In Re Joanne K Blankenship Survivor's Trust

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
In re the JOANNE K. BLANKENSHIP
SURVIVOR’S TRUST established under No. 81466-4-I
The Blankenship Family Trust created
January 15, 1993, as amended DIVISION ONE
September 20, 2010 and December 10,
2014,
PUBLISHED OPINION
NATHAN RUSSELL KROG,
Petitioner,
v.
LYNN A. PARKE, Co-Trustee of The
Blankenship Family Trust and Trustee of
the Joanne K. Blankenship Survivor’s
Trust; and BARBARA A.
BLANKENSHIP, Co-Trustee of The
Blankenship Family Trust,
Respondents.
CHUN, J. — Joanne and Donald “Don” Blankenship, wife and husband,
created a revocable trust—the Blankenship Family Trust (Trust)—designating
their children from prior marriages as beneficiaries and themselves as trustees.
The Trust requires that, upon the first of Joanne’s1 or Don’s death, the trustee or
trustees must divide the Trust estate into two separate trusts, the “Survivor’s
Trust” and the “Family Trust.”
1
For clarity, we refer to the members of this family by their first names. We
mean no disrespect.
No. 81466-4-I/2
Joanne’s daughter Lynn and Don’s daughter Barbara later took over as
cotrustees (Cotrustees). Soon after, in a separate guardianship matter, the
family entered a CR 2A agreement barring Joanne and Don from changing the
Trust document and requiring the Cotrustees to give a yearly accounting of
Joanne’s trust estate to appellant Nathan Krog, her grandson.
After Don’s death and some delay in the funding of the Survivor’s Trust,
Nathan petitioned under the Trust and Estate Dispute Resolution Act, ch. 11.96A
RCW, (TEDRA) against the Cotrustees and requested an accounting of the
assets in the Survivor’s Trust and their removal as trustees. Both sides moved
for summary judgment. The trial court denied Nathan’s motion and granted the
Cotrustees’ motion. The court also awarded $85,913.95 in attorney fees and
costs to the Cotrustees.
For the reasons discussed below, we affirm the trial court’s summary
judgment rulings. We remand for entry of findings of fact and conclusions of law
supporting the award of attorney fees and costs. And we award attorney fees
and costs to the Cotrustees on appeal.
I. BACKGROUND
In 1993, Don and Joanne created the Trust, a revocable trust with
themselves as the grantors and cotrustees. The Trust names as beneficiaries
Don’s four children from a prior marriage (Donald Jr., Barbara, Jeffrey, and Mark
Blankenship) and Joanne’s three children from a prior marriage (Lori Brandt,
Leigh Brandt Krog, and Lynn Park). The Trust also provides that if either of the
grantors is unwilling or unable to serve as a trustee, then one of that grantor’s
2
No. 81466-4-I/3
children, in a certain order prescribed by the Trust, must serve as their successor
trustee.
The Trust provides that upon the first of Don’s or Joanne’s death, the
trustee or trustees must divide the Trust estate into two separate trusts, one
designated as the “Survivor’s Trust” and the other as the “Family Trust.” It
defines the Survivor’s Trust as a revocable trust consisting of the surviving
spouse’s interest in the grantors’ community estate, including any undistributed
or accrued income, and the surviving spouse’s separate property. It defines the
Family Trust as an irrevocable trust consisting of the deceased spouse’s interest
in the grantors’ community estate, including any undistributed or accrued income,
the deceased spouse’s separate property, and any assets payable to the trust
because of the deceased spouse’s death. It allows the trustee or trustees to pay
the surviving spouse principal from the Family Trust as necessary for the
surviving spouse’s support, maintenance, education, and health. And it allows
the surviving spouse to elect to distribute the remaining balance of the Family
Trust to the deceased spouse’s children. Upon the death of the surviving
spouse, the trustee or trustees must distribute the remaining balance of each
trust to the associated grantor’s children.
In 2010, Don and Joanne amended the Trust in a separate document that
removed Leigh as one of Joanne’s beneficiaries and left Lynn with a two-third
3
No. 81466-4-I/4
interest in Joanne’s residual estate.2 The document replaced Leigh, who had
held a one-third interest, with her son, Nathan, who took over her former interest.
