Steven M. Heeb v. Carl N. Warring ( 2013 )

FILED
December 5, 2013
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
STEVEN M. HEEB, )
) No. 29050-6-III
Appellant, ) (consolidated with
) No. 29051-4-III)
v. )
)
CARL N. WARRING, )
WARRING LAW FIRM, )
)
Respondents. )
)
STEVEN M. HEEB, )
)
Appellant, )
)
v. )
)
MARY MAHANEY OTEY, ) UNPUBLISHED OPINION
ATTORNEY AT LAW, )
)
Respondent. )
SIDDOWAY, A.C.J. - The trial court granted summary judgment dismissing two
actions by Steven Heeb against his former lawyers, concluding that they were barred as a
matter of law by the statute of limitations and res judicata. Mr. Heeb appeals. We agree
with the trial court and affirm.
Nos. 29050-6-111; 29051-4-III
Heeb v. Warring
FACTS AND PROCEDURAL BACKGROlWD
Historical Disputes and Lawsuits
Unlike most of our opinions dealing with facts unrelated to lawsuits that lead to a
lawsuit, this case involves a history of lawsuits leading to two current lawsuits. The
following background is somewhat disjointed because several disputes were ongoing
between Steven Heeb and his lawyers between 2001 and 2009. We have organized the
background chronologically due to the importance of the statute of limitations and res
judicata to dismissal of Mr. Heeb' s actions by the trial court.
Steven Heeb retained lawyer Carl Warring and the Warring Law Firm to represent
him in several matters beginning in August 1999. The representation ended in July 2001,
when the law firm filed a notice of intent to withdraw from representing Mr. Heeb in his
marriage dissolution proceeding as a result of Mr. Heeb's nonpayment of fees.
After withdrawing, Mr. Warring and the law firm brought a collection action
against Mr. Heeb to recover the fees owed. The action was filed in August 2001. Mr.
Heeb defended on the basis that the fees were excessive. Mr. Warring and the law firm
prevailed in a bench trial, recovering a $17,727.50 judgment. The judgment resolving
this first, 2001 collection lawsuit between Mr. Heeb, Mr. Warring, and the law firm was
entered in February 2004. Mr. Heeb filed a motion several months later in an effort to set
aside the findings and conclusions but it was denied.
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Heeb v. Warring
During the course of the collection action, Mr. Heeb complained to the court that
Mr. Warring was withholding some of his personal files but the dispute over the files was
never formally made a part of the collection action. In March 2004, Mr. Heeb filed a
separate action to deal with the files, suing Mr. Warring and the law firm in Adams
County. Mr. Warring and the law firm responded that they asserted a possessory lien
authorized by RCW 60.40.010(a) but at the same time made several attempts to contact
Mr. Heeb in an effort to return his files. An order was entered shortly after Mr. Heeb's
2004 Adams County records action was filed transferring venue of the action to Grant
County, where Mr. Warring's office is located.
Meanwhile, Mr. Heeb had not paid Mr. Warring's and the law firm's judgment
against him, so they executed on a piece of real property that he owned in Adams County.
A sheriffs sale of the property was conducted on April 30, 2004. Mr. Warring was the
highest bidder, purchasing the property for $19,144.13. An order confirming the sale was
entered on June 7.
A little over a month later, on July 16, Mr. Heeb appeared before the Adams
County Superior Court for a hearing on a motion for reconsideration he had filed in the
fee collection action. Mr. Warring used that occasion to deliver a box of files to Mr.
Heeb at the courthouse under a cover letter identifying the files being returned. During
the hearing, the trial judge explained to Mr. Heeb that while he had complained about Mr.
Warring withholding his files during the collection lawsuit, the return of the files was not
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Nos. 29050-6-111; 29051-4-111
Heeb v. Warring
before the court for resolution in that action and "this particular lawsuit, 01 [-]2001535
has been completed. What mayor may not have happened two or three years ago is
really irrelevant at this point because the matter had been concluded." Clerk's Papers
(CP) at 27. The trial judge told Mr. Heeb, "It's [the] Court's understanding you got your
records back today but if you still want to pursue it, if you don't think you got all of your
records then you need to do it in [the new lawsuit transferred to Grant County], not in this
one." CP at 26.
