Stokes v. Polley

• Decision Date: 27 December 2001
• Docket Number: No. 70762-6.
• Citation: Stokes v. Polley, 145 Wn.2d 341, 37 P.3d 1211, 145 Wash.2d 341 (Wash. 2001)
• Court: Washington Supreme Court
• Parties: Colleen STOKES, an individual person, Petitioner, v. Scott L. POLLEY and Kathy Polley, husband and wife, and Ken D. Rector and Lori Rector, husband and wife, the Bank of New York, Inc., Trustee for Metropolitan Asset Funding, Inc., Respondents.

37 P.3d 1211

145 Wn.2d 341

145 Wash.2d 341

Colleen STOKES, an individual person, Petitioner, v. Scott L. POLLEY and Kathy Polley, husband and wife, and Ken D. Rector and Lori Rector, husband and wife, the Bank of New York, Inc., Trustee for Metropolitan Asset Funding, Inc., Respondents.

No. 70762-6.

Supreme Court of Washington, En Banc.

Argued October 25, 2001.

Decided December 27, 2001.

David Manning Abercrombie, Chelan, for Petitioner.

Davis, Arneil, Lewis William Card, Jeffers, Danielson, Sonn, J., Patrick Aylward, Brian C. Huber, Wenatchee, for Respondents.

SANDERS, J.

Colleen Stokes seeks review of a Court of Appeals opinion affirming an order granting summary judgment in favor of respondents Scott and Kathy Polley, Ken and Lori Rector, and the Bank of New York. This is a quiet title and partition case, the essence of which involves interpreting a 1980 dissolution decree. The main issue is whether Stokes' award of "onehalf the equity" in certain real estate refers to a monetary award enforcement of which is barred by the statute of limitations, or an interest in real property which subsists. We hold it refers to a time-barred money award and affirm the appellate court.

Facts and Procedural History

In 1976 Scott Polley acquired by real estate contract approximately 20 acres of property in Chelan County. He married Stokes on October 3, 1977. They separated in May 1979. On March 26, 1980, Stokes obtained a dissolution decree presented by her attorney in a default proceeding in Chelan County Superior Court. The decree provides in relevant part:

4. The community property of the parties is hereby divided as follows:

a. The petitioner is awarded the household goods and furniture in her possession and one-half the equity in the 20 acres of property located in Union Valley, Chelan County, Washington.

b. The respondent is hereby awarded the household goods and furniture in his possession, the automobile and tractor now in his possession and one-half the equity in the 20 acres in Union Valley, Chelan County, Washington.

5. The respondent is hereby required to pay all community indebtedness incurred prior to the separation of the parties. Each of the parties is required to pay their separate indebtedness.

Clerk's Papers at 102-03 (emphasis added). The decree neither purports to divide the separate property of either spouse nor includes the legal description of the real property.

In 1986, Polley paid off the purchase contract and received a statutory warranty fulfillment deed. On January 7, 1993, Polley sold the real property by real estate contract to Ken and Lori Rector who are the present owners.

On December 31, 1998, Stokes filed a complaint in Chelan County Superior Court to quiet title and partition the real property. She claimed the 1980 dissolution decree awarded her a one-half ownership interest in the real property, not merely a monetary award. The trial court rendered summary judgment that Stokes acquired no interest in the real property as such because the decree awarded her only a one-half interest in the equity of the property; equity meant one-half of the value of the property in excess of debt as of 1980; and such an award constituted at most an equitable lien. Accordingly, the trial court dismissed Stokes' claims with prejudice.

Stokes appealed the summary judgment order, which the Court of Appeals affirmed in an unpublished opinion. Stokes v. Polley, No. 18969-4-III, 103 Wash.App. 1014, 2000 WL 1663646 (Wash.Ct.App. Nov.2, 2000) (unpublished). The court stated:

A 1980 divorce decree awarding Ms. Stokes "one-half the equity" in certain real property purchased by Mr. Polley before the parties' brief marriage, meant a money judgment barred by the statute of limitations, and not a title interest in the real property.

Id., 103 Wash.App. 1014, 2000 WL 1663646, at *1. The Court of Appeals also denied Stokes' motion to publish the opinion. Stokes then petitioned this Court for review, which we granted.

Analysis

The issue on review is whether the Court of Appeals erred by interpreting the award in the 1980 divorce decree of "one-half the equity" as a money judgment barred by the statute of limitations for enforcement.¹

A. Interpretation of "One-Half the Equity" in Real Property

We are reviewing a summary judgment order. Summary judgment "shall be rendered ... [if] no genuine issue as to any material fact [exists] and ... the moving party is entitled to a judgment as a matter of law." CR 56(c). Summary judgment orders are reviewed de novo. W. Telepage, Inc. v. City of Tacoma Dep't of Financing, 140 Wash.2d 599, 607, 998 P.2d 884 (2000). Interpreting a dissolution decree involves a question of law reviewed de novo. In re Marriage of Thompson, 97 Wash.App. 873, 877, 988 P.2d 499 (1999). Because this case involves interpreting a dissolution decree on review of a summary judgment order, we apply de novo review.

