T-mobile Usa, Inc. v. Platinumtel Communications, Llc ( 2017 )

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON.,
T-MOBILE USA, INC., a Delaware ) rn
corporation, ) No. 75208-1-1
)
Appellant, ) DIVISION ONE
)
V. )
)
PLATINUMTEL COMMUNICATIONS, ) UNPUBLISHED OPINION
LLC, a Delaware corporation, )
) FILED: September 18, 2017
Respondent. )
)
BECKER, J. —After declaring respondent Platinumtel in default for failing to
pay amounts owed under a contract, T-Mobile filed an action for replevin and
injunctive relief to secure collateral in which it claimed a security interest. The
trial court denied the requested relief and entered a judgment for attorney fees in
favor of Platinumtel. On appeal, T-Mobile contends the trial court erred in
entering a judgment on attorney fees while the parties' underlying dispute
remained pending in arbitration. Because T-Mobile fails to establish any
reversible error, we affirm.
FACTS
Appellant T-Mobile USA Inc. is a Delaware corporation with corporate
headquarters in Bellevue. Respondent Platinumtel Communications LLC (Ptel)
No. 75208-1-1/2
is a prepaid wireless service provider with its principal place of business in
Illinois.
In 2012, T-Mobile and Ptel executed a Wholesale Supply Agreement
(Agreement). Under the Agreement, T-Mobile supplied Ptel with wireless cellular
network services that Ptel resold to its prepaid wireless customers around the
country.
The Second Amendment to the Agreement granted T-Mobile a security
interest in specified collateral, including all of Ptel's equipment, supplies, fixtures,
and tangible property. The collateral also included all of Ptel's interest "in the
right to receive payment of money... all accounts, contract rights, chattel paper,
documents of title, letters of credit,... securities, deposits, insurance policies,
licenses, leases, contracts, judgments,.. . and .. . any and all funds in each
bank account owned or controlled by Platinumtel." Upon default, which included
Ptel's "failure to make any payment due" under the Agreement, T-Mobile could
foreclose on the collateral and "take possession of the collateral pursuant to
judicial process."
Section 14.12(a) of the Agreement required the parties to submit "disputes
related to the Service, Network, Invoices or billing" to arbitration. Section 14.13
provided that "the prevailing party in any dispute under this Agreement will be
entitled to recover its costs, including reasonable attorneys' fees."
In 2015, T-Mobile alleged that Ptel was in default for failing to make more
than $3 million in payments for network services. At some point, T-Mobile cut off
-2-
No. 75208-1-1/3
services to Ptel, which then announced to its customers that it was going to
discontinue offering wireless services.
On February 1, 2016, T-Mobile filed a Complaint for Replevin and
Injunction, seeking an order of replevin putting T-Mobile "in immediate
possession of the Collateral" and a temporary restraining order and further
injunctive relief preventing Ptel "from using, damaging or disposing of the
Collateral" before T-Mobile could gain possession. T-Mobile also filed a Motion
for Order to Show Cause regarding the replevin and injunction claims.
Simultaneously, T-Mobile commenced an arbitration proceeding under the terms
of the Agreement to address Ptel's failure to pay.
On February 2, 2016, the trial court issued a temporary restraining order
directing Ptel to protect and preserve the collateral and an order to show cause
why a writ of replevin should not be issued.
In support of its motion for an order to show cause, T-Mobile asserted that
the replevin statute, chapter 7.64 RCW, provided the judicial process for a
secured party to take possession of the collateral identified in the Agreement. 1-
Mobile further contended that under the Uniform Commercial Code, Ptel was
required to identify and assemble the collateral and make it available to T-Mobile.
T-Mobile asserted that it was unsure of the value of the collateral but estimated it
"may exceed $10,000.00" and posted a $10,000 bond.
In response, Ptel raised several procedural challenges to T-Mobile's
replevin claim and to the issuance of the temporary restraining order. Ptel
-3-
No. 75208-1-1/4
suggested that T-Mobile's request for an order of replevin and "a judgment in an
amount to be proven at trial" indicated an improper attempt to litigate the financial
dispute simultaneously in two forums.
Ptel disputed T-Mobile's allegations that it was going out of business. Ptel
acknowledged that T-Mobile had forced it to discontinue service from T-Mobile
but claimed that it retained several employees and was actively seeking another
carrier. Ptel maintained that in any event, T-Mobile had failed to establish that
Ptel was attempting to place its assets out of the reach of creditors.
Ptel also claimed that T-Mobile had not demonstrated any right to
foreclose judicially on the collateral while the disputed question of whether a debt
was owed would be contested in the arbitration proceeding. Ptel contended that
much of the collateral that T-Mobile was seeking, such as Ptel's "right, title, and
interest in the right to receive payment of money," did not involve assets that
could be placed into T-Mobile's possession by means of a writ of replevin. Ptel
argued that by requesting in its proposed replevin order that Ptel also turn over
financial statements, credit statements, checking accounts and activities—
essentially all of Ptel's corporate records—T-Mobile was not seeking relief
properly available through replevin, but rather was attempting to undertake
prejudgment discovery for purposes of collection in the event that it eventually
obtained a judgment.
Both parties appeared at the show cause hearing on March 31, 2016, the
day that the temporary protection order expired. T-Mobile maintained that Ptel's
No. 75208-1-1/5
undisputed default of nonpayment "triggers the right to replevin" and "entitles us
to marshal and hold that collateral" pending any determination in the arbitration of
whether either party had breached the Agreement. T-Mobile argued that it was
also entitled to injunctive relief in conjunction with a writ of replevin in order to
prevent Ptel from dissipating its assets during the arbitration. T-Mobile claimed
that without an injunction, Ptel might "siphon[]away [incoming funds from
customers] either for personal use [or]for other business operations or whatever
they want to do."
In response to the court's question about what it expected the court to do
with assets such as Ptel's bank accounts and accounts receivable, T-Mobile
acknowledged "you can call it impounding" and explained that "pending an award
by the arbitrator, we are looking to replevin [sic] those assets to have them in a
safe place and to prevent, via an injunction, them from dissipating those assets."
Among other things, Ptel disputed T-Mobile's claimed right to immediate
possession of collateral, arguing that it was entitled to raise defenses and claim
offsets as to the alleged default and that those issues involved disputes about
billing and invoicing that the arbitrator had to decide. Ptel also maintained that T-
Mobile had failed to demonstrate irreparable harm that would warrant entry of a
preliminary injunction.
On April 1, 2016, the court denied T-Mobile's motion for replevin and a
preliminary injunction.
No. 75208-1-1/6
The court concluded that T-Mobile had failed to meet its burden of
demonstrating a well-grounded fear of immediate invasion of its rights under the
Agreement that would result in actual and substantial injury. The court found no
evidence of Ptel's "current or imminent or likely future dissipation of the collateral
as identified in the pleadings."
In denying an order of replevin, the court noted that replevin generally
requires the location of property to be specified so that the sheriff can take
possession of it. See RCW 7.64.035(2)(b), (c). The court further observed that
"money is not subject to replevin unless marked or designated in some manner
so as to become specific" and that funds in a bank account are not a tangible
asset subject to replevin.' Under the circumstances, the court concluded that the
collateral T-Mobile specified in its proposed order was not subject to replevin:
Here, the collateral described in Exhibit A to T-Mobile's
proposed order to be seized by the Sheriff includes funds in bank
accounts, the right to receive money and consideration related to
the sale of products and services, i.e., accounts, contract rights,
commercial paper, leases, insurance policies, and any proceeds
therefrom or from goods or personal property. Even if considered
tangible property, the above items are not sufficiently identified to
allow the Sheriff to take possession of them. Nor is the location
provided of any of the collateral, including the tangible assets, such
as furniture.
For the above reasons replevin is not available.
1 Clerk's Papers at 439(order denying show cause), quoting 66 Am. JUR. 2D
Replevin §§ 9-10, at 504-05 (2001).
-6-
No. 75208-1-1/7
On April 5, 2016, Ptel filed a Motion to Fix Fees, Costs, and Enter
Judgment. Ptel contended that the trial court had denied the sole relief T-Mobile
requested in its complaint, effectively ending the proceeding. Ptel asked the
court to enter a judgment for attorney fees under the provision in the Agreement
for "the prevailing party in any dispute."
Three days later, on April 8, 2016, T-Mobile filed an amended complaint
raising additional claims and requests for relief related to its alleged security
interests. On April 11, 2017, T-Mobile filed its opposition to Ptel's motion to fix
fees. T-Mobile argued that there could be no "final judgment" and therefore no
"prevailing party" for purposes of an attorney fee award, until all claims in court
and in the arbitration were resolved. T-Mobile did not discuss the amended
complaint.
On April 14,2017, the trial court entered an order fixing fees and
judgment, awarding Ptel attorney fees and costs totaling $32,544.92 and
dismissing the claims in T-Mobile's complaint with prejudice. T-Mobile appealed.
After the trial court entered the order fixing fees, the arbitration proceeded.
In July 2016, during the course of arbitration, counsel for Ptel withdrew.
According to T-Mobile, the arbitration concluded without the participation of Ptel.
T-Mobile expects entry of an award in its favor in excess of $4 million.
On appeal, Ptel did not appear or submit a response to T-Mobile's
opening brief. Ptel's former counsel, Williams Kastner & Gibbs PLCC, advised
the court that they have not represented Ptel since July 2016. Where a
-7-
No. 75208-1-1/8
respondent does not file an opening brief, an appellate court "is entitled to make
its decision based on the argument and record before it." Adams v. Dep't of
Labor & Indus., 128 Wn.2d 224, 229, 905 P.2d 1220(1995)(rejecting continuing
validity of the prima facie case rule when respondent fails to file a brief); see also
RAP 11.2(a)(only a party who submits a brief may present oral argument).
On appeal, T-Mobile has raised two assignments of error: (1)the trial
court erred in dismissing the case with prejudice "when the claims set forth in the
Amended Complaint were still unanswered and unresolved" and (2) the trial court
erred in concluding that "replevin is not available unless the secured creditor can
identify and locate the collateral with specificity."
Final Judgment
T-Mobile contends the trial court erred by entering a final judgment
dismissing T-Mobile's claims with prejudice and awarding Ptel attorney fees.
T-Mobile argues that the order denying its motion for replevin and injunctive
relief was an interlocutory order and that the trial court could not enter a final
judgment and award attorney fees to the "prevailing party" until it had
resolved "all of the issues in the lawsuit." Whether a specific statute or
contractual provision authorizes an award of attorney fees is a question of law
that we review de novo. Kaintz v. PLG, Inc., 147 Wn. App. 782, 785-86, 197
P.3d 710 (2008).
-8-
No. 75208-1-1/9
Under the terms of the Agreement, the "prevailing party in any dispute"
was entitled to recover costs and attorney fees.2 T-Mobile's arguments rest in
part on the erroneous assumption that the definition of "prevailing party" in
RCW 4.84.330 necessarily applied to the parties' contractual attorney fee
provision.
"By its terms, RCW 4.84.330 applies only to contracts with unilateral
attorney fee provisions." Kaintz, 147 Wn. App. at 786. Where, as here, the
parties' agreement already contains a bilateral attorney fees provision,
"RCW 4.84.330 is generally inapplicable." Hawk v. Branies, 97 Wn. App. 776,
780, 986 P.2d 841 (1999); see also Walii v. Candyco, Inc., 57 Wn. App. 284,
288, 787 P.2d 946(1990)(statutory "prevailing party" provision of RCW 4.84.330
does not control over plain language of a contract that contains a bilateral
attorney fee clause); Wachovia SBA Lending, Inc. v. Kraft, 165 Wn.2d 481, 494,
200 P.3d 683(2009)(RCW 4.84.330 is designed to make a unilateral attorney
fees provision bilateral when the contracting party receives a final judgment).
T-Mobile does not allege that the parties intended to incorporate the
statutory definition of "prevailing party" into the Agreement's attorney fee
provision. Given the limited purpose of the proceeding and the trial court's
resolution of T-Mobile's claims, a commonsense interpretation supports a
2(Emphasis added.)
-9-
No. 75208-1-1/10
determination that Ptel was the "prevailing party" in this dispute. See Wal'i v.
Candyco, 57 Wn. App. at 288-89.
In any event, T-Mobile's arguments regarding the trial court's authority to
enter a final judgment are also unavailing. A final judgment is'a court's last
action that settles the rights of the parties and disposes of all issues in
controversy, except for the award of costs (and, sometimes, attorney's fees) and
enforcement of the judgment." State v. Taylor, 150 Wn.2d 599,602,80 P.3d
605 (2003), quoting BLACK'S LAW DICTIONARY 847(7th ed. 1999). Substance
controls over form in the determination of a final judgment. Nestegard v. Inv.
Exch. Corp., 5 Wn. App. 618, 489 P.2d 1142(1971). T-Mobile maintains that the
order denying its request for replevin and a preliminary injunction was not a final
judgment because it did not "resolve all of the issues in the lawsuit" and did not
"represent a final determination of the parties' rights." But these contentions
elevate form over substance.
In its "Complaint for Replevin and Injunction," T-Mobile alleged two claims
and requested an order of replevin and a temporary injunction. The trial court
rejected both claims and denied the relief that T-Mobile requested. T-Mobile
acknowledged that the merits of Ptel's default would be determined in the
pending arbitration that T-Mobile had initiated. Under the circumstances, the trial
court reasonably could have concluded that it had resolved all of the issues in the
limited, ancillary proceeding before it, warranting entry of a final judgment.
-10-
No. 75208-1-1/11
T-Mobile also contends the trial court erred by failing to adjudicate the
claims that it raised in an amended complaint. Three days after Ptel filed its
motion to fix fees, T-Mobile filed an amended complaint. The amended
complaint, now retitled Amended Complaint for Enforcement of Security Interest
Pursuant to Uniform Commercial Code, including Taking Possession of Collateral
by Replevin and Injunction, removed the independent claim for replevin in the
original complaint and specified at least six additional forms of relief related to the
alleged collateral. On appeal, T-Mobile asserts that it had an absolute right to file
the amended complaint because Ptel never answered the original complaint.
See CR 15(a).
Three days after filing the amended complaint, T-Mobile filed its opposition
to Ptel's motion to fix fees. Although T-Mobile asserted that it had "ongoing
claims for injunctive relief before this Court," T-Mobile's primary argument was
that the trial court could not enter a final judgment in the current proceeding while
"the central dispute between the parties" remained pending in arbitration: "No
final judgment can be entered, and no prevailing party can be identified, until all
of these claims have been finally determined."
T-Mobile did not specifically refer to the amended complaint or identify any
new claims that remained pending before the trial court. In its reply, Ptel referred
to the amended complaint and cited authority for the proposition that absent
extraordinary circumstances, a party loses the automatic right to amend the
complaint after losing a dispositive ruling. But T-Mobile made no effort to
-11-
No. 75208-1-1/12
respond to Ptel's arguments regarding the amended complaint. Nor did T-Mobile
call the trial court's attention to any of the specific "live claims" it now asserts the
trial court was required to adjudicate before entering a judgment, even though it
submitted a responsive pleading after filing the amended complaint. Under the
circumstances, we conclude that T-Mobile's vague, passing reference to
"ongoing claims for injunctive relief before this Court" was insufficient to preserve
the alleged error for review. See Roberson v. Perez, 156 Wn.2d 33, 39, 123
P.3d 844(2005)(appellate courts generally decline to review issues raised for
the first time on appeal).
Replevin
T-Mobile contends that the trial court erred when it denied an order of
replevin because it failed to describe the collateral and its location with
particularity. T-Mobile asserts that "when a debtor like Ptel is concealing
property that rightfully belongs in possession of a secured party like T-Mobile, the
secured party is in no position to describe the property and location with exact
particularity." T-Mobile cites no authority for this proposition, and the trial court
entered no findings to support T-Mobile's factual allegations.
"A replevin action is essentially one to determine title to, or right of
possession of, personal property." Apgar v. Great Am. lndem. Co., 171 Wash.
494, 498, 18 P.2d 46(1933). Chapter 7.64 RCW,Washington's replevin
statute, permits a plaintiff to recover possession of personal property after
demonstrating, among other things, that "the plaintiff is the owner of the property
-12-
No. 75208-1-1/13
or is lawfully entitled to the possession of the property by virtue of a special
property interest, . . specifically describing the property and interest." RCW
7.64.020(2)(a). A security interest is a special property interest that may support
replevin. RCW 7.64.020(2)(a).
But as the trial court noted, the statute also generally contemplates that
the replevin order shall "describe the property and its location" and "direct the
sheriff to take possession of the property and put the plaintiff in possession."
RCW 7.64.035(2); see also RCW 7.74.047 (sheriff's duties upon taking
possession of property). The trial court concluded that T-Mobile had failed to
describe the collateral sufficiently to permit an order of replevin.
On appeal, T-Mobile does not address the basis for the trial court's
replevin analysis or the authority that the trial court relied on. Nor has it
presented any meaningful legal analysis or cited any authority to support its
conclusory allegations. We therefore decline to consider them. See Saunders v.
Lloyd's of London, 113 Wn.2d 330, 345, 779 P.2d 249(1989)(appellate court will
decline to consider issues unsupported by cogent legal argument and citation to
relevant authority).
In light of our decision, we deny 1-Mobile's request for attorney fees on
appeal.
-13-
No. 75208-1-1/14
Affirmed.
WE CONCUR:
Joe‘cA•Cey,
-14-