Opinion
No. 58502-9-I.
February 19, 2008.
Appeal from a judgment of the Superior Court for King County, No. 04-2-23558-8, Andrea A. Darvis, J., entered June 14, 2006.
Affirmed in part and remanded by unpublished opinion per Schindler, A.C.J., concurred in by Baker and Becker, JJ.
In his will, John Servold designated his stepdaughter, Iris Lerner, and his close friend, Mike Sutton, as the personal representatives (PRs) of his estate. After Servold's death, the superior court admitted the will to probate and appointed Lerner and Sutton as PRs with nonintervention powers and without bond. On Lerner's petition to remove Sutton as a PR, the court decided to remove both Lerner and Sutton as the PRs of the Estate and appointed Janet Somers as the successor PR with nonintervention powers and without bond. On appeal, Lerner challenges the decision to remove her as PR, arguing the court did not have jurisdiction to do so. Lerner also argues the court erred in appointing Somers to serve with nonintervention powers and without bond, ordering Lerner to relinquish a joint bank account with Servold, refusing to hear argument on the award of attorney fees, and entry of the attorney fees order. We conclude the court had jurisdiction to remove Lerner, appoint a successor PR with nonintervention powers and without bond, and order Lerner to relinquish the bank account. We also conclude the record supports the court's decision to award attorney fees to Sutton and Somers. However, under Mahler v. Szucs, 135 Wn.2d 398, 957 P.2d 632 (1998), we must remand for entry of findings of fact and conclusions of law to support the award of fees.
FACTS
In December 2003, John Servold entered the hospital for cancer treatment. After his release from the hospital in January 2004, Servold lived with one of his stepdaughters, Iris Lerner, and her spouse. On January 22, 2004, Servold executed a will, naming Lerner and his friend Mike Sutton as the personal representatives (PRs) of his estate. Servold left his entire estate to Sutton, Lerner, and Lerner's daughter, Sarah Thiessen. The will provides in pertinent part:
V.
I hereby give, devise and bequeath all the remaining estate and effects whatsoever and wheresoever located, both real, personal and mixed, of which I may die seized or possessed, to the following three people, in equal shares, share and share alike:
MIKE SUTTON of Snohomish, Washington
IRIS LERNER of Covington, Washington
SARAH LYNNE THIESSEN of Covington, Washington
In the event that any of the said three devisees shall not survive me, then in that event the share applicable to that deceased devisee shall lapse into the residuary and be distributed to the survivors in equal shares.
VI.
I hereby make, constitute and appoint MIKE SUTTON and IRIS LERNER as Co-Executors of this, my Last Will and Testament, to serve without bond, and I hereby give unto my said Executors full power and lawful authority to sell, convey, exchange, and encumber any and all of the real and personal property, in her [sic] discretion, in the manner provided for by the laws of the State of Washington for non-intervention Wills; it being my intention that this Will shall be carried into effect without any intervention or interference whatever by the Probate or any other court, except such as is specifically required by law for Wills of this character.
On April 5, 2004, Servold changed the beneficiary of his AIG life insurance annuity from Sutton to Lerner. On April 20, Servold added Lerner to his Bank of America account as a joint tenant with right of survivorship.
This is an issue in the linked case, Lerner v. AIG Annuity Insurance, et al., No. 58881-8 (Wash.Ct.App. January 18, 2008).
Servold died on May 6, 2004. Servold's largest asset was his $100,000 AIG annuity. His other assets consisted of his Bank of America account containing approximately $16,000, a motor home that Servold owned with his former girlfriend, June Struckmann, another recreational vehicle, and personal property.
On June 15, the superior court admitted Servold's will to probate and appointed Lerner and Sutton as co-PRs of the Estate with nonintervention powers and without bond.
