Court Opinion

ID: 4212012
Source: CourtListenerOpinion
Date Created: 2017-10-16 20:17:46.493293+00
Date Added: 2024-06-11T14:41:01.607186
License: Public Domain

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON                                      CPC)
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ADAM A. CHUKRI,             )                         cp rri
                            ) DIVISION ONE
           Appellant,       )
                                                      '5 eprn
                                                       '     ••-orn
                                                                 0
                            ) No. 75590-1-1
               v.           )I                                  --
                                                       en 0(1)
                            ) PUBLISHED OPINION
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                            I                           r%)
JASON STALFORT and JANE DOE )
STALFORT, and their marital )
community,                  )
                            )
           Respondents.     ) FILED: October 16, 2017
                            )
       DWYER, J. -- When a defendant has a claim against the plaintiff which

arises out of the same transaction or occurrence as the plaintiff's claim, and is

logically related thereto, the defendant's claim is a compulsory counterclaim.

Compulsory counterclaims must be pleaded in the existing lawsuit or be forfeited.

Jason Stalfort sued Adam Chukri for damages incurred in a motor vehicle

collision. The lawsuit settled without Chukri bringing any affirmative claims

against Stalfort. Months later, Chukri filed this lawsuit against Stalfort, seeking

damages arising out of the same collision. The trial court correctly dismissed the

action. We affirm.
No. 75590-1-1/2

       On August 29, 2013, Chukri and Stalfort were involved in a motor vehicle

collision. Both parties claimed that the other party was at fault. Each party

alleged that he suffered personal injuries as a result of the incident.

       In January 2015, Stalfort filed a personal injury suit against Chukri.

Chukri's insurance company, Progressive Insurance Company, provided legal

representation to Chukri for his defense against Stalfort's suit.1 Defense counsel

sent Chukri a letter informing him of his rights as an insured and advised him to

speak directly to his own attorney about any questions or concerns that he might

have. The letter explicitly stated:

       I am only handling the defense of the lawsuit that has been brought
       against you. If you have a claim for damages against other parties
       involved in this lawsuit, I cannot represent you for such claims, but
       will cooperate fully with your personal attorney. If you intend to
       pursue a claim (or make a counterclaim or crossclaim), please
       contact your attorney immediately since strict time limitations may
       apply to such actions for damages. If you decide to pursue a claim,
       the attorney that you choose to represent you will be at your own
       expense.

       In addition, the letter included a copy of a standardized "Statement of

Insured Client's Rights," which also emphasized the importance of promptly

retaining separate counsel to file any counterclaims that the insured might have

against other parties to the lawsuit. The statement explicitly requested, in bold

typeface, that the insured ask for an explanation from defense counsel if there

was any uncertainty about the insured's rights pursuant to the insurance policy.

       1 We will refer to the attorney financed by the insurer as defense counsel.
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No. 75590-1-1/3

Defense counsel also promised to cooperate fully with any attorney that Chukri

chose to hire.

       Chukri did not contact a separate lawyer at that time, nor did he assert any

counterclaim against Stalfort.

       Defense counsel began settlement negotiations with Stalfort's lawyers. In

April 2015, defense counsel informed Chukri of a tentative settlement. After the

subsequent settlement of the suit, Chukri received copies of Stalfort's signed

release of claims and the trial court's order dismissing the lawsuit "with

prejudice."

       Approximately eight months after the settlement, Chukri's newly retained

lawyer filed a personal injury lawsuit against Stalfort. Stalfort, defended by

lawyers financed by his insurance company, asserted that the settlement of the

previous suit precluded Chukri's current claim. Stalfort filed a motion to dismiss,

pursuant to CR 12(b)(6), asserting that Chukri's claim was a compulsory

counterclaim, under CR 13(a), and was, thus, required to be pleaded in the prior

action. Chukri argued that CR 13 did not bar his claim because the lawyers hired

by Progressive controlled the litigation in the previous suit and he was, hence,

unable to plead any counterclaims in that action. However, Chukri admitted that

he knew that he had the responsibility to file any counterclaims himself or secure

additional legal representation to do so on his behalf. Chukri never offered an

explanation as to the reason for his untimely actions.

