Court Opinion

ID: 2814728
Source: CourtListenerOpinion
Date Created: 2015-07-06 21:01:51.985544+00
Date Added: 2024-06-11T12:18:07.180605
License: Public Domain

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                                                            20/5JUL -6 ^/0.-3t

      IN THE COURT OF APPEALS FOR THE STATE OF WASHINGTON

SANDRA J. ARCHDALE,
                                                 No. 71905-0-1
                       Appellant,
                                                 DIVISION ONE
          v.

SHARYL L. O'DANNE,                               UNPUBLISHED OPINION

                       Respondent.               FILED: July 6. 2015

          Spearman, C.J. — This action arises from a dispute over the ownership of

a condominium. Appellant Sandra Archdale appeals the trial court's decision

denying her request for quiet title and imposing a constructive trust for the benefit

of both appellant and respondent, Sharyl O'Danne. Archdale also appeals the

trial court's award of attorney fees and costs to O'Danne. Finding no error, we

affirm.

                                       FACTS

          Sandra Archdale and Sharyl O'Danne are sisters. In 2004, Archdale told

O'Danne that her marriage was failing and she desired to move out of her marital

home. But, according to Archdale, no lender would finance her purchase of a

new home in her individual capacity without a quitclaim deed signed by her

husband. Because she did not want to involve her husband in the purchase of a

property, Archdale asked O'Danne to obtain financing for a condo where she
No. 71905-0-1/2

could live during the separation from her husband and for which she could

eventually take title in her own name. Archdale agreed that she would be solely

responsible for all costs associated with the purchase of the condo, including the

down payment, closing costs, mortgage and other related payments. O'Danne

agreed to the request and in August 2004, closed sale on a condo of her sister's

choosing. Archdale moved into the condo in October 2004 and continued to live

there for the next six years, even though she and her husband eventually

reconciled.

       Beginning in 2005, Archdale made several requests that O'Danne convey

legal title to the condo, which O'Danne refused without a simultaneous pay off or

assumption of the underlying mortgage. On June 4, 2010, Archdale initiated this

action seeking quiet title to the condo or, in the alternative, a constructive trust

requiring O'Danne to immediately convey legal title to her via quitclaim deed,

without any further conditions. Archdale also sought money damages, attorney

fees and costs. The case proceeded to trial on October 10, 2013.

       At trial, it was undisputed that O'Danne was obliged to transfer title to the

condo to Archdale. At issue, was whether, under the agreement, O'Danne was

obligated to immediately transfer title to the condo to Archdale regardless of the

status of the underlying mortgage, as Archdale contended, or whether transfer of

the title was contingent on Archdale assuming or paying off the mortgage, as

O'Danne asserted.

       In her testimony, Archdale conceded that she had assured O'Danne that

she would pay offthe condo with funds from their mother's estate, which was in
No. 71905-0-1/3

probate at the time of the sisters' agreement in 2004. She admitted sending an

email regarding the condo to O'Danne on March 26, 2004, in which she promised

to "pay it off with the inheritance." Verbatim Report of Proceedings (11/13/13)

(VRP) at 144; Exhibit (Ex.) 29. Archdale also acknowledged that her former

lawyer had advised her in a letter dated December 3, 2008,1 that no court would

order O'Danne to transfer title until Archdale assumed or paid off the existing

mortgage. In the letter, a copy of which was admitted into evidence, Archdale's

attorney also noted that O'Danne was holding title for Archdale's benefit, pending

payment or satisfaction of the underlying mortgage.

       O'Danne testified that there was no specific agreement as to how

long she would hold title. She further testified, however, that based on

Archdale's March 26, 2004 promise to "pay it off with her inheritance," she

understood that she would hold title until the their mother's estate was

probated, at which point Archdale would pay off the mortgage on the

condo and O'Danne would convey title. O'Danne's deposition testimony,

which was consistent with her testimony at trial, was published at trial at

Archdale's request.

