Opinion Information Sheet

			

                                                                               FILED
                                                                           MAR 29, 2012
                                                                    In the Office of the Clerk of Court
                                                                  WA State Court of Appeals, Division III

          IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

M. STANLEY SLOAN, a single person,                        No.  29971-6-III
                                                )
                      Appellant,                )
                                                )         Division Three
              v.                                )
                                                )
HORIZON CREDIT UNION, Successor                 )         PUBLISHED OPINION
of Mountain View Credit Union,                  )
                                                )
                      Respondent.               )
                                                )

       Brown, J. ? M. Stanley Sloan and Dennis W. Clayton appeal the trial court's 

denial of their RAP 12.8 refund motion to recover judgment satisfaction money from

Horizon Credit Union after this court reversed the underlying judgment.  Given this 

record establishing grounds for RAP 12.8 relief, we reverse.  

                                            FACTS

       In 2005, Mr. Sloan, pro se, sued Mountain View Credit Union, Horizon's 

predecessor, seeking tort damages.  The trial court granted Mountain View summary 

dismissal, including potential contract claims.  On appeal, this court affirmed the 

summary dismissal of the tort claims, and concluded Mr. Sloan waived the breach of  

No. 29971-6-III
Sloan v. Horizon Credit Union  

contract claim and failed to produce prima facie evidence of breach of contract.  Sloan 

v. Robinson, noted at 145 Wn. App. 1033 (2009).  

       In 2009, Mr. Sloan again sued Horizon with Mr. Clayton as counsel (at the 

behest of attorney Howard Herman), this time alleging contractual notice failure.  

Summarily, Horizon successfully asserted the 2009 lawsuit was barred by res judicata

and was awarded $14,950 under CR 11 for attorney fees against Mr. Sloan and Mr. 

Clayton, jointly and severally. Horizon initiated supplemental debt collection 

proceedings against Mr. Sloan and Mr. Clayton, prompting them to meet with Mr. 

Herman.  Mr. Herman arranged with Mr. Clayton to finance the judgment debt and Mr. 

Clayton personally undertook to repay Mr. Herman if the judgment was not reversed on 

appeal. 

       On September 16, 2009, Mr. Clayton and Mr. Herman met with Stanley Perdue, 

Horizon's attorney.  Mr. Herman gave Mr. Perdue a check for $15,097.32 (the judgment 

amount with interest).  Mr. Perdue executed a satisfaction of judgment.  Apparently for 

security, Mr. Herman additionally requested and received a judgment assignment from 

Mr. Perdue.  Mr. Clayton immediately appealed the trial court's dismissal of Mr. Sloan's 

2009 lawsuit and the CR 11 judgment.  In July 2010, this court affirmed the trial court's 

res judicata ruling but reversed the CR 11 judgment.  After this court's March 14, 2011

mandate, Horizon refused to refund the CR 11 judgment monies to Mr. Herman.  Mr. 

Herman then requested and received a $15,097.32 promissory note from Mr. Clayton.    

       Mr. Clayton unsuccessfully moved under RAP 12.8 for a refund of the money 

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No. 29971-6-III
Sloan v. Horizon Credit Union  

paid to satisfy the CR 11 judgment.  The court partly found:

       2. Procedurally, only M. Stanley Sloan has made a motion pursuant 
          to RAP 12.8.  Neither Attorney Dennis Clayton or [sic] Attorney 
          Howard Herman, a non-party, have requested relief pursuant to
          RAP 12.8.  

       3. M. Stanley Sloan did not pay any sums in satisfaction of the August 
          18, 2009 judgment rendered against him by this court.  Therefore, 
          pursuant to RAP 12.8, M. Stanley Sloan is not a judgment debtor who
          has paid all or part of a judgment pending appeal and is not a party
          from whom property was taken in satisfaction of a judgment.  

       4. On September 16, 2009 attorney Howard Herman paid to Horizon
          Credit Union ("Horizon") a check in the amount of $15,097.32 and
          received, in exchange, an assignment of the August 18, 2009 judgment
          entered against M. Stanley Sloan and Attorney Dennis Clayton.  
          Attorney Howard Herman is not a party to these proceedings, nor
          has he made a claim for compensation of any kind in these
          proceedings and is therefore not a judgment debtor who has paid
          all or part of judgment pending appeal and is not a party from whom
          property was taken in satisfaction of a judgment.  Attorney Howard
          Herman has not made a motion to join or asked to be substituted as a
          party defendant for any purpose in these proceedings.  Therefore, this
          court is without jurisdiction to award restitution to Attorney Howard
          Herman pursuant to RAP 12.8.  

       5. The assignment agreement between Horizon Credit Union and 
       Attorney
          Howard Herman of September 16, 2009 is valid and transferred all of
          the right, title, interest, burdens and benefits of Horizon Credit Union in
          the judgment to Attorney Howard Herman.  As a result Horizon Credit
          Union is no longer a judgment creditor is this case as of September 16,
          2009.  

       6. RAP 12.8 requires that a "judgment debtor" who has satisfied a
          judgment seek restitution from a "judgment creditor" who received the
         satisfaction monies, upon appellate reversal of a monetary judgment.  

       7. Attorney Dennis Clayton and Howard Herman did not intend that the
          judgment of August 18, 2009 be satisfied in any way because Attorney

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No. 29971-6-III
Sloan v. Horizon Credit Union  

          Howard Herman asked for and received an [sic] full assignment of the
          judgment from Horizon Credit Union.  Therefore, pursuant to RAP 12.8
          the judgment of August 18, 2009 stands unsatisfied in the hands of
          Attorney Howard Herman.  

Clerks Papers (CP) at 199-200.  

       Mr. Sloan and Mr. Clayton appealed. 

                                          ANALYSIS

       The issue is whether the trial court erred in refusing to grant Mr. Sloan and Mr. 

Clayton's RAP 12.8 refund motion and concluding they lacked standing to seek RAP 

12.8 restitution.  

       A trial court's determination whether to award restitution under RAP 12.8 is 

reviewed for abuse of discretion.  Ehsani v. McCullough Family P'ship, 160 Wn.2d 586, 

589, 159 P.3d 407 (2007).  "A trial court necessarily abuses its discretion if it bases its 

ruling on an erroneous view of the law."  Wash. State Physicians Ins. Exchange & Ass'n 

v. Fisons Corp., 122 Wn.2d 299, 339, 858 P.2d 1054 (1993).  Both questions of law 

and conclusions of law are reviewed de novo.  Sunnyside Valley Irrigation Dist. v. 

Dickie, 149 Wn.2d 873, 880, 73 P.3d 369 (2003).  A conclusion of law erroneously 

denominated a finding of fact will be subject to de novo review.  Local Union 1296, Int'l 

Ass'n of Firefighters v. City of Kennewick, 86 Wn.2d 156, 161-62, 542 P.2d 1252 

(1975).  Whether a party has standing is a question of law.  Sunnyside, 149 Wn.2d at 

880.  Interpretation of a court rule is also a matter of law.  State v. Robinson, 153 

Wn.2d 689, 693, 107 P.3d 90 (2005).

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No. 29971-6-III
Sloan v. Horizon Credit Union  

       "When a trial court has weighed the evidence in a bench trial, appellate review is 

limited to determining whether substantial evidence supports its findings of fact and, if 

so, whether the findings support the trial court's conclusions of law."  Hegwine v.

Longview Fibre Co., 132 Wn. App. 546, 555, 132 P.3d 789 (2006).  "Substantial 

evidence is evidence sufficient to persuade a fair minded person of the truth of the 

declared premise."  In re Marriage of Hall, 103 Wn.2d 236, 246, 692 P.2d 175 (1984).  

Standing is a "party's right to make a legal claim or seek judicial enforcement of a duty 

or right."  State v. Link, 136 Wn. App. 685, 692, 150 P.3d 610 (2007) (quoting Black's 

Law Dictionary 1442 (8th ed. 2004)).

