Brickum Inv. Co. v. Vernham Corp.

• Decision Date: 12 January 1987
• Docket Number: No. 15676-4-I,15676-4-I
• Parties: BRICKUM INVESTMENT COMPANY, a Washington partnership, Respondent, v. VERNHAM CORPORATION, a Washington corporation, d/b/a Wendy's of Bellingham, Defendant, George S. Land and Linda Cheryl Land, husband and wife, Appellants.
• Court: Washington Court of Appeals

Page 517

46 Wn.App. 517

731 P.2d 533

BRICKUM INVESTMENT COMPANY, a Washington partnership, Respondent, v. VERNHAM CORPORATION, a Washington corporation, d/b/a Wendy's of Bellingham, Defendant George S. Land and Linda Cheryl Land, husband and wife, Appellants.

No. 15676-4-I.

Court of Appeals of Washington Division 1.

Jan. 12, 1987.

[731 P.2d 534] Sam W. Peach, Bellingham, for appellant George and Linda Land.

James W. Abbott, Abbott Curtis Galvin & Doyle, Seattle, for respondent Brickum Inv. Co.

WEBSTER, Judge.

The appellants, George and Linda Land, appeal from the order denying their motion to vacate a default judgment entered in an unlawful detainer action. They contend that the trial court erred in denying the motion because the judgment was void for want of jurisdiction. We agree with the Lands, and therefore reverse the trial court's order denying the motion to vacate.

FACTS

Brickum Investment Company (Brickum) held a ground lease on commercial property located in Whatcom County. In May 1979, Brickum agreed to assign its tenant's interest under the ground lease to George Land. George Land and Brickum set forth the terms of the assignment in a document entitled "Agreement to Build and Lease" (the Agreement). Under the Agreement, Brickum was to build a building on the leased property for George Land, and then act as Land's landlord.

The Agreement allowed Land to sublet or assign his interest in the lease. Such an assignment, however, would not relieve him of his obligations to Brickum. The Agreement contains the following clause:

It is mutually understood that regardless of any sublease or assignment, all obligations of Mr. Land herein will remain in full effect.

Land had possession of the subject property until July 1980. At that time, George and Linda Land agreed to assign all their interest under the Agreement to the Vernham Corporation (Vernham). Brickum consented to the assignment, but included a proviso:

[P]rovided, however, that approval of such assignment shall not in any manner whatsoever release or relieve said GEORGE S. LAND and LINDA CHERYL LAND from the performance of the obligations arising under [the Agreement].

Brickum received monthly rental payments through the end of 1981. In January 1982, rental payments stopped. In July 1982, Brickum served Vernham and George and Linda Land with notices to pay rent or surrender premises. Rent remained unpaid, and Brickum consequently commenced an unlawful detainer action against Vernham and the Lands. George and Linda Land were served with the summons and complaint by registered mail in Ontario, Canada.

Neither George nor Linda Land appeared to defend the unlawful detainer action. ¹ Therefore, Brickum moved for and received a default judgment against them. The court awarded Brickum two times the rent due ($81,391.66) together with $2,500 in attorney's fees plus $91.75 in costs and disbursements.

Two years after the default judgment was entered, the Lands moved to vacate the judgment. They advanced several arguments in support of their motion, among them (1) that they could not be held in an unlawful detainer action because they did not possess the subject property, (2) that Linda Land was not a party to the underlying lease agreement, and (3) that they did not receive proper service of the summons and complaint.

STANDARD OF REVIEW

The Lands assert that the trial court had no jurisdiction over them, and that the judgment was therefore void. CR 60(b), which addresses relief from a judgments and orders, provides:

On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order, or proceeding for the following reasons:

* * *

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(5) The judgment is void;

There is some dispute over the proper standard of review applied to the denial of a CR 60(b)(5) motion. See Allison v. Boondock's, Sundecker's & Greenthumb's, Inc., 36 Wash.App. 280, 284, 673 P.2d 634 (1983). In Kennedy v. Sundown Speed Marine, Inc., 97 Wash.2d 544, 647 P.2d 30, cert. den'd, 459 U.S. 1037, 103 S.Ct. 449, 74 L.Ed.2d 603 (1982), two members of a badly-fragmented court, in a plurality opinion, held that the trial judge had discretion to grant or deny a vacation of judgment when the ground for vacation was lack of personal jurisdiction. Because such a view is contrary to the principle that there is no room for discretion when a judgment is void for want of jurisdiction, the Kennedy holding has been criticized. See Kennedy, at 549, 647 P.2d 30 (Utter, J. dissenting); 4 L. Orland, Wash.Prac. § 5713 (3d ed. 1983 & Supp.1986).

That criticism is well-founded. A judgment entered without jurisdiction is void. Mid-City Materials, Inc. v. Heater Beaters Custom Fireplaces, 36 Wash.App. 480, 486, 674 P.2d 1271 (1984); Bergren v. Adams Cy., 8 Wash.App. 853, 856, 509 P.2d 661, review den'd, 82 Wash.2d 1009 (1973). Consequently, trial courts have a "nondiscretionary duty" to grant relief from default judgments entered by courts without jurisdiction. Thos. P. Gonzalez Corp. v. Consejo Nacional de Produccion de Costa Rica, 614 F.2d 1247, 1256 (9th Cir.1980). See Mid-City Materials, Inc. (analyzing a trial court's refusal to vacate a judgment under CR 60(b)(5) without entering into an analysis of the trial court's discretion and thereby implicitly adopting a more

                straightforward "error of law" test).   The question before us, therefore, is not whether the trial court abused its discretion, but whether the judgment is void for want of jurisdiction
                

POSSESSION

In an unlawful detainer action, a default judgment must be entered if a party against whom judgment is sought fails to appear and defend the suit against him. RCW 59.12.120. However, a trial court hearing an unlawful detainer action sits as a special statutory tribunal; its jurisdiction is limited to the primary issue of the right of possession, plus incidental issues such as restitution and rent, or damages. Mead v. Park Place Props., 37 Wash.App. 403, 406, 681 P.2d 256 (1984). See Munden v. Hazelrigg, 105 Wash.2d 39, 45-48, 711 P.2d 295 (1985). Prior to entering judgment in an unlawful detainer action, therefore, the court must make a threshold determination of whether or not the defendant is in possession of the subject premises. If he is not, then possession is not in issue and the court is consequently without jurisdiction to hear the action. The Lands contend that the assignment effectively divested them of possession of the subject premises. They conclude that possession was not in issue, and that the trial court, therefore, lacked jurisdiction to enter judgment against them.

One may be held in an unlawful detainer action if he either possesses property in his own stead, or possesses through a subtenant. RCW 59.12.030. In Daniels v. Ward, 35 Wash.App. 697, 669 P.2d 495 (1983), we held that one might be guilty of unlawful detainer where he possesses property through a third party, regardless of whether that person is nominated an "assignee" rather than a "subtenant":

A party need not directly possess the premises to be subject to unlawful detainer proceedings. The statute defining unlawful detainer makes clear that a tenant may be guilty of unlawful detainer without directly possessing the premises. RCW 59.12.030(3) states a tenant "is guilty of unlawful detainer ... [w]hen he continues in...