Milwaukee Avenue, Llc, V. Ted Spice ( 2021 )

Filed
Washington State
Court of Appeals
Division Two
November 30, 2021
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION II
MILWAUKEE AVENUE, LLC, No. 54711-2-II
Respondent,
v.
TED SPICE, PLEXUS INVESTMENTS, LLC, UNPUBLISHED OPINION
and ALL OTHER OCCUPANTS,
Petitioners.
LEE, C.J. — Ted Spice appeals the superior court’s order granting partial summary
judgment ejecting his manufactured homes from certain real property. Spice argues that genuine
issues of material fact remain as to whether Milwaukee Avenue, LLC, has a valid subsisting
interest in the property to maintain an action for ejectment and as to whether Milwaukee maintains
superior title to the property at issue. Spice also argues that equitable principles require reversal
of the superior court’s order granting partial summary judgment.
We hold that the superior court did not err in granting partial summary judgment because
no genuine issues of material fact remain as to whether Milwaukee has a valid subsisting interest
and superior title in the property at issue. We also hold that equitable principles do not merit
reversal. Accordingly, we affirm the superior court’s order granting partial summary judgment
ejecting Spice’s manufactured homes from the property at issue.
No. 54711-2-II
FACTS
A. SPICE’S INTEREST IN THE PROPERTY AT ISSUE (SPICE I)
This appeal concerns certain real property located in Puyallup, Washington. On December
8, 2009, Doris Mathews died. Spice v. Estate of Mathews, No. 48458-7-II, slip op. at 2 (Wash. Ct.
App. Dec. 12, 2017) (unpublished)1 (Spice II). Prior to her death, Mathews transferred several
parcels of property to Spice individually, which includes the property that is the subject of this
appeal. Id. at 1.
After Mathews’ death, Spice filed a creditor’s claim against her estate. Spice v. DuBois,
No. 44101-2-II, slip op. at 3 (Wash. Ct. App. Mar. 1, 2016) (unpublished)2 (Spice I). The creditor’s
claim proceeded to a jury trial. Id. at 4. For the parcel of property relevant to this appeal, the jury
awarded Spice a 25 percent ownership interest and the Estate a 75 percent ownership interest. Id.
at 5. This court affirmed the jury’s award in Spice I. Id. at 15.
B. PROPERTY TRANSFERS OUT OF THE ESTATE BY DUBOIS (SPICE II)
In April 2013, Spice filed another creditor’s claim against the Estate, later amending his
complaint to add claims alleging a breach of fiduciary duty against the Mathews Estate by
committing waste through mismanagement of the property, among other claims. Spice II, slip op.
at 3-4. The superior court granted the Estate’s motion for summary judgment and dismissed all of
Spice’s claims. Id. at 4-5. The superior court also denied Spice’s motion for reconsideration. Id.
1
http://www.courts.wa.gov/opinions/pdf/D2%2048458-7-II%20Unpublished%20Opinion.pdf.
2
http://www.courts.wa.gov/opinions/pdf/D2%2044101-2-II%20Unpublished%20Opinion.pdf.
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No. 54711-2-II
at 6. Spice appealed the superior court’s summary judgment ruling and denial of reconsideration.
Id. at 7.
While Spice’s second lawsuit against the Estate was pending in 2014, Donna E. DuBois,
as personal representative of the Mathews Estate, filed a motion in superior court to transfer title
of the property from the Estate to herself personally. Spice v. Estate of Mathews, No. 50915-6-II,
slip op. at 7 (Wash. Ct. App. Oct. 15, 2019) (unpublished)3 (Spice III). The superior court denied
the Estate’s motion in January 2014. Id. In February 2014, the Estate renewed its motion to
transfer the Estate property to DuBois, and the superior court again denied the motion. Id.
Nevertheless, in November 2014, DuBois, as personal representative of the Estate, transferred the
property to herself individually. Id. Also while Spice’s second suit against Mathew’s probate
estate was pending, DuBois and her husband filed for bankruptcy in September 2013. Id. at 5.
In January 2015, the superior court vacated DuBois’ November 2014 transfer of property
out of the Mathews Estate to herself individually, removed DuBois’ non-intervention powers in
the Mathews probate matter, and prohibited further conveyances without court authorization. Id.
at 7. But on March 12, 2015, despite the superior court’s order, DuBois again transferred
properties from herself individually to herself as personal representative of the Estate. Id.
