Hallmark Care Services Inc et al v. Superior Court of the State of Washington for Spokane County, et al, No. 2:2017cv00129 - Document 50 (E.D. Wash. 2019)
Court Description: MEMORANDUM OPINION AND ORDER DENYING 39 PLAINTIFF'S MOTION TO VACATE ORDER DISMISSING ACTION AND DEFENDANT'S 46 MOTION FOR SANCTIONS. Signed by Senior Judge Justin L. Quackenbush. (AN, Courtroom Deputy)
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Hallmark Care Services Inc et al v. Superior Court of the State of Washing...r Spokane County, et al Doc. 50 1 2 FI LED I N THE U.S. DI STRI CT COURT EASTERN DI STRI CT OF WASHI NGTON 3 Apr 16, 2019 4 SEAN F. MCAVOY, CLERK 5 6 UNITED STATES DISTRICT COURT 7 EASTERN DISTRICT OF WASHINGTON 8 9 HALLMARK CARE SERVICES, INC., et al., 10 Plaintiffs, 11 v. 12 NO. 2:17-CV-00129-JLQ 13 SUPERIOR COURT OF STATE OF WASHINGTON FOR SPOKANE COUNTY; SPOKANE COUNTY, 14 Defendants. MEMORANDUM OPINION AND ORDER DENYING MOTION TO VACATE ORDER DISMISSING ACTION AND MOTION FOR SANCTIONS 15 16 BEFORE THE COURT is the Plaintiffs’ Motion to Vacate Order Dismissing Action, 17 (ECF No. 39), and Defendants’ Motion for Sanctions, (ECF No. 46). 18 memorializes the court’s ruling on the Motions. I. Introduction 19 20 This Order On July 27, 2017, this court issued an Order granting Defendants’ Motion to Dismiss 21 for Failure to State a Claim and denying Defendants’ Motion for CR 11 Sanctions. (ECF No. 22 25). In granting Defendants’ Motion to Dismiss, the court made two specific determinations: 23 (1) the court did not have subject matter jurisdiction under the Rooker-Feldman doctrine, 24 (ECF No. 25 at 8-10), and (2) Defendants were entitled to judicial immunity, (ECF 25 No. 25 at 10-13). Plaintiffs appealed the dismissal of this case to the Ninth Circuit Court of 26 Appeals, (ECF No. 29), and Defendants cross-appealed the denial of the motion for ORDER - 1 Dockets.Justia.com 1 sanctions, (ECF No. 33). The court has reviewed the docket of the Ninth Circuit Court of 2 Appeals, and no dispositive order has been entered on either appeal. See 17-35678, 17-35717 3 (9th Cir.). On January 28, 2019, Plaintiffs filed the Motion to Vacate the Order Dismissing the 4 5 Action under Fed. R. Civ. P. 60. (ECF No. 39). Plaintiffs allege Defendants misrepresented 6 the status of the state court claims by asserting that the state court claims were dismissed and 7 no appeal had been taken. (ECF No. 39 at 4). Plaintiffs argue that the appeal actually 8 continued, and this rendered the Rooker-Feldman doctrine inapplicable because the state court 9 case was not final at the time of this court’s Order. (ECF No. 39 at 9-10). Plaintiffs request 10 that the Order be reversed in full or in part, leaving the court’s ruling regarding judicial 11 immunity to be argued before the Ninth Circuit Court of Appeals. Plaintiffs make no 12 argument that the court’s judicial immunity determination should be vacated under Rule 13 60(b). 14 Defendants allege that no misrepresentation occurred and that any appeal of the state 15 court claims did not render the Rooker-Feldman doctrine inapplicable. (ECF No. 42). 16 Defendants also filed a Motion for Sanctions. (ECF No. 46). The Motion to Vacate and 17 Motion for Sanctions were submitted for decision without oral argument. II. Recent State Court Activity 18 19 This court summarized the state court actions in the Memorandum Opinion and Order 20 Re: Motion to Dismiss and Motion for CR 11 Sanctions filed on July 27, 2017. (ECF No. 21 25). Since the Order was filed, litigation has continued within the state court system. See No. 22 33356-6 (Wash. Ct. App. Div. III). 