Hai En Mai & Julianne Stutzman-mai, Apps V. Phillips Law Firm ( 2023 )

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
HAI EN MAI and JULIANNE No. 84922-1-I
STUTZMAN-MAI, husband and wife,
and the marital community composed DIVISION ONE
thereof,
Appellants,
v.
PHILLIPS LAW FIRM, PLLC, a UNPUBLISHED OPINION
Washington Limited Liability Company;
RALPH GLENN PHILLIPS and
KATHRYN MOORE PHILLIPS,
husband and wife, and the marital
community composed thereof,
Respondents.
BOWMAN, J. — Hai En Mai retained Philips Law Firm PLLC (PLF) to
recover personal injury and property damages after a car accident. Because of
PLF’s negligence, an arbitrator dismissed his lawsuit and the trial court denied a
request for trial de novo. Hai En Mai and his wife, Julianne Stutzman-Mai, then
sued PLF for professional negligence, breach of fiduciary duty, breach of
contract, and violation of the Consumer Protection Act (CPA), chapter 19.86
RCW. PLF admitted its conduct was negligent but denied the remaining claims.
It moved to dismiss the CPA claim under CR 12(c) for failure to show that its
alleged deceptive acts caused injury to the Mais’ business or property. The trial
court granted the motion, and the Mais appeal. We affirm.
No. 84922-1-I/2
FACTS
On October 4, 2017, Hai En Mai was driving home from work when
another driver failed to yield and their cars collided. The police cited the other
driver for causing the collision. Hai En Mai suffered injuries to his person and his
car. On May 7, 2018, Hai En Mai retained PLF to sue the other driver and
recover damages.
In September 2020, almost three years after the collision, PLF sued the
other driver in Snohomish County Superior Court on behalf of Hai En Mai. PLF
did not bring a spousal consortium claim on behalf of Stutzman-Mai, initiate
discovery, respond to the defendant’s requests for admission (RFAs), or
communicate settlement offers to the Mais. According to Hai En Mai, the first
time he met a PLF attorney was an hour before his deposition in August 2021.
In November 2021, the personal injury suit went to arbitration. The
arbitrator dismissed the lawsuit because PLF did not respond to two RFPs that
established “liability for the collision on the part of [Hai En Mai].” Then, in
December 2021, PLF requested a trial de novo in superior court. But PLF filed
the request late and did not have Hai En Mai sign the request as required under
RCW 7.06.050(1).1 So, the court dismissed the request and ordered Hai En Mai
to pay the other driver $1,248 for her attorney fees. On August 10, 2022, the
Mais sued PLF, PLF owner Ralph Phillips, and Phillips’ wife Kathryn Phillips
1
Under RCW 7.06.050(1), within 20 days after the arbitrator files its decision with
the superior court, “any aggrieved party may file with the clerk a written notice of appeal
and request for a trial de novo in the superior court on all issues of law and fact. The
notice must be signed by the party.”
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(collectively PLF), asserting claims for professional negligence, breach of
fiduciary duty, breach of contract, and violation of the CPA.
As to their CPA claim, the Mais’ alleged that they hired PLF because it
held itself out as specializing in representing plaintiffs in personal injury cases,
but the firm’s advertising about its success in such cases is deceptive. The Mais
claimed PLF promotes litigation outcomes on its website for clients that PLF did
not actually handle. And the website falsely claims “ ‘$1 Billion+ Damages
Awarded’ and ‘10,000+ Victims Helped.’ ” The Mais alleged that “[t]he acts and
omissions of [PLF] constitute unfair and deceptive acts in the conduct of trade or
commerce, affecting the public interest, and violate the [CPA], as a proximate
cause of which Hai En Mai has been damaged.” They sought money damages,
treble damages, prejudgment interest, attorney fees and costs, and an injunction
“prohibiting [PLF] from engaging in unfair or deceptive advertising.”
In its answer to the complaint, PLF admitted it negligently “fell below the
standard of care” by not responding to RFAs or properly requesting a trial de
novo, but it denied it owed any duty to Stutzman-Mai. And it denied the other
claims. So, in October 2022, PLF moved under CR 12(c) to dismiss the Mais’
CPA and breach of contract claims. PLF argued that the Mais could not show an
injury to their business or property as required under the CPA and that it did not
breach its contract with Hai En Mai. The trial court granted the motion to dismiss
the CPA claim but denied the motion to dismiss the breach of contract claim.
The Mais appeal.
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ANALYSIS
The Mais argue that the trial court erred by granting PLF’s CR 12(c)
motion dismissing their CPA claim. We disagree.
CR 12(c) provides, “After the pleadings are closed but within such time as
not to delay the trial, any party may move for judgment on the pleadings.” We
treat a CR 12(c) motion for judgment on the pleadings “ ‘identically to a CR
12(b)(6) motion’ ” to dismiss2 and review the trial court’s decision de novo.
Wash. Trucking Ass’ns v. Emp’t Sec. Dep’t, 188 Wn.2d 198, 207, 393 P.3d 761(2017) (quoting P.E. Sys., LLC v. CPI Corp., 176 Wn.2d 198, 203, 289 P.3d 638(2012)). “Dismissal under either subsection is ‘appropriate only when it appears
beyond doubt’ that the plaintiff cannot prove any set of facts that ‘would justify
recovery.’ ” Id. (quoting San Juan County v. No New Gas Tax, 160 Wn.2d 141,
164, 157 P.3d 831 (2007)). To this end, “[a]ll facts alleged in the complaint are
taken as true, and we may consider hypothetical facts supporting the plaintiff’s
claim.” FutureSelect Portfolio Mgmt., Inc. v. Tremont Grp. Holdings, Inc., 180
Wn.2d 954, 962-63, 331 P.3d 29 (2014).
The CPA prohibits “[u]nfair methods of competition and unfair or deceptive
acts or practices in the conduct of any trade or commerce.” RCW 19.86.020. To
succeed on a CPA claim, a plaintiff must establish (1) an unfair or deceptive act
(2) in trade or commerce (3) that affects the public interest, (4) injury to their
business or property, and (5) a causal link between the unfair or deceptive act
2
CR 12(b)(6) allows a defendant to move to dismiss a claim when the plaintiff
fails to state a claim on which a court can grant relief.
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and their injury. Trujillo v. Nw. Tr. Servs., Inc., 183 Wn.2d 820, 834-35, 355 P.3d
1100 (2015).
We construe injury to property or business broadly. Keyes v. Bollinger, 31
Wn. App. 286, 296, 640 P.2d 1077 (1982). The plaintiff does not have to prove
monetary damages, and nonquantifiable injuries will suffice. Nordstrom, Inc. v.
Tampourlos, 107 Wn.2d 735, 740, 733 P.2d 208 (1987); see also Folweiler
Chiropractic, PS v. Am. Fam. Ins. Co., 5 Wn. App. 2d 829, 839, 429 P.3d 813(2018) (mere delay in use of property or receipt of payment is an injury under the
CPA). A plaintiff shows injury by proving their “ ‘property interest or money is
diminished because of the unlawful conduct even if the expenses caused by the
statutory violation are minimal.’ ” Panag v. Farmers Ins. Co. of Wash., 166
Wn.2d 27, 57, 204 P.3d 885 (2009) (quoting Mason v. Mortg. Am., Inc., 114
Wn.2d 842, 854, 792 P.2d 142 (1990)). But personal injury damages are not
recoverable under the CPA. Id.Citing Ambach v. French, 167 Wn.2d 167, 179 n.6, 216 P.3d 405 (2009),
PLF argues that the Mais’ CPA claim is “a ‘backdoor’ attempt to recover their
personal injury damages through the more punitive CPA.” We disagree.
In Ambach, the plaintiff contracted a staph infection following shoulder
surgery and sued the surgeon for professional negligence resulting in physical
injury and violation of the CPA. Id. at 170. The plaintiff argued her CPA injury
was “ ‘part and parcel of a personal injury claim.’ ” Id. at 174. The trial court
dismissed the CPA claim because the plaintiff alleged personal injury, not injury
to her “ ‘business or property.’ ” Id. at 170-71. Our Supreme Court agreed with
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the trial court, reasoning that where a plaintiff is both physically and economically
injured by one act, the economic damages flowing from the physical injury are
not an “injury to ‘business or property.’ ” Id. at 174. The court noted that the
legislature did not design the CPA “to give personal injury claimants . . . backdoor
access to compensation they were denied in their personal injury suits.” Id. at
179 n.6.
The Mais’ claim is different. The Mais do not allege that PLF caused them
personal injury. Instead, they sued PLF for professional negligence in the
mismanagement of their personal injury claim and for violating the CPA by
engaging in deceptive advertising. So, there is no danger the Mais may use their
CPA claim as backdoor access to compensation for Hai En Mai’s personal
injuries. Even so, to survive the motion for judgment on the pleadings, the Mais
must allege facts that show PLF’s deceptive advertising caused injury to their
business or property.
The Mais’ argue that PLF’s deceptive conduct caused them five kinds of
economic injury recoverable under the CPA. They claim (1) PLF denied them
the prompt use of Hai En Mai’s personal injury award, (2) Hai En Mai suffered an
adverse judgment awarding the other driver attorney fees, (3) he incurred time
away from work for a “doomed” arbitration, (4) treble damages and attorney fees,
and (5) an injunction preventing PLF from engaging in deceptive advertising. We
address each alleged injury in turn.
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First, the Mais’ argue that PLF deprived them of a prompt and successful
financial recovery in their personal injury lawsuit. Quoting Folweiler and citing
Sorrel, they argue that “ ‘a mere delay in use of property or receiving payment’
also constitutes ‘an injury under the CPA.’ ” Folweiler, 5 Wn. App. 2d. at 839;
Sorrel v. Eagle Healthcare, Inc., 110 Wn. App. 290, 298, 38 P.3d 1024 (2002).
In Folweiler, chiropractic medical providers filed a class action complaint
alleging that an insurer’s deceptive practices violated the CPA. 5 Wn. App. 2d at
833-34. The class members argued they “ ‘sustained injury to their business
caused by [the insurer]’s practice in the form of reduced payments, delay in
payment of reasonable medical expenses, out of pocket administrative costs or
added expenses, [or] business interruption or inconvenience.’ ” Id. at 840.3 We
held that a delay in reimbursement for billings covered by an insurer is a
cognizable CPA injury. Id. at 839.
In Sorrel, the widower of a nursing home resident sued the nursing home
for its failure to refund his prepayment within 30 days as required under RCW
70.129.150(1). 110 Wn. App. at 293-94. We noted that the widower established
“injury” under his CPA claim by showing that the defendant’s unfair or deceptive
act or practice deprived him of the use of his property. Id. at 298-99.
Unlike the plaintiffs in Folweiler and Sorrel, the Mais do not allege that
PLF’s deceptive act or practice caused a delay in reimbursement for services
they provided or refund of payments they made. Instead, the Mais allege PLF’s
conduct caused a delay in the recovery of Hai En Mai’s personal injury damages.
3
Second alteration in original.
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But Hai En Mai’s personal injury recovery is an expectation. And the Mais cite no
authority that the inability to use property they expect to acquire is an injury under
the CPA. When a party cites no authority in support of a proposition, we need
not search out authorities and may assume that the party, after diligent search,
found none. City of Seattle v. Levesque, 12 Wn. App. 2d 687, 697, 460 P.3d 205(2020).
Second, the Mais argue that PLF’s failure to properly request a trial de
novo resulted in “a judgment of $1,248 awarded against [Hai En Mai] in favor of
the driver” who caused his injuries. Assuming that an adverse judgment
amounts to injury to business or property, the Mais’ argument fails because the
court did not enter a judgment. Instead, when the trial court denied Hai En Mai’s
request for a trial de novo, it issued an order awarding the prevailing party
attorney fees. PLF then paid the attorney fees on Hai En Mai’s behalf. So, the
order was not reduced to a judgment against Hai En Mai, and the Mais suffered
no economic injury.
Third, the Mais argue that PLF’s deceptive acts “required [Hai En Mai] to
dedicate time away from work to an arbitration that was doomed.” Indeed, a
plaintiff may recover damages when a deceptive act causes the plaintiff to take
time away from their business. Panag, 166 Wn.2d at 57 (citing Sign-O-Lite
Signs, Inc. v. DeLaurenti Florists, Inc., 64 Wn. App. 553, 564, 825 P.2d 714(1992)). But PLF’s deceptive acts did not cause Hai En Mai to attend arbitration.
Instead, his personal injury claim was subject to mandatory arbitration under King
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County Local Civil Arbitration Rule (LCAR) 2.1(a).4 As a result, the Mais fail to
show that this injury flows from PLF’s deceptive acts.
Fourth, the Mais argue the CPA entitles them to treble damages and
attorney fees that they are otherwise unable to recover. This is true. See RCW
19.86.090. But a plaintiff must establish they suffered damages before they can
treble them. So, a CPA plaintiff may not treble damages unless they can show
injury to their business or property. Id.; Mason, 114 Wn.2d at 855; St. Paul Fire
& Marine Ins. Co. v. Updegrave, 33 Wn. App. 653, 660, 656 P.2d 1130 (1983).
Likewise, the trial court awards attorney fees to only the prevailing party under
the CPA. Id.; see Sign-O-Lite, 64 Wn. App. at 566. And to prevail on a CPA
claim, the plaintiff must show injury to their “business or property.” Id. The Mais
fail to do so.
Finally, the Mais argue that under the CPA, they are entitled to an
injunction preventing PLF from similar conduct. But, like treble damages and
attorney fees, the CPA does not authorize injunctive relief for a person who fails
to show injury to their business or property. Girard v. Myers, 39 Wn. App 577,
589, 694 P.2d 678 (1985); see RCW 19.86.090.
4
Under LCAR 2.1(a), a claim “filed after September 1, 2019 is subject to civil
arbitration if it does not exceed one hundred thousand dollars ($100,000), exclusive of
attorney fees, interest and costs.”
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The trial court did not err by dismissing the Mais’ CPA claim under CR
12(c) because they alleged no set of facts that show PLF’s deceptive conduct
injured their business or property. We affirm.
WE CONCUR:
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