A.B., J.L., V. Kiwanis International
This text of A.B., J.L., V. Kiwanis International (A.B., J.L., V. Kiwanis International) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
Filed Washington State Court of Appeals Division Two
September 4, 2024 IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION II C.C., an individual, No. 57207-9-II
Appellants,
A.B., an individual; D.E.F., an individual; M.R., an individual; J.L., an individual; B.F., as guardian for K.F., an individual; C.B., an individual; A.M., an individual,
Plaintiffs, v. UNPUBLISHED OPINION KIWANIS INTERNATIONAL, a non-profit entity; KIWANIS PACIFIC NORTHWEST DISTRICT, a non-profit entity; KIWANIS OF TUMWATER, a non-profit corporation; KIWANIS OF CENTRALIA-CHEHALIS, a non-profit entity; KIWANIS OF UNIVERSITY PLACE, a non-profit entity; KIWANIS VOCATIONAL HOME, a nonprofit entity; LEWIS COUNTY YOUTH ENTERPRISES, INC. d/b/a Kiwanis Vocational Homes for Youth, a non-profit corporation; BARBARA THOMPSON as Personal Representative for the ESTATE CHARLES MCCARTHY; EDWARD J. HOPKINS, an individual; UNITED WAY OF PIERCE COUNTY, d/b/a CHILDREN’S INDUSTRIAL HOME and/or COFFEE CREEK CENTER; COFFEE CREEK CENTER, a non- profit entity; CHILDREN’S INDUSTRIAL HOME d/b/a COFFEE CREEK CENTER, non- profit entity; MENTOR HOUSE, d/b/a CHILDREN’S INDUSTRIAL HOME and/or COFFEE CREEK CENTER, a nonprofit entity; STATE OF WASHINGTON; STATE OF WASHINGTON, DEPARTMENT OF SOCIAL AND HEALTH SERVICES, DEPARTMENT CHILDREN, YOUTH AND FAMILY SERVICES, CHILD PROTECTIVE SERVICES, governmental entities,
Respondents. No. 57207-9-II
CHE, J. ⎯ CC appeals a summary judgment order in favor of the Kiwanis Defendants.
CC, who was subject to abuse at the foster care group home known as Kiwanis Vocational Home
for Youth (KVH), alleged that the KVH governing boards were negligent in hiring and
supervising KVH employees and negligent in treating and supervising KVH residents. He further
claimed that this negligence proximately caused the abuse. CC brought a lawsuit against various
Kiwanis entities1 (Kiwanis Defendants) arguing that they were vicariously liable for the
aforementioned negligence. Specifically, CC contended that the Kiwanis Defendants were in an
actual or apparent agency relationship with the KVH boards.
The Kiwanis Defendants moved for summary judgment arguing that the corporate
dissolution survival statute, RCW 23B.14.340, is a statute of repose, which barred liability
against the now dissolved KVH boards, and that bar extended to them. They also argued that
there was no actual or apparent agency relationship between the Kiwanis Defendants and the
KVH Boards. The trial court granted summary judgment in favor of the Kiwanis Defendants.
CC appeals arguing that summary judgment dismissal of the Kiwanis Defendants was
inappropriate because the corporate dissolution survival statute is not a statute of repose and even
if it was it does not extend to bar the Kiwanis Defendants from vicarious liability and that
genuine issues of material fact exist as to whether an actual or apparent agency relationship
existed between the Kiwanis Defendants and the KVH boards. CC also attempts to argue that the
Kiwanis Defendants are KVH’s alter ego.
1 The Kiwanis entities named in the complaint are as follows: Kiwanis International, Kiwanis Pacific Northwest District (KPNW), Kiwanis of Tumwater, Kiwanis of Centralia-Chehalis— which was formerly two separate clubs of those respective areas, and Kiwanis of University Place. CP at 660-62.
2 No. 57207-9-II
We hold that (1) RCW 23B.14.340 is a statute of repose but that it provides a personal
defense that does not bar vicarious liability claims against the Kiwanis Defendants on procedural
grounds, (2) there is a genuine issue of material fact regarding whether an actual agency
relationship between KVH and Kiwanis International existed, (3) there is a genuine issue of
material fact regarding whether an apparent agency relationship between KVH, Kiwanis
International, and the local clubs existed, and (4) CC’s alter ego argument is not properly before
us. We affirm the grant of summary judgment as to Kiwanis Pacific Northwest District
(KPNW). But we reverse the trial court’s summary judgment order as to Kiwanis International
and the local clubs and remand the matter for the trial court to conduct further proceedings
consistent with this opinion.
FACTS
Lewis County Youth Enterprises (LCYE) was a Washington nonprofit corporation, doing
business as Kiwanis Vocational Homes for Youth (KVH). Beginning operation in December
1979, KVH “provided residential care for teenage boys in need of supervision and treatment for
problems caused by emotional and behavioral difficulties.” Clerk’s Papers (CP) at 3283. The
Kiwanis Defendants—comprised of Kiwanis International, KPNW, and several local Kiwanis
clubs—had a long-complicated relationship with LCYE and KVH. LCYE and KVH each had a
board of directors, and both boards were involved in the management of the vocational home.
CC, a resident at KVH sometime around 1988-1989, was subject to abuse during his time
at KVH. In 2020, CC filed a lawsuit against the Kiwanis Defendants, among others. CC alleged
that the Kiwanis Defendants negligently breached special relationship duties they owed to the
KVH residents during his time at KVH.
3 No. 57207-9-II
CC also contended that KVH and its boards—the LCYE Board and the KVH Board—
were negligent in hiring and retaining staff and negligent in the treatment and supervision of
KVH residents. CC argued that the Kiwanis Defendants were liable for the aforementioned
negligence of the LCYE Board and the KVH Board because each of the Kiwanis Defendants
were the actual and apparent principals of the boards. CC also brought claims against Charles
McCarthy, the executive director of KVH who was in charge of day-to-day operations, in his
individual capacity.
The Kiwanis Defendants moved for summary judgment dismissal of CC’s claims against
them, arguing that (1) they did not have a special relationship with the children at KVH, (2) they
lacked an agency relationship with KVH, its boards, and any other negligent actors, and
(3) RCW 23B.14.340 is a statute of repose that bars CC’s untimely claims. CC responded,
notably including an argument that the Kiwanis Defendants were liable under the alter ego
doctrine. The alter ego basis for liability was not in CC’s complaint.2
At the summary judgment hearing, the trial court specifically determined that the
Kiwanis Defendants did not have a special relationship with CC. In all relevant aspects to this
appeal, the trial court granted summary judgment for the Kiwanis Defendants.
CC’s claims against McCarthy went to a jury trial. CC argued that McCarthy had a duty
to protect CC from third party sexual assault because he had a “special relationship” duty with
the children at KVH. CP at 5282. CC then argued that McCarthy breached that duty by failing
2 CC’s sophisticated counsel did not move to amend the complaint to add the alter ego theory. The Kiwanis Defendants did not address the alter ego in their reply brief. And CC did not raise the alter ego theory referenced in his response brief at the summary judgment hearing.
4 No. 57207-9-II
to provide reasonable protection to CC by (1) failing to employ proper oversight of the hiring
Free access — add to your briefcase to read the full text and ask questions with AI
Filed Washington State Court of Appeals Division Two
September 4, 2024 IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION II C.C., an individual, No. 57207-9-II
Appellants,
A.B., an individual; D.E.F., an individual; M.R., an individual; J.L., an individual; B.F., as guardian for K.F., an individual; C.B., an individual; A.M., an individual,
Plaintiffs, v. UNPUBLISHED OPINION KIWANIS INTERNATIONAL, a non-profit entity; KIWANIS PACIFIC NORTHWEST DISTRICT, a non-profit entity; KIWANIS OF TUMWATER, a non-profit corporation; KIWANIS OF CENTRALIA-CHEHALIS, a non-profit entity; KIWANIS OF UNIVERSITY PLACE, a non-profit entity; KIWANIS VOCATIONAL HOME, a nonprofit entity; LEWIS COUNTY YOUTH ENTERPRISES, INC. d/b/a Kiwanis Vocational Homes for Youth, a non-profit corporation; BARBARA THOMPSON as Personal Representative for the ESTATE CHARLES MCCARTHY; EDWARD J. HOPKINS, an individual; UNITED WAY OF PIERCE COUNTY, d/b/a CHILDREN’S INDUSTRIAL HOME and/or COFFEE CREEK CENTER; COFFEE CREEK CENTER, a non- profit entity; CHILDREN’S INDUSTRIAL HOME d/b/a COFFEE CREEK CENTER, non- profit entity; MENTOR HOUSE, d/b/a CHILDREN’S INDUSTRIAL HOME and/or COFFEE CREEK CENTER, a nonprofit entity; STATE OF WASHINGTON; STATE OF WASHINGTON, DEPARTMENT OF SOCIAL AND HEALTH SERVICES, DEPARTMENT CHILDREN, YOUTH AND FAMILY SERVICES, CHILD PROTECTIVE SERVICES, governmental entities,
Respondents. No. 57207-9-II
CHE, J. ⎯ CC appeals a summary judgment order in favor of the Kiwanis Defendants.
CC, who was subject to abuse at the foster care group home known as Kiwanis Vocational Home
for Youth (KVH), alleged that the KVH governing boards were negligent in hiring and
supervising KVH employees and negligent in treating and supervising KVH residents. He further
claimed that this negligence proximately caused the abuse. CC brought a lawsuit against various
Kiwanis entities1 (Kiwanis Defendants) arguing that they were vicariously liable for the
aforementioned negligence. Specifically, CC contended that the Kiwanis Defendants were in an
actual or apparent agency relationship with the KVH boards.
The Kiwanis Defendants moved for summary judgment arguing that the corporate
dissolution survival statute, RCW 23B.14.340, is a statute of repose, which barred liability
against the now dissolved KVH boards, and that bar extended to them. They also argued that
there was no actual or apparent agency relationship between the Kiwanis Defendants and the
KVH Boards. The trial court granted summary judgment in favor of the Kiwanis Defendants.
CC appeals arguing that summary judgment dismissal of the Kiwanis Defendants was
inappropriate because the corporate dissolution survival statute is not a statute of repose and even
if it was it does not extend to bar the Kiwanis Defendants from vicarious liability and that
genuine issues of material fact exist as to whether an actual or apparent agency relationship
existed between the Kiwanis Defendants and the KVH boards. CC also attempts to argue that the
Kiwanis Defendants are KVH’s alter ego.
1 The Kiwanis entities named in the complaint are as follows: Kiwanis International, Kiwanis Pacific Northwest District (KPNW), Kiwanis of Tumwater, Kiwanis of Centralia-Chehalis— which was formerly two separate clubs of those respective areas, and Kiwanis of University Place. CP at 660-62.
2 No. 57207-9-II
We hold that (1) RCW 23B.14.340 is a statute of repose but that it provides a personal
defense that does not bar vicarious liability claims against the Kiwanis Defendants on procedural
grounds, (2) there is a genuine issue of material fact regarding whether an actual agency
relationship between KVH and Kiwanis International existed, (3) there is a genuine issue of
material fact regarding whether an apparent agency relationship between KVH, Kiwanis
International, and the local clubs existed, and (4) CC’s alter ego argument is not properly before
us. We affirm the grant of summary judgment as to Kiwanis Pacific Northwest District
(KPNW). But we reverse the trial court’s summary judgment order as to Kiwanis International
and the local clubs and remand the matter for the trial court to conduct further proceedings
consistent with this opinion.
FACTS
Lewis County Youth Enterprises (LCYE) was a Washington nonprofit corporation, doing
business as Kiwanis Vocational Homes for Youth (KVH). Beginning operation in December
1979, KVH “provided residential care for teenage boys in need of supervision and treatment for
problems caused by emotional and behavioral difficulties.” Clerk’s Papers (CP) at 3283. The
Kiwanis Defendants—comprised of Kiwanis International, KPNW, and several local Kiwanis
clubs—had a long-complicated relationship with LCYE and KVH. LCYE and KVH each had a
board of directors, and both boards were involved in the management of the vocational home.
CC, a resident at KVH sometime around 1988-1989, was subject to abuse during his time
at KVH. In 2020, CC filed a lawsuit against the Kiwanis Defendants, among others. CC alleged
that the Kiwanis Defendants negligently breached special relationship duties they owed to the
KVH residents during his time at KVH.
3 No. 57207-9-II
CC also contended that KVH and its boards—the LCYE Board and the KVH Board—
were negligent in hiring and retaining staff and negligent in the treatment and supervision of
KVH residents. CC argued that the Kiwanis Defendants were liable for the aforementioned
negligence of the LCYE Board and the KVH Board because each of the Kiwanis Defendants
were the actual and apparent principals of the boards. CC also brought claims against Charles
McCarthy, the executive director of KVH who was in charge of day-to-day operations, in his
individual capacity.
The Kiwanis Defendants moved for summary judgment dismissal of CC’s claims against
them, arguing that (1) they did not have a special relationship with the children at KVH, (2) they
lacked an agency relationship with KVH, its boards, and any other negligent actors, and
(3) RCW 23B.14.340 is a statute of repose that bars CC’s untimely claims. CC responded,
notably including an argument that the Kiwanis Defendants were liable under the alter ego
doctrine. The alter ego basis for liability was not in CC’s complaint.2
At the summary judgment hearing, the trial court specifically determined that the
Kiwanis Defendants did not have a special relationship with CC. In all relevant aspects to this
appeal, the trial court granted summary judgment for the Kiwanis Defendants.
CC’s claims against McCarthy went to a jury trial. CC argued that McCarthy had a duty
to protect CC from third party sexual assault because he had a “special relationship” duty with
the children at KVH. CP at 5282. CC then argued that McCarthy breached that duty by failing
2 CC’s sophisticated counsel did not move to amend the complaint to add the alter ego theory. The Kiwanis Defendants did not address the alter ego in their reply brief. And CC did not raise the alter ego theory referenced in his response brief at the summary judgment hearing.
4 No. 57207-9-II
to provide reasonable protection to CC by (1) failing to employ proper oversight of the hiring
and supervision of KVH employees, (2) allowing a person to remove CC from KVH to take CC
to a motel without verifying the person’s background or establishing safety mechanisms, and
(3) taking CC to McCarthy’s own home and sexually abusing him.
The jury found McCarthy was grossly negligent and that the negligence proximately
caused the abuse that occurred to CC. The jury awarded $375,000 in damages to CC.
CC appeals the summary judgment order dismissing the Kiwanis Defendants.
Below, we summarize the evidence in the record regarding the Kiwanis organizational
structure, KVH and its organizational structure, the ability of the Kiwanis Defendants to control
KVH, and the State’s understanding of the relationship between the Kiwanis Defendants and
KVH.
I. KIWANIS ORGANIZATIONAL STRUCTURE
The Kiwanis Defendants are comprised of different entities with different functions:
Kiwanis International, KPNW—a Kiwanis regional district, and local Kiwanis clubs.
A. Kiwanis International
Kiwanis International is a corporation that occasionally selects and supports global civic
service projects. Kiwanis International owns the name, logo, and other marks of Kiwanis.
Kiwanis International allows local clubs to use the name in connection with their service
projects. “Third party entities outside of the Kiwanis family of service clubs may not use the
name and logo without Kiwanis International’s permission.” CP at 1126. “Kiwanis
International does not have the authority to determine, dictate, or decide which service projects
the local clubs provide to the local community.” CP at 1126.
5 No. 57207-9-II
But Kiwanis International retains the exclusive right to create new local clubs, to require
local clubs to maintain certain standards and practices via adoption of the model bylaws, and to
approve local club bylaws and amendments to those bylaws. And Kiwanis International may
revoke a local club’s charter for violating the local club’s bylaws or Kiwanis International’s
constitution and bylaws. A 1984 Kiwanis International policies document provided that no local
clubs or districts “may sponsor beyond the club level any organization, except Circle K, Key
Club or Kiwanianne.” CP at 1261.
The 1980, 1985, and 1987 Kiwanis constitutions provided that Kiwanis International had
the power “To create, supervise, and control chartered clubs and districts or other groups of
chartered clubs and divisions thereof.” CP at 1183. The constitutions also provided that “the
word Kiwanis, and the name, emblem, and/or insignia of Kiwanis International shall not be used
for any purpose other than that authorized by the Board of Trustees.” CP at 1193.
The 1985 Kiwanis International bylaws provided that “Kiwanis International has the
exclusive right to control . . . usage of the Kiwanis Marks by a chartered club and to control the
nature, quality, and uniformity of the services and membership of chartered clubs in connection
with which the Kiwanis Marks are used.” CP at 2761. The amended 1988 constitution allowed
use of the Kiwanis name and marks with “the written consent of Kiwanis International.” CP at
1205.
Kiwanis International interacts with local Kiwanis clubs by collecting dues, approving
their articles of incorporation and bylaws, offering them support, and requiring them to submit
reoccurring reports. The 1980 Kiwanis International bylaws state that Kiwanis International has
the responsibility to purchase “comprehensive general liability insurance program for the
6 No. 57207-9-II
protection of Kiwanis clubs, their members, and Kiwanis-sponsored organizations and
activities.” CP at 2682. And Kiwanis International purchased such insurance.
B. Regional Districts
Kiwanis International creates and organizes districts, which are corporate entities
autonomous from Kiwanis International, and the districts “do not operate or supervise local clubs
located in their geographic area.” CP at 1124. The Kiwanis districts (1) serve as liaisons
between Kiwanis International and local clubs, (2) promote the growth of new and existing local
clubs, and (3) act as a mediator for the internal conflict within local clubs or among them. Some
Kiwanis districts select civic service projects to encourage clubs within the district to support.
The Kiwanis International internal governance director stated that KPNW, a district, never
selected KVH as a service project.
Kiwanis districts lack the authority to authorize third parties, which may include service
project organizations, to use the name and trademark of Kiwanis International. Kiwanis district
bylaws and articles of incorporation—but not their internal procedures—must be approved by
Kiwanis International. Kiwanis International retains the power to disband Kiwanis districts and
clubs. The members of Kiwanis districts are the local Kiwanis clubs.
