Performance Contracting, Inc. v. State of Washington , Dept. of L & I ( 2015 )

FILED
SEPTEMBER 22, 2015
In the Office of the Clerk of Court
WA State Court of Appeals, Division III
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION THREE
PERFORMANCE CONTRACTING, )
INC., ) No. 32377-3-111
)
Appellant, )
)
v. )
) UNPUBLISHED OPINION
STATE OF WASHINGTON, )
DEPARTMENT OF LABOR AND )
INDUSTRIES, )
)
Respondent. )
SIDDOWAY, C.]. - Lincoln County Superior Court dismissed Perfonnance
Contracting Inc.' s attempted appeal of a decision of the Board of Industrial Insurance
Appeals after the court found that the company's notice of appeal was untimely served on
the director of the Department of Labor and Industries. It is undisputed that the company
filed its notice well within the deadline for appeal, accompanied by a certificate that the
notice had been mailed to the department at the same time. But the department
disclaimed receipt of the notice, as did another intended recipient. After reviewing a
number of sworn statements submitted by the parties and weighing the likelihood of the
parties' competing theories as to what went wrong with service, the trial court reluctantly
dismissed the appeal.
No. 32377-3-III
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Performance Contracting assigns error to the dismissal on a number of grounds,
but we find persuasive only its argument that the parties' dispute over perfection of the
appeal should not have been resolved summarily. While a motion is ordinarily heard on
affidavits, it may be heard wholly or in part on oral testimony. Where, as here, a
substantial right is at stake; both sides can point to material evidence and argument in
support of their theory of what happened; competing improbabilities, if equal, will be
resolved based on the burden of proof; and oral testimony could assist the superior court
in assessing credibility, it was an abuse of discretion to deny Performance Contracting's
request that the court resolve the dispute by trial. We reverse the trial court's order
dismissing the appeal and remand.
FACTS AND PROCEDURAL BACKGROUND
The Department of Labor and Industries charged Performance Contracting Inc.
with a serious violation of the Washington Industrial Safety and Health Act of 1973
(WISHA), chapter 49.17 RCW. The company petitioned the Board of Industrial
Insurance Appeals to review the citation. On August 14,2013, the board issued an order
denying the petition and affirming the citation.
The company appealed the board's order to Lincoln County Superior Court. A
company representative testified that Performance Contracting strives to comply with
safety laws and regulations, in part because
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[e]ven when the monetary penalty is relatively small, the effect of a serious
violation can be substantial. Many federal and state construction projects,
and increasingly projects of sophisticated private owners, often prequalify
and limit bidders to those with minimal or zero safety violations over a
period of a few years preceding the bidding opportunity. Thus, even one
serious safety violation can have a detrimental effect on PCl's
[(Performance Contracting)] ability to bid and compete for such contracts.
Clerk's Papers (CP) at 269. In appealing to the superior court, the Ohio lawyers who had
represented the company in proceedings before the board associated a Seattle law firm.
To perfect its appeal, the company was required to file a notice of appeal with the
superior court within 30 days of the board's order denying review and to serve notice on
both the board and the director of the department. RCW 49.17.150(1).
According to declarations thereafter filed with the court, one of the company's
Ohio lawyers prepared a draft notice of appeal and a motion for the limited admission
(pro hac vice) of Gary Auman, the lead Ohio lawyer, on or before Tuesday, September
3-almost two weeks before the September 16 deadline for appeal. Mr. Auman signed
the certification for limited admission in Dayton, Ohio, on September 3. Robert Olson,
the lead Seattle lawyer, signed both the notice of appeal and the motion for limited
admission on September 4.
The certificates of service appended to the notice of appeal and the motion for
limited admission state that Laurel Barton, an assistant with the Seattle law firm,
"arranged for service of true and correct copies" of the notice, motion, and proposed
order "via first class mail" to the board, the department, the department's lawyer, and the
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company's Ohio lawyer on September 5. CP at 24-25,248. The Lincoln County
Superior Court clerk received her copy of the materials (which had been sent to her by
priority mail) on Monday, September 9. The court granted the order for limited
admission on September 16.
On October 17, one of the company's Ohio lawyers called the board's office to
find out why the certified board record had not yet been filed with the court. He was told
that the board had not received the notice of appeal. He promptly faxed a duplicate copy
of the notice of appeal to the board.
The next day, the executive secretary of the board sent a letter to Mr. Auman
acknowledging receipt of the notice of appeal and stating, "The Certified Appeal Board
Record will be sent to the court and parties." CP at 197. A notation below the signature
block suggests that copies of the letter were sent to the department, the Office of the
Attorney General, and others. 1
Two weeks later, on November 4, the assistant attorney general who had
represented the department before the board e-mailed Performance Contracting's Ohio
I Below the executive secretary's signature, the following appears:
c: Local 82
Int'l Union of Painters & Allied Trades Local 427
Office of the Attorney General
DLI- Wisha PO 4604
Steve Gossman
CP at 197.
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lawyers, stating, "I hate to be the bearer of bad news but there appears to be a problem
with your appeal." CP at 232. After recounting that he had confirmed filing with the
Lincoln County court, the assistant attorney general reported having determined that
neither the board, the department, nor his office had received copies of the notice of
appeaL His e-mail stated that the department would file a motion to dismiss the appeal
because service on the department was not timely.
On November 7, Performance Contracting's Seattle lawyers mailed what they
characterized by cover letter as "another copy" of the company's notice of appeal to the
board, the department, and the attorney general. CP at 259. This time, they sent the
copies by certified mail with return receipt requested.
The certified record of proceedings before the board was filed with Lincoln
County Superior Court on November 25.
On December 11, the department moved to dismiss Performance Contracting's
appeal on account of its alleged failure to timely serve the notice of appeal on the
department. It supported its motion with two affidavits: the affidavit of a legal assistant
for the board stating that the board did not receive a notice of appeal until October 17,
and the affidavit of an employee of the department stating that as of November 4, 2013,
no notice of appeal had been received by the department. It submitted the unsworn e-
mail that the assistant attorney general sent to the company's Ohio lawyers in November
stating that his office had not received the materials allegedly sent on September 5.
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The company responded with a number of declarations, including declarations
from Mr. Olson, Ms. Barton, and the Seattle law firm's office administrator and
receptionist.
Mr. Olson testified in his declaration that he had practiced law in Washington
since 1974; that he had concentrated his practice on construction disputes and litigation
matters of all types; that he was experienced in handling WISHA matters and was
knowledgeable about the procedures for appealing WISHA citations; and that his legal
assistant, Laurel Barton, was also familiar with WISHA matters. He testified that he had
finished the notice of appeal and motion on September 4, worked with Ms. Barton the
next day to arrange for filing and service, and was satisfied based on his discussions with
Ms. Barton on September 5 that the materials had been sent to the court and the required
parties. He testified to a specific recollection of Ms. Barton dispatching the materials on
that date because he was planning to be out of the office the next day (Friday), would be
embarking on an extended vacation the following Monday, and wanted to be sure that the
filing and service was completed.
The office administrator of the Seattle firm, Gwen Crosswhite, testified by
declaration that the firm had established and "rigorously followed" procedures for its
legal assistants' preparation and mailing of service copies of documents. CP at 237. She
testified that the practice involves "placing the documents in the envelopes with
certificates of mailing ... , properly addressing and sealing the envelopes, applying the
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proper amount of postage to the envelopes ... [,] and placing the completed envelopes in
the 'out' basket in our mail room." Id. She testified that the mail in the "out" basket is
picked up at 4:30 p.m. daily by the firm's receptionist, who then delivers it to a nearby
post office before 5:00 p.m. She testified to Ms. Barton's 13 years' experience as a legal
assistant with the firm, Ms. Barton's consistently excellent annual performance reviews,
and the fact that Ms. Barton had never been reprimanded or sanctioned for any
performance deficiency. Ms. Crosswhite testified that while the firm's receptionist in
September 2013, Shontara Anderson, had been employed for only a few months, she had
been instructed on her duties and responsibilities and had been a reliable employee with
an excellent attendance record. Ms. Crosswhite testified that she had reviewed Ms.
Anderson's time records and confirmed that Ms. Anderson had worked a full day of7.5
hours (from 8:30 a.m. to 5:00 p.m.) on September 5.
