Heritage Restoration, Inc. v. Radabaugh
| Decision Date | 26 August 2015 |
| Docket Number | No. 45925-6-II,45925-6-II |
| Court | Washington Court of Appeals |
| Parties | HERITAGE RESTORATION, INC., Respondent, v. DOUGLAS RADABAUGH and SHIRLEY RADABAUGH, husband and wife, Appellants. |
HERITAGE RESTORATION, INC., Respondent,
v.
DOUGLAS RADABAUGH and SHIRLEY RADABAUGH, husband and wife, Appellants.
No. 45925-6-II
COURT OF APPEALS OF THE STATE OF WASHINGTON DIVISION II
August 26, 2015
UNPUBLISHED OPINION
MELNICK, J. — Douglas and Shirley Radabaugh appeal after the trial court ordered that funds held in the court registry should be disbursed to Heritage Restoration (Heritage). Heritage performed work on the Radabaughs' home. After disputes arose, litigation ensued. Pursuant to a stipulated order, the Radabaughs' insurance company paid the policy proceeds into the court registry after the parties could not agree to whom the funds belonged. The Radabaughs went through bankruptcy procedures and at the conclusion, Heritage moved the trial court to disburse the funds to it. The trial court ruled in Heritage's favor. The Radabaughs argue that the trial court modified a pre-bankruptcy judgment and circumvented bankruptcy law. Because the trial court's order disbursing funds to Heritage did not modify a judgment and because the Radabaughs presented no evidence the trial court circumvented bankruptcy law, we affirm.
I. WORK ON THE RADABAUGHS' HOME
Snow and rain damaged the Radabaughs' home. Following the submission of a claim for damages with their insurer, Grange Insurance Association (Grange), the Radabaughs hired Heritage to restore the interior of their home. The Radabaughs and Heritage entered into a written contract. Terms of the contract included that "'[Heritage] will not go beyond the general scope
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of the insurance coverage without approval of [the Radabaughs]'" and that "'[the Radabaughs agree] to immediately forward all draws issued as partial or full payment regarding this claim."" Clerk's Papers (CP) at 36. Additionally, the contract stated that the Radabaughs authorized and directed Grange to "'pay [Heritage] directly and/or include [Heritage] on all draws issued as partial or full payment regarding this claim.'" CP at 37.
II. DISPUTE
Dissatisfied With Heritage's work, the Radabaughs refused to pay. Heritage then filed a complaint for breach of contract, unjust enrichment, and lien foreclosure against the Radabaughs.1 The Radabaughs filed counterclaims and sought damages.
III. INSURANCE PROCEEDS
Prior to litigation, Grange issued a two-party check to the Radabaughs and Heritage for $17,157.50. The Radabaughs sent Heritage the check, endorsed to Heritage, adding the phrase "payment in full." CP at 39. Heritage retained the check, but did not cash it. Because the parties disputed to whom the insurance funds belonged, the parties jointly moved the trial court for an order providing that Grange, a non-party, deposit $17,157.50 (funds) into the court registry "by way of a check made payable to 'Thurston County Superior Court Clerk's Office.'" CP at 30. The trial court granted the motion and Grange deposited the funds.
IV. LITIGATION
After a trial, the court found that Heritage substantially completed the work contemplated by the contract and under a quantum meruit theory ruled that the Radabaughs owed Heritage
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$24,350. On October 14, 2011, the trial court entered a $20,600 judgment in Heritage's favor.2 The trial court's findings of fact, conclusions of law, and judgment did not address ownership of the funds in the court registry, nor did it release the funds.
On November 9, 2011, Heritage moved for release of the funds in the court registry. It argued that the funds "should be released to Heritage in partial satisfaction of its judgment" against the Radabaughs and that the Radabaughs "legally assigned the funds to Heritage when they signed the [c]ontract." CP at 57, 58.
V. BANKRUPTCY
On November 16, 2011, the Radabaughs filed for bankruptcy under chapter 7 of the United States Bankruptcy Code.3 Pursuant to. 11 U.S.C. § 362, an automatic stay of all judicial proceedings went into effect and notice was filed with the trial court on November 17, 2011. On November 18, 2011, Heritage received notice of the bankruptcy as creditors subject to discharge of the Radabaughs' bankruptcy filing. On February 27, 2012, the United States Bankruptcy Court granted the Radabaughs a discharge under 11 U.S.C. § 727.4
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On May 17, 2012, the bankruptcy Trustee moved to abandon the funds held in the court registry. The notice and motion for abandonment refers to the funds as "[t]he asset . . . described on schedule C of the bankruptcy schedules as '$17,150.50 check in Thurston Co. Superior Court registry from insurance payment to Radabaugh.'" CP at 90. On June 8, 2012, Heritage filed a response to the Trustee's motion. On June 12, 2012, the Trustee withdrew its motion with the bankruptcy court.
On December 9, 2013, the Trustee filed a report stating, "[T]here is no property available for distribution from the estate over and above that exempted by law."5 CP at 98.
VI. HEARING ON MOTION TO DISBURSE FUNDS
On March 7, 2012, the Radabaughs filed a response to Heritage's motion for release of the funds, arguing that the trial court should release the funds to the Radabaughs as the owners of the funds. On March 21, 2012, Heritage responded by stating that the funds were already Heritage's property because the funds had been legally and equitably assigned before the bankruptcy. Heritage also argued that the Radabaughs' bankruptcy discharge did not prohibit the trial court from disbursing the funds to Heritage because Heritage, as the rightful owner of the money, was not attempting to satisfy the judgment against the Radabaughs.
During the March 30, 2012 trial court hearing, the Radabaughs argued that the bankruptcy's stay of proceedings was still in effect. The Radabaughs' position was that because Heritage's judgment against the Radabaughs "was entirely discharged in the bankruptcy court,"
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the funds were "an asset that was abandoned back to the debtor post-bankruptcy." RP (Mar. 30, 2012) at 12. The trial court dismissed the motion without prejudice and asked the parties to supplement the record regarding the bankruptcy.
VII. ORDER DISBURSING FUNDS TO HERITAGE
On January 13, 2014, Heritage again moved the trial court to release the funds. At the February 21 hearing, Heritage agreed that the bankruptcy court discharged the judgment against the Radabaughs, but it again argued that the Radabaughs legally assigned the funds to Heritage prior to bankruptcy, and therefore "the money was already Heritage's under assignment." Report of Proceedings (RP) (Feb. 21, 2014) at 9. Heritage argued that because the trial court entered a judgment for $20,600 in Heritage's favor, the funds, which were deposited into the court registry prior to the trial and judgment, belonged to Heritage. It also argued that the Radabaughs legally assigned the funds to Heritage under the original contract because the Radabaughs manifested an intention to assign the funds to Heritage. Alternatively, Heritage argued that the Radabaughs also equitably assigned the funds to Heritage. The Radabaughs again argued that because the judgment was discharged in the bankruptcy, "it is no longer an operative way [for Heritage] to get at this money." RP (Feb. 21, 2014) at 12.
After considering counsels' arguments and the evidence presented, the trial court granted Heritage's motion and released the funds to Heritage. It entered a finding that "[a]t no time during the pendency [of] the Radabaughs' bankruptcy action did the Trustee in that case file any motion in any court asserting that the Radabaughs held any claim to or an ownership interest in the funds held in this court's registry under this cause." CP at 117. Thus, the trial court ordered that "Heritage is the owner of the funds on deposit with the registry of court and is the party entitled to
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the same, because the Radabaughs legally or equitably assigned the funds to Heritage."6 CP at 118.
The Radabaughs appeal.7
The Radabaughs argue that the trial court reformed a judgment discharged in bankruptcy and improperly disbursed money to Heritage that was being held in the court's registry pursuant to a stipulated order. We disagree.
I. MOTION TO STRIKE FROM APPELLANT'S BRIEF
As a preliminary matter, Heritage moves to strike the following factual statements in the Radabaughs' brief that are unsupported by citations to the record:
Heritage Restoration received a money judgment against the Radabaughs based on Findings of Fact and Conclusions of Law prepared by Heritage Restoration's Counsel and approved and issued by the Trial Court.
. . . .
Heritage Restoration filed a claim in bankruptcy as a creditor of the Radabaughs. That claim was based entirely on the judgment it had received.
. . . .
The Heritage judgment was not paid in full in the bankruptcy.
Br. of Resp't at 7 (quoting Br. of Appellants at 4, 5, 9). Heritage argues that "[o]ne of the above claims is untrue, one is intentionally misleading, and the other requires further explanation and context." Br. of Resp't at 7. The purpose of rules governing the content of appellate briefs is to enable us and opposing counsel to review the accuracy of the factual statements made in the briefs.
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Litho Color, Inc. v. Pac. Emp'rs Ins. Co., 98 Wn. App. 286, 305, 991 P.2d 638 (1999); RAP 10.3(a), 10.4. Because we will not consider any statements unsupported...
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