Mary Ho-mong Bach, App./cross-resp. v. Anh-duong Thi Ho, Resps./cross-apps.

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IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON Pejo •
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ANH-DUONG THI HO, personally ) 71 71
and as the personal representative ) No. 76132-3-I 4E-01—,
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for the Estate of ANH DUNG HO, ) von"
deceased, ) DIVISION ONE zir
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Respondents, ) .
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v. ) UNPUBLISHED OPINION
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MARY HO-MONG BACH, )
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Appellant. ) FILED: September 4, 2018
)
LEACH, J. — Mary Ho-Mong Bach (Bach) appeals from a trial court order
quieting title to certain property in her deceased grandmother's successors-in-
interest, Anh-Duong Thi Ho(Dee)and the estate of Anh-Dung Ho (Yomi).1 First,
Bach claims the trial court admitted testimony in violation of Washington's dead
man's statute.2 Second, she claims that the statute of limitations for fraud bars
the action. Third, she claims that insufficient evidence supports the trial court's
finding that a confidential relationship existed between Bach and her
grandparents and the facts do not support the conclusion that the Hos did not
1 Both Dee and the estate of Yomi are named respondents in this case.
For simplicity, we refer only to Dee.
2 RCW 5.60.030.
No. 76132-3-1 / 2
intend to gift the property to Bach. Dee cross appeals the trial court's decision
not to disinherit Bach.
First, the trial court did not err in admitting any testimony because no party
that testified about the transaction was a person in interest under the dead man's
statute. Second, because of the confidential relationship between Bach and her
grandparents, Bach is equitably estopped from asserting the statute of limitations
defense. Third, substantial evidence supports the finding of a confidential
relationship. In light of this relationship, the trial court did not err in looking at
extrinsic evidence to decide the transfer was not a gift. Finally, the trial court did
not err in declining to disinherit Bach because this is not a proper proceeding to
do so. We affirm.
FACTS
Andre Linh Tu Ho (Ho) and his wife Hong-Hoc Thi Dang (Dang)(together
the Hos) emigrated from Vietnam with their family in 1975 to escape the
Communist takeover.3 They spent several months in refugee sites. Then a
Catholic church in Renton sponsored the family. The church rented a house in
Renton for their residence. In 1979, the Hos purchased the house from its
owners. They paid off the mortgage in 1996. The house was the Hos' primary
asset.
The trial court's unchallenged factual findings are treated as true on
3
appeal. State v. Homan, 181 Wash. 2d 102, 106, 330 P.3d 182(2014).
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No. 76132-3-1/3
Except for the Hos' oldest daughter, Mong-Diep Ho, the Ho children grew
up in the house. They generally moved out after they married but still lived close
to their parents. The Hos also cared for their grandchildren, including Bach, the
oldest daughter of Mong-Diep Ho. By 2000, the Hos lived in the house with only
Yomi, who had a developmental disability.
When the Hos arrived in the United States, they spoke and understood
very little English. Ho took classes in English. But the trial court found that the
Hos were far from fluent. They relied on their children and grandchildren to act
as interpreters for tasks like filling in information on checks to pay bills,
accompanying them to doctor visits, and corresponding with government
agencies.
On March 27, 2001, the Hos signed a quitclaim deed transferring the
house to Bach for love and affection." Dang claims that the Hos signed the
deed because Bach had told them that the government could take the house to
pay for hospital expenses if they ever became seriously ill. They signed the deed
to avoid this potential loss. Dang claimed that Bach promised to return the house
to them and put a provision stating this in the quitclaim deed. Neither the
quitclaim deed nor any of the accompanying documents contains the promised
provision. Dang claimed that she and Ho trusted Bach to translate because they
did not understand English and could not read the documents.
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No. 76132-3-1 /4
After delivering the deed, the Hos continued to live in the house. They
paid all expenses and taxes related to the house. Sometime later, the Has
began to ask Bach to transfer the house back to them. Several witnesses
testified that they saw Bach tell Ho that she would transfer the house back.
Ho died in July 2013. The trial court found that after Ho's death, Dang
repeatedly asked Bach to transfer the house back to her. Each time, Bach told
Dang that she was too busy. In August 2013, Dang and Dee went to Bach's
office at the Veteran's Hospital to have her sign the papers to transfer title. Bach
refused to see them. Hospital security escorted them off hospital grounds. One
of Dang's children, Dung Ho, testified that after this incident Dang was
hyperventilating, visibly shaken, and upset.
Dee and Dung Ho e-mailed Bach again, demanding that she transfer the
house. Bach responded, stating she did not intend to "steal" the home, that her
busy schedule at work made it difficult to take time off work, and asserting, "I
have no bad intentions and will try to get this done as soon as I can." She later
told Dung Ho, "I am arranging like I told you and will do it as soon as 1 can." She
told Dee,"Thanks for the forms. I will try to get these done as soon as I can and
call you."
Dang filed this lawsuit in December 2013. She died without a valid will in
July 2014. Dee submitted Dang's holographic will to the probate court.
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According to this document, Dang wished to leave all her property to Dee to be
used in the care of Yomi. The probate court found the will was not valid. Then
seven of Dang's children assigned their interests to Dee, ostensibly to honor
Dang's wishes. Yomi did not assign her interest. Mong-Diep Ho assigned any
interest in the property to her daughter, Bach.
After a five-day bench trial, the court found that the Hos did not intend to
gift the property to Bach and that they signed the quitclaim deed without
understanding the nature or consequences of the document. The trial court set
aside the quitclaim deed. It quieted title in Dang's successors-in-interest. Thus,
the trial court determined that Dee was entitled to an undivided 80 percent
interest, Yomi was entitled to an undivided 10 percent interest, and Bach was
entitled to an undivided 10 percent interest.
Bach appeals the trial court's decision to void the quitclaim deed. Dee
appeals the trial court's decision that Bach has a 10 percent interest in the
property.
ANALYSIS
Dead Man's Statute
First, Bach contends that the trial court improperly considered testimony in
violation of Washington's dead man's statute. The parties assert that the
appropriate standard of review for this issue is abuse of discretion. The dead
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No. 76132-3-1 /6
man's statute involves the admission of evidence, and this court reviews
evidentiary issues for abuse of discretion?' But the issue here—whether the
witnesses were parties in interest—is a legal question that we review de novo.5
At trial, three of the Hos' children testified about the transaction: Xuan
(Sue) Kinzler, Anh-Tuyet Thi Ho, and Dung Ho. Bach claims that the dead man's
statute barred their testimony about the transaction because they are parties in
interest. The dead man's statute prevents a person from testifying about a
transaction with a deceased person if they have an interest in that transaction:
[l]n an action or proceeding where the adverse party sues or
defends as executor, administrator or legal representative of any
deceased person,... then a party in interest or to the record, shall
not be admitted to testify in his or her own behalf as to any
transaction had by him or her with, or any statement made to him or
her, or in his or her presence, by any such deceased ... person.i61
"The purpose of the dead man's statute is to prevent interested parties from
giving self-serving testimony regarding conversations and transactions with the
deceased."1 A party in interest is one who stands to gain or lose by the action in
question.5 Interest means pecuniary interest.9 In addition, the interest must be a
4 City of Spokane v. Neff, 152 Wash. 2d 85, 91,93 P.3d 158(2004).
5 See Sunnvside Valley Wig. Dist. v. Dickie, 149 Wash. 2d 873, 879-80, 73
P.3d 369(2003).
6 RCW 5.60.030.
7 Parks v. Fink, 173 Wash. App. 366, 375, 293 P.3d 1275 (2013).
B Hofsvanq v. Estate of Brooke, 78 Wash. App. 315, 321, 897 P.2d 370
(1995).
9 Deacv v. Coll. Life Ins Co. of Am., 25 Wn. App. 419,422, 607 P.2d 1239
(1980).
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direct interest, "the test being whether the witness will gain or lose by the direct
legal operation and effect of the judgment."1° These witnesses originally had an
interest in the property but assigned those interests to Dee before trial. Thus,
Dee claims that they were no longer parties in interest. We agree."
Bach contends that the witnesses acquired an interest in the litigation
when Dang died without a valid will. She asserts that from that time they were
interested parties and that they could not later change their status by assigning
their interests to Dee. Bach primarily relies on an 1895 Washington Supreme
Court case, Gilmore v. H.W. Baker Co.12 We distinguish Gilmore. Gilmore held
that a witness who was a party to a transaction with the deceased could not
testify about the transaction after he had assigned his interest to a corporation in
which he held stock and of which he was the president.13
The facts that the present corporation (appellant) succeeded to the
business ... and that the witness became its president and one of
1° State v. Robbins, 35 Wash. 2d 389, 395, 213 P.2d 310 (1950); see also
Adams Marine Serv. Inc. v. Fishel, 42 Wash. 2d 555, 562-63, 257 P.2d 203 (1953)
("The mere contingency that one might be subjected to an independent claim or
suit, depending upon the outcome of the action in which he is called as a
witness, is not a disqualifying interest within the purview of RCW 5.60.030."); In
re Estate of Sloan, 50 Wash. 86, 91, 96 P. 684 (1908) (stating that the interest
must be a direct interest, present, certain, and vested, not uncertain, remote, or
contingent).
