Estate Of Doris Mathews

CourtCourt of Appeals of Washington
DecidedDecember 12, 2017
Docket48458-7
StatusUnpublished

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Bluebook
Estate Of Doris Mathews, (Wash. Ct. App. 2017).

Opinion

Filed Washington State Court of Appeals Division Two

December 12, 2017 IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

DIVISION II TED SPICE, No. 48458-7-II

Appellant, UNPUBLISHED OPINION

v.

ESTATE OF DORIS MATHEWS,

Respondent.

BJORGEN, C.J. — In 2004 Ted Spice and Doris Mathews formed a real estate

development company, Plexus Investments LLC, and Mathews quitclaimed several parcels of

property to the LLC and Spice. After Mathews’ death in 2009, Spice filed two creditor’s claims

against the Estate of Doris Mathews (Estate), one of which ripened into a lawsuit by Spice which

the trial court decided in the Estate’s favor on summary judgment.

Spice appeals, arguing that the trial court erred by granting the Estate summary judgment

dismissing his claims for (1) contribution for property taxes paid on co-owned property and (2)

breach of fiduciary duty arising from the Estate’s (a) misappropriation of funds, (b) failure to

contribute to the LLC, and (c) waste. He also argues that the trial court erred by denying his

motions for a continuance and for reconsideration and by awarding attorney fees to the Estate.

Both Spice and the Estate request attorney fees on appeal.

We hold that Spice’s appeal is timely and that the record on summary judgment shows no

genuine dispute of material fact as to Spice’s claims for (1) contribution for paid property taxes,

(2) misappropriation of funds, and (3) failure to contribute to the LLC, but that a genuine issue of

material fact exists as to (4) whether the Estate breached its quasi-fiduciary duty to Spice by No. 48458-7-II

allowing waste to occur at co-owned properties. We also hold that the trial court did not err by

denying Spice’s motions for a continuance and for reconsideration. Consequently, we reverse

the grant of summary judgment on the issue of breach of fiduciary duty by allowing waste, and

we reverse the trial court’s award of attorney fees to the Estate. We affirm the remainder of the

trial court’s summary judgment order and remand for additional proceedings. Finally, we

decline to award attorney fees on appeal to either party

FACTS

Mathews died on December 8, 2009. Prior to her death, Mathews and Spice created

Plexus Investments LLC (LLC), a real estate development company, and were its only members,

with Spice holding a 51 percent interest and Mathews holding a 49 percent interest.

On January 8, 2010, Donna E. DuBois was appointed as personal representative of

Mathews’ estate. On April 26, Spice filed a creditor’s claim against the Estate for $8,000,000

based on a promissory note executed between himself and Mathews. The Estate rejected Spice’s

creditor’s claim on July 7, and on August 2 Spice filed a lawsuit against the Estate to enforce the

promissory note and creditor’s claim under a breach of contract theory.

On July 28, 2011, Spice filed his first amended complaint, alleging that the Estate was

liable for breach of contract, conversion, tortious interference with a business expectancy, breach

of fiduciary duty, and frivolous litigation. The dispute proceeded to trial and, on September 17,

2012, the jury apportioned ownership interest in several disputed properties that were the subject

of the litigation between Spice and the Estate. For the parcels relevant to this appeal and

discussed in this opinion, Spice was awarded a 25 percent interest and the Estate a 75 percent

interest, except for the parcel located at 11305 58th Street Court East, which was awarded

2 No. 48458-7-II

wholly to the Estate.1 On appeal, we affirmed the trial court, holding that neither party was

substantially prevailing for purposes of attorney fees and that Spice did not preserve his

remaining claims on appeal. Spice v. DuBois, 192 Wn. App. 1054, 4, 6-7 (2016) (unpublished).

On December 21, 2012, the trial court granted Spice’s motion for an order appointing a

property manager for the parcels at 11305 58th Street Court East, 11003 58th Street Court East,

number 1, 2, and 3 triplexes, 11004 58th Street Court East, 11007 58th Street Court East, 11011

58th Street Court East, and three trailers identified as 11010A, 11010B, and 11010C. The court

ordered the Estate to hire a property management company on or before January 1, 2013 and that

the cost of the property management “shall be split 75 [percent]—25 [percent] pursuant to

ownership until further order of the court.” Clerk’s Papers (CP) at 67. Then, on March 29, 2013

the trial court issued an order restraining Spice from involvement in any property management

duties for any of the properties that were subject to the court’s December 21, 2012 order. The

trial court noted in its March 29, 2013 order that the properties were then being managed by SJC

Management Group.

On April 16, 2013, Spice filed another creditor’s claim against the Estate seeking

$2,000,000 based on work he did managing and developing property for Mathews between 2003

and 2012. Spice also asserted claims on behalf of several other individuals who had assigned

their claims to Spice, which totaled $337,000. The Estate rejected all of Spice’s claims.

1 The record suggests that Spice subsequently gained a 33 percent interest in this property. This, however, plays no role in the analysis of the present appeal.

3 No. 48458-7-II

On June 5, 2013 Spice and another claimant, Jeffrey Payne, each filed a lawsuit to pursue

their claims against the Estate. Spice’s lawsuit sought damages based upon alleged oral

contracts between Spice and Mathews.

At some point during 2013 or 2014, a pipe burst in one of the three triplex units at 11003

58th Street Court East. Spice amended his complaint on December 16, 2014 to add the

following claims: (1) contribution for property taxes paid on co-owned property, (2) breach of

fiduciary duty by the Estate for failing to make contributions to the LLC so that the LLC could

pay off debts to Spice, (3) breach of fiduciary duty by misappropriating funds from co-owned

properties, and (4) breach of fiduciary duty by committing waste with regard to co-owned

properties.2 On April 6, 2015, the trial court issued an order consolidating Spice’s and Payne’s

cases.

On September 17, 2015, the Estate filed a motion for summary judgment requesting

dismissal of all of Spice’s and Payne’s claims. In her declaration, DuBois stated that SJC had

managed the 11003 property from January 1, 2013 until March 31, 2014 and that she only

discovered the water damage on April 3, 2014, after inspecting the property. Spice opposed the

motion and requested a continuance in order to conduct further discovery. The trial court denied

the continuance.

At the summary judgment hearing, Spice offered the following evidence: (1) an e-mail

regarding Spice’s attorney nonsuiting two lawsuits in 2014, (2) an e-mail between SJC and

Spice, (3) a loan default notice from Bank of America, (4) Elite Tax and Financial Services’

2 Spice’s amended complaint also included a claim for waste independent of the waste claim associated with the alleged breach of fiduciary duty. On appeal, Spice argues only that the Estate breached its fiduciary duty by committing waste.

4 No. 48458-7-II

accounting notes, (5) Spice’s work history regarding work performed for Mathews, and (6)

Payne’s work history regarding work performed for Mathews.

On October 30, 2015 the superior court granted summary judgment in the Estate’s favor

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