Rutledge v. Beck, No. 64914-1-I (Wash. App. 6/1/2010)

• Decision Date: 01 June 2010
• Docket Number: No. 64914-1-I.,64914-1-I.
• Court: Washington Court of Appeals
• Parties: PAUL J. RUTLEDGE, Plaintiff, v. SUSAN E. BECK, Defendant, BRYAN CHUSHCOFF, Appellant. RYAN THOMAS and JULIE THOMAS, husband and wife, Respondents, v. PAUL J. RUTLEDGE and SUSAN E. BECK, Third Party Defendants.

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PAUL J. RUTLEDGE, Plaintiff, v. SUSAN E. BECK, Defendant, BRYAN CHUSHCOFF, Appellant.

RYAN THOMAS and JULIE THOMAS, husband and wife, Respondents, v. PAUL J. RUTLEDGE and SUSAN E. BECK, Third Party Defendants.

No. 64914-1-I.

Court of Appeals of Washington, Division One.

Filed: June 1, 2010.

Appeal from Pierce County Superior Court. Docket No: 00-2-09367-1. Judgment or order under review. Date filed: 08/10/2009. Judge signing: Honorable Bruce W. Hilyer.

Counsel for Appellant(s), Bryan Chushcoff (Appearing Pro Se), 6905 Narrows Lane, Tacoma, WA, 98407.

Counsel for Respondent(s), William Robert Spurr, Law Office of William R Spurr, 1001 4th Ave Ste 3600, Seattle, WA, 98154-1130.

Counsel for Other Parties, Susan Beck (Appearing Pro Se), 7420 Rosedale Street Nw, Gig Harbor, WA, 98335.

Paul Rutledge (Appearing Pro Se), C/o Maureen Haugen, 435 Ridgeland Drive, Sharp Chapel, TN, 37866.

UNPUBLISHED

COX, J.

At issue in this appeal of these consolidated cases is whether the trial court improperly vacated two deeds of trust encumbering real property that was the subject of orders of sale without service of process on the holder of those deeds of trust. Also at issue is whether the trial court abused its discretion in disbursing the proceeds of this court-ordered sale.

We hold that the trial court properly vacated the deeds of trust in this proceeding in rem. Service of process on the holder of the deeds of trust was not required under the circumstances of this case. The holder had constructive notice of the pendency of this action by the recording of the July 2000 lis pendens for this action, which was years before the recording of these deeds of trust. Accordingly, the current holder is bound by all proceedings in this action as if he had been a party at inception. We also hold that the trial court did not abuse its discretion in disbursing the proceeds of the partition sale. We affirm.

Ten years ago, Paul Rutledge commenced this action against Susan Beck to determine their relative interests in the real property they owned in Gig Harbor.¹ Rutledge recorded a lis pendens for this action on July 13, 2000. Rutledge and Beck were then tenants-in-common of the property.

Six years ago, the superior court ordered the parties to list the property for sale before October 2004. Five years ago, Ryan and Julie Thomas entered into a written agreement with Rutledge and Beck to purchase the property.

Three years ago, the Thomases moved to intervene in this action in order to specifically enforce their right to purchase the property. That motion appears to have been based on Beck's steadfast refusal to complete the sale. The court granted the motion, and the Thomases recorded a lis pendens on July 17, 2007.

On March 27, 2008, retired Judge Donald Thompson, sitting as a judge pro tempore, held a hearing on Rutledge's motion concerning sale of the property. Judge Thompson entered an Order Compelling Sale, Appointing Attorney and Granting Other Relief. The order directed immediate completion of the sale to the Thomases. It also vacated a deed of trust dated February 3, 2005, that encumbered the real property that the court ordered sold to the Thomases. The order reserved for later hearing the issue of attorney fees. Beck appealed.

Division Two of this court filed its opinion in Beck's appeal on February 3, 2009, in Rutledge v. Beck.² The court affirmed the order compelling sale of the property to the Thomases. But the court reversed what it characterized as the trial court's denial of attorney fees to the Thomases. The court remanded for further proceedings.

We note that, although the order then on appeal also vacated the deed of trust dated February 3, 2005, Division Two did not address that portion of the order. Division Two also ordered that if there were further proceedings after remand, the case should be assigned to a visiting judge from another county due to Judge Bryan Chushcoff's involvement in the case.³

While the appeal was pending, the trial court held Beck in contempt for failure to comply with its March 27, 2008 Order Compelling Sale, Appointing Attorney and Granting Other Relief for sale of the property to the Thomases. The contempt order also vacated a $80,000 deed of trust dated October 18, 2007 against the property. Judge Chushcoff is now the holder of this 2007 deed of trust as well as the 2005 deed of trust that the court had previously vacated.

The sale of the property to the Thomases finally closed in July 2008. Beck refused to vacate the property at closing.

In September 2008, Judge Thompson granted Judge Chushcoff's motion to intervene in this case. The Order on: (1) Motions to Intervene, etc., entered on September 12, 2008, directed disbursement of the net sale proceeds after satisfaction of a first priority deed of trust by a lender not involved in this litigation. It further directed payment of $80,397.49 to Rutledge. The order also directed that "$10,000 should be retained in [Rutledge's counsel's trust account] to pay any statutory costs and to cover possible rental value of property post-sale to Thomas." The order further directed all other sums in the trust account to be paid to Judge Chushcoff. It appears that amount was $99,401.38.⁴ Neither Beck nor Judge Chushcoff has appealed this order. Likewise, the Thomases have never appealed this order.

Judge Bruce Hilyer, a visiting judge to whom this case was assigned in accordance with Division Two's directive, ordered disbursal of the $10,000 in retained funds by his order authorizing disbursal of funds held in trust dated June 19, 2009, which was filed with the clerk of the court on July 1, 2009. Of the $10,000, an amount of $9,480 was disbursed to the Thomases in partial satisfaction of an attorney fees award to them against Beck and Rutledge, the sellers of the partitioned property. Presumably, this award was based on a contractual provision for attorney fees in the sale agreement that the sellers breached. The balance of $520 was disbursed to the attorney-in-fact for Beck that the court had to appoint to sign closing papers because Beck refused to do so.

The record before us also shows that Judge Hilyer later entered findings, conclusions, and a judgment exceeding $10,000 in favor of the Thomases against Beck only. That judgment was based on her refusal to vacate the property after closing. The amount of the judgment includes reasonable rental value of the property, cleaning expense, the value of a generator wired into the residence as an auxiliary power source removed prior to Beck's vacation of the property, and attorney fees and costs. None of the proceeds of sale were used to pay this judgment. Presumably, this judgment remains unsatisfied.

Judge Chushcoff appeals.⁵

JURISDICTION

Judge Chushcoff first argues that the trial court lacked personal jurisdiction over him, the holder of the two deeds of trust that encumbered the real property that was partitioned by sale. He claims this voids the orders vacating the liens of these deeds of trust against that property. Because the partition by sale is a proceeding in rem and the lis pendens that Rutledge recorded against the property in July 2000 binds Judge Chushcoff as if he had been made a party at the inception of this case, we disagree.

A tenant-in-common may impose a lien or other encumbrance upon his or her own undivided interest in real property.⁶ However, the separate and distinct title interest which each cotenant holds and which he or she is free to encumber without regard to the other cotenants' interests in the common property is only that cotenant's individual, undivided interest.⁷

The right of a tenant-in-common of real property to a partition is absolute in Washington, and is largely governed by RCW 7.52.010 et seq.⁸ "An action for partition is a proceeding in rem."⁹ In the context of an in rem action, "[c]ourts may have jurisdiction to enter judgment with respect to property or things located within the boundaries of the state, even if personal jurisdiction has not been obtained over the persons affected by the judgment."¹⁰

RCW 4.28.320, titled "Lis pendens in actions affecting title to real estate," states in relevant part:

At any time after an action affecting title to real property has been commenced . . . the plaintiff . . . may file with the auditor of each county in which the property is situated a notice of the pendency of the action, containing the names of the parties, the object of the action, and a description of the real property in that county affected thereby. From the time of the filing only shall the pendency of the action be constructive notice to a . . . encumbrancer of the property affected thereby, and every person whose . . . encumbrance is subsequently executed or subsequently recorded shall be deemed a subsequent . . . encumbrancer, and shall be bound by all proceedings taken after the filing of such notice to the same extent as if he or she were a party to the action.¹¹

Whether a court has jurisdiction is a matter of law that this court reviews de novo.¹²

As Division Two of this court determined in Beck's prior appeal in this case, she and Rutledge, as tenants-in-common, each had the right to partition their property by sale. The court referred to RCW 7.52.010, the partition statute, when it made this determination.

Here, Beck executed and delivered to JB Properties, Inc., Judge Chushcoff's predecessor in interest, two deeds of trust that encumbered her interest in the property that the superior court had previously ordered sold. The February 2005 deed of trust secures a promissory note for $50,000. The October 2007 deed of trust secures an additional promissory note for $80,000. Judge Chushcoff is now the holder of these notes and deeds of trust.

Judge Chushcoff's sole argument on appeal is that neither he nor his predecessor in interest was served with process to effectuate personal jurisdiction over them in this case. He...