Nathan Lewis Sarah Lewis Bankruptcy Non-Dischargeability Ruling

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March 2, 2026 Get Citation Alerts Download PDF Add Note

In re: Nathan Lewis and Sarah Lewis; Tamara Baughn v. Nathan Lewis, Sarah Lewis, and Farmhouse Legacy CoO., LLC; Jon Morrison and Orei Parker v. Nathan Lewis, Sarah Lewis, and Farmhouse Legacy CoO., LLC

United States Bankruptcy Court, E.D. Washington

• Citations: None known
• Docket Number: 25-80025

• Precedential Status: Unknown Status

• Opinion

• Authorities (14)

• Cited By (0)

• Summaries (0)

• Similar Cases (44.1K)

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Trial Court Document

Dated: March 2nd, 2026 | sae amc
Cen Frederick P. Corbit
Rarer” Bankruptcy Judge

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF WASHINGTON

In re: Case No. 25-00577-FPC 13
NATHAN LEWIS and SARAH
LEWIS,
Debtors.
TAMARA BAUGBHN, Adv. No. 25-80026-FPC
Plaintiff,
V.
NATHAN LEWIS, SARAH LEWIS,
and FARMHOUSE LEGACY CoO.,
LLC,
Defendants.
JON MORRISON and OREI
PARKER, Adv. No. 25-80025-FPC
Plaintiff,
MEMORANDUM OPINION AND
V. ORDER RE: NON-
DISCHARGEABILITY CLAIMS
NATHAN LEWIS, SARAH LEWIS,
and FARMHOUSE LEGACY CoO.,
LLC,
Defendants.

OPINION AND ORDER RE: NON-DISCHARGEABILITY — 1

I. INTRODUCTION
This case arises from misrepresentations made by Debtor Nathan Lewis to

certain creditors who entrusted him with substantial deposits to build and renovate
their homes. Mr. Lewis misrepresented to these creditors that he would provide
licensed and competent construction services to induce the creditors to give him

substantial cash deposits. However, he used their deposits on other people’s
projects and to fund his struggling business, instead of using the money on those
creditors’ projects.
After several failed building projects, Mr. Lewis and his wife, Sarah Lewis

(collectively, the “Debtors”), filed for chapter 13 bankruptcy. Jon Morrison and
Orei Parker (collectively, “Morrison and Parker”), and Tamara Baughn, filed
proofs of claim in the bankruptcy case. Morrison and Parker and Ms. Baughn also

filed adversary proceedings, in which they request the Court declare the debts
owed to them are non-dischargeable under 11 U.S.C. § 523.
The Debtors’ primary defense is that liability for the incomplete projects and
missing cash rests solely with Farmhouse Legacy, Co., LLC (“Farmhouse

Legacy”), a limited liability company that Mr. Lewis used in connection with his
construction business. However, credible evidence establishes that Mr. Lewis used
Farmhouse Legacy’s corporate form to shield personal misconduct and to obtain

money by false representations.
The Court concludes that Farmhouse Legacy’s corporate form should be
disregarded. Moreover, the Court concludes that Mr. Lewis violated Washington’s

Consumer Protection Act, warranting the imposition of personal liability. As a
result, the debts Mr. Lewis owes to Ms. Baughn, and Morrison and Parker, are
nondischargeable pursuant to 11 U.S.C. § 523 (a)(2)(A). However, no basis exists

to impose liability on Mrs. Lewis’s separate estate.
The Court enters this memorandum opinion and order in both adversary
proceedings. Contemporaneously with this order, the Court will enter judgments in
each adversary proceeding detailing the precise amounts of each nondischargeable

debt.
II. MEMORANDUM ORDER
The Debtors are a married couple. In December of 2018, Mr. Lewis formed

Farmhouse Legacy, LLC.1 (ECF2 No. 1, p. 41) Farmhouse Legacy was established
in connection with Mr. Lewis’s construction business. Mrs. Lewis had no
involvement in the financial affairs, business management, or day-to-day operation
of Farmhouse Legacy. Mrs. Lewis testified that the only reason she was named as a

member of the LLC was so that she could have access to business records in case
Mr. Lewis died or could not otherwise access the records.

1 The Unified Business Identifier for Farmhouse Legacy is 604 216 567, and the Employer
Identification Number for Farmhouse Legacy is 84-2371773.
2 For clarity, all “ECF” references refer to the docket in Main Case No. 25-00577-FPC13.
The Baughn Project
Sometime in August of 2021, Ms. Baughn met with Mr. Lewis and one of

his employees to discuss a potential construction project. Mr. Lewis presented to
Ms. Baughn a project proposal on Farmhouse Legacy’s letterhead. The proposal
provided for various renovations on Ms. Baughn’s home over the course of

approximately twelve to sixteen weeks, starting “Mid November 2021.” The
project proposal estimated the project cost at $162,150 and stated “[a]bove all else,
we will leave you with a home transformation built to elite standards, high quality
and integrity.”

