Amburgey v. Volk

8 Wash.App.2d 779

440 P.3d 1069

IN RE the Committed Intimate Relationship of: Christine AMBURGEY, Respondent, and Christopher VOLK, Petitioner.

No. 49389-6-II

Court of Appeals of Washington, Division 2.

Filed May 7, 2019

Matthew D. Taylor, McKinley Irvin, 1501 4th Ave. Ste. 1750, Seattle, WA, 98101-3611, for Petitioner.

Daniel W. Smith, Campbell Barnett PLLC, 317 S Meridian, Puyallup, WA, 98371-5913, for Respondent.

PUBLISHED OPINION

Maxa, C.J.¶1 Christopher Volk seeks review of the trial court’s denial of his summary judgment motion in Christine Amburgey’s lawsuit alleging that she and Volk were in a committed intimate relationship (CIR). Amburgey claimed an interest in certain property Volk owned based on her and Volk living and raising their children together for 20 years before separating. The issue here is whether judicial estoppel precludes Amburgey from asserting her CIR claim.

¶2 While she and Volk were still living together, Amburgey filed a bankruptcy petition in federal court that did not list as assets any interest in Volk’s property or a potential CIR claim regarding that property. The bankruptcy court discharged her debts. Amburgey subsequently filed a complaint alleging that she and Volk had been in a CIR and seeking an equitable distribution of property from the CIR. Volk asserted that the omission of the alleged CIR property and potential CIR claim as assets in the bankruptcy petition precluded Amburgey’s CIR claim under judicial estoppel, and also asserted that Amburgey did not have standing because of the bankruptcy. He filed a summary judgment motion on that issue, which the trial court denied.

¶3 Amburgey subsequently filed a motion to reopen the bankruptcy case and submitted an amended schedule disclosing the CIR claim. The bankruptcy trustee later filed a report stating that no nonexempt property was available for distribution from the estate, and the bankruptcy court again closed the case.

¶4 We hold that the trial court did not err in denying Volk’s summary judgment motion because (1) judicial estoppel does not apply, particularly in light of Amburgey’s amended bankruptcy schedule that disclosed her CIR claim; and (2) Amburgey has standing to bring a CIR cause of action because the CIR cause of action was not the property of the bankruptcy estate once the bankruptcy case was closed. Accordingly, we affirm the trial court’s order denying Volk’s summary judgment motion.

FACTS

¶5 Between 1994 and January 2014, Amburgey and Volk lived and raised two children together in a house that Volk had purchased before the relationship began. Volk apparently accrued retirement benefits during this time. Volk and Amburgey never married and did not comingle their finances.

¶6 In November 2013, Amburgey filed a voluntary bankruptcy petition, which she signed under oath. She filed as an individual and did not identify a spouse or joint debtor. As part of the petition, Amburgey filed schedules of her assets that included small amounts in bank accounts, miscellaneous personal property, and vehicles. She listed no real property. The primary debts she listed were $ 5,000 owed to the Internal Revenue Service and over $ 30,000 owed on several credit cards.

¶7 The real property schedule directed Amburgey to list all real property in which she had "any legal, equitable, or future interest, including all property owned as ... community property." Clerk’s Papers (CP) at 23. Amburgey stated "None" on this schedule and did not list an interest in the house where she lived with Volk. CP at 23.

¶8 The personal property schedule directed Amburgey to list "all personal property ... of whatever kind." CP at 24. The schedule included a specific question about interests in retirement accounts, and Amburgey marked "None." CP at 25. She did not list any interest in Volk’s retirement account. The schedule also included a specific question about "[o]ther contingent and unliquidated claims of every nature," and Amburgey marked "None." CP at 25. She did not list a potential CIR claim against Volk.

¶9 The bankruptcy court discharged Amburgey’s debts in February 2014. No distribution was made to Amburgey’s creditors. The bankruptcy case was closed in March.

¶10 Amburgey moved out of the house she shared with Volk in January 2014. In 2016, Amburgey filed a complaint asking the court to find that she and Volk had been in a CIR between 1994 and January 2014 and to order an equitable distribution of the property from the CIR.

¶11 Volk filed a motion for summary judgment, arguing that (1) judicial estoppel barred Amburgey from asserting an interest in Volk’s property or a CIR claim regarding that property because she did not list the property or a CIR claim as assets in her bankruptcy schedules, and (2) she lacked standing to bring a CIR claim. The trial court denied Volk’s summary judgment motion, ruling that judicial estoppel did not apply. Volk filed a motion for discretionary review of the trial court’s ruling, which a commissioner of this court granted. Ruling Granting Review, In re the Committed Intimate Relationship of Amburgey , No. 49389-6-II (Wash. Ct. App. Jan. 17, 2017).

¶12 After the parties had filed their opening appellate briefs, Amburgey filed a motion in bankruptcy court to reopen her case to file amended asset schedules. The bankruptcy court entered an order reopening the case.

¶13 Amburgey then filed an amended schedule and marked "Yes" for the question about "[o]ther contingent and unliquidated claims of every nature." Smith Decl., Ex. A. For an explanation, she stated,

Debtor may have an equitable claims [sic] against assets held as separate property by her partner, Christopher Volk, in the nature of claims for residential real estate and retirement funds, all of which would be exempt. Debtor does not believe these claims existed or arose at the time of her Chapter 7 filing under state law but only upon a dissolution of her committed intimate relationship that occurred after filing and discharge. This amendment is for precautionary purposes in the event the case trustee believes there are CIR assets that are [the] property of this bankruptcy estate. This case has been reopened for this purpose.

Smith Decl., Ex. A (capitalization omitted). She also claimed as exempt from the bankruptcy estate her interest in Volk’s house up to $ 22,975 and her interest in Volk’s retirement funds in an unknown amount.

¶14 On February 9, 2018, the bankruptcy trustee filed a report stating that "there is no property available for distribution from the estate over and above that exempted by law." Smith Decl., Ex. B. On February 27, the bankruptcy court entered an order closing the reopened case.

¶15 Amburgey filed a motion to supplement the record with the bankruptcy court pleadings and for this court to take judicial notice of those pleadings. A commissioner of this court denied the motion but stated that the court would take judicial notice of the bankruptcy court’s record. Comm’r’s Letter Ruling (Oct. 2, 2018).

ANALYSIS

A. LEGAL BACKGROUND

1. Standard of Review

¶16 We review a trial court’s decision on a summary judgment motion de novo. Zonnebloem, LLC v. Blue Bay Holdings, LLC , 200 Wash. App. 178, 182, 401 P.3d 468 (2017). Summary judgment is appropriate if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Id. ; CR 56(c). A genuine issue of material fact exists if reasonable minds could disagree on the conclusion of a factual issue. Zonnebloem , 200 Wash. App. at 183, 401 P.3d 468. We view all facts and reasonable inferences drawn from those facts in the light most favorable to the nonmoving party. Id. at 182, 401 P.3d 468.

2. Nature of CIR Claim

¶17 A CIR "is a stable, marital-like relationship where both parties cohabit with knowledge that a lawful marriage between them does not exist." Connell v. Francisco , 127 Wash.2d 339, 346, 898 P.2d 831 (1995). "The CIR doctrine is a judicially created doctrine used to resolve the property distribution issues that arise when unmarried people separate after living in a marital-type relationship and acquiring what would have been community property had they been married." In re Kelly , 170 Wash. App. 722, 732, 287 P.3d 12 (2012). This doctrine, which is based on equitable principles, protects the interests of unmarried couples who acquire property during their relationship by preventing the unjust enrichment of one at the expense of the other when the relationship ends. In re Pennington , 142 Wash.2d 592, 602, 14 P.3d 764 (2000).

¶18 Courts use a three-prong analysis for disposing of property when such a marital-like relationship ends: (1) determine whether a CIR existed; (2) if a CIR existed, evaluate each party’s interest in the property acquired during the relationship; and (3) make a just and equitable distribution of that property. Id.

¶19 If the trial court determines that a CIR existed, the court may equitably divide the property acquired during the relationship in a manner similar to marriage dissolution proceedings. Connell , 127 Wash.2d at 351, 898 P.2d 831. Property acquired during a CIR is presumed to be owned by both parties, although this presumption can be rebutted. Id. However, marriage dissolution principles are applied only by analogy. Id. Courts have declined to characterize a CIR as a de facto common law marriage. Pennington , 142 Wash.2d at 601, 14 P.3d 764.

¶20 The CIR doctrine applies only when the parties have ended their relationship.

Kelly , 170 Wash. App. at 734, 287 P.3d 12. And application of marriage principles by analogy applies only once the existence of a CIR has been established. Id. at 737, 287 P.3d 12. As a result, "[i]t is inappropriate to ascribe common law, marriage-related property rights to those who have not timely proved that there is a CIR in the first place." Id.

B. APPLICATION OF JUDICIAL ESTOPPEL

¶21 Volk argues that the trial court should have ruled that judicial estoppel applies to bar Amburgey from...