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Stover v. Seattle Enterprise Inc.

May 27, 1997

MARTY J. STOVER, APPELLANT,
v.
SEATTLE ENTERPRISE, INC., A WASHINGTON CORPORATION; AND ARCTIC ALASKA FISHERIES CORPORATION, A WASHINGTON CORPORATION, RESPONDENTS.



Appeal from Superior Court of King County. Docket No: 93-2-17695-3. Date filed: 11/03/95. Judge signing: Hon. James W. Bates Jr.

Authored by Ann L. Ellington. Concurring: Faye C. Kennedy, C. Kenneth Grosse.

The opinion of the court was delivered by: Ellington

ELLINGTON, J. -- The dispositive issue here is whether the proceeding which resulted in dismissal of Marty Stover's complaint was a hearing on the Respondents' CR 60(b) motion to set aside their settlement with Stover for fraud, or a trial on the Respondents' counterclaim in which they alleged that Stover's personal injury action was fraudulent. Stover claims it was a trial, and that he was denied his right to a jury determination. Based upon the sparse record before us, we find that the proceeding was a hearing on the Respondents' fraud allegations in the context of their CR 60(b) motion to set aside their settlement with Stover, a proceeding to which no right to a jury trial attaches. Consequently, we affirm the trial court.

FACTS

In July, 1993, Stover filed a complaint for personal injuries against Seattle Enterprise, Inc. and Arctic Alaska Fisheries Corporation, alleging that while employed by another entity and while doing work on a vessel owned and operated by the Respondents, he fell and sustained serious injuries. *fn1 Before the case went to trial, the parties settled for $200,000 and Stover executed a release.

Prior to the entry of an order of dismissal, the Respondents learned from individuals previously unknown to them that Stover's personal injury claims were fraudulent. These individuals reported that Stover told them his injury had actually occurred during his previous employment and that he agreed to pay his foreman a portion of the money he recovered from the Respondents in exchange for the foreman's corroboration of his injury claim.

Based on this information, the Respondents obtained prejudgment writs of garnishment of the settlement paid to Stover, and filed a motion seeking leave to assert a counterclaim pursuant to CR 13(e), relief from the settlement pursuant to CR 60(b)(4), and restitution of the funds Stover received pursuant to the settlement. After a show cause hearing, the court granted leave to amend the answer to add after-arising counterclaims, granted the motion to transfer the garnished settlement funds from Stover's bank account to the registry of the court, and reopened the case.

The Respondents' counterclaim, filed with their amended answer, alleged causes of action for fraud, misrepresentation, breach of contract, rescission of contract, quantum meruit, malicious prosecution, wrongful institution of legal proceedings and abuse of process, and criminal profiteering. Stover answered the counterclaim and, 10 days later, filed a motion for a jury trial on the counterclaim and on his claims for personal injuries.

The trial court struck Stover's jury demand. The order striking the jury demand refers to the proceeding as a hearing on a CR 60(b) motion, while the order entered after the show cause hearing refers to it as a two-day trial on the counterclaim.

At the Conclusion of the proceeding, the trial court found that the Respondents proved by clear, cogent, and convincing evidence that: (1) the settlement agreement should be set aside and the funds repaid to the Respondents; (2) Stover fraudulently represented to the Respondents the occurrence of the injury; (3) no injury occurred on the date alleged by Stover; (4) Stover induced his foreman to corroborate his fraudulent claim in exchange for payment of a portion of the settlement funds recovered; and (5) Stover paid his foreman in exchange for his corroboration. The court reserved for a later time the matters of the dismissal of Stover's personal injury action and any award of costs and fees.

Subsequently, on separate motion of the Respondents, the trial court dismissed Stover's complaint, entered judgment in Respondents' favor for $28,940.02, awarded them costs and fees, and ordered restitution of the settlement proceeds. Findings of fact and Conclusions of law were entered on the same date. Stover appeals.

Discussion

Neither the trial court nor the parties have been consistent in their references to the proceeding. At times, it was referred to as a hearing on the Respondents' CR 60(b) motion, and at other times it was referred to as a trial on their counterclaims. Adding to the ambiguity is Stover's failure to provide us with a complete transcript of the proceeding, and both parties' failure to distinguish the issue of fraud as a defense to a negligence action from the issue of fraud as a ground upon which to set aside a settlement.

In its oral decision, the court stated that the matter came before it on the Respondents' "Civil Rule 60(b) motion for relief from settlement and for leave to file after-arising counterclaims." The court found clear, cogent, and convincing evidence that Stover fraudulently represented to the Respondents that he sustained an injury aboard their vessel, and that the settlement agreement should be set aside and the funds paid in settlement returned to the Respondents. No other relief was awarded at this proceeding. The court's decision returned the parties to their respective positions prior to settlement. We find that the proceeding was an evidentiary hearing on the Respondents' claim for rescission of the ...


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