Court Opinion

ID: 4753545
Source: CourtListenerOpinion
Date Created: 2021-08-12 17:47:50.43559+00
Date Added: 2024-06-11T08:08:47.763433
License: Public Domain

Bridgewater, J.
¶52 (dissenting in part) I agree with the majority that the Davenport plaintiffs do not have a private cause of action for Washington Education Association’s (WEA) alleged violations of former RCW 42.17.760 (Laws of 1993, ch. 2, § 16). I also agree that the plaintiffs do not have a conversion claim for the nonmember fees at issue. However, to the extent the majority provides the plaintiffs with a restitution cause of action, which the plaintiffs did not seek in their complaint and which is not available to them in any event, I respectfully dissent.
¶53 As a threshold matter, I note that following oral argument in this remanded case, we asked the parties for supplemental briefing regarding whether “the undisputed *739facts support a claim for restitution.” Order Requesting Additional Briefing, Davenport v. Wash. Educ. Ass’n, No. 28375-1-II (Wash. Ct. App. May 13, 2008). In responding, the Davenport plaintiffs acknowledged that restitution is both a substantive cause of action based on unjust enrichment and a remedy for a contract or tort claim. As to any substantive claim, the Davenport plaintiffs admit that their amended complaint does not assert a cause of action for unjust enrichment. And indeed, the amended complaint does not mention restitution at all. They contend, however, that because CR 15(a) permits liberal amendment of pleadings,112 this court has the discretion to remand and permit the plaintiffs to add the unjust enrichment claim, which was broached for the first time on appeal. They further argue, however, that adding a new claim is not necessary because restitution is an appropriate remedy for the causes of action that were presented in their amended complaint.
¶54 Given the present procedural posture of this case, the Davenport plaintiffs’ amendment contention is both inappropriate and irrelevant. We are now reviewing whether the trial court properly denied WEA’s CR 12(c) motion for judgment on the pleadings. Accordingly, our present inquiry concerns what assertions and facts were before the trial court when the motion was denied. Judgment on the pleadings is reviewed de novo, and “we examine the pleadings to determine whether the claimant can prove any set of facts, consistent with the complaint, which would entitle the claimant to relief.” N. Coast Enters., Inc. v. Factoría P’ship, 94 Wn. App. 855, 858-59, 974 P.2d 1257 (emphasis added), review denied, 138 Wn.2d 1022 (1999); cf. Roth v. Bell, 24 Wn. App. 92, 94, 600 P.2d 602 (1979) (“In making the essentially legal determination [under CR 12(b)(6)] of whether there is any state of facts that the plaintiffs could prove entitling them to relief under their claim, we accept as true the factual allegations of the complaint and, where necessary, those facts raised for the first time on appeal.” (emphasis added)). While we may *740consider hypothetical facts when reviewing a decision on a CR 12(c) motion, we are nevertheless constrained by what claims were made to the trial court. Accordingly, consideration of claims that were not before the court below is inappropriate.
¶55 Regarding restitution as a remedy, the Davenport plaintiffs argue in essence that such a remedy would be appropriate because each of their claims is based on WEA’s misuse of the plaintiffs’ money. Similarly, the majority holds that WEA’s subsequent failure to comply with former RCW 42.17.760’s requirements make the agency fees at issue available to the plaintiffs under a restitution theory. See majority at 735.113
¶56 In my view the Washington Supreme Court’s prior opinion in this case resolves the matter of whose money is at issue. In the prior treatment of this case, our state Supreme Court analyzed the provisions and effect of former RCW 42.17.760, its interplay with other portions of chapter 42.17 RCW, and other relevant legislation. The court also determined that former RCW 42.17.760 violated the First Amendment. See State ex rel. Pub. Disclosure Comm’n v. Wash. Educ. Ass’n, 156 Wn.2d 543, 568-71, 130 P.3d 352 (2006), rev’d sub nom. Davenport v. Wash. Educ. Ass’n, 551 U.S. 177, 127 S. Ct. 2372, 168 L. Ed. 2d 71 (2007). The United States Supreme Court reversed on the federal constitutional question and remanded. Davenport, 551 U.S. at 191-92. But the reversal on the federal constitutional issue does not otherwise affect our state Supreme Court’s interpretation of chapter 42.17 RCW, and we are bound by our state Supreme Court’s interpretation of state law. See State v. Gore, 101 Wn.2d 481, 487, 681 P.2d 227 (1984) (“once this court has decided an issue of state law, that interpretation is binding on all lower courts until it is overruled by this court”). I now turn to that decision.
