In Re The Estate Of Corrine Wegner

• Decision Date: 17 August 2010
• Docket Number: No. 39067-1-II.,39067-1-II.
• Parties: In re the ESTATE OF Corrine WEGNER, Deceased and Kenneth Wegner, Personal Representative, Respondents/Cross Appellants, v. Maxine Elaine TESCHE, Appellant/Cross Respondent.
• Court: Washington Court of Appeals

157 Wash.App. 554

237 P.3d 387

In re the ESTATE OF Corrine WEGNER, Deceased and Kenneth Wegner, Personal Representative, Respondents/Cross Appellants,

v.Maxine Elaine TESCHE, Appellant/Cross Respondent.

No. 39067-1-II.

Court of Appeals of Washington,Division 2.

Aug. 17, 2010.

Barry Christopher Kombol, Rainier Legal Center, Inc., PS, Black Diamond, WA, for Appellant/Cross-Respondent.

Hollis Herman Barnett, Attorney at Law, Shannon R. Jones, Campbell Dille Barnett Smith & Wiley, Puyallup, WA, for Respondents/Cross-Appellants.

PART PUBLISHED OPINION

ARMSTRONG, J.

¶ 1 When Corrine D. Wegner died, her principal asset was real estate she owned with Maxine Tesche in joint tenancy. Her personal representative believed that Wegner and Tesche intended the joint tenancy title to be a financing device that gave Tesche an equitable mortgage, not survivorship rights, and he sued Tesche in an attempt to acquire title to the property. The personal representative incurred fees and expenses investigating the issue, but, after concluding that the estate was unlikely to recover the property, dismissed the claims against Tesche. The personal representative then sought to recover the estate's fees and expenses from Tesche. Tesche appeals the superior court's award of attorney fees and other estate expenses and its denial of her motions to remove the personal representative, for damages, and for CR 11 sanctions. The estate and the personal representative cross appeal the amount of expenses awarded and the denial of administrative fees to the personal representative. Finding no reversible error, we affirm.

FACTS

¶ 2 Corrine Wegner died intestate on February 20, 2006. Her heirs were two sisters and Kenneth Wegner, her brother.

¶ 3 At the time of her death, Corrine's main asset was real property in Enumclaw that contained her residence and a rental home. ¹ She bought the property in 1994 with Tesche, and the two took title as joint tenants with right of survivorship. Tesche lived in Nevada and played no role in managing the property.

¶ 4 Kenneth was appointed personal representative of Corrine's estate with nonintervention powers. ² The value of Corrine's personal property was less than $10,000, and the real property was worth approximately $400,000, subject to a first and second deed of trust with a balance owing of $134,000.

¶ 5 Before her death, Corrine's family understood that she was the sole owner of the real property and that she had borrowed money from a friend for its purchase. Three months before her death, Corrine allegedly told her aunt that the person who lent her the money “had played a dirty trick on her” regarding her deed but that she hoped to pay off the loan from some anticipated real estate commissions. Clerk's Papers (CP) at 121, 326. After her death, the family discovered that the real property was in Corrine's and Tesche's names as joint tenants with right of survivorship.

¶ 6 In April 2006, Kenneth sued Tesche under the Trust and Estate Dispute Resolution Act (TEDRA), chapter 11.96A RCW, alleging (1) that Corrine and Tesche had created an equitable mortgage, (2) that they held the real property as tenants in common, (3) that an accounting of the real property expenses paid solely by Corrine was required, and (4) that Corrine's nonprobate real property asset should bear the reasonable pro-rata costs of the probate administration. That action was consolidated with the probate proceeding in 2007.

¶ 7 After filing the TEDRA action, Kenneth went through several boxes of Corrine's real estate records looking for documentation of the alleged comments to her aunt and the “true” nature of title to the real property. CP at 302. Failing to uncover any supporting evidence, the estate moved in August 2008 to voluntarily dismiss the three claims involving equitable mortgage, tenancy in common, and an accounting. The estate did not dismiss its claim that Corrine's interest in the real property, a nonprobate asset under Washington law, should be assessed its fair share of administrative expenses and creditor claims under RCW 11.42.085.

¶ 8 Kenneth then filed his final report as the estate's personal representative. He requested that the estate be closed and that Corrine's interest in the real property be used to pay the remaining creditor claims, plus administrative fees and expenses. More specifically, Kenneth requested that Corrine's interest be responsible for $23,335.15 in legal fees to the estate's attorney and $7,500 in administrator fees to him as personal representative, as well as approximately $10,000 in other claims and costs. His final report cited RCW 11.18.200 as authority for that request. Tesche opposed the estate's request for administrative expenses and fees, arguing that the property was left in a “horrible state” when she finally received possession, that RCW 11.18.200 did not support the request, and that there was no accounting for the two fee requests. CP at 61. She also moved for a citation against Kenneth so that the court could reassess his nonintervention authority, and for an award of damages based on her property damage and litigation costs. In a supporting memorandum, she stated that “this Court should inquire into C.R. 11 violations by P.R. Wegner and by his attorney.” CP at 80. Tesche did not move separately for CR 11 sanctions, and she never noted any motion for hearing.

¶ 9 Following the hearing on the final report, a pro tempore commissioner entered findings of fact stating that Corrine's alleged comments to her aunt required the estate's investigation, that there were reasonable grounds for the estate to sue Tesche, that the associated legal actions were reasonably incurred expenses in the estate's administration, and that the decedent's net one-half interest in the real property after deducting the secured interest was valued at approximately $133,000. The unpaid estate expenses, including attorney fees of $24,335.15 and fees to Kenneth of $7,500, totaled $39,925.17. The commissioner struck Kenneth's fee request because no written documentation supported it, and he determined that Corrine's interest in the real property, a nonprobate asset, would be responsible for only $16,212.58. Because Tesche is the beneficiary of the nonprobate asset, the order provided that she was personally liable to the estate for that amount and that the estate was entitled to a judgment lien against the real property in that sum, with interest. The commissioner's order concluded:

Kenneth Wegner's application for P.R. fees is denied; and that from the monies received on the judgement [sic] lien, the creditors will first be paid, and the attorney fees paid from the remaining funds. The court determines in equity that the non-probate property should be responsible for 1/2 of the expenses requested by petitioner, except as denied.

CP at 125-26. ³ ¶ 10 Tesche moved for revision without specifying which aspect of the commissioner's decision she was challenging, and the estate moved to revise that part of his decision denying Kenneth's fee request and reducing by half the amount of expenses awarded. The estate contemporaneously filed a declaration explaining Kenneth's request for $7,500 in fees. At the revision hearing, Tesche argued that her motions for damages and a citation were properly before the court, and she argued that her motion for CR 11 sanctions had not been heard and should be scheduled “unless the Court is prepared to enter a ruling today in respect to my motions ... for removal and citation and ... attorney's fees.” Report of Proceedings at 36-37. The superior court denied both parties relief, ordering that “all motions for revision including oral motions are hereby denied, and the Commissioner's order remains in full force and effect.” CP at 130.

¶ 11 Tesche appeals the trial court's award of attorney fees and its denial of her oral motions, and the estate and Kenneth cross appeal the court's decision to reduce the award of expenses and deny Kenneth fees.

ANALYSIS

Litigation Expenses Under RCW 11.18.200

¶ 12 On revision, the superior court reviews the commissioner's findings of fact and conclusions of law de novo. In re Estate of Wright, 147 Wash.App. 674, 680, 196 P.3d 1075 (2008), review denied, 166 Wash.2d 1005, 208 P.3d 1124 (2009). We review the superior court's decision, not the commissioner's decision. Wright, 147 Wash.App. at 680, 196 P.3d 1075. Generally, we consider whether the superior court abused its discretion, which we will find only if the decision rests on unreasonable or untenable grounds. In re Marriage of Griffin, 114 Wash.2d 772, 779, 791 P.2d 519 (1990). The first issue presented here, however, is one of statutory construction, which we review de novo.

Rettkowski v. Dep't of Ecology, 128 Wash.2d 508, 515, 910 P.2d 462 (1996).

¶ 13 Both parties argued before the superior court that RCW 11.18.200 was the controlling statute; it provides in part: ⁴

(1) Unless expressly exempted by statute, a beneficiary of a nonprobate asset that was subject to satisfaction of the decedent's general liabilities immediately before the decedent's death takes the asset subject to liabilities, claims, estate taxes, and the fair share of expenses of administration reasonably incurred by the personal representative in the transfer of or administration upon the asset. The beneficiary of such an asset is liable to account to the personal representative to the extent necessary to satisfy liabilities, claims, the asset's fair share of expenses of administration, and the asset's share of estate taxes[.]

(2) The following rules govern in applying subsection (1) of this section:

...

(b) A beneficiary of property held in joint tenancy form with right of survivorship ... takes the property subject to the decedent's liabilities, claims, estate taxes, and administration expenses as described in subsection (1) of this section to the extent of the decedent's beneficial ownership interest in...