Neil Rush v. William I. Blackburn

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
NEIL RUSH, a single person,
DIVISION ONE
Appellant,
No. 72424-0-1
v.
WILLIAM I. BLACKBURN and JANE
DOE BLACKBURN, and the marital
community composed thereof, dba, PUBLISHED OPINION
TOP NOTCH TOWING, a Washington
company,
Respondents,
STEVEN JABLINSKE and JANE DOE
JABLINSKE, and the marital community
composed thereof, and HARTFORD
UNDERWRITERS INSURANCE
COMPANY, a foreign insurance
company,
Defendants. FILED: November 2, 2015
Dwyer, J. — Neil Rush's vehicle was towed and impounded by William
Blackburn, dba Top Notch Towing. Rush prevailed at a statutory impound
hearing contesting the impoundment. Before the district court rendered its
decision in the impoundment matter, however, Blackburn sold Rush's vehicle at
auction. Rush then filed a lawsuit against Blackburn in the superior court,
asserting claims for conversion and violation of the Consumer Protection Act,
No. 72424-0-1/2
chapter 19.86 RCW (CPA). After Blackburn did not appear, a default judgment
was entered against him. More than a year later, after Rush had filed
supplemental proceedings to enforce the default judgment, Blackburn moved the
superior court to vacate the default judgment against him and for summary
judgment on the CPA claim. The court granted both motions. We now affirm, in
part, and reverse, in part.
I
A. The tow, the impound, and the auction
On Saturday, August 27, 2011, Rush's 1983 Mercedes Benz was illegally
towed, at the request of Steven Jablinske, and taken to Top Notch Towing's
impound lot. At the time the impound was requested, the vehicle was parked,
with permission, on a private property easement.
On Monday, August 29, Top Notch mailed a notice of impound to Rush's
Mountlake Terrace residence. Approximately four days after the vehicle was
impounded, Rush contacted Top Notch and was told that he would have to pay
$700 to obtain the release of his vehicle. Rush then contacted an attorney to
assist him in recovering the vehicle. On September 2, Rush's attorney faxed a
letter of representation to Top Notch asking that all communications be made
through the law firm. On September 7, Rush received, and signed for, a certified
letter and notice of vehicle impound from Top Notch.
On September 9, Rush hand delivered an impound hearing request form
to Nicole Blackburn, Top Notch's manager and the daughter of Top Notch's
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No. 72424-0-1/3
owner, William Blackburn.1 Nicole Blackburn signed the form and made a copy
for Top Notch's files. That same afternoon, Rush took the executed hearing
request form to the Everett District Court, paid a $73 filing fee, and filed the
impound hearing request with the court clerk.
On September 14, the clerk of the Everett District Court mailed, via regular
mail, notices of civil hearing to Top Notch, Jablinske, and Rush.2
On October 11, Blackburn sold Rush's vehicle (and 11 other impounded
vehicles) to himself at auction for $1 each. Although Blackburn had Rush's (and
Rush's attorney's) contact information for more than a month prior to the sale, he
did not notify either of them that an auction was going to take place.
On November 3, Rush, his attorney, and Jablinske appeared and
presented evidence at an impound hearing in the Everett District Court.
Blackburn failed to appear at the hearing. On November 15, the Honorable Tam
T. Bui, Everett District Court judge, issued a memorandum decision finding that
Jablinske's private impoundment of Rush's Mercedes violated RCW 46.55.120.
The court ruled:
Under RCW 46.55.120(3)(e), Mr. Rush is entitled to the filing
fee of $73.00, and reasonable damages for loss of the use of his
vehicle from 8/27/2011-10/11/2011, at $25 per day, in the amount
of $1,150.00.
Pursuant to the district court's ruling, Jablinske was ordered to pay Top
Notch the impoundment and storage charges incurred and Rush was authorized
1 Hereinafter, unless the context dictates a need for greater specificity, the names
Blackburn and Top Notch will be used interchangeably.
2"The court, within five days after the request for a hearing, shall notify the registered tow
truck operator, the person requesting the hearing if not the owner, the registered and legal
owners of the vehicle . . . and the person or agency authorizing the impound in writing of the
hearing date and time." RCW 46.55.120(3)(a).
No. 72424-0-1/4
to redeem his vehicle from Top Notch without the payment of any costs. Shortly
after this order was entered, Rush and his attorney learned for the first time that
Blackburn had already sold at auction Rush's vehicle.
B. The instant lawsuit—the defaultjudgment against Blackburn
On December 16, Rush filed a lawsuit in King County Superior Court
against his auto insurance company, Hartford Underwriters Insurance Company
(Hartford), Jablinske, and Top Notch Towing. Rush alleged, inter alia, that Top
Notch had wrongfully sold his vehicle.
On December 27, Rush filed his first amended complaint,3 again alleging,
inter alia, that Top Notch had wrongfully sold his vehicle. Copies of this
complaint and a summons were served upon Blackburn on January 4, 2012.
Blackburn was required to answer Rush's complaint by January 25, but, as he
had done with the impound hearing notice, Blackburn simply ignored the
summons and failed to appear, plead, or otherwise defend the lawsuit, even after
proper service.
On April 27, 2012, Rush filed his second amended complaint. Therein,
Rush once again alleged that Blackburn had wrongfully sold Rush's vehicle. For
the first time, Rush also asserted that the allegedly wrongful sale violated the
CPA.
This complaint alleged, in pertinent part:
5.3 Defendant Top Notch wrongfully sold Rush's 1983
Mercedes Benz automobile at public auction prior to the issuance
3This complaint named "William I. Blackburn and Jane Doe Blackburn, and the marital
community composed thereof, dba, Top Notch Towing" as a defendant, rather than simply Top
Notch Towing.
No. 72424-0-1/5
of Judge Bui's Impoundment Hearing Order. At the time of the
auction, Top Notch had notice of the pending hearing.
5.5 Top Notch's sale of the automobile when the hearing
was pending was an unfair and deceptive act or trade practice,
constituting a violation of the Consumer Protection Act.
On March 26, a default judgment was entered against Jablinske.
On May 6, copies of Rush's second amended complaint and summons
were served upon Blackburn. Blackburn was required to answer this complaint
by May 26, but, again, Blackburn simply ignored the summons and failed to
appear, plead, or otherwise defend the lawsuit, even after proper service.
On July 20, 2012, a default judgment was entered against Blackburn. On
July 25, 2013 Rush voluntarily dismissed his claims against Hartford.
C. Rush's defaultjudgment against Top Notch vacated
On August 20, 2013, Rush's attorneys sent a letterto Blackburn,
enclosing a copy ofthe default judgment and demanding payment. Blackburn
simply ignored the letter. Thereafter, Rush commenced enforcement ofthe
judgment, bringing supplemental proceedings in the Snohomish County Superior
Court. It was not until October 7, after Blackburn had been served with
supplemental proceeding pleadings, that he made any response in the King
County case.
On October 29, Blackburn brought a motion to vacate the default
judgment, which was heard on November 13 by the Honorable Theresa Doyle,
the same judge who had entered the default judgment. The trial court vacated
the default judgment against Blackburn, finding:
No. 72424-0-1/6
1. There is substantial evidence to support at least a prima
facie defense to Plaintiff's claims for conversion and a Consumer
Protection Act violation;
2. Defendant Blackburn's failure to timely appear in the
action, and answer the Complaint, was due to mistake and
excusable neglect arising from Plaintiffs insurer's agreement to
compensate Plaintiff for the loss of his vehicle;
3. Defendant Blackburn acted with due diligence after
learning about the entry of the default judgment; and
4. No substantial hardship will result to Plaintiff by having to
litigate his claims on the merits.
The Court further finds that there are existing sufficient
extraordinary circumstances to warrant relief under CR 60(b)(ll).
D. Rush's CPA claim against Blackburn subsequently dismissed
Thereafter, Blackburn moved for partial summary judgment, seeking
dismissal of Rush's CPA claim. He asserted that summary judgment was proper
because Rush did not establish (1) that Blackburn had engaged in an unfair or
deceptive act or practice, or (2) that the alleged act or practice had a public
interest impact.
On June 20, 2014, the trial court granted Blackburn's motion for partial
summary judgment. The court, focusing on the public interest element,
explained its ruling thusly:
I don't find that the public interest element of the Consumer
Protection Act claim is made, taking all of the evidence in the light
most favorable to the nonmoving party. I don't find that this is a
situation that's likely to be repeated or has been repeated. Mr.
Blackburn's actions in selling the vehicles to himself, as cited by Mr.
Rush's attorney Mr. Watkins, that's not illegal. The issue is selling
the vehicle before the impound hearing occurred in this case, and I
find that it's very unlikely to occur again. Therefore, the public
interest impact element of a CPA claim is not met.
This appeal followed.
No. 72424-0-1/7
Rush first contends that the trial court erred by vacating his default
judgment against Blackburn. This is so, he asserts, because an order pursuant
to CR 60(b)(1) was time barred and the trial court did not make findings sufficient
to support its order vacating the judgment under CR 60(b)(11). We disagree.
We review a trial court's ruling on a motion to vacate a default judgment
for an abuse of discretion. Little v. King, 160 Wash. 2d 696, 702, 161 P.3d 345
(2007). A trial court abuses its discretion only when its decision is manifestly
unreasonable or is based on untenable grounds or untenable reasons. Luckett v.
Boeing Co., 98 Wash. App. 307, 309-10, 989 P.2d 1144 (1999) (quoting Lane v.
Brown & Haley, 81 Wash. App. 102, 105, 912 P.2d 1040 (1996)). Unchallenged
findings of fact are verities on appeal. Cowiche Canyon Conservancy v. Boslev,
118 Wash. 2d 801, 819, 828 P.2d 549 (1992). Unchallenged conclusions of law
become the law of the case. Kino Aircraft Sales. Inc. v. Lane, 68 Wash. App. 706,
716, 846 P.2d 550 (1993).
Default judgments are generally disfavored in Washington. "We preferto
give parties their day in court and have controversies determined on their merits."
Morin v. Burris. 160 Wash. 2d 745, 754, 161 P.3d 956 (2007). "But we also value
an organized, responsive, and responsible judicial system where litigants
acknowledge the jurisdiction of the court to decide their cases and comply with
court rules." Little. 160 Wash. 2d at 703. "Our primary concern in reviewing a trial
court's decision on a motion to vacate is whether that decision is just and
equitable." TMT Bear Creek Shopping Ctr.. Inc. v. PETCO Animal Supplies. Inc..
No. 72424-0-1/8
140 Wash. App. 191, 200, 165 P.3d 1271 (2007). '"What is just and proper must be
determined by the facts of each case, not by a hard and fast rule applicable to all
situations regardless of the outcome.'" Griggs v. Averbeck Realty. Inc.. 92
Wash. 2d 576, 582, 599 P.2d 1289 (1979) (quoting Widucus v. Sw. Elec. Coop..
Inc.. 26 III. App. 2d 102, 109, 167 N.E.2d 799 (1960)). "Abuse of discretion is
less likely to be found if the default judgment is set aside." Griggs. 92 Wash. 2d at
582.
A default judgment may be set aside in accordance with CR 60(b). CR
60(b)(1) states, in relevant part:
(b) Mistakes; Inadvertence; Excusable Neglect; Newly
Discovered Evidence; Fraud; etc. On motion and upon such
terms as are just, the court may relieve a party or his legal
representative from a final judgment, order, or proceeding for the
following reasons:
(1) Mistakes, inadvertence, surprise, excusable neglect or
irregularity in obtaining a judgment or order;
The motion shall be made within a reasonable time and for
reasons (1), (2) or (3) not more than 1 year after the judgment,
order, or proceeding was entered or taken.
(Emphasis added.)
The key issue herein is whether Blackburn moved to vacate the default
judgment more than one year after a final judgment was entered.
A
Rush contends that the default judgment against Blackburn had been final
for more than a year when Blackburn moved for its vacation.4 He is incorrect.
4Rush's appellate argument is that, because the default judgment was entered on July
20, 2012 and Blackburn's motion to vacate was filed on October 29, 2013, more than a year had
elapsed, rendering CR 60(b)(1) inapplicable.
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No. 72424-0-1/9
CR 54(b) governs when a judgment upon multiple claims or involving
multiple parties becomes final. It provides, in pertinent part:
When more than one claim for relief is presented in an action ... or
when multiple parties are involved, the court may direct the entry of
a final judgment as to one or more but fewer than all of the claims
or parties only upon an express determination in the judgment,
supported by written findings, that there is no just reason for delay
and upon an express direction for the entry ofjudgment. ... In the
absence of such findings, determination and direction, any order or
other form of decision, however designated, which adjudicates
fewer than all the claims or the rights and liabilities of fewer than all
the parties shall not terminate the action as to any of the claims or
parties.
(Emphasis added.)
The defaultjudgment against Blackburn was entered on July 20, 2012. At
the time, there were claims remaining against Hartford.
The Blackburn default judgment provided, in pertinent part:
THIS MATTER having come on regularly before the Court
on plaintiff's Motion for Entry of Default Judgment against
defendants William I. Blackburn and Jane Doe Blacburn (sic), dba,
Top Notch Towing ("Top Notch"); the Motion for Default having
been heard on July 20, 2012, an Order of Default having been
entered on July 20, 2012, and NOW, THEREFORE, it is hereby
ORDERED that judgment be entered in favor of plaintiff Neil
Rush and against defendant Top Notch.
It did not contain either a finding that there was no just reason for delay or an
express direction for the entry of judgment. Therefore, pursuant to CR 54(b),
when entered, the default judgment against Blackburn was not a final judgment.
The order dismissing the remaining claims against Hartford, the remaining
party, was entered on July 26, 2013. The default judgment against Blackburn
became final on that date. Blackburn moved to vacate the default judgment
against him on October29, 2013. This was within a year of the default judgment
No. 72424-0-1/10
becoming a final judgment. Therefore, the trial court was not time barred from
vacating the default judgment pursuant to CR 60(b)(1).
B
The party seeking to vacate a default judgment pursuant to CR 60(b)(1)
must establish:
(1) That there is substantial evidence extant to support, at least
prima facie, a defense to the claim asserted by the opposing
party;'51 (2) that the moving party's failure to timely appear in the
action, and answer the opponent's claim, was occasioned by
mistake, inadvertence, surprise or excusable neglect; (3) that the
moving party acted with due diligence after notice of entry of the
default judgment; and (4) that no substantial hardship will result to
the opposing party.
White v. Holm. 73 Wash. 2d 348, 352, 438 P.2d 581 (1968).
Herein, the trial court "considered the factors justifying vacation of
judgment as set forth in White v. Holm. 73 Wash. 2d 348, 352, 438 P.2d 581
(1968)," and made the following findings of fact supporting its order vacating
Rush's default judgment against Blackburn:
1. There is substantial evidence to support at least a
prima facie defense to [Rushj's claims for conversion and a
Consumer Protection Act violation;
2. Defendant Blackburn's failure to timely appear in the
action, and answer the Complaint, was due to mistake and
excusable neglect arising from Plaintiffs insurer's agreement to
compensate Plaintiff for the loss of his vehicle;
3. Defendant Blackburn acted with due diligence after
learning about the entry of the default judgment; and
4. No substantial hardship will result to Plaintiff by
having to litigate his claims on the merits.
Because Rush does not challenge any of these findings, they are verities on
5 CR 60 now includes the same requirement. CR 60(e)(1) ("[l]f the moving party be a
defendant, the facts constituting a defense to the action or proceeding" must be set forth in the
motion to vacate.).
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No. 72424-0-1/11
appeal. Humphrey Indus.. Ltd. v. Clav St. Assocs.. LLC. 176 Wash. 2d 662, 675,
295P.3d231 (2013).
The trial court made the findings necessary to authorize vacation of a
judgment based on mistake or excusable neglect, and those findings are verities
on appeal. Therefore, the trial court did not abuse its discretion in vacating the
default judgment against Blackburn.
Ill
Rush next contends that the trial court improperly granted summary
judgment in Blackburn's favor on Rush's CPA claim. This is so, he asserts,
because there is an issue of material fact regarding whether Blackburn engaged
in an unfair or deceptive practice that affected the public interest. We agree.
We review de novo a trial court's order granting summary judgment.
Estate of Haselwood v. Bremerton Ice Arena. Inc., 166 Wash. 2d 489, 497, 210
P.3d 308 (2009) (citing Biggers v. Citv of Bainbridoe Island. 162 Wash. 2d 683, 693,
169 P.3d 14 (2007)). Summary judgment is appropriate "if the pleadings,
depositions, answers to interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any material fact and
that the moving party is entitled to a judgment as a matter of law." CR 56(c);
Owen v. Burlington N. &Santa Fe R.R. Co.. 153 Wash. 2d 780, 787, 108 P.3d 1220
(2005). In determining whether a genuine issue of material fact exists, we view
all facts and draw all reasonable inferences in favor of the nonmoving party.
Owen. 153 Wash. 2d at 787 (citing Ruff v. King County. 125 Wash. 2d 697, 703, 887
P.2d 886 (1995)).
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No. 72424-0-1/12
The CPA declares unlawful "unfair or deceptive acts or practices in the
conduct of any trade or commerce." RCW 19.86.020. The statute authorizes a
private cause of action, stating: "'[a]ny person who is injured in his or her
business or property' by a violation of the act may bring a civil suit for injunctive
relief, damages, attorney fees and costs, and treble damages." Panag v.
Farmers Ins. Co. of Wash.. 166 Wash. 2d 27, 37, 204 P.3d 885 (2009) (alteration in
original) (quoting RCW 19.86.090). "To prevail in a private CPA claim, the
plaintiff must prove (1) an unfair or deceptive act or practice, (2) occurring in
trade or commerce, (3) affecting the public interest, (4) injury to a person's
business or property, and (5) causation. Panag. 166 Wash. 2d at 37 (citing
Hangman Ridge Stables. Inc. v. Safeco Title Ins. Co.. 105 Wash. 2d 778, 784, 719
P.2d 531 (1986)). "Failure to satisfy even one of the elements is fatal to a CPA
claim." Sorrel v. Eagle Healthcare. Inc.. 110 Wash. App. 290, 298, 38 P.3d 1024
(2002) (citing Hangman Ridge. 105 Wash. 2d at 793).
This appeal puts elements one and three at issue.
A
In his motion for partial summary judgment, Blackburn asserted that, as a
matter of law, Rush could not establish that Blackburn had engaged in an unfair
or deceptive act or practice.6 We disagree.
A defendant's act or practice is per se unfair or deceptive ifthe plaintiff
shows that it violates a statute declaring the conduct to be an unfair or deceptive
act or practice in trade or commerce. Hangman Ridge. 105 Wash. 2d at 786;
6The trial court's oral ruling granting summary judgment did not address this contention.
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No. 72424-0-1/13
accord Klem v. Wash. Mut. Bank. 176 Wash. 2d 771, 785-87, 295 P.3d 1179
(2013). If a defendant's act or practice is not per se unfair or deceptive, the
plaintiff must show the conduct is "unfair" or "deceptive" under a case-specific
analysis of those terms. Hangman Ridge. 105 Wash. 2d at 786; accord Klem. 176
Wash. 2d at 785-87. "Because the act does not define 'unfair' or 'deceptive,' this
court has allowed the definitions to evolve through a 'gradual process of judicial
inclusion and exclusion.'" Saunders v. Lloyd's of London. 113 Wash. 2d 330, 344,
779 P.2d 249 (1989) (quoting State v. Reader's Digest Ass'n. 81 Wash. 2d 259,
275, 501 P.2d 290 (1972), modified in Hangman Ridge. 105 Wash. 2d at 786)).
The interpretative case law has established guiding criteria regarding what
makes an act or practice "unfair." For example, in Maonev v. Lincoln Mut. Sav.
Bank. 34 Wash. App. 45, 659 P.2d 537 (1983), the courtwas guided by the
following three criteria, which were utilized by the Federal Trade Commission to
determine whether a practice or act is "unfair":
"(1) whether the practice, without necessarily having been
previously considered unlawful, offends public policy as it has been
established by statutes, the common law or otherwise—whether, in
other words, it is within at least the penumbra of some common-
law, statutory, or other established concept of unfairness;171 (2)
whether it is immoral, unethical, oppressive, or unscrupulous; (3)
whether it causes substantial injury to consumers (or competitors or
other businessmen)."
7Indeed, our Supreme Court has recently decided a numberof cases wherein it
determined that acts or practices violating applicable statutes constituted unfair or deceptive
practices, even though the relevant statutesthemselves did not contain clauses declaring
violations thereofto constitute per se violations. See, e.g., Lyons v. U.S. Bank Nat'l Ass'n, 181
Wash. 2d 775, 786 n.5, 336 P.3d 1142 (2014) (regarding violations of the deeds of trust act, chapter
61.24 RCW (DTA)); Klem, 176 Wash. 2d at 783-84 (regarding DTA violation and violation ofstatute
governing notaries public); see also Panag. 166 Wash. 2d at 53 ("While neither the [federal]
F[air ]D[ebt ]C[ollection ]P[ractices ]A[ct] nor the[state] Collection ]A[gency ]A[ct] is directly
applicable, these acts are nevertheless important to our analysis. Consumer debt collection isa
highly regulated field. . . . reflecting the public policy significance ofthis industry.")
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No. 72424-0-1/14
Magnev. 34 Wash. App. at 57 (quoting Fed. Trade Comm'n v. Sperry & Hutchinson
Co.. 405 U.S. 233, 244 n.5, 92 S. Ct. 898, 31 L. Ed. 2d 170 (1972));8 accord
Klem. 176 Wash. 2d at 786 (citing this portion of Magnev with approval); Blake v.
Fed. Way Cycle Ctr.. 40 Wash. App. 302, 310, 698 P.2d 578 (1985) (relying on the
same language from Sperry). Current federal law suggests that a "practice is
unfair [if it] causes or is likely to cause substantial injury to consumers which is
not reasonably avoidable by consumers themselves and not outweighed by
countervailing benefits." Federal Trade Commission Act of 1914, 15 U.S.C. §
45(n) (quoted in Klem, 176 Wash. 2d at 787).9
The CPA also does not define the term "deceptive," but our Supreme
Court has stated that "[deception exists 'if there is a representation, omission or
practice that is likely to mislead' a reasonable consumer." Panag. 166 Wash. 2d at
50 (quoting Sw. Sunsites. Inc. v. Fed. Trade Comm'n. 785 F.2d 1431, 1435 (9th
Cir. 1986). To prove that a practice is deceptive, neither intent to deceive nor
actual deception is required. Panag. 166 Wash. 2d at 47, 63. The question is
whether the conduct has the capacity to deceive a substantial portion of the
public. Panag. 166Wn.2d at 47. "[A]n act or practice can be unfair without being
deceptive." Klem. 176 Wash. 2d at 787.
"Whether undisputed conduct is unfair or deceptive is a question of law,
not a question of fact." Lyons v. U.S. Bank NafIAss'n. 181 Wash. 2d 775, 786, 336
8In construing the CPA, we are guided by federal law. RCW 19.86.920("It is the intent
of the legislature that, in construing this act, the courts be guided by final decisions of the federal
courts and final orders of the federal trade commission interpreting the various federal statutes
dealing with the same or similar matters.")
9The quotation was accompanied by the following promise for future increased clarity:
"This case does not give us an opportunity to explore in detail howto define unfair acts for the
purposes of our CPA. That must wait for another day." Klem, 176 Wash. 2d at 787-88.
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No. 72424-0-1/15
P.3d 1142 (2014): accord Panag. 166 Wash. 2d at 47 ("Whether a particular act or
practice is 'unfair or deceptive' is a question of law." (quoting Leingang v. Pierce
County Med. Bureau. Inc.. 131 Wash. 2d 133, 150, 930 P.2d 288 (1997))).
In his second amended complaint, Rush asserted that Blackburn's sale of
Rush's automobile when the impoundment hearing was pending was an unfair
and deceptive act or trade practice, constituting a violation of the CPA.
To evaluate this contention, we must first review the applicable statutory
and regulatory framework. Chapter46.55 RCW governs towing and
impoundment. RCW 46.55.120, which governs disputed impoundments
provides, in pertinent part:
[(2)]. . . . (b) Any person seeking to redeem an impounded
vehicle under this section has a right to a hearing in the district or
municipal court for the jurisdiction in which the vehicle was
impounded to contest the validity ofthe impoundment or the
amount of towing and storage charges Any request for a
hearing shall be made in writing on the form provided for that
purpose and must be received by the appropriate court within ten
days of the date the [notice and hearing request form were
provided] and more than five days before the date ofthe
auction. . . . If the hearing request is not received by the court
within the ten-day period, the right to a hearing is waived and the
registered owner is liable for any towing, storage, or other
impoundment charges permitted under this chapter. Upon receipt of
a timely hearing request, the court shall proceed to hear and
determine the validity of the impoundment.
