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ORDER – 1

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON

AT SEATTLE

USA GATEWAY TRAVEL, INC.,

Plaintiffs,

v.

GEL TRAVEL, INC., et al.,

Defendants.

CASE NO. C06-053JLR

ORDER

I. INTRODUCTION

This matter comes before the court on a motion for summary judgment from

Defendant Dr. Chau-Su Ou (Dkt. # 35), a motion for partial summary judgment from

Plaintiff USA Gateway Travel (“Gateway”) (Dkt. #37), and a motion for partial summary

judgment from Defendants GEL Travel (“GEL”) and Ester Chen (Dkt. # 42). The court

has heard oral argument in this matter. 

For the reasons stated below, the court GRANTS Defendant Dr. Ou’s motion (Dkt.

# 35) and dismisses all claims against Dr. Ou. The court GRANTS in part and DENIES

in part Plaintiff Gateway’s motion for partial summary judgment (Dkt. # 37). The court

GRANTS in part and DENIES in part the motion for partial summary judgment from

Defendants GEL and Ms. Chen (Dkt. # 42). 

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ORDER – 2

II. BACKGROUND

Plaintiff Gateway is an airline ticket wholesaler. From 1999 until 2004, Defendant

GEL, a retail travel agency, purchased airline tickets for its customers through Gateway. 

GEL’s principal, sole employee, and sole officer is Ester Chen. In a typical transaction,

Ms. Chen would obtain payment for a ticket directly from her customer via check or

credit card. She would provide her customer’s payment to the Gateway employee who

worked on GEL’s account, Jennifer Lin. Ms. Lin would purchase the ticket directly from

the airline and send the ticket and an invoice to GEL. 

Dr. Chau-Su Ou is a frequent traveler and long-time customer of GEL. In the

1990s, Dr. Ou provided Ms. Chen with a BankOne credit card number and its expiration

date. Ou Dep. at 35. From that time until Fall of 2004, Ms. Chen used this card to pay

for Dr. Ou’s airline tickets and travel expenses. Id. 

In early 2003, Dr. Ou obtained another credit card, a Citibank Mastercard

(“Citibank card”). Id. at 42-43. According to Dr. Ou, Ms. Chen advised him to obtain

the second card as a back-up form of payment and a means to earn mileage benefits. Id.

at 47. During a brief telephone call around June 2003, Dr. Ou provided Ms. Chen with 

the Citibank card number, expiration date, and online personal identification number

(“PIN”). Id. at 48. It is uncontested that when Dr. Ou provided Ms. Chen with the

Citibank card information, they did not discuss whether or how the second card would be

used. Id. at 52; Chen Dep. at 59. Shortly thereafter, Ms. Chen contacted Citibank; she

changed the street address associated with the card to her home address and established

her own password-protected email account. Chen Dep. at 68, 69, 140, 141. Dr. Ou was

not aware that Ms. Chen established her own access to the account. Ou Dep. at 55-56. 

Ms. Chen then began using Dr. Ou’s Citibank card to purchase tickets for other

GEL customers. Chen Dep. at 62-64. Ms. Chen concedes that she did not have Dr. Ou’s

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ORDER – 3

authorization to do so. Chen Dep. 101, 102. From July 2003 until October 2004, nearly

$1,000,000 worth of airline tickets for persons other than Dr. Ou were purchased with his

Citibank card. Wilkinson Decl. at 4-139. None of those tickets were purchased for Dr.

Ou. Chen Dep. at 62-63. While Ms. Chen made periodic partial payments on the

account, the outstanding balance on Dr. Ou’s card reached $280,282.87 in September

2004. Wilkinson Decl. at 4-139. Ms. Chen never told Dr. Ou that she was using his

Citibank card to purchase tickets for other GEL customers, nor did Dr. Ou receive

statements associated with the account. Chen Decl. at 68. Chen’s practice continued for

nearly 18 months unbeknownst to Dr. Ou. 

In late 2004, Dr. Ou’s banker informed Dr. Ou that he had a large outstanding

balance on his Citibank card. Ou Dep. at 64. Dr. Ou contacted Citibank, denied the

charges, and executed a fraud affidavit attesting that he had not authorized use of the

card. Id. at 66. When Citibank declined the charges, the airlines issued Gateway

“chargeback” notices demanding payment. Men Decl. ¶ 3. Gateway paid the airlines a

total of $175,757.50 in compensation for the tickets purchased with Dr. Ou’s credit card. 

Id. ¶ 5.

Gateway alleges negligent maintenance of a personal credit card against Dr. Ou. 

Against GEL and Ms. Chen, Gateway alleges fraud, negligent misrepresentation,

conversion, unjust enrichment, breach of contract, and a violation of the Consumer

Protect Act (“CPA”) under RCW § 19.86. See Compl. 

Dr. Ou’s motion for summary judgment seeks dismissal of the negligence claim. 

Gateway’s motion seeks partial summary judgement on its contract, negligent

misrepresentation, and unjust enrichment claims. GEL and Ms. Chen seek partial

summary judgment on the fraud and CPA claims. 

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ORDER – 4

III. DISCUSSION

In examining a motion for summary judgment, the court must draw all inferences

from the evidence in the light most favorable to the non-moving party. Addisu v. Fred

Meyer, Inc., 198 F.3d 1130, 1134 (9th Cir. 2000). Summary judgment is proper where

there is no genuine issue of material fact and the moving party is entitled to judgment as a

matter of law. Fed. R. Civ. P. 56(c). The moving party bears the initial burden to

demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477

U.S. 317, 323 (1986). If the moving party meets its burden, the opposing party must

show that there is a genuine issue of fact. Matsushita Elect. Indus. Co. v. Zenith Radio

Corp., 475 U.S. 574, 586-87 (1986). The opposing party must present significant and

probative evidence to support its claim or defense. Intel Corp. v. Hartford Accident &

Indem. Co., 952 F.2d 1551, 1558 (9th Cir. 1991). For purely legal questions, summary

judgment is appropriate without deference to the non-moving party.

A. Because Gateway Cannot Establish the Requisite Duty, Dr. Ou Is Entitled to

Summary Judgment on the Negligence Claim. 

Gateway contends that Dr. Ou created the necessary conditions for Gateway’s loss

by providing his Citibank card number, expiration date, and PIN to Ms. Chen and failing

to notice that he was not receiving Citibank statements. In his motion for summary

judgment, Dr. Ou argues, inter alia, that he did not owe GEL a duty of care.

In a negligence action, the threshold question is whether the defendant owes a duty

of care to the injured plaintiff. Kelly v. Falin, 896 P.2d 1245, 1247 (Wash. 1995).

Gateway is unable to cite any controlling authority for the proposition that a cardholder

owes a duty of care to a third party who incurs economic loss from the unauthorized use

of a credit card. Gateway urges the court to recognize a new duty of care. “The

existence of duty is a question of law which is determined by foreseeability and policy

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ORDER – 5

considerations.” Shepard v. Mielke, 877 P.2d 220, 222 (Wash. Ct. App. 1994). Duty

does not extend to unforeseeable risks of harm. See, e.g., Christen v. Lee, 780 P.2d 1307,

1313 (Wash. 1989) (finding that drinking establishment may be liable for criminal assault

by patron, but only if such assault is foreseeable based on obvious intoxication and notice

of propensity for violence); Mauch v. Kissling, 783 P.2d 601, 606 (Wash. Ct. App. 1989)

(holding that scouting organization owed no duty to anticipate potential injury from

airline ride furnished to scout); Curran v. Marysville, 766 P.2d 1141, 1145-46 (Wash. Ct.

App. 1989) (holding that one who cares for a child has no duty to foresee or guard against

an unforeseeable hazard).

The court concludes that Gateway’s injury was not foreseeable to Dr. Ou. First,

Gateway concedes that it did not have a contractual relationship with Dr. Ou. In fact, Dr.

Ou had no knowledge that Ms. Chen purchased his airline tickets through Gateway. In

addition, Gateway fails to produce evidence showing that Dr. Ou had reason to anticipate

Ms. Chen’s misuse of his Citibank card. Since the 1990s, when Dr. Ou provided his

BankOne card to Ms. Chen, she used it in the manner authorized by Dr. Ou – to purchase

his personal airline tickets or to pay for his personal travel expenses. It is uncontested

that Dr. Ou did not authorize Ms. Chen to use his Citibank card to purchase tickets for

her other customers. Dr. Ou never received any statements because Ms. Chen redirected

them to her personal address.

