Newingham v. John Newingham, Kristie Newingham, & Velocity CNC Machining, Inc.

Decision Date23 May 2017
Docket NumberNo. 48818-3-II,48818-3-II
CourtWashington Court of Appeals
PartiesCORY NEWINGHAM, Respondent, v. JOHN NEWINGHAM, KRISTIE NEWINGHAM, and VELOCITY CNC MACHINING, INC., Appellants.

CORY NEWINGHAM, Respondent,
v.
JOHN NEWINGHAM, KRISTIE NEWINGHAM, and VELOCITY CNC
MACHINING, INC., Appellants.

No. 48818-3-II

COURT OF APPEALS OF THE STATE OF WASHINGTON DIVISION II

May 23, 2017


UNPUBLISHED OPINION

LEE, J. — John and Kristie Newingham, as husband and wife, and Velocity CNC Machining, Inc., a Washington corporation, appeal the trial court's findings of fact and conclusions of law. They argue that the trial court erred when it (1) found that all parties were properly served; (2) concluded that the tort of defamation was not established; (3) concluded that the tort of intentional infliction of emotional distress was not established; and (4) concluded that no new contract to pay commissions was entered into. We affirm.

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FACTS

A. FACTS RELEVANT TO CORY'S CLAIMS

1. Cory and Velocity

John Newingham and Cory Newingham are brothers. In August 2012, John1 incorporated his own business, Velocity CNC Machining, Inc. (hereinafter "Velocity"). John is Velocity's president and registered agent, and Kristie is its vice president.

John hired Cory as general manager of Velocity. John, on behalf of Velocity, also offered to pay Cory a 10 percent commission for every customer that Cory brought in for as long as the customer did business with Velocity. Cory accepted the offer by sending out e-mails and began looking for new customers.

Cory testified that there was no termination date to the commission agreement and that his position as general manager of Velocity was separate from the commission agreement. John testified that he made the commission offer to Cory, but the commission payments would stop if Cory's employment at Velocity was terminated.

The commission agreement was not put in writing. Ronnie Newingham, John and Cory's father, testified that he was not sure if a contract ever existed, but John "offered that 10 percent commission to a couple people and Cory was the only one that took him up on it." 1 Verbatim Report of Proceedings (VRP) at 104.

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Cory continued to find customers for Velocity in addition to his role as general manager. On September 19, 2014, after the brothers had an argument, John terminated Cory's employment with Velocity.

2. Family Meeting

On September 21, Ronnie called a family meeting at Cory's house to see if Cory could remain at Velocity because Cory was distraught. Ronnie testified that he received a call from Amanda Newingham, Cory's wife, saying Cory was threatening suicide and asked John to talk to Cory. He set up a meeting after that. Ronnie, John, Cory, Amanda, and their brother-in-law, Russell Ferguson, attended the meeting.

John stated that he went over to Cory's house because he was told that Cory was threatening suicide. Cory denied ever threatening to commit suicide. Ferguson also testified that he did not hear Cory make any mention of suicide.

Shortly after John got to the house, he said Amanda started screaming at him. John tried to leave, but Ronnie grabbed his arm and asked him to stay. John said there was no way he was going to let Cory go back to work. However, he did agree to continue paying Cory's commission in order to get him on his feet, but he did not say for how long. John agreed to continue to pay commissions because Cory was threatening suicide, Ronnie was upset, Ferguson was upset, and "the only way to make the situation better was to offer some help." 1 VRP at 140. Ronnie testified that John wanted to work out a peaceful separation at the meeting and offered to continue to pay Cory's commission. Ronnie said no one forced John to pay Cory the commissions. Ferguson also testified that no one forced John to pay Cory the commissions. John subsequently paid Cory two commission checks and then stopped.

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3. Service of Process

On January 9, 2015, Cory filed a lawsuit against John, Kristie, and Velocity alleging a breach of oral contract and other claims. The summons and complaint was served on John and Kristie's 15-year-old daughter at their residence in Orting, Washington.

On January 16, defense counsel filed a notice of appearance on behalf of John, Kristie, and Velocity. The notice of appearance specified "to serve all future pleadings or papers, except process, upon said attorney at his address below stated." Clerk's Papers (CP) at 14.

On February 24, Cory filed an amended complaint. The amended complaint was an exact copy of the original complaint except for the inclusion of the cause number assigned by the trial court. The amended complaint was mailed to John, Kristie, Velocity, and their attorney via first class mail. John signed the certified return receipt.

On April 9, John, Kristie, and Velocity responded by filing an answer and counterclaims alleging defamation, intentional infliction of emotional distress, and tortious interference with a business expectancy. As an affirmative defense, they claimed that Cory failed to "serve process" on them "in the manner and form required by law." CP at 57.

B. FACTS RELEVANT TO COUNTERCLAIMS

1. John's Relationship with Kaycee Stackle

In 2003, John lived with Scott and Kaycee Stackle for a few months. Scott and Kaycee were married at the time. While living with Scott and Kaycee, John and Kaycee had sexual relations. And John admitted to having sexual relations with Kaycee while she was married to Scott.

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John and Kaycee stopped having sexual relations when John moved out and he began dating Kristie. John never told Kristie, nor anyone else, about his sexual relations with Kaycee.

2. Disclosure of Affair

Cory suspected something was going on between John and Kaycee around the time of the affair, but did not know exactly what was going on. He had seen a text message between John and Kaycee about something they had done the night before, but John told him to not say anything about it. Cory definitively found out about John and Kaycee's sexual relations through Amanda, whom Kaycee spoke to when the affair occurred.

From October to December of 2014, Cory sent John text messages that he was going to expose the affair. Cory also sent threatening text messages to John. Cory eventually posted online about John and Kaycee's affair and he told Scott as well. John testified that Cory posted information online about his affair with Kaycee in retaliation for being fired.

3. Effects of Disclosure

Scott had suspicions about Kaycee having an affair during the time it occurred, but he did not make any accusations because he did not know for sure. Scott found out about the affair around October 2014 from Cory and the online post.

Scott owned Sakco Precision, a manufacturing company. Scott and John did business together. But Scott stopped doing business with John about six months before Scott found out about the affair between John and Kaycee.

However, John testified that when Scott found out about his and Kaycee's affair, Scott stopped doing business with him. He also said in addition to sending him threatening messages,

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Cory tried to swerve his car into his and flipped him off. Also, John no longer got invited to family events.

4. Counterclaims

John, Kristie, and Velocity filed counterclaims against Cory, including slander, libel, defamation, outrage, and tortious interference with business activities. Velocity specifically prayed for damages arising from its claim of interference with business relationships.

C. TRIAL

1. Motion to Dismiss

The case proceeded to a bench trial. Midway through trial, John, Kristie, and Velocity brought a motion to dismiss, alleging improper service of process. They argued that service of the summons and complaint on John and Kristie's 15-year-old daughter was insufficient to invoke jurisdiction over each of them, as was mailing the amended complaint.

The trial court denied the motion to dismiss as to John and Kristie because they were properly served. The trial court also denied the motion as to Velocity because (1) the original summons and complaint was served on John as Velocity's registered agent, through his daughter; and (2) the amended complaint was served on John as Velocity's registered agent by mail, even without court permission to do so, as John accepted service by signing the certified return receipt.

2. Trial Court's Findings and Conclusions

After considering the evidence and testimony, the trial court found that:

1(A). All parties were properly served.

. . . .

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7. At this time, through its president John, Velocity made an offer to Cory and others to pay commissions for obtaining new customers for Velocity. Only Cory accepted the offer.

8. The offer included the following relevant terms: Cory would immediately begin to solicit new business for Velocity; Cory would receive a ten percent commission on all invoices paid by each client who was brought to Velocity by Cory's solicitation; and, the commissions would be paid so long as Velocity did business with and performed services for customers that were brought to Velocity by Cory's efforts.

. . . .

10. The testimony is undisputed that both parties anticipated and expected that this arrangement and agreement would be long-term. After all, they were brothers. Even though John was acting in his capacity as president of Velocity, both expected that they would make significant money if Cory was successful in bringing in new clients.

. . . .

12. It is also undisputed that once the offer was made and accepted, Cory immediately began to procure clients for Velocity, and this procurement continued for approximately one and three quarter years, i.e., from November 2012 until September 2014.

13. It's also undisputed that Cory procured these clients under the terms of the parties' oral understanding and agreement, even though Cory was employed full time at Staffmark.

. . . .

24. According to John, the volume of the anticipated work would bring large commission checks to Cory and significant business to Velocity.

. . . .

28. Also at this meeting John confirmed and reaffirmed that he would continue to pay Cory commissions for
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