Opinion
No. 58881-8-I.
February 19, 2008.
Appeal from a judgment of the Superior Court for King County, No. 04-2-23558-8, Andrea A. Darvis, J., entered July 6, 2006.
Affirmed by unpublished opinion per Baker, J., concurred in by Schindler, A.C.J., and Becker, J.
This appeal stems from a dispute regarding whether Iris Lerner or Mike Sutton is the rightful beneficiary to an annuity purchased by John Servold.
Servold named Mike Sutton as the primary beneficiary four months before he died. One month before he died, he changed the beneficiary designation, naming Iris Lerner as the primary beneficiary. The holder of the annuity, AIG Annuity Insurance Company, filed interpleader to determine which party was entitled to the annuity proceeds. A jury trial was held, and the jury returned a verdict in favor of Sutton. We affirm.
Factual Background
John Servold applied to AIG for an annuity on August 12, 2002, listing Mike Sutton and June Struckman as primary beneficiaries of the policy, to share equally in the proceeds when Servold died. On January 13, 2004, Servold submitted a service request to change the primary beneficiary to Mike Sutton and the contingent beneficiary to Iris Lerner. Prior to making the change, Servold met with a lawyer, Stephen Sward, to discuss changes to his overall estate plan. According to Sward, Servold was adamant that he wanted Sutton to receive the entire annuity. Sward filled out the beneficiary change form, and witnessed and notarized Servold's signature. Iris Lerner was present throughout Servold's meeting with Sward.
Three months later, on April 4, 2004, AIG received another service request, this time naming Lerner as the primary beneficiary and Sutton as the contingent beneficiary. Lerner took Servold to a notary, where he signed the service request along with other documents relating to the sale of Servold's mobile home in California. Servold did not seek the advice of an attorney before requesting this change. Lerner testified that the mobile home sales documents did not require notarization, that the documents she actually submitted regarding the sale were later signed by her using the power of attorney Servold had given her, and that she and Servold had the extra set of documents notarized for "record keeping" purposes only.
She testified that she had filled in the beneficiary change form and listed herself as the primary beneficiary and Mike Sutton as the contingent beneficiary. She drove Servold to the notary's office in Servold's truck, and the notary came out to the truck to witness his signatures.
Servold was admitted to the hospital for extensive surgery related to locally advanced colon carcinoma in December 2003. When he was released in January 2004, he moved into the Lerner home and was cared for by Iris Lerner. He was living with the Lerners at the time the beneficiary designation was changed. Servold lived with the Lerners until his death on May 6, 2004.
Sutton and his wife, Kathi, thought the circumstances surrounding Servold's death and the changes to Servold's estate, including the annuity beneficiary, were suspicious. Kathi contacted AIG's fraud investigation division and alleged that Lerner was committing annuity fraud. AIG assigned an investigator to look into the allegation. Kathi also contacted Adult Protective Services. The King County Sheriff's Office conducted an investigation and concluded that Servold appeared to have died from natural causes and that there was insufficient evidence to justify exhuming his body for an autopsy.
Procedural Background
Sutton, as an individual and in his capacity as co-personal representative of Servold's estate, sued Lerner and AIG initially to reinstate Sutton and Struckman as primary beneficiaries on the ground that the April 2004 beneficiary change was a result of undue influence by Lerner.
Lerner and her husband, Spencer, counterclaimed against Mike and Kathi Sutton for defamation, false light invasion of privacy, tortious interference with a gift, intentional infliction of emotional distress, negligent infliction of emotional distress, loss of consortium, and declaratory judgment to determine ownership of the annuity. Lerner cross-claimed against AIG for declaratory judgment, breach of contract, bad faith, and violations of the Washington Consumer Protection Act (CPA).
Although Kathi Sutton was added as a defendant in this action, in the interest of consistence and clarity, we hereinafter refer to respondents Mike and/or Kathi Sutton using the singular name "Sutton."
Although claims were brought by both Iris and Spencer Lerner, we hereinafter refer to the appellants Iris and/or Spencer Lerner using the singular name "Lerner".
Ch. 19.86 RCW.
AIG counterclaimed in interpleader, asking the court to require Lerner and Sutton to litigate their claims to the annuity before the court.
The court granted summary judgment to AIG on all claims against it, and allowed it to interplead the funds. The court granted partial summary judgment to Sutton, dismissing the false light invasion of privacy and tortious interference with a gift claims. Lerner's emotional distress claims were later dismissed as a matter of law. A jury trial was held on the undue influence and defamation claims. The jury returned a verdict for Sutton on the undue influence claim and against Lerner on the defamation claim. The trial court entered judgment on the defamation claim, awarding Sutton attorney fees, litigation expenses, and statutory damages. On the undue influence claim, the trial court entered judgment against Lerner, rendering the April 5, 2004, beneficiary change null and void.
