Our personal injury law firm did not participate in this lawsuit.
In a recent unpublished opinion the Washington Court of Appeals reaffirmed the established rule that statutory offers under attorney fee shifting statutes must be made prior to mandatory arbitration hearings. Although the plaintiff prevailed before the trial judge on her personal injury claims, the award of attorney fees was overturned because her attorney made a statutory offer only after a mandatory arbitration hearing.[1]
In an action for damages where the amount pleaded by the prevailing party is $10,000 or less, the prevailing party is entitled to an award of reasonable attorney fees.[2] The plaintiff shall be deemed the prevailing party when the recovery, exclusive of costs, “is as much as or more than the amount offered in settlement by the plaintiff.”[3] Offers of settlement must be served on the adverse party at least ten days prior to “trial.”[4] If the case is appealed, the prevailing party on appeal shall be considered the prevailing party for the purpose of applying the fee shifting statute.[5] The issue in this case was how to apply the above cited statutes in a case that begins with a mandatory arbitration.
The purposes of RCW 4.84.250–.290 are to encourage out-of-court settlements, penalize parties who unjustifiably bring or resist small claims, and enable parties to pursue meritorious small claims without seeing the award swallowed up by the expense of paying an attorney.[6] Treating the arbitration proceeding as the “trial” furthers these purposes. It creates an incentive for both sides to settle before going to the considerable expense of a full arbitration hearing.
A mandatory arbitration proceeding under chapter 7.06 RCW “is treated as the original trial” when applying RCW 4.84.290.[7] The trial de novo is the appeal that makes RCW 4.84.290 applicable.[8] It follows that the arbitration is the “trial” proceeding in which the plaintiff must invoke RCW 4.84.260 in order to be deemed a prevailing party. The plaintiff can do this only by making an offer of settlement in the manner prescribed by RCW 4.84.280—that is, at least 10 days before the arbitration that constitutes the “trial”.
In this case the plaintiff/appellant was injured when the defendant lost control while driving a taxi and hit a car driven by the plaintiff, resulting in personal injury.
The superior court transferred the case to mandatory arbitration and an arbitration award was filed in defendant’s favor, the arbitrator having been unable to find proximate cause. The plaintiffs timely requested a trial de novo in superior court. After the arbitration hearing, the plaintiff made settlement offers pursuant to RCW 4.84.280. The offers were not accepted.
After a four day trial, the court ruled in favor of the plaintiff and also awarded attorney fees.
Because the plaintiff did not comply with the statutory requirement of serving their offers of settlement 10 days before “trial,” they did not successfully invoke the statutory scheme. They were not entitled to attorney fees for the “trial” before the arbitrator; they were not entitled to attorney fees for the appeal (i.e., the trial de novo) in superior court; and they were not entitled to attorney fees for their appeal in the court.
[1] Williams v. Tilaye, No. 63743-6-I (Filed October 4, 2010).
[2] RCW 4.84.250.
[3] RCW 4.84.260.
[4] RCW 4.84.280.
[5] RCW 4.84.290.
[6] Beckmann v. Spokane Transit Auth., 107 Wn.2d 785, 788, 733 P.2d 960 (1987).
[7] Singer v. Etherington, 57 Wn. App. 542, 547, 789 P.2d 108, 802 P.2d 133
(1990).
[8] Singer, 57 Wn. App. at 546.