Hai En Mai & Julianne Stutzman-mai, Apps V. Phillips Law Firm

• Court: Court of Appeals of Washington
• Decided: December 18, 2023
• Docket: 84922-1
• Status: Unpublished

Opinion

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

HAI EN MAI and JULIANNE No. 84922-1-I STUTZMAN-MAI, husband and wife, and the marital community composed DIVISION ONE thereof,

Appellants,

v.

PHILLIPS LAW FIRM, PLLC, a UNPUBLISHED OPINION Washington Limited Liability Company; RALPH GLENN PHILLIPS and KATHRYN MOORE PHILLIPS, husband and wife, and the marital community composed thereof,

Respondents.

BOWMAN, J. — Hai En Mai retained Philips Law Firm PLLC (PLF) to

recover personal injury and property damages after a car accident. Because of

PLF’s negligence, an arbitrator dismissed his lawsuit and the trial court denied a

request for trial de novo. Hai En Mai and his wife, Julianne Stutzman-Mai, then

sued PLF for professional negligence, breach of fiduciary duty, breach of

contract, and violation of the Consumer Protection Act (CPA), chapter 19.86

RCW. PLF admitted its conduct was negligent but denied the remaining claims.

It moved to dismiss the CPA claim under CR 12(c) for failure to show that its

alleged deceptive acts caused injury to the Mais’ business or property. The trial

court granted the motion, and the Mais appeal. We affirm. No. 84922-1-I/2

FACTS

On October 4, 2017, Hai En Mai was driving home from work when

another driver failed to yield and their cars collided. The police cited the other

driver for causing the collision. Hai En Mai suffered injuries to his person and his

car. On May 7, 2018, Hai En Mai retained PLF to sue the other driver and

recover damages.

In September 2020, almost three years after the collision, PLF sued the

other driver in Snohomish County Superior Court on behalf of Hai En Mai. PLF

did not bring a spousal consortium claim on behalf of Stutzman-Mai, initiate

discovery, respond to the defendant’s requests for admission (RFAs), or

communicate settlement offers to the Mais. According to Hai En Mai, the first

time he met a PLF attorney was an hour before his deposition in August 2021.

In November 2021, the personal injury suit went to arbitration. The

arbitrator dismissed the lawsuit because PLF did not respond to two RFPs that

established “liability for the collision on the part of [Hai En Mai].” Then, in

December 2021, PLF requested a trial de novo in superior court. But PLF filed

the request late and did not have Hai En Mai sign the request as required under

RCW 7.06.050(1).1 So, the court dismissed the request and ordered Hai En Mai

to pay the other driver $1,248 for her attorney fees. On August 10, 2022, the

Mais sued PLF, PLF owner Ralph Phillips, and Phillips’ wife Kathryn Phillips

1 Under RCW 7.06.050(1), within 20 days after the arbitrator files its decision with the superior court, “any aggrieved party may file with the clerk a written notice of appeal and request for a trial de novo in the superior court on all issues of law and fact. The notice must be signed by the party.”

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(collectively PLF), asserting claims for professional negligence, breach of

fiduciary duty, breach of contract, and violation of the CPA.

As to their CPA claim, the Mais’ alleged that they hired PLF because it

held itself out as specializing in representing plaintiffs in personal injury cases,

but the firm’s advertising about its success in such cases is deceptive. The Mais

claimed PLF promotes litigation outcomes on its website for clients that PLF did

not actually handle. And the website falsely claims “ ‘$1 Billion+ Damages

Awarded’ and ‘10,000+ Victims Helped.’ ” The Mais alleged that “[t]he acts and

omissions of [PLF] constitute unfair and deceptive acts in the conduct of trade or

commerce, affecting the public interest, and violate the [CPA], as a proximate

cause of which Hai En Mai has been damaged.” They sought money damages,

treble damages, prejudgment interest, attorney fees and costs, and an injunction

“prohibiting [PLF] from engaging in unfair or deceptive advertising.”

In its answer to the complaint, PLF admitted it negligently “fell below the

standard of care” by not responding to RFAs or properly requesting a trial de

novo, but it denied it owed any duty to Stutzman-Mai. And it denied the other

claims. So, in October 2022, PLF moved under CR 12(c) to dismiss the Mais’

CPA and breach of contract claims. PLF argued that the Mais could not show an

injury to their business or property as required under the CPA and that it did not

breach its contract with Hai En Mai. The trial court granted the motion to dismiss

the CPA claim but denied the motion to dismiss the breach of contract claim.

The Mais appeal.

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ANALYSIS

The Mais argue that the trial court erred by granting PLF’s CR 12(c)

motion dismissing their CPA claim. We disagree.

CR 12(c) provides, “After the pleadings are closed but within such time as

not to delay the trial, any party may move for judgment on the pleadings.” We

treat a CR 12(c) motion for judgment on the pleadings “ ‘identically to a CR

12(b)(6) motion’ ” to dismiss2 and review the trial court’s decision de novo.

Wash. Trucking Ass’ns v. Emp’t Sec. Dep’t, 188 Wn.2d 198, 207, 393 P.3d 761

(2017) (quoting P.E. Sys., LLC v. CPI Corp., 176 Wn.2d 198, 203, 289 P.3d 638

(2012)). “Dismissal under either subsection is ‘appropriate only when it appears

beyond doubt’ that the plaintiff cannot prove any set of facts that ‘would justify

recovery.’ ” Id. (quoting San Juan County v. No New Gas Tax, 160 Wn.2d 141,

164, 157 P.3d 831 (2007)). To this end, “[a]ll facts alleged in the complaint are

taken as true, and we may consider hypothetical facts supporting the plaintiff’s

claim.” FutureSelect Portfolio Mgmt., Inc. v. Tremont Grp. Holdings, Inc., 180

Wn.2d 954, 962-63, 331 P.3d 29 (2014).

The CPA prohibits “[u]nfair methods of competition and unfair or deceptive

acts or practices in the conduct of any trade or commerce.” RCW 19.86.020. To

succeed on a CPA claim, a plaintiff must establish (1) an unfair or deceptive act

(2) in trade or commerce (3) that affects the public interest, (4) injury to their

business or property, and (5) a causal link between the unfair or deceptive act

2 CR 12(b)(6) allows a defendant to move to dismiss a claim when the plaintiff fails to state a claim on which a court can grant relief.

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and their injury. Trujillo v. Nw. Tr. Servs., Inc., 183 Wn.2d 820, 834-35, 355 P.3d

1100 (2015).

We construe injury to property or business broadly. Keyes v. Bollinger, 31

Wn. App. 286, 296, 640 P.2d 1077 (1982). The plaintiff does not have to prove

monetary damages, and nonquantifiable injuries will suffice. Nordstrom, Inc. v.

Tampourlos, 107 Wn.2d 735, 740, 733 P.2d 208 (1987); see also Folweiler

Chiropractic, PS v. Am. Fam. Ins. Co., 5 Wn. App. 2d 829, 839, 429 P.3d 813

(2018) (mere delay in use of property or receipt of payment is an injury under the

CPA). A plaintiff shows injury by proving their “ ‘property interest or money is

diminished because of the unlawful conduct even if the expenses caused by the

statutory violation are minimal.’ ” Panag v. Farmers Ins. Co. of Wash., 166

Wn.2d 27, 57, 204 P.3d 885 (2009) (quoting Mason v. Mortg. Am., Inc., 114

Wn.2d 842, 854, 792 P.2d 142 (1990)). But personal injury damages are not

recoverable under the CPA. Id.

Citing Ambach v. French, 167 Wn.2d 167, 179 n.6, 216 P.3d 405 (2009),

PLF argues that the Mais’ CPA claim is “a ‘backdoor’ attempt to recover their

personal injury damages through the more punitive CPA.” We disagree.

In Ambach, the plaintiff contracted a staph infection following shoulder

surgery and sued the surgeon for professional negligence resulting in physical

injury and violation of the CPA. Id. at 170. The plaintiff argued her CPA injury

was “ ‘part and parcel of a personal injury claim.’ ” Id. at 174. The trial court

dismissed the CPA claim because the plaintiff alleged personal injury, not injury

to her “ ‘business or property.’ ” Id. at 170-71. Our Supreme Court agreed with

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the trial court, reasoning that where a plaintiff is both physically and economically

injured by one act, the economic damages flowing from the physical injury are

not an “injury to ‘business or property.’ ” Id. at 174. The court noted that the

legislature did not design the CPA “to give personal injury claimants . . . backdoor

access to compensation they were denied in their personal injury suits.” Id. at

179 n.6.

The Mais’ claim is different. The Mais do not allege that PLF caused them

personal injury. Instead, they sued PLF for professional negligence in the

mismanagement of their personal injury claim and for violating the CPA by

engaging in deceptive advertising. So, there is no danger the Mais may use their

CPA claim as backdoor access to compensation for Hai En Mai’s personal

injuries. Even so, to survive the motion for judgment on the pleadings, the Mais

must allege facts that show PLF’s deceptive advertising caused injury to their

business or property.

The Mais’ argue that PLF’s deceptive conduct caused them five kinds of

economic injury recoverable under the CPA. They claim (1) PLF denied them

the prompt use of Hai En Mai’s personal injury award, (2) Hai En Mai suffered an

adverse judgment awarding the other driver attorney fees, (3) he incurred time

away from work for a “doomed” arbitration, (4) treble damages and attorney fees,

and (5) an injunction preventing PLF from engaging in deceptive advertising. We

address each alleged injury in turn.

6 No. 84922-1-I/7

First, the Mais’ argue that PLF deprived them of a prompt and successful

financial recovery in their personal injury lawsuit. Quoting Folweiler and citing

Sorrel, they argue that “ ‘a mere delay in use of property or receiving payment’

also constitutes ‘an injury under the CPA.’ ” Folweiler, 5 Wn. App. 2d. at 839;

Sorrel v. Eagle Healthcare, Inc., 110 Wn. App. 290, 298, 38 P.3d 1024 (2002).

In Folweiler, chiropractic medical providers filed a class action complaint

alleging that an insurer’s deceptive practices violated the CPA. 5 Wn. App. 2d at

833-34. The class members argued they “ ‘sustained injury to their business

caused by [the insurer]’s practice in the form of reduced payments, delay in

payment of reasonable medical expenses, out of pocket administrative costs or

added expenses, [or] business interruption or inconvenience.’ ” Id. at 840.3 We

held that a delay in reimbursement for billings covered by an insurer is a

cognizable CPA injury. Id. at 839.

In Sorrel, the widower of a nursing home resident sued the nursing home

for its failure to refund his prepayment within 30 days as required under RCW

70.129.150(1). 110 Wn. App. at 293-94. We noted that the widower established

“injury” under his CPA claim by showing that the defendant’s unfair or deceptive

act or practice deprived him of the use of his property. Id. at 298-99.

Unlike the plaintiffs in Folweiler and Sorrel, the Mais do not allege that

PLF’s deceptive act or practice caused a delay in reimbursement for services

they provided or refund of payments they made. Instead, the Mais allege PLF’s

conduct caused a delay in the recovery of Hai En Mai’s personal injury damages.

3 Second alteration in original.

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But Hai En Mai’s personal injury recovery is an expectation. And the Mais cite no

authority that the inability to use property they expect to acquire is an injury under

the CPA. When a party cites no authority in support of a proposition, we need

not search out authorities and may assume that the party, after diligent search,

found none. City of Seattle v. Levesque, 12 Wn. App. 2d 687, 697, 460 P.3d 205

(2020).

Second, the Mais argue that PLF’s failure to properly request a trial de

novo resulted in “a judgment of $1,248 awarded against [Hai En Mai] in favor of

the driver” who caused his injuries. Assuming that an adverse judgment

amounts to injury to business or property, the Mais’ argument fails because the

court did not enter a judgment. Instead, when the trial court denied Hai En Mai’s

request for a trial de novo, it issued an order awarding the prevailing party

attorney fees. PLF then paid the attorney fees on Hai En Mai’s behalf. So, the

order was not reduced to a judgment against Hai En Mai, and the Mais suffered

no economic injury.

Third, the Mais argue that PLF’s deceptive acts “required [Hai En Mai] to

dedicate time away from work to an arbitration that was doomed.” Indeed, a

plaintiff may recover damages when a deceptive act causes the plaintiff to take

time away from their business. Panag, 166 Wn.2d at 57 (citing Sign-O-Lite

Signs, Inc. v. DeLaurenti Florists, Inc., 64 Wn. App. 553, 564, 825 P.2d 714

(1992)). But PLF’s deceptive acts did not cause Hai En Mai to attend arbitration.

Instead, his personal injury claim was subject to mandatory arbitration under King

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County Local Civil Arbitration Rule (LCAR) 2.1(a).4 As a result, the Mais fail to

show that this injury flows from PLF’s deceptive acts.

Fourth, the Mais argue the CPA entitles them to treble damages and

attorney fees that they are otherwise unable to recover. This is true. See RCW

19.86.090. But a plaintiff must establish they suffered damages before they can

treble them. So, a CPA plaintiff may not treble damages unless they can show

injury to their business or property. Id.; Mason, 114 Wn.2d at 855; St. Paul Fire

& Marine Ins. Co. v. Updegrave, 33 Wn. App. 653, 660, 656 P.2d 1130 (1983).

Likewise, the trial court awards attorney fees to only the prevailing party under

the CPA. Id.; see Sign-O-Lite, 64 Wn. App. at 566. And to prevail on a CPA

claim, the plaintiff must show injury to their “business or property.” Id. The Mais

fail to do so.

Finally, the Mais argue that under the CPA, they are entitled to an

injunction preventing PLF from similar conduct. But, like treble damages and

attorney fees, the CPA does not authorize injunctive relief for a person who fails

to show injury to their business or property. Girard v. Myers, 39 Wn. App 577,

589, 694 P.2d 678 (1985); see RCW 19.86.090.

4 Under LCAR 2.1(a), a claim “filed after September 1, 2019 is subject to civil arbitration if it does not exceed one hundred thousand dollars ($100,000), exclusive of attorney fees, interest and costs.”

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The trial court did not err by dismissing the Mais’ CPA claim under CR

12(c) because they alleged no set of facts that show PLF’s deceptive conduct

injured their business or property. We affirm.

WE CONCUR: