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In re Matter of Estate of Kelly

The Court of Appeals of Washington, Division Three
Oct 20, 2009
152 Wn. App. 1048 (Wash. Ct. App. 2009)

Opinion

Nos. 27349-1-III; 27907-3-III.

October 20, 2009.

Appeals from a judgment of the Superior Court, Walla Walla County, No. 04-4-00018-0, Donald W Schacht, J., entered July 28, 2008.


Reversed by unpublished opinion per Sweeney, J., concurred in by Schultheis, C.J., and Brown, J.


Finality in probate proceedings is important. So the grounds for reopening an estate once it has been closed are rigorous and limited. The court must conclude that there was extrinsic fraud or that the declaration of completion of probate is void on its face. Here, the court reopened an estate on a showing that the personal representative may have failed to file some creditor's claims. That is not an adequate ground to reopen the estate. We, therefore, reverse the order to reopen.

The actual order appealed from is the order to file a revised accounting. But clearly the question before the court is the propriety of reopening the estate in the first place.

FACTS

Sally Kelly died testate in Walla Walla in January 2004. Two adult children survive her — Shari Stamper and Gary Schwank. Both are named beneficiaries in her will. The will appointed Ms. Stamper the personal representative of the estate. That document granted nonintervention powers to the personal representative. At the time of her death, Ms. Kelly owned property on Tietan Street in Walla Walla. Ms. Stamper had work done on the property before and after her mother's death to prepare the property for sale.

Ms. Kelly left Ms. Stamper her interest in a real estate contract payable by Mr. Schwank, for property in Idaho, her one-half interest in the Tietan Street property, a one-half interest in her bank accounts and investments, and the remainder of her estate. Ms. Kelly sold the Idaho property to Mr. Schwank in 1969 on contract. Ms. Kelly left Mr. Schwank two paintings, a one-half interest in the Tietan Street property, and a one-half interest in her bank accounts and investments.

The court admitted the will to probate in February 2004 and named Ms. Stamper as personal representative. The court also declared the estate solvent, and granted Ms. Stamper nonintervention powers. Ms. Stamper's attorney notified Mr. Schwank of the probate and Ms. Stamper's appointment as personal representative. Mr. Schwank was represented by counsel.

Ms. Stamper completed the probate by August 2004; she submitted her declaration of completion of probate to the court on August 27. She also notified Mr. Schwank; the notice cautioned that the declaration would be final and equivalent to a decree of distribution filed under chapter 11.76 RCW if no petition was filed within 30 days of August 27. No one objected to the declaration of completion.

Ms. Stamper sued Mr. Schwank for breach of contract for his failure to timely pay pursuant to the real estate contract on the Idaho property. Mr. Schwank then moved to vacate the declaration of completion of probate and to reopen the estate on June 21, 2005. He alleged that Ms. Stamper failed to account for a $25,000 seller carry back from the sale of the Tietan Street property and for an additional sum of $65,931.63 (Mr. Schwank does not specify the source); that Ms. Stamper had erroneously deducted administration expenses from the Tietan Street property proceeds rather than charging the whole estate; that Mr. Schwank had only $34,042.27 left to pay on the Idaho real estate contract; that Ms. Stamper owed Ms. Kelly $83,000 that had not been inventoried in the estate; that the inventory was also missing jewelry worth $31,200 and furniture and antiques worth $100,000; and that Ms. Stamper's attorney failed to send Mr. Schwank the accounting and distribution. The trial court issued an order to reopen the estate.

Ms. Stamper filed for chapter 13 bankruptcy in October 2005. Clerk's Papers (CP) (No. 27349-1-III) at 77. The bankruptcy court imposed a stay on adversary proceedings, but later lifted the stay.

The trial court then ordered Ms. Stamper, as personal representative, to file a revised accounting and take other steps to comply with RCW 11.68.100. Ms. Stamper appealed.

DISCUSSION

Ms. Stamper contends that the court did not have authority to reopen this estate absent a showing of fraud or that the declaration of completion was for some reason void. Pitzer v. Union Bank of Cal., 141 Wn.2d 539, 551-52, 9 P.3d 805 (2000).

The question here is whether there has been an adequate showing to reopen the estate because of fraud or because the declaration of completion is void. The essential facts are undisputed and so that question is a question of law. See Sunnyside Valley Irrigation Dist. v. Dickie, 149 Wn.2d 873, 880, 73 P.3d 369 (2003). And our review is de novo. Id.

Finality in probate proceedings is important. Pitzer, 141 Wn.2d at 550-51. To set aside a declaration of completion and reopen the estate, the petitioner, Mr. Schwank, must then show extrinsic fraud or that the declaration is void. Id. at 551-52. Mr. Schwank's essential complaint here is that Ms. Stamper did not file certain creditor's claims. Br. of Resp't (No. 27349-1-III) at 8-9. That will not carry the day. He was notified that the estate was to be closed on August 27, 2004, and he had 30 days to object and/or request an accounting. RCW 11.68.110(2); CP (No. 27349-1-III) at 16-19. He has not shown fraud, raised a question of fact regarding whether there was fraud, or even made a claim of fraud.

