Donald R. Russell v. Joshua T. Auayan et ux ( 2015 )

FILED
APRIL 9, 2015
In the Office of the Clerk of Court
W A State Court of Appeals, Division III
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION THREE
DONALD R. RUSSELL, a married man, )
) No. 31946-6-111
Respondent, )
)
v. )
)
JOSHUA T. AUAYAN and IDA M. ) UNPUBLISHED OPINION
AUAY AN, husband and wife, )
)
Appellants. )
SIDDOWAY, C.J. - Joshua Auayan appeals the trial court's refusal to vacate a
stipulated settlement agreement and dismissal order that concluded Donald Russell's
action against Mr. Auayan and his wife. He argued to the trial court that the stipulated
agreement was substantively unconscionable; violated public policy; was not binding on
his wife, who did not assent to its terms; contained terms not prayed for in the original
complaint; and failed to resolve all of the issues raised in the complaint. Mr. Auayan's
arguments focus on orders and issues he failed to appeal rather than on the irregularities
in procedure contemplated by CR 60.
I
I
I No. 31946-6-III
I Russell v. Auayan
I While the trial court's award ofattomey fees and costs for Mr. Auayan's violation
I of the settlement agreement requires remand for the entry of findings and conclusions, we
find no abuse of discretion by the trial court in refusing to vacate the agreement. We
affirm that order and the court's order finding the Auayans in contempt. We award Mr.
Russell his reasonable fees and costs on appeal.
FACTS AND PROCEDURAL BACKGROUND
This case arises from longstanding disputes between Donald Russell and his
neighbors to the north-presently Joshua and Ida Auayan and formerly Mr. Auayan's
grandparents, Francisco and Renee Olalia. In prior litigation, Mr. Russell obtained a
negotiated decree under which he was authorized to improve a north-south easement to
his property from Bittrich-Antler Road in Stevens County. The residential property to the
west of the easement was owned by Marty and Diana Balam and the property to the east
of the easement was owned by the Olalias and later Mr. Auayan. Among the terms of the
decree were that Mr. Russell could build a fence 20 feet east of the west property line of
the Olalias' property to accommodate the easement. He was to leave a 20-foot opening
in the fence so that the Olalias could use the easement as secondary access into their west
yard. The decree ordered the Olalias not to interfere with Mr. Russell's maintenance of
the road and easement.
In the years thereafter, Mr. Russell alleges that the Olalia!Auayan families
intentionally misused the road he constructed on the easement, resulting in over $1,500 in
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No. 31946-6-111
Russell v. Auayan
damage. For that reason, because the Auayans had allegedly harassed him and even
threatened to kill him on one occasion, and because Mr. Russell believed the Auayans
were in violation of several protective covenants running with the parties' land, Mr.
Russell filed a nuisance action in March 2012.
Two copies of Mr. Russell's complaint (one for Mr. Auayan and one for his wife)
were personally served on Mr. Auayan at his home. Mr. Auayan entered a pro se notice
of appearance on April 13,2012, which was followed by a notice of appearance for both
Mr. and Ms. Auayan filed by two Stevens County lawyers on May 2, and an answer on
behalf of both Mr. and Ms. Auayan filed by the same lawyers on May 16.
Trial was scheduled for April 25, 2013. On the morning of trial, Mr. Russell and
Mr. Auayan appeared with their lawyers, informed the court that they were engaged in
settlement negotiations, and worked through the morning to reach a settlement agreement
that they reported to the court in the afternoon. The agreement imposed a number of
obligations on both parties, most of which are not germane to the appeal.
It included an agreement by the Auayans to execute a document terminating all
their rights to the western 20 feet of their property that was subject to the road easement
benefitting Mr. Russell. In exchange, Mr. Russell agreed to dismiss his complaint, to
install a new driveway approach on the west end of the Auayan property, and to provide
the Auayans with fence posts and spruce trees to plant along the south end of their
property.
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No. 31946-6-III
Russell v. Auayan
Once the parties reported to the court that they had reached an agreement, the
assigned trial judge, Judge Patrick Monasmith, convened proceedings and reviewed each
of the terms of the stipulated settlement agreement with the lawyers, Mr. Auayan, and
Mr. Russell. Judge Monasmith was informed that the whereabouts of Ms. Auayan, who
was not present in the courtroom, were unknown, and that the parties had agreed to have
a commissioner of deeds sign the necessary documents on her behalf. I A transcript
includes the lawyers' explanation of the circumstances:
[MR. RUSSELL'S COUNSEL]: The original vesting deed, Your
Honor, was to-it was a gift, I think, from [Mr. Auayan's] parents, or
grandparents, to him and so-but he is married. They don't even know
where his wife is right now. And apparently they did put in a notice of
appearance for both parties. And so we just want to bind her and this
termination that I'm asking to be signed is one that I'm going to have the
Commissioner of Deeds sign and this agreement itself is one I want the
Commissioner of Deeds to sign.
[THE AUA YANS' COUNSEL]: If I may, basically Mr. Auayan
and Ms. Auayan have been separated for five--eight years now but they're
still technically married. Mr. Auayan obtained the property prior to
marriage so it is his separate property, and if Ms. Auayan has any interest in
it, it would be in the marital property thereof. So it's just basically to
clarity that as being signed off on because we don't know where she is.
Clerk's Papers (CP) at 200-0l.
Following the court's review of the agreement with the parties and their lawyers,
the lawyers signed and the court entered a stipulation and order appointing Terry
ISee chapter 6.28 RCW, dealing with court appointment of commissioners to
convey real property when a party is ordered by a judgment to convey.
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No. 31946-6-111
Russell v. A uayan
Williams, a local lawyer, as a commissioner of deeds to sign for Ms. Auayan. The
parties' lawyers, Mr. Auayan, Mr. Russell, and Mr. Williams then signed a stipulated
settlement agreement. Judge Monasmith also signed the stipulated settlement agreement.
Both documents were filed on April 25.
A stipulation and an order dismissing Mr. Russell's complaint with prejudice were
filed the next day. The stipUlation provided that "[a]ny party failing to comply with the
fully executed Stipulated Settlement Agreement dated April 25, 20 l3 may be found in
Contempt of Court and ordered to pay costs and Attorneys fees." CP at 96. The order of
dismissal included similar language. No appeal was taken from any of the orders or the
court-endorsed stipulated settlement agreement filed in April 2013.
A Termination of Easement Rights document had been included as an exhibit to
the stipulated settlement agreement, was required to be signed by Mr. Auayan, and was
supposed to be delivered to Mr. Russell's lawyer after the satisfaction of certain
conditions. When it was not delivered and other terms of the settlement agreement were
allegedly violated, Mr. Russell filed a motion for a finding of contempt on July 1,20 l3.
On August 2, Mr. Auayan, represented by a new lawyer, moved pursuant to CR
60(b)(1) to vacate the stipulated settlement agreement entered over three months earlier.
The motion was supported by a declaration from Mr. Auayan. Two weeks later, he filed
a supporting memorandum that added CR 60(b)(5) as a basis for the motion.
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No. 3 I 946-6-III
Russell v. Auayan
A hearing was held on August 20 to address the motion to vacate and Mr.
Russell's earlier-filed motion for a finding of contempt. On the day of the hearing, Mr.
Auayan filed a declaration of Ida Auayan, which stated that she had never seen or agreed
to the settlement agreement and did not authorize Mr. Williams to "represent" her. CP at
238. The declaration stated that she supported the vacating of the order. Id. But it also
stated:
I had an attorney, as evidenced by the Notice of Appearance executed by
Kelsey L. Kittleson, filed on May 2,2012.
CP at 238. Ms. Kittleson was one of the two lawyers who had filed a notice of
appearance and answer on Ms. Auayan's behalf. She had participated in negotiating,
presenting and signing the Stipulated Settlement Agreement and related documents.
The hearing on the motions to vacate and for contempt were heard by Judge Allen
Nielson. He first heard argument of the motion to vacate and denied it. In doing so,
Judge Nielson observed that not only had Judge Monasmith visited the property before
the trial date and engaged in a colloquy with the lawyers about the settlement agreement
terms, but also:
at the hearing itself where the agreement is put on the record, [Judge
Monasmith] goes through each of the provisions in the agreement in some
detail, even making suggestions here and there about improvement and
sharpening, understanding by all parties, both sides, as to what they were
agreeing to. And he took some 34, 35, 36 pages of transcript to do all this.
So it was not cursory or superficial. It was in-depth, careful and well meant.
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Russell v. A uayan
And he, in the course of this hearing, he talked carefully to both
sides and then brought out, on the record, that both sides agreed fully with
what had been worked out here.
Report of Proceedings (RP) at 14.
Judge Nielson also detennined that the terms of the settlement agreement were not
unconscionable, explaining that he had considered whether the agreement was "truly one-
sided" or involved "taking advantage" of either party and had found "[n]othing of the
kind." Id. He elaborated:
This was an agreement that had consideration flowing both ways. Mr.
Russell was doing certain things, buying certain things to put on the
property. Working together with his neighbors to resolve this long­
standing dispute. And the agreement itself served that purpose. It was put
upon the record in a sensible, straightforward manner and I don't see
anything at that juncture, at this hearing back on April 25, 2013, but a
willingness to cooperate and work together at that point. And it looked like
it was a win-win for both sides.
The Court finds that there's nothing at all unconscionable or there's
no discrimination here that I can discern whatsoever. And so I see no basis
to vacate the-absence of findings, I don't see any authority for that, that
there has to be findings when you have ajoin[t] agreement that resolves a
lawsuit the morning of triaL So I will deny that motion to vacate the
agreement.
Id. at 14-15.
After denying the motion to vacate, Judge Nielson heard the contempt motion and
found Mr. Auayan in contempt. He announced that he would award Mr. Russell his
attorney fees and costs based on the parties' earlier agreements and orders and RCW
7.21.030(3), which provides that a court may order a person found in contempt of court
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No. 31946-6 1118
Russell v.Auayan
"to pay a party for any losses suffered by the party as a result of the contempt and any
costs incurred in connection with the contempt proceeding, including reasonable
attorney's fees." Following submission of a fee declaration by Mr. Russell's lawyer, the
court entered a judgment awarding fees and costs of $3,690.00.
Mr. Auayan filed a notice of appeal on September 17, timely appealing the
judgment and the August orders denying the motion to vacate and finding the defendants
in contempt.
ANALYSIS
CR 60(b) provides that on the motion of an aggrieved party a court may relieve a
party from a final judgment or order for any of several enumerated reasons. They include
among others "[m]istakes, inadvertence, surprise, excusable neglect or irregularity in
obtaining a judgment or order," CR 60(b)(1), and "[t]he judgment is void." CR 60(b )(5).
A trial court's denial of a motion to vacate under CR 60(b) is reviewed for an abuse of
discretion. Rivers v. Wash. State Conference ofMason Contractors, 145 Wn.2d 674,
697, 41 P3d 1175 (2002). A trial court abuses its discretion when its decision is
manifestly unreasonable, or exercised on untenable grounds, or for untenable reasons. Id.
at 684-85.
An appeal from denial of a CR 60(b) motion is limited to the propriety of
the denial not the impropriety ofthe underlying judgment. The exclusive
procedure to attack an allegedly defective judgment is by appeal from the
judgment, not by appeal from a denial of a CR 60(b) motion.
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No. 31946-6-111
Russell v. A uayan
Bjurstrom v. Campbell, 27 Wn. App. 449, 450-51, 618 P.2d 533 (1980) (emphasis
added).
CR 60(b)(5)
Mr. Auayan first contends that the trial court abused its discretion in refusing to
vacate the stipulated settlement agreement because the agreement was "void and
unenforceable from its inception" because its terms were substantively unconscionable,
violated the Auayans' rights of privacy and quiet enjoyment of their real property in
violation of public policy, and were not assented to by Ms. Auayan. Br. of Appellant at
V111.
"A void judgment is a 'judgment, decree or order entered by a court which lacks
jurisdiction of the parties or of the subject matter, or which lacks the inherent power to
make or enter the particular order involved.'" State ex ref. Turner v. Briggs, 94 Wn.
App. 299, 302-03, 971 P.2d 581 (1999) (quoting Dike v. Dike, 75 Wn.2d 1, 7,448 P.2d
490 (1968)).
The first and second issues of error identified by Mr. Auayan are substantive
challenges. They do not call into question the trial court's jurisdiction of the parties or
the subject matter, or its inherent power to enter the stipulated settlement agreement or
the related orders. They could be challenged only by appeal, and no timely appeal was
filed.
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Russell v. Auayan
In orally ruling on the motion to vacate, Judge Nielson went beyond the scope of a
CR 60(b)( 5) motion to patiently and persuasively explain why he was satisfied that no
substantive error had been made back in April 2013. But as a matter of law, Judge
Monasmith's entry of the stipulated settlement agreement and related orders could not be
"void" based on their alleged unconscionabililty or violation of public policy.
The third issue-Ms. Auayan's alleged lack of consent-fails for multiple reasons,
including Mr. Auayan's lack of standing to raise it and invited error or judicial estoppel,
where his lawyer assured the court that the real property at issue was Mr. Auayan's
separate property. But it also fails at its inception because Ms. Auayan appeared by her
lawyer, whose stipulation was sufficient.
"A written stipulation signed by counsel on both sides of the case is binding on the
parties and the court." Riordan v. Commercial Travelers Mut.lns. Co., 11 Wn. App. 707,
715,525 P.2d 804 (1974) (citing CR 2A; Cook v. Vennigerholz, 44 Wn.2d 612, 269 P.2d
824 (1954)). CR 2A governs stipulations and "requires certain admissions or proof
before a trial court can enter a judgment based upon an alleged agreement between the
parties and/or their attorneys." Briggs, 94 Wn. App. at 303. It provides that
[n]o agreement or consent between parties or attorneys in respect to the
proceedings in a cause, the purport of which is disputed, will be regarded
by the court unless the same shall have been made and assented to in open
court on the record, or entered in the minutes, or unless the evidence thereof
shall be in writing and subscribed by the attorneys denying the same.
CR2A.
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RCW 2.44.010 similarly provides that an attorney has authority to bind his client
in any action
by his or her agreement duly made, or entered upon the minutes of the
court; but the court shall disregard all agreements and stipulations in
relation to the conduct of, or any of the proceedings in, an action or special
proceeding unless such agreement or stipulation be made in open court, or
in presence of the clerk, and entered in the minutes by him or her, or signed
by the party against whom the same is alleged, or his or her attorney.
RCW 2.44.010(1).
This court's decision in Briggs compels the conclusion that Ms. Auayan's lawyer
could act on her behalf and that the court's action in reliance is binding on her. In Briggs,
a father argued that a judgment establishing his paternity and setting child support was
void because it was stipulated to by his lawyer, without the client's direct approval.
Briggs, 94 Wn. App. at 301. But the court held that the requirements of CR 2A were met
because the father's lawyer's both stipulated on the record in open court and signed an
agreed order, thereby giving the court authority to enter a judgment that was binding. Id.
at 304. Here, not only did Ms. Auayan's lawyer stipulate on the record in open court and
sign the stipulated settlement agreement and associated orders, but she also agreed to the
appointment of a commissioner of deeds to execute documents on Ms. Auayan's behalf.
No lack of consent is shown.
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Russell v. Auayan
CR 60(b)(1)
Mr. Auayan also argues that the settlement agreement was obtained by mistake
and should have been vacated under CR 60(b)(l) based on Ms. Auayan's absence and the
trial court's failure to enter findings of fact and conclusions of law. He makes a
seemingly related argument on appeal that the trial court's order contained issues that
were not addressed in Mr. Russell's complaint. We have already addressed the sufficient
representation of Ms. Auayan.
Mr. Russell's claims were resolved by a stipulated settlement. Had the parties
proceeded to trial, Mr. Russell could have sought leave to amend his complaint or the
parties could have tried issues not raised in the pleadings by consent and moved to amend
the pleadings to conform to the evidence thereafter. CR 15(a), (b). Parties are just as free
to enlarge upon issues raised in their original pleadings when they settle as they are to
enlarge upon the original issues when they try a case. No mistake is shown.
As to the trial court's asserted failure to enter findings of fact or conclusions of
law, none were required. The complaint was dismissed with prejudice by the parties'
agreement. Findings and conclusions are required by CR 52(a)(l) only in "actions tried
upon the facts without a jury or with an advisory jury." Again, no mistake is shown.
Lack ofjindings supporting attorney fee award
Finally, Mr. Auayan assigns error to the failure of the trial court to enter findings
and conclusions in support of its award of attorney fees to Mr. Russell for bringing the
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No. 31946-6-II1
Russell v. Auayan
motion for contempt. He relies on Mahler v. Szucs, 135 Wn.2d 398, 435, 957 P.2d 632(1998).
Where attorney fees are recoverable, Washington courts apply the lodestar method
to determine the reasonably recoverable amount. The trial court must enter findings of
fact and conclusions of law supporting the fee award. Id. at 434-35. The findings are
necessary for an appellate court to review the award. Bentzen v. Demmons, 68 Wn. App.
339,350,842 P.2d 1015 (1993). Where a trial court fails to create the appropriate record,
remand for entry of proper findings and conclusions is the appropriate remedy. Mahler,
135 Wn.2d at 435.
Because the trial court failed to make any findings and conclusions supporting the
amount of fees and costs awarded, remand is required.
Attorney fees on appeal
Both parties request an award of attorney fees on appeal. RAP 18.1 permits
recovery of reasonable attorney fees or expenses on review if applicable law grants that
right. Mr. Auayan bases his attorney fee request on the declaration of protective
covenants running with his and Mr. Russell's land, which provides that owners having
rights under the covenants may "recover any damages resulting from [a] violation,
together with reasonable attorney's fees." CP at 30. Mr. Auayan has not demonstrated a
violation of the covenants by Mr. Russell.
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No. 3 1946-6-III
Russell v. Auayan
Mr. Russell requests attorney fees on appeal relying on the contempt statute, RCW
7.21.030(3). A party defending an appeal of a contempt order may be awarded his
attorney fees. RlL Assoc., Inc. v. City ofSeattle, 113 Wn.2d 402,413, 780 P.2d 838(1989); Graves v. Duerden, 51 Wn. App. 642, 652, 754 P.2d 1027 (1988). Mr. Russell is
entitled to an award of fees and costs on appeal.
We reverse the trial court's judgment awarding $3,690.00 in attorney fees and
costs and remand for the entry of findings and conclusions, otherwise affirm, and award
Mr. Russell his reasonable fees and costs on appeal subject to his compliance with RAP
18.1(d).
A majority of the panel has determined this opinion will not be printed in the
Washington Appellate Reports, but it will be filed for public record pursuant to RCW
2.06.040.
WE CONCUR:
``
Brown,~.
14