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IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON DIVISION II
GOLDBERG FAMILY INVESTMENT CORPORATION, a Washington corporation, Appellant,

v. WILLIAM D. QUIGG and CAROL QUIGG, and the marital community comprised thereof; and PATRICK D. QUIGG and KATHLEEN A. QUIGG, and the marital community comprised thereof, Respondents. No. 44915 - 3 -II
UNPUBLISHED OPINION

BJORGEN, A.C.J. — This appeal arises out ofa lawsuit by Goldberg Family Investment 

### Corporation (Goldberg) to compel William and Patrick Quigg (the Quiggs) to arbitrate claims related to the failure ofa limited liability company in which Goldberg and entities in which the Quiggs were officers had ownership interests. The Quiggs opposed Goldberg' s claims, arguing that Goldberg ( 1) lacked standing, (2) was not the real party in interest, and (3) could not compel 

### them to arbitrate because theywere not parties in their individual capacities to the agreements containing the arbitration clauses.No. 44915 - 3 - II


### Before us, Goldberg appeals two trial court orders. The first order granted the Quiggs' motion to strike portions ofGoldberg' s pleadings as unauthenticated hearsay. Goldberg claims 

### that the trial court erred in granting this motion because it did not offerthe statements in the pleadings fortheirtruth, but only to showthat its claims were subject to arbitration. The second 

### order granted summaryjudgment to the Quiggs on the arbitrability ofGoldberg' s claims, denied Goldberg' s motion to compel arbitration, denied Goldberg's motion to strike the Quiggs' affirmative defenses and counterclaim, and dismissed Goldberg' s claims with prejudice. 

### Goldberg contends thatthetrial court erred in granting this order because the arbitration clauses at issue required the Quiggs to arbitrate in their individual capacities and because it had standing to pursue the claims at issue. Holding that the trial court properly granted the Quiggs' motion to strike, properly determined that the arbitration clauses did not bind the Quiggs in their individual capacities, and 

### properly determined that Goldberg lacked standing and was notthe real party in interest forthe type of claims it brought, we affirm. FACTS

In 1993 a group of investors formed a limited partnership, Grays Harbor Paper L.P. ( the 

### Partnership),to operate the Hoquiam Paper Mill and related assets. Among the entities involved in forming the Partnership were its general partner, Grays Harbor Industrial Inc. (GHI), and a number oflimited partner entities, including Goldberg, WDQ Investments Inc., and Quigg Investments Inc. William Quigg signed the limited partnership agreement as the president of both GHI and WDQ. Patrick Quigg signed the limited partnership agreement as the president of Quigg Investments Inc.

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### The limited partnership agreement contained an arbitration clause. The clause provided, in relevant part, that a]ny dispute, controversy or claim arising out of or in connection with, or relating 

### to [ the Partnership Agreement] or any breach or alleged breach hereof,upon the request ofany party involved, shall be submitted to, and settled by, arbitration in Grays Harbor County, Washington, or any othervenue agreed upon bythe parties, pursuant to American Arbitration Association, or under any other form of arbitration mutually acceptable to the parties so involved. Clerk' s Papers ( CP) at 56 -57. In 2010 the partners created Grays Harbor Paper LLC (the LLC) and merged the Partnership into it. The merger resulted in the partners receiving "generally equivalent shares of 

### ownership" in the LLC as those they had possessed in the Partnership. Through this mergerthe LLC obtained " all properties and assets, and all the rights, privileges, powers, immunities and franchises of [

the Partnership]." CP at 164. Like the limited partnership agreement,the LLC operating agreement contained an arbitration clause. The clause provided that 

### a]ny controversy, claim or dispute ofwhatever nature arising between any ofthe parties under this Agreement, the other Transaction Documents or in connection with the transactions contemplated hereunder, including those arising out of or 

### relating to the breach,termination, enforceability, scope orvalidity hereof,whether such claim existed prior to or arises on or after the date hereof (a " Dispute "), shall be resolved by mediation or, failing mediation, by binding arbitration. The agreement to mediate and arbitrate contained in this Section 16. 1 shall continue in full force and effect despite the expiration, rescission or termination of this Agreement. 

### CP at 129. Anypartyto the agreement wishing to invokethe arbitration clause could do so by serving a written "[ d]ispute [n]otice" on the party it wished to arbitrate with "setting forth the

nature ofthe [d] ispute." CP at 129. Once successfully invoked, the LLC operating agreement' s
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arbitration clause provided that the Federal Arbitration Act would govern and specified the arbitration' s procedures and substantive governing law. The LLC became insolvent in 2011 and eventually assigned its assets to a court appointed 

### receiver. Goldberg filed a notice ofappearance in the receivership matter as an interested party, but filed no claims related to this suit. 

