Schibel v. Eymann ( 2017 )

Tl^is opinioh was filed for fecord
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DATE AUG Q 3 2917 i
^OA/ikAAAA-i- (S SUSAN L. CARLSON
SUPREME COURT CLERK
CmEFJUSTKE
IN THE SUPREME COURT OF THE STATE OF WASHINGTON
JAMES SCHIBEL, an individual, and
PATTI SCHIBEL,an individual; and the No. 93214-0
marital community thereof.
Respondents,
V.
RICHARD EYMANN,an individual;
EYMANN ALLISON HUNTER JONES,PS, En Banc
a Washington professional services
corporation; MICHAEL WITHEY,an
individual; LAW OFFICES OF MICHAEL
WITHEY,PLLC, a Washington professional
limited liability company.
Petitioners. Filed AUu 0 3 2017
MADSEN,J.—In this case, former clients are suing their attorneys for legal
malpractice based, in part, on the attorneys' withdrawal from a prior ease. But the
attorneys obtained that withdrawal by court order. In the original ease, the former clients
appealed the court's order approving withdrawal, and that appeal was rejected. The
attorneys thus argue that collateral estoppel applies to bar a malpractice action based on
their withdrawal. We agree. We hold that the fact of withdrawal by court order in an
earlier proceeding is dispositive in a later malpractice suit against the attorney. Although
No. 93214-0
other malpractice complaints unrelated to the withdrawal would not be precluded, a client
cannot relitigate whether the attorney's withdrawal was proper. If we are to have rules
permitting attorney withdrawal, we must allow attorneys to have confidence in those
rules. We,therefore, reverse the Court of Appeals.
FACTS
In this malpractice action, James and Patti Schibel allege that attorneys Richard
Eymann and Michael Withey (Attorneys) committed legal malpractice and breached their
fiduciary duties. Specifically, the Schibels claim that the Attorneys committed
malpractice because they failed to timely and adequately prepare for trial, failed to
properly handle settlement discussions and negotiations, and improperly withdrew from
the case on the eve of trial.
The original case began in 2007 when the Schibels sued their former landlord,
Leroy Johnson, for breach of a commercial lease and negligent infliction ofinjury due to
mold exposure. When the Schibels originally filed their action, a different attorney
represented them. But that attorney withdrew in 2009 due to a fee dispute with the
Schibels. When the original attorney withdrew, the Attorneys took over the case and
entered into a contingent fee agreement with the Schibels.
Trial for the original case was continued several times. When the Attorneys took
over the case, trial was continued to April 2010. The trial court continued the case twice
more before setting a trial date of November 1, 2010. At the last continuance, the judge
stated that there would be no more continuances.
No. 93214-0
On October 10, 2010, the Attorneys informed the Schibels via letter that they
would need to withdraw in light ofthe breakdown ofthe relationship between them and
the Schibels. The next day, the Attorneys filed a motion to withdraw and a motion to
continue the trial date. The Schibels objected to the motion to withdraw. The hearing on
the motions was held on October 27, 2010 before Judge Annette Plese. Present at the
hearing were the Schibels, the Attorneys, and counsel for Johnson. The Schibels
explained that they had been unable to find replacement counsel because ofthe fees they
still owed to the Attorneys. When Judge Plese asked the Schibels whether they would be
able to find replacement counsel if she granted a continuance, they expressed that it
seemed "fairly bleak" that they could in the immediate future. Clerk's Papers(CP)at
138.
Judge Plese granted the Attorneys' motion to withdraw, explaining:
[A]t this point, it appears that there is a breakdown with you and counsel,
and the Court has no choice at this time other than to allow them to
withdraw on your behalf. They've given the proper notice. They're here.
... I am going to allow [the Attorneys] to withdraw. They've given
the proper notice, and at this point, the Court can't, on a civil case, order
them to stay on board and work the case, especially with their ethical
obligations.
Id. at 139-40. Judge Plese then denied the motion for a continuance, explaining that after
Johnson strenuously objected to the last continuance, she had said that there would be no
flirther continuances. Id. at 140. The Schibels and Johnson then attempted settlement
negotiations, but those negotiations failed. In November 2010, the Schibels' case against
Johnson was dismissed with prejudice.
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The Schibels retained eounsel and appealed the withdrawal and eontinuance
rulings. The Court of Appeals affirmed. Schibel v. Johnson, noted at 168 Wash. App.
1046, 2012 WL 2326992, at * 1. The Court of Appeals concluded that the trial court had
properly exercised its discretion when it granted the Attorneys' motion to withdraw.
2012 WL 2326992, at *4. The Schibels petitioned this court for review, which we
denied. Schibel v. Johnson, 175 Wash. 2d 1024, 291 P.3d 253 (2012). And the Schibels
sought review in the United States Supreme Court, which was also denied. Schibel v.
Johnson, 133 S. Ct. 2344, 185 L. Ed. 2d 165 (2013).
The Schibels then filed this malpractice action against the Attorneys. The
complaint alleged that the Attorneys were negligent based on their failure to timely and
adequately prepare for trial, their failure to properly handle settlement discussion and
negotiations, and various actions surrounding the Attorneys' conduct in withdrawing
from the case. The alleged actions surrounding withdrawal included failing to timely
inform the Schibels of withdrawal, moving to withdraw too late in the ease, failing to
condition their withdrawal on a continuance, and failing to disclose earlier the "interests
and intentions" that led the Attorneys to withdraw. CP at 4-5.