       RAP 12.8 provides: "If a party has voluntarily or involuntarily partially or wholly 

satisfied a trial court decision which is modified by the appellate court, the trial court 

shall enter orders and authorize the issuance of process appropriate to restore to the 

party any property taken from that party, the value of the property, or in appropriate 

circumstances, provide restitution."  The Restatement of Restitution § 74 is the 

appropriate source to be used in construing RAP 12.8. A.N.W. Seed Corp., 116 Wn.2d 

39, 45-46, 802 P.2d 1353 (1991).  Restatement of Restitution § 74, titled "Judgments 

Subsequently Reversed," states the relevant rule:

              A person who has conferred a benefit upon another in compliance 
       with a judgment, . . . is entitled to restitution if the judgment is reversed or 
       set aside, unless restitution would be inequitable or the parties contract 
       that payment is to be final; if the judgment is modified, there is a right to 
       restitution of the excess.

       First, Horizon attempts to defend the trial court's reasoning it was not liable 

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No. 29971-6-III
Sloan v. Horizon Credit Union  

under RAP 12.8 because it had not received monies in satisfaction of the judgment.  

The court found: "Dennis Clayton and Howard Herman did not intend that the judgment 

of August 18, 2009 be satisfied in any way." CP at 200.  But Mr. Herman indisputably 

received a satisfaction of judgment from Horizon specifying otherwise.  That Mr. 

Herman additionally received a judgment assignment to secure his repayment 

arrangement with Mr. Clayton is irrelevant to whether the judgment was satisfied in the 

first place.  The record shows Mr. Herman did not simply purchase a judgment.  Mr. 

Herman acted to terminate the judgment-debt collection proceedings.  Thus, the trial 

court's finding is not supported by substantial evidence.  As a matter of law, at the 

moment Horizon received and accepted money to satisfy the CR 11 judgment, it acted 

as a judgment creditor discharging the judgment debt, critical under RAP 12.8.  

       Second, Horizon argues the trial court correctly decided Mr. Sloan and Mr. 

Clayton lacked RAP 12.8 standing.  But the satisfaction of judgment acknowledges 

"receipt of payment in full of [the] judgment . . . against the Plaintiff, M. Stanley Sloan 

and his attorney Dennis W. Clayton." CP at 42.  It continues, "Defendant does hereby 

authorize and direct that the Clerk of the above entitled Court enter Satisfaction of 

Judgment accordingly."  Id.  The record shows Mr. Herman paid the judgment on Mr. 

Clayton's behalf because Mr. Herman had asked Mr. Clayton to represent Mr. Sloan in 

the case that resulted in the CR 11 sanctions.  Mr. Herman paid the judgment in order 

to abate debt collection proceedings against Mr. Clayton.  Whether, as Horizon argues, 

the statute of frauds would make the repayment agreement between Mr. Clayton and 

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No. 29971-6-III
Sloan v. Horizon Credit Union  

Mr. Herman unenforceable is irrelevant to whether Mr. Sloan and Mr. Clayton lack 

standing to seek a refund under RAP 12.8.  Similarly, whether unjust enrichment 

principles apply is beside the point. Thus, we do not further address these arguments.

       Under RAP 1.2, the rules of appellate procedure "will be liberally interpreted to 

promote justice" and "issues will not be determined in the basis of compliance or non 

compliance with these rules except in compelling circumstances." RAP 12.8 provides 

for a refund where a party has satisfied a later reversed judgment, our circumstances.  

While Horizon argues Mr. Sloan and Mr. Clayton did not seek relief under RAP 12.8, 

the pleadings and memoranda in the trial court show otherwise.  Horizon's arguments 

at best elevate form over substance.  Mr. Clayton requested relief for Mr. Sloan under 

RAP 12.8 and Horizon resisted.  We conclude standing principles do not bar RAP 12.8 

relief.  Because Horizon does not prevail, we deny its attorney fee request.

       Reversed.  

                                                    _______________________________
                                                    Brown, J.

WE CONCUR:

________________________________                    ________________________________
Kulik, C.J.                                         Sweeney, J. 

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