Opinion
Nos. 23827-0-III; 25777-1-III; 25842-4-III.
July 31, 2008.
Appeals from a judgment of the Superior Court for Yakima County, No. 03-2-00629-6, Robert N. Hackett, Jr., J., entered February 3, 2005, and November 17 and December 26, 2006.
Affirmed by unpublished opinion per Sweeney, J., concurred in by Kulik, A.C.J., and Korsmo, J.
This appeal follows postdissolution efforts by a husband to avoid making equalization payments ordered by the court to his wife. He transferred most of his cash to a sister in Colorado and leased his Yakima, Washington, orchard to another sister in Oregon. These actions were calculated to leave him judgment proof.
The trial court ordered the husband to stop removing orchard equipment that the court ruled was fixtures. And the court set aside the transfers by the husband to his sisters as fraudulent. The trial court awarded the wife attorney fees based on the husband's intransigence.
The husband assigns error to a number of the court's rulings. We conclude that none have merit. We affirm the rulings of the trial court and award the wife attorney fees and costs on appeal.
FACTS
Eric P. Weinheimer and Kim Mikkelsen married in 1976 and separated in 1999. The dissolution court in March 2002 awarded Mr. Weinheimer about $610,000 in cash and the couple's apple and apricot orchard. The court awarded Ms. Mikkelsen the family residence and an equalizing judgment for $360,000. Mr. Weinheimer appealed the trial court's disposition of property. We affirmed. In re Marriage of Weinheimer, noted at 117 Wn. App. 1033 (2003).
The trial court ordered Mr. Weinheimer to pay $90,000 within 10 days of the decree's entry, annual payments from 2003 through 2006, and a balloon payment of the remaining principal and interest by January 1, 2007, all to satisfy the equalizing lien. The lien was secured by two mortgages on the orchard.
Mr. Weinheimer never made any of the equalization payments. He closed all his Washington bank accounts and transferred $607,443 to an account for his sister Betty Schmidt in Billings, Montana, within months of the dissolution. Ms. Schmidt transferred these funds to her bank in Colorado in June 2002. She signed a promissory note to Mr. Weinheimer on June 13, 2002, for $600,000, due with interest by December 31, 2007.
On June 28, 2002, the trial court found Mr. Weinheimer in contempt of court because he failed to pay the equalization payment and ordered him to begin serving a jail sentence. He leased his orchard, effective June 28, 2002, to his sister, Diane Gilmore. She lives in Oregon. The lease granted Ms. Gilmore title to all crops grown from 2002 through 2004. In those three crop years, the orchard produced net operating revenues of over $1 million. Ms. Gilmore agreed to pay the real estate taxes and irrigation assessments (about $12,000 annually) as rent.
Mr. Weinheimer served a nine-month jail sentence, although he was on work release for several of those months so he could manage the orchard. The trial court eventually released him from custody when it became apparent he would not relent. His remaining assets were very small after his transfers of funds and property. He had no bank accounts and kept monies from his consulting work in a dresser drawer. His sisters arranged for payment of his living expenses.
Ms. Mikkelsen sued Mr. Weinheimer, Ms. Gilmore, and Ms. Schmidt in August 2003 for mortgage foreclosure and to set aside the transfers to Ms. Gilmore and Ms. Schmidt as fraudulent. The trial court ordered foreclosure of the mortgages on the orchard and payment of $448,508 to Ms. Mikkelsen (including interest and $5,000 in attorney fees). Ms. Mikkelsen bought the orchard at the sheriff's sale in January 2004 for $457,798. Mr. Weinheimer then exercised his statutory right of redemption. Ms. Gilmore remained as tenant of the orchard until she and Mr. Weinheimer relinquished possession in November 2004.
Ms. Mikkelsen moved for a preliminary injunction and a temporary restraining order in October 2004 to prevent Mr. Weinheimer from removing several pieces of large equipment from the orchard. This equipment included a diesel engine, five gas-powered wind machines, two propane-powered wind machines, and pumping equipment. The trial court concluded that the items were fixtures and enjoined Mr. Weinheimer from removing the equipment. The court denied Mr. Weinheimer's motion for reconsideration. He appealed. We stayed the appeal pending the resolution of Ms. Mikkelsen's fraudulent conveyance action.
Her fraudulent conveyance claims went to trial in November 2005. The trial court concluded that the cash transfer to Ms. Schmidt and the lease to Ms. Gilmore were fraudulent. The trial judge made appropriate findings of fact and conclusions of law to support his decision. In the meantime, Ms. Schmidt appealed the court's assertion of personal jurisdiction over her. All of the various actions were consolidated in this one appeal.
In March 2007, Mr. Weinheimer filed pro se a CR 60 motion to reopen the dissolution decree. His motion was denied and he has appealed that decision in case No. 26079-8-III. Ms. Mikkelsen's motion to consolidate this fourth appeal with the others was denied by Commissioner's Ruling in October 2007.
DISCUSSION
Fixtures
The trial court held a show cause hearing in November 2004 and entered findings of fact supporting its conclusion that the wind machines, diesel engine, and pumping equipment were fixtures of the orchard real estate. It then enjoined Mr. Weinheimer from removing them. He now contends the trial court erred in ruling that these items were fixtures rather than personal property awarded to him in the dissolution decree.
The questions are whether sufficient evidence supports the court's findings and whether those findings support the judge's conclusion that these chattels became affixed to the real property. Scott v. Trans-Sys., Inc., 148 Wn.2d 701, 707-08, 64 P.3d 1 (2003). The standard of review for the first question is substantial evidence (or, more accurately, whether substantial evidence supports the court's findings). Id. The standard of review for the second question is de novo. Soltero v. Wimer, 159 Wn.2d 428, 433, 150 P.3d 552 (2007).
The standard of review here is complicated by the fact that the court decided the question on documents only. Clerk's Papers (CP) at 7-8. So Mr. Weinheimer argues that our review is de novo and that we must consider all facts and reasonable inferences in the light most favorable to him. He relies on In re Marriage of Langham for the proposition that we review de novo when the court decides a question based on only documents because the trial judge is in no better position than we are to decide the questions of fact. In re Marriage of Langham, 153 Wn.2d 553, 559, 106 P.3d 212 (2005).
Clerk's Papers filed with appeal No. 23827-0-III are signified by "CP," while Clerk's Papers filed with appeals No. 25777-1-III and No. 25842-4-III are signified by "CP1."
The standard of review does not make a difference here, however, for a number of reasons. First, the essential facts that drive our legal analysis are not disputed. The question is whether those facts support the court's conclusion that these chattels became "fixed" to the land. Scott, 148 Wn.2d at 707-08. That is a question of law that we would not defer to the trial court, anyway. Soltero, 159 Wn.2d at 433. Second, we would reach the same result even applying a de novo standard of review, given our review of the record, including the documents supporting the court's decision to enjoin removal of the equipment. Finally, this question came before the trial judge on Ms. Mikkelsen's motion for an injunction, to prohibit Mr. Weinheimer from removing this equipment from the property. And the announced standard of review for an injunction (an equitable remedy) is abuse of discretion. City of Bremerton v. Sesko, 100 Wn. App. 158, 162, 995 P.2d 1257 (2000). So we would be deferring to the trial judge's decision as to how best to enforce his judgment, anyway. Id.
A chattel becomes a fixture if (1) it is annexed to the realty or to something appurtenant to the realty, (2) its use is consistent with the use of the realty, and (3) it is intended that the annexation be permanent. Dep't of Revenue v. Boeing Co., 85 Wn.2d 663, 667, 538 P.2d 505 (1975); Glen Park Assocs., LLC v. Dep't of Revenue, 119 Wn. App. 481, 487, 82 P.3d 664 (2003). Each prong of the test must be met for an item to be labeled a fixture. Boeing, 85 Wn.2d at 668.