23 On October 18, 2018, the Court of Appeals of the State of Washington Division III 24 entered an opinion reversing the money judgments. (ECF No. 40 at 23-47). According to 25 that order, Plaintiffs were allowed to challenge the assessment of Guardian ad Litem (GAL) 26 fees, but not the orders removing them as guardians. Id. ORDER - 2 On November 19, 2018, Plaintiffs filed a Petition for Review with the Washington 1 2 Supreme Court (ECF No. 40 at 49-77). A review of the online docket of that court shows an 3 Order terminating Review was filed on April 3, 2019. See No. 96535-8 (Wash. Sup. Ct.). III. Discussion 4 5 A. Motion to Vacate 6 Fed. R. Civ. P. 60(b) allows a party to seek relief from a final judgment and request the 7 case be reopened under six circumstances: (1) mistake; (2) newly discovered evidence; (3) 8 fraud; (4) the judgment is void; (5) the judgment has been satisfied, release, or discharge; it 9 is based on an earlier judgment that has been reversed or vacated; or applying it prospectively 10 is no longer equitable; and (6) any other reason that justifies relief. A motion to request relief 11 under the first three circumstances must be brought within one year after the entry of the 12 judgment. FED. R. CIV. P. 60(c)(1). 13 Plaintiffs admit relief under the first three circumstances is time-bared, but assert Fed. 14 R. Civ. P. 60(b)(5) is applicable as the prospective application of the order is no longer 15 equitable. ECF No. 39 at 9. Later, in Reply briefing, Plaintiffs allege Fed. R. Civ. P. 60(b)(6) 16 provides the means for their requested relief. (ECF No. 45 at 3). 17 1. Fed. R. Civ. P. 60(b)(5) Claim 18 Fed. R. Civ. P. 60(b)(5) provides that “[o]n motion and just terms, the court may relieve 19 a party or its legal representative from a final judgment, order, or proceeding . . . the 20 judgement has been satisfied, released, or discharged; it is based on an earlier judgment that 21 has been reversed or vacated; or applying it prospectively is no longer equitable.” Plaintiffs 22 allege that applying the court’s July 2017 Order prospectively is no longer equitable because 23 the Rooker-Feldman doctrine does not apply when a decision by the state court is not final 24 and still subject to appeal within the state court system. (ECF No. 39 at 8-9). 25 The Ninth Circuit has held that appeals in state court do not need to be exhausted for 26 the Rooker-Feldman doctrine to apply. Worldwide Church of God v. McNair, 805 F.2d 888, ORDER - 3 1 893 n. 3 (9th Cir. 1986) (Agreeing with the Second and Fifth Circuits that “the 2 Feldman doctrine should apply to state judgments even though state court appeals are not 3 final.”). Likewise, Plaintiffs argue that because the state court decision is not yet appealable 4 to the United States Supreme Court, the Rooker-Feldman doctrine cannot apply. (ECF No. 5 39 at 9). However, “the Rooker-Feldman doctrine is not premised on the availability of 6 Supreme Court review of the state court decision,” instead “[t]he purpose of the doctrine is 7 to protect state judgments from collateral federal attack.” Doe & Associates Law Offices v. 8 Napolitano, 252 F.3d 1026, 1030 (9th Cir. 2001). The fact an appeal was taken within the 9 state court does not preclude the application of the Rooker-Feldman doctrine. Plaintiffs’ 10 motion under Fed. R. Civ. P. 60(b)(5) is Denied. 11 2. Fed. R. Civ. P. 60(b)(6) Claim 12 Fed. R. Civ. P. 60(b)(6) provides that “[o]n motion and just terms, the court may relieve 13 a party or its legal representative from a final judgment, order, or proceeding [for] . . . Any 14 other reason that justifies relief.” Relief from a judgment under Rule 60(b)(6) is appropriate 15 where “extraordinary circumstances prevented [Plaintiffs] from taking timely action to 16 prevent or correct an erroneous judgement.” Greenawalt v. Stewart, 105 F.3d 1268, 1273 17 (9thCir. 