Mark Hoffman, V. Allfi, Inc., Frank Shreyberg, And John Does 1-10

• Court: Court of Appeals of Washington
• Decided: April 29, 2024
• Docket: 85254-0
• Status: Unpublished

Opinion

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

MARK HOFFMAN, No. 85254-0-I Respondent, DIVISION ONE v. UNPUBLISHED OPINION ALLFI, INC.,

Appellant,

and

FRANK SHREYBERG, and JOHN DOES 1-10,

Defendants. †

DÍAZ, J. — Mark Hoffman obtained a default judgment against AllFi, Inc. after it

failed to appear or respond to his lawsuit. A commissioner denied AllFi’s request to

vacate the default judgment. AllFi now appeals the superior court’s order denying its

motion to revise the commissioner’s order. AllFi argues that Hoffman did not properly

serve it and that excusable neglect, among other equitable factors, entitle it to relief from

judgment. We disagree and affirm.

†Frank Shreyberg, as an individual, and John Does 1-10 are not participating in this appeal. No. 85254-0-I/2

I. BACKGROUND

On June 24, 2021, Mark Hoffman filed a complaint against AllFi and its sole

corporate officer Frank Shreyberg, claiming violations of the Telephone Consumer

Protection Act (TCPA), 47 U.S.C. § 227 et seq. Hoffman alleged that Shreyberg caused

illegal telemarketing calls to be made to his cellular phone in April and May 2017.

Prior to filing his lawsuit, Hoffman determined that Shreyberg was the registered

agent for AllFi and that its registered office was located in Brooklyn, New York (hereinafter

the “Brooklyn address”). On March 29, 2021, a registered process server left the

summons and complaint at the Brooklyn address with an individual who identified himself

as “Jason D” and allegedly said he was authorized to accept service.

Shreyberg and AllFi did not appear or answer Hoffman’s complaint. On July 1,

2021, a superior court commissioner entered an order of default judgment against AllFi

and Shreyberg. In December 2022, Hoffman obtained writs of garnishment against

Shreyberg and AllFi and caused the documents to be mailed to AllFi at the Brooklyn

address. The garnishment documents were returned undelivered to Hoffman’s

representative.

On January 23, 2023, AllFi and Shreyberg moved to vacate the default judgment

on the ground that they were never properly served. Shreyberg asserted that he learned

of Hoffman’s lawsuit for the first time on January 13, 2023, when he discovered that his

bank account was frozen to satisfy the writ of garnishment. He further asserted that AllFi

had moved from the Brooklyn address on March 7, 2021, several weeks before Hoffman

attempted service.

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A superior court commissioner considered the matter at an evidentiary hearing on

February 23, 2023. The process server testified that the person who answered the door

at the Brooklyn address identified himself as “Jason D,” stated that he and Shreyberg

resided there, and asserted that he was authorized to accept service for AllFi. Shreyberg

testified that it was only an office and nobody ever resided there. He denied that anyone

named Jason ever worked there or was authorized to accept service on behalf of AllFi.

And although Shreyberg was uncertain as to when AllFi vacated the premises, he thought

it was sometime in February or March 2021.

Upon cross examination, Hoffman pointed out that “as of today … the State of New

York still shows that your statutory address [as the Brooklyn address].” When asked why

he had not changed it, Shreyberg responded: “It was an oversight on my part. I should

have, but didn’t. You know, this was at the time there was -- COVID was, you know, it

was -- it was just at the outbreak, and I should have gone in but neglected to, so, yes.”

Shreyberg then stated that AllFi’s current registered address was in Florida and

acknowledged that the Brooklyn address “should have been corrected, it should have

been changed.”

The commissioner found that Hoffman met the requirements for service of process

as to AllFi but not as to Shreyberg. In oral remarks, the commissioner described AllFi’s

failure to change its registered agent listing for the State of New York as “outrageous”

and declined to vacate the judgment based on excusable neglect. The commissioner

ultimately found that no equitable basis existed to vacate the default judgment.

Accordingly, the commissioner granted the motion to vacate default judgment as to

Shreyberg but denied it as to AllFi.

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AllFi filed a motion in superior court to revise the commissioner’s order to the extent

it denied AllFi’s motion to vacate the default judgment 1. In support of its motion, AllFi

submitted additional evidence that was not before the commissioner. On April 20, 2023,

the superior court declined to consider the additional evidence and denied revision. The

order stated that the court “agrees with the commissioner's ultimate conclusion that AllFi

has not demonstrated entitlement to its requested relief to vacate the default and

judgment against it because it failed to demonstrate excusable neglect. To that extent,

the Court adopts the commissioner’s legal reasoning and factual findings as its own.” The

order specified that the court had not considered materials not presented to the

commissioner.

