Verbena Health, Res. v. Michelle L. Malkin, App. ( 2013 )


Menu:
  •                                                                 ,*   i!   i _' '
    rn^TDF APPEALS'):* .
    USWE0FWA3H!HGT0H
    2013k?%-\ AH 9*53
    IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
    DIVISION ONE
    VERBENA HEALTH,                                 No. 68179-6-1
    Respondent,
    v.
    MICHELLE L. MALKIN,                             UNPUBLISHED OPINION
    Appellant.                         FILED: April 1,2013
    Verellen, J. — Michelle Malkin appeals the trial court's grant of summary
    judgment to Verbena Health based on her misappropriation of funds. Malkin contends
    that Verbena, a dissolved nonprofit corporation, did not have standing to pursue an
    action against her and did not properly serve the summons and complaint, rendering the
    judgment void for lack of personal jurisdiction. But the record reflects Verbena timely
    filed suit and service of process was adequate. Malkin also claims the trial court erred
    in drawing adverse inferences against her because she invoked the Fifth Amendment
    privilege. Because Verbena presented undisputed factual evidence of Malkin's financial
    malfeasance, summary judgment was proper, without any consideration of the negative
    inference. We affirm.
    FACTS
    Verbena was a nonprofit organization that provided community health services to
    the lesbian, gay, bisexual and transgender community. Michelle Malkin was the
    No. 68179-6-1/2
    executive director, responsible for the organization's budget and overall financial health.
    In early 2008, interim treasurer David Haack attempted to recruit a certified public
    accountant to join the board of directors, but Malkin refused to show Verbena's financial
    records to the board candidate. Staff began to receive calls from vendors, creditors,
    donors and grant recipients informing Verbena of bounced checks and delinquent
    payments. On May 13, 2008, Verbena closed its doors because it could not meet its
    financial commitments. The board learned that Verbena's bank account had been
    depleted, that Malkin had made payments to unauthorized accounts, and that
    suspicious charges from casinos and cruise lines filled Verbena's bank statements.
    The Secretary of State administratively dissolved Verbena on August 3, 2009.
    Based on the board's review of Verbena's financial documents, a complaint was
    filed on June 17, 2010 alleging Malkin misused Verbena funds by (1) withdrawing funds
    from automated teller machines (ATMs) for gambling at casinos; (2) charging personal
    expenses to Verbena accounts; (3) withdrawing cash for personal expenses from
    Verbena's checking account; and (4) issuing Verbena checks to herself, to Tammy
    Kaiser (Malkin's domestic partner), and to a variety of businesses owned by Malkin and
    Kaiser, including TKK Consulting, MLM Consulting, and Ripcord Enterprises. Verbena
    alleged causes of action for conversion, breach of fiduciary duty, breach of contract,
    breach of duty of good faith and fair dealing, fraud, unjust enrichment, embezzlement,
    and tortious interference with contractual relations/business expectancy.
    Service of the Complaint
    Verbena hired a private detective to locate Malkin and serve the summons and
    complaint. The detective, Brett Starr, obtained information linking Malkin to a residence
    No. 68179-6-1/3
    at 224 Willow Park Way in Buffalo Grove, Illinois. Starr determined Malkin had two
    possible cotenants, Alice Lundquist and Janet Lundquist. Starr's affidavit of service
    states that he visited the residence in Buffalo Grove to attempt service on June 17,
    2010, and June 20, 2010. On June 17, Starr spoke with Alice Lundquist, who informed
    Starr that Malkin was out of the area, but in the state.
