IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON DIVISION ONE In re the Estate of Omar Bygland, ) No. 80443-0-I ) consolidated with D. EDSON CLARK, as co-trustee of ) No. 80444-8-I, Omar Bygland Credit Trust; and ) No. 80740-4-I, and SUSAN E. (NINA) BYGLAND, as ) No. 80940-7-I beneficiary of Omar Bygland Credit ) Trust, ) Appellant, ) ) v. ) ) KYLIE BYGLAND CRAIG, as ) co-trustee of Omar Bygland Credit ) Trust, ) UNPUBLISHED OPINION ) Respondent. ) )
VERELLEN, J. — Following a bench trial, the trial court ordered primary credit
trust beneficiary Susan (Nina) Bygland to pay $75,000 to residual beneficiaries
Kylie Bygland Craig and Brian Bygland. But, consistent with the trust’s terms, the
trustees legitimately authorized every disbursement to Nina.1 And the trustees did
not breach their fiduciary duties when doing so. Because the facts here do not
provide a legal or equitable basis to hold Nina liable, the court erred.
The trial court ordered the trust to pay costs and attorney fees incurred by
Nina and trustee D. Edson Clark for defending a frivolous counterclaim brought by
1Because they have the same last name, we refer to Nina, Omar, Kylie, and Brian Bygland by their first names. No. 80443-0-I/2
Kylie about a matter unrelated to the trust. But RCW 11.96A.150(1) does not
allow such an award against the trust. Rather, Kylie should be required to pay the
costs and attorney fees of Nina and Clark from defending against her frivolous
counterclaim.
As to costs and attorney fees on appeal, Clark and Nina prevail on every
consequential issue. We grant their requests for attorney fees under
RCW 11.96A.150(1), payable by Kylie. We deny Kylie’s request for costs and
attorney fees.
Therefore, we affirm in part, reverse in part, and remand for further
proceedings consistent with this opinion.
FACTS2
Nina and Omar Bygland married in 1977. Each had been married before
and had adult children from those marriages. In 2000, Omar executed a will that
provided for the creation of a credit trust with Nina as the primary beneficiary,
entitling her to all income from the trust and allowing the trustees to invade the
principle as “necessary for [her] health, maintenance, and support in her
accustomed manner of living.”3 Clark, Nina’s son, and Kylie, Omar’s daughter,
were made cotrustees. Kylie and her brother Brian are residuary beneficiaries of
the credit trust.
2 All facts are taken from the trial court’s findings of fact, Clerk’s Papers (CP) at 507-22, except where otherwise noted. We cite to only the unchallenged findings of fact, which are verities on appeal. In re Washington Builders Ben. Tr., 173 Wn. App. 34, 65, 293 P.3d 1206 (2013) (citing Robel v. Roundup Corp., 148 Wn.2d 35, 42, 59 P.3d 611 (2002)). 3 Ex. 12, at 3.
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Omar died in June of 2002. Nina was the personal representative for his
estate. Consistent with Omar’s will, the probate funded the testamentary credit
trust with half of Omar’s community property. Kylie and Clark retained Morgan
Stanley to administer the trust and agreed to have Clark’s accounting firm provide
tax services to the trust. They also agreed the trust would pay for half of Nina’s
rent at the apartment where she and Omar had lived for more than a decade.
Nina would pay the other half of her rent from her own assets.
The trust began paying Nina’s rent in late 2002 or early 2003. In 2004,
Nina began receiving an annual disbursement of $25,000 from another trust, the
Carrico trust, which her brother established. Nina and Clark were trustees of the
Carrico trust. Neither Clark nor Nina told Kylie about the Carrico trust.
“From late 2004 through early 2016, Kylie did nothing with regard to the
Credit Trust other than to approve [accounting] fees and tax distributions when
requested to do so by Morgan Stanley.”4 However, “[n]o monies were distributed
from the Credit Trust without Kylie’s consent and approval.”5 Kylie received a
monthly statement for the trust account from Morgan Stanley, and it included the
account balance, distributions, and any account activity. Kylie “did little . . . to be
informed about Nina’s expenses,” deferring instead to Clark to “make decisions
and perform the necessary administrative tasks related to the Trust.”6
4 Clerk’s Papers (CP) at 515 (Finding of Fact (FF) 57). 5 CP at 515 (FF 56). 6 CP at 516 (FF 63).
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On April 14, 2016, Kylie e-mailed Clark and requested the trust’s tax returns
from 2006 through 2015. After tax season was over, Clark provided her the tax
returns and detailed billing statements of the services his firm provided the trust.
