Ludwig v. City of Mountlake Terrace

1

STEPHEN LUDWIG, a single man; ROSS KLINGELE and ARRIETTE BURN, a marital community, Appellants, v. CITY OF MOUNTLAKE TERRACE, a municipal corporation, Respondent.

No. 85537-9-I

Court of Appeals of Washington, Division 1

April 15, 2024

UNPUBLISHED OPINION

Chung J.

Stephen Ludwig, Ross Klingele, and Arriette Burn (collectively, the Homeowners) appeal the dismissal of their complaint against the City of Mountlake Terrace (City). They also challenge the trial court's award of attorney fees and CR 11 sanctions. We conclude that the trial court properly dismissed the Homeowners' complaint on claim preclusion grounds and did not abuse its discretion by awarding attorney fees and imposing sanctions. Thus, we affirm.

FACTS

In February 2014, the Homeowners purchased a property on 226th Place Southwest in Mountlake Terrace (the Property). The Property is adjacent to Hall Creek, which the City uses as a stormwater conveyance.

In 2017, the Homeowners sued the City. According to the Homeowners,^[1] their complaint "alleged negligence on the part of the City for damage to the bank armor that defended the west foundation wall of their house" from Hall Creek (2017 Lawsuit). The matter was tried to the bench in September 2022. The court found that "[a] bulkhead and rockery exist on the Property to protect the home from migration of [Hall Creek] and from flooding." It also found,

In 1969, the City contracted with [the Reid-Middleton firm (RMA)] to construct a concrete box culvert replacing an existing corrugated metal pipe culvert carrying Hall Creek beneath 226th Pl[ace]. The plan for this culvert called for existing rockery and the bulkhead to remain in place, the existing creek channel to be lowered by about one foot, and 150-pound rocks to be installed in a contiguous row along the creek banks. . . . The purpose of these 150-pound rocks was to confine the water at lower levels within the channel and to protect the existing bank.

The court found that the City did not install the row of 150-pound rocks as specified by RMA.

The court also found that in April 2014, while conducting repairs on the Property, one of the Homeowners "discovered the bulkhead had been undermined and soil behind the bulkhead had been removed, creating a cavity approximately sixteen feet long, three to four feet wide, and one to two feet deep behind the bulkhead," and "[i]t was later learned that this cavity had been created by scouring of water from Hall Creek, which over time, allowed water to enter the Property side of the bulkhead and create the cavity."^[2] Further, the court found that the Homeowners then hired a professional engineer to design a repair; "[h]owever, [the Homeowners] could not afford [the] repair as designed, and decided to file suit against the City."

The court concluded that "the City assumed a duty when it undertook the [1970] project to install the box culvert pursuant to the [RMA] plans" and that the City breached that duty. But it found that the Homeowners did not "prove th[e] failure to properly install the 150-pound rocks proximately caused the damage to the Property." In particular, the court found that "the design of the bulkhead (no footing, no reinforcement), along with the angle of the stormwater striking it, could [have] themselves caused the damage." And because the Homeowners failed to prove proximate cause, their negligence claim failed. The court entered its findings and conclusions in the 2017 Lawsuit on February 3, 2023.

On April 26, 2023, the Homeowners filed the instant lawsuit seeking injunctive relief. They alleged substantially the same background facts described above, i.e., that (1) they purchased the Property in February 2014, (2) the Property includes a portion of Hall Creek, which the City uses as a stormwater conveyance, (3) the City undertook a culvert replacement project in 1970, (4) the Homeowners discovered a sinkhole behind the bulkhead in 2014, which was caused by scouring from Hall Creek, and (5) they sued the City in 2017 after the remedy designed by their engineer was beyond what they could afford. They also alleged,

The City . . . excavated a deeper channel . . . to accommodate the deeper culvert . . . . Plans for this work provided by [RMA], specified that the banks of the deeper channel should be protected by rows of 150-pound rocks. As any reasonable person could surmise, a deeper channel would require deeper bank-protection. Yet the City, in breach of its duty to properly construct the channel changes neglected to install this protection. After failing to place the specified protection, the City then failed to provide any protection at all for the deeper channel. Nor did the City perform any inspection, monitoring or maintenance to identify and prevent damaging scour along the vulnerable deeper banks at [the] [P]roperty.

The Homeowners alleged that "[l]acking any protection, the deeper channel bank [on the Property side of the creek] has been entirely scoured away" and that the scour "eventually undercut[ the] existing concrete bulkhead that had previously protected the west foundation wall of [the Property]," causing damages to the Homeowners. The Homeowners requested an injunction directing the City to "cease and desist directing concentrated and damaging stormwater against Hall Creek's vulnerable east channel bank near [the Property], without also providing proper protection for said bank" and to "immediately maintain, repair, or replace Hall Creek's already damaged bank armor along [the Property] to current standards in accordance with its established duty."

In May 2023, the City moved under CR 12(b)(6) to dismiss the Homeowners' complaint, arguing that it was time-barred, the 2017 Lawsuit precluded the Homeowners' claims herein, and those claims were also foreclosed by laches. The trial court granted the City's motion to dismiss as well as its subsequent motion for an award of attorney fees and an additional $1,000 in CR 11 sanctions, for which the Homeowners and their attorney were jointly and severally liable.

The Homeowners appeal.

ANALYSIS

I. Motion to Dismiss

The Homeowners argue that the trial court erred by dismissing their complaint. Because claim preclusion barred the complaint, we disagree.^[3]

Claim preclusion, historically referred to as res judicata, is an equitable doctrine that precludes relitigation of already determined causes. Weaver v. City of Everett, 194 Wn.2d 464, 472-73, 450 P.3d 177 (2019). It prevents relitigation of an entire claim when a prior proceeding involving the same parties and issues culminated in a judgment on the merits. Id. at 480. In addition to the threshold requirement of a final judgment on the merits in the prior suit, the party asserting claim preclusion has the burden to establish that the prior action and the challenged action have "concurrence of identity" in four areas: (1) subject matter, (2) cause of action, (3) persons and parties, and (4) quality of persons for or against whom the claim is made. Id. All four elements must be satisfied to establish claim preclusion. Hisle v. Todd Pac. Shipyards Corp., 151 Wn.2d 853, 866, 93 P.3d 108 (2004). "Because it is a question of law, we review a determination that claim preclusion applies de novo." Hassan v. GCA Prod. Servs., Inc., 17 Wn.App. 2d 625, 633, 487 P.3d 203 (2021).

Here, it is undisputed that the 2017 Lawsuit ended in a final judgment on the merits. It is also undisputed that the 2017 Lawsuit and the instant proceeding involve the same parties and quality of persons. Additionally, although "Washington law does not specify how precise[ly] the subject matter in the first and second suit must coincide," Eugster v. Wash. State Bar Ass'n, 198 Wn.App. 758, 787, 397 P.3d 131 (2017), the two proceedings plainly involve the same subject matter, i.e., the City's alleged responsibility to repair the damage that Hall Creek has caused to the Property. Cf. id. (disciplinary proceeding against attorney involved the same subject matter as attorney's later lawsuit claiming the disciplinary process violates due process in that both proceedings "include[ ] the [bar association's] disciplinary process").

The remaining question, then, is whether the 2017 Lawsuit and the instant proceeding have concurrence of identity in cause of action. "[I]dentity of causes of action 'cannot be determined precisely by mechanistic application of a simple test.'" Rains v. State, 100 Wn.2d 660, 663-64, 674 P.2d 165 (1983) (quoting Abrahmson v. Univ. of Hawaii, 594 F.2d 202, 206 (9th Cir. 1979))). To aid in the analysis, courts have considered the following four factors:

"(1) [W]hether rights or interests established in the prior judgment would be destroyed or impaired by prosecution of the second action; (2) whether substantially the same evidence is presented in the two actions; (3) whether the two suits involve infringement of the same right; and (4) whether the two suits arise out of the same transactional nucleus of facts."

Rains, 100 Wn.2d at 664 (alteration in original) (quoting Costantini v. Trans World Airlines, 681 F.2d 1199, 1201-02 (9th Cir. 1982)). "These four factors are analytical tools; it is not necessary that all four factors be present to bar the claim." Ensley v. Pitcher, 152 Wn.App. 891, 903, 222 P.3d 99 (2009). Ultimately, the question is whether the later claim is one that "might or should have been litigated [or that] was litigated" in the earlier proceeding. Hadley v. Cowan, 60 Wn.App. 433, 441, 804 P.2d 1271 (1991); see also Norris v. Norris, 95 Wn.2d 124, 130, 622 P.2d 816 (1980) (claim preclusion "acts to prevent relitigation of claims that were or should have been decided among the parties in an earlier proceeding" (emphasis added)).

The Homeowners assert...