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Hallmark Care Services, Inc. v. Superior Court of State of Washington For Spokane County

United States District Court, E.D. Washington

July 27, 2017

HALLMARK CARE SERVICES, INC., et al., Plaintiffs,



         BEFORE THE COURT is the Defendants' Motion to Dismiss (ECF No. 11) and Defendants' Motion for CR 11 Sanctions (ECF No. 18). After the Motion to Dismiss was filed, the court directed the parties to address the Rooker-Feldman doctrine in the Response and Reply briefs because it was not addressed in the Motion. See (ECF No. 16). The parties submitted response and reply briefs on both Motions. This Order memorializes the court's ruling on the Motions.

         I. Introduction/Background

         All well-pleaded facts are accepted as true for the purposes of the Motion to Dismiss.

         On March 13, 2015, the Washington State Supreme Court issued an order suspending Lori Petersen from the practice of guardianship for one year. See (ECF No. 1- 1 at 2-3).[1] The Supreme Court also ordered Petersen to pay costs to the Certified Professional Guardian Board. (ECF No. 1-1 at 3). The suspension was set to begin on March 20, 2015. (ECF No. 1-1 at 2-3).

         On March 17, 2015, Spokane County Superior Court Commissioner Rachelle Anderson sent a letter to Petersen acknowledging receipt of the Supreme Court order and directing Petersen to submit a “specific plan as to each individual you represent” no later than 4:00 p.m. on March 19, 2015. (ECF No. 1-1 at 5). The letter attached a list of guardianship cases, some of which were assigned to Petersen, and others to Hallmark Care Services, Inc. (“Hallmark”), doing business as Castlemark Guardianship and Trust (“Castlemark”), and Hallmark Care Services, Inc., doing business as Eagle Guardianship and Professional Services (“Eagle”). (ECF No. 1 at ¶14).

         On March 18, 2015, attorney John Pierce, representing Petersen, sent a letter to Commissioner Anderson stating counsel was filing a motion with the Washington Supreme Court seeking to stay the suspension for 60 to 90 days. (ECF No. 1-1 at 7). Counsel's letter disclosed Petersen would be petitioning the court to transfer her cases to another guardian, but asserted the process would take “approximately 4-6 weeks.” (ECF No. 1-1 at 7-8). Additionally, counsel disputed whether cases assigned to Castlemark or Eagle were subject to the suspension order. (ECF No. 1-1 at 7).

         On March 26, 2015, the Washington Supreme Court granted a stay of the suspension to allow Petersen to work with the Certified Professional Guardian Board to ensure her clients were properly transferred to another guardian. (ECF No. 1 at ¶18).

         On April 1, 2015, Lewis County Superior Court Judge James Lawler, a member of the Certified Professional Guardian Board, sent Petersen a letter stating the Board would review the status of all guardianships associated with Petersen. (ECF No. 1-1 at 10). The letter directed Petersen to provide information by April 10, 2015, including: all guardianship appointments in the name of Lori Petersen, Empire Care, Castlemark, Hallmark, or Eagle; a plan for compliance with transferring her cases to another guardian; and information about every person associated with any guardianship business where Petersen was a designated guardian or an individual certified professional guardian. (ECF No. 1-1 at 10-11).

         On April 1, 2015, Hallmark held a shareholders meeting and elected a new director, officer, and proxy to ensure Petersen was not involved in the business during her one year suspension. (ECF No. 1 at ¶¶22-23). Hallmark also added another professional guardian. (ECF No. 1 at ¶24).

         On April 7, 2015, Hallmark received four documents from the Spokane County Superior Court Guardianship Monitoring Program Coordinator. (ECF No. 1 at ¶27). The first document was a letter from Spokane County Superior Court Judge Kathleen O'Connor addressed to Hallmark stating “Hallmark/Castlemark/Eagle's ownership is in question” because the ownership was “confidential.” (ECF No. 1-1 at 19). Because ownership had not been disclosed to the court “[d]espite inquiries on multiple occasions, ” the letter stated Petersen's association with those agencies was brought “into question.” (ECF No. 1-1 at 19). The letter stated “[t]he Court will not appoint as a successor guardian any certified professional guardian associated with Hallmark or with entities falling under the Hallmark umbrella.” (ECF No. 1-1 at 19). Additionally, the letter stated a special master would be appointed “to oversee the transition process and individual guardians ad litem will determine successor guardians.” (ECF No. 1-1 at 19). Lastly, the letter required Hallmark to post a $100, 000 surety bond to secure payment of fees. (ECF No. 1-1 at 19).

         The second document was a letter from Judge O'Connor to local certified professional guardians. (ECF No. 1-1 at 21). The letter disclosed that guardians ad litem would be contacting the recipients “to take on several cases due to the recent suspension of CPG Lori Petersen.” (ECF No. 1-1 at 21).

         The third document was a letter from Judge O'Connor to local guardians ad litem informing them the court would be assigning 125 cases “currently assigned to Ms. Petersen and/or agencies with which she is involved.” (ECF No. 1-1 at 21).

         The final document was an Order Appointing Special Master, signed by Spokane County Superior Court Judge Ellen Kalama Clark for the 125 cases discussed in the prior letters. (ECF No. 1-1 at 26-32). The Order appointed retired Superior Court Judge Paul Bastine as special master. (ECF No. 1-1 at 31).

         On April 7, 2015, attorney Pierce, representing Hallmark, sent a letter to Judge Lawler in response to the April 1 letter. (ECF No. 1-1 at 15-17). The letter states Petersen was in the process of “transferring certain cases” to Hallmark. (ECF No. 1-1 at 15). The letter stated Hallmark had moved to be appointed as successor guardian in Petersen's cases. (ECF No. 1-1 at 15). The letter also referred to letters and orders from Judge O'Connor and Judge Kalama Clark. (ECF No. 1-1 at 15-16).

         On April 17, 2015, Petersen and Hallmark contested the actions of the Spokane County Superior Court by filing a motion for reconsideration. (ECF No. 1 at ¶34). The motion for reconsideration argued the Superior Court: (1) lacked jurisdiction to expand on the Supreme Court Order suspending Petersen; (2) lacked authority to order the $100, 000 bond and appointment of special master; and (3) failed to give Hallmark due process because it allegedly did not receive notice or a right to appear and defend against the Order Appointing Special Master. (ECF No. 1 at ¶34). The motion also sought clarification of a number of issues regarding who was presiding over the reassignment of guardianships and whether there was a hearing that led to the Order Appointing Special Master. (ECF No. 1 at ¶35).

         On May 4, 2015, Spokane County Superior Court Commissioners held a hearing wherein Petersen and Hallmark were removed as guardians of record. (ECF No. 1 at ¶36). Counsel for Hallmark and Petersen was present at the hearing and objected to the removal of his clients in each of the cases. (ECF No. 1 at ¶¶38-39).

         On May 8, 2015, a deputy prosecutor from the Spokane County Prosecutor's Office entered a limited notice of appearance on behalf of the Spokane County Superior Court. (ECF No. 1 at ¶42). The deputy prosecutor then filed a memorandum in support of the court's Order and ...

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