source: Caselaw Access Project

author: Justice Pearce, opinion of the Court:

license: Public Domain

text:
    STATE of Utah, Appellant, v. Scott Richard STEWART, Appellee.
    No. 20160484
    Supreme Court of Utah.
    Filed June 12, 2018 Rehearing Denied September 6, 2018
    Sean D. Reyes, Att'y Gen., John J. Nielsen, Asst. Solic. Gen., Jacob S. Taylor, Asst. Att'y Gen., Salt Lake City, for appellant
    J. Morgan Philpot, Alpine, for appellee
    Justice Pearce authored the opinion of the Court in which Chief Justice Durrant, Associate Chief Justice Lee, Justice Himonas, and Justice Petersen joined.
   Justice Pearce, opinion of the Court:

INTRODUCTION

¶ 1 The State charged Scott Richard Stewart with, among other crimes, one count of participating in a pattern of unlawful activity. The State also alleged that Stewart had committed securities fraud and that some of those crimes were part of his pattern of unlawful activity. Because the statute of limitations had run on a number of the alleged acts, Stewart moved to exclude them. Stewart argued that a pattern of unlawful activity cannot be based on crimes that the State could not separately charge because the statute of limitations had run. The district court agreed and granted Stewart's motion. The State seeks interlocutory review of that decision. This requires us to interpret the Pattern of Unlawful Activity Act, Utah Code sections 76-10-1601 to 1609. We conclude that the statute does not prevent the State from using evidence of acts on which the statute of limitations has expired to prove a pattern of unlawful activity. We reverse the district court's order and remand.

BACKGROUND

¶ 2 In 2013, the State charged Stewart with, among other things, thirteen counts of securities fraud or, in the alternative, thirteen counts of communications fraud. The State also charged Stewart with one count of a pattern of unlawful activity. After the court bound Stewart over for trial, we decided State v. Taylor , 2015 UT 42, 349 P.3d 696, and State v. Kay , 2015 UT 43, 349 P.3d 690. Those cases concluded that securities fraud and communications fraud are not continuing offenses. Taylor , 2015 UT 42, ¶ 24, 349 P.3d 696 ; Kay , 2015 UT 43, ¶ 23, 349 P.3d 690. These rulings undercut the State's prosecution because the State relied on the theory that some of the counts of securities fraud and communications fraud were continuing offenses. In response, the State filed an amended information to exclude several of the charges on which the statute of limitations had expired. The amended information charged two counts of securities fraud, one count of sale of an unregistered security, one count of unlicensed investment advisor activity, and one count of a pattern of unlawful activity.

¶ 3 The State indicated that it planned to call twelve of Stewart's investors to testify about the investments they made on Stewart's advice-investments they claim Stewart had defrauded them into making. In other words, the State intended to call witnesses to testify concerning the untimely charges of securities fraud that the State had voluntarily dismissed in response to Kay and Taylor . The State represented that it planned to use the investor testimony to prove the pattern of unlawful activity charge. Stewart moved to exclude that testimony arguing that time-barred offenses cannot support a pattern of unlawful activity.

¶ 4 The district court excluded the evidence. The district court explained, " Kay clarifies that securities fraud is not a continuing offense, and a claim for pattern of unlawful activity must be predicated on acts that, themselves, would be chargeable." The district court quoted Kay 's conclusion that "if the actual communication falls outside the statute of limitations, the State cannot rely on the presence of a predicate scheme to extend the limitations period." (Quoting Kay , 2015 UT 43, ¶ 18, 349 P.3d 690 ). The district court concluded that "[b]ecause the predicate acts relied on by the State regarding [the original victims] are outside the statute of limitations for a communications fraud claim, they may not be used to prove the pattern of unlawful activity charge." We granted the State's petition for interlocutory appeal to review that conclusion.

ISSUE AND STANDARD OF REVIEW

¶ 5 The State contends that the trial court erred by excluding evidence of predicate acts that were part of the alleged pattern of unlawful activity. The State's challenge requires us to interpret Utah's Pattern of Unlawful Activity Act. Specifically, we must determine whether the prosecution may establish a pattern of unlawful activity using evidence of individual acts that are time barred under the relevant statute of limitations. See UTAH CODE § 76-10-1602(2). "We review questions of statutory interpretation for correctness, affording no deference to the district court's legal conclusions." Marion Energy, Inc. v. KFJ Ranch P'ship , 2011 UT 50, ¶ 12, 267 P.3d 863 (citation omitted).

ANALYSIS

Utah's Pattern of Unlawful Activity Act

¶ 6 Utah's Pattern of Unlawful Activity Act (Act) criminalizes certain acts involving a pattern of unlawful activity. The Act proscribes a principal of a pattern of unlawful activity from using or investing the income derived from the unlawful activities. UTAH CODE § 76-10-1603(1). It also penalizes the acquisition or maintenance of an interest in or control of any enterprise that undertakes a pattern of unlawful activity. Id. § 76-10-1603(2). Finally, the Act forbids a person from participating in, or conducting, the affairs of an enterprise engaged in a pattern of unlawful acts. Id. § 76-10-1603(3). To understand the Act and this dispute, it helps to first focus on the definitions of "unlawful activity" and "pattern of unlawful activity" as well as the Act's five-year "lookback" period.

¶ 7 Unlawful activity means "to directly engage in conduct or to solicit, request, command, encourage, or intentionally aid another person to engage in conduct which would constitute any offense" listed in the statutory definition. Id. § 76-10-1602(4). Unlawful activity also means "to attempt or conspire to engage in an act which would constitute any of those offenses, regardless of whether the act is in fact charged or indicted by any authority or is classified as a misdemeanor or a felony." Id. The statute lists ninety crimes and categories of crimes that can constitute unlawful activity. Id.

¶ 8 And a pattern of unlawful activity means:

engaging in conduct which constitutes the commission of at least three episodes of unlawful activity, which episodes are not isolated, but have the same or similar purposes, results, participants, victims, or methods of commission, or otherwise are interrelated by distinguishing characteristics. Taken together, the episodes shall demonstrate continuing unlawful conduct and be related either to each other or to the enterprise.

Id. § 76-10-1602(2).

¶ 9 The Act also contains a five-year lookback period. The statute requires that "[a]t least one of the episodes comprising a pattern of unlawful activity shall have occurred after July 31, 1981. The most recent act constituting part of a pattern of unlawful activity as defined by this part shall have occurred within five years of the commission of the next preceding act alleged as part of the pattern." Id.

Time-Barred Acts May Be Used to Establish a Pattern of Unlawful Activity

¶ 10 The district court concluded that to be considered part of the pattern, Stewart's alleged fraud must have occurred within the statute of limitations for a fraud claim. In other words, under the district court's interpretation, the State has to base the unlawful pattern upon crimes for which the statute of limitations has not run. Stewart urges us to accept this interpretation.

¶ 11 The State contends that the trial court misinterpreted the Act's plain language. The State argues that a straightforward reading of the statute reveals that time-barred counts can be used to demonstrate a pattern of unlawful activity.

¶ 12 "It is well settled that when faced with a question of statutory interpretation, 'our primary goal is to evince the true intent and purpose of the Legislature.' " Marion Energy, Inc. v. KFJ Ranch P'ship , 2011 UT 50, ¶ 14, 267 P.3d 863 (citation omitted). "The best evidence of the legislature's intent is 'the plain language of the statute itself.' " Id. (citation omitted). We "presume that the legislature used each word advisedly and read each term according to its ordinary and accepted meaning." Turner v. Staker & Parson Cos. , 2012 UT 30, ¶ 12, 284 P.3d 600 (citation omitted). "Wherever possible, we give effect to every word of a statute, avoiding '[a]ny interpretation which renders parts or words in a statute inoperative or superfluous.' " Id. (alteration in original) (citation omitted).

¶ 13 Additionally, when interpreting statutes, "we 'presume[ ] that the expression of one [term] should be interpreted as the exclusion of another,' " and we "seek to give effect to omissions in statutory language by presuming all omissions to be purposeful." Marion Energy , 2011 UT 50, ¶ 14, 267 P.3d 863 (alterations in original) (citation omitted). However, "our plain language analysis is not so limited that we only inquire into the individual words and subsections in isolation; our interpretation of a statute requires that each part or section be 'construed in connection with every other part or section so as to produce a harmonious whole.' " Anderson v. Bell , 2010 UT 47, ¶ 9, 234 P.3d 1147 (emphasis omitted) (citation omitted).

¶ 14 As an initial matter, we note that the Legislature could have drafted the statute to expressly permit or reject the use of criminal acts that are outside the statute of limitations. It did not, and in the absence of an express statement, we are left to examine the statute for the best textual indications of what the Legislature intended. The State argues that the best interpretation of the statute is one that permits the pattern to include untimely criminal acts because the contrary interpretation-the one the district court adopted-renders the five-year lookback period meaningless. We agree.

¶ 15 The lookback period requires that "[t]he most recent act constituting part of a pattern ... occur[ ] within five years of the commission of the next preceding act alleged as part of the pattern." UTAH CODE § 76-10-1602(2). By its plain language, the lookback period requires that no more than five years separate the penultimate episode of unlawful activity from the most recent episode in the pattern. As noted above, the Act does not refer to the statute of limitations for the underlying crimes.

