Louis Sackett v. Bart Marzolf

IN THE COURT OF APPEALS FOR THE STATE OF WASHINGTON
LOUIS SACKETT, )
) DIVISION ONE
Respondent, )
) No. 78164-2-I
v.
) UNPUBLISHED OPINION
BARTMARZOLF, )
Appellant. ) FILED: April 29, 2019
_________________________________________________________________________________ )
DWYER, J. — The trial court quieted title to a 25-acre parcel of farm
property in Louis Sackett. Bart Marzolf appeals from that order, contending that
the trial court’s findings of fact are not supported by substantial evidence in the
record and that the findings do not support the conclusions of law. Finding no
error, we affirm.
Louis Sackett is a 91-year-old childless widower and retired marine pilot
who resides alone in Edmonds. Sackett has owned a 25-acre farm property in
Arlington since 1973. The farm includes a furnished residence, farm equipment,
and outbuildings. Sackett’s unsuccessful efforts to sell the farm were well known
among his friends and neighbors.
Sackett met Bart Marzolf in the 1980s via Marzolf’s family butcher
business. Sackett and Marzolf developed a close relationship and treated each
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other as family members. Marzolf accompanied Sackett on hunting trips, visited
him frequently at his home and at the farm, talked to him on the telephone
several times a week, and helped him recover from a hip fracture.
On March 17, 2017, Sackett signed a quit claim deed conveying the farm
to Marzolf in exchange for “Ten Dollars & Other Valuable Consideration.”
Sackett and Marzolf prepared the deed together, and Marzolf drove Sackett to
the bank to have it notarized and to county offices for recording. Marzolf and
Sackett signed an excise tax affidavit and supplemental statement indicating that
the transaction was a “gift without consideration.” The following day, Marzolf, his
fiancé, and his family moved onto the farm property.
On June 16, 2017, Sackett filed this action to void the quit claim deed and
quiet title to the farm property in his name. The complaint alleged that Sackett
had negotiated with Marzolf to sell the farm property for fair market value, and
that Marzolf induced Sackett through undue influence and material
misrepresentation to transfer the farm property to Marzolf by gift. Marzolf
answered the complaint and counterclaimed to quiet title.
On December 11,2017, Marzolf filed a motion for partial summary
judgment requesting a ruling that the parties did not share a confidential
relationship and that Sackett bears the burden of proving fraud by undue
influence or material misrepresentation by clear, cogent, and convincing
evidence. On January 12, 2018, the court granted Marzolf’s motion. The case
proceeded to a bench trial.
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Sackett testified at trial. He said he had been trying to sell the farm for the
past couple of years. Although other potential buyers had expressed interest,
Sackett decided he wanted to sell the farm to Marzolf. He and Marzolf began
negotiating purchase terms in March 2017. Sackett wanted $350,000 for the
property, but Marzolf said he could not afford that. Sackett dropped the price to
$300,000. The agreed terms were a down payment of $35,000 and monthly
payments of $1,000 for two years, at which time a balloon payment for the
remaining balance would be due. Marzolf told Sackett that he would pursue
bank financing for the down payment. Sackett agreed to allow Marzolf to pay
him less than $1 ,000 per month for the first couple of months until Marzolf paid
off the loan on his pickup truck.
Marzolf told Sackett that the bank needed to see a quit claim deed in order
for Marzolf to obtain a loan for the purchase. Sackett wanted Marzolf to buy the
farm, so he agreed to give him a quit claim deed. At some point after the quit
claim deed was recorded, Marzolf informed Sackett that he decided to assume
ownership by way of the quit claim deed without payment. Sackett said this
news “broke my heart.” Sackett denied that he ever intended to gift the farm
property to Marzolf.
Witnesses Ron Danielson, James Marriott, and Katrina Minchuk testified
that Sackett attempted to sell the farm to each of them. Marriott specified that in
January or February 2017, Sackett offered to sell the farm for $350,000, with a
$35,000 down payment, $1,000 per month for two years, and a balloon payment
to pay him off. Marriott did not pursue the transaction. Later, in March 2017,
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No. 78164-2-1/4
Marriott was present when Sackett and Marzolf discussed Marzolf buying the
farm property. Marriott also testified that Sackett “doesn’t give away a penny”
and “wouldn’t give the farm away.”
