Roy A. Ames et al., Respondents ,
Wesley B. Ames et al., Appellants
Oral Argument September 10, 2014
Appeal from Stevens Superior Court. Docket No: 11-2-00373-4. Judge signing: Honorable Allen C Nielson. Judgment or order under review. Date filed: 04/11/2013.
Wesley B. Ames, pro se.
Thomas F. Webster and Loyd J. Willaford (of Webster Law Office PLLC ), for appellants.
Chris A. Montgomery (of Montgomery Law Firm ), for respondents.
Concurring: Robert E. Lawrence-Berrey, Laurel H. Siddoway.
[184 Wn.App. 829] George B. Fearing,
[¶1] In 1997, Roy and Rubye Ames sold, without a written agreement, their property, consisting of farmland and timber, to their two oldest sons, Stanley and Wesley Ames. The parents retained a life estate. After another son moved to the property, the two oldest sons and their parents grew estranged. Roy and Rubye filed this action, asking the court to exercise its authority in equity to order title in the property returned to them. In the alternative, the parents sought recognition of their life estate and an unlimited right to control the property during their lives. The trial court awarded Roy
and Rubye a life estate in the property, including a limited right to harvest timber.
[¶2] Stanley and Wesley Ames appeal the timber award. We affirm the trial court.
[¶3] The Ames brothers do not challenge the trial court's findings of fact on appeal. We extensively rely on the findings in our recitation of facts.
[184 Wn.App. 830] [¶ 4] Roy Ames and Rubye Ames are respectively 92 and 84 years old. They have been married for 67 years. The couple has five children: Wesley Ames, Stanley Ames, Merita Dysart, Randy Ames, and Arleta Parr.
[¶5] The parents love their children, but in recent years and as a result of this lawsuit, have become estranged from the three older children, Wesley, Stanley, and Merita, who live in other states. The two younger children are presently close to Roy and Rubye. Despite their age, Roy and Rubye are fully competent and display a clear understanding of their financial affairs.
[¶6] In 1966, Roy and Rubye Ames acquired a quarter section of farm- and timberland in Stevens County. They have farmed the property and made improvements to the land since 1966 and have lived there continuously since 1976. They have managed the timber with occasional small scale logging. Their present income consists of a modest Social Security payment, occasional logging proceeds, limited farm income, and payments from Wesley and Stanley for the purchase of the property.
[¶7] In 1997, Roy and Rubye needed income to supplement their farm income. They considered a reverse mortgage but wanted the farm kept within the family. The youngest son, Randy Ames, and his family had moved to Lithuania. The parents conferred with their other children, and Wesley and Stanley were willing and financially able to help their parents.
[¶8] After careful discussions, Roy and Rubye Ames reached an agreement with sons Wesley and Stanley. Under the agreement, Wesley and Stanley would pay $216,000 over 30 years, with no interest, payable at $600 per month. If both Roy and Rubye died before full payment, the remaining payments would go to the other three children. Wesley and Stanley would then receive title to the real property, improvements, timber, and farm equipment. Roy and Rubye reserved a life estate, defined as including full possession, management, and control of the real property, [184 Wn.App. 831] improvements, timber, and farm equipment. The parties did not reduce the agreement to writing, but the agreement was restated in two e-mails from Stanley to Randy, on March 27 and March 29, 2009. Roy and Rubye Ames retained title to the property in their names.
[¶9] At trial, Roy Ames testified he always " intended to control the farm, or have somebody else do it" during his lifetime. He declared, " I'm on the farm, all aspects of the farm, until I die." Clerks Papers (CP) at 416. Both Wesley and Stanley Ames anticipate living on the Stevens County property upon their respective retirements. Each will have limited income at retirement.
[¶10] Since the 1997 agreement, Roy and Rubye Ames have continued in possession, management, and control of the real property along with the farm operation and the timber. On January 11, 2006, Roy and Rubye deeded the land to Wesley Ames and Ames Development Corporation " in consideration of love and affection." CP at 886. The deed reserved no life estate. The accompanying real estate excise tax affidavit declared that the transfer was a gift without consideration. All parties understood the 2006 conveyance was intended to insulate the property from creditors and, in particular, from the State for any future medical care.
[¶11] Beginning in 2009, Roy and Rubye Ames physically struggled to maintain the farm on their own. Roy and Rubye invited son Randy and his family, who had returned from Lithuania, to live on the farm so that Randy could help. The Ames family discussed building a house on the farm for Randy and his family. Wesley and Stanley, on the one hand, and Randy, on the other hand, negotiated a farm lease for Randy.
