Mid-City Materials, Inc. v. Heater Beaters Custom Fireplaces

• Decision Date: 16 January 1984
• Docket Number: MID-CITY,No. 10245-1-I,10245-1-I
• Citation: 36 Wn.App. 480,674 P.2d 1271
• Court: Washington Court of Appeals
• Parties: MATERIALS, INC., a Washington corporation, Respondent, v. HEATER BEATERS CUSTOM FIREPLACES, a partnership; Richard Murchison and Ann Murchison, husband and wife, Defendants, Fred G. Murchison and Ethel Murchison, husband and wife, Appellants, and State Farm Fire & Casualty Insurance Company, Defendant.

Page 480

36 Wn.App. 480

674 P.2d 1271

MID-CITY MATERIALS, INC., a Washington corporation, Respondent, v. HEATER BEATERS CUSTOM FIREPLACES, a partnership; Richard Murchison and Ann Murchison, husband and wife, Defendants Fred G. Murchison and Ethel Murchison, husband and wife, Appellants and State Farm Fire & Casualty Insurance Company, Defendant.

No. 10245-1-I.

Court of Appeals of Washington Division 1.

Jan. 16, 1984.

As Amended Jan. 24, 1984.

James A. Henry, L.W. Michael Kahn, Seattle, for defendants.

Terrance L. Burns, Kent, for respondent.

ANDERSEN, Chief Judge.

FACTS OF CASE

Defendants Fred and Ethel Murchison appeal from an order denying their motion to vacate a $15,091.89 default judgment entered against them.

This action arises out of the operation of a fireplace Mid-City Materials, Inc., as plaintiff, brought this lawsuit against the fireplace company, the son and daughter-in-law, their contractor's registration act surety (State Farm Fire and Casualty Insurance Company) and the parents. The suit was on an allegedly overdue $13,345.53 installment note bearing only the daughter-in-law's name and signature, and on an allegedly dishonored check from the fireplace company, bearing the printed names of "Richard or Ann Murchison" and signed by Ann Murchison. Both were apparently given to the plaintiff for masonry supplies purchased by the fireplace company. In its suit, plaintiff alleged that the fireplace company was a partnership and that all four of the Murchisons were partners therein.

                business called Heater Beaters Custom Fireplaces, which is operated by Richard and Ann Murchison, the son and daughter-in-law of Fred and Ethel Murchison.   For convenience, we shall refer to those parties herein as respectively, the son, daughter-in-law and parents, and will refer to Heater Beaters Custom Fireplaces as the fireplace company
                

The plaintiff obtained a default judgment against all of the defendants except the surety company. The son and daughter-in-law initially appeared through counsel but did not contest the judgment against them; they also filed for bankruptcy. The parents did not appear in the action until after judgment was entered and after they had been served with process in supplemental proceedings whereby the plaintiff sought to enforce its judgment against them.

When the parents finally did appear through counsel, they moved pursuant to CR 60 to vacate the plaintiff's default judgment against them. The father's affidavit supporting the parents' motion to vacate states that they were never served with summons and complaint and had no notice, actual or constructive, of the suit or of the default judgment taken against them. The affidavit also denied that the parents were partners of the son and daughter-in-law in the fireplace business. The parents filed the daughter-in-law's The parents' motion to vacate the default judgment against them was denied. The Order Denying Motion To Vacate Default Judgment set forth the trial court's reasoning for its decision:

affidavit to this same effect.

1.1 This Court obtained personal jurisdiction over the [parents] by service of process upon the Contractor Registration Section in accordance with R.C.W. 18.27.040.

1.2. This Court also obtained personal jurisdiction by service of process upon [the son and daughter-in-law], whom the Court finds to have been partners by estoppel with [the parents] in accordance with R.C.W. 25.04.160(1).

1.3 The Court finds that [the parents] have failed to establish possession of a meritorious defense in accordance with Civil Rule 60, nor is there any other reason based on the facts presented before this court that [the parents are] equitably entitled to relief from the operation of the judgment.

The parents appeal and the plaintiff cross appeals seeking attorneys' fees.

One ultimate issue is presented.

ISSUE

Did the trial court err by refusing to vacate the judgment against the parents?

DECISION

CONCLUSION. Since the trial court had not acquired in personam jurisdiction over the parents by proper service of process on them, the trial court erred when it declined to vacate the default judgment against the parents.

In personam jurisdiction obtains upon the service of process. RCW 4.28.020; Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565 (1877); Williams v. Steamship Mut. Underwriting Ass'n, 45 Wash.2d 209, 227, 273 P.2d 803 (1954).

In serving resident individuals such as the parents, in personam jurisdiction is customarily obtained by serving "the defendant personally, or by leaving a copy of the summons at the house of his usual abode with some person of suitable age and discretion then resident therein." RCW 4.28.080(14). See CR 4(d)(2). The plaintiff apparently thought it had obtained jurisdiction over the parents in this manner, and the affidavits of service it filed showed residence service on the parents at their son's residence in Federal Way by service of summons and complaint on their son at that address. The plaintiff conceded later, however, that at all times herein the parents did not reside with their son in Federal Way but resided in Kent. Such attempted service on the parents was, therefore, invalid for any purpose.

We turn to the various reasons set forth by the trial court for declining to vacate the judgment, as quoted above.

The contractors' registration act requires registrants to post a surety bond or cash deposit and provides for substituted service on the registrant and the surety by service of three copies of the complaint on the department of labor and industries. That requirement is contained in RCW 18.27.040, the section relied on by the trial court in finding that the parents were properly served by process thereunder. We disagree. The service provisions of that statute are clearly and specifically limited by the language of the statute to suits brought on the bond. ¹ Here the surety promptly paid the full $4,000 face amount of its bond to the plaintiff and was thereupon dismissed from the case. The substituted service provisions of the statute did not confer jurisdiction on the trial court to enter a personal judgment against the parents.

The trial court's decision that there was a partnership by estoppel under RCW 25.04.160(1), ² and that service on the son and daughter-in-law was personal service on the parents is erroneous in two respects.

Initially, under the conflicting affidavits herein, whether there was a partnership by estoppel or not is a disputed factual issue requiring a trial, and the state of the record herein is not such as would justify the trial court to determine that issue as a matter of law in the manner that it did.

Furthermore, in many situations, while notice to one partner is notice to all, RCW 25.04.120, ³ that does not mean that service on one partner is such service on all partners that an in personam judgment can be taken against partners not personally served.

Service upon a partnership sued in its firm name, when allowable, is expressly covered by local practice provisions, which generally permit the service in such case to be made by leaving a copy of the summons at the usual place of business of the...