Dean v. Lehman

• Decision Date: 08 February 2001
• Docket Number: No. 68281-0.,68281-0.
• Citation: 18 P.3d 523,143 Wash.2d 12
• Court: Washington Supreme Court
• Parties: Suzanne DEAN, by herself and on behalf of all similarly situated persons, Respondent, v. Joseph LEHMAN; Chase Riveland, and the State of Washington, Appellant.

18 P.3d 523

143 Wash.2d 12

Suzanne DEAN, by herself and on behalf of all similarly situated persons, Respondent, v. Joseph LEHMAN; Chase Riveland, and the State of Washington, Appellant.

No. 68281-0.

Supreme Court of Washington, En Banc.

Argued March 9, 2000.

Decided February 8, 2001.

Christine Gregoire, Atty. Gen., Douglas Wayne Carr, Mary Elizabeth Fairhurst, Asst. Attys. Gen., Olympia, for appellant.

Sirianni & Youtz, Chris Robert Youtz, Jonathan P. Meier, Seattle, for respondent.

Columbia Legal Services, Patricia J. Arthur, Seattle, amicus curiae on behalf of Pro-Family Advocates of Wash.

Nancy Lynn Talner, Kenmore, amicus curiae on behalf of American Civil Liberties of Wash.

Nancy Lynn Sapiro, Seattle, amicus curiae on behalf of Northwest Women's Law Center.

MADSEN, J.

Suzanne Dean (Dean), wife of a Department of Corrections (DOC)¹ inmate, sent money to her husband during his incarceration. She represents a class of similarly situated persons (Class) challenging the validity of RCW 72.09.480, which mandates the deduction of 35 percent of all funds received by prison inmates. The deductions are allocated in the following manner: 10 percent to an inmate savings account; 20 percent to contribute to the cost of incarceration; and 5 percent to a victims' compensation fund.

On a motion for summary judgment the trial court held, as to the Class: (1) RCW 72.09.480 violates the uniformity requirement of article VII, section 1 of the Washington Constitution; (2) deductions for the victims' compensation fund and costs of incarceration violate the Takings Clauses of the Washington and United States Constitutions; and (3) that the Class is entitled to earned interest on inmate savings accounts. The trial court also ordered the return of all previously seized funds. The DOC appealed, and the Court of Appeals certified the case to this court.

We reverse, holding that RCW 72.09.480 is constitutional, but that the inmates are entitled to previously earned interest on their inmate savings accounts.

FACTS

In 1995, the Legislature enacted RCW 72.09.480, authorizing specified deductions from any outside funds sent to DOC inmates:

When an inmate, except as provided in subsection (6) of this section, receives any funds in addition to his or her wages or gratuities, the additional funds shall be subject to the deductions in RCW 72.09.111(1)(a) and the priorities established in chapter 72.11 RCW.

RCW 72.09.480(2). The following deductions are authorized:

(i) Five percent to the public safety and education account for the purpose of crime victims' compensation;

(ii) Ten percent to a department personal inmate savings account; and

(iii) Twenty percent to the department to contribute to the cost of incarceration.

RCW 72.09.111(1)(a).²

The "personal inmate savings account" is essentially a compelled savings account. Funds from this account "together with any accrued interest" are available to the inmate upon his or her release. RCW 72.09.111(1)(d).³ As applied to all of the deductions, the "amount deducted from an inmate's funds ... shall not exceed the department's total cost of incarceration for the inmate ...." RCW 72.09.480(3).

Inmates subject to the statutory deductions filed a number of federal lawsuits, one of which (Wright v. Riveland, 219 F.3d 905 (9th Cir.2000)) was certified as a class action by United States District Court Judge Franklin Burgess. Class Br. at 3. Plaintiffs in that suit sought certification of a "non-inmate" class, which included the spouses of DOC inmates. Clerk's Papers (CP) at 100. The United States District Court denied the request, noting that "the proposed `non-inmate' class may raise different claims and defenses than those raised by the `inmate' class." Id. Specifically, the court recognized that "[a]n individual sending money to his or her incarcerated spouse may have a community property interest in the funds held in a prisoner's bank account."⁴ Id. The District Court rejected most of plaintiffs' claims but held that the deductions could not be made from certain federal entitlements on Supremacy Clause grounds.

Spouses of DOC inmates filed suit in King County Superior Court, challenging the validity of RCW 72.09.480 on a variety of bases. On cross-motions for summary judgment the trial court held, as to the Class: (1) RCW 72.09.480 violates the uniformity requirement of article VII, section 1 of the Washington Constitution; (2) deductions for the victims' compensation fund and costs of incarceration violate the Takings Clauses of the Washington and United States Constitutions; and (3) that the Class is entitled to earned interest on inmate savings accounts. The trial court also ordered the return of all previously seized funds. The trial court ordered the DOC to discontinue making deductions from funds received by married inmates, but continued to allow the deductions as to all unmarried inmates. CP at 349-50. The DOC appealed, and the Court of Appeals certified the case to this court.

ANALYSIS

I.

The first issue in this case is whether the Class, composed of spouses of DOC inmates, has standing to challenge the validity RCW 72.09.480. The general rule is that "[o]ne who is not adversely affected by a statute may not question its validity." Haberman v. Wash. Pub. Power Supply Sys., 109 Wash.2d 107, 138, 744 P.2d 1032, 750 P.2d 254 (1987). This basic rule of standing "prohibits a litigant ... from asserting the legal rights of another." Greater Harbor 2000 v. City of Seattle, 132 Wash.2d 267, 281, 937 P.2d 1082 (1997) citing Walker v. Munro, 124 Wash.2d 402, 419, 879 P.2d 920 (1994)). It also mandates that a party have a "real interest therein," State ex rel. Gebhardt v. Superior Court, 15 Wash.2d 673, 680, 131 P.2d 943 (1942), prior to bringing a cause of action.

The Class contends that as inmate spouses it has a one-half community property interest in funds sent to its spouses. Therefore, it claims the 35 percent deduction authorized by RCW 72.09.480 directly implicates its "interests." The trial court agreed with the Class, finding that it "presumptively has legally protected interests in its spouses' prison accounts by virtue of community property law." CP at 316. The DOC assigns error to this finding.

The DOC makes three arguments: (1) that RCW 72.09.480 overrides any potentially conflicting community property laws; (2) that money sent from Class members is a gift, thereby losing its community property character; and (3) that the 35 percent deduction authorized by RCW 72.09.480 reaches only the inmate spouse's one-half community property interest in the funds sent, which according to the DOC, is authorized by this Court's holdings in deElche v. Jacobsen, 95 Wash.2d 237, 622 P.2d 835 (1980), and Keene v. Edie, 131 Wash.2d 822, 935 P.2d 588 (1997).

Turning first to the DOC's contention that RCW 72.09.480 overrides conflicting community property laws, we have recognized that a community property interest may be a sufficiently "real" interest to confer standing. LaHue v. Keystone Inv. Co., 6 Wash.App. 765, 776, 496 P.2d 343 (1972) (one-half beneficial interest in corporate stock by reason of community property law is sufficient to confer standing for stockholder derivative suit). In Washington all property acquired during marriage is presumptively community property, regardless of how title is held. Yesler v. Hochstettler, 4 Wash. 349, 353-54, 30 P. 398 (1892); see RCW 26.16.030; Harry M. Cross, The Community Property Law in Washington (Revised 1985), 61 Wash. L.Rev. 13, 27-28 (1986). The burden of rebutting this presumption is on the party challenging the asset's community property status, In re Estate of Smith, 73 Wash.2d 629, 631, 440 P.2d 179 (1968) (citing Rustad v. Rustad, 61 Wash.2d 176, 377 P.2d 414 (1963)), and "can be overcome only by clear and convincing proof that the transaction falls within the scope of a separate property exception." Estate of Madsen v. Commissioner, 97 Wash.2d 792, 796, 650 P.2d 196 (1982), overruled in part on other grounds by Aetna Life Ins. v. Wadsworth, 102 Wash.2d 652, 659-60, 689 P.2d 46 (1984)

. Physical separation of the spouses, without more, does not alter the basic community property presumption. Rustad, 61 Wash.2d at 180,

377 P.2d 414; Cross, supra, at 92; see also RCW 26.16.140.

The DOC essentially argues that RCW 72.09.480 serves to rebut the general community property presumption. Central to the DOC's argument is the fact that the DOC is the custodian of the funds and that the funds are "not subject to the management and control of either spouse" nor "available to satisfy general community obligations." DOC Br. at 8. According to the DOC, this reduced control by an inmate's spouse over sent funds extinguishes the spouse's community property "interest" in those funds. The Class correctly notes that this argument conflicts with a line of cases establishing that a spouse's community property interest does not dissipate simply because he or she is not in a position to exercise full control over the property. Class Br. at 5; see Seattle-First Nat'l Bank v. Brommers, 89 Wash.2d 190, 200, 570 P.2d 1035 (1977)

(spouse under guardianship continues to have an interest "in the ownership" of community property); Rustad, 61 Wash.2d 176,

377 P.2d 414 (wife confined to mental hospital for remainder of life retains community property rights in assets acquired by husband).

The DOC also cites Arnold v. Department of Retirement Systems, 128 Wash.2d 765, 912 P.2d 463 (1996). At issue in Arnold were two provisions of the Washington Law Enforcement Officers' and Fire Fighters' Retirement System (LEOFF) that precluded a divorced spouse from receiving LEOFF benefits, "earned" by the other spouse during marriage, after the death of the employee spouse. Id. at 767, 912 P.2d 463; see RCW 41.26.030(6), .160. This court held that the Legislature "may establish by statute the designated beneficiaries of a statutory death or survivorship benefit,...