271 P.3d 925
Wash. Ct. App.2012Background
- Symetra sought to enforce an offset against 3B in a Washington SSPA transfer proceeding involving RSL, the transferee, and 3B as the purported payee of the transfer.
- SSPA allows transfers of structured settlement payments and imposes duties on transferees to protect payees; liability for compliance rests with transferees.
- RSL is a Texas partnership that previously transferred payments; 3B was later designated as the assignee in a Washington transfer proceeding.
- 3B argued it was not the transferee and challenged the court’s finding of mutuality of obligation between RSL and 3B.
- The trial court found RSL and 3B were the same entity for purposes of mutuality and granted Symetra a set-off against 3B’s rights.
- 3B appealed the order, raising due process, alter ego, merger, and full faith and credit issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether 3B received due process in the CR 60(b) proceedings | 3B lacked service and opportunity to be heard | Service to 3B via transmission to its registered agent sufficed | Due process satisfied |
| Whether 3B is the alter ego of RSL | RSL and 3B are distinct entities | Common ownership/control and shared operations show unity | 3B and RSL are one and the same (alter ego proven) |
| Whether the trial court properly granted a set-off | Set-off should not apply absent mutuality of obligation | Mutuality exists because RSL and 3B are the same entity | Discretionary set-off appropriate; not abused |
| Whether Texas law merger defense was preserved and applicable | Texas law governs merger; 3B not liable under Texas law | Defense not raised below; conflict analysis unnecessary | Waived; if reached, Washington law applies; no error shown |
| Whether full faith and credit requires invalidating the offset | Texas judgment cannot be offset by Washington judgment | Full faith and credit not violated; mutuality supports offset | Not violative; offset upheld |
Key Cases Cited
- Lenzi v. Redland Ins. Co., 140 Wash.2d 267 (2000) (notice suffices for due process when party intervenes)
- J.I. Case Credit Corp. v. Stark, 64 Wash.2d 470 (1964) (piercing corporate veil where ownership/control identical)
- Standard Fire Ins. Co. v. Blakeslee, 54 Wash.App. 1 (1989) (alter ego doctrine articulated)
- Reichlin v. First Nat'l Bank, 184 Wash. 304 (1934) (equitable setoff authority recognizes discretion in offset)
- Darwish v. Harmon, 633 N.E.2d 546 (Ohio App. 8th Dist. 1992) (setoff discretionary to prevent injustice)
- Baker by Thomas v. Gen. Motors Corp., 522 U.S. 222 (1998) (full faith and credit considerations in interstate judgments)