IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

ADCI CORP., f/k/a ASIA DISCOUNT

CENTER, INC., a Washington 

corporation,

Appellant,

v.

BAO NGUYEN and JANE DOE NGUYEN 

and their marital community; DEO BUI 

and JANE DOE BUI and their marital 

community; CYNTHIA HOANG and 

JOHN DOE HOANG and their marital 

community; JENNY LI and JOHN DOE LI 

and their marital community; CAFÉ PHO, 

INC., a Washington corporation, f/d/b/a 

Café Pho; CAFÉ PHO 1, LLC a

Washington Limited Liability Company, 

d/b/a Café Pho; CAFÉ PHO II, Inc., a 

Washington corporation, d/b/a Café Pho; 

HOA HOANG and JANE DOE HOANG, 

and their marital community; ADAM 

NGUYEN and JANE DOE NGUYEN and 

their marital community,

Respondents.

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No. 80658-1-I

DIVISION ONE

PUBLISHED OPINION

HAZELRIGG, J. — ADCI Corporation appeals a trial court’s order dismissing

its complaint as time-barred under CR 12(b)(6). The parties dispute whether a 

four-year statute of limitations on an action for the sale of goods applies, or a sixyear limitation on an action on an open account. Viewing the facts in the light most 

favorable to ADCI, we conclude that ADCI sufficiently pleaded “[a]n action upon 
No. 80658-1-I/2

2

an account receivable.” Where, as here, multiple statutes of limitations may 

govern, the court must apply the longer. As such the six-year statute of limitations

in RCW 4.16.040(2) applies. We reverse the order of dismissal and remand for 

further proceedings.

FACTS

ADCI is a wholesale merchant that supplies produce and other food

products to restaurants, including Café Pho, a Vietnamese restaurant with two 

locations in Seattle and Tukwila.

On June 26, 2019, ADCI sued Café Pho and its owners, Bao Nguyen, Deo 

Bui, Cynthia Hoang and Jenny Li (defendants), for “breach of written agreement 

and recovery of past due accounts receivable based on the invoices.” The 

complaint alleged that the defendants regularly “ordered and received delivery” of 

produce and food from ADCI to use in their restaurants. In response, ADCI

“extended credit to Defendants per their orders by supplying produce and food on 

account to the restaurant.” The invoices that ADCI sent to Café Pho for the orders 

provided for a 1.5 percent monthly finance charge on unpaid amounts. At the time 

of the filing of the complaint, Café Pho owed ADCI $193,663.34 in unpaid invoices.

ADCI attached to its complaint two exhibits listing the date and amount of 

all of the unpaid invoices. Exhibit A listed 413 unpaid invoices to the Seattle 

restaurant, dated from July 1, 2013 to May 28, 2015. Exhibit B listed 81 allegedly 

unpaid invoices to the Tukwila restaurant, dated from February 2, 2015 to May 29, 

2015.
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3

On August 5, 2019, the defendants filed a CR 12(b)(6) motion to dismiss

the complaint as barred by the statute of limitations. The defendants claimed that 

the transactions represented by the invoices were “contracts for sale” as defined 

by RCW 62A.1-106, and that ADCI’s complaint stated only a claim for breach of 

494 separate contracts. The defendants argued that because the breach of each 

contract took place on the date of the invoice, ACDI’s complaint was time-barred 

by the four-year statute of limitations set forth at RCW 62A.2-725.

In response, ADCI contended that the food was delivered “on credit” and 

thus the transactions were “accounts receivable” and therefore subject to the sixyear statute of limitations under RCW 4.16.040(2). According to ADCI, “the 

promise giving rise to [ADCI’s] accounts receivable was separate from the sale of 

goods” because “with each delivery Defendants made an unconditional promise to 

repay their credit balance with interest.” ADCI explained that its billing practice 

was to provide an invoice with each delivery of food, and to provide a monthly 

account statement “detailing the total amounts past due.”1

ADCI attached to its response two samples of invoices sent to Café Pho. 

Each invoice is one page and provides the invoice number, product and quantity 

ordered, and the signature of the person accepting delivery. The invoice also 

provides as follows:

A 1 1/2% monthly finance charge (annual percentage rate of 18%, 

compounded monthly, accrued from the date of invoice) will be 

 

1

In the alternative, ADCI argued, each invoice constituted a “negotiable 

instrument” governed by the six-year statute of limitations in Article 3 of the Uniform 

Commercial Code (UCC), title 62A RCW. ADCI does not pursue this claim on appeal.
No. 80658-1-I/4

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assessed on all past due invoices. The buyer hereby agrees to pay 

such finance charges on all past due invoices.

