Superior Court County: King. Superior Court Cause No: 92-2-16406-0. Date filed in Superior Court: November 3, 1993, July 8, 1994, August 2, 1994, August 30, 1994. Superior Court Judge Signing: James D. McCutcheon and Anne Ellington.
Kennedy, A.c.j., Webster, J., Becker, J., concur
KENNEDY, A.C.J. -- The Bankruptcy Estate of Ross and Cassandra Hansen (Bankruptcy Estate) and Ross Hansen (plaintiffs) appeal the summary judgment dismissing their claims against the City of Kent (City) for breach of civil
rights under 42 U.S.C. § 1983, contending that the Honorable James McCutcheon erred by ruling that the City was entitled to qualified immunity. The City contends that Judge McCutcheon did not dismiss the civil rights claim on grounds of qualified immunity; rather he dismissed the claim because plaintiffs failed to introduce evidence that a "final policy maker" caused the alleged civil rights violation, and because the chain of causation was broken when the Honorable Susan Agid issued a seizure warrant based on a determination of probable cause. The plaintiffs contend that if this is so, Judge McCutcheon nevertheless erred in dismissing their claims. The City cross-appeals, contending that new evidence considered by Judge McCutcheon following a motion for reconsideration is not properly part of the record for this appeal, challenging the earlier summary judgment ruling of the Honorable Anne Ellington that plaintiffs' claims were not barred by res judicata, and contending further that Judge Ellington interlineated superfluous findings of fact and conclusions of law which should be disregarded on appeal.
We conclude that the evidence considered by Judge McCutcheon following the motion for reconsideration is properly in the record, reverse Judge McCutcheon's summary judgment order, affirm Judge Ellington's summary judgment order, and remand for such proceedings as shall be consistent with the opinion of this court.
In June 1989, the Kent Police Department conducted an investigation into a major marijuana growing operation run by one Raymond Hendrickson. After arresting Hendrickson, police discovered documents and other evidence which indicated that Hendrickson had "laundered" profits from the sale of marijuana through two businesses owned and operated by Ross Hansen: Auburn Precious Metals and Northwest Territorial Mint. After questioning Hansen and some of his employees, and after consulting with
Chief Frederiksen of the Kent Police Department and with a deputy prosecuting attorney for King County, Detective Miller of the Kent Police Department appeared before then-King County Superior Court Judge Susan Agid with a 13-page affidavit requesting seven search and seizure warrants. The proposed warrants authorized searches of Hansen's home, the two businesses, various bank accounts and vehicles, and ordered police to seize Ross Hansen, all documents of ownership, and "the business assets of AUBURN PRECIOUS METALS, NORTHWEST TERRITORIAL MINT, and HANSEN'S personal assets, including any and all personal and business bank accounts, as permitted under RCW 69.50.505(b) as amended by Chapter 271 of 1989 Session Laws of the State of Washington." Clerk's papers at 137, et seq.
Judge Agid took the affidavit and proposed warrants home to study them overnight. After determining that the affidavit contained probable cause to believe that Hansen had committed violations of Washington's Uniform Controlled Substances Act and the conspiracy and criminal profiteering statutes, and that evidence of these crimes would be found in the places the police sought to search, Judge Agid issued the seven warrants on July 19, 1989. The warrants were executed on July 21, 1989. Ross Hansen was arrested for criminal profiteering, conspiracy, and violation of the Uniform Controlled Substances Act. Police occupied his business premises 24 hours a day, to the exclusion of the owners, from July 21 to August 17, 1989, at which time the Honorable Peter Steere ordered the premises restored to Hansen. In the meantime, police removed an entire tractor-trailer of inventory from Hansen's business premises to their own storage facilities, including precious metals and other valuable personal property. Hansen's legitimate business customers were allowed access one-at-a-time, to recover property which they could establish belonged to them and not to the businesses.
On August 4, 1989, the City commenced an administrative law proceeding under RCW 69.50.505 to forfeit the
personal property seized on July 21. The Notice of Seizure and Intended Forfeiture was signed by Chief Frederiksen.
On that same day, the City, represented by its City Attorney, instituted an in rem forfeiture proceeding in King County Superior Court, under RCW 69.50.505, seeking to forfeit Hansen's real property seized on July 21. On August 11, Judge Steere, determining that Judge Agid's seizure warrants were supported by probable cause, executed an in rem seizure warrant for the real property. However, on August 17, he revoked his own in rem seizure warrant, after concluding that the 1989 amendments to RCW 69.50.505 allowing forfeiture of real property were not yet effective in April 1989--the last date the City could show any financial transactions between Hansen and the marijuana grower Hendrickson. Accordingly, Judge Steere determined that the City could not validly seize and forfeit Hansen's real property under RCW 69.50.505.
As permitted by RCW 69.50.505, Hansen moved to transfer the administrative personalty forfeiture proceeding to Superior Court, and to consolidate it with the in rem real property forfeiture proceeding. Upon transfer, the Honorable James Bates initially ruled, on August 23, 1989, that Judge Agid's seizure warrants were supported by probable cause, and denied Hansen's motion for return of the personal property. However, on reconsideration, on September 13, 1989, Judge Bates ruled that Judge Agid's seizure warrants were not supported by probable cause, and ordered all personal and business assets returned to Hansen.
The City took no further action on its two forfeiture proceedings; no appeal was filed with respect to the rulings of Judges Steere and Bates. In December 1990, the presiding judge of the King County Superior Court dismissed the City's forfeiture proceedings without prejudice, for failure of the parties to file a joint status report.
Hansen claims that some of the personal property was never returned, that some items were returned damaged, and that he was never able to recover from the loss of
business occasioned by the July 21 seizures and having his businesses shut down for 2-1/2 months. In December 1989, as proprietor of Auburn Precious Metals and Northwest Territorial Mint, Hansen declared bankruptcy.
No state criminal charges were ever filed against Hansen. However, the United States Attorney brought federal charges, and Hansen eventually pleaded guilty to two counts of failure to file currency transaction reports (failure to report to the Internal Revenue Service two cash transactions with marijuana grower Hendrickson exceeding $10,000 each), two counts of structuring transactions to avoid the IRS reporting requirements (breaking down transactions in excess of $10,000 into smaller transactions), and one count of being a felon in possession of a firearm seized during the execution of the search and seizure warrants (Hansen had previously been convicted of selling an illegal firearm to an undercover federal agent, and was not allowed to possess firearms). Hansen served his time for these federal offenses, and was released in the Spring of 1994.
Meanwhile, in July 1992, Ross Hansen and the Bankruptcy Estate brought the instant lawsuit, seeking, inter alia, damages under 42 U.S.C. § 1983 for alleged violation of Hansen's constitutional rights to be free from unlawful arrest, unlawful imprisonment, and unlawful search and seizure.
In August 1993, the City moved for summary judgment, contending that Hansen was precluded under res judicata from raising these civil rights claims in the current lawsuit, in that he had failed to raise them in the 1989 forfeiture proceedings. Plaintiffs moved for summary judgment, contending that Judge Bates' ruling in the forfeiture proceeding that Judge Agid did not have probable cause to issue the search and seizure warrants was entitled to collateral estoppel effect in the current lawsuit, and that plaintiffs were, therefore, entitled to judgment as a matter of law that the City was liable under 42
U.S.C. § 1983. Then-Superior Court Judge Ellington ruled that res judicata did not bar the plaintiffs' civil rights claims, that Judge Bates' ruling in the forfeiture proceedings that Judge Agid did not have probable cause to issue the search and seizure warrants was entitled to collateral estoppel effect in the civil rights law suit, but that genuine issues of material fact nevertheless precluded summary judgment that the City was liable as a matter of law.
The City had presented a proposed order granting its motion for summary judgment. Judge Ellington utilized that order, crossing out the language which would have granted summary judgment to the City, and penning in her own rulings, instead.
The plaintiffs do not appeal Judge Ellington's ruling denying their motion for summary judgment on the issue of liability. The City cross-appeals the substantive ruling that plaintiffs' civil rights claims are not barred under res judicata, but does not appeal the substantive ruling that Judge Bates' order in the forfeiture proceedings is entitled to collateral estoppel effect in the current law suit. Inexplicably, the City contends that Judge Ellington made findings of fact in her ruling denying the plaintiffs' motion for summary judgment as to liability, apparently because Judge Ellington wrote that she "found" Judge Bates' ruling that the City lacked probable cause for the seizure of Hansen's property to be entitled to collateral estoppel effect. Clerk's papers at 416-17.*fn1
About a year later, in June 1994, the City moved for summary judgment dismissing plaintiffs' civil rights
claims, arguing that Judge Agid's seizure warrants broke the chain of causation. After plaintiffs responded to this motion, the City filed a reply which included a new declaration from Chief Frederiksen, stating that he would not have authorized Detective Miller to apply for the seizure warrants if he had believed certain factual allegations to be true, but denying that the factual allegations were in fact true. The declaration implied that the Chief in fact authorized Detective Miller to apply for the warrants, a proposition which the City long had steadfastly denied.
At the hearing before Judge McCutcheon, plaintiffs argued that a continuance should be granted, so that plaintiffs could respond to the Chiefs new declaration. Judge McCutcheon orally ruled that plaintiffs could respond in a motion for reconsideration, instead.
Judge McCutcheon, reasoning that Judge Agid's independent determination of probable cause, which determination Judges Steere and Bates initially agreed with and only later determined to be faulty, broke the chain of causation, entitling ...