Kellar v. Estate of Kellar

291 P.3d 906, 172 Wash. App. 562
CourtCourt of Appeals of Washington
DecidedDecember 31, 2012
DocketNo. 66828-5-I
StatusPublished
Cited by27 cases

This text of 291 P.3d 906 (Kellar v. Estate of Kellar) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kellar v. Estate of Kellar, 291 P.3d 906, 172 Wash. App. 562 (Wash. Ct. App. 2012).

Opinion

Appelwick, J.

¶1 — After her husband’s death, Donna Kellar challenged the validity of their prenuptial agreement. The trial court properly struck portions of her declaration made in violation of the dead man’s statute, RCW 5.60.030, and properly concluded that the Estate had not waived the protections of the dead man’s statute. We affirm denial of summary judgment to Donna on the fairness of the prenuptial agreement. We reverse the grant of the Estate’s summary judgment motion on the theories of judicial estoppel and ratification. We reverse the denial of the Estate’s summary judgment motion to find the prenuptial agreement procedurally fair and therefore valid. We affirm the trial court determination that Donna’s challenge to the prenuptial agreement did not trigger a no-contest clause in her husband’s will. We affirm the award of attorney’s fees by the trial court.

FACTS

¶2 Ken and Donna Kellar1 began dating in October 2000. Ken proposed in June 2001 and again at the begin[568]*568ning of September 2001. Less than three weeks later, they flew to South Dakota and were married on September 19, 2001. At the time, Donna was working as a waitress and earning approximately $20,000-25,000 per year. She also owned and managed approximately six pieces of real property. In contrast, Ken was worth between $15 and $93 million.

Prenuptial Agreement

¶3 Prior to the wedding, Ken and Donna signed a prenuptial agreement. The agreement was initially drafted by Ken’s attorney, Mark Packer. Packer sent Ken his first draft in June 2001. In a letter to Ken, Packer wrote that a “key element would be complete disclosure of the financial status of each party to the other before signing and proof thereof,” and that Donna “needs to consult her own lawyer separately before signing anything.” The draft prenuptial included a blank financial disclosure sheet.

¶4 On September 6, Ken and Donna met with mediator Ron Morgan. Neither party had counsel present. Donna is certain the draft prenuptial agreement was not in front of them at the mediation, and Morgan stated that he could not recall a prenuptial agreement being used at mediation. Morgan did not remember any specific financial documents being used at mediation; he did not recall any discussion of Ken’s net worth or any list of assets or properties. He also stated that although he did not give legal advice, if he thought one party was being taken advantage of he would have pulled them aside and told them to get an attorney. After the mediation, Morgan memorialized Ken and Donna’s agreement:

[T]he parties agree that in the event they separate and/or file for divorce within four years of the date of their marriage, Wife shall receive from Husband the sum of $25,000 for each full year of marriage prior to said separation and/or filing. In the event they separate and/or file for divorce any time after four years of marriage, Wife shall receive from Husband the sum of [569]*569$500,000. In the event of Husband’s death while they are married and living together, Wife shall receive $500,000 from Husband’s estate or from such other fund that Husband may choose to create.

¶5 On September 11, Packer sent the draft agreement to Donna’s attorney, Matt Peach. Donna claims she did not discuss Ken’s assets with Peach, and Peach could not recall ever seeing a list of assets. Peach did not tell Donna what disclosures should be made prior to entering a prenuptial agreement. But, he did communicate with Packer after the mediation. He requested that the agreement be edited to accurately reflect that Donna would get $25,000 per year of marriage, regardless of how long they were married. Peach further told Packer:

Donna also understood that anything acquired after the marriage was going to be community property and the prenuptial does not reflect that. If Ken wants to keep property he acquires in his name as separate property after the marriage Donna would accept that change in their agreement as outlined in the prenuptial because she loves him and does not wish to quibble. Anything that is put in both their names would be community property after the marriage occurs.

¶6 The agreement was revised, and Peach confirmed that the revised version reflected his client’s intent. Ken and Donna signed the revised agreement on September 14, five days before the wedding. At the time they signed the agreement, Donna was unsure if they would actually get married.

¶7 The agreement provided that in the event of divorce or Ken’s death, Donna would receive $25,000 for each year of marriage and an additional amount of $500,000 if they were married for at least four years before divorce or Ken’s death. The $500,000 sum was to be paid out in 20 annual payments. The agreement also included reciprocal restrictions on spousal and community property rights. Specifically, they each waived their interest in community property, the right to pursue spousal maintenance, and the right [570]*570to statutory benefits such as spousal inheritance. Each spouse’s separate property was to remain separate, and new assets acquired during the marriage were to remain separate property.

¶8 Ken and Donna each initialed a representation in the prenuptial agreement that

[e]ach of the parties individually own certain property, the full nature and extent of which has been disclosed by each to the other, and the parties by affixing their initials to this paragraph represent and warrant that they have satisfied themselves as to the fullness and accuracy of the disclosure of said assets each to the other and the respective values thereof.

Despite this representation, the agreement does not include any lists or descriptions of assets. But, it is the only provision of the agreement that required their initials.

South Dakota Gaming Licenses

¶9 Ken’s business dealings included operating a number of casinos in South Dakota. Under South Dakota law, an individual could hold licenses to operate only three casinos. Ken used trusted employees and relatives to obtain licenses to operate casinos beyond his individual quota.

¶10 In 2004, Ken’s attorney, Richard Pluimer, applied for licenses on Donna’s behalf. In January 2005, the South Dakota Gaming Commission (Gaming Commission) recommended denial of the application, because her marital community already owned the maximum number of licenses. Donna then sought declaratory relief. At a subsequent hearing, the Gaming Commission’s primary concern was whether granting licenses to Donna could inure to the financial benefit of Ken. Pluimer and Donna sought to persuade the Gaming Commission that Ken and Donna kept separate assets.

¶11 The prenuptial agreement was presented, and Donna asserted she signed the agreement “because of a prior marriage, I had financial problems and I didn’t want [571]*571that to happen again, and because Ken had a substantial amount of money, I’m sure he wanted to protect his assets as well.

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Cite This Page — Counsel Stack

Bluebook (online)
291 P.3d 906, 172 Wash. App. 562, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kellar-v-estate-of-kellar-washctapp-2012.