¶ 16 An examination of the definition of "unlawful activity" suggests that the Legislature intended that the lookback would serve as the only temporal consideration to establish a pattern of unlawful activity. Ninety crimes and categories of crimes, including both felonies and misdemeanors, fall within the definition of unlawful activity; each has its own statute of limitations. See id. § 76-10-1602(4). Prosecution for misdemeanor crimes, some of which fall under the definition of unlawful activity must be commenced within two years after the commission of the crime. Id. § 76-1-302(1)(b). Prosecution for felony crimes, subject to several exceptions, must be commenced within four years after commission of the crime. Id. § 76-1-302(1)(a). And certain crimes are not subject to a statute of limitations at all. Id. § 76-1-301(2). For example, the definition of unlawful activity includes assault, a misdemeanor subject to a two-year statute of limitations. Id. §§ 76-10-1602(4)(j), 76-5-102(2), (3), 76-1-302(1)(b). The definition also includes aggravated assault, a felony subject to a four-year statute of limitations. Id. §§ 76-10-1602(4)(j), 76-5-103(2), (3), 76-1-302(1)(a). And the definition encompasses aggravated kidnapping, a felony that is not subject to a statute of limitations. Id. §§ 76-10-1602(m), 76-1-301(2)(f).

¶ 17 If we read the statute to require individual instances of unlawful activity to be timely under their relevant statutes of limitations, we would read the five-year lookback out of the statute. By way of example, imagine a prosecutor who relies on three instances of misdemeanor assault to establish a pattern of unlawful activity. If the statute required all three instances of assault to be not time barred, all three instances must occur within the two year statute of limitations for misdemeanor crimes. This interpretation renders the five-year lookback period meaningless. And when faced with competing interpretations, we generally prefer the one that breathes meaning into each provision of the statute. See Oliver v. Utah Labor Comm'n , 2017 UT 39, ¶ 21, 424 P.3d 22 ("A proposed interpretation that is plausible in isolation may ... 'lose[ ] its persuasive effect when we [seek to] harmonize [it] with the rest of' the statutory scheme." (alterations in original) (citation omitted) ); In re J.M.S. , 2011 UT 75, ¶ 22, 280 P.3d 410 ("In essence, statute[s] should be construed ... so that no part [or provision] will be inoperative or superfluous, void or insignificant, and so that one section will not destroy another." (alterations in original) (omission in original) (citation omitted) ).

¶ 18 Stewart's main counter to the State's argument focuses on the Act's definition of unlawful activity. The statute defines unlawful activity, in part, as conduct "which would constitute any offense." UTAH CODE § 76-10-1602(4). Stewart argues that conduct which falls outside the limitations period is not chargeable and therefore cannot be deemed to be an offense. And Stewart finds some superficial support for that argument in our jurisprudence.

¶ 19 In State v. Crank , we noted that a "statute of limitations is not a mere limitation on penalty, but is a bar to prosecution.... The statute runs against the filing of [a] complaint or information; against the attempt to prosecute." 105 Utah 332, 142 P.2d 178, 193 (1943). We concluded that "in effect, that as far as such offense is concerned, a man may not in law be considered as having committed it; he may not, within the spirit of the law be properly accused thereof or charged therewith." Id. at 193-94. We ultimately held that a "[d]efendant has a right to insist that a complaint or information in as far as it charges an offense barred by limitations be quashed." Id. at 193.

¶ 20 The flaw in Stewart's argument is that although a statute of limitations may serve as a bar to prosecution, it does not negate the illegality of conduct. In other words, a criminal act does not cease to be an offense just because the State cannot properly charge the defendant with the crime. This becomes plain when we remember that a "criminal statute of limitations is an affirmative defense that can be forfeited if not raised before or during trial." State v. Jackson , 2011 UT App 318, ¶ 35, 263 P.3d 540, cert. denied , 272 P.3d 168 (Utah 2012). Thus, our general discussion in Crank does not mandate a different result than the one we reach.

¶ 21 Finally, we note that the district court relied, in part, on language from State v. Kay , 2015 UT 43, 349 P.3d 690, to reach its conclusion. The court explained that Kay clarifies that communications fraud is not a continuing offense, and "a claim for pattern of unlawful activity must be predicated on acts that, themselves, would be chargeable." Relying on Kay , the court explained that " 'if the actual communication falls outside the statute of limitations, the State cannot rely on the presence of a predicate scheme to extend the limitations period.' " (Quoting id. ¶ 18 ). The court concluded that "[b]ecause the predicate acts relied on by the State ... are outside the statute of limitations for a communications fraud claim, they may not be used to prove the pattern of unlawful activity charge."

¶ 22 Kay examined the question of whether or not communications fraud is considered a continuing offense. Id. ¶ 9. We concluded that communications fraud is not a continuing offense, despite the State's argument that the language " 'scheme or artifice' compels the conclusion that communications fraud is a continuing offense inasmuch as 'schemes continue as long as they are in operation.' " Id. ¶ 18. We acknowledged that "[a]mple authority recognizes that an ongoing criminal design or scheme is not the same as a continuing offense[,]" and "[e]ach are specific terms of art...." Id. ¶ 19. The district court relied on our conclusion that "if the actual communication falls outside the statute of limitations, the State cannot rely on the presence of a predicate scheme to extend the limitations," id. ¶ 18, but this conclusion does not speak to the question of whether those communications could be used to prove an unlawful pattern.

¶ 23 The district court also relied on other language in Kay that suggested that the underlying instances of unlawful activity must be within the statute of limitations to form the basis of a pattern charge. After concluding that the charges for communications fraud were untimely, we noted that "because the pattern of unlawful activity charge was predicated on the four [untimely] charges of communications fraud, the district court correctly dismissed all of the charges...." Id. ¶ 23. Although this language supports the district court's interpretation, in Kay we were not squarely presented with the issue that the State presses here-whether or not a pattern of unlawful activity may be based on untimely acts. In Kay , the State did not argue that the pattern of unlawful activity charge could stand alone without the underlying communications fraud charges. Nor did the State argue that anything else could sustain a pattern of unlawful activity charge. And because we were not presented with the issue in Kay , the language the district court relied upon-which comprises one sentence devoid of analysis-did not examine the statute or consider the arguments that the parties raise here.

¶ 24 More specifically, we did not address the five-year lookback period provision in Kay , nor did the parties advance an argument about its significance in interpreting the statute. Here, we are faced with a more specific problem. We are asked to decide, even if a pattern of unlawful activity charge is not a continuing offense, whether individual crimes that are outside of the relevant statute of limitations can form the basis of the charge. Here, the parties placed this argument squarely before us, and after considering conflicting interpretations, we conclude that the reading that gives meaning to the five-year lookback provision is the better reading. Accordingly, we disavow the sentence in Kay that could be read to prohibit the use of untimely predicate acts to establish a pattern of unlawful activity.

CONCLUSION

¶ 25 We conclude that the best reading of the Pattern of Unlawful Activity Act permits the State to base a pattern of unlawful activity on crimes on which the statute of limitations has expired. We reverse the district court's decision and remand.

      Because this case comes to us on an interlocutory appeal, the allegations we recite have not been tried and therefore remain allegations. "On interlocutory review, we recount the facts as alleged and in a light most favorable to the ruling below." State v. Taylor , 2015 UT 42, ¶ 2 n.2, 349 P.3d 696.

      In Taylor , we explained that generally, the limitations period for an offense "begins to run when a crime is 'committed.' " 2015 UT 42, ¶ 12, 349 P.3d 696 (citation omitted). However, "the Legislature has structured the elements of some offenses in such a way that a perpetrator continues to commit the offense so long as he continues to satisfy the elements." Id. When structured this way, "criminal liability attaches when every element is satisfied, [but] the statute of limitations does not begin to run until the perpetrator ceases to satisfy the elements of the crime. At that point, the whole arc of criminal conduct is aggregated into a single criminal violation." Id.

      This appears to be a misstatement, as Kay involved communications, and not securities, fraud. 2015 UT 43, ¶ 1, 349 P.3d 690. In its amended information, the State explained that "[t]he alleged unlawful acts which constitute the pattern of unlawful activity include but are not limited to [instances of securities fraud] as described above in counts 1 through 4." Although not entirely clear from the amended information, it appears that the State intended to rely exclusively on alleged securities fraud to establish the pattern of unlawful activity. Further, the proposed jury instructions refer only to securities fraud, sale of an unregistered security, and unlicensed investment advisor activity in its pattern of unlawful activity instruction. And finally, the State explains in its brief that the district court "correctly noted that the relevant predicate acts here are securities fraud charges, but appears to mistakenly refer to them later in its order as communications fraud charges." However, whether the underlying unlawful activities are instances of communications fraud or instances of securities fraud is immaterial to our analysis.

      By way of example, these crimes include criminal violations of the Environmental Quality Code, criminal homicide, causing a catastrophe, theft, theft by deception, criminal usury, and mortgage fraud. See Utah Code § 76-10-1602(4)(b), (l), (q), (v), (w), (ll), (qq).

      The lookback period also requires that at least one of the episodes comprising a pattern of unlawful activity occur after July 31, 1981. Utah Code § 76-10-1602(2). That provision is not at issue here.

