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Thomason v. Moeller

United States District Court, D. Idaho

January 19, 2017

MARILYNN THOMASON, Plaintiff,
v.
GREGORY W. MOELLER an individual in his personal capacity, DARREN B. SIMPSON an individual in his personal capacity, JIM JONES an individual in his personal capacity, ROGER S. BURDICK an individual in his personal capacity, DANIEL T. EISMAN an individual in his personal capacity, JOEL D. HORTON an individual in his personal capacity, WARREN E. JONES an individual in his personal capacity, KAREN L. LANSING an individual in her personal capacity, DAVID W. GRATTON an individual in his personal capacity, SERGIO A. GUTIERRAZ an individual in his personal capacity, PITE DUNCAN, LLP a California, USA Limited Liability Partnership aka ALDRIDGE PITE, LLP a Georgia, USA Limited Liability Partnership, aka ALDRIDGE CONNORS, LLP., aka BENEFICIAL FINANCIAL I INC, ELISA S. MAGUNSON as an individual, PETER J. SALMON as an individual, CASPER J. RANKIN, as an individual, WILLIAM FORSBERG, JR. as an individual, ESTATE OF COLLEEN FORSBERG, JR., MADISON REAL PROPERTY, LLC., (as an Idaho USA Limited Liability Corporation), THOMAS LUTHY (as an individual), LAURA LUTHY (as an individual), ABUNDANT LAND HOLDINGS, LLC (as an Idaho USA Limited Liability Corporation), LANCE SCHUSTER (as an individual), BEARD ST. CLAIR GAFFNEY PA, (as an Idaho USA Partnership), JOHN K. BAGLEY (as an individual and a married man), LUELLA BAGLEY (as an individual and a married woman), TERRENCE BAGLEY (as an individual and a married man), ELIZABETH BAGLEY (a married woman and as an individual), BAGLEY ENTERPRISE (John Bagley, Luella Bagley, Elizabeth Bagley and Terrence Bagley dba in Idaho) RIVER BOTTOM, LLP (an Idaho Limited partnership), SHERRY ARNOLD (as an individual in her personal capacity), TROY EVANS (as an individual in his personal capacity), WASHINGTON FEDERAL SAVINGS (aka Washington Federal savings and Loan) (as a Washington State USA corporation), SUZANNE BAGLEY as an individual in her personal capacity), LIBERTY PARK IRRIGATION, INC. (an Idaho USA Corporation), RIGBY ANDRUS RIGBY, CHTD (aka RIGBY ANDRUS MOELLER, CHTD (Chartered under Idaho, USA), DOES 1 THROUGH 20 INCLUSIVE, Defendants.

          MEMORANDUM DECISION AND ORDER

          B. LYNN WINMILL, CHIEF JUDGE

         INTRODUCTION

         Pending before the Court are numerous motions to dismiss for failure to state a claim and for lack of jurisdiction, pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). (Dkts. 10, 13, 23, 30, 43, 53, 64). Also pending before the court are Washington Federal Savings' Motion to Dismiss for Insufficient Service of Process (Dkt. 75), plaintiff's Motions for Default against Beneficial Financial, I, Inc. (Dkt. 43) and defendant Washington Federal (Dkt. 74), plaintiff's Motion to Strike (Dkt. 80), and plaintiff's Application for Order Directing Service by United States Marshal (Dkt. 26).

         All motions are fully briefed and at issue. The Court finds that oral argument is not necessary to resolve the pending motions. As discussed below, the Court will grant defendants' respective motions to dismiss and deny those filed by plaintiff.

         BACKGROUND[1]

         This case arises from multiple lawsuits filed in Idaho state court stemming from the conveyance of real property in Madison County, Idaho and related foreclosure proceedings. Having exhausted her options to appeal the state court decisions, Thomason, proceeding pro se, now brings the present action against 34 named defendants involved in those proceedings, including all Justices of the Idaho Supreme Court, three Judges of the Idaho Court of Appeals, two Idaho District Court Judges, as well as numerous parties, attorneys, and witnesses to the above-name cases.

