Court Opinion

ID: 4514126
Source: CourtListenerOpinion
Date Created: 2020-03-09 22:16:16.817242+00
Date Added: 2024-06-11T09:48:40.485003
License: Public Domain

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
                               DIVISION ONE

MICHELLE MERCERI,                         )      No. 78876-1-I

                        Appellant,

                 v.                       )      UNPUBLISHED OPINION
                                          )
SHAWN CASEY JONES,                        )
                        Respondent.       )      FILED: March 9, 2020

       SCHINDLER, J.P.T.*_ In Merceri v. Jones, No. 72615-3-I (Wash. Ct. App. Mar.

21, 2016) (unpublished), http://www.courts.wa.gov/opinions/pdf/7261 53.pdf, we affirmed

dismissal of the quiet title action Michelle Merceri filed against Shawn Casey Jones and

imposition of CR 11 sanctions against Merceri and her attorneys. The mandate issued

on May 6, 2016. On December 1, 2017, Merceri filed a CR 60(b) motion to vacate the

judgment entered in the quiet title action. Merceri appeals denial of the motion to

vacate, denial of the motion for reconsideration, and imposition of CR 11 sanctions for

filing the motion to vacate. The court did not abuse its discretion in concluding the

motion to vacate was not filed within a reasonable time and the delay in filing the motion

was not factually or legally justified. We affirm denial of the motion to vacate and the

decision to award of CR 11 sanctions. However, we remand to reconsider the amount

of attorney fees imposed as CR 11 sanctions.
No. 78876-1 -1/2

Hunts Point Property

       The facts are more fully set forth in Merceri v. Jones, No. 72615-3-I (Wash. Ct.

App. Mar. 21, 2016) (unpublished), http://www.courts.wa.gov/opinions/pdf/7261 53.pdf,

and will be repeated as necessary.

       In 2006, Michelle Merceri asked her business partner Shawn Casey Jones to

agree to co-sign the mortgage loan to purchase a house in Hunts Point and be identified

as an owner on the title. In exchange, Merceri would pay Jones $15,000 and agreed to

be responsible for making all payments on the loan and costs associated with the

property. Merceri agreed to relieve Jones of liability on the loan after she either

refinanced or sold the house. Jones co-signed the loan and was on the title for the

property. Jones agreed that Merceri was entitled to any equity and profits from selling

the house and that he would execute a quitclaim deed after Merceri refinanced or sold

the house.

       Merceri stopped making payments on the loan in 2008. The bank initiated

foreclosure on the loan. On November 17, 2010, Merceri filed a Chapter 7 petition for

bankruptcy. Merceri identified Jones as a lien creditor on the property. The bankruptcy

court stayed the foreclosure.

       In 2011, the Washington State Department of Transportation (WSDOT)

condemned two lots between State Route 520 and Merceri’s property. Hunts Point

neighbors planned to file a lawsuit against WSDOT alleging the condemnation violated

Hunts Point community covenants, conditions, and restrictions. Neighbors sent a letter

to Merceri asking if she was interested in joining the lawsuit. Merceri forwarded the

                                             2
No. 78876-1 -1/3

letter to the bankruptcy trustee. In June 2011, the neighbors filed an inverse

condemnation lawsuit against WSDOT.

       The trustee unsuccessfully attempted to sell the Hunts Point property. On

December 4, 2012, the bankruptcy court granted Merceri’s motion to order the trustee to

abandon the property as an asset in bankruptcy.

Quiet Title Action

       On January 15, 2013, Merceri filed a quiet title and damages action against

Jones. Merceri alleged Jones “has no interest in the Property and his name on the title

is a cloud on title” that he refuses to release. Merceri alleged the “failure to release his

interest in the Property, which he has testified, under oath, has been satisfied in full,

constitutes a slander of title.” Merceri sought an order quieting title to the property and

an award of damages.

       The order setting case schedule established a May 5, 2014 trial date, January

13, 2014 as the deadline to disclose witnesses, and March 17, 2014 as the discovery

cutoff date.

       On May 22, 2013, Merceri propounded interrogatories and requests for

production to Jones. The interrogatories and requests for production include a request

to supplement the discovery responses and that Jones provide information in support of

a claim of privilege:

       These Discovery Requests are continuing in nature until this case is
       closed. Amended answers are to be served forthwith after additional
       information may become available to you, directly or indirectly, which
       would make incorrect, incomplete, non-comprehensive, or misleading any
       answer given.

                 [l}f you claim any privilege against disclosure of any of the
       above information with respect to any document, describe such document

                                              3
No. 78876-1-1/4

       distinctly to allow the party propounding these interrogatories to move the
       Court [to] compel its disclosure.

       Interrogatory 8 states:

       Please identify all complaints you made or which were made on your
       behalf to banks, mortgage companies, state or federal agencies or law
       enforcement, or other third parties regarding your allegations of
       misconduct by Michelle Merceri and/or Avista Escrow Company LLC.

       Request for production 8 states, “Please produce all documents, including any

statements, relating to the complaints identified in your answer to Interrogatory No. 8.”

Request for production 11 states, “Please produce all documents, including any

statements that are related to this action, that were not produced by Plaintiff in response

to Defendant[’]s discovery requests.”

       Jones objected to interrogatory 8, request for production 8, and request for

production 11 as “overly broad and unduly burdensome or expensive, and not

reasonably calculated to lead to the discovery of admissible evidence.”

       Merceri filed a motion to compel. On October 18, 2013, King County Superior

Court Judge William Downing granted the motion to compel. The court ordered Jones

to respond to the discovery requests.

