February 26, 2008.
Appeal from a judgment of the Superior Court for Grays Harbor County, No. 05-4-00160-1, Michael J. Sullivan, J., entered February 16, 2007.
Affirmed in part, reversed in part, and remanded by unpublished opinion per Bridgewater, J., concurred in by Hunt and Penoyar, JJ.
Randel J. Peterman appeals the Grays Harbor County Superior Court's judgment in favor of the Peterman Family Revocable Living Trust. We affirm in part, remand only to determine with specificity one award of attorney fees at the trial level, and award attorney fees on appeal to Shirley R. Ellis.
Randel J. Peterman and his sister, Shirley R. Ellis, are the children of Roger A. Peterman (Roger) and Joyce Peterman (Joyce). On March 30, 1992, Roger and Joyce executed a trust agreement entitled The Peterman Family Revocable Living Trust (Trust). The trust agreement designated Roger and Joyce as trustees of their own trust while both lived, and it appointed the survivor as primary beneficiary upon the first of their respective deaths. On the death of the first spouse, the trust agreement created two sub-accounts: (1) a survivor's trust, consisting of the survivor's interest in both the community property and separate property; and (2) a credit trust, consisting of all of the decedent's interest in community and separate property.
For clarification, we refer to Mr. and Mrs. Peterman as Roger and Joyce. We mean no disrespect.
Roger died on June 30, 1999. Thereafter, the credit trust consisted of (1) a contract for commercial property that Roger sold to Thorn Ward worth $325,000; (2) a contract for the sale of a real estate business to Thorn Ward valued at $43,317; (3) a contract for the sale of the River Road house valued at $180,000; (4) a 50 percent interest in the East Curtis property valued at $28,700; (5) property located at North Perry Street valued at $62,600; and (6) 41.5 percent of the Allen Knight contract for the sale of real property located in Hoquiam valued at $25,000, and providing a value of $10,375 to the trust. The value totaled approximately $650,000 for tax purposes. The value of the survivor's trust also equaled approximately $650,000.
On May 5, 2000, Joyce executed a Trust Modification Agreement, appointing Peterman as trustee for Joyce's lifetime and providing that upon her death, Peterman and Ellis would serve as co-successor trustees. In August 2000, Peterman and Joyce moved from Aberdeen, Washington, to Sparks, Nevada, and purchased a home located on Jamon Drive (Jamon home), using proceeds from the sale of the River Road house and from Thorn Ward's payoff of the real estate business.
Joyce's physical and mental faculties and capabilities declined significantly in 2001. Peterman cared for her from May 5, 2000, until her death in March 2005. Shortly after Joyce appointed Peterman as trustee, Peterman opened a checking account at Wells Fargo Bank in the names of both Joyce Peterman and Randel J. Peterman, individually, without designating the Trust as owner of the funds. Peterman then commingled an undetermined amount of his personal funds with Trust funds.
On February 14, 2002, Peterman used Trust funds to pay $109,500 cash for a vacant lot in Wingfield Hills in Sparks. The Trust held the title to the lot. In September 2003, Peterman obtained a building permit to construct a house on the lot and he began construction in the spring of 2004. In order to build on the lot, Peterman obtained a $200,000 line of credit, using the Jamon home as collateral. On March 14, 2005, Peterman sold the Jamon home and paid off the line of credit. The bank from which Peterman obtained the line of credit issued him a check for the net proceeds of the transaction, $204,053.45.
From May 5, 2000, until June 20, 2006, Peterman maintained exclusive control of all Trust assets. Ellis did not make any decisions regarding the disposition, use, or control of the Trust assets. Peterman did not prepare or file an accounting of the Trust assets during this time.
On August 3, 2005, Ellis filed a petition for judicial proceedings, requesting that the trial court require Peterman to provide an accounting of the Trust assets. Ellis subsequently discovered what she believed to be Peterman's misappropriation of funds and failure to maintain records of Trust assets.
On March 3, 2006, Ellis filed and was granted a temporary restraining order prohibiting Peterman from exercising control over the Trust assets and requiring Peterman to show cause why he should not be removed as trustee. On June 7, 2006, Ellis filed an amended petition for judicial proceedings, alleging that Peterman failed to provide an accounting, failed to prepare or file an annual statement, commingled his funds with Trust funds, was unable to account for cash expenditures, withdrew over $64,000 in cash from automated teller machines (ATMs) located at various casinos in Reno and Sparks, issued and negotiated checks made payable to "cash" from trust funds totaling over $160,000 between 2003 and 2005, and withdrew $100,000 from the Trust savings account between March 2004 and April 2005. CP at 87. Ellis also alleged that Peterman was unable to provide adequate records for the construction of the new home he built in Sparks, which was still not complete after two and a half years of construction.
At his March 8, 2006 deposition, Peterman acknowledged that he commingled Trust and personal funds; that he did not have records of his cash expenditures; and that he kept much of the Trust fund money in a joint checking account with Joyce, as joint owners. On June 20, 2006, the trial court removed Peterman as trustee and appointed Ellis as sole trustee. Ellis, her son, and her husband subsequently moved to Sparks to complete the construction of the Wingfield Hills house.
The trial court scheduled a bench trial for January 24, 2007. After filing an answer and affirmative defenses to the petition for judicial proceedings, Peterman's counsel filed a notice of intent to withdraw on December 12, 2006. Peterman chose to argue his case pro se.
A bench trial commenced on January 24, 2007, before a visiting judge. The trial court found that Peterman committed multiple breaches of his fiduciary duties to the trust, resulting in the following damages to the Trust: (1) $358,249.34 for Trust funds that Peterman spent for his own personal use; (2) $48,120.25 for sums unreasonably spent on construction of the Wingfield Hills home; and (3) $5,056.71 for contract payments withheld from Ellis. The trial court concluded that the damages to the Trust were liquidated in nature and awarded to the Trust prejudgment interest in the sum of $121,312.38. The trial court awarded attorney fees from the Trust for fees incurred both by Ellis and by Peterman himself in the sums of $54,680.01 and $10,315.21, respectively.
ANALYSIS I. Appearance of Fairness
Peterman claims that the trial court committed reversible error by failing to conduct the trial with an "appearance of fairness." Br. of Appellant at 18. "To prevail under the appearance of fairness doctrine, the claimant must provide some evidence of the judge's . . . actual or potential bias." State v. Dugan, 96 Wn. App. 346, 354, 979 P.2d 885 (1999). We do not presume prejudice. State v. Dominguez, 81 Wn. App. 325, 328-30, 914 P.2d 141 (1996). After the claiming party presents sufficient evidence of potential bias, we consider whether the trial court violated the appearance of fairness doctrine. Dominguez, 81 Wn. App. at 329, 330. "The test is whether a reasonably prudent and disinterested observer would conclude [that the claimant] obtained a fair, impartial, and neutral trial." Dominguez, 81 Wn. App. at 330. We consider allegedly improper or biased comments in context. See Wells v. Whatcom County Water Dist. No. 10, 105 Wn. App. 143, 158, 19 P.3d 453 (2001); In re Dependency of O.J., 88 Wn. App. 690, 697, 947 P.2d 252 (1997), review denied, 135 Wn.2d 1002 (1998).
Peterman contends that several factors contributed to the trial court's violation of the appearance of fairness doctrine. He argues that the trial court denied his due process rights by allowing Ellis's counsel to prejudge the admissibility of Peterman's proffered evidence. Specifically, he alleges that the trial court allowed Ellis's counsel to "prejudge the admissibility of proffered evidence in the hallway, outside of the courtroom and outside of the record." Br. of Appellant at 18. Although he does not elaborate, Peterman directs us to the report of proceedings (Volume 1) at 132-41, to support this contention. Review of the record does not support his contention.
Peterman brought a stack of documents divided into colored folders to present to the trial court as evidence. The trial court allowed Peterman to have the documents marked by the clerk. Ellis's counsel then stated that he had seen the documents and planned to object to several as hearsay. Ellis's counsel did not object to copies of checks, bank statements, and a copy of the trust itself. However, Ellis's counsel objected to several of Peterman's typewritten pages as an attempt to testify by writing but acknowledged that Peterman could use the documents during his testimony to help him out if he wished. Ellis's counsel also objected to letters between an accountant and Peterman's former attorney and a letter signed by a Larry Pirddy. The trial court asked Peterman to respond to the hearsay objections and whether he had arranged for those parties to appear in court to testify. Peterman responded that he had not and stated, "Um, basically just information that was from people from California and Nevada." 1 RP at 136-37. The trial court admitted Peterman's non-objectionable evidence. We hold that Peterman failed to establish evidence of any bias or potential bias by the trial court.
The record does not provide any additional information about Larry Pirddy.
He also contends that the trial court allowed Ellis to base her case "entirely on inadmissible hearsay evidence and `expert' testimony from a lay witness." Br. of Appellant at 19. Peterman does not provide any citation to the record for this argument and does not allege what evidence we should review. "Contentions unsupported by argument or citation of authority will not be considered on appeal." Camer v. Seattle Post-Intelligencer, 45 Wn. App. 29, 36, 723 P.2d 1195 (1986) (citing RAP 10.3(a)(5)), review denied, 107 Wn.2d 1020, cert. denied, 482 U.S. 916 (1987). Thus, we do not consider this argument.
Finally, Peterman alleges that the trial court erred by granting Ellis's requested remedies and entered findings of fact and conclusions of law as proposed by Ellis without discussion. Again, Peterman cites no authority to support his argument, but even if we consider this claim, the record does not support it.
The trial court discussed the findings of fact and conclusions of law with Peterman. First, the trial court allowed Peterman time to review the findings and conclusions with Ellis's attorney, to write down any concerns, and to inform the trial court of any objections. After reviewing the proposed findings and conclusions, both Ellis's counsel and Peterman informed the court of a typographical error on Peterman objected to finding of fact 7, but when the trial court asked what his objection was, he responded that the trial court did not allow him to present his evidence. Peterman also objected to finding of fact 21 and 37 because the trial court did not allow him to present his evidence. The trial court then clarified:
I find that every one of these facts conform completely a hundred percent with what I either directly ruled or what the intent of the ruling was. I believe I specifically said I wasn't limiting counsel to just specifically those Findings of Fact I had and I think there's a few other ones here that were added but that's just fine, I agree with them. I agree with the Conclusions of Law and — one through 13.
RP (Feb. 9, 2007) at 17. Clearly, the trial court did not enter the findings and conclusions without discussion. We hold that the trial court did not violate the appearance of fairness doctrine.
II. Denial of Motion for Continuance
Peterman contends that the trial court abused its discretion by denying his request for a continuance during trial when the trial court excluded much of his documentary evidence. He also contends that the trial court abused its discretion by failing to grant his request to continue the hearing on the presentation of the judgment and order and findings of fact and conclusions of law. These arguments lack merit.
We review the trial court's denial of a motion for a continuance for abuse of discretion. Port of Seattle v. Equitable Capital Group, Inc., 127 Wn.2d 202, 213, 898 P.2d 275 (1995). A trial court abuses its discretion if it is exercised on untenable grounds or for untenable reasons. State ex rel. Carroll v. Junker, 79 Wn.2d 12, 26, 482 P.2d 775 (1971). Trial courts may properly consider the necessity of reasonably prompt disposition of the litigation, the needs of the moving party, the possible prejudice to the adverse party, the prior history of the litigation, and any other matters that have a material bearing on the exercise of the discretion vested in the court. Balandzich v. Demeroto, 10 Wn. App. 718, 720, 519 P.2d 994, review denied, 84 Wn.2d 1001 (1974). A. Continuance During Trial
Peterman argues that the trial court erred by failing to consider any of the Balandzich factors when it denied his request for a continuance after the trial court excluded some of his documentary evidence. He asserts that if the trial court would have considered any of these factors, it "would have discovered a veritable `perfect storm' in favor of the granting of a continuance." Br. of Appellant at 21. This alleged "perfect storm" includes: (1) withdrawal of Peterman's counsel approximately four weeks before trial, leaving him to "fend for himself pro se", Br. of Appellant at 21; (2) evidence that Peterman was unable to hear; and (3) Peterman being completely blindsided by Ellis's objections to his hearsay evidence and the trial court excluding it without a motion in limine or court order.
To the extent that Peterman complains about having to "fend for himself" and that he was "completely blindsided," his argument fails. Br. of Appellant at 21, 22. Pro se litigants are bound to the same rules of procedure and substantive law as attorneys. Holder v. City of Vancouver, 136 Wn. App. 104, 106, 147 P.3d 641 (2006), review denied, 2008 Wash. LEXIS 30 (Jan. 9, 2008). Further, Peterman did not obtain counsel during the month before trial, did not request a continuance when his counsel withdrew, did not request a continuance when the trial started, and did not request a continuance before Ellis finished her case in chief. Rather, Peterman chose to request a continuance only after the trial court informed him that some of his documentary evidence regarding the alleged value of the Wingfield Hills house was inadmissible.
Peterman next argues that he could not hear at trial and was clearly incapable of representing himself. Specifically, he directs us to two instances during trial. Peterman first cites to his statement, "I have got a real hard time hearing." 1 RP at 158. He also cites to report of proceedings at 165-66, where he interrupted Ellis's counsel's objection while apparently reviewing paperwork.
Although Peterman does not address it, the trial court had an additional interaction with him about his hearing. While sorting through his documentary evidence, the trial court asked Peterman to hand it some documents by way of the clerk. When Peterman apparently attempted to walk behind the bench, the trial court stated, "I don't want you to come through that way." 1 RP at 141. Peterman replied, "I can't hear. That's one thing I found out is I can't hear." 1 RP at 142. The trial court responded, "I will try to — is the hearing device that's supposed to help you; is it helping?" 1 RP at 142. Peterman responded, "Yes." 1 RP at 142.
[Ellis's Counsel]: Your Honor, I have an objection. I am going to object to any documents that [Peterman] claims are receipts, bids, estimates or in any way support the cost of construction of the home that are not part of the documents produced in response to our request for production. . . .
[Peterman]: These I didn't have.
The Court: Let [Ellis's counsel] finish his objection.
[Ellis's Counsel]: It's not a timely product since we haven't had a chance to review any such items.
The Court: Did you hear what he said?
The Court: What I want you to do is please turn around and face [Ellis's counsel], and then [counsel], would you please restate, just please look at the witness.
1 RP at 165-66. This interaction alone fails to establish that Peterman could not hear and, in fact, shows that the trial court took extra precaution to ensure that Peterman could understand the proceedings. As such, we hold that the trial court did not abuse its discretion when it denied Peterman's request for a continuance.
B. Continuance at Presentment Hearing
Peterman next contends that the trial court abused its discretion by denying his request for a continuance for the hearing on the presentation of the judgment and order, findings of fact, and conclusions of law. Specifically, he contends that (1) Ellis failed to serve him with notice of the hearing as CR 52(c) required at least five days before the presentation hearing; (2) several of the written findings were not included in the trial court's oral ruling; and (3) the trial court did not allow him the opportunity to seek advice from a legal counselor. Br. of Appellant at 24.
1. CR 52(c)
CR 52(c) provides:
Unless an emergency is shown to exist, or a party has failed to appear at a hearing or trial, the court shall not sign findings of fact or conclusions of law until the defeated party or parties have received 5 days' notice of the time and place of the submission, and have been served with copies of the proposed findings and conclusions.
Under Tacoma Recycling, Inc. v. Capitol Material Handling Company, 34 Wn. App. 392, 396, 661 P.2d 609 (1983), failure to give five days' notice of the content of the proposed findings and conclusions under CR 52(c) constitutes error and requires that the findings of fact, conclusions of law, and judgment be vacated. But "[a]s a general rule, an appellate court will consider only those issues properly presented to the trial court" and "[f]ailure to afford the trial court the opportunity to rule on asserted error will usually constitute waiver of the right to assert that error on appeal. Seidler v. Hansen, 14 Wn. App. 915, 918, 547 P.2d 917 (1976).
Ellis's counsel informed the trial court of the notice error, but he did not address CR 52(c) directly. At the end of the bench trial, the visiting judge asked where the parties would like to hold the presentment hearing — in either Pacific County or Grays Harbor County. Ellis's counsel indicated that he would mail a copy of the proposed findings and conclusions to Peterman at his Ocean Shores address. At the presentment hearing when Peterman stated that he had not seen any proposed findings or conclusions, Ellis's counsel disclosed the following:
Initially everything was mailed to [Peterman] by regular mail and then my secretary informed me a few days later that the initial Notice of Hearing stated that the hearing was going to be held at the Pacific County Courthouse in Montesano, Washington. So we did an Amended Notice of Hearing and I sent the Amended Notice of Hearing only by certified mail. So that certified mailing receipt you have is not proof that [Peterman] received the proposed Findings and Judgment because that would have gone with the first notice that was mailed. The only thing I sent to him by certified mail was the Amended Notice of Hearing so that I could be sure that he knew we were going to be here and not in Montesano.
RP (Feb. 9, 2007) at 4. The trial court then recessed so that Ellis's counsel could review the proposals with Peterman. The trial court then allowed Peterman to present objections or recommendations.
At this point, Peterman asked for a continuance, but not based on the claim of lack of notice. Instead, he asked for a continuance:
[B]ased on the fact is is [sic] that during the same time that these people here are saying that I shorted them on their interest income for a couple hundred bucks or a thousand dollars or whatever it is, in this last 10 months they have never given me a dime. I have dealt with not having any income to go ahead and hire an attorney. The attorney that I had withheld my records for over four months which didn't give me any time to present a case and I would just like a continuance.
RP (Feb. 9, 2007) at 10-11. The trial court denied his request stating, "[Y]our motion for a continuance is just not timely." RP (Feb. 9, 2007) at 12.
The trial's over. If you wish to file — or hire an attorney and file some other motions post trial, that's certainly your right but I — it's on the record what you said but it's just not properly before the Court.
