In Re Estate Of Randall J. Langeland. Sharon Drown, App. / X-res. v. Janell Boone, Res. / X-app. ( 2013 )

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2013 OCT 28 AH* 38
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
In the Matter of the Estate of NO. 67255-0-1
RANDALL J. LANGELAND. (Consolidated with
No. 67659-8-1)
SHARON DROWN,
Appellant, DIVISION ONE
v.
PUBLISHED OPINION
JANELL BOONE,
Respondent. FILED: October 28, 2013
Leach, C.J. — This case involves competing claims to the estate of
Randall J. Langeland asserted by his daughter, Janell Boone, and the woman
with whom he lived from 1991 until his death in 2009, Sharon Drown. Drown
appeals several pretrial orders, a posttrial order memorializing an evidentiary
ruling made during trial, and the findings of fact and conclusions of law entered
after trial on her petition for accounting, determination of ownership, fair and
equitable division of assets, and other relief. She alleges that the court
erroneously classified assets acquired during her committed intimate relationship
with Langeland as his separate property and inequitably divided those assets.
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She also challenges the court's determination that the dead man's statute1
prevented her from testifying to conversations with Langeland about the
character of certain property and its decision that the statute governing intestate
succession did not apply by analogy. Finally, Drown asserts that the trial court
should not have awarded attorney fees to Boone because this case involves
novel issues of law.
In a cross appeal, Boone contests the trial court's rejection of her
challenge to Langeland's designation of Drown as the beneficiary of his Fidelity
IRA (individual retirement account) and its denial of her request for attorney fees
on this claim.
We affirm the trial court's decisions about the laws for intestate succession
and the IRA beneficiary designations but do not reach the dead man's statute
challenge. From our examination of the history and nature of the conflicting
presumptions invoked by the parties before the trial court, viewed in the context
of this case, we conclude that the presumption that property acquired during a
committed intimate relationship is jointly owned should prevail over a
presumption of correctness for an estate inventory. Therefore, we reverse the
trial court's division of probate assets and remand to the trial court for further
proceedings consistent with this opinion. To allow the trial court full discretion to
1 RCW 5.60.030.
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make an equitable award following a correct characterization, we also vacate the
fee award to Boone.
FACTS
Randall Langeland and Sharon Drown met and began dating in 1983. In
1991, they began living together. Boone has stipulated that they lived in a
committed intimate relationship. Beginning in 1999 and throughout the rest of his
life, Langeland suffered from numerous undiagnosable and untreatable ailments.
In 2009, he died from complications relating to an autoimmune disorder of
unknown etiology. Langeland did not have a will.
Throughout Langeland's many illnesses, Drown served as his primary
caregiver. She traveled with him and assisted him with his business affairs; she
cared for his personal hygiene needs and administered his medications; she
attended all his medical appointments and was very involved with his treatment.
The probate assets itemized in the personal representative's inventory as
Langeland's property, and now disputed on appeal, include the proceeds from a
software company Langeland founded in 1994, a house that he purchased with
Drown in 1999, and a 36-foot sailboat purchased in 1998. The court, relying on
the presumption of correctness for this inventory, required Drown to prove her
ownership interest. It rejected Drown's claim that the court should presume joint
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ownership of assets acquired while she and Langeland cohabited and applied
the dead man's statute to limit Drown's testimony.
When Drown failed to meet the burden of proving that she owned any
interest in the contested assets, the court awarded nearly all of the assets to
Langeland's only heir, Boone. It found that Drown proved her rights to the
Fidelity IRA, on which she was named as beneficiary, and 24.7 percent
ownership of the couple's Bellingham home, based upon a promissory note
executed by Drown and Langeland. Characterizing Drown's claims as baseless,
the court awarded attorney fees to the estate for defending against Drown's
claims. It denied Boone's request for fees relating to the IRA award. Drown
appeals the award of property and fees to Boone; Boone cross appeals the
award of the IRA to Drown and the court's denial of fees related to that claim.
