Collection Group, llc v. David R. Cook, et ux

• Court: Court of Appeals of Washington
• Decided: April 9, 2015
• Docket: 32020-1
• Status: Unpublished

Opinion

FILED APRIL 9, 2015 In the Office of the Clerk of Court WA State Court of Appeals, Division III

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON DIVISION THREE

THE COLLECTION GROUP, LLC, a ) Washington Limited Liability Company, ) No. 32020-1-III ) Respondent, ) ) v. ) ) DAVID R. COOK AND JANE DOE ) COOK, husband and wife, and their ) UNPUBLISHED OPINION marital community composed thereof, ) ) Appellants. )

SIDDOWAY, C.J. David Cook appeals the trial court's refusal to set aside a 2006

default judgment entered in a collection action by the Collection Group (TCG), which he

claims is void for insufficient service of process. He contends the trial court erred in

applying the presumption that a facially correct affidavit of service is valid and refusing

to vacate the default judgment based on his evidence that the address listed on the return

of service was not his usual place of abode. Because the return of service was sufficient

as to the matters it addressed and was supplemented by additional evidence, and because

Mr. Cook's own evidence fell short of demonstrating insufficient service of process by

even a preponderance of the evidence, we affmn. No. 32020-1-II1 Collection Grp. v. Cook

PROCEDURALBACKOROUND

On July 2, 2006, TCO commenced this action against David Cook to collect

$5,993.80 he allegedly owed on a credit card account, by delivering two summonses and

complaints to an adult at the home located at 1515 S. Lilac Lane in Liberty Lake,

Washington-the address listed on Mr. Cook's latest billing statement for the delinquent

account.

After Mr. Cook failed to timely respond, TCO moved for an order of default,

which the Spokane County District Court entered on August 30,2006. With prejudgment

interest, attorney fees and costs, the judgment entered totaled $10,444.78. TCO

thereafter transferred the judgment to the Spokane County Superior Court for collection.

TCO commenced supplemental proceedings against Mr. Cook on June 12, 2009

by serving copies of the pleadings on his "brother/co-resident," Richard Cook, at the

Lilac Lane address. Clerk's Papers (CP) at 47. A few days later, one ofTCO's lawyers

received a call from Ralph Van Camp, who identified himself as a lawyer and put in a

verbal notice of appearance on behalf of Mr. Cook. The next day, TCO received a

second call from a second lawyer, Dustin Deissner, who again provided a verbal notice of

appearance and explained that Mr. Van Camp was his partner. On August 23,201

four years after the telephonic appearances and nearly seven years after entry of the

default-Mr. Deissner filed a motion on behalf of Mr. Cook to vacate the judgment under

CR 60, alleging that it was void for lack of personal service.

No. 32020-1-111 Collection Grp. v. Cook

A return of service had been filed with the district court on July 10, 2006. It stated

that the process server had left two copies of the summons and complaint at the Lilac

Lane address with "a white female, who would not give her name, approximately mid to

late 40's, 5'2", glasses, above shoulder blond hair, who stated she lived there." CP at

111. In support of his motion to vacate the judgment, Mr. Cook submitted his own

declaration and that of Marti Mortensen, who claimed to have personal knowledge as to

the occupancy of the Lilac Lane house. Both declarations stated that at the time of

service, Mr. Cook's brother was leasing the Lilac Lane house to Timber-Land-Ag, LLC,

a limited liability company owned by Ms. Mortensen and her former husband, Vernon

Mortensen.

In his declaration, Mr. Cook denied residing at the Lilac Lane house at the time of

service. He claimed he was in the process of buying a home in California in June and

July 2006, that neither he nor his brother received copies of any legal papers, and that he

did not know who the summons and complaint copies were supposedly served upon. Mr.

Cook claimed that he first learned of this action when "some papers seeking

supplemental proceedings were delivered [to the Lilac Lane address] in August 2012 to

my mother who was there cleaning the house so it could be re-rented." CP at 17.

Ms. Mortensen asserted in her declaration that the Timber-Land-Ag LLC that she

jointly owned with Mr. Mortensen rented the house from Richard Cook from August

2005 to August 2006, when her divorce from Mr. Mortensen became final. Nonetheless,

she stated that during that timeframe she was living full time in Moyie Springs, Idaho.

She claimed that she was in northern Idaho preparing for a hearing in the divorce trial on

the day the summonses and complaints were allegedly served.

In September 2013, TCG sent a letter to Mr. Deissner requesting that he withdraw

the motion to vacate on the grounds that it contained "blatantly false" information,

pointing out a number of discrepancies from information TCG had obtained from several

sources.) CP at 93. Mr. Deissner later filed a declaration conceding that some of the

information he and Ms. Mortensen provided about her divorce (in which Mr. Deissner

had represented Ms. Mortensen) was mistaken.

The trial court denied Mr. Cook's motion to vacate, concluding that "the affidavit

of service is facially valid," even though it did not fill in "every conceivable blank."

Report of Proceedings (RP) at 23. Mr. Cook timely appealed, seeking review of the

court's order denying his CR 60 motion to vacate the default judgment.

) We will not elaborate on the discrepancies, a number of which were revealed in Westlaw "CLEAR" investigative reports on Mr. Cook, Ms. Mortensen, and Mr. Mortensen that TCG filed with the court. While the reports contradict Mr. Cook's and Ms. Mortensen's sworn testimony in a number of respects, they are hearsay and TCG has not established their admissibility as market reports or commercial publications "generally used and relied upon by the public or by persons in particular occupations." ER 803(a)(l7). We have not relied upon them in our de novo review of the trial court's denial of the CR 60(b)(5) motion.

No. 32020-I-III Collection Grp. v. Cook

ANALYSIS

Mr. Cook contends the trial court erred in refusing to vacate the default judgment

because he was never properly served with the summons and complaint. "Proper service

of the summons and complaint is a prerequisite to the court obtaining jurisdiction over a

party, and a judgment entered without such jurisdiction is void." Woodruffv. Spence, 76

Wn. App. 207, 209,883 P.2d 936 (1994); In re Marriage ofMarkowski, 50 Wn. App.

633,635-36, 749 P.2d 754 (1988). Under CR 60(b)(5), a court "may relieve a party"

from a final judgment or order on the grounds that "[t]he judgment is void." A motion to

vacate a void judgment under CR 60(b)(5) may be brought at any time after entry of the

judgment. Markowski, 50 Wn. App. at 635; Allstate Ins. Co. v. Khani, 75 Wn. App. 317,

323,877 P.2d 724 (1994).

Because courts have a mandatory duty to vacate void judgments, we review a trial

court's decision to grant or deny a CR 60(b)(5) motion to vacate a default judgment for

lack ofjurisdiction de novo. Dobbins v. Mendoza, 88 Wn. App. 862, 871, 947 P.2d 1229

(1997). Likewise, while "[r]eview of a denial of a CR 60(b) motion is generally limited to

the propriety of the denial, and is not a review of the original judgment[, ...] if questions

are raised concerning lack of trial court jurisdiction and fundamental constitutional rights,

these issues may be determined on appeal as justice may require." In re Marriage of

Maxfield, 47 Wn. App. 699, 703, 737 P.2d 671 (1987).

No. 32020-l-III Collection Grp. v. Cook

1. Standard ofproof

Mr. Cook argues that the trial court applied the wrong standard of proof in

deciding the jurisdictional issue. It is well settled that "[a] facially correct return of

service is presumed valid and, after judgment is entered, the burden is on the person

attacking the service to show by clear and convincing evidence that the service was

irregular." Woodruffv. Spence, 88 Wn. App. 565, 571, 945 P.2d 745 (1997); see also,

e.g., Vukich v. Anderson, 97 Wn. App. 684, 687, 985 P.2d 952 (1999); In re Dependency

ofA.G.,93 Wn. App. 268, 277, 968 P.2d 424 (1998); Lee v. Western Processing Co., 35

Wn. App. 466, 469, 667 P.2d 638 (1983) ("An affidavit of service, regular in form and

substance, is presumptively correct.") Mr. Cook argues that the return of service in this

case is not entitled to the presumption of validity because it failed to state that the Lilac

Lane address was his usual place of abode and it failed to identify the basis for that

assertion. Br. of Appellant at 8-9. As a result, he claims that he was required to prove

insufficient service by only a preponderance of the evidence. He relies on John Hancock

Mutual Life Insurance Co. v. Gooley, 196 Wash. 357, 360, 83 P.2d 221 (1938), in which

a process server's original affidavit of service was found defective in part because it

failed to state that the place of service was the defendants' usual place of abode.

In Gooley, the plaintiff commenced an action against Edward and Pauline Gooley

(among others). Mr. and Mrs. Gooley had lived for 30 years at their Lincoln County

farm but at the time of the lawsuit were temporarily in Spokane, where Mrs. Gooley had

No. 32020-1-III Collection Grp. v. Cook

been hospitalized. ld. at 359. Rather than await the Gooleys' return to the fann, the

process server left a copy of the summons and complaint with the Gooleys' daughter-in­

law at the Englehorn hotel in Spokane, where Mr. and Mrs. Gooley temporarily occupied

a light housekeeping room after Mrs. Gooley was released from the hospital. ld. at 358­

60. The affidavit of service stated that the Gooleys were served by leaving the

documents with Mrs. August Gooley "at the Englehorn hotel ... , [the defendants] each

being absent therefrom, and the said Mrs. August Gooley being a person of suitable age

and discretion then resident therein." ld. at 359.

A default judgment was entered, which the Gooleys attacked on the basis of

insufficient service of process. They challenged in part the fact that the plaintiffs return

of service did not recite that the Englehorn hotel was the Gooleys' house of usual abode.

The plaintiff responded by filing an amended affidavit of service in which the process

server testified that, at the time of service, the Englehorn hotel "was then the house of

usual abode of Mr. and Mrs. Gooley." ld. at 360.

The Washington Supreme Court found the original affidavit of service defective.

As Mr. Cook argues, this was in part because it failed to state that the Englehorn hotel

was the Gooleys' house of usual abode. In that respect, TCG's return of service also fell

short of establishing all facts essential to effective substitute service. Cf CR 4(g)(7) (the

return must state the manner of service); RCW 4.28.080(15) (authorizing substitute

service by "leaving a copy of the summons at the house of [the defendant's] usual abode

with some person of suitable age and discretion then resident therein"). But the more

pertinent holding of Gooley for purposes of this case is that it is proper to permit the

filing of an amended return of service "as the actual facts control; and ifjurisdiction was

actually acquired over the persons of the defendants, that fact should govern." Id. at 363.

The court added that "[i]t is the fact of service which confers jurisdiction, and not the

return, and the latter may be amended to speak the truth." Id.

A return of service that fails to include all facts essential to effective service is

defective in the sense that it is incomplete. The plaintiff can address any shortcomings by

amending the return or by additional evidence. Williams v. Steamship Mut. Underwriting

Ass 'n, 45 Wn.2d 209, 226-27, 273 P .2d 803 (1954) (proper remedy would be to permit

amended return of service); Burdick v. Powell Bros. Truck Lines, 1 F .R.D. 220 (N.D. Ill.,

1940) (return of service could be amended under parallel federal rule).

Modem civil rules make clear that "[f]ailure to make proof of service does not

affect the validity of the service." CR 4(g)(7); Scanlan v. Townsend, 181 Wn.2d 838,

848,336 P.3d 1155 (2014). "A 'lack of return of service [neither] deprive[s] a court of

jurisdiction, nor does it affect the validity of the service.'" Id. (quoting Jones v. Stebbins,

122 Wn.2d 471, 482,860 P.2d 1009 (1993)).

II. Insufficient proofof improper service

Mr. Cook has not shown by clear and convincing evidence, or even by a

preponderance of the evidence, that the Lilac Lane house was not his usual place of

abode. The initial submissions in support of the motion for an order of default

demonstrated that the Lilac Lane address had been the address of record for Mr. Cook's

credit card account. While Mr. Cook complains that the account address was several

years old, TCG demonstrated that before commencing its collection action, it consulted

the Spokane County assessor's website to confirm that Mr. Cook and his brother not only

owned the Lilac Lane property, but that they listed it as their address. TCG's printout

from the assessor's website is dated April 28, 2006, reflecting information as of April 27,

2006. TCG established by declaration and exhibits that it thereafter sent demand letters

to Mr. Cook at the Lilac Lane address twice, in May and June 2006, and that neither letter

was returned as undeliverable. That serves as some evidence that the address was a usual

place of abode for Mr. Cook. Cf Automat Co. v. Yakima County, 6 Wn. App. 991, 995,

497 P .2d 617 (1972) (citing Avgerinion v. First Guar. Bank, 142 Wash. 73, 78, 252 P.

535 (1927)) (once there is proof of mailing, it is presumed that the mails proceed in due

course and that the letter is received by the person to whom it is addressed).

In response, Mr. Cook provides a declaration stating that he was residing primarily

in California and staying temporarily in North Idaho during the time of the service. But

he provides no records of property ownership in California or Idaho, no rental agreement

for a residence in either state, and no addresses for his ostensible "true" places of abode.

"When a party fails to produce relevant evidence within its control, without satisfactory

explanation, the inference is that such evidence would be unfavorable to the

nonproducing party." Lynott v. Nat'l Union Fire Ins. Co. ofPittsburgh, PA, 123 Wn.2d

678,689,871 P.2d 146 (1994) (citing Pier 67, Inc. v. King County, 89 Wn.2d 379,385­

86, 573 P .2d 2 (1977)). When a defendant challenging service fails to identifY his "true"

place of abode, an adverse inference is reasonably drawn. An address would ordinarily

be simple to provide and would demonstrate Mr. Cook's confidence that his claim as to

his "true" place of abode would withstand investigation by TCO. A bald allegation as to

a defendant's true place of abode is unlikely to be sufficient when weighed against a

conflicting allegation that is backed by at least some substantiation. Cf Gooley, 196

Wash. at 368 (rejecting process server's unsubstantiated allegation by amended return

that hotel was defendants' usual place of abode in light of the conflicting, substantiated

allegations of defendants).

Ms. Mortensen's declaration is weak evidence for the same reason. And the

factual discrepancies in Ms. Mortensen's and Mr. Cook's declarations that Mr. Deissner

was required to concede reflect negatively on both witnesses' credibility. Finally, Mr.

Cook's evidence that Mr. Mortensen's secretary made mortgage payments on the Lilac

Lane home is neutral, since the record on appeal reveals that Ms. Mortensen was

separated from her husband at the time of service and was in the process of divorce.

Without more, the payments by the Mortensens' LLC that Mr. Mortensen was causing

his secretary to make could have been on Ms. Mortensen's behalf, for housing that she

cohabited with its owners.

The term "usual abode" is to be liberally construed to effectuate service and

uphold jurisdiction of the court. Sheldon v. Fettig, 129 Wn.2d 601,607,919 P.2d 1209

(1996). "[U]nder certain circumstances a defendant can maintain more than one house of

usual abode," id. at 611, and "one who asserts a change of residence bears the burden of

proof." Sheldon v. Fettig, 77 Wn. App. 775, 779,893 P.2d 1136 (1995).

Mr. Cook failed to demonstrate by even a preponderance of the evidence that the

Lilac Lane address was not a usual place of abode for him at the time of service. The

trial court did not err in denying his motion to vacate.

III. Attorney fees

TCO requests its attorney fees on appeal. RAP 18.1 permits recovery of

reasonable attorney fees or expenses on review if applicable law grants that right.

Washington law generally provides for an award of attorney fees "when authorized by a

private agreement, a statute, or a recognized ground of equity." Labriola v. Pollard Grp.,

Inc., 152 Wn.2d 828, 839, 100 P.3d 791 (2004). "A party may be awarded attorney fees

based on a contractual fee provision at the trial and appellate level." Renfro v. Kaur, 156

Wn. App. 655, 666-67,235 P.3d 800 (2010).

TCO is the assignee of Citibank, whose card agreement with Mr. Cook includes

the following provision regarding collection costs:

Ifwe refer collection of your account to a lawyer who is not our salaried employee, you will have to pay our attorney's fee plus court costs or any

other fees, to the extent permitted by law. Ifwe sue to collect and you win, we will pay your reasonable legal fees and court costs.

CP at 122. Such provisions are construed as entitling a prevailing party to reasonable

attorney fees for all services required to prosecute the action to its "ultimate conclusion."

Puget Sound Mut. Sav. Bank v. Lillions, 50 Wn.2d 799, S07, 314 P.2d 935 (1957). We

award TCO its reasonable fees and costs on appeal subject to its compliance with RAP

IS.I(d).

Affirmed.

A majority of the panel has determined this opinion will not be printed in the

Washington Appellate Reports, but it will be filed for public record pursuant to RCW

2.06.040.

Sid o· ay, Clj WE CONCUR:

Kors~J.

Lawrence-Berrey, J.

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