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Bank of America, N.A. v. Owens

Court of Appeals of Washington, Division 1

October 14, 2013

BANK OF AMERICA, N.A., a national association, Respondent,
v.
J'Amy Lyn OWENS, an unmarried person; Shulkin Hutton, Inc., P.S., a Washington professional service corporation; and Edmund John Wood, Defendants, Kenneth Treiger, a married person as to his separate estate, Appellant.

Page 595

Catherine Wright Smith, Valerie A. Villacin, Smith Goodfriend PS, Jerry Richard Kimball, Attorney at Law, Cynthia B. Whitaker, Law Offices of Cynthia B. Whitaker, Seattle, WA, for Appellant.

Edmund John Wood, Wood & Jones PS, Seattle, WA, Jerome Shulkin, Shulkin Hutton Inc. PS, Mercer Island, WA, for Defendants.

Thomas Scott Linde, Zachary E. Davies, Schweet Linde & Coulson, PLLC, Lisa M. Johnson, Schweet, Rieke & Linde, PLLC, Seattle, WA, for Respondent.

GROSSE, J.

[177 Wn.App. 183] ¶ 1 An appellate court's mandate is the law of the case and binding on the lower court and must be followed. Here, both this court and the Supreme Court held that appellant Kenneth Treiger's lien on the real property at issue had priority over Bank of America's lien.[1] On remand, the trial court had no authority to revisit the Bank's in rem claim that the trial court " preserved and tolled" when it rendered summary judgment in favor of the Bank on its other claim. The in rem claim was not raised on review of the summary judgment and the claim was, therefore, abandoned. The trial court had no authority to ignore the Supreme Court's mandate on remand. Accordingly [177 Wn.App. 184], we reverse the summary judgment and remand with directions that the trial court enter judgment consistent with the Supreme Court's opinion and mandate.

FACTS

¶ 2 Kenneth Treiger and J'Amy Lyn Owens married in July 1997. Treiger and Owens separated on June 1, 2000 and filed for dissolution in February 2001.

Page 596

¶ 3 In January 2002, during the pendency of the dissolution action but before entry of a decree of dissolution, Treiger filed a chapter 13 bankruptcy petition, which was converted to a chapter 7 bankruptcy in April 2002. In February 2002, Owens filed a separate chapter 11 bankruptcy petition.

¶ 4 The bankruptcy court in Treiger's case lifted the stay to allow the parties' dissolution action to proceed in superior court. The superior court entered a decree of dissolution on June 19, 2002 and reserved property and debt issues until the bankruptcy proceedings concluded.

¶ 5 Between the date of separation and the entry of a decree of dissolution, Treiger and Owens purchased real property referred to as the " Maplewood property" as husband and wife. The bankruptcy court determined that this property was community property and therefore property of Treiger's bankruptcy estate.

¶ 6 While the parties were married, Owens, as part owner of a business called The Retail Group, executed a promissory note and borrowing agreement in favor of Bank of America, N.A. (the Bank). The Retail Group defaulted under the note and agreement, and the Bank filed a claim in Treiger's bankruptcy action.

¶ 7 In April 2004, nearly two years after entry of the decree of dissolution, Treiger's trustee and Owens entered into a settlement agreement in which the trustee agreed to convey his entire interest in the Maplewood property to Owens, subject to all liens of record against the property, in [177 Wn.App. 185] exchange for $215,000 from Owens. By trustee's quitclaim deed dated April 29, 2004, the trustee conveyed all of the bankruptcy estate's interest in the Maplewood property to Owens, " a single individual." The Maplewood property thus became Owens' separate property.

¶ 8 Treiger's chapter 7 case was closed in March 2005 and any obligation he owed to the Bank was discharged. Owens' chapter 11 case was dismissed in July 2005.

¶ 9 Treiger and Owens then returned to superior court to complete the property distribution in their dissolution action. In May 2006, the superior court entered a supplemental decree of dissolution (Supplemental Decree), dividing their assets and liabilities. In the Supplemental Decree, the court ordered that the Maplewood property be sold and that Treiger be awarded one-half of the net proceeds of the sale. The court also entered several orders awarding Treiger varying amounts of fees and sanctions for Owens' intransigence during the dissolution proceedings. Treiger recorded the Supplemental Decree as well as other orders pertaining to fees and sanctions on October 27, 2006.

¶ 10 Meanwhile, in July 2006, the Bank filed an action against Owens, seeking payment of the debt she guaranteed. In November 2006, the Bank amended its complaint to add a claim in rem against any separate property of Owens awarded to Treiger. The Bank moved for a prejudgment writ of attachment on the Maplewood property. The trial court granted the Bank's motion and directed the issuance of a prejudgment writ of attachment on the Maplewood property against only Owens' interest in the property. A writ of attachment issued in accordance ...


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