In the Matter of the Trust of: Lisa Dawn Lewis
37972-8
| Wash. Ct. App. | Aug 24, 2021Background
- Lisa Dawn Lewis (grantor & beneficiary) signed an irrevocable special-needs trust in Aug. 2017 drafted by attorney John Tracy; Kitsap County Superior Court approved the trust Aug. 11, 2017.
- Lewis receives SSDI/Medicare and had received Medicaid; her father died May 2017 and Lewis expected an inheritance.
- Initial trustee Michael Torell was removed (felony conviction); successor trustee Jenifer Mick was appointed Apr. 27, 2018 and the estate deposited $60,949.70 into the trust June 1, 2018.
- Lewis moved (May 2019) to terminate the trust arguing lack of personal jurisdiction, duress/coercion, lack of counsel/guardian ad litem, and that the trust was unnecessary to protect benefits; she also objected to the trustee’s accounting.
- Trial court denied termination, approved the accounting, and imposed CR 11 sanctions (reduced) largely charged to the trust and, after reconsideration, awarded fees to several attorneys (including some who were nonparties/witnesses).
- On appeal the court affirmed denial of termination and approval of the accounting, but reversed sanctions awarded to nonparty attorney-witnesses and vacated awards where counsel agreed to waive fees.
Issues
| Issue | Plaintiff's Argument (Lewis) | Defendant's Argument (Trust/Mick/Hall) | Held |
|---|---|---|---|
| Whether trial court lacked personal jurisdiction over Lewis and whether the trust should be terminated | Lewis: April 2018 orders improperly funded trust without service; she never consented to transfer and signed under coercion/duress | Defs: Lewis signed and approved the original trust (Aug. 2017) which expressly contemplated receiving inheritance; no service or order was needed to accept the inheritance into a preexisting trust | Held: Denied. Lewis consented by signing the trust; restatement/Schedule A did not compel funding; no jurisdictional defect to terminate trust. |
| Whether Lewis signed under duress or required independent counsel/guardian ad litem | Lewis: Coerced by estate attorneys, didn’t carefully read document, lacked counsel; Matson protections should apply | Defs: No duress — multiple opportunities, explained trust to Lewis, no court had found incompetence; Matson (prenup law) inapplicable | Held: Denied. Evidence did not show duress; Matson inapposite. |
| Whether trial court erred in approving trustee Jenifer Mick’s accounting | Lewis: Mick failed fiduciary duties by not investigating benefit status and by improperly refusing/disallowing certain disbursements | Defs: Record shows Mick acted reasonably; Lewis cites no legal authority or identified fiduciary breach | Held: Denied. Lewis failed to develop argument or cite authority; no reversible error. |
| Whether CR 11 sanctions (attorney fees) could be awarded to nonparty attorney-witnesses | Lewis: Motion not baseless; court failed to give CR 11 notice; CR 11 awards limited to parties, so nonparty witnesses (including attorneys) cannot recover fees | Defs/Mick: Award appropriate to compensate counsel responding to frivolous motion; TEDRA (RCW 11.96A.150) argued below/footnoted on appeal as alternative authority | Held: Reversed as to fees awarded to nonparty attorney-witnesses (Hall & West and Carol Rainey). Court held CR 11 does not permit awarding attorney-fee expenses to nonparties; awards to current trustee counsel were vacated where counsel waived recovery on appeal. No appellate fees awarded against Schafer. |
Key Cases Cited
- W.J. Lake & Co. v. King County, 4 Wn.2d 651 (1940) (nonparty/amicus not entitled to recover costs or fees).
- Roberts v. Bechtel, 74 Wn. App. 685 (1994) (denying fee recovery to a nonparty insurer; nonparties generally cannot collect litigation fees).
- G.W. Equip. Leasing, Inc. v. Mt. McKinley Fence Co., 97 Wn. App. 191 (1999) (attorney cannot recover fees on behalf of a nonparty if not properly claiming fees in own capacity).
- In re Marriage of Matson, 107 Wn.2d 479 (1986) (prenuptial agreement context requiring procedural protections — court held Matson inapplicable here).
- Tiffany Family Trust Corp. v. City of Kent, 155 Wn.2d 225 (2005) (standards for finding frivolous appeal and imposing sanctions).
- In re Marriage of Lee, 176 Wn. App. 678 (2013) (an appeal deemed frivolous must be devoid of any debatable issue; frivolity assessed as a whole).