In almost all instances, the sale of real property occurs pursuant to some written contract, typically a purchase and sale agreement.  The sale generally becomes complete when title to the property transfers to the buyer via a deed.  But what happens if, after consummation of the sale, one of the parties claims the contract was breached?  Washington courts generally hold that the execution, delivery and acceptance of the deed “becomes the final expression of the parties’ contract and therefore subsumes all prior agreements.”  However, there is an exception to this rule when there are collateral contract...Read More

When two people love each other very much…. Or at least enough…. A baby can be the result. One or both of those loved-enough adults may be married at the time, although not necessarily to each other. These circumstances sometimes result in one spouse in a marriage contesting the parentage of a child born by the other spouse.

First, note that this blog post uses the terms “spouse” to mean the person in the marriage who did not give birth to the child and “mother” to mean the person in the marriage who gave birth...Read More

“Until our legislature declares otherwise, Washington is a demand futility state and follows Delaware.” This phrase in the Washington Supreme Court opinion In re F5 Networks, Inc., 166 Wn.2d 229, 240, 207 P.3d 433 (2009) had a significant impact on derivative action litigation throughout the State of Washington. I write this post in an effort to explain what the phrase means and how it is applied today in shareholder derivative litigation involving Zillow (yes, Zillow.com).

What is Demand Futility?

As discussed in last week’s post, a derivative action...Read More

On November 15, 2020, Washington Governor Jay Inslee held a press conference to announce a roll-back of the state’s County-By-County phased reopening plan in response to what he described as a third wave of COVID-19 in Washington state.  This marks the eighth time Governor Inslee has amended his original March 23, 2020 “Stay Home-Stay Healthy” Order.  Later in the day, Governor Inslee issued Proclamation No. 20-25.8, which sets forth the new rules described in the press conference.

The new Proclamation takes effect at 12:01...Read More

The derivative action is the source of increasing consternation throughout the legal industry. Today’s post brings a little insight into the fundamentals of a derivative action in Washington.

What is it?

A derivative action permits a shareholder or member the right to sue third parties on behalf of the entity. The purpose behind the derivative suit is described by former Washington State Supreme Court Justice Fred Dore:

Ordinarily, a shareholder cannot sue for wrongs done to a corporation, because the corporation is viewed as a separate entity, and the shareholder's interest is too remote to meet...Read More

No two closely held business are alike.  In a corporate setting, following corporate formalities is critical for a host of reasons, including to maintain the separateness of the corporation from the shareholders.  A recent Washington decision, Nelson v. Vetter, Inc., No. 80144-9-I, 2020 WL 6036825 (Wn. App. Oct. 12, 2020), reminds us of the need to comply with corporate formalities in a timely manner.

Dispute

In 2001, Plaintiff Nelson became employed by defendant Vetter, Inc. (the “Company”) pursuant to a written employment contract.  The contract provided that the Company would issue 15% of the stock in...Read More

In the Washington Supreme Court’s recent opinion in Young v. Toyota Motor Sales, U.S.A., many plaintiffs’ attorneys added a bigger hammer to their tool belt. The case effectively broadens the applicability of Washington’s Unfair Business Practices Act (or Consumer Protection Act, “CPA”), RCW 19.86. Many civil litigants and their counsel should be aware of the change ushered in by Young, as it can increase a defendant’s risk of CPA liability.

The CPA is often thought to apply only to product liability claims, but actually can apply to any “unfair or deceptive acts or practices in the...Read More

In the past, documents granting a power of attorney were often signed by the Principal, the person granting the power, and acknowledged by the Principal in front of a notary public.  The Uniform Power of Attorney Act adopted by the state of Washington in 2016, RCW 11.125 (the “Act”), provides more flexibility.  It allows for acknowledgment before a notary public or attestation before two or more competent witnesses.  The standards for “competent” witnesses are similar to the standards for witnesses to the signing of a Last Will and Testament.  The witnesses must: (1) not be home...Read More

Maybe.

Imagine… You are just finishing up a divorce. Every property item is split, all the documents are signed, and you are just waiting for the court to bless your disunion. Your soon-to-be ex was entirely uncooperative has stopped all communication. Good riddance, you think.

You find your next new home and purchase it by yourself; ready to start a new life. You pay tens of thousands of dollars in earnest money and watch the days tick by until final closing. The new chapter of your life is about to begin….

Suddenly, you get an email...Read More

In keeping with last week’s theme, this post discusses reverse veil piercing. Reverse veil piercing is the process by which an entity’s assets may be used to satisfy a judgment against a member/shareholder/partner in their individual capacity. Reverse veil piercing is the opposite of corporate veil piercing, where the assets of the member/shareholder/partner may be used to satisfy a judgment against the entity (I discussed this several weeks ago here).

Washington Case Law?

Washington’s LLC Act (RCW 25.15.061) states that “courts may consider the factors and policies set forth in established...Read More