In The News

Recent Appellate Decisions – September 7 to September 13, 2012

Selected summaries prepared by Commissioner James Verellen (ret.)

Washington Supreme Court

September 13, 2012

Cregan v. Fourth Memorial Church No. 86835-2

http://www.courts.wa.gov/opinions/index.cfm?fa=opinions.showOpinion&filename=868352MAJ

recreational use immunity – limited to property open to general public

The recreational use immunity statute grants immunity to owners of property “who allow members of the public to use [the property] … for purposes of outdoor recreation … without charging a fee of any kind…”  RCW 4.24.210.

Fourth Memorial Church owns the Riverview Bible Camp, and rents the camp out to secular or Christian groups. “Individuals and walk-ins are not allowed.”  In 2008, the Church granted a fee waiver to allow a group to use the camp.  Cregan was with that group and served as the group’s volunteer nurse.  Cregan was injured when using a recreational slide at the camp.  Cregan sued the Church.  The Church asserted recreational use immunity.  The trial court ruled that the immunity was not available to the Church as a matter of law.  The Washington Supreme Court granted direct discretionary review.

The Supreme Court (9-0) affirmed the trial court:

  • “The purpose of the [recreational use immunity] statute is to encourage landowners to open their lands to the public for recreational use by limiting their liability toward persons entering thereon.”
  • “If the property is not open to the public, then immunity does not attach.”  Free access alone does not qualify the injured person as a member of the public.
  • “Landowners who open their lands to the public may be able to restrict some access and still qualify for recreational use immunity, but the line between what is considered ‘public’ despite some restriction and only private use will depend on the specific facts at hand.”
  • Permissible restrictions could include the types of recreational activity allowed, such as hiking but not hunting, or limiting access to nonbusiness hours. (Reasonable restrictions such as requiring minor children to be accompanied by an adult are also permissible.)
  • “To qualify for immunity under the statute, however, a landowner cannot restrict access by discriminating against the use based on personal traits”
  • “The [Church’s] rental policy restricts the users based on their religious affiliation.”
  • Because the camp was not open to the public, the recreational use immunity does not apply.

Loeffelholz v. University of Washington No. 86511-6

http://www.courts.wa.gov/opinions/index.cfm?fa=opinions.showOpinion&filename=865116MAJ

discrimination – hostile work environment – amendment to include sexual orientation not retroactive – under unique facts, postamendment comment considered in context of preamendment acts is actionable

Effective June 7, 2006, the Washington Law Against Discrimination was amended to add sexual orientation as a protected class.

Loeffelholz worked at the University of Washington, where Lukehart was her supervisor from 2003 until early 2006.  June 23, 2006, was Lukehart’s last day of employment before he was deployed to Iraq.  In 2009, Loeffelholz sued the University of Washington and Lukehart for discrimination based on her sexual orientation. She alleged hostile work environment, retaliation and disparate treatment claims.

With one exception, Loeffelholz’s  allegations were based on acts prior to the June 7, 2006 effective date of the amendment.  Those included Lukehart inquiring whether Loeffelholz was gay, directing her not to “flaunt it” around him, stating that he has anger management issues and that he kept a gun in his car, as well as revoking her flexible work schedule, denying her overtime, and denying her advancement opportunities.  The one possible postamendment act was Lukehart’s statement in a group meeting before he was deployed, that he was “going to come back a very angry man” from Iraq.  The date of that “angry man” comment is not certain.

The trial court granted summary judgment dismissing all claims based on the applicable statutes of limitations.  The trial court concluded that it was not reasonable to say that Lukehart’s “angry man” comment was motivated by Loeffelholz’s sexual orientation, and in the alternative that the amendment adding sexual orientation to WLAD was not retroactive.

Division I agreed that the amendment was not retroactive, but reversed holding that there was a genuine issue of material fact whether the “angry man” comment was a discriminatory act connected to the hostile work environment claim.

