Estate Of Michael Petelle. Gloria Petelle v. Michelle Ersfeld Petelle , 440 P.3d 1026 ( 2019 )

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
In the Matter of the Estate of: )
)
MICHAEL A. PETELLE, ) No. 77556-1-1
)
Deceased. ) DIVISION ONE
)
GLORIA PETELLE, )
)
Appellant, )
)
v. ) PUBLISHED OPINION
)
MICHELLE ERSFELD PETELLE, ) FILED: May 6, 2019
)
Respondent. )
)
SMITH, J. —After a six-year marriage, Michael PeteIle filed a petition to
dissolve his marriage to Michelle Ersfeld PeteIle.1 The parties executed a
Separation Contract and CR2A Agreement(Separation Contract) that divided
their assets into separate property and was a "final settlement of all their marital
and property rights and obligations." Michael died intestate with no children
before a dissolution decree was entered. Gloria PeteIle, Michael's mother and
heir, appeals the trial court's denial of her motion to terminate Michelle's right to
intestate succession. We hold that the right to intestate succession is a marital
1 Because all the parties have the same last name, we refer to each
person by his or her first name.
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right that, although derived from statute, arises because of a person's marital
status. By agreeing to a final settlement of all marital rights, Michelle waived that
right by signing the Separation Contract. Therefore, we reverse and remand with
instructions for the trial court to grant Gloria's motion to terminate Michelle's right
to intestate succession. We also deny Michelle's request for attorney fees on
appeal and at the trial court.
FACTS
Michael and Michelle married on May 20, 2011. On January 27, 2017,
Michael filed a petition for dissolution of their marriage. On February 14, 2017,
Michael and Michelle executed the Separation Contract that divided their
property and debts. Michael died on May 1, 2017, before a final decree of
dissolution was entered. He did not have a will, and he had no children.
Michelle submitted a petition for letters of administration, appointment of
an administrator, an order of solvency, and nonintervention powers on May 10,
2017. Her petition did not disclose the existence of the dissolution action or the
Separation Contract. Furthermore, she did not give notice to any of Michael's
heirs of her intent to petition for nonintervention powers, as required by
RCW 11.68.041. Gloria contested Michelle's nonintervention powers. The trial
court revoked Michelle's nonintervention powers and required her to post a
$100,000 bond but allowed Michelle to continue as Michael's personal
representative. It also awarded attorney fees to Gloria.
Gloria then petitioned the court on September 27, 2017, for an order
terminating Michelle's right to intestate succession. The trial court denied
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Gloria's motion but reserved ruling on Michelle's motion for attorney fees. Gloria
appeals.
RIGHT TO INHERIT AS A "SURVIVING SPOUSE"
Gloria argues that Michelle and Michael's marriage was defunct and,
therefore, Michelle is not entitled to inherit as a "surviving spouse" because her
marriage to Michael was "terminated" under RCW 11.02.005(17). We disagree.
The meaning of a statute is a question of law that we review de novo.
Durant v. State Farm Mut. Auto. Ins. Co., 191 Wn.2d 1, 8, 419 P.3d 400 (2018).
Our fundamental objective in determining what a statute means is to ascertain
and carry out the legislature's intent. Durant, 191 Wn.2d at 8. "If the statute's
meaning is plain on its face, then courts must give effect to its plain meaning as
an expression of what the legislature intended." Durant, 191 Wn.2d at 8. The
court may use a dictionary to discern the plain meaning of an undefined statutory
term. Nissen v. Pierce County, 183 Wn.2d 863, 881, 357 P.3d 45 (2015). If,
after consulting a dictionary, the statute is susceptible to more than one
reasonable meaning, the statute is ambiguous and it is appropriate to use other
statutory construction aids and examine the legislative history. Wrigley v. State,
5 Wn. App. 2d 909, 924-25, 428 P.3d 1279 (2018). "The court has frequently
looked to final bill reports as part of an inquiry into legislative history." State v.
Bash, 130 Wn.2d 594, 601, 925 P.2d 978 (1996).
RCW 11.04.015(1)(c) states that a "surviving spouse" shall receive
"[t]here-quarters of the net separate estate if there is no surviving issue, but the
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intestate is survived by one or more of his or her parents." RCW 11.02.005(17)
describes when an individual does not qualify as a "surviving spouse":
"Surviving spouse" or "surviving domestic partner" does not include
an individual whose marriage to or state registered domestic
partnership with the decedent has been terminated, dissolved, or
invalidated . . . . A decree of separation that does not terminate the
status of spouses or domestic partners is not a dissolution or
invalidation for purposes of this subsection.
