Estate of Hollingsworth, Matter of
| Decision Date | 08 December 1975 |
| Docket Number | No. 3377--43021--I,3377--43021--I |
| Citation | 543 P.2d 363,14 Wn.App. 534 |
| Parties | In the Matter of the ESTATE of Claude HOLLINGSWORTH, Deceased. Willard W. JONES, Special Administrator of the Estate of Claude Hollingsworth, Deceased, et al., Respondents, v. Howard HOLLINGSWORTH and Oma C. Hollingsworth, husband and wife, Appellants. |
| Court | Washington Court of Appeals |
Lycette, Diamond & Sylvester, Josef Diamond, Simon Wampold, Seattle, Wash., for appellants.
Miller, Anderson, Nash, Yerke & Wiener, Grant T. Anderson, Portland, Ore., Winston, Cashatt, Repsold, McNichols, Connelly & Driscoll, Spokane, Wash., for respondents.
The single issue raised in this appeal presents a 'hornbook' question of elementary contract law. What is the legal effect of a 'condition' which is an event within the control of a party who seeks to avoid the contract?
The parties to the contract are the heirs of Claude Hollingsworth, deceased. Proponent, Howard Hollingsworth, is the named executor of Claude Hollingsworth's purported last will. Contestants, J. Y. Hollingsworth, Max Hollingsworth, Fred Hollingsworth, and Elaine Bollam are Howard's siblings who have contested both the will and an inter vivos transaction between Howard and the deceased. The inter vivos transaction and the will combined to substantially disinherit the contestants and to make Howard the principal beneficiary of his father's estate. Contestants petitioned to have the will 'revoked and annulled.' Pending a hearing on the petition, the probate judge removed Howard as executor and appointed Willard Jones as special administrator. Jones is a nominal party to this appeal.
The contract in question is a stipulation by which the contestants expressed their 'desire . . . to compromise, settle and forever put at rest all issues' among them. In summary, it provides that the inter vivos transaction was valid, that the will is invalid and that, after payment of expenses of administration, attorneys' fees, estate taxes and Howard's income taxes, the remainder of the estate 'shall be divided among Proponent (Howard) and Contestants (intervenors), giving a one-fifth share to each.'
Critical to the dispositive issue are the following provisions of the stipulation:
The Internal Revenue Service is asserting additional estate tax liability against the Estate of Claude Hollingsworth upon the premise that the intervivos (sic) transfers were invalid and that the property was an asset of the estate at the time of death and is also asserting income tax liability against Defendants covering a period of several years and arising primarily from gains realized by Proponent from sales of the same property. The parties expect to be able to compromise, settle and make provision for the payment of any and all tax liability of the estate and of the Defendants in amount and manner acceptable to the parties to this Stipulation but such determination and provision for payment of any and all such tax liability lies at the thres hold (sic) of any settlement of issues among the parties to this Stipulation and is a condition precedent to the consummation of any compromise and settlement of the issues among the parties hereto.
In the event the parties are unable to arrange with the Internal Revenue Service a determination of the estate tax liability of the Estate of Claude Hollingsworth and the income tax liability of Defendants and make provision for payment thereof in amount and manner acceptable to the parties to this Stipulation within ninety (90) days from the date of this Stipulation or within such additional time as the parties hereto stipulate in writing filed with the above entitled Court as a supplement to this Stipulation, this Stipulation shall be without any legal effect whatsoever, all parties shall be excused from performance hereunder, and no party hereto shall be prejudiced in anywise for having entered into this Stipulation.
Plaintiff's exhibit No. 1. By a subsequent stipulation, it was agreed that the time 'for the determination of the estate tax liability of the estate and the income tax liability of the defendants, with satisfactory provision for payment thereof, hereby is extended for an indefinite period and shall continue until terminated by order of the above-entitled court.' Plaintiff's exhibit No. 2.
Negotiations to settle the tax matters with the IRS were undertaken by an accountant employed by the special administrator. The accountant negotiated a settlement of the tax liabilities which was acceptable to the intervenors but Howard refused to accept the proposed settlement of his individual tax liability. After an 'in chambers' hearing, the judge who was handling the probate ordered Howard to sign the personal income tax forms and, upon his refusal to do so, 'put him in jail for a week' for contempt of court. Howard was not represented by counsel at the time.
Thereafter, Howard's present counsel petitioned for an order declaring the stipulation to be 'void and of no effect' and to set the will contest for trial on the merits. Howard first asserts that the stipulation never became operative or effective because it was not signed by his wife. His second contention is that the stipulation is wholly executory because, by its express terms, his 'acceptance' of the tax liability settlement is a condition precedent to his performance.
The trial judge rejected both of Howard's contentions and concluded that '(t) he stipulation is a binding agreement for settlement of the above-entitled causes and for the administration and distribution of the property covered by the stipulation in the manner therein provided.' Conclusion of law No. 6.
We do not agree.
Our review of the findings of fact, conclusions of law and memorandum opinion appended thereto reveals that, although not expressly articulated, the trial judge reasoned that the above-quoted provisions for a 'release from stipulation' should be construed to be a 'conditional promise' rather than a true 'condition precedent.' His conclusion that Howard was bound by the terms of the settlement agreement was based upon his finding that the proposed compromise with the IRS was 'the best' that could be hoped for and that, in refusing to accept it, Howard 'acted in bad faith, for the sole purpose of undoing what he had previously done by signing the stipulation and supplemental stipulation.' Finding of fact No. 14. Howard's position is that the proposed compromise was not the 'best' for him. He asks for a trial on the merits.
The record brought to us does not include any trial briefs or counsels' argument at trial. However, in his memorandum opinion, the trial judge cites only Yarno v. Hedlund Box & Lumber Co., 129 Wash. 457, 225 P. 659, 227 P. 518 (1924) in support of the statement that: 'In contracts where the duties of the parties with respect to Performance are specifically provided in the contract, dissatisfaction as a ground for his termination will not be recognized unless there is a substantial ground for dissatisfaction.' (Italics ours.)
Yarno is clearly distinguishable. The contract there involved was for the logging of timber owned by Hedlund. Yarno was to be paid for his performance on a stumpage basis. The contract required Yarno to construct 'roads, chutes, skidways, landings, necessary for the successful Performance of the work, and to do this, as well as construct the camps, at his own expense.' (Italics ours.) Yarno v. Hedlund Box & Lumber Co., supra at 460, 225 P. at 661. The contract provided that time was of the essence and if Hedlund became 'dissatisfied' with the progress 'being made' by Yarno, it could terminate the contract. After Yarno had been on the job for some 2 1/2 months, Hedlund 'terminated the contract, compelled Yarno to vacate the premises, and took upon itself the logging operations.' Yarno v. Hedlund Box & Lumber Co. at 459, 225 P. at 660. Yarno recovered a money...
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Marriage of Sanai v. Sanai, No. 50374-0-I (Wash. App. 12/22/2003)
...... Sassan cross-appeals, arguing that the trial court should have divided the entire estate equally, including a bank account the court ruled was Viveca's separate property. ...15. 14 Wn. App. 534, 543 P.2d 363 (1975). 16. See Jones v. Hollingsworth, 88 Wn.2d 322, 560 P.2d 348 (1977). 17. In re Marriage of ......