INTHE COURT OF APPEALS OF THE STATE OF WASHINGTON JUDY HA, Appellant,


### SIGNAL ELECTRIC, INC., aWashington corporation, Respondent, JUANITA MARS aka JUANITAWRIGHT aka JUANITA CARPENTER, an individual; AEG LIVE NW, LLC d/b/a SHOWBOX SODO, a Washington limited liability company; and CITY OF SEATTLE, a local governmententity, Defendants. No. 70423-1- DIVISION ONE PUBLISHED OPINION

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Appelwick, J. — Ha sued Signal Electric after shewas hit by a drunk driver inan intersection where Signal Electric was installing a new traffic light. Signal Electric was in Chapter 11 bankruptcy, so Ha sought and received permission to proceed. Ha then asked Signal Electric's bankruptcy attorney if he would accept service ofprocess. The attorney agreed and executed an acceptance of service. However, the attorney sent the summons and complaint to Signal Electric's bankruptcy financial advisor, who 

### forwarded them to the wrong insurance company and not to Signal Electric. When 

### Signal Electric failed to appear, the trial court entered an order ofdefault and defaultNo. 70423-1-1/2 judgment. Signal Electric eventually received notice and moved to vacate under CR 

### 60(b)(5) for improper service of process; CR 60(b)(1) for mistake, inadvertence, or excusable neglect; and CR 60(b)(11) for extraordinary circumstances. The trial court granted Signal Electric's motion and vacatedthe defaultjudgment. We affirm. FACTS 

### On the evening of October 28, 2010, Judy Ha attended a concert at Showbox Sodo, a venue located at 1700 1stAvenue South in Seattle. When the concertended, Ha exited Showbox Sodo and walked to the southeast corner of 1st Avenue South and 

### South Massachusetts Street. The intersection was under construction and Signal Electric, Inc. was installing a new traffic light. At the time, the crosswalks were unmarked and there were no traffic or pedestrian signals at the intersection. Ha and a group of people then walked westbound across the 1stAvenue South intersection. As 

### they crossed, Juanita Mars failed to slow and drove hertruck into the crowd, hitting Ha and several others. Ha suffered extensive injuries and incurred $197,511.22 inmedical expenses as a result. Mars admitted that she was drinking and driving when she struck Ha and others. Her blood alcohol contentwas 0.29 g/100 mLtwo hours afterthe collision. Policefound her truck littered with empty and partially empty beer cans. Mars eventually pleaded guilty to vehicularassault. On February 26, 2011, Signal Electric filed for Chapter 11 bankruptcy. Signal Electric retained J. Todd Tracy, of counsel at Crocker Law Group PLLC, as its bankruptcy attorney. Signal Electric filed an application with the bankruptcy courtNo. 70423-1-1/3 

### requesting approval of Tracy's appointment as its bankruptcy counsel. In the application, Tracyagreed to renderthefollowing services: a. To take all actions necessary to protect and preserve 

### Debtor's bankruptcy estate, including the prosecution of actions on Debtor's behalf. To undertake, in conjunction as appropriate with special 

### litigation counsel, the defense of any action commenced against Debtor, negotiations concerning litigation in which Debtoris involved, objections to claimsfiledagainst Debtorin this bankruptcy case, and the compromise or settlement ofclaims. 

### b. To prepare the necessary applications, motions, memoranda, responses, complaints, answers, orders, notices, reports, and other papers required from Debtor as debtor-in-possession in connection with administration ofthis case.

d. To provide such other legal advice or services as may be required inconnection withthe Chapter 11 case. The bankruptcycourtgrantedthe application. 

