UMB Bank, N.A. v. Eagle Crest Apartments, LLC
40189-8
Wash. Ct. App.May 15, 2025Background
- Historic Flight Foundation (HFF), a Washington nonprofit, was found liable in North Dakota for debts related to a defaulted multifamily housing project (Eagle Crest Apartments) orchestrated by John Sessions and related entities.
- The North Dakota court found that Sessions and the defendant entities, including HFF, were alter egos used to evade creditors and engage in fraudulent transfers.
- The North Dakota judgment included significant compensatory and punitive damages, which were affirmed by the North Dakota Supreme Court.
- UMB Bank registered the North Dakota judgment in Washington State under the Uniform Enforcement of Foreign Judgments Act.
- HFF sought to vacate the registered foreign judgment in Washington, arguing failure to give statutory notice to the Washington Attorney General under state nonprofit and charitable trust laws.
- The Washington Superior Court denied the motion to vacate, and HFF appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the North Dakota judgment is void for lack of jurisdiction due to non-notification of WA Attorney General. | HFF: North Dakota court lacked jurisdiction over HFF because WA statutes require notice to the Attorney General in suits against WA nonprofits. | UMB: Statutory notice is not jurisdictional; North Dakota applied its law; issue not raised previously; WA AG notice laws don't apply in ND debt cases. | Washington courts must grant full faith and credit; notice statutes do not render judgment void; North Dakota court had jurisdiction. |
| Whether RCW 24.03A.944 and .946 required AG notice in debt collection suits. | HFF: Statutes mandate AG notice in all suits affecting WA nonprofits, including those out-of-state. | UMB: Statutes only require notice for specific AG-authorized actions, not general debt collection; ND law controls. | Statutes do not apply to this context; no AG notice required. |
| Whether RCW 11.110.120 required AG notice as HFF claimed assets as charitable trust. | HFF: Statute required AG notification since HFF has charitable trust assets. | UMB: HFF is a nonprofit, not a trust; no trust administration at issue; statute not triggered. | Statute doesn't apply; HFF is not a charitable trust in this action. |
| Whether full faith and credit can be denied due to lack of AG notice. | HFF: No credit due to alleged jurisdictional defect from lack of AG notice. | UMB: No jurisdictional defect; full faith and credit applies. | Full faith and credit not defeated; judgment stands. |
Key Cases Cited
- UMB Bank, NA v. Eagle Crest Apartments, LLC, 984 N.W.2d 360 (N.D. 2023) (Affirmed North Dakota trial judgment, holding defendants jointly and severally liable due to alter ego findings and fraudulent transfers)
- V.L. v. E.L., 577 U.S. 404 (2016) (U.S. Supreme Court on full faith and credit for state judgments)
- In re Welfare of H.S., 94 Wn. App. 511 (Wash. Ct. App. 2000) (Washington courts disfavor collateral attacks based on notice defects)