Court Opinion

ID: 4713571
Source: CourtListenerOpinion
Date Created: 2021-08-12 00:39:29.668971+00
Date Added: 2024-06-11T08:07:18.314353
License: Public Domain

¶27 (dissenting) — One fine spring day, a dairy farmer sold 200 gallons of milk to a customer, spent two hours repairing a neighbor’s tractor at an agreed upon hourly rate, and loaned a utility trailer to another neighbor with the understanding that the trailer would be returned the next year when, in lieu of rent, the neighbor would install new wheels and tires on the trailer. Our farmer occasionally has similar transactions with both neighbors. That fine spring day, our industrious farmer also sold an old riding lawn mower, which he used mostly to mow the lawn around the farm house but occasionally to trim the grass and weeds from his fields. The used riding lawn mower was sold to an acquaintance across the valley for some money up front and the buyer’s promise to mow the farmer’s lawn and trim grass and weeds from some farm areas all summer. All of the farmer’s transactions were oral, but he considered each an account receivable. The question we must answer is, if the farmer sought to judicially enforce any of these oral agreements, which statute of limitations applies?
Chambers, J.
¶28 Historically, those who rely on such oral contracts instead of written ones have had less time to seek judicial enforcement. The reason is obvious. Courts have more confidence in their ability to find the intent of the parties if that intent has been written down. Further, misunderstandings between parties concerning specific terms are greatly reduced if the specific terms are in writing. Memories often do not withstand the force of time, while written terms are precisely preserved indefinitely. In recognition of these principles, our legislature provided six years to enforce written contracts, RCW 4.16.040(1), but only three years for other contracts, RCW 4.16.080(3).
*667The Ambiguous Meaning of Account Receivable
¶29 “Account receivable” is not defined in chapter 4.16 RCW or any other statute. Petitioner David Tingey argues that the word “receivable” is clear and means “a thing that can be received.” Pet. for Review at 5. Further, he argues that “account” is defined as a “ ‘right to payment of a monetary obligation, whether or not earned by performance, . . . for service rendered .or to be rendered.’ ” Pet. for Review at 5 n.l (quoting RCW. 62A.9A-102(a)(2)(A)(ii)). Thus, Tingey concludes that “account receivable” means “ ‘any right to payment for . . . services rendered which is not evidenced by an instrument or chattel paper . . . ’ that can be received.” Pet. for Review at 6. The majority has adopted Tingey’s definition with the addition that the transaction must be in connection with a business. Majority at 660.
¶30 According to the majority, “[t]he plain meaning of ‘account receivable’ in RCW 4.16.040(2) is an amount due a business on account from a customer who has bought merchandise or received services.” Majority at 663.1 believe that under the majority’s holding, likely all of our dairy farmer’s spring day transactions, including the sale of the milk and the lawn mower, the tractor repair, and the leased utility trailer resulted in accounts receivable and are subject to a six-year statute of limitations. Their status is, at least, very debatable. This court can, over the next several decades and at the cost of numerous appellate cases, define “account receivable” in the ordinary course of business by case law or, much more preferably in my view, the legislature could define “account receivable” or “account receivable in the ordinary course of business” for us.
¶31 Webster’s Third New International Dictionary defines an “account receivable” as “a balance due from a debtor on a current account.” Webster’s Third New International Dictionary 13 (2002). A “current account” is defined as “an account between two parties having a series of transactions not covered by evidences of indebtedness (as notes or *668certificates) and usu. subject to settlements at stated intervals (as monthly or quarterly).” Id. at 557 (emphasis added).
¶32 This definition is inconsistent with the definition derived from the accounting dictionary. At the very least, the difference suggests the term is ambiguous. “Account receivable” means different things based on the context. The Court of Appeals explored some of the different uses:
[T]he term “account receivable” as it appears in legal proceedings, or as it is defined in dictionaries, has different meanings depending upon the context. In litigation, the term is used in the context of: (1) the sale and valuation of businesses, (2) adversary proceedings during bankruptcy proceedings, and (3) priority disputes between secured parties. In a legal dictionary, any balance owed by a debtor is considered an “account receivable.” Other times, an account receivable is the balance owed on (1) an unsettled account or (2) an open account. Finally, whether or not a particular debt constitutes an account receivable may be a factual question.
Tingey v. Haisch, 129 Wn. App. 109, 114, 117 P.3d 1189 (2005) (footnotes and citations omitted). The meaning of the term “account receivable,” let alone the phrase “account receivable in the ordinary course of business,” is not apparent from its face. A statute is unambiguous only “when the statutory language admits of only one meaning.” State v. J.P., 149 Wn.2d 444, 450, 69 P.3d 318 (2003). The variety of distinct definitions of “account receivable” demonstrates that the statutory language is susceptible to more than one interpretation. Faced with different reasonable definitions, we must examine the legislative history to determine which reasonable definition the legislature intended. Dep’t of Ecology v. Campbell & Gwinn, LLC, 146 Wn.2d 1, 12, 43 P.3d 4 (2002); see also majority at 657. The result of such an inquiry supports interpreting the statute as referring to open accounts. This interpretation, in addition to reflecting the legislature’s intent, is in accord with the principles supporting shorter statutory periods limiting claims based on oral rather than written contracts.
*669¶33 If the legislature meant that all business contracts for goods and services should have a six-year statute of limitation, it would surely have said so. It did not. Instead, it added limiting language the majority would define to make meaningless. The legislature intended that an account receivable, not just any business contract, should be entitled to the same statute of limitations as written contracts.
¶34 Our goal is to determine the legislature’s intent, and we will avoid absurd results. J.P., 149 Wn.2d at 450 (citing Nat’l Elec. Contractors Ass’n v. Riveland, 138 Wn.2d 9, 19, 978 P.2d 481 (1999)). I admire the majority’s ability to see clearly through cloudy water, but sometimes the water itself distorts the object of scrutiny. The most basic problem with the majority’s definition is that it is so broad that the exception swallows the general rule. It means that all oral contracts for goods and services in the ordinary course of business have a six-year statute of limitation. Again, the legislature could have but did not say that all oral contracts for goods and services would enjoy a long statute of limitations usually reserved for written agreements. The result of the majority’s interpretation is that the term “account receivable” has no meaning, and an interpretation making a statute’s term superfluous must be rejected. We have held, time and again, that “[statutes must be interpreted and construed so that all the language used is given effect, with no portion rendered meaningless or superfluous.” Whatcom County v. City of Bellingham, 128 Wn.2d 537, 546, 909 P.2d 1303 (1996) (citing Stone v. Chelan County Sheriff’s Dep’t, 110 Wn.2d 806, 810, 756 P.2d 736 (1988); Tommy P. v. Bd. of County Comm’rs, 97 Wn.2d 385, 391, 645 P.2d 697 (1982)).