Mr. Schwank relies on Pitzer to argue that failure to file creditor's claims renders a decree of distribution, or its equivalent, void. Br. of Resp't (No. 27349-1-III) at 6-7. But Pitzer recognized that a decree of distribution would be void because of a failure to notify a reasonably ascertainable heir. Pitzer, 141 Wn.2d at 551-52. Here, Ms. Stamper's attorney notified Mr. Schwank of Ms. Stamper's appointment as personal representative of their mother's estate on February 10, 2004, and of pendency of the probate proceedings. CP (No. 27349-1-III) at 12. Ms. Stamper completed an inventory and appraisement on June 4, 2004. Id. at 48-49. And Ms. Stamper's attorney notified Mr. Schwank when Ms. Stamper filed her declaration of completion of probate on August 27, 2004. Id. at 13-19. There is no authority to support that failure to file creditor's claims, assuming they were required, renders the declaration void or is analogous to failing to notify reasonably ascertainable heirs. See Reed v. Campbell, 476 U.S. 852, 855-56, 106 S. Ct. 2234, 90 L. Ed. 2d 858 (1986) ("After an estate has been finally distributed, the interest in finality may provide an additional, valid justification for barring the belated assertion of claims, even though they may be meritorious and even though mistakes of law or fact may have occurred during the probate process.").

Ms. Stamper's declaration explained that the personal representative had paid the creditor claims, that no further taxes were owed, and that the estate was ready to be closed. The declaration also asserts that Mr. Schwank was delinquent in paying the balance of the real estate contract on the Idaho property, a balance she declared to be $87,950.50. And it declares that the Tietan Street property had been sold for $225,000, and the net proceeds of the sale were $144,162.34. CP (No. 27349-1-III) at 14. After payment of administration expenses, creditors, final expenses, and professional fees and costs, $100,550.71 remained as the estate's assets. Ms. Stamper declared that she was retaining one-half of that sum, $50,275, to offset the real estate contract. She continued that Mr. Schwank would "remain obligated to the personal representative for the balance due on the land contract after the offset in the amount of $37,675.50." CP (No. 27349-1-III) at 15. Ms. Stamper also sent notice of the Declaration of Completion of Probate with a cover letter to Mr. Schwank. Id. at 16-17, 439.

Ms. Stamper delivered the paintings to Mr. Schwank's lawyer's office in Lewiston, Idaho, in October 2004. That is all that she was required to do. RCW 11.68.112.

There is no showing or claim of fraud and no showing that would support the legal conclusion that the declaration of completion of probate here was void. Pitzer, 141 Wn.2d at 552. The court erred in reopening this estate on the showing here.

Mr. Schwank has now filed a separate appeal (Court of Appeals No. 27907-3-III) in this matter, after Ms. Stamper's appeal (Court of Appeals No. 27349-1-III) was on review here. His challenge implicates the same facts, questions of law, and ultimately the same disposition as Ms. Stamper's appeal. We therefore have authority to consolidate his appeal with hers. RAP 7.2(e); RAP 3.3(b). Mr. Schwank objected to the amended declaration of completion of probate Ms. Stamper filed while awaiting review of her appeal. CP (No. 27907-3-III) at 440-43. And Mr. Schwank requested an evidentiary hearing for his objection. CP (No. 27907-3-III) at 451. In an appropriate court order, the trial court concluded that Ms. Stamper had filed her revised accounting, there was no need for an evidentiary hearing, and there were no further issues to be litigated. Our disposition of Ms. Stamper's appeal — to reverse the court's order reopening the estate — renders moot Mr. Schwank's challenge to the court's subsequent decision to forego an evidentiary hearing. And we, then, deny Mr. Schwank's appeal.

Both parties claim a right to attorney fees and costs. We deny both claims.

We reverse the trial court's order to reopen Ms. Kelly's estate (Court of Appeals No. 27349-1-III). We dismiss Mr. Schwank's appeal (Court of Appeals No. 27907-3-III).

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.

SCHULTHEIS, C.J. and BROWN, J., concur.


Summaries of

In re Matter of Estate of Kelly

The Court of Appeals of Washington, Division Three
Oct 20, 2009
152 Wn. App. 1048 (Wash. Ct. App. 2009)
Case details for

In re Matter of Estate of Kelly

Case Details

Full title:In the Matter of the Estate of SALLY KELLY

Court:The Court of Appeals of Washington, Division Three

Date published: Oct 20, 2009

Citations

152 Wn. App. 1048 (Wash. Ct. App. 2009)
152 Wash. App. 1048