C. Local Clubs
To form a local club, Kiwanis International or a Kiwanis district will visit an area to find
potential members who are interested in forming a local club, or groups may apply to Kiwanis
International to form a local Kiwanis club. The newly formed clubs adopt their own bylaws,
which are generally based off Kiwanis International’s model bylaws. Kiwanis International
decides whether to approve the bylaws before deciding to grant a charter to the local club.
7 No. 57207-9-II
Local Kiwanis clubs are members of Kiwanis International—but the members of the
local clubs are not members of Kiwanis International. Local clubs are expected to comply with
Kiwanis International’s constitution and bylaws. If Kiwanis International received credible
allegations that a local club violated Kiwanis International’s constitution or bylaws, Kiwanis
International “may investigate and take corrective steps” and it has the authority to withdraw a
local club’s charter. CP at 1123.
Local Kiwanis clubs select civic service projects to support based on the needs of their
local community. The internal governance director of Kiwanis International believed that local
clubs considered KVH to be a service project and stated that KVH “appears to be” a service
project. CP at 2592. When asked whether local clubs control their service projects, the internal
governance director responded that a club may or may not control a service project as service
projects vary widely, including merely fundraising or volunteering with another organization.
But the internal governance director also stated that KVH, as a service project, would be bound
by the Kiwanis bylaws, constitution, and internal policies and procedures.3
II. KVH AND ITS BOARDS
KVH had two boards: the LCYE Board and the Centralia-Grand Mound-Rochester,
Chehalis, Tumwater, Kiwanis Vocational Homes for Youth Board (KVH Board). The bylaws of
the KVH Board and LCYE Board mandated that the respective boards were to be comprised of
Kiwanis club members.
3 An overview committee dealt with public relations relating to KVH. The committee’s monthly meeting minutes from November 1988 stated KVH is “a project for Kiwanis International.” CP at 3045. But the significance of this statement is not clear, and more generally, it is unclear who authored this document.
8 No. 57207-9-II
A. The LCYE Board
In June 1977, LCYE was incorporated. LCYE was doing business as KVH.4 In 1978,
McCarthy was hired as the executive director of KVH. According to McCarthy’s job
description, he “ha[d] the responsibility of personnel management including hiring, termination,
training of all employees and volunteers of the [KVH] and being accountable for their actions.”
CP at 1817. That same document also provided, “[t]he director must be accountable to his Board
of Directors,” among others. CP at 1817. A volunteer psychologist at KVH, in 1990, opined
that McCarthy essentially had complete control over the business and management of KVH.
McCarthy believed only the LCYE Board could fire him.
The LCYE bylaws provided, “the purpose and mission of this corporation shall continue
to be the operation of group homes for youth in Washington State doing business as Kiwanis
Vocational Homes for Youth.” CP at 1295. The bylaws also provided that all corporate power,
including “direction and management of all affairs of the corporation” of KVH was vested in the
LCYE Board. CP at 2627.
However, the LCYE bylaws also provided, “The role of the Board shall be to set general
policy and guidelines for the operation of individual group homes, not to become involved in the
direct management and operation of the homes.” CP at 1299. But in September 1989, LCYE
elected a board member to represent the LCYE Board regarding personnel issues at KVH; the
board member would arbitrate grievances not satisfied through the normal chain of command at
4 LCYE is a holding corporation for KVH. It owns “all the lands, buildings, building contents, and vehicles at K.V.H.” CP at 1276.
9 No. 57207-9-II
In 1990, the LCYE Board was comprised of all Kiwanis club members, including Sam
Morehead. In an April 2018 deposition, Morehead—a former member of the KVH Board and
LCYE Board—stated that local Grand Mound Rochester Kiwanis club placed members on either
the LCYE Board or KVH Board with the intent to control the “day-by-day operations” of KVH.5
CP at 2657.
In November 1990, the State Office of Special Investigation (OSI) found that rampant
illegal misconduct occurred at KVH. For example, OSI found that McCarthy hit a student,
McCarthy misappropriated state funds, staff assaulted students, the child care and social service
staff did not meet the minimum education and experience requirements, and McCarthy failed to
report crimes occurring, among many other problems.
McCarthy remained the director of KVH until December 1990. Under a management
agreement between Children’s Industrial Home and KVH, Claude Carlson of Children’s
Industrial Home became the new executive director of KVH. In September 1993, KVH changed
its name to Coffee Creek Center. Children continued to be placed at Coffee Creek Center. In
June 2010, LCYE was administratively dissolved.
B. KVH Board
In February 1986, the KVH Board was incorporated. The KVH Board was formed to
help raise start-up money for KVH. The KVH Board supported KVH by soliciting goods for the
operation of KVH.
5 The Kiwanis Defendants cite to a transcript not in our record for the proposition that Morehead later recanted his statement in a January 2021 deposition, stating “the board was not for the day- to-day operations of the home.” Br. of Resp’t at 17. In any event, the local Grand Mound/Rochester Kiwanis club is not a party to this litigation.
10 No. 57207-9-II
The KVH Board was made up of Kiwanis members. According to the bylaws, the KVH
Board had the right to direct “the business and affairs” of the corporation and was also vested
with “[a]ll corporate power and authority of the corporation.” CP at 2602-03. But some
individuals referred to this board as the KVH Advisory Board. Board members were somewhat
unsure about their duties. There was an internal dispute about whether the KVH Board was in
fact advisory.
One board member, Henry Meister, believed the KVH Board had management powers
and stated that the board was negligent in not exercising those powers. In June 1989, the KVH
Board determined that it was in fact advisory. In May 1991, the KVH Board was
administratively dissolved. In a January 2017 deposition, Cornwell, a onetime KVH director,
stated that the KVH Board was essentially not involved in KVH.
III. THE KIWANIS DEFENDANTS’ RIGHTS TO CONTROL KVH
Next, we examine the facts regarding the level of control the Kiwanis Defendants had
over KVH and its boards—organized by: the contract between Kiwanis International and KVH,
the support for the formation and ongoing operations of KVH, the use of Kiwanis name, and the
Kiwanis investigation of KVH.
A. Kiwanis International’s Contract with KVH
In May 1988, Kiwanis International agreed to KVH’s continued use of the Kiwanis name
and logo. The parties entered into a contract to this end. In essence, in exchange for the
continued use of the Kiwanis name, KVH agreed to a set of conditions, including (1) KVH and
“its members will at all times recognize, abide by, and observe as effectively binding upon itself
and its members the Constitution, Bylaws and Policies of Kiwanis International”, (2) KVH “will
11 No. 57207-9-II
from time to time upon the request of [Kiwanis International] . . . amend its bylaws to eliminate
therefrom any conflict with Constitution and Bylaws of Kiwanis International”, (3) Kiwanis
International could require KVH to dissolve or change its corporate form at any time, (4) and
KVH could not amend its articles of incorporation without Kiwanis International’s written
consent. CP at 3033.
The governance specialist for Kiwanis International stated, “Nowhere in this contract
does KVH agree to submit to the control or supervision of Kiwanis International, nor did
Kiwanis International have any mechanism to control or supervise KVH under this contract.”
CP at 1127. It is unclear what mechanisms existed to ensure KVH’s compliance with Kiwanis
International’s agreement.
B. Support for Formation and Ongoing Operations
Many of the local Kiwanis clubs helped support the formation of KVH and its ongoing
operation.6 Generally, the local Kiwanis clubs provided various kinds of support for KVH, like
providing building materials, clothes, medical services, counseling services, food, some financial
contributions, and other personal effects. The State provided the primary monetary support for
KVH. In an August 1987 letter to KPNW, the KVH attorney, George Darkenwald, wrote that
there was a consensus among the founders of KVH that the objectives of KVH were those of the
Kiwanis.
6 A KVH pamphlet opined that the founding of KVH was born of the interest of the local Kiwanis clubs.
12 No. 57207-9-II
C. Use of the Kiwanis Name
In 1979, the KPNW Board minutes evidence that the KPNW Board believed that for
KVH to use the Kiwanis name and marks, particularly in the context of fundraising for LCYE,
KVH had to be “strictly and entirely a Kiwanis project.” CP at 2538. But that statement did not
express that KVH was, in fact, “strictly and entirely a Kiwanis project.” CP at 2538.
Nonetheless, KVH appeared to use the Kiwanis name without Kiwanis International’s
permission until 1988. But generally, local Kiwanis clubs could have used the Kiwanis name
with service projects, and the local clubs believed KVH was a service project.
In January and February 1987, KPNW sent letters expressing concerns about ensuring
that Kiwanis International, KPNW, and the local clubs did not incur liability for the acts of
KVH. The letters specifically concerned themselves with KVH’s use of the Kiwanis name. In
August 1987, KVH reached out to KPNW for aid in acquiring formal permission for the
continued use of the Kiwanis name. In this communication, the KVH attorney stated, “when
people in the community and in local and state government hear the name Kiwanis Vocational
Home they think of the high ideals and principles of Kiwanis, and of the dedication and skill
Kiwanians devote to the goals of Kiwanis.” CP at 2525.