       The trial court dismissed Chukri's lawsuit, ruling that his claims were

barred by CR 13(a).

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No. 75590-1-1/4

                                          II

       We review de novo an order granting a motion to dismiss under CR

12(b)(6). Jackson v. Quality Loan Serv. Corp., 186 Wash. App. 838, 843, 347 P.3d
487, review denied, 184 Wash. 2d 1011 (2015). A dismissal for failing to state a

claim upon which relief may be granted is appropriate when the plaintiff cannot

prove "any set of facts which would justify recovery." FutureSelect Portfolio

Mgmt., Inc. v. Tremont Grp. Holdings, Inc., 180 Wash. 2d 954, 962, 331 P.3d 29

(2014)(internal quotation marks omitted)(quoting Kinney v. Cook, 159 Wash. 2d
837, 842, 154 P.3d 206 (2007)). When considering the facts, "[a]Ilfacts alleged

in the plaintiffs complaint are presumed true." Jackson, 186 Wash. App. at 843.

                                         Ill

       Chukri contends that the trial court erred by dismissing his personal injury

claim against Stalfort, pursuant to CR 12(b)(6), on the ground that it was barred

by CR 13(a). His claim against Stalfort should not be barred as a compulsory

counterclaim, Chukri asserts, because he had to defer to the lawyers hired by his

insurer and relinquish control over that litigation. We disagree.

      A compulsory counterclaim arises out of the same "transaction or

occurrence" as the original claim if the two are logically related. Chee Chew v.

Lord, 143 Wash. App. 807, 813, 181 P.3d 25(2008)(quoting CR 13(a)). A claim

that is logically related to another claim is properly the basis for a compulsory

counterclaim. Schoeman v. N.Y. Life Ins. Co., 106 Wash. 2d 855, 865, 726 P.2d 1

(1986). To promote judicial economy and convenience, a "broad realistic

interpretation" should be given to the transaction or occurrence in determining

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No. 75590-1-1/5

whether it is logically related to both the claim and the counterclaim. Schoeman,
106 Wash. 2d at 865 (quoting Rosenthal v. Fowler, 12 F.R.D. 388, 391 (S.D.N.Y.

1952)). For example, in Schoeman, 106 Wash. 2d at 866, our Supreme Court

discussed how the murder of a woman's husband logically connected an

insurer's interpleader action seeking to resolve life insurance beneficiary rights

(the original claim) to the woman's wrongful death suit against the same insurer

for incentivizing her husband's death (the compulsory counterclaim). In Chee

Chew, 143 Wash. App. at 815, we concluded that a defendant's counterclaim for

the contractual indemnification of litigation costs was logically related to a

plaintiff's suit for personal injuries stemming from the same underlying incident.

Thus, we determined that the defendant's counterclaim was a compulsory one.

       CR 13 requires compulsory counterclaims to be pleaded at the time the

defendant's answer is served.

       A pleading shall state as a counterclaim any claim which at the time
       of serving the pleading the pleader has against any opposing party,
       if it arises out of the transaction or occurrence that is the subject
       matter of the opposing party's claim and does not require for its
       adjudication the presence of third parties of whom the court cannot
       acquire jurisdiction.

CR 13(a). Failing to plead a compulsory counterclaim bars action

on that claim in later lawsuits. Schoeman, 106 Wash. 2d at 863. "A

liberal and broad construction of Rule 13(a) is appropriate to avoid

a multiplicity of suits." Schoeman, 106 Wash. 2d at 864.

      The considerations underlying the compulsory counterclaim rule include

judicial economy,fairness, and convenience. Chee Chew, 143 Wash. App. at 813

(quoting Schoeman, 106 Wash. 2d at 866). Moreover, "[t]he purpose of the rule is

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No. 75590-1-1/6

to make an "actor" of the defendant so that circuity of action is discouraged and

the speedy settlement of all controversies between the parties can be

accomplished in one action." Chee Chew, 143 Wash. App. at 813(internal

quotation marks omitted)(quoting Executive Mgmt., Ltd. v. Ticor Title Ins. Co.,

114 Nev. 823, 842-43, 963 P.2d 465(1998)).

      Our Supreme Court, as the rule's authors, recognized the necessity for

exceptions to CR 13 and allowed for exceptions in specific circumstances.

       But the pleader need not state the claim if(1) at the time the action
       was commenced the claim was the subject of another pending
       action, or(2)the opposing party brought suit upon the pleader's
       claim by attachment or other process by which the court did not
       acquire jurisdiction to render a personal judgment on that claim,
       and the pleader is not stating any counterclaim under this rule.

CR 13(a). Additionally, CR 13(f) provides that "[w]hen a pleader fails to

set up a counterclaim through oversight, inadvertence, or excusable

neglect, or when justice requires, the pleader may by leave of court set up

the counterclaim by amendment."

      In the present case, Chukri's personal injury suit and Stalfort's original

personal injury suit are logically related. Both suits arose from the same

occurrence—a single motor vehicle collision. Chukri acknowledges that his claim

arises out of the same occurrence as was the subject of Stalfort's suit. Thus,

Chukri's personal injury claim against Stalfort is a compulsory counterclaim that

should have been brought during Stalfort's initial suit.

      Chukri's claim does not satisfy the requirements of any exception to CR

13(a). Chukri's claim was ready for adjudication at the time Stalfort brought the

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No. 75590-1-1/7

original suit against Chukri. Chukri's claim was properly ruled to be a compulsory

counterclaim, and the trial court properly dismissed the claim.

                                           IV

       Notwithstanding the foregoing, Chukri contends that, regardless of the

compulsory nature of his claim, his inability to control the litigation in the first

lawsuit should enable him to bring his claim in a later action. This is so, he

avers, because his insurance provider controlled the decision to settle the claim

by Stalfort, pursuant to RCW 46.29.490(6)(a)-(c). We disagree.

      RCW 46.29.490(6)(a)-(c) states:

               (a) The liability of the insurance carrier with respect to the
       insurance required by this chapter becomes absolute whenever
       injury or damage covered by said motor vehicle liability policy
       occurs; said policy may not be canceled or annulled as to such
       liability by any agreement between the insurance carrier and the
       insured after the occurrence of the injury or damage; no statement
       made by the insured or on his or her behalf and no violation of said
       policy defeats or voids said policy.
               (b)The satisfaction by the insured of a judgment for such
       injury or damage shall not be a condition precedent to the right or
       duty of the insurance carrier to make payment on account of such
       injury or damage.
               (c) The insurance carrier may settle any claim covered by
       the policy, and if such settlement is made in good faith, the amount
       thereof is deductible from the limits of liability specified in
       subsection (2)(b) of this section.

      RCW 46.29.490(6)(a)-(c) did not prevent Chukri from asserting

counterclaims independent from the defense provided by defense counsel.

Neither did it prevent Chukri from retaining counsel separate from the lawyers

provided by his insurance company.

       Chukri concedes that no Washington case authority supports his

contention. His reliance on two cases applying Tennessee law, LaFollete v.

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No. 75590-1-1/8

Herron, 211 F. Supp. 919(E.D. Tenn. 1962), and City of Chattanooga v. Ballew,

354 S.W.2d 806(Tenn. Ct. App. 1961), is unavailing, as Tennessee has a statute

favorable to his position. Washington, however, has no such statute.

      There was no error.

                                       V

      Stalfort requests an award of costs on appeal. As he is the prevailing

party, he is so entitled. RAP 14.2. Upon compliance with RAP 18.1, a

commissioner of our court will enter an appropriate award.

      Affirmed.

We concur.

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