      The district court's order states that "Kay clarifies that securities fraud is not a continuing offense...." However, Kay examined the issue of whether or not communications fraud is a continuing offense. 2015 UT 43, ¶ 1, 349 P.3d 690. In Kay 's companion case, State v. Taylor , we relied on similar reasoning to conclude that securities fraud is not a continuing offense. 2015 UT 42, ¶¶ 18-24, 349 P.3d 696. Although it is unclear whether the district court intended to rely on Kay or Taylor , the logic of neither case answers the question presented here for the reasons discussed above.


author: JOHNSON, J.

text:
    Certification From the United States Court of Appeals for the Ninth Circuit in Shannon C. ADAMSON and Nicholas Adamson, husband and wife, Plaintiffs-Appellees, v. PORT OF BELLINGHAM, a Washington Municipal Corporation, Defendant-Appellant.
    Shannon C. Adamson and Nicholas Adamson, husband and wife, Plaintiffs-Appellants, v. Port of Bellingham, a Washington Municipal Corporation, Defendant-Appellee.
    No. 96187-5
    Supreme Court of Washington.
    Filed APRIL 11, 2019
    James P. Jacobsen, Joseph Stephen Stacey, Stacey & Jacobsen PLLC, 4039 21st Avenue W, Suite 401, Seattle, WA 98199-1252, Philip Albert Talmadge, Talmadge/Fitzpatrick/Tribe, 2775 Harbor Avenue SW, Third Floor, Suite C, Seattle, WA 98126-2138, for Plaintiff.
    Jason Wayne Anderson, Michael Barr King, Camey Badley Spellman PS, 701 5th Avenue, Suite 3600, Seattle, WA 98104-7010, Frank Joseph Chmelik, Seth Ananda Woolson, Chmelik Sitkin & Davis P.S., 1500 Railroad Avenue, Bellingham, WA 98225-4542, for Defendant.
    Howard Mark Goodfriend, Smith Goodfriend PS, 1619 8th Avenue N, Seattle, WA 98109-3007, for Amicus Curiae (Inlandboatmen's Union of the Pacific).
    Sandip Soli, Real Property Law Group, PLLC, 1326 5th Avenue, Suite 654, Seattle, WA 98101-2655, for Amicus Curiae (International Council of Shopping Centers, Managers Association Seattle King County, Washington Retail Association and Building Owners).
    Alicia Lynne Lowe, Schwabe Williamson & Wyatt, 700 Washington Street, Suite 701, Vancouver, WA 98660-3338, Molly Henry, Schwabe, Williamson & Wyatt, 1420 5th Avenue, Suite 3400, Seattle, WA 98101-2339, for Amicus Curiae (Washington Public Ports Association).
    Valerie Davis McOmie, Attorney at Law, 4549 NW Aspen Street, Camas, WA 98607-8302, Daniel Edward Huntington, Richter-Wimberley PS, 422 W. Riverside Avenue, Suite 1300, Spokane, WA 99201-0305, for Amicus Curiae (Washington State Association for Justice Foundation).
    Dmitri L. Iglitzin, Barnard Iglitzin & Lavitt LLP, 18 W. Mercer Street, Suite 400, Seattle, WA 98119-3971, for Amicus Curiae (Washington State Labor Council).
   JOHNSON, J.

¶1 The Ninth Circuit Court of Appeals certified to us a question of premises liability and a broader version of the same overarching question. The heart of the main question is whether a property owner-landlord is liable for injuries that occur on its property when the lessee has exclusive possession at the time of the accident but only priority use under the lease and the landlord has contracted to maintain and repair the premises. We answer the first certified question in the affirmative and need not address the second question.

FACTS AND PROCEDURAL HISTORY

¶2 Shannon Adamson, an employee of the Alaska Marine Highway System (AMHS), fell approximately 15 feet when the passenger ramp at the Port of Bellingham's (Port) Bellingham Cruise Terminal (BCT) collapsed. The accident caused Ms. Adamson severe, life-changing injuries.

¶3 Since 1989, the State of Alaska has leased the BCT from the Port, allowing the AMHS ferries to dock at the BCT to load and unload passengers and their vehicles. The Port and Alaska renegotiated this lease in 2009 for another 15 years. A summary of the 2009 lease provisions pertinent to this case are as follows: Section 1.2 indicates the scope of the leased premises and gives exclusive use of the reservation and ticketing office, the BCT manager's office, the warehouse, and the staging and purser booth to AMHS but gives priority use of 125 parking spaces and the marine facilities, including the vehicle ramp, passenger ramp, and berth 1. 3 Appellant's Excerpt of Record (ER) at 340. Section 1.3 defines "exclusive use" as "sole possession and control of the Areas," while section 1.4 defines "priority use" as a "superior but not exclusive right of use" and indicates the Port "may allow other uses of the priority use areas so long as such use does not unreasonably interfere with [AMHS's] use." 3 ER at 340 (emphasis added). Section 4.1 indicates that the Port will be "solely responsible for keeping the leased premises in good repair and tenantable condition," and section 4.1(a) indicates the Port will "maintain the leased premises ... in good and substantial repair and condition." 3 ER at 343. Section 4.7 indicates the Port will "maintain the leased premises free of structural or mechanical hazards." 3 ER at 345. Under sections 5.1 and 5.3, Alaska has the right to make alterations, additions, and improvements to the leased premises subject to the "written consent of the [Port]." 3 ER at 348. Section 5.1 also requires Alaska to "permit the [Port] to enter upon the premises at all reasonable times to examine the condition of same." 3 ER at 348.

¶4 In order to allow passengers on foot to board the ferries, AMHS operates the BCT passenger ramp, which, when lowered, connects the terminal to the upper deck of the ferry. The passenger ramp is suspended with three-quarter-inch wide steel cables on a motorized pulley system that can lift and lower the ramp. Once the ramp is in place, steel pins are inserted into the ramp so that the cables are not holding all of the weight of the ramp. However, this system had a crucial flaw: the pulley system could continue to unspool the cables when the locking pins were in place, creating slack in the cables. The locking pins could then be removed with the slack in place, and the passenger ramp would fall until it caught on the cables-if the cables could withstand the force of the fall.

¶5 The Port could have fixed this flaw by installing an "interlock" system "which does not allow the slackening of the wire rope with pins still in place." 5 ER at 892. The interlock would have been a simple fix: rewiring the control panel so that the pins cannot be moved unless they were aligned properly and there was no slack in the cables. The process of interlocking the control panel would have taken an electrical engineer approximately 15 minutes and would have involved moving and installing one or two wires. This entire process would have cost less than $ 1,000 and prevented the 2012 incident at issue in this case. The Port decided not to implement the interlock device.

¶6 On November 2, 2012, Ms. Adamson was operating the passenger ramp and created slack in the cables. When she removed the locking pins, the ramp collapsed, snapped the cables, and she and the ramp fell approximately 15 feet until the ramp caught on the ferry. The force of the fall caused Ms. Adamson to lose consciousness such that she does not remember the accident or the events leading up to it, and she sustained multiple other life-changing injuries.

¶7 Ms. Adamson and her husband, Nicholas Adamson, sued the Port in federal court, alleging negligence and seeking damages for medical expenses, loss of wages, pain and suffering, and loss of consortium. The district court determined as a matter of law that Ms. Adamson was the Port's business invitee and instructed the jury accordingly. The case proceeded to trial and the jury awarded the Adamsons $ 16,007,102 in damages, determined that neither Ms. Adamson nor the State of Alaska was negligent, and found the Port negligent under three separate theories of liability: duty to a business invitee, duty as a landlord, and promise to perform repairs under the lease contract. During the case, the Port filed a motion for summary judgment, a motion for judgment as a matter of law, and a renewed motion for judgment as a matter of law, all of which the district court denied.

¶8 The Port appealed the district court's denial of its motions. The Ninth Circuit panel certified two versions of one overarching question of premises liability to this court, one more detailed and one more broad. See Order of U.S. Court of Appeals, Adamson v. Port of Bellingham, No. 16-35314 (9th Cir. Aug. 14, 2018) (Certification Order).

CERTIFIED QUESTION(S)

Is party A (here, the Port) liable as a premises owner for an injury that occurs on part of a leased property used exclusively by party B (here, [AMHS] ) at the time of the injury, where the lease has transferred only priority usage, defined as a superior but not exclusive right to use that part of the property, to party B, but reserves the rights of party A to allow third-party use that does not interfere with party B's priority use of that part of the property, and where party A had responsibility for maintenance and repair of that part of the property?
Perhaps stated more broadly, the question of Washington law presented is whether priority use can be considered to give exclusive control, and if so in what circumstances?

Certification Order at 10.

ANALYSIS

¶9 A certified question from a federal court is a question of law we review de novo. Brady v. Autozone Stores, Inc., 188 Wash.2d 576, 580, 397 P.3d 120 (2017). We do not consider a certified question in the abstract but instead consider it in light of the certified record from the federal court. Carlsen v. Glob. Client Sols., LLC, 171 Wash.2d 486, 493, 256 P.3d 321 (2011) ; see also RCW 2.60.030(2). While we present the facts from the federal court, we use them only so much as it is helpful to the analysis of the general premises liability rules implicated in the certified question.

¶10 This certified question presents us with the issue of whether possession at the time of the accident is sufficient to absolve a landowner who leases property of liability when the lease indicates that the lessee has only priority use where the injury occurred and that the landlord contractually obligated itself to maintain and repair the premises, and reserved the right to lease the property to others. We hold that a priority use provision, an affirmative obligation to maintain and repair, and the ability to lease the property to others together create sufficient control of the property such that a landowner who leases the property is held liable as a premises owner.

¶11 Proceeding to answering the question as framed, the general rule is that a landowner is held liable for injuries that occur on the land, except in some cases where the landowner gives exclusive control of a property over to a lessee, then landowner may no longer be liable as a possessor of land. Regan v. City of Seattle, 76 Wash.2d 501, 504, 458 P.2d 12 (1969).

