Business Services of America II, Inc. v. WaferTech, LLC

Business Services of America II, Inc. (BSA) sued

WaferTech LLC. After the trial court dismissed BSA's claims, BSA appealed. In

March 2004, the Court of Appeals affirmed dismissal of all but one claim, which it

remanded for trial. After remand, the case lay mostly dormant until June 2009,

when BSA noted the case for trial. WaferTech then moved for dismissal. The trial

court granted the motion to dismiss, and BSA appealed. BSA argued that the trial

court had no discretion to dismiss the case because CR 41(b)(1) states that if a case

is noted for trial before a dismissal hearing, it "shall not" be dismissed. The Court

of Appeals agreed with BSA and reversed. WaferTech sought review. We affirm

the Court of Appeals and remand to the trial court for further proceedings consistent

with this opinion.

Facts

BSA and WaferTech were opposing parties in a lawsuit that began in 1998



Bus. Servs. of Am. II, Inc. v. WaferTech LLC, No. 85654-1



following a construction contract dispute. BSA was the assignee of claims by a

subcontractor who had been terminated from the contract. At trial all of BSA's

claims against WaferTech were dismissed, and $856,760.48 in attorney fees were

entered against it. The Court of Appeals affirmed dismissal of most claims but

reversed with respect to a lien foreclosure claim, which it remanded for trial in

2004. Bus. Servs. of Am. II, Inc. v. WaferTech, LLC, noted at 120 Wn. App. 1042,

2004 WL 444724.

In April 2005, WaferTech filed a satisfaction of judgment with respect to the

attorney fees it had been awarded. Then, in July 2006, the trial court issued a

"Stipulation and Order for Return of Exhibits." Neither party responded to the

order, and the trial court destroyed the exhibits. Next, in May 2008, BSA's counsel

filed a notice of intent to withdraw as BSA's counsel in the case. The notice stated,

not entirely accurately, "No trial date is set. This case has been dismissed and

judgment entered thereon against Plaintiffs." Clerk's Papers (CP) at 43.

After remand, BSA went through a receivership and changed ownership

several times. Finally, in 2009, the current owner of BSA's claim decided to try the

lien claim. BSA noted the case for trial on June 15, 2009. Two months later,

WaferTech moved for dismissal. BSA opposed the motion, arguing that CR

41(b)(1) prohibited dismissal because it states that a case shall not be dismissed if it

is noted for trial before the hearing on the motion to dismiss. The trial court granted

dismissal, finding that it was not constrained by CR 41(b)(1). BSA appealed, and

the Court of Appeals reversed the trial court, holding that CR 41(b)(1) limited the



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court's discretion to dismiss the case. Bus. Servs. of Am. II, Inc. v. Wafertech, LLC,

159 Wn. App. 591, 245 P.3d 257 (2011).

Analysis

a. Standard of Review

Interpretation of a court rule is a question of law we review de novo. State v.

Schwab, 163 Wn.2d 664, 671, 185 P.3d 1151 (2008) (citing City of College Place

v. Staudenmaier, 110 Wn. App. 841, 845, 43 P.3d 43 (2002)). Court rules are

interpreted in the same manner as statutes and are construed in accord with their

purpose. State v. Wittenbarger, 124 Wn.2d 467, 484, 880 P.2d 517 (1994). The

starting point is thus the rule's plain language and ordinary meaning. See State v.

J.P., 149 Wn.2d 444, 450, 69 P.3d 318 (2003) (citing Nat'l Elec. Contractors Ass'n

v. Riveland, 138 Wn.2d 9, 19, 978 P.2d 481 (1999)).

b. Dismissal under CR 41(b)(1)

The dismissal of an action for want of prosecution is in the discretion of the

court in the absence of a guiding statute or rule of court. Snohomish County v.

Thorp Meats, 110 Wn.2d 163, 167, 750 P.2d 1251 (1988) (citing State ex rel.

Dawson v. Superior Court, 16 Wn.2d 300, 304, 133 P.2d 285 (1943)). However,

dismissal is mandatory if CR 41(b)(1) applies. Id. at 167, 168-69. The rule states

in full:

Any civil action shall be dismissed, without prejudice, for want of

prosecution whenever the plaintiff, counterclaimant, cross claimant, or

third party plaintiff neglects to note the action for trial or hearing within

1 year after any issue of law or fact has been joined, unless the failure

to bring the same on for trial or hearing was caused by the party who

makes the motion to dismiss. Such motion to dismiss shall come on for



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hearing only after 10 days' notice to the adverse party. If the case is

noted for trial before the hearing on the motion, the action shall not

be dismissed.

