Lowe v. Lowe

• Decision Date: 13 August 2019
• Docket Number: c/w No. 35844-5-III,No. 35569-1-III,35569-1-III
• Court: Washington Court of Appeals
• Parties: AARON L. LOWE, Trustee and Beneficiary of the Donald E. Lowe Trust, Personal Representative, Appellant, v. LONNIE D. LOWE, individually and as Personal Representative of the Estate of Betty L. Lowe, deceased, Respondent.

AARON L. LOWE, Trusteeand Beneficiary of the Donald E. Lowe Trust, Personal Representative, Appellant, v. LONNIE D. LOWE, individuallyand as Personal Representative of the Estate of Betty L. Lowe, deceased, Respondent.

No. 35569-1-III

c/w No. 35844-5-III

COURT OF APPEALS OF THE STATE OF WASHINGTON DIVISION THREE

August 13, 2019

UNPUBLISHED OPINION

SIDDOWAY, J. — Betty Lowe's will, together with written instructions that her will recognized as enforceable, favored her son Lonnie, by authorizing him either to share valuable silver coins and bars that were part of her estate, or to retain them for himself. He retained them for himself. Lonnie's brother Aaron challenged Lonnie's retention of the silver coins and bars. The action below was the third such challenge.

In separate but now hereby consolidated appeals, (1) Aaron challenges the trial court's dismissal of his third challenge, and (2) Aaron and his trial lawyer, Robert Kovacevich, challenge the trial court's imposition of attorney fees as a sanction. For a third time, we affirm the trial court's rejection of Aaron's challenge to Lonnie's right to retain the silver. We reverse the trial court's award of all of Lonnie's attorney fees as sanctions but remand for consideration of more limited sanctions.

FACTS AND PROCEDURAL BACKGROUND

Betty Lowe died on October 1, 2011, survived by her sons Larry, Aaron and Lonnie, and by a number of grandchildren. In re Estate of Lowe, 191 Wn. App. 216, 222, 361 P.3d 789 (2015) (Lowe I). Her will named her son Lonnie as personal representative. Id. It directed that 80 percent of her estate be distributed equally among her sons and that the remaining 20 percent be distributed equally among her grandchildren. The will also provided, however, that Betty might execute separate written instructions for distributing tangible personal property, and as to any such property, those instructions would be honored. Id. Approximately four years before she died, Betty signed written instructions, prepared by her lawyer, directing that silver coins and bars accumulated years earlier by her late husband, Donald Lowe, be Lonnie's, "to distribute as he shall determine or retain for himself." Id. at 223.

Lonnie filed a petition in October 2011 for an order admitting Betty's will to probate and appointing him personal representative. Id. He elected to retain his mother's silver coins and bars for himself. Id. Within four months, Lonnie's brother Aaron brought suit against Lonnie individually and as the personal representative of Betty'sestate. Id. Having learned that Lonnie had also received some of the silver from Betty during her lifetime, Aaron advanced a number of legal theories, seeking to require Lonnie to return all of the silver to Betty's estate, for division among her sons and grandchildren. Aaron also sought an accounting and an order removing Lonnie as personal representative. Id.

In a deposition taking place on August 5, 2013, Aaron and his lawyer obtained a handwritten note signed by Donald sometime before his death in 2003 and questioned the lawyer who had handled the probate of Donald's estate about it. The note stated:

Dear Boys,

Larry, Aaron & Lon

I just wanted to write down some of my thoughts about after I'm gone.

I have asked Aaron to take responsibility in looking after your mother. It may be necessary to sell what ever [sic] he can to care for her. After she is gone, I want everything else divided between you boys or sold and the money divided between you.

I told Mike that he can live in the 737 Napa house as long as he takes care of Kelsey.

My life was awfully short & I didn't do much.

You are three of the finest boys anyone could have, & I'm so proud of you. I hope you can get along with each other.

Love, Dad

Don Lowe

Clerk's Papers (CP) at 13. The handwritten letter was allegedly discovered by Betty, who provided to it Lonnie, who then faxed it to the lawyer handling Donald Lowe's probate 10 years earlier, in August 2003.

In a proposed second amended and supplemental petition filed a month before the trial date, Aaron relied on the note to assert that it had been a mistake to distribute Donald's estate to Betty. It asked that Donald's estate be traced and distributed in accordance with the note's instructions. The trial court denied Aaron's motion for leave to file the second amended and supplemental petition.

At the conclusion of trial, the court denied all of the relief sought by Aaron. Aaron appealed the trial court's decision, which this court affirmed. A petition for review by the Supreme Court was denied. Lowe v. Lowe, 185 Wn.2d 1019 (2016).

Two months after this court's mandate in Lowe I, Lonnie filed a final report and petition for decree of distribution and obtained a hearing date. In re Estate of Lowe, No. 34751-6-III, slip op. at 5 (Wash. Ct. App. Jan. 23, 2018) (unpublished) (Lowe II), https://www.courts.wa.gov/opinions/pdf/321924.pub.pdf. Aaron filed a motion to continue the hearing and a motion to stay. Id. He argued that Betty's estate could not be closed until the claims he had proposed to add by his second amended and supplementalpetition were tried and resolved. Id. The trial court rejected Aaron's contention, ordered the estate closed, and discharged Lonnie as personal representative. Id.

Aaron again appealed. This court rejected his argument that because the trial court denied his 11th hour motion to amend in Lowe I, res judicata did not bar his late-asserted claims. The opinion explained:

There was no agreed or court-ordered reservation of claims here. Aaron simply moved to amend and supplement too late. "It is immaterial that the plaintiff in the first action sought to prove the acts relied on in the second action and was not permitted to do so because they were not alleged in the complaint and an application to amend the complaint came too late." RESTATEMENT [(SECOND) OF JUDGMENTS] § 25, cmt. b. As elaborated further in Section 26, comment b. of the Restatement,

It is emphasized that the mere refusal of the court in the first action to allow an amendment of the complaint to permit the plaintiff to introduce additional material with respect to a claim, even where the refusal of the amendment was urged by the defendant, is not a reservation by the court within the meaning of Clause (b). The plaintiff's ordinary recourse against an incorrect refusal of an amendment is direct attack by means of appeal from an adverse judgment.

Lowe II, slip op. at 10. Aaron again petitioned for review by the Supreme Court. His petition was again denied. In re Estate of Lowe, 190 Wn.2d 1024, 418 P.3d 791 (2018).

In July 2016, Aaron, characterizing himself as "Trustee and Beneficiary of the Donald E. Lowe Trust," filed the complaint that is the subject of this appeal. He assertedthat his father's handwritten note constituted a holographic living trust.¹ He asked the court to certify the "Donald E. Lowe Trust" as valid, appoint Aaron trustee, and order Lonnie to deliver to Aaron either the silver bars and coins or an amount equal to their value.

Lonnie moved to dismiss the action as barred by res judicata and collateral estoppel; alternatively, he argued that the action was barred by RCW 11.68.110(2) and the declaration of completion that Betty Lowe filed in the probate of Donald's estate in 2004. He also sought sanctions against Aaron and his lawyer, Mr. Kovacevich, relying on CR 11 and RCW 4.84.185.

The parties filed extensive evidence of the history of the prior lawsuits and appeals, and the trial court treated the motion as one for summary judgment. It granted the motion and dismissed Aaron's complaint. It later awarded Lonnie attorney fees against Aaron and Mr. Kovacevich, jointly and severally. Aaron timely appealed the order dismissing his action. He and Mr. Kovacevich later timely appealed the award of sanctions. We consolidated the appeals.

ANALYSIS

I. LONNIE WAS ENTITLED TO SUMMARY JUDGMENT

Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." CR 56(c). A material fact determines the outcome of the litigation in whole or in part. RockRock Grp., LLC v. Value Logic, LLC, 194 Wn. App. 904, 913, 380 P.3d 545 (2016). All reasonable inferences and facts are viewed in the light most favorable to the nonmoving party. Id. "'On appeal of summary judgment, the standard of review is de novo, and the appellate court performs the same inquiry as the trial court.'" Martin v. Gonzaga Univ., 191 Wn.2d 712, 722, 425 P.3d 837 (2018) (quoting Lybbert v. Grant County, 141 Wn.2d 29, 34, 1 P.3d 1124 (2000)).

Turning first to collateral estoppel, modernly referred to as issue preclusion, the Restatement (Second) of Judgments section 27 states the "general rule": "When an issue of fact . . . is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim." Nielson v. Spanaway Gen. Med. Clinic, Inc., 135 Wn.2d 255, 262, 956 P.2d 312 (1998) (internal quotation marks omitted). The purpose of issue preclusion is to promote judicial economy by avoiding relitigation of the same issue, to afford the parties the assurance offinality of judicial determinations, and to prevent harassment of and inconvenience to litigants. Hanson v. City of Snohomish, 121 Wn.2d 552, 561, 852 P.2d 295 (1993). The party asserting issue preclusion must demonstrate that (1) the issue in the prior adjudication was identical to the issue currently presented for review, (2) the prior adjudication was a final judgment on the merits, (3) the party against whom the doctrine is asserted must have been a party to or in privity with a party to the prior adjudication, and (4) barring...