¶12 However, where a landlord reserves a duty to repair the premises, the landlord is liable for its own negligence if it fails to do so, even if both the landlord and the lessee know of the dangerous condition. Our cases have recognized this principle.

¶13 In Rossiter v. Moore, 59 Wash.2d 722, 370 P.2d 250 (1962), this court reversed a summary judgment dismissal of a claim by a tenant's guest for a landlord's negligence. In analyzing the issue, we noted that

[i]f a landlord lets premises and agrees to keep them in repair, and he [or she] fails to do so, in consequence of which any one lawfully upon the premises suffers injury, he is responsible for his own negligence to the party injured. ... And there is no distinction stated in any authority between cases of a demise of dwelling houses and of buildings to be used for business purposes. The responsibility of the landlord is the same in all cases. If guilty of negligence or other delictum which leads directly to the accident and wrong complained of, he is liable.

Rossiter, 59 Wash.2d at 726-27, 370 P.2d 250 (internal quotation marks omitted) (quoting Edwards v. N.Y. & Harlem R.R. Co., 98 N.Y. 245, 248-49 (1885) ).

¶14 This basic rule has been recognized in other contexts. In Regan, we analyzed a negligence action against the city and the city's lessee for an accident occurring at the lessee's go-kart race track in a city-owned building. In reversing the summary judgment, we found that although the lessee had control of the premises, a reasonable person could find that the city, by affirmatively agreeing to help clean the track between races, could have caused the accident when it negligently failed to clean a wet spot on the track. This affirmative negligence could cause the city to be liable, even though sufficient control had passed to the lessee. Regan, 76 Wash.2d at 503-07, 458 P.2d 12. Potential liability under this principle focuses on the responsibilities and control a landowner-lessor has either retained or affirmatively taken on, such as within the lease contract.

¶15 The Port relies on Regan and its predecessor Hughes v. Chehalis School District No. 302, 61 Wash.2d 222, 377 P.2d 642 (1963), as support for the assertion that once a landlord gives exclusive control, the landlord cannot be held liable. In Hughes, an invitee of the lessee slipped on a recessed area of the floor. In upholding summary judgment, we held that there was no defect and, thus, no duty to warn as the lessee had exclusive control of the premises for the night of the lease. Hughes, 61 Wash.2d at 225, 377 P.2d 642. But the present case materially differs from both Regan and Hughes based on the provisions of the lease. Both Regan and Hughes are premised on the assumption that there was no agreement for the lessor to repair the premises, as a commercial landlord generally has no duty to maintain or repair the premises unless the landlord assumes the duty under the lease terms. Regan, 76 Wash.2d at 504, 458 P.2d 12 ("absent an agreement to repair by the lessor, the lessee takes the property subject to all apparent defects" (emphasis added) ); Hughes, 61 Wash.2d at 225, 377 P.2d 642 (" 'in the absence of an express warranty or covenant to repair, there is no implied contract that the premises are suitable or fit for occupation, or for the particular use intended, or that they are safe for use' " (emphasis added) (quoting 32 AM. JUR. Landlord and Tenant § 654 (1941) ) ); see also Teglo v. Porter, 65 Wash.2d 772, 774, 399 P.2d 519 (1965) (when a lessor agrees to repair and maintain the premises, and "acquires knowledge or notice of a condition, existing either before or arising during the tenancy, rendering the premises unsafe, ... then the landlord is liable in tort for the injuries sustained").

¶16 While these cases discuss and analyze the correct legal principles, the general rules focus on control over the leased premises. Here, the Port affirmatively contracted to maintain and repair the premises under the provisions of the lease. No obligation under the lease existed for AMHS to maintain or repair. Further, AMHS could not make any changes to the property without the written consent of the Port, whereas the Port had the authority to unilaterally make changes to the property and was allowed to enter the leased premises at all reasonable times to examine the condition of the property. Despite the dispute over lease terms, we cannot ignore that AMHS could not repair the passenger ramp without the authority and approval of the Port. The landowner-lessor here is liable when still holding authority over the property.

¶17 In Jordan v. Nationstar Mortgage, LLC, 185 Wash.2d 876, 887, 374 P.3d 1195 (2016), we examined the definition of "possession" in tort law as guidance in the context of a foreclosure. We looked to the Restatement (Third) of Torts, which defines a "possessor of land" as "a person who occupies the land and controls it." RESTATEMENT (THIRD) OF TORTS: LIABILITY FOR PHYSICAL AND EMOTIONAL HARM § 49 ( AM. LAW INST. 2012). Comments c and d to § 49 go on to clarify that "[a] person is in control of the land if that person has the authority and ability to take precautions to reduce the risk of harm to entrants on the land" and explains that control over certain areas may be shared and "[e]ven a possessor who cedes temporary control of property to another may be responsible as a possessor for conditions on the land that are not in the effective control of the other because of the temporal and practical limits of the other's possession." We look to the specific terms of the agreement to see who had authority and ability to reduce risk of harm and whether there were temporal and practical limits on the lessee's possession such that the lessor is still liable as a possessor of land.

¶18 In addition to the specific terms of the lease, this rule is consistent with other sections of the Restatement of Torts we have previously embraced. For example, in Tincani v. Inland Empire Zoological Society, 124 Wash.2d 121, 139, 875 P.2d 621 (1994), we opined that Restatement (Second) of Torts § 343 and § 343A (Am. Law Inst. 1965) are "the appropriate standard for duties to invitees for known or obvious dangers." Together, these sections require a possessor of property to exercise reasonable care to protect an invitee against a condition that creates an unreasonable risk of harm, including inspecting for said conditions, "followed by such repair, safeguards, or warning as may be reasonably necessary for [the invitee's] protection under the circumstances." RESTATEMENT (SECOND) OF TORTS § 343, cmt. b. The possessor is not liable for a condition of the land that is known or obvious to the invitee, unless the possessor "should anticipate the harm despite such knowledge or obviousness." RESTATEMENT (SECOND) OF TORTS § 343A.

¶19 Also, in Gildon v. Simon Property Group, Inc., 158 Wash.2d 483, 496, 145 P.3d 1196 (2006), we embraced Restatement (Second) of Torts § 328E (Am. Law Inst. 1965), the predecessor to Restatement (Third) of Torts: Liability for Physical and Emotional Harm § 49, to define a "possessor of land" as one "who occupies the land with the intent to control." In Teglo, we adopted Restatement of Torts: Negligence § 357 (Am. Law Inst. 1934), which indicates when a lessor covenants to repair the premises in a lease and because of disrepair there is unreasonable risk of injury, the lessor is liable for injuries to the lessee and others that the lessee has invited on the land. Teglo, 65 Wash.2d at 774-75, 399 P.2d 519. Together these Restatement sections recognize a duty when a lessor has sufficient control and affirmatively covenants to maintain and repair.

¶20 In this case, the Port had access to the property to conduct maintenance; had the authority to unilaterally make changes to the property, while the lessee needed written permission; and the Port affirmatively contracted to repair and maintain with no provision requiring the lessee to repair and maintain. Based on this, the Port had the requisite ability and authority to reduce the risk of harm to entrants such that it was still in control and in possession of the property.

The fact that AMHS was in berth and using the passenger ramp at the time of the incident does not affect the Port's liability as a landowner-lessor. We answer the first certified question in the affirmative.

¶21 The Ninth Circuit also certified a more abstract and broader version of the previous certified question: "[W]hether priority use can be considered to give exclusive control, and if so in what circumstances?" Certification Order at 10. Although answers to certified questions are inherently advisory in nature, because we answer the first question in the affirmative, we decline to answer the second question as too abstract.

CONCLUSION

¶22 We answer the first certified question in the affirmative: a landowner-lessor is liable for injuries that occur due to a defect on leased property that was in exclusive possession of the lessee where the lease provisions provide that the lessee has only priority use, not exclusive use, of the premises, and that the landowner has contracted to maintain and repair the premises.

WE CONCUR:

Madsen, J.

Owens, J.

Stephens, J.

Wiggins, J.

González, J.

Gordon McCloud, J.

Yu, J.

      We received five amicus curiae briefs, three in support of the Adamsons (Washington State Labor Council, Inlandboatmen's Union of the Pacific, and Washington State Association for Justice Foundation) and two in support of the Port (Washington Public Ports Association, and International Council of Shopping Centers, Washington Retail Association, and Building Owners and Managers Association Seattle King County).

      The Adamsons cross appealed, alleging that the trial court erred in deciding that the circumstances of this case arise under Washington law rather than federal maritime law. See Second Br. on Cross Appeal at 2 (9th Cir. No. 16-35314 (2017) ). The Ninth Circuit affirmed the district court's ruling. Adamson v. Port of Bellingham, 907 F.3d 1122, 1133 (9th Cir. 2018).

      The Port is both landlord and landowner; thus, the terms are interchangeable in this case.


author: STEPHENS, J.

text:
    STATE of Washington, Petitioner, v. Marc Daniel MCKEE, Respondent.
    No. 96035-6
    Supreme Court of Washington.
    Oral Argument Date: March 12, 2019 Filed April 18, 2019
    Erik Pedersen, Rosemary Hawkins Kaholokula, Skagit County Prosecutor's Office, 605 S. 3rd Street, Mount Vemon, WA 98273-3867, Rebecca Bartlett, Attorney at Law, 3232 Pursell Lane, Pensacola, FL 32526-9313, for Petitioner.
    David Bruce Koch, Nielsen Broman & Koch PLLC, 1908 E. Madison Street, Seattle, WA 98122-2842, for Respondent.
    Pamela Beth Loginsky, Washington Association of Prosecuting Attorney, 206 10th Avenue SE, Olympia, WA 98501-1311
   STEPHENS, J.

¶ 1 A jury convicted Marc Daniel McKee of four counts of possessing depictions of minors engaged in sexually explicit conduct (Possessing Depictions). The Court of Appeals reversed those convictions on the ground that police had used an overbroad search warrant to obtain the underlying cell phone photos and videos. Instead of just remanding for suppression of the cell phone evidence, the Court of Appeals ordered all the Possessing Depictions counts dismissed, meaning retrial was barred. Although the Court of Appeals provided no reasoning to justify that remedy, it appears to have thought dismissal was warranted because once the cell phone evidence was suppressed, there would be insufficient evidence to sustain the convictions at a second trial.

¶ 2 The State petitioned for review of the Court of Appeals' decision to dismiss rather than to suppress. We granted the State's petition for review and now reverse. State v. McKee , 191 Wash.2d 1012, 426 P.3d 749 (2018). The proper remedy following suppression of the cell phone evidence was to vacate McKee's convictions for Possessing Depictions and to remand to the trial court for further proceedings.

FACTS

¶ 3 McKee met A.Z. when he was 41 years old and she was 16 years old. At that time, A.Z. had been using marijuana since she was 12 years old and methamphetamine and heroin for about one year. Over the course of several months in 2012, McKee had repeated sexual encounters with A.Z. and also supplied her and another minor with heroin and methamphetamine. In October 2012, A.Z.'s brother took McKee's cell phone and discovered it had sexually explicit pictures and videos of A.Z. A.Z.'s brother showed these images to A.Z.'s mother, who then turned the phone over to police. Based on their conversations with A.Z.'s mother, officers sought and obtained a warrant to search the cell phone for "[i]mages, video, documents, text messages, contacts, audio recordings, call logs, calendars, notes, tasks, data/internet usage, any and all identifying data, and any other electronic data ... showing evidence of the above listed crimes [sexual exploitation of a minor ( RCW 9.68A.040 ) and dealing in depictions of a minor engaged in sexually explicit conduct ( RCW 9.68A.050 ) ]." CP at 229, 225.

¶ 4 The State charged McKee with five separate offenses, nine counts in all: possessing depictions in the first degree (counts 1-3), possessing depictions in the second degree (count 4), commercial sex abuse of a minor (count 5), delivery of methamphetamine and/or heroin to a person under age 18 (counts 6-8), and violation of a no contact order (count 9).

¶ 5 Prior to trial, McKee moved to suppress the evidence recovered from the cell phone on the grounds that the warrant was overbroad and not based on probable cause. The trial court denied the motion. At trial, the prosecution introduced several images from the cell phone through A.Z.'s testimony. She identified herself in the images. A.Z.'s mother and brother also provided detailed testimony describing the pictures and videos they viewed on the phone and identifying A.Z. as depicted therein.

¶ 6 A jury convicted McKee of every charge except one count of delivery of a controlled substance to a minor. The trial court sentenced him to 113 months' total confinement. McKee appealed to Division One of the Court of Appeals, raising two issues: (1) that the trial court erred by refusing to suppress the cell phone evidence and (2) that trial counsel was ineffective at his sentencing hearing for failing to argue that all the Possessing Depictions counts constituted the same criminal conduct.

¶ 7 McKee's briefing on the search warrant issue mentioned a remedy three times in inconsistent terms. In his opening brief, McKee asserted that "all fruits from the search of McKee's phone-which formed the basis for the charges in counts 1 through 4-should have been suppressed ... [and his] convictions on these counts should be reversed and dismissed ." Br. of Appellant at 16 (Wash. Ct. App. No. 73947-6-1 (2016)) (emphasis added). But then in the conclusion of that brief, McKee requested only that the appellate court vacate the convictions: "McKee's convictions on counts 1 through 4 should be vacated based on the faulty warrant." Br. of Appellant at 24. Consistent with the latter language, the State's response in the Court of Appeals characterized McKee's briefing as requesting vacation and suppression: "McKee contends that ... the cell phone content seized pursuant to the warrant should have been suppressed, and that the convictions, therefore, should be vacated." Resp't's Br. at 3 (Wash. Ct. App. No 73947-6-1 (2017)). McKee's reply brief repeated only that request: "For the reasons discussed in the opening brief and here, this Court should vacate McKee's convictions on counts 1 through 4 based on the faulty warrant." Reply Br. of Appellant at 9 (Wash. Ct. App. No. 73947-6-1 (2017)) (emphasis added).

¶ 8 Even though McKee had not briefed the issue, at oral argument the Court of Appeals asked defense counsel whether, if the evidence stemming from the cell phone warrant were suppressed, sufficient evidence would remain to sustain the challenged convictions. The following one-minute exchange took place:

COURT: Was the only evidence that was introduced at trial for the four counts that you're seeking [to have reversed] based on what the police were able to obtain from the search warrant?
DEFENSE COUNSEL: That was the primary evidence, yes.
COURT: So, there was other evidence?
DEFENSE COUNSEL: Well, other evidence. Um, A.Z. had no memory of these pictures or of the, the actual clips. But when she saw them, she was able to identify herself in them. That's some evidence. But she had no recollection of them until she was shown them. So I'd say no, that evidence came from what was, um found in the search warrant. Her mother looked at the phone briefly and saw a few things, so perhaps she would have been able to give a vague description that she saw a clip, some photos that showed her daughter and somebody else, but, you know, this, these actual photos and clips were the primary evidence, the bulk of the evidence.
COURT: So, if we excluded that evidence, is there sufficient evidence?
DEFENSE COUNSEL: There's not, there would not be sufficient evidence for the State to prove these convictions.

Wash. Court of Appeals oral argument, State v. McKee, No. 73947-6-1 (Sept. 14, 2017), at 7 min., 55 sec. through 8 min., 57 sec. (on file with court). During the State's argument, the court did not inquire about the remedy of dismissal or the sufficiency of any evidence, and the State did not address either issue.

¶ 9 Ultimately, the Court of Appeals agreed with McKee's Fourth Amendment argument and reversed all four of his convictions for Possessing Depictions. Statev. McKee, 3 Wash. App. 2d 11, 30, 413 P.3d 1049 (2018) ; U.S. CONST . amend.IV. Instead of simply applying the exclusionary rule-that is, vacating the convictions and remanding to the trial court for further proceedings-the Court of Appeals ordered dismissal of all the Possessing Depictions counts. McKee, 3 Wash. App. 2d at 30, 413 P.3d 1049. It provided no reasoning explaining that outcome, but the remedy of dismissal typically applies only when a conviction is reversed for insufficient evidence or the government's misconduct has prejudiced the defendant and materially affected the possibility of a fair trial. While it is not entirely clear, it appears from the oral argument transcript that the Court of Appeals believed dismissal was required because once the cell phone evidence was suppressed, the remaining evidence would be insufficient to sustain the convictions on the possessing depictions counts.

¶ 10 The State filed a motion for reconsideration of the dismissal remedy and, for the first time, detailed eyewitness testimony describing the explicit images of A.Z. on McKee's phone. It argued that dismissal was inappropriate because that testimony-i.e., the evidence that was not tainted by the invalid search warrant-would be sufficient to sustain the Possessing Depictions convictions on retrial. Resp't's Mot. to Recons., State v. McKee, No. 73497-6-1, at 9 (Wash. Ct. App. Apr. 13, 2018) ("Dismissal of the four possession of depiction counts was not the appropriate remedy given other evidence about the content of the videos and photograph that was presented at trial and could be presented at a retrial."). In his answer, McKee argued both that the State had waived the dismissal issue by failing to raise it earlier and that the State's "sufficiency" argument failed on its merits. Like the State, McKee argued that dismissal was warranted if the evidence that remained postsuppression would be insufficient to sustain the Possessing Depictions convictions. Unlike the State, he contended that the eyewitness testimony was insufficient.

¶ 11 The Court of Appeals denied the motion for reconsideration, and we granted the State's petition for review.

ANALYSIS

¶ 12 The question before us is whether the Court of Appeals erred when it dismissed the Possessing Depictions counts after suppressing the cell phone evidence, thus barring any possibility of a retrial. We hold that this was error. The typical remedy for a Fourth Amendment violation is suppression, not dismissal.

¶ 13 This is true even when suppression would seem to exclude the bulk of the prosecution's evidence. Under long-standing precedent, the double jeopardy clause bars retrial only when all the evidence admitted at trial-including erroneously admitted evidence-is insufficient to sustain the conviction at issue. State v. Jasper, 174 Wash.2d 96, 120, 271 P.3d 876 (2012) (citing Lockhart v. Nelson, 488 U.S. 33, 40, 109 S.Ct. 285, 102 L.Ed.2d 265 (1988) ). The logic underlying this rule is that a reversal for insufficiency is tantamount to an acquittal, but a reversal for any other trial court error is not. Lockhart, 488 U.S. at 40-42, 109 S.Ct. 285. A reversal for insufficiency indicates the government had its chance and failed to prove its case, while a reversal for another trial error indicates only that the defendant was convicted through a flawed process. Id. at 40-42, 109 S.Ct. 285. In the latter instance, the appellate court must "recreate [ ] the situation that would have been obtained if the trial court had excluded the [improper] evidence," leaving the State free to present new evidence at retrial, if it chooses. Id. at 42, 109 S.Ct. 285. This rule applies whenever the erroneous admission of evidence requires reversal, including when error stems from an illegal search or seizure. E.g., State v. Jefferson, 297 Kan. 1151, 1166, 310 P.3d 331 (2013) (applying Lockhart analysis after reversing appellant's conviction and ordering suppression of evidence obtained through illegal seizure). Thus, in a case like this one, an appellate court does not evaluate the sufficiency of the untainted evidence remaining after suppression. Provided the total evidence (tainted and untainted) was sufficient to sustain the verdict, the remedy is limited to reversal and suppression.

¶ 14 McKee urges us to affirm the Court of Appeals regardless of whether dismissal was the appropriate remedy, arguing that the State waived any remedy argument by failing to raise it before the motion for reconsideration. We decline that invitation for two reasons. First, the facts here do not indicate any concession or waiver by the State. McKee's briefing did not raise any issue of sufficiency (of any quantum of evidence) and, when the court raised that issue sua sponte at oral argument, it directed its questions only at McKee. Second, the Court of Appeals committed obvious legal error when it ordered dismissal, distinguishing the situation from one involving a factual concession. Even if the State had conceded that dismissal was required, which it did not, the appellate court should have rejected such a concession. See In re Pers. Restraint of Pullman , 167 Wash.2d 205, 212 n.4, 218 P.3d 913 (2009) (rejecting State's concession both because it involved a question of law and because it was "equivocal at best"). Any arguments about the insufficiency of evidence prior to retrial must be directed to the trial court in the first instance. See State v. Knapstad, 107 Wash.2d 346, 356-57, 729 P.2d 48 (1986) (describing procedure by which defendant may obtain pretrial hearing on the sufficiency of the State's factual allegations to establish a prima facie case of guilt).

CONCLUSION

¶ 15 When an appellate court vacates a conviction that is obtained with illegally seized evidence, the remedy is remand to the trial court with an order to suppress. This is true regardless of whether the untainted evidence might independently sustain a conviction. We reverse the Court of Appeals and remand to the trial court for further proceedings consistent with the order to suppress evidence seized as a result of the faulty warrant.

WE CONCUR:

Johnson, J.

Fairhurst, C.J.

Madsen, J.

Owens, J.

Wiggins, J.

González, J.

Gordon McCloud, J.

Yu, J.

      State v. Wright, 165 Wash.2d 783, 788, 203 P.3d 1027 (2009) (where appellate court vacates a conviction for trial error rather than insufficient evidence, retrial is not barred).

      State v. Marks, 114 Wash.2d 724, 730-31, 790 P.2d 138 (1990).

      We are not concerned in this case with any issue of harmless error, as the State made no argument that the admission of the cell phone evidence was harmless beyond a reasonable doubt. Cf. State v. Gonzales Flores, 164 Wash.2d 1, 18-19, 186 P.3d 1038 (2008) (error may be harmless beyond a reasonable doubt in light of overwhelming untainted evidence).

      McKee requests appellate consideration of his same criminal conduct claim raised initially in the Court of Appeals. We decline to address this claim because it is both moot (the affected counts have been reversed) and premature (we do not know whether the State will seek another trial). Additionally, this issue is not properly before us because McKee did not raise it in his answer to the State's petition. RAP 13.7(b) (on review of Court of Appeals decision, Supreme Court will review only the questions raised in the petition and answer).


author: Pennell, J. Fearing, J. (concurring)

text:
    Joseph M. THOMPSON, an individual, Respondent, v. PROGRESSIVE DIRECT INSURANCE COMPANY, Appellant.
    No. 35864-0-III
    Court of Appeals of Washington, Division 3.
    FILED APRIL 9, 2019
    PUBLISHED OPINION
   Pennell, J.

¶1 Under Washington's casualty insurance code, chapter 48.22 RCW, a guest passenger injured in an automobile accident is considered a third-party "insured," and is eligible to make a claim for underinsured motorist (UIM) benefits through the policy covering the vehicle in which he or she was a passenger. But the mere fact that a guest passenger qualifies as an "insured" does not mean the passenger is automatically entitled to UIM benefits. The long-standing rule in Washington is that a third-party guest passenger can be excluded from UIM coverage if that passenger has already been compensated through the named insured's liability coverage. This rule has been codified in a somewhat convoluted manner by a vehicle-based (as opposed to a person-based) exclusion, providing that a vehicle insured for liability purposes can, by definition, be excluded from also being a source of UIM benefits to third parties.

¶2 Here, Joseph Thompson was injured as a third-party guest passenger in a vehicle insured through Progressive Direct Insurance Company. Progressive tendered the limits of its third-party liability coverage to Mr. Thompson. However, Progressive denied Mr. Thompson's claim for UIM benefits based on the terms of its policy, which excluded UIM benefits to guest passengers for injuries arising from the negligent operation of its named insured's vehicle. Because Progressive's denial of coverage was consistent with the terms of its policy, public policy, and state law, we uphold Progressive's benefit decision. The superior court's judgment to the contrary is reversed.

FACTS

¶3 Joseph Thompson was injured in a single-vehicle accident while traveling as a guest passenger in a vehicle driven by Stacie Haney. Ms. Haney was the "[n]amed insured" under an automobile insurance policy (the Policy) issued by Progressive, and the vehicle driven by Ms. Haney met the definition of a "[c]overed auto" under the general terms of the Policy. Clerk's Papers (CP) at 24, 31. Mr. Thompson was not a named insured under the Policy, and he was not a relative of Ms. Haney, but he met the statutory and policy definition of an "insured" and "insured person." RCW 48.22.005(5)(b)(i) ; CP at 37, 40. Progressive agreed, for purposes of these proceedings, that its named insured was solely responsible for the accident giving rise to Mr. Thompson's claims.

¶4 The Policy issued to Ms. Haney included both liability coverage, for bodily injury and property damage to others, and UIM coverage. Progressive tendered to Mr. Thompson the $ 100,000 liability limits of the Policy for his bodily injuries sustained in the accident. Because Mr. Thompson alleged that this liability payment did not fully compensate him for the damages resulting from these injuries, he subsequently initiated a claim under the UIM portion of the Policy.

¶5 In relevant part, the UIM portion of the Progressive Policy defines an "[i]nsured person" as including "any person occupying , but not operating, a covered auto ." CP at 40 (bolded terms are defined terms in the Policy). The Policy defined an "[u]nderinsured motor vehicle" as "a land motor vehicle or trailer of any type:"

a. to which no bodily injury liability bond or policy applies at the time of the accident ;
b. to which a bodily injury liability bond or policy applies at the time of the accident , but the bonding or insuring company:
(i) denies coverage; or
(ii) is or becomes insolvent;
c. that is a hit-and-run vehicle whose owner and operator cannot be identified and which strikes:
(i) you or a relative ;
(ii) a vehicle that you or a relative are occupying ; or
(iii) a covered auto ;
d. that is a phantom vehicle ; or
e. to which a liability bond or policy applies at the time of the accident , but the sum of all applicable limits of liability under all applicable bonds and policies is less than the damages that the insured person is legally entitled to recover.

Id . at 41. The UIM portion of the Policy also excludes certain vehicles from the definition of an "underinsured motor vehicle." Id . In relevant part, this exclusion states:

An "underinsured motor vehicle " does not include any vehicle or equipment:
a. owned by you or a relative or furnished or available for the regular use of you or a relative . However, this exclusion to the definition of underinsured motor vehicle does not apply to a covered auto with respect to bodily injury to you or a relative ;
....
f. that is a covered auto . However, this limitation on the definition of underinsured motor vehicle does not apply to a covered auto with respect to bodily injury to you or a relative .

Id . The UIM coverage agreement within the Policy states that Progressive:

will pay for damages that an insured person is legally entitled to recover from the owner or operator of an underinsured motor vehicle because of bodily injury :
1. sustained by that insured person ;
2. caused by an accident ; and
3. arising out of the ownership, maintenance, or use of an underinsured motor vehicle .

Id . at 40. The Policy has general provisions that define a "relative" as someone who resides with the named insured, is related to the named insured "by blood, marriage, or adoption, and includes a ward, stepchild, or foster child," and the named insured's "unmarried dependent children temporarily away from [the named insured's] home" so long as they expect to continue to reside in the named insured's home. Id . at 32.

¶6 In correspondence denying Mr. Thompson's UIM claim, Progressive stated that while Mr. Thompson was an "insured person" as defined by the Policy and RCW 48.22.005(5)(b)(i), he was excluded from UIM coverage under its Policy because his injuries and damages were not sustained by the operation of an "underinsured motor vehicle." Id . at 65; RCW 48.22.030(1). Progressive explained that Ms. Haney's vehicle did not meet the policy definition of an "underinsured motor vehicle" as it was a "covered auto" under the Policy. CP at 66. Progressive also stated its Policy was "in compliance with the statute [ RCW 48.22.005 and RCW 48.22.030 ] on all points including on who an 'insured person' is, and more importantly what an 'underinsured motor vehicle' is." Id .

¶7 Mr. Thompson initiated a declaratory judgment action in superior court, seeking a determination that he was entitled to UIM coverage and benefits under the Policy. The superior court granted summary judgment in favor of Mr. Thompson, holding that UIM coverage was required because Mr. Thompson met the "definition of 'insured' under RCW 48.22.005," CP at 209, and Progressive could not use its Policy to erode the statutory definition. Mr. Thompson was also awarded attorney fees and costs.

¶8 Progressive appeals the order granting Mr. Thompson's motion for summary judgment and the final judgment establishing attorney fees and costs.

ANALYSIS

¶9 The parties agree that under the terms of Progressive's Policy, Mr. Thompson was excluded from UIM coverage. While Mr. Thompson fell under the definition of an "insured person," CP at 40, he was not injured through the operation of a qualifying vehicle. Specifically, the vehicle giving rise to Mr. Thompson's injuries was covered by the Policy and Mr. Thompson was not the named insured or a relative of the named insured. As previously noted, UIM benefits are typically triggered in the context of liability involving a third-party vehicle, not a vehicle covered by the same policy. The only exception is when the named insured or a family member of the named insured is the person seeking UIM benefits.

¶10 Recognizing that the terms of Progressive's Policy do not afford him UIM coverage, Mr. Thompson argues that excluding the named insured's vehicle from coverage as an "underinsured motor vehicle" violates state law and public policy. As a result, he claims the exclusion must be struck. Bohme v. PEMCO Mut. Ins. Co. , 127 Wash.2d 409, 412, 899 P.2d 787 (1995) (A UIM exclusion must be struck if it conflicts with state statute or public policy.). Our review of this legal claim is de novo. Roller v. Stonewall Ins. Co. , 115 Wash.2d 679, 682, 801 P.2d 207 (1990), overruled on other grounds by Butzberger v. Foster , 151 Wash.2d 396, 89 P.3d 689 (2004).

¶11 Mr. Thompson's public policy argument is foreclosed by binding precedent. In Blackburn v. Safeco Insurance Co. , 115 Wash.2d 82, 794 P.2d 1259 (1990) and Millers Casualty Insurance Co. of Texas v. Briggs , 100 Wash.2d 1, 665 P.2d 891 (1983) our Supreme Court approved of UIM exclusions for third-party guest passengers. As recognized by the court, liability insurance exists for the protection of an individual, such as Mr. Thompson, who is a third party to an insurance contract and who has sustained injuries based on a named insured's negligence. Millers , 100 Wash.2d at 8, 665 P.2d 891. But UIM coverage is fundamentally different. UIM coverage is meant to protect the named insured "and others from damages caused by another vehicle which is underinsured." Id . (emphasis added). A third party has "the option of contracting with an insurance company for" their own UIM coverage. Blackburn , 115 Wash.2d at 89, 794 P.2d 1259. But public policy does not require an insurance company to provide UIM benefits to an individual who has opted not to obtain UIM protection. See Fleming v. Grange Ins. Ass'n , 73 Wash. App. 570, 576, 870 P.2d 323 (1994) ("[W]hile the public policy underlying Washington's UIM statute is to maximize the protection afforded by insurance coverage, it does not require insurance companies to provide the coverage for free.") (citing Blackburn , 115 Wash.2d at 88, 794 P.2d 1259 ). See also Vasquez v. Am. Fire & Cas. Co. , 174 Wash. App. 132, 138, 298 P.3d 94 (2013) (UIM coverage is restricted insurance "chiefly for the benefit of the named insured," and limiting who else is defined as "an 'insured' does not run afoul" of the UIM statute's public policy.).

¶12 Both Blackburn and Millers also held that excluding third-party guest passengers from UIM coverage did not violate Washington's UIM statute. Recognizing this fact, Mr. Thompson argues state law has been modified since the decisions in Blackburn and Millers . Specifically, in 1993 the legislature added a "definitions" section to the casualty insurance code, making clear that a guest passenger, not just a named insured, meets the definition of an "insured." RCW 48.22.005(5)(b)(i).

¶13 Mr. Thompson's reliance on RCW 48.22.005(5)(b)(i) is inapposite. Both Blackburn and Millers already recognized that a guest passenger met the definition of an "insured" for purposes of UIM coverage. Blackburn , 115 Wash.2d at 88-89, 794 P.2d 1259. That was not an issue. What was at issue was whether a guest passenger, as an insured person but not the named insured or a relative thereto, could be denied UIM coverage based on policy language that excluded recovery from injuries caused by the operation of a covered vehicle. As previously stated, both Blackburn and Millers upheld the exclusions under state law. All RCW 48.22.005(5) did was to codify the essential definition of "insured" utilized by the Supreme Court in Blackburn . 115 Wash.2d at 88-89, 794 P.2d 1259. Consistent with Blackburn and Millers , RCW 48.22.005(5) differentiates between a named insured, RCW 48.22.005(5)(a), and a third-party (other) insured person, RCW 48.22.005(5)(b). Given the consistency of RCW 48.22.005(5) with the Supreme Court's decisions in Blackburn and Millers , the enactment of this statute in 1993 cannot be fairly read as a legislative effort to overturn Blackburn and Millers .

¶14 Rather than looking to RCW 48.22.005(5) 's definitions, the statute applicable to Progressive's UIM exclusion is RCW 48.22.030, which as not been modified in pertinent part since the Supreme Court's decisions in Blackburn and Millers . Since 1981, this statute has defined an "underinsured motor vehicle" as:

a motor vehicle with respect to the ownership, maintenance, or use of which either no bodily injury or property damage liability bond or insurance policy applies at the time of an accident, or with respect to which the sum of the limits of liability under all bodily injury or property damage liability bonds and insurance policies applicable to a covered person after an accident is less than the applicable damages which the covered person is legally entitled to recover.

RCW 48.22.030(1).

¶15 The statute also includes a mandate regarding UIM coverage (last amended in 1985), which states:

No new policy or renewal of an existing policy insuring against loss resulting from liability imposed by law for bodily injury, death, or property damage, suffered by any person arising out of the ownership, maintenance, or use of a motor vehicle shall be issued with respect to any motor vehicle registered or principally garaged in this state unless coverage is provided therein or supplemental thereto for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of underinsured motor vehicles , hit-and-run motor vehicles, and phantom vehicles because of bodily injury, death, or property damage, resulting therefrom, except while operating or occupying a motorcycle or motor-driven cycle, and except while operating or occupying a motor vehicle owned or available for the regular use by the named insured or any family member, and which is not insured under the liability coverage of the policy. The coverage required to be offered under this chapter is not applicable to general liability policies, commonly known as umbrella policies, or other policies which apply only as excess to the insurance directly applicable to the vehicle insured.

RCW 48.22.030(2) (emphasis added).

¶16 As recognized in Blackburn and Millers , the UIM statute is written in a way that references two general classes of vehicles. There is the "motor vehicle" for which liability coverage has been issued (i.e., the "covered auto") and there are third-party "underinsured motor vehicles," which are not covered by a named insured's policy. The UIM statute contemplates coverage only for bodily injury, death, or property damage caused by the operation of third-party vehicles. Although public policy prohibits excluding a named insured or the named insured's family members from UIM coverage involving a covered vehicle, see Tissell By and Through Cayce v. Liberty Mutual Insurance Co. , 115 Wash.2d 107, 112-14, 795 P.2d 126 (1990), nothing in Washington's casualty insurance code requires extending UIM coverage to a third party with a liability claim against the same covered vehicle. Instead, the third party's recourse is to rely on liability insurance, the personal responsibility of the negligent driver, and the third party's own insurance coverage. The UIM statute does not provide an additional avenue for recovery.

CONCLUSION

¶17 We reverse the superior court's summary judgment order and award of attorney fees and costs. This matter is remanded for entry of judgment in favor of Progressive.

I CONCUR:

Lawrence-Berrey, C.J.

Fearing, J. (concurring)

¶18 I hold a differing perspective than the majority, but, based on Washington Supreme Court precedent and a review of chapter 48.22 RCW, I concur in the majority's decision.

¶19 In Millers Casualty Insurance Co. v. Briggs , 100 Wash.2d 1, 665 P.2d 891 (1983), the Evergreen State Supreme Court unanimously held that an insurance carrier may exclude underinsured motorist coverage from a passenger traveling in a vehicle insured for liability coverage by the carrier as long as the traveler is not the insured or a family member residing with the insured. Seven years later the state high court affirmed the holding of Millers in Blackburn v. Safeco Insurance Co. , 115 Wash.2d 82, 794 P.2d 1259 (1990). The Blackburn court was not unanimous, however. Two dissenters distinguished Millers on the difference that Bret Blackburn was also denied payment under the liability coverage of the Safeco insurance policy. Nevertheless, the dissenters also wished to overrule Millers because the exclusion barring underinsured motorist coverage for the passenger limited insurance coverage on a basis other than the risk of the insurer and thereby contravened Washington's policy of full compensation for accident victims.

¶20 I concur in the reasoning of the dissenters in Blackburn v. Safeco Insurance Co. But unlike dissenting members of the Supreme Court, I am bound by Supreme Court precedent.

¶21 Three years after Blackburn v. Safeco Insurance Co. , the Washington State Legislature adopted House Bill 1233, titled "Motor Vehicle Insurance-Personal Injury Protection Benefits." LAWS OF 1993, ch. 242. Joseph Thompson contends the 1993 bill legislatively overruled Millers Casualty Insurance Co. v. Briggs and BLACKBURN V. SAFECO INSURANCE CO. The relevant portion of the bill declared:

CHAPTER 242 [Engrossed Substitute House Bill 1233]MOTOR VEHICLE INSURANCE-PERSONAL INJURYPROTECTION BENEFITS
....
AN ACT Relating to mandatory offering of personal injury protection insurance; adding new sections to chapter 48.22 RCW; creating a new section; and providing an effective date.
....
NEW SECTION. Sec. 1. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter .
....
(5) "Insured" means:
....
(b) A person who sustains bodily injury caused by accident while: (i) Occupying or using the insured automobile with the permission of the named insured....
NEW SECTION. Sec. 2. (1) No new automobile liability insurance policy or renewal of such an existing policy may be issued unless personal injury protection coverage benefits ... for medical and hospital expenses, funeral expenses, income continuation, and loss of services sustained by an insured ... are offered as an optional coverage.