       The trial court found that Archdale "promised to pay off the underlying

mortgage with inheritance funds from their mother's pending estate" but

"[inexplicably, when Archdale received the inheritance funds, she refused to pay

off the mortgage. . . ." CP at 5. The court also found that O'Danne "agreed to

      1At trial, defense counsel apparently misspoke and stated the letter was dated
November 3, 2008. Review of the record reveals that this letter from Archdale's attorney was
dated December 3, 2008.
No. 71905-0-1/4

transfer the title to [Archdale] once the mortgage was paid off' and, "[f]or her

part[,]...O'Danne has repeatedly stated that she does not intend to retain the

subject property and will readily quitclaim it to [O'Danne] as soon as she is no

longer liable for the underlying mortgage." ]d. The court also found:

       Archdale has paid the mortgage and property taxes on the unit for
       the past nine years, except for two months during 2012, where she
       withheld payment causing the bank to begin foreclosure
       proceedings against her sister. . .. [O'Danne] was forced to pay a
       total of $1,493.84 to stop the foreclosure proceedings. The
       payment covered the cost of the two months of mortgage payments
       and late fees. Archdale admits she has not repaid O'Danne for
       making those payments.

CP at 5. Based on these findings, the trial court concluded that there was no

basis to quiet title in Archdale, but the action was not frivolous and there were

equitable grounds for imposing a constructive trust that benefitted both parties.

       The trust terms set forth by the court required Archdale and O'Danne to

execute a Purchase and Sale Agreement, whereby O'Danne would transfer the

condo to Archdale via quitclaim deed, subject to all senior liens and

encumbrances, if she received full payment and/or notice of satisfaction of the

total outstanding mortgage on or before 5:00 p.m. on May 14, 2014. In the event

that Archdale failed to meet this deadline, the trial court granted O'Danne an

immediate right of reentry in the condo for purposes of placing it on the open

market for sale and ordered her to list the property for sale within thirty days.

Finally, the trust provided for the distribution of the proceeds of a sale to a third

party. The court ordered that proceeds would be applied first to the outstanding

mortgage balance and any remaining taxes, fees, assessments, costs and

commissions. Surplus proceeds would then be used to reimburse O'Danne for
No. 71905-0-1/5

$1,493.84 in mortgage payments and late fees she had paid on Archdale's

behalf. Any remaining funds would be allocated at 75 percent to Archdale and 25

percent to O'Danne, with O'Danne's share intended as compensation for the use

of her credit by Archdale.

       On November 20, 2013, the court amended its decision and order, striking

its initial conclusion that the lawsuit was not frivolous or brought in violation of CR

11 and reserving ruling on the issue until after consideration of a timely motion

for such determination by O'Danne. Subsequently, O'Danne brought a motion for

attorney fees and costs pursuant to RCW 4.84.185, which permits such an award

to a party who prevails in an action that has been frivolously brought.

       On April 4, 2014, the trial court entered findings that O'Danne was the

prevailing party in the lawsuit and that "Archdale had no need to resort to

litigation or to call upon the equitable powers of the Court because O'Danne was

willing without such a lawsuit to convey the condominium to Archdale upon a

simultaneous payoff by Archdale of the existing mortgage balance, but Archdale

needlessly declined to do so." CP at 16. The court concluded that the lawsuit was

frivolous within the meaning of RCW 4.84.185 and that O'Danne was entitled to

attorney fees and costs totaling $55,388.91.

       On April 18, 2014, the trial court entered corrected findings, nunc pro tunc

to April 4, 2014, which added a judgment summary to the court's initial findings.

On May 5, 2014, the trial court entered a judgment confirming its April 4, 2014

decision and order, as amended, nunc pro tunc to April 4, 2014.
No. 71905-0-1/6

       Archdale appeals the decision and order, as well as the award of attorney

fees and costs to O'Danne.

                                   DISCUSSION

                                          I.

       Claims for quite title and imposition of a constructive trust are equitable in

nature. Durrah v. Wright. 115 Wn. App. 634, 649, 63 P.3d 184 (2003); In re

Marriage of Lutz. 74 Wn. App. 356, 366, 873 P.2d 566 (1994). Whether to grant

equitable relief is a question of law we review de novo. Niemann v. Vaughn

Comm'tv Church. 154 Wn.2d 365, 374, 113 P.3d 463 (2005). We review the

fashioning of an equitable remedy by the trial court for abuse of discretion.

Sorenson v. Pveatt. 158 Wn.2d 523, 531, 146 P.3d 1172 (2006). Here because it

is undisputed that the trial court's grant of equitable relief was proper and

Archdale challenges only the nature of the relief granted by the trial court, we

review for abuse of discretion. A trial court abuses its discretion when its decision

is manifestly unreasonable or based on untenable grounds or reasons. State v.

