Court Opinion

ID: 2820661
Source: CourtListenerOpinion
Date Created: 2015-07-27 22:06:52.479394+00
Date Added: 2024-06-11T11:30:57.623357
License: Public Domain

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

TERRI BLOCK, as guardian of SARAH                   No. 71742-1-1
BLOCK,
                                                    DIVISION ONE
                    Appellant,

             v.

THE LAW OFFICES OF BEN F.                           UNPUBLISHED
BARCUS & ASSOCIATES, PLLC, a
Washington professional limited liability           FILED: July 27, 2015
company; BEN F. BARCUS and JANE
DOE BARCUS, individually and the
marital community comprised thereof;
LEGGETT & KRAM, a Washington
partnership; PETER KRAM and JANE
DOE KRAM, individually and the marital
community comprised thereof,

                     Respondents.

       Cox, J. — Terri Block appeals the summary judgment dismissal of her

claims for breach of fiduciary duty and legal malpractice against Ben F. Barcus,

Peter Kram, their respective marital communities, and the respective law firms

with which each lawyer is associated. Her claims accrued more than three years

before she commenced this action. The applicable statutes of limitations were

not tolled. And there are no genuine issues of material fact regarding her

equitable tolling and estoppel claims. We affirm.
No. 71742-1-1/2

       Terri Block brought this action as the guardian of her daughter Sarah

Block. Sarah1 was severely injured in a September 12, 2005 car accident. That

same month, Terri entered into a fee agreement with Ben Barcus and his law firm

(collectively "Barcus") to represent Sarah in litigation related to her car accident.

Later that same month, Terri also entered into a fee agreement with Peter Kram

and his law firm (collectively "Kram") to serve as the attorney for Sarah's

guardianship. Barcus introduced Kram to Block.

       By December 2005, Barcus obtained substantial settlements on Sarah's

behalf from uninsured motorist claims against an insurer. In March 2006, the trial

court entered an order approving a petition for disbursement of fees from the

settlement fund. Early the following month, fees were disbursed to counsel

based on this order.

       Over seven years later, on May 3, 2013, Block commenced this action.

She alleged four main claims. First, she sought to void the 2005 fee agreement

with Barcus on the basis that he allegedly breached fiduciary duties to Sarah.

Second, she sought a determination of the reasonableness of the attorney fees

paid to Barcus in 2006. Third, she sought forfeiture or disgorgement of fees

based on alleged misconduct of Barcus and Kram. Fourth, she claimed legal

malpractice based on Kram's alleged negligence in representation.

       Both Barcus and Kram moved for summary judgment dismissal on statute

of limitations grounds. The court granted their motions and dismissed Block's

claims in their entirety. The court also denied Block's motion for reconsideration.

       Block appeals.

       1 Due to the similarity in names, we use first names for clarity.
                                               2
No. 71742-1-1/3

                             STATUTES OF LIMITATIONS

          Block argues that the trial court applied the wrong statutes of limitations to

her claims. We disagree.

       Summary judgment is appropriate when no genuine issue of material fact

exists and the moving party is entitled to judgment as a matter of law.2 When

reviewing a summary judgment decision, the court looks at the facts in the light

most favorable to the non-moving party.3

       This court reviews de novo a grant of summary judgment.4 This court also

reviews de novo whether a statute of limitations bars a claim.5

                              Block's First and Third Claims

          Block argues that a six-year statute of limitations applies to her first and

third claims. She is wrong.

          Claims against an attorney for breach of fiduciary duty fall under RCW

4.16.080's three-year statute of limitations.6

          Block's first and third claims are for breach of fiduciary duty.

      2 Camicia v. Howard S. Wright Constr. Co., 179 Wn.2d 684, 693, 317 P.3d
987(2014).

          3 Ruvalcaba v. Kwanq Ho Baek. 175Wn.2d 1, 6, 282 P.3d 1083 (2012).

          4 Camicia, 179 Wn.2d at 693.

          5 Bennett v. Computer Task Grp.. Inc.. 112 Wn. App. 102, 106, 47 P.3d 594
(2002).

          6 Mervhew v. Gillinqham. 77 Wn. App. 752, 755, 893 P.2d 692 (1995).
No. 71742-1-1/4

       Block's complaint labels her first claim as a claim for "voiding the

contingency fee agreement" entered into with Barcus.7 Her complaint alleges

that Barcus and Kram owed her fiduciary duties, including duties to disclose

conflicts of interests. She alleges that Barcus and Kram violated their "duties of

disclosure to [Block] as required by RPC [Rules of Professional Conduct] 1.4 and

1.5."8 She also alleges that Barcus and Kram violated RPCs 1.7 and 1.8. Based

on these violations, Block seeks to void her fee agreement with Barcus.

       Because Block's claim is based on alleged violations of fiduciary and

ethical duties, it is a claim for breach of fiduciary duty. This court has recognized

that a trial court may "properly consider[] the RPCs to determine whether [an

attorney] breached his fiduciary duty."9 But the relevant cause of action is for

breach of fiduciary duty, not for violation of the RPCs. The fact that Block seeks

voiding of the fee agreement as a remedy does not transform her breach of

fiduciary duty claim into something else. Accordingly, the three-year statute of

limitations for breach of fiduciary duty applies to this claim.

       Block's complaint labels her third claim as one for disgorgement of fees.

She alleges that Barcus and Kram violated multiple RPCs, and seeks

disgorgement of fees on that basis.

        This claim, like Block's first claim, is for a breach of fiduciary duties.

"Under Washington law, disgorgement of fees is a remedy"—not a cause of

       7 Clerk's Papers at 11.

       8 id, at 12.

       9 Cotton v. Kronenberq. 111 Wn. App. 258, 266, 44 P.3d 878 (2002).
No. 71742-1-1/5

action.10 And it is clear that her cause of action sounds in the alleged breach of

fiduciary duties under the RPCs. Thus, Block's characterization of this claim as

something other than a remedy is unpersuasive. Because Block seeks

disgorgement as "sanctions for breaches of fiduciary duty," the three-year statute

of limitations for breach of fiduciary duty applies.

       Here, the order approving the disbursement of funds to pay fees was

entered in March 2006. That is when these claims accrued for purposes of the

three-year statute. Yet, she did not commence this action until May 2013. Thus,

Block's claims are barred as untimely.

       Block argues that a six-year statute of limitations applies to her first and

third claims because they are based on the breach of a written contract. Under

RCW 4.16.040(1), parties have six years to commence "[a]n action upon a

contract in writing, or liability express or implied arising out of a written

agreement." But this statute does not apply to Block's claims.

       This court has stated that RCW 4.16.040 applies to "liabilities which are

either expressly stated in a written agreement or which follow by natural and

reasonable implication from the promissory language of the agreement, as

distinguished from liabilities created by fictional processes of the law or imported

into the agreement from some external source."11

       10 Bertelsen v. Harris, 537 F.3d 1047, 1057 (9th Cir. 2008) (emphasis added).

       11 Davis v. Davis Wright Tremaine. LLP, 103 Wn. App. 638, 651, 14 P.3d 146
(2000) (quoting Bicknell v. Garrett, 1 Wn.2d 564, 570-71, 96 P.2d. 592 (1939)).
No. 71742-1-1/6

       In this case, the "contractual terms" that Barcus allegedly violated do not

come from the terms of the fee agreement. Rather, as pleaded, they come from

an external source—the RPCs.

       Block argues that RPC 1.5's prohibition on charging an unreasonable fee

is "implied in literally every attorney's fee agreement in Washington."12 But even

if we believed that Block is correct, which we do not, the RPCs would be terms

"imported into the agreement from some external source."13 Thus, a claim for the

violations of the RPCs would not fall under the six-year statute of limitations.

       Additionally, the RPCs apply to all attorney-client relationships, regardless

of whether the attorney and client have a written contract.14 RCW 4.16.040

applies specifically to claims arising from written agreements.15 For these

reasons, this argument is unpersuasive.

       Block also argues that her claims were timely under the continuous

representation rule. Under this rule, clients' claims against their attorneys are

tolled "during the lawyer's representation of the client in the same matter from

which the malpractice claim arose."16 But even if Block's argument were correct,

which it is not, her claims would still be untimely under a three-year statute of

limitations because more than three years passed between the end of Barcus's

       12BriefofAppellantat26.

       13 Davis. 103 Wn. App. at 651.

       14 See RPC Scope [17].

       15 RCW 4.16.040.

       16 Janicki Logging & Const. Co. v. Schwabe. Williamson & Wvatt. P.C.. 109
Wn. App. 655, 664, 37 P.3d 309 (2001).

                                             6
No. 71742-1-1/7

representation and when Block commenced her suit. Barcus sent Block a letter

withdrawing from her representation on July 29, 2008. Block did not commence

her suit until May 2013. Thus, we do not consider this argument any further.

                                  Block's Second Claim

       Block's second claim is for a "determination of reasonableness of attorney

fees under quantum meruit."17 This claim is dependent upon the voiding of the

fee agreement under the Block's first claim. Block alleges that "[w]ith the voiding

of the Barcus contingency fee agreement, Barcus' remedy for compensation is

under the doctrine of quantum meruit."18 Because Block's first claim is time-

barred, we need not address her request for a determination of reasonable

attorney fees.

       Additionally, to the extent that Block challenges the reasonableness of

Barcus's fees, RCW 4.24.005 bars her claim.

       Under RCW 4.24.005, a party has 45 days to challenge the

reasonableness of attorney fees in a tort case. That statute reads: "Any party

charged with the payment of attorney's fees in any tort action may petition the

court not later than forty-five days of receipt of a final billing or accounting for a

determination of the reasonableness of that party's attorneys' fees."19 This court

       17 Clerk's Papers at 13.

       18 id,

       19 RCW 4.24.005.
No. 71742-1-1/8

has held that this statute functions as a 45 day statute of limitations on claims

that an attorney charged an unreasonable fee.20

        In this case, the guardianship court approved the fees Barcus and Kram

received in an order entered March 31, 2006. At this time, Barcus presented an

accounting of the fees and costs it charged, and the fees it paid to others,

including Kram. But Block did not commence this action until May 2013, over

seven years later. Thus, she failed to timely challenge the reasonableness of the

fees.

                                 Block's Fourth Claim

        Block argues that the court incorrectly determined that her legal

malpractice claim against Kram was barred by the three-year statute of

limitations for legal malpractice. We disagree.

        "In Washington, the statute of limitations period for a legal malpractice

claim is three years."21 This period begins to run "when the plaintiff has a right to

seek legal relief," meaning that the plaintiff "know[s] the facts that give rise to that

cause of action."22

        One element of legal malpractice is an attorney-client relationship.23

        20 Barrett v. Freise. 119 Wn. App. 823, 848-50, 82 P.3d 1179 (2003).

       21 Cawdrev v. Hanson Baker Ludlow Drumheller. P.S.. 129 Wn. App. 810,
816, 120 P.3d 605 (2005).

        22 id, at 816-17.

        23 Schmidt v.Coogan. 181 Wn.2d 661, 665, 335 P.3d 424 (2014).

                                               8
No. 71742-1-1/9

Generally, the attorney-client relationship ends if the client hires a new attorney.24
       Here, Block's fourth claim for relief expressly states that it is for legal

malpractice. She acknowledges that this claim is subject to a three-year statute
of limitations.

       It is undisputed that Block replaced Kram with another attorney in 2008.

After that point, Kram no longer had an attorney-client relationship with Block.

Thus, after that point, Kram could no longer commit legal malpractice.

Accordingly, the statute of limitations began to run in November 2008, at the

latest. Because Block did not commence this action until 2013, she failed to

timely bring this malpractice claim.

       Block argues that her claim against Kram was timely for two reasons.

First, Block argues that the statute of limitations began to run in February 2012,

when Kram filed a declaration in court opposing Block's suit against Barcus. In

the alternative, Block argues that the statute of limitations began to run in

November 2011, when Kram provided a copy of Block's file to Block's new

attorney. Neither argument is persuasive.

       Block relies on RPC 1.9 to argue that Kram committed malpractice in

2012. That rule sets forth the duties that lawyers owe to former clients.25 This

argument fails for two reasons.

       2416 David K. DeWolf & Keller W. Allen, Washington Practice: Tort Law
And Practice § 16:29 at 719 (4th ed. 2013).

       25 RPC 1.9.
No. 71742-1-1/10

       First, Washington's RPCs state that "principles of substantive law external

to these Rules determine whether a client-lawyer relationship exists."26 Thus,

Block cannot use an RPC to establish that she still had an attorney-client

relationship with Kram. Accordingly, her attorney-client relationship with Kram

ended in 2008, when she hired substitute counsel.

       Second, our RPCs state that a "[violation of a [RPC] should not itself give

rise to a cause of action against a lawyer nor should it create any presumption in

such a case that a legal duty has been breached."27 Thus, Block also cannot rely

on a violation of the RPCs as a cause of action against Kram.

       Block also argues that the statute of limitations on her claim did not begin

to run until November 2011. Block argues that Kram refused to provide Block his

file on her case until that date. But Block's citation to the record demonstrates

only that he refused to provide her a copy at his expenses, under the terms of

their retainer agreement. He offered to allow her to look over the case file or to

make a copy at her expenses. Thus, this argument is unpersuasive.

                                     TOLLING

       Block next argues that the statutes of limitations on all of her claims were

tolled under various doctrines. We disagree with all of her arguments.

                                  RCW 4.16.190

       Block argues that RCW 4.16.190 indefinitely tolled all four of her claims.

We disagree.

       26 RPC Scope [17].

       27 id, at [20].

                                            10
No. 71742-1-1/11

          RCW 4.16.190 tolls statutes of limitations for a person who is "disabled to

such a degree that he or she cannot understand the nature of the proceedings."

This tolling applies even ifthe person has a guardian.28

          But this statute does not apply to actions under TEDRA (the Trust and

Estate Dispute Resolution Act) if the person has a guardian. Under TEDRA:

      The tolling provisions of RCW 4.16.190 apply to this chapter
      [TEDRA] except that the running of a statute of limitations under
      subsection (1) or (2) of this section, or any other applicable statute
      of limitations for any matter that is the subject of dispute under this
      chapter, is not tolled as to an individual who had a guardian ad
      litem, limited or general guardian of the estate, or a special
      representative to represent the person during the probate or
      dispute resolution proceeding.1291

Thus, when a person has a guardian ad litem or general guardian, his or

her claims are not tolled for matters that are the subject of dispute under

TEDRA.

          It is undisputed that Sarah is severely disabled. It is also

undisputed that a guardian represented her. Thus, if this case is a "matter

that is the subject of dispute under" TEDRA, Block's claims, brought on

behalf of Sarah, were not tolled. But if the claims did not fall under

TEDRA, her claims were tolled, and she timely filed this action, regardless

of the statute of limitations. Thus, the dispositive question is whether this

matter falls under TEDRA.

          28 Young v. Key Pharmaceuticals. Inc.. 112 Wn.2d 216, 220, 770 P.2d. 182
(1989).

          29 RCW 11.96A.070(4) (emphasis added).

                                                11
No. 71742-1-1/12

       The purpose of TEDRA "is to set forth generally applicable statutory

provisions for the resolution of disputes and other matters involving trusts

and estates."30

       RCW 11.96A.030(2) states that under TEDRA, "'Matter' includes

any issue, question, or dispute involving: . . . (c) The determination of any

question arising in the administration of an estate or trust." This court has

held that "[t]he plain words of this definition of 'matter' make clear the

broad scope of this term."31

       Here, we note that Block's complaint cites TEDRA. She expressly

alleges that subject matter jurisdiction exists "under the statutes . . .

including but not limited to, RCW 11.96A.020 and 11.96A.040."32 And we

conclude that Block's claims fall under TEDRA's broad definition of

"matter."

       This case involves the administration of Sarah Block's guardianship

estate and special needs trust. Block's complaint alleges that the

guardianship court did not properly approve Barcus's fee agreement. It

also alleges that the guardian ad litem failed to properly evaluate Barcus's

fees. Similarly, the complaint alleges that the guardianship court failed to

determine whether Barcus's fees were reasonable. The complaint also

       30RCW11.96A.010.

       31 In re Estate of Bernard. 182 Wn. App. 692, 722, 332 P.3d 480, review
denied. 339 P.3d 634 (2014).

       32 Clerk's Papers at 3.
                                              12
No. 71742-1-1/13

alleges that Barcus improperly paid himself fees directly from a settlement

instead of first placing the funds in Sarah's trust.

       Thus, this case involves "questions] arising in the administration of

Sarah Block's guardianship estate and special needs trust. Accordingly, it

is a "matter" under TEDRA's broad definition of that term.

       Additionally, Block's complaint cites TEDRA several times. She

cites TEDRA as one ground for jurisdiction and venue. And her complaint

seeks attorney fees under TEDRA. Thus, while Block now claims that

TEDRA does not apply to this case, that claim is inconsistent with her own

assertions when she commenced this action.

       Block argues that TEDRA's exception to RCW 4.16.190 does not apply to

her case for several reasons.

       First, Block argues that her case does not fall under TEDRA because she

did not allege a cause of action contained in TEDRA's RCW chapter. But as

explained earlier, TEDRA has a broad scope, and this case falls within it.

       Second, Block argues that no statute of limitations contained in TEDRA

controls in this case. Thus, Block argues that TEDRA's tolling exemption does

not apply to her case.

       But the exemption—RCW 11.96A.070(4)—tolls "any other applicable

statute of limitations."33 This plain language does not limit its application to

statutes of limitation contained in TEDRA. Instead, if "any matter" is disputed

       33RCW11.96A.070(4).

                                              13
No. 71742-1-1/14

under TEDRA, the tolling exception applies to any applicable statute of

limitations.

       Third, Block argues that Sarah was not represented during a probate or

dispute resolution proceeding, thus RCW 11.96A.070(4) does not apply. But

RCW 11.96A.070(4) applies to "individual[s] who had a guardian ad litem, limited

or general guardian of the estate, or a special representative to represent the

person during the probate or dispute resolution proceeding."34 Because

there is no comma after "special representative," the phrase "to represent the

person during the probate or dispute resolution proceeding" modifies only that

term.35 Thus, the tolling exception applies whenever an individual is represented

by a guardian ad litem or a general guardian—it is not necessary that the

guardian represent the individual in a probate or dispute resolution proceeding.

       Block also argues that if TEDRA prevents the tolling of her claims under

RCW 4.16.190, then it is unconstitutional. She is mistaken.

       Block argues that not tolling her claims would be unconstitutional under

article I, section 12 of the Washington constitution. That section prohibits

granting "any citizen, class of citizens, or corporation other than municipal,

privileges or immunities which upon the same terms shall not equally belong to

       34 jd, (emphasis added).

       35 Id.

                                             14
No. 71742-1-1/15

all citizens, or corporations."36 To support this claim, she relies on Schroeder v.

Weiqhall.37

       In that case, the supreme court held that an exception to RCW4.16.190's

tolling was unconstitutional. Under the exception at issue, medical malpractice

claims were not tolled under RCW 4.16.190.38 The supreme court held that this

tolling exemption "place[d] a disproportionate burden on the child whose parent

or guardian lacks the knowledge or incentive to pursue a claim on his or her

behalf."39 The court also noted that it unconstitutionally granted a benefit—

limited liability—to medical malpractice defendants.40

       The present case is distinguishable. First, TEDRA's tolling exception only

applies to those "who had a guardian ad litem, limited or general guardian of the

estate, or a special representative."41 Thus, it only applies to those whose

interests were represented. Accordingly, unlike Schroeder. the tolling exception

does not burden a "particularly vulnerable population."42

       Second, TEDRA's tolling exception does not benefit any particular class of

defendants. In Schroeder, the exception singled out medical malpractice claims,

       36 Const, art. I, § 12.

       37179 Wn.2d 566, 316 P.3d 482 (2014).

       38 RCW 4.16.190(2).

       39 Schroeder. 179 Wn.2d at 578-79.

       40 id, at 573-74.

       41 RCW11.96A.070(4).

       42 Schroeder. 179 Wn.2d at 577.

                                             15
No. 71742-1-1/16

while tolling all other claims.43 Here, in contrast, the tolling exemption applies to

all causes of action.

       Thus, because TEDRA's tolling exception does not burden a vulnerable

population or confer a benefit to a particular group, Block's argument is not

persuasive.

       In sum, we conclude that TEDRA applies to Block's claims.

Accordingly, Block's claims were not tolled under RCW 4.16.190, and the

statutes of limitations for her claims have run.

                                Equitable Doctrines

       Block argues that she raised genuine questions of material fact whether

equitable doctrines tolled her claims. Specifically, she argues that equitable

tolling or equitable estoppel may apply in her case, depending on contested

facts. We disagree.

       "Estoppel is appropriate to prohibit a defendant from raising a statute of

limitations defense when a defendant has 'fraudulently or inequitably invited a

plaintiff to delay commencing suit until the applicable statute of limitation has

expired.'"44 The three elements of equitable estoppel are: First, "an admission,

statement, or act inconsistent with a claim afterward asserted; second, action by

another in reasonable reliance on that act, statement, or admission; and third,

       43 id, at 570.

       44 Robinson v. City of Seattle. 119 Wn.2d 34, 82, 830 P.2d 318 (1992)
(quoting Del Guzzi Constr. Co. v. Global Northwest. Ltd.. 105 Wn.2d 878, 885, 719
P.2d 120 (1986)).

                                             16
No. 71742-1-1/17

injury to the party who relied ifthe court allows the first party to contradict or

repudiate the prior act, statement, or admission."45

       Block's allegations fail to establish that she is entitled to equitable

estoppel. She does not identify any "admission, statement, or act" of the

defendants' that is inconsistent with their current defenses. Additionally, she has

not shown reasonable reliance on her part. Accordingly, there are no genuine

issues of material fact whether Block is entitled to equitable estoppel.

       Block also fails to allege facts indicating that equitable tolling applies in

this case. "Equitable tolling is a remedy that permits a court to allow an action to

proceed when justice requires it, even though a statutory time period has

elapsed."46 This doctrine applies only in "narrow circumstances."47 Equitable

tolling requires "bad faith, deception, or false assurances by the defendant and

the exercise of diligence by the plaintiff."48

       Here, Block alleges that Barcus and Kram acted in bad faith by being

"instrumental in getting court orders prohibiting her from [filing suit]." Block refers

to a January 2009 order that denied Block's request for the trust to hire an

attorney. In December 2008, Block sought to have the trust pay a $10,000

retainer for an attorney to investigate the reasonableness of Barcus's fees. The

trustee denied this request. In January 2009, the guardianship court then denied

       45 id,

       46 In re Pers. Restraint of Bonds, 165Wn.2d 135, 141, 196 P.3d 672 (2008).

       47 id,

       48 id,

                                                 17
No. 71742-1-1/18

Block's request to overrule the trustee's decision. Barcus appeared at the

January 2009 hearing to oppose the trust funding the litigation.

       Here, even assuming that the defendants acted in bad faith, Block did not

act diligently. Block was aware of the potential issue with Barcus's fees since

2006. In that year, she wrote a letter to Barcus stating that she "w[ould] probably

never be at peace with the huge fees [Barcus] require[d]." Block also contacted

an attorney about investigating the reasonableness of Barcus's fees in 2008. Yet

Block did not commence this action until 2013.

       Additionally, although the guardianship court denied Block's request for

the trust to fund the litigation against Barcus, the court noted that Block could

proceed if she retained counsel without using the trust's funds. Block ultimately

did retain counsel at her own expense but not until July 2011. Thus, part of

Block's delay in filing the case was her delay in retaining counsel, at her

expense. Accordingly, Block did not act with reasonable diligence and is not

entitled to equitable tolling of her claims.

       We affirm the trial court's summary judgment dismissal of Block's claims.

                                                           fox J
WE CONCUR:

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                                               18