Mayra Sanchez, Et Ano V. Stanley Hanson Ii, Et Ano

• Court: Court of Appeals of Washington
• Decided: July 22, 2024
• Docket: 86264-2
• Status: Unpublished

Opinion

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

MAYRA SANCHEZ, an individual; and JASON GARCIA, an individual, No. 86264-2-I

Appellants, DIVISION ONE

v. UNPUBLISHED OPINION

STANLEY HANSON II and JANE DOE HANSON, individually and their marital community,

Defendants

ALLSTATE INSURANCE COMPANY, intervenor,

Respondent.

BIRK, J. — Mayra Sanchez and Jason Garcia were injured in a motor vehicle

collision. After they filed a lawsuit in court and their underinsured motorist (UIM)

carrier, Allstate Insurance Company, intervened, they agreed with the tortfeasor to

arbitrate their claims. They appeal a superior court order denying their motion to

compel Allstate to pay a portion of the arbitrator’s fee. We affirm.

On December 10, 2021, Sanchez and Garcia filed this action in superior

court against Stanley Hanson II and his marital community. They alleged Sanchez

was occupying and Garcia was driving1 a vehicle when Hanson negligently drove

1 The arbitrator’s award later stated that Sanchez was the driver and Garcia

was the passenger. No. 86264-2-I/2

his vehicle into theirs. Sanchez and Garcia prayed for damages for personal injury.

Hanson denied Sanchez’s and Garcia’s allegations.

On August 26, 2022, Allstate moved to intervene in the action. Allstate

asserted that “Plaintiff”—it appears Garcia—was a “permissive driver who was

covered by an insurance policy” issued by Allstate that provided UIM coverage.

Allstate stated it was “on notice” that “Plaintiff’s bodily injury claims may exceed

the applicable policy limits,” and sought to intervene as a party, acknowledging it

would be bound by any judgment if it did not. Plaintiffs’ counsel filed a response

stating they did not object to Allstate’s motion. The superior court granted

Allstate’s motion to intervene.

On September 22, 2022, plaintiffs’ counsel sent Allstate a letter citing

Hamilton v. Farmers Insurance Co. of Washington, 107 Wn.2d 721, 734, 733 P.2d

213 (1987). The letter offered Allstate “the opportunity to ‘buy out’ ” Sanchez’s and

Garcia’s claims against Hanson in exchange for $50,000, equaling Hanson’s

liability insurance limits of $25,000 per person and $50,000 per collision. The letter

stated if Allstate declined the offer, plaintiffs’ counsel “will proceed to pursue a

settlement which may include giving a full release to the defendant.” The letter did

not indicate that Hanson had offered any settlement to Sanchez and Garcia. That

day, Allstate replied, “[Y]ou may proceed with settlement and we will not seek a

buyout.”

On October 6, 2022, Sanchez, Garcia, and Hanson agreed to arbitrate “all

damage claims asserted by plaintiff against all defendants.” They agreed the

lawsuit would be stayed, the arbitration would “resolve all issues regarding liability

2 No. 86264-2-I/3

and damages,” and the arbitrator’s decision would be final. They agreed “the

arbitrator’s fees will be divided evenly by the parties who participate in this

arbitration on a pro rata basis.”

On October 26, 2022, Allstate, through counsel, responded further to the

Hamilton letter, stating that because Hanson’s insurer had not tendered Hanson’s

liability insurance limits and Allstate believed they had not been demanded,

Allstate declined to substitute a payment under Hamilton. Allstate’s counsel’s letter

requested any proposals for private arbitration as well as any agreements between

the plaintiffs and “the underlying tortfeasor.”

On January 12, 2023, plaintiffs’ counsel wrote Allstate’s counsel, indicating

“our firm” and Hanson had agreed to resolve the lawsuit through binding

arbitration. Plaintiffs’ counsel stated Allstate was “invited to participate and

intervene in this binding arbitration.” Allstate objected to arbitration.

On January 17, 2023, Sanchez, Garcia, and Hanson moved to stay

proceedings. Sanchez, Garcia, and Hanson stated they had agreed to arbitrate

Sanchez’s and Garcia’s claims against Hanson, and filed the terms of their

agreement.2 They sought the stay on that basis.

On January 27, 2023, Allstate filed a response opposing a stay. Allstate

asked the superior court to deny the motion to stay, or alternatively, order that

2 As of June 16, 2023, Allstate maintained that it had been given only a

“portion” of the arbitration agreement, and had not been informed of other agreements between the other parties that they deemed “confidential.” The superior court conducted an in camera review of “the confidential designated pages” of the parties’ agreement and found that their confidentiality designation was reasonable, the material was not “relevant” for purposes of discovery under CR 26, and that nothing in the document had “any factual bearing to this matter.”