    On June 20, Starr returned to the residence and again spoke with Alice
    Lundquist. Lundquist told Starr she had been unable to reach Malkin. After verifying
    that Malkin lived at the residence, Starr "served a copy of the summons and complaint
    .. . upon the defendant's co-tenant Alice Lundquist."1
    Malkin answered the complaint and asserted affirmative defenses, among them
    that Verbena lacked standing to bring the action, and that "Plaintiff has failed to secure
    sufficient process upon defendant."2
    Discovery
    Verbena served requests for production, interrogatories, and requests for
    admission on Malkin, including discovery of her current residence. To each request for
    production and interrogatory, Malkin answered, "Defendant objects to the request [as]
    implicating Defendant's Fifth Amendment rights against self-incrimination. Objection is
    noted also on grounds of lack of standing of Plaintiff to bring this lawsuit and of
    Plaintiffs failure to acquire personal jurisdiction ofthe Defendant."3 Malkin provided the
    1Clerk's Papers at 113-14. Starr also left a voicemail on the cell phone he had
    associated with Malkin, detailing the service of process at the Buffalo Grove residence
    and notifying Malkin she had 60 days to respond to the complaint.
    2Clerk's Papers at 20.
    3Clerk's Papers at 95-103.
    No. 68179-6-1/4
    identical answer to Verbena's 11 requests for admission. Malkin then served a
    discovery request on Verbena, seeking information about its board and organizational
    status, and requesting documentation of the alleged wrongdoing.
    Verbena deposed Malkin on September 2, 2011. After stating her name, Malkin
    refused to answer each and every question, including questions directed to determine
    Malkin's affirmative defense of insufficient service of process. Malkin's response to
    each question during the deposition was, "I respectfully decline to answer based on my
    Fifth Amendment right against self-incrimination."4
    Verbena's Motion for Summary Judgment
    Verbena moved for summary judgment on October 20, 2011. Verbena based its
    motion on the documents it had gathered from its files, including Washington Mutual
    bank statements highlighting the allegedly unauthorized withdrawals; allegedly
    unauthorized checks issued by Malkin to herself and her partner, MLM Consulting, TKK
    Consulting and Ripcord Enterprises; and correspondence from Malkin to her partner
    regarding Malkin's personal debt. Verbena argued it was entitled to judgment based
    upon substantive evidence of financial wrongdoing, coupled with the negative inference
    of Malkin's reliance on the Fifth Amendment.
    Malkin opposed summary judgment, asserting insufficient service of process and
    arguing Verbena could not prosecute the action as a dissolved nonprofit organization.
    In support of her service of process defense, Malkin submitted the declaration of Alice
    Lundquist. Lundquist testified she lived at the Buffalo Grove residence with Malkin, as
    4Clerk's Papers at 56-73.
    No. 68179-6-1/5
    Starr had identified. However, Lundquist testified Malkin began attending school in
    another part of the state in early June 2010 and had arranged to have mail forwarded to
    a different address. On June 16,5 when Starr arrived at the Buffalo Grove residence,
    Lundquist told Starr that Malkin would be away for at least a few months. On June 20,
    when Starr returned, Lundquist told Starr that Malkin would not return to the Buffalo
    Grove residence until at least sometime in August. Lundquist closed the door, and Starr
    rang the doorbell and banged on the door. Lundquist was frightened to open the door
    again. After Starr left, Lundquist opened the door to find papers between the screen
    door and front door.
    The trial court granted summary judgment and entered judgment for Verbena in
    the amount of $80,000 plus prejudgment interest. Malkin appeals, contending the court
    erred in granting summary judgment.
    DISCUSSION
    We review de novo a trial court's decision on summary judgment, performing the
    same inquiry as the trial court.6 We may affirm an order granting summary judgment on
    any basis supported by the record.7
    5Starr identified the first attempt at service as June 17, rather than June 16.
    6 Lvbbert v. Grant County. 
    141 Wash. 2d 29
    , 34, 
    1 P.3d 1124
     (2000). We view all
    facts and reasonable inferences therefrom most favorably toward the nonmoving party.
    \&, If the pleadings, affidavits, and depositions establish that there is no genuine issue as
    to any material fact and the moving party is entitled to judgment as a matter of law, a
    court may grant summary judgment. Id.; CR 56(c). If the nonmoving party fails to
    controvert material facts supporting the summary judgment motion, those facts are
    considered to be established. Cent. Wash. Bank v. Mendelson-Zeller. Inc., 113Wn.2d
    346, 354, 
    779 P.2d 697
     (1989).
