Washington Restricts a Litigant’s Appeal from Mandatory Arbitration

By Michelle A. Corsi

A jointly and severally liable litigant who appeals a mandatory arbitration award must improve the position of all defendants to avoid paying her opponent’s legal fees and costs associated with the new trial, the Court of Appeals had held.  Huntington v. Mueller, No. 42977-2-II, 2013 WL 2353783 (May 29, 2013).

In Huntington, Mueller’s car collided with a car driven by Henry, in which Huntington was a passenger.  Huntington was injured and sued both Mueller and Henry; all parties stipulated to mandatory arbitration.  The arbitrator awarded Huntington $50,000 and found that Mueller was 100% at fault because she negligently accelerated and caused the collision when Henry had the right of way.

Mueller requested a trial de novo, where a jury increased the award to Huntington and found Mueller and Henry both 50% liable.  The trial court entered judgment against Mueller and Henry jointly and severally, and ordered Mueller to pay Huntington’s attorney fees and costs, concluding that Mueller was responsible for Huntington’s attorney fees and costs because although Mueller had improved her position as to co-defendant Henry, Mueller did not improve her position as to plaintiff Huntington.  The trial court explained Mueller was jointly and severally liable for a judgment greater than the arbitration award and that any potential contribution from Henry was irrelevant under RCW 7.60.060 and MAR 7.3.  Mueller appealed the award of attorney fees.

Mueller argued that in a multi-party case where the jury allocates fault, the ultimate amount paid by the individual defendants determines if the appealing party improved her position.  The Court of Appeals rejected this argument, determining that logic might apply when an arbitrator finds co-defendants jointly and severally liable, but the trial de novo results only in several liability.  These co-defendants would have improved their position because they cannot be required to pay more than their several share of the award.  But, as the Court of Appeals noted, “Mueller could not reasonably have believed the jury would find Huntington at fault for a car accident where Huntington was simply a passenger in Henry’s vehicle.”

Where co-defendants are unlikely to escape joint and several liability, a mere shift in the percentage of liability between them will not change their positions relative to the plaintiff.  And the right of contribution among them does not change the extent of each co-defendant’s liability.  As the Court of Appeals observed, Mueller’s liability for the whole would not be satisfied until co-defendant Henry paid her portion.  Accordingly, Mueller’s right to seek contribution from Henry did not change the extent of her liability to Huntington.

Moreover, awarding Huntington attorney fees and costs against Mueller fulfills the purposes of RCW 7.06.060 and MAR 7.3 (easing court congestion, encouraging settlement, and discouraging meritless appeals).  Huntington was the party the rules seek to protect from unnecessary litigation costs.  Not only was he fault-free, but the jury increased his damage award.  It was, therefore, unreasonable for Huntington to incur the costs of a trial de novo with reimbursement.

Finally, the opinion includes a puzzling statement based on Christie-Lambert Van & Storage Co., Inc. v. McLeod, 39 Wn. App. 298, 693 P.2d 161 (1984).  Relying on this decision, the Huntington  court stated that Mueller could have sought a trial de novo to determine only the percentage of fault between her and Henry.  However, the Christie-Lambert holding was based on the plaintiff’s offer to stipulate to a trial de novo limited to co-defendants’ cross-claims.  It would not be wise for a defense lawyer to rely on this part of the holding in the absence of such a stipulation because parties generally may not unilaterally seek a partial trial de novo of a mandatory arbitration award.

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