Armstrong Marine, Inc. v. Michael Wiley, Jr. ( 2020 )

Filed
Washington State
Court of Appeals
Division Two
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
June 30, 2020
DIVISION II
ARMSTRONG MARINE, INC., No. 53163-1-II
Respondent,
v.
MICHAEL P. WILEY, JR., UNPUBLISHED OPINION
Appellant.
GLASGOW, J.—Armstrong Marine Inc. sued Michael P. Wiley Jr., a former employee,
to enforce a noncompete agreement. During the course of the litigation, Wiley’s attorney,
Joseph Wolfley, withdrew from the case. Armstrong Marine ultimately stopped pursuing its
claim, and the court dismissed the case for lack of prosecution.
Wolfley then filed a motion seeking attorney fees and to enforce his attorney’s lien
against any proceeds that Wiley would be entitled to. On the day of the hearing, Wiley filed a
declaration asserting that Wolfley was acting on his behalf. The trial court declined to consider
this untimely declaration and denied Wolfley’s motion for attorney fees.
Wiley appeals, arguing that the motion for attorney fees was properly filed and that the
trial court should have concluded that he was the prevailing party and entitled to fees.
We hold that Wiley failed to properly appeal or assign error to the trial court’s decision
not to consider Wiley’s declaration. Wolfley was not authorized to seek attorney fees himself
because he had withdrawn from the case. Thus, Wolfley’s underlying motion for attorney fees
was improper, and the trial court did not err in denying it. We affirm.
No. 53163-1-II
FACTS
Armstrong Marine employed Wiley as a welder. Wiley signed a contract that included
a noncompete agreement and also provided: “In the event of any demand or suit in connection
with this Agreement, the prevailing party shall be entitled to its reasonable costs and expenses,
including reasonable attorney’s fees.” Clerk’s Papers (CP) at 159.
After Wiley left to work for a nearby competitor, Armstrong Marine sued him to enforce
the noncompete agreement. Wolfley appeared as Wiley’s attorney. Wiley counterclaimed for
attorney fees and moved for summary judgment. The trial court denied both the motion for
summary judgment and Wiley’s subsequent motion for reconsideration.
Armstrong Marine filed a motion to compel discovery that the trial court granted. The
trial court ordered sanctions against Wiley to be held in abeyance subject to Wiley complying
with the discovery order.
Wolfley then withdrew from the case and filed an attorney’s lien on any recovery Wiley
might receive under RCW 60.40.010.
Armstrong Marine stopped prosecuting its case and, more than a year later, the court
sent notices to Armstrong Marine, Wolfley, and Wiley that the case would be dismissed for
lack of prosecution in 30 days. Neither party took any further action, and the court dismissed
the case. Neither party has claimed a lack of notice of the dismissal.
Wolfley then filed a motion for an award of attorney fees and entry of judgment based
on his previously filed lien. He claimed that Wiley was entitled to fees as the prevailing party
and that Wolfley, in turn, was entitled to seek those fees himself through enforcement of his
attorney’s lien.
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On the day of the hearing on the attorney fees motion, after Armstrong Marine had filed
its response and after the local rule deadline for submitting supporting affidavits, see Clallam
County LCR 77(k)(6), Wiley filed a declaration stating that he supported Wolfley’s motion for
attorney fees and incorporated it as his own.1 At the hearing on Wolfley’s motion, the trial court
declined to consider Wiley’s declaration.
The trial court then denied Wolfley’s motion for attorney fees. The trial court noted that
the case had already been dismissed without costs to either party, defense counsel was neither
a party nor the attorney of record at the time he filed his motion for attorney fees, there were no
proceeds to which the lien could attach, and Wiley had not prevailed on any issue or motion up
to that point.
The trial court’s written order indicated that the court ultimately based its decision on
the fact that there were no proceeds to which the lien could attach and Wiley was not a
prevailing party. The order did not address the import of Wiley’s declaration, though it did state
that the trial court had “considered Mr. Wolfley’s motion, including his Declaration and Reply,
as well as Plaintiff’s opposition thereto, and heard oral argument on the motion on March 8,
2019.” CP at 8. Consistent with its oral ruling, the trial court did not list Wiley’s declaration in
the documents it considered when addressing the motion.
Wiley filed an amended notice of appeal in this court but did not attach the written order.
In addition, Wiley described the bases of his appeal as:
[T]he court’s error in determining that Defendant is not the prevailing party
when the Court dismissed Plaintiff’s claim for lack of prosecution, and the
Court’s error in denying an award of attorney’s fees where Defendant is the
prevailing party according to the contract Plaintiff sought to enforce against
Defendant. Additional grounds are reserved until after the records are reviewed.
1
Wolfley also filed his own affidavit detailing the basis for his fees at the same time.
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Am. Notice of Appeal at 1. Attached to the amended notice of appeal were a transcript of the
trial court’s oral ruling and handwritten minutes from the hearing. While Wiley later filed a
copy of the trial court’s written order, no further amended notice of appeal expanding the
grounds for appeal was ever filed.
ANALYSIS
Wiley argues that the trial court improperly denied the request for attorney fees because
he should have been considered the prevailing party for the purposes of the contract. 2
Armstrong Marine counters that regardless of whether Wiley should be considered the
prevailing party, RCW 60.40.010 does not permit an award of attorney fees to Wolfley in this
context. We agree that Wolfley was not authorized to seek attorney fees on his own and the trial
court properly declined to consider Wiley’s untimely declaration, a decision that was not
appealed and to which Wiley has failed to assign error.
A. Whether the Dismissal Precluded Wolfley from Seeking Fees
As a threshold matter, Armstrong Marine argues that Wiley should have sought attorney
fees before the case was dismissed, or he should have filed a motion to set aside the dismissal
because he cannot move for relief once a case is dismissed. But a court retains jurisdiction to
award attorney fees even after a case is dismissed on the merits. For example,
[w]hile a voluntary dismissal under CR 41(a)(1) generally divests a court of
jurisdiction to decide a case on the merits, an award of attorneys’ fees pursuant
to a statutory provision or contractual agreement is collateral to the underlying
proceeding. As a result, the court retains jurisdiction for the limited purpose of
considering a defendant’s motion for fees.
Hawk v. Branjes, 97 Wn. App. 776, 782-83, 986 P.2d 841 (1999).
2
The appellant’s brief identifies Wiley, not Wolfley, as the appellant in this appeal.
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No. 53163-1-II
There is no compelling reason not to apply this reasoning to dismissals for lack of
prosecution. Wiley’s request for fees under the contract is collateral to the underlying lawsuit,
and he would not have been entitled to fees until prevailing as a result of the dismissal, so the
trial court retained jurisdiction over the fee request. As the Hawk court said:
Any other result would permit a party to voluntarily dismiss an action to evade
an award of fees under the express terms of a statute or agreement. Moreover, to
hold otherwise would unnecessarily subject the courts to separate actions to
recover fees readily ascertainable upon dismissal of the underlying claim.
Id. at 783.
Armstrong Marine also relies on Clallam County LCR 0.7 to argue that Wolfley had a
duty to submit a claim for attorney fees before dismissal of the lawsuit.3 While that rule requires
an attorney claiming fees to submit a particular form itemizing the basis for the attorney fees
claim, the rule does not require that the claim be made at a particular time. Clallam County
LCR 0.7. As a result, this local rule did not govern the proper timing of the motion for attorney
fees.
Therefore, the fact that Wiley did not seek fees before the case was dismissed or move
to reopen the case did not preclude him from seeking attorney fees.
B. Wolfley’s Ability to Pursue Attorney Fees Under RCW 60.40.010
Armstrong Marine argues that it was improper for Wolfley to seek to enforce his lien
under RCW 60.40.010 in this case because he did not have standing to intervene to recover
attorney fees when he was no longer the attorney of record. Armstrong Marine argues that it
was improper for Wolfley to file a motion requesting attorney fees and to enforce his lien
3
Armstrong Marine actually cites to Clallam County LAR 0.7, but it must mean LCR 0.7,
which addresses attorney fees claims in civil cases.
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No. 53163-1-II
because he was not a party and he was no longer representing Wiley. Wiley counters that his
declaration effectively empowered Wolfley to seek attorney fees on his behalf.4 We agree with
Armstrong Marine that the trial court properly did not consider Wiley’s declaration and that
Wolfley was not independently authorized to move for attorney fees.
The application and meaning of RCW 60.40.010 are issues of statutory interpretation
that we review de novo. Aiken, St. Louis & Siljeg, P.S. v. Linth, 195 Wn. App. 10, 15, 380 P.3d
565 (2016). “Our fundamental objective in interpreting a statute is to ascertain and carry out
the legislature’s intent.” Id. “‘If a statute’s meaning is plain on its face, then we must give effect
to that plain meaning.’” Id. (quoting Smith v. Moran, Windes & Wong, PLLC, 145 Wn. App.
459, 463, 187 P.3d 275 (2008)). If a statute is ambiguous, we may consider legislative history
and other external sources to determine legislative intent. Id. We avoid interpreting a statute in
a way that renders any portion meaningless or that would lead to absurd or strained results. Id.
1. Background on attorney’s liens
Where an attorney has a lien for their compensation, the lien attaches, among other
things, to an action and its “proceeds,” as well as to any “judgment,” to the extent of the value
of the services rendered by the attorney. RCW 60.40.010(1)(d)-(e). RCW 60.40.010(2) provides
that “[a]ttorneys have the same rights and power over actions and judgments to enforce their
liens under [subsections (1)(d) and (e)] . . . as their clients.” RCW 60.40.010(5) defines
“‘proceeds’” as “any monetary sum received in the action.” The proceeds are limited to the
4
Wiley poses this issue as one of standing. To be sure, Wolfley had a financial interest at stake,
but the more relevant question is whether he had authority to bring a motion for attorney fees
when he did under the particular procedural posture of the case.
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No. 53163-1-II
monetary sums the client has received in the action, but are not limited to the amount actually
in the client’s possession. Aiken, 195 Wn. App. at 16-17.
We held in Aiken that RCW 60.40.010 does not empower attorneys to step into their
clients’ shoes to direct the course of litigation. Id. at 17-19. In Aiken, a law firm represented
Linth in a dispute regarding her interests in a trust. Id. at 13. Linth then entered into a settlement
agreement by which the trust would be sold and she would receive a portion of the proceeds.
Id. The law firm filed an attorney’s lien on the proceeds. Id. Linth was later appointed as trustee,
and the firm then withdrew from representation. Id. at 13-14. The firm later filed a motion to
enforce its lien, arguing a statutory right to remove Linth as a trustee and replace her with
someone else to ensure distribution of the proceeds to satisfy the lien. Id. at 14. We held the
firm was not entitled to take control of the underlying litigation over the trust in order to satisfy
its lien. Id. at 19-20.
Relying on the statute’s legislative history, we concluded that the legislature intended
only for this provision to end double taxation of attorney fees, since both clients and attorneys
were required under federal law to pay taxes on attorney fees when they received them. Id. at
18-19. Therefore, “[t]he right to seek enforcement of an attorney’s lien does not equate to the
right to control the underlying litigation to satisfy the attorney’s interest.” Id. at 19. We reasoned
that to hold otherwise “would lead to an absurd result where attorneys could commandeer their
client’s litigation to pursue their own financial interest.” Id. at 20.
2. Wiley’s declaration
Wiley argues that Aiken is distinguishable because his declaration established that
Wolfley was representing him on the attorney fees motion and ratified Wolfley’s statements
and actions. Armstrong Marine correctly points out that the trial court permitted Wiley to file
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No. 53163-1-II
the declaration, even though it was untimely under the Clallam County Local Court Rules, but
the court ultimately did not consider it.
Wiley did not challenge on appeal the trial court’s refusal to consider his declaration.
RAP 5.3(a)(3) provides that a notice of appeal must designate “the decision or part of decision
which the party wants reviewed.”5 (Emphasis added.) Here, Wiley’s amended notice of appeal
specified the parts of the trial court’s decision that he was appealing, the determination that
Wiley was not the prevailing party, and the denial of attorney fees, without mentioning the
decision not to consider the declaration. Moreover, in his opening brief, Wiley did not assign
error to the trial court’s decision not to consider his declaration. RAP 10.3(a)(4); Becerra v.
Expert Janitorial, LLC, 181 Wn.2d 186, 191 n.4, 332 P.3d 415 (2014) (declining to review the
trial court’s decision on whether to consider declarations because the party failed to assign
error). The trial court’s decision not to consider Wiley’s declaration was not properly appealed.
Even if we were inclined to ignore the failure to properly appeal the trial court’s decision
regarding the declaration, the trial court’s refusal to consider the declaration was plainly within
the trial court’s discretion. See, e.g., O’Neill v. Farmers Ins. Co. of Wash., 124 Wn. App. 516,
522, 125 P.3d 134 (2004) (affirming a trial court’s decision not to consider late-filed
declarations). The declaration was presented to the trial court and opposing counsel for the first
time on the morning of the hearing on Wolfley’s motion, in violation of Clallam County LCR
77(k)(6), so there was a valid basis for the trial court’s refusal.
5
We note that Wiley did not attach to his amended notice of appeal the written order of the trial
court. “The party filing the notice of appeal should attach to the notice of appeal a copy of the
signed order or judgment from which the appeal is made.” RAP 5.3(a). Wiley filed the written
order at this court’s request and included the written order in the clerk’s papers without further
amending his notice of appeal.
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No. 53163-1-II
3. Wolfley’s claim brought on his own behalf
We must therefore determine whether it was proper for Wolfley to bring a claim for
attorney fees on his own behalf. In Wolfley’s motion for attorney fees he did not mention Wiley
and asserted the basis for the motion was RCW 60.40.010. Armstrong Marine argued in its
response that Wolfley could not “step into the shoes of his former client.” CP at 28.
These facts are similar to those in Aiken. Wolfley brought his motion for attorney fees
on his own behalf to satisfy his attorney’s lien. Wolfley attempted to control the underlying
litigation to satisfy his own interest, which RCW 60.40.010 does not permit him to do. Aiken,
195 Wn. App. at 19. The statute gives Wolfley the right to enforce his lien against any proceeds
of the litigation received by Wiley, but it does not allow him to take control of the litigation in
order to generate those proceeds. Thus, under Aiken, it was improper for Wolfley to assume
Wiley’s place to move for attorney fees when Wolfley had withdrawn from Wiley’s case.
Wiley argues Aiken is distinguishable because there the litigation was ongoing, whereas
here the case had been dismissed.6 He reasons that Wolfley’s right to enforce his lien
materialized at the time of dismissal and it was proper for Wolfley to move on his own to seek
attorney fees at that time. But again, the question is not whether Wolfley’s lien would attach to
an award of attorney fees under RCW 60.40.010—it likely would. The question is whether
RCW 60.40.010 gave Wolfley the right to pursue those fees in the first place where he no longer
6
Wiley also makes the conclusory argument that this issue is moot, without explanation or
citation to authority. Presumably, he is referring to the fact that he filed a declaration ratifying
Wolfley’s motion as his own. But as discussed above, the trial court properly declined to
consider this declaration, so it was not effective in resolving the case. We therefore reject
Wiley’s mootness claim.
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No. 53163-1-II
represented Wiley and Wiley was not pursuing those fees himself. Under Aiken, the statute does
not create such a right of action. 195 Wn. App. at 20.
Because we agree with the trial court that Wolfley was not authorized to move for
attorney fees on his own behalf, we need not address the remaining issues. Wiley requests
attorney fees on appeal under RAP 18.1 and the parties’ contract. Because Wiley is not the
prevailing party on appeal, we reject this request.
CONCLUSION
We affirm. Wolfley’s underlying motion for attorney fees was improper and the trial
court did not err in denying it. Wolfley did not have authority to take control of his former
client’s litigation and Wiley failed to properly appeal or assign error to the trial court’s decision
not to consider Wiley’s declaration.
A majority of the panel having determined that this opinion will not be printed in the
Washington Appellate Reports, but will be filed for public record in accordance with RCW
2.06.040, it is so ordered.
Glasgow, J.
We concur:
Sutton, A.C.J.
Cruser, J.
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