Manary v. Anderson

• Decision Date: 17 January 2013
• Docket Number: No. 86776–3.,86776–3.
• Citation: 176 Wash.2d 342,292 P.3d 96
• Court: Washington Supreme Court
• Parties: Jeffrey MANARY, as the second successor trustee of the Homer L. Greene and Eileen M. Greene Revocable Living Trust, Petitioner, v. Edwin A. ANDERSON, as personal representative of the estate of Homer L. Greene, Respondent, Unknown John Does 1–5, Defendants.

176 Wash.2d 342

292 P.3d 96

Jeffrey MANARY, as the second successor trustee of the Homer L. Greene and Eileen M. Greene Revocable Living Trust, Petitioner,

v.Edwin A. ANDERSON, as personal representative of the estate of Homer L. Greene, Respondent,Unknown John Does 1–5, Defendants.

No. 86776–3.

Supreme Court of Washington,

En Banc.

Argued June 28, 2012.

Decided Jan. 17, 2013.

Thomas G. Burke, Burke Law Offices Inc., PS, Des Moines, WA, for Petitioner.

John M. Casey, Curran Law Firm, Kent, WA, Andrea Schiers, Seattle, WA, for Respondent.

FAIRHURST, J.

[176 Wash.2d 346]¶ 1 In this case, we are asked to decide whether Jeffrey Manary or Edwin A. Anderson is entitled to a decedent's interest in real property that had been deeded to a trust. Manary claims the interest as a successor trustee; his claim is based on the trust. Anderson claims the interest as a testamentary beneficiary; his claim is based on chapter 11.11 RCW, the Testamentary Disposition of Nonprobate Assets Act (Act).¹ The Act allows the “owner” of a “nonprobate asset” to dispose of the asset by will if the owner “specifically refer[s] to” the asset in his will. RCW 11.11. 020(1). When an owner complies with the Act, the owner's interest in the nonprobate asset belongs to the testamentary beneficiary named to receive it, notwithstanding any previously designated beneficiary. Id.

¶ 2 We hold that an owner complies with the Act when he specifically refers to a nonprobate asset in his will, even if he does not refer to the instrument under which the asset passes. Anderson is entitled to the decedent's interest in the property, but he is not entitled to attorney fees for answering the petition for review.

I. FACTS

¶ 3 In 1995, Homer L. and Eileen M. Greene, a married couple, entered into “The Homer L. Greene and Eileen M. Greene Revocable Living Trust Agreement” (Trust). Clerk's Papers (CP) at 44. Homer and Eileen ² served as trustors, grantors, and trustees. They named three beneficiaries.

¶ 4 The Property. Homer and Eileen funded the Trust by conveying the title of their community property residence to themselves as trustees and to all successor trustees. They retained the right to possess and manage the property rent free.

¶ 5 Revocability During Joint Life. Homer and Eileen declared the “Trust to be revocable during their joint lifetimes,” but they limited each trustor's power to amend or revoke the Trust “to the extent of such Trustor's community and separate property interests.” CP at 46. Accordingly, neither trustee had the power to amend or revoke the Trust during joint life “with respect to the other Trustor's community property interest or separate property interest.” Id.

¶ 6 Division of the Trust Estate. After the first spouse died, the surviving trustee was to divide the Trust into two separate trusts: the “Family Trust” and the “Survivor's Trust.” CP at 52. The Family Trust was to consist of the decedent spouse's interest in community and separate property, and the Survivor's Trust was to consist of the surviving spouse's interest in community and separate property. However, “[f]or purposes of administrative convenience,” the surviving trustee could “retain that amount passing to the Survivor's Trust in the trust estate originally established ... instead of distributing it to the Survivor's Trust.” CP at 53. In that case, “the remaining balance of the original Trust [would] become the ‘Survivor's Trust.’ ” Id.

¶ 7 Irrevocability/Revocability after the Death of One Spouse. The Family Trust was to be irrevocable, but the Survivor's Trust would remain revocable by the survivor. Even if the survivor's interest in the original Trust were to become the Survivor's Trust, the “rights of revocation, amendment, modification or withdrawal [would] continue to applyto the Survivor with respect to the Survivor's Trust.” CP at 54.

¶ 8 Irrevocability after the Death of Both Spouses. Homer and Eileen agreed that the entire Trust agreement would become irrevocable “[u]pon the death or incapacity of both of the Trustors.” CP at 47

¶ 9 In 1998, Eileen died ³ and Homer became the sole trustee of the Trust. He consulted with counsel but did not create a separate Family Trust or Survivor's Trust.

¶ 10 In 1999, Homer amended the Trust.⁴ He removed the original beneficiaries and named his sister, Alice,⁵ as sole beneficiary and first successor trustee.⁶ He also named his nephew, Manary, as second successor trustee. Homer did not amend or modify any of the Trust's terms regarding the property at issue here.

¶ 11 In 2002, Anderson, who had been acquainted with Homer and Eileen since 1956 and good friends with Homer since 1975, became Homer's companion and caretaker. He began living in a trailer parked in the driveway of the property. Anderson managed Homer's medications, drove him to doctor's appointments, and monitored his temperature and blood pressure as needed. He also did Homer's yard work, ran his errands, and assisted him with everyday tasks.

¶ 12 On November 4, 2004, Homer executed a last will and testament.⁷ He did not mention the Trust in the will, but he indicated his intent to give the property to Anderson. Specifically, after the form language “I give, devise and bequeath,” Homer wrote, “Real property, consisting of my home (ref: Tax # 3223–9085–09) at 18616 102nd Ave S.E. Renton, WA 98055 ... to Edwin A. Anderson.” CP at 101. Homer also named Anderson as alternate executor of his estate. Id.

¶ 13 In 2007, Homer died and Anderson took possession of the residence on the property. Anderson was later appointed personal representative of Homer's estate.

II. PROCEDURAL HISTORY

¶ 14 In October 2008, Alice instituted an action in King County Superior Court to quiet title and eject Anderson from the property. Anderson counterclaimed, also seeking to quiet title. Alice died in 2009. Manary was then appointed the second successor trustee and was substituted as plaintiff. Both parties submitted cross motions for partial summary judgment, claiming a right to Homer's interest in the property.

[176 Wash.2d 350]¶ 15 The trial court found for Manary. It concluded that Homer's attempted bequest was invalid because Homer failed to “either modify the Trust as to the Property or to acknowledge the Trust in ... his Will.” ⁸ CP at 243. According to the trial court, the property remained Trust property and Homer had no interest in it to convey to Anderson. The trial court quieted all title interests in the Trust and dismissed Anderson's counterclaims with prejudice.

¶ 16 The Court of Appeals found for Anderson. It noted, “Nothing in the statute requires Homer's will to mention the trust in order for RCW 11.11.020 to be effective.” Manary v. Anderson, 164 Wash.App. 569, 578, 265 P.3d 163 (2011). It held that the property was a “nonprobate asset,” declared Anderson the rightful owner, and reversed the trial court. Id. at 577, 265 P.3d 163.

¶ 17 Manary sought this court's review, which we granted. Manary v. Anderson, 173 Wash.2d 1023, 272 P.3d 851 (2012). Anderson seeks attorney fees for answering the petition for review.

III. STANDARDS OF REVIEW

¶ 18 Summary judgment is appropriate if the pleadings, affidavits, and depositions establish that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. CR 56(c); Jones v. Allstate Ins. Co., 146 Wash.2d 291, 300–01, 45 P.3d 1068 (2002). We review summary judgment orders de novo. Folsom v. Burger King, 135 Wash.2d 658, 663, 958 P.2d 301 (1998).

¶ 19 The meaning of a statute is a question of law we review de novo. State v. Breazeale, 144 Wash.2d 829, 837, 31 P.3d 1155 (2001). In interpreting a statute, our fundamental objective is to ascertain and carry out the legislature's intent. Dep't of Ecology v. Campbell & Gwinn, LLC, 146 Wash.2d 1, 9, 43 P.3d 4 (2002).

IV. ISSUES

A. Under the plain meaning of the Act, is Anderson entitled to Homer's interest in the property?

B. Do Manary's additional arguments overcome the plain meaning of the Act?

C. Is Anderson entitled to attorney fees for answering the petition for review?

V. ANALYSIS

¶ 20 Under former Washington law, “it [was] impossible for a person through a new will to modify non-probate asset arrangements.” S.B. Rep. on S.B. 6181, 55th Leg., Reg. Sess. (Wash.1998). But the Act, which was enacted in 1998, ⁹ allows the owner of a limited class of nonprobate assets to dispose of those assets by will. Mark Reutlinger, Washington Law of Wills & Intestate Succession 345 (Wash. State Bar Ass'n 2d ed.2006). The Act has three purposes: (1) to enhance testators' power to control the disposition of the assets that pass outside their wills, (2) to provide simple dispute resolution procedures regarding entitlement to such assets, and (3) to protect financial institutions or third parties having control of such assets and transferring them to duly designated beneficiaries. RCW 11.11.003. The provisions of the Act must be liberally construed to promote these purposes. RCW 11.11.005(1)(a).

¶ 21 Manary argues that the Act does not apply because the property is not a nonprobate asset, Anderson did not meet the Act's requirements, and the will bequest is generally insufficient. Anderson argues that the Act controls because the property is a nonprobate asset and Homer's specific bequest to Anderson supersedes any contrary provisions in the Trust. To resolve this case, we consider the plain meaning of the Act, Manary's arguments, and Anderson's request for attorney fees.

A. Under the Plain Meaning of the Act, Anderson Is Entitled to Homer's Interest in the Property

¶ 22 Statutory interpretation begins with a statute's plain meaning. Lake v. Woodcreek Homeowners Ass'n, 169 Wash.2d 516, 526, 243 P.3d 1283 (2010). If the meaning of the statute “is plain on its face, then the court must give effect to that plain meaning as an expression of legislative intent.” Campbell & Gwinn, 146 Wash.2d at 9–10, 43 P.3d 4. Our plain meaning inquiry focuses on the...