Even if we were to address the merits of Peterman's claim, he would fail to show prejudice because he reviewed the proposed findings and had the opportunity to ask questions during the trial. In addition, he is able to challenge the findings of facts and conclusions of law at this court while represented by counsel on appeal. Where the adverse party does not suffer prejudice, such as when the party was already aware of what the contents of the findings of fact and conclusions of law would be, remand is not required. Marina Cove Condo. Owners Ass'n v. Isabella Estates, 109 Wn. App. 230, 234-235, 34 P.3d 870 (2001).
Peterman next contends that the trial court abused its discretion by failing to grant him a continuance because the oral ruling did not match the written findings or conclusions. This argument fails for two reasons. First, "[a] trial court's oral opinion is only an indication of the court's views or thinking, and does not become final until or unless it is incorporated in written findings or conclusions of law." Johnson v. Whitman, 1 Wn. App. 540, 541, 463 P.2d 207 (1969). Parties cannot use statements contained in the trial court's oral decision to impeach the written findings, and the oral statements do not constitute proper grounds for assignments of error. Sweeten v. Kauzlarich, 38 Wn. App. 163, 169, 684 P.2d 789 (1984). Even if Peterman could attack the differences, his argument still fails because the trial court expressly found that the findings and conclusions were accurate.
Finally, Peterman contends that the trial court erred in denying his request for a continuance because it kept him from having the opportunity to seek the advice of legal counsel before the trial court entered its judgment and order, and findings of fact and conclusions of law. But, Peterman did not request the continuance to obtain counsel, but rather to request the opportunity to present additional evidence. We hold that the trial court did not abuse its discretion by failing to grant a continuance.
III. Exclusion of Documents
Peterman next argues that the trial court erred by excluding his documents as improper hearsay evidence. We review evidentiary rulings under the abuse of discretion standard. Havens v. CD Plastics, Inc., 124 Wn.2d 158, 168, 876 P.2d 435 (1994). A trial court abuses its discretion if it is exercised on untenable grounds or for untenable reasons. Carroll, 79 Wn.2d at 26.
Peterman contends the trial court summarily excluded from evidence the majority of his documents. The only argument that Peterman presents, however, is that "[i]t appears from the record that the Court did not review the documents and the documents were excluded based upon representations from [Ellis's] counsel that the documents were `objectionable as hearsay.'" Br. of Appellant at 25. In particular, Peterman contends that the trial court "then summarily excluded `those documents' as hearsay." Br. of Appellant at 25.
Peterman makes no reference to which documents the trial court erred by excluding. A party's failure to assign error or to provide argument and citation of authority in support of an assignment of error precludes appellate consideration of the alleged error. Camer, 45 Wn. App. 36. Thus, we do not address this claim.
Even if we addressed his claim, by his own admission, Peterman confirmed that he was attempting to introduce letters from third parties and between third parties. Peterman was unable to inform the trial court why it should admit his hearsay documents. And he does not include them in the record in any fashion for our review. We hold that the trial court did not abuse its discretion by excluding Peterman's hearsay evidence.
IV. Admission or Consideration of Videotaped Deposition
Peterman contends that the trial court abused its discretion by admitting or considering the videotaped deposition of Robert Martin. We review evidentiary rulings under the abuse of discretion standard. Havens, 124 Wn.2d at 168. A trial court abuses its discretion if it exercises it on untenable grounds or for untenable reasons. Carroll, 79 Wn.2d at 26.
Peterman argues that he did not receive proper notice of the deposition as CR 32(a)(5)(A) requires. CR 32(a)(5)(A) provides that the deposition testimony of an out-of-state expert witness may be used if reasonable notice before the trial date is provided to all parties and the party against whom the deposition is intended to be used is given a reasonable opportunity to depose the expert again. Peterman alleges that the record provides no notice of whether he had notice of or attended the deposition.
CR 32(b) provides that objection to a deposition's admissibility may be made at the trial or hearing for any reason that would require exclusion of the evidence if the witness were then present and testifying. Here, Peterman did not object to the admissibility of the deposition testimony. Under RAP 2.5(a), we may refuse to review any claim of error raised for the first time on appeal. We refuse to consider this argument.
Peterman next contends that the trial court never admitted Martin's deposition testimony as part of the trial record. But the trial court opened and added the deposition transcript to the record on January 25, 2007. As such, this argument fails.
V. Testimony Concerning Property Value
Peterman argues that the trial court abused its discretion by failing to allow him to testify concerning the value of the Wingfield Hills home. A trial court abuses its discretion if it exercises it on untenable grounds or for untenable reasons. Carroll, 79 Wn.2d at 26.
Specifically, Peterman contends that, under Weber v. West Seattle Land Improvement Company, 188 Wash. 512, 516, 63 P.2d 418 (1936), an owner of property may testify as to its value because the owner is familiar enough with the property to know its worth and knows of the uses for which the property is particularly adaptable. He contends that, as Trustee, he was in essence the owner and, as such, it was an abuse of discretion to preclude his testimony.
During his direct testimony, Peterman stated, "And then I have my estimate of what I figure that Wingfield is worth, that's about $900,000." 1 RP at 146. Ellis objected on the basis of lack of foundation and the trial court sustained the objection, but acknowledged that if Peterman could lay a foundation, it may consider it. Peterman also attempted to introduce an insurance appraisal, but he did not have the documentation because it was "all down South." 1 RP at 147. The trial court again declined to admit the hearsay evidence.
Peterman's argument is that the Weber decision should trump the hearsay rules. In Weber, our Supreme Court held, "It is settled law in this state that the owner of property may testify as to its value upon the assumption or presumption that he is so far familiar with the property and its uses as to know its worth." Weber, 188 Wash. at 516. But "[a]lthough landowners have the right to testify concerning the fair market value of their property, this right is not absolute." Port of Seattle, 127 Wn.2d at 211. The Port of Seattle court held that when a party provides no method, reasoning, or explanation for a property's valuation, it is not error for the trial court to exclude the valuation. Port of Seattle, 127 Wn.2d at 213.
