AllianceOne Receivables Mgmt., Inc. v. Lewis ( 2014 )

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IN THE SUPREME COURT OF THE STATE OF WASHINGTON
ALLIANCEONE RECEIVABLES )
MANAGEMENT, INC., ) No. 87445-0
)
Respondent, )
)
v. ) EnBanc
)
WILLIAM CARL LEWIS, JR., and )
JANE DOE, and MARITAL )
COMMUNITY, )
)
Appellants. ) Filed MAY 0 8 2014
_______________________ )
FAIRHURST, J.-AllianceOne Receivables Management Inc. instituted a
collections action against William Carl Lewis Jr. and then voluntarily dismissed it.
Lewis claims that he is entitled to attorney fees as the "prevailing party" under RCW
4.84.250 and .270 since under RCW 4.84.270 a defendant is a prevailing party when
the plaintiff"recovers nothing." The district court denied Lewis' fee request, holding
that there is no prevailing party for the purposes of an award of attorney fees when
the plaintiff voluntarily dismisses the action. We affirm and hold that there must be
a final judgment before attorney fees can be made available to the prevailing party
under RCW 4.84.250 and .270. When a defendant requests fees under these statutes,
AllianceOne Receivables Mgmt., Inc. v. Lewis, No. 87445-0
the court should apply a three-factor test: ( 1) the damages sought must be equal to
or less than $10,000, (2) there must be an entry of judgment, and (3) the defendant
must be deemed the prevailing party. Here, there was no judgment because
AllianceOne voluntarily dismissed its claim against Lewis. Without a judgment,
there is no prevailing party. Lewis was not entitled to attorney fees upon dismissal
at the district court, nor is he entitled to an award of attorney fees on appeal.
I. FACTUAL AND PROCEDURAL HISTORY
The facts in this case are generally not disputed. AllianceOne filed a collection
suit against Lewis for three low dollar claims totaling $550.77, plus attorney fees.
AllianceOne voluntarily dismissed two of the three claims, leaving one remaining
claim totaling $272.67, which Lewis claimed he had already paid in full. After
further proceedings, AllianceOne filed a motion for voluntary dismissal of the
remaining claim without prejudice and without costs to either party. Lewis did not
object to the dismissal of the claim but, since he had incurred attorney fees in the
matter, he objected to dismissing the claim without costs. Lewis argued that he was
the "prevailing party" under RCW 4.84.250 and .270 because AllianceOne
recovered nothing in the suit.
The district court initially denied Lewis' request for attorney fees, relying on
our decision in Wachovia SEA Lending, Inc. v. Kraft, 165 Wn.2d 481,494, 200 P.3d
683 (2009), where we held that a final judgment must be entered for a defendant to
2
AllianceOne Receivables Mgmt., Inc. v. Lewis, No. 87445-0
be a prevailing party under RCW 4.84.330. Upon reconsideration, the district court
affirmed the denial on different grounds, noting that since Wachovia interpreted a
different statute than the one at issue in this case, it was not controlling. The district
court noted that there is a split of authority in the Court of Appeals on this issue but
it chose to follow Cork Insulation Sales Co. v. Torgeson, 54 Wn. App 702, 775 P .2d
970 (1989), and Beclanan v. Wilcox, 96 Wn. App. 355, 979 P.2d 890 (1999) from
Divisions Two and Three. The district court held that "a CRLJ 41 voluntary
dismissal does not effectuate costs and attorney fees." Second Am. Designation of
Clerk's Papers (Decision on Recons. Mot. (May 4, 2012) at 4). In light of the split
authority, we granted Lewis' motion for direct review. We affirm the district court.
II. ISSUES
1. Whether a defendant can be a prevailing party under RCW 4.84.250
and .270 when a plaintiff voluntarily dismisses the case.
2. Whether either party is entitled to attorney fees on appeal under RCW
4.84.290.
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AllianceOne Receivables Mgmt., Inc. v. Lewis, No. 87445-0
III. ANALYSIS
A. "Prevailing party" under RCW 4.84.250 and .270
The meaning of a statute is a question of law reviewed de novo. 1 State v.
