David Monk, Cross-resp v. Richard Pierson, Respondent-cross App ( 2014 )

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DAVID MONK, an individual; and
WHITE RIVER FEED COMPANY, INC., No. 70126-6-1
a Washington corporation,
DIVISION ONE
Appellants/
Cross-Respondents,
v.
RICHARD PIERSON and JOAN
ASKEY, individually and as the marital
community comprised thereof;
and WILLIAMS & WILLIAMS, P.S.C., a UNPUBLISHED OPINION
Washington professional service
corporation, FILED: March 24, 2014
Respondents/
Cross-Appellants.
and
KINGMAN PEABOY PIERSON &
FITZHARRIS, P.S., a Washington
corporation, n/k/a KINGMAN RINGER
&HORNE, INC., P.S.
Defendants.
.)
Becker, J. — In this legal malpractice case that was dismissed on
summary judgment, David Monk sued Richard Pierson, the attorney who
represented him in an inverse condemnation case. Monk claims Pierson caused
him to incur an exorbitant bill and misadvised him that he would recover all of his
No. 70126-6-1/2
attorney fees and costs. The primary issue now is whether Monk's claims are
time barred. They are. We affirm.
On August 1, 2011, Monk sued Pierson for legal malpractice, violations of
the Washington Consumer Protection Act, chapter 19.86 RCW, and breach of
fiduciary duty. On March 1, 2013, the trial court granted Pierson's motion for
summary judgment dismissal on the ground that the statutes of limitations on
Monk's claims had expired. Monk appeals.
We review an order of summary judgment de novo, engaging in the same
inquiry as the trial court. Folsom v. Burger King, 135 Wash. 2d 658, 663, 958 P.2d
301 (1998). Summary judgment is proper if, viewing the facts and reasonable
inferences most favorably to the nonmoving party, no genuine issues of material
fact exist and the moving party is entitled to judgment as a matter of law. CR
56(c); Versuslaw, Inc. v. Stoel Rives, LLP. 127 Wash. App. 309, 319-20, 111 P.3d
866 (2005), review denied, 156 Wash. 2d 1008 (2006).
In Washington, the statute of limitations for a legal malpractice claim is
three years. The period begins to accrue when the plaintiff has a right to seek
relief. Cawdrev v. Hanson Baker Ludlow Drumheller, PS. 129 Wash. App. 810,
816, 120 P.3d 605 (2005), review denied. 157 Wash. 2d 1004 (2006). A consumer
protection action carries a four-year statute of limitations. RCW 19.86.120.
Monk filed suit more than four years after the events at issue in his complaint.
He claims the statutes of limitations were tolled by either the discovery rule or the
continuous representation rule.
No. 70126-6-1/3
Monk owns and operates the White River Feed Company, located in King
County between Auburn and Kent. White River processes bulk grain into animal
feed to deliver to local farms.
In 2001, the cities of Auburn and Kent decided to build a railroad overpass
near the southern tip of Monk's property. Monk protested that the support
structures for the overpass were encroaching on his property.
On February 27, 2002, Monk retained Pierson, an attorney then with
Kingman Peabody Pierson & Fitzharris PS in Seattle, to represent him against
the cities. The retainer agreement Monk signed required him to pay all costs and
expenses associated with Pierson's representation, including expert witness
fees, within 15 days of invoice. If Monk did not do so, he would be charged one
percent interest per month on any unpaid balance. Payment of Pierson's fees
was not contingent on the outcome of his representation.
In June 2002, Pierson filed suit on Monk's behalf against the cities for
inverse condemnation. Monk alleged not only the taking of land at the southern
end of Monk's property but also substantial impairment of access on the west
side. The cities obtained an order of partial summary judgment dismissing
Monk's claim for impairment of access. Monk obtained partial summary
judgment declaring the cities had taken at least 6.2 square feet of his property.
The only issue that went to trial was Monk's claim that the piece of property taken
was actually much more sizable.
No. 70126-6-1/4
Trial was bifurcated, and the first phase—the extent of the taking—was
tried to the bench in December 2003. The trial court agreed with Monk that the
taking was larger. The court established the property line based on Monk's
evidence. In January 2004, the cities offered Monk $150,000 in settlement as
just compensation for the taking. Monk did not accept.
In mid-March 2004, a jury in the second phase—damages for the taking—
awarded Monk $39,918 for the permanent taking of about 2,334 square feet of
his property, and $7,470 for a temporary construction easement, for a total of
$47,388 in damages. The court entered judgment on the verdict in April 2004,
including prejudgment interest and costs, for a total of $64,259.79.
As of March 2004, Pierson had billed Monk $212,663.00 for his
representation under the retainer agreement. Monk had paid Pierson $67,634.80
for fees and costs. Monk's last payment to Pierson was made on February 20,
2004.
In a case of inverse condemnation, the property owner can recover
reasonable attorney fees and reasonable expert witness fees, "but only ifthe
judgment awarded to the plaintiff as a result of trial exceeds by ten percent or
more the highest written offer of settlement submitted by the acquiring agency . .
. at least thirty days prior to trial." RCW 8.25.075(3). In April 2004, Monk moved
for an award of attorney fees in the amount of $212,684.50 and for expenses in
the amount of $25,293.10.
No. 70126-6-1/5
The trial court denied Monk's request for an award of attorney fees and
costs because the jury's verdict did not exceed the cities' settlement offer of
$150,000. The trial court adopted the cities' interpretation of "trial" under the fee
shifting statute as referring only to the proceeding in which the court renders a
judgment awarding compensation. By this interpretation, the cities' settlement
offer was "prior to trial" even though it was not submitted before the bench trial
that established the taking.
Pierson referred Monk to attorney John M. Groen of Groen Stephens &
Klinge LLC. On Monk's behalf, Groen filed an appeal. One issue was whether
the trial court had properly denied Monk's request for an award of fees. On that
issue, the appeal was successful. Monk v. City of Auburn, noted at 128 Wn.
App. 1066, 2005 WL 1870790 (2005). review denied, 157 Wash. 2d 1023 (2006).
This court found that the first part of Monk's bifurcated trial began in December
2003 with the bench trial establishing the property line. Since the cities had
made no offer of settlement before that date, they were "liable for the reasonable
attorney fees and reasonable expert witness fees incurred by Monk in connection
with the claim he tried." Monk v. City of Auburn. 2005 WL 1870790, at *4. We
remanded to the trial court to award Monk his reasonable attorney fees, both at
trial and on appeal, for the portion of the appeal related to RCW 8.25.075(3).
Also of significance to Monk's malpractice action against Pierson, our
decision affirmed the trial court's pretrial dismissal of Monk's claim of impairment
of access. The rest of our decision affirmed Pierson's separate appeal of CR 11
No. 70126-6-1/6
sanctions, which had been consolidated with Monk's case. Monk v. City of
Auburn. 2005 WL 1870790, at *11.
Our opinion was issued on August 8, 2005. The cities appealed.
On July 27, 2006, Monk sent Pierson a letter that he was unhappy with his
services and believed Pierson had overcharged him:
I believe that when you hire legal representation it is the
attorney's responsibility to know the laws that pertain to your case.
I feel that considering the amount I was going to be able to collect
in proving the property was mine vs. the fees I was charged is
grossly out of balance. I would like to resolve this issue in a fair
manner to both parties. Please contact me with any questions or
concerns.
Also in 2006, the Supreme Court denied review, and this court's opinion
became final.
On July 10, 2007, Monk, represented by Groen, moved on remand for an
award of attorney fees and costs per our opinion. According to the motion, Monk
had incurred $697,179.75 in fees and costs during the litigation. It bears
repeating that Monk had won at trial only $47,388.00, for a judgment totaling
$64,259.79 once prejudgment interest and statutory costs were added. The total
fees and costs Monk incurred were more than 10 times that amount.
The motion sought from the cities the reduced amount of $504,849.76 of
which $156,104.37 was for Pierson's attorney fees; the rest included the fees of
Pierson's associated counsel and various experts, as well as Groen's fees on
appeal. Groen declared that he had carefully scrutinized billing records to ensure
that the request included only time and costs incurred in connection with the
No. 70126-6-1/7
inverse condemnation claim, and that it excluded time and costs incurred in
connection with Monk's unsuccessful claims.
On September 22, 2008, the trial court issued a 109-page memorandum
opinion awarding attorney fees and costs. In evaluating the reasonableness of
fees and costs incurred by Monk, the court took into consideration the failure of
Monk and Pierson to engage in realistic settlement negotiations:
Although this court cannot stand in David Monk's shoes or
read his mind, the court surmises that this litigation has been a
nightmare for David Monk. On the one hand, he has been proven
correct: without first paying just compensation, the Cities
encroached on the border of Monk's property constructing the
South 277th Street railroad overpass near the intersection of 78th
Avenue South in Auburn, Washington. On the other hand, the jury
awarded him just $47,388 and now, nearly eight years after the
overpass was built, his attorneys have handed him a bill for
$488,539.09 in fees and costs which they expect the Cities to pay
pursuant to RCW 8.25.075(3). Moreover, his attorneys say that
Monk is responsible for an additional $243,852.40 in fees and costs
for which they are not seeking payment from the Cities because
they are billings related to unsuccessful claims or claims for which
fees cannot be recovered. ... In evaluating the reasonableness of
the fees and costs incurred in this matter, the court reasonably may
look to whether Monk made any realistic effort to settle this case as
contemplated by RCW 8.25.075(3). He did not.