Laurel Barton testified in her declaration that she had a specific recollection of
preparing envelopes for service of the notice of appeal in this matter on September 5
because Mr. Olson intended to be out of the office the following day and wanted service
completed before he left. She testified that she typed the notice of appeal for Mr. Olson.
The notice of appeal was relatively lengthy (six pages), including assignments of error. It
also included the following recitals:
2. As required under RCW 49.17.150(1), PCI is serving a copy of this
Notice of Appeal on the Director of the Department and on the
Board, as well as the Office of the Attorney General.
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3. The filing and service of this Notice of Appeal are timely because
they have been accomplished within 30 days following the
communication of the Board's August 14,2013, Final Order, as
required under RCW 49.17 .150( 1).
CP at 2. Ms. Barton testified that she prepared the certificates of service on September 5;
prepared envelopes addressed as indicated by the certificates; prepared copies of all
materials filed with the court, both for her file and for service copies; placed copies of the
notice of appeal, motion for limited admission, and certificate of service in the envelope
for each recipient identified on the certificate of service; affixed the proper postage; and
placed the service copies in the mail basket in the firm's copy room for pickup and
mailing by Ms. Anderson.
Finally, the declaration of Ms. Anderson stated in relevant part:
My usual and customary practice that does not vary and which is in
accordance with the firm's policy is to check the mail basket in our copy
room at the close of business each work day (4:30 pm), collect all of the
letters in the basket, put them into a mail pouch and drive them to the post
office located just a few blocks from our office at 2420 4th Ave S., Seattle.
Before I deposit the envelopes into the mail slot which is located inside the
front door ofthe post office, I check each envelope to verify that it has a
complete address and postage. I then deposit the envelopes into the mail
slot. ...
. . . I have determined that I worked on September 5, 2013 based on
my own recollection and verified by the time sheet that I complete for each
day worked .... Although I have no specific recollection of taking the
actions I described above on September 5, 2013, there is no reason for me
to believe that I varied my practice on that day. I have never failed to mail
all envelopes I picked up from the firm's mail basket and delivered to the
[United States] post office.
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CP at 264-65.
At the conclusion of the hearing on the department's motion, having been told by
the assistant attorney general that even Mr. Auman did not receive his copy of the
materials allegedly sent on September 5,2 the trial court explained that it felt constrained
to grant the motion despite evidence of the law firm's procedures and safeguards because
it seemed "astronomically unlikely" that service copies were mailed to the four intended
recipients and yet none received a copy. Report of Proceedings at 28. It added, "[If] the
Court of Appeals overrules me on that, great, I'd be glad to hear the case. I just don't
think I have authority to go further." Id.
Performance Contracting filed a motion for reconsideration. Among other
grounds, it argued that the court erred when it resolved the motion as a matter of
summary judgment yet construed the evidence and inferences in the light most favorable
to the moving party, the department. The company supported its motion with a
declaration attaching seven news reports of unrelated mail that had been lost, stolen, or
destroyed before it could be delivered; six of the reports were from 2013 or 2014. The
company contended that given its declarations establishing that the notice was mailed to
the department, "there is no way that reasonable persons could reach only the conclusions
2Mr. Olson acknowledged to the court that he believed that to be true. Report of
Proceedings at 12.
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that [Performance Contracting] failed to deposit the mail at the post office." CP at 285
(emphasis added).
The department responded with argument that "[t]he odds of the United States
Postal Service (USPS) failing to mail these four envelopes are beyond reasonable
assumption." CP at 308. It had offered no evidence as to the odds of mail being lost or
destroyed after delivery to the postal service or the relative odds of mail being lost or
destroyed singularly or in batches.
The court denied the motion for reconsideration. As to the factual dispute relied
on by the company, the court concluded that "[w]ithout any evidence being presented that
any of the many thousands of other mailings that were mailed out on September 5, 2013
from this post office also did not reach the intended recipients causes this court to
conclude that neither the Director nor the Board was actually mailed the Notice of Appeal
to begin the appeal process." CP at 312.
ANALYSIS
The company assigns error both to the trial court's granting of the department's
motion and to its denial of the company's motion for reconsideration. It identifies several
issues in connection with each. We need address only four.
