Court Opinion

ID: 4710696
Source: CourtListenerOpinion
Date Created: 2021-08-12 00:01:25.994253+00
Date Added: 2024-06-11T08:07:04.839064
License: Public Domain

Stephens, J.
¶62 (dissenting) — The lead opinion embraces the providers’ misguided argument that the Department of Social and Health Services’ (DSHS) statutory obligations in developing client service plans translate into contractual discretion to determine a future contract term. As a result it authorizes the use of a private contract action to impose on the State what amounts to strict liability for misinterpreting federal Medicaid comparability law. I respectfully dissent. I would reverse the judgment in favor of the providers on their claim for breach of the implied duty of good faith and fair dealing, and I would affirm the trial court’s dismissal of their alternative claims. I would also affirm the trial court’s decision disallowing recovery to the client class but on the ground that the client class action is barred by the statute of limitations or a failure to exhaust administrative remedies.4
A. The providers’ claim for breach of the implied duty of good faith and fair dealing fails as a matter of law
¶63 The duty of good faith and fair dealing implicit in a contractual relationship “obligates the parties to cooperate with each other so that each may obtain the full benefit of performance.” Badgett v. Sec. State Bank, 116 Wn.2d 563, 569, 807 P.2d 356 (1991). “Every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement.” Restatement (Second) of Contracts § 205 (1979). But this duty cannot add to or change the terms of the contract. Badgett, 116 Wn.2d at 569. Rather, “it requires only that the parties perform in good faith the obligations imposed by their agreement.” Id. The purpose of implying the obligation of good faith and fair dealing is to preserve the mutuality of obligations in a contract by assuring that the party who retains authority to specify the manner of a certain performance cannot thereby *133render a promise illusory. See Storek & Storek, Inc. v. Citicorp Real Estate, Inc., 100 Cal. App. 4th 44, 61, 122 Cal. Rptr. 2d 267 (2002).5 It has therefore been recognized that the implied duty of good faith and fair dealing arises where a term in the contract affords one party discretion in the manner of its performance. Goodyear Tire & Rubber Co. v. Whiteman Tire, Inc., 86 Wn. App. 732, 738, 935 P.2d 628 (1997); 23 Samuel Williston & Richard A. Lord, A Treatise on the Law of Contracts § 63:22, at 513-16 (4th ed. 2002).
¶64 Here, the providers sought recovery on the theory that “the contract includes an implied duty of good faith and fair dealing in [DSHS]’s performance of the contract, specifically in making its determination of the maximum authorized hours for which it would compensate a provider.” Clerk’s Papers (CP) at 2972 (Jury Instruction 11). They argued that the “contract obligated [DSHS] to pay for all authorized services provided under the contract and that [DSHS] breached the contract when it reduced authorized hours by application of the Shared Living Rule.” Id. The jury was instructed that DSHS reserved contractual discretion in determining the maximum hours for which it would compensate a provider if the contract did not give DSHS unconditional authority to determine the hours or was silent as to its authority. CP at 2980 (Jury Instruction 19).
*134¶65 This approach to establishing a duty of good faith and fair dealing was misguided from the start. DSHS’s obligation to determine authorized hours of care for each client is not a contractual obligation, express or implied. Rather it is a statutory duty owed to the clients, not the providers, and the contract simply requires DSHS to pay each provider based on the individual client’s service plan. As explained below, DSHS retained no discretion under the contract giving rise to the implied duty of good faith and fair dealing.

1. As a matter of law, the terms of the contract did not leave DSHS discretion requiring application of the implied duty of good faith and fair dealing in developing each client’s service plan

¶66 The interpretation of a contract can be a mixed question of law and fact. Mut. of Enumclaw Ins. Co. v. USF Ins. Co., 164 Wn.2d 411, 424 n.9, 191 P.3d 866 (2008). But where the contract presents no ambiguity and no extrinsic evidence is required to make sense of the contract terms, contract interpretation is a question of law. Id.; Tanner Elec. Coop. v. Puget Sound Power & Light, 128 Wn.2d 656, 674, 911 P.2d 1301 (1996); see Badgett, 116 Wn.2d at 568-69 (explaining that whether promisor had a duty under the contract is a threshold question of law).
¶67 Here, the providers have not argued that the contract is ambiguous or that we must resort to extrinsic evidence to ascertain its meaning. Instead, they argue the contract implies a duty of good faith and fair dealing because it contains a discretionary term. See Br. of Resp’ts Rekhter et al. at 24;6 CP at 2980 (instructing the jury that the duty applies where the contract does not give the department unconditional authority or is silent as to the *135department’s authority). Whether the contract contains a discretionary term depends on contract interpretation, a question of law in these circumstances. Accordingly, I agree with the lead opinion that the proper standard of review is the de novo standard.
¶68 As a matter of law, the contract here did not contain an unstated future term that DSHS retained discretion to determine. The lead opinion wrongly concludes otherwise. The relevant contract language reads:
DSHS will pay the Contractor the established rate for services per client in the geographic area where services are provided within Washington State. Rates will apply to all services authorized and provided under this Contract no matter what the payment source. The monthly payment for all services provided to any client will not exceed the amount authorized in the client’s Service Plan. Rate changes will not require a Contract amendment. Notification of rate increases will be made by publication of the DSHS Aging and Adult Services Administration rates in the Contractor’s geographic area. Published rates are not disputable.
DSHS will only reimburse the Contractor for authorized services provided to clients in accordance with this Contract’s Statement of Work and the client’s Service Plan.
Appellants’ Opening Br., App. at 32 (Client Service Contract, Individual Provider Services (Contract) § 4(b), (e)). Under the express terms of the contract, DSHS was required to pay the providers for the hours authorized by the client’s service plan. DSHS did not retain discretion under the contract to modify the hours for which the provider was to receive payment. That figure was to be determined solely by reference to the client’s service plan. Any discretion DSHS exercised in creating client service plans was not part of the performance of the provider contracts but was integral to DSHS’s statutory duty. See, e.g., RCW 74.39-.005(5) (charging DSHS with ensuring that long-term care service options are made available to functionally disabled *136persons while “maximizing] the use of financial resources in directly meeting the needs of persons with functional limitations”).
¶69 The lead opinion argues:
DSHS prepared the service plans after the contract was formed with the providers and after the providers began performing services. Thus, at the time that DSHS and an individual provider executed a provider contract, neither DSHS nor the provider knew what services would be needed by the clients or how much would be paid to the providers. These provisions give DSHS the discretion to set a future contract term: the quantity of hours and the types of services for which providers will be compensated.
Lead opinion at 113-14. This misapprehends the nature of discretion in setting a contract term. It confuses a promisor’s reservation of the right to reject or alter a contract based on preference or caprice with setting a term in a mutually agreed upon manner. The latter scenario is what occurred here, as a discussion of the cases cited by the providers and the lead opinion makes clear.
¶70 The lead opinion and the providers begin with Goodyear Tire, 86 Wn. App. 732. Whiteman was an independent dealer of Goodyear tires. Under the dealership contract, Goodyear reserved the right to sell tires in Whiteman’s trade area. Id. at 735. When it exercised the right, White-man claimed he was eventually forced to shutter his business. In response to a suit brought by Goodyear to recoup amounts due on Whiteman’s account, Whiteman counterclaimed for a breach of the duty under the implied covenant of good faith and fair dealing. Id.
¶71 Importantly, Goodyear Tire held that the duty did not apply. This was because the contract expressly allowed Goodyear to sell tires in Whiteman’s trade area, with no conditions attached. Id. at 741. The contract did not obligate Goodyear to perform in a discretionary manner. “ ‘[A]s a matter of law, there cannot be a breach of the duty of good *137faith when a party simply stands on its rights to require performance of a contract according to its terms.’ ” Id. at 740 (quoting Badgett, 116 Wn.2d at 570).
¶72 Goodyear Tire explains that “ ‘[t]he covenant may be relied upon only when the manner of performance under a specific contract term allows for discretion on the part of either party! ” 86 Wn. App. at 739 (some emphasis added) (quoting Amoco Oil Co. v. Ervin, 908 P.2d 493, 498 (Colo. 1995)). This means the implied duty is not triggered where the contract allows for unconditional authority, but it does not mean that a condition of performance (here, production of the client’s service plan) necessarily renders the performance “discretionary.” This is the mistake in the provider’s reasoning, repeated by the lead opinion.7
¶73 The cases cited by the providers do not demonstrate that a condition of performance is necessarily a discretionary performance. In Tymshare, Inc. v. Covell, 234 U.S. App. D.C. 46, 727 F.2d 1145 (1984), the contract at issue reserved to one party the right to change a formula upon which compensation was calculated “ ‘at any time during the quota year within [the party’s] sole discretion! ” Id. at 1148 (emphasis added). Here, DSHS retained no such express right. Its manner of performance was dictated by the client’s service plan, and it was bound by the hours authorized by the service plan as much as the providers were. Both parties received what they bargained for: payment authorized by the client service plan.
¶74 The providers argue that because DSHS employed a formula that determined the hours of paid care a client would receive, including the adjustments made by the *138shared living rule (SLR), DSHS retained the discretion to set a contract term. The providers mainly cite to Aventa Learning, Inc. v. K12, Inc., 830 F. Supp. 2d 1083 (W.D. Wash. 2011), in support of this proposition. The providers treat it as controlling, claiming that under Aventa, “[t]he duty of good faith and fair dealing applies to the exercise of discretion in implementing payment formulas.” Br. of Resp’ts Rekhter et al. at 26.
¶75 Aventa involved an asset purchase agreement executed between an acquired corporation (Aventa) and the acquiring corporation (KCDL) and KCDL’s parent company. The agreement promised Aventa, as consideration for the sale of its assets to KCDL, an “ Additional Earnout.’ ” Aventa, 830 F. Supp. 2d at 1090. The additional earnout was a future payment equal to six percent of the assumed equity value of KCDL at a certain future point. Id. The assumed equity value was calculated by applying a multiplier to KCDL’s trailing 12-month period earnings before interest, taxes, depreciation, and amortization (EBITDA). Id. When the additional earnout was eventually calculated, Aventa challenged the EBITDA figure KCDL used. The court concluded that the record on summary judgment contained enough evidence to suggest KCDL may have suppressed its EBITDA calculation and thus allowed Aventa’s claim for breach of the implied duty of good faith and fair dealing to go forward. Id. at 1101.
¶76 The providers argue that the EBITDA calculation is like DSHS’s formula for setting a client’s hours of paid care. But their reliance on Aventa fails to account for the fact that something more than just a contractual relationship between two parties is at issue here because DSHS has broader obligations as a government agency.8 Certainly DSHS has an obligation under the contract to pay providers *139for the number of hours authorized under each client’s service plan. But its method for arriving at that number— the Comprehensive Assessment Reporting Evaluation (CARE) tool and the SLR — is not part of the contract. Indeed, the jury rejected any contract claim. The lead opinion claims that I “ignore [ ] the fact that DSHS created the CARE process using its discretion” Lead opinion at 114. In fact, it is the contract itself that “ignores” this. The obligation to determine the hours of care for which a DSHS client is eligible is not part of the contract here and is instead grounded in statute and agency regulations. See RCW 74.39.005(2) (requiring DSHS to utilize a uniform system for comprehensively assessing functional disability); ch. 388-106 WAC (rules setting forth the CARE tool formula). The presence of the CARE tool, including the SLR, does not render DSHS’s performance under the contract discretionary. The lead opinion suggests DSHS’s statutory obligations are irrelevant here because the providers seek to enforce a contractual duty around a contractual term. Lead opinion at 116 (arguing that “DSHS confuses what is violated with how it is violated”). To the contrary, the providers are impermissibly attempting to engraft a contract claim to a statutory obligation using the implied duty of good faith and fair dealing.
¶77 Likewise, the providers’ reliance on Craig v. Pillsbury Non-Qualified Pension Plan, 458 F.3d 748 (8th Cir. 2006), is misplaced. In Craig, the parties agreed that the retirement plan administrator had the discretion to interpret the plan terms in calculating the plaintiff’s benefits. Id. at 751, 752, 754. The Eighth Circuit Court of Appeals explained that this exercise of discretion must be undertaken in good faith, “ ‘a requirement that includes the duty to exercise the discretion reasonably.’ ” Id. at 752 (quoting Goldstein v. Johnson & Johnson, 251 F.3d 433, 444 (3d Cir. 2001)). In performing its obligations under the *140contract, the plan administrator could decide whether to count compensation from a certain period of time, but it could not pick and choose what qualified as “compensation” within that period of time. Id. at 753.
¶78 Here, DSHS does not enjoy a similar contractual discretion to set hours. On the contrary, the amount paid to providers during the time period in question resulted from an automatic, across-the-board application of the SLR, which was a validly promulgated rule codified in the administrative code. While this court subsequently declared the rule to conflict with federal Medicaid comparability law in Jenkins v. Department of Social & Health Services, 160 Wn.2d 287, 157 P.3d 388 (2007), our decision did not somehow introduce discretion into DSHS contract performance. One way to better understand why no contractual discretion is involved here is to consider what would have happened had the court in Jenkins held that the SLR was consistent with federal law. If DSHS subsequently decided that it wanted to authorize more hours for live-in care providers despite the rule, it could not do so on a contract-by-contract basis through an exercise of its discretion. Rather, it would need to amend or repeal the rule through the proper channels, as agency rules are no less binding on DSHS than on those who contract with the agency.
¶79 In sum, under the contract here the providers agreed they would receive payment for whatever paid hours of care were authorized by the client service plans. Thus, the manner of performance under the specific contract term did not allow either contracting party to exercise discretion in determining hours. See Goodyear Tire, 86 Wn. App. at 739 (explaining that the contract term must allow a party discretion in the manner of performance). No matter how much discretion DSHS may have had in creating the CARE tool, because the contract did not vest DSHS with discretion in the performance of the contract terms, application of an implied duty of good faith was not required to ensure the providers received the benefit of their bargain. See Storek, *141100 Cal. 4th at 61. Indeed, the providers received the benefit of their bargain: payment for the amount of paid care hours authorized by the client’s service plan. As a matter of law, a claim for breach of the implied duty of good faith and fair dealing was not available. The judgment for the providers should be reversed.

2. The lead opinion’s discussion of whether an express term of the contract must be breached to trigger the implied duty of good faith and fair dealing is not necessary to the resolution of this case

¶80 The lead opinion opines that the duty of good faith and fair dealing can arise even when there is no breach of an express contract term. Lead opinion at 111-12. We have never before considered this question, as evidenced by the lead opinion’s citation to other jurisdictions in support of its proposition. Id. We should be cautious about weighing in on this question today. It concerns an area of significant debate among courts, and the question need not be addressed to resolve this case.
¶81 A leading treatise explains that courts are split on whether an express term must be breached before a breach of the implied covenant may be claimed:
While some courts allow a plaintiff to recover for breach of the duty of good faith and fair dealing even though there has been no breach of a specific contractual clause, provision or duty, perhaps the majority of courts declined to find a breach of the implied covenant of good faith and fair dealing absent breach of an express term of the contract. Under this view, there can be no independent cause of action brought for breach of the covenant of good faith and fair dealing, rather, the claim must be tied to an alleged breach of a specific contract term, often one that allows for discretion on the part of the party alleged to have violated the duty.
23 Williston & Lord, supra, § 63:22, at 514-16 (footnote omitted). We should be prepared to fully consider the conflicting state authorities before committing Washington to a position.
*142¶82 The authorities adopted by the lead opinion fail to set forth a clear line of reasoning for rejecting the necessity of a contract breach. In Carma Developers (California), Inc. v. Marathon Development California, Inc., 2 Cal. 4th 342, 826 P.2d 710, 6 Cal. Rptr. 2d 467 (1992), the California Supreme Court mused that requiring a breach of an express contract term to trigger a duty under the implied covenant would seem to make the covenant itself superfluous. Lead opinion at 112 (quoting Carma, 2 Cal. 4th at 373). But the conduct challenged as a breach of the implied duty in Carma “was expressly permitted by the [contract] and was clearly within the parties’ reasonable expectations.” 2 Cal. 4th at 376. Thus, it was a simple matter for the court to conclude that “such conduct can never violate an implied covenant of good faith and fair dealing.” Id.
¶83 The court in Carma did not consider what conduct would breach the implied duty in the absence of a breach of an express contract term. The closest the court came to such an inquiry was its acknowledgment that “[difficulty arises in deciding whether . . . conduct, though not prohibited, is nevertheless contrary to the contract’s purpose and the parties’ legitimate expectations.” Id. at 373. In other words, under Carma, conduct that is expressly permitted cannot constitute a breach of the implied duty; conduct that is not expressly permitted but also is not prohibited may constitute such a breach.9
¶84 Under the facts of this case and the posture of the parties’ arguments, we do not need to wade into this unsettled area of law. Unlike Carma, this case does not present a fact pattern where it is alleged that DSHS engaged in conduct that was neither expressly permitted by the contract nor expressly prohibited. Rather, the providers *143claim DSHS dealt itself discretionary authority to determine a future term of the contract. See Br. of Resp’ts Rekhter et al. at 24-30. I would conclude that it makes no difference in this case whether an express term must be breached to trigger the implied duty of good faith and save the broader question for another day.
B. The providers cannot prevail on their remaining claims for relief
¶85 The providers present a number of alternative theories under which they claim they are entitled to a judgment against DSHS. Because I would hold their contract claim must fail, I address the remaining claims that are not discussed by the lead opinion.10
1. A remedy under Failor’s Pharmacy is not available here
¶86 The providers argue in the alternative that the judgment against DSHS may be affirmed under this court’s decision in Failor’s Pharmacy v. Department of Social & Health Services, 125 Wn.2d 488, 886 P.2d 147 (1994). Because the lead opinion affirms the jury verdict on the good faith and fair dealing theory, it does not address the providers’ Failor’s Pharmacy argument. I would hold that Failor’s Pharmacy provides no relief to the providers.
¶87 The providers read Failor’s Pharmacy to instruct that “[a] party contracting with the State is entitled to recover underpayments resulting from an invalid regulation.” Br. of Resp’ts Rekhter et al. at 35. The provider’s argue that here, the SLR was invalidated and thus the providers are entitled to recover underpayments. But Failor’s Pharmacy cannot be read as broadly as the providers propose. There, the payment schedule at issue was not properly promulgated as a rule according to the Adminis*144trative Procedure Act (APA), chapter 34.05 RCW. Hence, this court concluded that the payment schedule was procedurally invalid. Failor’s Pharmacy, 125 Wn.2d at 497. In turn, it further suggested that the contract at issue was void and recognized that a “party is entitled to recover for losses on the void contract under the doctrine of quantum meruit.” Id. at 499.11
¶88 The contract at issue here is not void. Even if Failor’s Pharmacy could be read as broadly as the providers suggest, it is distinguishable from the present case. No party here has alleged, nor is there any finding, that the contract at issue was void as a result of the invalidation of the SLR. And, the SLR itself was not invalidated as a result of a procedural irregularity. See Jenkins, 160 Wn.2d at 300. Failor’s Pharmacy is not applicable here.12