Monk either had a completely unrealistic view of the value of
his case,13 or he received bad legal advice about what reasonably
might be achieved through litigation, or both.. . .
What was Monk to make of all of this? Presumably he had
no idea that his attorney was engaging in meritless litigation. The
effect of his attorney's effort, however, was to doom from the outset
any settlement on the merits of his inverse condemnation claim. It
is the court's judgment that Monk was incurring attorney, expert
witness fees and costs so substantial that, from his point of view,
settlement was all but impossible.
13At trial, Monk told the jury he estimated just compensation to
be one million dollars, yet his appraiser told the jury that Monk was
entitled to $61,148.
No. 70126-6-1/8
Applying a lodestar analysis, the court awarded Monk $253,519.40 in attorney
fees and costs, approximately one-half of what his motion requested. The cities
paid the award into the court registry.
In October 2008, Pierson filed an attorney's lien.
In December 2008, the court granted Monk's motion to disburse all but
$65,880 to Monk and his attorneys other than Pierson.
In January 2009, Pierson moved to enforce his lien against the $65,880
that remained in the court's registry. Monk hired attorney Kristina Driessen to
defend him against Pierson's lien.
In August 2009, the trial court concluded that Pierson had a valid lien in
the amount of $33,883.85 for work done up to April 1, 2004, with one percent
interest per month on the unpaid balance under the retainer agreement, for a
total of $55,568.96. The court enforced Pierson's lien in that amount.
In 2011, Monk sued Driessen for legal malpractice, arguing that
Driessen's failure to assert malpractice and consumer protection claims against
Pierson in the lien proceedings caused Monk to lose the opportunity to pursue
those claims. The trial court disagreed and granted attorney Driessen's motion
for summary judgment. This court affirmed in an unpublished opinion. Monk v.
Driessen, noted at 171 Wash. App. 1009, 2012 WL 4857208, at *3.
Monk filed the present malpractice action against Pierson in August 2011.
Monk alleged that Pierson unreasonably thwarted settlement negotiations with
the cities, causing him to lose out on the cities' settlement offer of $150,000. He
8
No. 70126-6-1/9
alleged that Pierson charged extraordinary attorney fees to pursue protracted,
vexatious, and unnecessary litigation against the cities, all the while giving
assurances that Monk would be able to recover from the cities his attorney fees
and expenses for expert witnesses.
The trial court granted Pierson's motion for summary judgment, ruling that
Monk's claims were time barred and neither the discovery rule nor the rule of
continuous representation tolled the statute of limitations. This ruling is now
before us on Monk's appeal.
"It is true that when a plaintiff discovered a cause of action, or whether a
plaintiff exercised reasonable diligence to discover the action, is generally a
question of fact. But if reasonable minds could not differ, it is a question of law."
Cawdrev. 129 Wash. App. at 818.
Under the discovery rule, the three-year statute of limitations for legal
malpractice begins to run as soon as the client discovers, or in the exercise of
reasonable diligence should have discovered, the facts which give rise to his
cause of action. Cawdrev. 129 Wash. App. at 816, quoting Janicki Logging &
Constr. Co. v. Schwabe. Williamson & Wvatt. PC. 109 Wash. App. 655, 659, 37
P.3d 309 (2001). review denied. 146 Wash. 2d 1019 (2002). The discovery rule
also applies to the four-year statute of limitations under the Consumer Protection
Act. Maverv. Sto Indus.. Inc.. 123 Wash. App. 443, 463, 98 P.3d 116 (2004),
affirmed io part, reversed in eart on other grounds. 156 Wash. 2d 677, 132 P.3d 115
(2006).
No. 70126-6-1/10
In order for the limitations period to begin, a plaintiff need only be aware of
the facts underlying his claim and supporting each essential element of the cause
of action. Cawdrev. 129 Wash. App. at 817. Because Monk filed this lawsuit
against Pierson in August 2011, he had to show that he was unaware of the facts
supporting his claims until at least August 2008 (for malpractice) or August 2007
(for the consumer protection action). Each of these claims requires proof that the
attorney's act caused injury. Janicki Logging. 109 Wash. App. at 659-60; Murphev
v. Grass. 164 Wash. App. 584, 594, 267 P.3d 376 (2011) (malpractice), review
denied. 173 Wash. 2d 1022 (2012); Mayer. 123 Wash. App. at 458 (consumer
protection). Monk contends he did not discover he was injured by Pierson's
actions until September 2008, when the trial court determined the amount of
attorney fees and costs the cities were required to pay was less than half of the
fees and costs Monk incurred in the litigation. Until then, Monk argues, he could
not have known whether the trial court "was going to award all fees and costs,
some fees and costs or no fees and costs."
The trial court found that Monk possessed "the knowledge of the damage"
caused by Pierson's actions well before August 2007:
In looking at the knowledge of the damage, I concur that we don't
have to wait for Judge White's opinion [September 2008] with
regard to the full extent of what the value of the damages were for
the starting point. It could even be said that it was much earlier
than the Court of Appeals' opinion [August 2005], but certainly that
ruling was definitive with regard to the fact that there was damage,
and that happened on August 8th of 2005.
10
No. 70126-6-1/11
The trial court's reasoning is sound. Monk's letter to Pierson on July 27,
2006, shows that he was aware Pierson had misinformed him that he would be
able to recover all attorney fees and costs. He also knew Pierson had been
running up fees "grossly out of balance" with what Monk "was going to be able to
collect." The discovery rule does not require that all of a plaintiffs damages be
fixed before the cause of action accrues. Streifel v. Hansch. 40 Wash. App. 233,
236, 698 P.2d 570 (1985). By the time this court's opinion in the first appeal was
issued in August 2005, Monk knew for certain that he had lost his impairment of
access claim and would recover fees only on his inverse condemnation claim,
and that the fees he would recover would be limited to reasonable fees. By filing
this suit in August 2011, Monk missed the statute of limitations for a malpractice
claim by at least three years and for a consumer protection claim by at least two
years.
Monk also contends that the continuous representation rule tolled the
limitations period. This argument fails. The continuous representation rule tolls
the statute of limitations until the end of an attorney's representation of a client "in
the same matter in which the alleged malpractice occurred." Janicki Logging.
109 Wash. App. at 661. It avoids disruption of the attorney-client relationship and
gives attorneys the chance to remedy mistakes before being sued. Janicki. 109
Wash. App. at 662.
Monk argues that Pierson never advised him he was terminating the
attorney-client relationship or formally withdrew, so he still considered Pierson to
11
No. 70126-6-1/12
be his attorney. Monk contends that the first indication he had that Pierson
ceased representing him came in October 2008 when Pierson filed his attorney
lien. The trial court found these arguments unconvincing:
With regard to the continuous representation rule, .. . even
in looking at all of the evidence most favorably to the nonmoving
party, the only thing that I have that contradicts the notion that this
relationship no longer existed is the statement by the plaintiff that
he believed that he was still being represented by the defendant.
. . . The idea that there wasn't a withdrawal, yeah, that would
have made things a lot easier if there had been one, and certainly,
you know, we have rules which speak to that, but that isn't the
definitive piece of evidence here either.
When I look at the evidence that was presented with regard
to the relationship between the plaintiff and the defendant, there is
no objective evidence that a reasonable person would have the
belief that the defendant was still representing the plaintiff.
Again, we agree with the trial court's analysis. The existence of an
attorney-client relationship turns largely on the client's subjective belief that it
exists, but the client's subjective belief does not control the issue unless it is
reasonably formed based on the attending circumstances, including the
attorney's words or actions. Bohn v. Cody. 119 Wash. 2d 357, 363, 832 P.2d 71
(1992). Monk did not present a genuine issue of material fact regarding
Pierson's continuous representation. Monk had no reasonable belief based on
the attending circumstances—as opposed to wishful thinking—that Pierson was
going to remedy his overbilling, for example, by writing off the balance due. And
even if Monk could prove a continuous relationship with Pierson, it would not
suffice because the rule requires proof that Pierson was continuing to represent
him in the inverse condemnation matter. See Janicki. 109 Wash. App. at 661 n.1.
12
No. 70126-6-1/13
After Pierson referred the appeal to Groen, there is no evidence that Pierson
worked on the appeal or on the motion for attorney fees and costs on remand.
All Pierson appears to have done after April 2004 is to hand over his billing
documentation, which Groen then had the thankless task of attempting to justify.
Because Monk's claims were untimely, we do not reach Pierson's
argument on cross appeal that collateral estoppel barred the claims.
Affirmed.
WE CONCUR:
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