      On November 4, 2013, Jones filed amended answers and responses. In

response to interrogatory 8, Jones states:

       1.Ryan Swanson law firm wrote various letters to Bank of America. Mr.
         Jones does not remember the specific dates and times, but has,
         pursuant to CR 33(c), produced copies of any such letters in his
         custody or control.
      2. Police report to Edmonds re [Merceri]. Produced.
      3. King County prosecutor phone call, believed to be with Linda
                                    -

         Williamson 206.296.9037 regarding forgery complaints.
      4. Spoke with a Secret Service agent relating to loan secured by Mr.
                                                 -

         Jones’s Edmonds home.

                                             4
No. 78876-1 -115

         In response to request for production 8, Jones states, “All documents in

defendant’s possession[,] custody[,] or control have been produced.” In response to

request for production 11, Jones states:

         Mr. Jones objects because Mr. Jones does not know what Ms. Merceri
         believes to be “related to this action.” Subject to and without waiving the
         objection, Mr. Jones has produced all documents in his possession,
         custody, or control relating to the Hunts Point property.

Dismissal of Slander of Title Claim

         On March 8, 2013, Merceri filed a motion for summary judgment in the quiet title

action. Merceri sought entry of a declaratory judgment that she “is the sole owner of the

Property, free and clear of any interest” of Jones and an award of damages and

attorney fees and costs for failure to execute a quitclaim deed.

         Jones filed a cross motion for summary judgment dismissal of the lawsuit. Jones

argued that because he was liable as a co-signer on the loan, he had an interest in the

property. Jones asserted no evidence supported the claim of slander of title.1 Jones

argued there was no claim that he made any false or malicious statements in reference

to any pending sale or purchase of the property. Judge Downing denied Merceri’s

motion for summary judgment and Jones’ motion to dismiss the quiet title action.

However, the court granted partial summary judgment dismissal of the slander of title

claim.

WSDOT Claim

         On July 5, 2013, Merceri sent a demand letter to WSDOT asserting violation of

the Hunts Point covenants and restrictions and diminution of the value of her property in

             Slander of title is defined as: (1) false words; (2) maliciously published; (3) with reference to
some pending sale or purchase of property; (4) which go to defeat plaintiff’s title; and (5) result in
plaintiff’s pecuniary loss.” Rorvig V. Douglas, 123 Wn.2d 854, 859, 873 P.2d 492 (1994).

                                                        5
No. 78876-1-116

the amount of $850,000. On July 18, WSDOT offered to pay $375,120 in “just

compensation to the extent the value of your lot is affected by WSDOT’s use of Lots 11

and 12 inconsistent with these covenants and by loss of your right to enforce the

covenants against these two lots.”

        On January 7, 2014, Jones’ attorney Matt Adamson sent a letter to the

bankruptcy trustee’s lawyer Rory Livesey with a copy to Merceri’s attorneys. The letter

asks Livesey whether the WSDOT claim violated the “automatic stay to pursue or

collect any of those proceeds.” The letter states, in pertinent part:

               Jones does not claim any right to equity or proceeds from the
        Merceri/Jones Property, but he is liable for the mortgage on that property,
        and is entitled to a say in how the property, and any proceeds from the
        property, including the condemnation proceeds, are disposed of. For
        example, if Jones and/or the lender pursue these funds, would that violate
        the stay?

Alleged Violation of Bankruptcy Discharge Injunction

        In February 2014, Merceri filed a motion in bankruptcy court alleging Jones and

his attorney Adamson violated the discharge injunction. Merceri alleged, in pertinent

part:

        Jones and/or Adamson has contacted the Washington State Department
        of Transportation, the trustee’s attorney Rory Livesey.  .  ,[] Bank of
                                                                     .

        America,[ a]nd Northwest Trustee Services falsely alleging Merceri is
        attempting to “scam” and “defraud” the trustee, falsely alleging the
        Property is vacant, and encouraging B[ank] of A[merica} and Northwest
        Trustee Services to foreclose.

        Jones’ attorney Adamson filed a declaration denying the allegations. Adamson

states, in pertinent part:

        [M]y letter to Mr. Livesey asks whether it would violate the automatic stay
        if “Jones and/or the lender” pursued those proceeds. Thus, the reference
        is to a pursuit by (1) Jones and the Lender, or (2) just the lender.
                                                                          .   .

                                             6
No. 78876-1 -117

                  Ms. Merceri next claims that I contacted the trustee to collect a
       discharged debt. I did contact the attorney for the trustee to disclose to
       the trustee what I believed to be assets of the estate that were not listed
       on debtor’s schedules, and asked for the trustee’s position on those
       assets.

       In another declaration filed in bankruptcy court, Adamson described a December

2013 communication with the bankruptcy trustee’s attorney:

       In December 2013, I asked the bankruptcy trustee’s attorney whether the
       trustee would seek to undo the December 2012 abandonment of the
       Hunts Point property because undoing the abandonment would terminate
       the quiet title lawsuit.
                              .

                    In December 2013, I called the. attorney for the foreclosure
                                                     .   .

       trustee to pursue an attempt to get the lender to accept a deed in lieu of
       foreclosure from Jones. The hope was that Jones could convey his
       interest to the bank, thus ending both his liability for the mortgage, and
       forcing an end to the quiet title lawsuit —again.

       The bankruptcy court scheduled an evidentiary hearing for after the quiet title trial

in superior court.

Motion To Disqualify Counsel

       On April 10, 2014, Merceri filed a motion in superior court to shorten time to hold

a hearing on her motion to disqualify opposing counsel, continue the quiet title trial, and

engage in additional discovery. Merceri argued that the declarations Adamson filed in

bankruptcy court contradicted his denial “under oath” that he did not make “any

improper contacts.” Merceri asserted Jones and Adamson made false allegations of

fraud against her. Merceri also argued Jones did not supplement his answers to

discovery “regarding complaints of misconduct, including e-mails.”

