Iliad, Inc., V. Valhalla Construction & Recycling ( 2024 )

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
ILIAD, INC., a Washington corporation, No. 85496-8-I
Respondent, DIVISION ONE
v. UNPUBLISHED OPINION
VALHALLA CONSTRUCTION AND
RECYCLING INC., a Washington
corporation,
Appellant.
FELDMAN, J. — Valhalla Construction and Recycling Inc. (Valhalla) appeals
from a trial court’s order releasing its mechanics’ lien and awarding attorney fees
to Iliad, Inc. (Iliad). The order was entered pursuant to a summary proceeding
authorized by RCW 60.04.081, which allows an owner of real property to challenge
a mechanics’ or materialmen’s lien as frivolous or excessive. Valhalla asserts that
the trial court (a) erred in failing to dismiss the proceeding for insufficient process
and (b) wrongly determined that its lien is frivolous. We agree with Valhalla’s first
argument and therefore do not reach its second. Accordingly, we reverse the trial
court’s order releasing Valhalla’s mechanics’ lien and awarding attorney fees and
remand for the trial court to dismiss the proceeding for insufficient process.
Valhalla entered into a contract with Iliad to provide various clearing and
grubbing services on a condominium project for a base contract price of
No. 85496-8-I
$122,190.00. Iliad paid, and Valhalla accepted, payments for the work totaling
$112,771.00. Valhalla then filed a mechanics’ lien on the project property under
RCW 60.04 to secure an alleged unpaid balance of $186,974.30. In response,
Iliad filed a motion under RCW 60.04.081 to release the lien as frivolous or clearly
excessive. While service of process is disputed (as discussed herein), there is no
dispute that Valhalla had actual notice of the proceeding. It filed a notice of
appearance asserting “Lack of jurisdiction over the person/party” and “Insufficiency
of service of process” and asserted these defenses in its response to Iliad’s motion.
The trial court rejected these defenses and granted Iliad’s motion. Valhalla
appeals.
The primary method of service to a corporation that is not subject to other
specific methods of service is to serve a copy of the summons on the “president or
other head of the company or corporation, the registered agent, secretary, cashier
or managing agent thereof or to the secretary, stenographer or office assistant of
the president or other head of the company or corporation, registered agent,
secretary, cashier or managing agent.” RCW 4.28.080(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.” Streeter-Dybdahl
v. Nguyet Huynh, 157 Wn. App. 408, 412, 236 P.3d 986 (2010) (quoting Woodruff
v. Spence, 76 Wn. App 207, 209, 883 P.2d (1994)). “An affidavit of service is
presumptively correct, and the challenging party bears the burden of showing
improper service by clear and convincing evidence.” Woodruff, 76 Wn. App. at
210. “Whether service of process . . . was proper is an issue we review de novo.”
Pascua v. Heil, 126 Wn. App. 520, 527, 108 P.3d 1253 (2005).
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The undisputed evidence shows that Valhalla was not properly served. To
establish proper service of process, Iliad filed in the trial court a declaration of
service stating, “John Doe male was outside of address when first approached.
Male went inside house and refused to answer door. Posted order to show cause
on door, and drop served remainder in front of door as instructed. Male watched
from window.” Iliad’s attorney also filed a declaration stating, “On May 12, 2023,
my office emailed to John Babbitt, the President of Defendant Valhalla, a copy of
all the pleadings our office is filing with the Court today.” And lastly, Iliad’s attorney
testified by declaration, “On May 18, 2023, my office also sent a hard copy of the
pleadings . . . to Defendant via UPS 2nd day air mail, with requisite tracking.” This
clear and convincing evidence shows that Iliad failed to serve a copy of its
pleadings on a person in a role enumerated in RCW 4.28.080(9). Instead, it utilized
other procedures—posting, dropping, mail, and e-mail—that are not prescribed by
or sufficient under RCW 4.28.080(9).
Iliad recognizes, as it must, that “Valhalla correctly cites the language of
RCW 4.28.080(9).” It nevertheless fails to argue or establish that it complied with
the procedure prescribed by RCW 4.28.080(9). Instead, it points to a different
statute, RCW 60.08.080(4), which states that “The applicant must give notice of
the hearing to the lien claimant by providing copies of the motion, order, and any
other documents filed with the court, to the lien claimant by first-class mail, by
certified or registered mail, or by personal service.” The fatal flaw in this argument
is that Iliad filed its motion to release Valhalla’s mechanics’ lien under RCW 60.04,
which (appropriately here) is entitled and relates to “mechanics’ and materialmen’s
liens.” The service of process statute cited by Iliad, in contrast, is set forth in RCW
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60.08, which is entitled and relates to “chattel liens.” Because the lien at issue
here is a mechanics’ lien and not a chattel lien, Iliad’s reliance on RCW
60.08.080(4) is wholly misplaced.
Next, Iliad points to the trial court’s finding that Valhalla “had due notice of
these proceedings, has appeared in these proceedings, and has availed
themselves of the court process.” The trial court further noted, “There is no dispute
that [Valhalla] is aware of these proceedings, received the same submissions that
the undersigned received, and had adequate time to respond as outlined in the
statutory timeframe.” The trial court’s ruling does not address the statutory service
requirements. Instead, it is couched in due process terms. Washington law is
clear that a litigant must satisfy both due process and statutory service
requirements. See Weiss v. Glemp, 127 Wn.2d 726, 734, 903 P.2d 455 (1995)
(“[B]eyond due process [requirements], statutory service requirements must be
complied with in order for the court to finally adjudicate the dispute between the
parties.”) (quoting Thayer v. Edmonds, 8 Wn. App. 36, 40, 503 P.2d 1110 (1972)).
The trial court here addressed the former, but not the latter.
Finally, because we conclude that the trial court erred in failing to dismiss
the lien proceeding for insufficient process, we vacate the trial court’s award of
attorney fees in Iliad’s favor. For similar reasons, we also deny Valhalla’s request
for attorney fees on appeal. RAP 18.1 permits the recovery of reasonable fees “[i]f
applicable law grants to a party the right to recover” such fees. The relevant portion
of RCW 60.04.081(4) states: “If the court determines that the lien is not frivolous
and was made with reasonable cause, and is not clearly excessive, the court shall
issue an order so stating and awarding costs and reasonable attorneys’ fees to the
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lien claimant to be paid by the applicant.” RCW 60.04.081(4). Because we have
not addressed or decided this substantive issue, the statute does not grant Valhalla
the right to recover its fees and expenses on appeal.
Reversed and remanded to dismiss for insufficient process.
WE CONCUR:
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