In Re The Estate Of: John J. Belarde Steve Belarde, Res. And John F. Belarde, App. ( 2020 )

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
In the Matter of the Estate of ) No. 79912-6-I
)
JOHN J. BELARDE, )
) DIVISION ONE
Deceased. )
)
STEVE BELARDE, an individual, )
)
Respondent, )
)
v. )
) UNPUBLISHED OPINION
JOHN F. BELARDE, personal )
representative and trustee, )
)
Appellant. )
)
MANN, C.J. — John F. Belarde, as personal representative and trustee of the
estate of his father John J. Belarde, appeals the trial court’s order vacating a prior order
dismissing a petition filed under the Trust and Estate Dispute Resolution Act (TEDRA),
ch. 11.96 RCW, by his brother, Steve Belarde. 1 John contends that the trial court erred
when it relied on CR 60(b)(3) to vacate the TEDRA dismissal because Steve’s expert
declaration was not based on newly discovered evidence. We agree and reverse.
1 Because the parties to this appeal all have the same last name, we use first names and refer to
John J. Belarde as John Sr. and John F. Belarde as John. No disrespect is intended.
Citations and pin cites are based on the Westlaw online version of the cited material.
No. 79912-6-I/2
I.
John J. Belarde and Rosemary Belarde had three children: John F. Belarde,
Steve Belarde, and LeeAnn Belarde. In July 2014, John Sr. appointed John to be his
attorney-in-fact under a general durable power of attorney and successor trustee to the
John and Rosemary Belarde Revocable Living Trust (Trust). The sole member of the
Trust is Belarde Holdings LLC, which John Sr. established in 2011. John Sr.’s
residence and two properties in Alaska were in the Trust. John Sr. was also the single
member of a limited liability corporation (LLC) that owned a commercial property in
Woodinville, Washington. In 2012, John Sr.’s ownership interest in the LLC was
transferred to the Trust. In January 2015, John Sr. was found to be incapacitated.
In December 2015, Steve and LeeAnn asked John to provide them with an
“accounting of [their] father’s assets, and [John’s] use thereof on his behalf as attorney-
in-fact.” Steve and LeeAnn cited former RCW 11.94.090, 2 which allows a court to
compel the attorney-in-fact to submit the attorney-in-fact’s accounts. In February 2016,
John’s attorney, responded to Steve and LeeAnn providing bank records, medical
records, financial account statements, a report about their father’s care, canceled
checks, and profit and loss statements of Belarde Holdings LLC. The letter included
information about the property in Woodinville, which had been listed for sale for
$1,600,000, and information about a reverse mortgage that John Sr. had taken on his
home in 2010. At some point, John personally received $195,000, which the parties
refer to interchangeably as both a loan and gift.
2 Former RCW 11.94.090 provided that “any other interested person, as long as the person
demonstrates to the court’s satisfaction that the person is interested in the welfare of the principal and
has a good faith belief that the court’s intervention is necessary, and that the principal is incapacitated at
the time of the filing.” Former RCW 11.94.100 (2008).
-2-
No. 79912-6-I/3
In response to this information, Steve filed a TEDRA petition in July 2016,
seeking an accounting of the sale of the commercial property for $1,500,000, and for
John’s removal as attorney-in-fact for John Sr. The trial court dismissed the petition
with prejudice after determining Steve did not have a statutory right to the information
under RCW 11.98.072(4) 3 because at the time, John Sr. was still alive. The trial court
also determined that because Steve was not a member of the LLC, he lacked standing
to request information about the LLC under RCW 25.15.136. 4 The court noted that it
was “not making any findings as to the adequacy of the accounting except as to the sale
of the property.”
John Sr. passed away on August 7, 2017. 5 In October 2017, the court opened
probate for the estate. The court appointed John as personal representative of the
estate with nonintervention powers on November 15, 2017. 6 At Steve’s request, John
provided an inventory of the estate and additional financial information. Steve
expressed concerns to John about several matters, including:
What John did with the $1.372 million in proceeds from the $1.5 million
commercial property sale.
What John did with the tenants’ monthly rent payments from the
commercial property before selling it.
Whether the $195,000 transaction between John Sr. and John was a gift
or a loan.
What happened to personal property, including the sale proceeds from a
pickup truck.
3 RCW 11.98.072(4) provides: “While the trustor of a revocable trust is living, no beneficiary other
than the trustor is entitled to receive any information under this section.”
4 RCW 25.15.136 provides that members of an LLC may inspect records of the LLC.
5 There is the following discrepancy in the record: Clerk’s papers page 42 suggests that John Sr.
passed away on August 7, 2017, while clerk’s papers page 2 suggests that John Sr. passed away on
August 8, 2017.
6 The probate documents are not in the record, but the parties have not disputed these facts.
-3-
No. 79912-6-I/4
Whether John should provide a summary accounting of his activities.
John’s attorney responded with assurances that “the accounting . . . is still
coming,” that they “had no intention of having [Steve] produce his own accounting,” and
“hoped [the documents produced] would increase [Steve’s] comfort level that nothing is
being hidden.” Steve’s attorney clarified that he expected two accountings from John,
one as the personal representative of the estate and the other as attorney-in-fact.
John’s attorney conveyed that “[w]e are working on bring[ing] the accountings up to
date” and that John would provide “[a]n accounting as the Attorney-in-fact, as Trustee of
the Trust, and as [personal representative] of the estate.”
On March 26, 2018, John served a creditor’s claim against the estate. When
Steve requested further information from John about his creditor’s claim, John declined
to provide more information about it until he finished administering the estate. On April
11, 2018, John provided an accounting for his service as an attorney-in-fact and
explained that “[t]he accounting of the trust is still not complete, but we are working on it
next week.” On April 23, 2018, Steve asked when he could “expect to receive the
accounting and claim explanation.” John responded, that “[t]he accounting is complete,
except for several missing statements which I recently [received] and will put into the
same format and forward.” John also explained that he did not address the creditor’s
claim in detail because “it is a part of the probate and the probate accounting arrives at
the end.” Steve responded to John that he had not “provide[d] the information . . .
requested.”
The financial information provided by John included raw financial documents and
data, bank statements, receipts, check registers, copies of checks, and income and
-4-
No. 79912-6-I/5
property tax. John explained that he sent this information “as is” to satisfy Steve’s
request to quickly produce records. Steve contends that he was unable to understand
an overall picture of John’s activities as personal representative and attorney-in-fact for
the Trust. On May 1, 2018, John provided the missing account statements and
completed the Trust accounting. At that point, John had provided Steve with over 1,600
pages of documents.
On May 10, 2018, John sent a proposed plan for distributing the estate’s
personal property and disposing of its real estate to Steve. Steve did not believe he had
enough information about the estate’s finances to make an informed decision about
John’s proposed plan. Steve did not respond to John’s plan and on June 1, 2018, filed
a TEDRA petition, seeking an accounting under RCW 11.48.010, .030,.060 and RCW
11.96A.150. Steve alleged that John had refused to provide him with “full and proper
accounting[s]” and sought “to compel adequate and complete accountings and for [the]
basis of unliquidated creditor claim [made] by [John].” Steve requested specifics about
(1) a $195,000 transfer to John while acting as attorney-in-fact for John Sr., (2) seven
bank accounts whose purpose and transactions were not clear, (3) large withdrawals of
$12,000 and $76,300 from the Trust savings account, (4) the statuses of the two
properties in Alaska and John Sr.’s former home, (5) the reverse mortgage taken on the
John Sr.’s former home, and (6) a Lincoln car.
John opposed the petition and submitted an expert opinion by Roger Jones, a
Certified Public Accountant (CPA), stating that “the documents provided [by John]
qualify as an Accounting and . . . meet the standards of a fiduciary accounting.” John’s
expert also explained that “there are so few transactions that providing more formalities
-5-
No. 79912-6-I/6
such as summaries of expense categories would not provide any additional information
and, in this case, would be just an exercise of ‘form over substance.’” John also
submitted a declaration of another accountant conveying that probate needed to be
open for another 6 to 12 months to prepare appropriate tax reports.
On June 28, 2018, a King County Superior Court commissioner dismissed
Steve’s TEDRA petition (TEDRA dismissal). The commissioner found that Steve had
not provided an “adequate factual basis” to compel an accounting since John had
provided accountings as attorney-in-fact and trustee. The commissioner also found that
Steve “has not presented sufficient basis for the Court to order [the] release [of]
information” because that “is a form of intervening in administration of the estate.” In its
oral ruling the commissioner suggested that Steve “needs to bring forth different
evidence in order to overcome an expert—most likely needs to hire their own expert.”
On November 15, 2018, Steve moved to compel adequate and complete
accountings, for authority to conduct discovery, and to compel amendment of inventory.
Steve later struck this motion after John objected that it was an untimely attempt to
revise the TEDRA dismissal. John argued the dismissal was final because it was not
appealed.
Steve then obtained two declarations from William C. Jaback, a CPA. Jaback
reviewed the information provided by John and determined that he could not “decipher
the economic transactions of the entities at issue.” In his opinion, John had not
provided a “full accounting” and his disclosures did “not meet community standards and
[did] not comply with the requirements for accounting as described in RCW
11.96A.070.” Jaback opined that what John had provided was “insufficient, not
-6-
No. 79912-6-I/7
reasonably comprehensible, and has failed to meet the fundamental objective of
allowing the recipient to understand the financial transactions with a moderate amount
of effort.” Jaback concluded that John had disclosed “inadequate raw financial data to
reconstruct the finances of the entities overseen by John.” Jaback found a “large
number of disbursements listed as ‘unknown’ in registers provided by [John].” On
February 6, 2019, Steve moved to vacate the TEDRA dismissal alleging that John had
committed fraud under CR 60(b)(4). John responded with his CPA’s opinion that he
had previously provided a full accounting. In Steve’s reply, he asserted that newly
discovered evidence under CR 60(b)(3) supported vacating the TEDRA dismissal.
On March 8, 2019, a different King County Superior Court commissioner denied
Steve’s motion to vacate, finding no basis to vacate the TEDRA dismissal under CR
60(b)(3) or (4).
Steve then moved for revision of the commissioner’s order, arguing that Jaback’s
opinion was newly discovered evidence and that John had made factual
misrepresentations about the accounting to the court.
On April 19, 2019, a King County Superior Court judge vacated the TEDRA
dismissal based on CR 60(6)(3). The trial court did not address Steve’s allegation that
John committed fraud or misrepresentation under CR 60(b)(4). The vacation order
remanded the matter to the ex parte probate department to consider the issues raised in
Steve’s motion to compel an accounting. John appealed. 7
7 When John filed this appeal, he also moved in this court for a stay of the proceeding that the
superior court remanded to the trial court’s ex parte probate department. A commissioner of this court
granted the stay “[t]o the extent Steve is concerned about risk to the estate assets, any remedy does not
include pursuing the same accounting that is the subject of the appeal.” Steve filed a motion for
clarification, seeking confirmation that Steve may seek relief under RCW 11.68.065, .070, and .110 in the
-7-
No. 79912-6-I/8
II.
“On appeal, a trial court’s disposition of a motion to vacate will not be disturbed
unless it clearly appears that it abused its discretion.” Lindgren v. Lindgren, 58 Wn.
App. 588, 595, 794 P.2d 526 (1990). A trial court abuses its discretion when its ruling is
based on untenable grounds or for untenable reasons or when the discretionary act was
manifestly unreasonable. Lindgren, 58 Wash. App. at 595.
“CR 60 is a limited procedural tool that governs relief from final judgments.”
Fireside Bank v. Askins, 195 Wash. 2d 365, 375, 460 P.3d 157 (2020). “Relief may be
sought on many bases, including mistakes, inadvertence, excusable neglect, newly
discovered evidence, and fraud.” Fireside Bank, 195 Wash. 2d at 375. “The rule balances
the principle of equity and finality.” Fireside Bank, 195 Wash. 2d at 375. “Fundamentally,
a CR 60 proceeding is ‘equitable in its character, administered upon equitable
principles, and extended upon equitable terms.’” Fireside Bank, 195 Wash. 2d at 375.
“This is consistent with a court’s ‘inherent power to supervise the execution of
judgments’ that have prospective effect.’” Fireside Bank, 195 Wash. 2d at 375.
A.
John first contends that the superior court erred because Jaback’s expert
declaration was not based on newly discovered evidence, and thus it was an abuse of
discretion for the court to vacate the TEDRA dismissal under CR 60(b)(3). We agree.
CR 60(b)(3) states:
trial court. The commissioner denied the motion, stating that a new proceeding in the trial court would be
“essentially seeking to pursue in the trial court relief similar to the relief that is the subject of the ongoing
appeal.”
-8-
No. 79912-6-I/9
On motion and upon such terms as are just, the court may relieve a party
or the party’s legal representative from a final judgment, order, or
proceeding for the following reasons:
(3) Newly discovered evidence which by due diligence could not have
been discovered in time to move for a new trial under rule 59(b).
“To justify vacating a judgment on the ground of newly discovered evidence, the moving
party must establish that the evidence (1) would probably change the result if a new trial
were granted, (2) was discovered since trial, (3) could not have been discovered before
the trial by the exercise of due diligence, (4) is material, and (5) is not merely cumulative
or impeaching.” Jones v. City of Seattle, 179 Wash. 2d 322, 360, 314 P.3d 380 (2013).
The “[f]ailure to satisfy any one of these five factors is a ground for denial of the motion.”
Go2Net, Inc. v. C I Host, Inc., 115 Wash. App. 73, 88, 60 P.3d 1245 (2003).
Jaback’s declaration was based on the same facts as John’s expert; the only
differences between the two excerpts was their conclusions. Indeed, Steve concedes
that Jaback’s declaration was based on facts that were known to him at the time of the
June 2018 hearing. Steve instead argues that the superior court did not abuse its
discretion in vacating the commissioner’s order. But Steve cites no case that supports
his contention that an expert opinion based on facts previously known to both parties is
“newly discovered evidence” within the meaning used in CR 60(b)(3). In contrast,
Washington courts have repeatedly held that “[a] new expert opinion, based on facts
available to the trial experts, does not constitute newly discovered evidence.” In re
Pers. Restraint of Copland, 176 Wash. App. 432, 451, 309 P.3d 626 (2013) (citing State v.
-9-
No. 79912-6-I/10
Harper, Wn. App. 283, 293, 823 P.2d 1137 (1992)); In re Pers. Restraint of Walter
William, 176 Wash. App. 432, 451, 309 P.3d 432 (2013). 8
Steve also fails to show that he could not have discovered the facts before the
June 2018 hearing with reasonable diligence. “A mere allegation of diligence is not
sufficient; the moving party must state facts that explain why the evidence was not
available for trial.” Vance v. Offices of Thurston County Comm’rs, 117 Wash. App. 660,
671, 71 P.3d 680 (2003). Steve contends that an expert was not mandatory for his
motion to compel an accounting. While an expert was not mandatory, once Steve knew
that John had an expert declaration stating that the accounting was sufficient, a
reasonable act of diligence would have been to consult an accounting expert about the
sufficiency of the documents provided to him.
The superior court abused its discretion when it vacated the TEDRA dismissal
based on CR 60(b)(3).
B.
Alternatively, Steve argues that this court can affirm on other grounds, citing CR
60(b)(4), CR 60(b)(6), and CR 60(b)(11). We disagree, but address each argument in
turn.
Steve first contends that CR 60(b)(4) provides a basis to affirm because Jaback’s
declaration shows that John’s expert misrepresented facts to the court. CR 60(b)(4)
allows a trial court to vacate a judgment based on “[f]raud . . . , misrepresentation, or
8 Steve argues that these cases were criminal proceedings addressing a motion for a new trial
under CR 59. But the standard for assessing if evidence is “newly discovered” is the same in civil and
criminal cases. Compare State v. Harper, 64 Wash. App. 283, 291, 823 P.2d 1137 (1992) with Jones, 179
Wash. 2d at 360. See also Hill v. GTE Directory Sales Corp. 71 Wash. App. 132, 142, 856 P.2d 746 (1993)
(“GTE provides no reason for granting a civil litigant a new trial when a criminal defendant would not be
entitled to a new trial under identical circumstances.”).
-10-
No. 79912-6-I/11
other misconduct of an adverse party.” Steve argues that the expert opinion offered by
John’s CPA was a misrepresentation and misled the trial court.
