Dagmar Von Heydt, Resp./x-app. V. Michelle Ebert & Jason Bruers, Apps/x-resps.

CourtCourt of Appeals of Washington
DecidedAugust 29, 2022
Docket82304-3
StatusUnpublished

This text of Dagmar Von Heydt, Resp./x-app. V. Michelle Ebert & Jason Bruers, Apps/x-resps. (Dagmar Von Heydt, Resp./x-app. V. Michelle Ebert & Jason Bruers, Apps/x-resps.) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dagmar Von Heydt, Resp./x-app. V. Michelle Ebert & Jason Bruers, Apps/x-resps., (Wash. Ct. App. 2022).

Opinion

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON DIVISION ONE

DAGMAR VON HEYDT, No. 82304-3-I (consolidated with No. 82401-5-I) Respondent/Cross Appellant,

v.

MICHELLE EBERT and JASON A. UNPUBLISHED OPINION BRUERS, wife and husband and the marital community composed thereof,

Appellants/Cross Respondents.

BOWMAN, J. — Michelle Ebert and Jason Bruers appeal jury verdicts for

fraud, unjust enrichment, breach of fiduciary duty, breach of contract, and

intentional infliction of emotional distress in favor of Ebert’s mother, Dagmar von

Heydt. Ebert and Bruers allege several evidentiary and instructional errors and

argue the trial court abused its discretion by denying their postverdict motions.

They also argue substantial evidence does not support the jury verdicts and

cumulative error resulted in an unfair trial. Von Heydt cross appeals the trial

court’s order denying her request for attorney fees. We remand to vacate the

jury’s verdict on the fraud claim as to Bruers but otherwise affirm.

FACTS

Ebert is von Heydt’s youngest child and only daughter. Ebert enjoyed a

close relationship with von Heydt growing up and into her early adult years. The

two spent considerable time together, particularly as Ebert started a family with

Citations and pin cites are based on the Westlaw online version of the cited material. No. 82304-3-I (consol. with No. 82401-5-I)/2

her husband David Ebert in the 1990s. David1 owned adult entertainment

businesses and met Ebert when she worked as a dancer in one of his clubs.

A federal prosecution for racketeering in July 2010 forced David out of the

adult entertainment industry. In 2013, Ebert and David divorced. But Ebert

stayed in the adult entertainment business. She took out a loan to buy a building

on 4th Avenue South in Seattle and started a limited liability company, MRAE

LLC, to manage the building. Ebert was the sole member of MRAE, which held

the building as its only asset. In January 2014, Ebert opened a nightclub on the

property called Kittens Adult Cabaret. Ebert owned Kittens through K-Cab LLC

(KCAB), another company she created with herself as its sole member. Kittens

rented space in the 4th Avenue South building from MRAE.

Since Kittens occupied about two thirds of the 4th Avenue South building,

Ebert decided to open a second business in the remaining space. She first

considered opening a lingerie store but changed her mind after receiving advice

from Kittens employee Xten Barton. Barton suggested Ebert make the space

into a restaurant and bar because Washington prohibits alcohol inside adult

entertainment clubs. A restaurant would complement Kittens, allowing patrons to

access food and beverages right next to the club. Ebert thought the idea was

“great.” She secured a $300,000 loan from a private lender and began

transforming the extra space into the Dog House Bar and Grill (TDH).

Ebert began dating Bruers in April 2014. Bruers worked in construction

and helped build TDH. But to operate as a bar, TDH needed a liquor license

1 We refer to David Ebert by his first name for clarity and intend no disrespect by doing

so.

2 No. 82304-3-I (consol. with No. 82401-5-I)/3

from the Washington State Liquor Control Board (WSLCB).2 Ebert had a prior

conviction that she thought could make it harder for her to get the license. But

mostly, Ebert worried the WSLCB would be suspicious if she applied for a liquor

license while also owning Kittens. So she asked von Heydt to apply for the

license.3 Von Heydt agreed. Ebert then arranged for her attorney to create TDH

LLC with von Heydt owning 90 percent and Barton owning 10 percent. In May

2014, TDH4 executed a lease with MRAE to pay rent of $5,000 per month for a

term of five years. In August, the WSLCB approved TDH’s liquor license.

