Stratford v. Umpqua Bank

CourtWashington Supreme Court
DecidedSeptember 14, 2023
Docket100,717-5
StatusPublished

This text of Stratford v. Umpqua Bank (Stratford v. Umpqua Bank) 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
Stratford v. Umpqua Bank, (Wash. 2023).

Opinion

NOTICE: SLIP OPINION (not the court’s final written decision)

The opinion that begins on the next page is a slip opinion. Slip opinions are the written opinions that are originally filed by the court. A slip opinion is not necessarily the court’s final written decision. Slip opinions can be changed by subsequent court orders. For example, a court may issue an order making substantive changes to a slip opinion or publishing for precedential purposes a previously “unpublished” opinion. Additionally, nonsubstantive edits (for style, grammar, citation, format, punctuation, etc.) are made before the opinions that have precedential value are published in the official reports of court decisions: the Washington Reports 2d and the Washington Appellate Reports. An opinion in the official reports replaces the slip opinion as the official opinion of the court. The slip opinion that begins on the next page is for a published opinion, and it has since been revised for publication in the printed official reports. The official text of the court’s opinion is found in the advance sheets and the bound volumes of the official reports. Also, an electronic version (intended to mirror the language found in the official reports) of the revised opinion can be found, free of charge, at this website: https://www.lexisnexis.com/clients/wareports. For more information about precedential (published) opinions, nonprecedential (unpublished) opinions, slip opinions, and the official reports, see https://www.courts.wa.gov/opinions and the information that is linked there. For the current opinion, go to https://www.lexisnexis.com/clients/wareports/. FILE THIS OPINION WAS FILED FOR RECORD AT 8 A.M. ON SEPTEMBER 14, 2023 IN CLERK’S OFFICE SUPREME COURT, STATE OF WASHINGTON SEPTEMBER 14, 2023 ERIN L. LENNON SUPREME COURT CLERK

IN THE SUPREME COURT OF THE STATE OF WASHINGTON

HEATHER STRATFORD and WILLIAM B. ) GEIBEL, JR., individually and their marital ) community, ) ) Respondents, ) No. 100717-5 ) v. ) En Banc ) UMPQUA BANK, an Oregon corporation; ) and BRYAN JARRETT, an individual, ) ) Filed : September 14, 2023 Petitioners. ) )

OWENS, J.—The parties to a lawsuit have a broad right to discovery, subject

to narrow limitations in the Civil Rules. A party may seek a protective order to limit

discovery under CR 26(c), which requires the party to show that good cause for the

protective order exists. This case requires us to decide whether Washington

recognizes the “apex doctrine,” which shields certain high-ranking officials from

deposition unless the proponent can first show that the witness has personal For the current opinion, go to https://www.lexisnexis.com/clients/wareports/. Stratford v. Umpqua Bank No. 100717-5

knowledge of the facts and that less intrusive means of discovery have been

unsuccessful.

Respondents Heather Stratford and William Geibel Jr. (collectively

Stratford) sued petitioner Umpqua Bank and its loan officer for negligent hiring

and fraud, among other claims. After written discovery, Stratford sought to

depose three high-level Umpqua executives. Umpqua moved for a protective

order, arguing the executives had no personal knowledge and the apex doctrine

shielded them from deposition. The trial court denied the motion. We granted

Umpqua’s petition for review to decide whether Washington does or should

follow the apex doctrine.

We answer these questions in the negative. The apex doctrine has not

been adopted by any court in this state. We decline to adopt the doctrine

because it improperly shifts the burden of proof in violation of our discovery

rules and it undermines the right of access to courts. Moreover, it is not

universally accepted or applied consistently across jurisdictions. Accordingly,

we affirm the trial court’s denial of Umpqua’s protective order and remand for

further proceedings.

FACTS

Bryan Jarrett worked as an insurance agent for several years. Clerk’s Papers

(CP) at 114. During his employment, Jarrett submitted fictitious insurance

2 For the current opinion, go to https://www.lexisnexis.com/clients/wareports/. Stratford v. Umpqua Bank No. 100717-5

applications and attempted to conceal his misconduct. Id. at 114-21. In 2014, the

Office of Insurance Commissioner (OIC) investigated Jarrett and revoked his license.

Id. at 119-21.

In 2015, Umpqua hired Jarrett as a home lending retail loan officer. Id. at 129-

30, 158-68. As part of the hiring process, Jarrett cleared a criminal background check.

Id. at 159-60. Umpqua did not learn about Jarrett’s OIC disciplinary record during its

preemployment screening and “was not provided with any information from

Mr. Jarrett or from any third party that would prohibit him from acting as a loan

officer.” Id. at 181.

Unfortunately, Jarrett’s conduct as a loan officer resulted in numerous customer

complaints. See, e.g., id. at 132-34, 138-42, 143-44. In February 2016, Umpqua met

with Jarrett to take corrective action but did not terminate his employment at that

time. Id. at 149-51, 143.

In late 2016, Stratford met Jarrett at the Umpqua Spokane offices to discuss a

construction loan. Id. at 4. Jarrett told Stratford that “‘his builder,’ Tony Begovich,

would be a better option” than her proposed builder. Id. at 55. Jarrett said Begovich

worked on other projects with Umpqua and had performed on time, within budget. Id.

In May 2017, Stratford and Begovich entered into a construction agreement

with a quoted budget of $402,268 to be completed in approximately seven months.

Id. at 78-87. To fund the project, Stratford obtained a construction loan from

3 For the current opinion, go to https://www.lexisnexis.com/clients/wareports/. Stratford v. Umpqua Bank No. 100717-5

Umpqua, executed in July 2017. Id. at 187-99. Shortly thereafter, Begovich began

construction. Id. at 202-03. In November 2017, while construction was ongoing,

Umpqua fired Jarrett. Id. at 143.

Begovich did not finish building Stratford’s home, which was damaged by

exposure to the elements. Id. at 202-03, 60-61. In March 2020, Stratford sued

Begovich, his company, and his subcontractors for breach of contract, fraud, and

negligence. Id. at 201-05. In November 2020, a trial court awarded Stratford a total

of $554,631.17 in damages. Id. at 230-35.

In May 2021, Stratford sued Jarrett and Umpqua for multiple causes of action,

including negligent misrepresentation, fraud, and negligent hiring. 1 CP at 1-12, 12-

20. Umpqua answered and asserted affirmative defenses. Id. at 21-30. The parties

engaged in extensive and contentious written discovery for months until filing cross

motions for summary judgment. See, e.g., CP at 811-15, 774, 819-60, 863-78, 902-

13; CP at 31-168, 158-237.

In January 2022, Stratford issued subpoenas to three Umpqua executives:

(1) Cort O’Haver, the president and chief executive officer (CEO) of Umpqua

Holdings Corporation, (2) Sheri Burns, the chief people officer at Umpqua, and

(3) Kevin Skinner, the head of Umpqua’s home lending division. Id. at 499. The

1 Stratford later released Jarrett from the lawsuit pursuant to a settlement agreement. See CP at 970-73.

4 For the current opinion, go to https://www.lexisnexis.com/clients/wareports/. Stratford v. Umpqua Bank No. 100717-5

parties discussed the purpose of the depositions and were ultimately unable to agree

about whether they were necessary. Id. at 499-500.

Umpqua moved for a protective order. Id. at 601-14, 499-501. It argued

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