IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

In the Matter of the Marriage of

No. 78988-1-I

GILLIAN K. HOPSON, f/k/a Gillian K.

Ben-Artzi, DIVISION ONE

Respondent, UNPUBLISHED OPINION

and

ERIC BEN-ARTZI,

Respondent,

KILGOUR WILLIAMS GROUP; COLIN

KILGOUR; and DANIEL WILLIAMS,

Intervenor-Appellants,

LABATON SUCHAROW LLP,

Intervenor-Respondent. FILED: December 9, 2019

APPELWICK, C.J. — Hopson and Ben-Artzi dissolved their marriage in 2014.

At the time, Ben-Artzi had a whistleblower claim pending before the SEC. The

dissolution decree awarded each of them 50 percent of the net proceeds of any

whistleblower award. Ben-Artzi later entered into contracts with Kilgour, Williams,

and KWG, which had provided him with expert services in the whistleblower action.

The contracts increased KWG’s expert services fee and required Ben-Artzi to pay

Kilgour and Williams a portion of his award. The SEC awarded Ben-Artzi

$8,250,000. Hopson then moved to create a child support trust for their children,
No. 78988-1-1/2

funded by Ben-Artzi’s award share. The trial court ordered the creation of the trust,

and requested that the SEC forward payments to Hopson and the court registry.

Kilgour, Williams, and KWG argue that the trial court violated CR 60 and the federal

government’s sovereign immunity. We affirm.

FACTS

In September 2006, Gillian Hopson1 and Eric Ben-Artzi were married in New

York. In March 2013, they separated while living in Washington. Hopson served

Ben-Artzi with a petition for dissolution on March 30, 2013.

In April 2013, while the dissolution proceedings were pending, Ben-Artzi,

acting as the president of Model Risk LLC, entered into a written agreement with

Kilgour Williams Group (KWG). Under the agreement, KWG agreed to provide

Ben-Artzi expert services in support of his whistleblower claim against his former

employer, Deutsche Bank AG. The agreement also required Model Risk to pay

KWG a fee equal to three percent “of the gross value of any Award paid to The

Claim as granted by the [Securities and Exchange Commission (SEC)]’s Office.”

Labaton Sucharow, LLP (Labaton) represented Ben-Artzi in the

whistleblower action. Ben-Artzi agreed to pay Labaton 1 8 percent of any proceeds

awarded to him by the SEC.

On May 21, 2014, the trial court issued a decree dissolving Hopson and

Ben-Artzi’s marriage. In the decree, it ordered Ben-Artzi and his attorneys to “keep

the wife apprised and advised of the developments and progress of

1 The dissolution decree changed Gillian’s last name from Ben-Artiz to

Hopson.

2
No. 78988-1 -1/3

proceeds . . . or any other such monetary dispensation . . . in any

action, . . . including . . . the whistleblower matter before the SEC and its derivative

or related proceedings.” It stated that “[t]his shall occur not less than quarterly

each year, or within 10 days of entry of an important ruling, order, award, or

judgment, etc.”

The trial court awarded “50% of the net proceeds” of “the whistleblower

matter before the [SEC]’ to both Hopson and Ben-Artzi. In its findings of fact and

conclusions of law, it provided:

Direct litigation costs shall be paid from the gross proceeds before

calculation of the net community proceeds, and shall include attorney

fees for [Ben-Artzi’s] attorneys Thad Guyer and Jordan Thomas; fees

paid to experts who testified or were identified in discovery as

testifying experts; court reporter expenses for transcription

necessary in the litigation; and any other expenses directly related to

the litigation and agreed by the parties.

ltfurtherfound that Ben-Artzi “should be ordered to pay indirect litigation expenses

from his portion of the litigation proceeds described above, not the wife’s portion.”

It stated that his obligations “shall include . . . fees for {KWG].”

The trial court also ordered Hopson and Ben-Artzi to pay for their children’s

“reasonable and necessary post-secondary educational expenses.” Specifically,

it ordered Hopson to pay 25 percent and Ben-Artzi to pay 75 percent of such

expenses. Ben-Artzi appealed the dissolution decree, findings of fact and

conclusions of law, order of child support, and parenting plan. In re Marriage of

Ben-Artzi, No. 72063-5-I, slip. op. at 1 (Wash Ct. App. Aug. 10, 2015)

(unpublished), http://www.courts.wa.gov/opinions/pdf/720635.pdf. This court

affirmed each order in August 2015. fri.

