Elmer Wagner, App-cross Resp v. Jill Wright, Resp-cross App

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IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
In the Matter of the Estate of
No. 73629-9-1
ELIZABETH K. WAGNER,
DIVISION ONE
ELMER R. WAGNER, as beneficiary, UNPUBLISHED OPINION
Appellant/Cross Respondent,
v.
JILL WRIGHT a/k/a JILL ARCHER, as
Personal Representative and as
beneficiary to the Estate of Elizabeth K.
Wagner; JILL WRIGHT a/k/a JILL
ARCHER, and JOHN DOE ARCHER, and
the marital community composed thereof,
Respondent/Cross Appellant. FILED: September 6, 2016
Appelwick, J. — Elizabeth died in 2010. Her daughter, Jill, was appointed
personal representative of her estate. Elizabeth's surviving husband, Elmer,
disagreed with Jill's distribution of assets and management of the estate. He
brought a TEDRA action to remove Jill and to settle these issues. Jill defended on
the grounds that by typing Elizabeth's will, Elmer engaged in the unauthorized
practice of law and asserted undue influence over Elizabeth. The trial court denied
No. 73629-9-1/2
Elmer's request to remove Jill as personal representative and Jill's claims of
unauthorized practice of law and undue influence. It imposed a community lien on
the house in favor of Elmer, and determined that the remaining proceeds from the
sale of Elizabeth's house and from Elizabeth's oil and mineral rights should be
divided equally amongst the beneficiaries. We affirm.
FACTS
Elizabeth Wagner and Elmer Wagner were married on July 27, 1989. Both
had children from previous marriages. Elizabeth's1 children were Jill Archer,2Todd
Kulesza, and Kurt Kulesza.
In the early 2000s, Elizabeth was diagnosed with COPD (chronic
obstructive pulmonary disease). Elizabeth remained as active as she could,
although she became weaker and needed to be on oxygen.
In 2009, Elizabeth wanted to revise her will. Elmer assisted her by typing
the will on the computer, but Elizabeth made edits to a printed copy until she was
satisfied with the will. Elizabeth gave Jill a draft of the will for her to review the
changes she had made. Then, she executed the will on August 26, 2009.
Like her previous will, Elizabeth's will contained a provision stating, "Both
my husband, Elmer, and I agreed prior to our marriage that assets owned prior to
our marriage would be willed to our respective children per each of our individual
choice." Specific bequests of Elizabeth's separate property followed this provision.
The will gave Elmer a life estate in Elizabeth's house at 30326 10th Avenue South,
1 For clarity and consistency, we refer to the parties and their family
members by their first names. No disrespect is intended.
2 Jill is also known as Jill Wright.
No. 73629-9-1/3
Federal Way, WA (the Federal Way home). It provided that if the life estate
terminated before Elmer's death, the total net proceeds of the sale were to be
divided equally amongst Elizabeth's children and Elmer. Each would receive one-
fourth of the home's value after expenses. Elizabeth gave the residue of her estate
to Elmer. And, Elizabeth appointed her daughter, Jill, as personal representative.
Unlike the previous will, Elizabeth's 2009 will stated that proceeds from the
"Tvedt/Murphy trust" were to be held in trust by Elizabeth's oldest living child and
divided equally amongst Elizabeth's children and Elmer.
Elizabeth died on July 21, 2010, survived by her children and her husband.
Jill's petition to have Elizabeth's will admitted to probate was granted, and Jill
received letters testamentary on September 1, 2010.
Before Elizabeth's death, she and Elmer lived in the Federal Way home.
Elmer continued to live in the home until 2012. After he vacated the home, the
estate sold it.
The estate's attorney advised Jill that she had a one-third interest in the
Federal Way home. Acting on this advice, Jill divided one-third of the proceeds
from the sale equally amongst herself and her brothers. She split the remaining
two-thirds evenly amongst herself, her brothers, and Elmer.
On April 15, 2013, Elmer filed a Trust and Estate Dispute Resolution Act
(TEDRA) petition pursuant to chapter 11.96A RCW. He sought quiet title to the
Federal Way house and rescission of documents executed by Jill. Elmer claimed
that Jill breached her fiduciary duty, had been unjustly enriched, and had unlawfully
No. 73629-9-1/4
converted assets of the estate. And, he requested an accounting and the removal
of Jill as personal representative of the estate.
