IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
STEVEN W. HYDE and SANDRA D. BROOKE, husband and wife, DIVISION ONE
Appellant, No. 72614-5-1
v. UNPUBLISHED OPINION
CITY OF LAKE STEVENS, \9 en
Respondent. FILED: August 3, 2015
Dwyer, J. — The doctrine of res judicata prevents a plaintiff from bringing
successive actions against the same defendant when the actions arise from the
same transactional nucleus of facts. After Steven Hyde, the appellant in this
matter, had his claim of negligence against the City of Lake Stevens dismissed,
he filed a successive action against the City in which he alleged a claim of
negligent misrepresentation. Because the negligent misrepresentation claim
arose from the same events that formed the basis of Hyde's negligence claim,
the trial court's dismissal of Hyde's negligent misrepresentation claim was
justified by the doctrine of res judicata. Therefore, we affirm the dismissal of
Hyde's negligent misrepresentation claim. The record herein, however, does not
support the trial court's imposition of Civil Rule 11 sanctions against Hyde's
counsel. We reverse that order. No. 72614-5-1/2
I
On June 2, 2009, the City of Lake Stevens offered Steven Hyde a position
as a police officer. As part of his training, Hyde participated in taser training. He
completed the written taser training on June 10, 2009 and on the next day, June
11, participated in the practical taser application and testing.
During this part of the training, Hyde was subjected to a short burst of the
taser weapon in accordance with the taser training protocol. Before the tasing
took place, Hyde signed a release from Taser International, the manufacturer of
the weapon. Hyde then laid with his back on the floor and with clips attached to
his right arm and left ankle. A taser instructor applied the taser to him. Later that
same day, Hyde complained of back pain and filed an injury report.
On August 28, 2009, the pain not having resolved, Hyde had surgery on
his back. On September 25, 2009, Hyde contacted Taser International, inquiring
about the recommended methods of exposure during taser training. On
September 30, Hyde received an e-mail from the training manager at Taser
International, who informed him that the training guidelines state to target the
subject's back or legs and that shoulder and foot exposures were not
recommended.
Hyde then brought a lawsuit against the City. Therein, Hyde alleged that
he had suffered injury as a result of being tased, and that the injury "was directly
and proximately caused by the negligence of Defendant City of Lake Stevens."
He requested that judgment be entered against the City for, among other things,
general damages, medical costs and expenses (both present and future),
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financial loss, pain and suffering, mental anguish, loss of consortium, and
emotional distress.
On August 23, 2012, the City moved for summary judgment on Hyde's
claim of negligence. Its motion was granted and Hyde's negligence claim was
dismissed.
Hyde moved for reconsideration. In doing so, Hyde argued that a claim of
negligent misrepresentation was included within his complaint, and that this claim
was based on his discovery, on June 20, 2011, that, contrary to assertions made
to him at the taser testing, being tased was not a requirement to become a police
officer. Hyde's motion for reconsideration was denied.
Hyde appealed. In an unpublished opinion, we affirmed the dismissal of
Hyde's negligence claim. Hyde v. City of Lake Stevens, noted at 179 Wn. App.
1007, 2014 WL 232214, review denied, 180 Wn.2d 1029 (2014). Therein, we
observed that Hyde had not pleaded a claim of negligent misrepresentation but,
rather, first asserted such a claim in his motion for reconsideration. Hyde, 2014
WL 232214, at *4.
Subsequently, Hyde filed this action in Snohomish County Superior Court.
Herein, he claims that "[t]he representation that tasing was a requirement of the
job was a negligent misrepresentation." His complaint requests that judgment be
entered against the City for, among other things, general damages, medical
costs and expenses (both present and future), financial loss, pain and suffering,
mental anguish, loss of consortium, and emotional distress.
After the complaint herein was filed, the City's attorney informed Hyde's
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attorney that the complaint was "a clear violation of the claim-splitting doctrine,"
and notified Hyde's attorney that the City would seek attorney fees, costs, and
sanctions if the complaint was not voluntarily dismissed. Shortly thereafter, the
City's attorney reminded Hyde's attorney of the City's intent to seek fees and
sanctions and, in doing so, stated, "It is our position that you are in violation of
the claim splitting prohibition, res judicata, collateral estoppel, CR 11, and the
statute of limitations for statements allegedly made (negligent misrepresentation)
in June 2009 has expired."