(Emphasis added.) Sections 3 to 5 of House Bill 1233 address the extent to which a casualty insurer must afford personal injury protection coverage.

¶22 This appeal concerns section 1 of House Bill 1233 's definition of "insured" and whether that definition extends to more than the provisions of the bill and to an underinsured motor vehicle insurance statute found in RCW 48.22.030. Note that section 1 of House Bill 1233 applies its definitions to "this chapter." The prior portions of the bill, however, reference two distinct "chapters": first, chapter 242, the number from Washington LAWS OF 1993; and second, chapter 48.22 RCW. Confusion arises as to whether the definitions announced in section 1 of House Bill 1233 apply to chapter 242 of the LAWS OF 1993, to chapter 48.22 RCW, or to both. The confusion escalates when one learns that section 1 of House Bill 1233 became RCW 48.22.005 and one observes that chapter 48.22 RCW refers to creditor coverage, vendor coverage, and underinsured motorist coverage in addition to the sections for personal injury protection coverage added by House Bill 1233.

¶23 As a result of House Bill 1233, the Washington State code reviser created three new code sections and placed sections 3 through 5 of the bill into RCW 48.22.090, RCW 48.22.095, and RCW 48.22.100. The reviser created a new code section and inserted verbatim section 1 of the House Bill 1233 into RCW 48.22.005. RCW 48.22.005 now reads in relevant part:

Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.
....
(5) "Insured" means:
....
(b) a person who sustains bodily injury caused by accident while (i) Occupying or using the insured automobile with the permission of the named insured....

(Emphasis added.)

¶24 We must juxtapose RCW 48.22.005 with RCW 48.22.030(2), the underinsured motor vehicle insurance statute. The latter statute declares:

No new policy or renewal of an existing policy insuring against loss resulting from liability ... shall be issued ... unless coverage is provided therein ... for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of underinsured motor vehicles[.] ... except while operating or occupying a motor vehicle owned or available for the regular use by the named insured or any family member, and which is not insured under the liability coverage of the policy.

(Emphasis added.) The lengthy sentence and confusing language of RCW 48.22.030 may nonsensically suggest that the exclusion from underinsured motor vehicle coverage cannot apply if the car, in which the insured rode, is not listed in the liability policy. But no one raises this point. Surprisingly the Washington appellate courts have never addressed the ambiguity caused by the two different references to a "chapter" in House Bill 1233 or addressed the aggravation of the uncertainty resulting from the insertion of section 1 of the bill in RCW 48.22.005.

¶25 Joseph Thompson rode in a car driven by Stacie Haney and insured for liability coverage by Progressive Direct Insurance Company. Haney's negligence caused the accident. Thompson was not a family member of Haney. Thompson recovered $ 100,000 under the liability insurance endorsement of the Progressive insurance policy, but he claims the $ 100,000 does not fully compensate him for the injuries sustained in the accident. He seeks to recover underinsured motorist benefits under the Progressive policy. The policy excludes from the definition of "underinsured motor vehicle" a vehicle covered under the liability endorsement of the insurance policy except as to Haney or her family members.

¶26 Joseph Thompson astutely argues that the definitions inserted into RCW 48.22.005 should control the remainder of chapter RCW 48.22. Thompson particularly asks that RCW 48.22.005's definition of "insured" control the meaning of "insured" in RCW 48.22.030. RCW 48.22.030 demands a motor vehicle casualty policy cover an "insured" under the underinsured motor vehicle endorsement. RCW 48.22.005, for purposes of "this chapter," defines an "insured" as a person who sustains bodily injury caused by accident while occupying the insured automobile.

¶27 I disagree with Joseph Thompson's analysis. The Washington State Legislature holds the prerogative in declaring public policy with regard to requirements for casualty insurance. Therefore, our fundamental purpose in construing an insurance statute is to ascertain and fulfill the intent of the legislature. In re Schneider , 173 Wash.2d 353,363, 268 P.3d 215 (2011). This court should construe the statute to effect its purpose. State v. McDougal , 120 Wash.2d 334, 350, 841 P.2d 1232 (1992). If the statute is ambiguous, we may rely on legislative history. State v. Jones , 172 Wash.2d 236, 242, 257 P.3d 616 (2011).

¶28 The preamble to House Bill 1233 reads that the bill seeks to impose mandatory requirements for offering personal injury protection coverage, to "add new sections" to chapter 48.22 RCW, and to "create a new section." One might quizzically ponder the difference between "adding" a new section and "creating" a new section. Regardless, the bill does not expressly identify which section of House Bill 1233 becomes the "created" section as opposed to the added sections, and the bill does not declare where in the Revised Code of Washington the created section should fall. I might guess that the legislature intended section 1 of House Bill 1233 to be the "newly created" section, and that, if the legislature considered the question, it might wish the "created section" to lie inside RCW 48.22. But House Bill 1233 does not expressly declare that the definitions listed in the new section, including the definition for "insured," should control all of the provisions of chapter 48.22 RCW. The legislature did not direct where to insert the created section within RCW 48.22. The code reviser could have placed this new or created section after RCW 48.22.030 and immediately before the three sections addressing personal injury protection coverage.

¶29 All definitions listed in section 1 of House Bill 1233 and, in turn, contained in RCW 48.22.005 correspond to words or phrases found elsewhere in House Bill 1233 and, in turn, the personal injury protection coverage statutes codified in RCW 48.22.090 to RCW 48.22.100. Or all such definitions help to define other terms inside section 1 of House Bill 1233 and RCW 48.22.005. RCW 48.22.030, which creates mandatory underinsured motor vehicle coverage, contains its own two internal definitions.

¶30 House Bill 1233 shows a primary, if not exclusive, intent in imposing mandatory requirements on insurance companies to offer personal injury protection coverage for automobile insurance policies. The title to the bill only references personal injury protection benefits. House Bill 1233 shows no intent to modify the law with regard to mandatory underinsured motor vehicle insurance coverage. RCW 48.22.005's definitions should be read in this light.

¶31 I find no Washington case law that addresses whether legislative intent as expressed in an underlying bill holds priority over the manner in which a code reviser inserts the language of the bill into a code. Nevertheless, the populace elects legislators, not code compilers, to enact law. Washington courts have declared that the code reviser's labeling of a statute should not change the meaning of the legislature's enactment. Tesoro Refining & Marketing Co. v. Department of Revenue , 164 Wash.2d 310, 318 n.3, 190 P.3d 28 (2008) ; State v. Cooley , 53 Wash. App. 163, 166, 765 P.2d 1327 (1989).

¶32 Foreign jurisdictions have announced rules more apt to this appeal. In construing a statute, courts should not consider the title of a chapter where the reviser places an enactment or the location within the code where the reviser places the enactment. American Premier Insurance Co. v. McBride , 159 S.W.3d 342, 349 (Ky. Ct. App. 2004). The construction of a statute cannot be affected by the insertion of the statute by the compiler of the code. Chesapeake & Ohio Railway Co. v. Pew , 109 Va. 288, 64 S.E. 35, 37 (1909).

¶33 Joseph Thompson's insertion of the definition of "insured" from RCW 48.22.005 into RCW 48.22.030 would render other language in RCW 48.22.030 inoperative. The statute allows the insurance company to exclude underinsured motor vehicle coverage for an "insured" while operating or occupying a motor vehicle owned or available for the regular use by the named insured or any family member. Inserting RCW 48.22.005's definition of "insured" into RCW 48.22.030 would preclude this exception. Statutes must be interpreted and construed so that all the language used is given effect, with no portion rendered meaningless or superfluous. Spokane County. v. Department of Fish & Wildlife , 192 Wash.2d 453, 457-58, 430 P.3d 655 (2018).

¶34 I CONCUR.

      A "named insured" is the "individual named in the declarations of the policy and includes his [or her] spouse if a resident of the same household." RCW 48.22.005(9). Specific to the facts of this case, the host driver is the "named insured." For readability and consistency purposes, we refer to the host driver as the "named insured" and the guest passenger as an "insured person." Clerk's Papers at 37, 40.

      Blackburn recognized two categories of "insureds" for purposes of UIM coverage: the "named insured" and the "other insured." 115 Wn.2d at 88, 794 P.2d 1259. The UIM portion of the policy at issue in Blackburn defined "insured" as, "1. You or any family member[.] 2. Anyone else occupying a covered auto or a temporary substitute for a covered auto. The covered auto must be out of service because of its breakdown, repair, servicing, loss or destruction." Id . at 84, 794 P.2d 1259. In codifying the definition of "insured," our legislature similarly recognized two categories of insureds. RCW 48.22.005(5) defines "insured" as: "(a) The named insured or a person who is a resident of the named insured's household and is either related to the named insured by blood, marriage, or adoption, or is the named insured's ward, foster child, or stepchild; or (b) A person who sustains bodily injury caused by accident while: (i) Occupying or using the insured automobile with the permission of the named insured; or (ii) a pedestrian accidentally struck by the insured automobile."