11 Dee makes several arguments to show that Bach waived the dead
man's statute issue. But because we decide that the witnesses were not parties
in interest, we do not address these arguments.
12 12 Wash. 468,41 P. 124 (1895).
13 Gilmore, 12 Wash. at 471-72.
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No. 76132-3-1 / 8
its stockholders, did not remove the disability which the law
imposes upon him as a party in interest. To hold otherwise would,
for practical purposes, be to ignore the spirit of the statute, by
permitting one, whom the law, from considerations of public policy
requires to remain silent as to any transaction had by him with a
deceased person, to evade the statute and avoid the disability
imposed by it and become an effective witness merely by assigning
his interest in the subject matter of the action, or by forming a
corporation in which he might be the president and only
stockholder, and thus by indirection accomplish that which the law
prohibits to be done.t141
Unlike in Gilmore, the witnesses here retained no interest, either direct or
indirect, in the house and thus no pecuniary stake in the outcome of the litigation.
Bach also relies on Lee v. Northwest Trust & Savings Bank.15 Lee and
others sued the Bank, as executor, to reconvey mortgaged property, claiming
that the secured debt had been paid." Lee was one of the persons who signed
the note, the mortgage, and the trust deed.17 The court decided he was a party
in interest even though he "disclaimed all interest in the case so far as he was
concerned and stated that Lee was testifying for the other parties, not for
himself?" The court found that Lee's "declaration of disclaimer of interest
cannot have the effect of avoiding the provisions of the statute?" Lee is different
14 Gilmore, 12 Wash. at 472.
15 128 Wash. 214, 222 P.489(1924).
16 Lee, 128 Wash. at 214.
17 Lee 128 Wash. at 215.
18 Lee 128 Wash. at 215.
19 Lee 128 Wash. at 215-16.
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No. 76132-3-1 / 9
from this case because Lee was a named party in the case and was one of the
appellants from the trial court's judgment.20
This case is more like Olsen v. Kemoe2I and Adams Marine Service Inc. v.
Fishe1.22 In Olsen, the court allowed the chief witness to testify about a
transaction because at the time the lawsuit started, he had no interest in the
action.23 Olsen held that
where one ha[s] a claim of indebtedness against another, who
subsequently dies, and he assigns it to another for a valuable
consideration and retains no interest whatsoever therein, he is a
competent witness to testify for the assignee in an action brought
by the latter on the assigned claim against the estate of the
deceased debtor.(24)
Similarly, in Adams, the witness, who had in good faith disposed of his stock and
interest in the corporation, was not disqualified as a witness because of that
former interest.25 Like in Olsen and Adams Marine, the witnesses here had no
pecuniary interest in the outcome of the litigation. So like those persons, the
witnesses here are not persons in interest.
Bach attaches significance to the timing of the assignments. She points
out that unlike in Olsen, the witnesses assigned their interests after the lawsuit
2° Lee, 128 Wash. at 215.
21 132 Wash. 249, 231 P. 778 (1925).
22 42 Wash. 2d 555, 257 P.2d 203(1953).
23 Olsen, 132 Wash. at 253.
24 Olsen, 132 Wash. at 253.
25 Adams Marine,42 Wn.2d at 561.
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No. 76132-3-1/10
was filed.26 Bach contends that this raises an inference that the assignments
were a tactical and not an economic decision. But Dang died after the lawsuit
commenced and the probate court rejected her will. This explains the timing of
the siblings' assignments. Further, "qualification or disqualification of a witness
depends upon his interest at the time he testifies:27
In Adams Marine, the witness owned stock in the corporation at the time
the lawsuit was filed but had disposed of it by the time he testified.28 The court
stated, "[T]here being no issue here as to the good faith of the transactions
whereby Adams disposed of his stock and interest in the corporation, he was not
disqualified as a witness by reason of his former interest in and active
management of the respondent corporation."29 Bach does not challenge the
validity of the assignments. The record provides no support for her argument
that the witnesses might somehow reacquire their interests. Thus, like in Adams
Marine, the witnesses are not disqualified as a result of their former interest in
the house.
Bach also attempts to distinguish this case from Olsen and Adams Marine
by arguing the assignments lacked consideration. In both those cases, the
26 See Olsen, 132 Wash. at 251 (noting that "at the time of the
commencement of this suit and at the time of the trial, [the witness] had [no]
interest in the sum sought to be recovered by this action").
27 Adams Marine, 42 Wash. 2d at 559.
28 Adams Marine, 42 Wash. 2d at 559.
26 Adams Marine,42 Wn.2d at 561.
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No. 76132-3-1/ 11
witnesses transferred their interest for valuable consideration. But consideration
for the assignments relates to their validity, something Bach does not challenge.
So the sufficiency of consideration does not matter.
Finally, Bach contends that this case differs from Olsen and Adams
Marine because, here, the witnesses assigned shares to an interested party who
was barred from testifying. But Bach does not explain why this matters, and
Olsen and Adams Marine do not find this fact significant.
In sum, we conclude that the witnesses were not persons in interests for
purposes of RCW 5.60.030 and the trial court properly allowed them to testify.
Statute of Limitations
Bach next claims that the trial court should have dismissed the case as
time barred. Whether a statute of limitations bars a claim is a legal question an
appellate court reviews de novo.30 But first, we must decide if a statute of
limitations applies. Bach contends that this is an action for fraud, which is
subject to a three-year statute of limitation.31 Dee asserts that because this is an
action to quiet title, it is not subject to a statute of limitations.32 "The gravamen of
30 Bennett v. Comput. Task Grp., Inc., 112 Wash. App. 102, 106, 47 P.3d
594 (2002).
31 RCW 4.16.080(4).
32 Kent Sch. Dist. No. 415 v. Ladum, 45 Wash. App. 854, 856, 728 P.2d 164
(1986)("There is no statute of limitations with regard to an action to quiet title.");
Petersen v. Schafer, 42 Wash. App. 281, 284, 709 P.2d 813 (1985) ("Actions to
quiet title are not subject to the statute of limitations.").
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No. 76132-3-1/12
the claim determines the applicable statute of limitations."33 We agree with Bach
that the gravamen of the claim is fraud. Thus, the three-year statute of limitations
applies.
Dee relies on Petersen v. Schafer,34 which stated that an action to quiet
title is not subject to the statute of limitations "even though fraud is practiced in
creating the cloud, where the gravamen of the action is to quiet title." In
Petersen, the defendant contended that a three-year statute of limitations should
apply because the action was really one to recover real estate conveyed by a
deed through fraud or mistake.35 This court disagreed because the complaint did
not allege any fraud in the procurement of the real property.36 But, here, the first
amended complaint alleges that fraud and intentional misrepresentation induced
the Hos to transfer the property to Bach. And the trial court relied on this fraud to
void the transfer, stating, "This Court concludes that the misrepresentation
regarding the transfer back provision in the documents constitute fraud in the
execution. The 2001 quitclaim deed transferring the house to Ms. Bach is
therefore void." Thus, we distinguish this case from Petersen.
33Aberdeen Fed. Say. & Loan Ass'n v. Hanson 58 Wash. App. 773, 776,
794 P.2d 1322(1990).
34 42 Wash. App. 281, 284, 709 P.2d 813(1985).
35 Petersen, 42 Wash. App. at 284.
36 Petersen, 42 Wash. App. at 284.
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Similar cases have applied the statute of limitations for fraud?' For
example, in Morgan v. Morgan,38 the court determined that the three-year statute
of limitations for fraud should apply when the basis of the claim to set aside a
deed was fraud. The court reasoned,
The action cannot be classed as one to recover real estate, within
the ten years' limitation statute, although the result might be, in
case of a favorable termination of it for the plaintiff, to restore to her
a portion of the lands quit-claimed to the defendant. To do this she
must have the deed which she executed set aside, and for this
purpose it is necessary to show that it was fraudulently obtained
from her. The alleged fraud of the defendant is the basis of the
plaintiffs action.1391
Here, too, the plaintiffs rely on fraud to void the transfer. Thus, fraud is the
gravamen of the claim and the three-year statute of limitations applies.
Next, the parties dispute when the fraud claim accrued. The statute of
limitations for fraud accrues "when the party discovered, or with the exercise of
due diligence could have discovered, the existence of the fraudulent
conveyance."40 Here, the basis for the trial court's finding of fraud is the absence
31 Morgan v. Morgan, 10 Wash. 99, 108, 38 P. 1054 (1894); see also
Aberdeen Fed. Say., 58 Wash. App. at 776 (applying a three-year statute of
limitations to an action to set aside a purported fraudulent conveyance); Kiener v.
Hood, 126 Wash.431,432-33, 218 P. 1(1923).
38 10 Wash. 99, 38 P. 1054 (1894).
39 MOrClan, 10 Wash. at 108.
40 Aberdeen Fed. Say., 58 Wash. App. at 776; Shepard v. Holmes, 185 Wn.
App. 730, 739-40, 345 P.3d 786 (2014) (courts infer that a party has actual
knowledge of fraud when by the exercise of due diligence, they could have
discovered it).
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of a reconveyance provision in the quitclaim deed. Thus, Bach contends, the
Hos had actual notice of the claim when they signed the deed and the real estate
excise tax affidavit, which stated that the property transferred as a gift.
Washington law "presumes that someone who signs a document knows and
understands its contents."'" The Hos should have known at the time they signed
the deed that it did not say what Bach represented that it would say. Thus, they
had actual notice of the fraud when they signed the deed, and the fraud claim
accrued at that time.42
Dee contends, however, that equitable estoppel bars Bach from raising
the statute of limitations defense. We agree. "The gravamen of equitable
estoppel with respect to the statute of limitations is that the defendant made
representations or promises to perform which lulled the plaintiff into delayed
timely action."43 "'Equitable estoppel is not favored, and the party asserting
estoppel must prove each of its elements by clear, cogent, and convincing
evidence!"44 The elements of equitable estoppel are
41 Romney v. Franciscan Med. Grp., 199 Wash. App. 589, 603, 399 P.3d
1220, review denied, 189 Wash. 2d 1026 (2017).
42 Bach also contends that the Hos had constructive notice of the claim.
But because we decide that the Hos had actual notice of the claim, we do not
consider this argument.
43 Peterson v. Groves, 111 Wash. App. 306, 311,44 P.3d 894 (2002).
44 Peterson, 111 Wash. App. at 310 (quoting Robinson v. City of Seattle, 119
Wash. 2d 34, 82,830 P.2d 318 (1992)).
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No. 76132-3-1/15
(1) an admission, statement, or act inconsistent with a claim
afterward asserted;(2) action by another in reasonable reliance on
that act, statement, or admission; and (3) injury to the party who
relied if the court allows the first party to contradict or repudiate the
prior act, statement, or admission.1451
The existence of a confidential relationship is a key indicator of reliance.46
In Peterson v. Groves,'" for example, the court held evidence of a confidential
relationship, combined with evidence of a false promise, was sufficient to
overcome summary judgment on the issue of equitable estoppel. There,
Peterson loaned money to his stepson, Groves.45 The loans were reduced to
two promissory notes executed in 1982 and 1985.4° Groves promised to pay off
the notes with the proceeds from the sale of property he owned, and because of
their close relationship, Peterson believed him.5° Groves did not sell the property
until 1998 and received the proceeds from the sale in 1999.51 Peterson filed a
lawsuit in 2001.52 The court noted that the statute of limitations on enforcing the
notes had long passed.53 Because of the confidential relationship between
45 Peterson 111 Wash. App. at 310.
46 Peterson, 111 Wash. App. at 311-14.
41 111 Wash. App. 306,44 P.3d 894 (2002).
45 Peterson, 111 Wash. App. at 308.
49 Peterson, 111 Wash. App. at 308.
50 Peterson, 111 Wash. App. at 309.
51 Peterson, 111 Wash. App. at 309.
52 Peterson, 111 Wash. App. at 310.
53 Peterson, 111 Wash. App. at 310.
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No. 76132-3-1 /16
Peterson and Groves, however, the court found that the claim of equitable
estoppel had substance.54
This case is like Peterson. The statute of limitations on the fraud claim
accrued more than three years before Dang filed suit. But because of their
confidential relationship, the Hos reasonably relied on Bach's promises that she
would return the property. Ho and Dang repeatedly asked her to transfer the
property back. And Bach repeatedly told them that she would. Because of the
confidential relationship between Bach and her grandparents, their reliance on
these promises was reasonable and caused them to delay in filing an action to
recover their property. Thus, Bach is estopped from asserting the statute of
limitations defense.
Confidential Relationship
Bach challenges the trial court's decision to shift the burden of proof to
Bach to establish the absence of fraud. She specifically challenges the trial
court's finding that Bach had a confidential relationship with her grandparents
and, as a result, had the burden to rebut the presumption of fraud.
Where a court evaluates evidence in a bench trial, an appellate court limits
its review to determining whether substantial evidence supports the findings of
54 Peterson, 111 Wash. App. at 313-14.
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fact and, if so, whether the findings support the conclusions of law.66 Substantial
evidence is evidence sufficient to persuade a rational fair-minded person of the
evidence.66 Appellate courts do not substitute their view of the facts in the record
for those of the trial judge." They view the evidence and all reasonable
inferences in the light most favorable to the prevailing party.68 The court defers
to the trial court's assessment of witness credibility and evidence weight.69
Generally, "the party seeking to set aside an inter vivos gift has the burden
of showing the gift is invalid."60 When a confidential relationship exists, however,
the burden shifts to the donee to prove by clear, cogent, and convincing evidence
that the gift was intended and not the product of undue influence.61 "Whether a
confidential relationship exists is a question of fact."62 "'A confidential relation
exists between two persons when one has gained the confidence of the other
and purports to act or advise with the other's interest in mind."63 "Family
55 Standing Rock Homeowners Ass'n v. Misich, 106 Wash. App. 231, 242-
43, 23 P.3d 520(2001).
56 Dickie 149 Wash. 2d at 879.
57 Thorndike v. Hesperian Orchards, Inc., 54 Wash. 2d 570, 575, 343 P.2d
183(1959).
513 Korst v. McMahon, 136 Wash. App. 202, 206, 148 P.3d 1081 (2006).
59 In re Welfare of Sego 82 Wash. 2d 736, 739-40, 513 P.2d 831 (1973).
60 Endicott v. Saul, 142 Wash. App. 899, 922, 176 P.3d 560(2008).
61 Endicott, 142 Wash. App. at 922; Pedersen v. Bibioff, 64 Wash. App. 710,
720,828 P.2d 1113(1992).
62 Endicott, 142 Wash. App. at 922.
63 Kitsap Bank v. Denlev, 177 Wash. App. 559, 572, 312 P.3d 711 (2013)
(internal quotation marks omitted) (quoting McCutcheon v. Brownfield 2 Wn.
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No. 76132-3-1 /18
relationships are particularly likely to create confidential relationships." Here,
the trial court found that
Ms. Bach was in a confidential relationship with Mr. Ho and Mrs.
Dang. She was a member of a large close knit refugee family with
a special history of hardships. Through both her family and her
professional positions, Ms. Bach was held in trust by her
grandparents, Mr. and Mrs. Ho. Combined with their lack of fluency
in English, Mr. and Mrs. Ho trusted and relied on Ms. Bach to
accurately and honestly protect and assist them with their primary
asset.
The court stated in a footnote that it "finds credible that Vietnamese culture held
a higher expectation of trust and responsibility from the eldest child and the
eldest grandchild."
This case is similar to Pedersen v. Bibioff.65 In that case, the court found
the existence of a confidential relationship between a father, John, and his son,
James.66 The court noted that substantial evidence supported the trial court's
finding that a confidential relationship existed because of the familial relationship:
they were living together, the relationship was one of trust, love, and devotion,
and the father relied on his son to assist in paying bills and taking care of
business matters." In addition, John was unable to read, write, or understand
App. 348, 357, 467 P.2d 868 (1970)); see also Lewis v. Estate of Lewis, 45 Wn.
App. 387, 391, 725 P.2d 644 (1986).
64 Kitsap Bank, 177 Wash. App. at 572 (citing McCutcheon, 2 Wash. App. at
357).
65 64 Wash. App. 710,828 P.2d 1113(1992).
66 Pedersen,64 Wn. App. at 719.
67 Pedersen,64 Wn. App. at 719.
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No. 76132-3-1/ 19
written English, so he relied on James to help translate documents.68 Like in
Pedersen, the Hos and Bach had a familial relationship characterized by
affection and trust. And because of their lack of fluency in English, the Hos relied
on Bach, as well as their children, to help them with business matters. This is
substantial evidence supporting the trial court's finding of a confidential
relationship.
Bach relies on Kitsap Bank v. Denlev.68 But this case is distinguishable.
In Kitsap Bank, Correll (the decedent) considered a close friend, Lanterno (the
beneficiary), to be like family and believed that Lanterno would act in her best
interests.70 But the court noted that there was no evidence that Correll was in a
particularly vulnerable state.71 She lived by herself and was capable of
managing her affairs.72 The Hos, on the other hand, relied on their children and
grandchildren for a multitude of tasks.
Bach also specifically challenges the court's finding she was in a
professional position at the time of the transfer. She claims that without this
preliminary factual finding, insufficient facts support its ultimate finding about the
confidential relation. If a trial court's preliminary finding is not supported by
68 Pedersen,64 Wn. App. at 719.
89 177 Wash. App. 559, 312 P.3d711 (2013).
7° Kitsap Bank 177 Wash. App. at 573.
71 Kitsap Bank 177 Wash. App. at 573.
72 Kitsap Bank 177 Wash. App. at 573.
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No. 76132-3-1 / 20
substantial evidence and the remaining preliminary findings, taken together, do
not provide substantial evidence to support the ultimate finding, the court should
reverse."
Bach notes that at the time of the transfer she was not yet a doctor. So
she did not have the professional position that the trial court relied on to find the
confidential relationship. But the trial court's findings do not indicate that it relied
on her position as a doctor to find the confidential relationship. Rather, the court
found that, in part, because of "her area of study" Bach was entrusted with title to
the property. At the time of the transfer, Bach was in college, pursuing a
pharmacy degree. Further, in addition to Bach's position, the court relied on the
familial relationship, the Vietnamese culture of honor and trust, and Bach's
proficiency in English relative to the Hos. That Bach was not yet a doctor in 2001
does not undermine the trial court's finding of a confidential relationship in light of
the other evidence to support its conclusion.
Substantial evidence supports the trial court's finding that a confidential
relationship existed. So the trial court did not abuse its discretion when it shifted
the burden of proof to Bach to show that the transfer was, in fact, intended as a
g .74
73 City of Sunnyside v. Gonzalez, 188 Wash. 2d 600, 613, 398 P.3d 1078
(2017).
74 See Pedersen, 64 Wash. App. at 720.
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No. 76132-3-1 / 21
Evidence of Intent That the Property Was a Gift
Next, Bach claims that the trial court erred when it concluded that the Hos
did not intend to gift the house to her. She specifically asserts that the court
should not have used extrinsic evidence to interpret an unambiguous deed.
Generally, if the plain language of a deed is unambiguous, the court will not
consider extrinsic evidence.76 But this rule does not apply in the case of fraud.76
Here, the court concluded that "the misrepresentation regarding the transfer back
provision in the documents constitute fraud in the execution." Fraud in the
execution is a deception about the contents of the instrument." Thus, the
contents of the instrument cannot be relied on to determine intent. Because the
court found evidence of fraud in the execution, it properly considered extrinsic
evidence to determine no gift was intended.
Further, li]f a confidential relationship exists, evidence to sustain the gift
'must show that the gift was made freely, voluntarily, and with a full
75 Dickie, 149 Wash. 2d at 880.
76 Lvnott v. Nat'l Union Fire Ins. Co., 123 Wash. 2d 678, 683, 871 P.2d 146
(1994) (observing that "'parol evidence is not admissible for the purpose of
adding to, modifying, or contradicting the terms of a written contract, in the
absence of fraud, accident or mistake'" (quoting Berq v. Hudesman, 115 Wn.2d
657,669, 801 P.2d 222(1990))); U.S. Life Credit Life Ins. Co. v. Williams, 77 Wn.
App. 861, 864, 894 P.2d 566 (1995)("Absent fraud, accident or mistake, parol
evidence is not admissible to add to, modify, or contradict the terms of a written
contract.").
77 Pedersen,64 Wn. App. at 722.
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No. 76132-3-1/ 22
understanding of the facts.'" Where courts have found a confidential
relationship exits, they have used extrinsic evidence to determine if a gift was
intended." When evidence shows that the deed was obtained through undue
influence, the deed itself cannot be used to show that a gift was intended. The
language of the deed cannot rebut the presumption that the deed was obtained
through fraud.
Bach also asserts that there is a legal presumption of validity for gifts
between close family members. Bach relies on the court's finding that Bach was
close to Ho and saw him as a father figure. But Bach cites no authority to show
that such a presumption exists. Instead, she relies on the rule that "love and
affection is a sufficient consideration for a deed of gift between parent and
child."8° But adequacy of consideration for a gift does not create a presumption
that the gift is valid in light of evidence that the gift was obtained as a result of
fraud.
