Short v. Demopolis

691 P.2d 163, 103 Wash. 2d 52
CourtWashington Supreme Court
DecidedNovember 6, 1984
Docket49617-0
StatusPublished
Cited by132 cases

This text of 691 P.2d 163 (Short v. Demopolis) is published on Counsel Stack Legal Research, covering Washington Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Short v. Demopolis, 691 P.2d 163, 103 Wash. 2d 52 (Wash. 1984).

Opinions

Dolliver, J.

May lawyers be subject to liability under the Consumer Protection Act (CPA), RCW 19.86? Defendant Chris Demopolis appeals the Superior Court order which dismissed his counterclaims under CR 12(b)(6) for CPA violations against the plaintiffs' law firm of Short and Cressman.

In March 1980, Demopolis met with Douglas Hartwich, partner in plaintiffs’ law firm, to discuss representation in two pending lawsuits. The first involved dissolution of a real estate partnership. The complaint alleged damages in excess of $200,000. After 2 days of trial, the action settled for $7,500. Attorney fees totaled $19,958.53. The second case involved a real estate forfeiture action. Defendant prevailed and was entitled to immediate possession of the premises, rental delinquencies, and damages.

A dispute ensued over the rendering of legal services. Defendant contends he hired Hartwich to handle personally his legal matters but that without his consent or knowledge Hartwich had a younger partner (Ferrell) and an associate [54]*54(Mayotte) do the legal work. Plaintiffs maintain Hartwich personally introduced Ferrell and Mayotte to Demopolis, that he told Demopolis they would be handling the cases, and that Demopolis agreed to this arrangement.

The parties also contest the payment of attorney fees. Defendant asserts he rejected plaintiffs' first bill and made a final settlement of $14,000. The second bill for $29,122.80 is considered excessive by defendant as he holds numerous grievances with the quality of representation. Plaintiffs state they attempted to obtain payment from Demopolis but were unsuccessful. Subsequent to filing a notice of intent to withdraw in August 1980, but before the effective date, plaintiffs maintain they entered into an agreement with Demopolis.

In a letter dated September 3, 1980, Hartwich wrote Demopolis confirming (1) plaintiffs' acceptance of $14,000 as full payment for the partnership matter; (2) withdrawal of their notice to withdraw; (3) plaintiffs' intent to bill at their regular hourly rates for time expended on the second case; and (4) noting "You will be working on the [second] case directly with Don Ferrell and Jim Mayotte, as was the case in the partnership action." A handwritten statement, signed by Demopolis, to hold Short and Cressman harmless for the release of trust funds totaling $3,025.35 held by them for Demopolis' former attorney is on the first page of this letter. However, Demopolis' affidavit states he never received the original or a copy of the letter; he only agreed to hold plaintiffs harmless for the release of trust funds, and was not told he was waiving any legal rights to complain about the fees or the handling of the first case.

Plaintiffs sued Demopolis for breach of an express contract to pay for legal services. Demopolis denied liability and asserted affirmative defenses and counterclaims. He alleged 10 causes of action: (1) unfair and deceptive practices in violation of the Consumer Protection Act, RCW 19.86; (2) breach of contract; (3) violation of Code of Professional Responsibility DR 2-106 (excessive fees); (4) violation of CPR DR 6-101 (incompetence); (5) negligence and [55]*55malpractice; (6) fiduciary duty violations; (7) misrepresentation; (8) violation of CPR DR 2-110 (threat to withdraw) causing mental distress; (9) reformation of contract; and (10) attorney fees assessment.

Plaintiffs moved for summary judgment which was denied, except for defendant's claim for emotional distress damages which was dismissed. Subsequently, and before a second judge, plaintiffs made a CR 12(b)(6) motion to dismiss defendant's 1st, 3rd, 4th, 8th, and 10th causes of action. This latter motion was granted and the counterclaims were dismissed with prejudice. Three reasons were cited for dismissing defendant's counterclaims for CPA violations. First, the practice of law did not constitute the conduct of any trade or commerce within the meaning of the CPA or Washington case law. Second, to regulate the legal profession through the CPA was an unconstitutional infringement on the power of the judiciary to regulate the practice of law. Third, other adequate remedies (breach of contract and malpractice) were available.

Defendant was granted direct discretionary review and assigns error to the dismissal of his CPA violation counterclaims pursuant to CR 12(b)(6) ("failure to state a claim upon which relief can be granted").

I

The first issue we consider is whether the practice of law falls within "trade or commerce" as that term is defined by RCW 19.86. RCW 19.86.020 provides:

Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful.

"'Trade' and 'commerce' shall include the sale of assets or services, and any commerce directly or indirectly affecting the people of the state of Washington." RCW 19.86.010(2).

The trial court, relying on Lightfoot v. MacDonald, 86 Wn.2d 331, 544 P.2d 88 (1976), interpreted the CPA as exempting the practice of law. In Lightfoot, a client allegedly suffered damages as a result of her attorney's nonfea-[56]*56sanee. We disallowed her CPA claim because of her failure to show sufficient public impact. 86 Wn.2d at 338-39.

A breach of a private contract affecting no one but the parties to the contract, whether that breach be negligent or intentional, is not an act or practice affecting the public interest.

86 Wn.2d at 334. In dictum we "implicitly recognized the lack of precedent for the concept that the legal profession is involved in trade and commerce ..." 86 Wn.2d at 338. Subsequent case law does not appear finally to have answered the question. See Anhold v. Daniels, 94 Wn.2d 40, 47-48, 614 P.2d 184 (1980) (Rosellini, J., concurring) ("[w]hether the lawyer [MacDonald] who was sued in that action was engaged in 'trade or commerce' was a question which we left unanswered"); Salois v. Mutual of Omaha Ins. Co., 90 Wn.2d 355, 361, 581 P.2d 1349 (1978) ("Light-foot is correct on its facts in that there was a failure to show that the private dispute affected the public interest or was within the sphere of trade or commerce . . ."); Bowers v. Transamerica Title Ins. Co., 100 Wn.2d 581, 591-92, 675 P.2d 193 (1983) (unauthorized practice of law by employees of an escrow agent is a violation of the CPA).

The CPA contains no language expressly including or excluding attorneys from its purview. The act, however, contains its own guide to statutory construction. RCW 19.86.920 provides:

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Cite This Page — Counsel Stack

Bluebook (online)
691 P.2d 163, 103 Wash. 2d 52, Counsel Stack Legal Research, https://law.counselstack.com/opinion/short-v-demopolis-wash-1984.