### LouiseTieman, a principal at vcfo,1 was appointed as Signal Electric's financial advisorinthe bankruptcy case. Tieman's engagementagreementspecifiedthat "vcfo is not a law firm and its services do not constitute legal advice, vcfo recommends that Client consult with legal counsel related to any and all subject matter requiring legal advice or legal representation." On February 24, 2012, Ha sued Mars; AEG Live NW LLC,d/b/a/Showbox Sodo; Signal Electric; and the City of Seattle. The complaint alleged, in part, that Signal Electric created an unsafe condition for Ha; failed to exercise ordinary care; failed to properly design, construct, and/or maintain the intersection; failed to properly ensure and maintain safety ofthe intersection; and failed "to ensure compliance with all laws,
This company name appears throughoutthe record in lowercase letters.No. 70423-1-1/4 

### rules, and regulations applicable to the construction work it was performing." Ha claimed that these actions proximately caused her injuries. She requested both economic and non-economic damages. On March 1, 2012, Ha filed an amended complaintcorrecting Mars's legal name and aliases. 

### Ha completed service of process on Mars, Showbox Sodo, and the City of Seattle in early March 2012. All three answered Ha's complaint for damages. However, Ha could notcomplete service ofprocess on Signal Electric,because Chapter 11 bankruptcy imposes an automaticstayon all collection efforts againstthe debtor. OnApril 16, 2012, Hafiled a motion with the bankruptcycourt seeking relief from the stay. The court granted Ha's motion and allowed her to proceed against Signal Electric. The court specified that "the stay is not lifted regarding collection or enforcement ofjudgmentfrom [Signal Electric's] assets, except as to the proceeds of any applicable insurance policythat might satisfy a portion of Ms. Ha's claims, and any distribution made on Ms. Ha's claims in this bankruptcy." 

### Afterobtaining relief from the bankruptcystay, Haasked Tracyif he wouldaccept service ofprocess on Signal Electric's behalf. Atthe time, Signal Electric's registered agent, Bernell Guthmiller, was inpoor health. Tracy spoke to Tieman once or twice on the phone aboutwhetherhe should accept servicefor Signal Electric, given Guthmiller's health. Tieman and Tracyagreed that he should. On July 11, 2012, Tracy executed an acceptance of service prepared by Ha's counsel. In it, Tracy claimed to be an attorney representing Signal Electric in the personal injury lawsuit. Tracy verified that "I have the authority to accept and/orwaive service of process on its behalf." Tracy further agreed "that delivery of the SummonsNo. 70423-1-1/5 

### and the Complaint to me constitutes proper service of process, and that service of process upon Signal Electric was completed on July 11, 2012." Tracy later explained, 

### however, that he "did not intend to be signing as counsel for the Defendant, Signal 

### Electric, Inc., as Crocker Law Group PLLC is a firm that specializes in bankruptcylaw, and notpersonal injury orconstruction matters." Tracy then forwarded the summons and complaintto Tieman, who sentthem on to Alaska National Insurance. Tieman believed that Alaska National Insurance was the 

### Signal Electric's insurance company at the time ofthe accident. Alaska National did not contact Tieman or anyone at Signal Electric about the lawsuit. Tieman later learned that Berkley North Pacific, not Alaska National, was Signal Electric's insurance companywhen Ha was injured. 

### On August 1, 2012, Douglas McDermott, Ha's attorney, e-mailed Tracy requesting an answer to Ha's complaint. Tracy did not respond, so Ha moved for an orderofdefaultagainstSignal Electric on August 16. On August 24, Tracy finally responded to McDermott's August 1 e-mail asking, "Didthe Insurance Company ever show up in this case. We sent them everything but
never heard anything from them, as Iamjustthe lowlybankruptcy lawyer." McDermott responded soon after, "Not to my knowledge." Tracy did not reply. McDermott then asked an associate to call Tracy. That same day, the associate leftTracy a voice mail telling him thatthey had heard nothing from the insurance company aboutthe pending motion for default. Tracy did not return the call.No. 70423-1-1/6
On August 28, the trial court granted Ha's motion for default. Upon Ha's motion, the trial court dismissed her claims against Mars, Showbox Sodo, and the City of Seattlewithoutprejudice. On January 11, 2013, the trial court entered default judgment in Ha's favor against Signal Electric for $2,199,501.86. On January 29, Ha forwarded the default judgment to Signal Electric. On February 25, Signal Electric's insurance company informed Ha that ithad received the defaultjudgment and was appointing new counsel for Signal Electric. Signal Electric entered a notice ofappearance on April 3, 2013, withoutwaiving 