         Thomason's central allegation is that the defendants engaged in a conspiracy to deprive her of equal protection and due process, and that the above-mentioned state court judgments against her are void. Count One asserts the following civil rights claims against all defendants: 42 U.S.C. § 1983 (deprivation of civil rights); 42 U.S.C. § 1985(2)-(3) (conspiracy to interfere with civil rights and obstruction of justice); 42 U.S.C. § 1986 (refusal or neglect to prevent deprivation of civil rights). Count One also alleges a claim under the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1962(a)-(d), and seeks recovery of attorney fees under 42 U.S.C. § 1988. Count Two alleges a violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1962, against only Beneficial Financial I Inc., Aldridge Pite, LLP, Elisa S. Magnuson, Peter J. Salmon, and Casper J. Rankin. Finally, Count Three seeks to set aside the above-mentioned state court judgments under Federal Rule of Civil Procedure 60(b). The Complaint seeks monetary, declaratory, and injunctive relief.

         All defendants who have acknowledged service seek dismissal. In their respective motions, defendants raise the following grounds for dismissal: Rooker-Feldman doctrine's jurisdictional bar, res judicata, judicial immunity, failure to state a claim upon which relief may be granted, and improper service.

         1. Prior Litigation

         The state court litigation referred to in the Complaint includes the following actions for quiet title and judicial foreclosure proceedings brought by and against Thomason, as well as subsequent appeals.

         A. Quiet Title Action: Bagley I

         The first lawsuit was a quiet title action, filed on May 6, 2008 by Terrence Bagley and John Bagley as to property in Madison County at one time owned by Thomason and her late husband. Bagley v. Thomason (Bagley I), 241 P.3d 972 (Idaho 2010) (originally CV-2008-359). The Idaho District Court entered a partial summary judgment quieting title to the real property to the Bagleys. The Thomasons appealed the judgment, asserting inter alia that the Bagleys lacked standing because the deed by which they were granted title did not contain the Bagleys' complete address, as required by Idaho Code § 55-601. The Idaho Supreme Court affirmed the district court's order quieting title to real property in the Bagleys' favor, explaining that the question of whether a valid contract existed went to the merits of the claim, rather than the issue of jurisdictional standing.

         B. Appurtenant Water Rights: Bagley II

         On January 30, 2009, the Bagleys filed a second complaint against the Thomasons, this time seeking declaratory judgment as to the water rights appurtenant to the Madison County property. Bagley v. Thomason (Bagley II), 241 P.3d 979 (Idaho 2010) (originally CV-2009-88). The Thomasons again asserted that the Bagleys lacked standing because the warranty deed failed to comply with Idaho Code § 55-601. The District Court granted the Bagleys certain shares of water previously held by the Thomasons. On appeal, the Thomasons renewed their standing argument and also contended that the Bagleys engaged in various types of misconduct. The Idaho Supreme Court affirmed the District Court's grant of summary judgment.

         C. Final Appeal: Bagley III

         In this third appeal of the prior decisions quieting title to the Madison County property, the Thomasons alleged violations to their equal protection and due process rights, lack of jurisdiction, lack of standing, breach of contract, and various acts of misconduct, including fraud. Bagley v. Thomason (Bagley III), 307 P.3d 1219 (Idaho 2013). The Idaho Supreme Court affirmed the district court judgment and award of attorney fees. Thomason's subsequent petition for writ of certiorari was denied by the U.S. Supreme Court.