Mr. Weinheimer assigns error to the court's findings that the diesel engine was a "necessary functioning part" of the orchard's pumping systems and that the wind machines were annexed, integral parts of the orchard. CP at 8-9. He says that he never intended this equipment to be permanent fixtures of the orchard.
Usually annexation refers to the actual physical attachment of an item so that it becomes a part of the realty. Pinneo v. Stevens Pass, Inc., 14 Wn. App. 848, 851, 545 P.2d 1207 (1976). An item also may be constructively annexed to realty if the item is a "necessary functioning part of or accessory to an object which is a fixture." W. Ag Land Partners v. Dep't of Revenue, 43 Wn. App. 167, 172, 716 P.2d 310 (1986).
Here, the diesel engine was mounted on railroad ties so it could be moved back and forth from the well pump to the pond pump. It was not permanently attached to one pump or the other. But it was the source of energy to run both pumps. And both pumps were installed in wells that were actually annexed to the realty. The court's finding that the engine was a necessary functional part of the irrigation system is easily supported by this record. And that finding supports the court's conclusion that the engine was constructively annexed to the orchard. Id. at 172-73.
The Weinheimers bought five wind machines with the orchard in 1992. All but one of the machines were then removed and leased to another orchardist while some of the Weinheimers' trees were replaced. Eventually, the wind machines were returned to the orchard and two additional wind machines were added. The seven wind machines were bolted to concrete pads and had not been moved since that installation in 1996. Each weighed around 4,500 pounds. These findings are not challenged on appeal and again support the court's conclusion that the wind machines were actually annexed to the realty. Pinneo, 14 Wn. App. at 851.
Most important in determining whether an item is a fixture is the third prong of the test: the intent of the annexor. W. Ag, 43 Wn. App. at 173. The test is the objective rather than the subjective intent of the annexor. Boeing, 85 Wn.2d at 668. We consider the nature of the item annexed, the annexor's relationship to the realty, the manner of annexation, and the purpose of the annexation. Id.; W. Ag, 43 Wn. App. at 173. The rebuttable presumption is that the property owner intended to enrich the freehold when he annexed an item to his land. W. Ag, 43 Wn. App. at 173.
Mr. Weinheimer contends the findings of fact do not support the conclusion that he intended the pumping systems and the wind machines to be permanent fixtures of the orchard. He relies on language in Boeing, 85 Wn.2d at 669-70. There, the court concluded that huge, multiple-tonnage assembly structures called jigs, many of which were bolted to the floor, were not fixtures in a Boeing aircraft assembly plant. The court cited evidence that the jigs were reported as personalty for property tax purposes, were listed as tools in Boeing's equipment manual, and were easily removed by disassembly without undue harm to the jigs. Id. More important, the court noted, the future of the assembly plant was in dispute; if the plant was used to manufacture larger or smaller aircraft, the jigs would have to be discarded. Id. at 669.
Mr. Weinheimer argues that neither the pumping systems nor the wind machines were necessary to the running of the orchard. He contends the Roza Irrigation District's pressurized system provided sufficient irrigation water so that no additional pumping was required. He also contends the wind machines were not necessary to protect the trees from frost damage, noting that two adjacent orchards did not use wind machines. But the test is not whether the items are necessary to the use of the realty, but whether their use is consistent with the use of the realty. Id. at 667. Here, the diesel engine and the wind machines were used to provide water and frost protection to the orchard. This use was consistent with the use of the realty. And the court so concluded.
Mr. Weinheimer next refers us to evidence that shows a lack of intent to permanently annex the wind machines and the pumping systems to the orchard. He notes that the wind machines were not listed in the original mortgage to the Weinheimers as fixtures. The wind machines were listed as personalty for property tax purposes. And the Yakima County assessor treated the wind machines and pumping systems as personal property. Ms. Mikkelsen's mortgages on the orchard did not list the wind machines or pumping systems as fixtures. Finally, he notes that the dissolution decree awarded him the "[o]rchard farm equipment." CP at 338.
Ms. Mikkelsen's evidence showed that Mr. Weinheimer insisted upon reinstalling the original wind machines when the orchard was replanted. And he bought two additional wind machines for frost protection. The appraisal of the orchard used in the dissolution decree included the wind machines and pumping systems (including the diesel motor) as fixtures. The value of the unspecified "[o]rchard farm equipment" awarded to Mr. Weinheimer was listed as $67,201 (CP at 338), yet the value assigned to the wind machines alone was $158,000 in 2004. She points out that the wind machines and pumping systems did not need to be listed in the mortgages because they were fixtures and this meant that they were part and parcel of the real property. Finally, she argues that the treatment of items as personal property for tax purposes does not control. See W. Ag, 43 Wn. App. at 169-70.
The presumption here is that the wind machines and diesel motor Mr. Weinheimer installed were intended to enrich the economic potential of the orchard. Id. at 173-74. And, while the presumption may be overcome by Mr. Weinheimer's evidence, Ms. Mikkelsen's showing easily supports the trial court's findings that the Weinheimers installed this equipment because they considered it necessary to provide frost protection and to augment irrigation for the orchard. Bradley v. S.L. Savidge, Inc., 13 Wn.2d 28, 38, 123 P.2d 780 (1942) ("'Presumptions,' as happily stated by a scholarly counselor, ore tenus, in another case, 'may be looked on as the bats of the law, flitting in the twilight, but disappearing in the sunshine of actual facts.'" (emphasis omitted) (internal quotation marks omitted) (quoting Beeman v. Puget Sound Traction Light Power Co., 79 Wash. 137, 139, 139 P. 1087 (1914))). Moreover, we agree with the court's finding and would make the same finding. Unlike in Boeing, the future of the orchard was not in dispute at the time these items were annexed.
The evidence supports the court's findings that the Weinheimers intended to annex this equipment to the orchard for use consistent with the orchard. Boeing, 85 Wn.2d at 667. The findings support the conclusion that these items were fixtures. Finally, the court's conclusions support its permanent injunction. Attorney Fees Based on Intransigence
Mr. Weinheimer next challenges the attorney fees awarded to Ms. Mikkelsen in the mortgage foreclosure and the fraudulent conveyance claims. He contends neither court action allows for attorney fees. He also argues that the record does not support the trial court's finding of intransigence as the basis for attorney fees.
Fees awarded on the basis of one party's intransigence are an equitable remedy in dissolution actions that may be ordered without regard to the financial status of the parties. In re Marriage of Mattson, 95 Wn. App. 592, 604, 976 P.2d 157 (1999). Intransigence includes delay tactics, obstruction, and any other actions that make proceedings unduly difficult and costly. In re Marriage of Bobbitt, 135 Wn. App. 8, 30, 144 P.3d 306 (2006); In re Marriage of Foley, 84 Wn. App. 839, 846, 930 P.2d 929 (1997). The question here is whether the record supports the judge's conclusion that Mr. Weinheimer's intransigence caused Ms. Mikkelsen's attorney fees and costs.
The trial court awarded Ms. Mikkelsen reasonable attorney fees in the following actions, based on Mr. Weinheimer's conduct: in a July 2003 order (for all attorney fees incurred subsequent to the decree of dissolution up to and including July 8, 2003); in the November 2003 summary judgment of foreclosure; in an August 2005 order on a motion for attorney fees (for additional attorney fees incurred in the mortgage foreclosure and related to the fraudulent transaction actions); and in the November 2006 judgment on the fraudulent transaction claims.
Mr. Weinheimer asserts that attorney fees are not awardable under the mortgage foreclosure statute (RCW 61.12.060) or under the Uniform Fraudulent Transfer Act (RCW 19.40.071). He is right. But the basis of the attorney fees awards here was not these statutory causes of action. It was his steadfast refusal to follow the court's judgment and subsequent orders.
