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Court of Appeals Division I
State of Washington

Opinion Information Sheet

			

       IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

PUGET SOUND ELECTRICAL                        )         No. 65740-2-I
WORKERS HEALTH TRUST AND                      )
VACATION PLAN; PUGET SOUND                    )         DIVISION ONE
ELECTRICAL WORKERS PENSION                    )
TRUST; IBEW LOCAL 46                          )
RETIREMENT ANNUITY TRUST; NO.                 )
IBEW LOCAL 46 APPRENTICESHIP                  )         UNPUBLISHED
AND TRAINING TRUST; and PUGET                 )
SOUND ELECTRICAL JOINT LABOR                  )         FILED: January 30, 2012
COMPLAINT FOR PROFESSIONAL                    )
COOPERATION TRUST,                            )
                                              )
                      Respondents,            )
                                              )
              v.                              )
                                              )
McKENZIE ROTHWELL BARLOW &                    )
KORPI, P.S.; SMITH McKENZIE                   )
ROTHWELL & BARLOW, P.S.,                      )
                                              )
                      Appellants,             )
                                              )
              and                             )
                                              )
MICHAEL H. KORPI; A. BRUCE                    )
McKENZIE; DAVID S. BARLOW; and 
CATHERINE A. ROTHWELL,                        )
                                              )
                      Defendants.             )
                                              )
                                              )
                                              )

       Cox, J.  --  McKenzie Rothwell Barlow & Korpi, P.S., and its predecessor,  

No. 65740-2-I/2

Smith McKenzie Rothwell & Barlow, P.S., (collectively, "the firm") appeal the 

judgment that imposes monetary liability on them for legal malpractice.  The 

malpractice claims arise from the firm's representation of the Puget Sound 

Electrical Workers Health Trust and Vacation Plan and other trusts ("the trusts").

We hold that the trial court correctly stated and applied the proper standard of 

care and properly determined that the firm breached that standard of care.  The 

trusts established that the breaches caused the damages imposed in this case.  

The findings on damages, including the award for the audit fee, are supported by 

substantial evidence.  We affirm.

       The International Brotherhood of Electrical Workers Local Union 46 

(Local 46) has collective bargaining agreements (CBAs) with the National 

Electrical Workers Puget Sound Chapter.  These agreements provide, among 

other things, that the electrical contractors who are signatories to the CBAs are 

required to contribute money to several pension and benefit trusts (the trusts).  

The amount of the contributions is based upon the hours worked by Local 46 

member electricians.  Contributions that are not made by the date required are 

delinquent and subject to interest, attorney fees, and liquidated damages.

       In 1990, the trusts hired Michael Korpi to handle their collections.  Korpi is 

a member of the firm defending this action.  The court expressly found that the 

firm generally limited its practice "to the representation of labor-management 

employee benefit trust funds."

       Korpi was responsible for handling many of the trusts' collection accounts, 

                                               2 

No. 65740-2-I/3

including those for Trans World Electric, Fox Electric, Baird Weber, Atkinson 

Bell/Lunde, CAE, Pacific Electric, and Sun Innovations.  These seven accounts 

are at issue in this case.

       In December 2004, because of dissatisfaction with Korpi's collection 

efforts, the trusts referred several accounts to the Ekman Bohrer law firm.   Korpi 

was never a member of this law firm, and it is not a defendant in this action.

       In January 2005, following the referrals to Ekman Bohrer, Korpi sent a 

letter to two of the trustees identifying errors that he made in handling a 

delinquent collection account from Trans World Electric.  In that letter, Korpi 

accepted responsibility for a $55,332.42 loss to the trusts on that account.  He 

also acknowledged that he had known about the errors since May 2004 but 

failed to disclose them to the trusts.  

       Both as a result of Korpi's letter and because they were concerned about

the status of other collection accounts assigned to Korpi, the trustees hired 

Sanford Levy to perform an audit of Korpi's cases.  Levy is an attorney with 

experience in Employee Retirement Income Security Act (ERISA) trust collection 

work.

       In his extensive audit, Levy discovered that $2,292,663.94 in delinquent 

contributions were uncollectable due to Korpi's actions and omissions.  The 

trusts ultimately wrote off $1,405,993.90.  It then sued the firm for legal 

malpractice.

