IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
GEORGE CHRISTENSEN, No. 82061-3-I Respondent, DIVISION ONE v. UNPUBLISHED OPINION T & L COMMUNICATIONS, INC., a Washington corporation; PACIFIC TECH CONSTRUCTION INC., a Washington corporation; KENNETH FORTENBERRY, an individual; and OLD REPUBLIC SURETY COMPANY, a foreign corporation
Defendants,
LARRY E. BUSHAW,
Appellant.
SMITH, J. — Larry Bushaw, the president of T & L Communications Inc.,
appeals the trial court’s imposition of contempt sanctions on Bushaw individually.
After George Christensen was awarded damages against T & L in a wrongful
discharge case, Bushaw appeared on behalf of T & L at a supplemental
proceeding to answer questions about T & L’s finances. Bushaw was ordered to
bring T & L’s financial statements and records of bank accounts to the
supplemental proceeding. However, when asked under oath to list all of T & L’s
bank accounts, he failed to disclose several active checking and savings
accounts. After discovering the concealment, Christensen moved to impose
Citations and pin cites are based on the Westlaw online version of the cited material. No. 82061-3-I/2
contempt sanctions against T & L and against Bushaw personally. While
Christensen served T & L’s attorney with the motion for sanctions, he did not
serve the motion on Bushaw, who was not a party to the underlying action. At
the contempt hearing, Bushaw was not represented and was not given an
opportunity to argue against the sanctions. The trial court imposed contempt
sanctions against Bushaw amounting to the entire judgment on T & L, and
Bushaw appeals.
We conclude that because Bushaw was not given notice and an
opportunity to be heard, the contempt order must be vacated.
FACTS
In 2013, George Christensen sued T & L and three other defendants for
unpaid wages, wrongful termination, tortious interference with business
relationships, statutory discrimination/retaliation, and assault and battery. In
September 2016, the court granted partial summary judgment to Christensen,
finding that he had established T & L’s liability for unpaid prevailing wages. All of
the other defendants were dismissed, and the remainder of Christensen’s claims
against T & L went to trial. In January 2018, the jury found that T & L wrongfully
terminated Christensen, and it awarded Christensen $76,581.92 in damages. In
May 2018, the court awarded Christensen an additional $90,963.80 in attorney
fees and costs.
T & L did not voluntarily pay any of this amount, but Christensen was able
to collect a small portion through bank garnishments. On September 21, 2018,
2 No. 82061-3-I/3
the court ordered Larry Bushaw, T & L’s president, or Cathryn 1 Bushaw, T & L’s
vice president, to appear in court for supplemental proceedings and testify
regarding T & L’s finances. Larry and Cathryn Bushaw are the only officers and
the only shareholders of T & L. The order required whomever appeared on
behalf of T & L to bring all of T & L’s financial statements from the past two years
and records of all savings and checking accounts that had not already been
provided to Christensen. On the same date, the court issued an order for Larry
or Cathryn Bushaw to appear and show cause why the court should not order
T & L to deliver funds to the sheriff.
On October 12, 2018, Larry Bushaw appeared for the supplemental
proceeding with T & L’s attorney, Timothy Dack, and was examined under oath
regarding T & L’s assets. As part of this examination, Bushaw filled out a form
which asked him to list “all banks” in which T & L had a checking or savings
account. Bushaw listed only “Columbia CU.” After the examination, the court
ordered Larry or Cathryn Bushaw to deliver T & L’s vehicles and the assets in
T & L’s Columbia Credit Union (Columbia) account to the Clark County Sheriff’s
Office.
On December 11, 2018, T & L disclosed two October 2018 bank
statements from HAPO Community Credit Union to Christensen. These
statements listed three savings and two checking accounts that T & L had not
previously disclosed to Christensen. The statements showed that T & L was
The court refers to Bushaw’s wife as “Catherine” throughout the record, 1
but this appears to be a misspelling. “Bushaw” in this opinion refers to Larry Bushaw.