Legislative History
¶35 Confusion over the meaning of “account receivable” in the ordinary course of business was apparent during the debate over its passage in the senate. Even so, the legislature failed to define “account receivable” in the statute. *670However, the discussions held by the senate before it passed the bill that became RCW 4.16.040(2), Substitute S.B. 5213, 51st Leg., Reg. Sess. (Wash. 1989), reveal that the legislature did not intend the definition we adopt today. Before the bill passed, then-Senator Philip A. Talmadge expressed his concerns that an “account receivable” is difficult to define, stating that the senate could simplify the bill to include all contracts, including oral ones. He said:
“The problem is, I think, that there is that difficulty in determining what is or is not an account receivable incurred in the ordinary course of business and an oral contract. It seems to me if we are going to reconsider this we may want to do it right and simply provide for a six year statute of limitations for all contracts.”
Senate Journal, 51st Leg., Reg. Sess., at 509.17 The legislature declined and passed the bill “as is” despite Senator Talmadge’s concerns.18 Senator Bill Smitherman explained the term “account receivable” meant just an open account, and the bill passed following his explanation and over *671Senator Talmadge’s dissenting vote. The legislative history suggests that the bill was passed with the intent of limiting the definition of “account receivable” to open accounts. An “open account” is “[a]n account that is left open for ongoing debit and credit entries by two parties and that has a fluctuating balance until either party finds it convenient to settle and close.”19 Black’s Law Dictionary 20 (8th ed. 2004).
¶36 Tingey and the majority contend that the legislative history tells a different story, pointing out that the bill was amended before it passed. The original version, which did not pass, read: “A balance due upon a mutual, open, and current account, the items of which are in writing.” S.B. 5213, 51st Leg., Reg. Sess. (Wash. 1989). Although the legislature’s rejection of this language is noteworthy, the subsequent comments by Senator Smitherman suggest “account receivable” was intended to encapsulate the “open account” language used in the first version. Apparently “receivable” modified “account” in the same way “open” did, making the phrase “open account receivable” redundant. The significant change was not the deletion of the “open account” language, it was the deletion of “the items of which are in writing,” and the addition of “in the ordinary course of business.” This suggests the legislature intended to expand the scope of the six-year statute of limitations to instances where a business’ ordinary practices may not include writing down the terms of the account. It appears the legislature wanted to include in the six-year statute of limitations open accounts that were established without a written agreement. In such cases, bills are sent and paid without a formal contract. The changes suggest the legislature did not want to exclude such open accounts. They do not suggest the legislature intended to expand the six-year statute of limitations beyond open accounts.
¶37 The majority describes this reading of the legislative history as “implausible.” Majority at 661. In a vacuum, the *672majority may have a point. But we examine the legislative history in its full context and must reconcile the senate’s decision to change the language of the bill with the definition of the term given before its passage. Senator Smither-man was of the view that an “account receivable” meant an open account; the change in language could not have been intended to expand the term “accounts receivable” beyond the definition the legislative history provides.
¶38 The majority argues that attention should be paid to the fact that “ ‘[fjurther debate ensued’ ” following Senator Smitherman’s definition. Majority at 662 (alteration in original) (quoting Senate Journal, 51st Leg., Reg. Sess., at 509 (Wash. 1989)). The majority argues that the fact the bill was not put “directly to a vote” following Senator Smither-man’s definition of the term “undermines” my view that the “senate responded to Senator Smitherman’s definition by passing the bill.” Id. at 662. It is correct that debate ensued, but what was its result? The senate was divided with respect to this bill. Senator Talmadge heard Smitherman’s definition and offered a more expansive definition similar to the definition the majority adopts today. That expansive definition lost. No changes were made, and Senator Talmadge did not vote for the bill. Yes, there was debate. And there was an alternative position articulated by Senator Talmadge. But Smitherman’s position won the day. We have in the legislative history an articulation of a definition of “account receivable.” The majority has chosen to ignore the legislative history and instead adopt a technical definition from an accounting dictionary.
CONCLUSION
¶39 I have observed that when I receive goods and services based upon verbal agreements from businesses, the businesses often provide me with an invoice and regular statements showing the status of my account. I know that such an account is an account payable for me and an *673“account receivable” for the business. Such accounts, which benefit from regular written statements, have many of the merits of a written contract. Although there is no written agreement, the balance owing and many of the terms are memorialized in writing and, generally, may be enforced with confidence by a court of law. I am of the view and agree with the Court of Appeals that such “open” accounts are what the legislature had in mind when amending RCW 4.16.080.
¶40 Despite the legislative history which indicates the legislature, wisely I believe, intended that “account receivable” under this bill would be limited to open accounts, we are urged to ignore this history because the term is plain on its face. The term, however, is anything but plain. It means different things in different contexts.
¶41 Finally, I am concerned by the lack of balance of briefing in this case.20 This case is brought by a lawyer against a client who is either unable or unwilling to pay. There was no written fee agreement between the parties. For more than three years the lawyer did not bill, nor did the client pay on the account. The lawyer subsequently turned the account over to a collection agency.
¶42 Given the posture of this case, the Court of Appeals attempted to avoid an absurd result of permitting the exception to swallow the general rule, concluding that “ ‘account receivable’ ” meant “ ‘open account,’ ” which is “ ‘[a]n account that is left open for ongoing debit and credit entries by two parties and that has a fluctuating balance until either party finds it convenient to settle and close.’ ” Tingey, 129 Wn. App. at 111 (quoting Black’s Law Dictionary 20 (8th ed. 2004)). The Court of Appeals believed that the legislature intended to limit “account receivable” to revolving charge accounts. Id. at 116. The Court of Appeals made an *674admirable attempt at divining the intent of the legislature. I am not persuaded that the majority has the correct crystal ball. I appeal to the legislature to clear the waters and clearly define “account receivable” for RCW 4.16.040(2).
¶43 But I would further affirm because this is an egregious case. A lawyer failed to enter into a written fee agreement with a client, did not send statements for over three years, and then assigned his claim to another. Such claims have always been barred by the three-year statute of limitations, and I cannot believe the legislature intended this case to proceed. I respectfully dissent.
C. Johnson, J., concurs with Chambers, J.

