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Schibel v. Eymann

Supreme Court of Washington, En Banc

August 3, 2017

JAMES SCHIBEL, an individual, and PATTI SCHIBEL, an individual; and the marital community thereof, Respondents,
v.
RICHARD EYMANN, an individual; EYMANN ALLISON HUNTER JONES, PS, a Washington professional services corporation; MICHAEL WITHEY, an individual; LAW OFFICES OF MICHAEL WITHEY, PLLC, a Washington professional limited liability company, Petitioners.

          MADSEN, J.

         In this case, former clients are suing their attorneys for legal malpractice based, in part, on the attorneys' withdrawal from a prior case. But the attorneys obtained that withdrawal by court order. In the original case, the former clients appealed the court's order approving withdrawal, and that appeal was rejected. The attorneys thus argue that collateral estoppel applies to bar a malpractice action based on their withdrawal. We agree. We hold that the fact of withdrawal by court order in an earlier proceeding is dispositive in a later malpractice suit against the attorney. Although other malpractice complaints unrelated to the withdrawal would not be precluded, a client cannot relitigate whether the attorney's withdrawal was proper. If we are to have rules permitting attorney withdrawal, we must allow attorneys to have confidence in those rules. We, therefore, reverse the Court of Appeals.

         FACTS

         In this malpractice action, James and Patti Schibel allege that attorneys Richard Eymann and Michael Withey (Attorneys) committed legal malpractice and breached their fiduciary duties. Specifically, the Schibels claim that the Attorneys committed malpractice because they failed to timely and adequately prepare for trial, failed to properly handle settlement discussions and negotiations, and improperly withdrew from the case on the eve of trial.

         The original case began in 2007 when the Schibels sued their former landlord, Leroy Johnson, for breach of a commercial lease and negligent infliction of injury due to mold exposure. When the Schibels originally filed their action, a different attorney represented them. But that attorney withdrew in 2009 due to a fee dispute with the Schibels. When the original attorney withdrew, the Attorneys took over the case and entered into a contingent fee agreement with the Schibels.

         Trial for the original case was continued several times. When the Attorneys took over the case, trial was continued to April 2010. The trial court continued the case twice more before setting a trial date of November 1, 2010. At the last continuance, the judge stated that there would be no more continuances.

         On October 10, 2010, the Attorneys informed the Schibels via letter that they would need to withdraw in light of the breakdown of the relationship between them and the Schibels. The next day, the Attorneys filed a motion to withdraw and a motion to continue the trial date. The Schibels objected to the motion to withdraw. The hearing on the motions was held on October 27, 2010 before Judge Annette Plese. Present at the hearing were the Schibels, the Attorneys, and counsel for Johnson. The Schibels explained that they had been unable to find replacement counsel because of the fees they still owed to the Attorneys. When Judge Plese asked the Schibels whether they would be able to find replacement counsel if she granted a continuance, they expressed that it seemed "fairly bleak" that they could in the immediate future. Clerk's Papers (CP) at 138.

         Judge Plese granted the Attorneys' motion to withdraw, explaining:

[A]t this point, it appears that there is a breakdown with you and counsel, and the Court has no choice at this time other than to allow them to withdraw on your behalf. They've given the proper notice. They're here.
... I am going to allow [the Attorneys] to withdraw. They've given the proper notice, and at this point, the Court can't, on a civil case, order them to stay on board and work the case, especially with their ethical obligations.

Id. at 139-40. Judge Plese then denied the motion for a continuance, explaining that after Johnson strenuously objected to the last continuance, she had said that there would be no further continuances. Id. at 140. The Schibels and Johnson then attempted settlement negotiations, but those negotiations failed. In November 2010, the Schibels' case against Johnson was dismissed with prejudice.

         The Schibels retained counsel and appealed the withdrawal and continuance rulings. The Court of Appeals affirmed. Schibel v. Johnson, noted at 168 Wn.App. 1046, 2012 WL 2326992, at * 1. The Court of Appeals concluded that the trial court had properly exercised its discretion when it granted the Attorneys' motion to withdraw. 2012 WL 2326992, at *4. The Schibels petitioned this court for review, which we denied. Schibel v. Johnson, 175 Wn.2d 1024, 291 P.3d253 (2012). And the Schibels sought review in the United States Supreme Court, which was also denied. Schibel v. Johnson, 133 S.Ct. 2344, 185 L.Ed.2d 165 (2013).

         The Schibels then filed this malpractice action against the Attorneys. The complaint alleged that the Attorneys were negligent based on their failure to timely and adequately prepare for trial, their failure to properly handle settlement discussion and negotiations, and various actions surrounding the Attorneys' conduct in withdrawing from the case. The alleged actions surrounding withdrawal included failing to timely inform the Schibels of withdrawal, moving to withdraw too late in the case, failing to condition their withdrawal on a continuance, and failing to disclose earlier the "interests and intentions" that led the Attorneys to withdraw. CPat4-5.

         The Attorneys moved for summary judgment, arguing that complying with applicable rules and obtaining the court's permission for withdrawal precludes future actions for legal malpractice based on that withdrawal. The trial court denied the motion for summary judgment. On interlocutory appeal, the Court of Appeals affirmed. Schibel v. Eymann, 193 Wn.App. 534, 372 P.3d 172 (2016). We accepted review and now reverse.

         ANALYSIS

         Summary judgment is appropriate where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Christensen v. Grant County Hosp. Dist. No. 1, 152 Wn.2d 299, 305, 96 P.3d 957 (2004); Court Rule (CR) 56(c)). We review a trial court's ruling on summary judgment de novo. Christensen, 152 Wn.2d at 305. We also review de novo whether collateral estoppel applies to bar relitigation of an issue. Id.

         CR 71 governs the withdrawal of attorneys involved in civil litigation. CR 71(c) provides that an attorney may withdraw by notice in the following manner:

(1) Notice of Intent to Withdraw. The attorney shall file and serve a Notice of Intent to Withdraw on all other parties in the proceeding. . . .
(2) Service on Client. Prior to service on other parties, the Notice of Intent to Withdraw shall be served on the persons represented by the withdrawing attorney. . . .
(3) Withdrawal Without Objection. The withdrawal shall be effective, without order of court. . . unless a written objection to the withdrawal is served by a party on the withdrawing attorney. . ..
(4) Effect of Objection. If a timely written objection is served, withdrawal may be obtained only by order of the court.

         In this case, the Schibels objected to the Attorneys' withdrawal, so the Attorneys could withdraw only by order of the court. CR 71(c)(4).

         The Rules of Professional Conduct (RPC) also address when an attorney may withdraw. RPC 1.16(b) permits an attorney to withdraw from representation if:

(1) withdrawal can be accomplished without material adverse effect on the interests of the client;
(2) the client persists in a course of action involving the lawyer's services that the lawyer reasonably believes is criminal or fraudulent;
(3) the client has used the lawyer's services to perpetrate a crime or fraud;
(4) the client insists upon taking action that the lawyer considers repugnant or with which the lawyer has a fundamental disagreement;
(5) the client fails substantially to fulfill an obligation to the lawyer regarding the lawyer's services and has been given reasonable warning that the lawyer will withdraw unless the obligation is fulfilled;
(6) the representation will result in an unreasonable financial burden on the lawyer or has been rendered unreasonably difficult by the client; or
(7) other good cause for withdrawal exists.

         The rule is written in the disjunctive, meaning an attorney may withdraw if there is no harm to the client, the client has engaged in any of the five specific behaviors, or other good cause exists.

         Collateral estoppel, also known as issue preclusion, bars relitigation of an issue in a later proceeding involving the same parties. Christensen, 152 Wn.2d at 306. Collateral estoppel promotes judicial economy and prevents inconvenience or harassment of parties. Id. (citing Reninger v. Dep't of Corr.,134 Wn.2d 437, 449, 951 P.2d 782 (1998)). Importantly, collateral estoppel provides finality in adjudications, shielding parties and courts from expending resources in repetitive litigation. Id. at 307. Collateral estoppel precludes only those issues that were actually litigated and necessary to the final determination in the earlier proceeding. Id. (citing Shoemaker v. City of Bremerton,109 Wn.2d 504, 507, 745 P.2d 858 (1987)). For collateral estoppel to apply, the party seeking it must show (1) the issue in the earlier proceeding is identical to the issue in the later proceeding, (2) the earlier ...


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