Stafford Health Services, Inc. v. The Estate Of Lawrence X. Sullivan

CourtCourt of Appeals of Washington
DecidedJuly 27, 2020
Docket81206-8
StatusUnpublished

This text of Stafford Health Services, Inc. v. The Estate Of Lawrence X. Sullivan (Stafford Health Services, Inc. v. The Estate Of Lawrence X. Sullivan) 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
Stafford Health Services, Inc. v. The Estate Of Lawrence X. Sullivan, (Wash. Ct. App. 2020).

Opinion

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

In the Matter of the Estate of ) LAWRENCE X. SULLIVAN, ) No. 81206-8-I ) Deceased. ) DIVISION ONE ) STAFFORD HEALTH SERVICES, INC., ) UNPUBLISHED OPINION a Washington corporation, d/b/a ) STAFFORD HEALTHCARE AT ) BELMONT, ) ) Respondent, ) ) v. ) ) THE ESTATE OF LAWRENCE X. ) SULLIVAN and THE LAWRENCE AND ) ARLENE SULLIVAN LIVING TRUST ) and DEANNA MERKATZ AND “JOHN ) DOE” MERKATZ, individually and the ) marital community comprised thereof, ) ) Appellants. )

SMITH, J. — The Estate of Lawrence X. Sullivan (Estate), the Lawrence

and Arlene Sullivan Living Trust (Trust), and Deanna Merkatz, the Estate’s

personal representative, challenge the trial court’s findings of fact and

conclusions of law supporting an award of attorney fees to Stafford Health

Services Inc. (SHS). We conclude that the record contains no admissible

evidence to support an award of attorney fees incurred by the law firm Gig

Harbor Law. We also conclude that the record does not contain sufficient

Citations and pin cites are based on the Westlaw online version of the cited material. No. 81206-8-I/2

evidence to support the reasonableness of fees billed for paralegal work.

Accordingly, we reverse in part and remand to the trial court to revise the

attorney fees award to exclude fees incurred by Gig Harbor Law and by

paralegals. Otherwise, we affirm.

FACTS

In 2015, SHS filed a creditor’s claim against the Estate for nursing

services and care provided to Lawrence Sullivan, the deceased, under an

“Admission and Financial Agreement” (Agreement) that had been executed by

Merkatz. After Merkatz rejected the claim, SHS filed a TEDRA1 petition against

the Estate, the Trust, and Merkatz (collectively Estate Parties). The Estate

Parties filed counterclaims against SHS, alleging, among other things, violation of

the Consumer Protection Act (CPA), chapter 19.86 RCW, and damages under

the abuse of vulnerable adults act (AVA), chapter 74.34 RCW.

In May 2017, the trial court dismissed the Estate Parties’ counterclaims.

Later, the trial court ruled on summary judgment that the Estate was liable to

SHS for payment under the Agreement and based on unjust enrichment. The

trial court also dismissed SHS’s claims against Merkatz individually.

After the trial court dismissed the Estate Parties’ counterclaims and ruled

on the Estate’s liability to SHS, SHS filed a petition for an award of attorney fees

and costs. In its petition, SHS requested a total of $44,426.94 in fees and costs

incurred by two law firms: (1) Andrews Skinner P.S. and (2) Gig Harbor Law.

SHS asserted that it was entitled to a fee award under TEDRA and under the

1 Trust and Estate Dispute Resolution Act, chapter 11.96A RCW. 2 No. 81206-8-I/3

Agreement.

The only declaration submitted in support of the fee petition was from

attorney Pamela Andrews of the Andrews Skinner firm. Attached as exhibit 4 to

Andrews’ declaration were a number of Gig Harbor Law invoices, which Andrews

averred in her declaration were “true and correct copies of billings paid by [SHS]

to Gig Harbor Law to process both the creditor claim and TEDRA action.” Also

attached to Andrews’ declaration were a number of invoices from Andrews

Skinner to SHS. The Andrews Skinner invoices included billings for services

rendered by Heather Lanning and Jane Johnson, who were identified in the

invoices as an “RN Paralegal” and a “Sr. Paralegal,” respectively.

In its response to SHS’s fee petition, the Estate Parties argued that under

the Agreement, SHS was not entitled to recover fees and costs incurred in

defending the Estate Parties’ counterclaims. The Estate Parties also argued that

SHS “should . . . not be awarded any fees or costs under [TEDRA], as their

TEDRA Petition is essentially a suit on a rejected creditor’s claim.” The Estate

Parties further contended that the Gig Harbor Law invoices were inadmissible

hearsay and that a number of the services billed for in those invoices were

inadequately described. Additionally, the Estate Parties asserted that Andrews’

declaration failed to “establish that Heather Lanning and Jane Johnson’s

performance of the services they billed for were supervised by an attorney” or

“specify the qualifications of . . . Heather Lanning and Jane Johnson at all – let

alone in sufficient detail to demonstrate that they are qualified . . . to perform

substantive legal work.” Thus, the Estate Parties argued, the trial court “should

3 No. 81206-8-I/4

not award any fees for services performed by Heather Lanning and Jane

Johnson.” Finally, the Estate Parties argued that the court “should not award any

fees for clerical services of non-lawyer personnel” and that Merkatz, individually,

should not be required to pay any fees or costs.

On August 22, 2017, the trial court granted SHS’s fee petition and

awarded the full amount of fees requested. The fee award was joint and several

against all defendants except Merkatz. The trial court did not enter findings of

fact with regard to the amount of the fee award.

The Estate Parties subsequently appealed the trial court’s dismissal of

their counterclaims, the ruling regarding the Estate’s liability to SHS, and the fee

award. In an unpublished opinion, we affirmed the trial court in all respects

except with regard to the reasonableness of the fee award. See In re Estate of

Sullivan (Sullivan I), No. 77166-3-I, slip op. at 2 (Wash. Ct. App. Nov. 26, 2018)

(unpublished), http://www.courts.wa.gov/opinions/pdf/771663.pdf. Specifically,

we concluded that SHS was entitled to an award of attorney fees under the

Agreement and that the trial court “had discretion to award attorney fees under

TEDRA.” Sullivan I, slip op. at 17. We also held that the court “did not abuse its

discretion by including fees and costs SHS incurred responding to the Estate

[Parties’] counterclaims.” Sullivan I, slip op. at 17. We concluded, however, that

the trial court “erred in failing to enter findings of fact and conclusions of

law . . . supporting the reasonableness of the award of attorney fees.” Sullivan I,

slip op. at 17. Accordingly, we affirmed the trial court but “remand[ed] to enter

findings of fact and conclusions of law on the reasonableness of the award of

4 No. 81206-8-I/5

attorney fees and costs.” Sullivan I, slip op. at 18.

On remand, the trial court entered the following findings of fact and

conclusions of law:

I. FINDINGS OF FACT

1.1 On November 1, 2013 Lawrence Sullivan was admitted to Stafford Health Services . . . for treatment and therapy.

1.2 Mr. Sullivan’s niece, Deanna Merkatz, signed his “Admission and Financial Agreement” as his “POA (Power of Attorney)” or “Responsible Party” and consented to nursing services. . . . .... 1.3 Merkatz promised as the Responsible Party to pay for services provided by SHS including charges not covered by Medicare from . . . “the Resident’s income or resources legally available for payment of such obligations.”

1.8[2] The amount due at the time of his transfer was $19,025.

1.9 Ms. Merkatz did not pay the outstanding billing.

1.10 Mr. Sullivan passed in 2015.

1.11 On May 22, 2015, the Estate sent a “non-probate Notice to Creditors” to SHS and SHS filed a creditor’s claim for $19,025 against the Estate. On August 17, Ms. Merkatz, as the PR for the Estate, rejected the claim.

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