In July of 2017, Kylie told Clark she was rescinding her longstanding authorization
for the trust to pay half of Nina’s rent, and she requested 10 years of Nina’s
financial information from him. Kylie explained she was looking out for herself and
Brian as residuary beneficiaries, asserting that they had “supported Nina to the
tune of approximately $100,000 each” from the trust.7
In October of 2017, Clark and Nina filed a TEDRA8 petition. They sought to
remove Kylie as a trustee, alleging she breached her fiduciary duties by rescinding
her authorization for Nina’s rent and by refusing to approve payments to Clark’s
accounting firm for its services. Kylie filed counterclaims alleging Clark breached
a variety of his duties as a trustee. She also alleged that Nina and Clark had
damaged her when Omar’s will was probated by misappropriating, improperly
distributing, or concealing assets. The parties engaged in discovery, including
multiple motions disputing the scope of discovery. Between 2002 and the 2019
trial, the trust principal had dropped from approximately $310,000 to approximately
$77,000.
After a five-day bench trial, the court entered findings of fact and
conclusions of law. The court concluded neither Clark nor Kylie breached any of
their duties, the trust owed Clark’s accounting firm for services provided, Nina
7 CP at 516 (FF 68, 69). 8 Trust and Estate Dispute Resolution Act, ch. 11.96A RCW.
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owed Kylie and Brian a reimbursement of $75,000, one of Kylie’s counterclaims
was frivolous, and the trust would pay Clark and Nina’s costs and attorney fees for
defending against the frivolous counterclaim. The court ordered Nina to pay
$75,000 to Kylie and Brian, the trust to pay $75,889.20 to Clark and Nina for costs
and attorney fees, the trust to pay $7,294.50 to Clark’s accounting firm, and for the
credit trust to be terminated because the awards would drop its value below
$25,000.
Nina and Clark appeal, and Kylie cross appeals.
ANALYSIS
I. Breach of the Credit Trust
The court held Nina personally liable for $75,000 as repayment for “funds
the Credit Trust paid to Nina for expenses which were not necessary for her health
and maintenance and which could have been paid for by the Carrico Trust.” 9 Nina
and Clark argue the court erred because a beneficiary cannot be held liable for a
breach of trust and that no Washington case supports doing so. Kylie argues the
court’s equitable powers gave it the authority to hold Nina accountable.
The trial court did not conclude Nina breached any duty or was part of a
scheme to unjustly enrich herself. And no finding indicates Nina breached a duty
through action or inaction. Every disbursement she received from the trust had
been approved by the trustees. Those disbursements were for expenses
necessary to maintain her accustomed manner of living. Except for a single
9 Clerk’s Papers (CP) at 525.
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disbursement in 2004 to subsidize her purchase of a new car, every payment was
to cover half of her rent in the same apartment where she and Omar had lived
before his death. Because there is no mechanism in the trust to allow a claw-back
of payments approved by the trustees and no finding suggests Nina acted
improperly to enrich herself, the trial court erred by concluding Nina’s conduct
required that she pay $75,000 to Kylie and Brian.
Even if we assume without deciding that a trial court has the equitable
authority to order an innocent beneficiary to reimburse a trust due to unjust
enrichment, the court still erred. To the extent the court concluded Kylie’s
ignorance about the Carrico trust caused Nina to be unjustly enriched, this is
premised upon the court’s interpretation of the trust as imposing a duty on both
trustees to consider all of Nina’s assets before making distributions and a duty on
Clark to inform Kylie about the Carrico trust income. The trust did not impose such
duties.
