Wa State Dept Of Retirement Systems v. Kevin Dolan ( 2020 )

Filed
Washington State
Court of Appeals
Division Two
May 12, 2020
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION II
KEVIN DOLAN and a class of similarly No. 52253-5-II
situated individuals,
Respondent,
v.
KING COUNTY, a political subdivision of the UNPUBLISHED OPINION
State of Washington,
Respondent,
DEPARTMENT OF RETIREMENT
SYSTEMS,
Appellant.
CRUSER, J. — In this class action litigation, the superior court awarded attorney fees and
costs to class counsel based on the common fund doctrine. On appeal, the Department of
Retirement Systems (DRS) argues that the superior court erred by exempting class member Judge
Laura Inveen from paying a pro rata share of the class’s common fund attorney fees. DRS argues
that the exemption violates the common fund doctrine principles set forth in Bowles v. Department
of Retirement Systems, 121 Wash. 2d 52, 847 P.2d 440 (1993), and CR 23(b)(1) and (2). DRS also
requests guidance on how it should implement the process for assessing common fund attorney
No. 52253-5-II
fees for other class members who, like Inveen, are members of the judiciary or may become
members of the judiciary in the future.
We affirm and hold that the superior court did not abuse its discretion when providing
equitable relief to Inveen by ordering DRS to not reduce Inveen’s pension due to the common fund
attorney fees, thereby exempting Inveen from payment of attorney fees. Additionally, we decline
DRS’ request to provide guidance on how it should implement the process for assessing the
common fund attorney fees.
FACTS
I. BACKGROUND
In 2006, Kevin Dolan filed a class action lawsuit against King County (County) on behalf
of all employees of public defender agencies with which the County had contracted to provide
legal defense services. The complaint alleged that the class members were entitled to membership
and benefits in the Public Employees’ Retirement System Plan (PERS), but that the County had
not reported their services to DRS or made retirement contributions on their behalf. The class
members requested declaratory and injunctive relief concerning the County’s obligation to provide
PERS benefits and an order requiring the County to make all contributions needed to fund those
benefits. The superior court certified the class as a mandatory injunctive class action under CR
23(b)(1) and (2).
The case proceeded to a bench trial. The superior court ruled that the class members should
be considered county employees for purposes of receiving coverage under PERS. Based on its
decision, the court issued a permanent injunction requiring the County to enroll class members in
PERS.
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No. 52253-5-II
The County appealed to our Supreme Court. Dolan v. King County, 172 Wash. 2d 299, 310,
258 P.3d 20 (2011) (Dolan I). The court affirmed the superior court, holding that class members
were county employees for purposes of PERS and were entitled to be enrolled in PERS. Id. at
320. The court remanded for further proceedings regarding remedies. Id. at 322.
On December 18, 2012, the County and the class reached a settlement. The County agreed
to make retroactive payments to PERS on behalf of the County as the employer and on behalf of
the class members as the employees without receiving reimbursements from the class. The County
also agreed to make payments from the date that the County should have enrolled the class
members. Pursuant to the settlement, the class members received retroactive benefit eligibility
and service credits in PERS from the date that the County should have enrolled the class members.
DRS was not a party to the settlement. Shortly after the superior court’s preliminary
approval of the settlement agreement, DRS moved for full intervention. The court allowed DRS
limited intervention to object to the settlement and to have the right to appeal. The court entered
a final order approving the settlement over DRS’ objections.
DRS appealed the superior court’s approval of the settlement agreement to this court.
Dolan v. King County, No. 44982-0-II (Wash. Ct. App. Nov. 18, 2014) (unpublished),
http://www.courts.wa.gov/opinions/pdf/D2%2044982-0-II%20%20Unpublished%20Opinion
.pdf (Dolan II). DRS argued that the Administrative Procedure Act1 (APA) removed the superior
court’s original subject matter jurisdiction for matters affecting PERS, and the court erred by
denying DRS’ motion to intervene and in ruling that the settlement agreement bound DRS. We
1
Ch. 34.05 RCW.
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No. 52253-5-II
affirmed the superior court’s original jurisdiction but reversed and remanded the court’s order
denying DRS’ motion for full intervention and final order approving the settlement agreement.
On remand, the class moved to modify the superior court’s April 2009 permanent
injunction to clarify issues of service credit for the class members. On June 5, 2015, the court
entered an order modifying the permanent injunction. The County and DRS agreed to its entry.
The modification order stated that the class was entitled to receive retroactive PERS service credit
for work as county employees between January 1, 1978 and March 31, 2012. Additionally, the
County would be required to pay DRS retroactive employer and employee contributions of
approximately $32 million. The order did not resolve the issue of whether DRS could assess
interest on retroactive service credit contributions. The order also did not resolve the issue of
whether class members had an obligation to pay attorney fees or the method of paying attorney
fees.
The class moved for approval of an attorney fee award of $12,554,000 pursuant to the
common fund doctrine. On August 28, 2015, the superior court entered an order granting the
class’s request. Under this theory, the court ordered the attorney fees to be taken from the class
members’ overall pension benefits recovered through the suit. The court ordered the attorney fees
to be immediately paid by the County from employee PERS contributions that the County would
have otherwise paid to DRS. The reduced pension benefits created a reduction from each class
member’s pension.
Class members’ monthly pension checks would then be reduced by a maximum of about
13 percent to account for each class member’s pro rata share of the attorney fees from the common
recovery. The reduction assured that DRS would be repaid by the class as a whole for the attorney
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No. 52253-5-II
fees paid by the County from the contributions to be made by the County. The class members
were also provided the option to repay DRS by paying their pro rata share of the attorney fees in a
lump sum to DRS directly before receiving monthly pension benefits.
The County and DRS disputed whether the County should be required to pay interest in
the amount of about $64 million on the retroactive contributions (omitted PERS contributions) for
the service credits. DRS also contended that under the APA, the superior court did not have subject
matter jurisdiction to address whether the County was required to pay interest because it had not
exhausted all administrative remedies. The court disagreed. The court ruled that it had subject
matter jurisdiction to decide the interest issue and it could exercise equitable authority in ordering
a fair remedy. After considering the equities of each party, the court assessed the County interest
in the amount of $10.5 million on retroactive contributions. The remaining interest would be
socialized among PERS participants.
DRS appealed the superior court’s order on jurisdiction and assessment of interest, arguing
that the court erred in applying equitable principles to determine the County’s interest obligation,
and in the alternative, equity did not support imposing only a portion of the interest. Dolan v. King
County, No. 49876-6-II (Wash. Ct. App. May 1, 2018) (unpublished)
http://www.courts.wa.gov/opinions/pdf/D2%2049876-6-II%20Unpublished%20Opinion.pdf
(Dolan III). We held that the superior court had subject matter jurisdiction regarding the interest
matter. We also held that the superior court did not err in exercising its exclusive and equitable
authority in ruling that the County was required to pay a portion of the interest on retroactive PERS
contributions.
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No. 52253-5-II
II. CURRENT APPEAL
On March 11, 2016, the superior court entered an agreed order implementing the class
repayment plan for pension contributions used for the attorney fees. The court ordered the Office
of the State Actuary (OSA) to calculate the amount each class member owed in common fund
attorney fees by calculating the total pension liability (value) added by service credits obtained
though the Dolan litigation. The court also ordered OSA to calculate a reduction percentage to be
applied to each class member’s pension.
On August 30, 2017, the superior court entered an agreed order that approved notices to be
sent to class members. The notices included an invoice for each class member’s pro rata share of
attorney fees owed and the two payment options. The court’s order also provided that if DRS
learned of additional class members before sending the notices, DRS and class counsel must
estimate the pro rata share of the newly identified members. Subsequently, DRS sent each of the
635 class members a notice specific to that member.
On June 26, 2017, the class brought a motion on behalf of Julia Garratt, a class member
and a King County Superior Court Judge. In addition to receiving PERS benefits as a result of the
Dolan litigation, Garratt was a participant in the judicial benefit multiplier program. Under that
program, a judge earns 3.5 percent of their average final salary each year of service with up to a
maximum of 75 percent of their final salary. RCW 41.40.404. In contrast, under the PERS
program2 Garratt selected, members earn 2 percent of their average final salary for each year of
service, with no maximum percentage. RCW 41.40.620.
2
PERS offers three plans: “Plan 1,” “Plan 2,” and “Plan 3.” See RCW 41.40.005; former RCW
41.40.010 (33), (34), (35) (2003). Garratt selected PERS Plan 2.
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No. 52253-5-II
Stated differently, the judicial benefit multiplier program allows a judge to increase the
benefit multiplier used in their retirement benefit calculation for their judicial service. However,
benefits are capped at 75 percent of a judge’s average final salary. This program allows a judge
to accrue service credit3 and benefits faster in exchange for a lower benefit cap.
Garratt consulted DRS and learned that with about 6 more years of judicial service, plus
her previous PERS service credits received outside of the Dolan litigation, she would reach the
maximum pension amount. Her additional 6 years of service as a judge would increase her pension
by about 21 percent, which would bring her to the maximum of 75 percent of her average final
salary. Therefore, if Garratt worked 6 more years as a judge, her 12 years of PERS service credits
obtained through the Dolan litigation would have no impact on her pension.
The class moved to revise Garratt’s and other similarly situated class members’
responsibility for paying a portion of the common fund attorney fees. The class asked the court to
require Garratt and other similarly situated class members to pay only the attorney fees to the
extent that the service credit received through the Dolan litigation actually enhanced their
pensions. In Garratt’s case, this would only be if she retired before she reached the maximum of
her average final salary. The superior court denied the motion.
On May 21, 2018, the class moved to correct the notices and pro rata attorney fee amounts
for five class members—Anne Dederer, Robin Jones, Carolyn Frimpter, Linda Moland, and
Inveen. Dederer and Jones received notices from DRS, but the notices did not include all their
3
“Service” for PERS Plan 2 and Plan 3 members is defined as periods of employment by a member
in an eligible position or positions for one or more employers for which compensation is paid.
Former RCW 41.40.010(9)(a), (b). For example, compensation earned in full-time work for 90 or
more hours in one month constitutes one service credit month. Id.
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No. 52253-5-II
service credit. Dederer’s notice was missing 68 months of service credit and Jones’s notice was
missing 22 months of service credit. The notices thus understated their pro rata share of the
common fund attorney fees. Frimpter and Moland did not receive any notice from DRS because
the parties did not know of their existence at the time DRS sent the notices. The County
transmitted 15 months of service credit to Frimpter and 63 months service credit to Moland.
Because DRS did not send Frimpter and Moland a notice, they were not assessed their pro rata
share of the common fund attorney fees even though they received service credits due to the Dolan
litigation.
In regards to Inveen, the class argued that Inveen should not be assessed a pro rata share of
the common fund attorney fees. Inveen worked as a public defender in 1980, 1981, and a small
part of 1982. Several years before she received the notice, Inveen filled out a questionnaire sent
from class counsel where she disclosed her work history. Inveen did not have any other
involvement in the litigation. As a result of the litigation, the County transmitted 27 months of
service credit to Inveen. Inveen received a notice from DRS stating that she owed $14,482 in
attorney fees for the service credits she received from the Dolan litigation.4
The class argued that Inveen should be exempt from paying attorney fees because Inveen
could not benefit from the litigation. Like Garratt, Inveen participated in the judicial benefit
multiplier program. However, when she received the notice from DRS regarding the attorney fees
4
Although DRS does not concede this point, Inveen’s pro rata share of the attorney fees appears
to be miscalculated. In its motion, the class notes that another superior court judge, who is about
the same age as Inveen and who worked as a public defender at around the time as Inveen, was
assessed a pro rata share of about $5,000 in attorney fees. The other superior court judge also
worked as a public defender for five months longer than Inveen.
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No. 52253-5-II
owed, Inveen’s pension was at the maximum 75 percent of her average final salary without
receiving the service credit for her two plus years of service as a public defender. Because Inveen’s
pension had reached its maximum, any service credit that she was entitled to as a result of the
Dolan litigation did not have any impact on her pension. Thus, unlike Garratt, Inveen did not
receive any benefit from the litigation.
The class argued that it was unfair to the class for Dederer, Frimpter, Jones, and Moland to
receive Dolan service credit increasing the value of their PERS pensions but have a reduced
responsibility or no responsibility for attorney fees associated with the Dolan litigation. The class
further argued that it was equally unfair to assess Inveen with attorney fees when she received no
benefit from the Dolan litigation. The class asked the superior court to direct DRS to send
corrected notices to Dederer and Jones and send notices to Frimpter and Moland assessing their
pro rata share of attorney fees.
The class also asked the superior court to rule that Inveen’s PERS pension not be reduced
at retirement due to the common fund attorney fees because she received no benefit from the Dolan
litigation. The class reasoned that assessment of the correct amount of attorney fees for Dederer
and Jones and assessment of attorney fees to Frimpter and Moland would remedy any shortage to
the PERS fund due to Inveen’s nonpayment of attorney fees.5
DRS opposed the class’s motion. DRS conceded that there was an error in calculating
Dederer’s and Jones’s pro rata share of attorney fees. However, DRS argued that in the interest of
5
The class estimated that for Dederer’s pro rata share to be correct, she must be assessed an
additional $4,608. For Jones’s pro rata share to be correct, the class estimated that she must be
assessed an additional $1,664. The class calculated Frimpter’s share to be $2,083 and Moland’s
share to be $12,952. These amounts add up to around $21,000.
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No. 52253-5-II
finality and to avoid periodically recalculating attorney fees and reissuing notices to each class
member, the superior court should not order DRS to recalculate or calculate their pro rata share of
attorney fees.6 Regarding Frimpter and Moland, DRS also argued that assessing them with their
pro rata shares of attorney fees conflicted with the court’s prior order implementing the repayment
plan. The prior order stated that only class members discovered before DRS sent the notices would
be obligated to pay a pro rata share of the attorney fees, and Frimpter and Moland were discovered
after DRS sent the notices.
DRS contended that waiving payment for Inveen conflicted with the superior court’s order
regarding Garratt because Inveen and Garratt were “similarly situated judges.” Clerk’s Papers
(CP) at 239. DRS argued that the class was collaterally estopped from relitigating the issue of
whether a judge participating in the judicial benefit multiplier program should be relieved of the
responsibility to pay their pro rata share of the attorney fees.
The superior court granted the class’s motion in part, ruling that DRS “shall not withhold
any sums from Ms. lnveen’s retirement based on the Dolan litigation.” Id. at 263-64. The court
found that DRS’ reduction of Inveen’s pension due to the attorney fees was “inherently unfair and
an unintended consequence of the Dolan litigation.” Id. at 263. The court ruled that “lnveen
should not unjustly enrich third parties for payment of assessed attorney’s fees which apply in her
unique fact pattern.” Id.
6
DRS also briefly argued that there was no indication that the class notified the four members
regarding the change in attorney fees, therefore assessing Frimpter and Moland with fees and
assessing Dederer and Jones with additional fees would violate their due process rights. DRS does
not renew this argument on appeal.
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No. 52253-5-II
The superior court denied the class’s request to order DRS to send corrected notices to
Dederer and Jones and to send notices to Frimpter and Moland. The court found that any fault
regarding the miscalculation lays with the County or DRS and ruled that DRS “shall not recalculate
pro rata fees as a result of this order.” Id. at 266. The court determined that “[t]he Doctrine of
Finality has credibility as applied to this fact pattern,” and the “fact that other class members may
pay for these class members’ share of the attorney’s fees is not [a] sufficient reason to go back and
attempt to correct the error.” Id. at 264.
DRS appeals the superior court’s ruling ordering DRS to not withhold any sums from
lnveen’s retirement based on the Dolan litigation.
