In Re: The Richard C. Sweezy Trust Of 1990

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

No. 73209-9-I

In the Matter of the

RICHARD C. SWEEZEY TRUST OF 1990 DIVISION ONE

UNPUBLISHED OPINION

FILED: May 16, 2016

Appelwick, J. — The Estate appeals the dismissal on summary judgment

of its petition for a declaration of rights under a TEDRA Agreement. Under the

terms of a trust, Rick was to receive a portion of the trust's remainder if he survived

his mother. Rick predeceased his mother. Under the terms of the TEDRA

agreement, upon his mother's death, before distribution of the trust assets, certain

payments were to be made to equalize for amounts previously taken by other

residual beneficiaries. The Estate asserts that it is entitled to a payment from Trust

assets, because the TEDRA Agreement amended the survivorship requirement as

to a portion of the trust assets. We affirm.

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No. 73209-9-1/2

FACTS

Richard C. Sweezey (Dick) was married to June1 Sweezey. Together, Dick

and June had four sons: Richard H. Sweezey (Rick), Paul Sweezey, David

Sweezey, and Gary Sweezey. Rick married Rae Ann Engdahl in 1985. Engdahl

had two children from a previous marriage. Rick never adopted Engdahl's

children.

In 1990, Dick established the Richard C. Sweezey Trust of 1990 (Trust).

The Trust corpus consisted primarily of interests in closely held corporations. Dick

established the Trust for his benefit during his lifetime and for June's benefit after

his death.2 Specifically, the Trust allocated the property as follows:

3.4 Balance of Property. Trustees shall allocate the rest of

Trustor's estate as follows:

(a) If Trustor's wife is then living, Trustees shall distribute the

balance of the trust property to the Trustees of the Trust for Wife

under Article 4.

(b) If Trustor's wife is not then living, Trustees shall distribute

all of the trust property in equal shares as follows:

(i) one share to each son of Trustor who is then living;. . . and

(ii) one share by right of representation to the descendants

then living of any of Trustor's sons who are deceased. . . .

Therefore, under the terms of the trust, if a son predeceased June, that son's share

would go to his descendants. Dick died on July 23, 1992. The Trust became

1 We refer to the parties by their first names for the sake of clarity. No

disrespect is intended.

2 The 1990 Trust provided that after Dick died and after other specific

requests the remainder of the assets were to be held in a qualified terminable

interest property Trust (QTIP). The QTIP and the Richard C. Sweezy Trust of 1990

are collectively referred to as the Trust.

No. 73209-9-1/3

irrevocable upon Dick's death. At that point, pursuant to the Trust, specific

distributions were made to Rick, David, Paul, and a trust was created for Gary and

his family (Gary Family Trust). The remainder of the Trust assets funded a trust

for June's benefit.

Rick, David, and Paul served as successor co-trustees of the Trust.3 In

November 2004, Rick and David, as co-trustees of the Trust, June, as co-trustee

of the Gary Family Trust, and Paul, as co-trustee of both the Trust and the Gary

Family Trust, executed a "Joint Action and Consent of the Co-Trustees" (Joint

Action). The Joint Action delegated day-to-day affairs of the Trust to a trust

administrator. The co-trustees first designated David as the administrator.

Sometime shortly after the Joint Action, the co-trustees verbally agreed to

substitute Paul as the Trust administrator. The Joint Action also appointed David,

Paul, and Rick to corporate executive positions at companies owned by the Trust.

On January 7, 2009, June filed a petition under the Trust and Estate Dispute

Resolution Act (TEDRA)4 seeking removal and replacement of Rick, David, and

Paul as the co-trustees. She alleged that the co-trustees breached their fiduciary

duties, unjustly enriched themselves, and converted trust assets. The petition

alleged that since the Joint Action, from 2004 to 2007, a majority of the co-trustees

caused one of the Trust's companies, City Electric, to pay each of them excessive

salaries and year-end bonuses. The petition noted that David and Paul do not

work for or run the operations of City Electric and that Rick, who does work for and

3 June and Paul served as co-trustees of the Gary Family Trust.

4RCW11.96A.080

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run City Electric,5 consented to the removal of all three co-trustees in favor of a

professional fiduciary. In addition to removal of the trustees, June's petition sought

the return of the illegally obtained Trust property as soon as possible. The petition

also requested that the co-trustees be restrained from taking any more Trust

assets with the exception of reasonable wages received for work actually

performed.

Prior to trial, on June 26, 2009, after two mediations, June, Paul, Rick, and

David all signed a settlement agreement (TEDRA Agreement). Under the TEDRA

Agreement, Rick, David, and Paul agreed to resign as co-trustees and appoint an

independent corporate trustee. By signing the TEDRA Agreement, June released,

waived, and discharged all claims against Rick, Paul, and David for breach of

fiduciary duty.

Among many provisions, the TEDRA Agreement had an "Equalizing

Distributions to Four Brothers" provision to ensure that at June's death the

brothers' distributions would be equalized:

Within three months of the three brothers signing this Agreement,

Rick, David, and Paul will participate in an arbitration before Steve

Scott to determine the amount of distributions that the brothers have

received to date. Earned income shall not be considered a

distribution. To the extent the distributions are unequal, they shall

be equalized by the New Corporate Trustee upon June's

death. .. . Once those equalizing distributions are made, the

remaining assets would be divided between the four brothers

equally.

5 Rick was the Chief Executive Officer of City Electric.

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The TEDRA Agreement also included a merger and inurement clause under the

"Miscellaneous" section:

5. This Agreement contains the entire agreement between and

among the parties with regard to the matters set forth herein and is

conclusive and binding on and inures to the benefit of the executors,

administrators, personal representatives, heirs, successors and

assigns of each.

On March 5, 2010, the parties amended the TEDRA Agreement. Among

other things, the amendment noted that the parties all selected Union Bank, N.A.

to serve as the new corporate trustee for the Trust. The superior court entered an

order approving the TEDRA Agreement on March 24, 2010.

As mandated by the TEDRA Agreement, Rick, David, and Paul went to

arbitration. After considering evidence and argument of counsel, the arbitrator

determined the amount of advance distributions each brother received from the

Trust. He found that Rick and Gary had received no advance distributions. But,

he found that David received $829,490.94 and that Paul received $679,062.31.

He made an award accordingly. The arbitrator also awarded Rick $35,929.39 in

attorney fees and costs. The superior court entered an order confirming the

arbitration awards on June 28, 2010.

In 2012, Rick disappeared and was declared deceased. Engdahl is the

personal representative of Rick's Estate (the Estate). Then, June died on April 21,

2014. June's death triggered the final distribution of Trust assets. But, before the

assets were distributed, Union Bank, the corporate trustee, petitioned to resign as

trustee. On June 18, the Estate filed an opposition to Union Bank's petition,

because the Estate did not want David and Paul to serve as Union Bank's

No. 73209-9-1/6

replacement. The Estate noted that it was a creditor of the Trust, because the

Trust was obligated to pay it the equalizing payments under the TEDRA

Agreement. David and Paul responded, indicating that they agreed to Union

Bank's resignation, but they denied the Trust's obligation to make an equalizing

payment to the Estate. They argued, among other things, that the Estate is not a

creditor and has no claim. They asserted that neither the TEDRA Agreement nor

the arbitration award changed the terms of the Trust that require a beneficiary of

the Trust to survive June in order to claim anything under the Trust.

On July 1, 2014, the court entered an order appointing David and Paul as

co-trustees. But, the trial court required that they post a bond or secure a deed of

trust for $1,000,000 on the Trust property until the Estate resolved its potential

claim against it. The trial court's order also authorized Union Bank to resign as

trustee of the Gary Family Trust.6 On July 29, 2014, as required by the court's

order, David and Paul executed a deed of trust in favor of Rick's Estate secured

by some of the Trust's real property. .

On August 1, 2014, the Estate, filed a petition for declaration of rights under

TEDRA Agreement and judgment. The Estate argued that Rick's interest in the

TEDRA Agreement passed to his Estate. And, it noted that the TEDRA Agreement

created an absolute obligation for the Trust to pay the equalizing payments upon

June's death to Rick, Gary, and their heirs, and then distribute the remainder.

David and Paul, on behalf of the Trust, and Vranizan, on behalf of the Gary Family

Trust (collectively "respondents"), separately opposed the Estate's petition.

