Abha Harting, Et Ano, Res. V. International Auto And Car Bazaar, Apps. ( 2023 )


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  • IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
    ABHA HARTING AND JOHN JERROLD
    HORVATH,                                        DIVISION ONE
    Respondent,
    No. 85035-1-I
    v.
    UNPUBLISHED OPINION
    INTERNATIONAL AUTO AND
    BAZAAR, a limited liability company;
    MANINDER PAL S. DAHB and JANE
    DOE DAHB, husband and wife, and the
    marital community composed thereof,
    Appellants.
    GAGANDEEP BAINS and JANE DOE
    BAINS, husband and wife, and the
    marital community composed thereof;
    and GERSON MANUEL G. WAY and
    JANE DOE WAY, husband and wife,
    and the marital community composed
    thereof,           Defendants.
    DWYER, J. — International Auto and Car Bazaar, LLC and Maninder Pal S.
    Dahb appeal the trial court’s denial of a motion to vacate a default judgment
    entered against them and other defendants in a personal injury action. The trial
    court did not err in concluding that Dahb’s conduct did not substantially comply
    with the appearance requirement under the civil procedural rules and the
    appellants otherwise fail to establish a basis to vacate the judgment. We affirm.
    I
    On April 21, 2016, Abha Harting and John Jerrold Horvath sustained
    serious injuries while travelling on Interstate 5 when a tire and wheel detached
    No. 85035-1-I/2
    from a vehicle travelling in the opposite direction, flew over the center divider,
    and struck their vehicle.
    Almost three years later, on April 11, 2019, Harting and Horvath
    (collectively, Harting) filed a lawsuit. The complaint named as defendants
    International Auto and Car Bazaar, LLC (International Auto), the entity that
    purchased the other vehicle, a Mazda, at auction the month before the accident;
    Dahb and Gagandeep Bains, individuals who own and operate International
    Auto; and Gerson Manual G. Way, who allegedly purchased the Mazda a week
    before the accident.1 The complaint alleged negligence and violation of the
    Consumer Protection Act, chapter 19.86 RCW.
    In January 2020, after none of the defendants filed a notice of appearance
    or answered the complaint, Harting filed a motion seeking entry of an order of
    default. Harting supplied evidence that each of the defendants had been served
    with a copy of the summons and complaint and evidence indicating that no
    defendants were engaged in active military service. Harting mailed copies of the
    motion for an order of default to the addresses where Dahb and Baines had been
    personally served, and the envelope mailed to Bains was returned with a notation
    indicating that Baines’s address did not have a mail receptacle. On February 5,
    2020, the court entered an order of default.
    More than two years later, on April 15, 2022, Harting filed a motion for
    entry of a default judgment.2 Harting requested economic damages of
    1 According to the police collision report, an individual not named in the complaint, Mario
    Guillen Moran, was driving the Mazda at the time of the accident.
    2 In December 2021, the superior court clerk dismissed the case without prejudice, since
    more than 45 days had passed after the April 2020 trial date without entry of final orders. See
    2
    No. 85035-1-I/3
    $196,455.29, non-economic damages of $300,000, and an award of attorney
    fees. In support of the motion, Harting supplied the police report, a Department
    of Licensing letter issued to International Auto, and documentary evidence to
    support the damages requested. Harting mailed the motion and notice of the
    hearing to all defendants.3
    On May 2, 2022, the court entered findings of fact, conclusions of law, and
    a default judgment under CR 55(b) in favor of Harting. The court found, among
    other things, that the accident caused by the Mazda’s airborne wheel caused
    serious injuries; that the Department of Licensing determined that International
    Auto failed to comply with certain statutes with respect to the sale and delivery of
    the Mazda; that a 2020 order of default was entered against all defendants; and
    that an expert reviewed the medical records and determined that the medical
    expenditures were reasonable, necessary, and directly related to the 2016
    accident. Based on the documented medical expenditures, the court entered
    judgment in the amount of $196,455.29 and reserved ruling on Harting’s request
    for attorney fees.
    In June 2022, shortly after the trial court denied a motion filed by Harting
    for supplemental litigation costs, Dahb sent a letter to the trial court requesting a
    King County Local Civil Rule (KCLCR) 41(b)(2)(A) (case is subject to dismissal without prejudice
    on clerk’s motion without prior notice if not been disposed of within 45 days after scheduled trial
    date). Harting moved to vacate the dismissal because she believed the trial date had been
    stayed under measures in place during the COVID-19 pandemic. The court granted Harting’s
    motion and set a new trial date.
    3 International Auto and Dahb point out that according to the declaration of service,
    Harting mailed notice of the motion for default judgment to Dahb and International Auto at the
    SeaTac address of the business, but used an incorrect zip code.
    3
    No. 85035-1-I/4
    new court date. Counsel then filed a notice of appearance on behalf of Dahb and
    International Auto.
    In September 2022, International Auto and Dahb filed a motion to vacate
    the default judgment under CR 60(b)(1).4 They argued that although Dahb
    appeared in the proceeding, neither Dahb nor International Auto received proper
    notice of the default order or judgment. In his declaration, Dahb stated:
    After I was served with the Summons and Complaint in this matter
    at my residence in April, 2019, and at the business in May, 2019,
    by legal messenger, I called the attorney who’s [sic] phone number
    was on the summons. I believe I spoke with Joseph Cunnane. I
    explained to him the circumstances surrounding the sale of the
    Mazda[.] His response was “no problem, everything will be taken
    care of”. He also told me he would send me notice of future
    hearings.
    Dahb maintained that he moved to a new residence in early 2020 and did
    not receive the notice mailed to his former address. Dahb and International Auto
    further asserted that, because International Auto sold the Mazda before the
    accident, they had a meritorious defense to the claims.
    Harting opposed the motion and, in an accompanying declaration,
    Harting’s counsel confirmed his telephone contact with Dahb and Bains after
    service of the summons and compliant:
    The Defendants Dahb and Baines each called Plaintiffs’ counsel
    once in April or May of 2019. They acknowledged that they had been
    served with the lawsuit. No representations were made to the
    Defendants.
    4 Under CR 60(b)(1) a court may grant relief from a final judgment or order based on
    “[m]istakes, inadvertence, surprise, excusable neglect or irregularity in obtaining a judgment.”
    4
    No. 85035-1-I/5
    Following a hearing, the trial court denied the motion. International Auto
    and Dahb appeal.5
    II
    A default judgment may be set aside for good cause in accordance with
    CR 60(b).6 CR 55(c)(1). We will not overturn a trial court’s decision on a CR
    60(b) motion to vacate unless it plainly appears that the trial court abused its
    discretion. Luckett v. Boeing Co., 
    98 Wn. App. 307
    , 309, 
    989 P.2d 1144
     (1999).
    A trial court abuses its discretion if its decision is manifestly unreasonable or
    based on untenable grounds. Mayer v. Sto Indus., Inc., 
    156 Wn.2d 677
    , 684, 
    132 P.3d 115
     (2006).
    Default judgments are “generally disfavored in Washington based on an
    overriding policy which prefers that parties resolve disputes on the merits.”
    Showalter v. Wild Oats, 
    124 Wn. App. 506
    , 510, 
    101 P.3d 867
     (2004). At the
    same time, we “value an organized, responsive, and responsible judicial system
    where litigants acknowledge the jurisdiction of the court to decide their cases and
    comply with court rules.” Little v. King, 
    160 Wn.2d 696
    , 703, 
    161 P.3d 345
    (2007). As our Supreme Court has recognized, “litigation is inherently formal,”
    and all parties “are burdened by formal time limits and procedures.” Morin v.
    5 According to the Appellants’ opening brief, Dahb is the “principal owner” and registered
    agent of International Auto. Defendants Bain and Way did not join in the motion to vacate and
    are not parties to this appeal.
    6 Although International Auto and Dahb sought to vacate both the order of default and
    default judgment, their motion was solely based on CR 60(b)(1) and they do not address the
    standard, here or below, for setting aside an order of default under CR 55(c)(1). See In re Est. of
    Stevens, 
    94 Wn. App. 20
    , 30, 
    971 P.2d 58
     (1999) (“The Superior Court Civil Rules provide
    different standards for setting aside orders of default and default judgments.”). To the extent that
    International Auto and Dahb specifically challenge the denial of their motion as to the 2020 order
    of default, the claim is unsupported by argument and we decline to address it.
    5
    No. 85035-1-I/6
    Burris, 
    160 Wn.2d 745
    , 757, 
    161 P.3d 956
     (2007). When balancing the
    competing policies, our primary concern is that a trial court’s decision on a
    motion to vacate is “just and equitable.” Little, 
    160 Wn.2d at 711
    .
    CR 55(a)(3) provides, in relevant part, that “[a]ny party who has appeared
    in the action for any purpose shall be served with a written notice of motion for
    default and the supporting affidavit at least 5 days before the hearing on the
    motion.” It is long-established in Washington that a party is entitled to notice of a
    motion for default judgment where they substantially comply with the appearance
    requirements of CR 4, which may be satisfied informally.7 Morin, 
    160 Wn.2d at 749
    ; Tiffin v. Hendricks, 
    44 Wn.2d 837
    , 843-44, 
    271 P.2d 683
     (1954) (notifying
    only opposing counsel of an appearance was sufficient to require notice of a
    motion for default); State ex rel. Trickel v. Superior Court of Clallam County, 
    52 Wash. 13
    , 14-15, 
    100 P. 155
     (1909) (premature service of interrogatories
    established substantial compliance with appearance requirement and entitled the
    party to notice). If a default judgment is rendered against a party who was
    entitled to, but did not receive, notice, the judgment generally be will be set aside
    without further inquiry. Morin, 
    160 Wn.2d at 749, 754
    . We review questions of
    law de novo, including whether on undisputed facts an appearance has been
    established as a matter of law. Meade v. Nelson, 
    174 Wn. App. 740
    , 750, 
    300 P.3d 828
     (2013).
    7 CR 4(a)(3) provides, in relevant part, that a “notice of appearance, if made, shall be in
    writing, shall be signed by the defendant or the defendant’s attorney, and shall be served upon
    the person whose name is signed on the summons.”
    6
    No. 85035-1-I/7
    It is undisputed that all defendants were properly served with a summons
    and copy of the complaint and no defendants filed an answer or formally
    appeared in the case, but Dahb and Bains each placed a telephone call to
    plaintiff’s counsel following receipt of the summons and complaint. International
    Auto and Dahb rely on Batterman v. Red Lion Hotels, Inc., 
    106 Wn. App. 54
    , 
    21 P.3d 1174
     (2001), abrogated by Morin, 
    160 Wn.2d 745
    , and Colacurcio v.
    Burger, 
    110 Wn. App. 488
    , 
    41 P.3d 506
     (2002), to argue that Dahb substantially
    complied with the appearance requirement when he communicated with
    Harting’s counsel.
    In Batterman, this court upheld a trial court order vacating a default
    judgment in favor of the plaintiff where the plaintiff and the defendant’s agent
    engaged in a course of discussions for more than a year in an attempt to
    negotiate a settlement. 106 Wn. App. at 62. We held that acts are sufficient to
    constitute an informal appearance if they demonstrate “an intent to defend,”
    even if those acts are not “directed towards the court.” Batterman, 106 Wn. App.
    at 60-61. A year later, in Colacurcio, we relied on Batterman and affirmed
    another trial court order vacating a default judgment in favor of the plaintiff. As in
    Batterman, we upheld the trial court’s conclusion that the defendant informally
    appeared through her agent, her insurance company, after the insurer engaged
    in months of settlement negotiations both before and after the litigation was filed.
    Colacurcio, 110 Wn. App. at 491, 497. In both cases, we observed that
    defendants who repeatedly attempted to obtain records to ascertain the value of
    the plaintiff’s claim could not “‘be assumed to have abandoned the possibility of
    7
    No. 85035-1-I/8
    defense.’” Colacurcio, 110 Wn. App. at 496 (quoting Batterman, 106 Wn. App. at
    62).
    International Auto and Dahb fail to acknowledge that the law has changed.
    In Morin, our Supreme Court expressly rejected and abrogated the “doctrine of
    informal appearance” as developed in Batterman and applied in Colacurcio
    because the standard applied in those cases failed to measure substantial
    compliance with the appearance requirement against the fact that “litigation is a
    formal process.” 
    160 Wn.2d at 749
    .
    In Morin, the Supreme Court accepted review of three decisions on
    motions to vacate default judgments based on claims that the defendants’
    substantial compliance with the appearance requirement gave them a right to
    notice of the plaintiffs’ motions for default. The Morin court concluded that,
    prelitigation communication alone is insufficient to constitute an appearance. 
    160 Wn.2d at 749, 757
    . And, addressing postlitigation contacts, the Morin court
    clarified that a defendant served with a summons and complaint “must do more
    than show intent to defend; they must in some way appear and acknowledge the
    jurisdiction of the court after they are served and litigation commences.” 
    160 Wn.2d at 749
    . “Parties must take some action acknowledging that the dispute is
    in court before they are entitled to a notice of default judgment hearing.” Morin,
    
    160 Wn.2d at 757
    . In addressing the parameters of informal appearance, the
    Morin court identified types of postlitigation conduct which courts have
    recognized as substantially complying with the appearance requirement: (1)
    serving interrogatories on the plaintiff despite failing to file a formal notice of
    8
    No. 85035-1-I/9
    appearance, (2) personally appearing in court in a marriage dissolution action to
    oppose a temporary restraining order, (3) serving a demand for security for costs,
    and (4) appearing on a bond in an unlawful detainer action. 
    160 Wn.2d at
    755-
    56.
    Dahb’s conduct in this case does not resemble the extensive and ongoing
    communications in Batterman and Colacurcio, or the litigation activities described
    in Morin. In both Batterman and Colacurcio, the defendant’s agents repeatedly
    sought documentation of the plaintiff’s damages. Dahb, on the other hand,
    placed a single telephone call to plaintiff’s counsel and allegedly explained the
    “circumstances surrounding the sale of the Mazda.” According to Dahb’s own
    account of the conversation, he communicated no clear intent to defend against
    Harting’s legal claims. See Servatron, Inc. v. Intelligent Wireless Prods., Inc.,
    
    186 Wn. App. 666
    , 675, 
    346 P.3d 831
     (2015) (courts “must examine whether a
    defendant’s postlitigation conduct was designed to and, in fact, did apprise the
    plaintiff of the defendant’s intent to litigate the case”). And under current law, a
    defendant must do more than manifest an intent to defend. A named party must
    not only acknowledge that a “dispute exists,” but must take some action that
    acknowledges the existence of a dispute “in court.” Morin, 
    160 Wn.2d at 756
    .
    The record here is devoid of evidence that Dahb intended to participate in the
    litigation, assert a defense, or that he recognized the jurisdiction of the court.
    9
    No. 85035-1-I/10
    The court did not err in concluding that Dahb failed to substantially comply with
    the appearance requirement.8
    III
    International Auto and Dahb alternatively assert that the court was
    required to vacate the default judgment under CR 60(b) based on a meritorious
    defense to Harting’s claims.
    A party seeking to vacate a default judgment under CR 60(b)(1) must
    show that (1) substantial evidence supports at least a prima facie defense to the
    claim asserted by the opposing party; (2) the failure to appear and answer was
    due to mistake, inadvertence, surprise, or excusable neglect; (3) the moving
    party acted with due diligence after notice of the default judgment; and (4) the
    opposing party will not suffer substantial hardship if the default judgment is
    vacated. White v. Holm, 
    73 Wn.2d 348
    , 352, 
    438 P.2d 581
     (1968). The factors
    “vary in dispositive significance as the circumstances of the particular case
    dictate.” White, 
    73 Wn.2d at 352
    . Where the evidence supports a prima facie
    defense, the court will scrutinize more closely the reasons for failure to appear.
    Johnson v. Cash Store, 
    116 Wn. App. 833
    , 842, 
    68 P.3d 1099
     (2003). If the
    moving party does not produce substantial evidence to support even a prima
    8 Even if Dahb substantially complied with the appearance requirement, he could only
    represent his own legal rights and interests. Washington law generally requires individuals
    appearing before the court on behalf of another party to be licensed to practice law. No On I-502
    v. Wash. NORML, 
    193 Wn. App. 368
    , 372-73, 
    372 P.3d 160
     (2016). It is well-established that an
    individual’s right of self-representation does not apply to entities such as corporations and limited
    liability companies, even when there is a sole stakeholder in the entity. Lloyd Enters., Inc. v.
    Longview Plumbing & Heating Co., 
    91 Wn. App. 697
    , 701, 
    958 P.2d 1035
     (1998); Dutch Vill. Mall,
    LLC v. Pelletti, 
    162 Wn. App. 531
    , 539, 
    256 P.3d 1251
     (2011).
    10
    No. 85035-1-I/11
    facie defense, there is no reason for further proceedings. Pfaff v. State Farm
    Mut. Auto. Ins. Co., 
    103 Wn. App. 829
    , 834, 
    14 P.3d 837
     (2000).
    As evidence of their defense, International Auto and Dahb provided an
    application for vehicle title, a retail installment contract, and a Department of
    Licensing form to show that International Auto sold the vehicle shortly before the
    accident. Acknowledging that International Auto held title to the Mazda at the
    time of the incident, they asserted that “[t]itle and registration certificates are only
    rebuttable prima facie evidence of automobile ownership” and maintained that
    they could have sought dismissal of the plaintiff’s claims because they did not
    control or possess the vehicle. See Wildman v. Taylor, 
    46 Wn. App. 546
    , 556-
    57, 
    731 P.2d 541
     (1987) (certificates of registration and title of an automobile are
    “only prima facie evidence of ownership which could be rebutted” and “physical
    possession” is not “conclusive”).
    However, at most, this evidence provided a potential basis to challenge
    liability, not a prima facie defense. See Little, 
    160 Wn.2d at 704-05
     (prima facie
    defense requires more than speculation regarding the existence of a defense).
    And while International Auto and Dahb contend on appeal that the complaint
    alleged no facts to support Dahb’s personal liability, they identified no defense
    specific to Dahb below. We generally decline to consider arguments not
    presented to the trial court. See RAP 2.5(a) (“The appellate court may refuse to
    review any claim of error which was not raised in the trial court.”).
    Moreover, International Auto and Dahb wholly fail to address their failure
    to respond to the pleadings after being properly served. And they discuss the
    11
    No. 85035-1-I/12
    factors of due diligence and substantial hardship only in reply. Cowiche Canyon
    Conservancy v. Bosley, 
    118 Wn.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.”). On this briefing, we need not address the remaining White
    factors. See Rosander v. Nightrunners Transp., Ltd., 
    147 Wn. App. 392
    , 409, 
    196 P.3d 711
     (2008) (affirming denial of motion to vacate where defendant failed to
    present a prima facie defense and failed to show excusable neglect without
    addressing secondary White factors); see also Brooks v. Univ. City, Inc., 
    154 Wn. App. 474
    , 479-80, 
    225 P.3d 489
     (2010) (affirming refusal to set aside default
    order where court tenably concluded the defendant failed to show excusable
    neglect). International Auto and Dahb fail to meet their burden under White or
    establish an equitable basis to vacate the judgment. The trial court did not err.
    We affirm.
    WE CONCUR:
    12
    

Document Info

Docket Number: 85035-1

Filed Date: 11/6/2023

Precedential Status: Non-Precedential

Modified Date: 11/14/2023