2400 Elliott Llc, V. Vp Elite Construction Llc

• Court: Court of Appeals of Washington
• Decided: March 4, 2024
• Docket: 85205-1
• Status: Unpublished

Opinion

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

2400 ELLIOTT, LLC, a Washington No. 85205-1-I limited liability company, DIVISION ONE Respondent, UNPUBLISHED OPINION v.

VP ELITE CONSTRUCTION, LLC, a Washington limited liability company,

Appellant.

HAZELRIGG, A.C.J. — VP Elite Construction LLC appeals an order that

denied its motion to set aside an order of default, default judgment, and attorney

fee award in favor of 2400 Elliott LLC. Finding no abuse of discretion in the trial

court’s denial of the motion to vacate, we affirm.

FACTS

On September 27, 2021, VP Elite Construction LLC recorded a notice

claiming a lien against property owned by 2400 Elliott LLC under RCW chapter

60.04, mechanics’ and materialmen’s liens. A lien under that statute expires eight

months after recording if the claimant does not sue to enforce it within that time.

RCW 60.04.141. It is undisputed that VP Elite did not timely file an action to

enforce its lien.

In August 2022, after unsuccessfully attempting to persuade VP Elite to file

or deliver a lien release, 2400 Elliott filed the underlying action that sought a No. 85205-1-I/2

declaratory judgment stating that VP Elite’s lien had expired, an order compelling

VP Elite to deliver a lien release, and an award of attorney fees and costs. On

October 5, the trial court found that VP Elite had been properly served but had not

timely “appeared, answered, pleaded, or otherwise defended,” and it declared VP

Elite in default.

On November 21, 2400 Elliott filed a motion for default judgment against

VP Elite. The trial court granted the motion, declared VP Elite’s lien claim “expired

and unenforceable,” ordered VP Elite to deliver an executed lien release within 30

days, and awarded 2400 Elliott its reasonable attorney fees and costs in an amount

to be determined.

On December 1, 2400 Elliott moved to set the amount of the fee award and

noted the matter for a hearing on December 14. The record reflects that 2400

Elliott mailed courtesy copies of its fee motion and the hearing notice to VP Elite’s

principal, Andrey Miroshnik, at the same address where VP Elite was initially

served. 1 VP Elite did not oppose the fee motion and the trial court entered an

order awarding 2400 Elliott attorney fees and costs totaling $28,414.51 at the

conclusion of the hearing.

The record establishes that, by early December 2022, VP Elite was aware

of the default judgment and its significance based on unspecified documents

Miroshnik received in the mail and his consultations with counsel. More than three

months later, on March 20, 2023, VP Elite’s counsel filed a notice of appearance.

1 2400 Elliott was not required to serve its attorney fee motion on VP Elite given that it was

in default. See CR 5(a) (“No service need be made on parties in default for failure to appear except that pleadings asserting new or additional claims for relief against them shall be served upon them in the manner provided for service of summons.”).

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The next day, VP Elite filed a motion to set aside the order of default, the default

judgment, and the order on attorney fees and costs under CR 60. The trial court

denied the motion to vacate, and VP Elite timely appealed. 2

ANALYSIS

I. CR 60 Motion To Vacate

VP Elite contends that the trial court erred by denying the motion to vacate.

We disagree.

CR 60(b) sets forth the limited circumstances under which a trial court may

vacate a final judgment or order. Under CR 60(b)(1), the court may do so based

on “[m]istakes, inadvertence, surprise, excusable neglect or irregularity in

obtaining [the] judgment or order.”3 A motion to vacate under this rule “shall be

made within a reasonable time and . . . not more than 1 year after the judgment

[or] order . . . was entered.” CR 60(b).

We review a trial court’s denial of a CR 60(b) motion to vacate for abuse of

discretion. Haley v. Highland, 142 Wn.2d 135, 156, 12 P.3d 119 (2000). A trial

2 VP Elite’s notice of appeal designated not only the trial court’s order denying the motion

to vacate but also the order of default, the default judgment, and the order on attorney fees and costs. A commissioner of this court dismissed the appeal with regard to these latter three orders, ruling that “[t]hese orders and judgment are not properly within the scope of review in this appeal” and “VP Elite may not challenge the order of default, the default judgment, or the attorney fee order it failed to timely appeal by appealing from the order denying a motion to vacate.” VP Elite did not move to modify the commissioner’s ruling but nevertheless assigns error to the attorney fee order. We do not consider this assignment of error or the argument in support thereof. See Hough v. Ballard, 108 Wn. App. 272, 277 n.3, 31 P.3d 6 (2001) (“If an aggrieved party fails to seek modification of a commissioner’s ruling within the time permitted by RAP 17.7, the ruling becomes a final decision of the court.”). 3 VP Elite also cites CR 60(b)(4) (fraud, misrepresentation, or other misconduct) and

CR 60(b)(11) (any other reason justifying relief) in its opening brief. But, because VP Elite provides no argument related to these distinct sections of the rule, we do not address them further. See Norcon Builders, LLC v. GMP Homes VG, LLC, 161 Wn. App. 474, 486, 254 P.3d 835 (2011) (“We will not consider an inadequately briefed argument.”).

