Darrell Riste v. Idaho Law Group, LLP ( 2019 )

FILED
MARCH 19, 2019
In the Office of the Clerk of Court
WA State Court of Appeals, Division III
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION THREE
DARRELL RISTE, CATHY RISTE, ) No. 35821-6-III
TYLER RISTE, )
)
Appellants, )
)
v. ) UNPUBLISHED OPINION
)
THE IDAHO LAW GROUP LLP, )
P. RICK TUHA P.C., P. RICK TUHA, )
HALA LILIFA AFU JR., HALA AFU and )
DOES 1-30, )
)
Respondents. )
LAWRENCE-BERREY, C.J. — Darrell Riste, Cathy Riste, and Tyler Riste appeal the
trial court’s summary judgment dismissal of their claims against their former attorneys.
We hold that the claims are barred by collateral estoppel. We affirm and award attorney
fee sanctions against appellants and their attorneys for pursuing a frivolous appeal.
No. 35821-6-III
Riste v. Idaho Law Group
FACTS
Summary of Litigation
This case is an appeal arising from the probate of Dan McAnally’s estate after his
death on September 22, 2012. Darrell Riste is a beneficiary of the estate, and his wife and
son, Cathy Riste and Tyler Riste, are both contingent beneficiaries. The Ristes have
brought multiple lawsuits alleging that the distribution of the estate was mismanaged.
They have also filed several appeals following adverse rulings in these lawsuits.
The current appeal arises out of the Ristes’ lawsuit against their former attorneys—
respondents Idaho Law Group LLP and P. Rick Tuha P.C., and the individual attorneys
P. Rick Tuha and Hala Lalifa Afu, Jr. (collectively the “Idaho Law Group”). In this
lawsuit, the Ristes claim that the Idaho Law Group is liable to them for pecuniary
damages resulting from malpractice, breach of contract, breach of fiduciary duties, and
for violating the Consumer Protection Act (CPA), chapter 19.86 RCW. In their CPA
claim, the Ristes assert that the Idaho Law Group’s actions were fraudulent, and they
request damages, including punitive damages.
The Idaho Law Group filed a motion to dismiss. As part of its motion, the Idaho
Law Group included pleadings from two prior cases that ended with findings and
conclusions adverse to the Ristes. Because the trial court considered matters outside of
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the complaint, it treated the motion to dismiss as one for summary judgment. See
CR 12(c). Ultimately, the trial court dismissed the Ristes’ claims on the basis of
collateral estoppel. It is, therefore, necessary for us to discuss the prior cases.
In the first case, the Ristes filed objections to the closing of the McAnally estate.
They generally claimed that the personal representative (PR) and its attorneys violated
fiduciary duties owed to them and that the PR should be removed. The trial court denied
the Ristes their requested relief. In an unpublished opinion, we affirmed the trial court.
In re Estate of McAnally, No. 35054-1-III (Wash. Ct. App. May 3, 2018) (unpublished),
http://www.courts.wa.gov/opinions/pdf/350541_unp.pdf, review denied, 191 Wash. 2d
1019, 428 P.3d 1189 (2018). We will refer to this matter as the “Probate Matter.”
In the second case, the Ristes sued numerous defendants including the PR and its
attorneys. We will refer to that matter as the “Fiduciary Matter.” Largely relying on the
findings and conclusions from the Probate Matter, the trial court summarily dismissed
those claims. The Fiduciary Matter has been appealed to this court. Riste v. Pers.
Representative of Estate of McAnally, Wash. Ct. App. 35681-7-III.
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Background Facts1
Dan McAnally died testate on September 22, 2012. His will was admitted to
probate. The nominal PR, Baker Boyer Bank, was appointed personal representative,
bond was waived, and nonintervention powers were granted.
On February 25, 2014, the PR filed a “Petition for Order Determining Amount of
Pecuniary Requests.” The PR provided proper notice to the Ristes and their attorneys,
Idaho Law Group, and set the hearing for March 21, 2014. At the hearing, the trial court
entered an order determining the amount of the pecuniary requests. On May 9, 2014,
Darrell Riste executed a receipt acknowledging that he had received his distributive share.