Sometime thereafter, KVH requested formal permission from Kiwanis International for
use of the Kiwanis name. In the letter requesting permission, McCarthy stated, that KVH
cherished the Kiwanis name and the name was “most vital in continuance of our endeavors.”
CP at 2544-45. To that end, McCarthy opined that changing the name of KVH would cause a
six-month delay of state funding. As previously mentioned, Kiwanis International entered into a
contract with KVH allowing KVH’s continued use of the Kiwanis name. McCarthy retired
13 No. 57207-9-II
shortly thereafter. A 1990 internal memo from the OSI investigation evidenced that Kiwanis
International would have revoked KVH’s right to continue using the Kiwanis name if KVH did
not terminate McCarthy.
D. Kiwanis Investigations
In September 1984, the Department of Social and Health Services (DSHS) published a
performance audit of KVH, finding that KVH did not comply with several material contract
requirements. In July 1985, the local Kiwanis club in Centralia became concerned about KVH’s
use of the Kiwanis name and requested insurance policies relating to KVH, correspondence
about the use of the Kiwanis name, information about KVH’s accounts payable, and a copy of
KVH’s articles of incorporation and bylaws. That month, McCarthy responded essentially
asserting that he was responsible only to the LCYE Board. He declined to send the local
Centralia club the requested information, and he informed the club that KVH would nevertheless
continue using the Kiwanis name.
After two local Kiwanis clubs withdrew their support from KVH, KPNW formed an
investigative committee to investigate allegations about sexual abuse of residents, improper
manipulations of business records, and other administrative malfeasance. The committee’s
mission was to save KVH “‘and protect the Kiwanis name.’” CP at 3079. In July 1990, the
committee issued its report, finding that no evidence showed that sexual abuse occurred at KVH.
The committee issued a series of recommendations for KVH. Nothing in the record suggests that
KVH viewed these recommendations as binding requirements.
14 No. 57207-9-II
IV. THE STATE’S UNDERSTANDING OF THE RELATIONSHIP BETWEEN KVH AND KIWANIS
Mark Redal, the regional administrator for the Division of Children and Family Services
(DCFS) within DSHS from 1984-94, submitted a declaration attesting to the following facts.
Redal received letters from McCarthy in which McCarthy used the Kiwanis logo, marks,
and name. Redal recalled that Kiwanis International and local Kiwanis clubs “met with DSHS
personnel at various points to ensure that [KVH] was a safe and reliable placement facility for
wards of the State.” This left Redal with the impression that Kiwanis International and the local
clubs “definitely had more than a name-only interest.” He explained, “Their additional eyes and
ears on the facility gave me the impression that they also shared our concerns that policies were
being adhered to and that issues were brought forward for resolution when problems arose.” CP
at 3433.
DCFS staff wrote a letter endorsing KVH to KPNW. In his declaration, Redal surmised
that when DCFS decides which group homes to develop and support, “Proposals with the
backing of entities like Kiwanis probably had more potential to be developed as resources.” CP
at 3434. But in a February 2020 deposition, Redal stated that licensing decisions were about
meeting certain health and safety requirements, and he did not think “the name of a Kiwanis
would have a bearing on that.” CP at 1569.
In his declaration, Redal further opined, “The KVH connection to Kiwanis lent credibility
to the group home, and a certain amount of assurance that additional support, oversight and even
funding would be available to KVH. The fact that it was a Kiwanis-sponsored project, gave me
the impression of stability and reliability.” CP at 3434. Redal further opined, “In light of the
investigation done by Kiwanis International in response to the concerns about KVH expressed by
15 No. 57207-9-II
Kiwanis members, I had the impression that the Kiwanis backing meant the KVH group home
administration was accountable to entities other than just Region 6 administration.” CP at 3434.
But Redal did concede, “I do not believe our region would have kept the facility open just
because of the Kiwanis backing.” CP at 1822.
In the February 2020 deposition, Redal stated that he thought Kiwanis, as an
organization, was involved in the operation of KVH, but was not sure exactly how. Redal
formed this belief based on KVH’s use of the Kiwanis name and logo and also the amount of
support and involvement the local Kiwanis clubs provided to KVH. Redal also stated that DCFS
standards were not relaxed because of KVH’s affiliation with Kiwanis. Finally, Redal stated if
the State wanted to discuss something with KVH, they would call McCarthy as the director.
ANALYSIS
CC claims that the Kiwanis Defendants’ liability, as principals, flows from their alleged
actual and apparent agency relationship with KVH and its boards. Specifically, CC contends that
the KVH boards—the LCYE Board and the KVH Board—were negligent in hiring and retaining
certain employees and negligent in their oversight of the treatment and supervision of KVH
residents. CC also claims that each of the Kiwanis Defendants are liable for said negligence
under the actual and apparent agency theories.
On appeal, CC argues that the trial court erred by granting summary judgment dismissal
of the Kiwanis Defendants because the corporate dissolution survival statute is not a statute of
repose and even if it was it does not extend to bar the Kiwanis Defendants from vicarious
liability and that genuine issues of material fact exist as to whether an actual or apparent agency
16 No. 57207-9-II
relationship existed between the Kiwanis Defendants and the KVH boards. CC also attempts to
argue that the Kiwanis Defendants are KVH’s alter ego.
The Kiwanis Defendants respond that they are immune from such liability because
(1) the KVH boards—the alleged agents—are immune from liability as a matter of law under
RCW 23B.14.340, a corporate dissolution statute, and that immunity extends to the Kiwanis
Defendants, and (2) the Kiwanis Defendants did not have an actual nor an apparent agency
relationship with the KVH boards.
I. LEGAL PRINCIPLES
We review summary judgment orders de novo. Mohr v. Grantham, 172 Wn.2d 844, 859,
262 P.3d 490 (2011). CR 56(c) provides that summary judgment is appropriate where “the
pleadings, depositions, answers to interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any material fact and that the moving
party is entitled to a judgment as a matter of law.” When determining whether summary
judgment was appropriate, we view the evidence in the light most favorable to the nonmoving
party. Mohr, 172 Wn.2d at 859.
II. THE CORPORATE DISSOLUTION SURVIVAL STATUTE DOES NOT BAR CC’S VICARIOUS
LIABILITY CLAIMS AGAINST THE KIWANIS DEFENDANTS
RCW 23B.14.340, known as the corporate dissolution survival statute, provides,
The dissolution of a corporation . . . shall not take away or impair any remedy available against such corporation, its directors, officers, or shareholders, for any right or claim existing, or any liability incurred, prior to such dissolution or arising thereafter, unless action or other proceeding thereon is not commenced within two years after the effective date of any dissolution that was effective prior to June 7, 2006, or within three years after the effective date of any dissolution that is effective on or after June 7, 2006.
17 No. 57207-9-II
(Emphasis added.) The LCYE Board was dissolved in June 2010, and the KVH Board was
dissolved in May 1991; both long before CC filed his lawsuit in 2020. The trial court ruled that
RCW 23B.14.340, which barred claims against KVH, also barred claims against its alleged
principals, the Kiwanis Defendants.
CC argues that the trial court erred because RCW 23B.14.340 is not a statute of repose,
and even if RCW 23B.14.340 is a statute of repose, it does not bar CC’s vicarious liability claims
because statutes of repose are personal defenses that cannot be raised by the Kiwanis Defendants
as principals. CC emphasizes that RCW 23B.14.340 includes a list of enumerated individuals
subject to the liability limitation, but it does not include the term principals. We hold that
RCW 23B.14.340 is a statute of repose, but it does not bar CC’s vicarious liability claims against
the Kiwanis Defendants because the statute of repose is a personal defense.
A. RCW 23B.14.340 is a Statute of Repose
Whether RCW 23B.14.340 is a statute of repose is a legal question, which we review de
novo. See Matter of Dependency of A.M.F., 1 Wn.3d 407, 411, 526 P.3d 32 (2023). It is one
which we have already answered in the affirmative in R.N. v. Kiwanis Int’l, 19 Wn. App. 2d 389,
404, 496 P.3d 748 (2021), cert denied 199 Wn.2d 1002 (2022).
Unlike statutes of limitation, statutes of repose “provide[] a time period in which the
cause of action must accrue—not a time period from accrual to commencement of the action.”
Donovan v. Pruitt, 36 Wn. App. 324, 327, 674 P.2d 204 (1983). “A claim generally accrues
when a party has the right to seek relief in court.” Wash. State Major League Baseball Stadium
Pub. Facilities Dist. v. Huber, Hunt & Nichols-Kiewit Const. Co., 176 Wn.2d 502, 511, 296 P.3d
821 (2013).
18 No. 57207-9-II
We have determined that RCW 23B.14.340 is a statute of repose. R.N., 19 Wn. App. 2d
at 404. “At common law, when a corporation dissolved, it ceased to exist for all purposes and
therefore could not be sued.” Id. at 400-01. “That common law rule has been modified in most
states by statutes generally known as survival statutes, which permit lawsuits to be filed against
dissolved corporations for a limited period.” Id. at 401. In R.N., we explained that RCW
23B.14.340 was a corporate survival statute, and corporate survival statutes act as statutes of
repose extinguishing liability against dissolved corporations—distinct from statutes of
limitations. Id. at 402.
