Opinion
No. 59058-8-I.
December 31, 2007.
Appeal from a judgment of the Superior Court for King County, No. 05-2-36742-3, Brian D. Gain, J., entered October 4, 2006.
Affirmed by unpublished opinion per Dwyer, J., concurred in by Baker and Cox, JJ.
Rachel Naidu, individually and as the personal representative of the estate of her father, James l. Overcash, appeals from a summary judgment order dismissing her negligence and wrongful death claims against Des Moines Vista Assisted Living, Inc. (Vista Inc.). Naidu also assigns error to orders denying her motion for reconsideration, denying her motion to amend her complaint, and ordering her and her attorney to pay a portion of Vista Inc.'s attorney fees. Finding no error, we affirm.
The names of the defendant, the facility where Overcash resided, and the facility's prior owner are significant. Because of the names' similarities, we will refer to Des Moines Vista Assisted Living, Inc. as "Vista Inc.," Des Moines Vista Assisted Living as "the facility," and Des Moines Retirement Center, LLC as "the LLC."
FACTS
Naidu claims Vista Inc. was negligent and that this negligence proximately caused the wrongful death of Overcash, who began residing at the facility in 2000 after suffering a debilitating stroke. Des Moines Vista Assisted Living (the facility) was located in SeaTac, Washington. Naidu alleges that on July 2, 2003, Overcash left the facility on a motorized scooter and attempted to negotiate a steep driveway. Naidu claims that Overcash lost control of the scooter and crashed. He was found unconscious and was airlifted to Harborview Medical Center in Seattle. He died the next day. The cause of death was a blunt force injury to his head. The sole issue raised in Vista Inc.'s motion for summary judgment was whether Vista Inc. had any connection whatsoever to Overcash's unfortunate demise. Put another way, Vista Inc. claims that Naidu named the wrong legal entity as the defendant in the lawsuit.
Ginger White testified by declaration that she was the president of Vista Inc. until its corporate license expired on August 31, 2003. According to White, Vista Inc. was administratively dissolved on November 24, 2003. White declared that Vista Inc. was a shell corporation that she formed but that it never conducted any business and, in particular, never operated the facility. According to White, the facility operated under the trade name "Des Moines Vista Assisted Living," but the facility was owned and operated by Des Monies Retirement Center, LLC (the LLC), which White also owned. However, the LLC sold the facility to Baltic Properties, Inc. (Baltic) on November 26, 2002. White further declared that the LLC gave notice to its residents of the impending sale; that the LLC notified the state Department of Social and Health Services (DSHS) that it would be surrendering its license to operate a boarding home; that the LLC surrendered its license on the date of sale; that the LLC ceased operating the facility that same day; and that the LLC terminated its employees.
Naidu stated in an affidavit that she was the primary contact for Overcash, was never aware the facility had been sold, and was always under "the impression" that the facility was owned by "Des Moines Vista Assisted Living," which was the name she saw on a facility sign after the date White claims the facility was sold to Baltic.
Naidu filed her complaint on November 7, 2005. On January 6, 2006, Vista Inc.'s attorney sent a letter to Naidu's counsel explaining that the facility had been sold to Baltic on November 26, 2002. The letter also explained that "[t]he licensee and operator of the facility on July 2, 2003, to our knowledge, was `Fox Hospitality.'" The letter also suggested that a Seattle attorney, Robert Over, was the contact person. The letter also claimed that Vista Inc. was upset about having to incur attorney fees and that it expected reimbursement. On February 8, 2006, after not receiving a response from Naidu's counsel, Vista Inc.'s attorney sent another letter to Naidu's attorney, again requesting that the complaint be dismissed. The next day, Naidu's attorney responded by letter stating that because corporation documents showed that White was the registered agent for Vista Inc. with a corporate license expiration of August 31, 2003, Naidu would not dismiss the complaint unless she received some definitive proof that Vista Inc. was not operating the facility on the date of Overcash's injury.
The letter is not clear whether Over was believed to represent Baltic or Fox Hospitality. However, Naidu's own evidence proves that Naidu's counsel knew as early as January 4, 2006, that Over was the registered agent for Baltic.