Powell, 126 Wn.2d 244, 258, 893 P.2d 615 (1995). To the extent discretion is

exercised in reliance upon factual findings, the findings must be supported by

substantial evidence. In re Lutz, 74 Wn. App. at 370. "Substantial evidence is

'evidence of a sufficient quantity to persuade a fair-minded rational person of the

truth of the declared premise. . . . Even though there may be conflicting evidence

on the record, [a reviewing court] will not disturb findings based on substantial

evidence." \± (quoting Henervv. Robinson, 67 Wn. App. 277, 289, 834 P.2d

1091 (1992)).
No. 71905-0-1/7

       Archdale contends the trial court abused this discretion when it refused to

quiet title in her and, instead, established a constructive trust. We disagree.

       The trial court found, on undisputed evidence, that while O'Danne was the

"legal owner," of the condo, Archdale had an "equitable interest" therein. The

court also found, in paragraph 3 of its decision and order, that:

       The Plaintiff promised to pay off the underlying mortgage with
       inheritance funds from their mother's pending estate. The
       Defendant agreed to transfer title to the Plaintiff once the mortgage
       was paid off. Inexplicably, when Archdale received the inheritance
       funds, she refused to pay off the mortgage on the subject
       property...

CP at 5. Although Archdale disputes this finding, it is supported by substantial

evidence, including testimony from both parties and written communications

between the parties and their attorneys regarding the condo dispute.

       The trial court's conclusion that "it was reasonable for the Defendant to

refuse to transfer title to the subject property to Archdale, given Archdale's lack of

performance in paying off the underlying mortgage as soon as she received her

inheritance, as promised," flows logically from its findings in paragraph 3.

Likewise, the trial court's conclusion that "title should not be quieted in the

Plaintiff' flows from these findings because they establish that Archdale did not

have superior title to her sister. CP at 4; see also Finch v. Matthews, 74 Wn.2d

161, 166, 443 P.2d 833 (1968) (explaining that a plaintiff seeking quiet title bears

the burden of establishing superior title to his or her opponents). The trial court's

refusal to quiet title in Archdale was not an abuse of discretion.

       We also find no abuse of discretion with respect to the constructive

trust terms imposed by the trial court. Sitting in equity, a court may fashion
No. 71905-0-1/8

broad remedies to do substantial justice to the parties and put an end to

litigation. Hough v. Stockbridge. 150 Wn.2d 234, 76 P.3d 216 (2003). In

this case, the terms of the constructive trust accomplished both ends.

      The trial court imposed three material trust terms:

   1. If Archdale tendered full payment and/or notice of satisfaction of the
      total outstanding mortgage amount within six months of the decision
      and order, O'Danne was required to transfer legal title to the condo
      to Archdale via quitclaim deed.

   2. In the event that Archdale failed to tender full payment and/or notice
      of satisfaction of the total outstanding mortgage amount within six
      months of the decision and order, O'Danne's duty to transfer title
      would cease, she would gain immediate right of re-entry in the
      condo for the purpose of placing it on the open market, and she
      would have 30 days to place the condo up for sale.

   3. Upon sale of the condo to a third party, the proceeds would be
      applied first to the outstanding mortgage balance and related costs.
      Ifthe sale yielded any surplus proceeds, the first $1,493.84 would
      go to O'Danne "in repayment of late mortgage payments and late
      fees owed by [Archdale]." CP at 6. After that, 25 percent of the
      remaining balance would go to O'Danne "as compensation for the
      use of her credit by [Archdale]" for nine years. Id. The remaining
      proceeds would go to Archdale.

These terms protected Archdale's equitable interest in the condo by formalizing

O'Danne's duty to convey title to Archdale via quitclaim deed. And, although

Archdale expressly objected to terms setting a time limit for Archdale's

requirement to satisfy the underlying mortgage, authorizing O'Danne to sell the

condo while Archdale continued making timely mortgage payments, or

apportioning any proceeds of a third party sale to O'Danne, such terms were

necessary to protect O'Danne's pecuniary interest as the holder of legal title to

the condo. Moreover, by clarifying the parties' respective duties and establishing

                                         8
No. 71905-0-1/9

enforceable time limits for the parties' fulfillment of these duties, the trust terms

ensured the parties would go their separate ways without endless litigation.

       We conclude that the equitable remedy fashioned by the trial court was a

reasonable exercise of its discretion.

                                           II.