RCW 23B.14.340 does not provide a time period for accrual to commencement of the
action. Rather, the plain language of RCW 23B.14.340 provides that, regardless of when accrual
occurs, all claims are terminated against dissolved corporations if not filed within the listed time
limitations. RCW 23B.14.340 terminates a right of action after a specified time, even prior to the
claim’s accrual, unlike a statute of limitation. Thus, RCW 23B.14.340 is a statute of repose.
B. Dismissal of the Boards Under RCW 23B.14.340 Does Not Extend to Bar Liability for the
Kiwanis Defendants
Having established that RCW 23B.14.340 is a statute of repose, we must next determine
whether its application to the Boards extends to the Kiwanis Defendants to bar their vicarious
liability as alleged principals.
“‘An agent’s immunity from civil liability generally does not establish a defense for the
principal.’” Savage v. State, 127 Wn.2d 434, 439, 899 P.2d 1270 (1995) (quoting Babcock v.
State, 116 Wn.2d 596, 620, 809 P.2d 143 (1991) (plurality)). However, our Supreme Court has
held that “a principal cannot be held derivatively responsible when the agent has been discharged
19 No. 57207-9-II
. . . only insofar as the judgment for the agent is ‘on the merits and not based on a personal
defense.’” Vern J. Oja & Assocs. v. Wash. Park Towers, Inc., 89 Wn.2d 72, 77, 569 P.2d 1141
(1977) (quoting RESTATEMENT (FIRST) OF JUDGMENTS § 99 (1942) (holding that the statute of
limitations defense was personal and it did not result in a dismissal on the merits)). Thus, a
critical question for this court to answer is whether dismissal under RCW 23B.14.340 is a
judgment on the merits or a personal defense.
We determine that RCW 23B.14.340 is a personal defense. The ordinary meaning of
judgment on the merits is a judgment based on the evidence, not a procedural bar. BLACK’S LAW
DICTIONARY 1007 (12th ed. 2024). Because RCW 23B.14.340 does not establish a defense
based on the evidence, but based on a procedural hurdle, judgments based on RCW 23B.14.340
are not judgments on the merits. Thus, an agent’s defense under RCW 23B.14.340 does not
sever liability as to the principal.
The Kiwanis Defendants argue that our Supreme Court has recognized “that statutes of
repose are to be treated not as statutes of limitation, but as part of the body of a state’s
substantive law in making choice-of-law determinations.” Rice, 124 Wn.2d at 212 (emphasis
added). The Kiwanis Defendants also emphasize that equitable theories, like the discovery rule,
do not toll statutes of repose—unlike statutes of limitation.
The Kiwanis Defendants liken the “absolute bar” presented by a statute of repose to
immunity, which the Supreme Court has considered a substantive defense in certain
circumstances. Br. of Resp’t at 56; Babcock v. State,112 Wn.2d 83, 105, 768 P.2d 481 (1989)
(plurality) (Babcock I), vacated on recons., 116 Wn.2d at 596.
20 No. 57207-9-II
In Babcock I, our Supreme Court held “The fact that the [DSHS] caseworkers acted as
participants in an adversary hearing renders their actions immune under the common law
doctrine of absolute immunity for participants in judicial proceedings.” 112 Wn.2d at 97. Then,
the court held, “The State is immune to the same extent as its agents because the caseworkers’
defense of immunity is not a personal one, but rather relates directly to their role as agents of the
State.” Babcock I, 112 Wn.2d at 105.
However, two years later, on a motion for reconsideration, in Babcock II, the Supreme
Court reversed its decision in Babcock I, holding that the caseworkers were not entitled to
common law absolute immunity based on Washington precedent and legislative policy, but the
caseworkers were entitled to a judicially created qualified immunity under certain circumstances.
Babcock II, 116 Wn.2d at 608.
The court further held that the qualified immunity “is a personal immunity designed to
limit an individual caseworker’s liability for damages.” Babcock II, 116 Wn.2d at 619. Thus,
the State was not entitled to the defense of qualified immunity for the individual caseworkers.
Babcock II, 116 Wn.2d at 619. The court emphasized that in the legislature’s grant of qualified
immunity under RCW 26.44.060(3), the legislature specifically chose not to abrogate its waiver
of sovereign immunity. Babcock II, 116 Wn.2d at 619. And so, the court concluded that it could
not extend the common law qualified immunity to the State “in the face of a statutory provision
admonishing us not to construe an emergency immunity to abrogate sovereign immunity.”
Babcock II, 116 Wn.2d at 620.
But these holdings in Rice and the Babcock cases do not change our conclusion. The fact
that our Supreme Court has determined that statutes of repose are substantive law in making
21 No. 57207-9-II
choice-of-law determinations is not determinative as it involves a different legal context. Rice,
124 Wn.2d at 212. Even if we determined that a statute of repose is like immunity thus
triggering the applicability of Babcock, it would not compel a different result.
In Babcock I, a plurality, rather than a majority, reached the conclusion that the agent’s
immunity was a substantive defense that applied to the State. 112 Wn.2d at 105 (two of the five
justices in the majority concurred in result only). In Babcock II, the court reversed Babcock I
and concluded qualified immunity was a personal defense to the agent that did not extend to the
State, the principal. Additionally, in Babcock II, the court’s reversal of Babcock I was not based
on the fact that an immunity-like defense could never be a substantive defense. Rather, the court
emphasized that the immunity should not extend to the State due to legislative intent to the
contrary. Babcock II, 116 Wn.2d at 620. Nevertheless, Babcock II reiterated the general
proposition that “An agent’s immunity from civil liability generally does not establish a defense
for the principal.” 116 Wn.2d at 620.
Of note, Babcock II cited to Creelman and Guffey as examples of an agent’s immunity
extending to the principal. Babcock II, 116 Wn.2d at 621. In Creelman, prosecutorial immunity
was extended to the state and the county based on public policy considerations. Creelman v.
Svenning, 67 Wn.2d 882, 885, 410 P.2d 606 (1966). In Guffey v. State, the Supreme Court held
that “State and Washington State Patrol cannot be held liable when the trooper is immune.”7
7 The Kiwanis Defendants argue that we should apply RCW 23B.14.340 to principals because this case is like Creelman. But the Kiwanis Defendants do not explain how the corporate dissolution protection in RCW 23B.14.340 is anything like the prosecutorial immunity discussed in Creelman. Instead, the Kiwanis Defendants maintain that this case is just like Creelman because the only remaining theory of liability is vicarious. Such an argument is conclusory as it fails to address any of the prosecutorial immunity specific public policy reasoning in Creelman. 67 Wn.2d at 885.
22 No. 57207-9-II
Babcock II, 116 Wn.2d at 621 (citing Guffey v. State, 103 Wn.2d 144, 153, 690 P.2d 1163
(1984)). But Guffey was effectively overruled in Savage, 127 Wn.2d at 442.
While the aforementioned cases do not preclude the possibility that an immunity-like
defense for an agent may be substantive, cutting off liability for a principal, they solidify the
general proposition that an agent’s immunity—which we are assuming but have not decided is
similar to a statute of repose—does not establish a defense for the principal.
Whether an agent’s immunity applies to the principal in the government context involves
a detailed policy oriented factual inquiry. Savage, 127 Wn.2d at 446. In Savage, our Supreme
Court held that the qualified immunity of a parole officer did not extend to the State. Savage,
127 Wn.2d at 446. The court reasoned that “the different functions personal and governmental
immunity are designed to serve support maintaining state liability in this context, even where the
agent enjoys qualified personal immunity.” Savage, 127 Wn.2d at 445.
The court then elaborated that the officer’s immunity existed “‘to encourage unrestrained
execution of responsibility, while for the sovereign it is to prevent judicial scrutiny of basic
policies formulated by coordinate branches of government. To insulate the Government from
liability for the inevitable mishaps which will occur when its employees perform their functions
without fear of liability not only is unjust, but also serves no purpose for which sovereign
immunity need exist.’” Savage, 127 Wn.2d at 445 (quoting Downs v. United States, 382 F.
Supp. 713, 750 (M.D. Tenn. 1974), rev’d, 522 F.2d 990 (6th Cir. 1975)).
But the reasoning in Savage was highly policy oriented and specifically used to
determine whether the immunity of an individual actor should extend to the State. Nothing
23 No. 57207-9-II
suggests that the Savage reasoning applies beyond the specific context of a principal that is a
government agency.
The Kiwanis Defendants also argue that we should apply RCW 23B.14.340 to principals
because such a holding is consistent with considerations of practicality, like creating
expectations for the closing of a business, including creating a fixed date to extinguish liability
stemming from known and unknown claims. The Kiwanis Defendants also assert that we should
apply RCW 23B.14.340 to principals because after dissolution, the principal cannot cross-claim
against the at-fault agent, creating an injustice.
While we recognize it places on a hardship on principals to not be able to cross-claim
against at-fault agents, the argument that principals should have an expectation that liability
would be terminated based on the timeline in RCW 23B.14.340 fails because RCW 23B.14.340
does not even mention principals. Given that an agent’s defense does not ordinarily apply to
principals and given that RCW 23B.14.340 does not mention principals, we decline to apply
RCW 23B.14.340 to principals.
Finally, we reiterate that RCW 23B.14.340 results in a judgment based on technical or
procedural grounds, not based on the evidence. Thus, RCW 23B.14.340 is a personal defense
and not a substantive defense on the merits. Therefore, the immunity of the alleged agents under
RCW 23B.14.340 does not immunize the Kiwanis Defendants from liability.
III. THERE IS A GENUINE ISSUE OF MATERIAL FACT AS TO WHETHER THE KIWANIS DEFENDANTS
HAD AN AGENCY RELATIONSHIP WITH KVH.
CC argues that the KVH boards—the LCYE Board and the KVH Board—were negligent
in hiring and retaining certain employees and negligent in treating and supervising KVH
24 No. 57207-9-II
residents. CC contends that each of the Kiwanis Defendants are liable for that negligence under
actual and apparent agency theories. We analyze these theories as applied to each individual
defendant.
“A principal is vicariously liable for the conduct of an agent acting within the scope of
the agency relationship.” 16 DAVID K. DEWOLF & KELLER W. ALLEN, WASH. PRAC.: TORT LAW
AND PRACTICE § 4:10 (5th ed. 2023). The principal’s vicarious liability is predicated upon an
agent committing some act of negligence. Estep v. Hamilton, 148 Wn. App. 246, 258, 201 P.3d
331 (2008). An agency relationship may be broad or just for a limited purpose. CKP, Inc. v.
GRS Const. Co., 63 Wn. App. 601, 608, 821 P.2d 63 (1991). “The relationship may be express
or arise by inference from the relation of the parties. Whether one is the agent of another for a
specific purpose depends in part upon whether that person has power to act with reference to that
purpose.” Id. at 608.
The party asserting the existence of an agency relationship bears the burden of
establishing the same. Id. Importantly, the determination of whether an actual agency or
apparent relationship exists is usually inappropriate for summary judgment. ITT Rayonier, Inc.
v. Puget Sound Freight Lines, 44 Wn. App. 368, 377, 722 P.2d 1310 (1986); FutureSelect
Portfolio Mgmt., Inc. v. Tremont Grp. Holdings, Inc., 175 Wn. App. 840, 882, 309 P.3d 555
(2013), aff’d, 180 Wn.2d 954 (2014), and aff’d, 190 Wn.2d 281 (2018).
The question before us is whether there is a genuine issue of material fact, viewing all the
evidence in the light most favorable to CC, as to whether the Kiwanis Defendants had an actual
or apparent agency relationship with KVH.
25 No. 57207-9-II
A. Actual Agency
CC argues that summary judgment was improper because, viewing the evidence in the
light most favorable to CC, genuine issues of material fact exist as to whether the Kiwanis
Defendants had an actual agency relationship with KVH. We agree with respect to Kiwanis
International, but not KPNW or the local clubs.
“Actual authority derives from the principal’s objective manifestations of authority to the
agent.” Absher Const. Co. v. Kent Sch. Dist. No. 415, 77 Wn. App. 137, 143, 890 P.2d 1071
(1995). Actual authority may be express or implied, and implied actual authority arises from
circumstantial evidence showing the principal intended the agent to possess actual authority.
King v. Riveland, 125 Wn.2d 500, 507, 886 P.2d 160 (1994). A parent company may be the
principal as to an underlying company. See FutureSelect, 175 Wn. App. at 879.
A principal communicating to the agent, whether expressly or impliedly, that the agent
may bind the principal is one way to establish agency. Chicago Title Ins. Co. v. Off. of Ins.
Comm’r, 178 Wn.2d 120, 143, 309 P.3d 372 (2013). Agency may also be established where the
principal has the right to control the details of the agent’s work. Id. The right-to-control test is
particularly applicable where liability stems from the agent’s alleged negligence. Id.
The extent of control exercised by the principal over an agent is essential in determining liability: “When we distill the principles evident in our case law, the proper inquiry becomes whether there is a retention of the right to direct the manner in which the work is performed, not simply whether there is an actual exercise of control over the manner in which the work is performed.”
FutureSelect, 175 Wn. App. at 878-79 (quoting Kamla v. Space Needle Corp., 147 Wn.2d 114,
121, 52 P.3d 472 (2002)). “The right to control is determined by factors such as the conduct of
26 No. 57207-9-II
the parties, the contract between them, and the right of the principal to interfere in the [alleged
agent’s] work.” FutureSelect, 175 Wn. App. at 879.
“[T]he plaintiff need not show that the principal controlled or had the right to control
every aspect of the agent’s operation in order to incur vicarious liability. Rather, ‘[i]t should be
sufficient that plaintiff present substantial evidence of . . . control or right of control over those
activities from whence the actionable negligence flowed.’” Massey v. Tube Art Display, Inc.,
15 Wn. App. 782, 787, 551 P.2d 1387 (1976) (quoting Jackson v. Standard Oil Co., 8 Wn. App.
83, 91, 505 P.2d 139 (1972)). “The question of control or right of control is also one of fact for
the jury.” O’Brien v. Hafer, 122 Wn. App. 279, 284, 93 P.3d 930 (2004).
Applying the right-to-control to analyze whether the Kiwanis Defendants were in an
actual agency relationship with the KVH boards, our inquiry is focused on whether the Kiwanis
Defendants had the right to control the following through the boards: (1) the hiring and
supervision of KVH employees and (2) the treatment and supervision of KVH residents. In
making these determinations, we view the facts and reasonable inferences in the light most
favorable to the non-moving party, CC.
1. Kiwanis International
Viewing the facts in the light most favorable to CC, as the nonmoving party, we conclude
that there are genuine issues of material fact and, therefore, summary judgment was improper as
to Kiwanis International.
KVH and Kiwanis International entered into their 1988 agreement around the time when
CC was at KVH. While we agree with the Kiwanis Defendants that the 1988 agreement did not
provide that KVH may act on all of the Kiwanis Defendants’ behalf, it established that Kiwanis
27 No. 57207-9-II
International retained a significant amount of ability to control day-to-day operations and
management decisions at KVH.
Under that agreement, Kiwanis International agreed to grant KVH the right to use the
Kiwanis name and logo provided that: (1) KVH and “its members will at all times recognize,
abide by, and observe as effectively binding upon itself and its members the Constitution,
Bylaws and Policies of Kiwanis International”, (2) KVH “will from time to time upon the
request of [Kiwanis International] . . . amend its bylaws to eliminate therefrom any conflict with
Constitution and Bylaws of Kiwanis International”, (3) Kiwanis International could require KVH
to dissolve or change its corporate form at any time, and (4) KVH could not amend its articles of
incorporation without Kiwanis International’s written consent. CP at 3033.
At oral argument, the Kiwanis Defendants argued that this contract pertained only to the
use of the logo. Wash. Court of Appeals, A.B. v. Kiwanis Int’l, No. 57207-9-II, oral argument
(April 30, 2024), at 24 min., 14 sec., audio recording by TVW, Wash. State’s Public Affair
Network.8 It is true that KVH’s interest in the agreement was to obtain the right to use the name
of Kiwanis. But, as is apparent from the plain language, Kiwanis International’s rights under
that contract are not limited solely to controlling the use of the logo by KVH. Rather, in
exchange for granting KVH use of the logo, Kiwanis International retained broad control over
KVH’s bylaws and corporate form; control that extended up to and including dissolution of
KVH. CP Kiwanis International’s right to control KVH operations under the agreement is
further evidenced by McCarthy’s sudden retirement when Kiwanis International threatened to
revoke KVH’s right to continue using the Kiwanis name if KVH did not terminate McCarthy.
8 Available at https://tvw.org/video/division-2-court-of-appeals-2024041090/?eventID=2024041090.
28 No. 57207-9-II
When viewed in the light most favorable to CC, the control provided by the contract and
Kiwanis International’s force-out of McCarthy show that Kiwanis International had the right to
control certain aspects of KVH operations, including employment matters. The question is then
whether Kiwanis International’s right to control KVH operations extended to the negligence that
proximately harmed CC—the alleged negligent hiring and firing of KVH staff and the alleged
negligent supervision and treatment of KVH residents. In other words, the question is whether
the underlying negligence by KVH is within the scope of the agency relationship with Kiwanis
International.
The name revocation threat and McCarthy’s resignation shortly thereafter provides a
reasonable inference that Kiwanis International had the right to take actions that would result in
the termination of the executive director. And the 1988 contract gives Kiwanis International the
right to control KVH’s corporate form, up to dissolution. While there was nothing in the
Kiwanis International constitution, bylaws, or policies that provided mechanisms to control the
employment decisions at KVH nor the manner of supervision and treatment of KVH residents,
the 1988 contract subjected KVH to Kiwanis International’s constitution, policies, and bylaws.
Viewing all of the aforementioned evidence in the light most favorable to CC, there is a
genuine issue of material fact regarding whether Kiwanis International had the right control the
manner in which KVH made employment decisions and the manner in which the boards
implemented rules regarding the treatment and supervision of residents.