We review a court’s interpretation of a testamentary device de novo as a
matter of law.10 We interpret the device to uphold the testator’s intent.11 Although
the testator’s intent is a question of fact,12 it “‘must be derived from the terms of the
10 In re Estate of Wright, 147 Wn. App. 674, 680, 196 P.3d 1075 (2008) (citing Woodward v. Gramlow, 123 Wn. App. 522, 526, 95 P.3d 1244 (2004)). 11 Matter of Estate of Bergau, 103 Wn.2d 431, 435, 693 P.2d 703 (1985) (citing In re Estate of Riemcke, 80 Wn.2d 722, 728, 497 P.2d 1319 (1972)). 12 Eisenbach v. Schneider, 140 Wn. App. 641, 651, 166 P.3d 858 (2007) (citing In re Estate of Soesbe, 58 Wn.2d 634, 636, 364 P.2d 507 (1961)).
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instrument—construing all the provisions together.’”13 Thus, we consider the
device as a whole, giving effect to every part.14 The device’s provisions should be
understood from the testator’s perspective because the “testator is presumed to be
familiar with the ‘surrounding circumstances’ that could affect the will's
construction.”15 Extrinsic evidence should be used to interpret or construe the
device only if, read in its entirety, the testator’s intent is ambiguous.16 It “may not
be considered ‘for the purpose of proving intention as an independent fact, or of
importing into the will an intention not expressed therein.’”17
The critical subsections of the trust are 3.1 and 11.4. Section 3 provides for
the creation of the credit trust. Subsection 3.1 specifies how distributions should
be made:
The Trustee shall distribute all of the net income from the trust to or for the benefit of my wife in convenient installments and shall distribute to or use for my wife’s benefit such portion of the trust principal as the Trustee determines necessary for my wife’s health, maintenance, and support in her accustomed manner of living. In making distributions, it is my desire that my wife continue to live in her accustomed standard within the limitations of the funds available,
13Templeton v. Peoples Nat. Bank of Wash., 106 Wn.2d 304, 309, 722 P.2d 63 (1986) (quoting Old Nat’l Bank & Union Trust Co. v. Hughes, 16 Wn.2d 584, 587, 134 P.2d 63 (1943)). 14 Wright, 147 Wn. App. at 681 (citing In re Estate of Price, 73 Wn. App. 745, 754, 871 P.2d 1079 (1994)). 15 Price, 73 Wn. App. at 754 (quoting Bergau, 103 Wn.2d at 436). 16 Id. (citing Bergau, 103 Wn.2d at 436). 17 In re Estate of Curry, 98 Wn. App. 107, 113, 988 P.2d 505 (1999) (internal quotation marks omitted) (quoting In re Estate of Patton, 6 Wn. App. 464, 467-68, 494 P.2d 238 (1972)).
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therefore, I desire that the Trustee resolve in my wife’s favor any uncertainty concerning distributions from trust principal.[18]
The first sentence of subsection 3.1 can be broken into two mandates to the
trustees. The parties do not dispute that the first requires distribution of all net
income from the trust to Nina. The parties dispute the meaning of the second
mandate about invading the trust’s principal.
The dispute centers on the meaning of “such portion of the trust principal as
the Trustee determines necessary.” The trial court concluded that “‘necessary’
modifies the nature of the expense.”19 Kylie rejects that interpretation and instead
interprets “necessary” as obliging the trustees to consider whether an expense
“was necessary in light of Nina’s other assets.”20 Both interpretations conflict with
the structure and grammar of subsection 3.1.
“Necessary” is part of a prepositional phrase—“as the Trustee determines
necessary”—that modifies the clause’s direct object, the complex noun phrase
“such portion of the trust principal.” In other words, the trustees must disburse
whatever portion of the trust principal is necessary for Nina’s health, maintenance,
and support in her accustomed manner of living. The size of the necessary
portion is “as the Trustee determines,”21 meaning it could be as small as zero
dollars if the trustees were certain no amount was necessary. One of the limits on
this discretion is the second sentence of subsection 3.1, where Omar states his
18 Ex. 12, at 3 (emphasis added). 19 CP at 511 (FF 21). 20 Resp’t’s Br. at 28. 21 Ex. 12, at 3.
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“desire that the Trustee resolve in my wife’s favor any uncertainty concerning
distributions from trust principal.”22
The trial court misreads the sentence’s structure by severing “necessary”
from its prepositional phrase, “as the trustee determines necessary.” And Kylie’s
interpretation is unavailing because nothing suggests the word “necessary” should
be read in conjunction with a phrase, “within the limitations of the funds available,”
in a separate sentence on a separate topic. Thus, as a matter of plain English,
subsection 3.1 reflects Omar’s unambiguous intention to give the trustees
discretion to decide to what extent the trust principal should be invaded for Nina’s
health, maintenance, and accustomed standard of living. This interpretation aligns
with the discretion given to the trustees in subsection 11.4.
Subsection 11.4 provides for the trustees’ consideration of other resources
when making distributions. Kylie contends subsection 11.4 required the trustees
to “consider Nina’s other resources before invading the Credit Trust’s principal.”23
In its entirety, subsection 11.4 provides:
The Trustee, in exercising the discretion granted in making payments hereunder, may take into consideration the reasonable use of all resources which may then be known by the Trustee to be available to or for the use of the respective beneficiary; provided, however, to the extent that a Trustee has an obligation to support a beneficiary, the Trustee shall take into account all such resources including the beneficiary’s parents’ or Guardian’s ability to support such beneficiary. The Trustee, in the Trustee’s discretion, may request and rely upon a signed statement from such beneficiary or the beneficiary’s parent or Guardian, satisfactory to the Trustee, as to such resources and may, in the Trustee’s discretion, suspend
22 Ex. 12, at 3. 23 Kylie Resp’t’s Br. at 29 (citing CP at 509, FF 5).
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benefits hereunder for such beneficiary during any period in which a requested statement is not furnished.[24]
It has three parts: a general rule, an exception, and an enforcement mechanism.
The first independent clause states the general rule, providing the trustees
discretion to consider a beneficiary’s resources before making a payment.25 The
trustees “may” consider the beneficiary’s resources that “may” be known by the
trustee.26 The clause contains no words of command to the trustees. Generally,
Clark and Kylie had the option of inquiring into Nina’s resources and the discretion
to consider them.
The exception mandates that a trustee consider “all such resources”
available to support the beneficiary, but it applies only “to the extent that a Trustee
has an obligation to support a beneficiary.”27 Kylie argues Clark had an obligation
to support Nina as a trustee and as her son. This interpretation is not convincing.
If the exception applied to the trustees because of their position, then the general
rule preceding it would be meaningless, and trust devices are interpreted to give
effect to every provision.28 And Kylie provides no other authority to explain why
Clark had a legal obligation to support his mother. Omar knew when he created
the trust that Nina was an adult in her late 70s with her own individual assets, that
24 Ex. 12, at 10 (emphasis added). 25 See Strenge v. Clarke, 89 Wn.2d 23, 28, 569 P.2d 60 (1977) (in statutes, “the word ‘may’ conveys the idea of choice or discretion”) (citing State ex rel. Beck v. Carter, 2 Wn. App. 974, 977, 471 P.2d 127 (1970)). 26 Ex. 12, at 10. 27 Ex. 12, at 10. 28 Wright, 147 Wn. App. at 681 (citing Price, 73 Wn. App. at 754).
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neither Kylie nor Clark was her guardian, and that neither trustee had an obligation
to support her. The unambiguous language of the trust reveals Omar did not
intend to mandate that the trustees consider Nina’s assets before making
distributions to her.29
Read in its entirety, Omar clearly intended to provide the trustees
considerable discretion to decide how much of the trust’s principal should be used
for Nina’s benefit. The discretionary nature of these determinations also makes
sense because section 3.1 mandates distribution of all net trust income to Nina. If
the trustees determined the trust’s net income was enough to provide for Nina’s
needs, then they could then determine no portion of the trust principal was
necessary for her benefit. The trust’s terms demonstrate Omar’s intent to accord
broad discretion to the trustees when making distributions from the trust principal.
