Court Opinion

ID: 2806387
Source: CourtListenerOpinion
Date Created: 2015-06-08 21:12:43.793127+00
Date Added: 2024-06-11T12:12:18.197623
License: Public Domain

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           IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

In the Matter of the Marriage of
GARY RICHARDSON,                                 No. 71831-2-1

       Respondent/Cross-Appellant,
                                                 DIVISION ONE
                and

LILY FU,                                          UNPUBLISHED OPINION

      Appellant/Cross-Respondent.                 FILED: June 8, 2015

       Lau, J. —A trial court in a marital dissolution action has authority to enforce a

valid CR 2A agreement in response to a spouse's efforts to evade her obligation to

transfer real property by placing title in the name of an alter ego that she controls. We

conclude the trial court here erred when it misapprehended its authority and declined to

rule on whether the trust and family partnership are alter egos of Lily Fu and her appeal

lacks merit. Accordingly, we remand to the trial court to enter written findings of fact

and conclusions of law resolving the alter ego question in this post dissolution

enforcement proceeding and to quiet title to the Lake Ketchum and Colby parcels in

favor of Gary Richardson if properly supported by findings of fact and conclusions of
71831-2-1/2

law. We reserve to the trial court any remaining issues for determination. We award

Richardson $13,000 in attorney fees on appeal based on Fu's continuing

intransigence.1 The fees shall be paid no later than 60 days from the opinion filing date.

       The facts of this protracted litigation over the enforcement of the parties' marital

dissolution CR 2A agreement are well known to the parties.2 This appeal involves Gary

Richardson's latest effort to enforce the terms of this agreement requiring Lily Fu to

convey to him, as his separate property, marketable title to two parcels of real

property—the Lake Ketchum property and the Colby property.

       Following a two-day evidentiary hearing over the implementation of the

agreement, the trial court entered 18 findings of fact and 4 conclusions of law. Related

to the main issue on appeal, the court made the following conclusion of law involving

the two parcels:

       The Motion to Implement should not be granted at this time because there
       may be additional parties who have an interest in said parcels and who
       are not before the court in this action. Consequently, the actual transfer of
       title sought in the Motion to Implement should be denied without prejudice.

Clerks Papers (CP) at 42.

      1 Richardson also sought an award of fees under RAP 18.9 claiming Fu's
assertions are frivolous. While her assertions border on the frivolous, we decline to
award fees under this rule.
      2 The parties' final decree of dissolution incorporated the CR 2A agreement.
71831-2-1/3

       Fu's Appeal3

       Fu assigns error to the March 19, 2014 and May 9, 2014 findings of fact and

conclusions of law implementing the CR 2A agreement and the related March 19, 2014

and May 9, 2014 judgment summary orders. She challenges findings of fact 13, 14, 15,

16, and 18 and conclusions of law 1,2,3, and 4. She also challenges the trial court's

ruling "setting this matter for trial." Br. of Appellant at 3. Despite these numerous

assignments of error, Fu never specifically argues, analyzes, or cites controlling legal

authority to support her assignments of error. A party's failure to support assignments of

error with argument or citation to authority precludes appellate review. RAP 10.3;

Cowiche Canyon Conservancy v. Boslev, 118 Wash. 2d 801, 809, 828 P.2d 549 (1992).

Instead, her arguments are focused solely on whether the trial court erred by denying

Richardson's motion to implement without prejudice: "The sole relief sought by Ms[.]

Fu's appeal is that Mr. Richardson's motion to implement be denied with prejudice in so

far as it sought transfers of real property from entities not before the court." Reply Br. of

Appellant at 4. "This appeal raises a narrow issue of whether the court[']s ruling to

dismiss without prejudice instead of with prejudice was proper." Reply Br. of Appellant

at 5. Furthermore, Fu's arguments are mainly about the "interested parties" issue.

       We review findings of fact for substantial evidence. Robblee v. Robblee, 68 Wn.

App. 69, 841 P.2d 1289 (1992). Fu never addresses why the findings of fact are not

       3 It is questionable whether Fu's claims are appealable for two reasons: first, the
trial court never ruled on the merits i.e., whether the trust and family partnership are
alter egos of Fu. Second, even if conclusion of law 2 is deemed a final ruling on the
merits, Fu is arguably not aggrieved because the court declined to enforce the
agreement in favor of Richardson. According to the trial court, other nonparties may
have an interest in the parcels.
                                           -3-
71831-2-1/4

supported by substantial evidence.4 Thus the findings are verities on appeal. In re

Estate of Palmer, 145 Wash. App. 249, 265, 187 P.3d 758 (2008).

      As to the without prejudice versus with prejudice issue, we conclude the court's

without prejudice decision was proper. It is obvious from the record that the trial court

contemplated the real possibility of further proceedings in this matter.

       Furthermore, given our resolution of Richardson's cross-appeal, discussed

below, the without prejudice decision was proper.

       Richardson's Cross-Appeal

       Richardson contends the trial court abused its discretion by failing to rule on the

alter ego claim. Richardson is correct. The court misapprehended its authority to

resolve the central issue squarely presented by Richardson. There is no doubt from

conclusion of law 2, quoted above, that the court declined to enforce the agreement

related to the two parcels because it erroneously concluded that it lacked authority

when nonparties may have an interest in the parcels. When justice requires, a court

may disregard an alter ego entity of a party to a marital dissolution in order to enforce

the decree. W.G. Platts, Inc.. v. Platts. 49 Wn.2d. 203, 207-09, 298 P.2d 1107 (1956).

Here, the trial court erred when it declined to rule in this action on the question of

whether the trust and family partnership are Fu's alter egos warranting the court, in the

interest of justice, to disregard these entities and quiet title in favor of Richardson. It is
fundamentally unfair to permit Fu to purposefully evade valid court orders (as this record

       4"[An] appellant must present argument to the courtwhy specific findings offact
are not supported by the evidence and must cite to the record to support that
argument." Inland Foundry Co., Inc., v. Dep't of Labor &Indus., 106 Wash. App. 333, 340,
24P.3d424(2001).
71831-2-1/5

demonstrates) to avoid an agreement she knowingly and intelligently entered into with

assistance of counsel.

       Judge Okrent aptly described Fu's litigation tactics in his oral ruling referring the

matter to an evidentiary hearing:

              It's also clear that Ms. Fu is a very sophisticated real estate
       investor, and that at the time she was deposed and at the time she signed
       the CR 2(a) agreement. It's clear to me that she knew exactly what she
       was doing when she basically decided that she was not going to pay her
       ex-husband a dime and was not going to convey [the Lake Ketchum and
       Colby properties]....
              I'm left with the situation of why we are spending all of this money
       in order to enforce a CR 2(a) agreement? We're spending it because Ms.
       Fu is intransigent. She will not convey the properties. She conveyed the
       properties from Lily Fu Living Trust to her limited partnership on March 15,
       2013 after Commissioner Bedle ordered the February 26th order to sign
       the quitclaim deeds. She's not going to do it. She transferred other
       properties four days before the decision on March 19, 2013....I think she
       knows full well what she was doing. She's not going to pay. She's going
       to set up a situation with irrevocable trusts and limited partnerships
       providing a barrier, a tactical barrier to prolong this until Mr. Richardson
       just goes away.

              I find that Ms. Fu is intransigent and I award $10,000 attorney fees
       to Mr. Richardson payable in 90 days.

CP at 267-68.

       We remand to the trial court for entry of findings of fact and conclusions of law as

to whether the trust and family partnerships are Fu's alter egos and thus justify, or not,

an order quieting title to the two parcels in favor of Richardson.5

       5 Richardson also asks that we:
       "direct the trial court to order that the assets of Ms. Fu's trust and
       partnership are available for satisfaction of her other obligations under the
       decree, including not only the money judgments but also her obligation to
       remove her personal line of credit as an encumbrance to the Lake
        Ketchum property awarded to Mr. Richardson."
Br. of Cross-Appellant at 21-22.
71831-2-1/6

      Attorney Fees

       Richardson requests attorney fees for the expense of responding to Fu's

continuing intransigence below and on appeal. RAP 18.1. Intransigence is a basis for

awarding fees on appeal. Mattson v. Mattson, 95 Wash. App. 592, 606, 976 P.2d 157

(1999). Furthermore, a party's intransigence at the trial court can support an award of

attorney fees in the appellate court. Mattson, 95 Wn. App at 606. An appellate court

need not consider the financial resources of the party when awarding fees for

intransigence. Mattson, 95 Wn. App at 606.

       Fu does not seriously dispute that trial courts have previously awarded, at least 3

times, significant attorney fees against her based on her intransigence over the last 3

years of litigation. We are troubled by Fu's flagrant disregard of court orders directing

her to convey the two parcels she agreed to give up in the CR 2A agreement. Even

more troubling is Fu's lack of candor to the court about the true ownership of the real

properties at issue. Fu's history of intransigence,6 intentional delay, and gamesmanship

to avoid compliance is well documented. The court has also previously found Fu in

contempt of court in connection with a court order requiring her to execute quitclaim

deeds to the two parcels. Fu's questionable litigation tactics have forced Richardson to

expend considerable time and attorney fees to enforce the CR 2A agreement. In the

words of the trial court, "Why [are we] spending all of this money in order to enforce the

CR 2(a) agreement? We're spending it because Ms. Fu is intransigent. She will not

While we acknowledge Richardson's justified frustration with Fu's history of
noncompliance, we decline to grant such an order. The trial court should address these
issues on remand.
       6 As quoted above, Judge Okrent found Fu intransigent for refusing to convey
clear title to Richardson.
71831-2-1/7

convey the properties." CP at 267. The record here amply demonstrates continuing

intransigence and obstruction by Fu. We award attorney fees to Richardson incurred on

appeal in the amount of $13,000 against Fu. Fu shall pay the fees no later than 60 days

from the opinion filing date.

                                           Conclusion7

       We remand to the trial court 1) to enter findings of fact and conclusions of law on

whether the trust and family partnership are alter egos of Fu, and 2) if properly

supported by the findings of fact and conclusions of law, to order that title to the two

parcels at issue be quieted in favor of Richardson. We also award attorney fees in favor

of Richardson in the amount of $13,000 based on Fu's continuing intransigence and

RAP 18.1, payable no later than 60 days from the opinion filing date. Finally, the trial

court retains full authority to impose additional fees if Fu's intransigence continues.8

WE CONCUR:

       7 Fu also challenges the CR 2A agreement's validity. This challenge is untimely
and lacks merit. She failed to appeal orders affirming the agreement's validity. Fu also
contends the CR 2A agreement was vacated. Fu misunderstands Commissioner
Bedle's order. He reopened the decree, not the CR 2A agreement.
       8 In addition, the trial court may exercise its contempt powers to compel Fu's
compliance with its orders.
                                           -7-