IN THE COURT OFAPPEALS FOR THE STATE OFWASHINGTON

In re the Estate of: 

### ) No. 78932-5-I 

### ) THOMAS R. GILLESPIE 

### ) DIVISION ONE
THOMAS GILLESPIE and MARIE 

### ) GILLESPIE, and the marital community 

### ) composed thereof, 

### ) Appellants, 

### ) v. 

### ) PUBLISHED OPINION



### ) VALERIE GILLESPIE, an individual and 

### ) co-personal representative ofthe ESTATE 

### ) OF THOMAS R. GILLESPIE, and 

### ) JAMES EECKHOUDT, an individual and 

### ) co-personal representative ofthe ESTATE 

### ) OF THOMAS R. GILLESPIE, 

### ) ) Respondents. 

### ) FILED: February 3, 2020
ANDRUS, J.

—Tom and Marie Gillespie, beneficiaries ofthe Estate ofT.R. Gillespie (Estate), appeal a trial court order concluding that they triggered an in terrorem clause in T.R.’s LastWill and Testament (Will) and forfeited their rightto any inheritance from the Estate when they commenced a lawsuit challenging the personal representatives’ management ofthe Estate. We affirm the trial court’s conclusion that the current suit fell within the scope ofthe in terrorem clause, but conclude that resjudicata bars the personalNo. 78932-5-1/2

representatives from relitigating whether the in terrorem clause contains a good faith exception. We also reverse the trial court’s finding thatTom and Marie failed to bring the lawsuit in good faith because the court did not apply the correct standard in making this determination. The trial courtshould, in thefirst instance, determine whether Tom and Marie made a full and fair disclosure of all material facts to their counsel and brought this lawsuit on that legal advice. If Tom and Marie makethis primafacie showing, theyare entitled to a rebuttable presumption of good faith, and the burden shifts to Val and Jim to overcome this presumption with evidence of bad faith. We otherwise affirm the rulings ofthe trial court. FACTS Thomas (T.R.) Gillespie died testate in 2011, and his Will was admitted to probate on July 14, 2011. At the time of his death, T.R. had two living children, Valerie (Val) and Thomas Jr. (Tom).1 T.R.’s son, David, had predeceased him but
was survived byhiswife, Judy, and theirchildren. T.R.’s estate included the estate of his wife, Marianne, who also had predeceased him (hereinafter collectively “Estate”). T.R.’s fourth and final codicil named Val and James (Jim) Eeckhoudt, Judy’s brother, to serve as co-personal representatives. The Will contained an in terrorem clause, stating that any beneficiary who challenged the Will’s probate forfeited his rightto inheritfrom the Estate. During their lifetimes, T.R. and Marianne created a numberoftrusts to hold various assets. The Gillespie Family Trust (Trust), created in 2000, named Val and Jim as co-trustees, and the beneficiaries of the Trust included every living

1 Becausethe majorityofthe parties have the same last name, this opinion refers tothem bytheirfirst names. We mean no disrespect. -2-No. 78932-5-1/3

descendant ofT.R. and Marianne, as well as Judy, their deceased son’s widow. Jim is neithera Trust beneficiary nora beneficiary ofT.R.’s Estate. Around the same time, T.R. and Marianneformed Gillespie, LLC (the LLC), in which they each owned a 50 percent interest. In 2001, T.R. and Marianne conveyed the majority oftheir interest in the LLC to the Trust. As a result ofthis transfer, at the time of his death, T.R. held a 10 percent interest in the LLC, with the remaining 90 percent owned by the Trust. In return, the Trust agreed to pay T.R. and Marianne annual annuities until theirdeaths. In November 2011, four months after Val and Jim opened the probate, John Andersen, Tom’s then-attorney, e-mailed Charles Farrington, Val and Jim’s attorney, a list ofthe Estate’s assets. Andersen’s list confirmed his understanding that the Estate owned a 10 percent interest in the LLC. In a separate e-mail on the same day, Andersen indicated to Farrington that the Trust had incurred a significant amount of debt, which could be alleviated by liquidating the LLC. Andersen sent Farrington his proposed liquidation plan, which reflected theTrust’s receipt of90 percent ofthe liquidation proceeds. In 2012, Val’s personal attorney sentAndersen a Proposed Distribution Schedule forthe Estate. This distribution schedule similarly indicated that the Estate would receive 10 percent of the liquidation proceeds. In 2014, however, Tom and his wife, Marie, filed a petition in King County Superior Court seeking an accounting byVal and Jim, an inventory and appraisal ofthe Estate assets, and an order directing the Estate to paythe mortgage ofan Idaho home in which Tom and Marie lived. Tom explicitly sought a judicial

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declaration that T.R. had never effectively transferred any interest in the LLC to the Trust. He claimed that T.R. and Marianne maintained theirfull interest in the LLC untiltheirdeaths because theTrustfailed to makethe required annual annuity paymentstothem. Tom also challenged the Estate inventorythatVal and Jim had prepared, claiming thatassets identified as belonging totheTrust, including T.R.’s capital account in the LLC, were never properly transferred from the Estate and thus belonged to the Estate. Tom alleged thatthe LLC’s 2011 tax return showed that T.R. “retained his entire original capital account in the LLC until his death.” Consequently, Tom claimed that the entire LLC capital account belonged to the Estate and thatthe inventorydesignation showing a 10 percentownership interest
was erroneous. Tom and Marie’s claims proceeded to trial in September 2014 before now retired Judge Kimberly Prochnau. In her 34-page Findings of Fact, Conclusions of Law and Judgment (2014 Order), Judge Prochnau rejected the contention that the Estate held an interest in the LLC greaterthan 10 percent, and despite Tom’s argumenttothe contrary, concludedthattheTrustowned the remaining 90 percent interest. Judge Prochnau alsofound no breach offiduciary duties byVal and Jim and denied the requestforaforensicaccounting. Judge Prochnau found thatT.R. and Marianne had not paid taxes on the annuity income they had received from the Trustand authorized Val and Jim towithhold funds in the Estateto accountfor potential tax liabilities. Judge Prochnau also concluded thatTom was barred, underthe doctrines of waiver and laches, from challenging either the Trust’s failure to make certain

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annuity payments to T.R. and Marianne, ortheirtransfer of a 90 percent interest in the LLC to the Trust. The court concluded that even though the record showed the payments had not been made as required, there was no evidence that T.R. requested payment or otherwise challenged a lack of payment. Judge Prochnau prohibited Tom from “trying to realign the assets in a manner which the various estate planning devices do not support.” Judge Prochnau alsofound thatTom had misled the probate court byfiling
a 2013 petition to probate theWill and misrepresented that he resided in the state of Washington, misstated that the Will appointed him as sole personal representative, and failed to identify himselfas the largest debtorofthe Estate, to which he owed $600,000. Judge Prochnau found that Tom owed the Estate $605,000, with interestaccruing at6 percent perannum, as ofthe date oftrial, and she enteredjudgment against him in this amount. The courtthen credited Estate distributions owing to Tom from Marianne’s Credit Shelter Trust toward this judgment, leaving a balance owed by Tom to the Estate of $261,557.86. Judge Prochnau ruled that additional cash advances made by the Estate to Tom and Marie would be deducted from the value of their respective shares in the final distributions made to them from the Estate. As a result, Judge Prochnau ordered the personal representatives, Val and Jim, to distribute the 10 percent interest in the LLC to its three beneficiaries, Tom (2 percent), Marie (2 percent), and Val (6 percent). Before that could occur, Val
was ordered to listfor sale real estate the LLC owned in Hawaii and to distribute the net proceedsfrom the sale to the LLC.

-5-No. 78932-5-1/6 Finally, Judge Prochnau also included a provision prohibiting Tom and Marie from suing Val and Jim again: All claimswhich Tom and/orMarie may havewith regard tofacts and circumstances known or reasonably known as ofthis date, noworat any time in the future, against either of the Estates, the Gillespie Family Trust, the Gillespie, LLC, or Cam Square, LLC, or against either of the Personal Representatives of T.R.’s and Marianne’s Estates, Trustees and Managers of the LLCs are forever barred Although Val and Jim sought to disinherit Tom and Marie under the 

### in terrorem clause of the Will, arguing that the lawsuit they initiated fell within the scope ofthat clause, Judge Prochnau declined to do so, concluding: Article IX ofTR’s Will contained an in terrorem clause (Ex. 4) which provided thata beneficiary undersuch Will forfeits his or her interest in the Estate by becoming an adverse party in a proceeding for its probate.

. . . Asimilar, but not identical, provision in awill was read broadlybyourCourtofAppealsto applyto requeststo remove a PR. In re Kubick’s Estate, 9 Wn. App. 413, 513 P.2d 76 (1973), re’L denied, 83 Wash.2d 1002 (1973)

. . . Although TR’s in terrorem clause is similar in its breadth of coverage

. . . , it differs from the Kubick will in that it does not explicitly except challenges made in good faith. Kubick noted, at least in dicta, that such a blanket prohibition might violate the policies inherent in RCW 11 .28.020.

. . . Given the specific statutory exceptions forgood faith challenges and the policy concerns enunciated by Kubick and other cases, the court readsTR’swill to exceptgood faith challengesfrom the punitive aspects ofthe in terrorem clause. Judge Prochnau found Tom and Marie had brought the lawsuit in good faith and thus had nottriggered the 

### in terrorem clause. Tom and Marie were apparently not dissuaded from further litigation, despite the resounding defeat they suffered in 2014. In January 2016, John McGowan, an attorney in Idaho retained byTom and Marie, sent Farrington
a letterdemanding information on the status ofthe LLC capital accounts, claiming

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thatVal and Jim had been withholding the LLC Schedule K-Is from 2012 through 2014 and as a result, the tax documents provided to Tom and Marie fortheirtax return did not explain why there had been a contribution to the LLC in excess of $2 million when there had been no distribution to the LLC members. McGowan demanded that Farrington provide the LLC tax information and delay any distributions from the LLC to the Trust and from the Trustto the beneficiaries. In response, Farrington sent McGowan a copy of the 2014 Order and explained that the capital account adjustments reflected on the LLC documents
were an effortto complywith the 2014 Order. He clearly stated that “[t]he capital account issue youreference was considered

. . . and conclusively found by the Court to be inaccurate so your discussion of ownership, basis, capital accounts, and liquidating distributions ofthe Gillespie LLC is not supported bythe Findings of Fact, Conclusions of Law and Judgmentofthe Superior Court.” Farrington arranged to have the Estate’s K-I, Tom and Marie’s individual K-Is, and the Estate’stax returns for2012 through 2014 sentto McGowan, but he declined to delayanydistributions, contending thatVal and Jim had to makethese distributions in orderto complywith the 2014 Order. Farrington informed counsel that: [Y]ou are at leastthe ninth attorneyto contactVal and Jim and their attorneys in this case over a period of five years.

