Matthew Schuler v. Bulk Fr8, Llc
75108-5
| Wash. Ct. App. | Mar 20, 2017Background
- Schuler (Matthew Schuler and Derek Brown) were former employees/independent contractors of Bulk FR8 who signed noncompete agreements, then left to work for Total Connection, a New Jersey competitor.
- Bulk FR8 sued Schuler and sought a temporary restraining order (TRO) enjoining them from working for Total Connection; the court granted the TRO conditioned on a $50,000 cash bond.
- The trial court later denied Bulk FR8's motion for a preliminary injunction, finding substantial questions about the enforceability of the noncompete.
- Bulk FR8 moved to exonerate the TRO bond and then moved for voluntary dismissal of the action; the dismissal was granted ex parte without prior notice to Schuler.
- Schuler sought costs, attorney fees, and sanctions; the trial court denied fees under the frivolous action statute, found no prejudice from the lack of notice, and exonerated the bond.
- On appeal the Court of Appeals affirmed the dismissal and bond exoneration, affirmed denial of fees under the frivolous-action statute, but reversed the denial of attorney fees to Total Connection under the Washington long-arm statute and remanded to determine fee amounts.
Issues
| Issue | Plaintiff's Argument (Bulk FR8) | Defendant's Argument (Schuler/Total Connection) | Held |
|---|---|---|---|
| Whether the court abused its discretion in granting voluntary dismissal without notice | Dismissal was proper under CR 41(a)(1)(B) because motion came before plaintiff rested | Lack of notice and ex parte handling deprived defendants of rights and opportunity to protect claim against the bond | Court: No abuse; even assuming notice required, Schuler showed no substantial prejudice and CR 41 mandated dismissal before plaintiff rested |
| Whether the TRO bond should have been exonerated without adjudicating wrongful restraint/damages | Bond exoneration appropriate because no damages shown from TRO | Bond should remain until court evaluates whether TRO was wrongful and any damages exist | Court: No abuse; Schuler opposed but failed to identify or prove any damages, so bond properly exonerated |
| Whether Total Connection is entitled to attorney fees under the long-arm statute (RCW 4.28.185) after Bulk FR8's voluntary dismissal | Andersen does not apply; fees only when dismissal is jurisdictional or on the merits | Voluntary dismissal makes out-of-state defendant a prevailing party entitled to fees; trial court should award fees if justice requires | Court: Reversed trial court; Total Connection (out-of-state defendant) is a prevailing party under long-arm statute and entitled to fees; remand to determine amount for trial and appeal |
| Whether fees were warranted under the frivolous-action statute (RCW 4.84.185) | Action was frivolous; fees appropriate | Trial court found no written findings of frivolousness; therefore no fees | Court: Affirmed denial; trial court did not make written findings that action was frivolous, so no award |
Key Cases Cited
- Swiss Baco Skyline Logging Co. v. Haliewicz, 14 Wn. App. 343 (Wash. Ct. App.) (court should not exonerate TRO bond before determining whether restraint was wrongful)
- Andersen v. Gold Seal Vineyards, Inc., 81 Wn.2d 863 (Wash.) (defendant may be "prevailing" under long-arm statute after plaintiff's voluntary nonsuit)
- Scott Fetzer Co. v. Weeks, 114 Wn.2d 109 (Wash.) (long-arm fees are not limited to merits or jurisdictional victories; scope of fee awards should be limited to compensate added litigative burdens)
- CVTC of Haw., Co., Ltd. v. Shinawatra, 82 Wn. App. 699 (Wash. Ct. App.) (applied Scott Fetzer principles to affirm fee award for jurisdictional prevailing)