Court Opinion

ID: 2652227
Source: CourtListenerOpinion
Date Created: 2014-02-04 22:28:15.825963+00
Date Added: 2024-06-11T12:57:53.977707
License: Public Domain

IL D
                                                                                           01iRT }  APPEALS
                                                                                               D I VISIMP, h

                                                                                        201 FEB —4        AM 9= 17
      IN THE COURT OF APPEALS OF THE STATE C!
                                                                                            M                  0(
                                                     DIVISION II                         By
                                                                                                  Dt UTY
ALEX VON KLEIST,                                                                      No. 43138 -6 -II
                                                                        Consolidated with Nos. 43718 -0 -II,
                                      Respondent,                       43885 -2 -II, 43318- 4- 11, 43335- 4- 11,
                                                                                      and 43425 -3 -II)

          VIM

PAUL J. LUKSHA, a Canadian citizen, and
GREGORY COCHRANE, a Canadian citizen,

                                       Appellants,

GRAOCH            161 - 1    GP,   INC.,   a   Washington .
corporation,       and      GRAOCH 161 GP, L. P.,         a

Washington          limitedpartnership,            GRAOCH
160 -1    GP,     INC., a Washington corporation,
and   GRAOCH 160 CP, L. P., a Washington

limited partnership, THE JACKALOPE FUND
LIMITED             PARTNERSHIP,               a     British

Columbian limited partnership, GARY GRAY
and      JANE      DOE        GRAY,    and     the   marital

community thereof, LES PIOCH, a Canadian
citizen,

                                      Defendants.

           HUNT, J. —         Gregory Cochrane and Paul J. Luksha appeal the superior court' s denial of

their motions to vacate two default judgments against them' in Alex Von Kleist' s action for

 The second default judgment did not list Luksha as a judgment debtor; but his name appears on
the third       page of     the judgment summary along         with   the   other   Defendants'   names.   We treat this
as a scrivener' s error because Von Kleist' s second motion for default judgment named other
Defendants,        including    Cochrane, but it did   not name       Luksha.
Consolidated Nos. 43138 -6 -II (with 43718 -0 -II, 43885 -2 -11, 43318 -4 -II, 43335 -4 -II, 43425 -3 -II)

                   2                                                                                    3
securities   fraud , intentional   misrepresentation, negligent misrepresentation,        accounting,       breach

                                                                            4
                             Washington' s Consumer Protection Act,
                                                                                                       receivers

of contract, violation of                                                       and appointment of a

for their partnership.        Cochrane and Luksha argue that the superior court lacked personal

jurisdiction over them and that there were other irregularities in procuring the judgments.

Holding that improper service initially prevented the superior court from having personal

jurisdiction over Cochrane and Luksha, we reverse its denial of their motion to vacate the first

default judgment and remand to strike that judgment. Holding that proper service later bestowed

personal jurisdiction over Cochrane, we affirm the superior court' s denial of his motion to vacate

the second default judgment; but because Luksha was not similarly later served, we remand for

the superior court to strike his name from the second default judgment summary.

                                                    FACTS

         Alex Von Kleist is        a   Canadian   citizen   who   resides   in British Columbia,        Gregory

Cochrane and Paul J. Luksha, also Canadian citizens, are general partners in Graoch Associates

Limited      Partnership (   GALP),    a   Canadian limited partnership, which controls hundreds of

corporate entities in Canada and the United States under' GALP President- Gary M: Gray' s

management.

a RCW 21. 20. 010.

s RCW 25. 10. 210.

    RCW 19. 86. 090; RCW 19. 86. 093.

s
    RCW 7. 60. 025.

                                                        2
Consolidated Nos. 43138 -6 -II (with 43718 -0 -II, 43885 -2 -II, 43318 -4 -II, 43335 -4 -II, 43425 -3 - II)

                    I. VON KLEIST' S INVESTMENT IN WASHINGTON LIMITED PARTNERSHIP

              On the        advice    of   GALP    general    partner      Les Pioch, Von Kleist decided to invest

 1, 012,000 in          a    GALP -controlled Washington limited partnership, " GRAOCH ASSOCIATES

Limited        Partnership #     161" ( Graoch 161).          Clerk'   s   Papers ( CP)   at    1301.    Pioch presented Von

Kleist with various documents about Graoch 161 and explained to him that ( 1) Graoch 161 was a

Washington " Loan              and    Funding     vehicle"    for " GRAOCH ASSOCIATES #                    160 LP ,6 ( Graoch

       7; (
160)          2) Von Kleist' s investments would be returned and payable back to him no later than

October 15, 2008; and ( 3) if Graoch 161 missed a repayment date, Von Kleist would be entitled

to   18       percent   compounded           interest   per   annum    until   Graoch 161         repaid   his ( Von Kleist' s)

investment.           Based     on    these   representations,    Von Kleist felt that his investment " would be.

secure."         CP     at    1301.        On November 15, 2007, Von Kleist                    entered   into   a "   Subscription

Agreement" with Graoch 161 to invest in that limited partnership. CP at 1302.

                A. Subscription Agreement: Forum Selection and Consent to Service by Mail

              This Agreement          provided    that ( 1)   for $ 1, 012, 000, Von Kleist would acquire a limited

partnership interest in-Graoch 161; ( 2) Graoch 161 would make one or more loans of $6,784, 000

to Graoch 160, due              and payable no      later than October 15, 2008 ( " Loan Repayment Date"); (                    3)

within 30 days of the Loan Repayment Date, Von Kleist would receive a written option ( a) to

remain a limited partner of Graoch 161 for an additional 12 months or ( b) to withdraw as a

limited partner of Graoch 161 and to recover his total investments plus accrued distributions.

6CPat1301.

7 Graoch 160 was another GALP -controlled limited partnership in Washington.
BCPat1302.

                                                                  3
Consolidated Nos. 43138 -6 -II (with 43718 -0 -I1, 43885 -2 -I1, 43318 -4 -II, 43335 -4 -II, 43425 -3 -11)

Section 16 of this Agreement contained provisions selecting Washington as a forum selection

and   allowing   service     by   mail.   Section 15 of this Agreement contained an assignment provision.

         Section 16 of the Agreement, provided, in pertinent part,

         This Subscription Agreement and all rights hereunder shall be governed by, and
         interpreted in        accordance       with,   the laws        of   the     State   of    Washington.        The

         undersigned hereby submits to the nonexclusive jurisdiction of the courts of the
         State of Washington and of the federal courts in the Western District of
         Washington with respect to any action or legal proceeding commenced by any
         person or entity relating to or arising out of this Subscription Agreement, the
         Partnership or the Partnership' s business, and consents to the service of process in
         any such action or legal proceeding by means of registered or certified mail,
         return receipt requested, in care of the address set forth below on the signature
         page or such other address as the undersigned shall furnish in writing to the
         Partnership.

CP at 1320.

         Von Kleist      signed     this Agreement           as a "   Subscriber "; he       was   the   sole "   undersigned" to

which   the Agreement         referred.    CP   at   1321.    Although there was a blank signature line for GALP

President Gray, neither Gray nor anyone else signed the Agreement on behalf of the referenced
                 9;
 partnership "        GALP    general partner        Pioch    signed    only   as a "   Witness."      CP at 1321.

         On December 12, however; - month after Von Kleist had signed the Agreement, GALP -
                                  a

                                                                             10
President      Gray   sent   Von Kleist    a " written acceptance "               acknowledging receipt of Von Kleist' s

bank    wire   transfer of $ 1, 012, 658. 23 to Graoch 161 in                     satisfaction    of   the Agreement.       Gray' s

letter also represented that Von Kleist' s initial distribution check was enclosed and that the next

check would be delivered in January.

9 CP at 1322.

to Br. of Appellant at 28.

                                                                  M
Consolidated Nos. 43138 -6 -II (with 43718 -0 -II, 43885 -2 -II, 43318 -4 -II, 43335 -4 -II, 43425 -3 - II)

                                              B. Breach of Agreement

          As the October 15, 2008 loan repayment date neared, Von Kleist had not received the

promised written option        to   withdraw    his partnership.          He contacted Pioch about this " missing"

option letter and explained that he wanted . o withdraw as -limited partner of Graoch 161 and to
                                           t

recover    his investments     and accrued      distributions.          Pioch repeatedly promised that Von Kleist

would receive payment        in March 2009, but Von Kleist                never received   it.   On July 17, 2009, Von

Kleist contacted GALP general partner Cochrane requesting corporate information about Graoch

161.     Von Kleist sent a follow up email, to which Cochrane responded, promising to provide

financial statements, which, again, Von Kleist never received.

          On September 17, 2009 Von Kleist' s attorney, Stephen Pidgeon, sent demand letters to

Graoch 161'      s registered agent    for   service of process ( Bruce         P. Weiland),     Gray, Pioch, Cochrane,

and    Luksha,   demanding     full   and complete $       1, 248, 845. 53 payment to Von Kleist and complete

financial    statements   for Graoch 161       and   Graoch 160.          Von Kleist received no response to these

demand letters.

                                                     II   PROCEDURE -

                                              A. Superior Court Action

          Von Kleist    sued   Graoch 160; Graoch 161; Graoch 161 - 1 GP, Inc.; Graoch 160 -1 GP,

Inc.;   The Jackalope Fund Limited Partnership; Gary Gray and Jane Doe Gray; Pioch; Cochrane;

and     Luksha ( collectively,   " Defendants ")      for ( 1)       accounting; ( 2)   appointment of a receiver for

Defendants under RCW 7. 60. 025; and ( 3) damages based on violations of chapter 21. 20 RCW

 securities   fraud), intentional misrepresentation, negligent misrepresentation, breach of contract,

and violation of chapter 19. 86 RCW ( Consumer Protection Act).

                                                                 5
Consolidated Nos. 43138 -6 -II (with 43718 -0 -II, 43885 -2 -II, 43318 -4 -II, 43335 -4 -II, 43425 -3 - II)

        Von Kleist served Defendants with a summons and verified complaint; he served some of

them personally        and   others    by   certified mail.      On December 9, Von Kleist effected personal

service on Bruce Weiland, attorney and registered agent for Graoch 161, Graoch 161 - 1 GP, Inc.,

Graoch 160,      and    Graoch 160 GP, Inc.,          with a summons and verified complaint.          On December

11, Von Kleist        served   Pioch, The Jackalope Fund Limited            Partnership ( " The   Jackalope Fund "),

Cochrane,      and    Luksha    by   certified mail.    On December 18, Von Kleist secured personal service

on Gray with a summons and verified complaint.

                                                1.   First default judgment

         On     January      27, 2010, Von Kleist filed a motion for order of default against all

Defendants for failure to appear or to indicate any intent to appear or to defend. That same day,

the superior court entered an order of default against all Defendants, including Cochrane and

Luksha,      and a   default judgment for $ 1,       245, 165. 31, listing all Defendants as judgment debtors.

         In March 2009, attorney David Spellman spoke with Pidgeon on behalf of the out -of-

country Defendants to            negotiate     an    order    relieving them from the default judgment.         The

attorneys prepared a stipulation agreement and order vacating the superior court' s default order

and   default judgment         against   international Defendants:       The Jackalope Fund, Luksha, Pioch, and

Cochrane; they also discussed the possibility of settlement. On April 22, Pidgeon sent Spellman

an email about the settlement and inquired whether Spellman had an offer; but he never heard

back from Spellman           about    the   settlement.      The attorneys never signed the stipulation or filed it

with   the   court.
Consolidated Nos. 43138 -6 -II (with 43718 -0 -II, 43885 -2 -II, 43318 -4 -I1, 43335 -4 -II, 43425 -3 - II)

                                              2. Second default judgment

        Von Kleist then secured personal service on all international Defendants, except Luksha.

On   February 18,      2010,       Von Kleist personally served the original summons and verified

complaint    on   Cochrane       and     The Jackalope Fund.           On March 1,      2010, Von Kleist secured

personal service on Pioch. On May 10, Von Kleist filed affidavits of service as to Cochrane, The

Jackalope Fund, and Pioch; he also filed a second motion for default judgment as to these

defendants, but he did       not   include Luksha.        That same day, the superior court entered a second

default judgment      as   to international defendants Cochrane, Pioch            and    The Jackalope Fund. Von

Kleist did not include Luksha' s name in the second default judgment' s list of debtors, which

included Cochrane, Pioch           and      The Jackalope Fund. Nevertheless, the second default judgment

mentioned Luksha on the third page of the default judgment, which appears to have been a

scrivener' s error.

                                       3.    Motion to vacate default judgments

        Defendants did not directly appeal either default judgment. Instead, on January 11, 2011,

they filed    motion to vacate both default judgments, arguing that -(1) the default judgments were -

void under CR 60(b)( 5) for lack of personal jurisdiction over them, and ( 2) there were procedural

irregularities in the grant of default judgments entitling them to vacation under CR 60( b)( 1). 11

On April 6, 2012, the superior court denied Defendants' CR 60 motion, ruling that there was no

basis for vacating the default judgments because it had jurisdiction over the Defendants under the

11 In their motion to vacate, Defendants also argued that ( 1) Von Kleist had misrepresented his
personal service under CR 60( b)( 4) on Gray and Weiland, and ( 2) procedural and jurisdictional
problems     warranted     the   vacation      of   the default    judgment   under   CR 60( b)( 11).   They do not,
however, pursue these two issues in this appeal.

                                                              VA
Consolidated Nos. 43138 -6 -II (with 43718 -0 -II, 43885 -2 -II, 43318 -4 -II, 43335 -4 -II, 43425 -3 -II)

Agreement'    s"   dispositive" " initial forum            selection     clause."    Verbatim Report of Proceedings

VRP) ( Apr. 6, 2012) at 7.

               B. Appeal from Denial of CR 60 Motion To Vacate Default Judgments

          Defendants      appealed.          Cochrane and Luksha also filed a separate Notice of Appeal

seeking review of the superior court' s denial of their motion to vacate the default judgments

entered   against   them.       On November 20, 2012, ' a commissioner of our court dismissed the

appeals of all Defendants except Cochrane and Luksha, who remain the only active appellants

before us in this consolidated appeal.

                                                          ANALYSIS

          Cochrane and Luksha argue that the superior court erred in denying their motion to

vacate   the default judgments             under   CR 60( b)( 5)   and   CR 60( b)( 1)   on   two   alternative grounds: (   1)

The default judgments were void under CR 60( b)( 5) because the superior court lacked personal

jurisdiction over them based on lack of proper personal service ( required under Washington' s

                        12;
long   arm   statute)         and (   2)    in the alternative, the default judgments against Cochrane and

Luksha suffered from serious irregularities that warrant vacation under CR 60(b)( 1).

          We agree with Cochrane and Luksha that the superior court lacked personal jurisdiction

over   them and, therefore, the first                default judgment        was    void.     As for the second default

judgment, however, the record shows that Von Kleist complied with the long arm statute' s

service requirement when he personally served Cochrane with the summons and complaint on

February     18; thus, the      second       default judgment is         not void as     to Cochrane.       The record also

12
     RCW 4.28. 185.
Consolidated Nos. 43138 -6 -II (with 43718 -0 -II, 43885 -2 -II, 43318 -4 -11, 43335 -4 -II, 43425 -3 -II)

shows that Von Kleist neither named nor attempted to serve Luksha with the second motion for

default.

                                                I. PERSONAL JURISDICTION

           Cochrane and Luksha first argue that both default judgments were void for lack of

personal jurisdiction because ( 1) Von Kleist had not personally served them with his summons

and complaint as required by Washington' s long arm statute; and ( 2) thus, the superior court

erred   in   denying   their     motion    to   vacate   default judgments      under   CR 60( b)( 5).       Von Kleist

counters that the Agreement' s forum selection ( Washington) clause rendered Washington' s long

arm statute inapplicable; and, therefore, service by mail under CR 4( i)( 1)( D) established personal

jurisdiction. 13

           We hold that because Cochrane                 and   Luksha did   not   consent   to   service    by   mail, (   1)

Washington' s       long   arm   statute governed service of process over             them, ( 2) Von Kleist did not

properly serve them in person outside the state with his first motion for default so as to confer

personal jurisdiction, and ( 3) the first default judgment was void for lack of personal jurisdiction.

We -
   further hold that the superior court similarly lacked jurisdiction to enter the -second default

judgment     as   to Luksha.      Finally we hold that the superior court did not lack jurisdiction over

Cochrane to enter the second default judgment; therefore, we disagree with his assertion that the

second default judgment was void as to him.

13
     Von Kleist asserts that because CR 4( i)(1)( D) controls, instead of the long arm statute, no
affidavit    was    necessary to show an attempt to serve Defendants in Washington. See RCW
4. 28. 185( 4).    See also, contra, RCW 4. 28. 185( 2), which allows personal service outside the state
on a    defendant    with minimum      Washington         contacts, and subsection ( 4),    which requires the filing
of an    affidavit   of such     service   stating that "      service cannot   be   made within    the    state."   RCW
4. 28. 185( 4). See also RCW 4.28. 180.

                                                                G0,
Consolidated Nos. 43138 -6 -II (with 43718 -0 -II, 43885 -2 -II, 43318 -4 -II, 43335 -4 -II, 43425 -3 -II)

                A. Standard of Review; Personal Jurisdiction over Nonresident Defendant

          Generally, we review for abuse of discretion a superior court' s ruling on a motion for

relief   from judgment           under    CR 60( b).     Showalter v. Wild Oats, 124 Wash. App. 506, 510, 101 P.3d
867 ( 2004).       A superior court abuses its discretion if it exercises discretion without tenable

grounds or reasons. State ex. rel. Carroll v. Junker, 79 Wash. 2d 12, 26, 482 P.2d 775 ( 1971).

          We review de novo, however, a trial court' s denial of a motion to vacate a default

                                                   14
judgment for lack            of   jurisdiction.           Ralph'   s    Concrete    Plumbing,     Inc., v. Concord Concrete

Pumps, Inc., 154 Wn.              App.    581, 585, 225 P.3d 1035 ( 2010).               CR 60( b)( 5) permits relief from a

final judgment that is            void.    A default judgment entered against a person over whom the court

has no personal jurisdiction is void, and a court has a nondiscretionary duty to vacate it. Scott v.

Goldman, 82 Wn.              App.    1,    6, 917 P.2d 131,            review    denied, 130 Wash. 2d 1004 ( 1996); In re

Marriage ofMarkowski, 50 Wash. App. 633, 635, 749 P.2d 754 ( 1988).

          A superior court has personal jurisdiction over an out - - tate defendant if (1) the party
                                                                 of s

asserting jurisdiction meets the requirements of Washington' s long arm statute, or ( 2) there is

written    consent      to personal jurisdiction             Ralph' s Concrete Plumbing, 154 Wash. App. at 584 -85

 Washington courts may assert personal jurisdiction over out -of - tate defendant if long arm
                                                                 s

statute   is   satisfied);   Kysar v. Lambert, 76 Wash. App. 470, 484, 887 P.2d 431, review denied, 126
Wash. 2d 1019 ( 1995) (              consent     to   personal    jurisdiction        by   written   agreement);   Voicelink Data

14
     In Morris     v.   Palouse River &            Coulee   City       R. R.,   149 Wash. App. 366, 370 -71, 203 P.3d 1069,
review    denied, 166 Wash. 2d 1033 ( 2009), Division Three analyzed whether the trial court erred in
denying        defendant'    s    CR 60( b)( 5)         motion to vacate for lack of jurisdiction under abuse of
discretion.       The court in Morris, however, reviewed de novo the specific question of whether
service of process complied with                   statutory   requirements         for jurisdiction.   Morris, 149 Wash. App.
at 371.

                                                                        10
Consolidated Nos. 43138 -6 -II (with 43718 -0 -II, 43885 -2 -II, 43318 -4 -II, 43335 -4 -II, 43425 -3 -II)

Servs., Inc.    v.   Datapulse, Inc., 86 Wn.          App. 613, 620, 937 P.2d 1158 ( 1997).    Washington' s long

arm     statute,     RCW 4. 28. 185,         extends the jurisdiction of Washington courts to out - - tate
                                                                                                  of s

defendants, so long as both the long arm statute' s requirements and due process are satisfied. In

re   Marriage of Yocum, 73 Wn.                 App. 699,       702, 870 P.2d 1033 ( 1994).                      The party asserting

jurisdiction under the long arm statute has the burden of establishing its requirements " by prima

facie     evidence."      Yocum, 73 Wn.         App.     at   703.         To establish jurisdiction over an out - state
                                                                                                                 of -

defendant      under     the    long   arm   statute,   a   party         must (      1)    show that the out - state defendant
                                                                                                               of -

                                                                   5, (
committed one of          the   acts   listed in the    statute'           2) personally serve the out - state defendant,
                                                                                                       of -

and ( 3) file an affidavit of service that is " to the effect that service cannot be made within the

state."      RCW 4. 28. 185( 1), (        2), ( 4).     As    an     alternative            to the   long   arm   statute,   a   second,

independent basis for personal jurisdiction is proof of consent to personal jurisdiction. Kysar, 76

Wn.     App.   at   487. A     valid   forum   selection clause           in   a "`   freely   negotiated "'   agreement is proof of

consent     to jurisdiction.       Kysar, 76 Wash. App. at 484 ( quoting Burger King Corp. v. Rudzewicz,

471 U.S. 462, 472 n. 14, 105 S. Ct. 2174, 85 L. Ed. 2d 528 ( 1985)).

                         B. Cochrane and Luksha Did Not Consent to Service - y Mail
                                                                           b

           Section 16 of the Subscription Agreement, into which Von Kleist and the Defendants

entered, contained the following provision for forum selection, consent to personal jurisdiction,

and consent to service by mail:

           This Subscription Agreement and all. rights hereunder shall be governed by, and
           interpreted in        accordance      with,      the laws           of     the    State   of   Washington.        The

           undersigned hereby submits to the nonexclusive jurisdiction of the courts of the
            State of Washington and of the federal courts in the Western District of

15
     The long arm statute lists the acts that permit personal service outside Washington State for
purposes of         establishing   personal    jurisdiction in        our courts.            See RCW 4. 28. 185( 1) -( 6).

                                                                    11
Consolidated Nos. 43138 -6 -II (with 43718 -0 -II, 43885 -2 -II, 43318 -4 -II, 43335 -4 -II, 43425 -3 -II)

           Washington with respect to any action or legal proceeding commenced by any
           person or entity relating to or arising out of this Subscription Agreement, the
           Partnership or the Partnership' s business, and consents to the service of process in
           any such action or legal proceeding by means of registered or certified mail,
           return receipt requested, in care of the address set forth below on the signature
           page or such other address as the undersigned shall furnish in writing to the
           Partnership.

CP    at   1320.    The plain language of this provision, however, bound only Von Kleist to personal
                                                                     16
jurisdiction in Washington             and service      by   mail.

           Cochrane and Luksha, both GALP partners, contend they did not consent to personal

jurisdiction        in    Washington       or     to     service          by   mail   because     the    Agreement'   s   forum

selection/ service by mail provision did not bind the Graoch 161 partnership and, therefore, could

not   bind them         as partners.   They argue that this provision was not binding on them because ( 1)
                                                  17
the Agreement            was    a mere " offer"        from Von Kleist to invest in Graoch 161; ( 2) the parties

                                                                                                                   18
intended that the Agreement                would        bind only Von Kleist, the              sole " undersigned "       to the

Agreement; ( 3)          neither they nor any other Graoch 161 agent signed the Agreement; and ( 4)

Graoch 161 did not assume the obligations stated in the Agreement, such as the forum selection

and service        by   mail provision.   19- We agree. - - - -

16
     We disagree with the superior court' s ruling that Section 16 of the Agreement governed all
parties'     selection         of   Washington     as    a    forum        and   constituted    all   Defendants'   consent   to

Washington court jurisdiction, including service by mail.
17
     Br. of Appellant at 28.

18 Br. of Appellant at 29.

19 Von Kleist counters that because Cochrane and Luksha were partners of various Graoch
       including Graoch 161 and GALP, ( 1) they were bound by the actions of GALP' s other
entities,

partners, including Graoch 161' s acceptance of the Agreement; and ( 2) because all Defendants
were third - arty beneficiaries of the Agreement that Von Kleist entered into with Graoch 161,
           p
the Agreement should be binding on them.
                                                                     12
Consolidated Nos. 43138 -6 -II (with 43718 -0 -II, 43885 -2 -II, 43318 -4 -II, 43335 -4 -II, 43425 -3 - II)

           A valid contract requires mutual assent, generally in the form of an offer and an

acceptance.          Yakima County ( W. Valley) Fire Prot. Dist. No. 12 v. City of Yakima, 122 Wash. 2d
371, 388 -89, 858 P.2d 245 ( 1993).                       In interpreting contracts, Washington courts follow the

 objective       manifestation         test"    for      contract    formation.     Wilson Court Ltd. P' ship    v.   Tony

Maroni' s, Inc., 134 Wash. 2d 692, 699, 952 P.2d 590 ( 1998). A court determines the parties' intent

by focusing on their objective manifestations as expressed in the agreement. McGuire v. Bates,

169 Wash. 2d 185, 189, 234 P.3d 205 ( 2010). A court will not read into a contract that is otherwise

clear and unambiguous.                Mayer    v.   Pierce       County   Med. Bureau, Inc.,   80 Wash. App. 416, 420, 909
P.2d 1323 ( 1995).

           The plain language of Section 16 of the Agreement expresses no intent to bind Graoch

161 (    and   its   partners)   to   service   by       mail.    Rather, under this provision, only " the undersigned"

 Von Kleist) must accept service by mail:

           The undersigned hereby submits to the nonexclusive jurisdiction of the courts of
           the State of Washington and of the federal courts in the Western District of
           Washington with respect to any action or legal proceeding commenced by any
           person or entity relating to or arising out of this Subscription Agreement, the
           Partnership or the Partnership' s business, and consents to the service of process in
           any such action or legal proceeding by means of registered or certified mail,
           return receipt requested, in care of the address set forth below on the signature
           page or such other address as the undersigned shall furnish in writing to the
           Partnership.

CP   at   1320 ( emphasis        added).       This reference to the " undersigned" unambiguously refers to Von

Kleist, who signed as the sole subscriber and who was the only party who signed the Agreement
                                                    20
in   a   binding     contractual      capacity.           The last   clause of    Section 16 — " such other address as the

20 Pioch, the only other person who signed the Agreement, signed only as a witness, not as a
Graoch 161 agent in a contractual capacity.

                                                                      13
Consolidated Nos. 43138 -6 -II (with 43718 -0 -II, 43885 -2 -II, 43318 -4 -II, 43335 -4 -II, 43425 -3 - II)

undersigned shall               furnish in writing to the         Partnership " —further demonstrates the parties' intent

that the    service       by     mail provision was            to bind only " the   undersigned,"   namely Von Kleist, and
                                                         21
not " the    Partnership" ( Graoch               161).        CP at 1320 ( emphasis added).

            Although the Agreement contained a blank signature line for Gray, neither Gray nor any

Graoch 161           or   GALP            representative signed      the Agreement.     Again, Pioch signed, but only as a

     w] itness."      CP        at    1321.      Accordingly, the service by mail provision did not bind either

Cochrane        or    Luksha; instead, it bound only the "                      undersigned,"   namely Von Kleist, to the

Agreement          and    its   provisions.      22 Because the Agreement did not bind Luksha and Cochrane, they

did not consent to service by mail and, therefore, Washington' s long arm statute governs service

of process here. 23

                            C. Service of Process under Washington' s Long Arm Statute

            Proper service of process is basic to personal jurisdiction. Pascua v. Heil, 126 Wash. App.
520, 526, 108 P.3d 1253 ( 2005).                        To subject defendants located outside our state to state court

21
     See,   e. g.,   Oltman          v.   Holland Am. Line USA, Inc., 163 Wash. 2d 236, 250, 178 P.3d 981 ( 2008)
 forum selection clause not binding on third party who did not agree to the contract containing
the clause).

22 Because we hold that the Agreement bound only Von Kleist, and not Graoch 161, we do not
address whether the Agreement bound Cochrane and Luksha under partnership theory or third
party beneficiary theory.
23
       Cochrane           and        Luksha     concede       that   the    GALP    partnership "   accepted"   Von   Kleist' s
Subscription Agreement when GALP President Gray acknowledged receipt of Von Kleist' s
 1, 012, 000. Br. of Appellants at 28. This acceptance of Von Kleist' s offer to buy in as a Graoch
161 partner did not, however, constitute acceptance of the service by mail obligation under the
Agreement, which, again, by its plain terms bound only the " undersigned," Von Kleist. CP at
1320.

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                                                                                                                         24
jurisdiction, Washington'     s    long   arm statute,    RCW 4. 28. 185,    requires personal service on        them.

Cochrane and Luksha are Canadian citizens residing in Canada; thus, our long arm statute

required personal service to confer jurisdiction over them in Washington courts. RCW 4. 28. 185.

          Cochrane and Luksha assert that Von Kleist failed to comply with Washington' s long

arm statute because ( 1) he served them by mail instead of serving them in person as the statute

requires; and ( 2) he failed to file the statutorily required affidavits of service before the superior

court granted both default judgments. Cochrane and Luksha are correct that before obtaining the

first default judgment, Von Kleist did             not    personally   serve   them.    Instead, Von Kleist served

Cochrane     and   Luksha   with   his    summons and complaint        by   certified mail.   25 When Cochrane and

Luksha did not respond, the superior court granted Von Kleist' s motion and entered the first

default judgment      against     them     on   January   27, 2010.    Because Von Kleist did not personally

          of state
serve out -  -        defendants Cochrane          and    Luksha,   as required   by   the   long   arm statute, (   1) Von

Kleist failed to satisfy the long arm statute service requirements; and ( 2) as a result, the superior

court lacked personal jurisdiction over Cochrane and Luksha to enter the first default judgment

against them.

24
     RCW 4. 28. 185( 2) states:
          Service of process upon any person who is subject to the jurisdiction of the courts
          of this state, as provided in this section, may be made by personally serving the
          defendant outside this state, as provided in RCW 4. 28. 180, with the same force
          and effect as though personally served within this state.

25
   Von Kleist argues that ( 1) the long arm statute personal service requirement did not apply here
because Cochrane and Luksha contractually consented to service by mail; and ( 2) therefore, CR
4( i)( 1)( D)' s service by mail provision controlled instead. We disagree. Because we hold that the
Agreement' s forum selection and consent to service by mail provision did not bind the Cochrane
and Luksha to accept service by mail, we do not further address this argument.

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         For purposes of the second default judgment, however, Von Kleist complied substantially

with the long arm statute to confer personal jurisdiction over Cochrane in Washington courts.

Cochrane and Luksha do not dispute that before the superior court entered the second default

judgment, Von Kleist had personally        served     his   summons and complaint on        Cochrane.   Instead,

Cochrane and Luksha contend that the second default judgment was void for lack of personal

jurisdiction over them because ( 1) Von Kleist failed to file a timely affidavit of inability to serve

Cochrane in Washington,         as   required   under    RCW 4. 28. 185( 4);     and (   2) Von Kleist did not

personally serve Luksha.

         We first dispose     of   Cochrane     and   Luksha' s   second   point:   Von Kleist did not name

Luksha in his second motion for default judgment; nor did the second default judgment list

Luksha   as a   debtor.   Therefore, to the limited extent that the second default judgment arguably

included Luksha, the superior court had no personal jurisdiction over him; and, other than

ordering Luksha' s name stricken from the judgment summary, we do not further address the

second default judgment as to him.

         We- next   address   Cochrane   and    Luksha' s first   point—   whether VonVon Kleist timely filed an

affidavit of inability to serve Cochrane in Washington to satisfy the long arm statute' s

requirement.     Personal service outside Washington state is valid under the long arm statute only

when an affidavit is made and " filed to the effect that service cannot be made within the state" on

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                                                        26
the   named   defendant.     RCW 4. 28. 185( 4).             If a plaintiff has not complied with this affidavit

requirement, then there is no personal jurisdiction over the named defendant and any judgment

entered against       that defendant   is   void.   Sharebuilder Sec. Corp. v. Hoang, 137 Wash. App. 330,

335,    153 P.3d 222 ( 2007).         The   standard     for meeting this RCW 4. 28. 185( 4)       affidavit

requirement, however, is substantial and not strict compliance. Barr v. Interbay Citizens Bank of

Tampa, Fla., 96 Wash. 2d 692, 696, 649 P.2d 827 ( 1982).

         Here, as Cochrane and Luksha acknowledge, Von Kleist personally served Cochrane on

February 18, 2010. Von Kleist' s affidavit of service on Cochrane in Canada, and Pidgeon' s later

declaration in support of Von Kleist' s motion for default judgment against international

defendants,    established   that Cochrane is       a   Canadian    citizen   residing in Toronto, Ontario.   Thus,

Von Kleist' s affidavit of service as to Cochrane substantially complied with the long arm

statute' s requirement that the affidavit of service include a statement " to the effect that service

cannot be made within the state" of Washington. RCW 4.28. 185( 4).

         Cochrane and Luksha incorrectly assert, however, that Von Kleist waited until January 5,

2011, to file his affidavit27, which; therefore, was untimely because the statute required that it be

26 It is caselaw, not the long arm statute, that mentions filing of such affidavit should occur
 before" the court enters judgment. Sharebuilder Sec. Corp. v. Hoang, 137 Wash. App. 330, 334-
35, 153 P.3d 222 ( 2007);       see   also   RCW 4. 28. 185( 4).       But neither Sharebuilder nor any other
case of which we are aware specifically addresses and holds that such affidavit is insufficient if
filed on the same day as judgment is entered, as was the case here, regardless of whether it is
filed immediately before or after the judgment.

27 The January 5, 2011 affidavit, to which Cochrane and Luksha refer, is Pidgeon' s affidavit
about service on the out - - tate defendants, filed in response to defendants' motion to vacate
                         of s
under   CR 60( b)( 5).     Pidgeon' s affidavit includes the timely May 10, 2010 affidavit of service as
to Cochrane.

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filed before the superior court entered default judgment on January 27, 2010, or May 10, 2010.28

On the contrary, the record shows that Von Kleist filed his affidavit of service on Cochrane on

May 10, 2010, the same day the superior court entered the second default judgment against

Cochrane.            We hold that ( 1)      this affidavit' s filing substantially complied with the long arm
          29
statute        to    confer personal   jurisdiction   over   Cochrane; ( 2) the superior court, therefore, had

personal jurisdiction over him; and ( 3) the second default judgment was not void as to Cochrane

                               30
for lack       of jurisdiction.

                                            II. CR 60( b)( 1) Motion To Vacate

           In the alternative, Cochrane and Luksha argue that even if the superior court had personal

jurisdiction over them, the superior court erred in denying their motion to vacate the default

judgments           under   CR 60( b)( 1)    because there were procedural irregularities in entering these

judgments. Having already held that the first default judgment was void as to both Cochrane and

Luksha         and   should   have been      vacated under   CR 60( b)( 5),   we need not reach their argument

about     irregularities in the first default judgment.           Thus, we address only whether the superior

court erred in denying their CR 60( b)( 1) motion to vacate the second default judgment, which

under our holding above, was potentially valid only as to Cochrane.

28 Moreover, the cases Cochrane and Luksha cite are distinguishable and do not apply here.
These cases involved filing affidavits months after the entry of the default judgment, which is not
what happened here.

29 RCW 4. 28. 185( 4).

30 As previously explained, however, the superior court did not have personal jurisdiction over
Luksha and, thus, we remand to remove his name from the judgment summary in the second
default judgment.

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          Cochrane           and   Luksha      argue      that the        following " irregularities"        occurred: (   1) The superior

court granted the second default judgment without previously amending or vacating the first

default judgment; ( 2)             the superior court granted the second default judgment without previously

securing      an    entry     of   default     against          Luksha;       and (   3)    Cochrane and Luksha had meritorious

defenses to Von Kleist' s               claims.      Br.    of   Appellants        at   40.    The exclusive procedure for attacking

an allegedly defective judgment is by appeal from the judgment, not by appeal from denial of a

CR 60( b)      motion.         Bjurstrom        v.   Campbell, 27 Wn.                 App.     449, 451, 618 P.2d 533 ( 1980).          CR

60( b) is     not   a   substitute       for   appeal.          Bjurstrom, 27 Wn.               App.    at   451.   An unappealed final

judgment cannot be restored to an appellate track by means of moving to vacate and then

appealing the denial of the motion. State v. Gaut, 111 Wash. App. 875, 881, 46 P.3d 832 ( 2002).
                                                                                                                            31
          Because Cochrane               and    Luksha did            not appeal        the second     default judgment,         the validity

or   irregularity       of   its entry is   not      before      us   here.    Instead, we have before us their appeal of only

the superior court' s denial of their motion to vacate the second default judgment under CR

60( b)( 1).    In this more limited challenge, they fail.

                                                           A. Standard of Review

          On       review      of an     order       denying          a   CR 60( b)        motion to vacate a judgment, only the

propriety of the motion' s denial, not the impropriety of the underlying judgment, is before us.

Gaut, 111 Wn.            App.      at   881.    We will not disturb a superior court' s decision on a motion to

vacate a      default judgment            unless      the   superior court            has     abused   its discretion. Morin v. Burris,

31
     RAP 5. 2( a) requires that notice of appeal be filed within 30 days of entry of the judgment in
the   superior court.           Cochrane and Luksha did not file direct appeals from the superior court' s
January       2010 default judgment                  or   its   May        2010 default judgment.             Instead, they waited until
January 2011 and filed.a CR 60( b) motion to vacate these default judgments.

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160 Wash. 2d 745, 753, 161 P.3d 956 ( 2007).                      A superior court abuses its discretion if it exercises

discretion based on untenable grounds or reaches a decision based on untenable reasons. Morin,
160 Wash. 2d at 753.

                                                 B. No Abuse of Discretion

              Cochrane and Luksha argue that the superior court abused its discretion in denying

their   motion      to vacate the      second   default judgment in two       respects: (    1) it did not first vacate the

prior default judgment, which failure constitutes an " irregularity" warranting grant of their CR
                                                                                                                32
60( b)( 1)    motion     to   vacate   the   second   default judgment;     and (   2)   although   the White         factors do

not apply to a claim of irregularity, if these factors did apply here, Cochrane and Luksha had

 meritorious defenses" to Von Kleist' s claims, which support vacation of the default judgment as

a matter of        equity. 33   Br. of Appellants at 44. These arguments fail.

              Irregularities         under   CR 60( b)( 1)      are those relating to failure to adhere to some

prescribed rule or mode of proceeding. In re Guardianship ofAdamec, 100 Wash. 2d 166, 174, 667
P.2d 1085 ( 1983).             Cochrane and Luksha fail to provide any authority to support their position

that a superior court cannot issue a second default judgment without first vacating a previously

32
     White    v.   Holm, 73 Wash. 2d 348, 352, 438 P.2d 581 ( 1968).                  Typically, we evaluate a motion to
vacate       under    CR 60( b)( 1)      under   the four White factors,        which      look to   whether (       1)   there is
substantial evidence            to   support a prima    facie defense to the    claims; (   2) the moving party' s failure
                                                                inadvertence,   surprise, or excusable neglect; ( 3)          the
to   appear    timely    was occasioned         by   mistake,

moving party acted with due diligence after notice of entry of default; and ( 4) no substantial
hardship will result to the opposing party.

33 Cochrane and Luksha also argue that the superior court did not first issue a valid order of
default against Luksha before entering the second default judgment, which failure constituted an
  irregularity" under CR 60( b)( 1). Br. of Appellants at 43. Having already held that the second
default judgment did not apply to Luksha, we do not address this argument.

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                                 34;
entered   default judgment             nor are we independently aware of any such authority. Accordingly,

Cochrane and Luksha fail to establish that the superior court' s entry of the second default

judgment was an irregularity warranting vacation under CR 60(b)( 1).

           Focusing primarily on alleged equities, Cochrane and Luksha next contend that their

 meritorious defenses" to Von Kleist' s claims met the requirements for setting aside a default
                                                         35
judgment    under       the   four -
                                   part    White test.         Br.    of   Appellants      at   44.   Yet they correctly
                                                                                                                36
acknowledge       that this White four -
                                       part test does           not control a claim of          irregularity.        We agree

that Washington law is clear that vacating a default judgment for irregularity does not hinge on

whether    the   defendant      can    show a meritorious       defense.      See Kennewick Irrigation Dist. v. 51

Parcels of Real Property, 70 Wash. App. 368, 371, 853 P.2d 488, review denied, 122 Wash. 2d 1027

 1993) ( White factors do         not   apply to   alleged    irregularity   under   CR 60( b)( 1)).     But we disagree

that the    White factors apply to Cochrane                   and    Luksha'   s   claim   of    irregularity.       See,   e. g.,

Mosbrucker       v.   Greenfield Implement, Inc., 54 Wn.             App. 647, 652,    774 P.2d 1267 ( 1989) (        a claim

of irregularity is not controlled by the test set out in White, which applies to cases involving

excusable neglect or          inadvertence).    We hold that Cochrane and Luksha fail to establish that the - -

superior court abused its discretion in denying their motion to vacate the second default

judgment    under      CR 60( b)( 1).      Therefore, we affirm the superior court' s denial of this motion;

nevertheless, for reasons previously explained, we agree that Luksha should not have been

included in this       second    default judgment     and     that   his   name should     be   stricken on remand.          We

34 The cases that Cochrane and Luksha cite do not support this proposition; rather, they address
collateral issues.

31 See n.34.

36 See, e.g., CR 60(b)( 1).
                                                               21
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reverse the superior court' s denial of Cochrane and Luksha' s motion to vacate the first default

judgment,    entered   January 27,   2010.   We affirm the superior court' s denial of their motion to

vacate the second default judgment entered May 10, 2010, with the exception of remanding to

strike Luksha' s name from the third page of the second default judgment.

        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.

                                                          unt, J.

We concur:

                                                     22