Prentice v. Prentice

In the Matter of the Marriage of JENNELL PRENTICE, Respondent/Cross-Appellant, v. ANTHONY PRENTICE, Appellant/Cross-Respondent.

No. 84232-3-I

Court of Appeals of Washington, Division 1

December 27, 2022

UNPUBLISHED OPINION

Smith A.C.J.

Anthony Prentice and Jennell Endrizzi (f/k/a Prentice) finalized their dissolution in 2009. The dissolution decree ordered the parties to split the net proceeds from the sale of the house without providing a deadline for the sale, and awarded the house to both Prentice and Endrizzi as tenants in common.

Eleven years later, Endrizzi filed a motion to enforce the dissolution decree and requested that the court order Prentice to pay her one-half the equity in the home by a date certain or order Prentice to place the property for sale to comply with the terms of the decree. The trial court ordered the sale of the home and for the parties to split the equity presently in the house with additional offsets awarded to Prentice for house upkeep and maintenance. Because Endrizzi executed a quit claim deed conveying her interests in the house to Prentice after the entry of the dissolution order but before she began this lawsuit, we reverse.

FACTS

Anthony Prentice and Jennell Endrizzi finalized their dissolution in July 2009. The dissolution decree awarded both parties as separate property "[o]ne-half net proceeds from the sale of the family home" and awarded Prentice "[a]n additional $2,500 above [his] one-half net proceeds." The decree provided that the parties were to remain tenants in common and awarded Prentice permission to continue to reside in the home. It also provided that "both parties will be considered to have the home as their principal residence for capital gains purposes." It ordered that Prentice would pay the mortgage until the home sold and that Endrizzi would assume other community debts.

The decree did not provide a timeline for when the home was to be sold. However, neither party disputes that they intended to sell the home shortly after the dissolution was finalized. Indeed, it can be inferred from the language in the decree that this was the court's understanding too; for example Endrizzi was awarded the family refrigerator, to be delivered within ten days of the sale.

After the dissolution, Prentice remained in the home and Endrizzi moved out. The parties tried to sell the home in the years following but were unsuccessful, due in part to an economic downturn. Both parties endured financial struggles in the following years. Prentice fell behind on mortgage payments and was in danger of foreclosure and Endrizzi filed for bankruptcy in 2011.

In 2012, Endrizzi signed a quit claim deed conveying all her interest in the family home to Prentice. The parties do not dispute that Endrizzi executed the quit claim deed on her own volition and that Prentice did not request the deed. They do however, dispute the intent and effect of the quit claim deed. Endrizzi maintains that she executed the quit claim deed so that Prentice and Endrizzi's father (who lived next door) could negotiate the terms of a well agreement and so that Prentice could sell the home while Endrizzi lived out-of-state. Prentice contends that Endrizzi did not communicate any of these reasons with him; rather, Endrizzi executed the deed without any prior discussions or agreements as to the parties' intended course of action. Endrizzi admits that Prentice "did not ask for the quit claim deed and [the parties] did not discuss it."

Soon thereafter, Endrizzi moved to Minnesota to start a new job. In the meantime, Prentice assumed full responsibility for the couple's two younger children and continued working with his bank to avoid foreclosure. In 2013, the bank approved Prentice's hardship application and he was able to refinance the home.

Seven years later, in 2020, Endrizzi filed an action to enforce the dissolution decree. She claimed she tried to convince Prentice to sell the house "many times over the years" to no avail. However, in support of this claim Endrizzi produced a single email she sent to Prentice in July 2020, two months before filing her motion to enforce the decree and shortly before Prentice was to get remarried. Prentice asserted that Endrizzi never raised the issue with him after 2012. He argued that Endrizzi forfeited all her rights to the house by signing the quit claim deed in 2012 and by surrendering the house as an asset on her bankruptcy petition. He also asserted that the statute of limitations and principles of equity barred Endrizzi's claim. The trial court ordered the home to be sold and for Endrizzi to receive half of any equity less $12,553.10 awarded to Prentice (constituting the $2,500 awarded in the decree and the money he spent in home upkeep). The trial court did not make findings of fact or conclusions of law in its order, although it did issue a letter ruling explaining the order. Prentice appeals. Endrizzi cross appeals.

