Opinion
No. 36449-2-II.
July 22, 2008.
Appeal from a judgment of the Superior Court for Pierce County, No. 05-2-07726-9, Vicki L. Hogan, J., entered June 8, 2007.
Affirmed in part and reversed in part by unpublished opinion per Quinn-Brintnall, J., concurred in by Houghton and Bridgewater, JJ .
UNPUBLISHED OPINION
After purchasing a car from Titus-Will Ford Sales, Inc., d/b/a Mallon Ford, L.S. accepted an offer of a celebratory drink from members of the dealership's sales staff. L.S. sued Titus-Will, its managers, and three sales staff, Michael Dolajak, Richy Carter, and Broderick LaDrae Gordon, in Pierce County Superior Court, alleging that the sales staff had raped her after this social outing.
Dolajak appeals a default order and judgment issued against him because he did not receive required notice. L.S. cross-appeals, challenging the order to vacate Carter's default judgment which the trial court vacated because he did not receive required notice. L.S. argues that the judgments were not defaults under CR 55 but rather trials under CR 40(a)(5) at which Dolajak and Carter failed to appear. The attorney for Titus-Will, Dan'L Bridges, submitted briefs to support Dolajak and Carter and requested attorney fees and costs. Bridges did not represent Dolajak or Carter, Titus-Will settled the matter before trial, and the company was dismissed. Finally, L.S. asks this court to sanction Bridges.
We hold that (1) Titus-Will and Bridges lack standing because they do not have an interest in the outcome of the litigation below or in the current appeal, (2) the trial court's judgments were defaults under CR 55, (3) Dolajak's default judgment must be vacated because the record establishes that he did not receive the notice of default that CR 55(f)(1) requires, (4) the trial court properly vacated Carter's default judgment because he did not receive the notice of default that CR 55(a)(3) requires, and (5) the trial court properly denied Carter's motion for attorney fees and costs. Accordingly, we reverse in part and affirm in part.
FACTS
Lawsuit
In 2005, L.S. filed a lawsuit against Titus-Will salesmen Carter, Dolajak, and Gordon. The suit claimed that L.S. purchased a car from the dealership and then Carter, Dolajak, and Gordon invited her to celebrate her purchase with them. She further alleged that the three men raped her.
The parties do not argue that Carter, Dolajak, or Gordon did not receive proper notice of the lawsuit and it appears that they did.
L.S. also sued Titus-Will and two of its managers, Bill Hanford and Henry Krebs. The Pierce County Superior Court consolidated the two lawsuits under cause number 05-2-07726-9. Bridges represented Titus-Will and the managers but did not represent Carter, Dolajak, or Gordon. Default Judgment
The complaint against Titus-Will is not in our record.
Trial was scheduled to begin on May 7, 2007. L.S.'s attorney, Lincoln Beauregard, and Bridges were the only participants to appear. Beauregard told the trial court that L.S. had settled her case with Bridges's clients. Beauregard also asked the court "pursuant to rule 55 to enter an order of default" against Carter, Dolajak, and Gordon because they did not file answers, appear in court, or otherwise defend their case. Report of Proceedings (RP) (May 7, 2007) at 4.
Bridges and Beauregard presented oral argument on the default motion. Bridges stated that his "clients [Titus-Will, Hanford and Krebs] are not actively a party" but he told the trial court that he had seen a pro se answer that Carter filed. RP (May 7, 2007) at 4. The trial court dismissed Gordon without prejudice because he had filed a "statement" pro se, did not appear for trial, but also had not been notified of the default hearing. But the trial court was unable to locate any pleadings from Carter.
Beauregard renewed his request for a default judgment against Carter and Dolajak. The trial court noted, "Mr. Bridges, I am not certain if you represent these folks technically," to which Bridges replied, "I do not." RP (May 7, 2007) at 12. Nevertheless, Bridges argued several reasons why the trial court should enter a judgment less than $2.5 million. The trial court then entered a default judgment for $2.5 million against Carter and Dolajak. Motions to Vacate Judgments
Carter and Dolajak retained counsel and moved to vacate the default judgments. Carter asserted that (1) he had filed an answer; (2) contrary to CR 55(a)(3), he was not served with notice to which he was entitled before the default hearing; and (3) he had good cause for not attending the trial because Beauregard and Bridges misled him into believing that he did not have to appear. Carter requested attorney fees and costs arising from his motion to vacate the judgment.
Dolajak similarly asserted that (1) contrary to CR 55(f)(1), he was not served with notice before the court signed the default order and (2) he had good cause for not attending the trial because Bridges told him the case was settled and he did not have to attend. Dolajak did not request fees or costs.
Bridges filed a brief entitled Defendant [Titus-Will's] Amicus Brief in Support of Carter's Motion to Vacate Default Order and Judgment [and] Request for Court to Sue [sic] Sponte Vacate Dolajak Default Order and Judgment. He also submitted his own declaration.
In response to the motions to vacate, L.S. argued that the judgments against Carter and Dolajak were not CR 55 default judgments but rather were CR 40(a)(5) judgments on the merits entered after a trial for which the defendants failed to appear. L.S. also challenged Bridges's standing.
The trial court ruled:
Mr. Carter filed a document on April 20th of `07. . . . I will consider it an answer, and the order of default needs to be set aside as to Mr. Carter.
As to Mr. Dolajak, he did nothing: No answer, no appearance on trial day. And while there may be a mistake by Counsel in citing the incorrect rule, CR 40 over CR 55, there was a hearing on the merits. And so the default judgment, order of default, and default judgment as to . . . Mr. Dolajak, are not set aside. . . .
. . . .
Obviously, the Court accepts responsibility for, as [counsel have] pointed out on Page 9 of the [May 7th] transcript, what rule are we operating under. I wanted to make certain that the order accurately reflects that.
RP (June 8, 2007) at 33-35. The trial court declined to award any attorney fees or sanctions. The trial court then issued a written Order Vacating Default Judgment Against Defendant, Richy Carter. And in the written order denying Dolajak's motion, the judge crossed out the typed phrase which indicated the trial court entered the order "pursuant to CR 40(a)(5) and CR 60" and hand wrote that Dolajak's motion was to "set aside default." 2 CP at 385.
Dolajak appeals; L.S. and Bridges cross-appeal.
ANALYSIS
Standing
We first address whether Bridges has standing to participate in this case. We hold that he does not. Bridges's briefing before us is relevant only to the extent that Carter, a proper party with standing, adopted it as representing his interests and we will consider it for this limited purpose only.
The common law doctrine of standing prohibits a litigant from raising another's legal right. Grant County Fire Prot. Dist. No. 5 v. City of Moses Lake, 150 Wn.2d 791, 802, 83 P.3d 419 (2004). And RAP 3.1 mandates that "[o]nly an aggrieved party may seek review by the appellate court." Washington courts define "aggrieved party" as one whose personal right or pecuniary interests have been affected by the matter at issue. State ex rel. Simeon v. Superior Court for King County, 20 Wn.2d 88, 90, 145 P.2d 1017 (1944). "An aggrieved party is not one whose feelings have been hurt or one who is disappointed over a certain result." State v. Taylor, 150 Wn.2d 599, 603, 80 P.3d 605 (2003). Standing is a question of law that we review de novo. Wolstein v. Yorkshire Ins. Co., 97 Wn. App. 201, 206, 985 P.2d 400 (1999).
In this action, Bridges represented only Titus-Will, Hanford, and Krebs. These three defendants settled their case before trial and the proceedings against Dolajak, Carter, and Gordon do not affect the settlement. Although Bridges seems intent on ignoring this fact, he admitted to the trial court and during oral argument before this court that he does not have an attorney-client relationship with Dolajak or Carter. Inexplicably, despite the fact that they are not his clients, Bridges presented arguments purporting to be on Dolajak's and Carter's behalf to the trial court and to this court. Bridges's clients — Titus-Will, Hanford, and Krebs — are not "aggrieved parties" because the matter does not affect their personal rights or pecuniary interests. Simeon, 20 Wn.2d at 90. And, as a result of the settlement, they were not before the trial court and are not before us in this action.
See section below regarding attorney fees on appeal.
To the contrary, at the trial court, Bridges rebutted argument that he was an "implied" attorney for Dolajak and Carter. RP (June 8, 2007) at 18.
Nor is Bridges an "aggrieved party" in his personal capacity. He asserts that he wants to participate because Dolajak and Carter accused him of the ethically questionable behavior of telling them not to attend trial because the case had settled. Bridges may be a witness but he is not a party to the action and the proceedings did not affect Bridges's personal rights or pecuniary interests. This was not contract litigation between an attorney and client, a malpractice suit, or an administrative hearing regarding whether Bridges violated the Rules of Professional Conduct. Bridges does not have standing in his personal capacity to be heard in this lawsuit or on appeal.
At the June 8, 2007 hearing, Bridges argued:
[Bridges:] And to the extent that I am cross hairs in this motion, I think I have standing, if nothing else, as an officer of the Court, to come in and provide briefing and authority and, frankly, evidence through declaration, which I have, that bears directly on a proceeding that I was a party to. . . .
I don't know how threatening to sue an attorney if they file a pleading on the matter, frankly, is not sanctionable, if not a crime, in terms of tampering with a witness. In this very notion that I would not have standing to come here and point out some authority on a case that I have been litigating for a year and a half, to me is novel. I certainly don't see any prejudice to Mr. Beauregard's client, and if the prejudice is having the proper authority before the Court, I don't see how that is an argument that he would even deem to make.
[Beauregard]: I have no objection to Mr. Bridges participating if he is standing as Mr. Bridges.
RP (June 8, 2007) at 15-16.
Last, the role Bridges served at the trial court was arguably that of a witness. But his possible role as a witness does not grant him standing to argue before the trial court or appeal the trial court's decision.
Bridges offers meritless arguments regarding standing. He argues that the other parties waived this issue by failing to raise it below. But the trial court and parties raised the issue. Moreover, "standing is a jurisdictional issue that can be raised for the first time on appeal." Int'l Ass'n of Firefighters, Local 1789 v. Spokane Airports, 146 Wn.2d 207, 212-13 n. 3, 45 P.3d 186 (2002). Further, he argues that "the issue of standing on appeal is not properly before this court" because L.S. did not move to strike his briefs. Reply Br. of Titus-Will at 6. We do not require such procedural formalities because, if a party lacks standing, we do not have jurisdiction to consider its appeal. RAP 3.1. Moreover, because it relates to our authority to issue a viable ruling, we can discuss standing sua sponte, even if not raised by a party. Branson v. Port of Seattle, 152 Wn.2d 862, 875 n. 6, 101 P.3d 67 (2004). We hold that neither Bridges nor his clients, Titus-Will, Hanford, and Krebs, have standing in this appeal.
We acknowledge, however, that Carter's appellate counsel filed motions to adopt the relevant arguments in the brief that Bridges filed. Carter's attorney did not file a separate brief and withdrew from representing Carter. To avoid injustice, we will consider Bridges's brief to the extent that Carter adopted it to represent his own interest. See RAP 1.2(a) (appellate court rules are "liberally interpreted to promote justice and facilitate the decision of cases on the merits"). Default Judgments
After oral argument, Bridges submitted a statement of additional authorities. We do not consider the statement because Bridges does not have standing. See RAP 10.8 (only party or amicus curiae may submit a statement of additional authorities).
We turn now to the merits of the issues raised by the parties. Dolajak argues that the trial court lacked authority to enter a default judgment against him because he did not receive the notice that CR 55(f)(1) requires. On cross-appeal, L.S. contends that the trial court erred when it vacated the default judgment against Carter. The record is clear that neither Dolajak nor Carter received the notice that CR 55 requires. We, therefore, (1) reverse Dolajak's default order and judgment and (2) affirm the order vacating Carter's default judgment.
L.S. argues that the trial court entered a judgment on the merits after a CR 40(a)(5) motion. As detailed above, the trial court's oral ruling upon reconsideration seems to indicate that the May 7 proceedings were a CR 40(a)(5) trial rather than a default hearing, at least as they concerned Dolajak. But the trial court's written orders, particularly the hand written edits, clearly show that the court intended to deny Dolajak's motion to "set aside default" (a phrase the judge hand wrote) and did not issue the order "pursuant to CR 40(a)(5) and CR 60" (a phrase the court crossed out). 2 CP at 385. A trial court's oral decision is no more than a verbal expression of an informal opinion at the time, while the court's subsequent written decision is binding. DGHI Enters. v. Pac. Cities, Inc., 137 Wn.2d 933, 944, 977 P.2d 1231 (1999) (quoting Ferree v. Doric Co., 62 Wn.2d 561, 566-67, 383 P.2d 900 (1963)). Accordingly, L.S. is incorrect when she asserts that the trial court held that it had conducted a CR 40(a)(5) trial. The proceedings below, which were all labeled "default" orders and judgments, were issued under CR 55 and, therefore, all the rules applying to default orders and judgments apply.
None of the parties appealed the trial court's dismissal of Gordon's case without prejudice on the ground that he had answered but was not notified of the trial date.
We review a trial court's decision on a motion for default judgment for abuse of discretion. Yeck v. Dep't of Labor Indus., 27 Wn.2d 92, 95, 176 P.2d 359 (1947). Discretion is abused if it is exercised on untenable grounds or for untenable reasons. Braam v. State, 150 Wn.2d 689, 706, 81 P.3d 851 (2003). We review questions of law de novo. Dep't of Ecology v. Campbell Gwinn, L.L.C., 146 Wn.2d 1, 9, 43 P.3d 4 (2002).
A trial court has no authority to enter a default judgment against a party who did not receive proper notice. Shreve v. Chamberlin, 66 Wn. App. 728, 731, 832 P.2d 1355 (1992), review denied, 120 Wn.2d 1029 (1993). As a result, a party who did not receive required notice is entitled as a matter of right to have a default judgment set aside. Tiffin v. Hendricks, 44 Wn.2d 837, 847, 271 P.2d 683 (1954); see also Ware v. Phillips, 77 Wn.2d 879, 884-85, 468 P.2d 444 (1970) (holding a lack of notice caused judgment to be void on due process grounds).
A. Dolajak's Default Judgment
Dolajak argues that we should reverse his default judgment because he did not receive the notice that CR 55(f)(1) requires. We agree.
CR 55(f)(1) provides:
When more than 1 year has elapsed after service of summons with no appearance being made, the court shall not sign an order of default or enter a judgment until a notice of the time and place of the application for the order or judgment is served on the party in default, not less than 10 days prior to the entry. Proof by affidavit of the service of the notice shall be filed before entry of the judgment.
Here, L.S. served Dolajak with the summons and complaint on July 25, 2005. Over one year elapsed and Dolajak did not appear. Dolajak was not served with notice that L.S. had applied for a default judgment. Despite this failure, on May 7, 2007, the trial court signed a default order and judgment. Because Dolajak did not receive the notice that CR 55(f)(1) requires, he is entitled as a matter of right to have the default judgment set aside. Hendricks, 44 Wn.2d at 847. And the trial court acted without authority when it entered the default order and judgment against Dolajak.
L.S. does not challenge the fact that Dolajak and Carter were not served with notice. Also, the Clerk's Papers do not contain affidavits of service for the default hearing or order.
Dolajak seeks reversal of the $2.5 million judgment based on insufficient evidence and procedural irregularities. Because our ruling on the default judgment is dispositive, we do not address this argument.
B. Vacation of Carter's Default Judgment
In her cross-appeal, L.S. argues that we should reverse the trial court's order to vacate the default judgment against Carter. We disagree.