2. The providers’ unjust enrichment claim was properly dismissed under CR 50

¶89 Respondent SEIU and provider Cindy Weens cross appeal in the alternative on the issue of unjust enrichment. The lead opinion need not reach this issue, but because I would reverse the judgment against DSHS, I must address it. I would affirm the trial court’s decision to grant DSHS’s CR 50 motion for judgment as a matter of law on the unjust enrichment claim. CP at 3447.
*145¶90 As an initial matter, a word of clarification about the nature of this claim is necessary. The trial court pointed out that the providers’ complaint sought recovery under theories of unjust enrichment and quantum meruit. CP at 1734. The trial court further explained that the providers filed their complaint before this court’s decision in Young v. Young, 164 Wn.2d 477, 191 P.3d 1258 (2008), drew a line between an unjust enrichment claim, or a claim premised on a contract implied-in-law, and a quantum meruit claim, or a claim premised on a contract implied-in-fact. CP at 1734; see Young, 164 Wn.2d at 483-85 (describing the difference between the theories).13 In their briefing before this court, the providers make reference to quantum meruit in their heading, Br. of Resp’ts SEIU Healthcare 775NW & Cindy Weens (Br. of SEIU) at 46, but then go on to “request that this Court reverse the trial court’s dismissal of the contract implied in law - or unjust enrichment - theory.” Id. at 47. Hence, what is before us is an unjust enrichment, or contract implied in law, claim.
¶91 As noted, the trial court granted DSHS’s motion for judgment as a matter of law under CR 50, following the close of the providers’ case in chief. “The standard on a motion for judgment as a matter of law mirrors that of summary judgment.” Aba Sheikh v. Choe, 156 Wn.2d 441, 447, 128 P.3d 574 (2006). Review of this issue is de novo, taking the facts in the light most favorable to the nonmoving party.
¶92 “A party to a valid express contract is bound by the provisions of that contract, and may not disregard the same and bring an action on an implied contract relating to the same matter, in contravention of the express contract.” Chandler v. Wash. Toll Bridge Auth., 17 Wn.2d 591, 604, 137 P.2d 97 (1943) (reviewing a claim premised on a contract implied in law). However, there may be an “ ‘implied con*146tract on a point not covered by an express one.’ ” Johnson v. Whitman, 1 Wn. App. 540, 546, 463 P.2d 207 (1969) (quoting Lautenbach v. Meredith, 240 Iowa 166, 35 N.W.2d 870, 871 (1949)).14 Thus, before addressing the elements for an unjust enrichment claim, the question is whether the express contract covers the matter at issue: the total amount of authorized hours DSHS agreed to pay the provider.15
¶93 The contract clearly contemplates this point. The terms of the contract state that “[t]he monthly payment for all services provided to any client will not exceed the amount authorized in the client’s Service Plan.” Appellants’ Opening Br., App. at 32 (Contract § 4(b)). Per the contract, the providers accept “the DSHS payment amount, together with any client participation amount, as sole and complete payment for the services provided under this Contract.” Id. (Contract § 4(c)). The contract also states that “DSHS will only reimburse the Contractor for authorized services provided to clients in accordance with this Contract’s Statement of Work and the client’s Service Plan.” Id. (Contract § 4(c)). Finally, the contract states that “DSHS will pay the Contractor only for authorized services provided under this Contract.” Id. (Contract § 5(b)).
¶94 The trial court correctly granted DSHS’s CR 50 motion because as a matter of law, a jury could not have *147found an implied contract on the same matter covered by the express terms of the contract.
¶95 In sum, none of the providers’ alterative claims prevail, and I would hold there is no basis in law to grant them relief.
C. The client class claim for monetary judgment should have been dismissed on summary judgment
¶96 The final issue to be resolved under my disposition of this case is whether the client class is entitled to a monetary judgment. The lead opinion holds that the client class cannot recover damages along with the providers because this would result in a double recovery. Lead opinion at 121. While I do not necessarily disagree with this analysis, because I would hold the providers are not entitled to recover at all, the double-recovery analysis is inapplicable to my resolution of this case. I would hold that the client class claims should have been dismissed on DSHS’s motion for summary judgment.
¶97 First, it is important to parse out the nature of the client class claims. As a class, the clients were allowed to join the providers’ claim for breach of contract or breach of the implied duty of good faith and fair dealing; as the lead opinion describes it, this was essentially a “pass through” claim. See lead opinion at 121. Under my resolution of this case, that theory of liability fails, so the client class is no more entitled to a monetary judgment grounded in contract than is the provider class. But the client class also sought recovery based on RCW 34.05.570(2) of the APA, Jenkins, and RCW 74.08.080(3).16 See CP at 11-32 (class action *148complaint). In essence, the client class sought monetary relief via RCW 74.08.080(3) under the theory that Jenkins had invalidated the SLR. The client class moved for summary judgment on the right to retroactive compensatory relief under RCW 74.08.080(3) as a result of the Jenkins decision. CP at 452 (Court’s Op. re Cross Mots, for Summ. J.). DSHS cross moved for summary judgment, arguing this claim was time barred as to most members of the class and barred for failure to exhaust administrative remedies as to the rest. The trial court granted summary judgment in favor of the client class on this issue and allowed the claim to proceed. CP at 455-56.
¶98 The trial court seemed to assume that because Jenkins invalidated the SLR, a claim for retroactive compensation was necessarily proved and the only question left was the measure of damages. CP at 455 (explaining, “I conclude that this court does have jurisdiction to decide the number of service hours wrongfully withheld from an in-home care recipient by application of the SLR and to award judgment to the recipient for retroactive compensation for those hours”). The trial court erred as a matter of law. I would hold that this claim should have been dismissed on summary judgment for the reasons DSHS advanced.17
¶99 Under RCW 74.08.080(2)(a), individuals must file a challenge to a public assistance determination within 90 days of the determination. Thus, every member of the client class who failed to do so is barred from recovery in this lawsuit. DSHS recognizes that a small subset of clients within the class had assistance determinations made within the 90 days preceding the filing of this complaint on *149May 4, 2007. While DSHS appropriately concedes that those clients are therefore not time barred from bringing a claim, those members of the client class are nevertheless barred from recovery because they did not exhaust their administrative remedies as required by RCW 34.05.534.

1. Statute of limitations and equitable tolling

¶100 Turning first to the statute of limitations questions, the client class argues that the time bar applicable to APA claims has no bearing on claims brought pursuant to RCW 34.05.570. Br. of Resp’ts Rekhter et al. at 60-61. They suggest a claim to invalidate agency rules can thus be brought at any time under RCW 34.05.542(1) and result in the retroactive restoration of benefits under RCW 74.08-.080(3). Id. at 59-61. This misapprehends the statutory scheme under the APA and chapter 74.08 RCW. A petition for judicial review may be filed at any time subject to other requirements of the APA or of another statute. RCW 34.05-.542(1). The requirements of the APA and another statute are fatal to the client class claims here. RCW 74.08-.080(2)(a) requires a challenge to a DSHS determination be brought within 90 days of the agency action. RCW 34.05-.542(2) requires a petition for judicial review of an agency order be brought within 30 days of service of the final order. Nothing in RCW 74.08.080(3) authorizes retroactive monetary damages for an untimely rule challenge that might have been substantively successful.
¶101 Insofar as the client class complaint sought to invalidate the SLR, it asked for prospective invalidation. CP at 32. The trial court appropriately recognized that the client class claim to invalidate the SLR was moot in light of Jenkins but that the class further claimed monetary relief, viz. back-benefits dating to April 2003. See CP at 454, 3474-75. Such a claim is fully subject to the statute of limitations that the legislature established to set a limit on the state’s exposure to liability. The trial court believed it could equitably toll the limitation provision in RCW 74.08-*150.080(3). 2 Pretrial Verbatim Report of Proceedings (VRP) at 247. As a matter of law, the trial court erred in so holding.18
¶102 Equitable tolling gives a court power in equity to set aside a judgment, even where the statute of limitations on a challenge to the judgment has run. Ames v. Dep’t of Labor & Indus., 176 Wash. 509, 30 P.2d 239 (1934). We have applied the doctrine sparingly because it essentially allows a judicial branch officer to override a legislative determination. See Leschner v. Dep’t of Labor & Indus., 27 Wn.2d 911, 185 P.2d 113 (1947). In Leschner, we explained:
[W]e must decline [to apply equitable tolling], for, in our opinion, it would be a dangerous path to follow. Such a rule could only be in disregard of the universal maxim that ignorance of the law excuses no one. What is more important, it would substitute for a positive rule established by the legislature a variable rule of decision based upon individual ideas of justice conceived by administrative officers as well as by the courts.
Id. at 926.19
¶103 The trial court’s oral ruling did not address our cautionary note in Leschner that equitable tolling cannot be used to set aside a positive rule established by the legislature. Instead, the trial court concluded that it could excuse *151any failure to timely challenge DSHS’s action because the disabled individuals comprising the client class were vulnerable and acted with diligence in bringing suit after Jenkins. See 2 Pretrial VRP at 244-45. This is not a sufficient basis to support equitable tolling.
¶104 Certainly our case law has recognized that some degree of vulnerability may allow for relief through equitable tolling. See Ames, 176 Wash. 509 (plaintiff adjudicated insane); Rodriguez v. Dep’t of Labor & Indus., 85 Wn.2d 949, 540 P.2d 1359 (1975) (plaintiff extremely illiterate and did not speak English). But while vulnerability may be a necessary condition, it is not alone sufficient. All of DSHS’s clients are, by definition, vulnerable. The legislature nonetheless established a limitation period for challenging DSHS actions. Recognizing the need to respect legislative choices, this court has required a particularized showing that applying a limitation period to the particular plaintiff would work an injustice. See Ames, 176 Wash, at 510 (applying equitable tolling where plaintiff did not receive notice of the action); Rodriguez, 85 Wn.2d at 950 (applying equitable tolling where plaintiff received notice but could not read it and had no interpreter); Kingery v. Dep’t of Labor & Indus., 132 Wn.2d 162, 174, 937 P.2d 565 (1997) (plurality explaining that equitable tolling applies where some infirmity prevents the plaintiff from understanding the action); id. at 179 (Alexander, J., dissenting) (explaining majority view that equitable tolling would apply if plaintiffs missed a statute of limitations due to “circumstances largely beyond their control”); Leschner, 27 Wn.2d at 927 (declining to apply equitable tolling where plaintiff was appropriately notified of action, though falsely told by doctor that he had submitted a claim, and pursued no further action despite no communication from the department for four years).
¶105 Here, there is no showing as to how the vulnerability of the members of the client class prevented them from timely challenging the actions taken by DSHS. Use of the SLR was spelled out in the Washington Administrative *152Code. Former WAC 388-71-0460 (2003); former WAC 388-72A-0095(c) (2003); former WAC 388-106-0130(3)(b) (2005); see Leschner, 27 Wn.2d at 926 (noting that ignorance of the law is no excuse). And, clients received notice whenever their benefits changed, either by reduction or increase. The clients argue that “DSHS notices to Clients during its operation of the SLR provided incorrect and affirmatively misleading information about the paid care for which the Clients were eligible and the SLR’s reduction of those benefits.” Br. of Resp’ts Rekhter et al. at 66. The trial court made no such finding, nor did it even mention any deficiencies in DSHS’s notices to the clients. The providers’ citations to the record in support of the alleged misleading information provided by DSHS are not convincing. It is true, as the providers argue, that some planned action notices alerted clients that their hours would be reduced without specifically explaining whether the reduction was a result of the SLR. Id. (citing CP at 1133). But it is difficult to see what difference that information would have made to the decision to appeal a reduction or termination of hours. The clients were told of the very reduction in benefits they now seek to have restored and were clearly advised how to and by when to appeal. See CP at 1133-35. Indeed, the client class does not show how the notices its members received differed from those other clients received during the relevant time period. The fact that the clients in Jenkins preserved and brought a timely challenge to the SLR demonstrates that the planned action notices were adequate.
¶106 Perhaps anticipating this conclusion, the client class argues that the action notices were categorically deficient in that they failed to disclose that the “right to an administrative appeal... was illusory because there was no jurisdiction over appeals of the SLR.” Br. of Resp’ts Rekhter et al. at 66-67. The problem with this view is that it misunderstands the administrative process. Although an administrative law judge cannot invalidate an agency rule *153in the course of determining a benefits challenge, the APA allows for the joining of a rule challenge to an administrative appeal, as the plaintiffs’ reliance on RCW 34.05.570 acknowledges. Indeed, this was the path followed by the plaintiffs in Jenkins. Moreover, an appeal may be filed directly in superior court, where it would be futile to exhaust administrative remedies. RCW 34.05.534(3). It proves too much to say that DSHS’s system of administrative appeals — mandated under the APA — is itself a basis to grant equitable tolling. If this were true, the limitation period under the APA would have no effect. In sum, the trial court erred when it concluded that the vulnerability of DSHS clients, and the nature of the administrative appeal process, justified equitable tolling. Such a conclusion would completely eviscerate the statute of limitations under RCW 74.08.080(2)(a) for each and every DSHS client.
¶107 Moreover, the trial court was incorrect that the clients acted with diligence, thus justifying the imposition of equitable tolling. The trial court reasoned that the clients and providers filed this complaint the day after Jenkins was decided. But it is difficult to understand how this constitutes diligence, other than diligence in seeking a retroactive application of the decision in Jenkins. As noted, there is no basis for such relief. The client class complaint appears to recognize as much because it frames its request for back benefits as an action under the APA and RCW 74.08.080 while (unnecessarily) asking for “prospective” invalidation of the SLR. CP at 31. While the plaintiffs are correct that retroactive relief is available in an action challenging the validity of an agency rule, the law also requires that such an action be timely.20 The majority of the *154clients in the class cannot avail themselves of a retroactive monetary recovery under Jenkins because their claims are barred by the statute of limitations. As to the subset of clients who filed timely challenges to agency action, their request for a monetary award is barred because they failed to exhaust their administrative remedies, and I turn now to that question.

2. Exhaustion of remedies

¶108 Some members of the client class challenge adverse decisions made within 90 days of the date this action was filed, May 4, 2007, thereby satisfying the statute of limitations in RCW 74.08.080(2)(a). However, they must still demonstrate that the court can excuse their failure to exhaust their administrative remedies. See RCW 34.05.534 (barring judicial review if administrative remedies are not exhausted). Once Jenkins was decided on May 3, 2007, claimants had an administrative remedy: the SLR was invalid and a challenge to its imposition would have resulted in a readjustment of hours. There can be no argument that seeking administrative relief would have been futile at this juncture, yet futility is the only argument the client class advances for not requiring exhaustion. Because this argument fails, I would hold that this subset of class plaintiffs cannot recover in this action.21
CONCLUSION
¶109 The implied duty of good faith and fair dealing arises only where the manner of performance leaves a contracting party discretion in fulfilling its obligations *155under the contract. Here, DSHS’s performance was not conditioned on an act of discretion but was governed by the statutes, rules, and regulations the agency was bound to follow. As a matter of law, there was no discretion implicating the implied duty of good faith and fair dealing, and the providers’ claim premised on this theory should have been dismissed. As the providers’ remaining claims are not viable, I would reverse the judgment in their favor. I would also reverse the order granting summary judgment on the client class claims, most of which are barred by the applicable statute of limitations and the remainder of which are barred by the failure to exhaust administrative remedies. Accordingly, I dissent.
Madsen, C.J., and Fairhurst and J.M. Johnson, JJ., concur with Stephens, J.
Reconsideration denied June 5, 2014.

 I agree with, the lead opinion’s analysis concluding DSHS preserved its issues on appeal and with its discussion of attorney fees. Thus, I do not address these issues.

 The Storek court explained that the rationale behind tests “for evaluating a promisor’s satisfaction relates to the familiar issue of whether a promise is illusory.” 100 Cal. App. 4th at 61. It noted:
Parallel reasoning applies when the promisor is expressly given absolute discretion to perforin and when the promisor’s performance is expressly conditional upon the promisor’s satisfaction. In both instances, courts will imply a covenant of good faith to limit the promisor’s express contractual authority only when necessary to create mutuality. [Where] the promisor has discretion to perform but has given other consideration or, when, as here, the promisor’s performance is conditional on his objectively reasonable satisfaction, then the promisor’s ability to avoid performance is sufficiently curtailed, the promise is not illusory, and the covenant of good faith and fair dealing need not be implied to create a binding promise.
Id. (emphasis added).

 Class representative Leya Rekhter has filed a brief with this court. So has named plaintiff Cindy Weens, along with the providers’ union, the Service Employees International Union (SEIU). I refer to these parties collectively as “the providers.” When citing to their briefing, I designate whether it is Rekhter’s brief or the brief of SEIU and Weens.

 The providers cite to a single instance in which they claim DSHS “acknowledged that the contracts vested it with discretion.” Br. of Resp’ts Rekhter et al. at 25 (quoting Verbatim Report of Proceedings at 1868-69). What the providers quote is argument by DSHS counsel on a CR 50 motion to dismiss the providers’ breach of contract claim (a claim that did not survive the jury’s review). In the face of DSHS’s repeated assertions that the contract did not contain a discretionary term and lacking any citation to testimony from DSHS employees about such discretion, it is unreasonable to conclude DSHS conceded this point.

 The lead opinion, claims that I would hold DSHS is “exempt from the duty of good faith and fair dealing,” lead opinion at 114, because I would distinguish the situation in Aventa from the one here. On the contrary, a government agency is certainly bound by good faith and fair dealing. But the CARE tool, and its *139relationship to the contract at issue here, is qualitatively different from the formula and contract at issue in Aventa.

 The other case the lead opinion relies on for the proposition that breach of an express term is not needed to give rise to the implied duty, Metavante Corp. v. Emigrant Sav. Bank, 619 F.3d 748, 766 (7th Cir. 2010), involved an allegation that one party’s performance lacked diligence. While this presents a classic example of a breach of the duty under the implied covenant, it is unhelpful here because no one is claiming a lack of diligence by DSHS in performing under the contract.

 I agree with the lead opinion’s resolution of the providers’ wage claims. Lead opinion at 121-23.

 The providers are not relying on Failor’s Pharmacy in support of a quantum meruit claim. See Br. of Resp’ts Rekhter et al. at 35-36 & n.15; Br. of Resp’ts SEIU Healthcare 775NW & Cindy Weens at 45-50.