In 2014, Don and Joanne incorporated the 2010 amendment into the Trust
document and amended the Trust to state that if both grantors are unable or
unwilling to serve as a trustee, Barbara and Lynn will serve as cotrustees.3
Disputes arose between Leigh and the family about elder care for Don and
Joanne. In 2016, Don, Joanne, Barbara, Lynn, Leigh, Denise Cox, 4 and Nathan
entered a Civil Rule 2A agreement (CR 2A) to end pending guardianship
litigation about the care. The CR 2A requires Don and Joanne to “not make any
other changes to the Trust document.” It requires Lynn “to provide to Nathan, as
contingent beneficiary, an annual report of Joanne’s Trust assets due by
March 1, 2017 and annually thereafter.” And in the CR 2A, Leigh agreed that
she is not a beneficiary of the Trust and would disclaim any inheritance from Don
or Joanne.
Don died in October 2018. Two months later, Nathan requested a
“complete list of trust assets and liabilities.” After Barbara, through counsel, told
Nathan he is not entitled to that information because he is not an income
beneficiary, he claimed the Cotrustees had breached the CR 2A and
2
Lori Brandt, Joanne’s daughter and her named beneficiary in the original Trust
document, died in 2008.
3
The record does not make clear when Barbara and Lynn began to act as
cotrustees.
4
Denise Cox is Don and Joanne’s niece. She is a party to the CR 2A but is not a
Trust beneficiary.
4
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RCW 11.98.072. Lynn’s attorney denied any such breach. The Cotrustees did
not fund the Survivor’s Trust during this period.
In November 2019, Nathan petitioned for a trust accounting and inventory,
damages, and removal of trustees under TEDRA. He requested a declaratory
judgment that he is a qualified beneficiary and an order requiring the Cotrustees
to provide him an accounting of the Survivor’s Trust. He also alleged breach of
fiduciary duty by the Cotrustees on the grounds that they had not yet funded the
Survivor’s Trust as required by the Trust’s terms, and had not kept Nathan, as a
qualified beneficiary, reasonably informed about the administration of the
Survivor’s Trust. Nathan requested damages associated with the breach of
fiduciary duty, removal of Lynn as Trustee, and an award of attorney fees and
costs.
In February 2020, the Cotrustees and the beneficiaries of the Family Trust
entered a Nonjudicial Binding Agreement (NJB), in which they agreed to split
Don and Joanne’s assets in a 75 to 25 percent ratio between the Family Trust
and Survivor’s Trust, respectively. This split stemmed from analysis by Don and
Joanne’s accountants and a determination by the Cotrustees that Don’s
“separate property together with his share of jointly owned property comprised
[75 percent] of the Trust assets and Joanne’s separate property together with her
share of jointly owned property comprised [25 percent] of the Trust [a]ssets.”
Nathan did not sign the NJB.
Also in February 2020, in this matter, a King County Superior Court
commissioner entered an order enforcing the CR 2A that directed the Cotrustees
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to provide a report to Nathan, by March 16, 2020, identifying the 25 percent of
the assets that comprise or will comprise the Survivor’s Trust.
By March 2020, the Cotrustees had created and funded the Survivor’s
Trust and provided Nathan with a list of its assets.
Also in March, Barbara moved for summary judgment dismissal of
Nathan’s petition and requested an award of attorney fees and costs, and Lynn
joined her motion. The Cotrustees said that: (1) Nathan is not an income
beneficiary of the Trust, so he has no right to receive an accounting under its
terms; (2) under the CR 2A, Nathan is entitled to only an annual report of the
Survivor’s Trust assets; and (3) the Cotrustees have breached no duty to him in
relation to funding of the Survivor’s Trust.
Nathan moved for partial summary judgment. He requested the court: (1)
conclude that he is a beneficiary of the Trust and the Survivor’s Trust; (2)
conclude that he has a right to receive an accounting and report of the Survivor’s
Trust annually under the CR 2A; (3) conclude that he has standing to petition for
the removal of the Cotrustees under RCW 11.98.039(4) and 11.96A.030; (4)
remove Lynn and Barbara as cotrustees of the Survivor’s Trust because of their
refusal to provide information about it to him, their conflicts of interest, and
hostility towards him; and (5) award him attorney fees and costs under
RCW 11.96A.150.
The trial court granted the Cotrustees’ motion and, the same day, it denied
Nathan’s motion. It awarded the Cotrustees $85,913.95 in attorney fees and
costs.
6
No. 81466-4-I/7
Nathan appeals.
II. ANALYSIS
A. The Cotrustees’ and Nathan’s Summary Judgment Motions
Nathan says the trial court erred in granting the Cotrustees’ summary
judgment motion because he has a right to an accounting of the Survivor’s Trust,
and because the Cotrustees breached their duties to him and should have been
replaced. He also says the trial court erred in denying his motion for summary
judgment for substantially similar reasons.5 We disagree.
We review de novo a summary judgment ruling. Blue Spirits Distilling,
LLC v. Wash. State Liquor & Cannabis Bd., 15 Wn. App. 2d 779, 785, 478 P.3d
153 (2020). Summary judgment is appropriate if there is no genuine issue as to
any material fact and the moving party is entitled to a judgment as a matter of
law. Id.; CR 56(c). In ruling on a summary judgment motion, a trial court must
view the evidence and reasonable inferences from it in the light most favorable to
the nonmoving party. Blue Spirits Distilling, 15 Wn. App. 2d at 785. We also
interpret de novo a trust instrument, and our primary duty when interpreting a
5
The Cotrustees say that since Nathan did not include the trial court’s order
denying his summary judgment motion in his notice of appeal, under RAP 4.2(b), we
should not consider it. But the Cotrustees’ briefing addresses the arguments Nathan
raises relating to the denial. Also, Nathan raises substantially similar arguments for
reversing both orders. Thus, our consideration of the unappealed order would not
prejudice the Cotrustees. Under RAP 1.2(a) and RAP 18.8(a), we consider the
summary judgment denial despite Nathan’s failure to strictly comply with RAP 2.4. See
In re Truancy of Perkins, 93 Wn. App. 590, 594, 969 P.2d 1101 (1999) (considering
unappealed orders of contempt when the respondent addressed the contempt issues
and would not be prejudiced by the court’s decision to review them) (abrogated on other
grounds by Bellevue Sch. Dist. v. E.S., 148 Wn. App. 205, 199 P.3d 1010 (2009)).
We address the arguments directed towards the summary judgment denial
where they differ from those directed towards the summary judgment grant—specifically,
at footnote 13.
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No. 81466-4-I/8
trust is to give effect to the trustor’s intent. In re Guardianship of Jensen, 187
Wn. App. 325, 331–32, 350 P.3d 654 (2015).
1. Right to accounting of the Survivor’s Trust
Nathan claims that he has a statutory and common law right to an
accounting of the Survivor’s Trust. We disagree and also conclude that the
terms of the Trust bar him from receiving such an accounting.
a. Statutory right to accounting
Nathan asserts incorrectly that since he is a “Qualified beneficiary” under
RCW 11.98.002(2) and a “Remainder beneficiary” under RCW 11.104A.005(11),
he is entitled to an accounting of the Survivor’s Trust.
i. Qualified beneficiary
A qualified beneficiary is a trust beneficiary who, on the date that such
beneficiary’s qualification is determined:
(a) Is a permissible distributee;
(b) Would be a permissible distributee if the interests of the
distributees described in (a) of this subsection terminated on that
date; or
(c) Would be a permissible distributee if the trust terminated
on that date.
RCW 11.98.002(2).
Under RCW 11.98.072(1), “[a] trustee must keep all qualified beneficiaries
of a trust reasonably informed about the administration of the trust and of the
material facts necessary for them to protect their interests.” But “[w]hile the
trustor of a revocable trust is living, no beneficiary other than the trustor is
entitled to receive any information under this section.” RCW 11.98.072(4)
8
No. 81466-4-I/9
(emphasis added). And under RCW 11.103.040, “[w]hile the trustor of a
revocable trust is living, the rights of the beneficiaries are subject to the control
of, and the duties of the trustee are owed exclusively to, the trustor.” (Emphasis
added.)
Joanne is a permissible distributee of the Survivor’s Trust. Since Nathan
would be a permissible distributee if her interest terminated, he is a qualified
beneficiary. But since Joanne is still living, RCW 11.98.072 would not entitle
Nathan to be reasonably informed about its administration if the Survivor’s Trust
is revocable, and under RCW 11.103.040, the Cotrustees would owe their duties
exclusively to Joanne. We conclude that, as discussed below, the Survivor’s
Trust is revocable and thus that Nathan has no right to an accounting under
RCW 11.98.072.
Nathan says the Trust and the Survivor’s Trust are irrevocable. He points
to the CR 2A, in which Don and Joanne agreed not to “make any other changes
to the Trust document.” (Emphasis added.) But the Trust document, as written,
still allows Joanne to revoke the Survivor’s Trust or withdraw any of the assets
transferred to it.6 An agreement not to change the Trust document differs from
6
Article III of the Trust provides, in applicable part:
3.1. Rights Reserved to Each Grantor. Each Grantor while living
reserves the right as to the assets transferred to, attributable to, or derived
from property contributed by such Grantor;
(a) To withdraw from the operation of the trust estate any part or all of
the assets transferred to the trust, or assets representing or derived from
property contributed by such Grantor;
(b) To revoke, modify or amend in whole or in part this instrument as
to such assets;
...
9
No. 81466-4-I/10
an agreement not to revoke the Trust or Survivor’s Trust; indeed, the applicable
statute for amending or revoking trusts refers to revocation and amendment
disjunctively. See RCW 11.103.030(3).7 We also note that the CR 2A calls
Nathan a “contingent beneficiary”—but if the CR 2A rendered the Survivor’s Trust
irrevocable, he would be a vested beneficiary. Because the Survivor’s Trust is
revocable, Nathan has no right to accounting as a qualified beneficiary under
RCW 11.98.072.
ii. Remainder beneficiary
Nathan also says that because he is a remainder beneficiary under
RCW 11.104A.005(11), he has the right to petition the court “for information and
enforcement of [his] rights” under RCW 11.104A.005(2), 11.100.045, 11.106.040,
and 11.98.039(4). But RCW 11.104A.005(2) and 11.100.045 do not provide
3.4 On the death of the deceased spouse, the surviving spouse, shall
have the power to amend, revoke, or terminate the Survivor’s Trust, but the
Family Trust may not be amended, revoked or terminated. On the death
of the surviving spouse, neither Trust may be amended, revoked, or
terminated. On revocation or termination of the Survivor’s Trust, all of its
assets and the rents, issues, profits and proceeds therefrom shall be
delivered to the surviving spouse.
(Emphasis added.)
7
RCW 11.103.030(3) provides, in applicable part:
The trustor may revoke or amend a revocable trust:
(a) By substantial compliance with a method provided in the terms of
the trust; or
(b)(i) If the terms of the trust do not provide a method or the method
provided in the terms is not expressly made exclusive, by:
(A) A later will or codicil that expressly refers to the trust or specifically
devises property that would otherwise have passed according to the terms
of the trust; or
(B) A written instrument signed by the trustor evidencing intent to
revoke or amend.
(Emphasis added.)
10
No. 81466-4-I/11
Nathan any such right. And while RCW 11.106.040 allows any beneficiary to
“ask[] the court to direct the trustee . . . to file in the court an account,” a court
could not properly grant that request here, since RCW 11.98.072(4) gives no
beneficiary other than the trustor of a revocable trust any entitlement to
information while the trustor is alive. RCW 11.98.039(4) allows a beneficiary to
petition the court to change a trustee, but as addressed below, the Cotrustees do
not contest Nathan’s standing to so petition and instead contest the replacement
petition on its merits.
We conclude that Nathan has not shown he has a statutory right to an
accounting of the Survivor’s Trust.
b. Right to accounting despite terms of the Trust
The Cotrustees also say that section 9.2 of the Trust document limits
Nathan’s right to information about the Trust, since he is not an income
beneficiary of it.8 The section provides:
Books and Records. The Trustee shall be relieved from any duty
under the laws of the State of Washington to file any documents or
other accountings in any court. The Trustee shall keep strict
accounting records of the Trust and shall at all times hold the same
open to inspection by any income beneficiary. The Trustee shall act
without bond.
Nathan counters that despite the Trust’s language, he has a right to information
under RCW 11.97.010, which allows a trustor to relieve a trustee of certain
duties, except those provided by, as applicable here, RCW 11.98.072(1), which
8
The Trust document does not define “income beneficiary,” but
RCW 11.104A.005 provides that an income beneficiary “means a person to whom net
income of a trust is or may be payable.”
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No. 81466-4-I/12
requires a trustee to keep all qualified beneficiaries reasonably informed about
trust administration.
Nathan is not receiving income from the Survivor’s Trust since Joanne is
still alive. Thus, he is not an income beneficiary and the Cotrustees have no duty
under section 9.2 to hold the accounting records open to his inspection. And
although RCW 11.98.072(1) limits a trustor’s ability to limit a trustee’s duties, as
addressed above, RCW 11.98.072(4) provides that a trustee need not inform
beneficiaries about trust administration if, as here, the trustor of a revocable trust
is alive.9
c. Common law right to accounting
Nathan also contends that he has a common law right to an accounting of
the Survivor’s Trust, so the trial court erred in granting the Cotrustees’ motion for
summary judgment. We disagree.
Nathan says that under In re Estate of Bernard, 182 Wn. App. 692, 332
P.3d 480 (2014), he has a common law right to an accounting of the Survivor’s
Trust. Nathan refers to a passage in Bernard where this court said that certain
contingent trust beneficiaries “appear[]” to fall within the category of “trust
beneficiaries” who have standing as a “party” to bring an action under TEDRA.
Id. at 723–24.10 Nathan says that because he is a contingent remainder
9
Nathan’s opening brief addresses the Cotrustees’ summary judgment argument
that he waived his right to information upon his signing the CR 2A. Because the
Cotrustees do not renew this argument on appeal, we do not address it.
10
A “party” under RCW 11.96A.030(5) has standing to initiate a TEDRA petition.
RCW 11.96A.080; In re Estate of Becker, 177 Wn.2d 242, 249, 298 P.3d 720 (2013).
“Trust beneficiaries” are one of the enumerated categories of persons constituting
parties under RCW 11.96A.030(5).
12
No. 81466-4-I/13
beneficiary of the Survivor’s Trust, he has standing to request information about
the trust under TEDRA. But he ignores the portions of Bernard in which the court
went on to conclude that the contingent trust beneficiaries there did not constitute
“parties”—and thus, had no such standing—since they lacked a present interest
in the revocable trust at issue. Id. at 724–25. The court favorably cited a
decision from Florida that concludes that a guardian could not contest the validity
of a revocable trust during the settlor’s lifetime based on undue influence, since
“‘a revocable trust is a unique instrument which has no legal significance until the
settlor’s death.’” Id. at 724 (quoting Ullman v. Garcia, 645 So.2d 168, 170 (Fla.
Dist. Ct. App. 1994)). It also favorably cited a California decision that reasoned
that
With the creation of an irrevocable trust, trust beneficiaries acquire a
vested and present beneficial interest in the trust property, and their
interests are not subject to divestment as with a revocable trust.
Thus, the nature of a beneficiary’s interest differs materially
depending on whether the trust is revocable or irrevocable.
Id. (quoting Empire Props. v. County of Los Angeles, 44 Cal. App. 4th 781, 787,
52 Cal. Rptr. 2d 69 (1996)). Since the Survivor’s Trust is revocable and Nathan
does not have a present interest in it, Bernard does not support Nathan’s
assertion of standing to request an accounting.
Nathan says that under Allard v. Pacific National Bank, trustees must
provide enough information to trust beneficiaries to allow them to protect their
interests. 99 Wn.2d 394, 404–05, 663 P.2d 104 (1983). But unlike the
beneficiaries in Allard, who held a present interest in the trust, Nathan may have
an interest in the Survivor’s Trust only after Joanne’s death. Id. at 396 (noting
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No. 81466-4-I/14
that the plaintiff-beneficiaries had a present right to receive income from the
trust).
Nathan also says that under RCW 11.106.020 and In re Estate of Ehlers,
a trustee must generate annual itemized statements of receipts and
disbursements of trust principal and income, and that “any beneficiary, including
one who holds only a present interest in the remainder of a trust, is entitled to
petition the court for an accounting.” 80 Wn. App. 751, 758, 911 P.2d 1017(1996). But under RCW 11.97.010, a trustee need not make disclosures
required by RCW 11.106.020 if, as the Trust provides in section 9.2, the trustor
relieves the trustee of such duties. And unlike the beneficiaries in Ehlers, who
held a present interest in the trust, Nathan may have a present interest in the
Survivor’s Trust only after Joanne’s death. Id. at 754–55 (noting that the
petitioner-beneficiaries for an accounting held an interest in the trust estate
following the death of their mother and grandmother).