(3)(a) The court, within five days after the request for a
hearing, shall notify the registered tow truck operator.
RCW 46.55.130, which governs the notice requirements applicable to
auctions of "unclaimed" vehicles, provides, in pertinent part:
If, after the expiration offifteen days from the date of mailing of
notice of custody and sale ... the vehicle remains unclaimed . . .
15
No. 72424-0-1/16
then the registered tow truck operator having custody of the vehicle
shall conduct a sale of the vehicle at public auction.
In sum, an impoundment hearing must be requested within 10 days of the
date on which a notice of impound is provided, the court has five days after a
hearing has been requested to notify the tow operator, and the tow operator may
not sell the vehicle until "after the expiration of [15] days." Thus, the statutory
timeline is arranged so that a tow operator will receive notice of a properly
requested impound hearing before an auction may lawfully be held.
While the applicable statutes do not explicitly state that a tow truck
operator may not sell an impounded vehicle at auction while an impoundment
hearing decision is pending, WAC 308-61-168 ("disputed impound") directly
prohibits such action.10
(1) Where a timely request has been made for a district or
municipal court hearing and where the vehicle owner has failed to
redeem the vehicle, the abandoned vehicle procedural
requirements may be followed, but the sale of the vehicle at public
10 Moreover, while the parties do not argue this point, the rule thata hearing must be held
before impounded property is sold at auction to satisfy the debt to the tow operator is a function of
due process. See Sniadach v. Family Fin. Corp.. 395 U.S. 337, 89 S. Ct. 1820, 23 L. Ed. 2d 349
(1969) (prejudgment garnishment of alleged debtor's wages violates due process); Fuentes v.
Shevin. 407 U.S. 67, 92 S. Ct. 1983, 32 L. Ed. 2d 556 (1972) (invalidating statutes thatallowed a
creditor to require a state official to seize items from a defendant without advance notice); Mitchell
v. W.T.Grant Co.. 416 U.S. 600, 94 S. Ct. 1895, 40 L. Ed. 2d 406 (1974) (approved statutes
allowing a credit seller/installment seller to cause government officials to repossess household
items from a credit buyer without prior notice because seller had prior interest in property
antagonist to buyer's interest); and N. Georgia Finishing. Inc. v. Di-Chem. Inc., 419 U.S. 601, 95
S. Ct. 719, 42 L. Ed. 2d 751 (1975) (invalidated statute that allowed creditor togarnish debtor's
property upon filing of affidavit, because creditor lacked tangible prior interest in the property);
see also Doug Rendleman, Analyzing the Debtor's Due Process Interest, 17 Wm. &Mary L. Rev.
35 (1975) (proposing a framework for determining the process due debtors when creditors seek
to take debtors' property to satisfy debts). Any connection between Blackburn's regulatory
violation and a violation ofdue process would, ofcourse, be relevant to a determination of
whether the behavior is unfair, given the inseparability offairness from the requirements ofdue
process. See Lassiter v. Dep't of Soc. Servs.. 452 U.S. 18, 24-32, 101 S. Ct. 2153, 68 L. Ed. 2d
640 (1981) ("[T]he phrase ['due process'] expresses the requirement of 'fundamental fairness.'").
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No. 72424-0-1/17
auction must not take place until after the court has disposed of the
request.1111
WAC 308-61-168.
Herein, it is undisputed that (1) Rush paid all fees and followed all
statutory requirements to challenge the illegal impound of his vehicle in court, (2)
this included obtaining a signed impound hearing request form from Blackburn,
(3) the district court clerk mailed Blackburn written notice of the impoundment
hearing, (4) the district court ruled in Rush's favor, finding that the impound was
illegal and that the vehicle should be returned to Rush without cost, (5) Blackburn
never challenged the impoundment hearing order, (6) Blackburn auctioned
Rush's vehicle before the impoundment hearing commenced and sold the
vehicle to himself for $1, and (7) Blackburn had auctioned numerous other
impounded vehicles to himself and his family members in similar $1 sales.
There are many reasons to conclude that Blackburn's actions herein
constituted an unfair act or practice. By auctioning Rush's vehicle before the
requested impound hearing was held and the matter decided, Blackburn
indisputably violated WAC 308-61-168. Moreover, towing and impoundment is a
highly regulated field, and the regulation that was violated is part of the system of
statutes and regulations applicable to the industry. Together, these facts suggest
that Blackburn's actions "'offend[ed] [established] public policy.'" Magnev. 34
Wash. App. at 57 (quoting Sperry. 405 U.S. at 244 n.5).
11 This regulation was specifically referenced in the hearing request form that Blackburn
provided to Rush.
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By depriving Rush of his vehicle, Blackburn also caused Rush substantial
injury. Blackburn asserts that this injury was reasonably avoidable because
Rush could have paid the $700 impoundment fee up front then later challenged
the lawfulness of the tow. However, the legislature provided consumers the
option of either paying for an impoundment up front and seeking reimbursement
for an improper impound later, or enduring the temporary loss of a vehicle in
order to avoid fronting the cost of an improper impound. Depriving consumers of
this option, and putting the onus on consumers to pay a considerable—and
sometimes unwarranted—sum up front, is contrary to the protective purpose of
the CPA.
Furthermore, upon receiving the impound notice and impound hearing
request forms that Blackburn provided Rush, both ofwhich included a notification
that the recipient thereof had a right to an impound hearing, "a reasonable
consumer" likely would have been misled into believing that Blackburn was
familiar with, and attentive to, the statutory and regulatory provisions applicable
to tow truck operators. A reasonable consumer in that situation likely would have
believed that Blackburn would not unlawfully sell the impounded vehicle while the
consumer availed him- or herself of the statutory procedure for contesting the
impound—ofwhich Blackburn himself had notified the consumer.
Based on the foregoing, it is clear that, at the very least, Rush has
established an issue of material fact as to whether Blackburn engaged in an
unfair or deceptive act or practice.
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No. 72424-0-1/19
B
Blackburn also contends that Rush failed to establish that the alleged
unfair or deceptive act or practice had a public interest impact.12 We disagree.
A CPA plaintiff may establish that an alleged unfair or deceptive act or
practice is injurious to the public interest because it:
(1) Violates a statute that incorporates this chapter;
(2) Violates a statute that contains a specific legislative
declaration of public interest impact; or
(3)(a) Injured other persons; (b) had the capacity to injure
other persons; or (c) has the capacity to injure other persons.
RCW 19.86.093; accord RCW 19.86.920 ("[T]he intent of the legislature [is] that
this act shall not be construed to prohibit acts or practices . .. which are not
injurious to the public interest.").
"The first two subsections of this statute reflect. . . that the public interest
element can be satisfied per se where the plaintiff shows violation of a statute
that contains a specific legislative declaration of public interest impact." Klem,
176 Wash. 2d at 804 (Madsen, C.J., concurring). Subsection (3), by contrast,
"bases public interest impact on actual injury and capacity to injure." Klem. 176
Wash. 2d at 804 (Madsen, C.J., concurring).
For violations falling under subsection (3), "whether the public has an
interest in any given action is to be determined by the trier offact from several
factors, depending upon the context in which the alleged acts were committed."
Hangman Ridge. 105 Wash. 2d at 789-90.
12 The trial court agreed with Blackburn.
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No. 72424-0-1/20
Where the acts complained of involve "essentially a consumer transaction"
such as the sale of goods, the following five factors are relevant:
(1) Were the alleged acts committed in the course of defendant's
business? (2) Are the acts part of a pattern or generalized course
of conduct? (3) Were repeated acts committed prior to the act
involving plaintiff? (4) Is there a real and substantial potential for
repetition of defendant's conduct after the act involving plaintiff? (5)
Ifthe act complained of involved a single transaction, were many
consumers affected or likely to be affected by it?
Hangman Ridge. 105 Wash. 2d at 790.
Where the complaint involves "essentially a private dispute" such as the
provision of professional services, different factors are involved:
(1) Were the alleged acts committed in the course of defendant's
business? (2) Did defendant advertise to the public in general? (3)
Did defendant actively solicit this particular plaintiff, indicating
potential solicitation of others? (4) Did plaintiff and defendant
occupy unequal bargaining positions?
Hangman Ridge. 105 Wash. 2d at 790-791.
Although the factors applicable vary and can depend on whether the
situation involves a public transaction or a private dispute, "not one of these
factors is dispositive, nor is it necessary that all be present." Hangman Ridge,
105 Wash. 2d at 791. Instead, "[t]he [exemplar] factors . . . represent indicia of an
effect on public interest from which a trier offact could reasonably find public
interest impact." Hangman Ridge, 105 Wash. 2d at 791.
Moreover, the public transaction/private dispute dichotomy does not apply
in every case. As our Supreme Court recognized almost 30 years ago:
This distinction between consumer and private disputes is
very useful in the vast majority of Consumer Protection Act cases.
Typically, these cases involve disputes between a purchaser of
goods and a seller, or disputes between an individual paying for
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No. 72424-0-1/21
services and the party rendering them. When this type of case
appears, the procedure set forth in Hangman Ridge is an excellent
vehicle for determining whether the public interest requirement is
met.
However, in [some] case[s], it is clear that such a neat
distinction between consumer and private disputes is not workable.
Nordstrom. Inc. v. Tampourlos. 107 Wash. 2d 735, 741-42, 733 P.2d 208 (1987)
(citations omitted). The public interest element may be satisfied in these cases
all the same. See, e.g.. Panag 166 Wash. 2d 43-44; Stephens v. Omni Ins. Co..
138 Wash. App. 151, 177-78, 159P.3d 10(2007). affd. 166 Wash. 2d 27, 204 P.3d
885 (2009).
This is one of those cases in which the "neat distinction" between
consumer/contractual relationships drawn in Hangman Ridge does not apply.
While Blackburn offers consumer services, it was Jablinske, not Rush, who
solicited them. By responding to Jablinske's request, Blackburn, in effect, forced
Rush into a consumer relationship with him. In order for Rush to recover the
property wrongfully taken from him, Rush had no choice but to interact with
Blackburn, whether to pay to redeem his vehicle or, at the very least, to request
an impoundment hearing form. In this way, the relationship between Blackburn
and Rush is more coercive than the standard consumer/contractual relationship
contemplated by the Hangman Ridge framework. As a result, consumers in
comparable situations are likely more vulnerable to abuse. Thus, construing the
CPA broadly—as we are required to do, RCW 19.86.920—the structure of the
towing and impoundment relationship provides a basis for asserting a public
interest.
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No. 72424-0-1/22
Moreover, our Supreme Court has articulated a basis to conceive of a
public interest in the towing context. In Crane Towing. Inc. v. Gorton. 89 Wash. 2d
161, 570 P.2d 428 (1977), the court addressed a challenge from, among others,
the Washington Tow Truck Association regarding whether several sections of the
prior towing and impoundment chapter were the product of a valid exercise of the
police power.13 The court determined:
[W]e think a set of facts conceivably exists which support a finding
that [the towing and impoundment chapter] tends to promote the
safety and welfare of the people. Modern society's dependence on
the automobile as the primary mode of travel is well known in this
time of national discussion on energy conservation. Traveling
hundreds of miles from one's home and back in 1 day, whether for
business or pleasure, is surely not an uncommon experience. It
cannot be doubted that the unexpected loss of the use of one's
vehicle directly affects the safety and welfare of vehicle operators
and owners. A person may be stranded hundreds of miles from
home with no alternative mode of return travel and with no place to
stay until the vehicle can be recovered. Similarly, the loss of the
use of one's vehicle may substantially affect one's employment.
Legislation which tends to assist members of the public from
involuntarily losing the use of their vehicles and which tends to
expedite recovery of their vehicles once they have been removed
fairly and clearly promotes the safety and welfare of the public.'141
13 The statutes at issue in Crane were repealed in 1985. At the same time, a new
chapter, addressing the same issues, was added to the relevant title. The new chapter was
originally entitled "Abandoned, Unauthorized, and Junk Vehicles—Tow Truck Operators," but is
now entitled "Towing and Impoundment." Laws of 1985, ch. 377 (currently in effect, as
amended).
14 Indeed, the fact that our Supreme Court approved of the statutes as a valid exercise of
the police power is itselfreflective of a potential public interest impact.
In measuring the constitutionality of a legislative enactment against the permissible
bounds of the police power courts apply a two-step test.
"First, does it tend to promote the health, peace, morals, education, good order
and welfare of the people? More specifically, does it tend to correct some evil or
promote some interest of the state?
The second inquiry, more narrow, but equally important, is whether the
particular statute underscrutiny bears a reasonable and substantial relation to
accomplishing the purpose established in step one."
Crane, 89 Wash. 2d at 168 (citations omitted) (quoting State v. Conifer Enters., Inc., 82 Wash. 2d 94,
96-97, 508P.2d 149(1973)).
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No. 72424-0-1/23
Crane Towing. 89 Wash. 2d at 169-70. Thus, our Supreme Court recognized the
important personal and public interests at stake in the effective regulation of the
towing industry.
As to the particular unfairor deceptive practice alleged herein, as further
elaborated above, there is no dispute that Blackburn violated an applicable
towing and impoundment regulation by auctioning Rush's vehicle before Rush's
statutorily-guaranteed impoundment hearing was held. Moreover, undisputed
evidence established that, in the course of his business, Blackburn "routinely"
signed impound hearing request forms and that Blackburn had auctioned
countless other impounded vehicles to himself, his daughter, his nephew and his
sister in similar $1 sales. From this, there is a permissible inference that, in
comparable circumstances, Blackburn might unlawfully auction another vehicle
again.
This inference is further supported by Blackburn's arguments on appeal.
Blackburn expresses incredulity at the suggestion that, despite the volume of
paperwork he handles, he might be expected to follow up on each impound
hearing request form. At the same time, Blackburn boldly denies that he
received any communication from the district court regarding Rush's scheduled
impound hearing. Moreover, he uses this alleged lack of notice as an excuse for
unlawfully selling Rush's vehicle before the district court made its decision. By
repeatedly asserting that he did nothing wrong in this case, Blackburn unwittingly
supports an inference that he might repeat his unlawful conduct in the future.
23
No. 72424-0-1/24
We conclude that Rush adduced sufficient evidence to create an issue of
material fact regarding whether Blackburn's conduct affected the public interest.
Therefore, the trial court erred by granting summary judgment dismissal of
Rush's CPA claim.
The trial court's order vacating the default judgment is affirmed. The order
granting Blackburn's motion for partial summary judgment dismissal of Rush's
CPA claim is reversed. The cause is remanded to the superior court for further
proceedings.
1
We concur:
/O^y y^ CTl, J
CD
C,
IV;
o
CO
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