Kim Hann, Respondent V. Metropolitan Property And Casualty Insurance, Appellant
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IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
Kim A. Hann,
Richard Squire and “Jane Doe”
Metropolitan Property and Casualty
FILED: May 9, 2011
Cox, J. — Metropolitan Property and Casualty Insurance Co. appeals the
trial court’s order granting limited intervention and other related decisions in this
personal injury action of its insured against an uninsured driver. The trial court
did not abuse its discretion either in granting Metropolitan limited intervention or
in any other respect. The unchallenged findings are verities on appeal and
support the conclusions of law and the judgment against Richard Squire, the
uninsured driver. Metropolitan is also bound by that judgment. We affirm.
The material facts are largely undisputed. Kim Hann was riding as a
passenger in her 1998 Ford Expedition on September 9, 2005. John Combs
was driving the vehicle. Richard Squire ran a red light in his 1986 Chevy pickup
truck and t-boned Hann’s vehicle. Hann suffered personal injuries resulting from
the collision. It appears that Combs also suffered some injuries.
At the time of the accident, Hann was a named insured under a policy
issued by Metropolitan. The policy included an uninsured motorist (UIM)
Combs arbitrated his insurance claim against Metropolitan. The arbitrator
made an award to him.
Hann commenced this action against Squire in August 2008. Squire
failed to appear, and the trial court entered an order of default against him in
October 2008. In November 2008, Hann provided Metropolitan with written
notice of this action.
The record is unclear when settlement negotiations between Metropolitan
and Hann started. But, they failed to reach agreement. Metropolitan first
entered its notice of appearance and moved to intervene in this suit in February
2009. In its motion, Metropolitan stated:
Hann filed this action against Squire on August 26, 2008.
Hann has served Metropolitan with notice of the action. Hann
then moved for, and was granted a default order against Squire on
October 24, 2009. Metropolitan filed a notice of appearance with
intent to intervene on February 3, 2009.
Clerk’s Papers at 6 (emphasis added).
Significantly, Metropolitan then argued that it should be permitted to intervene
because it would be “bound by the findings, conclusions, and judgment of any
proceeding” under Fisher v. Allstate Insurance Co.2
The trial court granted Metropolitan limited intervention. The order states
[T]herefore it is hereby ORDERED, ADJUDGED AND DECREED
that Metropolitan’s Motion to Intervene in this matter shall be and is
hereby GRANTED—allowing limited intervention. Metropolitan
Insurance Company shall be allowed limited intervention herein, to
include notice of a hearing for entry of judgment, along with copies
of supporting evidence, and shall be given the opportunity to
challenge the sufficiency of the evidence at the time of the hearing.
Metropolitan shall have the opportunity to bring a motion to allow
limited discovery as to damages as it finds such discovery
Metropolitan’s motion for reconsideration of this order claimed that the
court should have granted “full” intervention because Metropolitan was not
provided with notice of the lawsuit prior to Hann obtaining the order of default
against Squire. Metropolitan claimed that Hann’s policy language and Lenzi v.
Redland Insurance Co.4 required her to notify it of her action against Squire
before moving for an order of default. The court denied this portion of the
motion. But the court did grant Metropolitan’s request for expanded discovery,
Metropolitan shall be allowed to conduct reasonable discovery as
Clerk’s Papers at 7; 136 Wn.2d 240, 961 P.2d 350 (1998).
Clerk’s Papers at 387-88.
140 Wn.2d 267, 996 P.2d 603 (2000).
1). Interrogatories—limited to request for 10 yrs. from today’s date
re: medical records.
2). Ruling reserved re: CR 35 exam.
3). Live witnesses that plaintiff intends to call at reasonableness
hearing can be deposed by Metropolitan.
Thereafter, the trial court continued the reasonableness hearing and
granted Metropolitan additional discovery, including a CR 35 examination of
Both Hann and Metropolitan presented evidence and argument at the
reasonableness hearing on the nature and extent of her injuries. The trial court
entered findings of fact and conclusions of law and a judgment in the amount of
$733,483.71 against Squire. The court also granted Hann’s motion to bind
Metropolitan to the judgment against Squire. Accordingly, Metropolitan was
liable to Hann, as of the date of entry of the order, in the amount of $252,483.03,
the policy limit plus statutory attorney fees and costs.
NOTICE AND INTERVENTION
Metropolitan argues that it did not receive proper notice of Hann’s action
because she did not provide the notice until after she obtained an order of
default against Squire. This argument is not persuasive.
