Fitzgerald v. Mountain-West Resources, Inc.

294 P.3d 720, 172 Wash. App. 437
Court of Appeals of Washington·Decided October 22, 2012·No. No. 66954-1-I·Published·Cited by 28 cases

Opinion

Dwyer, J.

¶1 — Mountain-West Resources Inc. appeals from the superior court’s determination that its creditor claims against the estate of Michael Fitzgerald (Estate) are time barred. Mountain-West asserts that the court erred by determining that it was not a reasonably ascertainable creditor without first permitting the corporation to depose the personal representative (PR) of the Estate regarding her knowledge of its claims. However, because Mountain-[441]*441West gave no indication of what evidence it hoped to uncover if given additional time to conduct such discovery, the superior court did not abuse its discretion by denying Mountain-West’s request for a continuance. Nor did the court err by determining that Mountain-West had failed to present sufficient evidence to overcome the presumption— arising as a result of the PR’s reasonable review of Fitzgerald’s correspondence and financial records — that Mountain-West was not a reasonably ascertainable creditor. As it is undisputed that Mountain-West failed to present its claims within the time period allotted for an unascertainable creditor to do so, the superior court did not err by ruling that Mountain-West’s claims were time barred. Because Mountain-West’s additional contentions are also without merit, we affirm.

I

¶2 In 2008, Tronox Worldwide LLC filed a lawsuit against Fitzgerald in Nevada. The complaint asserted several causes of action based upon allegedly fraudulent conduct by Fitzgerald during his employment as a geological engineer for the Kerr-McGee Corporation, the predecessor in interest to Tronox. This misconduct by Fitzgerald was alleged to have occurred between 1963 and 1969.

¶3 Fitzgerald passed away on August 11, 2009. Fitzgerald’s will was thereafter admitted to probate in King County Superior Court, and his widow was confirmed as the PR of his estate. A notice to creditors was published in the Seattle Daily Journal of Commerce on October 14,2009, October 21, 2009, and October 28, 2009. In addition, the PR performed a review of Fitzgerald’s correspondence and financial records in an effort to ascertain creditors with potential claims against the Estate. The only creditor discovered by the PR was Tronox. A copy of the notice to creditors was mailed directly to Tronox’s corporate headquarters in Oklahoma City on January 14, 2010.

[442]*442¶4 Tronox thereafter filed a petition in King County Superior Court — as required by RCW 11.40.110 — to substitute the PR as the defendant in the ongoing Nevada action. In addition, Tronox submitted a creditor claim to the Estate. Tronox explained that this claim was made in order to ensure that the corporation could maintain its action in Nevada and “to give the [PR] the opportunity ... to allow the claim, together with costs.”1

¶5 On October 15, 2010, the Nevada trial court dismissed Tronox’s claim with prejudice pursuant to a stipulation by the parties. The order of dismissal in Nevada was signed by Tronox’s attorney and counsel for the Estate. On October 28, 2010, a corresponding dismissal of Tronox’s creditor claim was entered in King County, also by stipulation. The stipulation, which was entered into by Tronox “acting pro se,” was signed by counsel for the Estate and by Tronox’s general counsel.2 The order was entered by a superior court commissioner.

¶6 Six days later, on November 3, 2010, the Estate received a letter from Mountain-West, a Canadian mining company based in Vancouver, British Columbia. The letter explained that Mountain-West and Tronox had entered into a written agreement to share in any proceeds from the Nevada litigation. The agreement specified that Mountain-West, in exchange for a one-half interest in potential proceeds of Tronox’s claim, would pay all attorney fees relating to the litigation and indemnify Tronox for liability based upon possible counterclaims for malicious prosecution or abuse of process. The letter further stated that Mountain-West was now making a creditor claim against [443]*443the Estate and would soon be “filing the necessary pleadings to preserve the claim.”

