Daniel Luchterhand, Resp. v. Michael Crossan Dba Lk. Washington Boat Ctr., App.

• Court: Court of Appeals of Washington
• Decided: March 2, 2015
• Docket: 71208-0
• Status: Unpublished

Opinion

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

DANIEL LUCHTERHAND, an individual, No. 71208-0-1 Respondent, DIVISION ONE v.

UNPUBLISHED OPINION CHARLES "CHARLIE" SILVERS, an individual; and U.S. ENGINES CORPORATION, a Washington corporation, d/b/a U.S. ENGINE, INC., and U.S. ENGINES, and U.S. MARINE ENGINES CORPORATION, and U.S. ENGINE AND IMPORT ENGINE, INC.; and LAKE WASHINGTON BOAT, INC., d/b/a LAKE WASHINGTON BOAT 3= Pro CENTER, i •'1.

Defendants, V,'} :-.'-> MICHAEL CROSSAN, an individual, and '.:")

ROWENA CROSSAN, an individual, d/b/a LAKE WASHINGTON BOAT CENTER,

Appellants. FILED: March 2, 2015

Appelwick, J. — The Crossans appeal the trial court's denial of their CR 60 motion

to vacate a judgment on an arbitration award. The Crossans sought a trial de novo.

Luchterhand sought judgment on the arbitration award, arguing that the Crossans had

waived their right to trial de novo by not participating at the arbitration without good cause.

The trial court struck the Crossans' request for trial de novo and entered judgment in favor

of Luchterhand. The Crossans moved to vacate the judgment, claiming that Michael's

sickness on the day of the arbitration constitutes an unexpected illness or misfortune that

is a basis for vacation of the judgment under CR 60. The unexpected illness or misfortune

did not prevent the Crossans from participating in the litigation regarding their request for No. 71208-0-1/2

a trial de novo. The denial of the trial de novo necessarily resolved that the Crossans did

not have good cause for failing to participate in the arbitration. We affirm.

FACTS

Daniel Luchterhand purchased a boat engine from U.S. Engine Inc. U.S. Engine,

Inc. was governed by Michael Crossan and Rowena Crossan.1 Luchterhand experienced

mechanical difficulty with the engine on several occasions. After attempts to repair the

engine failed, Luchterhand sued the Crossans for violations of the Consumer Protection

Act, chapter 19.86 RCW, and breach of warranty.

The dispute proceeded to arbitration. The arbitration was initially scheduled for

May 3, 2013. The Crossans requested that the arbitration be delayed so they could obtain

counsel and adequately prepare. Consequently, the arbitration date was extended until

May 20, 2013. On May 17, 2013, the Crossans requested another continuance, because

they planned to make an evidentiary video on May 15, 2013 and the video would not be

ready for the arbitration. The arbitrator, Robert Henry, agreed and the arbitration was

rescheduled to June 10, 2013. Luchterhand's counsel then requested a continuance

because of a family vacation. The arbitration was then set for June 17, 2013 at 9 a.m.

On June 17, 2013 at 8:45 a.m., Michael contacted Henry and said that he "cannot

even e[-]mail correctly just sick." In that same e-mail he wrote a few more sentences

defending against the lawsuit. Henry responded that the hearing would not be postponed

again and that he expected both parties to arrive at 9 a.m. Earlier that morning at 8:35

a.m., Michael e-mailed Luchterhand's attorney and said that he was dehydrated due to

1 Moving forward we refer to the Crossans by their first names for clarity. No disrespect is intended. No. 71208-0-1/3

hot weather and could not attend the arbitration. Michael explained his illness in one

sentence, but continued on for several paragraphs in which he defended against the

lawsuit. Neither Michael nor Rowena appeared at the arbitration on June 17. But, the

arbitration proceeded and Luchterhand presented over three hours of testimony,

evidence, and argument. Henry entered an arbitration award in favor of Luchterhand on

June 25, 2013—over a week after the arbitration was held. The arbitration award

indicated that the Crossans failed to participate at the hearing.

On July 3, 2013, the Crossans filed a request for a trial de novo with declarations

of Michael and Rowena attached. Michael's declaration explained that he has cancer

and that when he becomes ill he is unable to move for days. He claimed he was ill on

the date of the arbitration. Rowena's declaration explained that Michael got sick the

afternoon before the arbitration and was not able to move again until the following day.

She cited to Michael's cancer as the reason for their absence and said, "[A] full report is

available from his doctors [at the University of Washington] hospital and Seattle cancer

care center."

On July 31, 2013, Henry issued an amended arbitration award including attorney

fees and costs for Luchterhand. The award cited to MAR 5.4 and indicated that the award

was based partly on the failure of the Crossans to participate at the arbitration.