    7 LaMon v. Butler. 
    112 Wash. 2d 193
    , 200-01, 770 P.2d 1027(1989).
    No. 68179-6-1/6
    Verbena's Standing
    As a threshold matter, Malkin contends Verbena does not have standing to
    prosecute the lawsuit because (1) David Haack did not have authority under
    RCW 24.03.465 to act on Verbena's behalf; and (2) Verbena's lawsuit does not fall
    within the limitations of RCW 23B. 14.050, which permits a dissolved corporation to carry
    on business only to wind up and liquidate its business and affairs.8 Neither of Malkin's
    arguments is persuasive.
    The Washington Nonprofit Corporation Act, chapter 24.03 RCW (the Act),
    provides a two-year window after dissolution in which a nonprofit organization may
    pursue claims or defend liabilities incurred prior to dissolution:
    The dissolution of a corporation ... shall not take away or impair any
    remedy available to ... such corporation, its directors, officers, or
    members, for any right or claim existing, or any liability incurred, prior to
    such dissolution if action or other proceeding thereon is commenced
    within two years after the date ofsuch dissolution.[9]
    Verbena was administratively dissolved on August 3, 2009. Verbena filed suit on
    June 17, 2010, well within the two-year window required by RCW 24.03.300.
    The Act also provides that the directors and officers of a nonprofit "shall have
    power to take such corporate or other action as shall be appropriate to protect such
    8 Malkin also argues that Verbena violated RCW 24.03.300 because the complaint
    recites "Verbena Health" rather than its official corporate name of "Verbena."
    (RCW 24.03.300 allows a dissolved nonprofit corporation to pursue claims "in its
    corporate name.") We decline to consider this issue, as it was raised for the first time in a
    reply brief. Cowiche Canvon Conservancy v. Boslev. 
    118 Wash. 2d 801
    , 809, 
    828 P.2d 549
    (1992) ("An issue raised and argued for the first time in a reply brief is too late to warrant
    consideration.").
    9 RCW 24.03.300.
    No. 68179-6-1/7
    remedy, right or claim."10 The organization acts either through a meeting ofthe board
    members, or by recorded consent of the board:
    Any action required by this chapter to be taken at a meeting of the
    members or directors of a corporation, or any action which may be taken
    at a meeting of the members or directors, may be taken without a meeting
    if a consent in the form of a record, setting forth the action so taken, shall
    be executed by all of the members entitled to vote with respect to the
    subject matter thereof, or all ofthe directors, as the case may be.[11]
    Haack stated in his declaration that he served as the chair of Verbena's board of
    directors. An agent may testify as to the scope of his actual authority to act for the
    principal.12 Malkin does not present any evidence to contradict Haack's testimony. The
    record contains minutes from a May 10, 2008 meeting of Verbena's board of directors,
    which Haack attended.13 The minutes reflect a proposed motion to retain an attorney to
    represent Verbena in a lawsuit against Malkin, a motion to accept the resolution, a
    seconding ofthe motion, and a unanimous vote in favor.14
    Nothing in the record suggests that Verbena did not follow proper procedure
    under the Act before initiating its lawsuit, or that Haack did not have authority to act on
    behalf of Verbena as chairman of the board.
    Malkin also argues the substance of Verbena's lawsuit is improper, as it is not
    aimed at winding up or liquidating Verbena's business or affairs. Malkin relies on
    10 RCW 24.03.300.
    11 RCW 24.03.465.
    12 Blake Sand &Gravel. Inc. v. Saxon. 
    98 Wash. App. 218
    , 222, 
    989 P.2d 1178
    (1999) (quoting Restatement (Second) of Agency § 285 cmt. a (1958)).
    13 Malkin did not object to authenticity of the board meeting minutes.
    14 Verbena redacted the subsequent meeting minutes addressing the content and
    strategy of the lawsuit.
    No. 68179-6-1/8
    RCW 23B.14.050, a provision of the Washington Business Corporation Act. But the
    applicable section of the Act grants Verbena authority to pursue remedies for any claim
    that existed before dissolution. The board learned of Malkin's alleged wrongdoing in
    May 2008, well before its August 3, 2009 dissolution. Verbena sued Malkin in June
    2010, well within the two-year period allowed. The court did not err in determining
    Verbena could sue Malkin.
