Opinion
No. 60097-4-I.
April 7, 2008.
Appeal from a judgment of the Superior Court for King County, No. 03-3-07304-4, James D. Cayce, J., entered October 3, 2005.
Affirmed in part and reversed in part by unpublished opinion per Schindler, C.J., concurred in by Grosse and Cox, JJ.
In 2002, Bing Kong Chan (Chan) told his spouse, Feng Xian Liang (Liang), that his daughters had forced him to quitclaim the house he owned to his children. In 2003, Chan filed for dissolution of the marriage. By stipulation, the parties excluded the house from consideration in the property division. The trial court's division of the assets resulted in Liang paying Chan approximately $63,000. After the decree of dissolution was entered in July 2004, Chan filed a quiet title action against his children. In support of his motion for summary judgment, one of his daughters filed a declaration admitting that she did not tell Chan that he was signing a quitclaim deed. Based on the declaration, the court granted Liang's motion to reopen the decree of dissolution and consolidate the proceeding with the quiet title action on Page 2 the grounds of newly discovered evidence. After a three-day trial, the court quieted title in the house to Chan and ordered him to reimburse Liang $30,000. On appeal, Chan argues that the trial court abused its discretion in granting the motion to reopen on the grounds of newly discovered evidence, ordering Chan to reimburse Liang $30,000, and denying his request for attorney fees. We reverse the decision to reopen on the grounds of newly discovered evidence and the order to reimburse Liang, but affirm the court's denial of attorney fees.
FACTS
In 1979, Chan, his wife, and his four children, Susan Meilen Chan, Kristen Chan, Christie Chan, and Simon Chan, emigrated from China to Seattle and lived in a house owned by Chan's mother. After Chan's wife died, he returned to China. In 1984 Chan married Liang. When Chan's mother and his stepfather died, Chan returned to Seattle. As requested by his mother, Chan's half-sisters conveyed the house to him. Liang immigrated to the United States in 1986. Chan and Liang's child, Jason Chan, was born in 1987. During their marriage, the couple lived in Chan's house and worked full time, saving most of the money they earned. Neither Chan nor Liang speak or write English. According to the trial court's findings, Chan has a third-grade education and Liang has minimal education.
In 1992, Chan signed a quitclaim deed conveying his house to his five children. Chan's daughter, Susan Chan, prepared the quitclaim deed and another daughter, Kristen Chan, recorded the deed. In 2002, Liang learned that Chan had quitclaimed the house to the children. Chan told her his daughters forced him to sign the deed.
Dissolution Proceedings
In February 2003, Chan filed for dissolution of his marriage to Liang. Chan was 66 and Liang was 50. Chan had retired from working full-time as a cook and was working part-time as a cook's helper. Liang had two jobs, selling food at Uwajimaya and developing film at Seattle Film Works.
The dissolution trial was scheduled for February 12, 2004. During his January 2004 deposition, Chan testified that he thought the quitclaim deed he signed in 1992 was a will. Before trial, Chan and Liang entered into a stipulation of facts for trial. In the stipulation, Chan and Liang agreed to an order of child support and identified the assets subject to distribution. The stipulation does not mention or include Chan's house.
In January, Liang filed a motion to continue the trial date. In opposing the motion, Chan's attorney stated that Chan was in the early stages of Alzheimer's disease and was "not competent as a witness to testify in his own divorce trial." In February 2004, the court denied Liang's motion. But based on the assertions of Chan's attorney, the court continued the trial until April 12 to allow time to appoint a guardian ad litem for Chan. In Chan's declaration in support of his motion to reconsider, Chan states that he is not incapacitated, he does not want a guardian ad litem, and his daughter Christie has been helping him remember dates and relevant facts for the trial. Chan also states that because "doctors could not find any other cause for [his] memory problems [he] was presumed to be in the early stages of Alzheimer's disease." The court granted Chan's motion to reconsider and scheduled trial for March 22.
In his trial brief, Chan again states that he quitclaimed "his interest in the residence to his five (5) children . . . at the urging of one of his daughters who told him he was signing a will." The trial brief also says that Chan had "recently been diagnosed to be in the early stages of Alzheimer's disease." In her trial brief, Liang states that the house should not be considered in the property division because Chan quitclaimed the house to his children.
The five-day dissolution trial began on March 24 and ended on June 9. Chan testified that he still owned the house and had not transferred ownership to his children. Chan's youngest daughter, Christie Chan, testified that in November 2002 Chan "told [her] that instead of a deed of trust, he thought he had executed a will." Liang testified that Chan told her in 2002 that his daughters forced him to quitclaim the house to the children.
The parties submitted closing arguments in writing. In the closing argument on behalf of Chan, his attorney states that "given his present diagnosis and age there may not be any practical reason to institute a quiet title action." Because the couple lived in Chan's house during the marriage and because of Chan's alleged Alzheimer's diagnosis, Chan argued that he should receive a greater share of the community assets.
The court equally divided the parties' approximately $400,000 in assets. The court awarded approximately $139,000 to Chan and approximately $265,000 to Liang, resulting in a payment from Liang to Chan of $63,240. The decree of dissolution that was entered on July 15, 2004 states that neither party had any "real or personal separate property" and does not mention the house.
Quiet Title Action
On December 10, 2004, Chan filed a quiet title action against his five children. Chan alleged that his daughter Susan Chan had a confidential relationship with him and that she fraudulently induced him to sign the quitclaim deed conveying his house to the children. On December 11, Chan's four children from his first marriage consented to entry of an order quieting title in the house to Chan.
Chan and Liang's son Jason did not agree to entry of an order quieting title in Chan.
On June 28, 2005, Chan filed a motion for summary judgment on the grounds that Susan Chan fraudulently induced him to sign the quitclaim deed. In Susan Chan's declaration submitted in support of Chan's summary judgment motion, Susan Chan admits that she "occupied a position of trust and confidence to him and he relied and depended on" her and that "[w]hen I presented the Deed for his signature I did not tell him that it was a quitclaim deed. . . ." Susan Chan's declaration was signed on June 23 and filed on June 28.
Based on Susan Chan's declaration, on July 12 Liang filed a motion under CR 60(b)(3) to reopen the decree, consolidate the proceeding with the quiet title action, and amend the equitable distribution in the decree on the grounds of newly discovered evidence. Liang argued that Susan Chan's admission that the quitclaim deed was fraudulently obtained was newly discovered evidence and the house should be considered in the equitable distribution of the parties' assets. The court granted the Page 6 motion to reopen the dissolution decree and consolidated the proceeding with the quiet title action.
[Liang's] Motion to Reopen, requesting relief from the Decree of Dissolution entered in this matter is GRANTED, based on new evidence that did not exist at the time of the dissolution, as set forth in [the quiet title action], and the June 23, 2005 Declaration of Susan Meilen Chan, alleging she obtained the 1992 Quit Claim Deed that transferred the parties' residence to [Chan's] 5 children through fraud in the execution. As a result of the recorded Quit Claim Deed, the real property located at 2702 [sic] 20th Avenue S., Seattle, WA and issues related to that property were not included in the equitable distribution of property.
Consolidated Proceeding
In his December 28, 2006 deposition, Chan testified that he did not have Alzheimer's disease. Chan said that either during or after the dissolution proceedings, his attorney told him that he no longer owned the house.
In January 2007, the court granted Chan's motion for summary judgment on the grounds that Susan Chan fraudulently induced him to sign the quitclaim deed. The court ruled, as a matter of law, that the 1992 quitclaim deed Chan signed was void ab initio.
In Liang's December 29 "Amended Complaint of Intervener Feng Xian Liang," she alleged the house was community property or, in the alternative, that the house should have been considered as part of the property division in the dissolution. The amended complaint also states claims against Susan Chan and Kristen Chan for intentional misrepresentation, publication of injurious falsehood, deprivation of property without probable cause, conspiracy, and damages.
On Liang's motion for partial summary judgment, the court ruled that Susan Chan was liable to Liang for intentional misrepresentation in obtaining and recording the quitclaim deed. The consolidated proceeding was then transferred to a different judge for trial on Liang's claims for damages against Chan, Susan, and Kristen, and on whether Liang was entitled to an adjustment to the property distribution.
After a three-day trial, the court ruled that "Susan Chan did not violate a duty to Ms. Liang in 1992 when she obtained the quitclaim deed" and "Kristen Chan n/k/a Paris did not breach a duty owed to Ms. Liang by filing the quitclaim deed in 1992 with the county auditor." The court also ruled that Liang did not prove intentional misrepresentation, publication of injurious falsehood, deprivation of property without probable cause, or conspiracy, and dismissed Liang's claims against Susan Chan and Kristen Chan. Based on evidence that the house was valued at $279,000, the court ordered Chan to reimburse Liang $30,000 of the amount she paid to him in the dissolution plus interest. The court also ordered Liang to execute a quitclaim deed to Chan.
ANALYSIS
On appeal, Chan contends that the trial court abused its discretion in granting Liang's motion to reopen the decree on the grounds of newly discovered evidence and ordering him to reimburse Liang $30,000.
Liang asserts the trial court's ruling also may be affirmed under CR 60(b)(4) or (11). But below she did not assert those grounds. "A ground for vacating a judgment under CR 60(b) will not be considered for the first time on appeal." Allison v. Boondock's, Sundecker's Greenthumb's, Inc., 36 Wn. App. 280, 284, 673 P.2d 634 (1983).
We review a trial court's decision to reopen on the grounds of newly discovered evidence under CR 60(b)(3) for abuse of discretion. Luckett v. Boeing Co., 98 Wn. App. 307, 309, 989 P.2d 1144 (1999). Discretion is abused when it is exercised on untenable grounds or for untenable reasons. Luckett, 98 Wn. App. at 309-10. CR 60(b)(3) authorizes a court to vacate a judgment on the basis of [n]ewly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under rule 59(b). . . . Evidence is newly discovered only if it (1) will probably change the result of the trial; (2) was discovered since the trial; (3) could not have been discovered before trial by the exercise of due diligence; (4) is material; and (5) is not merely cumulative or impeaching.
Go2Net, Inc. v. C I Host, Inc., 115 Wn. App. 73, 88, 60 P.3d 1245 (2003). A motion based on newly discovered evidence must be denied if any one of the five factors is not satisfied. Holaday v. Merceri, 49 Wn. App. 321, 330, 742 P.2d 127 (1987).
The test for newly discovered evidence under CR 60(b)(3) is the same as the test under CR 59, and CR 60(b)(3) specifically refers to CR 59. 4 Karl B. Tegland, Washington Practice: Rules Practice CR 60 at 553 (5th ed. 2006).
The record does not support the trial court's decision under CR 60(b)(3) to reopen the dissolution decree on the grounds of newly discovered evidence. Liang argues that she learned for the first time that Chan was trying to quiet title in his name and that his daughter tricked him into signing the quitclaim deed when Susan Chan's declaration was filed in the in the quiet title action. "Now I learn that my former husband is trying to get the property back, saying that his daughters tricked him." But there is no dispute that Chan told Liang in 2002 that he had signed a quitclaim deed to the children. Liang testified in the dissolution proceedings that Chan told her in 2002 that he signed a quiet claim deed and his "two daughters force[d] him to distribute this house to them." And in his trial brief and testimony in the dissolution proceedings, Chan said that he signed the deed "at the urging of one of his daughters who told him he was signing a will." Christie Chan also testified in the dissolution that Chan thought the document he signed was a will. In addition, during the settlement negotiations between Chan and Liang, Chan's claim of ownership to the house and a quiet title action was specifically addressed. A provision in the proposed settlement agreement states:
Real Estate. The husband inherited real properties located 2707-20th Ave. S., Seattle, WA and 2707 — 20th Ave. S., Seattle, WA. The property is now titled in the name of the husband's five children. In the event a quiet title action results in the husband regaining ownership of the properties or compensation for them, the wife waives any claim to such property or compensation.
Contrary to Liang's assertion, the agreement is not excluded under ER 408.
Even if Liang did not know that it was Susan Chan who misled her father and that Susan did not tell him that he was signing a quitclaim deed, Liang knew that Chan said he was forced to sign the deed by his daughters who told him he was signing a will and knew that Chan might pursue a quiet title action. Because neither the quiet title action nor Susan Chan's declaration was newly discovered evidence under CR 60(b)(3), the trial court abused its discretion in granting Liang's motion to reopen the decree of dissolution and ordering Chan to reimburse Liang $30,000.
Chan also argues the trial court abused its discretion in denying his request for attorney fees under RCW 26.09.140 and CR 11 for defending Liang's motion to reopen. An award of attorney fees is within the trial court's discretion. In re Marriage of Christel, 101 Wn. App. 13, 24, 1 P.3d 600 (2000); State ex rel. Quick-Ruben v. Verharen, 136 Wn.2d 888, 903, 969 P.2d 64 (1998). The party challenging the trial court's decision must show the trial court exercised its discretion in a way that was "clearly untenable or manifestly unreasonable." In re Marriage of Knight, 75 Wn. App. 721, 729, 880 P.2d 71 (1994). RCW 26.09.140 allows a court to order a party in a dissolution action to pay reasonable attorney fees based on financial need and the ability of the other spouse to pay. In re Marriage of Crosetto, 82 Wn. App. 545, 563, 918 P.2d 954 (1996). But if intransigence is shown, the financial ability of the party to pay the fees is not relevant. In re Marriage of Mattson, 95 Wn. App. 592, 604, 976 P.2d 157 (1999). CR 11 sanctions are warranted if an action is not well grounded in fact, is not warranted by existing law, and the attorney signing the pleading has failed to conduct reasonable inquiry into the factual or legal basis of the action. Bryant v. Joseph Tree, Inc., 119 Wn.2d 210, 220, 829 P.2d 1099 (1992).
Below, Chan argued that because Liang's motion to reopen was not timely filed, he was entitled to attorney fees on the grounds of Liang's intransigence under RCW 26.09.140 and under CR 11. We reject Chan's assertion that because Liang's motion was not timely filed within one year of the decree as required by CR 60(b) he was entitled to attorney fees. Despite Liang's unsuccessful attempt to re-note the motion under the King County Local Rules, there is no dispute that Liang timely filed the motion to reopen on July 12 and initially properly noted the motion. Chan also argued that he was entitled to attorney fees because Susan Chan's declaration was not newly discovered. But based on the admittedly conflicting testimony presented to the trial court, the decision to deny Chan's request for attorney fees was neither clearly untenable nor manifestly unreasonable.
We reverse the trial court's decision to reopen the dissolution decree under CR 60(b)(3) and the order requiring Chan to reimburse Liang for $30,000, but affirm denial of Chan's request for attorney fees.
We also decline to exercise our discretion to award Chan attorney fees on appeal.