ANALYSIS

The parties assert the trial court made several errors when it entered its order, including its interpretation of the quit claim deed's effect, the applicable statute of limitations, the application of equitable principles, and the court's modified award. Because we conclude that interpretation of the quit claim deed is dispositive of this case, we do not reach the other issues. Before analyzing the quit claim deed, we first examine rights created by the dissolution decree. Framing our analysis is our review of the trial court's order enforcing the dissolution decree which we review de novo. In re Marriage of Thompson, 97 Wn.App. 873, 877, 988 P.2d 499 (1999).

Dissolution Decree

In a dissolution proceeding, the trial court must" 'dispos[e] of the property and the liabilities of the parties, either community or separate, as shall appear just and equitable after considering all relevant factors.'" In re Marriage of Muhammad, 153 Wn.2d 795, 803, 108 P.3d 779 (2005) (alteration in original) (quoting RCW 26.09.080). To accomplish that end, trial courts have wide discretion to fashion a dissolution order that will address the circumstances of the parties. Bulicek v. Bulicek, 59 Wn.App. 630, 634, 800 P.2d 394 (1990). For example, when assets cannot be justly and equitably divided, a greater portion of the estate may be awarded to one spouse with an offsetting obligation to pay the other. See, e.g., In re Marriage of Tower, 55 Wn.App. 697, 780 P.2d 863 (1989) (husband awarded disproportionate share of community property but required to pay wife permanent maintenance). Likewise, an unequal division of property may be justified if it is offset by maintenance or similar compensating payments. Thompson v. Thompson, 82 Wn.2d 352, 357-58, 510 P.2d 827 (1973).

Parties to a dissolution action have the right to have their property interests definitively and finally determined in the decree. Stokes v. Polley, 145 Wn.2d 341, 347, 37 P.3d 1211 (2001). Therefore, courts have a duty to not award property to parties as tenants in common. Stokes, 145 Wn.2d at 347. Still, a court may award the family home to both parties as tenants in common when an option to purchase the property is outstanding, or subject to the requirement that the home be placed on the market within a fixed period of time. 20 Scott J. Horenstein, Washington Practice: Family Law and Community Property Law § 32:28 (2nd ed. 2015). Also, "[t]he parties may wish to remain owners of the home as tenants in common so they can both take advantage of potential increased equity based on market conditions." 20 Horenstein, supra, at 242. However, caution is required when leaving spouses as tenants in common, as issues may likely arise. 20 Horenstein, supra, at 242.

A common way for a court to structure a property distribution is to award a valuable asset-such as the family home-to one party, but subject to a requirement that either (1) the party awarded the asset pay a specified amount of money to the other party within a specified period of time, or (2) the asset be sold within a specified period of time and a specified amount of money paid to the other party out of the sale proceeds.

20 Horenstein, supra, § 32:32 at 247-48. Such obligations are typically secured by an equitable lien on the partitioned property to assure payment, sometimes called an owelty lien. In re Marriage of Wintermute, 70 Wn.App. 741, 744, 855 P.2d 1186 (1993); Hartley v. Liberty Park Assocs., 54 Wn.App. 434, 438, 774 P.2d 40 (1989).^[1] An equitable lien is not a property interest but rather a remedy intended to protect one party's right to reimbursement. Monegan v. Pacific Nat'l Bank of Wash., 16 Wn.App. 280, 287-88, 556 P.2d 226 (1976); 5 Tiffany Real Prop. § 1559 (3d ed) ("An equitable lien is the right to have property subjected in a court of equity to the payment of a claim. It is not a jus in re nor a jus ad rem; neither a debt nor a right of property, but a remedy for a debt."). It may be created by agreement of the parties or imposed by the dissolution decree. Wintermute, 70 Wn.App. at 745.

To create an equitable lien, the court must issue an express order that "fasten[s] the debt to real property that is before the court and specifically identified." Bank of Am., N.A. v. Owens, 173 Wn.2d 40, 49-50, 266 P.3d 211 (2011). "In determining whether the trial court created an equitable lien on a parcel of real estate, we look to the actual language of the judgment, read in its context and entirety." Owens, 173 Wn.2d at 50. And while helpful, "the term 'lien' is not required where the court's intent is clear." Owens, 173 Wn.2d at 50; see, e.g., Byrne v. Ackerlund, 108 Wn.2d 445, 446, 739 P.2d 1138 (1987); cf. Philbrick v. Andrews, 8 Wash. 7, 7, 9, 35 P. 358 (1894) (holding that an order imposing a "lien upon the property" of a...