    Service of Process
    Malkin argues that even if Verbena has standing to sue, Verbena failed to
    properly serve her with the summons and complaint. Verbena offers three alternative
    theories supporting service of process: (1) valid substitute service; (2) waiver of the
    service-of-process defense through inconsistent conduct; and (3) waiver based on
    Malkin's invocation of the Fifth Amendment privilege. Because the record contains
    undisputed facts establishing proper substitute service, we do not reach either of the
    waiver theories.1516
    15 Although we do not reach waiver based on inconsistent conduct, waiver under
    Lvbbert is questionable. The doctrine is "designed to prevent a defendant from
    ambushing a plaintiff during litigation either through delay in asserting a defense or
    misdirecting the plaintiff away from a defense for tactical advantage." King v. Snohomish
    County. 
    146 Wash. 2d 420
    , 424, 
    47 P.3d 563
     (2002) (citing Lvbbert. 141 Wn.2d at 40).
    Even if a defendant has properly asserted the defense in a responsive pleading or motion
    under CR 12(b)(5), a defendant may waive the defense if "(1) assertion of the defense is
    inconsistent with defendant's prior behavior or (2) the defendant has been dilatory in
    asserting the defense." Id^ (citing Lvbbert. 141 Wn.2d at 39). While Malkin refused to
    respond substantively to Verbena's discovery on the service-of-process issue, she
    consistently alerted Verbena in her discovery responses that she intended to rely on
    service of process as an affirmative defense. While Malkin did not move to dismiss, she
    relied upon the defense in her opposition to Verbena's motion for summary judgment.
    She did not fail to assert it in a summary judgment proceeding like the defendant in King.
    Malkin propounded discovery on the merits, seeking information about Verbena's board
    and organizational status and requesting documentation of the alleged wrongdoing. But
    8
    No. 68179-6-1/9
    "Proper service of the summons and complaint is a prerequisite to the court
    obtaining jurisdiction over a party, and a judgment entered without such jurisdiction is
    void."17 Whether service of process was proper is a question of law we review de
    novo.18 Where a defendant asserts improper service before judgment is entered, rather
    than to attack a judgment already entered, a plaintiff's affidavit of service is not
    presumptively correct.19 When a defendant raises the defense of service of process in
    the summary judgment context, as Malkin has here, the usual summary judgment rules
    apply. We must therefore determine whether genuine issues of material fact exist as to
    engaging in discovery is not, by itself, "'tantamount to conduct inconsistent with a later
    assertion of the defense.'" Lvbbert. 141 Wn.2d at 41 (quoting Romiue v. Fairchild. 
    60 Wash. App. 278
    , 281, 
    803 P.2d 57
     (1991)). While Malkin could have been forthcoming in
    articulating the details of her defense in her discovery responses, her failure to do so did
    not "misdirect[ ] the plaintiff away from a defense for tactical advantage." King. 146
    Wn.2d at 424.
    16 Washington courts have not addressed the invocation ofthe Fifth Amendment
    as the basis for waiver of inadequate service of process. Federal courts recognize that
    defendants may not advance facts in support of their position and then use the Fifth
    Amendment to shield themselves from any discovery as to those same facts. See, e.g..
    In re Edmond. 
    934 F.2d 1304
    , 1308-09 (4th Cir. 1991) ("the Fifth Amendment privilege
    cannot be invoked as a shield to oppose depositions while discarding it for the limited
    purpose of making statements to support a summary judgment motion"); United States v.
    Parcels of Land. 
    903 F.2d 36
    , 42-44 (1st Cir. 1990) (striking defendant's affidavit because
    defendant could not shield his account of the "facts" from scrutiny by invoking the Fifth
    Amendment at his deposition); S.E.C. v. Benson. 
    657 F. Supp. 1122
    , 1129 (S.D.N.Y
    1987) ("it would be abuse of the Fifth Amendment privilege to allow a civil litigant to use it
    to offer proofs while denying the adversary discovery of his contentions").
    17 Woodruff v.Spence. 
    76 Wash. App. 207
    , 209, 
    883 P.2d 936
     (1994).
    18 Pascua v. Heil. 
    126 Wash. App. 520
    , 527, 
    108 P.3d 1253
     (2005).
    19 Farmery. Davis. 
    161 Wash. App. 420
    , 428-29, 
    250 P.3d 138
    . review denied. 
    172 Wash. 2d 1019
     (2011) (an affidavit of service is presumptively correct where defendant
    challenges service of process after entry of judgment).
    No. 68179-6-1/10
    the sufficiency of substitute service, when viewing the admissible portions of Starr's and
    Lundquist's declarations in the light most favorable to Malkin, the nonmoving party.20
    A plaintiff may effectuate substitute service "by leaving a copy of the summons at
    the house of his or her usual abode with some person of suitable age and discretion
    then resident therein."21 The term "usual place of abode" means the "'center of one's
    domestic activity'" such that service left with some person of suitable age "'is reasonably
    calculated to come to one's attention within the statutory period for [the] defendant to
    appear.'"22
    Verbena submitted Starr's affidavit of service, stating that Starr "served a copy of
    the summons and complaint. . . upon the defendant's co-tenant Alice Lundquist" at the
    Buffalo Grove residence.23 Starr determined the residence was Malkin's place of abode
    through commercial database reports and Verizon cell phone records listing the
    residence as Malkin's home.
    Malkin relied upon Lundquist's declaration, which provides more detail about
    Starr's activity. Lundquist testified that on June 17, 2010, she told Starr that Malkin
    lived at the Buffalo Grove residence until June 2, 2010, that Malkin left to attend school
    in another part of the state, and that Malkin arranged to have her mail forwarded.
    Lundquist's declaration states, "Malkin was not there [in Buffalo Grove] and . . . she
    20 Neither the trial court nor this court will weigh the evidence or assess witness
    credibility on a motion for summary judgment. Barker v. Advanced Silicon Materials,
    LLC. 
    131 Wash. App. 616
    , 624, 
    128 P.3d 633
     (2006).
    21 RCW 4.28.080(15).
    22 Sheldon v. Fettig. 
    129 Wash. 2d 601
    , 610, 
    919 P.2d 1209
     (1996) (quoting Sheldon
    v. Fettiq. 
    77 Wash. App. 775
    , 781, 
    893 P.2d 1136
     (1995)).
    23 Clerk's Papers at 113-14.
    10
    No. 68179-6-1/11
    would be away from the area for at least a couple of months."24 When Lundquist
    returned on June 20, Lundquist "repeated that Ms. Malkin would not be at this address
    until at least some time in August."25 Lundquist closed the door, and Starr rang the
    doorbell and knocked again. Lundquist refused to open the door again, and Starr left
    the papers between the screen door and front door.
    Viewing all admissible evidence of service in a light most favorable to Malkin—
    i.e., assuming (1) that Starr's statement that he "served" Lundquist meant he left the
    summons by the door rather than hand-to-hand delivery; and (2) that Malkin was away
    at school temporarily but was coming back to live at the Buffalo Grove residence
    sometime during or after August 2010—Verbena effectuated substitute service.26
    Hand-to-hand service is not necessary if there is a clear attempt by the process
    server to "yield possession and control of the documents" while the process server is
    "positioned in a manner to accomplish this act."27 In United Pacific Insurance Co. v.
    Discount Co.. the defendant answered the door, and the process server established the
    defendant's identity.28 The defendant asked, "What do you want?" and the process
    24 Clerk's Papers at 384.
    25 Clerk's Papers at 385.
    26 If factual disputes exist concerning service of process, the court must hold an
    evidentiary hearing. Woodruff. 76 Wn. App. at 210 (a trial court abuses its discretion by
    failing to hold an evidentiary hearing when affidavits present an issue of fact requiring a
    witness credibility determination). Although the declarations of Starr and Lundquist
    provide different accounts of Starr's service, we are not required to remand for an
    evidentiary hearing because the undisputed facts support substitute service.
    27 United Pac. Ins. Co. v. Discount Co.. 
    15 Wash. App. 559
    , 561-62, 
    550 P.2d 699
    (1976).
    28 
    15 Wash. App. 559
    , 560-61, 
    550 P.2d 699
     (1976).
    11
    No. 68179-6-1/12
    server told her he had legal papers for her.29 The defendant slammed the door as the
    process server held out the papers, and the papers fell to the ground.30 The court held
    that service was effective, reasoning:
    The facts of the case at bench demonstrate a clear attempt by the
    process server to yield possession and control of the documents to
    [defendant] while he was positioned in a manner to accomplish that act.
    Normal 'delivery' thereof would have been effected upon [defendant]
    except for her obvious attempt to evade service by slamming the door
    after the papers had been held out to her. The summons need not actually
    be placed in the defendant's hand. We find, as did the trial court, that
    facts in the record support a conclusion that 'delivery' occurred and
    service was effected.'313
    Here, Starr was positioned at the open door, but Lundquist shut the door and refused to
    reopen it. Consistent with United Pacific, although Starr may not have placed the papers
    in Lundquist's hand, delivery occurred.
    The Buffalo Grove residence also functioned as Malkin's usual place of abode.
    The policy behind substitute service is to ensure that service left with some person of
    suitable age "'is reasonably calculated to come to one's attention within the statutory
    period for [the] defendant to appear.'"32 Once an abode is established, it "is presumed
    to continue until it is shown to have been changed by acquiring another permanent
    29 Id at 561.
    30 Id
    31 Id. at 561-62: cf. Haberman v. Wash. Pub. Power Supply Svs., 109Wn.2d 107,
    177-78, 
    744 P.2d 1032
     (1987) (insufficient service of process where process server left
    papers at defendant's place of abode when no person of suitable age or discretion was
    present at all); Weiss v Glemp. 
    127 Wash. 2d 726
    , 731-34, 
    903 P.2d 455
     (1995) (leaving
    papers on windowsill when no one would come to the door is inadequate substitute
    service.).
    32 Sheldon. 129 Wn.2d at 610 (quoting Sheldon. 77 Wn. App. at 781).
    12
    No. 68179-6-1/13
    abode."33 Lundquist testified Malkin lived at the residence but was away at school for a
    few months, until at least August 2010.
    In Sheldon, the court analyzed whether the defendant had been properly served
    at her family home in Seattle while she was away in Chicago at a flight attendant
    training program.34 The court noted the following facts were "indicia of one's center of
    domestic activity": the defendant registered her car at the Seattle address, she listed
    the Seattle address on her car insurance, and she returned home frequently.35
    Like the defendant in Sheldon, the Buffalo Grove residence was Malkin's center
    of domestic activity. Commercial database reports and Verizon cell phone records
    listed it as her residence. And Lundquist testified Malkin had arranged for mail received
    at the Buffalo Grove residence to be forwarded to her at school, so that, consistent with
    the voicemail Starr left on Malkin's cell phone, Lundquist had a ready means to insure
    Malkin had prompt notice, allowing her to appear within the 60-day statutory period.36
    Under all of these circumstances, there are sufficient indicia that the Buffalo Grove
    residence remained Malkin's center of domestic activity.
    Summary Judgment on the Merits
    Verbena moved for summary judgment on the claims of breach of contract,
    breach of fiduciary duty, breach of duty of good faith and fair dealing, conversion, and
    fraud. In support of its claims, Verbena submitted bank statements showing $29,637.89
    33 Nw. & Pac. Hypotheek Bank v. Ridpath. 
    29 Wash. 687
    , 710-11, 
    70 P. 139
    (1902).
    34 Sheldon. 129 Wn.2d at 604, 608-10.
    35 Id at 610.
    36 RCW 4.28.180.
    13
    No. 68179-6-1/14
    in unauthorized expenditures, with at least $13,000 of that amount stemming from
    charges from a trip to Las Vegas in November 2007; unauthorized withdrawals from
    ATMs near Seattle-area casinos amounting to $11,638.5037; checks written by Malkin
    from Verbena accounts to herself and Kaiser in the amount of $18,803.71; and checks
    written by Malkin from Verbena accounts to TKK Consulting, MLM Consulting, and
    Ripcord Enterprises in the amount of $16,780.
    Malkin provided no substantive evidence to defeat Verbena's claims. While
    Malkin raised evidentiary objections to Verbena's evidence of her misconduct, she has
    neither assigned error to nor provided argument about the court's evidentiary rulings or
    the judgment amount. Instead, she argues the court was not entitled to draw negative
    inferences from her exercise of the Fifth Amendment privilege.
    We find it unnecessary to reach the application of the negative inference
    because Verbena met its evidentiary burden without any negative inference.38 We also
    37 Verbena's spreadsheet states the total unauthorized ATM withdrawals as
    $11,738.50, but the underlying documentation supports a total of $11,638.50. Compare
    Clerk's Papers 85 with 194 (the 5/5 charge from Goldies was $403, not $503).
    38 Our Supreme Court recognized the existence of the negative inference based
    on a defendant's exercise of the Fifth Amendment. Ikeda v. Curtis. 
    43 Wash. 2d 449
    , 458-
    59, 
    261 P.2d 684
     (1953) (holding that once a witness in a civil suit has invoked his or her
    Fifth Amendment privilege against self-incrimination, the trier of fact is entitled to draw an
    adverse inference from the refusal to testify). No Washington cases address the use of
    such an inference in a summary judgment context, but federal courts have. See, e.g..
    S.E.C. v. Colello, 
    139 F.3d 674
    , 677-79 (9th Cir. 1998) ("Parties are free to invoke the
    Fifth Amendment in civil cases, but the court is equally free to draw adverse inferences
    from their failure of proof."); United States v. Certain Real Prop. & Premises Known as
    4003-4005 5th Ave.. Brooklyn. NY. 
    55 F.3d 78
     (2d Cir. 1995) ("the claim of privilege will
    not prevent an adverse finding or even summary judgment if the litigant does not present
    sufficient evidence to satisfy the usual evidentiary burdens in the litigation."); Wright,
    Charles Alan, etal, 8 Fed. Prac. &Proc. Civ. § 2018, at 288 (3d ed.) ("In some cases if
    a party claims the privilege and does not give his or her own evidence there will be
    14
    No. 68179-6-1/15
    note that Malkin's choice to rely on the Fifth Amendment instead of disputing the claims
    on the merits does not invade her Fifth Amendment rights.39 Malkin had the choice
    between offering evidence to attempt to create a genuine issue of material fact for trial,
    or losing on summary judgment. She chose the latter.
    Verbena had standing to sue Malkin. Undisputed facts support substitute service
    of process. Adequate evidence established Malkin's misappropriation of funds, entitling
    Verbena to summary judgment.
    Affirmed.
    WE CONCUR:
    Sjr (L ,yrl &, t cv^
    nothing to support his or her view of the case and an adverse finding or even a directed
    verdict or grant of summary judgment will be proper.").
    39 "That the defendant faces such a dilemma demanding a choice between
    complete silence and presenting a defense has never been thought an invasion ofthe
    privilege against compelled self-incrimination.'" United States v. Rvlander, 
    460 U.S. 752
    ,
    759, 
    103 S. Ct. 1548
    , 
    75 L. Ed. 2d 521
     (1983) (emphasis omotted) (quoting Williams v.
    Florida. 
    399 U.S. 78
    , 83-84, 
    90 S. Ct. 1893
    , 26 L Ed. 2d 446 (1970»: see also Baldwin v.
    Sisters of Providence in Wash.. Inc.. 
    112 Wash. 2d 127
    , 132, 
    769 P.2d 298
     (1989) (a party
    wishing to defeat summary judgment may not rely on mere allegations and must set forth
    specific facts establishing there is a genuine issue for trial).
    15