STANDARD OF REVIEW
Resolution of conflicting presumptions presents a question of law, which
we review de novo. When reviewing challenged findings of fact and conclusions
of law, we determine if substantial evidence supports the findings and if the
findings of fact, in turn, support the conclusions of law.2 Substantial evidence is
2 Douglas v. Visser, 173 Wash. App. 823, 829, 295 P.3d 800 (2013).
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evidence sufficient to persuade a fair-minded, rational person that the finding is
true.3 Unchallenged findings offact become verities on appeal4
ANALYSIS
We first address resolution of the conflicting presumptions invoked by the
parties before the trial court. Drown contends that all property acquired while she
and Langeland lived together is presumed to be owned by both of them because
Boone stipulated that Drown and Langeland lived in a committed intimate
relationship. She further contends that Boone has the burden of proving
otherwise by clear and convincing evidence. Boone contends that the personal
representative's inventory is presumed to be correct and that Drown has the
burden of proving the contrary. Pretrial, the trial court adopted Boone's position.
We disagree.
When parties invoke conflicting presumptions, two viewpoints exist about
how to resolve the conflict.5 Under the first approach conflicting presumptions
cancel each other, while the second requires that the court determine which
3 Recreational Equip., Inc. v. World Wrapps Nw., Inc., 165 Wash. App. 553,
558, 266 P.3d 924 (2011).
4 In re Estate of Freeberq. 130 Wash. App. 202, 205, 122 P.3d 741 (2005).
Drown makes 39 assignments of error, challenging the court's refusal to apply a
community property-like presumption; its characterization of the house, the boat,
and the business as Langeland's separate property; and the conclusions of law
awarding a substantial majority of the property to Boone.
51 Clifford S. Fishman, Jones on Evidence Civil and Criminal § 4:59
(7th ed. 1992).
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presumption should prevail, based upon a variety of factors, which may include
public policy, logic, and an assessment of probabilities.6 Logically, jurisdictions
that adhere to the Thayer "bursting bubble" theory of presumptions7 should follow
the first approach, while jurisdictions giving different weight to different
presumptions8 should follow the second one.9
Washington cases provide little guidance about how to resolve conflicting
presumptions. This lack of clarity exists, at least in part, because Washington
cases apply the Thayer theory to some, but not all, presumptions and provide no
general rule about when it applies.10 Other cases identify presumptions that shift
the burden of proof.11 To further complicate the problem, the quantum of
evidence required to overcome a burden-shifting presumption varies, and
Washington cases do not provide any general guidelines or standards.12 As a
result, "the subject of presumptions is one of impossible difficulty for lawyers, and
trial judges as well."13
6 1 Fishman, §4:59.
7Under the Thayer theory, a presumption places the burden of production
of evidence upon the party against whom it operates but disappears ifthat party
produces contrary evidence. 5 Karl B. Tegland, Washington Practice:
Evidence Law and Practice § 301.14, at 238 (5th ed. 2007).
8 Often called the Morgan theory, under this approach a presumption shifts
the burden of proof as to the presumed fact. 5 Tegland, § 301.15, at 241.
91 Fishman, § 4:59.
10 5 Tegland, §§301.15-301.16.
11 See 5 Tegland, §301.14, for a collection of these cases.
125 Tegland, § 301.15, at 244.
13 5 Tegland, § 301.14, at 238.
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A leading commentator on Washington evidence law suggests that Parker
v. Parker,14 provides "some indication that if a choice is necessary[,] the
'stronger' presumption should be applied"15 and that conflicting presumptions of
equal weight cancel each other.16 We do not find this indication in the Parker
opinion.
In Parker, the assignee of two promissory notes sued the deceased
maker's estate for payment.17 The executrix presented evidence of the
decedent's delivery of cash and bonds in the same amount as the notes to the
original note holder. She relied upon the presumption that money transferred
from one person to another is presumed to be in payment of the obligation
between them.18 The noteholder and assignee presented evidence that these
payments were gifts and sought to offset this presumption with another—that
since the notes remained in their possession, they were presumed to be
unpaid.19 The court did not resolve the conflict between these two presumptions.
Instead, it decided the case using a third presumption not asserted by any
party. The court noted that the decedent had been married a number of years
14 121 Wash. 24, 207 P. 1062 (1922).
15 5 Tegland, § 301.17, at 249.
16 5 Tegland, §301.17, at 250 (citing Prall v. Great N. Rv., 105 Wash. 24,
177 P. 637(1919)).
17 Parker, 121 Wash, at 25.
18 Parker. 121 Wash, at 26.
19 Parker. 121 Wash, at 26-27.
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and had acquired the cash and bonds after his marriage, raising the presumption
that they were community property.20 After observing that "[t]his presumption is
not overcome in any way by any proof on behalf of the appellant," the court noted
that the decedent lacked the required consent of his wife to make a gift of
community property and held that any alleged gift of the cash and bonds was
void.21 The court's opinion does not purport to provide any rule for resolving
conflicting presumptions or identify any of the three described presumptions as
being stronger than the others.
A number of states require that the trial court assess the comparative
weight of conflicting presumptions and apply the stronger one.22 Some states
have adopted this approach through judicial decision,23 and many others have
done so through evidence rule.24 A number of the evidence rules adopt the
approach of Rule 301(b) of the Uniform Rules of Evidence:
(b) Inconsistent Presumptions. If presumptions are
inconsistent, the presumption applies that is founded upon
weightier considerations of policy. If considerations of policy are of
equal weight neither presumption applies.
20 Parker, 121 Wash, at 27.
21 Parker. 121 Wash, at 27-28.
221 Fishman, §4:61.
23 See, e.g.. Schmeizl v. Schmeizl, 184 Md. 584, 594-95, 42 A.2d 106(1945): Palmer v. Palmer, 162 N.Y. 130, 56 N.E. 501 (1900): Young v. State. 111
Tex. Crim. 17, 10 S.W.2d 1008 (1928).
24 See, e.g.. Ark. R. Evid. 301(b); Del. Unif. R. Evid. 301(b); Mont. R.
Evid. 301(c); Or. R. Evid. 310 (O.R.S. §40.130).
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The Federal Rule of Evidence 301 addresses presumptions but does not include
any provision for resolving inconsistent presumptions:
In a civil case, unless a federal statute or these rules provide
otherwise, the party against whom a presumption is directed has
the burden of producing evidence to rebut the presumption. But
this rule does not shift the burden of persuasion, which remains on
the party who had it originally.
Washington has not adopted an evidence rule addressing presumptions.
Washington cases have adopted individual presumptions for different
reasons with policies of varying strength behind them. Some shift the burden of
production, while others shift the burden of persuasion. Some are intertwined
with pertinent substantive law. As a result, we are skeptical of the wisdom of
attempting to provide a single rule to resolve all presumption conflicts. Instead,
from an examination of the history and nature of the two presumptions before us,
viewed in the context of this case, we conclude that the presumption that
property acquired during a committed intimate relationship is jointly owned
should prevail over a presumption of correctness for an estate inventory.
In 1984, the Washington Supreme Court adopted a general rule requiring
a just and equitable division of property after the end of what we now call a
committed intimate relationship.25 In 1995, the court held that "income and
property acquired during a meretricious relationship should be characterized in a
25 In re Marriage of Lindsev. 101 Wash. 2d 299, 304, 678 P.2d 328 (1984).
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similar manner as income and property acquired during marriage. Therefore, all
property acquired during a meretricious relationship is presumed to be owned by
both parties."26 A party may overcome this rebuttable presumption "by
establishing by 'clear and convincing proof that the property is separate, i.e., by
tracing with some degree of particularity the separate source of funds used for
the acquisition."27
In the same case where it recognized this presumption, the court also
established a three-prong analysis for disposing of property when a
meretricious relationship terminates. First, the trial court must
determine whether a meretricious relationship exists. Second, if
such a relationship exists, the trial court evaluates the interest each
party has in the property acquired during the relationship. Third,
the trial court then makes a just and equitable distribution of such
property.[28]
This analysis applies when the relationship ends through the death of one
partner and the deceased partner's heirs have no greater rights than the
decedent would have, if living.29
Thus, a party to a committed intimate relationship enjoys the benefit of a
burden of persuasion-shifting presumption that all income and property acquired
during the relationship are jointly owned and does not lose the benefit of that
26 Connell v. Francisco. 127 Wash. 2d 339, 351, 898 P.2d 831 (1995).
27 Chesterfield v. Nash. 96 Wash. App. 103, 111, 978 P.2d 551 (1999) (citing
Connell. 127 Wn.2d at 350-51), rev'd on other grounds. In re Marriage of
Pennington. 142 Wash. 2d 592, 14 P.3d 764 (2000).
"Tennington. 142 Wn.2d at 602 (citing Connell. 127 Wn.2d at 349).