### After the opening ofthe receivership estate, Goldberg served a dispute notice on the Quiggs under the arbitration clause, making various allegations ofmisconduct related to the LLC' s failure. The notice alleged that William Quigg,through his alter ego GHI,the 

### Partnership' s general partner, had misappropriated partnership funds in breach offiduciary duties he owed to Goldberg. The notice asserted thatthese financial improprieties continued when the 

### Partnership became an LLC byvirtue ofWilliam Quigg's role as a de facto manager ofthe LLC. The notice further alleged that Patrick Quigg took part in his brother' s " diversions offunds" and then failed to seek disgorgement ofthe ill - gotten gains in violation offiduciary duties that he owed Goldberg. CP at 15. 

### Despite receiving the notice ofdispute, the Quiggs declined to arbitrate Goldberg' s claims. Consequently, Goldberg filed a complaint to compel arbitration. 

### Beforethe Quiggs responded to Goldberg' s complaint,the receiver appeared in the

matter by filing a notice of automatic stay. The notice advised the parties that "[ w]hile [the 

### LLC] is not apartyto this litigation,the claims made herein are assets ofthe Receivership estate and the commencement ofthis action constitutes aviolation ofthe automatic stay" triggered by the creation ofthe receivership estate. CP at 157. Goldberg filed no answer and ultimately, the

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receiver assigned all ofthe LLC' s assets to its senior secured creditor; the supervising trial court approved the assignment and closed the receivership. The Quiggs answered Goldberg' s complaint on three grounds. First,the Quiggs denied 

### the substance of Goldberg' s allegations. Second,the Quiggs contended that they had not agreed to arbitrate any dispute with Goldberg. In support ofthis argument,the Quiggs noted thatthey were not parties to the Partnership or LLC operating agreements in their individual capacities. 

### Finally,the Quiggs maintained that Goldberg was not the real party in interest and lacked standing to make its claims. The Quiggs argued that had the Partnership and the LLC suffered 

### any injuries as Goldberg alleged the right to any remedy belonged to the LLC. The Quiggs contended that this right had passed into the receivership estate and the receiver had assigned it to the LLC' s senior secured creditor. The Quiggs' answer also contained a counterclaim 

### requesting declaratory reliefand dismissal with prejudice ofGoldberg's claims based on their real party in interest and standing arguments. Goldberg then moved to compel arbitration, arguing that the trial court could compel the Quiggs to arbitrate whether or not they had signed the Partnership and LLC operating agreements in their individual capacities. In support, Goldberg noted that the federal courts had compelled nonsignatories to arbitrate under numerous theories and that the courts ofthis state had seemingly adopted those theories. Ofthese theories, Goldberg contended that two required the Quiggs to arbitrate. First, Goldberg claimed that principles ofagency law required the Quiggs to arbitrate with it because they were corporate officers in entities that had signed the 

### Partnership and LLC operating agreements. Second, Goldberg argued that,because various entities that had signed the Partnership and LLC operating agreements were alter egos forthe

5No. 44915 - 3 -II Quiggs, the trial court could compel them to arbitrate in the place ofthose entities by disregarding the entities' corporate form. 

### Goldberg also moved to strike the Quiggs' standing and real party in interest defenses
and dismiss the associated counterclaim with prejudice.' Goldberg first contended that the 

### standing and real party in interest issues concerned the merits ofits rightto recover, and therefore the arbitrator, rather than the trial court, needed to resolve them. Goldberg then argued that, underthe Uniform Limited Partnership Act, chapter 25. 05 RCW, and the Washington 

### Limited Liability CompanyAct, chapter 25. 15 RCW, general partners and LLC managers owe 

### fiduciary duties to limited partners and LLC members as well as to the business entity itself. Goldberg maintained that it alleged a breach ofa fiduciary duty owed to it,not to the Partnership orthe LLC, and that it was the proper party to seek a remedy for this breach. The Quiggs responded with three motions oftheir own, the first ofwhich was a motion to strike certain factual allegations from Goldberg' s motions to compel arbitration and to strike the Quiggs' affirmative defenses and counterclaim. These factual allegations concerned the existence offinancial improprieties atthe Partnership and LLC, the Quiggs' managerial control 

### overthe LLC, the Quiggs' ownership ofentities thatwere members ofthe Partnership and the LLC, and the Quiggs' breach offiduciary duties. The Quiggs' motion to strike contended that 

### Goldberg based these allegations on the dispute notice and its attached documents and that these



### 1 Plaintiffs may use a motion to strike made under CR 12(f) to dismiss defenses with prejudice in the same way that defendants may use a motion made under CR 12(b)( 6) to dismiss a plaintiff's claims with prejudice. 3A LEWIS H. ORLAND & KARL B. TEGLAND, WASHINGTON PRACTICE: RULES PRACTICE at 286 cmts. ( 6th ed. 2013). 6No. 44915 - 3 -II
documents were not based on personal knowledge as required by ER 602, but instead were 

### hearsay under ER 801 and ER 802 and were not authenticated as required by ER 901. The Quiggs also moved (1) for summaryjudgment on Goldberg' s motion to compel them 

### to arbitrate and (2) for summaryjudgment dismissing Goldberg's claims with prejudice based on the counterclaim filed in their original answer. Each ofthese motions for summaryjudgment incorporated the Quiggs' motion to strike and argued that Goldberg could not create a material issue offact with the dispute notice or its attached documents because these documents consisted ofunauthenticated hearsay. 

