Opinion
66725-4-I
09-24-2012
SPARK NETWORKS, PLC f/k/a MATCHNET, PLC, a public limited liability company organized under the laws of England and Wales, Respondent, v. WILL KNEDLIK, individually and as Sole Trustee for Caleb Knedlik Education Trust, CALEB KNEDLIK EDUCATIONAL TRUST, a Washington trust, and DOES 1 through 50, Judgment Debtors, and ANNA GIOVANNINI, a single woman, Appellant.
UNPUBLISHED OPINION
Dwyer, J.
Anna Giovannini claims ownership of real property used to satisfy a judgment against her son, Will Knedlik. The superior court assumed jurisdiction over Giovannini and entered summary judgment in favor of Spark Networks, PLC, Knedlik's judgment creditor, finding that Giovannini possessed no valid interest in the property, that she failed to support a claim of adverse possession, and that she was judicially estopped from making any further claims of ownership or interest. We affirm the order of summary judgment in its entirety.
Giovannini also assigns error to the superior court's failure to award partial summary judgment to her "to terminate all claims by Spark in the real property located in Bellevue, Washington." Giovannini did not move for summary judgment nor at any point request the superior court enter summary judgment in her favor. Where the trial court had no opportunity to address the issue, we decline to consider it. RAP 2.5(a).
I
This is now the third appeal in this action. We summarize briefly the procedural history leading to our earlier opinions in Spark Networks, PLC v. Knedlik, noted at 149 Wn.App. 1024, review denied, 167 Wn.2d 1003 (2009) (Spark I), and Spark Networks, PLC v. Knedlik, noted at 155 Wn.App. 1024, review denied, 169 Wn.2d 1019 (2010) (Spark II).
1. The Rose Point Lane Property (Spark I and Spark II)
In 2002, Spark Networks, PLC, obtained a $29,000,000 judgment in California against Will Knedlik. In 2007, Spark filed in King County Superior Court to satisfy the judgment by executing against Knedlik's assets in Washington. Spark subsequently obtained a writ of execution on Knedlik's personal residence in Kirkland, Washington (the "Rose Point Lane property") and moved for an order directing a sheriff's sale. Knedlik opposed the sale and filed an affidavit of ownership, signed by his mother Anna Giovannini, who claimed that she acquired the Rose Point Lane property in 1995 when Knedlik pledged it as security for loans from Giovannini. Giovannini moved for a probable validity hearing under RCW 6.19.030(2) to establish the validity of her claim. The superior court concluded that Giovannini failed to show any probable validity of ownership and ordered the sheriff's sale to proceed. The sale proceeds were applied to satisfy the default judgment, which by that time had grown with interest to more than $46,000,000. The superior court subsequently confirmed the sale over Knedlik's and Giovannini's objections and denied their motion for reconsideration.
Giovannini and Knedlik appealed, claiming that RCW 6.19 afforded Giovannini a trial on her ownership claim regardless of whether she established probable validity. We affirmed, concluding that that Giovannini's assertion of a triable ownership issue was frivolous and the superior court did not commit any reversible error in rejecting Giovannini's claim or confirming the sheriff's sale. See Spark I, supra.
In her opposition to the sheriff's sale of the Rose Point Lane property, Giovannini also claimed that she had property liens that were superior to Spark's judgment lien, based on four promissory notes that Knedlik executed between 1990 and 1994 and a 1994 judgment. However, Giovannini filed a bankruptcy petition in 2007 in which she made no mention of any interest in the property. Spark moved for summary judgment to extinguish any interest claimed by Giovannini in the property. The superior court granted the motion, concluding that all of Giovannini's alleged security interests were invalid and unenforceable, and that because Giovannini had not disclosed them in her 2007 bankruptcy petition, she was judicially estopped from doing so. The superior court denied Giovannini's motion for reconsideration. Knedlik and Giovannini appealed.
We dismissed Knedlik as a party on appeal, and affirmed the superior court's order in its entirety. We concluded that the statute of limitations had long since run on the promissory notes and the judgment, and that judicial estoppel barred Giovannini from making further inconsistent claims regarding a security interest. See Spark II, supra.
2. The Bel-Red Property
In 2010, Spark obtained a writ of execution on a rental property in Bellevue, Washington (the "Bel-Red property") and moved for an order directing a sheriffs sale. The superior court found that Knedlik was granted fee simple title to the Bel-Red property in a dissolution decree in 1990 and had not validly conveyed his interest to anyone since then. The superior court also found that, to the extent the Bel-Red property was an asset of "Blue Rapids Investment Trust III Limited Partnership" ("Blue Rapids"), it still belonged to Knedlik because the partnership was merely Knedlik's legal "alter ego." The sheriffs sale proceeded and was confirmed by the superior court.
Giovannini subsequently filed a separate quiet title action to the Bel-Red property. She asserted that she became the sole partner of Blue Rapids in 1995 and therefore the owner of the Bel-Red property, at which point she placed the property in a revocable trust for her grandchildren. She also argued that, alternatively, even if she was not the legal owner of the property, she had become the legal owner through adverse possession by September 2005. Spark moved for summary judgment seeking to extinguish Giovannini's claims of ownership of and interests in the Bel-Red property. The superior court assumed jurisdiction over Giovannini pursuant to RCW 6.32.270 in order to adjudicate ownership. The superior court granted Spark's motion, concluding that all of Giovannini's alleged claims of ownership or interests were invalid and unenforceable and that, in any event, Giovannini was judicially estopped from claiming any interests in the property and that any liens were equitably subordinated to Spark's interests. The superior court denied Giovannini's motion for reconsideration. Giovannini appeals.
II
1. Standard of Review
When reviewing a grant of summary judgment, an appellate court undertakes the same inquiry as the trial court. Wilson v. Steinbach, 98 Wn.2d 434, 437, 656 P.2d 1030 (1982). We consider the evidence and the reasonable inferences therefrom in the light most favorable to the nonmoving party. Schaaf v. Highfield, 127 Wn.2d 17, 21, 896 P.2d 665 (1995). Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." CR 56(c); White v. State, 131 Wn.2d 1, 9, 929 P.2d 396 (1997). To the extent that Giovannini also challenges the superior court's denial of her motion for reconsideration, we review that decision for an abuse of discretion. Drake v. Smersh, 122 Wn.App. 147, 151, 89 P.3d 726 (2004).
Where a trial court grants summary judgment and then denies a motion for reconsideration, evidence offered in support of the motion for reconsideration is properly part of an appellate court's de novo review. Tanner Elec. Co-op. v. Puget Sound Power & Light Co., 128 Wn.2d 656, 675 n. 6, 911 P.2d 1301 (1996). Giovannini does not designate her pleadings on the motion for reconsideration as part of the record, but we note that no additional evidence was presented.
2. Jurisdiction
Giovannini first claims that the superior court abused its discretion by conferring party status upon her pursuant to RCW 6.32.270 for the purpose of adjudicating the summary judgment motion. But it is clear that the superior court has the authority to do so. The statute provides, in relevant part, that:
In any supplemental proceeding, where it appears to the court that a judgment debtor may have an interest in or title to any real property, and such interest or title is disclaimed by the judgment debtor or disputed by another person . . . the court may, if the person or persons claiming adversely be a party to the proceeding, adjudicate the respective interests of the parties in such real or personal property, and may determine such property to be wholly or in part the property of the judgment debtor. If the person claiming adversely to the judgment debtor be not a party to the proceeding, the court shall by show cause order or otherwise cause such person to be brought in and made a party thereto.RCW 6.32.270.
When a judgment debtor's title to property is disputed, any adverse claimant must be made a party to the proceeding. Junkin v. Anderson, 12 Wn.2d 58, 66, 120 P.2d 548 (1941), opinion supplemented on rehearing, 12 Wn.2d 58, 123 P.2d 759 (1942). Knedlik disclaims ownership of the Bel-Red property. Giovannini claims ownership in a separate action. It was both necessary and appropriate for Giovannini to be brought in as a party.
3. Judicial Estoppel
Giovannini next assigns error to the superior court's application of judicial estoppel to bar her claims of ownership of or interest in the Bel-Red property. We held in Spark II that Giovannini was judicially estopped from claiming to hold interests in property that she did not disclose in her 2007 bankruptcy petition. As such, the superior court's order was governed by law of the case.
The law of the case doctrine refers to the "'binding effect of determinations made by the appellate court on further proceedings in the trial court on remand.'" State v. Harrison, 148 Wn.2d 550, 562, 61 P.3d 1104 (2003) (internal quotation marks omitted) (quoting Lutheran Day Care v. Snohomish County, 119 Wn.2d 91, 113, 829 P.2d 746 (1992)). Once an appellate court has ruled on an issue, the court's decision becomes the "law of the case" and a trial court is bound by the appellate court's determination. State v. Strauss, 119 Wn.2d 401, 412, 832 P.2d 78 (1992). The doctrine is applied in order "'to avoid indefinite relitigation of the same issue, to obtain consistent results in the same litigation, to afford one opportunity for argument and decision of the matter at issue, and to assure the obedience of lower courts to the decisions of appellate courts.'" Harrison, 148 Wn.2d at 562 (quoting 5 Am.Jur.2d Appellate Review § 605 (2d ed.1995)).
In 2007, Giovannini filed a chapter 13 bankruptcy petition, with the assistance of counsel and under penalty of perjury. In the supporting schedules, Giovannini was required to list "all real property in which [she had] any legal, equitable or future interest." Giovannini listed only her own residence and claimed no interest whatsoever in the Bel-Red property. Giovannini was also required to list "all personal property of the debtor of whatever kind, " including "[i]nterests in partnerships or joint ventures, " "[a]ccounts receivable, " or "[c]ontingent and non-contingent interests in . . . a trust." Giovannini disclosed no such interests. Finally, Giovannini was required to disclose "all property owned by another person that the debtor holds or controls." Giovannini made no mention of holding any interest in a revocable trust.
Our decision in Spark II constitutes the law of the case and binds the parties and superior court in any future stage of the proceeding. The court did not abuse its discretion in ordering that Giovannini was judicially estopped from claims of ownership of the Bel-Red property.
4. Adverse Possession
Giovannini finally contends that the superior court erred in rejecting her claim of adverse possession of the Bel-Red property. But the facts presented by Giovannini, even if accepted as truth, are insufficient to establish the "hostility" and "exclusivity" elements of adverse possession. We agree with the superior court that Giovannini's adverse possession claim fails.
A party claiming adverse possession must establish that possession must be: (1) exclusive, (2) actual and uninterrupted, (3) open and notorious and (4) hostile and under a claim of right made in good faith. Chaplin v. Sanders, 100 Wn.2d 853, 857, 676 P.2d 431 (1984). The period throughout which these elements must concurrently exist is ten years. RCW 4.16.020. Because the holder of legal title is presumed to possess the property, the party claiming adverse possession bears the burden of proof on each element. ITT Ravonier, Inc. v. Bell, 112 Wn.2d 754, 757, 774 P.2d 6 (1989).
In her pleadings to the superior court, Giovannini fails to address each of the elements of adverse possession. She claims that, since September 1995, she paid all property taxes on the Bel-Red property and was responsible for maintenance and improvements. The sole evidence Giovannini provides in support of this claim are copies of checks she made out to the King County Treasurer from 1996 to 1998 and 2000 to 2004 and an invoice she signed for septic tank pumping. She also argues that Knedlik "believed" she was the owner of the property because a trustee in Knedlik's bankruptcy proceedings reported she was.
This evidence and Giovannini's conclusory allegations are insufficient to establish a claim of adverse possession. On summary judgment, once the moving party has met its initial burden of showing there are no genuine issues of material fact, the burden shifts to the nonmoving party to set forth specific facts that rebut the moving party's contentions and disclose issues of material fact. Seven Gables Corp. v. MGM/UA Entm't Co., 106 Wn.2d 1, 13, 721 P.2d 1 (1986). The nonmoving party may not rely on speculation or argumentative assertions that unresolved factual issues remain. Seven Gables, 106 Wn.2d at 13.
The superior court correctly determined that Giovannini's evidence did not establish the elements of "exclusivity" or "hostility". Possession must be as exclusive as one would expect of a titled property owner under the circumstances. Crites v. Koch, 49 Wn.App. 171, 174, 741 P.2d 1005 (1987). Giovannini's evidence that she paid some of the property taxes and authorized some plumbing work on one occasion do not establish the hallmarks of ownership. To satisfy the element of hostility, a claimant must prove that she treated the land as her own against the world. Chaplin, 100 Wn.2d at 860-61. Permission, express or implied, from the true owner negates the hostility element. Chaplin, 100 Wn.2d at 861-862. Giovannini's assertions that Knedlik conveyed his interest in the Bel-Red property to her and assisted "in continuing to manage the real estate at issue herein for her, as a rental property" defeats the element of hostility.
Although Giovannini argues that because adverse possession claims are necessarily fact-specific, they are not well-suited to determination on summary judgment, we conclude no reasonable trier of fact could have found for Giovannini on the evidence presented.
5. Other Issues
Giovannini claims that her ownership of the Bel-Red property was established in a 1998 bankruptcy court order and therefore the superior court was bound by the principles of res judicata and collateral estoppel. Neither res judicata nor collateral estoppel is appropriate here, as both doctrines involve relitigation of issues between the same parties. See, e.g., Bordeaux v. Ingersoll Rand Co., 71 Wn.2d 392, 395-96, 429 P.2d 207 (1967) ("Both doctrines require a large measure of identity as to parties, issues and facts, and in neither can the party urging the two doctrines as a defense be a stranger to the prior proceeding. He must have been a party, a participant, or in privity with either."). Spark was not a party to any of Knedlik's bankruptcy proceedings.
Giovannini also makes vague references to "due process" in her opening brief. But "'naked castings into the constitutional sea are not sufficient to command judicial consideration and discussion.'" In re the Matter of Rosier, 105 Wn.2d 606, 616, 717 P.2d 1353 (1986) (quoting United States v. Phillips, 433 F.2d 1364, 1366 (8th Cir. 1970)). We decline to consider issues unsupported by cogent legal argument or citation to relevant authority.
Because the superior court properly extinguished Giovannini's claims of ownership of or interest in the Bel-Red property, we need not address whether these claims are equitably subordinated to Spark's judgment lien.
Affirmed.