CR 41(b)(1) (emphasis added). There is only one exception to the mandatory

application of the italicized portion of the rule: "Where dilatoriness of a type not

described by CR 41(b)(1) is involved, a trial court's inherent discretion to dismiss

an action for want of prosecution remains." Thorp Meats, 110 Wn.2d at 169 (citing

Gott v. Woody, 11 Wn. App. 504, 508, 524 P.2d 452 (1974)). Such dilatoriness

"refers to unacceptable litigation practices other than mere inaction." Wallace v.

Evans, 131 Wn.2d 572, 577, 934 P.2d 662 (1997).

The sole question is whether CR 41(b)(1) applies in this case to limit the trial

court's inherent discretion to dismiss. BSA's argument is straightforward. It claims

that it noted the case before the hearing on the motion to dismiss, and therefore the

case cannot be dismissed. See CR 41(b)(1). WaferTech makes two arguments in

response. First, it asserts that this case falls under the "unacceptable litigation

practices other than mere inaction" exception to the rule in CR 41(b)(1). Wallace,

131 Wn.2d at 577. Specifically, it relies on the lack of any response from BSA to

the trial court's stipulation and order for return of exhibits and the notice of

withdrawal from BSA's counsel, sent to both the trial court and WaferTech, stating

that the case had been dismissed. WaferTech claims that these two instances

amount to conduct other than mere inaction, and thus the court was within its

discretion to dismiss the action. See id.

Second, WaferTech argues that CR 41(b)(1) does not apply on remand. It



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claims that CR 41(b)(1), by its terms, applies when a case is not noted "within 1

year after any issue of law or fact has been joined" and asserts this requirement is

rendered inoperative when a case has been noted, tried, appealed, and remanded in

part. It also points out that no case has ever applied CR 41(b)(1) to limit, on

remand from appeal, a court's inherent authority to dismiss a case.

The trial court in making its decision to dismiss the case primarily relied upon

WaferTech's second argument. The following is the language at issue in this case:

"If the case is noted for trial before the hearing on the motion, the action shall not be

dismissed." CR 41(b)(1). This court addressed the purpose behind that language in

Thorp Meats:



This sentence was promulgated to encourage cases to be heard on the

merits, the courts recognizing that involuntary dismissal for want of

prosecution "is punitive or administrative in nature and every

reasonable opportunity should be afforded to permit the parties to

reach the merits of the controversy." Thus, the notice of trial setting

interposed after the motion to dismiss and before the hearing on the

motion is the exception to what would otherwise be a mandatory

dismissal under CR 41(b)(1).

Thorp Meats, 110 Wn.2d at 168 (footnote omitted) (quoting Yellam v. Woerner, 77

Wn.2d 604, 608, 464 P.2d 947 (1970)). Relying on the statement that the purpose

of the rule is to encourage cases to be heard on the merits, WaferTech asserts that

when issues of fact and law are joined in a case, and the case is noted for trial, tried

on the merits, appealed, and remanded for further trial, the concerns underlying the

promulgation of CR 41(b)(1) are no longer relevant. According to WaferTech,

under these circumstances the rule's purpose has been served because the merits of



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the controversy have already been reached at least once. WaferTech also contends

that CR 41(b)(1) by its terms applies only when a case is not noted within a year

after joinder of any issues and so cannot apply to a case that was already noted and

tried, appealed, and then remanded. See CR 41(b)(1). Thus, WaferTech argues, a

trial court regains its discretion to dismiss at the point of remand.

As the Court of Appeals pointed out, there is no authority whatsoever for the

claim that the rule does not apply after remand. Bus. Servs., 159 Wn. App. at 598.

Moreover, we have held under the predecessor rule to CR 41(b)(1) that an issue of

law or fact is joined when, among other circumstances, a case is remanded from an

appeal. State ex rel. Wash. Water Power Co. v. Superior Court, 41 Wn.2d 484,

490, 250 P.2d 536 (1952) (citing Rule 3, former Rules of Pleading, Practice and

Procedure, 34A Wn.2d 69 (1938)). There is no reason to treat CR 41(b)(1)

differently, and we hold CR 41(b)(1) applies to cases on remand.

WaferTech's other argument relies on the solitary exception to the ordinarily

strict application of CR 41(b)(1). In Wallace, 131 Wn.2d at 577, as mentioned, this

court found that a trial court has discretion to ignore the prohibition of dismissal

under CR 41(b)(1) where delay was caused by "unacceptable litigation practices

other than mere inaction." WaferTech argues BSA went beyond "mere inaction" by

(1) failing to respond to the court's order resulting in destruction of exhibits and (2)

stating that the case had been dismissed in its notice of withdrawal of counsel. As a

result of these actions, WaferTech maintains that the trial court had discretion to

dismiss the case despite CR 41(b)(1).