### its objection to jurisdiction orimproperservice. SoonthereafterSignal Electricgathered declarations from Tracy, Tieman, and Signal Electric's president, Jerry Kittelson. On 

### April 19, Ha's counsel requested that Signal Electric delay filing its motion to vacate the defaultjudgmentuntilTieman could be deposed on May 2, 2013. 

### On May 2, Signal Electric moved to vacate default on three grounds. First, 

### Signal Electricarguedthatthe defaultjudgmentwas voidunderCR 60(b)(5) dueto lack ofpersonaljurisdiction, because Ha failed to perfect service on Signal Electric. Signal Electric asserted that it did not authorize Tracy, its bankruptcy attorney, to accept service on its behalfinthis litigation. 

### Second, Signal Electricasked the court tovacate underCR 60(b)(1) for mistake, inadvertence, surprise, and/or excusable neglect. Signal Electric asserted the defense that it did notproximatelycause Ha's injuries: 

### Signal Electric is not the cause of the plaintiff's injuries. Juanita Mars is. Ms. Mars struck Ms. Ha with her truck as the plaintiff was 

### crossing the street in a group of people. When she pleaded guilty toNo. 70423-1-1/7 vehicular assault, Ms. Mars admitted that she had been drunk while driving, had not been focusing on her driving, and failed to slow while approaching the intersection where she struck Ms. Ha. The sole cause of the plaintiff's injuries was Ms. Mars's negligence. Signal Electric should be allowed to defend againstthe plaintiff's claims. Lastly, Signal Electric argued thatthe defaultjudgmentresulted inmanifestinjustice and should bevacated underCR 60(b)(11). 

### The trial court granted Signal Electric's motion to vacate the defaultjudgment, butdid not specify on which basis it did so. Ha appeals. DISCUSSION 

### Defaultjudgments are generally disfavored inWashington. Griggs v. Averbeck Realty. Inc.. 92 Wn.2d 576, 581, 599 P.2d 1289 (1979). Courts prefer to determine


### cases on their merits rather than by default, jd. In reviewing an entry of default, the court's principal inquiry should be whether the defaultjudgment isjust and equitable. 

### kL at 581-82. Adefaultjudgment may be set aside inaccordance with CR 60(b). CR 55(c)(1). 

### Ha argues that the trial court improperly granted Signal Electric's motion to 

### vacate the defaultjudgment under CR 60(b)(5) for improper service, CR 60(b)(1) for mistake or excusable neglect, and CR 60(b)(11) for extraordinary circumstances. We 

### mayaffirmthe trial court on any basis supported by the record. Amy v. Kmart of Wash., LLC, 153Wn. App. 846, 868, 223 P.3d 1247 (2009). I. CR 60(b)(5) Service ofProcess 

### Ha argues that Tracy had express and/or implied authority to accept service of 

### process on Signal Electric's behalf. She contends that Signal Electric gave Tracy express written authority to take all actions necessary to protect and preserve theNo. 70423-1-1/8 

### bankruptcy state, including the defense of any action commenced against Signal Electric. 

### Proper service of the summons and complaint is essential to invoke personal jurisdictionover a party. AllstateIns. Co. v. Khani. 75 Wn. App. 317, 324, 877 P.2d 724 (1994). A defaultjudgmententered withoutpersonaljurisdiction isvoid. Id Whether a judgment is void is a question of law thatwe review de novo. Dobbins v. Mendoza. 88 

### Wn. App. 862, 871, 947 P.2d 1229 (1997). 

### RCW4.28.080(9) specifies that a summons shall be served on "the presidentor other head of the company or corporation, the registered agent, secretary, cashier or managing agent thereof or to the secretary, stenographer or office assistant of the 

### president or other head of the company or corporation, registered agent, secretary, cashierormanaging agent." Under agency law,the general rule isthat if an attorney is authorized to appear on a client's behalf, the attorney's acts are binding on the client. Haller v.Wallis. 89Wn.2d 539, 547, 573 P.2d 1302 (1978). 

### An attorney may not, however, surrender a substantial right of a client without special authority granted by the client. Russell v. Maas, 166 Wn. App. 885, 890, 272 P.3d 273, review denied 174 Wn.2d 1016, 281 P.3d 687 (2012). Therefore, "an 

### attorney needs the client's express authority to accept service of process."2 Id. Requiring express authority is necessary to protect clients from possibly serious consequences arising from a misunderstanding between the client and the attorney.



### 2 Ha emphasizes that Tracy verified in writing that he had authority to accept service of process on Signal Electric's behalf. However, Tracy's acceptance ofservice was not self-executing and is insufficient, by itself, to showexpress authority.

8No. 70423-1-1/9


### Graves v. P. J. Taggares Co.. 94 Wn.2d 298, 304, 616 P.2d 1223 (1980). It also
ensuresthat clientswill be consulted on all important decisions ifthey so choose, jd. 

### Here, Tracy was retained as Signal Electric's bankruptcy counsel. Kittelson 

### explained that the "scope ofretention forJ. Todd Tracy . . . was limited torepresenting Signal Electric, Inc. in the bankruptcy case." Tracy acknowledged the same in his declaration. Hewas not Signal Electric's general counsel. 

### However, Tracy was authorized to "take all actions necessary to protect and preserve Debtor's bankruptcy estate, including the prosecution of actions on Debtor's 

### behalf." Tracy had further authority to "undertake, in conjunctionas appropriate with special litigation counsel, the defense of any action commenced against Debtor." This 

### language is broad and does notconfineTracy's authorityto the bankruptcy proceeding. Rather, Tracy was expressly authorized to defend Signal Electric in "any action" and take "all actions necessaryto protect and preserve" Signal Electric's bankruptcyestate. Given this language in Tracy's retaineragreement, weconcludethat Tracy had express authorityfrom Signal Electric to acceptservice ofprocess inHa's case.3 

### Ha effected proper service of process on Signal Electric when Tracy accepted the summons and complaint. Therefore, we hold that the defaultjudgment is not void 

### under CR 60(b)(5) for lack ofpersonal jurisdiction. The trial court could not properly



### 3 Ha argues that Tracy's express authority to accept service ofprocess was demonstrated by his acceptance ofservice in othercases. However, we decline to rely on this fact as a basis to conclude that Tracy had express authority in this case. Ha also argues thatTracy's authority to undertake the compromise or settlement ofclaims necessarily included his authority to waive defenses like personal service. We do not reach this argument.No. 70423-1-1/10 

### grant Signal Electric's motion tovacate on this basis. As such, we considerwhetherCR 

### 60(b)(1)was anadequate basis to vacate the default judgment.

II. CR 60(b)(1) Mistake and Excusable Neglect 

### Ha argues that Signal Electric failed to meet the requirements for vacating a 

### defaultjudgmentunder CR60(b)(1). Apartymoving to vacate under CR60(b)(1) must show that (1) there is substantial evidence supporting a prima facie defense; (2) the failure to timely appear and answer was due to mistake, inadvertence, surprise, or excusable neglect; (3) the defendant acted withdue diligence after notice of the default 

### judgment; and (4) 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). Factors (1) and (2) are primary;factors (3) and (4)are secondary. ]cL at 704. The test is not mechanical. Id. Whether or not a default judgment should be set aside is a matterofequity, jd. 

### We review a trialcourt's decision on a motion to vacate a defaultjudgment for abuse ofdiscretion. Morin v. Burris. 160 Wn.2d 745, 753, 161 P.3d 956 (2007). The trial court "should exercise its authority liberally, as well as equitably, to the end that substantial rights be preserved andjustice between the parties be fairly andjudiciously done." White v. Holm. 73 Wn.2d 348, 351, 438 P.2d 581 (1968). Atrial courtabuses its discretion when it is exercised on untenable grounds or for untenable reasons. Morin, 160Wn.2d at 753. Abuse ofdiscretion is less likely to be found ifthe defaultjudgment is set aside. White, 73 Wn.2d at 351-52. A. Prima Facie Defense

10No. 70423-1-1/11


### Haargues that Signal Electric failed to provide substantial evidence supporting a prima facie defense. In making this determination, the trial court must examine the evidence and reasonable inferences in the light most favorable to the moving party. Johnson v. Cash Store. 116 Wn. App. 833, 841, 68 P.3d 1099 (2003). The defendant must set out concrete facts and cannot merely state allegations, jd. at 847. The trial court need only determine whether the defendant is able to demonstrate any set of circumstances that would, ifbelieved, entitle the defendant to relief. TMT Bear Creek Shopping Ctr., Inc. v. PETCO Animal Supplies, Inc., 140 Wn. App. 191, 203, 165 P.3d 1271 (2007). Signal Electric asserted the defense that Mars was the sole cause of Ha's injuries. In support of this defense, Signal Electric submitted the information charging Mars with vehicular assault, the certification of probable cause, and Mars's guilty plea. This evidence demonstrated that Mars was extremely intoxicated when she struck Ha. Her truck was littered with empty beer cans. Mars admitted in her guilty plea that, "I knew Iwas drinking to excess and was not focusing on my driving and failed to slow 

### while approaching an intersection with a large group of pedestrians and ignored the warning of a construction worker." Signal Electric does not need to conclusively establish that Mars was the sole

cause ofHa's injuries: 

### "[Wjhere the moving party is unable to show a strong or conclusive defense, but is able to properly demonstrate a defense that would, prima 

### facie at least, carry a decisive issue to the finder ofthe facts in a trial on the merits, the reasons for his failure to timely appear inthe action before 

### the defaultwill be scrutinized withgreatercare, as will the seasonability of his application and the element of potential hardship on the opposing party."

11No. 70423-1-1/12 

### Jd at201 (quotingWhite. 73Wn.2dat352-53). SignalElectricneedsto setforth onlya prima facie defense. Signal Electrichas done so based on the facts submitted. B. Mistake 

### Ha asserts that Signal Electric's failure to appear was inexcusable, because it 

### resulted from a breakdown ofinternal procedure. Ha also argues thatSignal Electric's 

### failure to appear was notjustified by mistake or excusable neglect, because Signal Electricmadea deliberate choice not to participate. 

### When a company's failure to respond to a properly served summons and complaintwas dueto a breakdown of internal officeprocedure, it is notexcusable under 

### CR 60(b)(1). TMT, 140 Wn. App. at 212-13. Neglect was inexcusable when the
summons and complaintwere mislaid whilegeneral counsel was out of town. Prestv. 

### Am. Bankers LifeAssurance Co.. 79 Wn.App. 93, 100, 900 P.2d 595 (1995). Similarly, inJohnson, failure to respond was deemed inexcusable when an employee other than general counsel accepted service of process and then neglected to forward the complaint. 116 Wn. App. at 848-49. There, the employee's failure to forward the
summons and complaintbordered on willful noncompliance. Id Ha also cites Brooks v. University City. Inc.. where the registered agent failed to forward the summons to its 

### legaldepartment. 154Wn. App. 474, 479, 225 P.3d 489 (2010). Ha's case is readily distinguishable. As we determined above, Tracy is not Signal Electric's general counsel. Nor is he an office employee. Rather, he is an 

### independent attorney retained forthe Chapter 11 bankruptcy proceeding. The same is true ofTieman, who was retained solely as a financial advisor inthe bankruptcy action.

12No. 70423-1-1/13
Their mistakes were not a breakdown of internal procedure, and so the rule of TMT does notapply here. Furthermore, it constitutes a mistake under CR 60(b)(1) where a defendant's failure to timely answer results from a misunderstanding, like here. See Showalter v. Wild Oats. 124 Wn. App. 506, 514, 101 P.3d 867 (2004). In Showalter. a manager at Wild Oats misunderstood a paralegal's request to forward the summons and complaint to an internal claims administrator, which was contrary to Wild Oats's customary business practice, jd As a result, the manager inadvertently failed to pass on the
summons and complaintto the internal claims administrator, jd at 509, 514. Similarly,

a genuine misunderstanding between an insured and his insurer as to who is responsible for answering the summons and complaint constitutes mistake and excusable neglect. Berger v. Dishman Dodge. Inc.. 50 Wn. App. 309, 312, 748 P.2d 241 (1987); see also Norton v. Brown, 99 Wn. App. 118, 124, 992 P.2d 1019, 3 P.3d 207(1999). Here, Signal Electric was in Chapter 11 bankruptcy and its registered agent was 

### in poor health. Ha asked Tracy to accept service. Tracy was uncertain whether he should do so. So, he consulted with Signal Electric's bankruptcy financial advisor, 

### Tieman. Tracy and Tieman agreed that, given the unusual circumstances, Tracy should acceptservice ofprocess on Signal Electric's behalf. Tracythen sentthe summons and complaint to Tieman. She mistakenly forwarded them on to the wrong insurance 

### company and failed to forward them to forward them to Signal Electric. As a result, 

### neither Signal Electric nor its insurer, who would have a duty to defend, had actual notice ofthe lawsuit.

13No. 70423-1-1/14


### These facts demonstrate that Signal Electric's failure to respond was not 

### deliberate or even neglectful. Rather, it resulted from Tracy's genuine misunderstanding as to whether he should accept service and Tieman's mistake in 

### forwarding the summons and complaint to the wronginsurancecompany. Ha characterizes Tracy's conduct as negligent rather than as a mistake. We 

### disagree. However, even if we regard Tracy's conduct as negligent, Ha does not prevail. Ha refers to the following rule: "Absent fraud, the actions of an attorney authorized to appearfor a clientare binding on the client at law and in equity. The 'sins ofthe lawyer' are visited upon the client." Rivers v. Wash. State Conference ofMason 

### Contractors. 145 Wn.2d 674, 679, 41 P.3d 1175 (2002) (footnotes omitted). Accordingly, she argues, "'the incompetence or neglect of a party's own attorney is not sufficient grounds for relief from ajudgmentin a civil action.'" M.A. Mortenson Co.. Inc. 

### v. Timberline SoftwareCorp.. 93 Wn. App. 819, 838, 970 P.2d 803 (1999) (quoting Lane v. Brown & Haley. 81 Wn. App. 102, 107, 912 P.2d 1040 (1996)), affd, 140Wn.2d 568, 

### 998 P.2d 305 (2000). Ha asserts that, underthis rule, Tracy's negligence is binding on Signal Electric and cannotprovide a basisto vacatethe defaultjudgment. This rule comes from the Washington Supreme Court's decision in Haller. 89 

### Wn.2d at 547. There, the client soughtrelief from a settlementthatherattorney agreed to over her objections. Jd at 540, 542. The Haller court distinguished the equities at play in consent judgments like settlements versus default judgments. Jd at 544. Finality is favored in consentjudgments, jd As such, consentjudgments may not be set aside for excusable neglect—only for fraud or mutual mistake, jd Conversely, default judgments are disfavored, because courts prefer to try cases on their merits.

14No. 70423-1-1/15 

### Griggs. 92 Wn.2d at 581. They can be set aside under CR 60(b)(1) for excusable neglect and, as the case law demonstrates, unilateral mistake. See, .e.g.. Showalter. 124Wn. App. at514. Therefore, the rule from the Haller line of cases that Ha relies on here has no 

### application to defaultjudgments. See Lane. 81 Wn. App. at 104-06. None ofthose


### cases involved a default judgment.4 Rather, with respect to defaultjudgments, "[w]hat is just and propermust be determined by the facts ofeach case, not by a hard and fast rule applicable to all situations regardless of the outcome."5 Akhavuz v. Moody. 178 Wn. App. 526, 534-35, 315 P.3d 572 (2013).



### 4Rivers. 145 Wn.2d at 677 (dismissal as a sanction forfailing to complywith a discovery order and case schedule deadlines); M.A. Mortenson. 93 Wn. App. at 826 (summary judgment); Lane. 81 Wn. App. at 105-06 (summary judgment); cf. Barr v. 

### MacGugan. 119 Wn. App. 43, 46-47, 78 P.3d 660 (2003) (mentioning, but not applying Haller rule indismissal as a sanctionfordiscovery orderviolation). 

### 5 The rule of Haller is further distinguishable here. The client in Haller was advised at all times ofthe proposed settlement and her objections were brought to the trial court's attention. 89 Wn.2d at 540-41. By contrast, in Graves, the attorney stipulated away the client's right to a jury trial—a substantial right—without the client's authorization and withoutthe client's knowledge. Graves v. P.J. Taggares Co., 25 Wn. App. 118, 119, 125, 605 P.2d 348 (1980), affd, 94 Wn.2d at 306. The Graves court held that "no client should be atthe mercy of his attorney, who, withoutthe authority or knowledge of his client stipulates away such a right directly contrary to the client's interest, as was done in the case at bench. Ifthere is substantial doubt, the client's interest should be protected." jd at 125 (emphasis added). The Graves court distinguished Haller on this basis. Jd at 122-24. As established above, the authority to accept service of process is a substantial right, like the right to a jury trial in Graves. Russell, 166 Wn. App. at 890. Though we conclude that Tracy had authority under his retainer agreement to accept service, he did so in this case without notice to Signal Electric beforehand and without giving notice to Signal Electric after doing so. Under Graves,judgments may be set aside ifthe attorney surrenders a substantial right ofthe clientwithoutthe client's knowledge. Graves, 25 Wn. App. at 125.

15No. 70423-1-1/16


### Wehold thatSignal Electric's failure to respond was occasioned by Tracy's and Tieman's mistake. Reversing the trial court's order vacating defaultin the face of this mistakewould unjustlydeny Signal Electric a trial on the merits. C. Due Diligence 

### Haargues that Signal Electric did not act with due diligence inmoving to vacate, because itwaited eight months after the order of default and three months after the defaultjudgmentto seekrelief. 

### A motion to vacate underCR 60(b)(1) mustbefiled within a reasonable time and 

### within one yearfrom the judgment. Luckett v. Boeing Co.. 98 Wn. App. 307, 310, 989 P.2d 1144 (1999). What constitutes a "reasonable time" depends on the facts and 

### circumstances ofeachcase. Jd at 312. The criticalperiod isbetweenwhen the moving party became aware ofthejudgment and when it filedthe motion to vacate, jd Three 

### months is not within a reasonabletime to respond to a defaultjudgmentfollowing notice ofentry. Gutz v. Johnson. 128Wn. App. 901,919, 117 P.3d 390 (2005). affd by Morin 

### v. Burris. 160 Wn.2d 745. Conversely, a partythatmoves to vacate withinone month of notice satisfiesthediligence requirement. Jd Here, Ha forwarded the defaultjudgmentto Signal Electric on January 29, 2013. On February 25, 2013, Signal Electric's insurance company received notice and informed Ha that itwas appointing new counsel. Untilthat point, Signal Electric had no notice ofdefault, because Tieman forwarded the summons and complaintto the wrong insurance company. Signal Electric then entered a special notice of appearance on April 3, 2013. This was just over one month after it received notice of the default judgment. From there, Signal Electric quickly collected declarations from key

16No. 70423-1-1/17
witnesses: Tracyon April 10, Tieman on April 15, and Kittelson on April 18. On April 19, Ha's counsel asked Signal Electricto delayfiling its motion to vacate untilTieman could be deposed on May 2. Then, on May 13, Signal Electric moved to vacate the default judgment. This was two and a half months after Signal Electric received notice of default. These facts demonstrate that Signal Electric acted quickly and diligently in developing the necessary factual record and filing its motion to vacate. And, Signal Electric likelywould have filed its motion to vacate earlier, exceptthat itaccommodated Ha's requestto wait until Tieman was deposed. We hold that Signal Electric acted with due diligence afterreceiving notice ofthe defaultjudgment. D. Substantial Hardship for Plaintiff Ha argues she would suffer substantial prejudice from vacating default, because it would delay resolution of her claims. However, "vacation of a default judgment inequitably obtained cannot be said to substantially prejudice the nonmoving party 

### merely because the resulting trial delays resolution on the merits." Johnson, 116 Wn. App at 842. Ha also asserts that she will have to recommence litigation against the dismissed defendants, which may require herto pay various expenses. We decline to 

### characterize the possibility of bearing some expenses as a substantial hardship. Therefore, we hold that Ha has not established that she will suffer a substantial hardship. 

### Signal Electric has met the four requirements for vacating a default judgment under CR 60(b)(1). We holdthatthe trial court did not abuse its discretion in vacating

17No. 70423-1-1/18


### the defaultjudgment based on Signal Electric's mistake and excusable neglect. We therefore affirm the trial court on this basis.6

III. Signal Electric's Motion to Strike 

### SignalElectric moves to strike the two exhibitsattached to Ha's reply brief. The exhibits are Crocker Law Group's bankruptcy court application for attorney fees and Crocker Law Group's timesheet for August 2012 through May 2013. Signal Electric points out that both exhibits were created after the trial court vacated the default 

### judgment. Ha concedes as much. Ha argues, however, that the exhibits demonstrate 

### thatTracy worked on this case. Pursuantto RAP 18.9(a), Signal Electric requests fees related to its motion to strike. Under RAP 9.11(a), we may allow additional evidence to be taken if it "would probably change the decision being reviewed." See also Wash. Fed'n of State Emps.. 

### Council 28 v. State. 99 Wn.2d 878, 884-85, 665 P.2d 1337 (1983). The two exhibits address service ofprocess under CR 60(b)(5) and are unnecessary to our review. We decline to consider them. We therefore grant Signal Electric's motion to strike. 

### However, we deny Signal Electric's request for fees under RAP 18.9(a). Ha properly requested thatwe considerthe additional exhibits under RAP 9.11. IV. Attorney Fees Signal Electric argues that it should be awarded attorney fees and costs under 

### RAP 18.9(a), because Ha's appeal is frivolous.7 An appeal is frivolous ifthere are no 6Becausewe affirm on CR 60(b)(1), we do notreach CR60(b)(11). 7Signal Electric also requests thatwe sanction Ha for violating the RAPs. Signal Electric claims that Ha's statement ofthe case "is littered with argument and unfounded allegations against both Signal Electric and its defense counsel." We decline to sanction Ha on this basis.

18No. 70423-1-1/19
debatable issues upon which reasonable minds might differ, and it is so totally devoid of merit that there is no reasonable possibility of reversal. Tiffany Family Trust Corp. v. City of Kent. 155 Wn.2d 225, 241, 119 P.3d 325 (2005). An appeal that is affirmed simply because the arguments are rejected is not frivolous, jd Ha's appeal is not frivolous, because she presents several debatable, and even meritorious, arguments. We accordinglydeny Signal Electric's requestforfees.
We affirm.

WE CONCUR: 

# |/;u<*y ^ B^<^e«

19