Opinion
No. 28811-7-II Consolidated with: No. 29408-7-II.
Filed: September 23, 2003. DO NOT CITE. SEE RAP 10.4(h). UNPUBLISHED OPINION
Appeal from Superior Court of Clark County. Docket No: 01-2-03179-5. Judgment or order under review. Date filed: 04/12/2002.
Counsel for Appellant(s), Arnold Joseph Barer, Attorney at Law, 1000 2nd Ave Ste 1560, Seattle, WA 98104-3602.
Counsel for Plaintiff(s), David Wayne Meyer, Bullivant Houser Bailey P.C., 805 Broadway St. Ste 400, Vancouver, WA 98660-3277.
Counsel for Respondent(s), William Delmar Robison, Caron Colven Robison Shafton LLP, 900 Washington St. Ste 1000, Vancouver, WA 98660.
Ben Shafton, Attorney at Law, 900 Washington St. Ste 1000, Vancouver, WA 98660.
In a wrongful death action, plaintiff Allyn attached defendant Asher's property by an ex parte process based on an allegation of injuries arising from felonious conduct. Asher sold the property to Farhood. After Asher was acquitted, Farhood sought to intervene in the wrongful death suit and, after being denied, instituted a quiet title action to remove the attachment. Meanwhile, Allyn received a judgment for one million dollars from the wrongful death suit and forced a sale of the property. Farhood appeals the confirmation of the sale in the wrongful death suit and the appeal of summary judgment in favor of Allyn in the quiet title action. We hold that Farhood has standing to raise the issue of wrongful attachment and that the ex parte attachment was unconstitutional. We reverse based on the wrongful attachment and remand to quiet title to the property, free and clear of Allyn's interest.
On January 22, 1999, Steven Asher lost control of his car, resulting in serious spine, rib, pelvis, and other injuries to him. His passenger, Joseph Allyn, died. Allyn's widow (Allyn) filed a wrongful death action, and the State brought vehicular homicide and vehicular assault charges against Asher.
Upon filing the complaint in March 1999, Allyn obtained an ex parte writ of prejudgment attachment on some of Asher's real property, including three lots in Washougal, Washington. Allyn received the attachment by alleging, 'the damages for which the action is brought are for injuries arising from the commission of some felony' under RCW 6.25.030(9). The trial court issued an order to show cause why the attachment should not continue, attached a statement of Asher's right to a hearing, and set a hearing date for April 16, 1999. Asher submitted a written opposition to the attachment. But there is no record presented of that hearing and, as Allyn admits, the trial court did not issue any order or findings afterward.
The statute, RCW 6.25.030, is set forth in its entirety below:
The writ of attachment may be issued by the court in which the action is pending on one or more of the following grounds:
(1) That the defendant is a foreign corporation; or
(2) That the defendant is not a resident of this state; or
(3) That the defendant conceals himself so that the ordinary process of law cannot be served upon him; or
(4) That the defendant has absconded or absented himself from his usual place of abode in this state, so that the ordinary process of law cannot be served upon him; or
(5) That the defendant has removed or is about to remove any of his property from this state, with intent to delay or defraud his creditors; or
(6) That the defendant has assigned, secreted, or disposed of, or is about to assign, secrete, or dispose of, any of his property, with intent to delay or defraud his creditors; or
(7) That the defendant is about to convert his property, or a part thereof, into money, for the purpose of placing it beyond the reach of his creditors; or
(8) That the defendant has been guilty of a fraud in contracting the debt or incurring the obligation for which the action is brought; or
(9) That the damages for which the action is brought are for injuries arising from the commission of some felony, gross misdemeanor, or misdemeanor; or
(10) That the object for which the action is brought is to recover on a contract, express or implied.
Asher then negotiated and completed the sale of his three Washougal properties to Farhood during August to September 1999. Farhood learned of the felony-injury attachment and spoke with Asher's criminal defense attorney before purchasing the property.
On May 2, 2000, a jury found Asher not guilty of both vehicular homicide and vehicular assault.
A year later, on May 16, 2001, Farhood attempted to intervene in Allyn's wrongful death suit; he noted that Asher had been acquitted. That trial court denied Farhood's motion to intervene. On August 10, 2001, Farhood then initiated a declaratory judgment action to quiet title. On cross motions for summary judgment, the trial court granted summary judgment in Allyn's favor.
On November 7, 2001, a jury in the wrongful death case found Asher negligent and awarded $1,001,736.13, including costs. Asher appealed. After Allyn collected payment from Asher's insurance policy, the judgment debt remained at $545,829.65 as of January 18, 2002.
On February 22, 2002, Allyn began the process to compel a sale of the Washougal properties by obtaining a writ of execution. Allyn took the properties by bidding $400,000 of the outstanding judgment debt.
I. Declaratory Judgment Action to Quiet Title
On summary judgment, this court follows the same inquiry as the trial court. Summary judgment is appropriate only in the absence of any genuine issues of material fact and when the moving party is entitled to judgment as a matter of law. Wilson v. Steinbach, 98 Wn.2d 434, 437, 656 P.2d 1030 (1982); CR 56(c). Farhood presents arguments that the ex parte attachment procedure is facially unconstitutional. Because we hold that the ex parte attachment was unconstitutional, we need not address his other arguments.
A. Standing
Allyn asserts that Farhood does not have standing to claim constitutional error because there was no harm done. As seen below, Asher suffered harm in the violation of his right to due process in the ex parte proceeding. Farhood, as owner, steps into the same interest in the land that Asher had and stands to suffer the same consequences of the violation loss of the real property because, as assignee of Asher's full title to and interest in the property, Farhood stands in Asher's shoes. See Moore v. Moore, 20 Wn. App. 909, 912, 583 P.2d 1249 (1978), review denied, 91 Wn.2d 1014 (1979). That transfer of interest is complete: Asher could not have brought a quiet title action after conveying to Farhood. Magart v. Fierce, 35 Wn. App. 264, 666 P.2d 386 (1983). Therefore, Farhood has the distinct and personal interest required for standing. Paris Am. Corp. v. McCausland, 52 Wn. App. 434, 759 P.2d 1210 (1988).
Allyn alternatively asserts that Farhood does not have standing to challenge the attachment directly and is barred from doing so indirectly. Allyn looks to the attachment statute itself, RCW 6.25.180(1), which allows a defendant to move the trial court to discharge the attachment if it was improperly issued. Allyn asserts that statutory construction indicates that the identification of the defendant as the actor excludes others from acting. See State v. Delgado, 148 Wn.2d 723, 727-28, 63 P.3d 792 (2003) (court cannot add words to a statute); Bour v. Johnson, 122 Wn.2d 829, 836, 864 P.2d 380 (1993) (articulating a list presumably excludes things not mentioned).
Farhood appropriately responds that older cases have applied the same statute to allow outside parties to attack and vacate attachments. In one case, with practically identical statutory language, a receiver successfully vacated an attachment that a creditor placed on an insolvent company. The company was the defendant in the attachment suit, but the receiver, as an outside party, instituted a separate action. Compton v. Schwabacher Bros. Co., 15 Wn. 306, 312, 46 P. 338 (1896). In another, a bona fide purchaser vacated attachment on real community property held in wife's name, when attachment was only indexed under the husband's name. Anders v. Bouska, 61 Wn. 393, 112 P. 523 (1910). As relevant here, those cases stand for the limited rule that a third party may bring an outside action to challenge an attachment. The Compton court went as far as identifying public policy supporting that idea: attachments affect third parties and those third parties deserve their day in court. Compton, 15 Wn. at 312. Farhood was not a party and did not have that opportunity in the tort suit.
Allyn reads Compton wrongly to hold that only a defendant may vacate attachments. That court held that only a defendant may do so in the action that created the attachment, but other parties may attack the attachment in other actions. In relevant part, that decision reads:
Under the statute already referred to the only parties before the {attachment} court are the parties to the attachment proceedings. It is the 'defendant' who may make the motion, and the court has no jurisdiction therein to determine the rights of other creditors. Plaintiff, as against the defendant, might be entitled to an attachment, but an order sustaining it cannot be held to bar other creditors from asserting its invalidity in a proper proceeding. The creditors of this insolvent corporation, whose representative the respondent is, are entitled to their day in court on the question of the validity of this attachment, and the statute referred to does not contemplate that they may be heard in the proceedings upon motion to discharge. Compton, 15 Wn. at 312 (second emphasis added).
Allyn then contends that res judicata and the doctrine prohibiting collateral attacks of judgments bar Farhood from asserting the attachment's invalidity. Both deal with protecting judgments from relitigation. Neither doctrine is applicable. The attachment is merely a 'place marker.' See BNC Mortgage v. Tax Pros, Inc., 111 Wn. App. 238, 247, 46 P.3d 812 (2002). The attachment is not a final judgment. Thus, consideration under either theory is inapposite.
B. Unconstitutionality of Ex Parte Attachment — RCW 6.25.070(2)
Farhood asserts that the ex parte attachment procedure is unconstitutional. Farhood claims standing as Asher's assignee.
Division One recently confirmed that, absent exigent circumstances, the ex parte procedure for writs of prejudgment attachment is a violation of constitutional due process standards. Van Blaricom v. Kronenberg, 112 Wn. App. 501, 513, 50 P.3d 266 (2002). The Van Blaricom court relied on reasoning first articulated in a review by the United States Supreme Court of a statute virtually identical to Washington's, and that reasoning was later applied to chapter 6.25 RCW by the Ninth Circuit Court of Appeals. See Connecticut v. Doehr, 501 U.S. 1, 15, 111 S.Ct. 2105, 115 L.Ed.2d 1 (1991); Tri-State Dev., Ltd. v. Johnston, 160 F.3d 528 (9th Cir. 1998). We agree.
The due process analysis balances the property owner's interest, the risk of an erroneous decision, and the relative interest held by the claimant and government. In the attachment setting, the property owner has significant interest in keeping clear title; there is a relatively high risk of an erroneous decision based on an unrebutted, low burden; and, the claimant's prejudgment interest in the property is minimal (without showing exigent circumstances) and the government's interest cannot be any greater. Doehr, 501 U.S. at 11-12, 16. All three courts agreed that Washington's ex parte attachment statute, or one practically identical, is unconstitutional.
The question, then, is whether the harm was cured and, if not, what the remedy should be. The Doehr court specifically noted that 'a later hearing . . . would not cure the temporary deprivation that an earlier hearing might have prevented.' Doehr, 501 U.S. at 2. The Van Blaricom court allowed the property owners to pursue relief from the violation of constitutional due process, even though the owners had succeeded in removing the attachment in their pretrial adversarial hearing. Van Blaricom, 112 Wn. App. at 506. Though the harm here may have only lasted the 16 days until the adversarial hearing, the due process violation was complete when Allyn invoked the ex parte attachment. We need not address whether a later hearing could have cured the constitutional problem because there is no record that the hearing took place and no orders were issued from that date from which an appeal could have issued.
The ex parte writs were approved on April 1, 1999. The adversarial hearing was scheduled for April 16, 1999.
Thus, since the writ was unconstitutionally issued, it was not effective. Allyn's judgment itself would have resulted in a lien against the property in the county in which the judgment was recorded. See BNC Mortgage, 111 Wn. App. at 246-47. But, Farhood, not Asher, owned property in question when the judgment was obtained, thus, Allen's judgment never liened the property in question. Farhood holds the property free and clear of any interest by Allyn.
II. Confirmation of Sale on Writ of Execution
Because we hold that there was no valid attachment, the sale on writ of execution was improper. The appropriate remedy is nullifying the attachment, and the court should quiet title to the property in Farhood, free and clear of Allyn's interest.
Having held that the prejudgment attachment is unconstitutional, we do not address the later amendment's validity under another subsection; nor do we address the effect of an acquittal in the felony action.
Reversed and remanded for orders consistent with this opinion.
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 pursuant to RCW 2.06.040, it is so ordered.
MORGAN, J. and QUINN-BRINTNALL, A.C.J., concur.