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<p class="MsoNormal">Yes, you are definitely right to be concerned.<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">From WSBA Community Property Deskbook Ch. 6.2:<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;color:black;background:white">The power to create a community obligation also does not require knowledge on the part of the other spouse. <i>Capital
Nat’l Bank v. Johns</i>, </span><a href="http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=170+Wash.+250&fn=Washington%20Community%20Property%20Deskbook" target="_new"><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;background:white">170
Wash. 250</span></a><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;color:black;background:white">, </span><a href="http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=16+P.2d+452&fn=Washington%20Community%20Property%20Deskbook" target="_new"><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;background:white">16
P.2d 452</span></a><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;color:black;background:white"> (1932); <i>Gould v. Culver</i>, </span><a href="http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=148+Wash.+689&fn=Washington%20Community%20Property%20Deskbook" target="_new"><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;background:white">148
Wash. 689</span></a><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;color:black;background:white">, </span><a href="http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=270+P.+93&fn=Washington%20Community%20Property%20Deskbook" target="_new"><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;background:white">270
P. 93</span></a><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;color:black;background:white"> (1928). The obligation must not be a gift. It must be created with the expectation to produce a “community benefit.” <i>Beyers v. Moore</i>, </span><a href="http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=45+Wn.2d+68&fn=Washington%20Community%20Property%20Deskbook" target="_new"><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;background:white">45
Wn.2d 68</span></a><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;color:black;background:white">, </span><a href="http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=272+P.2d+626&fn=Washington%20Community%20Property%20Deskbook" target="_new"><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;background:white">272
P.2d 626</span></a><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;color:black;background:white"> (1954); <i>Sun Life Assurance Co. v. Outler</i>, </span><a href="http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=172+Wash.+540&fn=Washington%20Community%20Property%20Deskbook" target="_new"><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;background:white">172
Wash. 540</span></a><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;color:black;background:white">, </span><a href="http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=20+P.2d+1110&fn=Washington%20Community%20Property%20Deskbook" target="_new"><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;background:white">20
P.2d 1110</span></a><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;color:black;background:white"> (1933). The community obligation exists even if the anticipated benefit is not realized. <i>Beyers</i>, </span><a href="http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=45+Wn.2d+68&fn=Washington%20Community%20Property%20Deskbook" target="_new"><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;background:white">45
Wn.2d 68</span></a><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;color:black;background:white">; <i>Way v. Lyric Theater Co.</i>, </span><a href="http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=79+Wash.+275&fn=Washington%20Community%20Property%20Deskbook" target="_new"><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;background:white">79
Wash. 275</span></a><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;color:black;background:white">, </span><a href="http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=140+P.+320&fn=Washington%20Community%20Property%20Deskbook" target="_new"><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;background:white">140
P. 320</span></a><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;color:black;background:white"> (1914). Although the presumption of community obligation is rebuttable, it is becoming increasingly difficult to rebut it, as discussions
of particular types of obligations will indicate.</span><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">BUT from Ch. 6.2(2)(c):<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;color:black;background:white">In the absence of a community benefit, guarantees, accommodation endorsements, and suretyship contracts are ineffective
to create community liability. <i>Potlatch Fed. Credit Union v. Kennedy</i>, </span><a href="http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=76+Wn.2d+806&fn=Washington%20Community%20Property%20Deskbook" target="_new"><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;background:white">76
Wn.2d 806</span></a><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;color:black;background:white">, </span><a href="http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=459+P.2d+32&fn=Washington%20Community%20Property%20Deskbook" target="_new"><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;background:white">459
P.2d 32</span></a><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;color:black;background:white"> (1969). Even a holder in due course may not recover against community property. <i>Peterson v. Zimmerman</i>, </span><a href="http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=142+Wash.+385&fn=Washington%20Community%20Property%20Deskbook" target="_new"><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;background:white">142
Wash. 385</span></a><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;color:black;background:white">, </span><a href="http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=253+P.+642&fn=Washington%20Community%20Property%20Deskbook" target="_new"><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;background:white">253
P. 642</span></a><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;color:black;background:white"> (1927); <i>Gund v. Parke</i>, </span><a href="http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=15+Wash.+393&fn=Washington%20Community%20Property%20Deskbook" target="_new"><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;background:white">15
Wash. 393</span></a><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;color:black;background:white">, </span><a href="http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=46+P.+408&fn=Washington%20Community%20Property%20Deskbook" target="_new"><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;background:white">46
