Hudson v. Hapner

Madsen, C.J. ¶ 1 This case began with an automobile accident. The case was referred to mandatory arbitration, and the plaintiff, Lea Hudson, won a monetary award. Respondents (Hapner) requested a trial de novo under the Superior Court Mandatory Arbitration Rules (MAR). Hudson improved her position at trial, receiving a substantially greater award. Hapner successfully appealed, obtaining reversal and instructions for a new trial. Despite appellate success, Hapner moved in the trial court to withdraw his request for trial de novo, end the litigation, and pay the original arbitration award. The trial court denied the motion but the Court of Appeals reversed, holding that the mandatory arbitration rules provide a unilateral right to withdraw a request for trial de novo. We agree that the rules do provide for unilateral withdrawal but hold that this right must be exercised prior to the start of trial proceedings. Accordingly, we reverse the Court of Appeals and remand for a new trial. 26 FACTS ¶ 2 On April 6, 1998, Hapner rear-ended Hudson in an automobile accident. Hudson filed a lawsuit and requested arbitration under the mandatory arbitration rules. On November 17, 2000, arbitration resulted in an award of $14,537.97 for Hudson.1 Hapner requested a trial de novo. At the conclusion of trial the jury awarded Hudson a significantly higher amount than the arbitration award: $292,298.002 Pursuant to MAR 7.3, the court also granted attorney fees, $38,956.25; costs, $1,624.80; and later added $4,935.00 in attorney fees in a supplemental judgment. ¶ 3 Hapner appealed, alleging various evidentiary errors related to admissibility of expert witness testimony, portions of Hudson’s testimony, and use of a model spine at trial. ¶ 4 In a separate section of her appellate brief, Hudson requested attorney fees under MAR 7.3. She also requested fees and costs on appeal in the event she prevailed. ¶ 5 The Court of Appeals ruled that evidence had been improperly excluded and reversed, remanding the matter for a new trial. Hudson v. Hapner, noted at 126 Wn. App. 1057, 2005 WL 834433, at *3, 2005 Wash. App. LEXIS 610, at *8 (Hudson I). The court also denied Hudson’s attorney fees on appeal, holding that “her claim of reasonable attorney fees at trial must abide the outcome” of the second trial. 2005 WL 834433, at *4,2005 Wash. App. LEXIS 610, at *15. ¶ 6 After the Court of Appeals issued its decision, Hapner filed a cost bill requesting $200.00 in statutory attorney fees and $3,473.25 in costs incurred on appeal. Appellants’ 27 Cost Bill on Appeal at 1-2 (Apr. 21,2005) (citing RAP 14.3).3 Hapner argued he was “the prevailing party on appeal” and that he was entitled to statutory attorney fees and costs pursuant to RAP 14.3. ¶ 7 Hudson objected to the cost bill, arguing (i) “both parties must bear their own costs” because Hapner had prevailed only in part; (ii) awarding costs to Hapner violated the purposes of the mandatory arbitration rules, which contain their own attorney fees provisions; and (iii) in the alternative, an award of attorney fees and costs to Hapner under RAP 14.2 should at least “abide the final determination of this action.” Resp’t’s Objection to Appellants’ Cost Bill at 1, 3, 4, 6 (May 2, 2005). ¶ 8 The Court of Appeals awarded costs and attorney fees to Hapner as the substantially prevailing party. ¶ 9 Hudson’s subsequent motion for reconsideration (reiterating her request for attorney fees) and her petition for review in this court were both denied. ¶ 10 Following remand, Hapner filed a motion to compel supplemental discovery. Hudson complied, providing additional information about her medical records and billing. Thereafter, Hapner moved to withdraw his request for trial de novo and submitted a draft judgment in which he offered to pay the original arbitration award plus interest, as well as Hudson’s attorney fees and costs incurred in proceedings before the superior court.4 Hudson objected and moved to strike. The trial court denied Hapner’s motion, and Hapner appealed. 