Vaughn v. Montague

• Decision Date: 14 February 2013
• Docket Number: Case No. C11–2046JLR.
• Citation: 924 F.Supp.2d 1256
• Parties: Keith D. VAUGHN, Plaintiff, v. Karen G. MONTAGUE, Defendant.
• Court: U.S. District Court — Western District of Washington

924 F.Supp.2d 1256

Keith D. VAUGHN, Plaintiff,

v.Karen G. MONTAGUE, Defendant.

Case No. C11–2046JLR.

United States District Court,

W.D. Washington,

at Seattle.

Feb. 14, 2013.

Michael William Flanigan, Flanagan Law, Port Townsend, WA, for Plaintiff.

Richard Lawrence Furman, Jr., William Allan Olson, Aiken, St Louis & Siljeg, Seattle, WA, for Defendant.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

JAMES L. ROBART, District Judge.

I. INTRODUCTION

This matter comes before the court on Defendant Karen Montague's (1) motion for summary judgment against Plaintiff Keith Vaughn (Mot. (Dkt. # 14)); (2) Ms. Montague's motion to strike the declaration of Randolph Wills (Wills Decl. (Dkt. # 18–1)), made pursuant to Local Rule 7(g) ( see Reply (Dkt. # 20) at 1); and (3) Ms. Montague's motion to strike Mr. Vaughn's response to her motion to strike (2/7/13 Mot. (Dkt. # 24)). The court has considered the motions, all submissions filed in support and opposition thereto, the balance of the record, and the applicable law. Being fully advised, the court GRANTS in part and DENIES in part Ms. Montague's motion for summary judgment (Dkt. # 14), GRANTS in part Ms. Montague's motion to strike the Declaration of Randolph Wills (Dkt. # 18–1), and DENIES Ms. Montague's motion to strike Mr. Vaughn's response to her motion to strike (Dkt. # 24).¹

II. FACTUAL AND PROCEDURAL BACKGROUND

This case is a dispute between a brother and sister over the proper administration and liquidation of their mother's trust. In 1999, Mary Vaughn created and executed a revocable living trust agreement (“the Trust Agreement”).² (Montague Decl. Ex. 2 (Dkt. # 16–2) at 3.) The Trust Agreement named Mary Vaughn the initial trustee, but named Ms. Montague, Mary Vaughn's daughter, the successor trustee upon Mary Vaughn's death, incapacitation, or resignation. ( Id. at 19.) The Trust Agreement specified that, upon Mary Vaughn's death, the trustee was to continue to administer the remainder trust for up to one year after her death, thereafter allocating the remaining trust estate in equal shares among Mary Vaughn's children. ( Id. at 29.) The Trust Agreement identified Mary Vaughn's two children as Mr. Vaughn and Ms. Montague. ( Id. at 32.) Although the parties dispute the value of Mary Vaughn's trust, the trust's primary assets at the time of its creation were bank accounts, annuities, and a house in Bellevue, Washington. (Mot. at 3–4.) This family dispute is primarily about the house. (Mot. at 12–15; Resp. (Dkt. # 18) at 3, 5–6.)

Mary Vaughn managed her own financial affairs until late 2002 or early 2003, when her failing health necessitated that Ms. Montague take over her financial affairs as successor trustee. (Montague Decl. at 2–3.) In 2006, Ms. Montague moved from Arkansas to Seattle and began living in her mother's house, where she still resides. ( Id. at 3, 6.) Mary Vaughn died on May 3, 2010. ( Id. at 1.)

Mr. Vaughn alleges that Ms. Montague mismanaged trust funds during Mary Vaughn's lifetime and that she failed to equally distribute the remainder trust estate as required by the Trust Agreement. (Compl. (Dkt. # 1) at 3–4.) Mr. Vaughn brings claims for (1) breach of fiduciary duty; (2) conversion; and (3) accounting, and asks the court to (4) impose a constructive trust; and (5) grant injunctive relief or a temporary restraining order. ( Id. at 5–8.) Ms. Montague opposes Mr. Vaughn's claims and brings counterclaims for (1) offset and equitable recoupment; (2) constructive trust; (3) promissory estoppel; (4) breach of contract; and (5) declaratory relief validating her actions as trustee and declaring the trust's assets equitably distributed. (Ans. (Dkt. # 4) at 8–11.)

In support of her motion for summary judgment, Ms. Montague provided the following evidence:

1. The Declaration of William A. Olson attesting to discovery exhibits. (Olson Decl. (Dkt. # 15).)

2. Mr. Vaughn's responses to Ms. Montague's first set of interrogatories. (Olson Decl. Ex. 1 (Dkt. # 15–1).)

3. Mr. Olson's correspondence with Mr. Vaughn's attorney contesting Mr. Vaughn's answers to the interrogatory and attaching an accounting of the trust's assets from May 1999 to May 2010. (Olson Decl. Ex. 2 (Dkt. # 15–2).)

4. Ms. Montague's second set of interrogatories and a request to produce the financial records that Mr. Vaughn used to produce his answers to Ms. Montague's first set of interrogatories. (Olson Decl. Ex. 3 (Dkt. # 15–3).) Mr. Vaughn never responded to this discovery request. (Olson Decl. at 2.)

5. A copy of Mr. Vaughn's first (and apparently only) discovery request, requestinga copy of the Trust Agreement and Mary Vaughn's will and executed durable power of attorney. (Olson Decl. Ex. 4 (Dkt. # 15–4).)

6. The Declaration of Karen Montague testifying to, among other things, her management of the trust and the trust's distributions to herself and Mr. Vaughn. ( See generally Montague Decl. (Dkt. 16–1).)

7. An affidavit of Mary Vaughn that her late husband left no will. (Montague Decl. Ex. 1 (Dkt. # 16–1).)

8. A copy of the Trust Agreement. (Montague Decl. Ex. 2 (Dkt. # 16–2).)

9. A letter from Kathy J. Stewart, RN dated November 2, 2009, confirming, by signature of Mary Vaughn, that Mary Vaughn resided at the Aegis Assisted Living Facility in Kirkland, Washington beginning March 7, 2002. (Montague Decl. Ex. 3 (Dkt. # 16–3).)

10. Correspondence between Michelle Graunke, Esq. and Mary Vaughn confirming the validity of Mary Vaughn's trust, will, durable powers of attorney, and physician's directive. (Montague Decl. Ex. 4 (Dkt. # 16–4).)

11. An accounting of funds expended by the trust to repair the trust's residence in Bellevue, Washington, including cancelled checks. (Montague Decl. Ex. 5 (Dkt. # 16–5).)

12. An accounting of all funds disbursed by the trust to Mr. Vaughn between February 1, 2007 and January 16, 2012, including copies of credit card invoices and cancelled checks. (Montague Decl. Ex. 6 (Dkt. # 16–6).)

13. Notes prepared by Mr. Vaughn and Ms. Montague in 2007 summing all funds disbursed by the trust to Mr. Vaughn while Mary Vaughn was managing her own financial affairs and/or was the trustee of her trust (October 6, 1997 to January 2, 2001). (Montague Decl. Ex. 7 (Dkt. # 16–7).)

14. Promissory notes between Mary Vaughn's late husband, William Vaughn, and Mr. Vaughn, evidencing Mr. Vaughn's debt to William Vaughn of $10,000, along with a letter from Ms. Montague noting accrued interest on the notes of approximately $6,400 as of 2007. (Montague Decl. Ex. 8 (Dkt. # 16–8).)

15. Transcripts and audio recordings of voice mail messages from Mr. Vaughn to Ms. Montague wherein Mr. Vaughn says “You can have the fuckin' house. I don't give a shit.” (Montague Decl. Ex. 9 (Dkt. # 16–9).)

16. A copy of all accounting for the trust between November 1, 2002 to May 3, 2010 (Mary Vaughn's date of death), including corresponding bank statements and other records. (Montague Decl. Ex. 10 (Dkt. 16–10; 16–11).)

17. A copy of all accounting for the trust between May 3, 2010 and February 16, 2012, including corresponding bank statements and other records. (Montague Decl. Ex. 11 (Dkt. 16–12; 16–13).)

18. Ms. Montague's reconciliation of the trust's accounting from May 1999 to November 2002, during which Mary Vaughn was the sole trustee and manager of the trust's financial accounts. (Montague Decl. Ex. 12 (Dkt. # 16–14).)

19. A copy of all accounting, including cancelled checks and bank statements, related to Ms. Montague's use of her own personal funds to renovate the trust's residence in Bellevue, Washington from 2006 to 2007. (Montague Decl. Ex. 13 (Dkt. # 16–15).)

20. Cascade Appraisal, L.L.C.'s Uniform Residential Appraisal Report of the trust's residence in Bellevue, Washington as of May 3, 2010 (Mary Vaughn's date of death). (Montague Decl. Ex. 14 (Dkt. # 16–16).)

21. A copy of all accounting, including cancelled checks and bank statements, for payments by Ms. Montague, from her personal funds, to fund Mary Vaughn's expenses and documenting payments to Mr. Vaughn. (Montague Decl. Ex. 15 (Dkt. # 16–17).)

In his opposition to the motion for summary judgment, Mr. Vaughn provides only one piece of evidence: the Declaration of Randolph Wills, a third party retained by Mr. Vaughn's counsel “to analyze the financial records related to the management of the Mary Vaughn Trust.” (Wills Decl. at 1.)

III. DISCUSSION

A. Ms. Montague's Motion to Strike the Wills Declaration

Ms. Montague moves to strike the Declaration of Randolph Wills. ( See Reply at 11–12.) Ms. Montague argues that Mr. Wills is not qualified to testify as an expert on financial and accounting matters, that his testimony is not helpful to the court, and that Mr. Vaughn failed to disclose his expert's testimony as required by Federal Rule of Civil Procedure 26(a)(2). ( Id. at 11–12.) In response, Mr. Vaughn argues that Mr. Wills is qualified, that Mr. Vaughn is unable to hire a Certified Public Accountant due to his limited financial means, and that Mr. Wills will not necessarily be used as a trial witness. ( See generally 2/6/13 Resp. (Dkt. # 23).) ³

Even if the court assumes that Mr. Wills is qualified and that his testimony is otherwise admissible, it would strike the paragraphs discussed below. The court, however, declines to decide whether the remainder of the motion should be struck, as adjudication of the remainder of Ms. Montague's motion to strike does not affect the outcome of her motion for summary judgment.

The court makes an initial determination of whether expert testimony is relevant and reliable. Wagner v. Cnty. of Maricopa, 706 F.3d 942, 952 (9th Cir.2013). Relevancy requires that the testimony “assist the trier of fact to understand the evidence or to determine a fact in issue.” Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 591, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993) (quoting Fed.R.Evid. 702); see also United States v. Downing, 753 F.2d 1224, 1242 (3d Cir.1985) (“An...