[¶12] On September 6, 2010, Stanley, as president of Ames Development Corporation,
entered both a rental agreement and a cash farm lease with Randy and his wife, Darlene. The farm lease allowed the " owners," Stanley and Ames Development Corporation, to " enter the property at any time for any purpose," and it partially limited Roy and [184 Wn.App. 832] Rubye's management of the timberland. CP at 417. The rental agreement and farm lease conflicted with Roy and Rubye Ames' life estate.
[¶13] In recent years, Wesley and Stanley Ames have interfered with Roy and Rubye's right, pursuant to their life estate, to full control and management of the farm. Randy has participated in the interference but with different motives and by different means. Randy Ames has sought to gain control and ownership of the property. Randy constructed an addition to Roy and Rubye's existing home, rather than building a new home. He manipulated his elderly parents and isolated them from their family and friends. On one occasion, Randy spirited Roy away for one week, took Rubye's cell phone, and prevented visits to his parents by neighbors, friends, and fellow church members.
[¶14] In January 2011, Ames Development Corporation and Wesley Ames entered a housing and farming agreement with Roy and Rubye Ames. The agreement sought to " establish a relationship" between the parties in light of Randy Ames being a tenant on the farm. CP at 417. It granted Roy and Rubye rights they already held under the oral life estate, such as the right to possession and the right to lease the premises. The agreement limited some of their rights, including the right to come and go, the right to manage the timber, and the right to determine farming activities. Finally, it granted Stanley, Ames Development Corporation, and Wesley rights they did not have under the oral life estate, such as the right to enter and remain on the land at any time, the right to construct and remove buildings, and the right to confer with Roy and Rubye about all farm activities. Stanley, Ames Development Corporation, and Wesley could cancel the agreement at any time.
[¶15] In July 2011, Stanley and Wesley Ames terminated the farm lease with Randy. Because of a lack of trust in Randy, Stanley and Wesley removed equipment from the farm to prevent Randy from farming. The two older brothers later returned the equipment.
[184 Wn.App. 833] PROCEDURE
[¶16] On July 15, 2011, Roy Ames filed suit against his three oldest children, Wesley Ames, Stanley Ames, and Merita Dysart. Roy requested either (1) title in the property with an equitable lien for Wesley and Stanley for payments made toward the purchase of the real property and to be paid after both he and Rubye die or (2) a life estate in the property with " total and absolute control of the property." CP at 14. Rubye Ames joined her husband as a plaintiff on October 25, 2011.
[¶17] Trial proceeded on September 4, 5, 6, 7, 11, and 12, 2012. On the first day, Roy and Rubye Ames moved to dismiss their alternative claim for a life estate. The court granted that motion but allowed Stanley and Wesley Ames to request, as a counterclaim, the same relief of a life estate for their parents.
[¶18] At trial, Roy and Rubye Ames testified to why a life estate was no longer feasible, how much timber they harvested in the past, and their expectations for harvests in the future. Roy Ames testified to logging about $2,000 in timber each year since the 1997 agreement. Roy and Rubye both testified that they expected to enjoy full use and control of the property until they died, which included " timber and everything else." Report of Proceedings (RP) (Sept. 4, 2012) at 56. Rubye Ames testified that she and her older children needed " a clean break" because they could no longer cooperate. RP (Sept. 4, 2012) at 59.
[¶19] During trial, Wesley and Stanley Ames voiced concern that Randy would clear cut the timber. Wesley testified, " We strongly believe that the timber will be harvested very heavily in order to obtain money, and we further expect that a substantial amount of that money would go under the control and use by Randy." RP (Sept. 11, 2012) at 726. Stanley testified that Randy
will likely enjoy the benefit of any logging, stating, " Well, he will rationalize it in terms of [184 Wn.App. 834] Mom and Dad receiving benefit, but actually, just like all of our farm payments - it - there it goes to Randy and Darleen almost entirely." RP (Sept. 11, 2012) at 856.
[¶20] To show that Roy competently managed the timber, Roy and Rubye offered a report from forester Robert Broden, entitled " Managing Your Woodlands: A template for your plans for the future," referred to as the " Broden report." CP at 1286. Stanley and Wesley objected to admission of the report as an exhibit on the ground of hearsay. The court admitted the report, ostensibly under the hearsay exception for business records. Rubye testified that she and Roy had no intention of clear-cutting the forest and planned to follow the report's recommendations to preserve the forest resource.
[¶21] In the Broden report, Robert Broden recommended thinning of the forest to promote overall growth. In relevant portion, Broden wrote:
The Lodgepole Pine on the property in particular has reached an age and condition where growth has slowed and increased natural mortality will become an annual event. In addition, there are areas of crown closure of the Douglas Fir and Grand Fir where some commercial thinning of the trees will promote or at least maintain healthier growth conditions for the remaining timber.
A salvage operation which would select the obvious mature trees susceptible to disease or damage for removal as well as a commercial thinning to space the mature trees to about 24 feet by 24 feet should promote healthy and disease resistant trees for future growth while maintaining wildlife habitat for deer, elk, bear and other small mammals. Scattered cavity nesting sites and raptor nests were noted in snags and timber on the property as well as on adjacent ownerships to the west and south. A reduction of the wildfire potential is also sought by removing dead and down fuels.
CP at 393.
[¶22] [184 Wn.App. 835] Robert Broden further wrote:
Removal of the old Lodgepole Pine around the perimeter of the fields and a commercial thinning operation in the thicker canopied areas is proposed to promote understory foreage [sic] vegetation while still maintaining a substantial and healthy timber volume on the property.
CP at 400. Under the heading " Management of Forest Resources," Broden advised,
Protection from Pests
Observed insect pests on the property noted during the timber cruise included moderate bark beetle activity in the Lodgepole Pine and Fir Engraver beetle in the Grand Fir. Pathogens noted were minor problems with Douglas Fir Mistletoe in certain areas and a moderate amount of Mistletoe in the Western Larch. Harvest operations should work at eradicating these problems in the trees selected for removal.
CP at 401.
[¶23] Robert Broden estimated the first two years of recommended thinning would yield about 400 mbf. " Mbf" is one thousand board feet of timber.
Meeting management goals will require an initial focus on the Lodgepole Pine and Grand Fir growing on the property around the meadow edges. Most of this is on the south and east sides of the meadow. The Lodgepole Pine is at a mature age and dying. In a few spots it has fallen down adding to the wildfire hazard. There is over 300 mbf of lodgepole pine on the property according to the timber cruise and the inspecting forester recommends the merchantable ones be removed in the initial harvesting as well as cleaning up the dead and down trees already in place. In addition, the Grand Fir is clustered on the southwest edge of the meadow on the most productive soils on the property for forage or timber production. Grand Fir is a poor market performer long term and is also more susceptible to insects and disease than other species present on the site. Several individual Grand Fir trees showed defect and disease in the walk through. Because of this, the removal of the Grand Fir at the earliest market opportunity and
its replacement with either seedlings of another species or forage is highly recommended. [184 Wn.App. 836] The selective removal of the Lodgepole Pine and Grand Fir as well as the removal of other species that are diseased or defective would generate approximately 400 mbf initially in the first two years and promote considerable reduction in the fire hazard potential and increased growth in forage and timber production.
CP at 402-03.
[¶24] Robert Broden further wrote:
Best Management Practices
Best Management practices would include the proper timing of harvests to avoid potential insect issues with the Pine IPS bark beetle. To avoid IPS, operation activities should occur after July 1 and cease prior to March 15 on any calendar year. This allows the slash created to dry out prior to the normal beetle flights in June. Harvest operations should occur during dry or frozen soil conditions to prevent soil compaction and subsequent loss of soil pore space.
CP at 407. Robert Broden also recommended, due to fluctuations in the local timber market, that a log purchase agreement be in place prior to any logging.
[¶25] Against their wishes, the trial court awarded Roy and Rubye Ames a life estate. As for timber, the trial court orally ruled:
I want to accord Mr. and Mrs. Ames here the ability to use their timber as long as it's not, again, wasteful, and it's something that - but, that is a - that is something that's common in this area. When people get older, they have that resource and they're able to use it. So, that's the timber and the logging.
RP (Sept. 12, 2012) at 1029-30. When Roy and Rubye's counsel requested greater clarity, the trial court asked counsel for suggestions.
[¶26] Roy and Rubye Ames suggested that timber harvesting could be " in accordance with [Department of Natural Resources] rules and regulations" or conform to the Broden [184 Wn.App. 837] timber management plan already in evidence. RP (Sept. 12, 2012) at 1032. Stanley and Wesley Ames argued against the first option as allowing almost unlimited logging. The two older brothers agreed to the use of ...