IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON RED LETTER MINISTRIES, an unincorporated religious association, Appellant/ Cross-Respondent,

v. CITY OF NORTH BEND, an incorporated Washington municipality, Respondent/ Cross-Appellant,
and KENNETH G. HEARING, Mayor of North Bend, Defendant. No. 71867-3-1 DIVISION ONE

UNPUBLISHED OPINION FILED: July 27, 2015 er> coo CJl

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Becker, J. — Red Letter Ministries' action to enforce an alleged oral 

### agreementwith the City ofNorth Bend was notfiled by the real party in interest
as required by CR 17. Wetherefore affirm the superiorcourt'sdismissal ofthe action on summary judgment. We also affirm the court's denial of the City's 

### requestfor attorney fees incurred in dissolving a preliminary injunction. But because the court entered judgment on the City's counterclaims against a personNo. 71867-3-1/2
who was neither named as a party nor served, we vacate that portion ofthe judgment. In 2003, Salli DeBoer registered a nonprofit charitable corporation called NetworkServices ofPuget Sound. She changed the organization's name to Red Letter Programs and Housing in2010 after entering into the oral agreement that is the subject of this appeal. In 2008, the Washington State Attorney General filed a complaint against NetworkServices of Puget Sound and DeBoer for violations of the Consumer Protection Act, chapter 19.86 RCW, and the charitable solicitations act, chapter 19.09 RCW. The lawsuit resulted in a consent decree enjoining Network 

### Services of Puget Sound, DeBoer, and their successors, assigns, officers, and 

### agents from soliciting charitable donations without being registered as a charitable organization and from misrepresenting the use of any collected

donations. In June 2010, the mayor of the City ofNorth Bend allegedly offered DeBoer and Network Services ofPuget Sound a house foruse as a homeless 

### shelter in exchange for one dollar. The mayor also offered a one dollar per year 

### ground leaseon a city parcel. The parties dispute whethertheterms ofthe agreement included a condition thatNetwork Services of PugetSound move the house to the parcel at its own expense within threeweeks, subsequentapproval of a written contract by the North BendCity Council, or certain conditions relating

to the use and condition of the house.No. 71867-3-1/3
Network Services of Puget Sound subsequently moved the house, allegedly spending over $14,000. Shortly thereafter, Network Services of Puget Sound attempted to memorialize the alleged oral agreement. According to the City, the city council authorized the mayor to sign written contracts, including a provision requiring Network Services ofPuget Sound to use the house only for its family services program. Network Services ofPuget Sound declined to sign and instead proposed to use a portion of the house and ground lease for administrative purposes associated with the family services program. It also allegedly deleted a term prohibiting use of the house for "other business 

### purposes." Appellant Red Letter Ministries, on the other hand, claims it was the City that attempted to insert new terms into the original agreement. 

### Appellant Red Letter Ministries came into being on January 1, 2012, when 

### DeBoer opened an accountwith the Department of Revenuefor an "association" with that name. DeBoer did not register Red Letter Ministries to solicit charitable
contributions. On January 12, 2012, DeBoer dissolved Red Letter Programs and 

### Housing (formerly Network Services of Puget Sound). Nothing in the dissolution filings purported to transfer any assets to Red LetterMinistries. In February 2012, the city council rejected the proposed contracts memorializing the oral agreement and voted to demolish the house. Six months later, Red Letter Ministries (hereafter "Red Letter") filed a 

### "Complaintfor Temporary Restraining Order, Preliminary Injunction, and SpecificNo. 71867-3-1/4
Performance" against the City and its mayor. The complaint alleged that the City had executed an oral contract with Red Letter for the above-mentioned house and ground lease, and that Red Letterpartly performed by moving the house at a cost ofover $14,000. Red Letter asserted claims for promissory estoppel and breach of contract. It requested all "applicable remedies including, but not limited 

### to, injunctive relief" and specific performance, attorney fees, and such "other and further reliefas the Court may deem just and appropriate." In a supporting declaration, Salli DeBoer alleged that she was the 

### president ofRed Letter, thatRed Letterwasformerly known as Network Services 

### ofPuget Sound "butchanged its name on January 1, 2012." This waslegally incorrect. Network Services of Puget Sound had previously changed its name to 

### Red Letter Programs and Housing. On January 1, 2012, Red Letter Programs 

### and Housing dissolved; it did not changeits name to Red Letter Ministries. Rather, DeBoer created Red Letter Ministries on January 12, 2012. Red Letter 

### Ministries has nolegal connection to Network Services of PugetSound or to Red Letter Programs and Housing. 

### The City answered thecomplaint and asserted several defenses, including the absence of a valid contract, the statute of frauds, and ultra vires actions by 

### the mayor. TheCity counterclaimed for promissory estoppel, negligent misrepresentation, breach ofcontract and nuisance abatement. The counterclaims alleged in partthat the house had not been made ready for 

### occupancy within a reasonable period oftime and was in violation ofnumerousNo. 71867-3-1/5 provisions ofthe city code and state law. The Cityconceded that it had approved versions of a purchase and sale agreement and ground lease in September, 2010, but alleged that Red Letter responded with a "materially different counteroffer, which would have allowed Red Letter to use the house as office space." The City alleged it rejected the counteroffer and advised Red Letterthat it must sign the contracts or the City would demolish the house. In August 2012, the City moved to dismiss the complaint under CR 

### 12(b)(6). The City argued in part that the acts ofthe mayorwere ultra vires and that any oral contractviolated the statute offrauds. The courtdenied the motion. On September 4, 2012, the superior court granted Red Letter a preliminary injunction, stating in part: 

### plaintiffhas demonstrated a clearlegal and equitable right, and the likelihood ofprevailing, on at least a portion of its claim. The North Bend municipal code authorizes the mayor, without further action 

### by the city council, to enter in to contracts under $7500for "materials, equipment, supplies and services". The oral contract here (which was clearly supported by consideration, part 

### performance and reliance in theform ofalmost $14,000 in moving costs, and which is not subject to the Statute ofFrauds for multiple 

### reasons) consisted of 3 parts: (1) the sale of a house; (2) moving the house; and (3) annual $1 lease for 5 years. While it is difficult to characterize a lease as a contract for "services", the mayor was 

### clearly authorized to sell the house to plaintiffand to have plaintiff move it: as such, not all of the mayor's actions and promises can fairly be characterized as ultra vires. While the amount of damages, the interplay between those actions which the mayor was authorized to undertake and those which were ultra vires and the enforceability and terms of the alleged lease promises are not clear, plaintiffhas established a likelihood ofprevailing on at least some of its claims and has established the likelihood of some money damages against North Bend at trial.No. 71867-3-1/6 In July 2013, the City filed the first of two motions for summaryjudgment. The Cityargued, among other things, that the oral agreement violated the statute offrauds and was ultra vires. The court granted the motion in part, dismissing Red Letter's claims for enforcement of the written contracts and promissory estoppel. The court denied summary judgment on the alleged oral agreement, stating in part: 

### genuine issues ofmaterial fact exist over apparent authority, part performance and consideration in plaintiff's effort to enforce the verbal agreement between the Mayor and Ms. DeBoer. Even ifthe Court does not view the evidence inthe light most favorable to the non-moving party (as it is required to do here), the Court cannot 

### fairly characterize plaintiff's proposed additional lease language as a repudiation or true counter-proposal ofthe oral agreement. Although North Bend officials had internal concerns that the building would be used solely for Red Letter's administrative offices, there is no evidence inthe record that Red Letter ever intended to use the building for that purpose alone and plaintiff's 

### additional proposed language was notinconsistent with the oral 

### promises between the Mayor and Ms. DeBoer. Nowhere in that oral promise did the Mayor orMs. DeBoer prohibit part use ofthe 

### property for administrative purposes, and the promise can be construed much more broadly than housing alone forhomeless families. 

### In February 2014, the City filed a second motion for summaryjudgment, 

### this time arguing thatRed Letterwas not thereal party in interest becauseit did not exist at the time of the alleged oral agreement and was not a successor to Network Services and Red Letter Programs and Housing. Red Letterimmediately moved to substitute orjoin Red Letter Programs 

### and Housing. Themotion alleged that the oral contractwas between the mayor and Network Services of Puget Sound and that Red Letter Programs andNo. 71867-3-1/7 Housing was the successor to Network Services of Puget Sound. In an attached declaration, DeBoer alleged that although Red Letter Programs and Housing dissolved on January 12, 2012, its assets were transferred to Red letter, that Red Letter "assumed" this transfer included the rights under the oral contract with the 

