author: Lawrence-Berrey, C.J.

text:
    STATE of Washington, Respondent, v. Gabriel RUELAS, Jr., Appellant.
    No. 35029-1-III
    Court of Appeals of Washington, Division 3.
    FILED MARCH 12, 2019
    Douglas Dwight Phelps, Phelps & Associates, P.S., 2903 N Stout Rd., Spokane, WA, 99206-4373, for Appellant.
    Randy J. Flyckt, Adams County Prosecutor's Office, Robert Alexander Lehman, Adams County Prosecuting Attorney, 210 W Broadway Ave. Ste. 100, Ritzville, WA, 99169-1860, for Respondent.
    PUBLISHED OPINION
   Lawrence-Berrey, C.J.

¶1 Gabriel Ruelas appeals his conviction for possession of marijuana over 40 grams. At trial, he asserted it was necessary for him to provide the marijuana for his mother, who was in pain and dying of cancer. Mr. Ruelas requests a new trial and argues the trial court erred in three ways: (1) in admitting his postarrest, pre- Miranda statements, (2) in requiring a medical expert witness for his necessity defense, and (3) by precluding his medical expert witness from testifying because his proposed testimony was first disclosed after the State rested. Finding no error, we affirm.

FACTS

¶2 On November 10, 2015, Sergeant Oscar Garcia stopped Mr. Ruelas for speeding. Mr. Ruelas rolled down his window and gave Sergeant Garcia his license and registration. Sergeant Garcia smelled marijuana coming from the pickup truck. He asked Mr. Ruelas about the smell and asked him to roll down his rear window. Mr. Ruelas complied, and Sergeant Garcia saw a large garbage bag containing marijuana. Sergeant Garcia then arrested Mr. Ruelas for felony possession of marijuana.

¶3 Before advising Mr. Ruelas of his Miranda rights, Sergeant Garcia processed paperwork to impound the truck. He asked Mr. Ruelas who owned the truck. Mr. Ruelas answered, " 'My sister.' " Clerk's Papers (CP) at 40. Mr. Ruelas then explained that he was returning to his home in Edwall, Washington, after having cleaned the marijuana. He explained in detail how the marijuana was packaged to make clear to Sergeant Garcia that he was not selling or trafficking it. Mr. Ruelas said he had a medical marijuana card but did not provide one. Sergeant Garcia asked Mr. Ruelas where he had cleaned the marijuana. Mr. Ruelas answered that he grew the marijuana at his home, had taken it to his sister's to clean it, and was in the process of taking it back home. Sergeant Garcia then read Mr. Ruelas his Miranda rights.

¶4 On February 26, 2016, the State charged Mr. Ruelas with one count of possession of marijuana over 40 grams. Trial was set for May 24, 2016. On May 9, 2016, the parties agreed to continue the trial for Mr. Ruelas to review an offer and prepare motions.

¶5 On June 13, 2016, the trial court held a CrR 3.5 hearing. The court found that Mr. Ruelas's initial pre- Miranda statement was the result of a routine processing question and that his additional statements were made either spontaneously and not in response to a question likely to produce an incriminating response. The court denied Mr. Ruelas's suppression motion.

¶6 After the court's ruling, Mr. Ruelas requested a continuance to find an expert witness. Mr. Ruelas informed the court:

Judge, we're anticipating that there's a medical marijuana defense on this particular case. And so the Court's aware, there's still the necessity defense and we have an expert witness that I have to retain yet, but who will testify that the amounts that my client had were consistent with the use for the-for himself and the two other people he was providing for.

Report of Proceedings (RP) at 29. Trial was reset for August 23, 2016.

¶7 On July 20, 2016, Mr. Ruelas requested a second continuance to retain an expert witness, and explained:

We are requesting one more continuance of trial. ... I think you understand that this is a medical marijuana case. We do plan on putting on the defense of necessity for going over the allowed limit. We have been in contact or trying to get in contact with Greg Carter. He is going to be our expert witness hopefully to testify at trial; however, he is medical director at St. Luke's and he's very difficult to get in contact with.

RP at 36-37. Trial was reset for October 25, 2016.

¶8 On October 7, 2016, Mr. Ruelas requested a third continuance. He explained, "There are some medical issues that I think will be coming to light at trial for which we will require an expert." RP at 44. He continued, "If this is indeed going to be ramping up for trial then our search for an expert will actually be fruitful at this point. There was no point in hiring an expert when we were anticipating a possible resolution." RP at 45. The trial court denied Mr. Ruelas's third continuance.

¶9 On October 18, 2016, Mr. Ruelas filed his final witness list. The list did not include a medical expert.

¶10 Trial began on October 25, 2016. The court addressed motions in limine and questioned Mr. Ruelas about his defense of medical necessity. Mr. Ruelas explained that he was asserting the common law defense of medical necessity, not the statutory defense under the Washington State Medical Use of Cannabis Act, chapter 69.51A RCW. The State objected to the defense on the basis that Mr. Ruelas could not lay a proper foundation without having a medical expert testify. The court agreed, and reasoned:

[ Pittman ] says, "The defendant will be required to show that there is no equally effective legal drug." You would have to have, I believe, medical knowledge as to what legal drugs are out there on the market that may or may not be as effective as to treat the symptoms that marijuana has in the case. I feel that that element and perhaps one of the others would require the expert testimony.

RP at 140.

¶11 The State put on its evidence and rested. Mr. Ruelas then told the court that Dr. Carter was available to testify telephonically, possibly at noon. Mr. Ruelas said that Dr. Carter had reviewed Mr. Ruelas's mother's medical records, and would testify, "given [her] medical condition [that she was dying of cancer ] ... there was no other alternative ... for treating [her] symptoms ...." RP at 217-18.

¶12 The State objected:

[Mr. Ruelas has] had eight months with the case. We have no discovery with regards to this potential witness being even an option or that he's going to testify. ...
....
... The fact that he's not available to come in and testify, that's another issue. The State would object to any telephonic testimony. ...
....
So the fact he has in his possession 1800 grams of marijuana, ... it is quite shocking that he wants to throw this name out and surprise the second day of trial.

RP at 219-20.

¶13 Mr. Ruelas responded:

I'm not inviting this, but I think the appropriate remedy is not the exclusion of the witnesses [sic], that might be viewed as being an extraordinary remedy and should not be taken. I think the Government, if they need time to prepare for this witness, can ask for a continuance to adequately prepare for the witness. ...

RP at 221.

¶14 The court weighed whether to continue the trial or to preclude Dr. Carter from testifying:

[W]e just heard about this doctor this morning, day two of trial, and I do think it's significantly late. The case was filed ... eight months ago. ...
....
... And I appreciate this witness is key to the defense and if the witness could testify as to what I've been told he'll testify. That would make that defense available. The necessity defense.
And I do think [the late disclosure is] a big problem and I don't think the Court has any alternative but to exclude this witness. I appreciate that would ... prejudice the defendant's ability to present a defense, but it's not any type of an unfair prejudice to the defendant because he and his counsel have had a long time with which to get the witnesses [sic] .... And it would ... impose an extreme burden on the Court to have a delay and it would result in substantial delay.
....
... The problem is there's two sides in the case that should have a right to a fair trial, and that would include the prosecution. The prosecution ... may want to bring in their own witness. They may want to think about after they talk to this witness, what he says, and conduct some discovery to see whether there may be some other witness that might disagree with this Dr. Carter.
And to allow the witness to testify and to proceed with trial is unfair to the prosecution in the case here. ... And I don't know what the Court of Appeals will do ....
... [But reversing under these circumstances] would almost render it impossible for a Trial Court to effectively manage a court calendar and do their job. It would, I think, encourage lawyers to not do their job.
So I'm excluding the witness. ...

RP at 224, 229-32 (emphasis added).

¶15 The trial resumed, closing arguments were given, and the jury found Mr. Ruelas guilty. He appealed, and we granted oral argument.

¶16 During oral argument, Mr. Ruelas conceded the first issue on appeal. Mr. Ruelas conceded that his pre- Miranda statements to Sergeant Garcia were not prejudicial. The statements were consistent with his theory of the case-that the marijuana was for his mother who was dying of cancer. Mr. Ruelas even emphasized these statements during his cross-examination of Sergeant Garcia.

ANALYSIS

A. THE NECESSITY DEFENSE REQUIRED MEDICAL TESTIMONY

¶17 Mr. Ruelas argues the trial court denied him his constitutional right to present a defense when it erroneously ruled that a medical expert was required for him to assert the defense of necessity. Mr. Ruelas's constitutional argument fails because the trial court correctly determined that his necessity defense required medical testimony.

¶18 "Generally, necessity is available as a defense when the physical forces of nature or the pressure of circumstances cause the accused to take unlawful action to avoid a harm which social policy deems greater than the harm resulting from a violation of the law."

State v. Diana , 24 Wash. App. 908, 913, 604 P.2d 1312 (1979). The common law defense of necessity is available even though Washington has legalized marijuana. State v. Kurtz , 178 Wash.2d 466, 476-77, 309 P.3d 472 (2013).

¶19 A defendant asserting the necessity defense must prove four elements by a preponderance of the evidence. 11 WASHINGTON PRACTICE: WASHINGTON PATTERN JURY INSTRUCTIONS: CRIMINAL (WPIC) 18.02, at 292 (4th ed. 2016). The four elements are: (1) the defendant reasonably believed the commission of the crime was necessary to avoid or minimize the harm, (2) the harm sought to be avoided was greater than the harm resulting from a violation of the law, (3) the threatened harm was not brought about by the defendant, and (4) no reasonable legal alternative was available that is as effective as marijuana. Id. ; see also Pittman , 88 Wash. App. at 194, 943 P.2d 713. Only the fourth element is at issue here.