The Attorneys moved for summary judgment, arguing that complying with
applicable rules and obtaining the court's permission for withdrawal precludes future
actions for legal malpractice based on that withdrawal. The trial court denied the motion
for summary judgment. On interlocutory appeal, the Court of Appeals affirmed. Schibel
No. 93214-0
V. Eymann, 193 Wash. App. 534, 372 P.3d 172(2016). We accepted review and now
reverse.
ANALYSIS
Summary judgment is appropriate where there is no genuine issue of material fact
and the moving party is entitled to judgment as a matter of law. Christensen v. Grant
County Hosp. Dist. No. 1, 152 Wash. 2d 299, 305, 96 P.3d 957(2004); Court Rule(CR)
56(c)). We review a trial court's ruling on summary judgment de novo. Christensen, 152
Wash. 2d at 305. We also review de novo whether collateral estoppel applies to bar
relitigation of an issue. Id.
CR 71 governs the withdrawal of attorneys involved in civil litigation. CR 71(c)
provides that an attorney may withdraw by notice in the following manner:
(1)Notice ofIntent to Withdraw. The attorney shall file and serve a
Notice of Intent to Withdraw on all other parties in the proceeding. . ..
(2)Service on Client. Prior to service on other parties, the Notice of
Intent to Withdraw shall be served on the persons represented by the
withdrawing attorney... .
(3) Withdrawal Without Objection. The withdrawal shall be
effective, without order of court. . . unless a written objection to the
withdrawal is served by a party on the withdrawing attorney....
(4)Effect ofObjection. If a timely written objection is served,
withdrawal may be obtained only by order of the court.
In this case, the Schibels objected to the Attorneys' withdrawal, so the Attorneys could
withdraw only by order ofthe court. CR 71(c)(4).
The Rules ofProfessional Conduct(RFC)also address when an attorney may
withdraw. RPC 1.16(b) permits an attorney to withdraw from representation if:
(1) withdrawal can be accomplished without material adverse effect
on the interests of the client;
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(2)the client persists in a course of action involving the lawyer's
services that the lawyer reasonably believes is criminal or fraudulent;
(3)the client has used the lawyer's services to perpetrate a crime or
fraud;
(4)the client insists upon taking action that the lawyer considers
repugnant or with which the lawyer has a fundamental disagreement;
(5)the client fails substantially to fulfill an obligation to the lawyer
regarding the lawyer's services and has been given reasonable warning that
the lawyer will withdraw unless the obligation is fulfilled;
(6)the representation will result in an unreasonable financial burden
on the lawyer or has been rendered unreasonably difficult by the client; or
(7) other good cause for withdrawal exists.
The rule is written in the disjunctive, meaning an attorney may withdraw if there is no
harm to the client, the client has engaged in any of the five specific behaviors, or other
good cause exists.
Collateral estoppel, also known as issue preclusion, bars relitigation of an issue in
a later proceeding involving the same parties. Christensen, 152 Wash. 2d at 306. Collateral
estoppel promotes judicial economy and prevents inconvenience or harassment of parties.
Id. {citmgReninger v. Dep'tofCorr., 134 Wash. 2d 437, 449, 951 P.2d 782(1998)).
Importantly, collateral estoppel provides finality in adjudications, shielding parties and
courts from expending resources in repetitive litigation. Id. at 307. Collateral estoppel
precludes only those issues that were actually litigated and necessary to the final
determination in the earlier proceeding. Id. {ciXmg Shoemaker v. City ofBremerton, 109
Wash. 2d 504, 507, 745 P.2d 858 (1987)). For collateral estoppel to apply, the party
seeking it must show (1)the issue in the earlier proceeding is identical to the issue in the
later proceeding,(2)the earlier proceeding ended with a final judgment on the merits,(3)
the party against whom collateral estoppel is asserted was a party, or in privity with a
No. 93214-0
party, to the earlier proceeding, and (4) applying collateral estoppel would not be an
injustice. Id.
The parties have argued this case as one involving collateral estoppel. Although
some courts from other states have also used collateral estoppel to address the question
posed by this case, others have not. See Bright v. Zega, 186 S.W.3d 201, 205 (Ark. 2004)
(where the propriety of withdrawal has been litigated in a prior suit, it is res judieata and
cannot be relitigated in subsequent suit for legal malpractice); Lifschultz Fast Freight,
Inc. V. Haynsworth, Marion, McKay & Guerard, 486 S.E.2d 14, 17-18 (S.C. App. 1997)
(court's prior ruling allowing counsel to withdraw is the "law ofthe case" in subsequent
case for breach of duty based on that withdrawal), aff'd in part and overruled in part on
other grounds, 334 S.C. 244(1999). Cf. Allen v. Rivera, 509 N.Y.S.2d 48, 50(N.Y. App.
Div. 1986)(collateral estoppel does not apply because it is not clear that the court
approved withdrawal necessarily determined, as a matter of fact, that the attorney was not
guilty of misconduct). We acknowledge there is a split among courts in the application
of collateral estoppel in these cases. But taken together with the principles ofjudicial
immunity and a respect for court orders, we agree with the courts that have applied
preclusion doctrines to these types of claims.
We hold that the Schibels are collaterally estopped from relitigating whether the
Attorneys' withdrawal was proper. To the extent that their malpractice claims against the
Attorneys rely on the withdrawal being improper, preclusion applies and the Attorneys
are entitled to summary judgment. This does not, however, preclude the malpractice
No. 93214-0
claims that the Schibels raise for the Attorney's conduct unrelated to the court sanctioned
withdrawal.
The Schibels do not dispute that the second and third elements of collateral
estoppel are satisfied in this case. Therefore, our inquiry focuses only on the first and
fourth elements. Under CR 71(c)(4), the trial court acts as a gatekeeper for attorneys
seeking to withdraw when the client objects. In this malpractice action, the Schibels have
focused on the Attorneys' actions in withdrawing. But that focus is misplaced. Once the
court approved the Attorneys' motion to withdraw, the withdrawal became an action of
the court. With that proper focus in this case, it is clear that collateral estoppel applies to
bar any malpractice claims that stem from the withdrawal.
The first element for collateral estoppel requires that the issue in the earlier
proceeding is identical to the issue in the later proceeding. The Attorneys argue that the
Schibels' malpractice claims are based entirely on arguments that they raised in the
earlier proceeding. The Court of Appeals disagreed and found that the issues were not
identical:
At issue in the first case, as with most contested cases of withdrawal, was
whether or not the Attorneys complied with CR 71. The court did not
answer the questions of whether the Attorneys correctly perceived that
ethical considerations required them to withdraw or that the Attorneys
actually were motivated by that reason.
Schibel, 193 Wash. App. at 546. Characterized this way, the Court of Appeals found that
the issues were not identical. This analysis, however, does not account for the fact that
only the trial court could grant the motion to withdraw.
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Through CR 71(c)(4), we have established a system by which individual attorneys
cannot make the ultimate decision to withdraw. The trial court must intervene and order
the withdrawal. Once the trial court approved the Attorneys' withdrawal, it sanctioned
the Attorneys' actions in doing so and the withdrawal became a decision of the court,
which could then be appealed. The issue of withdrawal was actually litigated in the prior
case because whether the withdrawal was proper necessarily turns on whether the trial
court abused its discretion in approving the withdrawal. The Court of Appeals found it
had not. Thus, withdrawal was proper. Any of the Schibels' malpractice claims that rely
on the faet of withdrawal present the same issue. By reframing their wrongful
withdrawal argument, the Schibels are seeking to hold the Attorneys liable for a decision
of the court.^
The fourth element of collateral estoppel, the injustiee element, is rooted in
proeedural unfairness. '"Washington courts look to whether the parties to the earlier
proceeding reeeived a full and fair hearing on the issue in question.'" Thompson v. Dep 't
'As an action of the court,judicial immunity would prevent a plaintifffrom filing a civil suit
against the judge for approving the withdrawal. Judicial immunity is rooted in public policy.
The immunity is not designed to protect judges as individuals; rather, it is extended to judges to
protect the interests of society. Adkins v. Clark County, 105 Wash. 2d 675, 677, 717 P.2d 275
(1986). "If disgruntled litigants could raise civil claims againstjudges, then 'judges would lose
"that independence without which no judiciary can either be respectable or useful.'"" Taggart v.
State, 118 Wash. 2d 195, 203, 822 P.2d 243(1992)(quoting Butz v. Economou,438 U.S. 478, 509,
98 S. Ct. 2894, 57 L. Ed. 2d 895 (1978)(quoting Bradley v. Fisher, 80 U.S.(13 Wall.) 335, 347,
20 L. Ed. 646 (1872))). Preserving judicial immunity for judicial decision-making is necessary
for maintaining the respect for an independent judiciary necessary in our democratic society.
Further, we note that a court order can be a superseding cause that will break the causal chain
necessary to establish a negligence claim. See Bishop v. Miche, 137 Wash. 2d 518, 532, 973 P.2d
465 (1999)(finding that the judge's decision not to revoke probation broke any causal
connection between any negligence and the injury).
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ofLicensing, 138 Wash. 2d 783, 795-96, 982 P.2d 601 (1999)(quoting re Marriage of
Murphy,90 Wn. App. 488, 498, 952 P.2d 624 (1998)). The Schibels argue that this
element is not satisfied because although they had had an opportunity to be heard, they
did not have a full and fair opportunity.
But the Schibels did have a full and fair opportunity to be heard in the prior
proceeding. The Schibels were permitted to object to the Attorneys' motion to withdraw
under CR 71. Judge Plese held a hearing on that motion where she heard argument from
both sides. The Schibels then, with the assistance of an attorney, appealed Judge Plese's
order to the Court of Appeals. That court rejected the Schibels' argument in an
unpublished opinion. Then, the Schibels were able to pursue two other appeals, in our
court and in the United States Supreme Court, both of which were rejected. The Schibels
were afforded all opportunities to be heard consistent with our court rules. In stark
comparison, courts from other states have found the injustice element not satisfied when
the court approved the attorney's withdrawal without a hearing or without notice to the
client. See Allen, 509 N.Y.S.2d at 51; Vang Lee v. Mansour, 289 S.W.3d 170, 174(Ark.
App. 2008). Applying collateral estoppel in this case will not be an injustice.
Sound logic supports applying collateral estoppel to these claims as well. In short,
the rule and process dictated by the court rules have to mean something. When attorneys
comply with the court rule for withdrawal, they should have confidence in that rule.