### Goldberg' s consolidated reply briefaddressed, among other matters, the Quiggs' motion 

### to strike. Goldberg argued thatthe motion wasmeritless because it had not offered the factual matters asserted in its motion to compel arbitration or its motion to strike the Quiggs' defenses 

### and counterclaim fortheirtruth, but onlyto alertthe trial court ofthe substance ofthe dispute with the Quiggs. The trial court resolved these various motions with two orders. The first order granted the Quiggs' motion to strike and stated thatthe court would not consider the factual allegations 

### the Quiggs objected to for purposes ofresolving the parties' other motions. The second order (1) 

### denied Goldberg' s motions to compel arbitration and to dismiss the Quiggs' affirmative defenses and counterclaim because Goldberg lacked standing and was not the real party in interest and (2) 

### granted the Quiggs summaryjudgment because the arbitration clauses did not applyto them in their individual capacities and Goldberg was notthe real party in interest and lacked standing. Based on the grant ofthe Quiggs' motion for summaryjudgment,the trial court dismissed Goldberg' s claims with prejudice.No. 44915 - 3 -II Goldberg now appeals these two trial court orders. ANALYSIS We review de novo Goldberg' s appeal ofthe trial court' s denial of its motion to compel arbitration,the grant ofthe Quiggs' motion for summaryjudgment, and the grant ofthe Quiggs'

motion to strike. Gandee v. LDL Freedom Enter., Inc., 176 Wn.2d 598, 602, 293 P. 3d 1197 2013) ( motion to compel); Afoa v. Port ofSeattle, 176 Wn.2d 460, 466, 296 P.3d 800 (2013) summary judgment); 

### Southwickv. Seattle Police Officer John Doe Nos. 1 -5, 145 Wn.App. 292, 297, 186 P. 3d 1089 (2008) (motion to strike in conjunction with a motion for summary judgment). 

### Summaryjudgment is appropriate where the nonmoving party fails to rebutthe 

### moving party' s initial showing that no material issue offact exists, andthe moving party is
entitled to judgment as a matter of law. Young v. Key Pharm., Inc., 112 Wn.2d 216, 225, 770 P.2d 182 ( 1989). A defendant moving for summaryjudgment may demonstrate the absence ofa 

### material issue offact by showing the lack ofcompetent evidence to support a plaintiff's claims. Young, 112 Wn.2d at 225 n.l. I. ARBITRABILITY 

### Goldberg contends that the trial court erred in denying its motion to compel arbitration 

### and in granting the Quiggs' related motion for summaryjudgment, in which the Quiggs argued 1) that the arbitration agreements did not bind the Quiggs in their individual capacities and (2) 

### that Goldberg lacked standing and was not the real party in interest. Goldberg argues thatthe arbitrator, not the trial court, must decide whether it was the proper party to raise its claims and whether the arbitration clauses bound the Quiggs in their individual capacities, since these issues went to the merits, not the arbitrability, ofits claims. The Quiggs respond thatthe trial court
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needed to resolve the standing and real party in interest issues and the applicability ofthe arbitration clauses to them personally before compelling arbitration. We hold thatthe trial court properly determined the arbitration clauses did not apply to the Quiggs in their individual capacities and, therefore, affirm the order denying Goldberg' s 

### motion to compel arbitration and granting the Quiggs' motion for summaryjudgment.2 We also affirm the trial court' s order granting the Quiggs' motion to strike. A. Quiggs' Motion to Strike Before turning to the motion to compel, we address Goldberg' s appeal ofthe trial court' s 

### order grantingthe Quiggs' motion to strike, since our resolution ofthis issue sets the record we review on appeal. Goldberg contends the trial court should not have stricken the factual assertions at issue because it did not offer them to prove the truth ofthe matters asserted, but instead to show that its claims fell within the scope ofthe arbitration clauses. The Quiggs 

### contend that,to the extentthat Goldberg offered the stricken material as evidence to support its 

### theories for compelling them, as nonsignatories, to arbitrate,the trial court properly declined to consider the assertions. We agree with the Quiggs on this issue.



### 2 The trial court based its denial of Goldberg's motion to compel arbitration on its determination 

### that Goldberg lacked standing and was notthe real party in interest. Becausethetrial court properly determined the Quiggs were not parties to the arbitration clauses, its denial ofthe motion to compel arbitration was proper; and, as noted, we affirm the trial court' s denial of 

### Goldberg' s motion to compel arbitration on that basis. Gross v. City ofLynnwood,90 Wn.2d 395, 401, 583 P. 2d 1197 ( 1978) ( "we will sustain the trial court' sjudgment upon any theory established by the pleadings and supported by the proof. ").We therefore need not address the 

### parties' arguments about standing and the real party in interest defense in this context. We do, however, discuss the parties' standing and real party in interest arguments belowwhen addressing the Quiggs' counterclaim and the dismissal ofGoldberg' s claims. 9No. 44915 - 3 -II 

### CR 12(f)allows aparty to move to strike "from any pleading any insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." Goldberg argues that it did not offer the statements at issue for their truth and that they are therefore not hearsay under ER 801( c). 

### However,to the extent that Goldberg did not offerthe factual allegations at issue for 

### theirtruth,they do not make it more or less likelythat the Quiggs owed or breached fiduciary duties, improperly benefitted from their positions, or owned the entities signing the operating agreements. In that event, the allegations would be irrelevant under ER 401 and immaterial

under CR 12(f).On the other hand, ifGoldberg offered the factual allegations in the dispute
notice and its attached documents for their truth, they were inadmissible hearsay. ER 801( a), ( c); 

### ER 802. Goldberg has not argued that any exception to the bar against hearsay testimony applies and the record before us is insufficient to establish any. Inadmissible evidence is irrelevant to summaryjudgment proceedings. Lynn v. Labor Ready, Inc., 136 Wn.App. 295, 306, 151 P.3d 201 ( 2006). Thus, the trial court did not err in striking the factual allegations in Goldberg' s motion to compel arbitration or its motion to strike the Quiggs' affirmative defenses as irrelevant. B. Quiggs' Motion for Summary Judgment and Goldberg' s Motion to Compel Arbitration

An agreement to arbitrate a dispute "[ is] valid, irrevocable, and enforceable," subject to
certain exceptions not relevant to this appeal. 9 U.S. C. § 2; accord RCW 7. 04A.060( 1). Arbitration is, however, a creation of contract, and no party to an arbitration agreement may compel another partyto arbitrate a matterthat it did not agree to submit to an arbitrator. Howsam v. Dean Witter Reynolds, Inc..,537 U.S. 79, 83, 123 S. Ct. 588, 154 L. Ed. 2d 491 2002) ( quoting Steelworkers v. Warrior & GulfNavigational Co., 363 U.S. 574, 582, 80 S. Ct.

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1347, 4 L. Ed. 2d 1409 ( 1960)); accord Saleemi v. Doctor' s Assocs., Inc., 176 Wn.2d 368, 376- 78, 292 P. 3d 108 ( 2013). Accordingly, before compelling arbitration, the trial court must decide the "` question of arbitrability, "' 

### meaning whether or not "the parties have submitted a particular dispute to
arbitration." Howsam, 537 U.S. at 83 -84 ( quoting AT & T Techs., Inc. v. Commc' ns Workers, 475 U.S. 643, 649, 106 S. Ct. 1415, 89 L. Ed. 2d 648 ( 1986)); accord Saleemi, 176 Wn.2d at 376. The trial court determines whetherthe parties have agreed to arbitrate a dispute by looking to whether a valid agreement to arbitrate exists between the parties and whetherthe subject matter ofthe dispute arguably falls within the class ofdisputes subject to arbitration. Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218, 105 S. Ct. 1238, 84 L. Ed. 2d 158 ( 1985); see In re Marriage ofPascale, 173 Wn.App. 836, 842, 295 P. 3d 805 ( 2013). Ifthe trial court determines that an arbitration agreement creates a duty to arbitrate, it must order the parties to do so, and the
arbitrator, not the trial court, must resolve the merits ofthe parties' claims. 9 U.S. C. § 4; RCW 7.04A.070; AT &

TTechs., 475 U.S. at 649 - 50; Pascale, 173 Wn.App. at 842 - 43 ( quoting Hanford Guards Union ofAm., Local 21 ofIntl Guards Union ofAm. v. Gen. Elec. Co., 57 Wn.2d 491, 498, 358 P. 3d 307 ( 1961)). 

### A party may consentto arbitration without signing an arbitration clause,just as aparty may consentto the formation ofa contract without signing awritten document. Fisser v. Intl Bank, 282 F.2d 231, 233 ( 2d Cir. 1960), overruled on other grounds by Kirno Hill Corp. v. Holt, 618 F.2d 982 (2d Cir. 1980). Therefore, whether an arbitration agreement binds a nonsignatory is a question ofwhether the party has agreed to arbitrate a matter. As with any determination about the validity and applicability ofan arbitration clause, the trial court, notthe arbitrator, must
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### decide whether an agreement binds a nonsignatory. Howsam, 537 U.S. at 83 -84 (citing First 

### Options ofChicago v. Kaplan, 514 U.S. 938, 943 -46, 115 S. Ct. 1920, 131 L. Ed.2d 985 1995)); World Rentals & Sales, LLC v. Volvo Constr. Equip. Rents, Inc., 517 F.3d 1240, 1244 1 lth Cir. 2008); Smith /

Enron Cogeneration Ltd.P ' ship, Inc. v. Smith Cogeneration Intl, 198 F. 3d 88, 95 ( 2d Cir. 1999); accord Saleemi, 176 Wn.2d at 376. The question ofarbitrability, therefore, was properly before the trial court to decide. 

### Turning to the merits ofthe issue, the Quiggs signed the Partnership agreement in their capacities as presidents ofpartner corporations and the LLC operating agreement in their capacities as presidents of member corporations. As such,the parties bound to arbitrate by the Quiggs' signatures on these agreements are the Quiggs' corporate principals, not the Quiggs individually. Union Mach. & 

### Supply Co. v. Taylor - Morrison Logging Co., 143 Wash. 154, 157- 62, 254 P.2d 1094 ( 1927) ( collecting cases).

However, the federal courts have held that, under ' common law principles of contract
and agency law, "' a nonsignatory may consent to arbitrate a dispute " under ... five distinct theories." World Rentals, 517 F.3d at 1244 (quoting Employers Ins. OfWausau v. Bright Metal Specialties, 251 F.3d 1316, 1322 ( 1 lth Cir. 2001)). These theories include incorporation by 

### reference, assumption, agency, corporate disregard, and estoppel. Thomson -CSF,S.A. v.Am. Arbitration Ass 'n, 64 F.3d 773, 776 - 80 ( 2d Cir. 1995). The Washington Supreme Court and another division ofour court have approved thesetheories for binding nonsignatories to an
arbitration clause. E.g., Satomi Owners Ass 'n v. Satomi, LLC, 167 Wn.2d 781, 810 -11 & n.22, 225 P.3d 213 ( 2009); Woodall v. Avalon Care Ctr., 

### 155 Wn.App. 919, 923 -24, 231 P.3d 1252

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2010). 

### Goldberg argues thatthree ofthese theories apply here: estoppel, corporate disregard, and agency. We consider each in turn. 

### Goldberg first contends thatthe Quiggs must arbitrate due to principles ofestoppel. Where nonsignatories have derived benefits from an agreement, atrial court may findthat they 

### are bound by arbitration clauses inthe agreementthrough estoppel. Smith / Enron, 198 F.3d at 97 - 98. The trial court properly struckthe evidence that Goldberg relied on to showthe Quiggs 

### benefitted fromthe operating agreements. Therefore, no material issue offact existed, and the 

### trial court properly found thatthe Quiggs were not required to arbitrate in their individual capacities based on estoppel. Young, 112 Wn.2d at 225 n.1. 

### Goldberg next alleges that the arbitration clauses bindthe Quiggs because they signed the limited Partnership and LLC operating agreements through their alterego corporations. Atrial 

### court may disregard the business entity and find that an arbitration clause binds nonsignatory owners. Thomson -

CSF, 64 F.3d at 777 -

78. A successful alter ego claim allows such disregard. Columbia Asset Recovery Grp. v. Kelly, 177 Wn.App. 475, 486, 312 P.3d 687 (2013) ( quoting Grayson v. Nordic Constr. Co., 92 Wn.2d 548, 553, 599 P.2d 1271 ( 1979)). However, to 

### establish that any entity was an alter ego forthe Quiggs, Goldberg neededto showthat William

or Patrick "` so dominate[ d] and control[ led] "' the entity that the court should treat the entity' s signature as either William' s or Patrick' s signature. Standard Fire Ins. Co. v. Blakeslee, 54 Wn. App. 1, 5, 771 P.2d 1172 ( 1989) ( 

### quoting Pohlman Inv. Co. v. Virginia City Gold Mining Co., 184 Wash. 273, 283, 51 P. 2d 363 ( 1935)). The trial court struck the evidence Goldberg relied on 

### to make this showing. Therefore,no material issue offact existed, and summaryjudgment for

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the Quiggs was appropriate on the alter ego theory ofcompelling arbitration. Young, 112 Wn.2d at 225 n.1. Finally, Goldberg argues that agencyprinciples bind the Quiggs to the arbitration clauses. Atrial court may find that arbitration clauses bind nonsignatories based on traditional agency principles. Thomson -

CSF, 64 F.3d at 777. Evidence remaining in the record established that the Quiggs acted as the officers ofvarious entities when they signed the limited Partnership and LLC 

