Bryant v. BryantBryant v. Bryant
- Reporters:
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- Before:
- Johnson
This case presents the issue of whether a power of attorney authorizes gift transfers of community property. We hold a power of attorney does not permit gifts of community property unless such authority is expressly provided in the instrument.
Facts
Elaine and Frederick Bryant were married in 1955. The Bryants established Halo Homes, Inc., a land development
her use and benefit in the execution of real estate contracts, assignments of real estate contracts, vendors or vendees interests, real estate mortgages, chattel mortgages, construction contracts or other instruments or papers related to the business or community property interests of said ELAINE J. BRYANT . . ..
Clerk’s Papers, at 11 (Kitsap County cause 89-2-00761-6). Frederick used the power of attorney extensively over the next 18 years. In February 1985, Frederick transferred the stock of Halo Homes to Wendy Bryant, Frederick and Elaine’s daughter.
On July 10, 1985, Elaine separated from Frederick. She consulted an attorney about divorcing Frederick. The attorney advised Elaine to revoke the power of attorney, but he did not pursue the revocation and it remained in effect. Later, Elaine brought a malpractice claim against her attorney for failing to revoke the power of attorney. That claim was settled in April 1991.
Frederick created an irrevocable trust (Trust) in favor of the eight Bryant children on July 14, 1985, and appointed Wendy as trustee. Frederick then conveyed real property to the Trust, including the family home.
On July 26, 1985, Elaine filed for divorce. Frederick Bryant was restrained from transferring any of the property belonging to either him or Elaine during the pendency of the divorce proceedings. However, Frederick transferred several additional properties to Halo Homes and the Trust. The documents were executed for no consideration by Frederick individually and as attorney in fact for Elaine. Frederick and Elaine reconciled in September 1985, but separated again, this time permanently, in March 1986.
In April 1989, Elaine filed this action against Frederick Bryant, Wendy Bryant, Halo Homes, Joseph Tree, Inc., the Trust, and other entities. The complaint alleged Frederick had transferred property to the various Defendants, depriving her of her share of the community property. She requested imposition of a constructive trust and damages.
Halo Homes and the Trust sought summary judgment. They claimed: (1) the transfers were properly made under the power of attorney, (2) even if the transfers were not authorized, Elaine subsequently ratified them, and (3) the doctrine of judicial estoppel prohibited Elaine from challenging the legality of the transfers because in the malpractice action against her previous attorney, she had asserted the transfers were “legally” done. The trial court granted summary judgment in favor of Halo Homes and the Trust in May 1991.
Frederick and Wendy separately moved for summary judgment under the same theories as Halo Homes and the Trust. The trial court granted their motions on the basis of judicial estoppel.
Elaine appealed both summary judgment orders, and the appeals were consolidated. In an unpublished opinion, the Court of Appeals held: (1) the trial court erred in granting summary judgment because the elements of judicial estop-pel were not satisfied, (2) the general power of attorney did not authorize Frederick to make gifts of community property, and (3) Elaine had not ratified the gifts of community property made under the power of attorney.
Analysis
Elaine contends Frederick was without authority to make gratuitous transfers of community property because the power of attorney she signed did not contain specific authorization to make gifts. The Court of Appeals agreed and therefore reversed the trial courts’ summary judgment orders. We affirm.
In Washington, the general rule is that neither spouse may transfer real or personal community property by gift without the express or implied consent of the other.
A husband may make and execute a letter of attorney to the wife, or the wife may make and execute a letter of attorney to the husband authorizing the sale or other disposition of his or her community interest or estate in the community property . . ..
Thus,
Wendy and Frederick argue the broad language of
Whether or not the power of attorney must contain specific authorization is answered by the general rules
The rule of strict construction is particularly applicable to powers of attorney relating to real property. Estate of Springer, 97 Wash. at 551. An attorney in fact has no power to execute any conveyance other than that which might fall within the strict definition of the terms of his or her power. State v. Wallace, 97 Wn.2d 846, 851, 651 P.2d 201 (1982); Dimmick v. Sprinkel, 59 Wash. 329, 331, 109 P. 1018 (1910).
In Anderson v. Bigelow, 16 Wash. 198, 47 P. 426 (1896), a wife designated her husband attorney in fact, authorized “to sell her real estate, receive payment therefor, and make conveyances thereof”. Anderson, 16 Wash. at 199. The husband offered to dedicate the property to the City. Despite the broad discretionary authority conferred by the power of attorney, the court held the instrument did not authorize the husband to do anything but sell the land. “The general power to sell did not authorize the person acting thereunder to make a dedication for street purposes”. Anderson, 16 Wash. at 200.
The rule of strict construction also flows from the fiduciary principles governing the agent spouse. The agent becomes a fiduciary upon acquiring dominion and control over the principal’s property.
Moon v. Phipps,
67 Wn.2d 948, 955, 411 P.2d 157 (1966). In handling the principal’s property, the fiduciary is bound to act with the utmost good faith
Other jurisdictions agree gift transfers or transfers without substantial consideration inuring to the benefit of the principal violate the scope of authority conferred by a general power of attorney to sell, exchange, transfer, or convey property for the benefit of the principal. E.g., Shields v. Shields, 200 Cal. App. 2d 99, 19 Cal. Rptr. 129 (1962); Aiello v. Clark, 680 P.2d 1162 (Alaska 1984); Fierst v. Commonwealth Land Title Ins. Co., 499 Pa. 68, 451 A.2d 674 (1982); Gaughan v. Nickoloff, 28 Misc. 2d 555, 214 N.Y.S.2d 487 (1961); King v. Bankerd, 303 Md. 98, 492 A.2d 608 (1985).
The power of attorney signed by Elaine authorized a variety of transactions for her use and benefit. The document authorized Frederick to lease, let, demise, bargain, sell, remise, release, convey, mortgage, and hypothecate. Nowhere did the document refer to gratuitous transfers. Under the rule of strict construction, the document did not authorize gratuitous transfers by Frederick as attorney in fact for Elaine.
We hold a power of attorney must contain specific authorization for gift transfers of community property. Elaine executed a power of attorney, which did not specifically authorize Frederick to make gifts of community property. Therefore, his transfers of community property were unauthorized. Because we reach our result by applying the general rules applicable to powers of attorney, it is unnecessary for us to address the Respondent’s argument that Frederick’s transfers also violated
The judgment of the Court of Appeals is affirmed and the case remanded for further proceedings consistent with this opinion.
After modification, further reconsideration denied December 2, 1994.