In re Grant

• Decision Date: 23 May 2017
• Docket Number: No. 34321-9-III
• Citation: In re Grant, 397 P.3d 912, 199 Wash.App. 119 (Wash. App. 2017)
• Court: Washington Court of Appeals
• Parties: IN RE Kathleen M. GRANT, Appellant, and John D. Grant, Respondent.

199 Wash.App. 119

397 P.3d 912

IN RE Kathleen M. GRANT, Appellant, and John D. Grant, Respondent.

No. 34321-9-III

Court of Appeals of Washington, Division 3.

MAY 23, 2017

James T. Marston, Attorney at Law, 3508 N.E. 3rd Ave., Camas, WA, 98607-2411, for Appellant.

James Timothy Denison, Jr., Lathrop Winbauer Harrel et al., P.O. Box 1088, Ellensburg, WA, 98926-1900, for Respondent.

Fearing, C.J.¶1 This appeal pits the importance of finality in litigation against the requisite for a full accounting of assets in a marital dissolution. Based on Washington statutes and the Supreme Court's wisdom in Yeats v. Estate of Yeats, 90 Wash.2d 201, 580 P.2d 617 (1978), we side with an inclusive accounting. In this partition action, we reverse the trial court's ruling that a dissolution decree's grant to the husband of the "balance of the assets" effectively disposed of the husband's interest in a retirement account when the list of assets presented to the earlier dissolution court omitted the account.

FACTS

¶2 This appeal arises from an action to partition the former husband's interest in a retirement plan never mentioned in a 2010 divorce decree. The subject couple, Kathleen and John Grant, married on November 18, 1978, and separated on June 23, 2009. During the marriage, John Grant worked for the Washington State Department of Revenue for twenty years. John is a certified public accountant. During the marriage, Kathleen Grant cleaned houses and later operated a pizza parlor. The pizza business lost money.

¶3 Since Kathleen Grant seeks to partition her former husband's interest in his Washington State Public Employees Retirement System (PERS) pension plan, the parties filed accusatory declarations that detail their respective views as to whether Kathleen knew of John's participation in the plan at the time of the dissolution. John Grant insists that the couple often discussed the existence of the retirement plan. Kathleen's father labored for the State of Washington and retired with a state pension. Kathleen received the parties' mail, which occasionally included PERS statements and newsletters. The parties discussed John switching from one PERS plan to another plan. According to John, Kathleen saw pay stubs that showed a contribution to the PERS plan. Kathleen told the couple's children that John should keep his retirement plan. During the divorce action, John provided Kathleen all records needed for her to ascertain the parties' assets. John questions how Kathleen came to learn about his retirement plan, if she lacked knowledge of the plan before the divorce. He observes that Kathleen sought a portion of his retirement account only after his payments to her ended.

¶4 In her declaration, Kathleen Grant declares that the couple rarely discussed finances. John handled the couple's investments. She did not open mail addressed to her husband. Kathleen did not handle John's pay stubs since the State paid John by direct deposit. According to Kathleen, John never mentioned a retirement account through his employment. When Kathleen referenced "his retirement" to the children and to the dissolution court, she spoke of 401(k)s, individual retirement accounts, and an investment account or two, not an unknown retirement plan.

¶5 Without the assistance of an attorney, the couple, in February 2010, petitioned for marital dissolution. The petition, prepared by Kathleen, read:

We have made a marital settlement agreement dividing our property and our bills. We are satisfied with this agreement. The attached agreement was signed freely and voluntarily by each of us, and we intend to be bounded [sic] by it.

Clerk's Papers (CP) at 36. Our copy of the petition lacks any attachment. Kathleen Grant and John Grant may agree on only one proposition—the parties intended to divide their assets evenly.

¶6 On May 10, 2010, Kathleen Grant appeared before the Kittitas County Superior Court for entry of a decree of dissolution. The trial court, unconvinced of the soundness of the proposed decree, rejected the proposed decree. The following colloquy, in part, occurred between Kathleen and the dissolution court:

The Court: Okay. I don't understand what the loan calculator's in here for.

[KATHLEEN GRANT]: Well, as opposed to taking out his retirement and all that and get fines, penalties, he's going to pay me quarterly. Or, if you wanted to break it down to monthly, it would be 2,000 a month. And that way he can still, you know, keep his—

....

The Court: He is a [Certified Public Accountant]?

[KATHLEEN GRANT]: Uh-huh. As I said, the reason he set it up like that was as opposed to take everything out of his retirement —

CP at 27 (emphasis added).

¶7 On May 24, 2010, Kathleen and John Grant appeared before the Kittitas County Superior Court for entry of the same dissolution decree. The trial court then entered findings of fact, conclusions of law, and a decree of dissolution. Two sections of the decree respectively divided the property among husband and wife as:

3.2 Property to be Awarded the Husband

The husband is awarded as his separate property the property set forth in Exhibit copy attached A [sic]. This exhibit is attached or filed and incorporated by reference as part of this decree.

The husband is awarded as his separate property the property set forth in the separation contract or prenuptial agreement executed by the parties on (date) Feb. 1, 2010. The separation contract or prenuptial agreement is incorporated by reference as part of this Decree. The prenuptial agreement or, pursuant to RCW 26.09.070(5), the separation contract is filed with the court.

The husband is awarded as his separate property the following property (list real estate, furniture, vehicles, pensions, insurance, bank accounts, etc.): See attachment.

3.3 Property to be Awarded to the Wife

The wife is awarded as her separate property the property set forth in Exhibit copy attached B [sic]. This exhibit is attached or filed and incorporated by reference as part of this decree.

The wife is awarded as her separate property the property set forth in the separation contract or prenuptial agreement referenced above.

The wife is awarded as her separate property the following property (list real estate, furniture, vehicles, pensions, insurance, bank accounts, etc.): See attachment.

CP at 77-78 (boldface omitted). The decree lacked any attachment. The parties, nonetheless, attached two signed pages to the findings of fact and conclusions of law. The first page read:

Marital Settlement Agreement AGREEMENT TO DISTRIBUTION OF ASSETS

WE (JOHN D. AND KATHLEEN M. GRANT) AGREE THAT KATHLEEN RECEIVES $178,000 AND OWNERSHIP AND ALL RIGHTS TO GRANT'S PIZZA PLACE. JOHN RECEIVES THE BALANCE OF THE ASSETS AND OWNERSHIP OF THE HOUSE. NOTE: THIS AGREEMENT DOES NOT INCLUDE PERSONAL PROPERTY WHICH WILL BE DIVIDED BASED ON OTHER METHODS AS AGREED.

METHOD OF DISTRIBUTION TO KATHY.

                             ________________________
                $$$ DUE TO KATHY                  $178,000
                                             ________________________
                WELLS FARGO — CHECKING
                (12/21/09)                        (20,000)
                WELLS FARGO — CD (MAT 3/15/10)   (31,000)
                LOAN RECEIVABLE — KT             (20,000)
                NOTE RECEIVABLE — PAYABLE ON
                DEMAND                            (107,000)
                BALANCE                                  0
                

CP at 73. The parties did not define or identify the personal property to be divided on other methods. Page two repeated page one, but, on page two, someone wrote "paid" next to the two Wells Fargo entries and "due" next to the loan and note receivable entries. CP at 74.

¶8 John Grant testifies that the parties attached a third page to the findings of fact, although our copy of the findings of fact omits any such attached page. The third page, according to John, explained how the parties reached the division of assets. The page read:

                 ASSET DISTRIBUTION
                                          $$$$$     KATHY     JOHN
                PERSHING — JOINT ACCT    120,000   60,000    60,000
                WELLS FARGO — CHECKING   32,000    16,000    16,000
                WELLS FARGO — CD         31,000    15,500    15,500
                WELLS FARGO SAVINGS       25,000    12,500    12,500
                LOAN RECEIVABLE — KT     20,000    10,000    10,000
                PERSHING — IRA           40,000    20,000    20,000
                WA STATE DEFERRED COMP    88,000    44,000    44,000
                GPP [Grant's Pizza Place] 100       100       0
                HOUSE                     100       0         100
                _________________________________________________
                TOTAL ASSETS              356,200   178,100   178,100
                                                  ____________
                $$$ DUE TO KATHY                    178,000
                                                  ____________
                WELLS FARGO — CHECKING (12/21/09)  (20,000) Paid
                WELLS FARGO — CD (MAT 3/15/10)     (31,000) Paid $31,600
                LOAN RECEIVABLE — KT               (20,000) Starting 6/1/2010
                NOTE PAYABLE ON DEMAND              (107,000) Starting 6/1/2010
                                                    _____________
                BALANCE                                    0
                                                    _____________
                WE AGREE THAT KATHLEEN RECEIVES $178,000 AND
                OWNERSHIP AND ALL RIGHTS TO GRANTS PIZZA PLACE. JOHN
                RECEIVES THE BALANCE OF THE ASSETS AND OWNERSHIP OF
                THE HOUSE
                

CP at 164. We assume that the entry for Washington State Deferred Compensation refers to an asset other than John's pension plan. At the time of the divorce, John Grant worked for the State of Washington and participated in the State's PERS pension plan. We lack any information as to the value of the PERS account at the time of the divorce. John Grant drafted all of the lists and divisions of property.

¶9 The litigation between the parties includes more than the dissolution action and this later partition suit. On May 31, 2013, Kathleen Grant moved in Clark County Superior Court for relief from the 2010 dissolution decree and alleged that she knew not of John's PERS pension at the time of dissolution. By agreement of the parties, the trial court dismissed the motion for relief from judgment.

¶10 Kathleen Grant did not...