Court Opinion

ID: 4108750
Source: CourtListenerOpinion
Date Created: 2016-12-19 22:22:49.183651+00
Date Added: 2024-06-11T09:21:06.539300
License: Public Domain

r*. *> i   f   f> '~ -•-*   '
                                                     J -=I *- I - . j            I
                                                     L. 'J I w      u* w >->     1

      IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

In the Matter of the
General Receivership of                           DIVISION ONE

                                                   No. 73742-2-1
JACOB G. BUTTNICK,
David DeLaittre, as Personal
Representative of the Estate of                    UNPUBLISHED OPINION
Jacob G. Buttnick, deceased,

                       Appellant.

                                                   FILED: December 19, 2016

       Dwyer, J. —Today we are called upon to answer whether, when a
property owner periodically resides in his commercial building, the owner must
establish that the building is his principal place of residence in order to qualify for
a homestead exemption. The answer is yes.

       This case comes to us after an evidentiary hearing in superior court, at

which the validity of Jacob Buttnick's homestead claim was contested. The
superior court judge entered extensive findings of fact. We have reviewed the
record and each factual finding is supported by substantial evidence.
        The facts ofthis case, as found by the superior court judge, are as follows:
               1)      Plaintiffs Lance Miyatovich and Jolan, Inc. (hereinafter
        "Jolan Creditors") are creditors of the assignor in this cause of
No. 73742-2-1/2

      action, Jacob Buttnick. Mr. Buttnick owned the J&M building, which
      is the real property at issue in this dispute.
              2)     On August 2, 2012, the Jolan Creditors and Mr.
      Buttnick entered into a CR 2A settlement agreement to resolve
      pending claims the creditors asserted against him. In the settlement
      agreement, Mr. Buttnick admitted liability on all claims. The
      settlement required Mr. Buttnick to: (1) allow the Jolan Creditors
      immediately enter judgment against him for $510,000, (2) satisfy
      the $510,000 judgment no later than August 2, 2013, and (3) pay
      the Jolan Creditors $3,000 each month until he satisfied the terms
      of the settlement agreement.
              3)      In section 1(b) of the settlement agreement, Mr.
      Buttnick represented "that he has sufficient interest in the J&M
      building to fully fund this settlement agreement, and he agrees he
      will not encumber the building in an attempt to avoid funding this
      settlement agreement."
             4)     In section 1(g) of the settlement agreement, Mr.
      Buttnick represented the Creditors "shall be entitled to enter and
      impose a lien, lispendens [sic], and whatever other mechanism they
      deem necessary and appropriate to secure and protect their rights
      under this agreement, including an interest in the J&M building, and
      Buttnick agrees to cooperate in the execution of any such lien,
       lispendens [sic], or other mechanisms."
           5)     On August 8, 2012, the Court entered a $510,000
      judgment against Mr. Buttnick on behalf of the Jolan Creditors,
      which was recorded on August 24, 2012. Mr. Buttnick failed to
      satisfy the other terms of the settlement agreement.
              6)     On June 20, 2013, the day before a scheduled
       foreclosure sale of the J&M building, and shortly before the
       deadline to fulfill his settlement obligations to the Jolan Creditors,
       Mr. Buttnick filed for receivership.
              7)     In his receivership filing, Mr. Buttnick assigned all of
       his assets to a receiver, including the J&M building, and authorized
       the receiver to market, sell, and otherwise liquidate all of his assets.
       In the schedules attached to his sworn assignment, Mr. Buttnick did
       not list any exemptions, including a homestead exemption.
               8)     The receiver eventually filed a motion to approve sale
       of the J&M building. Afterward, on November 19, 2013, Mr. Buttnick
       recorded a declaration of homestead in the J&M property and
       asserted he was living there. The declaration contained all ofthe
       elements required by RCW 6.13 .040(5), except that it was not
       notarized. The next day, November 20, 2013, Mr. Buttnick filed for
       Chapter 11 bankruptcy. In his bankruptcy filing, Mr. Buttnick also
       listed a homestead exemption on the property.
No. 73742-2-1/3

             9)     This was the first indication the Jolan Creditors had
      that Mr. Buttnick asserted he lived in the J&M building and claimed
      a homestead exemption.
             10) Approximately four months later, on March 25, 2014,
      the bankruptcy court lifted its automatic stay imposed upon filing so
      the Jolan Creditors could obtain a supplemental judgment against
      Mr. Buttnick pursuant to the terms of the settlement agreement and
      judgment entered in 2012.
            11) Approximately two weeks later, the bankruptcy court
      ordered the trustee to abandon the J&M building to allow creditors
      with a security interest in the property to enforce their state law
      rights. The bankruptcy court also dismissed the Chapter 11
      proceeding.
            12) On April 17, 2014, the Jolan Creditors obtained a
      supplemental judgment against Mr. Buttnick in the amount of
      $818,789.73, which, in combination with the initial judgment,
      amounts to a total judgment of $1,328,789.73 the Jolan Creditors
      hold against Mr. Buttnick. He has not fully satisfied this judgment.
      When asked at trial if he would waive his homestead claim
      pursuant to section 1(g) ofthe settlement agreement to secure the
      creditors' rights under the agreement, Mr. Buttnick declined.
             13) After the bankruptcy proceeding was dismissed, Mr.
      Buttnick's creditors renewed their efforts to foreclose on the J&M
      building, and one secured creditor commenced an action to appoint
      a custodial receiver over the property. On May 23, 2014, however,
      Mr. Buttnick executed an assignment for the benefit of creditors in
      favor of Resource Transition Consultants, LLC ("RTC"). Under the
      terms of the assignment, Mr. Buttnick assigned scheduled assets
      (the "Estate") and authorized RTC to "take possession ofand
      administer the Estate and shall liquidate the Estate." In the
      schedules attached to his sworn assignment the J&M building was
       listed as "Nonexempt Property".
              14) Pursuantto the Assignment of Creditors, on June 2,
       2014, RTC petitioned for and was appointed as general receiver to
       take charge over all of Mr. Buttnick's assets, with the power to sell
       the Estate property free and clear of liens.
                15)   The receiver testified that RTC learned of the
       Declaration of Homestead Mr. Buttnick had recorded in November
       2013 when it conducted a title search on the J&M property. To be
       prudent, RTC got a sworn declaration from Mr. Buttnick in which he
       approved RTC's sale ofthe J&M property and again asserted that
       the J&M property "has continuously been my residence since
       2007."
                16)   The Jolan Creditors timely objected to Mr. Buttnick's
       claim of homestead. Consequently, the Court entered an order
       requiring the receiver to reserve $125,000 from any property sale

                                         -3
No. 73742-2-1/4

      proceeds until the disputed homestead claim could be resolved.
      The property now has been sold and the receiver has retained
      proceeds for these purposes.
             17)    Jolan Creditors challenge Mr. Buttnick's homestead
      claim on three bases: (1) that it is false, intended to defraud his
      creditors and not made in good faith; (2) that they relied to their
      detriment on promises Mr. Buttnick made to them in their
      settlement agreement that conflict with his homestead claim in the
      property, so he should be equitably estopped from asserting a
      homestead claim; and (3) that Mr. Buttnick has taken conflicting
      positions on the property in different judicial proceedings that have
      served to mislead both the creditors and the courts and, if an
      exemption is permitted, it would allow Mr. Buttnick to obtain an
      unfair advantage. Consequently, the Jolan Creditors argue, judicial
      estoppel bars his homestead claim. Jolan Creditors also renew
      their motion denied at the hearing to allow amendment of the
      petition to add a claim for specific performance, requiring Mr.
      Buttnick to waive his homestead claim pursuant to section 1(g) of
      their settlement agreement.
             18)     Mr. Buttnick asserts that his homestead claim is valid
      and enforceable.
             19)     Mr. Buttnick stated in both his recorded homestead
      declaration and the declaration he provided to the RTC receiver
      that he has resided at the J&M building since 2007, but the record
      establishes otherwise. First, he had a primary residence in the
      Seward Park neighborhood of Seattle that he lost to foreclosure in
      late 2010. Mr. Buttnick testified at the hearing that he misstated the
      date in his written declarations and he meant to state that the
      J&M building has been his primary residence since the 2010
      foreclosure.
             20) Witnesses testified in support of Mr. Buttnick's claim
      that they had been to his room at the J&M building on and off
      between 2010 and 2014, which contained a mattress on the floor,
      clothing, and some personal effects. Most visits occurred during the
      day time, primarily during a period when Mr. Buttnick was ill and
      eventually hospitalized, and again shortly before the building was
      sold in 2014 and all personal items had to be removed. An architect
      testified that when she toured the building, she suspected Mr.
      Buttnick stored personal items in the basement.
             21) Others testified they never saw evidence Mr. Buttnick
       resided on the property, although he frequently could be found in
       one of the businesses on the ground floor. All witnesses, including
       those who testified in Mr. Buttnick's behalf, testified that the two
       upper floors of the building, where Mr. Buttnick's room was located,
       were unfit for human habitation. The building was constructed as a
       hotel in the 1800s, but the upper two floors have not been permitted

                                          4-
No. 73742-2-1/5

      for residential use since 1972. The J&M is a commercial building. A
      restaurant and a bar operate on the street level; the upper two
      floors have no electricity, heat, or running water. There is a
      substantial amount of trash in the upper floors, which smells bad
      and has attracted rats, insects, and birds. Sections of the flooring
      and structure are rotted and unsafe.
            22) In support of the exemption, Mr. Buttnick offered
      photographs into evidence that show a bed, clothing, and some
      personal effects in a small room. But the photographs also confirm
      that the room was in serious disrepair, far from meeting housing
      code requirements for occupancy. Mr. Buttnick testified that he
      jerry-rigged electrical wiring from downstairs for electricity, and that
      during his residency he used the bathroom in the restaurant and
      bathed at a shelter or the YMCA in the vicinity.
             23) Other evidence contradicts Mr. Buttnick's homestead
      claim. In response to discovery requests in September 2010, Mr.
      Buttnick did not list himself when asked to identify all occupants of
      the building. In his February 2011 deposition, Mr. Buttnick stated
      under oath that he was living with a friend in the north end of
      Seattle. In March 2014, while showing the building to an inspector
      for the Seattle Department of Planning and Development, Mr.
      Buttnick told the Inspector he did not reside in the J&M building. Mr.
      Buttnick also testified that he lived on and offwith several friends
      from 2010-2014, and that he purposely concealed his residency as
      he did not want others to know he stayed at the J&M.

       The superior court also entered several pertinent conclusions of law:
              3.     Under Washington law, a homestead is protected in
       one of two ways: (1) by occupying the property as a person's
       principal residence, or (2) if not yet occupied, by executing a
       declaration of homestead as required by statute and recording it in
       the county where the property is located. RCW 6.13.040(1). Here,
       Mr. Buttnick purports to have used both procedures to assert his
       homestead exemption.
              4.     Mr. Buttnick recorded a declaration of homestead in
       the J&M property in King County on November 19, 2013. The
       Washington Supreme Court has held that a homestead declaration
              is merely an act of the ownerwhereby he avails
              himself of, and secures, a right or privilege given to
              him by statute. The privilege thus sought and
              obtained is wholly a creature of, and its validity
              depends upon, a compliance with the statute that
              permits the homestead to come into existence.
       U.S. Fidelity &Guaranty Co. v. Alloway, 173 Wash. 404, 406, 23
       P.2d 408 (1933). In Alloway, the declaration was not notarized as
No. 73742-2-1/6

      required by law. The statute as it existed in the 1930s and today
      requires that a declaration of homestead "be acknowledged in the
      same manner as a grant of real property is acknowledged." RCW
      6.13.040(5). Accordingly, the Alloway Court determined the
      declaration never properly came into existence and it did not
      operate to establish the claimant's homestead. Id. at 407. The
      same is true here. Although the homestead declaration recorded by
      Mr. Buttnick contained most of the elements required by statute, it
      was not notarized. Consequently, as in Alloway, the homestead
      declaration is deficient and it did not operate to establish Mr.
      Buttnick's homestead in the J&M building.
             5.    Mr. Buttnick also asserts he resided in the J&M
      building as his primary residence at the same time he recorded his
      homestead declaration. As noted above, if a person is actually
      residing in a principal residence, he is not required to record a
      declaration to claim the homestead. Nonetheless, Mr. Buttnick did
      so and the Court must determine if the Jolan Creditors have
      established that his claim of residency is invalid under the law.
             6.      It is well-established that "homestead laws are not
      founded on principles of equity," but reflect a public policy to shelter
      a family home from financial misfortune and to encourage home
      ownership. Clark v. Daws, 37 Wn.2d 850, 852, 226 P.2d 904 (1951)
      (internal citations omitted). They are not intended to enable a
      person to simply escape liabilities orto perpetrate a fraud or
       injustice on others. Id. If a claimant intends to both avoid creditors
       and to make the property his home, the exemption is valid. Id. at
       853. But if the claimant lacks a good faith intent to make the
       property his primary residence-a home- the exemption is not
       valid. Id at 852-55 (see also cases cited therein).
               7.     Here, it is established that Mr. Buttnick lived on and
       off in the J&M building, but the evidence also establishes that he
       never intended to make the J&M his primary residence. The
       evidence supports the conclusion that Mr. Buttnick "crashed" at the
       J&M when he had no other options. The building was not approved
       by applicable codes or fit to be a residence. Despite purporting to
       live there since 2010, Mr. Buttnick took no steps to make the small
       room in which he stayed more habitable. It contained a mattress on
       the floor, some clothing, and trash. Even if Mr. Buttnick did not have
       the funds to renovate the building, if he intended to make it his
       home, some effort would have been made over time to clear debris
       and rodents. As Mr. Buttnick testified, he deliberately denied that
       he stayed in the building, concealing this information from friends,
       creditors, and authorities. Although he lost his Seward Park home
       in 2010, Mr. Buttnick first made the homestead claim in 2013, more
       than a year after judgment was entered against him and while he
       was actively attempting to maximize his return from the sale of the
No. 73742-2-1/7

       property. Mr. Buttnick's motivation is understandable. He no doubt
       found himself in dire straits that required him to stay at the property
       when he had no alternative, but this unfortunate situation does not
       support a finding that Mr. Buttnick held an honest intent to occupy
       the J&M building as his home. No evidence, other than Mr.
       Buttnick's assertions and sparse furnishings, supports such a
       finding.
                 8.    Jolan Creditors also assert that Mr. Buttnick's
       homestead claim should be set aside on the bases of equitable and
       judicial estoppel. Having found that the exemption is invalid under
       the statute, the Court does not reach the arguments grounded in
       equity.

       The superior court then ordered that Buttnick's homestead exemption was

invalid. It further ordered the receiver to distribute the funds in its possession to

the creditors.

       Buttnick appeals from this ruling.1

                                              II

                                              A

       The homestead exemption statutes were enacted for the purpose of

providing a shelter for the family and an exemption for a home. Bank of
Anacortes v. Cook, 10 Wn App. 391, 395, 517 P.2d 633 (1974). Two statutes,

RCW 6.13.010 and RCW 6.13.040, determine what constitutes and how to

establish a homestead. RCW 6.13.010(1) defines a homestead for purposes of

exemptions:

       The homestead consists of real or personal property that the owner
       uses as a residence. In the case of a dwelling house or mobile
       home, the homestead consists of the dwelling house or the mobile
       home in which the owner resides or intends to reside, with
       appurtenant buildings, and the land on which the same are situated
       and by which the same are surrounded, or improved or unimproved

        1 During the pendency ofthis appeal, Jacob Buttnick died. We grant the motion to
substitute the personal representative of his estate as a party to this action.
No. 73742-2-1/8

      land owned with the intention of placing a house or mobile home
      thereon and residing thereon. A mobile home may be exempted
      under this chapter whether or not it is permanently affixed to the
      underlying land and whether or not the mobile home is placed upon
      a lot owned by the mobile home owner. Property included in the
      homestead must be actually intended or used as the principal home
      for the owner.

      RCW 6.13.040 both allows for an automatic homestead and sets forth

when a homestead declaration is required:

      (1) Property described in RCW 6.13.010 constitutes a homestead
      and is automatically protected by the exemption described in RCW
      6.13.070 from and after the time the real or personal property is
      occupied as a principal residence by the owner or, if the homestead
      is unimproved or improved land that is not yet occupied as a
      homestead, from and after the declaration or declarations required
      by the following subsections are filed for record or, if the homestead
      is a mobile home not yet occupied as a homestead and located on
      land not owned by the owner of the mobile home, from and after
      delivery of a declaration as prescribed in RCW 6.15.060(3)(c) or, if
      the homestead is any other personal property, from and after the
      delivery ofa declaration as prescribed in RCW 6.15.060(3)(d).
            (2) An owner who selects a homestead from unimproved or
      improved land that is not yet occupied as a homestead must
      execute a declaration of homestead and file the same for record in
      the office of the recording officer in the county in which the land is
       located. However, if the owner also owns another parcel of property
       on which the owner presently resides or in which the owner claims
       a homestead, the owner must also execute a declaration of
       abandonment of homestead on that other property and file the
       same for record with the recording officer in the county in which the
       land is located.

       Thus, "[i]f property that satisfies the basic description of a homestead is
actually occupied by the owner as a principal residence, it is automatically
protected as a homestead." 28 Marjorie Dick Rombauer, Washington
Practice: Creditors' Remedies—Debtors' Relief § 7.24 (2016). However, the
owner is required to file a declaration of homestead when: (1) the owner does not

                                          8
No. 73742-2-1/9

yet occupy the unimproved or improved land as a homestead, (2) the homestead

is a mobile home not yet occupied as a homestead and located on land not

owned by the owner of the mobile home, or (3) the homestead is any other

personal property. RCW 6.13.040.

       When the homestead is developed and occupied as the principal

residence, the nature of the homestead is directly evident by the owner's

occupancy and no declaration is required. Conversely, a declaration of
homestead is required when the homestead is undeveloped, in the process of
redevelopment, or a mobile home because the owner's intent to make the land or
property a homestead is not directly evident.
                                         B

        The trial court ruled that Buttnick's homestead exemption was invalid

because he did not live at the J&M building as his primary residence. The trial
court based this ruling on a number of facts that it found to be true—that Buttnick
stayed overnight at the J&M building only periodically, that he denied actually
living there on numerous occasions, and that he never acted so as to manifest an
intent to make the J&M building his primary home. On appeal, Buttnick takes
issue with the court's ruling, asserting that the court erroneously required him to
prove "both actual residence and intent to reside." Br. of Appellant at 6. This,
 Buttnick contends, wrongly required him to prove that he "intend[ed] to reside
there forever." Br. of Appellant at 7. Buttnick's argument misconstrues the trial
 court's ruling.
No. 73742-2-1/10

      Buttnick repeatedly asserts that his living in the building from time to time

is sufficient to qualify for the homestead exemption, notwithstanding that he

admits that his residence on the property was "suspect and spotty." Br. of

Appellant at 12. However, because Buttnick claims to have resided at the J&M
building, the plain language of RCW 6.13.010 mandates that the applicable
standard is whether the property in question is the principal home of the property

owner. Therefore, Buttnick's intent was relevant in determining whether Buttnick

actually made the J&M building his primary home. This was the standard applied
by the trial court. The trial court did not misinterpret or misapply the
requirements of RCW 6.13.010.

                                           C

       Buttnick next asserts that, because the trial court found that he sometimes

lived atthe property, the trial court erred by refusing to validate his homestead
exemption. Buttnick's contention is without merit.
        "The trial court's credibility determination and its resolution of the truth
from conflicting evidence will not be disturbed on appeal." Frank Coluccio
Constr. Co. v. King County, 136Wn. App. 751, 770, 150 P.3d 1147 (2007).
Because the trial court has observed the witnesses and weighed the evidence,
we review "factual matters to determine whether the trial court's factual findings
 are supported by substantial evidence, and, if so, whether the findings support
 the conclusions of law and judgment." Frank Coluccio Constr. Co., 136 Wn. App.
 at 761. The party claiming error has the burden of showing that substantial

                                           10
No. 73742-2-1/11

evidence does not support a finding of fact. Frank Coluccio Constr. Co.. 136 Wn.

App. at 761.

       Buttnick's assertion that the trial court refused to allow him the homestead

exemption in the proceeds ofthe sale of the property afterfinding that he resided
in the building, is an incorrect restatement ofthe trial court's finding and ruling. In
fact, the trial court acknowledged that Buttnick from time to time lived at the

property but further found that he had never made the J&M building his principal
residence, as required by RCW 6.13.010.

       Substantial evidence supports the trial court's findings offact. The trial

court heard from a variety ofwitnesses, reviewed a number ofexhibits, and
made reasonable factual findings and legal conclusions pursuant to the
applicable statute and the evidence presented at the hearing. The trial court was
persuaded by substantial evidence that, although Buttnick may have lived at the
J&M building from time to time, the J&M building was never Buttnick's primary
residence.

       In addition to being faithful to the language of the statute, the trial court's
ruling was also faithful to the purpose of the statute. As was stated nearly a
century ago, the applicable statute

        provides that the premises included in the homestead must be
        actually intended and used as a home for the claimant. The facts
        to which we have referred, in the light of the details gathered from
        careful examination of the record, convince us that appellant never
        intended in good faith to occupy the land as a home for himself and
        his son. His pretended residence was merely colorable, and the
        filing of the declaration of homestead was not for the purpose of
        establishing and maintaining a home, but was solely for the
        purpose of defeating his creditors.

                                         -11
No. 73742-2-1/12

           The idea of home is the very foundation rock upon which all
      homestead laws are based, and unless it is the honest intention of
      the declarant to actually occupy the premises as a home, he is not
      within the protection of the statute. We are not unmindful of the
      rule that statutes of this character are not in derogation of the
      common law, but are to be liberally construed to the end that the
      wise and benevolent policy which prompted their enactment may
      be carried into effect. At the same time, it is equally the duty of the
      courts not to permit these humane laws to be prostituted and
      perverted to the purpose of enabling an unscrupulous debtor to
      avoid the payment of his honest obligations by resorting to their
      provisions as a mere subterfuge with no honest intention or
      purpose of occupying the land as a home.

Schoenheider v. Tuenqel. 96 Wash. 103, 106-07, 164 P. 748 (1917).

      Whether Buttnick resided at the J&M building and whether he did

so with the intent that it be his primary residence were proper questions

for the superior court to resolve. It did so correctly, based on the evidence
before it and the applicable law.

                                         D

       Buttnick next asserts that his declaration of homestead sufficiently

supported the exemption claim. We disagree.
       In order to be valid, a declaration of homestead must be in compliance

with the statute. RCW 6.13.040(5); U.S. Fid. &Guar. Co. v. Alloway. 173 Wash.
404, 406-07, 23 P.2d 408 (1933). The failure to properly notarize a declaration of
homestead renders the declaration invalid. Alloway, 173 Wash, at 407.
       Buttnick's recorded declaration of homestead fails because it was not

 properly notarized. The trial court correctly concluded that because the recorded

                                          12-
No. 73742-2-1/13

homestead declaration was not notarized, it was deficient and did not operate to

establish Buttnick's homestead.

                                          E

       Buttnick's obvious bad faith in asserting the homestead exemption claim

also supports affirmance ofthe superior court's orders. "The homestead
exemption statute cannot be used as an instrument of fraud and imposition"—the
exemption "must be filed 'in good faith.'" Webster v. Rodrick. 64 Wn.2d 814,
816-18, 394 P.2d 689 (1964) (citing Barouh v. Israel, 46 Wn.2d 327, 331-32, 281
P.2d 238 (1955) ("No citation of authority is necessary for the rule that a
declaration must be filed in good faith.")).

       Our courts have never permitted a judgment debtor to use the exemption
"as a sword to protect a theft." Webster, 64 Wn.2d at 816. If a property owner's
illicit conduct can be traced back to the property claimed as a homestead, the
owner's bad faith negates the homestead exemption. Webster, 64 Wn.2d at 818-
19 (holding that an employee who embezzled funds, for the benefit of the marital
home, from her employer could not execute a homestead exemption because the
employee's illicit conduct could be traced to the property subject to the
 homestead exemption).

        Buttnick's illicit conduct is traceable to the J&M building and such conduct
 invalidates his claim for a homestead exemption. On the eve of the sale that
 would have satisfied the Jolan Creditors' judgment against Buttnick, Buttnick
 asserted that the J&M building was his residence. Buttnick later admitted that he
 filed for the receivership and bankruptcy to frustrate the sale of the J&M building.

                                              13
No. 73742-2-1/14

Further, Buttnick admitted that he intentionally concealed his claim that he was

living in the J&M building from the Jolan Creditors because they were his

"enemy" and needed to "suffer" for their "mistakes." Priorto these assertions and

filings, Buttnick did not identify himself as an occupant of the building in

deposition or written discovery requests. In fact, he specifically agreed not to
encumber the property and, at the evidentiary hearing, defiantly refused to act in
accord with the agreement he had made. The Jolan Creditors plausibly assert

thatthey reasonably relied on Buttnick's written representation that he had a
sufficient financial interest in the building, would sell the building to satisfy the

2012 judgment, and would not encumber the building to avoid paying the amount
due. For his part, Buttnick dishonestly maneuvered to avoid paying the Jolan
Creditors. Thus, any claim by Buttnick to a homestead exemption in the J&M
building is invalid due to Buttnick's lack of good faith.2
                                               Ill

        The Jolan Creditors assert that they should be awarded reasonable

attorney fees and costs associated with this appeal based on the provisions in
two contracts. We agree.

        Generally, attorney fees "may be awarded only when authorized by a
private agreement, statute, or a recognized ground of equity." Marine Enters.,
 Inc. v. Sec. Pac. Trading Corp., 50 Wn. App. 768, 771, 750 P.2d 1290 (1988). If

        2The Jolan Creditors also assert that Buttnick's homestead exemption claim should be
 set aside due to equitable and judicial estoppel. We need not reach these arguments.

                                             -14-
No. 73742-2-1/15

contractual authority is the basis for an award of attorney fees at trial, that basis

remains applicable on appeal. Marine Enters., 50 Wn. App. at 774.

        Here, both the underlying lease for the J&M Cafe3 and the parties' 2012

settlement agreement4 provide a basis for the Jolan Creditors' claim for an award

of attorney fees. Upon proper application, a commissioner of our court will make

an appropriate award.

        Affirmed.

                                                                             A   »
                                                                    •^f

We concur:

         3 The lease agreement provides:
                  27.      Costs and Attorneys' Fees. In the event of litigation, arbitration,
         or other dispute resolution proceedings relating to this Lease orthe relationship
         between the parties created by the Lease, the substantially prevailing party shall
         be awarded its reasonable costs, disbursements, investigative fees, expert
         witness fees, paralegal and attorneys' fees.
         4The 2012 settlement agreement provides: "Buttnick agrees to indemnify the [Jolan
 Creditors] for any claims, fees, costs, or liability arising from this agreement, including any such
 claims, fees, costsor liability that arise if Buttnick files for bankruptcy."

                                                     15