On July 24, 2014, the City filed a motion for summary judgment. Therein,
the City argued that Hyde's second complaint was barred by the prohibition on
"claim-splitting," as well as the doctrines of res judicata and collateral estoppel. The City requested that the trial court dismiss Hyde's complaint, award the City attorney fees, and impose monetary terms against Hyde's attorney and in favor
of the City.
On September 5, 2014, the trial court granted the motion, dismissing the
complaint. Pursuant to CR 11, the court awarded the City reasonable attorney
fees and sanctions in the amount of $5,000 against Hyde's attorney.
Commenting on the imposition of CR 11 sanctions, the trial court stated, "This second lawsuit was brought in blatant violation of the claim splitting prohibition,
res judicata, collateral estoppel, was frivolous, and has harassed the City and caused it to incur unnecessary legal bills and expenses."
Hyde's motion for reconsideration was denied. Therein, the trial court determined that a reasonable attorney fee to be awarded to the City was in the
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amount of $17,145.
Hyde appeals.
II
Hyde contends that the trial court erred in dismissing his claim of negligent
misrepresentation. We disagree. Dismissal was proper under the doctrine of res
judicata.
We review a summary judgment order de novo. Lokan &Assocs., Inc. v.
Am. Beef Processing, LLC. 177 Wn. App. 490, 495, 311 P.3d 1285 (2013).
When reviewing an order granting summary judgment, we engage in the same
inquiry as the trial court, viewing the facts and all reasonable inferences in the
light most favorable to the nonmoving party. Brown v. Brown. 157 Wn. App. 803,
812, 239 P.3d 602 (2010). "The motion should be granted if there is no genuine
issue of material fact and the moving party is entitled to judgment as a matter of
law." Maver v. City of Seattle. 102 Wn. App. 66, 75, 10 P.3d 408 (2000).
Generally speaking, res judicata bars the relitigation of claims and issues
that were litigated or could have been litigated in a prior action. Loveridqe v.
Fred Meyer. Inc., 125 Wn.2d 759, 763, 887 P.2d 898 (1995); see In re Marriage
of Aldrich. 72 Wn. App. 132, 138, 864 P.2d 388 (1993) (res judicata operates to
preclude collateral attack on a final decision). "When res judicata is used to
mean claim preclusion, it encompasses the idea that when the parties to two
successive proceedings are the same, and the prior proceeding culminated in a
final judgment, a matter may not be relitigated, or even litigated for the first time,
if it could have been raised, and in the exercise of reasonable diligence should
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have been raised, in the prior proceeding." Kelly-Hansen v. Kelly-Hansen. 87
Wn. App. 320, 328-29, 941 P.2d 1108 (1997) (footnotes omitted). "[I]t has been
held that a matter should have been raised and decided earlier if it is merely an
alternate theory of recovery, or an alternate remedy." Kelly-Hansen. 87 Wn. App.
at 331 (compiling Washington Supreme Court cases); see also Sound Built
Homes. Inc. v. Windermere Real Estate/South. Inc.. 118 Wn. App. 617, 631-32,
72 P.3d 788 (2003) (summarizing the application of res judicata by Washington
courts and rejecting the position "that a party can bring as many actions as he or
she has substantive legal theories, even if all theories involve the same facts, the
same evidence, and the same transaction").
In Washington, these principles have been reduced to a four-part test.
Res judicata applies "where a prior final judgment is identical to the challenged
action in '(1) subject matter, (2) cause of action, (3) persons and parties, and (4)
the quality of the persons for or against whom the claim is made.'" Lvnn v. Dep't
of Labor & Indus.. 130 Wn. App. 829, 836, 125 P.3d 202 (2005) (quoting
Loveridge, 125 Wn.2d at 763). Whether an action is barred by res judicata is a
question of law that is reviewed de novo. Lvnn. 130 Wn. App. at 837.
Hyde concedes that the persons and parties, as well as the quality of the
persons for or against whom the claim is made, are the same. Accordingly, only
the first two elements necessitate analysis.
The first element, which requires a concurrence of identity in subject
matter, is met: both actions involve the events that occurred during the June 11,
2009 taser training session.
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The second element, which requires a concurrence of identity in the
causes of action themselves, is also met. For purposes of this second element,
"[a] claim includes 'all rights of the [claimant] to remedies against the defendant
with respect to all or any part of the transaction, or series of connected
transactions, out of which the action arose,' without regard to whether the issues
actually were raised or litigated." Fluke Capital & Mqmt. Servs. Co. v. Richmond.
106 Wn.2d 614, 620, 724 P.2d 356 (1986) (alteration in original) (quoting
Restatement (Second) of Judgments, § 24(1) (1982)); accord Hadlev v. Cowan.
60 Wn. App. 433, 804 P.2d 1271 (1991).
Hyde filed his first complaint, in which he alleged a claim of negligence,
before learning that being tased was not a precondition of becoming a police
officer. However, the City did not move for summary judgment on Hyde's
negligence claim until over a year after Hyde's discovery that he could have
opted not to be tased and remained eligible for employment. During this interim
period, Hyde could have sought leave to amend his complaint to include a claim
of negligent misrepresentation; alternatively, he could have sought to file a
supplemental pleading to the same effect. CR 15(a), (d). Yet, instead of availing
himself of the procedures authorized by rule, Hyde waited until his motion for
reconsideration to argue that he had, in fact, included a claim of negligent
misrepresentation in his complaint.
When this argument was rejected, Hyde filed a second complaint in which
he pleaded a claim of negligent misrepresentation. He sought the same relief he
had sought in his first complaint. In other words, after failing to recover damages
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under a simple negligence theory, Hyde sought to recover the same damages,
based on the same transaction, but under a theory of negligent
misrepresentation. For purposes of the second element, his claims are,
therefore, identical.1
The trial court did not err when it dismissed Hyde's claim of negligent
misrepresentation on the basis of res judicata.
Ill
The trial court did, however, err in awarding attorney fees to the City and
imposing sanctions against Hyde's attorney pursuant to CR 11. This is so
because Hyde's negligent misrepresentation claim was not, contrary to the trial
court's conclusion, brought in violation of the prohibition on claim splitting or the
doctrine of collateral estoppel. Furthermore, although Hyde's claim was brought
in violation of the doctrine of res judicata, CR 11 sanctions are not justified on
that basis. Not only was the required notice of a CR 11 violation given to Hyde's
attorney inadequate, the attorney had a good faith argument that Hyde's
negligent misrepresentation claim could be prosecuted and would not be barred
by the statute of limitation, as was his simple negligence claim. Accordingly, the
1 Hyde asserts that the City should be judicially estopped from taking the position on appeal that his negligent misrepresentation claim is identical to his negligence claim. This is so, he maintains, because whereas the City obtained summary judgment in the second action by asserting the defense of res judicata, it obtained summary judgment in the first action by asserting that Hyde's purported negligent misrepresentation claim was independent of his negligence claim. There is no merit to Hyde's argument. The City's position in both actions has been that Hyde's negligent misrepresentation claim is simply an alternate theory of liability to his negligence claim. There is no inconsistency in the City's position and, thus, no applicability for the equitable doctrine of judicial estoppel. See, e^, Tavlor v. Bell. 185 Wn. App. 270, 340 P.3d 951 (2014) (judicial estoppel inapposite where no inconsistent position taken), review denied, No. 91469-9 (Wash. July 8, 2015).
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trial court's award must be vacated.
The signature of a party or attorney on a pleading constitutes a certificate
by that party or attorney that the pleading is well grounded in fact, warranted by
existing law or a good faith argument for a change in existing law, is not
interposed for an improper purpose, and contains only factual contentions or
denials warranted by the evidence. CR 11(a). Where a pleading is signed in
violation of the rule, "the court, upon motion or upon its own initiative, may
impose upon the person who signed it, a represented party, or both, an
appropriate sanction," which may include reasonable attorney fees and
expenses. CR 11(a). We review an award of sanctions under CR 11 for an
abuse of discretion. Biggs v. Vail. 124 Wn.2d 193, 197, 876 P.2d 448 (1994).
In determining whether the trial court abused its discretion, we are mindful
that CR 11 is intended to deter baseless filings and to curb abuses of the judicial
system. Biggs. 124 Wn.2d at 197. The rule is not "meant to act as a fee shifting
mechanism." Biggs. 124 Wn.2d at 197. "Courts should employ an objective
standard in evaluating an attorney's conduct, and the appropriate level of pre-
filing investigation is to be tested by 'inquiring what was reasonable to believe at
the time the pleading, motion or legal memorandum was submitted.'" Biggs. 124
Wn.2d at 197 (quoting Bryant v. Joseph Tree. Inc.. 119 Wn.2d 210, 220, 829
P.2d 1099 (1992)).
Importantly, "[bjoth practitioners and judges who perceive a possible
violation of CR 11 must bring it to the offending party's attention as soon as
possible. Without such notice, CR 11 sanctions are unwarranted." Biggs. 124
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Wn.2d at 198 (footnote omitted). "Prompt notice of the possibility of sanctions
fulfills the primary purpose of the rule, which is to deter litigation abuses." Biggs,
124 Wn.2d at 198. However, notice, as it relates to CR 11, must be meaningful.
Were it otherwise, CR 11 would be "simply another weapon in a litigator's
arsenal." Biggs. 124 Wn.2d at 199 n.2.
Here, the City's attorney informed Hyde's attorney that the complaint was
"a clear violation of the claim-splitting doctrine," and notified Hyde's attorney that
the City would seek attorney fees, costs, and sanctions if the complaint was not
voluntarily dismissed. Shortly thereafter, the City's attorney reminded Hyde's
attorney of the City's intent to seek fees and sanctions and, in doing so, stated,
"It is our position that you are in violation of the claim splitting prohibition, res
judicata, collateral estoppel, CR 11, and the statute of limitations for statements
allegedly made (negligent misrepresentation) in June 2009 has expired."
Subsequently, in imposing CR 11 sanctions, the trial court found that,
"This second lawsuit was brought in blatant violation of the claim splitting
prohibition, resjudicata, collateral estoppel, was frivolous, and has harassed the
City and caused it to incur unnecessary legal bills and expenses."
As explained herein, the trial court, and the City's counsel, were correct
that Hyde is barred from maintaining his claim by res judicata. Notwithstanding
this, the City was incorrect in asserting in its notice of intent to seek sanctions
that Hyde's negligent misrepresentation claim was brought in violation of the prohibition on claim splitting and in violation of the doctrine ofcollateral estoppel. As will be explained below, and quite ironically, given the wording of CR 11, the
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City's contentions in these regards were not supported by the law or the facts.
This form of notice, which was incorrect on the law more than it was correct on
the law, did not serve the salutary purpose required by the Biggs decision.
As to "claim splitting," the City was just plain wrong. In Washington, the
practice of claim splitting has long been forbidden. Sprague v. Adams. 139
Wash. 510, 247 P. 960 (1926); White v. Milev. 137 Wash. 80, 241 P. 670 (1925);
Kinsev v. Duteau, 126 Wash. 330, 218 P. 230 (1923); Collins v. Gleason. 47
Wash. 62, 91 P. 566 (1907); Kline v. Stein. 46 Wash. 546, 90 P. 1041 (1907);
see also Enslev v. Pitcher. 152 Wn. App. 891, 222 P.3d 99 (2009); Landry v.
Luscher. 95 Wn. App. 779, 976 P.2d 1274 (1999).
The seminal case of Sprague v. Adams, provides a good starting point in
understanding that which constitutes claim splitting. 139 Wash. 510. In
Sprague. the plaintiff successfully prosecuted a claim for property damage
arising out of a motor vehicle collision and then brought a successive action in an
effort to recover damages for personal injuries arising out the same collision.
The issue before the court was "whether or not a single tort resulting in property
damage to the owner and also in personal injury damage to the owner is one
indivisible claim or cause of action in favor of the person so damaged, within the
rule against splitting of causes of action and subjecting the claimant's opponent
to more than one suit therefor." Sprague. 139 Wash, at 515. Resolving the
question, the court held "that the decided weight of authority in this country
supports the view that damages resulting from a single tort, even though such
damages be partly property damages and partly personal injury damages, are,
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when suffered by one person, the subject of only one suit as against the
wrongdoer." Sprague. 139 Wash, at 520 (emphasis added).
The decision in Sprague was founded upon a series of prior Supreme
Court decisions, including, most notably, Kline. Collins, Kinsey. and White. Each
of these decisions is considered herein.
The plaintiffs in Kline brought successive actions seeking to recover land
from the defendants, who had dispossessed them by moving the fences erected
by the plaintiffs to where the defendants perceived the true property lines to be.
46 Wash, at 546-47. After prevailing in their first action, the plaintiffs sought "to
recover an irregular shaped tract bordering on the west side of the tract
recovered in the first action, which they claim they were deprived of by the same
acts of forcible trespass." Kline. 46 Wash, at 547. After the trial court dismissed
the second action, our Supreme Court affirmed, opining that "[t]he trespass gave
rise to but one right of recovery, and since the appellants have exercised that
right they are estopped from maintaining a second recovery," before concluding
that "there has been a splitting of a single cause of action." Kline. 46 Wash, at
548-49 (emphasis added).
The plaintiff in Collins brought successive actions seeking to compel
specific performance by the defendants on a contract. 47 Wash, at 64-67. While
the plaintiff prevailed in the first action, his effort to compel additional
performance was rebuffed by the trial court. After the trial court dismissed the
second action, our Supreme Court affirmed, opining that "Appellants' testator
never had more than one cause of action on the contract. The failure of
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respondent to convey all the lands contemplated thereby was but one breach,
which authorized one action only." Collins, 47 Wash, at 67 (emphasis added).
The court continued, "For one breach of an indivisible contract there can arise
but one cause of action, and if in such action the plaintiff does not demand the
entire relief to which he is entitled, he cannot afterwards complain." Collins, 47
Wash, at 67.
White involved an action of replevin, in which the plaintiff, after bringing a
damages action for conversion of certain personal property, sought to recover
different items of personal property from the same defendants. 137 Wash, at 81-
82. The Supreme Court noted "that the rule against split causes of action
requires the plaintiff to join in one action his claims and demands concerning all
the property which can properly be brought into that action." White. 137 Wash, at
82. However, because the plaintiff in the first action was misled by the
defendants, the court ruled that the plaintiff was, under the circumstances,
permitted to split his cause of action. White. 137 Wash, at 83.
The plaintiff in Kinsey brought an action seeking recovery of a one-half
interest in a tract of real property. Kinsey. 126 Wash, at 332. After his first action
was dismissed, the plaintiff sought to recover a full interest in the same tract, but
his efforts were barred by the trial court. Kinsey. 126 Wash, at 332. The
Supreme Court affirmed, noting that the claims arose from the same cause of
action. Kinsey, 126 Wash, at 334.2
2 Modern cases are in accord with Sprague and its forebears, but add nothing to the analysis and have not altered the rule. For instance, in Landry, Division Three, citing Sprague,
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By 1940, the law in Washington was clear: the prohibition against claim
splitting precluded the prosecution of a single cause of action in successive
lawsuits. That rule has never changed. But that is not what Hyde did herein. In
this case, he brought related—but separate—causes of action in successive
lawsuits. Hyde did not commit the sin of claim splitting.
Not only was the City incorrect with regard to claim splitting, the City was
also wrong in asserting that Hyde's second lawsuit was brought in violation of the
doctrine of collateral estoppel.
"Collateral estoppel, or issue preclusion, bars relitigation of an issue in a
subsequent proceeding involving the same parties." Christensen v. Grant
County Hosp. Dist. No. 1, 152 Wn.2d 299, 306, 96 P.3d 957 (2004). "Collateral
estoppel requires that the issue decided in the prior adjudication is identical with
the one at hand." McDaniels v. Carlson. 108 Wn.2d 299, 305, 738 P.2d 254
(1987). Moreover, it "precludes only those issues thathave actuallybeen
litigated and determined; it 'does not operate as a bar to matters which could
have . . . been raised [in prior litigation] but were not.'" McDaniels. 108 Wn.2d at
305 (emphasis added) (alterations in original) (quoting Davis v. Nielson. 9 Wn.
App. 864, 874, 515 P.2d 995 (1973)).
opined, "An injured party is limited to one lawsuit for property and/or personal injury damage resulting from a single tort alleged against the wrongdoer." Landry, 95 Wn. App. at 782. The Landry court then applied Sprague, concluding that "there is an identity of causes of action between a suit for property damage and a suit for personal injury damage incurred by one person, or at least the community, and resulting from a single tort." Landry, 95 Wn. App. at 784; see also Ensley, 152 Wn. App. 891 (finding instance of impermissible claim splitting where first action sought to establish vicarious liability of the principal and second action sought to establish direct liability of the agent).
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As explained herein, Hyde could have asserted his claim of negligent
misrepresentation in his first complaint, but failed to do so. While this failure,
under the circumstances, caused his present lawsuit to be barred by res judicata,
it was not also barred by collateral estoppel, given that the cause of action
asserted herein (negligent misrepresentation) was not actually litigated in the first
action. Consequently, the City was wrong in asserting in its notice of intent to
seek CR 11 sanctions that Hyde's claim was brought in violation of the
prohibition on collateral estoppel.
CR 11 is not a fee-shifting mechanism. The notice requirement of Biggs v.
Vail exists to give fair warning to pleading violators and to deter violations at the
earliest possible time. The notice given herein did not satisfy the Biggs
requirements. The City, while correct in one assertion, was wrong in its two other
assertions. The legal equivalent of simply throwing things against the wall to see
what sticks does not serve as proper notice of a CR 11 violation.
Moreover, the circumstances suggest that Hyde's attorney filed the
negligent misrepresentation claim with a good faith belief that he could maintain
that cause of action. The City successfully argued in the prior action that Hyde's
negligence claim was distinct from a negligent misrepresentation claim, and this
court—in affirming the dismissal of Hyde's negligence claim—ruled that Hyde
had not included a negligent misrepresentation claim in the first action. Hyde
had a colorable—though losing—argument that he had not had a full opportunity
to litigate the negligent misrepresentation claim in the first proceeding. Furthermore, Hyde argued that his claim of negligent misrepresentation was not
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subject to the same statutory limitation period pursuant to which his claim of
negligence had been dismissed. "The principal concern of the rule is whether the
attorney acted reasonably in taking the action." John Doe v. Spokane & Inland
Empire Blood Bank. 55 Wn. App. 106, 111, 780 P.2d 853 (1989). This record
does not support the conclusion that the second action was brought in order to
harass the defendant. Moreover, the required CR 11 notice was severely
deficient—indeed, the City was more wrong than right in the assertions contained
in that notice. Given the entire record, the trial court erred in granting the motion
to impose sanctions and award attorney fees.3
We affirm the order of summary judgment dismissal. We vacate the order
awarding attorney fees and sanctions pursuant to CR 11.
We concur:
•C'C f******- \ \ \Q»
3 The trial court did not, in awarding attorney fees, specify the ground upon which the award was based. While the City maintains that the award of attorney fees should be affirmed on the basis of CR 11, it also argues that RCW 4.84.185—which authorizes fees ifan action is "frivolous and advanced without reasonable cause"—provides an alternative ground for affirmance. Awards pursuant to this statute are authorized only where a party is "forced to defend itself against meritless claims asserted for harassment, delay, nuisance or spite." Suarez v. Newguist, 70 Wn. App. 827, 832-33, 855 P.2d 1200 (1993). This is not such a case. We decline to affirm on this basis.
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