Court Opinion

ID: 4391864
Source: CourtListenerOpinion
Date Created: 2019-04-29 20:50:05.551273+00
Date Added: 2024-06-11T14:23:47.918624
License: Public Domain

IN THE COURT OF APPEALS                                         FOR THE STATE OF WASHINGTON

LOUIS SACKETT,                                                                      )
                                                                                    )   DIVISION ONE
                                         Respondent,                                )
                                                                                    )   No. 78164-2-I
             v.
                                                                                    )   UNPUBLISHED OPINION
BARTMARZOLF,                                                                        )
                                         Appellant.                                 )   FILED: April 29, 2019
_________________________________________________________________________________   )
              DWYER, J.            —     The trial court quieted title to a 25-acre parcel of farm

property in Louis Sackett. Bart Marzolf appeals from that order, contending that

the trial court’s findings of fact are not supported by substantial evidence in the

record and that the findings do not support the conclusions of law. Finding no

error, we affirm.

             Louis Sackett is a 91-year-old childless widower and retired marine pilot

who resides alone in Edmonds. Sackett has owned a 25-acre farm property in

Arlington since 1973. The farm includes a furnished residence, farm equipment,

and outbuildings. Sackett’s unsuccessful efforts to sell the farm were well known

among his friends and neighbors.

             Sackett met Bart Marzolf in the 1980s via Marzolf’s family butcher

business. Sackett and Marzolf developed a close relationship and treated each
No. 78164-2-1/2

other as family members. Marzolf accompanied Sackett on hunting trips, visited

him frequently at his home and at the farm, talked to him on the telephone

several times a week, and helped him recover from a hip fracture.

       On March 17, 2017, Sackett signed a quit claim deed conveying the farm

to Marzolf in exchange for “Ten Dollars & Other Valuable Consideration.”

Sackett and Marzolf prepared the deed together, and Marzolf drove Sackett to

the bank to have it notarized and to county offices for recording. Marzolf and

Sackett signed an excise tax affidavit and supplemental statement indicating that

the transaction was a “gift without consideration.” The following day, Marzolf, his

fiancé, and his family moved onto the farm property.

       On June 16, 2017, Sackett filed this action to void the quit claim deed and

quiet title to the farm property in his name. The complaint alleged that Sackett

had negotiated with Marzolf to sell the farm property for fair market value, and

that Marzolf induced Sackett through undue influence and material

misrepresentation to transfer the farm property to Marzolf by gift. Marzolf

answered the complaint and counterclaimed to quiet title.

       On December 11,2017, Marzolf filed a motion for partial summary

judgment requesting a ruling that the parties did not share a confidential

relationship and that Sackett bears the burden of proving fraud by undue

influence or material misrepresentation by clear, cogent, and convincing

evidence. On January 12, 2018, the court granted Marzolf’s motion. The case

proceeded to a bench trial.

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No. 78164-2-1/3

       Sackett testified at trial. He said he had been trying to sell the farm for the

past couple of years. Although other potential buyers had expressed interest,

Sackett decided he wanted to sell the farm to Marzolf. He and Marzolf began

negotiating purchase terms in March 2017. Sackett wanted $350,000 for the

property, but Marzolf said he could not afford that. Sackett dropped the price to

$300,000. The agreed terms were a down payment of $35,000 and monthly

payments of $1,000 for two years, at which time a balloon payment for the

remaining balance would be due. Marzolf told Sackett that he would pursue

bank financing for the down payment. Sackett agreed to allow Marzolf to pay

him less than $1 ,000 per month for the first couple of months until Marzolf paid

off the loan on his pickup truck.

       Marzolf told Sackett that the bank needed to see a quit claim deed in order

for Marzolf to obtain a loan for the purchase. Sackett wanted Marzolf to buy the

farm, so he agreed to give him a quit claim deed. At some point after the quit

claim deed was recorded, Marzolf informed Sackett that he decided to assume

ownership by way of the quit claim deed without payment. Sackett said this

news “broke my heart.” Sackett denied that he ever intended to gift the farm

property to Marzolf.

