Shanghai Commercial Bank Ltd. v. Kung Da Chang ( 2017 )

This opinion was filed for record
IN CLERKt OFFICE
BCCOURT,SCVE OF WASI^NQTOM
DATE OCT I 7 Wl
tivUyul. Oi SUSAN L CARLSON
CHIEF JUSTICE
SUPREME COURT CLERK
IN THE SUPREME COURT OF THE STATE OF WASHINGTON
SHANGHAI COMMERCIAL BANK
LIMITED,a banking corporation organized and No. 93823-7
existing under the Laws ofHong Kong Special
Administrative Region, the People's Republic
of China,
Respondent,
V. En Bane
KUNG DA CHANG and "JANE DOE"
CHANG,husband and wife, and the marital
community comprised thereof.
Petitioners. Filed OCT 1 2 2
J
MADSEN, J.—The present iteration ofthis case concerns whether a Hong Kong
judgment is enforceable against marital community property in Washington State. At
issue is the effieacy of a choice of law contractual provision in a Hong Kong contract
along with application ofthe "most significant relationship" test for determining confliet
of law issues and, ultimately, whether Hong Kong law should be applied to reach the
eommunity assets in Washington to satisfy a valid and enforeeable foreign judgment. We
hold that under the facts ofthis case, the debtor's community property may be reached to
satisfy the Hong Kong judgment.
No. 93823-7
FACTS
The facts relevant to the present matter, which concerns Shanghai Commercial
Bank's(SCB's)second motion for summary judgment in this case,^ are undisputed and
as follows. Kung Da Chang entered into a credit facility arrangement with SCB between
March and April 2008 by executing five agreements. Together, these five agreements
enabled Chang and his father, Clark Chang (Clark), to borrow large sums from SCB,and
those sums make up the underlying debt obligation at issue in this lawsuit. These five
documents define Chang and SCB's agreement and govern their obligations. The parties'
agreement explicitly includes a choice oflaw provision selecting Hong Kong law as the
governing law.
The "Facility Letter" that Chang signed provides that the signor is subject to its
terms and conditions, which "form an integral part of this Facility Letter." Clerk's Papers
(CP)at 148. The "Terms and Conditions for Bank Accounts and General Services"
contains a labeled "Governing Law and Jurisdiction" section that provides,"The validity,
construction, interpretation, and enforcement ofthe Agreement and/or the Relevant
Terms and Conditions shall be governed by the laws of HKSAR [Hong Kong Special
Administrative Region]." Id. at 172(emphasis added).^
'SCB's first summary judgment motion established that SCB's Hong Kong judgment against
Kung Da Chang is valid and enforeeable in Washington. See Shanghai Commercial Bank Ltd. v.
Kung Da Chang, No. 70526-1-1, at 1 (Wash. Ct. App. Aug. 25, 2014)(unpublished),
http://www.eourts.wa.gov/opinions/, review denied, 182 Wash. 2d 1006, 342 P.3d 327(2015), cert,
denied, 135 S. Ct. 2847, 192 L. Ed. 2d 877(2015).
^ The remaining documents making up the parties' agreement also all expressly choose Hong
Kong law.
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During exchange ofthe documentation that forms the parties' agreement, SCB
delivered the papers for Chang's signature to an address in Shanghai that was actually
Clark's residence. Clark sent the documents to his son in Seattle,^ Chang signed the
documents and returned them to his father in Shanghai, and Clark forwarded them to
SCB in Hong Kong. There is no indication in the record that at this time SCB knew that
it was dealing with a person residing in Seattle.
Chang ultimately defaulted on the debt obligation, the parties litigated the matter
in Hong Kong in high court action no. 806/2009(HCA 806), and SCB prevailed and
secured a $9 million dollar judgment. Id. at 290. It is undisputed that the HCA 806
judgment under Hong Kong law encompasses what Washington considers Chang and his
wife's marital community, as Hong Kong law exempts solely separate property of a
spouse, not community property, from judgments entered against one spouse (Chang)."^
^ Chang moved to Washington in 1989 and married Michelle Chen in 1994, and the couple has
resided in Washington since that time.
