Federal estate tax law permitted spouses to utilize a device known as a qualified terminable interest property, or QTIP, by which they transfer their estates to their spouse for the life of that spouse. The QTIP is not taxable upon the first spouse’s death. Thus, the spouses receive a benefit akin to the federal marital deduction after the first spouse’s death and the estate, after the second spouse’s life estate, flows to beneficiaries designated by the first spouse, usually the children. The government ultimately collects the estate tax.

Washington did not enact an estate tax like the federal tax until 2005, but it attempted, in effect, to collect that Washington estate tax on the estates of initial spouses who died prior to 2005. In this case, Jim Bracken died in 1984. His wife Sharon died in 2006. DOR tried to impose the full Washington estate tax in 2006 on Sharon’s estate without any marital deduction for Jim’s estate or any credit for the QTIP in Sharon’s estate.

Talmadge/Fitzpatrick represented the Bracken Estate on appeal. Stokes Lawrence was the Estate’s trial counsel and co-counsel on appeal. The Supreme Court granted direct review in the case and reversed a trial court ruling denying the Estate a refund.

10/2012

David Brown was a deputy prosecuting attorney in Klickitat County who supervised plaintiffs Eubanks and Gray. In the course of that supervision, Brown sexually harassed Eubanks and Gray. They sued Brown, Klickitat County, and the Klickitat County Prosecuting Attorney’s Office initially in Benton County, but then obtained an order changing venue to Clark County. Brown moved the Clark County Superior Court to transfer venue in the case to Klickitat County, arguing that a special statute relating to suits against public officers required that venue be in Klickitat County. The Clark County Superior Court denied Brown’s motion. A Commissioner of the Court of Appeals, Division II, granted discretionary review, but the panel agreed with Eubanks and Gray that venue was proper in Clark County. The Court concluded that a specific venue statute controls over general venue statutes. The statute that permits a party to sue a county in the neighboring county to avoid prejudice to that party by being “home towned” controlled. The Court concluded that the statute pertaining to suits against public officers did not apply because Brown was being sued individually for personal misconduct in the workplace and not for any failure concerning his official duties as a deputy prosecuting attorney.

Talmadge/Fitzpatrick assisted Tom Boothe of Portland, Oregon in the representation of Eubanks and Gray on appeal.

9/2012

AUTO, the trade association for Washington’s gas stations, filed an action against the Governor and the Director of the Department of Licensing arguing that the State lacked the authority under the Constitution to enter into certain fuel compacts with Native American tribes pursuant to which those tribes received monies from the Motor Vehicle Fund (“MVF”). All Washington gas tax revenues are deposited into the MVF. The monies paid by the State were allegedly “refunds” of gasoline taxes (although the tribes did not pay gasoline taxes directly to the State). The monies were sent to the tribes without a legislative appropriation. AUTO also argued that although these MVF monies were constitutionally obligated under the 18th Amendment to Washington’s Constitution to be used for “highway purposes,” the tribes did not actually use those monies for highway purposes. The Grays Harbor County trial court dismissed AUTO’s action on the basis that the Native American tribes, immune from suit by virtue of their status as sovereign nations, were indispensable parties to the litigation under CR 19 so that the litigation could not go forward.

In a 5-4 decision, the Washington Supreme Court reversed the trial court and reinstated AUTO’s case. In weighing the factors to be applied in determining if a party was “indispensable” within the meaning of CR 19, the Court undertook the balancing required by CR 19(b) and concluded that because a finding the tribes were indispensible would preclude any kind of judicial review of the action of the State officials for possible State Constitutional violations, the lawsuit must go forward to allow AUTO a judicial remedy.

Talmadge/Fitzpatrick represented AUTO both at trial and on appeal in this matter.

8/2012

Baerbel Roznowski was killed by her live-in boyfriend. Prior to her death, Roznowski sought the protection of a civil anti-harassment order. A court issued that order and Roznowski requested that it be served on her boyfriend. A police officer of the City of Federal Way effectuated service of the order on the boyfriend at Roznowski’s home, but he did not bother to read the law enforcement information sheet that accompanied the order or the order itself. Had the officer read the order, he would have noted that the boyfriend was not entitled to be in Roznowski’s house and had to be 500 feet away from her. He would have also learned that the boyfriend spoke Korean and was not conversant in English. The officer’s interaction with the boyfriend lasted only a few minutes. When the boyfriend was served with the order, he was surprised. He became enraged and murdered Roznowski.

Roznowski’s daughters sued Federal Way for the negligence of its police officer in the service and enforcement of the civil anti-harassment order. Ultimately, a jury awarded damages to Roznowski’s estate but did not award damages to the two daughters individually for their loss of consortium, their personal relationship with their mother. Upon a post-trial motion by the daughters, the trial court agreed that the jury erred in not awarding any damages to them for their loss of their relationship with their mother and ordered a new trial, confined to the daughters’ damages on that issue. Otherwise, the trial court entered a judgment on the verdict of the jury in favor of the Estate. Federal Way appealed.

On appeal, the Court of Appeals, Division I, affirmed the judgment on the verdict of the jury and the trial court’s new trial order as to the daughters. The Court concluded that Federal Way had not adequately preserved any alleged errors associated with the duty it owed to Roznowski in connection with the service and enforcement of the civil anti-harassment order. The Court also agreed that the daughters were entitled to a new trial on the issue of damages for their loss of their relationship with their mother.

Subsequent to the Court’s opinion in March, 2012, Federal Way moved for reconsideration of the Court’s decision. Ultimately, the Court denied Federal Way's motion for reconsideration, but withdrew its earlier opinion. The Court’s new opinion, issued on July 23, 2012, makes it even clearer that Federal Way did not preserve any alleged errors on the duty it owed to Roznowski in connection with the service and the enforcement of the civil anti-harassment order. The Court noted that Federal Way failed to object to the duty instruction at trial, failed to assign error to duty instruction in its brief before the Court of Appeals, and failed to file a CR 50(b) motion. The Court retained that portion of its earlier opinion in which it determined that the daughters were entitled to a new trial on the issue of damages for the loss of their relationship with their mother.

Talmadge/Fitzpatrick was associated on appeal with the Connelly Law Offices. Jack Connelly and Michah LeBank tried this case to a King County jury.

7/2012

Atlas sold construction materials for the DNR building in Olympia to Realm on credit. When the materials supplied by Atlas failed and had to be removed, Realm refused to pay Atlas for the materials, even though Atlas was only the retailer of such materials. Atlas sued to recover the purchase price of the materials, invoking a provision in Realm's credit application that if Atlas prevailed in litigation it was entitled to an award of attorney fees. Realm counterclaimed claiming Atlas was liable for breach of contract, breach of warranty, and negligent misrepresentation.

Ultimately, after extensive discovery, the trial court concluded that Atlas was entitled to recover damages for the purchase price of the materials, rejecting Realm's counterclaims, and awarded Atlas attorney fees against Realm. However, the trial court limited the scope of Atlas's attorney fee award. Under the contractual provision in the credit application, Realm agreed “to pay the costs of collection, including reasonable attorney fees in suit by Atlas Supply, Inc. . . . for the merchandise sold to applicant.” The trial court concluded that this "cost of collection" attorney fee provision did not extend to fees Atlas incurred in successfully defending all of Realm’s counterclaims.

The Court of Appeals, Division I, in a published opinion reversed the trial court’s decision, concluding that Atlas was entitled to recover attorney fees incurred to respond to Realm's compulsory counterclaims pursuant to the "cost of collection" attorney fee provision. The Court also awarded Atlas its fees on appeal. Talmadge/Fitzpatrick was associated on appeal with trial counsel Randal Thiel of Thiel Keaton PLLC in the representation of Atlas Supply, Inc.

7/2012

Dana Clausen was a sailor on board a vessel owned by Icicle Seafoods when he was injured in Alaska. Rather than taking to heart its obligations under time-honored maritime law principles of maintenance and cure, principles that insure that an injured sailor will receive room, board, and medical attention after an injury at sea, Icicle instead manipulated the process to deprive Clausen of his rights. Clausen ultimately was left to living in a dilapidated trailer in the state of Louisiana. Icicle’s own doctors reported to Icicle that Clausen needed surgery. Icicle suppressed that report until the time of trial. Ultimately, at trial, that medical report was revealed and the court sanctioned Icicle and its counsel for hiding the medical report. Icicle’s trial counsel was later disciplined by the Washington State Bar Association.

As permitted by a recent United States Supreme Court decision, the jury awarded Clausen his past due maintenance and cure, his attorney fees to collect them, and punitive damages. Continuing its recalcitrant behavior, even though Icicle admitted that it owed the judgment for maintenance and cure, Icicle appealed the entire judgment and did not pay the judgment for maintenance and cure. On Clausen’s motion, the case was transferred to the Washington Supreme Court. The Washington Supreme Court in a 7-2 opinion affirmed the trial court’s judgment ruling that Clausen was entitled to attorney fees, and punitive damages.

This case represents a significant milestone in maritime law recognizing that injured sea personnel are entitled to maintenance and cure and employers who willfully fail to provide sea-based remedies akin to land-based worker compensation may be subject to awards of punitive damages. Talmadge/Fitzpatrick was associated with maritime attorneys James Jacobsen of Seattle and Larry Curtis of Louisiana.

5/2012

In 1908, John and Mary Power dedicated a 15-foot wide alley to the City of Port Townsend. The eastern half of the alley was open and used as a public right-of-way, presumably since the dedication; however, a portion of the western half of the alley was never opened. The remaining western portion of the alley has been open to the public and used for parking. The alley currently runs along the length of the boundary between the Graves’ property to the south and the Kielys’ property to the north.

In 2008, the Graves filed a petition with the City to vacate the western half of the alley and merge it into their adjoining land. The City held a public hearing on the application, which it processed according to the statutes and ordinances applicable to vacation. As a condition precedent to vacating the alley, the City required the Graves to pay for an appraisal of the alley, a survey of the alley, a lot line adjustment, and the appraised value of the alley. The Graves satisfied all of the City’s financial conditions. The City also required the Graves to sign an indemnity and hold harmless agreement releasing the City from any future damage claims resulting from the encroachments and/or any adverse possession claim. They did so. At no time did the City or the Graves believe there was an adverse possession claim that extended beyond the encroachments identified in the survey.

The City passed an ordinance vacating the alley and later conveyed the alley to the Graves via a lot line adjustment recorded in March 2009. In June 2009, the Kielys filed an action in the Jefferson County Superior Court alleging ownership of the entire alley through adverse possession. The trial court quieted title to the entire alley in the Kielys. The Graves appealed directly to the Supreme Court.

The question on appeal was whether the Kielys could claim adverse possession of an alley dedicated for public use. As a threshold matter, the parties disputed the nature of the title held by the City as a result of the dedication. Revisiting the distinction between statutory and common law dedications, the Supreme Court determined that the City possessed only an easement in the alley by virtue of a statutory dedication. But the Court concluded that an easement dedicated for public use constitutes “lands held for any public purpose” under RCW 7.28.090, which prevents a party from claiming adverse possession of property held or controlled by a municipality for public use. The Court held that the Kielys could not adversely possess the alley where the City had held it in trust for the public until it was vacated and reversed.

Talmadge/Fitzpatrick was associated on appeal with Fred Mendoza and Maya Mendoza-Exstrom.

3/2012

Denise Frisino sought accommodation for the respiratory illness she developed in response to chemical toxins in her environment. Her illness made her sensitive to airborne toxins, excessive dust, mold, and other irritants. After suffering with symptoms for three years, Frisino requested a transfer to a cleaner facility that would be less aggravating to her condition. Despite a standing policy of making routine staff adjustments for disabled employees, the District took no action and did not even assist Frisino in her search for open positions. When a position came open at another school, Frisino took it. However, the new job was in a school that was old, mold-ridden, and dirty. When Frisino requested a clean classroom, the District then began questioning the authenticity of Frisino’s illness, and challenging her many doctors’ advice. The District even requested a psychological evaluation to see if her disability was mental rather than physical.

In response to a public outcry about the mold, the District agreed to partially remove mold from the school. However, the school delayed removing all of the mold, deeming it unnecessary and infeasible. It then ordered Frisino to return to her classroom. When Frisino continued to maintain that she could not return to a moldy classroom, the District offered to put her on unpaid medical leave and threatened termination. Frisino submitted a new accommodation request and pleaded for a temporary transfer until the rest of the remediation could be completed. The District insisted that there was no threat to Frisino, and terminated her for job abandonment. During the following summer break, the District removed significant quantities of mold from the ceiling of Frisino’s classroom.

Despite this record, the trial court ordered summary judgment for the District, concluding that Frisino had failed to adduce evidence of discrimination under the Washington Law Against Discrimination. Talmadge/Fitzpatrick represented Frisino on appeal, and the Court of Appeals reversed the trial court's decision. The District petitioned the Washington State Supreme Court. Talmadge/Fitzpatrick answered the petition, and the Supreme Court denied it.

11/2011

Seashore Villa Mobile Home Park, owned in part by the Salvation Army, was an adults-only mobile home park located in Thurston County. At one time, the park owner provided carports and sheds to each of the mobile home lots in the park. Over the years, those sheds and carports deteriorated and a question arose as to whether the sheds and carports were owned by the tenants or by the park owner. The park owner sent a letter to all of the tenants saying that the park owner intended to remove the sheds and tear down the carports unless the tenants chose to take responsibility for them. The tenants sued the park owner alleging that such letters violated the terms of RCW 59.20.135, a statute that forbade mobile home park owners from transferring responsibility to maintain permanent structures within a mobile home park to its tenants unless the tenants voluntarily agreed to do so. The Thurston County Superior Court granted injunctive relief to the tenants and ordered the mobile home park owner not to change any improvements within the mobile home park. Believing that such injunctive order was far too extensive, the park owner alleged that such a result constituted a taking of the park owner’s property and a violation of the park owner’s constitutional property rights. Ultimately, the trial court denied any relief to the park owner, continuing the injunction in place on the basis that an implied contract had arisen between the park owner and the tenants to keep the sheds/carports in place in perpetuity. The court raised this issue on its own, without an argument from either party. The trial court also entered a substantial award of attorney fees in favor of the tenants.

Talmadge/Fitzpatrick was retained to represent Seashore Villa Mobile Home Park on appeal. The Court of Appeals, Division II, affirmed the trial court’s decision on RCW 59.20.135 concluding that the letter from the park owner violated the statutory direction prohibiting park owners from transferring responsibility for permanent structures in a mobile home park to its tenants. The Court, however, reversed the injunction in favor of the tenants, concluding that no contract implied in fact existed in this case and the mobile home park owner was entitled to remove carports and sheds at the conclusion of the tenants’ lease. The Court also reversed the award of attorney fees insofar as the tenants were no longer the substantially prevailing party in the case.

9/2011

In this case, the appellants were ten special education students and their parents who unquestionably suffer from severe sensory, mental, and physical disabilities. Most are nonverbal and many have physical handicaps. The students and their parents sued the Clover Park School District No. 400 (“District”) for general money damages, alleging teachers and staff subjected the students to physical, verbal, and psychological abuse, and unlawful discrimination based on their disabilities under Washington’s Law Against Discrimination, chapter 49.60 RCW. The students and their parents claimed that neither the genesis, nor the manifestations, of abuse was educational in nature. Instead, the students suffered random acts of violence and abuse. The District denied most of the allegations in the students’ complaint and contended the foundation of their complaint was educational in nature and thus within the scope of relief available under the Individuals with Disabilities Education Act (“IDEA”), 20 U.S.C. §§ 1400-91.

The District moved to summarily dismiss the student’s complaint, arguing that the students had not exhausted the administrative remedies available to them under the IDEA and that their lawsuit was therefore barred. In response, the students dismissed all claims that could have been construed, as or related to, a request for educational compensation under the IDEA for deficiencies in educational services or benefits. The trial court granted the District’s motion and dismissed the complaint. Talmadge/Fitzpatrick represented the students and parents in a successful direct appeal to the Supreme Court.

The underlying issue before the Supreme Court was whether special education students and their parents bringing state tort claims involving abuse and educational neglect in state court must first satisfy the IDEA’s exhaustion requirement before filing suit. In considering the case, the Court reviewed the purpose and intent of the IDEA and closely analyzed the students’ and parents’ claims. The Court reversed, holding that the students and parents were not required to exhaust the administrative remedies available through an IDEA-due process hearing before filing a civil action under state law in state court. The Court remanded the state tort and unlawful discrimination claims to the trial court after finding genuine issues of material fact precluded summary judgment.

8/2011

The City of Woodinville chose to have a substantially rural residential zone within its zoning code. A developer purchased certain parcels, aware that this rural zoning code was in place, and sought to develop subdivisions on those parcels. To do so, the developer applied for a re-zone. Woodinville denied the re-zone. The developer took Woodinville to court alleging that the city violated certain Growth Management Act policies relating to making more in-city land available for residential development and that it was entitled to a re-zone under Washington law. The Concerned Citizens of Wellington, a citizen’s group, joined in the action to resist the developer’s re-zone request. The trial court agreed with CCW and Woodinville that its existing zoning was appropriate and the developer failed to meet the criteria for a re-zone. The developer appealed that decision to the Court of Appeals, Division I, which reversed the trial court’s decision, holding that a re-zone was required. That court essentially substituted its judgment on the re-zone for that of the elected City Council.

Talmadge/Fitzpatrick was retained to assist Woodinville on a petition for review to the Washington Supreme Court. Woodinville and CCW petitioned the Supreme Court for review, which was granted. The Supreme Court reversed the Court of Appeals and reinstated the trial court’s decision. Cities like Woodinville have substantial discretion on zoning and re-zones. Nothing in law foreclosed a more rural residential area, particularly where Woodinville was meeting the housing goals of the Growth Management Act by more intensive development in its downtown core. The developer did not meet the criteria for a re-zone.

6/2011

Whatcom Fire District No. 21 provides fire and emergency services to a substantial part of Whatcom County, including Birch Bay. Three developers sought to develop large commercial/residential projects in Birch Bay. Under the Whatcom County Code, however, a service provider like the District was obliged to issue a letter of concurrency to a developer allowing a project to go forward only when services existed at the time or in the near future to address the added growth created by such a project. The District refused to issue letters of concurrency for the three projects because it lacked the personnel and facilities to deliver fire and emergency services to the projects, given its fiscal constraints. The developers appealed the District’s decision to the Whatcom County Hearing Examiner, who ruled that letters of concurrency should have issued. The County Council agreed. The superior court, however, reversed the Hearing Examiner based on undisputed evidence that the District, whose personnel included both professional and volunteer firefighters, did not have sufficient existing resources to provide the services necessary to handle the growth occasioned by the three large projects. The Court of Appeals, Division I, reversed the trial court’s decision holding that concurrency principles under the Growth Management Act were satisfied when Whatcom County adopted its comprehensive plan that stated fire services were adequate. Project-specific evaluation of whether services were available for a project was not required under GMA, according to that court.

The District petitioned the Washington Supreme Court for review, which it granted. The Supreme Court reversed the Court of Appeals decision, holding that by the very terms of the Whatcom County Code, a letter of concurrency was necessary before a project could proceed. Such a letter of concurrency could only issue after a project-specific review of its growth impacts. In this case, the evidence was undisputed that the District did not have sufficient fire and emergency personnel nor equipment to address the growth generated by the three large projects at issue. Consequently, the District was correct in denying the developers letters of concurrency.

This case is the first significant reported decision on non-transportation concurrency under the Growth Management Act. Concurrency is a vital component of that Act in Washington.

5/2011