Although the Baughn project proposal never led to a signed contract, by
early October 2021, Ms. Baughn was contemplating making a downpayment and
formally committing to the project. In an email communication with Mr. Lewis,

Ms. Baughn expressed she had the cashier’s check in hand, but she was “freaking
out a little bit.” Mr. Lewis replied hours later, stating:
I totally understand the difficulty in making large changes that cost list
[sic] of money. Thank you for trusting us and allowing us to work
with you in this project.
Also, we are licensed, bonded and insured for more then [sic] the state
requires.

On or about October 22, 2021, Ms. Baughn delivered a check of $81,075.00
payable to Farmhouse Legacy, which served as her initial deposit for the project.
Ms. Baughn was told that her deposit was used for purchasing an HVAC unit,
building materials and permitting fees.

In early November of 2021, Mr. Lewis told Ms. Baughn he was seeking a
permit from Spokane County for the project. Mr. Lewis obtained a permit on April
1, 2022, which included approval for plumbing work. However, Mr. Lewis is not,

and never has been, a licensed plumber. Nor did Farmhouse Legacy employ a
licensed plumber for the Baughn project. Mark Connolley, a construction
compliance inspector from the Washington State Department of Labor & Industries
(“Department of L&I”), testified that Spokane County improperly permitted

plumbing work for Ms. Baughn’s property.
Notwithstanding his lack of a license to perform plumbing work, Mr. Lewis
undertook plumbing work on Ms. Baughn’s home. Ms. Baughn was unaware that

the plumbing work was performed by an unlicensed contractor. The plumbing
work was a critical and significant part of the construction project.3
Shortly after Mr. Lewis received the Baughn permit from Spokane County,
Mr. Lewis told Ms. Baughn that he needed additional funds to continue the project.

On May 21, 2022, Ms. Baughn tendered a second deposit of $27,025 to Farmhouse
Legacy. She paid a third deposit of $27,025 on June 25, 2022.

3 Specifically, plumbing work was to include “all labor and materials” to “[a]dd plumbing for the
new bathroom upstairs,” extend “the kitchens downstairs,” “[w]ork in the bathroom as needed,”
and “[w]ork on the septic as needed.”
By August 2022, Ms. Baughn began noticing serious issues and significant
defects with the project. For example, her home flooded from a leak in the roof,

despite prior assurances that the roof was completed months earlier.
In April of 2023, Ms. Baughn received a “Job Progress Report” which
contained an invoice for $36,994.01. The Job Progress Report stated that

$90,243.83 was spent on materials and $21,364.33 on “overhead.” However, Ms.
Baughn questioned whether $90,243.83 was spent on materials, and she testified
that she could not determine what expenses were encompassed within the claimed
“overhead” costs. Nonetheless, out of a desire get the construction project

completed, Ms. Baughn paid the invoice. In total, Ms. Baughn paid $172,119.01—
despite being promised that the project’s total cost would only be $162,150.
By September 2023—almost two years after the initial deposit—Ms.

Baughn realized her project was not progressing towards completion, the
construction was faulty, and Mr. Lewis had not used her money for expenses
related to her house as he had promised. Mr. Lewis informed Ms. Baughn that his
business was experiencing “a lot of shifting internally” and he had to terminate two

employees. Sometime in August or September of 2023, Ms. Baughn filed a
complaint related to the project with the Department of L&I.
On September 19, 2023, Mr. Lewis gave Ms. Baughn another “Job Progress

Report,” which requested an additional payment of $35,000. Ms. Baughn refused
to pay the invoice, due to the lack of progress, and because costs had already far
exceeded the original estimate set forth in the proposal.

On December 15, 2023, Mr. Connolley, of the Department of L&I, visited
Ms. Baughn’s property and investigated the construction work. Mr. Connolley
noticed a plethora of issues, particularly with the plumbing, piping, and structural

integrity of the construction work. Mr. Connolley testified that although Spokane
County had sent an inspector to approve the plumbing work at Ms. Baughn’s
property, he believed the inspector did not actually conduct a proper inspection.4
In total, the Department of L&I issued three infractions against Mr. Lewis

personally regarding Ms. Baughn’s property: (i) $500 for “failure to provide the
customer with a disclosure statement as required and/or produce a signed copy of
the disclosure statement to the Department upon request,” under RCW 18.27.114;

(ii) $500 for “advertising, offering to work, submitting a bid, or performing any
plumbing work without being licensed as a contractor,” under RCW 18.106.400(1);
and (iii) $500 for “employing a person to engage in the trade of plumbing without
a current journeyman, specialty, or trainee certificate, temporary permit, or medical

4 The Court heard conflicting testimony regarding the extent of Spokane County’s inspection of
the plumbing work. Mr. Connolley testified that, in January 2024, he met with the Spokane
County inspectors who had approved the plumbing work and was informed that the inspectors
never left their vehicle and did not actually inspect Ms. Baughn’s property. Mr. Lewis testified
that an inspector did appear at the property and conducted a proper inspection. Regardless, Mr.
Connolley’s investigation resulted in citations related to the plumbing work performed, which
Mr. Lewis never appealed.
gas endorsement,” as required by RCW 18.106.020.5 Mr. Lewis never appealed or
contested the infractions.

