      IN THE COURT OF APPEALS FOR THE STATE OF WASHINGTON



JILL E. LANE AND JAMES C.                        No. 69928-8-
MCCLUNG, III

                    Appellants,                  DIVISION ONE


              v.




MARK von der BURG; COLDWELL                      UNPUBLISHED OPINION
BANKER BAIN; BELLEVUE/COLDWELL
BANKER REAL ESTATE LLC; DAWN
GADWA; FIRST CITIZENS BANK
WASHINGTON/FIRST CITIZENS BANC
SHARES.

                     Respondents.                FILED: April 21. 2014

       Spearman, C.J. — Jill E. Lane and her attorney, Andrew L. Magee, appeal

the trial court's order imposing CR 11 sanctions and its denial of their motion to

reconsider. Because the trial court properly found that (1) Lane's claims against

the respondents were not warranted by existing case law and (2) Lane failed to

make a reasonable inquiry into the factual or legal basis for her claims, we affirm.

                                      FACTS

       In early summer of 2010, Jill Lane and two others unlawfully entered and

occupied a multi-million dollar Kirkland mansion owned by First Citizens Bank &

Trust Company (FCB). The vacant property had been foreclosed and was listed

for sale by FCB's realtor, Mark von der Burg.
No. 69928-8-1/2


      On June 6, 2010, von der Burg became aware that unidentified individuals

were living in the mansion. He called the Kirkland Police Department (KPD) to

investigate. Upon arrival at the property, a KPD officer observed Lane and two

other individuals outside the garage. The officer approached Lane, who identified

herself as the new owner of the property. A short time later, von der Burg arrived

at the property and spoke with the KPD officer and Lane, who continued to insist

that she owned the property. Based on this incident, Lane was later charged with

and found guilty of criminal trespass in the first degree in Kirkland Municipal

Court.1

          The following day, Lane contacted von der Burg to schedule a meeting to

discuss her purported ownership of the property. The meeting occurred that

afternoon at von der Burg's offices. At least five people were present: von der

Burg; Lane; James McClung, Lane's Broker; Dawn Gadwa, an FCB employee;

and another woman, who Lane identified as McClung's assistant. At the meeting,

Lane and McClung purported to explain that Lane's brief occupancy of the

property had secured her an ownership interest or right of occupancythrough a

nebulous form of squatter's rights, which they dubbed "Banker's Acceptance."

Clerk's Paper (CP) at 474. They also expressed Lane's willingness to purchase

the property from FCB through the usual process of a real estate purchase and
sale agreement. Unbeknownst to Lane, von der Burg made an audio recording of

this conversation.




          1 FCB also obtained favorable judgment in an unlawful detainer action against Lane.

                                                 2
No. 69928-8-1/3


       Lane became aware of the recording during the course of her criminal

trespass trial in Kirkland Municipal Court. Von der Burg, who was expected to

testify on behalf of the City, sought the court's permission to assert the Fifth

Amendment privilege against self-incrimination as to any questions that might be

asked about the recording. It appears undisputed that the court granted the

request based on evidence that von der Burg had admitted to making the

recording without Lane's knowledge or consent. The court appeared to

acknowledge that the act was a possible criminal violation.

       On May 31, 2012, Lane and McClung sued FCB and von der Burg

alleging that von der Burg's recording of the June 2010 meeting was obtained in

violation of chapter 9.73 RCW, Washington's Privacy Act.2 On October 26, 2012,
the trial court granted FCB's motion for summary judgment dismissal and von der

Burg's motion to dismiss for failure to state a claim pursuant to CR 12(b)(6).
       Throughout litigation of this case, FCB and von der Burg maintained that

Lane's claim was baseless. They repeatedly advised her attorney, Magee, that

her claim had no basis in law and was, therefore, filed in violation of CR 11.3

After Lane refused to withdraw her claim and judgment was entered against her,

FCB and von der Burg moved the courtfor sanctions pursuant to RCW 4.84.185

andCR11.



        2McClung had previously been voluntarily dismissed with prejudice from this action, but
the court's order indicated that FCB retained the right to bring claims against McClung pursuant
to RCW 4.84.185 and CR 11.
        3FCB's attorney, Chad Arceneaux, attested to verbally admonishing Magee that Lane's
claim was baseless and CR 11 sanctions would be warranted if she persisted in this action. He
also sent three letters to Magee reiterating this warning, copies of which were attached as
exhibits to his declaration in support of FCB's CR 11 motion. Von der Burg's attorney, Hunter
Abell, also advised that it would seek CR 11 sanctions upon dismissal of Lane's claims.
No. 69928-8-1/4


       Lane moved to strike the motions as untimely, requested oral argument,

and sought a continuance. She also alleged, as one basis for a reasonable belief

that Lane's claim was well grounded in fact and law, that the Kirkland Municipal

Court judge who tried Lane's trespass case had "acknowledged on the record

that the recording was made unlawfully and, therefore, pursuant to the pertinent

RCW was not admissible as evidence." CP at 112. The trial court denied the

motions to strike and for oral argument, but granted Lane a thirty-day

continuance. The trial court also explained that if Lane was able to produce

evidence that, priorto filing, she was aware a judicial officer had determined the

conversation at issue was recorded unlawfully, such evidence might establish

that her claim, "while not legally viable, was not unreasonable or frivolous." CP at

195-96.

       On December 11, 2012, Lane filed her substantive response to the CR 11

motions, which included as exhibits certified copies of transcripts and documents

filed in the Kirkland Municipal Court criminal trespass action. In particular, her

submission contained transcripts of pretrial hearings on April 16, 2012 and June

18, 2012. The first hearing occurred soon after Lane became aware of the

recording and before she filed the instant case on May 31, 2012. During the

course of this hearing, the City prosecutor acknowledged admissions by von der

Burg that he had recorded the June 7 meeting without Lane's knowledge or
consent. Magee also advised the court that he had referred the matter to the

Kirkland Police Department for investigation. And the City prosecutor and the

judge acknowledged that the recording "may have been unlawful." CP at 896.
During the June 18 hearing, von der Burg, through his attorney, sought the
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No. 69928-8-1/5


court's permission to refuse to answer questions about the recording based on

his Fifth Amendment right against self-incrimination.

       On January 3, 2013, the trial court granted both motions for sanctions and

attorney's fees pursuant to CR 11.4 The trial court found that Lane failed to

provide any evidence that the action was warranted by existing case law or that

there was a good faith argument for extension of existing law, and that Lane

failed to make reasonable inquiry into the factual or legal basis of the action prior

to filing. With respect to the evidence cited in Lane's December 11, 2012,

response, the trial court found that:

        [The] presentation to the Court of "evidence" supporting the
        assertion that there was a reasonable basis for the claim because
        of statements from the [Kirkland Municipal] court that the action of
        [von der Burg] was unlawful were based on evidence that was not
        even in existence prior to the filing of the complaint5 and a transcript
        of a [Kirkland Municipal court] hearing that was not made by a
        certified transcriptionist, appeared to have been selectively
        transcribed, and, even if considered, contained at best a statement
        from the Court that identified that there might be an issue as to
        whether the recording was made illegally.

CP at 963. The trial court awarded FCB and Von der Burg $16,000 each in

attorney's fees, along with post-judgment interest, payable jointly and severally

by Lane and Magee.6 Lane and Magee unsuccessfully moved the trial court for

reconsideration. CP at 965, 971. They appeal.



       4 Both FCB and Von der Burg moved for sanctions pursuant to RCW 4.84.185 as well as
CR 11. The trial court's order, however, does not cite RCW 4.84.185 as a basis for the awards.
        5That the trial court failed to distinguish between the evidence from Kirkland Municipal
Court in existence before Lane filed this case and that created after is immaterial to its decision or
to the outcome of this appeal.
        6CR 11 explicitly permits the court to sanction both the signer of the sanctionable
pleading (Magee) and the represented party (Lane). The trial court did notexplain its basis for
imposing sanctions against both Lane and Magee.
No. 69928-8-1/6


                                   DISCUSSION

       Lane and Magee contend the trial court erred in its rulings on the CR 11

motions because due process guarantees entitled them to oral argument on the

motions and because Lane's claim was not baseless. We conclude that due

process was served in this case because Lane and Magee received notice of CR

11 proceedings and had a full and fair opportunity to respond. We also conclude

that imposition of CR 11 sanctions was within the sound discretion of the trial

court where Lane's claim lacked a legal basis and no evidence established that

Magee, as the attorney who signed the complaint, conducted a reasonable pre-

filing inquiry. We affirm.

                                   Due Process

       We review an award of CR 11 sanctions for abuse of discretion. Biggs v.

Vail. 124 Wn.2d 193, 197, 876 P.2d 448 (1994). The range of discretionary

choices is a question of law and the judge abuses his or her discretion if the

discretionary decision is contrary to law. State v. Neal, 144 Wn.2d 600, 609, 30

P.3d 1255 (2001).

       Lane and Magee contend that the trial court's decision to deny oral

argument on the CR 11 motions was a denial of procedural due process. They
cite Brvant v. Joseph Tree. Inc., 119 Wn.2d 210, 829 P.2d 1099 (1992), in

support of this proposition, but their reliance on that case is misplaced. In Brvant,

during the course of appellate proceedings, one of the parties sought to

disqualify an attorney for the opposing party. The motion was denied by a
commissioner of the Court of Appeals, which also denied the opposing party's

motion for sanctions. The opposing party renewed the motion when its appellate
                                          6
No. 69928-8-1/7


brief was filed. We heard oral argument on the matter and in the course of our

opinion granted the motion for sanctions. The sanctioned party appealed to the

Supreme Court arguing, among other things, that the Court of Appeals

sanctioned him without affording him adequate due process. The argument was

rejected because the sanctioned party had both notice of the motion and an

opportunity to be heard at oral argument. But nowhere in the Supreme Court's

opinion does it state that oral argument is a necessary component of due

process when sanctions are sought pursuant to CR 11.

      Lane and Magee also appear to argue that KCLCR 7(b)(4)(B) requires

oral argument on all dispositive motions. They then argue, without citation to any

authority, that a CR 11 motion is a "dispositive" motion which under the rule must

be set for oral argument. We reject this contention. First, because no authority is

cited for the contention that CR 11 motions are dispositive we need not consider

the argument. Seventh Elect Church in Israel v. Rogers, 34 Wn. App. 105, 120,
660 P.2d 280 (1983). Second, even if we were to consider it, the argument is

unsupported by the text of KCLCR 7(b)(4)(B) which provides:

       Scheduling Oral Argument on Dispositive Motions. The time
       and date for hearing shall be scheduled in advance by
       contacting the staff of the hearing judge.

It neither defines "dispositive" motions nor mandates that oral argument be

heard. It merely directs how oral arguments are to be scheduled.

       Lane and Magee are correct that CR 11 motions must comport with due

process. Brvant, 119 Wn.2d at 224. But due process does not require any
particular form or procedure. It requires only that a party receive notice of
proceedings and an opportunity to present its position before a competent
                                          7
No. 69928-8-1/8


tribunal. Id.: see also Buechler v. Wenatchee Valley College, 174 Wn. App. 141,

156-57, 298 P.3d 110, rev. denied, 178 Wn.2d 1005 (2013) (citing Goss v.

Lopez. 419 U.S. 565, 95 S.Ct. 729, 42 LEd.2d 725 (1975)).

       In this case, Lane and Magee were served with the CR 11 motions upon

filing, and were therefore notified of the proceedings. In addition, prior to FCB

and von der Burg filing the motions, Lane and Magee were repeatedly advised by

opposing counsel that the filing of her claim violated CR 11. Lane and Magee

also had an opportunity to present their position to the court. Indeed, the trial

court granted a thirty-day continuance for Lane and Magee to supplementtheir

response, directed them toward the specific evidence that could be relevant to a

disposition in their favor, and considered their memorandum in opposition to the
CR 11 motions. Lane and Magee were accorded due process.

                             Basis for CR 11 Sanctions

       CR 11(a) provides in relevant part:

       The signature of a party or of an attorney constitutes a certificate
       by the party or attorney that the party or attorney has read the
       pleading, motion, or legal memorandum, and that to the best of
       the party's or attorney's knowledge, information and belief,
       formed after an inquiry reasonable under the circumstances: (1)
       it is well grounded in fact; (2) it is warranted by existing law or a
       good faith argument for the extension, modification, or reversal of
       existing law or the establishment of new law....

       On review of a motion ordering CR 11 sanctions, "we must keep in mind

that '[t]he purpose behind CR 11 is to deter baseless filings and to curb abuses
ofthe justice system.'" Biggs, 124 Wn.2d at 197 (quoting Brvant v. Joseph Tree,
Inc., 119 Wn.2d 210, 219, 829 P.2d 1099 (1992)). Sanctions may be imposed

under this rule if a complaint lacks a factual or legal basis and the attorney or

                                           8
No. 69928-8-1/9


party who signed it failed to conduct a reasonable inquiry into the factual or legal

basis of the action. Brvant, 119 Wn.2d at 220. We employ an objective standard

to determine whether a reasonable attorney in like circumstances could believe

his or her actions to be factually and legally justified at the time the pleading was

submitted. ]d.

       In this case, the trial court concluded that CR 11 sanctions were justified

because (1) Lane's claim was not warranted by existing case law and (2) Lane

did not make a reasonable inquiry into the factual or legal basis of the action.

Lane and Magee challenge these conclusions.

       We review the trial court's legal conclusions de novo. In re Detention of

Peterson, 145 Wn.2d 789, 800, 42 P.3d 952 (2002). In so doing, we first

determine whether the trial court's factual findings are supported by substantial

evidence and, if so, whether those findings support the trial court's conclusions of

law. Keever & Assoc. Inc. v. Randall, 129 Wn. App. 733, 737,119 P.3d 926

(2005). Substantial evidence is evidence sufficient to persuade a fair-minded

person of the truth of the asserted premise. \± at 734, 119 P.3d 926.

       We find no error in the trial court's conclusion that Lane's claim was not

warranted by existing case law. Generally, Washington's Privacy Act creates a

civil cause of action against one who records any "private conversation" without

first obtaining the consent of all the persons engaged in the conversation. RCW

9.73.030(1 )(b); .060. The Legislature did not define the term "private."

Washington courts accord the term "private conversation" its ordinary and usual

meaning; the word "private" has been interpreted as "belonging to one's

self...secret...intended only for the persons involved (a conversation)...holding a
                                          9
No. 69928-8-1/10


confidential relationship to something...a secret message: a private

communication...secretly; not open or in public." State v. D.J.W., 76 Wn. App.

135,140-141, 882 P.2d 1199 (1999) (internal citations omitted).

      Although the question of whether a particular conversation is private is a

question of fact, where the facts are undisputed and reasonable minds could not

differ, the issue may be determined as a matter of law. Ecl, State v. Clark, 129

Wn.2d211, 225, 916 P.2d 384 (1996): see also Kadoranian v. Bellingham Police

Dep't., 119 Wn.2d 178, 190, 829 P.2d 1061 (1992). We apply a subjective

standard, analyzing whether a conversation was private under the circumstances

of a particular case. State v. Clark, 129 Wn.2d 211, 224, 916 P.2d 384 (1996) (en

banc). The intent or reasonable expectation of the participants, including the

reasonable expectation of privacy, if any, as manifested by the facts and

circumstances of each case, controls as to whether a conversation is private. Id,

(citing Kadoranian, 119 Wn.2d at 189). We also look to other factors bearing

upon the reasonable expectations and intent of the participants, including

duration, subject matter and location of the conversation, and presence or

potential presence of a third party. Id. (citing Kadoranian, 119 Wn.2d at 190-91;

State v. Slemmer, 48 Wn. App. 48, 53, 738 P.2d 281 (1987)).

       In this case, the recorded conversation concerned two issues. First, Lane

and McClung explained to FCB's realtor, von der Burg, and its employee,

Gadwa, the basis for Lane's occupancy of and claim to the property. Second,

Lane offered to purchase the property. No reasonable person could conclude

that this conversation was private.



                                        10
No. 69928-8-1/11


        Lane claims that she presumed "that this was a private meeting to discuss

what is normally a private matter, the negotiation and purchase price and offer on

a house." CP at 238. But Lane's presumption is insufficient to establish the claim

because "any [interested party] will contend that his or her conversation was

intended to be private." State v. Clark, 129 Wn.2d at 225. Moreover, it was

unreasonable for Lane to expect that von der Burg or Gadwa would not convey

her offer and the explanation for her occupancy of the property to other

employees of FCB7 and to those investigating the criminal trespass allegation.8 In
addition, it does not appear that at any time during the course of the June 7

meeting that Lane expressed a concern that the conversation remain

confidential. The trial court properly concluded that Lane's action was not

warranted under existing law because the subject conversation was not "private",

as that term is defined in the relevant case law.

        We also find no error in the trial court's conclusion that Lane did not make

a reasonable inquiry into the factual or legal basis of her claim. Lane and Magee

argue that a reasonable pretrial inquiry was conducted and, consequently,




         7In reply, Lane and Magee argue that through the presence of Gadwa, FCB was a
participant in the meeting. Therefore, anycommunication ofan offer from Lane to another FCB
employee byGadwa or von der Burg is still among participants in the meeting and remains
private. Because the argumentwas not made until appellants' reply, we do not consider it.
Cowiche Canvon Conservancy v. Boslev. 118 Wn.2d 801, 809, 828 P.2d 549 (1992)("An issue
raised and argued for the first time in a reply brief is too late to warrant consideration." (Citing in
re Marriage of Sacco. 114 Wn.2d 1, 5, 784 P.2d 1266 (1990)).
       8 Lane was well aware that Von der Burg had called the police to have her removed from
the house and that criminal charges could follow. Under these circumstances no reasonable
person could believe that any statements madeduring the conversation about heroccupancy of
the house would not be made available to investigating authorities.



                                                   11
No. 69928-8-1/12


sanctions are not warranted. But we find no evidence to support this argument

and Lane and Magee point to none.

       In response to the CR 11 motions, Lane did not set out any efforts she

took to establish a factual and legal basis for this claim. Instead, she relied solely

on certified copies of transcripts and documents filed in her criminal trespass trial

in Kirkland Municipal Court. This reliance was misplaced.

       As discussed above, the Kirkland Municipal Court evidence consisted

primarily of transcripts and documents from pretrial hearings on April 16 and
June 18, 2012. The only relevant part of this evidence is that which was available

to Lane prior to May 31, 2012, the date she filed this case. The evidence from the
April 16 hearing showed that Von der Burg admitted to recording the meeting
without Lane's knowledge and consent and that the Kirkland Municipal Court

judge and the City prosecutor acknowledged that the recording may have been
unlawful. Von der Burg's admissions are insufficient to establish liability under the
Privacy Act, unless the recorded conversation was also "private." Clark, 129
Wn.2d at 224. Moreover, because there is no evidence that either the Kirkland

Municipal Court judge or the City prosecutor considered whether the recorded
conversation was "private," their conclusions as to the lawfulness ofthe recording
are of no help to Lane. Thus, the evidence from Kirkland Municipal Court is, by
itself, inadequate to establish that Lane conducted a reasonable inquiry into the
factual or legal basis for her claim. Without some evidence that Lane conducted
an independent inquiry into whether the recorded conversation was "private," as
that term is defined in case law, she cannot show that she conducted a


                                          12
No. 69928-8-1/13


reasonable inquiry into the factual or legal basis for her claim. The trial court did

not err in concluding that Lane had failed make such a showing.

                              Attorney Fees on Appeal

       FCB and von der Burg claim that this appeal is frivolous and request

attorney fees and costs incurred in its defense. RAP 18.1 (a); In re Recall

Charges Against Feetham, 149 Wn.2d 860, 72 P.3d 741 (2003). An appeal is

frivolous if there are "'no debatable issues upon which reasonable minds might

differ, and it is so totally devoid of merit that there was no reasonable possibility"'

of success. |g\ (quoting Millers Cas. Ins. v. Briggs. 100 Wn.2d 9, 15, 665 P.2d

887 (1983)).

       With respect to Lane and Magee's first issue—the trial court's denial of
oral argument on the CR 11 motions—we find no debatable issues. By court rule,
the trial court had discretion to deny their request for oral argument on the

motions. And it is plain from the record that due process was served in this case

because Lane and Magee received notice and ample opportunity to be heard on

the motions.

       As to the second issue—the trial court's imposition of CR 11 sanctions—

we find no reasonable possibility of success on appeal. To succeed, Lane and

Magee needed to establish that there was a factual and legal basis for the claim
and Magee undertook a reasonable pretrial inquiry to establish the claim. But, as
stated above, no reasonable person would have concluded that the conversation

at issue here was private within the meaning of the Privacy Act. Moreover,

Magee offered no evidence whatsoever—either at trial or on appeal—that he
undertookthe required inquiry into the factual and legal basis of this claim.
                                           13
No. 69928-8-1/14


      We conclude that this appeal lacks merit and is frivolous and grant FCB

and Von der Burg's request for attorney fees and costs on appeal, subject to

compliance with RAP 18.1.

      Affirm.




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WE CONCUR:




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