According to von Heydt, Ebert also approached her with a plan to invest

money in TDH. Ebert told von Heydt the investment would give Ebert sufficient

funds to complete the bar and give von Heydt financial security through a share

of TDH’s profits. Ebert suggested von Heydt sell her Everett condominium,

which she owned mortgage free, and put the sale profits and other cash assets

into the business. In exchange, Ebert would give von Heydt an immediate place

to live on Ebert’s 20-acre property in Kent and later build von Heydt her own

home. Relying on Ebert’s promises, von Heydt listed her condominium for sale

in April 2014 and it sold in June. Von Heydt then moved to Ebert’s property.

Von Heydt transferred $110,000 from the condo sale into a joint account

she opened with Ebert. Ebert used money from the joint account to purchase a

“tiny house” for von Heydt. She placed it on the Kent property and von Heydt

lived there for the next year and a half. Von Heydt also transferred her cash

2 Now known as the Washington State Liquor Cannabis Board.

3 The WSLCB had issued von Heydt a liquor license before.

4 We refer to TDH and TDH LLC collectively as TDH.

3 No. 82304-3-I (consol. with No. 82401-5-I)/4

savings of $25,000 into the joint account and another $90,000 she received as a

payout from an investment with David.5 Von Heydt eventually added $10,000

she received from a different investment. By July 2014, von Heydt had deposited

$235,000 into the joint account to benefit TDH.

Ebert testified that the money von Heydt gave her for the benefit of TDH

was not an investment but a loan. Ebert said the original $300,000 loan she

secured plus $164,000 of her own money was not enough to cover all the costs

of opening TDH so she approached von Heydt for help. Ebert did not formally

document the loan from von Heydt. She said, “The only thing that I told my mom

is if I can borrow some money, I’d pay her back.” According to Ebert, von Heydt

was “holding” the liquor license until Ebert repaid the loan “whenever it’s

convenient.” Ebert also claimed von Heydt loaned her only $95,000. She

testified she “quickly” repaid von Heydt by October 2015 plus interest. Ebert said

she paid von Heydt $117,000 that she could “trace” and “at least $18,000 in

cash” that she kept track of “all in [her] head.” She later testified that she repaid

von Heydt a total of $170,000. Ebert also insisted von Heydt did not sell her

condominium to invest in TDH. She claimed von Heydt had been dissatisfied

with the condo for a long time and wanted to sell it so she could stop paying the

property assessments.

TDH opened to the public in September 2014. Shortly after, Ebert

accused Barton of stealing money from the business and fired him. Bruers then

5 Ebert asserted that the documents von Heydt produced to show the $90,000 was a

payout from von Heydt’s investment were all “forgeries” and “frauds” and that half the money belonged to her.

4 No. 82304-3-I (consol. with No. 82401-5-I)/5

quit his construction job and began working at TDH. In December 2014, Barton

signed over his 10 percent ownership of TDH to Bruers. Meanwhile, relations

between von Heydt, Ebert, and Bruers began to deteriorate rapidly. In January

2015, Ebert had von Heydt sign a “Memorandum of Gift” that relinquished her

share of TDH to Bruers, giving him 100 percent ownership at no cost.6 Von

Heydt later claimed she did not read the document before signing. She said she

routinely signed paperwork for TDH at Ebert’s request without question. Also in

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Dagmar Von Heydt, Resp./x-app. V. Michelle Ebert & Jason Bruers, Apps/x-resps., Counsel Stack Legal Research, https://law.counselstack.com/opinion/dagmar-von-heydt-respx-app-v-michelle-ebert-jason-bruers-washctapp-2022.