IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

DIVISION II

In re the Marriage of:

No. 49393-4-II

STEVEN D. WAZNY,

Respondent,

UNPUBLISHED OPINION

and

SHANTEL P. WAZNY,

Appellant.

MAXA, A.C.J. – Shantel Wazny appeals the trial court’s denial of her postjudgment 

motions regarding the dissolution decree that terminated her marriage to Steven Wazny. The 

decree incorporated a CR 2A settlement agreement that allocated community property and debts 

between the parties.

Steven1 was the director of operations of and had an ownership interest in two companies

that owned and operated fast food restaurants: AJP Enterprises LLC and NHG Enterprises LLC. 

The CR 2A agreement and dissolution decree allocated the interest in AJP to Steven and did not 

reference NHG, which an expert had stated had no value.

Shantel filed two motions regarding the dissolution decree and the CR2A agreement: a 

CR 60(b) motion to vacate the property and debt distribution portions of the dissolution decree 

 

1 To avoid confusion, first names are used to identify Shantel and Steven. No disrespect is 

intended. 

Filed

Washington State

Court of Appeals

Division Two

September 19, 2017
No. 49393-4-II

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and a motion to divide equally between the parties certain property that was undisclosed and 

undivided in the CR 2A agreement. The motions included various claims, but Shantel’s primary 

allegation was that $300,000 in loans Steven received from the primary owner of AJP in fact 

were profits from AJP that Steven had concealed from her. The trial court denied both motions. 

A court commissioner also denied Shantel’s motion to clarify that she was not responsible for the 

second mortgage on the community home that was awarded to her and denied her request for 

reasonable attorney fees.

We affirm the trial court and the court commissioner in all respects with two exceptions. 

First, we hold that the trial court erred by applying a clear, cogent, and convincing evidence 

standard rather than a preponderance of the evidence standard for Shantel’s undisclosed property 

motion. We reverse the trial court’s denial of Shantel’s undisclosed property motion on one 

issue: her allegation that Steven concealed $300,000 of AJP profits and that those profits 

constituted undisclosed property under the CR 2A agreement. Second, and consistent with this 

ruling, we also vacate the trial court’s award of reasonable attorney fees to Steven as the 

prevailing party under the CR 2A. 

We remand for the trial court to consider, using the preponderance of the evidence 

burden of proof, Shantel’s claim that Steven concealed $300,000 of AJP profits and that the 

$300,000 was undisclosed property under the CR 2A agreement.

FACTS

Steven and Shantel were married in 1997 and separated on October 23, 2011. Steven 

subsequently filed a dissolution petition. 
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At mediation on September 4, 2013, Steven and Shantel reached a settlement and signed a 

CR 2A agreement that memorialized the settlement terms. On November 21, the trial court entered 

a decree of dissolution and findings of fact and conclusions of law. Both pleadings incorporated 

the CR 2A agreement.

Business Assets

Steven paid $75,000 for the 10 percent equity interest in AJP, which was formed in 

September 2010. AJP’s primary owner was Ajay Chopra. Steven was the director of 

operations/operating partner and was entitled to receive guaranteed payments as well as five 

percent of the company’s net cash flow. AJP owned a number of fast food restaurants.

Steven also owned a 10 percent interest in the equity and profits of NHG. Chopra also 

was the primary owner of this company. As of December 31, 2012, NHG owned a single fast 

food restaurant that had opened on December 17, 2012. The record is unclear when NHG was 

formed, but the evidence suggests a formation date of around October 2012.

Before entering into the settlement, Steven and Shantel jointly retained a CPA to perform 

business valuations of AJP and NHG. The CPA prepared reports on these valuations in July 

2013. He estimated that Steven’s interest in AJP was worth between $150,000 and $300,000 on

December 31, 2012. He estimated that Steven’s interest in NHG had little or no current value on 

December 31, 2012 because its recently opened restaurant was operating at a loss and the 

company had approximately $400,000 of debt. 

The parties did not ask the CPA to update his valuations before the mediation.
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CR 2A Agreement and Dissolution

The CR 2A agreement incorporated a worksheet showing the property and debt allocation

between Steven and Shantel. The property division showed that Shantel would receive the 

family home. A handwritten interlineation added that “wife takes 1st and 2nd” mortgage. 

Steven, Steven’s attorney, and Shantel’s attorney all initialed the interlineation, but Shantel did 

not. The 10 percent interest in AJP was valued at $44,500 after loan repayment and was 

allocated to Steven. NHG was not listed on the property worksheet.

The debt division showed that “B of A Equity Line of Credit for Buy-in to AJP” in the 

amount of $42,319 was allocated to Steven. Clerk’s Papers (CP) at 7. Steven also was assigned 

debts in the amount of $25,000 for a loan from AJP, the balances on three credit cards, $18,000 

for a loan on a boat, and $19,000 for a loan on a car.

The CR 2A agreement included an undisclosed property provision that stated, “Any 

undisclosed property shall remain 50% each to the parties as tenants in common and may be 

brought back to Court. Prevailing party entitled to attorney fees and costs on court ruling.” CP 

at 3.

The trial court’s findings of fact entered with the dissolution decree incorporated the CR 

2A agreement by reference. The findings also provided a list of the parties’ real and personal 

community property, which did not include NHG.

The dissolution decree sections for property and liabilities allocated to the two parties all 

stated, “See CR 2A Agreement on file and incorporated herein by this reference.” CP at 707. 

However, the section on liabilities to be paid by Shantel also stated, “Wife shall be responsible 

for payment of . . . the 1st and 2nd mortgages on the family home awarded to her.” CP at 707.
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Motion to Vacate and Post Decree Motions

On February 17, 2016 Shantel filed two related motions regarding the dissolution decree 

that had been entered over two years earlier. First, she filed a motion to vacate the portions of 

the CR 2A agreement and dissolution decree relating to the valuation of AJP and the distribution 

of debt. This motion to vacate was brought under CR 60(b) based on Steven’s alleged fraud in 

(1) concealing more than $300,000 in profits from AJP, resulting in a low valuation of the 

interest in AJP allocated to him; and (2) claiming as community debts allocated to him certain 

sham debts and the second mortgage that he later claimed Shantel was responsible for, resulting 

in a disproportionate debt distribution.

Second, Shantel filed “post decree motions” on various issues. She alleged that the 

following property was “undisclosed” in the CR 2A agreement: (1) $300,000 in concealed profits 

from AJP, (2) a $31,733.33 distribution from NHG, and (3) the value of Steven’s interest in 

NHG.

2 Shantel claimed that she was entitled to 50 percent of this property under the undisclosed 

property provision of the CR 2A agreement. Shantel also requested that the trial court rule that 

she was not responsible for the second mortgage on the family home that had been awarded to 

her.

3

 She noted in a declaration that the second mortgage was the same debt that had been 

allocated to Steven as an equity line of credit in the CR 2A agreement.

 

2 Shantel also argued that Steven misrepresented that NHG had no value and should have 

updated Deaton’s valuation before the mediation.

3 Shantel’s motion also raised other issues regarding enforcement of the dissolution decree that 

are not at issue on appeal.
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The trial court heard argument on the motions and made an oral ruling on April 22. The 

court ruled that Shantel had failed to show by clear, cogent, and convincing evidence that Steven 

committed fraud or misrepresentation to warrant redistributing AJP’s profits or reallocating the 

community debt. The trial court sent for consideration by a trial court commissioner the issue of 

whether Shantel was responsible for the second mortgage on the community home under the 

terms of the CR 2A agreement and other issues regarding enforcement of the dissolution decree 

provisions not at issue in this appeal. The trial court deferred consideration of attorney fees until 

after the commissioner ruled on the other issues.

On June 28, the commissioner heard arguments and ruled that “[t]he CR2A is clarified to 

state that the wife is responsible for the Bank of America Equity Loan line of credit on the family 

residence.” CP at 1017. The commissioner ruled in favor of Shantel on her other claims, 

including Steven’s obligation to execute a quit claim deed for the community home, to pay for 

the replacement of a deck on the home, and pay certain pre-dissolution household expenses. 

However, the commissioner declined to award Shantel attorney fees.

Motion for Reconsideration

On May 19, Shantel filed a motion for reconsideration, arguing that the trial court’s 

ruling had addressed only her motion to vacate and not her undisclosed property motion. She 

emphasized that the court’s application of the clear, cogent, and convincing standard applied 

only to the motion to vacate and not to her motion on undisclosed property under the CR 2A 

agreement, for which a preponderance of the evidence standard applied. On July 1, the trial 

court heard argument on Shantel’s motion for reconsideration. In an oral ruling, the trial court 

denied reconsideration and declined to clarify its ruling. The court emphasized that the clear, 
No. 49393-4-II

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cogent, and convincing standard was proper for all of Shantel’s motions. The court entered 

findings of fact and conclusions of law regarding Shantel’s motion to vacate and undisclosed 

property motion and the motion for reconsideration.

