IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

MWW, PLLC, dba MORAN WINDES No. 68154-1-1 AND WONG, PLLC; and MORAN & KELLER, PLLC, its successor, DIVISION ONE Appellants, v. RYAN and JANE DOE SMITH, and the UNPUBLISHED marital community composed thereof; JOHN and JANE DOE GUARINO, and FILED: March 18.2013 the marital community composed thereof; all individually and as successors in interest to INTERACTIVE OBJECTS, INC.; YARMUTH, WILSDON CALFO, PLLC; RICHARD and JANE DOE YARMUTH, and the marital community composed thereof; and the proceeds of the legal malpractice settlement paid by or on behalf of ro CAIRNCROSS & HEMPELMANN, P.S., —icz a Washington professional service "•->, '- —'_.• _Ba i M corporation, in res, J3- ^O o~- -n CO —-Z ~~G. Respondents. ..-=• -T:." :e» i-irjc _>-- „,-' _—• —j— CO •ZT>^ * " — u~ Cox, J. — We must again decide the rights of competing creditors to th^ settlement proceeds arising from a prior legal malpractice action commenced in March 2006. We handed down our prior decision in an appeal in that case on June 30, 2008 in Smith v. Moran, Windes &Wong, PLLC.1 1 145 Wn. App. 459, 187 P.3d 275 (2008). review denied, 165Wn.2d 1032,203 P.3d281 (2009). No. 68154-1-1/2 The primary issue that is now before us is whether the trial court properly dismissed the claims in this new action, following our reversal and remand to the trial court for further proceedings in the prior malpractice action. We hold that MWW, PLLC (the "law firm") fails to state a claim for conversion upon which relief could be granted. And the conversion claim that the law firm asserts is also barred by the three year statute of limitations. On appeal, the law firm has abandoned the foreclosure of attorney's lien claim asserted below. Thus, dismissal of that claim is not properly before us. Accordingly, the trial court properly dismissed both claims in this action. We also hold that this appeal is frivolous. Thus, Yarmuth Wilsdon Calfo PLLC, Richard and Jane Doe Yarmuth, (collectively "Yarmuth"), and Ryan and Jane Doe Smith, and John and Jane Doe Guarino are entitled to an award of reasonable attorney fees. We affirm and remand to the trial court for a determination of the amount of reasonable attorney fees to be assessed against the law firm. Much of the background for this case is discussed in our prior decision. There, we held that a lien for attorney fees against any settlement proceeds arose at the commencement of that action in March 2006.2 We did not address whether any contractual lien for attorney fees existed.^[3] We remanded for a determination ofthe amount of the statutory attorney's lien4 No. 68154-1-1/8 grant ofa motion for summary judgment.^[18] Thus, we do not address this new argument.

Statute of Limitations

The law firm's conversion claim is also barred by RCW 4.16.080(2), the three year statute of limitations. For this additional reason, the dismissal of this claim was proper.

Under RCW 4.16.080(2), the statute of limitations to bring a suit for conversion is three years. "An action for taking, detaining, or injuring personal property, including an action for the specific recovery thereof, or for any other injury to the person or rights of another" shall be commenced within three years.^[19] This three year period begins to run from "'the time when plaintiff first became entitled to sue.'"20

A threshold issue is what date of accrual applies to the law firm's conversion claim. Here, the record shows that this claim accrued from the date the law firm sought prejudgment interest. This is the date on which the law firm believed its claim for conversion was liquidated. As Yarmuth correctly argues,21 according to the law firm's own Complaint, that date was "on the date the No. 68154-1-1/9

defendants first received the Settlement proceeds in 2007 and or the date they first misappropriated the trust funds from the IOLTA account."22

This allegation, which centers on 2007 as the relevant date for accrual of the conversion claim, is consistent with the following statement in our prior opinion on these settlement proceeds: "We note that at oral argument counsel for Smith and Guarino represented to this court that settlement proceeds have been paid to their clients."23 This representation shows that at the time of oral argument of the prior case, the settlement proceeds had been disbursed to Smith and Guarino. Oral argument of the prior case was before the June 30, 2008 filing of our earlier decision. Thus, the law firm's representation to this court during oral argument makes clear that the conversion claim accrued, at the latest, before June 30, 2008.

Using either the 2007 date, as stated in the law firm's own complaint, or any date before June 30, 2008, the date of our prior decision, as the time of accrual of the conversion claim, the result is the same. The conversion claim accrued more than three years before the commencement of this action on July 18, 2011. Therefore, the law firm's conversion claim is also barred under RCW 4.16.080(2)'s three year statute of limitations.

The law firm does not address the accrual date of its conversion claim. Rather, without citation to legal authority, the law firm argues that the first date that it could have filed this action for conversion was March 25, 2009. That date, No. 68154-1-1/11

instead, focused solely on its conversion claim, which we addressed previously in this opinion. For these reasons, we need not address whether the trial court's dismissal of that cause of action was improper.

JUDICIAL ESTOPPEL

The law firm also argues that the respondents are judicially estopped from arguing that the statute of limitations bars its conversion claim. This argument has no merit.

'"Judicial estoppel is an equitable doctrine that precludes a party from asserting one position in a court proceeding and later seeking an advantage by taking a clearly inconsistent position.'"27 "[T]he 'heart ofthe doctrine [of judicial estoppel] is the prevention of inconsistent positions as to facts. It does not require counsel to be consistent on points of law.'"28 Though not exhaustive, three central questions guide a trial court's determination of whether to apply judicial estoppel:

(1) whether a party's current position is inconsistent with an earlier position, (2) whether judicial acceptance of an inconsistent position in the later proceeding will create the perception that the party misled either the first or second court, and (3) whether the party asserting the inconsistent position will obtain an unfair advantage or impose an unfair detriment on the opposing party if not estopped.[29] No. 68154-1-1/12

A lower court's application of the doctrine of judicial estoppel is reviewed for abuse ofdiscretion.^[30] The lower court here rejected the law firm's judicial estoppel argument and dismissed the law firm's claims.

As noted above, an appellate court reviews a CR 12(b)(6) dismissal that looks to documents outside the pleadings as it would an order for summary judgment.^[31] It reviews a summary judgment order de novo.^[32] Here, the law firm argues that Smith, Guarino, and Yarmuth are estopped from arguing that the running of the statute of limitations bars the law firm's conversion claim. The law firm's claim rests on the argument that all respondents previously represented to this court that the statute of limitations did not preclude its refiling its attorney's fee lien claim. Thus, according to the law firm, Yarmuth, Smith, and Guarino are estopped from now arguing that the statute of limitations precludes the law firm's conversion claim. This argument is incorrect for a number of reasons.

First, any factual assertions made by Smith and Guarino cannot estop Yarmuth from making arguments here because it was not a party in the prior action. Judicial estoppel is a relatively flexible doctrine and "may be invoked by a stranger to the first suit against a party who was a party to, or a witness in, the first suit."33 Here, the law firm invokes the doctrine against neither a party nor a No. 68154-1-1/13

witness in the previous suit. While Yarmuth represented Smith and Guarino in the prior action, it was neither a party to nor a witness in that action. Consequently, it is not bound by Smith and Guarino's arguments there. Second, even if Yarmuth was bound by Smith and Guarino's prior factual contentions, Smith and Guarino did not allege any factual position with respect to conversion in the previous litigation that they contradict here. They could not, in fact, because a claim for conversion was not at issue there. Thus, nowhere in the prior litigation did Smith and Guarino explicitly rely on the statute of limitations not having run on the law firm's conversion claim. Even if a conversion claim were not at issue here, in the earlier litigation Smith and Guarino did not rely on the running of the statute of limitations as to the law firm's attorney's lien. In the previous litigation, Smith and Guarino stated that the law firm "fail[ed] to make any showing . . . why, in this instance, the dismissal without prejudice constitutes a final judgment. . . ."34 It is true that when the statute of limitations has run on a claim, a dismissal without prejudice as to that claim is appealable as a matter of right.^[35] Thus, by inference, Smith and Guarino did indicate that the law firm itself failed to allege that the statute of limitations had run. But the law firm's failure to allege a particular fact is not equivalent to Smith and Guarino's reliance on that fact. Thus, neither Smith and No. 68154-1-1/14

