Caselaw Update: Court Addresses Undue Influence in Estate of Melter

Estate of Melter, 167 Wn. App. 285, 273 P.3d 991 (2012) is an interesting case, well authored by both the majority, and the separate concurrence.  It’s a must read for Washington trust and estate lawyers.  We think it is important because it addresses one beneficiary’s confidential relationship with the decedent and how that can affect his (or his opponent’s) burden of production and proof in a will contest where undue influence is alleged.

The case is also important in that it emphasizes testamentary capacity as an important factor in distinguishing mere influence, which is nugatory, from undue influence, which is consequential.  Here are the basic facts: Continue reading

King County Probate Gone Wild!

When a court opinion begins, “…. what should have been a simple estate and trust matter became protracted and contentious,” you know you’re in touble.

The Court of Appeals recently published Estates of Foster, 165 Wn. App. 33 (2011).  In this case the Executor and his brother teamed up to distribute from their parents’ estates disproportionately to themselves rather than to the parents’ grandchildren trust beneficiaries as set forth in the parents’ trust documents.

The case is significant for a couple reasons.  First, the court confirms that the Executor was not entitled to a jury trial because, while his fiduciary breach was the gravamen of the case, it was still a probate/trust matter, and restoration of the stolen funds, as opposed to general damages were sought.  The former types of cases don’t get juries; the latter do.

The case is also significant becuase of how the court treats the statute of limitations.  The grandchildren brought their claim more than three-years after the alleged breach.  The statute of limitations for fiduciary breach claims is three-years.  The court allowed the claim, applying the “discovery rule” without much analysis other than finding that the breach could not have been discovered earlier because of the Executor’s failure to cooperate when the grandchildrens’ early information requests.

Did Ryan O’Neal Steal Painting From Farrah Fawcett’s Estate?

This is the question that is a subject of a Los Angeles County Superior Court lawsuit between the University of Texas and Fawcett’s former boyfriend, Ryan O’Neal.  Fawcett left her art collection to the University of Texas when she died.  Warhol Painting of Farrah FawcettThe Universtity of Texas contends there were two Andy Warhol paintings in Fawcett’s collection.  When she died, the University received one painting, but not the other.  The other painting, pictured left, is in Ryan O’Neal’s living room.  The University of Texas is now suing O’Neal over the painting.  O’Neal defends that Warhol gave the painting to him, not Fawcett.  The lawsuit started out in federal court (here is the complaint), was dismissed, and is now in Los Angeles County Superior Court.

Proving that Fawcett (or her trust) owned the painting at the time of her death could be tricky.  First, unlike financial accounts, cars and real property, personal property is usually not “titled” with a deed or certificate of title or registration.  Second, the Deadman’s Statute (in Washington, RCW 5.60.030) precludes people from testifying about what the decedent told them when they stand to gain from it.  The University of Texas’s lawyers will need to resort to insurance records (likely the paiting was insured), photographs and witness recollections to prove their case.

This type of conflict is not uncommon in estates (In Washington, the dispute is sometimes whether the property was “community property” giving the spouse an undivided 1/2 interest, or “separate property” where the spouse has no interest, other than perhaps a small amount allowed by statute).  The best way to avoid these disputes is to keep an updated inventory of personal property assets (really, all assets should be inventoried), and if/when items are given away, indicate so and to whom it was given.  And remember, personal property includes intangible items, such as digital photographs, royalty rights, domain name registrations, etc.  And while you’re at it, keep an inventory of email accounts and passwords.  (see recent Seattle Times article on this, quoting our former colleague, Wendy Goffe, from Graham & Dunn).

Hines v. Wolf: File Your Creditor’s Claim Now, Argue Later

Must a landlord file a creditor’s claim against a lease guarantor’s estate in order to be able to later enforce it, even when there is no default in the underlying lease at the time of death?

Answer:  Yes if you want to later enforce it.  According to the Washington Court of Appeals in Hines REIT Seattle Design Center, LLC v. Wolf, __ Wn. App. __ (Oct. 24, 2011), failure to file a creditor’s claim will void ALL the decedent’s obligations, including those “not yet due.”

Here’s what happened:  Hines REIT Seattle Design Center, LLC leased commercial space to Stephen Earls Corporation.  The company’s president, Stephen Earl, guarantied the lease.  Stephen Earl died.  His estate published a notice to creditors, and sent Hines the notice.  Hines ignored it.  After all, the tenant corporation was not in default on its lease, so why file a creditor’s claim for an obligation that is not due? Continue reading