¶20 The history of the medical necessity defense for marijuana in Washington had been in flux until about five years ago. But when addressed, courts have stated that expert medical testimony is required to prove the fourth element. The medical necessity defense for marijuana was first recognized in Diana . Diana , 24 Wash. App. at 916, 604 P.2d 1312. There, the defendant was charged with possession of marijuana but argued the defense of medical necessity. Id. at 909, 912, 604 P.2d 1312. The court remanded to the trial court to determine if the defense applied, largely using the four element test described above. Id. at 916, 604 P.2d 1312. The court went on to state, "To support the defendant's assertions that he reasonably believed his actions were necessary to protect his health, corroborating medical testimony is required." Id.

¶21 In Williams , the defendant was charged with unlawful manufacturing of marijuana, possession with intent to deliver, and possession of marijuana. State v. Williams , 93 Wash. App. 340, 343, 968 P.2d 26 (1998). The defendant asserted the defense of medical necessity. Id. Although Williams ultimately held that there is not a defense of medical necessity with respect to schedule I drugs, it first analyzed the medical necessity defense. Id. at 346-47, 968 P.2d 26. In its analysis, the Williams court recognized the test established by Diana and later adopted by Cole . Id. at 346, 968 P.2d 26. The Williams court also adopted Diana 's reasoning that corroborating medical evidence is required to satisfy the test. Id. The court held:

[T]here would also have to be corroborating medical evidence that no other legal drugs were as effective in minimizing the effects of the disease. Although this element was not stated in the prior case law, it would make sense that this element be expressed by an expert who knew the qualities of other drugs, not just the preference of the defendant.

Id. at 347, 968 P.2d 26. Although part of Williams ' holding has been overruled, this part has yet to be changed. And its reasoning is sound. We conclude the trial court did not err in determining that Mr. Ruelas's necessity defense required medical expert testimony. B. NO ABUSE OF DISCRETION FOR PRECLUDING WITNESS TESTIMONY

¶22 Mr. Ruelas argues the trial court erred in precluding Dr. Carter from testifying. We disagree.

¶23 A trial court may sanction a criminal defendant under CrR 4.7(h)(7)(i) for failing to comply with discovery deadlines by excluding the testimony of a defense witness. State v. Hutchinson , 135 Wash.2d 863, 881, 959 P.2d 1061 (1998). But exclusion of evidence is an extraordinary remedy, one that must be applied narrowly. Id. at 882, 959 P.2d 1061. We review a trial court's choice of CrR 4.7 sanctions for an abuse of discretion. Id.

¶24 In order to preclude witness testimony because of a discovery violation, the court must weigh four factors:

(1) the effectiveness of less severe sanctions; (2) the impact of witness preclusion on the evidence at trial and the outcome of the case; (3) the extent to which the prosecution will be surprised or prejudiced by the witness's testimony; and (4) whether the violation was willful or in bad faith.

Id. at 883, 959 P.2d 1061.

¶25 Effectiveness of less severe sanctions: The trial court found that a less severe sanction, such as a substantial trial continuance, would not be effective. The court determined that a substantial trial continuance would burden the court's ability to manage its own trial schedule and encourage late witness disclosures. We note that the jury had been empaneled and it had heard most of the evidence. A substantial trial continuance would have required the jury to return weeks or months later after the State interviewed Dr. Carter and then procured its own medical expert. By that time, the jury likely would have forgotten much of the evidence the State presented. The trial court reasonably concluded that a lesser sanction would not be effective.

¶26 Impact of witness preclusion on evidence and case outcome: The trial court found that precluding Dr. Carter from testifying would prevent Mr. Ruelas from presenting his necessity defense. The court further concluded that this prejudice was not unfair because Mr. Ruelas had eight months to obtain a medical expert. We agree. We also question whether precluding Dr. Carter from testifying impacted the outcome of the case. Although Dr. Carter would have testified that marijuana was medically necessary for Mr. Ruelas's mother, Mr. Ruelas would have been hard-pressed to justify why she needed 1,800 grams of it.

¶27 Prosecution surprise or prejudice: The trial court found that the State was both surprised and prejudiced by Dr. Carter's proposed testimony. Mr. Ruelas never formally disclosed Dr. Carter as a witness until the second day of trial. The State had no reason to obtain its own medical expert for the trial. Had the trial court allowed Dr. Carter to testify, the State likely would have needed a substantial trial continuance, which risked the jury forgetting much of the testimony it heard in the State's case.

¶28 Culpability of violation: The trial court did not make a finding whether Mr. Ruelas's late disclosure was willful/bad faith. Our review of the record convinces us that Mr. Ruelas did not act willfully or in bad faith. Mr. Ruelas explained that it was difficult to obtain his mother's medical records, which Dr. Carter needed to review. Mr. Ruelas also expressed difficulty in communicating with Dr. Carter, who he described as very busy.

¶29 Nevertheless, the weight of the first three factors are such that we conclude the trial court did not abuse its discretion when it precluded Dr. Carter from testifying. Mr. Ruelas does not cite any authority that holds that a trial court abuses its discretion when it precludes an expert disclosed during trial from testifying. We presume there is no authority. See Oregon Mut. Ins. Co. v. Barton , 109 Wash. App. 405, 418, 36 P.3d 1065 (2001).

¶30 Affirmed.

WE CONCUR:

Siddoway, J.

Fearing, J.

      Miranda v. Arizona , 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966).

      The Medical Use of Marijuana Act was changed to the Washington State Medical Use of Cannabis Act in 2011. RCW 69.51A.900.

      See State v. Pittman , 88 Wash. App. 188, 196, 943 P.2d 713 (1997).

      WPIC 18.02 states the last element as: "no reasonable legal alternative existed." That has been modified for marijuana cases per Pittman , 88 Wash. App. at 194, 943 P.2d 713.

      See, e.g. , Diana , 24 Wash. App. at 916, 604 P.2d 1312 (establishing the necessity defense); State v. Cole , 74 Wash. App. 571, 578, 874 P.2d 878 (1994) (adopting Diana 's reasoning); Pittman , 88 Wash. App. at 195-96, 943 P.2d 713 (adopting Diana 's reasoning); State v. Williams , 93 Wash. App. 340, 345-46, 968 P.2d 26 (1998) (holding that, with respect to schedule I drugs, a common law medical necessity defense does not exist), abrogated by Kurtz , 178 Wash.2d 466, 309 P.3d 472 ; State v. Butler , 126 Wash. App. 741, 750, 109 P.3d 493 (2005) (holding that the statutory affirmative defense in the Medical Use of Cannabis Act superseded the common law medical necessity defense), abrogated by Kurtz , 178 Wash.2d 466, 309 P.3d 472 ; Kurtz , 178 Wash.2d at 477, 309 P.3d 472 (holding the common law defense of medical necessity is still available even after the Medical Use of Cannabis Act).

      Mr. Ruelas also argues he did not need to obtain an expert witness to assert the statutory defense under the Medical Use of Cannabis Act. We do not address this argument because Mr. Ruelas clearly represented to the trial court that he was asserting his necessity defense based on the common law application, not the Medical Use of Cannabis Act. "Arguments or theories not presented to the trial court will generally not be considered on appeal." Washburn v. Beatt Equip. Co. , 120 Wash.2d 246, 290, 840 P.2d 860 (1992).


source: Caselaw Access Project

author: Siddoway, J. Lawrence-Berrey, C.J. (concurring) Korsmo, J. (dissenting)

license: Public Domain

text:
    Brooke HOWELL, Appellant, v. DEPARTMENT OF SOCIAL AND HEALTH SERVICES, Respondent.
    No. 35339-7-III
    Court of Appeals of Washington, Division 3.
    FILED MARCH 12, 2019
    PUBLISHED OPINION
   Siddoway, J.

¶1 Brooke Howell appeals the dismissal with prejudice of her discrimination claim asserted against the Department of Social and Health Services (DSHS). She contends that its rules and policies, including its practice of retaining records of "founded" filings of child neglect by individuals have a disparate impact on the ability of Native Americans like herself to obtain work. We hold that under the Washington Law Against Discrimination (WLAD), chapter 49.60 RCW, an employee or applicant for employment can state a cause of action against a third party who interferes with the individual's right to obtain and hold employment without discrimination.

¶2 A difficulty with the parties' remaining arguments below and on appeal is that the record is not well developed with evidence of the policies of DSHS that are challenged, nor has DSHS presented evidence of high-level policy considerations that might afford it discretionary immunity. The fact that some of the rule- and policy-making authority of DSHS on which Ms. Howell appears to rely was delegated to the Department of Children, Youth, and Families in agency reorganizations effective after her complaint was filed exacerbates the lack of clarity. Ms. Howell may need to amend her complaint.

¶3 On the present record, DSHS's arguments for dismissal fail. We reverse the trial court's order that dismissed Ms. Howell's complaint with prejudice and remand for further proceedings.

PROCEDURAL BACKGROUND

¶4 After Brooke Howell sued DSHS for alleged discrimination in violation of the WLAD, it filed a CR 12(c) motion for judgment on the pleadings, which the trial court granted. Our review requires us to assume the truth of facts alleged in Ms. Howell's complaint as well as hypothetical facts. We summarize the allegations of her complaint and her argument.

DSHS's complained-of conduct

¶5 Ms. Howell bases DSHS's asserted liability on the manner in which it has exercised its discretion to impose background check requirements, and retain and make available findings from adjudicative hearings that can disqualify persons like her from employment.

¶6 She makes the following allegations:

¶7 Under RCW 43.43.832 et seq., many Washington employers are required to obtain a background check when hiring or retaining an individual in a position potentially involving unsupervised access to children or vulnerable adults.

¶8 Pursuant to authority delegated in chapter 26.44 RCW, it is DSHS that investigates and makes administrative findings against persons alleged to have committed child abuse or neglect.

¶9 DSHS is required by statute to "keep records concerning founded reports of child abuse or neglect as the department determines by rule." RCW 26.44.031(3). If a finding becomes final either after an administrative hearing or by default (because an accused person fails to appeal a notice of the finding), the accused's name is placed in a database of persons with administrative findings of abuse, neglect or other employment-disqualifying conduct.