       After a five-day bench trial, the trial court found the firm liable for legal 

                                               3 

No. 65740-2-I/4

malpractice on the Trans World Electric, Fox Electric, Baird Weber, Atkinson 

Bell/Lunde, CAE, and Pacific Electric accounts.  The court determined there was 

legal malpractice in the handling of the Sun Innovations account, but that there 

was insufficient evidence to support a finding of damages caused by the 

malpractice.  The court awarded the trusts $1,139,111.47 in damages, including 

the fees expended on the audit by Levy as consequential damages for the other 

six matters.

       The firm appeals.

                                   DUTY OF CARE

       The firm argues that the trial court erred in articulating and applying the 

duty of care owed by the firm to the trusts in performing ERISA collection work.  

Specifically, it claims the court was oblivious to the serious practical implications 

to collection of delinquent accounts due to the state supreme court's decisions 

holding that ERISA preempted collections.  The firm also takes issue with the 

trial court's use of a percentage of success as a measure of the standard of care 

in this case.  We disagree with both claims.

       In a professional negligence claim against an attorney, the plaintiff must 
prove four elements by a preponderance of the evidence.1 First, that an attorney-

client relationship exists that gives rise to a duty of care on the part of the 
attorney to the client.2 Second, that the attorney's act or omission breached that 

       1 Ang v. Martin, 154 Wn.2d 477, 481, 114 P.3d 637 (2005).

       2 Id. at 482.

                                               4 

No. 65740-2-I/5

duty of care.3 Third, that the client suffered damages.4 And, fourth, that the 

attorney's breach proximately caused the client's damages.5

       In order to breach the duty of care, an attorney must fail to exercise the 

degree of care, skill, diligence, and knowledge commonly possessed and 

exercised by a reasonable, careful, and prudent lawyer in the practice of law in 
Washington.6 "[I]n a malpractice action, the standard of care is the particular 

duty owed the client under the circumstances of the representation . . . ."7  

Expert testimony is required to determine whether an attorney's duty of care was 
breached in a legal professional negligence action.8  

       Whether a duty exists is a question of law that is reviewed de novo.9 A 

trial court's findings of fact are reviewed for substantial evidence.10 Substantial 

evidence is evidence sufficient to persuade a fair-minded, rational person of the 

       3 Id.
       4 Id.

       5 Id.

       6 Geer v. Tonnon, 137 Wn. App. 838, 850-51, 155 P.3d 163 (2007)
(quoting Hizey v. Carpenter, 119 Wn.2d 251, 261, 830 P.2d 646 (1992)).

       7 Barrett v. Freise, 119 Wn. App. 823, 842-43, 82 P.3d 1179 (2003).

       8 Geer, 137 Wn. App. at 851 (quoting Lynch v. Republic Publ'g Co., 40 
Wn.2d 379, 389, 243 P.2d 636 (1952)).

       9 Sheikh v. Choe, 156 Wn.2d 441, 448, 128 P.3d 574 (2006) (citing 
Hertog v. City of Seattle, 138 Wn.2d 265, 275, 979 P.2d 400 (1999)).

       10 Sunnyside Valley Irr. Dist. v. Dickie, 149 Wn.2d 873, 879, 73 P.3d 369 
(2003).

                                               5 

No. 65740-2-I/6

finding's truth.11 Unchallenged findings of fact are verities on appeal.12 This 

court reviews de novo the trial court's conclusions of law to determine if they are 
supported by the findings of fact.13

                                Fiduciary Duty of Care

       In May 2004, Korpi became aware that the deadline to amend $55,000 in

Trans World Electric lien claims had passed.  He did not immediately notify the 

trusts.  Rather, he waited until January 2005 to advise the trusts of the errors, a 

month after they transferred his accounts to Ekman Bohrer.  In his letter to the 

trusts, he took responsibility for the errors and stated that he was "prepared to 
make the necessary arrangements for making the Trusts whole."14  

       The trial court concluded that an attorney owes the "fiduciary duties of 

good faith, loyalty, honesty and a strict duty of full disclosure" to his clients.  The 

court further stated that these fiduciary duties are a "component" of the standard 

of care.  The trial court found that Korpi's failure to disclose the errors to the 

trustees immediately upon discovery of them was a breach of his fiduciary duty 

of full disclosure and a violation of the standard of care.  

