Spokane County v. Specialty Auto & Truck Painting, Inc.

153 Wash. 2d 238

• Court: Washington Supreme Court
• Decided: December 23, 2004
• Docket: Nos. 74539-1; 75328-8
• Status: Published

Opinions

¶1 This consolidated case involves interpretation of Superior Court Civil Rule (CR) 41(a)(4), the “two dismissal” rule. We accepted review of both matters to resolve an apparent conflict between divisions of the Court of Appeals. We affirm the result of both the Court of Appeals decision in Spokane County v. Specialty Auto & Truck Painting, Inc., 119 Wn. App. 391, 79 P.3d 448 (2003) and the trial court decision in Faust v. Bellingham Lodge No. 493, Loyal Order of Moose, Inc., No. 03-2-00859-8 (Whatcom County Super. Ct. Aug. 1, 2003).

Johnson, J.

FACTUAL AND PROCEDURAL HISTORY

Spokane County v. Specialty Auto & Truck Painting, Inc.

¶2 Spokane County hired Specialty Auto & Truck Painting, Inc., to provide repair services to vehicles damaged by an improperly sealed county road. Spokane County received some complaints about Specialty Auto’s work and turned those complaints over to the State Auditor’s Office for an investigation. During the course of its investigation, the State Auditor’s Office concluded that Spokane County had been overbilled for the work Specialty Auto performed.

¶3 On July 27, 2000, Spokane County first filed suit against Specialty Auto in Spokane County Superior Court, seeking to recoup the amount overbilled. However, Spokane County’s governing board had not authorized the filing of this action, as required by state law. On August 3, 2000, Spokane County filed a second action, identical to the first action, but authorized.

¶4 In November 2000, Specialty Auto moved to clarify Spokane County’s duplicate complaints, asserting that it was not necessary to have the same case proceeding under two causes. After discussion between the parties, Specialty Auto struck its motion, based upon Spokane County’s promise to dismiss the first action. However, a formal stipulation was never signed, and Specialty Auto later claimed that, although it knew of Spokane County’s intention to dismiss the first action, it never agreed that such dismissal would be without prejudice.

¶5 On January 4, 2001, a Spokane County Superior Court judge entered ex parte Spokane County’s order for voluntary dismissal of the first action, pursuant to CR 41(a). The ex parte voluntary order of dismissal does not refer to any stipulation by the parties.

¶6 On March 30, 2001, Specialty Auto filed a tort claim against Spokane County arising out of the same incident. In order to coordinate the two actions, but without any discussion between the parties, Spokane County took a voluntary dismissal of its second case on April 10, 2001. The ex parte order does not allude to any stipulation or address the consequences of the second dismissal.

T7 In July 2001, after the 60-day waiting period for filing suit lapsed, Specialty Auto filed a complaint in Spokane County Superior Court based on its tort claim. Spokane County then filed its third complaint against Specialty Auto as part of this case.

¶8 On August 28, 2001, Specialty Auto filed a motion to dismiss Spokane County’s complaint as “previously adjudicated on the merits,” pursuant to CR 41(a)(4), the “two dismissal” rule. Based on the purpose of the “two dismissal” rule and its construction of CR 41(a)(4), the court concluded that the rule did not apply and denied the motion to dismiss.

¶9 The Court of Appeals, Division Three reversed the trial court, concluding that the language of CR 41(a)(4) does not permit the exercise of such discretion. The appellate court remanded the matter for dismissal of Spokane County’s claims, stating that CR 41(a) creates “an absolute right to a stipulated dismissal—but not without prejudice.” Specialty Auto, 119 Wn. App. at 396.

Faust v. Bellingham Lodge No. 493, Loyal Order of Moose, Inc.

¶10 Faust initially brought suit against Bellingham Lodge No. 493, Loyal Order of Moose, Inc., Alexis Chapman, and Moose International, Inc. (collectively, the Lodge), in the United States District Court for the Southern District of New York. The parties stipulated to dismissal of the case after Faust’s attorney realized his client did not have a basis for federal jurisdiction in New York.

¶11 Faust then filed suit in the United States District Court for the Western District of Washington. On the eve of trial, the parties stipulated to dismissal of the second action. The stipulation includes the following provision:

Defendant, BELLINGHAM, WASHINGTON LODGE # 493 LOYAL ORDER OF MOOSE, INC. stipulates to the foregoing voluntary dismissal under [Federal Rule of Civil Procedure] 41(a)(1), and agrees that the parties may not pursue any discovery in any subsequent action the plaintiffs may file which is duplicative or repetitive of discovery which was obtained as part of this action.

Clerk’s Papers at 89.

¶12 Faust filed the third action in Whatcom County Superior Court. As with her other actions, Faust claims the Lodge overserved alcohol to a patron, Hawkeye Kincaid. Kincaid caused an automobile accident in Ferndale on April 20, 2000, injuring Faust, her mother, and her minor child. The Lodge filed a motion to dismiss this action based on the “two dismissal” rule of CR 41(a)(4). The trial court denied the motion.

¶13 We accepted direct review of the Lodge’s petition to the Court of Appeals, Division One, challenging the trial court’s denial of its motion to dismiss.

ANALYSIS

¶14 We accepted review to decide whether the lower courts correctly interpreted the “two dismissal” rule of CR 41(a)(4). We review a lower court’s interpretation of a court rule de novo. City of Seattle v. Guay, 150 Wn.2d 288, 76 P.3d 231 (2003).

f 15 CR 41(a)(4) provides,

Unless otherwise stated in the order of dismissal, the dismissal is without prejudice, except that an order of dismissal operates as an adjudication upon the merits when obtained by a plaintiff who has once dismissed an action based on or including the same claim in any court of the United States or of any state.

The language encompassing the “two dismissal” rule begins with the conjunction “except.”

¶16 The defendants in both consolidated cases assert that the plain language of the rule mandates that if an action has been twice voluntarily dismissed pursuant to CR 41(a) without regard to whether the dismissals were “unilateral” or have been stipulated to by the parties, a third action is barred. This interpretation of the rule is consistent with Division Three’s construction below in Specialty Auto. In Specialty Auto, Division Three read CR 41(a)(4) to require dismissal following two voluntary dismissals, regardless of whether the facts suggest harassment of the defendant and regardless of whether the dismissals were stipulated. Specialty Auto, 119 Wn. App. at 396-97. The court stated that application of the “two dismissal” rule is not a matter of court discretion. Specialty Auto, 119 Wn. App. at 397.

¶17 Division Three’s construction of the “two dismissal” rule appears to contradict Division One’s earlier construetion of CR 41(a)(4) in In re Burley, 33 Wn. App. 629, 658 P.2d 8 (1983). In Burley, Division One noted that interpretation of the “two dismissal” rule was an issue of first impression and turned to interpretations of the substantially identical Federal Rule of Civil Procedure 41(a) for guidance. Based upon interpretations of the federal rule, the court reasoned that CR 41(a)(4) should be strictly construed and stated, “the reason for the two-dismissal rule is to prevent the abuse and harassment of a defendant. . . and to prevent the unfair use of dismissal.” Burley, 33 Wn. App. at 638. Adopting the decision of Orr v. Stuart, 32 F.R.D. 435, 441 (W.D. Ark. 1963), the Burley court established that the trial court must strictly construe the application of CR 41(a)(4) to the facts and circumstances of the case in conformity with the purpose of the rule. Burley, 33 Wn. App. at 638. Although the facts of Burley are distinguishable from those presented here, the principles guiding Division One’s interpretation of the rules are applicable here.

¶18 CR 1 requires Washington courts to interpret the court rules in a manner “that advances the underlying purpose of the rules, which is to reach a just determination in every action.” Burnet v. Spokane Ambulance, 131 Wn.2d 484, 498, 933 P.2d 1036 (1997). The court rules are intended to allow the court to reach the merits of an action. Sheldon v. Fettig, 129 Wn.2d 601, 609, 919 P.2d 1209 (1996). “ ‘[W]henever possible, the rules of civil procedure should be applied in such a way that substance will prevail over form.’ ” Griffith v. City of Bellevue, 130 Wn.2d 189, 192, 922 P.2d 83 (1996) (quoting First Fed. Sav. & Loan Ass’n v. Ekanger, 93 Wn.2d 777, 781, 613 P.2d 129 (1980)).

¶19 Although the general purpose of the court rules is to promote resolution on the merits, the rules provide procedural safeguards to be narrowly construed in line with this general purpose. The narrow purpose of CR 41(a)(4) is to prevent the abuse and harassment of a defendant and the unfair use of dismissal. To achieve this purpose, we limit application of the “two dismissal” rule to dismissals that are a unilateral act by the plaintiff.

¶20 The plain language of CR 41(a)(4) supports limiting application of the rule to unilateral dismissals by the plaintiff. First, the language clearly states that the dismissal operates as an adjudication upon the merits when obtained by the plaintiff. The only operative rule allowing for the plaintiff alone to obtain a voluntary dismissal in Washington courts is CR 41(a)(1)(B).¹ Other rules allowing for dismissal require either stipulation by all parties or court discretion. Second, the clause “who has once dismissed” modifies “plaintiff,” which indicates that the plaintiff must have unilaterally obtained the first dismissal as well. The rule does not reference the defendant or court, so we conclude that the rule operates only for dismissals which the plaintiff may unilaterally obtain. Any broader definition of “obtain” would be inconsistent with the rule’s narrow purpose of preventing abuse and harassment by the plaintiff and would allow a defendant to use the rule as a sword as well as a shield.²

¶21 Finally, the plain language of the “two dismissal” rule of CR 41(a)(4) does not allow for court discretion. The language encompassing the rule begins with the conjunction “except,” which removes the clause from the context of the rest of the sentence. While the language prior to the word “except” allows court discretion to direct whether a dismissal is with or without prejudice, the language of the excepting clause contains no such discretion. The “two dismissal” rule of CR 41(a)(4) is self-executing. It does not allow for court discretion.

¶22 We hold that CR 41(a)(4)’s “two dismissal” rule operates as a nondiscretionary adjudication upon the merits when the dismissals at issue are unilaterally obtained by the plaintiff.

APPLICATION

¶23 Spokane County argues that because the first lawsuit was not authorized as required by the Open Public Meetings Act of 1971, chapter 42.30 RCW, it did not constitute an “action” that implicated the “two dismissal” rule. See RCW 42.30.060(1). A lawsuit not authorized as required by the act must be dismissed. Mead Sch. Dist. No. 354 v. Mead Educ. Ass’n, 85 Wn.2d 140, 145, 530 P.2d 302 (1975). While Washington courts have not considered the issue of whether an unauthorized lawsuit constitutes an action for purposes of CR 41(a)(4), federal case law provides guidance. The United States Court of Appeals for the Ninth Circuit has recognized that such an action implicates the “two dismissal” rule. See Lake at Las Vegas Investors Group, Inc. v. Pac. Malibu Dev. Corp., 933 F.2d 724, 726 (9th Cir. 1991). At least one other court has rejected a similar argument regarding the “nullity” of a voluntarily dismissed suit, emphasizing that the filing of a complaint alone commences an action for purposes of the “two dismissal” rule. See Engelhardt v. Bell & Howell Co., 299 F.2d 480, 484 (8th Cir. 1962). Division Three of the Court of Appeals sustainably concluded that the filing of the unauthorized complaint commenced the first action. We reject Spokane County’s argument that the first lawsuit never existed.

¶24 Second, Spokane County argues that the second dismissal does not apply toward the “two dismissal” rule because it was a product of negotiation and agreement between the parties. However, as discussed above, the rule does not provide for court discretion to look into the reasons for the dismissal. It is undisputed the dismissal was filed ex parte by Spokane County and did not reference an agreement between the parties. Further, the trial court found that neither dismissal was by stipulation. We reject Spokane County’s request that we look beyond this finding and attempt to determine the intent of the parties.

¶25 Third, Spokane County argues that its prior dismissals do not apply toward the “two dismissal” rule because the court granted both dismissals “without prejudice.” The plain language of the “two dismissal” rule does not support this argument. The rule is self-executing and does not allow for court discretion. We reject this argument as well.

¶26 Finally, Spokane County argues that Specialty Auto waived its right to assert the “two dismissal” rule because Specialty Auto’s counsel assented to the first dismissal. A party against whom waiver is claimed must have intended to relinquish the right, advantage, or benefit, and his action must have been inconsistent with any intent other than to waive it. Wagner v. Wagner, 95 Wn.2d 94, 102, 621 P.2d 1279 (1980). As discussed above, the trial court found that Specialty Auto did not stipulate to either dismissal. The record does not support a finding that Specialty Auto intended to relinquish any rights. Spokane County’s waiver argument is without merit.

¶27 Spokane County twice unilaterally dismissed actions filed against Specialty Auto regarding the same subject matter. The “two dismissal” rule bars the filing of the third complaint. We affirm the Court of Appeals decision dismissing Spokane County’s third complaint.³

Faust v. Bellingham Lodge No. 493, Loyal Order of Moose, Inc.

¶28 The Lodge’s arguments in favor of CR 41(a)(4) dismissal require construing the rule to include voluntary stipulated dismissals as dismissals that trigger the “two dismissal” rule. As discussed above, we construe the rule to apply only to unilateral dismissals by the plaintiff. Both dismissals at issue in this matter were by stipulation of the parties. We affirm the trial court denial of the Lodge’s motion to dismiss Faust’s third lawsuit.

CONCLUSION

¶29 We hold that CR 41(a)(4)’s “two dismissal” rule operates as a nondiscretionary adjudication upon the merits when the dismissals at issue are unilaterally obtained by a plaintiff. We affirm the Court of Appeals, Division Three decision dismissing Spokane County’s third action in Specialty Auto. We affirm the trial court decision denying the Lodge’s motion to dismiss Faust’s third action in Faust.

Alexander, C.J., and Ireland, Bridge, Chambers, and Owens, JJ., concur.

1 Any analogous rule from another jurisdiction allowing for unilateral dismissal by a plaintiff also applies.

2 Under our holding, a defendant may prevent abusive use of the rule simply by declining to stipulate to dismissal.

3 We make no ruling on whether Spokane County may introduce evidence otherwise excluded by dismissal of its third complaint to avoid any claims brought by Specialty Auto.