We reject the company's arguments that it established actual compliance or
substantial compliance with the perfection requirements and reject its argument that the
trial court should have applied principles of equity in order to reach the merits of the
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appeal. But we agree with the company that given the substantial interest at stake and the
conflicting but considerable evidence presented by both sides, the trial court abused its
discretion by rejecting the company's request that it resolve the service issue by trial. We
address the four issues in tum.
1. The company did not establish actual compliance with
perfection requirements
When the department cites an employer for violating W1SHA or a safety or health
standard promulgated by rule, the employer may file an appeal with the board. RCW
49.17.140. Following an unsuccessful appeal to the board, an aggrieved employer "may
obtain a review ... in the superior court for the county in which the violation is alleged to
have occurred, by filing in such court within thirty days following the communication of
the board's order ... a written notice of appeal." RCW 49.17.150(1). The statute further
provides:
Such appeal shall be perfected by filing with the clerk of the court and by
serving a copy thereof by mail, or personally, on the director and on the
board. The board shall thereupon transmit a copy of the notice of appeal to
all parties who participated in proceedings before the board, and shall file in
the court the complete record of the proceedings.
ld.
The statute does not explicitly require that copies of the notice be served on the
director and the board within 30 days-it explicitly requires only that the notice be filed
with the court within that timeframe. But a virtually identical statute, RCW 51.52.110,
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has been construed to require both filing and service within 30 days. 3 Hernandez v.
Dep't ofLabor & Indus., 107 Wn. App. 190, 196,26 P.3d 977 (2001) (citing Fay v. Nw.
Airlines, Inc., 115 Wn.2d 194, 198,796 P.2d 412 (l990)). While the provision in
Hernandez governs perfection of an appeal from a final order addressing a workers'
compensation claim, both workers' compensation claims and work safety violations are
matters committed to the administrative jurisdiction of the board.
To "perfect" means "[t]o take all legal steps needed to complete, secure, or record
(a claim, right, or interest)." BLACK'S LAW DICTIONARY 1318 (lOth ed. 2014). "An
appeal is taken or perfected when the act or acts contemplated by the applicable statutes
have been done, typically by some form of application made or notice given to the court
from which or to which the appeal is taken." 4 C.J.S. Appeal and Error § 389 (2007).
"The construction of two statutes shall be made with the assumption that the
Legislature does not intend to create an inconsistency," and "[s]tatutes are to be read
together, whenever possible, to achieve a 'harmonious total statutory scheme.'" State ex
rei. Peninsula Neigh. Ass 'n v. Dep't ofTransp., 142 Wn.2d 328,342, 12 P.3d 134 (2000)
(internal quotation marks omitted) (quoting Employco Pers. Servs., Inc. v. City ofSeattle,
3 Compare RCW 49.17 .150( 1) ("Such appeal shall be perfected by filing with the
clerk of the court and by serving a copy thereof by mail, or personally, on the director
and on the board."), with RCW 51.52.110 ("Such appeal shall be perfected by filing with
the clerk of the court a notice of appeal and by serving a copy thereof by mail, or
personally, on the director and on the board.").
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117 Wn.2d 606, 614, 817 P .2d 1373 (1991)). Given the identical purposes of RCW
49.17.150 and RCW 51.52.110 (identifying the procedure for perfecting an appeal), their
virtually identical language, and the concept of perfection, we construe RCW
49.17.150( 1) to require service of notice on the department and the board within 30 days
of the final order of the board.
Performance Contracting nonetheless argues that it established its compliance with
the perfection requirements. It relies on the propositions that RCW 49.17.150(1)
authorizes service by mail; that proof of mailing may be established by the testimony of a
person with firsthand knowledge of mailing or testimony to a reliable office practice for
mailing and compliance with the custom; that service requires only and is effective upon
mailing, not receipt; and that to refute competent evidence that notice was given by
mailing, a party claiming nonreceipt must do more than simply swear that the notice
never arrived.
The department does not dispute that service by mail is authorized or that service
is effective if the notice is mailed, whether or not the notice is received. Its disagreement
is with the company's other two premises: it disputes that the declarations of employees
of the company's law firms were sufficient to give rise to the presumption of service and
contends that it offered more than its own self-serving claim that notice never arrived.