       The firm does not dispute any of these findings or conclusions by the trial 

court, which serve to support a portion of the damages award the trial court 

       11 Id. at 879.

       12 In re Marriage of Brewer, 137 Wn.2d 756, 766, 976 P.2d 102 (1999).

       13 Bingham v. Lechner, 111 Wn. App. 118, 127, 45 P.3d 562 (2002) (citing 
City of Seattle v. Megrey, 93 Wn. App. 391, 393, 968 P.2d 900 (1998)).

       14 Ex. 1.

                                               6 

No. 65740-2-I/7

made on this account. With these observations in mind, we move to 

consideration of the challenges the firm does make.

                                   Duty of Diligence

       The firm argues that the trial erred in concluding that Korpi had a duty to 

timely file lien foreclosure actions because state court foreclosure actions are 

preempted by federal law.  Because this argument focuses too narrowly on one 

part of the standard of care, and the firm, by its own testimony, continued this 

practice without any of the consequences it now argues, we disagree.

       Here, the trial court correctly stated in its Conclusion of Law 3 the general 

standard of care that a lawyer owes to a client:

       The standard of care is that degree of care, skill[,] diligence and 
       knowledge commonly possessed and exercised by a reasonable, 
       careful and prudent lawyer in Washington State in the same or 
       similar circumstances.  The standard of care includes legal 
       knowledge, skill, thoroughness, preparation, diligence and 
       calendaring procedures reasonably necessary for the 
       representation.[15]

       The trial court refined the general statement of this standard of care in its 

Conclusion of Law 4.  It stated that the standard is not limited to filing and 

foreclosing liens:

              4.  Diligence and persistence are extremely important in 
       collection work and the standard of care includes more than 
       simply filing lien notices, it also includes, contacting 
       employers and union agents, and obtaining joint check 
       arrangements with the general contractor. Delay in filing and 
       foreclosing liens and filing suit can result in lost opportunities to 
       collect.  Attorney Sanford Levy testified that the defendants 

       15 Clerk's Papers at 1332.

                                               7 

No. 65740-2-I/8

       followed a set of mechanized procedures but took little, if any, 
       initiative to contact employers, general contractors, and union 
       agents to identify and to secure all available sources of recovery, 
       did not timely file suit and did not track public work contract 
       acceptance dates.[16]

       Levy testified that the standard of practice of attorneys, notwithstanding 

the federal preemption cases, was to continue to file liens.  Moreover, the firm's 

counsel admitted that this practice continued with some degree of success in 

collecting delinquent accounts.  The firm presented evidence that Ekman Bohrer 
was sanctioned once for filing a lien foreclosure action in state court.17 But, 

there was neither any finding by the trial court in this case, nor any evidence in 

the record, that the firm suffered any adverse consequences despite its

continued practice to file and foreclose liens after the state supreme court cases 

on preemption were decided.  

       We recognize, as did the trial court, that case authority limited certain 

collection methods after March 1994.  In Puget Sound Electrical Workers Health 
and Welfare Trust Fund v. Merit Co.,18 the state supreme court concluded that 

RCW 39.08 and RCW 60.28.010 are preempted by ERISA.19 It held that these 

statutes have the effect of regulating how ERISA plans are funded because they 

impose liability upon general contractors who have not agreed to contribute to 

       16 Id. at 1332-33 (emphasis added). 
       17 Exhibit 156.

       18 123 Wn.2d 565, 870 P.2d 960 (1994).

       19 Id. at 573.

                                               8 

No. 65740-2-I/9

the plans.20 Accordingly, the court affirmed the trial court's summary judgment

dismissal of the trusts' state court collection efforts.21 We note that the opinion 

makes no mention of imposing sanctions for bringing the action. 

       Six years later, the state supreme court reaffirmed Merit in International 

Brotherhood of Electrical Workers, Local Union No. 46 v. Trig Electric 
Construction Co.22 Although the plaintiffs there argued that recent developments 

in the law undermined Merit, the supreme court disagreed and affirmed the trial 
court's dismissal of the state collection lawsuit.23 Again, there is no mention in 

the opinion of sanctions.  

       The firm now argues that these cases barred reasonably prudent 

attorneys from filing and foreclosing liens for fear of sanctions.   We note that 

Korpi testified that he continued to file liens, notwithstanding these federal 

preemption cases.  He explained that he would only file RCW 39.08 and 60.28 

foreclosure actions in federal court, not in state court.  There was no testimony 

that he or any other attorney of the firm doing so suffered any adverse 

consequences from courts.  

       More importantly, the standard of care requires more than mere filing and 

foreclosing liens.  Diligence also requires pursuit of other collection methods that 

       20 Id. at 572.

       21 Id. at 573.

       22 142 Wn.2d 431, 13 P.3d 622 (2000).

       23 Id. at 440-43.

                                               9 

No. 65740-2-I/10

are specified in Conclusion of Law 4.  Korpi failed to pursue these other 

methods.  Consequently, he breached the standard of care.

       The firm argues that requiring an attorney to file and foreclose liens in 

order to meet the standard of care is error because of federal preemption.  This 

argument places undue emphasis on only part of the overall standard of care 

that the firm breached in this case.

       In Washington, "[a]n attorney is not negligent when he accepts as a 
correct interpretation of the law a decision of the highest court of his state  ... ."24  

Therefore, it is true that Korpi had no duty to file or foreclose liens in state 

court.  The trial court's conclusion did not limit the standard of care to filing and 

foreclosing liens in state court.  Even if we focused narrowly on the filing and 

foreclosing of liens to define the standard of care, Korpi failed in this respect, as 

well.  This is because foreclosing liens in federal court was an option since 

2002.  

       In 2002, two years after Trig, a federal district court in Washington held 

that a remedy under RCW 39.08 could be enforced in federal court in 
Ironworkers District Council of the Pacific Northwest v. George Sollit Corp.25  

There, the federal court held that it had subject matter jurisdiction over the state 

law claim because there was diversity between the parties to that claim and the 

       24 Hansen v. Wightman, 14 Wn. App. 78, 100-01, 538 P.2d 1238 (1975), 
overruled on other grounds by Bowman v. Two, 104 Wn.2d 181, 187, 704 P.2d 
140 (1985).

       25 Noted at 2002 WL 31545972 (W.D. Wash.).

                                              10 

No. 65740-2-I/11

amount in controversy exceeded $75,000.26 Then, relying on Ninth Circuit 

precedent, the district court held that the RCW 39.08 was not preempted by 

ERISA under federal law and denied the defendants' motion to dismiss the state 
law claim.27 The court did not address the plaintiffs' RCW 60.28 claim because 

it was dismissed by the parties' stipulation earlier in the litigation.28

       This option was further clarified in 2007.  In 2007, a federal district court 

in Washington entered an order further establishing its jurisdiction over the state 

lien foreclosure claims in Board of Trustees of the Cement Masons & Plasterers 
Health and Welfare Trust v. GBC Northwest LLC.29 It held that there was 

supplemental jurisdiction over such claims in an ERISA action because they 

arose "under the exact same set of facts surrounding the employer's failure to 
make the required payments to the union's trust actionable under ERISA."30

       The trial court concluded that Korpi's failure to file or foreclose liens was 

at least, in part, a breach of the duty of care on four accounts -- Baird Weber, 

Atkinson Bell/Lund, CAE, and Trans World Electric.  The firm does not argue

that foreclosure actions for these accounts could not have succeeded in federal 

court. Furthermore, the firm does not argue that Korpi was diligent in pursuing 

       26 Id. at *2.

       27 Id. at *5-6 (citing Operating Engineers Health and Welfare Trust Fund 
v. JWJ Contracting Co., 135 F.3d 671 (9th Cir. 1998)).

       28 Id. at *1 n.2.

       29 Noted at 2007 WL 1306545 (W.D. Wash.).

       30 Id. at *2.

                                              11 

No. 65740-2-I/12

other collection methods for these accounts. If he believed that he could not 

pursue the foreclosure of liens as a collection method, presumably he would 

have had an incentive to pursue other collection methods.  In fact, the trial court 

held that Korpi "followed a set of mechanized procedures but took little, if any, 

initiative to contact employers, general contractors, and union agents to identify 
and to secure all available sources of recovery . . . ."31 For these reasons, we 

reject the firm's argument that the court failed to correctly define or apply the 

standard of care for the legal malpractice claims in this case.  

       The firm also challenges the trial court's conclusion in Finding of Fact 13, 

arguing that the court applied a "mechanical" analysis that required commencing 

all lawsuits within 30 days after referral of delinquent accounts.  It argues that 

this standard of care ignores the Washington rule deferring to an attorney's 
discretion on questions of litigation tactics.32 Specifically, the firm claims that the 

trial court's duty imposes liability for failure to file within the time limit "regardless 

of whether the employer was cooperating in making payment and without an 
auditor report quantifying the claim . . . ."33  

       This is unpersuasive.  The court did not state that the 30-day period was 

an inflexible requirement.  Rather, the court stated that this time period was 

       31 Clerk's Papers at 1332-33 (Conclusion of Law 4).

       32 See also Halvorsen v. Ferguson, 46 Wn. App. 708, 717, 735 P.2d 675 
(1986) ("In general, mere errors in judgment or in trial tactics do not subject an 
attorney to liability for legal malpractice.").

       33 Brief of Appellants at 27 (citing Clerk's Papers at 1324).

                                              12 

No. 65740-2-I/13

"probative as to informing the standard of care, with regard to the need to pursue 

delinquent contributions with prompt, diligent, expeditious and persistent 
collection methods and procedures."34  Thus, we reject the firm's argument to the 

contrary.

               Collection of 85 Percent of Outstanding Contributions

       The firm argues that the trial court erred in finding that Korpi had a duty to 

collect 85 percent of the contributions outstanding from the Fox Electric account.  

We disagree.

       Here, the trial court found that:

              31.  With respect to damages on the Fox matter, Plaintiffs'
       [sic] have presented evidence that a reasonably prudent attorney 
       doing ERISA collection work should collect 90 per cent of the 
       delinquent contributions.  The Ekman Bohrer firm recovered close 
       to this rate (approximately 87%) in the 4 plus years after it took 
       over the collections and Mr. Levy testified that 90% is the standard 
       of care.  In addition, when the predecessor firm to the defendants 
       was retained, its representative Mr. McKenzie told the trustees that 
       the firm had collected 95  --  100% of the delinquent accounts.  
       Based upon all of the evidence, the court finds that 85% is a 
       reasonable collection rate to expect from a firm meeting the 
       standard of care in ERISA trust collection work.[35]

       The firm argues that the percentage methodology is "counterintuitive and 

unsupported under Washington law." This argument is not persuasive.  

       The trial court examined historic collection rates for the firm from 1985 to 

1990 and for Ekman Bohrer from 2005 to 2009.  It also heard expert testimony 

from Levy about what amount of the accounts under consideration were 

       34 Clerk's Papers at 1324 (Finding of Fact 13).
       35 Id. at 1330.

                                              13 

No. 65740-2-I/14

collectible during the period at issue.  Based upon this data, the trial court 

derived a percentage and used this as a measure of the standard of care.  This 

was a reasonable approach.

       The firm argues that the historical collection rates that the trial court relied 

upon were incorrectly calculated.  But, because the record includes substantial 

evidence that would persuade a rational fact finder that these percentages are 

correct, this argument is not persuasive.

                                     CAUSATION

       The firm next argues that the trial court erred in concluding that Korpi's 

actions proximately caused the trusts' damages.  Specifically, the firm claims 

that the successor firm also had an opportunity to collect some of the delinquent 

accounts and did not do so.  We hold that the lack of expert evidence to 

demonstrate the alleged breach of duty by others is fatal to this claim.  

Accordingly, we reject it.

       Proximate cause can be divided into two elements: cause in fact and legal 
cause.36 Cause in fact is the actual, "but for," cause of the injury.37 Establishing 

the cause in fact is generally left to the jury because it involves determining what 
actually occurred.38 Legal cause focuses on whether, as a matter of policy, the 

       36 Michaels v. CH2M Hill, Inc., 171 Wn.2d 587, 609, 257 P.3d 532 (2011) 
(citing Schooley v. Pinch's Deli Mkt., Inc., 134 Wn.2d 468, 478, 951 P.2d 749 
(1998)).

       37 Id. at 610 (quoting Schooley, 134 Wn.2d at 478).

       38 Id. (quoting Schooley, 134 Wn.2d at 478).

                                              14 

No. 65740-2-I/15

connection between the ultimate result and the tortfeasor's act is too remote or 
insubstantial to impose liability.39  

       There may be more than one proximate cause, and the concurring 

negligence of a third party does not necessarily break the causal chain from the 
original negligence to the final damages.40 The general rule is that the 

concurrent negligence of a third party is not a defense if the defendant's 
negligence was a cause without which the injury would not have occurred.41  

       A superseding cause exists if a new, independent act breaks the chain of 

causation so that the original negligence is no longer a proximate cause of the 
injury.42 If this occurs, the defendant is not liable for the injury.43 The supreme 

court has looked to the Restatement (Second) of Torts for guidance in 
determining whether a third party's actions are a superseding cause.44 Section 

       39 Id. at 611 (quoting Schooley, 134 Wn.2d at 478-79).

       40 Estate of Shinaul M. v. State Dep't of Soc. & Health Servs., 96 Wn.
App. 765, 770, 980 P.2d 800 (1999) (quoting Doyle v. Nor-West Pac. Co., 23 
Wn. App. 1, 6, 594 P.2d 938 (1979)).

       41 Travis v. Bohannon, 128 Wn. App. 231, 242-43, 115 P.3d 342 (2005)
(citing Eskildsen v. City of Seattle, 29 Wash. 583, 586, 70 P. 64 (1902); 
Restatement (Second) of Torts § 439 ("If the effects of the actor's negligent 
conduct actively and continuously operate to bring about harm to another, the 
fact that the active and substantially simultaneous operation of the effects of a 
third person's innocent, tortious, or criminal act is also a substantial factor in 
bringing about the harm does not protect the actor from liability.")).

       42 Id. at 241 (citing Riojas v. Grant County Pub. Util. Dist., 117 Wn. App. 
694, 697, 72 P.3d 1093 (2003)).

       43 Id. (citing Riojas, 117 Wn. App. at 697).

       44 See Michaels, 171 Wn.2d at 613; Campbell v. ITE Imperial Corp., 107 
Wn.2d 807, 812-13, 733 P.2d 969 (1987).

                                              15 

No. 65740-2-I/16

449 of the Restatement states:

              If the likelihood that a third person may act in a particular 
       manner is the hazard or one of the hazards which makes the actor 
       negligent, such an act whether innocent, negligent, intentionally 
       tortious, or criminal does not prevent the actor from being liable for 
       harm caused thereby.

Whether the third party's act is a superseding cause or simply a concurring one
is an issue for the trier of fact.45

       Here, the trial court found that Korpi was the proximate cause of the 

trusts' injuries.  It is undisputed that, but for Korpi's negligence, the trusts would 

not have suffered damages.  Additionally, the firm does not dispute that public 

policy favors holding an attorney liable for failure to handle a case with diligence 

and failure to disclose material information to clients.

       Nevertheless, the firm argues that subsequent actions by the successor 

firm severed the chain of causation so that Korpi was no longer the proximate 

cause of the trusts' damages.  Essentially, it argues that the successor firm's 

actions were a superseding cause.

       The trial court correctly stated the law that, if a defendant alleges that a 

subsequent lawyer was negligent as part of his defense, evidence about the 

standard of care must be established by expert testimony.  This is consistent 

with case law requiring expert testimony on the standard of care in a legal 
malpractice case.46  Specifically, the trial court stated that:

       45 Travis, 128 Wn. App. at 243 (citing Eckerson v. Ford's Prairie Sch. Dist. 
No. 11, 3 Wn.2d 475, 483-84, 101 P.2d 345 (1940)).

       46 See Geer, 137 Wn. App. at 851; Lynch, 40 Wn.2d at 389.

                                              16 

No. 65740-2-I/17

              12.  The defendants did not present any expert testimony 
       that Ekman Bohrer committed any standard of care violations that 
       caused damage to the trusts, nor did they do so with respect to any 
       other non party or entity so the court will not reduce the damages 
       pursuant to RCW 4.22.070.[47]

       The firm challenges this finding.  It argues that both Korpi and its expert

witness, Charles Colett, presented "ample" evidence that the successor firm was 

negligent in two ways:

       (a) at the time many of the accounts were transferred to the 
       successor firm it had remedies it mistakenly chose not to pursue, 
       recommending instead to the Trusts that they write off the sums, 
       and (b) with respect to Fox specifically, the firm was terminated 
       and bore no further responsibility regarding Fox's offer to the 
       Trusts.[48]

The firm fails to point to a single place in the record where either Korpi or Colett 

testified that the successor firm breached its duty with respect to these two 

situations.  This absence of evidence is fatal to the claim that the successor firm 

was a proximate or superseding cause of any of the trusts' claims.

       Because of the absence of any expert testimony on this critical part of the 

firm's case, we will not discuss this claim any further.

                                      DAMAGES

       The firm also argues that the trial court's determination of damages was 

based on speculative, insubstantial evidence.  We disagree.

       "'Evidence of damage is sufficient if it affords a reasonable basis for 

       47 Clerk's Papers at 1334.

       48 Brief of Appellants at 30.

                                              17 

No. 65740-2-I/18

estimating loss and does not subject the trier of fact to mere speculation or 
conjecture.'"49 Mathematical certainty is not required, and a fact finder has 

discretion to award damages within the range of competent evidence in the 
record.50 The appellate court will not disturb an award of damages unless it is 

outside the range of substantial evidence in the record, shocks the conscience, 
or appears to have been the result of passion or prejudice.51

       Here, the trial court entered detailed findings of fact and conclusions of 

law supporting its determination of damages for each account.  According to his 
audit report, which was admitted into evidence,52 Levy determined that the 

outstanding Trans World Electric contributions that could have been recovered 

equaled $151,324.66 and the trial court awarded $151,324.46.  As we previously 

observed in this opinion, some $55,000 of this total was acknowledged by Korpi 

in his letter to his former clients that tardily informed them of his malpractice.  

       Levy's report also concluded that there were $77,697.95 in known public 

works projects on the Baird Weber account that were not liened and the trial 

court awarded $77,697.95 in damages. Levy testified that the total contributions

outstanding on the Atkinson-Bell/Lunde account was $73,000 and that the trusts 

       49 Clayton v. Wilson, 168 Wn.2d 57, 72, 227 P.3d 278 (2010) (quoting 
State v. Mark, 36 Wn. App. 428, 434, 675 P.2d 1250 (1984)).

       50 Harmony at Madrona Park Owners Ass'n v. Madison Harmony Dev., 
Inc., 160 Wn. App. 728, 737, 253 P.3d 101 (2011) (citing Mason v. Mortg. Am., 
Inc., 114 Wn.2d 842, 850, 792 P.2d 142 (1990)).

       51 Id. (citing Mason, 114 Wn.2d at 850).

       52 Exhibit 107. 

                                              18 

No. 65740-2-I/19

eventually wrote-off $124,000, which included amounts for liquidated 

damages, interest and fees.  The trial court awarded damages of $124,659.  

For Pacific Electric, the trial court found that Korpi was negligent in failing to 

secure a promissory note with a deed of trust on real estate.  Levy testified that 

the balance owing on the note was $178,109 and the trial court awarded that 

amount as damages.  For CAE, the trial court found that Cochran Electric, a 

general contractor, gave Korpi certified payroll records indicating $110,487 in 

delinquent contributions, and the firm does not dispute this amount.  The trial 

court also found that Cochran offered to pay these contributions on CAE's behalf 

and Korpi failed to follow up on that offer.  The amount awarded as damages 

mirrors the amount of delinquent contributions from the certified payroll records. 

This evidence is substantial and supports the challenged findings.

       The firm argues the damages awarded were speculative for various 

reasons.  It asserts that Korpi did collect some funds, that his decision not to file 

suit was within his discretion, that Pacific Electric was not honest about its 

collateral, and that Cochran would not have paid the entire balance owed by 

CAE.  These were issues of fact for the trial court, as the finder of fact, to 

resolve.  It did so, and there is no reason for this court to overturn the decision.  

Reasonable minds could differ about the exact amount of damages awardable.  

But, as we have already stated, there is substantial evidence to support the 

damages findings.

       Finally, the firm challenges the trial court's award of damages for the Fox 

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account, but this amount is also supported by substantial evidence.  First, the 

trial court determined that Korpi was liable for the $281,586 settlement offer that 

he recommended the trusts reject.  Additionally, it found that a reasonably 

prudent attorney doing ERISA collection work would have collected 85 percent

of the total delinquent contributions outstanding on the Fox account.  It 

calculated the damages related to breach of that duty to act prudently as the 

total delinquent contributions, minus the settlement offer rejected, multiplied by 

85 percent. Therefore, the total damages included the full settlement offer, plus 

the remaining contributions that could have been recovered through reasonable 

collection efforts, minus the settlement offer later negotiated by the successor 

firm.  This is a reasonable calculation, one within the range of the evidence at 

trial.  

       The firm argues that the award is unreasonable because, had Korpi 

accepted the settlement, the trusts would only have received the settlement 

amount and not the remaining contributions.  But, the additional amount 

awarded represents the damages incurred from Korpi's failure to diligently 

pursue the lawsuit against Fox. The firm does not challenge the finding that 

Korpi was not diligent, therefore, this argument is not persuasive.

                 AUDIT FEES AS CONSEQUENTIAL DAMAGES

       The firm argues that the trial court abused its discretion by awarding 

consequential damages to the trusts for Levy's audit fees. We disagree.

       The amount of damages that will fairly compensate a plaintiff is a question 

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No. 65740-2-I/21

of fact for the finder of fact.53  A trial court's findings of fact are reviewed for 

substantial evidence.54

       Here, the trial court found that:

              After receiving the letter from Mr. Korpi belatedly disclosing 
       the Trans World errors and because of the trustees concern 
       regarding the status of several other files, the trustees felt it was 
       their responsibility to have an audit conducted of the collection 
       cases assigned to Mr. Korpi. The trusts hired Seattle attorney 
       Sanford Levy to conduct the audit. Mr. Levy has significant 
       experience in ERISA trust collection work. Mr. Levy's fees for
       conducting the audit were $128,000.00 and the court finds those 
       fees to be reasonable, necessary and recoverable as 
       consequential damages occasioned by the failure to timely 
       disclose the errors.[55]

       Steve Washburn, a trustee, testified that the trusts believed they had a 

fiduciary duty to conduct an audit after receiving Korpi's letter. Exhibit 71, which 

was admitted at trial, indicates that the audit cost $128,051.61.  Levy testified 

that this amount did not include any expert witness consultation fees, and was 

purely limited to the audit charges.  Based on this substantial evidence, the trial 

court's finding should not be disturbed on appeal.

       The firm argues that the audit fee was really an expert witness fee, which 

is not a cost that is awardable in an attorney fee and cost award under RCW 

4.84.010. This argument is unpersuasive for two reasons.  First, Levy's 

testimony that he did not include expert witness fees in the audit fees is 

       53 Nielson By and Through Nielson v. Spanaway General Medical Clinic, 
Inc., 135 Wn.2d 255, 267, 956 P.2d 312 (1998).

       54 Sunnyside Valley Irr. Dist., 149 Wn.2d at 879.

       55 Clerk's Papers at 1325-26.

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No. 65740-2-I/22

substantial evidence that the fee was not related to his expert witness fees.  

Second, the trial court found that this amount was a consequential damage 

caused by Korpi's breach of duty to the trust.  It did not award the audit fee to the 

trusts as part of its attorney fee and costs award.

       The firm also argues that this audit was commissioned in anticipation of

litigation and therefore its cost is not properly awardable as damages. The firm 

points to no evidence in the record to support this contention.  Therefore, it does 

not meet its burden to show that the trial court's finding was not supported by 

substantial evidence.

       The firm assigned error to 29 matters and identified six issues in its 

opening brief.  Our disposition of this case does not necessitate dealing with all 

of these. Accordingly, we have limited our discussion to those that are 

necessary to resolve the issues on appeal.

       We affirm the judgments.

WE CONCUR:

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No. 65740-2-I/23

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