FILED SEPTEMBER 19, 2024 In the Office of the Clerk of Court WA State Court of Appeals, Division III
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON DIVISION THREE
ROBERTO CASTRO, Personal ) No. 39847-1-III Representative of the Estate of EVELYN ) L. STENNES, ) ) Respondent, ) ) v. ) ) ALEX THOMASON, individually and ) ALEXANDER HARRIS THOMASON ) and KATY ANNE THOMASON, a ) marital community; and ALEX GROUP, ) LLC, ) ) Appellants. ) UNPUBLISHED OPINION ) ) ALEX THOMASON, individually and ) ALEXANDER HARRIS THOMASON ) and KATY ANNE THOMASON, a ) marital community; and ALEX GROUP, ) LLC, ) ) Appellants, ) ) v. ) ) STEPHANIE TAYLOR, in her capacity as ) the Personal Representative of the Estate ) of BERT STENNES, ) ) Respondent. ) No. 39847-1-III Castro v. Thomason
PENNELL, J. — Alex Thomason, individually and together with his wife, Katy
Anne Thomason, and his company, Alex Group, LLC (collectively Alex Thomason)
appeal from a summary judgment order dismissing their third-party complaint against
the Estate of Bert Stennes. We affirm.
FACTS 1
Evelyn Stennes died in 2009, after 50 years of marriage to Bert Stennes. At
the time of her death, the Stennes marital community held assets worth $3.5 million.
Ms. Stennes’s will directed the estate’s personal representative to place her portion of the
marital assets into an exemption equivalent trust or a marital trust. The will nominated
Bert Stennes as personal representative and, after his appointment by the probate court,
Mr. Stennes served in that capacity until his death in 2017. During his time as personal
representative, Mr. Stennes did not abide by the terms of his wife’s will. He neither
divided the community assets nor funded a trust as directed by the terms of the will.
In 2012, Mr. Stennes became acquainted with attorney Alex Thomason. At the
time, Mr. Thomason was 37 years of age and Mr. Stennes was 88. Mr. Thomason and
Mr. Stennes became friends. Mr. Thomason also served as Mr. Stennes’s legal counsel.
1 Some facts are drawn from this court’s opinion in a previous appeal from the same superior court action. See Castro v. Thomason, No. 37995-7-III (Wash. Ct. App. Nov. 23, 2021) (unpublished), https://www.courts.wa.gov/opinions/pdf/379957_unp.pdf.
2 No. 39847-1-III Castro v. Thomason
On April 18, 2013, Mr. Stennes opened an investment account under the name
of Ms. Stennes’s estate. He deposited $775,528.85 in liquid assets into the account.
Less than one week later, Mr. Stennes withdrew $160,000.00 from the account. He
then loaned $400,000.00 to Mr. Thomason so Mr. Thomason could purchase property
adjacent to Mr. Stennes’s land. Mr. Thomason signed a promissory note to evidence the
loan. The loan was interest free for seven years. In turn, Mr. Thomason leased some of
the purchased property to Mr. Stennes for development into an orchard.
On November 16, 2016, Bert Stennes and Alex Thomason executed an
“Agreement Cancelling Note and Terminating Joint Operating Agreement.” Clerk’s
Papers (CP) at 52-61. Mr. Thomason was serving as Mr. Stennes’s legal counsel at the
time. The agreement canceled the outstanding principal of $186,672.00 on the
$400,000.00 loan. The agreement also included the following clause:
7. Indemnification and Hold Harmless. [Bert Stennes and Stennes Point Orchards, Inc.] and [Alex Thomason, a married person; Alex Group, LLC; and PJA Holdings, Inc.] agree to indemnify and hold each other harmless against any and all claims, demands, suits, actions, expenses, accountants’ fees, attorneys’ fees, expert witness fees, and all losses and damages of every kind and nature, arising out of or in connection with the termination of the 2013 Note, 2014 Lease, 2015 Amendment and this agreement.
Id. at 53.
3 No. 39847-1-III Castro v. Thomason
Also on November 16, 2016, Mr. Stennes amended his last will and testament.
The will exercised his power of appointment under Ms. Stennes’s trust to direct the
proceeds of Evelyn Stennes’s trust to be incorporated into a new trust created by his will:
the Stennes Family Trust. The Stennes Family Trust was created to benefit the Stenneses’
three children and a friend of Mr. Stennes. Mr. Stennes’s will stated the funds from
Evelyn Stennes’s trust would be disbursed only to their three children. Mr. Stennes’s
amended will also included three clauses that: (1) terminated business transactions with
Mr. Thomason, (2) released any claims by Mr. Stennes’s estate related to Mr. Stennes’s
business transactions with Mr. Thomason, and (3) directed Mr. Thomason be defended
and indemnified from any claims made by Mr. Stennes’s descendants or beneficiaries of
the Stennes Family Trust.
Bert Stennes died in 2017. His will was admitted into probate and, in 2019,
Stephanie Taylor was appointed personal representative of his estate. Robert Castro was
appointed as a successor personal representative of Evelyn Stennes’s estate in 2018.
Mr. Castro’s predecessor, as personal representative of Evelyn Stennes’s estate,
filed a creditor’s claim with Bert Stennes’s estate, alleging Mr. Stennes had breached
his fiduciary duties as personal representative. The funds transferred by Mr. Stennes to
Mr. Thomason were identified as an example of the breach of fiduciary duties.
4 No. 39847-1-III Castro v. Thomason
After Mr. Castro was appointed as personal representative, he initiated litigation
against Mr. Thomason in Okanogan County Superior Court, seeking recovery of
$160,000 in misappropriated funds. Mr. Castro’s complaint articulated three causes of
action: (1) equitable lien, (2) unjust enrichment and constructive trust, and (3) accounting.
The appeal before us arises from this litigation.
Mr. Castro, joined by Ms. Taylor in her capacity as the personal representative of
the estate of Bert Stennes, later filed a separate lawsuit against Mr. Thomason in Chelan
County Superior Court under the same theories as the Okanogan County litigation. In
response to written discovery requests from Mr. Thomason, the estates produced a joint
prosecution agreement, later replaced by a confidentiality agreement, specifying the joint
participants’ desire to share privileged and confidential information amongst themselves
to promote their “common interests, common purpose and mutual benefit” in connection
with the cases against Mr. Thomason. CP at 227. The estates also entered into a loan
agreement where Mr. Stennes’s estate would fund the claims pursued by Evelyn’s estate
against Mr. Thomason.
Within his amended answer to the complaint in the Okanogan County case, Mr.
Thomason asserted a third-party complaint against Stephanie Taylor, in her capacity as
the personal representative of Bert Stennes’s estate. Mr. Thomason averred the Bert
5 No. 39847-1-III Castro v. Thomason
Stennes estate had a duty to defend and indemnify Mr. Thomason against claims by
Evelyn Stennes’s estate pursuant to the 2016 agreement and the terms of Bert Stennes’s
will. Ms. Taylor denied any such duty existed and moved under CR 12(b)(6) to dismiss
Mr. Thomason’s complaint. The trial court granted Ms. Taylor’s motion, reasoning the
language in the 2016 agreement and Bert Stennes’s will did not apply to the causes of
action asserted by Evelyn’s estate. The trial court also certified under CR 54(b) that its
order dismissing the third-party complaint was a final judgment as to Mr. Thomason’s
claims.
Mr.
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FILED SEPTEMBER 19, 2024 In the Office of the Clerk of Court WA State Court of Appeals, Division III
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON DIVISION THREE
ROBERTO CASTRO, Personal ) No. 39847-1-III Representative of the Estate of EVELYN ) L. STENNES, ) ) Respondent, ) ) v. ) ) ALEX THOMASON, individually and ) ALEXANDER HARRIS THOMASON ) and KATY ANNE THOMASON, a ) marital community; and ALEX GROUP, ) LLC, ) ) Appellants. ) UNPUBLISHED OPINION ) ) ALEX THOMASON, individually and ) ALEXANDER HARRIS THOMASON ) and KATY ANNE THOMASON, a ) marital community; and ALEX GROUP, ) LLC, ) ) Appellants, ) ) v. ) ) STEPHANIE TAYLOR, in her capacity as ) the Personal Representative of the Estate ) of BERT STENNES, ) ) Respondent. ) No. 39847-1-III Castro v. Thomason
PENNELL, J. — Alex Thomason, individually and together with his wife, Katy
Anne Thomason, and his company, Alex Group, LLC (collectively Alex Thomason)
appeal from a summary judgment order dismissing their third-party complaint against
the Estate of Bert Stennes. We affirm.
FACTS 1
Evelyn Stennes died in 2009, after 50 years of marriage to Bert Stennes. At
the time of her death, the Stennes marital community held assets worth $3.5 million.
Ms. Stennes’s will directed the estate’s personal representative to place her portion of the
marital assets into an exemption equivalent trust or a marital trust. The will nominated
Bert Stennes as personal representative and, after his appointment by the probate court,
Mr. Stennes served in that capacity until his death in 2017. During his time as personal
representative, Mr. Stennes did not abide by the terms of his wife’s will. He neither
divided the community assets nor funded a trust as directed by the terms of the will.
In 2012, Mr. Stennes became acquainted with attorney Alex Thomason. At the
time, Mr. Thomason was 37 years of age and Mr. Stennes was 88. Mr. Thomason and
Mr. Stennes became friends. Mr. Thomason also served as Mr. Stennes’s legal counsel.
1 Some facts are drawn from this court’s opinion in a previous appeal from the same superior court action. See Castro v. Thomason, No. 37995-7-III (Wash. Ct. App. Nov. 23, 2021) (unpublished), https://www.courts.wa.gov/opinions/pdf/379957_unp.pdf.
2 No. 39847-1-III Castro v. Thomason
On April 18, 2013, Mr. Stennes opened an investment account under the name
of Ms. Stennes’s estate. He deposited $775,528.85 in liquid assets into the account.
Less than one week later, Mr. Stennes withdrew $160,000.00 from the account. He
then loaned $400,000.00 to Mr. Thomason so Mr. Thomason could purchase property
adjacent to Mr. Stennes’s land. Mr. Thomason signed a promissory note to evidence the
loan. The loan was interest free for seven years. In turn, Mr. Thomason leased some of
the purchased property to Mr. Stennes for development into an orchard.
On November 16, 2016, Bert Stennes and Alex Thomason executed an
“Agreement Cancelling Note and Terminating Joint Operating Agreement.” Clerk’s
Papers (CP) at 52-61. Mr. Thomason was serving as Mr. Stennes’s legal counsel at the
time. The agreement canceled the outstanding principal of $186,672.00 on the
$400,000.00 loan. The agreement also included the following clause:
7. Indemnification and Hold Harmless. [Bert Stennes and Stennes Point Orchards, Inc.] and [Alex Thomason, a married person; Alex Group, LLC; and PJA Holdings, Inc.] agree to indemnify and hold each other harmless against any and all claims, demands, suits, actions, expenses, accountants’ fees, attorneys’ fees, expert witness fees, and all losses and damages of every kind and nature, arising out of or in connection with the termination of the 2013 Note, 2014 Lease, 2015 Amendment and this agreement.
Id. at 53.
3 No. 39847-1-III Castro v. Thomason
Also on November 16, 2016, Mr. Stennes amended his last will and testament.
The will exercised his power of appointment under Ms. Stennes’s trust to direct the
proceeds of Evelyn Stennes’s trust to be incorporated into a new trust created by his will:
the Stennes Family Trust. The Stennes Family Trust was created to benefit the Stenneses’
three children and a friend of Mr. Stennes. Mr. Stennes’s will stated the funds from
Evelyn Stennes’s trust would be disbursed only to their three children. Mr. Stennes’s
amended will also included three clauses that: (1) terminated business transactions with
Mr. Thomason, (2) released any claims by Mr. Stennes’s estate related to Mr. Stennes’s
business transactions with Mr. Thomason, and (3) directed Mr. Thomason be defended
and indemnified from any claims made by Mr. Stennes’s descendants or beneficiaries of
the Stennes Family Trust.
Bert Stennes died in 2017. His will was admitted into probate and, in 2019,
Stephanie Taylor was appointed personal representative of his estate. Robert Castro was
appointed as a successor personal representative of Evelyn Stennes’s estate in 2018.
Mr. Castro’s predecessor, as personal representative of Evelyn Stennes’s estate,
filed a creditor’s claim with Bert Stennes’s estate, alleging Mr. Stennes had breached
his fiduciary duties as personal representative. The funds transferred by Mr. Stennes to
Mr. Thomason were identified as an example of the breach of fiduciary duties.
4 No. 39847-1-III Castro v. Thomason
After Mr. Castro was appointed as personal representative, he initiated litigation
against Mr. Thomason in Okanogan County Superior Court, seeking recovery of
$160,000 in misappropriated funds. Mr. Castro’s complaint articulated three causes of
action: (1) equitable lien, (2) unjust enrichment and constructive trust, and (3) accounting.
The appeal before us arises from this litigation.
Mr. Castro, joined by Ms. Taylor in her capacity as the personal representative of
the estate of Bert Stennes, later filed a separate lawsuit against Mr. Thomason in Chelan
County Superior Court under the same theories as the Okanogan County litigation. In
response to written discovery requests from Mr. Thomason, the estates produced a joint
prosecution agreement, later replaced by a confidentiality agreement, specifying the joint
participants’ desire to share privileged and confidential information amongst themselves
to promote their “common interests, common purpose and mutual benefit” in connection
with the cases against Mr. Thomason. CP at 227. The estates also entered into a loan
agreement where Mr. Stennes’s estate would fund the claims pursued by Evelyn’s estate
against Mr. Thomason.
Within his amended answer to the complaint in the Okanogan County case, Mr.
Thomason asserted a third-party complaint against Stephanie Taylor, in her capacity as
the personal representative of Bert Stennes’s estate. Mr. Thomason averred the Bert
5 No. 39847-1-III Castro v. Thomason
Stennes estate had a duty to defend and indemnify Mr. Thomason against claims by
Evelyn Stennes’s estate pursuant to the 2016 agreement and the terms of Bert Stennes’s
will. Ms. Taylor denied any such duty existed and moved under CR 12(b)(6) to dismiss
Mr. Thomason’s complaint. The trial court granted Ms. Taylor’s motion, reasoning the
language in the 2016 agreement and Bert Stennes’s will did not apply to the causes of
action asserted by Evelyn’s estate. The trial court also certified under CR 54(b) that its
order dismissing the third-party complaint was a final judgment as to Mr. Thomason’s
claims.
Mr. Thomason appealed and this court affirmed in part in an unpublished decision.
See Castro v. Thomason, No. 37995-7-III (Wash. Ct. App. Nov. 23, 2021) (unpublished),
https://www.courts.wa.gov/opinions/pdf/379957_unp.pdf. We agreed with the trial court
that Bert Stennes’s estate did not owe a duty to Mr. Thomason to defend against claims
made by Evelyn Stennes’s estate. But we reversed the trial court’s dismissal of
Mr. Thomason’s indemnification claim, opining that Mr. Thomason had stated a viable
claim for contractual indemnification pursuant to the terms of the 2016 termination
agreement. Because we held the termination agreement arguably imposed a duty to
indemnify, we declined to address whether such a duty also existed under the terms of
Mr. Stennes’s will. The matter was remanded for further proceedings.
6 No. 39847-1-III Castro v. Thomason
On remand, the Bert Stennes estate moved for summary judgment dismissal
of Mr. Thomason’s surviving indemnification claim, arguing it was time barred
under Washington’s nonclaim statute, RCW 11.40.051. Mr. Thomason did not
dispute he failed to file a creditor claim within the two-year time period specified by
RCW 11.40.051. Nevertheless, he argued he was not subject to the two-year limitation
period because he had asserted a defensive setoff claim that is not subject to the nonclaim
statute’s time limitation.
The trial court agreed with Ms. Taylor and dismissed the remainder of the third-
party complaint. The court again certified its order under CR 54(b) as a final judgment,
and Mr. Thomason now appeals.
ANALYSIS
Mr. Thomason contends his indemnity claim against Bert Stennes’s estate is not
time barred by the nonclaim statute because it is merely an offset claim, asserted in
response to a claim against him by “the” estate. Br. of Appellant[s] at 1-2. Although the
litigation in Okanogan County against Mr. Thomason was actually initiated by Evelyn
Stennes’s estate, not Bert Stennes’s estate, Mr. Thomason claims the two estates are
“so intertwined, both factually and legally, that they should be considered a single entity.”
Id. at 2. Thus, Mr. Thomason argues he should be able to offset the claims made by
7 No. 39847-1-III Castro v. Thomason
Evelyn Stennes’s estate pursuant to the contractual indemnification clause applicable
to Bert Stennes’s estate, regardless of the two-year limitations period set by RCW
11.40.051.
Our review of a trial court’s summary judgment order is de novo. Highline
Sch. Dist. No. 401 v. Port of Seattle, 87 Wn.2d 6, 15, 548 P.2d 1085 (1976). As
explained further below, we agree with the trial court’s summary judgment disposition
of Mr. Thomason’s third-party indemnification claim.
Mr. Thomason’s argument that the two Stennes estates should be treated as one is
rooted in our decision of In re Rapid Settlements, Ltd., 166 Wn. App. 683, 271 P.3d 925
(2012). In the Rapid Settlements case, Symetra Life Insurance Co. succeeded in obtaining
a judgment against Rapid Settlements for attorney fees after successfully opposing an
annuity transfer application in both the trial court and on appeal. Id. at 686-88. Rapid
Settlements later prevailed against Symetra in a separate, unrelated annuity transfer
application. Id. at 688-89. After Symetra moved in the trial court for relief from
judgment, a separate company, RSL-3B-IL, Ltd. (3B), intervened and asserted that:
(1) Rapid Settlements was no longer in business, and (2) 3B was Rapid Settlements’
assignee of the annuity payment Symetra owed. Id. at 689. 3B did not otherwise object to
the evidence submitted by Symetra in support of its motion for relief from judgment. Id.
8 No. 39847-1-III Castro v. Thomason
Symetra successfully argued in the trial court that a setoff against 3B was appropriate
because 3B was the alter ego of Rapid Settlements. Id. at 689-90. On appeal, this court
agreed with Symetra and held it was “within the trial court’s discretion to offset 3B’s
right to payment by Symetra’s judgment against [Rapid Settlements] because . . . the two
[companies] were one and the same.” Id. at 694-95.
Here, unlike the circumstances in Rapid Settlements, the two purported entities are
not the same. The two estates were created by separate testamentary documents and came
into existence at different times. Furthermore, Evelyn Stennes’s estate has a claim against
Bert Stennes’s estate for breach of fiduciary duty. This claim is based on the actions,
taken by Bert Stennes and Alex Thomason after Evelyn Stennes’s death, that diverted
funds from being placed in Evelyn Stennes’s estate. We recognize Bert Stennes’s estate
may seek to defend against the claims made by Evelyn Stennes’s estate by assigning
blame to Mr. Thomason. But that does not mean the two estates are one and the same.
The interests of Evelyn Stennes’s estate would be eviscerated if Mr. Stennes’s allegedly
improper dealings with Mr. Thomason could be used to offset the effort by Evelyn
Stennes’s estate to be made whole.
Mr. Thomason points to the joint prosecution and confidentiality agreements
entered into by the personal representatives of the two Stennes estates as evidence they
9 No. 39847-1-III Castro v. Thomason
are operating as the same entity. We disagree. These agreements merely recognize the
estates have mutual claims against Mr. Thomason, arising out of analogous facts. This
does not change the fact that Evelyn Stennes’s estate also has a separate and distinct claim
against Bert Stennes’s estate. Had Mr. Castro intended to disregard the claim against Bert
Stennes’s estate in signing the joint prosecution and confidentiality agreements, this
would have violated his duties to Evelyn Stennes’s estate. We will not interpret the
agreements in a way that leads to this kind of absurd result.
We further note that, under Rapid Settlements, the decision to allow for an offset
in liability based on a shared identity is rooted in equity. As we explained, “Courts . . .
have the equitable authority to set off claims between two parties against the claim of
a third party if ‘it becomes necessary for a clear equity or to prevent irremediable
injustice.’” Id. at 694 (quoting 20 AM. JUR. 2D Counterclaim, Recoupment, and Setoff
§ 49, at 313 (Am. Law Inst. 2005)). Mr. Thomason has not shown it would be unjust to
deny indemnification in response to claims by Evelyn Stennes’s estate.
CONCLUSION
Mr. Thomason is not entitled to avoid the two-year limitations period in
Washington’s nonclaim statute by characterizing his indemnification claim against
Bert Stennes’s estate as an offset of the claims made by Evelyn Stennes’s estate.
10 No. 39847-1-III Castro v. Thomason
The summary judgment dismissal of the third-party complaint against Bert Stennes’s
estate is affirmed.
A majority of the panel has determined this opinion will not be printed in
the Washington Appellate Reports, but it will be filed for public record pursuant to
RCW 2.06.040.
_________________________________ Pennell, J.
WE CONCUR:
______________________________ _________________________________ Lawrence-Berrey, C.J. Fearing, J.