. . . We have provided extensive discovery and endured a 10-day trial. As each attorney retained byTJ has summarilydismissed TJ and/orMarie as their client, we have had to educate each new attorney as he/she/they appear in the case. Two of TJ’s and Marie’s former attorneys have filed attorney’s fee liens against TJ’s interest in the Estate of TR Gillespie. In addition, TJ owes the Estate of TR Gillespie in excess of$600,000.00. His currentWashington attorney

-7-No. 78932-5-l18 is representing TJ and Marie in the pending attorney’s fees motion relating backto the 2014 court decision. Farrington also informed McGowan ofthe provision ofthe 2014 Order prohibiting Tom and Marie from suing Val and Jim again. Despite previouslyfacing the risk of losing their inheritance based on the in terrorem clause in the Will and being ordered not to sue Val and Jim based on facts known to them atthe time ofthe 2014 trial, on February 29, 2016, Tom and Marie filed a new complaint against Val and Jim in a Blame County, Idaho district court. They claimed thatthe LLC’s 2014 tax return and a balance sheet provided to them in 2015 indicated a “transfer ofcapital” ofapproximately $2.5 million from the Estatetothe Trust. Theyalleged thatVal and Jim had breached theirfiduciary duties by effectuating this capital transfer. Tom and Marie asked the Idaho court to order an accounting and to find that Val and Jim had breached theirfiduciary duties by stating an intentto dissolve and liquidate the LLC withoutthe members’ consent. They once again alleged that the Estate should receive 100 percent of any proceeds generated by the liquidation ofthe LLC’s assets. They also asked foratemporary restraining orderto preventVal and Jim from distributing the LLC’s assets. On March 31, 2016, the Idaho courtdismissed Jim from the lawsuit based
on a lackofpersonaljurisdiction. Shortlythereafter, Tom and Marie dismissed the complaint againstthe remaining defendant, Val, without prejudice. In July 2016, Val and Jim sent the Trust beneficiaries, including Tom and Marie, a letter informing them oftheir intent to liquidate the LLC. They informed the Trust beneficiaries that, as a result of the liquidation, $1,991,139 would be transferred to the Trust’s capital account and that $467,387 would be transferred
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tothe Estate’s capital account, consistentwith theirrespective ownership interests. It is undisputed thatTom received this letter. On September28, 2017, Tom and Mariefiled a new petition in King County Superior Court, seeking an accounting from the Estate. They alleged that any proceeds from the LLC’s liquidation should be distributed in proportion to the members’ capital account balances, ratherthan in proportion to their membership interests. Tom and Marie claimed that the Estate, not the Trust, should receive most, if not all, ofthe liquidation proceeds. In response, Val and Jim, in their capacity as the executors ofthe Estate, argued thatthe2014 Orderbarred these claims becauseJudge Prochnau explicitly found that the Estate owned only 10 percent of the LLC and it was entitled to receive only 10 percent ofthe LLC’s liquidated assets. They also argued thatthe 2014 Order barred Tom and Marie from suing Val and Jim because their claims
were based on facts known to them in 2014. Tom and Marie subsequently amended this petition to assert direct claims of breach of fiduciary duty against Val and Jim individually. In their amended complaint, Tom and Marie alleged thatVal and Jim made an unauthorized transfer of capital when they adjusted T.R.’s LLC capital account to reflect his 10 percent ownership, an action T.R. and Marianne had failed to take when the majority of their interest transferred to the Trust in 2001. Tom and Marie conceded that per the 2014 Order, the Estate owned only 10 percentofthe LLC and theTrustowned the remaining 90 percent, but they argued that Judge Prochnau did not make findings orconclusions as to the associated capital accounts and did notexplicitly

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permit a transfer of capital to reflect the ownership interests. They argued that because Judge Prochnau had not made express findings as to the capital accounts, the Estate was entitled to all ofthe liquidation proceeds, which were in
excess of$2.5 million. In response, Val and Jim testified that they simply had complied with the 2014 Order and had repeatedly informed Tom and Marie oftheir intentto comply with the court’s ownership determinations. They denied initiating any “transferof capital;” instead, they testified they merely fixed an accounting error required by the 2014 Order. They also asserted thatTom and Manes’ claims were barred by
res judicata and/or collateral estoppel. Val and Jim asserted a counterclaim againstTom and Marie, seeking an application ofthe in terrorem clause. Val and Jim then moved for summary judgment dismissal of Tom and Marie’s claims, raising the collateral estoppel and resjudicatadefenses and asking the courtto conclude thatTom and Marie had triggered the in terrorem clause by filing the lawsuit. Tom and Mariefiled a cross motion for partial summaryjudgment, claiming they were entitled to judgment as a matter of law because Val and Jim were unjustified in making a“transferofcapital” and that in doing so, they had unlawfully converted Estate assets and breached theirfiduciary duties. They asserted that Judge Prochnau’s determination that the Trust owned 90 percent of the membership interest in the LLC did not mean thattheTrustalso owned 90 percent of the company’s capital. They contended that Val and Jim were barred by
resjudicatafrom arguing thatthe LLC capital accounting was erroneous.

-10-No. 78932-5-I/i I On June ii, 2018, thetrial court granted Val and Jim’s summaryjudgment motion and denied Tom and Marie’s motion. The order entered bythe trial court contained detailed factual findings and legal conclusions. First, the court determined thatthe2014 Order“required the Gillespie LLCto make an adjustment to capital and did not require Val & Jim as Managers ofGillespie, LLC to ‘transfer’ any capital, and certainly not in their capacity as Co-PRs.” Second, it found no evidence thatVal and Jim had transferred any capital from the Estate totheTrust. Finally, itfound that Tom and Marie were attempting to relitigate the same claims they had previously alleged against Val and Jim by “asserting that Val and Jim acted improperlyto carry out Judge Prochnau’s trial orders.” While the trial court concluded that the filing of the petition violated Judge Prochnau’s order and dismissed all of Tom and Marie’s claims, it reserved ruling and asked for supplemental briefing on whether Tom and Marie had triggered the in terrorem clause and forfeited their rightto inheritfrom the Estate. Afterfurther briefing from the parties, thetrial courtconcluded thatTom and Marie had becomeadverse parties in the proceeding fortheWill’s probate and had thus triggered the in terrorem clause and forfeited their rights to the Estate. It further concluded, contrary to the legal ruling made by Judge Prochnau, that the in terrorem clause did not contain either a “safe harbor” provision or a good faith exception. It further found that “[t]he Plaintiffs have not acted in good faith and cannot avoid the invocation ofthis clause simply because they commenced this litigation with the advice of counsel.” The trial court subsequently entered judgment of attorney fees and costs against Tom and Marie in the amount of

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$53,635 and ordered that Tom and Marie must disgorge any and all partial distributions, debt offsets, advances on distributions, and income they had received from the Estate. Tom and Marie moved for reconsideration, arguing that Judge Prochnau’s legal ruling that there was a good faith exception to the in terrorem clause was binding on the parties through the doctrine of collateral estoppel. The trial court denied the reconsideration motion. Tom and Marie appeal the trial court’s ruling thattheir lawsuittriggered the in terrorem clause, the orderthat they disgorge any inheritance they had already received, and the assessment ofattorneyfees againstthem. STANDARD OF REVIEW We reviewsummaryjudgmentordersde novo, engaging inthesame inquiry
as thetrial court. Summaryjudgment is warranted onlywhen there is no genuine dispute of material fact and the moving party is entitled tojudgment as a matterof law. CR56(c). Thefacts and all reasonable inferences areviewed inthe lightmost favorable to the nonmoving party. Young v. Key Pharm., Inc., 112 Wn.2d 216, 225-26, 770 P.2d 182 (1989); Northgate Ventures LLC v. Geoffrey H. Garrett PLLC, _Wn. App._, 450 P.3d 1210 (2019). ANALYSIS 1. A~licabilityofthe In Terrorem Clause Tom and Marie arguethe trial court erred in concluding thatthe in terrorem clause applied to this case. They alternatively argue that even if this lawsuit invoked the clause, thetrial court erred in failing to give preclusive effectto Judge

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Prochnau’s legal conclusion thatthe clause did not prohibit legal challenges made in good faith on the advice ofcounsel. The in terrorem clause provides: Should any beneficiary underthis LastWill become an adverse party in a proceedingforits probate, such beneficiaryshall forfeithis entire interest hereunderand such interestshall pass as partofthe residue of my estate;

. . . This Article shall not be construed to limit the appearance by any beneficiary as a witness in any proceeding for the probate of this Last Will, nor to limit his appearance in any capacity in a proceeding for its construction. Tom and Marie arguethatthe clause applies onlyto challengestotheWill’svalidity and not to claims relating to the administration of the Estate by its personal representatives. This court reviews the trial court’s interpretation of a will de novo. In re Estate of Burks, 124 Wn. App. 327, 331, 100 P.3d 328 (2004). “The primary duty ofa courtwhen interpreting a will is to determine the intent ofthe testator.” In re Estate of Niehenke, 117 Wn.2d 631, 639, 818 P.2d 1324 (1991). “Such intention must, if possible, be ascertained from the language of the will itself and the will must be considered in its entirety and effect must be given every partthereof.” In
re Estate of Berciau, 103Wn.2d 431, 435, 693 P.2d 703 (1985). The language of the clause provides that a beneficiary forfeits his or her interest if he or she becomes an ‘adverse party in a proceeding for [the Will’s] probate.” Nothing in the plain language ofthe clause limits its application to will contests. Tom and Marie contend that the word “probate” means the court’s act of deeming a will valid and “admitting” it as the legally binding instrument of the

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testator’s intent. The Will does not define the term “probate.” Nor does chapter 11 RCW. In such case, the court may use a dictionary definition to discern the plain meaning on an undefined term. In re Estate of Petelle, 8 Wn. App.2d 714, 718, 440 P.3d 1026 (2019). Atthe time ofthe Will’s execution, the term “probate”
was defined as: [The] Court procedure bywhich awill is proved to bevalid or invalid; though in current usage this term has been expanded to generally refer to the legal process wherein the estate of a decedent is administered. Generally, the probate process involves collecting a decedent’sassets, liquidating liabilities, paying necessarytaxes, and distributing propertyto heirs. These activities are carried out bythe executororadministratorofthe estate, usually underthe supervision ofthe probate court orothercourt ofappropriatejurisdiction. BLACK’S LAW DICTIONARY 1202 (6th ed. 1990).2 The dictionary definition demonstratesthattheterm “probate” hastaken on a meaning beyond will contests to coverthe administration ofan estate. The trial courtdid noterrin concluding thatTom and Marie’s lawsuitwas an adversary proceeding relating tothe probate oftheWill. Their initial petition foran accounting invoked a probate statute, RCW 11 .68.065.~ This statute provides: A beneficiary whose interest in an estate has not been fully paid or distributed may petition the courtfor an order directing the personal representative to deliver a report ofthe affairs ofthe estate signed and verified bythe personal representative.

. . . Upon hearing ofthe petition after due notice as required in RCW 11.96A.110, the court may, for good cause shown, order the personal representative to deliver to the petitioner the report for any period not covered by a previous report.

2 T.R. executed his Will in 1996. “A testator is presumed to have known the law in force when the will was drafted and to have drafted the will in conformitywith that law. Consequently, if a will [is] ambiguous, the law when the instrument was drafted is a circumstance to consider in determining thetestator’s intent.” McDonald v. Moore, 57Wn. App. 778, 780, 790 P.2d 213 (1990).

~ Chapter 11.68 RCW sets out procedures forthe settlement ofestates in probate without courtintervention. TheWill granted nonintervention powerstoT.R.’s personal representatives, and as a result, the probate proceeded underchapter 11.68 RCW.

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They sought a report because they contended that Val and Jim were refusing to provide information tothem orto explain discrepanciestheybelieved existed inthe LLC and Trust tax documents. Their position was clearly adversarial in nature, and they were directly challenging the manner in which Val and Jim were administering the Estate. Their position became even clearer in their amended complaint, in which Tom and Marie accused Val and Jim of breach offiduciary duty and conversion. They alleged that Val and Jim had wrongfully appropriated Estate property by transferring that propertyto the Trust. Tom and Marie alleged thatVal and Jim’s actionsweretaken ‘in the course of[their] administration and probate ofthe Estate ofT.R. Gillespie” and the administration ofthe Trust. Their2017 claims were not materially differentfrom the 2014 claims thatwould have triggered the in terrorem clause but for the implied good faith exception that Judge Prochnau concluded exists. Tom and Marie invoked the in terrorem clausewhen they broughtthis suit.4 Tom and Marie next argue that even if their suit triggered the in terrorem clause, the court erred in concluding that there is no good faith exception to the clause. They maintain that Judge Prochnau’s contrary legal conclusion is binding and thatVal and Jim are precludedfrom nowarguingthatnosuch exception exists. We agree.

“Although the clause permits a beneficiary to ask the court to interpret the Will without forfeiting his inheritance, we conclude that none of Tom and Marie’s challenges concerned the construction ofthe Will. Their breach offiduciary duty and conversion claims were direct attacks on Val and Jim’s administration ofthe Estate. Thus, Tom and Marie’s claims did notfall underthe exception tothe clause.

- 15-No. 78932-5-1/16 Whether resjudicata bars an action is a question of law and is subjectto a de novo review. Ensleyv. Pitcher, 152 Wn. App. 891, 899, 222 P.3d 99 (2009). “The doctrine of

### resjudicata rests upon the ground that a matterwhich has been litigated, oron which there has been an opportunityto litigate, in aformeraction in
a courtofcompetentjurisdiction, should not be permitted to be litigated again.” ki. (internal quotation marks omitted) (quoting Marino Prop. Co. v. Port Comm’rs of Port of Seattle, 97 Wn.2d 307, 312, 644 P.2d 1181 (1982)). “The threshold requirement of res judicata is a valid and final judgment on the merits in a prior suit.” Id. Judge Prochnau decided that under Estate of Kubick, 9Wn. App. 413,419, 513 P.2d 76 (1973), the lack of a good faith exception in an 

### in terrorem clause mightviolate the policies inherent in RCW 11.28.020. Consequently, in the 2014 Order, Judge Prochnau concluded that“Given the specificstatutoryexceptionsfor good faith challenges and the policy concerns enunciated by Kubick and other cases, the court reads TR’sWill to except good faith challenges from the punitive aspects ofthe in terrorem clause.” Val and Jim argue that the public policy discussion in Kubick is dicta and not the holding ofthe case. But that argument could have been made to Judge Prochnau, who ultimately concluded thatthe clause contained such an exception. Even ifJudge Prochnau erred in concluding thatthere was a good faith exception tothe

### interrorem clauseoftheWill, Val and Jim did notappeal this legal conclusion and it became final and binding on the parties. The court erred in concluding

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otherwise. Val and Jim are barred under the doctrine of res judicata from now asserting the absence ofsuch an exception to the Will. Tom and Marie next challenge the trial court’s finding that they did not act in good faith in initiating this lawsuit. They contend that they are entitled to the conclusive presumption that they acted in good faith because they brought the lawsuit on the advice of fully informed counsel. We conclude that the party challenging the application of an in terrorem clause bears the burden of proving they initiated a lawsuit in good faith and on the advice offully informed counsel. Once a petitioner has made a prima facie showing, there is a rebuttable presumption ofgood faith which the opposing party may overcome with evidence ofthe intentional violation ofa court order, dishonesty, improperorsinistermotive, the lack ofanyfactual basis forthe asserted claims, orthe intentional withholding of material factual information from counsel. Because the trial courtdid not apply the correct standard, we reverse for entry offindings offact in light ofthe test set out here. In Kubick, this court adopted a presumption of good faith in the context of the applicability of an in terrorem clause, but it did not explicitly indicate whether the presumption was conclusive or rebuttable.5 In that case, the decedent’s daughter, Mary Lou Cathersal, sought to remove the executor of her father’s estate. 9 Wn. App. at 414. The guardian ad litem, acting on behalf ofthe other

~ A “conclusive presumption,” or an “irrebuttable presumption,” “cannot be overcome by any additional evidence orargument because it is accepted as irrefutable proofthatestablishes a fact beyond dispute.” BLACK’S LAW DICTIONARY 1435 (11th ed. 2019). A“rebuttable presumption,” on the other hand, is “drawn from certain facts that establish a prima facie case, which may be overcome bythe introduction ofcontraryevidence.” BLACK’S LAW DICTIONARY1436 (11th ed. 2019).

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beneficiaries, argued that Cathersal’s petition triggered the 

### in terrorem clause in Kubick’s will and that Cathersal’s lawsuit had not been initiated in good faith. At trial, the court dismissed Cathersal’s case at the close of her case-in-chief but rejected the guardian’s argumentthat Cathersal had forfeited her inheritance. k~. at417. The court reasoned that Cathersal broughtthe case in good faith because she had consulted with an attorney beforefiling it. jç~ This court reversed the trial court’s good faith finding. jç~ at 419-20. Although the court noted thata suit broughton the advice ofcounsel is “persuasive ofthe bona fides ofthe suit,” it could not determine whether Cathersal’s suit had been brought in good faith because the guardian had not been afforded the opportunity to establish what facts were before counsel when counsel provided adviceto Cathersal. ki. at420. The courtstated, in dicta, that “if Mrs. Cathersal laid thefactsfully and fairly before her attorney and acted on his advice in bringing the action, she must be deemed to have acted ‘in good faith and for probable cause’ as a matter of law.” Id. And it did not set out a test for determining whether a petitioner had laid the facts “fully and fairly” before herattorney. The court remanded the matterto allow the petitionerto demonstrate that she had fully informed her counsel and to give the guardian the opportunityto present conflicting evidence. Id. at420-21. In Estate of Mumby, 97 Wn. App. 385, 387, 982 P.2d 1219 (1999), Darlene Wood petitioned to invalidate herdeceased father’s living truston the groundsthat the executor and beneficiary had exerted undue influence over him before his death. j~ at 388. The executor counterclaimed that the no-contest provision in

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Mumby’s will barred Wood from inheriting. j.ç[~. The trial court enforced the clause against Wood. ~ at 391. On appeal, Wood contended that because she consulted an attorney before filing suit, ‘she must be deemed to have acted in good faith.” j~ at393-94. The Mumbycourtdetermined thatthe record supported the trial court’s conclusion thatWood had notfully and fairly disclosed all material facts to counsel. k~. at 394. As a result, it concluded Wood was not entitled to a presumption ofgood faith. j~ The court then went on to analyze whether, in the absence of such a presumption, the trial court properly found that Wood acted in bad faith. j~ç~ It defined “bad faith” as “actual or constructive fraud” or “neglect or refusal to fulfill
some duty,” or an act “not prompted by an honest mistake as to one’s rights or duties, but by some interested or sinister motive.” Id. (internal quotation marks omitted) (quoting Bentzen v. Demmons, 68 Wn. App. 339, 349 n.8, 842 P.2d 1015 (1993)). It affirmed the trial court’s finding of bad faith because the record supported the conclusion that all independent witnesses testified that Wood’s father was competent and exercised his own judgment until his death and his expressed intent was consistent from the date of his will to the date of his death. ki. at 395. In other words, there was no evidence to support any of Wood’s allegations. These cases suggestthatany presumption ofgood faith that mayarise after
a litigant consults counsel may be rebutted by the party seeking to enforce an in terrorem or no-contest clause. The Kubickcourt hinted that any presumption of good faith is rebuttable byallowing the guardian to challengethe completeness or

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fairness of the opposing party’s disclosure to counsel. ~ 9 Wn. App. at 417. Similarly, in Mumby, the court rejected the argumentthatsimplyconsulting with an attorneyissufficienttoshowgood faith. Mumby, 97Wn. App. at394. Even though Wood’s attorney in Mumbysubmitted a declaration tothe courtsaying hewasfully informed, the court identified several keyfacts thatWood had not disclosed to her counsel. Id. In this case, Tom and Marie presented declarations from their attorneys, ChristopherWright and Kenneth Hart, who testified theywere provided “all ofthe information and the limited documentation they had available to them concerning the transferofcapital between the members ofthe LLC,” including the LLC’s 2014 tax return, the 2014 Order, and the LLC’s Operating Agreement. They concluded thattheycould not understandwhat had happenedwiththe LLC’s capital accounts. They retained a CPA expert, Gregory Porter, who consulted with them regarding capital accounting for LLCs and calculating “the magnitude of the loss to the Estate” when the capital account adjustment occurred. They advised Tom and Marie to bring the lawsuit. The record before this court, however, lacks any declaration from Tom or Marie detailing what information they shared with their attorneys before they brought this lawsuit. And Charles Farrington, probate counsel for the personal representatives, testified that he repeatedlyprovided extensive documentation and explanations to Tom and Marie’s attorneys to be transparent about what had occurred and why.

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-No. 78932-5-1/21 Val and Jim also presented evidence that Tom and Marie brought this lawsuit based on factual information known to them at the time ofthe 2014 trial, arguing that theyviolated the court’s order prohibiting them from suing Val orJim again. They also presented evidence thatTom and Marie had changed attorneys repeatedly and forum-shopped in an attemptto avoid the adverse consequences of the 2014 Order, despite knowing that they faced the risk that the in terrorem clause could be triggered. Farrington testified that every time Tom and Marie retain newcounsel, he had to educatetheir newattorneys regarding the historyof the litigation between the parties. Additionally, Val and Jim presented evidencethatthe languageofthe LLC’s Operating Agreement explicitly required them to make the capital account adjustment the Estate’s CPA recommended that they make. Paragraph 8.5.3 of the LLC Operating Agreement provided: Transfer of Capital Accounts. Except as otherwise required by law, ifany Membership Interest is transferred in accordancewith the terms ofthis Agreement, the transferee shall succeed to the Capital Accountofthetransferortothe extentthat it relatestothetransferred Membership Interest. The trial court concluded that this language was legally dispositive of any claim thatVal and Jim had made an improper assettransfer: 46. On lines2b and 6bofSchedule M-2, the post-trial 2014 Gillespie, LLC 1065 PartnershipTax Return reported that Gillespie, LLC made a capital adjustment in the amount of$2,492,188 thatyear. 47. Such amountwas simply a shift in the capital balance from one member(TR Estate) to another member (the Gillespie FamilyTrust). 48. No propertyormoneychanged hands as partofthat$2,492,188; it was simply a paper transfer to match the capital accounts with support documents that occurred on 6/26/1 4.

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50. These capital adjustments were due to a change in ownership in a previous yearthat was not recorded properly in the year ofthe transaction. FOE 55; COL 3; Exh. A to Thomas J. Gillespie declaration, §8.5 and 8.5.3 (LLC Oper. Agmt.). Val and Jim further presented evidence from Kenneth Pierce, the CPA who had prepared the LLC’s tax returns from 2014 to 2017. He confirmed that when he became aware ofthe Trust’s purchase ofa capital interest in the LLC, it became apparent to him that the transfer had not been properly reflected in the capital accounts of the LLC members. He explained how the purchase of another member’s ownership interestcan affectan LLC member’s capital account: “When
a buyer purchases an [LLC] ownership interestforcash, it generally results in the transfer ofthe seller’s capital accountto the buyer.” ButT.R. and Marianne failed to havethe LLCtax returns properly reflectthe capital accounttransferswhen they transferred their membership interestto the Trust in 2001. He stated: 13years afterthetransaction occurred, DefendantsValerie Gillespie and James Eeckhoudt properly corrected this omission via a capital adjustmentwhichthey made, and properly reflected such adjustment in the 2014tax return ofthe Gillespie LLC. The capital account adjustments made via the 2014 Gillespie LLC tax return did notaffectthevalue ofthe underlying assets ofthe LLC. Earrington also testified thatthe adjustment ofthe capital on the tax return did not affect the value ofthe Estate’s interest in the LLC, a value to which Tom and his attorney had agreed as early as 2011. Based on this record, we concludethetrial courtshould, inthefirst instance, determine whetherTom and Marie made a full and fair disclosure of all material facts to their counsel and brought this lawsuit on their advice. If the trial court

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determines that Tom and Marie have made this prima facie showing, they are entitled to a rebuttable presumption of good faith, and the trial court should then determine if Val and Jim have overcome this presumption with evidence of bad faith—for example, evidence of the intentional violation of a court order, dishonesty, improper or sinister motive, the failure to have a factual basis forthe asserted claims, orthe intentional withholding of material factual information from counsel.6 2. Res judicata Tom and Marie finally contend thatthetrial courterred in making extensive findings offact in the ordergranting summaryjudgment. Butthe court dismissed Tom and Marie’s claims based on the doctrine of res judicata. The standard of reviewofthe application ofresjudicata isde novo. Lynn v. Der’tofLabor& Indus., 130 Wn. App. 829, 834 n.7, 125 P.3d 202 (2005). Thus, any findings offact are superfluous and are disregarded on appeal. Reddinci v. Virginia Mason Med. Ctr., 75 Wn. App. 424, 426, 878 P.2d 483 (1994). Because our review is de novo, it is immaterialthatthetrial court“found”thatTom and Marie soughtto relitigate claims thatJudge Prochnau resolved in her2014 Order.7

6 The resolution of disputed facts as to Tom and Marie’s good faith does not require an evidentiary hearing and may be based on affidavits. Tom and Marie’s complaintwas brought under the Trust and Estate Dispute Resolution Act (TEDRA), chapter 11 .96A RCW. Under TEDRA, a court may resolve any and all disputed issues offactthrough affidavits; there is no requirementfor itto hold any evidentiary hearings. RCW 11.96A.100(7); Fosterv. Gilliam, 165 Wn. App. 33, 55, 268 P.3d 945 (2011) (underTEDRA, court need not hearoral testimonyto make findings).

~The only otherfindings offactthatTom and Marie challenge are paragraph 55, in which the courtfound that“Val and Jim have nottransferred anycapital,” and paragraph 75, in which the court found that “Val & Jim have incurred significant attorney’s fees and costs in defending” the claims in this suit. Butthey pointto no evidence to demonstrate thatVal and Jim did transfer any assets from the Estate to the Trust. And the finding in paragraph 75 was not a material issue of facton summaryjudgment.

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-No. 78932-5-1/24 Tom and Marie contend their claims are not barred by res judicata or collateral estoppel because they were based on actions Val and Jim took in correcting the LLC capital accounts after the entry of the 2014 Order. But this characterization oftheir claims is superficial and misstates the reliefthey actually sought here. Tom alleged in 2014 that T.R.’s 100 percent ownership interest in the LLC“is reflected inthe2011 tax return ofGillespie LLC, which showsthat[T.R.] retained his entire original capital account in the LLC until his death.” In other words, Tom relied on the value of T.R.’s LLC capital account as reflected in the LLC tax returns as proof of the value of T.R.’s membership interest in the LLC. Judge Prochnau explicitly rejected this claim:

58. Tom argues, alternatively, that TR’s estate should be allocated 100% ofthe proceedsfrom liquidation ofthe Gillespie LLC assets because

. . . the tax returns and K-is appearto indicate that the Gillespie LLC assets were still titled and in the control ofTR or his estate.

. 59. While the tax returns prepared at the direction ofTR are ofsome interest, theywere generally prepared by CPAs in the State of Hawaii who did not testify nor was it shown that they were conversant with TR’s estate planning or working with TR’s estate planning attorneys. The returns provide insufficient evidence to demonstrate that the court should (1) disregard the various entitles, (2) look behind the entities’ legal framework and attempt to unwind thevarioustransactions or(3) determinewhetherthevarious entities received theirappropriate share ofthe assets during TR’s lifetime. The only conclusion one can drawfrom the argumentTom advanced in 2014 and this finding offact is thatthe capital account reporting in the LLC tax returns were unreliable evidence ofthe Estate’s ownership interestinthe LLC. Judge Prochnau refused to creditthe Estate with more than a 10 percent ownership interest in the LLC because to do otherwise would be contraryto T.R.’s intent.

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-No. 78932-5-1/25 Despite these findings, Tom and Marie alleged in their2018 complaint: 2.7 Neither Washington law, nor any generally accepted account[ing] principal, norany provision ofthe Operating Agreement of Gillespie LLC required that each member’s percentage share of thetotal ofthe capital accounts ofall members ofthe LLC match the member’s percentage ownership ofthe units ofthe LLC, or prohibit a memberfrom owning a largerpercentage ofthe total ofthe capital accounts of all members than the member’s percentage ownership ofthe LLC.
2.11 While the capital account balances of the members of Gillespie LLC were known at the time oftrial to be disproportionate to each member’s ownership interest in the LLC, Judge Prochnau made no findings or conclusions regarding the capital account balance of the Estate and did not enter any judgment regarding adjustments or modifications to the existing capital accounts ofthe Estate and the Trust as reflected in the company’s records and contemporaneous taxfilings. Tom and Marie’s contention thatthe Estate’s 10 percent ownership interest
can exceed in value the Trust’s 90 percent ownership interest and should reflect the values attributed in the admittedly incorrect LLC taxfilings is an argumentthat could have been litigated in 2014. While they point to Val and Jim’s post-trial administrative activities in correcting the LLC tax returns as the basis for their claims, the claims are premised on legal and factual contentionsthatwere at issue in the 2014 trial. While Judge Prochnau did not explicitly rule that the Estate’s capital account balance had to reflect in value the membership percentage interest, Tom and Marie certainly could have asked forsuch a ruling. Res judicata bars not just the relitigation of claims or issues that were litigated, but also the litigation of claims or issues that “might have been litigated, in a prior action.” Loveridge v. Fred Meyer, Inc., 125 Wn.2d 759, 763, 887 P.2d 898 (1995). Forthe doctrine to apply, a priorjudgement must have concurrence

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of identity in (1) subject matter, (2) cause of action, (3) persons and parties, and (4) the quality ofthe persons fororagainstwhom the claim is made. 

# a There is a final and binding judgment between Tom and Marie, as beneficiaries, and Val and Jim, as personal representatives, ofthe Estate. The
causes of action in 2014 are identical to the causes of action here: a request for
an accounting by the personal representatives and breach offiduciary duty. The legal and factual issues on which the current claims are based are identical to the legal andfactual issuesthatwerethesubjectofthe2Ol4 litigation andwhich could have been fully litigated then. Thus, the trial courtdid not err in granting summary judgment based on resjudicata. 3. Attorneyfees on summary iudqment Finally, Tom and Marie challengethe July31, 2018 orderawarding attorney feestoVal and Jim.8 Although Tom and Marie assigned errortothe award offees, they did not briefthe issue. We thus decline to address this issue.

.~ Norcon Builders, LLC v. GMP Homes VG, LLC, 161 Wn. App. 474, 486, 254 P.3d 835 (2011) (appellate courtwill not consider inadequately briefed argument). 4. Attorneyfees on appeal Val and Jim request an award of attorney fees on appeal under RCW 11.96A.150. We refer this request for the trial court to decide on remand afterdetermining whetherTom and Marie broughtthis lawsuit in good faith.

8 Val and Jim sought and received an award of attorney fees and costs under RCW 1 1.96A.150which provides: (1) Eitherthe superiorcourtorany court on an appeal may, in its discretion, ordercosts, including attorneys’ fees, to be awarded to any party

. . that is the subject of the proceedings.

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-No. 78932-5-1/27 Affirmed in part, reversed in part, and remanded for further proceedings consistentwith this opinion.

WE CONCUR: 

# I

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