Kitsap Bank v. Denley

Decision Date05 November 2013
Docket NumberNo. 43282–0–II.,43282–0–II.
Citation177 Wash.App. 559,312 P.3d 711
CourtWashington Court of Appeals
PartiesKITSAP BANK, a Washington Financial Institution, Plaintiff, v. Gail DENLEY, as Personal Representative of the Consolidated Estates of Helen M. Correll and James F. Correll, Appellant, Charlena M. Lanterno, Respondent, Bank of America, a Washington Financial Institution, Defendant.

OPINION TEXT STARTS HERE

Robert Jason Henry, Lasher Holzapfel Sperry & Ebberson, PLLC, Howard Mark Goodfriend, Smith Goodfriend PS, Seattle, WA, for Appellant.

Brian Matthew King, Ingrid Linnea Daun McLeod, Davies Pearson, P.C., Tacoma, WA, for Respondent.

WORSWICK, C.J.

¶ 1 The Estate of Helen Correll (the Estate) challenges Charlena Lanterno's ownership of the funds from Helen Correll's checking account for which Lanterno was named the payable on death (POD) beneficiary based on a claim of undue influence. The trial court granted Lanterno's summary judgment motion. Because the trial court properly determined that Lanterno was entitled to summary judgment as to the undue influence claim and did not abuse its discretion in awarding Lanterno costs and attorney fees, we affirm.

FACTS

¶ 2 In 1993, Lanterno was employed at Washington Mutual Bank (now J.P. Morgan Chase) where Correll was a customer. Correll and Lanterno became close friends because of the support Correll provided Lanterno after Lanterno's husband died. From 1999 to 2011, Lanterno and Correll had dinner approximately once a week and lunch on weekends. Lanterno also regularly visited Correll at her home.

¶ 3 Correll also maintained accounts at the Silverdale branch of Kitsap Bank. In November 2010, April Ihde, a senior financial service representative for Kitsap Bank, spoke to Correll over the phone. During the call, Correll told Ihde that she wanted to change the beneficiaries to her Kitsap Bank accounts because she wanted to make sure that the money was left to her friends whom she considered her family. Ihde told Correll what information the bank would need to change the beneficiaries on her accounts.

¶ 4 In December 2010, Ihde received a hand written letter from Correll in the mail. The letter stated that the prior beneficiary of the account, Correll's brother, Blaine Wiseman, should be removed and the beneficiary should be changed to Lanterno. The letter contained Lanterno's address, phone number, date of birth, and social security number. After receiving the letter, Ihde called Correll to confirm that she wanted Lanterno to be named the beneficiary of her account. Correll confirmed her request. Ihde noted that during the conversation Correll was of sound mind and was clear about her request. Correll reiterated that she wanted to make sure that none of her family members received her money, and she wanted to make sure that it was left for her friends that have been there for her.” Clerk's Papers (CP) at 94.

¶ 5 In December 2010, Lanterno dropped off a folder of documents at Kitsap Bank for Correll. The folder contained deposit slips, signature cards, and POD designations for three other of Correll's friends; however, Lanterno did not know the content of the documents at the time that she delivered the folder. At the same time, Lanterno dropped off a $400,000 check for Correll. Three hundred sixty-five thousand dollars was deposited into the Kitsap Bank account for which Lanterno was the POD beneficiary. The remainder of the money was split between three other accounts.1

¶ 6 In January 2011, attorney John Mitchell prepared a new will for Correll. Mitchell also prepared a durable power of attorney designating Lanterno as Correll's attorney in fact. Mitchell and his legal assistant met with Correll in person to sign the documents. At the time Mitchell met with Correll he observed, She was completely coherent, knew exactly what she was doing.” CP at 81.

¶ 7 Correll died on February 23, 2011. In April, Gail Denley, the personal representative of the Estate, informed Lanterno that she was the POD beneficiary of Correll's account. Until that time, Lanterno did not know that she was the designated beneficiary of Correll's account. On April 8, Lanterno met with Ihde about the account. Kitsap Bank issued Lanterno a cashier's check for the balance of the account: a little more than $400,000. Lanterno deposited the funds into her personal Bank of America checking account.

¶ 8 On April 14, Denley contacted Kitsap Bank and alleged that the funds in the checking account were improperly distributed to Lanterno because of fraud. Based on this allegation of fraud, Kitsap Bank filed a motion for a temporary restraining order under RCW 30.22.2102 enjoining release of the funds, and later filed a complaint requesting a permanent restraining order. All parties stipulated to a restraining order freezing the funds until “authorized or directed by a court of proper jurisdiction.” CP at 20. Lanterno filed an answer to Kitsap Bank's complaint. The Estate filed an answer and cross claim against Lanterno alleging a claim of undue influence.

¶ 9 Lanterno filed a motion for summary judgment alleging she was entitled to have the permanent restraining order dismissed and an order declaring that she was the legal owner of the funds because the Estate's claim to the funds was time barred by the statute of limitations in RCW 11.11.070 and the Estate's undue influence claim failed as a matter of law. The Estate responded that RCW 11.11.070's time bar did not apply and there were genuine issues of material fact related to whether the designation of Lanternoas the designated POD beneficiary was void because of undue influence.

¶ 10 The trial court granted Lanterno's motion for summary judgment, ruling that the Estate's claim was time barred by RCW 11.11.070 and, alternatively, ruling that the Estate's undue influence claim failed as a matter of law. 3 The order dissolved the permanent restraining order and declared that Lanterno was the legal owner of the funds. The trial court also awarded Lanterno attorney fees under RCW 11.96A.150. The Estate appeals.

ANALYSIS
I. Summary Judgment Standard for Undue Influence

¶ 11 We review a trial court's order granting summary judgment de novo. Torgerson v. One Lincoln Tower, LLC, 166 Wash.2d 510, 517, 210 P.3d 318 (2009). Summary judgment is appropriate if the pleadings, affidavits, depositions, and admissions on file demonstrate the absence of any genuine issues of material fact, and the moving party is entitled to judgment as a matter of law. CR 56(c). A material fact is one on which the outcome of the litigation depends in whole or in part. Atherton Condo. Apartment–Owners Ass'n Bd. of Dirs. v. Blume Dev. Co., 115 Wash.2d 506, 516, 799 P.2d 250 (1990).

¶ 12 In a summary judgment motion, the moving party bears the initial burden of showing the absence of an issue of material fact. See, e.g., LaPlante v. State, 85 Wash.2d 154, 158, 531 P.2d 299 (1975). “If the moving party is a defendant and meets this initial showing, then the inquiry shifts to the party with the burden of proof at trial, the plaintiff. If, at this point the plaintiff ‘fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial,’ then the trial court should grant the motion.” Young v. Key Pharm. Inc., 112 Wash.2d 216, 225, 770 P.2d 182 (1989) (footnote omitted) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)). [A] complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial.” Celotex, 477 U.S. at 323, 106 S.Ct. 2548.

¶ 13 The general principles of summary judgment are supplemented by additional principles when a party claims undue influence. The determination of undue influence is a mixed question of fact and law. In re Trust and Estate of Melter, 167 Wash.App. 285, 300, 273 P.3d 991 (2012). In Melter, Division Three of this court stated,

When a challenged factual finding is required to be proved at trial by clear, cogent, and convincing evidence, we incorporate that standard of proof in conducting substantial evidence review. A party claiming undue influence must prove it by clear, cogent, and convincing evidence. In re Estate of Eubank, 50 Wash.App. 611, 619, 749 P.2d 691 (1988). When such a finding is appealed, the question to be resolved is not merely whether there is substantial evidence to support it but whether there is substantial evidence in light of the “highly probable” test. In re Welfare of Sego, 82 Wash.2d 736, 739, 513 P.2d 831 (1973); [In re Estate of Riley, 78 Wash.2d 623, 640, 479 P.2d 1 (1970) ] (recognizing that [e]vidence which is ‘substantial’ to support a preponderance may not be sufficient to support the clear, cogent, and convincing” standard). We still view the evidence and all reasonable inferences in the light most favorable to the prevailing party, Woody v. Stapp, 146 Wash.App. 16, 22, 189 P.3d 807 (2008) and, as in all matters, defer to the trier of fact on issues of credibility.

167 Wash.App. at 301, 273 P.3d 991 (second alteration in original). The same principle applies to summary judgment, and the party bearing the burden to prove the undue influence claim at trial must present sufficient evidence to make it highly probable that the undue influence claim will prevail at trial. In re Estate of Jones, 170 Wash.App. 594, 603–04, 287 P.3d 610 (2012). A trial court may grant a summary judgment motion to dismiss if no rational trier of fact, viewing the evidence in the light most favorable to the nonmoving party, could find clear, cogent, and convincing evidence on each element. In re Dependency of C.B., 61 Wash.App. 280, 285, 810 P.2d 518 (1991).

¶ 14 Here, the Estate bears the burden of proving undue influence by clear, cogent, and convincing evidence; Lanterno does not bear the burden of disproving the Estate's claim of undue influence. Jones, 170...

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