P. 408</span></a><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;color:black;background:white"> (1896). Absent community benefit, an accommodation endorsement by one spouse constitutes an attempt to give community credit—an act ineffective
without the consent of both spouses. RCW </span><a href="http://links.casemakerlegal.com/states/WA/books/Revised_Code/browse?ci=14&codesec=26.16.030&title=26&fn=Washington%20Community%20Property%20Deskbook" target="_new"><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;background:white">26.16.030</span></a><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;color:black;background:white">(2); <i>Nichols
Hills Bank v. McCool</i>, </span><a href="http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=104+Wn.2d+78&fn=Washington%20Community%20Property%20Deskbook" target="_new"><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;background:white">104
Wn.2d 78</span></a><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;color:black;background:white">, </span><a href="http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=701+P.2d+1114&fn=Washington%20Community%20Property%20Deskbook" target="_new"><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;background:white">701
P.2d 1114</span></a><span style="font-size:12.0pt;font-family:"Times New Roman-Roman",serif;color:black;background:white"> (1985). In <i>Nichols Hills Bank</i>, the court also refused to allow the beneficiary of a unilateral spousal guarantee to reach the
obligated spouse’s half interest in the couple’s community property.</span><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">I think, representing the contractor, I would advise the client to require that
<b><i>both</i></b> spouses sign the personal guarantee jointly and severally. That would potentially subject all community and both spouse's separate property. Or, at the very least have the husband sign as separately liable and the wife sign to confirm community
liability (but not her separate liability). You would want the community liable as a whole, not just 50%, I would think. It gets very messy trying to figure out what "50% community liability" even means in reference to a specific asset to be attached/garnished/foreclosed.<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">As a matter of security for the contractor, it makes no sense to give the community any defense based on the separate/community distinction.<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<div>
<p class="MsoNormal">Sincerely,<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Eric<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Eric C. Nelsen<o:p></o:p></p>
<p class="MsoNormal">Sayre Law Offices, PLLC<o:p></o:p></p>
<p class="MsoNormal">1417 31st Ave South<o:p></o:p></p>
<p class="MsoNormal">Seattle WA 98144-3909<o:p></o:p></p>
<p class="MsoNormal">206-625-0092<o:p></o:p></p>
<p class="MsoNormal">eric@sayrelawoffices.com<o:p></o:p></p>
</div>
<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal"><b>From:</b> wsbapt-bounces@lists.wsbarppt.com <wsbapt-bounces@lists.wsbarppt.com>
<b>On Behalf Of </b>Ron Housh<br>
<b>Sent:</b> Wednesday, January 29, 2020 12:40 PM<br>
<b>To:</b> 'WSBA Probate & Trust Listserv' <wsbapt@lists.wsbarppt.com><br>
<b>Subject:</b> Re: [WSBAPT] Separate debt - community property question<o:p></o:p></p>
</div>
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<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">LLC owns real estate and has contracted to build a home.<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Contractor wants husband to sign a personal guaranty guarantying payment owed to contractor.<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Husband wants to sign “John Doe – In His Individual Capacity on behalf of his Separate Property”<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">I represent contractor. I had asked that he sign “John Doe – In His Individual Capacity on behalf of his Separate Property and his 50% interest in community property.”<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">My concern is that Husband John Doe may not have any liquid separate property.
<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Am I correct in being concerned that if Husband signs “John Doe – In His Individual Capacity on behalf of his Separate Property” and the LLC defaults on payments and John Doe has no liquid separate property, Contractor may not be able to
recover against John Doe – Husband’s interest in community property??<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Bar exam type question???<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Thanks,<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Ron<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal"><b><span style="font-size:12.0pt;font-family:"Arial",sans-serif;color:red"><o:p> </o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-size:12.0pt;font-family:"Arial",sans-serif;color:red">I AM TYPICALLY IN THE SEATTLE OFFICE ON TUESDAY AND THURSDAY AND IN THE MOUNT VERNON OFFICE ON MONDAY, WEDNESDAY AND FRIDAY
<o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:green"><o:p> </o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-family:"Arial",sans-serif;color:#1F497D">Ronald G. Housh, P.S.<o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-family:"Arial",sans-serif;color:#1F497D">Attorney at Law<o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-family:"Arial",sans-serif;color:#1F497D"> <o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-family:"Arial",sans-serif;color:#1F497D">Seattle Office:<o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-family:"Arial",sans-serif;color:#1F497D">1420 Fifth Avenue, Suite 3000<o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-family:"Arial",sans-serif;color:#1F497D">Seattle, WA 98101-2393<o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-family:"Arial",sans-serif;color:#1F497D">Phone: 206-381-1341<o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-family:"Arial",sans-serif;color:#1F497D">Fax: 206-464-0461<o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-family:"Arial",sans-serif;color:#1F497D">Email:
<a href="mailto:ron@housh.org"><span style="color:#1F497D">ron@housh.org</span></a><o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-family:"Arial",sans-serif;color:#1F497D"><o:p> </o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-family:"Arial",sans-serif;color:#1F497D">Mount Vernon Office:<o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-family:"Arial",sans-serif;color:#1F497D">21411 Bluejay Place<o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-family:"Arial",sans-serif;color:#1F497D">Mount Vernon, WA 98274<o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-family:"Arial",sans-serif;color:#1F497D">Phone: 206-235-2459<o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-family:"Arial",sans-serif;color:#1F497D">Email:
<a href="mailto:ron@housh.org"><span style="color:#1F497D">ron@housh.org</span></a><o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-family:"Arial",sans-serif;color:#1F497D"><o:p> </o:p></span></b></p>
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