Moreover, public policy considerations weigh against the imposition of a new duty

on a cardholder to an unknown third party who is injured by the unauthorized use of a

credit card. Gateway argues that a Second Circuit case, Minskoff v. American Express

Travel Related Serv. Co., Inc., 98 F.3d 703, 709 (2d. Cir. 1996), establishes a general

common law obligation to examine credit card statements and report forgeries and

alterations. Minskoff addresses a cardholder’s liability for unauthorized charges under

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ORDER – 6

the Truth and Lending Act to an issuing financial institution. See id. Minskoff does not

address the imposition of a duty to protect unknown third parties from unauthorized

charges. While the court agrees with Gateway’s contention that the law should impose

some obligation on a cardholder to take reasonable steps to prevent credit card fraud, the

court is not convinced that such an obligation runs to an unknown entity under the

circumstances present in this case. To so hold would allow every third party injured by

credit card fraud or identity theft to seek to collect its losses from a cardholder under a

negligence theory. Such an expansive theory of liability would discourage persons from

acquiring credit cards and undermine public policy in favor of encouraging commerce. 

For these reasons, the court concludes, as a matter of law, that Dr. Ou owed

Gateway no duty of care. The court grants Dr. Ou’s motion for summary judgment and

dismisses Gateway’s claim against Dr. Ou. 

B. Gateway Is Entitled to Summary Judgment on Its Breach of Contract Claim. 

Gateway moves for summary judgment on its breach of contract claims against

Defendants GEL and Ms. Chen. Gateway’s breach of contract claim is appropriate for

summary disposition because, taking the evidence in a light most favorable to GEL and

Ms. Chen, all facts material to the contract claim are either undisputed or admitted. 

1. Undisputed Evidence Establishes the Existence of a Contract. 

While Gateway and GEL never entered into a written contract, the evidence shows

that an agreement existed whereby Gateway provided airline tickets to GEL’s customers

in exchange for payment. See Chen Dep. at 42. Consistent with this agreement, GEL

regularly purchased tickets for its customers through Gateway from 1999 until 2003. Ms.

Chen admits that GEL was required to pay for the tickets that Gateway issued on behalf

of GEL’s customers. Id. Ms. Chen testified that she recognized this agreement to be

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ORDER – 7

legally enforceable; she believed she had a right to sue Gateway if it failed to supply the

tickets. Id. at 43. 

A contract implied in fact may “arise by inference or implication from

circumstances which, according to the ordinary course of dealing and the common

understanding of men, show a mutual intention on the part of the parties to contract with

each other.” Bell v. Hehewald, 628 P.2d 1305, 1306-07 (Wash. 1981) (internal citation

omitted) (holding oral contract between broker and property owner enforceable). The

undisputed evidence shows that Gateway and GEL shared a mutual intention to exchange

payment for wholesale airline tickets. The parties course of dealing for nearly 10 years –

whereby GEL paid Gateway for wholesale airline tickets – evidences a mutual

understanding. Indeed, GEL does not contest the existence of a contract. Under these

circumstances, where there is clear, cogent evidence of a mutual understanding between

GEL and Gateway, the court concludes that a contract implied in fact existed between

Gateway and GEL. 

2. Undisputed Evidence Establishes that Gateway is Entitled to Recover

the Price of the Airline Tickets Provided to GEL’s Customers.

Where a contract for the sale of goods or services exists, a seller who provides

conforming goods is entitled to recover the agreed purchase price of the goods or

services. Syrovy v. Alpine Res., Inc., 859 P.2d 51, 55 (Wash. 1993). Gateway’s

evidence shows that Gateway performed its responsibilities under the contract by

providing GEL’s customers with airline tickets. For each transaction for which it claims

damages, Gateway submits (a) an invoice showing that Ms. Chen ordered and received an

airline ticket; (b) a chargeback notice showing that the charges for the tickets were

rejected and the airline demanded payment of Gateway; and (c) proof that Gateway paid

the airline in the amount of the chargeback. Lin Decl. at 3-142; Men Decl. at ¶ 6, 4-213.

