IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
IN THE MATTER OF THE CZARNECKI 2011 REVOCABLE No. 879014-I LIVING TRUST, dated October 24, 2011. DIVISION ONE
NICHOLAS CZARNECKI, an UNPUBLISHED OPINION individual,
Appellant,
v.
RONALD CZARNECKI, an individual and as the trustee of the Czarnecki 2011 Revocable Living Trust,
Respondent.
HAZELRIGG, C.J. — Nicholas Czarnecki petitioned the trial court under the Trust and Estate Dispute Resolution Act 1 for an accounting of a family trust and removal of the trustee based on allegations that his father, Ronald Czarnecki, the sole trustee and one of the original trustors, had wrongfully disbursed trust income to himself and had been doing so for some time. After a bench trial, the petition was denied in full. On appeal, Nicholas contends that the trial court erred in virtually every aspect of its decision, as well as entry of judgment. We disagree and affirm.
1 Ch. 11.96A RCW.
FACTS 2
Ronald (Ron) and Priscilla (Tilly) Czarnecki were married for many years and had three sons, Nicholas (Nick), Erik, and Alan. 3 The couple received separate inheritances over the course of the marriage and used these assets for “joint investments, expenses, and maintenance.” “Tilly inherited interests in three California investment properties (‘California Properties’)” that produced rental income the couple managed together.
Tilly experienced a “health scare” in 2011, and in response, the couple “executed the Czarnecki 2011 Revocable Living Trust, an estate planning document that required the California Properties to be contributed to a bypass trust upon the death of the first spouse (‘Bypass Trust’).” The trust “appointed Erik, Alan, and Nick as [s]pecial [t]rustees of the California Properties with specific powers.” Some of the specific powers were approval of certain transactions, including “[d]istribution or any other transfer” of the real property from the trust, “any lease agreement affecting such property,” the “refinance of any encumbrance on such property or the addition of any new encumbrance” that was not in place when the property was transferred into the trust, or the burdening of the trust property with “a security interest of any kind . . . or otherwise offering any such property as collateral of any kind.” The sons had no other powers over the trust or
2 Unless otherwise noted, the following facts are drawn from the undisputed findings of fact
entered by the trial court following the bench trial, including those that are now verities due to abandonment of challenges to them on appeal. See In re Est. of Jones, 152 Wn.2d 1, 8, 93 P.3d 147 (2004).
3 Because the parties and others involved share the same last name, we use their first
names for clarity. Further, the parties use shortened forms of their first names in briefing, both in referencing themselves and each other, as they did in the trial court. Accordingly, we adopt that convention. No disrespect is intended.
3
its assets outside of those regarding transfer, alienation, or encumbrance of the California Properties.
In 2016, the couple began building a house in Mexico with the intent to reside there half the year. In 2019, Tilly was diagnosed with lung cancer. The trial court eventually found that, by that time,
Ron’s and Tilly’s accustomed standard of living included having more than $300,000 in savings, owning their home in Everett with a single mortgage, owning their home in Mexico outright, being able to take vacations, and having enough left over income to give gifts to their sons and grandchildren.
The couple faced “considerable medical costs” as a result of Tilly’s diagnosis and opted “to take out additional mortgages on their Everett home” and spend from their savings and Ron’s 401(k) retirement savings account in order to pay for Tilly’s treatment. “At no time did Nick, Erik[,] or Alan offer to financially assist in the payment of Tilly’s treatment.” Ron served as Tilly’s primary caretaker, with minimal assistance, until she passed away at home in October 2021. The trial court later found as follows:
After Tilly passed, Ron struggled emotionally with the idea of staying in the family home where his wife spent her last years and days.
Consequently, he decided to sell the Everett home and move to and live in the Mexico house full time. His decision was based on multiple factors including the fact that living in the Mexico house would generally be more affordable than staying in the Everett home.
By its terms, the revocable trust became irrevocable upon the death of one of the trustors. The revocation provision set out in the revocable trust states that,
While both of the Trustors are living, they shall have the right acting jointly, and either Trustor shall have the right acting on behalf of the marital community,
(a) to revoke this instrument in its entirety,
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(b) to partially revoke or modify this instrument,
(c) to withdraw from the operation of the trust any part of the property of the trust estate, and
(d) to transfer to Trustee additional property acceptable to Trustee for administration as a part of the trust estate.
In December 2021, Ron undertook several actions related to the California Properties and the bypass trust that was created under the plain language of the now-irrevocable trust. He “transferred the California Properties to the Bypass Trust by quit claim deeds.” As a result, the trust was now an irrevocable trust that held income-generating property and, therefore, required both a separate employer identification number (EIN) and separate tax returns under federal law. 4 Ron was unaware of these legal implications; he “continued to receive the income from the California Properties into the bank accounts he and Tilly had historically used” and to report the income as part of his personal income on his federal tax return. Ron also did not inform the property managers that he had transferred the title ownership of the properties to the trust.
In January 2022, Ron arrived at the Mexico home. Around this time, he began to use an application on his phone in order “to meet his obligation to prepare the first annual accounting for the Bypass Trust, which would be due at the end of February[] 2023.” Ron also began the necessary work so that the home could serve as a fulltime residence, but his funds were limited due to the previous expenditures related to Tilly’s medical needs. The trial court later found that
4 See 26 U.S.C. § 511 (imposing tax on trusts that produce income); 26 C.F.R. § 301.6011-
10 (filing requirements for trusts); 26 C.F.R. § 1.6012-3(5) (fiduciaries’ obligation to file on behalf of income producing trust); 26 C.F.R. § 301.7701-12 (EIN requirements).
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[o]ver the first seven months of 2022, Erik, Alan, and Nick demanded that Ron provide them with information about the Bypass Trust and expressed concern that they were not receiving any benefit from the Bypass Trust.
In August, Ron sent his sons “a rough breakdown of his financial affairs” via e-mail, expressed hope that he would be able to make distributions from the trust to the other beneficiaries in the future, and explained his plan to do so. Ron ultimately spent “approximately $100,000 to complete and make the Mexico [h]ome livable, half of which he paid for using his diminished savings and half which he borrowed from two banks.” This left him in a “significantly worse” financial position than he had anticipated, especially as compared to his assessment “when he made the financial disclosure to his sons in August, as the loans essentially canceled out his social security income leaving only the Bypass Trust as income, and his savings were significantly depleted.”
In December 2023, Nick filed a petition pursuant to the Trust and Estate Dispute Resolution Act 5 (TEDRA) in King County Superior Court. Nick requested that the trial court order Ron to “prepare an accounting from November 1, 2021, to [December 2023], in the format of a balance sheet, with annual beginning and ending balances, and report all income and expenses annually.” Nick alleged that Ron had been asked to present an accounting several times, had provided some documentation, but had otherwise “been unresponsive to subsequent requests for an accounting” in violation of his statutory duty as trustee. The petition further sought Ron’s removal as trustee based on claimed violations of his statutory and fiduciary duties. However, Nick’s TEDRA petition did not contend that Ron had
5 Ch. 11.96A RCW.
6
taken any impermissible actions related to the California Properties or otherwise imperiled those trust assets. Nick also claimed that Ron’s move to Mexico had created a foreign trust that was “subject to significant additional and different reporting requirements and tax liabilities compared to a domestic trust” and this had created “the significant possibility of IRS liens” if Ron failed to comply with such requirements. 6 Finally, Nick’s petition also requested appointment of Ron and Tilly’s three sons as co-trustees to resolve problems related to the alleged foreign trust and sought an award of attorney fees pursuant to the relevant statute.
In January 2024, Nick served Ron the summons and petition and a notice for hearing on the petition by certified mail to a post office (PO) box address in Mexico. The trial court heard Nick’s petition at a hearing on February 20, and Ron was not present. The commissioner who heard the matter granted the petition in its entirety that same day. On May 2, Ron moved to vacate the February 20 order pursuant to CR 60 on multiple bases, primarily that he had never been properly served and, because Nick knew how Ron received his mail, it was “likely that [Nick’s] service attempt was made in bad faith to an ineffective address.” Ron averred that he was unaware of the hearing and therefore unable to defend himself against Nick’s allegations. He provided a supporting declaration with several exhibits relevant to Nick’s knowledge of Ron’s mailing address and customs regarding his mail. Nick responded to the motion to vacate, noted that he had “no objection to vacating the order . . . under terms as are just,” and provided his own declaration, as well as one from his counsel, and several
6 Nick expressly abandoned this claim at trial, and it was dismissed with prejudice on February 12, 2025.
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relevant exhibits. Following a hearing on May 17, the trial court granted Ron’s motion to vacate.
On May 30, Nick amended his TEDRA petition. He maintained the requests for relief from his initial petition and added further allegations regarding Ron’s purported breach of his duties as trustee. Specifically, Nick asserted that Ron had failed to obtain an EIN for the trust, open a separate bank account to deposit the trust income, and inform the property managers that the trust now held the ownership interest in the California Properties. On June 10, Ron filed his own TEDRA petition that sought an order to affirm him as “the sole Trustee of the Trust” and for approval of his accounting. Ron’s petition also requested an order to vacate a restriction on distribution the trial court had included in its May 17 order that had vacated the initial February 20 TEDRA order, and an accounting for the period where his sons had served as co-trustees. In the two weeks that followed the filing of Ron’s petition, both parties submitted responsive briefing to address the other’s petitions. On October 3, Ron moved for partial summary judgment on his petition, but the trial court denied it on November 5.
In February 2025, the case proceeded to a bench trial during which Nick, Alan, Erik, and Ron all testified, in addition to a tax preparer who assisted Ron with the tax return for the trust. On February 18, the trial court entered findings of fact and conclusions of law from the bench trial. Among other things, the trial court concluded Ron’s accounting satisfied his obligations under the trusts and relevant statutes, Ron would remain the sole trustee of the trust, Nick’s claims were “without merit [and] brought in bad faith,” and Ron was entitled to attorney fees. The judge
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dismissed all of Nick’s claims with prejudice, and on February 27, Ron moved for entry of judgment on the fee award. Nick filed his opposition a few days later, on March 6. On March 25, the trial court entered judgment for Ron in the amount he had sought and also entered further findings and conclusions regarding the bench trial and its fee award.
Nick timely appealed.
ANALYSIS
I. Abandoned Assignments of Error As an initial matter, Nick assigns error to numerous findings of fact and conclusions of law (FF/CL) entered by the trial court but fails to address them in the argument section of his opening brief. As such, they are abandoned.
RAP 10.3(g) requires a “separate assignment of error for each finding of fact a party contends was improperly made” and “reference to the finding by number.” An appellant “must state each of their issues in their assignments of error and argue them in their opening brief for them to be considered.” Icicle/Bunk, LLC v. Chelan County, 28 Wn. App. 2d 522, 532, 537 P.3d 312 (2023). “We will not consider an inadequately briefed argument.” Norcon Builders, LLC v. GMP Homes VG, LLC, 161 Wn. App. 474, 486, 254 P.3d 835 (2011). “An issue raised and argued for the first time in a reply brief is too late to warrant consideration” and is waived. Cowiche Canyon Conservancy v. Bosley, 118 Wn.2d 801, 809, 828 P.2d 549 (1992). Unchallenged findings are considered verities on appeal. In re Est. of Jones, 152 Wn.2d 1, 8, 93 P.3d 147 (2004). Abandonment of a challenge
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necessarily requires that we treat it as though none was made; the underlying finding therefore becomes a verity.