Here, Peterman was unable to lay a foundation for the value of the Wingfield Hills home, or to provide any method, reasoning, or explanation for the valuation of the property. In addition, on June 20, 2006, the trial court removed Peterman from his position as trustee several months before trial when the Wingfield Hills home was not yet completed. CP at 122. Accordingly, Peterman's claim to testify as the owner or quasi-owner of the Wingfield Hills home must fail. Relying on Port of Seattle, we hold that it was not error to exclude Peterman's testimony concerning the value of the home. Port of Seattle, 127 Wn.2d at 213.
VI. Deposition Testimony
Peterman next argues that the trial court abused its discretion by admitting or considering his deposition testimony, as well as that of his son, Phil. A trial court abuses its discretion if it is exercised on untenable grounds or for untenable reasons. Carroll, 79 Wn.2d at 26.
Peterman argues for the first time on appeal that the trial court never admitted Phil's deposition testimony to the record. He also contends that he never received notice of or attended Phil's deposition and, as argued above, the deposition should be excluded under CR 32. CR 32(b) provides that objection to admissibility may be made at the trial or hearing to receive evidence for any reason that would require exclusion of the evidence if the witness was then present and testifying. Here, Peterman did not object to the admissibility of Phil's deposition testimony. Under RAP 2.5(a), we may refuse to review any claim of error raised for the first time on appeal. We do not consider this argument.
Peterman next argues that the trial court abused its discretion by publishing his own deposition and admitting several attached exhibits, but never admitting the deposition. He is incorrect. The trial court published Peterman's deposition as part of the record and then admitted his deposition, so his argument is moot.
VII. Substantial Evidence for Findings of Fact
Peterman next contends that the record does not contain substantial evidence to support findings of fact 9, 11, 14, 15, 16, 17, 18, 19, 26, 27, 28, 30, 31, 32, 35, 37, 38, 39, 40, 42, 43, and 45. Substantial evidence is evidence sufficient to persuade a fair-minded rational person of the truth of the declared premise. Bering v. Share, 106 Wn.2d 212, 220, 721 P.2d 918 (1986), cert. dismissed, 479 U.S. 1050 (1987); see also In re Estate of Jones, 152 Wn.2d 1, 9, 93 P.3d 147 (2004) (stating that an appellate court will uphold challenged findings of fact and treat the findings as verities on appeal if substantial evidence supports the findings).
Although Peterman includes findings of fact 15 and 21 in his list of problematic findings, he fails to include either finding in his discussion, argument, or analysis. As such, these findings are verities on appeal. Morin v. Harrell, 161 Wn.2d 226, 230, 164 P.3d 495 (2007).
1. Finding of Fact 9
Finding of fact 9 provides, "The assets of the trust are identified on the document admitted as Exhibit 8 in the trial of this matter." CP at 453. Substantial evidence supports this finding. Ellis's counsel asked her about exhibit 8, the Peterman Estate inventory dated June 20, 1999. "Does Petitioner's Exhibit 8 accurately identify the assets that were part of the estate of your father, particularly the revokable [sic] living trust at the time of his death?" 1 RP at 21. She replied, "To the best of my knowledge, it does." 1 RP at 21. The trial court then admitted the exhibit without objection.
2. Findings of Fact 11, 14, 16, 17, 18, 19, 30, 31, 32, 35, 37, 38, 39, 40, 42, 43, and 45
Peterman challenges 17 of the findings of fact where the trial court found that he improperly expended and failed to account for Trust funds. Specifically, he contends that the trial court made these findings based "in large part on the unsubstantiated testimony of James Ellis, much of which was hearsay." Br. of Appellant at 32. Further, he contends that Ellis failed to provide sufficient bank records, cancelled checks, or deposit slips and instead, provided only the spreadsheets that James Ellis (James) created. Substantial evidence supports these findings.
Ellis correctly notes that James testified regarding his education as an accountant and that he subsequently served as an accountant for 30 years. She contends that exhibits 1 through 7 and 18 through 21 support these challenged findings of fact.
James testified that he reviewed the Wells Fargo bank records obtained during discovery, for several accounts, including the joint account belonging to Joyce and Peterman. Exhibits 1 through 6 contain spreadsheets summarizing the bank statements for the years 2000 through 2006, for the joint checking account, and exhibit 7 contains a summary of a market rate savings account. Exhibit 18 contains all of the receipts that Peterman provided for Ellis's request for production. Peterman provided total valid receipts of $70,491.85, for construction of the Wingfield Hills home. Exhibit 19 is a spreadsheet containing a summary of the Trust income, including monthly income from the Thorn Ward real estate contract and the Ellis contract, both broken into principal amount, interest, and total. The spreadsheet also contains a summary of the share of interest income that Ellis should have received each month and the amount that Peterman actually paid to her. Exhibit 20 is a breakdown of all the expenditures on the Wingfield Hills home. Finally, exhibit 21 is a summary of exhibits 1 through 7, including cash withdrawals, auto expenditures, golf expenses, and other non-Trust related expenses.
Finding of fact 11 provides, "The primary source of funds in the Wells Fargo checking account consisted of trust money." CP at 453. Ellis and James testified that the joint checking account was the primary account used for funds in the Trust. Further, Peterman himself testified that he placed Trust money into the checking account on multiple occasions.
Finding of fact 14 provides, "[Peterman] maintained almost no records regarding the assets of the trust, the disposition of trust assets, the use of trust assets or the expenditure of trust funds, which could have assisted in the preparation of an accounting." CP at 454. Peterman testified at his deposition that he did not know how much money he had spent on the construction of the Wingfield Hills home. Further, he stated that he never kept a ledger or journal for his expenditures. He testified that rather than keep track of the expenses, his goal was to ensure that the house, either the Jamon home or the Wingfield Hills home, continued to receive high appraisals. Peterman claimed that he kept all his receipts in a drawer at his house, but he provided only the receipts found in exhibit 18. Without keeping any records, Peterman made ATM withdrawals from the joint checking account at casinos, allegedly to give his construction crew cash for lodging and meals and for him to gamble. Finally, Peterman kept no records of at least 34 checks made payable to "Cash" from the joint checking account in amounts ranging from $500 to $9,500, allegedly used for construction costs.
Finding of fact 16 provides, "[Peterman] cannot account for his expenditure of these sums of cash." CP at 454. Peterman acknowledged that he could not account for these expenditures. In fact, he stated that he did not feel that it was necessary because he was not an accountant.
Finding of fact 17 provides, "After crediting [Peterman] with using a reasonable sum of the cash for construction of a house owned by the trust, he converted $217,400.65 in cash belonging to the trust to his personal use and benefit." CP at 454. The trial court admitted the Wells Fargo bank statements for the years 2000 to 2006, as part of exhibit 22, at Peterman's Page 21 request. Exhibit 21, properly admitted without objection, contains a summary of cash withdrawals between 2000 and 2006, totaling $217,400.65.
Finding of fact 18 provides, "[Peterman] has no receipts or other documentation to support his use of the cash in the sum set forth in the preceding finding for legitimate trust purposes." CP at 454. Peterman provided no receipts to support his use of the cash. The only receipts he provided in this case are found in exhibit 18.
Finding of fact 19 provides, "[Joyce] lost the majority of her physical and mental faculties and capacities in 2001." CP at 454. It appears that she had an initial stroke in 2000, which resulted in her loss of speech. Within a year, she had another stroke and a heart attack. It was at this point that Peterman testified that he "noticed that she started losing her mental capacity" and that she was only able to walk when he was with her. CP at 264.
Finding of fact 30 provides, "The Wingfield Hills lot was purchased with trust funds. Between February, 2002 and March, 2006, [Peterman] paid dues to play golf at a golf club adjacent to Wingfield Hills known as Red Hawk Country Club." CP at 455. Peterman acknowledged that he purchased the lot with Trust funds, specifically from the real estate contract that Thorn Ward paid off and the contract that the Bogdanoviches paid off. Peterman also testified that he paid approximately $255 per month for golf course fees.
Finding of fact 31 provides, "[Peterman] used trust funds to pay the golfing dues." CP at 455. Again, Peterman testified that he paid $255 per month for golf course fees. And Peterman acknowledged that he commingled his personal money with Trust money in the joint checking account.
Finding of fact 32 provides, "[Peterman] has made no showing that the Red Hawk Golf dues increased the value of the Wingfield Hills lot owned by the trust." CP at 455. There is no evidence in the record that would indicate the golf membership increased the value of the lot.
Finding of fact 35 provides, "[Ellis], with the assistance of her husband and adult son, has substantially completed construction of the house on the Wingfield Hills lot owned by the trust. The house had been under construction, but never completed, during the tenure of [Peterman] as trustee." CP at 455. Ellis testified that she moved, along with James and her son, to Sparks to complete construction of the home in 2006. She provided photographs, exhibit 12, showing that none of the landscaping was complete and stated that although much of the inside was finished, some repair work was required including finishing the texturing and painting of the sheetrock in the garage.
Finding of fact 37 provides, "[Peterman] failed to maintain any adequate records, invoices, bills or other documentation regarding the construction of the house at Wingfield Hills, which would allow this court to accurately determine the reasonable cost of such construction." CP at 456. Peterman submitted only those receipts found in exhibit 18. He was unable to provide invoices, bids, or any accounting of his cash expenditures other than to say repeatedly that the money must have been used for the house. Even so, Ellis chose to allocate the larger withdrawals of $9,000 and $9,500 toward construction of the Wingfield Hills home.
Finding of fact 38 provides, "The court finds the testimony of [Robert Martin] to be credible regarding the cost of construction and finds that the sum of $135.00 per square foot is a reasonable cost for constructing the home which now exists on the Wingfield Hills lot owned by the trust." CP at 456. We do not review credibility determinations on appeal. In re Marriage of Rideout, 150 Wn.2d 337, 352, 77 P.3d 1174 (2003).
Finding of fact 39 provides, "The court finds that the Wingfield Hills house has 3,052 square feet, which at a cost of $135.00 per square foot should have resulted in a completed house for a cost of $412,020." CP at 456. James testified that the square footage of the living area of the Wingfield Hills home was 3,052 square feet. The mathematical calculation is correct.
Finding of fact 40 provides, "The actual cost of constructing the Wingfield Hills house was $460,140.25, resulting in an excess expenditure in the amount of $48,120.25. The excess expense in construction of the home is a direct result of the failure of [Peterman] to act reasonably in the hiring and supervision of contractors and subcontractors to perform the construction work upon the house." CP at 456. The spreadsheets that James provided indicate that the actual cost of the house was $469,947.94 (Total home cost of $570,568.75 less the lot value of $110,428.50), rather than $460,140.25. But any discrepancy here would work to the detriment of Peterman, and Ellis has not challenged this finding. Thus, there is sufficient evidence to uphold the finding.
Finding of fact 42 provides, "[Peterman] received the required real estate contract payments, but, failed to make proper distributions to [Ellis] for her share of such payments." CP at 456. Exhibit 19 provides the amounts of Trust income received in 2005 and 2006, in addition to the amounts paid out to Ellis.
Finding of fact 43 provides, "Between April, 2005 and February, 2006, [Ellis] failed to receive the sum of $5,056.71 as a result of improper deductions and setoffs to the amounts due her by [Peterman]." CP at 456. Again, exhibit 19 provides that Peterman failed to distribute $5,056.71 to Ellis.
Finding of fact 45 provides, "[Peterman] admitted a document at trial as Exhibit No. 23, which purported to account for expenditure [sic] of cash withdrawn from the trust funds and to account for other expenditures from the trust funds. Exhibit 23 is not reliable, there exists no documentation to support the figures set forth in Exhibit 23 and the court finds that the testimony of [Peterman] regarding Exhibit 23 is not credible." CP at 456. Exhibit 23 contains a typed summary of Peterman's alleged expenses, without any documentation to support the numbers. Again, we do not review credibility determinations on appeal. Rideout, 150 Wn.2d at 352.
3. Findings of Fact 26, 27, and 28
Peterman contends that the record lacks substantial evidence to support findings of fact 26, 27, and 28. He argues that these findings are supported only by the deposition testimony of his son, Phil, which was inadmissible and not admitted during trial. But as discussed above, Peterman failed to object to the admissibility of Phil's deposition testimony and under RAP 2.5(a), we refuse to review his claim. Because Peterman acknowledges that Phil's deposition testimony supports these findings, his argument fails.
VIII. Conclusions of Law
Peterman contends that the findings of fact do not support the conclusions of law 2, 3, 4, 6, 7, 8, 9, 10, and 11. Br. of Appellant at 37. We review the trial court's conclusions of law de novo. State v. Mendez, 137 Wn.2d 208, 214, 970 P.2d 722 (1999), overruled in part by Brendlin v. California, ___ U.S. ___, 127 S. Ct. 2400, 2408, 168 L. Ed. 2d 132 (2007).
"[A] trustee is a fiduciary who owes the highest degree of good faith, diligence and undivided loyalty to the beneficiaries." In re Estate of Ehlers, 80 Wn. App. 751, 757, 911 P.2d 1017 (1996) (citing Estate of Jordan v. Hartford Accident Indem. Co., 120 Wn.2d 490, 502, 844 P.2d 403 (1993)). These duties include the responsibility to fully inform the beneficiaries of all facts that would aid them in protecting their interests. Esmieu v. Schrag, 88 Wn.2d 490, 498, 563 P.2d 203 (1977); accord Allard v. Pac. Nat'l Bank, 99 Wn.2d 394, 404, 663 P.2d 104 (1983) (if beneficiaries are to hold trustee to proper standards of care and honesty, they must know what the trust property consists of and how it is being managed); In re Marriage of Petrie, 105 Wn. App. 268, 275, 19 P.3d 443 (2001). Conclusion of law 2 provides, "The actions of [Peterman] in dealing with contractors to construct a house for cash without adequate receipts or invoices constitutes a breach of his fiduciary duty." CP at 457. Unchallenged finding of fact 36 is a verity on appeal and provides,
Morin, 161 Wn.2d at 230.
During the time that [Peterman] was responsible for construction of the home on the Wingfield Hills lot, he failed to hire or retain the services of any contractors or subcontractors licensed to perform construction work in the state of Nevada. The unlicensed contractors and subcontractors were paid in cash for their services.
CP at 455. Further, challenged finding of fact 37 supports conclusion of law 2 because Peterman failed to maintain any adequate records, invoices, bills, or other documentation regarding the construction of the house at Wingfield Hills. As such, we are unable to accurately determine the reasonable cost of such construction. He submitted only those receipts found in exhibit 18, and he was unable to provide invoices, bids, or any accounting of his cash expenditures other than to say repeatedly that the money must have been used for the house. Peterman's actions clearly lacked diligence and an undivided loyalty to the Trust beneficiaries.
Conclusion of law 3 provides, "The payment of golf dues by [Peterman] from trust funds constitutes an abuse of trust funds and a breach of fiduciary duty." CP at 457. Findings of fact 30, 31, and 32 support this conclusion of law. Peterman testified that he paid approximately $255 per month for golf course fees, but he provided no evidence that the golf membership increased the value of the lot. It appears that a property owner can join Red Hawk Golf Club as a member for $15,000 when the home is constructed instead of the $30,000 fee later imposed for subsequent purchasers, but Peterman did not pay $15,000 for this benefit to the property.
Conclusion of law 4 provides, "The withdrawal and expenditure of large sums of cash by [Peterman] from the trust, without adequate documentation or record keeping, constitutes a breach of fiduciary duty." CP at 457. Two challenged findings of fact, numbers 16 and 18, along with two unchallenged findings of fact, numbers 15 and 25, support this conclusion of law. In finding of fact 15, Peterman acknowledged that he could not account for the large sums of cash. In fact, he stated that he did not feel that it was necessary because he was not an accountant. Finding of fact 18 provides that Peterman provided no receipts to support his use of the cash. The only receipts he provided in this case are found in exhibit 18. Findings of fact 16 and 25 provide that Peterman cannot account for his cash expenditures and that he withdrew cash from the Trust accounts for his personal use. These findings support conclusion of law 4.
Conclusion of law 6 provides, "The failure of the respondent to keep basic accounting records, receipts and documentation to support expenditure of trust funds is a breach of his fiduciary duty." CP at 457. It is unclear how Peterman can argue that his failure to keep track of the Trust assets could possibly satisfy his obligation of good faith, diligence, and undivided loyalty to the beneficiaries. See Estate of Ehlers, 80 Wn. App. at 757. Accordingly, the record supports this conclusion.
Conclusion of law 7 provides, "The trust suffered damages as a result of the various breaches of fiduciary duty by the respondent, [Peterman], in the sum of $358,249.34 for trust sums which were expended by [Peterman] for his personal use, in the sum of $48,120.25 for sums unreasonably expended for construction of the Wingfield Hills house and in the amount of $5,056.71 for contract payments withheld from [Ellis]." CP at 457. The sum of $358,249.34 constitutes the total of Peterman's cash withdrawals, car expenses, golf dues, and other non-trust related spending as calculated in exhibit 21 based on the Wells Fargo Bank statements found in exhibit 22. The sum of $48,120.25 for excess spending on the house is supported by deposition testimony (actual cost of $460,140.25, less the amount that Martin testified the house could be completed for, $412,020). The sum of $5,056.71 is supported by exhibit 19. Accordingly, we determine that the facts in this case support the conclusion of law that Peterman's personal use of Trust funds and failure to pay Ellis her portion of Trust income constituted a breach of his fiduciary duty.
Conclusion of law 8 provides, "The damages suffered by the trust as a result of the respondent's breaches of fiduciary duty are liquidated in nature and the trust is entitled to prejudgment interest. Through January 31, 2007, the trust is entitled to interest upon the liquidated damages in the sum of $121,312.38." CP at 457. A liquidated claim is one where the trial court is able to determine the amount of prejudgment interest from the evidence with exactness and without reliance on opinion or discretion. Hansen v. Rothaus, 107 Wn.2d 468, 472, 730 P.2d 662 (1986) (citing Prier v. Refrigeration Eng'g Co., 74 Wn.2d 25, 32, 442 P.2d 621 (1968)). "A dispute over the claim, in whole or in part, does not change the character of a liquidated claim to unliquidated." Hansen, 107 Wn.2d at 472.
Here, the trial court was able to review Peterman's bank statements and to question James, the author of the spreadsheets used to summarize the account activity. Thus, this conclusion is correct.
Conclusion of law 9 provides, "The court finds that a reasonable rate of interest upon the judgment being awarded to the trust against the respondent is 12% per year." CP at 457. A party's failure to assign error or to provide argument and citation of authority in support of an assignment of error precludes appellate consideration of the alleged error. Escude v. King County Pub. Hosp. Dist. No. 2, 117 Wn. App. 183, 190 n. 4, 69 P.3d 895 (2003). Peterman does not provide any argument or authority for his assertion. Accordingly, we do not address it.
Conclusion of law 10 provides, "[Peterman] incurred attorney fees, prior to his discharge as trustee, with the firm of Ingram, Zelasko Goodwin in the sum of $10,315.21, which sums should be paid directly from trust funds." CP at 458.
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 . . . [f]rom any party to the proceedings[,] . . . from the assets of the estate or trust involved in the proceedings[,] . . . or . . . from any nonprobate asset that is the subject of the proceedings.
Former RCW 11.96A.150(1) (2006). We review the reasonableness of an award of attorney fees under the abuse of discretion standard. Progressive Animal Welfare Soc'y v. Univ. of Wash., 114 Wn.2d 677, 688, 790 P.2d 604 (1990). A trial court abuses its discretion if it exercises it on untenable grounds or for untenable reasons. Carroll, 79 Wn.2d at 26.
Peterman argues that the trial court found that both he and the Trust were liable for Ingram Zelasko Goodwin's fees. But Peterman misunderstands the judgment. Conclusion of law 13 provides:
The total amount of the judgment entered against [Peterman] in this action, including attorney fees payable out of the trust, should be satisfied by a setoff of those sums, including all interest, against [Peterman's] remaining share in the assets of the trust. After such setoff, [Peterman] will be entitled to the remaining balance, if any, of his 50% of the trust assets.
CP at 458. The trial court clearly ruled that the judgment against him would be setoff against Peterman's remaining share in the trust.
Conclusion of law 11 provides, "[Ellis] has incurred attorney fees and costs in the investigation, prosecution and trial of this litigation in the total sum of $54,680.01, which sums should be paid from trust funds." CP at 458. Again, Peterman presents the same argument here. The same analysis applies. Peterman is liable for the attorney fees via setoff against his personal interest in the Trust assets.
IX. Attorney Fees A. Trial
Peterman argues the trial court abused its discretion by entering judgment against him for fees owing to Ingram, Zelasko Goodwin and to Edwards Hagen. Washington courts do not award attorney fees unless expressly authorized by contract, statute, or recognized equitable exception. Pierce County v. State, 159 Wn.2d 16, 50, 148 P.3d 1002 (2006). We review the reasonableness of an award of attorney fees under an abuse of discretion standard. Progressive Animal Welfare Soc'y, 114 Wn.2d at 688. A trial court abuses its discretion if it exercises it on untenable grounds or for untenable reasons. Carroll, 79 Wn.2d at 26. Chapter 11.96A RCW is the Trust and Estate Dispute Resolution Act (TEDRA). RCW 11.96A.020 provides that the legislature intended for the courts to have full and ample power and authority to administer and settle all trusts and trust matters. RCW 11.96A.020(1)(b). Former RCW 11.96A.150 provides:
(1) 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.
(2) This section applies to all proceedings governed by this title, including but not limited to proceedings involving trusts, decedent's estates and properties, and guardianship matters. This section shall not be construed as being limited by any other specific statutory provision providing for the payment of costs, including RCW 11.68.070 and 11.24.050, unless such statute specifically provides otherwise. This statute [section] shall apply to matters involving guardians and guardians ad litem and shall not be limited or controlled by the provisions of RCW 11.88.090(9).
Peterman first asserts a blanket argument that the trial court failed to provide a statutory, contractual, or equitable basis for the attorney fee awards. This argument fails based on the TEDRA statute above. Peterman also argues that the attorney fees were not consistent with the trial court's own conclusions. It is unclear what Peterman is arguing here. He next contends that the record fails to support the attorney fee awards. Peterman fails to make any specific allegations about why Ingram Zelasko Goodwin should not receive their fee award.
Peterman does specifically claim, however, that Ellis's counsel, Mr. Edwards, failed to include either his hourly rate or the amount of time he devoted to each of his tasks. We review the reasonableness of an award of attorney fees under an abuse of discretion standard. Progressive Animal Welfare Soc'y, 114 Wn.2d at 688. A trial court abuses its discretion if it exercises it on untenable grounds or for untenable reasons. Carroll, 79 Wn.2d at 26. Because we are unable to determine the reasonableness of the billing rate and the hours charged without knowing the time allocated or fees charged, we vacate the attorney fee award to Edwards Hagen and remand so that Edwards can provide more detailed billing records. We affirm the fee award to Ingram, Zelasko Goodwin.
Peterman does not address attorney fees on appeal. Ellis requests attorney fees and costs incurred by the Trust in responding to this appeal under RAP 18.1. RCW 11.96A.150 provides that an award of such fees is within the discretion of this court. We award attorney fees in favor of Ellis under the TEDRA statute, upon her compliance with RAP 18.1.
RAP 18.1 provides:
(a) Generally. If applicable law grants to a party the right to recover reasonable attorney fees or expenses on review before either the Court of Appeals or Supreme Court, the party must request the fees or expenses as provided in this rule, unless a statute specifies that the request is to be directed to the trial court.
(b) Argument in brief. The party must devote a section of its opening brief to the request for the fees or expenses.
Former RCW 11.96A.150(1) provides:
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.
We affirm in part, vacate only the trial court's attorney fee award in favor of Edwards Hagen, and remand for clarification of the attorney fee award in favor of Edwards Hagen.
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.
HUNT, J. and PENOYAR, J., concur.