Christen v. Guettler, No. 57689-5-I (Wash. App. 5/7/2007)
| Decision Date | 07 May 2007 |
| Docket Number | No. 57689-5-I.,57689-5-I. |
| Court | Washington Court of Appeals |
| Parties | LOUIS E. CHRISTEN and HELEN A. CHRISTEN, his wife, Respondents, v. JAMES D. GUETTLER, Appellant, and CAROL C. GUETTLER, his wife, Defendant. |
Appeal from King County Superior Court. Docket No: 04-2-30514-4. Judgment or order under review. Date filed: 01/05/2006. Judge signing: Honorable James D Cayce.
Counsel for Appellant(s), Howard Mark Goodfriend, Edwards Sieh Smith & Goodfriend PS, 1109 1st Ave Ste 500, Seattle, WA, 98101-2988.
Carol C Guettler, (Appearing Pro Se), 7711 45th Ave Sw, Seattle, WA, 98136-2215.
Counsel for Respondent(s), Gregory Mann Miller, Reed Longyear Malnati Ahrens & West PLLC, 801 2nd Ave Ste 1415, Seattle, WA, 98104-1517.
James and Carol Guettler borrowed money from Louis and Helen Christen1 over a number of years. Loan agreements were originally made orally, but the parties executed a written agreement in 1995, documenting the "status" of their loans at that time. More money was loaned after 1995 under oral agreements. After the Guettlers made no payments for three years and got separated, the Christens sued to recover the total amount owed. The trial court entered judgment for the Christens and James appeals, arguing that the trial court applied the wrong statute of limitations and that the debts were time barred. Even if the trial court applied the wrong statute of limitations and the statutory period had run, the Guettlers' payments in 2002 revived the entire debt. Therefore, the Christens' claim is not time barred, and we affirm the trial court's judgment.
The Christens provided substantial amounts of money to their daughter, Carol, and her husband, James. The Guettlers were married in 1984, and the Christens provided money for the Guettlers to buy a house and other investment properties and cover other everyday expenses. Between 1983 and 1995, the Christens provided money to the Guettlers on an informal basis. During this time, the Guettlers orally agreed to pay a variable interest rate, depending on the rate the Christens received from the money market account.
In 1995, the Guettlers signed a document, acknowledging the total debt and changing the interest rate from variable to fixed:
Personal Note
As of Jan. 1, 1995, the status of our loan(s) from Helen & Louis Christen stands at $163,565.00. Interest is at 8%, compounded annually. The Guettlers made occasional payments over the next four years, and the Christens loaned $28,230 more by oral agreement to the Christens between 1995 and 2002. As of October 1999, the new oral loans, the written acknowledgment, and the accumulated interest totaled $207,556.
The Guettlers made no payments between October 1999 and December 2002. In January 2000, the Christens orally agreed to reduce the interest rate from 8 percent to 6 percent. In December 2002, the Guettlers made two payments of $20 and $1,000.
The Christens sued the Guettlers to recover the debt balance in 2004, after the Guettlers separated and were in the process of getting divorced.2 The trial court granted the Christens' motion for default against the Guettlers, but it was vacated as to James but not to Carol. Carol filed an answer requesting the court grant a judgment in favor of her parents.
James moved for summary judgment based on the statute of limitations, but the trial court denied the motion. The case proceeded to a bench trial on a documentary record, with both parties stipulating to the record previously presented on summary judgment. The trial court found that the 1995 document had all the elements of a written contract and was therefore subject to a six-year statute of limitations. The trial court found that the additional funds loaned to the Guettlers after 1995 were subject to the three-year statute of limitations for oral contracts. The trial court concluded that the Guettlers' payments in 2002 revived the entire debt because they were "made under such circumstances that showed the Guettler community owed the full amount of the loans[.]" The trial court entered judgment in favor of the Christens for $329,189.
James timely appealed.
James asks us to review de novo the trial court's findings and conclusions because the trial was based entirely on a documentary record. The Christens argue that under In re Marriage of Rideout, 150 Wn.2d 337, 77 P.3d 1174 (2003), the documentary evidence raised disputed issues and required the trial court to make credibility determinations, and therefore, the findings should be reviewed for substantial evidence. The parties do not dispute that we should review the trial court's legal conclusions de novo.
In general, where a trial court has not seen or heard testimony requiring it to make credibility determinations, an appellate court reviews a documentary record de novo. Rideout, 150 Wn.2d at 350. But where competing documentary evidence must be weighed, a reviewing court applies a substantial evidence standard. Rideout, 150 Wn.2d at 351.
In making appealed finding of fact 11, the trial court was required to weigh credibility when determining whether the December 2002 payments acknowledged the total debt. Helen first stated in a declaration that each time Carol made a payment, she would acknowledge the total debt. In a later deposition, Helen testified that she could not remember a time when Carol acknowledged the total debt when making a payment. Carol stated in a declaration that she told her mother to apply a December 2002 payment to the total debt.
Although James urges us to apply de novo review to the trial court's findings of fact, he acknowledges this conflict in the documentary evidence.
As discussed . . . Finding of Fact 11 was not based on conflicting evidence or a credibility determination, but based on [Carol Guettler's] conclusory statement in a declaration that is refuted by Ms. Christen's sworn deposition testimony. This court can determine whether Finding of Fact 11 is supported by the record regardless of the standard of review.
Reply Brief of Appellant, at 4. Because James acknowledges a conflict in the evidence supporting finding of fact 11, we review that finding for substantial evidence.
In his brief, James argues that the 1995 document was not a written contract because it lacks two essential elements of a contract: an express promise to pay and consideration. The Christens argue that the document's implied promise to pay is sufficient to establish that essential element and that James cannot raise the consideration issue here because he failed to raise it below.
Written contracts have a six-year statute of limitations in Washington. RCW 4.16.040(1) (). "The essential elements of any contract which must be set forth in writing are `the subject matter of the contract, the parties, the promise, the terms and conditions, and (in some but not all jurisdictions) the price or consideration.'" Kloss v. Honeywell, 77 Wn. App. 294, 298, 890 P.2d 480 (1995) (quoting Family Med. Bldg., Inc. v. Dep't of Soc. & Health Servs., 104 Wn.2d 105, 108, 702 P.2d 459 (1985)). As a result of RCW 4.16.040(1)'s broad definition including implied liability arising out of a written agreement, "what is normally regarded as a necessary element of a written contract need not be expressly addressed if it is implicit in the writing, and the fact that the obligation is implicit in the writing does not cause the contract to be `partly oral' for statute of limitations purposes." Kloss, 77 Wn. App. at 299.
James asserts that the word "loan" in the 1995 document does not sufficiently imply a promise to pay, relying on National Bank of Commerce v. Preston, 16 Wn. App. 678, 558 P.2d 1372 (1977), and therefore, the document lacks an essential element of a contract.
In National Bank of Commerce, Harvey Rendsland was ill and Nona Preston managed his financial affairs. Preston filled out four of Rendsland's checks, designating herself as the payee. Two of the check stubs had the notation "loan," one had the notation "loan (house)," and one had no notation. More than three but less than six years after Rendsland died, Rendsland's executor sued Preston, claiming the four checks were loans to her that had not been repaid. The court affirmed the dismissal of the suit on summary judgment because the action was barred by the three-year statute of limitations for oral contracts:
A borrower's promise to repay loaned funds is, of course, an essential element of a loan agreement. The check stub that does not contain any notation clearly lacks a promise by Preston to repay Rendsland. The check stubs with the notations "loan" and "loan (house)" do not contain the necessary promissory language either. Plaintiff cites In re Estate of Larson, 71 Wn.2d 349, 428 P.2d 558 (1967), as authority for the proposition that "loan" establishes Preston's promise to repay Rendsland. Dictum in Larson, a case dealing with the forgiveness of a debt, states that the words "As Loan" on the face of a check are unequivocal and are evidence supporting a finding that the drawer of the check made a loan to the payee. Larson is not applicable to this situation. The language on Rendsland's check stubs may be evidence of some loan, but it does not constitute a written promise by Preston to repay Rendsland. When "as loan" appears on the face of a check, the drawer has ordered that a specified amount of money be paid to the payee "as loan." This is substantially different from the solitary presence of "loan" on a check stub, which is equivocal. Parol evidence is necessary to indicate whether the check is for a loan from the drawer (Rendsland) to the payee (Preston), for the repayment of a loan from Preston to Rendsland, or for a transaction...
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