        IN THE COURT OF APPEALS OF THE STATE "OF WASHINGTON


 COLUMBIA STATE BANK,	)                         No. 73915-8-1
                            )
                Respondent,	)
                            )                   DIVISION ONE
                V.	)
                                     )          ORDER GRANTING MOTION
 INVICTA LAW GROUP PLLC,	)                      FOR RECONSIDERATION,
                                     )          WITHDRAWING OPINION, AND
                       Defendant,	)             SUBSTITUTING OPINION
        .	                           )
 MARK V. JORDAN, individually and on )
 behalf of the marital community	)
 comprised of MARK V. JORDAN and )
 CYNTHIA JORDAN,	                    )
                                        )
                        Appellants.	)
                                         )

        Respondent Columbia State Bank has filed a motion for reconsideration of

this court's opinion filed on May 22, 2017. The panel has determined that

respondent's motion for reconsideration should be granted. The panel has further

determined that the opinion filed on May 22, 2017, should be withdrawn and a

substitute opinion be filed.

       Now, therefore, it is

        ORDERED that respondent's motion for reconsideration is granted.

        It is further

       ORDERED that the opinion filed on May 22, 2017, is withdrawn and a

       substitute opinion be filed.

       DATED this Zlo*-day of June, 2017.



WE CONCUR:
                                                  /KKrl 6 L/.

                                                    cqy"~ s
          IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON


COLUMBIA STATE BANK,                  )          No. 73915-8-1
                                      )
                                                                                            (f)
                      Respondent,     )                                                     71=

                                      )          DIVISION ONE
                                                                                              CD
                      v.              )                                                            rt
                                      )
INVICTA LAW GROUP PLLC,               )                                                     4.1) m
                                                                                            =7.
                                      )                                                          r"-
                      Defendant,      )                                             E.±):   'r;) Cl)

                                      )                                                     C.)-

MARK V. JORDAN, individually and on )
behalf of the marital community       )
comprised of MARK V. JORDAN       and )          PUBLISHED OPINION
CYNTHIA JORDAN,                       )
                                      )
                      Appellants.     )          FILED: June 26, 2017
                                      )

       MANN, J. — Mark Jordan appeals the trial court's ruling that his sole

proprietorship, Invicta Law Group, was a successor in liability to lnvicta Law Group

PLLC (PLLC)on a promissory note to Columbia State Bank (CSB). Jordan asserts that

the trial court(1) erred in finding that the sole proprietorship is a successor to the PLLC

under the "mere continuation" theory,(2) provided insufficient findings of fact,(3)

abused its discretion in allowing refreshed recollection testimony supporting damages,

and (4) erred in awarding CSB its attorney fees and costs. We affirm.
No. 73915-8-1/2


                                                1

       In 1999, Jordan formed the PLLC and was the sole member and manager. In

February 2012, the PLLC borrowed $165,000 from CSB. In order to do so, the PLLC

entered into several loan agreements including a commercial promissory note (note), a

loan agreement, and a security agreement. Jordan signed all three loan documents as

manager of the PLLC. Jordan also signed the loan agreement individually as guarantor.

       Under the terms of the note, the PLLC was required to make 23 consecutive

monthly payments of $2,377.04 beginning March 20, 2012, at an interest rate of 5.5

percent per year, with a final balloon payment of the balance on February 20, 2014.

The security agreement granted CSB a first-priority security interest to

      [41 Equipment, Inventory, Chattel Paper, Accounts, and General
      Intangibles; whether it is owned now or acquired later; all accessions,
      additions, replacements, and substitutions relating to the Collateral; all
      records and proceeds of any kind relating to the Collateral (including
      insurance, general intangibles and other account proceeds).

       In the event of a default, the loan documents preserved the right for CSB to

accelerate the loan and indebtedness; take immediate possession of the collateral; and

pursue any remedy under any of the loan documents, at law or in equity.

       Both the loan agreement and note included an "Attorneys' Fees and Other Costs"

provision stating, if "legal proceedings are instituted to enforce the terms of this Note,

borrower agrees to pay all costs of the lender in connection therewith, including

reasonable attorneys' fees to the extent permitted by law." The note and security

agreement include a "survival clause" confirming they are binding on all "heirs,

executors, administrators, assigns and successors" of the borrower.



                                          -2-
No. 73915-8-1/3


      On September 30, 2013, Jordan filed for voluntary Chapter 7 bankruptcy. On

January 2, 2014, the bankruptcy court discharged Jordan's personal guaranty on the

loan agreement.

       On the same day he filed for bankruptcy, Jordan also ceased operating as the

PLLC. The PLLC did not file for bankruptcy.

      When Jordan filed for personal bankruptcy, he also stopped (as sole owner and

managing partner) making the PLLC's payments on the note. The PLLC made its last

payment on the loan to CSB in October 2013. The PLLC maintained two bank accounts

at CSB, a general account and an IOLTA1 account. In September and October 2013,

the PLLC deposited fewer and fewer funds into its CSB general account until all funds

were withdrawn on October 25, 2013. The PLLC also withdrew funds held in the CSB

IOLTA account, which historically carried a balance of approximately $20,000 to

$23,000. All funds in the CSB IOLTA account were withdrawn by November 6, 2013.

      The day after filing for personal bankruptcy, Jordan began operating a law

practice known as the Mark V. Jordan sole proprietorship (sole proprietorship). The

sole proprietorship was owned, operated, and controlled by Jordan. Jordan applied for

and received a new tax identification number and a new unified business identifier

number, and he opened new bank accounts at Umpqua Bank and American West Bank

under the name lnvicta Law Group.

       Jordan continued his individual law practice, using the same name, website,

signage, telephone number, offices, insurance, employees, and equipment, and

representing the same clients. Jordan continued to use the full name Invicta Law

      1 IOLTA stands for Interest on Lawyer Trust Accounts.
                                             -3-
No. 73915-8-1/4


Group, PLLC in new client engagement letters for nearly six months. Jordan also

continued under the same contracts as the PLLC, including its lease agreement,

subtenant agreements, existing client agreements, and malpractice insurance

agreement. Jordan continued representing the same clients the PLLC had represented

at the time the PLLC ceased operation. No clients left the PLLC due to its change in

legal structure. Indeed, Jordan did not tell the clients about the change until months

later. Jordan allocated nearly all of his income after September 30, 2013,from clients

and from the sublease agreements, to the sole proprietorship's bank accounts.

       After learning Jordan had filed for bankruptcy, counsel for CSB contacted

counsel for Jordan and notified him that the loan was in default. CSB requested access

to the collateral as well as detailed financial information. Jordan acknowledged the

requests for information and offered to make the collateral available. Jordan never

provided the requested financial information. Jordan moved some office equipment to a

storage facility and sent a storage unit key to CSB. After inspection, CSB declined to

accept the collateral as full or partial satisfaction of the debt. CSB explained that it did

"not wish to take possession of the Collateral or dispose of the Collateral, as the

estimated cost of disposition exceeds the value of the Collateral."

       On February 6, 2014, CSB filed a lawsuit in King County Superior Court against

the PLLC, Jordan, and Jordan's marital community. CSB's complaint alleged causes of

action against the PLLC for breach of contract and for foreclosure of the security

interest. CSB sought recovery against Jordan under a claim of successor liability. After

initial discovery, CSB moved for summary judgment on its claims against the PLLC and

Jordan. On December 17, 2014, the trial court granted summary judgment in favor of

                                           -4-
No. 73915-8-1/5


CSB for its claims against the PLLC. The court denied CSB's motion as it pertained to

the claim against Jordan for successor liability.

       CSB's claim against Jordan for successor liability proceeded to a three-day

bench trial in June 2015. The trial court issued its findings of fact and conclusions of

law on July 9, 2015. The court found in favor of CSB and awarded CSB $151,360.40

against the PLLC and Jordan jointly and severally under the doctrine of successor

liability, holding that Jordan's sole proprietorship was a "mere continuation" of the PLLC.

Specifically, the trial court concluded (1)the PLLC defaulted on the note,(2)the PLLC

transferred all of its assets to Jordan,(3) there was no consideration given by Jordan,

and (4) Jordan was liable for the PLLC's obligations on the note.

       CSB sought to recover $314,662.54 for its attorney fees and costs. After

reviewing the fee petition and supporting declarations, the trial court reduced the

requested fees and awarded CSB $258,045.78 for its attorney fees and costs. The

attorney fees award was also jointly and severally against the PLLC and Jordan

individually. The court entered a judgment and awarded $409,406.18 in damages

against Jordan and the PLLC jointly and severally.

       The trial court's judgment also held that CSB's interest in the collateral identified

in the security agreement was superior to any claim of right or interest by the PLLC or

Jordan. The court directed issuance of a writ of execution for law enforcement to take

possession of the collateral and deliver it to CSB, and for any net proceeds or credits to

be applied against the judgment. Jordan appealed.




                                           -5-
No. 73915-8-1/6


                                             II

       Jordan argues first that CSB's equitable claim for successor liability is precluded

because CSB had an adequate remedy at law. We disagree.

       Successor liability is an equitable claim. A court may grant relief in both law and

equity. GMB Enterprises, Inc. v. B-3 Enterprises, Inc., 39 Wn. App. 678, 687,695 P.2d

145 (1985); Yount v. Indianola Beach Estates, Inc., 63 Wn.2d 519, 525, 387 P.2d 975

(1964). The general rule is that courts will not exercise equity jurisdiction when there is

a clear, adequate, complete, and speedy remedy at law. Gall Landau Young Const.

Co., Inc. v. Hedreen, 63 Wn. App. 91, 99, 816 P.2d 762(1991); see also Roon v. King

County, 24 Wn.2d 519, 166 P.2d 165(1946)(holding equity will not act if there is a

complete and adequate remedy at law). We review the decision of whether to grant

equitable relief de novo. Niemann v. Vaughn Cmty. Church, 154 Wn.2d 365, 374, 113

P.3d 463(2005).

       Jordan argues that the trial court erred in granting equitable relief because CSB

had an adequate remedy at law. Jordan contends that because CSB had the legal

remedy of foreclosure against the PLLC and the collateral under the security

agreement, equitable remedies are barred. Jordan does not dispute CSB's claim that

after inspecting the stored collateral it determined that the "estimated cost of disposition

exceeds the value of the Collateral." Jordan argues instead that it is irrelevant that the

remaining assets of the PLLC and the collateral may not be sufficient to satisfy the

judgment. Jordan ignores that the test for exercising equitable jurisdiction is whether

the plaintiff lacks a "clear, adequate, complete, and speedy remedy at law." Gall, 63

Wn. App. at 99(emphasis added). "Where the remedy by action for damages is

                                          -6-
No. 73915-8-1/7


inadequate or insufficient to do complete justice between the parties, equity will take

jurisdiction and grant proper relief." 30A C.J.S. Equity,§ 25, 237(2007). "[t]he fact that

a plaintiff may have a remedy at law by an action for damages does not prevent equity

from assuming jurisdiction if the equitable remedy is better adapted to render more

perfect and complete justice than the remedy at law." 30A C.J.S. Equity, § 25 at 237.

The trial court's conclusion that CSB was left without an adequate remedy at law was

supported by substantial evidence.

       Jordan relies on Seattle Mortgage Co. v. Unknown Heirs of Gray, 133 Wn. App.

479, 136 P.3d 776 (2006), to support his claim that CSB had an adequate legal remedy

to foreclose on some of the PLLC's physical collateral. Seattle Mortgage did not involve

a claim for successor liability. Instead, the Tacoma Public Utilities department(TPU)

made a $3,186.96 loan secured by a deed of trust on the borrower's residence. After

the borrower defaulted, TPU sought an equitable lien that would have allowed TPU to

terminate utility service to the residence until the loan was paid. Seattle Mortgage, 133

Wn. App. at 499. The court refused to grant the equitable lien because TPU had the

right to foreclose on the borrower's residence, which was worth substantially more than

the loan balance. The court concluded that an equitable lien was not necessary to

prevent injustice. Seattle Mortq., 133 Wn. App. at 500-01.

        Here, the collateral made available by Jordan was not worth the cost of disposal.

All of the other assets that belonged to the PLLC, including its clients and accounts,

were transferred to Jordan's sole proprietorship. Foreclosure on the available collateral

would be inadequate and would not provide a clear, adequate, or complete remedy.



                                          -7-
No. 73915-8-1/8


       Jordan's reliance on Sorenson v. Pyeatt, 158 Wn.2d 523, 544, 146 P.3d 1172

(2006), is similarly misplaced. In Sorenson, our Supreme Court rejected a claim for an

equitable lien against real property because the plaintiff had already obtained an

$868,000 judgment against the defendants based on a deed, and the owner of the real

property was an innocent third party. Sorenson, 158 Wn.2d at 544. The court

concluded that "the Lenders have failed to show how the equities would be served by

requiring, in essence, Sorenson [innocent third party] to bear the burden of satisfying

the Lenders'judgment against the Pyeatts [the defendants]." Sorenson, 158 Wn.2d at

544.

       Here, unlike Sorenson, the trial court found CSB's legal remedy—foreclosure on

the available collateral—inadequate in light of the debt owed. Moreover, Jordan is not

an innocent third party; he is the successor to the PLLC.

       This case is more similar to Gall. Gall concerned an attempt by the Gall Landau

Young Construction Company(GLY)to hold the R.C. Hedreen Company (Hedreen), the

successor to the assets of Parkside Building Company, liable for Parkside's debts to

GLY. Hedreen asserted that the court could not exercise its equitable jurisdiction

because GLY had prevailed against Parkside at the trial court level in bankruptcy court.

Gall, 63 Wn. App. at 99. We disagree because GLY's claim in bankruptcy court was on

appeal and therefore not certain, and also because there was "no guaranty" that GLY's

bankruptcy claim would provide complete relief. Gall, 63 Wn. App. at 99-100.

       Here, CSB prevailed on summary judgment in its claim to foreclose against the

PLLC. However, there is no dispute that the collateral made available to CSB does not

satisfy the amount owed on the debt. Based on this, the trial court concluded that "the

                                         -8-
No. 73915-8-1/9


legal remedies that may be available to Plaintiff do not provide a guarantee that they

would provide complete, or any, relief." Like Gall, CSB should be able to proceed in its

equitable claim for successor liability against Jordan. The trial court did not err in

exercising its equitable jurisdiction and granting both an equitable and a legal remedy.

                                              Ill

       Jordan argues next that the trial court's decision finding successor liability fails

because there is no evidence supporting a transfer of assets from the PLLC to Jordan's

sole proprietorship. We disagree.

       Our review of an appeal from a bench trial is "limited to determining whether a

trial court's findings are supported by substantial evidence, and if so, whether those

findings support the conclusion of law." Am. Nursery Prods., Inc. v. Indian Wells

Orchards, 115 Wn.2d 217, 222, 797 P.2d 477(1990). "Substantial evidence is a

quantum of evidence sufficient to persuade a rational fair-minded person." Sunnyside

Valley Irrig. Dist. v. Dickie, 149 Wn.2d 873, 879, 73 P.3d 369 (2003). "We view the

evidence and all reasonable inferences in the light most favorable to the prevailing

party. State v. Kaiser, 161 Wn. App. 705, 724, 254 P.3d 850 (2011). We do not review

credibility determinations on appeal. Kaiser, 161 Wn. App. at 724. Unchallenged

findings are verities on appeal. In re Estate of Jones, 152 Wn.2d 1, 8, 93 P.3d 147

(2004).

       Washington follows the general rule that "a corporation purchasing the assets of

another corporation does not become liable for the debts and liabilities of the selling

corporation." Cambridge Townhomes, LLC v. Pac. Star Roofinq, Inc., 166 Wn.2d 475,

481-82, 209 P.3d 863(2009). The rationale for this rule is a "bona fide purchaser who

                                           -9-
No. 73915-8-1/10


gives adequate consideration and who lacks notice of prior claims against the property

acquires no liability for those claims." Hall v. Armstrong Cork, Inc., 103 Wn.2d 258, 262,

692 P.2d 787 (1984)). There are, however, exceptions to this general rule. A

successor may be held liable for the debts of a predecessor, where

      (1) there is an express or implied agreement for the purchaser to assume
      liability; "(2) the purchase is a de facto merger or consolidation;(3)the
      purchaser is a mere continuation of the seller; or (4)the transfer of assets
      is for the fraudulent purpose of escaping liability."

Cambridge, 166 Wn.2d at 482(quoting Hall, 103 Wn.2d at 262).

       The trial court found Jordan liable under the "mere continuation" exception to the

general rule. Washington courts rely on several factors to determine whether a

successor business is a mere continuation of a seller. These include (1)"a common

identity between the officers, directors, and stockholders of the selling and purchasing

companies" and (2)"the sufficiency of the consideration running to the seller corporation

in light of the assets being sold." Cambridge, 166 Wn.2d at 482. The objective of the

court when considering these factors is to determine whether the "purchaser represents

merely a new hat for the seller." Cambridge, 166 Wn.2d at 482.(internal quotation

marks omitted)(quoting Cushar v. Redford, 28 Wn. App. 394, 397, 624 P.2d 194

(1981)). The particular form of the business entity is not determinative. Therefore, for

the first factor, where a sole proprietorship is involved, while there can be no

continuation of officers, directors, or shareholders, the court will consider "the continuity

of individuals in control of the business as satisfying this factor." Cambridge, 166 Wn.2d

at 482-83.




                                           -10-
No. 73915-8-1/11


       In Cambridge, a general contractor, Polygon, subcontracted with Gerald Utley

during construction of the Cambridge Townhomes. Utley operated a sole proprietorship

known as P.J. Interprize during his initial work for Polygon. Utley subsequently

incorporated as P.J. lnterprize Inc.(P.J. Inc.) and signed a new contract with Polygon.

Polygon was later sued for construction defects and settled. Polygon then sued various

subcontractors, including P.J. Inc. Polygon did not sue Utley or the sole proprietorship.

Cambridge, 166 Wn.2d at 479-81. Our Supreme Court held P.J. Inc. liable for work

done by Utley prior to the incorporation because (1) the business performed by the two

entities was the same,(2) the same individual was "at the helm" of both entities, and (3)

the clients, at least with respect to Polygon, remained the same. Cambridge, 166

Wn.2d at 483.

       On the second factor, the adequacy of consideration, the court concluded:

      There is no issue of sufficient consideration in this case because there
      was no sale of assets. Utley simply chose to incorporate his business. In
      sum, P.J. Inc. merely represented a new hat for the sole proprietorship.

Cambridge, 166 Wn.2d at 483. Thus, under Cambridge, when an entity merely

changes its entity status but continues in the same business, with the same clients, that

transition meets the requirements for asset transfer under the mere continuation theory.

       In this case, the trial court's unchallenged findings of fact demonstrate that

Jordan's transition from the PLLC to a sole proprietorship was nothing more than a

change in entity status. Like in Cambridge, the business performed by the PLLC and

Jordan's sole proprietorship was the same: a law practice. Similarly, the entity "at the

helm" of both the PLLC and the sole proprietorship was the same: Jordan. And

"[a]lmost without exception, the Sole Proprietorship continued representing the same

                                          -11-
No. 73915-8-1/12


clients the PLLC had represented at the time the PLLC ceased operating." No clients

left the PLLC due to its change in legal structure. Indeed, Jordan did not tell the clients

until months later. In addition, like in Cambridge, there is no issue of sufficient

consideration because there was no sale of assets. Jordan simply chose to quit

operating the PLLC and begin operating the sole proprietorship. Cambridge, 166

Wn.2d at 483.

       Indeed, the evidence of the "mere continuation" between the PLLC and Jordan's

sole proprietorship goes beyond that identified as sufficient in Cambridge. Here, the

sole proprietorship (1) operated at the same location as the PLLC, and had the same

offices, space, signage, telephone number, and address,(2) operated under the same

lease as the PLLC, and between September 30, 2013, and February 2015 continued to

hold itself out to the landlord as the PLLC,(3) used the same office equipment,

furniture, and inventory as the PLLC,(4) used the same contact information as the

PLLC including the same phone number, e-mail address, fax number, letterhead, and

website,(5) used the same employees as the PLLC, and (6) held itself out to its current

and new subtenants as the PLLC including entering a new sublease agreement on

October 31, 2013, under the name of the PLLC, and as the trial court explained, held

itself out to its malpractice insurance carrier as the PLLC for over a year:

      In November 2014, Mr. Jordan informed the PLLC's insurance carrier that
      the PLLC was changing its name to "Bracepoint Law." The name of the
      insured on the PLLC's Professional Liability insurance policy was changed
      from the PLLC to Bracepoint Law by way of a name change endorsement.
      The policy was not terminated. No new policy was issued. During this
      process, Mr. Jordan informed the PLLC's Professional Liability Insurance
      carrier that the Sole Proprietorship (d/b/a Bracepoint Law) was the "true
      successor" of the PLLC.


                                           -12-
No. 73915-8-1/13


       As in Cambridge, the undisputed facts make clear that Jordan's business as a

sole proprietor "merely represented a new hat" for the PLLC.

                                             IV

       Jordan challenges the trial court's findings of fact as being inadequate because

they "lack any specificity" and contained only "conclusory statements." We disagree.

       Under CR 52, a trial court's findings of fact and conclusions of law "must be

sufficiently specific to permit meaningful review." In re Det. of LaBelle, 107 Wn.2d 196,

218, 728 P.2d 138(1986). A trial court is not required to make findings of fact on all

matters raised, but "only those which establish the existence or nonexistence of

determinative factual matters." LaBelle, 107 Wn.2d at 219. The findings "should at

least be sufficient to indicate the factual bases for the ultimate conclusions," although

the "degree of particularity required . . . depends on the circumstances of the particular

case." LaBelle, 107 Wn.2d at 218. When the findings and conclusions are missing or

are defective, the proper remedy is to remand for entry of adequate ones unless the

appellate court is persuaded that sufficient basis for review is present in the record.

Little v. King, 160 Wn.2d 696, 699, 161 P.3d 345 (2007).

       In this case, the trial court provided substantial findings covering all relevant

issues raised. The trial court is not required to describe each finding in detail, only

enough to permit meaningful review. The trial court's findings are sufficient.

       The trial court's unchallenged findings of fact amply support the conclusion that

the sole proprietorship was a "mere continuation" of the PLLC. Jordan, however,




                                           -13-
No. 73915-8-1/14


challenges the trial court's findings of fact 23-34 and 36-38, claiming that they are not

supported by substantial evidence.2

        The majority of the challenged findings, findings 23-34, concern the "transfer" of

the PLLC's assets to the sole proprietorship.3 For findings of fact 23-34, Jordan

maintains they are not supported by substantial evidence because there was no formal

assignment or sale where the PLLC formally agreed to transfer the assets to the sole

proprietorship. Jordan argues that CSB cannot demonstrate that the PLLC transferred

any of the PLLC's assets (the lease, the rights to the security deposit on the lease, the

value of the tenant improvements, the rights to the sublease payments, the clients'

payments and agreements, the use of the office equipment, the contact information, and

the company name and goodwill) to the sole proprietorship because there was no



    2 Jordan fails to provide argument supporting his challenge to findings of fact 37 and 38. Failure to
provide argument and citation to authority in support of an assignment of error precludes appellate
consideration of the alleged error. Cowiche Canyon Conservancy v. Bosley, 118 Wn.2d 801, 809, 828
P.2d 549(1992); RAP 10.3.
    3 Findings of fact 23-34 provide:


    23. The PLLC transferred all of its physical assets to the Sole Proprietorship.
    24. The PLLC transferred the right to use the PLLC's space to the Sole Proprietorship.
    25. The PLLC transferred its rights in its existing subleases, including the subtenant rents
        owed and paid to the PLLC, to the Sole Proprietorship.
    26. The PLLC transferred its rights in existing client contracts to the Sole Proprietorship.
    27. The PLLC transferred client fees paid for work done by the PLLC to the Sole
        Proprietorship.
    28. The PLLC transferred the PLLC's client list to the Sole Proprietorship.
    29. The PLLC transferred the PLLC's existing client relationships and any goodwill generated
        therefrom to the Sole Proprietorship.
    30. The PLLC transferred the PLLC's trade name to the Sole Proprietorship.
    31. The PLLC transferred security deposit funds owned by PLLC to the Sole Proprietorship.
    32. The PLLC transferred all benefits associated with the PLLC's insurance contracts to the
        Sole Proprietorship.
    33. The PLLC transferred the value and benefits of all tenant improvements paid for by the
        PLLC and used by Sole Proprietorship in the office space at 2775 Harbor Avenue,
        Seattle, Washington to the Sole Proprietorship.
    34. The PLLC transferred every aspect of the PLLC which would be needed to start a law
        practice to the Sole Proprietorship.


                                                 -14-
No. 73915-8-1/15


writing indicating that he did so. However, as in Cambridge, no legal transfer was

required, as Jordan owned the past business and simply continued using the assets for

his new business. See Cambridge, 166 Wn.2d at 483.

       It is undisputed that Jordan testified at trial that the PLLC ceased operating on

September 30, 2013. Jordan also testified that after filing for bankruptcy and becoming

a sole proprietorship, he continued his law practice, using the same name, offices,

insurance, employees, equipment, clients, and contact information as the PLLC.

Regardless of whether there was a formal document transferring assets, the assets

were transferred. Under Washington law, "[I]iability may be imposed regardless of the

exact form of transfer of assets between the corporations." Eagle Pac. Ins. Co. v.

Christensen Motor Yacht Corp., 135 Wn.2d 894, 901, 959 P.2d 1052(1997); see also

Stoumbos v. Kilimnik, 988 F.2d 949, 961 (9th Cir. 1993)("We conclude that the

Washington court would extend liability to transfers other than straightforward

purchases. Otherwise, unscrupulous businesspersons would be able to avoid

successor liability and cheat creditors merely by changing the form of the transfer.").

       Jordan next claims that there is no evidence to support finding of fact 36.

Finding of fact 36 provides:

       The PLLC secretly transferred accounts received (AR)to the Sole
       Proprietorship. The value of the accounts receivable was significant—
       according to the PLLC's journal ledger for May 31, 2013 through
       September 30, 2013. The firm brought in $396,462.06 (Exhibits 76).
       Notably, the Sole Proprietorship generated $557,202.00 from these same
       clients from January—November 2014 (Exhibit 76).

Jordan does not dispute the income levels referenced by the trial court. He instead

asserts that because the ledgers show he earned less per month in 2014 than he did in


                                         -15-
No. 73915-8-1/16


2013, the evidence does not prove that the accounts were transferred from the PLLC to

the sole proprietorship. We disagree.

       On September 30, 2013, Jordan opened a new bank account using the name

"Invicta Law Group" for the sole proprietorship. Jordan then began depositing client

checks and sublease checks made out to the PLLC into the sole proprietorship bank

accounts. Jordan also uninterruptedly used the full name Invicta Law Group PLLC in

new client engagement letters for nearly six months after switching to the sole

proprietorship. While CSB provided only one document showing the client check

included work done before becoming a sole proprietor, the trial court reasonably

concluded that the billings that came in over the next couple of months likely included

work done while working for the PLLC.

      The trial court's findings of fact are supported by substantial evidence and

support its conclusion that the sole proprietorship was a mere continuation of the PLLC.

                                            V

      The trial court found that as of May 4, 2015, the PLLC and its successor owed

CSB $151,360.40 based on the principal sum of $130,034.21, plus $20,850.69 in

interest and $475.40 in late fees. Evidence of the amount owed was introduced through

the testimony of CSB employee Alana Rouff. Jordan argues that Rouffs testimony was

inadmissible, and therefore, there was no admissible evidence supporting the award.

We disagree.

      At trial, Rouff testified that she was CSB's vice president and special credit

workout officer. After identifying the original promissory note between CSB and the

PLLC, she was asked how much was currently owed to CSB. After she could not

                                         -16-
No. 73915-8-1/17


remember, counsel for CSB showed Rouff a copy of the most recent payoff statement

and asked if the document refreshed her memory. Rouff answered yes. Counsel for

Jordan objected to the testimony, claiming that the printout was hearsay. The trial court

overruled the objection:

       I'm going to overrule your objection, and the reason I'm overruling the
       objection is because she's testified with respect to her position at the
       bank, her familiarity with the records associated with the note, Exhibit 7,
       and that she would have knowledge of this in the normal course of her
       profession. I'm also satisfied that the document that's been shown to her,
       Exhibit 85, had independently refreshed her memory. And what she's
       testifying to is not simply the document, but her memory now that it has
       been refreshed.

       After counsel for Jordan restated the objection, the trial court allowed counsel to

question the witness. At the conclusion of the voir dire, the court again overruled the

objection. After reviewing the payoff statement, Rouff testified that as of June 1, 2015,

the amount due was $152,422.24.

       Jordan maintains that the testimony was inadmissible because the printout CSB

provided to Rouff to refresh her recollection about the amount owed on the loan was

inadmissible hearsay that did not refresh her recollection but instead informed her of the

information so that she could read it on the stand.

       Under ER 612,a witness may use a writing to refresh his or her memory while

testifying. Allowing the use of notes to refresh the memory of a witness lies within the

discretion of the trial court. State v. Huelett, 92 Wn.2d 967, 969,603 P.2d 1258 (1979).

The extent to which the witness may use such a memorandum is for the trial court in its

discretion to determine, and its ruling will not be disturbed unless there has been an

abuse of such discretion. Huelett, 92 Wn.2d at 969. Such abuse occurs only if no


                                          -17-
No. 73915-8-1/18


reasonable person would take the view adopted by the trial court. Huelett, 92 Wn.2d at

969 (citing State v. Blight, 89 Wn.2d 38,41, 569 P.2d 1129 (1977)).4

        A writing used solely to refresh the witness's memory has few limitations. The

writing "need not be admissible as evidence" and "need not satisfy the hearsay and best

evidence rules." 5A KARL B. TEGLAND, WASHINGTON PRACTICE: EVIDENCE LAW AND

PRACTICE § 612.4, 612.2 (6th ed. 2016). The writing also "need not have been prepared

by the witness." Id. § 612.4. "The primary evidence is the oral statement of the.. .

witness. It is not so important when the statement was made or by whom if it serves the

purpose to refresh the mind and unfold the truth." United States v. Riccardi, 174 F.2d

883, 888(3d Cir. 1949)(quoting Hoffman v. United States, 87 F.2d 410, 411 (9th Cir.

1937)). The witness's "testimony is the evidence, the writing is not." State v. Little, 57

Wn.2d 516, 520, 358 P.2d 120(1961).

        The criteria for refreshing a witness's recollection are "(1) that the witness'

memory need refreshing,(2) that opposing counsel have the right to examine the

writing, and (3) that the trial court be satisfied that the witness is not being coached—

that the witness is using the notes to aid, and not to supplant, his own memory." Little,

57 Wn.2d at 521. Here, the criteria were met. Rouff testified that she could not recall

the exact loan balance. Counsel for Jordan then had the opportunity to review the

document, question Rouff, and then cross-examine Rouff. The trial court held "that the


        "Jordan argues that this court should review de novo whether the document used to refresh
Rouff's recollection was hearsay. However, de novo review is limited to determinations of whether
hearsay statements are admissible as evidence. Here, the document was never admitted into evidence,
and a writing need not be admissible as evidence when it is used solely to refresh the witness's memory.
5A KARL B. TEGLAND, WASHINGTON PRACTICE: EVIDENCE LAW AND PRACTICE § 612.4 (6th ed. 2016).
Therefore, although this court reviews whether a statement was hearsay de novo, this court reviews
whether a witness may use a document to refresh her recollection for abuse of discretion.
                                                -18-
No. 73915-8-1/19


document that's been shown to her. . . had independently refreshed her memory. And

what she's testifying to is not simply the document, but her memory now that it has been

refreshed."

       Jordan cites Podbielancik v. LPP Mortg., Ltd, 191 Wn. App. 662, 667, 362 P.3d

1287 (2015), to support his claims that Rouff could not use the printout to refresh her

recollection because it was inadmissible and not in evidence. Podbielancik is not

applicable. In Podbielancik, the witness recited the contents of a document in a

declaration without attaching the document to the declaration. This court held "the

business records exception does not permit affidavits testifying to the contents of

documents that are not in the record." Podbielancik, 191 Wn. App. at 667. This holding

is irrelevant in a case regarding documents used to refresh the witness's recollection, in

that those documents are not required to be admissible or admitted as evidence.

       The trial court did not abuse its discretion in allowing Rouff's testimony.

       Further, even if the trial court had abused its discretion in allowing the document

to refresh Rouff's recollection, the error was harmless. An erroneous evidentiary ruling

does not result in reversal unless the defendant was prejudiced. State v. Thomas, 150

Wn.2d 821, 871, 83 P.3d 970(2004). Where the error results from a violation of an

evidentiary rule, the "'error is not prejudicial unless, within reasonable probabilities, the

outcome of the trial would have been materially affected had the error not occurred."

Thomas, 150 Wn.2d at 871 (quoting State v. Tharp, 96 Wn.2d 591, 599,637 P.2d 961

(1981)). "The improper admission of evidence constitutes harmless error if the

evidence is of minor significance in reference to the overall, overwhelming evidence as



                                           -19-
No. 73915-8-1/20


a whole." Thomas, 150 Wn.2d at 871 (quoting State v. Bourcieois, 133 Wn.2d 389,

403, 945 P.2d 1120 (1997)).

       Damages must be proven with reasonable certainty. Lewis River Golf, Inc. v.

O.M. Scott & Sons, 120 Wn.2d 712, 717, 845 P.2d 987(1993). The doctrine of

reasonable certainty is "concerned more with the fact of damage than with the extent or

amount of damage." Gaasland Co. v. Hyak Lumber & Millwork, Inc., 42 Wn.2d 705,

712, 257 P.2d 784(1953)(emphasis omitted). Once the fact of loss is proved with

reasonable certainty, uncertainty or difficulty in determining the amount of the loss will

not prevent recovery. Lewis River, 120 Wn.2d at 717-18. Evidence of damage is

sufficient if it gives the trier of fact a reasonable basis for estimating the loss and does

not require mere speculation or conjecture. Clayton v. Wilson, 168 Wn.2d 57, 72, 227

P.3d 278(2010).

       In this case, the evidence presented, even disregarding Rouffs testimony, was

sufficient to provide the trial court with "a reasonable basis for estimating the loss."

Clayton, 168 Wn.2d at 72. The record included the note and other loan documents,

which contained (1) the loan amount,(2)the date of first payment,(3) the date of

maturity,(4)the payment amounts,(5)the interest rate, and (6) all penalty provisions.

From the evidence provided, the trial court could determine the amount owed on the

loan. In fact, the record indicates that the trial court considered other evidence besides

Rouff's testimony, as the final damage award differed slightly ($151,360.40)from the

amount provided by Rouff($152,422.24).




                                           -20-
No. 73915-8-1/21


                                              VI

       Jordan argues finally that the trial court erred in awarding attorney fees and costs

to CSB under the attorney fee provision in the note, which provided for an award of fees

in any legal proceeding to enforce the terms of the note. We disagree.

       Whether a party is entitled to attorney fees is an issue of law that we review de

novo. Boquch v. Landover Corp., 153 Wn. App. 595, 615, 224 P.3d 795(2009). The

general rule in Washington, commonly referred to as the "American rule," is that each

party in a civil action will pay its own attorney fees and costs. Cosmo. Eng'g Grp., Inc.

v. Ondeo Deqremont, Inc., 159 Wn.2d 292, 296, 149 P.3d 666 (2006). Attorney fees

and costs "may be recovered only when authorized by a private agreement of the

parties, a statute, or a recognized ground of equity." Penn. Life Ins. Co. v. Dep't of

Emp't. Sec., 97 Wn.2d 412, 413,645 P.2d 693(1982).

       A prevailing party in a contract action may recover attorney fees under a

contractual fee shifting provision such as the one at issue here "only if the party brings a

'claim on the contract,' that is, only if the party seeks to recover under a specific

contractual provision." Boguch, 153 Wn. App. at 615. If the claimed breach of duty is

based on another source, such as a statute or the common law, "the party does not

bring an action on the contract, even if the duty would not exist in the absence of a

contractual relationship." Boguch, 153 Wn. App. at 615. "[P]n action is on a contract for

purposes of a contractual attorney fees provision if the action arose out of the contract

and if the contract is central to the dispute." Tradewell Grp., Inc. v. Mavis, 71 Wn. App.

120, 130, 857 P.2d 1053(1993). "Stated differently, an action 'sounds in contract when

the act complained of is a breach of a specific term of the contract, without reference to

                                           -21-
No. 73915-8-1/22


the legal duties imposed by law on that relationship." Boquch, 153 Wn. App. at 616

(quoting G.W. Constr. Corp. v. Prof] Serv. Indus., Inc., 70 Wn. App. 360, 364, 853 P.2d

484 (1993)).

        Here, it is undisputed that the underlying action was against the PLLC for breach

of the note. The note is central to the dispute with Jordan. Jordan's liability as the

successor of the PLLC arises from and directly depends upon the action to enforce the

note against the PLLC.

        CSB relies principally on two California cases, Brown Bark III, L.P. v. Haver and

Reynolds Metals Co. v. Alperson, to support the argument that Jordan is liable for

attorney fees as the successor.5 In Reynolds, the California Supreme Court held that an

"alter ego" of a company would be liable under the contracts fee provision. Reynolds

Metals Co. v. Alperson, 25 Cal. 3d 124, 129, 599 P.2d 83, 158 Cal. Rptr. 1 (1979).

Relying on Reynolds, the California Court of Appeals more recently held that a

nonsignatory to a contract could recover attorney fees under the contract for

successfully defending against a claim for successor liability. Brown Bark III, L.P. v.

Haver, 219 Cal. App. 4th 809, 824, 162 Cal. Rptr. 3d 9(2013).

        In Brown Bark, the plaintiff, Brown Bark III, L.P., originally sued Westover

Financial to recover the balance on a line of credit plus interest, penalties, and attorney

fees. Around the time the action was filed, Westover Financial dissolved. The plaintiff

then amended its complaint to add Westover Capital based on a theory of successor

liability. The plaintiff claimed Westover Capital was merely a continuance of Westover

        5 CSB    also relies on an unpublished Minnesota Court of Appeals case, where the court held that
the trial court did not err in awarding costs against the successor company because the underlying
judgment resulted from the contractual dispute. Schwartz v. Virtucom, Inc., No. A08-1059, 2009 WL
1311816(Minn. Ct. App. May 12, 2009)(unpublished).
                                                 -22-
No. 73915-8-1/23


Financial. After trial, Westover Capital prevailed in defeating Brown Bark's claim of

successor liability. Brown Bark, 219 Cal. App. 4th at 821-22. In response to Westover

Capital's request for attorney fees under the line of credit contract, Brown Bark argued

that it did not sue Westover Capital on the contract, but instead sued Westover Capital

on the successor liability claim only. Brown Bark, 219 Cal. App. 4th at 822.

       The California Court of Appeals disagreed, explaining:

       [s]uccessor liability is not a separate claim independent of Brown Bark's
       breach of contract claims. To the contrary, successor liability is an
       equitable doctrine that applies when a purchasing corporation is merely a
       continuation of the selling corporation or the asset sale was fraudulently
       entered to escape debts and liabilities. Successor liability requires an
       underlying cause of action and merely extends the liability on that cause of
       action to a corporation that would not otherwise be liable.

Brown Bark, 219 Cal. App. 4th at 822-23 (citations omitted).

       California and Washington case law apply similar standards for finding fees

under a contract, so these California cases are persuasive. We agree with the

California courts that a claim for successor liability follows an underlying cause of action

for breach of contract and merely exists to extend "the liability on that cause of action to

a corporation that would not otherwise be liable." Brown Bark, 219 Cal. App. 4th at 822-

23. We also agree that the successor becomes liable under the contract, including the

provision for attorney fees.

       Jordan relies heavily on our decision in Boquch to support his argument that

CSB's action was not an action to enforce the note. But Boquch is readily

distinguishable. In Boquch, the plaintiff entered an exclusive sale and listing agreement

for the sale of his property. After the property failed to sell, the plaintiff discovered that

the aerial photograph of the property posted on the MLS website contained incorrect

                                           -23-
No. 73915-8-1/24


boundary lines that made the property look unevenly narrow in places. Boguch sued

the listing agents for negligence, for breaching their professional duties under chapter

18.86 RCW and for a breach of contract under the listing agreement. Boguch, 153 Wn.

App. at 601-03. The trial court granted summary judgment dismissing all of Boguch's

claims and awarded the defendants their attorney fees under the listing agreement.

We reversed the award of attorney fees on appeal. In doing so, we explained, that the

common law and statutory duties of care were independent of the contract:

      Although [the defendant's] duty to Boguch arose because the parties
      entered into a contractual relationship, the listing agreement itself does not
      specify the duty of care that the Realtor must provide. To the contrary, the
      common law and chapter 18.86 RCW imposed a duty to exercise
      reasonable care on the Realtors. Although the statute may be read as
      being incorporated into the listing agreement by reference, it does not
      follow that any act taken in fulfillment or derogation of that duty constitutes
      specific contractual performance or breach thereof.

Boquch, 153 Wn. App. at 617.

       But here, as discussed by the California court in Brown Bark, CSB's successor

liability claim against Jordan is not a separate claim independent of the PLLC's breach

of contract claims. "Successor liability requires an underlying cause of action and

merely extends the liability on that cause of action to a corporation that would not

otherwise be liable." Brown Bark, 219 Cal. App. 4th at 823. In other words, but for the

contract claim against the PLLC, CSB would not have an independent claim for

successor liability against Jordan.

       Jordan relies also on our recent decision in 4518 S. 256th LLC v. Karen L.

Gibbon, PS, 195 Wn. App. 423, 382 P.3d 1 (2016), in support of his argument that




                                         -24-
No. 73915-8-1/25


because he was not a party to the original note, he cannot be held liable for attorney

fees under the note. In Gibbon we explained:

               Although the deed of trust is central to this controversy, the parties
      fail to recognize that the LLC was not a party to the deed of trust.
      Additionally, as we just discussed, the LLC did not assume or agree to pay
      the loan on acquisition of title.

             In Watkins v. Restorative Care Center, Inc., this court held that a
      contractual attorney fee provision cannot authorize the recovery of fees
      from a nonparty. 66 Wn. App. 178, 194, 831 P.2d 1085 (1992). It
      reasoned that it "would be both unfair and contrary to law" to enforce the
      provision against the nonparty who was a "stranger[ ]" to that agreement.
      66 Wn. App. at 195.

             The same reasoning applies in this case. Because the LLC was
      not a party to the deed of trust, it would be contrary to law to enforce the
      attorney fee provision in that document against it. Similarly, because a
      contract does not confer benefits on nonparties, it would be also contrary
      to law to award attorney fees to the LLC based on the deed of trust.

Gibbon, 195 Wn. App. at 447-48 (alteration in original).

       But here, while Jordan was not a party to the loan agreements with CSB, Jordan

was certainly not a "stranger" to the agreements. He signed all of the documents on

behalf of the PLLC. Moreover, successor liability exists in equity to protect creditors

from debtors that attempt to change corporate form, sell off their assets, or merge with

another company in an attempt to avoid their debts. The "mere continuation" theory

was specifically designed to prevent a company from escaping liability "by merely

changing hats," i.e., transferring all of the company's assets and continuing business in

another form. Gall, 63 Wn. App. at 96-97. Once the trial court found Jordan was a

"mere continuation" of the PLLC, he assumed the liabilities incurred by the PLLC. See

Cambridge, 166 Wn.2d at 483.



                                          -25-
No. 73915-8-1/26


       Indeed, the very doctrine of successor liability contemplates liability against

nonsigning third parties. The concept is that liability rests against the original entity to

the contract but that the plaintiff cannot recover under the contract because the liable

entity has transferred assets to a separate entity as a way of avoiding the obligation.

There is fundamentally no difference between successor liability for judgment on the

unpaid note and successor liability for attorney fees. Both are assessed initially against

the liable party and then flow to the successor.

       We affirm the trial court's award of attorney fees and costs to CSB.

                                               VII

       CSB's request for attorney fees on appeal is granted subject to compliance with

RAP 18.1.

       We affirm the trial court's decision.




WE CONCUR:




                                            -26-
