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.