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 ORDER

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HONORABLE RONALD B. LEIGHTON

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON

AT TACOMA

OLUF VEDOY; KURT VEDOY; VEDOY

ENTERPRISES, INC., a Washington

corporation; and O.K. FISHERIES, INC., a

Washington corporation,

Plaintiffs,

v.

DANIEL MATTSEN and JANE DOE

MATTSEN, his wife and their marital

community,

Defendants.

Case No. C05-5566 RBL

ORDER

This matter comes before the Court on Defendants’ Motion for Summary Judgment and Motion for

Rule 11 Sanctions. The Court has reviewed the materials submitted by the parties and for the reasons

stated below, GRANTS the Motion for Summary Judgment [Dkt. #14], and DENIES the Motion for Rule

11 Sanctions [Dkt. #18] and DENIES as moot Plaintiffs’ Motion Re: Allowing Time [Dkt. #28]. 

STATEMENT OF FACTS

The facts relevant to the current controversy are not disputed. In September 2003, several

individuals formed Shaman Fishing, LLC (“Shaman”). Defendant Daniel Mattsen was Shaman’s Managing

Member. In October 2003, Shaman purchased two loans from Key Bank which were secured by preferred

ship mortgages on plaintiffs’ fishing boat, the F/V BLUE FIN. In January 2004, Shaman filed a complaint

to foreclose the preferred mortgages on the BLUE FIN. The Vedoys and their corporate entities

(“Vedoy”) asserted affirmative defenses and counterclaims against Shaman.

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Vedoy claimed, then and now, that Shaman, by including the fishing licenses and fishing permits in the foreclosure

action, “improperly clouded the title to the Fishing Rights . . .” thereby causing damage to Vedoy. See Answer, Affirmative

Defense and Counterclaim, Cause No. C04-0036L [Dkt. #18] and Complaint for Damages [Dkt. #1-2] to this action. 

 ORDER

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In May of 2005, the parties participated in a mediation presided over by Judge Gerard Shellan, of

Judicial Arbitration and Mediation Service (JAMS). The dispute was settled on May 18, 2005 with the

parties agreeing that the settlement was:

[A] full, final, global settlement settling any and all claims between or

among the parties, all counterclaims, crossclaims of every type or nature

from the beginning of time to eternity! This provides for the dismissal of

the lawsuit with prejudice and without cost to either party. It provides for

the settlement of all claims involving all parties including third party

defendants of every type and nature and provides for appropriate mutual

releases. 

Exh. C to Decl. of Jerry R. McNaul [Dkt. #15]. The agreement also contained a provision giving Judge

Shellan authority as an arbitrator to render a “binding resolution” of any dispute arising over “the

preparation of the documents or in the implementation of the agreement.” Exh. C to Decl. of Jerry R.

McNaul [Dkt. #15]. Shaman was represented at the mediation by its Managing Member, Daniel Mattsen,

who assented to the settlement on Shaman’s behalf.

On the basis of the settlement, the parties entered into a Stipulation for Entry of Order of Dismissal

and Disbursement that dismissed all claims with prejudice. A copy of the mediation transcript was attached

to the Stipulation and incorporated by reference. The Order was signed by Judge Lasnik on May 25, 2005.

In July 2005, the current lawsuit was filed. In this action the Vedoy plaintiffs have asserted the

same claims against Daniel Mattsen that they asserted as counterclaims against Shaman in the previous

lawsuit.1

 No one challenges the representation that Mattsen, at all relevant times, was acting in his official

capacity of managing member of Shaman. Nevertheless, the Vedoy plaintiffs take the position that because

Mattsen was not released by name in the settlement, the current iteration of the same lawsuit is legitimate. 

Decl. of Jerry R. McNaul, para. 3, [Dkt. #13]. They are wrong. 

Judge Shellan acted as arbitrator pursuant to the terms of the agreement. He rendered a “binding

resolution” of the dispute when he concluded that the action against Daniel and “Jane Doe” Mattsen

involved the same issues, the same vessel and the same fishing rights which were the seminal issues in the

lawsuit settled by the May 18, 2005 Agreement. That Agreement was intended by the parties as a global

settlement of the dispute. Judge Shellan noted that: “at no time during the mediation process either in joint

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The elements of res judicata are: (1) an identity of claims; (2) a final judgment on the merits; and (3) identity or privity

between the parties. Blonden-Tongue Labs v. Univ. of Ill. Found., 402 U.S. 313, 323-24 (1971). Here, the claims by Vedoy are

the same, those claims were dismissed in the first case with prejudice; and the defendant here was in direct privity with the entity

(Shaman) that was dismissed by Vedoy in that action. 

 ORDER

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or separate caucus did any party or counsel ever raise any issue or infer or express any desire that the

settlement was meant to exclude some of . . . the parties or persons present or that any future litigation on

the same issues was in the offing . . . .” Judge Shellan concluded that: “the parties present were all released

as agents, directors, representatives, of any LLC entity.” Exh. E to Decl. of Jerry R. McNaul [Dkt. #15].

From the foregoing it is clear to this Court that there are no genuine issues of material fact and

defendants are entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). The individuals, the entities

and the principals of the entities which were parties to the first lawsuit were all released in the settlement

agreement of any and all claims between or among them. Judge Shellan reached that conclusion as the

arbitrator authorized to resolve all disputes arising out of the implementation of the settlement agreement.

Arbitration clauses are highly favored under Washington state law and under federal law. Perez v.

Mid-Century Ins. Co., 85 WN. App. 760 (1997); Hoffman v. Aaron Kamhi, Inc., 927 F. Supp. 640

(S.D.N.Y. 1996). Settlement agreements are contracts that a federal court interprets by looking at the

contract law of the state in which it sits. Jeff D v. Andrus, 899 F.2d 753, 759 (9th Cir. 1990). Washington

law on contract interpretation directs a court’s attention to “the objective manifestations of the agreement,

rather than on the unexpressed subjective intent of the parties.” Hearst Communications, Inc. v. Seattle

Times Co., 154 Wn.2d 493, 503 (2005). The decision of Judge Shellan was not only well within the scope

of his authority, it was based upon sound legal principal. Where an authorized arbitrator renders a decision

on a matter within the scope of his authority, that decision is entitled to preclusive effect.

Moreover, the claims raised in the current lawsuit were raised or could have been raised in the prior

action before Judge Lasnik and are therefore barred by the doctrine of res judicata. Montana v. United

States, 440 U.S. 147, 153 (1979).2

Finally, with regard to Rule 11 Sanctions, the Court declines to award sanctions as requested by

defendants. The Court hastens to add, however, that under the circumstances of this case, an imposition of

sanctions would be wholly justified. In the opinion of this Court, there is no judge, in either state or federal

court, that would view the current lawsuit as anything but frivolous. The plaintiffs settled the prior lawsuit

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 ORDER

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which involved the claims they now assert against Defendant Mattsen. During the entirety of the

settlement negotiations they were bargaining with Defendant Mattsen. At no time did they reveal their

secret plan to settle with the entity through which Mattsen operated, only to turn around and sue Mattsen,

individually, on the same claim. In retrospect, the conduct of the Vedoys during the negotiations was

unethical and improper. The inability of the lawyer to control his clients was regrettable. The lawyer’s

belief that the legitimacy of his conduct and that of his clients in pursuing the current lawsuit was somehow

impacted by forum selection is incredible. Nevertheless, this Court will not impose sanctions against the

Vedoy plaintiffs or their former attorney. The Court is satisfied that a valuable lesson can be learned by

Mr. Woodbery and his clients without the imposition of sanctions. With respect to the added cost incurred

by defendant Mattsen because of plaintiffs’ antics, it should simply be chalked up as an added cost of doing

his chosen business. 

Dated this 12th day of December, 2005.

ARONALD B. LEIGHTON

UNITED STATES DISTRICT JUDGE

 

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