Nancy Burgoyne v. Joyce Olson ( 2018 )

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
NANCY BURGOYNE, an unmarried )
woman, ) No. 76610-4-1
)
Appellant, ) DIVISION ONE
)
v. )
)
JOYCE OLSON and her marital ) UNPUBLISHED OPINION
community; and WHITAKER LIPP & )
HEALEA, INC., P.S., a Washington ) FILED: July 9, 2018
corporation, )
)
Respondents. )
)
BECKER, J. — Appellant Nancy Burgoyne brought tort claims against her
former accountant based on alleged mismanagement of funds. The trial court
correctly dismissed the suit on summary judgment for lack of proof that any
conduct by the accountant harmed Burgoyne's interests.
Summary judgment is proper only when there are no remaining issues of
material fact and the moving party is entitled to judgment as a matter of law. CR
56(c); Christensen v. Grant County Hosp. Dist. No. 1, 152 Wash. 2d 299, 305, 96
P.3d 957(2004). Because Burgoyne opposed summary judgment below, we
take the facts in her favor. Christensen, 152 Wash. 2d at 305.
Burgoyne divorced her husband in 2011. A property settlement
agreement provided for payment of various financial obligations incurred by the
No. 76610-4-1/2
couple, including tax and mortgage debt. Accountant Joyce Olson was
designated "paymaster." She assumed responsibility for satisfying the debts in a
specified order, set forth in the agreement. The source of funds used by Olson
was a "paymaster" account in which Burgoyne's ex-husband was required to
deposit his earnings.
In 2013, Burgoyne filed a complaint against Olson with the Washington
State Board of Accountancy based on an alleged conflict of interest: Olson was
serving as paymaster while also providing accounting services to the ex-husband
individually. The board investigated and ultimately decided that Olson violated
conflict of interest rules. She agreed to pay a fine and take an ethics course.
Burgoyne sued her ex-husband in April 2014 based on alleged violations
of the property settlement agreement. She claimed that he had deliberately
underfunded the paymaster account and engaged in other misconduct, leading to
unpaid debts and foreclosure on the parties' two houses, among other
consequences. Burgoyne also asserted that Olson should be replaced as
paymaster.
Olson was not named as a defendant in Burgoyne's suit against her ex-
husband. Olson relinquished the role of paymaster on September 1, 2014.
Burgoyne's suit against her ex-husband was converted to binding
arbitration by agreement of the parties. A hearing occurred on December 17,
2014. The evidence considered by the arbitrator, retired Superior Court Judge
Paris Kailas, included a report prepared by accountant Kevin Grambush. The
parties had agreed to use Grambush as a neutral expert responsible for
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investigating financial matters relevant to their dispute. In preparing his report,
Grambush had access to thousands of documents and the ability to interview .
Olson. He concluded that any underfunding of the paymaster account was
attributable to Burgoyne herself. He also concluded that distributions to
Burgoyne from the paymaster account exceeded those received by her ex-
husband. Grambush verified that Olson's accounting during the years in
question was accurate.
The arbitrator issued a 25-page award on December 24, 2014. All of
Burgoyne's claims were denied except her unopposed request for appointment of
a new paymaster. The award states,"The parties agree that a new Paymaster
should be appointed who does not also serve as an accountant for [the ex-
husband or his] corporation." Judgment in the amount of $224,124 was entered
against Burgoyne based on the excess funds she received, a successful counter-
claim asserted by her ex-husband, and his attorney fees and costs. The
arbitrator denied Burgoyne's requests to reconsider, modify, or vacate the award.
Burgoyne filed this suit against Olson on August 18, 2015. Her complaint
asserted that Olson's mismanagement of paymaster funds supported liability for
breach of fiduciary duty, malpractice, and conversion.
Olson denied liability. On November 20, 2015, she moved for summary
judgment dismissal of the suit. She invoked collateral estoppel, or issue
preclusion, arguing that the arbitration barred further litigation concerning her
performance as paymaster. She also argued that Burgoyne's claims lacked
proof and her suit was frivolous. In support of the motion, Olson submitted the
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arbitration award and the report prepared by Grambush, among other
documents.
Burgoyne opposed summary judgment. She relied primarily on a
declaration containing her own assertions about alleged misconduct by Olson.
She also attached the board of accountancy order.
Olson filed a motion to strike statements in Burgoyne's declaration on
grounds that they were not based on personal knowledge and amounted to
improper lay opinion. For example, she moved to strike Burgoyne's assertion
that Olson was still "de facto paymaster" and thus "still engaged in a conflict of
interest"; that Olson incorrectly attributed a tax liability to Burgoyne, resulting in a
"shortfall" to her capital balance and a "cash flow crisis"; and that "despite having
the requisite amount of total funds to make the mortgage payments on the two
houses, Joyce Olson misappropriated paymaster funds by expending those
funds on other items with less priority."
After a hearing, the trial court agreed to strike portions of the declaration
as requested by Olson. The court entered summary judgment against Burgoyne,
reasoning that collateral estoppel barred the suit and her claims lacked proof.
Burgoyne appeals the grant of summary judgment. She does not assign
error to the order striking portions of her declaration. We review a trial court's
summary judgment decision de novo. Christensen, 152 Wash. 2d at 305.
Olson maintains that collateral estoppel bars the suit. Collateral estoppel
applies only when the issues in the first and second action are identical in all
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respects. Lemond v. State Dep't of Licensing, 143 Wash. App. 797, 805, 180 P.3d
829 (2008).
There is overlap between the facts necessary to resolve the arbitration
and those relevant to this dispute. For instance, evidence that the paymaster
account lacked adequate funds and that Olson's accounting was accurate,
established during the arbitration, bears on whether Olson mismanaged
paymaster funds as alleged by Burgoyne in this suit. We are nonetheless
disinclined to apply collateral estoppel here because the arbitration focused on
Burgoyne's contract claims against her ex-husband. The arbitration did not
address Olson's potential tort liability to Burgoyne.
The collateral estoppel analysis used by the trial court was one of two
rationales for dismissal of Burgoyne's suit on summary judgment. We conclude
the court's second ground for dismissal, a failure of proof, is supported by the
record.
Burgoyne's claims of accounting malpractice and breach of fiduciary duty
require proof of causation and damages. Micro Enhancement Intl, Inc. v.
Coopers & Lybrand LLP, 110 Wash. App. 412, 433-34, 40 P.3d 1206 (2002);
Murphey v. Grass, 164 Wash. App. 584, 589-90, 267 P.3d 376 (2011), review
denied, 173 Wn.2d 1022(2012). Citing stricken portions of her declaration,
Burgoyne contends that Olson failed to adhere to the property settlement
agreement—namely, she did not pay debts in the specified order of priority—
leading to the foreclosure sales and increased tax liability for Burgoyne. The
record shows that debts went unpaid. But there is no proof that wrongdoing by
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No. 76610-4-1/6
Olson caused this result. Burgoyne fails to rebut the evidence that the
paymaster account simply lacked adequate funds; she and her ex-husband over-
spent their means.
To support the breach of fiduciary duty claim, Burgoyne cites the board of
accountancy conclusion that Olson had a conflict of interest. This evidence,
without more, does not show that Olson's conflict of interest harmed Burgoyne.
Burgoyne's conversion claim also lacks foundation in fact. A conversion is
willful interference with another's property. Pub. Util. Dist. No. 1 of Lewis County
v. Wash. Pub. Power Supply Sys., 104 Wash. 2d 353, 378, 705 P.2d 1195, 713
P.2d 1109 (1985). Burgoyne baldly asserts that Olson shortchanged her capital
balances. This assertion is unsubstantiated by the record. Burgoyne does not
rebut the evidence that she received excess distributions during Olson's tenure
as paymaster.
Burgoyne contends that additional discovery is necessary. But she was
required at the summary judgment stage to produce evidence from which a
reasonable fact finder could decide in her favor. She did not request a
continuance as permitted by CR 56(f).
Given the lack of evidence supporting essential elements of Burgoyne's
claims, summary judgment dismissal was proper. Young v. Key Pharm., Inc.,
112 Wash. 2d 216, 225, 770 P.2d 182(1989); Little v. Countrywood Homes, Inc.,
132 Wash. App. 777, 789-90, 133 P.3d 944, review denied, 158 Wash. 2d 1017
(2006).
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Affirmed.
WE CONCUR
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