Concrete Services, Inc. v. Robert Kanany

Court of Appeals of Washington·Decided May 20, 2013·No. 68578-3·Unpublished

Opinion

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

CONCRETE SERVICES, INC., a Washington corporation, DIVISION ONE

Plaintiff,

No. 68578-3-

UNPUBLISHED OPINION

ROBERT KANANY, a single man, c/>o

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OVIDIO ESCAMILLA, a single man, s^-

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FRONTIER BANK, a Washington CD —Ir~-

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REGISTRATION SYSTEM, INC., a Delaware Corporation, and PRIMELENDING, A PLAINSCAPITAL COMPANY, a Texas Corporation, FILED: May 20, 2013

Defendants.

Dwyer, J. — Robert Kanany appeals from a trial court order denying his request for relief from a default judgment entered against him. Kanany asserts that the default judgment was satisfied by a $10,000 payment made by a title insurance company on behalf of Ovidio Escamilla in order to obtain dismissal of

claims asserted by Concrete Services, Inc. against Escamilla and to assign the default judgment in favor of Concrete Services against Kanany to Escamilla. We determine that substantial evidence supports the trial court's finding that the $10,000 payment constituted consideration for dismissal of the claims against Escamilla and assignment of the default judgment against Kanany—not satisfaction of that judgment. Accordingly, we affirm the trial court's denial of Kanany's request for relief. We additionally affirm the trial court's grant to Escamilla of an award of attorney fees incurred in defending against vacation of the default judgment. Finally, because we determine that Kanany's appeal is frivolous, we grant to Escamilla an award of attorney fees on appeal against both

Kanany and his counsel.1

I

On February 18, 2009, Concrete Services filed an amended complaint

seeking to collect amounts owed and to foreclose upon a lien encumbering six parcels of property owned by Kanany, who had failed to pay for the installation of concrete improvements to those properties. Without disclosing the existence of the lien, Kanany had subsequently conveyed one ofthe six parcels to Escamilla. Accordingly, the complaint filed by Concrete Services named both Kanany and Escamilla as defendants.2 Concrete Services sought judgment against Kanany

1As explained below, the award ofattorney fees on appeal against Kanany is warranted pursuant to Civil Rule (CR) 11 and RCW 60.04.181—the bases for the fee award in the trial court—in addition to Rule of Appellate Procedure (RAP) 18.9(a). The appellatefee award against Kanany's counsel is warranted based solely upon RAP 18.9(a).

2 Concrete Services also named as defendants Frontier Bank, Mortgage Electronic Registration System, Inc., and Primelending, a Plainscapital Company, each of which claimed an interest in the subject real property. Thus, Concrete Services sought judgment that the liens of

in the amount of $7,688.83 with interest at a rate of 12 percent per annum, coupled with an award of reasonable attorney fees and costs. Concrete Services additionally sought foreclosure of the lien and application of the proceeds toward payment of the amount owed.

In March 2009, Escamilla contacted Ticor Title Insurance Company, which had issued a title insurance policy insuring the parcel conveyed to Escamilla by Kanany. Escamilla requested that Ticor Title resolve the Concrete Services lawsuit on his behalf pursuant to the insurance policy. Escamilla thereafter answered Concrete Services' complaint and asserted cross-claims against Kanany for breach of warranties in the statutory warranty deed pursuant to which the parcel was conveyed, intentional and negligent misrepresentation, breach of contract, and unjust enrichment.

Kanany, however, failed to answer Concrete Services' complaint.

Accordingly, Concrete Services moved for entry of an order of default and default judgment against Kanany. On September 4, 2009, the trial court granted Concrete Services' motion, entering a default judgment against Kanany in the

amount of $11,306.26.

In May 2010, Ticor Title, on behalfof its insured, Escamilla, negotiated with Concrete Services a resolution of the claims against Escamilla. Ticor Title issued a check in the amount of $10,000 payable to Concrete Services "for the purpose of settling" the insurance claim asserted by Escamilla. Escamilla's

these defendants against the subject property were inferior and subordinate to the lien upon which Concrete Services sought to foreclose.

attorney thereafter mailed the settlement check to Concrete Services, enclosing three documents, entitled (1) "Stipulation and Order of Dismissal of All Claims Between Concrete Services, Inc., as Plaintiff, and Ovidio Escamilla, as Defendant Only"; (2) "Assignment of Default Judgment by Plaintiff Concrete Services, Inc. to Defendant Ovidio Escamilla"; and (3) "Partial Release of Lien". Concrete Services was authorized to cash the settlement check only upon

signing and returning the stipulation and dismissal of claims against Escamilla, the assignment ofthe default judgment against Kanany to Escamilla, and the

release of the lien against Escamilla's property.

The assignment of the defaultjudgment by Concrete Services to Escamilla was filed in the trial court on June 18, 2010. Three days later,

pursuant to the stipulation and dismissal signed by the parties, the trial court ordered that all claims between Concrete Services "and

Defendant/Crossclaimant, Ovidio Escamilla only" be dismissed with prejudice.

Following assignment of the default judgment and dismissal of Concrete Services' claims against Escamilla, Kanany moved, on May 25, 2011, to vacate the default order and judgment entered against him more than 21 months earlier. He asserted that the order and judgment were void as a matter of law due to insufficient service of process and, thus, a lack of personal jurisdiction over him. Contrary to Kanany's contention, the proof of service indicated that, on March 1, 2009, the summons and complaint had been personally served upon Kanany at his Bonney Lake residence by leaving them with a co-resident named "Cameron Kanany." Kanany alleged, however, that his step-brother, Kamran Kanany, had never resided at the Bonney Lake home. Kanany testified at a subsequent deposition that he did not receive the summons and complaint in March 2009; he further testified that he did not become aware of the lawsuit until after the default judgment was entered in September 2009.

In order to disprove Kanany's assertions, Escamilla submitted to the trial court evidence that Kanany had been aware of the Concrete Services litigation prior to entry of the default judgment. He provided a declaration of Greg Colbo, a senior title officer and underwriter at Ticor Title, who stated that he had received a telephone call from Kanany on March 11, 2009. During this call, Colbo asserted, Kanany stated that he had received the summons and complaint and discussed resolution of the lawsuit. Escamilla also submitted a handwritten note faxed by Kanany to the title officer inquiring as to whether Ticor Title would resolve the matter; the summons and complaint were faxed along with the note. Moreover, Escamilla's attorney stated in a declaration that Kanany had contacted him numerous times during July and September of 2009 regarding the Concrete Services litigation.

On September 26, 2011, the trial court held an evidentiary hearing on

3The handwritten note identifies the sender as "Robert Kanany" and states: "This is the paperwork you asked for. Are you going to answerthis or do I need to move forward with an attorney to deal with them. Please get back to me." Kanany admitted during his deposition that the handwriting was his own and that he had sent the fax.

A letter from Colbo to Escamilla, dated March 16, 2009, further corroborates Colbo's recollection of the events. The letter informs Escamilla that Ticor Title had received his claim relating to the Concrete Services litigation. It further states:

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