       In opposition, Jones argued that as a matter of law, any “alleged wrongdoing” by

him or his attorney was “not relevant” to the quiet title action. Jones asserted:

       [D]ocuments regarding allegations of a “scam” or “fraud” do not exist.
                                                                  —

       There are no unproduced non-privileged documents from Mr. Jones, or

                                             7
No. 78876-1 -1/8

                 anyone on his behalf, including Adamson, accusing Merceri or her
                 attorneys of defrauding her creditors or the bankruptcy court.

Jones claimed the communications with the bankruptcy trustee’s attorney are work

product and protected by the common interest doctrine “because they relate to potential

claims in which Jones and the trustee have a common interest.” But Jones notes that “if

the Court thinks” the e-mails with the bankruptcy trustee attorney “might be

discoverable,” he would provide the e-mails to the court for in camera review.

                 In his declaration in opposition to the motion to disqualify, Adamson states that

Merceri and her attorney Susan Fullmer “knew I was accusing them of fraud” in the

bankruptcy because “I wrote it in a brief in this court.” Adamson asserted that “no non-

privileged documents” responsive to discovery exist:

             I will now address the allegation that I hid documents. First, I have no
             non-privileged documents accusing Merceri or her attorneys of fraud or a
             scam except pleadings filed in court and served on them.       .

                         As explained in the response brief, there are a number of
             reasons why I did not disclose my e[-]mails with the other attorneys. I did
             not lie about anything.    .My e[-]mails were created in December 2013.
                                            .   .

             Judge Downing denied the motion to disqualify opposing counsel, continue the

trial date, and engage in additional discovery. Judge Downing reserved ruling on Jones’

motion for imposition of CR 11 sanctions to the trial court.

Trial in Quiet Title Action

             The trial in the quiet title action began on May 6, 2014. Judge Helen Halpert

presided over the two-day bench trial. In his trial brief, Jones asserted the WSDOT

claim is “[o]ne of the reasons, if not the only one, that Ms. Merceri wants Mr. Jones off

title.   .   .   because [WSDOT} owes the property owners at least $375,120 for an inverse

condemnation award arising out of the expansion of Highway 520.” The court ruled the

                                                      8
No. 78876-1-1/9

WSDOT claim was not relevant to whether Merceri was entitled to an order quieting title

to the property in her name.

        Merceri and Jones were the only witnesses who testified at trial. The court

admitted into evidence a number of exhibits. At the conclusion of the trial, Judge

Halpert dismissed “[a]ll of Merceri’s claims brought in this action” with prejudice. The

court rejected Merceri’s request to “compel Jones to execute a quit claim deed to be

held in escrow.” The court ruled Merceri “cannot remove Jones from title until the loan

is repaid or Jones’s liability for the loan is otherwise discharged per their agreement and

because such an order would be inequitable.” On June 6, 2014, Judge Halpert entered

findings of fact and conclusions of law.

       The findings of fact state Merceri “admitted the following facts”:

       a.   Merceri consented to Jones being on title to the property.
       b.   Merceri and Jones have no enforceable contract(s) relating to how or
            when to sell the Property;
       c.   Merceri and Jones have no enforceable contract(s) relating to how or
            when to refinance the mortgage loan.
       d.   Jones never caused the failure of any refinance of the loan.
       e.   Jones has never caused the failure of any sale of the Property.

The court concluded the undisputed facts established Jones “has a legitimate interest in

staying on title until the Loan is repaid in full, or until Jones is otherwise released from

liability by the lender or as a matter of law.”

       On July 7, 2014, Jones filed a motion for attorney fees, CR 11 sanctions, and

entry of a final judgment in the quiet title action.

       On August 20, 2014, the court entered findings of fact, conclusions of law, and

an order on the motion for attorney fees and CR 11 sanctions. The court granted in part

                                                  9
No. 78876-1-1/10

the motion for attorney fees:

       The court determined that an award for the entire amount of fees incurred
       is not appropriate because some fees were incurred in the satellite
       bankruptcy litigation and a substantial number of hours were expended in
       an attempt to resolve the legal issue between the parties through
       mediation and settlement talks. That is, both parties created the need to
       undo an untenable legal relationship, which certainly would have resulted
       in the expenditure of some attorneys’ fees.

       The court ordered Merceri’s attorneys Mark Stern and Susan Fuilmer to pay

$4,000 in CR 11 sanctions for filing the motion to disqualify for the following reasons:

       Ms. Merceri moved to disqualify counsel on one-day’s notice, falsely
       accusing him of being a “tool” for harassment and abuse. It is hard to
       imagine how attorneys can think it is acceptable to move to disqualify
       opposing counsel on one day’s notice, while falsely accusing him of being
       a “tool” for non-intimate partner harassment and abuse.

      The court concluded the quiet title lawsuit was legally and factually baseless:

       1.Merceri’s cause of action for slander of title was legally and factually
         baseless. Merceri’s complaint does not state a claim for slander of
         title because it does not allege any false statements by Jones that
         affect any pending sale. Merceri also failed to present any material
         facts at summary judgment to support her claim. Filing a lawsuit for
         slander without even being able to raise a disputed material fact as to
         a false statement or even a pending sale is baseless.
      2. Merceri’s cause of action for quiet title was legally baseless. The
         material facts were undisputed. Merceri asked Jones to be on title
         and to co-sign the mortgage. They agreed Jones would not pay any
         money toward the house, and she would sell or refinance to get him
         off title. She had no plausible legal argument as to why a party can
         ask another to co-sign a loan and be on title and then sue to remove
         them from title while the loan is outstanding. On the other hand,
         Jones bears some responsibility for creating the situation as he signed
         a lending document falsely claiming he intended to live in the home.

      The court awarded Jones attorney fees and costs in the amount of $20,338. The

court entered a final judgment on August 20, 2014.

      Merceri timely appealed dismissal of the quiet title lawsuit and imposition of CR

11 sanctions.

                                            10
No. 78876-1-I/li

Bankruptcy Court Order Compelling Disclosure of E-Mails

       Two days before the evidentiary hearing in bankruptcy court on June 20, 2014,

Adamson for the first time provided a privilege log of his e-mail communications with the

bankruptcy trustee’s attorney Livesey. The log identifies the e-mails by 11 different

dates between December 7, 2013 and May 5, 2014 where Adamson and Livesey e

mailed each other. With the exception of 2 dates, the privilege log states the

“Nature/Subject Matter” of the e-mails is the WSDOT claim.

       The bankruptcy court ruled that because the “communications with the trustee’s

attorney were not attempts to collect a debt from the debtor,” Jones and Adamson did

not violate the discharge injunction.

       In late 2014, the bankruptcy trustee filed an adversary proceeding against

Merceri, Jones, and the lender to determine whether the WSDOT claim was an asset of

the bankruptcy estate. Merceri propounded discovery and requested production of

documents, including the e-mails between Adamson and the bankruptcy trustee’s

attorney Livesey.

       Livesey forwarded the discovery requests to Adamson, asking, “[W]hich

discovery request calls for the e[-]mails between you and me.” Adamson responded,

“Since this is the third time she has sought these documents, and I dealt with it before, I

will take the first shot at drafting a response.” Adamson sent Livesey a draft response

and privilege log. Adamson told Livesey, “You should create a formal privilege log on

your letterhead or pleading paper from the Word document I sent you.”

                                            ii
No. 78876-1-1/12

       The trustee responded to the discovery requests and provided a privilege log on

March 30, 2015. The trustee claimed the e-mails were not relevant and the e-mails

were privileged and not subject to disclosure.

       Merceri filed a motion to compel. Merceri submitted the privilege log Adamson

prepared for the same e-mails in June 2014. Merceri argued the March 2015 privilege

log contradicted the June 2014 privilege log. In opposition to the motion to compel, the

trustee reiterated the e-mails were not relevant and the e-mails were privileged and not

subject to disclosure. The trustee also states, “This is the third time, in three separate

actions, that debtor has attempted to obtain the same few e[-]mails between counsel for

Shawn Casey Jones and counsel for the trustee. The motion must be denied.”

      At the hearing on the motion to compel, Livesey conceded he did not intend the

e-mail communications with Adamson to be confidential. Livesey admitted Adamson

prepared the response and the March 2015 privilege log:

      [THE COURT:]. [lit did appear that there was some communication and
                        .   .

      assistance from Mr. Adamson in preparing the response, almost complete
      assistance, if I can put it that way.
             MR. LIVESEY: All I did was tone it down.

      The bankruptcy court rejected the argument that the e-mails were not relevant

and that the e-mails were subject to attorney-client, work product, or a common interest

privilege. The court ordered the trustee to produce the e-mails and awarded Merceri

attorney fees and costs under CR 37. The order states, in pertinent part:

             This matter came on regularly for hearing before the above-signed
      Judge of the above entitled court upon Debtor’s Motion for Order
      Compellinq Discovery from Plaintiff Trustee Ron Brown (“the Trustee”).
      The Court considered the records and files herein, including the Trustee’s
      March 2015 privilege log and the June 2014 privilege log prepared by
      attorney Matt Adamson (counsel for defendant Shawn Casey Jones)

                                            12
No. 78876-1-1/13

          regarding the same set of e-mails, and having heard the argument of
          counsel, and deeming itself fully advised, the court finds:

             3.       The Trustee has not produced any responsive documents to
       requests for production #4 and #5; and
             4.       The requested documents are relevant to this adversary
       proceeding; and
             5.       The e-mail messages listed on the Trustee’s privilege log
       ([Docket] # 23-1) are not subject to the attorney-client privilege, the work-
       product privilege, or the common interest privilege; and
             6.       The e-mail messages described in the Trustee’s privilege log
       were not intended to be confidential[.]

              NOW, THEREFORE, it is ORDERED
              8.      That the Trustee and the Trustee’s counsel, Rory Livesey
       (“Livesey”), shall, not later than April 14, 2015 (regardless of when this
       Order is entered), produce to the Debtor, Michelle Catherine Merceri:
                      8.1    all materials responsive to each of the outstanding
              discovery requests, to include each and every record of
              communications between the Trustee and/or his attorney Livesey,
              on the one hand, and Matt Adamson and/or Shawn Casey Jones
              (“Jones”), on the other hand  .   .   including but not limited to
                                                    .   ,

                             8.1.1. e-mail messages; and
                             8.1.2. billing records of phone conversations.~2~

      The trustee produced approximately 80 e-mails between Adamson and Livesey

from December 7, 2013 through April 9, 2015. In the December 7, 2013 e-mail,

Adamson accused Merceri of not disclosing the WSDOT claim in the bankruptcy

proceeding and filing the quiet title action in order to obtain payment for the WSDOT

claim. Adamson urged Livesey to “get the abandonment undone” and pursue the

WSDOT claim. The e-mail states, in pertinent part:

      Because Jones is on title, [Merceri] cannot get the money unless he gives
      up his interest. Thus, the motive for the quiet title action.
                                                                  .   .

      I believe that an abandonment can be undone if the debtor failed to
      disclose a claim affecting the issue. See attached cases as some
      examples.

      2   Emphasis in original.

                                                13
No. 78876-1-1/14

        I do recognize that the lender with the deed of trust on the property will
        likely make a claim to the proceeds (they are currently unaware of the
        claim), and that maybe the proceeds would not benefit the estate, but only
        the one secured creditor.     In any event, if the claim is large enough,
                                       .   .   .

        and with the increase in the value of the property, if the abandonment was
        reversed, the proceeds from the claim plus from a sale could be sufficient
        to pay the secured claims in full.

        It would obviously benefit Jones if the property (residence and the claim)
        went back into the estate as the state court quiet title case would be
        dismissed if the property reverted to the trustee, and perhaps Jones would
        also get the $15,000 that the Court order said he would be paid from the
        proceeds of the Hunts Point property.