1997) (citations omitted). 18 Plaintiffs have provided no such “extraordinary circumstances” in this case. They 19 allege a misrepresentation to the court by Defendants’ counsel. (ECF No. 45 at 2-3). 20 Plaintiffs failed to cite to any assertion by Defendants’ counsel that the time for the state 21 court decision appeal had elapsed in their Motion and Reply briefing. (ECF No. 39, 45). In 22 the Response to Defendants’ Motion for Sanctions, Plaintiffs point to Defendants’ May 19, 23 2017 Motion to Dismiss in which Defendants argued that the claims should be dismissed 24 “under the doctrine of res judicata.” (ECF No. 47 citing ECF No. 11 at 8.) Plaintiffs assert 25 that by Defendants arguing preclusion under res judicata, they were asserting that the state 26 court claims were final and all appeals had been exhausted. (ECF No. 47 at 6). ORDER - 4 1 Plaintiffs’ argument fails for two reasons. First, arguing a legal theory of res judicata 2 does not equate to misrepresenting the facts of a case. Federal courts have repeatedly 3 expressed difficulty in deciphering between the Rooker-Feldman doctrine and res judicata or 4 preclusion. See Noel v. Hall, 341 F.3d 1148,1162-63 (9th Cir. 2013) (citing Brokaw v. 5 Weaver, 305 F.3d 660, 664-65 (7th Cir. 2002); Gottfried v. Med. Planning Servs., Inc., 142 6 F.3d 326, 330 (6th Cir. 1998); Bates v. Jones, 131 F.3d 843, 863 (9th Cir. 1997); Harris v. 7 N.Y. State Dep’t of Health, 202 F. Supp.2d 143, 159 n. 2 (S.D.N.Y. 2002); Zealy v. City of 8 Waukesha, 153 F.Supp.2d 970, 980 (E.D. Wis. 2001)). Therefore, the court will not find a 9 misapplied legal theory as a misrepresentation of the facts, especially when the two theories 10 being addressed are difficult to distinguish. 11 Second, the court did not base its July 2017 Memorandum Opinion and Order Re: 12 Motion to Dismiss and Motion for CR 11 Sanctions on the legal theory of res judicata. It 13 granted Defendants’ Motion to Dismiss based on the Rooker-Feldman doctrine, ECF No. 14 25,which is separate and unique from res judicata. “Preclusion [or res judicata] in federal 15 litigation following a judgment in state court depends on the Full Faith and Credit Statute, 28 16 U.S.C. § 1738, which requires the federal court to give the judgment the same effect as the 17 rendering state would.” Noel, 341 F.3d at 1164 (quoting GASH Associates v. Village of 18 Rosemont, 995 F.2d 726-728-29 (7th Cir. 1993)). The Rooker-Feldman doctrine bars subject 19 matter jurisdiction “[i]f a federal plaintiff asserts as a legal wrong an allegedly erroneous 20 decision by a state court, and seeks relief from a state court judgement based on that 21 decision.” Id. at 1164. The difference between the two theories is (1) the injury and (2) who 22 caused the injury. A federal claim barred by res judicata is based on a prior injury that a state 23 court allegedly failed to remedy. Id. At 1165. A federal claim barred by the Rooker-Feldman 24 doctrine alleges that a new injury was caused by the state court’s judgment. Id. At the court’s 25 request, the parties provided supplemental briefing addressing the Rooker-Feldman doctrine. 