¶7 The Estate immediately notified Mountain-West that its claims were time barred. The PR thereafter filed an affidavit stating that she had conducted a reasonable review of “[Fitzgerald’s] correspondence, including correspondence received after the date of death, and financial records, including personal financial statements, loan documents, checkbooks, bank statements, and income tax returns.” The PR explained that this review had occurred during the four-month period following the date of the first publication of notice to creditors. The PR stated that Mountain-West had not been ascertained as a result of the review. In addition, the Estate brought a petition under the Trust and Estate Dispute Resolution Act (TEDRA), chapter 11.96A RCW, requesting the court to rule that any creditors not known to the PR prior to February 14, 2010, were not reasonably ascertainable and that, consequently, the claims of such creditors were time barred.

¶8 Mountain-West filed an answer to the Estate’s petition on December 15, 2010, requesting that the court “refrain from deciding the present Petition on the merits until Mountain-West has had a sufficient opportunity to depose [the PR] and other relevant individuals to support the contention that [the PR] was aware of Mountain-West’s claims against the decedent.”

¶9 On December 16, 2010, Mountain-West formally asserted two creditor claims against the Estate. The primary claim was in the amount of $1.5 billion. This claim, which did not allege that Fitzgerald had directly injured Mountain-West, was based upon Mountain-West’s interest in the potential proceeds of the Nevada litigation.3 Mountain-West asserted that the dismissal of Tronox’s claim against [444]*444the Estate was invalid, and that, accordingly, this probate claim by Tronox must be deemed to remain open.

¶10 The second claim, in the amount of $150 million, was based upon allegedly fraudulent conduct by Fitzgerald during his tenure as president and chief executive officer (CEO) of Cobre Exploration Ltd., the predecessor in interest to Mountain-West. The claim alleged that Fitzgerald, in violation of his fiduciary duty to the corporation, had secreted certain Wyoming mineral claims for his own profit.4 Although this claim asserted a direct injury to Mountain-West, the claim was not a part of the Nevada litigation and had not been disclosed to the Estate in any previous correspondence.

¶11 On January 6, 2011, a hearing on the merits of the Estate’s TEDRA petition was held before a King County Superior Court commissioner. The commissioner did not grant Mountain-West additional time to conduct discovery. The commissioner determined that the PR had conducted a reasonable review of Fitzgerald’s records and correspondence and that Mountain-West was not a reasonably ascertainable creditor. The commissioner ruled that Mountain-West’s creditor claims were time barred pursuant to RCW 11.40.010 and RCW 11.40.051. In addition, the commissioner found that Mountain-West had received actual notice to creditors, effective January 14, 2010.

Free access — add to your briefcase to read the full text and ask questions with AI

Fitzgerald v. Mountain-West Resources, Inc., 294 P.3d 720, 172 Wash. App. 437 (Wash. Ct. App. 2012).

294 P.3d 720 (Fitzgerald v. Mountain-West Resources, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

The Lodges in West Yakima, LLC v. David Perez Ortiz
Court of Appeals of Washington, 2025
In Re The Estate Of Darrel R. Bryant
Court of Appeals of Washington, 2025
Laurie M. Kitselman & Eric Carlson, V. Dawn Darington
Court of Appeals of Washington, 2024
Gregory Ryan, Et Ano., V. City Of Renton, Et Ano.
Court of Appeals of Washington, 2024
Donald Hoth, V. Edward Hoth
Court of Appeals of Washington, 2024
In Re The Estate Of Irvin N. Strom
Court of Appeals of Washington, 2023
In Re The Donna Clark Irrevocable Trust
Court of Appeals of Washington, 2023
Chris Walters, V. Robert S. Reynolds
Court of Appeals of Washington, 2023
In re the Estate of: Willard F. Johnson
Court of Appeals of Washington, 2017
Anna Pascua v. Scott Collins & John Greenway
Court of Appeals of Washington, 2016
In Re The Guardianship Of Ella Nora Denny
Court of Appeals of Washington, 2016
In Re: The Richard C. Sweezy Trust Of 1990
Court of Appeals of Washington, 2016
Anthony Brown, V Golden State Foods Corp.
Court of Appeals of Washington, 2015