       Witnesses Ron Danielson, James Marriott, and Katrina Minchuk testified

that Sackett attempted to sell the farm to each of them. Marriott specified that in

January or February 2017, Sackett offered to sell the farm for $350,000, with a

$35,000 down payment, $1,000 per month for two years, and a balloon payment

to pay him off. Marriott did not pursue the transaction. Later, in March 2017,

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No. 78164-2-1/4

Marriott was present when Sackett and Marzolf discussed Marzolf buying the

farm property. Marriott also testified that Sackett “doesn’t give away a penny”

and “wouldn’t give the farm away.”

       Minchuk testified that she was interested in purchasing the farm, but

Sackett called her in February 2017 to say he had found another buyer.

       Sackett’s friend Dr. Arthur Castagno testified that Sackett talked about

selling the farm property “a great deal” during the early part of 2017 and “pretty

much daily” during March 2017. During the week of March 13, Sackett gave

Castagno a “day-by-day description of what was happening with the financial

aspects of the house sale, the farm sale.”

       Sackett’s friend Earl Groendyk testified that during the last few years

Sackett had been trying to get him to buy the farm “because he wanted it to go to

someone he knew.” Groendyk said Sackett’s asking price was around $350,000.

Groendyk testified that in January 2017, Sackett called to ask him to give his

spare keys to the farm property to Marzolf. Sackett then gave the phone to

Marzolf, who informed Groendyk that he was trying to buy the farm. Groendyk

testified that Sackett was a “frugal gentleman” who was “not much into giving”

and who never said that he intended to give the farm away.

       Marzolf’s testimony presented a different version of events. According to

Marzolf, Sackett often said he wanted Marzolf to have the farm property, but

never mentioned anything about payment. One day in February 2017, Sackett

tossed the keys to Marzolf and said, “I want you to have the farm.” Soon

thereafter, Sackett spontaneously told Marzolf they needed to get a quit claim

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No. 78164-2-115

deed. Sackett filled out the deed and about two weeks later they had it notarized

and recorded. Sackett subsequently left Marzolf a voice mail congratulating him

on getting the farm property.

       A couple of days later, to Marzolf’s great surprise, Sackett demanded that

he sign a written agreement to purchase the farm. The offered terms were

$300,000 or $350,000, with a $35,000 down payment and $1 ,000 a month

payments. Marzolf said he could not afford that, and reminded him the farm was

a gift. But Sackett insisted he “didn’t recall” giving the farm to Marzolf.

       Following settlement discussions, Marzolf stated that Sackett agreed to

accept $500 per month for the farm “until I’m pushing up daisies.” Marzolf denied

telling Sackett that he was not going to buy the house because he already owned

it via quit claim deed. Marzolf also denied telling Sackett that he needed a quit

claim deed to obtain a purchase loan for the farm property. Rather, during the

course of settlement negotiations, Marzolf told Sackett that the bank required a

quit claim deed to obtain a home improvement loan.

       Several witnesses testified for Marzolf. Marzolf’s fiancé Janelle Whiteman

testified that Sackett said he was giving them the farm. Marzolf’s friend Vincent

Phillips and Marzolf’s son Stephen Meyers also testified they heard Sackett tell

Marzolf the farm would be his some day, and that Sackett did not mention

payment. Marzolf’s uncle Mark Marzolf testified that in early 2017, Bart Marzolf

called to say he needed to find out how to do a quit claim deed because Sackett

had decided to give him the farm. And Debby Sundheim, exemption division

supervisor for the Snohomish County Assessor’s Office, testified that on March

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No. 78164-2-1/6

17, 2017, Sackett told her that the transaction was a gift. Kimberly Sue Harrison,

VP branch manager at Columbia Bank in Snohomish, testified that in March 2017

Marzolf sought a $150,000 home improvement loan for a farm that had been

gifted to him. Harrison told Marzolf that because the farm was a gift, he would

need to submit a copy of the quit claim deed to apply for a home improvement

loan.

        The trial court concluded that Sackett established by clear, cogent, and

convincing evidence that he never intended to make a gift of the farm to Marzolf.

The trial court also concluded that Sackett established by clear, cogent, and

convincing evidence that the quit claim deed resulted from undue influence

exerted by Marzolf upon Sackett. The court quieted title in the property to

Sackett. Marzolf appealed.

        Marzolf asserts that the trial court’s findings of fact are not supported by

substantial evidence in the record. We disagree.

        Where, as here, the parties are not in a confidential or fiduciary

relationship, the party seeking to set aside an inter vivos gift has the burden of

showing the gift is invalid as a product of undue influence. Lewis v. Estate of

Lewis, 45 Wash. App. 387, 388-89, 725 P.2d 644 (1986). The applicable quantum

of evidence is clear, cogent, and convincing. In re Estate of Eubank, 50 Wn.

App. 611, 619, 749 P.2d 691 (1988).

        “In a bench trial where the trial court has weighed the evidence, our review

is limited to determining whether substantial evidence supports the trial court’s

                                           6
No. 78164-2-1/7

findings of fact and whether those findings support the court’s conclusions of

law.” Newport Yacht Basin Ass’n of Condo. Owners v. Supreme Nw., Inc., 168
Wash. App. 56, 63, 277 P.3d 18 (2012). Substantial evidence is the quantum of

evidence sufficient to persuade a rational fair-minded person that the premise is

true. Wenatchee Sportsmen Ass’n v. Chelan County, 141 Wash. 2d 169, 176, 4
P.3d 123 (2000). “There is a presumption in favor of the trial court’s findings, and

the party claiming error has the burden of showing that a finding of fact is not

supported by substantial evidence.” Frank Coluccio Constr. Co. v. King County,

136 Wash. App. 751, 761, 150 P.3d 1147 (2007). “When a challenged factual

finding is required to be proved at trial by clear, cogent, and convincing evidence,

we incorporate that standard of proof in conducting substantial evidence review.”

In re Estates of Jones, 170 Wash. App. 594, 603, 287 P.3d 610 (2012) (quoting In

re Trust & Estate of Melter, 167 Wash. App. 285, 301, 273 P.3d 991 (2012)). We

defer to the trier of fact to resolve conflicting testimony, evaluate the

persuasiveness of evidence, and assess the credibility of witnesses. In re

Parentage of G.W.—F., l7OWn. App. 631, 637, 285 P.3d 208 (2012). We review

conclusionsoflawdenovo. Binghamv. Lechner, 111 Wash. App. 118, 127, 45
P.3d 562 (2002).

       Marzolf first asserts that findings of fact 8 and 9 are not supported by

substantial evidence in the record. These challenged findings of fact state:

            8. SACKETT and MARZOLF had a close relationship.
       SACKETT trusted MARZOLF implicitly and treated him as a family
       member.

              9. SACKETT had confidence that MARZOLF was
       trustworthy and would not act in any way against his best interest.

                                           7
No. 78164-2-1/8

          Marzolf acknowledges that he and Sackett shared a close relationship.

But he contends that this friendship is not tantamount to evidence that Sackett

unquestionably trusted him in real estate matters or that he would not act in any

way against Sackett’s best interest. We disagree. Marzolf did not challenge the

trial court’s finding that he and Sackett “treated each other as family members”

and that he “was like a son to SACKETT.” “Unchallenged findings of fact are

verities on appeal.” Rush v. Blackburn, 190 Wn. Ap. 945, 956, 361 P.3d 217

(2015). Moreover, Sackett specifically testified, “I felt that I could trust him” to

make payments. Substantial evidence supports these findings and the

underlying inferences.

          Marzolf next challenges finding of fact 22. This challenged finding of fact

states:

                  22. Debb[y] Sundheim of the assessor’s office testified that
          she recalled the transaction from nearly 12 months ago, which the
          Court found a bit hard to believe. But, assuming that she did, the
          parties told her the quitclaim deed was a gift, despite the language
          on the deed itself which she simply disregarded as boilerplate. The
          Court notes that the parties had a motive to lie to her about whether
          or not the property was a gift given that they knew at the time that it
          would have caused them to pay excise tax which would likely have
          been a large amount of money.

          Marzolf argues that there was no evidence or testimony that he and

Sackett lied on the deed, on the excise affidavits, or to Sundheim in indicating

that the conveyance was a gift, or that they were motivated by a desire to avoid

paying excise tax. But Sackett testified at length that he never intended to give

Marzolf the farm and that Marzolf agreed to purchase it on specific terms. The

trial court found that Marzolf’s testimony regarding a gift was not credible. And

                                            8
No. 78164-2-1/9

several witnesses testified that Sackett was a frugal gentleman who would not

have given the farm away. Substantial evidence supports these findings and the

underlying inferences.

          Marzolf also contends that the trial court’s assessment of Sundheim’s

credibility was an abuse of discretion. But appellate courts do not assess

credibility. Boeing Co. v. Heidy, 147 Wash. 2d 78, 87, 51 P.3d 793 (2002).

Moreover, the trial court expressly based this finding of fact on an assumption

that Sundheim did recall the transaction.

          Marzolf next challenges finding of fact 2. This challenged finding of fact

states:

                 2. SACKETT’S long standing estate plan provided for the
          bulk of his estate to go to two charities special to him: Pacific
          Northwest Research Foundation and Shriner’s Hospital. The farm
          property was a large asset and important piece of SAC KETT’S
          estate that he intended to sell and liquidate to fund his estate plan.

          Marzolf contends that this finding of fact is not supported by substantial

evidence in light of documentary evidence that the transfer was a gift and

Sundheim’s unrebutted testimony that Sackett told her that he was giving the

farm to Marzolf because he had taken such good care of him. But Sackett

testified that the bulk of his estate would go to Pacific Northwest Research

Foundation and Shriner’s Hospital. And Alan Anderson, director of development

for Shriners Hospital for Children of California, testified that Sackett told him the

farm property was among the assets that would be part of his estate. This is

consistent with the testimony of Danielson, Marriott, Minchuk, Castagno, and

                                             9
No. 78164-2-1110

Groendyk, all of whom testified regarding Sackett’s efforts to sell the farm. This

finding of fact is supported by substantial evidence.

          Marzolf next challenges finding of fact 15. This challenged finding of fact

states:

                 15. SACKETT has not purchased real property in 45 years
          and he did not understand how the execution of a quit claim deed
          would fit into the sale. SACKETT accepted MARZOLF’S word and
          explanation for the quit claim deed requirement.

          Marzolf contends that there was no evidence that Sackett, a savvy real

estate investor with an estate of more than $2.5 million, did not understand what

he was doing when he signed the quit claim deed. He notes that there is no

evidence that Sackett was confused or incompetent when he signed it. This

argument disregards Sackett’s testimony that he signed the deed because he

trusted Marzolf and treated him as family. Moreover, the trial court found that

“MARZOLF misrepresented to SACKETT that a quit claim deed was needed to

get a loan for the down payment from Columbia Bank.” Marzolf failed to assign

error to this finding in his opening brief. “An issue raised and argued for the first

time in a reply brief is too late to warrant consideration.” Cowiche Canyon

Conservancy v. Bosley, 118 Wash. 2d 801, 809, 828 P.2d 549 (1992). This finding

is a verity on appeal. And substantial evidence supports the trial court’s finding.

          Marzolf next challenges findings of fact 11 and 12. These challenged

findings of fact state:

              11. During the months of February and early March 2017,
       SACKETT and MARZOLF negotiated a purchase and sale of the
       farm property. The sale terms were similar to the terms SAC KETT
       had offered to sell the farm property to neighbors and friends.
       Those terms included a sale price of approximately $350,000.00.

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No. 78164-2-I/li

                  12. SACKETT initially offered to sell the farm property to
          MARZOLF for $350,000.00. After negotiations, which concluded
          prior to March 13, 2017, agreement was reached. The sale price
          and terms agreed to for MARZOLF’S purchase of SACKETT’S farm
          property was a $300,000.00 purchase price, $35,000.00 down
          payment and monthly payments of $1,000.00 for two years when
          the balance would be due. SACKETT agreed to accept monthly
          payments of less than $1,000.00 for a few months while MARZOLF
          paid off his truck.

          Marzolf argues that substantial evidence does not support the court’s

findings regarding the timing of the sale. He notes that Sackett’s testimony was

inconsistent and unclear regarding the specific dates on which the alleged

purchase and sale negotiations took place. In contrast, Marzolf testified that no

negotiations took place until after the quit claim deed was recorded and Sackett

suddenly began demanding payment. But Sackett specified that he and Marzolf

negotiated the terms of sale before the quit claim deed was signed on March 17,

2017. In addition, Groendyk testified that Marzolf was trying to buy the farm as

early as January 2017. And Castagno testified that Sackett spoke with him daily

during the week of March 13, 2017 about the financial aspects of the house sale.

          Marzolf also argues that his version of events was corroborated by

Kimberly Harrison of Columbia Bank. She testified that Marzolf came to her in

March 2017 seeking a home improvement loan for a property that had been

gifted to him and that he submitted the application on March 28, 2017. This

testimony does not materially conflict with Sackett’s testimony regarding what

Marzolf told him. Substantial evidence supports this finding.

          Marzolf next challenges finding of fact 14. This challenged finding of fact

states:

                                           ii
No. 78164-2-1/12

                  14. During the week of March 13, 2017, MARZOLF told
          SACKETT that he needed a quit claim deed for the farm property in
          order to obtain the bank loan for the purchase. SAC KETT was
          clearly eager to assist MARZOLF as he wanted the sale concluded.
          SACKETT agreed to give MARZOLF a quit claim deed but not for
          the purpose of a gift or to change the terms of the sale.

          Marzolf contends that Sackett’s testimony regarding the need to show a

quit claim deed to the bank to obtain a $35,000 down payment loan was not

credible, particularly in light of Harrison’s testimony that Marzolf applied for a

$1 50,000 home improvement loan. Again, we defer to the trial court’s findings

regarding the parties’ credibility. Harrison’s testimony regarding what Marzolf

told her is of no consequence in this regard.

          Marzolf next challenges finding of fact 13. This challenged finding of fact

states:

                 13. During the week of March 13, 2017, MARZOLF talked to
          SACKETT on the phone each day and told him of his efforts at
          Columbia Bank in Snohomish to obtain financing to purchase the
          property. During that time, neighbor Dr. Arthur Castagno visited
          daily with SACKETT, observed SACKETT on the phone with
          MARZOLF on several occasions and confirmed that SACKETT
          gave him a day by day description as to what was happening with
          the farm sale to MARZOLF.

          Marzolf argues that the record lacks substantial evidence to support a

finding that Marzolf spoke to Sackett about conversations with his bank during

the week of March 13, 2017. Again, this is an issue of credibility. For the same

reasons discussed above, we reject Marzolf’s contention.

          Marzolf also contends that substantial evidence does not support a finding

that Sackett spoke with Castagno about the terms of a property sale to Marzolf,

as opposed to some other individual. Marzolf is correct that the trial court

                                           12
No. 78164-2-1/13

sustained his objection to Castagno’s testimony regarding the identity of the

person Sackett was speaking to on the phone. However, when viewed in light of

the testimony of Sackett, it is reasonable to infer that Marzolf was the person on

the phone seeking to purchase the farm during that time frame. This finding of

fact is supported by substantial evidence.

          Marzolf next challenges finding of fact 20. This challenged finding of fact

states:

                 20. On March 19, 2017, MARZOLF contacted SACKETT
          and told him he was not going to pay for the farm property, that he
          now held the deed and he now owned the farm property. This
          communication led to an immediate and continuing objection by
          SACKETT.

          Marzolf contends that there is no evidence in the record that Marzolf

called Sackett on March 19, 2017, or that he reneged on an alleged unwritten

promise to pay for the farm. This is an issue of credibility that we will not review

on appeal.

          Marzolf next challenges finding of fact 24. This challenged finding of fact

states:

                  24. At the time of the execution of the quit claim deed,
          SAC KETT did not think he needed independent advice because he
          implicitly trusted MARZOLF.

          Marzolf contends that this finding is unsupported by substantial evidence

because there is no testimony from Sackett or any other witness that but for his

trust in Marzolf, Sackett would have sought independent advice before signing

the quit claim deed. However, as discussed above, substantial evidence

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No. 78164-2-1/14

supports the finding that Sackett’s actions were motivated by his long-standing

close relationship with Marzolf.

          Marzolf next challenges finding of fact 10. This challenged finding of fact

states:

                10. MARZOLF told SACKETT’S friend, Earl Groendyk, in
          January 2017 that he was trying to buy the farm property.

          Marzolf argues that Groendyk’s testimony that he was trying to buy the

farm in January 2017 conflicts with Sackett’s testimony that they started

discussing the matter in March 2017. But Sackett’s testimony revolved around

the parties’ negotiations regarding specific terms for the sale, not the general

topic of buying the farm. The testimony does not conflict. Substantial evidence

supports this finding.

          Lastly, Marzolf challenges conclusions of law 2, 3, 4, and 5. These

challenged conclusions of law state:

                 2. SACKETT has established by clear, cogent and
          convincing evidence that he never intended to make a gift of the
          farm property to MARZOLF. SACKETT executed the quit claim
          deed on March 17, 2017, solely for the purpose of assisting
          MARZOLF in obtaining financing for the purchase of the farm
          property. There was no donative intent and no valid gift.

                3. SACKETT has established by clear, cogent and
          convincing evidence the quit claim deed to MARZOLF was
          executed on March 17, 2017 as a result of undue influence exerted
          by MARZOLF upon SACKETT.

                4. The March 17, 2017, quit claim deed recorded under
          Snohomish County Auditor’s File No.201703170489 is not valid and
          should be set aside and voided.

                5. Title to the farm property as legally described in Exhibit A
          should be quieted in SACKETT.

                                            14
No. 78164-2-1/15

       Substantial evidence supports the trial court’s conclusion that clear,

cogent, and convincing evidence establishes that Sackett “never intended to

make a gift of the farm property to MARZOLF.” A valid gift requires an intention

of the donor to give. In re Marriacie of Zier, 136 Wash. App. 40, 47, 147 P.3d 624

(2006). Here, Sackett executed the quit claim deed solely to allow Marzolf to

obtain a down payment to purchase the farm. He had been attempting to sell the

farm to friends and neighbors on the same terms as he offered to Marzolf since

at least 2010. The farm was an important asset that Sackett intended to liquidate

to fund charitable donations via his estate plan. Sackett was known as a frugal

man who would not have given away the farm. And Sackett immediately and

continuously objected when he discovered that Marzolf had decided not to pay.

       Substantial evidence also supports the trial court’s conclusion that clear,

cogent, and convincing evidence establishes ‘the quit claim deed to MARZOLF

was executed.   .   .   as a result of undue influence exerted by MARZOLF upon

SACKETT.” The Restatement (Second) of Contracts defines undue influence as

“unfair persuasion of a party who is under the domination of the person

exercising the persuasion or who by virtue of the relation between them is

justified in assuming that that person will not act in a manner inconsistent with his

welfare.” Estates of Jones, 170 Wash. App. at 606 (quoting RESTATEMENT

(SEcoND) OF CONTRACTS         § 177(1) (AM.   LAW INsT. 1979)). Factors that give rise to

a suspicion of undue influence include a confidential or fiduciary relationship

between the parties, the donee’s active participation in the transaction, and

whether the donee received an unnaturally large part of the estate. Peters v.

                                              15
No. 78164-2-1/16

Skalman, 27 Wash. App. 247, 255, 617 P.2d 448 (1980). Other factors include the

age and mental and physical health of the donor, the nature of the relationship

between the parties, the naturalness of the gift, and the opportunity for exerting

undue influence. Kitsar Bank v. Denley, 177 Wash. App. 559, 571, 312 P.3d 711

(201 3).

           Here, the parties were not in a confidential or fiduciary relationship. But

Marzolf actively participated in the transaction, which gave him a large portion of

Sackett’s estate. This is particularly unnatural given that Sackett’s estate plan

provided that the bulk of his estate would go to charity, not to individuals. It is

uncontroverted that the parties had a close relationship. Sackett thought of

Marzolf as a son, and trusted him implicitly. Sackett is an elderly man who lives

alone. His mental faculties were intact, but at the time the quit claim deed was

executed, he had just gotten out of the hospital after breaking his hip and was

dependent on others for care and companionship, including Marzolf. These

factors provided Marzolf an opportunity to exert undue influence by telling

Sackett he needed a quit claim deed to get a loan to purchase the farm property.

       In sum, the trial court did not err in voiding the quit claim deed and

quieting title in the property to Sackett.

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                                             16