Before trial, Elmer moved to bar Jill from introducing evidence to suggest
that Elizabeth's will was invalid. He argued that Jill had admitted the will to probate
asserting that it was a valid will, and therefore evidence suggesting that the will
was invalid should be excluded. This motion was denied. In Jill's trial brief, filed
April 15, 2014, she argued for the first time that Elmer could not take under the
will, because he acted as counselor and lawyer for his wife when she executed it.
The case proceeded to trial. The court entered findings of fact and
conclusions of law on June 13, 2014. The court found that there was no evidence
that Jill breached her fiduciary duties, that Elmer acted as Elizabeth's attorney, or
that Elmer exerted undue influence over Elizabeth. The court further found that
Jill did not have an ownership interest in the Federal Way home, but that the value
of the community's mortgage payments and improvements to the property
supported a community/equitable lien. To the extent that the TEDRA action or
Jill's counterclaims could be construed as a will contest, the court declined to apply
the no contest clause of Elizabeth's will. And, the court found that the
"Tvedt/Murphy trust" in Elizabeth's will referred to North Dakota properties,
oil/mineral rights and deeds, and the proceeds generated from them, that she had
inherited from her family.
Based on these findings, the court rejected Elmer's request to remove Jill
as personal representative and denied Jill's counterclaims. The court concluded
that the net proceeds from the sale of the Federal Way property should be
No. 73629-9-1/5
distributed in the amount of $52,143 to Elmer, to represent his share of the
community lien, with the remainder divided equally among all four of the
beneficiaries. And, the court concluded that all of Elizabeth's interests in the North
Dakota properties belonged to the Tvedt/Murphy trust, and the proceeds
generated from those properties would be divided equally among Jill, Todd, Kurt,
and Elmer.
On December 12, 2014, the court held an evidentiary hearing to determine
a final disbursement. Certified public accountant (CPA) Cary Deaton testified as
to the accounting his firm prepared. The court adopted Deaton's accounting and
ruled that the amount owed to Elmer would be paid out of the funds held in the
court registry. But, the court did not enter a final order regarding distribution.
After the evidentiary hearing, the parties continued to contest the order of
the distribution. The trial court ultimately entered a final judgment and order on
June 5, 2015, which was amended on June 23, 2015. This order provided that the
clerk would first release $2,692 from the court registry to pay the accounting firm.
Then, $19,789 would be released to Elmer to offset the overpayments to the other
beneficiaries. After that, all remaining funds were to be distributed 25 percent to
Elmer and 75 percent to the estate.
Elmer appeals the order on his motions in limine, the June 13, 2014 findings
of fact and conclusions of law and order on civil motion regarding fees, the August
4, 2014 order on disbursement of funds, and the final judgment and order. Jill
cross appeals.
No. 73629-9-1/6
DISCUSSION
Elmer contends that the trial court erred by considering Jill's claims of undue
influence and unauthorized practice of law. Elmer asserts that Jill should have
been removed as personal representative. And, Elmer argues that the trial court's
disbursement of funds from the court registry deprived him of $4,947. Jill cross
appeals on the grounds that the trial court erred in interpreting the deed to the
Federal Way home as not granting her an interest in the home. She also argues
that the trial court erred in imposing a community lien against the Federal Way
property. Both parties seek attorney fees.
I. Defenses to TEDRA Action
Much of the evidence produced at trial and the arguments made on appeal
revolves around Elmer's role in drafting Elizabeth's will. Jill contends that the trial
court erred in concluding that Elmer did not engage in the unauthorized practice of
law or exercise undue influence over Elizabeth in the making of her will. Elmer
argues that Jill should have been barred from raising these claims, because they
constituted a will contest. And, he argues that because Jill brought a bad faith will
contest, the trial court erred in not enforcing the no contest clause that would
disinherit Jill.
A. Undue Influence and Unauthorized Practice of Law
The trial court found that there was no evidence that Elmer exercised undue
influence over Elizabeth or engaged in the unauthorized practice of law and
therefore denied Jill's claims. Jill argues that the trial court erred in reaching these
conclusions.
No. 73629-9-1/7
Not every influence exerted over a person can be called undue influence.