¶10 By rule, DSHS keeps "founded" findings of abuse or neglect as required by DSHS records retention policies. WAC 388-15-077. Under DSHS's records retention policies, a final finding of abuse or neglect is nearly permanent and may not be expunged or removed from the Child Protective Services' database for at least 35 years from the date of the finding.

¶11 A founded finding of child abuse or neglect is an automatic disqualification for certain types of health care employment, including types of health care employment that one might obtain with a nursing assistant degree.

¶12 The administrative hearing process granted under RCW 26.44.125 to a person who asks for review of a finding of child neglect by DSHS does not consider how the person's actions are related to her suitability for affected employment. The appeal does not consider how long the disqualification is appropriate, mitigating factors justifying removing the finding, or whether the severity of the accusation or alleged conduct warrants a permanent sanction on the many foreclosed employment opportunities.

¶13 For persons with criminal convictions, some, but not others, may demonstrate their character, competence, and suitability to work with minors or vulnerable adults. Persons with founded findings of abuse and neglect are never allowed to demonstrate their character, competence and suitability, however.

¶14 Ms. Howell alleges that DSHS has options to expunge records without jeopardizing its policy goal of protecting vulnerable people.

Application to Ms. Howell

¶15 Ms. Howell identifies her race as Native American and is an enrolled member of the Yakama Indian Nation. In 2015, she entered a Nursing Assistant Certified (NAC) training program, desiring to become certified and work in the health care field. In the middle of her school year and before beginning clinical rotations, she learned that DSHS had made a "founded" finding of child neglect against her several years earlier. Clearing a background check with DSHS is a mandatory part of completing the NAC program.

Ms. Howell was not allowed to complete the NAC program.

¶16 The finding against Ms. Howell followed her arrest in November 2012 for driving under the influence of alcohol (DUI). Ms. Howell's three children were in the car with her. She was charged with DUI and reckless endangerment and addressed the charges by entering a diversion program.

¶17 Unknown to Ms. Howell at the time, DSHS made an administrative finding of child neglect against her for the incident leading to her arrest for DUI. It sent notice by certified mail to Ms. Howell but the notice went unclaimed and was returned to DSHS.

¶18 Upon learning of the finding and that it would prevent her from completing NAC training and becoming licensed, Ms. Howell appealed the founded finding in June 2015. An administrative law judge reversed the finding, but DSHS's Board of Appeals reinstated the finding.

¶19 In January 2017, Ms. Howell asked DSHS to expunge her founded finding because of the effect of the finding on her ability to work. She asserts that she has complied with all of the conditions of her diversion, no longer drinks alcohol, and has no record of a criminal conviction as a result of the 2012 incident. DSHS did not respond to her request.

Disparate impact claim

¶20 Ms. Howell's complaint alleges on information and belief that Native Americans are approximately four times more likely than white persons to have founded findings of child abuse or neglect discovered through background checks of DSHS records. She alleges that DSHS's policy of retaining the founded findings for so long, without review or an opportunity for expungement, disparately impacts the ability of Native Americans to obtain work, education, training, and licensure in a field of their choosing.

¶21 Ms. Howell alleges that DSHS has no legitimate reason for indefinitely maintaining and reporting the findings. She alleges that even if DSHS has a legitimate reason for indefinitely maintaining its findings, a less discriminatory alternative to its current practice exists: DSHS "could ... permit accused persons to expunge their findings after demonstrating their rehabilitation; reduce the period of retention of the record on a background check when there is no evidence of future harm to children; or periodically review all records to determine ongoing need to retain any given record in its background check database." Clerk's Papers (CP) at 9.

The motion to dismiss

¶22 After answering and amending its answer to the complaint, DSHS moved under CR 12(c) for an order dismissing the complaint. It argued, first, that its conduct is not subject to the WLAD for two reasons: because it is not the employer, and the WLAD imposes liability for employment discrimination only on a plaintiff-employee's employer; and because the prohibition on Ms. Howell's being employed as an NAC is the direct result of an initiative of the people that bars the employment as long-term care workers of individuals with "founded" findings. Alternatively, it argued that its actions are entitled to discretionary immunity.

¶23 Ms. Howell did not allege in her complaint that DSHS was an employer. She responded to DSHS's motion to dismiss by arguing that her complaint's allegations that DSHS's practices "exert[ ] direct control over the list of prospective candidates available to ... employers" and "foreclosed [her] chosen career path," "raise a factual issue significant enough that it should not be dismissed at this early stage." CP at 44.

¶24 In responding to the motion, Ms. Howell conceded that the November 2011 Initiative Measure No. 1163, codified at RCW 74.39A.056, raises a statutory bar to employment as a "long-term care worker" for individuals found to have committed child neglect. But she argued that she is not challenging that law; she is challenging DSHS's dissemination of its findings without a method to avoid racial disparity. Alternatively, she argues that other types of employment would remain available to NACs but for DSHS's practice.

¶25 The trial court granted DSHS's motion and dismissed the complaint. Ms. Howell appeals.

ANALYSIS

I. MS. HOWELL'S COMPLAINT PLEADS A PRIMA FACIE CASE OF DISPARATE IMPACT

¶26 Ms. Howell first argues that her complaint pleads a prima facie case of disparate impact; hence, the trial court erred in dismissing it. "[T]he WLAD creates a cause of action for disparate impact." Kumar v. Gate Gourmet Inc., 180 Wash.2d 481, 503, 325 P.3d 193 (2014). The theory of liability prevents employers from adopting facially neutral policies that create or perpetuate discriminatory effects. Id. "To establish a prima facie case of disparate impact, the plaintiff must show that (1) a facially neutral employment practice (2) falls more harshly on a protected class." Id. If a plaintiff establishes disparate impact under the WLAD, the burden of production shifts to the defendant to produce evidence of a business necessity for the challenged practice. Hegwine v. Longview Fibre Co., 162 Wash.2d 340, 356, 172 P.3d 688 (2007). The elements and evaluation of a disparate impact claim under the WLAD are the same as those under federal law. Id. at 353-54 & n.7, 172 P.3d 688.

¶27 Requiring criminal background checks has been held to be an employment practice that can have a disparate impact on a protected class. By way of illustration, in enforcement guidance provided in 2012 for entities covered by Title VII, the Equal Employment Opportunity Commission (EEOC)-"build[ing] on longstanding court decisions and existing guidance documents that [it] issued over twenty years ago"-described the type of statistical information that will demonstrate that a protected class has more contact with the criminal justice system and a higher incarceration rate. EEOC Enforcement Guidance No. 915.002 (Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964). It explained:

With respect to criminal records, there is Title VII disparate impact liability where the evidence shows that a covered employer's criminal record screening policy or practice disproportionately screens out a Title VII-protected group and the employer does not demonstrate that the policy or practice is job related for the positions in question and consistent with business necessity.

Id. § V.

¶28 The EEOC guidance publication cites leading cases that identify how the employer can demonstrate a business necessity for its criminal background check practice if disparate impact is shown. In the 1975 Eighth Circuit Court of Appeals decision in Green v. Missouri Pacific Railroad Co., 523 F.2d 1290, 1293, the court identified three aspects of the information sought (later termed the " Green factors") relevant in assessing whether a criminal background exclusion is job related for a position and consistent with business necessity:

• The nature and gravity of the offense or conduct;
• The time that has passed since the offense or conduct and/or completion of the sentence; and
• The nature of the job held or sought.

EEOC Enforcement Guidance, supra, § V(B)(1) (footnotes omitted). In El v. Southeastern Pennsylvania Transportation Authority , 479 F.3d 232, 244-45 (3d Cir. 2007), the Third Circuit Court of Appeals "develop[ed] the statutory analysis in greater depth," according to the EEOC guidance publication, when it held that Title VII requires employers to justify criminal record exclusions by demonstrating that the exclusions " 'accurately distinguish between applicants [who] pose an unacceptable level of risk and those [who] do not.' " EEOC Enforcement Guidance, supra, § V(B)(1) (quoting El , 479 F.3d at 245 ).

¶29 DSHS does not dispute that an employer's criminal background checks might support a disparate impact claim. It contends that Ms. Howell did not plead the required "employment practice" because she did not plead facts that would establish that DSHS was her employer.

A. Standard for dismissal and standard of review

¶30 A party can move the trial court for judgment on the pleadings under CR 12(c). A motion under CR 12(c) raises the same issue as a motion to dismiss under CR 12(b)(6) : whether a complaint states a claim for which a court can grant relief. Didlake v. State, 186 Wash. App. 417, 422, 345 P.3d 43 (2015). One practical difference between motions under CR 12(b)(6) and 12(c) is timing, since a CR 12(b)(6) motion is made after the complaint but before the answer, while a CR 12(c) motion is made after the pleadings are closed. P.E. Sys., LLC v. CPI Corp., 176 Wash.2d 198, 203, 289 P.3d 638 (2012). A CR 12(c) motion is proper when a defendant relies for the motion on an affirmative defense, since an affirmative defense is external to the complaint. E.g., Brownmark Films, LLC v. Comedy Partners, 682 F.3d 687, 690 & n.1 (7th Cir. 2012). "A court may dismiss a complaint under CR 12 only if 'it appears beyond doubt that the plaintiff cannot prove any set of facts which would justify recovery.' " Didlake , 186 Wash. App. at 422, 345 P.3d 43 (quoting Tenore v. AT&T Wireless Servs, 136 Wash.2d 322, 330, 962 P.2d 104 (1998) ).

¶31 When ruling on a motion under CR 12(c), we "must assume the truth of facts alleged in the complaint, as well as hypothetical facts, viewing both in the light most favorable to the nonmoving party." Didlake, 186 Wash. App. at 422, 345 P.3d 43. We do not accept legal conclusions as correct, even when couched as facts in the complaint. Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986). We review a trial court's decision under CR 12(c) de novo. Didlake , 186 Wash. App. at 422, 345 P.3d 43.

B. For DSHS to be liable under the WLAD, it need not be Ms. Howell's actual or prospective employer

1. The general civil right declared by RCW 49.60.030(1) contains no language limiting "[t]he right to obtain and hold employment without discrimination" to a right vis-à-vis an actual or prospective employer

¶32 The right to seek the remedies sought in Ms. Howell's complaint is provided by RCW 49.60.030(2), which provides that "[a]ny person deeming himself or herself injured by any act in violation of this chapter shall have a civil action in a court of competent jurisdiction to enjoin further violations, or to recover the actual damages sustained by the person, or both," together with certain costs and remedies authorized by other state and federal laws. In Marquis v. City of Spokane, 130 Wash.2d 97, 112-13, 922 P.2d 43 (1996), our Supreme Court agreed with the Washington Human Rights Commission's interpretation of the WLAD as having two provisions that create rights to be free from invidious discrimination in the workplace, one of which makes no reference to the plaintiff being an employee or the defendant being an employer. This was critical because the plaintiff in Marquis was an independent contractor, not an employee.

¶33 The commission had adopted a regulation, former WAC 162-16-170(2) (1995) (presently codified at WAC 162-16-230(2) ), which interprets RCW 49.60.030(2) as authorizing private civil actions to remedy not only the "unfair practices of employers" that are identified by RCW 49.60.180, but also violations of RCW 49.60.030(1) 's declaration of a general civil right to be free from discrimination in obtaining and holding employment. Marquis, 130 Wash.2d at 112-13, 922 P.2d 43.

¶34 The "unfair practices" provision of the WLAD, RCW 49.60.180, uses the words "employer" and "employee," and the commission's regulation states that "[a] person who works or seeks work as an independent contractor, rather than as an employee, is not entitled to [its] protection." Former WAC 162-16-230(2) (2001). But the commission's rule provides that an independent contractor is protected by the general right declared by RCW 49.60.030, a protection that does not use the words "employer" or "employee," and that the commission states is "enforceable by private lawsuit in court under RCW 49.60.030(2) but not by actions of the [commission]." Former WAC 162.16.230(2).

¶35 In Marquis , the Supreme Court agreed that the plain language of RCW 49.60.030(1) supports the commission's conclusion that it creates a general civil right that can be privately enforced, describing it as "broadly stated, ... to be liberally construed, and ... meant to prevent and eliminate discrimination in the State of Washington." 130 Wash.2d at 112, 922 P.2d 43. Based on the WLAD's plain language and Marquis , Ms. Howell did not have to plead facts establishing that DSHS was her employer in order to assert a claim under RCW 49.60.030(1).

2. We need not decide whether RCW 49.60.180 supports an "interference" or "indirect employment" theory of liability against a covered employer who is not a plaintiff's actual or prospective employer

¶36 Relying on federal case law construing Title VII, Ms. Howell argues that we should construe RCW 49.60.180, the "unfair practices" provision of the WLAD that is limited by its terms to practices by employers, as applying even where a covered employer interferes with the employment opportunities of an employee who is not its employee or prospective employee.

¶37 Title VII includes a definition of "employer," but it does not illuminate the word's ordinary meaning. Instead, it identifies which employers (applying a common law meaning ) are subject to the law's requirements-in other words, which employers are covered by the federal act. The statutory definition imposes employee-numerosity and commerce-connection requirements and exempts certain employers from liability.

¶38 Federal courts have required that to state a cause of action, a plaintiff must be someone's employee or applicant. E.g., Salamon v. Our Lady of Victory Hosp. , 514 F.3d 217, 226 (2d Cir. 2008) ("Once a plaintiff is found to be an independent contractor and not an employee ... the Title VII claim must fail."). They have required that the defendant be a covered employer. E.g., Lutcher v. Musicians Union Local 47, 633 F.2d 880, 883 n.3 (9th Cir. 1980) (liability might attach "where a defendant subject to Title VII interferes with an individual's employment opportunities with another employer" (emphasis added) ). For the most part, they have not required that the defendant be the plaintiff's direct employer. Many federal courts have recognized claims where a covered employer interferes with the employment opportunities of someone else's employee. The EEOC's compliance manual also continues to support an interference theory. It characterizes itself as following Supreme Court decisions requiring a common law agency analysis in determining employment status, stating that a Title VII plaintiff must establish both that she or he is someone's common law employee, and that the defendant is a covered common law employer of other employees. See EEOC COMPLIANCE MANUAL § 2-III(B)(3)(a)(i) , and EEOC Enforcement Guidance No. 915 (eff. May 20, 1987) (control by third parties over the employment relationship between an individual and her or his direct employer).

¶39 In light of Ms. Howell's ability to pursue her claim under RCW 49.60.030, we see no need to decide whether RCW 49.60.180 would provide an alternative basis for her claim.

II. DSHS HAS NOT DEMONSTRATED THAT PROVISIONS OF INITIATIVE 1163, CODIFIED AT RCW 74.39A.056, ARE FATAL TO MS. HOWELL'S CLAIM

¶40 In November 2011, Washington voters approved Initiative 1163, the "Restoring Quality Home Care Initiative." LAWS OF 2012, ch. 1, § 308. The intent of the initiative was to reinstate a requirement that long-term care workers obtain criminal background checks, which the state legislature had proposed to eliminate. LAWS OF 2012, ch. 1, § 1. DSHS argues, and Ms. Howell concedes, that Washington law established by the initiative is just as binding as the WLAD, is more recent, and must be harmonized with the WLAD.

¶41 DSHS argues that the approval and enactment of the initiative is the true impediment to Ms. Howell's employment prospects. It points to the following provision of the initiative, codified at RCW 74.39A.056(2) :

No provider, or its staff, or long-term care worker, or prospective provider or long-term care worker, with a stipulated finding of fact, conclusion of law, an agreed order, or finding of fact, conclusion of law, or final order issued by a disciplining authority or a court of law or entered into a state registry with a final substantiated finding of abuse, neglect, exploitation, or abandonment of a minor or a vulnerable adult as defined in chapter 74.34 RCW shall be employed in the care of and have unsupervised access to vulnerable adults.

¶42 Ms. Howell makes two arguments in response: first, that DSHS has been given rulemaking discretion as to how the employment prohibition is applied and second, that it is other DSHS action, not the initiative, which completely precludes Ms. Howell from becoming certified and employed as an NAC.

A. DSHS's rulemaking discretion

¶43 Subsections of RCW 74.39A.056 delegate authority to DSHS to adopt rules to implement the provision and to establish the state registry against which the background checks will be conducted. RCW 74.39A.056(4) provides that "[t]he department shall adopt rules to implement this section."

RCW 74.39A.056(3) authorizes DSHS to establish the state registry by rule, adding that the rule "must include disclosure, disposition of findings, notification, findings of fact, appeal rights, and fair hearing requirements."

¶44 Administrative rules and regulations adopted by an agency pursuant to statutory authority are valid if they are reasonably consistent with the statute being implemented, and the intent and purpose of the legislation. Multicare Med. Ctr. v. Dep't of Soc. & Health Servs. , 114 Wash.2d 572, 588, 790 P.2d 124 (1990). Washington's Administrative Procedure Act provides that an agency may use a statute's statement of intent or purpose in interpreting its other provisions. RCW 34.05.322. Section 1 of Initiative 1163 stated that it was the intent of the people through the initiative "to protect vulnerable elderly and people with disabilities by reinstating the requirement that all long-term care workers obtain criminal background checks and adequate training." LAWS OF 2012, ch. 1, § 1.

¶45 DSHS has so far not demonstrated that its rulemaking authority is too limited for it to develop a registry and fashion background check requirements that would have the features Ms. Howell alleges are possible: "permit[ting] accused persons to expunge their findings after demonstrating their rehabilitation; reduce the period of retention of the record on a background check when there is no evidence of future harm to children; or periodically review all records to determine ongoing need to retain any given record in its background check database." CP at 9.

B. RCW 74.39A.056 does not present a complete bar to Ms. Howell's employment as an NAC

¶46 Alternatively, Ms. Howell argues that even if construed as argued by DSHS, RCW 74.39A.056(2) does not foreclose her from all employment as an NAC. A "nursing assistant" is "an individual, regardless of title, who, under the direction and supervision of a registered nurse or licensed practical nurse, assists in the delivery of nursing and nursing-related activities to patients in a health care facility." RCW 18.88A.020(8). A "nursing assistant-certified" is a nursing assistant certified under chapter 18.88A RCW. To receive a nursing assistant certificate, an applicant must successfully complete an approved training program or satisfy alternative training criteria adopted by the Washington Nursing Care Quality Assurance Commission and successfully complete a competency evaluation. RCW 18.88A.085.

¶47 As construed by DSHS, RCW 74.39A.056 would preclude Ms. Howell from being employed as a "long-term care worker" or serving as a provider or provider staff caring for, and with unsupervised access to, vulnerable adults. As defined by RCW 74.39A.009(20), "long-term care worker" includes some, but not all, NAC employment:

(a) "Long-term care workers" include all persons who provide paid, hands-on personal care services for the elderly or persons with disabilities, including but not limited to individual providers of home care services, direct care workers employed by home care agencies or a consumer directed employer, providers of home care services to persons with developmental disabilities under Title 71A RCW, all direct care workers in state-licensed assisted living facilities, enhanced services facilities, and adult family homes, respite care providers, direct care workers employed by community residential service businesses, and any other direct care worker providing home or community-based services to the elderly or persons with functional disabilities or developmental disabilities.
(b) "Long-term care workers" do not include: (i) Persons employed by the following facilities or agencies: Nursing homes licensed under chapter 18.51 RCW, hospitals or other acute care settings, residential habilitation centers under chapter 71A.20 RCW, facilities certified under 42 C.F.R., Part 483, hospice agencies subject to chapter 70.127 RCW, adult day care centers, and adult day health care centers; or (ii) persons who are not paid by the state or by a private agency or facility licensed or certified by the state to provide personal care services.

Not all NAC employment would require Ms. Howell to provide care, with unsupervised access, to vulnerable adults.

¶48 DSHS has so far not demonstrated that the provisions approved by Initiative 1163 present a complete bar to Ms. Howell's employment as an NAC.

III. DSHS HAS NOT YET MADE A SHOWING OF BUSINESS NECESSITY NOR HAS IT DEMONSTRATED THAT DISCRETIONARY IMMUNITY IS FATAL TO MS. HOWELL'S CLAIM

¶49 In moving for a dismissal under CR 12(c), DSHS did not undertake to produce evidence of business necessity, a response to Ms. Howell's claim that remains available to it. It did argue, and argues on appeal, that discretionary immunity bars Ms. Howell's claim.

¶50 After the Washington legislature abolished the principle of sovereign immunity by passing RCW 4.96.010, the Washington Supreme Court, in Evangelical United Brethren Church of Adna v. State , 67 Wash.2d 246, 407 P.2d 440 (1965), created an exception "under which the government could still govern." Mason v. Bitton, 85 Wash.2d 321, 327, 534 P.2d 1360 (1975). The purpose of the limited, court-created rule of discretionary immunity is to prevent courts from passing judgment on basic policy decisions that have been committed to coordinate branches of government. Bender v. City of Seattle, 99 Wash.2d 582, 588, 664 P.2d 492 (1983). "Since the concept of discretionary governmental immunity is a court-created exception to the general rule of governmental tort liability, its applicability is necessarily limited only to those high level discretionary acts exercised at a truly executive level." Id.

¶51 In Evangelical, the court posed four preliminary questions intended to help distinguish the discretion exercised at a truly executive level to which immunity was granted, from discretion exercised at an operational level, which, if done in a negligent fashion, would subject the government to liability. Mason, 85 Wash.2d at 328, 534 P.2d 1360.

¶52 More important for present purposes is an additional requirement for discretionary immunity imposed by the Supreme Court in King v. City of Seattle, 84 Wash.2d 239, 246, 525 P.2d 228 (1974). There, the court emphasized that

to be entitled to immunity the state must make a showing that such a policy decision, consciously balancing risks and advantages, took place. The fact that an employee normally engages in "discretionary activity" is irrelevant if, in a given case, the employee did not render a considered decision.

Id. As observed in Haslund v. City of Seattle, 86 Wash.2d 607, 619, 547 P.2d 1221 (1976) (citing Mason, 85 Wash.2d at 328, 534 P.2d 1360 ), with this further limitation, "discretionary governmental immunity is, in this state, an extremely limited exception."

¶53 In moving for dismissal on the basis of discretionary immunity, DSHS asserted that its challenged rules and policies were the result of the exercise of truly high-level executive discretion, not operational level discretion. It appears that at least some of the rules and policies probably were adopted by high-level agency executives. But DSHS did not present the required evidence of the risks and advantages that were consciously balanced (or when, or by whom) before high-level agency executives adopted the rules or policies. Just as an agency rule can be declared invalid if, e.g., it was adopted without compliance with statutory rule-making procedures or is arbitrary and capricious, see RCW 34.05.570(2)(c), agency decisions will not enjoy discretionary immunity if the required conscious balancing of risks and advantages did not take place.

IV. CONCLUSION

¶54 We hold that DSHS need not be Ms. Howell's employer to be subject to a claim under the WLAD. With that clarification, Ms. Howell can turn her attention to identifying the specific policies and practices about which she complains, an identification she argued below would in some instances require discovery. Report of Proceedings at 10. DSHS can provide more focused argument as to why it lacks the discretion Ms. Howell contends it enjoys, and any evidence of business necessity or of consideration of risks and advantages that would afford it discretionary immunity.

¶55 We reverse the court's order dismissing the complaint and remand for further proceedings.

Lawrence-Berrey, C.J. (concurring)

¶56 I concur with the lead opinion, but write separately to emphasize my view of why RCW 49.60.030 applies beyond the employer-employee relationship.

¶57 RCW 49.60.030(1) states in pertinent part: "The right to be free from discrimination because of race, ... color, [or] national origin ... is recognized as and declared to be a civil right. This right shall include, but not be limited to [examples (a) through (g) ] ...." The first example of a civil right violation is that of a protected person being denied "[t]he right to obtain and hold employment without discrimination." RCW 49.60.030(1)(a). That is the right that DSHS has purportedly violated.

¶58 Subsection (a) can be construed narrowly to include only an employer's denial of an employee's right to obtain and hold employment without discrimination. If so, its scope would be identical to RCW 49.60.180, and it would be superfluous. We construe statutes to avoid superfluity whenever possible. State v. Arlene's Flowers, Inc., 187 Wash.2d 804, 826, 389 P.3d 543 (2017), cert. granted , --- U.S. ----, 138 S.Ct. 2671, 201 L.Ed.2d 1067 (2018). It, therefore, is appropriate to reject a narrow construction.

¶59 Alternatively, subsection (a) can be construed broadly to apply beyond the employer-employee relationship. This construction is reasonable especially if the other subsections of RCW 49.60.030(1) apply beyond the employer-employee relationship. See In re Arbitration of Mooberry, 108 Wash. App. 654, 658, 32 P.3d 302 (2001) (Subsections passed simultaneously "are in pari materia, and should be construed together in determining their meaning."). Here, subsections (b), (c), (d), (e), (f), and (g) each apply beyond the employer-employee relationship. See RCW 49.60.030(1)(b) (the right to full enjoyment of public accommodations); RCW 49.60.030(1)(c) (the right to engage in real estate transactions); RCW 49.60.030(1)(d) (the right to engage in credit transactions); RCW 49.60.030(1)(e) (the right to engage in insurance transactions); RCW 49.60.030(1)(f) (the right to engage in commerce free from discriminatory boycotts or blacklists); and RCW 49.60.030(1)(g) (the right of a mother to publicly breastfeed her child). It is therefore appropriate to construe RCW 49.60.030(1)(a) broadly, as applying beyond the employer-employee relationship.

Korsmo, J. (dissenting)

¶60 Despite the long history of the Washington Law Against Discrimination (WLAD), ch. 49.60 RCW, appellant has not been able to point to any prior instance in which WLAD was used against a nonemployer or to invalidate a regulation implementing a different statutory protection scheme. The consequences of this novel determination are quite significant. Seeing no evidence that WLAD employment protections were intended to apply to nonemployers or that it was designed as some type of super oversight statute, I respectfully dissent.

¶61 Initially, it is prudent to begin with a history lesson. Seventy years ago, Washington outlawed discrimination in employment, declaring:

The opportunity to obtain employment without discrimination because of race, creed, color or national origin is hereby recognized as and declared to be a civil right.

LAWS OF 1949, ch. 183, § 2. That same language today can be found in RCW 49.60.030(1) :

(1) The right to be free from discrimination ... is recognized as and declared to be a civil right. This right shall include ...
(a) The right to obtain and hold employment without discrimination.

Although WLAD had its start as an anti-discrimination in employment statute, the chapter has broadened over time by legislative expansion of the categories of protected statuses and legislative recognition of new civil rights.

¶62 When originally adopted, WLAD provided only for protection against unfair employment practices by employers, labor organizations, or employment agencies. LAWS OF 1949, ch. 183, § 7. The employer section of this provision was codified at RCW 49.60.180, while labor organizations were placed in § 190 and employment agencies in § 200. As new civil rights were added, RCW 49.60.030 was recast into a list of civil rights recognized by the chapter. LAWS OF 1957, ch. 37, § 3. Similarly, the expanded list of protected statuses was added to the unfair employment practices statute, RCW 49.60.180 -.200.

¶63 The list of civil rights in .030 was found to be an independent basis for bringing an employment-based discrimination claim in Marquis v. City of Spokane, 130 Wash.2d 97, 922 P.2d 43 (1996). The plaintiff, an independent contractor, could not sue under .180 because she was not an "employee" eligible to litigate under that statute. Id. at 110-11, 922 P.2d 43. However, .030 did provide for the right to be free from discrimination based on sex "in the making or performing of a contract for personal services." Id. at 112-13, 922 P.2d 43.

¶64 What is key in Marquis is that the plaintiff's claim was brought against the city of Spokane in its role as an employer. If Spokane had not been an employer, it could not have discriminated against the plaintiff's "right to obtain and hold employment without discrimination." RCW 49.60.030(1)(a) (emphasis supplied).

¶65 Here, DSHS is not an employer for Ms. Howell, or even a prospective employer. Instead, her challenge is against allegedly inadequate regulations implementing a statute governing home care workers, RCW 74.39A.056(2). As noted by the majority, that statute provides that care workers with a founded finding of abuse shall not be employed in the care of vulnerable adults. She believes, as do I, that there should be an opportunity for abusers to demonstrate their rehabilitation and resume employment in their chosen field. However, she can demonstrate no authority requiring that DSHS act to mitigate the harshness resulting from this statute. But, even if the department has the authority to act in that manner, the policy choice of how to exercise that authority is one left to DSHS.

¶66 Instead, Ms. Howell tries to compel DSHS to act in her favor by arguing that the lack of a policy results in unequal treatment. Disparate impact analysis, borrowed from Title VII of the Civil Rights Act of 1964, simply is not applicable to this situation. Marquis has already noted that Title VII is not helpful in actions brought under .030(1). 130 Wash.2d at 109-11, 922 P.2d 43. This is not a practice by some employer that discriminates against a job applicant. It is an across-the-board regulatory statute designed to ensure that our vulnerable communities are protected from all known abusers.

¶67 In this situation, our case law is clear that a showing of discriminatory purpose or intent is required; disparate impact is insufficient. State v. Coria, 120 Wash.2d 156, 174-75, 839 P.2d 890 (1992) (impact of sentencing enhancement on minorities); State v.Johnson , 194 Wash. App. 304, 308, 374 P.3d 1206 (2016) (disparate impact of court fees); State v. Clark , 76 Wash. App. 150, 156-57, 883 P.2d 333 (1994) (disparate impact resulting from ineligibility for sentencing alternative). Ms. Howell provides no evidence of discriminatory purpose behind the known abuser statute. The alleged disparate impact of that statute is simply not actionable under WLAD.

¶68 Another reason this action fails is because WLAD is not some sort of super-statute designed to trump competing statutes. Typically, we construe statutes to avoid conflict in order to give effect to both, but a later adopted statute will govern when the two conflict. Bailey v. State , 147 Wash. App. 251, 262-63, 191 P.3d 1285 (2008). Here, there is a statute prohibiting discrimination in employment and a later adopted statute prohibiting known abusers from working with vulnerable populations. We can give effect to both statutes by limiting them to their core concerns-discrimination in employment and protection of the vulnerable. Known abusers are not a protected class under WLAD and the statute need not be construed to extend to them. But, even if it were unclear, the specific policy of the latter adopted statute, RCW 74.39A.056(2), should govern.

¶69 The consequences of applying WLAD in this manner are significant. All sorts of otherwise neutral statutes could be subject to oversight. Our prison population is overwhelming male and includes a large number of minorities; do those facts render the criminal law invalid under WLAD? Are school admissions policies that have disparate impact on some groups invalid? And, even if invalid under WLAD, why should the policy of that statute govern over the policy of another statute? The legislature has not granted higher status to some statutes over others. We should not do so either.

¶70 Accordingly, I dissent for the following reasons: (1) this was not an employment action and DSHS was not acting as an employer, making RCW 49.60.030(1)(a) inapplicable; (2) there is no obligation on DSHS to ameliorate the known abuser statute; (3) disparate impact analysis has no role in this litigation; (4) appellant has not shown that the known abuser statute was adopted for a discriminatory purpose; and (5) WLAD has no super status authorizing it to trump the policies of later adopted statutes. If there is a policy problem with the known abuser statute, it should be tested and resolved under constitutional principles rather than under an inapplicable statute.

¶71 The summary judgment ruling should be affirmed.

      Legislation establishing the Department of Children, Youth, and Families (DCYF), effective July 1, 2018, transferred the responsibility for responding to reports of child abuse or neglect under chapter 26.44 RCW to DCYF. See, e.g., Laws of 2017, 65th Leg., 3d Spec. Sess., ch. 6, §§ 321-27. The retention schedule for "founded" findings now appears in the retention schedule for DCYF. See Dep't of Children, Youth, & Families, Records Retention Schedule: Version 1.0, at 11 (July 2018), https://www.sos.wa.gov/_assets/archives/recordsmanagement/department-of-children-youth-and-families-records-retention-schedule-v.1.0-(july-2018).pdf [https://perma.cc/M2UV-46XG].

      The dissent argues that Washington "case law is clear that a showing of discriminatory purpose or intent is required; disparate impact is insufficient." Dissent at 381. The three decisions on which it relies all involved equal protection claims, however, not claims under the WLAD. Ms. Howell does not assert an equal protection claim. If and when she does, a showing of discriminatory purpose or intent will be required. See, e.g., State v. Coria , 120 Wash.2d 156, 174-75, 839 P.2d 890 (1992).

      EEOC Enforcement Guidance No. 915.002, (Apr. 25, 2012), https://www.eeoc.gov/laws/guidance/upload/arrest_conviction.pdf [https://perma.cc/R5S2-VVWJ].

      RCW 49.60.030(1) provides, in relevant part:
      The right to be free from discrimination because of race, creed, color, national origin, sex, honorably discharged veteran or military status, sexual orientation, or the presence of any sensory, mental, or physical disability or the use of a trained dog guide or service animal by a person with a disability is recognized as and declared to be a civil right. This right shall include, but not be limited to:
      (a) The right to obtain and hold employment without discrimination

      The dissent baldly asserts that in Marquis , had the city of Spokane "not been an employer, it could not have discriminated against the plaintiff's 'right to obtain and hold employment without discrimination.' " Dissent at 380.
      We can take judicial notice that DSHS employs people; we regularly review appeals involving the work of its employees. As discussed in the next section, a number of Title VII decisions have held that a covered employer can be the proximate cause of a plaintiff's inability to obtain or hold employment without being the plaintiff's own employer. Even those federal decisions that disagree, recognize that whether direct employment is required presents a legitimate question-they do not reject the possibility of third party employer liability out of hand, as does the dissent here.

      For purposes of Title VII and other federal acts that use the term "employee" without defining it, the Supreme Court has held that Congress intended to describe the conventional master-servant relationship as understood by common-law agency doctrine. Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730, 739-40, 109 S.Ct. 2166, 104 L.Ed.2d 811 (1989).

      See, e.g., Sibley Mem'l Hosp. v. Wilson, 160 U.S. App. D.C. 14, 488 F.2d 1338 (1973) ; Zaklama v. Mt. Sinai Med. Ctr., 842 F.2d 291, 294 (11th Cir. 1988) ; Christopher v. Stouder Mem'l Hosp., 936 F.2d 870, 875 (6th Cir. 1991). But see Shah v. Deaconess Hosp., 355 F.3d 496, 500 (6th Cir. 2004) (questioning, but not limiting or overruling Christopher ); Ass'n of Mexican-Am. Educators v. California, 231 F.3d 572, 581 (9th Cir. 2000) (en banc); Graves v. Lowery, 117 F.3d 723, 728 (3d Cir. 1997) (in a case turning primarily on a joint employer rationale, characterizing "employer" status as "look[ing] to the level of control an organization asserts over an individual's access to employment and the organization's power to deny such access") (citing Sibley, 488 F.2d at 1342 ) ); but cf., Gulino v. N.Y. State Educ. Dep't, 460 F.3d 361, 370-76 (2d Cir. 2006) (quoting Reid, 490 U.S. at 739-40, 109 S.Ct. 2166 ); Lopez v. Massachusetts, 588 F.3d 69, 89 (1st Cir. 2009) ("The interference theory has no basis in our circuit law, has never been adopted by this circuit, and contradicts Supreme Court case law.").

      EEOC Compliance Manual § 2-III(B)(3)(a) (Aug. 6, 2009), https://www.eeoc.gov/policy/docs/threshold.html#2-III-B-3-a [https://perma.cc/B6GT-LZEC].

      EEOC Enforcement Guidance No. 915, https://www.eeoc.gov/policy/docs/control_by_third_parties.html [https://perma.cc/3SW8-XTMG].

      Contrary to the suggestion by the dissent, no one contends, nor do we suggest, that the WLAD trumps other statutes.

      The Washington Supreme Court recently held that agency regulations that do not provide safeguards against the high risk of erroneous deprivation of an individual's protected interest in pursuing her chosen, lawful occupation may subject the agency to as-applied due process claims. Fields v. Dep't of Early Learning, --- Wash.2d ----, ---- - ---- & n. 6, 434 P.3d 999, 1006-07 & n. 6 (2019) (plurality opinion) (procedural due process) https://www.courts.wa.gov/opinions/pdf/950245.pdf; id. at ---- - ----, 434 P.3d at 1002-03 (McCloud, J., concurring) (substantive due process).

      The preliminary questions are:
      (1) Does the challenged act, omission, or decision necessarily involve a basic governmental policy, program, or objective? (2) Is the questioned act, omission, or decision essential to the realization or accomplishment of that policy, program, or objective as opposed to one which would not change the course or direction of the policy, program, or objective? (3) Does the act, omission, or decision require the exercise of basic policy evaluation, judgment, and expertise on the part of the governmental agency involved? (4) Does the governmental agency involved possess the requisite constitutional, statutory, or lawful authority and duty to do or make the challenged act, omission, or decision?
      Evangelical, 67 Wash.2d at 255, 407 P.2d 440. If all of the preliminary questions can be clearly and unequivocally answered in the affirmative, then the challenged act, omission, or decision can, with a reasonable degree of assurance, be classified as a discretionary governmental process and nontortious, regardless of its unwisdom. Id. If not, further inquiry may become necessary. Id.

      As the EEOC has observed, "The first step in disparate impact analysis is to identify the particular policy or practice that causes the unlawful disparate impact." EEOC Enforcement Guidance No. 915.002, supra , § V(A)(1).

      Ms. Howell requests an award of reasonable attorney fees pursuant to RAP 18.1 and RCW 49.60.030. Her request is premature because she had not yet prevailed on her disparate impact claim. Antonius v. King County , 153 Wash.2d 256, 273, 103 P.3d 729 (2004).

      Every case brought under .030(1) has involved suit brought against an employer. Kilian v. Atkinson , 147 Wash.2d 16, 50 P.3d 638 (2002) (independent contractor sued employer); Pulcino v. Fed. Express Corp., 141 Wash.2d 629, 9 P.3d 787 (2000) (flight attendant sued airline); Currier v. Northland Servs., Inc., 182 Wash. App. 733, 332 P.3d 1006 (2014) (independent contractor sued employer); Buhr v. Stewart Title of Spokane , LLC , 176 Wash. App. 28, 308 P.3d 712 (2013) (plaintiff sued former employer); Calhoun v. State , 146 Wash. App. 877, 193 P.3d 188 (2008) (detainee working in commitment center sued center); Isaacson v. City of Centralia, noted at 125 Wash. App. 1045, 2005 WL 352192 (2005) (unpublished) (employee sued city); Pittman v. King's Command Foods, Inc., noted at 118 Wash. App. 1030, 2003 WL 22073077 (2003) (unpublished) (employees sued employer); Zollinger v. The Boeing Co., noted at 109 Wash. App. 1045, 2001 WL 1630281 (2001) (unpublished) (factory worker sued Boeing); Sedlacek v. Hillis , 104 Wash. App. 1, 3 P.3d 767 (2000), aff'd in part, rev'd in part, 145 Wash.2d 379, 36 P.3d 1014 (2001) (estate of apartment complex manager sued employer); Dedman v. Wash. Pers. Appeals Bd., 98 Wash. App. 471, 989 P.2d 1214 (1999) (prison guard sued prison); Hoddevik v. Arctic Alaska Fisheries Corp., 94 Wash. App. 268, 970 P.2d 828 (1999) (fishing boat crew member sued employer).

      I have previously complained about the harsh outcomes abuse findings have on care workers. Crosswhite v. DSHS, 197 Wash. App. 539, 574 n.12, 389 P.3d 731 (2017) (Korsmo, J., dissenting). This case was more properly brought as a due process challenge. See Fields v. Dep't of Early Learning, --- Wash.2d ----, 434 P.3d 999 (2019) https://www.courts.wa.gov/opinions/pdf/950245.pdf.

      See 42 USC 2000e-2(k).

      Although Washington has used disparate impact against employers under WLAD, the fact that Washington (1) typically finds Title VII unhelpful and (2) already identified which nonemployers it reaches suggests that it should not be applied against third party regulatory agencies.


author: Siddoway, J.

text:
    BAKER BOYER NATIONAL BANK, Respondent, v. James Patterson FOUST Jr., Appellant.
    No. 35526-8-III
    Court of Appeals of Washington, Division 3.
    FILED OCTOBER 18, 2018 PUBLICATION ORDERED DECEMBER 4, 2018
    Lenard L. Wittlake, Lenard L. Wittlake, PLLC, 22 E Poplar St. Ste. 202, Walla Walla, WA, 99362-3264, for Appellant.
    Joseph Todd Reuter, Foster Pepper PLLC, 618 W Riverside Ave. Ste. 300, Spokane, WA, 99201-5102, for Respondent.
   Siddoway, J.

¶1 The trial court granted summary judgment in favor of Baker Boyer National Bank and entered judgment against James Foust Jr. for the more than $1 million owed by his limited liability company-a debt that Mr. Foust had personally guaranteed. Mr. Foust appeals, contending the court erred in summarily dismissing his counterclaims alleging fraud in the inducement and negligent misrepresentation, and in denying reconsideration. We find no error or abuse of discretion and affirm.

FACTS AND PROCEDURAL BACKGROUND

¶2 This case arises out of a failed investment opportunity originally conceived in 2012 by Greenflex Housing, LLC, (Greenflex ) during an oil boom in North Dakota's Bakken oil field. The oil boom created a housing need that a Washington resident, John Eakin, and several friends concluded could be profitably addressed by delivering Greenflex modular homes to locations where oil field housing was needed. Mr. Eakin, who served as Greenflex's chief executive officer at relevant times, offered the following explanation of its business plan:

Greenflex Housing LLC is a company we formed to provide portable worker housing for construction, oil, gas, pipeline, and virtually anyone who has a need for housing in hard to reach areas. Our company basically has "unit owners" who purchase Greenflex homes from the Greenflex factory in Salem, Oregon. After looking at the information on how we build those homes you will understand why we exclusively use the Greenflex brand. Super insulated concrete structures that are fire proof, waterproof, mold proof, and virtually indestructible are the perfect solution for rental worker housing. The fact that they are portable makes for ease of placement in hard to a [sic] build areas with limited infrastructure. The basic idea is to have several "unit Owners" who pool their homes into Greenflex Housing, LLC so we can be a large housing provider across the nation.

Clerk's Papers (CP) at 110.

¶3 One of the early investors in the venture was Jason Sundseth, whose limited liability company (LLC) purchased 30 modular homes, or "units," with financing provided by Baker Boyer Bank. By the spring of 2013, however, Dr. Sundseth wanted to sell the LLC's units, which had by then been moved to leased sites in recreational vehicle (RV) parks in North Dakota. James Foust Jr. learned of the opportunity to purchase the Sundseth LLC's units from Cameron Jones, a friend of Mr. Eakin's. Mr. Jones introduced Mr. Foust to Dr. Sundseth, Mr. Eakin, and Greenflex's chief financial officer. In September 2013, Mr. Foust, as managing member of his own LLC, JPF Enterprises (JPF), entered into an agreement to buy the 30 units from the Sundseth LLC, contingent on reaching financing terms with the bank. The agreement provided for a $52,150 sales commission to Mr. Jones, to be paid by JPF.

¶4 JPF agreed to purchase the 30 units for $1,245,000, approximately $1,000,000 of which would be paid to the bank in order to discharge the bank's liens. Mr. Foust had not done business with the bank before, but began corresponding with one of its loan officers, Chris Sentz, on or before June 4, 2013. In e-mails exchanged on that date, Mr. Foust identified his expectations, which included that he would have a lease agreement with Greenflex. Mr. Sentz responded with an expression of interest outlining a framework for financing that assumed that Mr. Foust's LLC would have a six-year contract with Greenflex. Over the next four months, Mr. Foust, an experienced business owner and operator, investigated and assessed the potential investment. The bank engaged in its underwriting process.

¶5 On October 17, 2013, Mr. Foust, as the managing member of JPF, executed a $1,077,600 promissory note in favor of the bank to close its purchase of the 30 units. The bank required, and Mr. Foust individually signed, a commercial guaranty. Among Mr. Foust's representations and warranties in the guaranty was his agreement "that, absent a request for information, Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower." CP at 12.

¶6 JPF made its last payment on the note a couple of years later, on November 2, 2015. On March 4, 2016, the bank declared JPF in default, accelerated the loan, and demanded payment. In December 2016, it brought the action below, suing Mr. Foust individually on his guaranty. In response to the bank's motion for default or summary judgment, Mr. Foust answered and counterclaimed, alleging fraudulent inducement and negligent misrepresentation.

¶7 When deposed, Mr. Foust was unable to identify any affirmative misrepresentation made to him by representatives of the bank, but he believed that misrepresentations might be uncovered through discovery. He also relied for his fraud and negligent misrepresentation claims on "sin[s] of omission." CP at 203. This was based on his belief that bank employees knew but failed to tell him about problems Greenflex had in 2013 with Badlands LLC, the rental manager for Greenflex's units in North Dakota. Badlands also turned out to be the party holding lease rights to the RV sites where the units were located. Badlands filed a lawsuit against Greenflex on or about July 12, 2013, in which it reportedly obtained a temporary restraining order against Greenflex. The case was compromised and settled, and the claims against Greenflex were dismissed four weeks later, on August 9, 2013.

¶8 The trial court granted summary judgment in the bank's favor. In a motion for reconsideration, Mr. Foust for the first time argued that the bank had violated the Equal Credit Opportunity Act, 15 U.S.C. § 1691, and sought to retract his admission in answering the bank's complaint that he entered into the commercial guaranty on behalf of his marital community. The trial court denied the motion. Mr. Foust appeals.

ANALYSIS

I. THE TRIAL COURT PROPERLY GRANTED SUMMARY JUDGMENT DISMISSING MR. FOUST'S CLAIMS

¶9 Mr. Foust argues that the trial court erred in granting summary judgment because genuine issues of material fact exist that require trial. We review a trial court's grant of summary judgment de novo. Korslund v. DynCorp Tri-Cities Servs., Inc. , 156 Wash.2d 168, 177, 125 P.3d 119 (2005), overruled on other grounds by Rose v. Anderson Hay & Grain Co. , 184 Wash.2d 268, 358 P.3d 1139 (2015). Summary judgment is appropriate when the moving party shows there is "no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." CR 56(c). The nonmoving party "may not rely on speculation, argumentative assertions that unresolved factual issues remain, or in having its affidavits considered at face value." Seven Gables Corp. v. MGM/UA Entm't Co. , 106 Wash.2d 1, 13, 721 P.2d 1 (1986). "[A]fter the moving party submits adequate affidavits, the nonmoving party must set forth specific facts that sufficiently rebut the moving party's contentions and disclose that a genuine issue as to a material fact exists." Id. Like the trial court, we view all demonstrated facts and reasonable inferences in the light most favorable to the nonmoving party. Jones v. Allstate Ins. Co. , 146 Wash.2d 291, 300, 45 P.3d 1068 (2002).

A. The fraudulent inducement counterclaim was properly dismissed

¶10 To prevail on a claim of fraud, the plaintiff must prove nine elements by clear, cogent, and convincing evidence. Among them are that the defendant made a material misrepresentation of existing fact. Beckendorf v. Beckendorf , 76 Wash.2d 457, 462, 457 P.2d 603 (1969). Fraud in the inducement exists when the misrepresentation is of a matter or matters that motivate a defendant to enter into the transaction. Pedersen v. Bibioff , 64 Wash. App. 710, 722, 828 P.2d 1113 (1992).

¶11 Mr. Foust does not rely for his claim of fraudulent inducement on a material misrepresentation but contends, instead, that the bank failed to disclose material information. "Ordinarily," however, "the duty to disclose a material fact exists only where there is a fiduciary relationship." Tokarz v. Frontier Fed. Sav. & Loan Ass'n , 33 Wash. App. 456, 463-64, 656 P.2d 1089 (1982). When a duty to disclose exists, the suppression of a material fact is tantamount to an affirmative misrepresentation. Crisman v. Crisman , 85 Wash. App. 15, 22, 931 P.2d 163 (1997).

¶12 A bank is not generally a fiduciary of its borrowers; instead, they deal at arm's length. Tokarz , 33 Wash. App. at 458-59, 656 P.2d 1089. Mr. Foust concedes that this court's decision in Tokarz provides a controlling legal analysis of the special circumstances in which a bank might owe a duty of disclosure to a borrower. Br. of Appellant at 10-11. In Tokarz , the plaintiffs contracted with a builder and contractor to construct a home, obtaining financing through Frontier Federal Savings & Loan. Tokarz , 33 Wash. App. at 458, 656 P.2d 1089. Frontier had made earlier loans for homes that the contractor was building. Id. A month after the Tokarzs' financing was arranged, Frontier discontinued lending money to the contractor, having learned from a routine credit report that five liens had been filed on homes he was building. Id. When the Tokarzs had their own problems with the contractor, ordered him off the property, and then later learned that Frontier had earlier severed its own relationship with the contractor, they sued Frontier, alleging breach of fiduciary duty and fraud for not disclosing the contractor's financial problems. Id. at 458, 656 P.2d 1089.

¶13 On appeal, this court recognized that no prior Washington case had addressed the precise issue of whether there was a special relationship between a plaintiff borrower and a defendant bank giving rise to a duty to disclose another bank customer's difficulties. Id. at 461, 656 P.2d 1089. In the Tokarzs' case, this court found "none of the special circumstances which may impose a fiduciary duty":

There is no allegation or evidence that Frontier (1) took on any extra services on behalf of Tokarz other than furnishing the money for construction of a home; (2) received any greater economic benefit from the transaction other than the normal mortgage; (3) exercised extensive control over the construction; or (4) was asked by Tokarz if there were any lien actions pending.

Id. at 462, 656 P.2d 1089.

¶14 Mr. Foust argues that two important factual differences distinguish his case from Tokarz . He claims that here, (1) the bank "required" him to contract with Greenflex, Br. of Appellant at 11, (2) at the same time the bank was making inquiries about Greenflex's operations as part of the bank's underwriting of JPF's investment in the housing venture. The only case he suggests recognizes these facts as additional bases for finding a duty to disclose is Hutson v. Wenatchee Federal Savings & Loan Ass'n , 22 Wash. App. 91, 588 P.2d 1192 (1978). But Hutson predates Tokarz , and Tokarz characterizes Hutson as a classic case of a special relationship that arose because a borrower with "less knowledge, experience and judgment" than bank officers relied, with the bank's knowledge, on the bank officers' superior understanding of the type of mortgage or credit insurance that it was procuring on the borrower's behalf. Tokarz , 33 Wash. App. at 460-61, 656 P.2d 1089.

¶15 Unlike the borrower in Hutson , Mr. Foust is an experienced businessperson. He cannot demonstrate bank awareness that he relied on the bank to disclose information encountered in the underwriting process because his guaranty expressly disclaimed reliance on the bank to disclose such information. His representation and warranty that the bank had no obligation to disclose information it acquired does not contravene public policy, as he contends on appeal. To the contrary, it clarified the expectations of the parties.

¶16 In opposing summary judgment, Mr. Foust did not demonstrate any other special circumstance giving rise to a fiduciary duty of disclosure on the part of the bank. He did not demonstrate that the bank provided services to Mr. Foust other than traditional financing with normal underwriting procedures.

¶17 Mr. Foust argues that a fiduciary or special relationship arose because the bank gained a greater-than-usual economic benefit when his purchase of the units spared the bank the need to foreclose on its loan to the Sundseth LLC. To begin with, for a greater-than-usual economic benefit to give rise to a fiduciary duty, it must be a benefit that the parties recognize and that they know (or should know) transforms their relationship to one of unusual trust and confidence. This is clear from the Washington case law on which Tokarz relied in concluding that a greater-than-usual economic benefit can give rise to fiduciary duties. There is no evidence that Mr. Foust and bank representatives had a common understanding during loan negotiations that the bank was receiving a greater-than-usual economic benefit from the loan to JPF, so there was nothing to transform their relationship into one of unusual trust and confidence.

¶18 Mr. Foust provides no admissible evidence that the bank did benefit economically when JPF stepped into the shoes of the Sundseth LLC. The evidence on which Mr. Foust relies for this argument is at best double hearsay: he points to unsworn electronic mail from Mr. Eakin in which Mr. Eakin recounts information about Dr. Sundseth refusing to make payments and being nine days away from delinquency. This is information that Mr. Eakin might have learned from Dr. Sundseth or that he might have learned from someone further removed from the facts. Mr. Foust presents no admissible evidence that the Sundseth LLC would have discontinued making payments and no evidence, admissible or inadmissible, that Dr. Sundseth and his LLC were weaker financially than JPF and Mr. Foust.

¶19 Mr. Foust's most vigorous contention is that the bank imposed a "requirement" that JPF enter into a lease and management agreement with Greenflex, thereby allegedly exercising extensive control over JPF's operations. Br. of Appellant at 5. Mr. Foust's evidence shows only that after he sent an e-mail to Mr. Sentz on the early afternoon of June 4, 2013, expressing his "[e]xpectation[ ]" that he would enter into a lease of the purchased units to Greenflex, the bank made Mr. Foust's expected lease a requirement of the loan. CP at 108-09. It is normal for commercial lenders extending substantial credit to satisfy themselves, sometimes through loan conditions or requirements, that a borrower's business will be operated competently during the loan term. Mr. Foust's own deposition testimony makes clear that this is what the bank's "requirement" was all about. Asked about the discussion with Mr. Sentz about the bank's requirement for a lease of the units to Greenflex, Mr. Foust testified;

A He said that-that the GreenFLEX Housing had a great deal of experience in managing these things, and it was a prerequisite to, you know, pursuing business with Baker Boyer Bank, and probably because that was a board of directors-or whoever approved that line of business-stated that was protection, I guess, on, you know, somebody that was inexperienced coming in.
Q Explain that. Who was inexperienced?
A I was inexperienced. I had no experience in managing units in an oil field in North Dakota. This company did. And it made sense.
Q It made sense to align the borrower with GreenFLEX Housing?
A Yes.
Q Did you ever tell the bank you didn't want to have to lease the units you were going to buy to GreenFLEX Housing?
A No. That was-please understand, that wasn't an option that was even open, that that was a requirement by Baker Boyer Bank.

CP at 172-73.

¶20 There is no evidence that the bank insisted that the operating role Greenflex would fill must be filled by Greenflex to the exclusion of any other operator. Mr. Foust presents no evidence that he ever expressed the desire to fill the operational role with someone else qualified to rent units located in North Dakota. Traditional underwriting requirements that are designed only to ensure competent operation of a business but that do not divest management of the borrower of operational control do not give rise to a fiduciary relationship. See, e.g. , In re Am. Consol. Transp. Cos. , 433 B.R. 242, 254 (Bankr. N.D. Ill. 2010) ("[C]ontrol is not established when a lender insists on standard loan agreement restrictions, closely monitors the borrower's finances, and makes business recommendations, even [in] the context of heated negotiations. ... Nor is control established when a borrower hires a management or restructuring consultant selected by the lender.").

¶21 Finally, Mr. Foust provides no evidence that Greenflex's dispute with Badlands proximately caused the failure of his investment in the 30 units. As set forth above, the Badlands lawsuit was dismissed with prejudice in less than a month. When deposed, Mr. Foust candidly admitted that the demise of JPF's investment came with the end of the oil boom, explaining, "The major factor was that the drilling pretty much ceased to operate because there was no economical way to transport oil from North Dakota to the refineries in the south." CP at 168. This was problematic for his rental units because, as he put it, "When they stopped drilling, their people go home." CP at 169. Summary judgment dismissal of the fraudulent inducement claim was proper.

B. The negligent misrepresentation counterclaim was properly dismissed

¶22 To prevail on a claim of negligent misrepresentation, a plaintiff must prove by clear, cogent, and convincing evidence that (1) a defendant supplied information for the guidance of others in their business transactions that was false, (2) the defendant knew or should have known that the information was supplied to guide the plaintiff in business transactions, (3) the defendant was negligent in obtaining or communicating false information, (4) the plaintiff relied on the false information supplied by the defendant, (5) the plaintiff's reliance on the false information supplied by the defendant was justified, and (6) the false information was the proximate cause of damages to the plaintiff. Lawyers Title Ins. Corp. v. Baik , 147 Wash.2d 536, 545, 55 P.3d 619 (2002).

¶23 "Ordinarily, an omission alone cannot constitute negligent misrepresentation, since a plaintiff must justifiably rely on a misrepresentation." Merriman v. Am. Guar. & Liab. Ins. Co. , 198 Wash. App. 594, 614, 396 P.3d 351, review denied , 189 Wash.2d 1038, 413 P.3d 565 (2017). "But if a party has a duty to disclose information, the failure to do so can constitute negligent misrepresentation." Id. As is the case with fraud, the duty to disclose arises only in the context of an inherently fiduciary relationship or some type of special relationship of trust and confidence giving rise to quasi-fiduciary duties of disclosure. Colonial Imports, Inc. v. Carlton Nw., Inc. , 121 Wash.2d 726, 732, 853 P.2d 913 (1993).

¶24 Summary judgment dismissal of Mr. Foust's negligent misrepresentation claim was proper for the same reason his fraudulent inducement claim was properly dismissed.

¶25 Affirmed.

¶26 A majority of the panel has determined this opinion will not be printed in the Washington Appellate Reports, but it will be filed for public record pursuant to RCW 2.06.040.

WE CONCUR:

Korsmo, J.

Pennell, A.C.J.

      For simplicity, we refer to Greenflex Housing, LLC as "Greenflex." Other Greenflex entities exist, but we have no occasion to refer to any of them in this opinion.

      Mr. Foust later speculated that Mr. Jones was retained by the bank to offload the Sundseth LLC's investment, but there is no evidence that Mr. Jones had a connection with the bank. The fact that his commission was paid by JPF suggests that he was acting on Mr. Foust's behalf, not the bank's.

      Mr. Sentz's communication's stated assumption was "a negotiated '6 year' contract with John Eakin," but it is undisputed that the bank contemplated a contract with Greenflex, presumably to be executed by Eakin as CEO. CP at 107.

      The nine elements are (1) a representation of existing fact, (2) that is material, (3) and false, (4) the speaker knows of its falsity, (5) intent to induce another to act, (6) ignorance of its falsity by the listener, (7) the latter's reliance on the truth of the representation, (8) her right to rely on it, and (9) consequent damage. Pedersen v. Bibioff , 64 Wash. App. 710, 723 n.10, 828 P.2d 1113 (1992).

      The lease agreement between JPF and Greenflex has an effective date of June 1, 2013, which was several days before Mr. Foust's and Mr. Sentz's initial communications.