         D. State Partition Action: Madison Real Property

         On April 4, 2008, Madison Real Property (“MRP”) filed a complaint for partition and accounting of a 75-acre parcel of farm land previously owned in three undivided fee simple interests by Marilynn and Byron Thomason, Nicholas and Sandra Thomason, and Greg and Diana Thomason. Madison Real Property, LLC v. Thomason, No. 39799, 2013 WL 6008921 (Idaho Ct. App. Aug. 12, 2013) (originally CV-2008-271). MRP is the successor in interest to William Forsberg, who received his interest in the property by a deed from Greg and Diana Thomason on October 30, 2001. Marilynn Thomason appealed the final judgment against her on plaintiff's Motion to Dismiss, asserting inter alia that: (1) MRP lacked standing because it relied on a fraudulent deed purporting to grant interest in the property to Forsberg from Greg and Diana Thomason;[2] (2) and the district court violated her right to equal protection. The Court of Appeals of Idaho affirmed the lower's court's decision, finding that she failed to adequately demonstrate either claim. Id. at *8.

         E. Tax Sale Matter: Abundant Land Holdings

         On April 28, 2014, Abundant Land Holdings, LLC filed a quiet title action regarding real property once owned by Thomason and her late husband that Abundant Land Holdings had obtained through tax sale. Abundant Land Holdings, LLC v. Thomason, et al., No. CV-2012-520. Judgment was rendered in favor of Abundant Land Holdings.

         F. Judicial Foreclosure Action: Beneficial Financial

         This final proceeding is not mentioned by Thomason but it appears to be the only basis for the second cause of action, which alleges a violation of the Fair Debt Collection Practices Act. Beneficial Financial I brought a judicial foreclosure action against Thomason, arising from default of a note and deed of trust executed by Byron T. Thomason and Marilynn Thomason and secured by the Madison County property. Beneficial Financial I Inc. v. Thomason, et al., No. CV-2015-74. This matter is still pending in state court.

         2. Parties

         To facilitate the discussion of Thomason's claims, the Court has grouped the moving defendants into seven categories: (1) Idaho District Court Judges Gregory W. Moeller and Darren B. Simpson; Idaho Appellate Court Judges Karen L. Lansing, David W. Gratton, and Sergio A. Gutierrez; and Idaho Supreme Court Justices Jim Jones, Roger S. Burdick, Daniel T. Eismann, Joel D. Horton, and Warren E. Jones (collectively “Judicial Defendants”); (2) all previous parties to the above-mentioned state court proceedings, including John Bagley, Luella Bagley, Terrence Bagley, Elizabeth Bagley, Bagley Enterprise, River Bottom, LLC, Beneficial Financial I Inc., Madison Real Property, LLC, Abundant Land Holdings, LLC, Thomas Luthy, and Laura Luthy (collectively “Financial Defendants”); (3) counsel for these parties in the state court proceedings, including Beard St. Clair Gaffney PA, Lance Schuster, Aldridge Pite, LLP, Elisa S. Magnuson, Casper J. Rankin, Peter J. Salmon, William Forsberg, and Colleen Forsberg (collectively “Attorney Defendants”); (4) Madison County employees, including Sherry Arnold, Madison County Treasurer Suzanne Bagley, a Madison County deputy sheriff, and Troy Evans, a Madison County prosecuting attorney (collectively “Madison County Defendants”); (5) Liberty Park Irrigation and its legal counsel, Rigby, Andrus, & Rigby, Chtd.; (6) Washington Federal Savings; and (7) John Doe Defendants.

         LEGAL STANDARD

         1. Rule 12(b)(6) Standard

         Federal Rule of Civil Procedure 8(a)(2) requires only “a short and plain statement of the claim showing that the pleader is entitled to relief, ” in order to “give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). While a complaint attacked by a Rule 12(b)(6) motion to dismiss “does not need detailed factual allegations, ” it must set forth “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. at 555. To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its face.” Id. at 570. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. at 556. The plausibility standard is not akin to a “probability requirement, ” but it asks for more than a sheer possibility that a defendant has acted unlawfully. Id. Where a complaint pleads facts that are “merely consistent with” a defendant's liability, it “stops short of the line between possibility and plausibility of ‘entitlement to relief.'” Id. at 557.