DISCUSSION
I. INVITED ERROR
The class argues that we should not consider DRS’ appeal because DRS invited any error
regarding loss to the PERS fund. The class contends that assessing Dederer and Jones with the
correct amount of attorney fees and assessing Frimpter and Moland with attorney fees, which DRS
opposed, would have remedied any shortage to the PERS fund due to Inveen’s nonpayment of
attorney fees.7 The class argues that by opposing the motion, DRS created the shortfall to the
PERS fund and is therefore prohibited from claiming error due to the shortfall on appeal.
In response, DRS argues that it did not invite the error regarding the Inveen order because
the superior court ordered the PERS fund to pay for Inveen’s share of the attorney fees, a remedy
7
DRS does not dispute the class’s position that assessing Dederer and Jones with the correct
amount of attorney fees and assessing Frimpter and Moland with attorney fees would have been
sufficient to reimburse the common fund for the fees that the fund did not receive from Inveen.
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No. 52253-5-II
not requested by either party. We hold that DRS invited any error regarding a shortfall to the
PERS fund, but DRS did not invite any error regarding the Inveen order.
The invited error doctrine “‘prohibit[s] a party from setting up an error at trial and then
complaining of it on appeal.’” Angelo Prop. Co. v. Hafiz, 167 Wash. App. 789, 823, 274 P.3d 1075
(2012) (alteration in original) (internal quotation marks omitted) (quoting City of Seattle v. Patu,
147 Wash. 2d 717, 720, 58 P.3d 273 (2002)). The doctrine applies when a party takes affirmative
and voluntary action that induces the trial court to take the action that the party later challenges on
appeal. In re Estate of Irwin, 10 Wash. App. 2d 924, 927, 450 P.3d 663 (2019).
In arguing invited error, the class points to DRS’ argument on appeal that the superior court
compromised the PERS fund by waiving Inveen’s payment of the attorney fees and then
precluding DRS from offsetting the loss to the fund due to Iveen’s nonpayment by ordering DRS
to not reassess Dederer and Jones with the correct amount of attorney fees and assess Frimpter and
Moland with attorney fees. DRS argues that the court’s order effectively forced uninvolved third
parties to the Dolan litigation to pay Inveen’s pro rata share of the attorney fees because the PERS
fund would absorb the loss. However, DRS expressly opposed assessing the four other class
members with attorney fees or a corrected fee amount below. Had DRS assessed the four other
class members with their correct pro rata shares, the shortfall due to Inveen’s nonpayment would
have been remedied because the share amounts were greater than the amount owed by Inveen.
Further, their payment would have ensured that uninvolved third parties to the Dolan litigation
would not have paid Inveen’s share of the attorney fees.
DRS relies on Horne v. Aune, 130 Wash. App. 183, 121 P.3d 1227 (2005), to argue that the
invited error doctrine does not apply. In Horne, the court held that when a trial court’s action was
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No. 52253-5-II
inconsistent with the course of action suggested by the appealing party, the invited error doctrine
does not apply. Id. at 191 n.2. DRS argues that like Horne, DRS’ position when opposing the
class’s motion to correct the notices and pro rata fees for the five class members was inconsistent
with the action that the superior court took. DRS opposed waiving payment for Inveen and
opposed assessing and reassessing the four other class members with the correct fee amounts on
the grounds that principles of finality should govern.
The superior court agreed with DRS’ finality argument as it pertained to assessment and
reassessment of the four other class members’ fees, concluding that “[t]he Doctrine of Finality has
credibility as applied to this fact pattern.” CP at 264. Therefore, the court’s action was not
materially inconsistent with the action suggested by DRS. Horne, 130 Wash. App. at 191 n.2.
Rather, the court’s ruling was identical to DRS’ argument below when opposing the assessment
and reassessment of the four class members’ attorney fees. A party may not use theories or
arguments to his or her advantage at trial and then argue on appeal that they were erroneously
accepted by the trial court. State v. Lewis, 15 Wash. App. 172, 176, 548 P.2d 587 (1976). Thus, we
do not entertain DRS’ claim that the court erred when it failed to offset the loss to the PERS fund
because this error, if any error occurred, was invited by DRS.
On its own initiative, however, the superior court ordered DRS to not charge Inveen with
her pro rata share of the attorney fees and ordered DRS to not assess and reassess the four other
class members with their correct pro rata share of the attorney fees. DRS did not advocate for
Inveen to be exempted from paying her pro rata share of the attorney fees or present an alternative
argument that in the event Inveen was exempted, the court should order DRS to assess and reassess
the four other class members with their correct pro rata share of the attorney fees. Therefore, DRS’
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No. 52253-5-II
actions did not induce or set up Inveen’s exemption, the error DRS now claims on appeal. Angelo,
167 Wash. App. at 823. We hold that DRS’ claim of error regarding the superior court’s exemption
of Inveen from paying a pro rata share of the attorney fees is not barred by invited error.
II. THE COMMON FUND DOCTRINE
A. LEGAL PRINCIPLES
Generally, a party pays its own attorney fees unless an award of fees is authorized by
contract, statute, or a recognized ground in equity. Bowles, 121 Wash. 2d at 70 (quoting Painting &
Decorating Contractors of Am., Inc. v. Ellensburg Sch. Dist., 96 Wash. 2d 806, 815, 638 P.2d 1220
(1982)). The common fund doctrine is an equitable ground for granting and recovering attorney
fees. City of Sequim v. Malkasian, 157 Wash. 2d 251, 271, 138 P.3d 943 (2006). Under the common
fund theory, an award of attorney fees is assumed by the prevailing party instead of the losing
party when the prevailing party creates a common fund for their own benefit and the benefit of
others. Winters v. State Farm Mut. Auto. Ins. Co., 144 Wash. 2d 869, 877, 31 P.3d 1164, 63 P.3d
764 (2001).
The common fund doctrine provides that an attorney who renders services in recovering or
preserving a fund in which a number of persons are interested may in equity be allowed
compensation out of the whole fund. Id. Stated differently, the doctrine allows an attorney “in
equity to recover fees in the absence of a contract or statute when his services confer a substantial
benefit for a group of people.” Lynch v. Deaconess Med. Ctr., 113 Wash. 2d 162, 167-68, 776 P.2d
681 (1989).
The common fund doctrine generates an “‘equitable sharing rule.’” Hamm v. State Farm
Mut. Auto. Ins. Co., 151 Wash. 2d 303, 310, 88 P.3d 395 (2004) (quoting Mahler v. Szucs, 135 Wash. 2d
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No. 52253-5-II
398, 426, 957 P.2d 632, 966 P.2d 305 (1998)). “‘[W]hen one person creates or preserves a fund
from which another then takes, the two should share, pro rata, the fees and costs reasonably
incurred to generate that fund.’” Winters, 144 Wash. 2d at 877 (quoting Winters v. State Farm Mut.
Auto. Ins. Co., 99 Wash. App. 602, 609, 994 P.2d 881 (2000), aff’d, 144 Wash. 2d 869). Without such,
a person who benefits from a lawsuit without contributing to its expense is unjustly enriched at the
successful litigant’s expense. Boeing Co. v. Van Gemert, 444 U.S. 472, 478, 100 S. Ct. 745, 62 L.
Ed. 2d 676 (1980).
B. STANDARD OF REVIEW
As an initial matter, the parties disagree as to the standard of review governing our review
of DRS’ appeal. DRS argues that we review the superior court’s ruling de novo because whether
the PERS fund must pay for one of its member’s pro rata share of the common fund attorney fees
is a question of law. The class disagrees, arguing that the standard of review is abuse of discretion
because the superior court’s authority to enter the order at issue was based in equity. We agree
with the class.
DRS relies on Matsyuk v. State Farm Fire & Casualty Co., 155 Wash. App. 324, 329, 229
P.3d 893 (2010), and its subsequent reversal by our Supreme Court, 173 Wash. 2d 643, 272 P.3d 802
(2012), a case that involved a question of law about whether a common fund was created in the
automobile insurance context. The doctrine applies in this context when an automobile insurer
that has paid benefits to an injured party is required to pay a pro rata share of the injured party’s
attorney fees anytime it seeks reimbursement out of the judgment or settlement with a tortfeaser.
Belling v. Emp’t Sec. Dep’t, 191 Wash. 2d 925, 931-32, 427 P.3d 611 (2018).
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No. 52253-5-II
DRS argues that we should address this appeal as a question of law reviewed de novo
pursuant to our decision in Matsyuk because in that case, we reviewed de novo whether the
common fund doctrine applied, and the Supreme Court did not specifically address the standard
of review in its reversal of our decision. 155 Wash. App. at 329-30. However, this argument is
misplaced because DRS does not challenge on appeal the superior court’s ruling that the common
fund doctrine applied. Rather, DRS challenges the court’s ruling that ordered DRS to not collect
Inveen’s pro rata share of the common fund attorney fees, thereby exempting Inveen from payment
of attorney fees.
DRS further urges de novo review because the Supreme Court held in Matsyuk that the
question of whether a third party should pay pro rata attorney fees under RAP 18.1 is a question
of law. 173 Wash. 2d at 659. But this argument is also misplaced because the award of attorney fees
under RAP 18.1 is irrelevant to the question of whether the superior court improperly exempted
Inveen from paying her pro rata share of the common fund attorney fees.
We disagree with DRS and hold that the superior court’s authority to enter the Inveen order
was based in equity because the common fund doctrine is grounded in equity and arises from
equitable principles. Bowles, 121 Wash. 2d at 70; Hamm, 151 Wash. 2d at 311. “A court sitting in
equity has broad discretion to shape relief.” Bloor v. Fritz, 143 Wash. App. 718, 739, 180 P.3d 805
(2008). Because the common fund doctrine invoked the superior court’s general equity power, we
review the superior court’s consideration of equities to determine whether the court abused its
discretion. Arzola v. Name Intelligence, Inc., 188 Wash. App. 588, 596, 355 P.3d 286 (2015). Here,
we review the superior court’s order granting equitable relief to Inveen from payment of her pro
rata share of the attorney fees for an abuse of discretion. A trial court abuses its discretion when
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No. 52253-5-II
its decision is manifestly unreasonable or based upon untenable grounds. Havens v. C & D
Plastics, Inc., 124 Wash. 2d 158, 168, 876 P.2d 435 (1994).
C. INVEEN’S LIABILITY UNDER BOWLES
DRS argues that the superior court’s order exempting Inveen from payment of her pro rata
share of the common fund attorney fees was improper because the order violates Bowles by (1)
shifting the responsibility of paying Inveen’s share of the attorney fees to the PERS fund and (2)
treating the PERS fund as property of the class. The class argues that the superior court properly
exempted Inveen from paying attorney fees because Inveen did not receive any benefit from the
litigation. We agree with the class.
In its final order on assessment of common fund attorney fees on Inveen, the superior court
expressly adopted class counsel’s arguments by finding that reduction of Inveen’s pension due to
attorney fees was “inherently unfair and an unintended consequence of the Dolan litigation.” CP
at 263. The court ordered DRS to not withhold the attorney fees from Inveen’s retirement based
on the Dolan litigation, concluding that “lnveen should not unjustly enrich third parties for
payment of assessed attorney’s fees which apply in her unique fact pattern.” Id.
In Bowles, employees of the State covered by the PERS pension plan filed a class action
suit against DRS, arguing that DRS improperly limited accrued vacation and sick leave benefits
(“leave cashouts”). 121 Wash. 2d at 57. Our Supreme Court held that DRS violated the employees’
pension rights when it placed certain limitations on leave cashouts. Id. at 68, 69. The court also
affirmed the grant of attorney fees to the employees under the common fund doctrine because the
employees successfully sued to secure payment of additional funds into their pension plan and
increased benefits to all plan members. Id. at 71. The court affirmed the trial court’s order that
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the PERS fund immediately pay the attorney fees on behalf of the employees, subject to
reimbursement by employees as class members. Id. at 75.
DRS points to the assertion in Bowles that even though the PERS fund will initially front
the attorney fees, “‘the attorney fee award remains a liability of the plaintiff class’” to argue that
Inveen is liable for her pro rata share of the attorney fees as a class member. Br. of Appellant at
17 (quoting Bowles, 121 Wash. 2d at 76). However, Bowles also made clear that the common fund
doctrine “authorizes attorney fees only when the litigants preserve or create a common fund for
the benefit of others as well as themselves.” 121 Wash. 2d at 70-71 (emphasis added).
The requirement that litigants benefit from the common fund is well established. Belling,
191 Wash. 2d at 930 (quoting Malkasian, 157 Wash. 2d at 271). However, Washington case law
discusses this requirement only when determining whether a party created a common fund entitling
the party’s attorney to fees from the common fund and not in the context of whether an individual
class member may be exempt from paying common fund fees if the class member did not benefit
from the common fund. Belling, 191 Wash. 2d at 929-30; Winters, 144 Wash. 2d at 877, 881-82;
Bowles, 121 Wash. 2d at 71.
The class points us to Boeing, 444 U.S. at 474, a case that arose from a class action to
recover for Boeing’s failure to give adequate notice of intention to call in certain convertible
debentures. The district court awarded attorney fees under the common fund doctrine and provided
that “[e]ach individual recovery was to carry its proportionate share of the total amount allowed
for attorney’s fees, expenses, and disbursements.” Id. at 476. Boeing appealed the attorney fee
award, arguing that the court should have awarded attorney fees from only the portion of the fund
actually claimed by class members. Id. at 477. Boeing argued that the common fund doctrine was
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inapplicable to the unclaimed portion of the fund because class members who never made a claim
against the fund would never receive the benefit of the fund. Id.
The Supreme Court disagreed. Id. at 480-81. The Supreme Court concluded that the
attorneys for a successful class may recover attorney fees from a common fund created for the
class, even if some class members did not make a claim against the fund. Id. The Supreme Court
reasoned that
[t]o claim their logically ascertainable shares of the judgment fund, absentee class
members need prove only their membership in the injured class. Their right to
share the harvest of the lawsuit upon proof of their identity, whether or not they
exercise it, is a benefit in the fund created by the efforts of the class representatives
and their counsel.
Id. at 480. In order to ensure that some members of the class do not bear additional costs, the rule
requires “every member of the class to share attorney’s fees to the same extent that he can share
the recovery.” Id. Although Boeing itself could not be obligated to pay the fees awarded to the
class attorneys, Boeing’s claim against unclaimed money could not defeat each class member’s
equitable obligation to share the expenses of litigation. Id. at 482.
DRS does not dispute that Inveen did not receive any benefit from the Dolan litigation.
However, pursuant to a settlement agreement, the County made retroactive payments to the PERS
fund on its own behalf as the employer and on behalf of the class members as the employees.
Although the County made these payments on behalf of Inveen, her interest in the payments will
never vest because her pension was already capped when she received the notice regarding her pro
rata share of the common fund attorney fees. This is because when Inveen received the notice
regarding her pro rata share of the common fund attorney fees, Inveen’s pension had already
reached the maximum allowance of 75 percent of her average final salary. Due to Inveen’s
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inability to ever claim the funds the County paid to PERS on her behalf, the payments will go
unused by Inveen.
Although Inveen has proven her “membership in the injured class,” Inveen is unable to
“share the harvest of the lawsuit” because Inveen cannot claim the two years of service credit to
benefit her pension. Id. at 480. Because Inveen did not have a “right to share the harvest of the
lawsuit upon proof of [her] identity,” Inveen did not receive any benefit created by the efforts of
class counsel. Id.
This rationale is consistent with the superior court’s conclusion that Inveen’s circumstances
differ from Garratt’s circumstances. Unlike Inveen, when DRS assessed Garratt with her share of
the common fund attorney fees, Garratt’s pension had not reached the maximum amount. With
the service credit received from the Dolan litigation, Garratt had the option of immediately retiring
with a full pension. Therefore, Garratt benefited from the Dolan lawsuit because she had a “right
to share the harvest” of the Dolan lawsuit by immediately retiring with a full pension, regardless
of whether she exercised that right. Id.
As a result of the litigation, Inveen was assessed a pro rata share of $14,482 in attorney
fees. If Inveen had paid the attorney fees without receiving any benefit of the litigation, other
litigants would have been unjustly enriched at Inveen’s expense. DRS counters that by exempting
Inveen from paying her pro rata share, the responsibility to pay Inveen’s share impermissibly
shifted to all PERS members and employers who, like Inveen, received no benefit from the Dolan
litigation. DRS does not attempt to explain how shifting the cost from Inveen to the PERS fund,
including other similarly situated PERS members who received absolutely no benefit from the
Dolan litigation, is not a legitimate equitable remedy.
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Sitting in equity, the superior court had broad discretion to balance the relative equities of
the parties in order to fashion a remedy. Arzola, 188 Wash. App. at 596. Here, the superior court
invoked its equitable power to prevent other successful litigants from being unjustly enriched at
Inveen’s expense. We agree with the superior court that requiring Inveen to be responsible for her
pro rata share of the common fund fees is “inherently unfair and an unintended consequence of the
Dolan litigation.” CP at 263. Holding otherwise would be contrary to the equitable principle that
litigants who benefit from a common fund or have the ability to “share the harvest” of a common
fund also share the burden of the attorney fees. Boeing, 444 U.S. at 480; Hamm, 151 Wash. 2d at
320. Without this principle, those who benefit from the lawsuit without contributing to its cost are
unjustly enriched at the expense of a successful litigant. Boeing, 444 U.S. at 478.
We hold that the superior court did not violate the common fund doctrine when it exempted
Inveen from paying a pro rata share of the attorney fees based on the Dolan litigation.
III. CR 23(b)
DRS next argues that Inveen’s exemption from paying a pro rata share of the common fund
attorney fees violated CR 23(b)(1) and (2) by effectively excluding Inveen from the class. We
disagree.
CR 23 governs class actions. Washington courts favor liberal interpretation of CR 23 to
“avoid multiplicity of litigation,” in order to save “members of the class the cost and trouble of
filing individual suits” and also to free “the defendant from the harassment of identical future
litigation.” Brown v. Brown, 6 Wash. App. 249, 257, 492 P.2d 581 (1971).
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No. 52253-5-II
A class action may be maintained under CR 23(b)(1), (2), or (3). Here, the superior court
certified the class under subsections (b)(1) and (b)(2).8 Subsection (b)(1) is intended to avoid
prejudice to the defendant or absent class members. Sitton v. State Farm Mut. Auto. Ins. Co., 116
Wash. App. 245, 251, 63 P.3d 198 (2003). Certification under CR 23(b)(2) is appropriate when
injunctive or declaratory relief is requested and when the defendant has acted, refused to act, or
failed to perform a legal duty on grounds generally applicable to the class. Id.
Although all three categories have corresponding procedural requirements, classes certified
under CR 23(b)(1) and (2) are “‘mandatory’” classes. Nelson v. Appleway Chevrolet, Inc., 160
Wash. 2d 173, 189, 157 P.3d 847 (2007) (quoting Sitton, 116 Wash. App. at 252). As a mandatory
class, all members of the class are bound by the determination of the respondent’s rights and
obligations to the class. Brown, 6 Wash. App. at 256. This is because certification under subsection
(b)(1) is reserved for actions where individual adjudications would be impossible or unworkable,
and certification under subsection (b)(2) was intended for relief that impacts the entire class and
8
Subsections (b)(1) and (b)(2) state,
(b) Class Actions Maintainable. An action may be maintained as a class
action if the prerequisites of section (a) are satisfied, and in addition:
(1) The prosecution of separate actions by or against individual members of
the class would create a risk of
(A) inconsistent or varying adjudications with respect to individual
members of the class which would establish incompatible standards of conduct for
the party opposing the class, or
(B) adjudications with respect to individual members of the class which
would as a practical matter be dispositive of the interests of the other members not
parties to the adjudications or substantially impair or impede their ability to protect
their interest; or
(2) The party opposing the class has acted or refused to act on grounds
generally applicable to the class, thereby making appropriate final injunctive relief
or corresponding declaratory relief with respect to the class as a whole.
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No. 52253-5-II
can be remedied by a class-wide injunction. Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 362-
63, 131 S. Ct. 2541, 180 L. Ed. 2d 374 (2011).9
DRS argues that excluding Inveen from assessment of common fund attorney fees
effectively allowed Inveen to opt out of the class, in violation of CR 23(b)(1) and (2). DRS
contends that the court’s decision violated the procedural requirements of CR 23(b)(1) and (2)
because as a mandatory class, the result of the litigation is binding on all class members. However,
exempting Inveen from payment of the attorney fees did not necessarily equate to Inveen opting
out of the class action as a whole. Inveen did not argue that she should not be bound by the
determination of the County’s obligation to provide retroactive PERS benefits to the class. See
Brown, 6 Wash. App. at 256. Inveen also did not claim that she was entitled to a different form of
relief against the County or that the relief granted did not remedy the County’s failure to provide
PERS benefits while she was employed as a public defender. See Sitton, 116 Wash. App. at 251.
Moreover, as noted above, the County contributed funds to PERS on Inveen’s behalf. In
order to fully exempt Inveen from the class, the County must subtract all 27 months of service
credit Inveen earned through the Dolan litigation for her past employment as a public defender.
However, the County already paid the PERS fund for the retroactive service credit on behalf of
itself as the employer and on behalf of Inveen as the employee. For Inveen to be deemed fully
opted out of the class, the PERS fund would have had to reimburse the County for these payments
9
“CR 23 is identical to its federal counterpart, Fed. R. Civ. P. 23.” Pickett v. Holland Am. Line-
Westours, Inc., 145 Wash. 2d 178, 188, 35 P.3d 351 (2001). When the state and federal rules at issue
are substantially similar, we look to federal decisions for guidance in interpreting and construing
the state rule. Smith v. Behr Process Corp., 113 Wash. App. 306, 319 n.2, 54 P.3d 665 (2002).
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No. 52253-5-II
because Inveen would no longer be a class member entitled to the 27 months of service credit for
her past employment as a public defender. This did not occur.
We hold that Inveen’s exemption from paying a pro rata share of the common fund attorney
fees did not effectively exclude Inveen from the class in violation of CR 23(b)(1) and (2).
IV. DRS’ REQUEST FOR GUIDANCE
DRS argues that if we affirm the superior court’s order, we should provide guidance to
DRS on how it should implement the Dolan common fund attorney fees process for other class
members who are members of the judiciary or who will become members of the judiciary in the
future.
We decline DRS’ request to provide guidance because any guidance would constitute an
advisory opinion.
There must be a justiciable controversy before the jurisdiction of the court may be invoked.
Wash. Educ. Ass’n v. Wash. State Pub. Disclosure Comm’n, 150 Wash. 2d 612, 622, 80 P.3d 608
(2003). A justiciable controversy exists when
(1) . . . an actual, present and existing dispute, or the mature seeds of one, as
distinguished from a possible, dormant, hypothetical, speculative, or moot
disagreement, (2) between parties having genuine and opposing interests, (3) which
involves interests that must be direct and substantial, rather than potential,
theoretical, abstract or academic, and (4) a judicial determination of which will be
final and conclusive.
Id. at 622-23 (alteration in original) (internal quotation marks omitted) (quoting To-Ro Trade
Shows v. Collins, 144 Wash. 2d 403, 411, 27 P.3d 1149 (2001)). The four justiciability factors ‘“must
coalesce’” to ensure that a court does not enter the prohibited area of advisory opinions. Id. at 623
(quoting Diversified Indus. Dev. Corp. v. Ripley, 82 Wash. 2d 811, 815, 514 P.2d 137 (1973)).
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No. 52253-5-II
DRS asks us to contemplate a hypothetical situation where a different class member who
is also enrolled in the judicial benefit multiplier program challenges the common fund attorney
fees as applied to that class member. Providing the requested guidance would require us to
speculate on scenarios that do not exist in the present case. Were we to issue such an opinion, it
would be advisory. Any future dispute that arises from the Dolan litigation must be decided on
the basis of the evidence presented in that forum.
Because DRS requests guidance on a hypothetical future dispute as opposed to an actual
present existing dispute or the seeds of a mature one, we refrain from addressing DRS’ request and
hold that its claim is not justiciable.
V. SANCTIONS
The class argues that we should impose monetary sanctions under RAP 18.9 against DRS
because DRS’ appeal is frivolous. We disagree and hold that DRS’ appeal is not frivolous.10
An appellate court may award fees for a frivolous appeal. RAP 18.9(a). “[A]n appeal is
frivolous if it raises no debatable issues on which reasonable minds might differ and it is so totally
devoid of merit that no reasonable possibility of reversal exists.” Protect the Peninsula’s Future
v. City of Port Angeles, 175 Wash. App. 201, 220, 304 P.3d 914 (2013). We consider the civil
appellant’s right to appeal an adverse judgment, and we resolve any doubts about whether an
appeal is frivolous in the appellant’s favor. Id.
10
In support of its argument that DRS’ appeal is frivolous, the class attached a letter containing
communications between the parties. DRS’ motion to strike this document is granted. We see no
proper purpose for filing such document nor does the document have any relevance to resolving
the matters presented in this appeal. See Heckard v. Murray, 5 Wash. App. 2d 586, 600, 428 P.3d
141 (2018), rev. denied, 192 Wash. 2d 1013 (2019).
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No. 52253-5-II
DRS’ appeal is not frivolous. DRS raises a debatable issue of whether the superior court
properly exempted Inveen from assessment of common fund attorney fees under both the common
fund doctrine and CR 23, and DRS provided factual and legal support for its claims. For these
reasons, we deny the class’s request to impose sanctions under RAP 18.9(a).
CONCLUSION
We hold that the invited error doctrine does not apply to the court’s ruling regarding Inveen,
the subject of this appeal. We hold that the superior court did not abuse its discretion when
ordering DRS to not reduce Inveen’s pension due to common fund attorney fees assessed to her as
a class member of the Dolan litigation. We do not provide DRS with guidance regarding future
challenges to the common fund attorney fees and decline to impose monetary sanctions under RAP
18.9 against DRS because DRS’ appeal is not frivolous. Accordingly, we affirm.
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.
CRUSER, J.
We concur:
WORSWICK, J.
LEE, C.J.
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