Alliant Credit Union v. Imelda Abrego

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

ALLIANT CREDIT UNION, )
r...3 (PC)
) DIVISION ONE
Respondent, ) a's?.2x
t=3 rn c>
) No. 76669-4-1 rn
V. ) c. r
) 7:y.-0rri
(prn
IMELDA ABREGO, individually, and ) UNPUBLISHED OPINION
the marital community composed of )
IMELDA ABREGO and JOHN DOE )
ABREGO, husband and wife, )
)
Appellant. ) FILED: December 31, 2018
)

DWYER, J. — Imelda Abrego obtained a loan from Alliant Credit Union on

which she subsequently defaulted. Alliant sued Abrego for breach of contract

and was granted summary judgment. On appeal, Abrego asserts that a factual

dispute existed as to whether she personally applied for and obtained the loan

and that the trial court improperly dismissed her counterclaims against Alliant and

its attorneys for abuse of process. Finding no error, we affirm.

Alliant Credit Union received a vehicle loan application from Imelda

Abrego on October 31, 2014. The loan application related to Abrego's

request for the financed acquisition of a 2014 Mercedes GL 450. The

application inputs included Abrego's name, e-mail, income, employer, and

a VIN for the Mercedes.
No. 76669-4-1/2

On November 3, Abrego sent Alliant a copy of the purchase

agreement for the Mercedes and earnings statements for two periods in

October 2014. The purchase agreement showed the total purchase price

of the Mercedes to be $74,419, with $9,419 to be paid directly by Abrego

to the dealership and $65,000 to be financed by Alliant. This purchase

agreement listed Abrego's home address, date of birth, driver's license

number, and home telephone number.

The next day, Alliant's loan officer, Lukas Gagainis, telephoned

Abrego at her landline number and had a conversation with Abrego that

was recorded by Alliant. Abrego verified a number of personal identifier

questions during the call. Gagainis informed Abrego that she would need

to become an Alliant member to proceed with her loan application.

Gagainis also advised Abrego that he would be out of the office the

following day, November 5, and gave Abrego the name and telephone

number of his supervisor, Andy Vostatek, so that she could telephone him

to close on the loan details once she was approved for membership.

On November 5, Abrego submitted a membership application to

Alliant to facilitate approval of her loan application and, that same day,

telephoned Vostatek from her landline. During the call, she verified her

Social Security number, date of birth, and ZIP code. Vostatek advised

Abrego that she could expect an e-mail from Alliant's loan processing

department that would subject her to a security verification process.

During that call, Abrego confirmed that the $65,000 loan advance check

2
No. 76669-4-1/3

would be made jointly payable to her and to the Mercedes dealership and

sent via Federal Express to her home address in Seattle. She also

confirmed that monthly loan payments would be due on the 20th of each

month.

After this telephone call took place, another Alliant employee

prepared the loan documents and e-mailed them to Abrego via Docu-Sign,

a company that provides authentication services to facilitate the electronic

execution of contracts. Pursuant to Docu-Sign's authentication process,

Abrego was required to correctly answer 18 security questions to access

the loan documents and electronically sign them. The authentication

questions were highly specific to Abrego, asking for information that

included several prior street addresses, past vehicles owned or leased,

and information about Abrego's relatives. Docu-Sign's certificate of

completion shows that Abrego authenticated this security protocol and

electronically signed the loan documents. The loan documents

electronically signed by Abrego included a loan and security agreement,

vehicle title requirement instructions, a notice to provide physical damage

insurance, and authorization for Automated Clearing House automated

payments on the loan. To authorize these automated payments, Abrego

identified her personal Bank of America account from which monthly

payments of $973.84 were to be withdrawn.

Following Abrego's execution of these loan documents, Alliant

purchased a $65,000 check from Moneygram Payment Systems, which

3
No. 76669-4-1/4

was made jointly payable to Imelda Abrego and to Lauderdale Luxury

Automotive. On November 6, Alliant sent this check to Abrego's address

via Federal Express's overnight shipping option. Abrego admits receiving

this check. But she did not send it on to the dealership. Instead, she

overnighted the check to Deon Glover in Miami, Florida. Abrego later

claimed that she did this in lieu of taking a planned trip to Florida to buy

the Mercedes.

Abrego made her first $973.84 monthly payment on the loan on

December 20, 2014, and continued making monthly payments until her

failure to make the May 20, 2015 payment placed her in default.

During this time, however, Abrego did not provide Alliant with a

vehicle title or with proof of insurance as the terms of the loan required.

On February 4 and again on March 6, Alliant sent letters to Abrego

reminding her of her obligation to provide it with the original title. Also in

March, an Alliant employee called Abrego to remind her of the title

obligation and to inform her that her monthly payments would increase

due to Abrego's failure to provide proof of insurance on the Mercedes.

Abrego then obtained insurance on the Mercedes and provided Alliant

with proof of this insurance, resulting in her monthly payments remaining

at $973.84.

However, Abrego still did not provide Alliant with a vehicle title. On

April 7, an Alliant representative telephoned Abrego to speak with her

regarding the title. Abrego stated, in response, that she had forgotten to

-4
No. 76669-4-1/5

call the dealership about the title and that she would do so the same day.

A follow-up call from Alliant on April 23 met with similar results—Abrego

assuring the Alliant representative that she would contact the dealership.

Then, on May 5, Abrego, for the first time, affirmatively stated that

she did not have the title to the vehicle and that she had "co-signed for

friend." Following her default later that month, Abrego telephoned Alliant's

fraud unit to state that the Mercedes was not in her possession, and that

she "was part of a business where the vehicle was to be used for business

purposes," but that she was scammed and the vehicle did not exist.

Following several months during which the loan remained in default,

Alliant filed suit against Abrego in the King County Superior Court.

Not long before the trial court was to enter a default judgment

against her, Abrego filed a bankruptcy petition, causing Alliant's litigation

to be stayed. In her bankruptcy schedules, Abrego identified the

Mercedes as a personal asset and the loan from Alliant as an undisputed

personal debt. Alliant's counsel subsequently issued a bankruptcy

subpoena and, on February 4, 2016, deposed Abrego. In this deposition,

Abrego made several admissions regarding the loan.

Abrego testified that the loan was part of a scheme entered into

with two Florida men who led her to believe that they would start a

business with her and that each of the three would contribute $130,000 in

seed money. She further testified that she financed her $130,000

contribution through the $65,000 loan from Alliant and another $65,000

5
No. 76669-4-1/6

loan from SunTrust Bank, and that she delegated the task of completing

the loan applications to the two men. Finally, she admitted that she

understood that the loans were to be taken out in her name before being

assumed by the business.

Abrego also provided documents responsive to Alliant's subpoena,

including a police report intake form for the North Miami Police

Department in which she stated that she "obtained" the loan from Alliant.

Abrego also produced several e-mails that she had sent to the Florida

men acknowledging that the debt was in her name and seeking further

cooperation to have the business assume the debt.1

Following Abrego's deposition, both Alliant and the bankruptcy

trustee filed independent nondischargeability complaints against Abrego in

the bankruptcy court premised upon fraud and related allegations.

Ultimately, Abrego stipulated to a waiver of discharge, which was

approved by the bankruptcy court's order of June 24, 2016. This order

stated that "any and all claims, debts, and liabilities of[Abrego] arising

before November 25, 2015.. . are not discharged and are hereby

deemed nondischargeable to the fullest extent of the law."

Until this point, Abrego had been represented by an attorney.

Following the dismissal of her bankruptcy petition and the lifting of the

automatic stay on Alliant's litigation, Abrego, now pro se, filed an answer,

counterclaims against Alliant, and cross claims against its attorneys,

The business was incorporated in Florida as SMGZ Group LLC.

-6 -
No. 76669-4-1/7

Turnbull & Born, PLLC, and Brian M. Born, individually.2 The trial court

granted Alliant's motion for summary judgment, awarding Alliant judgment

in the amount of $65,005.64 plus costs in the amount of $818.89. The

court denied Abrego's cross motion for summary judgment and dismissed

her counterclaims and third party claims. Subsequently, the trial court

entered its findings of fact and conclusions of law and an amended

judgment awarding Alliant $21,700 in attorney fees. Abrego appeals.

11

Abrego first contends that summary judgment was improperly granted to

Alliant on its breach of contract claim. This is so, she avers, because an issue of

material fact existed as to whether she personally applied for and obtained the

loan in question, and because Alliant was not entitled to judgment as a matter of

law. We disagree.

Summary judgment is proper when the record shows that there is no

genuine issue as to any material fact and that the moving party is entitled to

judgment as a matter of law. CR 56(c). We review an order of summary

judgment de novo, performing the same inquiry as does the trial court. Mohr v.

Grant, 153 Wn.2d 812, 821, 108 P.3d 768 (2005). The facts and all reasonable

inferences drawn therefrom are construed in the light most favorable to the

nonmoving party. In re the Estates of Jones, 170 Wn. App. 594, 603, 287 P.3d

610 (2012). Once a motion for summary judgment has been brought, however,

the opposing party must produce specific evidence, either through affidavits or

2 Abrego alleged that Alliant and its attorneys committed the tort of abuse of process.

-7-
No. 76669-4-1/8

admissible evidence, demonstrating that a factual dispute exists or that the

moving party, under the law, is not entitled to judgment. CR 56(e).

In considering whether a nonmoving party has shown the existence of a

factual dispute, Washington courts employ the "sham affidavit" rule. Taylor v.

Bell, 185 Wn. App. 270, 294, 340 P.3d 951 (2014). Under this rule, when a party

has earlier rendered clear answers to unambiguous deposition questions that

negate the existence of any genuine issue of material fact, that party cannot

thereafter create such an issue by providing an affidavit that merely contradicts,

without explanation, previously given clear testimony. •Bell, 185 Wn. App. at 294;

Marshall v. AC&S, Inc., 56 Wn. App. 181, 185, 782 P.2d 1107 (1989). The rule is

a narrow one, as the self-serving affidavit must "directly contradictO" the affiant's

previous "unambiguous sworn testimony." Kaplan v. Nw. Mut. Life Ins. Co., 100

Wn. App. 571, 576, 990 P.2d 991 (2000). If the subsequent affidavit offers an

explanation for the variance from the previously given testimony, the trier of fact

should determine the explanation's plausibility and summary judgment should

thus be denied. Safeco Ins. Co. of Am. v. McGrath,63 Wn. App. 170, 175, 817

P.2d 861 (1991).

Alliant avers that the sham affidavit rule applies to Abrego's contention

that she never applied for the $65,000 loan nor authorized others to do so in her

name. Alliant points to several statements in the record that contradict this

assertion and would, thus, negate any issue of material fact. Among these is

Abrego's statement given to North Miami police, dated November 23, 2015

(shortly before the commencement of bankruptcy proceedings), that she

8
No. 76669-4-119

"obtained a loan for the business in the amount of $65,000.00 from Alliant Credit

Union." This statement is accompanied by a written declaration:

I, [Imelda Abrego], certify under oath and under penalty of
perjury that the below statement is true and correct. I further certify
that the below statement is made by me freely and voluntarily and
without threat or promise of any kind.

Under Florida law, this declaration allows the police report to be

considered a verified document equivalent to a sworn affidavit.3 Thus, Abrego's

statement that she "obtained a loan" is an unambiguous sworn statement that

directly contradicts her later testimony. Furthermore, Abrego does not offer any

explanation for the inconsistency between this statement and her current

averment. Abrego has thus failed to demonstrate that a genuine dispute of

material fact exists.

Alliant is also entitled to judgment as a matter of law on its claim for

breach of contract. Alliant has proved all of the elements required for a

successful breach of contract claim: the parties formed a valid contract, Alliant

performed its obligations pursuant to the contract (providing a check for the full

amount of the loan), Abrego breached this contract when she defaulted, and

Alliant has suffered and continues to suffer damages as a result of Abrego's

default.

Abrego's assertion that a contract was not formed is belied by Abrego's

admission otherwise, discussed above. Alliant performed on the contract by

providing the loan funding and Abrego breached the contract by defaulting.

3 FLA. STAT. § 92.525.

9
No. 76669-4-Ill0

Abrego claims that Alliant did not actually suffer damages, citing a Florida

department of motor vehicles record for the Mercedes that she never purchased,

which states that there is no lien on the vehicle. Abrego would have us infer that

the vehicle was purchased with Alliant's loan funds but that an unknown third

party then paid off the loan. In fact, Abrego never purchased the vehicle, nor did

she provide Alliant with the title thereto, nor did Alliant receive payment on the

loan after Abrego defaulted. Indeed, that there is no lien is unsurprising given

that Abrego never purchased the vehicle.

In her cross motion for summary judgment, Abrego presented several

defenses to contract formation, none of which are availing.4

Abrego's primary argument appears to be that she should be relieved of

her obligations because she is the victim of a scam. However, the actions of

third parties do not affect Abrego's liability under the agreement. Abrego

admitted obtaining the loan. Whether she applied for the loan herself or

delegated this task to others, no party could have accessed the loan documents

without the extensive personal information needed to clear the online security

protocol. Abrego confirmed the details of the loan in a recorded telephone call

and subsequently received the check. Once Alliant funded the loan pursuant to

the agreement and delivered the check to Abrego, Abrego's obligation was fixed.

Abrego chose to overnight the check to Deon Glover and not to present it

to the dealership, in violation of the terms of the loan. Moreover, she did not

4 On appeal, Abrego raises additional defenses that, pursuant to RAP 9.12, will not be
considered as they were not raised in the trial court.

-10-
No. 76669-4-1/11

disclose to Alliant that the vehicle was supposedly being purchased for a

"business" or that she would rely on her "business partners" to pay off the debt.

Instead, she made loan payments for five months and, in a further effort to keep

the ruse alive, even took out an insurance policy on a vehicle that she had never

purchased. She also assured Alliant that she would be able to produce the title

to the vehicle despite having had no contact with the dealership. Abrego's

claimed subjective expectation, undisclosed to Alliant until after her default, that

third parties would pay off the loan is wholly immaterial to the question of her

liability.

Abrego also asserts that she should not be liable for the debt on the

theory that Alliant should not have disbursed funds from a check that lacked the

dealership's endorsement. This assertion ignores the fact that Alliant, as the

purchaser and drawer of the check, had no connection to the clearinghouse

transaction pursuant to which the funds were disbursed. Thus, Alliant had

neither the ability nor the right to honor or dishonor the check. As both parties

acknowledge, the check was issued not by Alliant but by Moneygram Payment

Systems. Alliant wired funds to Moneygram to purchase the check; subsequent

to the purchase, the check's funds would be drawn on the account of

Moneygram, not Alliant.

Alliant sent this check to Abrego pursuant to the loan agreement with

instructions to endorse the check and deliver it to the auto dealer, which Abrego

also admits she did not do, as she instead overnighted the check to Deon Glover.

Once Glover was in possession of the check, he needed only to convince a bank
No. 76669-4-1/12

to accept it and pay out the funds. The branch bank at which the check was

cashed honored the check despite the missing endorsement and participated in a

clearinghouse transaction with Moneygram to receive and disburse the funds.

Alliant was not a party to this transaction; thus, Abrego's contention fails.

Abrego also alleged other facts on her cross motion to the effect that

Alliant was "negligent." While negligence is not a defense in actions on a

contract, Abrego alleges that her signature on the loan agreement was forged,

that the earnings statements provided to secure the loan were fraudulent, that

Alliant did not close her bank account after she requested that it do so, and that

Alliant was informed that Abrego was the victim of a scam.

Abrego's claim that her signature was forged ignores the fact that she

executed the loan agreement using Docu-Sign, a software program that

produces an electronic signature. Electronic signatures are given the same legal

status as handwritten signatures pursuant to the Electronic Signatures in Global

and National Commerce Act, 15 U.S.C. § 7001-7006. Pursuant to Docu-Sign's

processes, the loan documents were e-mailed to Abrego in an encrypted format

that could be accessed only after successfully answering an extensive security

questionnaire, which Abrego completed. The signature is applied by clicking a

"Confirm Signing" button.5 The electronic execution of this agreement, whether

completed by Abrego personally or by her "business partners" using information

only Abrego could have provided, does not alter its enforceability.

5 DocuSign,"How Does DocuSign Work?" https://wwvv.docusicn.com/products/electronic-
signature/how-docusign-works (last visited Nov. 29, 2018).

- 12 -
No. 76669-4-1/13

Abrego claims to have never received an earnings statement from her

employer, and at her deposition stated that she had not seen the earnings

statements in Alliant's possession because she was paid electronically. In the

transcript of Abrego's telephone call with Alliant on November 4, 2014, however,

she acknowledges providing Alliant with proof of income. Alliant had no reason

to doubt the veracity of the earnings statements, which were consistent with

Abrego's representations in her loan application.

Finally, neither Alliant's refusal to close Abrego's account when Abrego

had defaulted on an outstanding debt nor Abrego's belated disclosure of the

claimed scam to Alliant alter the fact that Alliant performed its obligations on the

contract while Abrego failed to do so.

Abrego points to other irregularities in the loan application documents,

none of which are material in light of her admissions and none of which alter the

fact that the parties formed a contract. All of Abrego's assertions concerning

"negligence" or a failure to exercise due diligence amount to nothing more than a

claim that Alliant should have protected Abrego from her own wrongful behavior.

Abrego's defenses to the formation of a valid contract and against the

existence of a breach all fail. Alliant was entitled to judgment on its breach of

contract claim as a matter of law. The trial court was correct to grant Alliant's

motion for summary judgment.

III

Abrego also appeals from the trial court's dismissal of her abuse of

process claims against Alliant and its attorney of record, Brian M. Born. The

-13-
No. 76669-4-1/14

dismissal was made in error, she asserts, because Alliant, by and through its

attorney, pursued its breach of contract claim despite Abrego's denials that she

applied for or obtained the loan. We affirm the dismissal. Abrego's submissions

do not satisfy any of the elements of an abuse of process claim either against

Alliant or against its attorney.6

Abuse of process is defined as the use of "a legal process, whether

criminal or civil, against another primarily to accomplish a purpose for which it is

not designed." 16A DAVID K. DEWOLF & KELLER W.ALLEN, WASHINGTON

PRACTICE: TORT LAW AND PRACTICE § 22:10, at 236 (4th ed. 2013). The essential

elements in an action for abuse of process are:

(1) The existence of an ulterior purpose—to accomplish an objective not
within the proper scope of the process;
(2) An act in the use of legal process not proper in the regular prosecution
of the proceedings;
(3) Harm caused by the abuse of process.

Bellevue Farm Owners Ass'n v. Stevens, 198 Wn. App. 464, 466, 394 P.3d 1018,

review denied, 413 P.3d 565 (2017). Only in Abrego's reply brief on appeal does

she allege an ulterior motive: that Alliant sought to collect double payment on the

loan, to avoid responsibility for its own mistake (essentially, in granting her the

6 In the trial court, Abrego styled her counterclaims as "Harassment, Bad Faith Actions,
and Discrimination from Counterclaim Defendants." On appeal, she characterizes the claim as
one for abuse of process. We analyze the claim in accord with Abrego's desired characterization.
Alliant interpreted this counterclaim as alleging malicious prosecution and has defended it
accordingly. A party alleging malicious prosecution must show that the underlying action (1) was
instituted with knowledge that the same was false,(2) is unfounded,(3) was initiated with malice,
(4) was filed without probable cause or was filed as part of a conspiracy to abuse judicial process
by filing an action known to be false or unfounded,(5) led to the arrest or seizure of property, and
(6) caused special injury that would not necessarily result from similar causes of action. RCW
4.24.350(1); Clark v. Baines, 150 Wn.2d 905, 912, 84 P.3d 245 (2004). Because there is no
basis to conclude that Alliant knowingly instituted the underlying action based on false and
malicious pretenses, Abrego's counterclaim also fails under a malicious prosecution analysis.

- 14 -
No. 76669-4-1/15

loan), and "to intimidate, harass, bully, humiliate, embarrass, slander, disparage,

and discriminate against Abrego to injure and tie up her resources to coerce her

into submission."

There is no basis to conclude that Alliant is seeking "double payment" on

the loan because the loan was never paid off in the first place. There is also no

basis to conclude that Alliant is seeking to "avoid responsibility" for a past

misdeed; the entire point of suing for breach of contract is to prevent the party in

breach from avoiding its responsibility when the other party has performed.

Further, Abrego does not demonstrate that Alliant's actions constitute an effort to

intimidate her into submission rather than simply carry out the present litigation.

None of the documents to which Abrego cites supports an inference to the

contrary.

As Abrego has not shown the existence of any ulterior purpose for Alliant's

actions, we need not reach the second and third elements of an abuse of

process claim. The trial court did not err in dismissing Abrego's counterclaim

against Alliant.

Abrego's third party claims against Alliant's attorney, Brian M. Born, in his

personal capacity, and against his firm, Turnbull & Born, PLLC, allege nothing

other than the same facts discussed above, and are further precluded by the

applicable statute governing abuse of process claims, RCW 4.24.350.

Specifically, subsection (3) of this statute provides that "[n]o action may be

brought against an attorney under this section solely because of that attorney's

representation of a party in a lawsuit." As Abrego's claims against Born and

-15-
No. 76669-4-1/16

against Turnbull & Born, PLLC are wholly indistinct from her claim against Alliant,

they plainly were made solely on the basis of the Born's representation of Alliant.

They thus fail as a matter of law. The trial court did not err in dismissing these

third party counterclaims.

IV

Alliant is entitled to an award of reasonable attorney fees on appeal

pursuant to its contract with Abrego. The parties' loan agreement states that

Abrego will pay "all costs of collecting what you owe under this Agreement,. .

including court costs, . . . and reasonable attorney fees. . . . This provision also

applies to.. . appeals." The trial court correctly awarded attorney fees to Alliant.

We do the same. Upon compliance with the applicable rule, a commissioner of

our court will enter a suitable order.

Affirmed.

We concur:

AA 97
i&ta-ni -

- 16-