Court Opinion

ID: 2818920
Source: CourtListenerOpinion
Date Created: 2015-07-21 22:33:27.56036+00
Date Added: 2024-06-11T12:19:11.532051
License: Public Domain

k lLED
                                                                                                COURT OF APPEALS
                                                                                                     DlivlSlor        ii

                                                                                              2D   JUL 2 i       All 9: 2 9

    IN THE COURT OF APPEALS OF THE STATE OF W

 PUBLIC             UTILITY      COMMISSION
                                                 DIVISION II

                                                     OF
                                                                                                   15M\\ D

 OREGON,

                                     Respondent,

           V.

                                                                     UNPUBLISHED OPINION
 CERTAIN             REAL     PROPERTY      in     Pierce

 County,        and the   owners thereof and parties

 interested therein including JOSEPH YE AND
 JANICE LOU, husband and wife,

                                     Appellants,

 STAN EFFERDING, an individual; and U. S.
 BANK NATIONAL ASSOCIATION,

                                      Defendants.

          MAXA, P. J. —      Joseph Ye and Janice Lou challenge the trial court' s grant of summary

judgment to the Public Utility Commission of Oregon ( Commission) in the Commission' s action

to foreclose a judgment lien on Ye and Lou' s Pierce County residence. The Commission' s.

judgment, which was obtained in Oregon and filed as a foreign judgment in Pierce County, was

against " VCI Company f/k/a Stan Efferding and Stanley Johnson, dba Vilaire, and VCI

Company,        a   Washington Corporation." Clerk' s Papers ( CP)   at   8.   Stan Efferding sold the

residence to Ye and Lou after the judgment lien was created, but the lien was not extinguished as

part of   the   sale.
       Ye and Lou argue that the trial court erred in granting summary judgment because the

Oregon judgment was entered against VCI Company, a corporation, and not against Efferding.

Alternatively, they argue that there was a question of fact whether the Oregon judgment was

entered against Efferding. Finally, Ye and Lou argue that the trial court, sitting in equity, should.

have denied summary judgment because the foreclosure of their residence would be inequitable

and unconscionable.

       We hold that the Oregon judgment on its face was against Efferding, and that the trial

court was required to enforce the judgment under the full faith and credit clause of the United

States Constitution. Further, we hold that Ye and Lou' s equitable argument is an improper

collateral attack on the judgment. Accordingly, we affirm the trial court' s grant of summary

judgment in favor of the Commission.

                                               FACTS

       In 2003, Efferding and Johnson registered to conduct business in the State of Oregon

under the name Vilairel as a sole proprietorship. Later that year, the Commission granted the

petition of Efferding, doing business as Vilaire, for designation as a competitive

telecommunications service provider in Oregon.

       In July 2004, the Commission granted Efferding' s request to change the name of his

company from " Stan   Efferding dba Vilaire"   to " VCI   Company."   CP at 76. Attached with

Efferding' s name change request was a copy of VCI Company' s application for authority to

I Different Commission documents and pleadings refer to the company name as both Vilaire and
Vilair. Unless quoting a document that uses Vilair, this opinion uses the name Vilaire because it
is what is used in the Commission' s order and it is what Efferding self -identified as the name of
his business.

                                                  0)
46684 -8 -II

transact business in Oregon as a foreign business corporation, which was stamped as filed with

the Oregon     Secretary     of   State in December 2003.      CP at 215 ( declaration by Commission

attorney characterizing the filed application as " a copy of a license from the Secretary of State

for VCI Company" to conduct business in Oregon).

         In September 2007, the Commission filed a complaint, which in the caption listed two

defendants: "      VCI Company f/k/ a Stan Efferding and Stanley Johnson, dba Vilaire" and " VCI

Company,       a   Washington     corporation."   CP at 20. The complaint alleged that the defendants

improperly billed and were reimbursed $203, 391. 97 from June 2004 through November 2006 by

the Commission for Commission customers that did not have service with the defendants. The

complaint characterizes " VCI Company f/k/ a Stan Efferding and Stanley Johnson, dba Vilaire"

and "   VCI   Company ... a foreign business corporation that was incorporated in the State of

Washington . [           and] registered to do business in the State of Oregon on December 4, 2003" as

separate entities. CP at 20- 21.

         A default       order was entered pursuant     to the Commission'    s complaint.   CP   at   11.   The

caption of the order again listed " VCI Company f/k/ a Stan Efferding and Stanley Johnson, dba

Vilaire,   and     VCI   Company,    a   Washington   corporation" as   the defendants.   CP at 8. However,

the order itself stated that VCI Company f/k/ a/ Stan Efferding and Stanley Johnson, dba Vilaire

was required to pay the Commission $203, 391. 97. The order did not state that VCI Company,

the corporation, was required to pay anything. The parties agree that the order was not paid.

           In August 2010, the circuit court in Oregon entered an order stating that the September

2007 default order had the same attributes and effect of a judgment entered in the register of the

circuit court.

                                                           3
46684 -8 -II

          On October 8, 2010, the Commission filed the default order as a foreign judgment in

Pierce County Superior Court. At the same time, the Commission filed a judgment summary

listing the judgment debtors as " VCI Company f/k/a Stan Efferding and Stanley Johnson, dba

Vilair,   and   VCI   Company,   a   Washington Corporation." CP at 26. On October 20, the

Commission recorded an abstract ofjudgment with the Pierce County Auditor' s Office. The

abstract of judgment listed as original parties to the action VCI Company ( defendant), Vilaire

 dba), Stan     Efferding ( fka), and Stanley Johnson ( fka) and individually listed VCI Company,

Vilaire, Stan Efferding, and Stanley Johnson as the judgment debtors.

          Efferding owned real property in Pierce County. In May 2011, Efferding sold the

property to Ye and Lou. At or around the time of purchase, Ye and Lou purchased a title

insurance policy from Fidelity National Title covering the subject property. The entire purchase

price of the sale went to Efferding, and the Commission' s judgment lien remained unsatisfied.

          In July 2013, the Commission filed an action to foreclose on the judgment lien on the

property Efferding had sold to Ye and Lou. Ye and Lou filed a motion to dismiss, alleging that

Efferding was not the judgment debtor. The trial court denied the motion. Ye and Lou then filed

another motion to dismiss, arguing that the underlying judgment was defective under Oregon law

because it failed to meet the statutory requirements for a judgment lien. They argued in the

alternative that the court should stay the Pierce County action to allow them to reopen the case in

Oregon, intervene in the proceeding, and obtain an order determining whether the order created a

valid judgment lien. The trial court denied Ye' s and Lou' s motion to dismiss, but granted their

motion to stay the Pierce County action until February 8, 2014.

                                                      E
46684 -8 -II

        Ye and Lou filed a motion in Oregon in December 2013 to reopen the 2010 order,

intervene in the case, and clarify the effect of the 2007 and 2010 orders. They sought an order

stating that neither the Commission' s 2007 order nor the circuit court.'s 2010 order met the

statutory requirements for a judgment lien. In addition, they sought an order clarifying that

Efferding, as an individual, was neither a defendant nor a judgment debtor in the Oregon

proceedings.   In February 2014, the Oregon circuit court granted the motion to reopen, but

denied the motion to intervene and denied Ye and Lou' s requested relief. Ye and Lou filed a

notice of appeal in Oregon.2

        Following the Oregon circuit court ruling, the -trial court lifted the stay of the Pierce

County action. The Commission subsequently filed a motion for summary judgment. The

Commission argued that the trial court did not have jurisdiction to vacate the judgment and only

had jurisdiction to enforce the Oregon order. Ye and Lou opposed the motion, arguing that there

was a question of fact regarding whether it would be inequitable and unconscionable to enforce

the judgment lien against their home when Efferding was not a valid judgment debtor in the

Oregon proceedings. Ye and Lou argued that the trial court should not enforce the judgment

based on its equitable powers.

        The trial court granted the Commission' s summary judgment motion and ruled that the

Commission was entitled to foreclose the judgment lien. Ye and Lou requested that the trial

court certify the summary judgment as a final judgment under CR 54( b) and stay the order

pending appeal. The trial court granted the motion.

2 There is no evidence in the record that Ye and Lou filed to stay the execution of the Oregon
judgment.

                                                   5
MIT61: ; -

             Ye and Lou appeal.

A.           STANDARD OF REVIEW

             We review a trial court' s order granting summary judgment de novo. Lyons v. U.S. Bank

NA, 181 Wn.2d, 775, 783, 336 P.3d 1142 ( 2014). We review the evidence in the light most

favorable to the nonmoving party and draw all reasonable inferences in that party' s favor. Lakey

v.   Puget Sound Energy, Inc., 176 Wash. 2d 909, 922, 296 P.3d 860 ( 2013).

             Summary judgment is appropriate where there is no genuine issue of material fact and the

moving party is          entitled   to judgment    as a matter of    law. Loeffelholz   v.   Univ. of Wash., 175
Wash. 2d 264, 271, 285 P.3d 854 ( 2012). A genuine issue ofmaterial fact exists where reasonable

minds could differ on the facts controlling the outcome of the litigation. Dowler v. Clover Park

Sch. Dist., 172 Wash. 2d 471, 484, 258 P.3d 676 ( 2011).                     If reasonable minds can reach only one

conclusion on an issue of fact, that issue may be determined on summary judgment. Failla v.

FixtureOne         Corp.,   181 Wash. 2d 642, 649, 336 P.3d 1112 ( 2014).

B.           IDENTITY OF JUDGMENT DEBTOR

             Ye and Lou argue that the trial court erred in granting summary judgment because the

Oregon order was entered against VCI Company, a corporation, and not against Efferding

individually. We disagree.

             1.    Terms of Order

             The   caption of     the   Oregon   order named   two defendants: ( 1) "    VCI Company f/k/a Stan

Efferding         and   Stanley   Johnson, dba Vilaire"    and ( 2)   "   VCI Company, a Washington corporation."

CP at 8. However, the body of the order never mentions VCI Company the corporation. Instead,

                                                               Col
46684- 841

the only reference is to " VCI Company f/k/ a Stan Efferding and Stanley Johnson, dba Vilaire,"

who are    identified   as "[   d] efendants."   CP at 8. Further, the actual order requiring payment of

 203, 391. 97 was issued only against " VCI Company f/k/ a Stan Efferding and Stanley Johnson,

dba Vilaire." CP     at   11.    The corporation called VCI Company was not included in the payment

order. Therefore, there is no genuine issue of material fact that the Oregon order, and therefore

the Washington judgment, was entered against VCI Company f/k/ a Stan Efferding and not

against VCI Company, the corporation.

          The body of the order makes it clear that VCI Company f/k/a Stan Efferding is a sole

proprietorship. Efferding doing business as Vilaire petitioned for designation as a

telecommunications carrier and then changed the name of the company from " Stan Efferding dba

Vilaire" to ."VCI   Company." CP at 8. The individual owner of a sole proprietorship is liable for

the business' s debts, regardless of the business' s name. Dolby v. Worthy, 141 Wash. App. 813,

816, 173 P.3d 946 ( 2007) ( stating       that the owner of a sole proprietorship is responsible for all its

debts).   As a result, we hold that the Oregon order against " VCI Company f/k/ a Stan Efferding,"

and the resulting Washington judgment, must be treated as a judgment against Efferding

individually.

          2.    Collateral Attack

          Ye and Lou' s argument essentially is that the Oregon order should have been entered

against VCI Company the corporation. They claim that the name VCI Company only refers to

the corporation and not to a sole .proprietorship, that the overpayments giving rise to the order

were paid to the corporation, and that the only entity subject to the commission' s investigation

                                                           7.
46684 -8 -II

was the corporation. However, even if Ye and Lu' s claims are true, they are irrelevant in a

proceeding to enforce a foreign judgment.

         Under the full faith and credit clause of the United States Constitution, a judgment

rendered by one state generally is entitled to full faith and credit in every other state. U. S.

CONST.   art.   IV, § 1;   see   State   v.   Berry, .141   Wn.2d 121, 127- 28, 5 P.3d 658 ( 2000). Washington

codified this constitutional provision by enacting the Uniform Enforcement of Foreign

Judgments Act (UEFJA),             chapter 6. 36 RCW. See Brown v. Garrett, 175 Wash. App. 357, 366- 67,

306 P.3d 1014 ( 2013).          Under the UEFJA, creditors holding a judgment against a debtor in

another jurisdiction can enforce that judgment in Washington. RCW 6. 36. 025; Brown, 175 Wn.

App. at 367. A party can collaterally attack a foreign judgment only if (1) a foreign court did not

have jurisdiction, or (2) the judgment violates a constitutional right, such as notice and the

opportunity to be heard. Brown, 175 Wash. App. at 367. Absent these grounds, the terms of the

judgment must be enforced. Id.

         Here, by arguing that the Oregon order should have been entered against the corporation,

Ye and Lou are attempting to collaterally attack the order. However, Washington courts are

required to enforce foreign judgments as written, regardless of how they " should have been"

 r,
  R 1M
     - 0 -

C.       EQUITY AND ENFORCEMENT OF JUDGMENT

         Ye and Lou argue that the trial court erred in granting summary judgment when allowing

the Commission to enforce the judgment lien would be inequitable and unconscionable. We

disagree.
46684 -8 -II

          In limited situations, a party may obtain relief in equity when enforcement of a legal right

would be inequitable. See Malo v. Anderson, 62 Wash. 2d 813, 815- 17, 384 P.2d 867 ( 1963);

Thisius   v.   Sealander, 26 Wash. 2d 810, 818, 175 P.2d 619 ( 1946).   A court sitting in equity has

broad discretion in shaping relief. Sorenson v. Pyeatt, 158 Wash. 2d 523, 531, 146 P.3d 1172

 2006). We review a trial court' s consideration of equitable remedies for abuse of discretion. Id.

          Here, Ye and Lou argue that enforcement of the judgment would be inequitable because

the Commission was not entitled to a judgment against Efferding individually and that the

judgment should have been entered against VCI Company the corporation. But this is nothing

more than a collateral attack against the judgment, which is not permitted under the full faith and

credit clause and the UEFJA.

          We hold that the trial court did not abuse its discretion in failing to block enforcement of

the judgment on equitable grounds.

          We affirm the trial court' s grant of summary judgment in favor of the Commission.

          A majority of the panel having determined that this opinion will not be printed in the

Washington Appellate Reports, but will be filed for public record in accordance with RCW

2. 06. 040, it is so ordered.

                                                          MAXA, P. J.
We concur:

 LKRK, J. ,

 SUTTON, J.

                                                    a