324 P.3d 743
Wash. Ct. App.2014Background
- Fire District No. 5 and its insurer AAIC appeal summary judgments dismissing their legal negligence claims against Bullivant Houser Bailey PC and attorney Richard Matson.
- AAIC retained Matson to defend the Fire District and James in Collins v. Clark County Fire Dist. No. 5; underlying trial produced a verdict over $3.2 million, later increased to about $4 million with fees.
- Plaintiffs allege Matson was negligent in settlement evaluation, pretrial handling, and failing to object to improper closing arguments or preserve error for appeal.
- The trial court dismissed AAIC for lack of standing per Stewart Title; the Fire District’s claims were dismissed on the theory of judgmental immunity, which the court did not ultimately adopt.
- This appeal holds AAIC lacks standing under Stewart Title; analyzes whether attorney judgment rule governs breach and whether material questions exist on Fire District’s claims; reverses most dismissals and remands for further proceedings, preserving two specific exceptions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing of AAIC to sue | AAIC was the insured’s insurer and paid Matson; argues intended-beneficiary theory. | Stewart Title controls; AAIC was not Matson’s client. | AAIC lacks standing; dismissal affirmed. |
| Adoption of attorney judgment rule | Matson’s judgment decisions breach duty; expert opinions show error. | Judgmental immunity applies; decisions are protected. | Court adopts attorney judgment rule; breach requires range-of-reasonable-choices or informed judgment. |
| Settlement evaluation breach of duty | Matson undervalued and mishandled settlement; evidence shows not within reasonable range. | Settlement value is subjective; expert disagreements alone insufficient. | Issue of material fact on whether evaluation breached duty; summary judgment improper. |
| Pretrial handling breach of duty | Matson’s tactics and inaction breached duty; numerous identified decisions. | Judgment calls are trial tactics; evidence insufficient to prove breach. | Question of fact exists on many pretrial judgments; summary judgment improper. |
| Closing argument objections; preservation | Matson failed to object and preserve error; negligent conduct. | Trial tactic; objection may be strategic; not negligent as a matter of law. | Summary judgment proper for failure to object and for failing to file a limine; but preservation issue remanded. |
Key Cases Cited
- Stewart Title Guaranty Co. v. Sterling Savings Bank, 178 Wn.2d 561 (Washington Supreme Court, 2013) (insurer not intended beneficiary of defense attorney’s representation)
- Trask v. Butler, 123 Wn.2d 835 (Washington Supreme Court, 1994) (threshold question whether representation was intended to benefit nonclient)
- Cook, Flanagan & Berst v. Clausing, 73 Wn.2d 393 (Washington Supreme Court, 1968) (error of judgment not per se negligence; requires standard of care)
- Halvorsen v. Ferguson, 46 Wn. App. 708 (Washington Court of Appeals, 1986) (mere errors in judgment generally do not create liability; need informed judgment)
- Sun Valley Potatoes, Inc. v. Rosholt, Robertson & Tucker, 133 Idaho 1 (Idaho Supreme Court, 1999) (recognition of judgmental immunity principles in other jurisdictions)