Opinion
No. 36450-6-II.
July 29, 2008.
Appeal from a judgment of the Superior Court for Pierce County, No. 02-2-04238-0, Linda CJ Lee, J., entered May 18, 2007.
Reversed and remanded by unpublished opinion per Penoyar, J., concurred in by Van Deren, C.J., and Hunt, J.
United States Sheepskin, Inc. (U.S. Sheepskin) filed a complaint against Mao Li Ying, alleging breach of contract, fraud and conversion, and tortious interference with business relationships. Ying filed a motion for summary judgment, arguing that U.S. Sheepskin's claims were barred by the statute of limitations and that the trial court lacked jurisdiction over her. The trial court granted Ying's motion for summary judgment. U.S. Sheepskin now appeals, arguing that summary judgment was improper because the trial court erred by (1) concluding that the statute of limitations barred its cause of action; (2) failing to conclude that Ying waived her jurisdictional defenses; and (3) failing to consider evidence regarding U.S. Sheepskin's breach of contract claim. Because genuine issues of material fact exist regarding whether the statute of limitations barred U.S. Sheepskin's claims, we reverse and remand for the trial court to determine whether the statute of limitations does in fact bar U.S. Sheepskin's claims against Ying.
During oral argument, we asked counsel to clarify whether his client's last name is Mao, as the appellant has indicated, or Ying. Counsel responded that we should refer to the respondent as "Ying." The record indicates that Ying's correct name may in fact be LiYing Mao (a.k.a. Sarah Mao). Given counsel's instruction, however, we will refer to her as "Ying" throughout this opinion and mean no disrespect in doing so.
FACTS
U.S. Sheepskin is a Washington corporation that manufactures and distributes sheepskin products such as seat covers, auto accessories, footwear, apparel, sports accessories, and household items. U.S. Sheepskin purchases many of its products, and materials for its products, from factories located within the People's Republic of China. U.S. Sheepskin alleges that in 1996, Ying began working as an agent for U.S. Sheepskin and acted as a liaison between U.S. Sheepskin and the factories located in China. U.S. Sheepskin further alleges that Ying's duties included brokering purchase orders, offering translation services between the factories, negotiating prices for products on U.S. Sheepskin's behalf, arranging shipments, and acting as a conduit for the monies paid to the factories for the products.
Ying has denied that she was operating as U.S. Sheepskin's agent within China.
On January 18, 2002, U.S. Sheepskin filed a complaint against Ying and John Doe Ying, as husband and wife, and Moonsoft Sheepskin Co., Ltd., a foreign corporation, alleging breach of contract, fraud and conversion, and tortious interference with business relationships. In its complaint, U.S. Sheepskin alleged: that upon receiving an order U.S. Sheepskin generated through Ying, the factories would issue an invoice that Ying would receive on U.S. Sheepskin's behalf. Ying would then reissue an invoice under her own name to U.S. Sheepskin for a price higher than that which the factories actually provided. Upon receiving the invoice, U.S. Sheepskin would wire Ying payments for the materials and Ying would then disseminate a portion of the payments to the factories and retain the rest for herself. U.S. Sheepskin alleged that after reviewing both payment schedules received directly from the factories from 1998 through 2002, and invoices Ying provided, U.S. Sheepskin discovered that Ying improperly appropriated $102,820.66 for her own use. U.S. Sheepskin claims to have made this discovery in or about September 2001.
U.S. Sheepskin alleges that Ying operates Moonsoft Sheepskin Co., Ltd., which Ying denies.
In March 2007, Ying moved for summary judgment. She argued that the statute of limitations barred U.S. Sheepskin's claims under RCW 4.16.080 (3) and that the trial court lacked jurisdiction over her. Although Ying claimed that U.S. Sheepskin had failed to properly serve her, U.S. Sheepskin maintained that after several failed attempts at service (both within the United States and overseas), it did in fact perfect service in June 2006.
RCW 4.16.080(3) provides that an action upon a contract or liability, express or implied, which is not in writing, and does not arise out of any written instrument must be commenced within three years. Thus, if RCW 4.16.080(3) is applicable in this case, the statute of limitations expired in September 2004. Neither party appears to dispute this calculation.
On May 18, 2007, the trial court heard arguments regarding Ying's motion for summary judgment. In its oral ruling, the trial court stated:
I have reviewed all of the pleadings that were provided to me on this motion for summary judgment. I also went back through the case file in this matter.
And this case has a tortured history, and I will say tortured because that's how I felt going through the case file on this matter.
I've also gone back and reviewed RCW 4.16.170, 4.16.180, 4.16.040, 4.16.080.
And recognizing that this is a motion for summary judgment and that I must view all of the evidence in the light most favorable to the nonmoving party, U.S. Sheepskin in this case, I am going to find that there are no genuine issues of material fact and that summary judgment should be granted in this case as a matter of law.
Report of Proceedings (RP) (May 18, 2007) at 26-27. The trial court cited no other bases for its decision. It then filed an order granting summary judgment on May 18, 2007. U.S. Sheepskin now appeals.
RCW 4.16.170 defines when actions are commenced for the purpose of tolling any statute of limitations. RCW 4.16.180 tolls the statute of limitations when a defendant is a nonresident of the state, is a resident of the state but who is out of the state, or is "concealed therein." RCW 4.16.040(1) provides that an action upon a contract in writing, or liability express or implied arising out of a written agreement shall be commenced within six years. These statutes are discussed in greater depth below.
ANALYSIS
U.S. Sheepskin appeals the trial court's decision granting Ying's motion for summary judgment. It argues that summary judgment was improper because (1) issues of material fact existed demonstrating that U.S. Sheepskin's claims were not barred by the statute of limitations; (2) Ying waived her jurisdictional defenses; and (3) issues of material fact existed regarding Ying's breach of contract. Ying responds that because the statute of limitations barred U.S. Sheepskin's claims and the trial court lacked personal jurisdiction over her, summary judgment was appropriate. Considering the facts in the light most favorable to U.S. Sheepskin, however, there are several genuine issues of material fact in dispute.
I. Standard of Review
On review of an order for summary judgment, we perform the same inquiry as the trial court. Hisle v. Todd Pac. Shipyards Corp., 151 Wn.2d 853, 860, 93 P.3d 108 (2004) (citing Kruse v. Hemp, 121 Wn.2d 715, 722, 853 P.2d 1373 (1993)). Summary judgment is appropriate only if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." CR 56(c). A material fact is one upon which the outcome of the litigation depends. Wojcik v. Chrysler Corp., 50 Wn. App. 849, 853, 751 P.2d 854 (1988). We consider all facts in the light most favorable to the nonmoving party. Vallandigham v. Clover Park Sch. Dist. No. 400, 154 Wn.2d 16, 26, 109 P.3d 805 (2005) (citing Atherton Condo. Apartment-Owners Ass'n Bd. of Dirs. v. Blume Dev. Co., 115 Wn.2d 506, 516, 799 P.2d 250 (1990)). Summary judgment is proper only if reasonable persons could reach but one conclusion from all the evidence. Vallandigham, 154 Wn.2d at 26 (citing Wilson v. Steinbach, 98 Wn.2d 434, 437, 656 P.2d 1030 (1982)).
The moving party bears the burden of demonstrating that there is no genuine issue of material fact. Atherton, 115 Wn.2d at 516. "If the moving party satisfies its burden, the nonmoving party must present evidence that demonstrates that material facts are in dispute." Atherton, 115 Wn.2d at 516. If the nonmoving party fails to do so, then the summary judgment is proper. Vallandigham, 154 Wn.2d at 26 (citing Atherton, 115 Wn.2d at 516).
II. Statute of Limitations
First, U.S. Sheepskin argues that genuine issues of material fact exist demonstrating that the statute of limitations did not bar its claims against Ying.
A. RCW 4.16.080
In her motion for summary judgment, Ying claimed that U.S. Sheepskin's cause of action was barred, as U.S. Sheepskin failed to accomplish service prior to the expiration of the statute of limitations on an oral contract. U.S. Sheepskin contends that because material issues of fact exist as to whether the parties' contract was oral or written, the trial court should not have granted summary judgment on that issue. We disagree.