28 ¶ 11 In the second appeal, Hudson requested attorney fees and costs in a separate section of her brief.5 Specifically, she requested attorney fees and costs “[u]pon prevailing in this appeal and pursuant to MAR 7.3 and RAP 18.1(b).” Resp’t’s Br. at 25-26. ¶ 12 The Court of Appeals reversed the trial court, holding that the mandatory arbitration rules provide a unilateral right to withdraw at any time. The court also denied Hudson’s request for attorney fees and costs incurred during this second appeal, since Hudson was not the prevailing party on appeal. Hudson v. Hapner, 146 Wn. App. 280, 187 P.3d 311 (2008) (.Hudson II).6 Hudson then filed a motion for reconsideration, urging the court to reconsider both of its decisions (Hudson I and II) pursuant to RAP 2.5(c)(2) and grant her request for attorney fees incurred during both appeals. This motion was denied. ¶ 13 Hudson petitioned this court for review. ANALYSIS ¶ 14 On December 7, 2000, Hapner requested a trial de novo. After completing one trial, one appeal, and almost six years of litigation, Hapner sought to unilaterally withdraw his request for a trial de novo. Hudson argues there is no unilateral right to withdraw or, if it exists, it cannot be asserted at this late stage in proceedings. We conclude that Hapner had a unilateral right to withdraw his request. However, we agree with Hudson that his decision came too late. 29 ¶ 15 RCW 7.06.060(1) and the Mandatory Arbitration Rules do not explicitly create a right to withdraw a request for trial de novo. However, MAR 7.3, the attorney fees provision, mentions voluntary withdrawal of such a request. The court shall assess costs and reasonable attorney fees against a party who appeals the award and fails to improve the party’s position on the trial de novo. The court may assess costs and reasonable attorney fees against a party who voluntarily withdraws a request for a trial de novo. MAR 7.3 (emphasis added). ¶ 16 RCW 7.06.060(1) provides an almost identical statement but adds that fees and costs may be assessed following voluntary withdrawal “if the withdrawal is not requested in conjunction with the acceptance of an offer of compromise.” ¶ 17 We interpret the mandatory arbitration rules as if they were drafted by the legislature. Wiley v. Rehak, 143 Wn.2d 339, 343, 20 P.3d 404 (2001). Because we avoid interpreting statutes in ways that render provisions meaningless, Svendsen v. Stock, 143 Wn.2d 546, 555, 23 P.3d 455 (2001), the same principle applies here. The language of MAR 7.3 and RCW 7.06.060(1) contemplates that a party may withdraw a request for trial de novo without the consent of the other party. If this occurs, the court has discretion to assess attorney fees and costs. Hudson’s argument, that there is no unilateral right to withdraw, would render the attorney fee provisions meaningless. ¶ 18 The Court of Appeals reached the same conclusion in Thomas-Kerr v. Brown, 114 Wn. App. 554, 559 n.16, 59 P.3d 120 (2002). In that case the defendant withdrew his request for a trial de novo. The plaintiff argued the case should have proceeded to trial. Here, the Court of Appeals reasoned that MAR 7.3 implies that a party has a right to unilaterally withdraw a request for trial de novo and, since the plaintiff had not requested a trial de novo, she was not entitled to a jury trial. ¶ 19 Hudson argues that the Court of Appeals was wrong in Thomas-Kerr because once a case is no longer in 30 arbitration, the civil rules apply, not the mandatory arbitration rules. As authority, Hudson cites MAR 1.3(b)(1), which states that until a case is assigned to the arbitrator, the rules of civil procedure apply. But this provision does not preclude the application of MAR 7.3 after an arbitration is concluded. ¶ 20 The parties agree that the primary goal of mandatory arbitration is to reduce congestion in the courts and delays in hearing cases. Nevers v. Fireside, Inc., 133 Wn.2d 804, 815, 947 P.2d 721 (1997); Haywood v. Aranda, 143 Wn.2d 231, 238, 19 P.3d 406 (2001). We believe that interpreting MAR 7.3 and RCW 7.06.060(1) to permit unilateral withdrawal of a request for trial de novo furthers the intent underlying the rules and the statute. Regardless of the outcome in a particular case, as a general proposition, permitting withdrawals of requests for trial de novo serves the purposes of arbitration because such withdrawals will generally eliminate any further court congestion and delay in many, if not the majority, of these cases. The aim of MAR 7.3 is to “influence [a party’s] choices in the hope of reducing court congestion.” Du K. Do v. Farmer, 127 Wn. App. 180, 187, 110 P.3d 840 (2005). Our decision lends itself to this purpose, regardless of its impact in this particular case. ¶ 21 Accordingly, we hold the mandatory arbitration rules create an implied right to unilateral withdrawal. ¶ 22 Anticipating this holding, Hudson argues that even if the mandatory arbitration rules and chapter 7.06 RCW permit unilateral withdrawal, Hapner’s decision comes too late. We agree. ¶ 23 While we hold there is an implied right to unilaterally withdraw a request for trial de novo based on the language in the attorney fees provisions, neither the mandatory arbitration rules nor the statute implies a time limit for exercising the right. Therefore, we look to the language and purpose of the rules and chapter 7.06 RCW to determine the scope of the right. ¶ 24 First, the language of MAR 7.3 indicates that the decision to forgo a trial de novo after having exercised the 31 right to pursue it must be made prior to commencement of the trial. The rule refers to withdrawal of “a request for a trial de novo.” MAR 7.3 (emphasis added). It does not refer to withdrawal from the trial de novo itself. Once a trial de novo is underway, it is no longer a matter of withdrawing a “request” alone. ¶ 25 Next, Hudson argues that it is inconsistent with the goal of mandatory arbitration for a party to be able to withdraw a request for trial de novo after the case has been tried before a jury. She argues that this only encourages a party who is unsuccessful in arbitration to seek a trial de novo. We agree. ¶ 26 Without placing some limit on when a party can withdraw a request for trial de novo, one party is free to drag the case on by conducting discovery to see if his or her position improves or not. If it does not, the party can withdraw the request for a trial de novo, knowing there is only a risk of having to pay additional attorney fees and costs (which are discretionary, not mandatory) and no risk of paying any further damages. Allowing unilateral withdrawal during trial would artificially alter the balance of power between the parties. ¶ 27 This result would also be contrary to the specific purpose of the discretionary attorney fee and costs provision in MAR 7.3. When this rule was promulgated, its purpose was stated as follows: “The provision in Rule 7.3 concerning costs and attorney’s fees upon withdrawal of a request for a trial de novo discourages a party from requesting a trial de novo solely for the purpose of delaying enforcement of the [arbitration] award.” MAR 7.3 Judicial Council Comment.7 Regardless of whether delay is specifically intended, delay is certainly the effect when, as here, 32 the arbitration award remains unpaid and the party against whom the award was entered is permitted to pursue a trial de novo until he decides for strategic or tactical reasons that withdrawal from the trial de novo is the more advantageous course. Moreover, this result is contrary to the purpose of avoiding congestion and delay that we recognized in Nevers because it creates an incentive, rather than a penalty, to request trial de novo after a loss at arbitration proceedings. We recognize that requiring Mr. Hapner to conclude the trial de novo that he requested will add to delay and congestion in this specific case, but overall our decision will serve as a disincentive to requests for a trial de novo for the purpose of delay — whether delay for the sake of delay or delay with the purpose of assessing the strength of the other party’s case and making a final decision about trial at some future time based upon what is learned. Such misuse of the mandatory arbitration rules is to be discouraged. By permitting unilateral withdrawal prior to the start of trial de novo only, our interpretation of the mandatory arbitration rules and the statute removes the incentive to gamble on trial de novo and provides no tactical advantage for requesting it. It comports with the language and the purpose of MAR 7.3’s discretionary attorney fees provision regarding withdrawal of a request for a trial de novo. Accordingly, we hold the unilateral right to withdrawal must be exercised prior to the start of trial de novo. ATTORNEY FEES AND COSTS ¶ 28 Hudson claims attorney fees and costs for all proceedings from the date of Hapner’s request for trial de novo through the proceedings pending before this court, pursuant to MAR 7.3. Hapner disputes Hudson’s entitlement to fees and costs, except fees and costs incurred in the superior court, which Hapner offered to pay in his notice of presentment. 33 ¶ 29 Hapner first argues Hudson cannot claim fees and costs incurred in proceedings before the Court of Appeals on the first and second appeal because she did not comply with the pleading requirements of RAP 18.1, which provides: (a) Generally. If applicable law grants to a party the right to recover reasonable attorney fees or expenses on review before either the Court of Appeals or Supreme Court, the party must request the fees or expenses as provided in this rule, unless a statute specifies that the request is to be directed to the trial court. (b) Argument in Brief. The party must devote a section of its opening brief to the request for the fees or expenses. Requests made at the Court of Appeals will be considered as continuing requests at the Supreme Court. The request should not be made in the cost bill. In a motion on the merits pursuant to rule 18.14, the request and supporting argument must be included in the motion or response if the requesting party has not yet filed a brief. (Boldface omitted.) ¶ 30 This court has held RAP 18.1(b) requires “[argument and citation to authority” as necessary to inform the court of grounds for an award, not merely “a bald request for attorney fees.” Wilson Court Ltd. P’ship v. Tony Maroni’s, Inc., 134 Wn.2d 692, 710 n.4, 952 P.2d 590 (1998). ¶ 31 Hudson requested attorney fees in a separate section of her brief in both appeals. In each case, she cited MAR 7.3 and relevant case law for authority. Therefore, she met the requirements of RAP 18.1(b).8 ¶ 32 Hapner argues these requests were insufficient because Hudson expressed her requests as contingencies, i.e., she requested fees and costs only in the event she prevailed in the Court of Appeals, which she did not. Hudson’s requests for attorney fees in both appeals were contingent. However, RAP 18.1 does not prohibit this court from awarding attorney fees simply because the request is 34 expressed as a contingency. Only a separate section and citation to authority are required. Hudson’s requests, despite some imprecise language, are sufficient to preserve her claim to attorney fees for both appeals, as well as before this court. ¶ 33 Although we conclude that Hudson preserved her right to claim attorney fees and costs under the mandatory arbitration rules, whether she is entitled to those costs and fees must abide the outcome of retrial. As noted, MAR 7.3 provides: The court shall assess costs and reasonable attorney fees against a party who appeals the award and fails to improve the party’s position on the trial de novo. The court may assess costs and reasonable attorney fees against a party who voluntarily withdraws a request for a trial de novo. ¶ 34 Until the case is concluded there is no way to know whether Hapner will fail to improve his position.9 ¶ 35 In addition to requesting attorney fees and costs for all proceedings after Hapner’s trial de novo request, Hudson asks this court to reevaluate the Court of Appeals’ decision in Hudson I. Hudson contends the “ ‘prevailing part/ ” is one who prevails “ ‘at the conclusion of the entire case.’ ” Resp’t’s Corrected Pet. for Review at 23 (quoting Tribble v. Allstate Prop. & Cas. Ins. Co., 134 Wn. App. 163, 174, 139 P.3d 373 (2006)). Hudson reasons that Hapner has not yet improved his position at trial de novo, and thus has not “prevailed” so far. She argues Hapner should not have been awarded fees and costs during the first appeal and that this result, as well as the denial of her fees and costs in both Hudson I and II, conflicts with Tribble. ¶ 36 As far as Hudson’s arguments related to costs and fees under MAR 7.3, Hudson is correct. However, Hudson 35 confuses a prevailing party award under RAP 14.2 with attorney fees to be awarded at the conclusion of trial de novo under MAR 7.3. RAP 14.2 provides: A commissioner or clerk of the appellate court will award costs to the party that substantially prevails on review, unless the appellate court directs otherwise in its decision terminating review. If there is no substantially prevailing party on review, the commissioner or clerk will not award costs to any party. An award of costs will specify the party who must pay the award. ¶ 37 Attorney fees under RAP 14.2 are statutory attorney fees and costs are limited to costs on review. A prevailing party is determined by the outcome of the appeal. In contrast, attorney fees and costs under MAR 7.3 depend on the outcome of a trial de novo and include all “costs and reasonable attorney fees incurred after a request for a trial de novo is filed.” MAR 7.3. ¶ 38 In Hudson I, Hapner substantially prevailed because he succeeded in achieving the relief he requested: reversal of the trial de novo result and remand for retrial. This result does not depend on whether Hapner improves his position in the trial de novo. Thus, the Court of Appeals correctly awarded him costs based on RAP 14.2. Of course, if Hapner fails to improve his arbitration position, then the trial court must award Hudson attorney fees and costs from both appeals under the mandatory provisions of MAR 7.3. CONCLUSION ¶ 39 We hold that MAR 7.3 and RCW 7.06.060(1) imply a unilateral right to withdraw a request for trial de novo, but withdrawal must be exercised prior to the start of trial. The trial de novo in this case has already occurred and been reversed on appeal. An appellate decision reversing and remanding for a new trial does not restart the clock. Instead, the situation is analogous to a trial that has begun but has not been completed. Hapner may not unilaterally 36 withdraw at this time and must undergo a second trial de novo unless the parties reach a settlement. C. Johnson, Alexander, Chambers, Owens, and Stephens, JJ., concur. Footnotes [1] Hudson was awarded $10,500.00 in general damages and $4,037.97 in special damages. The award contained no amount for attorney fees or costs. [2] The jury awarded $26,048 in past economic damages, $140,000 in future economic damages, and $126,250 in past and future noneconomic damages, for a total award of $292,298. [3] RAP 14.2 instructs appellate courts to award costs and statutory attorney fees “to the party that substantially prevails on review” or, where neither party substantially prevails, to no one. RAP 18.1(b) also provides that the request for attorney fees must be in a separate section of the party’s opening brief and “should not be made in the cost bill.” [4] In the notice of presentment, Hapner offered to pay (1) the original arbitration award plus interest from the date of the filing of request for trial de novo, (2) attorney fees and taxable costs at trial de novo, and (3) attorney fees upon remand to the superior court. The offer excluded attorney fees and costs on first appeal to the Court of Appeals, which Hapner argues Hudson is not entitled to. [5] Hudson requested the Court of Appeals modify its opinions in both Hudson I and Hudson v. Hapner, 146 Wn. App. 280, 187 P.3d 311 (2008), “in order to award Plaintiff her [sic] all of her attorney fees and costs incurred since Defendants filed their Request for Trial de Novo in accordance with MAR 7.3.” Resp’t’s Mot. for Recons, and Mot. to Modify at 1 (July 28, 2008). [6] The Court of Appeals also found remedies at law adequate (and equitable remedies unnecessary) because “[h]ere, Hudson’s remedy under MAR 7.3 is the original arbitration award, interest, and attorney fees and costs.” Hudson II, 146 Wn. App. at 290. Hudson argues this statement is inconsistent with the Court of Appeals’ own holdings that denied her attorney fees and costs on both appeals. [7] MAR 7.3 was adopted in 1980 as part of the original rules on mandatory arbitration. This comment accompanied the rule to explain its purpose when the rule was first proposed. Effective September 21,1989, this court ordered that all of the Judicial Council Comments be deleted from the mandatory arbitration rules in the official Rules of Court. The only reason provided was that the court had “ ‘determined that the deletion of those comments will aid in the prompt and orderly administration of justice.’ ” 4A Karl B. Tegland, Washington Practice: Rules 32 Practice 78 n.17 (7th ed. 2008). “[T]he comments remain a generally reliable guide to the intent of the drafters.” Id. [8] Hapner does not dispute that Hudson’s request for costs and attorney fees incurred in proceedings before this court meets the requirements of RAP 18.1. [9] In Tribble v. Allstate Property & Casualty Insurance Co., 134 Wn. App. 163, 174-75, 139 P.3d 373 (2006), the Court of Appeals held that a party claiming mandatory fees and costs under MAR 7.3 is entitled to all fees and costs from the entire proceedings (i.e., trial and appeals) after the trial de novo request was made. Tribble, 134 Wn. App. at 174-75. This means that if, after a second trial de novo, Hapner fails to improve his position, Hudson is entitled to fees and costs for both appeals and both trials.