In February 2017, DuBois, as personal representative, again moved to allow the transfer of
Estate assets to herself individually and to restore her non-intervention powers as personal
representative of the Mathews Estate. Id. In March 2017, the superior court restored DuBois’
3
http://www.courts.wa.gov/opinions/pdf/D2%2050915-6-II%20Unpublished%20Opinion.pdf.
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No. 54711-2-II
non-intervention powers. The superior court also allowed the transfer of all the Estate’s assets to
DuBois as an individual, including the property at issue in this case.
On December 12, 2017, we reversed the superior court’s summary judgment order
dismissing Spice’s claim for waste in Spice II, slip op. at 18. We held that a quasi-fiduciary
relationship between the Estate and Spice existed with regard to the properties held by Mathews
and Spice, and that a material question of fact existed as to whether the Estate had breached its
duty with regard to Spice’s waste claim. Id. at 14. We remanded the case to the superior court for
additional proceedings on Spice’s claim that the Estate breached its fiduciary duty by allowing
waste.
C. FRAUDULENT TRANSFER CLAIM (SPICE III)
In March 2017, while the appeal in Spice II was still pending, Spice filed another lawsuit
against the Mathews Estate, among others. Spice III, slip op. at 9. This lawsuit was consolidated
with the original Mathews probate proceeding. Id.
In June 2017, Spice amended his complaint to allege fraudulent misrepresentation,
fraudulent transfer act violations, agents acting without proper authority, agent acting without
bond, failure to provide funds for litigation and development costs, waste, and a violation of the
Consumer Protection Act. Id. at 9-10.
The Estate moved to dismiss Spice’s complaint. Id. at 10. The superior court treated the
Estate’s motion as a motion for summary judgment dismissal of Spice’s claims, which the court
granted. Id. at 10-11. The superior court entered an order dismissing Spice’s claims on December
1, 2017, less than two weeks before this court decided Spice II. Id. at 11. Spice appealed the
superior court’s order granting summary judgment dismissal of his claims (Spice III). Id.
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In Spice III, we held that DuBois’ right to the property that was transferred to the
bankruptcy estate is determined by state law. Id. at 13. We also held that:
[DuBois’] interest in the Estate property has been, and remains to be, subject to this
probate proceeding. Until this probate proceeding is completed, [DuBois’]
interest—now her bankruptcy estate’s interest—is subject to the outcomes of
probate. Only after the probate proceeding closes can [DuBois’] resulting interests
be treated as her own.
....
. . . Because [DuBois’] interest remains subject to the completion of probate, the
bankruptcy estate’s interest in the properties is also subject to the completion of
probate.
Id. at 13, 15 (emphasis added) (discussing RCW 11.04.250 and In re Peterson’s Estate, 12 Wn.2d
686, 733-35, 123 P.2d 733 (1942)). We did not reach the issue of whether the transfer of Estate
assets was proper; however, we held that Spice raised a material question of fact regarding his
claims for waste and fraudulent transfers. Id. at 32-33. Accordingly, we remanded the waste and
fraudulent transfer claims to the superior court for further proceedings. Id. at 33.
D. DUBOIS BANKRUPTCY PROCEEDING & SALE OF THE PROPERTY AT ISSUE
As noted above, DuBois and her husband filed for chapter 11 bankruptcy in September
2013. Id. at 5. In January 2016, their bankruptcy was converted to a chapter 7 proceeding. Id.
DuBois and her husband created schedules of their assets and liabilities, which included DuBois’
partial interest in the property at issue gained through the Mathews probate proceedings. Id. A
bankruptcy trustee was appointed to liquidate the DuBoises’ assets to pay their debts. Id.
The bankruptcy court ordered a discharge of the DuBoises’ debts on May 3, 2016. Id. In
January 2017, the DuBoises’ bankruptcy trustee filed a complaint against Spice in bankruptcy
court to determine his interest in the properties and to sell those properties in which Spice had an
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No. 54711-2-II
interest, including the property at issue where it was determined in Spice I that the Mathew Estate
held a 75% ownership interest and Spice held a 25% ownership interest. Id. at 5-6. In June 2019,
the bankruptcy court ordered the sale of the property at issue under 11 U.S.C. § 363(h). In re
DuBois, No. 13-46104-BDL (Bankr. W. Wash. June 10, 2019).
On July 30, 2019, Milwaukee purchased the property at issue “as is” from the bankruptcy
trustee of the DuBois bankruptcy estate through a quitclaim deed. At the time it purchased the
property, Milwaukee was aware that Spice had waste and fraudulent transfer claims involving the
property that were pending against the Mathews Estate and DuBois in the Mathews probate
proceeding. And the title insurance policy for the sale of the property notified Milwaukee that
there will be no coverage for any loss, costs, or expenses “resulting from any challenge to and/or
claim against the Title insured herein by Ted Spice, or any party or parties claiming by or through
Ted Spice.” Clerk’s Papers (CP) at 190.
Milwaukee’s quitclaim deed for the property at issue, states, in relevant part:
GRANTOR BRIAN L. BUDSBERG, as duly appointed
BANKRUPTCY TRUSTEE of the Bankruptcy Estate of Mark L. DuBois and
Donna E. DuBois, Bankruptcy Case No. 13-46104, pending in the United States
Bankruptcy Court for the Western District of Washington (the “Estate”), pursuant
to the Order Granting Trustee’s Motion To Approve The Sale Of The Estate’s and
Co-Owner Ted Spice’s Interests In The Property Located At 11003 58th St. Ct. E.
Free And Clear Of Liens Pursuant To 11 U.S.C. § 363, entered on July 30, 2019 (
the “Order”) . . . does hereby CONVEY AND QUIT CLAIM to GRANTEE
MILWAUKEE AVENUE, LLC, a Washington limited liability company.
CP at 53. The quitclaim deed also provided that “[t]he conveyance is further made ‘AS IS’ and
‘WHERE IS’ and without warranty or representation of any kind or character whatsoever, express
or implied.” CP at 54.
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In approving the sale of the property to Milwaukee, the bankruptcy court acknowledged
Spice’s claims affecting title to the property and ruled that any of Spice’s claims related to his
interest in the property at issue would attach to the proceeds from the sale rather than the property
itself:
[T]he sale of the [DuBois] Estate’s interest, and the interest of Ted Spice, will be
free and clear of all liens and interests, except real and personal property taxes.
Said liens and interests will attach to the proceeds of the sale as though those
proceeds were the Property, and said liens and interests to be satisfied from those
proceeds to the extent there are sufficient proceeds. The liens and encumbrances
against Ted Spice’s interest in the Property shall attach to the percentage of the net
proceeds from the sale of Ted Spice’s interest. The liens and encumbrances against
the Estate’s interest in the Property shall attach to the percentage of the net proceeds
from the sale of the Estate’s interest. All liens, interests, and encumbrances shall
attach to the net proceeds in the order, priority, and validity in which they currently
exist. Additionally, any pending or future litigation over claims held by any party
will attach only to the proceeds and not to the Property sold herein, including all
claims by and against Ted Spice or the Estate. All of Ted Spice’s interest and any
liens or encumbrances referenced above that are attached to his ownership interest
will also be eliminated from the clear title passed herewith.
CP at 71.
E. CURRENT EJECTMENT PROCEEDING
Spice owns two manufactured homes located on the property at issue. On September 20,
2019, Milwaukee filed a complaint for ejectment and trespass based on Spice’s failure to remove
his two manufactured homes from the property. Spice filed an answer asserting that, pursuant to
Spice III, the trial court could not eject Spice from the property until the completion of probate—
namely, because of his pending fraudulent transfer claims. Spice also filed an affirmative defense
asserting that Milwaukee’s quitclaim deed does not protect it from claims arising from the probate
court and a counterclaim asserting that, due to restrictions on manufactured homes, it would take
a substantial period of time to re-locate off the property.
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On January 9, 2020, Milwaukee filed a motion for partial summary judgment, requesting
the superior court to issue a writ of ejectment requiring Spice to remove his manufactured homes
from the property. On February 14, 2020, the superior court denied Milwaukee’s motion for partial
summary judgment, finding that genuine issues of material fact remained.
On February 24, 2020, Milwaukee filed a motion for reconsideration. On March 6, 2020,
the trial court granted Milwaukee’s motion for reconsideration, vacated its order denying
Milwaukee’s motion for partial summary judgment, and granted Milwaukee’s motion for partial
summary judgment. In issuing the writ of ejectment, the trial court noted that Spice’s interest in
the property “could technically apply to sale proceeds since all a sale really does is change the
form of an asset.” I Verbatim Report of Proceedings at 12.