The following spring, on the eve of Mr. Heeb's one-year deadline for redeeming
the property Mr. Warring had purchased at the sheriffs sale, Mr. Heeb delivered a
personal check to Mr. Warring's office in the same amount as the price Mr. Warring had
paid the prior year. Mr. Warring mailed the check back to Mr. Heeb, pointing out that
the amount of the check (which failed to include interest) was insufficient. Mr. Heeb
later tried to pay the correct redemption price of$21,442.12 to the sheriff, but the sheriff
refused the late payment.
In June 2005, Mr. Heeb filed what he entitled a "Summons on Complaint for
Money Damages" against Mr. Warring and the law firm with the Grant County Superior
Court. CP at 151. It was his apparent effort to continue the records action transferred
from Adams County.
In August 2005, Mr. Warring sold the property he had purchased from Mr. Heeb
at the sheriffs sale to Jose Soledad. Anticipating further disputes over the property from
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Nos. 29050-6-111; 29051-4-111
Heeb v. Warring
Mr. Heeb, Mr. Warring sold the property to Mr. Soledad without warranties. In
September 2005, Mr. Soledad was issued a certificate from the local water utility, Saddle
Mountain Water Association, giving him a right to domestic water delivery from the
utility. Mr. Heeb and Mr. Soledad's family became embroiled in a several-year dispute
over whether the right to service from the water association was a personal property right
belonging to Mr. Heeb. A lawsuit over the water right issue was filed in 2005 but Mr.
Warring, the law firm, and Mary Mahaney Otey were never named as parties.
Also in August 2005, Mr. Heeb's Grant County record lawsuit was dismissed in
response to Mr. Warring's and the law firm's motion to dismiss it for failure to state a
claim upon which relief could be granted.
In July 2006, Patrick Acres, a lawyer who represented Mr. Heeb's ex-wife, wrote
to Mr. Heeb asking that he sign a qualified domestic relations order (QDRO) to effectuate
a division of Mr. Heeb' s retirement account that had been ordered in 2001. The letter
stated that Mr. Acres had noted the matter for a July 24, 2006 hearing should Mr. Heeb
refuse to sign the order. Mr. Heeb did not sign the order. It was entered by the court
over his objection in September 2006 and was later modified.
In July 2007, the inactive 2004 Adams County record lawsuit, the venue of which '
had been transferred to Grant County, was dismissed without prejudice.
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Nos. 29050-6-111; 29051-4-111
Heeb v. Warring
Current Lawsuits
In April 2009, Mr. Heeb commenced the two actions that are before us on appeal.
The first action was asserted against Mr. Warring and the Warring Law Firm in a
"Complaint for Attorney Misconduct and Grand Theft of Client's Property." CP at 1.
The second action was asserted against Ms. Otey, a lawyer formerly employed by the
Warring Law Firm, in a "Complaint for Attorney Misconduct and Accessory to Theft of
Client[']s Property." CP at 374. The complaints request $6 million in damages from
"Carl Warrings Law Firm" and $2 million in damages from Ms. Otey. Twenty-one
exhibits, consisting of notices of code violations, excerpts from letters, transcripts of
court proceedings, check copies, portions of pleadings, and corporate documents and
certificates were attached to each complaint.
The defendants filed answers asserting, among other affirmative defenses, res
judicata, collateral estoppel, the statute of limitations, and laches. Shortly after
answering, the defendants all moved for summary judgment, relying on a declaration of
Mr. Warring in which he recounted the history of the defendants' dealings with Mr. Heeb
including the three prior lawsuits between him, his firm, and Mr. Heeb.
Mr. Heeb did not file any declarations in opposition to the summary judgment
motion. He did file two unsworn motions "To Strike Defendants['] Support of
Reasonable Attorney Fees and Motion to Proceed by Jury Trial" to which he attached a
number of documents. CP at 227,592.
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Nos. 29050-6-111; 29051-4-111
Heeb v. Warring
After hearing oral argument from Mr. Warring and Mr. Heeb, the trial court
granted the defendants' motions for summary judgment. It explained both in its oral
ruling and its later written order that the bases for dismissal were (1) with respect to all of
the claims, that they were barred by the statute of limitations and (2) with respect to all
but Mr. Heeb's complaints about Mr. Warring's alleged failure to prepare a QDRO and
his alleged interference with Mr. Heeb's water rights, the actions were barred by res
judicata. The trial court made a partial award of the defendants' attorney fees on
frivolous action grounds.