### operating agreements. The Quiggs, therefore, acted as agents forthose entities. See Youngs v. Peacehealth, 179 Wn.2d 645, 670, 316 P.3d 1035 ( 2014). No evidence, though, established the converse: that the entities acted as agents forthe Quiggs who acted as principals. Agency law 

### does not allow a partyto compel an agentto arbitrate in the place ofhis or her principal. Flinkv. Carlson, 856 F.2d 44, 46 ( 8th Cir. 1988) ( "[ s] igning an arbitration agreement as agent for a disclosed principal is not sufficient to bind the agent to arbitrate claims against him personally. "); In re Matter ofArbitration Between Keystone Shipping Co. & Texport Oil Co., 782 F. Supp. 28, 32 ( S. D.N.Y. 1992) ( "[ s] igning an arbitration agreement as an agent for a disclosed principal is not sufficient to render an agent a party to the arbitration clause. "). No material issue offact existed and the trial court properly granted the Quiggs summaryjudgment on this theory of compelling arbitration. As noted, before compelling arbitration,the trial court must determine that a dispute subject to arbitration exists. Dean Witter Reynolds, 470 U.S. at 218; see Saleemi, 176 Wn.2d at 376. As part ofthis inquiry,the trial court must determine whether a nonsignatory to an arbitration clause has agreed to arbitrate a dispute with a signatory. See Howsam, 537 U.S. at 83 -84. As shown,the Quiggs did not agree to arbitrate any dispute with Goldberg in their

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individual capacities, and none ofthe asserted common law doctrines impose that duty on the Quiggs. Therefore, the trial court did not err by granting the Quiggs' motion for summary 

### judgment or by denying Goldberg's motion to compel arbitration. See Howsam, 537 U.S. at 83- 84; Saleemi, 176 Wn.2d at 376. II. STANDING/REAL PARTY IN INTEREST 

### Goldberg next contends thatthe trial court erred in denying Goldberg's motion to strike the Quiggs' defenses and counterclaim and in dismissing its claims based on the Quiggs' 

### standing and real party in interest arguments. While agreeing that any claims the LLC had against the Quiggs were assigned to the receiver and now belong to the LLC' s senior creditor, 

### Goldberg contends that its claims did notbelong to the LLC. Instead, Goldberg maintainsthat it is seeking redress forthe loss ofits investment in the Partnership and LLC caused bythe Quiggs' breach offiduciary duties owed to it and,therefore, it is the proper partyto raise its own claims. The Quiggs maintain that Goldberg seeks to recast injuries to the Partnership andthe LLC as 

### injuries to itself,meaning that Goldberg is not the proper party to seek redress. Thus,we address 

### whether Goldberg had any claims that it could pursue directly, ratherthan derivatively, forthe LLC. We hold that it did not. Because Goldberg pursued these claims directly ratherthan 

### derivatively, it lacked standing and was not the real party in interest. Forthat reason, we affirm the grant ofsummaryjudgment to the Quiggs dismissing Goldberg' s claims. 

### The doctrine ofstanding prevents " a plaintifffrom asserting another's legal rights." Trinity Universal Ins. Co. ofKan. v. Ohio Cas. Ins. Co., 176 Wn.App. 185, 199, 312 P.3d 976 2013), review denied, 179 Wn.2d 1010 ( 2014). The doctrine performs this task by requiring a plaintiff to show, among other things, " a personal injury fairlytraceable to the challenged

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conduct and likely to be redressed by the requested relief." High Tide Seafoods v. State, 106 Wn.2d 695, 702, 725 P.2d 411 ( 1986). 

### The real party in interest doctrine "protect[s] the defendant against a subsequent action by the party actually entitled to recover, and ... 

### insure[s] generallythat thejudgment will have its

proper effect as res judicata." 

### Rinke v.Johns - Manville Corp., 47 Wn.App. 222, 227, 734 P.2d 533 ( 1987) (

### citing FED. R.Civ.P. 17(a), Advisory Committee Note, reprinted in 39 F.R.D. 84, 85 ( 1966)). Washington' s court rules codify the doctrine in CR 17(a), which requires that e] very action shall be prosecuted in the name ofthe real party in interest." Subject to certain
exceptions, "

### the real party in interest is `the person who, ifsuccessful,will be entitled to the fruits ofthe action. "'3 Nw. Indep. Forest Mfrs. v. Dep' t ofLabor & Indus., 78 Wn.App. 707, 716, 899 P.2d 6 ( 1995). (quoting 3A LEWIS H. ORLAND & KARL B. TEGLAND, WASHINGTON PRACTICE: RULES PRACTICE, at 420 (4th ed. 1992)). 

