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Kruger-Willis v. Hoffenburg

Court of Appeals of Washington, Division 2

March 28, 2017

TORI KRUGER-WILLIS, Appellant,
v.
HEATHER HOFFENBURG and JOHN DOE HOFFENBURG, Respondents.

          Sutton, J.

         This is the third time this case is before us on appeal. This appeal addresses whether defense counsel for Heather Hofferbert[1] had authority to appear and act on her behalf regarding a vehicle damage claim filed against her by Tori Kruger-Willis. Kruger-Willis appeals the trial court's decision denying her RCW 2.44.030 motion and ruling that defense counsel had the authority to represent Hofferbert, entering judgment against Kruger-Willis, and denying her motion to reconsider. In the published portion of this opinion, we hold that the trial court did not err in holding that defense counsel had authority to represent Hofferbert, and we affirm the trial court's decision. In the unpublished portion, we hold that the trial court did not err in its entry of judgment and affirming its order. We also hold that Kruger-Willis was not denied the right to a fair hearing and that Hofferbert is entitled to attorney fees as the prevailing party in this appeal.

          FACTS

         This action arose out of a motor vehicle collision that occurred in 2008. Hofferbert drove a truck that struck and damaged Kruger-Willis's parked vehicle. GEICO, Hofferbert's insurance company, paid to repair Kruger-Willis's vehicle. Kruger-Willis then sued Hofferbert to recover the diminished value of her repaired vehicle. GEICO hired defense counsel and paid the costs of Hofferbert's defense pursuant to its contractual duty to defend her.[2]

         The insurance contract required that GEICO "will defend any suit for damages payable under the terms of this policy." Clerk's Papers (CP) at 694. The contract further specified that GEICO will pay "damages which an insured becomes legally obligated to pay because of . . . [d]amage to or destruction of property, " so long as the damage arose from the ownership, maintenance, or use of a covered vehicle. CP at 693-94. The contract defined an "insured" to include "[a]ny other person using the auto with your permission." CP at 695.

         Following a three-day trial, the jury rendered a verdict in Hofferbert's favor.[3] The trial court awarded Hofferbert $11, 490 in costs and attorney fees.[4] Kruger-Willis appealed the trial court's award of attorney fees and costs. In an unpublished opinion, we held that Hofferbert had standing to recover fees and costs as the aggrieved party in the underlying action and was the prevailing party entitled to fees and costs, regardless of the fact that GEICO was defending her. Kruger-Willis v. Hoffenburg, noted at 173 Wn.App. 1024, slip op. at *5 (2013) (Kruger-Willis I).

         Following our decision, Kruger-Willis's counsel executed a check for $11, 490 payable to Hofferbert despite defense counsel's request that the check be made payable to Hofferbert's insurer, GEICO. Defense counsel asked Kruger-Willis's counsel to reissue the check payable to GEICO, but Kruger-Willis's counsel refused because GEICO was not a party to the suit. Defense counsel filed a motion to enforce the trial court's award of costs and attorney fees. In support of his motion, defense counsel stated that Hofferbert had never been involved in the defense of the case against her and that he (defense counsel) worked for GEICO. The trial court granted this motion, but named Hofferbert and not GEICO as the judgment creditor.

         Kruger-Willis then filed a motion for defense counsel to produce or prove the authority under which he appeared and to stay all proceedings until such authority was produced or provided. See RCW 2.44.030. During argument on this motion, defense counsel admitted that he had "not had contact with the named defendant in this lawsuit." CP at 640. However, defense counsel asserted that he had authority to appear for Hofferbert under the terms of the insurance contract. The trial court denied Kruger-Willis's motion. Kruger-Willis appealed.

         In that appeal, we held that where civil defense counsel admitted that he never had any contact with his client, the trial court abused its discretion by denying opposing counsel's motion to require counsel to prove the authority under which he appears. Kruger-Willis v. Hoffenburg, noted at 187 Wn.App. 1010, slip op. at *4 (2015) (Kruger-Willis II). We reversed and remanded to the trial court to determine whether defense counsel had the authority to appear for Hofferbert in this case. Kruger-Willis II, slip op. at *5.

         On remand, Kruger-Willis renewed her motion under RCW 2.44.030. After a hearing, the trial court ruled that defense counsel had authority to represent Hofferbert under the omnibus clause in the insurance policy; an omnibus clause was required to be present in the policy under RCW 46.29.490(2)(b); defense counsel did not surrender any of Hofferbert's substantial rights; and Hofferbert ratified defense counsel's actions after the fact. Kruger-Willis moved to reconsider, and the trial court denied the motion. Kruger-Willis appeals the trial court's ruling.

         While the second appeal was pending, Hofferbert made a motion in the trial court for a judgment on sum certain based on the trial court's 2011 order. After a hearing, the trial court found that the 2011 order contained a scrivener's error by stating that payment shall be made to Hofferbert's attorney, Mary E. Owen & Associates, rather than to Hofferbert. The trial court also found that Kruger-Willis's tender of the check in 2013, payable to Heather Hofferbert and delivered to Mary E. Owen & Associates, did not constitute an accord and satisfaction. Finally, the trial court held that judgment would be entered in favor of Hofferbert against Kruger-Willis in the amount of $11, 490 with interest accruing from the date of the 2011 order. The next day, Kruger-Willis filed a bond supersedeas with the county clerk to cover the judgment and costs on appeal, including interest. Kruger-Willis amended her pending appeal and now also appeals the judgment.

         ANALYSIS

         I. Standards of Review

         Following a mandate for further proceedings, a trial court must comply with that mandate, and we review the trial court's compliance for an abuse of discretion. See Bank of Am., N.A. v. Owens, 177 Wn.App. 181, 189, 311 P.3d 594 (2013). A trial court abuses its discretion when its decision is manifestly unreasonable or based on untenable grounds or reasons. Yousoufian v. Office of Ron Sims, 168 Wn.2d 444, 458, 229 P.3d 735 (2010). A court's decision is manifestly unreasonable if it is outside the range of acceptable choices, given the facts and the applicable legal standard; it is based on untenable grounds if the factual findings are unsupported by the record; it is based on untenable reasons if it is based on an incorrect standard or the facts do not meet the requirements of the correct standard. Mayer v. Sto Indus., Inc., 156 Wn.2d 677, 684, 132 P.3d 115 (2006).

         We uphold a trial court's findings of fact if those findings are supported by substantial evidence. Hegwine v. Longview Fibre Co., 132 Wn.App. 546, 555, 132 P.3d 789 (2006). Substantial evidence is that which is sufficient to persuade a fair-minded individual of the truth of the matter asserted. Hegwine, 132 Wn.App. at 555-56.

         II. Authority To Appear

         Kruger-Willis argues that the trial court erred in finding that GEICO's retained defense counsel had the authority to represent Hofferbert. Kruger-Willis claims that defense counsel lacked the authority to represent Hofferbert because counsel had no contact with her throughout the course of the litigation, and therefore, Hofferbert could not have provided such authority.[5] We hold that when an insurer has a contractual obligation to defend its insured, that insurer has ...


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