Goodman v. Goodman
128 Wash.2d 366, 907 P.2d 290 (1995)
Clive gave his mother Gladys power
of attorney. He also transferred his
business to her.
Gladys sold the business and
put the money in her bank account.
Clive died leaving four kids
and an ex-wife.
Eight years after Clive's
death, one of the kids, Scott, asked Gladys for the money from the sale of
the business. Gladys said that she deserved all the money because she had
taken care of Clive when he was sick.
Scott sued Gladys, alleging
that Clive intended for Gladys to simply hold the property in trust for
his children.
Gladys pleaded laches in her defense.
Laches is basically estoppel
by delay, meaning that Scott should
be barred from making this claim because he'd waited too long.
There was some debate over
whether Clive had a will. His ex-wife said he did, but Gladys said he
didn't...
The Trial Court instructed the
jury to determine if the property transfer was a gift or a trust.
The jury came back with a
verdict in favor of the children, and said that the property had been
held in trust.
However, the judge issued a judgment
as a matter of law (aka a JMOL or a
JNOV), and found that the children had waited too long to make their
claim. The children appealed.
The Appellate Court affirmed
the ruling. The children appealed.
The Appellate Court found that
since the children were arguing that the property was held in trust for
them until they turned 18, they should have noticed that they weren't
getting any money every time one of them had turned 18. They had not
done due diligence in support of their rights.
The Washington Supreme Court
reversed the JNOV and remanded for trial.
The ex-wife had testified
that Gladys told her that she would keep the money until the children
"were older."
It was never specified how
old was 'older'.
The Washington Supreme Court
construed this as the formation of an oral trust.
In order to establish an oral
trust, you need clear and
convincing evidence.
Under Washington State law,
actions based on a trust are subject to a three year Statute of
Limitations, which starts running when the beneficiary learns, or should
have learned, that the trust had been repudiated.
Repudiation only occurs
when the trustee, by words or conduct, denies that the trust exists.
This could be the time when
Scott asked Gladys for the money, or it could be the time when the first
payment was due.
Thus, a question of
material fact existed as to when the trust was repudiated. Therefore a
JNOV was inappropriate.