In September, Sutton, individually and in his capacity as a PR, filed a lawsuit against Lerner alleging that she exerted undue influence over Servold, causing him to designate her as the beneficiary for his AIG annuity and as a joint tenant to his bank account. In response, Lerner and her spouse filed a counterclaim against Sutton seeking a declaration as to the ownership of the annuity and for defamation, invasion of privacy, tortious interference, and intentional and negligent infliction of emotional distress. Lerner also filed a cross-claim against AIG for breach of contract, bad faith, and violations of the Washington Consumer Protection Act. Because the Bank of America account was subject to probate, the court granted Sutton's motion to consolidate the lawsuit Lerner's counterclaim and cross-claim with the probate proceeding.
A number of Lerner's counterclaims against Sutton were dismissed before trial. Following the trial, a jury found Lerner had exerted undue influence over Servold in connection with changing the beneficiary for his AIG annuity and that Sutton did not defame Lerner.
On January 21, 2005, Lerner and Thiessen filed a petition to remove Sutton as a PR and appoint Thiessen to replace him. In the petition, Lerner and Thiessen (collectively "Lerner") specifically invoked the court's jurisdiction. The petition alleges that Sutton neglected his duties as a PR, caused "waste to Estate Assets for self-gain," and took positions "adverse to the Estate's interest." The petition alleges in pertinent part:
Sutton, absent any evidence, contends that Lerner unduly influenced her father causing him to change the beneficiary designations on his annuity and bank account. Sutton was one of several annuitant beneficiaries before the change. Sutton also contends that Lerner, a Registered Nurse, hastened her Father's death and was barred from any recovery under the " Slayer" statute. Sutton has attempted to file criminal charges against Lerner despite the total lack of any evidence, with the stated purpose of forcing Lerner to give up the annuity to Sutton. Sutton has also filed charges with Adult Protective Services and with her employer. Following Sutton's appointment as Co-Personal Representative, he has only done those things that serve his pecuniary interest in getting at the annuity that John Servold left to Lerner.
. . .
[Sutton] has not performed his fiduciary obligations and the animus he has against Lerner, as Co-PR makes joint administration of this Estate difficult at the very best. The Estate would be best served by the appointment of Sarah Thiessen as Co-PR and this appointment would be consistent with John Servold's designation of two personal representatives.
In late January, Lerner also filed and served two petitions for instructions, a motion to construe Servold's will, and a motion to disqualify counsel for Sutton and June Struckmann. In the pleadings, Lerner states "[t]here is disagreement between the Personal Representatives as to the duty owed the Estate." And in Lerner's declaration in support of the motion to construe, Lerner notes that both she and Sutton had claims against the Estate for attorney fees.
Lerner also sought to sue June Struckmann over the proceeds from the sale of the motor home Servold and Struckmann owned together.
James Hurt, Michael Sutton's counsel has recently claimed to bill over $11,800 for work performed on behalf of the Estate through December 2004, without any substantial benefit to the Estate, and we still have more than a year to go. James Gauthier, my counsel, has billed less than half that amount about $5200 and we have done all of the work.
Emphasis removed.
On February 11, the court heard argument on Lerner's petition to remove Sutton as a PR and ordered the removal of both Lerner and Sutton. The court ruled that by filing the petition, Lerner invoked the court's jurisdiction. Because Lerner and Sutton had a conflict of interest and "[e]ach of the Co-Personal Representatives has accused the other of breach of fiduciary duty, mismanagement of the Estate, and other bad acts," the court concluded that both Lerner and Sutton should be removed as PRs.
There currently is a civil lawsuit pending between Mr. Sutton and Ms. Lerner, which involves multiple claims by both of serious misconduct on the part of the other, all of which arise out of their relationship with Mr. Servold and their competing claims to Mr. Servold's property.
. . .
7. Both of the Co-Personal Representatives have conflicts of interest with each other and with their duty to efficiently and cost-effectively administer the Estate in accordance with the wishes of the Testator.
8. Given the multiple conflicts of interest between the Co-Personal Representatives, it is clear that they cannot work together to administer the Estate, and that each has contributed to the large volume of motions and litigation, which has resulted in waste of Estate assets, and extensive delay in closing this relatively modest Estate. . . .
9. Given the actions taken by both Ms. Lerner and Mr. Sutton, and the accusations each has levied against the other, it is clear to the court that it is impossible for either to properly carry out the fiduciary duties of a Personal Representative of Mr. Servold's Estate. . . .
This Estate is being mismanaged, and is in danger of waste as a result of the multiple conflicts between the co-Personal Representatives, and the removal of both is justified under RCW 11.28.250.
Sutton and Lerner agreed that Janet Somers should be appointed as the successor PR. The court appointed Janet Somers as the PR to serve with nonintervention powers and without bond.
On September 20, Lerner filed a notice of limited representation, stating that her attorneys would represent her in the civil litigation related to the AIG annuity but she would represent herself pro se in all matters concerning the probate proceedings and the Estate.
At a show cause hearing on October 10, the court denied Lerner's request to revoke the nonintervention powers of the successor PR and to require a bond. The court also denied Lerner's motion to sever and assign the probate to the ex parte department because the litigation and probate were inextricably intertwined. In a separate order, the court confirmed jurisdiction over the consolidated cases and approved Lerner's request concerning limited representation.
In February 2006, the court approved Somers's administrative plan for the Estate and directed Lerner to provide an accounting of the Bank of America account. In April, the court granted Sutton's motion for payment of attorney fees related to his role as a PR. Later that same month, the court found the Estate was insolvent. The court also ruled that Lerner's accounting of the Bank of America account was "not sufficient under normal accounting principles," and directed Lerner to relinquish the balance remaining in the account. In addition, the court agreed that Somers did not have to participate in the lawsuit between Sutton and Lerner.
Lerner appeals 20 different orders entered between September 30, 2004 and June 14, 2006.
Lerner assigns error to only 12 orders and Lerner does not provide argument to support most the assignments of error. A conclusory statement followed by a citation to one or more cases, without explaining how the case applies, does not amount to argument supported by authority. An assignment of error without argument or authority waives the issue on appeal. Bercier v. Kiga, 127 Wn. App. 803, 824, 103 P.3d 232 (2004), rev. denied, Dep't of Social and Health Services v. Green (In re AIG), 156 Wn.2d 1013, 132 P.3d 145 (2006).
ANALYSIS
Lerner's primary contention on appeal is that the superior court did not have jurisdiction to remove her as a PR and appoint a successor PR. Lerner also challenges the court's decision approving the successor PR's administrative plan for the Estate.
We reject Somers's argument that we cannot review the orders entered more than 30 days before Lerner filed a notice of appeal. In general, timely appeal of a final judgment is sufficient to obtain review of prior rulings and orders in the case. Fox v. Sunmaster Products, Inc., 115 Wn.2d 498, 504, 798 P.2d 808 (1990).
Jurisdiction
Lerner asserts the superior court did not have jurisdiction to remove her as a PR because only certain individuals can petition for removal under RCW 11.68.070. Lerner also claims the court did not give her the 20-day statutory notice required to remove her as a PR. Whether a court has jurisdiction is a question of law that we review de novo. Crosby v. Spokane County, 137 Wn.2d 296, 301, 971 P.2d 32 (1999).
Sutton argues that Lerner waived any defects in notice by not raising the issue before the superior court. But a party may raise "lack of trial court jurisdiction" for the first time on appeal. RAP 2.5(a)(1); Skagit Surveyors Eng'rs, LLC v. Friends of Skagit County, 135 Wn.2d 542, 556, 958 P.2d 962 (1998).
When the court appointed Lerner and Sutton as PRs with nonintervention powers, the court lost jurisdiction over the probate proceedings.
Superior court jurisdiction over nonintervention probate is statutorily limited. [O]nce the decedent dies, the personal representative applies for an order of solvency, and the court has jurisdiction to grant or deny the order. However, once an order of solvency is entered the court loses jurisdiction. The court may regain jurisdiction only if the executor or another person with statutorily conferred authority invokes jurisdiction.
In re Estate of Jones, 152 Wn.2d 1, 9, 93 P.3d 147 (2004) (citing In re Estate of Coates, 55 Wn.2d 250, 255-56, 347 P.2d 875 (1959)).
But when Lerner, as a PR and as a beneficiary under the will, filed a petition to remove Sutton as PR, the court regained jurisdiction over the estate. And contrary to Lerner's claim that she did not invoke the court's jurisdiction, the petition specifically invokes the jurisdiction of the court:
The Superior Court has jurisdiction over nonintervention probates only if the executor, or another person with statutorily conferred authority invokes jurisdiction. In re Estate of Coates, 55 Wn.2d 250, 255-56, 347 P.2d 875 (1959), citing In re Estate of Peabody, 169 Wash. 65, 13 P.2d 431 (1932). Pursuant to RCW 11.68.070, Lerner and Thiessen [as named beneficiaries] may invoke the Court's jurisdiction.
When a person with statutory authority invokes jurisdiction, the court has plenary power and authority over the probate of the estate. "[B]oth by constitution and by statute the superior court, a court of general jurisdiction and as part of that jurisdiction, has cognizance of all matters of probate with power to exercise all of the inherent functions of a court of general jurisdiction in disposing of such matters." In re Olson's Estate, 194 Wn. 219, 226, 77 P.2d 781 (1938).
The court's plenary power over probate matters expressly includes the power to remove and replace a PR. "The court appointing any personal representative shall have authority for any cause deemed sufficient, to cancel and annul such letters and appoint other personal representatives in the place of those removed." RCW 11.28.160. "If the personal representative has not faithfully discharged said trust or is subject to removal for any reason specified in 11.28.250, RCW 11.68.070 allows the court to intervene and to remove or restrict the powers of a nonintervention personal representative." In re Jones, 152 Wn.2d at 9. RCW 11.28.250 also specifically provides in pertinent part:
Whenever the court has reason to believe that any personal representative has wasted . . . or mismanaged, or is about to waste . . . the property of the estate committed to his charge, . . . or has wrongfully neglected the estate, or has neglected to perform any acts as such personal representative, or for any other cause or reason which to the court appears necessary, it shall have power and authority, after notice and hearing to revoke such letters. The manner of the notice and of the service of the same and of the time of hearing shall be wholly in the discretion of the court, and if the court for any such reasons revokes such letters the powers of such personal representative shall at once cease, and it shall be the duty of the court to immediately appoint some other personal representative, as in this title provided.
The court order removing Lerner and Sutton states that the "Estate is being mismanaged, and is in danger of waste as a result of the multiple conflicts between the co-Personal Representatives, and the removal of both is justified under RCW 11.28.250." We conclude that the court had jurisdiction to remove Lerner and Sutton and appoint Somers as PR.
Lerner does challenge the court's reasons for removal.
Lerner also claims the court violated due process by removing her as a PR without giving her 20 days notice as required by RCW 11.96A.110. RCW 11.96A.110 provides in pertinent part: "[I]n all judicial proceedings under this title that require notice, the notice must be personally served on or mailed to all parties or the parties' virtual representatives at least twenty days before the hearing on the petition unless a different period is provided by statute or ordered by the court." Because it is undisputed that all parties, including Lerner, received 20-day notice of her petition to remove Sutton, Lerner's argument is without merit.
The two cases that Lerner relies on are distinguishable. In State ex rel. Mylroie v. Superior Court for King County, 54 Wn.2d 487, 341 P.2d 876 (1959), the petition to remove a PR did not comply with the statutory notice requirement. In In re Fellin, there was no dispute that the beneficiary did not comply with the notice requirement to remove the PR. Here, by contrast, the statutory requirement of 20-day notice was met when Lerner filed and served her motion to remove Sutton.
Lerner also challenges the court's order removing her a PR on the grounds that the court violated CR 52(c) and KCLR 40(d)(2) by not serving Lerner with a copy of its proposed findings and conclusions at least five days prior to entry. On February 11, 2005, the court in an oral ruling removed Lerner and Somers and the parties agreed on Somers as the successor PR. Seven days later, on February 18, 2005, the court signed the findings and conclusions. Because the parties were aware of the court's findings and conclusions seven days before the court signed them, Lerner cannot show prejudice. Seidler v. Hansen, 14 Wn. App. 915, 920, 547 P.2d 917 (1976).
Administration of the Estate
Relying on RCW 11.68.060, a statute that by its terms only applies when the PR "dies, resigns, or otherwise becomes disabled," Lerner argues the court had no authority to appoint Somers with nonintervention powers. Here, because RCW 11.68.060 is inapplicable, RCW 11.28.280 governs. RCW 11.28.280 provides in pertinent part:
if a personal representative of an estate dies or resigns or the letters are revoked before the settlement of the estate, . . . the successor personal representative shall perform like duties and incur like liabilities as the preceding personal representative, unless the decedent provided otherwise in a duly probated will or unless the court orders otherwise. A succeeding personal representative may petition for nonintervention powers under chapter 11.68 RCW.
Under RCW 11.28.280, because neither the will nor the court directed otherwise, the successor PR had the same power to "perform like duties and incur like liabilities," as the previous PRs who were appointed with nonintervention powers and without bond.
Lerner also asserts that the court erred in granting Somers nonintervention powers because the Estate was insolvent. When Lerner and Sutton were appointed as the PRs in June 2004, the court specifically found the Estate was solvent. But Lerner argues that she told the court that the Estate was probably insolvent when Somers was appointed in February 2005. For example, Lerner stated "I fear the Estate may be facing insolvency before closing" and that attorney fees might "further contribute to the Estate's potential insolvency." Because Lerner's vague and speculative statements are not supported by the record and did not establish the Estate was insolvent when Somers was appointed, the court did not err in granting Somers nonintervention powers.
Lerner's argument that the court erred in denying her motion to revoke Somers's nonintervention powers because Somers violated her duty as PR "to settle the estate, . . . as rapidly and as quickly as possible, without sacrifice to the probate or nonprobate estate," is waived because it is not supported by argument or authority. Bercier v. Kiga, 127 Wn. App. 809, 824, 103 P.3d 232 (2004); RAP 10.3(a)(5). Lerner also assigns error to the court's order denying her motion for reconsideration. But again, Lerner provides no argument as to why the court's decision was an abuse of discretion. Coggle v. Snow, 56 Wn. App. 499, 504, 784 P.2d 554 (1990) (we review a ruling on a motion for reconsideration for abuse of discretion). Lerner also challenges the court's order allowing Somers "to not engage in matters relating [to the] civil litigation" between Sutton and Lerner that because a PR has a right to pursue claims on behalf of an estate. Because Lerner provides no argument or citation to authority to support her assertion, she waives consideration of the assignment of error. Bercier, 127 Wn. App. at 826. Nonetheless, the court did not abuse its discretion. In re Estate of Jones, 152 Wn.2d 1, 19, 93 P.3d 147 (2004) ("it is the court's job to guard against waste or loss to the estate").
Lerner also claims the court erred in appointing Somers to serve without bond. But RCW 11.28.185 specifically allows the court to waive the bond requirement. RCW 11.28.185 provides in pertinent part that, "unless waived by the court, the personal representative shall give such bond or other security, in such amount and with such surety or sureties, as the court may direct." Bank Account
In April 2006, the court marshaled the Estate assets and ordered Lerner to relinquish the Bank of America account because the claims against the estate "have an aggregate face value that, when added to the other debts and expenses of greater priority under applicable law, have caused this estate to be insolvent."