(Emphasis added.) "Terminated" is not defined in the statute, but the dictionary
defines "terminate" as "to bring to an ending or cessation in time, sequence, or
continuity: CLOSE. . . to form the ending or conclusion of. . . to end formally and
definitely (as a pact, agreement, contract)." WEBSTER'S THIRD NEW
INTERNATIONAL DICTIONARY 2359 (2002). Using this definition of "terminated," the
term is susceptible to two or more meanings because it is not clear what action is
required to "terminate" a marriage or domestic partnership. Therefore, it is
necessary to consult the legislative history of the statute to ascertain the
legislature's intent.
RCW 11.02.005(17) was revised in 2008 as part of a broader bill
expanding domestic rights and responsibilities of all couples recognized as
domestic partners under Washington's State Registered Domestic Partnerships
Act, chapter 26.60 RCW. H.B. 3104, 60th Leg., Reg. Sess.(Wash. 2008). The
statute's references to domestic partners and domestic partnerships and the
word "terminated" were added as part of this revision. Based on the final bill
report, "terminated" refers to a process for ending a domestic partnership with the
Secretary of State. See FINAL B. REP. ON SECOND SUBSTITUTE H.B. 3104, 60th
Leg., Reg. Sess.(Wash. 2008). Contrary to Gloria's contention, the legislature
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did not add "terminated" to describe a marriage that is defunct. Because
Michelle was not in a domestic partnership with Michael that was terminated by
the Secretary of State, she is a surviving spouse under the statute and is entitled
to inherit 75 percent of his separate property, absent a waiver of that right.
WAIVER OF MARITAL RIGHT TO INTESTATE SUCCESSION
Gloria next argues that Michelle waived her right to inherit Michael's
property as a "surviving spouse" by entering into the Separation Contract. We
agree.
"When the parties to a separation agreement dispute its meaning, the
court must ascertain and effectuate their intent at the time they formed the
agreement." Boisen v. Burgess, 87 Wn. App. 912, 920, 943 P.2d 682 (1997).
"The intent of the parties is determined by examining their objective
manifestations, including both the written agreement and the context within which
it was executed." Boisen, 87 Wn. App. at 920. "If the agreement has only one
reasonable meaning when viewed in context, that meaning necessarily reflects
the parties' intent." Boisen, 87 Wn. App. at 920. If the agreement has more than
one reasonable meaning, a question of fact is presented and this court reviews
the trial court's determination for substantial evidence. Boisen, 87 Wn. App. at
920-21. But where there is no reliance on extrinsic evidence, interpretation of a
contract is a question of law we review de novo. State v. R.J. Reynolds Tobacco
151 Wn. App. 775, 783, 211 P.3d 448 (2009). "We attempt to determine
the parties' intent by focusing on the objective manifestations of the agreement,
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rather than on the unexpressed subjective intent of the parties." Hearst
Commc'ns, Inc. v. Seattle Times Co., 154 Wn.2d 493, 503, 115 P.3d 262(2005).
"'[W]aiver is the intentional and voluntary relinquishment of a known right,
or such conduct as warrants an inference of the relinquishment of such right." In
re Estate of Lindsay, 91 Wn. App. 944, 950, 957 P.2d 818(1998)(alteration in
original)(quoting Peste v. Peste, 1 Wn. App. 19, 24, 459 P.2d 70 (1969)). It can
be an express agreement or be inferred from the circumstances. Lindsay, 91
Wn. App. at 950-51. Waiver is "'a voluntary act which implies a choice, by the
party, to dispense with something of value or to forego [sic] some advantage."
Lindsay, 91 Wn. App. at 951 (quoting Peste, 1 Wn. App. at 24).
Under Washington law, a surviving spouse has a right to inherit from his or
her deceased spouse's estate. RCW 11.04.015(1). This statutory right to
intestate succession turns on a person's marital status and is therefore a marital
right. See 19 SCOTT J. HORENSTEIN, WASHINGTON PRACTICE: FAMILY & COMMUNITY
PROPERTY LAW § 5:3, at 125 (2d ed. 2015)("Marital rights. . . include. . .
inheritance rights.").
Here, the Separation Contract states that "the parties hereby stipulate and
agree to make a complete and final settlement of all their marital and property
rights and obligations on the following terms and conditions." (Emphasis added.)
This language is, arguably, sufficient to constitute waiver of all marital and
property rights flowing from the marital relationship, including the right to intestate
succession.
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While Michelle concedes that a party can waive his or her right to intestate
succession, she argues that such a waiver did not occur here. She contends that
in order to constitute a waiver of her right to intestate succession, the Separation
Contract must clearly state that she waived that specific right and that a general
waiver of all marital rights is insufficient. Even assuming her argument has merit,
we hold that additional language in the Separation Contract supports a holding
that Michelle impliedly waived her right to intestate succession.
Washington courts have determined that a spouse's right to a homestead,
another marital inheritance right, can be impliedly waived in a settlement
agreement of marital and property rights in two previous cases: In re Estate of
Brown, 28 Wn.2d 436,439, 183 P.2d 768 (1947), and Lindsay. Following the
analysis in both of these cases, Michelle impliedly waived her right to intestate
succession by entering into the Separation Contract.
In Brown, the Supreme Court considered whether Florence Turner was
entitled to an award of property in lieu of homestead from Louis Brown's estate.
At the time of Brown's death, the parties were separated, their divorce was
pending, and Brown had executed a new will that omitted Turner. Brown, 28
Wn.2d at 437, 439. The parties also entered into a settlement agreement that
stated:
"(4). In the event of the granting of a divorce in the above
entitled action, this property settlement shall be a full and complete
settlement of all of the property rights of the parties hereto, and the
property received by the first party hereunder shall thereupon
become and/or remain in his separate property, free and clear of all
claims whatsoever on the part of the second party, and the property
received by the party of the second part shall thereupon become
her separate property, free and clear of any claims whatsoever on
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the part of the first party. It is hereby agreed by the parties hereto
that this property settlement shall be final and conclusive between
the parties hereto, regardless of whether or not either party hereto
may die before the Interlocutory Decree of Divorce shall become
final. . . .
It
"This agreement shall be binding on each of the parties
hereto, their heirs and assigns forever."
Brown, 28 Wn.2d at 438(emphasis added). The Supreme Court held that Turner
waived all rights to a homestead by signing the agreement. Brown, 28 Wn.2d at
440. It determined that if the parties intended the settlement agreement to be
effective even if one of them died, "then the property secured by each became
and remained separate property, free and clear of all claims—including right of
homestead—on the part of the other party." Brown, 28 Wn.2d at 440(emphasis
added). Considering the language of the agreement and the circumstances
surrounding its execution, the court held that it was "clear" that Turner and Brown
contemplated the possibility of death and "meant to waive any rights which might
accrue upon death, one of which rights would be the homestead right." Brown,
28 Wn.2d at 440(emphasis added). This was clear because the language of the
agreement indicates that "the property settlement shall be final and conclusive
between the parties, regardless of whether either party died prior to the time the
interlocutory decree of divorce became final." Brown, 28 Wn.2d at 440. That,
combined with the release of claims on the other's separate property, and the
recitation that the agreement was binding on the parties, heirs, and assigns,
clearly evidenced "that the division of the property should stand and that each
should dispose of that separate property as if either were unmarried." Brown, 28
Wn.2d at 440.
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Here, similar to the agreement in Brown, the Separation Contract also
states that it is "a complete and final settlement of all [of Michelle and Michael's]
marital and property rights and obligations." Furthermore, it is effective even
upon the death of either party. Therefore, as in Brown, the Separation Contract
evidences Michael and Michelle's intent that "the property secured by each
became and remained separate property, free and clear of all claims. . . on the
part of the other party," including any right to intestate succession. Brown, 28
Wn.2d at 440(emphasis added).
More recently, in Lindsay, Division III of this court also concluded that a
separation agreement constituted an implied waiver of a spouse's right to a
homestead. In that case, Murray and Cathy Lindsay signed a separation
agreement dividing their real and personal property on October 1, 1991, after an
almost eight-year marriage. Lindsay, 91 Wn. App. at 947. Murray then executed
a new will leaving nothing to Cathy. Lindsay, 91 Wn. App. at 947. He died
unexpectedly three years later, and Cathy petitioned the court for an award in
lieu of homestead. Lindsay, 91 Wn. App. at 947.
The Court of Appeals held that the intent of the separation agreement was
undisputed. Lindsay, 91 Wn. App. at 951. The agreement stated that "'neither
has a claim or interest in anything acquired after the date of October 1, 1991 or
anytime in the future," and it required that if the parties later reconciled, any
changes to the agreement had to be in a writing and signed by both parties.
Lindsay, 91 Wn. App. at 951. The court held that as of October 1, 1991, Cathy
and Murray were legally separated and their property divided, effective
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immediately. Lindsay, 91 Wn. App. at 951. It explained that "[t]he agreement
clearly reflects an intent to give up those rights which would normally follow legal
spouses" and "showed an intent to prevent, waive, and abandon what a surviving
spouse could normally take." Lindsay, 91 Wn. App. at 951-52. Under the
agreement, Cathy "effectively renounced the marriage and waived the statutory
homestead allowance." Lindsay, 91 Wn. App. at 952.
The court rejected Cathy's argument that because the separation
agreement did not specifically mention the homestead right, she was entitled to a
homestead allowance. Lindsay, 91 Wn. App. at 951. It held that the homestead
right could be waived by implication and the real question was whether the
parties' actions evidenced a decision to renounce the community with no
intention of resuming the marital relationship. Lindsay, 91 Wn. App. at 951.
Because the separation agreement divided all property and waived all claims to
the others' property and was never rescinded, revoked, or altered, that test was
met. Lindsay, 91 Wn. App. at 952.
The same analysis applies in this case. Michael and Michelle's
Separation Contract states that lap property which shall hereafter come to either
party shall be his or her separate property and neither party shall hereafter have
any claim thereto." This is similar to the separation agreement in Lindsay, which
the court held "showed an intent to prevent, waive, and abandon what a surviving
spouse could normally take." Lindsay, 91 Wn. App. at 952. As such, Michelle
waived her marital right to intestate succession by entering into the Separation
Contract.
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Michelle argues that Brown and Lindsay are distinguishable because
those cases dealt with the homestead right applicable to disinherited spouses,
not the right to intestate succession. Although it is true that Brown and Lindsay
do not address the rights of a surviving spouse to intestate succession, the
analysis is still instructive. Both cases analyzed whether a separation contract
that is a final settlement of a married couple's property and rights, effective even
upon death, evidences an intent to waive the statutory marital rights of a
surviving spouse. Michelle's right to intestate succession, like the homestead
right, is a statutory marital right due to a surviving spouse. For that reason,
Brown and Lindsay are persuasive.
Michelle also argues that the parties' subsequent actions in Brown and
Lindsay were vital to the courts' conclusions that the disinherited spouse
intended to waive the homestead right. Specifically, she highlights the fact that
the spouses in those cases revoked their previous wills that named one another
as beneficiaries and executed new wills that did not provide for any inheritance.
By contrast, Michelle argues that after she and Michael signed the Separation
Contract, they did not take any actions, such as executing a new will, that
showed an intent to waive the right to intestate succession. But, the courts in
Brown and Lindsay did not rely on the parties' subsequent actions. In each of
those cases, the court reached its conclusion based on that the language of the
separation agreements alone. Brown, 28 Wn.2d at 440 ("This conclusion [that
the parties intended to waive the homestead right] is inescapable under the
language that the agreement was to be binding on each of the parties, their heirs
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and assigns forever."); Lindsay, 91 Wn. App. at 951 ("The agreement clearly
reflects an intent to give up those rights which would normally follow legal
spouses.")(emphasis added). The parties' subsequent actions, while further
supporting their intent to waive their homestead rights, were not relied on to find
waiver. Furthermore, in both Brown and Lindsay, a new will was necessary
because the settlement agreement did not automatically disinherit the estranged
spouses from one another's existing wills and the parties had to update their wills
to reflect that intent. Here, Michael did not have a will and there is no evidence in
the record that Michelle had one either, so there was nothing that needed
modification. For these reasons, Michelle's attempt to distinguish Brown and
Lindsay is not persuasive.
Finally, Michelle argues that even if she waived her right to intestate
succession, remand is necessary to determine whether or not she and Michael
intended to reconcile. She cites evidence in the record that Michael contacted
his attorney on April 2, 2017, to ask that the dissolution be delayed, a no-contact
order be removed, and a house in Leavenworth no longer be included in the
Separation Contract. But even if this were evidence that Michael and Michelle
intended to reconcile, it does not change the result. The Separation Contract
states that it may be "terminated and modified only by a written document so
reflecting, signed by both parties." (Emphasis added.) Michael's email to his
attorney was not a modification or termination that was signed by both parties.
Furthermore, any extrinsic evidence of Michael's intent to reconcile with Michelle
after the execution of the Separation Contract is not needed where the intent of
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the parties at the time of execution is clear, as is the case here. Berg v.
Hudesman, 115 Wn.2d 657, 667, 801 P.2d 222(1990)("[E]xtrinsic evidence is
admissible as to the entire circumstances under which the contract was made, as
an aid in ascertaining the parties' intent."). For these reasons, we decline
Michelle's request to remand for further fact-finding.
ATTORNEY FEES
Michelle asks this court to award her attorney fees and costs on appeal
and for the proceedings at the trial court under RCW 11.96A.150(1) and
RAP 18.1(a). We deny her request.
Attorney fees may be awarded only when authorized by a contract, a
statute, or a recognized ground of equity. Labriola v. Pollard Grp., Inc., 152
Wn.2d 828, 839, 100 P.3d 791 (2004). RCW 11.96A.150(1) allows a court to
award costs and reasonable attorney fees to any party in trust and estate
disputes. It states, "[i]n exercising its discretion under this section, the court may
consider any and all factors that it deems to be relevant and appropriate, which
factors may but need not include whether the litigation benefits the estate or trust
involved." RCW 11.96A.150(1).
Here, Michelle requested attorney fees in the trial court, but the trial court
reserved its decision on fees. Because Michelle is not the prevailing party on the
issue of waiver and her litigation of that issue does not benefit the estate, we
decline to award her fees at trial or on appeal.
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We reverse and remand to the trial court to grant Gloria's motion
terminating Michelle's marital right to intestate succession.
WE CONCUR:
omo\,9-
14