Bank of Am., N.A. v. Owens
| Decision Date | 14 October 2013 |
| Docket Number | No. 70225–4–I.,70225–4–I. |
| Citation | 311 P.3d 594,177 Wash.App. 181 |
| Court | Washington Court of Appeals |
| Parties | BANK OF AMERICA, N.A., a national association, Respondent, v. J'Amy Lyn OWENS, an unmarried person; Shulkin Hutton, Inc., P.S., a Washington professional service corporation; and Edmund John Wood, Defendants, Kenneth Treiger, a married person as to his separate estate, Appellant. |
OPINION TEXT STARTS HERE
Catherine Wright Smith, Valerie A. Villacin, Smith Goodfriend PS, Jerry Richard Kimball, Attorney at Law, Cynthia B. Whitaker, Law Offices of Cynthia B. Whitaker, Seattle, WA, for Appellant.
Edmund John Wood, Wood & Jones PS, Seattle, WA, Jerome Shulkin, Shulkin Hutton Inc. PS, Mercer Island, WA, for Defendants.
Thomas Scott Linde, Zachary E. Davies, Schweet Linde & Coulson, PLLC, Lisa M. Johnson, Schweet, Rieke & Linde, PLLC, Seattle, WA, for Respondent.
¶ 1 An appellate court's mandate is the law of the case and binding on the lower court and must be followed. Here, both this court and the Supreme Court held that appellant Kenneth Treiger's lien on the real property at issue had priority over Bank of America's lien.1 On remand, the trial court had no authority to revisit the Bank's in rem claim that the trial court “preserved and tolled” when it rendered summary judgment in favor of the Bank on its other claim. The in rem claim was not raised on review of the summary judgment and the claim was, therefore, abandoned. The trial court had no authority to ignore the Supreme Court's mandate on remand. Accordingly, we reverse the summary judgment and remand with directions that the trial court enter judgment consistent with the Supreme Court's opinion and mandate.
¶ 2 Kenneth Treiger and J'Amy Lyn Owens married in July 1997. Treiger and Owens separated on June 1, 2000 and filed for dissolution in February 2001.
¶ 3 In January 2002, during the pendency of the dissolution action but before entry of a decree of dissolution, Treiger filed a chapter 13 bankruptcy petition, which was converted to a chapter 7 bankruptcy in April 2002. In February 2002, Owens filed a separate chapter 11 bankruptcy petition.
¶ 4 The bankruptcy court in Treiger's case lifted the stay to allow the parties' dissolution action to proceed in superior court. The superior court entered a decree of dissolution on June 19, 2002 and reserved property and debt issues until the bankruptcy proceedings concluded.
¶ 5 Between the date of separation and the entry of a decree of dissolution, Treiger and Owens purchased real property referred to as the “Maplewood property” as husband and wife. The bankruptcy court determined that this property was community property and therefore property of Treiger's bankruptcy estate.
¶ 6 While the parties were married, Owens, as part owner of a business called The Retail Group, executed a promissory note and borrowing agreement in favor of Bank of America, N.A. (the Bank). The Retail Group defaulted under the note and agreement, and the Bank filed a claim in Treiger's bankruptcy action.
¶ 7 In April 2004, nearly two years after entry of the decree of dissolution, Treiger's trustee and Owens entered into a settlement agreement in which the trustee agreed to convey his entire interest in the Maplewood property to Owens, subject to all liens of record against the property, in exchange for $215,000 from Owens. By trustee's quitclaim deed dated April 29, 2004, the trustee conveyed all of the bankruptcy estate's interest in the Maplewood property to Owens, “a single individual.” The Maplewood property thus became Owens' separate property.
¶ 8 Treiger's chapter 7 case was closed in March 2005 and any obligation he owed to the Bank was discharged. Owens' chapter 11 case was dismissed in July 2005.
¶ 9 Treiger and Owens then returned to superior court to complete the property distribution in their dissolution action. In May 2006, the superior court entered a supplemental decree of dissolution (Supplemental Decree), dividing their assets and liabilities. In the Supplemental Decree, the court ordered that the Maplewood property be sold and that Treiger be awarded one-half of the net proceeds of the sale. The court also entered several orders awarding Treiger varying amounts of fees and sanctions for Owens' intransigence during the dissolution proceedings. Treiger recorded the Supplemental Decree as well as other orders pertaining to fees and sanctions on October 27, 2006.
¶ 10 Meanwhile, in July 2006, the Bank filed an action against Owens, seeking payment of the debt she guaranteed. In November 2006, the Bank amended its complaint to add a claim in rem against any separate property of Owens awarded to Treiger. The Bank moved for a prejudgment writ of attachment on the Maplewood property. The trial court granted the Bank's motion and directed the issuance of a prejudgment writ of attachment on the Maplewood property against only Owens' interest in the property. A writ of attachment issued in accordance with the court's order and was recorded on December 20, 2006. On December 14, 2007, the Bank obtained a judgment in the amount of $593,519.24.
¶ 11 The bankruptcy, dissolution, and debt collection proceedings gave rise to several conflicting claims that complicated the sale of the Maplewood property by preventing the parties from obtaining title insurance. The Bank, Treiger, Owens, Owens' attorney, and an independent trustee entered into an agreement (Trust Agreement) to obtain title insurance and facilitate the sale of the Maplewood property. In the Trust Agreement, the parties agreed that any of them could file a declaratory judgment action, naming the other parties as defendants and seeking a declaration regarding the priority and extent of the claims asserted by Owens, Treiger, the Bank, and Owens' attorney in the net sale proceeds held in trust by the trustee. The Trust Agreement provides: “Owens, as her separate estate, is the owner of the Property.”
¶ 12 The Maplewood property sold in May 2007. On May 20, 2007, pursuant to the Trust Agreement, the title insurance company wired the net proceeds of the sale ($1,114,054.83) to the specified trust account.
¶ 13 Upon deposit of the net proceeds into the trust account, the Bank filed a declaratory judgment action to determine the priority of the parties' interest in the funds held in trust. On cross motions for summary judgment brought by Owens, Treiger, and the Bank, the trial court granted the Bank's motion and concluded that the matter was controlled by the Trust Agreement in which the parties agreed that the Maplewood property was Owens' separate estate. The court also concluded that apart from the money judgments, the Supplemental Decree did not grant Treiger a lien or other interest in the Maplewood property, but rather awarded him half of the proceeds from the sale of the property, “which is one-half of the monies received by Owens as the seller of the Maplewood [p]roperty ... prior to the sale on May 20, 2007.”
¶ 14 The court ordered distribution of the net proceeds of the sale of the Maplewood property in the following order:
(1) payment of Owens' $40,000 homestead exemption;
(2) payment to Treiger of four [money] judgments he recorded on October 27, 2006 ...;
(3) payment on the Bank's judgment lien which attached to the property pursuant to the prejudgment writ of attachment;
(4) payment to Treiger of other judgments entered and recorded after the Bank recorded its writ of attachment; and
(5) payment of any remaining amount held in trust to Treiger and Owens in accordance with the supplemental decree of dissolution or any other order entered in the dissolution proceeding.
¶ 15 The court's order also states that the court had not adjudicated the Bank's in rem claim because it was rendered moot by its decision in the declaratory judgment action. The order further provides that the Bank's in rem claim would be preserved and tolled in the event the court's decision on the priority of the parties' liens was appealed.
¶ 16 Treiger appealed the order granting the Bank's motion for summary judgment. Neither the issue of the trial court's handling of the Bank's in rem claim, nor the merits of that claim, was raised on appeal. This court determined that the Supplemental Decree created a lien on one-half of the net proceeds of the sale of the Maplewood property and held that the trial court erred in failing to grant priority to Treiger's lien.2
¶ 17 Treiger and the Bank petitioned for review in the Supreme Court. The Supreme Court granted review and, again, no issue regarding the Bank's in rem claim was raised. The Supreme Court, affirming this court, held that the Supplemental Decree established an equitable lien on the Maplewood property in favor of Treiger in the amount of one-half of the net proceeds of the court-ordered sale of the property.3 The court stated:
In the present case, the Supplemental Decree created an equitable lien on the Maplewood property. The Supplemental Decree's award to Treiger of one-half of the net proceeds of the sale of the Maplewood property did not include a sum certain. As such, it did not create a statutory lien for that award. However, the Supplemental Decree specifically identified the Maplewood property, including its tax parcel number, and fastened Treiger's award to that property. As a result, the Supplemental Decree created an equitable lien on the Maplewood property in favor of Treiger for one-half of the net proceeds of its sale. Because the Supplemental Decree was entered and recorded prior to the Bank's prejudgment writ of attachment, Treiger's lien has priority.[4As to this issue, the court “remand[ed] this case to the superior court for further proceedings consistent with this opinion.” 5
¶ 18 On remand, the Bank moved for summary judgment on its in rem claim against the separate property of Owens awarded to Treiger in the Supplemental Decree. Treiger moved for the entry of judgment on the mandate. The superior court granted...
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Table of Cases
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