We find no error in the trial court's conclusions that the Hos did not intend
to gift the property to Bach.81
78 Pedersen, 64 Wash. App. at 721 (quoting McCutcheon 2 Wash. App. at
356).
"See Pedersen, 64 Wash. App. at 720-21.
8° Lehman v. Columbia Fire Ins. Co., 188 Wash. 640, 643, 63 P.2d 442
(1936).
81 Dee makes the alternative argument that the record establishes a
constructive trust. But because we decide that substantial evidence supports the
trial court's finding that a confidential relationship exists and Bach failed to rebut
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No. 76132-3-1 / 23
Cross Appeal
Dee cross appeals. She contends the trial court should have disinherited
Bach. The trial court quieted title of the house in the beneficiaries of Dang's
estate. This included Bach. Bach responds that disinheriting Bach is not an
available remedy in this proceeding. We agree with Bach. Dee relies on
Washington's slayer statute.82 RCW 11.84.020 prevents a financial abuser from
receiving any property or other benefit from a decedent's estate: "No slayer or
abuser shall in any way acquire any property or receive any benefit as the result
of the death of the decedent." Actions under the slayer abuser statutes are
"matters"83 under the Trust and Estate Dispute Resolution Act(TEDRA)." This
chapter states that any judicial proceeding under Title 11 RCW must be
commenced as a new action.85 Thus, the court would have abused its discretion
if it disinherited Bach in this proceeding.
the presumption that the gift was not intended, we need not consider this
argument. We note, however, that the trial court did not determine that equity
required imposition of a constructive trust or make the necessary findings to
support a constructive trust. Thus, the record is insufficient for this court to
decide to impose a constructive trust.
82 Ch. 11.84 RCW.
83 RCW 11.96A.030(2)(e).
"Ch. 11.96A RCW.
85 RCW 11.96A.090(2).
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No. 76132-3-1/ 24
Attorney Fees
Bach requests fees on appeal. This court may award fees to the
substantially prevailing party on review.86 Because Bach does not prevail in her
appeal, we do not award her fees.
Bach also requests fees incurred in the cross appeal. She prevails in the
cross appeal. She asserts that she is entitled to fees under TEDRA.
RCW 11.96A.150 gives courts discretion to award fees to all proceedings
governed by Title 11 RCW. But Bach argued that Dee's cross appeal fails
because it is not a proceeding under Title 11. She contends that whether
RCW 11.84 applies is an issue under TEDRA. Because this issue is not truly a
matter under TEDRA, she is not entitled to fees. Further, Dee's cross appeal is
small in proportion to the numerous issues raised by Bach, and Bach does not
prevail in her appeal. We decline to award Bach fees for the cross appeal.
Finally, Bach requests attorney fees in connection with a motion to
substitute. In February 2018, while this appeal was pending, Yomi, one of the
named respondents, died. RAP 3.2(a) requires substitution of parties to a review
"when it appears that a party is deceased." Under RAP 3.2(b), "[a] party with
knowledge of the death ... shall promptly move for substitution of parties." The
rule also states that "[i]f a party fails to promptly move for substitution, the
86 RAP 14.2.
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No. 76132-3-1/ 25
personal representative of a deceased ... or the successor in interest of a party,
should promptly move for substitution of parties?" Dee filed no motion to
substitute parties. Bach's counsel sent two letters, first asking if Dee's counsel
would file the RAP 3.2 motion and then requesting that they do so no later than
April 5, 2018. The record does not show that Dee's counsel responded to the
letters. Later in 2018, Bach filed a motion to substitute a party for the deceased
respondent, and we granted the motion. Bach asks for attorney fees for this
because Dee did not promptly file a motion to substitute parties as required by
RAP 3.2. But the rule did not impose the duty to move to substitute solely on
Dee. As a party with knowledge of Yomi's death, Bach too could have filed the
motion. For this reason, we deny Bach's request for fees on the RAP 3.2 motion.
CONCLUSION
First, the trial court did not consider testimony in violation of Washington's
dead man's statute because no witness who testified about the transaction was a
person in interest. Second, equitable estoppel bars Bach from asserting the
statute of limitations defense. Third, substantial evidence supports the trial
court's findings about the existence of a confidential relationship and Bach's
failure to rebut the presumption that no gift was intended. Finally, the trial court
87 RAP 3.2(b).
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did not err in declining to disinherit Bach in this proceeding. For these reasons,
we affirm.
WE CONCUR:
r") -
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