Discussion
On appeal, Lerner makes 63 assignments of error, but fails to adequately address many of the issues raised. Rule of Appellate Procedure (RAP) 10.3(a)(6) requires parties to present argument in support of the issues presented for review, together with citations to legal authority. This court will not consider issues that are unsupported by citation to authority, treated only in passing, or lacking reasoned argument. Although we have reviewed each issue and assignment of error raised in this appeal, we decline to address some of Lerner's more frivolous claims in our opinion.
Palmer v. Jensen, 81 Wn. App. 148, 153, 913 P.2d 413 (1996), remanded on other grounds, 132 Wn.2d 193, 937 P.2d 597 (1997); Mairs v. Dep't of Licensing, 70 Wn. App 541, 544-45, 854 P.2d 665 (1993).
CLAIMS AGAINST AIG
Lerner cross-claimed against AIG for declaratory judgment, breach of contract, bad faith, and claims under the CPA. The trial court granted summary judgment to AIG on all claims relating to the annuity. The court further authorized AIG to retain the annuity proceeds pending the court's order regarding disbursement and required AIG to pay interest at the contract rate.
Lerner contends that the trial court erred in granting summary judgment to AIG, denying her motion to continue, and denying her motion for reconsideration. She further contends that AIG is liable for costs because it did not act as an impartial stakeholder, and liable for interest because it failed to deposit the annuity proceeds into the court registry, despite the court's explicit ruling allowing retention of the funds pendente lite. An appellate court reviews summary judgment orders de novo, engaging in the same inquiry as the trial court.
Smith v. Safeco Ins. Co., 150 Wn.2d 478, 483, 78 P.3d 1274 (2003) (citing Jones v. Allstate Ins. Co., 146 Wn.2d 291, 300, 45 P.3d 1068 (2002)).
Lerner assigns error to the trial court's order granting summary judgment to AIG, which dismissed AIG from the lawsuit and allowed it to interplead the annuity funds. First, she argues that AIG assisted Sutton's lawsuit in order to retain the annuity proceeds. This contention is wholly unsupported by the record.
Second, Lerner contends that AIG is liable for interest because it failed to deposit the proceeds into the court registry. In State Bank of Wilbur v. Wilbur Mission Church, the court concluded that the Bank had maintained the position of an impartial stakeholder throughout the interpleader action. In so concluding, the court considered the facts that the Bank had disclaimed any interest in the funds and deposited the funds with the clerk of court. State Bank of Wilbur does not state a rule requiring an interpleader plaintiff to deposit funds where the trial court has authorized it to retain those funds.
44 Wn.2d 80, 265 P.2d 821 (1954).
State Bank of Wilbur, 44 Wn.2d at 89.
Here, AIG did not refuse to deposit the funds, but rather requested to retain the funds in order to minimize the tax consequences to the ultimate beneficiary. AIG's retention of the funds was in the best interest of the beneficiary because AIG continued to pay the contract interest rate on the annuity, which exceeded the interest that would have accrued had the funds been deposited into the court registry. The trial court correctly concluded that if Lerner were to prevail on her claim, she would "be in a better position if that account continue[d] to accumulate interest at the minimum rate provided in the contract than she would be if it were placed in the registry of the court." AIG neither favored Sutton over Lerner nor failed to maintain the position of an impartial stakeholder.
Lerner's counsel admitted this fact at the summary judgment hearing.
AIG was entitled to interplead the funds rather than pay Lerner when it knew that Sutton was also claiming the funds. RCW 4.08.160 provides:
Anyone having in his possession, or under his control, any property or money, or being indebted, where more than one person claims to be the owner of, entitled to, interested in, or to have a lien on, such property, money or indebtedness, or any part thereof, may commence an action in the superior court against all or any of such persons, and have their rights, claims, interest or liens adjudged, determined and adjusted in such action.
Lerner dwells on the fact that only she "filed" a claim for the annuity proceeds with AIG. She implies that AIG was not entitled to interplead the funds because Sutton did not "file" a claim with AIG. However, filing an official claim form is not required under the statute. Sutton's letter to AIG was sufficient to justify AIG's actions when it froze the account and filed the interpleader action. Lerner fails to explain how AIG favored Sutton when it sent him a copy of the most recent beneficiary designation.
