[WSBARP] RCW 4.16.040 action (I think) - thoughts?

Fri Apr 8 10:28:32 PDT 2022

I have had this situation numerous time and I resolved it by filing a action under RCW7.28.030 and quiet title

Bryce H. Dille
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From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Eric Nelsen
Sent: Friday, April 8, 2022 10:13 AM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>; WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBARP] RCW 4.16.040 action (I think) - thoughts?

Tom, did you get any response? My thoughts for what it’s worth:

First thought is that maybe client doesn’t need to do anything at all? Just stop paying and ignore the debt, if it’s no longer enforceable under statute of limitations. But you probably already thought of that and there is a separate reason to affirmatively cancel it via a court action.

Second thought—statute of limitations resets each time a payment is tendered or the debt is reaffirmed by a statement acknowledging the debt, so if the creditor could make any argument that a payment or reaffirmation statement was made within the last six years, then maybe better to wait longer. Did any of the attempts to locate the creditor in the past few years include statements to the creditor that could be construed as reaffirming the debt? Such as a letter mailed to the creditor that might have actually reached them such that they could produce it in event of a lawsuit....

Third thought—I think this would be a declaratory judgment action under Ch. 7.24 RCW<https://app.leg.wa.gov/RCW/default.aspx?cite=7.24&full=true>, since client isn’t really asking for a judgment against the creditor, so much as a ruling that the statute of limitations bars the creditor’s enforcement of the debt. Or is this a secured debt, and you need to extinguish a security interest as well? Then a quiet title action under Ch. 7.28 RCW<https://app.leg.wa.gov/RCW/default.aspx?cite=7.28&full=true> would probably be the route, and the judgment that the debt is barred would go along with extinguishment of the cloud on title.

Last thought—Given the impossibility of finding the creditor in order to serve the Summons and Complaint, I think it’s going to be tough to commence an action based on declaratory judgment, because I don’t think the situation allows for publication of summons. The creditor’s absence doesn’t appear to fall into any of the categories authorizing publication under RCW 4.28.100<https://app.leg.wa.gov/RCW/default.aspx?cite=4.28.100>. However, if there is a security interest you’re trying to extinguish, that would be a basis for publication of summons under RCW 4.28.100(6).

Sincerely,

Eric

Eric C. Nelsen
Sayre Law Offices, PLLC
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Seattle WA 98144-3909
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From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> <wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com>> On Behalf Of Tom Lee
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To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>>; WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: [WSBARP] RCW 4.16.040 action (I think) - thoughts?

Listmates,

Years ago, a client's business agreed to pay a former partner X amount of money. Paid former partner Y amount, and then checks started being returned about seven years ago. I believe it has been over six years since any payments were last made: multiple attempts to locate creditor/former partner, including with investigators - nothing, this person has Judge Crater'd off the earth. Only heir has not responded after about 4 years of attempts to contact.

My initial thought is to cancel this obligation with an action under RCW 4.16.040:

The following actions shall be commenced within six years:
(1) An action upon a contract in writing, or liability express or implied arising out of a written agreement, except as provided for in RCW  64.04.007<http://app.leg.wa.gov/RCW/default.aspx?cite=64.04.007>(2).
(2) An action upon an account receivable. For purposes of this section, an account receivable is any obligation for payment incurred in the ordinary course of the claimant's business or profession, whether arising from one or more transactions and whether or not earned by performance.
(3) An action for the rents and profits or for the use and occupation of real estate.

Thoughts on this? advice?
--

TOM LEE

Attorney

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