The trial court subsequently awarded Steven reasonable attorney fees based on the 

attorney fee clause in the “undisclosed property” provision of the CR 2A agreement.

Shantel appeals the trial court’s denial of her motion to vacate, undisclosed property

motion, and motion for reconsideration, and the award of attorney fees to Steven.

ANALYSIS

A. MOTION TO VACATE

Shantel argues that the trial court erred by denying her CR 60(b) motion to vacate the 

AJP valuation and division and the distribution of debt. We disagree. 

1. Legal Principles

CR 60(b)(4) authorizes a trial court to vacate a judgment for “[f]raud . . . , 

misrepresentation, or other misconduct of an adverse party.” The rule is aimed at judgments that 

were unfairly obtained. Dalton v. State, 130 Wn. App. 653, 668, 124 P.3d 305 (2005). A party 

seeking relief under CR 60(b)(4) must show fraud, misrepresentation, or misconduct by clear, 

cogent, and convincing evidence. Id. at 665.

The decision to grant or deny a motion to vacate a judgment under CR 60(b) is within the 

trial court’s discretion. Jones v. City of Seattle, 179 Wn.2d 322, 360, 314 P.3d 380 (2013). 

Therefore, we review CR 60(b) orders for abuse of discretion. Tamosaitis v. Bechtel Nat’l, Inc.,

182 Wn. App. 241, 254, 327 P.3d 1309 (2014). A trial court abuses its discretion if its decision 

is based on untenable grounds or reasons. Id.
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2. Analysis

 a. $300,000 of Concealed AJP Profits

Shantel argues that Steven fraudulently concealed $300,000 of AJP profit distributions, 

and that the CPA would have given a significantly higher valuation of Steven’s interest in AJP if 

he had known that AJP had those additional profits. She asserts that AJP must be revalued and 

that community property must be reallocated to reflect the higher value going to Steven.

Shantel argued in the trial court that Steven concealed the $300,000 in AJP profits by 

having Chopra hold the money in his account and transfer it to Steven after the dissolution. She 

claimed that the $300,000 represented a profit distribution and not a loan. Her position was 

based on an analysis of amounts Chopra received from AJP and of AJP’s profits compared with 

distributions to Steven during 2012 and 2013.

However, Chopra stated in a declaration that the $300,000 he gave Steven was a loan, not 

Steven’s income from AJP. Further, the trial court found that the evidence Shantel presented did 

not explain why Steven was entitled to more money from AJP than he received. Therefore, the

trial court concluded that there was not clear, cogent, and convincing evidence that Steven had 

concealed $300,000 of AJP profits. Substantial evidence supports that finding.

Shantel also argues that Steven’s “transfer” of $300,000 to Chopra before that amount 

was returned to him as a loan was fraudulent under the Uniform Fraudulent Transfer Act 

(UFTA), chapter 19.40 RCW, and as a result she met her burden to prove clear, cogent, and 

convincing evidence of fraud.4 Under the UFTA, a creditor can avoid a property transfer

 

4 Shantel argued for the first time on reconsideration in the trial court that the court should have 

applied a presumptive fraud standard based on the UFTA instead of requiring clear, cogent, and 

convincing evidence of fraud.
No. 49393-4-II

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deemed to be fraudulent to the extent necessary to satisfy the creditor’s claim. RCW 

19.40.071(a)(1). The creditor also may have a cause of action against a person accepting a 

fraudulent transfer. RCW 19.40.081(b)(1); see generally Thompson v. Hanson, 168 Wn.2d 738,

744-45, 239 P.3d 537 (2009). The UFTA provides that certain types of property transfers are 

deemed fraudulent. RCW 19.40.041(a)(1); RCW 19.40.041(a)(2)(ii); RCW 19.40.051(a). 

However, Shantel did not assert a claim under the UFTA to avoid the transfer or to 

recover from Chopra; she moved to vacate a judgment under CR 60(b). Shantel does not present 

any authority that supports the application of the UFTA standards in the context of a CR 60(b)(4) 

motion to vacate for fraud. In the absence of such authority, we decline to apply UFTA 

standards and presumptions in addressing the trial court’s CR 60(b)(4) ruling.

Properly applying the clear, cogent, and convincing standard, the trial court concluded 

that Shantel did not establish that Steven fraudulently concealed $300,000 of AJP income. 

Accordingly, we hold that the trial court did not abuse its discretion in denying Shantel’s CR 

60(b) motion to vacate the AJP valuation and distribution.

 b. Sham Debts

Shantel characterizes four of the community debts allocated to Steven in the dissolution 

decree as sham debts: (1) a $25,000 loan from AJP that Steven did not repay, (2) the balances on 

three credit cards that AJP must have paid, (3) a loan on a boat that either did not exist or Steven 

was not making payments on, and (4) a car loan that AJP must have paid.5

 

5 Shantel also places in this category the second mortgage/equity line of credit allocated to 

Steven in the CR 2A worksheet that he later claimed was Shantel’s debt. But she does not argue 

on appeal that the second mortgage allocation entitles her to relief under CR 60(b)(4). Instead, 

she argues (as discussed below) that she should not be responsible for the second mortgage.
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The trial court noted that the only evidence Shantel presented to show that Steven was 

not liable for the debts was her inability to find payments on the debts in Steven’s bank 

statements. In addition, the court found that Shantel had not presented evidence that someone 

other than Steven was responsible for payment of the debts. The court also relied on In re 

Marriage of Maddix, 41 Wn. App. 248, 703 P.2d 1062 (1985), to conclude that Shantel had an 

obligation to resolve her disagreement about the amount of the debts before entering into the CR 

2A agreement.6 Therefore, the court concluded that Shantel had not shown by clear, cogent, and 

convincing evidence that Steven committed fraud or misrepresentation regarding the community 

debts allocated to him. Substantial evidence supports that finding.

Shantel also argues that Steven had the burden of proving good faith regarding the 

community debt allocate to him. She points out that he failed to produce proof of the credit card 

payments, the boat loan, or the car loan. But in a CR 60(b) motion, the moving party has the 

burden of proof. Dalton, 130 Wn. App. at 665. The trial court found that Shantel did not meet 

her burden.

Accordingly, we hold that the trial court did not abuse its discretion in denying Shantel’s 

CR 60(b) motion to vacate the distribution of community debt.

B. MOTION ON UNDISCLOSED PROPERTY

As noted above, the CR 2A agreement provided that each party would own 50 percent of 

“[a]ny undisclosed property.” CP at 3. Shantel identifies certain property as “undisclosed”: (1) 

 

6

In Maddix, the court stated that when a party has sufficient notice to protect his or her interests, 

it is incumbent upon a party to examine the value of a business before proceeding with the 

dissolution. 41 Wn. App. at 253. The court stated that a party “should not be allowed to return 

to court to do what should have been done prior to entry of the final decree.” Id.
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the $300,000 in allegedly concealed profits from AJP, (2) a $31,733.33 distribution from NHG

that Steven received shortly after the dissolution, and (3) the value of Steven’s interest in NHG. 

She argues that the trial court improperly applied a clear, cogent, and convincing evidence 

standard rather than a preponderance of the evidence standard for the undisclosed property 

motion.

We agree that the trial court erred in applying a clear, cogent, and convincing evidence 

standard when addressing Shantel’s undisclosed property claims. However, we reverse only the 

denial of Shantel’s motion regarding the $300,000 in allegedly concealed AJP profits. The other 

two claims have no merit regardless of the evidence standard applied.

1. Alleged $300,000 in AJP Profits

Shantel argues that the trial court erred by applying the CR 60(b)(4) clear, cogent, and 

convincing burden of proof to the claims brought in her undisclosed property motion. She 

asserts that her burden should have been to show undisclosed property by a preponderance of the 

evidence. We review the applicable burden of proof de novo. In re Marriage of Wehr, 165 Wn. 

App. 610, 613, 267 P.3d 1045 (2011).

Shantel does not dispute that the trial court properly applied the clear, cogent, and 

convincing standard of proof to her CR 60(b) motion. But her undisclosed property claims were 

not based on CR 60(b)(4); they were based on the “undisclosed property” provision in the CR 2A 

agreement. Shantel’s claims presented a factual issue based on the contract language – whether 

certain property was undisclosed and therefore subject to the CR 2A provision requiring joint 

ownership of that property. 
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“[T]he preponderance of the evidence standard generally applies in civil cases.” Dep’t of 

Labor & Indus. v. Rowley, 185 Wn.2d 186, 208, 378 P.3d 139 (2016); see also Nguyen v. Dept. 

of Health, 144 Wn.2d 516, 524, 29 P.3d 689 (2001) (stating that the preponderance standard 

generally applies in civil cases involving monetary disputes between private parties). Steven 

does not cite any authority supporting the application of a clear, cogent, and convincing evidence 

standard to these contract-based claims, and in fact he does not even address this issue. 

In its April 22, 2016 oral ruling on all of Shantel’s postjudgment motions, the trial court 

focused primarily on the CR 60(b)(4) motion. The court engaged in a lengthy analysis of 

Shantel’s argument that the $300,000 in purported loans were concealed profits, and concluded 

that the evidence did not support a finding that Steven was hiding community profits or 

committed fraud or misrepresentation. The court expressly applied the clear, cogent, and 

convincing evidence standard in making these conclusions. The trial court addressed Shantel’s 

undisclosed property claim in one sentence and did not expressly state whether it was applying 

the clear, cogent, and convincing standard or the preponderance standard in making this ruling.

On reconsideration, Shantel argued that the trial court’s application of the clear, cogent,

and convincing standard applied only to the motion to vacate and not to her motion on 

undisclosed property under the CR 2A agreement, for which a preponderance of the evidence 

standard applied.

In response, the trial court made it very clear that it was applying a clear, cogent, and 

convincing standard to all of Shantel’s motions. The trial court stated,

I’m going to deny your motion for reconsideration. I don’t think I need to clarify 

my ruling, I think it was unambiguous. I ruled that the standard was clear, cogent, 

and convincing evidence. I didn’t find there was that standard. I also did not have 

to find that there was a standard by the preponderance of the evidence because that 
No. 49393-4-II

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is not the appropriate standard I had to abide. I found Ms. Wazny’s evidence to be 

insufficient in every respect, and I found that the standard was appropriate of clear, 

cogent, and convincing evidence.

CP at 1067.

The trial court should have applied a preponderance of the evidence standard to Shantel’s 

claim that the $300,000 Steven received was undisclosed property under the CR 2A agreement. 

But the trial court made it clear that it applied the clear, cogent, and convincing evidence 

standard to that claim. Therefore, we hold that the trial court erred in applying the wrong burden 

of proof. And because we cannot determine if the trial court would have made the same ruling 

if it had applied the proper standard, we must remand for the trial court to consider this claim 

based on a preponderance of the evidence standard.

2. NHG Distribution

Steven apparently received his 2013 profit distribution from NHG in the amount of 

$31,733.33 in December 2013, shortly after the dissolution was finalized. Shantel argues that 

she is entitled to half of the NHG distribution because it was undisclosed

Steven does not directly address this argument, but apparently does not dispute that this 

distribution was undisclosed at the time of the settlement. However, the CR 2A agreement 

expressly provides that each party “will keep his/her post separation acquisitions.” CP at 2. The 

parties separated on October 23, 2011. There is no question that Steven’s entitlement to profits 

from NHG earned in 2013 constituted a post-separation acquisition of property. Accordingly, 

we hold that the trial court did not err in denying Shantel’s motion to divide Steven’s $31,733.33 

profit distribution from NHG for 2013.
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3. Value of Steven’s Interest in NHG

Shantel argues that she is entitled to 50 percent of Steven’s interest in NHG under the CR 

2A agreement. However, the trial court made a specific finding of fact that NHG was fully 

disclosed before the parties signed the CR 2A agreement and the dissolution decree. Shantel 

does not appear to dispute this fact, and she cannot deny that the parties jointly retained an expert 

to value NHG long before the settlement.

Instead, Shantel focuses on the fact that NHG was undivided in the CR 2A agreement. 

She claims that “[t]he parties contracted in their CR2A [sic] agreement to split undivided 

property 50-50.” Br. of Appellant at 24-25. But Shantel’s claim is incorrect. The CR 2A 

agreement clearly states that the parties will jointly own undisclosed property, not undivided 

property. Any claim to undivided property must be addressed under the common law (discussed 

below), not under terms of the CR 2A agreement.

There is no dispute that Steven’s interest in NHG was disclosed at the time of the parties’ 

settlement. Accordingly, we hold that the trial court did not err in denying Shantel’s motion to 

divide that interest under the undisclosed property provision of the CR 2A agreement.

C. ENTITLEMENT TO INTEREST IN NHG AS UNDIVIDED PROPERTY

As discussed above, Shantel appears to argue on appeal that she is entitled to divide 

Steven’s interest in NHG under the common law because it was community property and was 

not divided in the CR 2A agreement or the dissolution decree.7 We disagree that Shantel has 

shown that Steven’s interest in NHG was community property.

 

7 Shantel did not rely on the common law in her original motion, referencing only her entitlement 

to divide NHG under the CR 2A agreement. But she did briefly make this argument before the 

commissioner, and on reconsideration.
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Shantel is correct that community property not disposed of in a dissolution is owned 

thereafter by the former spouses as tenants in common. Yeats v. Estate of Yeats, 90 Wn.2d 201, 

203, 580 P.2d 617 (1978). And property acquired during a marriage is presumed to be 

community property. In re Marriage of Schwarz, 192 Wn. App. 180, 189, 368 P.3d 173 (2016). 

However, property acquired after spouses separate is the separate property of each, not 

community property. RCW 26.16.140; Schwarz, 192 Wn. App. at 188-89. This rule is reflected 

in the CR 2A agreement, which provides that each party “will keep his/her post separation 

acquisitions.” CP at 2. The issue here is whether Steven acquired his interest in NHG before or 

after the parties separated.

Shantel states without citation to the record that NHG was formed during the marriage.

But she does not state whether or not NHG was formed before the separation. Steven relies on 

the clause in the CR 2A agreement stating that each party would keep property acquired after 

separation, and implies that his interest in NHG was acquired after the separation. But he does 

not cite to the record to show when he acquired his interest in NHG. The trial court did not 

address or make any finding of fact on this issue, probably because Shantel did not make this 

argument in her original motion. 

The record shows that NHG opened an operating account on October 1, 2012, almost a 

year after the date of the separation. The CPA’s report on NHG states that NHG’s first 

restaurant opened on December 17, 2012. And the financial records indicate that the restaurant 

was likely purchased in November 2012 because there was a large initial deposit of $275,540 

that month from an account owned by Chopra followed three days later by a withdrawal for 

$197,545, which is consistent with purchasing a restaurant. The December statement shows 18 
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deposits over the course of the month totaling $185,714, which is consistent with opening the 

restaurant.

This evidence is consistent with NHG being formed around October 2012 for the purpose 

of purchasing a fast food restaurant. This timing of NHG’s formation also is consistent with the 

CR 2A agreement and the dissolution findings of fact, neither of which list NHG as community 

property. Shantel identifies no evidence or even a reasonable inference showing that NHG was 

formed before the parties separated in October 2011. 

Shantel seems to argue that the fact that Deaton made a valuation of NHG indicates that it 

was community property. But the fact that Deaton prepared a valuation calculation for NHG 

does not establish that NHG was formed before the separation.

The only reasonable inference from the evidence presented is that NHG was formed 

around October 2012, a year after the parties separated. As a result, we cannot apply the 

presumption that Steven’s interest in NHG was community property that the parties jointly 

owned. Accordingly, we hold that the trial court did not err in denying Shantel’s motion to 

divide Steven’s interest in NHG.

D. RESPONSIBILITY FOR SECOND MORTGAGE

Shantel argues that the trial court commissioner erred in finding that she agreed to pay 

the second mortgage because she did not initial the handwritten interlineation on the CR 2A 

agreement. We disagree.

Shantel argues that the division sheet included with the CR 2A agreement is not 

enforceable with respect to the handwritten interlineation indicating that she takes the second 

mortgage. She argues that the CR 2A agreement and division sheets do not clearly show that she 
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in fact agreed to take responsibility for paying the second mortgage because (1) she did not 

initial the handwritten interlineation, (2) the numbers on the division sheet showing the home 

value less the first mortgage were not corrected to reflect her assumption of the second mortgage, 

and (3) the debt division sheet still listed the equity line of credit as Steven’s responsibility.

However, Shantel ignores the fact that the CR 2A agreement was incorporated into the 

dissolution decree. Generally, when the dissolution decree incorporates by reference a 

separation agreement, the agreement merges into the decree. In re Marriage of Yearout, 41 Wn. 

App. 897, 900, 707 P.2d 1367 (1985). In addition, “[w]here a property settlement agreement is 

approved by a divorce decree, the rights of the parties rest upon the decree rather than the 

property settlement.” Mickens v. Mickens, 62 Wn.2d 876, 881, 385 P.2d 14 (1963).

Here, the dissolution decree expressly addressed the second mortgage. Regarding 

Shantel’s liabilities, the decree referred to the CR 2A agreement, but then further stated, “Wife 

shall be responsible for payment of . . . 1st and 2nd mortgages on the family home awarded to 

her.” CP at 707. This provision clarified any ambiguity in the CR 2A agreement and 

unequivocally allocated the second mortgage to Shantel.

Accordingly, we hold that the commissioner did not err in ruling that Shantel was 

responsible for the second mortgage.

E. SHANTEL’S REQUEST FOR ATTORNEY FEES

Shantel argues that the trial court commissioner erred in denying her request for attorney 

fees under RCW 26.09.140. We disagree.

Under RCW 26.09.140, a trial court in a dissolution action “after considering the 

financial resources of both parties may order a party to pay a reasonable amount for the cost to 
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the other party of maintaining or defending any proceeding under this chapter.” A trial court has 

discretion whether to award attorney fees to a party under RCW 26.09.140. In re Marriage of 

Kim, 179 Wn. App. 232, 256, 317 P.3d 555 (2014).

We have reviewed the record, and we hold that the commissioner did not abuse its

discretion in declining to award Shantel attorney fees under RCW 26.09.140.

F. TRIAL COURT’S AWARD OF ATTORNEY FEES TO STEVEN

The CR 2A agreement’s “undisclosed property” provision stated: “Any undisclosed 

property shall remain 50% each to the parties as tenants in common and may be brought back to 

Court. Prevailing party entitled to attorney fees and costs on court ruling.” CP at 3. The trial 

court awarded attorney fees to Steven based on the CR 2A agreement provision. And the court 

awarded Steven the full amount of the attorney fees he incurred, less certain deductions, without 

segregating the fees among Shantel’s various claims.

Shantel challenges the amount of attorney fees the trial court awarded to Steven on 

various grounds. But we need not address these claims because we are reversing on Shantel’s 

primary claim under the CR 2A agreement. Therefore, at this point Steven no longer is the 

prevailing party. Accordingly, we vacate the award of attorney fees to Steven, subject to further 

consideration on remand.

G. ATTORNEY FEES ON APPEAL

Shantel argues that we should award her attorney fees either under the CR 2A agreement 

or under RCW 26.09.140. Although we are remanding the primary undisclosed property issue 

that would be subject to the CR 2A agreement’s attorney fee clause, the prevailing party on that 

issue is not yet known. And Shantel is not the prevailing party on any of the other issues on 
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appeal. Therefore, she is not entitled to recover attorney fees on appeal under the CR 2A 

agreement. And we decline to award Shantel attorney fees under RCW 26.09.140.

Steven argues that we should award him attorney fees under the CR 2A agreement or 

under RAP 18.9(a) for defending against frivolous arguments. Because we are remanding 

Shantel’s primary undisclosed property claim, the prevailing party on that issue is not yet known. 

Steven is the prevailing party on all other issues, but most of them do not involve the CR 2A 

agreement and we decline to award attorney fees on those issues. And we decline to award

attorney fees under RAP 18.9(a) because Shantel’s arguments were not frivolous.

CONCLUSION

We affirm the trial court and the court commissioner in all respects except that (1) we 

reverse the trial court’s denial of Shantel’s undisclosed property motion regarding her allegation 

that Steven concealed $300,000 of AJP profits and that those profits constituted undisclosed 

property under the CR 2A agreement, and (2) we vacate the trial court’s award of reasonable 

attorney fees to Steven as the prevailing party under the CR 2A agreement. We remand for the 

trial court to consider, using the preponderance of the evidence burden of proof, Shantel’s claim 

that Steven concealed $300,000 of AJP profits and that the $300,000 was undisclosed property

under the CR 2A agreement.
No. 49393-4-II

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A majority of the panel having determined that this opinion will not be printed in the 

Washington Appellate Reports, but will be filed for public record in accordance with RCW 

2.06.040, it is so ordered.

MAXA, A.C.J.

We concur:

JOHANSON, J.

LEE, J.