Minchuk testified that she was interested in purchasing the farm, but
Sackett called her in February 2017 to say he had found another buyer.
Sackett’s friend Dr. Arthur Castagno testified that Sackett talked about
selling the farm property “a great deal” during the early part of 2017 and “pretty
much daily” during March 2017. During the week of March 13, Sackett gave
Castagno a “day-by-day description of what was happening with the financial
aspects of the house sale, the farm sale.”
Sackett’s friend Earl Groendyk testified that during the last few years
Sackett had been trying to get him to buy the farm “because he wanted it to go to
someone he knew.” Groendyk said Sackett’s asking price was around $350,000.
Groendyk testified that in January 2017, Sackett called to ask him to give his
spare keys to the farm property to Marzolf. Sackett then gave the phone to
Marzolf, who informed Groendyk that he was trying to buy the farm. Groendyk
testified that Sackett was a “frugal gentleman” who was “not much into giving”
and who never said that he intended to give the farm away.
Marzolf’s testimony presented a different version of events. According to
Marzolf, Sackett often said he wanted Marzolf to have the farm property, but
never mentioned anything about payment. One day in February 2017, Sackett
tossed the keys to Marzolf and said, “I want you to have the farm.” Soon
thereafter, Sackett spontaneously told Marzolf they needed to get a quit claim
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No. 78164-2-115
deed. Sackett filled out the deed and about two weeks later they had it notarized
and recorded. Sackett subsequently left Marzolf a voice mail congratulating him
on getting the farm property.
A couple of days later, to Marzolf’s great surprise, Sackett demanded that
he sign a written agreement to purchase the farm. The offered terms were
$300,000 or $350,000, with a $35,000 down payment and $1 ,000 a month
payments. Marzolf said he could not afford that, and reminded him the farm was
a gift. But Sackett insisted he “didn’t recall” giving the farm to Marzolf.
Following settlement discussions, Marzolf stated that Sackett agreed to
accept $500 per month for the farm “until I’m pushing up daisies.” Marzolf denied
telling Sackett that he was not going to buy the house because he already owned
it via quit claim deed. Marzolf also denied telling Sackett that he needed a quit
claim deed to obtain a purchase loan for the farm property. Rather, during the
course of settlement negotiations, Marzolf told Sackett that the bank required a
quit claim deed to obtain a home improvement loan.
Several witnesses testified for Marzolf. Marzolf’s fiancé Janelle Whiteman
testified that Sackett said he was giving them the farm. Marzolf’s friend Vincent
Phillips and Marzolf’s son Stephen Meyers also testified they heard Sackett tell
Marzolf the farm would be his some day, and that Sackett did not mention
payment. Marzolf’s uncle Mark Marzolf testified that in early 2017, Bart Marzolf
called to say he needed to find out how to do a quit claim deed because Sackett
had decided to give him the farm. And Debby Sundheim, exemption division
supervisor for the Snohomish County Assessor’s Office, testified that on March
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No. 78164-2-1/6
17, 2017, Sackett told her that the transaction was a gift. Kimberly Sue Harrison,
VP branch manager at Columbia Bank in Snohomish, testified that in March 2017
Marzolf sought a $150,000 home improvement loan for a farm that had been
gifted to him. Harrison told Marzolf that because the farm was a gift, he would
need to submit a copy of the quit claim deed to apply for a home improvement
loan.
The trial court concluded that Sackett established by clear, cogent, and
convincing evidence that he never intended to make a gift of the farm to Marzolf.
The trial court also concluded that Sackett established by clear, cogent, and
convincing evidence that the quit claim deed resulted from undue influence
exerted by Marzolf upon Sackett. The court quieted title in the property to
Sackett. Marzolf appealed.
Marzolf asserts that the trial court’s findings of fact are not supported by
substantial evidence in the record. We disagree.