On June 5, 2014, the PR filed a “Petition for Order for Authorizing Sale of Real
Estate Property.” The property owned by the estate included the Viking Village Shopping
Center, located in Selah, Washington (hereinafter the “Viking Village”). The PR noted
the petition to be heard on July 8, 2014. Notice was provided to the Ristes by certified
mail and to the Ristes’ attorneys. No objections were filed, and Judge Susan Hahn
entered an order authorizing the sale of Viking Village.
1
Our statement of the background facts comes from Judge Kevin Naught’s
January 26, 2017 decision in the Probate Matter. See Clerk’s Papers (CP) at 319 (“This
letter and the enclosed interlineated Findings of Fact and Conclusions of Law constitute
my decision in this matter.”).
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There was no court activity in this matter for the next two years. On September 6,
2016, the Ristes filed a “Notice of Motion and Motion to Recuse Judge Hahn; to Remove
the Personal Representative of the Estate of Dan McAnally and the Trustee of the Riste
Trust for Conflict of Interest and Breach of Fiduciary Duties; For and [sic] Order
Requiring the Personal Representative to File an Accounting; Denial of Fiduciary and
Attorney’s Fees; and for Pendente Lite Orders Freezing Assets and Appointing a
Successor Fiduciary.” These motions were filed by the Ristes’ replacement attorney.2
The Ristes sought Judge Hahn’s disqualification and stated:
“It is imperative to the Court and to the Petitioner that recusal of Judge
Hahn be granted so as to prevent any further judicial impropriety. Judge
Hahn, whether negligently or in an otherwise improper manner authorized
the sale of the SHOPPING CENTER and Property based on a horrendous
interpretation of the Revised Washington Code and/or the express terms of
the WILL. The error is so egregious that it suggests incompetence. Judge
Hahn’s diligence and impartiality will be called into question in this motion
to remove the PR/TRUSTEE and the impending civil complaint.”
CP at 320 (footnote omitted).
2
In its decision of the Probate Matter, Judge Naught referred to the opposing party
as “Mr. Riste.” We note that the signature lines for the Idaho Law Group, and later the
replacement attorneys, all show that they represented “Darrell Riste, Cathy Riste, and
Tyler Riste.” We therefore refer to the party opposing the PR and its attorneys as “the
Ristes.”
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The Ristes stated that the PR and Trustee should be removed for good cause
alleging over 14 fiduciary violations. As such, the Ristes requested an accounting and the
denial of fees for the PR and its attorneys. In support of their petition, the Ristes filed
eight exhibits attached to the petition and a separate affidavit. Exhibits to the petition
contained 16 letters or e-mails between the parties and the attorneys from February 7,
2013 to March 5, 2016.
On September 8, 2016, the PR filed a declaration of completion of probate. A
week later, the Ristes filed a petition for an accounting and objected to the reasonableness
of the PR’s and its attorneys’ fees and expenses. The Ristes noted a hearing for
November 18, 2016. The court heard argument and issued its letter decision two months
later. Because collateral estoppel was the basis for the trial court’s dismissal, it is
necessary for us to quote extensively from the trial court’s findings and conclusions in its
letter decision:
Issue #1—Sale of Shopping Center
Many of Mr. Riste’s objections concern the sale of the Shopping Center.
Mr. Riste wanted the Estate/Trust to retain the Shopping Center as he
believed it would produce more annual income than a liquid financial
investment and he was to personally receive the annual income from the
Trust. The P.R. sought to sell the Shopping Center in order to have a more
diverse trust estate. This was the subject of much discussion between the
parties. The P.R. petitioned the court for authority to sell the Shopping
Center. No one filed any objections, apparently no one objected at the
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hearing and the Court (Judge Hahn) authorized the sale. There was no
Motion for Reconsideration. Now, 26 months after the Order Authorizing
Sale was entered, Mr. Riste’s makes objections. His objections are
untimely.
Mr. Riste’s opportunity to object to the sale, or to object to the conduct of
the P.R. relating to the sale, was in July 2014. If Mr. Riste felt that he did
not have enough information to form an objection, he could, at a minimum,
have sought a continuance. Mr. Riste ultimately agreed to have it sold at
$1,100,000.00.
Mr. Riste challenges the validity of the Trust. He maintains that no will can
create a trust, but that all trusts must be created by a document separate
from the will. He cites RCW 11.25.250. His reliance is misplaced. “There
are four elements required to create a testamentary trust: (1) a will
evidencing testamentary intent to create a trust, (2) designation of the trust
corpus, (3) designation of beneficiaries, and (4) specification of the terms of
the trust.” All of these elements are present in Decedent’s Will, so the Trust
is valid.
Mr. Riste also challenges the P.R.’s right to sell the property by citing
RCW 11.04.250. Mr. Riste’s interpretation is too narrow and is rejected by
RCW 11.68.090 which gives a personal representative with non-
intervention power to sell real property without court approval.
The P.R. had non-intervention powers. The Shopping Center was not a
specific devise. Instead, it passed through the general residual clause of the
Will. Thus, the P.R. had the authority to sell the asset. The Trust does not
fail because it is a testamentary trust and no separate document is needed.
The P.R. gave notice of the hearing. The P.R. provided a rational basis for
the sale in that it wanted to diversify the Trust estate. The P.R. obtained an
appraisal to determine the value of the property. There were no objections.
There was no violation of any fiduciary duty. There was no conflict of
interest.
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Issue #2—TEDRA Matter Regarding “Funds on Deposit”
Mr. Riste’s objects to the P.R.’s “Petition for Order Re Bequests” on the
grounds that it was unnecessary and, thus, incurred unnecessary fees. There
was $442,499.97 in a money market account at Baker Boyer Bank upon
Decedent’s death. The Will had several specific bequests. Two of these
bequests were similar in nature in that Darrel Riste and Fred Wickholm
were each to receive 30% of “all bank accounts and other bank deposits
standing in my name at the time of my death” with the remaining 40%
being a part of the residual estate. This meant that if the money market
accounts were “bank deposits,” $265,499.98 would pass as specific
bequests. If the money market accounts were not “bank deposits,” the
$265,499.98 would pass to the residual estate which was the Trust. Darrell
Riste’s grandchildren, Kyler Riste and Gracie Riste, hold remainder
interests in the Trust. Because they are minors, a Guardian ad Litem was
appointed for them. University of Denver is a contingent remainder
beneficiary of the Trust. Not surprisingly, Fred Wickholm and Darrell Riste
did not object to the P.R. classifying the money market accounts as bank
deposits.
It was neither frivolous nor a breach of fiduciary duty for the P.R. to seek to
prevent any future litigation by asking the Court to review this issue. The
P.R.’s action brought stability to both the Estate and Trust by foreclosing
any possible future claim that the money market accounts were not bank
deposits.
Issue #3—Information Flow
Mr. Riste sought the P.R.’s removal and sought to have the P.R. (and its
agents) not be paid as Mr. Riste claimed the P.R. (or its agents) breached its
fiduciary duty by providing false or misleading information, or by simply
not providing any information at all.
There is no credible evidence in the record that the P.R. or its agents
provided false or misleading information. It does appear, however, that Mr.
Riste did not receive all of the information he requested.
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An heir’s right to information from a personal representative in a non-
intervention estate is limited. It is not a breach of a fiduciary duty if a
personal representative in a non-intervention estate does not provide heirs
with financial information, estate records, valuation of the estate, and
information relating to estate property during probate unless ordered to do
so by the Court. Mr. Riste requested information pursuant to
RCW 11.76.010. However, that section is not applicable in non-
intervention estates. Mr. Riste never sought a court order via RCW
11.68.065 which would have then compelled the P.R. to provide timely
information.
Mr. Riste asked, in writing, for a copy of the Inventory and Appraisement at
least three times with the earliest request on or about February 7, 2013. A
copy was provided to him on May 6, 2014. The statute required that the
Inventory and Appraisement be completed by December 5, 2012, and that a
copy be given to any heir within 10 days of the personal representative’s
receipt of the request. There is no explanation why the P.R. waited
approximately 15 months to respond to Mr. Riste’s request. The issue
before this court is whether this delay rises to the level of being deemed a
breach of fiduciary duty.
The statute makes failures such as this a basis to revoke letters testamentary
and imposition of terms against the personal representative. However, this
is discretionary. When I weigh this failure against several factors, I find
that it does not rise to the level of a breach of fiduciary duty. These factors
are: the P.R. did finally provide Mr. Riste with a copy, Mr. Riste never
sought Court action against the P.R. pursuant to RCW 11.44.050, Mr. Riste
did not object to the late delivery to the Court until months after the fact,
Mr. Riste did not challenge the validity of the information contained in the
Inventory and Appraisement and Mr. Riste did not show that the late
delivery harmed him.
In his Petition #1, Mr. Riste provided copies of letters and emails. These
show that the P.R. and/or its attorney responded to most of Mr. Riste’s
inquiries although the level of detail and [sic] may not have been as great as
Mr. Riste expected. Additionally, as of July 2, 2014, the P.R. arranged for
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Mr. Riste to have electronic access to the monthly statement concerning the
financial accounts managed by the Trustee.
Issue #4—Professional Fees
Mr. Riste objected to the payment of professional fees to the P.R. and its
attorney based upon alleged breach of fiduciary duties and reasonableness.
Having found no breach of fiduciary duty, I focus on the reasonableness of
the fees.
A personal representative and its attorney are entitled to be compensated.
“In fixing the amount of such fee, the court is to consider: the amount and
nature of the services rendered, the time required in performing them, the
diligence with which they have been executed, the value of the estate, the
novelty and difficulty of the legal questions involved, the skill and training
required in handling them, the good faith in which the various legal steps in
connection with the administration were taken, and all other matters which
would aid the court in arriving at a fair and just allowance.”
Mr. Velikanje provided a fee affidavit which showed the activity, time, and
fee for each entry. Mr. Riste provided no specific objection or contrary
evidence. I have reviewed the time/fee entries against the factors listed
above and find the attorneys’ fees and costs to be reasonable. Of note is
that the estate was inventoried at $2,642,936 and that it involved the sale of
commercial property that had issues of environmental contamination.
The P.R. charged a fee according to its published fee schedule. Mr. Riste
provided no specific objection or contrary evidence. The Estate Fee
Schedule is reasonable.
CP at 321-24 (footnotes omitted).
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Dismissal of the Ristes’ lawsuit against Idaho Law Group
The trial court noted that the Ristes’ complaint in the present action asserted they
were harmed because the Idaho Law Group failed to prevent the sale of the Viking
Village and failed to raise the arguments unsuccessfully raised by replacement counsel.
The trial court listed the Ristes’ various causes of action as (1) legal malpractice,
(2) breach of fiduciary duty, (3) breach of contract, (4) violation of the CPA, (5) fraud,
and (6) punitive damages. The trial court analyzed the elements of each cause of action
and noted that each cause of action required the Ristes to establish that the Idaho Law
Group acted or failed to act in a manner that caused them harm. The trial court concluded
that the Idaho Law Group could not have stopped the sale of the Viking Village. The trial
court also concluded that the Idaho Law Group, by failing to raise the same unsuccessful
argument raised by replacement counsel, did not cause the Ristes any harm. For the most
part, these were the reasons the trial court dismissed the Ristes’ claims against their
former attorneys.
The Ristes appealed.
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ANALYSIS
We review a summary judgment order de novo, considering the evidence and
reasonable inferences from the evidence in the light most favorable to the nonmoving
party. Keck v. Collins, 181 Wash. App. 67, 78-79, 325 P.3d 306 (2014), aff’d, 184 Wash. 2d
358, 357 P.3d 1080 (2015). Summary judgment is proper if the records on file with the
trial court show there is no genuine issue of material fact and the moving party is entitled
to a judgment as a matter of law. Id.; CR 56(c).
Initially, the burden is on the party moving for summary judgment to prove by
uncontroverted facts that there is no genuine issue of material fact. Seattle Police
Officers Guild v. City of Seattle, 151 Wash. 2d 823, 848, 92 P.3d 243 (2004). Once the
moving party meets this burden, the burden shifts to the nonmoving party to set forth
specific facts showing a genuine issue of material fact exists warranting a trial. CR 56(e);
Heath v. Uraga, 106 Wash. App. 506, 513, 24 P.3d 413 (2001).
A. CLAIMS DISMISSED ON THE BASIS OF COLLATERAL ESTOPPEL
The Ristes argue that the trial court erred by granting summary judgment in favor
of the Idaho Law Group. They claim that the present lawsuit raises issues that are not
identical to the Probate Matter. We disagree.
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“Whether collateral estoppel applies to bar relitigation of an issue is reviewed de
novo.” Christensen v. Grant County Hosp. Dist. No. 1, 152 Wash. 2d 299, 305, 96 P.3d 957
(2004). Collateral estoppel prevents a second litigation of an issue even though a
different claim or cause of action is asserted. Id. at 306. The doctrine promotes judicial
economy and serves to prevent inconvenience or harassment of parties. Id.
Collateral estoppel may be applied to preclude only those issues that have been
actually litigated and necessarily and finally determined in the earlier proceeding. Id. at
307. The party against whom collateral estoppel is asserted must have had a full and fair
opportunity to litigate the issue in the earlier proceeding. Id.
The party asserting collateral estoppel must show (1) the issue decided in the
earlier proceeding was identical to the issue presented in the later proceeding, (2) the
earlier proceeding ended in a judgment on the merits, (3) the party against whom
collateral estoppel is asserted was the party to, or in privity with a party to, the earlier
proceeding, and (4) application of collateral estoppel does not work an injustice on the
party against whom it is applied. Id.
Various issues previously litigated are dispositive of the Ristes’ claims in the
present action. The first issue concerns the sale of Viking Village. The trial court
concluded that because the PR had nonintervention powers, it was allowed to sell Viking
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Village, even without court approval. The second issue is the PR’s and its attorneys’
performance of their duties. The court concluded that neither the PR nor its attorneys
breached fiduciary duties. It reasoned that the PR’s desire to diversify the trust was a
rational basis for selling Viking Village. The third issue concerns the reasonableness of
the PR’s and its attorneys’ fees and expenses. The trial court approved the PR’s and its
attorneys’ fees and expenses after concluding they were reasonable.
With respect to these issues, collateral estoppel is satisfied. First, these issues were
litigated and necessarily decided in the Probate Matter. Second, the Probate Matter ended
in a judgment on the merits. Third, all three of the Ristes participated in the litigation.
Although Mr. Riste was the only family member who actively participated, the other two
family members were represented by counsel and had a right to participate.
Fourth, application of collateral estoppel does not work an injustice against the
Ristes. The “injustice element” of collateral estoppel “is rooted in procedural unfairness.
‘Washington courts look to whether the parties to the earlier proceeding received a full
and fair hearing on the issue in question.’” Schibel v. Eymann, 189 Wash. 2d 93, 102, 399
P.3d 1129 (2017) (internal quotation marks omitted) (quoting Thompson v. Dep’t of
Licensing, 138 Wash. 2d 783, 795-96, 982 P.2d 601 (1999)). The Ristes were heard loud
and clear in the Probate Matter. Their attorneys filed extensive motions and documents.
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They vigorously argued at the trial court and on appeal. They received a full and fair
hearing.
1. Legal malpractice
The Ristes contend that they presented a genuine issue of material fact that the
Idaho Law Group’s actions or inactions caused them pecuniary harm.
To establish a claim of legal malpractice, the plaintiff must prove the following
elements: (1) the existence of an attorney-client relationship that gives rise to a duty of
care owed to the client by the attorney, (2) an act or omission by the attorney in breach of
the duty of care, (3) damage to the client, and (4) proximate causation between the
attorney’s breach of the duty and the damage incurred. Hizey v. Carpenter, 119 Wash. 2d
251, 260-61, 830 P.2d 646 (1992). To recover, the plaintiff must show that he or she
would have achieved a better result had the attorney not been negligent. VersusLaw, Inc.
v. Stoel Rives, LLP, 127 Wash. App. 309, 328, 111 P.3d 866 (2005).
Here, the Ristes cannot establish that any breach caused them any harm. In the
Probate Matter, the trial court concluded that the Ristes had no right to prevent or delay
the sale of Viking Village. The Ristes’ replacement attorneys argued the sale should not
have been approved, but the court rejected the argument. The Ristes’ replacement
attorneys also argued that the PR and its attorneys breached their fiduciary duties. The
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court similarly rejected this argument. The Ristes’ replacement attorneys also argued that
the fees and expenses of the PR and its attorneys should not be approved and were not
reasonable. Again, the court rejected these arguments.
No reasonable trier of fact could find that the same arguments made by a different
lawyer would have achieved a different result. The Ristes have failed to establish the
causation element of their legal malpractice claim. The trial court did not err in granting
summary judgment dismissal of this claim.
2. Breach of fiduciary duty
The Ristes argue that the trial court erred in dismissing their breach of fiduciary
duty claim. To prevail on a breach of fiduciary duty claim, a plaintiff must prove (1) the
existence of a duty owed, (2) a breach of that duty, (3) resulting injury, and (4) that the
claimed breach proximately caused the injury. Micro Enhancement Int’l, Inc. v. Coopers
& Lybrand, LLP, 110 Wash. App. 412, 433-34, 40 P.3d 1206 (2002). Similar to our above
comments, the breach of fiduciary duty claim fails for lack of causation.
3. Breach of contract
The Ristes argue that the trial court erred in dismissing their breach of contract
claim. To prove breach of contract, the plaintiff must prove that a valid agreement
existed between the parties, the agreement was breached, and the breach caused damages
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to the plaintiff. Univ. of Wash. v. Gov’t Emps. Ins. Co., 200 Wash. App. 455, 467, 404 P.3d
559 (2017); Nw. Indep. Forest Mfrs. v. Dep’t of Labor & Indus., 78 Wash. App. 707, 712-
13, 899 P.2d 6 (1995). As with the legal malpractice and the breach of fiduciary duty
claims, the Ristes have failed to establish a genuine issue of material fact as to causation.
As discussed above, the Ristes cannot establish that the Idaho Law Group could have
prevented the sale of Viking Village or that any actions or inactions by the Idaho Law
Group damaged them. For these reasons, the trial court properly dismissed the Ristes’
breach of contract claim.
B. CPA AND FRAUD CLAIMS3
To prevail on a private CPA claim, plaintiffs must establish the following
elements: (1) that the defendant engaged in an unfair or deceptive act or practice,
(2) occurring in trade or commerce, (3) a public interest impact, (4) injury to plaintiffs in
their business or property, and (5) causation. Univ. of Wash., 200 Wash. App. at 467.
While the Ristes did not bring a fraud claim, their CPA claim relies on allegations
of fraud. They claim fraud and deception, but provide no details or specifics of what the
Idaho Law Group did or did not do that was fraudulent or deceptive. Beyond the claims
3
On appeal, the Ristes clarify that their claim for punitive damages is based on the
availability of treble damages under the CPA.
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made and dismissed above, the Ristes fail to assert any action or inaction by the Idaho
Law Group that caused damages to them. To the extent we can discern any substance to
their CPA claim, it is that Idaho Law Group was fraudulent or deceptive for not pursuing
the same unsuccessful arguments their replacement attorneys made. The Ristes cannot
show how they were damaged by the Idaho Law Group’s failure to make unsuccessful
arguments. The trial court did not err in summarily dismissing these claims.
C. ATTORNEY FEES
The Idaho Law Group seeks an award of attorney fees under RAP 18.9 for
defending an appeal that is frivolous. RAP 18.9 permits an appellate court to order a
party or counsel who files a frivolous appeal to pay the harmed party compensatory
damages, including reasonable attorney fees. Under Washington law, “an appeal is
frivolous if, considering the entire record and resolving all doubts in favor of the
appellant, the court is convinced that the appeal presents no debatable issues upon which
reasonable minds might differ, and that it is so devoid of merit that there is no possibility
of reversal.” Ramirez v. Dimond, 70 Wash. App. 729, 734, 855 P.2d 338 (1993). When
considering awarding fees, all doubts regarding frivolity are resolved in favor of the
appellant. Camer v. Seattle Sch. Dist. No. 1, 52 Wash. App. 531, 540, 762 P.2d 356 (1988).
Even given this liberal standard, we conclude this appeal is so devoid of merit that there
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was no possibility of reversal. Here, the Ristes' replacement attorneys lost on these and
similar arguments not once, not twice, but at least three times. In essence, this lawsuit
sought to recover damages against their former attorneys for not making losing
arguments.
Subject to the Idaho Law Group's compliance with RAP 18.l(d), we award the
Idaho Law Group its reasonable attorney fees against the Ristes and their counsel, jointly
and severally.
A majority of the panel has determined this opinion will not be printed in the
Washington Appellate Reports, but it will be filed for public record pursuant to
RCW 2.06.040.
Lawrence-Berrey, C.J. •
WE CONCUR:
Pennell, J.
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