Law Office of Andrew Bergh

November, 2007
Equitable estoppel doctrine no friend of defendants who take inconsistent positions
by Andrew Bergh

It’s smart to ask prospective clients if they recently filed for bankruptcy.

Why? Because if they did so, failed to list their legal claim among their assets, and were later discharged in bankruptcy, they may be judicially estopped from pursuing any claim. For but one example, see Bartley-Williams v. Kendall, 134 Wn. App. 95 (2006) (affirming dismissal of medical malpractice action because plaintiff did not list claim in schedule of personal property or note action as contingent/unliquidated claim).

But the judicial estoppel doctrine isn’t the only ball game in town (nor is it exclusively available to the defense – it just seems that way given the spate of recent decisions in the bankruptcy context). As shown by Brevick v. City of Seattle, 139 Wn. App. 373 (2007), the doctrine of equitable estoppel is likewise alive and well. In that case, though, it was the defendant who was equitably estopped from taking a litigation position that was inconsistent with earlier conduct.

While driving on a Seattle street, Randy Brevick was hurt in a single-car accident in late October 2002.

The circumstances were a bit unusual.

Brevick was driving on a road with so-called “chicanes,” which are semi-circular islands meant to slow traffic. They were marked with reflective signs instructing motorists to either steer left or right around the chicane. According to Brevick, he steered left when he should have steered right because one of the chicanes was mismarked. He then proceeded to drive onto a parking strip, strike a telephone pole, and lose consciousness. Following treatment in the emergency room, Brevick suffered from seizures for months following the incident.

Intending to sue the city of Seattle for damages, Brevick first had to satisfy the state (RCW 4.96.020) and local (SMC 5.24.005) claim-filing requirements. Under the former, claim forms must be signed by “the claimant or an authorized representative.” The Seattle ordinance, however, says claim forms may be verified by “any relative, attorney, or agent representing the claimant” – provided the claimant is incapacitated, a minor, or nonresident of the state.

Around April 2003, Brevick’s lawyer prepared a claim form for damages, which he signed under penalty of perjury and filed with the city. After waiting the requisite 60 days, Brevick sued the city for damages in King County Superior Court. His complaint specifically alleged that he had complied with both RCW 4.96.020 and SMC 5.24.005 – and the city specifically admitted in its answer that he had done so.

During the next 18 months, the parties deposed witnesses and exchanged written discovery requests, and the city conducted CR 35 examinations. But after the trial court denied his motion for a continuance, Brevick voluntarily dismissed the case in February 2005.

For unclear reasons, Brevick didn’t refile until October 3, 2005 – just 23 days before the statute of limitations ran. On November 18, 2005, shortly after the statute expired, the city filed an answer which this time denied that Brevick had complied with the claim-filing requirements. The alleged basis for its about-face? That Brevick had failed to comply with RCW 4.96.020 since the claim form was signed by his attorney.

So was the city just kidding? Not hardly, as the defendant later moved for summary judgment. In his opposing declaration, Brevick said he didn’t personally sign the claim form because he was incapacitated.

At the summary judgment hearing, the trial court directed the parties to file supplemental briefs on an additional issue: whether Brevick was required to re-present his claim before filing his second complaint. Even though the city took no position on this issue in its supplemental brief, the trial court eventually granted summary judgment in its favor on the ground that, as a jurisdictional matter, Brevick should have re-filed his claim.

In the ensuing appeal, Brevick argued that the city was equitably estopped from raising his failure to comply with RCW 4.96.020 since the city had earlier admitted, in its answer to the first complaint, that he had complied with the statute. As a back-up argument, Brevick said the city had waived its right to assert the defense by engaging in litigation for 18 months. The city meanwhile contended that its “admission of compliance” was in a “former action” – and thus of no effect in the second lawsuit. (Showing at least some sign of a conscience, however, the city agreed that Brevick wasn’t required to re-present his claim.)

At the outset, the Court of Appeals (Division One) noted that equitable estoppel has three elements. The doctrine applies where

one party has made an admission, statement, or act inconsistent with the later claim;
another party reasonably relies on the admission, statement, or act; and
the relying party would be injured if the first party is allowed to contradict or repudiate the admission, statement, or act.

139 Wn. App. at 378-79. The rationale for the rule, said the court, is that “a party should be held to a representation made or position assumed where inequitable consequences would otherwise result to another party who has justifiably and in good faith relied thereon.” Id. at 379.

In earlier reported decisions involving the equitable estoppel doctrine, the plaintiff had only filed one complaint. Consequently, the city argued that since Brevick had filed two complaints, it wasn’t bound by its admission in its answer to the first complaint. But Division One readily dispatched this claim:

The rationale behind equitable estoppel does not require that inconsistent statements be made in the same lawsuit, and the City cites no authority limiting equitable estoppel only to situations of inconsistencies within the same lawsuit.

Id. at 380.

To cut to the chase, the Court of Appeals ultimately reinstated Brevick’s suit because he had met all three elements of the doctrine. First, the city’s admission of compliance in the first lawsuit was clearly inconsistent with its denial in the second lawsuit. Second, Brevick had reasonably relied on the prior admission to presume compliance wasn’t an issue in the second lawsuit. And third, Brevick was unmistakably injured since he “no longer ha[d] any avenue for relief.”

Alternatively, Division One held that even if the city wasn’t equitably estopped, it had waived its right to assert a claim-filing defense.

The waiver doctrine “is designed to prevent a defendant from ambushing a plaintiff during litigation either through delay in asserting a defense or misdirecting the plaintiff away from a defense for tactical advantage.”

For further details, please see the court’s discussion at pages 381-82.

In terms of practice tips, several things come to mind:

Brevick is a timely reminder that when suing a governmental entity, local claim-filing requirements should faithfully be checked, too. Though the Seattle ordinance was more permissive (or at least more detailed), that might not always be true.
The case illustrates one of the advantages of filing at an early stage. Even after 18 months of litigation, Brevick still had the option of taking a nonsuit with plenty of time to file a second lawsuit.
The case likewise illustrates the perils of filing too near the end of the limitations period (though it’s of course understandable why Brevick thought he could safely do so). Ideally, the complaint should be filed and served far enough in advance so affirmative defenses that could bar the plaintiff’s claim can be timely addressed.

But the main benefit of Brevick v. City of Seattle is its discussion of equitable estoppel and the related waiver doctrine. If the defense ever pulls any similar shenanigans in one of your cases, the Court of Appeals’ opinion offers a good starting point for your research.

Andrew Bergh, WSTLA EAGLE member, former prosecutor and insurance defense attorney, now limits his practice to plaintiff's personal injury cases, including professional liability and insurance bad faith.