### In a limited partnership,the general partner owes fiduciary duties to both the partnership entity itself and its limited partners. RCW 25. 10. 441( 1). Similarly, LLC managers owe the LLC 

### entity itselfand its members fiduciary duties analogoustothose owed in apartnership. Bishop of Victoria Corp. Sole v. Corporate Bus. Park,LLC, 138 Wn.App. 443, 456, 158 P.3d 1183 (2007) citing John Morey Maurice, Operational Overview ofthe Washington Limited Liability Company Act, 30 GONZ. L. REV. 183, 200 ( 1994/95)). One ofthese duties is the duty ofloyalty, 

### which requires the fiduciaryto avoid "secretprofits, self- dealing, and conflicts ofinterest."

3 A derivative suit is such an exception because the equity holder sues on behalfofthe business entity in order to redress wrongs done to it;the recovery from such a suit goes to the entity, not 

### the equity holder. LaHue v. Keystone Inv. Co., 6 Wn.App. 765, 777, 496 P.2d 343 ( 1972). 16No. 44915 - 3 -II

Horne v. Aune, 130 Wn.App. 183, 200, 121 P. 3d 1227 (2005); RCW 25. 10.441( 2); see RCW 25. 15. 040( 1). However,the factthat the Quiggs may have owed fiduciary duties to Goldberg as an LLC 

### member, as well as to the Partnership and the LLC, does not mean that Goldberg is the proper 

### parryto raise the claims it seeks to arbitrate. The plain terms ofthe Uniform Limited Partnership Act define when a partner may sue another partner directly for a breach ofduty owed to the partner. RCW 25. 10.701(2) allows such suits only where the partner alleges an injury "that is 

### not solelythe result ofan injury suffered orthreatened to be suffered by the limited partnership." Where the partner does not allege such an injury,the rightto the suit belongs to the limited 

### partnership itself,and the partner must sue derivatively in its name. RCW 25. 10.701; see RCW 25. 10. 706 -.

721. The Washington Limited Liability Company Act also distinguishes between direct and derivative suits, although it does not specify how to distinguish the two. See RCW 25. 15.370- 385. The act has numerous such omissions, and the courts ofthis state have filled the gaps in the act while the legislature and the Washington State Bar Association consider how to redraft it. Sherron Assocs. Loan Fund V ( Mars Hotel) LLC v. Saucier, 157 Wn. App. 357, 361 -62, 237 P. 3d 338 ( 2010). We hold the same test used for distinguishing direct and derivative actions in 

### the limited partnership context also applies to suits by LLC members fortwo reasons. First, in this state the test for limited partnerships is the one generally used, outside ofthe 

### partnership context,to distinguish between direct and derivative actions. As noted,the legislature specifically prescribed the test for limited partnerships. RCW 25. 10. 701( 2). The 

### courts ofthis state applythe same testwhen distinguishing between direct and derivative actions
17No. 44915 - 3 -II by corporate shareholders. Sabey v. Howard Johnson & Co., 101 Wn.App. 575, 584 - 85, 5 P.3d 730 (2000) (

### discussing when corporate shareholders may make direct, ratherthan derivative, claims). Further, the Delaware courts use this same test to determine whether a stockholder' s
claim is derivative or direct. Tooley v. Donaldson, Lufkin & Jenrette, Inc., 845 A.2d 1031 2004). Because the Delaware courts have significant experience with the law ofbusiness 

### entities,the courts ofthis state often lookto Delaware decisions as persuasive authority. Eg.,In re F5Networks, Inc., Derivative Litig., 166 Wn.2d 229, 239 - 40, 207 P.3d 433 (2009). 

### Second, compelling reasonsjustify applying the general rulejust noted to identify when an LLC member may bring a direct rather than a derivative suit. A derivative suit ensures that 

### the business entity suffering the injury is made whole and that all its equity holders share in this. See Moore v. Los Lugos Gold Mines, 172 Wash. 570, 598, 21 P.2d 253 ( 1933) ( citing 14 C. J., § 1457 at 937). 

### Particularly apposite here, a derivative suit also prevents equity holders from 

### recovering in a mannerupsetting the creditor priority scheme whenthe business entity has become insolvent. See LaHue v. Keystone Inv. Co., 6 Wn.App. 765, 780 - 81, 496 P.2d 343 1972); 

### In re Sunrise Secs. Litig.,916 F.2d 874, 886 - 87 (3d Cir. 1990). 

### A fair reading ofGoldberg's complaint indicates that it seeks redress for an injury arising 

### solely from injuries inflicted onthe Partnership and the LLC. Goldberg alleges thatthe Quiggs essentially looted the Partnership and the LLC ofvalue and thatthis eventually rendered the LLC insolvent,not that the Quiggs stole directly from Goldberg. The injury that Goldberg complains 

### of,misappropriation ofpartnership and LLC funds, is an injuryto the Partnership and the LLC, notto Goldberg; Goldberg' s injurywas derivative ofthe injuryto the Partnership and the LLC. 