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A. Sufficiency oflaw firm staffdeclarations
It is well established that'" when an office handles such a large volume of mail
that no one could be expected to remember any particular letter or notice, proof of
mailing may be made by showing (1) an office custom with respect to mailing, and (2)
compliance with the custom in the specific instance.''' Automat Co. v. Yakima County, 6
Wn. App. 991,995,497 P.2d 617 (1972) (quoting Matsko v. Dally, 49 Wn.2d 370, 376,
301 P.2d 1074 (1956)); Farrow v. Dep 't ofLabor & Indus., 179 Wash. 453, 455, 38 P.2d
240 (1934). Proof of mailing gives rise to a presumption that the mail was received.
Avgerinion v. First Guar. Bank, 142 Wash. 73, 78, 252 P. 535 (1927).
The department unpersuasively argues that the presumption does not apply in this
case. It points to the fact that both Ms. Barton and Mr. Olson did specifically recall
Performance Contracting's notice and motion, which it argues means that "the law firm
does not have so much mail that it cannot remember the specific documents at issue in
this case." Br. ofResp't at 12. From that, it argues that Ms. Anderson's declaration,
which relies on an office custom and compliance, was insufficient.
Ms. Barton and Mr. Olson had firsthand involvement in the preparation of case-
specific documents and explained the circumstances that caused them to remember the
documents they finalized and prepared for mailing on September 5. Ms. Anderson's
contact with the letters, by contrast, was that they would have been 4 of approximately 25
letters that she put in a mail pouch on September 5 and then checked for a complete
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address and postage before dropping them in the mail slot at the post office. By
extension, they would have been 4 of an estimated 125 she mailed in that fashion in a
given week, and 4 of the more than 500 she was likely to take to the post office in a given
month. It is frivolous to contend that Ms. Anderson should specifically recall the 4
letters.
The law firm declarations were sufficient to give rise to the presumption that the
notice of appeal was mailed to the department and the board on September 5.
B. The department offered more rebuttal evidence than its
own self-serving claim ofnonreceipt
Performance Contracting cites Washington Federal Savings v. Klein, 177 Wn.
App. 22, 311 P.3d 53 (2013), review denied, 179 Wn.2d 1019 (2014), as establishing that
the mere denials of receipt offered as evidence by the department are insufficient to rebut
the presumption of mailing. In Klein, Washington Federal argued that its claim against
the estate of a decedent was not time barred because the bank never received a notice
from the estate's personal representative demanding that creditors file claims within a
statutory time frame.
The fact that the notice to creditors in Klein had been mailed was supported by a
contemporaneous affidavit of mailing signed by a legal assistant to the estate's attorney,
just as Ms. Barton's contemporaneous certificate supports the fact of mailing here.
Washington Federal responded with the affidavits of two employees "stating that the
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documents were never received and detailing the careful procedures that have been put in
place to ensure that mail does not get lost." Id. at 28. The appellate court held that in the
battle of the competing sworn statements, the certificate of service prevailed:
[W]hen a legal assistant declares that she has 'given, or caused to have
given' a creditor actual notice by mailing, it is reasonable to accept her
statement as prima facie proof of mailing. To refute such a declaration,
a creditor must do more than swear that the mail never arrived.
Id. at 31.
Had the department produced only the affidavit of its own employee denying
receipt, its refutation would have been insufficient. But it produced more: it produced the
affidavit of an employee of the board denying receipt. And while the unsworn e-mail of
the assistant attorney general did not comply with CR 56(e), Performance Contracting
made no motion to strike it-understandably, since a sworn statement presumably could
have been substituted. Since Ms. Barton's certificate of service stated that service copies
were prepared and mailed to four intended recipients, the testimony of others denying
receipt distinguishes this case from Klein. The department's evidence was sufficient to
require weighing by the court.
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II The company did not establish substantial compliance
with service requirements
Performance Contracting argues alternatively that if its evidence of mailing on
September 5 is insufficient, then the other steps it took amount to substantial compliance
with the statutory perfection requirements. Substantial compliance is sufficient to invoke
appellate jurisdiction of the superior court. Fay, 115 Wn.2d at 198-99 (citing In re Saltis,
94 Wn.2d 889,621 P.2d 716 (1980)). "Substantial compliance occurs when the Director
of the Department (1) receives actual notice of the appeal to the superior court or (2) the
notice of appeal was served in a manner reasonably calculated to give notice to the
Director." Petta v. Dep't ofLabor & Indus., 68 Wn. App. 406, 409, 842 P .2d 1006
(1992) (citing Saltis, 94 Wn.2d at 896).