Competing expert opinions cannot be the basis for fraud if the representation is
clearly communicated as an opinion. Heigis v. Cepeda, 71 Wash. App. 626, 633, 862
P.2d 129 (1993). Steve’s argument that the opinion was a misrepresentation fails
because he has not presented clear and convincing evidence to support his argument
that John’s expert misrepresented facts to the court. Steve makes conclusory
statements that, since he received voluminous documents, John’s expert’s statement
must be false. Because the 1,660 pages of documents provided to Steve are not before
this court, we cannot determine whether either expert made a factual misrepresentation
to the trial court. CR 60(b)(4) does not provide a basis to vacate the June 2018 TEDRA
dismissal.
Steve next alleges that, if the order dismissing his TEDRA petition has
prospective effect, then CR 60(b)(6) provides a basis for this court to affirm. CR
60(b)(6) allows a judgment to be vacated when “it is no longer equitable that the
judgment should have prospective application.” The rule “allows the trial court to
address problems arising under a judgment that has continuing effect ‘where a change
in circumstances after the judgment is rendered makes it inequitable to enforce the
judgment.’” Pac. Sec. Co. v. Tanglewood, Inc., 57 Wash. App. 817, 820, 790 P.2d 643
(1990). “The rule applies primarily to injunctions and judgments other than those for
money damages.” Tanglewood, 57 Wash. App. at 820-21. This relief is typically granted
for injunctions that have a continuing effect. Tanglewood, 57 Wash. App. at 821. In
circumstances involving orders with continuing effect, the court’s inherent power to
-11-
No. 79912-6-I/12
ensure an equitable result may be invoked by a CR 60(b)(6) motion. Tanglewood, 57
Wash. App. at 821.
Steve contends that he should be able to seek other non-monetary relief under
the applicable statutes and that he has the right to annually file (1) a petition for an
accounting of the trust under RCW 11.106.040, (2) the right to file an annual report of
affairs under RCW 11.68.065, (3) and the right to petition under RCW 11.68.110 for a
final accounting of the estate assets and proceeds. Steve contends that if his recourse
under these statutes is barred, then the “dismissal will have become ‘an instrument of
wrong.’” But Steve has not established that the order has prospective application or
bars future actions he may have under appropriate statutes. The TEDRA dismissal
does not bar Steve from other relief available under the law. CR 60(b)(6) also does not
provide a basis to vacate the TEDRA dismissal.
Finally, Steve asserts that CR 60(b)(11) is a catchall if the vacation does not fit
within the other subsections of CR 60(b). CR 60(b)(11) allows a trial court to vacate a
judgment for “[a]ny other reason justifying relief from the operation of the judgment.”
Contrary to Steve’s assertion, however, the CR 60(b)(11) is “not a blanket provision
authorizing reconsideration for all conceivable reasons.” State v. Keller, 32 Wash. App.
135, 141, 647 P.2d 35 (1982). Instead, CR 60(b)(11) is confined to “extraordinary
circumstances” and “must relate to ‘irregularities which are extraneous to the action of
the court or go to the question of the regularity of the proceedings.’” Keller, 32 Wn.
App. at 141 (quoting Marie’s Blue Cheese Dressing, Inc. v. Andre’s Better Foods, Inc.,
68 Wash. 2d 756, 758, 415 P.2d 501 (1966)).
-12-
No. 79912-6-I/13
Steve points to no extraordinary circumstances, extraneous irregularities, or
irregularities of the proceedings. Instead, he argues that neither John nor the estate
would be burdened by responding to his requests. CR 60(b)(11) does not provide an
independent basis for vacating the TEDRA dismissal.
III.
Both parties request attorney fees on appeal. RAP 18.1 authorizes this court to
award attorney fees on appeal where authorized by law or court rule. RCW
11.96A.150(1) provides:
any court on an appeal may, in its discretion, order costs, including
reasonable attorneys’ fees, to be awarded to any party: (a) From any party
to the proceedings; (b) from the assets of the estate or trust involved in the
proceedings; or (c) from any nonprobate asset that is the subject of the
proceedings.
We award fees to John as the prevailing party to this appeal to be paid by Steve subject
to compliance with RAP 18.1.
We reverse the trial court’s order vacating the commissioner’s June 2018
dismissal of Steve’s TEDRA petition.
WE CONCUR:
-13-