### Thus, Goldberg lacks the type ofpersonal injury sufficientto confer standing for a direct suit and
18No. 44915 - 3 -II

is not the party entitled to the ' fruits ofthe action "; the LLC is. Nw. Indep. Forest Mfrs.,78 Wn. App. at 716 ( quoting 3A LEWIS H. ORLAND & KARL B. TEGLAND, WASHINGTON PRACTICE: RULES PRACTICE, at 420 (4th ed. 1992)). Because Goldberg sought direct, ratherthan derivative, 

### recovery,the trial court did not err in granting the Quiggs summaryjudgment and dismissing Goldberg' s claims. 

### Goldberg argues thatthe legislature authorized a direct action whenever a limited partner brings suit against another partner for fiduciary breaches or when an LLC member sues an LLC manager for such a breach. In support, Goldberg notes that the legislature defined the standard of conduct partners owe each other in a limited partnership orthat managers owe members ofan 

### LLC separately from creating derivative rights ofaction. See RCW 25. 10.441 ( standard of
conduct by a partner in a limited partnership); RCW 25. 15. 155 ( standard of conduct for an LLC
manager); RCW 25. 10. 706 ( derivative right of action in a limited partnership); RCW 25. 15. 370 derivative right ofaction in an LLC). RCW 25. 10.441 does prescribe the duties the partners in a 

### limited partnership owe each other. But RCW 25. 10.701 and RCW 25. 10.706 define whether a 

### partner maypursue a claim for a breach ofthe duties owed in RCW 25.10.441 directly or derivatively. The legislature explicitly made the type ofclaims Goldberg asserts here derivative 

### in the partnership context and, as we discussed above, we hold the same rule applies in the LLC

context. 

### Goldberg also cites our opinion in Bishop ofVictoria, 138 Wn.App. at 443, and the Western District ofWashington' s opinion in Finlay v. Takisaki, No. C05- 1118JLR,2006 WL 1169794 (W.D. Wash. April 28, 2006), 

### claiming that they also support its reading that suits by

19No. 44915 - 3 -II partners or LLC members against other partners or LLC managers are always direct. We disagree. 

### Bishop ofVictoria involved a suit by one member ofan LLC against another member. 

### Our opinion in Bishop ofVictoria concerned the existence offiduciary duties in a member managed LLC. Bishop ofVictoria, 138 Wn.App. at455 -60. Because we found no breach of 

### any duty,we never analyzed whetherthe plaintiffneeded to press a direct or derivative action to remedy the breach. Bishop ofVictoria, 138 Wn.App. at 454 - 60. Bishop ofVictoria,therefore, offers no precedential authority for Goldberg' s proposition that the relationship between the plaintiffand the defendant defines the type ofsuit the plaintiffmust pursue to recover for breaches offiduciary duties. Cazzanigi v. Gen. Elec. Credit Corp., 132 Wn.2d 433, 443, 938 P.2d 819 ( 1997). 

### Finlay involved a suit by amember ofan LLC against athird party arising from damages to the LLC. The Finlay court dismissed the suit based on standing grounds consistent with the principles we discussed above. The trial court reasoned that Finlay suffered no injury aside from the one he suffered derivatively from injury to the LLC. Finlay, 2006 WL 1169794 at * 3. Given 

### this lack ofa direct personal injury,the trial court reasoned that Finlay lacked standing to pursue direct claims against the third party. Finlay, 2006 WL 1169794 at * 3. Based on this reasoning, 

### the Finlay court noted thatthe LLC itselfwas the properparty to raise the claims Finlay pleaded
and dismissed his complaint. Finlay, 2006 WL 1169794 at * 3. Thus, Finlay stands forthe proposition that the nature ofthe injury, direct or derivative, determines whether a plaintiffmust pursue a direct or derivative remedy,just as we have held above. The identity ofthe party inflicting the injury is irrelevant to this inquiry.
20No. 44915 - 3 -II

CONCLUSION 

### We hold thatthe trial court did not err in granting the Quiggs' motion to strike. We hold 

### also thatthe court correctly determined thatthe arbitration clauses did not require the Quiggs to arbitrate this dispute in their individual capacities. Accordingly, we affirm its grant of summary judgment to the Quiggs on this issue and its denial of Goldberg' s motion to compel arbitration. 

### Finally,we hold that Goldberg could not pursue direct claims againstthe Quiggs for injuries it suffered derivatively from injuries to the Partnership and LLC and, therefore, we affirm the trial 

### court' s determination that Goldberg lacked standing and was not the real party in interest. 

### Consequently, we affirm the trial court's grant ofsummaryjudgmentto the Quiggs on their counterclaim, its denial ofGoldberg' s motion to strike the Quiggs' defenses and counterclaims, and its dismissal ofGoldberg' s claims. 

### A majority of the panel having determined that this opinion will not be printed in the Washington Appellate Reports, but will be filed forpublic record in accordance with RCW 2.06.040, it is so ordered.

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