Opinion
No. 26507-2-III.
October 7, 2008.
Appeal from a judgment of the Superior Court for Chelan County, No. 04-4-00070-1, Lesley A. Allan, J., entered September 10, 2007.
UNPUBLISHED OPINION
James Zeller, personal representative (PR) of David Hedges' estate, appeals the trial court's damage judgment for improper actions taken by David when serving as Evelyn R. Hedges' attorney in fact under a durable power of attorney (POA). Mr. Zeller contends the trial court lacked jurisdiction, erred in denying a jury trial, and should have applied a three-year statute of limitations. Because this is a matter in equity, and the statute of limitations did not begin to run until the necessary accounting was complete, we disagree with Mr. Zeller. On the other hand, for the same reasons, we agree with Margaret Malloy, as PR for Evelyn's estate, and Margaret and her sisters, Nancy Hedges and Carol Fraser, individually (collectively Evelyn's estate, individually by first name to avoid confusion), who contend the trial court erred in limiting damages under the six-year statute of limitations. Accordingly, we affirm in part, reverse in part, and remand for recalculation of damages and attorney fees.
FACTS
On September 9, 1996, Evelyn executed a POA, naming David as attorney in fact. Article VII of the POA requires the attorney in fact, "to account to any subsequently appointed guardian or personal representative for the principal." Exhibit 1 at 4. On October 6, 2003, Evelyn died. She named David as the PR of her estate. David agreed in writing.
On July 21, 2004, Nancy filed a claim under the Trust and Estate Dispute Resolution Act (TEDRA), requesting relief in removing David as the trustee of the Evelyn R. Hedges Trust and for an accounting by David for the period he was acting as Evelyn's attorney in fact. The court ordered David to provide a full accounting.
David resigned as the PR of Evelyn's estate and trustee of her trust. His sister, Margaret, was appointed successor PR. As part of his resignation, David agreed to complete the accounting. David was replaced as trustee by Carol.
David began the accounting, but died August 14, 2005 before its completion. Margaret, as PR of Evelyn's estate, asked the court to appoint Mr. Zeller, David's sole heir and a named co-PR in David's will, as "virtual" representative of David's estate. The court granted her request, authorizing the parties "to proceed under RCW 11.96A.120 and treat James Zeller as the real party in interest." Clerk's Papers (CP) at 1413. Later, Mr. Zeller formally became PR of David's estate.
On November 8, 2006, Mr. Zeller filed the accounting. Mr. Zeller was assisted by Kevin Huff, a certified public accountant, who described the process as difficult.
David's estate unsuccessfully demanded a jury trial. In a bench trial, evidence of several missing sums, accounting deficiencies, and unsupported or unexplained transactions were revealed. Entering findings of fact and conclusions of law, the court limited damages under a six-year statute of limitations before suit and awarded Evelyn's estate $268,346 plus attorney fees of $90,000. The court awarded attorney fees to Nancy, Margaret, and Carol individually. Mr. Zeller, as PR of David's estate appealed. Margaret, as PR of Evelyn's estate and Nancy, Margaret and Carol individually, cross-appealed.
ANALYSIS A. Jurisdiction
The issue is whether the court lacked personal jurisdiction over David's estate and subject matter jurisdiction over the TEDRA action. David's estate contends the court lacked personal jurisdiction over David's estate because neither David nor his virtual representative were served with a summons and complaint pertaining to the estate. The estate contends the court lacked subject matter jurisdiction because the action was in tort rather than a proceeding under TEDRA.
Jurisdiction is a question of law we review de novo. Young v. Clark, 149 Wn.2d 130, 132, 65 P.3d 1192 (2003). And, a court only has authorization to hear and determine a cause or proceeding if it has jurisdiction over the parties and the subject matter. Absent proper jurisdiction, a court may do nothing more than enter an order of dismissal. Deschenes v. King County, 83 Wn.2d 714, 716, 521 P.2d 1181 (1974).
1. Personal Jurisdiction. Service of process is a prerequisite to obtaining jurisdiction, and judgment entered without jurisdiction is void. Allstate Ins. Co. v. Khani, 75 Wn. App. 317, 324, 877 P.2d 724 (1994). But, a party waives the claim of lack of personal jurisdiction by "consent[ing], expressly or impliedly, to the court's exercising jurisdiction." In re Marriage of Steele, 90 Wn. App. 992, 997-98, 957 P.2d 247 (1998). Consent may be established by proceeding and arguing the case on its merits. In re Marriage of Markowski, 50 Wn. App. 633, 637, 749 P.2d 754 (1988). The court acquires personal jurisdiction when a party appears in the proceedings. See In re Estate of Little, 127 Wn. App. 915, 922, 113 P.3d 505 (2005) ("'[T]he superior court has personal jurisdiction over the persons who appear in the proceedings whether or not they receive the requisite notices.'") (quoting In re Estate of Walker, 10 Wn. App. 925, 930, 521 P.2d 43 (1974)). Here, Mr. Zeller consented to personal jurisdiction by presenting testimony and argument at trial.
2. Subject Matter Jurisdiction. Under RCW 2.08.010, the superior court has subject matter jurisdiction "in all cases in equity, . . . and in all other cases in which the demand . . . in controversy amounts to three hundred dollars." Accordingly, the superior court had subject matter jurisdiction over Evelyn's estate's claim.
David's estate argues the court lacked jurisdiction because a TEDRA claim does not encompass a breach of fiduciary duty claim. But TEDRA partly provides, "any party may have a judicial proceeding for the declaration of rights or legal relations with respect to any matter, as defined by RCW 11.96A.030." RCW 11.96A.030(1)(c) defines a "matter" as the "determination of any question arising in the administration of an estate or trust, or with respect to any nonprobate asset, or with respect to any other asset or property interest passing at death."
RCW 11.96A.030(1)(c). An accounting involving whether David's estate was liable to Evelyn's estate for breach of fiduciary duty is a matter subject to TEDRA. The court properly concluded likewise.
B. Jury Demand
The issue is whether the trial court erred in denying David's estate's demand for a jury trial. David's estate contends the allegation of breach of fiduciary duty was a tort claim that should have been submitted to the jury.
The right to a jury trial is guaranteed by article I, section 21 of the Washington Constitution. No such right exists, however, where the action is one in equity. S.P.C.S., Inc. v. Lockheed Shipbuilding Constr. Co., 29 Wn. App. 930, 933, 631 P.2d 999 (1981) (citing Peters v. Dulien Steel Prod., Inc., 39 Wn.2d 889, 891, 239 P.2d 1055 (1952)). "The overall nature of the action is determined by considering all the issues raised by all the pleadings." S.P.C.S., 29 Wn. App. at 933. In cases involving equitable and legal issues, "the trial court has been vested with wide discretion to allow a jury on some, none, or all issues." Id. at 934 (citing Scavenius v. Manchester Port Dist., 2 Wn. App. 126, 129, 467 P.2d 372 (1970)). Discretion is abused when exercised on manifestly unreasonable or untenable grounds. State ex rel. Carroll v. Junker, 79 Wn.2d 12, 26, 482 P.2d 775 (1971).
Generally, accounting actions are equitable in nature and are not tried to a jury. See Garey v. City of Pasco, 89 Wash. 382, 383-84, 154 P. 433 (1916) ("It hardly needs argument or citation of authorities to show that this constitutional guaranty does not entitle a party to a jury trial in a case of a class which has always been recognized as being within the jurisdiction of courts of equity. . . . It seems equally plain that an action for an accounting, properly maintainable as such, is one of equitable cognizance.").
While Evelyn's estate argued breach of fiduciary duty, the trial court did not abuse its discretion because the breach issue was interwoven into the accounting. Indeed, the accounting was ordered based on the breach of fiduciary duty claim. As such, the trial court did not err in denying David's estate's request for a jury trial.
C. Statute of Limitations
The issue is whether the trial court erred in applying a six-year statute of limitations. David's estate contends the breach of fiduciary duty claim is a tort claim, which carries a three-year statute of limitation. On cross-appeal, Evelyn's estate contends the trial court erred in applying the six-year statute of limitations.
We review statute of limitations rulings de novo. Washburn v. Beatt Equip. Co., 120 Wn.2d 246, 263, 840 P.2d 860 (1992). RCW 4.16.040(1) provides that an action upon a contract in writing, or liability express or implied arising out of a written agreement, shall be commenced within six years. The trial court correctly rejected the three-year statute of
limitations because this action is based on the specific accounting duty written in the POA; the six-year statute of limitations applies.
On cross-appeal, Evelyn's estate contends the judgment award should have included the entire period David served as attorney in fact under the POA. As an initial matter, David's estate contends this issue is raised for the first time on appeal contrary to RAP 2.5(a). The record shows this issue was raised, briefed, and argued below. Thus, the issue is properly before this court on appeal.
The statute of limitations may serve to limit damages to those incurred in the statutory time period before the suit was filed. Bradley v. Am. Smelting Ref. Co., 104 Wn.2d 677, 693, 709 P.2d 782 (1985). But, in an accounting action, the statute of limitations "'does not [commence to] run until [there has been] a final accounting by the trustee.'" Gillespie v. Seattle-First Nat'l Bank, 70 Wn. App. 150, 164, 855 P.2d 680 (1993) (quoting 76 Am.Jur.2d Trusts § 440 at 419). Additionally, "any and all statutes of limitation which might otherwise apply are tolled until termination of the fiduciary relationships." Gillespie, 70 Wn. App. at 158 (citing 54 C.J.S. Limitations of Actions § 184 at 239).
Since the final accounting in this case was not filed until 2006, neither a three-year nor a six-year statute of limitations would bar Evelyn's estate's claims. Moreover, neither statute of limitations would limit their damages. Therefore, the trial court erred in concluding that the damages commencement date was July 21, 2004 when Nancy filed for an accounting. Thus, we remand to the trial court to recalculate damages.
D. Attorney Fees
Under RCW 11.96A.150, it was within the court's discretion to order reasonable attorney fees "to any party . . . in such amount and in such manner as the court determines to be equitable." In addition to the judgment amount, the court properly exercised its discretion in awarding attorney fees to Evelyn's PR and Nancy, Margaret, and Carol individually. On remand, the trial court is free to consider whether this court's opinion affects the award amount.
Margaret, as PR of Evelyn's estate, and Nancy, Margaret and Carol, individually, ask for attorney fees and costs incurred in this appeal under RCW 11.96A.150. This statute states that this court "may, in its discretion, order costs, including reasonable attorneys' fees, to be awarded to any party . . . in such amount and in such manner as the court determines to be equitable." RCW 11.96A.150. The trial court below awarded the parties attorney fees and costs under this provision, and we do so as well in an amount to be set by the trial court during remand upon compliance with RAP 18.1(d).
Affirmed in part and reversed and remand in part for proceedings consistent with this opinion.
A majority of the panel has determined this opinion will not be printed in the Washington Appellate Reports, but it will be filed for public record pursuant to RCW 2.06.040.
Sweeney, J. and Korsmo, J., concur.