Lerner contends that the trial court erred in dismissing her bad faith and CPA claims because AIG denied her claim without making a good faith investigation. But this is not a first-party liability insurance case.
Both Lerner and Sutton claimed they were entitled to the annuity proceeds. Because there were two competing claims for the same funds, AIG properly sought court permission to interplead the funds.
Lerner's assignments of error regarding her breach of contract claim, CPA claim, the trial court's denial of her motion to continue, and denial of her motion to reconsider summary judgment lack merit, and we do not discuss them further.
MIKE KATHI SUTTON
Lerner claims that the trial court erred when it granted summary judgment to Sutton regarding their claim for tortious interference with a gift. However, because no Washington court has recognized this tort, we affirm the trial court's grant of summary judgment.
Lerner assigns error to the trial court's pretrial rulings regarding motions in limine and a motion to exclude the defense of the common interest privilege. However, these claims are not supported by reasoned argument and we decline to consider them.
Lerner contends that the trial court abused its discretion in excluding Sutton's attorney, James Hurt, as a witness. A court abuses its discretion when its decision is manifestly unreasonable, based upon untenable grounds, or is arbitrary. Lerner cites no evidence showing that Hurt was necessary to their claims for negligent and intentional emotional distress, citing only to their response to Sutton's motion in limine to strike Hurt from Lerner's witness list and their attorney's oral argument on the motion. Hurt was Sutton's attorney and his involvement in the dispute was limited to his role as an advocate for Sutton. The trial court did not abuse its discretion when it barred Hurt as a witness.
Harris v. Drake, 152 Wn.2d 480, 493, 99 P.3d 872 (2004).
Lerner contends that the trial court erred in dismissing their claims of outrage and negligent infliction of emotional distress. A judgment as a matter of law is reviewed de novo. This court may affirm the judgment if, after viewing the evidence in the light most favorable to the nonmoving party, there is no legally sufficient evidentiary basis for a reasonable jury to find for that party.
Estate of Bordon v. Dep't of Corr., 122 Wn. App. 227, 235, 95 P.3d 764 (2004).
Estate of Bordon, 122 Wn. App. at 240.
As Lerner admits, one of the elements of outrage is extreme and outrageous conduct. The only conduct argued as a basis for this claim is Sutton's request to have Servold's body exhumed in conjunction with what they believed was a suspicious death. Viewing the evidence in the light most favorable to Lerner, no reasonable person could conclude that Sutton's conduct was "'so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community.'"
Kloepfel v. Bokor, 149 Wn.2d 192, 195-96, 66 P.3d 630 (2003).
Robel v. Roundup Corp., 148 Wn.2d 35, 51, 59 P.3d 611 (2002) (quoting Dicomes v. State, 113 Wn.2d 612, 630, 782 P.2d 1002 (1989)).
Because Lerner fails to argue the elements of negligent infliction of emotional distress, but merely states conclusorily that she presented evidence of "objective symptomatology through Dr. Warner's testimony," we decline to consider this claim.
Lerner argues that the trial court should have dismissed Sutton's claim to the annuity for lack of standing, because he had no vested right in the annuity. However, Lerner cites no authorities that support this contention. Sutton had a statutory right to sue Lerner based on her assertion of the exertion of undue influence over Servold. RCW 11.96A.080 provides that "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." A "[m]atter" includes "any issue, question, or dispute involving . . . [t]he determination of any class of creditors, devisees, legatees, heirs, next of kin, or other persons interested in an estate, trust, nonprobate asset, or with respect to any other asset or property interest passing at death."
Lerner cites: Harris v. Harris, 60 Wn. App. 389, 398-99, 804 P.2d 1277 (1991) (community property agreement between husband and wife is superior to beneficiary designation naming former wife as beneficiary); Estate of Lennon v. Lennon, 108 Wn. App. 167, 183-84, 29 P.3d 1258 (2001) (estate had standing to challenge unauthorized distributions from joint account, despite the fact that joint tenant became sole owner when decedent died); High Tide Seafoods v. State, 106 Wn.2d 695, 702, 725 P.2d 411 (1986) (plaintiffs lacked constitutional standing to challenge a state tax by asserting treaty rights of Indians); Timberlane Homowners Ass'n v. Brame, 79 Wn. App. 303, 308-09, 901 P.2d 1074 (1995) (homeowners' association lacked standing to enforce members' easement rights in a common area).
In Bosworth v. Wolfe, our Supreme Court held that a former beneficiary under a "certificate of benefits" had standing to sue a party who had unduly influenced the decedent to transfer the certificate to her. The majority of state courts that have directly addressed the question of whether a former beneficiary to an insurance policy has standing to sue for undue influence have held that there is standing. We agree with the majority rule that a former beneficiary has standing to bring suit to contest a change in beneficiary on the basis that the change was a result of undue influence exerted against the insured.
146 Wash. 615, 264 P. 413 (1928).
Bosworth, 146 Wash. at 624-25.
See Cobb v. Justice, 954 S.W.2d 162, 167 n. 2 (Tex.App. 1997) (fifteen states have affirmed the right of a prior beneficiary to sue on the basis of undue influence; eight others have reviewed similar cases without questioning the propriety of the prior beneficiary's standing, and only six states have concluded that prior beneficiary does not have standing).
Cobb, 954 S.W. 2d at 168.
Lerner assigns error to the court's instructions 6, 8, 9, 16, 17, 18, and 21. We review jury instruction challenges de novo, and an instruction that contains an erroneous statement of law is reversible error where it prejudices a party. The trial court has considerable discretion as to the wording of instructions and how many instructions are given. Jury instructions are sufficient if they allow parties to argue their theories of the case, do not mislead the jury, and, when read as a whole, properly inform the jury of the law to be applied.
Cox v. Spangler, 141 Wn.2d 431, 442, 5 P.3d 1265, 22 P.3d 791 (2000).
See Hue v. Farmboy Spray Co., 127 Wn.2d 67, 92 n. 23, 896 P.2d 682 (1995).
Cox, 141 Wn.2d at 442 (quoting Hue, 127 Wn.2d at 92).
Lerner contends that the trial court erred by giving instruction 6 because it did not give the "highly probably" definition of clear, cogent, and convincing evidence and because it gave a definition for a preponderance of the evidence in the same instruction. The court instructed that a proposition is proved by clear, cogent, and convincing evidence if it is "proved by evidence that carries greater weight and is more convincing than a preponderance of the evidence. However, it does not mean that the proposition must be proved by evidence that is convincing beyond a reasonable doubt." The instruction contained a legally acceptable definition of clear, cogent, and convincing evidence, and the effectiveness of the instruction was not compromised by including the preponderance definition in a different paragraph in the same instruction.
See Davis v. Dep't of Labor Indus., 94 Wn.2d 119, 126 615 P.2d 1279 (1980).
Lerner contends that instruction 8 improperly shifted the burden of proof regarding undue influence from Sutton to Lerner. She argues that, because the beneficiary designation on an annuity is a "quasi-testamentary transfer," the trial court should have applied the rule for testamentary transfers rather than the rule for inter vivos gifts. We disagree.
As a general rule, the party seeking to set aside an inter vivos gift has the burden of showing the gift is invalid. But if the recipient has a confidential or fiduciary relationship with the donor, the burden shifts to the donee to prove "a gift was intended and that it was not the product of undue influence." The donee's burden of proof is clear, cogent, and convincing evidence. In a will contest, however, the statutory burden to prove that the will was procured by undue influence remains on the party challenging the validity of the will.
Lewis v. Estate of Lewis, 45 Wn. App. 387, 388, 725 P.2d 644 (1986).
Lewis, 45 Wn. App. at 389; White v. White, 33 Wn. App. 364, 368, 655 P.2d 1173 (1982).
Pedersen v. Bibioff, 64 Wn. App. 710, 720, 828 P.2d 1113 (1992).
The burden of proof in a will contest is statutory and applies specifically to will contests, not "quasi-testamentary transfers." Lerner cites no authority showing that the burden of proof should have remained on Sutton. We decline to judicially expand the statute to include non-testamentary transfers made through an annuity contract.
The remaining challenges to the jury instructions are meritless or lack reasoned argument or citation to supporting authority. Lerner assigns error to the jury verdicts. An appellate court will not overturn a jury verdict unless the verdict is clearly unsupported by substantial evidence. Substantial evidence is evidence sufficient to convince a fair-minded person of the truth of the matter. An appellate court will not assume that a jury did not fairly or objectively consider the evidence, and will not substitute its judgment for the jury's even if it is convinced the jury's verdict was wrong. Nor will we invade the province of the jury to determine the credibility of witnesses and the weight of the evidence. Because both jury verdicts are supported by substantial evidence, we affirm.
Burnside v. Simpson Paper Co., 123 Wn.2d 93, 107-08, 864 P.2d 937 (1994).
Miller v. City of Tacoma, 138 Wn.2d 318, 323, 979 P.2d 429 (1999) (quoting Robinson v. Safeway Stores, Inc., 113 Wn.2d 154, 157, 776 P.2d 676 (1989)).
Burnside, 123 Wn.2d at 108 (quoting State v. O'Connell, 83 Wn.2d 797, 839, 523 P.2d 872 (1974)).
ATTORNEY FEES
When reviewing an award of attorney fees, the appellate court must first determine whether the prevailing party was entitled to attorney fees, and then determine whether the award was reasonable. We review whether a party is entitled to attorney fees de novo and whether the amount of fees was reasonable for an abuse of discretion. We review the trial court's findings of fact for substantial evidence. A trial court's findings of fact must justify its conclusions of law.
N. Coast Elec. Co. v. Selig, 136 Wn. App. 636, 642-43, 151 P.3d 211 (2007) (quoting Ethridge v. Hwang, 105 Wn. App. 447, 459, 20 P.3d 958 (2001)).
N. Coast Elec., 136 Wn. App. at 643.
In re Estate of Jones, 152 Wn.2d 1, 8, 93 P.3d 147 (2004).
Dumas v. Gagner, 137 Wn.2d 268, 280, 971 P.2d 17 (1999).
The trial court awarded Sutton attorney fees, litigation expenses, and statutory damages pursuant to RCW 4.24.510. The statute provides:
A person who communicates a complaint or information to any branch or agency of federal, state, or local government . . . is immune from civil liability for claims based upon the communication to the agency or organization regarding any matter reasonably of concern to that agency. . . . A person prevailing upon the defense provided for in this section is entitled to recover expenses and reasonable attorneys' fees incurred in establishing the defense and in addition shall receive statutory damages of ten thousand dollars. Statutory damages may be denied if the court finds that the complaint or information was communicated in bad faith.
Lerner argues that Sutton did not prevail under this statute, because they waived any immunity under RCW 4.24.510 by making communications to nongovernmental persons or entities, namely AIG. However, they fail to provide reasoned argument, and cite no authority in support of this contention. The court's findings were supported by substantial evidence, its conclusions of law were justified by the findings, and the amount awarded was reasonable. Sutton also requests fees and expenses incurred in defense of Lerner's appeal of the defamation verdict. We grant Sutton's request for fees and expenses relating to the defamation verdict.
The most relevant case cited is Harris v. City of Seattle, 302 F.Supp.2d 1200 (W.D. Wash. 2004), which stated that if defendants had disseminated false information, they "might not be able to seek refuge under RCW 4.24.510." Harris, 302 F. Supp.2d at 1203. In Harris, the defendants were allowed to invoke the immunity because plaintiff failed to show actual malice.
In addition, we award Sutton and AIG reasonable attorney fees and costs for having to respond to Lerner's frivolous appeal. RAP 18.9 provides that "[t]he appellate court on its own initiative or on motion of a party may order a party or counsel . . . who . . . files a frivolous appeal, or fails to comply with these rules to pay terms or compensatory damages to any other party who has been harmed by the delay or the failure to comply or to pay sanctions to the court." "A frivolous appeal is one which, when all doubts are resolved in favor of the appellant, is so devoid of merit that there is no chance of reversal." This appeal contained 63 assignments of error. None of the issues raised by appellants is supported by well-reasoned argument. Almost all of appellants' citations to authority are either inapposite or completely irrelevant. Several cases cited by appellants support their opponents' legal position. We conclude that sanctions are also warranted under RAP 10.7 because appellants have filed an opening brief that violates RAP 10.3, which requires a party to present argument and citations to authority in support of the issues presented for review. Lerner's claims on appeal have no basis in law, there was no possibility of reversal in this case, and reasonable minds could not differ as to the proper outcome. We therefore award reasonable attorney fees and costs to Sutton and to AIG.
RAP 18.9(a).
Fid. Mortgage Corp. v. Seattle Times Co., 131 Wn. App. 462, 473, 128 P.3d 621 (2005) (citing Streater v. White, 26 Wn. App. 430, 434-35, 613 P.2d 187 (1980)).
Fid. Mortgage Corp., 131 Wn. App. at 474.
Conclusion
We affirm all orders entered below. We affirm the judgment entered on the jury verdict, which states that Iris Lerner unduly influenced John Servold and renders the April 5, 2004, change in beneficiary null and void. We affirm the judgment granting fees, expenses, and statutory damages under RCW 4.24.510. Because the linked appeal is being remanded for entry of findings of fact and conclusions of law as to attorney fees, we likewise remand this matter to the trial court to determine the amount of reasonable attorney fees and expenses incurred in defending the appeal of the defamation verdict, and reasonable fees and costs for the remainder of this appeal.
AFFIRMED.
WE CONCUR: