Dunn v. Bremerton Pilots Ass'n (BPA)

DEBORAH DUNN, an individual, Appellant, v. BREMERTON PILOTS ASSOCIATION (BPA),a Washington Non-profit Corporation, Respondent.

No. 51676-4-II

COURT OF APPEALS OF THE STATE OF WASHINGTON DIVISION II

November 5, 2019

UNPUBLISHED OPINION

MAXA, C.J. - Deborah Dunn appeals the trial court's summary judgment dismissal of her conversion and unjust enrichment claims against Bremerton Pilots Association (BPA), a charitable organization that provides aviation-related scholarships. Dunn was the personal representative of Yukiko Howell's estate, and BPA was a beneficiary under Howell's will.

In October 2013, Dunn mistakenly made distributions to BPA and other beneficiary charitable organizations in amounts greater than provided in the will. In December 2013, the probate court entered an order stating that Dunn personally would be required to pay the excess distribution amounts if she could not recover those amounts from the charities. BPA was not notified of the distribution issue at that time. In March 2015, the successor administrator of the estate sent BPA a letter requesting the return of the overpaid amounts. BPA responded that the funds already had been distributed to scholarship recipients.

In August 2015, the probate court entered judgment against Dunn for the amount of the overpayments. Dunn paid the judgment to the estate and received an assignment from the estate of all potential claims against the charities.

In November 2017, Dunn - as assignee of the estate - filed a lawsuit against BPA for the amount of the overpayment, asserting claims for conversion and unjust enrichment. The trial court granted summary judgment in favor of BPA based on a ruling that Dunn's lawsuit had not been filed before the expiration of the three-year statute of limitations for those claims.

We hold that the estate's claim against BPA accrued in December 2013, and therefore that the statutes of limitations bar Dunn's claims for conversion and unjust enrichment. Accordingly, we affirm the trial court's summary judgment order dismissing Dunn's conversion and unjust enrichment claims.

FACTS

Howell died in February 2013 and her last will and testament was admitted to probate. The will contained a bequest to five charities, including BPA. The bequest stated, "I give, devise, and bequeath to the five following organizations an amount equal to 10 percent (10%) of the value of my estate at the time of my death." Clerk's Papers (CP) at 45. The will bequeathed 25 percent of the estate and all remaining property to Howell's grandchildren.

In September, Dunn was appointed to serve as personal representative of Howell's estate. Dunn determined that the estate assets totaled $151,000. In October, she distributed $15,000 toeach of the five charitable organizations, including BPA. The attorney for Howell's children and grandchildren immediately notified Dunn that the distributions to the charities were incorrect.

In December, Howell's children and grandchildren petitioned the probate court for an order to show cause why Dunn should not be removed as personal representative. They argued that Dunn mistakenly had interpreted the will and had overpaid the five charities, pointing out that the will provided for a combined total of 10 percent of the estate to be paid to the charities, not 10 percent each. During oral argument, the probate court addressed Dunn's payment of 10 percent of the estate to each of the charities. The court stated, "And if [Dunn] has distributed 10% to each of the charitable organizations as opposed to 10% for all of them, she's going to end up paying it herself if she can't or we can't get the money back from them." CP at 74.

The court entered an order removing Dunn as personal representative of the estate and appointing Karen Darrin as the successor personal representative. The order also stated, "If Ms. Darrin is unable to recover the excess $50,000.00 Ms. Dunn paid to the charities, Ms. Dunn will personally pay that sum to the estate." CP at 85. However, Howell's estate did not notify BPA that there was a problem with the amount of the distribution.

BPA is nonprofit organization with a goal of promoting safe, fun, general aviation flying. BPA's primary expenditure each year is funding scholarships for young men and women who want to obtain private pilot licenses. Between late 2013 and late 2014, BPA used the money it received from Howell's estate to fund five youth aviation scholarships. By the end of 2014, all the funds BPA received from the estate had been disbursed.

In March 2015, the successor administrator of Howell's estate notified BPA that Dunn had misinterpreted the will and requested that BPA return the overpayment of $12,018.03 to theestate. This letter was BPA's first notice that there was an issue with the distribution to BPA. BPA responded that the $15,000 distribution already had been used to fund scholarships and that there was no money left to return.

In August, the probate court entered judgment against Dunn for the amount of the overpayments to all five of the charities and ordered her to pay that amount to the estate. The court entered a finding of fact that the five charities each were entitled to a combined total of 10 percent of the estate - 2 percent for each charity - and that Dunn had overpaid them by $12,018.03 each. Dunn paid the judgment and the estate assigned its potential claims against the charities to her. In September, Dunn demanded payment from BPA in writing. BPA did not return the funds.