In re Estate of Riley. 78 Wn.2d 623, 662, 479 P.2d 1 (1970). To support the
invalidation of a will, the influence exerted over the testator must have been such
that the will no longer reflects the intent of the testator. In re Estate of Bottqer. 14
Wn.2d 676, 701, 129 P.2d 518, (1942). Certain facts may give rise to a
presumption of undue influence, including: (1) the beneficiary had a fiduciary or
confidential relationship with the testator, (2) the beneficiary actively participated
in the preparation of the will, and (3) the beneficiary received an unusually large
part of the estate. In re Estate of Smith, 68 Wn.2d 145, 153, 411 P.2d 879, 416
P.2d 124 (1966). Other factors may include the testator's age, health, and mental
acuity, the nature of the relationship between the beneficiary and the testator, the
opportunity for exerting undue influence, and the naturalness of the will. Id. This
presumption may be overcome by rebuttal testimony. Id. at 153-54.
Here, Elmer had a close relationship with Elizabeth. They were married for
over twenty years. He participated in the preparation of Elizabeth's will by typing
up her wishes. And, he received a large portion of Elizabeth's estate—a life estate
in her home, a life estate in the proceeds from her oil and mineral interests, her
household effects, and all the residue of her estate. These factors could raise a
presumption of undue influence.
But, the testimony of several witnesses rebutted such a presumption.
Elmer's testimony showed that he was merely the scrivener in preparing
Elizabeth's will. Elizabeth gave him the information in a handwritten form, and he
typed her wishes exactly as she expressed them. Elizabeth reviewed and
No. 73629-9-1/8
corrected several drafts before she was satisfied. Afterward, Elizabeth sent drafts
to her children so they would be aware of the changes. By all accounts, Elizabeth
was mentally sharp and active in 2009, when the will was made. Jill testified that
Elizabeth was sharp as a tack, and she knew her own mind. Elizabeth and Elmer's
longtime friend, Harry Hoiland, testified that Elizabeth was strong-willed, and she
would not let Elmer overpower her wishes. Based on this evidence, we conclude
that trial court did not err in denying this claim.
Jill further argues that Elmer's assistance in crafting Elizabeth's will
constituted the unauthorized practice of law, and the trial court erred in allowing
Elmer to recover under the will. Jill points to this court's decisions in In re Estate
of Marks, 91 Wn. App. 325, 957 P.2d 235 (1998) and In re Estate of Knowles, 135
Wn. App. 351, 143 P.3d 864 (2006) to argue that Elmer engaged in the
unauthorized practice of law.3
But, these cases in fact show that Elmer did not act as a lawyer by typing
up Elizabeth's will. In Marks, the decedent asked the friends with whom she was
staying to help her make a will. 91 Wn. App. at 330-31. The trial court found that
the decedent's friends engaged in the unauthorized practice of law by selecting a
will kit, discussing the decedent's distribution of assets and whether it was fair,
obtaining the inventory ofinvestments, typing the will, and arranging for the signing
3As a preliminary matter, we note that the unauthorized practice of law is
not a traditional means of challenging a will. The unauthorized practice of law may
be enjoined civilly, and it is a criminal misdemeanor, but neither ofthose situations
are applicable here. See Wash. State Bar Ass'n v. Great W. Union Fed. Sav. &
Loan Ass'n. 91 Wn.2d 48, 61, 586 P.2d 870 (1978); RCW 2.48.180. Neitherof the
cases Archer cites requires us to hold that the unauthorized practice of law has
any consequence in a will contest.
8
No. 73629-9-1/9
and witnessing of the will. jd. at 335. This finding was not challenged on appeal—
the Court of Appeals made no holding regarding whether such actions constitute
the unauthorized practice of law. See id. at 335-36. The court's holding was simply
that the trial court did not err in voiding the portions of the will relating to the
decedent's friends. Id. at 336.
In Knowles, one of Merle's sons, Randy, wrote the material provisions of
Merle's will on a will form. 135 Wn. App. at 354. The will appointed Randy as
personal representative and left him the majority of Merle's assets. Id. at 354-55.
After Merle died, his other children argued that Randy was barred from taking
under the will because Randy was practicing law when he drafted the will. Id. at
355-56. The Knowles court explicitly disagreed with Marks to the extent it held
that simply completing a will form is the practice of law. Id. at 364-65. Instead, the
Court of Appeals noted that a person practices law by directly or indirectly giving
advice, jd. at 365. And, in Knowles, the decedent's son did nothing more than fill
in the form as the decedent wished. \± at 364. The court held that this falls short
of practicing law. jd.
Here, Elmer's uncontroverted testimony was that he merely typed up the
will as Elizabeth instructed. He stated that he did not add or take out a single thing
that she did not want. He clarified that Elizabeth used her own form to make her
will. Elmer typed the information Elizabeth gave him, and Elizabeth read a printed
copy and made edits until she was satisfied with the will.
We hold that merely typing up another person's will does not constitute the
unauthorized practice of law. Elmer did not offer advice about the form or contents
No. 73629-9-1/10
of Elizabeth's will. There was no evidence at trial that he did anything other than
put Elizabeth's wishes into writing. And, to the extent that Jill argues Elmer should
have taken Elizabeth to a lawyer rather than assist her himself, we hold that
Washington law does not impose a duty on a spouse to ensure the other spouse
consults a lawyer about a will.
Based on the evidence at trial, we hold that the trial court did not err by
denying Jill's defenses.
B. Will Contest and No Contest Clause
Having considered the defenses asserted by Jill, we conclude they were not
defenses necessary to the interpretation or administration of the will, as the trial
court found. They were challenges to the validity of the will itself. Though not
labeled as a will contest, the assertion of these defenses was just that. See In re
Estate of Finch, 172 Wn. App. 156, 159, 162, 294 P.3d 1 (2012) (holding that "[a]
court may treat a motion as a will contest, even where the petitioner styles it
otherwise"); In re Estate of Palmer. 146 Wn. App. 132, 135-37, 189 P.3d 230(2008) (holding that a motion to disqualify trust beneficiaries on the basis of
unauthorized practice of law was, in all important respects, a will contest). The
outcome of this case would have been the same had the trial court granted Elmer's
motion in limine and excluded the defenses as a will contest. However, allowing
these defenses contributed to the protracted litigation and expense and impacted
the equities to some degree.
10
No. 73629-9-1/11
Elmer argues that because Jill's defenses constituted a will contest, Jill was
time barred from raising them.4 And, he asserts that they were factually frivolous.
As a result, he contends that the trial court erred in refusing to apply the no contest
clause of Elizabeth's will. He challenges the trial court's finding of fact 1.61, that
the will contest was necessary to determine the interpretation of the will.
Article VI of Elizabeth's will provided,
Inthe event that any devisee, legatee or beneficiary under this
will, or any one of my heirs shall begin or maintain any proceeding to
challenge or deny any provision of this Will, any share or interest
given to that person shall lapse and go into the residue of my estate
and my Personal Representative is directed and required to refrain
from making any distribution of any sums whatsoever to that person,
if any, who shall seek to contest this will or any of its provisions.
No contest clauses are valid and enforceable in Washington. In re Estate
of Mumbv, 97 Wn. App. 385, 393, 982 P.2d 1219 (1999). However, these clauses
do not operate where the contest is brought in good faith and with probable cause,
jd, Awill contestant will be deemed to have acted in good faith and with probable
cause if the contest was initiated on the advice of counsel after fully and fairly
disclosing the material facts, jd. A contestant acts in bad faith when he or she
engages in actual orconstructive fraud, ora neglect tofulfill a duty thatis motivated
by a sinister or interested reason, rather than an honest mistake. Id. at 394.
Jill contends that these defenses were raised in good faith, because she
proceeded at all times according to the advice of attorneys. Elmer produced no
evidence to the contrary. While it was factually clear that the time period for
4In support ofthis argument, Elmer correctly cites to RCW 11.24.010, which
provides that a person seeking to challenge the validity of a will must petition the
court within four months of the probate or rejection of the will.
11
No. 73629-9-1/12
bringing a will contest had long passed, whether such issues could be used
defensively in a TEDRA action appears to be a matter of first impression.
We conclude that Jill did not act in bad faith in defending the TEDRA action.
Accordingly, we hold that the trial court did not err in deciding not to apply the no
contest clause to disinherit Jill.
II. Removal of Personal Representative
Elmer argues that the trial court erred by not removing Jill as personal
representative of the estate. He contends that because the trial court specifically
found that Jill is no longer a Washington resident, it should have removed her as
personal representative. And, he asserts that Jill has breached her fiduciary duties
to Elmer. Elmer assigns error to the trial court's findings of fact 1.15, finding that
Jill's uncontroverted testimony was that she was acting upon the advice of the
estate's attorney at all times, and 1.16, finding that there was no evidence that Jill
breached her fiduciary duties.
RCW 11.68.070 gives the trial court discretion to remove the personal
representative if he or she is subject to removal for any reason specified in RCW
11.28.250. A personal representative is subject to removal under RCW 11.28.250,
[wjhenever the court has reason to believe that any personal
representative has wasted, embezzled, or mismanaged, or is about
to waste, or embezzle the property of the estate committed to his or
her charge, or has committed, or is about to commit a fraud upon the
estate, or is incompetent to act, or is permanently removed from the
state, or has wrongfully neglected the estate, or has neglected to
perform any acts as such personal representative, or for any other
cause or reason which to the court appears necessary.
12
No. 73629-9-1/13
While RCW 11.28.250 instructs the court to remove a personal
representative who is permanently removed from the state, a person who is not an
in-state resident may act as personal representative if he or she appoints an agent
who is a resident of the county where the estate is being probated upon whom
service of all papers may be made. RCW 11.36.010(6).
Jill lives in Chicago, Illinois. But, Jill appointed the estate's attorney to serve
as resident agent upon whom service of papers may be made. Thus, she complied
with RCW 11.36.010(6)'s condition under which a nonresident may act as personal
representative. Because Jill complied with this condition, the trial court did not err
in deciding not to remove her as personal representative when she resides out of
state.
Elmer further argues that Jill breached her fiduciary duties, and the trial
court erred in not dismissing her as personal representative. He asserts that by
not investigating his community property claim, characterizing nonprobate assets
as residue, failing to properly allocate and distribute the proceeds from the home
sale, and attempting to force Elmer to waive his rights to the estate, Jill breached
her fiduciary duties to him.
The trial court has broad discretion in determining whether and for what
grounds to remove a personal representative. In re Estate of Aaberq. 25 Wn. App.
336, 339, 607 P.2d 1227 (1980). The question on appeal is whether the trial court's
decision is so arbitrary as to amount to an abuse of discretion, jd. at 340. In this
case, the trial court decided not to remove Jill as personal representative, because
13
No. 73629-9-1/14
it found that she was following the advice of the attorney for the estate in all of her
actions as personal representative.
The evidence at trial supports the trial court's findings. Jill testified that the
estate's former attorney developed the theory that Jill had a one-third ownership
interest in the Federal Way house. She also testified that the attorney was
responsible for an accounting that attributed to Elmer the attorney's fees for the
estate's defense of the TEDRA action. Additionally, while the estate obtained new
representation before trial, this attorney continued to support the line of reasoning
advanced by the former attorney.
We conclude that the trial court did not abuse its discretion in deciding not
to remove Jill as personal representative.
III. Distribution of Funds
Elmer argues that the trial court erred in its order distributing funds from the
Tvedt/Murphy trust. Elmer asserts that by first deducting the $19,789 that was
owed to him from the court registry and then dividing the remainder of the funds
equally amongst the four beneficiaries, the court effectively ordered him to pay for
part of the overpayment out of his own inheritance.
Jill's response to this argument is simple: the trial court merely followed the
advice of the accountant, and the accountant was right. The trial court adopted
the accountant's advice. The CPA, Deaton, testified at the earlier evidentiary
hearing to explain his accounting. He stated that if Elmer were compensated his
25 percent of the deficitcapital payments owed by the other beneficiaries, he would
be due an additional $19,000. Deaton opined that this would make Elmer whole
14
No. 73629-9-1/15
again, and going forward, the royalty payments from the Tvedt/Murphy trust would
be divided equally amongst the four beneficiaries.
Before the trial began, the court granted Elmer's motion to have the oil and
mineral deed proceeds deposited into the court registry. After trial, the court stated
in its conclusions of law that the monies held in the court registry would be released
to the Tvedt/Murphy estate trust upon a full accounting of the estate and the
Tvedt/Murphy trust, and upon satisfaction of all outstanding debts and monies
owed to Elmer.
Generally, a court that has custody over funds has the authority and duty to
distribute funds to the party or parties who are entitled to the funds. Pac. Nw. Life
Ins. Co. v. Turnbull, 51 Wn. App. 692, 699, 754 P.2d 1262 (1988). The court has
broad discretion to avoid an unlawful or unjust result in distributing funds, jd.