Nick assigns error to the following FF/CL entered after the February 2025 bench trial: FFs 28, 33, 53, and 55 and CLs 6, 15-19, 22, 25, 26, 28, and 29. However, he fails to provide any argument in his opening brief regarding FFs 53 and 55 or CLs 15, 19, 22, 25, 26 and 29. Accordingly, they are abandoned and the findings will be treated as verities. These findings contain procedural facts related to Ron’s motion to vacate the February 2024 order on Nick’s initial TEDRA petition (FF 53) and the failure of Nick, Erik, and Alan to distribute funds to Ron as ordered after they were removed as co-trustees (FF 55). The relevant CLs went to the trial court’s interpretation of portions of the trust language, specifically its interpretation of the distribution provision contained in article 6.3 (CL 15), the absence of harm to the trust due to Ron’s failure to carry out certain technical requirements regarding tax returns and notice to property managers (CL 19), Nick’s failure to meet his evidentiary burden in order to remove Ron as trustee (CL 22), the relevance of Nick’s bad faith conduct as to the court’s consideration of Ron’s and Nick’s respective entitlement to fees (CLs 25 and 26), and its ultimate decision that Ron was entitled to an award of fees and costs to be paid by Nick (CL 29).
Nick also assigns error to a number of FF/CLs in the March 25, 2025 order and judgment on fees and costs; specifically, FFs 10-14 and CLs 2-4. However, as with his challenges to the February 2025 FF/CL, Nick abandons most of them,
10
FFs 13 and 14 and CLs 2-4, due to his failure to provide any argument in support of those challenges in his opening brief.
While Nick attempts to resuscitate these abandoned assignments of error regarding both orders of the court by offering supportive arguments for the first time in his reply brief, we decline to consider this untimely argument of the merits. See Cowiche Canyon, 118 Wn.2d at 809. As such, we consider only the following properly preserved challenges to findings and conclusions: FFs 28 and 33 and CLs 6, 16-18, and 28 from the February 2025 FF/CL and FFs 10-12 from the March 2025 order and judgment.
II. Interpretation of Living Trust Nick contends that the “trial court’s findings of fact and conclusions of law did not comport with the intent and purposes of the Bypass Trust as set forth in the trust document.” Toward that end, Nick presents challenges to CLs 6 and 18 from the February 2025 FF/CL after the bench trial. In response, Ron avers that the trust language is unambiguous, the trustors’ intent is clear from the trust provisions, and ultimately, the trial court’s conclusions toward that end both logically flowed from the findings that were either unchallenged, and therefore verities, or supported by substantial evidence and within its discretion. We agree with Ron.
“Interpretation of a will or trust instrument is a question of law we review de novo.” In re Wash. Builders Benefit Tr., 173 Wn. App. 34, 75, 293 P.3d 1206 (2013). “Our primary duty when interpreting a will or trust is to give effect to the testator’s/trustor’s intent.” In re Guardianship of Jensen, 187 Wn. App. 325, 331, 350 P.3d 654 (2015). “[I]f a trust’s language is unambiguous, the trust does not
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require interpretation or construction.” Wash. Builders, 173 Wn. App. at 75. “If the language of the instrument is unambiguous, we ascertain the testator’s intent from the language of the instrument itself without extrinsic evidence.” Jensen, 187 Wn. at 331.
A. Distribution Provision Nick contends that the proper interpretation of article 7.2 of the trust, “Distributions of Income and Principal,” does not authorize Ron to disburse the trust income to himself as he sees fit and, further, that “if the [c]ourt must give effect to all the words of the Bypass Trust, the use of the word ‘necessary’ is significant.” (Boldface omitted.) He then seeks to define the term “necessary” in a manner that limits distributions to the surviving trustor to only those that “meet the ‘support, maintenance, and heath’ of the surviving trustor” based on the language of article 6.2, “Beneficiaries; Purposes.” (Boldface omitted.) However, this is despite the plain fact that article 6.2 neither defines nor even uses the word “necessary.” Ron responds that the trustor’s intent is clear from the distribution provision in article 7.2 and the trial court properly concluded that he has “complete discretion to take as much of the income from the Trust” as he determines is necessary for his maintenance, after considering other available assets. We agree with Ron.
Here, the relevant provisions read as follows:
6.2 Beneficiaries; Purposes. The surviving Trustor shall be the primary beneficiary of the trust estate and the trust purposes shall be to provide for his or her health, support, and maintenance in his or her accustomed manner of living. The secondary trust purposes shall be to provide for the reasonable health, support, and maintenance of the Trustors’ children and of the issue of a deceased child of the Trustors.
12
....
7.2 Distributions of Income and Principal. The Trustee may (but is not required to) pay to or apply for the benefit of the surviving Trustor so much of the income or principal of the Bypass Trust as is determined by the Trustee to be necessary, considering other income and assets available to the surviving Trustor, for his or her support, maintenance and health in his or her accustomed standard of living. The surviving Trustor’s continued support, maintenance, and health are paramount and distributions from this Bypass Trust should not be limited in order to maintain the Bypass Trust for other beneficiaries.
If the income of the Bypass Trust is in excess of the needs of the surviving Trustor, the Trustee may distribute some or all of the excess to any one or more of the Trustors’ children and the issue of any deceased child of the Trustors’ for his or her support, maintenance, health and education. The Trustee may also make distributions of principal to any one or more of the Trustors’ children and the issue of any deceased child of the Trustors for his or her support, maintenance, health and education. In making these decisions, the Trustee should consider all pertinent surrounding circumstances including, particularly, the likely future needs of the surviving Trustor.
(Emphasis added) (boldface omitted).
The plain language of each of these provisions is unambiguous and does not require construction. See Wash. Builders, 173 Wn. App. at 75. The trust expressly provides that the “surviving Trustor shall be the primary beneficiary” and the purpose of the trust “shall be to provide for his . . . health, support, and maintenance in his . . . accustomed manner of living” and explicitly states that the needs of the surviving trustor are “paramount” and distributions from the trust “should not be limited in order to maintain the Bypass Trust for other beneficiaries.” (Emphasis added.) It also directs the trustee to consider the future needs of the surviving trustor in making their decisions on distributions. This directly undercuts
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Nick’s proposed reading of the trust language. Notably, the word “necessary” is used in article 7.2 in reference to determinations made “by the Trustee” with regard to “health, support, and maintenance” for his “accustomed manner of living.” Nick is not a trustee, and the sole determination regarding what actions are necessary plainly rests with Ron.
These provisions unambiguously provide Ron with broad authority to distribute the income from the trust in order to maintain the standard of living to which he is accustomed and do not require any consideration of the secondary beneficiaries. The first paragraph of article 7.2 concludes with the directive that the “surviving Trustor’s continued support, maintenance, and health are paramount and distributions from this Bypass Trust should not be limited in order to maintain the Bypass Trust for other beneficiaries”; Nick, his brothers, and their children are secondary beneficiaries of the trust under article 6.2. The trial court’s interpretation of the provisions of the trust regarding Ron’s broad authority as trustee to make distributions is consistent with our de novo review of the plain language of the trust and was therefore not erroneous.
B. Accounting Provision Nick also contends that Ron’s “July Accounting” that was deemed insufficient in the earlier summary judgment proceeding and reintroduced at trial did not comply with the accounting provision contained in the revocable trust. This was so, he avers, because Ron “had comingled trust funds with his personal funds” and did not disclose how he used the distributed funds, which meant that he did not include all transactions related to the trust as required. Ron responds that the
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trial court correctly concluded that his accounting was adequate because it “included bank statements showing all transactions relating to the trust, property management statements, and the end of year statements for each of the California Properties” and the trial court’s decision is supported by evidence in the record. Ron is again correct.
The relevant provision to this aspect of Nick’s challenge is presented under the “Duties of Trustee” section of the revocable trust and reads as follows:
10.7.1 Annual Accountings. After the end of each income tax year for each trust, the Trustee shall prepare a statement showing how the property of the trust is invested and all transactions relating to the trust for the preceding tax year. Within sixty days after the end of the tax year, the Trustee shall furnish a copy of the statement to each adult income beneficiary and the legal guardian of each minor income beneficiary of the trust.
(Boldface omitted.) As was true with regard to the distribution provision analyzed in Section II.A, supra, the language of the accounting provision here is not ambiguous and does not require construction. See Wash. Builders, 173 Wn. App. at 75. As trustee, Ron’s accounting for the revocable trust must include the rents received into trust from the California Properties, distributions made from those funds, and expenditures related to the properties held by the trust. Nick’s challenge on this point rests solely on his contention that the July Accounting “did not include ‘all transactions relating to the trust for the preceding tax year’ because [Ron] had commingled trust funds with his personal funds,” but he fails to offer any argument as to how the existence of other irrelevant transactions would render the information about transactions that did relate to the trust incomplete or inadequate. He simply argues that “[w]ithout all the information on
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the bank accounts, the other beneficiaries of the trust could not determine the actual use of all trust funds and whether distributions to Ronald were necessary.” However, as set out in Section II.A, supra, his reading of “necessary” as used in the trust conspicuously ignores the context of its use, the further directive from the trust that such considerations are “paramount” over any considerations of maintenance of the trust resources for other beneficiaries like Nick, and our directive under case law to read the trust document in its entirety in a manner that would be internally consistent.
The trial court’s interpretation of this language of the trust again comports with our own de novo interpretation and was not erroneous.
C. Findings and Conclusions Regarding Interpretation of Trust Language
Nick’s claims that the trial court erroneously interpreted certain provisions of the revocable trust and therefore erred in its ultimate decision regarding retention of Ron as trustee are supported only by argument in his challenges to CLs 6 and 18 from the February 2025 FF/CL and FFs 10 and 11 from the March 2025 judgment and order. As explained in Part I, supra, Nick’s challenge to CL 15, that the “Revocable Trust empowers Ron with discretion about how much income to disburse to himself and[,] contrary to [Nick’s] assertion, Ron did not need to obtain the permission of Nick, Erik[,] and Alan before making these disbursements,” is abandoned by his failure to provide relevant argument or authority.
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This court will uphold findings of fact on appeal “if they are supported by substantial evidence in the record.” In re Est. of Kessler, 95 Wn. App. 358, 369, 977 P.2d 591 (1999). “‘Substantial evidence’ is the quantum of evidence sufficient to persuade a rational, fair-minded person the premise is true.” Endicott v. Saul, 142 Wn. App. 899, 909, 176 P.3d 560 (2008). “Where there is conflicting evidence, the reviewing court need only determine whether the evidence most favorable to the responding party supports the challenged findings.” Kessler, 95 Wn. App. at 369. We defer to the trial court’s evaluation of “the persuasiveness of the evidence and the credibility of the witnesses.” Endicott, 142 Wn. App. at 909. More to the point, we “‘will not substitute our judgment for the trial court’s, weigh the evidence, or adjudge witness credibility.’” In re Marriage of DeVogel, 22 Wn. App. 2d 39, 48, 509 P.3d 832 (2022) (quoting In re Marriage of Greene, 97 Wn. App. 708, 714, 986 P.2d 144 (1999)). After our review of the findings, we then consider if the trial court’s conclusions of law logically flow from those that are either unchallenged or supported by substantial evidence. See Bartlett v. Betlach, 136 Wn. App. 8, 18, 146 P.3d 1235 (2006). Conclusions of law are reviewed de novo. Jones, 152 Wn.2d at 8-9. If “some findings are actually conclusions of law or mixed findings of fact and conclusions of law, we review the factual components under the substantial evidence standard and the conclusions of law, including those mistakenly characterized as findings of fact, de novo.” In re Est. of Haviland, 162 Wn. App. 548, 561, 255 P.3d 854 (2011).
CL 6 states, “Ron’s July Accountings met the requirements of Article 10.7.1 of the Revocable Trust.” The following unchallenged findings are relevant here:
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[FF] 57. On May 31, 2024, Ron provided an accounting to Erik, Alan, and Nick describing the assets of the Bypass Trust, describing the total rental income received from January 2022 through March 2024, and showing that Ron had distributed all the rental income to himself over this period.
....
[FF] 59. On July 8, 2024, Ron completed the tax returns for the Bypass Trust for 2022 and 2023, which showed no tax owing because Ron had previously paid the income tax through his personal taxes.
[FF] 60. On July 24, 2024, Ron amended the May 31 Accounting by breaking out the income and distributions by year, and Ron included: 1) redacted copies of his bank statements showing all the deposits of rental income; and 2) copies of the annual statements from each of the California properties (“July Accounting”).
....
[FF] 64. Nick opposed Ron’s motion for summary judgment, although he did admit on Page 7 of his Response that Ron’s July Accounting satisfied the statutory requirements for a trust accounting.
These unchallenged findings are verities on appeal and amply support the trial court’s conclusion of law that the documentation described therein satisfied the plain language of the accounting requirement set out in the revocable trust. Nick suggests in briefing that because Ron’s October 2024 motion for partial summary judgment that relied on much the same evidence was denied, this also rendered the documentation insufficient at trial. However, it is noteworthy that despite this insinuation, Nick did not challenge FF 64, the court’s finding that recounted his admission at summary judgment that Ron’s accounting “satisfied the statutory requirements for a trust accounting.” See RCW 11.106.020.
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Nick’s challenges to CL 18 from the February 2025 FF/CL and FFs 10 and 11 from the March 2025 judgment and order, all of which go to the trial court’s interpretation of the distribution provision of the trust, also fail. CL 18 contains the trial court’s determination that “[a]s stated in the Bypass Trust, the distributions from the Bypass Trust should not be limited to maintain the Bypass Trust for other beneficiaries.” In FF 10, the trial court found, based on the evidence of Ron’s “current expenses, income, and savings,” that he “reasonably needed and continues to reasonably need all annual proceeds from the trust for his ‘support, maintenance and health in his . . . accustomed standard of living.’” The trial court explicitly found Ron’s testimony regarding his finances credible in FF 11:
[Ron] credibly testified that without the ability to receive distributions from the Trust, he would not be able to pay for his basic needs—
especially given the depletion of his savings and 401(k) account not only to pay for Tilly’s medical needs but also to pay for litigation expenses as a result of Nick Czarnecki’s decision to file this lawsuit.
First, as set out in Section II.A, supra, the trial court’s interpretation of the distribution provision in CL 18 is consistent with our own de novo interpretation of the plain language of the trust and was proper. Nick’s challenge to CL 18 separately fails on that basis alone. Second, as with the challenge to CL 6, there are a number of unchallenged findings from which CL 18 logically flows. The trial court entered FF 15 regarding Ron’s accustomed standard of living:
By 2019, Ron’s and Tilly’s accustomed standard of living included having more than $300,000 in savings, owning their home in Everett with a single mortgage, owning their home in Mexico outright, being able to take vacations, and having enough left over income to give gifts to their sons and grandchildren.
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It also found in FF 27 that
[i]n January 2022, Ron’s savings had been depleted and the proceeds from the sale of the Everett home were depleted by the additional mortgages Ron and Tilly had taken on their home to pay for Tilly’s end of life care.
FF 11 expressly contains the trial court’s credibility determination regarding Ron’s testimony, and we do not disturb those credibility determinations on appeal. DeVogel, 22 Wn. App. 2d at 48. FF 10 specifically relies on that evidence, Ron’s credible testimony, in reaching its reasonableness finding. Additionally, CLs 16 and 17 from the February 2025 judgment and order, both of which are analyzed in detail in Section III.A, infra, and are proper, separately support the trial court’s ultimate resolution of the matters before it. CL 16, actually a mislabeled finding of fact, states that it “is clear to the [c]ourt that Ron’s distributions to himself were reasonable and necessary considering his income and assets,” and CL 17 concluded that it “was not a breach of fiduciary duty for Ron to distribute the trust income to himself.” Finally, unchallenged CLs 1-4 contain accurate statements of the controlling authority regarding the interpretation of a trust document and collectively demonstrate that the trial court’s interpretation was properly rooted in law.
The various unchallenged findings, including those left unchallenged by abandonment, either mirror or support the findings of fact and conclusions of law to which Nick assigns error. As to the trial court’s interpretation of the trust language, Nick has failed to demonstrate that any of the challenged findings were not supported by substantial evidence or the conclusions of law to which he
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assigned error did not logically flow from those unchallenged or supported findings.
III. Removal of Ron as Trustee Nick’s other significant contention on appeal is that the trial court erroneously denied his request to remove Ron as trustee. He avers that the trial court should have granted that requested relief because the evidence did not show that Ron adequately considered his financial circumstances before he distributed the income from the trust to himself. Toward this end, Nick challenges FFs 28 and 33 and CLs 16 and 17 from the February 2025 FF/CL. Ron responds that the “record contains substantial evidence to show that Ron considered his income, assets, and expenses when making distribution decisions” and the challenged findings were “based on Ron’s testimony explaining his thought process and financial picture at the time he arrived in Mexico, at the end of his first year, as Trustee, and at the time of trial.” Ron is correct.
The same legal standards set out in Section II.C, supra, apply to the challenges to findings and conclusions related to this aspect of Nick’s TEDRA petition. Further, with regard to the conclusions of law related to the trial court’s rejection of Nick’s request to remove Ron as trustee, we will not reverse the trial court’s decision regarding the removal of the trustee unless it has abused its discretion. In re Est. of Ehlers, 80 Wn. App. 751, 761, 911 P.2d 1017 (1996). “Under an abuse of discretion standard, the trial court’s decision should be upheld unless it is ‘manifestly unreasonable, or exercised on untenable grounds, or for untenable reasons.’” In re Est. of Black, 153 Wn.2d 152, 172, 102 P.3d 796 (2004)
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(internal quotation marks omitted) (quoting State v. Downing, 151 Wn.2d 265, 272, 87 P.3d 1169 (2004)). “Any beneficiary of a trust” may petition the trial court to change the trustee for any “reasonable cause.” RCW 11.98.039(4)(c); see also RCW 11.96A.020. “[T]rustees, as fiduciaries, owe to the beneficiaries the highest degree of good faith, care, loyalty[,] and integrity.” Esmieu v. Schrag, 88 Wn.2d 490, 498, 563 P.2d 203 (1977). “A trustee’s duties and powers are determined by the terms of the trust, by common law, and by statute.” Cook v. Brateng, 158 Wn. App. 777, 785, 262 P.3d 1228 (2010). “A trustee who breaches [their] duties may be removed as trustee by petition of the beneficiary.” Ehlers, 80 Wn. App. at 761. “Reasonable cause has been found in situations involving conflict of interest and bad will generated by litigation.” Id. “The petitioning beneficiary must, however, demonstrate that removal is clearly necessary.” Id.
A. Findings and Conclusions Regarding Removal of Trustee The relevant challenged findings and conclusions stated as follows:
[FF] 28. At this time, Ron considered his assets and liabilities, and he decided to distribute all the income from the Bypass Trust to himself until the Mexico [h]ome was finished and he could re-assess his circumstances.
....
[FF] 33. Ron considered his assets and liabilities, determined that he needed all the income from the Bypass Trust for his support, health, and maintenance, and he made the reasonable decision to keep distributing all the rental income from the Bypass Trust to himself until his financial circumstances improved.
....
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[CL] 16. It is clear to the [c]ourt that Ron’s distributions to himself were reasonable and necessary considering his income and assets.
[CL] 17. It was not a breach of fiduciary duty for Ron to distribute trust income to himself.
Here, the plain language of FFs 28 and 33 establishes that they reflect the trial court’s acceptance of Ron’s testimony on the points set out in each finding. Accordingly, they rest on credibility determinations that are not subject to judicial review. See Endicott, 142 Wn. App. at 909; DeVogel, 22 Wn. App. 2d at 48.
As noted in Section II.C, supra, CL 16 is plainly a finding of fact and not a conclusion of law. We therefore review it under the substantial evidence standard. See Haviland, 162 Wn. App. at 561. Further, the following unchallenged findings, now verities on appeal, should be considered in conjunction with CL 16:
[FF] 15. By 2019, Ron’s and Tilly’s accustomed standard of living included having more than $300,000 in savings, owning their home in Everett with a single mortgage, owning their home in Mexico outright, being able to take vacations, and having enough left over income to give gifts to their sons and grandchildren.
....
[FF] 17. Ron and Tilly were forced to take out additional mortgages on their Everett home and, due to the considerable medical costs, spend much of their savings and withdraw from Ron’s 401(k) to pay for Tilly’s treatment. At no time did Nick, Erik[,] or Alan offer to financially assist in the payment of Tilly’s treatment.
....
[FF] 19. After Tilly passed, Ron struggled emotionally with the idea of staying in the family home where his wife spent her last years and days. Consequently, he decided to sell the Everett home and move to and live in the Mexico house full time. His decision was based on multiple factors including the fact that living in the Mexico house would generally be more affordable than staying in the Everett home.
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....
[FF] 26. When he arrived at the Mexico [h]ome in January 2022, the Mexico [h]ome was still unfinished and required significant work to make it ready for Ron to live there full-time.
[FF] 27. In January, 2022, Ron’s savings had been depleted and the proceeds from the sale of the Everett [h]ome were reduced by the additional mortgages Ron and Tilly had taken on their home to pay for Tilly’s end of life care.
....
[FF] 31. By the end of September, 2022, Ron had spent approximately $100,000 to complete and make the Mexico [h]ome livable, half of which he paid for using his diminished savings and half of which he borrowed from two banks.
[FF] 32. At this point, Ron’s financial circumstances were significantly worse than he had thought when he made the financial disclosure to his sons in August, as the loans essentially cancelled out his social security income leaving only the Bypass Trust as income, and his saving were significantly depleted.
Collectively, FFs 15, 17, 19, 26, 27, 31, and 32 further describe Ron’s financial trajectory and explain his decision to distribute the trust income to himself. Ron testified at length during trial regarding the couple’s finances prior to Tilly’s treatment, expenses and debt associated with that treatment, the sale of the Everett house, and the efforts he undertook to improve the house in Mexico so that it could serve as a full-time residence. The same evidence that supports these unchallenged findings, mostly Ron’s testimony that the trial court found credible, amply supports the finding in CL 16 that Ron’s distributions were reasonable.
Nick contends that the evidence does not show that Ron considered his circumstances before deciding to self-distribute but has not challenged any of the findings that reflect the facts the trial court found regarding Ron’s reasoning for
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that decision or otherwise explained how the precise showing he contends was lacking is required under the law. His briefing on this issue amounts to a disagreement with the trial court’s credibility and ultimate fact determinations, but he largely fails to engage with the relevant legal standard. Fatal to his argument on this point is that the controlling law on such challenges clearly establishes that on review, we do not consider whether we would reach different findings from those of the trial court, only whether those findings are supported by substantial evidence in the record. Sunnyside Valley Irrig. Dist. v Dickey, 149 Wn.2d 873, 879-80, 73 P.3d 369 (2003).
Finally, CL 17 rests on the trial court’s interpretation of the broad authority granted to Ron as trustee under the distribution provision set out in article 7.2 of the trust. Its interpretation of that provision is consistent with our de novo interpretation explained in Section II.A, supra. Because the distributions Ron made are expressly authorized under the plain language of article 7.2, they cannot constitute a breach of any fiduciary duty and CL 17 is proper both based on the record and controlling law.
We now consider whether, in light of these properly supported findings and conclusions, the trial court erred when it declined to remove Ron as trustee as a result of his decision to distribute the income of the trust to himself. 7
7 Nick also contends that Ron should have been removed due to conflict created by the
litigation, but he presents this issue for the first time on appeal and fails to acknowledge the controlling standard under RAP 2.5(a) much less engage with that test to establish that we should consider a matter not raised in the trial court.
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B. Standards for Removal of Trustee Not Met Nick avers that Ron should have been removed as trustee because his decision to distribute trust income to himself placed the real property interests of the trust at risk. Again, we will not reverse the trial court’s decision as to trustee removal “absent a manifest abuse of discretion,” and a “petitioning beneficiary must demonstrate that removal is clearly necessary to save the trust property.” Ehlers, 80 Wn. App. at 761 (emphasis added). We disagree with Nick and conclude that the trial court did not abuse its discretion when it allowed Ron to continue to serve as trustee.
Here, as set out in Section III.A, supra, the trial court entered a number of unchallenged findings of fact and conclusions of law regarding Ron’s conduct as trustee. The trial court entered FFs 15, 17, 19, 26, 27, 31, and 32 that all captured Ron’s reasoning for the distributions to himself, a determination he was expressly permitted to make unilaterally under the terms of the trust, as analyzed in Section II.A, supra. Ron’s distributions of trust income to himself were not only authorized and justified but also did not put any trust property at risk. The only circumstance that could undermine such distributions would be if he failed to maintain sufficient funds in the trust to pay for any expenses related to the California Properties, but Nick makes no such claim here. Further, FFs 28 and 33 both contain credibility determinations and accept Ron’s testimony regarding the factors he considered prior to making the distribution decisions. CL 17 properly reads the language of the trust as expressly authorizing such distributions, so they necessarily could not constitute a breach of Ron’s fiduciary duties as trustee.
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Accordingly, the trial court did not abuse its discretion when it declined to remove Ron as trustee because its decision is amply supported by the trial court record and Nick, as the party seeking Ron’s removal, failed to satisfy his burden to establish that such action was necessary to protect trust property.
IV. Competing Requests for Attorney Fees in Trial Court Nick also claims the trial court erred both when it granted attorney fees to Ron and denied his own request for a fee award after trial. Toward that end, he notes the trial court entered a finding of fact regarding his financial situation, FF 12 from the March 2025 judgment and order, and avers this establishes that the trial court improperly considered his ability to pay a fee award to Ron. He asserts that such consideration was “directly contrary to the law that ability to pay is not a factor in determining whether to award attorneys’ fees and costs” and “the trial court’s consideration of improper factors makes the award manifestly inequitable.” Ron responds that the trial court “found that Nick acted in bad faith, increased the costs of litigation, and pursued spurious claims that did not benefit the Trust,” all of which independently support the trial court’s decision to award him fees and decline Nick’s request. Ron is correct.
“We review an award of fees and costs under [RCW 11.96A.150] for abuse of discretion. A court abuses its discretion if it exercises it in a manner that is manifestly unreasonable, on untenable grounds, or for untenable reasons.” In re Joanne K. Blankenship Survivor’s Tr., 18 Wn. App. 2d 686, 704, 493 P.3d 751 (2021) (citation omitted). TEDRA grants courts wide discretion to determine an award of attorney fees. The relevant statute provides as follows:
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Either the superior court or any court on an appeal may, in its discretion, order costs, including reasonable attorneys’ fees, to be awarded to any party: (a) From any party to the proceedings; (b) from the assets of the estate or trust involved in the proceedings; or (c)
from any nonprobate asset that is the subject of the proceedings.
The court may order the costs, including reasonable attorneys’ fees, to be paid in such amount and in such manner as the court determines to be equitable. In exercising its discretion under this section, the court may consider any and all factors that it deems to be relevant and appropriate, which factors may but need not include whether the litigation benefits the estate or trust involved.
RCW 11.96A.150(1). “The ability to pay does not provide an equitable basis for the award. Rather equity requires some finding of fault that in fairness requires a party to pay.” In re Est. of Reugh, 10 Wn. App. 2d 20, 70, 447 P.3d 544 (2019) (citation omitted).
FF 12 from the March 2025 judgment and order reads as follows:
It is also worth noting that Nick Czarnecki testified at trial that he and his wife have over $500,000 saved for retirement and own their home worth over $1,000,000. There was seeming little to gain for Nick Czarnecki in pursuing this lawsuit; in contrast, the Respondent [(Ron)] had much to lose if he did not fully respond.
Standing alone, this finding does not establish that the trial court rested its rulings on the parties’ respective requests for fees on Nick’s financial circumstances. FF 12 merely describes a factor the trial court considered when it engaged in the broader balancing of the equities; Nick had “little to gain” while Ron “had much to lose.” Again, the trial court is expressly directed by the statute to “consider any and all factors that it deems to be relevant and appropriate” in its determination as to the equities of a fee award. RCW 11.96A.150(1). Nick does not explain how this one factor overrode the others that the trial court also clearly considered in reaching its decision as to fees.
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Also in support of its decisions regarding attorney fees, the trial court entered CLs 25 and 26 from the February 2025 FF/CL, the challenges to which were abandoned, that stated as follows:
[CL] 25. The bad faith actions of Nick are relevant in determining whether Ron should be awarded attorney fees and costs.
[CL] 26. The bad faith actions of Nick are relevant in determining whether Nick should be awarded attorney fees and costs.
Nick similarly abandoned his challenges to CLs 2 and 3 in its March 2025 judgment and order, which are actually findings of fact, regarding the reasonableness and necessity of the attorney time submitted in support of Ron’s request for fees. Accordingly, they are verities on appeal.
However, Nick’s challenge to CL 28 from the February 2025 FF/CL entered after the bench trial is properly supported by argument and authority in his opening brief and survives for merits review. CL 28 plainly contains both findings of fact and conclusions of law and states as follows:
The [c]ourt finds that Nick’s claims were without merit, were brought in bad faith, and that Nick’s conduct in this dispute increased the costs of litigation. Nick’s lawsuit did not benefit the Trust, as his claims were specious, and there was no genuine dispute about interpretation of the Bypass Trust. Ron is the prevailing party, and there is no cause to award fees from the trust.
We review its component parts under the relevant standard, regardless of the label the court applied. See Haviland, 162 Wn. App. at 561. The portions of CL 28 that are actually findings of fact either rest on other unchallenged findings or are supported by substantial evidence. For example, after the conclusion of the bench trial where it heard testimony from Ron and all three of his sons, the trial court
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found that despite their concerns regarding the trust (FF 29), none of the sons told Ron that the trust required an EIN (FF 39) or a separate tax return (FF 40), or that notice to the property managers in California regarding the transfer of title was also required (FF 41). Instead, the trial court found that the sons chose to remain silent (FF 38). This course of conduct supports the trial court’s determination that Nick’s decision to bring the TEDRA petition was made in bad faith and was not intended to benefit the trust. It establishes that rather than acting to ensure Ron complied with federal tax law and the terms of the trust or otherwise acting to protect the trust and avoid potential tax problems or threats to the trust property, Nick opted to file his meritless TEDRA petition.
Additionally, the trial court entered a number of other findings after the trial, unchallenged on appeal, regarding Nick’s conduct in handling service of the TEDRA petition on his father that it ultimately determined demonstrated his bad faith litigation tactics. The trial court expressly found that Nick only served the petition via mail to a PO box in Mexico (FF 43) even though he “knew that Ron could not reliably receive mail at this PO Box” (FF 44), at “the time the petition for removal was filed, Ron was still receiving his mail at Nick’s home, where it was scanned and emailed to Ron” (FF 45), and at the time Nick attempted service by certified mail, “each of Ron’s sons knew Ron’s e[-]mail address, phone number, and the contact information of Ron’s estate planning attorney” (FF 46). It further found that Nick made no attempt to serve the petition electronically or to ensure “Ron received it despite having multiple methods of communicating with Ron” (FF 47), and despite this lack of confirmation, Nick had Ron removed and himself, Alan,
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and Erik appointed as trustees, and even obtained an award of attorney fees against Ron (FF 48). The trial court concluded that these evasive bad faith tactics undoubtably increased the costs of the litigation (CL 28). Further, as described in Part II, supra, Nick’s other claims in the TEDRA petition were without merit; the plain and unambiguous language of the trust granted Ron the discretion to distribute the rental income from the California Properties to himself (CL 15), and Ron’s accounting was approved by the court (CLs 5 and 6) such that there was no legal basis to remove Ron as trustee (CL 22). The trial court also entered unchallenged FF 69 regarding the litigation expenses Ron incurred:
Over the course of this dispute, Ron has incurred significant attorney fees and travel expenses, which Ron has been largely required to pay for out of his largely depleted savings due in part to his sons’
refusal to disburse funds to him from the Bypass Trust during and after their period of acting as co-trustees.
Contrary to Nick’s assertion, the trial court’s rulings on attorney fees rest on its findings contained in CL 28 regarding his actions throughout the litigation, not on the question of whether he could afford to pay a fee award. The court decided Nick’s deliberate conduct required him to compensate Ron for the expense of defending against his petition.
Despite its labeling, CL 28 is a mixed finding of fact and conclusions of law.
The portion that reflects findings of the trial court is supported by substantial evidence adduced at trial. The conclusion of law that Ron was the prevailing party at trial and, therefore, there was “no cause to award fees from the trust” logically flows from the findings contained in CL 28 and the myriad other supported or unchallenged findings analyzed supra. Accordingly, the trial court’s identification
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and weighing of the equities in this case does not reflect an abuse of discretion, and Nick fails to carry his burden to demonstrate error as to its denial of Nick’s request for a fee award and award of fees to Ron.
V. Attorney Fees on Appeal Nick also seeks an award of fees on appeal as a matter of equity, should he prevail. Ron makes a similar request in his response brief and contends that he is entitled to an award of fees on appeal because the trial court “found that Nick brought this litigation in bad faith, that his conduct increased the costs of the litigation, and that his claims were specious and did not benefit the trust” and this appeal continues the same “inequitable” course of conduct.
RAP 18.1(a) permits such an award if “applicable law grants to a party the right to recover reasonable attorney fees or expenses on review” and the party requests an award. The party seeking a fee award must “devote a section of its opening brief to the request for the fees or expenses.” RAP 18.1(b). Again, TEDRA separately grants us wide discretion to award attorney feels on appeal. RCW 11.96A.150(1).
As analyzed at length herein, Nick’s appeal does not raise any meritorious issues; ample evidence exists in the record to support the trial court’s determinations that this litigation was pursued in bad faith, and Nick’s conduct in litigation needlessly increased the costs to Ron to defend against this suit.
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Accordingly, we award Ron fees on appeal contingent upon his compliance with the procedural requirements set out in the RAPs.
Affirmed.
WE CONCUR: