Opinion
No. 24530-6-III, 24216-1-III, 25291-4-III.
August 30, 2007.
UNPUBLISHED OPINION
This is an appeal from trial court orders and judgments entered and subsequently affirmed by our Supreme Court. We conclude that the challenged judgments are final and, therefore, not subject to further review based on the doctrine of res judicata. We affirm the trial court and award fees and costs to Peter and Jeffrey and the estate because we conclude that the appeal is frivolous.
FACTS AND PROCEDURAL HISTORY
Marcella Jones died testate in September 1995. She left her home and other assets in equal shares to her four sons, David, Russell, Jeffrey, and Peter. In re Estate of Jones, 152 Wn.2d 1, 6-7, 93 P.3d 147 (2004). She named Russell in the will as personal representative with nonintervention powers. He and brothers Peter and Jeffrey have had longstanding conflicts. Id. at 7.
The will was admitted to probate in late September 1995. The brothers met in May 1996 to try to distribute the property. They were not successful. Peter and Jeffrey petitioned for accountings, to remove Russell as personal representative, and to appoint a new personal representative. Id. Their complaints were consolidated for trial in September 2001. Id.; Clerk's Papers (CP) at 8.
The trial judge concluded, based on appropriate findings, that Russell had breached his fiduciary duties by failing to turn over records to his brothers; failing to pay rent while he occupied the estate house; failing to disclose that he had executed a deed conveying the house to himself; and by having the estate pay the utilities, taxes, and insurance on the house. The trial court also found that Russell originally valued a piano distributed to Jeffrey at $5,000 but later revalued the piano at around $15,000 in retaliation for Jeffrey's opposition. The court removed Russell as personal representative due to mismanagement and neglect of the estate. The will named David as the alternate personal representative. But the trial court concluded that David had joined Russell in his conflict with Peter and Jeffrey and that appointing David would result in further litigation and delay in closing the estate. Jones, 152 Wn.2d at 18-20. A neutral attorney — James Woodard — was then appointed the new personal representative with nonintervention powers. Id. at 18; to the estate house and a value of $5,000 to the piano. CP at 19.
Russell's appeal to this court addressed whether Peter and Jeffrey had established a sufficient basis to bring the nonintervention estate under the supervision of the court. In re Estate of Jones, 116 Wn. App. 353, 361, 67 P.3d 1113 (2003), rev'd, 152 Wn.2d 1, 93 P.3d 147 (2004). We concluded that Russell's misconduct was insufficient as a matter of law to disqualify him under RCW 11.28.250 and RCW 11.68.070 and we reversed. Jones, 116 Wn. App. at 358.
Peter and Jeffrey then petitioned the Washington Supreme Court. The court reversed our decision and reinstated the trial court's ruling. Jones, 152 Wn.2d at 8. The Supreme Court held that Russell breached his fiduciary duty by failing to use the fair market value of the house. It concluded that the record supported the trial court's finding that the house was worth $159,000. The court noted that Russell's second, higher appraisal of the piano was questionable. Id. at 13, 15-16. The court also affirmed Mr. Woodard's appointment as the substitute personal representative. Id. at 20. Finally, the Supreme Court concluded that "Russell committed several egregious breaches of his fiduciary duty which are supported by the record and constitute valid and sufficient grounds for his removal." Id. at 21. The court remanded for a final accounting, including an offset to Russell for repairs and expenses he personally paid for the estate. Id. at 22.
The Supreme Court mandated the case in July 2004. Russell then moved for relief from the trial court's 2001 judgment. He wanted new appraisals of the house and the piano. He challenged his removal as personal representative. The trial court denied Russell's motions. The court concluded that Russell had a full opportunity to litigate all the issues at trial and that there was no reason justifying relief under CR 60(b) or any other rule. The trial court also granted Peter and Jeffrey attorney fees as a CR 11 sanction for responding to the motions. The trial court concluded that Russell owed $900 per month in rent since its October 2001 order, plus past-due rent and interest on the past-due rent, minus offsets for maintenance and repairs. Mr. Woodard was directed to offer the house to Russell as his distributive share (as long as Russell made the necessary payments) or to sell the house and distribute its funds equally among the heirs.
Russell petitioned this court for discretionary review of these orders and the trial judge's denial of his motion for reconsideration. He also appealed an August 2005 order authorizing the sale of the house. Peter and Jeffrey moved to dismiss the discretionary review and the appeal. Commissioner's Ruling at 1, filed Dec. 30, 2005. On December 30, 2005, a commissioner of this court ruled that the order authorizing the sale was appealable of right and left the question of whether the remaining orders were properly the subject of review to this panel of judges. Russell later appealed an April 2006 summary judgment that authorized Mr. Woodard's immediate possession of the premises. All of these appeals were consolidated for review.
DISCUSSION
Relief from Judgment and New Appraisal
Russell first contends the trial court erred in denying his motions for relief from judgment and for an appraisal. He argues that the October 2001 findings of fact and conclusions of law removing him as personal representative and establishing the values of the estate house and the piano should be vacated under CR 60(b)(4) due to misrepresentations by Peter and Jeffrey. He also cited CR 60(b)(11). It authorizes vacation for other reasons justifying relief from judgment. But he did not pursue relief on this basis in his written or oral arguments before the trial court. He characterizes the trial court's October 2001 findings and conclusions as "an interlocutory order." And on that basis he also requested revision under CR 54(b). The trial court concluded that Russell had a full and fair opportunity to litigate these issues at trial and that there was no reason justifying relief under CR 60(b) or any other rule.
The rule authorizes a court to relieve a party from a final judgment, order, or proceeding for fraud. CR 60(b)(4).
This catchall section allows for relief from judgment when no other section applies. Pitzer v. Union Bank of Calif., 141 Wn.2d 539, 552, 9 P.3d 805 (2000); CR 60(b)(11).
This rule allows the trial court to enter final judgment as to fewer than all of the claims or parties in an action, as long as the court's decision is supported by written findings. In the absence of such findings, an order deciding fewer than all the claims or the rights and liabilities of fewer than all the parties does not terminate the action and is subject to revision at any time before judgment on all the claims and parties. CR 54(b).
Russell has now abandoned his CR 60(b) claims because he asserts the October 2001 decision is not a final judgment. He argues that he is entitled to seek revision under CR 54(b), despite his unsuccessful appeal of this decision to the Washington Supreme Court.
CR 54(b) provides generally that when an order or other form of decision adjudicates fewer than all the claims, rights, or liabilities of fewer than all the parties, the order or decision does not terminate the action and is subject to revision at any time before the entry of a final judgment that adjudicates all the claims of all the parties. A final judgment is "the final determination of the rights of the parties in the action and includes any decree and order from which an appeal lies." CR 54(a)(1). "Our review of the application of a court rule . . . to the facts is de novo." Malted Mousse, Inc. v. Steinmetz, 150 Wn.2d 518, 525, 79 P.3d 1154 (2003).
Russell contends the trial court's October 2001 decision merely determined a portion of the claims and rights arising out of the probate action of his mother's estate. And the decision is subject to revision until the probate is concluded. We disagree.
The petition filed by Peter and Jeffrey to remove Russell as the personal representative did not directly relate to the final distribution of the estate. Rather, it sought a final, binding determination of Russell's capacity to serve as the personal representative with nonintervention powers. "CR 54(b) applies only when more than one claim for relief is presented or when multiple parties are involved." Gazin v. Hieber, 8 Wn. App. 104, 112, 504 P.2d 1178 (1972). The trial court's findings, conclusions, and order removing Russell as personal representative decided all the claims, rights, and liabilities of the parties on the role of personal representative. And this order was appealed to the Court of Appeals and later to the Supreme Court. CR 54(a)(1). The decision to remove Russell as personal representative and appoint someone else in his place constituted a final judgment not subject to revision under CR 54(b). Gazin, 8 Wn. App. at 112.
The trial court's order also established market values for the estate house and the piano that had been distributed to Jeffrey. The court concluded that Russell had mismanaged and neglected the estate and had overvalued the piano distributed to Jeffrey. And from this, the trial court concluded that Russell had breached his fiduciary duties to the estate and its beneficiaries. The court considered appraisals offered by the parties and concluded that the fair market value of the house in September 1995 was $159,000 ($162,000 less furnace replacement costs of $3,000) and the value of the piano was $5,000. Jones, 152 Wn.2d at 13 n. 4. Russell had a full and fair opportunity to present appraisals and to litigate these values. He did not move for reconsideration of the trial court's decision. The Supreme Court affirmed the trial court's decision and held that the trial court's valuation of the house was supported by the record, and that Russell's revaluation of the piano was "questionable." Id. at 13, 15.
Russell argues that he can seek revision of the house and piano valuations at any time before probate is closed because an interested party may challenge an appraisement at any stage of the probate proceedings. He relies on RCW 11.44.035:
[i]n an action against the personal representative where the administration of the estate, or any part thereof, is put in issue and the inventory and appraisement of the estate by the personal representative is given in evidence, the same may be contradicted or avoided by evidence. Any party in interest in the estate may challenge the inventory and appraisement at any stage of the probate proceedings.
Peter and Jeffrey sued Russell and challenged his administration of the estate. The suit put in issue his appraisal of the estate house and piano. This is authorized by RCW 11.44.035. That suit was tried. The trial court reduced the results to judgment. The Supreme Court affirmed that judgment.
The doctrine of res judicata precludes further review. Res judicata or claim preclusion prohibits relitigation of a claim or issue that has already been decided, or that could have been decided, in a prior action. Loveridge v. Fred Meyer, Inc., 125 Wn.2d 759, 763, 887 P.2d 898 (1995); Kelly-Hansen v. Kelly-Hansen, 87 Wn. App. 320, 327-28, 941 P.2d 1108 (1997). It also prevents a defendant from raising new defenses to defeat enforcement of an earlier judgment. Kelly-Hansen, 87 Wn. App. at 327 (quoting Jack H. Friedenthal et al., Civil Procedure § 14.1, at 607 (1985)). "The purpose of the doctrine is to encourage respect for judicial determinations by ensuring finality, and to conserve judicial resources by discouraging the same parties from re-litigating the same claims time and again." 14A Karl B. Tegland, Washington Practice: Civil Procedure § 35.24, at 454 (1st ed. 2003).
For res judicata to apply, a subsequent action must have identity of (1) subject matter, (2) cause of action, (3) parties, and (4) "the quality of the persons for or against whom the claim is made." Rains v. State, 100 Wn.2d 660, 663, 674 P.2d 165 (1983); DeYoung v. Cenex Ltd., 100 Wn. App. 885, 891, 1 P.3d 587 (2000). The petitions to remove Russell as personal representative and for an accounting involved the same subject matter, cause of action, parties, and quality of those parties. And Russell does not argue otherwise. He argues, nonetheless, that the trial court's decision did not constitute a final judgment on the valuation issues. Again we disagree.
Peter and Jeffrey petitioned to remove Russell and for an accounting and injunctive relief. They claimed that Russell had undervalued the estate house and overvalued the piano. The parties litigated those issues and the trial court made findings and conclusions of the values. The record supported the trial court's findings. Jones, 152 Wn.2d at 13, 15. The Supreme Court did not specifically conclude that the record supported the trial court's valuation of the piano (noting instead that Russell's valuation was questionable). But any later challenge to the court's findings and conclusions was foreclosed because Russell never moved for reconsideration. The Supreme Court affirmed the trial court's judgment. And the case was mandated. See Kelly-Hansen, 87 Wn. App. at 328-29 (res judicata applies when the parties in two successive proceedings are the same, the prior proceeding ended in a final judgment, and the relief sought was raised or should have been raised in the prior proceeding). Russell sued, after the Supreme Court mandated the case, and again tried to litigate the values of the house and piano. He is barred by res judicata from relitigation of those issues. Loveridge, 125 Wn.2d at 763.
We are also bound by the Supreme Court's decision under the law of the case doctrine and by the statutory powers vested in a personal representative of a nonintervention estate. Lutheran Day Care v. Snohomish County, 119 Wn.2d 91, 113, 829 P.2d 746 (1992); RCW 11.48.020; RCW 11.68.070, .090. The Supreme Court affirmed the trial court's decision to remove Russell and to appoint a successor personal representative with nonintervention powers. Jones, 152 Wn.2d at 19-20. Accordingly, the appointment of the new personal representative is binding on remand.