Here, the other beneficiaries were required to pay back their overpayments
to the estate. The estate then owed Elmer $19,789 to make him whole. This was
not a personal obligation of Jill, Todd, and Kurt. It was the estate's responsibility
to distribute the funds that were owed to Elmer. Deaton's accounting method
treats the estate itself as an entity. Elmer has made no colorable argument
explaining why the trial court abused its discretion by treating the estate as an
entity. The distribution from the court registry effectuated the division of funds
determined in the estate accounting.
Therefore, we affirm the trial court's disbursement of funds.
15
No. 73629-9-1/16
IV. Deed
Jill argues that the trial court erred in interpreting the deed to Elizabeth's
Federal Way home to mean that Jill did not have an interest in the home.
Susan Mischel, Elizabeth's sister, conveyed the Federal Way home to
Elizabeth and her parents, Philip and Mabel Murphy, by a special warranty deed
in 1979. Then, on March 28, 1984, Elizabeth's parents quit claim deeded their
interest in the property to "Elizabeth K. Kulesza or Jill R. Kulesza, mother and
daughter." (Emphasis added.)
Jill's argument requires us to determine what interest is created by a deed
"to A or B." We construe deeds to give effect to the parties' intent. Newport Yacht
Basin Ass'n of Condo. Owners v. Supreme Nw.. Inc., 168 Wn. App. 56, 64, 277
P.3d 18 (2012). Generally, this court determines the parties' intent from the
language of the deed as a whole, giving meaning to every word if reasonably
possible. ]d. Where the language of a deed is ambiguous, extrinsic evidence may
be considered to determine the parties' intent. Sunnvside Valley Irriq. Dist. v.
Dickie, 149 Wn.2d 873, 880, 73 P.3d 369 (2003). Extrinsic evidence includes the
circumstances of the transaction and the subsequent conduct of the parties.
Newport Yacht, 168 Wn. App. at 65.
Here, the language of the deed is ambiguous. It is unclear what interest is
created by the word "or." Jill asserts that the deed should be interpreted as
transferring the property to Elizabeth and Jill as tenants in common. She argues
that under RCW64.28.020, any interest created in favor of two or more persons is
an interest in common unless acquired by a partnership or declared to be a joint
16
No. 73629-9-1/17
tenancy. Because both Elizabeth's and Jill's names appear on the deed, Jill
asserts that this must be construed as creating an interest in common.
Alternatively, Jill argues that the deed could be interpreted as creating a joint
tenancy with right of survivorship.
We disagree with both of Jill's proffered interpretations. A joint tenancy is
created when the four unities exist: time, title, interest, and possession. In re
Domestic P'ship of Reynolds, 183 Wn. App. 830, 854, 335 P.3d 984 (2014), review
denied, 182 Wn.2d 1017, 345 P.3d 784 (2015). And, the defining characteristic of
a tenancy in common is unity of possession. Falaschi v. Yowell, 24 Wn. App. 506,
509, 601 P.2d 989 (1979). Tenants in common have separate and distinct titles,
and they each own a separate estate. \± Both ownership forms at issue require
unity of possession, meaning that each tenant has an equal right of possession.
17 William B. Stoebuck &John W. Weaver, Washington Practice: Real Estate:
Property Law § 1.28, at 57-58 (2d ed. 2004).
The ordinary meaning of the word "or" creates exclusive, alternate rights.5
This is incompatible with both joint tenancy and tenancy in common. In order to
5 In the context of statutory interpretation, Washington courts have
interpreted the word "or" as disjunctive absent clear legislative intent to the
contrary. See, e.g., HJS Dev., Inc. v. Pierce County ex rel. Dep't of Planning &
Land Servs., 148 Wn.2d 451, 473 n.95, 61 P.3d 1141 (2003) ("Ordinarily, the word
'or' does not mean 'and' unless there is clear legislative intent to the contrary.");
State v. Riofta, 134 Wn. App. 669, 682, 142 P.3d 193 (2006) ("We presume that
the word 'or' does not mean 'and' and that a statute's use of the word 'or' is
disjunctive to separate phrases unless there is a clear legislative intent to the
contrary."), affd, 166 Wn.2d 358, 209 P.3d 467 (2009). When interpreting
contracts, courts interpret the word "or" according to context, although "or" is most
commonly used in the disjunctive to indicate an alternative. Black v. Nat'l Merit
Ins. Co., 154 Wn. App. 674, 688, 226 P.3d 175 (2010).
17
No. 73629-9-1/18
find in favor of Jill, we would have to read the word "or" to mean "and." Neither
party has cited any authority to support disregarding the ordinary meaning of "or"
and interpreting it as creating inclusive rights in the context of a deed.
On this briefing and record, we reject the argument requiring us to substitute
"and" for "or" in the deed. We hold that the trial court did not commit an error of
law or an abuse of discretion by concluding that Jill did not have an interest in the
Federal Way home.
V. Community Lien
Jill argues that the trial court erred in imposing a community equitable lien
against the Federal Way home. Therefore, she contends that the award of
$52,143 to Elmer should be reversed.
Presumptions play a large role in Washington community property law. in
re Estate of Borqhi, 167 Wn.2d 480, 483-84, 219 P.3d 932 (2009). The character
of property as separate or community property is determined when the property is
acquired, id. at 484. Once property is established as separate property, a
presumption arises that it remains separate property, id.
Washington law has long recognized that the community has a right to
reimbursement for the funds expended in improvement of separate property. In re
Estate of Trierweiler, 5 Wn. App. 17, 22, 486 P.2d 314 (1971). A lien may arise
when community property or one spouse's separate property is used to improve
the other spouse's separate property, id.18
No. 73629-9-1/19
Jill does not dispute the facts underlying the community lien claim. Elmer
testified that the mortgage payments for the property were paid out of their joint
account. Both he and Elizabeth deposited funds into this account. While Elizabeth
was still alive, they refurbished the entire house. They installed a new kitchen,
installed new windows and doors, put new fixtures in the bathroom, replaced the
molding throughout the house, and painted. These renovations were also paid out
of a joint account. Based on this evidence, the trial court found that the value of
the mortgage payments and improvements to the property was $104,2686—a
finding Jill does not dispute.
Instead, Jill relies on In re Marriage of Miracle, 101 Wn.2d 137, 675 P.2d
1229 (1984) to argue that any improvement Elmer contributed to the Federal Way
property was offset by the benefit conferred to the community. Miracle was a
dissolution case in which the trial court offset the community's beneficial use of
one spouse's separate property against the amount of community funds used to
make payments on the property. 101 Wn.2d at 137-38. On appeal, the court noted
that the trial court's decision to impose an equitable lien is reviewed only for an
abuse of discretion, given the equitable nature of dissolution proceedings, id. at
139. The court held that the trial court did not abuse its discretion by refusing to
impose an equitable lien, because the community was adequately compensated
for its expenditures by its beneficial use of the property, id. This was because the
6 The trial court admitted multiple exhibits at trial that supported this finding,
including invoices for the home improvements and checks for mortgage payments.
However, these exhibits are not in the record on appeal.
19
No. 73629-9-1/20
reasonable rental value of the home exceeded the payments that the community
had made on it. id. at 138.
TEDRA is also a proceeding in equity, where the court must take into
account all the circumstances. RCW 11.96.A.020(2). We review this decision for
an abuse of discretion. Clearly, the trial court had the discretion to offset the
community lien by the fair rental value of the property. However, Jill did not offer
evidence of the fair rental value of the property during the time that the community
lived in the home.7 The trial court was not required to presume that the fair rental
value of the home was greater than or equal to the mortgage payments. Without
evidence on which to base an offset, the trial court would have had to speculate
about the fair rental value of the home.
Based on the facts in evidence, we hold that it was not an abuse of
discretion to impose the community lien without offset for community use.
VI. Attorney Fees
Both Elmer and Jill argue that they are entitled to attorney fees. Elmer
requests attorney fees at the trial level and on appeal, citing RAP 18.1, RCW
11.96A.150, and RCW 11.24.050. Jill also requests fees under RCW 11.96A.150.
RCW 11.96A.150 gives the trial court and the appellate court discretion to
award costs, including attorney fees, in a TEDRA action. The court may order
costs to be paid in such amount and manner as the court determines to be
7 Jill points out on appeal that the community rented out the Federal Way
home for a period of time. But, no evidence was presented that the rent they
charged during this period was a proper measure of the fair rental value of the
home during the time period that the community resided there.
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No. 73629-9-1/21
equitable, id. Weighing the equities here, we decline to award attorney fees to
either party.
We affirm.
WE CONCUR:
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