       Next, Archdale challenges the trial court's award of attorney fees and

costs to O'Danne pursuant to RCW 4.84.185. We review an award of attorney

fees under RCW 4.84.185 for abuse of discretion. Alexander v. Sanford, 181 Wn.

App. 135, 184, 325 P.3d 341, review denied, _ Wn.2d _, 339 P.3d 634 (2014).

Because the trial court has weighed the evidence on this issue, our review is,

once again, limited to determining whether the trial court's findings of fact are

supported by substantial evidence and, if so, whether the findings support the

conclusions of law and the judgment. Sac Downtown Ltd. Partnership v. Kahn,

123 Wn.2d 197, 202, 867 P.2d 605 (1994).

       RCW 4.84.185 provides in relevant part:

       In any civil action, the court having jurisdiction may, upon written
       findings by the judge that the action, counterclaim, cross-claim,
       third party claim, or defense was frivolous and advanced without
       reasonable cause, require the nonprevailing party to pay the
       prevailing party the reasonable expenses, including fees of
       attorneys, incurred in opposing such action, counterclaim, cross-
       claim, third party claim, or defense. This determination shall be
       made upon motion by the prevailing party after a voluntary or
       involuntary order of dismissal, order on summary judgment, final
       judgment after trial, or other final order terminating the action as to
       the prevailing party. The judge shall consider all evidence
       presented at the time of the motion to determine whether the
       position of the nonprevailing party was frivolous and advanced
       without reasonable cause. In no event may such motion be filed
       more than thirty days after entry of the order.
No. 71905-0-1/10

The statute was adopted "to discourage frivolous lawsuits and to compensate the

targets of frivolous lawsuits for their fees and costs incurred in defending

meritless cases." Timson v. Pierce County Fire Dist. No. 15, 136 Wn. App. 376,

386, 149 P.3d 427 (2006) (citing Kearney v. Kearney, 95 Wn. App. 405, 416, 974

P.2d 872 (1999)). In order for the court to award attorney fees under the statute,

three elements must be present: (1) each of the claims or defenses asserted by

the opponent of fees must be frivolous, i.e., without basis in fact or law; (2) the

claims or defenses must have been advanced without reasonable cause; and (3)

the proponent of fees must have prevailed at trial. Alexander, 181 Wn. App. at

184. Each is present in this case.

                      The Lawsuit Was Frivolous in its Entirety

       In support of the fee award, the trial court found, based on the substantial

evidence discussed previously, that Archdale failed to pay off the mortgage on

the condo with her inheritance, as promised, and that O'Danne was willing,

without a court order, to transfer title upon Archdale's assumption or satisfaction

of the underlying mortgage. CP at 13. These findings establish that Archdale had

no factual or legal basis for her claim, as stated in her complaint, of an immediate

and unconditional right to legal title to the condo. The court's conclusion that

Archdale's claims for equitable relief "were frivolous within the meaning of RCW

4.84.185 in that they were advanced without a rational basis in law or fact" flows

logically from these findings. ]d_,

       The trial court made no specific findings to justify its conclusion that

Archdale's claim for damages was also frivolous. Nevertheless, review of the

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No. 71905-0-1/11

record reveals that the conclusion is supported by substantial evidence, as

Archdale offered no evidence in support of the claim for damages at trial.

          Archdale's Claims Were Advanced Without Reasonable Cause

       Because each of Archdale's claims was frivolous, our inquiry turns to

whether they were advanced without reasonable cause. Under Archdale's

interpretation of the parties' verbal agreement, she was legally entitled title to the

condo, subject to encumbrances of record but without further conditions.

Generally, a party may initiate a lawsuit to vindicate reasonably perceived legal

rights without fear of adverse consequences under RCW 4.84.185. See, State ex

rel. Quick-Ruben v. Verharen, 136 Wn.2d 888, 906-07, 969 P.2d 64 (1998)

