      IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

KORTNEY SCHAAF, a single                 )
individual,                              )      No. 75335-5-1
                                         )
                    Appellant,           )      DIVISION ONE
                                         )
      v.                                 )
                                         )      UNPUBLISHED OPINION
RETRIEVER MEDICAL/DENTAL                 )
PAYMENTS INC., a New York                )
corporation,                             )
                                         )
                    Respondent.          )      FILED: July 3, 2017


      LEACH, J. — After a contract dispute about compensation, Retriever

Medical/Dental Payments Inc. filed an action against Kortney Schaaf in New York

state. Schaaf later filed an action against Retriever in Washington. Schaaf

appeals the trial court's dismissal of her Washington action under the priority of

action rule. Because adjudication of Retriever's claims would bar as res judicata

Schaafs claims, the trial court properly dismissed her claims under the priority of

action rule. We affirm.

                                     FACTS

      In March 2011, Retriever, a New York corporation, hired Schaaf, a

resident of the state of Washington, to work as a sales representative. In

connection with her position, Schaaf signed a number of representative
No. 75335-5-1 /2



agreements and confidentiality and noncompetition agreements. Some of those

agreements contained a choice of forum clause that chose either New York or

Texas as the designated forum.

          In September 2015, Schaaf violated a Retriever policy, and Retriever took

disciplinary action against her. Retriever later terminated their contractual

relationship.

          On October 13, 2015, Retriever started a lawsuit against Schaaf in the

state of New York by filing a summons with notice. On December 18, Schaaf

started a lawsuit against Retriever by filing a complaint in Snohomish County

Superior Court. On December 23, Retriever filed a complaint in its New York

action.

          Retriever's New York lawsuit asserts three causes of action. First, it

claims "Schaaf was in breach of the terms of the Agreements resulting in

damages to Retriever." Second, it seeks return of compensation that Retriever

claims it mistakenly paid to Schaaf. Third, it asks for a declaratory judgment that

Schaaf was an independent contractor and not an employee of Retriever.

          Schaaf's Washington lawsuit asserts six causes of action: (1) failure to

comply with RCW 49.48.210 in withholding payments due, (2) retaliation,

(3) wrongful termination in violation of Washington public policy, (4) violation of



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Washington's Consumer Protection Act (CPA),1 (5) equitable estoppel, and

(6) declaratory judgment that she was an employee of Retriever and not an

independent contractor.

       In March 2016, Retriever moved to dismiss Schaaf's Washington action

under the priority of action rule and for lack of jurisdiction. The superior court

rejected Retriever's jurisdiction argument but agreed with its priority of action

argument. Thus, it dismissed Schaaf's action subject to the following condition:

       The Court will stay these proceedings pending the outcome of
       Plaintiffs (Schaaf's) Motion to Dismiss for forum non conveniens in
       New York. If the court in New York denies that motion, it is the
       ruling of this Court that the action in this cause should not proceed
       under the doctrine of Priority of Action. If the N.Y. Court grants the
       motion to dismiss for forum non conveniens, the action may
       proceed under this cause [number].

The New York court later denied Schaaf's motion to dismiss for forum non

conveniens.

       Schaaf challenges the trial court's decision to dismiss her appeal under

the priority of action rule.

                                    ANALYSIS

       Schaaf claims that the trial court should not have dismissed her claims

under the priority of action doctrine. We disagree.




       1 Ch.   19.86 RCW.
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       Under the priority of action doctrine, the court that "first gains jurisdiction of

a cause retains the exclusive authority to deal with the action until the

controversy is resolved."2 Because the trial court's application of the priority of

action doctrine presents a question of law, this court reviews the trial court's

decision de novo.3

       Before a court applies the priority of action rule, it decides whether the

actions possess identity of subject matter, relief, and parties.4 In practice, courts

do not apply these elements inflexibly.5 "Rather, courts have looked beyond

these elements and to the policy behind the doctrine."6 Washington courts have

stated that the rule's purpose is "to determine whether the 'identity' of the actions

is 'such that a decision in one tribunal would bar proceedings in the other tribunal




       2 Sherwin v. Arveson, 96 Wn.2d 77, 80, 633 P.2d 1335 (1981).
       3 Atl. Cas. Ins. Co. v. Or. Mut. Ins. Co., 137 Wn. App. 296, 302, 153 P.3d
211(2007) ("As the priority of action rule involves jurisdiction and res judicata
principles, de novo review is appropriate."); State ex rel. Evergreen Freedom
Found. v. Wash. Educ. Ass'n, 111 Wn. App. 586, 605, 49 P.3d 894 (2002)
(applying de novo review to the trial court's decision not to allow a party to
amend its complaint, which appellate courts normally review for abuse of
discretion, because the trial court based its decision on the priority of action legal
doctrine).
       4 Am. Mobile Homes of Wash., Inc. v. Seattle-First Nat'l Bank, 115 Wn.2d
307, 317, 796 P.2d 1276 (1990).
       5 Bunch v. Nationwide Mut. Ins. Co., 180 Wn. App. 37, 41, 321 P.3d 266
(2014).
       6 Bunch, 180 Wn. App. at 41-42.
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because of res judicata."7 The doctrine "tends to prevent unseemly, expensive,

and dangerous conflicts of jurisdiction and of process."8

      First, Schaaf claims that because she filed her complaint in Washington

before Retriever filed its complaint in New York, Washington first gained

jurisdiction. But she does not dispute that Retriever filed a summons with notice

in New York before she started her Washington action. In New York, a party can

start a lawsuit by filing a summons with notice.8 Thus, Retriever started its

lawsuit in New York before Schaaf filed hers in Washington. This means that

New York first gained jurisdiction.

       Next, Schaaf asserts that the priority of action rule does not bar her

claims. Retriever contends that the priority of action rule bars Schaafs claims

because they are compulsory counterclaims to Retriever's claims. Federal




       7 Bunch, 180 Wn. App. at 42 (quoting Evergreen Freedom Found., 111
Wn. App. at 607); see also Sherwin, 96 Wn.2d at 80 (stating that the doctrine "is
generally applicable only when the cases involved are identical as to subject
matter, parties and relief. This identity must be such that a final adjudication of
the case by the court in which it first became pending would, as res judicata, be a
bar to further proceedings in a court of concurrent jurisdiction.").
        8 Sherwin, 96 .Wn.2d at 80.
        9 N.Y. C.P.L.R. § 304(a) ("An action is commenced by filing a summons
and complaint or summons with notice."); see also Martin v. Martin, 38 Misc. 2d
836, 837, 238 N.Y.S.2d 749 (Sup. Ct. 1963) ("The summons 'is always of prime
importance,' being 'the effective paper upon which jurisdiction is founded."
(quoting Mishkind-Feinberg Realty v. Sidorsky, 189 N.Y. 402, 407, 82 N.E. 448
(1907))).
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courts have used this logic in applying a similar priority rule.1° And, while no

Washington court has yet applied the compulsory counterclaim rule in a priority

of action analysis, we agree with this approach because it furthers the purpose of

the doctrine.11

         Unlike Washington, New York does not have a codified compulsory

counterclaims rule. But the principle does exist in New York common law.12 In

New York, "once a claim is brought to a final conclusion, all other claims arising

out of the same transaction or series of transactions are barred, even if based

upon different theories or if seeking a different remedy."13

         Here, all of Retriever's and Schaaf's claims arise out of the same

transaction or series of transactions because they all relate to their contractual

relationship. Retriever's claims allege breach of contract, relate to payment of

compensation under the contract, and ask the court to clarify the parties'

relationship under the contract. Schaaf's claims likewise relate to the contract.


         10   Computer Assocs. Intl, Inc. v. Altai Inc., 893 F.2d 26, 28-29 (2d Cir.
1990).
         11 SeeEvergreen Freedom Found., 111 Wn. App. at 607.
        12 Henry Modell & Co. v. Minister, Elders & Deacons of Reformed
Protestant Dutch Church of City of N.Y., 68 N.Y.2d 456, 461, 502 N.E.2d 978,
510 N.Y.S.2d 63 (1986) ("While New York does not have a compulsory
counterclaim rule, a party is not free to remain silent in an action in which he is
the defendant and then bring a second action seeking relief inconsistent with the
judgment in the first action by asserting what is simply a new legal theory."
(citation omitted)).
        13 O'Brien v. City of Syracuse, 54 N.Y.2d 353, 357, 429 N.E.2d 1158, 445
N.Y.S.2d 687 (1981).
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No. 75335-5-1 /7



Her wrongful termination and retaliation claims involve termination of their

contractual relationship. Her equitable estoppel and RCW 49.48.210 claims

relate to payment of compensation under the contract.14 Her declaratory

judgment claim relates to her status under the contract. Finally, her CPA claim

alleges that Retriever wrongfully required Schaaf to sign a contract that required

her to identify herself as an independent contractor. Because the claims of both

parties arise out of the same transaction, under New York law, Schaaf's claims

are effectively compulsory counterclaims in the New York lawsuit.15 Thus, a

decision by the New York court would bar Schaafs Washington claims.16

       Schaaf asserts that the convenience of witnesses makes Washington a

better location for litigating this dispute. Courts have considered such factors

relevant to equitable application of the doctrine but only where the res judicata

effect of the first action on the second is uncertain because the identity of parties

is not exact.17 Here, Schaaf and Retriever agree that the identity of the parties is


       14 RCW 49.48.210 provides notification requirements when an employer
decides to withhold wages due to overpayment.
       15 See O'Brien, 54 N.Y.2d at 357.
       16 Cf. Chew v. Lord, 143 Wn. App. 807, 181 P.3d 25 (2008) (holding that
summary dismissal of claims brought in Washington was proper because they
arose from the same transaction or occurrence as claims that had been
previously litigated in Nevada and were thus compulsory counterclaims in that
action).
       17 Am. Mobile Homes, 115 Wn.2d at 321-22 (considering the existence of
any forum agreement between the parties, the convenience of witnesses, and
the general interests of justice because there was not identity of parties); Atl.
Cas. Ins. Co., 137 Wn. App. at 302.
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No. 75335-5-1/8



the same in both actions. Thus, because the res judicata effect of the New York

case warrants dismissal, we need not look to this factor to determine whether the

rule should apply here.18

       Schaaf also asserts that the parties should litigate her claims in

Washington because this state has a greater interest in the matter. She cites no

authority to support this argument, however. None of the cases she cites discuss

states' interests. She does not show that state interest is a relevant factor in

considering whether to apply the priority of action rule. Similarly, she asserts that

the interests of justice require litigation of at least her CPA claim in Washington

because public interest impact is an element of a CPA claim." She argues that

because the CPA claim alleges that Retriever might harm other Washington

residents in a similar fashion, agreement that New York law governs their

relationship cannot preclude her Washington CPA claim. Again, she cites no

authority for this argument. This court need not consider issues that a party does

not support with citation to legal authority.20 We decline to consider these

arguments.



       18 Cf. Am. Mobile Homes, 115 Wn.2d at 321 (considering other factors in
addition to the identities because the res judicata effect was questionable due to
the fact that the parties to the actions were not identical).
       19 Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 105
Wn.2d 778, 784, 719 P.2d 531 (1986).
       20 Cowiche Canyon Conservancy v. Bosley, 118 Wn.2d 801, 809, 828
P.2d 549 (1992).
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       Finally, Schaaf asserts that the priority of action rule should not apply here

because Retriever filed its lawsuit in New York as a "preemptive strike." To

support this argument, she cites American Mobile Homes of Washington, Inc. v.

Seattle-First National Bank.21 But we distinguish that case. In American Mobile

Homes, the court did consider it likely that the first action was filed as a so-called

preemptive strike to avoid the venue named in the parties' agreement.22 But in

this case, the most current agreements either contain no choice of forum clause

or identify New York as the chosen forum. Thus, it is unlikely that Retriever filed

in New York as a preemptive strike to avoid a choice of forum clause. Schaaf

provides no evidence to show that Retriever had any improper motive for filing its

New York action that might justify modifying our priority of action analysis.

                                   CONCLUSION

       Because Schaaf's claims arise out of the same transaction as Retriever's

claims, resolution of Retriever's case would have a preclusive effect on Schaafs




       21 115Wn.2d 307, 796 P.2d 1276 (1990).
       22 Am. Mobile Homes, 115 Wn.2d at 320-21.
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No. 75335-5-1/ 10



claims. Thus, the trial court properly dismissed them under the priority of action

rule. We affirm.




WE CONCUR:




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