In the Matter of The EState W. Haviland.Mary Haviland v. Haviland

• Decision Date: 11 July 2011
• Docket Number: No. 64303–7–I.,64303–7–I.
• Citation: 162 Wash.App. 548,255 P.3d 854
• Court: Washington Court of Appeals
• Parties: In the Matter of the ESTATE OF James W. HAVILAND.Mary Haviland, George Paul Cook, and Robert Van Citters, Appellants,v.Donald Haviland, Martha Clauser, and Elizabeth Haviland, Respondents.

162 Wash.App. 548

255 P.3d 854

In the Matter of the ESTATE OF James W. HAVILAND.Mary Haviland, George Paul Cook, and Robert Van Citters, Appellants,

v.Donald Haviland, Martha Clauser, and Elizabeth Haviland, Respondents.

No. 64303–7–I.

Court of Appeals of Washington, Division 1.

July 11, 2011.

Ladd B. Leavens, William Kennedy Rasmussen, Davis Wright Tremaine LLP, Seattle, WA, for Appellants.Suzanne Churchwell Howle, Carol S. Vaughn, Thompson & Howle Downtown Ofc., Seattle, WA, for Respondents.Richard L. Furman, Jr., Aiken, St. Louis & Siljeg, P.S., Seattle, WA, for Administrator of Estate.LEACH, J.

[162 Wash.App. 551] ¶ 1 Mary Haviland appeals a trial court's decision invalidating her deceased husband's will as the product of her undue influence. Mary ¹ claims that the trial court should not have applied the factors identified in Dean v. Jordan ² because they “have no meaningful application between a husband and wife.” She also assigns error to the court's findings of fact and conclusions of law. Because our Supreme Court has applied Dean to analyze a claim of a spouse's undue influence, the trial court did not err by applying it here. And because substantial evidence in the record supports the trial court's written findings of fact and the conclusions that flow from them, we find no error and affirm.

FACTS

¶ 2 Haviland was born on July 18, 1911. He enjoyed a long and distinguished medical career. From the 1940s to the 1970s, he was a leader at the University of Washington School of Medicine, serving as an assistant dean, a clinical professor, and an associate dean, while maintaining a successful private medical practice. In 1962, he cofounded the Northwest Kidney Centers. Haviland and his first wife, Marion, had four children together.

¶ 3 When Marion died in 1993, the couple's assets were distributed according to the James W. Haviland and Marion B. Haviland Revised and Restated Revocable Trust, dated June 26, 1990 (“the 1990 trust agreement”). A primary purpose of this trust was “to provide common protection to the trustors against the effects of age and their increased susceptibility to the suggestions of others.” ³

¶ 4 Pursuant to the 1990 trust agreement, $600,000 of Marion's separate property funded a Credit Shelter Trust, Haviland's separate property and his half of the community property funded a Survivor's Trust, and the balance of Marion's separate property funded a Marital Trust. Upon Marion's death, the Credit Shelter Trust and Marital Trust became irrevocable, although Haviland could withdraw 100 percent of the principal from the Marital Trust. The Survivor's Trust remained revocable. The Credit Shelter Trust provided that upon the surviving spouse's death, the three trusts would continue for the benefit of the Haviland children and grandchildren until the death of all the children or until the youngest grandchild turned 30, whichever occurred later. Any remainder would be distributed to charitable beneficiaries.

¶ 5 In 1996, while recuperating at Providence Hospital from a leg injury, then 85–year–old Haviland met then 35–year–old Mary, a hospital nurse assistant. Haviland and Mary continued to see each other after his release from the hospital. A short time later, Haviland gave $10,000 to Mary to help pay for her education and living expenses. Three months later, Haviland agreed to pay $100,000 toward Mary's educational expenses and an additional $300,000 to $350,000 as a “nest egg.” Another three months later, Haviland created the James W. Haviland Living Trust (“Living Trust”), naming himself as the beneficiary during his lifetime. Upon his death, the trust was to pay up to $500,000 to Mary for her education and living expenses and distribute the balance, if any, according to the 1990 trust agreement.

¶ 6 Haviland and Mary married in August 1997. The couple executed a prenuptial agreement that maintained the separate nature of Haviland's property. According to this agreement, Haviland had assets valued at more than $3 million, including real property on Shaw Island, Bremerton, and Canim Lake plus retirement accounts, the Survivor's Trust, charitable remainder trusts, the Living Trust, and various bank accounts. He also received substantial income from the trusts that he and Marion had established. Mary had negligible assets.