Washington courts apply rules of construction applicable to statutes and contracts to determine the intent of the dissolution court. See, e.g., Thompson, 97 Wash. App. at 878, 988 P.2d 499 (citing In re Marriage of Gimlett, 95 Wash.2d 699, 704-05, 629 P.2d 450 (1981)). This is true regardless whether the defendant appears in the dissolution proceeding. Hill v. Hill, 3 Wash.App. 783, 786, 477 P.2d 931 (1970). In such cases, the court is presumed to determine all parties' property rights, leaving none undisposed. Id. at 786-87, 477 P.2d 931 (citing 24 Am.Jur.2d Divorce and Separation § 925 (1966)); see also Webster v. Webster, 2 Wash. 417, 420, 26 P. 864 (1891).

Decrees should be construed as a whole, giving meaning and effect to each word. Wagner v. Wagner, 95 Wash.2d 94, 101, 621 P.2d 1279 (1980). The words used have the legal effect as understood by the law at the time the decree was entered. Reedy v. Reedy, 12 Wash.App. 844, 848, 532 P.2d 626 (1975). However, "[w]ords should be given their ordinary meaning." Corbray v. Stevenson, 98 Wash.2d 410, 415, 656 P.2d 473 (1982) (contract interpretation case). Finally, where language is used in one instance but not another, there is a difference in intent. Seeber v. Wash. State Pub. Disclosure Comm'n, 96 Wash.2d 135, 139, 634 P.2d 303 (1981) (statutory interpretation case).

All property, separate and community, is presumed to be before the court for division. Former RCW 26.09.080 (1973); Friedlander v. Friedlander, 80 Wash.2d 293, 305, 494 P.2d 208 (1972). While the court considers the nature and extent of the community and separate property, see former RCW 26.09.080 (1973), the character of the property need not be specifically designated or labeled. Peterson v. Peterson, 3 Wash. App. 374, 377, 475 P.2d 576 (1970). Moreover, the court need not characterize each piece of property. In re Marriage of Melville, 11 Wash.App. 879, 880-81, 526 P.2d 1228 (1974). While the character of property is relevant to determine a just and equitable distribution, it is not controlling. In re Marriage of Hadley, 88 Wash.2d 649, 656, 565 P.2d 790 (1977). That said, Washington courts refrain from awarding separate property of one spouse to the other if a just and equitable division is possible without doing so. See Wash. State Bar Ass'n, Washington Family Law Deskbook § 39.3(2)(a), at 39-14 (1989).

Parties to a dissolution action have the right to have their property interests definitively and finally determined in the decree. Shaffer v. Shaffer, 43 Wash.2d 629, 631, 262 P.2d 763 (1953). Thus courts have a duty to not award property to parties as tenants in common. Bernier v. Bernier, 44 Wash.2d 447, 449-50, 267 P.2d 1066 (1954). To avoid this result and future forced sale and partition actions, courts should award the property itself to one spouse and an offsetting monetary award to the other spouse. See Washington Family Law Deskbook, supra, § 39.4(1)(a), at 39-20.

The record on its face demonstrates the real property at issue was in fact Polley's separate property. Polley was the named purchaser on the real estate contract. The contract was executed before Polley and Stokes were married. When acquiring property by real estate contract, "[t]he ownership of real property becomes fixed when the obligation becomes binding, that is, at the time of execution of the contract of purchase." Beam v. Beam, 18 Wash.App. 444, 453, 569 P.2d 719 (1977); see also In re Marriage of Harshman, 18 Wash.App. 116, 124-25, 567 P.2d 667 (1977), overruled on other grounds by In re Marriage of Elam, 97 Wash.2d 811, 815, 650 P.2d 213 (1982).²

The dissolution decree unambiguously purports to divide all the community property of Polley and Stokes. The decree divides the "equity" in Polley's real property. Accordingly, whether correctly or not, it seems the trial court characterized the "equity" of the real property as community property and divided the equity in half-one half to each party.

At the time the decree was entered in 1980 the ordinary meaning of "equity" in property was the fair market value of the property over its debts. See, e.g., Black's Law Dictionary 484 (5th ed. 1979) (Equity means "[t]he amount or value of a property above the total liens or charges [or][t]he difference of the fair market value and debt in property."); Webster's Third New International Dictionary of the English Language Unabridged 769 (1971) (Equity means "the money value of a property or of an interest in a property in excess of claims or liens (as mortgaged indebtedness) against it."); Webster's Third New International Dictionary of the English Language Unabridged 769 (1981) (same); Webster's New Twentieth Century Dictionary Unabridged 618 (2d ed. 1979) (Equity means "the value of property beyond the total amount owed on it."). This Court has similarly stated "equity in the home property is simply the value of the property in excess of the encumbrance against it." Crowder v. State, Dep't of Soc. Sec., 42 Wash.2d 782, 786, 259 P.2d 387 (1953).

Accordingly, this reference to equity does not...