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In both Wallace and Thorp Meats, this court expressly referred readers to the

Court of Appeals case Gott for examples of the sort of behavior not covered by CR

41(b)(1). Wallace, 131 Wn.2d at 577-78 (citing Gott, 11 Wn. App. at 508); Thorp

Meats, 110 Wn.2d at 169 n.14 (citing Gott, 11 Wn. App. at 508). Specifically, both

cases cite to the following passage from Gott:



We do not believe, as defendants contend, that this interpretation

will seriously invade the discretionary power of the Superior Court to

manage its affairs, so as to achieve the orderly and expeditious

disposition of cases, to assure compliance with the court's rulings and

observance of hearing and trial settings which are made. In these areas

the trial court's inherent discretion is not questioned by our

interpretation. See Wagner v. McDonald, 10 Wn. App. 213, 516 P.2d

1051 (1973) (dismissal for want of prosecution where plaintiff failed to

appear at trial). See also Link v. Wabash R.R., 370 U.S 626, 8 L. Ed.

2d 734, 82 S. Ct. 1386 (1962) ([Fed. R. Civ. P.] 41) (dismissal where

failure to appear at pretrial conference was combined with general

dilatoriness).

Gott, 11 Wn. App. at 508. Other cases, although not expressly addressing want of

prosecution, have allowed discretionary dismissal for failures to appear, filing late

briefs, and similarly egregious sorts of dilatory behavior. E.g., Apostolis v. City of

Seattle, 101 Wn. App. 300, 305, 3 P.3d 198 (2000).1



The behavior engaged in by BSA here does not rise to the level of

"unacceptable litigation practices other than mere inaction." Wallace, 131 Wn.2d

at 577. A lack of response to the court's recall of exhibits is not equivalent to a



1 BSA also argues that WaferTech's claim is more appropriately viewed as an estoppel claim than

a failure to prosecute claim and spends some time arguing why an estoppel claim would fail here.

It is not clear why BSA is raising an argument for WaferTech, but since WaferTech does not raise

it, the court will not address it.

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failure to appear at a court proceeding or noncompliance with a court order or

ruling. No response was required to the court's stipulation and order.2 The



withdrawal of counsel accompanied by a statement that the case had been

dismissed, while certainly not commendable, is likewise not an unacceptable

litigation practice that is a basis for an exception to CR 41(b)(1). The withdrawal

notice came about four years after the case was remanded for trial, and there is no

evidence that any party took any action or relied in any way on the statement in the

notice that the case was "dismissed." CP at 43.

While we do not commend BSA's failure to promptly move its case forward,

neither should WaferTech be commended. At all times, WaferTech knew that the

Court of Appeals had remanded the lien claim for trial. See Report of Proceedings

(Aug. 26, 2009) at 3-5. CR 41(b)(1) is designed to provide an option for parties like

WaferTech if they wish for early resolution. Certainly no one would expect BSA to

move to dismiss its own claim. One year after remand, WaferTech could have

moved at any time to dismiss BSA's claim for want of prosecution. See CR

41(b)(1). If WaferTech was concerned that delay would prejudice its ability to

present its case, a motion under CR41(b)(1) was available to WaferTech to bring

the case to a conclusion.3 WaferTech failed to move under CR 41(b)(1) for four



2 It is not clear from the record whether either party retains copies of the exhibits. The record

does establish that the trial court possesses copies of all files on microfiche.

3 Surprisingly, the dissent claims the majority says something it does not. To wit: that WaferTech

had an obligation to "forward the prosecution of the case." Dissent at 7. We do not assert or

even suggest that a defendant has any such obligation. We do suggest that if a defendant wants a

case dismissed for want of prosecution, moving for dismissal before the opponent notes its case

for trial is the best way for the defendant to accomplish its goal.

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years and finally made its motion only after BSA noted the case for trial. Further,

while WaferTech complains that BSA did not respond to the trial court's

"Stipulation and Order for Return of Exhibits," which it claims resulted in the

destruction of trial court exhibits, WaferTech also failed to respond to the notice

regarding exhibits.4 If WaferTech wanted to save the trial court exhibits, it could



easily have done so. WaferTech seems to make much of BSA's counsel's notice of

intent to withdraw, in which the withdrawing lawyer erroneously states, "[T]his case

has been dismissed and judgment entered thereon against Plaintiffs." CP at 43. But

the notice of intent was not an order dismissing a claim. The "Notice of Intent to

Withdraw" in fact presented WaferTech with a perfect opportunity to seek an order

of dismissal of all claims, but it failed to do so.

Trial courts, of course, have inherent authority to maintain their calendars and

to control their courtrooms. The facts of this case do not implicate that authority.



* * *



See: http://www.courts.wa.gov/opinions/index.cfm?fa=opinions.showOpinion&filename=856541MAJ

We hold that because this case was noted for trial before the hearing on the

motion to dismiss, under the plain terms of CR 41(b)(1), the trial judge lacked

discretion to dismiss the case. Under the facts before us, BSA did not engage in the

sort of unacceptable litigation practices that would allow an exception to CR

41(b)(1). The Court of Appeals is affirmed.