3 No. 86264-2-I/4

Allstate would “not be bound by any outcome of private arbitration it did not consent

to.” Allstate indicated it had filed a jury demand, and asserted its right to a jury trial

under article I, section 21 of the Washington constitution. Allstate also argued that

if the motion to stay was granted, its ability to obtain discovery would be impeded

by “the more stringent arbitration rules.”

On January 30, 2023, the superior court entered an order granting the

motion to stay as to “Plaintiff and Defendant only,” and ordered the proceedings

were “not stayed as to Intervenor Allstate as [it] did not agree to the stipulation.”

The superior court further ordered, “Allstate is not bound by any outcome of private

arbitration among Plaintiffs and Defendant.” On February 10, 2023, the plaintiffs

filed a reply indicating that Allstate’s response to the motion to stay had been

untimely and otherwise replying to Allstate’s arguments. On February 22, 2023,

the superior court entered an amended order. Based on Allstate’s unexcused

failure to comply with the local rules, the superior court ordered its January 30

order stricken and granted the motion to stay in its entirety. On March 2, 2023,

Allstate moved for reconsideration, asserting among other things its counsel had

inadvertently neglected to calendar the response date for the motion to stay. The

clerk’s papers transmitted to this court do not include an order on Allstate’s motion

for reconsideration.

On April 6, 2023, Allstate’s counsel e-mailed the parties asking to postpone

the then scheduled arbitration date to permit time to subpoena additional

documents. Plaintiffs’ counsel responded that “if Allstate wants to request a

continuance of the arbitration hearing, it must be a participant in the arbitration

4 No. 86264-2-I/5

hearing,” and asked, “Is Allstate participating in the arbitration hearing?” Allstate

responded that it objected to arbitration, was not bound by the arbitration, was not

party to any agreement to arbitrate, and demanded a jury trial. However, Allstate

also said if an arbitration occurred, “Allstate plans to present at the arbitration.” It

indicated that if plaintiffs objected to its presenting evidence at the arbitration, it

would ask the superior court to lift the stay or not apply it to Allstate. Allstate stated

it believed “Plaintiffs” were not complying with their obligations as set forth in the

insurance policy.3

The arbitrator dated an award on September 5, 2023. It was addressed to

plaintiffs’ counsel, Hanson’s counsel, and Allstate’s counsel. The award indicated

“[b]oth Defendants” disputed the extent of Garcia’s injuries. The award did not

discuss a claim by Sanchez, and analyzed only Garcia’s claim. The arbitrator

awarded damages to Garcia in the amount of $33,735.55. On September 7, 2023,

the arbitrator e-mailed the arbitration decision to the parties and asked if a cost bill

was submitted. In response, plaintiffs’ counsel submitted one, and Allstate replied,

“Allstate was not a party to the binding arbitration agreement” and objected to the

payment of any costs.

Between September 26 and 27, 2023, Allstate’s and plaintiffs’ counsel

appeared to negotiate a final resolution of Garcia’s claim in light of the arbitrator’s

award. Allstate argued that because it had previously paid $10,000 in insurance

benefits to Garcia, the arbitrator’s award did not exceed the total insurance

3 The Allstate insurance policy affording UIM benefits, and accordingly the

parties’ respective contractual rights and obligations, are not contained in the record before this court.

5 No. 86264-2-I/6

available from those benefits and Hanson’s available insurance of $25,000, such

that no additional moneys were owed from the UIM coverage. Plaintiffs’ counsel

represented they had charged Garcia $24,402.11 in attorney fees and costs to

obtain the recovery, and the parties agreed that based on Garcia’s recovery of the

$10,000 Allstate had paid, Allstate would bear $7,233.35 of the attorney fees and

costs under Winters v. State Farm Mutual Automobile Insurance Co., 144 Wn.2d

869, 878, 31 P.3d 1164, 63 P.3d 764 (2001). Garcia proposed that Allstate forgo

recovery of its subrogation interest against the recovery and pay the Winters

calculation to Garcia, and Allstate agreed.

By letter dated October 26, 2023, Allstate’s counsel tendered a check for

$7,233.35 to plaintiffs’ counsel. The letter stated plaintiffs’ counsel was authorized

to negotiate the check “only after returning to us the properly executed Stipulation

for and Order of Dismissal.” On November 2, 2023, the check was negotiated with

an endorsement by plaintiffs’ counsel.

