Court Opinion

ID: 4706482
Source: CourtListenerOpinion
Date Created: 2021-07-26 20:17:59.645835+00
Date Added: 2024-06-11T08:06:36.866442
License: Public Domain

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

 RICHARD F. MCVAY,
                                                     No. 81757-4-I
                       Appellant,
                                                     DIVISION ONE
                v.
                                                     UNPUBLISHED OPINION
 LEE CROSSRIDGE LLC,
 JOHN DOES 1-10, and
 ABC CORPORATIONS 1-10,

                       Respondent.

       COBURN, J. — Richard F. McVay appeals the trial court’s order vacating

default judgment against Lee Crossridge LLC (Crossridge) for insufficient service

of process. McVay contends he properly served the Washington Secretary of

State as an agent for Crossridge. We disagree and affirm.

                                        FACTS

       McVay alleges that he parked his car in the Crossridge Corporate Center

(Center) parking lot owned by Crossridge and sustained injuries when he exited

his car and slipped on wet and mossy pavement.

       On October 17, 2017, McVay sent a letter to Crossridge’s registered

agent, Shih-Jong “James” Lee, at the address listed as Crossridge’s principal

office by the Washington Secretary of State. Lee received the letter at the

principal office, which is also his home. The letter informed Lee that McVay fell

and sustained injuries in the Center’s parking lot. It also stated,

  Citations and pin cites are based on the Westlaw online version of the cited material.
No. 81757-4-I/2

       we respectfully notify your insurer of this claim as well as forward
       this correspondence. PLEASE NOTE THAT IF WE DO NOT HEAR
       FROM EITHER CROSSRIDEGE [sic], LLC OUR [sic] THEIR
       INSURER WITHIN THIRTY DAYS FROM THE DATE OF THIS
       CORRESPONDENCE, WE WILL HAVE NO CHOICE BUT TO
       FILE SUIT ON OUR CLIENT’S BEHALF.

Lee did not respond to the letter or follow up with Crossridge’s insurer. On

December 17, 2019, McVay filed a complaint in King County Superior Court

alleging Crossridge negligently and recklessly permitted an unreasonably

dangerous condition to exist and failed to exercise reasonable care to make the

Center’s parking lot safe. McVay claimed Crossridge’s negligence and

recklessness were a direct and proximate cause of his injuries.

       McVay hired ABC Legal Services, Inc. (ABC) to serve Crossridge. ABC

attempted to serve Lee personally eight times between December 23, 2017 and

January 14, 2018 at the principal office. When those attempts were

unsuccessful, ABC tried to serve Lee seven times between January 19 and

February 7 at the principal office of DRVision Technologies, LLC, which was

another business for which Lee was the registered agent. Of the 15 attempts at

service, Lee was out of town for seven of them and stayed at a hotel in town for

one of them. Lee claimed that none of his DRVision employees ever notified him

of an attempted service of a lawsuit. McVay never attempted service by

registered or certified mail.

       Four months after ABC’s last attempt of service, McVay elected to serve

the secretary of state as an agent for Crossridge. The submission of service

included a form coversheet provided by the secretary of state certifying that

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No. 81757-4-I/3

McVay’s counsel “attempted service on the entity by registered or certified mail,

return receipt requested, or similar commercial delivery service at the principal

office address as shown on the entity’s most recent annual report filed with the

Secretary of State’s Office.” On July 5, 2018, the secretary of state accepted

service on behalf of Crossridge.

       On December 13, 2018, McVay filed a motion for default judgment. The

same day, the trial court entered an order of default and judgment against

Crossridge. The court found that McVay properly served Crossridge and

Crossridge failed to appear. It also found Crossridge liable for McVay’s injuries.

       More than one year later, McVay mailed Lee a copy of a motion for an

order to show cause regarding appointment of a receiver and for injunctive relief.

Lee received the motion on March 9, 2020 and moved to vacate the default

judgment for improper service. Lee said this was the first time he received

notification of the lawsuit.

       At the hearing on the motion to vacate the default judgment, McVay relied

on declarations from the ABC process server and documentation proving McVay

served the secretary of state’s office. At the hearing, McVay’s counsel stated he

mailed the October 2017 letter to Lee by registered mail but conceded that he did

not serve the summons and complaint by registered mail.

       The trial court granted Lee’s motion to vacate the default judgment. The

trial court denied McVay’s motion for reconsideration.

       McVay appeals.

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No. 81757-4-I/4

                                   DISCUSSION

       McVay contends the trial court erred in vacating the default judgment

because he properly perfected service under former RCW 23.95.450 (2016), 1 a

statute permitting the secretary of state to receive service of process as agent of

an entity under certain circumstances. We disagree.

       Under CR 60(b)(5), a court must vacate a void judgment. Ahten v.

Barnes, 158 Wn. App. 343, 350, 242 P.3d 35 (2010). A party may assert a

motion to vacate under CR 60(b)(5) any time after entry of judgment. Id.

       Generally, Washington courts disfavor default judgments. See Gage v.

Bowing Co., 55 Wn. App. 157, 160, 776 P.2d 991 (1989). A default judgment is

void if the trial court lacked personal jurisdiction over the party. Ahten, 158 Wn.

App. at 349. To invoke personal jurisdiction, there must be “[p]roper service of

the summons and complaint.” Ha v. Signal Elec., Inc., 182 Wn. App. 436, 447,

332 P.3d 991 (2014) (citing Allstate Ins. Co. v. Khani, 75 Wn. App. 317, 324, 877

P.2d 724 (1994)).

       “Constitutional due process concerns determine the minimum

requirements for service, but statutory service requirements may add to the

constitutional requirements.” Crystal, China & Gold, Ltd. v. Factoria Ctr. Invs.,

Inc., 93 Wn. App. 606, 609, 969 P.2d 1093 (1999) (citing Weiss v. Glemp, 127

Wn.2d 726, 734, 903 P.2d 455 (1995)).

       1The current statute is nearly identical to the former statute except for a
minor change that is not relevant to this appeal.

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No. 81757-4-I/5

       “Under Washington law, the plaintiff has the initial burden to show that

service was sufficient. The plaintiff can ‘establish service of process with an

affidavit of service from a process server.’ Then it is the defendant’s burden to

show by clear and convincing evidence that service was improper.” Delex Inc. v.

Sukhoi Civil Aircraft Co., 193 Wn. App. 464, 468-69, 372 P.3d 797 (2016)

(quoting Scanlan v. Townsend, 181 Wn.2d 838, 847, 336 P.3d 1155 (2014)).

       “ ‘Because courts have a mandatory, nondiscretionary duty to vacate void

judgments, a trial court’s decision to grant or deny a CR 60(b) motion to vacate a

default judgment for want of jurisdiction is reviewed de novo.’ ” Ahten, 158 Wn.

App. at 350 (quoting Dobbins v. Mendoza, 88 Wn. App. 862, 871, 947 P.2d 1229

(1997)). Whether service of process was proper is a question of law that we also

review de novo. Goettemoeller v. Twist, 161 Wn. App. 103, 107, 253 P.3d 405

(2011) (citing Pascua v. Heil, 126 Wn. App. 520, 527, 108 P.3d 1253 (2005)).

       When a party sues an entity, it may serve notice on the entity’s registered

agent. Former RCW 23.95.450. The relevant statute went into effect January 1,

2016 and replaced former RCW 23B.05.040 (1989). Former RCW 23.95.450

provides:

                (1) A represented entity may be served with any process,
       notice, or demand required or permitted by law by serving its
       registered agent.
                (2) If a represented entity ceases to have a registered agent,
       or if its registered agent cannot with reasonable diligence be
       served, the entity may be served by registered or certified mail,
       return receipt requested, or by similar commercial delivery service,
       addressed to the entity at the entity’s principal office. The address
       of the principal office must be as shown in the entity’s most recent
       annual report filed by the secretary of state. Service is effected
       under this subsection on the earliest of:

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No. 81757-4-I/6

               (a) The date the entity receives the mail or delivery by the
       commercial delivery service;
               (b) The date shown on the return receipt, if executed by the
       entity; or
               (c) Five days after its deposit with the United States postal
       service or commercial delivery service, if correctly addressed and
       with sufficient postage or payment.
               (3) If process, notice, or demand cannot be served on an
       entity pursuant to subsection (1) or (2) of this section, service may
       be made by handing a copy to the individual in charge of any
       regular place of business or activity of the entity if the individual
       served is not a plaintiff in the action.
               (4) The secretary of state shall be an agent of the entity for
       service of process if process, notice, or demand cannot be served
       on an entity pursuant to subsection (1), (2), or (3) of this section.
               (5) Service of process, notice, or demand on a registered
       agent must be in a written record, but service may be made on a
       commercial registered agent in other forms, and subject to such
       requirements, as the agent has stated in its listing under
       RCW 23.95.420 that it will accept.
               (6) Service of process, notice, or demand may be made by
       other means under law other than this chapter.

       “If, after reasonable diligence, the corporation’s registered agent cannot

be found at the registered office, then service on the corporation may be

effectuated by serving the Secretary of State.” Crystal, China & Gold, Ltd., 93

Wn. App. at 609 (citing former RCW 23B.05.040(2)(b) (1989)). Under former

RCW 23B.05.040(3), the secretary of state would then “immediately cause a

copy thereof to be forwarded by certified mail, addressed to the secretary of the

corporation at the corporation’s principal office as shown on the records of the

secretary of state.”

       The relevant statute no longer requires the secretary of state to mail a

copy to the entity and instead allows the secretary of state to act as the agent of

the entity “for service of process if process, notice, or demand cannot be served

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No. 81757-4-I/7

on an entity pursuant to subsection (1), (2), or (3) of this section.”

RCW 23.95.450(4).

       Statutory interpretation is a question of law that we review de novo. State

v. Mullen Trucking 2005, Ltd., 5 Wn. App. 2d 787, 794, 428 P.3d 401 (2018).

“Our primary duty in interpreting a statute is to discern the intent of the

legislature. We begin with the statute’s plain language, which may be discerned

‘from all that the Legislature has said in the statute and related statutes which

disclose legislative intent about the provision in question.’ ” Id. (citations

omitted). “Where the plain language of a statute is unambiguous, and legislative

intent is therefore apparent, we will not construe the statute otherwise.”

Ellensburg Cement Prods., Inc. v. Kittitas County., 179 Wn.2d 737, 743, 317

P.3d 1037 (2014). We construe the language in a statute as a whole “giving

effect to all the language used.” C.J.C. v. Corp. of the Catholic Bishop of

Yakima, 138 Wn.2d 699, 708, 985 P.2d 262 (1999).

       McVay contends the alternative methods of service under former

RCW 23.95.450 are optional, so he was not required to satisfy subsections (2)

and (3) before serving the secretary of state if personal service failed under

subsection (1). Specifically, McVay contends former RCW 23.95.450(2) “permits

but does not require” service by registered or certified mail because it uses the

term “may.” Crossridge contends former RCW 23.95.450 outlines progressive

steps that a party must attempt before it may serve the secretary of state as

agent of the entity. We agree with Crossridge.

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No. 81757-4-I/8

       Subsections (5) and (6) of former RCW 23.95.450 recognize that there

may be alternative methods to effectuate service of process other than those

listed in the statute. However, those other methods must be “subject to such

requirements, as the agent has stated in its listing under RCW 23.95.420 that it

will accept” or as allowed for “under the law other than this chapter.” Former

RCW 23.95.450(4)-(5). The statute uses the term “may” in subsections (1)

through (3) because it recognizes there may be other lawful methods of service.

       Reading the statute as a whole, the plain language of former

RCW 23.95.450 represents three distinct progressive steps before a party may

serve the secretary of state. First, the party must attempt service on the entity’s

registered agent. Former RCW 23.95.450(1). Second, it is only “[i]f a

represented entity ceases to have a registered agent, or if its registered agent

cannot with reasonable diligence be served, the entity may be served by

registered or certified mail, return receipt requested, or by similar commercial

delivery service.” Former RCW 23.95.450(2) (emphasis added). The party may

utilize the third option of service, “to the individual in charge of any regular place

of business or activity of the entity,” only “if” process “cannot be served on an

entity pursuant to subsection (1) or (2).” Former RCW 23.95.450(3) (emphasis

added). Lastly, the secretary of state “shall be an agent of the entity for service

of process if process, notice, or demand cannot be served on an entity pursuant

to subsection (1), (2), or (3) of this section.” Former RCW 23.95.450(4)

(emphasis added).

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No. 81757-4-I/9

       By creating these progressive steps, the legislature shifted the burden of

notice by mail from the secretary of state to the party who must comply with

service of process. The secretary of state’s “COVER SHEET FOR SERVICE OF

PROCESS TO THE SECRETARY OF STATE’S OFFICE” form signed by

McVay’s counsel required him to “certify under penalty of perjury under the laws

of the state of Washington” the following:

       •   I attempted service on the Registered Agent, as listed in the
           entity’s information in the Secretary’s records.

       •   The entity does not have a registered agent and I attempted
           service on the entity by registered or certified mail, return receipt
           requested, or similar commercial delivery service at the principal
           office address as shown on the entity’s most recent annual
           report filed with the Secretary of State’s Office.

       •   I have exercised reasonable diligence in attempting to serve the
           registered agent, and I attempted service on the entity by
           registered or certified mail, return receipt requested, or similar
           commercial delivery service at the principal office address as
           shown on the entity’s most recent annual report filed with the
           Secretary of State’s Office.

       •   I could not serve the entity using any of the above methods
           therefore I attempted service by handing a copy to the individual
           in charge of any regular place of business or activity of the entity
           and the individual served is not a plaintiff in the action.

McVay exercised reasonable diligence in attempting to serve Lee as

Crossridge’s registered agent. Eight attempts of service at Crossridge’s principal

office and seven attempts of service at another company where Lee works is

more than reasonable. After these reasonable attempts failed, instead of

continually trying to personally serve Lee, McVay could have attempted service

by registered or certified mail. However, he did not, despite certifying to the

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No. 81757-4-I/10

secretary of state that he did so. Because McVay did not serve Crossridge “by

registered or certified mail, return receipt requested, or similar commercial

delivery service at the principal office address as shown on the entity’s most

recent annual report filed with the Secretary of State’s Office,” serving the

secretary of state was not yet an option. 2

       Without any support in the record, McVay also contends that Crossridge

failed to continuously maintain a registered agent in Washington in violation of

the Washington Business Corporations Act. RCW 23.95.405 requires all

domestic and registered foreign entities to maintain a registered agent in

Washington. McVay cites to no authority that a registered agent cannot travel

out of town.

       McVay also contends Lee frustrated his attempt to serve Crossridge in

compliance with former RCW 23.95.450(3) by locking or closing his primary

office during business hours at DRVision. First, DRVision is not Crossridge so

locking or closing the primary office of DRVision is not relevant because former

RCW 23.95.450(3) allows service to be “made by handing a copy to the

       2 Without explaining how ABC’s personal service attempt that did not
leave any message at Crossiridge’s principal office is “similar” to service by
registered or certified mail, McVay also contends he complied with former
RCW 23.95.450(2) because ABC is a “commercial delivery service.” McVay first
raised this argument in his motion for reconsideration. McVay does not assign
error to the trial court’s order denying reconsideration. RAP 10.3(a)(4);
RAP 10.3(g); see also Herzog Aluminum, Inc. v. Gen. Am. Window Corp., 39
Wn. App. 188, 197, 692 P.2d 867 (1984) (issue not properly before appellate
court where respondent does not assign error to the trial court decision).
Because McVay does not assign error to or provide reasoning as to why we
should reverse the order denying reconsideration, we decline to address this
argument. RAP 10.3(a)(6).

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No. 81757-4-I/11

individual in charge of any regular place of business or activity of the entity if the

individual served is not a plaintiff in the action.” Regardless, this method of

service would only have been available if McVay could not serve Lee personally,

or by certified or registered mail, or by a similar commercial delivery service.

                                   CONCLUSION

       McVay did not comply with former RCW 23.95.450 and did not otherwise

establish that he lawfully served the summons and complaint on Crossridge.

Thus, the trial court did not have personal jurisdiction over Crossridge and

properly vacated the default judgment. Accordingly, we affirm.

WE CONCUR:

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