AllFi appeals.

II. ANALYSIS

A. Standard of Review

All commissioner decisions are subject to revision by the superior court. W ASH.

CONST., art. IV, § 23. “Such revision shall be upon the records of the case, and the

findings of fact and conclusions of law entered by the court commissioner ....” RCW

2.24.050. On a motion to revise, the superior court reviews the commissioner’s findings

of fact and conclusions of law de novo based on the evidence and issues presented to

the commissioner. In re Vulnerable Adult Pet. for Winter, 12 Wn. App. 2d 815, 829, 460

P.3d 667 (2020). The superior court “is not required to defer to the fact finding discretion

of the commissioner” but “is authorized to determine its own facts based on the record

1AllFi claims it moved for reconsideration of the commissioner’s order and assigned error to that denial. But AllFi moved for revision, not reconsideration, so we interpret its challenge as such. 4 No. 85254-0-I/5

before the commissioner.” In re Marriage of Dodd, 120 Wn. App. 638, 644-45, 86 P.3d

801 (2004). On appeal, we review the superior court’s decision, not the commissioner’s.

Boeing Emps. Credit Union v. Burns, 167 Wn. App. 265, 270, 272 P.3d 908 (2012).

Default judgments are not favored in the law. Gage v. Boeing Co., 55 Wn. App.

157, 159, 776 P.2d 991 (1989). Because a default order deprives the parties of a trial on

the merits, a proceeding to set aside a default judgment is equitable in character and the

relief afforded “is to be administered in accordance with equitable principles and terms.”

White v. Holm, 73 Wn.2d 348, 351, 438 P.2d 581 (1968).

The party seeking relief under CR 60(b) bears the burden of showing relief is

warranted. Fowler v. Johnson, 167 Wn. App 596, 605, 273 P.3d 1042 (2012). “Appeal

from denial of a CR 60(b) motion is generally limited to the propriety of the denial.” State

v. Santos, 104 Wn.2d 142, 145, 702 P.2d 1179 (1985) (appeal from denial of a motion to

vacate an order of paternity).

We generally review a trial court’s decision on a motion for default judgment for

abuse of discretion. Morin v. Burris, 160 Wn.2d 745, 754, 161 P.3d 956 (2007). A court

abuses its discretion only when its decision is manifestly unreasonable or based on

untenable grounds. Showalter v. Wild Oats, 124 Wn. App. 506, 510, 101 P.3d 867 (2004).

However, a default judgment entered upon defective service of process is void and can

be vacated at any time. Allstate Ins. Co. v. Khani, 75 Wn. App. 317, 323-24, 877 P.2d

724 (1994). “Because courts have a mandatory, nondiscretionary duty to vacate void

judgments, a trial court’s decision to grant or deny a CR 60(b)(5) motion to vacate a

default judgment for want of jurisdiction is reviewed de novo.” Ahten v. Barnes, 158 Wn.

App. 343, 350, 242 P.3d 35 (2010).

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B. CR 60(b)(5) 2

AllFi argues that the default judgment should be vacated as void because Hoffman

did not comply with the legal requirements for service of process on a corporation. “A

default judgment against a party is void if the court did not have personal jurisdiction over

that party.” Delex Inc. v. Sukhoi Civil Aircraft Co., 193 Wn. App. 464, 468, 372 P.3d 797

(2016). “A court does not have personal jurisdiction over a party if service of the summons

and complaint was improper.” Id. “CR 60(b)(5) mandates the court vacate a void

judgment upon motion of a party, irrespective of the lapse of time.” Persinger v.

Persinger, 188 Wn. App. 606, 609, 355 P.3d 291 (2015).

“Service of process must comply with constitutional, statutory, and court rule

requirements.” Walker v. Orkin, LLC, 10 Wn. App. 2d 565, 568, 448 P.3d 815 (2019). A

plaintiff bears the initial burden to prove a prima facie case of sufficient service. Scanlan

v. Townsend, 181 Wn.2d 838, 847, 336 P.3d 1155 (2014). A plaintiff can establish a

prima facie case by providing a declaration of a process server, regular in form and

substance. State ex rel. Coughlin v. Jenkins, 102 Wn. App. 60, 65, 7 P.3d 818 (2000).

Further, RCW 4.28.080(10) permits service on a foreign corporation to be made by

serving “any agent, cashier or secretary thereof.”