The trustees had no duty to consider Nina’s assets and income before making a
distribution, and the trust did not impose a duty on Clark to inform Kylie in her
capacity as a cotrustee about Nina’s assets and income. Because the court
29 See Price, 73 Wn. App. at 754 (testator’s intent is determined from language of the device itself as understood by the testator’s knowledge when creating it) (citing Bergau, 103 Wn.2d at 435, 436). Nina and Clark challenge finding of fact 5, which states “Omar’s intent would have been that [Clark] consider Nina’s [distributions from the Carrico trust] in making distributions of his trust.” CP at 509. Because the trial court relied upon extrinsic evidence to determine Omar’s intent when the trust was unambiguous, the finding should not have been entered. See Curry, 98 Wn. App. at 113 (“[E]xtrinsic evidence may not be considered ‘for the purpose of proving intention as an independent fact, or of importing into the will an intention not expressed therein.’”) (internal quotation marks omitted) (quoting Patton, 6 Wn. App. at 467-68). We decline to review it for substantial evidence.
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erroneously concluded Nina had been unjustly enriched, it erred by ordering her to
pay $75,000.30
In her cross appeal, Kylie contends Clark should be responsible for any
repayment because he breached his fiduciary duties of good faith, loyalty, and
impartiality owed to her as a beneficiary. She appears to argue that Clark
breached the duties of good faith and loyalty by not informing her about the
Carrico trust and by not limiting distributions from the credit trust principal based
upon the Carrico trust’s existence. She appears to argue Clark breached his duty
of impartiality by authorizing distributions from the credit trust’s principal while
serving as a trustee to the credit trust and as a trustee-beneficiary of the Carrico
trust.
Whether a trustee breached their fiduciary duties is a mixed question of law
and fact where the trial court’s findings of fact are reviewed for substantial
evidence and its conclusions of law are reviewed de novo.31 Because it is
30 Nina and Clark assign error to findings of fact 32 and 84. Findings of fact 32 and 84 are about the size and operation of the Carrico trust. We decline to review them because neither Nina nor Clark had a duty to disclose her income from it, so those aspects of the Carrico trust are, at best, collateral to the issues before us. See McLeod v. Keith, 69 Wn.2d 201, 203-04, 417 P.2d 861 (1966) (when sufficient evidence supports “the material and decisive findings” that support the judgment, “the presence of unsupported and immaterial findings is of no consequence”) (citing Simms v. Ervin, 46 Wn.2d 417, 282 P.2d 291 (1955); Aura v. Markle, 105 Wash. 654, 178 P. 814 (1919)); State v. Coleman, 6 Wn. App. 2d 507, 516, 431 P.3d 514 (2018) (reliance on an immaterial finding of fact is not prejudicial even if the finding was erroneous or unsupported) (citing Cowiche Canyon Conservancy v. Bosley, 118 Wn.2d 801, 808, 828 P.2d 549 (1992)). 31 See In re Estate of Jones, 152 Wn.2d 1, 8-9, 93 P.3d 147 (2004) (explaining the standard of review to analyze a trial court’s removal of a trustee for breach) (citing cases); Washington Builders, 173 Wn. App. at 63 (explaining the standard of review to analyze a trial court’s determination that a trustee breached).
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undisputed that Clark had fiduciary duties of good faith, care, loyalty, and integrity,
the question is whether the trial court’s findings supported its conclusion that Clark
did not breach those duties.
A trustee’s duty of good faith includes a duty to inform.32 Kylie argues the
trust imposed a duty on Clark to inform her and Brian about the Carrico trust and
Nina’s income from it. As discussed, the terms of the trust did not impose an
independent duty to disclose on Clark. The question is whether he breached a
common law duty to inform.
Every trustee must inform beneficiaries “fully of all facts which would aid
them in protecting their interests.”33 But this duty is not so broad. In Allard v.
Pacific National Bank, our Supreme Court discussed the scope of the duty to
inform.34 It explained that beneficiaries “must know of what the trust property
consists and how it is being managed.”35 Typically, “periodic statements are
sufficient to satisfy a trustee’s duty to beneficiaries of transactions affecting the
trust property.”36 In Allard, the trustee breached because it sold a trust’s sole
asset without informing the beneficiaries.37
Allard v. Pac. Nat’l Bank, 99 Wn.2d 394, 404, 663 P.2d 104 (1983) (citing 32
Esmieu v. Schrag, 88 Wn.2d 490, 498, 563 P.2d 203 (1977)). 33 Id. (citing Esmieu, 88 Wn.2d at 498). 34 99 Wn.2d 394, 404-05, 663 P.2d 104 (1983). 35 Id. at 404 (citing G. Bogert, Trusts and Trustees § 961 (2d ed. 1962)). 36 Id. 37 Id. at 396.
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Here, unlike Allard, the undisclosed information—Nina’s income from other
sources—do not relate to assets of the credit trust. The fortunes of the Carrico
trust would, at most, indirectly affect the credit trust, similar to Nina’s retirement
and pension benefits. Because the Carrico trust and Nina’s income from it were
entirely separate from the credit trust’s assets, Clark’s duty to inform did not
extend to them.
Kylie argues Clark breached his duties of loyalty and impartiality by
deciding to invade the credit trust’s principal while serving as a trustee-beneficiary
of the Carrico trust and as a trustee of the credit trust. A trustee must administer
the trust in the interest of the beneficiaries.38 “The trustee must exclude from
consideration not only his own advantage or profit, but also that of third parties in
dealing with trust properties and in all other matters connected with the
administration of the trust estate.”39 It is undisputed Clark owed this duty to Kylie,
Brian, and Nina.
Kylie contends Clark, by invading the credit trust principal, acted adversely
to herself and Brian as residuary beneficiaries in order to favor Nina as the primary
beneficiary and himself as a residuary beneficiary of the Carrico trust. Nina
argues the record is insufficient to reverse the trial court’s conclusion that Clark did
not breach his fiduciary duties by approving distributions to pay half of Nina’s
38 Washington Builders, 173 Wn. App. at 63 (quoting Tucker v. Brown, 20 Wn.2d 740, 768, 150 P.2d 604 (1944)). 39 Tucker, 20 Wn.2d at 768.
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rent.40 As the plaintiff below and now cross appellant on this issue, Kylie has the
burden of demonstrating the trial court’s findings of fact are unsupported by
substantial evidence.41 And the absence of a finding on a material issue is
assumed to be a negative finding entered against the party with the burden of
proof at trial.42 Because Kylie declined to challenge any of the trial court’s findings
of fact, the question is whether the existing findings support the trial court’s
conclusion that Clark did not breach.
Finding of Fact 95 states “[n]o evidence was offered or admitted regarding
the terms of the Howard Carrico Trust other than testimony that there were limits
on the ability of the trustees to distribute money from that trust.”43 Finding of Fact
96 states that Clark’s unrebutted testimony was “that the Carrico Trust always
distributed more money to Nina than the [credit] Trust.”44 Findings of Fact 75 and
76 show that Nina’s personal liquid assets were depleted by over half between
2002 and September of 2018. And Finding of Fact 56 states “[n]o monies were
40 No party addresses the trial court’s contradictory conclusion of law that both Kylie and Clark did not breach their fiduciary duties by authorizing disbursements to pay half of Nina’s rent and breached by “invading the principal the first time.” CP at 526. But, as discussed, the trust did not impose such a duty to consider Nina’s assets before invading the trust principal, and the court erred by concluding they breached their fiduciary duties by doing so. 41Pham v. Corbett, 187 Wn. App. 816, 825, 351 P.3d 214 (2015) (citing Green v. Normandy Park Riviera Section Comm. Club, Inc., 137 Wn. App. 665, 689, 151 P.3d 1038 (2007)). 42 Mitchell v. Straith, 40 Wn. App. 405, 412, 698 P.2d 609 (1985) (citing Goldberg v. Sanglier, 96 Wn.2d 874, 880, 639 P.2d 1347 (1982); In re Eggers, 30 Wn. App. 867, 873, 638 P.2d 1267 (1982)). 43 CP at 520. 44 Id.
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distributed from the Credit Trust without Kylie’s consent and approval.”45 These
findings support the trial court’s conclusion that Clark did not breach his duty of
loyalty by favoring himself or Nina, even if the potential for a conflict existed. The
absence of findings consistent with a breach of the duty of loyalty is deemed a
negative finding imputed against Kylie and supporting the conclusion that no such
evidence existed.46 Because Kylie has the burden on appeal of demonstrating
that the trial court’s findings of fact do not support its legal conclusions and she
has not done so, she fails to demonstrate that the trial court erred.
Kylie contends remand is required because the trial court relied upon In re
Sackman’s Estate47 to enter erroneous conclusions of law. The court relied upon
Sackman’s Estate to conclude Kylie could not sue Clark because, as cotrustees,
they “were one entity under the law with regard to all decisions relating to the
Credit Trust.”48 Even if incorrect, remand is not required. Because the effect of
this conclusion appears to have been the court’s decision to decline to enter a
judgment against Clark, and judgment should not have entered against Clark
regardless, no prejudice resulted from this alleged error. Remand is not
required.49
45 CP at 515. 46 Mitchell, 40 Wn. App. at 412 (citing Goldberg, 96 Wn.2d at 880; Eggers, 30 Wn. App. at 873). 47 34 Wn.2d 864, 210 P.2d 682 (1949). 48 CP at 524 (Conclusion of Law (CL) 11). 49 See In re Marriage of Morris, 176 Wn. App. 893, 903, 309 P.3d 767 (2013) (“‘It is well established that errors in civil cases are rarely grounds for relief
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II. Attorney Fees From Trial
Clark and Nina argue that their costs and attorney fees incurred in
defending against Kylie’s frivolous counterclaim should not have been assessed
against the trust. Kylie made several counterclaims, one of which alleged Clark
and Nina mishandled the probate of Omar’s estate.50 The trial court awarded
Clark and Nina costs and attorney fees for defending against that counterclaim
only. The court concluded this counterclaim was “frivolous” because it “did not
have a legal or factual basis.”51 The court awarded $75,889.20 to Clark and Nina
to be paid for by the trust, but Kylie would be liable for any amounts above the
trust’s dwindling assets.
We review an award of costs and attorney fees from a trust dispute for abuse
of discretion.52 A trial court abuses its discretion when its decision rests upon
untenable grounds or was made for untenable reasons.53 RCW 11.96A.150(1)
allows a trial court to assess an award of costs and attorney fees against “the assets
of the estate or trust involved in the proceedings.”
without a showing of prejudice to the losing party.’”) (quoting Saleemi v. Doctor’s Assocs., Inc., 176 Wn.2d 368, 380, 292 P.2d 108 (2013)). 50Kylie also raised counterclaims alleging Clark breached his fiduciary duties. The court did not award costs or fees for defending against those claims. 51 CP at 521, 525 (FF 102, CL 19). 52 In re Estate of Evans, 181 Wn. App. 436, 451, 326 P.3d 755 (2014) (citing In re Estate of Black, 153 Wn.2d 152, 173, 102 P.3d 796 (2004) (Black II)). 53 Id. (citing Dix v. ICT Grp., Inc., 160 Wn.2d 826, 833, 161 P.3d 1016 (2007)).
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Nina and Clark argue the “touchstone” for evaluating an award of costs and
attorney fees in a TEDRA action is whether Kylie’s litigation substantially
benefitted the trust.54 But as this court explained in In re Estate of Evans, the
attorney fee provision in TEDRA was amended in 2007, so “the continuing vitality
of the substantial benefit requirement is questionable.”55 Since its amendment,
RCW 11.96A.150 gives the trial court discretion to consider factors that “may but
need not include whether the litigation benefits the estate or trust involved.” 56
Thus, the more apt question when deciding to award attorney fees from a trust is
whether “both sides advance[d] reasonable, good faith arguments in support of
their respective positions” regarding the trust.57
A claim is frivolous when it cannot be supported by any rational argument
based in law or fact.58 Kylie has not appealed the trial court’s conclusion that her
claim was frivolous or its decision to award fees. Because a frivolous claim is, by
definition, unreasonable and, here, was unrelated to the trust, the trial court lacked
a tenable basis in law or fact to order the trust to pay Clark and Nina’s attorney
fees.
54 Clark Appellant’s Br. at 36 (quoting In re Estate of Black, 116 Wn. App. 476, 490, 66 P.3d 670 (2003) (Black I)); Nina Appellant’s Br. at 31 (quoting Black I, 116 Wn. App. at 490). 55 181 Wn. App. 436, 452, 326 P.3d 755 (2014) 56 Id. at 451-52 (quoting LAWS OF 2007, ch. 475 § 5). 57 Id. at 452 (citing Black I, 116 Wn. App. at 491); see RCW 11.96A.150(1) (court has discretion to award fees from a trust “involved in the proceedings”). 58See Goldmark v. McKenna, 172 Wn.2d 568, 582, 259 P.3d 1095 (2011) (explaining when an appeal is frivolous for purposes of RCW 4.84.185).
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Clark and Nina contend Kylie should be liable for their costs and attorney
fees. The trial court concluded that an award of costs and attorney fees was
warranted only under RCW 11.96A.150, and that decision has not been appealed.
But because the trust should not be responsible for the costs Clark and Nina
incurred from defending against Kylie’s frivolous claim, the question is whether
that statute still allows for an award of costs and attorney fees to Clark and Nina.
RCW 11.96A.150(1) also allows for costs and fees to be paid by a “party to the
proceedings” or by “any nonprobate asset that is the subject of the proceedings.”
Because there is no nonprobate asset at issue here, the statute allows for an
award of costs and fees from only a “party to the proceedings.” And because the
decision to award costs and fees to Clark and Nina has not been appealed, Kylie,
the only remaining party to the proceedings who brought the frivolous
counterclaim, should pay Clark and Nina’s costs and attorney fees incurred in
defending against her frivolous claim, pursuant to RCW 11.96A.150(1).
III. Trust Termination
The trial court ordered the trust liquidated because the award of costs and
attorney fees from it would lower the trust’s value below $25,000. The trust
contains a “small trust termination” provision that lets the trustees liquidate and
terminate the trust if its market value is $25,000 or less.59 The trial court
concluded the trust would have a value below $25,000 after trial because it
contained approximately $77,000 in assets at the time of trial, and the award of
59 Ex. 12, at 10.
19 No. 80443-0-I/20
costs and attorney fees was nearly that much. Because the trust will no longer be
responsible for Clark and Nina’s attorney fees and costs, it appears it will contain
more than $25,000. We reverse the portion of the order liquidating and
terminating the trust, subject to any changed circumstances before the court on
remand.
IV. Attorney Fees on Appeal
The parties each request their costs and attorney fees on appeal pursuant
to RAP 18.1 and RCW 11.96A.150. RAP 18.1 authorizes an award of costs and
attorney fees where authorized by law. RCW 11.96A.150(1) authorizes an award
of costs and attorney fees from an appeal. RCW 11.96A.150(1) also gives this
court the discretion to “consider any and all factors that it deems to be relevant
and appropriate.” Because Clark and Nina prevail on every issue of consequence
and their appeal benefitted the trust, we grant their requests for costs and attorney
fees to be determined by a commissioner of this court upon compliance with
RAP 18.1. Because Kylie does not prevail on any issue of consequence, including
her cross appeal, we deny her request.
RCW 11.96A.150(1) authorizes payment of an award of costs by any party
to the proceeding, the trust’s assets, or a nonprobate asset that is the subject of
the proceedings. Under these circumstances, Kylie is liable for Clark and Nina’s
costs and reasonable attorney fees from appeal.
The legal conclusion and related order holding Nina liable are reversed.
The order holding the trust liable for Nina and Clark’s attorney fees and costs from
defending against Kylie’s frivolous counterclaim is reversed. The conclusion that
20 No. 80443-0-I/21
Clark did not breach his duties is affirmed. On remand, the trial court must enter a
judgment and orders requiring that Kylie pay Nina and Clark’s attorney fees from
defending against the frivolous counterclaim and must vacate any inconsistent
judgments. Therefore, we reverse in part, affirm in part, and remand for
proceedings and entry of judgment and orders consistent with this opinion.
WE CONCUR: