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McCurry v. Chevy Chase Bank, No. 81896-7. When Chris and Anne McCurry paid off their mortgage with Chevy Chase Bank, the total amount as itemized by the Bank included a $20 fax fee and a $2 notary fee. After paying the full amount, they filed this class action lawsuit. The McCurrys allege breach of the terms of the deed of trust, unjust enrichment, and violation of the Washington Consumer Protection Act. The Bank responded by arguing that federal regulations preempt these state law claims. The King County Superior Court agreed and dismissed the McCurry's complaint; the Court of Appeals affirmed.

The Court today first addresses the standard necessary to grant a motion to dismiss for failure to state a claim. While federal courts have recently made it more difficult for plaintiffs to survive motions to dismiss, the State Supreme Court refuses to follow that course here. The majority notes that "[t]he appropriate forum for revising the Washington rules is the rule-making process."

The Court holds that the McCurry's state contract law claims, including the unjust enrichment claim, are not preempted by federal lending laws or regulations.

State contract law does not purport to impose requirements on loan-related fees; state contract law instead requires parties to adhere to the terms of their contracts. Forcing Chevy Chase to adhere to the terms of its contract only incidentally affects the loan-related fees....

The Court further holds that the Consumer Protection Act claim survives to the extent that it relates to misrepresentation of the contract terms, but that it is preempted if the allegation is that the Act "regulates how or when fax or notary fees (loan-related fees) can be charged...."

The majority opinion is written by Justice Sanders and joined by five other justices. It strongly takes to task the dissent, authored by Justice James Johnson and joined by Justices Charles Johnson and Susan Owens, alleging that "the dissent's novel interpretation of preemption would prevent Washington consumers from enforcing contracts against federal savings associations."  (briefs and argument)

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American Best Food, Inc., et al. v. Alea London, LTD., No. 80753-1. American Best Food owned the Federal Way dance club Café Arizona. Michael Dorsey was shot nine times in front of the club. Security guards carried him inside, but then carried him back out and "dumped him on the sidewalk." Dorsey sued the Café for failing to protect him from criminal conduct and for exacerbating his injuries after the assault. The Café's insurer, Alea London, refused to indemnify or defend the Café because the policy excluded "injuries or damages 'arising out of' assault or battery." The Café sued Alea for breach of contract, bad faith, and violation of the Consumer Protection Act. The trial court granted summary judgment for Alea, but the Court of Appeals reinstated the contract and bad faith claims and held that Alea had breached its duty to defend.

The Supreme Court today sustains the lower court, holding that "Alea's failure to defend based upon a questionable interpretation of law was unreasonable and Alea acted in bad faith as a matter of law." Justice Chambers wrote for the five-member majority. Justice Owens, with three other justices, dissented as to the finding of bad faith. (briefs, argument)

Columbia Physical Therapy v. Benton Franklin Orthopedic Associates, No. 81734-1. Are physical therapists engaged in the practice of medicine? Benton Franklin Orthopedic Associates (BFOA) refers many of its patients to Benton Franklin Physical Therapy (BFPT), which it also controls through common ownership. Columbia, one of BFPT's competitors, sued alleging violations of the corporate practice of medicine doctrine (link to PDF), The Professional Services Corporation Act (PSCA) (RCW 18.100), the antirebate statute (RCW 19.68), and the Consumer Protection Act (RCW 19.86). The trial court granted BFOA summary judgment on the PSCA claim and certified the other issues to the Court of Appeals, which denied review.

The Court today holds that physical therapy is included in the definition of the practice of medicine. The Court upholds the grant of summary judgment on the PSCA claim and directs the trial court to enter summary judgment also in BFOA's favor on the corporate practice of medicine and antirebate statute claims. Because Columbia did assert facts that, if proven, would constitute breaches of the CPA, the Court upholds the trial court's refusal to grant summary judgment on the issue and remands for trial. Justice Owens wrote for the unanimous Court. (briefs--including 28 amicus briefs, argument)

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Ambach v. French County, No. 81107-5. Teresa Ambach sued a doctor alleging, among other causes of action, that he performed an unnecessary surgery on her in violation of the Consumer Protection Act. The trial court granted summary judgment to the doctor and imposed sanctions against Ambach's attorneys related to the CPA claim. The Court of Appeals reversed, and is today overturned. Here, the Supreme Court holds that personal injury damages are not covered by the CPA because they "do not constitute injury to business or property" as required by the Act. Justice Madsen authored the majority opinion, which seven other justices signed. Justice Chambers concurred, stressing "that there is nothing in our jurisprudence that should prevent a patient from bringing a CPA claim against a doctor who falsely and deceptively prescribed unnecessary or unnecessarily expensive surgeries as part of a business strategy." (briefs and argument).

Noble v. Safe Harbor Family Preservation Trust, No. 80873-2. The Nobles own land on Hood Canal that is only accessible through land owned by others, including the Safe Harbor property and another parcel owned by Tillicum Beach, Inc. The Nobles sued Safe Harbor to condemn a private right of way of necessity. Safe Harbor defended that there were other possible routes, but did not name any other property owners. The Nobles amended their claim to add Tillicum as an alternate condemnee. The trial court granted the Nobles a right of way through the Safe Harbor land. The trial court also granted Tillicum's motion for attorney fees from Safe Harbor and the Noble's motion to decrease the attorney fee award from the Nobles to Safe Harbor. The Court of Appeals affirmed. The Supreme Court reverses the award of attorney fees to Tillicum but upholds the reduce the attorney fees due Safe Harbor from the Nobles. The Court holds that RCW 8.24.030 grants the trial court broad discretion in awarding attorney fees in condemnation actions, but does not permit a trial court to penalize a potential condemnee from raising the defense of a possible alternate route. Justice Charles Johnson authored the majority opinion and is joined by four other justices. The Chief Justice, joined by Justice Fairhurst, concur except that they would not remand to the trial court on the issue of whether the Nobles must pay attorney fees to Tillicum since the issue was not briefed. Justice Chambers dissents. (briefs and argument).

State v. Kilgore, No. 81020-6. Mark Kilgore was convicted by a jury of seven counts of sexual crimes against children. An "exceptional" sentence of 560 months was imposed. Two counts were reversed on appeal. After his direct appeal was over but before the trial court had corrected the judgment and sentence, the Supreme Court of the United States decided Blakely v. Washington. If Kilgore's case is considered final before that decision was issued, it does not apply retroactively to his sentence. He asserts that his case was not final and that he should be resentenced according to Blakely. Today, the Supreme Court upholds the lower courts and findes that Kilgore's case was final before Blakely. Justice Fairhurst authored the majority opinion. Justice Sanders, joined by Justice Madsen, dissent. (briefs and argument).

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The Court today issued opinions in a Consumer Protection Act case and a criminal case.

Panag v. Farmers Ins. Co., of WA & Credit Control Servs., Inc., No. 80357-9 (consolidated with Stephens v. Omni Ins. Co. & Credit Control Servs., Inc., No. 80366-8). Justice Madsen writes for a five-member majority, expanding the reach of the Consumer Protection Act to "unfair or deceptive efforts to collect on an insurance subrogation claim...." Plaintiffs Panag and Stephens had each been involved in a car accident while uninsured. Farmers and Omni, insurers of the other parties in the accidents, hired Credit Control Services (CCS) to collect some or all of the "uninsured motorist benefits" paid to their customers. CCS sent several strident letters to Panag and Stephens, purporting to be debt collection notices. The majority holds that "a CPA claim may be predicated on the deceptive characterization of an unadjudicated insurance subrogation claim as a liquidated debt that must be immediately paid."

Justice Charles Johnson, joined by Justices Alexander, Owens, and James Johnson, dissents, accusing the majority of rewriting the CPA "far beyond its express reach." The dissenters point out that the CPA is about consumer protection. "The CPA was not designed to nor should it be rewritten to regulate relationships arising out of tortious conduct." (Case briefs and arguments.)

State v. Depaz, No. 80574-1. Justice Owens writes for five members of the Court; Justice Madsen, joined by the balance of the Justices, concurrs with the result but not the analysis. Depaz challenged his conviction for first degree rape of a child based on the trial court's removal of juror #3, the lone holdout. The juror had briefly talked with her husband about the case, apparently because their grandson was undergoing surgery and they were concerned about how long the deliberations would last. Juror #3's husband had told her to "stick to her guns," and for this she was excused. While the Court agrees with the trial court that the juror's actions constituted misconduct, the Court finds that the misconduct was not prejudicial and so removing Juror #3 was an abuse of discretion. (Case briefs and arguments.)

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