In the event that Asia Discount Center, Inc. hires an attorney to 

collect a past due amount, the buyer hereby agrees to pay all Asia 

Discount Center, Inc. actual expenses, costs and reasonable 

attorney fees for said collection. The venue of any legal action shall 

be in King County, Washington.

The trial court disagreed with ADCI’s characterization of the transactions as 

accounts receivable because ADCI did not allege the existence of an agreement 

for financing that was separate and distinct from the sales contract.

2

 Instead, the 

trial court stated, “The facts alleged by [ADCI] concern transactions in goods—

produce and food—as defined by RCW 62A.2-102 and RCW 62A.105 and sales 

as defined in RCW 62A.2-106(1).” The trial court reasoned as follows:

Under Article 2 of the Uniform Commercial Code, as adopted in 

Washington, payment, unless otherwise agreed, is due at the time 

and place at which the buyer received the goods, i.e., upon delivery. 

RCW 62A.2-310. [ADCI] alleges no facts sufficient to demonstrate a 

separate agreement on time and place for payment of the invoices 

at issue in this dispute. The last delivery was May 29, 2015. By this 

time, [ADCI] had failed to pay for all the goods at issue. The 4-year 

statute of limitations set forth in RCW 62A.2-725 governs. See

Lybecker v. United Pac[.] Ins. Co., 67 Wn.2d 11, 15 n. 3[, 406 P.2d 

945] (1965). [ADCI’s] claims are time-barred because this lawsuit 

was not initiated until June 24, 2019 (when a defendant was served) 

 

2 The trial court considered both the exhibits attached to the complaint and to 

ADCI’s response to the motion to dismiss, finding that they were incorporated by reference 

into the complaint, and thus did not constitute “matters outside the pleadings” requiring 

the trial court to treat the defendants’ motion as one for summary judgment under CR 56. 

See, e.g., U.S. v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003) (a court may consider 

documents not attached to a complaint, but which are incorporated by reference into the 

complaint because “the plaintiff refers extensively to the document or the document forms 

the basis of the plaintiff’s claim.”). Nonetheless, the trial court concluded that “[e]ven if the 

invoices are matters outside the pleadings, the result is the same under a summary 

judgment standard pursuant to CR 56” because “[b]oth parties had the opportunity to

submit the material they wanted considered and both parties agreed to consideration of 

the invoices.” Because neither party addresses the summary judgment standard on 

appeal, we consider only whether the trial court erred in dismissing the complaint pursuant 

to CR 12(b)(6).
No. 80658-1-I/5

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or June 26, 2019 (when the lawsuit was filed). This was beyond four 

years after the cause of action accrued.

. . . .

[ADCI’s] factual allegations, including the undisputed invoices, do not 

support application of the statute of limitations applicable to accounts 

receivable. The facts do not support recovery under an accounts 

receivable theory where there is no allegation of a separate, distinct 

agreement between the buyer and the seller apart from the sales 

agreements, i.e., apart from the invoices for the goods. [ADCI] relies 

exclusively on the invoices and the content of the invoices, and fails 

to raise facts consistent with the invoices that a separate, distinct 

agreement for financing existed. The invoices do not contain a 

separate, distinct agreement for financing. Because [ADCI] cannot 

show a separate, distinct agreement consistent with its allegations, 

including the invoices, this case is distinguishable from Alpacas of 

America, LLC v. Groome, 179 Wn. App. 391[, 317 P.3d 1103] (2014). 

In Alpacas, there was both a sales agreement and a promissory note. 

The suit on the promissory note could go forward under the longer 

statute of limitations applicable to negotiable instruments, even 

though suit on the sales contract was time-barred. 179 Wn. App. at 

399-400. Here there is only the invoices, which are part of the sales 

transaction. There is no separate agreement for financing and no 

promissory note or negotiable instrument.

The trial court concluded, “A plaintiff may be able to establish an accounts 

receivable theory arising from the sale of the goods, but the facts alleged and the 

invoices here fail to state a claim for relief.” Accordingly, the trial court dismissed 

ADCI’s complaint with prejudice. The trial court awarded the defendants 

$21,687.50 in attorney fees. ADCI appeals.

ANALYSIS

We review a CR 12(b)(6) dismissal de novo. Trujillo v. Nw Tr. Servs., Inc., 

183 Wn.2d 820, 830, 355 P.3d 1100 (2015). Dismissal is appropriate only if the 

trial court concludes that the plaintiff can prove no set of facts consistent with the 

complaint to justify recovery. Atchison v. Great W. Malting Co., 161 Wn.2d 372, 
No. 80658-1-I/6

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376, 166 P.3d 662 (2007). A plaintiff’s factual allegations are presumed true for 

purposes of a CR 12(b)(6) motion. Lawson v. State, 107 Wn.2d 444, 448, 730 

P.2d 1308 (1986). “A complaint survives a CR 12(b)(6) motion if any state of facts 

could exist under which the court could sustain the claim for relief. . . . Thus, a 

court may consider hypothetical facts not part of the formal record in deciding 

whether to dismiss a complaint pursuant to CR 12(b)(6).” Haberman v. Wash.

Pub. Power Supply Sys., 109 Wn.2d 107, 120, 744 P.2d 1032 (1987). “Such 

motions should be granted ‘sparingly and with care,’ and only in the unusual case 

in which the plaintiff’s allegations show on the face of the complaint an insuperable 

bar to relief.” San Juan County v. No New Gas Tax, 160 Wn.2d 141, 164, 157 

P.3d 831 (2007).

Article 2 of the UCC, codified in Washington in 1965 at chapter 62A RCW, 

governs “transactions in goods.” See RCW 62A.2-102 (“Unless the context 

otherwise requires, this Article applies to transactions in goods.”). RCW 62A.2-

725(1) establishes that a cause of “[a]ction for breach of any contract for sale must 

be commenced within four years after the cause of action has accrued.”3 A cause 

of action accrues “when the breach occurs, regardless of the aggrieved party’s 

lack of knowledge of the breach.” RCW §62A.2-725(2).

RCW 4.16.040(2), in contrast, provides that “an action upon an account 

receivable” must be brought within six years. The statute defines an account 

receivable as “any obligation for payment incurred in the ordinary course of the 

 

3 The statute defines “contract for sale” as “both a present sale of goods and a 

contract to sell goods at a future time.” RCW 62A.2-106
No. 80658-1-I/7

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claimant’s business or profession, whether arising from one or more transactions 

and whether or not earned by performance.” RCW 4.16.040(2).

“A statute of limitation, in effect, deprives a plaintiff of the opportunity to 

invoke the power of the courts in support of an otherwise valid claim.” Stenberg v. 

Pac. Power & Light Co., 104 Wn.2d 710, 714, 709 P.2d 793 (1985). Accordingly, 

when there is uncertainty as to which statute of limitation governs, a court shall 

apply the longer statute. Id. at 715.

ADCI argues that the trial court erred in applying the four-year statute of 

limitations for contracts for sale, instead of the six-year statute of limitations 

governing accounts receivable. It claims that, in doing so, the trial court ignored 

the Washington Supreme Court’s controlling opinion in Tingey v. Haisch, 159 

Wn.2d 652, 664, 152 P.3d 1020 (2007).

The defendants contend, as they did before the trial court, that the invoices 

represent individual contracts for the sale of goods. They argue that sales 

contracts are governed exclusively by Article 2 of the UCC, citing the comment to 

UCC section 2-725, which states “This Article takes sales contracts out of the 

general laws limiting the time for commencing contractual actions and selects a 

four year period as the most appropriate to modern business practice.”

Tingey addressed the issue of whether RCW 4.16.040(2) applies to an 

action to collect a balance owed by a client to an attorney for legal services 

performed on an hourly fee basis without a written fee agreement. 159 Wn.2d at 

656. In Tingey, the attorney regularly invoiced the client for legal services on an 

hourly fee basis. At some point the client stopped paying the invoices, though the 
No. 80658-1-I/8

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attorney continued to represent the client for another six months. More than three 

years later, the attorney filed a collection action. The client moved to dismiss the 

action as time-barred by RCW 4.16.080(3), which provides for a three-year statute 

of limitations for oral contracts. The attorney moved for summary judgment, 

arguing that the six-year statute of limitations in RCW 4.16.040(2) applied because 

he was suing on an account receivable incurred in the ordinary course of business. 

The trial court granted summary judgment in favor of the attorney, who ultimately 

prevailed at trial.

Division Three of this court concluded that the attorney’s unpaid legal fees 

were not an account receivable, because the term “account receivable” in RCW 

4.16.040(2) refers to an “open account” that is “‘[a]n account that is left open for 

ongoing debit and credit entries by two parties and that has a fluctuating balance 

until either party finds it convenient to settle and close.’” Tingey v. Haisch, 129 

Wn. App. 109, 117, 117 P.3d 1189 (2005), reversed by, 159 Wn.2d 652 (quoting, 

BLACK’S LAW DICTIONARY 20 (8th ed. 2004)).

In this case, Mr. Tingey’s claim for attorney fees is not an account 

receivable subject to the six-year statute of limitations stated in RCW 

4.16.040(2). When Mr. Haisch retained Mr. Tingey, the transaction 

was not like a revolving charge account, to which charges were 

added and payments subtracted. Also, Mr. Haisch did not retain Mr. 

Tingey for multiple transactions. Rather, he retained an attorney for 

the sole purpose of representing him in one transaction, the Grant 

County lawsuit. The transaction did not involve a fluctuating balance 

of debit and credit entries between two parties involving multiple 

transactions. Rather, the attorney fees involved an increasing 

balance of debit entries on one transaction.

Id.
No. 80658-1-I/9

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The Washington Supreme Court reversed. It held that, because the term 

“account receivable” is never defined in the Revised Code of Washington, it must 

be given its plain meaning as used in the accounting industry, which is “an amount 

due a business on account from a customer who has bought merchandise or 

received services.” Tingey, 159 Wn.2d at 659. The court identified four elements 

that would render a transaction an account receivable for the purposes of the sixyear statute of limitations:

Our definition identifies the parties to the contract (a customer and a 

business) and the character of the transaction (a purchase by the 

customer). It requires the business to have completed performance 

(customer has bought or received the merchandise or services). It 

specifies the monetary nature of the remaining obligation (an amount 

due). Only oral contracts exhibiting all of these characteristics garner 

the account receivable six-year limitation.

Id. at 659-60. The court concluded that “[t]he term account receivable 

encompasses the balance which Tingey seeks to collect, an amount owed to him 

for legal services performed in the ordinary course of his business.” Tingey, 159 

Wn.2d at 663 (internal quotations omitted). Five months after the opinion for

Tingey was issued, the legislature amended RCW 4.16.040(2) to clarify the 

definition of account receivable as “any obligation for payment incurred in the 

ordinary course of the claimant’s business or profession, whether arising from one 

or more transactions and whether or not earned by performance.” Laws 2007, ch. 

124, § 1.

The defendants contend that Tingey cannot control because it involved the 

provision of services, not the sale of goods. They assert that any reference to 

goods or merchandise is merely dicta. But dicta is “language not necessary to the 
No. 80658-1-I/10

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decision in a particular case.” In re Marriage of Roth, 72 Wn. App. 566, 570, 865 

P.2d 43 (1994). The sole issue in Tingey was what definition to give to “account 

receivable” for the purposes of the six-year statute of limitations in RCW 

4.16.040(2). The court determined that “[w]hen a technical term is used in its 

technical field, the term should be given its technical meaning by using a ‘technical 

rather than a general purpose dictionary.’” Tingey, 159 Wn. 2d at 658 (quoting

City of Spokane ex rel. Wastewater Mgmt. Dep’t v. Dep’t of Revenue, 145 Wn.2d 

445, 454, 38 P.3d 1010 (2002)). The opinion repeats the technical definition, 

containing the word “merchandise,” no less than eight times. Under the 

circumstances, the court’s references to “merchandise” cannot be dismissed as 

dicta.

The defendants additionally contend that, when the legislature enacted 

RCW 4.16.040(2) in 1989 to create a six-year statute of limitations for accounts 

receivable, it did so by amending RCW 4.16.080(3), creating an exception to the 

three-year statute of limitations for oral contracts. Because the legislature did not 

similarly amend Article 2 to exempt accounts receivable, the defendants argue, 

“Washington, like the rest of the country, continued to have a consistent four-year 

statute of limitations for causes of action arising from transactions in the sale of 

goods.” But we do not believe, as the defendants appear to argue, that the sixyear statute of limitations for accounts receivable can never apply when the

account receivable arises from the sale of goods.

Finally, citing Gray v. Suttell & Assocs., 123 F. Supp. 3d 1283 (2015), the 

defendants argue that, to constitute an account receivable, the buyer and seller 
No. 80658-1-I/11

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must have an agreement for financing that is separate and distinct from the sales 

contract. But Gray, which involved an action to collect the unpaid balance on a 

store-issued credit card, appears to support ADCI’s position. In ruling on a motion 

for summary judgment that the six-year statute of limitations for accounts 

receivable applied, the Gray court relied on Tingey’s definition of an account 

receivable as “‘an amount due a business on account from a customer who has 

bought merchandise or received services.’” Gray, 123 F. Supp. 3d at 1298

(quoting Tingley, 159 Wn.2d at 659). It held that “[a]n oral contract between a 

customer and a business for the purchase of merchandise or services and for 

which performance has been completed meets this definition.” Id. Additionally, it

concluded that it was “possible that the relationship at issue here could be viewed 

as an account receivable,” but that the court did not have sufficient undisputed 

evidence before it to decide the issue on summary judgment grounds. Id.

ADCI alleges that its long-term customers in the restaurant industry, 

including Café Pho, occasionally experienced financial difficulties that kept them 

from paying their invoices on time. Consequently, ADCI states, it had a policy of 

“extending credit” to these customers, and that customers sometimes took as long 

as five years “to pay off their account receivable balances.” According to ADCI, it 

sent the defendants monthly statements, and expected that the defendants would 

make payments towards these statements rather than the individual invoices. The 

defendants responded by “often sending in a check with their own accounting 

printout of the list of invoices for the month and the monthly total amount owed, but 
No. 80658-1-I/12

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these payments were normally very late.” Frequently, ADCI stated, the defendants

would send a single check to cover multiple months of statements.

4

We conclude that these facts, if true, would constitute a claim for recovery 

of an account receivable, as defined in Tingey. There is no dispute that the

defendants purchased produce and other food products, and ADCI delivered them. 

The defendants typically maintained an outstanding balance, portions of which it 

paid off with varying frequency. After a lengthy period of time passed with no 

payment, ADCI sued to recover the outstanding balance due. 

The apparently contradictory positions of the parties can be resolved fairly 

easily. A specific statute exists to address the sale of goods and a specific statute 

exists to capture open accounts. The defendants’ assertion is correct that the 

legislative enactment was intended to capture oral agreements for open accounts 

in the longer six-year statute of limitations and that this action by the legislature did 

not eliminate the four-year UCC statute of limitations. ADCI brought suit for 

amounts due on an open account, not a single transaction or merely a number of 

discrete transactions. Again, under Stenberg, when there is uncertainty as to 

which statute of limitation governs, a court shall apply the longer of the options. 

104 Wn.2d at 715. Based on the broad definition of account receivable in Tingey

 

4 ADCI alleges these facts for the first time in declarations from ADCI’s owner and 

manager attached to its opening brief. The declarations appear to have been filed in an 

unrelated lawsuit against a different restaurant, Pho To Chau, that raises similar 

allegations as the instant case. The defendants move to strike the declarations and other 

documents attached to ADCI’s opening brief, contending they were not part of the record 

on appeal and ADCI did not move to supplement the record pursuant to RAP 9.11. 

However, to survive a CR 12(b)(6) motion to dismiss, ADCI need only present a 

hypothetical set of facts upon which it could pursue relief. Because we consider the 

declarations for the limited purpose of envisioning such hypothetical facts, we deny the 

motion to strike.
No. 80658-1-I/13

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and RCW 4.16.040(2), ADCI would be entitled to the six-year statute of limitations 

in RCW 4.16.040(2), and thus the trial court erred in dismissing the complaint 

under CR 12(b)(6). We vacate the trial court’s order of dismissal, including its 

award of attorney fees, and remand for further proceedings.5

ADCI seeks attorney fees and costs incurred on appeal, pursuant to RAP 

18.1 and the attorney fee provision in each invoice. The defendants also seek 

attorney fees, citing RCW 4.84.330, which awards attorney fees to the prevailing 

party in a contract action. Because the defendants are not the prevailing party on 

appeal, they are not entitled to fees. Also, an award of fees to ADCI is premature 

because it has not yet prevailed at this stage of the litigation. See Parmelee v. 

O’Neel, 168 Wn.2d 515, 522, 229 P.3d 723 (2010) (a plaintiff “prevails” when 

“actual relief on the merits of [their] claim materially alters the legal relationship 

between the parties by modifying the defendant’s behavior in a way that directly 

benefits the plaintiff.”). If ADCI ultimately prevails on its claims on remand and the 

trial court concludes fees are appropriate, the trial court may include in its award 

attorney fees and costs for this appeal.

Reversed and remanded.

WE CONCUR:

 

5 Given our disposition of this case, we do not address ADCI’s arguments

regarding due process or whether subsequent events served to restart the limitations 

period.