### City, and that the failure to name Red Letter Programs and Housing as a plaintiff in this action "was the result of an honest mistake." The City countered that Red Letter Programs and Housing could not be joinedbecause it no longer existed, that itwas statutorily time barred from participating in postdissolution legal 

### proceedings in any event, and that nothing supported Red Letter's assumption 

### that the rights under the oral agreement had been transferred to it from Red Letter Programs and Housing. 

### Thecourt requested and received supplemental briefing on the ability of Red Letter Programs and Housing to transferassets afterits dissolution. The City argued that RedLetter Programs and Housing was required by statute to transfer any assets priorto its dissolution, thatit hadfailed to do so, and that no 

### authority existed totransfer its assets postdissolution. Red Letter conceded that Red Letter Programs and Housing did not transfer its assets priortodissolution but blamed that omission on the dissolution form provided by the Secretary of State. Red Letterargued that itcould not "befaulted for not addressing that issue" when the Secretary ofState's form itselffailed to address it. Red Letter 

### alsoargued thatno statuteexpressly prohibited a postdissolution asset transfer.No. 71867-3-1/8
On April 3, 2014, the court entered orders denying Red Letter's motion to join Red Letter Programs and Housing and granting the City's second motion for summaryjudgment. The court dissolved Red Letter's preliminary injunction, dismissed all of Red Letter's claims with prejudice, and entered judgment "against Salli DeBoer individually and Red LetterMinistries on the City's counterclaims for breach ofcontract and misrepresentation." Red Letter appeals the order on summaryjudgment. On April 10, 2014, the City requested $114,282 in attorney fees it 

### allegedly incurred in dissolving the preliminary injunction. Red Letter opposed the request, arguing that fees could not be awarded "where a trial on the merits 

### to obtain specific performance would have been fruitless" ifRedLetter had not obtained the preliminary injunction. Red Letter reasoned that a trial would have been fruitless absent an injunction because Red Letter sought specific 

### performance and did not "seek orallege monetary damages against the City." OnApril 16, 2014, the court denied the City's request for fees and costs. 

### TheCity cross appeals from that order andfrom the superior court's August 2013 order denying the City's first motion for summaryjudgment.
DECISION Preliminarily, the City contends Red Letter's appeal is mootbecause Red 

### Letter only soughtspecific performance below, did notfile a supersedeas bond, and can no longerobtain specific performance because the City has demolished the house. Red Letter claims the appeal is not moot because its complaint

8No. 71867-3-1/9 included language supporting other relief, including damages. Specifically, it points to its request for"all applicable remedies including, but notlimited to, injunctive relief and "such other and furtherrelief as the Court may deem just 

### and appropriate." There is authority supporting Red Letter'sposition. See Hos Bros. Bulldozing. Inc. v. Hugh S. Ferguson Co., 8 Wn. App. 769, 773, 508 P.2d 

### 1377 (1973); Zastrow v. W.G. Platts. Inc.. 57Wn.2d 347, 350, 357 P.2d 162, 360 P.2d 354 (1960). We note, however, that Red Letter took a different position
below. 

### When the City requested attorney fees for dissolving the injunction, Red Letteropposed the motion on the ground that an injunction was necessary 

### because Red Letter requested specific performance butdid not"seek or allege 

### monetary damages against the City." Arguably, Red Letter's position below 

### estops it from taking a different position in this court. See Anfinson v. FedEx Ground Package Svs., Inc., 159 Wn. App. 35, 61, 244 P.3d 32 (2010) (judicial 

### estoppel is an equitable doctrine thatprecludes a party from asserting one 

### position in court proceedings and later seeking anadvantage by taking aclearly inconsistent position), affirmed, 174Wn.2d 851, 281 P.3d 289 (2012). TheCity, however, has not made that argument. In addition, Red Letter seeks otherrelief 

### on appealin theform ofreversal ofthejudgment againstSalli DeBoer. Accordingly, the appeal is not moot.No. 71867-3-1/10
Summary Judgment Red Letter contends the superior court erred in dismissing its claims against the City on summaryjudgment. Summaryjudgment is appropriate if there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter oflaw. CR 56(c). When reviewing an order for summary judgment, we engage in the same inquiry as the trial court. New Cingular Wireless PCS. LLC v. City of Clyde Hill Wn. App. 349 P.3d 53 (2015). Red Letterargues that summary judgment was improper because there 

### were genuine issues offact as to the validity ofthe oral contractand the application ofthe statute offrauds. The City counters, as it did below, that even ifan enforceable oral contract existed, Red Letter could not enforce itbecause Red Letter was not the real party in interest. We agree with the City. 

### Under CR 17(a), every action "shall be prosecuted in the name ofthe real 

### party in interest." Our courts have held that the real party in interest "is the 

### person who possesses the right soughtto beenforced." Spraoue v. Svsco Corp.. 97Wn. App. 169, 176n.2, 982 P.2d 1202(1999), review denied, 140 

### Wn.2d 1004 (2000). TheCity correctly points outthatRed Letterwas neither a 

### party to the contract, athird party beneficiary, nor a legal successorto oneofthe contracting parties' rights. It concludes thatRed Letter was notthe real party in interest. Authority supports that conclusion. Kim v. Moffett, 156Wn. App. 689, 698-701, 234 P.3d 279 (2010) (original owner, as party to agreement, could sue

10No. 71867-3-1/11
for breach of it, but successor owner who was not an intended beneficiary of the agreement and did not exist when itwas formed could not). Despite the City's thorough briefing on this issue both below and on appeal, and despite the superior court's focus on the issue immediately prior to granting summaryjudgment, Red Letter devotes just three conclusory sentences to the topic in its reply brief. The facts alleged by the non-moving party

... is that DeBoer accepted the [City's] offer on behalfofRLM. This inference is reasonable, because the lawsuit was brought by RLM in RLM's name, and all counterclaims were leveled at RLM. RLM is therefore the real party in interest for purposes ofsummary judgment. This conclusoryresponse is not supported byauthority ormeaningful analysis and is thus insufficient to carry Red Letter's burden on appeal. Cowiche Canyon Conservancy v. Boslev. 118 Wn.2d 801, 809, 828 P.2d 549 (1992) (arguments 

### not supported byauthority or analysis need not be considered); State v. Elliott. 114 Wn.2d 6, 15, 785 P.2d 440 (appellate court need not consider claims that
are insufficiently argued), cert, denied, 498 U.S. 838 (1990); State v. Rafav, 168 

### Wn. App. 734, 843, 285 P.3d 83 (2012) (rejecting claim due to absence of meaningful argument orauthority to supportconclusory claim), review denied, 176Wn.2d 1023 (2013), cert, denied, 134 S. Ct. 170(2013). Red Letter's response also misrepresents the record. DeBoer did not 

### accept the City's offer on behalfof Red Letter Ministries. Rather, she stated in her declaration below that she entered into the agreement on behalfof Network

11No. 71867-3-1/12
Services ofPuget Sound. The minutes of the July 20, 2010, North Bend City Council meeting and draft contracts from September 2010 all repeatedly refer to
a proposed agreement between the City and Network Services of Puget Sound, not Red Letter. This is not surprising since Red Letter did not even exist until many months after the alleged oral agreement. Red Letter's response on appeal is also notable for what itdoes not assert. Specifically, itdoes not assert that Red Letter is a legal successor to Network Services ofPuget Sound and Red Letter Programs and Housing or that it is a recipient of their transferred assets. With regard to the latter, we note that DeBoer's bald allegation belowthat the assets of Red Letter Programs and 

### Housing weretransferred to RedLetterwas tooconclusory to preclude summary 

### judgment. See Grimwood v. Univ. ofPuget Sound, Inc., 110 Wn.2d 355, 359-60, 753 P.2d 517 (1988) (unsupported conclusoryassertions are insufficient to 

### defeat summaryjudgment); Greenhalgh v. Dep't ofCorr., 160Wn. App. 706, 714, 248 P.3d 150 (2011) ("Mere allegations, argumentative assertions, 

### conclusory statements, and speculation do not raise issues ofmaterial fact that preclude a grant ofsummaryjudgment."). 

### Finally, the mere fact that the lawsuit and counterclaims name RedLetter does not support a conclusion that Red Letter is the real party in interest.

12No. 71867-3-1/13
In short, Red Letter's arguments on the real party in interest issue are insufficient and unpersuasive. Summaryjudgment was proper. Our resolution of this issue makes it unnecessary to reach the City's cross appeal from the order partially denying its first motion for summaryjudgment. We note, however, that contrary to Red Letter's assertions, the City's appeal from that order is timely and that Red Letter's failure to respond to the merits of several ofthe City's arguments, including its argument that the agreement was ultra vires, provides an additional basis to affirm the order granting summary judgment. Judgment Against Nonparty Red Letter next contends the superior court erred in entering judgment 

### against Salli DeBoerfor the City's counterclaims. Because DeBoerwas never named as a party or served, Red Letter concludes the court never obtained 

### jurisdiction over her andtherefore erred in enteringjudgment against her. The City responds that it "is entitled to collectjudgment against DeBoer individually because RLM is her sole proprietorship." We vacate the judgment against
DeBoer. We note initially that while the court entered judgment "against Salli DeBoerindividually and Red LetterMinistries on the City's counterclaimsfor breach ofcontract and misrepresentation," itappears the City did not seek, and the court did not award, any damages on the counterclaims. Nevertheless, the 

### judgment against Salli DeBoer individually must bevacated. Proper service ofa

13No. 71867-3-1/14

summons and complaint is required to acquire personal jurisdiction over a party. Allstate Ins. Co. v. Khani, 75 Wn. App. 317, 324, 877 P.2d 724 (1994). If a court 

### lacks personaljurisdiction over a party, ajudgment entered bythe court against 

### thatparty isvoid. Marlev v. Dep't ofLabor &Indus., 125Wn.2d 533, 541, 886 P.2d 189 (1994). Here, it is undisputed that the City notonly did not serve DeBoer, but it failed to name or requestjudgment against her in its 

### counterclaims. The City cites no authority supporting its assertion that naming 

### and serving Red Letterwas sufficient because Red Letter is anunincorporated 

### religious association and as such is nothing more than a sole proprietorship. The law, in fact, appears to be to thecontrary. Dolbv v. Worthy, 141 Wn. App. 813, 816-17, 173 P.3d 946 (2007) (stating that"to sue a soleproprietorship, onemust 

### sue theindividuals comprising thebusiness" and servethem personally attheir 

### usual place ofabode), review denied, 164Wn.2d 1004 (2008). The City also fails todemonstrate anyvalid basisfor applying equitable estoppel to Red Letter's claim that thejudgment against DeBoer isvoid. We vacate thejudgment against her. Cross Appeal/Attorney Fees 

### TheCity appeals the court's denial ofits requestfor $114,282 in attorney fees and costs incurred in dissolving the preliminary injunction. UnderIno Ino, Inc. v. Citv ofBellevue, 132 Wn.2d 103, 143, 937 P.2d 154, 943 P.2d 1358

14No. 71867-3-1/15 (1997), cert, denied, 522 U.S. 1077 (1998), a court has discretion to award attorney fees to a party that prevails in dissolving a wrongfully issued temporary injunction. The purpose of this rule is to discourage parties from seeking unnecessary injunctive relief prior to a trial on the merits. Cornell Pump Co. v. Citv of Bellingham. 123 Wn. App. 226, 233, 98 P.3d 84 (2004). That purpose is not served where injunctive relief is necessary to preserve the status quo 

### pending trial. Cornell, 123Wn. App. at 233. Atrial courtabuses itsdiscretion 

### only ifits decision is manifestly unreasonable or based onuntenable grounds. Holbrook v. Weyerhaeuser Co., 118 Wn.2d 306, 315, 822 P.2d 271 (1992). 

### The City contends fees should have been awarded "given DeBoer's 

### knowingly deceptive and manipulative machinations," including "misleading the Court about use ofthe house for an administrative office" and orchestrating a 

### "shell game of name changes to hervarious entities." Even assuming these statements fairly characterizeDeBoer's conduct, they do not demonstrate that 

### temporary injunctive reliefwas unnecessary topreserve the status quo orthat the court's decision was manifestly unreasonable. 

### Red Letter requests fees on appeal butfails to devote a section ofits brief 

### tothis request andfails to cite authority entitling it to fees. The request is therefore denied. RAP 18.1; Wilson Court Ltd. P'ship v. Tony Maroni's, Inc.. 134 Wn.2d 692, 710 n.4, 952 P.2d 590 (1998).

15No. 71867-3-1/16
The orders granting summaryjudgment and denying attorney fees are affirmed. Thejudgment against Salli DeBoer is vacated.



# 0 WE CONCUR: 

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