Nathan has not shown any common law right to accounting.
2. Replacement of the Cotrustees
Nathan says there are genuine issues of material fact that the Cotrustees
breached their duties to him. He says the Cotrustees did so by failing to timely
fund the Survivor’s Trust, failing to respond to requests for information, failing to
treat him impartially, and harming the Survivor’s Trust. Even when viewing the
evidence and inferences from it in the light most favorable to Nathan, he has not
shown a genuine issue of material fact that the Cotrustees breached their duties
to him.
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“[A] trustee is a fiduciary who owes the highest degree of good faith,
diligence and undivided loyalty to the beneficiaries. A trustee’s duties and
powers are determined by the terms of the trust, by common law and by statute.”
Ehlers, 80 Wn. App. at 757 (citations omitted). Under RCW 11.98.039(4), any
beneficiary of a trust may petition the court to appoint or replace a trustee for any
reasonable cause.11 “Reasonable cause has generally been construed as
requiring a breach of fiduciary duty, a conflict of interest, or bad will generated by
litigation.” Bartlett v. Breach, 136 Wn. App. 8, 20, 146 P.3d 1235 (2006).
a. Delay in funding the Survivor’s Trust
Nathan says the Cotrustees breached their duties by waiting 15 months
after Don’s death to fund the Survivor’s Trust. But nothing in the Trust document
or any applicable law says that the Survivor’s Trust must be funded within a
certain time. And the Cotrustees apparently had good reason for the delay, since
funding the Survivor’s Trust required division of Don and Joanne’s assets,
employment of multiple accounting firms, and analysis of their separate and
community property. Nor does Nathan seek to explain how the Cotrustees
lacked a good reason for the delay.
b. Failing to respond to requests for information
Nathan asserts the Cotrustees breached their duties by failing to respond
to his requests for information about the Survivor’s Trust. But as discussed
11
The Cotrustees say we should review the decision not to remove them as
trustees for abuse of discretion, citing Ehlers, 80 Wn. App. at 761. But since we are
reviewing the trial court’s decision on summary judgment, we do so de novo. Blue
Spirits Distilling, 15 Wn. App. 2d at 785.
15
No. 81466-4-I/16
above, since the Survivor’s Trust is revocable and Joanne is still alive, the
Cotrustees do not owe Nathan any duty to provide an accounting. The only
information the Cotrustees must provide Nathan is an annual report of Joanne’s
trust assets as prescribed by the CR 2A. The Cotrustees did provide such an
accounting once Joanne’s assets were identified.
c. Failing to treat Nathan impartially
Since “‘[i]t is the duty of a trustee to administer the trust in the interest of
the beneficiaries,’” reasonable cause for removal “may include conflict of interest
between the trustee and the trust beneficiaries.” Porter v. Porter, 107 Wn.2d 43,
55, 726 P.2d 459 (1986) (quoting Tucker v. Brown, 20 Wn.2d 740, 769, 150 P.2d
604 (1944)); see also Ehlers, 80 Wn. App. at 761 (“Reasonable cause has been
found in situations involving conflict of interest and bad will generated by
litigation”). And a trustee must act impartially in investing and managing a trust’s
assets, considering any differing interests of the beneficiaries. RCW 11.100.045.
Nathan says that the Cotrustees showed bias and partiality against him by
entering an NJB, which split Don and Joanne’s assets in a 75 to 25 percent ratio,
with all the beneficiaries aside from him and while refusing to mediate with him,
and by criticizing his mother in their motion in support of summary judgment.12
But Nathan cites no law in support of his assertion that Joanne should be entitled
to a 50 percent split, given her long term marriage to Don. He does not
12
The Cotrustees rightly point out that Lynn, the other beneficiary of the
Survivor’s Trust and Cotrustee, agreed to the 75 percent to 25 percent split. This tends
to undercut his argument that he was treated unfairly as a beneficiary of the Survivor’s
Trust, since he has a similar interest as Lynn’s in how the assets are split between the
Family and Survivor’s Trusts.
16
No. 81466-4-I/17
otherwise try to explain how the split is unfair or is somehow the result of bias
against him, or point to evidence suggesting it fails to accurately reflect Don and
Joanne’s division of assets. Nor does the record show that Nathan had no
opportunity to join the NJB. And Nathan does not show any negative effect on
his trust interest arising from the Cotrustees’ criticisms of his mother or the
history of litigation between them and his mother, or claim any damages caused
by the Cotrustees’ alleged hostility.13
d. Harming the trust
Nathan says that because, as the Cotrustees admitted in court, his
litigation against the Cotrustees is financially harming the Trust, the Cotrustees
should be removed.14 Nathan contends that since he has shown a prima facie
case of breach of fiduciary duty, the Cotrustees must show they did not cause
the default and loss. Austin v. U.S. Bank, 73 Wn. App. 293, 307, 869 P.2d 404(1994) (holding that once a plaintiff establishes a prima facie case of breach of
fiduciary duty, the burden of proof shifts to the defaulting trustee to disestablish
the causal connection between default and loss to the beneficiary). Since the
13
In support of his argument that the trial court erred in denying his summary
judgment motion, Nathan asserts that there is an inherent conflict of interest under
RCW 11.98.200 since the Cotrustees are also beneficiaries and since they unilaterally
determined that only 25 percent of Don and Joanne’s combined assets would be used to
fund the Survivor’s Trust. He also says their history of extensive litigation against his
mother Leigh is reason to remove them as trustees. Even in the light most favorable to
Nathan, on the record before us, we cannot see how the Cotrustees might have violated
any duty in deciding the 75 to 25 percent split or how the history of litigation against his
mother created a conflict of interest with him.
14
“[The Cotrustees] are very concerned that the assets be preserved for Joanne
Blankenship with respect to both subtrusts and not dissipated, once again, on extensive
litigation.”
17
No. 81466-4-I/18
Cotrustees did not breach any duty to Nathan, he has failed to show a genuine
issue of material fact on this issue.
We affirm the trial court’s grant of summary judgment and its denial of
Nathan’s summary judgment motion.
B. Attorney Fees and Costs
Nathan says the trial court erred by awarding attorney fees and costs to
the Cotrustees without using the lodestar method or making appropriate findings
to support it.15 And he requests an award of attorney fees and costs on appeal
under RCW 11.96A.150 and RAP 18.1. The Cotrustees disagree and request an
award of attorney fees and costs on the same grounds.16 We remand for the trial
court to enter findings of fact and conclusions of law supporting its fees and costs
award and award the Cotrustees attorney fees and costs on appeal.
1. Trial court award
Under RCW 11.96A.150, a court has “discretion to award fees and other
costs to any party in an estate dispute proceeding governed by Title 11 RCW.”
In re Estate of Mower, 193 Wn. App. 706, 727, 374 P.3d 180 (2016).
RCW 11.96.150(1) provides that:
The court may order the costs, including reasonable attorneys’ fees,
to be paid in such amount and in such manner as the court
15
Nathan also says the trial court erred in awarding attorney fees and costs to
the Cotrustees because it should have granted his summary judgment motion and
denied theirs, but as addressed above, the trial court properly granted summary
judgment in the Cotrustees’ favor.
16
After oral argument on appeal, the Cotrustees moved to file supplemental
briefing on the issue of whether findings and conclusions supporting the attorney fees
and costs award are necessary and attached the briefing to their motion. Nathan
opposed the motion. We deny the motion and disregard the supplemental briefing. See
RAP 10.7.
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determines to be equitable. In exercising its discretion under this
section, the court may consider any and all factors that it deems to
be relevant and appropriate, which factors may but need not include
whether the litigation benefits the estate or trust involved.
We review an award of fees and costs under this statute for abuse of
discretion. Mower, 193 Wn. App. at 727. A court abuses its discretion if it
exercises it in a manner that is manifestly unreasonable, on untenable grounds,
or for untenable reasons. In re Estate of Lowe, 191 Wn. App. 216, 239, 361 P.3d
789 (2015).
The trial court awarded Lynn $25,545.95 in fees and costs, Barbara
$50,217.50, and the Ohana Fiduciary Corporation as Guardian for Joanne
$10,150.50. The trial court stated that its award to each party was just and
reasonable and that they represented the costs incurred to defend against
Nathan’s petition. It also noted that Nathan’s petition placed Joanne “into the
litigation through her Guardian, Ohana Fiduciary Corporation. The Trust paid
costs for the Guardian’s involvement in this case and as a party is entitled to an
award of fees and it is equitable in this case to return to the Trust the fees it
expended in this action.”
Nathan says the trial court’s award was improper because it did not use
the lodestar method. But if “the primary considerations for the fee award are
equitable, courts are not required to apply the lodestar method to determine an
award of fees.” In re Guardianship of Decker, 188 Wn. App. 429, 447, 353 P.3d
669 (2015) (applying the same principle in the context of an attorney fees award
in guardianship proceedings). And applicable here, a court considers equitable
factors when awarding fees under RCW 11.96A.150(1).
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Nathan also says the trial court did not enter adequate findings to support
the award, and that we should remand for entry of those findings. We require an
adequate record to review an attorney fees and costs decision. Mahler v. Szucs,
135 Wn.2d 398, 435, 957 P.2d 632 (1998). “Washington courts have repeatedly
held that the absence of an adequate record upon which to review a fee award
will result in a remand of the award to the trial court to develop such a record.”
Id. The trial court must enter findings of fact and conclusions of law to support its
fee award. Id.; see also SentinelC3, Inc. v. Hunt, 181 Wn.2d 127, 144, 331 P.3d
40 (2014) (“[a trial court] must supply findings of fact and conclusions of law
sufficient to permit a reviewing court to determine why the trial court awarded the
amount in question.”).
In Decker, the trial court awarded attorney fees to a protected person’s
attorney under RCW 11.92.180, a guardianship fees statute whose “primary
considerations for [its] fee award are equitable,” and allows compensation “‘as
the court shall deem just and reasonable.’” 188 Wn. App. at 447, 449 (emphasis
omitted) (quoting RCW 11.92.180). In reviewing the award, Division Two of this
court held that lodestar findings were unnecessary. Id. at 448. Still, it examined
the trial court’s oral ruling regarding attorney fees. Id. at 449–51. It determined
the trial court did not abuse its discretion because the award reflected the
attorney’s hourly rate and number of hours, and because the court “balanced the
equitable factors central to the guardianship statute,” such as the protected
person’s right to contest the guardianship and the need to protect her estate from
excessive attorney fees. Id. at 450–51.
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In SentinelC3, the trial court awarded fees under RCW 23B.13.310, which
allows a court to award fees and costs “‘in amounts [it] finds equitable.’” 181
Wn.2d at 144 (quoting RCW 23B.13.310(2)(b)). There, “the trial court did not
enter any findings of fact or conclusions of law justifying its attorney fee award,”
and merely recited the amount of fees awarded. Id. at 145. Our Supreme Court
ruled that the trial court erred by failing to explain the amount of its award,
warranting remand. Id.Here, different attorneys represented each Cotrustee and Joanne’s non-
party guardian. It is unclear from the trial court’s attorney fees and costs order
whether any of their efforts were unnecessary or duplicative, whether their
services were essential to the outcome, or if the hourly rates specifically were
reasonable. Even though the trial court need not have entered findings and
conclusions typical to a lodestar analysis, it is unclear which equitable factors the
trial court relied on in reaching its conclusion that its award was just and
reasonable. Because, with no indication of the factors the trial court weighed to
reach its conclusion, we cannot review the fees and costs awarded, and we
remand for entry of findings of fact and conclusions of law supporting the award.
2. Appellate attorney fees and costs
Both sides request attorney fees and costs on appeal under
RCW 11.96A.150 and RAP 18.1. While Nathan has prevailed on the issue of
findings and conclusions supporting the trial court’s award of fees and costs, the
Cotrustees have prevailed on the substantial issues underlying this appeal. As
the substantially prevailing party, we award the Cotrustees their attorney fees
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and costs on appeal, subject to their compliance with RAP 18.1. See In re Wash.
Builders Trust, 173 Wn. App. 34, 87–88, 293 P.3d 1206 (2013) (awarding
attorney fees and costs under RCW 11.96A.150 to the substantially prevailing
party).
We affirm the summary judgment rulings. We remand the attorney fees
and costs order for the trial court to enter supporting findings of fact and
conclusions of law.
WE CONCUR:
22