* Shanghai Commercial Bank, Respondent V. Kung Da Chang, Appellant

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'Ch,LO I 1 ; 1
2015SEP 12 	filial
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
SHANGHAI COMMERCIAL BANK
LIMITED, a banking corporation
organized and existing under the
Laws of Hong Kong Special
Administrative Region, the People's
Republic of China,
Respondents,
v.
KUNG DA CHANG and "JANE DOE"
CHANG, husband and wife, and
the marital community comprised
thereof,
Appellants.
No. 73956-5-1
DIVISION ONE
PUBLISHED OPINION
FILED: 	September 12, 2016
Leach, J. — Kung Da Chang and Michelle Chen appeal a trial court order
allowing Shanghai Commercial Bank (Bank) to enforce a Hong Kong trial court
judgment against their marital community. 	By statute, the Hong Kong judgment
can be enforced to the same extent as a judgment rendered in Washington.1
Thus, we apply the same conflict of laws principles used by Washington courts to
determine the reach of a Washington judgment based on a debt one spouse
incurred 	outside 	the 	state. 	Because 	Hong 	Kong 	has 	the 	most 	significant
RCW6.40A.020(1).
 	 	 	 	 	 	 	 	 	 	 	 	 	

No. 73956-5-1/2
relationship with the underlying 	transaction, we 	apply Hong 	Kong law, which
allows the Bank to collect its judgment from Chang and Chen's marital property.
Therefore, we affirm.
FACTS
This is the second appeal arising from the trial court's recognition of a
Hong Kong trial court judgment against Chang. 	This court recounted the facts
underlying the Hong Kong action in an unpublished opinion in the first appeal.2
The only facts relevant here are those bearing on the choice-of-law issue.
Chang signed five documents with Shanghai Commercial Bank in March
and April 2008. 	Those documents together created a credit agreement allowing
Chang and 	his father to borrow money from the 	Bank. 	The 	Bank sent the
documents to Chang at his father's Shanghai address. 	Chang's father mailed
them to Chang in Seattle. 	Chang then signed the documents and returned them
to his father in Shanghai.
In Hong Kong Action 806, the Bank obtained a money judgment against
Chang for his unpaid debt under the credit agreement.3
2 Shanghai Commercial Bank Ltd. v. Chang, noted at 183 Wn. App. 1007,
2014 WL 4198391, at *1-2 (2014), cert, denied. 135 S. Ct. 2847 (2015).
3 The judgment is a combination of United States dollars, Hong Kong
dollars, Japanese yen, interest on those amounts, and costs. 	Chang states the
amount as $9 million.
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No. 73956-5-1/3
Chang and Chen have resided in Washington since before they married in
1994. 	Chen did not sign any of the five documents and was not aware Chang
made the credit agreement. 	She was not a party to the Hong Kong lawsuit.
In June 	2012, 	the 	Bank filed 	a 	petition 	under Washington's 	Uniform
Foreign-Country Money Judgments Recognition Act4 (Uniform Act) asking the
King County Superior Court to recognize and enforce the Hong Kong judgment.5
The trial court granted partial summary judgment recognizing the Hong Kong
judgment, and this court affirmed.6
In August 2015, the trial court granted the Bank summary judgment on the
rest of its request. 	It determined that Hong Kong law applied and thus allowed
the Bank to collect its judgment from Chang and Chen's marital property. 	It later
denied Chang's motion for reconsideration. 	Chang appeals.7
STANDARD OF REVIEW
We 	review 	the 	trial 	court's 	summary 	judgment 	decision 	de 	novo.8
Summary 	judgment 	is 	proper 	if the 	pleadings, 	affidavits, 	depositions, 	and
admissions on file demonstrate that there is no genuine issue of material fact and
4 Ch. 6.40A RCW.
5 See RCW 6.40A.050.
6 Shanghai Commercial Bank. 2014 WL 4198391, at *4.
7 For clarity, we refer to Chang and Chen, in their capacity as appellants,
as Chang. 	We intend no disrespect.
8 Lakev v. Puget Sound Energy, Inc., 176 Wn.2d 909, 922, 296 P.3d 860
(2013).
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No. 73956-5-1/4
that the moving party is entitled to summary judgment as a matter of law.9 We
must draw all reasonable inferences from the evidence in favor of the nonmoving
party.10 	We 	review the denial 	of a 	motion for reconsideration for abuse of
discretion.11 	Statutory interpretation 	is a 	question of law that we 	review de
novo.12
ANALYSIS
When one spouse, acting alone, 	incurs a debt, collection presents two
distinct questions: 	What is the character of the debt, separate or community, and
what property is available to satisfy it?13 	A debt characterized as separate can
nonetheless be enforced against community property in some circumstances.14
9 Lakev. 176 Wn.2d at 922.
10 Lakev, 176 Wn.2d at 922.
11 Rivers v. Wash. State Conference of Mason Contractors, 145 Wn.2d
674,685,41 P.3d 1175(2002).
12 U.S. Tobacco Sales & Mktg. Co. v. Dep't of Revenue, 96 Wn. App. 932,
938, 982 P.2d 652 (1999).
13 Haley v.Highland. 142 Wn.2d 135, 147, 12 P.3d 119 (2000).
14 See Pac. Gamble Robinson Co. v. Lapp, 95 Wn.2d 341, 349-50, 622
P.2d 850 (1980) (separate contract debt enforceable against community where
law 	of 	state 	with 	most 	significant 	relationship 	to 	transaction 	would 	allow
enforcement against that particular property); deElche v. Jacobsen, 95 Wn.2d
237, 	246, 	622 	P.2d 	835 	(1980) 	(separate 	tort 	debt 	enforceable 	against
community where separate property is insufficient); Komm 	v. Dep't of Soc. &
Health Servs.. 23 Wn. App. 593, 599, 597 P.2d 1372 (1979) (judgment against
mother for 	child 	support 	enforceable 	against 	marital 	community). 	But 	see
Colorado Nat'l Bank of Denver v. Merlino, 35 Wn. App. 610, 617, 668 P.2d 1304
(1983) 	(separate 	debt 	in 	real 	property 	transaction 	not 	enforceable 	against
community).
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No. 73956-5-1/5
This appeal turns on whether the Hong Kong judgment against Chang presents
one of those circumstances.
Washington 	has 	adopted 	the 	Uniform 	Act. 	The 	act 	provides 	that
Washington 	courts 	"shall 	recognize 	a 	foreign-country 	judgment" 	for 	money
damages that is "final, conclusive, and enforceable" where rendered, unless one
or more of the mandatory or discretionary grounds for nonrecognition applies.15
This court held in the first appeal that the Hong Kong judgment is recognizable
and enforceable in Washington.16
Under 	the 	Uniform 	Act, 	Chang 	may 	assert 	any 	defenses 	against
enforcement 	of 	the 	Hong 	Kong 	judgment 	that 	he 	could 	assert 	against 	a
Washington judgment. 	RCW 6.40A.060(2) provides that a recognized "foreign-
country judgment is . . . [enforceable in the same manner and to the same extent
as 	a 	judgment 	rendered 	in 	this 	state." 	The 	legislature 	included 	RCW
6.40A.060(2) in the 2009 legislation adopting the updated Uniform Act. 	The
drafters 	of 	that 	model 	legislation 	explained 	in 	their 	comments 	that, 	"once
recognized, the foreign-country judgment has the same effect and is subject to
the same procedures, defenses and proceedings ... of a comparable court in
15RCW6.40A.020(1), .030.
16 Shanghai Commercial Bank. 2014 WL 4198391, at *4.
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No. 73956-5-1/6
the forum state, and can be enforced or satisfied in the same manner as such a
judgment of the forum state."17
When a spouse is not a party in a Washington lawsuit, that spouse can
choose to wait and intervene at the time of execution to prove that the judgment
cannot be collected from the marital community.18 When this happens, the court
looks to the facts supporting the judgment to determine its reach.19 	For this
reason, 	we 	reject 	Chang's 	claim 	that 	the 	facts 	supporting 	the 	Hong 	Kong
judgment merged in the judgment and cannot be considered when deciding if it
can be collected from the marital community.
To decide the reach of the Hong Kong judgment, we must examine the
underlying facts, as we would for a judgment rendered in Washington. 	Here,
Chang claims that because he did not incur the debt for the benefit of his marital
community, the Bank cannot enforce that debt against the community's assets.20
But Chang skips a step in the correct analysis. 	When a Washington court bases
its judgment on a debt one spouse incurred outside the state, Washington courts
17 Unif. Foreign-Country Money Judgments Recognition Act § 7 cmt.
3, 13 pt. 2 U.L.A. 39 (Supp. 2016). 	This court views official comments on uniform
laws as persuasive authority. 	See Townsend v. Quadrant Corp., 153 Wn. App.
870, 879, 224 P.3d 818 (2009), aff'd on other grounds, 173 Wn.2d 451, 268 P.3d
917(2012).
18 Komm, 23 Wn. App. at 599.
19 Komm, 23 Wn. App. at 599-600; see also Merritt v. Newkirk, 155 Wash.
517, 523-24, 285 P. 442 (1930).
20 See Oil Heat Co. of Port Angeles. Inc. v. Sweeney. 26 Wn. App. 351,
355, 613 P.2d 169 (1980).
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No. 73956-5-1/7
use a conflict of laws analysis to decide what law to apply to decide if the
judgment can be collected from that spouse's marital community.21 	As required
by RCW 6.40A.060(2), 	we 	use the 	same conflict of laws analysis to decide
whether the 	Hong 	Kong judgment can 	be enforced 	against his 	and 	Chen's
marital community.
Our 	conflict 	of 	laws 	analysis 	asks 	which 	jurisdiction 	"has 	the 	most
significant 	relationship 	to 	the 	transaction 	and 	the 	parties 	under" 	seven
principles:22
(a) the needs of the interstate and international systems,
(b) the relevant policies of the forum,
(c) the relevant policies of other interested states and the
relative interests of those states in the determination of the
particular issue,
(d) the protection of justified expectations,
21 	See Pac. Gamble, 95 Wn.2d at 344; Pac. States Cut Stone Co. v.
Goble, 70 Wn.2d 907, 908-09, 425 P.2d 631 (1967); Potlatch No. 1 Fed. Credit
Union v. Kennedy, 76 Wn.2d 806, 808, 459 P.2d 32 (1969) (all applying conflict
of laws analysis to determine whether to enforce a Washington judgment against
community property); see also Colorado Nat'l Bank of Denver, 35 Wn. App. at
617 (indicating that if liability incurred in Colorado were for unsecured promissory
note instead of real property agreement, it would be presumptively enforceable
against the Washington community).
22 Restatement (Second) of Conflict of Laws § 188(1) (Am. Law Inst.
1971), guoted in Mulcahv v. Farmers Ins. Co. of Wash., 152 Wn.2d 92, 100, 95
P.3d 313 (2004); Pac. States, 70 Wn.2d at 909; Potlatch, 76 Wn.2d at 813. 	This
analysis applies both when determining whether the judgment is enforceable,
which has already been decided in this case, and in deciding what property is
available to satisfy the judgment, as we do here. 	Writing in dissent in Pacific
Gamble, Justice Horowitz drew a distinction between these questions, but our
courts' decisions have not. 	95 Wn.2d at 351 (Horowitz, J., dissenting).
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No. 73956-5-1/8
(e) the basic policies underlying the particular field of law,
(f) certainty, predictability and uniformity of result, and
(g) ease in the determination and application of the law to be
applied.[23]
When applying these principles, Washington courts consider five types of
contact: 	the places of contracting, negotiation, and performance; the location of
the subject matter of the contract; and "the domicil, residence, nationality, place
of incorporation and 	place of business of the 	parties."24 	We evaluate these
contacts "according to their relative importance with respect to the particular
issue."25
Here, weighing these factors "according to their relative importance with
respect to the particular issue"26 of what property is available to pay the Bank's
judgment, we find that Hong Kong law has the most significant relationship to the
enforcement of the Hong Kong judgment.
We look to the underlying transaction in performing this analysis.27 	The
places 	of contracting, 	negotiation, 	and 	performance 	and 	the 	location 	of the
23 Restatement § 6(2). 	This test applies equally to the laws of a foreign
country as to the laws of another state. 	Untersteiner v. Untersteiner, 32 Wn.
App. 859, 862, 650 P.2d 256 (1982).
24 Restatement § 188(2), guoted in Mulcahv, 152 Wn.2d at 101.
25 Restatement § 188(2), guoted in Mulcahv. 152 Wn.2d at 101.
26 Restatement § 188(2). guoted in Mulcahv, 152 Wn.2d at 101.
27 See Pac. Gamble, 95 Wn.2d at 346 ("'[TJhese contacts are guidelines
indicating where the 	interests of particular states may touch the transaction.'"
(quoting Potlatch, 76 Wn.2d at 810)).
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No. 73956-5-1/9
subject matter of the contract all favor 	Hong 	Kong.28 	And 	in 	light of these
contacts, the justified expectations of the parties and the policies of Hong Kong
and Washington indicate that Hong Kong has the most significant relationship to
the issue here.
The parties' reasonable 	expectations favor 	Hong 	Kong 	law. 	Chang
asserts 	that 	Washington 	residents 	have 	a 	reasonable 	expectation 	that
Washington law will apply to enforcement of contracts they sign. 	But Chang
knew he was dealing with a Bank in Shanghai and that the documents included
Hong 	Kong 	choice-of-law 	provisions. 	Conversely, 	the 	record 	contains 	no
indication that the Bank knew it was dealing with Washington 	residents; the
documents Chang signed were 	all 	addressed 	to 	his father's 	residence 	in
Shanghai and he returned 	them 	to his father, 	not the Bank, 	after signing.
Chang's father and his advisors used the borrowed money in Hong Kong to pay
debt incurred there and having no connection to Washington.
The relative interests and 	policies of Washington and Hong Kong also
favor Hong Kong. 	Chang asserts that Washington's policy is to shield community
property 	from 	collection 	for 	a 	judgment 	arising 	from 	one spouse's 	debt
obligations. 	"Washington 	has a 	general 	interest 	in 	protection 	of 	marital
communities from the entirely separate debts of one spouse."29 	But the Supreme
28 As the Bank concedes, the residence of the parties "is a wash."
29 Pac. Gamble, 95 Wn.2d at 347.
 	 	 	 	 	 	 	 	 	 	 	 	 	

No. 73956-5-1/10
Court identified limitations of that interest. 	In Pacific Gamble Robinson Co. v.
Lapp,30 the 	court 	noted 	that the 	"state 	has 	no 	policy 	interest 	in" 	being 	"a
sanctuary for fleeing debtors." 	Washington thus lacks a strong public policy of
protecting marital communities from the separate debts of one spouse. 	Although
Chang and Chen are not "fleeing debtors," the Supreme Court's observation
applies similarly when a debtor spouse lacks separate property and seeks to
avoid all liability for a foreign debt by using this state's community property law.31
On the 	other hand, 	Hong Kong, like Colorado in Pacific Gamble, 	has
interests in "ensur[ing] the predictability of business relations" and preventing
debtors from avoiding liability with the protection of foreign laws—at least when
their foreign residency is unknown to the other party and the agreement requires
the application of Hong Kong law.32 	We note that Washington also has a strong
economic interest in 	preserving foreign 	trade 	relations,33 an area where the
enforcement of foreign-made contracts necessarily plays a substantial role.
30 95 Wn.2d 341, 347, 622 P.2d 850 (1980).
31 See Pac. Gamble, 95 Wn.2d at 347; see also deElche, 95 Wn.2d at 246
(community liable for separate tort debts where separate property is insufficient).
32 Pac. Gamble, 95 Wn.2d at 347; see also Potlatch, 76 Wn.2d at 813.
33 See Jon Talton, State Would Lose If We Turn Against Trade, Seattle
Times, June 11, 2016, http://www.seattletimes.com/business/state-would-lose-if-
we-turn-against-trade/ 	[https://perma.cc/K8WQ-454M] 	("Washington 	is 	the
nation's highest exporter per capita and one in three jobs are directly or indirectly
tied to trade.").
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No. 73956-5-1/11
Weighing 	the competing 	policies of Washington and 	Hong 	Kong, 	the
justified expectations of Chang, 	Chen, 	and the Bank, 	and the five types of
contacts, we conclude that Hong Kong has the most significant relationship to the
issue here.
Hong Kong law about the scope of collection presents an issue of "fact"
that the trial court decided.34 	The Bank introduced expert testimony that 	Hong
Kong law allows the judgment to be collected from property that, in Washington,
would 	belong to Chang and Chen's 	community. 	Chang did 	not introduce
contrary evidence and does not contest that his and Chen's community property
would be subject to the judgment if Hong Kong law applies.
Applying Hong Kong law, then, we find that the same property that would
be subject to payment of the judgment in 	Hong 	Kong, 	including Chang and
Chen's community property, is subject to payment of the debt in Washington to
the same extent, even if the property is characterized as "community" under
Washington law.35 	Summary judgment for the Bank was therefore appropriate.
We affirm.
Because we affirm the trial court judgment by applying Washington conflict
of law principles, we do not decide if Chang, through the credit agreement's
34 See Bvrne v. Cooper, 11 Wn. App. 549, 553-54, 523 P.2d 1216(1974).
35 See Pac. Gamble, 95 Wn.2d at 349-50.
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No. 73956-5-1/12
choice-of-law 	provision, 	could 	bind 	Chen 	to 	Hong 	Kong 	law 	without 	her
knowledge.
CONCLUSION
Because Hong Kong law has the most significant relationship to Chang's
agreement with the Bank, and Hong Kong law allows collection of the judgment
from 	property 	that, 	in Washington, 	belongs 	to 	Chang 	and 	Chen's 	marital
community, we affirm.
WE CONCUR:
AJ 	Mr
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