Placing envelopes in the mail within the statutory 30 day deadline has been held to
constitute substantial compliance even if the envelopes are received after the expiration
of the 30 day deadline. Vasquezv. Dep'tofLabor & Indus., 44 Wn. App. 379, 382-83,
722 P.2d 854 (1986). But failure to serve a required party until well after the 30 day
deadline has been held not to amount to substantial compliance. In Fay, a pro se plaintiff
appealed a decision from the board, timely filed her notice of appeal with the court and
properly served the board and the adverse party, but failed to serve the director of the
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department. 4 Fay, 115 Wn.2d at 196. She served the director two months late,
immediately after the adverse party filed a motion to dismiss. Id. The Supreme Court
affirmed the trial court's dismissal of the appeal, holding that the standard for substantial
compliance was not met because the department did not receive actual notice until after
the expiration of 30 days, and by mailing notice two months after the deadline the
appellant "did not serve notice in a manner reasonably calculated to give notice to the
Director." 1d. at 199.
Fay, with its virtually identical facts as to notice to the department, is controlling.
Assuming notice to the department was not mailed by Performance Contracting's lawyers
on September 5, the other steps that it took do not amount to substantial compliance with
the perfection requirements.
III. Public policy and principles ofequity cannot displace
the statutory perfection requirements
Performance Contracting next argues that even if its appeal was not timely
perfected, an overriding policy in favor of resolving disputes on their merits mandates
that we remand the matter for a determination on the merits, particularly because the
department learned of the appeal in October, the certified record was completed and filed
by November, and no prejudice can be shown. The company fails to cite relevant
4 Fay involved appeal of a workers' compensation decision and the perfection
requirements ofRCW 51.52.110, which we have noted are virtually identical to the
perfection requirements ofRCW 49.17.150(1). See supra note 3.
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authority in support of its argument. The case it does cite, Showalter v. Wild Oats, 124
Wn. App. 506, 101 P.3d 867 (2004), involves the unique factors reviewed where a party
seeks to vacate a default judgment.
"Where no authorities are cited in support of a proposition, the court is not
required to search out authorities, but may assume that counsel, after diligent search, has
found none." DeHeer v. Seattle Post-Intelligencer, 60 Wn.2d 122, 126,372 P.2d 193(1962). Applicable law already favors resolving issues on the merits by requiring only
proof of service rather than proof of receipt, by treating a sworn certificate of mailing as
giving rise to a presumption of service, and by treating substantial compliance with
perfection requirements as sufficient. It is the province of the legislature to dictate the
steps required to perfect an appeal. We are bound to require substantial compliance with
RCW 49.17.150(1).
IV. The trial court abused its discretion in denying the
company's request, in moving for reconsideration, that the
dispute over service be resolved by trial
Finally, the company contends that the trial court erred in denying its motion for
reconsideration. Its motion urged three grounds for reconsideration. We find only one
persuasive: the order of dismissal was contrary to procedural law.
By bringing a motion for reconsideration under CR 59, a party may preserve an
issue for appeal that is closely related to a position previously asserted and does not
depend on new facts. River House Dev., Inc. v. Integrus Architecture, PS, 167 Wn. App.
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221,231,272 P.3d 289 (2012) (citing Newcomer v. Masini, 45 Wn. App. 284, 287, 724
P.2d 1122 (1986); Reitzv. Knight, 62 Wn. App. 575, 581 nA, 814 P.2d 1212 (1991)).
We review a trial court's denial of a motion for reconsideration for abuse of discretion,
that is, discretion manifestly unreasonable, or exercised on untenable grounds or for
untenable reasons. Rivers v. Wash. State Conf ofMason Contractors, 145 Wn.2d 674,
684-85,41 P.3d 1175 (2002).
A motion is ordinarily heard on affidavits, but CR 43(e)(1) provides that it may be
heard wholly or in part on oral testimony. Threshold issues arising in litigation that are
often resolved on affidavits may nonetheless call for testimony where there is clearly
conflicting evidence. Thus, testimony has been called for where a motion to set aside a
default judgment results in conflicting affidavits as to personal service, WoodrujJv.
Spence, 76 Wn. App. 207,210,883 P.2d 936 (1994); where a party disputes having
received and acceded to an agreement to arbitrate future disputes, Newson v. Macy's
Dep 't Stores, Inc., 160 Wn. App. 786, 795-96, 249 P.3d 1054 (2011); and where a motion
for prejudgment attachment results in conflicting affidavits as to the validity of a
creditor's claim, Rogoski v. Hammond, 9 Wn. App. 500, 508, 513 P.2d 285 (1973). Cf
Stoulil v. Edwin A. Epstein, Jr., Operating Co., 101 Wn. App. 294,298 n.7, 3 P.3d 764(2000) (where a motion for a new trial raises disputed facts, a court errs by vacating the
judgment without hearing testimony). A court may abuse its discretion by failing to hold
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an evidentiary hearing when affidavits present an issue of fact whose resolution requires
a determination of witness credibility. Woodruff, 76 Wn. App. at 210.
In this case, the evidence before the court suggested two scenarios-both of them
were improbable, yet one evidently occurred. It was improbable that four letters were
mailed but went astray. But it was also improbable that the law firm did not mail the
notices. Several individuals had invested considerable work in preparing the documents,
which were not simple; the documents themselves recite and reflect the perfection
requirements, so the firm's employees clearly were aware of them; some copying and
mailing was unquestionably done on or about September 5 since copies were received by
the superior court on September 9; and almost two weeks remained before the deadline
for appeal, so an end-of-day crunch could not explain a service problem. Why would the
service copies not have been mailed?
The court expressed concern that there was no evidence that "the many thousands
of other mailings that were mailed out on September 5, 2013 from this post office also
did not reach the intended recipients," and appears to have held the absence of such
evidence against Performance Contracting. CP at 312. It is not clear how Performance
Contracting could have obtained proof of a postal service problem, but more importantly
it is only in limited circumstances that a party's failure to produce evidence can be held
against it. The postal service was a stranger to both parties in this case, and its evidence
was "equally within the call" of the department; under such circumstances, the absence of
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No. 32377-3-III
Performance Contracting v. L&I
evidence cannot be held against Performance Contracting. Rosenstrom v. N Bend Stage
Line, 154 Wash. 57,65,280 P. 932 (1929); Wright v. Safeway Stores, 7 Wn.2d 341,348,
109 P.2d 542 (1941).
Evidence must afford a rational basis for resolving a dispute over the cause of an
event, otherwise the decision is based on impermissible conjecture or speculation. Cf
Ewer v. Goodyear Tire & Rubber Co., 4 Wn. App. 152, 158 nA, 480 P.2d 260 (1971)
(conflicting evidence as to cause of accident); St. Germain v. Potlatch Lumber Co., 76
Wash. 102, 109, l35 P. 804 (1913) (the evidence must "afford[] room for men of
reasonable minds to conclude" that there is a greater probability that an event happened
in one way rather than another). The trial court had before it no evidence of the relative
likelihood that a postal service error results in the loss of a single piece of mail as
opposed to a batch of mail. A court is entitled to conclude that there is a greater
probability of one explanation than the other, but its conclusion must have a rational basis
and not be a matter of conjecture or speculation. If, on the other hand, the evidence as to
a factual issue is evenly balanced, then the party with the burden of persuasion (here, the
department) loses. E.g., Harrison Mem 'I Hosp. v. Gagnon, 110 Wn. App. 475, 486, 40
PJd 1221 (2002); Chase v. Beard, 55 Wn.2d 58, 64-65, 346 P.2d 315 (1959), overruled
on other grounds by In re Marriage ofBrown, 100 Wn.2d 729, 675 P.2d 1207 (1984).
Given the amount of evidence offered by both parties and the significant right at
stake, it was an abuse of discretion for the trial court to deny Performance Contracting's
22
No. 32377-3-II1
Performance Contracting v. L&l
request for trial of the perfection issue .. Oral testimony may assist the court in assessing
credibility and could affect its weighing of the parties' evidence.
Whether to try the dispute over perfection first or combine it with the appeal is a
matter we leave to the discretion of the trial court.
We reverse the trial court's order dismissing the appeal and remand for
proceedings consistent with this opinion.
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, J.
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