I don’t think there is much new to discuss regarding Gander v. Yeager (Division 2, April 10, 2012), but it does involve some neighbors arguing about goats. So that’s something. And the case may be of some interest on the topic of appellate review of fee awards. Maybe. Oh, and the Chutzpah Doctrine makes an appearance as well, so there’s that. But anyway, on with the case…
Back in 2005, there was a boundary dispute out in Bainbridge Island between (1) the Ridingses and (2) Malcolm Gander and Melanie Keenan. The Court refers to Gander and Keenan as Gander/Keenan “intending no disrespect.” I am going to refer to them as G/K, but I want to be clear that I don’t intend any disrespect either! The Ridingses and G/K settled their dispute pursuant to a written settlement agreement. The agreement provided that G/K shall not disparage the Ridingses and vice versa. Disputes regarding the agreement were subject to arbitration.
Four months after this settlement agreement, the Ridingses sold their property to Karen Keefe. Keefe then claimed that G/K began harassing her in violation of the agreement by, among other things, “operating ‘an unsightly and barren goat enclosure,’” “‘allowing the goats to bleat and cry for extended periods before feeding them,’” “putting goat waste along or very near the property line,” and “operating a chainsaw for extended lengths of time near Keefe’s home for no apparent purpose.” I hope that the chainsaw had nothing to do with the goats.
Keefe thought this was harassment in violation of the agreement, which she claimed benefited her as the assignee of the Ridingses. G/K disagreed and claimed that Keefe had no rights under the agreement. Keefe took the case to the arbitrator, who agreed with Keefe and instructed the parties to schedule an arbitration. G/K dragged their feet, did not cooperate in scheduling the arbitration, and essentially refused to recognize Keefe’s rights under the agreement.
So Keefe sued in Municipal Court. The parties had a full trial in Muni Court with Keefe prevailing. The Court entered a permanent anti-harassment injunction against G/K. The Court of Appeals opinion does not discuss the terms of the order, but I really hope it gets specific about what the goats can and can’t do, with specific decibel levels for appropriate bleating.
G/K then appealed to the Superior Court, which held that if Keefe was covered by the agreement, then she was covered by the arbitration provision and should have been forced to arbitration. The Superior Court therefore vacated the injunction against G/K and remanded the dispute for resolution by arbitration.
Having won, G/K then moved for their attorneys’ fees. The Superior Court denied the request. G/K appealed.
On appeal, after a review of recent Supreme Court and Courts of Appeals decisions, the Court of Appeals noted that there was some confusion or sloppiness in the proper standard for appellate review of attorneys’ fee awards. Seeking to clarify the matter, the Court of Appeals held as follows: (1) an appellate court applies de novo review to the trial court’s determination of whether there is a legal basis for an award of fees, and (2) an appellate court reviews for abuse of discretion the discretionary decision of whether to award fees and the reasonableness of the fee award.
G/K claimed that they were entitled to fees because they had to vacate an improper injunction. The Court of Appeals noted that there was an equitable basis for awarding fees following the improper award and subsequent vacation of a preliminary injunction. The purpose of that rule, however, was to discourage parties from seeking improper preliminary relief, which is later vacated after a full trial on the merits. Here, however, the injunction that was vacated was a permanent injunction entered after a full trial on the merits in the Municipal Court. Accordingly, the equitable basis for the fee award did not apply.
G/K also argued that they were entitled to fees because Keefe’s suit violated the agreement’s arbitration provision, so G/K were forced to defend a claim in court that never should have been filed in the first place. While to the best of my knowledge the Washington Supreme Court has not yet adopted the Chutzpah Doctrine (but see here for the Ninth Circuit’s take), the Court of Appeals applies the doctrine here. G/K asserted to the arbitrator and to Keefe that Keefe had no rights under the agreement and could not avail herself of arbitration. Once the arbitrator asserted his jurisdiction, G/K thwarted arbitration attempts. The Court of Appeals held that in light of G/K’s behavior and the arguments they advanced below, they cannot now claim harm for having to litigate in court rather than in arbitration.