Daniel Luchterhand, Resp. v. Michael Crossan Dba Lk. Washington Boat Ctr., App. ( 2015 )

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DANIEL LUCHTERHAND, an individual,
No. 71208-0-1
Respondent,
DIVISION ONE
v.
UNPUBLISHED OPINION
CHARLES "CHARLIE" SILVERS, an
individual; and U.S. ENGINES
CORPORATION, a Washington
corporation, d/b/a U.S. ENGINE, INC., and
U.S. ENGINES, and U.S. MARINE
ENGINES CORPORATION, and U.S.
ENGINE AND IMPORT ENGINE, INC.;
and LAKE WASHINGTON BOAT, INC.,
d/b/a LAKE WASHINGTON BOAT 3= Pro
CENTER, i
•'1.
Defendants,
V,'} :-.'->
MICHAEL CROSSAN, an individual, and '.:")
ROWENA CROSSAN, an individual, d/b/a
LAKE WASHINGTON BOAT CENTER,
Appellants. FILED: March 2, 2015
Appelwick, J. — The Crossans appeal the trial court's denial of their CR 60 motion
to vacate a judgment on an arbitration award. The Crossans sought a trial de novo.
Luchterhand sought judgment on the arbitration award, arguing that the Crossans had
waived their right to trial de novo by not participating at the arbitration without good cause.
The trial court struck the Crossans' request for trial de novo and entered judgment in favor
of Luchterhand. The Crossans moved to vacate the judgment, claiming that Michael's
sickness on the day of the arbitration constitutes an unexpected illness or misfortune that
is a basis for vacation of the judgment under CR 60. The unexpected illness or misfortune
did not prevent the Crossans from participating in the litigation regarding their request for
No. 71208-0-1/2
a trial de novo. The denial of the trial de novo necessarily resolved that the Crossans did
not have good cause for failing to participate in the arbitration. We affirm.
FACTS
Daniel Luchterhand purchased a boat engine from U.S. Engine Inc. U.S. Engine,
Inc. was governed by Michael Crossan and Rowena Crossan.1 Luchterhand experienced
mechanical difficulty with the engine on several occasions. After attempts to repair the
engine failed, Luchterhand sued the Crossans for violations of the Consumer Protection
Act, chapter 19.86 RCW, and breach of warranty.
The dispute proceeded to arbitration. The arbitration was initially scheduled for
May 3, 2013. The Crossans requested that the arbitration be delayed so they could obtain
counsel and adequately prepare. Consequently, the arbitration date was extended until
May 20, 2013. On May 17, 2013, the Crossans requested another continuance, because
they planned to make an evidentiary video on May 15, 2013 and the video would not be
ready for the arbitration. The arbitrator, Robert Henry, agreed and the arbitration was
rescheduled to June 10, 2013. Luchterhand's counsel then requested a continuance
because of a family vacation. The arbitration was then set for June 17, 2013 at 9 a.m.
On June 17, 2013 at 8:45 a.m., Michael contacted Henry and said that he "cannot
even e[-]mail correctly just sick." In that same e-mail he wrote a few more sentences
defending against the lawsuit. Henry responded that the hearing would not be postponed
again and that he expected both parties to arrive at 9 a.m. Earlier that morning at 8:35
a.m., Michael e-mailed Luchterhand's attorney and said that he was dehydrated due to
1 Moving forward we refer to the Crossans by their first names for clarity. No
disrespect is intended.
No. 71208-0-1/3
hot weather and could not attend the arbitration. Michael explained his illness in one
sentence, but continued on for several paragraphs in which he defended against the
lawsuit. Neither Michael nor Rowena appeared at the arbitration on June 17. But, the
arbitration proceeded and Luchterhand presented over three hours of testimony,
evidence, and argument. Henry entered an arbitration award in favor of Luchterhand on
June 25, 2013—over a week after the arbitration was held. The arbitration award
indicated that the Crossans failed to participate at the hearing.
On July 3, 2013, the Crossans filed a request for a trial de novo with declarations
of Michael and Rowena attached. Michael's declaration explained that he has cancer
and that when he becomes ill he is unable to move for days. He claimed he was ill on
the date of the arbitration. Rowena's declaration explained that Michael got sick the
afternoon before the arbitration and was not able to move again until the following day.
She cited to Michael's cancer as the reason for their absence and said, "[A] full report is
available from his doctors [at the University of Washington] hospital and Seattle cancer
care center."
On July 31, 2013, Henry issued an amended arbitration award including attorney
fees and costs for Luchterhand. The award cited to MAR 5.4 and indicated that the award
was based partly on the failure of the Crossans to participate at the arbitration.
On August 8, 2013, the Crossans filed a request for a trial de novo from the July
31, 2013 award. The Crossans' request was timely as it was made within the 20 day
period mandated by MAR 7.1. Subsequently, on August 23, 2013, Luchterhand filed a
motion to strike the request for a trial de novo. Luchterhand argued that the Crossans
waived their right to request a trial de novo pursuant to MAR 5.4 and that they failed to
No. 71208-0-1/4
show good cause to the arbitrator for their absence. That same day, Luchterhand filed a
motion for judgment on the arbitration award. On September 5, 2013, the Crossans
responded to Luchterhand's motion2 stating that their absence at the arbitration was due
to Michael's pain resulting from his cancer treatments. They argued that Michael's illness
was not a valid reason to deny their request for a trial de novo. On September 6, 2013,
Luchterhand filed a reply memo regarding his motion to strike the Crossans' request for
a trial de novo.
On September 12, 2013, the trial court granted Luchterhand's motion to strike the
Crossans' request for a trial de novo without oral argument. That same day, the trial court
entered judgment on the arbitration award, also without oral argument. On October 3,
2013, represented by counsel for the first time,3 the Crossans filed a CR 60 motion to
vacate the judgment. They argued that Michael's illness constituted an unavoidable
casualty or misfortune as contemplated by CR 60(b)(9) that prevented them from
defending at the arbitration. Among other evidence, the Crossans attached the
declaration of Dr. Chet Jangala who claimed that on June 17, 2013, he received a call
from Rowena stating that Michael was having severe stomach pain and cramping. Dr.
Jangala said that he advised Rowena to have Michael stay in bed or risk damage to his
small intestine.
2 It appears that the Crossans' motion was a response to Luchterhand's motion to
strike request for a trial de novo.
3The Crossans claimed they needed the first continuance of the arbitration to find
legal counsel, but it does not appear that they obtained counsel until this time.
No. 71208-0-1/5
The trial court held a show cause hearing on the Crossans' CR 60 motion on
November 1, 2013. After hearing argument from the parties, the trial court denied the
Crossans' motion and awarded fees to Luchterhand for responding.
The court opined that as of the date of the show cause hearing, there was still no
declaration from a doctor expressing a medical opinion that Michael was medically unable
to attend the arbitration. The trial court noted that Dr. Jangala's declaration does not even
mention the time he spoke to Rowena and that there was no mention of the call to Dr.
Jangala or of Dr. Jangala's advice in Michael's e-mails to Henry and Luchterhand's
counsel. The trial court also considered the fact that the arbitrator did not have very much
information about Michael's illness at the time of the hearing. The court concluded that
there was an insufficient showing for relief under CR 60 and that an evidentiary hearing
was unnecessary. The Crossans appeal.
DISCUSSION
I. Crossans' Request for Relief under CR 60(b)(9)
For good cause shown, an arbitrator may allow a party absent from an arbitration
an opportunity to appear at a subsequent hearing before making an award. MAR 5.4. A
party who fails to participate in arbitration without good cause waives the right to a trial
de novo. ]d.
Here, the arbitration proceeded as scheduled on June 17, 2013. On June 19,
2013, Henry informed both parties that the hearing went forward to conclusion and that
he would make his decision in a few days. On June 25, 2013, Henry entered his initial
judgment based, in part, on MAR 5.4 and the Crossans' failure to participate at the
arbitration. Henry entered his initial judgment on June 25, 2013—over one week after he
No. 71208-0-1/6
heard Luchterhand's case, one week after Michael's symptoms began to subside,4 and
six days after Henry informed the parties that he was in the process of making his
decision. There is no indication inthe record that the Crossans contacted Henry between
June 17, 2013 and the day Henry entered the judgment in an attempt to make a showing
of good cause. The only information Henry had about Michael's illness when he entered
the arbitration award was what he gleaned from Michael's June 17th e-mail—that he was
"just sick."
On July 3, 2013, the Crossans brought the issue of good cause for their absence
before the trial court. The Crossans filed a request for a trial de novo and attached
declarations from both Michael and Rowena. The Crossans explained that Michael has
colon cancer and had been too ill to attend the arbitration. The Crossans filed another
request for a trial de novo after the arbitration award was amended. On September 5,
2013, in their answer to Luchterhand's motion to strike their request for a trial de novo,
Michael argued that his illness was a sufficient reason to grant a trial de novo. In this
response to Luchterhand's motion, unlike in their declarations attached to their request
for a trial de novo, Michael referred the court to specific doctors at the Seattle Cancer
Center (Dr. Whiting) or the University of Washington Hospital (Dr. Gary Mann). Michael
claimed that the doctors would be willing to provide letters attesting to his cancer
treatment. Michael also offered to sign a release allowing the court to contact the doctors
directly.
4 In her declaration attached to the Crossans' request for a trial de novo, Rowena
indicated that Michael was regaining his strength on May 18, 2013. As the arbitration
was on June 17, 2013, we assume that Rowena meant June 18, 2013.
No. 71208-0-1/7
By requesting a trial de novo, the Crossans were effectively arguing to the trial
court that Michael's illness constituted sufficient good cause under MAR 5.4 to avoid
waiving the right to a trial de novo. Before the trial court could enter judgment on the
arbitration award for Luchterhand, it had to resolve whether the Crossans did, in fact,
waive their right to a trial de novo by failing to participate at the arbitration. Based on the
evidence submitted, the trial court denied the Crossans' request for a trial de novo and
entered judgment on the arbitration award. By virtue of this decision and subsequent
entry of judgment, the trial court effectively ruled that the Crossans failed to show the
requisite good cause necessary to avoid waiving their right to a trial de novo under MAR
5.4.