On August 8, 2013, the Crossans filed a request for a trial de novo from the July

31, 2013 award. The Crossans' request was timely as it was made within the 20 day

period mandated by MAR 7.1. Subsequently, on August 23, 2013, Luchterhand filed a

motion to strike the request for a trial de novo. Luchterhand argued that the Crossans

waived their right to request a trial de novo pursuant to MAR 5.4 and that they failed to No. 71208-0-1/4

show good cause to the arbitrator for their absence. That same day, Luchterhand filed a

motion for judgment on the arbitration award. On September 5, 2013, the Crossans

responded to Luchterhand's motion2 stating that their absence at the arbitration was due

to Michael's pain resulting from his cancer treatments. They argued that Michael's illness

was not a valid reason to deny their request for a trial de novo. On September 6, 2013,

Luchterhand filed a reply memo regarding his motion to strike the Crossans' request for

a trial de novo.

On September 12, 2013, the trial court granted Luchterhand's motion to strike the

Crossans' request for a trial de novo without oral argument. That same day, the trial court

entered judgment on the arbitration award, also without oral argument. On October 3,

2013, represented by counsel for the first time,3 the Crossans filed a CR 60 motion to

vacate the judgment. They argued that Michael's illness constituted an unavoidable

casualty or misfortune as contemplated by CR 60(b)(9) that prevented them from

defending at the arbitration. Among other evidence, the Crossans attached the

declaration of Dr. Chet Jangala who claimed that on June 17, 2013, he received a call

from Rowena stating that Michael was having severe stomach pain and cramping. Dr.

Jangala said that he advised Rowena to have Michael stay in bed or risk damage to his

small intestine.

2 It appears that the Crossans' motion was a response to Luchterhand's motion to strike request for a trial de novo. 3The Crossans claimed they needed the first continuance of the arbitration to find legal counsel, but it does not appear that they obtained counsel until this time. No. 71208-0-1/5

The trial court held a show cause hearing on the Crossans' CR 60 motion on

November 1, 2013. After hearing argument from the parties, the trial court denied the

Crossans' motion and awarded fees to Luchterhand for responding.

The court opined that as of the date of the show cause hearing, there was still no

declaration from a doctor expressing a medical opinion that Michael was medically unable

to attend the arbitration. The trial court noted that Dr. Jangala's declaration does not even

mention the time he spoke to Rowena and that there was no mention of the call to Dr.

Jangala or of Dr. Jangala's advice in Michael's e-mails to Henry and Luchterhand's

counsel. The trial court also considered the fact that the arbitrator did not have very much

information about Michael's illness at the time of the hearing. The court concluded that

there was an insufficient showing for relief under CR 60 and that an evidentiary hearing

was unnecessary. The Crossans appeal.

DISCUSSION

I. Crossans' Request for Relief under CR 60(b)(9)

For good cause shown, an arbitrator may allow a party absent from an arbitration

an opportunity to appear at a subsequent hearing before making an award. MAR 5.4. A

party who fails to participate in arbitration without good cause waives the right to a trial

de novo. ]d.

Here, the arbitration proceeded as scheduled on June 17, 2013. On June 19,

2013, Henry informed both parties that the hearing went forward to conclusion and that

he would make his decision in a few days. On June 25, 2013, Henry entered his initial

judgment based, in part, on MAR 5.4 and the Crossans' failure to participate at the

arbitration. Henry entered his initial judgment on June 25, 2013—over one week after he No. 71208-0-1/6

heard Luchterhand's case, one week after Michael's symptoms began to subside,4 and

six days after Henry informed the parties that he was in the process of making his

decision. There is no indication inthe record that the Crossans contacted Henry between

June 17, 2013 and the day Henry entered the judgment in an attempt to make a showing

of good cause. The only information Henry had about Michael's illness when he entered

the arbitration award was what he gleaned from Michael's June 17th e-mail—that he was

"just sick."

On July 3, 2013, the Crossans brought the issue of good cause for their absence

before the trial court. The Crossans filed a request for a trial de novo and attached

declarations from both Michael and Rowena. The Crossans explained that Michael has

colon cancer and had been too ill to attend the arbitration. The Crossans filed another

request for a trial de novo after the arbitration award was amended. On September 5,

2013, in their answer to Luchterhand's motion to strike their request for a trial de novo,

Michael argued that his illness was a sufficient reason to grant a trial de novo. In this

response to Luchterhand's motion, unlike in their declarations attached to their request

for a trial de novo, Michael referred the court to specific doctors at the Seattle Cancer

Center (Dr. Whiting) or the University of Washington Hospital (Dr. Gary Mann). Michael

claimed that the doctors would be willing to provide letters attesting to his cancer

treatment. Michael also offered to sign a release allowing the court to contact the doctors

directly.

4 In her declaration attached to the Crossans' request for a trial de novo, Rowena indicated that Michael was regaining his strength on May 18, 2013. As the arbitration was on June 17, 2013, we assume that Rowena meant June 18, 2013. No. 71208-0-1/7

By requesting a trial de novo, the Crossans were effectively arguing to the trial

court that Michael's illness constituted sufficient good cause under MAR 5.4 to avoid

waiving the right to a trial de novo. Before the trial court could enter judgment on the

arbitration award for Luchterhand, it had to resolve whether the Crossans did, in fact,

waive their right to a trial de novo by failing to participate at the arbitration. Based on the

evidence submitted, the trial court denied the Crossans' request for a trial de novo and

entered judgment on the arbitration award. By virtue of this decision and subsequent

entry of judgment, the trial court effectively ruled that the Crossans failed to show the

requisite good cause necessary to avoid waiving their right to a trial de novo under MAR

5.4.

Therefore, the appropriate challenge on appeal is whether the trial court abused

its discretion when it ruled that the Crossans failed to show sufficient good cause to

warrant a trial de novo. Where the decision or order of the trial court is a matter of

discretion, it will not be disturbed on review except on a clear showing of abuse of

discretion—discretion that is manifestly unreasonable, or exercised on untenable

grounds, or for untenable reasons. Pvbas v. Paolino. 73 Wn. App. 393, 399, 869 P.2d

427(1994).

Based on the record before us, at the time the trial court ruled on the Crossans'

request for trial de novo, there was little evidence supporting the Crossans' argument that

Michael's sickness constituted good cause. The only evidence was the Crossans'

declarations and their response to Luchterhand's motion to strike, which reiterated what

was in the Crossans' declarations. The trial court had no declaration from a doctor—only

declarations from Michael and Rowena that Michael was sick on the day of the arbitration, No. 71208-0-1/8

that Michael suffers from colon cancer, and that he has doctors that treat him at two

different treatment facilities. The Crossans had not provided any sworn testimony that

Michael was not able to attend the arbitration. Luchterhand's motion to strike informed

the trial court that he repeatedly, fruitlessly requested that the Crossans produce evidence

to his attorney that Michael was too ill to attend the arbitration. The Crossans made no

attempt to explain to the trial court why Rowena was not able to attend the arbitration to

protect their interests. Luchterhand also informed the trial court that the arbitration had

already been delayed twice at the Crossans' request. The trial court did not abuse its discretion in striking the Crossans' request for a trial de novo and subsequently entering

a judgment on the arbitration award.

The Crossans then moved to vacate the judgment on the arbitration award. They

contended that under CR 60(b)(9), they adequately showed that casualty or misfortune

prevented their attendance at the arbitration and that the judgment should be set aside. The trial court denied the Crossans' CR 60(b)(9) motion to vacate. The trial court

reasoned that as of the date of the show cause hearing, despite the addition of Dr.

Jangala's declaration, there was still no evidence that Michael was medically unable to attend the arbitration.

A motion under CR 60(b)(9) is properly directed at the judgment and the

proceeding in the superior court that led to that judgment. See CR 1 ("These rules govern the procedure in the superior court."); CR 60(b) ("On motion and upon such terms as are just, the court may relieve a party . . . from a final judgment."). Based on the record, neither casualty nor misfortune prevented the Crossans from properly advocating for their request for a trial de novo or defending against entry of judgment in the superior court.

8 No. 71208-0-1/9

They defended before the superior court their request for a trial de novo and defended

against Luchterhand's argument that the Crossans failed to participate in the arbitration

without good cause. They asserted before the superior court that casualty or

misfortune—Michael's illness—prevented their participation in the arbitration proceeding.

Repeating those arguments and adding additional evidence was akin to a motion to

reconsider the denial of the motion for trial de novo, even though framed as a motion

under CR 60(b)(9). The Crossans were not entitled to a second bite at that apple using

CR 60. Relief under CR 60(b)(9) is plainly unavailable on these facts.

We acknowledge that Luchterhand did not object to the trial court's consideration

of the motion on these grounds. Reaching the merits of the motion as argued, the

evidence in the record supports the trial court's conclusion that Michael had not

demonstrated that he was medically unable to attend the arbitration. The trial court did

not abuse its discretion by denying the Crossans relief from judgment under CR 60(b)(9).

II. Luchterhand's Attorney Fees

Luchterhand argues that he is entitled to attorney fees and costs for this appeal.

MAR 7.3 stipulates that the court shall assess costs and reasonable attorney fees

against a party who appeals an arbitration award and fails to improve its position on the

trial de novo. MAR 7.3 does not require the trial de novo to proceed on the merits in order

to trigger a fee and cost award on appeal. See Kim v. Pham, 95 Wn. App. 439, 446-47,

975 P.2d 544 (1999). The Kim court interpreted MAR 7.3 to require a mandatory award

of attorney fees when a party requests a trial de novo and does not improve on their

position at trial because they failed to comply with the requirements for proceeding to a

trial de novo. Id, One requirement of proceeding to a trial de novo is attendance at the No. 71208-0-1/10

arbitration. See MAR 5.4 (failure to participate at arbitration without good cause waives

the right to a trial de novo).

The Crossans timely requested a trial de novo, but their request was denied. The

Crossans failed to comply with the requirements of MAR 5.4. As discussed above, the

Crossans had an opportunity to provide good cause for their absence at the arbitration

and they failed to do so. Therefore, the Crossans failed to comply with the requirements

for proceeding to a trial de novo. As the Crossans have not improved their position, we

grant Luchterhand's request for attorney fees and costs on appeal.

We affirm.

WE CONCUR:

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