Mr. Heeb timely appealed the dismissals.
ANALYSIS
Mr. Heeb's brief filed with this court assigns error to the timeliness of the court
reporter's preparation of a transcript of the summary judgment hearing and the trial
court's alleged disparate treatment of Mr. Heeb in conducting the hearing. Beyond that,
he asks us to review his complaints and the record to determine for ourselves what he
characterizes as injustice administered by the courts.
The trial court granted summary judgment on two clearly articulated legal bases:
the statute of limitations and res judicata. These were the principal bases on which the
defendants requested summary judgment. While we review an order of summary
judgment de novo, see Jones v. Allstate Ins. Co., 146 Wn.2d 291,300,45 P.3d 1068
(2002), it was these defenses to which Mr. Heeb most clearly needed to respond, in the
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Heeb v. Warring
trial court and here. We conclude, as did the trial court, that Mr. Heeb has failed to
demonstrate through evidence or argument how he can overcome these defenses.
In a motion for summary judgment, "the moving party bears the initial burden of
showing the absence of an issue of material fact." Young v. Key Pharm., Inc., 112 Wn.2d
216,225, 770 P.2d 182 (1989). Mr. Warring demonstrated that his representation of Mr.
Heeb ended in 2001, that in 2005 he sold the property that he acquired in the execution
sale, and that the last of Mr. Heeb' s prior lawsuits against him was filed in 2005. He
demonstrated that his collection action against Mr. Heeb, in which Mr. Heeb raised
complaints about his fees and representation, was resolved by a final judgment in 2004
and that Mr. Heeb's action for return of his files was dismissed under CR 12(b)(6) in
2005. These and related details demonstrated by Mr. Warring satisfy Mr. Warring's, the
law firm's, and Ms. Otey's initial burden of showing that Mr. Heeb's claims are barred
by the statute of limitations or res judicata.
A party opposing a motion for summary judgment "may not rest upon the mere
allegations or denials of his pleading, but his response, by affidavits or as otherwise
provided in [CR 56], must set forth specific facts showing that there is a genuine issue for
trial." CR 56(e).
Mr. Heeb's complaints do not identify his claims for relief in legal terms. Like
Mr. Warring and the trial court, we are able to discern several claims of wrongdoing and
resulting injury that he includes under the umbrella of his claims of "attorney misconduct
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Nos. 29050-6-111; 29051-4-111
Heeb v. Warring
and grand theft of client's property." He complains first, that Mr. Warring and the law
firm charged Mr. Heeb excessive fees in representing him in his divorce; second, that Mr.
Warring and the law firm failed to complete the work required for his divorce,
specifically the QDRO; third, that Mr. Warring and the law firm unlawfully retained Mr.
Heeb's personal documents; fourth, that Mr. Warring deprived Mr. Heeb of his water
certificate or conspired with others to deprive him of it; and fifth, that the three
defendants denied Mr. Heeb his right to redeem his property sold in the execution sale
despite his having tendered the required redemption price.
Statute ofLimitations Defense
The first issue is whether Mr. Heeb presented the trial court with specific facts
demonstrating that his claims might not be barred by the statute of limitations.
A limitations period begins to run when the claim has "accrued." RCW 4.16.005.
A claim is said to accrue when a party has the right to enforce the cause of action and
seek relief in the courts. Gunnier v. Yakima Heart Ctr., Inc., 134 Wash. 2d 854, 953 P.2d
1162 (1998).
Mr. Heeb's first claim involves the amount of attorney fees he was charged by Mr.
Warring and the law firm. Although actions for breach of written contracts have a six-
year limitations period, RCW 4.16.040, actions for breach of an oral contract must be
commenced within three years. RCW 4.16.080(3). Mr. Heeb does not identifY any
written contract provision for support, so the three-year limitations period applies to his
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Heeb v. Warring
claim. The statute of limitations in a contract action begins to run at the time of the
breach. City ofAlgona v. City ofPacific, 35 Wash. App. 517, 521, 667 P.2d 1124 (1983).
Mr. Warring and the law finn filed a notice of intent to withdraw from
representing Mr. Heeb in July 2001. They brought their collection action to recover fees
in August 2001. Mr. Heeb's cause of action regarding the disputed attorney fees accrued
no later than the end of the lawyer-client relationship and the commencement of the
collection action. The statute of limitations therefore ran on this claim in or before
August 2004. Mr. Heeb did not file the actions before us until April 2009. By that time
any claim for excessive fees was barred by the statute of limitations.
Mr. Heeb's second claim is that the law firm wrongfully failed to prepare a QDRO
effectuating the division of his retirement benefits that was ordered in his marriage
dissolution action. In granting summary judgment, the trial court pointed out that Mr.
Warring and the finn were not required to perform work after withdrawing for
nonpayment of their fees. We agree, but here we focus on the statute of limitations.
"The statute oflimitations for a legal malpractice action in Washington is three
years." Huffv. Roach, 125 Wash. App. 724, 729, 106 P.3d 268 (2005). It does not start to
run "until the client 'discovers, or in the exercise of reasonable diligence should have
discovered the facts which give rise to his or her cause of action.'" Janicki Logging &
Constr. Co. v. Schwabe, Williamson & Wyatt, PC, 109 Wash. App. 655, 659, 37 P.3d 309
(2001) (quoting Peters v. Simmons, 87 Wn.2d 400,406, 552 P.2d 1053 (1976». "This
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Nos. 29050-6-III; 29051-4-III
Heeb v. Warring
rule does not require that a plaintiff have knowledge of the cause of action itself; rather,
only the 'facts' that give rise to that cause of action must be known to start the running of
the statute." Id. Where the discovery rule applies, the burden is on the plaintiff to show
that the facts giving rise to the claim were not discovered or could not have been
discovered by due diligence within the limitation period. G. W. Constr. Corp. v. Prof'l
Servo Indus., Inc., 70 Wash. App. 360, 367, 853 P.2d 484 (1993).
Mr. Warring's and the law firm's evidence in support of their motion for summary
judgment satisfied their initial burden of demonstrating that in the exercise of reasonable
diligence, Mr. Heeb could have discovered that additional work (such as the QDRO)
remained to be done when the law firm withdrew as his lawyers in 2001. Mr. Heeb has
produced no evidence otherwise. Indeed, his own evidence shows that he received a
letter addressing the QDRO issue from Mr. Acres, his ex-wife's lawyer, in early July
2006, and the implication of the letter is that Mr. Heeb and Mr. Acres had previously
communicated about the issue. Mr. Heeb failed to overcome the lawyers' initial showing
that he was on notice of the facts giving rise to his claim more than three years before he
filed the current actions.
Mr. Heeb's third claim is that Mr. Warring and the law firm unlawfully refused to
release his personal files. RCW 4.16.080 imposes a three-year limitation "for actions
involving conversion, tort or relief based on fraud." Hudson v. Condon, 101 Wash. App.
866, 872, 6 P.3d 615 (2000). Among the actions covered by the provision are actions
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Nos. 29050-6-111; 29051-4-111
Heeb v. Warring
"for taking, detaining, or injuring personal property, including an action for the specific
recovery thereof, or for any other injury to the person or rights of another." RCW
4.16.080(2).
The transcript of the July 16,2004 hearing reveals that Mr. Heeb first raised his
complaint about the withholding of his personal files during the collection action. He
acted on his continuing complaint about the files by filing suit in Adams County in
March 2004 and complaining about it even after Mr. Warring delivered a box of files at
the time of the July 16, 2004 hearing. The statute of limitations on the claim therefore
ran no later than March 2007. The claim was time barred by the time the current actions
were filed in April 2009.
Mr. Heeb's fourth claim is that Mr. Warring and the law firm somehow interfered
or conspired to interfere with his water rights. Mr. Warring's declaration asserts that he
had nothing at all to do with Mr. Heeb's water rights. Here, again, the three-year statute
for actions involving conversion, tort, or relief based on fraud applies. RCW 4.16.080.