On November 13, 2023, the arbitrator issued an invoice addressed to

counsel, including Allstate’s. The next day, Allstate’s counsel responded that

“responsibility for payment” is with plaintiffs’ counsel and another office. Plaintiffs’

counsel replied, asserting that because the arbitration agreement between

Sanchez, Garcia, and Hanson provided that the arbitrator’s fees were to be divided

by the parties who participate in the arbitration, and Allstate participated in the

arbitration, it therefore owed a share of the arbitrator’s fees. Allstate’s counsel

responded, arguing it was not a party to the contract and was not bound by its

provisions. Plaintiffs’ counsel replied, arguing Allstate consented to the contract

6 No. 86264-2-I/7

terms by participating and was unjustly enriched because it received the benefit of

the arbitration.

On December 1, 2023, Sanchez and Garcia moved to compel Allstate to

“pay its fair share of the arbitrator’s fees.” They reiterated the arguments

previously made to Allstate. Allstate opposed the motion. Allstate also sought

enforcement of settlement between it and Garcia by entry of an order of dismissal

with prejudice and without fees or costs.

On December 14, 2023, the superior court denied the motion to compel

Allstate to pay a portion of the arbitrator’s fees, ruling that Allstate was not a

signatory to the contract and that unjust enrichment was not available on the

presented facts.4 On December 21, 2023, the superior court entered an order

granting Allstate’s cross-motion to enforce settlement and dismissing the action.

Sanchez and Garcia timely appealed the superior court’s order denying their

motion to compel Allstate to pay a portion of the arbitrator’s fees.

Sanchez and Garcia’s first theory of recovery5 is that Allstate was bound to

pay a portion of the arbitrator’s fees on the ground it expressly agreed to do so by

4 The superior court also observed the parties had engaged in “lengthy and

contentious litigation compounded with failures to comply with the court rules” that “likely increased the contentiousness of these proceedings.” The superior court concluded the parties “failed to sufficiently communicate expectations and requirements of participation to a non-signatory to the contract” and that the resulting “lack of clarity” was “entirely preventable had parties engaged in any meaningful communication when Allstate decided it would participate in the arbitration,” and that fault lay with all. As reflected by the superior court’s rebuke, the record was populated by the parties with language more colorful than we have chosen to relate in our opinion. The superior court noted criticism was not directed toward Hanson and his counsel. 5 Sanchez and Garcia fail to present assignments of error in their brief,

violating RAP 10.3. Headworks Hand Crafted Ales, Inc. v. Wash. State Liquor &

7 No. 86264-2-I/8

contract. Sanchez and Garcia assert that Allstate became bound to pay a portion

of the arbitrator’s fees when it participated in the arbitration with knowledge of their

contractual agreement with Hanson that the arbitrator’s fees will be divided evenly

by the parties who participate. Sanchez and Garcia ask this court to review this

question de novo, as a question of law of contract interpretation. Even assuming

de novo review applies,6 we agree with the superior court that the record is

insufficient to indicate that Allstate agreed by contract to pay a portion of the

arbitrator’s fees.

“The acceptance of an offer is always required to be identical with the offer,

or there is no meeting of the minds and no contract.” Blue Mountain Constr. Co.

v. Grant County Sch. Dist. No. 150–204, 49 Wn.2d 685, 688, 306 P.2d 209 (1957).

Allstate consistently did not agree to be bound by the arbitration as Sanchez,

Garcia, and Hanson had agreed in the arbitration agreement. Allstate made this

clear no later than its April 6, 2023 e-mail exchange with plaintiffs’ counsel, in which

it stated that even though it planned to present at any arbitration that occurred, it

was not bound, had not agreed to arbitration, was entitled to a jury trial, and any

objection by Sanchez and Garcia to its participation on these terms would

potentially violate their contractual obligations and lead it to return to court to seek

Cannabis Bd., 29 Wn. App. 2d 460, 467, 540 P.3d 863, review denied sub nom. Headworks Brewing v. Wash. State Liquor & Cannabis Bd., 2 Wn.3d 1036, 547 P.3d 901 (2024). Because the nature of their appellate arguments are nevertheless sufficiently clear to the court and to Allstate, we exercise our discretion to reach the merits notwithstanding this procedural defect. Id. at 467- 68. 6 “Normally, the existence of mutual assent or a meeting of the minds is a

question of fact.” Sea-Van Invs. Assocs. v. Hamilton, 125 Wn.2d 120, 126, 881 P.2d 1035 (1994).

8 No. 86264-2-I/9

to have the stay lifted. Quoting Sea-Van Investments Associates v. Hamilton, 125

Wn.2d 120, 126, 881 P.2d 1035 (1994), Sanchez and Garcia argue that a valid

acceptance of an offer “ ‘can also request a modification of terms, so long as the

additional terms are not conditions of acceptance and the acceptance is

unequivocal.’ ” But the arbitration agreement between Sanchez, Garcia, and

Hanson was an agreement that arbitration would resolve all issues in lieu of

proceedings in court. As in Sea-Van, Allstate’s April 6, 2023 e-mail response

“clearly altered this term,” and there is “no writing which evidences an acceptance

on [plaintiffs’] behalf of this change.” 125 Wn.2d at 127. The record does not

contain sufficient indication that Allstate and the plaintiffs formed a contract under

which Allstate agreed to pay a portion of the arbitrator’s fee.7

Sanchez and Garcia’s second theory of recovery is that Allstate will be

unjustly enriched if it is permitted to benefit from the arbitration proceeding but not

bear a portion of its cost. “Unjust enrichment occurs when one retains money or

benefits which in justice and equity belong to another.” Bailie Commc’ns, Ltd. v.

Trend Bus. Sys., Inc., 61 Wn. App. 151, 160, 810 P.2d 12 (1991) (emphasis

7 Sanchez and Garcia cite Mendez v. Palm Harbor Homes, Inc., 111 Wn.

App. 446, 463, 45 P.3d 594 (2002) (quoting Phillips v. Associates Home Equity Services, Inc., 179 F. Supp. 2d 840, 846 (N.D. Ill. 2001)), as supporting a general principle that arbitration expenses “ ‘are borne equally by the parties, absent some agreement’ ” between them. (Internal quotation marks omitted.) Even if there were law supporting that a party could be bound to a contractual undertaking on such a basis, and Sanchez and Garcia cite none, Mendez supports no such generalization. Mendez cited Phillips as part of a discussion of when arbitration agreements should not be enforced precisely because requiring parties to bear the cost of arbitration equally might unfairly “trigger[] costs effectively depriving a plaintiff of limited pecuniary means of a forum for vindicating claims.” 111 Wn. App. at 464.

9 No. 86264-2-I/10

omitted). It is “founded on notions of justice and equity.” Young v. Young, 164

Wn.2d 477, 486, 191 P.3d 1258 (2008). “A party to a valid express contract is

bound by the provisions of that contract, and may not disregard the same and bring

an action on an implied contract relating to the same matter, in contravention of

the express contract.” Chandler v. Wash. Toll Bridge Auth., 17 Wn.2d 591, 604,

137 P.2d 97 (1943); cf. RESTATEMENT OF RESTITUTION: QUASI CONTRACTS AND

CONSTRUCTIVE TRUSTS § 107(1) (AM. LAW INST. 1937) (“A person of full capacity

who, pursuant to a contract with another, . . . has conferred a benefit upon him, is

not entitled to compensation therefor other than in accordance with the terms of

such bargain, unless the transaction is rescinded for fraud, mistake, duress, undue

influence or illegality, or unless the other has failed to perform his part of the

bargain.”). “In Washington, unjust enrichment, and by extension equitable

subrogation, has traditionally been restricted in application to a party who is not

acting as a ‘volunteer.’ ” Columbia Cmty. Bank v. Newman Park, LLC, 177 Wn.2d

566, 575, 304 P.3d 472 (2013) (abrogating strict “volunteer” rule as to equitable

subrogation in the mortgage priorities context).

Sanchez and Garcia do not cite authority that the litigation expenses they

incurred for the arbitration can be viewed as a benefit conferred on Allstate for

which it must make restitution. Sanchez and Garcia voluntarily filed the action

against Hanson to secure a judgment for their damages against him. In addition

to incurring other expenses to pursue their claims against Hanson, which remained

at all times disputed thus necessitating litigation, they voluntarily contracted with

Hanson to determine their claims by arbitration, without reaching agreement with

10 No. 86264-2-I/11

Allstate over the terms of its participation, or lack of participation, in arbitration.

This does not, without more, indicate that Sanchez’s and Garcia’s incurring

expenses to litigate against Hanson unjustly enriched Allstate.8

Affirmed.

WE CONCUR:

8 Allstate acknowledges that the superior court “never ruled on whether

Allstate would be bound to the outcome of arbitration,” and this issue is not before us.