The superior court ordered Spice to remove his two manufactured homes on the property
within ten days of the order. If Spice failed to remove the manufactured homes with ten days, then
Milwaukee had the right to remove or dispose of the homes at the expense of Spice. The superior
court further noted, “[a]ny costs incurred by either party can be presented at trial and considered
in determining damages on Mr. Spice’s remaining claims.” CP at 335.
Spice sought discretionary review of the superior court’s order granting partial summary
judgment. On May 29, 2020, a commissioner of this court granted Spice’s motion for discretionary
review under RAP 2.3(b)(2). See Ruling Granting Discretionary Review at 7, (May 29, 2020).
This appeal follows.
ANALYSIS
Spice argues that the superior court erred in granting Milwaukee’s motion for partial
summary judgment to eject Spice’s manufactured homes from the property. We disagree.
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A. SUMMARY JUDGMENT – GENUINE ISSUES OF MATERIAL FACT EXIST AFFECTING TITLE
1. Legal Principles
We review an order granting summary judgment de novo. Wash. Fed. v. Azure Chelan,
LLC, 195 Wn. App. 644, 652, 382 P.3d 20 (2016). Summary judgment is appropriate if no genuine
issues of material fact exist and the moving party is entitled to judgment as a matter of law. CR
56(c). “‘A material fact is one upon which the outcome of the litigation depends.’” Wash. Fed.,
195 Wn. App. at 652 (quoting Kim v. O’Sullivan, 133 Wn. App. 557, 559, 137 P.3d 61 (2006),
review denied, 159 Wn.2d 1018 (2007)). “Mere allegations or conclusory statements of facts
unsupported by evidence do not sufficiently establish such a genuine issue.” Discover Bank v.
Bridges, 154 Wn. App. 722, 727, 226 P.3d 191 (2010). We review facts and inferences in the light
most favorable to the non-moving party. Wash. Fed., 195 Wn. App. at 652.
“In a summary judgment motion, the moving party bears the initial burden of showing the
absence of an issue of material fact.” Young v. Key Pharm., Inc., 112 Wn.2d 216, 225, 770 P.2d
182 (1989). If the moving party meets this initial burden, the burden then shifts to the nonmoving
party to make a sufficient showing that a genuine issue of material fact exists. Ranger Ins. Co. v.
Pierce County, 164 Wn.2d 545, 552, 192 P.3d 886 (2008). The nonmoving party cannot rely on
speculation or conclusory statements to defeat summary judgment. Martin v. Gonzaga Univ., 191
Wn.2d 712, 722, 425 P.3d 837 (2018); SentinelC3, Inc., v. Hunt, 181 Wn.2d 127, 140, 331 P.3d
40 (2014). All evidence and all reasonable inferences therefrom are considered in the light most
favorable to the nonmoving party. Young, 112 Wn.2d at 226. Summary judgment is improper if
there are genuine issues of material fact. Ehrhart v. King County, 195 Wn.2d 388, 409-10, 460
P.3d 612 (2020).
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“Ejectment is a remedy for one who, claiming a paramount title, is out of possession” of
real property. Bar K Land Co. v. Webb, 72 Wn. App. 380, 383, 864 P.3d 465 (1993). Chapter
7.28 RCW governs actions for ejectment. In order to maintain an action for ejectment, a plaintiff
must first demonstrate a “valid subsisting interest in real property, and a right to the possession
thereof.” RCW 7.28.010; Grove v. Payne, 47 Wn.2d 461, 464-65, 288 P.2d 242 (1955). In
demonstrating a “valid subsisting interest,” the plaintiff “shall set forth in his or her complaint the
nature of his or her estate, claim, or title to the property.” RCW 7.28.120. If a plaintiff can
demonstrate a valid subsisting interest in the real property, then they are permitted to maintain an
ejectment action “against the person claiming the title or some interest therein” to recover the
property. RCW 7.28.010.
When multiple valid subsisting interests in the real property are demonstrated, the court
must then determine which of the interests asserted are superior. RCW 7.28.120; Grove, 47 Wn.2d
at 466. And the party with superior title, whether legal or equitable, shall prevail. RCW 7.28.120.
Furthermore, “‘[i]t is a long-standing principle that [a] plaintiff in an action to quiet title must
succeed on the strength of his own title and not on the weakness of his adversary.’” Byrd v. Pierce
County, 5 Wn. App. 2d 249, 266, 425 P.3d 948 (2018) (internal quotation marks omitted) (quoting
Bavand v. Onewest Bank, F.S.B., 176 Wn. App. 475, 502, 309 P.3d 636 (2013)).
2. Valid Subsisting Interest
Spice argues that there is a genuine issue of material fact as to whether Milwaukee has a
“valid subsisting interest” in the property to maintain an action for ejectment. Specifically, Spice
argues that genuine issues of material fact remain as to Milwaukee’s title to the property because
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No. 54711-2-II
DuBois’ interest in the property is still subject to probate administration and can later be divested.
We disagree.
Here, Milwaukee alleged legal title to the property. In support, Milwaukee offered the
quitclaim deed to the property with its motion for partial summary judgment. The quitclaim deed
states that
GRANTOR BRIAN L. BUDSBERG, as duly appointed
BANKRUPTCY TRUSTEE of the Bankruptcy Estate of Mark L. DuBois and
Donna E. DuBois, Bankruptcy Case No. 13-46104, pending in the United States
Bankruptcy Court for the Western District of Washington (the “Estate”), pursuant
to the Order Granting Trustee’s Motion To Approve The Sale Of The Estate’s and
Co-Owner Ted Spice’s Interests In The Property Located At 11003 58th St. Ct. E.
Free And Clear Of Liens Pursuant to 11 U.S.C. § 363, entered on July 30, 2019 (
the “Order”) . . . does hereby CONVEY AND QUIT CLAIM to GRANTEE
MILWAUKEE AVENUE, LLC, a Washington limited liability company.
CP at 53.
Because Milwaukee asserted its legal title to the property through the quitclaim deed,
Milwaukee has demonstrated a “valid subsisting interest” in the property sufficient to maintain an
action for ejectment. See RCW 7.28.010, .120. Contrary to Spice’s argument, this remains true
even if Milwaukee’s title to the property can later be divested by Spice’s fraudulent transfer claims
in the probate proceeding. See Grove, 47 Wn.2d at 465-66 (holding that a plaintiff with a
defeasible estate to real property has a present valid subsisting interest sufficient to bring an action
under RCW 7.28.010). Accordingly, there is no genuine issue of material fact as to whether
Milwaukee has a present “valid subsisting interest” sufficient to maintain an action for ejectment.
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3. Superiority Of Title
Spice argues that genuine issues of material fact remain as to whether Milwaukee has
superior title because the parties’ respective interests in the property are still being litigated in the
probate court—namely, Spice’s unresolved fraudulent transfer claim. We again disagree.
Under the Uniform Voidable Transfers Act, chapter RCW 19.40, a transfer made by a
debtor is fraudulent to a creditor if the property was transferred
(a) With actual intent to hinder, delay, or defraud any creditor of the debtor;
or
(b) Without receiving a reasonably equivalent value in exchange for the
transfer or obligation, and the debtor:
(i) Was engaged or was about to engage in a business or a transaction for
which the remaining assets of the debtor were unreasonably small in relation to the
business or transaction; or
(ii) Intended to incur, or believed or reasonably should have believed that
the debtor would incur, debts beyond the debtor’s ability to pay as they became
due.
RCW 19.40.041(1)(a), (b). A fraudulent transfer made by a debtor is “voidable as to a creditor,
whether the creditor’s claim arose before or after the transfer was made or the obligation was
incurred.” RCW 19.40.041(1).
RCW 19.40.071 provides remedies for creditors adversely affected by a fraudulent transfer.
RCW 19.40.071 provides that
(1) In an action for relief against a transfer or obligation under this chapter,
a creditor, subject to the limitations in RCW 19.40.081, may obtain:
(a) Avoidance of the transfer or obligation to the extent necessary to satisfy
the creditor’s claim;
(b) An attachment or other provisional remedy against the asset transferred
or other property of the transferee if available under applicable law; and
(c) Subject to applicable principles of equity and in accordance with
applicable rules of civil procedure:
(i) An injunction against further disposition by the debtor or a transferee, or
both, of the asset transferred or of other property;
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No. 54711-2-II
(ii) Appointment of a receiver to take charge of the asset transferred or of
other property of the transferee; or
(iii) Any other relief the circumstances may require.
RCW 19.40.081(1) provides that “[a] transfer or obligation is not voidable under RCW
19.40.041(1) . . . against a person that took in good faith and for a reasonably equivalent value.”