In its complaint, however, U.S. Sheepskin alleges, "By their actions, Defendants have breached the oral contract between the parties for their services as agents by appropriating funds over and above the amounts to be paid to them on commission." CP at 8 (emphasis added). U.S. Sheepskin argues that although it identified the agreement between the parties as an oral contract in its complaint, it should not be bound by this reference.
RCW 4.16.080(3) provides that an action upon a contract or liability, expressed or implied, which is not in writing, and does not arise out of any written instrument, shall be commenced within three years. RCW 4.16.040(1), on the other hand, provides that an action upon a contract in writing, or liability express or implied arising out of a written agreement, shall be commenced within six years.
The burden of proving a contract, whether express or implied, is on the party asserting it, and he must prove each essential fact, including the existence of mutual intention. Johnson v. Nasi, 50 Wn.2d 87, 91, 309 P.2d 380 (1957) (citing Ross v. Raymer, 32 Wn.2d 128, 201 P.2d 129 (1998)). For purposes of the six-year statute of limitations, a contract must be in writing and the writing must contain all essential elements of a contract, including the subject matter, the parties, the terms and conditions, and the price or consideration. Barnes v. McLendon, 128 Wn.2d 563, 570, 910 P.2d 469 (1996) (citing Cahn v. Foster Marshall, Inc., 33 Wn. App. 838, 840-41, 658 P.2d 42 (1983)). If resort to parol evidence is necessary to establish any material elements of the written contract, then the contract is partly oral and the three-year statute of limitations applies. Barnes, 128 Wn.2d at 570 (citing Cahn, 33 Wn. App. at 841. RCW 4.16.040(1) requires a contract in writing or a written agreement, and not some ex parte memorandum related thereto. Evans v. Yakima Valley Grape Growers Ass'n, 52 Wn.2d 634, 637, 328 P.2d 671 (1958). Thus, we must determine if there are any genuine issues of material fact that the contract was an oral contract in deciding whether the applicable statute of limitations in this case was three years, as the trial court concluded, or six years, as U.S. Sheepskin asserts. Even when we view the evidence in light most favorable to U.S. Sheepskin, there are no genuine issues of material fact regarding this issue.
Thus, if RCW 4.16.080(3) is applied in the present case, the statute of limitations expired in September 2004, three years after U.S. Sheepskin discovered the alleged injury in September 2001. If, on the other hand, RCW 4.16.040(1) is applied, then the statute of limitations expired in September 2007. Neither party contests this.
U.S. Sheepskin asserts that several writings, invoices, and memoranda from 1996 through 2001 are sufficient to constitute "a written contract subject to a six-year statute of limitation." Appellant's Br. at 14. First, U.S. Sheepskin points to a May 23, 2001 email Ying sent to David Phillips, U.S. Sheepskin's Director of Marketing and Sales, in support of its argument. In the body of this email, Ying states that she is an "agent [for the] company" and refers to the five percent commission she was to receive for seat covers. Clerk's Papers (CP) at 303. Additionally, U.S. Sheepskin points to a document entitled, "Agreement on Commission." Appellant's Br. at 12. The agreement states that U.S. Sheepskin will pay Ying a two cent per unit commission for steering wheel and shoulder strap covers, and that commissions for every shipment will be wired to her account as soon as the merchandise is received. U.S. Sheepskin also points to a series of emails between Phillips and Ying and an invoice, which apparently illustrate the process by which U.S. Sheepskin faxed or emailed orders to Ying, who then secured contracts with local tanneries and forwarded the written invoices to U.S. Sheepskin. Finally, U.S. Sheepskin points to an email Phillips sent to Ying and a confidentiality agreement both Phillips and Ying signed in support of its argument that a written contract existed between the parties.
The email states, in part, "Mao, for the future, please remember these golden rules of business. 1) PRICE 2) QUANTITY 3) DELIVERY TIME. These rules are the most important when negotiating new contracts. They should be confirmed as much as needed . . . This is one of your responsibilities because you are there and you are our agent." CP at 270. The confidentiality agreement states that "the undersigned will not disclose the location of any tanneries involved in the production of the below listed product." The "below listed product" here appears to be "5cm x 5cm sheepskin squares." CP at 264.
Even if we accept the premise that, for purposes of applying RCW 4.16.040(1), multiple documents that together contain all essential terms may comprise a contract, the above writings, invoices, and memoranda do not provide the requisite terms. They merely illustrate that Ying and Phillips had an oral contract in which Ying agreed to provide services to U.S. Sheepskin in exchange for a commission (dependent on the type and quantity of items procured from local tanneries). While certain aspects of the parties' working relationship may be derived from these documents, they do not contain all the essential elements of the contract. Namely, the specific terms and conditions of the parties' contract are not sufficiently outlined in writing (for example, the duration of the parties' contract, the standards and processes by which Ying was to assess product quality, etc.). Thus, U.S. Sheepskin's argument that genuine issues of material fact exist with respect to this issue is unpersuasive.
B. RCW 4.16.170
In her motion for summary judgment, Ying alleged that the action was not commenced in accordance with RCW 4.16.170, as U.S. Sheepskin failed to complete service within 90 days of filing the lawsuit. U.S. Sheepskin argues that issues of material fact existed regarding service, thereby making summary judgment improper. U.S. Sheepskin contends that since "the 90-day `catch up' provision of this statute only pertains to tolling the applicable statute of limitations," the statute is inapplicable when both service and filing are accomplished before the statute of limitations expires. Appellant's Br. at 15 (quoting Nearing v. Golden State Foods Corp., 114 Wn.2d 817, 822, 792 P.2d 500 (1990)). Because service and filing were completed before the statute of limitations expired, U.S. Sheepskin claims, it was not required to refile the complaint.
"For the purpose of tolling any statute of limitations an action shall be deemed commenced when the complaint is filed or summons is served whichever occurs first. If service has not been had on the defendant prior to the filing of the complaint, the plaintiff shall cause one or more of the defendants to be served personally, or commence service by publication within ninety days from the date of filing the complaint. If the action is commenced by service on one or more of the defendants or by publication, the plaintiff shall file the summons and complaint within ninety days from the date of service. If following service, the complaint is not so filed, or following filing, service is not so made, the action shall be deemed to not have been commenced for purposes of tolling the statute of limitations." RCW 4.16.170.
In Nearing, the Washington Supreme Court explained that the statute's plain language clearly states that for the purpose of tolling any statute of limitations, an action shall be deemed commenced when the complaint is filed or summons is served. 114 Wn.2d at 622. It then concluded:
Therefore, service of a summons alone is adequate to toll the statute of limitations conditioned upon the plaintiff filing the summons and complaint within 90 days of the service of the summons. If following service of the summons, the complaint and summons are not so filed, or following filing of the complaint, service of the summons is not so made, then the action is not deemed commenced and the statute of limitations is not deemed to have been tolled. In effect, the statute provides a 90-day "catch up" or grace period within which to comply with all of its requirements.
Nearing, 114 Wn.2d at 822 (emphasis added). Thus, where an action has been commenced before the statute of limitations expires, tolling is unnecessary under RCW 4.16.170. Therefore, we must determine whether genuine issues of material fact exist regarding whether U.S. Sheepskin completed service before the statute of limitations expired; because such issues exist, the trial court improperly granted summary judgment under RCW 4.16.170.
In Hansen v. Watson, 16 Wn. App. 891, 892-93, 559 P.2d 1375 (1977), Division One of this court stated that if filing and service are both accomplished within the time allowed by the statute of limitations, it is immaterial whether the plaintiff serves the defendant within 90 days after filing.
CR 3 also provides, "An action shall not be deemed commenced for the purpose of tolling any statute of limitations except as provided in RCW 4.16.170." (Emphasis added).
III. Alleged February 9, 2004 Service
Here, U.S. Sheepskin points to an affidavit of nonservice in support of its argument that Ying was served on February 9, 2004, before both the three-year and the six-year statute of limitations expired. The affidavit, which is dated February 20, 2004, states:
U.S. Sheepskin argues that it has attempted service in several locations around the United States, in the People's Republic of China, and most recently in Spokane, Washington. U.S. Sheepskin claims that although service was "definitively completed" on June 24, 2006, Ying was actually served on February 9, 2004. Appellant's Br. at 16.
Service was attempted at [14908 E. Palomino Lane, Mica, Washington] again on 02/09/04 at 7:06 a.m. Service was completed on MAO LI YING by leaving with a resident of 14908 E. PALOMINO LANE, MICA, WA, who refused to identify himself but replied he did live with MAO LI YING, but was not her husband, and refused to provide any other information regarding MAO LI YING or MOONSOFT SHEEPSKIN [sic] CO. MOONSOFT SHEEPSKIN CO., LTD. was therefore not served.
CP at 103 (emphasis added). U.S. Sheepskin contends that although this document is entitled "Affidavit of Non-Service," it is not the title of the document that controls. Appellant's Br. at 17. Rather, it is "the fact of service which confers jurisdiction, and not the return [of service], and the latter may be amended to speak the truth." John Hancock Mut. Life Ins. Co. v. Gooley, 196 Wash. 357, 363, 83 P.2d 221 (1938). Despite its title, the aforementioned affidavit states that service on Ying was completed when the process server left the summons and complaint with an adult resident of 14908 E. Palomino Lane. It then states that Moonsoft Sheepskin Co., Ltd. was not served. In response to U.S. Sheepskin's requests for admission, Ying admitted that her residential address was 14908 E. Palomino Lane, Mica, Washington. Furthermore, Ying admitted that this was the mailing address for her business and that she worked at this address when she was in Spokane.
RCW 4.28.080(15) provides that service may be completed by leaving a copy of the summons at the house of the defendant's usual abode with some person of suitable age and discretion who is a resident therein. Ying does not argue that the requirements of this statute were violated. Rather, she argues that service never took place.
On April 19, 2007, however, Ying's husband, Daniel Simmons, submitted a declaration stating that he was never personally served with a summons or complaint. Simmons stated:
Ying and Simmons were married in Idaho on March 26, 2004.
I wish to make clear to the court that at no time has anyone, the plaintiff, their agent or any other person for any purpose related to this lawsuit or any other, no one has ever personally served me with a summons or complaint or any other pleadings.
CP at 191. Furthermore, Ying emphasizes that counsel for U.S. Sheepskin filed declarations on both June 27, 2005 and May 15, 2006 in support of U.S. Sheepskin's motions to adjust the trial date. On June 27, 2005, counsel stated, "[T]he current trial date set for September 26, 2004, is not practical as Defendant still remains unserved." CP at 72. Phillips verified the contents of this declaration. On May 15, 2006, counsel again stated, "[T]he current trial date set for August 7, 2006, is not practical as Defendant still remains unserved." CP at 96. Below, counsel for U.S. Sheepskin explained that these representations were made because of U.S. Sheepskin's concern that the February 4, 2004 affidavit of nonservice was "not going to be accurate for the court [because] the document said Affidavit of Nonservice" and because U.S. Sheepskin "wanted to perfect service . . . [and] obtain service on the corporation." RP (May 18, 2007) at 13-14.
Viewing the facts in the light most favorable to U.S. Sheepskin, the evidence indicates that a genuine issue of material fact — whether service was accomplished before the statute of limitations expired — is in dispute. The affidavit of nonservice states that service was completed on Ying by leaving the summons and complaint with a resident of 14908 E. Palomino Lane. Ying, however, flatly denies that she or anyone residing at that address was ever served. This is clearly a fact upon which the outcome of the litigation depends. Therefore, we reverse and remand for the trial court to determine whether the statute of limitations does in fact bar U.S. Sheepskin's claims against Ying.
IV. Alleged June 24, 2006 Service
U.S. Sheepskin claims that even if its February 9, 2004 service is not recognized, it "definitively completed service on June 24, 2006." Appellant's Br. at 16. Thus, "both filing (January 18, 2002) and service (June 24, 2006) were completed prior to the six year statute of limitations . . . [and] U.S. Sheepskin was not required to re-file the Complaint." Appellant's Br. at 16. Ying responds that service was not completed on June 24, 2006. Because we find that the three-year statute of limitation applies, we need not reach this issue.
According to a June 28, 2006 declaration of service, the process server personally delivered the summons and complaint to a "Dan Simmons" at 14908 E. Palomino Lane, Mica, Washington. CP at 154. Simmons claims that he was never served.
U.S. Sheepskin argues, in the alternative, that the trial court erred in declining to toll the statute of limitations under RCW 4.16.180. Ying responds that this statute does not apply to the facts of this case. We disagree.
RCW 4.16.180 states:
If the cause of action shall accrue against any person who is a nonresident of this state, or who is a resident of this state and shall be out of state, or concealed therein, such action may be commenced within the terms herein respectively limited after the coming, or return of such person into the state, or after the end of such concealment; and if after such cause of action shall have accrued, such person shall depart from and reside out of this state, or conceal himself, the time of his absence or concealment shall not be deemed or taken as any part of the time limit for the commencement of such action.
In Brown v. ProWest Transport Ltd., 76 Wn. App. 412, 420-21, 886 P.2d 223 (1994), Division One stated:
Judicial interpretations of the standard of "concealment" necessary to the tolling of the statute of limitations are scarce. Bethel v. Sturmer, 3 Wn. App. 862, 867, 479 P.2d 131 (1970). Concealment under RCW 4.16.180 is defined as a "`clandestine or secret removal from a known address.'" Caouette v. Martinez, 71 Wn. App. 69, 74, 856 P.2d 725 (1993) (quoting Patrick v. DeYoung, 45 Wn. App. 103, 109, 724 P.2d 1064 (1986), review denied, 107 Wn.2d 1023 (1987)[)]. Willful evasion of process appears to be a necessary ingredient. Muncie v. Westcroft Corp., 58 Wn.2d 36, 38, 360 P.2d 744 (1961).
U.S. Sheepskin argues that Ying's actions evidence a secret removal from an address she has admitted is hers. U.S. Sheepskin's argument is persuasive. In this case, it appears that several service attempts were made. On February 9, 2004, a process server attempted to serve Ying at 14908 E. Palomino Lane, Mica, Washington. In an affidavit of nonservice, the process server stated that she left a summons and complaint with a resident who "refused to identify himself but replied he did live with [Ying], but was not her husband, and refused to provide any other information regarding [Ying]." CP at 103. On February 14, 2004, another attempt at service at the same address was made. In an affidavit of nonservice, the process server stated:
A man answered and replied that he lived at this address but no one by the name of [Ying] lived there and had never heard of Moonsoft Sheepskin Co., Ltd. This contradicted what the previous server had been told, and subsequent attempts [at that address] went unanswered.
CP at 105. On June 6, 2006, a process server stated in a declaration of non service that that upon arriving at 14908 E. Palomino Lane, Mica, Washington, he observed movement inside the home, noticed that the blinds were part-way open, and saw someone sitting on the couch. When he knocked on the door, however, no one answered. A few minutes later, he noticed that the blinds had been closed. The process server then stated that he spoke to a nearby neighbor, who confirmed that "Don [sic] Simmons and [Ying] lived [at that address]." CP at 146.
Although the above information does not definitively prove that Ying willfully evaded process, it demonstrates the existence of genuine issues of material fact regarding whether the statute of limitations should have been tolled pursuant to RCW 4.16.180. Viewing all the evidence in the light most favorable to U.S. Sheepskin, Ying has failed to demonstrate that no genuine issues of material fact exist regarding this issue.
V. Waiver of Jurisdictional Defenses
In her motion for summary judgment, Ying argued that she was not subject to the trial court's jurisdiction. U.S. Sheepskin argues that the trial court failed to recognize, however, that Ying waived her jurisdictional defenses. Although U.S. Sheepskin makes several arguments as to why Ying's actions in this case constituted a waiver, none is persuasive.
A. Request for Affirmative Relief
U.S. Sheepskin cites to Kuhlman Equipment Co. v. Tammermatic, Inc., 29 Wn. App. 419, 628 P.2d 851 (1981), for the proposition that a defendant may waive her jurisdictional defenses if she seeks any form of affirmative relief by way of counterclaim, cross-claim, or third-party complaint. Ying responds that Kuhlman is readily distinguishable from the present case, as the defendants in Kuhlman invoked jurisdiction by asserting noncompulsory counterclaims. Ying argues that U.S. Sheepskin fails to cite to authority which states that the assertion of compulsory counterclaims (such as those asserted here) similarly waives jurisdictional defenses.
U.S. Sheepskin also cites to our decision in Livingston v. Livingston, 43 Wn. App. 669, 719 P.2d 166 (1986), in support of this argument. In that case, the plaintiff sued to require his ex-wife to pay child support through the modification of a foreign (New York) divorce decree, and the ex-wife moved to enforce visitation. Livingston, 43 Wn. App. at 670-71. We held that by invoking the court's jurisdiction to enforce previously adjudicated visitation rights imposed under the divorce decree, the ex-wife waived her objection to the court's assumption of personal jurisdiction over her. Livingston, 43 Wn. App. at 672. Ying responds that because the ex-wife in Livingston sought affirmative relief in the form of a permissive counterclaim, that case is readily distinguishable from the present case (where no permissive counterclaims were asserted).
CR 13(b), which addresses permissive counterclaims, provides:
A pleading may state as a counterclaim any claim against an opposing party not arising out of the transaction or occurrence that is the subject matter of the opposing party's claim.
CR 13(a), which addresses compulsory counterclaims, provides:
A pleading shall state as a counterclaim any claim which at the time of serving the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party's claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction.
A party may waive a claim of lack of personal jurisdiction if she asks the court to grant affirmative relief. Grange Ins. Ass'n v. State, 110 Wn.2d 752, 765, 757 P.2d 933 (1988). Division One of this court has held that the assertion of a noncompulsory counterclaim operates as a waiver. It does not necessarily follow, however, that the assertion of a compulsory counterclaim also operates as such.
In Kuhlman, Tammermatic, a Michigan corporation, filed a cross-claim for indemnity after Kulhman, a Washington corporation, sued it for breach of contract. The trial court, however, dismissed Kuhlman's action for want of personal jurisdiction. Kuhlman, 29 Wn. App. at 421-22. Kuhlman appealed. On appeal, Division One asked, "Can the jurisdictional defense of lack of personal jurisdiction . . . be waived in some way other than by failure to timely assert the defense, specifically, by joining it with a noncompulsory claim for affirmative relief?" Kuhlman, 29 Wn. App. at 422. The court answered in the affirmative, concluding that by seeking permissive affirmative relief in the form of a third party cross-claim, Tammermatic had invoked the court's jurisdiction. Accordingly, Division One reversed the trial court's decision and remanded the cause for trial. Kuhlman, 29 Wn. App. at 422. In a footnote, Division One noted that while some courts have gone so far as to hold that the assertion of a compulsory counterclaim waives lack of personal jurisdiction, the "preferred rule is . . . that a compulsory counterclaim does not waive jurisdictional defenses." Kuhlman, 29 Wn. App. at 423-24 n. 4 (citing 5 C. Wright A. Miller, Federal Practice § 1397 (1969)) (emphasis added).
In her answer to U.S. Sheepskin's complaint, Ying asserted four counterclaims: (1) violation of the Washington State Consumer Protection Act; (2) wrongful garnishment; (3) claim for money due on an account; and (4) tortious interference with business relationships. Even if we were to agree that a compulsory counterclaim waives jurisdictional defenses, U.S. Sheepskin fails to explain why Ying's counterclaims were permissive or why the assertion of compulsory counterclaims should have constituted a waiver. Therefore, we proceed under the assumption that all of Ying's counterclaims were compulsory and that Ying's assertion of these claims did not operate to waive her jurisdictional defenses.
U.S. Sheepskin merely states that Ying's answer "contain[ed] counterclaims such as breach of contract and violation of the Consumer Protection Act that are arguably not compulsory." Appellant's Br. at 25. Passing treatment of an issue or lack of reasoned argument is insufficient to merit judicial consideration. Palmer v. Jensen, 81 Wn. App. 148, 153, 913 P.2d 413 (1996), remanded on other grounds, 132 Wn.2d 193, 937 P.2d 597 (1997).
B. Ying's Participation in the Litigation and Intent to Waive
Next, U.S. Sheepskin argues that Ying's "active role in [the] litigation" should have resulted in a waiver of jurisdictional defenses. Appellant's Br. at 24. U.S. Sheepskin contends that Ying's "unequivocal acts" demonstrate her intent to waive and that Ying was dilatory in asserting this defense. Appellant's Br. at 25. U.S. Sheepskin's argument is unpersuasive.
U.S. Sheepskin claims that because Ying moved for dismissal, made two motions for protective orders, filed a jury demand, and filed a witness list before making her motion for summary judgment, she intended to waive her jurisdictional defenses. U.S. Sheepskin seems to ignore, however, that Ying asserted the affirmative defense of lack of jurisdiction in her answer to U.S. Sheepskin's complaint, and consistently thereafter before making her motion for summary judgment.
U.S. Sheepskin twice refers to Ying's jury demand, witness list, and two motions for protective orders, but they did not include citations to the clerk's papers or report of proceedings.
On May 25, 2006, for example, Ying made a CR 41 motion to dismiss for want of prosecution. In an attached declaration, Ying's attorney stated that the summons and complaint had not yet been served but that U.S. Sheepskin had noted this matter for trial setting "in spite of knowing that the defendant had not yet been served and this court lacked jurisdiction over the defendant." CP at 120. On April 19, 2007, Ying also submitted a declaration in support of her motion for a protective order, where she explicitly stated that she had not waived her jurisdictional defenses. Thus, U.S. Sheepskin's argument that Ying's "active role in the litigation" constituted a waiver of jurisdiction is simply untenable. Appellant's Br. at 24. At several points throughout this litigation, Ying has asserted and thus preserved the affirmative defense of lack of jurisdiction.
VI. Breach of Contract Claim
U.S. Sheepskin argues that the trial court erred in failing to consider evidence regarding its breach of contract claim. Because material issues of fact exist as to Ying's breach, U.S. Sheepskin insists, we should remand this action to be tried on the merits. We agree.
U.S. Sheepskin contends that a letter Ying wrote to Jacob Engelstein of Classic Accessories, one of U.S. Sheepskin's largest clients, contains an "unequivocal confession" by Ying that she breached her contract with U.S. Sheepskin. Appellant's Br. at 26-27. The letter states, in part:
I talked with two tanneries that produced your accessories. They wanted me to increase a little bit of the prices on several items, which I did from 1999 on a few accessory items. I didn't see anything wrong for doing that.
CP at 217. Although this letter does not necessarily establish that Ying breached her contract with U.S. Sheepskin, it indicates that issues of material fact exist with respect to whether Ying breached the parties' oral contract and that a trial on the merits may be warranted.
U.S. Sheepskin also points to two invoices that allegedly show that Ying inflated the price of steering wheel covers in one instance, and an accounting summary that appears to reflect this difference in pricing. Although one invoice shows an order for 25,920 steering wheel covers at $1.75 per unit, the second invoice is not clearly labeled and is, in part, written in Chinese. While the accounting summary shows a discrepancy in pricing, this document provides no evidence of an alleged breach.
We reverse and remand for the trial court to determine whether the statute of limitations does in fact bar U.S. Sheepskin's claims against Ying. If the trial court determines that it does not, then a trial on the merits is appropriate.
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.
VAN DEREN, C.J. and HUNT, J. concur.