The record contains a declaration from a purported expert regarding Hong Kong law, stating:
Hong Kong is a separate property jurisdiction, and there is no community
property concept/principle. The judgment in High Court of Hong Kong HCA 806
of2009 against KD Chang is enforceable in Hong Kong against all of KD
Chang's assets, which I am given to understand include those assets that would be
considered "commimity property" in Washington, but not against his wife's
separate assets.
CP at 76-77(Decl. of Donny Chiu in Supp. of Pet'r's Second Mot. for Summ. J.). As the Court
of Appeals correctly noted,"Chang did not introduce contrary evidence and does not contest that
his and Chen's community property would be subject to the judgment if Hong Kong law
Shanghai Commercial Bank Ltd. v. KungDa Chang, 195 Wash. App. 896, 906, 381 P.3d
212(2016). Nor does Chang offer a contrary view of Hong Kong law in his briefing to this
court.
No. 93823-7
Following SCB's successful (first) summary judgment motion, which established
that HCA 806 is enforceable in Washington,^ SCB's filed the present(second)summary
judgment motion in this continuing enforcement action on July 2, 2015, seeking a ruling
that HCA 806 eould he enforced against Chang's community property. The trial court
granted the second summary judgment motion on August 21, 2015, ruling that the
express choice of law provision was determinative, and that even if there were no such
provision in this case, the Hong Kong law would apply anyway because it had more
signifieant contacts. The trial court denied Chang's motion for reconsideration on
September 15, 2015, and Chang appealed. Court of Appeals, Division One, affirmed,
holding that Hong Kong had the most significant relationship to Chang's agreement with
SCB and thus under Washington's conflict of law principles. Hong Kong law applied
making property that in Washington belongs to Chang and his wife's marital eommunity
available for colleetion ofthe Hong Kong judgment. Shanghai Commercial Bank Ltd. v.
KungDa Chang, 195 Wash. App. 896, 906-07, 381 P.3d 212(2016). Division One did not
reach the effect ofthe choice of law provision in the agreement between Chang and SCB.
Id. Chang sought review, which we granted. See Shanghai Commercial Bank Ltd. v.
KungDa Chang, 187 Wash. 2d 1017, 390 P.3d 337(2017).
See supra note 1.
No. 93823-7
ANALYSIS
Standard of Review
This court reviews the trial eourt's summary judgment decision de novo. Mohr v.
Grantham, 172 Wash. 2d 844, 859, 262 P.3d 490 (2011). "Summary judgment 'shall be
rendered forthwith if. . . there is no genuine issue as to any material fact and ... the
moving party is entitled to a judgment as a matter oflaw.'" Id.(alterations in original)
(quoting CR 56(c)). The court must draw all reasonable inferenees from the evidenee in
favor ofthe nonmoving party. Id. This eourt reviews the denial of a motion for
reconsideration for abuse of diseretion. Rivers v. Wash. State Conf. ofMason
Contractors, 145 Wn.2d 674,685,41 P.3d 1175 (2002). Statutory interpretation is a
question of law that the court reviews de novo. Philippides v. Bernard, 151 Wash. 2d 376,
383, 88 P.3d 939 (2004). Choice of law is a question of law that the eourt reviews de
novo. Erwin v. Cotter Health Ctrs., Inc., 161 Wn.2d 676,691, 167 P.3d 1112(2007);
Seizer v. Sessions, 132 Wn.2d 642,650,940 P.2d 261 (1997).
Restatement(Second) ofConflict ofLaws § 187(Am.Law Inst. 1971)
Washington eourts "shall recognize a foreign-eountry judgment" for money
damages that is "final, eonclusive, and enforceable" where rendered, unless one or more
ofthe mandatory or discretionary grounds for nonrecognition applies. ROW
6.40A.030(1),.020(l)(b). As noted, SBC's previous summary judgment motion
established that the Hong Kong judgment is valid and enforceable in Washington.
Shanghai Commercial Bank Ltd. v. Chang, No. 70526-1-1, at 1 (Wash. Ct. App. Aug. 25,
2014)(unpublished), http://www.courts.wa.gov/opinions/, review denied, 182 Wn.2d
No. 93823-7
1006, 342 P.3d 327(2015), cert denied, 135 S. Ct 2847, 192 L. Ed. 2d 877(2015). A
recognized "foreign-eountry judgment is .. . [ejnforeeable in the same manner and to the
same extent as a judgment rendered in this state." RCW 6.40A.060(2).
The first appeal having resolved that the Hong Kong judgment, HCA 806, is
enforceable in Washington, this court is now asked to decide whether the judgment
debtor's community property may be reached to satisfy the Hong Kong judgment. In
deciding that issue, we must address the efficacy ofthe parties' express choice oflaw
provision in their governing agreement. Our decision in Erwin directs that such inquiry
be undertaken and provides the appropriate analysis.
In Erwin, we explained that in resolving disputes concerning choice of law the
court need decide(1) whether there is an actual conflict oflaws and, if so,(2) whether the
parties' agreement's choice of law provision is effective. 161 Wash. 2d at 692. "'When
parties dispute choice of law, there must be an actual conflict between the laws or
interests of Washington and the laws or interests of another state before Washington
courts will engage in a conflict of laws analysis.'" Id.(quoting Seizer, 132 Wash. 2d at
648). "If the result for a particular issue 'is different under the law ofthe two states, there
is a "real" conflict.'" Id.(quoting Seizer, 132 Wash. 2d at 648 (citing Pac. Gamble
Robinson Co. v. Lapp, 95 Wash. 2d 341, 344-45, 622 P.2d 850(1980), overruling on other
grounds as recognized by Haley v. Highland, 142 Wash. 2d 135, 12 P.3d 119 (2000))).
"'[Wjhcre laws or interests of concerned states do not conflict,' the situation presents 'a
false conflict' and 'the presumptive local law is applied.'" Id.(internal quotation marks
omitted)(quoting Seizer, 132 Wash. 2d at 648-49).
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Here, there is an actual eonfliet between Hong Kong law and Washington law on
the issue of whether Chang and his wife's community property is reachable for
satisfaction ofthe HCA 806 judgment. As noted, evidence in the record regarding Hong
Kong law states in relevant part that "Hong Kong is a separate property jurisdiction, and
there is no community property eoneept/principle." CP at 76. Accordingly,"[t]he
judgment in ... HCA 806 ... against KD Chang is enforceable in Hong Kong against all
ofKD Chang's assets,. .. inelud[ing] those assets that would be considered 'community
property' in Washington." Id.
Washington law yields a different result. Similar to this case, in Potlatch No. 1
Federal Credit Union v. Kennedy, 76 Wn.2d 806,459 P.2d 32(1969), the husband (a
Washington resident) undertook a loan obligation (as cosigner) with a lender in Idaho, a
noncommunity property state. Upon default, the foreign creditor sought relief against the
husband, his wife, and their Washington community. The trial court, applying
Washington law, ruled that the foreign creditor was not entitled to judgment against the
wife or the community. Id. at 807-08. In the course of affirming the judgment, this court
explained that "[ujnder the law of this state [(Washington)], community property is
liable for the suretyship debt of one ofthe parties only if the community has been
benefited by the obligation." Id. at 808.^ "Under Idaho law, however, the community is
liable for the separate debts ofthe husband, irrespective of whether they were incurred
^ Similarly here, the SCB aeeount provided moneys for Clark's investment activities in Hong
Kong and for servicing Clark's investment debts at another Hong Kong bank. Chang and Chen's
community received no money (benefits) from the SCB account.
No. 93823-7
for the benefit ofthe community."'' Id. Accordingly, ifIdaho law were applied,"[the
foreign creditor] plaintiff would have been entitled to judgment against the ...
community." Id. But if Washington law were applied,"there would be no recovery
against the community." Id. In the absence of a choice of law by the parties, this court
applied the "most significant relationship" test (discussed below) and, based on the
specific facts, applied Washington law and affirmed the trial court. Id. at 809-14.
As discussed in Potlatch, this is an actual conflict. See also Erwin, 161 Wn.2d at
692(if the result for a particular issue is different under the law ofthe two states, there is
a "real" conflict).
Given an actual conflict, the analysis turns to whether the parties' contractual
choice of law is effective. Id. at 693. In Erwin, this court adopted Restatement section
187 as "the law of Washington when resolving conflict of laws issues in which the parties
have made an express contractual choice of law to govern their contractual rights and
duties." Id. at 694. This court explained that "[sjince 1967, Washington has followed the
most significant relationship test. ..[of] the Restatement[section 188] when resolving
contractual choice-of-law problems in which the parties did not make an express choice
of law." Id. at 693-94 (citing Mulcahy v. Farmers Ins. Co. of Wash., 152 Wash. 2d 92, 100,
95 P.3d 313 (2004)); see also id. at 696. "Section 187 ofthe Restatement provides the
The same is true under Hong Kong law, as attested in the noted expert declaration.
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No. 93823-7
rule for conflict of laws problems in which the parties have made an express contractual
choice of law." Id. at 694.^ Restatement section 187 provides as follows:
"'§ 187. Law of the State Chosen by the Parties
'(1) The law ofthe state chosen by the parties to govern their
contractual rights and duties will be applied if the particular issue is one
which the parties could have resolved by an explicit provision in their
agreement directed to that issue.
'(2) The law ofthe state chosen by the parties to govern their
contractual rights and duties will be applied, even if the particular issue is
one which the parties could not have resolved by an explicit provision in
their agreement directed to that issue, unless either
'(a) the chosen state has no substantial relationship to the parties or
the transaction and there is no other reasonable basis for the
parties' choice, or
'(b) application ofthe law ofthe chosen state would be contrary to a
fundamental policy of a state which has a materially greater
interest than the chosen state in the determination ofthe particular
issue and which, under the rule of § 188, would be the state ofthe
applicable law in the absence of an effective choice oflaw by the
parties.
'(3) In the absence of a contrary indication of intention, the reference
is to the local law of the state of the chosen law.'"
Id. at 694-95 (quoting O'Brien v. Shearson Hayden Stone, Inc., 90 Wn.2d 680,685, 586
P.2d 830(1978)(qaoting Restatement § 187)).
Here, subsection(1)applies. The parties could have(and did) expressly provide
in their agreement that "[t]he validity, construction, interpretation and enforcement of
^ Here, the Court of Appeals eorrectly aeknowledged that the parties' "agreement requires the
applieation of Hong Kong law." Shanghai Commercial Bank, 195 Wash. App. at 905. Yet the
Court of Appeals analysis does not mention Restatement section 187, applying instead only the
analysis contained in Restatement section 188. See id. at 903 n.22. Although in this case the
Court of Appeals analysis and the analysis applied in this decision achieve the same outcome, we
granted review in part to reiterate the analytical framework that should be followed when a
choice of law provision is elected by the parties.
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No. 93823-7
their agreement "shall be governed by [Hong Kong law]." CP at 172(emphasis added).
The specific inclusion of enforcement in context fulfills the specificity requirement of
subsection (1), encompassing the enforcement action here and thereby making the
parties' choice of law selection effective under subsection (1).
Further, even if the language ofthe choice of law provision were deemed to be too
general to comply with subsection (1), or the nature ofthe subsection (1)requirement
could not otherwise be met here, subsection (2)(b) would apply to the circumstance
presented in this case.® Under subsection (2)(b), the law chosen by the parties (i.e.. Hong
Kong law) will be applied unless application of Hong Kong law would be contrary to
Washington policy and under Restatement section 188(most significant relationship test)
Washington would be the state of applicable law absent an express choice oflaw
designation by the parties. As the discussion in the next section (concerning Pacific
Gamble and Potlatch) explains, the application of Hong Kong law in this circumstance
does not offend Washington policy. Further, the most significant relationship test
(applied below)favors application of Hong Kong law. Accordingly, because subsection
(2)(b) conditions foreclosing application ofthe chosen law are not met, the parties'
express choice of Hong Kong law is effective under Restatement section 187.
Restatement section 188
Turning to Restatement section 188, as we have noted, Washington courts have
applied the most significant relationship test to contract choice oflaw issues for half a
® Subsection (2)(a) does not apply because "the chosen state"(Hong Kong) clearly does have a
substantial relationship to the parties and the transaction.
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No. 93823-7
century. See Mulcahy, 152 Wash. 2d at 100 (citing Baffin Land Corp. v. Monticello Motor
Inn, Inc., 70 Wn.2d 893,425 P.2d 623 (1967)). "In the absence of an effective choice of
law by the parties, the validity and effect of a contract are governed by the law ofthe
state having the most significant relationship with the contract." Pac. Gamble Robinson
Co. V. Lapp,95 Wash. 2d 341, 343,622 P.2d 850(1980). Restatement section 188 provides
a summary ofthe test to be applied:
"(1) The rights and duties ofthe parties with respect to an issue in
contract are determined by the local law ofthe state which, with respect to
that issue, has the most significant relationship to the transaction and the
parties under the principles stated in § 6.0°^
"(2)In the absence of an effective choice of law by the parties (see §
187), the contacts to be taken into account in applying the principles of § 6
to determine the law applicable to an issue include:
"(a)the place of contracting,
"(b)the place of negotiation of the contract,
"(c)the place of performance,
"(d)the location ofthe subject matter ofthe contract, and
"(e)the domicil, residence, nationality, place of incorporation and
place of business ofthe parties.
"These contacts are to be evaluated according to their relative
importance with respect to the particular issue.
"(3)If the place of negotiating the contract and the place of
performance are in the same state, the local law of this state will usually be
applied."
10
Restatement section 6 lists "Choice-of-Law Principles" at subsection(2) as follows:
(a)the needs ofthe interstate and intemational systems,
(b)the relevant policies ofthe forum,
(c)the relevant policies of other interested states and the relative interests of those states
in the determination of the particular issue,
(d)the protection ofjustified expectations,
(e)the basic policies underlying the particular field of law,
(f) certainty, predictability and uniformity of result, and
(g)ease in the determination and application ofthe law to be applied.
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No. 93823-7
Id. at 346(quoting Restatement section 188). "Additionally, the expectations ofthe
parties to the eontract may significantly tip the scales in favor of one jurisdiction's laws
being applied over another's." Mulcahy, 152 Wash. 2d at 101; see also Pac. Gamble,95
Wn.2d at 346; Potlatch, 76 Wash. 2d at 810.
In Pacific Gamble,this court addressed the issue of whether a creditor on an
obligation ineurred by one spouse in a foreign, noncommunity property state, where both
spouses were previously domiciled, was restricted in its recovery to the separate property
ofthe obligor spouse after the couple moved to Washington. 95 Wash. 2d at 343. In
Pacific Gamble,the husband, a Colorado resident and business owner, signed a note to
secure a loan for his Colorado business. His wife did not sign the note. Under Colorado
law, only the husband's earnings and property were subjeet to the debt. The husband
defaulted, he and his wife moved to Washington, and the creditor sued in Washington,
seeking to reeover the balance due on the note from both the husband and the marital
community. Id. at 342-43.
Applying Restatement section 188, this court noted that Colorado had numerous
governmental interests in the note transaction. The transaetion oceurred in Colorado, the
husband was doing business in Colorado, and he and his wife were domiciled in
Colorado at the time of the exeeution of the note, which was signed in Colorado by the
husband individually and on behalf of his Colorado corporation. Both parties apparently
eontemplated that all performance was to be in Colorado. Id. at 346-47. This court
assumed that Colorado's interests included ensuring the predictability of business
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No. 93823-7
relations and to prevent the flight of debtors to other states to avoid payment of otherwise
legitimate debts. Id.
This court acknowledged that while Washington has a general interest in
protection of marital communities from the entirely separate debts of one spouse,see
RCW 26.16.010,.020, nevertheless,"neither this court nor the legislature currently
adheres to the rule that the marital property, including the wages of a debtor spouse, are
under all circumstances to be insulated from the claims of a creditor on a separate debt."
Pac. Gamble,95 Wn.2d at 347 n.2. Moreover, Washington had no cormection with the
transaction until the husband and wife established their domicile here a few months after
the note went into default. Id. at 347. The court noted,"[T]his state has no policy
interest in maintaining within its borders a sanctuary for fleeing debtors." Id.
As to the parties' expectations, the court held that all parties would assume that
Colorado law applied. The creditor had willingly subjected itself to Colorado law by
doing business in Colorado and contracting with a Colorado resident, and the creditor
"could justifiably assume that the Colorado law would likewise apply to [the creditor's]
business debtor." /J. at 348. The husband and wife could reasonably expect at the time
the note was executed that the transaction would be governed by Colorado law since they
had long been domiciled in Colorado, and remained there for a time after the note was
signed;"they could not justifiably believe that the obligation could be fairly avoided by
...[moving] to a state where a husband's wages would not be subject to the debt." Id.
This court held that the numerous contacts, competing policies, and justifiable
expectations ofthe parties show Colorado's interest in the contract to be far more
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No. 93823-7
significant than Washington's and accordingly applied Colorado law, thereby subjecting
all ofthe husband's wages and acquisitions available for payment ofthe debt,
"notwithstanding such property is characterized as 'community' under Washington law."
Id. at 349-50.
The Pacific Gamble court noted that its decision was consistent with Fotlatch,
even though in Fotlatch the court concluded that Washington law should apply to the
question of whether the community was liable for the husband's suretyship obligation to
an Idaho creditor; the result reached turned on application ofthe above factors to the facts
ofthe case. Id. at 350 n.3. "Had we found [in Fotlatch] that Idaho had the most
significant relationship to the transaction, it is clear we would have applied Idaho law and
accordingly imposed liability on the Washington marital community." Id. Key to the
result in Fotlatch was the fact that the Idaho creditor knew it was dealing with
Washington residents and knew that the property covered in the chattel mortgage at issue
was located in Washington, and that it was likely that the debtors' community property
would be situated in Washington. Fotlatch, 76 Wash. 2d at 813.
Applying the Restatement section 188 factors, Faciflc Gamble, and Fotlatch to the
facts ofthis case yields the result that Hong Kong law has the most significant
relationship to the present matter concerning enforcement ofthe Hong Kong judgment.
The places of contracting, negotiation, and performance and the location ofthe subject
matter ofthe contract favor Hong Kong. Given these contacts, the justified expectations
ofthe parties and the policies of Hong Kong and Washington indicate that Hong Kong
has the most significant relationship to the issue here. The parties' reasonable
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No. 93823-7
expectations favor Hong Kong law. Less than a week before the Facility Letter and other
documents were prepared by SCB for Chang's signature, Chang was in Hong Kong with
Clark, meeting with a bank executive and investment adviser about moving millions of
dollars of investment accounts to SCB. Chang clearly knew that he was dealing with a
bank in Hong Kong and that the agreement with SCB expressly included Hong Kong
choiee-of-law provisions. Conversely, the record contains no indication that SCB knew it
was dealing with a Washington resident; the documents Chang signed were all addressed
to his father's (Clark's) residence in Shanghai and Chang returned them to Clark, not to
SCB, after signing. Clark and his advisors used the borrowed money in Hong Kong to
pay investment debt incurred there that had no connection to Washington.
The relative interests and policies of Washington and Hong Kong also favor Hong
Kong. Like Colorado, Hong Kong has an interest in ensuring the predictability of
business relations, including the payment of debt obligations. See Pac. Gamble,95
Wn.2d at 346-47. And while Washington has an interest in generally protecting the
welfare of community property interests of its residents, it would not serve those interests
to permit debtors to hide behind or misuse community property status as a blanket
protection of assets from legitimate foreign debt collection in all circumstances.
In sum, weighing the competing policies of Washington and Hong Kong and the
justified expectations of Chang, Chen, and SCB, and considering Chang's contacts with
Hong Kong, we conclude that Hong Kong has the most significant relationship to the
issue here. For all the reasons discussed above, we affirm the trial court's grant of
summary judgment.
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No. 93823-7
Merger
Finally, relying on Caine & Weiner v. Barker,42 Wn. App. 835, 837, 713 P.2d
1133 (1986), which addresses the "merger doctrine," Chang argues that the present
enforcement action should be considered without any reference to the underlying
agreement, breach, or contacts as discussed above. He contends that "[t]he underlying
claim is irrelevant to an inquiry into enforceability." Pet. for Review at 15. But Chang's
reliance on the merger doctrine is misplaced in the present context. In Caine, Division
One observed that the merger rule "applies generally to a judgment for a plaintiff in an
action to recover money." 42 Wash. App. at 837. "As a general rule, when a valid final
judgment for the payment of money is rendered, the original claim is extinguished, and a
new cause of action on the judgment is substituted for it. Thereafter, the plaintiff cannot
maintain an action on the original claim or any part thereof." Id.(citations omitted). But
Caine also acknowledged the doctrine's limitations as follows:
The merger rule is based in part upon the need to prevent vexatious
relitigation of matters that have already passed into judgment as between
the parties to the litigation and their successors. However, despite the
general rule that underlying rights and obligations are extinguished by the
judgment, the doctrine is designed to promotejustice and should not be
carriedfurther than that end requires.
Id.(emphasis added)(citations omitted). Here, application of the merger doctrine is not
warranted or appropriate. The present case does not involve vexatious relitigation; SCB
merely seeks enforcement of a valid judgment. Further, application ofthe doctrine as
Chang advocates would require the court to ignore the parties' express expectation
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No. 93823-7
(evidenced by the ehoiee of law provision)that Hong Kong law is to he applied
comprehensively to all aspects ofthe agreement, including enforcement. Accordingly,
because application ofthe doctrine as Chang advocates would he contrary to the rule's
parameters as noted in Caine, we decline to apply the merger doctrine here.
CONCLUSION
The trial court correctly granted SCB's second summary judgment motion because
the express choice oflaw provision contained in the agreement between SCB and Chang
is effective under Restatement section 187 and Erwin. Further, if there were no express
choice of law provision in this ease. Hong Kong law would apply in any event under
Restatement section 188's most significant relationship test. Accordingly, Hong Kong
law applies in this enforcement action, making all of Chang's assets, including
community property in Washington, available for payment ofthe debt, but Chang's
wife's separate assets are not available. We reiterate that the appropriate analytical
framework for conflict of law analysis, where there is a choice of law by the parties, is
application ofRestatement 187 as directed in Erwin. For the reasons discussed above, we
affirm the trial court's grant of summary judgment.
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No. 93823-7
WE CONCUR:
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