Estate Of Larry Capps ( 2013 )

FILED
COUNT OF APPEALS
DIVISI it
IN THE COURT OF APPEALS OF THE
U S
STATA GT ON
STATE OF WASMNGTOd
DIVISION II
4In
-
re the Estate of.
BY
E UTY
No. 42078 3 II
- -
LARRY CAPPS,
Deceased.
UNPUBLISHED OPINION
PENOYAR, J. — After Larry Capps's death, his children from a previous marriage
petitioned the trial court for a declaratory judgment that his home remained separate property and
belonged to them under his will. Despite a lengthy marriage to Linda Capps, the trial court
concluded that the family home remained Mr. Capps's separate property until his death. The
trial court also rejected Mrs. Capps's claim for reimbursement of expenses related to the home
and concluded that the marital community owed rent to Mr: Capps during his lifetime and that
the rental obligation continued for Mrs. Capps during the time she resided in the home following
Mr. Capps's death. Because Mr. Capps purchased the home before his marriage to Mrs. Capps,
the trial court did not err by concluding that it was his separate property. Additionally, the trial
court did not err by denying Mrs. Capps's reimbursement claims because she failed to prove that
community funds were used to improve the home. We affirm.
42078 3 II
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Mr. Capps's estate's personal representative (PR) advised Mr. Capps's children, Larry
and Kimberly, and Mrs. Capps that the North Huson Street home's separate character had been
commingled with the community over the course of 30 years such that it had become a
community asset that Mrs. Capps would inherit under the terms of Mr. Capps's will,which left
his separate property to his children and all community property to Mrs. Capps. The children
filed a declaratory judgment action, asking the trial court to establish the home as their father's
separate property. The trial court ruled on summary judgment that the home was Mr. Capps's
separate property. Following the adverse summary judgment ruling, Mrs. Capps filed a formal
creditor's claim, which the estate rejected.
Eventually, the trial court conducted a full trial on Mrs. Capps's reimbursement claims,
which the trial court rejected for lack of sufficient evidence. The trial court also imposed rent for
the months Mrs. Capps resided in the home after Mr. Capps's death, offset this rent against the
expenditures she made on the home during that same post death period, and awarded attorney
-
fees to the children. This appeal stems from the trial court's rulings relating to the character,
disposition, and settlement of claims involving Mr. Capps's estate.
1 For clarity, we refer to Mr. Capps's children from his first marriage Larry A. Capps and
—
Kimberly Scaleraby their first names. We intend no disrespect.
—
2
While the 2007 probate action was still pending, Mrs. Capps's second attorney filed a separate
action directly against the estate's PR and Mr. Capps's children in 2010, seeking equitable
reimbursement for personal monies she had contributed to the home. The trial court consolidated
Mrs. Capps's new reimbursement claim action with the 2007 probate action; this consolidation
appears to have been the source of much confusion.
In March 2011, the trial court entered an order stating that the trial would focus on Mrs.
Capps's equitable reimbursement claim, which was not a creditor's claim. The trial proceeded in
the probate action with Mrs. Capps pursuing her claim against the estate for reimbursement of
sums she claimed the estate owed her for contributions to the home. When the trial. nded, the
e
trial court dismissed Mrs. Capps's 2010 equitable reimbursement action because. she had not
supported her reimbursement claims with sufficient evidence.
2
42078 3 II
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Contending that the trial court was biased against her, Mrs. Capps argues on appeal that
the trial court erred by ( )
1 granting partial summary judgment to Larry and Kimberly on grounds
that the home was Mr. Capps's separate property; 2)
( denying her motion for reconsideration of
the court's characterization of the home as Mr. Capps's separate property; ( )denying her
3
motion for leave to litigate the separate property issue at trial; 4)
( concluding that, as a surviving
spouse, (a)she must file a creditor's claim against the estate before pursuing a claim for
equitable reimbursement from the estate assets and (b) could not pursue a "direct action"for
she
equitable reimbursement against the estate PR and estate beneficiaries; ( )failing to consider
5
applicable community property presumptions when ruling on her equitable reimbursement claim;
6)imputing rental value to her for the period she had lived in the home during her marriage to
Mr. Capps and using this imputed rental value to offset her equitable reimbursement claim; 7)
(
determining that her trial testimony was not credible; 8)admitting expert testimony about the
(
home's value; and (9)awarding Larry and Kimberly attorney fees and costs for the trial court
proceedings..
Mrs. Capps also challenges several of the trial court's findings of fact and
conclusions of law, and she requests that, if we reverse and remand for a.new trial,we order that
her case be assigned to a different trial judge.
3
Because we affirm the trial court's rulings below and see no indication that the trial court was
prejudiced against Mrs. Capps, we deny her request for remand to a different judge.
3
42078 3 II
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FACTS
I. BACKGROUND
Mr. Capps and his previous wife had purchased a Tacoma residence on North Huson
Street in July 1975. When they divorced a year later, Mr. Capps was awarded the home as his
sole and separate property." Clerk's Papers (CP) at 67. They had two children, Larry and
Kimberly.
In August 1976, Mr. Capps's future wife, Linda Capps, began living with him in the
North Huson Street home. They married in February 1977, after which they comingled their
funds in joint bank accounts. They lived together in the home for 30 years until Mr. Capps's
death in January 2007, at which point all their bank accounts were jointly owned, with Mrs.
Capps designated as the sole surviving joint tenant.
A. Prenuptial Agreement and Quitclaim Deed
On February 22, 1977, Mr. Capps and Mrs. Capps signed a prenuptial agreement, which
provided that (1) person's then -existing separate property would remain his or her separate
each
property after marriage and (2)all property acquired after marriage would be considered
community property. Section four of this prenuptial agreement, however, further explained that
all rents, issues, profits, income, and proceeds of separate property would be characterized as
community property:
Except for gifts and inheritances[,] rents, issues, profits, income or proceeds of
all
property, including separate property owned before the marriage, and property
acquired jointly or as community property, shall be regarded as community
property. The products of the parties' labor and their incomes shall be community
property.
CP at 199 (
emphasis added).
42078 3 II
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According to the prenuptial agreement, at the time of their . arriage, Mrs. Capps owned
m
only personal property. Mr. Capps had (1)over $ 000 in separate bank accounts and an
80,
account receivable and (2) interest in a real estate contract involving the North Huson Street
an
home, valued at $ 000, on which he still owed $ 000. About two months after marrying
50, 15,
Mrs. Capps, on April 21, 1977, Mr. Capps satisfied the $ 000 balance he owed on the North
15,
Huson Street home's real estate contract and received a statutory warranty deed to the home.
Two weeks later, on May 6, Mrs. Capps executed a quitclaim deed, affirming that the
North Huson Street home belonged to Mr. Capps as his "sole and separate property."CP at 64.
The quitclaim deed further provided, " his deed is to confirm that said property is and will
T
remain the separate property of Mr.Capps]." at 64 (emphasis added).
[ CP
B. Mortgage; Marital Expenses
A week after Mrs. Capps executed the quitclaim deed, Mr. Capps borrowed $ 2, 00 from
4 5
a bank, using the home as security. He deposited the loan proceeds into a bank account that he
shared jointly with Mrs. Capps; this money was spent during their marriage for "community
purposes." Report of Proceedings (RP)March 15, 2011) at 118. Title to the home, however,
(
remained solely in Mr. Capps's name.
According to Mrs..Capps, she and Mr. Capps had taken out the $ 500 mortgage with
42,
hopes of fixing up the North Huson Street home for their retirement, and they had invested
significant funds to refurbish the home, converting it from a triplex into a single family home.
4 Mrs. Capps owned no real property. Although not mentioned in the prenuptial agreement, Mrs.
Capps later asserted that she had deposited $ 750 in proceeds from the sale of her previous
22,
separate home into a bank account that she shared with Mr. Capps.
s
The record does not show the source of the funds Mr. Capps used to pay off his real estate
contract. But the $ 0, 00 in his separate bank accounts at the time of his marriage to Mrs. Capps
8 0
would have been more than sufficient to cover this $ 5, 00 balance.
1 0
5
42078 3 II
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But Mrs. Capps did not know whether any of the mortgage loan proceeds had been used for these
purposes. Nor had she retained any records of the cost of refurbishing or repairing the home or
the source of funds used to make such improvements. Nevertheless, according to Mrs. Capps,
for the next 14 years after Mr. Capps obtained this loan, she and Mr. Capps used community
funds to pay the $
350 monthly mortgage until they fully repaid it in 1991.
According to Mrs. Capps, in the late 1980s (1)she and Mr. Capps had been in a car
accident, for which. she had received a $75, 00 personal injury settlement award in 1991,
0
independent of Mr. Capps's 3, settlement award, and (2)she had used a portion of her
$000
separate award to pay off the home mortgage and to pay for other "home improvements." CP at
32. Mrs. Capps did not, however, produce any records showing that she had received such a
settlement award, that she had kept her settlement award separate from the couple's joint bank
accounts, or that her own settlement funds had actually been used to pay off the mortgage or to
pay for any home improvements.
Neither Mrs. Capps nor the marital community paid rent to Mr. Capps's separate estate
during the 30 years that Mr. and Mrs. Capps had lived together in the home during their marriage
February 1977 through January 2007). But they did pay yearly property taxes on the home.
The tax assessor's records showed that,between 1977 and 2006, the total amount of property
taxes paid on the home was $
72.
101, 34. Mrs. Capps had no records of the source of funds used
4
for such payments.
C. Mr. Capps's Will;Mrs. Capps's PostDeath Expenses
-
6
The trial court did not find credible Mrs. Capps's testimony that these funds were her separate
property and that the funds had been spent on Mr. Capps's separate property.
6
42078 3 II
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After Mr. Capps died on January 15, 2007, his will was probated. Mr. Capps's will,
executed 28 years earlier on February 26, 1979, left his separate property to Larry and Kimberly
and left his community property to Mrs. Capps. The North Huson Street home, valued at around
755, 00 a year and a half after Mr. Capps's death, was the only significant separate property in
0
the estate. In addition to receiving Mr. Capps's share of the community property, Mrs. Capps
received between $ 00, 00 and $
8 0 in
900, OO.certificates of deposit and other non -probate assets.
O
Mrs. Capps continued to live in the North Huson Street home until September 2009,
during which time she paid no rent to Mr. Capps's separate estate. Mrs. Capps provided
documents showing that between February 1, 2007, and September 31, 2009, she paid
41
13, 95. in property taxes, 2,02 in home insurance, 6618. for new windows, 1,
7 $ 5 78
$ , 20
$ 660.
for a new deck, 350 for exterior painting, 50 for new door locks, and $
$ $ 400 for a new garage
door opener.
II. PROCEDURE
After Mr.Capps's death, the estate's PR notified Larry and Kimberly that he believed the
home had been "co-
mingled" sic] with community funds and had become community property
[
that would pass to Mrs. Capps under the will; consequently, Larry and Kimberly would inherit
nothing from their father. CP at 370.
A. Probate Action; Larry and Kimberly's Motion for Partial Summary Judgment
The PR initiated probate proceedings in superior court. Larry and Kimberly petitioned
the trial court for a declaratory judgment that the home remained Mr. Capps's separate property
and that it passed to them under his will, and they moved for partial summary judgment on the
home's status as Mr. Capps's separate property.
7
42078 3 II
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They based their separate property argument on ( ) Capps acquiring the home before
1 Mr.
he married Mrs. Capps; ( )Mrs. Capps quitclaiming her interest in the home to him; and (3)
2
Mrs. Capps's deposition testimony that at the time of her quitclaim deed there were no
community property agreements or other agreements that would have changed the home's
character from separate to community property. Mrs. Capps did not respond to Larry and
Kimberly's summary judgment motion allegations; instead, she relied solely on a declaration and
a memorandum that she had filed in an earlier proceeding on a different issue. These
documents did not mention Mr. and Mrs. Capps's prenuptial agreement or the effect that this
agreement might have had on the home's separate or community property character.
The trial court granted partial summary judgment to Larry and Kimberly, concluding that
the home was Mr. Capps's separate property and, therefore, had passed to Larry and Kimberly
under Mr. Capps's will. The trial court also orally ruled that Mrs. Capps. ould potentially have a
c
7 At the time of Mrs. Capps's deposition and the trial court's summary judgment hearing, she had
apparently forgotten that she and Mr. Capps had signed a prenuptial agreement.
8 Mrs. Capps had submitted these declarations in connection with an earlier motion to relieve her
of rent obligations during the probate proceedings. She had requested an extension of time to
file a memorandum.in response to Larry and Kimberly's partial summary judgment motion and
the trial court had granted her request, but she did not submit a memorandum by the extended
new deadline.
8
42078 3 II
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claim for equitable reimbursement for the contributions she had made to the home from her
separate funds and from community property funds.
B. Mrs. Capps's Motions to Stay, to Reconsider, and to Grant Equitable Lien
Mrs. Capps filed a motion to stay delivery and or recordation of the deed, a motion to
/
determine community property interest and terms of payment, and a motion for reconsideration
and relief from judgment. In her reconsideration motion, she presented, for the first time, a copy
of the prenuptial agreement, but she argued only that, under section four of the agreement,
everything worked on or paid for [on the home] after the date of marriage [was] community
property. " CP at 131. The trial court denied Mrs. Capps's motions for reconsideration and to
stay delivery and or recordation of the. eed transferring the home's title to Larry and Kimberly.
/ d
In her " otion to Determine Community Property Interest and Terms of Payment,"
M Mrs.
Capps purported to assert a claim for equitable reimbursement for her separate and community
property contributions to the home. CP at 122. Larry and Kimberly opposed the motion,
arguing that (1)Mrs. Capps had not yet pleaded a claim for equitable reimbursement; 2)
( before
9 The trial court orally ruled:
I' not addressing what may be or may not be any equitable lien issue. But, I
m
agree that the law is clear, in my mind, that the time of the acquisition is separate
property. . . . And [ Mrs. Capps], you know, all these years, I understand,
executed a Quitclaim Deed, confirming that [the home] is [Mr. Capps's] separate
property. And I think that's the law.
You have your own claim. I' not telling you what to do, but I think there is a
m
claim Lfor equitable reimbursement],you know, an equitable lien.
RP ( ept. 4,2009)at 23 (emphasis added).
S
10 Mrs. Capps did not argue that the prenuptial agreement should supplant the quitclaim deed,
which she had filed two months later, expressly confirming that the home was Mr. Capps's
separate property. Nor did she argue that the prenuptial agreement's mere existence should
affect the trial court's view of her intent in executing the quitclaim deed.
9
42078 3 II
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she could assert an equitable reimbursement claim, she needed to file a creditor's claim with Mr.
Capps's probate estate under RCW 11. 0.and (3)
010;
4 because she had not yet filed a creditor's
claim and the two year statute of limitations had run under RCW 11. 0.her motion should
- ' 051,
4
fail. The trial court denied Mrs.' s motion to determine community property interest and
Capps'
payment terms. But it ruled that ( ) was not "time barred"from filing a claim for equitable
1 she
reimbursement protected by an equitable lien on the home and (2)she could file such claim
within two weeks of this order denying her motion. CP at 385.
C. Creditor's Claim,Action for Equitable Reimbursement, and Consolidation
In October 2009, Mrs. Capps apparently filed a creditor's claim with Mr. Capps's estate
seeking "$ 000 or the current fair market value"of the home. CP at 389. The estate denied
755,
Mrs. Capps's creditor's claim. She then filed a separate civil action against the PR and the
children to enforce the rejected creditor's claim. She later amended that action to include an
equitable reimbursement claim against the PR and the children., Before trial, the court
consolidated the civil action with the probate action. The parties also stipulated that the only
issue at trial was Mrs. Capps's equitable reimbursement claim, which was not based on her
previous creditor's claim.
Before trial on her equitable reimbursement claim, however, Mrs. Capps moved for leave
to relitigate the home's character. She argued that (1)a partial summary judgment order is
interlocutory," ( a trial court may revise such order at any time before trial, and (3) trial
2) the
court should allow her to introduce evidence of the home's community property character at trial
because her previous counsel had failed to argue the legal significance of the prenuptial
agreement and its importance to interpreting the legal effect of her subsequent quitclaim deed.
CP at 414. The trial court denied this motion.
10
42078 341
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D. Trial on Mrs. Capps's Equitable Reimbursement Claim
Mrs. Capps proceeded to a bench trial on her equitable reimbursement claim. In her
opening statement, Mrs. Capps asserted that she was entitled to reimbursement for "practically
the value of the house"because of the length of time that had passed and the amount of money
she had put into it. RP (March 15, 2011) at 6. On direct examination, Mrs. Capps testified as
summarized earlier in this opinion, without producing documentation to support many of her
assertions that she had spent her separate property or community property -funds on
improvements to the home. On cross -examination, she also testified that (1)the marital
community, not Mr. Capps's separate estate, had received the full benefit and use of the $ 500
42,
proceeds from his home loan; ( )she and Mr. Capps had used the money for community
2
purposes, and it had enabled them to acquire over a million dollars in assets during their
marriage; 3)she did not know if any of the loan money had been used to refurbish the home;
(
and (4)because the marital community had received all of the loan money, it had been fair for
the community to repay the mortgage.
Real estate appraiser Tim Richmond testified about the reasonable rental value of the
home during the time that Mrs. Capps had lived in it during her marriage to Mr. Capps and after
his death, from 1977 to 2009. Without objection from Mrs. Capps, Richmond testified that (1)
the total rental value of the home from 1977 to 2009 was $
322, 00; 2) average monthly rent
0 ( the
for that period would have been $ 40; and (3) reasonable rental value of the home for the two
8 the
and a half years between Mr. Capps's death in January 2007 and Mrs. Capps moving out of the
home in November 2009 was $ 500 a month.
1,
11
42078 3 II
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The trial court found "not credible" Mrs. Capps's testimony about selling her separate
home for $ 750, bringing the proceeds into the marriage, using them for community purposes,
22,
and using her $ 000 personal injury settlement award, which was "solely for [her] pain and
75,
suffering," repay the $ 500 North Huson Street home mortgage. CP at 584 85. The trial
to 42, -
court concluded that the evidence Mrs. Capps had presented at trial was insufficient to sustain
her claimed right to reimbursement because (1)Mr. Capps had brought more than $ 000 in
80,
separate property into the marriage, which was enough to pay the home's then -existing
obligations on his separate real estate contract on the home and to compensate the marital
community for any contributions toward the new $ 2, 00 post -marriage home mortgage; 2)
4 5 ( Mr.
Capps had taken out the $42, 00 mortgage for the . community's benefit, so no right to
5
reimbursement would have arisen'even if community funds had been used to repay the mortgage;
and (3) marital community had received the benefit of living in the home rent free during the
the -
marriage, representing a rental value of $286, 60, which fully offset any community
5
contributions that may have been made to the home.
The trial court dismissed Mrs. Capps's equitable reimbursement claim for her separate
and community property contributions to the home during marriage. The trial court then
calculated the amount of funds that Mrs. Capps proved that she had expended on the home after
Mr. Capps's death, offset this amount against Mrs. Capps's rent for this post death period, and
-
awarded Larry and Kimberly attorney fees and costs. The trial court entered a final judgment
against Mrs. Capps, ordering her to pay (1)25, 84 in rent for the period she had lived in the
$0
home after Mr. Capps's death, from February 1, 2007, to September 30, 2009; 2) $ 704.for
( 60,
70
Larry and Kimberly's reasonable attorney fees; and (3)1, in miscellaneous fees and
40
$ 338.
costs.
12
42078 3 II
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Mrs. Capps appeals.
ANALYSIS
I. SEPARATE PROPERTY CHARACTER OF MR. LAPPS'S HOME
The primary focus of several of Mrs. Capps's arguments is a challenge to the trial court's
1)reliance on two written documents expressly retaining the marital home's character as Mr.
Capps's separate property the parties' prenuptial agreement and Mrs. Capps's quitclaim deed
—
to Mr. Capps and 2)
— ( refusal to consider.later raised extrinsic evidence of Mrs. Capps's alleged
contrary intent. These arguments fail.
Mrs. Capps argues that the trial court erred by -ruling that the home was Mr. Capps's
separate property in three contexts: entry of the partial summary judgment, denial of her motion
for reconsideration, and denial of her motion for a trial on the issue. We find no error in the trial
court's ruling in any of the contexts because the overwhelming evidence was that the Huson
Street house was Mr. Capps's separate property.
We begin by recognizing basic Washington community property law principles and
presumptions. The character of property as separate or community property is determined at the
date of acquisition, and it depends on whether it was acquired by community funds and
community credit or by separate funds and separate credit. In re Estate of Borghi, 167 Wn. d
2
480, 484, 219 P3d 932 (2009);
Cummings v. Anderson, 94 Wn. d 135, 139, 614 P. d 1283
2 2
1980).Under the `inception of title' theory, property acquired subject to a real estate contract
"
or mortgage is acquired when the obligation is undertaken." Borghi, 167 Wn. d at 484. Once
2
the separate character of property is established, we presume that the property remained separate
property absent "direct and positive evidence to the contrary."Borghi, 167 Wn. d at 484 (citing
2
Guye v. Guye, 63 Wash. 340, 352, 115 P. 731. ( 911)).
1 Any increase in value of the separate
13
42078 3 II
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property is also presumed separate property. In re Marriage of Elam, 97 Wn. d 811, 816, 650
2
P. d 213 (1982).
2
To overcome these presumptions, a party must present clear and convincing evidence that
the party owning the separate property intended to change its character from separate to
community property. Borghi, 167 Wn. d at 484 85, 490.
2 - Where, as here, real property is at
issue, an acknowledged writing, such as a quitclaim deed or a community property agreement, is
generally required to change the property's character. Borghi, 167 Wn. d at 485.
2 Later
community property contributions to pay separate property obligations, improvements, or
mortgages .may give rise to a community "right [to] reimbursement" protected by an equitable
lien, but such later actions do not change the property's character from separate to community.
Borghi, 167 Wn. d at 491 n. .
2 7
Here, undisputed evidence showed that Mr. Capps had purchased the home and had
acquired its associated real estate contract obligations before his marriage to Mrs. Capps. Absent
a showing of direct and positive evidence to the contrary, the home and its later increased value,
therefore, were presumptively Mr. Capps's separate property. The prenuptial agreement was
consistent with the home's continuing separate property character. Mrs. Capps had the
opportunity to offer evidence of Mr. Capps's intent that the home or its increased value should
instead be community property. She presented no such evidence. Nor did she attempt to counter
Larry and Kimberly's summary judgment motion assertions, which had included excerpts of her
deposition testimony denying the existence of any community property agreements or another
written transfer of Mr. Capps's separate property to her. Because Mrs. Capps failed to present
evidence overcoming the effect of the prenuptial agreement or the presumption that the home
and its increased value were Mr. Capps's separate property, we hold that the trial court did not
14
42078 3 II
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err in granting partial summary judgment to Larry and Kimberly or in denying Mrs. Capps's
motions for reconsideration and to try the issue.
II. CREDITOR'S CLAIM; EQUITABLE REIMBURSEMENT CLAIM
Mrs. Capps next argues that the trial court erred by concluding that Washington law does
not recognize a "direct action" for a surviving spouse's equitable reimbursement claim and by
dismissing her claim on the ground that she needed to file a creditor's claim with the estate
before bringing her independent equitable reimbursement lawsuit. Despite questions raised
about the necessity for and timeliness of the creditor's claim, the parties eventually went to trial
on Mrs. Capps's underlying equitable reimbursement claim. We first address whether Mrs.
Capps was required, under these facts, to file a creditor's claim. We then address the merits of
Mrs. Capps's equitable reimbursement claim.
A. Necessity of Creditor's Claim
Mrs. Capps argues that the trial court erred when it concluded that she was required to
file a creditor's claim in order to receive equitable reimbursement. Because the claim did not
arise until Mr. Capps's death, we agree.
The creditor's claim statutes, chapter 11. 0 RCW, apply to persons with claims against a
4
decedent. To constitute a claim against a decedent, a debt must be incurred by or for the
decedent during his lifetime. Olsen v. Roberts, 42 Wn. d 862, 865, 259 P. d 418 ( 1953)
2 2
quoting 3
' BANCROFT'S PROBATE PRACTICE 512, 526 ( 2d ed.)).is unnecessary to file a
It
creditor's claim with an estate when the claim did not arise until after the decedent's death.
Foley v. Smith, 14 Wn. App. 285, 294, 539 P. d 874 (1975).T] e filing of a creditor's claim is
2 "[h
not a condition precedent to an action by a former spouse to recover his or her share of
15
42078 3 II
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community property accumulated during. the marriage."Smith v. MCLaren, 58 Wn. d 907, 909,
2
365 P. d 331 (1961).
2
Here, Mrs. Capps's equitable reimbursement claim is not a debt of Mr. Capps. Mrs.
Capps's right of reimbursement did not arise until after Mr. Capps died. This action is an
attempt to recover what Mrs. Capps believes is community property. A creditor's claim is not
necessary in such a situation. See Smith, 58 Wn. d at 909;. v. Young, 168 Wn. App. 211,
2 Witt
218, 275 P. d 1218 (2012).
3
B. Equitable Reimbursement Claim
Mrs. Capps argues that the trial court erroneously calculated her reimbursement amount
and concluded that she had failed to introduce sufficient evidence at trial to prove her equitable
reimbursement claim. We disagree. Mrs. Capps challenges the trial court's conclusions that she
was not entitled to equitable reimbursement for the following expenses: (1)repayment of the
15, 00 balance on Mr. Capps's separate real estate contract, ( )repayment of later $ 500
0 2 42,
mortgage loan secured by the home, 3)
( property taxes paid for the home during marriage, and
4) proportionate share of the home's increased value from inflation/market factors.
her
We review a trial court's decision to recognize a right to reimbursement protected by an
equitable lien to determine if the trial court exercised its discretion in a manifestly unreasonable
manner or exercised it on untenable grounds or for untenable reasons. In re Marriage of
Miracle, 101 Wn. d 137, 139, 675 P. d 1229 (1984);
2 2 State ex rel. Carroll v. Dunker, 79 Wn. d
2
12, 26, 482 P. d 775 (1971). The
2 person alleging a right to reimbursement has the burden of
proving by clear and convincing evidence both the existence of that right and the claimed
reimbursement amount. See Elam, 97 Wn. d at 816 17; 19 KENNETH W. WEBER, WASHINGTON
2 -
PRACTICE: FAMILY AND COMMUNITY PROPERTY LAW: REIMBURSEMENT AND EQUITABLE LINES-
16
42078 3 II
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BURDEN OF PROOF AND QUANTUM OF EVIDENCE 193 ( 1997). Mrs. Capps failed to meet her
burden here.
1. Repayment of 15, 00 on Real Estate Contract
$ 0
First, Mrs. Capps argues that the trial court erred by failing to reimburse the community
for the $ 000 that Mr. Capps used to satisfy the home's real estate contract two months after
15,
their marriage, allegedly because Mr. Capps had used a portion of the later-
acquired $ 500
42,
loan to pay off this real estate contract. But at trial, Mrs. Capps testified that ( ) Capps had
1 Mr.
over $ 000 in separate cash assets at the time of marriage; ( )this money was more than
80, 2
enough to pay off the real estate contract; and (3) $ 2, 00 loan proceeds that had gone into a
the 4 5
community account,"were used for "community purposes,"and did not benefit Mr. Capps's
separate estate. RP (March 15, 2011)at 118, 123.
If both separate and community property funds are available and there are sufficient
separate funds to pay a separate obligation, the court will presume that the payments for the
separate obligation were made from the separate funds. Pollock v. Pollock, 7 Wn. App. 394,
404, 499 P. d 231 (1972); re Marriage ofPearson -Maines, 70 Wn. App. 860, 867, 855 P. d
2 In 2
1210 (1993).The uncontroverted evidence at trial showed that Mr. Capps had sufficient separate
property assets at the time of marriage to pay off his separate obligation on the real estate
contract, and Mrs. Capps made no positive showing that any funds from the $ 500 loan were
42,
used to pay off the real estate contract. We hold, therefore, that the trial court did not err by
declining to credit Mr. Capps's 15, 00 real estate contract payoff amount to the community
$ 0
estate.
17
42078 3 II
- -
2. Repayment of 42, 00 Mortgage
$ 5
Mrs. Capps argues that the trial court erred by failing to reimburse her for the
contributions she had made to repay the $
42, 00 mortgage
5 during the marriage. Ms. Capps
testified at trial that she and Mr. Capps had repaid the $ 500 mortgage with $
42, 350 monthly
payments from community funds until the mortgage was fully repaid in 1991. But instead of
establishing that the $ 500 was Mr. Capps's separate obligation or that loan proceeds benefited
42,
Mr. Capps's separate estate, Mrs. Capps testified on cross -examination that ( ) $ 500 loan
1 the 42,
was put into a community account and used for community purpose; 2) marital community
( the
got the full benefit and use of the money, not Mr. Capps's separate estate; 3) loan helped the
( the
community acquire over a million dollars in assets during the marriage; and (4) did not know
she
ifany of the loan proceeds had been used to refurbish the home.
A court may impose an equitable lien to protect a person's right to reimbursement
whenever property of one of the three characters ( separate property of husband, separate
property of wife, or community property) is used to improve property of either of the other two
sorts." In re Estate of Trierweiler,.5 Wn. App. 17, 22 23, 486 P. d 314 ( 197
- 2 1).
12 Here,
however, the undisputed trial evidence showed that Mr. Capps had used his separate property
home, for which he had previously paid off the real estate contract and had acquired full
11 In addition to the $
350 monthly community property payments toward the $ 500 mortgage,
42,
Mrs. Capps also asserts that the trial court failed to credit her for her separate property
contribution to the home because she and Mr. Capps fully repaid the mortgage in 1991 with
money from her $ 000 separate property, personal injury settlement. But as we describe in
75,
more detail later, the trial court found her testimony to.his effect not credible. And we do not
t
review the trial court's credibility determinations. In re Marriage of Rich, 80 Wn. App. 252,
259, 907 P. d 1234 (1996).
2
12
See also WASHINGTON STATE BAR ASSOCIATION, WASHINGTON COMMUNITY PROPERTY
DESKBOOK, 3 134 ( d ed. 2004).
- 3
18
42078 3 II
- -
ownership, merely as collateral for the $ 500 mortgage loan. Because the loan was acquired
42,
13
during the marriage, it was presumptively a community debt that would benefit the community.
Consistent with this presumption was Mrs. Capps's trial testimony that all of the loan proceeds
were put into a community account, used by the community for community purposes, and
benefited the community. Mrs. Capps made no positive showing that any of the loan proceeds
were used to refurbish the home.
Mrs. Capps failed to show that her separate property or community property was used to
improve Mr. Capps's separate home. Accordingly, she failed to prove her right to
reimbursement for any funds used to pay off the $ 500 loan. We hold that the trial court did
42,
not err by failing to credit the community with this amount.
3. Increase in Home's Value from,
Inflation
Mrs. Capps also argues that the trial court erred by failing to reimburse her for the
inflation value of her "proportionate contributions"to the home. Br. of Appellant at 40. As we
explained above, we presume that any increase in the value of separate property resulting from
inflation is also separate property absent "direct and positive evidence that the increase is
attributable to community funds or labors."Elam, 97 Wn. d at 816 (emphasis added). This
2 "
rule entitles each spouse to.the increase in value during the marriage of his or her separately
owned property, except to the extent to which the other spouse can show that the increase was
attributed to community contributions."Elam, 97 Wn. d at 816 17. Again, Mrs. Capps offered
2 -
13
Debt incurred by either spouse during marriage is presumed to be a community debt; the key
test is whether, at the time the obligation was entered into,there was a reasonable expectation the
community would materially benefit. Sunkidd Venture, Inc. v. Snyder- Entel, 87 Wn. App. 211,
215, 941 P. d 16 ( 1997). Although a spouse may rebut this presumption with "clear and
2
convincing evidence that the debt was not contractedfor community benefit," Mrs. Capps's trial
testimony failed to rebut this presumption. Sunkidd Venture, 87 Wn. App. at 215 (emphasis
added).
19
42078 3 II
- -
no evidence at trial about the specific improvements she and Mr. Capps had made to "refurbish"
the home during their marriage or that such improvements were the reason the home had
14
increased in value. Therefore, she failed to overcome the presumption that increases in the
home's value were Mr. Capps's separate property. We hold that the trial court did not err by
failing to credit the community with this increased value amount.
4. Property Taxes during Marriage
Mrs. Capps also argues that the trial court erred by failing to reimburse her for.
72
101, 34.in property taxes (averaging $ 76 per month) that she and Mr. Capps paid for
4 281.
the home during their marriage, from 1977 to 2006. Though Mrs. Capps testified that these taxes
were paid with community funds, she offered no documentary proof. The trial court rejected her
15
testimony and found that her proof failed. Credibility determinations are for the trier of fact,
and we do not review those determinations or substitute our own judgment for the trial court's.
Rich, 80 Wn. App. at 259. This claim fails for lack of proof.
C. Imputed Rent during Marriage before Mr. Capps's Death
Mrs. Capps also argues that the trial court erred by (1)imputing to her $286, 60
5
approximately $ 40 per month)as the rental value of living in the home rent free during her 30-
8 -
year marriage to Mr. Capps and ( 2) offsetting this rental value against her equitable
14 Mrs. Capps submitted two declarations as part of her pretrial motions, listing some of the
improvements made to the home during marriage, but these declarations did not list the amount
of money expended on these improvements or positively state that such improvements increased
the value of the home. Mrs. Capps also submitted the declaration of real estate appraiser Jay
Latteri with her motion for reconsideration. This declaration showed that the home was valued
at $ 55, 00,but it was not admitted as an exhibit at trial.
7 0
15 "Even if Linda Capps had proven that those taxes were paid with community funds, which she
did not, no right for reimbursement secured by an equitable lien would arise because the
reasonable rental value received by the marital community for the use of Mr. Capps' home far
exceeded the amount of property taxes paid."CP at 588 (CL V).
20
42078 3 II
- -
reimbursement claim and any contributions that she may have made to the home over the 30-
year period, thereby negating her right to reimbursement. Because the trial court concluded that
the community had no equitable reimbursement claim, we need not evaluate the trial court's
conclusion regarding imputed rent as, in this circumstance, it amounts to a legal aside.
D. Rent and Other Expenses after Mr.Capps's Death
Mrs. Capps proved at trial that she had paid property taxes and expenses for the home
after Mr. Capps's death. She introduced evidence that, after her husband died, she had paid
41
13, 95. in property taxes on the home, 2502 in home insurance, and $
7 $ , 78
6, for new
618.
windows, resulting in a total expenditure of $ 2, 16.which benefited Mr. Capps's separate
19,
2 9
16
estate. The trial court credited Mrs. Capps for this entire $ 2, 16.amount.
19
2 9
The trial court then offset this $
19
22, 16.amount against the reasonable rental value for
9
the 32 month period that Mrs. Capps had lived in the home after Mr. Capps's death, which
-
terminated the community, caused the home to pass to his separate estate, and made Mrs. Capps
responsible for paying rent to his separate estate. The undisputed evidence at trial showed that
the reasonable rental value for this period was $1,00 a month, for a total of $ 000.
5 48,
Subtracting Mrs. Capps's 22, 16.credit for the taxes and expenses she paid from the $ 8, 00
19
$9 4 0
she owed in rent left her owing Mr. Capps's separate estate a balance of 25, 83.which the
81,
$ 0
trial court rounded up to $ 084. We hold that the trial court did not err by calculating this
25,
balance that Mrs. Capps owed to the estate for rent for the time she lived in the home after her
husband died and ownership of the home had passed to his children.
16
Mrs. Capps apparently also paid $ , for a new deck, 350 for exterior painting, 50 for
20
1660. $ $
new door locks, and $
400 for a new garage door opener. The trial court did not reimburse her
for these expenses because the deck failed and the other expenses would have been incurred by a
tenant and should not be set off against rent. It was within the trial court's discretion to not
reimburse her for these amounts.
21
42078 3 II
- -
III. OTHER TRIAL COURT RULINGS
A. Credibility
Mrs. Capps assigns error to the trial court's credibility determinations regarding several
points of her testimony. Such credibility determinations are the exclusive province of the trial
court; we neither review those determinations nor substitute our judgment for that of the trial
court. Rich, 80 Wn. App. at 259. Thus, we do not.review the trial court's credibility
determinations here.
B. Expert Testimony on Home's Value
Mrs. Capps also argues that the trial court erred by allowing Richmond's expert
testimony about the reasonable rental value of living in the' home both before and after Mr.
Capps's death because Richmond was not qualified as an expert. To challenge a trial court's
admission of evidence on appeal, a party must have raised a timely and specific objection at trial.
State v. Gray, 134 Wn. App. 547, 557, 138 P. d 1123 (2006). If a party fails to make such an
3
objection at trial,she waives any evidentiary error on appeal. ER 103( )( v. Black, 109
1);a State
Wn. d 336, 340, 745 P. d 12 (1987). Mrs. Capps did not object to Richmond's expert witness
2 2
qualifications at trial or to his testimony about his real estate valuation methods. We hold,
therefore, that she has waived this error on appeal.
IV. ATTORNEY FEES
A. Trial
Lastly, Mrs. Capps argues that the trial court abused its discretion in awarding attorney
fees to Larry and Kimberly under RCW 11. 6A.for the proceedings below. We disagree.
150
9
In probate matters, RCW 11. 6A.gives the trial court discretionary authority to
150(
1)
9
award attorney fees and costs to any party to the proceedings and "in such amount and .. .
22
42078 3 II
- -
manner as the court determines to be equitable."In re Estate ofBlack, 116 Wn. App. 476, 489,
66 P. d 670 (2003).In exercising its discretion, the trial court may consider " ny and all factors
3 a
that it deems to be relevant and appropriate,"
including whether the litigation benefits the estate
or trust involved. RCW 11. 6A. We will not interfere with such a decision unless it is
150(
1).
9
manifestly unreasonable or rests on untenable grounds or reasons. Black, 116 Wn.App. at 489.
Here, the trial court awarded attorney fees to Larry and Kimberly because Mrs. Capps's
actions had caused Larry and , Kimberly to endure protracted litigation over the separate or
community property character of Mr. Capps's home, even after the trial court had repeatedly
ruled against her on this issue based on the terms of her prenuptial agreement and the quitclaim
deed. Mrs. Capps then commenced other actions, including a claim against Larry and Kimberly
personally, and pursued her equitable reimbursement claim to trial, even though she lacked the
requisite evidentiary support for her claim. Mrs. Capps's action increased attorney fees and costs
for Larry and Kimberly and perhaps even to the estate in defending the probate distribution.
Based on these facts, we - old that the trial court acted within its broad discretion in awarding
h
attorney fees and costs to Larry and Kimberly for the proceedings below.
B. Appeal
Larry and Kimberly also request attorney fees on appeal under RCW 11. 6A. RAP
150.
9
a),
18. ( allows (to award reasonable attorney fees where, as here, a statute provides for
1 b) us
such fees and the parties request the fees in a separate section of their opening brief. Dice v. City
of Montesano, 131 Wn. App. 675, 693, 128 P. d
3 1253 ( 2006). Although recognizing our
discretion under RCW 11. 6A. to award attorney fees and costs as we deem equitable, we
150
9
decline to award further attorney fees and costs in this case.
23
42078 3 II
- -
We hold that the trial court ( ) not err by concluding that the home was Mr. Capps's
1 did
separate property and that it passed to Larry and Kimberly under Mr. Capps's will at his death
2) did not err by ruling that Mrs. Capps's evidence was insufficient to prove her claims for
and
equitable reimbursement for separate and community property contributions to the home before
Mr. Capps's death. We affirm.
A majority of the panel having determined that this opinion will not be printed in the
Washington Appellate Reports, but will be filed for public record in accordance with RCW
040,
2.6.it is so ordered.
0
We concur:
vI IGI
Hunt, J.
Armstr , T
J. .
P
24