In November 2017, Dunn - as assignee of the estate - filed a complaint against BPA in which she sought a judgment in the amount of $12,018.03. She asserted two claims, conversion and unjust enrichment.

BPA filed a summary judgment motion. BPA argued that Dunn's claims were barred by the applicable statutes of limitations, that Dunn's conversion claim failed as a matter of law, and that she was equitably estopped from recovering money from BPA. Dunn also filed a summary judgment motion, arguing that her claims for conversion and unjust enrichment were properly stated and not time barred.

The trial court granted BPA's summary judgment motion based on the statutes of limitations, denied Dunn's motion, and dismissed Dunn's claims. Dunn appeals the trial court's summary judgment order.

ANALYSIS

A. SUMMARY JUDGMENT STANDARD

We review a trial court's ruling on summary judgment de novo. Schibel v. Eymann, 189 Wn.2d 93, 98, 399 P.3d 1129 (2017). "Summary judgment is appropriate where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law." Id.; see also CR 56(c). When evaluating the evidence on summary judgment, we must view all facts and reasonable inferences therefrom in the light most favorable to the nonmoving party. Piris v. Kitching, 185 Wn.2d 856, 861, 375 P.3d 627 (2016). A factual issue may be resolved as a matter of law on summary judgment if reasonable minds could reach only one conclusion. Halme v. Walsh, 192 Wn. App. 893, 901, 370 P.3d 42 (2016).

B. STATUTE OF LIMITATIONS

Dunn argues that the trial court erred in ruling that the three-year statutes of limitations barred her conversion and unjust enrichment claims. She contends that the claims did not accrue at the earliest until the estate's demand in March 2015 that BPA return the excess distribution, which was less than three years before she filed suit. BPA argues that the statutes of limitations bar Dunn's claims because those claims accrued in December 2013, when the probate court first informed the estate that the distributions to the charities were incorrect. We agree with BPA.

1. Limitation Periods

RCW 4.16.080(2) provides that "[a]n action for taking, detaining, or injuring personal property, including an action for the specific recovery thereof, or for any other injury to the person or rights of another" shall be commenced within three years. This three-year statute oflimitations applies to conversion claims. Hudson v. Condon, 101 Wn. App. 866, 872, 6 P.3d 615 (2000).

RCW 4.16.080(3) provides that "an action upon a contract or liability, express or implied, which is not in writing, and does not arise out of any written instrument" shall be commenced within three years. This three-year statute of limitations applies to unjust enrichment claims. Davenport v. Wash. Educ. Ass'n, 147 Wn. App. 704, 737, 197 P.3d 686 (2008).

The statutory limitations period begins to run when the plaintiff's claim accrues. RCW 4.16.005. In general, a claim accrues and the statute of limitations begins to run " 'when the party has the right to apply to a court for relief.' " Deegan v. Windermere Real Estate/Ctr.-Isle, Inc., 197 Wn. App. 875, 892, 391 P.3d 582 (2017) (quoting 1000 Va. Ltd. P'ship v. Vertecs Corp., 158 Wn.2d 566, 575, 146 P.3d 423 (2006)). A plaintiff acquires the right to apply for relief when he or she can establish each element of the action. Deegan, 197 Wn. App. at 892.

2. Dunn's Status as Assignee

Dunn sued BPA as the estate's assignee, not in her personal capacity. As assignee of the estate's claims, Dunn stepped into the shoes of the estate. See Selene RMOF II REO Acquisitions II, LLC v. Ward, 189 Wn.2d 72, 80-81, 399 P.3d 1118 (2017). Therefore, the issue here is when the estate's claims accrued.

3. Conversion Claim

a. Legal Principles

Conversion occurs when a person, without lawful justification, willfully interferes with chattel belonging to another person. Davenport, 147 Wn. App. at 721. There are two types of conversion: unlawfully taking or receiving chattel and unlawfully retaining chattel. Alhadeff v.Meridian on Bainbridge Island, LLC, 167 Wn.2d 601, 619, 220 P.3d 1214 (2009). Both types result in a deprivation of the rightful owner's possession of the chattel. Id.

With regard to retention of chattel, a person can be liable for conversion for refusing the plaintiff's demand to surrender possession of a chattel when the plaintiff is entitled to immediate possession. Judkins v....