4) a claim for defamation; and (5) a claim for negligent infliction of emotional distress.

¶ 8 After engaging in discovery, filing various pretrial motions, and attempting to mediate Weiss's claims, Lonnquist, in October 2008, moved to compel arbitration. In so doing, she initially relied on the arbitration provision in the terminated 2005 contract. Lonnquist then modified her theory, arguing that, after she terminated the 2005 contract, the parties had entered into an implied contract containing the same arbitration agreement as provided for in the 2005 contract. Lonnquist asserted that such an implied contract existed because Weiss continued to work for the firm for the same salary and benefits as she had received prior to termination of the 2005 contract. Lonnquist advanced this argument despite having claimed in September 2007—immediately after the termination of Weiss's employment—that the terms of the 2005 contract did not govern Weiss's employment and that Weiss was employed at will following the termination of the 2005 agreement,⁴ and having reiterated this position both in pleadings filed with the trial court⁵ and in answers to requests for admission.⁶

¶ 9 Without issuing written findings of fact or conclusions of law, the trial court denied Lonnquist's motion. Lonnquist timely appealed from this order pursuant to RAP 2.2(a)(3). See Stein v. Geonerco, Inc., 105 Wash.App. 41, 43-44, 17 P.3d 1266 (2001) (recognizing that the right to arbitrate is a "substantial right" under RAP 2.2(a)(3), thereby giving rise to a right to appeal directly from an order denying a motion to compel arbitration).

II

¶ 10 Lonnquist contends that the trial court erred in denying her motion to compel arbitration. We disagree.

¶ 11 We review de novo a trial court's order denying a motion to compel arbitration. Walters v. A.A.A. Waterproofing, Inc., 151 Wash.App. 316, 320, 211 P.3d 454 (2009) (citing Adler v. Fred Lind Manor, 153 Wash.2d 331, 342, 103 P.3d 773 (2004)). Regardless of whether the Federal Arbitration Act (FAA), 9 U.S.C. §§ 1-16, or the Washington Uniform Arbitration Act (UAA), chapter 7.04A RCW, applies, our analysis as to whether Weiss's claims are subject to arbitration begins in the same manner.⁷ As arbitration is a matter of contract, parties cannot be compelled to arbitrate unless they agreed to do so. AT & T Techs., Inc. v. Commc'ns Workers of Am., 475 U.S. 643, 648, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986) (quoting United Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960)) (applying FAA); Todd v. Venwest Yachts, Inc., 127 Wash.App. 393, 397, 111 P.3d 282 (2005) (quoting Collins & Aikman Prods. Co. v. Bldg. Sys., Inc., 58 F.3d 16, 19 (2d Cir. 1995)) (applying FAA); RCW 7.04A.070(1) (providing that a court shall order parties to arbitrate upon a "showing [of] an agreement to arbitrate"). Thus, our threshold inquiry concerns whether the parties entered into a valid agreement to arbitrate. McKee v. AT & T Corp., 164 Wash.2d 372, 394, 191 P.3d 845 (2008) (citing Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 445, 126 S.Ct. 1204, 163 L.Ed.2d 1038 (2006)).

¶ 12 Under Washington law, "[f]or a contract to exist there must be mutual assent to its essential terms." Jacob's Meadow Owners Ass'n v. Plateau 44 II, LLC, 139 Wash.App. 743, 765, 162 P.3d 1153 (2007) (citing Yakima County (W.Valley) Fire Prot. Dist. No. 12 v. City of Yakima, 122 Wash.2d 371, 388-89, 858 P.2d 245 (1993)). "`Mutual assent generally takes the form of an offer and an acceptance.'" Saluteen-Maschersky v. Countrywide Funding Corp., 105 Wash. App. 846, 851, 22 P.3d 804 (2001) (quoting Pac. Cascade Corp. v. Nimmer, 25 Wash. App. 552, 556, 608 P.2d 266 (1980)). "In determining the mutual intention of contracting parties, the unexpressed, subjective intentions of the parties are irrelevant; the mutual assent of the parties must be gleaned from their outward manifestations." Saluteen-Maschersky, 105 Wash.App. at 854, 22 P.3d 804 (citing City of Everett v. Estate of Sumstad, 95 Wash.2d 853, 855, 631 P.2d 366 (1981)).

¶ 13 "A contract may be oral as well as written, and a contract may be `implied in fact with its existence depending on some act or conduct of the party sought to be charged.'" Hoglund v. Meeks, 139 Wash. App. 854, 870, 170 P.3d 37 (2007) (quoting Bell v. Hegewald, 95 Wash.2d 686, 690, 628 P.2d 1305 (1981)). A finder of fact may deduce mutual assent to an agreement from the circumstances surrounding a transaction, inferring the existence of a contract based on a course of dealings between the parties or a common understanding within a particular commercial...