Johnston v. Beneficial Management Corp. of America

614 P.2d 661, 26 Wash. App. 671, 1980 Wash. App. LEXIS 2153
CourtCourt of Appeals of Washington
DecidedJuly 7, 1980
Docket7594-2-I
StatusPublished
Cited by12 cases

This text of 614 P.2d 661 (Johnston v. Beneficial Management Corp. of America) 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
Johnston v. Beneficial Management Corp. of America, 614 P.2d 661, 26 Wash. App. 671, 1980 Wash. App. LEXIS 2153 (Wash. Ct. App. 1980).

Opinions

Swanson, J.

—Roger M. Leed, counsel for plaintiffs in a class action suit, appeals from an order holding him in contempt of court for violating a court order forbidding communications without prior court approval with actual or potential class members who were not formal parties to the action.

A brief procedural history is necessary to an understanding of the arguments presented on appeal. In March 1972, purchasers of merchandise on retail installment contracts commenced suit, alleging the sellers had violated several consumer protection statutes. The suit was certified as a [673]*673class action in October 1974. In April 1973, the court had entered an "Agreed Order for Prevention of Potential Abuse of Class Action," presented by Leed, which recited in pertinent part as follows:

All parties hereto and their counsel are hereby forbidden, directly or indirectly, orally or in writing, to communicate concerning such action with any potential or actual class member not a formal party to the action without the consent of and approval of the communication by order of the Court. . . . The communications forbidden by this rule include, but are not limited to, (a) solicitation, directly or indirectly, of legal representation of potential and actual class members who are not formal parties to the class action; . . . The obligations and prohibitions of this rule are not exclusive. All other ethical, legal, and equitable obligations are unaffected by this rule.
This order does not forbid (1) communications between an attorney and his client or a prospective client who has, on the initiative of the client or prospective client, consulted with, employed, or proposed to employ the attorney; or (2) communications occurring in the regular course of business or office which do not have the effect of soliciting representation by counsel, or misrepresenting the status, purposes, or effect of the action and orders therein.

The plaintiffs settled with one group of defendants in 1977, and, in February 1978, a second group of defendants agreed to settle. A notice of that proposed settlement was mailed to class members. Under the terms of the settlement, defendants were allowed to apply to the court, prior to distribution of the settlement funds, for reimbursement of amounts of the fund that exceeded reasonable claims. On May 4, 1978, Leed's legal assistant wrote to class members not formal parties to the action who had not filed a claim in response to the notice of proposed settlement. The letter was written without either the consent or approval of the court or the knowledge of the defendants or their counsel. [674]*674The letter reminded class members that they had to submit claim forms by May 19, 1978, in order to receive benefits from the settlement.2

The defendants filed a motion and affidavit for order to show cause why Leed and Alice V. Poggi, his legal assistant, should not be held in contempt of court and required to indemnify the defendants because of the alleged secret communication to class members without approval of the court. After hearing testimony, the trial judge issued an order on April 6, 1979, which stated in part as follows:

It Is Hereby Ordered, Adjudged and Decreed that counsel for the plaintiffs, Roger M. Leed, had improper secret communications with actual and potential members of the plaintiff class by his correspondence to them dated May 4, 1978, in violation of an Agreed Order for Prevention of Potential Abuse of Class Action entered herein on April 4, 1973, and is therefore in Contempt of Court within the meaning of RCW 7.20.010.

The court imposed a fine of $100 and directed Leed to pay to defendants' attorneys the sum of $315 for attorneys' fees [675]*675but denied damages on the basis that the letter, even though improper, generated additional legitimate claims which effectuated the purpose of the court-approved settlement.

The facts above recited are not in dispute. Appellant Leed nevertheless contends that his May 4, 1978, reminder letter, even though sent to class members not parties to the action without the knowledge or consent of defendants' counsel or the approval of the court, did not violate the prior April 4, 1973, order because the terms of the order itself demonstrate that the letter falls within two categories of communications not requiring court approval. Appellant's first argument is that an attorney-client relationship occurred with the recipients of the letter because the class had been certified, settlement had been agreed to, and the recipients of the letter had decided to participate in the class. Appellant's second argument is that his May 4, 1978, letter fell within the exception in the order for communication occurring in the regular course of business. Appellant also argues that the court order violated his First Amendment rights.

We reject all of appellant's arguments and uphold the order finding Roger M. Leed in contempt of court.

A brief review of the court's contempt power is appropriate. We begin any discussion of contempt power with the recital of the universally accepted rule that a court of general jurisdiction has inherent power to punish for contempt—a power which the legislature cannot abridge. Deskins v. Waldt, 81 Wn.2d 1, 499 P.2d 206 (1972); Blanchard v. Golden Age Brewing Co., 188 Wash. 396, 63 P.2d 397 (1936). The court in Deskins stated at page 3:

Upon the authority of Blanchard and the numerous cases cited therein, we hold the power of a constitutional court of general jurisdiction to punish for contempt is an inherent power of the court which cannot be taken away or abridged by any act of the legislature.

The Deskins court also reaffirmed the general rule that the duty to obey the order of a court exists even when the order [676]*676is erroneous if the order is within the court's jurisdiction. A general contempt statute, RCW 7.20.010, enumerates 12 acts or omissions which may constitute contempt of court and result in either punishment or coercive relief.

In the instant case, the court specifically found the appellant in contempt of court within the meaning of RCW 7.20.010. We agree. RCW 7.20.010 states in pertinent part as follows:

The following acts or omissions, in respect to a court of justice or proceedings therein, are deemed to be con-tempts of court:
(4) Deceit, abuse of the process or proceedings of the court by a party to an action, suit or special proceeding.
(5) Disobedience of any lawful judgment, decree, order or process of the court.

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Johnston v. Beneficial Management Corp. of America
614 P.2d 661 (Court of Appeals of Washington, 1980)

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Bluebook (online)
614 P.2d 661, 26 Wash. App. 671, 1980 Wash. App. LEXIS 2153, Counsel Stack Legal Research, https://law.counselstack.com/opinion/johnston-v-beneficial-management-corp-of-america-washctapp-1980.