Bank of America, N.A. v. Owens
| Decision Date | 27 October 2011 |
| Docket Number | No. 84044–0.,84044–0. |
| Citation | 266 P.3d 211,173 Wash.2d 40 |
| Parties | BANK OF AMERICA, N.A., a national, association, Petitioner, v. J'Amy Lyn OWENS, an unmarried person, Defendant,Kenneth Treiger, a married person as to his separate estate, Respondent,Shulkin, Hutton, Inc., P.S., a Washington professional corporation; and Edmund John Wood, Defendants. |
| Court | Washington Supreme Court |
OPINION TEXT STARTS HERE
Thomas Scott Linde, Schweet Rieke & Linde PLLC, Katie a Axtell, Bishop White Marshall & Weibel, P.S., Seattle, WA, for Petitioner.
Edmund John Wood, Wood & Jones, PS, Seattle, WA, for Defendant.
Jerry Richard Kimball, Attorney at Law, Catherine Wright Smith, Valerie A. Villacin, Smith Goodfriend, PS, Seattle, WA, for Respondent.Robert Walton Sargeant, Daniel W. Ferm, Williams, Kastner & Gibbs, PLLC, Larry Eugene Leggett, Attorney at Law, Seattle, WA, amicus counsel for Washington Land Title Association.OWENS, J.
[173 Wash.2d 43] ¶ 1 As part of the distribution of property following the dissolution of Kenneth Treiger and J'Amy Lyn Owens' marriage, a home belonging to Owens (the Maplewood property) was sold, and, pursuant to a trust agreement, the proceeds were deposited in a trust account. Bank of America NA (the Bank), which had obtained a writ of attachment on the Maplewood property, filed this declaratory judgment action to determine each party's rights to the proceeds.
¶ 2 There are two issues before us on review. First, we are called upon to determine whether the “Supplemental Decree of Dissolution” (Supplemental Decree) established a lien on the Maplewood property in favor of Treiger. Second, we must determine whether various documents are valid judgments. We conclude that the Supplemental Decree established an equitable lien on the Maplewood property in favor of Treiger in the amount of one-half of the proceeds of the court-ordered sale of the property. We further conclude that Documents 1375 and 1376 1 are valid judgments entitling Treiger to further awards but that Document 1370 was properly not given separate effect. Accordingly, we affirm in part and reverse in part the decision of the Court of Appeals.
¶ 3 In July 1997, Treiger and Owens married. During their marriage, Owens personally guaranteed a promissory note and borrowing agreement for The Retail Group, a business of which she was a part owner. Treiger and Owens separated on June 1, 2000, and, in February 2001, they filed for dissolution of their marriage in King County Superior Court. In the winter of 2002, first Treiger and then Owens filed for bankruptcy. On June 19, 2002, the superior court entered a decree of dissolution but reserved final resolution of the property and debt issues until the conclusion of the bankruptcy proceedings.
[173 Wash.2d 45] ¶ 4 Between the date of separation and the entry of a decree of dissolution, Owens purchased the Maplewood property. The bankruptcy court determined that this property was community property, and, in April 2004, the trustee of Treiger's estate executed a quitclaim deed to Owens in exchange for a payment $215,000. On March 21, 2005, Treiger's bankruptcy case was closed; on July 5, 2005, Owens' bankruptcy case was dismissed.
¶ 5 Following the conclusion of the bankruptcy cases, Owens and Treiger returned to King County Superior Court to complete the property distribution under the dissolution. During these proceedings, the court issued several orders relevant here. On March 21, 2006, the court entered the “Order on Pretrial Motion” (Document 1370), which awarded Treiger $3,200 in fees and sanctions based on Owens' failure to appear in response to a subpoena. On March 29, 2006, the court entered its “Order on Attorney's Fees” (Document 1371), awarding Treiger $1,429 in attorney fees and costs based on the necessity of bringing a motion in limine and a motion to compel. On May 9, 2006, the court entered the Supplemental Decree. The Supplemental Decree divided the property and liabilities, both community and separate, between the parties in a manner it determined to be fair and equitable. Two specific features of the Supplemental Decree are relevant here. First, it awards $27,501.42 to Treiger, which expressly includes the amounts listed in Documents 1370 and 1371. Second, the Supplemental Decree orders the sale of the Maplewood property and awards to Treiger “[o]ne half proceeds of the sale of the [Maplewood property].” Clerk's Papers (CP) at 16. An addendum, incorporated in the Supplemental Decree by reference, clarified that this was one-half of the net proceeds of the sale.
¶ 6 On June 9, 2006, through the “Order on Motion for Attorneys Fees” (Document 1373), Treiger was awarded $16,018 in attorney fees “in the form of a judgment” from Owens' share of proceeds from the sale of the Maplewood property. CP at 27. Three days later, on June 12, 2006, the “Order on Show Cause Re Contempt/Judgment” (Document 1374) awarded Treiger an additional $5,778 from Owens' share of the proceeds of the sale of the Maplewood property based on her failure to comply with the commissioner's ruling that she stay in court until she signed the required paperwork. The court also imposed a fine of $2,500 per day until Owens signed the listing agreement. On July 18, 2006, in its “Order Requiring Appellant to File Complete Report of Proceedings” (Document 1375), the court ordered Owens to make arrangements for a complete report of trial proceedings and, after determining Treiger's need and Owens' ability to pay, ordered Owens to pay Treiger $3,750 in attorney fees.
¶ 7 The final document from the dissolution proceedings that is relevant on review is the August 28, 2006, “Order Regarding Closing of Sale of Real Property Located at 10263 Maplewood Pl. S.W., Seattle and Distribution of Proceeds” (Document 1376). Document 1376 gave Treiger the authority to sign in place of Owens to close the sale on the Maplewood property. Further, it set forth a final determination of how the proceeds of the Maplewood property were to be disbursed. In doing so, it implemented the Supplemental Decree and various prior awards and granted Treiger additional awards of attorney fees and costs. Ultimately, the sale of the Maplewood property did not occur pursuant to the sale agreement referenced in Document 1376; the sale was completed to another buyer later in 2007.
¶ 8 On October 27, 2006, Treiger recorded seven orders from the dissolution proceedings with the King County auditor. In addition to recording the Supplemental Decree (i.e., Document 1372), Treiger also recorded Documents 1370, 1371, 1373, 1374, 1375, and 1376.
¶ 9 At some point prior to completion of the bankruptcy and dissolution proceedings, The Retail Group defaulted on its promissory note and borrowing agreement with the Bank. In July 2006, the Bank filed an action in King County Superior Court to collect on Owens' debt. On December 14, 2006, the court entered an order directing issuance of a prejudgment writ of attachment on Owens' interest in the Maplewood property. On December 19, 2006, the King County Superior Court clerk issued the writ of attachment, and the Bank recorded it on December 20, 2006. On December 14, 2007, the Bank obtained a judgment against Owens for $593,519.24.
¶ 10 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 Maplewood property sale. 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.
¶ 11 Upon deposit of the net proceeds into the trust account, the Bank filed this declaratory judgment action to determine the priority of the parties' interest in the funds held in trust. Owens, Treiger, and the Bank all filed motions for summary judgment. The trial court determined that the Supplemental Decree did not grant Treiger a lien or any other interest in the Maplewood property and granted the Bank's summary judgment motion, ordering the following distribution of the proceeds:
1. Payment of Owens' homestead exemption in the amount of $40,000;
2. Payment to Treiger of Documents 1371 ($1,429), Document 1373 ($16,081), Document 1374 ($8,278), and the money judgments included in the Supplemental Decree ($27,501.42), plus interest on each;
3. Payment of the Bank's judgment ($593,519.24), plus interest;
4. Payment to Treiger of four judgments entered in 2007 ($56,408.62);
5. Payment to Treiger and Owens of additional amounts in accordance with the Supplemental Decree.
Treiger appealed from the summary judgment order.
¶ 12 The Court of Appeals affirmed in part and reversed in part. Bank of Am., NA v. Owens, 153 Wash.App. 115, 131–32, 221 P.3d 917 (2009). The Court of Appeals 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. Id. at 124–25, 221 P.3d 917. The Court of Appeals further determined that the trial court erred in failing to recognize that Document 1376 is a judgment. Id. at 131, 221 P.3d 917. However, the Court of Appeals affirmed the trial court's determination that Documents 1370 and 1375 are not judgments.2 Id. at 126, 221 P.3d 917.
¶ 13 The Bank petitioned this court for review, and Treiger cross-petitioned. We granted review. Bank of Am., NA v. Owens, 168 Wash.2d 1039, 233 P.3d 888 (2010).
¶ 14 1. Did the Supplemental Decree establish a lien on the Maplewood property for Treiger's half of the net proceeds of its sale?
¶ 15 2. Are Documents 1370, 1375, and 1376 valid judgments?
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