LAMPSON UNIVERSAL RIGGING v. WPPSS

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Docket Number

No. 51619-7.

Attorney(S)

Raekes, Rettig, Osborne, Forgette O'Donnell, by Diehl R. Rettig and James E. Hurson, for petitioner. Stan J. Bensussen and Ray R. Whitlow, for respondent.

Judges

ANDERSEN, J.

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Smart Summary

Factual and Procedural Background

Lampson Universal Rigging, Inc. obtained partial summary judgment against the Washington Public Power Supply System (WPPSS) for $667,807.71 in principal and $203,525.83 in prejudgment interest. WPPSS filed notices of supersedeas and asserted that the judgment was stayed without a bond under RCW 4.92.080. [1]

The trial court denied Lampson's motion to require a supersedeas bond or other security. The Court of Appeals sustained that ruling. After Lampson attempted enforcement through a demand and a writ of garnishment, the trial court quashed the writ. The Court of Appeals denied Lampson's motion to modify its ruling, and the Washington Supreme Court granted discretionary review. [2][3]

Legal Issues Presented

Whether WPPSS was required to post a supersedeas bond or other security to stay enforcement of the judgment pending appeal. [4][5]
Whether the bond requirement should depend on a municipal corporation's power to generate revenue through taxation. [6]

Arguments of the Parties

Lampson's Arguments

Lampson sought to require WPPSS to post a supersedeas bond or other security. [2]
Lampson urged the court to adopt a test under which the bond requirement would turn on whether a municipal corporation had the power to tax. [6]

WPPSS's Position

WPPSS asserted that RCW 4.92.080 exempted it from posting a bond and that its notice of supersedeas stayed enforcement pending appeal. [1][7]
WPPSS did not contest that Lampson was not required to attempt enforcement before the issue could be reviewed. [8]

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Malo v. Anderson	Support for the effect of a supersedeas and the stay of enforcement.	The court cited it in explaining that no enforcement attempt was required before review. [9][10]
Ryan v. Plath	Support for the procedural treatment of supersedeas.	The court cited it alongside Malo regarding the ripeness issue. [9]
Seventh Elect Church v. Rogers	Purpose of a supersedeas bond, including delaying execution while protecting the judgment creditor.	The court cited it in describing the primary purpose of a supersedeas bond. [7][10]
In re Estates of Sims	Principle that an appellant need not supersede a judgment from which it appeals.	The court cited it in distinguishing the decision to appeal from the decision to stay enforcement. [7][11]
Continental Ill. Nat'l Bank Trust Co. v. Washington	Characterization of WPPSS as a political subdivision of the State.	The court cited it in support of concluding that WPPSS was a political subdivision. [12][13]
Hockley v. Hargitt	A political subdivision need not post a bond under RCW 4.92.080; imposing one on a political subdivision while exempting the State would be anomalous.	The court relied on this reasoning to apply the statutory exemption to WPPSS. [14][15]
Campbell v. Bellevue	Agreement with the bond-exemption principle stated in Hockley.	The court cited it as supporting authority. [16]
Rutcosky v. Tracy	An order freezing earmarked funds was not equivalent to requiring a supersedeas bond.	The court rejected Lampson's reliance on Rutcosky as support for a taxation-based test, explaining that the case addressed a unique situation and did not establish that test. [17][18][19]

Court's Reasoning and Analysis

The court explained that a supersedeas bond generally delays execution while protecting the judgment creditor's ability to collect. Although an appellant need not supersede a judgment, a party seeking to stay enforcement generally must post security unless exempt. A party claiming an exemption must file a notice of supersedeas, which stays enforcement as if a bond had been posted. [7]

RCW 4.92.080 provides that no bond is required of the State, and CR 65(c) expressly extends that protection to municipal corporations and political subdivisions. [20]

The court determined that WPPSS was both a municipal corporation and a political subdivision of the State. [12][21][13]

