Opinion
No. 31298-1-II
Filed: May 24, 2005 UNPUBLISHED OPINION
Appeal from Superior Court of Grays Harbor County. Docket No: 02-4-00145-2. Judgment or order under review. Date filed: 12/19/2003. Judge signing: Hon. F. Mark McCauley.
Counsel for Appellant/Cross-Respondent, Jean Meschke Bouffard, Attorney at Law, 22212 SE 272nd St, Maple Valley, WA 98038-7420.
Counsel for Respondent/Cross-Appellant, Charles Scott Sage, Valdez Sage, PO Box 160, Ocean Shores, WA 98569-0160.
Elisabeth B. Haubrick (Appearing Pro Se), 110 Gehrke Rd, Port Angeles, WA 98362.
John Dore Schumacher, Attorney at Law, 217 W Pioneer Ave, Montesano, WA 98563-4410.
Amy Whitbeck's stepsons appeal an order confirming the sale of Whitbeck's home to her grandson, Bert Haubrick. The sale was not completed until after Whitbeck's death and the Real Estate Purchase and Sale agreement (REPSA) Whitbeck had signed set the sale price below the home's fair market value. On appeal, the stepsons contend that the contract for sale terminated either on Whitbeck's death or when the sale failed to close on the date listed in the REPSA and that the personal representative (PR) of Whitbeck's estate breached her fiduciary duty by completing the sale after Whitbeck's death. The trial court denied the stepsons' request to set aside the sale under the Trust and Estate Dispute Resolution Act (TEDRA), chapter 11.96A RCW, and the stepsons appeal. Haubrick and the PR cross-appeal the amount of their attorney fee award. We affirm the trial court in all respects.
FACTS
Whitbeck died in August 2002 at the age of 87. Surviving her were three daughters, Bette Haubrick, Jean Denson, and Janice Thacker, and two stepsons, Willard and Gordon Whitbeck (stepsons). Whitbeck's estate consisted primarily of her residence in Montesano, Grays Harbor County, Washington. Whitbeck's will devised her estate in equal shares to her three daughters and two stepsons. She named her daughter, Bette, as PR with nonintervention powers.
Whitbeck was known for being a strong-willed and independent woman, but her health was rapidly declining during the summer of 2002. She wanted to keep her home within her family. She had asked her three daughters if they would be interested in the home. Around the end of June 2002, daughter Jan, family friend Marilyn Boring, Haubrick, and another grandson, Larry, were working in the garden at the Whitbeck residence. Jan told Haubrick that Whitbeck had approached each of her three daughters about buying the house, but they were not interested. Jan suggested that if Haubrick was interested in buying the place, he should let his grandmother know.
In mid-July, Whitbeck's doctor sent her to the University of Washington Medical Center in Seattle. Testing there revealed that Whitbeck had cancer and she was advised to obtain hospice care. She returned to her home in Montesano and died a few weeks later.
Although her stepson, Willard, had apparently offered to buy the house for $75,000 on various occasions, Whitbeck told her daughter, Jan, that she would not sell the home to Willard: `She was afraid he was going to turn it into a trailer park.' Report of Proceedings (RP) (May 7, 2003) at 135.
Haubrick approached Whitbeck in July 2002, and asked her what would happen to the house. Whitbeck asked Haubrick if he was interested in the house and if he would actually live in it. He responded that he would live in the house and she offered to sell it to him for $50,000.
Haubrick also promised to take care of her cat.
The stepsons asserted that the home was worth between $110,000 and $125,000. Haubrick disputed this because, as he testified, he had discovered that the house required expensive repairs.
Soon after this discussion with his grandmother, Haubrick went to see an acquaintance in Sequim to obtain financing to buy the house. On August 2, 2002, Haubrick presented a REPSA to his grandmother, which the acquaintance had helped him fill out. Haubrick thought it was a `fairly standard boilerplate document.' Report of Proceedings (RP) (May 7, 2003) at 112. Under the REPSA, the sale was to close on August 15, 2002. Whitbeck signed the REPSA.
Although the REPSA did not contain provisions stating that Haubrick would live in the residence or care for Whitbeck's cat, he was doing both at the time of trial.
Whitbeck's friends and daughters testified that Whitbeck mentioned she was pleased that Haubrick would have the home.
Whitbeck died on August 10. On August 20, the court appointed her daughter, Bette, as PR with nonintervention powers. On August 30, 2002, the PR completed the sale of the house to Haubrick.
On November 25, 2002, the stepsons filed a TEDRA petition under chapter 11.96A RCW challenging the PR's sale of the home. On January 15, 2003, they moved for summary judgment. The trial court denied the stepsons' summary judgment motion, entering a written order on May 7, 2003, and it denied their subsequent motion for reconsideration of the decision in a March 13, 2003 letter ruling. Trial was held on May 7, 2003, and the trial court entered its findings of fact and conclusions of law on December 19, 2003. The stepsons appeal. The PR and Haubrick cross-appeal on the issue of attorney fees.
RCW 11.96A.100(8) provides for `a hearing on the merits to resolve all issue of fact and all issues of law.'
The stepsons also challenge the trial court's denial of their summary judgment motion. But `a denial of summary judgment cannot be appealed following a trial if the denial was based upon a determination that material facts are in dispute and must be resolved by the trier of fact.' Svendgard v. State, 122 Wn. App. 670, 682-83, 95 P.3d 364 (2004) (quoting Johnson v. Rothstein, 52 Wn. App. 303, 304, 759 P.2d 471 (1988)).
ANALYSIS Expiration of REPSA
The stepsons claim that because the REPSA contained a `time is of the essence' clause and set the closing date for August 15, 2002, the contract expired under its own terms when that date passed without Haubrick having tendered performance. The stepsons contend that substantial evidence does not support the trial court's finding that, but for Whitbeck's death, Haubrick was `ready, willing, and able to perform' on the closing date. Br. of Appellant at 16.
But the stepsons' argument begs the question. When, as here, a contract requires performance by both parties, the party claiming nonperformance of the other must first prove the party's own performance. Willener v. Sweeting, 107 Wn.2d 388, 394, 730 P.2d 45 (1986) (citing Reynolds Metals Co. v. Elec. Smith Constr. Equip. Co., 4 Wn. App. 695, 483 P.2d 880 (1971)). A vendor selling land may not put the buyer in default until the vendor has offered to perform; the payment of the purchase price and the delivering of the deed are concurrent acts. Willener, 107 Wn.2 at 395 (citing Bendon v. Parfit, 74 Wash. 645, 134 P. 185 (1913)). Thus, even if the REPSA's `time is of the essence clause' required that the sale close on August 15, without a PR, Whitbeck's estate was unable to perform by tendering the deed.
Because the stepsons could not prove the threshold requirement that the estate was ready to perform on August 15, whether Haubrick had the ability to perform on August 15 was immaterial. The PR was not appointed until August 20, and Whitbeck's estate was not in a position to tender its own performance on August 15. Thus, on this record, the trial court did not err in refusing to set aside the sale of Whitbeck's home to her grandson under terms of the REPSA she signed shortly before her death.
In addition, substantial evidence supports the trial court's finding that Haubrick was ready to close on his purchase of the property on August 15. And the stepsons point to nothing in the record showing that financing was not available on that date. That the disbursement of the loan funds and completion of the transaction did not actually occur until a few weeks after the original closing date does not undermine the trial court's finding that Haubrick was able to do so on August 15.
We uphold challenged findings of fact if they are supported by substantial evidence. In re Estate of Jones, 152 Wn.2d 1, 8, 93 P.3d 147 (2004). Substantial evidence is evidence sufficient to persuade a rational, fair-minded person of the truth of the finding. Jones, 152 Wn.2d at 8.
On direct examination, Haubrick's counsel asked, `[D]id you have any reason to believe [the lender] wouldn't have been ready to go on [August] 15th?' Haubrick replied, `No I did not.' RP (May 7, 2003) at 115. On cross examination, Haubrick testified, `My friend at Franklin Mortgage told me that he expected it to be ready to go [on the 15th].' RP (May 7, 2003) at 118. He also testified that `[a]s far as I knew' financing was available on that date. RP (May 7, 2003) at 119. Thus, the stepsons' claim that Haubrick `admits he had no actual knowledge of when his financing became available' (Br. of Appellant at 11) is misleading.
Exclusion of Escrow Agent's Testimony
The stepsons contend that the trial court abused its discretion by excluding the testimony of escrow agent Carol McGowan, who, they claim, would have testified as to the availability of loan funds on the original closing date, August 15. But we do not reach this issue because Haubrick's readiness to perform on August 15 is immaterial. Vesting of Title in Devisees Under RCW 11.04.250
Next, the stepsons argue that even if the REPSA did not automatically expire on the closing date, ownership of the house immediately vested in the devisees by operation of law under RCW 11.04.250 upon Whitbeck's death. Correspondingly, they argue that the REPSA was automatically extinguished upon the death of the seller and that the PR then owed them a fiduciary duty to sell the house to the highest bidder. We disagree.
That statute provides:
When a person dies seized of lands, tenements or hereditaments, or any right thereto or entitled to any interest therein in fee or for the life of another, his title shall vest immediately in his heirs or devisees, subject to his debts, family allowance, expenses of administration and any other charges for which such real estate is liable under existing laws. No administration of the estate of such decedent, and no decree of distribution or other finding or order of any court shall be necessary in any case to vest such title in the heirs or devisees, but the same shall vest in the heirs or devisees instantly upon the death of such decedent: PROVIDED, That no person shall be deemed a devisee until the will has been probated. The title and right to possession of such lands, tenements, or hereditaments so vested in such heirs or devisees, together with the rents, issues and profits thereof, shall be good and valid against all persons claiming adversely to the claims of any such heirs, or devisees, excepting only the personal representative when appointed, and persons lawfully claiming under such personal representative; and any one or more of such heirs or devisees, or their grantees, jointly or severally, may sue for and recover their respective shares or interests in any such lands, tenements, or hereditaments and the rents, issues and profits thereof, whether letters testamentary or of administration be granted or not, from any person except the personal representative and those lawfully claiming under such personal representative.
RCW 11.04.250.
Title to real estate does `vest' immediately upon death in the devisees or heirs. RCW 11.04.250; In re Estate of Jones, 152 Wn.2d 1, 12, 93 P.3d 147 (2004). But the devisees are not entitled to treat the property as their own until after the probate proceeding is closed. Jones, 152 Wn.2d at 14 (citing In re Estate of Peterson, 12 Wn.2d 686, 734, 123 P.2d 733 (1942)). During probate, a PR has the authority to convey a decedent's real property under contracts existing at the time of the death. RCW 11.60.010 provides:
If any person, who is bound by contract, in writing, shall die before performing said contract, the superior court of the county in which the estate is being administered, may upon application of the personal representative, without notice, make an order authorizing and directing the personal representative to perform such contract.
Similarly, In re Murphy's Estate, 191 Wash. 180, 197, 71 P.2d 6 (1937), states:
If any person, who is bound by contract, in writing, to convey any real property, shall die before making the conveyance, the superior court of the county in which the estate is being administered, may upon application of the executor or administrator, without notice, make an order authorizing and directing the executor or administrator to convey such real property to the person entitled thereto.
(Quoting Rem. Rev. Stat. sec. 1558.)
As the PR of her mother's estate with nonintervention powers, Bette was required to carry out binding contracts made by her during her lifetime and was empowered to do so without court order, notice, or approval. See former RCW 11.68.090 (1997). See also In re Murphy's Estate, 191 Wash. 180, 192, 71 P.2d 6 (1937); Fulmer v. Gable, 73 Wash. 684, 132 P. 641 (1913). The trial court did not err in refusing to set aside the sale on this basis.
Former RCW 11.68.090(1) states:
Any personal representative acting under nonintervention powers . . . may mortgage, encumber, lease, sell, exchange, convey, and otherwise have the same powers, and be subject to the same limitations of liability, that a trustee has under RCW 11.98.070 and chapters 11.100 and 11.102 RCW with regard to the assets of the estate, both real and personal, all without an order of court and without notice, approval, or confirmation, and in all other respects administer and settle the estate of the decedent without intervention of court.
(Emphasis added).
Confidential Relationship and Undue Influence
Next, the stepsons argue that a confidential relationship existed between Whitbeck and Haubrick and that Haubrick exerted undue influence over Whitbeck to get her to sign the REPSA.
Where one party is under the domination of another, by virtue of the relation between them, one is justified in assuming that the other party will not act in a manner inconsistent with his welfare, and a transaction induced by unfair persuasion of the latter is induced by undue influence and is voidable. See Gerimonte v. Case, 42 Wn. App. 611, 613, 712 P.2d 876 (1986) (citing Pleuss v. Seattle, 8 Wn. App. 133, 137, 504 P.2d 1191 (1972)). No meeting of the minds occurs and a contract may be invalid. Gerimonte, 42 Wn. App. at 613. A party seeking to invalidate a contract or bequest must prove undue influence by clear and convincing evidence. White v. White, 33 Wn. App. 364, 369, 655 P.2d 1173 (1982). The following evince circumstances of undue influence: (1) the beneficiary occupied a fiduciary or confidential relation to the donor; (2) the beneficiary actively participated in preparing the document or will providing for the transfer; and (3) the beneficiary received an unnaturally large share of the estate. Put another way, the relationship between the parties, the opportunity for exerting undue influence, and the naturalness of the gift are relevant to the inquiry. Gerimonte, 42 Wn. App. at 613-14 (citing Peters v. Skalman, 27 Wn. App. 247, 255, 617 P.2d 448, review denied, 94 Wn.2d 1025 (1980)).
Generally, one seeking to set aside an inter vivos gift has the burden of showing its invalidity. Lewis v. Estate of Lewis, 45 Wn. App. 387, 388, 725 P.2d 644 (1986). The burden shifts to the beneficiary, however, if the donor and donee shared a confidential relationship. Lewis, 45 Wn. App. at 388-89. In addition to relationships historically considered fiduciary in character (e.g., trustee and beneficiary, principal and agent, attorney and client), a confidential relationship may exist in fact when (1) one person has gained the confidence of the other and (2) purports to act or advise with the other's interest in mind. McCutcheon v. Brownfield, 2 Wn. App. 348, 357, 467 P.2d 868, review denied, 78 Wn.2d 993 (1970).
In Pedersen v. Bibioff, 64 Wn. App. 710, 719-20, 828 P.2d 1113 (1992), Division One of this court found a confidential relationship existed between a father and his adopted son when the father relied on and trusted the son to assist him in paying bills and taking care of business matters because the father was unable to read, write, or understand written English. In contrast, Division One held in Lewis that no confidential relationship existed between a mother and her son because the mother was not dependent on her son's advice to form the basis of her decisions. 45 Wn. App. at 391.
Whether the burden of proof at trial is preponderance of the evidence, clear and convincing evidence, or proof beyond a reasonable doubt, when substantial evidence supports them, we will not disturb the trial court's findings of fact. Gerimonte, 42 Wn. App. at 615 n. 2. Evidence is sufficient if it persuades a fair-minded rational person that there is truth to the declared premise. Jones, 152 Wn.2d at 8.
Here, the court found: `There is no evidence that [Haubrick] was either in a confidential relationship with his grandmother or that he exerted undue influence in her decision to execute the REPSA.' Clerk's Papers (CP) at 186. Substantial evidence supports the trial court's finding that Whitbeck and Haubrick did not share a confidential relationship and that no undue influence was present.
The court also stated in its July 18, 2003 letter ruling:
I find that there was no confidential relationship. . . . [Haubrick] was [Whitbeck's] grandson who helped her occasionally around the house with various projects and yard work. Although she may have had some confidence in him just like most grandmothers have with any grandchild, there is no substantial evidence that he purported to act or advise her with her interest in mind. To the contrary, there was considerable evidence that . . . Whitbeck was very independent and basically decided things on her own. CP at 182.
The stepsons' assertion that the REPSA was a product of undue influence is predicated on their claim that the parties shared a confidential relationship. And their claim of a confidential relationship is based on Haubrick's testimony that his grandmother relied on him and trusted him. But this familial affiliation is insufficient to support a finding of a `legal confidential relationship' of the sort necessary to support a finding of undue influence, and the trial court did not err in finding that no such relationship existed. Attorney Fees (Cross-Appeal)
The stepsons also claim undue influence based on Haubrick's promises to his grandmother to live in the house and take care of her cat. While these considerations may have been important to Whitbeck in deciding to whom to sell her house, without more they do not indicate undue influence.
Haubrick and the PR cross-appeal what they view as the trial court's failure to set their attorney fee award at a more reasonable amount. They assert that remand is necessary because the record is insufficient to determine whether the attorney fee award was reasonable.
RCW 11.96A.150(1) states:
Either the superior court or the court on appeal may, in its discretion, order costs, including reasonable attorneys' fees, to be awarded to any party: (a) From any party to the proceedings; (b) from the assets of the estate or trust involved in the proceedings; or (c) from any nonprobate asset that is the subject of the proceedings. The court may order the costs to be paid in such amount and in such manner as the court determines to be equitable.
Absent a manifest abuse of discretion, we will not interfere with the decision to allow attorney fees in a probate matter. In re Estate of Black, 116 Wn. App. 476, 489, 66 P.3d 670, review denied, 150 Wn.2d 1020 (2003).
Recently, in Jones, 152 Wn.2d 1, our Supreme Court remanded an attorney fees award and ordered the trial court to substantiate its award with appropriate findings of fact and conclusions of law. But in Jones, the parties sought to remove the PR under RCW 11.68.070, and that statute independently allows attorney fees.
Here, the trial court ordered the stepsons to pay $4,437.36 in attorney fees to the PR and $2,500 to Haubrick. Although it erroneously failed to reduce the ruling to writing, in its oral ruling the trial court explained the basis for its fee award:
I see the three daughters . . . just kind of along on this situation without any financial gain possible as a result of litigation and only some allocation of expenses and costs to them, reducing their share [of the estate proceeds]. They weren't in here seeking the property [or] to set aside the sale. They were just witnesses. But I also recognize that . . . in any family situation, sometimes things happen, and I guess what I'm going to do is I want . . . the three daughters, to get at least [$]9,000 net out of [the estate]. I will allocate to [Haubrick] $2,500 towards his attorney's fees and costs.
Whitbeck's estate was approximately $50,000 and was to be split evenly five ways under the terms of the will.
I see this as a situation where I'm convinced my decision [on the merits] is correct, but I don't see it quite as [the attorneys for Haubrick and the PR] do in that it was a meritless or frivolous action. . . . It just is one of those [cases] where it immediately struck me as something I'm going to have to look at closely to see whether [there] was . . . some sort of pressure put on the grandmother or whether . . . she was taken advantage of or anything like that. . . . [B]ut I don't see it as a case where I'm shocked that the [stepsons], not maybe in on all the dealings, decided to bring it to the attention of the Court and pursue it. So I think [Haubrick] . . . comes out with the property that he wanted. He got it at a very reasonable price, and I guess that's how litigation goes, and doesn't always provide for full compensation for attorney's fees. In this particular case I think it's fair under the circumstances. So, he will still be responsible for the balance of his own fees and costs.
So, then whatever is left over after that can go to the two brothers. . . . So, basically the way I have it, it would be about [$]27,000 that would go to the three daughters, and then I think [the PR's attorney] fees, about [$]14,000, if you took [$]2500 out to [Haubrick], that would be about [$43,000], and then the rest would [be] taken out for appropriate estate costs [and] would be probably fairly minimal, and then the leftover amount of maybe seven, eight thousand, would be divided between the [stepsons].
RP (9/17/03) at 19-21.
Under RCW 11.96A.150(1), whether to award attorney fees rests in the trial court's discretion and `[t]he court may order the costs to be paid in such amount and in such manner as the court determines to be equitable.' Here, the court's reasoning is apparent from the oral ruling: the court was awarding only partial fees based on the size of the estate and the trial court's perception that there was a legitimate dispute between the parties. The award was within the trial court's discretion, which it did not abuse.
We are aware, but decline to follow, Division One's opinion in Laue v. Estate of Elder, 106 Wn. App. 699, 713, 25 P.3d 1032 (2001), review denied, 145 Wn.2d 1036 (2002), remanding for entry of findings of fact and conclusions of law as to reasonableness of an otherwise proper award under Mahler v. Szucs, 135 Wn.2d 398, 435, 957 P.2d 632 (1998).
Attorney Fees on Appeal
Finally, under RCW 11.96A.150(1) and RAP 18.1, we award Haubrick and the PR their attorney fees for responding to the stepsons' appeal, but not for their unsuccessful cross-appeal.
We affirm in all respects and award the PR and Haubrick attorney fees on appeal for the costs of responding to the stepsons' claims on appeal, upon their compliance with RAP 18.1.
A majority of the panel having determined that this opinion will not be printed in the Washington Appellate Reports, but will be filed for public record pursuant to RCW 2.06.040, it is so ordered.
MORGAN, J. and VAN DEREN, J., Concur.