Hutson v. Costco Wholesale Corp.

80 P.3d 615, 119 Wash. App. 332, 2003 Wash. App. LEXIS 2867
CourtCourt of Appeals of Washington
DecidedDecember 8, 2003
DocketNo. 51863-1-I
StatusPublished
Cited by6 cases

This text of 80 P.3d 615 (Hutson v. Costco Wholesale Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hutson v. Costco Wholesale Corp., 80 P.3d 615, 119 Wash. App. 332, 2003 Wash. App. LEXIS 2867 (Wash. Ct. App. 2003).

Opinion

Coleman, J.

Rehrig International, Inc., appeals the trial court’s denial of its motion for attorney fees. Under MAR 7.3, the party requesting a trial de novo must pay attorney fees if that party does not improve its position at the trial de novo. Rehrig argues that its codefendant, Costco Wholesale Corporation, did not improve its position because both the arbitrator and the jury found that Rehrig was not liable on the plaintiff’s claim. Costco argues that it [334]*334improved its position because its liability to the plaintiff was reduced by $20,000. We hold that Costco did improve its position and affirm the trial court’s ruling because Costco (1) received a reduced damages judgment, (2) did not have a claim against Rehrig, and (3) could not have removed Rehrig from the trial de novo.

Facts

Ellen R. Hutson sued Costco and Rehrig for personal injuries sustained while using a shopping cart owned by Costco and manufactured by Rehrig. The parties submitted to arbitration under MAR 1.2. The arbitrator found Costco liable for $35,000 in damages and Rehrig not liable. Costco requested a trial de novo. A jury found Costco liable and Rehrig not liable, but reduced the damages to $15,000. Rehrig filed a motion against Costco for attorney fees, expert witness fees, and costs under MAR 7.3. The trial court denied Rehrig’s motion. Rehrig filed a timely notice of appeal.

Standard of Review

Construction of statutes and court rules are issues of law that we review de novo. Stuckey v. Dep’t of Labor & Indus., 129 Wn.2d 289, 295, 916 P.2d 399 (1996); Mei Tran v. Yue Han Yu, 118 Wn. App. 607, 611, 75 P.3d 970 (2003).

Discussion

Attorney fees may be awarded only when specifically authorized by statute, agreement of the parties, or under equity. Christie-Lambert Van & Storage Co. v. McLeod, 39 Wn. App. 298, 301, 693 P.2d 161 (1984). The imposition of attorney fees is mandated by RCW 7.06.060(1) and MAR 7.3 when a party appeals an arbitration ruling and does not improve its position at the trial de novo. RCW 7.06.060(1) provides, “The superior court shall assess costs and reasonable attorney fees against a party who appeals [335]*335the [arbitration] award and fails to improve his or her position . . . (Emphasis added.) The language in MAR 7.3 is nearly identical.1 The purpose of the mandatory arbitration scheme is to ease court congestion and discourage meritless claims. Perkins Coie v. Williams, 84 Wn. App. 733, 737-38, 929 P.2d 1215 (1997).

The term “position” used in RCW 7.06.060(1) and MAR 7.3 “was meant to be understood by ordinary people who, if asked whether their position had been improved following a trial de novo, would certainly answer ‘no’ in the face of a superior court judgment against them for more than the arbitrator awarded.” Cormar, Ltd. v. Sauro, 60 Wn. App. 622, 623, 806 P.2d 253 (1991). Here, Costco would certainly answer “yes” if asked whether it improved its position following the trial de novo, as it is now liable for $20,000 less in damages.

Rehrig’s first argument is that the improvement of a party’s “position” is to be determined relative to the party seeking the fee and not to the overall result of the trial. Costco agrees that the overall trial result is not the relevant consideration. Instead, relying on Christie-Lambert, Costco asserts that “attorney fees and costs in multi-party cases . . . are awarded to different parties on the basis of the separate judgments obtained . . . .” Christie-Lambert, 39 Wn. App. at 305. The only judgment obtained, and therefore the only basis for comparison, is the judgment Hutson obtained against Costco. While Costco argues that the focus must be on the judgment obtained by Hutson against Costco, Rehrig argues that the court must focus on the relationship between Costco and Rehrig. Rehrig relies on Sultani v. Leuthy, 86 Wn. App. 753, 943 P.2d 1122 (1997), Yoon v. Keeling, 91 Wn. App. 302, 956 P.2d 1116 (1998), and Christie-Lambert, in arguing that the court must consider whether Costco improved its position relative to Rehrig. The situation with Costco, however, is distinguishable from [336]*336those cases because Costco did not bring claims against Rehrig in either the arbitration or the trial de novo.

Yoon is the only Washington case cited that required a codefendant to pay attorney fees to another defendant. In Yoon, the only issue at the trial de novo was the apportionment of fault between the codefendants. Yoon, 91 Wn. App. at 304. At arbitration, the appealing defendant, Fernau, was apportioned 25 percent of the fault, but at the trial de novo, the jury apportioned 32 percent of the fault to her. Yoon, 91 Wn. App. at 304. The parties settled for a lesser damage amount prior to the trial de novo and, thus, even though her percentage of fault increased, Fernau’s overall amount owing was less after the trial de novo. Although the amount that she owed the plaintiff was less, the court required her to pay her codefendant’s attorney fees and costs because she did not improve her position relative to his claim. Yoon, 91 Wn. App. at 306. Costco’s situation, however, is fundamentally different from the situation presented in Yoon because here the codefendants did not bring affirmative claims against each other. Rehrig argues that this case is controlled by specific language in Yoon, stating that “[i]n deciding whether to award attorney fees and costs, the court considers whether the appealing party improved his position relative to the party seeking fees against him.” Yoon, 91 Wn. App. at 305. Because Yoon is distinguishable, this language must be read in light of the distinctions. Yoon presupposes that there is a claim between the party seeking fees and the appealing party. Here, there were no claims between Rehrig and Costco. Thus, Costco had no “position” to improve upon relative to Rehrig.

Additionally, Rehrig relies on Sultani, where the plaintiff sued four defendants and the arbitrator found the defendants jointly and severally liable for the damages. Sultani, 86 Wn. App. at 755-56. One of the defendants requested a trial de novo. Sultani, 86 Wn. App. at 756. At trial, the court awarded greater overall damages, but the defendants were found only severally liable. Sultani, 86 Wn. App. at 756, 758-59. The plaintiff moved for an award of attorney fees [337]*337under MAR 7.3. Sultani, 86 Wn. App. at 756.

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Bluebook (online)
80 P.3d 615, 119 Wash. App. 332, 2003 Wash. App. LEXIS 2867, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hutson-v-costco-wholesale-corp-washctapp-2003.