3
No. 78988-1-1/4

As the whistleblower proceeding progressed, Ben-Artzi and KWG entered

into a new agreement. On August 1, 2014, KWG’s fee was amended from three

to five percent, and Ben-Artzi agreed to sell, assign, and transfer KWG’s work

product to Cohn Kilgour and Daniel Williams in order for them to submit their own

claim to the SEC. In exchange, Kilgour and Williams agreed to pay Ben-Artzi 60

percent of the gross amount of all monetary awards resulting from their claim.

Hopson was not a party to this agreement, and the record does not indicate that

she was advised of the agreement.

In June 2015, while Ben-Artzi’s appeal of the dissolution decree was

pending, Hopson moved for a temporary restraining order prohibiting Ben-Artzi

from disposing of the proceeds in any way. She filed the motion after learning that

the SEC had ordered Deutsche Bank to pay a $55 million fine. Citing Ben-Artzi’s

history of not complying with court orders, Hopson asserted that ‘that pattern of

behavior is predictive of his compliance related to any SEC. . . proceeds he obtains

without proper disbursal by the Court.”

Later that month, the trial court found that it had the authority to direct Ben

Artzi “to deposit sums anticipated to be received in to this Court’s registry pending

disposition of his appeal.” It entered an order restraining and enjoining him from

transferring, or removing, encumbering, concealing, taking

possession of or in any way disposing of any net proceeds received

from any entity pursuant to both the whistle blower complaint with the

SEC and the OSHA wrongful termination suit. . . except in so far as

necessary to transmit the funds to the registry of the Whatcom

County Superior Court, to be held by the clerk of court pending

motion and hearing and any ruling of the Court of Appeals.

4
No. 78988-1-115

The SEC issued a preliminary determination of the whistleblower claim in

July 2016, recommending an $8,250,000 award for Ben-Artzi.2 In August 2016,

the Financial Times published an article Ben-Artzi wrote renouncing his award.

Eric Ben-Artzi, We Must Protect Shareholders from Executive Wroncidoinq, FIN.

TIMES, August 21, 2016. In the article, Ben-Artzi explained that he was

disappointed that the SEC imposed a fine on Deutsche Bank’s shareholders

instead of the managers responsible for “‘inflating the value of its massive portfolio

of credit derivatives.” He observed that his lawyers and Hopson had a claim on a

portion of the award, and requested that his share ‘be given to Deutsche and its

stakeholders.”

That same month, Kilgour and Williams entered into another agreement

with Ben-Artzi after learning that he had publicly renounced his award. They felt

that his “recent media campaign” impaired their likelihood of successfully

appealing the SEC’s denial of their application for an award. As a result, they

requested that he direct the SEC to pay them $2,500,000 of his award share. “[l]n

addition to the contracted amount payable to [KWG),” Ben-Artzi agreed to direct

the SEC to make the following payments out of his award share: (1) $247,500 to

KWG, under the April 2013 contract, (2) $1,250,000 to Kilgour, and (3) $1 250,000

to Williams.

2 Kilgour and Williams note that the SEC recommended against granting

them an award. On November 8, 2019 the United States Court of Appeals for the

Second Circuit denied their appeal. Kilgour, v. Sec. and Exch. Comm’n, F.3d

2019 WL 5849495, at *10 (2nd Cir. Nov. 8, 2019)

5
No. 78988-1-1/6

The SEC issued its final determination on November 30, 2017, awarding

Ben-Artzi “15% of the monetary sanctions collected in the Covered Action, for a

payout of more than $8,000,000.”~ It also made note of the orders in Hopson and

Ben-Artzi’s dissolution proceedings, stating,

[l]n an order entered on May 21, 2014, and later affirmed by the

Washington State Court of Appeals, the Divorce Court decreed how

the proceeds from any award to [Ben-Artzij are to be distributed

among various interested parties, including [Ben-Artzi’s] former

spouse, [Ben-Artzi’s] former counsel, and Claimants #3 and #4 for

their firm’s services as an expert.

Two weeks later, Hopson moved for an order directing the SEC to deposit

the funds awarded to Ben-Artzi into the court registry for disbursement, less the 1 8

percent owed to Labaton under its representation agreement. She argued that

she was “entitled to her 50% share of the remaining SEC award monies as

community property.” A hearing on the motion was set for December 29, 2017.

On December 26, Kilgour, Williams, and KWG moved to continue the

hearing and intervene. They argued that Hopson’s claim to 50 percent of the

remaining award “is a violation of the terms of the Findings and the Decree in this

case, and fails to protect equitable lienholders protected by both the Findings and

the Decree as it attempts to make an award of gross proceeds.” (Emphasis

added.) Neither their motion nor Kilgour’s declaration attached to the motion

~ Kilgour, Williams, and KWG note that the SEC denied their claims, and

they appealed. They state that, as of December 21, 2018, their appeal was

awaiting oral argument.

6
No. 78988-1-1/7

mentioned their August 2016 agreement with Ben-Artzi.4 The trial court granted

the motion to intervene, but denied the motion for a continuance.5

On January 3, 201 8, the trial court granted Hopson’s motion. It directed the

SEC to deposit “any and all monies awarded under the Order to . . . Eric Ben-Artzi,

less 18% to be paid to Labaton Sucharow, into the Whatcom County Superior

Court registry.” It also stated that, upon receipt of the funds into the registry,

“Petitioner and Respondent and other Joined third parties may each petition the

Court by separate motion for release or disbursement of funds consistent with the

allocations previously ordered by this Court.” The SEC’s Office of the General

Counsel responded to the trial court’s order on January 8, 2018. It stated that the

SEC could not transfer the funds to the court’s registry until the “successful

resolution of any appeals that are filed challenging the underlying order that

granted the award.”

A few days later, Hopson filed another motion. She sought to update the

consolidated judgment entered on December 16, 2015,6 disburse the funds to be

received from the SEC, and fund a support and education trust for her children

with Ben-Artzi. She requested that the SEC award be disbursed as follows: (1)

~ Of their three agreements with Ben-Artzi, Kilgour attached only the 2013

and 2014 fee agreements to his declaration.

~ The trial court also allowed Labaton to intervene.

6 The trial court had entered an order finding that Ben-Artzi owed Hopson

$450,982.88 in “total outstanding judgments, past due child support, past due

maintenance, attorney fees, discovery sanctions, appellate attorney fees and

costs, and other recovery amounts.” It also found that he owed her $40,922.80 in

interest on those amounts.

7
No. 78988-1-118

$4,335,185.60 to Hopson, (2) $2,429,814.40 to Ben-Artzi, and (3) $929,187.00 to

a support and education trust for the benefit of their children.

Hopson asked that the trust be funded by Ben-Artzi’s “separate property

share of the SEC proceeds.” In a declaration attached to her motion, she stated,

“Given the persistent and extreme intransigence exhibited by Eric throughout this

case, this Court should order such a trust be created and funded by Eric in an

amount sufficient to guarantee all future child support due and post-secondary

education.” As an alternative, she asked that the trial court order Ben-Artzi to place

“the equivalent of two years’ of child support in the court’s registry pursuant to

RCW 26.18.150.”

In response, Kilgour, Williams, KWG, and Labaton argued that Hopson’s

request for the establishment of an educational trust should have been raised at

trial. They stated, “[T]he court should concern itself with established current debts

and not future, or hypothetical debts.” And, they addressed the August 2016

agreement between Kilgour, Williams, and Ben-Artzi. Pursuant to the agreement,

they requested that Kilgour and Williams each be paid $1 ,250,000.00 out of Ben

Artzi’s share of the net proceeds. Kilgour, Williams, and KWG also asserted that

the action implicated sovereign immunity principles. Hopson argued in response

that the trial court lacked jurisdiction to rule on Ben-Artzi’s contractual obligations

to KWG. And, she contended that none of Kilgour, Williams, and KWG’s claimed

fees should be deducted from the SEC award.

8
No. 78988-1 -119

Ben-Artzi also argued that the trial court lacked jurisdiction to decide

whether Kilgour, Williams, and KWG were entitled to the amounts they claimed.

Alternatively, he asserted that Kilgour and Williams lacked contractual rights to be

paid $1,250,000 each underthe August 2016 agreement. Asto Hopson’s motion,

he stated,

As I stated in the previous hearing, I am eager for Gillian to receive

the funds as determined by previous court orders as soon as

possible. I hope the court will then quickly lift the sanctions imposed

against me, so that I can safely re-enter the [United States] and see

my sons. However, I ask once again that my taxes be taken into

account. As reiterate[d] my request for withholding Israeli income

taxes of 50%, a request that was ignored by the court in the previous

hearing. As an alternative, I ask the court to withhold 30% [United

States] Federal taxes in accordance with IRS Publication 515.

At a hearing on Hopson’s motion, Ben-Artzi opposed the trial court

“awarding anything” to Kilgour, Williams, and KWG. When asked whether he

opposed the establishment of the trust, he stated,

No, I do not, Your Honor, so long as it doesn’t, I understand that if

there is insufficient funds for taxes then if I do not, if I do not oppose

this then it will be more difficult for me to negotiate with a tax

authority. So I think I might have to formally object.

On August 24, 2018, the trial court issued its findings and order on Hopson’s

motion. It found that “[t]he parties agree that 18% of the award should be paid

directly to Mr. Ben-Artzi’s attorneys in the SEC matter, Labaton Sucharow, LLP.”

And, it clarified that the direct litigation costs to be deducted from the award in

calculating the net proceeds include KWG’s three percent fee under the 2013

contract. It explained,

The Intervenors’ fees were 3% of any SEC award when this Court

entered its Findings and Decree. Entry of the Findings and Decree

9
No. 78988-1 -1/10

was a final resolution of the parties’ shares of any SEC award. While

Ben-Artzi was free to change his agreement with {KWG], he did not

have authority to change or pledge Ms. Hopson’s interest, which was

to be determined based on a net award of 79%. Any amounts owing

to {KWG] under subsequent agreements are the responsibility of Mr.

Ben-Artzi. Determination of any fees Mr. Ben-Artzi may owe to

IKWG1 is, of course, outside this Court’s iurisdiction.

(Emphasis added.)

The trial court awarded Hopson 50 percent of the net proceeds of the SEC

award, $3,258,750.00, plus $696,262.38 for prior judgments and assessments,

and $828,186.25 as trustee for a child support and postsecondary educational

expenses trust account. It also awarded Ben-Artzi 50 percent of the net proceeds,

less the additional amounts awarded to Hopson, for a total of award of

$1,734,301.37.

The trial court stated its basis for creating the trust:

The Court finds the arrangements set forth below in paragraph 3.3,

to fund child support and post-secondary educational expenses, are

reasonable and necessary to assure the adequate support of the

children. This finding is based on all the circumstances of this case,

including Respondent, Eric Ben-Artzi’s agreement to this

arrangement; the lack of proximity and contact between the parents;

and the history of nonpayment of support throughout the pendency

of the case. RCW26.18.030; Bryantv. Bryant, 68 Wn.2d 97[, 411

P.2d 4281 (1966).

Last, the trial court requested that the SEC forward the amounts due to

Hopson to the court registry. It explained, “As this is a final order of this Court, this

order remains subject to modification only in the event that the SEC award is not

paid as described in Section 2 of this order.”

Kilgour, Williams, and KWG appeal. Ben-Artzi does not appeal.

10
No. 78988-1-I/il

DISCUSSION

The appellants7 make two arguments. First, they argue that the trial court

violated CR 60 by creating a trust that modified the dissolution decree. Second,

they argue that the trial court violated sovereign immunity by requesting that the

SEC forward payments to the court registry.

I. A Motion Under CR 60 Was Not Required

The appellants argue first that the trial court’s order creating the trust

modified the dissolution decree in violation of CR 60. They note that the 2014

decree did not create a trust for child support and educational expenses. Thus,

they contend that the order creating the trust “effected a modification of the decree

because it reduced Dr. Ben-Artzi’s share of the net proceeds of the whistleblower

award by $828,186.25 to fund a trust for the future support and education of the

children.”

The appellants rely on In re Marriage of Bobbitt, 135 Wn. App. 8, 144 P.3d

306 (2006). There, Esser and Bobbitt’s dissolution decree awarded Bobbitt a

property in Yakima “as his separate property.” jç~ at 14. It also assigned him the

property’s mortgage liability. j~ç~ After Esser found out that Bobbitt had failed to

make mortgage payments for four months, she started making the payments

herself. kl. When an offer to purchase the property was made, she moved for

permission to sell it and place the proceeds in her attorney’s trust account. ki. at

14-15. The trust was meant to facilitate the payment of her existing judgments

~ Throughout the remainder of the opinion, we refer to Kilgour, Williams, and

KWG collectively as “the appellants.”

ii
No. 78988-1-1/12

against Bobbitt, including back child support. j.çj. at 15. The trial court granted her

motion. ki.

On appeal, Bobbitt argued that the trial court abused its discretion or acted

beyond its jurisdiction in authorizing Esser to sell the property. ki. This court

agreed. ki. at 18. It noted, “It has been the rule in Washington that the trial court

does not have jurisdiction to order the sale of the parties’ assets without their

consent because there is no statutory grant of such power to a trial court.” at

15. While trial courts have ordered sales in some cases, this court explained that

“the trial court’s consideration of the issue occurred during the pendency of the

case or at the conclusion of the trial, not after a full and final division of the property

had been made.” ki. at 15-16.

And, “[njot only did the decree award the Yakima property entirely to

Bobbitt, but it also appear[ed] to allocate any sale proceeds for community tax debt

and for a debt owed to Dave Nelson.” ki. at 18. Thus, this court held that the trial

court erred in allowing Esser to sell Bobbitt’s property “to enhance her ability to

collect her judgments against Bobbitt.” Id. It stated, “Because the time for appeal

had run on the property division, her remedy was to file a Civil Rule 60 motion to

vacate the decree or enforce any judgments by process of law.” Id.

Here, the trial court did not modify the property division in the dissolution

decree. It still awarded both Hopson and Ben-Artzi 50 percent of the net proceeds

of the SEC award. It also ordered that a separate amouht, $696,262.38, of Ben

Artzi’s share be awarded to Hopson to satisfy his outstanding judgments, including

back child support. The appellants do not assign error to that determination.

12
No. 78988-1-1/13

And, unlike Bobbitt, the trial court did not allow Hopson to sell Ben-Artzi’s

award share to collect on her judgments against him. Rather, it ordered the

creation of a trust for future child support funded by Ben-Artzi’s share, and

appointed Hopson as trustee. It ordered that $828,186.25 of the funds awarded

to Ben-Artzi be placed in the trust. The trust is meant to facilitate payment of Ben

Artzi’s future child support obligations in the face of his history of not paying child

support, his move to Israel, and his failure to pay his outstanding obligations from

the property division in the decree.

Hopson did not ask the trial court to modify the dissolution decree. Nor did

the court purport to modify the decree. In the decree, the trial court had determined

that Hopson is responsible for 25 percent and Ben-Artzi is responsible for 75

percent “of a child’s reasonable and necessary post-secondary educational

expenses.” It also approved the final order of child support requiring Ben-Artzi to

pay $1,778.00 per month. The court utilized these provisions in creating the trust:

$828,186.25 of the funds awarded to Respondent, Eric Ben-Artzi

above, shall be placed in a professionally managed investment

account, with Ms. Hopson or her designee to serve as trustee.

a. $21 1,582 of these funds represent child support that will be due

and payable in the amount of $1,778.00 per month, until each

child reaches the age of 18, and those funds shall be disbursed

to Ms. Hopson on a monthly basis.

b. $616,604.25 shall be retained in trust and applied to fund 75% of

the direct costs of post-secondary education for the two children

of the marriage. Direct costs include tuition, school fees, and

reasonable living expenses for each child. Petitioner, Gillian

Hopson, shall pay the remaining 25% of these costs, as provided

in the decree.

13
No. 78988-1-1/14

Rather than a modification of the decree, Hopson sought enforcement of

the decree in the form of a judgment for back child support, including attorney fees.

And, in light of Ben-Artzi’s failure to pay and his move to Israel, she asked the court

to create a support and educational trust for their children, funded by Ben-Artzi’s

award share. In the order creating the trust, the court cited RCW 26.18.030 as

support for the trust arrangement. Chapter 26.18 ROW governs child support

enforcement. This citation suggests that the court understood the trust as a

mechanism to enforce Ben-Artzi’s child support obligations, not as a modification

to them.

Hopson relies on Abel v. Abel, 47 Wn.2d 816, 821, 289 P.2d 724 (1955), to

support that the trial court had authority to create the trust. In Abel, the trial court

established a trust in a third person for the benefit of the parties’ children. ki. at

820. It did so at the conclusion of a dissolution proceeding, not in an order on a

post-decree motion. jç[~ The State Supreme Court affirmed. ki. at 824.’ It held

that, under former ROW 26.08.110 (1 949),8

in the exercise of its discretion in providing for the welfare of minor

children, [the trial court] has authority to impound property of the

parties in a third person trustee for the benefit of the children, in such

amounts and upon such terms and conditions as the court shall

approve and deem reasonable.

j~. at 821. It also noted that one of the parties or a third person may be named as

trustee. ki.

8 The provisions governing child support and child support enforcement are

now governed by chapter 26.09 ROW and chapter 26.18 ROW, respectively.

14
No. 78988-1-1/15

Here, the trial court found the creation of the trust reasonable and necessary

based on “Ben-Artzi’s agreement to this arrangement; the lack of proximity and

contact between the parents; and the history of nonpayment of support throughout

the pendency of the case.” But, it did so in an order on a post-decree motion, not

in the dissolution decree. Abel is silent as to whether the trial court has authority

to create such a trust in post-decree order.

The trial court in which the prior support order was entered “retains

continuing jurisdiction under [chapter 26.1 8 RCW] until all duties of either support

or maintenance, or both, of the obligor, including arrearages, have been satisfied.”

RCW 26.18.040(3). And, chapter 26.18 ROW is to be “liberally construed to assure

that all dependent children are adequately supported.” ROW 26.18.030(3). These

provisions suggest that a trial court has authority to create a trust to facilitate the

enforcement of a child support order. A proceeding to enforce a child support

obligation may be commenced by filing a motion in an existing action. ROW

26.18.040(1)(b). Ohapter 26.18 ROW does not require a party to bring a OR 60(b)

motion in order to enforce another party’s child support obligations. Any argument

to the contrary is without merit.

Even if we were to construe the trust’s creation as a modification to the

dissolution decree, the trust modified Ben-Artzi’s child support obligations, not the

property division. Under ROW 26.09.170(1), Hopson was not required to file a OR

60(b) motion to modify the child support order incorporated in the decree. Any

claim to the contrary lacks merit. ROW 26.09.170(1) provides that “the provisions

of any decree respecting maintenance or support may be modified . . . except as

15
No. 78988-1-1/16

otherwise provided in this section, only upon a showing of a substantial change in

circumstances.” Washington courts have consistently held that a substantial

change in circumstances is “one that was not contemplated at the time the original

order of support was entered.” In re Marriage of Scanlon, 109 Wn. App. 167, 173,

34 P.3d 877 (2001). A trial court generally has broad discretion to modify child

support when there has been a substantial change in circumstances. In re

Marriage of Goodell, 130 Wn. App. 381, 388, 122 P.3d 929 (2005). We review

modifications to child support orders for manifest abuse of discretion. In re

Marriage of Schumacher, 100 Wn. App. 208, 211, 997 P.2d 399 (2000).

The trial court found the creation of the trust reasonable and necessary

based on “all the circumstances of the case, including . . . Ben-Artzi’s agreement

to this arrangement; the lack of proximity and contact between the parents; and

the history of nonpayment of support throughout the pendency of the case.” It is

undisputed that since entry of the child support order, Ben-Artzi has moved to

Israel and owes Hopson almost $700,000.00 in past judgments, including

$44,450.00 in back child support. These facts clearly support finding a substantial

change in circumstances and modification to the child support order. Thus, even

if the trial court modified Ben-Artzi’s support obligations, it did not abuse its

discretion in doing so in the absence of a motion under CR 60(b).

However, we need not decide this issue. Ben-Artzi does not appeal the

creation of the trust, and the appellants lack a proper basis for doing so. While the

appellants challenge the trust’s creation, they do not claim any authorization from

Ben-Artzi to represent him. And, they cite no legal authority allowing a third party

16
No. 78988-1-1/17

creditor of a child support debtor to intervene on appeal of that child support

obligation. “Where no authorities are cited in support of a proposition, the court is

not required to search out authorities, but may assume that counsel, after diligent

search, has found none.” DeHeer v. Seattle Post-Intelliqencer, 60 Wn.2d 122,

126, 372 P.2d 193 (1962).

The appellants argue that they are entitled to a five percent fee, based on

the postdecree contract they entered with Ben-Artzi in August 2014. They also

argue that they are entitled to $2,500,000 from Ben-Artzi’s award share, based on

another postdecree contract they entered with him in August 2016. Ben-Artzi

entered the 2016 contract after the trial court had restrained him from encumbering

the net proceeds of the award. The appellants contend that the trial court

improperly modified the dissolution decree without applying CR 60(b) when it

imposed the trust for future child support. They argue that they are aggrieved

because the trust will interfere with their claims against Ben-Artzi.

The trial court allowed the appellants to intervene below to assert their

interest in the litigation costs awarded in the original decree. The order at issue

clarified that KWG is owed the three percent fee from the net proceeds of the SEC

award. But, the court declined to rule on the appellants’ interest in Ben-Artzi’s

award share. It stated,

[T]he issue before the Court is how the settlement or the [SEC] funds

should be divided between [Ben-Artzi] and Ms. Hopson. I do not

intend to rule on Kilgour Williams’ entitlement to payment. I don’t see

that issue as being before the Court at all except insofar [as] they

may be entitled under the contractual agreements that were made in

this case.

17
No. 78988-1-1118

As to the claim of [$]1 .25 million I see that as a claim between

Mr. Ben-Artzi and Mr. Kilgour and Mr. Williams and I won’t be making

a determination on entitlement to those fees.

The only determination I’ll be making is as to how the various

costs should be divided between Ms. Hopson and Mr. Ben-Artzi.

In a dissolution proceeding, “the court has practically unlimited power over

the property” in the case, “but only as between the parties.” In re Marriage of

Soriano, 44 Wn. App. 420, 422, 722 P.2d 132 (1986) (quoting Arneson v. Arneson,

38 Wn.2d 99, 102, 227 P.2d 1016 (1951)). “The dissolution court has no power

over the property as to the rights of third parties claiming an interest in the

property.” ~ The court did not assert authority over the appellant’s property. The

court properly declined to adjudicate the appellants’ postdissolution contractual

claims against Ben-Artzi.

At oral argument, the appellants stated that their claims against Ben-Artzi

are in litigation in New York. Any claim of conflicting priority of claims to the

whistleblower award is premature and not properly before this forum. Therefore,

the appellants are not aggrieved by the trial court’s order.

Because neither Hopson nor Ben-Artzi—the only parties to the decree and

child, support order—appealed the order creating the trust, that order is now the

law of the case. ~ Tornetta v. Allstate Ins. Co., 94 Wn. App. 803, 809, 973 P.2d

8 (1999) (“A final order from which no appeal is taken becomes the law of the

case.”). The appellants lack a proper legal basis to challenge the trust’s creation.

And, their argument that a motion under CR 60(b) was required is frivolous.

18
No. 78988-1-1/19

II. Federal Sovereign Immunity Was Not Violated

The appellants argue second that the trial court violated sovereign immunity

by requesting that the SEC forward payment to Hopson as trustee of the support

and education trust. They contend that “[t]he federal government’s sovereign

immunity deprives courts of jurisdiction to direct the disposition of assets in the

Treasury of the United States.”

“An action seeking specific relief against a federal official, acting within the

scope of his delegated authority, is an action against the United States, subject to

the governmental privilege of sovereign immunity.” State v. Vance, 1 84 Wn. App.

902, 916, 339 P.3d 245 (2014). A suit against the United States is defined broadly

as “any action seeking a judgment that would: 1) ‘expend itself on the public

treasury or domain;’ 2) ‘interfere with the public administration;’ or 3) ‘restrain the

Government from acting’ or ‘compel it to act.” Fed. Bureau of Investigation v.

Super. Ct., 507 F. Supp. 2d 1082, 1094 (ND. Cal. 2007) (quoting Washington v.

Udall, 417 F.2d 1310, 1315 (9th Cir. 1969)). Whether the trial court violated

sovereign immunity is a question of law that this court reviews de novo. See Cost

Mgmt. Servs., Inc. v. City of Lakewood, 178 Wn.2d 635, 641, 310 P.3d 804 (2013)

(“We review questions of law de novo.”).

Quoting 15 U.S.C. § 78u-6(g)(1)-(2)(A), the appellants assert that the trial

court violated sovereign immunity because the “Investor Protection Fund, from

which the SEC pays whistleblower awards, ‘is established in the Treasury of the

United States.” But, the trial court did not compel or direct the SEC to forward

payments to the court registry. Instead, it “requested” that the SEC forward

19
No. 78988-1 -1/20

Hopson the amount to be placed in the trust. The appellants do not dispute this.

Nor do they cite authority to support that such a request, rather than a direction,

violates sovereign immunity. Accordingly, the trial court did not violate the federal

government’s sovereign immunity. The appellants’ argument that it did is frivolous.

Ill. Attorney Fees

A. Appellants

Hopson first argues that because the appellants’ sovereign immunity

argument is frivolous, they should be sanctioned with an award of fees under RAP

18.9(a). She also requests “interest on the withheld child support trust fund,

payable from sums otherwise allocated to [the appellants],” under RAP 1 8.9(a). In

addition to the appellants’ making a frivolous argument, she asserts that their

appeal was undertaken for the purpose of delay.

Under RAP 18.9(a), this court may

order a party, . . . who uses these rules for the purpose of delay, files

a frivolous appeal, or fails to comply with these rules to pay terms or

compensatory damages to any other party who has been harmed by

the delay or the failure to comply or to pay sanctions to this court.

An appeal is frivolous when, “considering the entire record, the court is convinced

that the appeal presents no debatable issues upon which reasonable minds might

differ,” and “the appeal is so devoid of merit that there is no possibility of reversal.”

Advocates for Responsible Dev. v. W. Wash. Growth Mqmt. Hearings Bd., 170

Wn.2d 577, 580, 245 P.3d 764 (2010) Raising at least one debatable issue

precludes a finding that the entire appeal is frivolous. kJ. at 580-81. The appeal

20
No. 78988-1-1121

here is frivolous. Accordingly, we award Hopson attorney fees under RAP 18.9(a),

subject to her compliance with RAP 18.1.

Hopson requests compensatory damages in the form of interest on the

support and education trust predicated on the delay caused by this appeal. But,

her request is premature because of the appeal, pending concurrently with this

case, in the United States Court of Appeals for the Second Circuit to set aside the

SEC’s denial of Kilgour’s and Williams’s whistleblower award applications. That

appeal has since been denied. Kilgour v. Sec. and Exch. Comm’n, F.3d —,

2019 WL 5849495, at *10 (2nd Cir. Nov. 8, 2019). However, nothing in the record

before us established that the award was available for disbursement, but for the

appeal in this case. And, the court in the New York action may determine that the

appellants’ postdecree contracts with Ben-Artzi are valid. In that case, there will

likely be another action to determine the priority of claims on the award. Without

knowing the resolution of those claims, evidence that Hopson was damaged by

the appellants’ alleged delay in this case is lacking. Thus, the claim is not ripe for

resolution. Should evidence in support of that claim become available, it is a claim

properly initiated in the trial court. As a result, we deny Hopson’s request for

compensatory damages under RAP 18.9(a), without prejudice.

B. Ben-Artzi

Hopson also requests attorney fees under RAP 18.1. Although Ben-Artzi is

not a party on appeal, she requests that he pay the fees from his share of the

whistleblower award. She cites a hold harmless provision in the dissolution

decree.

21
No. 78988-1-1/22

RAP 18.1(a) allows this court to award reasonable attorney fees if

applicable law grants a party the right to recover such fees. Under RCW

26.09.140, “the appellate court may, in its discretion, order a party to pay for the

cost to the other party of maintaining the appeal and attorneys’ fees in addition to

statutory costs.” And, the decree’s hold harmless provision states, “Each party

shall hold the other party harmless from any collection action relating to separate

or community liabilities set forth above, including reasonable attorney fees and

costs incurred in defending against any attempts to collect an obligation of the

other party.”

To support her request for fees, Hopson contends that Ben-Artzi’s “postdecree scheming and agreements with [the appellants], intended to limit [her]

share of the SEC proceeds and evade his child support obligations, have caused

this litigation as surely as though he were prosecuting these claims for [the

appellantsj.” But, Ben-Artzi did not appeal the order creating the trust. And, even

if his actions created competing claims for the SEC award, Hopson’s actions also

invited the appellants to intervene in this case.

In her first motion requesting that the SEC deposit funds into the court

registry for disbursement, Hopson failed to account for KWG’s three percent fee

under the 2013 agreement. She accounted only for Labaton’s 18 percent fee,

asking the trial court to direct “the SEC to deposit the SEC award, less 18%, to the

Whatcom County Superior Court registry.” In response to her motion, the

appellants intervened to assert their interest in the gross proceeds of the award.

22
No. 78988-1 -1/23

Under the decree, expert fees in the SEC action are to be deducted from the award

before calculating the net proceeds due to Hopson and Ben-Artzi.

A determination of breach of the terms of the decree is a factual issue

properly raised in the trial court. Hopson did not seek attorney fees below based

on a breach of the decree’s hold harmless provision. Accordingly, we decline to

award Hopson attorney fees against Ben-Artzi.

We affirm and award Hopson attorney fees under RAP 18.9(a), against the

appellants, subject to her compliance with RAP 18.1.

~- /

WE CONCUR:

I

23