Naidu acknowledges on appeal, as she did in the trial court, that she received the January 6, 2006, and February 8, 2006, letters from Vista Inc.'s counsel and that she also received copies of the following documents on June 9, 2006: (1) Seller's Settlement Statement dated November 26, 2002, for property at 21202 Pacific Highway South in SeaTac, Washington; (2) the Assignment of Sale Contract/Purchase Agreement and Deposit Receipt between the LLC and Baltic; (3) the Statutory Warranty Deed; and (4) the Title Affidavit. When Vista Inc.'s attorneys sent these documents, they confirmed receipt of an earlier facsimile transmission from Naidu's counsel regarding rescheduling White's deposition to a date in July. On June 23, 2006, Naidu's counsel again wrote to Vista Inc.'s attorneys declining to dismiss Vista Inc. from the lawsuit because "no documentation was provided showing that the purchasers agreed to indemnify Ginger White for all claims made prior to the date of sale." In the same letter, Naidu's counsel asked to reschedule White's deposition to September because both of Naidu's attorneys had scheduling conflicts with earlier proposed dates.
Both the Assignment of Sale Contract/Purchase Agreement and Deposit Receipt and the Statutory Warranty Deed refer to an "Exhibit `A'" that purportedly set forth the legal description of the real property, but that "Exhibit A" does not appear in the record. Its omission has not been treated as substantive by either party or the trial court.
On July 6, 2006, Vista Inc. filed a motion seeking both summary judgment dismissal of all claims against it and an award of attorney fees and costs. Naidu, in her responsive memorandum, requested a Civil Rule (CR) 56(f) continuance "[i]n the event [the court] deems it necessary." In reply, Vista Inc. filed a memorandum and a declaration from a Charles Vandeputte. Two days prior to the scheduled hearing on Vista Inc.'s motions, Naidu, in a reply memorandum, objected to the court considering Vandeputte's declaration. At the hearing, the trial court granted Vista Inc.'s summary judgment motion and also awarded Vista Inc. attorney fees and costs pursuant to CR 11, holding that Naidu failed to conduct a reasonable inquiry into the facts upon which her claim was based.
On August 14, 2006, 10 days after the trial court granted summary judgment in favor of Vista Inc., Naidu filed a motion seeking both reconsideration of these orders and an order allowing her to amend her complaint by adding White, the LLC, and Baltic as defendants and to add a new theory of recovery. Without conducting a hearing, the trial court, by written order, denied both requests. The court did not enter formal findings of fact or conclusions of law.
Naidu requested to amend her complaint adding allegations that the defendants failed to provide the necessary services to maintain the physical and/or mental health of Overcash pursuant to the vulnerable adult statute, RCW 74.34.020.
On November 14, 2006, the trial court entered judgment on the CR 11 award against Naidu, her two attorneys, and their respective law firms in the amount of $3,746.34. Naidu again filed a motion for reconsideration, which the trial court granted. After additional briefing, the trial court adhered to its original decision. Naidu appeals.
DISCUSSION
Record on Review
Before we can address the merits of the order granting summary judgment, our first task is to determine the content of the record on review. Jacob's Meadow Owners Ass'n v. Plateau 44 II, LLC, 139 Wn. App. 743, 754, 162 P.3d 1153, 1159 (2007); RAP 9.12.
"On review of an order granting or denying a motion for summary judgment the appellate court will consider only evidence and issues called to the attention of the trial court. The order granting or denying the motion for summary judgment shall designate the documents and other evidence called to the attention of the trial court before the order on summary judgment was entered. Documents or other evidence called to the attention of the trial court but not designated in the order shall be made a part of the record by supplemental order of the trial court or by stipulation of counsel." RAP 9.12.
It is our task to review a ruling on a motion for summary judgment based on the precise record considered by the trial court. That record includes those documents designated in an order granting summary judgment and any supplemental order of the trial court.
Jacob's Meadow, 139 Wn. App. at 754-55.
In determining the record on review, we must determine whether Vandeputte's declaration to which Naidu objected in the trial court, but has failed to object to on appeal either by motion to strike or as an assignment of error in her briefing, is properly before us. Vista Inc. refers to Vandeputte's declaration in its appellate briefing.
We begin by examining the order granting the motion for summary judgment. The trial court wrote that it has "considered the motion, the declarations of Thomas H. Grimm and Ginger R. White, the response of the Defendant, including the affidavits of Jerry Schumm and Rachel Naidu." The court did not specifically list Vandeputte's declaration, which was submitted to the trial court with Vista Inc.'s reply memorandum to Naidu's response to the motion for summary judgment. It appears that the trial court inadvertently stated that it considered "the response of the Defendant" when it meant the response of the plaintiff, considering that it was the defendant who moved for summary judgment and that Rachel Naidu's affidavit was included in plaintiff's response. Thus, it appears that the trial court did not consider Vandeputte's declaration given the following facts: (1) the trial court specifically listed other declarations and affidavits it did consider; (2) Naidu filed an objection to Vandeputte's declaration two days before the trial court made its ruling; and (3) the order granting summary judgment was presented by Vista Inc., who could easily have listed Vandeputte's declaration along with White's declaration in the proposed order. Because it appears that the trial court did not consider Vandeputte's declaration, we will not do so. See Jacob's Meadow, 139 Wn. App. at 754-55.
Standard of Review
We review de novo an order on summary judgment, engaging in the same inquiry as the trial court. Jacob's Meadow, 139 Wn. App. at 752 n. 1. Summary judgment is properly granted when the pleadings, affidavits, depositions, and admissions on file demonstrate that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. CR 56(c); Jacob's Meadow, 139 Wn. App. at 752 n. 1. The moving party bears the initial burden of establishing its right to judgment as a matter of law, but once the moving party satisfies that burden, the burden shifts to the nonmoving party, which must show that a triable issue exists. Jacob's Meadow, 139 Wn. App. at 752 n. 1. All reasonable inferences from the evidence must be construed in favor of the non-moving party. Jacob's Meadow, 139 Wn. App. at 752. "An adverse party may not rest upon mere allegations or denials, but must instead set forth specific facts showing the existence of a genuine issue for trial." CR 56(e); McBride v. Walla Walla County, 95 Wn. App. 33, 36, 975 P.2d 1029 (1999). "Summary judgment in favor of the defendant is proper if the plaintiff fails to make a prima facie case concerning an essential element of his or her claim." Seybold v. Neu, 105 Wn. App. 666, 676, 19 P.3d 1068 (2001).
Summary Judgment
In support of its summary judgment motion, Vista Inc. presented evidence that Vista Inc. did not own or operate the facility on the date of Overcash's injury.
In no uncertain terms, White, owner of both Vista Inc. and the LLC, declared that the LLC, not Vista Inc., had owned and operated the facility, and that the LLC had sold the facility to Baltic on November 26, 2002, long before Overcash's injury. The Seller's Settlement Statement confirmed the November 26, 2002, sale of the facility by reference to the facility's address. The Assignment of Sale Contract/Purchase Agreement and Deposit Receipt confirmed that the transaction was between the LLC and Baltic. While it is true that the sale documents did not specifically state whether the sale was for only the real property or also included the facility business as well, White's declaration provided that information. These factual showings shifted the burden to Naidu. To avoid summary judgment, it was incumbent upon Naidu to introduce evidence putting the material fact of ownership of the facility in contest.
However, the evidence Naidu cites to us and the arguments she makes suggest that she is confused regarding the legal significance of the facility's name. Moreover, Naidu's own documents failed to prove that Vista Inc. owned and operated the facility.
First, Naidu presented a "BH Summary Report" showing that the facility was called "Des Moines Vista Retirement Center" and that it was licensed by the LLC. This evidence does not rebut Vista Inc.'s evidence on the question.
Second, Naidu cites to a facsimile order form depicting the name "Des Moines Vista Assisted Living Retirement Community" and medical documents depicting the name "Des Moines Vista" to claim that Vista Inc. continued to operate the facility after the date the facility was sold. But that is not what this evidence shows. A business' name does not presumptively equate to the name of the business owner or operator. Regardless, the documents Naidu provided do not even have Vista Inc.'s corporate name stated on them.
