Opinion
No. 29944-5-II
Filed: August 31, 2004 UNPUBLISHED OPINION
Appeal from Superior Court of Clark County. Docket No: 01-3-01024-4. Judgment or order under review. Date filed: 02/04/2003. Judge signing: Hon. Diane Marie Woolard.
Counsel for Appellant(s), Kenneth V. Jr Hoffman, Attorney at Law, 800 N Devine Rd, Vancouver, WA 98661-6965.
Counsel for Respondent(s), Albert III Armstrong, Purcell Smith Adams PLLC, PO Box 6699, Lynnwood, WA 98036-0699.
Dan Mullen appeals from a trial court order awarding him $2,000 of a $8,645.43 profit from the sale of a house he owned as a tenant in common with his ex-wife, Jeanine Swann. We reverse and remand
Facts
Swann and Mullen married on May 21, 1999, and dissolved their marriage on May 1, 2002. The decree of dissolution provided:
The marital residence located at 505 NW 133rd St., Vancouver, Clark County, Washington shall be sold forthwith. The proceeds shall be used to pay the equitable lien of Gladys G. Smith in the amount of $124,000 plus related closing costs. Any proceeds remaining shall be shared equally between the parties. If no proceeds remain and there is a deficiency owed to the lienholder Gladys G. Smith, such deficiencies shall be the sole responsibility of the Petitioner [Mullen] and he shall hold the Respondent Jeanine Swann harmless for any such deficiencies.
When Mullen and Swann married, Mullen's grandmother, Gladys Smith, lent Mullen and Swann the money to pay off their home mortgage. They signed a promissory note and made some payments to Smith.
All later pleadings and correspondence refer to Gladys Smith's lien amount as $125,000.
Clerk's Papers (CP) at 9.
On July 5, 2002, Mullen received a $128,000 offer to purchase the house with a 5:00 p.m. July 12 acceptance date. Mullen's attorney had the earnest money agreement hand delivered to Swann's attorney on July 10. Swann's attorney acknowledged receipt and discussed it with Swann. Swann neither signed the agreement nor indicated that she accepted the offer. The potential buyer formally revoked the offer on July 15. Mullen moved for an order directing disposition of the home to Smith due to Swann's interference with Mullen's attempts to sell the house.
According to Mullen, Swann refused to engage a realtor and rejected an offer that Mullen found acceptable. Although it is not clear from the record, it appears that the court denied Mullen's motion.
On August 8, Mullen wrote to Swann and indicated that he would deed the property to Smith in lieu of foreclosure. In an August 22 letter, Swann offered to pay Smith $125,000 and to purchase Mullen's interest in the home for $2,000. On August 26, Mullen wrote that he was 'in agreement,' but wanted assurances about securing Smith's interest in the property. On August 29, Mullen sent a proposed earnest money agreement. Swann altered and signed Mullin's promissory note and, on September 4, sent it, along with her signed purchase and sale agreement, in a letter to Mullen agreeing to pay him $2,000 and Smith $125,000.
The purchase and sale correspondence comprises letters to and from the parties' counsel.
Mullen contends that this 'acceptance' did not mirror his offer, because Swann altered the documents significantly by deleting or rewriting portions. CP at 16.
Swann's letter may have crossed in the mail with one sent by Mullen's attorney on September 3, noting that when Smith visited the property, she saw an elderly stranger picking apples. The man told Smith that his son was buying the property. In the letter, Mullen's attorney expressed concern that Swann's offer to pay Smith and Mullen was a ruse and that Swann intended to 'undermine the clear provision in the divorce decree which states that the property is to be sold, Gladys Smith paid, and the net proceeds divided between Ms. Swain [sic] and Mr. Mullen.' CP at 87. Mullen then 'withdr[ew] the verbal offer to sell the home.' CP at 116. In a later letter, Mullin's counsel noted that if Swann was acting as a 'straw man' in agreeing to buy the house while negotiating with another to sell it, she was acting 'in direct contravention of the decree.' CP at 119.
Apparently, in August 2002, Swann had negotiated with Jim Ulrich to purchase the property for $136,000. In a declaration, Ulrich said that on August 15, 2002, he began talking to Swann about purchasing the home. According to Ulrich, he made offers on August 18 and 22 and Swann accepted a $136,000 offer on August 23. On September 5, Swann formally accepted Ulrich's $136,000 offer.
We assume that the elderly stranger Smith saw is Ulrich's father.
Ulrich initially claimed that they spoke in September 2002. But in a later declaration, he said admitted an error and said that the discussion took place in August 2002.
Swann then sought a court order requiring Mullen to sell the property to her. The trial court decided that the parties' August correspondence obligated Mullen to sell his interest in the property for $2,000. Mullen asked the court to reconsider, arguing that: (1) Swann's acceptance did not mirror his offer to sell; (2) Swann engaged in a ruse to allow her to sell the property to Ulrich; (3) Swann breached her fiduciary duty as a tenant in common; and (4) he was entitled to one-half the sale profits. The trial court declined to reconsider and entered an order for Swann to pay Mullen $2,000 for his interest in the residence and to pay Smith $125,000 for her interest in the property.
On Mullen's renewed motion for reconsideration, the trial court again declined to reconsider, noting that '[t]he agreement reached between the parties through correspondence before, on and after August 22nd, 2002, is ratified to the end that Respondent, Jeanine Swann be the ultimate purchaser of the home.' CP at 146.
Swann sold the house to Ulrich, realizing an $8,472.02 profit after repaying Smith. The court placed the proceeds in an interest-bearing escrow account. It then ordered disbursal of $8,645.43 by awarding Mullen $2,250 from the sale profits and awarding the remaining $6,395.43 to Swann. Mullin appeals.
We assume that the amount reflects interest accrued on the proceeds held in escrow.
The court also ordered that Mullen 'be awarded the sum of $250 from the net house sale proceeds for his costs associated with the deposition due to [Swann] not timely turning over their copy of the Earnest Money Agreement with Mr. Ulrich.' CP at 33.
The court stayed the order pending appeal.
ANALYSIS
Mullen first contends that the trial court erred in not ruling that Swann had a legal duty to disclose the Ulrich offer to him. In its findings and conclusions entered with its proceeds disbursal order, the court found that (1) Ulrich did not tender an earnest money agreement before August 22, 2002, and (2) the parties' correspondence comprised an agreement for Swann to purchase the residence. It concluded that Mullen should be awarded $2,250 and Swann awarded the remainder of the profit.
Mullen also assigns error to the trial court's finding of fact that Swann was the ultimate purchaser of the home. He does not provide argument or authority on this point, and we do not address the issue, except as necessary to his other arguments. RAP 10.3(a)(5); City of Bremerton v. Sesko, 100 Wn. App. 158, 162, 995 P.2d 1257 (holding that where an appellant fails to support argument with relevant authority, we may decline to address it), review denied, 141 Wn.2d 1031 (2000).
We begin by noting that the parties' decree of dissolution made them tenants in common, and courts have a duty not to award property to parties in a dissolution action as tenants in common. Stokes v. Polley, 145 Wn.2d 341, 347, 37 P.3d 1211 (2001) (citing Bernier v. Bernier, 44 Wn.2d 447, 449-50, 267 P.2d 1066 (1954)). To avoid this situation, 'courts should award the property itself to one spouse and an offsetting monetary award to the other spouse.' Stokes, 125 Wn.2d at 347-48. The trial court recognized this problem and at one of its hearings, the trial court said, 'Remind me never to sign an order that does this.' Report of Proceedings at 39.
We turn next to the question whether Swann had a co-tenant duty to disclose Ulrich's offers before she offered to buy the property from Mullen. In its findings, the trial court focused on Ulrich not having tendered an earnest money agreement before August 22, 2002 (the date Swann's attorney wrote to Mullen's attorney, offering to purchase the property). In doing so, the trial court engaged in the wrong inquiry.
A similar issue faced the court in Douglas v. Jepson, 88 Wn. App. 342, 349, 945 P.2d 244 (1997), review denied, 134 Wn.2d 1026 (1998). In Douglas, the third party purchaser first contacted Douglas to purchase the property on January 5, 1994. 88 Wn. App. at 346. Douglas negotiated to buy Jepson's [his co-tenant's] interest in the property on that same day. Douglas, 88 Wn. App. at 346. Douglas finalized the sale to the third party purchaser 'approximately five months after Jepson sold his interest to Douglas.' Douglas, 88 Wn. App. at 346.
The Douglas court identified that co-tenants have disclosure duties when they are engaged in a joint venture, such as one to sell. 88 Wn. App. at 344. A duty to disclose may also exist 'where one co-tenant attempts to take an inequitable advantage of another co-tenant.' Douglas, 88 Wn. App. at 349. Here, the decree established Swann and Mullen's joint undertaking, that is, to sell the property, repay Smith, and equally share any profit. Absent evidence to the contrary, we assume a joint venture. Thus, Swann had a duty to disclose offers and acceptances. Douglas, 88 Wn. App. at 349. She breached that duty when she failed to disclose Ulrich's August 18 and 22 offers before she sought to finalize her purchase from Mullen. The remedy is remand for equal disbursal of the sale profits under the decree.
Swann contends that her initial offers to purchase Mullen's interest in the property and her and Mullen's efforts to sell the property individually is evidence that there was no understanding between the parties that the sale would be secured together. But Mullen disclosed his attempts to sell the property to Swann throughout the process.
Even if the decree had not made Swann and Mullen joint venturers, Swann's sale to Ulrich constitutes an attempt to take 'inequitable advantage' because Swann circumvented Mullen in the transaction for her own profit. Douglas, 88 Wn. App. at 349 (court refused to allow one co-tenant sale of land to prejudice the second co-tenant where the first co-tenant purchased the property in a foreclosure sale following the co-tenants failing to pay certain taxes and following the first co-tenants failing to forward the delinquency notice to the second co-tenant) (citing Woodard v. Carpenter, 31 Wn.2d 271, 271-75, 195 P.2d 983 (1948)).
The parties do not appeal the $250 award to Mullen for deposition costs. That award will not be disturbed.
Mullen further contends that Swann failed to abide by the court's order to 'cash out Mr. Mullen's interest' within 60 days of October 29, 2002. Appellant's Brief at 10. Swann argues and Mullen concedes that this issue is not properly before us under RAP 5.2(e).
RAP 5.2(e) states in part:
Effect of Certain Motions Decided After Entry of Appealable Order. A notice of appeal of orders deciding certain timely motions designated in this section must be filed in the trial court within (1) 30 days after the entry of the order, or (2) if a statute provides that a notice of appeal, a petition for extraordinary writ, or a notice for discretionary review must be filed within a time period other than 30 days after entry of the decision to which the motion is directed, the number of days after the entry of the order deciding the motion established by the statute for initiating review.
Finally, Swann requests attorney fees under RCW 26.09.140 (financial need), RAP 18.1 (attorney fees and expenses), and RAP 18.9 (frivolous appeal). We decline to award fees under any of these provisions.
Reversed and remanded for distribution of the court-held proceeds from the sale of the residence consistent with this opinion.
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 pursuant to RCW 2.06.040, it is so ordered.
MORGAN, P.J. and HUNT, J., concur.