As a preliminary matter, we note that Metropolitan did not make this
argument to the trial court in its initial Motion to Intervene. To the contrary,
Clerk’s Papers at 390.
Metropolitan indicated to the trial court that it did receive notice of the action
prior to entry of the order of default. Metropolitan represented in its Motion to
Intervene that “Hann has served Metropolitan with notice of the action. Hann
then moved for, and was granted a default order against Squire on October 24,
For the first time on reconsideration, Metropolitan indicated that it had not
received a copy of the summons and complaint from Hann until some 25 days
after entry of the order of default. Metropolitan argued, based on these newly
presented facts, that the trial court should have granted full, rather than limited
intervention under Lenzi.
“Motions for reconsideration are addressed to the sound discretion of the
trial court and a reviewing court will not reverse a trial court’s ruling absent a
showing of manifest abuse of discretion.”7 A trial court abuses its discretion
when its decision is based on untenable grounds or reasons.8 Unchallenged
findings of fact are verities on appeal.9 Failure to raise an issue before the trial
court precludes a party from raising it on appeal absent argument that any of the
limited exceptions to RAP 2.5(a) apply.10
Clerk’s Papers at 6.
Wilcox v. Lexington Eye Institute, 130 Wn. App. 234, 241, 122 P.3d 729
(2005) (citing Perry v. Hamilton, 51 Wn. App. 936, 938, 756 P.2d 150 (1988)),
review denied, 157 Wn.2d 1022 (2006).
Id. (citing Wagner Dev., Inc., v. Fidelity & Deposit Co. of Maryland, 95
Wn. App. 896, 906, 977 P.2d 639 (1999)).
In re Estate of Jones, 152 Wn.2d 1, 8, 93 P.3d 147 (2004); RAP 10.3(g).
Whether the trial court abused its discretion in denying the motion for
reconsideration after being presented with a new argument is the issue. For the
reasons we now discuss, the trial court did not abuse its discretion.
Metropolitan argues that our supreme court’s decision in Lenzi requires
an insured to provide notice of an action against an uninsured driver to its UIM
insurer prior to obtaining an order of default against the driver. A close reading
of that case does not support this argument.
The supreme court stated that the issue before it was:
[I]f an insurance carrier that has notice of its insureds’ lawsuit
against an uninsured tortfeasor and declines to intervene in that
lawsuit is bound by a default judgment obtained against the
The court answered the question as follows:
Under the facts of this case, we hold the UIM insurer is bound by
the default judgment where it had timely notice of the filing of the
lawsuit by its insureds and ample opportunity to intervene in the
lawsuit to protect its interests, but declined to do so.
In Lenzi, the supreme court affirmed the rule of Finney v. Farmers
Insurance Co.13 and Fisher that an insurer having “notice of a lawsuit brought by
its insured against [an] uninsured tortfeasor may be bound by the judgment
obtained by the insured.”14
Smith v. Shannon, 100 Wn.2d 26, 37, 666 P.2d 351 (1983); RAP 2.5(a).
Lenzi, 140 Wn.2d at 269.
Id. (emphasis added).
21 Wn. App. 601, 586 P.2d 519 (1978), aff’d, 92 Wn.2d 748, 600 P.2d
The supreme court clearly articulated that an insured’s duty to its insurer
is to “timely notify” its insurer of the filing of the summons and complaint so that
the insurer has an opportunity to intervene and protect its interest prior to the
entry of a monetary judgment.15 Under the facts of that case, the court
concluded that notice was timely because the Lenzis provided their insurer with
a copy of the summons and complaint before entry of the default judgment.16
The court did not hold that notice would be untimely if the summons and
complaint were provided to the insurer after the filing and service of the
summons and complaint but prior to the entry of a monetary judgment.
Here, Metropolitan knew of the accident on which this action is based well
before commencement of this lawsuit. It was involved in a proceeding to
arbitrate a claim by Combs, the other injured occupant of the insured vehicle. To
argue that it neither knew nor had reason to know that this lawsuit was likely if
settlement negotiations with Hann were unsuccessful is not credible.
More importantly, Hann provided Metropolitan with a copy of the
summons and complaint in this action after obtaining an order of default against
Squire but prior to entry of the default judgment against him. This notice
provided Metropolitan both with ample opportunity to intervene (which it did) and
to participate in the reasonableness hearing (which it also did) prior to entry of
Lenzi, 140 Wn.2d at 273 (citing Fisher, 136 Wn.2d 240).
Id. at 276 (emphasis added).