Where, as here, the parties are not in a confidential or fiduciary
relationship, the party seeking to set aside an inter vivos gift has the burden of
showing the gift is invalid as a product of undue influence. Lewis v. Estate of
Lewis, 45 Wash. App. 387, 388-89, 725 P.2d 644 (1986). The applicable quantum
of evidence is clear, cogent, and convincing. In re Estate of Eubank, 50 Wn.
App. 611, 619, 749 P.2d 691 (1988).
“In a bench trial where the trial court has weighed the evidence, our review
is limited to determining whether substantial evidence supports the trial court’s
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No. 78164-2-1/7
findings of fact and whether those findings support the court’s conclusions of
law.” Newport Yacht Basin Ass’n of Condo. Owners v. Supreme Nw., Inc., 168
Wash. App. 56, 63, 277 P.3d 18 (2012). Substantial evidence is the quantum of
evidence sufficient to persuade a rational fair-minded person that the premise is
true. Wenatchee Sportsmen Ass’n v. Chelan County, 141 Wash. 2d 169, 176, 4
P.3d 123 (2000). “There is a presumption in favor of the trial court’s findings, and
the party claiming error has the burden of showing that a finding of fact is not
supported by substantial evidence.” Frank Coluccio Constr. Co. v. King County,
136 Wash. App. 751, 761, 150 P.3d 1147 (2007). “When a challenged factual
finding is required to be proved at trial by clear, cogent, and convincing evidence,
we incorporate that standard of proof in conducting substantial evidence review.”
In re Estates of Jones, 170 Wash. App. 594, 603, 287 P.3d 610 (2012) (quoting In
re Trust & Estate of Melter, 167 Wash. App. 285, 301, 273 P.3d 991 (2012)). We
defer to the trier of fact to resolve conflicting testimony, evaluate the
persuasiveness of evidence, and assess the credibility of witnesses. In re
Parentage of G.W.—F., l7OWn. App. 631, 637, 285 P.3d 208 (2012). We review
conclusionsoflawdenovo. Binghamv. Lechner, 111 Wash. App. 118, 127, 45
P.3d 562 (2002).
Marzolf first asserts that findings of fact 8 and 9 are not supported by
substantial evidence in the record. These challenged findings of fact state:
8. SACKETT and MARZOLF had a close relationship.
SACKETT trusted MARZOLF implicitly and treated him as a family
member.
9. SACKETT had confidence that MARZOLF was
trustworthy and would not act in any way against his best interest.
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No. 78164-2-1/8
Marzolf acknowledges that he and Sackett shared a close relationship.
But he contends that this friendship is not tantamount to evidence that Sackett
unquestionably trusted him in real estate matters or that he would not act in any
way against Sackett’s best interest. We disagree. Marzolf did not challenge the
trial court’s finding that he and Sackett “treated each other as family members”
and that he “was like a son to SACKETT.” “Unchallenged findings of fact are
verities on appeal.” Rush v. Blackburn, 190 Wn. Ap. 945, 956, 361 P.3d 217
(2015). Moreover, Sackett specifically testified, “I felt that I could trust him” to
make payments. Substantial evidence supports these findings and the
underlying inferences.
Marzolf next challenges finding of fact 22. This challenged finding of fact
states:
22. Debb[y] Sundheim of the assessor’s office testified that
she recalled the transaction from nearly 12 months ago, which the
Court found a bit hard to believe. But, assuming that she did, the
parties told her the quitclaim deed was a gift, despite the language
on the deed itself which she simply disregarded as boilerplate. The
Court notes that the parties had a motive to lie to her about whether
or not the property was a gift given that they knew at the time that it
would have caused them to pay excise tax which would likely have
been a large amount of money.
Marzolf argues that there was no evidence or testimony that he and
Sackett lied on the deed, on the excise affidavits, or to Sundheim in indicating
that the conveyance was a gift, or that they were motivated by a desire to avoid
paying excise tax. But Sackett testified at length that he never intended to give
Marzolf the farm and that Marzolf agreed to purchase it on specific terms. The
trial court found that Marzolf’s testimony regarding a gift was not credible. And
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No. 78164-2-1/9
several witnesses testified that Sackett was a frugal gentleman who would not
have given the farm away. Substantial evidence supports these findings and the
underlying inferences.
Marzolf also contends that the trial court’s assessment of Sundheim’s
credibility was an abuse of discretion. But appellate courts do not assess
credibility. Boeing Co. v. Heidy, 147 Wash. 2d 78, 87, 51 P.3d 793 (2002).
Moreover, the trial court expressly based this finding of fact on an assumption
that Sundheim did recall the transaction.
Marzolf next challenges finding of fact 2. This challenged finding of fact
states:
2. SACKETT’S long standing estate plan provided for the
bulk of his estate to go to two charities special to him: Pacific
Northwest Research Foundation and Shriner’s Hospital. The farm
property was a large asset and important piece of SAC KETT’S
estate that he intended to sell and liquidate to fund his estate plan.
Marzolf contends that this finding of fact is not supported by substantial
evidence in light of documentary evidence that the transfer was a gift and
Sundheim’s unrebutted testimony that Sackett told her that he was giving the
farm to Marzolf because he had taken such good care of him. But Sackett
testified that the bulk of his estate would go to Pacific Northwest Research
Foundation and Shriner’s Hospital. And Alan Anderson, director of development
for Shriners Hospital for Children of California, testified that Sackett told him the
farm property was among the assets that would be part of his estate. This is
consistent with the testimony of Danielson, Marriott, Minchuk, Castagno, and
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No. 78164-2-1110
Groendyk, all of whom testified regarding Sackett’s efforts to sell the farm. This
finding of fact is supported by substantial evidence.
Marzolf next challenges finding of fact 15. This challenged finding of fact
states:
15. SACKETT has not purchased real property in 45 years
and he did not understand how the execution of a quit claim deed
would fit into the sale. SACKETT accepted MARZOLF’S word and
explanation for the quit claim deed requirement.
Marzolf contends that there was no evidence that Sackett, a savvy real
estate investor with an estate of more than $2.5 million, did not understand what
he was doing when he signed the quit claim deed. He notes that there is no
evidence that Sackett was confused or incompetent when he signed it. This
argument disregards Sackett’s testimony that he signed the deed because he
trusted Marzolf and treated him as family. Moreover, the trial court found that
“MARZOLF misrepresented to SACKETT that a quit claim deed was needed to
get a loan for the down payment from Columbia Bank.” Marzolf failed to assign
error to this finding in his opening brief. “An issue raised and argued for the first
time in a reply brief is too late to warrant consideration.” Cowiche Canyon
Conservancy v. Bosley, 118 Wash. 2d 801, 809, 828 P.2d 549 (1992). This finding
is a verity on appeal. And substantial evidence supports the trial court’s finding.
Marzolf next challenges findings of fact 11 and 12. These challenged
findings of fact state:
11. During the months of February and early March 2017,
SACKETT and MARZOLF negotiated a purchase and sale of the
farm property. The sale terms were similar to the terms SAC KETT
had offered to sell the farm property to neighbors and friends.
Those terms included a sale price of approximately $350,000.00.
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No. 78164-2-I/li
12. SACKETT initially offered to sell the farm property to
MARZOLF for $350,000.00. After negotiations, which concluded
prior to March 13, 2017, agreement was reached. The sale price
and terms agreed to for MARZOLF’S purchase of SACKETT’S farm
property was a $300,000.00 purchase price, $35,000.00 down
payment and monthly payments of $1,000.00 for two years when
the balance would be due. SACKETT agreed to accept monthly
payments of less than $1,000.00 for a few months while MARZOLF
paid off his truck.
Marzolf argues that substantial evidence does not support the court’s
findings regarding the timing of the sale. He notes that Sackett’s testimony was
inconsistent and unclear regarding the specific dates on which the alleged
purchase and sale negotiations took place. In contrast, Marzolf testified that no
negotiations took place until after the quit claim deed was recorded and Sackett
suddenly began demanding payment. But Sackett specified that he and Marzolf
negotiated the terms of sale before the quit claim deed was signed on March 17,
2017. In addition, Groendyk testified that Marzolf was trying to buy the farm as
early as January 2017. And Castagno testified that Sackett spoke with him daily
during the week of March 13, 2017 about the financial aspects of the house sale.
Marzolf also argues that his version of events was corroborated by
Kimberly Harrison of Columbia Bank. She testified that Marzolf came to her in
March 2017 seeking a home improvement loan for a property that had been
gifted to him and that he submitted the application on March 28, 2017. This
testimony does not materially conflict with Sackett’s testimony regarding what
Marzolf told him. Substantial evidence supports this finding.
Marzolf next challenges finding of fact 14. This challenged finding of fact
states:
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No. 78164-2-1/12
14. During the week of March 13, 2017, MARZOLF told
SACKETT that he needed a quit claim deed for the farm property in
order to obtain the bank loan for the purchase. SAC KETT was
clearly eager to assist MARZOLF as he wanted the sale concluded.
SACKETT agreed to give MARZOLF a quit claim deed but not for
the purpose of a gift or to change the terms of the sale.
Marzolf contends that Sackett’s testimony regarding the need to show a
quit claim deed to the bank to obtain a $35,000 down payment loan was not
credible, particularly in light of Harrison’s testimony that Marzolf applied for a
$1 50,000 home improvement loan. Again, we defer to the trial court’s findings
regarding the parties’ credibility. Harrison’s testimony regarding what Marzolf
told her is of no consequence in this regard.
Marzolf next challenges finding of fact 13. This challenged finding of fact
states:
13. During the week of March 13, 2017, MARZOLF talked to
SACKETT on the phone each day and told him of his efforts at
Columbia Bank in Snohomish to obtain financing to purchase the
property. During that time, neighbor Dr. Arthur Castagno visited
daily with SACKETT, observed SACKETT on the phone with
MARZOLF on several occasions and confirmed that SACKETT
gave him a day by day description as to what was happening with
the farm sale to MARZOLF.
Marzolf argues that the record lacks substantial evidence to support a
finding that Marzolf spoke to Sackett about conversations with his bank during
the week of March 13, 2017. Again, this is an issue of credibility. For the same
reasons discussed above, we reject Marzolf’s contention.
Marzolf also contends that substantial evidence does not support a finding
that Sackett spoke with Castagno about the terms of a property sale to Marzolf,
as opposed to some other individual. Marzolf is correct that the trial court
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No. 78164-2-1/13
sustained his objection to Castagno’s testimony regarding the identity of the
person Sackett was speaking to on the phone. However, when viewed in light of
the testimony of Sackett, it is reasonable to infer that Marzolf was the person on
the phone seeking to purchase the farm during that time frame. This finding of
fact is supported by substantial evidence.
Marzolf next challenges finding of fact 20. This challenged finding of fact
states:
20. On March 19, 2017, MARZOLF contacted SACKETT
and told him he was not going to pay for the farm property, that he
now held the deed and he now owned the farm property. This
communication led to an immediate and continuing objection by
SACKETT.
Marzolf contends that there is no evidence in the record that Marzolf
called Sackett on March 19, 2017, or that he reneged on an alleged unwritten
promise to pay for the farm. This is an issue of credibility that we will not review
on appeal.
Marzolf next challenges finding of fact 24. This challenged finding of fact
states:
24. At the time of the execution of the quit claim deed,
SAC KETT did not think he needed independent advice because he
implicitly trusted MARZOLF.
Marzolf contends that this finding is unsupported by substantial evidence
because there is no testimony from Sackett or any other witness that but for his
trust in Marzolf, Sackett would have sought independent advice before signing
the quit claim deed. However, as discussed above, substantial evidence
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No. 78164-2-1/14
supports the finding that Sackett’s actions were motivated by his long-standing
close relationship with Marzolf.
Marzolf next challenges finding of fact 10. This challenged finding of fact
states:
10. MARZOLF told SACKETT’S friend, Earl Groendyk, in
January 2017 that he was trying to buy the farm property.