6 It named Michael Vranizan as the successor trustee.

No. 73209-9-1/7

On September 18, 2014, the matter was certified for trial. On January 23,

2015, the Estate moved for summary judgment. That same day, David and Paul

also filed a motion for summary judgment on behalf of the Trust, arguing that the

TEDRA Agreement did not destroy the survivorship condition—that a son survive

June in order to collect—under the Trust. They argued that because Rick

predeceased June, according to the language of the Trust, only his "descendants"

were entitled to collect. And, because Rick never adopted Engdahl's two children,

Rick had no descendants. On February 9, 2015, the Gary Family Trust filed a

response, requesting that the court grant the Trust's motion for summary judgment

and dismiss the Estate's petition.

On February 20, 2015, the parties went before the trial court on the cross-

motions for summary judgment. The Estate conceded that Rick had no

"descendants" under the terms of the Trust. But, it argued that this was a question

of the interpretation of only the TEDRA Agreement, not the Trust. It argued that

the language of the TEDRA Agreement mandated that the equalizing payments

be made upon June's death. And, the Estate referenced the inurement clause in

the TEDRA Agreement and claimed the right to receive the equalizing payments

inures to the benefit of the party's estates, assigns, and heirs—words it claimed

are materially different than "descendant" as stated in the Trust. The Estate also

requested interest from the date of June's death and attorney fees.

No. 73209-9-1/8

After hearing argument from the Estate, the trial court granted the Trust's

motion for summary judgment. The trial court stated:

I think it is quite clear that you have to construe all of these

agreements together - the trust as well as the - the TEDRA

agreement, and it is clear that this related to a right that Rick had as

an expectancy, which is as ... if he survived his mother, June, and

he didn't, and so there's nothing to be paid out here.

The trial court also noted that an award of attorney fees was appropriate for both

the co-trustees and the Gary Family Trust to the extent that the fees were

reasonable.

That same day, the trial court entered a written order granting the co

trustees' motion for summary judgment, dismissing the Estate's petition with

prejudice, and denying its request for interest and attorney fees.7 Because of its

ruling, the trial court also ordered that the deed of trust securing the Estate's

potential claim against the Trust be reconveyed.

In the order granting summary judgment, the trial court noted that attorney

fees were appropriate. It reasoned this was so, because the Estate's petition

caused the co-trustees to incur fees and costs in their defense of the Trust and its

remainder beneficiaries from an unsuccessful and meritless attack. The court

7 The written order stated that the court finds and concludes that section

3.4(b) of the Trust clearly and unambiguously requires a Trust beneficiary to have

survived June or predeceased June, leaving lineal descendants in order to receive

a distribution from the Trust upon June's death. It continued that the TEDRA

Agreement and the arbitration award did not create a stand-alone payment

obligation that was separate and distinct from the final Trust distribution. It

concluded that the Estate had no interest in the Trust, because Rick did not survive

June and died without leaving descendants.

8

No. 73209-9-1/9

awarded the Trust and the Gary Family Trust attorney fees and costs. The Estate

appeals.

DISCUSSION

The Estate argues that the trial court erred when it granted summary

judgment in favor of the Trust. The Estate urges this court to reverse the trial court,

order summary judgment in its favor, replace the deed of trust with security for the

Estate's claim, reverse the trial court's attorney fee award against it and award

fees to the Estate, and award it fees on appeal.

This court reviews summary judgment orders de novo. Hadlev v. Maxwell,

144 Wn.2d 306, 310-11, 27 P.3d 600 (2001). Summary judgment is appropriate

only where there are no genuine issues of material fact and the moving party is

entitled to judgment as a matter of law. CR 56(c); Peterson v. Groves, 111 Wn.

App. 306, 310, 44 P.3d 894 (2002). When considering the evidence, the court

draws reasonable inferences in the light most favorable to the nonmoving party.

Schaafv.Hiqhfield. 127Wn.2d 17, 21, 896 P.2d 665 (1995).

I. The TEDRA Agreement

The Estate first argues that summary judgment was improper, because the

TEDRA Agreement is an independent and enforceable contract that is not subject

to the survivorship requirement of the Trust. It asserts that it is entitled to an

equalizing distribution payment—$829,490.94—under the terms of the TEDRA

Agreement.

