Trinity Universal Insurance Company Of Kansas v. M. Sue Sefton ( 2018 )

FILED
COURT OF APPEALS DIV I
STATE OF WASHINGTON
2018FEB 26 AM 8:32
IN THE COURT OF APPEALS FOR THE STATE OF WASHINGTON
TRINITY UNIVERSAL INSURANCE ) No. 76248-6-1
COMPANY OF KANSAS, )
)
Intervenor/Appellant, )
)
v. )
)
M. SUE SEFTON AND ROYAL )
SEFTON, )
)
Respondent, )
) DIVISION ONE
v. )
)
IMPERO CONSTRUCTION COMPANY,)
A Washington corporation, and JOHN )
DOE CONSTRUCTION COMPANY I )
Through III, unknown corporation, )
)
Defendants. )
)
IMPERO CONTRACTING CO., LLC, )
)
Third Party Plaintiff, )
)
v. )
)
BLYTHE PLUMBING & HEATING, INC.,)
)
Third Party Defendant. )
) UNPUBLISHED OPINION
No. 76248-6-1/2
IMPERO CONTACTING, CO., LLC., )
)
Fourth Party Plaintiff, )
)
v. )
)
DELTA TECHNOLOGIES CORP., )
)
Fourth Party Defendant. )
FILED: February 26, 2018
SPEARMAN, J. — A party may only appeal as a matter of right those actions
of a trial court set forth in RAP 2.2(a). Trinity appeals an order denying dismissal
and an order determining the reasonableness of a settlement, but that reserves
whether the settlement amount is binding on Trinity. Neither of these orders are
final under RAP 2.2(a)(13). Nor do they determine or discontinue the action
under RAP 2.2(a)(3). They are therefore not appealable as a matter of right.
Further, discretionary review of these orders is not warranted. We dismiss
Trinity's appeal.
FACTS
While attempting to deliver a package in 2006, FedEx driver, Sue Sefton,
pulled into the parking lot of a construction site. Sefton exited her vehicle and
moved around the back of a pickup truck, striking her head on several unflagged
T-bars protruding from the bed of the truck. She was injured.
On June 9, 2009, Sefton and her husband filed suit against Impero
Construction Company and John Doe Construction Company !through III on a
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theory of premises liability. Imperol answered, and filed third and fourth party
complaints against subcontractors Blythe Plumbing & Heating, Inc. and Delta
Technologies Corporation.
Appellant Trinity insures Blythe Plumbing, and defended Blythe in this
lawsuit. Trinity also defended Impero under a reservation of rights as an
additional insured under its policy with Blythe. The parties mediated the case in
2011, but failed to reach a global settlement. lmpero's primary insurer, Certain
Underwriters at Lloyd's London, then negotiated a settlement with the Seftons in
which the Seftons and Impero agreed to settle all claims for $862,000, of which
Underwriters agreed to pay $65,000. Impero assigned any and all claims against
third parties who could be potentially at fault, including Blythe. Underwriters
agreed to assign any and all claims against third parties and their liability
insurers, including Trinity. In October 2011, the Seftons dismissed the claims
against Impero and moved for an order declaring the settlement reasonable and
binding. All insurers, including Trinity, intervened to oppose the settlement.
In February 2012, Trinity's counsel for Impero received a copy of the
settlement agreement from the Seftons that Impero had not signed, including a
request for a clarification that Impero was also assigning their claims against their
insurers. Trinity's counsel forwarded the document to Impero for signature, and
Impero executed the settlement agreement. After reviewing the clarification and
1 The record reflects that Impero Contracting Co., LLC was the general contractor on the
jobsite. Trinity belabors the complaint's misidentification, which goes to the merits of some of its
arguments. We do not reach the merits of these arguments, so for clarity this opinion refers only
to "Impero".
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No. 76248-6-1/4
finding it to be a material alteration, Trinity's counsel for Impero revoked Impero's
signature and agreement to the clarification.
In March 2012, all parties except Trinity agreed to pay $100,000 to the
Seftons in exchange for a release of their claims. The trial court dismissed all
parties except Trinity.
On April 14, 2015, the superior court clerk filed a Notice of Dismissal for
Want of Prosecution. The Seftons opposed the dismissal.
On June 8, 2016, the clerk again filed a notice of dismissal for want of
prosecution, requiring an action of record or a status report within thirty days.
Plaintiffs filed a status report, to which Trinity responded with its own CR 41(b)
motion to dismiss.
The Seftons then filed a "Nevisited motion for order declaring settlement
between parties and intervenors to be reasonable and binding." Clerk's Paper
(CP) at 510-34. The trial court denied the CR 41(b) motions to dismiss.
The Seftons amended their motion, which the trial court granted in part,
ruling that the settlement amount of $862,000 was reasonable. But the court
reserved ruling on whether it was binding on Trinity. The order allowed discovery
and briefing regarding Trinity's conduct in the underlying claim and its liability for
damages to lmpero, including its claims handling practice. Trinity appeals the
denial of the CR 41 motion to dismiss and order finding settlement reasonable.
DISCUSSION
Citing RAP 2.2(a), the Seftons argue that Trinity is not entitled to appeal
the order denying dismissal under CR 41(b) or the order determining
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No. 76248-6-1/5
reasonableness of settlement as a matter of right. Trinity argues that the orders
are appealable as a right under RAP 2.2(a)(3) or (13), or that we should grant
discretionary review.2
First, the denial of a motion to dismiss is clearly not appealable. Atkinson
v. Estate of Hook, 193 Wn. App. 862, 873, 374 P.3d 215(2016) review denied,
186 Wn.2d 1014, 380 P.3d 483(2016). Trinity may not appeal as a matter of
right the trial court's denial of the CR 41(b) motion to dismiss.
Trinity also appeals the trial court's order finding the Seftons' settlement
reasonable, permitting additional discovery, and reserving whether the settlement
is binding on Trinity. A party may appeal as of right "[a]ny written decision
affecting a substantial right in a civil case that in effect determines the action and
prevents a final judgment or discontinues the action." RAP 2.2(a)(3). A finding of
reasonableness does not determine or discontinue the action because it does not
resolve whether the settlement is binding on Trinity. While the amount that Trinity
would be liable for is set by this order, whether they are liable for it is an
outstanding question. The finding of reasonableness is not appealable under
RAP 2.2(a)(3).
Trinity argues that the order is a final judgment because the statute of
limitations has run on the Seftons' claims, and the issues are moot. But the
statute of limitations and mootness do not relate to whether the reasonableness
2 Trinity also argues that the Seftons should be estopped from raising this issue in their
responsive pleadings because they did not bring a motion to dismiss on the same grounds. We
reject this argument because, while the Seftons could have brought a motion to dismiss sooner,
Trinity likewise failed to move for discretionary review. See RAP 6.2.
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No. 76248-6-1/6
determination was final. Rather, these are arguments on the merits of Trinity's
defenses against the Seftons' claims. In the same vein, Trinity argues that the
reserved issue of whether the settlement is binding does not preclude finality
because the motion for reasonableness was not properly before the court. But
again, this is only if we assume the merits of Trinity's arguments regarding the
statute of limitations and mootness. Moreover, we note that these issues are not
properly before us, in any event, because they are matters for the trial court to
address in the first instance and it has not yet done so.
Trinity cites Werlinger v. Warner, 126 Wn. App. 342, 347, 109 P.3d 22(2005), which held that an order denying the reasonableness of a settlement was
appealable under RAP 2.2(a)(3). But in that case, the trial court indicated that it
would not enter a judgment in excess of the policy limits when rejecting a
$5,000,000 settlement between the injured and the insured. On appeal, the court
reasoned that the sole purpose of the reasonableness proceeding was to obtain
a judgment in excess of the policy limits, so the trial court's order determined the
action. Werlinger at 348. No such circumstances exist here. Trinity's purpose in
these proceedings is to not pay the outstanding amount of the settlement
between the Seftons and the other defendants. While the reasonableness
hearing set the amount, whether Trinity must pay it is reserved. Unlike in
Werlinger, this order on reasonableness does not determine the action.
Trinity cites these same arguments in support of its position that the order
is appealable under RAP 2.2(a)(13), which permits review of "[a]ny final order
made after judgment that affects a substantial right." But there has been no final
No. 76248-6-1/7
judgment with respect to Trinity in this case. And because the issue of whether
the settlement amount is binding on Trinity is unresolved, Trinity cannot show
that the order affects a substantial right. The order is not appealable under RAP
2.2(a)(13).
Trinity argues in the alternative that the panel should accept discretionary
review, which may be granted only in the following circumstances:
(1)The superior court has committed an obvious error which would
render further proceedings useless;
(2) The superior court has committed probable error and the
decision of the superior court substantially alters the status quo or
substantially limits the freedom of a party to act;
RAP 2.3(b). Trinity cites its assignments of error to support its argument for
discretionary review. But the superior court did not commit an "obvious error" in
determining reasonableness or denying the motion to dismiss.3 Neither did it
commit a "probable error" that substantially alters the status quo. Because the
order denying dismissal and order of reasonableness are not appealable, we
dismiss Trinity's appeal.
Attorney Fees
The Seftons request attorney fees under RAP 18.1 and 18.9, arguing that
Trinity's appeal was frivolous and filed for the purpose of delay.
3 To determine whether the settlement was reasonable, the trial court applied the nine
factor test laid out in Chaussee v. Maryland Cas. Co., 60 Wn. App. 504, 512, 803 P.2d 1339(1991). Trinity offers arguments that substantial evidence does not support three of these factors.
But Trinity's arguments do not persuade us that the trial court made an "obvious error" when
balancing the nine factors to determine reasonableness.
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The court "may order a party or counsel ... who uses these rules for the
purpose of delay [or]files a frivolous appeal ... to pay terms or compensatory
damages to any other party who has been harmed by the delay or the failure to
comply or to pay sanctions to the court." RAP 18.9. An appeal is frivolous if,
considering the entire record, the court is convinced that the appeal presents no
debatable issues upon which reasonable minds might differ, and that the appeal
is so devoid of merit that there is no possibility of reversal. Advocates for
Responsible Dev. v. W. Washington Growth Mgmt. Hearings Bd., 170 Wn.2d
577, 580, 245 P.3d 764(2010)(citing Tiffany Family Trust Corp. v. City of Kent,
155 Wn.2d 225, 241, 119 P.3d 325 (2005)). All doubts as to whether the appeal
is frivolous should be resolved in favor of the appellant. Id.Regardless of the merits of this appeal, we would decline to exercise our
discretion to grant the Seftons' request for attorney fees. The Seftons had the
opportunity to mitigate the expense and delay caused by this appeal by bringing
a motion to dismiss after Trinity filed its notice of appeal. They did not do so. The
request for attorney fees is denied.
Dismissed.
WE CONCUR:
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