Casterline v. Roberts
168 Wash. App. 376
Wash. Ct. App.2012Background
- Theresa Roberts formed a revocable living trust naming Denise as trustee; Denise used $153,000 of trust funds to build a Kelso home for Theresa, Denise and husband Wilson.
- Denise transferred the Kelso property to Wilson and a California condo to her brother-in-law for no consideration during guardian proceedings; transfers were made without consideration.
- Court appointed a temporary guardian and cotrustees; guardian later sought to set aside the transfers and impose an equitable lien for $153,000.
- Trial court found Denise breached fiduciary duties by self-dealing and commingling funds, and concluded transfers were fraudulent; homestead exemption did not apply.
- Court held Denise’s transfers were fraudulent under the Uniform Fraudulent Transfer Act and imposed a $153,000 equitable lien on the Kelso property, denying the homestead exemption defense.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the equitable lien was proper given Denise's discretion to use trust funds | Roberts contends Denise could use funds for Theresa’s care | Roberts argues lien improperly imposed despite discretionary authority | Affirmed the equitable lien. |
| Whether the Kelso transfer was fraudulent under the UFTA | Roberts asserts transfers were to hinder, delay, or defraud creditors | Roberts argues transfers lacked equivalent value and were fraudulent | Transfers found fraudulent; lien upheld, exemption not applicable. |
| Whether the automatic homestead exemption protects the property | Roberts argues exemption should shield the property | Roberts cannot shield property acquired with wrongfully obtained funds | Homestead exemption did not apply to the $153,000 transfer. |
Key Cases Cited
- Webster v. Rodrick, 64 Wn.2d 814 (1964) (homestead cannot be used to shield property purchased with fraudulently obtained funds)
- Clearwater v. Skyline Construction Co., 67 Wn. App. 305 (1992) (fraudulent transfer can be upheld even when part of construction dispute)
- Fed. Intermediate Credit Bank of Spokane v. O/S Sablefish, 111 Wn.2d 219 (1988) (equitable lien for funds misappropriated from trust)
- In re Petrie, 105 Wn. App. 268 (2001) (trustee’s mingling of funds breaches fiduciary duty)
- Moulden & Sons, Inc. v. Osaka Landscaping & Nursery, Inc., 21 Wn. App. 194 (1978) (distinguishes findings of fact from conclusions of law)
- Cook v. Brateng, 158 Wn. App. 777 (2010) (trustee must act in beneficiaries’ interests)