Next, the Kiwanis Defendants argue that even if an agency relationship existed between
Kiwanis International and the KVH boards, those boards did not have control or involvement in
the hiring and supervision of KVH employees. The Kiwanis Defendants emphasize that
29 No. 57207-9-II
McCarthy had unilateral control over the hiring, firing, and supervision of KVH employees. We
disagree.
The LCYE bylaws provided that the purpose of its Board was to continue the operation
of KVH. While the bylaws stated, “the role of the Board shall be to set general policy and
guidelines for the operation of individual group homes, not to become involved in the direct
management and operation of the homes,” the bylaws also explicitly provide, “all corporate
power and authority of the corporation shall be vested in the Board of Directors.” CP at 1296,
1299. The KVH Board’s bylaws provided that it had the right to direct “the business and affairs
of the corporation.” CP at 2602.
Viewing the facts in the light most favorable to CC, there is a genuine issue of material
fact whether the LCYE and KVH boards held the power to control the hiring, firing, and
supervision of KVH employees as they explicitly held all corporate power under their own
bylaws. And as addressed above, there is a genuine issue of material fact whether Kiwanis
International held the power to ultimately influence or control the hiring and firing of the
executive director or other staff through the KVH boards.
Finally, the Kiwanis Defendants argue that even if Kiwanis International has a principal-
agency relationship with the KVH boards, the underlying negligence is outside the scope of the
agency relationship because entities cannot be vicariously liable for the sexual crimes of another.
It is true that vicarious liability does not extend to an employee’s act that is “directed toward
personal sexual gratification[]” because such conduct is outside the scope of their employment.
Robel v. Roundup Corp., 148 Wn.2d 35, 54, 59 P.3d 611, (2002). But, here, the claim is not that
Kiwanis International is vicariously liable for any individual’s sexual crimes against CC. Rather,
30 No. 57207-9-II
the claim, as outlined in the complaint, is that Kiwanis International has vicarious liability for the
negligent conduct of the KVH boards, which proximately caused sexual misconduct to occur
to CC.
Relatedly, the Kiwanis Defendants argue that a principal cannot be vicariously liable for
a board condoning sexual misconduct as such conduct does not further any Kiwanis interest.
Wash. App. Ct. oral argument, supra. But again, CC’s theory is that Kiwanis International is
liable for the KVH boards’ negligence—not for intentionally condoning sexual misconduct
occurring at KVH.
We reverse the summary judgment order as to Kiwanis International.
2. KPNW
Even viewing the facts in the light most favorable to CC, we hold that there are no
genuine issues of material fact and KPNW was entitled to judgment as a matter of law, therefore,
summary judgment was proper as to KPNW on the issue of actual agency.
CC contends that the KPNW manifested actual control over the KVH boards through the
following: (1) KPNW agreed to sponsor KVH if it was “‘strictly and entirely a Kiwanis
Project,’” (2) KPNW had an interest in preserving usage of the Kiwanis name for KVH, and (3)
KPNW intervened to save KVH and protect the Kiwanis name. Br. of Appellant at 45-48.
First, the 1979 KPNW Board minutes show that the KPNW Board believed that for KVH
to use the Kiwanis name and marks, particularly in the context of fundraising for LCYE, KVH
had to be “strictly and entirely a Kiwanis project.” CP at 2538. But that prior statement does not
express that KVH was, in fact, “strictly and entirely a Kiwanis project.” CP at 2538. This
evidence does not suggest that KPNW could control KVH. Second, McCarthy did convey to the
31 No. 57207-9-II
Centralia Kiwanis Club that KPNW had an interest in preserving the Kiwanis name for KVH.
But again, that evidence does not show that KPNW could exercise control over KVH.
Third, after two local Kiwanis clubs withdrew their support from KVH, KPNW formed
an investigative committee to investigate allegations about sexual abuse of residents, improper
manipulations of business records and other administrative malfeasance. The committee’s
mission was to save KVH “‘and protect the Kiwanis name.’” CP at 3079. The committee found
that no evidence showed that sexual abuse occurred at KVH. The committee issued a series of
recommendations for KVH. Again, KPNW creating a committee that investigated KVH and
issued recommendations is not evidence that KPNW had the right to control employment
decisions at KVH, nor the treatment and supervision of residents. If the KPNW had such
control, they may have issued binding resolutions on KVH, not mere recommendations.
In summary, none of these facts suggest that KPNW had the right to control the
employment decisions at KVH, nor control the treatment or supervision of KVH residents.
Unlike Kiwanis International, there is no evidence that KPNW could take action that would lead
to the firing or forced resignation of employees or otherwise control the executive director. Nor
is there evidence that KPNW could dissolve or otherwise close KVH. CC fails to show a
genuine issue of material fact on this issue, and therefore, summary judgment was appropriate
with respect to KPNW on the issue of actual agency.
32 No. 57207-9-II
3. The Local Clubs: Kiwanis of Tumwater, Kiwanis of Centralia-Chehalis, and Kiwanis
of University Place
We also hold that there are no genuine issues of material fact and the local clubs were
entitled to judgment as a matter of law, therefore, summary judgment was proper as to the local
clubs on the issue of actual agency.
CC argues that the local clubs manifested actual control over the KVH boards through the
following: (1) local clubs provided support for the formation of KVH, including providing
operational funding, (2) the Kiwanis Club of Centralia demanded KVH produce certain
corporate documents, (3) Henry Meister discussed regaining control over KVH and ensuring it
complied with the policies and rules of Kiwanis International, and (4) two local clubs withdrew
their names from KVH’s articles of incorporation and recommended that other local clubs do the
same to be free from liability stemming from KVH operations.
First, while it is true that local Kiwanis clubs provided financial support as well as other
material contributions, like clothes and food, the State provided the primary monetary support
for KVH. Providing support does not demonstrate that the local Kiwanis clubs had the right to
control the employment decisions or the treatment of residents at KVH. Second, while the
Kiwanis Club of Centralia did demand KVH produce certain corporate documents, McCarthy
refused to produce those documents. He stated that the request intruded into the responsibilities
of the governing board—which is presumably the LCYE Board. Such evidence suggests that
Kiwanis Club of Centralia did not have the right to control operational decisions at KVH—not
the opposite.
33 No. 57207-9-II
At oral argument, CC stated that McCarthy’s letter refusing to produce those documents
provided, “I am controlled by the Board of Directors, which is appointed by all of the clubs. I
answer to all of the clubs through that Board of Directors.” Wash. App. Ct. oral argument,
supra. But that letter actually provides, “There is a governing board for [KVH], . . . a board
designated by the different Kiwanis Clubs sponsoring it’s Boy’s Home.” CP at 3000.
McCarthy’s letter does not suggest that he answers to the clubs through the LCYE Board.
In the letter, he merely maintains that different local clubs designate members to be part of the
governing board of KVH. The fact that local clubs put members on the governing board of KVH
does not empower the local clubs to interfere with the operational decisions at KVH. Indeed,
this letter cuts against CC’s argument as it shows McCarthy refusing the Centralia Club’s request
for the information.
Third, it is true that Meister, a KVH Board member, talked about regaining control over
KVH in a letter to the KVH Board. It is unclear how a letter to the KVH Board asserting that the
KVH Board must regain control of KVH shows that the local clubs, in fact, had the right to
control the operational decisions at KVH. Fourth, the Kiwanis Club of Chehalis and the Kiwanis
Club of Tumwater withdrew their names from the KVH articles of incorporation. This
withdrawal did not shut down KVH.
CC does not explain how local clubs withdrawing their names from the articles of
incorporation shows that those clubs could have asserted operational control over KVH. Even
when viewing this in the light most favorable to CC, the evidence does not demonstrate
operational control. Viewing all of the aforementioned evidence in the light most favorable to
34 No. 57207-9-II
CC, we hold that there was not a genuine issue of material fact as to whether any of the local
Kiwanis clubs had the right to control the relevant operational decisions at KVH.
In summary, there is a genuine issue of material fact precluding summary judgment on
the issue of actual agency as to Kiwanis International, but not as to KPNW nor the local Kiwanis
clubs.
B. Apparent Agency
CC also argues that summary judgment was inappropriate because there was a genuine
issue of material fact regarding whether KVH was the apparent agent of the Kiwanis Defendants.
We agree as to Kiwanis International and the local clubs but disagree as to KPNW.
Under the apparent agency doctrine, vicarious liability may arise for the principal where
the purported principal makes objective manifestations leading a third party to believe that the
wrongdoer is an agent of the purported principal.9 FutureSelect, 175 Wn. App. at 882. The
objective manifestations are sufficient if they “‘cause the one claiming apparent authority’” to
subjectively believe that the agent has authority to act for the principal and that the subjective
belief is objectively reasonable. Mohr, 172 Wn.2d at 860 (quoting King, 125 Wn.2d at 507).
Lastly, the plaintiff must rely on that apparent agency relationship to their detriment. Wilson v.
Grant, 162 Wn. App. 731, 744, 258 P.3d 689 (2011); D.L.S. v. Maybin, 130 Wn. App. 94, 97,
121 P.3d 1210 (2005) (lack of evidence that DLS did anything in reliance upon a belief that she
was employed by McDonald’s, as opposed to another, defeated her apparent agency claim).
9 “Manifestations to a third person can be made by the principal in person or through anyone else, including the agent, who has the principal’s actual authority to make them—e.g., an advertisement in the newspaper, provided it is placed by the principal or an agent with actual authority.” Smith v. Hansen, Hansen & Johnson, Inc., 63 Wn. App. 355, 364, 818 P.2d 1127 (1991).
35 No. 57207-9-II
The principal’s act of permitting the purported agent to use its name, advertising logo,
and telephone were objective manifestations supporting an apparent agency relationship.
Hansen v. Horn Rapids O.R.V. Park, 85 Wn. App. 424, 430, 932 P.2d 724 (1997).
1. Manifestations and Belief
CC argues that our focus should be on whether the Kiwanis Defendants made objective
manifestations to the State—as opposed to CC—that caused the State to believe the Kiwanis
Defendants were principals of KVH. CC points us to Illinois cases for the proposition that where
the one claiming apparent agency was a minor at the relevant time, courts should look at the
objective manifestations of the principal to the caretaker of the minor—in this case, the State.
(Citing Chicago Title & Tr. Co. v. Sisters of St. Mary, 264 Ill. App. 3d 913, 917, 637 N.E.2d 543
(1994); Monti v. Silver Cross Hosp., 262 Ill. App. 3d 503, 507, 637 N.E.2d 427 (1994)
(determining whether the plaintiff met the reliance element by looking to whether the persons
responsible for the care of the plaintiff in a medical context relied on the principal’s
manifestations)).
The Kiwanis Defendants contend that Washington case law is clear that we should look
to the plaintiff’s belief and reliance, not to whoever was in charge of caring for the minor
plaintiff at the time. The Kiwanis Defendants also emphasize the purpose of apparent agency:
“to protect third parties who justifiably rely upon the belief that another is the agent of a
principal.” D.L.S., 130 Wn. App. at 97.
While we recognize Washington case law generally refers to the reliance of the party
claiming apparent agency, Mohr, 172 Wn.2d at 860, Washington has not yet determined whether
we may consider a minor plaintiff’s caretaker’s perspective to determine whether an apparent
36 No. 57207-9-II
agency relationship exists. If we were to agree with the Kiwanis Defendants, “no infant could
ever hope to avail himself of apparent agency since he would be incapable of his own evaluation
and reliance.” Nosbaum v. Martini, 312 Ill. App. 3d 108, 121, 726 N.E.2d 84 (Ill. App. Ct.
2000). Such a determination would immunize principals from liability for leading a third-party
caretaker to believe that they have an agency relationship with a wrongdoer. This would prevent
minors and otherwise incompetent individuals, who could not meet the reliance element, from
acquiring a remedy against a principal. Because CC did not have a choice in being placed at
KVH, CC could not engage in evaluation and reliance and, under the Kiwanis Defendants’
approach, would be foreclosed from availing himself of a cause of action based on apparent
agency. Accordingly, in this context, we think justice demands we consider the entity who made
the decision on CC’s behalf—the State.
We turn first to whether there was a genuine issue of material fact regarding whether the
State believed, based on Kiwanis Defendants’ objective manifestations, that the Kiwanis
Defendants were KVH’s principal and whether the State relied on that belief. CC largely relies
on Mark Redal’s declaration to demonstrate a genuine issue of material fact on these issues.
Viewing the facts in the light most favorable to CC, we agree that Redal’s declaration
creates a genuine issue of material fact regarding whether Kiwanis International and the local
clubs made objective manifestations that led the State to believe that Kiwanis International and
the local clubs were the principals of KVH. For example, Redal’s declaration established that
Kiwanis International and local Kiwanis clubs met with State personnel to ensure the success of
KVH as a state placement facility, which demonstrated to Redal that these Kiwanis entities “had
more than a name-only interest.” CP at 3433.
37 No. 57207-9-II
As to KPNW, DSHS staff periodically communicated with Kiwanis representatives,
including KPNW. Such communication included an email wherein a DSHS employee endorsed
KVH and its operation by McCarthy to KPNW. But even under the summary judgment
standard, that statement does not amount to an objective manifestation that could reasonably lead
the State to believe that the KVH Boards were the agents of KPNW. Thus, summary judgment
was proper as to KPNW.
2. Reliance
We next analyze whether there was a genuine issue of material fact regarding whether the
State relied on the belief that Kiwanis International and the local clubs were KVH’s principals to
the State’s detriment.
Redal surmised that when DCFS decides which group homes to develop and support
“[p]roposals with the backing of entities like Kiwanis probably had more potential to be
developed as resources.” CP at 1822. Redal also opined that “[t]he KVH connection to Kiwanis
lent credibility to the group home, and a certain amount of assurance that additional support,
oversight and even funding would be available to KVH. The fact that it was a Kiwanis-
sponsored project, gave me the impression of stability and reliability.” CP at 1822. To that end,
Kiwanis International and local Kiwanis clubs met with State personnel to ensure that KVH was
considered “a safe and reliable placement facility for wards of the State.” CP at 3433.
Redal’s statements create a reasonable inference that the State relied on the relationship
between Kiwanis and KVH by referring children, like CC, to be placed at KVH because the State
believed KVH had additional support, safety, oversight, funding, stability, and reliability because
of its relationship with Kiwanis. Viewing this evidence in the light most favorable to CC, there
38 No. 57207-9-II
is a genuine issue of material fact regarding whether the State relied on the apparent agency
relationship between Kiwanis International and the local clubs as principals and KVH as their
agent to the State’s detriment.10 Thus, summary judgment was improper as to Kiwanis
International and the local clubs based on apparent agency.
IV. The ALTER EGO CLAIM IS AN IMPROPERLY ADDED CAUSE OF ACTION.
CC also argues that KVH was the Kiwanis Defendants’ alter ego. The Kiwanis
Defendants respond that CC improperly raised this issue in response to the Kiwanis Defendants’
summary judgment motion, and CC failed to include an alter ego theory in his complaint. In
response, CC argues that the Kiwanis Defendants failed to properly preserve their argument that
the alter ego argument was improperly added. We agree with the Kiwanis Defendants.
“A party who does not plead a cause of action or theory of recovery cannot finesse the
issue by later inserting the theory into trial briefs and contending it was in the case all along.”
Dewey v. Tacoma Sch. Dist. No. 10, 95 Wn. App. 18, 26, 974 P.2d 847 (1999). However, issues
not raised by the pleadings may be tried by express or implied consent of the parties. Id.
In determining whether the parties impliedly tried an issue, an appellate court will consider the record as a whole, including whether the issue was mentioned before the trial and in opening arguments, the evidence on the issue admitted at the trial, and the legal and factual support for the trial court's conclusions regarding the issue.
Id.
10 CC suggests that the State chose to rely on KVH’s association with the Kiwanis Defendants by deluging it with referrals. But the cited material merely provides “Because [KVH] . . . is unique in that it offers academic and vocational training on campus, caseworkers for the State of Washington deluged the Kiwanis program with referrals.” CP at 2648. That does not suggest that the Kiwanis relationship caused such a deluge or whether the State treated KVH differently based on the Kiwanis relationship.
39 No. 57207-9-II
Here, CC raised his alter ego theory in opposition to the Kiwanis Defendants’ motion for
summary judgment. CC’s sophisticated counsel did not move to amend the complaint to add the
alter ego theory. CC does not point to any evidence that the alter ego theory was explicitly or
implicitly tried by consent before the trial court. Simply inserting the theory into a response to
summary judgment is insufficient to add a new cause of action. And CC points to no authority
holding that a new cause of action is properly added in such a circumstance absent an objection
from the opposing party. DeHeer v. Seattle Post-Intelligencer, 60 Wn.2d 122, 126, 372 P.2d 193
(1962) (“Where no authorities are cited in support of a proposition, the court is not required to
search out authorities, but may assume that counsel, after diligent search, has found none.”).
Thus, we decline to consider this theory as a basis for reversing summary judgment.
CONCLUSION
In conclusion, we hold that RCW 23B.14.340 is a statute of repose but that it does not bar
claims against the Kiwanis Defendants as a matter of law. We further hold that there is a genuine
issue of material fact regarding whether an actual or apparent agency relationship between KVH
and Kiwanis International existed, and whether an apparent agency relationship between KVH
and the local clubs existed. We also hold that CC’s alter ego argument is not properly before us.
Accordingly, we affirm the grant of summary judgment as to KPNW. But we reverse the trial
court’s summary judgment order as to Kiwanis International and the local clubs and remand the
matter for the trial court to conduct further proceedings consistent with this opinion.
40 No. 57207-9-II
A majority of the panel having determined that this opinion will not be printed in the
Washington Appellate Reports, but will be filed for public record in accordance with RCW 2.06.040,
it is so ordered.
Che, J. We concur:
Glasgow, J.
Veljacic, A.C.J.
Related
Cite This Page — Counsel Stack
A.B., J.L., V. Kiwanis International, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ab-jl-v-kiwanis-international-washctapp-2024.