Allowing former clients to proceed against attorneys for malpractice based solely on
court sanctioned withdrawals would dissuade attorneys from following the court rules. If
10
No. 93214-0
collateral estoppel is not applied to these claims, withdrawing by court order would
expose attorneys to the same consequences as simply abandoning their clients. See
Keywell & Rosenfeld v. Bithell, 657 N.W.2d 759, 789-90(Mich. App. 2002). We want to
encourage attorneys to follow the rules that have been put into place for their withdrawal.
This will allow the trial courts to continue to aet as gatekeepers for withdrawal,
protecting the attorneys, the clients, and the system ofjustice.
The Arkansas Supreme Court employed this logic in a similar case. In Bright, a
former elient attempted to sue an attorney for negligence based, in part, on allegations
that the attorney wrongfully withdrew from her case. The Arkansas Supreme Court
affirmed the trial court's dismissal of the client's claim, explaining:
We are reluctant to hold that an authorized withdrawal from representing a
client by a federal districtjudge constituted malpraetice.... At the very
least,[the attorney] has the right to rely upon a valid order ofthe federal
district court permitting him to withdraw.
It would present a perverse state of affairs if a trial court could
permit trial counsel to withdraw from representation and then that attorney
became an "insurance policy" for the former client, after that former client
settled for a lesser amount than what she believed she was due. ... In our
judgment, if[the client] believed [the attorney's] withdrawal to be wrong,
that battle should have been waged before the federal district court and on
appeal and not in a separate lawsuit against former counsel.
Accordingly, because the federal district court permitted [the
attorney's] withdrawal, thereby sanctioning his actions in doing so,[the
client] cannot now,in a separate lawsuit, state facts constituting legal
malpractice ... based on an allegation that that withdrawal was wrongful.
Bright, 186 S.W.3d at 205. The court in Bright concluded that the client had failed to
state facts on which relief could be granted. While the court relied on a different legal
principle, its rationale equally supports applying collateral estoppel.
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Here, the Attorneys moved to withdraw, the Schibels contested that withdrawal,
and the trial court ultimately authorized the withdrawal. The Schibels appealed and thus
waged their battle against the withdrawal. That battle having been waged,the Schibels
cannot wage it again. Collateral estoppel applies to preclude a claim of legal malpractice
based on a court approved withdrawal under CR 71(c)(4).
CONCLUSION
In the prior proceeding, the Schibels had a fiill and fair opportunity to actually
litigate their challenge to the trial court granting the Attorneys' motion to withdraw. The
fact of withdrawal by court order is dispositive in a later malpractice suit. Collateral
estoppel thus precludes any malpractice claim based on that withdrawal and summary
judgment on those claims is appropriate. We therefore reverse the Court of Appeals as to
those claims that involve withdrawal. Because the complaint alleges malpractice claims
separate from the withdrawal, such as failing to prepare for trial, those claims are not
precluded.
12
No. 93214-0
WE CONCUR:
13
Schibel et ex. v. Eymann et al. No. 93214-0
(Gordon McCloud, J., dissenting)
No. 93214-0
GORDON McCLOUD,J.(dissenting)—This case presents a question of first
impression for this court: whether a trial court order approving an attorney's
withdrawal from representation, over the client's objection, has preclusive effect
barring the client's later action for attorney malpractice arising from the withdrawal.
Under traditional collateral estoppel analysis, as applied to the facts in this case, the
answer is clearly no. The majority departs from traditional collateral estoppel
analysis and adopts a new rule barring malpractice plaintiffs from asserting that a
court-sanctioned withdrawal was, in fact, improper. The majority certainly asserts
policy reasons for this departure. But the policy reasons can be addressed in the
context of traditional collateral estoppel analysis, without adopting a new rule that
will be difficult to apply. I therefore respectfully dissent.
FACTS
The Underlying Case
In March 2009, James and Patti Schibel hired attorneys Richard Eymann and
Michael Withey (Attorneys) to represent them in an action for fraud, negligence,
1
Schibel et ex. v. Eymann et al. No. 93214-0
(Gordon McCloud, J., dissenting)
breach of contract, and breach of warranty against their commercial landlord, Leroy
Johnson. On October 10, 2010,the Attorneys moved to withdraw from representing
the Schibels. The Schibels objected to the withdrawal, in part because the trial in
their action against Johnson was scheduled to begin November 1. In conjunction
with their motion to withdraw, the Attorneys sought a continuance on the Schibels'
behalf. But at that point, the court had already granted five continuances and had
expressly advised the parties that it would not grant any more.
The record before this court contains only one document in which the
Attorneys addressed the reasons they sought to withdraw: an affidavit by attorney
Eymann in support ofthe motion to continue. In that affidavit, Eymann asserted (in
relevant part) that "[t]he withdrawal was based upon the breakdown in
communication, trust and confidence in the attorney-client relationship" and a
continuation is necessary "[a]s a result of[various] events and other issues protected
by the attorney clientprivilege." Clerk's Papers(CP)at 112(emphasis added). The
record contains no filing by the Attorneys connecting the withdrawal motion to any
Rule of Professional Conduct(RPC)or other ethical obligation.
By contrast, the record does contain a filing by the Schibels addressing RPC
1.16, which governs an attorney's obligations when "Declining or Terminating
Representation." In this filing, titled "Objection to Motion to Withdraw as Counsel
Schibel et ex. v. Eymann et al.. No. 93214-0
(Gordon McCloud, J., dissenting)
for Plaintiffs," the Schibels objected to "the unfortunate connotation of Mr.
Eymann's vague statements [regarding attorney-client privilege] . . . that the
Schibels have done something wrong, or proposed to do something wrong, that
requires orpermits withdrawal under R.P.C. 1.16." CP at 124. That declaration then
goes on to deny any such wrongdoing.
On October 27, 2010, Judge Annette Plese^ held a hearing on the motion to
withdraw and the motion for a continuance. Present were the Schibels, the
Attorneys, and counsel for Johnson. On the issue of withdrawal, the Schibels were
reluctant to argue their opposition in front ofJohnson's attorneys and asked the court
to exclude them. CP at 139 ("it seems our case is pretty damaged at this point, and
we're not sure that it would be appropriate to argue in front ofthe defense counsel").
Judge Plese denied that request. The Schibels then decided to argue three points in
objection to the withdrawal motion: (1) that the Schibels had not planned or
threatened to fire the Attorneys,(2) that all the alleged difficulty in the attorney-
client relationship "seems to stem from us not taking the last best settlement offer
that was on the table," and (3) that the only time the Schibels asked for any fee
^ The relevant procedural history in this case involves both the original withdrawal
proceeding and the present malpractice action. To avoid confusion,I refer to the trial court
in the withdrawal proceeding as "Judge Plese" and the trial court in the present case as "the
trial court."
Schibel et ex. v. Eymann et al., No. 93214-0
(Gordon McCloud, J., dissenting)
waiver was after the Attorneys moved to withdraw, so that replacement counsel
could "take the case ... knowing that they would [not] have to fight for attorney's
fees." CP at 142-43.
Judge Plese granted the motion to withdraw. In her oral ruling, she explained:
[I]t appears that there is a breakdown with you and counsel, and the
Court has no choice at this time other than to allow them to withdraw
on your behalf.
They've given the proper notice, and at this point, the Court can't, on a
civil case, order them to stay on board and work the case, especially
with their ethical obligations.
CP at 139-40. Judge Plese's written order also cited the Attorneys' "ethical
obligations" as the basis for withdrawal: "Plaintiffs counsel gave proper notice of
intent to withdraw and that the attorney-client relationship in its current status
requires said withdrawal due to the ethical obligations ofplaintiffs counsel." CP at
73. But Judge Plese did not state what "ethical obligations" she was referring to.
Judge Plese also denied the Schibels' motion for another continuance.
The Schibels then entered into settlement negotiations with Johnson,but those
negotiations broke down. In November 2010, the Schibels' case against Johnson
was dismissed with prejudice.
Schibel et ex. v. Eymann et ah. No. 93214-0
(Gordon McCloud, J., dissenting)
The First Appeal
With the assistance of a new attorney, the Schibels appealed the trial court's
orders denying their last motion for a continuance, granting the Attorneys' motion
to withdraw, and dismissing their case with prejudice. Schibel v. Johnson, noted at
168 Wash. App. 1046, 2012 WL 2326992, at *1. The Court of Appeals reviewed all
three orders for abuse of discretion and affirmed. 2012 WL 2326992, at *2-6. With
respect to the withdrawal order, the court reasoned that '"[wjhen withdrawal is
sought by a retained attorney in a civil case, it generally should be allowed'" unless
'"specific articulable circumstances warrant [denial]."' Id. at *3 (first alteration in
original) Kingdom v. Jackson,78 Wn.App. 154,160,896 P.2d 101 (1995)).
It observed that the Attorneys had complied with Civil Rule (CR) 71(c), which
governs notice and other procedural requirements entailed in withdrawal, and it
stated that "numerous filings" in the record supported the trial court's conclusion
that "'the attorney-client relationship in its current status requires said withdrawal
due to the ethical obligations of plaintiffs counsel.'" Id. at *3-4. But in support of
that holding, the court cited only a single document, apparently: attorney Eymann's
affidavit on the motion for a continuance, attesting that withdrawal was necessitated
by "'the breakdown in communication, trust and confidence in the attorney-client
relationship.'" Id. at *4. Then, citing generally "the [parties'] declarations and the
Schibel et ex. v. Eymann et al. No. 93214-0
(Gordon McCloud, J., dissenting)
record," the court held that "the trial court's finding that good cause existed for
withdrawal was not manifestly unreasonable." Id. at *4.
The Malpractice Case
In January 2014, the Schibels filed an action against the Attorneys for
negligence/legal malpractice and breach of fiduciary duties. The complaint alleged
that the Attorneys failed to prepare adequately in the action against Johnson and
then, knowing that the trial court would not grant any more continuances,
"articulated fictitious reasons to justify the proposed withdrawal." CP at 3.
The Attorneys moved for summary judgment dismissal of the claims arising
from their withdrawal. Ofrelevance here,they argued that the October 2010 hearing
on their motion for withdrawal had preclusive effect because when the trial court
"determined that the Defendants had an ethical obligation to withdraw," it
necessarily ruled that the withdrawal did not breach any legal duty. CP at 251.
The Schibels opposed summary judgment and attached a declaration by
retired Judge Roger A. Bennett. In the declaration. Judge Bennett opined that the
Attorneys' withdrawal constituted conduct falling below the standard of care "under
the unique circumstances of this case." CP at 197. Specifically, he stated that his
review of 50 separate documents relating to the Attorneys' representation of the
Schibels convinced him that the Attorneys withdrew because they feared they would
Schibel et ex. v. Eymann et al. No. 93214-0
(Gordon McCloud, J., dissenting)
not recover sufficient fees if they went to trial. Judge Bennett opined that this
violated RFC 1.2 and the Schibels' contingent fee agreement with the Attorneys,
both of which vest authority to accept or reject settlement offers solely in the client.
He also noted, consistent with James Schibel's declaration, that the Attorneys might
have sought to withdraw because they were unprepared for trial and knew they
would probably not be able to obtain another continuance. Of relevance to the
collateral estoppel argument. Judge Bennett listed "several significant and material
facts that were not presented to the judge who approved the withdrawal," including
the amount of money the Attorneys were owed, the additional costs they expected
to incur ifthey went to trial, and the fact that the alleged breakdown in the attorney-
client relationship stemmed from the clients' refusal to settle. CP at 203. Finally,
Judge Bennett cited a document—apparently before the court on the motion to
withdraw but not included in the record here—titled "Plaintiffs' Counsels' Response
to Schibel Plaintiffs['] Objection to Withdrawal of Counsel." CP at 203-04.
Bennett's declaration quotes this document as stating:
"Withdrawing counsel are cognizant of the need to preserve the
attorney-client privileged communications and any other confidential
matters. It is therefore not appropriate to describe the full context of or
decision to withdraw as plaintiffs' counsel, other than to say that this
highly unusual step was taken very reluctantly and after great thought
and soul searching on our part."
7
Schibel et ex. v. Eymann et al. No. 93214-0
(Gordon McCloud, J., dissenting)
CP at 204. Judge Bennett opined that Judge Plese probably interpreted this statement
as impljdng that the Schibels intended to present false evidence or peijured
testimony and that the Attorneys therefore had an ethical obligation to withdraw.
The trial court denied the motion for summary judgment. It acknowledged
that Judge Plese had identified the Attorneys' "ethical obligations" as one reason to
grant the withdrawal motion, but it concluded that it could not determine, on the
basis of the record before it, "what those ethical obligations were found to be." CP
at 295. Indeed, in the hearing on the motion, the trial court wondered whether the
Attorneys should have corrected Judge Plese when, at the hearing on their
withdrawal motion, she cited these "obligations" as a basis to grant:
And I suppose if it wasn't really - - if maybe [Judge Plese]
misunderstood that, maybe there was an obligation to correct that on
the record with her by counsel: "Judge, we don't want to give that
impression that our clients have done something wrong," because the
Schibels were saying,"We haven't done anything wrong. There's no
basis for it."!"^
Verbatim Report ofProceedings(VRP)(May 23, 2014), Schibel v. Eymann, No.
32937-2-III, at 28(Wash. Ct. App.).
^ In response to this observation, counsel for the Attomeys replied, "Sure. But.. .
the issue was is this withdrawal proper, and that's what she had to determine. She
determined yes. Court of Appeals said yes. And under collateral estoppel .. . it's been
adjudicated...." VRP(May 23, 2014), Schibel v. Eymann, No. 32937-2-III, at 28-29.
8
Schibel et ex. v. Eymann et al. No. 93214-0
(Gordon McCloud, J., dissenting)
Ultimately, the court ruled that collateral estoppel did not apply because
although "similar arguments would be used in both of the actions," the issues
presented were distinct:
The Schibels are not asserting the same claim in this suit as they
asserted in the underlying action. During the underlying trial, the
Schibels merely objected to the Defendant's motion to withdraw. On
appeal,the issue argued was whether the trial court abused its discretion
by allowing the Defendants to withdraw and by not continuing the trial
date. Before this point, it has not been argued that the Defendants'
withdrawal breached their fiduciary duty to the Schibels.
Hence,the issue in the underlying suit was whether the trial court
abused its discretion and the issue in the current suit is whether the
Defendant's duty of care fell below the professional standard.
CP at 296. The court also concluded that because the issues presented were not
identical, according preclusive effect to the withdrawal ruling would work an
injustice.
The Court of Appeals granted discretionary review and affirmed. Schibel v.
Eymann, 193 Wash. App. 534, 546-47, 372 P.3d 172, review granted, 186 Wash. 2d
1009, 380 P.3d 497(2016).
ANALYSIS
In order to prevail on their claim of collateral estoppel, the Attorneys must
show that:
"'(1) the issue decided in the prior adjudication [is] identical with the
one presented in the second;(2) the prior adjudication . . . ended in a
Schibel et ex. v. Eymann et a/., No. 93214-0
(Gordon McCIoud, J., dissenting)
final judgment on the merits; (3) the party against whom the plea of
collateral estoppel is asserted [was] a party or in privity with a party to
the prior litigation; and (4) application of the doctrine [will] not work
an injustice.'"
In re Pers. Restraint of Mot, 184 Wash. 2d 575, 580, 360 P.3d 811 (2015)(quoting
State V. Williams, 132 Wash. 2d 248, 254, 937 P.2d 1052 (1997)(quoting State v.
Cleveland, 58 Wash. App. 634, 639, 794 P.2d 546 (1990))), cert, denied, 137 S. Ct.
566, 196 L. Ed. 2d 456 (2016). The purpose of these prerequisites is to ensure that
the estopped party has had a "full and fair opportunity to litigate" the issue in the
earlier proceeding. Parklane Hosiery Co. v. Shore,439 U.S. 322,253,99 S. Ct. 645,
58 L. Ed. 2d 552(1979).
Like both the trial court and the Court of Appeals in this case, I conclude that
neither the first nor the fourth element of collateral estoppel is satisfied. I would
therefore affirm the Court of Appeals' holding that the Schibels are not collaterally
estopped to pursue a malpractice claim asserting improper withdrawal.
I. The First Element of Collateral Estoppel Is Not Satisfied Because the
Motion To Withdraw and Malpractice Action Are Governed by
Different Legal Principles
For the first element of collateral estoppel to be satisfied, the issues in the two
cases must be identical in every respect. Standlee v. Smith, 83 Wn.2d 405,408,518
P.2d 721 (1974){orating Neaderland v. Comm 'r, 424 F.2d 639,642(2d Cir. 1970)).
Thus, even iftwo actions involve the same underlying facts, collateral estoppel does
10
Schibel et ex. v. Eymann et al. No. 93214-0
(Gordon McCloud, J., dissenting)
not apply '"unless the matter raised in the second case involves substantially the
same bundle of legal principles that contributed to the rendering of the first
judgment.'" Id. (internal quotation marks omitted)(quoting Neaderland, 424 F.2d
at 652). Even "a difference in the degree of the burden of proof in the two
proceedings[can] preclude[] application ofcollateral estoppel." Standlee,83 Wn.2d
at 407-08 (internal quotation marks omitted)(citing Helvering v. Mitchell, 303 U.S.
391, 397, 58 S. Ct. 630, 82 L. Ed. 917(1938)).
Consistent with this standard, we must compare the legal principles governing
the motion to withdraw and the legal principles governing the malpractice action
based on the withdrawal, in order to determine whether the first element ofcollateral
estoppel is satisfied in this case. The majority forgoes that comparison and instead
finds the first element satisfied "because whether the withdrawal was proper
necessarily turns on whether the trial court abused its discretion in approving the
withdrawal." Majority at 9. But this conclusory statement only begs the question
presented here: whether'"the matter raised in the second case involves substantially
the same bundle of legal principles that contributed to the rendering of the first
judgment.'" Standlee,83 Wn.2d at 408(quotingNeaderland,424 F.2d at 642). And
the answer to that question is clearly no.
11
Schibel et ex. v. Eymann et al. No. 93214-0
(Gordon McCloud, J., dissenting)
In their malpractice action, the Schibels will need to prove their case,
including the fact that the Attorneys' withdrawal constituted conduct falling below
the standard of care, by a preponderance ofthe evidence. Ang v. Martin, 154 Wn.2d
All,481-82, 114 P.3d 637(2005). By contrast, in opposing the motion to withdraw
the Schibels did not address the Attorneys' duty of care at all—^they just argued that
they (the Schibels) hadn't done anything unethical. Judge Plese made no findings
related to the standard of care or the Attorneys' fiduciary duties.
Nor did Judge Plese apply any burden of proof. Instead, relying solely on the
parties' affidavits—and denying the Schibels' request to argue the issue in more
detail outside defense counsel's presence—Judge Plese made a credibility
determination: she accepted the Attorneys' contention that their relationship with the
Schibels had so deteriorated that continued representation would be unethical.
When Judge Plese made that credibility determination, she was exercising
discretion within the '"bundle of legal principles'" that applies to contested
withdrawal motions. Standlee, 83 Wash. 2d at 408 (internal quotation marks omitted)
(quoting Neaderland, 424 F.2d at 642 (quoting Comm'r v. Sunnen, 333 U.S. 591,
602,68 S. Ct. 715, 92 L. Ed. 898 (1948))). Among these is the rule that trial courts
should err on the side of permitting withdrawal since [t]he attorney-client
relationship is consensual," and deny a motion only if specific articulable
12
Schibel et ex. v. Eymann et al. No. 93214-0
(Gordon McCloud, J., dissenting)
circumstances warrant that result." Kingdom,78 Wn. App. at 160. As the Court of
Appeals observed,Judge Plese's ruling was consistent with Comment 3 to RPC 1.16,
which advises that "'[t]he lawyer's statement that professional considerations
require termination of the representation ordinarily should be accepted as
sufficient.'" Schibel, 2012 WL 2326992, at *3 (alteration in original)(quoting RPC
1.16 cmt. 3). In a malpractice action, by contrast,the trial court could not make such
a credibility determination on summary judgment. The Schibels would instead be
permitted to fully develop their theory ofthe case and test the Attorneys' credibility
through cross-examination.
In light of this difference, the first collateral estoppel element is not satisfied.
There is no identity of issues here because the legal principles governing the
withdrawal motion are substantially different from those that would govern a
malpractice action based on the withdrawal.
II. The Fourth Element of Collateral Estoppel Is Not Satisfied Because the
Withdrawal Hearing Is Not an Adequate Substitute for a Malpractice
Trial
For similar reasons, applying collateral estoppel here would work an injustice;
thus, the fourth element is not satisfied. Even if the same basic facts are relevant to
both the withdrawal motion and the malpractice action, the Schibels were not
permitted to argue those facts in detail in the withdrawal proceeding. As explained
13
Schibel et ex. v. Eymann et al, No. 93214-0
(Gordon McCIoud, J., dissenting)
above, the Schibels attempted to argue the withdrawal motion in private, so they
would not have to disclose details of their case in front of the defendant, Johnson.
But the trial court denied that request and thus limited the Schibels' argument. The
majority fails to acknowledge this aspect ofthe withdrawal hearing. Majority at 10
("Judge Plese held a hearing on that motion where she heard argument from both
sides."). The trial court also substantially deferred to the Attorneys' vague assertion
that "ethical concerns" required them to withdraw.
In the context of the contested CR 71 motion, neither of these trial court
actions constituted an abuse of discretion—^that is why the Schibels could get no
relief on appeal from the withdrawal order.^ But neither did these trial court actions
constitute a full and fair adjudication of the Attorneys' fiduciary duties. Thus,
treating the withdrawal hearing as a substitute for the malpractice action works an
injustice. See In re Moi, 184 Wash. 2d at 583 ("'[0]ur case law on [the] injustice
element [of collateral estoppel] is most firmly rooted in procedural unfairness [and
thus] "Washington courts look to whether the parties to the earlier proceeding
received a full and fair hearing on the issue in question.'"" (citation omitted)
^ And that is why the majority errs by eoneluding that the application of collateral
estoppel will not work an injustice because the Schibels had the opportunity to appeal the
withdrawal order. See majority at 10.
14
Schibel et ex. v, Eymann et al. No. 93214-0
(Gordon McCIoud, J., dissenting)
(quoting Thompson v. Dep't ofLicensing, 138 Wash. 2d 783, 795-96, 982 P.2d 601
(1999)(quoting Marriage ofMurphy,90 Wn.App.488,498,952P.2d 624(1998)))).
III. The Majority Adopts a New Rule of Collateral Estoppel Specific to an
Attorney's Contested Motion To Withdraw That Is Not Justified by
Legitimate Policy Concerns
For the reasons given above, the trial court and the Court of Appeals were
correct in this case: a straightforward application of collateral estoppel principles
dictates that Judge Plese's withdrawal order should have no preclusive effect on the
Schibels' subsequent malpractice action. But the majority has not engaged in a
straightforward application of collateral estoppel principles. Instead, it has forgone
a traditional analysis in favor of a policy holding insulating attorneys who obtain
court approval to withdraw over a client's objection, even when those attorneys do
so by what the former clients allege—and we are only at the allegation stage—is
deception.
The majority reasons that this holding is necessary to prevent attorneys from
"simply abandoning their clients." Majority at II. In other words, the majority
concludes that if a court order does not insulate attorneys from civil liability for
improper withdrawal, then attorneys will have no incentive to seek such an order
and will instead just abandon their clients. I am not persuaded by this reasoning.
15
Schibel et ex. v. Eymann et al, No. 93214-0
(Gordon McCloud, J., dissenting)
CR 71 prohibits an attorney in a civil case from withdrawing, over a client's
objection, without court approval. Attorneys do not follow this rule just because a
violation risks liability in a subsequent malpractice action; they do so because that
is what the RPCs require. Withdrawal in violation of CR 71 is sanctionable
misconduct. E.g., In re Disciplinary Proceeding Against Pfefer, 182 Wash. 2d 716,
729-30, 344 P.3d 1200 (2015) (attorney subject to discipline for violating RPC
1.16(c) and (d)by withdrawing without sufficient notice). Thus, as a policy matter,
I disagree that we must craft a new rule of civil immunity in order to entice attorneys
into meeting their professional obligations.
Moreover,I believe the majority's new rule will prove confusing and difficult
to apply in practice. In this case, for example,the Schibels allege that the Attorneys
failed to prepare adequately for trial and mishandled settlement negotiations.
Majority at 2. The majority holds that they may pursue those claims since they are
"separate from the withdrawal." Id. at 12. But in addition to proving that the
Attorneys breached their professional and fiduciary duties, the Schibels must prove
causation and damages—^they must prove that the Attorneys' breach caused them to
lose money they would otherwise have recovered in a jury trial or settlement.
Presumably, the Attorneys will defend against those allegations by arguing that any
such loss had a very different cause: the Attorneys' proper withdrawal, necessitated
16
Schibel et ex. v. Eytnann et al. No. 93214-0
(Gordon McCloud, J., dissenting)
by their "ethical obligations." CP at 73. If the Attorneys do raise that defense, will
they be able to cite Judge Plese's withdrawal order, recognizing those "ethical
obligations" as evidence? Will the Schibels be allowed to refute the allegation that
their unethical conduct forced the Attorneys to withdraw?
The majority's new rule does not answer these questions. It assumes a clean
distinction between malpractice claims "based on the withdrawal" and malpractice
claims "separate from the withdrawal," but that distinction breaks down in practice.
At best,this new rule will prove confusing to apply. At worst, it will shield attorneys
who have not been candid about their true reasons for withdrawing from a case.
Certainly, it is not justified by the policy concerns the majority cites.
CONCLUSION
I would apply traditional collateral estoppel analysis, as the trial court and
Court of Appeals did in this case, and affirm. The majority departs significantly
from that analysis and adopts a new rule of civil immunity for attorneys who
withdraw allegedly on false pretenses. I see no policy justification for this rule, and
I think it will be difficult to apply in practice. I therefore respectfully dissent.
17
Schibel et ex. v. Eymann et al. No. 93214-0
(Gordon McCloud, J., dissenting)