How we won Fualaau
It was in February 1997 that the Seattle press reported the shocking news that schoolteacher Mary Kay Letourneau was charged with rape of a boy who had been her sixth-grade student and was reportedly only 12 years old. Our client, Highline School District, was Letourneau’s employer.
The School District’s initial reaction was that this certainly must be inaccurate. After all, Letourneau was an experienced and well-liked teacher, a married woman, and a mother of four. Her credentials were impeccable. She also was pregnant — but even then, there was no thought her former sixth-grade student Vili Fualaau could be the father.
Highline School District retained us in 1997 to protect its interests in this strange case. At that point, the case was only a criminal matter, State v. Letourneau, based on a felony charge of rape of a child. Vili Fualaau was several years under the age of consent when he and Letourneau were intimate. But the criminal charge was only the beginning of the legal saga. Time and again, just when the story seemed to have reached its conclusion, yet another chapter would be written, and the story took a new twist.
Several weeks after Mary’s arrest, it was announced that Vili Fualaau, then a 13-year-old boy, was indeed the father of Mary’s fifth child. The following year, Letourneau violated her probation, again had sex with the underage Vili, and conceived and bore another child.
The School District had the foresight to retain counsel from the very beginning. We promptly investigated. We spoke with police officers, School District personnel, students, and prosecutors. Our plan was to learn the entire story, every fact, every witness, and every lead. Witness statements were gathered, records collected, and policies reviewed. It was this legwork that formed the basis of the defense to a civil lawsuit that was not brought until years later. As part of this early investigation, we pinned down key facts and testimony through affidavits that proved invaluable at trial in 2002. This early investigation later proved crucial. While memories were still fresh, we were able to evaluate plaintiffs’ claims early on for what they were: unfounded.
Vili Fualaau’s mother, Soona Vili, eventually sued on her son’s behalf, alleging that the School District and the City of Des Moines should have known of the illicit relationship and prevented it. She claimed that School District personnel witnessed untoward conduct of Letourneau toward her young student and that Des Moines police officers discovered the couple in a compromising position in Letourneau’s van in the middle of the night.
Once the lawsuit was filed, we pursued discovery into the backgrounds of the plaintiffs; including their employment, education, finances, medical history, and tax history. While seemingly tangential to plaintiffs’ negligence theories, this background research raised serious questions about plaintiffs’ motivation and credibility. We were able to show at trial that Soona Vili had exploited her son’s story for at least $220,000, then failed to pay taxes on that income.
Before trial, we brought motions for summary judgment, seeking dismissal of major portions of plaintiffs’ claims. The court granted a motion for partial summary judgment that dismissed plaintiffs’ claims for the cost of raising Vili and Mary’s two children. The court agreed that Washington’s public policy bars such claims. The court also agreed with us that the Uniform Parentage Act provides the exclusive remedy for child support, providing recovery against the biological parents.
We painstakingly cataloged the four years of plaintiffs’ media appearances. This too paid off. We were able to show the jury that Soona and Vili had asserted publicly in tabloid-TV interviews and elsewhere that there was no crime, no rape, and no victim. To play such a video clip during cross-examination immediately after testimony directly to the contrary was a powerful tool.
We also pored over reams of correspondence and book drafts. They contained many admissions by Soona and Vili that this was only a love story, and Vili was not a victim. Soona asserted that Vili, not Letourneau, had betrayed her. When we questioned plaintiffs about these statements at trial, it showed not only factual inconsistencies, but also the fundamental contradiction of their position: they wanted millions of dollars in compensation, yet believed that Vili was a party to a love story, not a crime.
And the inconsistencies in plaintiffs’ varying accounts were remarkable. It is not often we as lawyers get a case so full of admitted contradiction. At one point during trial, Vili Fualaau admitted that his trial testimony so directly contradicted his earlier deposition testimony that he was guilty of perjury. At another point, he testified: "What do you want me to do, apologize for lying in my deposition?"
We tried the case to a jury of 12, with two alternates. The trial lasted more than two months. Pretrial motions had begun March 11, 2002, and the jury rendered a defense verdict on May 20, 2002. Despite the length of the trial, the jurors were just as attentive in week nine as they were in week one. Ten of 12 jurors found that the School District was not negligent. One juror thought that the School District was negligent. The twelfth juror abstained, not voting either way on the issue of the District’s negligence but declined comment on her reasons.
We of course are pleased with the outcome as is the School District. We are thankful that those involved early on had the wherewithal to investigate early and to document the facts of the case before memories faded, or worse, become distorted by relentless media coverage. It was a rare, perhaps once-in-a-lifetime experience to participate in such an unusual case, and the relentless television and press coverage were a constant reminder of the unique nature of the lawsuit. This case truly involved "sex, lies and videotape." We are happy to have been able to serve the Highline School District and the larger community obtaining what our clients and we consider a just verdict. Ironically, Vili Fualaau himself seemed to underscore our client’s blamelessness when he voluntarily re-enrolled in the Highline School District at the very time when his lawyers were in the trial against that same School District.
The last chapter of this saga still has yet to be written.
Vili testified that he and Mary plan to write a book after she is released
from prison in October 2005. We understand from European media sources
that a jailhouse wedding is planned.
We also want to thank the many Lee Smart lawyers and staff who worked
on this case, particularly attorney Jennifer M. Ilenstine, whose years
of hard work in discovery paid dividends at trial.
Adjuster settling with claimant is practicing law
An insurance adjuster dealing with an unrepresented claimant was practicing law when she completed release forms, advised the claimants regarding the settlement process, and recommended that the claimants sign a release without advising them of the legal consequences, the Washington Supreme Court has held.
In Jones v. Allstate Ins. Co., no. 70607-7 (May 2002), Allstate’s insured, Jeremy France, ran a stop sign and hit Janet Jones. Ms. Jones sustained severe injuries and incurred more than $75,000 in medical bills. The facts suggested that her seat belt may have failed and contributed to her injuries.
Three days after the accident, Allstate adjuster Christy Klein wrote to Ms. Jones, asserting Allstate’s policy of providing quality service to anyone involved in an accident with an Allstate insured. Over the next two months, Klein called Ms. Jones’s husband almost daily, helping him identify and secure Janet’s medical insurance coverage and obtaining subrogation waivers. Mr. Jones stated that Klein was more helpful to him than his own insurance company.
In December 1997, Mr. Jones met with attorneys to discuss a possible seatbelt product-liability claim. Mr. Jones did not consult with either attorney about settling the claim against France or Allstate’s offer to settle the claim. He later informed Klein that he had met with lawyers to discuss the possible seatbelt claim but had not retained them. Klein told Mr. Jones that she could not represent him if he hired an attorney.
In January 1998, Klein sent Jones a letter, a check, and a release form. Klein offered the $25,000 limit of the bodily injury coverage under France’s policy. The release was headed "release of all claims" and stated that in return for the $25,000, the Joneses released the France family, Allstate, "and any other person, firm or corporation charged or chargeable with responsibility for any and all claims." A note on the release said, "please sign and return to my attention." Ms. Jones signed the release and deposited the check, but Mr. Jones thought that they should not sign it because they might be giving up all of their claims.
In September 1998 the Joneses tried to return the money by writing Allstate a check for $25,000. Allstate returned the check. The Joneses then sued Allstate, alleging that the release could bar their product-liability claim and would eliminate joint and several liability. The Joneses moved for summary judgment, asking the court to hold that Allstate engaged in the unlicensed, negligent practice of law by drafting release and settlement instruments, misrepresenting the terms of these instruments, and advising the Joneses to sign them. The trial court granted the Joneses’ motion. Allstate sought discretionary review before the Supreme Court.
The Supreme Court noted that Klein’s conduct, even if she did nothing more than enter objective data onto preprinted legal forms, constituted the practice of law. The Court held that insurance adjusters, when preparing documents that affect the legal rights of third-party claimants and advising third parties to sign them, must comply with the standard of practice of an attorney. Allstate thus owed the Joneses a duty like that owed by an attorney to an unrepresented third party. When the lawyer knows or should know that the unrepresented person misunderstands the lawyer’s role in the matter, the lawyer must make reasonable effort to correct the misunderstanding.
The Jones Court concluded that Klein had led the Joneses to believe that she had their best interests in mind but simultaneously appeared disinterested in the outcome of the settlement. The Court recognized that Allstate had a stated goal of decreasing legal representation in claim processes, so that Allstate sought to settle claims before a claimant hired an attorney. The Court found that Allstate’s claims adjuster fell below an attorney’s standard of practice in several ways: she advised the Joneses to sign the release; she did not advise them of legal consequences in doing so or refer them to independent counsel; she did not disclose to the Joneses that she had an interest that conflicted with theirs; and she followed Allstate’s policy of discouraging attorney involvement in the claim process.
Court rejects Y2K coverage claims
Expenses incurred in upgrading a computer system to avoid Y2K problems are not covered under first-party insurance policies, the Washington Court of Appeals recently held.
In Port of Seattle v. Lexington Ins. Co., no. 49640-9-I-7 (May 2002), The Port of Seattle incurred expenses to upgrade its computer network to avoid Year 2000, or Y2K, complications. The software and operating systems of that network contained a two-digit field code to denote the number of the current year. The Port, like millions of other computer users, were concerned that as year 1999 rolled over to 2000, their computers would not work properly because they would treat the year 2000 as the year 1900. As a result, the Port incurred substantial expense in the mid- to late 1990s to reprogram its computers to contain a four-digit field code.
The Port sued several of its first-party insurance carriers to obtain coverage for its Y2K expenses, based on various policy provisions. The trial court dismissed the action on summary judgment, and the Port appealed.
First, the Port alleged coverage under the "Data Processing Media" coverage of its policies. That provision covered "loss of computer resources" due to a "computer virus." Because the policies did not define these terms, the Court of Appeals looked t their ordinary, dictionary definitions. The court disagreed with the Port that a computer "virus" was like a biological "virus" that is the "causative agent of an infectious disease." On the contrary, several dictionaries contained definitions of "computer virus," consistently defining that term as a computer program that is "hidden within another seemingly innocuous program that usually performs a malicious action."
Under this definition, the Y2K flaw differed from a computer virus because it "was merely the result of an original programming decision. It was not infected by anything external nor was it communicable" and unlike a typical computer virus did not replicate itself.
Second, the Port sought to avoid the policies’ exclusion for "inherent vice." The Court of Appeals again disagreed. That exclusion defeated coverage for damages caused by existing defects, or the inherent nature of the commodity that can cause deterioration over time. Y2K was "an internal quality that brought about its own problem" resulting from the inherent failure to provide for a four-digit date field code.
Third, the Port sought coverage under the "sue and labor" clause of the policies. That clause allows reimbursement to the insured for expenses that it incurs to prevent or mitigate a covered loss. In other words, the insurers’ obligation arises when the policyholder acts to prevent a loss for which the insurer would be liable.
The insurers sought to avoid the "sue and labor" clause because it is triggered only when measures are taken to prevent losses from occurring during the policy period. The Port incurred its Y2K expenses starting in the early 1990s and especially in 1997. It was not until the Port tested and assessed its systems in 1998 that it discovered that it would incur losses on or after January 1, 2000. The defendant insurers’ policies provided coverage for years 1997 to 1999. The Court of Appeals agreed with the insurers, holding, "Because the Port’s actions [to correct the Y2K defect] were directed at preventing losses that it anticipated would occur on or after January 1, 2000, the [sue and labor] clause necessarily did not apply." The Port had acted to prevent what would have occurred after the policies had lapsed.
The insurers advanced one argument that the Court of Appeals rejected. They sought to impose a 12-month limitation on suit that is standard in many first-party insurance policies and that Washington insurance regulations permit. They based that argument on an allegation on the Port’s complaint that it was issued a standard form of policy, and that standard form included a 12-month suit limitation. However, the policies here in fact did not contain the suit limitation, and the court did not impose it.
Around The Firm
Joel E. Wright and Stacy D. Heard prevailed before Division One of the Court of Appeals in the legal malpractice case, Berry v. Fleury. Joel and Stacy had won partial summary judgment of dismissals in Superior Court, and plaintiff appealed. Plaintiff claimed that his former attorney in a family law case violated the Consumer Protection Act. Plaintiff also claimed that he suffered emotional distress, business losses, and alienation of his children. The Court of Appeals affirmed the Superior Court’s dismissals of plaintiff’s claims.
Francis X. Olding won at trial in Haynes v. Calvert, a boundary dispute. A survey taken by the defendant showed a discrepancy between the survey and the existing boundary fence. After the defendant tried to move the boundary fence by force, Frank sued, won a restraining order, and proceeded to trial. Before trial, Frank defeated defendant’s motion for dismissal, in which defendant claimed that that the land belonged to the Muckleshoot Tribe and that the court lacked jurisdiction. At trial, Frank used ancient county records and other evidence, including a site visit by the judge, to prove the recognized boundary. The court ruled in favor of Frank’s client, ordered the defendant ejected from the land, quieted title in favor of plaintiff and awarded damages for the defendant’s improper occupation of the land. … Michelle A. Corsi has won victories in a pair of real estate malpractice actions. In Colberg v. Windermere, the plaintiff home buyer sued for nondisclosure of defects in the septic system. Michelle successfully moved for summary judgment because her client, the listing agent, had no knowledge of such defects. And in LaWall v. Home Realty, the plaintiff property buyers sued for a variety of defects in the home. The court granted partial summary judgment to Michelle’s client, agreeing that the real estate agent was not liable for failure to disclose.
Kenneth E. Hepworth successfully defended claims brought against an excavation contractor in Leland Hyatt Const. v. Port of Sunnyside v. Sunnyside Valley Irr. Dist. The lawsuit arose out of the Sunnyside Municipal Airport Runway Safety Project. The Port of Sunnyside hired Sunnyside Valley Irrigation District to lay 1,400 feet of 54-inch pipe in a ditch. The Port later hired Hyatt to backfill the ditch to grade. After the work was completed, the Port learned that 160 feet of the pipe had collapsed. Hyatt had to sue to collect the balance due under its contract with the Port. The Port counterclaimed that Hyatt breached its contract with the Port by failing to properly backfill and compact the ditch, resulting in the damage to the pipe. The Port also brought a third-party complaint against the Irrigation District. The jury agreed with Ken that the pipe collapsed due to the conduct of the Irrigation District, not Hyatt. … Ken Hepworth also won in Beckett v. Demopolis. Ken’s client, a lawyer, sued his former client to collect unpaid legal fees. The ex-client counterclaimed for breach of contract, breach of fiduciary duty, and professional negligence. The court agreed with Ken that there was no merit to any of the counterclaims and dismissed them with prejudice on summary judgment.
‘Discovery rule’ avoids limitation
on contract claim
The "discovery rule" applies to contract claims, the Washington Court of Appeals has held in a case that has broad implications for contractors.
In Khorram v. Kinsington Homes, no. 48181-9 (May 2002), the Khorrams hired Kinsington to build their home. The house was completed in June 1993. In 1998, the Khorrams noticed bubbling and peeling exterior paint and rotted molding. Repairs uncovered extensive dry rot. In April 2000 they learned that dry rot probably had been ongoing ever since the house was built. The Khorrams sued Kinsington for breaches of contract, warranties, and guarantees.
Kinsington moved to dismiss the action as time-barred. A three-year statute of limitations applies to claims based on tort or on oral contracts; a six-year statute applies to claims on written contracts. The construction statute of repose further bars claims accruing more than six years after substantial completion of construction. The trial court granted the motion. The Khorrams appealed.
The Khorrams argued that the "discovery rule" applies in contract actions, so that the six-year statute began to run only when they discovered the defects in 1998. The Court of Appeals agreed, concluding that the reasons for the discovery rule in tort claims apply equally in contract actions and that the statute of limitations for contract actions begins to run when a party knows or should know of the other party’s breach. Here, the Khorrams discovered the breach in 1998, within the statute of repose, and sued within two years of discovering the alleged breach, so that the statute of limitations did not bar their claims.
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