 The providers argue that a “Failor’s Pharmacy remedy has been applied expressly to other DSHS failures to follow federal law.” Br. of Resp’ts Rekhter et al. at 36 (citing McGee Guest Home, Inc. v. Dep’t of Soc. & Health Servs., 96 Wn. App. 804, 810, 981 P.2d 459 (1999)). McGee does not apply the so-called Failor’s Pharmacy remedy. It distinguished Failor’s Pharmacy, noting that in McGee, the rates at issue did not qualify as rules under the APA. Id. at 812. The McGee court did not remand for a determination of damages under a theory of quantum meruit but rather remanded for entry of summary judgment in favor of DSHS. The providers quote language from McGee as though it expresses a holding. See Br. of Resp’ts Rekhter et al. at 36. In actuality, the quoted language comes from a portion of McGee that is simply relating the facts and the holding of Failor’s Pharmacy. McGee, 96 Wn. App. at 810. As noted, the McGee court does not extend Failor’s Pharmacy.

 But see 164 Wn.2d at 498 (Owens, J., dissenting) (arguing that “ ‘quantum meruit’ ” merely refers to the remedy available in either a claim premised on a contract implied in law or a contract implied in fact).

 DSHS quotes Young for the proposition that unjust enrichment may only be applied “ ‘absent any contractual relationship.’ ’’Appellant’s Reply/Cross Resp. Br. at 52 (quoting Young, 164 Wn.2d at 484). But the case to which Young cites for this proposition does not suggest that an unjust enrichment claim depends upon the absence of any contractual relationship. See Bailie Commc’ns, Ltd. v. Trend Bus. Sys., Inc., 61 Wn. App. 151, 810 P.2d 12 (1991). Moreover, the “absent any contractual relationship” language in Young seems at odds with what we have said in cases like Chandler. Finally, the “absent any contractual relationship” language was not germane to Young’s reasoning or holding, and Young is not a case where any express contract was at play. I would hesitate to elevate its “absent any contractual relationship” language to settled legal principle, as DSHS suggests we do.

 The providers have not characterized the matter at issue differently. But, they bypass the discussion of whether the issue here is controlled by the express contract and move directly to the elements of unjust enrichment. See Br. of SEIU at 48. That move is premature if the express contract covers the point in contention.

 The APA generally does not provide for monetary damages. However, the provision of the APA codified in RCW 34.05.574(3) allows a court to “award damages, compensation, or ancillary relief only to the extent expressly authorized by another provision of law.” RCW 74.08.080(3) provides that on a petition for judicial review of an agency action, “[i]f a decision of the court is made in favor of the appellant, assistance shall be paid from the date of the denial of the application for assistance.” Thus, the client class claim for back benefits is premised on RCW 74.08.080(3).

 The providers claim that DSHS failed to preserve a challenge to the trial court’s decision concerning the client class claims. There is no support in the record or briefing for this contention. DSHS’s timely notice of appeal clearly encompassed the trial court’s ruling on the client class. Its briefing assigns error to challenged portions of the trial court’s order concerning the client class and fully argues those points. Appellants’ Opening Br. at 7-8 (assignments of error 4, 5), 59-74 (argument); Appellants’ Reply/Cross Response Br. at 36-49 (argument).

 The providers argue that the standard of review to be applied to “the exercise of inherent equitable powers is the highly deferential ‘abuse of discretion’ standard.” Br. of Resp’ts Rekhter et al. at 63. The providers are mistaken. Whether a statute of limitation applies is a question of law that this court reviews de novo. Even if the providers are correct that the standard of review on this issue is abuse of discretion, the trial court misapplied the law, as I explain below, rendering its decision an abuse of discretion.

 Since Leschner, we have suggested that in order to avail one’s self of equitable tolling, the party seeking to circumvent a statute of limitations must show both an incompetency that prevented knowledge of the adverse determination and “some misconduct on the part of the [ageneyl in communicating its order to the claimant.” Kingery v. Dep’t of Labor & Indus., 132 Wn.2d 162, 174, 937 P.2d 565 (1997). But Kingery was a plurality, and there is no holding from this court limiting the application of equitable tolling to scenarios in which these two criteria were present. Appellants’ Opening Br. at 68-69; see Kingery, 132 Wn.2d at 179 (Alexander, J., dissenting) (explaining that while he agreed that equitable tolling allows a court to intervene to “protect those who are unable to protect themselves,” he would not limit it to incompetent persons).

 The client class claims that in Berry v. Burdman, 93 Wn.2d 17, 604 P.2d 1288 (1980), plaintiff Genevieve Gallow was awarded retroactive relief despite having failed to file a timely petition for review of the agency action. Br. of Resp’ts Rekhter et al. at 61 n.25 (citing CP at 3664). They cite to the complaint in the trial record in Berry, which states that plaintiff Gallow was notified of the agency action of September 29, 1976 and requested an administrative hearing on October 4, 1976. CP at 3664. This does not appear to support relief without regard to the *154timeliness of a petition; at any rate, the opinion in Berry does not itself provide support for the view that a court may set aside a statute of limitations and award retroactive monetary relief.

 In concluding that administrative actions would have been futile, the trial court noted the large number of individuals who would have had to file administrative challenges. See, e.g., 2 Pretrial VRP at 243, 247. To the extent the judge was suggesting the large number of claimants would have made an administrative appeal futile, there is not support for such a conclusion in the APA. A class is not excused from exhausting administrative remedies.