N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT
B OFI FEDER

AL B ANK, a

fe de ra lly c ha rte re d ba nking institution, Pla i ntiff-Appe lla

nt,
v. ADVANC E FUNDING LLC ; e t a l.,

De fe nda n ts-Appe lle e s. No. 16-35006 D.C . No. 2:14-c v-00484-B JR
M EM O R ANDUM *

Appe a l from

the Unite d

Stat e s Distric t C ourt for the W e ste rn Distric t of W a shington B a rbara Ja c obs R othste in, Distric t Judge , Pre s iding Subm itte d De c e m

be r 7, 2017 ** Se attle , W a s hington B e fore : HAW KINS, M c KEOW N, a nd C HR ISTEN, C i rc uit Judge s. She e na Ve nz ant e n te re d into a

n a gre e m e nt with B ofI Fe de ra l B ank (the B ofI Agre e m e nt) to a s sign twe nty -five annua l lotte ry pa ym e nts in e xc ha

n ge for a lum p
sum . Unde r W a s hington la w , suc h a n a ssignm e nt ha s to be judic ia lly a pprove d. 

# FIL ED
DEC 11 2017 M OLLY C. DW Y ER, CLERK U

. S. CO URT O F APPEALS

* This disposition is not a ppropria te for public at ion a

nd is not pre c e de nt e xc e pt a s provide d

by Ninth C irc uit R

ule 36-3.

* * The pa

ne l una nim ously c onc lude s this c a se is suita ble for de c ision without oral a

rgum e nt. Se e Fe d. R . App. P. 34(a)(2).R C W § 67.70.100. B e fore it wa s, Ve nz ant re pudia te d he r c ontra c t

with B ofI and
e nte re d into a

sim ila r arrange m e nt with Adva

nc e Funding. Adva

nc e pe titione d a

nd
re c e ive d judic ia l a

pprova l for Ve nz ant to a ssign he r a nnua l priz e pa

y m e nts to one of Adva nc e ’ s busine ss a s soc iate s. B ofI sue d Adva nc e and its busine ss a ssoc iate s,
a sse rting tortious inte

rfe re n c e with c ontra c t

and unjust enric hm e nt. The distric t
c ourt gra nte d sum m ary judgm e nt to Adva

nc e , holding tha

t the B ofI Agre e m e nt
wa s c ontra

ry to publicpolic y

an d the re fore une nforc e a ble . B ofI tim e ly

a p pe a ls. W e hav e jurisdic tion pursua nt to 28 U.S.C . § 1291, a

nd we re ve rse . Mc

K ow n v . Simon Prop. Grp. Inc

. , 689 F.3d 1086, 1091 (9th C ir. 2012). In this diversity

a c tion, we are bound by de c isions of the W a shington Supre m e C ourt. Id . “ [I] n the a bse nc e of suc h a

de c ision,”our ta sk is to “ pre dic t how the highe st sta

te c o urt would de c ide the issue using interm e diate a ppe lla te
c ourt de c isions, a

m ong othe r sourc e s of a

uthority .” Id. “ While [W a s hington]
re c o gniz e [s] an ove rarc hing fre e dom to c o ntra c t, provisions a

re une nforc e a

b le whe re the y

are prohibite d by

sta tute .” J ordan v

. N

ationstar Mortg., LLC

, 185 W a sh 2d. 876, 883 (2016). M ore ove r, “ [a ] c ontra c t tha t is c o n trary to the te rm s
and polic y of an

e xpre s s le gisla

tive e na c t m e nt is ille ga l a

nd une nforc e a

ble .” Tanne r Ele c . C

oop. v . Puge t S

o und Pow e r & Light C

o. , 128 W a sh. 2d 656, 669 (1996) (c iting Ve dde r

v . Spe llman , 78 W a sh. 2d 834, 837 (1971)).

2W a shington c ourts ha ve de c line d to e nforc e c ontra c t s whe re the pa rtie s ha v e floute d a sta t utory re quire m e nt or c ollude d to e v a d e the ir sta tutory dutie s, se e

, e .g. , Hammac k

v . Hammac k

, 114 W a sh. App. 805 (2003); Ev ans v . Luste r , 84 W a sh. App. 447 (1996); K

e nne dy v . Roda , 41 W a sh. App. 177 (1985), but the B ofI Agre e m e nt did not tra

nsgre s s “ the te rm s . . . of a n e xpre ss le gisla

tive e na c tm e nt,” Tanne r Ele c . C

oop. , 128 W a sh. 2d a

t 669. In fa c t, by

m aking judic i a l a

pprova l of the a ssignm e nt a

c ondition pre c e de nt to obliga tions under the c ontra c t, the B ofI Agre e m e nt re quire d c om

plia nc e with R C W

§ 67.70.100. 1 Nor wa s the B ofI Agre e m e nt hostile to the polic y

unde rly ing R C W § 67.70.100. W a shington sought, through the sta tute , to “ e xte nd its p are ns patriae prote c tion to lotte

ry winne rs in orde r to insula te the m from the ir own hum an fra iltie s a nd the possiblee xc e sse s to whic h the y m ight be subje c te d.” C

onv e rse v . Lotte ry C omm’n , 56 W a s h. App. 431, 436 (1989). The le gisla ture ’ s fe ar wa s tha

t

1 The unsa

tisfie d c ondition pre c e de n t would ha ve pre ve nte d B ofI or Ve nz an t from de m an ding im

m e diate pe rform anc e , but it did not re nde r the c ontra c t inva lid or othe rwise inc a

pa ble of supporting a

c la im for tortious inte

rfe re nc e . S

e e , e .g. , W alte r Imple me nt, Inc . v . Foc ht , 107 W a sh. 2d 553, 556–57 (1987) (“ A c ondition pre c e de nt is a

n e ve n t oc c urring subse que nt to them aking of a va lid c ontra c t whic h m ust e x ist or oc c ur be fore the re is a right to im

m e diate pe rform an c e .” ); BG Grp., PLC v . Re public of Arg. , 134 S. C t. 1198, 1207 (2014) (c ondition pre c e de n t de te rm i ne s “ whe n the c ontra c tua l duty . . . a rise s, not whe the r the re is a c ontra c tua l duty . . . a t a l l ” ) (c iting 13 R

I C H A R D A. L O R D , W I LLI S T O N O N C O N T R A C T S §§ 38:7, 38:4 (4th e d . 2013)). 3lotte ry

winne rs m ight “

put[] the m se lve s into debt by a ssigning e xc e ssive am ounts of the ir winnings to cre ditors.” Id. Enforc ing the B ofI Agre e m e nt would not de fe at the le gisla

tive inte nt be hind R C W

§ 67.70.100. Adva nc e sugge sts tha

t we re the B ofI Agre e m e nt to bede e m e d e nforc e a ble , a fa c t oring c om

pa ny c ould string along a

lotte ry winne r “ while it ‘ shoppe d’ the de a l
or wa ite d for insura

nc e to a c tiva

te .” Ac c ording to Adva

n c e , suc h a

n outc om e offe nds W a shington’ s sta te polic y by “ favoring theinte re s t of a fa c toring c om

pa ny
ove r an individual lotte ry winne r.” This c onte ntion is wide of the m ark be c a

use B ofI and Ve nz ant we re e qua lly bound to the ir c o ntra c t. Se e Re k hte r v . De p’t of Soc . & He alth Se rv

s. , 180 W a sh. 2d 102, 112 (2014) (“ Unde r W a shington la

w, the re is in e ve ry

c o ntra c t a

n im plie d duty of good fa ith a

n d fa i r de a ling tha

t obliga te s the pa rtie s to c oope ra te with e a c h othe r so tha

t e a c h m a y obta in the full be ne fit of pe rform anc e .” (a l te ra tion a nd quota tion m arks om itte d)); C

HG Int’l, Inc

. v . Robin Le e

, Inc
. , 35 W a sh. App. 512, 515 (1983) (“ Ea c h pa rty ha s a n a ffirm ative good fa ith obliga

tion to perform

c onditions pre c e de nt to a c ontra c t a

nd c annot be
e xc use d from

pe rform anc e of the c ontra c t by his own misc onduc t .” ). The fa c toring
c om pa ny in Adva n c e ’ s hy p othe tic a l would not be

fre e to re lie ve itse lf, e xpre ssly or through a rtific e , of the obliga

tions it owe s to thelotte ry winne r, and B ofI did not try to do so in this c a se . 4B e c a

use the va lidly form e d B ofI Agre e m e nt viola te d ne i the r the le tte r nor the s pirit of theW a shington sta tute , it wa s not une nforc e a ble a s c ontra

ry to public polic y . W e the re fore re ve rse the distric t c ourt’ s orde r granting sum m ary judgm e n t in fa vor of Adva

nc e and re m a

nd for proc e e d ings c onsiste n t with this disposition. RE V E RSE D AND RE M ANDE D.

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