 The full context of that exchange:
Senator Talmadge: “Senator Smitherman, the problem with this bill is what the definition of an account receivable is when incurred in the ordinary course of business. Would you define what an account receivable incurred in the ordinary course of business might be and maybe the difference between that and somebody just entering into an oral contract?”
Senator Smitherman: “I believe it’s just an open account, Senator.”
Senator Talmadge: “Well, the problem is, if I enter into an oral contract with you, that’s something that’s a three year statute of limitations now and a three year statute of limitations under this bill. If I enter into an oral contract with you and you go back to your business and you say, “Well, I think I will carry that on my books,’ and you treat it as an account receivable, then it’s something that would carry with it a six year statute of limitations. The problem is, I think, that there is that difficulty in determining what is or is not an account receivable incurred in the ordinary course of business and an oral contract. It seems to me if we are going to reconsider this we may want to do it right and simply provide for a six year statute of limitations for all contracts.”
Senate Journal, 51st Leg., Reg. Sess., at 509 (Wash. 1989).

Senator Lee: “Senator Smitherman, is your reason for asking for reconsideration so that it can be returned to second reading for purposes of an amendment or just simply to pass it as is?”
Senator Smitherman: “To pass it as is, Senator.”

Id.

 An “open account” is also defined as occurring “where the parties intend that the individual transactions in the account be considered as a connected series, rather than as independent of each other.” 1 Am. Jur. 2d Accounts & Accounting § 4, at 624 (2005).

 The respondents, Lloyd and Lucy Haisch, did not file briefs before this court. Tingey was supported by an amicus curiae brief and memorandum submitted by the trade organization ACA International, an association of credit and collection professionals (ACA) International. Tingey filed a petition for review, a supplemental brief, and a response to the amicus curiae brief of ACA International. In short, we were presented five briefs in favor of Tingey and none in favor of the Haischs.