¶ 7 The following year, Haviland removed the limit on Mary's inheritance under the Living Trust, thereby eliminating the Survivor's Trust as the remainder beneficiary of that trust. Then, in 1999, Haviland transferred $765,000 from the Survivor's Trust to the Living Trust. Haviland's children were the remainder beneficiaries of the Survivor's Trust; Mary was the remainder beneficiary of the Living Trust.

¶ 8 The following year, Haviland amended the Living Trust to add Mary as a cotrustee. Haviland remained the sole beneficiary of that trust, and he continued to fund it with his separate property, the only source of funds for that trust. After this amendment, Haviland and Mary jointly approved all transactions relating to the Living Trust.

¶ 9 Over the course of their marriage, millions of dollars of Haviland's separate assets were transferred from the Living Trust into the couple's joint checking account, Mary's separate checking account, or Mary's separate line of credit. In turn, bank statements document the withdrawal of millions of dollars from the joint checking account. The trial court found little evidence as to the ultimate purpose for which the money withdrawn from the joint checking account was used. Haviland also conveyed two parcels of his separate real property to Mary as her separate property. In addition, Haviland's retirement accounts were cashed in, and substantial sums of money were gifted to Mary's children from a previous marriage and to other designees. Haviland did not make comparable gifts to his own children.

¶ 10 Meanwhile, Haviland's physical health substantially deteriorated. In 2002, Haviland changed primary care physicians and indicated on the new patient registration form that he was having memory problems. Mary also filled out a new patient registration form for Haviland identical to the one Haviland completed, except she omitted any indication of his memory impairment. The new physician testified that he likely relied on the form Mary provided because that form contained that physician's signature. This physician did not evaluate Haviland's mental state at that time.

[255 P.3d 859 , 162 Wash.App. 555]

¶ 11 In 2005, Mary quit her job to care full time for Haviland. Mary explained that Haviland began refusing care from Mary's daughter, who had been hired to care for Haviland while Mary was at work. Mary reported that

[Haviland] would go all day without eating or exercising in my absence. Also, [Haviland] began falling as he attempted to do things for himself that were beyond his physical strength and ability, and his skin integrity became compromised as he refused to use the toilet unless I was there to assist him. Within a short period of time, he became more-and-more irritated and disoriented simply because I was not there to care for his needs.

Mary claimed that these symptoms abated within two weeks of her staying home to care for Haviland.

¶ 12 Before his marriage to Mary, Haviland was known as a “frugal” man, who made generous gifts to education, the arts, and charitable organizations. During his marriage to Mary, he made four revisions to his estate plan. Each change resulted in a greater portion of his estate going to Mary and less going to his children and designated charities.

¶ 13 The last major revision occurred in 2006, when Mary phoned Alan Kane, an attorney at K & L Gates LLP, to advise him that Haviland wished to change his will. After the phone call, Mary typed a letter to Kane and enclosed a copy of Haviland's 2002 will with requested revisions. Mary's handwritten revisions, initialed by Haviland, provided that (1) she would inherit the personal property in the Mercer Island residence, previously given to Haviland's children; (2) the remainder of Haviland's estate would pass to the Living Trust for Mary's benefit and not to the Credit Shelter Trust; (3) $55,000 of the previous $105,000 given to specific individuals and charities would be eliminated; and (4) certain waiting periods would be reduced from four months to two months. These changes effectively disinherited Haviland's children, leaving them with only a right of first refusal for the Shaw Island residence.

¶ 14 Three days before Haviland signed the 2006 will, Mary took him to his physician. This was his first visit with his physician since 2003. Mary informed the physician that Haviland's “mentation was good.”

¶ 15 On the day of the will signing, Mary brought Haviland to Kane's office. Kane testified that he met with Haviland for five minutes before the will signing but that he did not discuss with him his family, the objects of his bounty, or ask Haviland questions about the nature and extent of his estate. Kane recalled having last met with Haviland in 2002, and Kane noticed a moderate decline in Haviland's mental functioning. According to Kane, the only thing Haviland said during this meeting was “yes” in response to questions about the signing. Nevertheless, Kane testified to his opinion that Haviland possessed testamentary capacity.

¶ 16 By 2007, Haviland's mental condition deteriorated to the point that he could not recognize Mary 75 percent of the time. On November 6, Haviland visited the emergency room for dehydration. The emergency room consultation report describes Haviland as suffering from advanced dementia. A few days later, Mary prepared a request, signed by Haviland, to pay his debts, including debts owed jointly with Mary, with principal from the Credit Shelter Trust. The trust manager denied this request. Haviland died approximately one week later.

¶ 17 After the court admitted Haviland's 2006 will to probate, three of...