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court abuses its discretion when it exercises it on untenable grounds or for

untenable reasons. Noble v. Safe Harbor Fam. Pres. Tr., 167 Wn.2d 11, 17, 216

P.3d 1007 (2009). The trial court here was well within its discretion to deny VP

Elite’s motion to vacate.

First, the record amply supports the trial court’s finding that VP Elite failed

to file its motion to vacate within a “reasonable time.” 4 VP Elite was aware no later

than early December 2022 that the trial court had entered judgment by default

based on paperwork that 2400 Elliott mailed to Miroshnik. Additionally, Miroshnik

did not deny receiving the earlier documents that the record shows were also

mailed to him by 2400 Elliott, including 2400 Elliott’s motion for default judgment

explaining that VP Elite had been found in default. Miroshnik declared that he did

not act on any previous documents he received because he did not understand

them. But, he did not explain why VP Elite waited another three months to seek

relief once it understood that the court had entered a default judgment, particularly

given that, by the time it did so, the deadline for compliance with the judgment had

already passed by more than 60 days. While VP Elite suggested that its duty to

act under CR 60 was not “trigger[ed]” until 2400 Elliott responded to VP Elite’s

4 2400 Elliott asserts that this finding and a separate finding that VP Elite failed to show

grounds to vacate are verities on appeal because VP Elite did not assign error to them. Although VP Elite did not formally assign error to these findings as required by RAP 10.3(a)(4), it clearly challenged them in its opening brief, and 2400 Elliott fully responded to those challenges. Accordingly, we reach the merits of the argument. See Goehle v. Fred Hutchinson Cancer Rsch. Ctr., 100 Wn. App. 609, 614, 1 P.3d 579 (2000) (“The appellate court will review the merits of the appeal where the nature of the challenge is perfectly clear and the challenged ruling is set forth in the appellate brief.”); see also RAP 1.2(a) (“[The RAPs] will be liberally interpreted to . . . facilitate the decision of cases on the merits.”). To the extent that VP Elite argues that its motion to vacate was timely so long as it was filed within a year, it is incorrect. See Ha v. Signal Elec., 182 Wn. App. 436, 454, 332 P.3d 991 (2014) (“A motion to vacate under CR 60(b)(1) must be filed within a reasonable time and within one year from the judgment.” (emphasis added)).

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request to voluntarily set aside the default, the trial court was well within its

discretion to reject this attempt to place the burden to act on 2400 Elliott. See Ha

v. Signal Elec., 182 Wn. App., 436, 454, 332 P.3d 991 (2014) (“The critical period

is between when the moving party became aware of the judgment and when it filed

the motion to vacate.” (emphasis added)).

As to the attorney fee order, Miroshnik similarly did not deny receiving a

copy of 2400 Elliott’s attorney fee motion or the corresponding hearing notice.

And, even though that motion was still pending at the time VP Elite’s counsel began

corresponding with counsel for 2400 Elliott, VP Elite took no action to oppose it

and instead waited until three months after its entry to seek relief. Furthermore,

VP Elite’s request to vacate the fee order focused on the reasonableness of certain

fees. But, in this appeal from the denial of the motion to vacate, we review only

the propriety of the denial, not the alleged impropriety of the underlying order.

Bjurstrom v. Campbell, 27 Wn. App. 449, 450-51, 618 P.2d 533 (1980). Because

Miroshnik’s declaration did not address, much less explain, VP Elite’s delay in

challenging the fee order, the trial court did not abuse its discretion by declining to

vacate it on the basis that VP Elite did not file its motion within a reasonable time.

Finally, and with regard to the default judgment in particular, VP Elite was

required to show that (1) there was substantial evidence supporting a prima facie

defense, (2) its failure to timely appear and answer was due to mistake,

inadvertence, surprise, or excusable neglect, (3) it acted with due diligence after

notice of the default judgment, and (4) 2400 Elliott would not suffer a substantial

hardship if the court vacated the default judgment. Ha, 182 Wn. App. at 448-49.

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“Factors (1) and (2) are primary; factors (3) and (4) are secondary.” Id. Also, the

“factors are interdependent; thus, the requisite proof that needs to be shown on

any one factor depends on the degree of proof made on each of the other factors.”

Norton v. Brown, 99 Wn. App. 118, 124, 992 P.2d 1019 (1999). Consequently, if

the moving party shows a “‘strong or virtually conclusive defense,’” then “‘the court

will spend little time inquiring into the reasons for the failure to appear and answer,

provided the party timely moved to vacate and the failure to appear was not willful.’”

TMT Bear Creek Shopping Ctr., Inc. v. PETCO Animal Supplies, Inc., 140 Wn.

App. 191, 205, 165 P.3d 1271 (2007) (internal quotation marks omitted) (quoting

Johnson v. Cash Store, 116 Wn. App. 833, 841, 68 P.3d 1099 (2003)).

Conversely, because the primary purpose for requiring a meritorious defense is to

avoid a useless trial, a default judgment should stand if the party seeking to vacate

it can present no defense. See Pfaff v. State Farm Mut. Auto. Ins. Co., 103 Wn.

App. 829, 834, 14 P.3d 837 (2000) (“If a CR 60 movant cannot produce substantial

evidence with which to oppose the claim, there is no point to setting aside the

judgment and conducting further proceedings.”).

Here, VP Elite conceded that its lien had expired and “was absolutely void

and no longer bound” 2400 Elliott’s property. Throughout its briefs in this court,

VP Elite characterizes this concession as a “virtually conclusive defense” to 2400

Elliott’s lawsuit. This characterization is not reasonable. Although VP Elite is

correct that its lien had clearly expired under RCW 60.04.141, which imposes no

obligation to provide a lien release, 2400 Elliott’s lawsuit was not premised on a

statutory obligation to deliver a lien release. Instead, 2400 Elliott sought equitable

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and declaratory relief because VP Elite’s recorded lien notice remained a potential

cloud on title even if the underlying lien was clearly invalid. To this end, VP Elite’s

own counsel confirmed in a declaration submitted in support of the motion to

vacate that at least one title company has incorrectly construed a recorded lien

notice as valid even when it was not, thus requiring his intervention. Far from

establishing a conclusive defense, the record shows that VP Elite had no defense.

See Robinson v. Khan, 89 Wn. App. 418, 423, 948 P.2d 1347 (1998) (cloud on title

is anything “‘that has a tendency, even in a slight degree, to cast doubt upon the

owner’s title’” and includes an “‘encumbrance which is actually invalid or

inoperative, but which may nevertheless impair the title to property’” (emphasis

added) (quoting Whitney v. City of Port Huron, 88 Mich. 268, 272, 50 N.W. 316

(1891); 65 AM. JUR. 2D Quieting Title § 9, at 148 (1972)). This was an independent

reason for the trial court to deny VP Elite’s motion to vacate as it pertained to the

default judgment. The trial court did not abuse its discretion.

II. Fees on Appeal

Both parties request fees on appeal. VP Elite included one sentence in its

brief requesting attorney fees, without citing any authority for its request.

Moreover, VP Elite does not prevail on appeal. Accordingly, we deny its request

for fees. See Phillips Bldg. Co. v. An, 81 Wn. App. 696, 705, 915 P.2d 1146 (1996)

(RAP 18.1(b) “requires more than a bald request for attorney fees on appeal.

Argument and citation to authority are required under the rule.” (citation omitted)).

2400 Elliott requests fees on appeal under RAP 18.9 as a sanction for a

frivolous appeal. “An appeal is frivolous if, considering the entire record, the court

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is convinced that the appeal presents no debatable issues upon which reasonable

minds might differ, and that the appeal is so devoid of merit that there is no

possibility of reversal.” Advocs. for Responsible Dev. v. W. Wash. Growth Mgmt.

Hr’gs Bd., 170 Wn.2d 577, 580, 245 P.3d 764 (2010). We agree with 2400 Elliott

that VP Elite’s appeal is frivolous: VP Elite assigned error to and disputed an order

that this court had already ruled was not within the scope of this appeal. As to its

remaining assignment of error, VP Elite challenged a discretionary ruling that the

record amply supported, relying largely on a frivolous argument that

recharacterized what was in fact was a concession as a defense to the underlying

action in an attempt to satisfy the requirements of CR 60. Accordingly, we grant

2400 Elliott’s request for fees on appeal, 5 subject to its compliance with the

procedural requirements of RAP 18.1.

Affirmed.

WE CONCUR:

5 Because we grant 2400 Elliott’s request under RAP 18.9, we do not address its argument

that it is also entitled to appellate fees under RCW 60.04.071 or RCW 60.04.181(3).

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