Bartlett v. Betlach
| Decision Date | 16 November 2006 |
| Docket Number | No. 23995-1-III.,23995-1-III. |
| Citation | 136 Wn. App. 8,146 P.3d 1235 |
| Court | Washington Court of Appeals |
| Parties | Shelley BARTLETT, Co-Trustee of the Living Trust of Bernadine Betlach; Randy Krum and Rachel Krum, husband and wife, Respondents, v. Marcy BETLACH; Nancy Lyn Jenkins; Steven Roy Betlach; and William Barrett Betlach, Appellants. |
Thomas M. Culbertson, Erika Balazs, Attorney at Law, Spokane, WA, for Appellants.
John Francis Bury, Attorney at Law, Greg Martin Devlin, Miller Devlin & McLean PS, Spokane, WA, for Respondent.
¶ 1 This is a dispute over discharge of a trustee and enforcement of an agreement by the trust to sell real estate, despite the absence of a legal description in either the offer or acceptance. We affirm the trial court's decision to reinstate the trustee because the beneficiaries failed to show cause for her discharge. But we reverse the court's decision to specifically enforce the agreement to sell trust real estate, because neither the offer nor the acceptance included a legally adequate description of the property required by the statute of frauds.
¶ 2 Bernadine Betlach established a living trust. The trust property included a house and approximately 75 acres of land. The land is referred to as parcels A, B, and C: parcel A (house and 20 acres), parcel B (20 acres), and parcel C (35 acres). Parcels A and B are not legally partitioned.
¶ 3 Bernadine had five children: Nancy Lyn Jenkins, Steven Roy Betlach, Shelley Bartlett, William Barrett Betlach, and Marcy Betlach. Bernadine designated each child a beneficiary with an equal share. She designated Shelley and Marcy as trustees.
¶ 4 Bernadine died in February 2003.
¶ 5 Nathan Bartlett lived in the house on parcel A before Bernadine's death. Nathan is Shelley's son. The trustees hired Nathan as the caretaker for the property.
¶ 6 Shelley's daughter and son-in-law are Randy and Rachel Krum. Marcy, Nancy, Steven, and William offered to sell parcel A to Randy and Rachel for $255,000 in 2003. The property had been appraised at $325,000 and everyone knew that. The offer provided that Nancy would receive $5,000 more than the other beneficiaries. Shelley refused to join in the offer because Nancy would receive more money.
¶ 7 Shelley proposed to sell parcel A to Randy and Rachel for $255,000 in February 2004. The agreement set out a legal description for parcel A as if it had been separated from parcel B. Marcy refused to join in this offer.
¶ 8 The beneficiaries became dissatisfied with Shelley as a trustee and voted her out and voted Steven in as trustee.
¶ 9 Nathan moved out of the house. And Randy and Rachel moved in on March 6, 2004.
¶ 10 The trustees (now Marcy and Steven) and a majority of the beneficiaries offered to sell parcel A to Randy and Rachel for $255,000. They proposed that Randy and Rachel pay $1,000 per month in rent for early possession. Randy and Rachel accepted the proposal to buy and to pay rent. Both the offer and the acceptance acknowledged that a purchase and sale agreement needed to be drafted. Neither letter included a legal description for parcel A.
¶ 11 Randy and Rachel obtained financing to purchase parcel A. No purchase agreement was ever drafted. Randy and Rachel continued to live in the house but did not pay rent.
¶ 12 Shelley sued to set aside her dismissal as trustee. Rachel and Randy intervened and sued for specific performance of the agreement to sell them parcel A.
¶ 13 The trial court concluded that the beneficiaries had not shown adequate cause to remove Shelley as trustee and ordered her reinstated. The court also ordered specific performance of the agreement to sell parcel A to Randy and Rachel. The court awarded Randy and Rachel their attorney fees and costs and also awarded Shelley her attorney fees and costs, all to be paid by the trust. Marcy, Nancy, Steven, and William (hereafter Marcy) appeal Shelley's reinstatement as trustee. They also appeal the order compelling specific enforcement of the agreement to sell parcel A.
SALE OF PARCEL A
¶ 14 Marcy notes that neither the offer nor acceptance letters include a legal description of the property. She argues then that there is no enforceable contract because the agreement does not satisfy the statute of frauds. Randy and Rachel respond that there is an adequate legal description by reference to a street address. And the agreement is saved, in any event, by the equitable doctrine of part performance or the equitable doctrine of judicial admission.
¶ 15 These contentions raise questions of law and so our review is de novo. Labriola v. Pollard Group, Inc., 152 Wash.2d 828, 832, 100 P.3d 791 (2004).
¶ 16 Marcy challenges several of the court's conclusions of law supporting its decision to specifically enforce the sale agreement. She challenges conclusions 2, 3, 4, 12, 14, and 15. They address the existence of a valid contract to sell, the adequacy of the legal description, and whether the doctrine of part performance applies. Marcy argues that the requirements for part performance were not met here.
¶ 17 Conveyance of real property requires a legal description. Key Design, Inc. v. Moser, 138 Wash.2d 875, 881-84, 983 P.2d 653 (1999); Martin v. Seigel, 35 Wash.2d 223, 229, 212 P.2d 107 (1949). Reference to the property's street address, city, and state is not enough. Key Design, 138 Wash.2d at 878, 881-84, 983 P.2d 653; Seigel, 35 Wash.2d at 228-29, 212 P.2d 107. "`[A] contract or deed for the conveyance of land must contain a description of the land sufficiently definite to locate it without recourse to oral testimony [or extrinsic evidence], or else it must contain a reference to another instrument which does contain a sufficient description.'" Berg v. Ting, 125 Wash.2d 544, 551, 886 P.2d 564 (1995) (quoting Bigelow v. Mood, 56 Wash.2d 340, 341, 353 P.2d 429 (1960)); Tenco, Inc. v. Manning, 59 Wash.2d 479, 485, 368 P.2d 372 (1962).
¶ 18 In 2004 Shelley, then co trustee, offered to sell parcel A to Randy and Rachel. The offer included an adequate legal description. But her co trustee refused to sign the offer. The beneficiaries then removed Shelley as trustee and replaced her.
¶ 19 The new trustees offered to sell parcel A to Randy and Rachel for $255,000. But the offer simply describes the property as "the house and 20 acres in which you currently reside." Ex. R213. And the acceptance does not improve the description: "[p]lease regard this letter as formal notice of acceptance by [Randy and Rachel] of the offer to sell the house and 20 acres in which they currently reside." Ex. R216. Neither includes a legal description for parcel A. Exs. R213, R216; Key Design, 138 Wash.2d at 881-84, 983 P.2d 653; Seigel, 35 Wash.2d at 229, 212 P.2d 107.
¶ 20 The street address is listed at the top of the offer letter. But that is not a legally sufficient property description. Key Design, 138 Wash.2d at 878, 881-84, 983 P.2d 653; Seigel, 35 Wash.2d at 228-29, 212 P.2d 107. Nor do these exchanges reference another document with an adequate property description. Randy and Rachel note that Shelley's original offer referenced the correct street address and so did the offer they accepted. Ting, 125 Wash.2d at 551, 886 P.2d 564. But a separate document cannot be incorporated into a real estate agreement simply because it contains the same address. See Garrett v. Shriners Hosps. for Crippled Children, 13 Wash.App. 77, 79-80, 533 P.2d 144 (1975).
¶ 21 The offer and acceptance letters do not, then, satisfy the statute of frauds. Seigel, 35 Wash.2d at 229, 212 P.2d 107. And the agreement is not enforceable. Id. Moreover, both the offer and the acceptance letters acknowledge that a real estate purchase and sale agreement was needed. They are correct. The offer and acceptance here amounted to an agreement to enter into a real estate purchase and sale agreement.
¶ 22 Randy and Rachel next argue that the trial court properly enforced this sale by applying the doctrine of part performance. Randy and Rachel sold their home, set up financing, and took possession. Randy and Rachel also laid carpet.
¶ 23 Application of the doctrine requires consideration of three factors: (1) possession; (2) payment or tender of consideration; and (3) permanent, substantial, and valuable improvements. Powers v. Hastings, 93 Wash.2d 709, 717, 612 P.2d 371 (1980), quoted in Ting, 125 Wash.2d at 556, 886 P.2d 564. Generally the party asserting part performance must show two of these three factors. Ting, 125 Wash.2d at 557-58, 886 P.2d 564.
¶ 24 Randy and Rachel moved into the house on parcel A on March 6, 2004. The offer to sell was dated April 1, 2004, almost a month later. Randy and Rachel agreed to pay $1,000 per month for early possession. They secured financing. But they neither tendered the purchase price nor paid rent. And there is no showing in this record to support the trial court's finding that they replaced carpeting or, of course, what the cost or effect of that was on the value of the house. Improvements must be permanent, substantial, and valuable. Powers, 93 Wash.2d at 717, 612 P.2d 371, quoted in Ting, 125 Wash.2d at 556, 886 P.2d 564.
¶ 25 In sum then, there is no showing on this record of possession, pursuant to any contract; no showing that the putative purchasers tendered payment; and no showing of valuable improvements. The court's findings do not, then, support its conclusion that Randy and Rachel met any of the requirements for part performance. Bang Nguyen v. Dep't of Health, 144 Wash.2d 516, 530, 29 P.3d 689 (2001).
¶ 26 Randy and Rachel next argue that the agreement should be enforced because Marcy admitted an adequate legal description in her pleadings. They rely on the judicial admissions doctrine set out in Sea-Van Invs. Assocs. v. Hamilton.1 Their reliance is misplaced. Our Supreme Court reversed Sea-Van Invs. and has subsequently declined to adopt the...
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