Third, Naidu cites to records indicating that Vista Inc.'s corporate license expired on August 31, 2003, after the date on which Overcash was injured. But there is no evidence that Vista Inc. ever owned or operated the facility and proof of the existence of a corporate license in Vista Inc.'s name does not rebut White's declaration that the true owner, the LLC, surrendered its state-mandated operational license from DSHS upon its sale of the facility. Vista Inc. argues that it appears that Naidu has confused the corporation license issued by the Secretary of State under the Washington Business Corporation Act, Title 23B RCW, with the boarding home operator's license issued pursuant to chapter 18.20 RCW. This appears likely.
RCW 18.20.030(1) states that "no person shall operate or maintain a boarding home as defined in this chapter within this state without a license under this chapter." Chapter 18.20 RCW requires boarding home operators to obtain a license from DSHS. RCW 18.20.020; RCW 18.20.040.
Fourth, Naidu cites to evidence of her own observation of the facility name on a sign at the facility. However, there was no evidence that Naidu actually inquired as to the identity of the owner or operator of the facility. Instead, Naidu states in her own affidavit that it was merely her "impression" that the name on the facility sign was the same as the name of the facility's owner. Naidu never testified that she acquired information that Vista Inc. owned or operated the facility on the date that Overcash was injured. The evidence submitted by Naidu did not contradict the evidence submitted by Vista Inc. Therefore, it did not raise a material question of fact.
Naidu's counsel, at oral argument, continued to state that the signage at the facility had Vista Inc.'s name on it, despite the fact that Naidu's own affidavit indicates otherwise.
Naidu next argues that the trial court should have granted her CR 56(f) request for a continuance to develop further facts proving Vista Inc.'s ownership interest. A trial court may deny a motion for continuance of a summary judgment hearing "when (1) the requesting party does not have a good reason for the delay in obtaining the evidence, (2) the requesting party does not indicate what evidence would be established by further discovery, or (3) the new evidence would not raise a genuine issue of fact." Butler v. Joy, 116 Wn. App. 291, 299, 65 P.3d 671 (2003). Naidu claims that she needed a continuance of the hearing so that she could depose White and corporate representatives of Baltic in order to gather evidence demonstrating that Vista Inc. operated the facility and clarify any indemnification obligations resulting from the sale.
This contention fails for several reasons. First, Naidu caused the delay in deposing White by choosing to reschedule White's deposition. Thus, Vista Inc. was not at fault for the delay. In addition, and more importantly, Naidu did not set forth an explicit offer of proof describing the specifics of the evidence that she would be able to present to the court if the continuance was granted. This is a necessary prerequisite for obtaining a continuance pursuant to CR 56(f). Colwell v. Holy Family Hosp., 104 Wn. App. 606, 615, 15 P.3d 210 (2001). Given these circumstances, the trial court did not abuse its discretion in denying the motion to continue. Colwell, 104 Wn. App. at 615.
Vista In. presented competent evidence that it never owned the facility. Naidu did not present competent evidence to rebut this assertion. Thus, the trial court did not err by granting Vista Inc.'s motion for summary judgment. Motion for Reconsideration
Naidu next assigns error to the trial court's denial of her motion for reconsideration of the summary judgment order. Naidu argues that the trial court should have reconsidered its ruling because the evidence Niadu submitted in support of her motion for reconsideration created a genuine issue of material fact on the ownership question. This proof consisted of City of SeaTac business license renewal forms that purportedly demonstrated that White allowed Baltic to operate the facility under the authority of White's business license until April 2003. Vista Inc. did not object to the submission of this evidence in the trial court, but now argues that the forms are not properly supported by declaration or affidavit.
A ruling on a motion for reconsideration will be reviewed only for a manifest abuse of discretion. Jacob's Meadow, 139 Wn. App. at 752 n. 1. "A trial court abuses its discretion when its decision is manifestly unreasonable or based on untenable grounds." Jacob's Meadow, 139 Wn. App. at 752 n. 1. A party that believes proffered evidence is not properly before the trial court must move the trial court to strike such evidence from the record. Jacob's Meadow, 139 Wn. App. at 755. An unfavorable ruling from the trial court may be assigned error on appeal.
