Ocean Shores may be stuck with $750,000 ruling

The City of Ocean Shores may be stuck having to pay a $750,000 court judgment against it because the city earlier failed to show up to defend itself against a property lawsuit.

Judge Dave Edwards ruled Monday that his default judgment against the city would stand because the city failed to respond to a notice that it was being sued by property owner Judith M. Shaw. The city argued that, essentially, it was an honest mistake.

“I do not believe it rises to excusable neglect when the policy in place fails. The steps were taken that were supposed to have been taken,” Edwards said in ruling against the city.

Attorney John Justice, representing Ocean Shores, said the city would appeal that decision as well as the underlying ruling on the facts of the case. The appeal must be filed in the next 30 days and heard in the Court of Appeals in Tacoma.

Shaw has sued the city before over drainage on her property on Anchor Avenue, claiming road work by the city has caused flooding and damage to the property. The first lawsuit was dismissed, and the notice of a newly filed suit was delivered to City Clerk Diane Foss on Sept. 13. According to court filings, Foss contacted city attorney Art Blauvelt and was told to forward the complaint to the city’s insurer, Washington Cities Insurance Authority.

“I inadvertently and mistakenly failed to do that,” Foss wrote in a statement to the court. “It was a purely unintentional oversight.”

She cited personal stress, including the premature birth of a grandchild and the strain of budget cuts on her office as contributing to the error.

“I, along with the other city employees, are trying to handle an ever-increasing work load with fewer people. Unfortunately, despite our best efforts, we made a mistake,” Foss wrote.

Shaw’s attorney, James Parker, argued that Foss followed the city’s policy with lawsuits, stating that Foss’ contacting Blauvelt on the subject “was the beginning and end of her responsibility.”

“The motion to vacate (the default ruling) is the city’s attempt to point the finger at Diane Foss and make her the scapegoat,” he said.

Parker also noted an email from Blauvelt to Foss directed her to follow up with him in seven days if there was no response or confirmation from the insurance company. Neither of them took any action to follow up, he said.

Justice made other arguments for vacating the judgment against the city, including the strength of the city’s defense against the claims in the suit and his position that he should have been notified in addition to the city. But Edwards said it all came down to how good of a reason the city had for not appearing.

“That’s where this motion is going to be granted or denied,” he said to Justice.

Edwards seemed unconvinced that Foss’ personal issues and stress amounted to enough legal reason to vacate his judgment.

“Is that what the court needs to do every time there’s a fault situation, is examine the personal lives of everyone involved?” Edwards asked.

Justice asked him to consider all the facts together.

“You can’t ignore the fact that people are people and sometimes they make mistakes,” Justice said.

Ultimately, Edwards concluded that the fact that Foss was at work, knew the policy and seemed to act in accordance with it wasn’t a good enough reason to dismiss the judgment. “At that point I think there was a breakdown in how that was handled that isn’t excusable,” Edwards said.