Breazeale, 144 Wn.2d 829, 837, 31 P.3d 1155 (2001); State v. J.M, 144 Wn.2d 472,
480, 28 P.3d 720 (2001). The court's objective is to ascertain and carry out the
legislature's intent. J.M, 144 Wn.2d at 480. The starting point is always the statute's
plain language, which may be discerned '"from all that the Legislature has said in
the statute and related statutes which disclose legislative intent about the provision
in question."' State v. J.P., 149 Wn.2d 444,450,69 P.3d 318 (2003) (quotingDep't
of Ecology v. Campbell & Gwinn, LLC, 146 Wn.2d 1, 11, 43 P.3d 4 (2002)). The
court considers a statute within the context of the entire statutory scheme to
determine the plain meaning. Williams v. Tilaye, 174 Wn.2d 57, 63, 272 P.3d 235(2012) (citing Campbell & Gwinn, 146 Wn.2d at 11-12); see also ITT Rayonier, Inc.
v. Dalman, 122 Wn.2d 801, 807, 863 P.2d 64 (1993) (A term in a regulation should
not be read in isolation but, rather, within the context of the regulatory and statutory
1
Lewis argues that the district court erred in failing to enter findings of fact and conclusions
oflaw with respect to its order denying fees, citing Mahler v. Szucs, 135 Wn.2d 398, 957 P.2d 632,
966 P.2d 305 (1998). But Mahler is about appellate review of a trial court's fee award decision,
not all fee decisions. !d. at 435. It requires findings of fact and conclusions of law to establish "an
adequate record on review to support a fee award." !d. In other words, Mahler affects decisions in
which attorney fees were granted, not denied. Here, we are reviewing whether the district court
properly determined that Lewis is not entitled to attorney fees as a "prevailing party" within the
meaning ofRCW 4.84.250 and .270.
4
AllianceOne Receivables Mgmt., Inc. v. Lewis, No. 87445-0
scheme as a whole; statutory provisions must be read in their entirety and construed
together, not piecemeal.).
1. Attorney fees statutes in small claims
As a general rule in Washington, each party must bear its own attorney fees
in civil actions. Cosmopolitan Eng'g Grp., Inc. v. Ondeo Degremont, Inc., 159
Wn.2d 292, 296, 149 P.3d 666 (2006). However, the legislature has carved out
certain exceptions to this general rule. Williams, 174 Wn.2d at 63. "In the context of
civil actions, the question of costs and attorney fees are dealt with in a series of
provisions under chapter 4.84 RCW." Wachovia, 165 Wn.2d at 488. These
provisions generally award attorney fees to the prevailing party in an action, but the
term "prevailing party" is not defined in the same manner in every statute. !d.
Whether an individual is a prevailing party after voluntary dismissal turns on
whether the claimant meets the conditions of the specific statute that authorizes the
fees. Beckman, 96 Wn. App. at 362.
Courts have long approached RCW 4.84.250-.300 as a statutory scheme
where each statute is given force in the context of related rules. See, e.g., Davy v.
Moss, 19 Wn. App. 32, 33-34, 573 P.2d 826 (1978) (citing four provisions in their
entirety to clarify the meaning of"action for damages" in chapter 4.84 RCW); Valley
v. Hand, 38 Wn. App. 170, 684 P.2d 1341 (1984) (reading four provisions to
determine prevailing party on appeal), overruled on other grounds by Williams, 174
5
AllianceOne Receivables Mgmt., Inc. v. Lewis, No. 87445-0
Wn.2d 57; Beckmann v. Spokane Transit Auth., 107 Wn.2d 785,733 P.2d 960 (1987)
(reading three statutory provisions to determine whether pleading notice is required);
Hertz v. Riebe, 86 Wn. App. 102, 107, 936 P.2d 24 (1997) (reading RCW 4.84.290
"in the broader context of the statutory scheme"); Hanson v. Estell, 100 Wn. App.