TEDRA, provides for judicial and nonjudicial resolution to trust and estate

disputes and related matters. RCW 11.96A.010. Under TEDRA, if all parties

No. 73209-9-1/10

agree to a resolution of a matter related to a trust or an estate, the matter can be

settled by a written agreement signed by all parties. RCW 11.96A.220. If the

parties file the written agreement with a court, it becomes the equivalent of a final

court order binding all interested parties. RCW 11.96A.230(2).

The parties urge this court to adopt different interpretations of the TEDRA

Agreement. When interpreting TEDRA agreements, this court applies general

principles of contract law. See In re Estate of Bernard, 182 Wn. App. 692, 697,

718, 332 P.3d 484 , review denied, Wn.2d , 339 P.3d 634 (2014) (applying

principles of contract interpretation to interpreting TEDRA Agreements); see

Condon v. Condon, 177 Wn.2d 150, 162, 298 P.3d 86 (2013) (applying principles

of contract interpretation to interpreting settlement agreements.). In Washington,

courts interpret contracts by attempting to determine the intent of the parties by

focusing on their objective manifestations as expressed in the agreement.

McGuire v. Bates, 169 Wn.2d 185, 189, 234 P.3d 205 (2010). Washington courts

apply the "context rule" of contract interpretation in ascertaining the parties' intent.

Roats v. Blakelv Island Maint. Comm'n, Inc., 169 Wn. App. 263, 274, 279 P.3d 943

(2012). The context rule allows a court, while viewing the contract as a whole, to

consider extrinsic evidence, such as the circumstances leading to the execution of

the contract, the subsequent conduct of the parties and the reasonableness of the

parties' respective interpretations.8 Id.

8The Estate argues that the context rule does not apply at all in this case,

because there is no specific contractual provision or term in the TEDRA Agreement

requiring definition. Specifically, the Estate claims that respondents are improperly

using the Trust—as extrinsic evidence under the context rule—to vary the plain

and unqualified meaning of the equalizing distribution provision of the TEDRA

10

No. 73209-9-1/11

Both parties properly agree that the intent of the contracting parties is

paramount in interpreting the TEDRA Agreement. But, they offer differing

interpretations as to the parties' intent. The Estate asserts that the plain language

of the equalizing distribution provision, the inurement clause, and the merger

clause illustrates the intent of the parties.9 It argues that the three provisions read

together show that the parties intended to contract away the Trust's survivorship

requirement as to the equalizing distribution payment provision of the TEDRA

Agreement. And, that the merger clause specifically manifests an intent of the

parties to have the TEDRA Agreement stand alone and not be overruled by the

"inconsistent survivorship requirement" in the Trust. By contrast, respondents

argue that the TEDRA Agreement clearly cannot be interpreted as a stand-alone

contract, because its purpose was to resolve disputes arising under the Trust.

And, they assert that neither the TEDRA Agreement's plain language nor its

context show that the parties intended to modify the survivorship term of the Trust.

They contend that the equalizing distribution provision reflects an intent to ensure

Agreement. But, in Washington, all contracts are interpreted under the context

rule. Tiartv. Smith Barney. Inc., 107 Wn. App. 885, 895, 28 P.3d 823 (2001). This

is true regardless of whether the court determines that the terms of the contract

are ambiguous. Roats, 169 Wn. App. at 274. And, the parties need not identify a

specific undefined term or word before this court may apply the context rule. See

Top Line Builders, Inc. v. Bovenkamp, 179 Wn. App. 794, 806, 808-09, 320 P.3d

130 (2014) (considering extrinsic evidence to determine why an entire provision

was included in a contract). That there is a merger clause in the TEDRA

Agreement does not preclude this court from applying the context rule. See King

v. Rice, 146 Wn. App. 662, 670-71, 191 P.3d 946 (2008).

9While the Estate objects to how the respondents are using the Trust as

extrinsic evidence, at oral argument, the Estate conceded that we may consider

the terms of the Trust in determining the parties' intent under the TEDRA

Agreement.

11

No. 73209-9-1/12

equal distributions to only beneficiaries who satisfy the Trust's survivorship

requirement.

The parties entered into the TEDRA Agreement in order to resolve issues

concerning the management of the Trust as stated in June's petition. Under the

terms of the Trust, June was the sole beneficiary of the Trust during her lifetime.

The trustees were to invest and reinvest the principal of the Trust and pay June

the income during her lifetime. Therefore, because advance distributions were

withdrawn from the Trust, June forfeited any income that would have accrued on

those Trust assets. June filed her petition, and requested that the court appoint a

professional fiduciary, restrain the co-trustees from depleting any more Trust

funds, and set a trial on the merits of her claims against the co-trustees.

The parties then entered into the TEDRA Agreement. The TEDRA

Agreement notes that since November 2004, issues had arisen concerning the

management of the Trust. The TEDRA Agreement then states why the parties

entered into the agreement. They did so to resolve the disputes among them,

facilitate the proper administration of the Trust, minimize the risks to each party

inherent in the trial or arbitration of the issues raised in June's petition, and avoid

further expenses of litigation. And, by agreeing to the equalizing distribution

provision in the TEDRA Agreement, the parties agreed that any recipient of

advance distributions would not be required to pay that money back to the Trust

as June originally sought in her petition. Instead, upon June's death, initial

distribution payments would be paid out of the Trust's assets to leave each brother

12

No. 73209-9-1/13

with an amount equal to the greatest advance distribution. Then, the equal

residual division among the brothers would be made.

Based on the language of the TEDRA Agreement and the circumstances

leading up to it, it is clear that the primary intent of the parties was to resolve June's

claims and restore operation of the Trust on June's death to what it would have

been had no advance distributions been taken.10

Still, the Estate argues that the language of the equalizing distribution

provision creates an absolute obligation to payment. That provision states, "To the

extent the distributions are unequal, they shall be equalized .. . upon June's

death. . . . Once those equalizing distributions are made, the remaining trust

assets would be divided between the four brothers equally." The Estate seizes on

the word "shall" and argues that the obligation to equalize the payments to the

beneficiaries is mandatory. In other words, the Estate is arguing that because of

this mandatory language, Rick received a present, unconditional, and vested right

to a payment upon entering into the TEDRA Agreement.11 The Estate points to

10 The Estate cites to Bernard, 182 Wn. App. 692, to support a claim that

there is no requirement that a TEDRA agreement comply with a trustor's original

intent. Here, because the parties to the TEDRA Agreement did not seek to modify

the terms of the Trust, the parties did not contract around the trustor's original

intent. Therefore, whether Bernard stands for the general proposition that the

parties to a TEDRA Agreement may contract around the trustor's original intent is

not at issue. But, we note that, in Bernard, which dealt with a revocable trust,

unlike here, the original trustor was alive and was a participating party to both

TEDRA agreements at issue. 182 Wn. App. at 699, 701, 724-25.

11 While the Estate argues that the TEDRA Agreement modified the

survivorship requirement of the Trust as to the equalizing distribution payments, it

does not argue that it modified the survivorship requirement as to the remainder of

the Trust assets. It argues that its argument is consistent with the language in the

provision, because the equalizing distribution "shall be" made upon June's death,

but the remainder Trust assets only "would be" divided. It argues that the

13

No. 73209-9-1/14

the language in the merger clause and argues that by including the merger clause

in the TEDRA Agreement, the parties intended the TEDRA Agreement to stand

alone and not be overruled by the Trust. The Estate also points to the inurement

clause language as evidence that the parties' rights inure to the benefit of the

parties' estates, heirs, and assigns. It argues that as a party to the TEDRA

Agreement, Rick clearly had the right to receive the equalizing distribution payment

while he lived and that the right inured to his estate.

But, June's lawsuit did not include any claims that involved modifying the

terms of the Trust. The language of the TEDRA Agreement resolving her claims

does not state an intent to modify the survivorship requirement of the Trust or to

modify the scope of the Trust beneficiaries. It makes no mention of those issues

in the substantive provisions. The Estate's argument is dependent upon

inferences drawn from general provisions of the TEDRA Agreement to reach a

conclusion that is inconsistent with the survivorship provision of the Trust. We

reject the Estate's assertion that the three provisions of the TEDRA Agreement

illustrate that the parties intended to provide Rick a present, unconditional, and

vested right to an equalizing distribution while he lived.12 His rights under the

difference in language, "would" versus "shall," makes the parties' intent to place

the remainder distribution subject to a condition—the survivorship requirement—

whereas it does not do so for the equalizing distribution payments. But, the

provision states that the "remaining trust assets would be divided between the four

brothers egually." (Emphasis added). That provision suggests that the parties to

the TEDRA Agreement did not specifically contemplate what would happen if one

of the brothers predeceased June. This language undercuts the argument that the

intent of the parties was to waive the survivorship requirement of the Trust as to

the equalizing distribution payments but not as to the remainder Trust assets.

12 If the TEDRA Agreement did provide Rick a present, vested right to an

equalizing distribution payment during his lifetime as the Estate contends, itwould

14

No. 73209-9-1/15

TEDRA Agreement were tied to the terms of the Trust. Surviving June was a

condition precedent to any distribution, including an advance to equalize what

others may have received earlier. Therefore, that right could not have passed to

his estate through the inurement clause.

We conclude that the TEDRA Agreement did not confer upon Rick or his

Estate an absolute right or promise to an equalizing distribution payment

notwithstanding the Trust's survivorship requirement.

Alternative Theories

The Estate then makes three alternative arguments, claiming that it is

entitled to the equalizing distribution payment. Specifically, the Estate argues that

it is entitled to the payment, because the TEDRA Agreement is an assignment of

rights and because of the doctrines of promissory and equitable estoppel.

A. Assignment

First, the Estate argues that the TEDRA Agreement is an assignment by

David and Paul to Rick and the Gary Family Trust. No particular words of art are

required to create a valid and binding assignment. Carlile v. Harbour Homes, Inc.,

147 Wn. App. 193, 208, 194 P.3d 280 (2008). Any language showing the owner's

intent to transfer and invest property in the assignee is sufficient. Jd.

The Estate argues that the TEDRA Agreement served as an assignment by

June to Rick of her right to recover the Trust assets from David and Paul. It notes

that the distributions David and Paul paid themselves were amounts that rightfully

not need to rely on the inurement clause to claim Rick's right. RCW 4.20.046, the

survival statute, allows causes of action arising out of a contract to survive to the

Estate.

15

No. 73209-9-1/16

should have been distributed to June. But, this is inconsistent with the claims June

brought in her petition, which included claims against Rick. And, through her

petition, June did not seek any personal distributions of Trust property or lost

income, only that the money "illegally siphoned from the Trust[] be returned as

soon as possible." Any equalizing distribution payment under the TEDRA

Agreement was not to be made from June's interest or even from the money

wrongfully taken by the others, but only from the Trust remainder. June had no

interest in the remainder to assign. Moreover, June released any claims she had

to the advance distributions. She could not assign what she had released.

Therefore, we conclude that June did not intend to make an assignment of a

personal right to recover the assets.

Second, the TEDRA Agreement did not require disgorgement of the

advance distributions. Nor did it require anyone who was determined to have

received an advance distribution to make an equalizing distribution payment to a

brother who had not received a like amount. The TEDRA Agreement provided that

the corporate trustee would make payments from the Trust to equalize the advance

distributions. Once the equalizing distributions were made, the remaining Trust

assets would be divided between the four brothers equally. The advance

distributions were treated as charges against that brother's share of the Trust, not

as an increase in that brother's interest in the Trust. The brothers who received

the advance distributions did not assign any portion of their interest in the Trust to

another brother. They merely agreed the others were entitled to receive advances

in comparable amounts prior to distribution of the Trust remainder.

16

No. 73209-9-1/17

The Estate's assignment arguments are without merit.

B. Promissory and Equitable Estoppel

Next, the Estate asserts that both the doctrines of promissory and equitable

estoppel entitle it to an equalizing distribution payment. But, the Estate's

arguments under both theories rely on the fact that the respondents made a

"promise" to Rick that he would receive an equalizing distribution payment that was

not kept. But, the right to Trust assets was contingent upon surviving June. The

equalizing distribution payments were to occur only after June died. Because Rick

predeceased June, he lost any right to equalizing distributions from the Trust.

There was no longer any distribution rights to equalize. No promise was broken.

We conclude that neither June nor any of the other parties to the TEDRA

Agreement ever made a promise ofequalizing distribution payments, independent

of the Trust survivorship provisions. The estoppel arguments are without merit.

We hold that the trial court did not err when it granted summary judgment

in favor of respondents and when it released the deed oftrustsecuring the Estate's

claim.

II. Attorney Fees - Trial Court

The Estate argues that the trial court erred when it awarded attorney fees

to respondents and denied its request for fees. It argues that the trial courtapplied

the incorrect standard—the prevailing party standard—in awarding fees to

respondents. It asserts that the trial court did not enter appropriate findings and

conclusions to support the fee award. And, it claims that fees are unwarranted

when a TEDRA case presents unique issues.

17

No. 73209-9-1/18

TEDRA, RCW 11.96A. 150(1), grants courts great discretion in awarding

attorney fees. In re the Estate of Fitzgerald. 172 Wn. App. 437, 453, 294 P.3d 720

(2012). It states:

(1) Either the superior court or any court on 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). This statute allows a court to consider any relevant factor

when determining whether to make a fee award, including whether a case presents

novel or unique issues. In re Estate of Evans, 181 Wn. App. 436, 451, 326 P.3d

755 (2014). The statute does not limit fee awards to only the prevailing party. Id,

This court reviews a trial court's award of fees under RCW 11.96A.150 for abuse

of discretion. ]d_,

In its order granting summary judgment the trial court stated:

Under [TEDRA] (RCW 11.96A.150), this Court has discretionary

authority to award costs, including reasonable attorneys' fees, to any

party from any party to the proceedings, to be paid in such amount

and in such manner as the Court determines equitable. The Court

finds that the Estate's Petition caused the co-trustees to incur

attorneys' fees and costs in their defense of the Trust and its

remainder beneficiaries from an unsuccessful and meritless attack

by the Estate of Richard H. Sweezey. The Court finds that it is

equitable to AWARD the Trust its reasonable attorneys' fees and

costs incurred, in an amount to be set by the Court in further

proceedings, and that such attorneys' fees and costs should be paid

by the Estate of Richard H. Sweezey or its distributees.

18

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In the order awarding attorney fees to the Gary Family Trust, the trial court stated

that this case did not involve claims that are particularly novel or legally challenging

which would justify not making a fee award. Then, in the order awarding attorney

fees and costs to the co-trustees of the Trust, the court stated that it rejected the

Estate's petition in its entirety, finding it meritless.

The Estate argues that the trial court's oral ruling and written orders are

insufficient to provide an equitable basis for a fee award under TEDRA. It first

argues that when a court makes a fee award, the basis for and the calculation of

the fee award should be supported by appropriate findings and conclusions. The

trial court must enter findings of fact and conclusions of law supporting its decision

to award fees. Deep Water Brewing, LLC v. Fairway Res., Ltd., 170 Wn. App. 1,

6, 282 P.3d 146 (2012). Where a trial court fails to create the appropriate record,

remand for entry of proper findings and conclusions is the appropriate remedy. Jd.

But, if the trial court enters specific findings as to the basis for the award and the

rationale underlying the court's conclusion that it was reasonable, this court is able

to determine whether the trial court abused its discretion. See Bentzen v.

Demmons, 68 Wn. App. 339, 350, 842 P.2d 1015 (1993).

Here, the Estate does not question the amount or calculation of the fee

award, only the trial court's basis for the award. Although the trial court did not

enter formal findings of fact and conclusions of law, the trial court provided the

basis for its award. It stated that the Estate's petition was a meritless attack

involving claims that were not novel or legally challenging. Therefore, we are able

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to determine whether the trial court's fee award on this basis constituted an abuse

of discretion.

The Estate's next argument is that the trial court improperly applied the

prevailing party standard in awarding fees. But, the trial court noted that it was

making its fee award under RCW 11.96A.150(1), and it acknowledged that it was

applying an equitable standard. Although the trial court said that the Estate's claim

was "unsuccessful," it also found that it was equitable for the Estate to reimburse

the Trust and the Gary Family Trust for the fees they were forced to incur defending

against the Estate's meritless attack. Therefore, the trial court did not apply the

inappropriate prevailing party standard.

Next, the Estate argues that defending against a meritless attack is an

insufficient basis for a fee award under TEDRA. At least one Washington appellate

court has affirmed a fee award under TEDRA when the Estate was forced to incur

attorney fees defending against a claim that itfound was meritless. See Fitzgerald,

172 Wn. App. at 453-54 (finding a plainly time-barred claim meritless and affirming

a fee award). Here, the trial court granted summary judgment against the Estate

noting, "I think it's quite clear that you have to construe all of these agreements

together." And, it later stated that the case did not involve claims that are

particularly legally challenging. In other words, although the claim here was not

clearly time-barred, like in Fitzgerald, the trial court found that the case was quite

plainly meritless. Therefore, awarding attorney fees under TEDRA because a

lawsuit is meritless does not necessarily constitute an abuse of discretion.

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The Estate also argues that fees are unwarranted when a TEDRA case

presents unique issues. It claims that if a party to a TEDRA petition raises a novel

issue in good faith, it is an abuse of discretion to award fees against the party for

not prevailing. Washington courts have concluded that where a case involves a

unique issue under TEDRA, an award of fees is unwarranted. See, e.g., Bale v.

Allison. 173 Wn. App. 435, 461, 294 P.3d 789 (2013) (finding fees unwarranted

because case involved unique issue); In re Estate of Stover, 178 Wn. App. 550,

564, 315 P.3d 579 (2013) (denying appellate fees because the case involved a

novel issue of statutory construction), review denied, 180 Wn.2d 1005, 321 P.3d

1206 (2014). But, here, the Estate fails to explain why the trial court abused its

discretion in finding that this case did not involve a novel issue. Nor does it provide

any authority indicating that whether the issue is novel is dispositive as opposed

to only one of the factors that the trial court may consider under RCW

11.96A.150(1).13

We agree with the trial court that this case involved straightforward contract

interpretation. And, the Estate has provided no argument or authority upon which

to conclude that the trial court abused its discretion under TEDRA when it awarded

the respondents attorney fees based on a lawsuit it deemed meritless.

The Estate also asserts that the trial court abused its discretion when it did

not award it attorney fees below. The Estate argues that where all beneficiaries

13 The Estate also argues that Washington courts typically award fees in

TEDRA litigation against parties personally only upon a showing of misbehavior or

violation of a statute. But, it cites to no authority to support the assertion that a

party must have committed misconduct or violated a statute for a court to award

fees against it.

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No. 73209-9-1/22

are involved in the litigation and it ascertains and resolves doubtful rights of the

parties, it is appropriate to award fees to all the parties. The Estate claims that

because it brought a good faith claim with a reasonable basis, the trial court should

have awarded it attorney fees regardless of how it decided the case. But, under

the line of cases cited by the Estate—all will contests—generally the estate must

be benefited if attorney fees are to be assessed against it. In re Estate of Black,

153 Wn.2d 152,174,102 P.3d 796 (2004). This same rule applies in litigation over

trusts. SeeBarlettv.Betlach, 136 Wn. App. 8, 22,146 P.3d 1235 (2006) ("Attorney

fees may generally be awarded against a trust only where the litigation results in

a substantial benefit to the trust."). Even if all parties were involved in the litigation,

where the litigation was unsuccessful and primarily prosecuted for personal

benefit, a benefit of the trust will rarely be found and the trial court does not abuse

its discretion in denying attorney fees. In re Boris v. Korrv Testamentary Marital

Deduction Trust for Wife, 56 Wn. App. 749, 756, 785 P.2d 484 (1990); In re Estate

of Ehlers, 80 Wn. App. 751, 764, 911 P.2d 1017 (1996). Therefore, because the

Estate clearly brought its action for its benefit rather than the Trust's, we hold that

the trial court did not abuse its discretion in denying the Estate's request for

attorney fees.

III. Attorney Fees - Appeal

Both the Estate and the respondents request attorney fees on appeal. A

party may recover attorney fees and costs on appeal when granted by applicable

law. RAP 18.1(a). TEDRA permits an award of attorney fees on appeal. See

RCW 11.96A.150 ("Either the superior court or any court on appeal may, in its

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discretion, order costs including reasonable attorneys' fees, to be awarded to any

party ... in such manner as the court determines to be equitable.").

Although the Estate's appeal involved straightforward contract

interpretation and did not advance an argument about a novel issue of law, it was

not frivolous. See In re Estate of Wright, 147 Wn. App. 674, 688, 196 P.3d 1075

(2008) (declining to award fees on appeal in TEDRA action because the issues

appellant raised were not frivolous). And, both parties here willingly entered into

the TEDRA Agreement with vague language that resulted in extended litigation.

Therefore, both parties are responsible to some degree for this dispute. As such,

we decline to exercise our equitable authority under the statute and deny both

parties' requests for attorney fees on appeal.

We affirm.

WE CONCUR:

T/SO^y f\cS~ C?J?(iJ>

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