Potts Family Motors, Inc. v. City Of Longview ( 2020 )

Filed
Washington State
Court of Appeals
Division Two
April 28, 2020
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION II
POTTS FAMILY MOTORS INCORPORATED, No. 52751-1-II
a Washington Corporation,
Appellant.
vs. UNPUBLISHED OPINION
CITY OF LONGVIEW, a Washington Municipal
Corporation,
Respondent.
MAXA, J. – Potts Family Motors (PFM) appeals the trial court’s dismissal on summary
judgment of a lawsuit it filed against the City of Longview regarding the seizure of vehicles
located at PFM’s sales lot. The City seized the vehicles in connection with a drug investigation
of Sidney Potts, who was associated with PFM. The City gave notice to Potts that it intended to
forfeit the property, and a hearings examiner later issued an order forfeiting Potts’s ownership in
the property.
PFM asserted that it was the owner of the forfeited vehicles and was entitled to notice of
the intended forfeiture. PFM filed a lawsuit against the City, asserting various claims. The trial
court granted summary judgment in favor of the City. The court ruled that the City was immune
from liability under RCW 69.50.506(c) on PFM’s conversion, tortious interference with business
expectancy, and willful misconduct and negligence claims. The court ruled that summary
No. 52751-1-II
judgment was appropriate on PFM’s replevin claim because PFM presented no evidence that it
owned the vehicles.
We hold that the trial court did not err in granting summary judgment because (1) even
though the City failed to plead immunity as an affirmative defense, the immunity was tried by
the implied consent of the parties under CR 15(b); (2) RCW 69.50.506(c) extends immunity to
the City as well as to the City’s officers; (3) RCW 69.50.506(c) applies to the City’s performance
of the notice requirements under chapter 69.50 RCW; and (4) on the replevin claim, PFM
provided no evidence that it had an ownership interest in any of the vehicles seized from its lot.
Accordingly, we affirm the trial court’s summary judgment order dismissing PFM’s
claims.
FACTS
Background
PFM was incorporated in December 2011. Thomas Potts became president in March
2012 and was the only director of PFM at that time. He held 1,000 shares of PFM but did not
contribute any vehicles to the business. He did not work on PFM’s vehicle lot because he lived
in Alaska.
Sidney Potts contributed money and nine vehicles at the start of the business. He was
involved with leasing the real property that became PFM’s sales lot. He wrote checks from an
account in the name of “Potts Family Motors Sidney A. Potts.” Clerk’s Papers (CP) at 116. He
bought vehicles in the company’s name. He had a debit card for paying bills in the name of
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PFM. Potts1 stated that he had an interest in PFM at the time the vehicles were seized, but he did
not own any shares in the corporation.
In July 2012, the Longview Police Department conducted several controlled drug buys
from Potts. On August 10, the City applied for a search warrant for three properties connected to
Potts: PFM’s sales lot, Potts’s second car dealership, and Potts’s home. The City searched all
three properties, and under RCW 69.50.505, seized vehicles, tools, cash, and bank accounts. The
City seized 29 vehicles from PFM’s sales lot.
Forfeiture Proceeding
On August 10 and 22, 2012 the City served a number of “Notice[s] of Seizure and
Intended Forfeiture” relating to the property seized from PFM’s sales lot. The parties agree that
PFM did not receive forfeiture notices for any of the 29 vehicles seized from PFM’s sales lot.
On August 26, Potts sent a “notification of ownership” and “request for hearing” to the
City relating to the August 10 seizure, listing 29 vehicles, cash, funds from various bank
accounts, and various tools. A hearing took place before a hearing officer designated by the City
in December 2013.
Also in December, Thomas Potts, then-president of Potts Family Motors, sent a letter to
the Longview Police Department’s hearings officer demanding the return of all property seized
from PFM in August 2012. The letter stated that “Potts makes this demand in view [of] the . . .
failure to notify Potts Family Motors Inc., pursuant to RCW 69.50.505(3).” CP at 118. The
letter provided contact information for PFM’s registered agent and for Thomas Potts but did not
expressly claim that PFM had any ownership interest in the property or request a hearing.
1
We use the surname “Potts” to refer to Sidney Potts. All other members of the Potts family are
referred to using their first and last names.
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No. 52751-1-II
In January 2014, the hearings examiner issued an order forfeiting Potts’s ownership of
over $50,000 in cash, 29 vehicles, and assorted tools following his convictions on charges of
leading organized crime, unlawful delivery of methamphetamine, and unlawful possession of
methamphetamine with intent to deliver. The hearings officer noted that Potts used three of the
29 vehicles seized from PFM to conduct drug transactions, as observed by Longview police
detectives. Four of the 29 vehicles lacked paperwork at PFM to identify the owners, and no one
came forward in the year between the seizure and the hearing to claim any of these vehicles. The
remaining 22 vehicles either were titled to Potts or the title had been signed over to Potts.
PFM Civil Lawsuit
In January 2017, PFM filed a lawsuit against the City for conversion, tortious
interference with business expectancy, willful misconduct and negligence, and replevin. PFM
requested damages under all claims and a return of the property under the replevin claim. The
complaint alleged that PFM owned the vehicles, tools, and cash subject to the City’s forfeiture
order and that the City had failed to serve PFM with notice of the forfeiture action as required
under RCW 69.50.505(3).
The City’s answer responded that “all actions of Defendant herein alleged manifest a
reasonable exercise of judgment and discretion by authorized public officials made in the
exercise of governmental authority entrusted to them by law and are neither tortious nor
actionable.” CP at 66. The City did not assert immunity under RCW 69.50.506(c) as an
affirmative defense.
The City moved for summary judgment on all of PFM’s claims. The City claimed that it
was immune from suit on PFM’s claims under RCW 69.50.506(c) and Frost v. City of Walla
Walla, 106 Wash. 2d 669, 724 P.2d 1017 (1986). The City also argued that PFM was not entitled
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No. 52751-1-II
to notice of the forfeiture under RCW 69.50.505 because it had not submitted any evidence to
establish that it had an ownership interest in any of the property seized. PFM responded that the
City was not entitled to immunity. During oral argument, both parties argued whether the City
was immune from liability under RCW 69.50.506.
The trial court ruled that the City was immune from claims for money damages under
RCW 69.50.506(c) for PFM’s claims of tortious interference with business expectancy,
conversion, and willful misconduct and negligence. The court granted summary judgment on
PFM’s replevin claim regarding the seized vehicles because they all either were titled to Potts or
had been sold to Potts but title had not yet been transferred.
PFM appeals the trial court’s summary judgment order regarding the vehicles.2
ANALYSIS
A. SUMMARY JUDGMENT STANDARD
Our review of a dismissal on summary judgment is de novo. Frausto v. Yakima HMA,
LLC, 188 Wash. 2d 227, 231, 393 P.3d 776 (2017). We review all evidence and reasonable
inferences in the light most favorable to the nonmoving party. Keck v. Collins, 184 Wash. 2d 358,
368, 357 P.3d 1080 (2015). We may affirm an order granting summary judgment if there are no
genuine issues of material fact and the moving party is entitled to judgment as a matter of law.
CR 56(c); Keck, 184 Wash. 2d at 370. A genuine issue of material fact is one where reasonable
minds could differ on the facts controlling the case’s outcome. Sutton v. Tacoma Sch. Dist. No.
10, 180 Wash. App. 859, 864-65, 324 P.3d 763 (2014).
2
The trial court also granted summary judgment regarding tools, cash, and bank accounts seized
by the City. PFM does not challenge this portion of the order.
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No. 52751-1-II
The party moving for summary judgment “has the initial burden to show there is no
genuine issue of material fact.” Zonnebloem, LLC v. Blue Bay Holdings, LLC, 200 Wash. App.
178, 183, 401 P.3d 468 (2017). A moving defendant can meet this burden by establishing that
there is a lack of evidence to support the plaintiff’s claim. Id. Once the defendant has made
such a showing, the burden shifts to the plaintiff to present specific facts that show a genuine
issue of material fact. Id. Summary judgment is appropriate if a plaintiff fails to show sufficient
evidence to establish the existence of an element on which he or she will have the burden of
proof at trial. Lake Chelan Shores Homeowners Ass’n v. St. Paul Fire & Marine Ins. Co., 176
Wash. App. 168, 179, 313 P.3d 408 (2013).
B. NOTICE OF FORFEITURE UNDER CHAPTER 69.50 RCW
RCW 69.50.505, part of the Uniform Controlled Substances Act, chapter 69.50 RCW,
governs the seizure and forfeiture of personal, real, and intangible property associated with the
drug trade. RCW 69.50.505(1)(d) states, “All conveyances, including aircraft, vehicles, or
vessels, which are used, or intended for use, in any manner to facilitate the sale, delivery, or
receipt” of controlled substances are subject to seizure and forfeiture.
“When the government seeks to forfeit property as drug proceeds, the government must
observe certain modest due process requirements.” Espinoza v. City of Everett, 87 Wash. App.
857, 861, 943 P.2d 387 (1997). When the government fails to follow statutory procedures, it is
estopped from proceeding in a forfeiture action. Id. at 866.
The forfeiture statute obligates the City “to serve notice of an intent to forfeit upon any
individual having a known right or interest in the property sought to be forfeited.” Id. at 865.
The law enforcement agency under whose authority the seizure was made shall
cause notice to be served within fifteen days following the seizure on the owner of
the property seized and the person in charge thereof and any person having any
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No. 52751-1-II
known right or interest therein . . . of the seizure and intended forfeiture of the
seized property.
RCW 69.50.505(3) (emphasis added). Notice of the seizure of property not subject to a security
interest “may be served by any method authorized by law or court rule.” RCW 69.50.505(3).
If a person notifies the agency in writing of his or her claim of ownership of personal
property within 45 days of being served with the agency’s notice, then the person must be
afforded a reasonable opportunity to be heard. RCW 69.50.505(5).
Here, we assume without deciding that the City had an obligation to provide PFM with
notice of the forfeiture action and that the City failed to provide adequate notice.
C. IMMUNITY UNDER RCW 69.50.506(c)
PFM argues that the trial court erred in granting summary judgment to the City on its
conversion, tortious interference with business expectancy, and willful misconduct and
negligence claims because (1) the City failed to assert immunity as an affirmative defense, (2)
RCW 69.50.506(c) extends immunity only to City officers, not to the City itself, and (3) RCW
69.50.506(c) does not apply to failures to comply with RCW 69.50.505(3)’s notice requirements
in seizure actions. We disagree.
1. Waiver of Immunity Defense
PFM argues that the City waived the affirmative defense of immunity under RCW
69.50.506(c) by failing to raise it in the City’s answer to PFM’s complaint. We disagree.
a. Failure to Plead Immunity
CR 8(c) requires a defendant to set forth affirmatively in an answer any “matter
constituting an avoidance or affirmative defense.” In general, a defendant waives any
affirmative defense not asserted in the answer. See Lybbert v. Grant County, 141 Wash. 2d 29, 44,
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No. 52751-1-II
1 P.3d 1124 (2000); Greenhalgh v. Dep’t of Corr., 170 Wash. App. 137, 144, 282 P.3d 1175
(2012).
Here, the City’s answer to PFM’s complaint did not assert an affirmative defense of
immunity under RCW 69.50.506(c). In fact, the answer made no reference at all to immunity.
The City argues that its answer did assert as affirmative defenses compliance with the procedure
outlined in chapter 69.50 RCW for forfeiture of seized property and the reasonable exercise of
governmental authority. But these assertions address only the City’s compliance with the law,
not immunity even if there was noncompliance.
Therefore, we conclude that the City’s answer was insufficient to put PFM on notice that
the City intended to raise an affirmative defense under RCW 69.50.506(c).
b. Trial by Implied Consent of the Parties
The City argues that even if its answer failed to assert immunity from liability under
RCW 69.50.506(c) as an affirmative defense, the defense was not waived because it was tried by
implied consent of the parties as allowed under CR 15(b). We agree.
CR 15(b) states, “When issues not raised by the pleadings are tried by express or implied
consent of the parties, they shall be treated in all respects as if they had been raised in the
pleadings.” In determining whether the parties impliedly tried an issue, we must consider the
record as a whole, including whether the issue was mentioned before trial, and the legal and
factual support for the trial court’s conclusions on the issue. Dewey v. Tacoma Sch. Dist. No. 10,
95 Wash. App. 18, 26, 974 P.2d 847 (1999).
Here, the City moved for summary judgment, arguing that it was immune from suit on all
PFM’s claims under RCW 69.50.506(c) and Frost. PFM did not object to the City raising a new
defense. Instead, PFM responded that the City was not entitled to immunity under RCW
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No. 52751-1-II
69.50.506(c) and Frost. At oral argument, both the City and PFM argued whether the City had
immunity. And the trial court expressly ruled on the immunity issue, adopting the reasoning in
Frost and finding that the City was immune from a claim for money damages under RCW
69.50.506(c).
The parties both argued the application of immunity under RCW 69.50.506(c). The court
ruled on immunity. And PFM never objected to the City raising a new affirmative defense not
asserted in the answer. Therefore, we apply CR 15(b) and treat the affirmative defense of
immunity claim as if it had been raised in the City’s answer.
2. Immunity under RCW 69.50.506(c)
PFM argues that the trial court erred in finding that the City was immune from suit
because immunity under RCW 69.50.506(c) does not extend to the City or to the City’s alleged
failure to comply with the notice requirements of the forfeiture statute. We disagree.
a. Extension of Immunity to the City
RCW 69.50.506(c) provides that “No liability is imposed by this chapter upon any
authorized state, county, or municipal officer, engaged in the lawful performance of his or her
duties.” (Emphasis added.) The statute by its terms applies only to a municipal “officer.” But
the Supreme Court in Frost held that this immunity also extends to the jurisdiction employing
the officer. 106 Wash. 2d at 675.
In Frost, the plaintiff’s vehicle was seized under RCW 69.50.505 based on evidence that
he had used the vehicle to transport and sell controlled substances. Id. at 671-72. But this
evidence was obtained by an illegal search of the car. Id. at 672. Although the car eventually
was returned to the plaintiff, he brought a replevin action against Walla Walla, arguing that he
was entitled to damages for the loss of use of his car and reasonable attorney fees. Id. The court
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No. 52751-1-II
held that RCW 69.50.506(c) operated to immunize both the city and its police officers from
being held liable for damages arising from seizure and improper impoundment of the plaintiff’s
vehicle. Id. at 675.
PFM argues that the holding in Frost that immunity extended to the jurisdiction
employing the officer was erroneous and that the trial court should not have relied on that case.
PFM points to Savage v. State, where the Supreme Court held that the qualified personal
immunity of parole officers for negligent supervision of parolees does not extend to the State.
127 Wash. 2d 434, 445-47, 899 P.2d 1270 (1995). The court stated that Frost was not sound
authority for extending parole officers’ immunity to the State. Id. at 442. The court stated, “[I]n
Frost the court extended the immunity of police officers to their employing jurisdiction. That
decision imported the policy underlying quasi-judicial immunity to the interpretation of a statute
granting only a qualified immunity to certain law enforcement officers for actions which are
neither judicial nor quasi-judicial, the seizing and impounding of vehicles under the statute.” Id.
But although the court in Savage critiqued the analysis in Frost, it did not state that the
court in Frost improperly extended immunity to the city under RCW 69.50.506(c). And it did
not overrule Frost. We are bound to follow Supreme Court precedent. Gorman v. Pierce
County, 176 Wash. App. 63, 76, 307 P.3d 795 (2013). Therefore, we conclude that immunity
under RCW 69.50.506(c) extends to the City.
b. Immunity for Failure to Give Forfeiture Notice
PFM argues that even if Frost properly extends immunity under RCW 69.50.506(c) to an
officer’s employer in some situations, that case does not apply to the City’s failure to give notice
under RCW 69.50.503(3). PFM claims that Frost is distinguishable on its facts. However, RCW
69.50.506(c) provides that “No liability is imposed by this chapter upon any authorized state,
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No. 52751-1-II
county, or municipal officer, engaged in the lawful performance of his or her duties.” (Emphasis
added). Notice under RCW 69.50.505(3) is part of the same RCW chapter as immunity under
RCW 69.50.506(c).
Therefore, we conclude that immunity under RCW 69.50.506(c) applies to the City’s
failure to give a notice of forfeiture.
c. Summary
We conclude that the City has immunity under RCW 69.50.506(c) for allegedly failing to
comply with the notice requirements of RCW 69.50.505(3). Accordingly, we hold that the trial
court did not err in granting summary judgment in favor of the City on PFM’s conversion,
tortious interference with business expectancy, and willful misconduct and negligence claims.3
D. REPLEVIN CLAIM FOR RETURN OF SEIZED VEHICLES
PFM argues that the trial court erred in granting summary judgment on its replevin claim,
which sought the return of the seized vehicles, because there was a material issue of fact as to the
ownership of the vehicles. We disagree.
“Replevin is a special statutory proceeding ‘to determine title to, or right of possession of,
personal property.’ ” SEIU Healthcare Nw. Training P’ship v. Evergreen Freedom Found., 5
Wash. App. 2d 496, 500, 427 P.3d 688 (2018), review denied, 192 Wash. 2d 1025 (2019) (quoting
Apgar v. Great Am. Indem. Co., 171 Wash. 494, 498, 18 P.2d 46 (1933)). The prima facie
elements of a claim for replevin are (1) ownership of the property, (2) a right to its possession,
(3) a demand on the defendant for its surrender, (4) the defendant’s refusal to surrender the
3
Summary judgment also is appropriate on PFM’s replevin claim to the extent that PFM sought
damages under that claim.
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No. 52751-1-II
property, and (5) the defendant’s consequent wrongful detention of the property. SEIU
Healthcare, 5 Wash. App. 2d at 500.
Here, Potts sent a “notification of ownership” and “request for hearing” to the City on
August 26, claiming ownership of the 29 vehicles seized on August 10. The City also submitted
evidence in support of summary judgment that several of the vehicles seized on August 10 were
titled to Potts. Other vehicles still were titled in the names of third parties, but apparently had
not yet been re-titled after their previous owners had sold them to Potts.
Conversely, PFM presented no evidence or even an assertion in opposition to summary
judgment that it owned any of the seized vehicles. In the absence of such evidence, there were
insufficient facts to create a genuine issue of fact regarding ownership of the vehicles.
PFM argues that the December 2013 letter from PFM’s then-president Thomas Potts to
the City (sent the same day as the forfeiture hearing) created a material issue of fact as to the
ownership of the cars. The letter demanded return of the seized vehicles because PFM did not
receive notice of the forfeiture action. The letter provided contact information for PFM’s
registered agent and for Thomas Potts. However, the letter did not expressly claim that PFM had
any ownership interest in the property or request a hearing.
PFM argues that this letter was a sufficient claim of ownership to survive summary
judgment because only the claimant’s contact information is necessary to alert the City that PFM
was contesting the forfeiture of the vehicles. PFM relies on Snohomish Regional Drug Task
Force v. Real Property Known as 20803 Poplar Way, which states that “nothing in the statute
requires the written notice to the seizing agency to contain anything more than contact
information so that further proceedings may be scheduled.” 150 Wash. App. 387, 397, 208 P.3d
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1189 (2009). But this case addressed the assertion of ownership in a forfeiture proceeding, not
in a claim for replevin.
We conclude that there was no genuine issue of fact as to whether PFM owned the seized
vehicles. Accordingly, we hold that the trial court did not err in granting summary judgment to
the City on PFM’s replevin claim.
CONCLUSION
We affirm the trial court’s order granting summary judgment in favor of the City.
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.
MAXA, J.
We concur:
SUTTON, A.C.J.
GLASGOW, J.
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