Therefore, the appropriate challenge on appeal is whether the trial court abused
its discretion when it ruled that the Crossans failed to show sufficient good cause to
warrant a trial de novo. Where the decision or order of the trial court is a matter of
discretion, it will not be disturbed on review except on a clear showing of abuse of
discretion—discretion that is manifestly unreasonable, or exercised on untenable
grounds, or for untenable reasons. Pvbas v. Paolino. 73 Wash. App. 393, 399, 869 P.2d
427(1994).
Based on the record before us, at the time the trial court ruled on the Crossans'
request for trial de novo, there was little evidence supporting the Crossans' argument that
Michael's sickness constituted good cause. The only evidence was the Crossans'
declarations and their response to Luchterhand's motion to strike, which reiterated what
was in the Crossans' declarations. The trial court had no declaration from a doctor—only
declarations from Michael and Rowena that Michael was sick on the day of the arbitration,
No. 71208-0-1/8
that Michael suffers from colon cancer, and that he has doctors that treat him at two
different treatment facilities. The Crossans had not provided any sworn testimony that
Michael was not able to attend the arbitration. Luchterhand's motion to strike informed
the trial court that he repeatedly, fruitlessly requested that the Crossans produce evidence
to his attorney that Michael was too ill to attend the arbitration. The Crossans made no
attempt to explain to the trial court why Rowena was not able to attend the arbitration to
protect their interests. Luchterhand also informed the trial court that the arbitration had
already been delayed twice at the Crossans' request. The trial court did not abuse its
discretion in striking the Crossans' request for a trial de novo and subsequently entering
a judgment on the arbitration award.
The Crossans then moved to vacate the judgment on the arbitration award. They
contended that under CR 60(b)(9), they adequately showed that casualty or misfortune
prevented their attendance at the arbitration and that the judgment should be set aside.
The trial court denied the Crossans' CR 60(b)(9) motion to vacate. The trial court
reasoned that as of the date of the show cause hearing, despite the addition of Dr.
Jangala's declaration, there was still no evidence that Michael was medically unable to
attend the arbitration.
A motion under CR 60(b)(9) is properly directed at the judgment and the
proceeding in the superior court that led to that judgment. See CR 1 ("These rules govern
the procedure in the superior court."); CR 60(b) ("On motion and upon such terms as are
just, the court may relieve a party . . . from a final judgment."). Based on the record,
neither casualty nor misfortune prevented the Crossans from properly advocating for their
request for a trial de novo or defending against entry of judgment in the superior court.
8
No. 71208-0-1/9
They defended before the superior court their request for a trial de novo and defended
against Luchterhand's argument that the Crossans failed to participate in the arbitration
without good cause. They asserted before the superior court that casualty or
misfortune—Michael's illness—prevented their participation in the arbitration proceeding.
Repeating those arguments and adding additional evidence was akin to a motion to
reconsider the denial of the motion for trial de novo, even though framed as a motion
under CR 60(b)(9). The Crossans were not entitled to a second bite at that apple using
CR 60. Relief under CR 60(b)(9) is plainly unavailable on these facts.
We acknowledge that Luchterhand did not object to the trial court's consideration
of the motion on these grounds. Reaching the merits of the motion as argued, the
evidence in the record supports the trial court's conclusion that Michael had not
demonstrated that he was medically unable to attend the arbitration. The trial court did
not abuse its discretion by denying the Crossans relief from judgment under CR 60(b)(9).
II. Luchterhand's Attorney Fees
Luchterhand argues that he is entitled to attorney fees and costs for this appeal.
MAR 7.3 stipulates that the court shall assess costs and reasonable attorney fees
against a party who appeals an arbitration award and fails to improve its position on the
trial de novo. MAR 7.3 does not require the trial de novo to proceed on the merits in order
to trigger a fee and cost award on appeal. See Kim v. Pham, 95 Wash. App. 439, 446-47,
975 P.2d 544 (1999). The Kim court interpreted MAR 7.3 to require a mandatory award
of attorney fees when a party requests a trial de novo and does not improve on their
position at trial because they failed to comply with the requirements for proceeding to a
trial de novo. Id, One requirement of proceeding to a trial de novo is attendance at the
No. 71208-0-1/10
arbitration. See MAR 5.4 (failure to participate at arbitration without good cause waives
the right to a trial de novo).
The Crossans timely requested a trial de novo, but their request was denied. The
Crossans failed to comply with the requirements of MAR 5.4. As discussed above, the
Crossans had an opportunity to provide good cause for their absence at the arbitration
and they failed to do so. Therefore, the Crossans failed to comply with the requirements
for proceeding to a trial de novo. As the Crossans have not improved their position, we
grant Luchterhand's request for attorney fees and costs on appeal.
We affirm.
WE CONCUR:
)/Not