Caiarelli v. Taylor (In re Estate of Taylor)

• Decision Date: 19 May 2014
• Docket Number: c/w 68224-5,No. 68222-9-I,68222-9-I
• Court: Washington Court of Appeals
• Parties: In the Matter of the Estate of William Ross Taylor, Deceased. PATRICIA CAIARELLI, Respondent/Cross-Appellant, v. CHARLES E. TAYLOR II, Appellant, REUBEN TAYLOR, JR., and EMILY TAYLOR, and the marital community thereof, Cross-Respondents, and ELIZABETH M. TAYLOR, Respondent.

In the Matter of the Estate of William Ross Taylor, Deceased.PATRICIA CAIARELLI, Respondent/Cross-Appellant, v. CHARLES E. TAYLOR II, Appellant,REUBEN TAYLOR, JR., and EMILY TAYLOR,and the marital community thereof, Cross-Respondents,and ELIZABETH M. TAYLOR, Respondent.

No. 68222-9-I

c/w 68224-5

COURT OF APPEALS OF THE STATE OF WASHINGTON DIVISION ONE

FILED: May 19, 2014

UNPUBLISHED OPINION

BECKER, J. — William Ross Taylor died in a boating accident in 2005. This appeal arises from a jury trial of a dispute among his survivors over ownership of nonprobate assets. The participants in the dispute include Patricia Caiarelli,William's ex-wife and the mother of his young son, A.C.T.; William's brother, Charles Taylor; and William's parents, Reuben and Emily Taylor. A jury decided that William designated Charles to hold assets in trust for A.C.T., not to keep them for himself. We affirm the judgment on the verdict against Charles. We reverse the trial court's orders dismissing Reuben and Emily. The matter is remanded to permit Caiarelli, who is acting as her son's guardian, to pursue her claim that Reuben and Emily exerted undue influence over William.

FACTS

This is the second time this matter has been before this court. Our previous opinion sets forth the genesis of the dispute—a young man devastated by the loss of his job at Microsoft and the breakdown of his marriage, the bitterness of the dissolution proceedings, his love and concern for his young son, a will that directed all of his assets into a trust for his son, his untimely death, the mishandling of his estate by his brother leading to the appointment of a new estate administrator, and procedural irregularities requiring reversal of summary judgment orders that prematurely resolved the ownership issues. Estate of Taylor, noted at 159 Wn. App. 1003 (2010). As a result of the first appeal, the parties returned to the trial court to litigate competing claims to the proceeds of a Fidelity retirement account, three AIG life insurance policies and five Northwestern Mutual life insurance policies.

The record shows that in 2003, William lost his job and Caiarelli began divorce proceedings. William prepared a will directing that in the event of his death, all of his assets were to be held in trust for his son. His brother Charleswas named as the trustee. His father Reuben was named as the alternate trustee, and his mother Emily was named as a second alternate.

The final decree dissolving William's marriage to Caiarelli was entered in February 2005. William started working for a new company in July 2005. Also in July 2005, William took the actions that are central to this dispute. He signed a change of owner designation transferring ownership of the Northwestern Mutual policies from himself to his father, Reuben. He rolled over the Fidelity retirement account and named Charles as the primary beneficiary and Reuben as contingent beneficiary. And he took out three AIG life insurance policies that were available as a benefit of his new employment, again designating Charles as primary beneficiary and Reuben as contingent beneficiary.

Two months later, William drowned.

During Charles' tenure as personal representative of William's estate, Charles obtained for himself the proceeds of the AIG policies and the Fidelity account. Reuben received the proceeds of the Northwestern Mutual policies. Neither Charles nor Reuben took steps to fulfill trustee responsibility for the testamentary trust William had created for his son.

Caiarelli brought suit against Charles to have a constructive trust imposed upon these proceeds for the benefit of A.C.T. She claimed that despite the appearance that the financial actions William took in July 2005 were for the benefit of Charles and Reuben personally, William's actual intent as shown by his will was for Charles and Reuben to hold the proceeds as trustees for A.C.T. Our previous opinion reversed orders of summary judgment and remanded to permitCaiarelli to litigate the intent theory. When the case returned to the trial court after the mandate issued on May 13, 2011, Caiarelli pursued an additional theory of undue influence by Charles, Reuben, and Emily.

The case was tried to a jury from November 10 to November 30, 2011. Emily was dismissed early in the trial. At the end of the plaintiffs case, the court granted a motion to dismiss Reuben under CR 50(a). The defense rested without making an opening statement or calling any witnesses. The jury rendered a special verdict against Charles, finding that (1) William intended to designate Charles as the beneficiary of the AIG policies and the Fidelity account as trustee for A.C.T., not for his personal benefit, and alternatively (2) Charles unduly influenced William to designate him as the beneficiary of the AIG policies and the Fidelity account.

Charles moved for judgment notwithstanding the verdict. The trial court denied the motion and entered judgment against Charles for the value of the three AIG policies and the Fidelity account that should have been preserved for A.C.T., the sum of $824,212.85, plus prejudgment interest, for a total judgment of $1,422,077.54.

Charles appeals from the order denying his motion for judgment notwithstanding the verdict. Caiarelli cross appeals from the orders dismissing Emily and Reuben.

CHARLES' APPEAL

This court reviews the denial of a motion for judgment notwithstanding the verdict de novo, applying the same standard of review as the trial court. Hizey v.Carpenter, 119 Wn.2d 251, 271, 830 P.2d 646 (1992). "'A directed verdict or judgment n.o.v. is appropriate if, when viewing the material evidence most favorable to the nonmoving party, the court can say, as a matter of law, that there is no substantial evidence or reasonable inferences to sustain a verdict for the nonmoving party.'" Hizey, 119 Wn.2d at 271-72. The moving party must prove that there is no substantial evidence, or reasonable inference from that evidence, which, viewed in a light most favorable to the prevailing party, supports the decision made by the jury. Sing v. John L Scott. Inc., 134 Wn.2d 24, 29, 948 P.2d 816 (1997).

Charles argues on appeal that no evidence was presented that William intended anything other than what was on the documents themselves when he typed in Charles' name as beneficiary on the AIG policies and the Fidelity account. He is mistaken. As we said in our previous opinion that reversed summary judgment for Charles on this issue, "a jury could conclude that William intended to leave these assets to his son by entrusting them to his father and brother in a representative capacity." Taylor, noted at 159 Wn. App. 1003, 2010 WL 5464751, at *6. And now a jury has concluded exactly that. The jury decision is supported by the following evidence:

• William's four wills executed from 2003 to 2004 leaving substantially all of his assets to his son and nothing to his father or his brother.

• William's increasing concern after the divorce that Caiarelli would have access to his assets in the event of his death.

• William's attorney Craig Coombs' testimony that, during the preparation of two wills in 2003 and 2004 before the dissolution of his marriage, William's intent was to leave all his assets to A.C.T., as demonstrated by language expressly directing that that his estate hirean attorney to represent A.C.T. and to make sure all of William's property was placed in a trust on behalf of A.C.T.

• Testimony of three people that the beneficiary forms were not worded in such a way as to give William the option of indicating that Charles and Reuben were named in their capacity as trustees for A.C.T.

• William's decision to name Charles as trustee of the trust to benefit A.C.T. that was created in his will.

The trial court did not err in denying Charles' motion for judgment notwithstanding the verdict on the intent claim.

The claim of undue influence by Charles was an alternative theory leading to the same result as the intent theory. Charles assigns error to instruction 13, which set forth the burden of proof on the claim of undue influence.

Instruction 13 equated the burden of proof for the beneficiary designations on the Fidelity account and the AIG insurance policies with the burden of proof for inter vivos gifts. This burden makes it easier for the challenger of the designation to prove undue influence than the burden of proof for testamentary designations. Which burden applies to beneficiary designations is an issue that has not been decided in Washington, and it will remain undecided in this opinion. The special verdict shows that the jury was unanimous as to the intent theory and almost unanimous (11-1) as to the undue influence theory. Because there was sufficient evidence to support the intent theory, we need not separately analyze whether there was sufficient evidence to support the verdict on the claim of undue influence by Charles. See Davis v. Microsoft Corp., 149 Wn.2d 521, 539-40, 70 P.3d 126 (2003). As a result, we need not decide Charles' claim of instructional error pertaining to undue influence.

Caiarelli's claim was brought under the Trust and Estate Dispute Resolution Act, chapter 11.96 RCW (TEDRA). The act provides a trial court with discretion to order reasonable attorney fees. RCW 11.96A.150. The trial court exercised its discretion to make a significant award to Caiarelli for attorney fees, costs, and other expenses. Charles asks for reversal of the fee award in the event the judgment against him is reversed. Because we are affirming the judgment against Charles, we decline to disturb the award of attorney fees, costs, and expenses against him. Charles requests attorney fees on appeal. That request is denied.

Caiarelli requests an award of attorney fees on appeal against Charles. That request is granted with respect to Charles' appeal, subject to compliance with RAP 18.1.

CAIARELLI'S CROSS APPEAL

Caiarelli's cross appeal concerns the five Northwestern Mutual life...