A trial court must provide sufficient findings of fact and conclusions of law for our review of an attorney fees award. Bobbitt, 135 Wn. App. at 30. The order entered on August 12, 2005, and the findings and conclusions entered on November 17, 2006, easily support the attorney fees awarded here:
1. The record should be as clear as can possibly be stated that Mr. Weinheimer was intransigent in his actions after the decree was entered in the dissolution of marriage case by refusing to comply with the order to pay the equalizing lien in the amount of $360,000 to Kim Mikkelsen, making it necessary for her to engage in a series of collection efforts to collect the funds owing her.
2. The court finds that if there had been good faith by Mr. Weinheimer these collection efforts by Kim Mikkelsen would not have been necessary. The necessary collection efforts have been directly related to and material to the enforcement of the divorce decree and have been the direct result of the intransigence of Mr. Weinheimer.
3. On November 14, 2003 this court entered a summary judgment of foreclosure of the mortgage in favor of Kim Mikkelsen and, as part of that summary judgment, also ordered a judgment for $5,000 for attorney fees as an interim award and based on the intransigence of Eric Weinheimer. This previous interim award . . . was not intended to be the total award of fees up to that point in the case.
4. In addition to the causes of action relating to the mortgage foreclosure and activities relating to that cause of action, plaintiff has also brought causes of action relating to a fraudulent transfer of $610,000 to Mr. Weinheimer's sister in Colorado and a further claim that the lease for the orchard between Mr. Weinheimer and his other sister was a sham transaction entered into for the sole purpose of preventing Kim Mikkelsen from collecting on the judgment awarded to her in the dissolution of marriage action as well as related judgments in both cases. These remaining issues in this litigation are set for trial. . . . These two additional causes of action were made necessary by the intransigence of Mr. Weinheimer and pursuit of these additional causes of action were, and are, necessary to enable Kim Mikkelsen to collect on these judgments.
CP1 at 744-45 (August 12, 2005 order).
The November 2006 findings and conclusions also describe the actions taken by Ms. Mikkelsen to seek funds for payment of judgments and attorney fees. Ultimately, the trial court concluded that "Eric Weinheimer's entire purpose was to vex, annoy, hinder, delay and in any manner prevent his former wife from realizing any money from the judgment she was awarded in the divorce decree. His intransigence throughout this case was at the extreme end of the meaning of that word." CP1 at 21.
The record supports the trial court's factual statements. They support its conclusion that Mr. Weinheimer knowingly and intentionally delayed and hindered Ms. Mikkelsen's recovery of any judgment. And the conclusions support the court's decision to award attorney fees. Personal Jurisdiction
Ms. Schmidt contends the trial court erred in denying her motion to dismiss for lack of personal jurisdiction. She asserts that she is a resident of Colorado without the necessary contacts in Washington to justify jurisdiction over her. No one disputes the facts underlying the court's exercise of personal jurisdiction and so the only question before us is one of law: did the court properly exercise personal jurisdiction over her? Colby v. Yakima County, 133 Wn. App. 386, 389, 136 P.3d 131 (2006); CTVC of Haw. Co. v. Shinawatra, 82 Wn. App. 699, 707-08, 919 P.2d 1243, 932 P.2d 664 (1996).
The court's exercise of personal jurisdiction must satisfy Washington's version of the long-arm statute — RCW 4.28.185 — and satisfy constitutionally mandated requirements of due process of law. In re Marriage of Yocum, 73 Wn. App. 699, 702, 870 P.2d 1033 (1994). Anyone who in person or through an agent commits a tortious act within the state submits thereby to the jurisdiction of Washington courts as to any claim arising from that tortious act. RCW 4.28.185(1)(b).
Due process for the exercise of personal jurisdiction under the long-arm statute requires that (1) the nonresident must purposefully do some act in Washington, (2) the cause of action must arise from or be connected with that act, and (3) the assumption of jurisdiction must not offend traditional notions of fair play and substantial justice. Yocum, 73 Wn. App. at 703 (quoting Tyee Constr. Co. v. Dulien Steel Prods., Inc., 62 Wn.2d 106, 115-16, 381 P.2d 245 (1963)). To establish personal jurisdiction, the plaintiff need only present prima facie evidence that the defendant committed a tort in Washington. Id.
Here, Ms. Mikkelsen asserted Ms. Schmidt's assistance in the fraudulent transfer as the jurisdictional hook. A fraudulent conveyance is "a transaction by means of which the owner of property has sought to place the property beyond the reach of his or her creditors, or which operated to the prejudice of the creditor's legal rights." Freitag v. McGhie, 133 Wn.2d 816, 821-22, 947 P.2d 1186 (1997); see RCW 19.40.041 (fraudulent transfers as to present and future creditors). Ms. Schmidt met frequently with Mr. Weinheimer in May and June 2002, just before he transferred his cash assets from Washington to bank accounts in Montana under her name. The court concluded that this transfer and Ms. Schmidt's eventual transfer of the funds to her Colorado accounts were fraudulent transfers intended to delay and hinder Ms. Mikkelsen's collection efforts.
Ms. Schmidt contends, nonetheless, that she committed no tortious act in Washington. She asserts her only action was out of state, when she transferred the funds from the Montana accounts to her Colorado accounts. By that time, she argues, any fraudulent transfer had already occurred and nothing she did made the funds any more or less available in Washington.
But the trial court based its finding of a tortious act on Ms. Schmidt's accomplice liability. A person who knowingly assists someone in committing a tort or in violating a fiduciary or trust obligation is liable for the loss incurred. LaHue v. Keystone Inv. Co., 6 Wn. App. 765, 783, 496 P.2d 343 (1972). The trial court found that Ms. Schmidt knew of Mr. Weinheimer's plan to hinder Ms. Mikkelsen's collection efforts and that she acquiesced or agreed to participate in that plan. Ms. Schmidt then purposefully assisted Mr. Weinheimer in making a fraudulent transfer of funds from the state. RCW 19.40.041; Yocum, 73 Wn. App. at 703. Ms. Mikkelsen's suit against Ms. Schmidt arose from that fraudulent transfer. That is sufficient to confer long-arm jurisdiction.
The constitutional propriety of the court's assertion of jurisdiction turns on whether its assertion, under these circumstances, offends traditional notions of fair play or justice. Yocum, 73 Wn. App. at 703. We consider the quality, nature, and extent of Ms. Schmidt's activities in Washington; the relative convenience to the parties in maintaining the action here; the benefits and protections of Washington law; and the basic equities of the situation. Grange Ins. Ass'n v. State, 110 Wn.2d 752, 758, 757 P.2d 933 (1988).
Here, Ms. Schmidt met frequently with Mr. Weinheimer in Washington during the dissolution proceedings and in the months that led up to his fraudulent transfer. She testified for him at the dissolution trial and actively assisted him in effecting the transfer of his assets out of state. The dissolution, the equalization lien, and the collection efforts took place in Washington. Washington was then an appropriate forum for Ms. Mikkelsen's suit to recover losses occasioned by the fraudulent transfer. Id.
The trial court's assertion of personal jurisdiction over Ms. Schmidt complies with the long-arm statute and satisfies traditional notions of fair play and substantial justice. Attorney Fees
Both Ms. Schmidt and Ms. Mikkelsen request reasonable attorney fees on appeal. Ms. Schmidt does not prevail and, of course, is not entitled to attorney fees. Scott Fetzer Co. v. Weeks, 114 Wn.2d 109, 124, 786 P.2d 265 (1990). Ms. Mikkelsen is entitled to attorney fees on appeal based on the same intransigency that supported the trial court's award of attorney fees, provided Ms. Mikkelsen complies with RAP 18.1(d). Mattson, 95 Wn. App. at 605.
We affirm the judgments of the trial court and we award attorney fees and costs on appeal.
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.
KULIK, A.C.J. and KORSMO, J., concur.