("litigants should not fear adverse consequences for reasonably seeking to

judicially vindicate their perceived legal entitlements. . . . Just because underlying

claims are weak is not to say they are frivolous."). However, in this case,

Archdale's repeated concessions throughout the trial court proceedings

undermined her claim of an immediately enforceable right2 and none of the non-

testamentary evidence supported it.3 Furthermore, as noted previously, it was

never disputed that O'Danne would transfer legal title to Archdale upon

Archdale's satisfaction or assumption of the underlying mortgage. Accordingly,

      2 In her complaint, Archdale asserted superior title to O'Danne and claimed that, pursuant
to RCW 7.28.120, title to the condo should be quieted in her, subject to encumbrances of record
but without further conditions. However, at several instances throughout trial and on appeal,
Archdale has acknowledged that her right to legal title to the condo was contingenton her
assumption or satisfaction of the underlying mortgage.
          3This evidence included, among other items, an emailfrom Archdale in which she stated
she would "pay off with the inheritance" (Exhibit (Ex.) 29) and an email from Archdale's former
attorney to Archdale, dated December 3, 2008, which acknowledged that O'Danne was holding
title for Archdale's benefit, pending payment or satisfaction of the underlying mortgage. Ex. 32.

                                                11
No. 71905-0-1/12

we conclude that Archdale did not reasonably seek to vindicate a perceived legal

entitlement.

                     O'Danne Was the Prevailing Party at Trial

       Archdale also asserts that O'Danne did not qualify as a "prevailing party"

under RCW 4.84.185. This argument lacks merit. Our Supreme Court has

explained that:

       In general, a prevailing party is one who receives an affirmative
       judgment in his or her favor. If neither wholly prevails, then the
       determination of who is a prevailing party depends upon who is the
       substantially prevailing party, and this question depends upon the
       extent of the relief afforded the parties.

Riss v. Angel, 131 Wn.2d 612, 633-34, 934 P.2d 669 (1997) (citations omitted).

Applying this standard to the facts of the case, it is clear that O'Danne is the

prevailing party.

       The trial court's decision and order was a judgment granting O'Danne the

right to sell the condo to a third party should Archdale fail to timely satisfy the

underlying mortgage, the right to reimbursement of $1,493.84 in late mortgage

payments and late fees owed by Archdale upon a third party sale, and the right to

25 percent of any surplus sale proceeds. Thus, contrary to Archdale's claims,

O'Danne received affirmative judgment in her favor.

       And, although the constructive trust also benefitted Archdale, the relief

afforded by the trial court was entirely different from the relief requested in her

complaint, i.e., that title to the condo be quieted immediately in her name,

regardless of a simultaneous satisfaction of the mortgage. The relief granted was

also substantially different from that requested by Archdale at trial, i.e., that title

                                           12
No. 71905-0-1/13

to the condo be transferred to Archdale via quitclaim deed upon payment or

satisfaction of the underlying mortgage, with no further contingencies. Thus, to

the extent Archdale contends that she was the substantially prevailing party, she

is mistaken.

                                            Conclusion

        Because O'Danne was the prevailing party in this frivolous lawsuit, she

was entitled to an award of attorney fees and costs pursuant to RCW 4.84.185.

The trial court's entry of such an award was not error.4

                                                 III.

        O'Danne requests an award of attorney fees and costs on appeal, citing

RAP 18.1 and RCW 4.84.185 as the basis for such an award. Because she was

entitled to an award of attorney fees and costs in the trial court pursuant to RCW

4.84.185, we conclude that, as the prevailing party on appeal, she is entitled to

recover reasonable attorney fees and costs, subject to compliance with RAP

18.1(d). See Xieng v. Peoples Nat. Bank of Washington, 63 Wn. App. 572, 587,

821 P.2d 520 (1991) (explaining the general principle in Washington that those

entitled to an award of attorney fees below are also entitled to attorney fees on

appeal).5

         4 In a cross-appeal, O'Danne assigns error to the trial court's denial of her motion to
strike portions of Archdale's affidavit in opposition to O'Danne's motion for attorney fees and
costs. Because the trial court granted O'Danne's substantive motion for attorney fees and costs in
spite ofthe offending affidavit and because this award is affirmed on appeal, any error by the trial
court was harmless. See Diaz v. State, 175 Wn.2d 457, 472, 285 P.3d 873 (2012) (explaining that
an evidentiary ruling is not subjectto reversal on appeal unless the error was prejudicial, i.e., it
affected the outcome of trial).
        5 Archdale also contends that she is entitled to an award of attorney fees based on (1)
RCW 4.84.330 and the attorney fees and costs provision of the deed of trust; (2) RAP 18.1 and
RCW 4.84.185; and (3) the court's equity powers. In light of our disposition of her claims on
appeal the request is denied.

                                                  13
No. 71905-0-1/14

      Affirm.

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WE CONCUR:

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