3 No. 82061-3-I/4
actively using the HAPO checking accounts both before and after the
supplemental proceeding. Over $138,000 was deposited in the two accounts in
the month of October, including more than $55,000 before the date of the
supplemental proceeding. 2
On March 7, 2019, Christensen asked the court to find both T & L and
Larry Bushaw in contempt and to hold Bushaw personally liable for remedial
sanctions up to the whole value of the judgment against T & L. Christensen
argued that the failure to disclose any information about the HAPO accounts, as
well as the failure to surrender T & L’s vehicles and the money in T & L’s
Columbia account to the sheriff, constituted contempt of court. He asked the
court to impose compensatory and coercive remedial sanctions on Bushaw. 3
Alternatively, Christensen asked the court to disregard the corporate entity and
hold Larry and Cathryn Bushaw, as T & L’s shareholders, liable for the judgment
against T & L. Christensen contended that because Larry Bushaw exercised
control over payment of T & L funds and was using that control to increase T & L
expenditures, pay himself substantial compensation, and hide T & L’s assets,
personal liability was appropriate.
T & L’s attorney objected to this motion. He asserted that T & L had been
unable to comply with the order to transfer vehicles to the sheriff and that the
court could not hold Larry or Cathryn Bushaw liable when they were not parties
2 Both bank statements appear to be cut off at different points, with each statement failing to account for about $17,000 of the total month’s deposits. 3 Compensatory sanctions “compensate the complainant for losses
sustained” while coercive sanctions “coerce the defendant into compliance with the court’s order.”
4 No. 82061-3-I/5
to the underlying action and had not been served with the motion to hold them
liable.
At the hearing, although T & L’s attorney advocated against the sanctions,
Bushaw was not personally represented either by an attorney or pro se. 4
Nonetheless, the court ordered the sanctions and held Bushaw personally liable
for the full amount of the judgment against T & L. Bushaw appeals.
ANALYSIS
Bushaw contends that the court did not have the authority to enter
sanctions against him when he was not a party to the underlying lawsuit and had
not been served with the motion for sanctions. He also contends that the court
erred by entering a finding that Bushaw was represented at the supplemental
proceeding by his attorney. We agree.
Standard of Review
We generally “review a trial court’s decision in a contempt proceeding for
an abuse of discretion.” In re Marriage of Eklund, 143 Wn. App. 207, 212, 177
P.3d 189 (2008). However, the “‘court’s authority to impose sanctions for
contempt is a question of law, which we review de novo.’” State v. Dennington,
12 Wn. App. 2d 845, 850, 460 P.3d 643 (quoting In re the Interest of Silva, 166
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IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
GEORGE CHRISTENSEN, No. 82061-3-I Respondent, DIVISION ONE v. UNPUBLISHED OPINION T & L COMMUNICATIONS, INC., a Washington corporation; PACIFIC TECH CONSTRUCTION INC., a Washington corporation; KENNETH FORTENBERRY, an individual; and OLD REPUBLIC SURETY COMPANY, a foreign corporation
Defendants,
LARRY E. BUSHAW,
Appellant.
SMITH, J. — Larry Bushaw, the president of T & L Communications Inc.,
appeals the trial court’s imposition of contempt sanctions on Bushaw individually.
After George Christensen was awarded damages against T & L in a wrongful
discharge case, Bushaw appeared on behalf of T & L at a supplemental
proceeding to answer questions about T & L’s finances. Bushaw was ordered to
bring T & L’s financial statements and records of bank accounts to the
supplemental proceeding. However, when asked under oath to list all of T & L’s
bank accounts, he failed to disclose several active checking and savings
accounts. After discovering the concealment, Christensen moved to impose
Citations and pin cites are based on the Westlaw online version of the cited material. No. 82061-3-I/2
contempt sanctions against T & L and against Bushaw personally. While
Christensen served T & L’s attorney with the motion for sanctions, he did not
serve the motion on Bushaw, who was not a party to the underlying action. At
the contempt hearing, Bushaw was not represented and was not given an
opportunity to argue against the sanctions. The trial court imposed contempt
sanctions against Bushaw amounting to the entire judgment on T & L, and
Bushaw appeals.
We conclude that because Bushaw was not given notice and an
opportunity to be heard, the contempt order must be vacated.
FACTS
In 2013, George Christensen sued T & L and three other defendants for
unpaid wages, wrongful termination, tortious interference with business
relationships, statutory discrimination/retaliation, and assault and battery. In
September 2016, the court granted partial summary judgment to Christensen,
finding that he had established T & L’s liability for unpaid prevailing wages. All of
the other defendants were dismissed, and the remainder of Christensen’s claims
against T & L went to trial. In January 2018, the jury found that T & L wrongfully
terminated Christensen, and it awarded Christensen $76,581.92 in damages. In
May 2018, the court awarded Christensen an additional $90,963.80 in attorney
fees and costs.
T & L did not voluntarily pay any of this amount, but Christensen was able
to collect a small portion through bank garnishments. On September 21, 2018,
2 No. 82061-3-I/3
the court ordered Larry Bushaw, T & L’s president, or Cathryn 1 Bushaw, T & L’s
vice president, to appear in court for supplemental proceedings and testify
regarding T & L’s finances. Larry and Cathryn Bushaw are the only officers and
the only shareholders of T & L. The order required whomever appeared on
behalf of T & L to bring all of T & L’s financial statements from the past two years
and records of all savings and checking accounts that had not already been
provided to Christensen. On the same date, the court issued an order for Larry
or Cathryn Bushaw to appear and show cause why the court should not order
T & L to deliver funds to the sheriff.
On October 12, 2018, Larry Bushaw appeared for the supplemental
proceeding with T & L’s attorney, Timothy Dack, and was examined under oath
regarding T & L’s assets. As part of this examination, Bushaw filled out a form
which asked him to list “all banks” in which T & L had a checking or savings
account. Bushaw listed only “Columbia CU.” After the examination, the court
ordered Larry or Cathryn Bushaw to deliver T & L’s vehicles and the assets in
T & L’s Columbia Credit Union (Columbia) account to the Clark County Sheriff’s
Office.
On December 11, 2018, T & L disclosed two October 2018 bank
statements from HAPO Community Credit Union to Christensen. These
statements listed three savings and two checking accounts that T & L had not
previously disclosed to Christensen. The statements showed that T & L was
The court refers to Bushaw’s wife as “Catherine” throughout the record, 1
but this appears to be a misspelling. “Bushaw” in this opinion refers to Larry Bushaw.
3 No. 82061-3-I/4
actively using the HAPO checking accounts both before and after the
supplemental proceeding. Over $138,000 was deposited in the two accounts in
the month of October, including more than $55,000 before the date of the
supplemental proceeding. 2
On March 7, 2019, Christensen asked the court to find both T & L and
Larry Bushaw in contempt and to hold Bushaw personally liable for remedial
sanctions up to the whole value of the judgment against T & L. Christensen
argued that the failure to disclose any information about the HAPO accounts, as
well as the failure to surrender T & L’s vehicles and the money in T & L’s
Columbia account to the sheriff, constituted contempt of court. He asked the
court to impose compensatory and coercive remedial sanctions on Bushaw. 3
Alternatively, Christensen asked the court to disregard the corporate entity and
hold Larry and Cathryn Bushaw, as T & L’s shareholders, liable for the judgment
against T & L. Christensen contended that because Larry Bushaw exercised
control over payment of T & L funds and was using that control to increase T & L
expenditures, pay himself substantial compensation, and hide T & L’s assets,
personal liability was appropriate.
T & L’s attorney objected to this motion. He asserted that T & L had been
unable to comply with the order to transfer vehicles to the sheriff and that the
court could not hold Larry or Cathryn Bushaw liable when they were not parties
2 Both bank statements appear to be cut off at different points, with each statement failing to account for about $17,000 of the total month’s deposits. 3 Compensatory sanctions “compensate the complainant for losses
sustained” while coercive sanctions “coerce the defendant into compliance with the court’s order.”
4 No. 82061-3-I/5
to the underlying action and had not been served with the motion to hold them
liable.
At the hearing, although T & L’s attorney advocated against the sanctions,
Bushaw was not personally represented either by an attorney or pro se. 4
Nonetheless, the court ordered the sanctions and held Bushaw personally liable
for the full amount of the judgment against T & L. Bushaw appeals.
ANALYSIS
Bushaw contends that the court did not have the authority to enter
sanctions against him when he was not a party to the underlying lawsuit and had
not been served with the motion for sanctions. He also contends that the court
erred by entering a finding that Bushaw was represented at the supplemental
proceeding by his attorney. We agree.
Standard of Review
We generally “review a trial court’s decision in a contempt proceeding for
an abuse of discretion.” In re Marriage of Eklund, 143 Wn. App. 207, 212, 177
P.3d 189 (2008). However, the “‘court’s authority to impose sanctions for
contempt is a question of law, which we review de novo.’” State v. Dennington,
12 Wn. App. 2d 845, 850, 460 P.3d 643 (quoting In re the Interest of Silva, 166
Wn.2d 133, 140, 206 P.3d 1240 (2009)), review denied, 196 Wn.2d 1003 (2020).
Furthermore, we review the court’s findings of fact underlying the contempt order
for substantial evidence. In re Marriage of Eklund, 143 Wn. App. at 212.
T & L’s attorney informed the trial court at the hearing that he did not 4
represent Bushaw, and he only briefly addressed the issues concerning Bushaw personally in general terms.
5 No. 82061-3-I/6
“Evidence is substantial where it is ‘sufficient to persuade a rational fair-minded
person the premise is true.’” Braatz v. Braatz, 2 Wn. App. 2d 889, 899, 413 P.3d
612 (2018) (quoting Sunnyside Valley Irr. Dist. v. Dickie, 149 Wn.2d 873, 879, 73
P.3d 369 (2003)).
Scope of Attorney for T & L’s Representation
As an initial matter, Bushaw contends that the court erred in finding that at
the supplemental proceeding on October 12, “Bushaw appeared as ordered with
his attorney, Timothy Dack.” Bushaw asserts that Dack was T & L’s attorney, not
Bushaw’s. The record supports this conclusion: Dack is described exclusively as
T & L’s attorney throughout the record, and Dack clarified at the contempt
hearing that he did not represent Bushaw personally. Christensen agrees that
this finding is not supported by substantial evidence. We conclude that this
finding was entered in error.
Sufficiency of Notice for Contempt Motion
Bushaw next contends that the trial court did not have the authority to
enter the findings of fact, conclusions of law, and order for sanctions against him
when he had not been served with the motion for sanctions. We agree.
“A person who refuses, or without sufficient excuse neglects, to obey an
order” in a supplemental proceeding under chapter 6.32 RCW “may be
punished . . . as for contempt.” RCW 6.32.180. The court may “initiate a
proceeding to impose a remedial sanction . . . in the proceeding to which the
contempt is related.” RCW 7.21.030(1). RCW 7.21.030(1) requires that, except
where the court imposes sanctions after directly observing contempt in the
6 No. 82061-3-I/7
courtroom under RCW 7.21.050, sanctions may only be imposed “after notice
and hearing.” RCW 7.21.050. Notice in a contempt proceeding must at a
minimum “inform[ ] the accused of the time and place of the hearing and the
nature of the charges pending.” Burlingame v. Consol. Mines & Smelting Co.,
106 Wn.2d 328, 335, 722 P.2d 67 (1986). The right to notice is important
because it protects the individual’s right to be heard, which is the most significant
protection in a contempt proceeding and includes the right to produce witnesses
or other evidence. In re Rapid Settlements, Ltd., 189 Wn. App. 584, 598, 359
P.3d 823 (2015); State v. Hatten, 70 Wn.2d 618, 621, 425 P.2d 7 (1967).
In this case, the court imposed sanctions under RCW 7.21.030, which
requires notice and hearing. Christensen served T & L’s attorney with the motion
to hold Bushaw in contempt, but he does not claim that he served Bushaw with
notice. Therefore, the record does not establish that Bushaw was informed of
the hearing and nature of the charges against him, as required by Burlingame.
106 Wn.2d at 335. The fact that the notice provided to Bushaw was insufficient
is illustrated by the fact that it did not protect Bushaw’s right to be heard. See
Rapid Settlements, 189 Wn. App. at 598 (“‘The notice requirement is important
only because it protects an individual’s right to be heard.’” (quoting Burlingame,
106 Wn.2d at 332)). Indeed, Bushaw was not given the opportunity to advocate
for his interests at the contempt hearing, either on his own behalf or through an
attorney. We hold that at a minimum, Bushaw was entitled to receive notice of
the contempt hearing personally when sanctions were sought against him
personally.
7 No. 82061-3-I/8
Christensen disagrees and claims that notice in this case was “‘reasonably
calculated’” to inform Bushaw of the motion against him. Christensen contends
that Bushaw was an officer of T & L and therefore would presumably learn of the
motion from T & L’s attorney. However, even in the cases cited by Christensen
in support of this proposition, notice was at least mailed to the person who
required the notice. See State v. Nelson, 158 Wn.2d 699, 705, 147 P.3d 553
(2006) (Department of Licensing mailed notice of license revocation to party’s
address of record); Jones v. Flowers, 547 U.S. 220, 226, 126 S. Ct. 1708, 164 L.
Ed. 2d 415 (2006) (State informed party of impending tax sale by mailing him a
certified letter). Christensen cites no case where notice for a contempt
proceeding could properly be served to a different entity than the entity against
whom sanctions were sought.
Christensen also contends that the notice to T & L in this case was, in fact,
sufficient to protect Bushaw’s right to be heard, because it is likely that T & L’s
attorney informed Bushaw of the pending motion. Christensen asserts that
“whether [Bushaw] retained counsel and noted his objection at the hearing was
up to” Bushaw. However, the protections of due process should not be permitted
to rest on the expected actions of private third parties. Without a record that
Bushaw received personal notice of the contempt proceeding, there is not a
sufficient basis to conclude that Bushaw had a reasonable opportunity to prepare
evidence to defend himself. Moreover, even if we concluded that Bushaw had
actual notice of the hearing, we would still conclude that Bushaw’s procedural
rights were not enforced because the court did not give Bushaw an opportunity to
8 No. 82061-3-I/9
be heard at the contempt hearing. Hatten, 70 Wn.2d at 621. Because he did not
receive sufficient notice of the contempt proceeding, the court erred in imposing
sanctions on Bushaw. 5
Although the record in this case appears to confirm that Bushaw failed to
disclose all of T & L’s bank accounts as ordered, due process requires that he be
given notice and an opportunity to be heard prior to a finding of contempt and
entry of sanctions. We reverse and remand to vacate the order imposing
sanctions on Larry Bushaw.
WE CONCUR:
5 Christensen also characterizes Bushaw’s argument as claiming that he could not be found to be in contempt when he was not a party to the underlying case. Bushaw does not appear to make this argument. Rather, he claims only that the court did not have authority to impose sanctions on a nonparty without notice. Thus, while Christensen is correct that sanctions must be imposed “in the proceeding to which the contempt is related,” regardless of whether the sanctioned entity is a party, we need not address this issue. See RCW 7.21.030(1).