Colo. Tire Corp. v. Moraglis S.A.
| Decision Date | 01 August 2022 |
| Docket Number | 82633-6-I |
| Parties | COLORADO TIRE CORP., a Washington Corporation, and ABRAHAM HENGYUCIUS, an individual, and THE MARITAL COMMUNITY OF ABRAHAM HENGYUCIUS AND JANE DOE, Appellants, v. MORAGLIS S.A., a Greek Corporation, Respondent. |
| Court | Washington Court of Appeals |
UNPUBLISHED OPINION
Colorado Tire Corporation and its president, Abraham Hengyucius (collectively referred to as CTC), appeal a monetary judgment of $401,210, entered against both after they failed to respond to a summary judgment motion filed by Moraglis, S.A. CTC contends the trial court abused its discretion in denying its request for a CR 56(f) continuance, denying its CR 59 motion for reconsideration, and refusing to consider evidence submitted with that motion. CTC also argues there is insufficient evidence to support the judgment against the corporation and its president personally.
Although the court did not abuse its discretion in refusing to continue the summary judgment hearing or in rejecting CTC's untimely evidence on reconsideration, we nevertheless reverse in part the judgment against CTC and reverse, in its entirety, the judgment against Hengyucius as unsupported by the evidence Moraglis submitted. We remand these issues for further litigation.
Moraglis a Greek corporation based in Patras, Greece, sought to supply tires to the North Atlantic Treaty Organization (NATO) and the Greek Hellenic Army. It contacted CTC, a Washington corporation, through CTC's president, Abraham Hengyucius to purchase tires. After several months of exchanging e-mails regarding the availability of certain types of tires, on December 20, 2019, Moraglis placed an order with CTC for 2,200 tires. When it did so, Moraglis asked CTC to confirm that the tires conformed to a list of "technical details," including a "Speed Index" of "R" and a "Load Capacity Index" of "120/116."[1] It also sought assurance that CTC's tires were suitable for use on cross country roads and highways when mounted on specified vehicles. On December 23 2019, CTC confirmed that its tires met these specifications.
Moraglis Konstantinos, the chief executive officer of the corporation, testified that Hengyucius represented that CTC's tires were suitable for use on the front and back axles of small trucks, that the tires would be manufactured and shipped from the United States, and that the tires would come with an "ECE" certificate indicating that they could be used in Greece.[2] Konstantinos's testimony was corroborated by an e-mail from Hengyucius on July 2019 in which he informed a Moraglis representative that although "[t]he ECE certificate is not immediately available to provide," if Moraglis's end user insisted on the certificate, "it may be provided when we start shipping the tires...."
On December 24, 2019, CTC e-mailed Moraglis a "sales confirmation" document with a set of "Standard Terms and Conditions," in which it confirmed that CTC agreed to sell Moraglis 2,200 steel radial tires, size "235/85R16" with "E-marks designed and produced for using in Greece" at a price of $86.75 per tire.[3] The confirmation also stated that the tires would be "[r]eady for the 1st shipment in 30-90 days after CTC's receipt of prepayment." CTC asked Moraglis to sign and return the document and make a 30 percent prepayment within three days. Moraglis executed the agreement and wired a total of $190,850 to CTC to purchase the tires.
CTC shipped tires from Qingdao, China, in two shipments, on April 16 and April 28, 2020. It appears the tires were available at the Port of Piraeus, Greece, in May 2020. Moraglis forwarded the tires to its end user, NATO, who rejected them as not conforming. NATO indicated the delivered tires had a speed index of "L" instead of "R," and a load capacity index of "132/127," rather than "120/116." It also indicated that the tires were stamped "ST" for "service truck," and "For Trailer Service Only," instead of "LT for "light truck," as it had ordered.
Moraglis notified CTC of the non-conformity and asked it to "make immediate arrangements to take return delivery of the tires" and replace them. In the e-mail, Moraglis stated the replacement tires "must be manufactured in the U.S. as we agreed." CTC did not respond to these demands.
Moraglis filed a complaint against CTC and Hengyucius in King County Superior Court on October 29, 2020. Moraglis alleged breach of contract, breach of express and implied warranties, conversion, and negligent misrepresentation. Moraglis sought monetary damages of $350,850, plus interest and attorneys' fees, against both the corporate entity and its president.
On November 23, 2020, Moraglis notified CTC, through counsel, that it could not find anyone to purchase the non-conforming tires and that "there is not a market for [the] tires in Europe." Moraglis stated that it intended to pick up and store the tires and would seek costs associated with the transportation and storage from CTC. Moraglis later informed CTC that the tires might need to be destroyed.
At some point that fall, Hengyucius stopped responding to his own attorney. In mid-January 2021, CTC's counsel withdrew, effective February 1, 2021.
On February 17, 2021, Moraglis filed a four-page motion for summary judgment on all claims, supported by Konstantinos's declaration. Konstantinos confirmed that NATO had rejected CTC's tires because they did not conform to its technical specifications. He further testified that CTC failed to respond to Moraglis's request to reimburse Moraglis for port and custom fees, to accept the return of the tires, and to replace them with conforming tires. He identified the company's damages as the purchase price of $190,850, additional damages of $157,296.74 associated with "demurrages[4] charges, port storage charges, and anti-dumping charges," (referred to hereafter as port charges) and another $5,612.59 in costs incurred to transport and recycle the non-conforming tires.
On March 18, 2021, one day before the summary judgment hearing, Hengyucius contacted his former attorney, retained him to respond to the motion, and claimed that he had been ill and unable to deal with the lawsuit. Counsel filed a CR 56(f) request to continue the hearing. The next day, the trial court denied CTC's motion to continue and granted Moraglis's summary judgment motion.
On March 26, 2021, CTC objected to the summary judgment order, claiming that the amount of damages Moraglis requested was unsupported by the record and challenging the basis for Hengyucius's personal liability on any monetary award. The trial court overruled the objections and signed a judgment against CTC and Hengyucius, awarding a total of $401,210 against them.
On April 19, 2021, CTC filed a motion for reconsideration. For the first time, Hengyucius submitted a declaration with exhibits to rebut Moraglis's claims as to liability and damages. The trial court denied the motion for reconsideration. CTC appeals.
CTC's CR 56(f) Request
CTC first argues that the trial court should have granted its request for continuance of the summary judgment hearing to permit it to respond substantively to Moraglis's motion. CTC, however, has not demonstrated any abuse of discretion in denying its requested continuance.
"Whether a motion for continuance should be granted or denied is a matter of discretion with the trial court, reviewable on appeal for manifest abuse of discretion." Trummel v Mitchell, 156 Wn.2d 653, 670, 131 P.3d 305 (2006). "Abuse of discretion is not shown unless the discretion has been exercised upon a ground, or to an extent, clearly untenable or manifestly unreasonable." Friedlander v. Friedlander, 80 Wn.2d 293, 298, 494 P.2d 208 (1972). CR 56 (f) states:
Should it appear from the affidavits of a party opposing the motion that for reasons stated, the party cannot present by affidavit facts essential to justify the party's opposition, the court may refuse the application for judgment or may order a continuance to permit affidavits to be obtained or depositions to be taken or discovery to be had or may make such other order as is just.
CR 56(f) permits a trial court to continue a summary judgment motion when the party seeking a continuance offers a good reason for the delay. Durand v. HIMC Corp., 151 Wn.App. 818, 828, 214 P.3d 189 (2009). "The trial court may deny a motion for a continuance when (1) the requesting party does not have a good reason for the delay in obtaining the evidence, (2) the requesting party does not indicate what evidence would be established by further discovery, or (3) the new evidence would not raise a genuine issue of fact." Bldg. Indus. Ass'n of Wash. v. McCarthy, 152 Wn.App. 720, 742-43, 218 P.3d 196 (2009) (quoting Butler v. Joy, 116 Wn.App. 291, 299, 65 P.3d 671 (2003)).
Denial is proper if based on any one of these factors. Pelton v. Tri-State Mem'l Hosp., Inc., 66 Wn.App. 350, 356, 831 P.2d 1147 (1992).
In this case, neither CTC nor Hengyucius explained why they failed to respond to their attorney or to the dispositive motion. CTC's attorney submitted a declaration recounting Hengyucius's non-responsiveness, his client's last-minute resurfacing, and the hearsay claim that Hengyucius had been ill "for the last few months and unable to attend to this matter as a result." Hengyucius, however, did not explain what his illness was, what treatment, if any, he had obtained, or why he could not respond to his own attorney's calls or e-mails.
The trial court denied the continuance request because the motion was untimely, improperly noted, and "just generally a request for more time." The court indicated that the showing was inadequate "to comply with the rule." The trial court's ruling was based on tenable reasons. A...
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