CR 55(a)(3) provides that:
Any party who has appeared in the action for any purpose shall be served with a written notice of motion for default and the supporting affidavit at least 5 days before the hearing on the motion. Any party who has not appeared before the motion for default and supporting affidavit are filed is not entitled to a notice of the motion, except as provided in rule 55(f)(2)(A).
It is undisputed that Carter "appeared" by filing a pro se answer. See RCW 4.28.210 (defining "appearance" to include filing an answer). And, as with Dolajak, it is undisputed that Carter was not served with notice before the default hearing. Thus, the trial court was required to set aside the default order and judgment and did not err in doing so. Hendricks, 44 Wn.2d at 847.
Attorney Fees
A. AtTrial
Carter attempts to also argue that the trial court improperly denied his motion for attorney fees and costs incurred in his motion to vacate the default order. Carter did not file a cross-appeal and this matter is not before us.
Carter's argument is contained in Bridges's briefs, which Carter adopted as his own. To the extent that Bridges advocates for fees on behalf of himself and his clients, we decline review because they do not have standing.
B. On Appeal
Carter also requests attorney fees on appeal if we hold that attorney fees were proper below. We deny Carter's request because Carter did not cross-appeal from the trial court's attorney fee ruling and does not cite an additional basis for awarding appellate attorney fees. RAP 18.1.
L.S. asks that we impose CR 11 sanctions against Bridges. As relevant here, CR 11 allows an appellate court to impose sanctions on an attorney if he signed a brief that is not, to the best of his reasonable knowledge, well grounded in fact or warranted by the law or if the brief was interposed for any improper purpose. Also see RAP 18.1(a) (allowing CR 11 sanctions on appeal). And RAP 18.9 allows sanctions for frivolous appeals. An appeal is frivolous if "the court is convinced that the appeal presents no debatable issues upon which reasonable minds might differ, and that it is so devoid of merit that there is no possibility of reversal." Ramirez v. Dimond, 70 Wn. App. 729, 734, 855 P.2d 338 (1993).
Bridges disguised his role in the litigation and appeal by (1) signing his briefs as "Attorney for [Titus-Will], et. al." without explaining that "et. al." refers to the managers, Hanford and Krebs, rather than the parties of interest, Carter and Dolajak, Br. of Titus-Will at 29; and (2) repeatedly referring to his argument as representing "Defendants," again without specifying his clients' identities or that his clients are no longer active defendants. Further, Bridges requests attorney fees on behalf of himself and his clients despite the fact that neither he nor his clients have any interest in the litigation and he had no genuine authority to file a brief with this court. These are not innocent or inadvertent mistakes. Challenges to Bridges's standing were repeatedly raised at trial and on appeal and the law is clear. Moreover, not only does he not represent Carter or Dolajak, it may well be that a conflict of interest that has not been waived bars him from doing so. See RPC 1.7. It appears that Bridges submitted these briefs as a forum to defend his own conduct — out of personal motivation rather than necessity or strategy on behalf of a client — and to attack opposing counsel.
RPC 1.7 states:
(a) Except as provided in paragraph (b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest. A concurrent conflict of interest exists if:
(1) the representation of one client will be directly adverse to another client; or
(2) there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's responsibilities to another client, a former client or a third person or by a personal interest of the lawyer.
(b) Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if:
(1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client;
(2) the representation is not prohibited by law;
(3) the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal; and
We, therefore, hold that Bridges's purported cross-appeal is frivolous and award sanctions to L.S. and Dolajak. The amount of the sanctions will be determined by a commissioner of this court after determining costs necessarily incurred to reply to Bridges's improperly filed briefing.
We reverse the trial court's default order and judgment against Dolajak, affirm its order vacating the default order and judgment against Carter, and direct the commissioner of this court to determine appropriate sanctions to impose against Bridges.
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 pursuant to RCW 2.06.040, it is so ordered.
HOUGHTON, P.J. and BRIDGEWATER, J., concur.