On November 1, 2023Ms. Baughn terminated her relationship with Mr.
Lewis via text message.
On November 2, 2023, Mr. Lewis replied to Ms. Baughn’s text message,

stating:
Hi Tammi,
I am in [sic] very saddened as well as disappointed in my self [sic]
and my company for not being able to deliver you the product we
originally discussed. There have been several factors and a laundry list
of excuses along the way. The bottom line is I have failed you and I
apologize for that. I completely understand your wanting to move on
and I dont [sic] deserve the grace you have shown thus far. Thank you
for being the kind person that you have and giving me a chance to try
and save my company through its many failures.

Ms. Baughn testified that Mr. Lewis subsequently came to her property
unannounced. During his visit, Mr. Lewis removed materials, including the HVAC
system, that he had previously said were purchased with Ms. Baughn’s money.
By December 2023, Mr. Lewis’s business was facing severe financial
problems. At trial, Mr. Lewis failed to provide credible, clear testimony revealing
the exact expenditure of Ms. Baughn’s funds, or an explanation of the “overhead”
costs and value of the materials purchased for Ms. Baughn’s project. However, the

5 Mr. Connolley testified that the Department of L&I issued the infractions against Mr. Lewis
personally because there was no licensed plumber involved to cite individually.
Court’s finding that Ms. Baughn’s deposits were not fully applied to her project is
supported by the credible evidence related to the unfinished condition of the

project, Mr. Lewis’ repeated payment requests that significantly exceeded the
initial estimate, substantial project delays, unexplained line-item expenses, and
Farmhouse Legacy’s employee turnover and severe financial indebtedness.

As a result of the substandard work, inflated charges, and removal of
property paid for by Ms. Baughn, Ms. Baughn was forced to pay other contractors
to repair her property. Although the new contractors fixed some of the defective
work, her home remains uninhabitable, and she currently resides in a recreational

vehicle parked on the property.
Morrison and Parker’s Project
Mr. Morrison and Ms. Parker are a married couple. Mr. Morrison is a

professional roofer with extensive experience working as a contractor.
Mr. Morrison testified that he first interacted with Mr. Lewis in July 2022,
when Mr. Lewis or Farmhouse Legacy constructed a road on an undeveloped
parcel in Deer Park, Washington. In late 2023, Mr. Morrison and Ms. Parker

approached Mr. Lewis again, this time seeking a contractor to build their
retirement home on the same parcel.
On December 20, 2023, Ms. Parker (on behalf of herself and Mr. Morrison)

met with Mr. Lewis and signed a project proposal on Farmhouse Legacy’s
letterhead. Under the terms of the proposal, the contractor would “provide all the
labor and materials to build [a] new home in [sic] from the ground up.” Mr.

Morrison, an experienced roofer, would complete the roofing work. Mr. Lewis
estimated the project would take between six to nine months with a start date in
“March-April” and would “break ground” as soon as weather permitted. Working

hours would be “between 7am-5pm,” Monday through Friday. Mr. Lewis estimated
the project would cost $239,046.31. Like Ms. Baughn’s proposal, the Morrison-
Parker proposal promised that “[a]bove all else, we will leave you with a home
transformation built to elite standards, high quality and integrity.”

The same day she signed the project proposal, Ms. Parker delivered a check
payable to Farmhouse Legacy for $121,890.36. Banking records revealed the
check was deposited on January 3, 2024.

On June 3, 2024, unbeknownst to Morrison and Parker, Farmhouse Legacy
was administratively dissolved. Mr. Lewis testified that the dissolution occurred
only because the employee who usually handled this detail had left the company.
Farmhouse Legacy was not administratively reinstated until January 2025, after

Mr. Lewis’s relationship with Morrison and Parker had terminated.6

6 Mrs. Lewis was no longer listed as a member of Farmhouse Legacy when it was reinstated.
Although the Morrison-Parker proposal provided that the construction would
“break ground” as soon as weather permits, or “March-April,” construction work

did not begin until September of 2024.
On September 10, 2024, Mr. Morrison inquired when Mr. Lewis planned to
secure the necessary permit and begin excavation. Mr. Lewis responded that the

permitting would be completed soon, and excavation would begin the following
week. On September 28, 2024, Mr. Lewis sent photos of the excavation work to
Mr. Morrison.
However, Mr. Morrison grew concerned about the project’s lack of progress.

On September 30, 2024, Mr. Morrison texted Mr. Lewis to report that he had
visited the work site and found it unoccupied, stating, “nobody was there.” On
October 1, 2024, Mr. Morrison texted Mr. Lewis, asking if “we were working

today.” Mr. Morrison testified that Mr. Lewis responded to his inquiries with a
series of excuses rather than substantive answers.
On October 4, 2024, Mr. Morrison texted Mr. Lewis, asking: “Where is our
money?” Mr. Lewis replied:

The money you put down is working for the business and is eagerly
waiting for your project. It has been applied to a line of credit and
credit cards allowing capacity for the business to continue to build
your home. The money is available and ready to go when needed. So
far $34,598.94 has been used towards the project in the excavation,
permitting and foundation.
Mr. Lewis’s reply was untrue; by that date, he had used most of the
Morrison-Parker deposit to pay debts that were unrelated to their project.

Moreover, Mr. Lewis testified that at the time Farmhouse Legacy received Ms.
Parker’s check, Farmhouse Legacy’s line of credit was maxed out. Even with the
debts of Farmhouse Legacy and Mr. Lewis being reduced by the payments from

Morrison and Parker, Farmhouse Legacy and Mr. Lewis did not have the financial
resources to build the home for Morrison and Parker as promised.
Morrison and Parker terminated their relationship with Mr. Lewis and
Farmhouse Legacy shortly afterwards. On October 11, 2024, Mr. Morrison emailed

Mr. Lewis to express that he and Ms. Parker were not comfortable with their funds
being used to pay down Mr. Lewis’s “equity line of credit” or to finance his
business. Mr. Morrison requested a refund, which neither he nor Ms. Parker

received.
By the time Morrison and Parker terminated the project, Mr. Lewis and
Farmhouse Legacy had done little more than dig a hole on the property. Of the
$121,890.36 deposit, Mr. Lewis admitted that no more than $34,598.94 had been

applied to the Morrison and Parker project, while the remaining balance was
diverted and applied to Farmhouse Legacy’s existing debts.7 Given the limited

7 A small portion of the deposit, approximately $8,609.36, was used to pay sales tax.
work performed on the project, Mr. Morrison testified that Mr. Lewis
misrepresented how the money was spent. Mr. Morrison’s testimony is credible.

At trial, Mr. Morrison testified that he and his wife always understood they
were contracting directly with Mr. Lewis, not Farmhouse Legacy. He further stated
that he would not have agreed to proceed had he known that the deposit would be

used for purposes other than constructing his home.
Bankruptcy
The Debtors filed for chapter 13 bankruptcy on April 2, 2025. Debtors’
sworn schedules, filed with the petition, list Morrison and Parker, and Ms. Baughn,

as unsecured creditors. (ECF No. 1, pp. 23, 25) Specifically, Debtors stated that
Morrison and Parker had an unsecured claim of $121,890.36, and Ms. Baughn had
an unsecured claim of $40,000.8 Additionally, Mr. Lewis asserted he was employed

as an estimator for ASC Machine Tools Inc, where he claimed to have been
employed for one-and-a-half years pre-petition.9
On June 2, 2025, Morrison and Parker filed Proof of Claim No. 12-1,
alleging $121,890.36 owed for “[c]ash down payment on dream home.” Debtors

8 Debtors’ Statement of Financial Affairs also denotes Ms. Baughn has a pending state court
lawsuit against the Debtors. (ECF No. 1, p. 37) See Baughn v. Farmhouse Legacy Co, LLC,
Spokane Cnty. Sup. Ct. Case No. 25-2-00655-32.
9 This assertion places the beginning of Mr. Lewis’s employment at ASC Machine Tools Inc. at
approximately November of 2023, the same time Farmhouse Legacy agreed to perform work
“full-time” for Morrison and Parker, and shortly after Ms. Baughn terminated her relationship
with Farmhouse Legacy.
objected to the claim, alleging the debt was Farmhouse Legacy’s debt, not the
Debtors’ personal debt.

On June 3, 2025, Ms. Baughn filed Proof of Claim No. 13-1, alleging
$234,000 owed for “[c]ash payments for home renovations + appliances.” Debtors
objected to the claim, similarly alleging the debt was Farmhouse Legacy’s debt,

not the Debtors’ personal debt.
Morrison and Parker filed an adversary complaint against the Debtors on
June 13, 2025, alleging four causes of action: (i) non-dischargeability under
§ 523(a)(2)(A) for money obtained by false pretenses, a false representation, or

actual fraud; (ii) non-dischargeability under § 523(a)(4) for fraud of defalcation
while acting in a fiduciary capacity; (iii) non-dischargeability under § 523(a)(6) for
willful and malicious injury; and (iv) violations of the Washington Consumer

Protection Act, RCW 19.86.020. Ms. Baughn filed an adversary complaint on June
17, 2025, alleging the same four causes of action.
This Court confirmed the Debtors’ chapter 13 plan on July 23, 2025. As of
the date of this order, the Debtors are current on their plan payments.

The Court held a combined trial on both adversary matters on January 29
and 30, 2026. The Debtors appeared pro se. Farmhouse Legacy was not
represented by counsel. At trial, the Court heard testimony from: Mark Connolley,
of the Department of L&I, who had issued citations related to Ms. Baughn’s
project; Ms. Baughn; Mr. Morrison; Mrs. Lewis; and Mr. Lewis.

Piercing the Corporate Veil
In the State of Washington, piercing the corporate veil or “alter ego” theories
are known as “corporate disregard.” The question whether the corporate form

should be disregarded is a question of fact. Truckweld Equip. Co. v. Olson, 26
Wash. App. 638, 643 (1980). Corporate disregard is an equitable remedy,
warranted in exceptional circumstances where recognition of the corporate form
would aid in perpetrating a fraud or result in a manifest injustice. Id. In determining whether to disregard the corporate form, the reviewing court
examines whether (1) the corporate form was intentionally used to violate or evade
a duty, and (2) disregard is necessary to prevent unjustified loss to the injured

party. Meisel v. M&N Modern Hydraulic Press Co., 97 Wn.2d 403, 410 (1982).
However, “the absence of an adequate remedy alone does not establish corporate
misconduct.” Id. at 410–11.
Regarding the first element, intentional violations or evasions of a duty

typically involve “fraud, misrepresentation, or some form of manipulation of the
corporation to the stockholder’s benefit and creditor’s detriment.” Id. (quoting
Truckweld, 26 Wash. App. at 645).
Regarding the second element, the plaintiff must “show that disregarding the
corporate form is necessary to avoid the consequences of intentional misconduct

harmful to the plaintiff.” Landstar Inway Inc. v. Samrow, 181 Wash. App. 109, 123 (2014) (citing Meisel, 97 Wn.2d at 410). “This portion of the test for corporate
disregard focuses on the nexus between the abuse of the corporate form and the

injury the plaintiff claims justifies the disregard of the corporate form.” Id. at 128.
“[W]here one entity ‘so dominates and controls a corporation that such
corporation is [the entity's] alter ego, a court is justified in piercing the veil of
corporate entity and holding that the corporation and private person are one and the

same.’” In re Rapid Settlements, Ltd. v. Symetra Life Ins. Co., 166 Wash. App. 683,
692 (2012) (quoting Standard Fire Ins. Co. v. Blakeslee, 54 Wash. App. 1, 5 (1989)).

Ms. Baughn Introduced Substantial Evidence that Supports Corporate Disregard.
Ms. Baughn has established with substantial, credible evidence that Mr.
Lewis intentionally used Farmhouse Legacy’s corporate form to violate or evade a
duty, and disregard of the corporate form is necessary to prevent unjustified loss to

Ms. Baughn.
First, Mr. Lewis personally misrepresented his ability to perform work on
Ms. Baughn’s property, and the misrepresentations caused Ms. Baughn to make

deposits on the project. Mr. Lewis made multiple representations to induce Ms.
Baughn to make payments, including that “we are licensed, bonded, and insured
for more than the state requires,” even though he knew these statements were false.

The credible evidence also suggests Mr. Lewis used Ms. Baughn’s deposits for
purposes unrelated to her project. While Farmhouse Legacy’s employees came and
went, Mr. Lewis remained Farmhouse Legacy’s primary decision-maker and he

decided where to spend the money.
Second, Ms. Baughn’s injury flows directly from Mr. Lewis’s misuse of the
corporate form. The evidence reveals that Ms. Baughn’s deposits were not fully
applied to her project, and that Mr. Lewis used the corporate entity while the

corporation was financially distressed to continue accepting customer funds. This
case involves more than poor workmanship; Mr. Lewis made intentional
misrepresentations, he committed statutory violations, and he overcharged Ms.

Baughn without any credible explanation of where her money was spent. By the
time Ms. Baughn terminated the project, her funds had dissipated. Without
disregarding the corporate form, Ms. Baughn will likely never recover any of the
money she gave to Mr. Lewis.

Morrison and Parker Introduced Substantial Evidence that Supports Corporate
Disregard.

Mr. Morrison and Ms. Parker established with substantial, credible evidence
that Mr. Lewis intentionally used Farmhouse Legacy’s corporate form to violate or
evade a duty to them, and disregard of the corporate form is necessary to prevent
unjustified loss to Mr. Morrison and Ms. Parker.

First, Mr. Lewis abused the corporate form by misrepresenting how
Morrison and Parker’s deposit would be used. Morrison and Parker paid
$121,890.36 after Mr. Lewis promised their funds would be used to build their

home. Specifically, Mr. Lewis told Mr. Morrison: “the money is available and
ready to go when needed.” However, Mr. Lewis knew at the time he made the
statement that it was false and that he intended to use the deposit to pay Farmhouse
Legacy’s debts unrelated to the Morrison-Parker project. Mr. Lewis remained the

primary decision-maker of Farmhouse Legacy and controlled the flow of funds—
even while Farmhouse Legacy was administratively dissolved for six months.
Second, Morrison and Parker suffered actual harm from Mr. Lewis’s

actions because the funds they paid were intended for constructing a house,
but Mr. Lewis only managed to dig a hole for the foundation. The majority
of the Parker-Morrison money was spent on unrelated debts of Farmhouse
Legacy. Absent disregard of the corporate form, Morrison and Parker are

unlikely to recover their deposits.
Direct Liability under Washington’s Consumer Protection Act (“CPA”)
Additionally, Mr. Lewis is personally liable because he violated

Washington’s Consumer Protection Act (“CPA”), RCW 19.86.020.
Washington’s CPA provides that “unfair or deceptive acts or practices in the
conduct of any trade or commerce are … unlawful.” RCW 19.86.020. The

legislature has directed that the CPA “be liberally construed that its beneficial
purposes may be served.” Id. “If a corporate officer participates in wrongful conduct or with knowledge

approves of the conduct, then the officer, as well as the corporation, is liable for the
penalties.” Grayson v. Nordic Constr. Co., 92 Wn.2d 548, 554 (1979) (citing State
v. Ralph Williams’ North West Chrysler Plymouth, Inc., 87 Wn.2d 298 (1976)); see
also State v. Arlene’s Flowers, Inc., 193 Wn.2d 469 (2019) (holding florist

personally liable for violating the CPA even though she kept her affairs separate
from the corporation and no traditional grounds existed to pierce the corporate
veil).

Injured plaintiffs may enforce the CPA. RCW 19.86.080, .090; see generally
Young v. Toyota Motor Sales, U.S.A., 196 Wn.2d 310, 316 (2020). To prevail under
the Washington CPA, a private plaintiff must establish “(1) an unfair or deceptive
act or practice, (2) occurring in trade or commerce, (3) affecting the public interest,

(4) injury to a person’s business or property, and (5) causation.” Panag v. Farmers
Ins. Co. of Wash., 166 Wn.2d 27, 37 (citing Hangman Ridge Training Stables, Inc.
v. Safeco Title Ins. Co., 105 Wn.2d 778, 784 (1986)). “[A] claim under the

Washington CPA may be predicated upon a per se violation of statute, an act or
practice that has the capacity to deceive substantial portions of the public, or an
unfair or deceptive act or practice not regulated by statute but in violation of public

interest.” Klem v. Wash. Mut. Bank, 176 Wn.2d 771, 787 (2013). A plaintiff
alleging injury under the CPA must establish all five elements. Hangman Ridge, 105 Wn.2d at 780.

Ms. Baughn Established Mr. Lewis Violated the Washington CPA.
First, Mr. Lewis engaged in deceptive practices. Credible evidence
introduced at trial revealed Mr. Lewis represented that he was “licensed,
bonded, and insured” for an amount “more than” Washington state requires,

and that Ms. Baughn’s deposit would fund licensed, quality work. Yet, Mr.
Lewis personally performed unlicensed and defective plumbing work on Ms.
Baughn’s property, which resulted in the imposition of infractions.

Second, the deceptive acts and practices occurred in trade or
commerce because Mr. Lewis made the misrepresentations in the course of
operating a home renovation and construction business.
Third, Mr. Lewis’s deceptive acts affect the public interest. The public

has an interest in protection from false representations regarding licensure
and from substandard or unlicensed construction work.
Fourth, Ms. Baughn suffered significant financial injury. She lost the

benefit of her deposits and incurred additional costs for remedial work.
Fifth, Ms. Baughn’s injury flows directly from Mr. Lewis’s conduct.
Mr. Lewis personally made the representations, controlled the project,

performed portions of the work, and directed Ms. Baughn’s funds to be
applied to expenses other than the Baughn project.
Because Mr. Lewis, as a corporate officer of Farmhouse Legacy,

participated in wrongful conduct, Mr. Lewis is personally liable for the
penalties.
Mr. Morrison and Ms. Parker Established Mr. Lewis Violated the
Washington CPA.

First, Mr. Lewis engaged in deceptive practices. He represented that
the deposit from Morrison and Parker would be applied to constructing their
retirement home, but instead he used their money to pay unrelated
Farmhouse Legacy’s debts.
Second, the deceptive acts and practices occurred in trade or

commerce because Mr. Lewis made the misrepresentations in the course of
operating a home renovation and construction business.
Third, Mr. Lewis’ deceptive acts affect the public interest. The public
has an interest in protection from false representations regarding licensure

and from substandard or unlicensed construction work.
Fourth, Morrison and Parker suffered financial injury. They lost the
benefit of their deposit and incurred additional costs to construct the home.
Fifth, the injury suffered by Morrison and Parker flows directly from
Mr. Lewis’s conduct. Mr. Lewis personally made the representations,

controlled the project, performed portions of the work, and directed the
Morrison-Parker funds to be applied to expenses other than the Morrison-
Parker project.

Because Mr. Lewis, as a corporate officer of Farmhouse Legacy,
participated in wrongful conduct, Mr. Lewis is personally liable for the
penalties.
Non-dischargeability under § 523(a)(2)(A)

A debt may be non-dischargeable in bankruptcy if it is obtained by false
pretenses, false representations, or actual fraud, except if the false statement was “a
statement respecting the debtor’s financial condition.” 11 U.S.C. § 523 (a)(2)(A).

Section 523(a)(2)(A) concerns oral statements. See 11 U.S.C. § 523 (a)(2)(B)
(providing specific elements for materially false written statements).
To prevail on a claim under § 523(a)(2)(A), a creditor must establish five
elements: (1) the debtor made representations; (2) that at the time the debtor knew

were false; (3) that the debtor made them with the intention and purpose of
deceiving the creditor; (4) that the creditor relied on such representations; and (5)
that the creditor sustained the alleged loss and damage as the proximate result of
the debtor’s misrepresentations. Ghomeshi v. Sabban (In re Sabban), 600 F.3d
1219, 1222 (9th Cir. 2010).

The creditor bears the burden of proving all five of these elements by a
preponderance of the evidence. Id. To strike a balance between allowing debtors a
fresh start and preventing a debtor from retaining the benefits of property obtained

by fraudulent means, exceptions to discharge under § 523(a)(2)(A) are construed
strictly against creditors and in favor of debtors. Id.
The Debt owed Ms. Baughn is Non-Dischargeable under § 523(a)(2)(A)
At trial, Ms. Baughn proved by a preponderance of the evidence that the

debt owed to her is not dischargeable under § 523(a)(2)(A).
First, Mr. Lewis made false representations to Ms. Baughn that he was
licensed to do the work and that he had the current ability to construct a finished,

and livable, two-story addition to her home.
Second, at the time Mr. Lewis made the false representations about his
licensure and ability to construct the livable, two-story addition, he did not have a
plumbing license, nor the necessary resources to complete the Baughn project.

Third, Mr. Lewis misrepresented his licensure and ability to construct a
finished, and livable, two-story addition to Ms. Baughn’s home because he knew
that Ms. Baughn would not give him the money if he lacked the proper licenses

and ability to construct the addition.
Fourth, Ms. Baughn’s credible testimony demonstrated that she would not
have entered into any construction agreement with Mr. Lewis if he had honestly

represented his licensure or ability to perform.
Fifth, Ms. Baughn suffered a loss of $172,119.01.10 She paid Mr. Lewis
$172,119.01 for a construction project that was initially estimated to cost

$162,150. However, the credible evidence at trial established that Ms. Baughn
received no benefit. For example: the plumbing work had to be replaced because
parts were installed in the wrong place and some of the drainage pipes, as installed,
would have required water to impossibly drain up hill; the roof was installed with

holes so it leaked; a window was installed backwards; and faulty drywall work had
to be replaced.
The Debt to Morrison and Parker is Non-Dischargeable under § 523(a)(2)(A).

At trial, Morrison and Parker proved by a preponderance of the evidence that
the debt owed to them is not dischargeable under § 523(a)(2)(A).
First, Mr. Lewis and Mr. Morrison spoke to each other on many occasions
about Mr. Lewis building a home for Mr. Morrison and his wife. Through his

credible testimony, Mr. Morrison established that Mr. Lewis represented that the
money he would receive from Morrison and Parker, which totaled $121,890.36,

10The amount paid by Ms. Baughn ($172,119.01) is less than her proof of claim ($234,000). At
trial Ms. Baughn proved that she received no value from Mr. Lewis’ work on her home; however,
she did not prove that her nondischargeable damages totaled more than $172,119.01.
would be used for materials and other costs of constructing Morrison and Parker’s
new home.

Second, Mr. Morrison established through credible testimony and admitted
evidence that at the time Mr. Lewis made the misrepresentations, Mr. Lewis was
under financial distress. At the time Mr. Lewis accepted the Morrison-Parker

money, Mr. Lewis planned to use their money to cover debts that were unrelated to
building their home.11
Third, the evidence establishes that Mr. Lewis deliberately misrepresented
how he would use Morrison and Parker’s money because he knew that if he told

the truth, Morrison and Parker would not provide him the money.
Fourth, Mr. Morrison’s credible testimony demonstrated that Morrison and
Parker would not have entered into any construction agreement with Mr. Lewis or

Farmhouse Legacy if they had known their money would be used for anything
other than building their home.
Fifth, Morrison and Parker suffered a loss of $121,890.36. By the end of
their business relationship, the only work performed by Mr. Lewis or Farmhouse

11Moreover, the evidence revealed that even if the Morrison-Parker money was used for other
debts of Mr. Lewis or his company, the cash infusion would not have freed up credit to allow Mr.
Lewis to use credit to pay for costs related to the Morrison-Parker construction. After Morrison
and Parker paid the money to Mr. Lewis, his business line of credit was still maxed-out.
Legacy was preliminary excavation for a foundation—no rebar was installed, and
no concrete was poured; only a hole had been dug.12

Mrs. Lewis’s Separate Estate Liability
A recent opinion of the United States Supreme Court sets forth the law this
Court must follow in determining whether Mr. Lewis’s actions result in a separate,

nondischargeable debt against Mrs. Lewis. See Bartenwerfer v. Buckley, 598 U.S.
69 (2023). Bartenwerfer holds that when a debt is created by one spouse’s
misrepresentations in operating a business, and the second spouse is a partner in
the business, that debt is nondischargeable against both spouses pursuant to §

523(a)(2)(A), even where the second spouse did not make the misrepresentations.
The Ninth Circuit Bankruptcy Appellate Panel explained the Bartenwerfer case:
“In sum, Bartenwerfer relied on a combination of textual analysis, prior Supreme

Court precedent, and the congressional response to that Supreme Court precedent
to conclude that § 523(a)(2)(A) rendered nondischargeable a debtor-partner’s
vicarious liability for another partner’s fraud.” In re Del Rosario, 668 B.R. 618,
626 (9th Cir. BAP 2025).

12Ms. Baughn, and Morrison and Parker, also argued that §§ 523(a)(4) and (6) are alternative
bases for the relief requested. However, since the amount of the plaintiffs’ claims are the same
under all subsections of § 523(a), and given that the plaintiffs have prevailed under
§ 523(a)(2)(A), the Court will not opine on the causes of action based on (a)(4) or (6).
In light of Bartenwerfer, for Mrs. Lewis to avoid separate liability for Mr.
Lewis’s misrepresentations, the Court must find that she was not “a partner” in Mr.

Lewis’s business. The factors a federal court considers in determining the existence
of a partnership include: (i) whether the parties have executed a partnership
agreement; (ii) whether the parties have represented themselves as co-business-

owners, including operating in the name of each family member or filing joint
documents regarding business operations; (iii) whether each party is entitled to
receive profits and holds responsibility for losses; (iv) whether each party has
control over business assets; (v) whether each party contributed financially to the

business; (vi) whether each party makes substantial contributions of key services to
the business; and (vii) whether the family member receives compensation for those
services (including whether the family member receives a salary rather than a share

of profits). See Theresa J. Pulley Radwan, Till Death Do us Part (NER): Imputed
Fraud Liability Concerns for Spouses Following the Supreme Court’s Decision in
Bartenwerfer v. Buckley, 59 Ga. L. Rev. 149, 192 (2024) (citing Comm’r v.
Culbertson, 337 U.S. 733 (1949)).

Washington state courts use similar factors for determining the existence of a
partnership. See DeFelice v. Emp’t Sec. Dep’t, 187 Wash. App. 779, 788–89 (2015)
(listing various factors which lend towards a partnership, such as: joint ownership

of the business, a joint right of control over the business’s affairs, whether a person
receives profit shares outside of employment wages, an express or implied
contractual agreement, and sharing losses); see also RCW 25.05.055 (discussing

partnership formation in Washington).
When reviewing the facts related to the claims of Ms. Baughn and Mr.
Morrison and Ms. Parker, this Court concludes that Mrs. Lewis was not a partner in

Mr. Lewis’s business and thus she has no separate nondischargeable debt.
Primarily, no credible evidence was presented to suggest Mrs. Lewis acted
as a business partner. She never executed a partnership agreement with Mr. Lewis
regarding Farmhouse Legacy, nor did she act in a way that suggested she had a

partnership agreement with Mr. Lewis. The evidence introduced at trial revealed
only Mr. Lewis or Farmhouse Legacy employees made representations on behalf
of the business. Mrs. Lewis was never an employee of the business. Furthermore,

no evidence was presented to indicate Mrs. Lewis directly received profits or had
direct personal responsibility for losses of the business.13 Nor did she have any
control over business assets or how customers’ money was used or applied to
existing debts. No evidence suggested Mrs. Lewis made financial or other

13 The court uses the adverb “directly” when discussing the relevant factors used in determining
if Mrs. Lewis was a “partner” in order to distinguish (i) the benefits Mrs. Lewis could possibly
receive from being in a marital community with Mr. Lewis and (ii) any possible benefits she
could receive separately.
substantial contributions to the business. Finally, Mrs. Lewis did not receive any
compensation from the business, nor did she directly receive the profits.

Although both Mr. and Mrs. Lewis were listed as “members” of Farmhouse
Legacy, LLC, Mr. Lewis was the only party that acted with disregard for the
corporate form and committed CPA violations. None of the evidence presented at

trial suggested Mrs. Lewis violated or evaded a duty using Farmhouse Legacy’s
corporate form, and Mrs. Lewis did not contribute to or amplify any of the losses
incurred by Ms. Baughn and/or Mr. Morrison and Ms. Parker.
Without any credible evidence to suggest a business partnership between

Mrs. Lewis and Mr. Lewis, Mrs. Lewis cannot be vicariously liable for Mr. Lewis’s
acts.
III. CONCLUSION

The Court will enter judgments in each adversary proceeding consistent with
the above memorandum order.14
///End of Order///

14 At trial neither plaintiff requested an award of exemplary damages or attorney fees pursuant to
the CPA. Accordingly, no such damages or fees will be included in the judgment.