Opinion
No. 38579-1-II.
January 26, 2010.
Appeal from a judgment of the Superior Court for Kitsap County, No. 07-2-02814-7, M. Karlynn Haberly, J., entered October 17, 2008.
Affirmed by unpublished opinion per Houghton, J., concurred in by Van Deren, C.J., and Penoyar, J.
Jay and Kelly Ferguson appeal the trial court's order granting summary judgment in favor of the Estate of Kathryn Kurtz (Estate). They argue that the trial court erred in striking testimony and in granting summary judgment. We affirm and award attorney fees and costs on appeal.
FACTS
On June 5, 2002, Kathryn Kurtz agreed to lend $80,000 to her grandson, Jay Ferguson, and his wife, Kelly. The Fergusons and Kurtz signed a promissory note, wherein the Fergusons agreed to make monthly payments of $1,625, including eight percent interest. In the event that the Fergusons failed to make a payment within 10 days of its due date, the note imposed a late charge of five cents per dollar overdue. The terms also provided that the note entered into default if the Fergusons failed to make a payment within 30 days of its due date. Once in default, the note gave Kurtz the right to elect to make the entire principal and interest payable at once. Default also automatically increased the interest rate from 8 percent to 12 percent.
Christopher Beckham, a certified public accountant, retained by the Estate, submitted accounting records showing that the Fergusons made sporadic monthly payments, mostly for $1,625, from July 2002 to November 2005, and that the interest rate changed from 8 percent to 12 percent in July 2003. They made no further payments on the note after November 2005. The accounting specified that the Fergusons made $30,856 in payments and, as of June 1, 2008, owed $99,178.89 in unpaid principal, interest, and late charges.
After Kathryn Kurtz died, her Estate sued the Fergusons for breach of contract. The Estate moved for summary judgment. The Fergusons opposed the motion and, along with their response, included Jay Ferguson's affidavit. The affidavit provides in pertinent part:
1. I am one of the Defendant's [sic] in the above captioned matter and make this affidavit from my personal knowledge;
2. I entered into an agreement with Kathryn E. Kurtz, my grandmother, for a loan;
3. I was having a difficult time making the payments on the loan so I spoke with my grandmother about it;
4. As a result of the conversation with my grandmother, she agreed to modify the agreement and accept payment of the principal amount loaned and waive all interest.
5. I have paid $35,750.00.
6. Pursuant to the modified agreement, I owe the amount of $44,250.00.
Clerk's Papers (CP) at 29-30.
The Fergusons also attached an undated, handwritten letter from Kurtz. The letter states in pertinent part, "I read your little red note, Jay. Are you having trouble with the size of the payments, the interest, or what? Let me know if it is something I can help with. I suppose the jobs got fewer as the weather gets worse. You are very important to me, all 4 of you." CP at 31-32. The letter was signed "Gram." CP at 32. The Fergusons provided no evidence to authenticate the letter.
In response to the Fergusons' affidavit, the Estate moved to strike paragraphs 4 and 6 from it and to strike the attached letter from Kurtz under RCW 5.60.030 and as hearsay. The trial court orally granted the motion and inquired whether Jay Ferguson could provide documentation that he paid $35,750 (rather than $30,856). The trial court took the matter under advisement and allowed the Fergusons an additional two weeks to provide payment documentation. The trial court indicated that it would issue a written decision after receiving the documentation. The Fergusons did not submit documentation and instead filed a motion for reconsideration of the order striking evidence. The trial court denied the motion for reconsideration.
RCW 5.60.030, commonly referred to as the deadman's statute, provides, in relevant part:
[I]n an action or proceeding where the adverse party sues or defends as executor, administrator or legal representative of any deceased person, or as deriving right or title by, through or from any deceased person, . . . then a party in interest or to the record, shall not be admitted to testify in his or her own behalf as to any transaction had by him or her with, or any statement made to him or her, or in his or her presence, by any such deceased . . . person.
The trial court awarded the Estate a judgment in the amount of $97,290.87, consisting of the remaining principal owed plus interest, and an additional judgment in the amount of $5,443.75, consisting of late payment charges. The Fergusons appeal.
The trial court used the Estate expert's accounting that included a $30,856 credit for the Fergusons' payments.
ANALYSIS Motion to Strike
The Fergusons first contend that the trial court erred when it granted the Estate's motion to strike paragraphs 4 and 6 and the attached letter. They assert that the statements, if hearsay, fall under an exception to the hearsay rule.
Hearsay is an out of court statement that a party seeks to admit into evidence to prove the truth of the matter asserted. ER 801(c). Hearsay is generally inadmissible, unless an exception applies. ER 802, 803. We review the trial court's evidentiary rulings made in conjunction with a summary judgment order de novo. Folsom v. Burger King, 135 Wn.2d 658, 663, 958 P.2d 301 (1998).
Paragraphs 4 and 6
The Fergusons assert that paragraphs 4 and 6 are admissions of a party opponent and, therefore, are not hearsay. ER 801(d). But Kurtz herself is not a party opponent; her Estate is. Erickson v. Robert F. Kerr, M.D., P.S., Inc., 125 Wn.2d 183, 192-93, 883 P.2d 313 (1994) (in malpractice suit brought by estate of deceased, statements by deceased did not constitute admissions by a party opponent, even though the decedent may have been considered a predecessor in interest). Nevertheless, these statements fall under another hearsay exception: statements against interest, because they were contrary to Kurtz's pecuniary interest. ER 804(b)(3).
But even assuming the trial court incorrectly decided that the statements were inadmissible hearsay, the deadman's statute otherwise precluded their admission. RCW 5.60.030. This is because Jay is a party in interest and is testifying, by way of his affidavit, on his own behalf as to the transaction between himself and Kurtz. In re the Estate of Cordero, 127 Wn. App. 783, 789, 113 P.3d 16 (2005) (purpose of deadman's statute is to prevent interested parties from giving self-serving testimony relating to transactions with the deceased). Thus, the trial court properly struck paragraphs 4 and 6. Lian v. Stalick, 106 Wn. App. 811, 823, 25 P.3d 467 (2001) (we may affirm the trial court on any alternate theory if supported by the record).
Letter from "Gram"
The Fergusons also assert that the statements within the letter attached to the affidavit are admissible because they were not offered for the truth of the matter asserted. Even assuming the statements are not hearsay, they still are inadmissible for lacking sufficient authentication under ER 901. The record lacks evidence to support a finding that the letter is what the Fergusons claim it to be; rather, it is an undated and unsigned note.
ER 901(a) provides, in pertinent part: "The requirement of authentication or identification as a condition precedent to admissibility is satisfied by evidence sufficient to support a finding that the matter in question is what its proponent claims."
The parties also disagree as to the letter's admissibility under the deadman's statute. Generally, RCW 5.60.030 does not bar the admission of documentary evidence but may serve to limit testimony about the evidence. Thor v. McDearmid, 63 Wn. App. 193, 202, 817 P.2d 1380 (1991). Thus, the deadman's statute would not, standing alone, bar the admission of the letter.
Summary Judgment
The Fergusons also contend that the trial court erred in granting summary judgment. We review summary judgment orders de novo. Qwest Corp. v. City of Bellevue, 161 Wn.2d 353, 358, 166 P.3d 667 (2007). A trial court properly grants summary judgment when no genuine issues of material fact exist, thereby entitling the moving party to a judgment as a matter of law. CR 56(c). We draw all reasonable inferences from the facts in the light most favorable to the nonmoving party. Hisle v. Todd Pac. Shipyards Corp., 151 Wn.2d 853, 860-61, 93 P.3d 108 (2004).
A review of the evidence remaining after striking paragraphs 4 and 6 of Jay Ferguson's affidavit and the letter from "Gram" reveals no genuine issues of material fact, precluding summary judgment. The evidence offered by the Fergusons to refute summary judgment consists of Jay Ferguson's statements that (1) he is the defendant, (2) he entered into a loan agreement with his grandmother, (3) he was having difficulties making payments on the loan and had spoken with his grandmother regarding these difficulties, and (4) he had paid $35,750. The Fergusons offered no evidence to show that they had paid $35,750 on the loan rather than the $30,856 set forth in the accounting. Thus, they waived the opportunity to have the disputed issue decided by a fact finder. Lynn v. Labor Ready, Inc., 136 Wn. App. 295, 308-09, 151 P.3d 201 (2006) (a party cannot rely only on inadmissible hearsay in response to a summary judgment motion).
The Estate offered evidence establishing the loan agreement between the Fergusons and Kurtz and demonstrating that the Fergusons breached the agreement. The Fergusons, however, offered no admissible evidence to dispute these facts. The trial court properly granted summary judgment. Seattle Police Officers Guild v. City of Seattle, 151 Wn.2d 823, 840, 92 P.3d 243 (2004).
ATTORNEY FEES
The Estate requests attorney fees and costs on appeal, under both RCW 11.96A.150 and the terms of the promissory letter itself. RCW 11.96A.150(1) provides that
[e]ither the superior court or the court on appeal may, in its discretion, order costs, including reasonable attorneys' fees, to be awarded to any party: (a) From any party to the proceedings; (b) from the assets of the estate or trust involved in the proceedings; or (c) from any nonprobate asset that is the subject of the proceedings. The court may order the costs to be paid in such amount and in such manner as the court determines to be equitable.
Thepromissory note provides that "[i]f this Note is . . . given to an attorney for collection, or suit filed thereon, the makers . . . agree to pay . . . all costs of collection and such additional sum as the Court may adjudge reasonable as attorney's fees in such suit." CP at 22. The promissory note and RCW 11.96A.150 entitle the Estate to attorney fees and costs it seeks on appeal, and we award reasonable fees and costs on appeal in an amount to be determined under RAP 18.1.
The Estate also requests attorney fees and costs associated with the trial court proceedings. The Estate did not formally request attorney fees and costs at the trial court level but did claim them in its complaint. Neither before the trial court decided the summary judgment motion nor on reconsideration did the Estate seek attorney fees and costs below. It therefore waived this claim. See Elliott Bay Seafoods, Inc. v. Port of Seattle, 124 Wn. App. 5, 15, 98 P.3d 491 (2004) (party failed to ask for fees below and therefore waived that claim).
Affirmed.
A majority of the panel having determined that this opinion will not be printed in the Washington Appellate Reports, but will be filed for public record pursuant to RCW 2.06.040, it is so ordered.
VAN DEREN, C.J. and PENOYAR, J., concur.