In Re The Estate Of: Homer R. House

Court of Appeals of Washington·Decided December 22, 2014·No. 70248-3·Unpublished

Opinion

. - I L. L. I »i.-, - :

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

In re the Estate of No. 70248-3-1 HOMER R. HOUSE, DIVISION ONE Deceased.

LINDA McMURTRAY and LARRY PIZZALATO,

Appellants,

JANET CORNELL; ROBERT HOUSE; UNPUBLISHED SUSAN TERHAAR; and JUDITH THEES, FILED: December 22, 2014

Respondents.

Cox, J. — "A release is a contract and its construction is governed by contract principles subject to judicial interpretation in light of the language used."1 Courts generally uphold the validity of releases.2 Here, Vera J. House, along with Linda McMurtray and Larry Pizzalato (collectively "Vera's Children"), and

1 Nationwide Mut. Fire Ins. Co. v. Watson, 120 Wn.2d 178, 187, 840 P.2d 851 (1992).

2 \± at 186-87; see also Metro. Life Ins. Co. v. Ritz, 70 Wn.2d 317, 318, 422 P.2d 780 (1967) (concluding that regardless of the intent of the parties signing the release, an unconditional general release of "all claims" included all claims as a matter of law).

Janet Cornell, Robert House, Susan Terhaar and Judith Thees (collectively "Homer Ray's Children"), signed a Trust Termination Agreement in 2005.3 By its express terms, all parties to that agreement mutually agreed to "release and discharge each other from any and all claims, demands, actions or cause[s] of action, known or unknown, that any of them may have or hereafter may acquire, arising out of or in any way connected with the Family Trust, the Decedent's Trust, the Estate of Homer R. House, or their respective rights or interests thereunder."4 We hold that the claims that Vera's Children assert in this proceeding fall within the terms of this release and are therefore barred. We also hold that the trial court did not abuse its discretion in awarding to Homer Ray's Children ownership of the mineral rights that are in dispute. Finally, the court did not abuse its discretion in awarding attorney fees in favor of the Estate of Homer R. House and Homer Ray's Children against Vera's Children. We affirm.

This TEDRA proceeding arises from competing claims to ownership of oil and gas mineral rights in real property located in the state of Colorado. In 1924, Homer Virgil House, the then owner of the property, conveyed it to another, reserving in himself ownership in an interest in the net income from oil and gas mineral rights in the property. Homer Virgil5 died in 1974. He was survived by his six children, including his son Homer Ray House. The record establishes that

3 Clerk's Papers at 184-88.

4 Id, at 183.

5 This opinion uses his first and middle names to distinguish him from his son.

none of the parties to this proceeding knew of the interest in the mineral rights until 2011.

Homer Ray had four children. Homer Ray's second wife, Vera, had two children. Homer Ray never adopted Vera's Children.

In 1991, Homer Ray and Vera created the Homer R. House and Vera J.

House Family Trust.6 They were the trustors and co-trustees of this family trust. The trust agreement provided that upon the death of either trustor, the surviving spouse, as trustee, would divide the trust into a Survivor's Trust and a Decedent's Trust.7 Homer Ray died testate in 2004. He was survived by Vera, Homer Ray's Children, and Vera's Children. Vera did not file Homer Ray's will or open probate for his estate. It is undisputed that she distributed known assets from the Family Trust into a Survivor's Trust and a Decedent's Trust.

In 2005, Vera terminated the Survivor's Trust and appointed all the assets in that trust to herself.

Later that year, Vera, Homer Ray's Children, and Vera's Children, executed the Trust Termination Agreement.8 By its express terms, the agreement terminated the Decedent's Trust. Moreover, Vera, Homer Ray's Children, and Vera's Children, mutually released and discharged each other from "any and all claims . . . known or unknown, that any of them may have or

6 Clerk's Papers at 295.

7 Id, at 301.

8 Id. at 181-89.

hereafter may acquire, arising out of. . . the Family Trust, the Decedent's Trust, the Estate of Homer R. House, or their respective rights or interests thereunder."9 In 2007, Vera House died testate. Under her will, Vera's Children were equal beneficiaries of her estate.

In 2011, after the parties learned that Homer Virgil had reserved an interest to mineral rights in the Colorado property, the personal representative of Homer Virgil's estate released Homer Ray's one-sixth share of net income from the reserved oil and gas rights to the personal representative of Homer Ray's estate. The value of these rights is approximately $65,000 in current income plus an undetermined amount of possible future income.

In January 2012, Vera's Children commenced this TEDRA proceeding, claiming that the mineral rights passed to them. Janet Cornell, as personal representative of the Estate of Homer R. House, responded to the petition, and later, petitioned for distribution of the mineral rights interest and proposed distribution solely to Homer Ray's Children.

Vera's Children moved for summary judgment, asserting that they were entitled to the mineral rights as a matter of law. In opposing this motion, Cornell took the position that the release in the Trust Termination Agreement barred the claim of Vera's Children and she again urged distribution of the mineral rights to Homer Ray's Children. The court denied this motion, and the case proceeded to trial.

9 Id. at 183.

At the close of the bench trial, the court determined that the Trust Termination Agreement barred the claims of Vera's Children. The court then exercised its equitable discretion and awarded the interest in the mineral rights to Homer Ray's Children. It also ordered Vera's Children to pay attorney fees and costs to the Estate and to Homer Ray's Children. The court substantially denied the motion for reconsideration of Vera's Children regarding the award of attorney fees.

Vera's Children appeal.

TRUST TERMINATION AGREEMENT

The Estate and Homer Ray's Children both argue that Vera's Children released any and all claims to the mineral rights that are at issue in this case. We hold that the Trust Termination Agreement that the parties signed in 2005 did exactly that. Assertions to the contrary are not well-taken.

"A release is a contract and its construction is governed by contract principles subject to judicial interpretation in light of the language used."10 "The touchstone of contract interpretation is the parties' intent.'"11 "We follow 'the objective manifestation theory of contracts, imputing an intention corresponding to the reasonable meaning of the words used.'"12

10 Nationwide, 120 Wn.2d at 187.

11 In re Estate of Bernard, 182 Wn. App. 692, 697, 704, 332 P.3d 480 (2014) (internal quotation marks omitted) (quoting Realm, Inc. v. City of Olvmpia, 168 Wn. App. 1. 4-5. 277 P.3d 679. review denied, 175Wn.2d 1015(2012)).

12 Id (quoting Realm, 168 Wn. App. at 5).

This court reviews legal conclusions de novo.13 Here, the trial court concluded that Vera's Children waived any claim to assets in the Estate of Homer Ray and to any assets in any trust created under the 1991 Family Trust as a result of the 2005 Trust Termination Agreement:

The parties to the Trust Termination Agreement waived "any and all claims, demands, actions or cause of action known or unknown, that any of them may have or hereafter may acquire, arising out of or in any way connected with the Family Trust, the Decedent's Trust, the Estate of Homer R. House, or their respective rights or interests thereunder."'14!

This conclusion is supported by the language of the agreement, which is the objective manifestation of the parties' intent. Specifically, the agreement states in relevant part that Vera, "as Trustee, Trustor and individually as Vera J. House," as well as Homer Ray's Children and Vera's Children did:

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