Woodley v. USAA Cas. Ins. Co.

GORDON WOODLEY, Appellant, v. USAA CASUALTY INSURANCE COMPANY, ResDondent.

NO. 68342-0-I

COURT OF APPEALS OF THE STATE OF WASHINGTON DIVISION ONE

FILED: July 8, 2013

UNPUBLISHED OPINION

LAU, J. —Attorney Gordon Woodley represented Tara Hanoch on a contingent fee basis in a personal injury action stemming from a three-car accident on I-5 in Seattle. Woodley received one-third of Hanoch's $110,000 settlement award as payment for his fees. Nearly six years later, Woodley sued Hanoch's insurer, USAA Casualty Insurance Company, alleging fees it owed to him for defense services he provided to Hanoch. The trial court dismissed Woodsley's suit as time barred by the three-year statute of limitations governing his claims. Because Woodley failed to preserve his account receivable claim and to establish a third party contract, the trial court properly dismissed his claims on summary judgment as time barred.

FACTS

The material facts are undisputed. On September 11, 2002, Tara Hanoch was driving southbound on I-5 when her car collided with a semitruck owned by WesternPorts Transportation Inc. The collision forced Hanoch's car into another lane where it was struck by a car driven by Herman and Laurie Carver. Hanoch and the Carvers were injured in the accident. The parties disputed liability.

USAA insured Hanoch. The day after the accident, USAA received the loss report and assigned claims representative Arlys Reynolds to the case. Reynolds met with Hanoch on September 13 to investigate the accident. Around September 25, Hanoch hired attorney Gordon Woodley on a contingent fee basis to represent her on liability and to recover damages for injuries she sustained in the accident.¹

Reynolds' detailed case notes describe USAA's case investigation and interactions with Woodley. Reynolds' first contact with Woodley occurred on September 25, 2002, when Woodley told her he wanted USAA to hire an accident reconstruction expert. In October 2002, Reynolds told Woodley that USAA planned to obtain witness statements before it retained an accident reconstruction expert. She also told Woodley that USAA would hold Hanoch's car in case he wanted to have an accident reconstruction expert examine it. Reynolds continued her investigation. She interviewed Western Ports' truck driver and obtained several witness statements. On October 10, Reynolds informed Woodley that the truck driver blamed Hanoch for the accident. Woodley told Reynolds that Hanoch denied fault.

On October 18, Reynolds spoke with USAA's accident reconstruction expert John O'Callaghan. She briefed Woodley and gave him copies of all recorded witness statements. On October 22, Reynolds told the truck driver that USAA declined to accept liability for the accident. The truck driver referred the matter to his attorney. The Carvers also retained an attorney. Reynolds' case notes indicate that she discussed the case with USAA's legal department and concluded a "good possibility suit will be filed if semi co. does not step forward."

In November 2002, Reynolds obtained and reviewed the Washington State Patrol accident report. She concluded Hanoch was fault free. Reynolds also met with O'Callaghan and concluded that he "does not think anything to be gained by inspecting the [vehicles] personally . . . ." The next day, Woodley informed Reynolds that he had hired accident reconstruction expert John Hunter to examine Hanoch's car and to hold it until then. From December 2002 to March 2003, Reynolds' contacts with Woodley dealt with storage of Hanoch's car. Woodley approved the car's release after Hunter examined it. Woodley approved its release on March 27, 2003. According to Hunter, Western Ports' truck driver caused the accident.

Meanwhile, on January 13, 2003, Western Ports' insurer informed USAA that it denied fault and blamed Hanoch as the cause of the accident. In April 2003, Woodley informed Reynolds that the Carvers' attorney planned to file suit against Hanoch and Western Ports. Woodley suggested to Reynolds that he wanted to defend Hanoch for USAA. Reynolds said she would pass this on to their litigation department but USAA worked with certain law firms. USAA never hired Woodley. Reynolds understood that Woodley "was representing [Hanoch] on the liability and the damage issues againstWestern Ports Transportation, Inc." Woodley informed Reynolds that he would accept service on Hanoch's behalf.

Reynolds' July 16 case notes indicate that "[Hanoch] has not been served to date. [Litigation] unit declined file until suit actually filed. [Woodley] assures me he will call immediately upon service." The Carvers filed a negligence lawsuit against Hanoch and Western Ports on September 15, 2003. Woodley accepted service of process on Hanoch's behalf, sent USAA copies of the summons and complaint, and filed a notice of appearance in the case.

On September 23, USAA assigned one of its contract attorneys, Alan Peizer, to defend Hanoch under her USAA insurance policy. Peizer and Woodley signed a "Notice of Association of Counsel" on September 25. The notice stated, "[T]he undersigned attorneys will hereby associate with the Woodley Law Offices in the defense of Tara Hanoch and 'John Doe' Hanoch." In his "Initial Case Analysis and Legal Fee Estimate," Peizer stated, "We are defending defendants Hanoch while they are also being represented by their own personal counsel for Tara Hanoch's personal injury claim." Woodley actively participated in the case as Hanoch's personal counsel.²

The parties in the negligence lawsuit agreed to binding arbitration on the liability issues only. The arbitrator determined that Western Ports was 100 percent liable for the accident. The arbitrator explained in part:

The significance of the physical evidence was the subject of dispute amongst the respective experts called by the defendants. Ms. Hanoch's expert, John Hunter, was more persuasive. Not only was the extent of his experience more compelling, his position that the physical evidence was not conclusive in and of itself, but was consistent with the truck having crossed into the Volvo was explained and made sense.

USAA paid Hanoch's arbitration costs and Hunter's witness fee.

In a December 28, 2004 letter, Peizer explained the arbitration outcome to USAA regional counsel Lisa Giertz. Peizer concluded, "We should . . . be able to conclude our involvement in this case shortly having successfully defended Hanoch, with the able assistance of Hanoch's personal counsel." On January 25, 2005, the trial court entered final judgment dismissing all claims against Hanoch. USAA's involvement in the case ended when Peizer filed a motion to withdraw on February 11, 2005. Hanoch settled her personal injury case against Western Ports for $110,000 and paid Woodley a one-third contingency fee.

On January 31, 2005, after entry of final judgment regarding liability, Woodley sent USAA an invoice for his defense services. He claimed USAA owed him total fees and costs of $53,886.19 for "Liability Only." Woodley requested USAA "to pay for these defense services which were necessary to protect [the Hanochs] and their carrier from liability and which services were instrumental in shielding them and USAA from liabilityfor serious damages claims."³ Woodley claimed no work after January 31, 2005. On March 9, 2005, he sent USAA a second letter to demand payment and additional interest accrued. USAA refused to pay Woodley.

On January 7, 2011, nearly six years after he worked on Hanoch's case, Woodley sued USAA for fees he alleged USAA owed him in defending Hanoch. Woodley's amended complaint alleged four claims: an account stated, statutory violation of the duty of good faith and fair dealing,⁴ unjust enrichment, and quantum meruit.

USAA moved for summary judgment, arguing that Woodley failed to state a claim upon which relief could be granted and the three year statute of limitations barred his claims. About a month later, Woodley cross moved for summary judgment, arguing for the first time that his January 2005 billing invoice to USAA created an account receivable, subject to the six-year statute of limitations under RCW 4.16.040(2). He also argued for the first time on summary judgment that he was an intended third party beneficiary of the insurance contract between Hanoch and USAA. Therefore, a six-year statute of limitations period applied to his action. The trial court considered both motions at the summary judgment hearing. It granted USAA's summary judgment motion of dismissal and denied Woodley's motion.

ANALYSIS

Standard of Review

We review a summary judgment order de novo, performing the same inquiry as the trial court and considering facts and reasonable inferences in the light most favorable to the nonmoving party. Jones v. Allstate Ins. Co., 146 Wn.2d 291, 300, 45 P.3d 1068 (2002). Summary judgment is proper if no genuine issue of material fact remains and the moving party is entitled to judgment as a matter of law. CR 56(c). A genuine issue of material fact exists where reasonable minds could differ regarding the facts controlling the outcome of the litigation. Wilson v. Steinbach, 98 Wn.2d 434, 437, 656 P.2d 1030 (1982). The nonmoving party may not rely on mere allegations, denials, opinions, or conclusory statements but must set forth specific admissible facts indicating a genuine issue for trial. CR 56(e); Int'l Ultimate. Inc. v. St. Paul Fire & Marine Ins. Co., 122 Wn. App. 736, 744, 87 P.3d 774 (2004).

Account Receivable

Woodley contends that his January 2005 billing invoice to USAA demanding payment constitutes an account receivable. He asserts that RCW 4.16.040's⁵ six year statute of limitations for accounts receivable applies and the trial court erred in granting summary judgment dismissal based on a three-year statute of limitations. USAA responds that Woodley cannot unilaterally create an account receivable by sending abill to a company he admits never employed him and his complaint alleges no account receivable claim.

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