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1

Gateway correctly observes that the doctrine of account stated prevents Ms. Chen from

now arguing that the services reflected on those statements were not actually rendered. See

Sunnyside Valley Irrigtion Dist. v. Roza Irrigation Dist., 877 P.2d 1283, 1285 (Wash. 1994) (A

“party’s retention without objection for an unreasonably long time of a statement of account

rendered by the other party is a manifestation of assent.”). 

ORDER – 8

Gateway has also submitted a Fed. R. Evid. 1006 summary that identifies each

transaction and the amount of Gateway’s loss with annotations to the relevant evidentiary

material. See O’Neill Decl. at 3-7. Gateway’s proffer demonstrates that Gateway

provided $175,757.50 worth of tickets to GEL for the benefit of GEL’s customers. 

Ms. Chen, who admits the existence of a contract between GEL and Gateway,

claims that she can “account for only $47,000 worth of tickets” and “does not believe”

that she was responsible for the remaining charges. See Defs.’ Opp’n at 9, 13. Aside

from her inability to recall specific transactions, Ms. Chen does not submit any evidence

to show that she did not purchase or receive the airline tickets at issue from Gateway. 

When presented with Citibank statements reflecting the charges, Ms. Chen could not

identify a single transaction she had not ordered. Chen Dep. at 163. Ms. Chen concedes

that she relied on Gateway’s invoices for documentation of her purchases and that she did

not maintain her own records. Id. at 108. Ms. Chen failed to object to the invoices when

she received them from Gateway.1

 Finally, the uncontested evidence shows that Ms.

Chen was the only person with access to Dr. Ou’s Citibank account and that all of the

charges on that account were for airline travel.

Having provided no factual basis for her denials, Ms. Chen’s statement that she

cannot account for the charges does not create a material issue of fact as to the amount of

damages. “Conclusory allegations, unsupported by facts, are insufficient to survive a

motion for summary judgment.” See Hernandez v. Spacelabs Medical Inc., 343 F.3d

1107, 1112 (9th Cir. 2003) (citing Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989)). 

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ORDER – 9

The court therefore finds that Gateway is entitled to $175,757.50 in damages for breach

of contract. 

3. Gateway is Entitled to Prejudgment Interest. 

 A federal court sitting in diversity applies state law to determine the availability of

prejudgment interest. James B. Lansing Sound Inc. v. Nat’l Fire Ins. Co., 801 F.2d 1560,

1569 (9th Cir. 1986). Under Washington law, prejudgment interest is available where the

amount claimed is “liquidated.” Car Wash. Enter., Inc. v. Kampanos, 874 P.2d 868, 875

(Wash. Ct. App. 1994). An amount claimed is liquidated “where the evidence furnishes

data, which, if believed, makes it possible to compute the amount with exactness, without

reliance on opinion or discretion.” Id. 

As demonstrated by Gateway’s evidence, the amount of contract damages,

$175,757.50, is the sum of all of the payments Gateway made to compensate the airlines

for the rejected charges from Dr. Ou’s credit card. Because no discretion is required to

compute this amount, Gateway is entitled to prejudgment interest. 

Prejudgement interest runs from the date the claim arose until judgment is entered.

 Hansen v. Rothaus, 730 P.2d 662, 665 (Wash. 1986). Prejudgment interest may be

awarded in civil litigation at the statutory judgment interest rate, which is 12 percent per

annum. See RCW §§ 4.56.110, 19.52.020. The court concludes that Gateway is entitled

to prejudgment interest at a rate of 12 percent per annum from June 23, 2005, which is

the date that Gateway made its final payment to an airline. See Men Decl. at 207. 

4. Ms. Chen is Individually Liable on Gateway’s Breach of Contract

Claim. 

Taking the evidence in a light most favorable to Ms. Chen, the court finds that the

parties to the contract were Gateway and GEL – as a corporate entity – and not Ms. Chen

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The court notes that in making this assumption, it disregards Ms. Chen’s counsel’s

repeated representations that Ms. Chen was a party to the contract. While a counsel’s

unequivocal admissions to the court may indeed be binding on a client, U.S. v. Freeman, 519 F.2d

67, 70 (9th Cir. 1975), the court concludes that Ms. Chen is individually liable for reasons

independent of her counsel’s statements. 

ORDER – 10

individually.2 Nevertheless, under either rule set forth below, the court may impose

personal liability upon Ms. Chen. 

As a general rule, a corporation exists as an organization that is distinct from its

individual members. There are circumstances, however, in which the corporate form has

been so abused that, in order to further justice, a court will disregard the corporate

personality. Superior Portland Cement, Inc. v. Pacific Coast Cement Co., 205 P.2d 597

(Wash. 1949). Although the facts vary from case to case, a court may disregard the

corporate entity when it is used to perpetuate a fraud or wrong, gain an unjust advantage,

or evade an obligation. Burns v. Norwesco Marine, Inc., 535 P.2d 860, 863 (Wash. Ct.

App. 1975) (internal citations omitted). This frequently occurs under the alter ego theory,

when a court may pierce the corporate veil and impose personal liability upon an officer

when she has disregarded the corporate entity such that there is a unity of ownership and

interest, which causes the separateness of the corporation to cease to exist. Kueckelhan

v. Federal Old Line Ins. Co., 418 P.2d 443, 455 (Wash. 1966); In re Estate of Trierweiler,

486 P.2d 314, 317 (Wash. 1971).

 The undisputed facts show that Ms. Chen, the principal, sole employee, and sole

officer of GEL, conducted her business as a personal enterprise, particularly regarding

her use of the Citibank card to purchase airline tickets. Ms. Chen redirected the Citibank

billing statements to her home address and associated her home telephone number with

the account. Chen Dep. at 68, 69, 140, 141. She set up password-protected internet

access using her own email account. Id. In addition, Ms. Chen admits that she uses her

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ORDER – 11

personal assets to operate GEL. Id. at 164. GEL does not maintain business records of

its airline ticket purchases. Id. at 108. These facts demonstrate that Ms. Chen failed to

maintain a distinction between her personal affairs and her business, which warrants the

imposition of personal liability.

Alternatively personal liability may be imposed on an officer without piercing the

corporate veil under the rule enunciated in State v. Ralph Williams’ North West Chrysler

Plymouth, Inc., 553 P.2d 423, 439 (Wash. 1976). If a corporate officer participates in

wrongful conduct, or with knowledge approves of the conduct, then the officer, as well as

the corporation, is liable for the penalties. Id.; see also Johnson v. Harrigan-Peach Land

Dev. Co., 489 P.2d 923, 928 (Wash. 1971) (“Corporate officers cannot use the corporate

form to shield themselves from individual liability.”) Ralph Williams’ held that a

corporate officer could be personally liable for the deceptive practices of his automobile

dealership, where he formulated and supervised its activities. Likewise, in Grayson v.

Nordic Constr. Co., Inc., 599 P.2d 1271, 1274 (Wash. 1979), the Washington Supreme

Court held that a corporate officer was personally liable for a breach of contract claim

because he had personally participated in deceptive and misleading acts that gave rise to

the breach of contract. 

There is no question that Ms. Chen personally undertook the acts giving rise to

Gateway’s loss. Ms. Chen admits that she used Dr. Ou’s credit card to purchase tickets

for her other customers without Dr. Ou’s authorization. Chen Dep. 101, 102. Ms.

Chen’s deceptive practice has left Gateway uncompensated for the declined ticket

charges. Such wrongful conduct justifies the imposition of personal liability on Ms.

Chen.

For these reasons, the court grants Gateway’s motion on its breach of contract

claim. Ms. Chen and GEL are jointly liable in the amount of $175,757.50, including 

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ORDER – 12

prejudgment interest. 

C. Gateway Is Not Entitled to Recover on its Unjust Enrichment Claim. 

Gateway also moves for summary judgment on its unjust enrichment claim.

Gateway maintains that it has satisfied the three elements of an unjust enrichment claim:

a benefit conferred by Gateway upon GEL and Ms. Chen; an appreciation or knowledge

by GEL and Ms. Chen of the benefit; and the acceptance or retention by Ms. Chen and

GEL of the benefit under such circumstances as to make it inequitable for GEL and Chen

to retain the benefit. See Bailie Comm., Ltd. v. Trend Bus. Sys.,Inc., 810 P.2d 12, 18

(Wash. Ct. App. 1991). Under Washington law, however, a party to a valid contract is

bound by the provisions of that contract, and may not disregard the same and bring 

quasi-contractual action. See Chandler v. Wash. Toll Bridge Auth.,137 P.2d 97, 103

(Wash. 1943). The court has affirmed the validity of an implied in fact contract. 

Gateway’s claim is therefore rooted in breach of the agreement. Gateway may not

proceed against GEL and Ms. Chen by way of unjust enrichment. Moreover, as

Gateway’s counsel acknowledged during oral argument, Gateway’s seeks recovery under

either contract or unjust enrichment; recovery under both theories would constitute

duplicative damages. 

The court dismisses Gateway’s unjust enrichment claim. 

D. The Doctrine of Economic Loss Precludes Gateway’s Negligent

Misrepresentation Claim Against Ms. Chen.

Gateway asserts that Ms. Chen negligently misrepresented that she was authorized

to use Dr. Ou’s credit card to purchase airline tickets, when, in fact, she was not. 

Under the doctrine of economic loss, a plaintiff who suffers only pecuniary injury

cannot recover in tort. Instead, the claimant is limited to recovery under the law of

contract. See East River Steamship Corp. v. Transamerica Delaval, Inc., 476 U.S. 858,

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In contrast to negligent misrepresentation, the court is not aware of any Washington case

to hold that the doctrine of economic loss bars a tort claim. Cf. Alejandre v. Bull, 98 P.3d 844,

851-52 (Wash. Ct. App. 2004) (Stating in dicta that “the prohibition against fraudulent conduct

arises independently of the contract. A party to a contract cannot reasonably be held to a

standard of negotiating for the possibility that the other party will deliberately misrepresent terms

critical to the contract.”).

ORDER – 13

870 (1986). The Washington Supreme Court describes the economic loss rule as marking

“the fundamental boundary between the law of contracts, which is designed to enforce

expectations created by agreement, and the law of torts, which is designed to protect

citizens and their property by imposing a duty of reasonable care on others.” 

Berschauer/Phillips Constr. Co. v. Seattle Sch. Dist. No. 1, 881 P.2d 986, 989-90 (Wash.

1994). Particular damages may be remediable in tort as well as in contract, but if the

damages fall on the contract side of the line and are more remediable in contract, tort

recovery is precluded. Id. at 990. 

Gateway seeks to recover purely pecuniary damages from Ms. Chen and GEL. 

Indeed, Gateway simply seeks to recover the benefit of its bargain, i.e. payment for

wholesale airline tickets. The rule of economic loss limits Gateway’s recovery to

contractual remedies. The loss that Gateway seeks to recover is embodied in the terms of

the contract; Defendants’ “expected liability exposure” was to provide payment for the

tickets. See Berschauer/Phillips, 881 P.2d at 986. 

Consequently, the court denies Gateway’s summary judgment motion on negligent

misrepresentation and dismisses this claim as barred by the doctrine of economic loss. 

E. Material Issues of Fact Related to Gateway’s Fraud Claim Prevent the Court

from Granting Summary Judgment. 

Defendants GEL and Ms. Chen move for summary judgment on Gateway’s fraud

claim.3

 To prove fraud at trial, Gateway must present clear, cogent, and convincing

evidence of all elements of fraud. Stiley v. Block, 925 P.2d 194, 204 (Wash. 1996). The

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ORDER – 14

elements of fraud are: (1) a representation of an existing fact, (2) materiality of the

representation, (3) falsity of the representation, (4) knowledge of the falsity or reckless

disregard as to its truth, (5) intent to induce reliance on the representation, (6) ignorance

of the falsity, (7) reliance on the truth of the representation, (8) justifiable reliance, and

(9) resulting damages. Farrell v. Score, 411 P.2d 146, 148 (Wash. 1966). 

Material issues of fact preclude summary judgment on this claim. Gateway’s

fraud claim rests on the allegation that Ms. Chen falsely represented Dr. Ou’s Citibank

card as her own, which induced reliance by Gateway employee, Ms. Lin. Resolution of

this claim would require the court to weigh the credibility of two witnesses. Ms. Lin

testified that Ms. Chen repeatedly represented the Citibank card as her own; Ms. Chen

claims that she disclosed that the card belonged to Dr. Ou. The testimony of Ms. Chen

and Ms. Lin are in direct contradiction. Because the court cannot evaluate whether any

misrepresentation occurred without making a credibility determination, the court declines

to grant summary judgment on the fraud claim. 

F. The Court Grants Summary Judgment on the Consumer Protection Act

Claim. 

GEL and Chen move for summary judgment on Gateway’s CPA claim for

recovery of attorney’s fees. To prevail in a private CPA action for attorneys’ fees, a

plaintiff must establish five distinct elements: (1) unfair or deceptive act or practice; (2)

occurring in trade or commerce; (3) public interest impact; (4) injury to plaintiff in his or

her business or property; (5) causation. See RCW § 19.86

GEL and Ms. Chen contend that Gateway cannot meet its burden to show that the

acts complained of affect the public interest. 

Where a transaction is essentially a private dispute, see, e.g., Short v. Demopolis,

691 P.2d 163 (Wash. 1984) (attorney-client); Salois v. Mutual of Omaha Ins. Co., 581

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 P.2d 1349 (Wash. 1978) (insurer-insured); McRae v. Bolstad, 676 P.2d 496 (Wash.

1984) (realtor-property purchaser), it is more difficult to show that the public has an

interest in the subject matter of the alleged deceptive act. Ordinarily, a breach of a

private contract affecting no one but the parties to the contract is not an act or practice

affecting the public interest. See Lightfoot v. MacDonald, 544 P.2d 88 (Wash. 1976). If

it is likely, however, that additional plaintiffs have been or will be injured in exactly the

same fashion, a private dispute may be one that one that affects the public interest. 

Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 719 P.2d 531, 538 (Wash.

1986). Factors indicating public interest in a private dispute include: (1) Were the alleged

acts committed in the course of defendant's business? (2) Did defendant advertise to the

public in general? (3) Did defendant actively solicit this particular plaintiff, indicating

potential solicitation of others? (4) Did plaintiff and defendant occupy unequal bargaining

positions? Id. In this case, the only factor present is that Ms. Chen’s allegedly deceptive

act occurred in the course of her business. 

Gateway attempts to salvage its CPA claim by urging the court to construe the

events as a consumer transaction, which is more likely than a private dispute to implicate

the public interest. Gateway contends that Ms. Chen’s alleged deception is a consumer

transaction because it affected other parties, including, two other airline wholesalers, Dr.

Ou, the airlines, and had the potential to affect the travelers whose tickets were purchased

with the Citibank card. See Pls.’ Opp’n at 7-10.

Consumer transactions generally involve sales of goods. Hangman, 719 P.2d at

537. In the instant case, Ms. Chen was purchasing wholesale goods – i.e. airline tickets –

with a credit card that she was unauthorized to use. While her actions may have had the

potential to affect her customers, Gateway offers no evidence that a single customer’s

airline ticket was in fact affected by Ms. Chen’s conduct. The facts of this case do not

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implicate the public interest. Rather, Gateway’s suit seeks to vindicate its rights in a

private dispute. Ms. Chen’s behavior cannot reasonably be expected to recur because she

no longer has access to Dr. Ou’s credit card. 

While Gateway is correct in observing that the public interest impact is generally a

question of fact, summary judgment is appropriate if no reasonable juror could find that

 Ms. Chen’s actions implicate the public interest. This case involves the breach of a

contract involving the sale of wholesale goods. No reasonable juror could conclude that

it implicates the public interest. The court grants Ms. Chen and GEL’s motion to dismiss

Gateway’s CPA claim for attorney’s fees. 

IV. CONCLUSION

The court GRANTS Dr. Ou’s motion (Dkt. # 35) and dismisses all claims against

Dr. Ou. The court GRANTS in part and DENIES in part Gateway’s motion for partial

summary judgment (Dkt. # 37). The court GRANTS in part and DENIES in part the

motion for partial summary judgment from GEL and Ms. Chen (Dkt. # 42). 

In granting Gateway relief on its breach of contract claim, the court awards

damages against GEL and Ms. Chen jointly in the amount of $175,757.50, including

prejudgement interest at a rate of 12 percent per annum to run from June 23, 2005. 

The court strikes the trial date and all pretrial deadlines. The court advises the

parties to contact the clerk to schedule a status conference regarding any remaining

claims. 

Dated this 20th day of December, 2006.

A JAMES L. ROBART

United States District Judge

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