In re Marriage of Crosetto

• Citation: 1 P.3d 1180,101 Wash.App. 89
• Decision Date: 09 June 2000
• Docket Number: No. 24008-4-II.,24008-4-II.
• Court: Court of Appeals of Washington
• Parties: In re the MARRIAGE OF James J. CROSETTO, Respondent, and Laurel E. Crosetto, Appellant.

1 P.3d 1180

101 Wash.App. 89

In re the MARRIAGE OF James J. CROSETTO, Respondent, and

Laurel E. Crosetto, Appellant.

No. 24008-4-II.

Court of Appeals of Washington, Division 2.

June 9, 2000.

Laurel E. Crosetto, Tacoma, pro se.

Ross Edwin Taylor, Terrence F. McCarthy, McCarthy, Holum, Causseaux & Rourke, Inc., Tacoma, for Respondent.

SEINFELD, J.

When this marriage dissolution case was previously before the Court of Appeals, the court concluded that it was necessary to remand the matter to the trial court for clarification of portions of the ruling. In re Marriage of Crosetto, 82 Wash.App. 545, 918 P.2d 954 (1996). Meanwhile, the original judge retired before the assigned trial date, and the parties agreed to allow a successor judge to make the necessary determinations based upon the record from the first trial. Further, the successor judge determined that he could make those findings without engaging in credibility determinations. Laurel Crosetto now appeals from the successor judge's findings, arguing that she was entitled to a new trial and that the trial court abused its discretion in making its findings. We affirm.

FACTS

Following the original trial, the court made the following relevant findings: (1) James Crosetto's real estate appraisal business had a value of $50,000; (2) the couple's community debts included a $14,000 IRS debt; and (3) Laurel Crosetto was entitled to be relieved of her obligation to pay child support. Crosetto, 82 Wash.App. at 552, 560, 918 P.2d 954. The only reasons the trial court provided for the child support deviation were "a disparity in earning capacity and ... substantial obligations of the wife to pay attorney's fees and other costs associated with mental health professionals hired by [her] during trial." Crosetto, 82 Wash.App. at 560, 918 P.2d 954. James Crosetto appealed these rulings. He asserted that the evidence established that the business had no goodwill and that its actual value was $5,000 — the value of its tangible assets plus accounts receivable. Crosetto,82 Wash.App. at 553,918 P.2d 954. He also asserted that neither the disparity in the parties' earning capacity nor Laurel Crosetto's voluntarily incurred debt provided a proper basis for a downward deviation from the child support schedule. Crosetto,82 Wash.App. at 559,918 P.2d 954.

At trial, the parties' experts had come to two very different conclusions with regard to the presence of goodwill.¹ James Crosetto's expert acknowledged that James Crosetto had a good reputation. Nonetheless, based upon James Crosetto's office-sharing arrangement, month-to-month lease, no advertisement in the Yellow Pages, and absence of routine dealings with the general public, he concluded that there was no goodwill. Crosetto, 82 Wash.App. at 554, 918 P.2d 954.

Laurel Crosetto's expert had determined there was goodwill and he valued it at $125,582. Crosetto, 82 Wash.App. at 554, 918 P.2d 954. He reached this conclusion by calculating the average of James Crosetto's gross income for four years, less operating expenses, and multiplying by 1.5 percent. Crosetto, 82 Wash.App. at 554, 918 P.2d 954. He stated that there was "inherent value because this man has an ability to create income, a stream of cash" and that this could be called either goodwill or "the value of the business."² Crosetto, 82 Wash.App. at 554-55, 918 P.2d 954.

Without specifically finding that goodwill existed, the trial court had determined that the value of the business was $50,000. Crosetto, 82 Wash.App. at 555, 918 P.2d 954. On appeal, this court reached the following conclusions:

We cannot determine from the record before us whether the trial court actually found "goodwill." Once the trial court finds goodwill, it must set forth on the record the factors and method used in reaching a finding of goodwill and its value. Because the trial court here did not state how it reached the valuation figure, we remand and direct the trial court to set forth the factors and methods used in valuation if it indeed finds goodwill exists.

. . . .

... Because we remand on the issue of goodwill, the trial court has the discretion to adjust the property division depending upon valuation of goodwill. The trial court must also allocate the IRS debt.

Crosetto, 82 Wash.App. at 555, 557, 918 P.2d 954 (citations omitted).

With regard to the child support issue, this court held:

Although there was evidence in the record to support the trial court's finding regarding earning capacity and Laurel Crosetto's expenses justifying a downward departure, these reasons do not merit a complete elimination of a support obligation.

The trial court abused its discretion in relieving Laurel Crosetto of any child support obligation. On remand, the trial court must follow the procedure for setting child support as discussed above, and set forth specific reasons for deviating from the standard calculation in written findings of fact.

Crosetto, 82 Wash.App. at 562-63, 918 P.2d 954.

After the remand of this case, James Crosetto noted the matter for a new trial setting and trial was scheduled for March 31, 1998. By that time, the original trial judge had retired from the bench. On March 23, Laurel Crosetto's newly retained attorney, Michael Harris, appeared and moved for a continuance, obtaining an order to shorten time so that the motion could be heard on the March 31 trial date.

On March 31, the parties agreed to have the matter set over and heard on the court's motion calendar. Michael Harris later submitted a declaration explaining these events, as follows:

On the 31st day of March, 1998, Mr. McCarthy [attorney for James Crosetto] and I appeared in court. Mr. McCarthy was prepared for trial. I was before the Court with Mrs. Crosetto asking for a continuance as I had recently been retained. After discussion with the Judge, we reached an agreement. The agreement was that this matter would be heard on the motion docket on the 1st day of May, 1998. An Order to this effect was signed by Judge Rudy Tollefson. Later that day an Order was entered which we had agreed would be entered by Mr. McCarthy. The agreement as to the content of the order was reached in the morning. Mr. McCarthy went back to his office, prepared the order, faxed it to me, and then had it entered that afternoon. The Order Continuing Trial Setting Date for Submission of Briefs and Authorizing the Filing of Les [sic] Pendens by Petitioner is in conformance with the agreement we reached in front of Judge Tollefson. I had a chance to review it before it was entered by Mr. McCarthy.

Clerk's Papers at 118-19.

The order to which Harris refers was entered on March 31 and states that "this matter is set over for determination on the motion docket on the 1st day of May, 1998." The court did not hear the matter on May 1; instead, it again continued the matter after Laurel Crosetto informed the assigned judge about a possible conflict of interest. The matter was then reassigned to the successor judge whose ruling is before us.³

On June 5, the successor judge heard James Crosetto's motion to implement the Court of Appeals decision. Laurel Crosetto's then new attorney, David Minikel, asserted that he was unaware that the parties had agreed to have the matter heard on the motion docket and argued that a new trial was necessary because the court needed additional testimony to make the requested findings.

The successor judge stated that he would determine the issues in the case based on the record before the original trial judge, basing this decision partly on the fact that the parties had agreed to this and partly on the finding that there were no credibility issues that required new testimony.

After reviewing the entire record, the successor judge ruled that James Crosetto's business had no goodwill value and, therefore, it was necessary to reallocate $45,000 in property. The court included the $14,000 IRS debt in that property and assigned it to James Crosetto. The court also determined that the record contained no reason to deviate from the child support worksheet. Consequently, it awarded back support to James Crosetto starting in 1994. In all, the court awarded 70 percent of the net assets to Laurel Crosetto and 30 percent to James Crosetto.

The successor judge's order setting out these awards also made a finding that the parties agreed to have the matter heard on the motion docket rather than at a trial de novo. Laurel Crosetto appeals.

I. DUTIES OF A SUCCESSOR JUDGE

Laurel Crosetto argues that she was entitled to a new trial after remand to a successor judge. She contends that the successor judge abused his discretion by entering findings of fact based upon the original record. James Crosetto responds that under the circumstances, where the parties agreed to the successor judge's procedure and credibility determinations were not necessary, it was appropriate for the successor judge to decide the issues based upon the original record.

Generally, a successor judge lacks authority to enter findings of fact on the basis of testimony heard by a predecessor judge. Tacoma Recycling, Inc. v. Capital Material Handling Co., 42 Wash.App. 439, 441-42, 711 P.2d 388 (1985) (successor judge following a remand had no authority to adopt the vacated findings and conclusions of the original judge); In re Welfare of Woods, 20 Wash. App. 515, 517, 581 P.2d 587 (1978) (termination of parental rights remanded for entry of additional findings; new trial required if trial judge has left the bench); Wold v. Wold, 7 Wash.App. 872, 877, 503 P.2d 118 (1972) (new trial required in dissolution action where findings of fact inadequate and trial judge no longer on the bench).

Statute and court rules contain similar provisions. RCW 2.28.030(2) states that a judge "shall not act" as a judge "[w]hen [the judge] was not present and sitting as a member of the court at the hearing of a matter submitted for its decision." But CR 63(b) contains a limited...