26 (ECF Nos. 16, 17, 20). In applying the Rooker-Feldman doctrine, the court did not rely on ORDER - 5 1 Defendants’ assertions associated with the res judicata argument made in the Motion to 2 Dismiss. Furthermore, the court acknowledged the potential for an appeal within the state court 3 4 system in the order dismissing the action, (ECF No. 25 at 9) (“To the extent that the time to 5 seek modification of the Washington Supreme Court’s order has not passed, the fact the 6 appeal may be technically ongoing does not prevent application of Rooker-Feldman.”). The 7 Plaintiffs’ motion under Fed. R. Civ. P. 60(b)(6) is Denied. 8 B. Motion for Sanctions 9 Defendants have filed a Motion for Sanctions under Fed. R. Civ. P. 11. (ECF No. 46.) 10 Fed. R. Civ. P. 11(b) provides that by presenting a motion to the court, an attorney certifies 11 that to the best of the person’s knowledge, information, and belief, formed after an inquiry 12 reasonable under the circumstances is not being presented for improper purposes, is 13 nonfrivolous, the factual contentions have evidentiary support, and the denials of factual 14 contentions are warranted on the evidence. Fed. R. Civ. P. 11(c) allows the court to impose 15 appropriate sanctions on any attorney, law firm, or party that violated Fed. R. Civ. P. 11(b). 16 The Ninth Circuit has established that sanctions should be imposed on the signer of a paper 17 that is either (1) filed for an improper purpose, or (2) is frivolous. Townsend v. Holman 18 Consulting Corp., 929 F.2d 1358, 1362 (9th Cir. 1990) (citing Zaldivar v. City of Las 19 Angeles, 780 F.2d 823, 832 (9th Cir. 1986) overruled on other grounds by Cooter & Gell v. 20 Hartmarx Corp., 496 U.S. 384 (1990)). 21 Defendants argue that Plaintiffs’ Motion to Vacate was frivolous and cite the two-prong 22 test established by Christian v. Mattel, Inc., 286 F.3d 1118, 1128 (9th Cir. 2002). ECF No. 23 46 at 4. However, Christian applies to evaluating whether a complaint is frivolous. 286 F.3d 24 at 1127. Here, Plaintiffs filed the Motion to Vacate. 25 Arguably, Plaintiffs’ failure to provide any citation to the record in support of their 26 assertion that Defendants misrepresented the facts amounts to failing to conduct a reasonable ORDER - 6 1 and complete inquire before signing and filing the motion. However, Plaintiffs’ Response to 2 the Defendants’ Motion for Sanctions makes it evident that Plaintiffs confused the legal 3 theory of res judicata with the Rooker-Feldman doctrine. See supra. The Ninth Circuit, as 4 well as other federal courts of appeal, have recognized the difficulty of deciphering the 5 difference between the two legal theories. This court will not sanction Plaintiffs for 6 misapplying the legal theory that other federal courts have also struggled to grasp. 7 Defendants’ Motion for Sanctions (ECF No. 46) is Denied. IV. Conclusion 8 9 Plaintiffs’ have failed to establish just terms that allow for relief under Fed. R. Civ. P. 10 60(b). Plaintiffs’ arguments against the application of the Rooker-Feldman doctrine are 11 unavailing. While the court finds denial of Plaintiffs’ motion appropriate, the court does not 12 find that it was frivolous or baseless. Accordingly, the Motion for Relief from the 13 Memorandum Opinion and Order Re: Motion to Dismiss filed on 07/27/17 is denied and the 14 Motion for Sanctions is denied. 15 IT IS HEREBY ORDERED: 16 1. Plaintiffs’ Motion for Relief from the Memorandum Opinion and Order Re: Motion 17 to Dismiss Filed on 07/27/17 (ECF No. 39) is DENIED as set forth herein. 18 2. Defendants’ Motion for Sanctions (ECF No. 46) is DENIED. 19 IT IS SO ORDERED. The Clerk is hereby directed to enter this Order and Judgment, 20 and furnish copies to counsel. 21 DATED this 16th day of April, 2019. 22 s/ Justin L. Quackenbush JUSTIN L. QUACKENBUSH SENIOR UNITED STATES DISTRICT JUDGE 23 24 25 26 ORDER - 7
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