§13.6 Analysis

• Jurisdiction: Washington

§13.6ANALYSIS

The following analysis tracks the sections of CR 13.

(1) Compulsory counterclaims

CR 13(a) governs the requirements and exceptions for compulsory counterclaims. The rule is interpreted liberally so as to avoid a "multiplicity of suits." Schoeman v. N.Y. Life Ins. Co., 106 Wn.2d 855, 864, 726 P.2d 1 (1986). Compulsory counterclaims must be set forth in a responsive pleading, CR 13(a)(1), and a party's failure to plead a compulsory counterclaim will generally prevent that party from bringing a separate action on that claim, Chew v. Lord, 143 Wn.App. 807,181 P.3d 25 (2008) (citing Schoeman, 106 Wn.2d at 866); Tallman v. Durussel, 44 Wn.App. 181, 186, 721 P.2d 985, review denied, 106 Wn.2d 1013 (1986); Moritzky v. Heberlein, 40 Wn.App. 181, 183, 697P.2d1023 (1985). The failure to assert a compulsory counterclaim in a federal action bars the pleader from subsequently bringing that claim in state court. Schoeman, 106 Wn.2d at 864. And, although CR 13(f) allows for amendment to add a compulsory counterclaim within an action, it cannot be used to add a compulsory counterclaim that was omitted from a previous action. Bhd. of Locomotive Fireman & Enginemen v. Butte, A. & P. Ry. Co., 286 F.2d 706 (9th Cir.), cert, denied, 366 U.S. 929(1961).

Caveat: A party generally may not assert a counterclaim in an unlawful detainer action, even if it arises out of the same transaction or occurrence. Hous. Auth. of City of Everett v. Terry, 114 Wn.2d 558, 789 P.2d 745 (1990). An exception to the exception exists when resolution of the counterclaim is necessary to determine the right to possession. Kelly v. Powell, 55 Wn.App. 143, 776 P.2d 996 (1989)

A counterclaim generally is compulsory if it (1) arises out of the same transaction or occurrence that is the subject of the opposing party's claim; (2) is mature and owned by the pleader at the time the pleading is served; (3) does not require for its adjudication the presence of third parties beyond the personal jurisdiction of the court; and (4) was not, at the time of the commencement of the original action, the subject matter of another pending suit. Charles A. Wright & Mary K. Kane, Law of Federal Courts §79 (7th ed. 2011).

In analyzing whether the claim arose out of the same "transaction or occurrence," Washington and most federal courts have adopted the "logical relationship" test. See Chew, 143 Wn.App. at 813, 815 (citing Schoeman, 106 Wn.2d at 865-66). This approach is intended to allow significant flexibility in application, and "allows the court to apply Rule 13(a) to any counterclaim that from an economy or efficiency perspective could be profitably tried with the main claim." See 6 Charles A. Wright, Arthur R. Miller & Mary K. Kane, Federal Practice and Procedure §1410 (3d ed. 2010). This broad and flexible approach, however, leads to a fair degree of uncertainty in application.

Although Washington cases provide little guidance as to what constitutes a "logical relationship" between claims, the six federal cases cited in the Schoeman opinion are helpful. It is also worth noting that courts in other jurisdictions have formulated other "transaction or occurrence" tests that may be useful in analyzing whether a counterclaim is compulsory. The Schoeman court rejected these alternate tests, but federal courts (including the Ninth Circuit) routinely look beyond the basic "logical relationship" test to see (1) whether the claims have similar factual and legal issues; (2) whether a subsequent claim would have been barred by the principles of claim preclusion or res judicata; and (3) whether the same evidence supports or refutes the principal claim and counterclaim. See 3 James W Moore, Moore's Federal Practice §13.10 (3d ed. 2013).

Note that CR 13 requires assertion of compulsory counterclaims against any "opposing party." By definition, one need not bring a counterclaim against someone not yet party to the proceeding, and this language is interpreted strictly. CR 13(a) does not, for instance, require a party to bring claims that it might have against an assignor of a claim in an action brought by the assignee. In Nancy's Product, Inc. v. Fred Meyer, Inc., 61 Wn.App. 645, 650, 811 P.2d 250, review denied, 117 Wn.2d 1017 (1991), the court held that an "opposing party" is one who actually asserts a claim against the prospective counterclaimant in the first instance (and not the assignor of the claim).

Claims that have not yet matured at the time the answer is served do not constitute compulsory counterclaims, but if the claims have matured before the service of the claimant's last responsive pleading, they are barred if not pleaded. Tollman, 44 Wn.App. at 184-85.

A counterclaim is not compulsory if the opposing party brought its claim by attachment or other procedure in which the court does not acquire personal jurisdiction. In re Estate of Hanson, 81 Wn.App. 270, 914 P.2d 127, review denied, 130 Wn.2d 1008 (1996). See generally 6 Charles A. Wright, Arthur R. Miller & Mary K. Kane, Federal Practice and Procedure §1411 (3d ed. 2010).

Comment: The Washington Supreme Court has held that the commencement of the action in which the counterclaim is pleaded tolls the running of the statute of limitations on a compulsory counterclaim. J.R. Simplot Co. v. Vogt, 93 Wn.2d 122, 126 605 P.2d 1267 (1980). Thus, a counterclaim may still be timely even though the statute of limitations expired before it was pleaded, as long as the action in which the compulsory counterclaim is asserted was commenced prior to the expiration of the relevant limitation period. Be careful, however: this tolling rule likely does not apply to permissive counterclaims, see Cashmere Valley Bank v. Brender, 128 Wn.App. 497, 116 P.3d 421 (2005) aff'd, 158 Wn.2d 65, 146 P.3d 928 (2006), or cross claims seeking affirmative relief between coparties to an action see Bennett v. Dalton, 120 Wn.App. 74, 86, 84 P.3d 265 (2004).

(2)Permissive counterclaims

CR 13(b) states that a pleading "may" state as a counterclaim any claim against an opposing party not arising out of the transaction or occurrence that is the subject matter of the opposing party's claim. Thus, all counterclaims that are not compulsory may be asserted under subsection (b), which is designed to "allow the broadest possible joinder of permissive counterclaims." 6 Charles A. Wright, Arthur R. Miller & Mary K. Kane, Federal Practice and Procedure §1420 (3d ed. 2010). For example, in C-C Bottlers, Ltd. v. J.M. Leasing, Inc., 78 Wn.App. 384, 896P.2d1309 (1995), the court held, in a promissory note collection action, that independent and unrelated securities fraud claims were permissive counterclaims because they did not avoid the obligations represented by the notes.

In a case predating adoption of CR 13, the Washington Supreme Court held that it is not necessary to assert a counterclaim unless proof that would establish that claim would defeat the plaintiff's cause of action. Scott v. Holcomb, 49 Wn.2d 387, 393, 301P.2d1068 (1956). The court ruled that if the counterclaim was an "independent cause of action," even though it was "connected with" the subject action, its assertion was permissive rather than mandatory. Based upon the analysis in §13.6(1), above, application of the "logical relationship" test for compulsory counterclaims under CR 13 would likely result in a different outcome.

Practice Tip: The distinction between compulsory and permissive counterclaims is sometimes misunderstood by litigants and their attorneys. Assuming that asserting a counterclaim makes strategic and economic sense (considering the likely complications and extra expenses in the litigation), you should generally assert all available counterclaims. By

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