The Washington Supreme Court (9-0) agreed with Division I in part:

  • The amendment created a new cause of action and “the plain language and legislative history indicate that the WLAD amendment applies prospectively only ….  Loeffelholz cannot recover for acts that occurred prior to the amendment.”
  • Because of the unique nature of a hostile work environment claim, a plaintiff is allowed “to recover for all related conduct straddling the statute of limitations.”  But the same result does not apply to conduct straddling the effective date of the statutory amendment.  Due process concerns not present in a statute of limitations setting, preclude recovery for any acts that occurred prior to the effective date of the amendment.
  • “Nevertheless, while the preamendment conduct is unrecoverable, it is still admissible as background evidence to prove why postamendment conduct is discriminatory.”  “Therefore, assuming the ‘angry man’ comment did occur postamendment, Loeffelholz may use the preamendment conduct to explain why the ‘angry man’ comment constituted sexual-orientation-based harassment.”
  • Allowing recovery from the effective date of the amendment is appropriate ”because a contributing act postamendment illustrates that the cloud of a hostile work environment continued to hang over Loeffelholz’s employment postamendment.”
  • “Here, whether an actionable claim exists to survive summary judgment depends on whether Lukehart’s ‘angry man’ comment occurred after June 7, 2006 [the effective date of the amendment], and related to the previous abusive environment for which she cannot recover.”
  • “Although the relationship between this [‘angry man’] comment and the alleged hostile work environment is tenuous” Division I properly concluded there is a genuine issue of material fact.  While a single act of harassment is rarely enough to establish a prima facie claim, in this unique set of facts, “t]he preamendment conduct establishes that the ‘angry man’ comment could be severe enough, on its own, to alter the conditions of employment and establish a hostile work environment.”

Division II Washington State Court of Appeals

September 11, 2012

Joy v. Dept. of L & I No. 42118-6

http://www.courts.wa.gov/opinions/index.cfm?fa=opinions.showOpinion&filename=421186MAJ

worker compensation –  Health Technology Clinical Committee (HTCC)’s blanket denial of coverage for spinal cord stimulation precludes challenge whether medically necessary or proper in individual cases

In 2006, the legislature adopted measures to insure uniform policies in state health care programs, including industrial insurance.  The legislature gave the Health Technology Clinical Committee (HTCC) authority to make health technology coverage determinations binding all the state health care programs, including industrial insurance.

Joy suffered an on-the-job neck injury resulting in chronic cervical pain.  She unsuccessfully requested that L&I authorize a spinal cord stimulator.  The Industrial Insurance Medical Advisory Committee advised L&I on coverage issues and had determined that coverage should not be allowed for spinal cord stimulation because of the potential for harm.  Joy unsuccessfully appealed to the Board of Industrial Insurance Appeals, and then to superior court.  While her appeal was pending in superior court, the Health Technology Clinical Committee (HTCC) found that spinal cord stimulation was less safe than alternatives and that state health care programs would not cover spinal cord stimulation as a necessary and proper procedure.

The superior court granted L&I’s motion for judgment as a matter of law, rejecting Joy’s argument that even though RCW 70.14.120(3) precludes L&I from authorizing medical procedures that HTCC has decided are not covered, the statute does not preclude the Board or the courts from ordering L&I to provide the procedure in individual cases.

Division II affirmed:

  • RCW 70.14.120(3) “unequivocally mandates that health technologies subject to HTCC blanket non-coverage determinations ‘shall not be subject’ to individualized medically necessary and proper determinations.”
  • “A HTCC non-coverage determination is a determination that the particular health technology is not medically necessary or proper in any case.”   HTCC coverage decisions are binding on L&I, the Board and the courts.
  • The general statutory provision that the 2006 revisions do not diminish an individual’s right to appeal, is controlled by the more specific provisions that agencies such as L&I must comply with HTCC decisions and that HTCC non-coverage determinations preclude any individualized determination that a procedure is medically necessary and proper.
  • “…authorizing piecemeal determinations by reviewing bodies would not be reasonable and would lead to absurd results.”
  • “…Joy may not obtain relief on appeal from L&I’s denial of coverage for treatment, when L&I’s denial is based on the HTCC’s determination of non-coverage for such treatment under all state health care plans.”

Division III Washington State Court of Appeals

September 11, 2012

Estate of Jones No. 30008-1

http://www.courts.wa.gov/opinions/index.cfm?fa=opinions.showOpinion&filename=300081MAJ

wills – undue influence – denial of summary judgment no preclusive effect – attorney fees

The mother and father owned 178 acres of farm land, as well as the majority of shares in a corporation that owned 54 acres of farm land.  Their two sons owned the remaining shares of the corporation.  Each son also owned land that the corporation farmed.  Facing financial difficulties, the corporation took out a loan in 2003 from the Farm Service Agency.  The loan was personally guaranteed by the mother, the father, the two sons and the sons’ wives.  All parties had to pledge their personally owned farm land as collateral.  The mother, father, two sons and the sons’ wives signed a farming agreement to continue to own or lease all their property to the corporation until all the debt was paid.  They also agreed that the corporation would not pay any rent and would receive all income from the joint farming effort.

The mother and father had reciprocal wills providing that at the death of one of the spouses, all property would go to the surviving spouse, with most to go into a trust for the benefit of the surviving spouse who was named as the trustee.  Upon the death of the surviving spouse, the estate would go to their two sons and their two daughters share and share alike.

Soon after the father died in 2003, the mother signed documents that: gifted the shares of stock to the two sons; leased the 178 acres of farm land to the two sons for $50,000 per year for 16 years for a total of $800,000 and gave the two sons the option to purchase for $800,000 with credit for the lease payments.

The mother died in 2007.  Ultimately, the two daughters filed creditor claims for damages and a TEDRA petition alleging undue influence and seeking rescission of the 2003 documents signed by the mother.  The sons also filed creditor claims.  The estates of the mother and the father filed summary judgment motions seeking dismissal of all claims, arguing, in part, that the claims were time barred.  The trial court found a genuine issue of material fact about what and when the two daughters knew about the 2003 documents, but required the daughters to elect between damages and rescission.  They elected rescission.  Then the estates filed a second set of summary judgment motions that were heard by a different judge.  The second judge ruled that the daughters had the right to seek rescission under TEDRA, but there was no undue influence and the 2003 documents were valid.  The trial court denied the estates’ request for attorney fees against the daughters.

Division III affirmed the trial court:

  • The first ruling denying summary judgment was “essentially interlocutory” and because it was not a final judgment, the doctrines of stare decisis, law of the case and res judicata did not preclude the second judge from considering undue influence on the second summary judgment.
  • Undue influence involves unfair persuasion that seriously impairs the free and competent exercise of judgment and the party claiming undue influence must prove it by clear, cogent and convincing evidence.
  • The existence of a confidential relationship – when one person has gained the confidence of another and purports to act or advise with the other person’s interest in mind – may give rise to a presumption of undue influence.
  • “Whether or not the Restatement [(Second) of Contracts Section 177] was cited, Washington courts long have consistently applied these principles [of section 177] in contract, will and gift situations involving undue influence.”
  • An unfair or disparate transaction is only one factor considered in determining whether there was undue influence, but “it is the primary reason that claims of undue influence are litigated.”
  • The mother may have had a confidential relationship with her two sons, but she made “a fair bargain with her sons.”  She got out from substantial debt and was allowed to stay in her own home while receiving payments she would not otherwise have received.
  • “In the absence of an unbalanced transaction, there has to be some additional evidence of influence beyond the confidential relationship.  Here, there was none.”
  • The two sons also rebutted the presumption of undue influence with evidence that the mother “was competent and capable of making her own decisions.”
  • Under the broad powers of TEDRA, the second trial court judge had the power to settle the estate “even if he believed there had been enough evidence to proceed to trial, to resolve the matter by weighing the evidence in light of the heightened [clear, cogent and convincing] burden of proof.  In other words, even if the presumption of undue influence existed, the judge was permitted under TEDRA to weigh that presumption against the noted evidence of competency and no undue influence and summarily decide the case without setting the matter to the trial docket.”
  • The trial court has broad discretion whether to award attorney fees under TEDRA.  The estates were not blameless and the denial of the estates’ request for fees was reasonable.  No fees are a awarded on appeal.

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