# /FI L:'E**~.,.** IN CLERKS OFFICE llJfiRBE COURT,8TATEOFWASitNGTCN DATE 

## SEP 04

## 2014

# ~0.9. CHIEF TICE ; IN THE SUPREME COURT OF THE STATE OF WASHINGTON

RACHEL MARGUERITEANDERSON ) (formerly RACHEL M. RODGERS), ) No. 89788-3 ) Petitioner, ) ) v. ) ) WILLIAML.E. DUSSAULT and JANE DOE ) DUSSAULT, husband and wife, and the ) marital community composed thereof; ) BARBARA

### J. BYRAM and JOHN DOE ) BYRAM, wife and husband, and the marital ) EnBanc community composed thereof; ) YEVGENY JACK BERNERand JANE DOE ) BERNER, husband and wife, and the ) marital community composed thereof; ) WILLIAML.E. DUSSAULT, PS, a ) Washington professional services corporation; ) the DUSSAULTLAW GROUP, a Washington ) corporation; RICHARD MICHAEL ) McMENAMIN and SHARI L. McMENAMIN, ) husband and wife, and the martial community ) composed thereof; McMENAMIN & ) McMENAMINPS, a Washingtonprofessional ) service corporation; ANDREA DAVEY (fka ) ANDREARODGERS) and JOHN DOE ) DAVEY, wife and husband, and the marital ) community composedthereof; and WELLS ) FARGO BANK, NA, a foreign corporation, ) ) 

## SEP 04 

## 2014 Respondents. ) FiledNo. 89788-3

MADSEN, C.J.-Atissue is whetherthe superior court's approval ofannual accountings ofpetitioner's special needs trust under the Trustees Accounting Act (TAA), chapter 11.106 RCW, bars petitioner's current suit, which is timely under the Trust and Estate Dispute Resolution Act (TEDRA), chapter 11.96A RCW. We review a published Court ofAppeals decision affirming the summary dismissal ofpetitionerRachel Anderson's breach oftrust action againstthe trustee and two members ofa committee charged with making trust disbursements, and her malpractice action against the attorney hired to file annual trust accountings with the superior court. We hold that because Rachel was not represented by a guardian ad litem when the court approvedthe trust's annual accountings, she did not have notice ofthese proceedings and accordingly can
now bring a breach oftrust action under TEDRA. We reverse the Court ofAppeals, vacate its award ofattorney's fees, and remand for further proceedings. FACTS AND PROCEDURE When Rachel Anderson (formerly Rachel Rodgers) was six years old, ahorse kickedher in the face and she sustained serious injuries. Her many fractures and lacerations required multiple surgeries and she suffered severe cognitive and emotional trauma. Rachel's family hired respondent Richard McMenaminto pursue apersonal injury action againstthe owner ofthe horse. Br. ofAppellant Rachel Marguerite Anderson at 4.

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OnAugust 25, 1997, the Clallam Cmmty Superior Court approveda personal injury settlement of$300,000.00 and the creation ofthe "RachelMarguerite Rodgers Trust." McMenaminhiredrespondent attorneyWilliamDussaultto draw up the trust agreement. After attorney's fees and other costs, a net amount of$187,160.66 entered the trust. As outlinedinthe trust agreement, respondentWells Fargo Bank, NA served as trustee. The agreement also created a trust advisory committee (TAC) composed of petitioner's mother, AndreaDavey (formerly AndreaRodgers); andrespondent McMenamin, who were taskedwith making distribution decisions for Rachel's benefit. The trust agreement identifies the trust as a special needs trust intendedto help Rachel cope withher severe disabilities stemming from the accident. The trust agreement declares that itis the purpose ofthis Trustto provide extra and supplemental medical, health, and nursing care, dental care, developmental services, support, maintenance, education, rehabilitation, therapies, devices, recreation, social opportunities, assistive devices, advocacy, legal services, respite care, personal attendant care, income and other tax liabilities, and consultant services for RACHEL MARGUERITE RODGERS over and above the benefits she otherwise receives. Clerk's Papers at 296. Moreover, the trust agreement declares anintentionthat the funds beused for purposes specific to Rachel's injuries and disabilities andbeyondbasic parental support obligations. 1 The TAC is charged with making distribution decisions

"Further, it is not the intent ofthis Courtthat the funds providedby this settlementbe used to excuse the obligations ofhernatural parents to provide for RACHEL MARGUERITE RODGERS's continuingmaintenance and basic support in accordance with their natural support obligations for minor childrenunderthe laws ofthe State ofWashington. Payments from this Trust shall be supplemental to such support obligations and shall not supplant the basic support 3No. 89788-3
and is given "absolute andunfettered discretion to determine when and ifRACHEL needs regular and extra supportive services as referred to inthe paragraphs above." 

### !d. at 297. The agreementrequires the trustee (Wells Fargo) to deliver an annual statement of the tmst's financial and investment activity to Rachel, any court appointedpersonal representative, and the TAC members. Additionally, the trust agreementrequires that this annual statementbe filed withthe courtfor approval. The trust also contains a section governing majorpurchases like real estate. This sectionprovides that the title to or ownership ofan asset like a house mustbe maintained withthe trustunless the trustee and the TAC agree otherwise. Additionally, the trustee has discretion to allow the beneficiaryto reside inthe house rent-free, but onlyifadvised bythe TAC thatthebeneficiaryis not eligible for anypublic rent assistance due to her disability. Rachel takes issue withhow her trust has been administered, alleging breachof fiduciary duties and legal malpractice. First, she challenges the trust's purchase ofa minivan and subsequent operating andinsurance costs, claiming that the car was never used for its claimedpurpose oftaldngherto far-offdoctor's appointments. Rachel also challenges the trust's purchase ofcomputers and related software. She argues thatthese computers and software were usedbythe entire family and as such were a natural parental expense not at all relatedto her disability. Next, Rachel contests the procedures obligation ofthenatural parents as determinedbythe laws ofthe State ofWashington." Clerk's Papers at 295.
4No. 89788-3 the trust used to purchase a house in the name ofher mother's then boyfriend. She argues thatthe process surrounding the purchase ofthe house violated express provisions for "majorpurchases" contained in the trust agreement. Rachel also challenges the use of trust money to purchase birthday gifts that Rachel contends was actually used for new carpeting and a swimming pool. Finally, Rachel contends thatthe trustee and legal fees charged to the trust were excessive and at above market rates. Br. ofAppellant Rachel Marguerite Anderson at 8-12. As required by the terms ofthe trust, the trustee made annual filings with the court detailing all financial and investment activity ofthe trust during the prior year. The trustee, Wells Fargo, hired respondent attorney Dussault to prepare the annual reports for court approval. The trust filed seven different accountings from 2000-2009 and the court approved each one in a succinct order. The form and effect ofthese accountings was governed by the TAA, chapter 11.106 RCW. Rachel filed her complaint on July 22, 2011 in Clallam County Superior Court against Andrea Davey, McMenamin, Wells Fargo, and Dussault, alleging breach of fiduciary duties and malpractice. Motions for summaryjudgmentwere filed by Dussault, McMenamin, and Wells Fargo. The court granted summaryjudgmentto McMenamin, Dussault, and Wells Fargo. The superior courtthen dismissed all ofRachel's claims, including her claim against her mother, Andrea. Rachel appealed as to McMenamin, Dussault, and Wells Fargo, but chose not to appeal her claim against Andrea.

5No.**89788~3** On appeal, Division Two affirmed in apublished decision. Anderson v. Dussault, 177 Wn. App. 79, 310 P.3d 854 (2013). The court reasoned that Rachel's claims were barredby RCW 11.106.080, aprovision ofthe TAA that makes court approval ofan accounting final and binding on all parties, even incompetentbeneficiaries. Because the superior court had approved all the accountings and Rachel never appealed those approvals, she could not now pursue breach oftrust claims based on conduct disclosed in those accountings. Division Two also ordered Rachel to pay Dussault's and Wells Fargo's attorney's fees, citing RCW 11.96A.150. This court accepted review on April2, 2014. DISCUSSION A. The Trustees' Accounting Act Passed in 1951, the TAA outlines procedures for the discretionary and mandatory review ofaccountings ofthe receipts and disbursements oftrusts. The TAA requires trustees to deliver an annual statementto each adult income trust beneficiary detailing all receipts and disbursements ofthe trust during that year. RCW 11.106.020. In addition to that required annual statement, the TAA allows trustees to file intermediate accountings in superior court and likewise allows beneficiaries to petitionthe courtto directthe trustee to file an interim accounting. RCW 11.106.030, .040. Whenever a trustee files an accounting, whether at its own election or the court's mandate, the court must issue a detailed notice and ask for objections to be filed before a certain date ("the return date"). RCW 11.106.050. In order to facilitate this objection

6No. 89788-3
process, the TAAprovides that "[t]he court shall appoint guardians ad litem as provided in RCW 11.96A.160." RCW 11.106.060. Further, RCW 11.96A.l60 is a TEDRA provision that outlines procedures for the discretionary appointment ofguardians ad litem. Once the return date has passed, the court assesses the "correctness ofthe account and the validity and propriety ofall actions ofthe trustee" and issues a decree approving
or rejecting the accounting and "surcharging the trustee or trustees for all losses, ifany, caused by negligent or wilful breaches oftrust." RCW 11.106.070. The decree approving or rejecting the accounting, furthermore, "shall be deemed final, conclusive, and binding upon all the parties interested including all incompetent, unborn, and unascertained beneficiaries ofthe trust subject only to the right ofappeal under RCW 11.106.090." RCW 11.106.080. B. TEDRA The legislature passed TEDRA in 1999 to "set forth generally applicable statutory provisions for the resolution ofdisputes and other matters involving trusts and estates in a single chapter under Title 11 RCW." RCW 11.96A.010. TEDRA also creates methods for nonjudicial resolution oftrust disputes. 

### !d. TEDRA is an extensive statute, but mostpertinenthere is its provision for a statute oflimitations for breach oftrust actions. TEDRAprovides athree-year statute of limitations for beneficiaries to bring actions for breach oftrust. RCW 11.96A.070. Under this provision, the beneficiary has three years from the date she or her personal representative was sent a report that adequately discloses the potential for a breach of

7No. 89788-3
trust claim. TEDRA details the information that must be included in this report in order to impute notice ofapotential claim to the beneficiary. One piece ofrequired information is a statement explaining to the beneficiary that she has aright under the TAA to request that an accounting be filed with the superior court. RCW ll.96A.070(l)(b)(vii). This statute oflimitations will be tolled, and notice will not be imputed to the beneficiary, ifthe beneficiary is a minor without a guardian ad litem. RCW 11.96A.070(4). As explained above, the court retains discretion to appoint ornot appoint guardians ad litem under TEDRA. RCW 11.96A.160. C. The TAA does not bar petitioner's TEDRA claim Petitioner contends that the TAA does not bar herbreach oftrust claim because RCW 11.106.060 ofthe TAA requires appointment ofa guardian ad litem and she never received a guardian appointment. Petitioner focuses on the TAA's requirement that "[t]he court shall appoint guardians ad litem." RCW 11.106.060 (emphasis added). Respondents contend that the plain language ofRCW 11.106.060 requires guardians to be appointed "as provided in RCW 11.96A.160," a provision ofTEDRAthat creates a discretionary appointmentprocedure. So the appointment ofguardians under the TAA is likewise a discretionary determination, and the court's failure to appoint one here was not error. Statutory construction is an issue oflaw thatwereview de novo. State v. JP., 149 Wn.2d 444,449-50,69 P.3d 318 (2003). In conducting this review, our primary purpose is to ascertain and effectuate the intent ofthe legislature. Id. Further, "itis the duty of

8No. 89788-3 this courtto construe two statutes dealing with the same subject matter so that the integrity ofboth will be maintained." Gilbert v. SacredHeartMed. Ctr., 127 Wn.2d 370, 375, 900 P.2d 552 (1995). Petitioner mistakenly focuses on whether appointment ofguardians is discretionary or mandatory. The plain language ofthe TAA is unambiguous and requires that appointment ofguardians underthe TAA be governed by TEDRA's procedures. Because TEDRA makes appointment ofguardians discretionary, so too must appointment ofguardians be discretionary under the TAA. See In re Estate of Jones, 152 Wn.2d 1, 10-11, 93 P.3d 147 (2004) (holdingthat one provision's permission for removal only for '"reasons specified'" in a second provision incorporated the secondprovision's catchall phrase '"for any other cause or reason which to the court appears necessary'"). In any event, the parties focus on the wrong question. Though the superior court did not err by failing to appoint a guardian for Rachel when it consideredher trust accountings, a question remains whether abreach oftrust claim that would be timely brought under TEDRA is barred by the TAAprovision establishing the finality of accountings filed with the court. To answer this question, our analysis mustbegin with the plain language ofthe TAA and TEDRA. 

### !d. at 11 ("Where a statute is unambiguous, the court assumes the legislature means what it says and will not engage in statutory constructionpasttheplain meaning ofthe words."). Read together, the plain language ofthe TAA and TEDRA

9No. 89788-3
reveal a legislative intent that minor beneficiaries have notice only where the court appoints a guardian ad litem or they have a valid virtual representative. As outlined above, TEDRAprovides a three-year statute oflimitations for breach oftrust actions calculated from the time thatthe beneficiary receives notice ofthe potentiality ofa claim. RCW 11.96A.070. Notice ofthe potentiality ofa claim is accomplished by the trustee sending the beneficiary or her representative a report containing specified information. Among other things, the report must contain a statementthat the beneficiary has the right to demand an accounting with the court under the TAA. RCW 11.96A.070(1)(b)(vii). Butthis statute oflimitations is tolled, and notice is therefore not imputed, where the beneficiary is a minor without an appointed guardian. RCW 11.96A.070( 4). Accordingly, notice ofa potential claim, which by definition requires notice ofthe ability to demand a TAA accounting, is not imputed to the beneficiary until she reaches the age ofmajority or has a guardian appointed. Here, because the court never appointed Rachel a guardian, she did notreceive legal notice of her potential breach oftrust claim, or her right to demand an accounting underthe TAA, until she turned 18. At that point the three-year statute oflimitations began to run, and she properly initiated this action within three years ofthat time, when she was 20 years old. Just as minors without guardians will not receive legal notice ofthe potentiality of
a breach oftrust claim without notice oftheir ability to demand a TAA accounting, the TAA notice provisions lead to the conclusionthat minors without guardians will not

10No. 89788-3 receive legal notice ofan ongoing accounting initiated by the trustee. When any TAA accounting is filed, the court is required to issue a detailed notice. This notice must specify the time and place for the return date, include the names ofthe trustee, and ask that any objections be filed by the return date. RCW 11.106.050. Additionally, the notice must be personally served on all parties or their virtual representatives. !d.; RCW 11.96A.ll0. Meanwhile, a related provision ofTEDRA defines "virtual representation" to include both guardians and parents, but the statute specificallyprovides that a conflict ofinterest defeats virtual representation.2 Immediately after detailing the procedures for notice, the TAA outlines procedures for appointing guardians and representatives in order to facilitate the beneficiary's ability to respond to the accounting before the court rules on it. RCW 11.106.060. Here, Rachel did nothave a guardian ad litem and never personally received notice ofany ofthe accountings that occurred during her minority. Her mother's notice ofthe accountings cannot qualify as virtual representation because of the existing conflict ofinterest between Rachel and her mother. Accordingly, Rachel
never received proper notice ofthe ongoing accountings. Though respondents are correct that the appointment ofguardians is discretionary under both the TAA and TEDRA, there must be a consequence for initiating an accounting proceeding without one. Just as a minor does not have notice ofher ability to bring a TEDRAbreach oftrust claim ifshe

2 "To the extentthere is no conflict ofinterest between the representative and the person represented
... (b) A guardian ofthe person may represent and bind the incapacitated person [or] (f) A parent may represent and bindthe parent's minor or unborn child or children ifa guardian for the child or children has notbeen appointed." RCW 11.96A.l20(4). 11No. 89788-3
does not have a guardian, we hold that minors without an appointed guardian or other valid virtual representative lack notice ofany ongoing accounting proceedings. This analysis is consistent with cannons ofstatutory construction adopted by this court. In cases ofstatutory inconsistencies, the later and more specific statute controls
over the earlier and more general one. Diaz v. State, 175 Wn.2d 457, 470, 285 P.3d 873 (2012); MICHAEL SINCLAIR, A GUIDE TO STATUTORY INTERPRETATION 138 (2000). Thus, even ifone concludes that the plain language ofTEDRA and the TAA cannotbe squared, TEDRA, as the later statute more specific to Rachel's breach oftrust action, would control. And TEDRA explicitly tolls the statute oflimitations during minority where no guardianhas been appointed. Respondents' argument to the contrary lacks support. Respondents hinge their argument on the language offinality contained in the TAA and the interpretation ofthis language in a Court ofAppeals case, In re Testamentary Trustsfor Barovic, 128 Wn. App. 196, 114 P.3d 1230 (2005). ButBarovic, while recognizing that a TAA accounting cannot be revised once approved by the court, in fact supports the allowance ofan independent cause ofaction for breach oftrust. Though theBarovic court did hold that Barovic relinquished his right to recover sums that should have been reported on past accounting statements because the TAA accountings were final and Barovic never appealed, the court also noted that Barovic did not file an action for breach offiduciary duty under TEDRA. 

### !d. at 202 n.7 ("Barovic claims that Pemberton breached her fiduciary duty. Buthe never filed an action for breach offiduciary duty

# -:-See RCW

12No. 89788-3 11.96A.070(1)(a) (actions for breach offiduciary duty have three-year statutes of limitation)."). Barovic supports our reading ofthe statutes. D. Additional Arguments Respondent Dussault also argues that the doctrine of judicial estoppel blocks Rachel's suit. He contends that Rachel accepted the benefits ofthe trust distributions, which were approved and finalized by the court, and that she cannot now complain after the fact that those benefits were improperly administered. Resp'tDussault's Suppl. Br. at 13-14. Butjudicial estoppel requires aparty to take inconsistentpositions at twojudicial proceedings. SeeArkison v. EthanAllen, Inc., 160 Wn.2d 535, 538-39, 160 P.3d 13 (2007). Rachel has never taken a position in court inconsistent with the one she asserts here. She was not aparty to any ofthe approved accountings because she was a minor and no guardian ad litem had been appointed. Judicial estoppel does not apply. Additionally, Dussault and Wells Fargo contend that collateral estoppel and res judicatablock this action because Rachel chose not to appeal the superior court's summary dismissal ofher claim against her mother, instead focusing her appellate efforts
on her claims against respondents. Resp'tDussault's Answer to Pet. for Review at 14- 16; Wells Fargo Bank, NA's Resp. to Pet. for Review at 11-12. Neither collateral estoppel nor resjudicata apply because here the issues and claims are not being relitigated, but rather were appealed first to the Court ofAppeals and are now on review in this court. An appeal is not a second adjudication for collateral estoppel or resjudicata purposes. See FredHutchinson Cancer Research Ctr. v. Holman, 107 Wn.2d 693, 708,

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732 P.2d 974 (1987) (rejecting the argumentthatthe release ofa cotrustee compromises
an appeal as to the remaining trustee); Miller v. St. Regis Paper Co., 60 Wn.2d 484,485, 3 7 4 P.2d 675 (1962) ("[T]he rejection ofan industrial insurance claim on the ground that the workman was not in the course ofhis employment,from which no appeal is taken, is
resjudicata against the employer in a subsequent action by the workman." (emphasis added)). Rachel, and all appellants, are free to challenge on appeal all or some ofthe claims and issues decided bythe trial court. Her appeal as to respondents cannot be barred simply because she did not appeal as to Andrea. Preclusion does not apply. Finally, at oral argument, respondents suggestedthat because McMenamin acted
as Rachel's personal injury attorney and oversaw the creation ofher special needs trust, he stepped into the shoes ofa guardian, though he was never formally designated as such. We decline to reach this argument raised for the first time at oral argument and unaddressed in the parties' briefing. RAP 12.1. Moreover, there is no evidence in the record that McMenamin served in this role. CONCLUSION We holdthat the TAA does not bar Rachel's claims. Because she did nothave a guardian ad litem when her trust accountings were filed with and approved by the court, she did not have the required notice ofthose proceedings and so cannotnow be barredby them. TEDRA's three-year statute oflimitations is tolled for minors without guardians, and Rachel's claims are timely under this provision. In addition to the issues of judicial estoppel and preclusion addressed above, respondents urge us to decide several other

14No. 89788-3 contingent arguments raised, but not decided, at the Court ofAppeals? Though this court may review de novo all trial court errors oflaw, here the trial court's summaryjudgment hearing and order suggest it thought Rachel's claim was barred by the TAA. Rather than addressing undeveloped arguments with little briefing and no clear trial court consideration, we leave it to the trial court on remand to evaluate the merits ofthese contingent claims. Accordingly, we reverse the Court ofAppeals, vacate its award of attorney fees, and remand for further proceedings.

3 In particular, respondents argue that the terms ofthe trust agreement bar Rachel's suit, that Dussault did not owe Rachel a duty and therefore cannot be sued for malpractice, and thatno breach ofduty occurred. 15No. 89788-3

WE CONCUR:



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