         The Supreme Court identified two “working principles” that underlie Twombly in Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). First, the court need not accept as true, legal conclusions that are couched as factual allegations. Id. Rule 8 does not “unlock the doors of discovery for a plaintiff armed with nothing more than conclusions.” Id. at 678- 79. Second, to survive a motion to dismiss, a complaint must state a plausible claim for relief. Id. at 679. “Determining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id.

         Pro se complaints are held to “less stringent standards than formal pleadings drafted by lawyers.” See Haines v. Kerner, 404 U.S. 519, 520 (1972). Where a plaintiff is proceeding pro se, the Court has an obligation to construe the pleadings liberally and to afford the plaintiff the benefit of any doubt. See Bretz v. Kelman, 773 F.2d 1026, 1027 n.1 (9th Cir. 1985) (en banc). However, pro se pleadings must still allege facts sufficient to allow a reviewing court to determine whether a claim has been stated. See Ivey v. Bd. of Regents of Univ. of Alaska, 673 F.2d 266, 268 (9th Cir. 1982).

         2. Rule 12(b)(1) Standard

         When subject matter jurisdiction is challenged pursuant to Federal Rule of Civil Procedure 12(b)(1), the plaintiff bears the burden of persuasion. Indus. Tectonics, Inc. v. Aero Alloy, 912 F.2d 1090, 1092 (9th Cir. 1990) (citing McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178, 189 (1936)). A party who brings a Rule 12(b)(1) challenge may do so by referring to the face of the pleadings or by presenting extrinsic evidence. See White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000) (“Rule 12(b)(1) jurisdictional attacks can be either facial or factual . . . .”). In the former, the challenger asserts that the allegations contained in a complaint are insufficient on their face to establish federal jurisdiction. Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). “By contrast, in a factual attack, the challenger disputes the truth of the allegations that, by themselves, would otherwise invoke federal jurisdiction.” Id. In resolving a factual attack on jurisdiction, the court need not presume the truthfulness of the plaintiff's allegations, and may review evidence beyond the complaint without converting the motion to dismiss into a motion for summary judgment. Id.

         ANALYSIS

         1. Motions to Take Judicial Notice

         As a threshold matter, the Court considers the motions to take judicial notice of the underlying Idaho state court decisions (Dkts. 32, 46), later joined by additional defendants (Dkts. 38, 39, 47, 54).[3]

         Federal Rule of Evidence 201(b) provides: “A judicially noticed fact must be one not subject to reasonable dispute in that it is either (1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned.” The Court “may take judicial notice of court filings and other matters of public record, ” Reyn's Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741 (9th Cir. 2006), but not of a fact that is “subject to reasonable dispute, ” MGIC Indem. Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir. 1986).

         The Ninth Circuit has consistently held that courts may take judicial notice of documents filed in other court proceedings to establish the fact of such litigation and face of averments made, but not to establish the truth of the matters asserted. Compare United States v. Black, 482 F.3d 1035, 1041 (9th Cir. 2007) (“A federal court may take notice of proceedings in other courts, both within and without the federal judicial system, if those proceedings have a direct relation to matters at issue.”) (internal quotation and citation omitted), with M/V Am. Queen v. San Diego Marine Constr. Corp., 708 F.2d 1483, 1491 (9th Cir. 1983) (“[A] court may not take judicial notice of proceedings or records in another cause so as to supply, without formal introduction of evidence, facts essential to support a contention in a cause then before it”).

         Here, judicial notice of the state court documents is proper. The court documents are matters of public record from sources whose accuracy cannot reasonably be questioned.[4] Additionally, these cases directly relate to the matters at issue here. However, the Court will take notice only for the limited purpose of recognizing the fact that certain court proceedings took place, the subject matter of that litigation, and the allegations and judicial acts recorded in them. The Court does not accept the veracity of the facts recited in those cases or correctness of these decisions. Therefore, the Motions for Judicial Notice (Dkts. 32, 46) will be granted and the Court will consider these noticed documents for the purposes of the pending Motions to Dismiss under Rule 12(b)(6). United States v. Ritchie, 342 F.3d 903, 907-908 (9th Cir. 2003) (A court may consider matters of judicial notice without converting the motion to dismiss into one for summary judgment).

         2. Plaintiff's Motion for Service by U.S. Marshal and for Assertion of Jurisdiction Over Defendants' Property and Assets

         Plaintiff seeks an order directing the United States Marshal to serve fifteen of the named defendants. Under Federal Rule of Civil Procedure 4, “[a]t plaintiff's request, the court may order that service be made by a United States Marshal․ The court must so order if the plaintiff is authorized to proceed in forma pauperis under 28 U.S.C. § 1915․” Fed.R.Civ.P. 4(c)(3). Plaintiff is not proceeding in forma pauperis and thus does not automatically qualify for that entitlement. Nor do the circumstances here suggest that appointment of the United States Marshal is appropriate here. The Advisory Committee Notes state that appointment is generally proper when necessary to keep the peace, a circumstance not present here. Adv. Comm. Note to 1993 Amendments. Plaintiff also does not indicate that she has exhausted other reasonable methods of effective service, or that she lacks the financial resources to do so. The Court therefore declines to exercise its discretion to appoint the Marshal here.

         Thomason further requests an order of the court, pursuant to Federal Rule of Civil Procedure 4(n)(1), asserting jurisdiction over the assets and properties of the above-named defendants to compensate any expenses incurred by Plaintiff in effecting service. Rule 4(n)(1) provides that “[t]he court may assert jurisdiction over property if authorized by a federal statute. Notice to claimants of the property must be given as provided in the statute or by serving a summons under this rule.” Plaintiff fails to point to a federal statute which authorizes such an assertion of jurisdiction here. Accordingly the motion is denied in full.

         3. Washington Federal's Motion to Dismiss for Insufficient Service of Process

         Defendant Washington Federal, National Association (“Washington Federal”), successor-in-interest to named defendant Washington Federal Savings, filed a Motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(5), on the ground that Thomason has failed to effect sufficient service of process. (Dkt. 75).

         Where a defendant challenges the method of service of process under Federal Rule of Civil Procedure 12(b)(5), the plaintiff bears the burden of establishing that service was valid under Rule 4. Brockmeyer v. May, 383 F.3d 798, 801 (9th Cir. 2004). Federal Rule of Civil Procedure 4 authorizes service upon a domestic or foreign corporation “by delivering a copy of the summons and of the complaint to an officer, a managing or general agent, or to any other agent authorized by appointment or by law to receive service of process.” Fed.R.Civ.P. 4(h); (e)(1). In addition, Rule 4 permits service to be made in the manner prescribed by the law of Idaho, the state in which this Court sits. Fed.R.Civ.P. 4(e)(1).

         The Idaho Rules of Civil Procedure similarly require a foreign corporation to “be served by delivering a copy of the summons and of the complaint to an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive service of process.” Idaho R. Civ. P. 4(d)(3)(B). However, they do allow for service by registered or certified mail “[w]hen the agent designated for service by a foreign corporation, partnership or association which has qualified in this state by filing with the Secretary of State or a domestic corporation, partnership or association is unavailable. . . .” Idaho R. Civ. P. 4(d)(3)(C) (emphasis added).

         Here, the record demonstrates that neither Washington Federal nor its predecessor-in-interest and named defendant in this matter, Washington Federal Savings, are entities which have “qualified in [Idaho] by filing with the Secretary of State.” Idaho R. Civ. P. 4(d)(3)(C). Accordingly, Idaho Rule 4(d)(3)(C) does not apply, and Thomason was required to effectuate personal service upon Washington Federal. It is uncontested that Thomason never personally served any officer or agent of Washington Federal. Rather, she mailed a copy of the summons and Complaint to Washington Federal's CEO in Seattle, Washington. Accordingly, the Court will grant Washington Federal's Motion to Dismiss (Dkt. 75) under Federal Rule of Civil Procedure 12(b)(5) for insufficient service of process.

         4. Plaintiff's Motion to Strike

         Thomason filed a Motion to Strike, asserting that the Affidavit of Arian Colachis (Dkt. 77), filed in support of Washington Federal's Motion to Dismiss for Insufficient Service of Process (Dkt. 75), should be stricken for lack of personal knowledge, as inadmissible hearsay, for lack of supporting specificity and/or supporting evidence, and for being untimely filed.

         The Court finds the motion completely groundless. To be sure, for summary judgment purposes, “[a]n affidavit or declaration used to support or oppose a motion must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on the matters stated.” Fed.R.Civ.P. 56(e)(1). Arian Colachis' affidavit meets all these requirements. Colachis states that she is General Counsel and Corporate Secretary for Washington Federal, National Association. Ms. Colachis further states that she “has personal knowledge of the facts” testified to “from her involvement in managing the Bank's legal affairs or from a review of the Bank's files.” Colachis Aff. at 1, Dkt. 77. She is undoubtedly competent to testify as to the matter, due to her position within the company and oversight of the Bank's legal affairs.

         Moreover, the affidavit contains no inadmissible hearsay. Although Thomason never explains which portion of the affidavit she claims to be hearsay, the only plausible source is the business records reviewed by Ms. Colachis. Testimony regarding the absence of a record is excluded from the general hearsay prohibition. Fed.R.Evid. 803(7) (allowing for admission of evidence “that a matter is not included in a [business record] . . . to prove that the matter did not occur or exist [if the] record was regularly kept for a matter of that kind.”).

         Nor was the affidavit untimely filed. The timing requirement on which Thomason relies comes from Federal Rule of Criminal Procedure 47(d), which states that the “moving party must serve any supporting affidavit with the motion.” The Federal Rules of Criminal Procedure do not apply to this case, and the Civil Rules contain no analogous provision.

         Finally, the specificity of the affidavit is irrelevant, as Washington Federal does not bear the burden of proving insufficient service. “Once service is challenged, plaintiffs bear the burden of establishing that service was valid under Rule 4.” Brockmeyer v. May, 383 F.3d 798, 801 (9th Cir. 2004). As the Court explains above, Thomason has failed to demonstrate compliance with the personal service requirement. Striking the Colachis Affidavit would not change this conclusion.

         Accordingly, the Court denies Thomason's Motion to Strike (Dkt. 80).

         5. Plaintiff's Motions for Default Judgment

         Thomason has filed a Motion for Default Against Defendant Beneficial Financial I, Inc. (Dkt. 43) and a Motion for Default Against Defendant Washington Federal (Dkt. 74). The Court finds Thomason's Motions to be without merit.

         Under Federal Rule of Civil Procedure 55(b)(2), “[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend as provided by these rules, and the fact is made to appear by affidavit or otherwise, the clerk must enter the party's default.” A Judgment of Default may, thereafter, be entered on application to the Court. See Fed. R. Civ. P. 55(b); Eitel v. McCool, 782 F.2d 1470, 1471 (9th Cir. 1986) (noting the “two-step process” required by Rule 55: (1) request for clerk's entry of default under Rule 55(a); and (2) subsequent motion for default judgment under Rule 55(b)).

         A defendant's default does not automatically entitle a plaintiff to a court-ordered judgment. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). Rather, entry of default judgment is left to the court's sound discretion, guided by the following factors: (1) potential prejudice to the plaintiff; (2) the merits of plaintiff's substantive claim; (3) the sufficiency of the Complaint; (4) the amount at stake in the action; (5) the possibility of a dispute concerning material facts; (6) whether the default was due to excusable neglect; and (7) the strong policy underlying the Federal Rules favoring a decision on the merits. Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986).

         Here, the Court finds several procedural and substantive problems with Thomason's Motions for Default. First, Thomason has improperly asked this court to enter a default judgment without first obtaining an entry of default by the clerk, in accordance with the requirements of Rule 55. Fed.R.Civ.P. 55. More critically, defendant Washington Federal was not properly served under Idaho or ...


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