The burden then shifts to the party challenging the sufficiency of service to

demonstrate by clear and convincing evidence that the service was improper. Scanlan,

181 Wn.2d at 847. “When a default judgment has been entered based upon an affidavit

of service, the judgment should be set aside only upon convincing evidence that the return

2Although the trial court’s order does not address service of process, as we will discuss below, the record supports an implicit finding that the default judgment was not void on this basis. 6 No. 85254-0-I/7

of service was incorrect.” Leen v. Demopolis, 62 Wn. App. 473, 478, 815 P.2d 269 (1991).

Clear and convincing evidence exists when the ultimate facts are shown to be “highly

probable.” Dependency of G.M.W., 24 Wn. App. 2d 96, 118, 519 P.3d 272 (2022)

(quoting In Re Welfare of Sego, 82 Wn.2d 736, 739, 513 P.2d 831 (1973)).

AllFi asserts the evidence establishes it was never properly served with the

summons and complaint. AllFi points to Shreyberg’s declaration and testimony stating

that AllFi was no longer located at the Brooklyn address when service was attempted

there and no one named Jason worked at AllFi or was authorized to accept service.

Here, the affidavit of the process server indicates that they served AllFi at the

address on record for its agent for service of process on March 29, 2021 by leaving the

summons and complaint with “Jason D,” an individual who claimed he was “authorized to

accept service for corp.” The affidavit also states that the summons and complaint were

mailed to the same address on April 2, 2021. This affidavit established prima facie

evidence of proper service on AllFi.

But the commissioner was presented with additional evidence. The process server

testified on the record at the hearing to facts to the same effect, thereby corroborating

that affidavit. And, for his part, Shreyberg was unable to recall under oath exactly when

AllFi vacated the premises. Thus, his testimony left some doubt as to whether there were

people at the office at that time, who made the representations the process server claimed

they made. Regardless, Shreyberg’s testimony, without more, does not establish that

service was incorrect by clear and convincing evidence or otherwise make it “highly

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probable” service was not adequately completed. 3 Dependency of G.M.W., 24 Wn. App.

2d at 118. In turn, the default judgment was not void due to improper service.

C. CR 60(b)(1)

AllFi argues that the equities weigh in favor of vacating the default judgment based

on CR 60(b)(1), which allows a court to grant relief for “[m]istakes, inadvertence, surprise,

excusable neglect or irregularity in obtaining a judgment or order.” We review such

motions for an abuse of discretion. Morin, 160 Wn.2d at 753

A motion to vacate under CR 60(b)(1) must be filed within a reasonable time and

not more than one year from the judgment. CR 60(b)(1); Ha v. Signal Elec., Inc., 182 Wn.

App. 436, 454, 332 P.3d 991 (2014). Here, the court entered the default judgment on

July 1, 2021. AllFi moved to vacate on January 25, 2023. Because AllFi moved to vacate

more than a year after the court entered the judgment, relief is not available on this basis.

See Gates v. Homesite Ins. Co., 28 Wn. App. 2d 271, 284, 537 P.3d 1081 (2023) (trial

court cannot grant CR 60(b)(1) motion to vacate filed more than a year after judgment

entered); Suburban Janitorial Services v. Clarke American, 72 Wn. App. 302, 307, 863

P.2d 1377 (1993) (noting that “CR 6 specifically excludes CR 60(b)’s time provisions from

enlargement by the court.”).

Even if AllFi’s motion to vacate was timely, relief is not warranted on this basis. A

party moving to vacate a default judgment must demonstrate “(1) that there is substantial

evidence supporting a prima facie defense; (2) that the failure to timely appear and

3In its motion for revision, AllFi sought to bolster Shreyberg’s testimony with additional evidence that was not before the commissioner. The trial court properly refused to consider this additional evidence. See RCW 2.24.050 (limiting the superior court's review on revision to the evidence before the commissioner). 8 No. 85254-0-I/9

answer was due to mistake, inadvertence, surprise, or excusable neglect; (3) that the

defendant acted with due diligence after notice of the default judgment; and (4) that the

plaintiff will not suffer a substantial hardship if the default judgment is vacated.” Little v.

King, 160 Wn.2d 696, 703-04, 161 P.3d 345 (2007). The first two factors are primary and

the other two are secondary. TMT Bear Creek Shopping Ctr., Inc. v. PETCO Animal

Supplies, Inc., 140 Wn. App. 191, 200-01, 165 P.3d 1271 (2007). “Whether or not a

default judgment should be set aside is a matter of equity.” Ha, 182 Wn. App. at 449.