Jacob's Meadow, 139 Wn. App. at 755. If the trial court did not strike evidence based on the motion of a party, we will not strike such evidence on our own initiative. Jacob's Meadow, 139 Wn. App. at 756. It is our duty to review the trial court's evidentiary rulings; we do not ourselves make such rulings. Jacob's Meadow, 139 Wn. App. at 756. Similarly, it is our duty to review a trial court's ruling on summary judgment on the record actually before the trial court. Jacob's Meadow, 139 Wn. App. at 756.
Here, the trial court denied the motion for reconsideration after having heard Naidu's motion for reconsideration and to amend the complaint. Thus, because the business license renewal forms proffered by Naidu with her motion for reconsideration were considered by the trial court, and because the trial court made no ruling on the admissibility of this evidence to which any error has been assigned, the evidence constitutes part of the record before the trial court in ruling on the motion and is consequently before this court as well.
Naidu presented several city of SeaTac business license renewal forms for a business identified as "Des Moines Vista," located at the same address as the facility. Peggy Skagen signed one form on January 21, 2000. She identified herself as an administrator. Two other such forms were signed by Charles Vandeputte on January 9, 2001, and March 22, 2002, respectively. He identified himself as director of operations. All three forms listed Ginger White as the owner. The most recent form introduced by Naidu was signed on April 15, 2003, but bore an illegible signature from someone identified as the president. On that form, White's name is crossed out and replaced with two other names listed as owners. One of these names was Jerry Nowee, who is listed as the president. Nowhere on the 2003 form does the name "Baltic" appear. Skagen is listed as an emergency contact on all of the forms.
Naidu argues that the 2003 form proves that Jerry Nowee, the president of Baltic, did not apply for a business license in 2002 and that White allowed Baltic to operate under White's license until the 2003 renewal date. However, the forms do not suggest this. The forms merely show that White had a business license until at least March 22, 2002, and that different owners applied for a renewal license in 2003. Other than Naidu's unsupported claim, nothing in the record confirms that Nowee was Baltic's president. Nothing in the record confirms Naidu's assertion that Baltic waited until 2003 to apply for a business license. Moreover, even if Nowee is Baltic's president and even if Baltic waited until 2003 to apply for a business license, all that evidence suggests is that Baltic may have temporarily operated without a business license in its own name. These facts do not suggest an agreement whereby White allowed Baltic to operate under White's business license. More importantly, these forms confirm that the facility had a new owner who obtained a business license two and a half months before Overcash was injured. The fact that the new owner and a previous owner had the same emergency contact person suggests that the new owner may have retained Skagen as its employee. It does not suggest that Vista Inc. was ever the owner of the facility.
The trial court did not abuse its discretion in denying the motion for reconsideration.
Motion to Amend Complaint
Next, Naidu contends that the trial court abused its discretion by denying her motion to amend her complaint. Naidu moved for leave to amend her complaint after the trial court granted summary judgment dismissing Niadu's claims against Vista Inc. Naidu sought to add both a new theory of recovery and three new parties: White, the LLC, and Baltic. Naidu argues that it is not clear why the trial court denied the motion to amend, and argues that granting leave to amend the complaint would not have prejudiced the parties.
Motions to amend are governed by CR 15(a). A trial court's refusal to grant leave to amend a complaint will not be disturbed on appeal unless the decision was a manifest abuse of discretion. Haselwood v. Bremerton Ice Arena, Inc., 137 Wn. App. 872, 889, 155 P.3d 952 (2007). A trial court abuses its discretion when its decision rests on untenable grounds or is made for untenable reasons. Haselwood, 137 Wn. App. at 889. A trial court does not abuse its discretion by denying leave to amend a complaint without stating the reasons for the denial where the reasons for denying the motion are apparent in light of circumstances shown in the record. Donald B. Murphy Contractors, Inc. v. King County, 112 Wn. App. 192, 199, 49 P.3d 912 (2002).
"A party may amend the party's pleading once as a matter of course at any time before a responsive pleading is served, or, if the pleading is one to which no responsive pleading is permitted and the action has not been placed upon the trial calendar, the party may so amend it at any time within 20 days after it is served. Otherwise, a party may amend the party's pleading only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires." CR 15(a).
A moving party's failure to add additional defendants as a result of inexcusable neglect is a sufficient ground for denying a motion to add such defendants without a showing of specific prejudice by the nonmoving party. Haberman v. Wash. Pub. Power Supply Sys., 109 Wn.2d 107, 174, 744 P.2d 1032, 759 P.2d 254 (1987) (citing N. St. Ass'n v. City of Olympia, 96 Wn.2d 359, 368, 635 P.2d 721 (1981), overruled on other grounds by Sidis v. Brodie/Dohrmann, Inc., 117 Wn.2d 325, 815 P.2d 781 (1991)). "[I]nexcusable neglect exists when no reasons for the initial failure to name the party appears in the record." S. Hollywood Hills Citizens Ass'n v. King County, 101 Wn.2d 68, 78, 677 P.2d 114 (1984).
Naidu's reliance on Caruso v. Local 690, International Brotherhood of Team sters, 100 Wn.2d 343, 670 P.2d 240 (1983), is inapposite. It is true that our Supreme Court has held that undue delay on the part of the movant in proposing the amendment constitutes grounds to deny a motion to amend only "`where such delay works undue hardship or prejudice upon the opposing party.'" Caruso, 100 Wn.2d at 349 (quoting Appliance B uyers Credit C orp. v. Upton, 65 Wn.2d 793, 800, 399 P.2d 587 (1965)). However, the issue in Caruso was whether leave should be granted to add a new claim, not a new party. Caruso, 100 Wn.2d at 349. After Caruso, our Supreme Court clarified that the inexcusable neglect rule applies to amendments adding new parties; it does not apply to amendments adding new claims. Stansfi eld v. Douglas County, 146 Wn.2d 116, 122-23, 43 P.3d 498 (2002).
Here, Naidu, did not request to add White, the LLC or Baltic as parties until 10 days after the trial court granted summary judgment in favor of Vista Inc., thus resolving all claims at issue in the litigation. This was seven months after Naidu was put on notice that the LLC had sold the facility to Baltic prior to the date on which Overcash was injured. It is apparent that the trial court believed that Naidu's failure to conduct a reasonable inquiry as to the identify of the owner of the facility prior to filing her lawsuit and her failure to move to amend the complaint prior to the case being dismissed on summary judgment resulted from inexcusable neglect. Furthermore, as discussed above, adding White or the LLC as defendants was not warranted by the evidence presented by the parties to the trial court. Thus, the trial court did not abuse its discretion in denying the motion to amend the complaint.
It follows that if the trial court did not abuse its discretion in refusing to grant leave to amend Naidu's complaint by adding new parties, the trial court also did not abuse its discretion in refusing to grant leave to add a new theory of recovery against those parties.
CR 11 Sanctions
Naidu next asserts error in the trial court's award of attorney fees and costs to Vista Inc. pursuant to CR 11. An award of attorney fees and costs under CR 11 is discretionary with the trial court and the award will not be disturbed by us absent a finding that the trial court's discretion was exercised in a manifestly unreasonable manner or was based on untenable grounds or reasons. Skimming v. Boxer, 119 Wn. App. 748, 754, 82 P.3d 707 (2004).
CR 11 sanctions are warranted if an action (1) is not well grounded in fact, (2) is not warranted by existing law, and (3) the attorney signing the pleading has failed to conduct reasonable inquiry into the factual or legal basis of the action. Bryant v. Joseph Tree, Inc., 119 Wn.2d 210, 219-20, 829 P.2d 1099 (1992). The fact that the complaining party ultimately does not prevail is not dispositive. Roeber v. Dowty Aerospace Yakima, 116 Wn. App. 127, 142, 64 P.3d 691 (2003). "While CR 11 imposes no affirmative duty on an attorney to dismiss an action once it has become unreasonable to continue its prosecution, CR 11 does apply to all signed documents filed in the course of a lawsuit." Doe v. Spokane Inland Empire Blood Bank, 55 Wn. App. 106, 114, 780 P.2d 853 (1989). Even if a pleading satisfies CR 11 when it is filed, CR 11 sanctions are still available for subsequent documents filed in prosecution of that action if the action has proven in the meantime to be unjustified. Spokane Inland Empire, 55 Wn. App. at 114.
Accordingly, once reasonable inquiry would have revealed that Vista Inc. should have been voluntarily dismissed from this action, any subsequent pleading, memorandum, or motion in furtherance of the claims against Vista Inc. was unjustified. Nonetheless, even after Vista Inc. put Naidu on notice that she was suing the wrong legal entity, Naidu continued to file subsequent pleadings. In granting summary judgment and imposing CR 11 sanctions, the trial court explained that trade names have no legal significance and often continue with the business after it is sold. The trial judge went on to explain:
I am satisfied that it would have been easy for the plaintiff to check with the Department of Social and Health Services to see who operated [the facility], and the evidence that I have before me is a declaration that basically says two things: One, the named corporation never operated it; and, two, that the L.L.C. that did operate it sold it well before the incident in question and surrendered their required license to the Department of Social and Health Services.
In its written order granting dismissal of the claims and awarding Vista Inc. attorney fees and costs, the court concluded:
[I]f the Plaintiffs' attorney had made a reasonable inquiry as to the actual operator of Des Monies Vista Assisted Living, the residence of his client, he would have determined that the licensed operator on the date of the alleged negligent acts was not the named Defendant but another party. Accordingly, the Court has concluded that the claim is not grounded in fact or law and is baseless, and the attorney failed to make a reasonable inquiry into the facts to support the claim of his client.
Naidu argues that the award of attorney fees and costs was improper because the trial court did not enter formal findings of fact or conclusions of law in support of the award.
When a trial court imposes CR 11 sanctions, it must specify the sanctionable conduct in its order. "The court must make a finding that either the claim is not grounded in fact or law and the attorney or party failed to make a reasonable inquiry into the law or facts, or the paper was filed for an improper purpose."
Just Dirt, Inc. v. Knight Excavating, Inc., 138 Wn. App. 409, 417-18, 157 P.3d 431 (2007) (citations omitted) (quoting Biggs v. Vail, 124 Wn.2d 193, 201, 876 P.2d 448 (1994)). Even in the absence of formal findings of fact, the trial court may properly impose CR 11 sanctions, so long as a written order exists indicating the basis upon which the court imposed the sanctions. Madden v. Foley, 83 Wn. App. 385, 389, 922 P.2d 1364 (1996).
Here, the trial court specified the sanctionable conduct in its order awarding attorney fees and costs and expressly stated that "the claim is not grounded in fact or law and is baseless, and the attorney failed to make a reasonable inquiry into the facts to support the claim of his client." Thus, there was no error.
The trial court properly exercised its discretion by only awarding fees and costs incurred by Vista Inc. after Vista Inc. informed Naidu that the LLC had been the true owner of the facility and had sold the facility to Baltic, rather than from the start of the litigation.
Notice of Judgment
Naidu next argues that Vista Inc. failed to comply with CR 54(f)(2), thereby depriving her of an opportunity to object to the entry of judgment. CR 54(f)(2) provides that:
Notice of Presentation. No order or judgment shall be signed or entered until opposing counsel have been given 5 days' notice of presentation and served with a copy of the proposed order or judgment unless:
(A) Emergency. An emergency is shown to exist.
(B) Approval. Opposing counsel has approved in writing the entry of the proposed order or judgment or waived notice of presentation.
(C) After Verdict, etc. If presentation is made after entry of verdict or findings and while opposing counsel is in open court.
Failure to comply with the notice requirement in CR 54(f)(2) generally renders the trial court's entry of the judgment or order voidable. Burton v. Ascol, 105 Wn.2d 344, 352, 715 P.2d 110 (1986). See City of Seattle v. Sage, 11 Wn. App. 481, 482-83, 523 P.2d 942 (1974). However, lack of notice of presentation will not result in invalidity, when the complaining party shows no resulting prejudice. Burton, 105 Wn.2d at 352.
Any violation of CR 54(f)(2)'s notice requirement did not prejudice Naidu. The trial court granted her motion for reconsideration and gave her an opportunity to further brief the issues raised. Naidu suggests that the court confusingly entered an order affirming the original judgment. The record does not indicate any confusion by the trial court. The court entered an order affirming the original judgment after it considered Naidu's motion for reconsideration, Vista Inc.'s responsive memorandum, and Naidu's reply memorandum. Because Naidu had a reasonable opportunity to respond before the trial court finalized the entry of the judgment, she was not prejudiced by any departure from the notice requirements of CR 54(f)(2). Naidu's Personal Liability
Next, Naidu argues, without citation to authority, that she, personally, should not be listed as a judgment debtor because there was no evidence of any complicity by her personally in the wrongful litigation conduct. CR 11 provides that a party, the party's attorney, or both persons may be assessed litigation expenses, including reasonable attorney fees. Rhinehart v. Seattle Times Co., 51 Wn. App. 561, 581, 754 P.2d 1243 (1988). The court did not abuse its discretion by entering judgment on the award of attorney fees and costs against Naidu, her attorneys, and their respective law firms.
Naidu's argument that fees and costs cannot be awarded to Vista Inc. because it is a defunct company, or to White because she is not a named defendant, is similarly without merit.
Interest on Award
Naidu next claims that the trial court improperly determined the amount of the attorney fees and costs to be awarded. Naidu's assertion is that the court improperly applied a 12 percent interest rate to the award. Instead, Naidu argues, the applicable interest rate should have been the lower rate described in RCW 4.56.110(3), which deals with tort judgments. According to Naidu, because the underlying claims in this lawsuit sound in tort, the CR 11 award must be treated as if it is a tort judgment. We disagree.
Fees and costs were awarded pursuant to CR 11, not on a tort claim, and RCW 4.56.110(3) does not apply. The applicable section of the statute, RCW 4.56.110(4), provides that a judgment "shall bear interest from the date of entry at the maximum rate permitted under RCW 19.52.020," which states that "[a]ny rate of interest shall be legal so long as the rate of interest does not exceed . . . [t]welve percent per annum."
Calculation of Award
Naidu next asserts that the trial court did not specifically explain the basis for its calculation of the attorney fees award. Whether the amount of fees and costs awarded was reasonable is reviewed pursuant to an abuse of discretion standard. Ethridge v. Hwang, 105 Wn. App. 447, 460, 20 P.3d 958 (2001). A trial judge is given broad discretion in determining the reasonableness of an award. We will not disturb such an award unless it is demonstrated that the trial court manifestly abused its discretion. Ethridge, 105 Wn. App. at 460.
The trial court articulated how it determined the amount of the award in its order:
[T]he Court having considered the Motion, and having reviewed the Declaration of Thomas H. Grimm and attached itemization of fees and costs of Appendices A and B, and Exhibit C submitted in support thereof, and any opposition thereto, and the pleadings herein, and the Court finding that (1) the fees and costs incurred, as itemized in the Declaration of Thomas H. Grimm, are reasonable in relationship to the matter at hand; (2) the fees and costs were reasonably incurred in connection with the litigation to dismiss the Defendant Des Moines Vista Assisted Living, Inc. from this matter, and (3) the hourly rate charged is reasonable in accordance with the experience of counsel and the difficulty of the matter.
The trial court did not abuse its discretion in determining the amount to be awarded as attorney fees and costs.
Attorney Fees on Appeal
Vista Inc. requests an award of attorney fees on appeal. This court on its own initiative or on the motion of a party may sanction a party or counsel for filing a frivolous appeal. RAP 18.9(a). "An appeal is frivolous if it is so totally devoid of merit that there is no reasonable possibility of reversal." In re Marriage of Tomsovic, 118 Wn. App. 96, 109-10, 74 P.3d 692 (2003). This appeal was frivolous. We award attorney fees in favor of Vista Inc. and against Naidu and her attorneys. A commissioner of this court will determine the amount of the award.
Naidu objects to such an award arguing that Vista Inc. failed to comply with RAP 18.1(b), requiring a party to devote a section of its opening brief to its request for an award of attorney fees or expenses. While it is true that Vista Inc. did not devote an entire section of its briefing solely to its request for an award of attorney fees on appeal, it did make a written request in its briefing. Vista Inc. also sufficiently argued the factual and legal basis for such an award.
Affirmed.