Guarino nor Yarmuth are judicially estopped from arguing a statute of limitations defense to the law firm's claims here. The law firm relies on Johnson v. Si-Cor, Inc.36 It argues that because privity of the parties is inapplicable to judicial estoppel, Yarmuth is bound by any factual argument made by Smith and Guarino in the prior case. But Si-Cor does not support such a contention. There, the court concluded that "the doctrine [of judicial estoppel] may be applied even if the two actions involve different parties."37 But the court was not indicating that judicial estoppel may be applied against a person uninvolved in a prior action. In Si-Cor, the court considered whether Johnson was judicially estopped from suing Si-Cor, Inc. because he failed to reveal this claim in his prior bankruptcy proceedings.38 Thus, Si-Cor, a new party, attempted to judicially estop Johnson, a party in the previous action, from making an argument it claimed he had contradicted in his previous litigation.39 Here, in contrast, the law firm, a party in the previous action, is attempting to judicially estop Yarmuth from making an argument a different party made in an earlier proceeding. There is no support for such an expansion of the judicial estoppel doctrine. The law firm also argues that this court's denial of discretionary review in the previous proceedings demonstrates that Smith, Guarino, and Yarmuth 36 107 Wn. App. 902, 28 P.3d 832 (2001). 37 id at 907-08. 38 id at 904-05. 39 id No. 68154-1-1/15

"clearly argued in the appellate court that [the law firm] could not bring the appeal because [the law firm] could merely refile and have its claim accepted."40 It did not. This court's denial of discretionary review stated that "the appellant [the law firm] does not assert that a statute of limitations would bar refiling the [litigation]."41 This language demonstrates that, to the extent the statute of limitations question arose, it was the law firm's failure to assert a legal statute of limitations argument, rather than Smith's and Guarino's assertion of this argument. Thus, Smith and Guarino are not judicially estopped from arguing that the statute of limitations bars the law firm's claims.

ATTORNEY'S FEE LIEN AND QUANTUM MERUIT

In its Reply Brief, the law firm argues for the first time that it is "at least entitled to quantum meruit" based on its attorney's fee lien claim.

While the law firm pleaded claims for conversion and "foreclosure on attorneys [sic] fee lien" in its complaint, it made no quantum meruit argument in its opening brief on appeal. Arguments first raised in a reply are not generally addressed.^[42] Accordingly, we do not address this tardy claim. ATTORNEY FEES

Yarmuth, Smith, and Guarino all request attorney fees under RAP 18.9. because this action is frivolous. We agree.

RAP 18.9(a) "permits an appellate court to award a party attorney fees as sanctions, terms, or compensatory damages when the opposing party files a No. 68154-1-1/16

frivolous appellate action."43 "'[A]n 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 reversal.'"44 The court considers the record as a whole.45 "All doubts as to whether the appeal is frivolous should be resolved in favor of the appellant."46 Here, the sole claim that is properly asserted on appeal is that the trial court improperly dismissed the law firm's conversion claim. The law firm abandoned the foreclosure of lien claim that it pleaded below by failing to argue that claim on appeal.

The conversion claim is frivolous. Neither the pleadings nor this record supports the assertion of this claim, for the reasons we previously explained in this opinion.

Both the allegations in the law firm's complaint as well as the reference in this court's prior opinion to representations made at oral argument in that case show when the conversion cause of action accrued. The law firm makes no contrary argument regarding when accrual occurred. Thus, the statute of limitations on the conversion claim plainly ran well before the July 18, 2011 commencement of this action.

No. 68154-1-1/17

Rather than deal with the uncontested fact of when the cause of action accrued, the law firm argues, without citation to authority, that it timely commenced this case on the basis of when the mandate was issued in the prior case. How issuance of the mandate in the prior case would have precluded commencing an action for conversion against Yarmuth, who was not a party to the prior action, remains unexplained. This remarkable argument based on issuance of the mandate makes neither legal nor practical sense.

For these reasons, we conclude this appeal is frivolous. An award of attorney fees is proper, subject to compliance with governing rules. We remand to the trial court for a determination of the amount of fees on appeal to be awarded to Yarmuth, Smith, and Guarino.^[47]

We affirm the orders before us on appeal.

6m{J? WE CONCUR: f<-4td{ C