Finally, the new personal representative has nonintervention powers. And so we cannot intervene unless an estate beneficiary presents a prima facie showing that the personal representative has neglected to execute his or her trust faithfully. RCW 11.68.070, .090. No such showing has been made here. And so the successor personal representative has authority to administer the estate without the intervention of the court, including the authority to assess values, take possession of estate property, and sell that property. RCW 11.48.020; RCW 11.68.090. The trial court then had no power to intervene.
In sum, Russell cannot again litigate the issues of his removal as personal representative, the appointment of a successor, or the valuation of the house and the piano. Interest Preliminary to the Final Distribution
Russell next contends that he is entitled to interest for restitution of the amount he gave up when his deed to the estate house was declared void. He also challenges the trial court's order that he pay interest on the rental amount set in the court's October 2001 decision. And he asserts that he is not obligated to pay interest on the CR 11 sanction imposed in May 2005.
Interest on a Distributive Share of the Estate
Russell argued at trial that he took the estate house as his distributive share of the estate. He lived in the house and conducted his law practice from the estate property from the mid-1980s until the time of trial, mostly rent free. Jones, 152 Wn.2d at 12. Russell deeded the property to himself about one year after his mother's death. But he never recorded the deed. Id. The trial court found that no deed was recorded and that no excise tax affidavit was filed. And it concluded that the house was never "'purchased'" by Russell. CP at 118. The court then invalidated the deed. Russell admitted that he intended to take title as his proportionate share of the estate. The trial court concluded that Russell was not entitled to interest on whatever funds he paid to the estate for the property because there was no actual purchase.
Prejudgment interest is awarded in the discretion of the trial court "to compensate a party who has lost the use of money to which he or she was entitled." Lakes v. von der Mehden, 117 Wn. App. 212, 217, 70 P.3d 154 (2003). This interest may be awarded when the amount of the claim is liquidated or when it is determinable by reference to a fixed standard in a contract. Id. A claim is liquidated if the amount may be computed with exactness from evidence in the record, without reliance on opinion or discretion. Id.
We review a trial court's refusal to award prejudgment interest for abuse of discretion. Colonial Imports v. Carlton Nw., Inc., 83 Wn. App. 229, 242, 921 P.2d 575 (1996).
Russell admits he attempted to take the estate house as his distributive share of the estate property. He had the power as a nonintervention personal representative to distribute the property to himself in satisfaction of his share of the estate. But here he exercised that power in dereliction of his duty by failing to use the fair market value of the house and by using the property as his own before closure of the estate. Jones, 152 Wn.2d at 12-13. The will of Marcella Jones did not contain specific monetary bequests, but generally transferred the estate in equal shares to the four sons. Id. at 6-7. Each son's share of the distribution was a general legacy. And interest is not payable on a general legacy, but only on a specific monetary bequest. First Interstate Bank of Wash. v. Lindberg, 49 Wn. App. 788, 800, 746 P.2d 333 (1987); see also RCW 11.12.220 (interest on a devise is disallowed unless the will expressly provides for such interest). Russell never purchased the property. He was then only entitled to take it as a general legacy. He was not entitled to interest on whatever funds he claims he paid the estate for the invalidated deed. Lindberg, 49 Wn. App. at 800. The trial court did not abuse its discretion in denying his request for prejudgment interest on those funds. Interest on Rent Due
The court ordered Russell to pay interest on the amount of rent the trial court found he owed from the date his mother died in 1995 to the date judgment was entered in October 2001. He had lived in and worked out of the estate house mostly free of charge during that period. He began paying utilities, taxes, and insurance in January 1998. The Supreme Court affirmed the trial court's conclusion that Russell owed rent and noted that the record supported a rental value of $900 per month. Jones, 152 Wn.2d at 14, 15 n. 9. On remand, the trial court concluded that Russell owed the estate interest on $63,900 for 71 months of rent as of the October 2001 decision, less $19,333 in offsets for maintenance and repairs, $4,000 for rent paid, and $2,400 for attorney fees. He was not ordered to pay interest on rent that had accrued since the October 2001 order.
Russell contends the rental amount is unliquidated and therefore he owes no prejudgment interest. Peter and Jeffrey respond that the estate is entitled to prejudgment interest on the back rent. We disagree with both parties.
The trial court ordered Russell to pay interest on $63,900, the total amount of rent owed up to October 2001, less offsets. The nature of this award is postjudgment interest. If the trial court had intended to award prejudgment interest, it would have ordered Russell to pay interest on each rental payment due from September 1995 to October 2001. See, e.g., Seafirst Ctr. Ltd. P'ship v. Erickson, 127 Wn.2d 355, 359-60, 898 P.2d 299 (1995). Instead, he was ordered to pay interest on the total rent owed.
Prejudgment interest is not mandatory. Postjudgment interest is. RCW 4.56.110. Interest on the judgment dates back to and accrues from the date the verdict was entered when a judgment entered on a verdict is affirmed on review. RCW 4.56.110(4). The October 2001 decision awarded the estate rent of $900 per month for 71 months ($63,900) less offsets to be determined by the accounting. This decision was affirmed in Jones, 152 Wn.2d at 14-15, and the amount of the offsets was determined in the subsequent order on the motion to establish distributions entered in May 2005. CP at 117-20. Accordingly, postjudgment interest is due on $63,900 less offsets from the date of the October 2001 judgment. RCW 4.56.110(4).
Interest on CR 11 Sanctions
The trial court awarded Peter and Jeffrey attorney fees of $4,206 as a CR 11 sanction against Russell personally. The award was prompted by Russell's motion for relief from judgment on the value of the estate house. Russell does not challenge the trial court's authority to award attorney fees as a CR 11 sanction (other than to appeal the trial court's denial of his motion for relief from judgment). He contends instead that this order is not a final judgment subject to postjudgment interest.
Again, Russell's essential argument is that nothing in this series of actions amounts to a "judgment" until the final disposition of probate. But the imposition of CR 11 sanctions is separate from the continuing administration of the estate. Postjudgment interest attaches to any judgment from the date of its entry. RCW 4.56.110(4). And a judgment "includes any decree and order from which an appeal lies." CR 54(a)(1). The order awarding Peter and Jeffrey attorney fees for responding to Russell's motion for relief from judgment was a final determination of the parties' rights in that action and was appealable to this court. CR 54(a)(1). Interest attached to that judgment on the date it was entered. RCW 4.56.110(4).
Possession of the Estate House
Finally, Russell contends the trial court erred in granting the estate immediate possession of the estate house and ejecting him. Again, he argues that the estate remains open and therefore all rulings in the probate action are subject to revision, citing RCW 11.44.035.
Summary judgment is appropriate if there is no issue of material fact and the moving party is entitled to judgment as a matter of law. CR 56(c). The trial court's decision to remove Russell as personal representative of the estate and to appoint Mr. Woodard as the replacement was a final judgment on the merits of the action. The decision was affirmed by the Supreme Court. Jones, 152 Wn.2d at 13-20. The issue of Russell's removal as personal representative is final and has, as we have concluded, preclusive effect. It is not subject to revision. The estate was entitled to eject Russell and take possession of the estate house as a matter of law because the personal representative is entitled to possess and control estate property during the administration of the estate. Id. at 14 (citing RCW 11.48.020).
Attorney Fees
Russell requests fees under RCW 11.96A.150 and RAP 14.2 in the event he substantially prevails on appeal. He has not and therefore is not entitled to an award of attorney fees.
Peter and Jeffrey and the estate also request attorney fees under RCW 11.96A.150. It authorizes attorney fees and costs on appeal to any party in the probate proceedings from any other party. RCW 11.96A.150. The Supreme Court awarded Peter and Jeffrey attorney fees on this basis and ordered Russell to pay these fees personally because the litigation was necessitated by his breaches of fiduciary duty. Jones, 152 Wn.2d at 20-21.
In the motions filed by Russell after the Supreme Court's judgment was mandated, Peter and Jeffrey and the estate were forced to respond to the same issues litigated in 2001 and affirmed in 2004. Russell's appeals of the trial court's rulings are then without factual or legal justification. The trial court's conclusion that his continued efforts to thwart the final disposition of the probate have been a significant drain on the estate's assets is supported by this record. We then impose reasonable attorney fees and costs on Russell personally for pursuing this appeal. Ramirez v. Dimond, 70 Wn. App. 729, 734, 855 P.2d 338 (1993) (RAP 18.9 frivolous appeal).
We affirm the trial court and award attorney fees and costs to Peter and Jeffrey and the estate.
A majority of the panel has determined that 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.
Brown, J., Kulik, J., Sweeney, C.J., WE CONCUR.