International Tracers of America v. Hard

• Decision Date: 13 October 1977
• Docket Number: No. 44624,44624
• Citation: 570 P.2d 131,89 Wn.2d 140
• Parties: INTERNATIONAL TRACERS OF AMERICA, Appellant, v. Estate of Eric HARD, Minnie Johnson, Individually and as Administratrix of the Estate of Eric Hard, Svea Heehn, Esther Benson, and Hilda Shields, Each Individually, Respondents.
• Court: Washington Supreme Court

Page 140

89 Wn.2d 140

570 P.2d 131

INTERNATIONAL TRACERS OF AMERICA, Appellant, v. Estate of Eric HARD, Minnie Johnson, Individually and as

Administratrix of the Estate of Eric Hard, Svea

Heehn, Esther Benson, and Hilda Shields,

Each Individually, Respondents.

No. 44624.

Supreme Court of Washington, En Banc.

Oct. 13, 1977.

Buzzard & Glenn, P.S., Jerome L. Buzzard, Olympia, for appellant.

Bean, Gentry & Rathbone, Fred D. Gentry, Olympia, Layman, Mullin & Etter, Frank J. Gebhardt, Spokane, for respondents.

HOROWITZ, Associate Justice.

The principal issue here is the constitutionality of RCW 63.28.330, which places a 5 percent limit on fees a person can recover for locating property that he knows has already been reported or delivered to the Department of Revenue. ¹

Plaintiff-appellant International Tracers of America (Tracers) is a Florida corporation engaged in the business of locating heirs of decedents whose property would otherwise escheat to the state in which the property is located. On December 8, 1971, four heirs of Eric Hard (who died in Alaska) and Tracers entered into a contingent fee contract, signed in Minnesota, under which Tracers purportedly undertook to locate the assets of decedent Hard. The agreement drafted by Tracers, further provided that if "Tracers is able to succeed in securing control of assets of the Estate of Eric Hard, and, in the event a distribution of said assets is made to the undersigned heirs, then and in that event, we, the undersigned, agree to pay Tracers 40 percent of any amount which may be collected and distributed to the undersigned." None of the four heirs were or are residents of or domiciled in this state.

At the time the contract was entered into Tracers had known since 1970 that decedent died owning shares of stock worth approximately $23,000, the proceeds of which were being held by the state of Washington as a result of escheat proceedings in this state. The four heirs did not have this information.

In 1972 Minnie Johnson, one of the four signatory heirs, commenced probate proceedings in Thurston County, Washington, to administer and distribute decedent's assets to his heirs. She was appointed administratrix of the estate. Tracers filed no creditor's claim in the estate.

After the four heirs, including the administratrix, refused to pay Tracers its fees for its services, Tracers sued the four heirs and Minnie Johnson in her capacity as administratrix to recover its fees. Defendants answered raising certain affirmative defenses, including illegality of the contingency fee agreement, and counterclaimed for damages for harassment by Tracers in its efforts to collect the sums sued for. The trial court entered a judgment for Tracers against the four heirs (not the estate) but limited recovery to 5 percent of the ultimate distribution, and dismissed each defendant's counterclaim. Tracers appealed. Defendant did not cross appeal.

Plaintiff contends: (1) Washington law, including RCW 63.28.330 does not govern this case; (2) Tracers is entitled to recover against the administratrix of the Eric Hard estate as well as the four heirs; and (3) even if the Washington law applies, RCW 63.28.330 is unconstitutional and therefore plaintiff's recovery is not limited to the 5 percent awarded. We do not agree with these contentions and affirm the appealed judgment.

We agree with defendants and the trial court that the validity of the contract here is to be determined by the Washington law. Plaintiff contends that under Baffin Land Corp. v. Monticello Motor Inn, Inc., 70 Wash.2d 893, 425 P.2d 623 (1967) the "significant contacts" test determines the validity of the contract. In Baffin we held that under the significant contacts test the court should consider all the significant points of contact, including the place of contracting, place of negotiations, and place of performance. Plaintiff contends it is impossible to determine what state had the most significant contacts with the transaction and therefore Washington law does not govern, plaintiff not stating what other law it claims does govern. There are several reasons, however, which require use of Washington law.

First, no actual conflict between the law of Washington and the law of any other state claimed applicable is shown to exist. Without such a conflict, courts will not engage in a conflict of law analysis. B. Currie, Selected Essays on the Conflict of Law 176 (1963). There is no proof introduced as to the content of any foreign law claimed by Tracers to be applicable here. Nor did Tracers plead the law of any other state claimed to be applicable as required by RCW 5.24.040. Without such a pleading, the trial court was not required to take judicial notice of the law of any other state. RCW 5.24.010-. 070. In re Candell, 54 Wash.2d 276, 340 P.2d 173 (1959); SaveWay Drug, Inc. v. Standard Investment Co., 5 Wash.App. 726, 490 P.2d 1342 (1971). Without pleading or proof of applicability of foreign law, such law will be presumed to be the same as Washington's. In re Nelson's Estate, 85 Wash.2d 602, 606, 537 P.2d 765 (1975); Granite Equipment Leasing Corp. v. Hutton, 84 Wash.2d 320, 324, 525 P.2d 223 (1974); Norm Advertising, Inc. v. Monroe Street Lumber Co., 25 Wash.2d 391, 171 P.2d 177 (1946). See Byrne v. Cooper, 11 Wash.App. 549, 523 P.2d 1216 (1974).

We note in passing that other states have banned the type of business in which Tracers is engaged on the ground that the business constitutes the unauthorized practice of law or is otherwise void as against public policy. The Florida Bar v. Heller, 247 So.2d 434 (Fla.1971); Skinner v. Morrow, 318 S.W.2d 419 (Ky.1958); In re Rice's Estate, 24 Ohio Op.2d 379, 193 N.E.2d 566 (Ohio Prob. 1963).

Finally, we note the opinion in Baffin Land Corp. v. Monticello Motor Inn, Inc., supra, 70 Wash.2d at 900, 425 P.2d 623, in applying the significant contacts test, places great emphasis on the importance of place of performance. Cf. Restatement (Second) of Conflicts, § 202(2) (1971).

Assuming arguendo it is necessary to resort to the significant contacts test under Baffin to determine whether Washington law governs, that test is met here. Under the contract, Tracers was required to attempt to secure control of the assets of Hard's estate. At the time the contract was entered into, Tracers knew that Hard's assets were in the state of Washington and had been, or were in the process of being, escheated to the state of Washington. To secure the assets it was necessary to institute probate proceedings in Washington under Washington law to obtain control of those assets from the Washington State Department of Revenue, and to determine who the heirs were and what their net distributive shares should be. Under these facts, the place of performance was the most significant contact thus rendering Washington law applicable.

Tracers next contends the administratrix of the estate, in addition to the heirs, is liable on a quantum meruit basis for services allegedly rendered by Tracers to the estate to preserve its assets. Tracers claims either 40 percent of the distributive shares or an unspecified amount up to that figure. No contract was entered into by Tracers with the administratrix in her capacity as such. Indeed the contingency fee agreement was executed before the commencement of probate proceedings in Thurston County, and Tracers does not claim an express contract with decedent. Tracers claims, however, that the discovery of estate assets in Washington was a service necessary for the preservation of the Eric Hard estate giving rise to a claim against the estate.

To support its claim on the merits against the administratrix of the Eric Hard estate, Tracers relies on Wilder Grain Co. v. Felker, 296 Mass. 177, 5 N.E.2d 207 (1936) and Tucker v. Whaley, 11 R.I. 543 (1877), which we find distinguishable on their facts. These cases involve claims against an estate for cattle feed needed to prevent the loss of the cattle furnished between the dates of the death of their owner and the appointment of the administrator for the owner's estate. Thus, in Wilder the seller, after decedent's death and before the appointment of an administrator of decedent's estate, furnished the decedent's cattle with feed needed to prevent their loss. The court recognized the administrator, in his capacity as such, could be held liable on quasi contractual principles

only where the need is immediate, absolute and imperative in order to preserve the estate itself and where that need would otherwise remain unsatisfied. Nothing less will justify the intervention of a stranger thus to impose a charge upon the estate outside the regular course of administration. Merely that the service performed was desirable or in some degree beneficial to the...