        Shortly after producing the e-mails, the trustee dismissed the adversary

proceeding.

Court of Appeals Decision in Merceri v. Jones

        On March 21, 2016, we affirmed dismissal of the quiet title action and the

decision to impose CR 11 sanctions. Merceri, No. 72615-3-I, slip op. at 1. We

concluded the admitted and unchallenged findings supported dismissal of the quiet title

action with prejudice. Merceri, No. 72615-3-I, slip op. at 9-10, 16. We concluded the

unchallenged facts supported imposition of CR 11 sanctions:

        Merceri does not dispute the facts underlying that conclusion either: that
        she moved to disqualify Adamson on only one day’s notice, accusing him
        of being a “tool” for non intimate partner harassment and abuse because
        he attempted to negotiate a deed in lieu of foreclosure that would have
        brought an end to this lawsuit.

Merceri, No. 72615-3-I, slip op. at 14. The mandate issued on May 6, 2016.~

       ~ In April 2016, the Washington State Bar Association (WSBA) Office of Disciplinary Counsel
opened an investigation and on August 23, 2016, Jones filed a bar complaint against Merceri’s attorneys.
The WSBA dismissed the complaint on November 7, 2017.

                                                   14
No. 78876-1-1/15

Motion To Vacate Judgment in Quiet Title Action

       On December 1,2017, Merceri filed a motion under CR 60(b)(4) and (11)to

vacate the order denying her motion to disqualify the award of CR 11 sanctions and

entry of the judgment in the quiet title action. Merceri argued Jones and Adamson

improperly withheld and misrepresented the e-mails between Adamson and the

bankruptcy trustee’s attorney Livesey were privileged. Merceri argued the

misrepresentations were material to the decision to deny the motion to disqualify the

award of CR 11 sanctions and entry of the summary judgment order dismissing the

slander of title claim and the judgment in the quiet title action.

       Jones filed a response in opposition to the motion to vacate. Jones asserted

Adamson disclosed the existence of the e-mails and the e-mails were privileged and not

subject to discovery. Jones notes that he offered to submit the e-mails to the court in

camera review.

       Jones filed a motion to impose CR 11 sanctions against Merceri and her attorney

for filing the motion to vacate. Jones submitted extensive proposed findings of fact,

conclusions of law, and an order awarding attorney fees as CR 11 sanctions. Jones

noted the CR 11 motion for the same day as the motion to vacate.

       Merceri filed a motion to continue the hearing on the motion for CR 11 sanctions.

Merceri argued the court should rule on the motion to vacate before considering the

request to impose CR 11 sanctions. Jones opposed the motion to continue the hearing.

Jones argued the motion to vacate was “related” to the motion for CR 11 sanctions and

his “motion is based on the fact that the existence of the e[-}mails was disclosed and

thus Merceri’s single foundational fact alleged in support of her motion is demonstrably

                                              15
No. 78876-1-1116

false.” Judge Ken Schubert denied the motion to continue the hearing on the CR 11

motion.

        Merceri filed a sealed brief and her attorney filed a sealed declaration in

opposition to the motion to impose CR 11 sanctions for filing the motion to vacate.

Merceri also submitted the declarations of two other attorneys in opposition to

imposition of CR 11 sanctions for filing the motion to vacate.

        The lengthy March 9, 2018 hearing focused exclusively on the CR 60(b) motion

to vacate. At the conclusion of the hearing, the court reserved ruling on the motion to

impose CR 11 sanctions and entered an order denying the motion to vacate.

Order Denying Motion for Reconsideration and Awarding CR 11 Sanctions

       On March 19, 2018, Merceri filed a motion for reconsideration under CR 59(a)(1)

(irregularity in the proceedings), CR 59(a)(3) (surprise which ordinary prudence could

not guard against), and CR 59(a)(7) (decision not supported by evidence or is contrary

to law). Merceri argued that she requested and the case law required the court to

conduct an evidentiary hearing. Merceri asserted the decision to deny her motion to

vacate was not supported by the record and was contrary to law. Merceri argued Jones

violated CR 26 by not responding to the discovery requests and improperly claiming

privilege.

       On July 2, 2018, the court entered the “Order Denying Plaintiff’s Motion for

Reconsideration.” The order states, “Due to the length of the hearing, the Court did not

have time to orally provide the basis for its ruling. Accordingly, the Court does so here.”

The court rejected Merceri’s argument that she filed the CR 60(b) motion to vacate

within a reasonable time after the mandate issued on May 6, 2016. The court

                                             16
No. 78876-1-1117

concluded Merceri “had not brought her motion for relief under CR 60(b)(4) and (11)

within a reasonable time based on the 32 months it took her to bring her motion” after

obtaining copies of the e-mails between Adamson and Livesey in April 2015. The court

also cited RAP 7.2(e) to state Merceri “did not need to wait for the resolution of her

appeal” before filing the motion to vacate under CR 60(b)(4) and (11). “[T]he Rules of

Appellate procedure allowed plaintiff to bring a motion for reconsideration pursuant to

CR 60 during the pendency of her appeal.” The court also rejected “the desire to wait

for the outcome of a bar complaint” as a reason to delay filing the motion to vacate.

“This Court does not find that rationale persuasive.”

           The court also concluded Merceri did not establish by clear, cogent, and

convincing evidence misrepresentation or misconduct that “led to the entry of the orders

at issue.” The court found prejudice “due to the fact that in the intervening time between

April 2015 and December 2017,” Judge Halpert had recused and Judge Downing had

retired.

           On the same day and without modification, the court entered the proposed

“Findings of Fact, Conclusions of Law, and Order Granting Defendant’s Motion for Fees

and Sanctions” previously submitted by Jones. The court ordered Merceri and her

attorney Fuilmer to pay attorney fees and costs of $26,820 as CR 11 sanctions for filing

the motion to vacate.

Appeal of Denial of Motion To Vacate and Award of CR 11 Sanctions

           Merceri appeals (1) denial of the CR 60(b)(4) motion to vacate the judgment in

the quiet title action,4 (2) denial of her motion for reconsideration, and (3) the decision to

       ~ on appeal, Merceri does not challenge the CR 60(b)(1 1) ruling.

                                                  17
No. 78876-1-1118

impose CR 11 sanctions for filing the CR 60(b) motion to vacate.5

        Standard of Review

        We review the decision on a CR 60(b)(4) motion to vacate and denial of the

motion for reconsideration for manifest abuse of discretion. Jones v. City of Seattle,

179 Wn.2d 322, 360, 314 P.3d 380 (2013); Haley v. Highland, 142 Wn.2d 135, 156, 12

P.3d 119 (2000); Martiniv. Post, 178 Wn. App. 153, 161, 313 P.3d 473 (2013). We

review the decision of a trial court to impose CR 11 sanctions for an abuse of discretion.

Biggs v. Vail, 124 Wn.2d 193, 197, 876 P.2d 448 (1994); In re Recall of Lindguist, 172

Wn.2d 120, 141, 258 P.3d 9(2011).

        A court abuses its discretion “only if there is a clear showing” that the decision is

manifestly unreasonable or based on untenable grounds or untenable reasons.

Moreman v. Butcher, 126 Wn.2d 36, 40, 891 P.2d 725 (1995). A discretionary decision

is based on untenable grounds or untenable reasons if the trial court “relies on

unsupported facts or applies the wrong legal standard.” Mayer v. Sto Indus., Inc., 156

Wn.2d 677, 684, 132 P.3d 115 (2006). A decision is manifestly unreasonable if” ‘the

court, despite applying the correct legal standard to the supported facts, adopts a view

that no reasonable person would take.’” Mayer, 156 Wn.2d at 6846 (quoting State v.

Rohrich, 149 Wn.2d 647, 654, 71 P.3d 638 (2003)). Although the court’s discretion may

result in a decision upon which reasonable minds may differ, it must be upheld if it “is

within the bounds of reasonableness.” Lindgren v. Lindgren, 58 Wn. App. 588, 595, 794

P.2d 526 (1990).

        ~ Merceri filed a motion to strike portions of the response brief. Because Merceri had the
opportunity to file a reply brief, we deny the motion to strike. Engstrom v. Goodman, 166 Wn. App. 905,
909 n.2, 271 P.3d 959 (2012); Prostov v. Dept of Licensing, 186 Wn. App. 795, 824 n.26, 349 P.3d 874
(2015).
        6 Internal quotation marks omitted.

                                                    18
No. 78876-1 -1119

       We review a trial court’s findings for substantial evidence. Sunnyside Valley Irrig.

Dist. v. Dickie, 149 Wn.2d 873, 879, 73 P.3d 369 (2003). Substantial evidence is the

quantum of evidence sufficient to persuade a rational fair-minded person the premise is

true. Sunnyside, 149 Wn.2d at 879.

       Evidentiarv Hearing on Motion To Vacate

       Merceri contends the court erred in denying her request for an evidentiary

hearing on the motion to vacate. Merceri cites CR 60(e) and In re Marriage of Maddix,

41 Wn. App. 248, 703 P.2d 1062 (1985), to argue the court must conduct an evidentiary

hearing when facts are in dispute.

       Under CR 60(e)(1), a motion to vacate a judgment shall identify the grounds for

relief and the party must submit an affidavit identifying the facts or errors in support of

the motion. CR 60(e)(2) provides:

       [T]he court shall enter an order fixing the time and place of the hearing
       thereof and directing all parties to the action or proceeding who may be
       affected thereby to appear and show cause why the relief asked for should
       not be granted.

       In Maddix, Division Three concluded that because the affidavits of the parties

“raise an issue of fact which cannot be resolved without the taking of testimony,” the

court “erred in vacating the judgment without first hearing and weighing testimony

regarding fraud, misrepresentation or other misconduct.” Maddix, 41 Wn. App. at 252.

       In In re Marriage of Irwin, 64 Wn. App. 38, 61, 822 P.2d 797 (1992), we held the

decision to allow testimony at a hearing “is not the general rule and is discretionary.”

We concluded, “[Njone of the authorities cited by the Maddix court” and “nothing in CR

60(e)(2) appears to indicate that live testimony is required.” Irwin, 64 Wn. App. at 61.

                                             19
No. 78876-1-1/20

We adhere to our decision in Irwin and conclude the court did not abuse its discretion in

denying Merceri’s request for an evidentiary hearing.7

        Due Process

        Merceri contends denial of her motion to continue the hearing on CR 11

sanctions violated her right to due process. Due process requires notice and the

opportunity to be heard before the court imposes CR 11 sanctions. See Bryant v.

Joseph Tree, Inc., 119 Wn.2d 210, 224, 829 P.2d 1099 (1992). The uncontroverted

record establishes Merceri and her attorney had notice and the opportunity to respond

to the request for CR 11 sanctions.

        CR 60(b)(4) Motion To Vacate

        CR 60(b)(4) permits relief from an order or judgment for “[f]raud (whether

heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of

an adverse party.” “The rule is aimed at judgments which were unfairly obtained, not at

those which are factually incorrect.” Peoples State Bank v. Hickey, 55 Wn. App. 367,

372, 777 P.2d 1056 (1989). A party has the burden to show by clear, cogent, and

convincing evidence that the adverse party obtained a judgment or order through fraud,

misrepresentation, or misconduct. Hickey, 55 Wn. App. at 371-72. The fraud,

misrepresentation, or misconduct “must cause the entry of the judgment such that the

losing party was prevented from fully and fairly presenting its case or defense.”

Lindciren, 58 Wn. App. at 596.~

        ‘ We note Merceri made the request for the first time in her reply brief and did not raise the
request during the lengthy hearing.
        8 Emphasis in original.

                                                     20
No. 78876-1-1/21

       A party must file a CR 60(b)(4) motion within a reasonable time. CR 60(b);

Luckett v. Boeing Co., 98 Wn. App. 307, 311, 989 P.2d 1144 (1999). The ‘reasonable

time” requirement depends on the facts and circumstances of each case. Luckett, 98

Wn. App. at 312. The determination of whether a party files a motion to vacate a

judgment or order within a reasonable time is the critical period between when the

moving party became aware of the judgment and the filing of the motion. Luckett, 98

Wn. App. at 312. Major considerations in determining timeliness are (1) whether the

moving party has good reasons for failing to take appropriate action sooner and (2)

prejudice to the nonmoving party from the delay. Luckett, 98 Wn. App. at 312.

       Here, the undisputed record establishes the court entered the final judgment in

the quiet title action on August 20, 2014 and Merceri timely filed an appeal. In April

2015, the bankruptcy court rejected the claim of privilege and ordered the trustee to

produce the e-mails between Jones’ attorney Adamson and the bankruptcy trustee’s

attorney Livesey. We filed the opinion in Merceri, No. 72615-3-I, on March 21, 2016.

The mandate issued on May 6, 2016. Merceri did not file the CR 60(b)(4) motion to

vacate until December 1, 2017.

       Merceri cites Tatham v. Rogers, 170 Wn. App. 76, 283 P.3d 583 (2012), to argue

it was reasonable to wait until the mandate issued before filing the CR 60(b)(4) motion

to vacate. Tatham is distinguishable. In Tatham, we concluded a nine-month delay

between hiring a private investigator and filing the CR 60(b) motion to vacate was

reasonable because:

       [The appellant] had already moved for reconsideration and filed his notice
       of appeal before he learned of the grounds for the posttrial motion; it was

                                            21
No. 78876-1-1122

       already clear to [the respondent] that she could not be sure of the finality
       of the trial court’s disposition until the appeal was concluded.

Tatham, 170 Wn. App. at 98-99.

       Merceri also cites Federal Rule of Civil Procedure (FRCP) 60 to argue she filed

the CR 60(b)(4) motion to vacate within a reasonable time. FRCP 60(b) does not

support her argument. FRCP 60(b) mirrors CR 60(b) and allows the court to grant relief

from judgment for “fraud (whether previously called intrinsic or extrinsic),

misrepresentation, or misconduct by an opposing party.” FRCP 60(b)(3). However,

unlike CR 60(b), FRCP 60(c)(1) requires a party to file a motion to vacate under FRCP

60(b)(3) “no more than a year after the entry of the judgment.” FRCP 60(c)(1) states,

‘Timing. A motion under Rule 60(b) must be made within a reasonable time—and for

reasons (1), (2), and (3) no more than a year after the entry of the judgment or order or

the date of the proceeding.”9

       We conclude the court did not abuse its discretion in concluding that filing the CR

60(b)(4) motion to vacate more than 18 months after the mandate issued was not

reasonable. RAP 7.2(e)(2) supports the court’s finding that Merceri could have filed the

motion to vacate in superior court while the appeal was pending.1° The court also did

not abuse its discretion in rejecting the argument that it was reasonable to wait until the

bar complaint against her attorney was resolved before filing the motion to vacate. And

       ~ Emphasis in original.
       10   RAP 7.2(e)(2) states, in pertinent part:
       The trial court has authority to hear and determine. actions to change or modify a
                                                             .   .

       decision that is subject to modification by the court that initially made the decision. The
       postjudgment motion or action shall first be heard by the trial court, which shall decide the
       matter. If the trial court determination will change a decision then being reviewed by the
       appellate court, the permission of the appellate court must be obtained prior to the formal
       entry of the trial court decision. A party should seek the required permission by motion.

                                                       22
No. 78876-1-1/23

the record supports finding prejudice to the nonmoving party by waiting until December

1 2017 to file the motion to vacate.

       CR 11 Sanctions

       Merceri contends the findings of fact and conclusions of law do not support

imposition of CR 11 sanctions against her and her attorney for filing the CR 60(b)(4)

motion to vacate.

      CR 11(a) provides, in pertinent part:

      Every pleading, motion, and legal memorandum         .   shall be dated and
                                                               .   .

      signed         The signature of a party or of an attorney constitutes a
                     .   .   .   .

      certificate by the party or attorney that the party or attorney has read the
      pleading, motion, or legal memorandum, and that to the best of the party’s
      or attorney’s knowledge, information, and belief, formed after an inquiry
      reasonable under the circumstances: (1) it is well grounded in fact; (2) it is
      warranted by existing law or a good faith argument for the extension,
      modification, or reversal of existing law or the establishment of new law;
       •   .and (4)
               .         [i]f a pleading, motion, or legal memorandum is signed in
                                     .   .   .   .

      violation of this rule, the court, upon motion or upon its own initiative, may
      impose upon the person who signed it, a represented party, or both, an
      appropriate sanction, which may include an order to pay to the other party
      or parties the amount of the reasonable expenses incurred because of the
      filing of the pleading, motion, or legal memorandum, including a
      reasonable attorney fee.

      “The purpose behind CR 11 is to deter baseless filings and to curb abuses of the

judicial system.” Bryant, 119 Wn.2d at 219.11 “CR 11 is not meant to act as a fee

shifting mechanism, but rather as a deterrent.” MacDonald v. Ford, 80 Wn. App. 877,

891, 912 P.2d 1052 (1996).

      A filing is baseless if it is not well grounded in fact, existing law, or a good faith

argument for the extension of existing law. Hicks v. Edwards, 75 Wn. App. 156, 162-63,

      11       Emphasis in original.

                                                     23
No. 78876-1 -1/24

876 P.2d 953 (1994). But even a baseless filing is not subject to CR 11 sanctions

unless the trial court also finds that the attorney who signed and filed the pleading,

motion, or legal memorandum failed to conduct a reasonable inquiry into the factual and

legal basis for the filing. Bryant, 119 Wn.2d at 220; MacDonald, 80 Wn. App. at 884.

The court must evaluate an attorney’s conduct under an objective reasonableness

standard by asking whether a reasonable attorney in similar circumstances would

believe that the attorney’s actions were factually and legally justified. Bryant, 119

Wn.2d at 220-21.

       Substantial evidence supports the CR 11 finding that there was no factual or

legal “basis for the delay” in filing the CR 60(b)(4) motion to vacate the August 20, 2014

judgment entered in the quiet title action. Under an objective standard of

reasonableness, filing the motion to vacate 32 months after obtaining the e-mails and

more than 18 months after the mandate issued was not factually and legally justified.

But because many of the other findings of fact and conclusions of law are not supported

by the record or the correct legal standard, we remand to reconsider the amount of CR

11 sanctions. For example, the findings emphasize that Jones and Adamson disclosed

the existence of the e-mails to Merceri. But the findings ignore the failure to respond to

the discovery requests and produce the e-mails. A discovery violation óan constitute

misconduct for purposes of CR 60(b)(4). Roberson v. Perez, 123 Wn. App. 320, 332-

33, 96 P.3d 420 (2004).

       CR 26 allows broad discovery. Maqaña v. Hyundai Motor Am., 167 Wn.2d 570,

584, 220 P.3d 191 (2009). CR 26(b)(1) provides, in pertinent part:

       Parties may obtain discovery regarding any matter, not privileged, which is
       relevant to the subject matter involved in the pending action, whether it

                                            24
No. 78876-1-1/25

       relates to the claim or defense of the party seeking discovery or to the
       claim or defense of any other party, including the existence, description,
       nature, custody, condition and location of any books, documents, or other
       tangible things and the identity and location of persons having knowledge
       of any discoverable matter. It is not ground for objection that the
       information sought will be inadmissible at the trial if the information sought
       appears reasonably calculated to lead to the discovery of admissible
       evidence.

       “A party must answer or object to an interrogatory or a request for production.”

Maqaña, 167 Wn.2d at 584; CR 26(b)(1). If the party does not seek a protective order,

then the party must respond to the discovery request. CR 37(d); Maqana, 167 Wn.2d at

584. “It is not ground for objection that the information sought will be inadmissible at the

trial if the information sought appears reasonably calculated to lead to the discovery of

admissible evidence.” CR 26(b)(1).

      The record establishes the e-mails were relevant and responsive to the discovery

requests that included a request to supplement and provide a privilege log. The

uncontroverted record shows Jones did not supplement the answers to interrogatories

and requests for production by claiming privilege and providing a privilege log. Contrary

to the findings, a claim of privilege is determined on a case-by-case basis and the

burden of showing the privilege applies falls on Jones as the party asserting the

privilege. VersusLaw, Inc. v. Stoel Rives, LLP, 127 Wn. App. 309, 332, 111 P.3d 866

(2005). The bankruptcy court ruled the same assertion of privilege was without merit

and baseless. The findings of fact and conclusions of law also heavily rely on the CR

11 sanctions imposed in the quiet title action. In Biggs, the Washington Supreme Court

notes that imposition of a previous CR 11 sanction is “presumptively unreasonable.”

Bicjc~s, 124 Wn.2d at 202 n.3.

                                             25
No. 78876-1 -1/26

        “In deciding upon a sanction, the trial court should impose the least severe

sanction necessary to carry out the purpose of the rule.” Biggs, 124 Wn.2d at 197.

“Should a court decide that the appropriate sanction under CR 11 is an award of

attorney fees, it must limit those fees to the amounts reasonably expended in

responding to the sanctionable filings.” Bicicis, 124 Wn.2d at 201. Justification for

imposition of CR 11 sanctions “‘must correspond to the amount, type, and effect of the

sanction applied.’” MacDonald, 80 Wn. App. at 892 (quoting Thomas v. Capital Sec.

Servs., Inc., 836 F.2d 866, 883 (5th Cir. 1988)). On remand, the court shall reconsider

the amount of CR 11 sanctions.12

Attorney Fees on Appeal

        Jones requests attorney fees on appeal under RAP 18.9(a). RAP 18.9(a) allows

this court to award attorney fees for frivolous appeals. An appeal is frivolous when in

consideration of the entire record, there are no debatable issues over which reasonable

minds could differ and the appeal “is so devoid of merit that there is no possibility of

reversal.” Advocates for Responsible Dev. v. W. Wash. Growth Mqmt. Hr’cis Bd., 170

Wn.2d 577, 580, 245 P.3d 764 (2010). Because Merceri raises debatable issues, we

decline to award attorney fees on appeal.

        We affirm the decision to deny the CR 60(b)(4) motion to vacate on the grounds

that the motion was not filed within a reasonable time. We conclude the court did not

        12 We reject Merceri’s request to remand to a different judge. “The test for determining whether
the judge’s impartiality might reasonably be questioned is an objective test that assumes a reasonable
observer knows and understands all the relevant facts.” State v. Solis-Diaz, 187 Wn.2d 535, 540, 387
P.3d 703 (2017). The record does not show either actual or potential bias. Solis-Diaz, 187 Wn.2d at 540.

                                                  26
No. 78876-1-1/27

abuse its discretion by imposing CR 11 sanctions but remand to reconsider the amount

of CR 11 sanctions.

WE CONCUR:

   ~
           /                                                 .~≤:~Ih   ~

           10

       *  The Washington Supreme Court has appointed Judge Schindler to serve as a judge pro
tern pore pursuant to RCW 2.06.150.

                                                27