*741¶57 Under RCW 41.59.060(2) and RCW 41.59.100, WEA is authorized to collect fees and dues from union members and to collect equivalent agency fees from nonunion members. Accordingly, WEA is statutorily empowered to collect and possess agency fees. Former RCW 42.17.760 provides that a labor organization “may not use” agency shop fees for political expenditures “unless affirmatively authorized by the individual” who paid the fees. By its terms, former RCW 42.17.760 limits the union’s use of the fees, but not its right to collect or possess them. As our state Supreme Court has determined, former RCW 42.17.760 “acknowledges that the fees are in the union’s possession but places restrictions on the use of the union’s funds for political speech.” See State ex rel. Pub. Disclosure Comm’n, 156 Wn.2d at 569 (second emphasis added).
¶58 I acknowledge the United States Supreme Court’s subsequent remark in Davenport, describing former RCW 42.17.760 as a “condition placed upon the union’s extraordinary state entitlement to acquire and spend other people’s money.” Davenport, 551 U.S. at 187. I also recognize, as explained below, that the comment is dicta and is not binding. See State v. Potter, 68 Wn. App. 134, 149 n.7, 842 P.2d 481 (1992) (dicta is language not necessary to the decision in a particular case); see also Blackburn v. Safeco Ins. Co., 49 Wn. App. 423, 425, 744 P.2d 347 (1987), aff’d, 115 Wn.2d 82, 794 P.2d 1259 (1990) (dicta is not binding).
¶59 In Davenport, Justice Scalia writing for the Supreme Court framed the issue as follows:
The State of Washington prohibits labor unions from using the agency-shop fees of a nonmember for election-related purposes unless the nonmember affirmatively consents. We decide whether this restriction, as applied to public-sector labor unions, violates the First Amendment.
Davenport, 551 U.S. at 180 (emphasis added). The Supreme Court concluded as follows: “We hold that it does not violate the First Amendment for a State to require that *742its public-sector unions receive affirmative authorization from a nonmember before spending that nonmember’s agency fees for election-related purposes.” Davenport, 551 U.S. at 191 (emphasis added).
¶60 In the course of its analysis, the Supreme Court stated, “As applied to public-sector unions, [former RCW 42.17.760] is not fairly described as a restriction on how the union can spend ‘its’ money; it is a condition placed upon the union’s extraordinary state entitlement to acquire and spend other people’s money.” Davenport, 551 U.S. at 187. This comment was made in the context of the Supreme Court’s rejecting WEA’s attempt to apply in this circumstance Supreme Court cases that directed rigorous First Amendment scrutiny. See Davenport, 551 U.S. at 187. WEA’s argument built upon “the Washington Supreme Court’s description of [former RCW 42.17.760] as encumbering funds that are lawfully within a union’s possession.” Davenport, 551 U.S. at 186. WEAthen argued that “[former RCW 42.17.760] is a limitation on how the union may spend ‘its’ money” and relied on the First Amendment rigorous scrutiny cases to argue that former RCW 42.17.760 was unconstitutional because it applied to ballot propositions and did not limit equivalent election-related expenditures by corporations. Davenport, 551 U.S. at 186. In rejecting WEA’s attempt to apply federal First Amendment cases in this context, the Supreme Court stated:
The Supreme Court of Washington’s description of [former RCW 42.17.760] notwithstanding, our campaign-finance cases are not on point. For purposes of the First Amendment, it is entirely immaterial that [former RCW 42.17.760] restricts a union’s use of funds only after those funds are already within the union’s lawful possession under Washington law. What matters is that public-sector agency fees are in the union’s possession only because Washington and its union-contracting government agencies have compelled their employees to pay those fees. The cases upon which respondent relies deal with governmental restrictions on how a regulated entity may spend money that has come into its possession without the assistance of governmental coercion of its employees. As applied to public-*743sector unions, [former RCW 42.17.760] is not fairly described as a restriction on how the union can spend “its” money; it is a condition placed upon the union’s extraordinary state entitlement to acquire and spend other people’s money.
Davenport, 551 U.S. at 187 (first emphasis added) (citations omitted).
¶61 As can be seen, the Supreme Court was rejecting the application of its First Amendment cases as WEA was trying to apply them. The Supreme Court did not, however, reject the notion that the money was lawfully in WEA’s possession. Although the Supreme Court throughout the opinion describes WEA’s collection of agency fees as extraordinary, it also acknowledged the propriety of that circumstance under state law. The Supreme Court recognized that
[t]he State of Washington has authorized public-sector unions to negotiate agency-shop agreements. Where such agreements are in effect, Washington law allows the union to charge nonmembers an agency fee equivalent to the full membership dues of the union and to have this fee collected by the employer through payroll deductions.
Davenport, 551 U.S. at 181-82 (citing RCW 41.56.122(1); RCW 41.59.060(2), .100). The Supreme Court further stated:
The public-sector agency-shop arrangement authorizes a union to levy fees on government employees who do not wish to join the union. Regardless of one’s views as to the desirability of agency-shop agreements, it is undeniably unusual for a government agency to give a private entity the power, in essence, to tax government employees. As applied to agency-shop agreements with public-sector unions like respondent, [former RCW 42.17.760] is simply a condition on the union’s exercise of this extraordinary power, prohibiting expenditure of a nonmember’s agency fees for election-related purposes unless the nonmember affirmatively consents.
Davenport, 551 U.S. at 184 (emphasis added) (citation omitted). The Supreme Court went on to conclude that *744former ROW 42.17.760’s affirmative authorization requirement does not offend the First Amendment. Davenport, 551 U.S. at 191.
¶62 As these passages demonstrate, the Supreme Court simply decided a narrow constitutional issue. A careful reading of the decision reveals that the Supreme Court did not disapprove or contradict the notion that the agency fees were lawfully collected by WEA. Accordingly, we are bound by the Washington Supreme Court’s determination that WEA lawfully collected and held the agency fees in its possession, and that former RCW 42.17.760 places “restrictions upon the use of the union’s funds.” State ex rel. Pub. Disclosure Comm’n, 156 Wn.2d at 569 (second emphasis added). The majority agrees that the WEA became “the sole owner and possessor of the money transferred.” Majority at 723 (see its discussion regarding “conversion”).
¶63 I disagree with the majority that restitution is available in any event under the circumstances of this case. Restitution is available where one person is unjustly enriched at the expense of another. Dragt v. Dragt/DeTray, LLC, 139 Wn. App. 560, 576, 161 P.3d 473 (2007), review denied, 163 Wn.2d 1042 (2008). Unjust enrichment is an equitable principle. Dragt, 139 Wn. App. at 576. “A person has been unjustly enriched when he has profited or enriched himself at the expense of another contrary to equity.” Dragt, 139 Wn. App. at 576 (emphasis added).
¶64 Enrichment alone will not trigger the doctrine; “the enrichment must be unjust under the circumstances and as between the two parties to the transaction.” Dragt, 139 Wn. App. at 576 (emphasis added). “Three elements must be established for unjust enrichment: (1) there must be a benefit conferred on one party by another, (2) the party receiving the benefit must have an appreciation or knowledge of the benefit, and (3) the receiving party must accept or retain the benefit under circumstances that make it inequitable for the receiving party to retain the benefit without paying its value.” Dragt, 139 Wn. App. at 576 (emphasis added).
*745¶65 The majority holds that assuming WEA violated former RCW 42.17.760’s preauthorization requirements, such violation rendered its retention of the agency fees unjust, thereby triggering the availability of restitution. See majority at 735. This approach fails for two reasons. First, the nature of the interest arising under former RCW 42.17.760 and devolving to nonmember payers of agency fees is a limited interest. WEA could have used the money in question for any expenditure apart from political purposes — e.g., negotiation expenses, travel, meals, lodging, or conference expenses. As noted, former RCW 42.17.760 places an additional burden on the union to first seek affirmative authorization from the individual payer of the fee before the union may use for political purposes the fee that is lawfully in the union’s possession. Accordingly, the interest devolving to the payer under former RCW 42.17.760 is essentially a veto power on the use of the fee and does not arise until and unless the union seeks to use the fee for political purposes. Thus, the limited interest arising from the statute may best be described as contingent or inchoate, but not possessory.114
¶66 Secondly, a prerequisite for restitution is not met here. WEA’s retention of the agency fees is not contrary to equity under the circumstances. “Equity seeks fairly to protect all parties who act fairly.” Chambers v. Cranston, 16 Wn. App. 543, 546, 558 P.2d 271 (1976), review denied, 89 Wn.2d 1006 (1977). Moreover, as explained in Nugget Properties, Inc. v. Kittitas County, 71 Wn.2d 760, 767, 431 P.2d 580 (1967) (quoting 3 John Norton Pomeroy & Spence *746W. Symons, A Treatise on Equity Jurisprudence § 818 (5th ed. 1941)):
“Acquiescence consisting of mere silence may also operate as a true estoppel in equity to preclude a party from asserting legal title and rights of property, real or personal, or rights of contract.. .. A fraudulent intention to deceive or mislead is not essential. All instances of this class, in equity, rest upon the principle: If one maintain silence when in conscience he ought to speak, equity will debar him from speaking when in conscience he ought to remain silent.”
In my view, when weighing equities in this case, the Davenport plaintiffs’ silence and failure to act when they were invited to get their agency fees rebated weighs heavily against them.
¶67 Here, a sufficient avenue was available to ensure nonmembers’ rights not to participate in the union’s political activities, and included a nonjudicial procedure to obtain rebates of that portion of the agency fees that would go to support the union’s political activities. A process by which the union notifies the nonmember of its political activities and provides for rebates of fees to dissenting nonmembers was established by the United States Supreme Court in Chicago Teachers Union, Local No. 1 v. Hudson, 475 U.S. 292, 106 S. Ct. 1066, 89 L. Ed. 2d 232 (1986). As the Washington Supreme Court determined, those procedures were followed here. See State ex rel. Pub. Disclosure Comm’n, 156 Wn.2d at 549-51.
¶68 During the relevant time period (1996 to 2000), WEA sent a “Hudson packet” twice each year to each nonmember. The packet provided financial information about WEA and its activities. The packet also included a letter notifying the employee of his or her right to object to paying fees for the union’s political expenditures (nonchargeable expenditures). The packet gave the nonmember three choices: (1) pay agency shop fees equivalent to 100 percent of dues; (2) object to paying 100 percent and receive a rebate of nonchargeable expenditures, as calculated by WEA; or (3) object to paying 100 percent and challenge *747WEA’s calculations of nonchargeable expenditures. See State ex rel. Pub. Disclosure Comm’n, 156 Wn.2d at 550.
¶69 When a nonmember challenged WEA’s calculation of nonchargeable expenditures, an arbitrator determined the amount of the nonmember’s fees that should be rebated. Pending the outcome of the arbitration, WEA escrowed any fees that were reasonably in dispute. WEA rebated to the employee the amount determined by the arbitrator and transferred the remainder to WEA’s general account. During the years 1996 to 2000, the rebates ranged from $44 to $76. See State ex rel. Pub. Disclosure Comm’n, 156 Wn.2d at 550-51. Nonmembers who did not object and did not request rebates did not receive rebates. Their fees were transferred from escrow to WEA’s general account from which political expenditures were made. See State ex rel. Pub. Disclosure Comm’n, 156 Wn.2d at 551.
¶70 As can be seen, the Hudson procedures followed here notify nonmembers of the union’s political activities and essentially invite nonmembers to obtain rebates through a convenient, nonjudicial procedure in instances where they do not agree with the union’s political activities. As the Washington Supreme Court determined, these procedures “protect dissenters’ rights not to participate in the union’s political speech.” State ex rel. Pub. Disclosure Comm’n, 156 Wn.2d at 569.115
¶71 To summarize, our Supreme Court has determined that the agency funds at issue are WEA’s funds, and that the Hudson procedures employed by WEA protect the plaintiffs’ rights. Also, any interest devolving to agency fee payers under former RCW 42.17.760 is contingent and limited. Moreover, the plaintiffs here failed to use the simple, nonjudicial rebate mechanism available to them *748under the Hudson procedures. Under these circumstances, balancing the equities, it cannot be said that WEA’s retention of the agency fees is unjust. Accordingly, restitution is not triggered. Dragt, 139 Wn. App. at 576.
¶72 I additionally observe that Nelson v. Appleway Chevrolet, Inc., 160 Wn.2d 173, 157 P.3d 847 (2007), upon which the majority relies to bolster its decision to provide a cause of action for restitution, is inapposite.116 First, the case is factually distinguishable in several ways: (1) it dealt with a sales transaction, (2) the defendant car dealership took money from its customers in violation of a statute,117 and (3) the customer plaintiffs asserted a claim for unjust enrichment. None of those circumstances is present here. Also, in Nelson a claim for unjust enrichment was the only means that plaintiffs had to recover money that had been improperly taken from them by the dealership. Again, that is not the case here because the Davenport plaintiffs have a nonjudicial means of recovery (i.e., the Hudson procedures) as to the agency fees in question; but plaintiffs here failed to utilize that process. Moreover, in light of the facts of Nelson, application of restitution as an equitable remedy makes more sense in that case than in the Davenport case.
¶73 Aside from being factually distinguishable, the rationale utilized in Nelson is not applicable here. Relying on a tentative draft of the Restatement (Third) of Restitution, Nelson explained that
[t]he original justification [for restitution] has given way to a modern understanding, based on a transaction’s legal validity. Specifically, any transaction not adequately supported by law is voidable. See [Restatement (Third) of Restitution and Unjust Enrichment § 1 cmt. b at 3 (Discussion Draft 2000)] (“Unjustified enrichment is enrichment that lacks an adequate legal *749basis: it results from a transfer that the law treats as ineffective to work a conclusive alteration in ownership rights”). Because Appleway illegally charged Nelson the [business & occupation] tax as an additional cost to the final purchase price, Appleway has been unjustly enriched with money properly belonging to Nelson.
Nelson, 160 Wn.2d at 187-88 (emphasis added). As noted, there is no similar “transaction” in the present case. As previously discussed, the union properly obtained the agency fees from the plaintiffs as authorized by statute. Accordingly, the union legally possessed the funds, our Supreme Court has so held, and we are bound by that determination. Thus, the present case does not concern an improper transfer of possessory interest as was the case in Nelson, and for that reason Nelson is simply not helpful here.
¶74 Finally, at its heart, this case is about what remedy is appropriate for a violation of former RCW 42.17.760. In my view, the enforcement mechanisms provided in chapter 42.17 RCW118 provide the appropriate remedies for violation of that chapter’s provisions, as we have previously recognized in Crisman v. Pierce County Fire Protection District No. 21, 115 Wn. App. 16, 60 P.3d 652 (2002).119
¶75 In Crisman, the appellant argued that chapter 42.17 RCW’s enforcement mechanisms compensated only the public for chapter violations, and that private tort claims for such violations would enhance enforcement of chapter prohibitions and provide compensation for individual victims. We rejected appellant’s argument that private claims were available, noting that chapter 42.17 RCW “authorizes enforcement by the attorney general or county prosecutor and finally by a citizen in the name of the state. RCW 42.17.400.” Crisman, 115 Wn. App. at 23. We further held:
*750Chapter 42.17 RCW sets out various enforcement procedures and provides for both legal and equitable remedies. But the various remedies RCW 42.17.390 authorize suggest that the legislature intended not to create private causes of action to enforce the code, but to give the attorney general, county prosecutor, or citizen enforcer considerable latitude in seeking the appropriate relief. We conclude that chapter 42.17 RCW does not imply a private cause of action.
Crisman, 115 Wn. App. at 24; see also Vance v. Offices of Thurston County Comm’rs, 117 Wn. App. 660, 670, 71 P.3d 680 (2003) (“RCW 42.17.400 provides the remedy for violations of chapter 42.17 RCW and specifies that the attorney general or the local prosecuting attorney may bring an action to enforce this chapter.”), review denied, 151 Wn.2d 1013 (2004).120 Consistent with Crisman, I would hold that none of the Davenport plaintiffs’ claims asserted in their amended complaint is available.
¶76 In sum, this court’s sua sponte provision of a new cause of action for restitution is neither warranted nor appropriate. The newly imposed cause of action for restitution is the only basis found by the majority for affirming the trial court’s denial of WEA’s motion for judgment on the pleadings. Because I do not believe restitution is available, I would reverse the trial court’s denial of WEA’s CR 12(c) motion and remand for dismissal.121
Review granted at 166 Wn.2d 1005 (2009).

 This superior court rule provides that a trial court’s discretionary leave to amend the pleadings “shall be freely given when justice so requires.” CR 15(a).

 The majority so holds relying on foreign cases, and by analogizing to RAP 12.8, which provides for return of property or money paid pursuant to a judgment that is later reversed or modified on appeal.

 Notably, that interest has heen substantially eroded by a recent amendment to the statute. Effective May 2007, a second section was added to RCW 42.17.760, which reads, “[a] labor organization does not use agency shop fees when it uses its general treasury funds to make such contributions or expenditures if it has sufficient revenues from sources other than agency shop fees in its general treasury to fund such contributions or expenditures.” RCW 42.17.760(2) (Laws or 2007, ch. 438, § 1). The amendment redefines the triggering event for the union’s duty to seek affirmative authorization and limits the payer’s limited veto power to those instances where the union cannot show sufficient other funds to cover the campaign contribution.

 Notably, the plaintiffs point to no instance of the union’s failure to provide fee rebates under the Hudson procedures. Further, while the plaintiffs contended that the Hudson procedures did not adequately protect their rights, the Washington Supreme Court rejected that notion, holding that “[t]he union’s Hudson procedures protect dissenter’s rights.” State ex rel. Pub. Disclosure Comm’n, 156 Wn.2d at 569.

 In calling for supplemental briefing, we also asked the parties to address whether Nelson applied to this case.

 The Nelson court held that the dealership’s practice of adding on the business’s business & occupation tax to car sales after the parties had negotiated a final sale price was “explicitly forbidden by [RCW 82.04.500].” Nelson, 160 Wn.2d at 181.

 See RCW 42.17.390 (designating civil remedies and sanctions); see also RCW 42.17.400 (providing for enforcement by the attorney general, local prosecutor, or by a citizen’s action in the name of the state).

 The trial court did not have the benefit of our decision in Crisman, which was published after the order now under review.

 Moreover, under RCW 42.17.400, the plaintiffs can bring an action (a citizen’s action in the name of the state) only if the attorney general or the prosecuting attorney fails to act after receiving notice of possible violations. See State ex rel. Evergreen Freedom Found. v. Nat’l Educ. Ass’n, 119 Wn. App. 445, 452-53, 81 P.3d 911 (2003); Vance, 117 Wn. App. at 670; Crisman, 115 Wn. App. at 22.

 Because I would dismiss, it is not necessary to address the statute of limitations or class certification issues.