Matter of Estate of Ginsberg, No. 51994-8-I (Wash. App. 12/29/2003)
| Decision Date | 29 December 2003 |
| Docket Number | No. 51994-8-I,51994-8-I |
| Court | Washington Court of Appeals |
| Parties | In the Matter of the Estate of MICHAEL D. GINSBERG. MELISSA GINSBERG, Individuall as Personal Representative of the Estate of Michael D. Ginsberg, deceased, Appellant, v. CARL GULLEDGE and MELODY GULLEDGE, Respondents. |
Appeal from Superior Court of King County. Docket No: 01-4-05243-5. Judgment or order under review. Date filed: 02/12/2003.
Counsel for Appellant(s), David T Hasbrook, O'Shea Barnard Martin PS 10900 NE 4th St Ste 1500, Bellevue, WA 98004-5844.
Counsel for Respondent(s), James Philip Solimano, Hagens Berman LLP, 1301 5th Ave Ste 2900, Seattle, WA 98101-2609.
Melissa Ginsberg, acting individually and as a personal representative of the estate of Michael Ginsberg, appeals the order dismissing her case. She contends the trial court erred by ruling that she failed to state a claim, converting the dismissal motion to a summary judgment motion without allowing discovery, and failing to require mediation. The trial court correctly ruled that mediation was not required given its dismissal ruling. But because Ginsberg's petition alleged sufficient facts to state a claim, the court erred by dismissing the case.
In September 2001, Michael Ginsberg (Michael) committed suicide. Sometime later, Michael's wife Melissa Ginsberg (Melissa) discovered that Michael had operated an illegal investment scheme with his Microsoft colleagues beginning in 1995. Respondent Carl Gulledge was one of the investors. Over the course of three years, Michael wrote Gulledge three checks totaling $623,184. Some of the checks were to repay principal, and some were for profit on investments. In September 1998, he paid $29,620; in April 1999, he paid $283,668; and in November 2000, he paid $309,896. These checks were each written from a joint checking account that Michael shared with Melissa. Of approximately 15 investors, only Gulledge and one other received any payment of principal or profit. The remaining investors instituted an action against the estate, which Melissa eventually settled.
In December 2002, Melissa filed a Petition for Relief against Gulledge and his wife (collectively Gulledge). The petition alleged that Michael was employed and highly compensated by Microsoft, had operated an unsuccessful investment scheme, commingled funds obtained from the investment scheme with community funds, and paid Gulledge approximately $600,000 by personal check as part of the investment. The petition further alleged that Michael maintained and directed all household financial affairs at his office, Melissa only learned of the investment scheme after Michael's death, and she did not agree or volunteer to make any of the payments to Gulledge. Based on these facts, Melissa claims that Gulledge was unjustly enriched since he was paid with funds taken from the Ginsbergs' marital community.
In January 2003, Gulledge moved to dismiss the case under CR 12(b)(6). Two weeks later, Melissa filed a notice of mediation based on the Trust and Estate Dispute Resolution Act, and Gulledge objected. On February 12, 2003, the trial court dismissed the case, ruling that Melissa failed to state a claim upon which relief can be granted. Melissa appeals.
Under CR 12(b)(6), a complaint can be dismissed for `failure to state a claim upon which relief can be granted{.}'1 A CR 12(b)(6) dismissal is a question of law and is reviewed de novo.2 A court may only order dismissal under this rule if it appears beyond doubt that the plaintiff can prove no set of facts which would justify recovery.3 A plaintiff's factual allegations are presumed to be true, and a court may consider hypothetical facts.4 Motions to dismiss under CR 12(b)(6) `should be granted only `sparingly and with care.''5
Here, the trial court found that Melissa failed to state a claim for unjust enrichment. A respondent is unjustly enriched when he or she profits at the expense of another, contrary to equity.6 In addition, `the plaintiff cannot be a mere volunteer.'7 `{U}njust enrichment and liability only occur where money or property has been placed in a party's possession such that in equity and good conscience the party should not retain it.'8 For an unjust enrichment claim to succeed, the enrichment must be unjust under the circumstances and as between the two parties.9
Assuming Melissa's allegations are true and `considering all conceivable facts in support of them,'10 she has stated sufficient facts to defeat a CR 12(b)(6) motion. She alleges that Michael's investment scheme failed, that he paid Gulledge $600,000, and that he was highly compensated by his employer. Because the investment scheme failed, we can assume that Michael relied on his considerable salary (which is community property11) to pay Gulledge. Melissa did not know of or agree to this use of their community property, and there is no reason to assume Michael was acting in the marital community's interest when he paid Gulledge over $600,000.12 These allegations are sufficient to state a claim for unjust enrichment, and the trial court erred by dismissing the case.
Gulledge contends that he was a good faith investor who received funds from what he believed was a legitimate investment. But `{i}t is not necessary in order to create an obligation to make restitution or to compensate, that the party unjustly enriched should have been guilty of any tortious or fraudulent act.'13 Gulledge also asserts that Melissa is seeking a constructive trust. A constructive trust is a remedy for unjust enrichment, but Melissa has not requested this remedy. Gulledge maintains constructive trusts may only be imposed when there is evidence of some wrongdoing or ill intent. Even if a constructive trust were the only remedy for unjust enrichment, a court may impose a constructive trust where there is wrongdoing or in circumstances unrelated to fraud or undue influence,14 such as "where the retention of the property would result in the unjust enrichment of the person retaining it."15 Thus, even if Melissa does seek a constructive trust, Gulledge's claim to have been a good faith investor may not bar that remedy if he was unjustly enriched.
Finally, even if some allegation of wrongdoing were required for an unjust enrichment claim, Melissa satisfied that requirement by alleging that Gulledge may have collaborated with Michael in the illegal investment scheme. We are to consider `all conceivable facts' in support of Melissa's allegations,16 including hypothetical facts.17 This is so even if the facts are presented for the first time on appeal.18 `Neither prejudice nor unfairness is deemed to flow from this rule, because the inquiry on a CR 12(b)(6) motion is whether any facts which would support a valid claim can be conceived.'19 We can conceive of facts that would implicate Gulledge in Michael's fraudulent scheme because only Gulledge and one other investor received any money from the investment. The other investors lost millions. For these reasons, Melissa's petition states a claim upon which relief can be granted, and we reverse the dismissal order.
Melissa argues that she is entitled to the remedy of equitable subrogation because she incurred economic loss by defending and paying the other investors' claims. She raises this claim for the first time on appeal, and we may refuse to review any claim that was not raised in the trial court unless the claim involves jurisdiction, failure to state a claim, or manifest error which affects a constitutional right.20 A party may also raise an issue for the first time on appeal if it does so as grounds to affirm the trial court and the record is sufficiently developed.21 These exceptions do not apply here, and we decline to consider the issue.22
In her petition, Melissa states that she `incurred costs and economic loss associated with the defense of claims and litigation initiated by some of the Investors other than Respondent.' Gulledge attached the petition filed in the other investors' lawsuit to his motion to dismiss, and Ginsberg objected in her memorandum opposing the motion. She also attached the answer she filed in response to the other investors' lawsuit. In his reply, Gulledge stated that `{i}f the Court believes the Investors' Petition cannot be considered on this motion even for limited background purposes, Respondents request the Court to disregard it{.}' The trial court did not mention the attachment and granted Gulledge's motion to dismiss with little comment. Melissa now argues that the trial court relied on the attachment, thus converting the dismissal motion into one for summary judgment and requiring the court to allow the parties to conduct the necessary discovery.
If `matters outside the pleading are presented to and not excluded by the court' in a 12(b)(6) motion to dismiss, the motion is treated as one for summary judgment and parties must be given a reasonable opportunity to present all pertinent material.23 Here, the attachment did not convert the dismissal motion to a summary judgment motion because the petition did not relate to any relevant factual allegations and neither proved nor disproved anything related to the petition's allegations.24 Ginsberg objected to the attachment of the investors' petition and submitted her answer to the petition in response, and Gulledge asked the trial court to disregard the petition if necessary. The court did not convert the motion to dismiss to a summary judgment motion.
The Trust and Estate Dispute Resolution Act (TEDRA)25 mandates using nonjudicial dispute resolution in trust and estate cases but permits judicial resolution if other methods are unsuccessful.26 Ginsberg argues that TEDRA required the trial court to order mediation before...
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