The record demonstrates that Mr. Warring conveyed Mr. Heeb's formerly owned
property to Mr. Soledad in August 2005, that the water association issued a water
certificate to Mr. Soledad in September, and that Mr. Heeb was embroiled in a lawsuit
with the Soledad family before the end of2005. The defendants met their initial burden
of demonstrating that the statute of limitations ran, at the latest, three years later, before
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Nos. 29050-6-111; 29051-4-111
Heeb v. Warring
year-end 2008. Mr. Heeb offers nothing to counter their showing. The claim was time
barred prior to commencement of the current actions.
Mr. Heeb's fifth claim alleges some wrongful interference by Mr. Warring, the
law firm, and Ms. Otey with his right to redeem his property acquired by Mr. Warring in
the execution sale. Mr. Heeb knew no later than May 2005 that his efforts to redeem the
property had failed. Because any claim for wrongful interference is based in tort, it is
subject to the three-year limitations period for tort actions. RCW 4.16.080; Condon, 101
Wash. App. at 872. Any claim that Mr. Heeb could assert arising out of his frustrated
redemption became time barred in May 2008.
The trial court properly granted summary judgment dismissing all of Mr. Heeb's
claims on the basis that they were barred by applicable statutes of limitation.
Res Judicata or Claim Preclusion
The second issue is whether Mr. Heeb presented the trial court with specific facts
demonstrating that his first, third, and fifth claims-those other than the QDRO and
water right related claims-might not be barred by the doctrine of res judicata.
Res judicata, or claim preclusion, is an affirmative defense that bars relitigation of
claims and issues that were litigated, or could have been litigated, in a prior action.
Loveridge v. Fred Meyer, Inc., 125 Wn.2d 759,763,887 P.2d 898 (1995). The purpose
of this doctrine is "to prevent piecemeal litigation and ensure the finality ofjudgments."
Spokane Research & De! Fund v. City ojSpokane, 155 Wash. 2d 89, 99, 117 P.3d 1117
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Nos. 29050-6-III; 29051-4-III
Heeb v. Warring
(2005). For res judicata to apply, there must have been a final judgment on the merits in
the prior action. Pederson v. Potter, 103 Wn. App. 62,67, 11 P.3d 833 (2000). Even
where this threshold requirement has been met, a court will dismiss a subsequent action
based on res judicata only if it is identical with the first action in "( 1) persons and parties,
(2) cause of action, (3) subject matter, and (4) the quality of the persons for or against
whom the claim is made." Spokane Research & De! Fund, 155 Wash. 2d at 99; In re Pers.
Restraint o/Metcalf, 92 Wash. App. 165, 174,963 P.2d 911 (1998).
The collection action brought against Mr. Heeb by Mr. Warring and the law finn
in 2001 was resolved by a final judgment entered following a bench trial-a judgment on
the merits-in February 2004. The Grant County action claiming Mr. Warring's
wrongful withholding of Mr. Heeb's personal files was dismissed in August 2005 for
failure to state a cause of action under CR 12(b)(6), a dismissal that is also a judgment on
the merits. Metcalf, 92 Wash. App. at 175. Only the 2004 Adams County action dealing
with the records, which was dismissed without prejudice in 2007, was not resolved by a
judgment on the merits.
Both the 2001 collection action and the 2005 Grant County records action pitted
Mr. Heeb against Mr. Warring and the law finn, thereby involving the same persons and
parties. While Ms. Otey was not named as an individual party in the two earlier actions,
her liability in the current lawsuits is predicated on her employment by the law finn.
Employer-employee relationships may ground a claim preclusion defense, regardless of
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Nos. 29050-6-111; 29051-4-111
Heeb v. Warring
which party to the relationship was first sued. Thompson v. King County, 163 Wash. App.
184, 193,259 P.3d 1138 (2011). Thompson held that an employee cannot always assert a
claim preclusion defense based on prior litigation involving her employer, but can defend
on that basis unless one of two exceptions to the rule of privity recognized by the
Restatement (Second) ofJudgments applies. Id. at 195 (quoting RESTATEMENT (SECOND)
OF JUDGMENTS § 51 (1982)). Neither exception to the rule of privity would apply here. l
Ms. Otey can rely on claim preclusion as an employee of the law firm.
The 2001 collection action and the 2005 Grant County records action involved
subject matters that are the same as some claims asserted in the current lawsuits. Mr.
Heeb complained in the collection action about the work performed by Mr. Warring and
the law firm, the amount of time they expended in representing Mr. Heeb, and whether or
not Mr. Heeb had requested that work. 2 The execution sale took place in, and was
confirmed in, the collection action. The withholding of Mr. Heeb's personal files was
clearly a subject matter of the 2005 Grant County action.
IUnder the Restatement, a judgment against the law firm that would bar a second
action against the firm extinguishes any claim against an employee (here, Ms. Otey) for
conduct as an employee unless the current action is based on grounds that could not have
been asserted against the law firm in the earlier action or the judgment in the earlier
actions was based on a defense personal to the law firm.
2 Among other evidence, Mr. Heeb filed a "Grievance Against a Lawyer" form in
which he contested the amount the firm charged him for representing him in the divorce
and claims it was Mr. Warring's idea to go to court even though Mr. Heeb stated he did
"not want any more time or money spent on the case." CP at 97.
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Nos. 29050-6-111; 29051-4-111
Heeb v. Warring
As to the last identity requirement, there is no single test but several courts have
determined two causes of action are identical for purposes of res judicata if"(I)
prosecution of the later action would impair the rights established in the earlier action, (2)
the evidence in both actions is substantially the same, (3) infringement of the same right
is alleged in both actions, and (4) the actions arise out of the same nucleus of facts."
Civil Servo Comm 'n v. City ofKelso, 137 Wash. 2d 166, 171,969 P.2d 474 (1999); Yakima
County v. Yakima County Law Enforcement Officers Guild, 157 Wash. App. 304, 328, 237
P.3d 316 (2010). This overlap between the current and prior actions is satisfied in the
case of Mr. Heeb's first, third, and fifth claims, all of which are barred by res judicata in
addition to being barred by the statute of limitations. We agree with the trial court that
the claims based on the failure to prepare the QDRO and the alleged interference with
Mr. Heeb's water rights are not barred by res judicata, but only by the statute of
limitations.
Attorney Fees
Mr. Warring, the law firm, and Ms. Otey request an award of attorney fees under
RAP 18.1 for having to defend against a frivolous appeaL See RAP 18.9(a) (authorizing
an award of fees as a sanction for a frivolous appeal).
In Tiffany Family Trust Corp. v. City ofKent, the Washington Supreme Court
provided the following guidance as to when an appeal is frivolous for purposes of
awarding attorney fees as a sanction:
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Nos. 29050-6-III; 29051-4-111
Heeb v. Warring
"In determining whether an appeal is frivolous and was, therefore,
brought for the purpose of delay, justifying the imposition of terms and
compensatory damages, we are guided by the following considerations: (1)
A civil appellant has a right to appeal under RAP 2.2; (2) all doubts as to
whether the appeal is frivolous should be resolved in favor of the appellant;
(3) the record should be considered as a whole; (4) an appeal that is
affirmed simply because the arguments are rejected is not frivolous; (5) an
appeal is frivolous if there are no debatable issues upon which reasonable
minds might differ, and it is so totally devoid of merit that there was no
reasonable possibility of reversal."
155 Wn.2d 225,241, 119 P.3d 325 (2005) (internal quotation marks omitted) (quoting
Green River Cmty. Col!. Dis!. No. 10 v. Higher Educ. Pers. Bd., 107 Wash. 2d 427, 442-43,
730 P.2d 653 (1986)).
Even given this generous standard for error by an appellant, Mr. Heeb's appeal is
frivolous. He has made no effort to understand or respond to the statute of limitation and
res judicata issues that were clearly identified by Mr. Warring's materials and the trial
court's ruling. He has not raised any debatable issues as to those grounds for dismissal
and there was no reasonable possibility of reversal. We exercise our discretion to award
Mr. Warring, the law firm, and Ms. Otey attorney fees for defending against the appeal
upon compliance with RAP 18.1.
Affirmed.
A majority of the panel has determined that this opinion will not be printed in the
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Nos. 290S0-6-III; 290S1-4-III
Heeb v. Warring
Washington Appellate Reports but it will be filed for public record pursuant to RCW
2.06.040.
flI-t~, a~0C)r­
Siddoway, A.C.J.
r
WE CONCUR:
B~J·
Kulik, J.
18