To the extent a transfer is avoidable, the creditor “may recover judgment for the value of the asset
transferred” or recover “from the asset transferred or its proceeds.” RCW 19.40.081(2)(a), (b).
Here, two transfer events occurred. In November 2014, DuBois transferred properties from
the Estate to herself individually. In March 2015, the trial court vacated these November 2014
transfers. Shortly thereafter on March 12, 2015, DuBois attempted to transfer the property once
more. But this time, DuBois transferred the property from herself individually to herself as the
personal representative of the Estate.
In Spice III, Spice alleged that the transfers were fraudulent and, as a result, DuBois
fraudulently misrepresented the ownership of the property from March 2015 until Spice's
discovery of the transfers in February 2017. Slip op. at 28. Spice further alleged that DuBois’
transfers were fraudulent because they did not properly return title to the Estate to reflect his
percentage of ownership in the properties and instead impaired Spice’s ability to secure financing.
Id. Spice also alleged that the “Estate continued to engage in a pattern of deceptive behaviors to
avoid his claims. [DuBois’] previous contravention of a court order preventing transfers raises a
question of fact regarding [DuBois’] intent to defraud.” Id. We acknowledged Spice’s fraudulent
transfer claim in Spice III and held that “[b]ecause the Estate failed to controvert Spice’s evidence
. . . taken in a light most favorable to Spice, a material issue of fact exists regarding the fraudulent
transfer claim.” Id. We also held that
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No. 54711-2-II
[DuBois’] interest in the Estate property has been, and remains to be, subject to this
probate proceeding. Until this probate proceeding is completed, [DuBois’] interest
now her bankruptcy estate’s interest—is subject to the outcomes of probate. Only
after the probate proceeding closes can [DuBois’] resulting interests be treated as
her own.
....
. . . Because [DuBois’] interest remains subject to the completion of probate, the
bankruptcy estate’s interest in the properties is also subject to the completion of
probate.
Id. at 13, 15 (emphasis added). Any interest Milwaukee has in the property at issue flowed from
DuBois’ interest in the property. Based on our holding in Spice III, that interest remains unresolved
until the Mathews probate proceeding is complete.
Here, the Mathews probate proceeding is still not complete, and the superior court has yet
to decide the fraudulent transfer claim addressed and remanded in Spice III.4 However, unlike
Spice III, the superior court here authorized the transfer of the property at issue. So, even if the
property transfer was initially fraudulent, the superior court’s authorization allowing the transfer
of the property to the DuBoises’ bankruptcy estate validated the transfer. Because the superior
court validated the property transfer, and because Milwaukee purchased the property from a
bankruptcy trustee with approval from the bankruptcy court, Spice would not prevail in his
fraudulent transfer claim even when the evidence is viewed in light most favorable to him.
4
At oral argument, counsel for Milwaukee informed this court that “all the claims of Spice and
his action were dismissed by the [superior] court in October of 2020.” Wash. Court of Appeals,
oral argument, Milwaukee Avenue LLC v. Ted Spice, No. 54711-2-II (May 13, 2021), at 13 min.,
44 sec. through 13 min., 51 sec. (on file with court). However, the dismissal of Spice’s fraudulent
transfer claim in the probate court is not in the record before this court. Facts averred to during
oral argument but not contained in the record on appeal cannot be considered. See Moore v. Pacific
Northwest Bell, 34 Wn. App. 448, 455, 662 P.2d 398, review denied, 100 Wn.2d 1005 (1983).
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No. 54711-2-II
Therefore, Spice fails to demonstrate that there is a genuine issue of material fact as to whether
Milwaukee has superior title. And because no genuine dispute of material fact remains as to
whether Milwaukee has superior title in the property at issue, the superior court did not err in
granting partial summary judgment ejecting Spice’s manufactured homes as a matter of law.5
Spice also argues that the superior court erred in granting partial summary judgment
because it improperly determined that any remaining claims that Spice has against the Mathews
Estate could be satisfied out of the proceeds of the sale rather than title to the property at issue.
Spice misapprehends where his remedy lies.
As noted above, Spice’s interest in the property at issue was sold pursuant to the DuBois
bankruptcy proceeding. In that proceeding, the bankruptcy court specifically addressed whether
the DuBoises’ bankruptcy trustee could sell Spice’s interest under 11 U.S.C. § 363(h), which was
adversarial in nature. Any remaining argument that Spice has about his continuing title to the
property was addressed by the bankruptcy court. Therefore, if Spice believed that the bankruptcy
court incorrectly decided the nature of his interest in the property, then his remedy was to appeal
the order approving the sale.
In sum, the superior court did not err in granting partial summary judgment because no
genuine issue of material fact remains as to whether Milwaukee has a valid subsisting interest and
superior title in the property at issue.
5
Because the superior court’s March 2017 Order allowing the property transfer would defeat
Spice’s fraudulent transfer claim, we need not reach Spice’s argument that Milwaukee was not a
bona fide purchaser without notice.
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No. 54711-2-II
B. EQUITABLE PRINCIPLES DO NOT REQUIRE REVERSAL
Spice argues that equitable principles preclude Milwaukee’s right to eject the manufactured
homes. We disagree.
We review decisions in equity for an abuse of discretion. Neighbors v. King County, 15
Wn. App. 2d 71, 90, 479 P.3d 724 (2020). “A trial court abuses its discretion when its decision is
based on untenable grounds, or is manifestly unreasonable or arbitrary.” Id.“The right to eject an unlawful encroaching structure is among the most precious contained
within the bundle of property rights.” Garcia v. Henley, 190 Wn.2d 539, 540, 415 P.3d 241 (2018).
Generally, courts will order an encroacher to remove encroaching structures, even though removal
is extraordinary relief. Proctor v. Huntington, 169 Wn.2d 491, 496, 238 P.3d 1117 (2010), cert.
denied, 562 U.S. 1289 (2011); Arnold v. Melani, 75 Wn.2d 143, 152, 449 P.2d 800, 450 P.2d 815(1968). However, the liability rule provides an exception where ordering the removal of the
structure would be oppressive. Proctor, 169 Wn.2d at 500; Arnold, 75 Wn.2d at 152. The liability
rule is a remedy based in equity. Proctor, 169 Wn.2d at 498, 500.
Under the “liability rule” exception, an injunction to compel the removal of the
encroachment can be “withheld as oppressive” if:
(1) The encroacher did not simply take a calculated risk, act [in] bad faith, or
negligently, willfully or indifferently locate the encroaching structure; (2) the
damage to the landowner was slight and the benefit of removal equally small; (3)
there was ample remaining room for a structure suitable for the area and no real
limitation on the property’s future use; (4) it is impractical to move the structure as
built; and (5) there is an enormous disparity in resulting hardships.
Arnold, 75 Wn.2d at 152. Each of these elements must be proved by clear and convincing
evidence. Garcia, 190 Wn.2d at 545. The burden lies with the encroacher. Id. at 540. “If this
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burden is not carried, failure to enter an otherwise warranted ejectment order is reversible error.”
Id.
Here, the superior court ordered Spice to remove the two manufactured homes on the
property within ten days after the date of the order. If Spice failed to remove the manufactured
homes with ten days, then Milwaukee had the right to remove or dispose of the homes at the
expense of Spice. The superior court further noted “[a]ny costs incurred by either party can be
presented at trial and considered in determining damages on Mr. Spice’s remaining claims.” CP
at 335.
While Spice is correct that the liability rule concept has been applied to ejectment cases,
Spice does not present any argument on the factors under Arnold that would justify the superior
court’s order for ejectment being “withheld as oppressive.” Arnold, 75 Wn.2d at 152; see RAP
10.3(a)(6); Proctor, 169 Wn.2d at 498. Because Spice failed to carry his burden to prove that the
order for ejectment was unwarranted under Arnold, we hold that the superior court did not abuse
its discretion in ordering Spice to remove his manufactured homes from the property. See Garcia,
190 Wn.2d at 540, 545; Neighbors, 15 Wn. App. 2d at 90. Accordingly, equitable principles do
not require reversal of the superior court’s order granting partial summary judgment to eject
Spice’s manufactured homes from the property.
Because no genuine issues of material fact remain as to whether Milwaukee has a valid
subsisting interest and superior title in the property at issue, we hold that the superior court did not
err in granting partial summary judgment. We also hold that equitable principles do not merit
reversal. Accordingly, we affirm the superior court’s order granting partial summary judgment
ejecting Spice’s manufactured homes from the property at issue.
17
No. 54711-2-II
A majority of the panel having determined that this opinion will not be printed in the
Washington Appellate Reports, but will be filed for public record in accordance with RCW 2.06.040,
it is so ordered.
Lee, C.J.
We concur:
Worswick, J.
Cruser, J.
18