29 Olver v. Fowler. 161 Wash. 2d 655, 670-71, 168 P.3d 348 (2007).
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presumption through the death of the other partner. This presumption replaced
an earlier presumption that the court abandoned because its constricting dictates
"made the law unpredictable and at times onerous."30
The presumption of an estate inventory's correctness appears to have
been recognized in Washington for the first and only time in In re Estate of
Shaner: "The burden of proof rested with respondent not only because she was
the plaintiff in the separate action which was brought, but also because she
challenges, in the estate proceeding, the inventory, which is presumed to be
correct."31 The Shaner opinion provides no discussion of this presumption and
does not apply it in its analysis. Instead, it analyzes the application of an entirely
different presumption, that of continued ownership.32 Nothing in Shaner
suggests that the presumption of correctness shifts the burden of proof or
survives after the production of contrary evidence. Shaner cites In re Estate of
Hamilton33 as its sole authority for this presumption.34
Hamilton contains no reference to such a presumption. Instead, in an
action where a surviving husband petitioned for an order striking four parcels
from the inventory he filed in his wife's estate on the basis that they were his
30 Lindsev. 101 Wn.2d at 304.
31 41 Wash. 2d 236, 242, 248 P.2d 560 (1952).
32 Shaner. 41 Wn.2d at 242-45.
33182 Wash. 81, 89, 45 P.2d 36 (1935).
^Shaner. 41 Wn.2d at 242.
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separate property erroneously inventoried, the court stated, "The burden rests
upon appellant to prove by a preponderance of the testimony the allegations of
his petition, which allegations are inconsistent with practically all of his prior
actions and statements."35 This unremarkable observation appears to reflect
nothing more than a statement of the general proposition that a party seeking
judicial relief must establish those facts entitling that party to relief.
In contrast to the joint property presumption, the inventory presumption
does not shift the burden of persuasion and does not appear to reflect any
significant particularized policy decision. Generally, a presumption shifting the
burden of persuasion should outweigh one that only shifts the burden of
production because the same factors that justify giving one presumption greater
impact also justify giving it greater weight than a presumption having less
procedural impact.36 Here, giving precedence to the inventory presumption does
not further any policy decision articulated by our Supreme Court, while giving
precedence to the joint property presumption furthers those policies articulated
by the court in In re Marriage of Lindsev.37 Connell v. Francisco.38 and Olver v.
Fowler.39 Finally, in the context of this case, giving precedence to the inventory
35 Hamilton. 182 Wash, at 89.
361 Fishman, §4:62.
37 101 Wash. 2d 299, 678 P.2d 328 (1984).
38 127 Wash. 2d 339, 898 P.2d 831 (1995).
39 161 Wash. 2d 655, 168 P.3d 348 (2007).
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presumption would frustrate the Olver court's statement that a deceased
partner's heirs should have no greater rights than the decedent would have, if
alive. The inventory presumption relieved Boone from an onerous burden of
persuasion that applied to Langeland and that she could not meet.
We hold that the presumption that property acquired during an intimate
committed relationship is jointly owned prevails over the presumption of
correctness for an estate inventory.
We next consider whether the trial court's failure to apply this presumption
prejudiced Drown. Drown and Boone primarily contest ownership of three
probate assets, the proceeds from a software company Langeland founded, a
house that he purchased with Drown, and a 36-foot sailboat. All were acquired
during the Langeland/Drown committed relationship and subject to the joint
property presumption. The court received no evidence tracing any of these three
assets to funds owned by Langeland before his relationship with Drown began or
acquired by Langeland by gift or inheritance afterward. As a matter of law,
Boone failed to overcome the joint property presumption with respect to all three
contested probate assets.
Boone contends that Drown's own testimony establishes the separate
character of the sailboat. Drown testified,
Q. I believe you testified that Mr. Langeland purchased the
Catalina 36 sailboat with his own funds, correct?
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A. Correct.
But Boone's argument ignores the following clarifying testimony from Drown:
Q. Do you know where the funds came to purchase this boat,
came from?
A. Urn, he saved all of his money for this boat.
Q. And was that savings that occurred during the time that you
were in a committed intimate relationship starting in 1991?
A. Yes.
Boone also contends that Drown failed to establish the existence of a
committed intimate relationship. This contention ignores Boone's stipulation filed
pretrial with the trial court:
You and each of you will please take note that for the
purposes of the proceedings herein, Janell Boone hereby stipulates
that decedent and Sharon Drown were in an intimate committed
relationship.
Boone provides no explanation why this stipulation does not control this issue.
Even if the trial court mischaracterizes property as community or separate,
this court may uphold a division of property, so long as it is fair and equitable.40
Remand is required only where (1) the trial court's reasoning indicates that its
characterization of the property significantly influenced distribution of property
and (2) it is not clear that had the court properly characterized the property, it
would have divided it in the same way.41 Here, the findings of fact and
conclusions of law show that the trial court's belief that Drown had no equitable
40 In re Marriage of Kraft. 119 Wash. 2d 438, 449, 832 P.2d 871 (1992).
41 In re Marriage of Shannon. 55 Wash. App. 137, 142, 777 P.2d 8 (1989).
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interest in the contested probate assets clearly influenced its decision to award
those assets to Boone. Therefore, we reverse the trial court's division of probate
assets and remand for further proceeding consistent with this opinion. To
provide the trial court with full discretion to make an equitable division, we also
vacate its award of attorney fees to Boone.
Contrary to the assumption contained in Drown's briefing filed with this
court, a determination that the contested probate assets were jointly owned does
not require that the trial court divide them equally between Drown and Boone.
The three-part analysis adopted in Connell requires that the trial court determine
what property is subject to division and make a fair and equitable division based
upon the factors identified in the court's opinion.42
Because of our resolution of the characterization of the contested probate
assets, we need not address Drown's assignments of error to the trial court's
evidentiary rulings or its application of the dead man's statute.
We next address Drown's claim that the trial court should have "applied,
by analogy, Washington intestate statutes," as regards community property to
award her, in equity, Langeland's interest in various assets. We must reject this
claim because we are bound by the Supreme Court's decision, holding:
[U]nder Washington law, a surviving partner in a "meretricious"
relationship does not have the status of a widow with respect to
42Connell. 127 Wn.2d at 349.
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intestate devolution of the deceased partner's personal property.
The division of property following termination of an unmarried
cohabiting relationship is based on equity, contract or trust, and not
on inheritance.[43]
On cross appeal, Boone alleges that the trial court erred by finding that
Drown was entitled to the funds in Langeland's Fidelity IRA. Several months
before his death, Langeland transferred funds from an employer pension plan
into a Fidelity IRA account and named Drown the account beneficiary. Boone
characterizes this transaction as an inter vivos gift and argues that the gift was
invalid because Drown did not prove by clear and convincing evidence that
Langeland made the gift without any undue influence.
Boone's argument depends upon her characterization of the beneficiary
designation as an inter vivos gift:
In order to constitute a gift of personal property, one of the
things necessary is that there must be a delivery, and that delivery
must be such as will divest the donor of the present control and
dominion over the property absolutely and irrevocably, and confer
upon the donee the dominion and control.1441
Designating a life insurance beneficiary is not an inter vivos gift because the
designation is "merely a means of transmitting property at death"45 and the
beneficiary has no rights before the insured's death. Similarly, naming the
beneficiary of an IRA is not an inter vivos gift. As a result, the cases involving
43Pefflev-Warnerv. Bowen. 113 Wash. 2d 243, 253, 778 P.2d 1022 (1989).
44 Decker v. Fowler. 199 Wash. 549, 551, 92 P.2d 254 (1939).
45 Francis v. Francis. 89 Wash. 2d 511, 514, 573 P.2d 369 (1978).
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inter vivos gift relied upon by Boone have no application. Drown did not have the
burden of proving by clear, cogent, and convincing evidence the validity of the
beneficiary designation and the absence of undue influence. The court heard
testimony from Drown about her role in assisting Langeland to create the rollover
IRA; it heard testimony from Boone's expert witness opining that Langeland's
signature on the transfer documents was a forgery; and it heard Drown's denial
of any wrongdoing. The court ultimately found the IRA beneficiary designation
valid. Substantial evidence supports the court's findings on this issue.
Boone, on cross appeal, argues that the court should increase her fee
award to include fees relating to the IRA claim. As discussed above, the court
did not err in awarding the IRA to Drown; therefore, we deny Boone's request for
additional fees.
CONCLUSION
Because the court failed to apply the correct presumption to property
acquired during the Langeland/Drown committed intimate relationship, we
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reverse and remand to the trial court to reconsider the proper distribution of the
jointly acquired assets and the issue of attorney fees. Otherwise, we affirm.
WE CONCUR:
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