In the Matter of Estate of Goodfellow, No. 33594-8-II (Wash. App. 8/8/2006)
| Decision Date | 08 August 2006 |
| Docket Number | No. 33594-8-II,33594-8-II |
| Court | Washington Court of Appeals |
| Parties | In the Matter of the Estate of JEAN C. GOODFELLOW, Deceased. ALEC GOODFELLOW, Appellant, v. U.S. BANK NATIONAL ASSOCIATION, as Personal Representative of the Estate of Jean C. Goodfellow, Respondent. |
Appeal from Superior Court of Kitsap County. Docket No: 98-4-00621-7. Judgment or order under review. Date filed: 07/19/2005. Judge signing: Hon. Russell W Hartman.
Counsel for Appellant(s), John B Crosetto, Attorney at Law, 999 3rd Ave Ste 3000, Seattle, WA 98104-4043.
Shane a Moloney, Attorney at Law, 999 3rd Ave Ste 3000, Seattle, WA 98104-4043.
Robert a Stewart, Short Cressman & Burgess, 999 3rd Ave Ste 3000, Seattle, WA 98104-4088.
Counsel for Respondent(s), Greg Montgomery, Miller Nash LLP, 601 Union St Ste 4400, Seattle, WA 98101-1367.
Alec Goodfellow, one of two heirs, appeals a judgment that U.S. Bank did not breach its fiduciary duty as the personal representative for Jean C. Goodfellow, Alec's mother. We hold that the trial court did not err in concluding that U.S. Bank did not breach its fiduciary duty. We also hold that the trial court did not abuse its discretion in awarding attorney fees and costs, which were incurred by U.S. bank in its administration of the estate and reimbursed from the estate. We affirm.
Jean Goodfellow died in September 1998. In her will, she named her son, Alec Goodfellow, and her daughter, Beth Goodfellow, as beneficiaries. She appointed U.S. Bank of Washington as her personal representative and directed that U.S. Bank `shall have unrestricted nonintervention powers to settle my estate in the manner set forth in this Will.' Ex. 8 at 2. Furthermore, in paragraph 2.2 of the will, she directed that U.S. Bank: shall have full power, authority, and discretion to do all that may seem necessary or desirable to my Personal Representative in administering my estate including, without limitation, the authority at any time to make interim distributions of principal to those who are to receive the principal of my estate, and distribute all or any part of the income from the assets of my estate to or for the use of the beneficiaries of my estate in accordance with their respective interest; provided, that nothing contained in this clause shall require my Personal Representative to make any such distribution of principal or income.
With respect to her personal property, in paragraph 3.1 of the will, Mrs. Goodfellow directed U.S. Bank:
to make distribution of the items of tangible personal property as directed in the document. If I do not have such a writing in effect at the time of my death, or with regard to any items of personal property not specifically mentioned in the writing, distribution of said personal property shall be made to my children who are living at the time of my death, in equal shares, or if one of my children is deceased, then to the survivor of them. If any articles of personal property pass to more than one child of mine, such children shall have ninety (90) days from the date of my death to divide such property among themselves. If such children do not agree among themselves as to a division within said period, or if any child of mine is unable to make such a choice because he or she is under a legal disability, I give my Personal Representative authority to make an equitable division of such articles among such children. If there are articles of tangible personal property which the Personal Representative considers unsuitable for distribution, those articles may be sold and the proceeds added to my residuary estate.
In addition, upon Mrs. Goodfellow's death, her late husband's trust was to be divided into two trusts, one for Alec and one for Beth. U.S. Bank also served as trustee for these trusts.
Following their mother's death, Alec and Beth requested that U.S. Bank manage their trusts to maximize income. In response, U.S. Bank explained that the Goodfellow family home was the largest trust asset and that selling the family home would increase their trusts' income generating capability.
During this time, Beth and a family friend were living in the family home. Unable to reach an agreement with Beth as to when U.S. Bank would sell the family home, U.S. Bank asked Beth to pay rent for her continued occupancy of the family home.
But Alec and Beth balked at this request. Alec responded:
I have never asked {U.S. Bank} or anyone to kick Beth out of the house nor will I. My position is and always has been that Beth is welcome to stay in the house as long as it's a viable option and her staying there does not effect any decision for putting the home on the market for getting the best price for the house.
U.S. Bank defended its request, stating that `{we} explained to her that both you and she were in need of income, that it was going to take a long time to market the property, especially if the desire is to try to obtain twice the appraised value.' Ex. 11. U.S. Bank continued:
Beth indicated that her understanding was that the trusts are for both your benefit and that you both were in agreement that she could stay in the house until July. I said that I was not hearing that from you, but that if you both signed a letter agreeing to a later date, with the understanding that the income in the trusts would likely continue to be limited by the inability to invest the proceeds sooner, that we would certainly honor that for some reasonable period of time.
Shortly thereafter, Alec and Beth retained an attorney, who asked U.S. Bank to resign as trustee and personal representative. The attorney stated, `My clients would like the bank to agree to resign as both Executor of the Estate of Jean Goodfellow and as Trustee of the Testamentary Trust of Harry S. Goodfellow.' Ex. 13 at 3. On May 3, 1999, U.S. Bank responded:
This letter will confirm our conversation today regarding the resignation of U.S. Bank as Personal Representative of the Estate of Jean R. Goodfellow. My understanding is that you will split the draft nonjudicial dispute resolution agreement into a separate agreement for the estate and for the Harry S. Goodfellow T/U/W. This will permit us to transfer the trust in the near future while several pending matters are cleared up in the estate.
Ex. 27. On June 8, 1999, U.S. Bank resigned as trustee; Northwestern Trust became the successor trustee.
In the meantime, U.S. Bank had received permission from Alec, Beth, and their attorney to distribute the estate's charitable bequests. And by late 1999, U.S. Bank had distributed the estate's securities and real property. But U.S. Bank had not distributed the estate's personal property.
In March 2000, Northwestern Trust notified Alec and Beth that the family home had been sold. Near the end of the month, Alec rented a U-Haul truck and moved much of the estate's personal property out of the family home. While Alec placed some of this personal property in storage, he placed some of the more valuable personal property in his home. Sometime after March 2000, Beth moved the remaining personal property to her newly constructed home.
Alec and Beth never notified U.S. Bank that the family home had been sold, that they needed to move the personal property, or that they had agreed to a division of the estate's personal property. On the other hand, U.S. Bank never checked with Alec and Beth to see if the family home had been sold and never checked on the status of the estate's personal property during this time.
In January 2001, fire destroyed Alec's home and most of the personal property he had taken from the estate. Alec had no homeowner's insurance.
U.S. Bank had no knowledge of this fire until May 2001, when another of Alec's attorneys wrote U.S. Bank:
In January of this year Mr. Goodfellow's residence and all of its contents were destroyed by a fire. All financial and other records were also destroyed, along with valuable paintings and art work. As you know, it will be necessary to establish the amount of the casualty loss for federal income tax purposes. You can assist me in this matter by providing information relating to the estate.
In July 2001, U.S. Bank asked Alec and Beth: (1) to acknowledge that U.S. Bank had distributed the estate's personal property and (2) to release and discharge U.S. Bank as personal representative of the estate. Alec and Beth did not sign the documents.
Approximately three years later, with the advice of his accountant and attorneys, Alec filed his 2001 tax return and claimed a casualty loss for the personal property that he had removed and not insured, and that the fire had destroyed.
In December 2004, Alec filed a petition directing U.S. Bank to show cause why it should not be removed as personal representative. The parties stipulated that they would exclude the issue of proving the value of the property destroyed by the fire until a neutral third party could make that determination. The trial court denied Alec's petition, approved U.S. Bank's Final Report, and granted U.S. Bank's Petition for Decree of Distribution and Order of Discharge.1
Neither U.S Bank nor Alec disputes any findings of fact. Thus, the findings of fact are verities on appeal. Bennett v. Brandrud Mfg. Co., 1 Wn. App. 183, 184, 459 P.2d 977 (1969). This court is left to review de novo the questions of law and the conclusions of law. Sunnyside Valley Irrigation Dist. v. Dickie, 149 Wn.2d 873, 879-80, 73 P.3d 369 (2003). We determine whether the findings of fact in turn support the conclusions of law and judgment. Ridgeview Props. v. Starbuck, 96 Wn.2d 716, 719, 638 P.2d 1231 (1982).
Alec argues that the trial court erred in interpreting Mrs. Goodfellow's will. The trial court concluded the following:
1. Ms. Goodfellow's Will provides that the personal...
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