Viet Tuan Nguyen v. Asset Acceptance, Llc. ( 2017 )

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
ASSET ACCEPTANCE LLC, ) No. 75107-7-1
)
Respondent, ) DIVISION ONE
)
v. )
) UNPUBLISHED OPINION
VIET TUAN NGUYEN, )
)
Appellant. ) FILED: March 27, 2017
)
LEACH, J. — Kevin Nguyen appeals the trial court's denial of his motion to
vacate a default judgment. He asserts that Asset Acceptance LLC never served
him with the summons and complaint. Asset Acceptance responds that because
Nguyen filed two previous motions to vacate, collateral estoppel bars his third
motion. It also claims that it accomplished substitute service on Nguyen.
Because Asset Acceptance has not shown that the trial court decided the merits
of Nguyen's service claim on the first two motions to vacate, we reject its
estoppel argument. And because Nguyen presented clear and convincing
evidence that he did not live at the address where Asset Acceptance contends it
served him, Nguyen was not served and the trial court lacked personal
jurisdiction over him. Thus, we reverse the trial court and remand for vacation of
the default judgment.
No. 75107-7-1 / 2
FACTS
In April 2009, Asset Acceptance sued Viet Tuan Nguyen over an unpaid
Citibank credit card balance and received a default judgment. The defendant in
this case was formerly named Viet Tuan Nguyen but changed his legal name to
Kevin Nguyen in 2000. He asserts that he never had a Citibank card under the
name Viet Tuan and is not the debtor on the account. To collect the default
judgment, Asset Acceptance has garnished $9,563.33 of Nguyen's wages and
$1,501.67 from his Boeing Employees Credit Union account. As of December
2015, Asset Acceptance alleged that Nguyen still owed $11,226.37.
Asset Acceptance hired ABC Legal Services to serve its summons and
complaint on Nguyen. ABC knew of at least three possible addresses for
Nguyen. On March 12, 2009, an ABC process server went to one of those
addresses, 3802 South Benefit Street, Seattle, and left the complaint and
summons with Bach Yen Thi Huynh (Yen).1 According to both Yen and Nguyen,
Nguyen had lived at that address for only a few months in 2008. Yen had been
his landlord; the two share no other relationship and had no contact between
2008 and 2016, when Nguyen contacted Yen for her declaration.
Nguyen submitted evidence that he did not live at the Benefit Street
address on March 12, 2009, but instead lived at 255 Powell Avenue Southwest,
1 Consistent with the appellant's brief, service documents, and trial court
record, Bach Yen Thi Huynh is called "Yen" here.
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Renton.2 He states that he never received the summons and complaint and did
not become aware of Asset Acceptance's lawsuit until 2012.
Asset Acceptance filed its summons and complaint on April 15, 2009. The
trial court granted Asset Acceptance a default judgment the next day.
Asset Acceptance started garnishment proceedings three years later, on
April 16, 2012. It placed a continuing lien on Nguyen's earnings from his
employer, The Boeing Company. Nguyen states that this was when he first
heard about the alleged debt, Asset Acceptance's action, and the judgment
against him.
On an acquaintance's recommendation, Nguyen hired a "credit repair
agency," uGotFICO Inc., which assured him it would resolve his debt problems.3
The company sent him a form motion to set aside and vacate the default
judgment and told him to file it with the court. Acting pro se, Nguyen filed that
form as a motion in August 2012. Nguyen did not appear for a hearing
scheduled for his motion.4 The trial court denied the motion. Nguyen states that
he did not understand that his motion had been denied and believed that
2 Nguyen states that he moved to 6518 33rd Avenue South, Seattle, in
late 2008. He then moved to 255 Powell Avenue Southwest, Renton, where he
lived until mid-2009.
3 Nguyen states that he did not read, write, or speak English well or
understand why his wages were being garnished. His acquaintance
recommended uGotFICO in part because its employees spoke Vietnamese.
4 Nguyen states that he did not know he was required to attend and
believed uGotFICO was his legal representative.
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No. 75107-7-1 / 4
uGotFICO was handling his case. Meanwhile, Asset Acceptance continued to
garnish his wages.
Nguyen filed another pro se motion to vacate the default judgment in July
2013. He again submitted a uGotFICO form motion. The court denied Nguyen's
motion without prejudice, telling Nguyen he needed to note it before the judge the
case was assigned to.
Nguyen filed a third motion to vacate the default judgment in March 2016,
this time represented by counsel. He asked the court to vacate the judgment
under CR 60(b)(5) and (11). Nguyen and Asset Acceptance both presented
documentary evidence about Nguyen's address at the time of service. At a
hearing, the trial court found that Nguyen failed to present clear and convincing
evidence that he had not been properly served. It also noted "that this identical
motion has been raised in 2012 and in 2013.. . raising the same issue. Both
times the motion was denied." It added, "The fact that Mr. Nguyen chose to
represent himself does not give rise to a lower standard of proof." The trial court
denied Nguyen's motion. He appeals.
STANDARD OF REVIEW
This court generally reviews a trial court's decision to grant or deny a
motion to vacate a default judgment for abuse of discretion.5 However, a court
5 Leen v. Demopolis, 62 Wash. App. 473, 478, 815 P.2d 269 (1991).
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No. 75107-7-1 / 5
has a nondiscretionary duty to vacate a void judgment.6 This court reviews this
issue de novo.7 This court also reviews de novo whether collateral estoppel bars
a party from raising an issue.8 And this court reviews de novo whether service of
process was sufficient.9
ANALYSIS
Collateral Estoppel
Asset Acceptance contends that because Nguyen has filed two previous
motions to vacate, collateral estoppel now bars this service of process
challenge.1° We disagree.
Collateral estoppel precludes only issues that the parties actually litigated
and the trial court necessarily determined in an earlier proceeding.11 The party
against whom collateral estoppel is asserted must have had a "full and fair
6 Leen,62 Wn. App. at 478.
7 ShareBuilder Sec. Corp. v. Hoanci, 137 Wash. App. 330, 334, 153 P.3d
222 (2007).
8 Christensen v. Grant County Hosp. Dist. No. 1, 152 Wash. 2d 299, 305, 96
P.3d 957 (2004). Asset Acceptance cites only an unpublished Division Three
case for the proposition that we review the estoppel issue for abuse of discretion.
This citation violates GR 14.1(a). Moreover, the cited case does not apply that
standard of review. See M&M Harrison Elec. Co. v. Ins. Co. of the State of Pa.,
noted at 117 Wash. App. 1049 (2003).
9 Scanlan v. Townsend, 181 Wash. 2d 838, 847, 336 P.3d 1155 (2014).
10 The trial court wrote in denying Nguyen's motion that Nguyen had
raised "this identical motion" twice before. But the trial court appeared to base its
decision instead on its conclusion that Nguyen failed to meet the clear and
convincing evidence standard.
11 Christensen, 152 Wash. 2d at 307.
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No. 75107-7-1 / 6
opportunity to litigate the issue in the earlier proceeding."12 The party asserting
collateral estoppel must show that the issues in both actions are identical, the
earlier proceeding ended in a judgment on the merits, the party against whom
collateral estoppel is asserted was a party to, or in privity with a party to, the
earlier proceeding, and applying collateral estoppel does not work an injustice on
the party precluded from bringing an action.13
Asset Acceptance fails to satisfy these elements. It has not shown that
the trial court decided Nguyen's first two motions on the merits.
Asset Acceptance's estoppel argument must rely on the trial court's
dismissal of Nguyen's first motion to vacate. Nguyen's second motion to vacate
has no preclusive effect because it did not result in a judgment of any kind: the
trial court made no ruling, simply observing that Nguyen had brought the motion
before the wrong judge.14
For Nguyen's first motion, the record contains no indication the trial court
considered the issue, let alone entered a final judgment on the merits. Nguyen
did not appear at the hearing on that motion. The forms he submitted were
12 Christensen, 152 Wash. 2d at 307.
13 World Wide Video of Wash., Inc. v. City of Spokane, 125 Wash. App. 289,
305, 103 P.3d 1265(2005).
14 The trial court's later observation that "two other courts have already
found that the judgment was not void" was thus inaccurate.
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No. 75107-7-1/ 7
largely incoherent.15 In denying the motion, the trial court explained only that
Nguyen "failed to appear or respond." It made no mention of service. Because
Asset Acceptance fails to satisfy the second collateral estoppel element,
collateral estoppel does not bar Nguyen's current challenge.16
Service of Process
Nguyen contends that the default judgment is void because Asset
Acceptance failed to serve him. We agree.
Proper service of the summons and complaint is necessary for the court to
have personal jurisdiction over a party.17 A judgment the court enters without
jurisdiction is void.15 A court must vacate a void judgment regardless of the lapse
of time.19
15 The uGotFICO forms made the conclusory assertion that Nguyen "does
not owe any money to Asset Acceptance LLC." They included an "Affidavit of
Defendant" that amounts to a digressive manifesto on the law and a
"Memorandum of Points and Authorities" that is simply a verbatim copy of CR 60.
16 Even if Asset Acceptance satisfied the first three estoppel elements,
their argument would fail because preclusion would "work an injustice on"
Nguyen. As noted above, Nguyen's motions were forms he obtained from
uGotFICO Inc. Beyond stating Nguyen "was never served with this lawsuit," they
make no legal argument that service was improper, nor did Nguyen submit
evidence. Nguyen's difficulty understanding the proceedings is obvious from the
transcript of the hearing on his second motion. And, as discussed below,
Nguyen's improper service claim has merit.
17 Woodruff V. Spence, 76 Wash. App. 207, 209-10, 883 P.2d 936 (1994).
18 Woodruff, 76 Wash. App. at 209-10.
19 Allstate Ins. Co. v. Khani, 75 Wash. App. 317, 323-24, 877 P.2d 724
(1994).
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No. 75107-7-1 / 8
"When a defendant challenges service of process, the plaintiff has the
initial burden of proof to establish a prima facie case of proper service."20 The
plaintiff can do so by providing the declaration of a process server, "regular in
form and substance."21 The defendant must then show with clear and convincing
evidence that service was improper.22
Under former RCW 4.28.080(15)(1997), a plaintiff may serve a defendant
(1) personally or (2) by leaving a copy of the summons at the defendant's usual
abode with a "person of suitable age and discretion" who resides there.23 The
statute thus has three requirements for substitute service: "(1) the summons
must be left at the defendant's 'house of his or her usual abode'; (2) the
summons must be left with a 'person of suitable age and discretion'; and,(3) the
person with whom the summons is left must be 'then resident therein.'"24 A
"house of usual abode" is "such [a] center of one's domestic activity that service
left with a family member is reasonably calculated to come to one's attention
within the statutory period for [the] defendant to appear.'"25
20 Northwick v. Long, 192 Wash. App. 256, 261, 364 P.3d 1067(2015).
21 Northwick, 192 Wash. App. at 261.
22 Northwick, 192 Wash. App. at 261.
23 Former RCW 4.28.080(15)(1997), recodified as RCW 4.28.080(16).
24 Salts v. Estes, 133 Wash. 2d 160, 164, 943 P.2d 275 (1997) (quoting
former RCW 4.28.080(15)).
25 Streeter-Dvbdahl v. Nguvet Huvnh, 157 Wash. App. 408, 413, 236 P.3d
986 (2010) (second alteration in original) (internal quotation marks omitted)
(quoting Sheldon v. Fettig, 129 Wash. 2d 601, 610, 919 P.2d 1209 (1996)).
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No. 75107-7-1/ 9
Here, Asset Acceptance contends only that it accomplished substitute
service by leaving the summons and complaint with Yen at the Benefit Street
house.
Nguyen does not contest that Yen was a "person of suitable age and
discretion" or that she lived at the Benefit Street house. Whether Asset
Acceptance accomplished substitute service thus depends on whether the
Benefit Street house was Nguyen's "house of usual abode" on March 12, 2009.
We review the record de novo and weigh the evidence each party
presented.26 As prima facie proof that Nguyen lived at the address, Asset
Acceptance relied on the process server's declaration that it left the documents
"at the defendant's/respondent's usual place of abode listed above," 3802 South
Benefit Street. "An affidavit of service, regular in form and substance, is
presumptively correct. The return, however, is subject to attack and may be
discredited by competent evidence."27
Nguyen discredited the proof of service with clear and convincing
evidence that he did not live at the Benefit Street address in March 2009. He
stated in a declaration that he lived at that address "for a few months in 2008" but
moved, first to an address on 33rd Avenue South and then to 255 Powell Avenue
Southwest, Renton. He stated that he lived at the Renton address on March 12,
26 See Scanlan, 181 Wash. 2d at 847, 856.
27 Lee v. W. Processing Co., 35 Wash. App. 466, 469, 667 P.2d 638 (1983).
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No. 75107-7-1 /10
2009. Yen, Nguyen's former landlord, also stated in a declaration that Nguyen
did not reside at the Benefit Street house in March 2009. She said that Nguyen
lived there for only a few months in 2008.28
Nguyen submitted documents corroborating these declarations. His 2008
tax return, filed March 8, 2009, listed 255 Powell Avenue Southwest as his
address.29 His tax preparer mailed the return to that address on the same date.
Nguyen's evidence is particularly strong in light of Asset Acceptance's
complete lack of evidence showing Nguyen lived at the Benefit Street house in
March 2009. Documents from ABC Legal Services show that the company
received information identifying Benefit Street as one of three possible addresses
for Nguyen. Those documents show that Asset Acceptance nonetheless
instructed ABC to "sub-serve regardless" and "on any resident who is 14 years or
older on the 1st attempt." Asset Acceptance's only other evidence supporting the
process server's statement consists of unauthenticated results from an online
skip trace database. These show at least seven potential addresses, six
possible names, and two possible birth dates for Viet Tuan Nguyen. Asset
Acceptance also cites "numerous communications Nguyen had with Asset," but
those communications are from 2012 or later. They do not show where Nguyen
Yen added that she did not know Nguyen by the name Viet Tuan
28
Nguyen, spoke little English at the time, and would not have been able to
communicate effectively with a process server who spoke only English.
29 Nguyen signed his tax returns under penalty of perjury.
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No. 75107-7-1/ 11
lived in March 2009. And the communications do not show the Benefit Street
house as Nguyen's address, further underscoring Asset Acceptance's lack of
evidence.
Asset Acceptance analogizes to Northwick v. Long,3° where this court
found that the defendant failed to show improper service. We distinguish that
case. There, the plaintiff served defendant's father at the father's home. The
defendant asserted he no longer lived there and submitted a declaration from his
father but none from himself.31 Countering this evidence, the plaintiff introduced
deposition testimony from the process server that contradicted the father's
account of the conversation between them about the son's residence.32 The
plaintiff also submitted records showing the father's address as the address on
file for the defendant with the post office and the Department of Licensing. This
court noted the defendant "produced no similar evidence for a different address,"
such as "documentation relating to housing, banking, and other activities highly
probative of domestic activity."33
In contrast, Nguyen did produce such documentation, his sworn tax return
and letter from his tax preparer, each dated three days before the service
attempt. And unlike the defendant in Northwick, Nguyen submitted a declaration
30192 Wash. App. 256, 264, 364 P.3d 1067 (2015).
31Northwick, 192 Wash. App. at 259.
32 Northwick, 192 Wash. App. at 259-60.
33 Northwick, 192 Wash. App. at 264.
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No. 75107-7-1 / 12
from a disinterested person, Yen.34 A declaration from a landlord is an example
of the "documentation relating to housing" that was lacking in Northwick.35
Further, Asset Acceptance presented no evidence, akin to the plaintiff's in
Northwick, that government entities listed the Benefit Street house as Nguyen's
address.
Asset Acceptance's reliance on State ex rel. Coughlin v. Jenkins36 is also
misplaced. The plaintiff in that case presented evidence that after service was
delivered at the address, handwritten correspondence from the defendant
continued to come from the address, mail sent there was never returned, and,
when the plaintiff sent the defendant a blood-sample notice at that address, the
defendant took the requested test on the date set.37 In contrast, Asset
Acceptance submitted no evidence to show that Nguyen continued to correspond
from the Benefit Street house.
Evidence is clear and convincing when its shows "the ultimate fact in
issue . . . to be highly probable.'"38 Nguyen's declaration and the documents he
submitted show it to be "highly probable" that he did not live at the Benefit Street
34 As noted above, Yen and Nguyen are not related, despite Asset
Acceptance's baseless assertions to the trial court and that court's apparent
acceptance of them.
35 See Northwick, 192 Wash. App. at 264.
36 102 Wash. App. 60, 7 P.3d 818 (2000).
37 Coughlin, 102 Wash. App. at 65-66.
38 In re Dependency of S.M.H., 128 Wash. App. 45, 53, 115 P.3d 990 (2005)
(quoting In re Dependency of K.R., 128 Wash. 2d 129, 141, 904 P.2d 1132 (1995)).
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No. 75107-7-1/ 13
address. Nguyen thus met his burden of showing that he was not properly
served.
Asset Acceptance also asks this court to apply the factors identified in
White v. Holm.39 Relying on White, it claims that this court should not vacate the
default judgment because Nguyen "fail[ed] to timely appear" and has not shown
that he did so because of "mistake, inadvertence, surprise or excusable neglect."
It points out that Nguyen first learned about the judgment against him no later
than 2012 but did not obtain counsel until 2016, despite exchanging letters with
Asset Acceptance and filing two motions to vacate and a separate fraud lawsuit.
Asset Acceptance is wrong. As noted above, courts have a
nondiscretionary duty to set aside void default judgments, and "[v]oid judgments
may be vacated regardless of the lapse of time."4°
Because Nguyen was never served, the default judgment is void for lack
of personal jurisdiction. Because a trial court's duty to vacate the void judgment
is nondiscretionary, we need not consider the discretionary White factors,
including whether Nguyen's defense that he is not the obligor on the credit card
account has merit or whether vacation will prejudice Asset Acceptance.
39 73 Wash. 2d 348, 352, 438 P.2d 581 (1968).
4° Leen, 62 Wash. App. at 478; Khani, 75 Wash. App. at 323-24; see CR
55(c)(1); CR 60(b)(5).
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No. 75107-7-1/ 14
Moreover, as Asset Acceptance conceded at oral argument, if the judgment was
void, any orders the trial court based on that judgment are also void.'"
CONCLUSION
Because Asset Acceptance has not shown that the trial court decided the
merits of Nguyen's service of process claim on his prior motions, collateral
estoppel does not apply here. And because Nguyen has shown with clear and
convincing evidence that he did not live at the address where Asset Acceptance
claims it served him, the default judgment against him was void. We reverse and
41 We note that when a court vacates a judgment, "[t]he rights of the
parties are left as though the judgment had never been entered." In re Marriage
of Leslie, 112 Wash. 2d 612, 618, 772 P.2d 1013(1989); see Khani, 75 Wash. App. at
325 (quashing writ of garnishment where underlying judgment was void).
Washington courts interpret the rules of appellate procedure liberally "to promote
justice." RAP 1.2(a); In re Estate of Langeland, 195 Wash. App. 74, 89, 38Q P.3d
573(2016)(ordering restitution), review denied, 187 Wash. 2d 1010 (2017). Where
a party has made payments under a trial court order that an appellate court later
modifies, RAP 12.8 requires the trial court to order restitution "in appropriate
circumstances." See In re Marriage of Hardt, 39 Wash. App. 493, 499, 693 P.2d
1386 (1985). And "when a party must vacate a default judgment before
successfully challenging a writ of garnishment, RCW 6.27.230 allows that party
to recover attorney fees and costs for both proceedings." Khani, 75 Wash. App. at
327.
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No. 75107-7-1/15
remand for vacation of the default judgment and other proceedings consistent
with this opinion.
WE CONCUR:
,
1 / 4 c-J
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