Relying on Hockley and Campbell, the court reasoned that exempting the State from bonding while requiring its political subdivisions to bond would be anomalous. The statutory and rule language contained no qualification based on a municipality's taxing power. [14][15][16][22]

The court rejected Lampson's proposed taxation-based test because Rutcosky did not establish such a rule; it merely held that a particular order freezing funds was not the equivalent of a supersedeas bond. [6][17][18][19]

The court also observed that requiring WPPSS to post a bond could interfere with its public functions and deter appeals, and that taxing authority does not necessarily guarantee payment of all claims. [23]

Because WPPSS filed a notice of supersedeas and was exempt from the bond requirement, the trial court correctly refused to require additional security. [7][24]

Holding and Implications

Holding: A municipal corporation or political subdivision of Washington may stay enforcement of a judgment pending appeal by filing a notice of supersedeas without posting a bond or other security. The Supreme Court affirmed the trial court and Court of Appeals. [25][26][27][22][28]

The direct effect was that WPPSS's notice of supersedeas validly stayed enforcement of Lampson's judgment without a bond. The opinion applied the established statutory and precedential rule to WPPSS and did not discuss broader consequences beyond the bond requirement. [8][24][28]

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LAMPSON UNIVERSAL RIGGING, INC., Petitioner, v. WASHINGTON PUBLIC POWER SUPPLY SYSTEM, Respondent.

[1] Supersedeas — Municipal Corporations — Supersedeas Bond — Necessity. Under RCW 4.92.080 and CR 65(c), a municipal corporation or other political subdivision of the State, regardless of whether it has the power to tax, can stay enforcement of a judgment pending appeal by filing a notice of supersedeas; a supersedeas bond or other security is not required.

ANDERSEN, J.

FACTS OF CASE

At issue in this case is whether Washington Public Power Supply System (WPPSS) must post a supersedeas bond or other security to stay enforcement of a judgment pending appeal.

On September 13, 1984, Lampson Universal Rigging, Inc., obtained a partial summary judgment against WPPSS. The judgment awarded Lampson the principal sum of $667,807.71 and prejudgment interest of $203,525.83. WPPSS immediately filed a notice of supersedeas and asserted that pursuant to RCW 4.92.080, the judgment was superseded without bond pending appeal. WPPSS filed a second notice of supersedeas when the trial court denied its motion to vacate.

On September 17, 1984, Lampson moved to require WPPSS to post a supersedeas bond or other security to stay enforcement of the judgment; the trial court denied that motion. Lampson then sought review by the Court of Appeals of the trial court's denial of its motion. On February 19, 1985, a Commissioner of that court entered a ruling sustaining the trial court's denial of Lampson's motion to require WPPSS to post security pending appeal, but in the same ruling also stated that "we need not reach the question of whether WPPSS must file a supersedeas bond to stay enforcement of a judgment because no enforcement has been attempted." This language gave Lampson the impression that the issue was not ripe for review. Lampson then attempted to enforce the judgment by making a demand upon WPPSS and by issuing a writ of garnishment. The trial court granted WPPSS' motion to quash the writ.

Lampson subsequently filed a motion to modify the Commissioner's ruling sustaining the trial court's denial of its motion to require a supersedeas bond. The Court of Appeals denied Lampson's motion, and we granted Lampson's petition for discretionary review.

Lampson originally assigned error to the implication in the Court of Appeals ruling that the supersedeas bond issue was not ripe for review until Lampson attempted enforcement of the judgment. WPPSS now does not contest Lampson's position that Lampson need not have attempted enforcement of the judgment. Filing of the notice of supersedeas by WPPSS stayed enforcement of the summary judgment pending appeal; no enforcement attempt was required.

See Malo v. Anderson, 76 Wn.2d 1, 5, 454 P.2d 828 (1969); Ryan v. Plath, 18 Wn.2d 839, 855, 140 P.2d 968 (1943).

One principal issue remains to be discussed.

ISSUE

Was WPPSS required to post a supersedeas bond pending appeal?

DECISION

CONCLUSION. If the State, or any municipal corporation or political subdivision thereof, appeals, a notice of supersedeas without bond is sufficient.

The primary purpose of a supersedeas bond is to delay execution of the judgment while ensuring that the judgment debtor's ability to satisfy the judgment will not be impaired pending appeal. An appellant is not obligated to supersede a judgment from which it is appealing; it must, however, post security if it desires to stay enforcement of an adverse judgment pending appeal, unless it is exempt from posting bond. A party claiming an exemption must file a notice of supersedeas, which stays enforcement of the judgment as though a bond were posted. WPPSS filed such a notice, asserting an exemption from posting a bond pursuant to RCW 4.92.080 and CR 65(c).

See Malo, at 5; Seventh Elect Church v. Rogers, 34 Wn. App. 105, 120, 660 P.2d 280 (1983).

In re Estates of Sims, 39 Wn.2d 288, 297, 235 P.2d 204 (1951).

RAP 8.1(b).

RAP 8.1(c).

RCW 4.92.080 provides that "[n]o bond shall be required of the state . . . for any purpose in any case in any of the courts of the state of Washington . . ." Furthermore, CR 65(c) provides that "[p]ursuant to RCW 4.92.080 no security shall be required of the State of Washington, municipal corporations or political subdivisions of the State of Washington." (Italics ours.)

[1] WPPSS is a municipal corporation. It is also a political subdivision of the State.

RCW 43.52.250, .360.

Continental Ill. Nat'l Bank Trust Co. v. Washington, 696 F.2d 692 (9th Cir.), appeal dismissed, 460 U.S. 1077, 76 L.Ed.2d 338, 103 S.Ct. 1762, reh'g denied, 461 U.S. 950, 77 L.Ed.2d 1309, 103 S.Ct. 2130 (1983).

As Hockley v. Hargitt, 82 Wn.2d 337, 347, 510 P.2d 1123 (1973) ruled:

The trial court correctly held that King County need not post a bond since RCW 4.92.080 exempts the state from posting a bond in any action. . . . It would be an anomaly to free the state from posting a bond while imposing such requirement upon its political subdivision whose life and authority derive from the state.

(Italics ours.)

Accord, Campbell v. Bellevue, 85 Wn.2d 1, 14, 530 P.2d 234 (1975).

There is no qualification or ambiguity in either RCW 4.92.080 or CR 65(c). If the State, or any municipal corporation or political subdivision of the State, appeals, a notice of supersedeas without bond is sufficient, and no appeal or supersedeas bond need be posted.

Lampson attempts to qualify this hitherto unequivocal rule by urging that we adopt a new test: "whether a municipal corporation is required to post a supersedeas bond turns on whether the municipal corporation has the power to generate revenue by exercising its power to tax."

Rutcosky v. Tracy, 89 Wn.2d 606, 612, 574 P.2d 382, cert. denied, 439 U.S. 930, 58 L.Ed.2d 323, 99 S.Ct. 317 (1978), cited by Lampson, is not authority for this new "test". In that case, in what we found was "a unique case", this court did no more than uphold a superior court order "freezing" earmarked funds in the control of a college. In that decision we made it as clear as words could:

We hold that the order is not the equivalent of requiring a supersedeas bond within the meaning of the statute.

(Italics ours.) Rutcosky, at 612.

WPPSS produces considerable energy for the Pacific Northwest, and in so doing helps protect the public's health, safety and welfare. Requiring such an entity to post a bond would have the dual effect of interfering with its ability to perform its public functions and deterring it from appealing matters such as this one. Furthermore, even when a public entity possesses the authority to tax, such authority is not necessarily a guaranty that all claims against it will be paid.

Here the trial court followed our established precedent and court rule in holding that a notice of supersedeas without bond was the proper procedure for WPPSS to follow. That ruling was entirely correct.

The ruling by the trial court is affirmed.

DOLLIVER, C.J., and UTTER, BRACHTENBACH, DORE, PEARSON, CALLOW, GOODLOE, and DURHAM, JJ., concur.