281, 997 P .2d 426 (2000) (reading three statutory provisions to clarify notification
rule for settlement offers); LRS Elec. Controls, Inc. v. Hamre Constr., Inc., 153
Wn.2d 731, 107 P.3d 721 (2005) (reading five statutory provisions to award attorney
fees on appeal to defendant after summary judgment); Williams, 17 4 Wn.2d at 61-
62 (reading four statutory provisions in arbitration case).
RCW 4.84.250 is the starting point for determining which party, if any, is
entitled to attorney fees in small claim actions. The prevailing party in a small claims
•
action may request attorney fees "[n]otwithstanding any other provisions of chapter
4.84 RCW and RCW 12.20.060." RCW 4.84.250. RCW 4.84.260 states that a
plaintiff is the "prevailing party" and eligible for attorney fees when "the recovery,
exclusive of costs, is as much as or more than the amount offered in settlement by
the plaintiff." (Emphasis added.) Under RCW 4.84.270, a defendant receives fees
"if the plaintiff ... recovers nothing, or if the recovery, exclusive of costs, is the
same or less than the amount offered in settlement by the defendant." (Emphasis
added.) Under RCW 4.84.280, settlement offers must be made at least 10 days before
a trial begins and may not be conveyed to the judge until after final judgment is
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AllianceOne Receivables Mgmt., Inc. v. Lewis, No. 87445-0
rendered. Only after the judgment can a court assess whether the plaintiff or
defendant meets the definition of a "prevailing party" by examining a recovery after
judgment and comparing it to settlement offers. 2 This contextual interpretation
presents a plain language reading of the complete statutory scheme and is a logical
analysis of a statute designed to promote settlement and avoid trials.
2. Plain language reading of"recovers nothing"
The meaning of the phrase "recovers nothing" is critical to interpreting these
statutes. "In the absence of a specific statutory definition, words in a statute are given
their common law or ordinary meaning." State v. Chester, 133 Wn.2d 15, 22, 940
P.2d 1374 (1997). To determine the plain meaning of a term undefined by statute,
the court first looks at the dictionary definition. State v. Kintz, 169 Wn.2d 537, 547,
238 P.3d 470 (2010). Black's Law Dictionary defines "recover" in full as:
1. To get back or regain in full or in equivalence . 2. To obtain by a
judgment or other legal process . 3. To obtain (a judgment) in one's favor . 4. To obtain
damages or other relief; to succeed in a lawsuit or other legal
2
A defendant is not required to make an offer of settlement to qualify for an attorney fees
award under RCW 4.84.250-.300. RCW 4.84.270 provides that "the defendant can be the
prevailing party if either the plaintiff recovers nothing or the defendant makes an offer 10 days or
more before trial and the plaintiff recovers as much or less than that offer." Williams, 174 Wn.2d
at 61-62 (emphasis added). This statute is disjunctive; an offer of settlement is not mandatory for
a defendant. Further, this reading makes logical sense because it would be unfair to require a
defendant to make an offer of settlement to recover fees when, as here, the defendant contends that
he does not owe anything to the plaintiff.
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AllianceOne Receivables Mgmt., Inc. v. Lewis, No. 87445-0
proceeding .
BLACK'S LAW DICTIONARY 1389 (9th ed. 2009). The entirety of this definition
indicates that "recover" is more often used in connection with a final judgment.
Statutory language must be interpreted in context, not in isolation. When
determining the plain meaning of a statute, the court considers the statute within the
entire scheme of other statutes, presuming the legislature enacts legislation in light
of existing law. Williams, 174 Wn.2d at 63; Campbell & Gwinn, 146 Wn.2d at 11.
The court then considers the definition of the term in the context of the statutory
scheme to determine the plain meaning as intended by the legislature. Reading the·
provisions ofRCW 4.84.250-.300 in sequence, it is clear that it is necessary to define
"recover" or "recovery" in conjunction with a final judgment. Without an entry of
judgment by the court, there is no recovery and there can be no prevailing party
under RCW 4.84.250 and .270.
This definition of "recover" is supported by the legislative intent of the
statutes. These statutes encourage and provide for a mechanism for individuals to
seek payment on unresolved claims. Northside Auto Serv., Inc. v. Consumers United
Ins. Co., 25 Wn. App. 486, 492, 607 P.2d 890 (1980). If a potential plaintiff knew
he or she would have to pay the defendant's attorney fees in the event he or she
decided to dismiss the action instead of taking it to trial, he or she would be much
more hesitant to pursue these claims in the first place, negating this goal of resolution
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AllianceOne Receivables Mgmt., Inc. v. Lewis, No. 87445-0
of legitimate claims. The small claims statutes are also intended to encourage
settlement and avoid the expense of trial. Beckmann, 107 Wn.2d at 790. A definition
of "recover" unconnected to a final judgment would not get the parties to the
bargaining table; it would encourage plaintiffs to pursue trial rather than risk a court
order to pay attorney fees by voluntarily dismissing their claims. Finally, CR 11
allows a judge to impose sanctions on any party that files a baseless claim,
addressing any concern that a plaintiff may bring meritless claims against a
defendant just to force that individual to incur expenses. And if the claim was not
frivolous, the adversarial system is designed to allow a plaintiff the discretion to file
a meritorious claim, conduct discovery, and then decide if the claim is worth taking
to trial.
3. Determine prevailing party under Cork's three-factor test
Despite this clear contextual interpretation of the statutory meaning of the
phrase, the Court of Appeals divisions have reached different conclusions on
whether RCW 4.84.250 authorizes an award of fees after a voluntary dismissaP In
Allahyari, Division One found that voluntary dismissal was sufficient to trigger
RCW 4.84.250 and entitle the defendant to attorney fees as the prevailing party.
3
Division Two of the Court of Appeals has not directly addressed the issue, but it has cited
Cork approvingly in dictum in Beckman, 96 Wn. App. 355 when weighing a request for attorney
fees under a different statute. Division Two noted that "until after entry of judgment, a pretrial
voluntary dismissal makes the attorney fee provision inapplicable" under RCW 4.84.050 and .070.
Id. at 361.
9
AllianceOne Receivables Mgmt., Inc. v. Lewis, No. 87445-0
Allahyari v. Carter Subaru, 78 Wn. App. 518, 524, 897 P.2d 413 (1995), abrogated
by Wachovia, 165 Wn.2d at 481. The Allahyari court looked at cases interpreting
other statutes in chapter 4.84 RCW that considered a defendant a prevailing party
after a voluntary dismissal and said it found no compelling reason not to interpret
RCW 4.84.250 the same way. Allahyari, 78 Wn. App. at 523. But reliance on
Allahyari is problematic because the court did not utilize the required contextual
approach to the statutory scheme. Id. Instead, it simply focused on the phrase
"recovers nothing" without considering its meaning in light of the other statutes to
decide when there would be a prevailing party under the statute. Id. Further,
Allahyari was abrogated by Wachovia. Although the legal question in Wachovia
involved a different statute, this court clarified that there is no default rule that
permits the award of attorney fees following voluntary dismissal of a claim under
CR 41(a)(1)(B). Wachovia, 165 Wn.2d at 490-91. The court said, "[W]here neither
party prevails with a final judgment, neither party is entitled to attorney fees." Id. at
492. Since we nullified Allahyari's fundamental rationale for equating voluntary
dismissal of a claim with a defendant's entitlement to attorney fees in Wachovia,
Allahyari's logic and analysis is seriously undermined.
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AllianceOne Receivables Mgmt., Inc. v. Lewis, No. 87445-0
Division Three held in Cork that a defendant was not entitled to attorney fees
under RCW 4.84.250 following a plaintiffs voluntary dismissal. 54 Wn. App. 702. 4
After the plaintiff voluntarily dismissed its suit, the defendant requested attorney
fees under RCW 4.84.250, saying the plaintiffs voluntary dismissal was equivalent
to no recovery. Id. at 704. Division Three applied a three-factor test based on "[a]
review of the statute and its related provisions." Id. at 706. Before the statute could
be triggered, the defendant had to show that ( 1) the damages sought were equal to
or less than $10,000, (2) he was deemed the prevailing party, and (3) there was an
entry of judgment. Id. Since the amount pleaded was $2,625.38, defendant Shane
Torgeson met the first factor. I d. Under the second factor, Torgeson may have tried
to argue that he was the prevailing party given Cork's voluntary dismissal of the suit
but the court did not accept the dismissal as proof of judgment. !d. at 705. The court
held that "a voluntary nonsuit does not result in an adjudication on the merits and no
judgment is entered." Id. at 706. Since one of the factors was not met, the court
denied any attorney fees for the defendant.
4
In Cork, the defendant offered the plaintiff a settlement of one dollar, and argued that since
the plaintiff recovered less than one dollar (nothing), it was the prevailing party. 54 Wn. App. at
705. Allahyari distinguished itself from Cork based on the defendant in Cork's reliance on this
argument that he had made an offer of settlement, not on the fact of the nonsuit alone. Allahyari,
78 Wn. App. at 524. While this argument has some merit, Cork discussed the concept of the
prevailing party in RCW 4.84.250 in total. In order to resolve the fundamental issue of what makes
one a prevailing party, the court had to discuss that concept in its entirety, including a discussion
of whether a voluntary dismissal made a defendant a prevailing party in the first place.
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AllianceOne Receivables Mgmt., Inc. v. Lewis, No. 87445-0
Unlike the Allahyari court, which focused only on "recovers nothing," the
Cork court employed a contextual approach for resolution of this issue. Cork, 54
Wn. App. at 706. Further, the facts and legal arguments here are more similar to
those in Cork than to those in Allahyari. Lewis, like Torgeson, meets the first
requirement of RCW 4.84.250 since the claim was for only $550.77. Lewis, like
Torgeson, also argued the plaintiff recovered nothing under RCW 4.84.270 when it
dismissed the claim. But, just like in Cork, the district court here also rejected this
argument, finding that no judgment was entered in a voluntary dismissal. "[T]hus,
the statute was not triggered and the attorney fees and costs sought" by Lewis were
properly denied. Id.
We adopt Cork's three-part test for determining whether a party is entitled to
attorney fees. A voluntary dismissal does not result in an entry of judgment, so the
third factor is not satisfied in that situation. Wachovia, 165 Wn.2d at 492 ("[A]
'voluntary dismissal' is not a final judgment. A voluntary dismissal leaves the parties
as if the action had never been brought."). And as discussed above, without an entry
of judgment, there can be no "prevailing party" under RCW 4.84.250 and .270, so
the second factor would also not be satisfied if the plaintiff voluntarily dismisses the
case.
Lewis fails two of the three requirements necessary to be deemed the
prevailing party. He undisputedly meets the first requirement, but all three are
12
AllianceOne Receivables Mgmt., Inc. v. Lewis, No. 87445-0
necessary for an award of attorney fees. We affirm the district court's denial of
attorney fees to Lewis upon the voluntary dismissal because he cannot be deemed a
prevailing party under the statutory small claims attorney fees provisions.
B. Attorney fees on appeal
Both parties have requested attorney fees for this appeal under RCW 4.84.290,
which provides in part:
[I]f the prevailing party on appeal would be entitled to attorneys' fees
under the provisions of RCW 4.84.250, the court deciding the appeal
shall allow to the prevailing party such additional amount as the court
shall adjudge reasonable as attorneys' fees for the appeal.
Given our decision that neither party is a prevailing party under RCW 4.84.250 after
a plaintiff voluntarily dismisses the suit, neither party is entitled to the attorney fees
requested under this statute. Cork, 54 Wn. App. at 707. 5
IV. CONCLUSION
We affirm the district court's denial of attorney fees and costs to Lewis
because he cannot be deemed a prevailing party under the statutory small claims
attorney fees provisions since AllianceOne voluntarily dismissed its case. We also
deny both parties' request for fees for the appeal.
5
In addition to requesting attorney fees under RCW 4.84.290, Lewis requests costs
(including attorney fees) under RCW 12.20.010 and .060. We find a similar problem with this
request as with the RCW 4.84.290 request. Without a final judgment or prevailing party (both of
which are absent in the case of a voluntary dismissal), no award of attorney fees are mandatory
under this statutory scheme. In his discretion the judge decided not to award fees or costs.
Consequently, we deny this request for attorney fees under RCW 12.20.010 and .060 as well.
13
AllianceOne Receivables Mgmt., Inc. v. Lewis, No. 87445-0
WE CONCUR:
I 7
14
AllianceOne Receivables Mgmt., Inc. v. Lewis
Dissent by C. Johnson, J.
No. 87445-0
C. JOHNSON, J. ( dissenting)-This case asks us to decide whether the
defendant in a district court civil case is entitled to attorney fees as the "prevailing
party" under RCW 4.84.250, when the plaintiff voluntarily dismisses the action.
RCW 4.84.270 defines the defendant as the prevailing party if the plaintiff
"recovers nothing." The statute requires only two conditions: an "action" where the
plaintiff"recovers nothing." That language needs little interpretation. The
majority, though, reads into the statute a requirement that there must be a final
judgment before attorney fees can be made available to the prevailing party and
concludes, based on this statutory rewrite, that a defendant is not a prevailing party
and is not entitled to fees when a plaintiff voluntarily dismisses the case. I
disagree. Here, the plaintiff voluntarily dismissed the case and "recover[ ed]
nothing" from the lawsuit. The statute simply does not require what the majority
claims. I would reverse the district court's denial of attorney fees.
AllianceOne Receivables Mgmt., Inc. v. Lewis, No. 87445-0
(C. Johnson, J., dissenting)
AllianceOne Receivables Management Inc. filed a collections action against
William Lewis in district court for $550.77, but then filed a motion under CRLJ
41(a)(1)(ii) 1 to voluntarily dismiss its claims without prejudice and without costs.
Lewis argued that he was entitled to attorney fees as the "prevailing party" under
RCW 4.84.250 and .270.
This case centers on the meaning of primarily two words ofRCW 4.84.270:
"recovers nothing." RCW 4.84.250 authorizes fees to the prevailing party in suits
where the amount pleaded is equal to or less than $10,000. 2 Under RCW 4.84.270,
the defendant is the prevailing party if the plaintiff "recovers nothing, or if the
recovery, exclusive of costs, is the same or less than the amount offered in
settlement by the defendant." The meaning ofRCW 4.84.250 and .270 is a
question of law reviewed de novo. Where the meaning of a statute is plain on its
face, it "is not subject to judicial construction." State v. JM, 144 Wn.2d 472, 480,
28 P.3d 720 (2001).
1
CRLJ 41(a)(l)(ii) provides that dismissal is mandatory "[u]pon motion of the plaintiff at
any time before plaintiff rests at the conclusion of his opening case."
2
RCW 4.84.250 provides, "Notwithstanding any other provisions of chapter 4.84 RCW
and RCW 12.20.060, in any action for damages where the amount pleaded by the prevailing
party as hereinafter defined, exclusive of costs, is seven thousand five hundred dollars or less,
there shall be taxed and allowed to the prevailing party as a part of the costs of the action a
reasonable amount to be fixed by the court as attorneys' fees. After July 1, 1985, the maximum
amount of the pleading under this section shall be ten thousand dollars."
2
AllianceOne Receivables Mgmt., Inc. v. Lewis, No. 87445-0
(C. Johnson, J., dissenting)
The statute provides that for a defendant in a lawsuit to recover attorney
fees, the statute requires only that the plaintiff "recovers nothing." As defined in
Black's Law Dictionary, "recover" means in a broad sense "[t]o get back or regain
in full or in equivalence" and in a narrower sense "[t]o obtain (a judgment) in one's
favor." BLACK'S LAW DICTIONARY 1389 (9th ed. 2009). By this broad definition, a
plaintiff "recovers nothing" when it voluntarily dismisses its suit. Or, put another
way, the plaintiff files the lawsuit asserting it is entitled to a judgment but, upon
dismissal, it recovers nothing.
The majority holds that there must be a final judgment before attorney fees
can be made available to the prevailing party under RCW 4.84.250 and .270. To
reach this holding, the majority relies heavily on Cork Insulation Sales Co. v.
Torgeson, 54 Wn. App. 702, 775 P.2d 970 (1989). The Court of Appeals, Division
Three, held in Cork that a defendant was not entitled to fees under RCW 4.84.250
fol,lowing a plaintiffs voluntary dismissal. In Cork, the defendant made an offer of
settlement of one dollar prior to the voluntary dismissal, which makes Cork
different. The court noted that RCW 4.84.280 requires settlement offers be made
known to the trier of fact for purposes of determining fees only after judgment has
3
AllianceOne Receivables Mgmt., Inc. v. Lewis, No. 87445-0
(C. Johnson, J., dissenting)
been entered. 3 Thus, the court reasoned that before a defendant can recover
attorney fees under RCW 4.84.250 (1) the damages sought must be less than
$10,000, (2) the party seeking to recover attorney fees and costs must be deemed
the prevailing party, and (3) a judgment must be entered before the offer of
settlement is opened. The court acknowledged that the defendant indisputably met
the first requirement and that he arguably was the prevailing party under the
statute. Therefore, the holding in Cork rested on the fact that the third requirement
never occurred. Cork, 54 Wn. App. at 706.
The majority mistakenly adopts this three-part test, which was developed on
the premise that in order for a defendant to qualify for an attorney award under
RCW 4.84.250, the defendant is required to make an offer of settlement. As the
majority correctly recognizes, RCW 4.84.270 expressly provides that a defendant
is the prevailing party if the plaintiff"recovers nothing, or if the recovery,
exclusive of costs, is the same or less than the amount offered in settlement by the
defendant." (Emphasis added); see majority at 7 n.2. In other words, as we
previously clarified, "the defendant can be the prevailing party if either the
3
RCW 4.84.280 provides, in part, "Offers of settlement shall not be filed or
communicated to the trier of the fact until after judgment, at which time a copy of said offer of
settlement shall be filed for the purposes of determining attorneys' fees as set forth in RCW
4.84.250."
4
AllianceOne Receivables Mgmt., Inc. v. Lewis, No. 87445-0
(C. Johnson, J., dissenting)
plaintiff recovers nothing or the defendant makes an offer 10 days or more before
trial and the plaintiff recovers as much as or less than that offer." Williams v.
Tilaye, 174 Wn.2d 57, 61-62, 272 P.3d 235 (2012) (emphasis added).
The Cork test should apply, if at all, only when a defendant tenders a
settlement offer. Under such circumstances, a defendant is the prevailing party
only if the plaintiff recovers as much or less than the offer. RCW 4.84.270. To
resolve whether the plaintiff recovers as much as or less than the defendant's offer
necessitates a final judgment. But the statute is disjunctive. Defendants can also
recover if the plaintiff recovers nothing. The Cork case did not address this
situation, and the majority's adoption and paraphrasing of the Cork test stretches
the holding beyond its facts.
In a different case, most directly comparable here, the Court of Appeals,
Division One, recognized the two separate bases for recovery under RCW 4.84.250
and concluded that the statute does authorize an award of attorney fees to the
defendant following voluntary dismissal. Allahyari v. Carter Subaru, 78 Wn. App.
518,524, 897 P.2d 413 (1995). There, the court distinguished Cork, noting that the
defendant in that case based his claim for attorney fees on his offer of settlement
and not on the fact of the voluntary dismissal alone. The court stated:
5
AllianceOne Receivables Mgmt., Inc. v. Lewis, No. 87445-0
(C. Johnson, J., dissenting)
Under RCW 4.84.270, a defendant's status as a prevailing party is
determined by examining what, if anything, the plaintiff recovered ..
. . . When a plaintiff voluntarily dismisses its entire action, as here,
the plaintiff recovers nothing. Therefore, for purposes of a fee award
under RCW 4.84.250, the defendant under such circumstances is the
prevailing party.
Allahyari, 78 Wn. App. at 523. This analysis and holding should not be remarkable
because that is what the statute says.
The majority's holding also ignores our analysis and conclusion in
Wachovia SEA Lending Inc. v. Kraft, 165 Wn.2d 481, 200 P.3d 683 (2009). In
Wachovia, we held that no attorney fees were available when a plaintiff voluntarily
dismissed its suit under CR 41(a)(1)(B) for purposes ofRCW 4.84.330. RCW
4.84.330 controls in suits where a contract or lease specifically provides for
attorney fees to be awarded to one of the parties. Under that statute, "prevailing
party" means "the party in whose favor final judgment is rendered." RCW
4.84.330. We pointed out that Black's Law Dictionary defines a "final judgment"
as '"[a] court's last action that settles the rights of the parties and disposes of all
issues in controversy .... ' BLACK'S LAW DICTIONARY 859 (8th ed. 2004)."
Wachovia, 165 Wn.2d at 492 (alterations in original). We determined that a
voluntary dismissal is not a final judgment because it "leaves the parties as if the
action had never been brought." Wachovia, 165 Wn.2d at 492. We therefore
6
AlfianceOne Receivables Mgmt., Inc. v. Lewis, No. 87445-0
(C. Jolmson, J., dissenting)
concluded that the defendant cannot be considered a prevailing party when the
plaintiff voluntarily dismisses the action for purposes ofRCW 4.84.330.
Here, RCW 4.84.270 is worded differently and does not contain a similar
requirement that a "final judgment" be rendered in order for the defendant to be
deemed the prevailing party. The majority must read that requirement into a statute
that doesn't require a final judgment. As Lewis notes, if the legislature intended to
require that a final judgment be entered, it could have used the same language as it
did in RCW 4.84.330. Because there is no express requirement that a final
judgment be rendered to have a prevailing party under RCW 4.84.270, we should
not add one. Rather, we should conclude that the plain and ordinary meaning of the
phrase "recovers nothing" means just that and nothing more.
Contrary to what the majority contends, this interpretation is consistent with
the purposes ofRCW 4.84.250 and .270. We have recognized that "[t]hese statutes
have multiple purposes of encouraging out-of-court settlements, penalizing parties
who unjustifiably bring or resist small claims, and enabling a party to pursue a
meritorious small claim without seeing the award diminished by legal fees."
Williams, 174 Wn.2d at 62 (emphasis added). The majority seems to suggest that
as with settlement, voluntary dismissal avoids the expense of trial and therefore
plaintiffs who seek a nonsuit should not be penalized with the payment of attorney
7
AllianceOne Receivables Mgmt., Inc. v. Lewis, No. 87445-0
(C. Johnson, J., dissenting)
fees. But this argument overlooks the fact that CRLJ 41(a)(l)(ii) requires
mandatory dismissal " [u]pon motion of the plaintiff at any time before plaintiff
rests at the conclusion of his opening case." Accepting the majority's argument
would mean that a plaintiff could precede to the end of the plaintiffs presentation
of the case, and then if it does not go well, dismiss without facing fees. As Lewis
observes, this would discourage settlement and is contrary to the purposes behind
RCW 4.84.250. In addition, awarding fees to a defendant following a voluntary
nonsuit will encourage collection agencies and other plaintiffs to actually verify the
merits of a claim before filing. This is consistent not only with CR 11, which
requires attorneys to verify that the pleading is well grounded in fact and warranted
by law, but also with the purpose of the statute to penalize parties who
unjustifiably bring small claims.
From the defendant's viewpoint, being wrongly sued where, as here, nothing
is owed imposes on them the unnecessary burden to defend. This includes hiring
an attorney, incurring costs and fees in defending the claim, and possible future
consequences from the public court record of having been sued. All of this
potential burden is easily avoided by following the statutory directive. This places
8
AllianceOne Receivables Mgmt., Inc. v. Lewis, No. 87445-0
(C. Johnson, J., dissenting)
the incentive on plaintiffs, where it logically belongs, to investigate and verify their
claims before filing meritless lawsuits.
9