Id. at 276 n.3.
the monetary judgment. In short, Metropolitan had full opportunity to protect its
interests prior to entry of the monetary judgment to which it is now bound to the
extent the trial court determined. That is the underlying lesson of Lenzi. The
policies and procedures discussed in that case were fully honored by the trial
court in its rulings in this case.
Metropolitan suggests that Hann’s failure to notify it of this lawsuit until
after entry of the order of default is prejudicial. But Metropolitan fails to explain
what prejudice comes from this failure. We see none.
Metropolitan also appears to argue that Hann was required to provide it
with notice of her action prior to entry of the order of default under the policy
language. We decline to reach this argument because Metropolitan failed to
preserve it below and none of the narrow exceptions to preservation apply to this
In Metropolitan’s Motion for Reconsideration re: Intervention, it argued
that Hann was required to provide it with copies of the summons and complaint
against Squire based on the following policy language:
If a person seeking coverage files a suit against the owner or driver
of the uninsured or underinsured motor vehicle, copies of suit
papers must be forwarded to us and we have the right to defend on
the issues of the legal liability of, and the damages owed by such
owner or driver. However, we are not bound by any judgment
against any person or organization obtained without our written
After Metropolitan filed its opening brief in this appeal, it filed a “Notice of
Clerk’s Papers at 32.
Clarification of Record” with the trial court stating that the above policy language
is incorrect. The actual policy language states:
If any legal action is begun before we make payment under any
coverage, a copy of the summons and complaint or other process
must be forwarded to us immediately.
Metropolitan then filed an amended opening brief with this court with argument
based on the “correct” policy language. There is no indication in this record that
Metropolitan asked the trial court to make any ruling regarding this new policy
This court may refuse to review any claim of error which was not first
raised in the trial court.19 Here, because Metropolitan’s arguments below were
premised on language not included in Hann’s policy and the trial court never
ruled on this new language, we decline to review Metropolitan’s new argument
We conclude that under the facts of this case and the arguments properly
presented to this court, Metropolitan received timely notice of Hann’s action
SCOPE OF INTERVENTION
Metropolitan argues that the trial court erred in granting it limited
intervention. We disagree.
Pursuant to Civil Rule (CR) 24, the trial court shall permit a nonparty to
Clerk’s Papers at 1652.
RAP 2.5(a); Boes v. Bisiar, 122 Wn. App. 569, 575, 94 P.3d 975 (2004),
review denied, 153 Wn.2d 1025 (2005).
intervene “(1) when a statute confers an unconditional right to intervene; or (2)
when the applicant claims an interest relating to the property or transaction
which is the subject of the action and he is so situated that the disposition of the
action may as a practical matter impair or impede his ability to protect that
interest, unless the applicant’s interest is adequately represented by existing
Here, there is no dispute that the trial court properly allowed Metropolitan
to intervene on the basis of this rule. The issue is whether the trial court abused
its discretion by limiting the extent to which Metropolitan participated in this
action. Metropolitan also claims that its ability to protect its interests was
impaired and impeded because it was not able to request a jury trial and it was
unable to conduct full discovery as permitted by the civil rules. These
arguments are also unpersuasive.
With respect to the issue of a jury trial, Metropolitan never moved to set
aside the order of default and never requested a jury trial. Before a party can
contend that it has been denied the constitutional right to a jury trial, it must first
show that it actually demanded a jury.20 Metropolitan argues that this rule
should not apply under the facts of this case because it was not granted “party”
status and therefore could not request a jury under CR 38. While Metropolitan is
correct that CR 38(b) refers to the right of a “party” to demand a jury trial, there
is nothing to suggest that Metropolitan is not a party, notwithstanding its limited
Ford Motor Co. v. Barrett, 115 Wn.2d 556, 563, 800 P.2d 367 (1990).
status as an intervenor. To hold otherwise would elevate form over substance.
The trial court granted Metropolitan’s motion to intervene. Metropolitan
certainly could have moved to set aside the default judgment or made a jury
demand if it felt that either was in its best interests. It did not do so. It cannot
now claim error on the basis of either a nonexistent ruling or demand.
Finally, Metropolitan claims that its rights were impaired by the limitations
on intervention because it was unable to conduct full discovery as permitted by
the civil rules. A trial court has broad discretion under CR 26 to manage the
discovery process and, if necessary, to limit the scope of discovery.21 This court
reviews a trial court’s order limiting discovery for an abuse of discretion.22 A trial
court abuses its discretion if its decision is manifestly unreasonable or based on
Here, the trial court carefully considered each of Metropolitan’s requests
for discovery, granting Metropolitan the right to propound interrogatories on
Hann, obtain access to the past 10 years of Hann’s medical records, and
conduct a CR 35 examination of Hann. Metropolitan used this information to
contest the amount of damages sought by Hann at the reasonableness hearing.
Metropolitan argues that the permitted discovery was inadequate because
CR 26(b), (c); Nakata v. Blue Bird, Inc., 146 Wn. App. 267, 277, 191
P.3d 900 (2008), review denied, 165 Wn.2d 1033 (2009).
Lang v. Dental Quality Assurance Comm’n, 138 Wn. App. 235, 254, 156
P.3d 919 (2007), review denied, 162 Wn.2d 1021 (2008).
State ex rel. Carroll v. Junker, 79 Wn.2d 12, 26, 482 P.2d 775 (1971).
it was unable to depose and cross-examine Hann’s witnesses. But the limited
scope of discovery in this case was consistent with the underlying principles of
the reasonableness hearing and sufficient to protect Metropolitan’s interests in
this case. As the court explained in Lenzi, the policy concerns at play in a UIM
case such as this are “concern about collusion between [the] insured and the
tortfeasor, who may be judgment proof and have no real interest in the outcome
of an arbitration or trial, leading to an artificially high award for the insured the
carrier must pay. Another possibility is the tortfeasor might have minimal
insurance coverage, thus lessening the incentive for the tortfeasor's insurance
company to defend the action vigorously, again possibly leading to an artificially
high award.”24 From the point of view of the insured, he or she should not have
to relitigate a case or become involved in protracted discovery at the whim of the
Here, the discovery permitted by the trial court was enough for
Metropolitan to vigorously contest the amount of damages. The concerns and
policies articulated by the Lenzi court were adequately addressed by the trial
court in this case.
Further, Metropolitan does not argue that the trial court abused its
discretion in limiting discovery under the facts of this case. Hann did not call any
live witnesses. And Metropolitan was allowed to present the declaration
testimony of its own medical expert witnesses to counter the declarations
Lenzi, 140 Wn.2d at 274.
Id. at 275.
submitted by Hann’s experts. Metropolitan has not demonstrated that the trial
court abused its discretion in managing the scope of permitted discovery.
In addition, we note that Metropolitan does not contest any specific
discovery order of the trial court, or point to what additional discovery it sought
and did not receive. This further supports the conclusion that the trial court did
not abuse its discretion in managing the discovery process.
BINDING EFFECT OF JUDGMENT
Metropolitan argues that the trial court erred in granting Hann’s motion for
an ancillary order binding it to the judgment she obtained against Squire. We
As discussed above, the Fisher/Finney rule provides that an insurer
having “notice of a lawsuit brought by its insured against [an] uninsured
tortfeasor may be bound by the judgment obtained by the insured.”26 Here,
Hann provided Metropolitan with notice of her action against Squire, and
Metropolitan intervened in the lawsuit in sufficient time to contest the damages
award at the reasonableness hearing. This is all that is required by the
Fisher/Finney rule and by Lenzi in order for a trial court to bind the insurer to the
resulting judgment against the tortfeasor.
The trial court properly determined that Metropolitan was bound by the
judgment against Squire up to the limits of Hann’s UIM policy.
Id. at 273 (citing Fisher, 136 Wn.2d 240).
Hann requests an award of attorney fees under RAP 18.9 on the grounds
that Metropolitan’s appeal is frivolous. We decline to award fees on this basis.
RAP 18.9(a) provides:
Sanctions. The appellate court on its own initiative or on motion of
a party may order a party or counsel, or a court reporter or other
authorized person preparing a verbatim report of proceedings, who
uses these rules for the purpose of delay, files a frivolous appeal,
or fails to comply with these rules to pay terms or compensatory
damages to any other party who has been harmed by the delay or
the failure to comply or to pay sanctions to the court.
An appeal is frivolous if there are no debatable issues upon which reasonable
minds might differ, and it is so totally devoid of merit that there was no
reasonable possibility of success.28
Hann argues that Metropolitan’s appeal is frivolous because it is devoid of
any merit and was filed for the purpose of delay. We cannot say that this appeal
is so totally devoid of merit that there was no reasonable possibility of success
on appeal. While we conclude that application of the Fisher/Finney rule and
Lenzi to the facts of this case entitles Hann to prevail, we cannot conclude that
an award of fees is merited.
We affirm the trial court’s ordering granting limited intervention and its
other related decisions.
In re Recall of Feetham, 149 Wn.2d 860, 872, 72 P.3d 741 (2003).