As to the first factor, AllFi argues that Hoffman’s TCPA claims are barred by the

applicable four-year statute of limitations. See Giovanniello v. ALM Media, LLC, 726 F.3d

106, 107 (2d Cir. 2013) (applying generic federal statute of limitations in 28 U.S.C. § 1658

to claims brought under the TCPA). AllFi is incorrect. Under CR 3(a), an action is

commenced when a complaint is filed or a summons served. Either of these acts will toll

the statute of limitations as long as the other is completed within 90 days. RCW 4.16.170.

Hoffman served AllFi on March 29, 2021, less than four years after the first allegedly

improper call took place on April 5, 2017. He filed the summons and complaint less than

90 days later, so this is not a meritorious defense.

AllFi also argues that it established a prima facie defense because Shreyberg

denied that AllFi called Hoffman without consent. But AllFi cites no other evidence in

support of this claim. 4 To establish a prima facie defense, affidavits supporting motions

to vacate default judgments must set out the facts constituting a defense and cannot

4 AllFi cites Clerk’s Papers (CP) at 173 in support of its claim that “Shreyberg declared that AllFi did not use autodialing technology or otherwise commit the violations Respondent alleges” and “Shreyberg declared AllFi, Inc. does not engage in telemarketing.” No such evidence can be found in the CPs at 173. 9 No. 85254-0-I/10

merely state allegations and conclusions. Shepard Ambulance, Inc. v. Helsell, Fetterman,

Martin, Todd & Hokanson, 95 Wn. App. 231, 239, 974 P.2d 1275 (1999). The defendant

must present “concrete facts” that support a defense. Ha, 182 Wn. App. at 449. AllFi did

not meet this standard.

As to the second factor, AllFi argues that it did not willfully ignore the lawsuit, but

was unable to appear because the COVID-19 pandemic and resulting widespread

business disruptions forced it to cease business operations at the Brooklyn address in

early 2021. But Shreyberg did not update AllFi’s corporate address until after the

February 2023 evidentiary hearing. AllFi also argues that Shreyberg reasonably believed

that updating AllFi's business registration in Florida was sufficient. But Shreyberg

candidly admitted that he should have updated AllFi’s Brooklyn address. This oversight

was not excusable. And as previously noted, the trial court properly refused to consider

additional evidence regarding Shreyberg’s efforts to update AllFi’s corporate registration

that was not presented to the commissioner.

As to the third and fourth factors, AllFi argues that it acted promptly to vacate the

default judgment within days of discovering it and that vacating it will not prejudice

Hoffman. These secondary factors do not tip the balance in AllFi’s favor. AllFi has not

shown mistake or excusable neglect entitling it to have the default judgment vacated.

D. CR 60(b)(11)

Finally, AllFi argues that extraordinary circumstances justify vacating the default

judgment. Under CR 60(b)(11), a court may grant a party relief for “[a]ny other reason

justifying relief from the operation of the judgment.” “CR 60(b)(11) applications should be

reserved for situations involving extraordinary circumstances not covered by any other

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section of CR 60(b).” Topliff v. Chicago Ins. Co., 130 Wn. App. 301, 305, 122 P.3d 922

(2005). Moreover, those circumstances must relate to “irregularities extraneous to the

action of the court or questions concerning the regularity of the court’s proceedings.” In

re Marriage of Furrow, 115 Wn. App. 661, 674, 63 P.3d 821 (2003) (quoting In re Marriage

of Yearout, 41 Wn. App. 897, 902, 707 P.2d 1367 (1985)).

AllFi argues that the COVID-19 pandemic and resulting widespread business

disruptions qualify as extraordinary circumstances under CR 60(b)(11). It contends that

confusion surrounding AllFi’s sudden unplanned move from New York to Florida in early

2021 reasonably explains Shreyberg’s failure to update AllFi’s corporate registration and

respond to Hoffman’s allegedly improper service. But Shreyberg admitted that he should

have updated AllFi’s Brooklyn address. Further, excusable neglect is a factor to be

considered under a CR 60(b)(1) analysis. And AllFi cannot use CR 60(b)(11) to

circumvent the one-year time limit under CR 60(b)(1). Freibe v. Supancheck, 98 Wn .App.

260, 267, 992 P.2d 1014 (1999).

E. Attorney Fees

Hoffman requests an award of attorney fees on appeal. Hoffman has appeared

pro se in this appeal. Attorney fees are not available on appeal to a nonlawyer, pro se

litigant. In re Marriage of Brown, 159 Wn. App. 931, 938, 247 P.3d 466 (2011). Moreover,

Hoffman did not “devote a section of [his] opening brief to the request for the fees or

expenses” as RAP 18.1(d) requires. Although Hoffman is the prevailing party on appeal,

his request for fees must be denied.

11 No. 85254-0-I/12

III. CONCLUSION

Affirmed.

WE CONCUR: