Court Opinion

ID: 4222109
Source: CourtListenerOpinion
Date Created: 2017-11-20 20:20:39.335932+00
Date Added: 2024-06-11T14:41:56.249284
License: Public Domain

FILED
                                                           COURT OF APIJEALS ON:
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      IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

VICTORIA ANN HOSTETTER,                  )
                                         )      DIVISION ONE
                    Respondent,          )
                                         )      No. 76054-8-1
             V.                          )
                                         )      UNPUBLISHED OPINION
MICHAEL RICHARD HANSON,                  )
                                         )
                    Appellant.           )      FILED: November 20, 2017
                                         )

       DWYER, J. — Michael Hanson appeals from the trial court's order

concluding that he and Victoria Hostetter were in a committed intimate

relationship (CIR) and awarding him certain real property subject to a $22,500

judgment lien in favor of Hostetter. On appeal, Hanson contends that substantial

evidence does not support the trial court's factual findings. Hanson also

contends that the trial court erred by applying the wrong burden of proof to his

statute of limitation defense and by refusing to treat a written agreement between

the parties as an enforceable settlement agreement. Finding no error, we affirm.

                                         I

       Hanson and Hostetter began a relationship in 1999. The parties each own

real property located in Sumas, Washington. Hanson owns the "cabin" property,

Hostetter owns the "ranch" property, and together the parties purchased the
No. 76054-8-1/2

"orchard" property. Hanson and Hostetter were never married and never had

children together. Hanson has a son from a previous relationship who often lived

with Hanson and Hostetter.

         Hanson and Hostetter lived separately and together at various times

throughout their relationship. The parties continued to have an intimate

relationship even when spending time in separate residences. Hanson and

Hostetter relied nearly exclusively on cash for all purchases, including the

purchase of the orchard property. There is no evidence regarding the income

source of the parties—they produced no pay stubs, no W-2s, and no tax returns

that accurately captured income. However, cash flow was sufficient to allow the

parties to purchase multiple houses, animals, personal property, and to perform

maintenance and upkeep on more than one residence. The parties kept cash

buried in black plastic tubes around the properties. The circumstances of the

parties' arrangement made it impossible to establish any sort of segregation of

funds.

         The parties offered conflicting testimony as to when their relationship

ended. Hanson testified that the relationship ended on July 27, 2010 after he

returned from Europe. Hostetter testified that she ended the relationship on

Valentine's Day 2011. Each party offered testimony from family members to

establish that their version of events was correct. The conflicting testimony of the

parties, biases of the family members, and lack of other evidence made it

impossible to establish a definite date for the end of the relationship.

                                           2
No. 76054-8-1/3

       In September 2011, Hanson and Hostetter engaged in a series of

mediation sessions. Following mediation, Hanson and Hostetter handwrote and

signed a document that Hanson now characterizes as a "settlement agreement."

The writing purports to divide certain personal property between the parties and

lists certain tasks that each party will complete. The writing states that Hostetter

shall have no rights to the cabin or orchard properties.

       Following trial, the trial court found that Hanson and Hostetter were in a

relationship that began in 1999 or 2000 and ended sometime within the three

years preceding the filing of the petition. The trial court found that the parties

were intimate and intended a common household as a couple. The trial court

found that the parties pooled their resources for joint projects and made joint

purchases of real and personal property. Accordingly, the trial court concluded

that the parties were in a CIR.

       The trial court also found that the written document signed by both parties

was a preliminary agreement. The trial court noted that the writing did not

address credit card or other debt, did not address the parties' vehicles, and

omitted mention of a great amount of the personal property in dispute.

Accordingly, the trial court found that the writing was not an enforceable

settlement agreement.

       The trial court ruled that Hanson and Hostetter would each retain all

personal property in their possession and that Hostetter would retain the vehicle

that was given to her as a birthday present. The trial court ruled that the cabin

property was Hanson's separate property. The trial court ruled that the parties

                                          3
No. 76054-8-1/4

purchased the ranch property during the CIR but that Hanson waived any interest

in the property. Finally, the trial court ruled that the parties purchased the

orchard property during the CIR, that title to the property was placed in

Hostetter's name, and that Hostetter contributed $22,000 to the purchase price of

the property. The trial court awarded the orchard property to Hanson, subject to

a $22,500 judgment lean in favor of Hostetter.1 Hanson appeals.

                                                 11

        Hanson contends that the trial court erred by concluding that he and

Hostetter were in a CIR and by awarding Hostetter part of his separate property.

This is so, he asserts, because the trial court's factual findings are not supported

by substantial evidence. We disagree.

        We review a trial court's factual findings for substantial evidence. In re

Parentage of G.W.-F., 170 Wash. App. 631, 637, 285 P.3d 208(2012). Evidence is

substantial where, viewed in the light most favorable to the prevailing party, a

rational finder of fact could find the fact in question by a preponderance of the

evidence. In re Dependency of M.P., 76 Wash. App. 87, 90-91, 882 P.2d 1180

(1994). We defer to the trier of fact to resolve conflicting testimony, evaluate the

persuasiveness of evidence, and assess the credibility of witnesses. G.W.-F.,
170 Wash. App. at 637. We review a trial court's conclusions of law de novo to

determine if they are supported by the findings of fact. G.W.-F., 170 Wash. App. at

637.

         1 The trial court found that the value of the property had increased by $2,000, making the
total value of Hostetter's contribution equal to $22,500.
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No. 76054-8-1/5

                                         A

       Hanson first contends that substantial evidence does not support the trial

court's factual findings concerning the existence of the CIR.

       Washington law does not recognize the existence of common law

marriages. In re Pennington, 142 Wash. 2d 592, 600, 14 P.3d 764 (2000). "The

CIR doctrine is a judicially created doctrine used to resolve the property

distribution issues that arise when unmarried people separate after living in a

marital-like relationship and acquiring what would have been community property

had they been married." In re Kelley & Moesslanq, 170 Wash. App. 722, 732, 287

P.3d 12(2012).

       The determination of whether a CIR existed depends on the facts of each

case. Our Supreme Court has announced five nonexclusive factors for courts to

consider when making such a determination: "continuous cohabitation, duration

of the relationship, purpose of the relationship, pooling of resources and services

for joint projects, and the intent of the parties." Pennington, 142 Wash. 2d at 601

(quoting Connell v. Francisco, 127 Wash. 2d 339, 346, 898 P.2d 831 (1995)).

"These characteristic factors are neither exclusive nor hypertechnical. Rather,

these factors are meant to reach all relevant evidence helpful in establishing

whether a [CIR] exists." Pennington, 142 Wash. 2d at 602 (citing Connell, 127
Wash. 2d at 346).

       Here, the trial court heard testimony that Hanson and Hostetter began

dating sometime in 1999 and that they had moved in together by the summer of

2000. The trial court heard testimony that Hanson and Hostetter worked together

                                         5
No. 76054-8-1/6

to build and maintain the cabin property. The trial court heard testimony that

Hostetter and Hanson purchased personal property together and paid bills

together. Hostetter, Hanson, and Hanson's son were on a family health plan

together. After Hanson and Hostetter finished building the cabin property and

purchased the orchard property, they split their time between the three

properties. Hanson testified that he continued to have an intimate relationship

with Hostetter after the cabin was built and the orchard property was purchased.

Although Hanson and Hostetter provided conflicting testimony as to the precise

date that the relationship ended, the trial court heard testimony establishing that

the relationship lasted at least 10 years.

        The trial court found that the parties cohabitated continuously beginning in

1999 or 2000, that they were intimate and intended a common household as a

couple, and that they pooled their resources for joint projects, maintained

households together, made joint purchases of personal property, and each

contributed toward big purchases. In light of these findings, the trial court

concluded that the parties were in a CIR that began sometime in 1999 or 2000.

        Hanson first contends that substantial evidence does not support the trial

court's finding that the parties cohabitated. Hanson asserts that cohabitation

requires the parties to continuously live in the same house.2 Because he did not

        2 Hanson relies on In re Marriage of Byerlev, 183 Wash. App. 677, 689, 334 P.3d 108
(2014), in support of his assertion that continuous cohabitation is a necessary condition for a CIR.
But the issue before the court in Byerlev was not whether the parties were in a CIR—they agreed
that they were—but, rather, whether the house in which they resided was community property.
183 Wash. App. at 686-87. The court held that the house was not acquired during the CIR because
a CIR "cannot ... commence prior to the date the parties begin living together." Byerley, 183
Wash. App. at 689. Byerley does not support Hanson's assertions.
                                               -6 -
No. 76054-8-1/7

spend every night with Hostetter, Hanson avers, he was not cohabitating with

her. But Hanson's own testimony reveals that the parties stopped living

exclusively in the same house in 2006 not because they were no longer in a

relationship but, rather, because "[o]ne of us had to stay at the other property."

Hanson testified that he and Hostetter continued an intimate relationship after

they purchased the ranch property, spending several nights a week together.

The trial court's finding is supported by substantial evidence.

       Hanson next contends that substantial evidence does not support the trial

court's finding that the relationship ended sometime within the three years

preceding the filing of the petition. Hanson asserts that the trial court improperly

shifted the burden to him to establish when the relationship ended. But Hanson

confuses the burden of establishing the existence of the CIR—which rests on the

petitioner—with the burden of establishing that the petition is time barred. Here,

the trial court found that, although the evidence did not support a particular date

that the relationship ended, the evidence did support a finding that the

relationship ended within the three years preceding the filing of the petition. The

trial court's finding is supported by the testimony presented at trial.

       Hanson next contends that the trial court failed to make any findings as
                                                                             o to

the purpose of the relationship. But the trial court explicitly stated in its oral ruling

that "the parties operated with a general purpose to operate and keep a common

household and to reside together." The trial court's finding is supported by the

testimony at trial.

                                           7
No. 76054-8-1/8

         Hanson also contends that there was insufficient evidence to support the

trial court's finding that Hanson and Hostetter "pooled their resources for joint

projects and to maintain households together." As discussed herein, neither

party was able to produce bank statements, W-2s, tax returns, or any other form

of documentation that could adequately explain their income or expenses. This

is reflected in the trial court's finding that "[t]he genesis of the cash used during

the parties' relationship cannot be traced and it is impossible to segregate whose

cash was used for what purchases or payments." Rather, the trial court relied on

the testimony given by Hanson and Hostetter to determine whether resources

were pooled. The trial court heard and credited testimony that Hostetter

contributed financially to the purchase of real and personal property. Hanson's

assertions that the trial court should not have believed Hostetter are without

merit.

         Finally, Hanson contends that the trial court's finding that he and Hostetter

intended to be in a CIR is not supported by substantial evidence. This is so, he

asserts, because neither he nor Hostetter intended to marry. But the trial court

never found that Hanson and Hostetter intended to marry. Rather, the trial court

found that Hanson and Hostetter "were intimate and intended a common

household as a couple." Intent to marry is not a necessary precondition for a

CIR—the relevant consideration is whether the parties "mutually intended to be in

a [C1R]." Pennington, 142 Wash. 2d at 606. The trial court's finding is supported by

substantial evidence.

                                           8
No. 76054-8-1/9

       The trial court's factual findings are supported by substantial evidence.

Those findings in turn support the trial court's conclusion that Hanson and

Hostetter were in a CIR. There was no error.

       Hanson next contends that the trial court erred by awarding him the

orchard property subject to a $22,500 judgment lean in favor of Hostetter. This is

so, he asserts, because the trial court's findings of fact were not supported by

substantial evidence.

       After a trial court has determined that a CIR exists, the court then

evaluates the interest that each party has in the property acquired during the

relationship. Then, the trial court makes a just and equitable distribution of such

property. Pennington, 142 Wash. 2d at 602. "While property acquired during the

(CIR] is presumed to belong to both parties, this presumption may be rebutted."

Pennington, 142 Wash. 2d at 602. "If the presumption of joint ownership is not

rebutted, the courts may look for guidance to the dissolution statute, RCW

26.09.080,[31 for the fair and equitable distribution of property acquired during the

[CIR]." Pennington, 142 Wash. 2d at 602. We review a trial court's distribution of

       3 ROW   26.09.080 instructs courts to consider all relevant factors including, but not limited
to:
               (1) The nature and extent of the community property;
               (2) The nature and extent of the separate property;
               (3)The duration of the marriage or domestic partnership; and
               (4) The economic circumstances of each spouse or domestic partner at
       the time the division of property is to become effective, including the desirability
       of awarding the family home or the right to live therein for reasonable periods to a
       spouse or domestic partner with whom the children reside the majority of the
       time.

                                                 9
No. 76054-8-1/10

property for an abuse of discretion. Brewer v. Brewer, 137 Wash. 2d 756, 769, 976

P.2d 102(1999).

       Here, the trial court heard testimony from Hostetter that she provided

$22,000 for the purchase of the orchard property. The trial court heard testimony

that the purchase price of the orchard was $88,000. The trial court also heard

expert testimony that the orchard appraised for $90,000 as of November 6, 2015.

      The trial court found that the cabin property belonged to Hanson, that

Hanson made no claim as to the ranch property, and that the orchard property

was purchased jointly by the parties and was placed in Hostetter's name for tax

purposes. The trial court found that the orchard property had increased in value

by $2,000 since its purchase price and that Hostetter had contributed $22,000 to

the purchase of the orchard property. Accordingly, the trial court awarded

Hanson the orchard property subject to a $22,500 judgment in favor of Hostetter.

       On appeal, Hanson contends that the trial court's factual findings are not

supported by substantial evidence. Hanson asserts that Hostetter did not

contribute to the purchase of the orchard property at all. Hanson produced two

cashier's checks totaling $81,000 in support of his assertion. Hanson now states

that he paid cash for the remainder of the purchase price. But, as discussed

herein, the trial court heard extensive testimony that Hanson and Hostetter

pooled their money and purchased nearly everything in cash. The trial court did

not have the benefit of financial documentation before it and, thus, relied on the

testimony of the parties to make its findings.

                                       - 10-
No. 76054-8-1/11

       Although Hanson testified that he paid for the orchard property himself,

Hostetter testified that she contributed $22,000 toward the property. The trial

court found Hostetter's testimony credible and awarded her the amount that she

contributed, adjusted for the increase in value. There was no abuse of

discretion.

                                         Ill

       Hanson next contends that the trial court erred by not crediting his statute

of limitation defense.

       The equitable doctrine of CIR is subject to a three-year statute of

limitation. The petitioner must sue to establish the existence of the CIR within

three years of the end of the relationship. Kelley, 170 Wash. App. at 737. The

statute of limitation is an affirmative defense and the defendant carries the

burden of proof. Rivas v. Overlake Hosp. Med. Ctr., 164 Wash. 2d 261, 267, 189

P.3d 753(2008)(citing CR 8(c)). The burden shifts to the plaintiff if he or she

alleges that the statute was tolled and does not bar the claim. Rivas, 164 Wash. 2d

at 267.

       Here, Hostetter filed the petition to determine the validity of the CIR on

August 7, 2013. On February 22, 2016, Hanson moved to amend his response

to the petition to include the affirmative defense that the petition was time barred.

The motion was granted.

       At trial, Hanson testified that his relationship with Hostetter ended on July

27, 2010. Hanson argued that, by the time that Hostetter sued to establish the

existence of the CIR, the statutory limitation period had run. On the other hand,
No. 76054-8-1/12

Hostetter testified that the relationship did not end until Valentine's Day 2011.

Each party offered testimony from family members in support of their assertions.

       The trial court found that the conflicting evidence did not support a

particular date of separation. However, the trial court found that there was

evidence that the relationship continued beyond the date that Hanson identified

as the end of the relationship. The trial court noted that it was Hanson's burden

to prove that the statute of limitation had run by the time that the petition was

filed. The trial court found that Hanson had failed to meet his burden of proving

that the petition was barred by the statute of limitation.

       On appeal, Hanson contends that the trial court erred by failing to shift the

burden of proof to Hostetter. This is so, he asserts, because Hostetter alleged

that the statute of limitation was tolled.

       Hanson's assertion is puzzling. Hostetter argued at trial—and maintains

on appeal—that the relationship ended in February 2011. Rather than asserting

that the statute was tolled, Hostetter asserted that the petition was filed within the

three-year time limit. This does not implicate tolling and the burden does not shift

to Hostetter.

       As the petitioner, Hostetter had the burden of establishing the existence of

the CIR, including when the relationship ended. The trial court found that a CIR

existed and that, although the exact date of the end of the CIR could not be

established, the relationship ended sometime within the three years preceding

the filing of the petition. The trial court's finding is supported by substantial

evidence. Given the court's factual finding, the burden of establishing that the

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No. 76054-8-1/13

petition was time barred properly rested on Hanson. He failed to meet that

burden. There was no error.

                                          IV

       Finally, Hanson contends that the trial court erred by refusing to enforce

the written agreement between the parties.

       Settlement agreements are governed by general principles of contract law.

Saben v. Skagit County, 136 Wash. App. 869, 876, 152 P.3d 1034 (2006). "A valid

contract requires a meeting of the minds on the essential terms." Evans & Son,

Inc. v. City of Yakima, 136 Wash. App. 471, 477, 149 P.3d 691 (2006). "Mutual

assent to definite terms is normally a question of fact for the fact finder." P.E.

Sys., LLC v. CPI Corp., 176 Wash. 2d 198, 207, 289 P.3d 638(2012). In

determining whether informal writings are sufficient to establish a contract when

the parties contemplated signing a more formal written agreement, Washington

courts consider whether "(1) the subject matter has been agreed upon,(2)the

terms are all stated in the informal writings, and (3) the parties intended a binding

agreement prior to the time of the signing and delivery of a formal contract."

Morris v. Maks,69 Wn. App. 865, 869, 850 P.2d 1357(1993).

       Here, Hanson and Hostetter produced a written document following a

series of mediations. This writing purports to divide several assets between the

parties. For example, the writing provides that Hostetter "has no rights to cabin

or [the orchard]." The writing also contemplates that each party will complete a

variety of tasks. For example, the writing states that Hostetter will "do the railings

on deck" and that Hanson will cover Hostetter's health insurance until October

                                        - 13-
No. 76054-8-1/14

31, 2011. The writing does not contain any references to the division of debt and

neglects to divide up certain personal property, such as the parties' vehicles.

After the parties signed the writing, Hostetter signed a quitclaim deed to the

orchard property.

        At trial, Hostetter testified that the written agreement was a list that the

parties made to "start to resolve" their differences. Hostetter testified that the

writing did not include all of the parties' mutually owned assets or debts and that

it did not list the vehicles or the mortgage on the ranch property. Hostetter

testified that the parties intended to review the writing with their attorneys and

continue mediation to reach a final agreement. Hostetter also testified that the

parties' conduct following the creation of the writing deviated from the conduct

contemplated by the writing. For example, Hostetter testified that Hanson

refused to address half of the things on the list and refused to move forward with

mediation. Finally, Hostetter testified that she signed the quitclaim deed in an

effort to continue negotiations.4

        The trial court made a factual finding that the writing was a preliminary

agreement, not a complete settlement. The trial court found that the writing

contemplated a division of tasks to be done as well as a division of some

property but that it did not address with sufficient particularity all of the issues and

all of the property in dispute. The trial court found that the writing did not address

the mortgage on the ranch, omitted a substantial amount of personal property,

         4 Hanson offered little testimony on the written agreement. Hanson testified that the
writing was signed following mediation and that he believed that the writing was a final agreement
between the parties.
                                             - 14 -
No. 76054-8-1/15

and was still contingent upon the completion of certain tasks. The trial court

found that the writing was a preliminary agreement and that the parties did not

intend for it to be enforceable. Accordingly, the trial court concluded that the

writing was not enforceable.

       The trial court's finding that the written agreement was a preliminary

agreement is supported by substantial evidence. The writing divides up a

mixture of personal and real property as well as a number of uncompleted tasks.

The writing omits material items in dispute such as the parties' vehicles, the

mortgage on the ranch property, Hostetter's interest in the orchard property, and

the debt owed by both parties. Although Hanson contends that both parties

intended the writing to be the final settlement agreement, he does not explain

how negotiations between the parties could have been concluded when the

writing omits material terms still in dispute. Given the trial court's finding that the

parties had not mutually assented to the material terms, the court's conclusion

that the written document was unenforceable is sound. There was no error.5

        Affirmed.

We concur:

        5 Hanson requests an award of attorney fees and costs pursuant to RCW 4.84.185 for
defending against a frivolous lawsuit. Because we affirm the trial court's order, his request is
denied.
                                              - 15-