Defense attorneys love the words “case dismissed.” Filing a case right before the statute of limitations runs, in a court lacking jurisdiction, often yielded this satisfying result. Until now. Banowski v. Guy Backstrom, DC, — P.3d —-, 2019 WL 3333172 (2019), dissects the controversial issue and concludes courts of limited jurisdiction now have the capability of transferring a case to a court with proper jurisdiction instead of ordering dismissal for lack of jurisdiction. The Washington Supreme Court interpreted the meaning of court rule CRLJ 14A(b), and held the rule abrogates the opposing common law rule of dismissal.

Background

Washington superior courts are courts of general jurisdiction. Washington district courts are courts of limited jurisdiction, with a damages cap of $100,000 for civil cases. Plaintiff, acting pro se, filed her case in district court on the last day of the statute of limitations, seeking in excess of $100,000. A month and a half later, an attorney appeared on Plaintiff’s behalf and moved to transfer the case to superior court.

CRLJ 14A(b) states, “When any party in good faith asserts a claim in an amount in excess of the jurisdiction of the district court or seeks a remedy beyond the jurisdiction of the district court, the district court shall order the entire case removed to superior court.” Defendant pointed to the drafters’ comment amending the rule to its current form, which states in part: “Plaintiffs can file in the district court knowing that if a basis for claiming damages in excess of the jurisdictional limit of the district court should arise after they have filed their complaint, then they will have the opportunity to transfer their case to the superior court.”

In turn, defendant interpreted the rule as follows: If plaintiff had filed her case believing her damages were $50,000 and subsequently learned they were much more, the rule would permit her to remove her claim to superior court to seek damages in excess of $100,000. However, because plaintiff’s claim exceeded the jurisdictional limit from the start, defendant urged the court to dismiss.

Plaintiff asserted the rule’s history was immaterial, but nonetheless actually supported her position. She pointed out defendant was relying on a comment directed towards a prior version of the drafters’ proposed amendment to the rule. The drafters ultimately submitted a different version of the rule – the version of the rule as it exists today.

The district court dismissed the case. Plaintiff appealed in superior court and asserted the same arguments. Defendant also asserted his same arguments, but included CRLJ 12(h)(3) which states, “Whenever it appears . . . that the court lacks jurisdiction of the subject matter, the court shall dismiss the action.” The superior court heard argument and affirmed the district court’s dismissal.

Plaintiff then moved the Court of Appeals for discretionary review. The Court of Appeals granted limited review “to address the issues raised by CRLJ 14A(b) and its relationship with other rules and statutes, including CRLJ 12(h)(3) and CRLJ 82.” The Court of Appeals affirmed the previous decisions, emphasizing the Washington Constitution gives the legislature responsibility for determining the jurisdiction of district courts. The court reasoned the opposite conclusion “would greatly undercut the [constitution’s] intentional divide [between district courts and superior courts] to allow a plaintiff to ignore the district court amount-in-controversy limitation and force a transfer even though she demanded an amount over the district court limit.”

Holding

The Washington Supreme Court granted de novo review of the legal issues. The court accepted the parties’ acknowledgment that the district court lacked jurisdiction over plaintiff’s case, without deciding whether the parties were correct. The court found CRLJ 14A(b), and not CRLJ 12(h)(3), applied in this case. The court reasoned: First, CRLJ 14A(b) is the more recently amended rule. Second, CRLJ 14A(b) is more consistent with the principles underlying the rules.

The court held, by legislative design, a court lacking the power to hear and determine a case nonetheless has the power to transfer that case to the appropriate court. The court further held, although the district court may have lacked the power to hear and determine plaintiff’s claim under statutory law, it did not necessarily lack the power to transfer the case.

The court rejected the assertion that court rules only apply after a court has definitively acquired subject matter jurisdiction. The court held court rules apply to cases even when it is not yet certain the court has subject matter jurisdiction due to the amount in controversy.

Defendant argued application of CRLJ 14A(b) would violate article IV, section 10 of the Washington Constitution. He also argued applying CRLJ 14A(b) would undermine article IV’s division of authority between the superior courts and the district courts.

The court firmly stated, “Our rules have the force of law.” It then reasoned, if a conflict arises between statute and court rule, attempts to harmonize and effectuate both will be attempted. Absent harmony, the court rule will prevail in procedural matters and the statute will prevail in substantive matters. The court found CRLJ 14A(b) to unquestionably be a procedural rule. Accordingly, the court had authority to adopt CRLJ 14A(b), which now has the force of law.

Takeaway

In this situation, the district court does not actually make a ruling when confronted with this issue; it merely transfers the case to the superior court. Transferring, rather than dismissing, recognizes the superior jurisdiction of the superior court and places the dispute before the correct tribunal. Under CRLJ 14A(b), the district court here did have such power and was obligated to exercise it.

Michael Kutzner is an Associate at TYSON & MENDES, LLP, and represents individuals and business in a wide variety of civil litigation matters, including general liability and personal injury litigation.

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