Marzolf argues that Groendyk’s testimony that he was trying to buy the
farm in January 2017 conflicts with Sackett’s testimony that they started
discussing the matter in March 2017. But Sackett’s testimony revolved around
the parties’ negotiations regarding specific terms for the sale, not the general
topic of buying the farm. The testimony does not conflict. Substantial evidence
supports this finding.
Lastly, Marzolf challenges conclusions of law 2, 3, 4, and 5. These
challenged conclusions of law state:
2. SACKETT has established by clear, cogent and
convincing evidence that he never intended to make a gift of the
farm property to MARZOLF. SACKETT executed the quit claim
deed on March 17, 2017, solely for the purpose of assisting
MARZOLF in obtaining financing for the purchase of the farm
property. There was no donative intent and no valid gift.
3. SACKETT has established by clear, cogent and
convincing evidence the quit claim deed to MARZOLF was
executed on March 17, 2017 as a result of undue influence exerted
by MARZOLF upon SACKETT.
4. The March 17, 2017, quit claim deed recorded under
Snohomish County Auditor’s File No.201703170489 is not valid and
should be set aside and voided.
5. Title to the farm property as legally described in Exhibit A
should be quieted in SACKETT.
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Substantial evidence supports the trial court’s conclusion that clear,
cogent, and convincing evidence establishes that Sackett “never intended to
make a gift of the farm property to MARZOLF.” A valid gift requires an intention
of the donor to give. In re Marriacie of Zier, 136 Wash. App. 40, 47, 147 P.3d 624
(2006). Here, Sackett executed the quit claim deed solely to allow Marzolf to
obtain a down payment to purchase the farm. He had been attempting to sell the
farm to friends and neighbors on the same terms as he offered to Marzolf since
at least 2010. The farm was an important asset that Sackett intended to liquidate
to fund charitable donations via his estate plan. Sackett was known as a frugal
man who would not have given away the farm. And Sackett immediately and
continuously objected when he discovered that Marzolf had decided not to pay.
Substantial evidence also supports the trial court’s conclusion that clear,
cogent, and convincing evidence establishes ‘the quit claim deed to MARZOLF
was executed. . . as a result of undue influence exerted by MARZOLF upon
SACKETT.” The Restatement (Second) of Contracts defines undue influence as
“unfair persuasion of a party who is under the domination of the person
exercising the persuasion or who by virtue of the relation between them is
justified in assuming that that person will not act in a manner inconsistent with his
welfare.” Estates of Jones, 170 Wash. App. at 606 (quoting RESTATEMENT
(SEcoND) OF CONTRACTS § 177(1) (AM. LAW INsT. 1979)). Factors that give rise to
a suspicion of undue influence include a confidential or fiduciary relationship
between the parties, the donee’s active participation in the transaction, and
whether the donee received an unnaturally large part of the estate. Peters v.
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No. 78164-2-1/16
Skalman, 27 Wash. App. 247, 255, 617 P.2d 448 (1980). Other factors include the
age and mental and physical health of the donor, the nature of the relationship
between the parties, the naturalness of the gift, and the opportunity for exerting
undue influence. Kitsar Bank v. Denley, 177 Wash. App. 559, 571, 312 P.3d 711
(201 3).
Here, the parties were not in a confidential or fiduciary relationship. But
Marzolf actively participated in the transaction, which gave him a large portion of
Sackett’s estate. This is particularly unnatural given that Sackett’s estate plan
provided that the bulk of his estate would go to charity, not to individuals. It is
uncontroverted that the parties had a close relationship. Sackett thought of
Marzolf as a son, and trusted him implicitly. Sackett is an elderly man who lives
alone. His mental faculties were intact, but at the time the quit claim deed was
executed, he had just gotten out of the hospital after breaking his hip and was
dependent on others for care and companionship, including Marzolf. These
factors provided Marzolf an opportunity to exert undue influence by telling
Sackett he needed a quit claim deed to get a loan to purchase the farm property.
In sum, the trial court did not err in voiding the quit claim deed and
quieting title in the property to Sackett.
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