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Elliott Bay Adjustment Co., Inc. v. Dacumos

Court of Appeals of Washington, Division 1

August 21, 2017

CAREN DACUMOS, Petitioner.

          Becker, J.

         The dismissal with prejudice of this low-dollar collection action was a final judgment. The defendant was the prevailing party and was entitled to an award of reasonable attorney fees under RCW 4.84.250. The lower courts erred in concluding otherwise.


         Elliott Bay Adjustment Co. Inc., a debt collection agency, sued Caren Dacumos in King County District Court in October 2014. Elliott Bay alleged that Dacumos owed $482.84 to Seattle Obstetrics and Gynecology Group, one of Elliott Bay's clients.

         According to Dacumos, she immediately called Elliott Bay when she was served with the summons and complaint and told them she had already paid the bill in full. Elliott Bay told her she needed to make payments in order to avoid having a judgment entered against her, having her wages garnished, and owing interest and attorney fees. Dacumos paid $50 per month for five months before retaining counsel. In June 2015, Dacumos, through counsel, filed an answer in which she requested dismissal of the action and asserted her entitlement to an award of attorney fees under RCW 4.84.250.

         Elliott Bay moved for summary judgment in August 2015 while simultaneously providing discovery requested by Dacumos. Dacumos asked Elliott Bay to continue the hearing on summary judgment or strike the motion to allow time to consult about issues raised by Elliott Bay's discovery response. In a letter to counsel for Dacumos, Elliott Bay insisted there were no discovery issues and the hearing should proceed as scheduled. Elliott Bay threatened to request "significant" attorney fees given the "extensive time" counsel had devoted to the matter.

         Elliott Bay's motion for summary judgment was documented by a patient account statement on which "all charges and credits" were purportedly listed. Dacumos submitted a response brief supported by a bank statement showing she had made a payment of $541.10 that was not credited on the patient account statement.

         Elliott Bay learned from its client that the payment of $541.10 had mistakenly been credited to another patient. Elliott Bay struck its motion for summary judgment and moved for a voluntary dismissal under CRLJ 41(a)(1)(H). Elliott Bay proposed an order dismissing the action without prejudice and without costs.

         Dacumos asked the court to enter a dismissal with prejudice. At the same time, she requested an award of attorney fees for having to defend against vexatious litigation.

         When a plaintiff moves for a voluntary dismissal, presumptively the dismissal will be without prejudice to the plaintiffs right to refile the action. The rule does not, however, guarantee that the dismissal will be without prejudice. CRLJ 41(a)(4) provides, "Unless otherwise stated in the order of dismissal, the dismissal is without prejudice." (Emphasis added.) By its terms, the rule allows the court, in its discretion, to rule that a voluntary dismissal will be with prejudice. Ordinarily, a court will enter a dismissal with prejudice only if a dismissal without prejudice would be pointless. See, e.g., Escude ex rel. Escude v. King County Pub. Hosp. Dist. No. 2,, 117 Wn.App. 183, 69 P.3d 895 (2003); In re Det, of G.V., 124 Wn.2d 288, 297-98, 877 P.2d 680 (1994).

         Elliott Bay filed a pleading admitting that the debt had been paid and Dacumos was entitled to a refund of the amount she had overpaid. The district court, recognizing that a dismissal without prejudice would be pointless, entered a dismissal with prejudice. But the order of dismissal denied Dacumos's request for attorney fees.

         The next day, Dacumos filed a motion for an award of attorney fees, citing RCW 4.84.250 as the basis for the award. Her motion acknowledged that she had previously requested attorney fees, unsuccessfully, under the court's inherent power to penalize vexatious litigation. "However, now that the case has been dismissed with prejudice, which operates as a judgment on the merits, Plaintiff moves this Court for attorney's fees under RCW 4.84.250." The court's denial of this second request for attorney fees is the subject of this appeal. Dacumos appealed to King County Superior Court. The superior court affirmed. This court's commissioner granted discretionary review on the ground that the case raised an issue of public interest that warranted review under RAP 2.3(d)(3).

         An appeal from a superior court order affirming a district court order is governed by RALJ 9.1. We review the record before the district court. Factual issues are reviewed for substantial evidence, and legal issues are reviewed de novo. State v. Moore, 178 Wn.App. 489, 497, 314 P.3d 1137 (2013).

         Elliott Bay attempts to have us analyze the lower court decisions as if they involved factual issues, but they do not. Whether a statute authorizes an award of attorney fees is a question of law reviewed de novo. Niccum v. Enguist, 175 Wn.2d 441, 446, 286 P.3d 966 ...

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