Lerner argues that the court erred in ordering her to relinquish the bank account.
RCW 11.18.200 provides in pertinent part:
(1) Unless expressly exempted by statute, a beneficiary of a nonprobate asset that was subject to satisfaction of the decedent's general liabilities immediately before the decedent's death takes the asset subject to liabilities, claims, estate taxes, and the fair share of expenses of administration reasonably incurred by the personal representative in the transfer of or administration upon the asset. . . .
(b) A beneficiary of property held in joint tenancy form with right of survivorship, including without limitation United States savings bonds or similar obligations, takes the property subject to the decedent's liabilities, claims, estate taxes, and administration expenses as described in subsection (1) of this section to the extent of the decedent's beneficial ownership interest in the property immediately before death.
Based on RCW 11.28.200, we conclude the court did not err in ordering Lerner to relinquish the account.
Lerner asserts the court should have determined the bank account's "fair share" of administration expenses and allowed her to keep the rest. But because Lerner presents no argument or authority on how to determine "fair share," her agreement is waived. Bercier, 127 Wn. App. at 826.
Recusal
Lerner also asserts the judge erred in not recusing from the case because of an expressed bias against Lerner as a pro se litigant. The Code of Judicial Conduct Canon 3(D)(1) provides that "[j]udges should disqualify themselves in a proceeding in which their impartiality might reasonably be questioned, including but not limited to instances in which: (a) the judge has a personal bias or prejudice concerning a party. . . ." Recusal is required if "the judge's impartiality might reasonably be questioned [by] a reasonable person [who] knows and understands all the relevant facts."
Sherman v. State, 128 Wn.2d 164, 206, 905 P.2d 355 (1995).
In approving Lerner's request to have her attorneys represent her in the litigation with Sutton and AIG but to represent herself in the probate proceeding, the judge correctly observed that "limited representation can create mischief; that Ms. Lerner should be aware other counsel P.R. may be reluctant to, or unable to speak to her, may slow things down." Other than characterizing the court's statement as "negative," Lerner does not explain how the court's observation demonstrates bias. A reasonable person, knowing and understanding the relevant facts would have no reason to question the impartiality of the judge.
Attorney Fees
Lerner contends that the court violated her due process rights by refusing to hear oral argument on attorney fees. Instead of oral argument, the court gave both sides the opportunity to present written submissions on the issue of attorney fees. Oral argument is not a due process right. Hanson v. Shim, 87 Wn. App. 538, 551, 943 P.2d 322 (1997). "Due process requirements are not technical, nor do they require any particular form or procedure. It is only required that a party receive proper notice of proceedings and an opportunity to present his position before a competent tribunal." Parker v. United Airlines, Inc., 32 Wn. App. 722, 728-29, 649 P.2d 181 (1982) (citation omitted).
Lerner also contends that because the court did not engage in an independent inquiry or entering findings and conclusions as required by Mahler v. Szucs, 135 Wn.2d 398, 957 P.2d 632 (1998), the court abused its discretion in awarding attorney fees to Somers and Sutton and requiring Lerner to pay a portion of the fees. The court must enter independent findings and conclusions to support the award of fees and cannot simply rely on the billing records and pleadings of the prevailing party. Mahler, 135 Wn.2d at 435. Although the court found that the attorney fees awarded to Somers and Sutton were "reasonable," it did not enter findings and conclusions. While there is no challenge to the reasonableness of the fees, because the court did not enter findings and conclusions to support the award of attorney fees, we must remand. Upon compliance with RAP 18.1, we award Somers and Sutton attorney fees on appeal under RCW 11.96A.150. On remand, the superior court shall also determine the amount of attorney fees on appeal. Accordingly, the affidavit required under RAP 18.1(d) shall be filed in the superior court.
We affirm the court's order but remand both for entry of findings of fact and conclusions of law on the award of attorney fees and the determination of fees on appeal.
WE CONCUR: